LABOR RELATIONS
Professor: Atty. Arnold E. Cacho
Source: Azucena, Cesario Alvero Jr. (2007). THE LABOR CODE WITH COMMENTS AND CASES (Vol. II). Quezon City: Rex Printing Company,
Inc.
BOOK FIVE
LABOR RELATIONS
Title I
POLICY AND DEFINITIONS
Chapter I
POLICY
Art. 211. Declaration of Policy.
A. It is the policy of the State:
a. To promote and emphasize the primacy of free
collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation, as
modes of settling labor or industrial disputes;
b. To promote free trade unionism as an instrument
for the enhancement of democracy and the
promotion of social justice and development;
c. To foster the free and voluntary organization of a
strong and united labor movement;
d. To promote the enlightenment of workers
concerning their rights and obligations as union
members and as employees;
e. To provide an adequate administrative machinery
for the expeditious settlement of labor or industrial
disputes;
f. To ensure a stable but dynamic and just industrial
peace; and
g. To ensure the participation of workers in decision
and policy-making processes affecting their rights,
duties and welfare.
B. To encourage a truly democratic method of regulating the
relations between the employers and employees by means of
agreements freely entered into through collective bargaining,
no court or administrative agency or official shall have the
power to set or fix wages, rates of pay, hours of work or other
terms and conditions of employment, except as otherwise
provided under this Code. (As amended by Section 3, Republic
Act No. 6715, March 21, 1989)
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1. OVERVIEW AND VIEWPOINT
“Labor Standards” refers to the minimum terms and conditions
of employment which employees are legally entitled to and
employers must comply with.
“Labor Relations” refers to the interactions between employer
and employees or their representatives and the mechanism by
which the standards and other terms and conditions of
employment are negotiated, adjusted and enforced.
The government labor relations policy is declared in Art. 211
which is a focused elaboration of the basic labor policy
announced in Art.3 which, in turn, echoes the constitutional
mandates. The policy intends to attain social justice through
industrial peace and progress. The latter is founded on
employee participation and collective interactions between
employer and employees. In Management parlance, the input
is the parties’ rights and duties, the process is worker’s
organization and collective bargaining, and the output is
industrial peace and progress towards social justice as the end
goal.
Work stoppage—known as “strike” by employees or “lockout”
by the employer—is not favoured in law. It is recognized as a
legal right but regulated as to the purpose and manner of doing
it. Deviation from the mandatory requirements has adverse
consequences to the violators. Work stoppage, because it is
counter-productive, is and has to be considered a measure of
last resort.
The principle behind labor unionism in private industry is that
industrial peace cannot be secured through compulsion by law.
Relations between private employers and their employees rest
on an essentially voluntary basis. Subject to the minimum
requirements of wage laws and other labor and welfare
legislation, the terms and conditions of employment in the
unionized private sector are settled through the process of
collective bargaining.
Because labor relations are primarily “domestic,” third parties,
even the Government, shy away from meddling, as much as it
can be helped. This is why an in-house problem solving
structure, called grievance machinery, is a requirement in CBAs.
If this machinery fails, the parties themselves are free to select
any third party, called voluntary arbitrator, to resolve their
differences.
The laws, as a force that balances the parties’ rights and
1
obligations, are admittedly necessary in the industrial setting.
2. WORKERS’ ORGANIZATION
A labor or trade union is a combination of workmen organized
for the ultimate purpose of securing through united action the
most favourable conditions as regards wages, hours of labor,
conditions of employment, etc., for its members.
In the popular sense a labor union is understood to be a
completely organized body of dues-paying members, operating
through elected officers and constituting a militant, vital and
functioning organ. It may be said that while every labor union is
a labor organization, not every labor organization is a labor
union. The difference is one of organization, composition and
operation.
1 Art. 1700. The relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts
must yield to the common good.
Art. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith.

3. WHY WORKERS ORGANIZE
Self-help through economic action necessarily requires
increasing the bargaining power of employees; hence one of
the basic purposes of a labor union is to eliminate competition
among employees in the labor market.
Three other human desires should be noted among the forces
that led workers to organize:
(1) One is the desire for job security.
(2) Employees wished to substitute what we should term “the
rule of law” for the arbitrary and often capricious exercise of
power by the boss.
(3) Finally, unions helped to give employees a sense of
participation in the business enterprises of which they are
part—a function of labor unions which became important as
organizations spread into mass production industries.
The union is the recognized instrumentality and mouthpiece of
the laborers.
4. ILO CONVENTION NO. 87
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Chapter II
DEFINITIONS
Art. 212. Definitions.
a. "Commission" means the National Labor Relations
Commission or any of its divisions, as the case may be, as
provided under this Code.
b. "Bureau" means the Bureau of Labor Relations and/or the
Labor Relations Divisions in the regional offices established
under Presidential Decree No. 1, in the Department of Labor.
c. "Board" means the National Conciliation and Mediation
Board established under Executive Order No. 126.
d. "Council" means the Tripartite Voluntary Arbitration Advisory
Council established under Executive Order No. 126, as
amended.
e. "Employer" includes any person acting in the interest of an
employer, directly or indirectly. The term shall not include any
labor organization or any of its officers or agents except when
acting as employer.
f. "Employee" includes any person in the employ of an
employer. The term shall not be limited to the employees of a
particular employer, unless the Code so explicitly states. It shall
include any individual whose work has ceased as a result of or
in connection with any current labor dispute or because of any
unfair labor practice if he has not obtained any other
substantially equivalent and regular employment.
g. "Labor organization" means any union or association of
employees which exists in whole or in part for the purpose of
collective bargaining or of dealing with employers concerning
terms and conditions of employment.
h. "Legitimate labor organization" means any labor organization
duly registered with the Department of Labor and Employment,
and includes any branch or local thereof.
i. "Company union" means any labor organization whose
formation, function or administration has been assisted by any
act defined as unfair labor practice by this Code.
j. "Bargaining representative" means a legitimate labor
organization whether or not employed by the employer.
k. "Unfair labor practice" means any unfair labor practice as
expressly defined by the Code.
l. "Labor dispute" includes any controversy or matter
concerning terms and conditions of employment or the
association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of
employment, regardless of whether the disputants stand in the
proximate relation of employer and employee.
m. "Managerial employee" is one who is vested with the
powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees. Supervisory
employees are those who, in the interest of the employer,
effectively recommend such managerial actions if the exercise
of such authority is not merely routinary or clerical in nature
but requires the use of independent judgment. All employees
not falling within any of the above definitions are considered
rank-and-file employees for purposes of this Book.
n. "Voluntary Arbitrator" means any person accredited by the
Board as such or any person named or designated in the
Collective Bargaining Agreement by the parties to act as their
Voluntary Arbitrator, or one chosen with or without the
assistance of the National Conciliation and Mediation Board,
pursuant to a selection procedure agreed upon in the Collective
Bargaining Agreement, or any official that may be authorized by
the Secretary of Labor and Employment to act as Voluntary
Arbitrator upon the written request and agreement of the
parties to a labor dispute.
o. "Strike" means any temporary stoppage of work by the
concerted action of employees as a result of an industrial or
labor dispute.
p. "Lockout" means any temporary refusal of an employer to
furnish work as a result of an industrial or labor dispute.
q. "Internal union dispute" includes all disputes or grievances
arising from any violation of or disagreement over any
provision of the constitution and by-laws of a union, including
any violation of the rights and conditions of union membership
provided for in this Code.
r. "Strike-breaker" means any person who obstructs, impedes,
or interferes with by force, violence, coercion, threats, or
intimidation any peaceful picketing affecting wages, hours or
conditions of work or in the exercise of the right of self-
organization or collective bargaining.
s. "Strike area" means the establishment, warehouses, depots,
plants or offices, including the sites or premises used as
runaway shops, of the employer struck against, as well as the
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immediate vicinity actually used by picketing strikers in moving
to and fro before all points of entrance to and exit from said
establishment. (As amended by Section 4, Republic Act No.
6715, March 21, 1989)
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1. EMPLOYER-EMPLOYEE RELATIONSHIP ESSENTIAL
The existence of employer-employee relationship, as explained
in Book III, is determined by the presence of the following
elements, namely:
(a) selection and engagement of the employee;
(b) payment of wages;
(c) power to dismiss; and
(d) power to control the employee’s conduct.
The fourth is the most important element.
2. WHO ARE EMPLOYEES
The term “employee”:
(1) shall include any employee
(2) and shall not be limited to the employee of any particular
employer, unless the Act so explicitly states otherwise
(3) and shall include any individual
(a) whose work has ceased as a result of, or in
connection with any current labor dispute
(b) and who has not obtained any other substantially
equivalent and regular employment.
“Employee” refers to any person working for an employer. It
includes one whose work has ceased in connection with any
current labor dispute or because of any unfair labor practice
and one who has been dismissed from work but the legality of
the dismissal is being contested in a forum of appropriate
jurisdiction.
“Employer” refers to any person or entity who employs the
services of others, one for whom employees work and who
pays their wages or salaries. An employer includes any person
directly or indirectly acting in the interest of an employer. It
shall also refer to the enterprise where a labor organization
operates or seeks to operate.
An employer may be brought into bargaining and economic
relationship with persons not in his actual employ; such
persons are given the status and tights of “employees” in
relation to him, in order to accord to them the protection of the
Act. Thus, The nature of a “labor dispute” does not require that
the disputants should stand in the proximate relation of
employer and employee, with consequent protection of
concerted activities carried out by many persons belonging to
several employers.
2.1 “One whose work has ceased...”
Cessation of work due to strike or lockout, or to dismissal or
suspensions constituting unfair labor practices, does not in
itself affect the “employee” status, in the sense that the rights
and benefits of the employee are protected as though there
had been no interruption of service, effective upon actual
return to work.
3. LABOR ORGANIZATION AS EMPLOYER
Exceptionally, a labor organization may be deemed an
“employer” when it is acting as such in relation to persons
rendering services under hire, particularly in connection with its
activities for profit or gain.
4. LABOR DISPUTE
The test of whether a labor controversy comes within the
definition of a labor dispute depends on whether it involves or
concerns terms, conditions of employment or representation.
The existence of a labor dispute is not negative by the fact that
the plaintiffs and defendants do not stand in the proximate
relation of employer and employee.
5. LABOR DISPUTES AND REMEDIES: A SUMMARY
5.1 Definition
“Labor Dispute” includes any controversy or matter concerning
terms and conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining,
changing or arranging the terms and conditions of employment,
regardless of whether the disputants stand in the proximate
relation of employer and employee.
5.2 Tests or Criteria of “Labor Dispute”
A. Nature: Dispute arises from employer-employee
relationship, although disputants need not be proximately
“employee” or “employer” of the other.
B. Subject matter: Dispute concerns (1) terms or conditions of
employment; or (2) association or representation of persons in
negotiating, fixing, maintaining, or changing terms or conditions
of employment.
5.3 Kinds of Labor Disputes
A. Labor Standards Disputes:
(1) Compensation – (underpayment of minimum wage)
(2) Benefits – (nonpayment of holiday pay)
(3) Working conditions – (unrectified work hazards)
B. Labor Relations Disputes:
(1) Organizational Right Dispute/ ULP – (coercion)
(2) Representation Disputes – (determination of appropriate
collective bargaining unit)
(3) Bargaining Disputes – (refusal to bargain)
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(4) Contract Administration or Personnel Policy Disputes –
(noncompliance with CBA provision)
(5) Employment Tenure Disputes – (nonregularization of
employees)
5.4 Remedies in Labor Disputes (SEE TABLE 1)
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Title II
NATIONAL LABOR RELATIONS COMMISSION
Chapter I
CREATION AND COMPOSITION
Art. 213. National Labor Relations Commission. There shall be a
National Labor Relations Commission which shall be attached
to the Department of Labor and Employment for program and
policy coordination only, composed of a Chairman and fourteen
(14) Members.
Five (5) members each shall be chosen from among the
nominees of the workers and employers organizations,
respectively. The Chairman and the four (4) remaining
members shall come from the public sector, with the latter to
be chosen from among the recommendees of the Secretary of
Labor and Employment.
Upon assumption into office, the members nominated by the
workers and employers organizations shall divest themselves of
any affiliation with or interest in the federation or association
to which they belong.
The Commission may sit en banc or in five (5) divisions, each
composed of three (3) members. Subject to the penultimate
sentence of this paragraph, the Commission shall sit en banc
only for purposes of promulgating rules and regulations
governing the hearing and disposition of cases before any of its
divisions and regional branches, and formulating policies
affecting its administration and operations. The Commission
shall exercise its adjudicatory and all other powers, functions,
and duties through its divisions. Of the five (5) divisions, the
first, second and third divisions shall handle cases coming from
the National Capital Region and the parts of Luzon; and the
fourth and fifth divisions, cases from the Visayas and
Mindanao, respectively; Provided that the Commission sitting
en banc may, on temporary or emergency basis, allow cases
within the jurisdiction of any division to be heard and decided
by any other division whose docket allows the additional
workload and such transfer will not expose litigants to
unnecessary additional expense. The divisions of the
Commission shall have exclusive appellate jurisdiction over
cases within their respective territorial jurisdictions. [As
amended by Republic Act No. 7700].
The concurrence of two (2) Commissioners of a division shall be
necessary for the pronouncement of judgment or resolution.
Whenever the required membership in a division is not
complete and the concurrence of two (2) commissioners to
arrive at a judgment or resolution cannot be obtained, the
Chairman shall designate such number of additional
Commissioners from the other divisions as may be necessary.
The conclusions of a division on any case submitted to it for
decision shall be reached in consultation before the case is
assigned to a member for the writing of the opinion. It shall be
mandatory for the division to meet for purposes of the
consultation ordained herein. A certification to this effect
signed by the Presiding Commissioner of the division shall be
issued and a copy thereof attached to the record of the case
and served upon the parties.
The Chairman shall be the Presiding Commissioner of the first
division and the four (4) other members from the public sector
shall be the Presiding Commissioners of the second, third,
fourth and fifth divisions, respectively. In case of the effective
absence or incapacity of the Chairman, the Presiding
Commissioner of the second division shall be the Acting
Chairman.
The Chairman, aided by the Executive Clerk of the Commission,
shall have administrative supervision over the Commission and
its regional branches and all its personnel, including the
Executive Labor Arbiters and Labor Arbiters.
The Commission, when sitting en banc shall be assisted by the
same Executive Clerk and, when acting thru its Divisions, by
said Executive Clerks for the second, third, fourth and fifth
Divisions, respectively, in the performance of such similar or
equivalent functions and duties as are discharged by the Clerk
of Court and Deputy Clerks of Court of the Court of Appeals. (As
amended by Section 5, Republic Act No. 6715, March 21, 1989)
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Art. 214. Headquarters, Branches and Provincial Extension
Units. The Commission and its First, Second and Third divisions
shall have their main offices in Metropolitan Manila, and the
Fourth and Fifth divisions in the Cities of Cebu and Cagayan de
Oro, respectively. The Commission shall establish as many
regional branches as there are regional offices of the
Department of Labor and Employment, sub-regional branches
or provincial extension units. There shall be as many Labor
Arbiters as may be necessary for the effective and efficient
operation of the Commission. Each regional branch shall be
headed by an Executive Labor Arbiter. (As amended by Section
6, Republic Act No. 6715, March 21, 1989)
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1. NLRC: NATURE AND ORGANIZATION
1.1 Creation and Autonomy
Before the advent of the Labor Code the labor court was the
Court of Industrial Relations. When martial law was declared in
September 1972, PD No. 21 (October 14, 1972) abolished the
CIR and replaced it with an ad hoc National Labor Relations
Commission. This NLRC was short-lived as it gave way to the
NLRC which the Labor Code created in 1974.
1.2 Administrative Supervision Delegated to the DOLE Secretary
Executive Order No. 204 delegated to the Secretary of Labor
“administrative supervision over the NLRC, its regional
branches and all its personnel.” The Order cited two objectives:
(1) to further improve the rate of disposition of cases and (2) to
enhance existing measures for the prevention of graft and
corruption in the NLRC.
1.3 Essential Character
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Under Republic Act No. 6715 in 1989, as under the former law,
the National Labor Relations Commission continues to act
collegially, whether it performs administrative or rule-making
functions or exercises appellate jurisdiction to review decisions
and final orders of the Labor Arbiters.
1.4 Tripartite Composition
The same Article 213, as amended, provides that the Chairman
and twenty-three members composing the National Labor
Relations Commission shall be chosen from the workers,
employers and the public sectors.
1.5 Allocation of Powers Between NLRC En Banc and Its Division
The “division: is a legal entity, not the persons who sit in it.
Hence, an individual commissioner has no adjudicatory power,
although, of course, he can concur or dissent in deciding a case.
The law lodges the adjudicatory power on each of the eight
divisions, not on the individual commissioners not on the whole
commission.
1.6 The NLRC Rules of Procedure
“The 2005 Revised Rules of Procedure of the National Labor
Relations Commission” was published in newspapers on
December 23, 2005 and took effect on January 7, 2006.
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Art. 215. Appointment and Qualifications. The Chairman and
other Commissioners shall be members of the Philippine Bar
and must have engaged in the practice of law in the Philippines
for at least fifteen (15) years, with at least five (5) years
experience or exposure in the field of labor-management
relations, and shall preferably be residents of the region where
they are to hold office. The Executive Labor Arbiters and Labor
Arbiters shall likewise be members of the Philippine Bar and
must have been engaged in the practice of law in the
Philippines for at least seven (7) years, with at least three (3)
years experience or exposure in the field of labor-management
relations: Provided, However, that incumbent Executive Labor
Arbiters and Labor Arbiters who have been engaged in the
practice of law for at least five (5) years may be considered as
already qualified for purposes of reappointment as such under
this Act. The Chairman and the other Commissioners, the
Executive Labor Arbiters and Labor Arbiters shall hold office
during good behavior until they reach the age of sixty-five
years, unless sooner removed for cause as provided by law or
become incapacitated to discharge the duties of their office.
The Chairman, the division Presiding Commissioners and other
Commissioners shall be appointed by the President, subject to
confirmation by the Commission on Appointments.
Appointment to any vacancy shall come from the nominees of
the sector which nominated the predecessor. The Executive
Labor Arbiters and Labor Arbiters shall also be appointed by the
President, upon recommendation of the Secretary of Labor and
Employment and shall be subject to the Civil Service Law, rules
and regulations.
The Secretary of Labor and Employment shall, in consultation
with the Chairman of the Commission, appoint the staff and
employees of the Commission and its regional branches as the
needs of the service may require, subject to the Civil Service
Law, rules and regulations, and upgrade their current salaries,
benefits and other emoluments in accordance with law. (As
amended by Section 7, Republic Act No. 6715, March 21, 1989)
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REQUIRING CONFIRMATION BY COMMISSION ON
APPOINTMENTS, UNCONSTITUTIONAL
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Art. 216. Salaries, benefits and other emoluments. The
Chairman and members of the Commission shall receive an
annual salary at least equivalent to, and be entitled to the same
allowances and benefits as those of the Presiding Justice and
Associate Justices of the Court of Appeals, respectively. The
Executive Labor Arbiters shall receive an annual salary at least
equivalent to that of an Assistant Regional Director of the
Department of Labor and Employment and shall be entitled to
the same allowances and benefits as that of a Regional Director
of said Department. The Labor Arbiters shall receive an annual
salary at least equivalent to, and be entitled to the same
allowances and benefits as that of an Assistant Regional
Director of the Department of Labor and Employment. In no
case, however, shall the provision of this Article result in the
diminution of existing salaries, allowances and benefits of the
aforementioned officials.(As amended by Section 8, Republic
Act No. 6715, March 21, 1989)
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Chapter II
POWERS AND DUTIES
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
a. Except as otherwise provided under this Code, the Labor
Arbiters shall have original and exclusive jurisdiction to hear
and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without
extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement,
those cases that workers may file involving wages,
rates of pay, hours of work and other terms and
conditions of employment;
4. Claims for actual, moral, exemplary and other
forms of damages arising from the employer-
employee relations;
5. Cases arising from any violation of Article 264 of
this Code, including questions involving the legality of
strikes and lockouts; and
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other
claims arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.
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b. The Commission shall have exclusive appellate jurisdiction
over all cases decided by Labor Arbiters.
c. Cases arising from the interpretation or implementation of
collective bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies
shall be disposed of by the Labor Arbiter by referring the same
to the grievance machinery and voluntary arbitration as may be
provided in said agreements. (As amended by Section 9,
Republic Act No. 6715, March 21, 1989)
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1. ADDITIONAL CASES
To the six (6) kinds of cases mentioned in Article 217, the
following should be added:
1. Money claims arising out of employer-employee relationship
or by virtue of any law or contract, involving Filipino workers
for overseas deployment, including claims for actual, moral,
exemplary and other forms of damages, as well as employment
termination of OFWs;
2. Wage distortion disputes in unorganized establishments not
voluntarily settled by the parties pursuant to Republic Act No.
6727, as reflected in Article 124;
3. Enforcement of compromise agreements when there is non-
compliance by any of the parties pursuant to Article 227 of the
Labor Code, as amended; and
4. Other cases as may be provided by law.
2. COMPULSORY ARBITRATION BY LABOR ARBITERS
In its broad sense, arbitration is the reference of a dispute to an
impartial third person, chosen by the parties or appointed by
statutory authority to hear and decide the case in controversy.
When the consent of one of the parties is enforced by statutory
provisions, the proceeding is referred to as compulsory
arbitration. In labor cases, compulsory arbitration is the process
of settlement of labor disputes by a government agency which
has the authority to investigate and to make an award which is
binding on all the parties.
2.1 NLRC Appellate Proceedings Not Part of Arbitration
Under the Labor Code, it is the Labor Arbiter who is clothed
with the authority to conduct compulsory arbitration on cases
involving termination disputes and other cases under Art. 217.
When the Labor Arbiter renders his decision, compulsory
arbitration is deemed terminated because by then the hearing
and determination of the controversy has ended.
2.2 Nature of Proceedings
The NLRC Rules describe the proceedings before the Labor
Arbiter as non-litigious. Subject to the requirements of due
process, the technicalities of law and procedure in the regular
courts do not apply in NLRC/labor arbiter proceedings (Art.
221). The arbiter may avail himself of all reasonable means,
including ocular inspection, to ascertain the facts speedily; he
shall personally conduct the conference or hearings and take
full control of the proceedings. (Rule V, Sec. 2, NLRC 2005 Rules
of Procedure)
2 3
2.3 Article 217 Yields to Arts. 261 and 262
3. LABOR ARBITER’S JURISDICTION, IN GENERAL
The cases labor arbiter can hear and decide are employment-
related.
3.1 Supervisory Control, Crucial
Control over the performance of the work is the crucial
indicator of employment relationship, without which the labor
arbiter has no jurisdiction over the dispute.
It is well-settled in law and jurisprudence that where no
employer-employee relationship exists between the parties and
no issue is involved which may be resolved by reference to the
Labor Code, other labor statutes, or any collective bargaining
agreement, it is the Regional Trial Court that has jurisdiction.
4. VENUE
The NLRC Rules of Procedure provides:
Section 1. Venue. - a) All cases which Labor Arbiters have authority to
hear and decide may be filed in the Regional Arbitration Branch having
jurisdiction over the workplace of the complainant or petitioner.
For purposes of venue, the workplace shall be understood as the place
or locality where the employee is regularly assigned at the time the
cause of action arose. It shall include the place where the employee is
supposed to report back after a temporary detail, assignment, or travel.
In case of field employees, as well as ambulant or itinerant workers,
their workplace is where they are regularly assigned, or where they are
supposed to regularly receive their salaries and wages or work
instructions from, and report the results of their assignment to, their
employers.
b) Where two (2) or more Regional Arbitration Branches have
jurisdiction over the workplace of the complainant or petitioner, the
Branch that first acquired jurisdiction over the case shall exclude the
others.
c) When venue is not objected to before the filling of position papers
such issue shall be deemed waived.
d) The venue of an action may be changed or transferred to a different
Regional Arbitration Branch other than where the complaint was filed
by written agreement of the parties or when the Commission or Labor
Arbiter before whom the case is pending so orders, upon motion by the
proper party in meritorious cases.
e) Cases involving overseas Filipino workers may be filed before the
Regional Arbitration Branch having jurisdiction over the place where
the complainant resides or where the principal office of any of the
respondents is situated, at the option of the complainant.
4.1 Worker’s Option
The worker, being the economically-disadvantaged party—
whether as complainant/petitioner or as respondent, as the
2 A voluntary arbitrator, under Art. 261, has “original and exclusive”
jurisdiction over disputes concerning CBA implementation or personnel
policy enforcement.
3 In addition, under Art. 262, the parties may submit to a voluntary arbitrator
(or panel) “all other disputes including unfair labor practices and bargaining
deadlocks.
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case may be—the nearest governmental machinery to settle
the dispute must be placed at his immediate disposal.
4.2 Waiver
The 2005 NLRC Rules, in Sec. 1(c), Rule IV states: “When venue
is not objected to before the filling of position papers such issue
shall be deemed waived.”
5. LABOR ARBITER’S JURISDICTION: U.L.P. CASES
But its essence, captured in Art. 246, is any act intended or
directed to weaken or defeat the worker’s rights to self-
organize or to engage in lawful concerted activities. In short,
unfair labor practice, when committed by an employer, carries
the effect of anti-unionism.
6. CBA VIOLATION AMOUNTING TO ULP
Certainly, violations of the collective bargaining agreement
would be unfair labor practice which falls under the jurisdiction
of the Labor Arbiters and the National Labor Relations
Commission.
7. LABOR ARBITER’S JURISDICTION: TERMINATION DISPUTES
Termination disputes or illegal dismissal complaints fall within
the jurisdiction of a labor arbiter, as stated in Art. 217(2).
7.1 Termination of Corporate Officer; Jurisdiction over Intra-
Corporate Disputes Transferred from SEC to RTC
The dismissal of a corporate officer by a corporate board is a
corporate dispute that should be brought to the regular courts.
A corporate officer’s dismissal is always a corporate act, or an
extra-corporate controversy and the nature is not altered by
the reason or wisdom with which the Board of Directors may
have in taking such action.
7.2 Effect of Claim for Backwages, Benefits, or Damages
In intra-corporate matters, such as those affecting the
corporation, its directors, trustees, officers and shareholders,
the issue of consequential damages may just as well be
resolved and adjudicated by the SEC. Undoubtedly, it is still
within the competence and expertise of the SEC to resolve all
matters arising from or closely connected with all intra-
corporate disputes.
7.3 Mainland v. Movilla: The “Better Policy” in Determining SEC
Jurisdiction
The better policy to be followed in determining jurisdiction
over a case should be to consider concurrent factors such as
the status or relationship of the parties or the nature of the
question that is the subject of their controversy.
7.4 Tabang v. NLRC: SEC Jurisdiction Reaffirmed; Corporate
Officer and Intra-corporate Controversy Defined
An “intra-corporate controversy” is one which arises between a
stockholder and the corporation. There is no distinction,
qualification, nor any exemption whatsoever. The provision is
broad and covers all kinds of controversies between
stockholders and corporations.
8. LABOR ARBITER’S JURISDICTION: MONEY CLAIMS
A money claim arising from employer-employee relations,
excepting SSS/ECC/Medicare claims, is within the jurisdiction of
a labor arbiter—
1. if the claim, regardless of amount, is accompanied with a
claim for reinstatement; or
2. if the claim, whether or not accompanied with a claim for
reinstatement, exceeds five thousand pesos (P5,000.00) per
claimant.
8.1 Only Money Claims Not Arising from CBA
The Voluntary Arbitrator or Panel of Voluntary Arbitrators will
have original and exclusive jurisdiction over money claims
"arising from the interpretation or implementation of the
Collective Bargaining Agreement and, those arising from the
interpretation or enforcement of company personnel policies",
under Article 261.
8.2 Money Claims Must Have Arisen from Employment
Money claims of workers which do not arise out of or in
connection with their employer-employee relationship fall
within the general jurisdiction of regular courts of justice.
Where the claim to the principal relief sought is to be resolved
not by reference to the Labor Code or other labor relations
statute or a collective bargaining agreement but by the general
civil law, the jurisdiction over the dispute belongs to the regular
courts of justice and not to the Labor Arbiter and the National
Labor Relations Commission.
8.3 Money Claims of Coop Employees
8.4 Jurisdiction over Claims for Damages
Money claims of workers which the labor arbiter has original
and exclusive jurisdiction are comprehensive enough to include
claims for moral damages of a dismissed employee against his
employer.
8.5 Splitting of Actions Not Allowed
An employee who has been illegally dismissed so as to cause
him moral damages has a cause of action for reinstatement,
back wages and damages. When he institutes proceedings
before the Labor Arbiter, he should make a claim for all said
reliefs.
8.6 Employer’s Complaint for Damages
An employer’s claim for damages against an employee may be
filed as counterclaim in the illegal dismissal case filed by the
employee. Such claim for damages, arising from employment
relationship, is outside the jurisdiction of the regular court.
9. LABOR ARBITER’S JURISDICTION: STRIKE AND LOCKOUTS
7|P LATON
Questions relating to strikes or lockouts or any form of work
stoppage including incidents thereof under Art. 264 fall within
the labor arbiter’s jurisdiction.
But the power to issue injunction is lodged with an NLRC
division, not a labor arbiter. Moreover, “national interest’ cases
are handled differently. Art. 263 (g) empowers the DOLE
Secretary or the President of the Republic to assume
jurisdiction or refer the case to the NLRC if the labor dispute or
impending strike or lockout involves an industry indispensible
to national interest.
Still another limit to the arbiter’s jurisdiction is the jurisdiction
of the regular courts to hear and decide actions filed by third
parties being affected by a strike of people who are not their
employees. Finally, if a crime is committed, whether in relation
to a strike or not, the prosecution of the crime has to be done
not before a labor arbiter but a regular court, because in such a
case the laws to be administered are primarily the penal laws of
the land.
10. LABOR ARBITER’S JURISDICTION: OFW’S MONEY CLAIMS
OR DISMISSAL
Section 10 of RA 8042, approved on June 7, 1995, known as the
Migrant Workers and Overseas Filipinos Act of 1995, transfers
from the POEA to Labor Arbiters the original and exclusive
jurisdiction to hear and decide claims arising out of an
employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment,
including claims for actual, moral, exemplary and other forms
of damages.
Based on [Article 217, Labor Code and Section 10, R.A. No.
8042], labor arbiters, clearly have original and exclusive
jurisdiction over claims arising from employer-employee
relations, including terminations disputes involving all workers,
among them whom are Overseas Filipino Workers (OFW).
11. LABOR ARBITER’S JURISDICTION: WGAE DISTORTION
A salary distortion case, referred to in the Article 124, is
resolved either through the CBA mechanism or, in unorganized
establishments, through the NCMB. IF the NCMB fails to resolve
the dispute in ten days of conciliation conferences, it shall be
final to the appropriate branch of the NLRC.
12. LABOR ARBITER’S JURISDICTION: DISPUTES OVER
COMPROMISE SETTLEMENTS
Because labor law policy encourages voluntary resolution of
disputes, compromise settlements are ordinarily final and
binding upon the parties. But a compromise settlement may
itself become the subject of dispute. If there is noncompliance
with the compromise agreement or if there is prima facie
evidence that the settlement was obtained through fraud,
misrepresentation, or coercion, then, according to Article 227,
the NLRC through the labor arbiter may assume jurisdiction
over such dispute.
13. SUBMISSION TO JURISDICTION
The active participation of the party against whom the action
was brought coupled with his failure to object to the
jurisdiction of the Court or quasi-judicial body where the action
is pending, is tantamount to an invocation of that jurisdiction,
and a willingness to abide by the resolution of the case will bar
said party from later on impugning the court or body’s
jurisdiction.
The Supreme Court frowns upon the undesirable practice of a
party submitting his case for decision and then accepting the
judgment only if favourable, and attacking it for lack of
jurisdiction when adverse.
14. IMMUNITY OF FOREIGN GOVERNMENTS
In international law, "immunity" is commonly understood as an
exemption of the state and its organs from the judicial
jurisdiction of another state. This is anchored on the principle
of the sovereign equality of states under which one state
cannot assert jurisdiction over another in violation of the
maxim par in parem non habet imperium (an equal has no
power over an equal).
As it stands now, the application of the doctrine of immunity
from suit has been restricted to sovereign or governmental
activities (jure imperii). The mantle of state immunity cannot be
extended to commercial, private and proprietary acts (jure
gestionis).
14.1 Immunity of the UN and Its Specialized Agencies
15. EXECUTING MONEY CLAIMS AGAINST THE GOVERNMENT
Even when a government agency enters into a business
contract with a private entity, it is not the Labor Code but C.A.
No. 327 that applies in pursuing a money claim (against the
Government) arising from such contract.
16. LOCAL WATER DISTRICT
They are quasi public corporations whose employees belong to
the civil service, hence, the dismissal of those employees shall
be governed by the civil service law, rules and regulations.
16.1 Exception: Where NLRC Jurisdiction is Invoked
17. REPUBLIC ACT NO. 6715—RETROACTIVE?
________
Art. 218. Powers of the Commission. The Commission shall have
the power and authority:
a. To promulgate rules and regulations governing the hearing
and disposition of cases before it and its regional branches, as
well as those pertaining to its internal functions and such rules
and regulations as may be necessary to carry out the purposes
of this Code; (As amended by Section 10, Republic Act No.
6715, March 21, 1989)
b. To administer oaths, summon the parties to a controversy,
issue subpoenas requiring the attendance and testimony of
witnesses or the production of such books, papers, contracts,
records, statement of accounts, agreements, and others as may
be material to a just determination of the matter under
investigation, and to testify in any investigation or hearing
conducted in pursuance of this Code;
c. To conduct investigation for the determination of a question,
matter or controversy within its jurisdiction, proceed to hear
8|P LATON
and determine the disputes in the absence of any party thereto
who has been summoned or served with notice to appear,
conduct its proceedings or any part thereof in public or in
private, adjourn its hearings to any time and place, refer
technical matters or accounts to an expert and to accept his
report as evidence after hearing of the parties upon due notice,
direct parties to be joined in or excluded from the proceedings,
correct, amend, or waive any error, defect or irregularity
whether in substance or in form, give all such directions as it
may deem necessary or expedient in the determination of the
dispute before it, and dismiss any matter or refrain from
further hearing or from determining the dispute or part
thereof, where it is trivial or where further proceedings by the
Commission are not necessary or desirable; and
d. To hold any person in contempt directly or indirectly and
impose appropriate penalties therefor in accordance with law.
A person guilty of misbehavior in the presence of or so near the
Chairman or any member of the Commission or any Labor
Arbiter as to obstruct or interrupt the proceedings before the
same, including disrespect toward said officials, offensive
personalities toward others, or refusal to be sworn, or to
answer as a witness or to subscribe an affidavit or deposition
when lawfully required to do so, may be summarily adjudged in
direct contempt by said officials and punished by fine not
exceeding five hundred pesos (P500) or imprisonment not
exceeding five (5) days, or both, if it be the Commission, or a
member thereof, or by a fine not exceeding one hundred pesos
(P100) or imprisonment not exceeding one (1) day, or both, if it
be a Labor Arbiter.
The person adjudged in direct contempt by a Labor Arbiter may
appeal to the Commission and the execution of the judgment
shall be suspended pending the resolution of the appeal upon
the filing by such person of a bond on condition that he will
abide by and perform the judgment of the Commission should
the appeal be decided against him. Judgment of the
Commission on direct contempt is immediately executory and
unappealable. Indirect contempt shall be dealt with by the
Commission or Labor Arbiter in the manner prescribed under
Rule 71 of the Revised Rules of Court; and (As amended by
Section 10, Republic Act No. 6715, March 21, 1989)
e. To enjoin or restrain any actual or threatened commission of
any or all prohibited or unlawful acts or to require the
performance of a particular act in any labor dispute which, if
not restrained or performed forthwith, may cause grave or
irreparable damage to any party or render ineffectual any
decision in favor of such party: Provided, That no temporary or
permanent injunction in any case involving or growing out of a
labor dispute as defined in this Code shall be issued except
after hearing the testimony of witnesses, with opportunity for
cross-examination, in support of the allegations of a complaint
made under oath, and testimony in opposition thereto, if
offered, and only after a finding of fact by the Commission, to
the effect:
1. That prohibited or unlawful acts have been
threatened and will be committed and will be
continued unless restrained, but no injunction or
temporary restraining order shall be issued on
account of any threat, prohibited or unlawful act,
except against the person or persons, association or
organization making the threat or committing the
prohibited or unlawful act or actually authorizing or
ratifying the same after actual knowledge thereof;
2. That substantial and irreparable injury to
complainant’s property will follow;
3. That as to each item of relief to be granted, greater
injury will be inflicted upon complainant by the denial
of relief than will be inflicted upon defendants by the
granting of relief;
4. That complainant has no adequate remedy at law;
and
5. That the public officers charged with the duty to
protect complainant’s property are unable or
unwilling to furnish adequate protection.
Such hearing shall be held after due and personal notice
thereof has been served, in such manner as the Commission
shall direct, to all known persons against whom relief is sought,
and also to the Chief Executive and other public officials of the
province or city within which the unlawful acts have been
threatened or committed, charged with the duty to protect
complainant’s property: Provided, however, that if a
complainant shall also allege that, unless a temporary
restraining order shall be issued without notice, a substantial
and irreparable injury to complainant’s property will be
unavoidable, such a temporary restraining order may be issued
upon testimony under oath, sufficient, if sustained, to justify
the Commission in issuing a temporary injunction upon hearing
after notice. Such a temporary restraining order shall be
effective for no longer than twenty (20) days and shall become
void at the expiration of said twenty (20) days. No such
temporary restraining order or temporary injunction shall be
issued except on condition that complainant shall first file an
undertaking with adequate security in an amount to be fixed by
the Commission sufficient to recompense those enjoined for
any loss, expense or damage caused by the improvident or
erroneous issuance of such order or injunction, including all
reasonable costs, together with a reasonable attorney’s fee,
and expense of defense against the order or against the
granting of any injunctive relief sought in the same proceeding
and subsequently denied by the Commission.
The undertaking herein mentioned shall be understood to
constitute an agreement entered into by the complainant and
the surety upon which an order may be rendered in the same
suit or proceeding against said complainant and surety, upon a
hearing to assess damages, of which hearing, complainant and
surety shall have reasonable notice, the said complainant and
surety submitting themselves to the jurisdiction of the
Commission for that purpose. But nothing herein contained
shall deprive any party having a claim or cause of action under
or upon such undertaking from electing to pursue his ordinary
remedy by suit at law or in equity: Provided, further, That the
reception of evidence for the application of a writ of injunction
may be delegated by the Commission to any of its Labor
Arbiters who shall conduct such hearings in such places as he
may determine to be accessible to the parties and their
witnesses and shall submit thereafter his recommendation to
the Commission. (As amended by Section 10, Republic Act No.
6715, March 21, 1989)
________
9|P LATON
Art. 219. Ocular inspection. The Chairman, any Commissioner,
Labor Arbiter or their duly authorized representatives, may, at
any time during working hours, conduct an ocular inspection on
any establishment, building, ship or vessel, place or premises,
including any work, material, implement, machinery, appliance
or any object therein, and ask any employee, laborer, or any
person, as the case may be, for any information or data
concerning any matter or question relative to the object of the
investigation.
________
1. POWERS OF THE COMMISSION
1.1 Rule-Making Power
The Commission has the power to promulgate rules and
regulations:
a) governing the hearing and disposition of cases before it and
its regional branches;
b) pertaining to its internal functions; and
c) those that may be necessary to carry out the purposes of this
Code.
It is an elementary rule in administrative law that
administrative regulations and policies enacted by
administrative bodies, such as the Revised Rules of the NLRC, to
interpret the law which they are entrusted to enforce, have the
force of law, and are entitled to great respect.
1.2 Power to Issue Compulsory Processes
The Commission has the power to:
a) administer oaths;
b) summon parties; and
c) issue subpoenas ad testificandum and duces tecum.
1.3 Power to Investigate and Hear Disputes within Its
Jurisdiction
The Commission has the power to:
a) conduct investigation for the determination of a question,
matter or controversy within its jurisdiction; and
b) proceed to hear and determine the disputes in the manner
laid down under paragraph (c) of Art. 218.
1.4 Contempt Power
Contempt is defined as a disobedience to the Court by setting
up an opposition to its authority, justice and dignity. It signifies
not only a willful disregard or disobedience of the court's
orders but such conduct as tends to bring the authority of the
court and the administration of law into disrepute or in some
manner to impede the due administration of justice.
1.5 Power to Conduct Ocular Inspection
Under Article 219, the Chairman, any Commissioner, Labor
Arbiter or their duly authorized representatives, may, at any
time during working hours:
a) conduct an ocular inspection on any establishment, building,
ship or vessel, place or premises, including any work, material,
implement, machinery, appliance or any object therein; and
b) ask any employee, laborer, or any person, as the case may
be, for any information or data concerning any matter or
question relative to the object of the investigation.
1.6 Adjudicatory Power: Original
The NLRC has original jurisdiction over petitions for injunction
or temporary restraining order under Art. 218(e).
Also, it has original jurisdiction to hear and decide “National
Interest” cases certified to it by the Secretary of Labor under
Art. 263(g).
1.7 Adjudicatory Power: Appellate
The NLRC has exclusive appellate jurisdiction over all cases
decided by labor arbiters (Art. 217[b]) and the DOLE regional
director or hearing officers under Art. 129.
The NLRC has no appellate jurisdiction over decisions rendered
by (1) a voluntary arbitrator, or (2) the secretary of labor, or (3)
the bureau of labor relations director on cases appealed from
the DOLE regional offices. The decisions of these three offices
are appealable rather to the Court of Apeals.
Where the labor arbiter has no jurisdiction or has not acquired
jurisdiction, neither has the NLRC. Its jurisdiction over cases
under Art. 217(a) is appellate, not original.
2. POWER TO ISSUE INJUNCTION OR TEMPORARY
RESTRAINING ORDER
The NLRC has injunction power or, simply, the power to
command that an act be done or not done.
The action for injunction is distinct from the ancillary remedy of
4
preliminary injunction which cannot exist except only as part
or an incident of an independent action or proceeding.
A writ of preliminary injunction is generally based solely on
initial and incomplete evidence.
2.1 Injunction by Labor Arbiter
Article 218 limits the grant of injunctive power to the
“Commission” meaning the Commission en banc or any of its
divisions.
2.2 Requisites for Issuance of Restraining Order or Injunction
As a rule, restraining orders or injunctions do not issue ex parte
and only after compliance with the following requisites, to wit:
a) a hearing held "after due and personal notice thereof has
been served, in such manner as the Commission shall direct, to
4The sole object of which is to preserve the status quo until the merits can be
heard.
10 | P LATON
all known persons against whom relief is sought, and also to the
Chief Executive and other public officials of the province or city
within which the unlawful acts have been threatened or
committed charged with the duty to protect complainant's
property;"
b) reception at the hearing of "testimony of witnesses, with
opportunity for cross-examination, in support of the allegations
of a complaint made under oath," as well as "testimony in
opposition thereto, if offered x x;
c) “a finding of fact by the Commission, to the effect: (1) That
prohibited or unlawful acts have been threatened and will be
committed and will be continued unless restrained, but no
injunction or temporary restraining order shall be issued on
account of any threat, prohibited or unlawful act, except
against the person or persons, association or organization
making the threat or committing the prohibited or unlawful act
or actually authorizing or ratifying the same after actual
knowledge thereof; (2) That substantial and irreparable injury
to complainant's property will follow; (3) That as to each item
of relief to be granted, greater injury will be inflicted upon
complainant by the denial of relief than will be inflicted upon
defendants by the granting of relief; (4) That complainant has
no adequate remedy at law; and (5) That the public officers
charged with the duty to protect complainant's property are
unable or unwilling to furnish adequate protection.”
2.3 Conditions for Issuance Ex Parte of a Temporary Restraining
Order (TRO)
A temporary restraining order (valid only for 20 days) may be
issued ex parte under the following conditions:
a) the complainant "shall also allege that, unless a temporary
restraining order shall be issued without notice, a substantial
and irreparable injury to complainant's property will be
unavoidable;
b) there is "testimony under oath, sufficient, if sustained, to
justify the Commission in issuing a temporary injunction upon
hearing after notice;"
c) the "complainant shall first file an undertaking with adequate
security in an amount to be fixed by the Commission sufficient
to recompense those enjoined for any loss, expense or damage
caused by the improvident or erroneous issuance of such order
or injunction, including all reasonable costs, together with a
reasonable attorney's fee, and expense of defense against the
order or against the granting of any injunctive relief sought in
the same proceeding and subsequently denied by the
Commission;" and
d) the "temporary restraining order shall be effective for no
longer than twenty (20) days and shall become void at the
expiration of said twenty (20) days.
An injury is considered irreparable if it is of such constant and
frequent recurrence that no fair and reasonable redress can be
had therefor in a court of law, or where there is no standard by
which their amount can be measured with reasonable accuracy,
that is, it is not susceptible of mathematical computation. It is
considered irreparable injury when it cannot be adequately
compensated in damages due to the nature of the injury itself
or the nature of the right or property injured or when there
exists no certain pecuniary standard for the measurement of
damages.
“Property” includes not only tangible property but also the
right to use such property.
“Public officers” means local law enforcing officers.
The “protection” contemplated is that which would enable the
employer to proceed with the work.
The intent of this requirement is to take the executive function
of law enforcement out of the court and leave it to the
appropriate executive officers, unless they fail to function.
2.4 No Adequate Remedy
In addition to the other requirements which the complainant
must satisfy in order to obtain injunctive relief under the Act,
the complainant must show that “he has no adequate remedy
at law.”
An adequate remedy at law has been defined as one “that
affords relief with reference to the matter in controversy, and
which is appropriate to the particular circumstances of the
case.
2.5 Cash Bond
Under the NLRC Rules of 2005, no temporary restraining order
or writ of preliminary injunction shall be issued except on the
condition that petitioner shall first file an undertaking to
answer for the damages and post a cash bond in the amount of
Fifty Thousand Pesos (P50,000.00), or such higher amount as
may be determined by the Commission. The purpose of the
bond is to recompense those enjoined for any loss, expense or
damage caused by the improvident or erroneous issuance of
such order or injunction, including all reasonable costs,
together with a reasonable attorney’s fee, and expense of
defense against the order or against the granting of any
injunctive relief sought in the same proceeding and
subsequently denied by the Commission.
2.6 Scope
As to the scope of an injunction issued under the Act, both the
Act itself and the cases restrict the operation of such injunction
not only to the specific acts complained of in the pleadings and
proven at trial as wrongful, but further, limits the injunction to
only those alleged and proven guilty of actual participation,
authorization or ratification of such acts.
The power of the NLRC to enjoin or restrain the commission of
any or all prohibited or unlawful acts as provided in Art. 218 of
the Labor Code, can only be exercised in a labor dispute.
2.7 Reception of Evidence
The reception of evidence “for the application of a writ of
injunction may be delegated by the Commission to any of its
Labor Arbiters who shall conduct such hearings in such places
as he may determine to be accessible to the parties and their
witnesses and shall submit thereafter his recommendation to
the Commission.”
11 | P LATON
“Labor Arbiter” in the preceding sentence may now refer to
“Commission Attorney,” a position created by R.A. No. 9347
(July 27, 2006) to assist the Commission and its divisions in their
appellate and adjudicatory functions.
2.8 Twenty-day Life of TRO
A temporary restraining order (TRO), if issued at all in a petition
for injunction, is valid only for twenty (20) days and becomes
void ipso facto at the end of that period.
The TRO takes effect upon its issuance and not upon receipt of
the parties.
The maximum period of 20 days includes Saturdays, Sundays,
and holidays.
2.9 Illustrative Case: Issuance of TRO
2.10 Injunction from NLRC: Not the Proper Remedy against
Employee’s Dismissal
________
[Art. 220. Compulsory arbitration. The Commission or any Labor
Arbiter shall have the power to ask the assistance of other
government officials and qualified private citizens to act as
compulsory arbitrators on cases referred to them and to fix and
assess the fees of such compulsory arbitrators, taking into
account the nature of the case, the time consumed in hearing
the case, the professional standing of the arbitrators, the
financial capacity of the parties, and the fees provided in the
Rules of Court.] (Repealed by Section 16, Batas Pambansa
Bilang 130, August 21, 1981)
________
Art. 221. Technical rules not binding and prior resort to
amicable settlement. In any proceeding before the Commission
or any of the Labor Arbiters, the rules of evidence prevailing in
courts of law or equity shall not be controlling and it is the spirit
and intention of this Code that the Commission and its
members and the Labor Arbiters shall use every and all
reasonable means to ascertain the facts in each case speedily
and objectively and without regard to technicalities of law or
procedure, all in the interest of due process. In any proceeding
before the Commission or any Labor Arbiter, the parties may be
represented by legal counsel but it shall be the duty of the
Chairman, any Presiding Commissioner or Commissioner or any
Labor Arbiter to exercise complete control of the proceedings
at all stages.
Any provision of law to the contrary notwithstanding, the Labor
Arbiter shall exert all efforts towards the amicable settlement
of a labor dispute within his jurisdiction on or before the first
hearing. The same rule shall apply to the Commission in the
exercise of its original jurisdiction. (As amended by Section 11,
Republic Act No. 6715, March 21, 1989)
________
1. PROCEEDINGS BEFORE LABOR ARBITER OR THE
COMMISSION; TECHNICAL RULES NOT APPLICABLE
Administrative and quasi-judicial bodies, like the National Labor
Relations Commission, are not bound by the technical rules of
procedure in the adjudication of cases.
Simplification of procedure, without regard to technicalities of
law or procedure and without sacrificing the fundamental
requisites of due process, is mandated to insure a speedy
administration of social justice. This Court construed Article 221
of the Labor Code as to allow the NLRC or a labor arbiter to
decide a case on the basis of position papers and other
documents submitted without resorting to technical rules of
evidence as observed in regular courts of justice.
1.1 Modicum of Admissibility; Substantial Evidence
It is true that administrative and quasi-judicial bodies like the
NLRC are not bound by the technical rules of procedure in the
adjudication of cases. However, this procedural rule should not
be construed as a license to disregard certain fundamental
evidentiary rules. While the rules of evidence prevailing in the
courts of law or equity are not controlling in proceedings
before the NLRC, the evidence presented before it must at least
have a modicum of admissibility for it to be given some
probative value.
Not only must there be some evidence to support a finding or
conclusion, but evidence must be "substantial." "Substantial
evidence is more than a mere scintilla. It means such relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion.
1.2 Cardinal Rights in Quasi-Judicial Proceedings
There are cardinal primary rights which must be respected even
in proceedings of this character:
1) right to a hearing;
2) tribunal must consider the evidence presented;
3) decision must be supported by something (evidence);
4) supporting evidence must be substantial;
5) Decision must be rendered on the evidence presented or at
least contained in the record and disclosed to the parties
affected;
6) the body or CIR or any of its judges must act on his own
independent considerations of the law and facts, and not
simply accept the views of the subordinate in arriving at a
decision; and
7) decide in such manner that parties can know the various
issues involved and the reason for the decision.
1.3 Verification
Verification is intended to assure that the allegations in the
pleading have been prepared in good faith or are true and
correct, not mere speculations. Generally, lack of verification is
merely a format defect that is neither jurisdictional nor fatal.
1.4 Party Respondent
In a complaint for underpayment of wages and other money
claims filed by employees of a single proprietorship business,
the respondent should be the business owner. This is not
12 | P LATON
necessarily the person in whose name the business is
registered.
1.5 Prohibited Pleadings and Motions
Emphasizing the avoidance of legal technicalities, the NLRC
2005 Rules (in Rule III, Section4) does not allow the following
motions or pleadings:
a) Motion to dismiss the complaint except on the ground of lack
of jurisdiction over the subject matter, improper venue, res
judicata, prescription and forum shopping;
b) Motion for a bill of particulars;
c) Motion for new trial;
d) Petition for relief from judgment when filed with the Labor
Arbiter;
e) Petition for Certiorari, Mandamus or prohibition;
f) Motion to declare respondent in default;
g) Motion for reconsideration or appeal from any interlocutory
order of the Labor Arbiter.
2. MANDATORY CONCILIATION AND MEDIATION
CONFERENCE; COMPROMISE ENCOURAGED
Section 2. Nature of Proceedings. - The proceedings before the Labor
Arbiter shall be non-Iitigious in nature. Subject to the requirements of
due process, the technicalities of law and procedure and the rules
obtaining in the courts of law shall not strictly apply thereto. The Labor
Arbiter may avail himself of all reasonable means to ascertain the facts
of the controversy speedily, including ocular inspection and
examination of well-informed persons.
Section 3. Mandatory Conciliation and Mediation Conference. – a) The
mandatory conciliation and mediation conference shall be called for the
purpose of (1) amicably settling the case upon a fair compromise; (2)
determining the real parties in interest; (3) determining the necessity of
amending the complaint and including all causes of action; (4) defining
and simplifying the issues in the case; (5) entering into admissions or
stipulations of facts; and (6) threshing out all other preliminary matters.
The Labor Arbiter shall preside and take full control of the proceedings.
b) Conciliation and mediation efforts shall be exerted by the Labor
Arbiters all throughout the proceedings. Should the parties arrive at
any agreement as to the whole or any part of the dispute, the same
shall be reduced to writing and signed by the parties and their
respective counsel or authorized representative, if any, before the
Labor Arbiter.
c) In any case, the compromise agreement shall be approved by the
Labor Arbiter, if after explaining to the parties, particularly to the
complainants, the terms, conditions and consequences thereof, he is
satisfied that they understand the agreement, that the same was
entered into freely and voluntarily by them, and that it is not contrary
to law, morals, and public policy.
d) A compromise agreement duly entered into in accordance with this
Section shall be final and binding upon the parties and shall have the
force and effect of a judgment rendered by the Labor Arbiter.
e) The mandatory conciliation and mediation conference shall, except
for justifiable grounds, be terminated within thirty (30) calendar days
from the date of the first conference.
f) No motion for postponement shall be entertained except on
meritorious grounds.
Section 4. Effect of Failure of Conciliation and Mediation. - Should the
parties fail to agree upon an amicable settlement, either in whole or in
part, during the mandatory conciliation and mediation conference, the
Labor Arbiter shall terminate the conciliation and mediation stage and
proceed to pursue the other purposes of the said conference as
enumerated in the immediately preceding Section. Thereafter, the
Labor Arbiter shall direct the parties to simultaneously file their
respective position papers on the issues agreed upon by the parties and
as reflected in the minutes of the proceedings.
Section 5. Non-Appearance of Parties. - The non-appearance of the
complainant or petitioner during the two (2) settings for mandatory
conciliation and mediation conference scheduled in the summons,
despite due notice thereof, shall be a ground for the dismissal of the
case without prejudice.
In case of non-appearance by the respondent during the first scheduled
conference, the second conference shall proceed as scheduled in the
summons. If the respondent still fails to appear at the second
conference despite being duly served with summons, the Labor Arbiter
shall immediately terminate the mandatory conciliation and mediation
conference. The Labor Arbiter shall thereafter allow the complainant or
petitioner to file his verified position paper and submit evidence in
support of his causes of action, and thereupon render his decision on
the basis of the evidence on record.
It is true that a compromise agreement once approved by the
court has the effect of res judicata between the parties and
should not be disturbed except for vices of consent and forgery.
However, settled is the rule that the NLRC may disregard
technical rules of procedure in order to give life to the
constitutional mandate affording protection to labor and to
conform to the need of protecting the working class whose
inferiority against the employer has always been earmarked by
disadvantage.
2.1 Binding Effect of Compromise Agreement
The authority to compromise cannot lightly be presumed and
should be established by evidence.
Section 9. Authority to Bind Party. - Attorneys and other
representatives of parties shall have authority to bind their clients in all
matters of procedure; but they cannot, without a special power of
attorney or express consent, enter into a compromise agreement with
the opposing party in full or partial discharge of a client's claim.
Also not to be overlooked is Section 3 (c and d) of the NLRC
2005 Rules of Procedure quoted above. It requires the Labor
Arbiter’s approval of a compromise agreement over a case
pending before the Labor Arbiter.
2.2 Quitclaim and Waivers
A deed of release or quitclaim cannot bar an employee from
demanding benefits to which he is legally entitled.
2.2a Final and Executory Judgment Cannot be Negotiated
The judgment may no longer be modified in any respect, even if
the modification is meant to correct what is perceived to be an
erroneous conclusion of fact or law, and regardless of whether
the modification is attempted to be made by the court
rendering it or by the highest court of the land.
3. MOTION TO DISMISS
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Section 6. Motion to Dismiss. - On or before the date set for the
mandatory conciliation and mediation conference, the respondent may
file a motion to dismiss. Any motion to dismiss on the ground of lack of
jurisdiction, improper venue, or that the cause of action is barred by
prior judgment, prescription, or forum shopping, shall be immediately
resolved by the Labor Arbiter through a written order. An order
denying the motion to dismiss, or suspending its resolution until the
final determination of the case, is not appealable.
3.1 Motu proprio Dismissal of Complaint based on Prescription
3.2 Res Judicata as Reason to Dismiss Complaint
For a prior judgment to constitute a bar to a subsequent case,
the following requisites must concur: (a) it must be a final
judgment or order; (b) the court rendering the same must have
jurisdiction over the subject matter and over the parties; (c) it
must be a judgment or order on the merits, and (d) there must
be between the two cases Identity of parties, subject matter,
and causes of action.
3.3 No Dismissal of Complaint despite Death
3.4 Revival or Refiling of Dismissed Case
A dismissed case is not necessarily dead.
Section 16. Revival And Re-Opening Or Re-Filing Of Dismissed Case. - A
party may file a motion to revive or re-open a case dismissed without
prejudice, within ten (10) calendar days from receipt of notice of the
order dismissing the same; otherwise, his only remedy shall be to re-file
the case in the arbitration branch of origin.
A complaint dismissed “without prejudice” simply means a
tentative or temporary dismissal—the complaint may be
revived through an appropriate motion.
4. SUBMISSION OF POSITION PAPERS AND REPLY
4.1 Determination of necessity of Hearing or Clarificatory
Conference
Section 8. Determination of Necessity of Hearing or Clarificatory
Conference. - Immediately after the submission by the parties of their
position paper or reply, as the case may be, the Labor Arbiter shall,
motu proprio, determine whether there is a need for a hearing or
clarificatory conference. At this stage, he may, at his discretion and for
the purpose of making such determination, ask clarificatory questions
to further elicit facts or information, including but not limited to the
subpoena of relevant documentary evidence, if any, from any party or
witness.
4.2 Role of the Labor Arbiter in hearing and clarificatory
conference--
Section 9. Role of the Labor Arbiter in Hearing and Clarificatory
Conference. - a) The Labor Arbiter shall take full control and personally
conduct the hearing or clarificatory conference. Unless otherwise
provided by law, the Labor Arbiter shall determine the order of
presentation of evidence by the parties, subject to the requirements of
due process. He shall examine the parties and their witnesses with
respect to the matters at issue; and ask questions only for the purpose
of clarifying points of law or fact involved in the case. He shall limit the
presentation of evidence to matters relevant to the issue before him
and necessary for a just and speedy disposition of the case.
b) In the cross-examination of witnesses, only relevant, pertinent and
material questions necessary to enlighten the Labor Arbiter shall be
allowed.
c) The Labor Arbiter shall make a written summary of the proceedings,
including the substance of the evidence presented, in consultation with
the parties. The written summary shall be signed by the parties and
shall form part of the records.
4.3 Non-appearance of Parties; Postponement of Hearing and
Clarificatory Conferences.
Section 10. Non-Appearance of Parties, and Postponement of Hearings
and Clarificatory Conferences. - a) Non-appearance at a hearing or
clarificatory conference by the complainant or petitioner, who was duly
notified thereof, may be sufficient cause to dismiss the case without
prejudice. Subject to Section 16 of this Rule, where proper justification
is shown by proper motion to warrant the re-opening of the case, the
Labor Arbiter shall call another hearing or clarificatory conference and
continue the proceedings until the case is finally decided. The dismissal
of the case for the second time due to the unjustified non-appearance
of the complainant or petitioner, who was duly notified of the
clarificatory hearing, shall be with prejudice.
b) In case the respondent fails to appear during the hearing or
clarificatory conference despite due notice thereof, the complainant
shall be allowed to present evidence ex-parte, without prejudice to
cross-examination at the next hearing or conference. Two (2)
successive non-appearances by the respondent during his scheduled
presentation of evidence or opportunity to cross-examine witnesses,
despite due notice thereof, shall be construed as a waiver on his part to
present evidence or conduct cross-examination.
c) The parties and their counsels appearing before the Labor Arbiter
shall be prepared for continuous hearing or clarificatory conference. No
postponement or continuance shall be allowed by the Labor Arbiter,
except upon meritorious grounds and subject always to the
requirement of expeditious disposition of cases. In any case, the
hearing or clarificatory conference shall be terminated within ninety
(90) calendar days from the date of the initial hearing or conference.
d) Paragraph (c) of this Section notwithstanding, in cases involving
overseas Filipino workers, the aggregate period for conducting the
mandatory conciliation and mediation conference, including hearing on
the merits or clarificatory conference, shall not exceed sixty (60) days,
which shall be reckoned from the date of acquisition of jurisdiction by
the Labor Arbiter over the person of the respondents.
5. SUBMISSION OF THE CASE FOR DECISION
5.1 Position Papers as Basis of Decision
The affidavits in such case may take the place of their direct
testimony. The labor arbiter may choose, if he deems it
necessary, to set the case for hearing on the merits where
witnesses may be presented and examined by the parties. In
both instances, the burden of proving that the termination was
for valid or authorized cause rests on the employer.
5.2 Lack of Verification, Not Fatal
The lack of verification of the position paper-affidavit is a
formal, rather than a substantial, defect. It is not fatal. It could
be easily corrected by requiring an oath.
5.3 Due Process: Opportunity to Be Heard
The simple meaning of procedural due process is that a party to
a case must be given sufficient opportunity to be heard. Its very
essence is to allow all parties opportunity to present evidence.
14 | P LATON

A formal or trial-type hearing is not at all times and in all
instances essential to due process, the requirements of which
are satisfied where parties are afforded fair and reasonable
opportunity to explain their side of the controversy at hand.
5.4 Inhibition
Section 12. Inhibition. - A Labor Arbiter may voluntarily inhibit himself
from the resolution of a case and shall so state in writing the legal
justifications therefor. Upon motion of a party, either on the ground of
relationship within the fourth civil degree of consanguinity or affinity
with the adverse party or counsel, or on question of impartiality, the
Labor Arbiter may inhibit himself from further hearing and deciding the
case. Such motion shall be resolved within five (5) days from the filing
thereof. An order denying or granting a motion for inhibition is
inappealable.
5.5 Due Process Includes Impartiality of the Appeal Body
In addition, administrative due process includes (a) the right to
notice, be it actual or constructive, of the institution of the
proceedings that may affect a person's legal right; (b)
reasonable opportunity to appear and defend his rights and to
introduce witnesses and relevant evidence in his favor; (c) a
tribunal so constituted as to give him reasonable assurance of
honesty and impartiality, and one of competent jurisdiction;
and (d) a finding or decision by that tribunal supported by
substantial evidence presented at the hearing or at least
ascertained in the records or disclosed to the parties.
It is self-evident from the ruling case law that the officer who
reviews a case on appeal should not be the same person whose
decision is the subject of review. Thus, we have ruled that "the
reviewing officer must perforce be other than the officer whose
decision is under review.
6. SUSPENSION OF PROCEEDINGS
To allow labor cases to proceed would clearly defeat the
purpose of the automatic stay and severely encumber the
management committee’s time and resources.
7. FILING AND SERVICE OF PLEADINGS AND DECISIONS
Section 5. Filing and Service of Pleadings. - All pleadings in connection
with the case shall be filed with the appropriate docketing unit of the
Regional Arbitration Branch or the Commission, as the case maybe.
The party filing the pleadings shall serve the opposing parties with a
copy thereof and its supporting documents in the manner provided for
in these Rules with proof of service thereof.
7.1 Service of Notice and Resolutions
Section 6. Service of Notices and Resolutions. - a) Notices or summons
and copies of orders, shall be served on the parties to the case
personally by the Bailiff or duly authorized public officer within three
(3) days from receipt thereof or by registered mail; Provided that in
special circumstances, service of summons may be effected in
accordance with the pertinent provisions of the Rules of Court;
Provided further, that in cases of decisions and final awards, copies
thereof shall be served on both parties and their counsel or
representative by registered mail; Provided further that in cases where
a party to a case or his counsel on record personally seeks service of the
decision upon inquiry thereon, service to said party shall be deemed
effected upon actual receipt thereof; Provided finally, that where
parties are so numerous, service shall be made on counsel and upon
such number of complainants, as may be practicable, which shall be
considered substantial compliance with Article 224 (a) of the Labor
Code, as amended.
For purposes of appeal, the period shall be counted from receipt of
such decisions, resolutions, or orders by the counsel or representative
of record.
b) The Bailiff or officer serving the notice, order, resolution or decision
shall submit his return within two (2) days from date of service thereof,
stating legibly in his return his name, the names of the persons served
and the date of receipt, which return shall be immediately attached and
shall form part of the records of the case. In case of service by
registered mail, the Bailiff or officer shall write in the return, the names
of persons served and the date of mailing of the resolution or decision.
If no service was effected, the service officer shall state the reason
therefor in the return.
7.2 Proof and Completeness of Service
Section 7. Proof and Completeness of Service. - The return is prima
facie proof of the facts indicated therein. Service by registered mail is
complete upon receipt by the addressee or his agent; but if the
addressee fails to claim his mail from the post office within five (5) days
from the date of first notice of the postmaster, service shall take effect
after such time.
Section 4, Rule 13 of the Rules of Court which is suppletory to
the rules of the NLRC, provides as follows:
Section 4. Personal Service. — Service of the papers may be made by
delivering personally a copy to the party or his attorney, or by leaving it
in his office with his clerk or with a person having charge thereof. If no
person is found in his office, or his office is not known, then by leaving
the copy, between the hours of eight in the morning and six in the
evening, at the party's or attorney's residence, if known, with a person
of sufficient discretion to receive the same.
8. RESOLUTION OF DOUBT IN LAW OR EVIDENCE
It is now a familiar rule that doubt as to the interpretation of
labor laws and regulations has to be resolved in favor of labor.
This precept is etched in the Labor Code (Art. 4) and, in similar
tenor, the Civil Code (Art. 1702).
But this precept is not limited to interpretation of legal
provisions. It extends likewise to doubts about the evidence of
the disputants.
9. DECISION OF LABOR ARBITER
Section 13. Period to Decide Case. - The Labor Arbiter shall render his
decision within thirty (30) calendar days, without extension, after the
submission of the case by the parties for decision, even in the absence
of stenographic notes; Provided however, that cases involving overseas
Filipino workers shall be decided within ninety (90) calendar days after
the filing of the complaint which shall commence to run upon
acquisition by the Labor Arbiter of jurisdiction over the respondents.
9.1 Contents of Decisions
Section 14. Contents of Decisions. - The decisions and orders of the
Labor Arbiter shall be clear and concise and shall include a brief
statement of the: a) facts of the case; b) issues involved; c) applicable
laws or rules; d) conclusions and the reasons therefor; and e) specific
remedy or relief granted. In cases involving monetary awards, the
decisions or orders of the Labor Arbiter shall contain the amount
awarded.
15 | P LATON
In case the decision of the Labor Arbiter includes an order of
reinstatement, it shall likewise contain: a) a statement that the
reinstatement aspect is immediately executory; and b) a directive for
the employer to submit a report of compliance within ten (10) calendar
days from receipt of the said decision.
9.2 No Motions for Reconsideration and Petition for Relief from
Judgment
Section 15. Motions for Reconsideration and Petitions for Relief from
Judgment. - No motions for reconsideration or petitions for relief from
judgment of any decision, resolution or order of a Labor Arbiter shall be
allowed.However, when one such motion for reconsideration is filed, it
shall be treated as an appeal provided that it complies with the
requirements for perfecting an appeal.In the case of a petition for relief
from judgment, the Labor Arbiter shall elevate the case to the
Commission for disposition.
________
Art. 222. Appearances and Fees.
a. Non-lawyers may appear before the Commission or any
Labor Arbiter only:
1. If they represent themselves; or
2. If they represent their organization or members
thereof.
b. No attorney’s fees, negotiation fees or similar charges of any
kind arising from any collective bargaining agreement shall be
imposed on any individual member of the contracting union:
Provided, However, that attorney’s fees may be charged
against union funds in an amount to be agreed upon by the
parties. Any contract, agreement or arrangement of any sort to
the contrary shall be null and void. (As amended by Presidential
Decree No. 1691, May 1, 1980)
________
1. APPEARANCE OF NON-LAWYERS
Section 8. Appearances. - b) A non-lawyer may appear as counsel in any
of the proceedings before the Labor Arbiter or Commission only under
the following conditions:
(1) he represents himself as party to the case;
(2) he represents a legitimate labor organization, as defined under
Article 212 and 242 of the Labor Code, as amended, which is a party to
the case: Provided, that he presents: (i) a certification from the Bureau
of Labor Relations (BLR) or Regional Office of the Department of Labor
and Employment attesting that the organization he represents is duly
registered and listed in the roster of legitimate labor organizations; (ii) a
verified certification issued by the secretary and attested to by the
president of the said organization stating that he is authorized to
represent the said organization in the said case; and (iii) a copy of the
resolution of the board of directors of the said organization granting
him such authority;
(3) he represents a member or members of a legitimate labor
organization that is existing within the employer's establishment, who
are parties to the case: Provided, that he presents: (i) a verified
certification attesting that he is authorized by such member or
members to represent them in the case; and (ii) a verified certification
issued by the secretary and attested to by the president of the said
organization stating that the person or persons he is representing are
members of their organization which is existing in the employer's
establishment;
(4) he is a duly-accredited member of any legal aid office recognized by
the Department of Justice or Integrated Bar of the Philippines:
Provided, that he (i) presents proof of his accreditation; and (ii)
represents a party to the case;
(5) he is the owner or president of a corporation or establishment
which is a party to the case: Provided, that he presents: (i) a verified
certification attesting that he is authorized to represent said
corporation or establishment; and (ii) a copy of the resolution of the
board of directors of said corporation, or other similar resolution or
instrument issued by said establishment, granting him such authority.
2. CHANGE OF LAWYER
No substitution of attorneys will be allowed unless the
following requisites concur:
1) there must be filed a written application for substitution;
2) there must be filed the written consent of the client to the
substitution;
3) there must be filed the written consent of the attorney to be
substituted, if such consent can be obtained;
4) in case such written consent cannot be procured, there must
be filed with the application for substitution, proof of the
service of notice of such motion in the manner required by the
rules, on the attorney to be substituted.
3. AUTHORITY TO BIND PARTY
Section 9. Authority to Bind Party. - Attorneys and other
representatives of parties shall have authority to bind their clients in all
matters of procedure; but they cannot, without a special power of
attorney or express consent, enter into a compromise agreement with
the opposing party in full or partial discharge of a client's claim.
4. ATTORNEY’S FEE
The purpose of the provision is to prevent imposition on the
workers of the duty to individually contribute their respective
shares in the fee to be paid the attorney for his services on
behalf of the union in its negotiations with the management.
The obligation to pay the attorney's fees belongs to the union
and cannot be shunted to the workers as their direct
responsibility.
4.1 Negotiation Fee
The 105 negotiation fee which covers attorney’s fees, agency
fee, and the like is based on the amount of backwages
receivable under the CBA which is beyond what the law grants.
4.2 For Services Rendered by Union Officers
Article 222 (b) prohibits attorney's fees, negotiations fees and
similar charges arising out of the conclusion of a collective
bargaining agreement from being imposed on any individual
union member. The collection of the special assessment partly
for the payment for services rendered by union officers,
consultants and others may not be in the category of
"attorney's fees or negotiations fees." But there is no question
that it is an exaction which falls within the category of a "similar
charge," and, therefore, within the coverage of the prohibition
in the aforementioned article.
________
Chapter III
16 | P LATON
 APPEAL
Art. 223. Appeal. Decisions, awards, or orders of the Labor
Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar
days from receipt of such decisions, awards, or orders. Such
appeal may be entertained only on any of the following
grounds:
a. If there is prima facie evidence of abuse of discretion on the
part of the Labor Arbiter;
b. If the decision, order or award was secured through fraud or
coercion, including graft and corruption;
c. If made purely on questions of law; and
d. If serious errors in the findings of facts are raised which
would cause grave or irreparable damage or injury to the
appellant.
In case of a judgment involving a monetary award, an appeal by
the employer may be perfected only upon the posting of a cash
or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from.
In any event, the decision of the Labor Arbiter reinstating a
dismissed or separated employee, insofar as the reinstatement
aspect is concerned, shall immediately be executory, even
pending appeal. The employee shall either be admitted back to
work under the same terms and conditions prevailing prior to
his dismissal or separation or, at the option of the employer,
merely reinstated in the payroll. The posting of a bond by the
employer shall not stay the execution for reinstatement
provided herein.
To discourage frivolous or dilatory appeals, the Commission or
the Labor Arbiter shall impose reasonable penalty, including
fines or censures, upon the erring parties.
In all cases, the appellant shall furnish a copy of the
memorandum of appeal to the other party who shall file an
answer not later than ten (10) calendar days from receipt
thereof.
The Commission shall decide all cases within twenty (20)
calendar days from receipt of the answer of the appellee. The
decision of the Commission shall be final and executory after
ten (10) calendar days from receipt thereof by the parties.
Any law enforcement agency may be deputized by the
Secretary of Labor and Employment or the Commission in the
enforcement of decisions, awards or orders. (As amended by
Section 12, Republic Act No. 6715, March 21, 1989)
________
1. NO MOTION FOR RECONSIDERATION OF LABOR ARBITER’S
DECISION
If any grounds mentioned in this Article exists, the losing party
may appeal the Labor Arbiter’s decision to the NLRC within ten
(10) days from receipt of the decision.
1.1 Final Decision Cannot Be Amended
If not appealed on time, the Labor Arbiter’s decision becomes
final and cannot be amended.
The perfection of an appeal within the statutory or
reglementary period is not only mandatory but also
jurisdictional and failure to do so renders the questioned
decision final and executor, thus depriving the appellate court
of jurisdiction to alter the final judgment, much less entertain
the appeal.
2. PERIOD TO APPEAL FROM LABOR ARBITER
2.1 Ten Calendar Days
A period of ten (10) days from receipt of any order is granted to
either or to both parties involved to appeal to the National
Labor Relations Commission.
After mature and careful deliberation, We have arrived at the
conclusion that the shortened period of ten (10) days fixed by
Article 223 contemplates calendar days and not working days.
We are persuaded to this conclusion, if only because We
believe that it is precisely in the interest of labor that the law
has commanded that labor cases be promptly, if not
peremptorily, dispose of.
This Court reiterates the doctrine enunciated in said case that
the 10-day period provided in Art. 223 of the Labor Code refers
to 10 calendar days and not 10 working days. This means that
Saturdays, Sundays and Legal Holidays are not to be excluded,
but included, in counting the 10-day period. This is in line with
the objective of the law for speedy disposition of labor cases
with the end in view of protecting the interests of the working
man.
2.2 Ten-Calendar-Day Rule Not Applicable Prior to Vir-Jen Case
2.3 Under the 2005 NLRC Rules of Procedure
Section 1. Periods of Appeal. - Decisions, resolutions or orders of the
Labor Arbiter shall be final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days from
receipt thereof; and in case of decisions, resolutions or orders of the
Regional Director of the Department of Labor and Employment
pursuant to Article 129 of the Labor Code, within five (5) calendar days
from receipt thereof. If the 10th or 5th day, as the case may be, falls on
a Saturday, Sunday or holiday, the last day to perfect the appeal shall
be the first working day following such Saturday, Sunday or holiday.
2.4 Date of Receipt by Mail
The rule is that service by registered mail is complete either
upon actual receipt by the addressee or at the end of five (5)
days, if he does not claim it within five (5) days from the first
notice of the postmaster. (Rule 13, §8) The purpose is to place
the date of receipt of pleadings, judgments and processes
beyond the power of the party being served to determine at his
pleasure.
2.5 Failure to Give Copy of Appeal to Adverse Party Within Ten
Days
The failure to give copy of appeal to the appellee within ten
(10) days is not fatal if the appellee was not prejudiced by the
delay in the service of said copy of appeal.
17 | P LATON
2.6 No Extension of Period
Section 1. Periods of Appeal. - No motion or request for extension of
the period within which to perfect an appeal shall be allowed.
2.7 Periods Generally Mandatory
Such periods are imposed with a view to prevent needless
delays and to ensure the orderly and speedy discharge of
judicial business. Strict compliance with such rule is both
mandatory and imperative.
3. GROUNDS OF APPEAL
Section 2. Grounds. - The appeal may be entertained only on any of the
following grounds:
a) If there is prima facie evidence of abuse of discretion on the part of
the Labor Arbiter or Regional Director;
b) If the decision, resolution or order was secured through fraud or
coercion, including graft and corruption;
c) If made purely on questions of law; and/or
d) If serious errors in the findings of facts are raised which, if not
corrected, would cause grave or irreparable damage or injury to the
appellant.
4. WHERE TO FILE APPEAL
Section 3. Where Filed. - The appeal shall be filed with the Regional
Arbitration Branch or Regional Office where the case was heard and
decided.
5. REQUISITES FOR PERFECTION OF APPEAL
Section 4. requisites For Perfection Of Appeal. - a) The appeal shall be:
1) filed within the reglementary period provided in Section 1 of this
Rule; 2) verified by the appellant himself in accordance with Section 4,
Rule 7 of the Rules of Court, as amended; 3) in the form of a
memorandum of appeal which shall state the grounds relied upon and
the arguments in support thereof, the relief prayed for, and with a
statement of the date the appellant received the appealed decision,
resolution or order; 4) in three (3) legibly typewritten or printed copies;
and 5) accompanied by i) proof of payment of the required appeal fee;
ii) posting of a cash or surety bond as provided in Section 6 of this Rule;
iii) a certificate of non-forum shopping; and iv) proof of service upon
the other parties.
b) A mere notice of appeal without complying with the other requisites
aforestated shall not stop the running of the period for perfecting an
appeal.
c) The appellee may file with the Regional Arbitration Branch or
Regional Office where the appeal was filed, his answer or reply to
appellant's memorandum of appeal, not later than ten (10) calendar
days from receipt thereof. Failure on the part of the appellee who was
properly furnished with a copy of the appeal to file his answer or reply
within the said period may be construed as a waiver on his part to file
the same.
d) Subject to the provisions of Article 218 of the Labor Code, once the
appeal is perfected in accordance with these Rules, the Commission
shall limit itself to reviewing and deciding only the specific issues that
were elevated on appeal.
6. FRIVOLOUS APPEAL
Section 11, Rule VI of the NLRC Rules of Procedure empowers
not only the Commission but also the Labor Arbiter to impose
reasonable penalties, including fines and censures, upon a
party for filing a frivolous appeal. This implies that even when
the appeal is still with the Labor-Arbiter, and not yet
transmitted to the Commission, the former may already find it
frivolous and, there and then, terminate that appeal.
6.1 Unverified Letter Not Proper Appeal
7. PAYMENT OF APPEAT FEES
Section 5. Appeal Fee. - The appellant shall pay an appeal fee of One
Hundred Fifty Pesos (P150.00) to the Regional Arbitration Branch or
Regional Office of origin, and the official receipt of such payment shall
form part of the records of the case.
The failure to pay the appeal docketing fee confers a directory
and not a mandatory power to dismiss an appeal, and such
power must be exercised with a sound discretion and with a
great deal of circumspection considering all attendant
circumstances.
8. APPEAL BOND; FILING ON TIME; EXCEPTIONS
Section 6. Bond. - In case the decision of the Labor Arbiter or the
Regional Director involves a monetary award, an appeal by the
employer may be perfected only upon the posting of a bond, which
shall either be in the form of cash deposit or surety bond equivalent in
amount to the monetary award, exclusive of damages and attorney's
fees.
In case of surety bond, the same shall be issued by a reputable bonding
company duly accredited by the Commission or the Supreme Court, and
shall be accompanied by original or certified true copies of the
following:
a) a joint declaration under oath by the employer, his counsel, and the
bonding company, attesting that the bond posted is genuine, and shall
be in effect until final disposition of the case.
b) an indemnity agreement between the employer-appellant and
bonding company;
c) proof of security deposit or collateral securing the bond: provided,
that a check shall not be considered as an acceptable security;
d) a certificate of authority from the Insurance Commission;
e) certificate of registration from the Securities and Exchange
Commission;
f) certificate of authority to transact surety business from the Office of
the President;
g) certificate of accreditation and authority from the Supreme Court;
and
h) notarized board resolution or secretary's certificate from the
bonding company showing its authorized signatories and their
specimen signatures.
A cash or surety bond shall be valid and effective from the date of
deposit or posting, until the case is finally decided, resolved or
terminated, or the award satisfied.This condition shall be deemed
incorporated in the terms and conditions of the surety bond, and shall
be binding on the appellants and the bonding company.
The appellant shall furnish the appellee with a certified true copy of the
said surety bond with all the above-mentioned supporting
18 | P LATON
documents.The appellee shall verify the regularity and genuineness
thereof and immediately report any irregularity to the Commission.
Upon verification by the Commission that the bond is irregular or not
genuine, the Commission shall cause the immediate dismissal of the
appeal, and censure or cite in contempt the responsible parties and
their counsels, or subject them to reasonable fine or penalty.
No motion to reduce bond shall be entertained except on meritorious
grounds, and only upon the posting of a bond in a reasonable amount
in relation to the monetary award.
The mere filing of a motion to reduce bond without complying with the
requisites in the preceding paragraphs shall not stop the running of the
period to perfect an appeal.
The bond is sine qua non to the perfection of appeal from the
labor arbiter’s monetary award.
8.1 Motion to Reduce Bond under NLRC Rules
A motion to reduce the amount of the bond may be
entertained, but, meantime, a bond in reasonable amount must
be filed anyway.
8.2 No Bond, No Appeal Perfected
The lawmakers intended the posting of a cash or surety bond
by the employer to be the exclusive means by which an
employer’s appeal may be considered completed.
8.2a Relaxing the Ten-day Period
8.3 No Distinction Between “Filing” and “Perfection” of Appeal;
Star Angel Decision, Not “Venerable”
8.4 Amount of Appeal Bond Excludes Damages
An appeal is deemed perfected upon the posting of the bond
equivalent to the monetary award exclusive of moral and
exemplary damages as well as attorney’s fees.
8.5 Is Property Bond Acceptable? YES.
8.6 Supersedeas Bond
Substantial justice demands that it fulfill its commitment to
post the bond in order to stay execution of the judgment
against it pending resolution of the appeal therefrom. This
consideration cannot be outweighed by the claim that
procedural errors were committed by the Labor Arbiter.
9. RECORDS AND TRANSMITTAL
Section 7. Records of Case on Appeal. - The records of a case shall have
a corresponding index of its contents which shall include the following:
a) the original copy of the complaint; b) other pleadings and motions; c)
minutes of the proceedings, notices, transcripts of stenographic notes,
if any; d) decisions, orders, and resolutions as well as proof of service
thereof, if available; e) the computation of the award; f) memorandum
of appeal and the reply or answer thereto, if any, and proof of service,
if available; g) official receipt of the appeal fee; and h) the appeal bond,
if any.
The records shall be chronologically arranged and paged prominently.
Section 8. Transmittal Of Records Of Case On Appeal. - Within forty-
eight (48) hours after the filing of the appeal, the records of the case
shall be transmitted by the Regional Arbitration Branch or office of
origin to the Commission.
10. EFFECT OF APPEAL OF ARBITER’S DECISION
Section 9. Perfection Of Appeal; Effect. - Without prejudice to
immediate reinstatement pending appeal under Section 6 of Rule XI,
once an appeal is filed, the Labor Arbiter loses jurisdiction over the
case. All pleadings and motions pertaining to the appealed case shall
thereafter be addressed to and filed with the Commission.
10.1 Execution or Reinstatement Pending Appeal
Section 6. Execution of Reinstatement Pending Appeal. - In case the
decision includes an order of reinstatement, and the employer disobeys
the directive under the second paragraph of Section 14 of Rule V or
refuses to reinstate the dismissed employee, the Labor Arbiter shall
immediately issue writ of execution, even pending appeal, directing the
employer to immediately reinstate the dismissed employee either
physically or in the payroll, and to pay the accrued salaries as a
consequence of such reinstatement at the rate specified in the
decision.
The Sheriff shall serve the writ of execution upon the employer or any
other person required by law to obey the same. If he disobeys the writ,
such employer or person may be cited for contempt in accordance with
Rule IX.
10.2 Effect of Perfection of Appeal on Execution
Section 9. Effect of Perfection of Appeal on Execution. - The perfection
of an appeal shall stay the execution of the decision of the Labor
Arbiter on appeal, except execution for reinstatement pending appeal.
11. FRIVOLOUS OR DILATORY APPEALS
Section 10. Frivolous or Dilatory Appeals. - No appeal from an
interlocutory order shall be entertained.To discourage frivolous or
dilatory appeals, including those taken from interlocutory orders, the
Commission may censure or cite in contempt the erring parties and
their counsels, or subject them to reasonable fine or penalty.
12. APPEALS FROM DECISION OF OTHER AGENCIES
Section 11. Appeals from Decision of Other Agencies. - The Rules
provided herein governing appeals from the decisions or orders of
Labor Arbiters shall apply to appeals to the Commission from decisions
or orders of the other offices or agencies appealable to the Commission
according to law.
13. PROCEEDING BEFORE THE COMMISSION
Section 2. Composition and Internal Functions of the Commission En
Banc and Its Divisions. – b) Commission En Banc. - The Commission shall
sit en banc only for purposes of promulgating rules and regulations
governing the hearing and disposition of cases before its Divisions and
Regional Arbitration Branches, and for the formulation of policies
affecting its administration and operations. It may, on temporary or
emergency basis, allow cases within the jurisdiction of any Division to
be heard by any other Division whose docket allows the additional
workload and such transfer will not expose litigants to unnecessary
additional expense.
c) Divisions. - Unless otherwise provided by law, the Commission shall
exercise its adjudicatory and all other powers, functions and duties
through its five (5) Divisions. Each Division shall consist of one member
from the public sector who shall act as the Presiding Commissioner and
one member each from the workers and employers sectors,
respectively.
19 | P LATON
Section 4. Commission En Banc Session, Quorum and Vote. - c) Division.
- The presence of at least two (2) Commissioners of a Division shall
constitute a quorum. The concurrence of two (2) Commissioners of a
Division shall be necessary for the pronouncement of a judgment or
resolution.
Whenever the required membership in a Division is not complete and
the concurrence of two (2) Commissioners to arrive at a judgment or
resolution cannot be obtained, the Chairman shall designate such
number of additional Commissioners from the other Divisions as may
be necessary from the same sector.
d) Role of Chairman in the Division. - The Chairman of the Commission
may convene and preside over the session of any Division to consider
any case pending before it and participate in its deliberations, if in his
judgment, his presence therein will best serve the interests of labor
justice. He shall not however, participate in the voting by the Division,
except when he is acting as Presiding Commissioner of the Division in
the absence of the regular Presiding Commissioner
13.1 Issues on Appeal
Section 4(d) Rule VI of the NLRC Rules of Procedure, the
Commission shall, in cases of perfected appeals, limit itself to
reviewing those issues which were raised on appeal.
13.2 Technical Rules Not Binding
Section 10. Technical Rules Not Binding. - The rules of procedure and
evidence prevailing in courts of law and equity shall not be controlling
and the Commission shall use every and all reasonable means to
ascertain the facts in each case speedily and objectively, without regard
to technicalities of law or procedure, all in the interest of due process.
In any proceeding before the Commission, the parties may be
represented by legal counsel but it shall be the duty of the Chairman,
any Presiding Commissioner or Commissioner to exercise complete
control of the proceedings at all stages.
13.2a Evidence Submitted on Appeal to NLRC
The settled rule is that the NLRC is not precluded from receiving
evidence on appeal as technical rules of evidence are not
binding in labor cases. In fact, labor officials are mandated by
the Labor Code to use every and all reasonable means to
ascertain the facts in each case speedily and objectively,
without regard to technicalities of law or procedure, all in the
interest of due process.
13.3 Conciliation/Mediation
Section 11. Conciliation and Mediation. - In the exercise of its exclusive,
original and appellate jurisdiction, the Commission may exert all efforts
towards the amicable settlement of a labor dispute.
The settlement of cases on appeal, to be valid and binding between the
parties, shall be made before the Commissioner or his authorized
representative.
13.4 Consultation
Section 5. Consultation. - The conclusions of a Division on any case or
matter submitted to it for decision shall be reached in consultation
before the case is assigned to a member for the writing of the opinion.
It shall be mandatory for the Division to meet for the purpose of the
consultation ordained herein.
A certification to this effect signed by the Presiding Commissioner of
the Division shall be issued and a copy thereof attached to the record of
the case and served upon the parties.
13.5 Dissenting Opinion
Section 6. Dissenting Opinion. - Should any member of a Division
indicate his intention to write a dissenting opinion, he may file the
same within the period prescribed for deciding or resolving the appeal;
otherwise, such written dissenting opinion shall not be considered part
of the records of the case.
13.5 Inhibition
Section 7. Inhibition. - No motion to inhibit the entire Division of the
Commission shall be entertained. However, any Commissioner may
inhibit himself from the consideration and resolution of any case or
matter before the Division and shall so state in writing the legal or
justifiable grounds therefor. In the event that a member inhibits
himself, the case shall be raffled by the Executive Clerk or Deputy
Executive Clerk to either of the two (2) remaining Commissioners. In
case two (2) Commissioners in a Division inhibit themselves in a case or
matter before it, the Chairman shall, as far as practicable, appoint two
(2) Commissioners from other Divisions representing the sector of the
Commissioners who inhibited themselves.
14. FORM OF DECISION, RESOLUTION AND ORDER
Section 13. Form of Decision, Resolution and Order. - The decision,
resolution and order of the Commission shall state clearly and distinctly
the findings of facts, issues, and conclusions of law on which it is based,
and the relief granted, if any. If the decision, resolution or order
involves monetary awards, the same shall contain the specific amount
awarded as of the date the decision is rendered.
Under Art. 223, the Commission shall decide ll cases within
twenty calendar days from receipt of the answer of the
appellee.
The decision of the Commission shall be final and executory
after ten calendar days from receipt thereof by the parties.
14.1 Reasoned Reversal
While it is within respondent Commission's competence, as an
appellate agency reviewing decisions of Labor Arbiters, to
disagree with and set aside the latter's findings, it stands to
reason that it should state an acceptable cause therefor. It
would otherwise be a whimsical, capricious, oppressive,
illogical, unreasonable exercise of quasi-judicial prerogative,
subject to invalidation by the extraordinary writ of certiorari.
14.2 Extended Meaning of “Appeal” under Article 223; NLRC
May Issue Writ of Certiorari
15. FINALITY OF DECISION OF THE COMMISSION AND ENTRY
OF JUDGMENT
Section 14. Finality Of Decision Of The Commission And Entry Of
Judgment. - a) Finality of the Decisions, Resolutions or Orders of the
Commission. - Except as provided in Section 9 of Rule X, the decisions,
resolutions or orders of the Commission shall become final and
executory after ten (10) calendar days from receipt thereof by the
parties.
b) Entry of Judgment. - Upon the expiration of the ten (10) calendar day
period provided in paragraph (a) of this Section, the decision,
resolution, or order shall be entered in a book of entries of judgment.
The Executive Clerk or Deputy Executive Clerk shall consider the
decision, resolution or order as final and executory after sixty (60)
20 | P LATON
calendar days from date of mailing in the absence of return cards,
certifications from the post office, or other proof of service to parties.
16. MOTION FOR RECONSIDERATION
Section 15.MOTIONS FOR RECONSIDERATION. - Motion for
reconsideration of any decision, resolution or order of the Commission
shall not be entertained except when based on palpable or patent
errors; provided that the motion is under oath and filed within ten (10)
calendar days from receipt of decision, resolution or order, with proof
of service that a copy of the same has been furnished, within the
reglementary period, the adverse party; and provided further, that only
one such motion from the same party shall be entertained.
Should a motion for reconsideration be entertained pursuant to this
section, the resolution shall be executory after ten (10) calendar days
from receipt thereof.
The NLRC Rules does not allow a second motion for
reconsideration. The NLRC abuses its discretion when it violates
its own rules by entertaining such a motion.
A supplemental motion for reconsideration filed outside the 10-
day appeal period cannot be entertained.
16.1 Party Who Failed to Appeal on Time From Decision of
Labor Arbiter May Still File Motion for Reconsideration of NLRC
Decision
It is also an accepted postulate that issues not raised in the
lower court or the labor arbiter may not be raised for the first
time on appeal.
17. CERTIFIED CASES
18. APPEAL FROM THE NATIONAL LABOR RELATIONS
COMMISSION
18.1 Review by Certiorari by the Court of Appeals; St. Martin
case
In a nutshell, the St. Martin precedent states:
(1) the way to review NLRC decisions is through the special civil
action of certiorari under Rule 65;
(2) the jurisdiction over such action belongs to both the
Supreme Court and the Court of Appeals; but
(3) in line with the doctrine n hierarchy of courts, the petition
should be initially presented to the lower of the two courts,
that is, the Court of Appeals.
18.2 When and Where to File Petition
Section 4. When and where petition filed. — The petition shall be filed
not later than sixty (60) days from notice of the judgment, order or
resolution. In case a motion for reconsideration or new trial is timely
filed, whether such motion is required or not, the sixty (60) day period
shall be counted from notice of the denial of said motion.
The petition shall be filed in the Supreme Court or, if it relates to the
acts or omissions of a lower court or of a corporation, board, officer or
person, in the Regional Trial Court exercising jurisdiction over the
territorial area as defined by the Supreme Court. It may also be filed in
the Court of Appeals whether or not the same is in aid of its appellate
jurisdiction, or in the Sandiganbayan if it is in aid of its appellate
jurisdiction. If it involves the acts or omissions of a quasi-judicial
agency, unless otherwise provided by law or these Rules, the petition
shall be filed in and cognizable only by the Court of Appeals.
No extension of time to file the petition shall be granted except for
compelling reason and in no case exceeding fifteen (15) days. (4a) (Bar
Matter No. 803, 21 July 1998; A.M. No. 00-2-03-SC)
18.2a One Day Late
The 60-day period must carefully be observed.
Reglementary periods are indispensable interdictions against
needless delays.
18.2b Certified True Copy of NLRC Decision
Numerous decisions issued by this Court emphasize that in
appeals under Rule 45 and in original civil actions for certiorari
under Rule 65 in relation to Rules 46 and 56, what is required to
be certified is the copy of the questioned judgment, final order
or resolution. Since the LA's Decision was not the questioned
ruling, it did not have to be certified. What had to be certified
was the NLRC Decision.
18.3 Effect on NLRC’s Decision
Section 10. Effect of Petition for Certiorari on Execution. - A petition for
certiorari with the Court of Appeals or the Supreme Court shall not stay
the execution of the assailed decision unless a restraining order is
issued by said courts.
18.4 Appeal to Labor Secretary Abolished
Presidential Decree No. 1391 amended Article 223 and
abolished appeals to the Secretary of Labor.
18.5 Grounds for Certiorari
A party may seasonably avail of the special civil action for
certiorari, where the tribunal, board or officer exercising
judicial functions has acted without or in excess of its
jurisdiction, or with grave abuse of discretion, and praying that
judgment be rendered annulling or modifying the proceedings,
as the law requires, of such tribunal, board or officer.
In spite of statutory provisions making ‘final’ the decisions of
certain administrative agencies, the Supreme Court [or Court of
Appeals] using the power of judicial review, has taken
cognizance of petitions questioning the decisions where want
of jurisdiction, grave abuse of discretion, violation of due
process, denial of substantial justice, or erroneous
interpretation of the law were brought to its attention.
The writ of certiorari will issue to undo those acts, and do
justice to the aggrieved party.
18.6 “Grave Abuse of Discretion”
By grave abuse of discretion is meant capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction.
Mere abuse of discretion is not enough. It must be grave abuse
of discretion as when the power is exercised in an arbitrary or
despotic manner by reason of passion or personal hostility, and
must be so patent and so gross as to amount to an evasion of a
positive duty or to a virtual refusal to perform the duty
enjoined or to act at all in contemplation of law.
21 | P LATON

18.7 Sole Office of Certiorari
The appellate court’s jurisdiction to review a decision of the
NLRC in a petition for certiorari is confined to issues of
jurisdiction or grave abuse of discretion. An extraordinary
remedy, a petition for certiorari is available only and
restrictively in truly exceptional cases. The sole office of the
writ of certiorari is the correction of errors of jurisdiction
including the commission of grave abuse of discretion
amounting to lack or excess of jurisdiction. It does not include
correction of the NLRC’s evaluation of the evidence or of its
factual findings. Such findings are generally accorded not only
respect but also finality. A party assailing such findings bears
the burden of showing that the tribunal acted capriciously and
whimsically or in total disregard of evidence material to the
controversy, in order that the extraordinary writ of certiorari
will lie.
18.8 Appeal from OSEC to CA; St. Martin Ruling Applies
Though appeals from the NLRC to the Secretary of Labor were
eliminated, presently there are several instances in the Labor
Code and its implementing and related rules where an appeal
can be filed with the Office of the Secretary of Labor or the
Secretary of Labor issues a ruling, to wit:
(1) Under the Rules and Regulations Governing Recruitment
and Placement Agencies for Local Employment 14 dated June 5,
1997 superseding certain provisions of Book I (Pre-
Employment) of the implementing rules, the decision of the
Regional Director on complaints against agencies is appealable
to the Secretary of Labor within ten (10) working days from
receipt of a copy of the order, on specified grounds, whose
decision shall be final and inappealable.
(2) Art. 128 of the Labor Code provides that an order issued by
the duly authorized representative of the Secretary of Labor in
labor standards cases pursuant to his visitorial and
enforcement power under said article may be appealed to the
Secretary of Labor.
Sec. 2 in relation to Section 3 (a), Rule X, Book III (Conditions of
Employment) of the implementing rules gives the Regional Director the
power to order and administer compliance with the labor standards
provisions of the Code and other labor legislation. Section 4 gives the
Secretary the power to review the order of the Regional Director, and
the Secretary's decision shall be final and executory.
Sec. 1, Rule IV (Appeals) of the Rules on the Disposition of Labor
Standards Cases in the Regional Offices dated September 16, 1987 15
provides that the order of the Regional Director in labor standards
cases shall be final and executory unless appealed to the Secretary of
Labor.
Sec. 5, Rule V (Execution) provides that the decisions, orders or
resolutions of the Secretary of Labor and Employment shall become
final and executory after ten (10) calendar days from receipt of the case
records. The filing of a petition for certiorari before the Supreme Court
shall not stay the execution of the order or decision unless the
aggrieved party secures a temporary restraining order from the Court
within fifteen (15) calendar days from the date of finality of the order
or decision or posts a supersedeas bond.
Sec. 6 of Rule VI (Health and Safety Cases) provides that the Secretary
of Labor at his own initiative or upon the request of the employer
and/or employee may review the order of the Regional Director in
occupational health and safety cases. The Secretary's order shall be
final and executory.
(2) Art. 236 provides that the decision of the Labor Relations
Division in the regional office denying an applicant labor
organization, association or group of unions or workers'
application for registration may be appealed by the applicant
union to the Bureau of Labor Relations within ten (10) days
from receipt of notice thereof.
Sec. 4, Rule V, Book V (Labor Relations), as amended by Department
Order No. 9 dated May 1, 1997 16 provides that the decision of the
Regional Office denying the application for registration of a workers
association whose place of operation is confined to one regional
jurisdiction, or the Bureau of Labor Relations denying the registration of
a federation, national or industry union or trade union center may be
appealed to the Bureau or the Secretary as the case may be who shall
decide the appeal within twenty (20) calendar days from receipt of the
records of the case.
(3) Art. 238 provides that the certificate of registration of any
legitimate organization shall be canceled by the Bureau of
Labor Relations if it has reason to believe, after due hearing,
that the said labor organization no longer meets one or more of
the requirements prescribed by law.
Sec. 4, Rule VIII, Book V provides that the decision of the Regional
Office or the Director of the Bureau of Labor Relations may be appealed
within ten (10) days from receipt thereof by the aggrieved party to the
Director of the Bureau or the Secretary of Labor, as the case may be,
whose decision shall be final and executory.
(4) Art. 259 provides that any party to a certification election
may appeal the order or results of the election as determined
by the Med-Arbiter directly to the Secretary of Labor who shall
decide the same within fifteen (15) calendar days.
Sec. 12, Rule XI, Book V provides that the decision of the Med-Arbiter
on the petition for certification election may be appealed to the
Secretary.
Sec. 15, Rule XI, Book V provides that the decision of the Secretary of
Labor on an appeal from the Med-Arbiter's decision on a petition for
certification election shall be final and executory. The implementation
of the decision of the Secretary affirming the decision to conduct a
certification election shall not be stayed unless restrained by the
appropriate court.
Sec. 15, Rule XII, Book V provides that the decision of the Med-Arbiter
on the results of the certification election may be appealed to the
Secretary within ten (10) days from receipt by the parties of a copy
thereof, whose decision shall be final and executory.
Sec. 7, Rule XVIII (Administration of Trade Union Funds and Actions
Arising Therefrom), Book V provides that the decision of the Bureau in
complaints filed directly with said office pertaining to administration of
trade union funds may be appealed to the Secretary of Labor within ten
(10) days from receipt of the parties of a copy thereof.
Sec. 1, Rule XXIV (Execution of Decisions, Awards, or Orders), Book V
provides that the decision of the Secretary of Labor shall be final and
executory after ten (10) calendar days from receipt thereof by the
parties unless otherwise specifically provided for in Book V.
(5) Art. 263 provides that the Secretary of Labor shall decide or
resolve the labor dispute over which he assumed jurisdiction
within thirty (30) days from the date of the assumption of
jurisdiction. His decision shall be final and executory ten (10)
calendar days after receipt thereof by the parties.
22 | P LATON
18.9 Exhaustion of Administrative Remedies; Motion for
Reconsideration Required
The remedy of an aggrieved party in a decision or resolution of
the Secretary of the DOLE is to timely file a motion for
reconsideration as a precondition of or any further or
subsequent remedy, and then seasonably file a special civil
action for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure.
Petitioner’s failure to file its motion for reconsideration
seasonably is fatal to its cause and in effect, renders final and
executor the Resolution of the Secretary of the DOLE.
A petition for certiorari should be preceded by exhaustion of
administrative remedies.
When an administrative remedy is provided by law, relief must
be sought by first exhausting that remedy before seeking
judicial intervention. Failure to do so is fatal.
18.10 Exceptions
It has been held that the requirement of a motion for
reconsideration may be dispensed with in the following
instances: (1) when the issue raised is one purely of law; (2)
where public interest is involved; (3) in cases of urgency; and
(4) where special circumstances warrant immediate or more
direct action. On the other hand, among the accepted
exceptions to the rule on exhaustion of administrative
remedies are: (1) where the question in dispute is purely a legal
one; and (2) where the controverted act is patently illegal or
was performed without jurisdiction or in excess of jurisdiction.
19. CERTIFICATION OF NON-FORUM SHOPPING
Forum shopping is the act or attempt to present the same
dispute to different adjudicators in the hope of securing a
favourable ruling.
In relation thereto, Rule 7, Section 5 of the Rules of Court
provides:
Certification against forum shopping.—The plaintiff or principal party
shall certify under oath in the complaint or other initiatory pleading
asserting a claim for relief, or in a sworn certification annexed thereto
and simultaneously filed therewith:
(a) that he has not theretofore commenced any action or filed any
claim involving the same issues in any court, tribunal or quasi-judicial
agency and, to the best of his knowledge, no such other action or claim
is pending therein;
(b) if there is such other pending action or claim, a complete statement
of the present status thereof; and
(c) if he should thereafter learn that the same or similar action or claim
has been filed or is pending, he shall report that fact within five (5) days
therefrom to the court wherein his aforesaid complaint or initiatory
pleading has been filed.
Failure to comply with the foregoing requirements shall not be
curable by mere amendment of the complaint or other
initiatory pleading but shall be cause for the dismissal of the
case without prejudice, unless otherwise provided, upon
motion and after hearing. The submission of a false certification
or non-compliance with any of the undertakings therein shall
constitute indirect contempt of court, without prejudice to the
corresponding administrative and criminal actions. If the acts of
the party or his counsel clearly constitute willful and deliberate
forum shopping, the same shall be ground for summary
dismissal with prejudice and shall constitute direct contempt,
as well as a cause for administrative sanctions.
19.1 Certification of Nonforum Shopping Must be Made by
Petitioner
The certification must be made by petitioner himself and not by
counsel since it is petitioner who is in the best position to know
whether he has previously commenced any similar action
involving the same issues in any other tribunal or agency.
20. DISPOSITION BY THE COURT OF APPEALS
20.1 Remand
20.2 Dismissal of Appeal
20.3 Findings of Facts Generally Final
As a general rule, the findings of administrative agencies are
accorded not only respect but even finality.
The doctrine that the findings of facts of the NLRC are binding
on this Court if supported by substantial evidence is well
established. However, in the same way that the findings of facts
unsupported by substantial and credible evidence do not bind
the Supreme Court [or Court of Appeals], neither will we
uphold erroneous conclusions of the NLRC when we find that
the latter committed grave abuse of discretion in reversing the
decision of the labor arbiter, especially if the findings of NLRC
based on practically the same facts established in the hearings
before the arbiter are speculative and conjectural
20.4 Exceptions:
(1) when the findings are grounded entirely on speculation,
surmises, or conjectures;
(2) when the inference made is manifestly mistaken, absurd, or
impossible;
(3) when there is grave abuse of discretion;
(4) when the judgment is based on a misapprehension of facts;
(5) when the findings of facts are conflicting;
(6) when in making its findings, the Court of Appeals went
beyond the issues of the case, or its findings are contrary to the
admissions of both the appellant and the appellee;
(7) when the findings are contrary to the trial court;
(8) when the findings are conclusions without citation of
specific evidence on which they are based;
(9) when the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the
respondent;
23 | P LATON
(10) when the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on
record; and
(11) when the Court of Appeals manifestly overlooked certain
relevant facts not disputed by the parties, which, if properly
considered, would justify a different conclusion.
20.5 Examples: Some Findings of Facts Reversed
21. FROM CA TO SC: ONLY QUESTION OF LAW, RULE 45
It must be filed within fifteen (15) days from notice of the
judgment or final order or resolution appealed from, or of the
denial of the petitioner’s motion for new trial or
reconsideration.
The special civil action of certiorari under Rule 65 cannot be
used as a substitute for an appeal under Rule 45 that the
petitioner already lost.
________
Art. 224. Execution of decisions, orders or awards.
a. The Secretary of Labor and Employment or any Regional
Director, the Commission or any Labor Arbiter, or Med-Arbiter
or Voluntary Arbitrator may, motu proprio or on motion of any
interested party, issue a writ of execution on a judgment within
five (5) years from the date it becomes final and executory,
requiring a sheriff or a duly deputized officer to execute or
enforce final decisions, orders or awards of the Secretary of
Labor and Employment or regional director, the Commission,
the Labor Arbiter or med-arbiter, or voluntary arbitrators. In
any case, it shall be the duty of the responsible officer to
separately furnish immediately the counsels of record and the
parties with copies of said decisions, orders or awards. Failure
to comply with the duty prescribed herein shall subject such
responsible officer to appropriate administrative sanctions.
b. The Secretary of Labor and Employment, and the Chairman
of the Commission may designate special sheriffs and take any
measure under existing laws to ensure compliance with their
decisions, orders or awards and those of the Labor Arbiters and
voluntary arbitrators, including the imposition of administrative
fines which shall not be less than P500.00 nor more than
P10,000.00. (As amended by Section 13, Republic Act No. 6715,
March 21, 1989)
________
1. EXECUTION
A writ of “Execution” is an order to carry out, to implement, a
final judgment.
Under Art. 224, a writ of execution may be issued by the
following officials for the final decisions, order or awards
promulgated by them:
a) Secretary of Labor and Employment;
b) any Regional Director;
c) the Commission;
d) the Labor Arbiter;
e)the Med-Arbiter;
f) the Voluntary Arbitrator; or
g) the Panel of Arbitrators.
The writ of execution on a judgment may be issued motu
proprio or on motion of any interested party within five (5)
years from the date it becomes final and executory
Execution is done through the regular or special sheriff. But
alternatively, the Secretary, the Commission, any Labor Arbiter,
the Regional Director or the Director of the Bureau of Labor
Relations in appropriate cases may deputize the Philippine
National Police or any law enforcement agencies in the
enforcement of final awards, orders or decisions.
1.1 Article 224 is Execution, Not Appeal, Procedure
1.2 Both Party and Counsel Should Be Notified
2. EXECUTION UPON FINALITY OF DECISION OR ORDER
Section 1. Execution Upon Finality of Decision or Order. - a) A writ of
execution may be issued motu proprio or on motion, upon a decision or
order that finally disposes of the action or proceedings after the parties
and their counsels or authorized representatives are furnished with
copies of the decision or order in accordance with these Rules, but only
after the expiration of the period to appeal if no appeal has been filed,
as shown by the certificate of finality. If an appeal has been filed, a writ
of execution may be issued when there is an entry of judgment as
provided for in Section 14 of Rule VII.
b) No motion for execution shall be entertained nor a writ of execution
be issued unless the Labor Arbiter or the Commission is in possession of
the records of the case which shall include an entry of judgment if the
case was appealed; except that, as provided for in Section 14 of Rule V
and Section 6 of this Rule, and in those cases where partial execution is
allowed by law, the Labor Arbiter shall retain duplicate original copies
of the decision to be implemented and proof of service thereof for the
purpose of immediate enforcement.
Section 2. Pre-Execution Conference. - Within two (2) working days
from receipt of a motion for the issuance of a writ of execution, and
subject to Section 1, paragraph (b) of this Rule, the Labor Arbiter shall
schedule a pre-execution conference or hearing to thresh out matters
relevant to execution, including the computation of the award.
Section 3. Form and Contents of a Writ of Execution. - The writ of
execution must be issued in the name of the Republic of the Philippines
signed by the Commission or Labor Arbiter requiring the Sheriff to
execute the decision, order, or award of the Commission or Labor
Arbiter, and must contain the dispositive portion thereof, the amount,
if any, to be demanded, and all lawful fees to be collected from the
losing party or any other person required by law to obey the same.
Section 4. Computation During Execution. - Where further computation
of the award in the decision, resolution or order is necessary during the
course of the execution proceedings, no writ of execution shall be
issued until after the computation has been approved by the Labor
Arbiter in an order issued after the parties have been duly notified and
heard on the matter.
Section 5. Execution of Monetary Judgment. - a) Immediate payment
on demand. - The Sheriff shall enforce a monetary judgment by
demanding the immediate payment of the full amount stated in the
writ of execution and all lawful fees from the losing party or any other
person required by law to obey the same.
24 | P LATON
b) In the event of failure or refusal of the losing party to pay the
judgment award, the Sheriff shall immediately proceed against the cash
deposit or surety bond posted by the losing party, if any;
c) If the bonding company refuses to comply with the writ of execution,
then its president and officers or authorized representatives shall be
cited for contempt, and the bonding company shall be barred from
transacting business with the Commission;
d) Should the cash deposit or surety bond be insufficient, or in case the
surety bond cannot be proceeded against for any reason, the Sheriff
shall, within five (5) days from demand, execute the monetary
judgment by levying on the property, personal and real, of the losing
party not exempt from execution, sufficient to cover the judgment
award, which may be disposed of for value at a public auction to the
highest bidder.
e) Proceeds of execution shall be deposited with the Cashier of the
concerned Division or Regional Arbitration Branch, or with an
authorized depositary bank. Where payment is made in the form of a
check, the same shall be payable to the Commission.
Section 7. Enforcement of Writ of Execution. - In executing a decision,
resolution or order, the Sheriff, or other authorized officer acting as
Sheriff of the Commission, shall be guided strictly by these Rules, and
by the Manual on Execution of Judgment, which shall form part of
these Rules. In the absence of applicable rules, the Rules of Court, as
amended, shall be applied in a suppletory manner.
Section 8. Execution By Motion or By Independent Action. - A decision
or order may be executed on motion within five (5) years from the date
it becomes final and executory. After the lapse of such period, the
judgment shall become dormant, and may only be enforced by an
independent action within a period of ten (10) years from date of its
finality.
Section 10. Effect of Petition for Certiorari on Execution. - A petition for
certiorari with the Court of Appeals or the Supreme Court shall not stay
the execution of the assailed decision unless a restraining order is
issued by said courts.
Section 11. Resolution of Motion to Quash. - The mere filing of a
motion to quash shall not stay execution proceedings. A motion to
quash shall be resolved by the Labor Arbiter within ten (10) working
days from submission of said motion for resolution.
3. APPEAL ON THE EXECUTION OF DECISION; SUPERVENING
EVENTS
A judgment becomes final and executory by operation of law,
not by judicial declaration. Accordingly, finality of judgment
becomes a fact upon the lapse of the reglementary period of
appeal if no appeal is perfected. In such a situation, the
prevailing party is entitled as a matter of right to a writ of
execution; and issuance thereof is a ministerial duty,
compellable by mandamus.
4. GENERAL RULE: REGIONAL TRIAL COURT CANNOT ISSUE
INJUNCTION AGAINST NLRC
Precedents abound confirming the rule that said courts have no
labor jurisdiction to act on labor cases or various incidents
arising therefrom, including the execution of decisions, awards
or orders. Jurisdiction to try and adjudicate such cases pertains
exclusively to the proper labor official concerned under the
Department of Labor and Employment. To hold otherwise is to
sanction split jurisdiction which is obnoxious to the orderly
administration of justice.
4.1 Execution Over Property Owned Only by Judgment Debtor;
Remedies of Third Party Claimant; The Yupangco Case
A third party whose property has been levied upon by a sheriff
to enforce a decision against a judgment debtor is afforded
with several alternative remedies to protect its interests. The
third party may avail himself of alternative remedies
cumulatively, and one will not preclude the third party from
availing himself of the other alternative remedies in the event
he failed in the remedy first availed of.
Thus, a third party may avail himself of the following alternative
remedies:
a) File a third party claim with the sheriff of the Labor Arbiter,
and
b) If the third party claim is denied, the third party may appeal
the denial to the NLRC.
Even if a third party claim was denied, a third party may still file
a proper action with a competent court to recover ownership
of the property illegally seized by the sheriff.
The right of a third-party claimant to file an independent action
to vindicate his claim of ownership over the properties seized is
reserved by Section 17 (now 16), Rule 39 of the Rules of Court.
The aforesaid remedies are nevertheless without prejudice to
'any proper action' that a third-party claimant may deem
suitable to vindicate 'his claim to the property.
Quite obviously, too, this 'proper action' would have for its
object the recovery of ownership or possession of the property
seized by the sheriff, as well as damages resulting from the
allegedly wrongful seizure and detention thereof despite the
third-party claim.
The remedies above mentioned are cumulative and may be
resorted to by a third-party claimant independent of or
separately from and without need of availing of the others.
4.2 RTC Injunction against Labor Arbiter or NLRC, When
Allowed
The regional trial court where the reinvindicatory action is filed
can issue an injunction or temporary restraining order against
the execution ordered by a labor arbiter or the NLRC.
The general rule that no court has the power to interfere by
injunction with the judgments or decrees of another court with
concurrent or coordinate jurisdiction possessing equal power to
grant injunctive relief, applies only when no third-party
claimant is involved.
Jurisprudence is likewise replete with rulings that since the
third-party claimant is not one of the parties to the action, he
could not, strictly speaking, appeal from the order denying his
claim, but should file a separate reinvindicatory action against
the execution creditor or the purchaser of the property after
the sale at public auction, or a complaint for damages against
the bond filed by the judgment creditor in favor of the sheriff.
4.3 Third Party Claim
25 | P LATON
Section 12. Third Party Claim. - A third party claim shall be filed within cancellation and revocation of labor union permits. It shall also set
five (5) days from the last day of posting or publication of the notice of policies, standards, and procedure relating to collective bargaining
execution sale; otherwise the claim shall be forever barred.The third agreements, and the examination of financial records of accounts of
party claimant shall execute an affidavit stating his title to the property labor organizations to determine compliance with relevant laws.
or right to possession thereof with supporting evidence, and shall file
the same with the Sheriff and the Commission or Labor Arbiter who 2. INTER-UNION AND INTRA-UNION DISPUTES; D.O. NO. 40-03
issued the writ of execution.Upon receipt of the third party claim, all
proceedings, with respect to the execution of the property subject of
"Inter-Union Dispute" refers to any conflict between and
such claim, shall automatically be suspended.The Labor Arbiter who
issued the writ may require the third party claimant to adduce among legitimate labor unions involving representation
additional evidence in support of his third party claim and to post a questions for purposes of collective bargaining or to any other
cash or surety bond equivalent to the amount of his claim, as provided conflict or dispute between legitimate labor unions.
for in Section 6 of Rule VI, without prejudice to the posting by the
prevailing party of a supersedeas bond in an amount equivalent to that "Intra-Union Dispute" refers to any conflict between and
posted by the third party claimant.The Labor Arbiter shall resolve the among union members, including grievances arising from any
propriety of such third party claim within ten (10) working days from violation of the rights and conditions of membership, violation
submission of said claim for resolution.
of or disagreement over any provision of the union's
constitution and by-laws, or disputes arising from
4.4 Simulated Sale, Void Ab Initio
chartering or affiliation of union.
A third-party claim on a levied property does not automatically
In inter/intra-union dispute the complaint may be filed by a
prevent execution. When a third-party claim is filed, the sheriff
union or union members; in a “related labor relations dispute”
is not bound to proceed with the levy of the property unless
the complaint may be filed by a party-in-interest who is not
the judgment creditor or the latter's agent posts an indemnity
necessarily a union or union member.
bond against the claim. Where the bond is filed, the remedy of
the third-party claimant is to file an independent reivindicatory
Whether the dispute be of the first or the second category, the
action against the judgment creditor or the purchaser of the
complainant or petition, if it involves an independent union, a
property at public auction.
chartered local, or a worker’s association, shall be filed with the
________
DOLE Regional Office where the labor organization is
registered. But if the complaint involves a federation or an
Art. 225. Contempt powers of the Secretary of Labor. In the
industry/national union, it shall be filed with the BLR itself.
exercise of his powers under this Code, the Secretary of Labor
may hold any person in direct or indirect contempt and impose
2.1 D.O. No. 40-03
the appropriate penalties therefor.
________
The Order appears to aim the following specific objectives:
Title III
1. to simplify the formation and registration of unions,
BUREAU OF LABOR RELATIONS
especially chartered locals
Art. 226. Bureau of Labor Relations. The Bureau of Labor
2. to simplify and expedite the holding of certification elections
Relations and the Labor Relations Divisions in the regional
offices of the Department of Labor, shall have original and
3. to promote responsible unionism, particularly in
exclusive authority to act, at their own initiative or upon
administration of union funds
request of either or both parties, on all inter-union and intra-
union conflicts, and all disputes, grievances or problems arising
4. to authorize union merger, consolidation, and change of
from or affecting labor-management relations in all workplaces,
name
whether agricultural or non-agricultural, except those arising
from the implementation or interpretation of collective
5. to authorize deregistration of collective bargaining
bargaining agreements which shall be the subject of grievance
agreements
procedure and/or voluntary arbitration.
2.2 Effect of Pendency
The Bureau shall have fifteen (15) working days to act on labor
cases before it, subject to extension by agreement of the Section 3. Effects of the filing/pendency of inter/intra-union and other
parties. (As amended by Section 14, Republic Act No. 6715, related labor relations disputes. - The rights, relationships and
March 21, 1989). obligations of the parties litigants against each other and other parties-
________ in-interest prior to the institution of the petition shall continue to
remain during the pendency of the petition and until the date of finality
1. BLR JURISDICTION of the decision rendered therein.

The Bureau of Labor Relations (BLR) no longer handles “all”
labor-management disputes; rather, its functions and
jurisdiction are largely confined to union matters, collective
bargaining registry, and labor education.
Section 16. Bureau of Labor Relations. - The Bureau of Labor Relations
shall set policies, standards, and procedures on the registration and
supervision of legitimate labor union activities including denial,
2.3 Appeal
Section 16. Appeal. - The decision of the Med-Arbiter and Regional
Director may be appealed to the Bureau by any of the parties within
ten (10) days from receipt thereof, copy furnished the opposing party.
The decision of the Bureau Director in the exercise of his/her original
jurisdiction may be appealed to the Office of the Secretary by any party
within the same period, copy furnished the opposing party.

26 | P LATON
The appeal shall be verified under oath and shall consist of a
memorandum of appeal specifically stating the grounds relied upon by
the appellant, with supporting arguments and evidence.
Section 17. Where to file appeal. - The memorandum of appeal shall be
filed in the Regional Office or Bureau where the complaint or petition
originated. Within twenty-four (24) hours from receipt of the
memorandum of appeal, the Bureau or Regional Director shall cause
the transmittal thereof together with the entire records of the case to
the Office of the Secretary or the Bureau, as the case may be.
Section 18. Finality of Decision. - Where no appeal is filed within the
ten-day period, the Bureau and Regional Director or Med-Arbiter, as
the case may be, shall enter the finality of the decision in the records of
the case and cause the immediate implementation thereof.
Section 19. Period to reply. - A reply to the appeal may be filed by any
party to the complaint or petition within ten (10) days from receipt of
the memorandum of appeal. The reply shall be filed directly with the
Bureau or the Office of the Secretary, as the case may be.
Section 20. Decision of the Bureau/Office of the Secretary. - The Bureau
Director or the Secretary, as the case may be, shall have twenty (20)
days from receipt of the entire records of the case within which to
decide the appeal. The filing of the memorandum of appeal from the
decision of the MedArbiter or Regional Director and Bureau Director
stays the implementation of the assailed decision.
The Bureau or Office of the Secretary may call the parties to a
clarificatory hearing in aid of its appellate
jurisdiction.
Section 21. Finality of Decision of Bureau/Office of the Secretary. - The
decision of the Bureau or the Office of the Secretary shall become final
and executory after ten (10) days from receipt thereof by the parties,
unless a motion for its reconsideration is filed by any party therein
within the same period. Only one (1) motion for reconsideration of the
decision of the Bureau or the Office of the Secretary in the exercise of
their appellate jurisdiction shall be allowed.
Section 22. Execution of decision. - The decision of the Med-Arbiter and
Regional Director shall automatically be stayed pending appeal with the
Bureau. The decision of the Bureau in the exercise of its appellate
jurisdiction shall be immediately executory upon issuance of entry of
final judgment.
The decision of the Bureau in the exercise of its original jurisdiction
shall automatically be stayed pending appeal with the Office of the
Secretary. The decision of the Office of the Secretary shall be
immediately executory upon issuance of entry of final judgment.
3. EXTENT OF BLR AUTHORITY
In the interest of industrial peace and for the promotion of the
salutary constitutional objectives of social justice and
protection to labor, the competence of the governmental
entrusted with supervision over disputes involving employers
and employees as well as "inter-union and intra-union
conflicts," is broad and expensive.
4. KATARUNGANG PAMBARANGAY, NOT APPLICABLE TO
LABOR DISPUTES
Presidential Decree No. 1508 applies only to courts of justice
and not to labor relations commissions or labor arbitrators’
offices.
Note: Conciliation-mediation is now done by NCMV not BLR.
Instead of simplifying labor proceedings designed at
expeditious settlement or referral to the proper court or office
to decide it finally, the position taken by the petitioner would
only duplicate the conciliation proceedings and unduly delay
the disposition of the labor case.
________
Art. 227. Compromise agreements. Any compromise
settlement, including those involving labor standard laws,
voluntarily agreed upon by the parties with the assistance of
the Bureau or the regional office of the Department of Labor,
shall be final and binding upon the parties. The National Labor
Relations Commission or any court, shall not assume
jurisdiction over issues involved therein except in case of non-
compliance thereof or if there is prima facie evidence that the
settlement was obtained through fraud, misrepresentation, or
coercion.
________
1. COMPROMISE AGREEMENTS
The assistance of the BLR or the regional office of the DOLE in
the execution of a compromise settlement is a basic
requirement; without it, there can be no valid compromise
settlement.
The NLRC or any court shall not assume jurisdiction over issues
involved therein, except:
a) in case of noncompliance with the compromise agreement,
or
b) if there is prima facie evidence that the settlement was
obtained through fraud, misrepresentation, or coercion.
Along the same line, the Court reiterated in 2005:
There are legitimate waivers that represent a voluntary and reasonable
settlement of a worker’s claim which should be respected by the courts
as the law between the parties. Indeed, not all quitclaims are per se
invalid or against public policy, except (1) where there is clear proof
that the waiver was wangled from an unsuspecting or gullible person,
or (2) where the terms of settlement are unconscionable on their faces;
in these cases, the law will step in to annul the questionable
transactions. Such quitclaims are regarded as ineffective to bar the
workers from claiming the full measure of their legal rights.
2. FORMAL REQUIREMENTS OF COMPROMISE AGREEMENT
Compromise agreements involving labor standards cases must
be reduced to writing and signed in the presence of the
Regional Director or his duly authorized representative.
3. VALID COMPROMISE AND QUITCLAIM
The law looks with disfavor upon quitclaims and releases by
employees who are inveigled or pressured into signing them by
unscrupulous employers seeking to evade their legal
responsibilities. On the other hand, there are legitimate waivers
that represent a voluntary settlement of laborer's claims that
should be respected by the courts as the law between the
parties.
Not all waivers and quitclaims are invalid as against public
policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the parties
and may not later be disowned simply because of a change of
mind. It is only where there is clear proof that the waiver was
27 | P LATON
wangled from an unsuspecting or gullible person, or the terms necessary to carry out the purpose of the Code. (As amended
of settlement are unconscionable on its face, that the law will by Section 15, Republic Act No. 6715, March 21, 1989)
step in to annul the questionable transaction. But where it is ________
shown that the person making the waiver did so voluntarily,
with full understanding of what he was doing, and the Art. 231. Registry of unions and file of collective bargaining
consideration for the quitclaim is credible and reasonable, the agreements. The Bureau shall keep a registry of legitimate labor
transaction must be recognized as a valid and binding organizations. The Bureau shall also maintain a file of all
undertaking. collective bargaining agreements and other related agreements
and records of settlement of labor disputes and copies of
4. COMPROMISE SHOULD BE DULY AUTHORIZED orders and decisions of voluntary arbitrators. The file shall be
open and accessible to interested parties under conditions
Section 9. Authority to Bind Party. - Attorneys and other prescribed by the Secretary of Labor and Employment,
representatives of parties shall have authority to bind their clients in all provided that no specific information submitted in confidence
matters of procedure; but they cannot, without a special power of shall be disclosed unless authorized by the Secretary, or when it
attorney or express consent, enter into a compromise agreement with
is at issue in any judicial litigation, or when public interest or
the opposing party in full or partial discharge of a client's claim.
national security so requires.
The authority to compromise cannot lightly be presumed and
Within thirty (30) days from the execution of a Collective
should be duly established by evidence.
Bargaining Agreement, the parties shall submit copies of the
same directly to the Bureau or the Regional Offices of the
5. RULINGS ON COMPROMISE SETTLEMENTS SUMMARIZED
Department of Labor and Employment for registration,
accompanied with verified proofs of its posting in two
6. WHEN TO EFFECT COMPROMISE: FINAL DECISION,
conspicuous places in the place of work and ratification by the
NEGOTIABLE?
majority of all the workers in the bargaining unit. The Bureau or
Regional Offices shall act upon the application for registration
A compromise agreement may be effected at any stage of the
of such Collective Bargaining Agreement within five (5) calendar
proceedings and even when there is already a final and
days from receipt thereof. The Regional Offices shall furnish the
executor judgment.
Bureau with a copy of the Collective Bargaining Agreement
within five (5) days from its submission.
7. OPTIONS WHEN COMPROMISE AGREEMENTS IS VIOLATED
The Bureau or Regional Office shall assess the employer for
Under Article 2041 of the Civil Code, should a party fail or
every Collective Bargaining Agreement a registration fee of not
refuse to comply with the terms of a compromise or amicable
less than one thousand pesos (P1,000.00) or in any other
settlement, the other party could either: (1) enforce the
amount as may be deemed appropriate and necessary by the
compromise by a writ of execution, or (2) regard it as rescinded
Secretary of Labor and Employment for the effective and
and so insist upon his original demand.
efficient administration of the Voluntary Arbitration Program.
________
Any amount collected under this provision shall accrue to the
Special Voluntary Arbitration Fund.
[Art. 228. Indorsement of cases to Labor Arbiters.
a. Except as provided in paragraph (b) of this Article, the Labor
The Bureau shall also maintain a file and shall undertake or
Arbiter shall entertain only cases endorsed to him for
assist in the publication of all final decisions, orders and awards
compulsory arbitration by the Bureau or by the Regional
of the Secretary of Labor and Employment, Regional Directors
Director with a written notice of such indorsement or non-
and the Commission. (As amended by Section 15, Republic Act
indorsement. The indorsement or non-indorsement of the
No. 6715, March 21, 1989)
Regional Director may be appealed to the Bureau within ten
________
(10) working days from receipt of the notice.
REGISTRY OF UNIONS AND CBAs
b. The parties may, at any time, by mutual agreement,
withdraw a case from the Conciliation Section and jointly
The Bureau shall keep a registry of legitimate labor
submit it to a Labor Arbiter, except deadlocks in collective
organizations.
bargaining.](Repealed by Section 16, Batas Pambansa Bilang
130, August 21, 1981)
The Bureau shall also maintain a file of all Collective Bargaining
________
Agreements (CBAs) and other related agreements.
________
Art. 229. Issuance of subpoenas. The Bureau shall have the
power to require the appearance of any person or the
Art. 232. Prohibition on certification election. The Bureau shall
production of any paper, document or matter relevant to a
not entertain any petition for certification election or any other
labor dispute under its jurisdiction, either at the request of any
action which may disturb the administration of duly registered
interested party or at its own initiative.
existing collective bargaining agreements affecting the parties
________
except under Articles 253, 253-A and 256 of this Code. (As
amended by Section 15, Republic Act No. 6715, March 21,
Art. 230. Appointment of bureau personnel. The Secretary of
1989)
Labor and Employment may appoint, in addition to the present
________
personnel of the Bureau and the Industrial Relations Divisions,
such number of examiners and other assistants as may be
THE CONTRACT-BAR RULE

28 | P LATON

Article 232 speaks of the contract-bar rule which means that
while a valid and registered CBA is subsisting, the Bureau is not
allowed to hold an election contesting the majority status of
the incumbent union. The existence of the CBA does not allow,
that is, it bars, the holding of the inter-union electoral contest.
The election is legally allowed, says Art. 256, only during the
“freedom period” which refers to the last 60 days of the fifth
year of a CBA.
The objective of the rule, obviously, is to minimize union
“politicking” until the proper time comes.
________
Art. 233. Privileged communication. Information and
statements made at conciliation proceedings shall be treated as
privileged communication and shall not be used as evidence in
the Commission. Conciliators and similar officials shall not
testify in any court or body regarding any matters taken up at
conciliation proceedings conducted by them.
________
Title IV
LABOR ORGANIZATIONS
Chapter I
REGISTRATION AND CANCELLATION
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 (P50.00) 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. (As amended by Republic Act
No. 9481, May 25, 2007)
________
Art. 234-A. Chartering and Creation of a Local Chapter. - A duly
registered federation or national union may directly create a
local chapter by issuing a charter certificate indicating the
establishment of the local chapter. The chapter shall acquire
legal personality only for purposes of filing a petition for
certification election from the date it was issued a charter
certificate.
The chapter shall be entitled to all other rights and privileges of
a legitimate labor organization only upon the submission of the
following documents in addition to its charter certificate:
(a) The names of the chapter's officers, their addresses, and the
principal office of the chapter; and
(b) The chapter's constitution and by-laws: Provided, That
where the chapter's constitution and by-laws are the same as
that of the federation or the national union, this fact shall be
indicated accordingly.
The additional supporting requirements shall be certified under
oath by the secretary or treasurer of the chapter and attested
by its president.
________
Art. 235. Action on application. The Bureau shall act on all
applications for registration within thirty (30) days from filing.
All requisite documents and papers shall be certified under
oath by the secretary or the treasurer of the organization, as
the case may be, and attested to by its president.
________
Art. 236. Denial of registration; appeal. The decision of the
Labor Relations Division in the regional office denying
registration may be appealed by the applicant union to the
Bureau within ten (10) days from receipt of notice thereof.
________
Art. 237. Additional requirements for federations or national
unions. Subject to Article 238, if the applicant for registration is
a federation or a national union, it shall, in addition to the
requirements of the preceding Articles, submit the following:
a. Proof of the affiliation of at least ten (10) locals or chapters,
each of which must be a duly recognized collective bargaining
agent in the establishment or industry in which it operates,
supporting the registration of such applicant federation or
national union; and
b. The names and addresses of the companies where the locals
or chapters operate and the list of all the members in each
company involved.
________
[Art. 238. Conditions for registration of federations or national
unions. No federation or national union shall be registered to
engage in any organization activity in more than one industry in
any area or region, and no federation or national union shall be
registered to engage in any organizational activity in more than
one industry all over the country.
The federation or national union which meets the requirements
and conditions herein prescribed may organize and affiliate
locals and chapters without registering such locals or chapters
with the Bureau.
Locals or chapters shall have the same rights and privileges as if
they were registered in the Bureau, provided that such
federation or national union organizes such locals or chapters
within its assigned organizational field of activity as may be
prescribed by the Secretary of Labor.
29 | P LATON
The Bureau shall see to it that federations and national unions
shall only organize locals and chapters within a specific industry
or union.] (Repealed by Executive Order No. 111, December 24,
1986)
________
1. LABOR ORGANIZATION: TWO BROAD PURPOSES
A “labor organization” is not always a union; it may be an
“association of employees.” And, the purpose is not only or
necessarily “collective bargaining” but also dealing with
employers concerning terms and conditions of employment.
"Labor Organization" refers to any union or association of
employees in the private sector which exists in whole or in part
for the purpose of collective bargaining, mutual aid, interest,
cooperation, protection, or other lawful purposes.
"Legitimate Labor Organization" refers to any labor
organization in the private sector registered or reported with
the Department in accordance with Rules III and IV of these
Rules.
"Union" refers to any labor organization in the private sector
organized for collective bargaining and for other legitimate
purposes.
We should note that not every union is “legitimate;” only those
properly registered are considered LLO. But non-registration
does not mean it is “illegitimate;” it simply is unregistered and
has no legal personality. It exists legally but does not possess
the rights of an LLO.
"Exclusive Bargaining Representative" refers to a legitimate
labor union duly recognized or certified as the sole and
exclusive bargaining representative or agent of all the
employees in a bargaining unit.
"Workers' Association" refers to an association of workers
organized for the mutual aid and protection of its members or
for any legitimate purpose other than collective bargaining.
"Legitimate Workers' Association" refers to an association of
workers organized for mutual aid and protection of its
members or for any legitimate purpose other than collective
bargaining registered with the Department in accordance with
Rule III, Sections 2-C and 2-D of these Rules.
1.1 Distinction Between “Collective Bargaining” and “Dealing
with Employer”
To bargain collectively is a right that may be acquired by a labor
organization after registering itself with the Department of
Labor and Employment and after being recognized or certified
by DOLE as the exclusive bargaining representative (EBR) of the
employees.
Dealing with employer, on the other hand, is a generic
description of interaction between employer and employees
concerning grievances, wages, work hours and other terms and
conditions of employment, even if the employee’s group is not
registered with the Department of Labor and Employment.
2. CLASSIFICATION OF LABOR ORGANIZATIONS
"National Union/Federation" means any labor organization
with at least ten (10) locals or chapters each of which must be a
duly recognized collective bargaining agent.
“Industry Union” means any group of legitimate labor
organizations operating within an identified industry, organized
for collective bargaining or for dealing with employers
concerning terms and conditions of employment within an
industry, or for participating in the formulation of social and
employment policies, standards and programs in such industry,
which is duly registered with the Department. D.O. No. 40-03,
however, does not carry this term and this definition, although
under Rule III, Section 2-B, “labor organizations operating
within an identified industry may also apply for registration as a
federation or national union within the specified industry by
submitting to the Bureau the same set of documents (as
required of federations and national unions.)”
“Trade Union Center” means any group of registered national
unions or federations organized for the mutual aid and
protection of its members, for assisting such members in
collective bargaining, or for participating in the formulation of
social and employment policies, standards and programs, which
is duly registered with the Department.
An “alliance” is an aggregation of unions existing in one line of
industry, or in a conglomerate, a group of franchises, a
geographical area, or an industrial center.
A “company-union” is a labor organization which, in whole or in
part, is employer-controlled or employer-denominated. Article
248(d) prohibits being a company union.
2.1 Unions at Enterprise Level
A labor union at the enterprise level may be created either by
(a) independent registration or (b) chartering. Independent
registration is obtained by the union organizers in an enterprise
through their own action instead of through issuance of a
charter by a federation or national union. An independent
union has a legal personality of its own not derived from that of
a federation.
"Independent Union" refers to a labor organization operating at the
enterprise level that acquired legal personality through independent
registration under Article 234 of the Labor Code and Rule III, Section 2-
A of these Rules.
Chartering, on the other hand, takes place when a duly
registered federation or national union issue a charter to a
union in an enterprise and registers the creation of the chapter
with the Regional Office where the applicants operates. The
union recipient of the charter s called a chapter or local or
chartered local. Its legal personality is derived from the
federation/ national union but it may subsequently register
itself independently.
3. REGISTRATION RATIONALE
A labor organization may be registered or not. If registered with
DOLE, it is considered “legitimate labor organization” (LLO). But
the reverse us not true, that is, a labor organization is not
“illegitimate” just because it is unregistered. It is still lawful
organization and can deal with the employer, but it has no legal
personality to demand collective bargaining with the employer.
30 | P LATON
It cannot petition for a certification election and cannot hold a
legal strike.
Registration is merely a condition sine qua non for the
acquisition of legal personality by labor organizations,
associations or unions and the possession of the rights and
privileges granted by law to legitimate labor organizations.
Such requirement is a valid exercise of the police power,
because the activities in which labor organizations, associations
and union of workers are engaged affect public interest, which
should be protected.
3.1 Effect of Registration Under the Corporation Law
A labor organization may be organized under the Corporation
Law as a non-stock corporation and issued a certificate of
incorporation by the Securities and Exchange Commission. But
such incorporation has only the effect of giving to it juridical
personality before regular courts of justice. Such incorporation
does not grant the rights and privileges of a legitimate labor
organization.
4. WHERE TO REGISTER
Applications for registration of independent labor unions,
chartered locals, and worker’s association shall be filed with the
Regional Office where the applicant principally operates.
If the Regional Office denies the application, the denial is
appealable to the Bureau and from there to the Court of
Appeals (not to the Secretary of Labor) if proper grounds exist.
5. REGISTRATION REQUIREMENTS
5.1 Independent Labor Union
Section 2. Requirements for application. - A. The application for
registration of an independent labor union shall be accompanied by the
following documents:
(a) the name of the applicant labor union, its principal address, the
name of its officers and their respective addresses, approximate
number of employees in the bargaining unit where it seeks to operate,
with a statement that it is not reported as a chartered local of any
federation or national union;
(b) the minutes of the organizational meeting(s) and the list of
employees who participated in the said meeting(s);
(c) the name of all its members comprising at least 20% of the
employees in the bargaining unit;
(d) the annual financial reports if the applicant has been in existence for
one or more years, unless it has not collected any amount from the
members, in which case a statement to this effect shall be included in
the application;
(e) the applicant's constitution and by-laws, minutes of its adoption or
ratification, and the list of the members who participated in it. The list
of ratifying members shall be dispensed with where the constitution
and by-laws was ratified or adopted during the organizational meeting.
In such a case, the factual circumstances of the ratification shall be
recorded in the minutes of the organizational meeting(s).
5.2 Federation or National Union
B. The application for registration of federations and national unions
shall be accompanied by the following documents:
(a) a statement indicating the name of the applicant labor union, its
principal address, the name of its officers and their respective
addresses;
(b) the minutes of the organizational meeting(s) and the list of
employees who participated in the said meeting(s);
(c) the annual financial reports if the applicant union has been in
existence for one or more years, unless it has not collected any amount
from the members, in which case a statement to this effect shall be
included in the application;
(d) the applicant union's constitution and by-laws, minutes of its
adoption or ratification, and the list of the members who participated
in it. The list of ratifying members shall be dispensed with where the
constitution and by-laws was ratified or adopted during the
organizational meeting(s). In such a case, the factual circumstances of
the ratification shall be recorded in the minutes of the organizational
meeting(s);
(e) the resolution of affiliation of at least ten (10) legitimate labor
organizations, whether independent unions or chartered locals, each of
which must be a duly certified or recognized bargaining agent in the
establishment where it seeks to operate; and
(f) the name and addresses of the companies where the affiliates
operate and the list of all the members in each company involved.
Labor organizations operating within an identified industry may also
apply for registration as a federation or national union within the
specified industry by submitting to the Bureau the same set of
documents.
5.3 Worker’s Association
C. The application for registration of a workers' association shall be
accompanied by the following documents:
(a) the name of the applicant association, its principal address, the
name of its officers and their respective addresses;
(b) the minutes of the organizational meeting(s) and the list of
members who participated therein;
(c) the financial reports of the applicant association if it has been in
existence for one or more years, unless it has not collected any amount
from the members, in which case a statement to this effect shall be
included in the application;
(d) the applicant's constitution and by-laws to which must be attached
the names of ratifying members, the minutes of adoption or ratification
of the constitution and by-laws and the date when ratification was
made, unless ratification was done in the organizational meeting(s), in
which case such fact shall be reflected in the minutes of the
organizational meeting(s).
5.4 Chartered Local
5.4a When Does a Chartered Local Become an LLO
The acquisition of legal personality cannot be the date of filing
of the documents. Section 3 (Department Order No. 9, 1997)
was defeating the very purpose of registration of unions which
was to block off fly-by-night unions.
5.4b When Does a Chartered Local Acquire Legal Personality
under D.O. No. 40, Series of 2003
31 | P LATON
Section 8. Effect of registration. - The labor union or workers'
association shall be deemed registered and vested with legal
personality on the date of issuance of its certificate of registration or
certificate of creation of chartered local
The determinative date now is not the date the required
documents were filed but the date the certificate was issued.
And the date of issuance is likely to be the date the documents
were filed because D.O. No. 40-D-05, supplementing D.O. No.
40-03, requires the Regional Office or the Bureau to either
approve or deny the application for registration “within one (1)
day from receipt thereof.”
5.4c Recognition by BLR not a Ministerial Duty
5.4d Chartered Local Has to be Registered; Requirements
5.4e Registration Requirements for a Chartered Local
E. A duly-registered federation or national union may directly create a
chartered local by submitting to the Regional Office two (2) copies of
the following:
(a) A charter certificate issued by the federation or national union
indicating the creation or establishment of the local/chapter;
(b) The names of the local/chapter’s officers, their addresses, and the
principal office of the local/chapter; and
(c) The local/chapter’s constitution and by-laws, provided that where
the local/chapter’s constitution and by-laws is the same as that of the
federation or national union, this fact shall be indicated accordingly.
All of the foregoing supporting requirements shall be certified under
oath by the Secretary or the Treasurer of the local/chapter and attested
by its President. (As amended by DO 40-B-03.)
5.4f Requirements Relaxed
The creation of a local does not need subscription by a
minimum number of members. The 20 percent initial
membership mentioned in Article 234(c) is required of an
independent union but not of a chartered local.
5.5 Union’s Legitimacy not Subject to Collateral Attack
Such legal personality may be questioned only through an independent
petition for cancellation of union registration in accordance with Rule
XIV of these Rules, and not by way of collateral attack in petition for
certification election proceedings under Rule VIII.
6. COLLECTIVE BARGAINING UNIT (CBU)
"Bargaining Unit" refers to a group of employees sharing
mutual interests within a given employer unit, comprised of all
or less than all of the entire body of employees in the employer
unit or any specific occupational or geographical grouping
within such employer unit.
While officers lead and represent a union, a union represents a
CBU. The representative is the union; the group represented is
the CBU. The representative union, once determined, will
represent even the members of other unions as long as they
are part of the CBU. This is why the representative union (also
called bargaining agent or majority union) is called “exclusive
bargaining representative” (EBR).
7. CONSTITUION, BY-LAWS, AND REGULATIONS
Like other voluntary associations, labor unions have the right to
adopt constitutions, rules, and by-laws within the scope of the
lawful purposes of the union and bind their members thereby,
provided they are reasonable, uniform, and not discriminatory,
and provided they are not contrary to public policy or the law
of the land.
The articles of agreement of a labor union, whether called a
constitution, charter, by-laws, or any other name, constitutes a
contract between the members which the courts will enforce, if
not immoral or contrary to public policy or the law of the land.
A union’s constitution and by-laws govern the relationship
between and among its members. As in the interpretation of
contracts, if the terms are clear and leave no doubt as to the
intentions of the parties, the literal meaning of the stipulation
shall control.
7.1 Limitation to By-laws
Under Art. 234(e) it is implied that the members are the ones to
adopt or ratify the union’s constitution and by-laws. It being a
governing law of the union, the CBL should be democratically
ratified.
7.2 Amendments
A union’s constitution and by-laws may be amended, modified
and extended by the duly constituted union authorities under
the laws of the state, In the absence of other requirements, and
subject to vested rights, a union constitution may be made,
changed, unmade, or superseded by a majority vote of the
members or its constituent body.
Under Art. 241(d), major policy questions are to be deliberated
upon and decided by secret ballot by the members.
8. PROVISIONS COMMON TO THE REGISTRATION OF LABOR
ORGANIZATIONS AND WORKER’S ASSOCIATION
8.1 Attestation, Fee, Copies of Documents
Section 1. Attestation requirements. - The application for registration of
labor unions and workers' associations, notice for change of name,
merger, consolidation and affiliation including all the accompanying
documents, shall be certified under oath by its Secretary or Treasurer,
as the case may be, and attested to by its President.
Section 3. Accompanying documents. - One (1) original copy and two
(2) duplicate copies of all documents accompanying the application or
notice shall be submitted to the Regional Office or the Bureau.
8.2 Action on the Application/Notices
Section 4. Action on the application/notice. - The Regional Office or the
Bureau, as the case may be, shall act on all applications for registration
or notice of change of name, affiliation, merger and consolidation
within ten (10) days from receipt either by: (a) approving the
application and issuing the certificate of registration/acknowledging the
notice/report; or (b) denying the application/notice for failure of the
applicant to comply with the requirements for registration/notice.
8.3 Denial of Application/Return of Notice
Section 5. Denial of Application/Return of Notice. - Where the
documents supporting the application for registration/notice of change
32 | P LATON
of name, affiliation, merger and consolidation are incomplete or do not
contain the required certification and attestation, the Regional Office or
the Bureau shall, within five (5) days from receipt of the
application/notice, notify the applicant/labor organization concerned in
writing of the necessary requirements and complete the same within
thirty (30) days from receipt of notice. Where the applicant/labor
organization concerned fails to complete the requirements within the
time prescribed, the application for registration shall be denied, or the
notice of change of name, affiliation, merger and consolidation
returned, without prejudice to filing a new application or notice.
Section 6. Form of Denial of Application/Return of Notice; Appeal. - The
notice of the Regional Office or the Bureau denying the application for
registration/returning the notice of change of name, affiliation, merger
or consolidation shall be in writing stating in clear terms the reasons for
the denial or return.
8.4 Appeal
Section 6. Form of Denial of Application/Return of Notice; Appeal. - The
denial may be appealed to the Bureau if denial is made by the Regional
Office or to the Secretary if denial is made by the Bureau, within ten
(10) days from receipt of such notice, on the ground of grave abuse of
discretion or violation of these Rules.
Section 7. Procedure on appeal. - The memorandum of appeal shall be
filed with the Regional Office or the Bureau that issued the
denial/return of notice. The memorandum of appeal together with the
complete records of the application for registration/notice of change of
name, affiliation, merger or consolidation, shall be transmitted by the
Regional Office to the Bureau or by the Bureau to the Office of the
Secretary, within twenty-four (24) hours from receipt of the
memorandum of appeal.
The Bureau or the Office of the Secretary shall decide the appeal within
twenty (20) days from receipt of the records of the case.
9. AFFILIATION
An affiliate is an independently registered union that enters
into an agreement of affiliation with a federation or a national
union. It also refers to a chartered local which applies for and is
granted an independent registration but does not disaffiliate
from its mother federation or national union.
A union, either an independent or a local, affiliates with a
federation or national union for a number of reasons. The most
common ones are to secure support or assistance particularly
during the formative stage of unionization; or to utilize
expertise in preparing and pursuing bargaining proposals; or to
marshal mind and manpower in the course of a group action
such as strike.
The relationship between a local or chapter and the labor
federation or national union is generally understood to be that
of agency, where the local is the principal and the federation
the agent.
9.1 Report of Affiliation; Requirements
Section 6. Report of Affiliation with federations or national unions;
Where to file. - The report of affiliation of an independently registered
labor union with a federation or national union shall be filed with the
Regional Office that issued its certificate of registration.
Section 7. Requirements of affiliation. - The report of affiliation of
independently registered labor unions with a federation or national
union shall be accompanied by the following documents:
(a) resolution of the labor union's board of directors approving the
affiliation;
(b) minutes of the general membership meeting approving the
affiliation;
(c) the total number of members comprising the labor union and the
names of members who approved the affiliation;
(d) the certificate of affiliation issued by the federation in favor of the
independently registered labor union; and
(e) written notice to the employer concerned if the affiliating union is
the incumbent bargaining agent.
10. DISAFFILIATION
The sole essence of affiliation is to increase, by collective
action, the common bargaining power of local unions for the
effective enhancement and protection of their interests.
Admittedly, there are times when without succor and support
local unions may find it hard, unaided by other support groups,
to secure justice for themselves.
Yet the local unions remain the basic units of association, free
to serve their own interests subject to the restraints imposed
by the constitution and by-laws of the national federation, and
free also to renounce the affiliation upon the terms laid down
in the agreement which brought such affiliation into existence.
To disaffiliate is a right, but to observe the terms of affiliation is
an obligation
10.1 Local Union is the Principal, Federation the Agent
Disaffiliation of employees from their mother union and their
formation into a new union do not terminate their status as
employees of the corporation, as the employees and members
of the local union did not form a new union but merely
exercised their right to register their local union.
10.2 When to Disaffiliate
While it is true that a local union is free to serve the interest of
all its members and enjoys the freedom to disaffiliate, such
right to disaffiliate may be exercised and is thus considered a
protected labor activity only when warranted by circumstances.
Generally, a labor union may disaffiliate from the mother union
to form a local or independent union only during the 60-day
freedom period immediately preceding the expiration of the
CBA.
The “freedom period” refers to the last 60-days of the fifth and
last year of a CBA.
But even before the onset of the freedom period (and despite
the closed-shop provision in the CBA between the mother
union and management) disaffiliation may still be carried out,
but such disaffiliation must be effected by a majority of the
members in the bargaining unit.
This ruling is true ONLY if the contract of affiliation does not
specify the period for possible disaffiliation.
10.3 Disaffiliation must be by Majority Decision
33 | P LATON
Article 241(d) applies to disaffiliation, thus, it has to be decided
by the entire membership through secret balloting.
10.4 Disaffiliation: Effect on Legal Status
When a union which is not independently registered
disaffiliates from the federation, it is not entitled to the rights
and privileges granted to a legitimate labor organization. It
cannot file a petition for certification election.
10.5 Disaffiliation: Effect on Union Dues
The obligation of an employee to pay union dues is
coterminous with his affiliation or membership.
A contract between an employer and the parent organization
as bargaining agent for the employees is terminated by the
disaffiliation of the local of which the employees are members.
10.6 Disaffiliation: Effect on Existing CBA; the “Substitutionary”
Doctrine
The “substitutionary doctrine” provides that the employees
cannot revoke the validly executed collective bargaining
contract with their employer by the simple expedient of
changing their bargaining agent. The new agent must respect
the contract.
11. REVOCATION OF CHARTER
A federation, national union or workers’ association may
revoke the charter issued to a local/chapter or branch by
serving on the latter a verified notice of revocation, copy
furnished the Bureau, on the ground of disloyalty or such other
grounds as may be specified in the constitution and bylaws of
the federation, national union or workers’ association. The
revocation shall divest the local/chapter of its legal personality
upon receipt of the notice by the Bureau, unless in the
meantime the local/chapter has acquired independent
registration in accordance with these Rules.
11.1 Effect of Cancellation of Registration of Federation or
National Union on Locals/Chapter
The cancellation of registration of a federation or national
union shall operate to divest its local/chapter of their status as
legitimate labor organizations, unless the locals/chapters are
covered by a duly registered collective bargaining agreement.
12 MERGER AND CONSOLIDATION
Section 10. Effect of merger or consolidation. - Where there is a merger
of labor organizations, the legal existence of the absorbed labor
organization(s) ceases, while the legal existence of the absorbing labor
organization subsists. All the rights, interests and obligations of the
absorbed labor organizations are transferred to the absorbing
organization.
Where there is consolidation, the legal existence of the consolidating
labor organizations shall cease and a new labor organization is created.
The newly created labor organization shall acquire all the rights,
interests and obligations of the consolidating labor organizations.
Consolidation usually occurs between two unions that are
approximately the same size, whereas merger often involves a
larger union merging with a smaller union.
Why do unions merge? They merge for reasons similar to those
behind corporate mergers.
First, a small union may merge with a larger union in order to
gain access to greater resources and expertise.
Second, unions that have traditionally competed with each
other for members may merge in order to eliminate inter-
organizational conflicts.
Third, unions whose members’ skills have been outmoded by
technological and economic changes may merge with a
stronger union in order to maintain job security and
institutional survival.
12.1 Notice of Merger/Consolidation of Labor Organizations’;
Where to File
Section 8. Notice of Merger/Consolidation of labor organizations;
Where to file. - Notice of merger or consolidation of independent labor
unions, chartered locals and workers' associations shall be filed with
and recorded by the Regional Office that issued the certificate of
registration/certificate of creation of chartered local of either the
merging or consolidating labor organization. Notice of merger or
consolidation of federations or national unions shall be filed with and
recorded by the Bureau.
12.2 Requirements of Notice of Merger/Consolidation
The notice of merger of labor organizations shall be accompanied by
the following documents:
(a) the minutes of merger convention or general membership
meeting(s) of all the merging labor organizations, with the list of their
respective members who approved the same; and
(b) the amended constitution and by-laws and minutes of its
ratification, unless ratification transpired in the merger convention,
which fact shall be indicated accordingly.
12.3 Certificate of Registration
Section 10. Certificate of Registration. - The certificate of registration
issued to merged labor organizations shall bear the registration number
of one of the merging labor organizations as agreed upon by the parties
to the merger.
The certificate of registration shall indicate the following: (a) the new
name of the merged labor organization; (b) the fact that it is a merger
of two or more labor organizations; (c) the name of the labor
organizations that were merged; (d) its office or business address; and
(e) the date when each of the merging labor organization.
13. CHANGE OF NAME
Section 3. Notice of change of name of labor organizations; Where to
file. - The notice for change of name of a registered labor organization
shall be filed with the Bureau or the Regional Office where the
concerned labor organization's certificate of registration or certificate
of creation of a chartered local was issued.
Section 4. Requirements for notice of change of name. - The notice for
change of name of a labor organization shall be accompanied by the
following documents:
(a) proof of approval or ratification of change of name; and
(b) the amended constitution and by-laws.
34 | P LATON
13.1 Effect of Change of Name
The change of name of a labor organization shall not affect its
legal personality. All rights and obligations of a labor
organization under its old name shall continue to be exercised
by the labor organization under its new name.
________
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. (As
amended by Republic Act No. 9481, May 25, 2007)
________
Art. 238-A. Effect of a Petition for Cancellation of Registration. -
A petition for cancellation of union registration shall not
suspend the proceedings for certification election nor shall it
prevent the filing of a petition for certification election.
In case of cancellation, nothing herein shall restrict the right of
the union to seek just and equitable remedies in the
appropriate courts. (As amended by Republic Act No. 9481,
May 25, 2007)
________
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. (As amended by
Republic Act No. 9481, May 25, 2007)
________
Art. 239-A. Voluntary Cancellation of Registration. - The
registration of a legitimate labor organization may be cancelled
by the organization itself. Provided, That at least two-thirds of
its general membership votes, in a meeting duly called for that
purpose to dissolve the organization: Provided, further, That an
application to cancel registration is thereafter submitted by the
board of the organization, attested to by the president thereof.
(As amended by Republic Act No. 9481, May 25, 2007)
________
1. CANCELLATION OF REGISTRATION; GROUNDS
While registration is the act that converts a labor organization
to a legitimate labor organization, cancellation is the
government act that [divests] it of that status. It thereby
reverts to its character prior to the registration. Although it
does not cease to exist or become an unlawful organization, its
juridical personality as well as its statutory rights and privileges
[are] suspended. It loses entitlement to the rights enumerated
in Article 242 of the Labor Code. It cannot demand recognition
by or bargaining with the employer, cannot file a petition for
certification election, and cannot strike.
1.1 “Cabo”
"Cabo" refers to a person or group or persons or to a labor
group which, in the guise of a labor organization, supplies
workers to an employer, with or without any monetary or other
consideration whether in the capacity of an agent of the
employer or as an ostensible independent contractor.
1.2 Administrative Cancellation; the “reportorial requirements”
Section 1. Reporting requirements. - It shall be the duty of every
legitimate labor unions and workers associations to submit to the
Regional Office or the Bureau which issued its certificate of registration
or certificate of creation of chartered local, as the case may be, two (2)
copies of each of the following documents:
(a) any amendment to its constitution and by-laws and the minutes of
adoption or ratification of such amendments, within thirty (30) days
from its adoption or ratification;
(b) annual financial reports within thirty (30) days after the close of
each fiscal year or calendar year;
(c) updated list of newly-elected officers, together with the appointive
officers or agents who are entrusted with the handling of funds, within
thirty (30) days after each regular or special election of officers, or from
the occurrence of any change in the officers of agents of the labor
organization or workers association;
(d) updated list of individual members of chartered locals, independent
unions and workers' associations within thirty (30) days after the close
of each fiscal year; and
(e) updated list of its chartered locals and affiliates or member
organizations, collective bargaining agreements executed and their
effectivity period, in the case of federations or national unions, within
thirty (30) days after the close of each fiscal year, as well as the
updated list of their authorized representatives, agents or signatories in
the different regions of the country.
As understood in these Rules, the fiscal year of a labor organization
shall coincide with the calendar year, unless a different period is
prescribed in the constitution and by-laws.
Failure of the labor organization to submit the reports
mentioned above for five (5) consecutive years authorizes the
Bureau to institute cancellation proceedings upon its own
initiative or upon complaint by any party-in-interest.
2. WHO FILES PETITION FOR CANCELLATION
Section 2. Who may file. - Any party-in-interest may commence a
petition for cancellation of registration, except in actions involving
violations of Article 241, which can only be commenced by members of
the labor organization concerned.
Section 3. Grounds for cancellation. - The following shall constitute
grounds for cancellation of registration of labor organizations:
(g) commission of any of the acts enumerated under Article 241 of the
Labor Code; provided that no petition for cancellation based on this
ground may be granted unless supported by at least thirty (30%)
percent of all the members of the respondent labor organization;
The petition shall be under oath and shall state clearly and
concisely the facts and grounds relied upon, accompanied by
proof of service to the respondent. But such petition cannot be
entertained in the petition for certification election filed by the
union.
35 | P LATON

3. WHERE TO FILE PETITION
Section 1. Where to file. - Subject to the requirements of notice and
due process, the registration of any legitimate independent labor
union, chartered local and workers' association may be cancelled by the
Regional Director, or in the case of federations, national or industry
unions and trade union centers, by the Bureau Director, upon the filing
of an independent complaint or petition for cancellation.
Cancellation orders issued by the Regional Director are
appealable to the BLR. The latter’s decision is final and
executor, hence, not appealable to the DOLE Secretary but it
may be elevated to the Court of Appeals by certiorari.
BLR decisions on cancellation cases that originated at the BLR
itself may be appealed to the Secretary and, again, by certiorari
to the CA.
4. PROCEDURE
Section 2. Procedure. - The Labor Relations Division of the Regional
Office shall make a report of the labor organization's non-compliance
and submit the same to the Bureau for verification with its records. The
Bureau shall send by registered mail with return card to the labor
organization concerned, a notice for compliance indicating the
documents it failed to submit and the corresponding period in which
they were required, with notice to comply with the said reportorial
requirements and to submit proof thereof to the Bureau within ten (10)
days from receipt thereof.
Where no response is received by the Bureau within thirty (30) days
from the release of the first notice, another notice for compliance shall
be made by the Bureau, with warning that failure on its part to comply
with the reportorial requirements within the time specified shall cause
the continuation of the proceedings for the administrative cancellation
of its registration.
Section 3. Publication of notice of cancellation of registration . - Where
no response is again received by the Bureau within thirty (30) days from
release of the second notice, the Bureau shall cause the publication of
the notice of cancellation of registration of the labor organization in
two (2) newspapers of general circulation. The Bureau may conduct an
investigation within the employer's premises and at the labor
organization's last known address to verify the latter's existence.
________
Art. 240. Equity of the incumbent. All existing federations and
national unions which meet the qualifications of a legitimate
labor organization and none of the grounds for cancellation
shall continue to maintain their existing affiliates regardless of
the nature of the industry and the location of the affiliates.
________
Chapter II
RIGHTS AND CONDITIONS OF MEMBERSHIP
Art. 241. Rights and conditions of membership in a labor
organization. The following are the rights and conditions of
membership in a labor organization:
a. No arbitrary or excessive initiation fees shall be required of
the members of a legitimate labor organization nor shall
arbitrary, excessive or oppressive fine and forfeiture be
imposed;
b. The members shall be entitled to full and detailed reports
from their officers and representatives of all financial
transactions as provided for in the constitution and by-laws of
the organization;
c. The members shall directly elect their officers, including
those of the national union or federation, to which they or their
union is affiliated, by secret ballot at intervals of five (5) years.
No qualification requirements for candidacy to any position
shall be imposed other than membership in good standing in
subject labor organization. The secretary or any other
responsible union officer shall furnish the Secretary of Labor
and Employment with a list of the newly-elected officers,
together with the appointive officers or agents who are
entrusted with the handling of funds, within thirty (30) calendar
days after the election of officers or from the occurrence of any
change in the list of officers of the labor organization; (As
amended by Section 16, Republic Act No. 6715, March 21,
1989)
d. The members shall determine by secret ballot, after due
deliberation, any question of major policy affecting the entire
membership of the organization, unless the nature of the
organization or force majeure renders such secret ballot
impractical, in which case, the board of directors of the
organization may make the decision in behalf of the general
membership;
e. No labor organization shall knowingly admit as members or
continue in membership any individual who belongs to a
subversive organization or who is engaged directly or indirectly
in any subversive activity;
f. No person who has been convicted of a crime involving moral
turpitude shall be eligible for election as a union officer or for
appointment to any position in the union;
g. No officer, agent or member of a labor organization shall
collect any fees, dues, or other contributions in its behalf or
make any disbursement of its money or funds unless he is duly
authorized pursuant to its constitution and by-laws;
h. Every payment of fees, dues or other contributions by a
member shall be evidenced by a receipt signed by the officer or
agent making the collection and entered into the record of the
organization to be kept and maintained for the purpose;
i. The funds of the organization shall not be applied for any
purpose or object other than those expressly provided by its
constitution and by-laws or those expressly authorized by
written resolution adopted by the majority of the members at a
general meeting duly called for the purpose;
j. Every income or revenue of the organization shall be
evidenced by a record showing its source, and every
expenditure of its funds shall be evidenced by a receipt from
the person to whom the payment is made, which shall state the
date, place and purpose of such payment. Such record or
receipt shall form part of the financial records of the
organization.
Any action involving the funds of the organization shall
prescribe after three (3) years from the date of submission of
the annual financial report to the Department of Labor and
Employment or from the date the same should have been
submitted as required by law, whichever comes earlier:
Provided, That this provision shall apply only to a legitimate
36 | P LATON
labor organization which has submitted the financial report
requirements under this Code: Provided, further, that failure of
any labor organization to comply with the periodic financial
reports required by law and such rules and regulations
promulgated thereunder six (6) months after the effectivity of
this Act shall automatically result in the cancellation of union
registration of such labor organization; (As amended by Section
16, Republic Act No. 6715, March 21, 1989)
k. The officers of any labor organization shall not be paid any
compensation other than the salaries and expenses due to their
positions as specifically provided for in its constitution and by-
laws, or in a written resolution duly authorized by a majority of
all the members at a general membership meeting duly called
for the purpose. The minutes of the meeting and the list of
participants and ballots cast shall be subject to inspection by
the Secretary of Labor or his duly authorized representatives.
Any irregularities in the approval of the resolutions shall be a
ground for impeachment or expulsion from the organization;
l. The treasurer of any labor organization and every officer
thereof who is responsible for the account of such organization
or for the collection, management, disbursement, custody or
control of the funds, moneys and other properties of the
organization, shall render to the organization and to its
members a true and correct account of all moneys received and
paid by him since he assumed office or since the last day on
which he rendered such account, and of all bonds, securities
and other properties of the organization entrusted to his
custody or under his control. The rendering of such account
shall be made:
1. At least once a year within thirty (30) days after the close of
its fiscal year;
2. At such other times as may be required by a resolution of the
majority of the members of the organization; and
3. Upon vacating his office.
The account shall be duly audited and verified by affidavit and a
copy thereof shall be furnished the Secretary of Labor.
m. The books of accounts and other records of the financial
activities of any labor organization shall be open to inspection
by any officer or member thereof during office hours;
n. No special assessment or other extraordinary fees may be
levied upon the members of a labor organization unless
authorized by a written resolution of a majority of all the
members in a general membership meeting duly called for the
purpose. The secretary of the organization shall record the
minutes of the meeting including the list of all members
present, the votes cast, the purpose of the special assessment
or fees and the recipient of such assessment or fees. The record
shall be attested to by the president.
o. Other than for mandatory activities under the Code, no
special assessments, attorney’s fees, negotiation fees or any
other extraordinary fees may be checked off from any amount
due to an employee without an individual written authorization
duly signed by the employee. The authorization should
specifically state the amount, purpose and beneficiary of the
deduction; and
p. It shall be the duty of any labor organization and its officers
to inform its members on the provisions of its constitution and
by-laws, collective bargaining agreement, the prevailing labor
relations system and all their rights and obligations under
existing labor laws.
For this purpose, registered labor organizations may assess
reasonable dues to finance labor relations seminars and other
labor education activities.
Any violation of the above rights and conditions of membership
shall be a ground for cancellation of union registration or
expulsion of officers from office, whichever is appropriate. At
least thirty percent (30%) of the members of a union or any
member or members specially concerned may report such
violation to the Bureau. The Bureau shall have the power to
hear and decide any reported violation to mete the appropriate
penalty.
Criminal and civil liabilities arising from violations of above
rights and conditions of membership shall continue to be under
the jurisdiction of ordinary courts.
________
1. DEMOCRATIZATION OF UNIONS
As unionism’s aim is to install industrial democracy, the unions
themselves must be democratic. This is a rationale behind
Article 241.
To democratize the unions, Article 241 requires that the union
officers be elected directly by the members through secret
ballot and that the major policy decisions, as a rule, be made by
the union members, again, by secret ballot. As in a republic
where sovereignty resides in the people, the members of the
union are the keepers and dispensers of authority. The
governing power is the members, not the officers.
2. NATURE OF RELATIONSHIP BETWEEN UNION AND ITS
MEMEBERS
The union has been evolved as an organization of collective
strength for the protection of labor against the unjust exactions
of capital, but equally important is the requirement of fair
dealing between the union and its members, which is fiduciary
in nature, and arises out of two factors: "one is the degree of
dependence of the individual employee on the union
organization; the other, a corollary of the first, is the
comprehensive power vested in the union with respect to the
individual." The union may be considered but the agent of its
members for the purpose of securing for them fair and just
wages and good working conditions and is subject to the
obligation of giving the members as its principals all
information relevant to union and labor matters entrusted to it.
2.1 Duty of Court to Protect Laborers from Unjust Exploitation
by Oppressive Employers and Union Leaders
Just as this Court has stricken down unjust exploitation of
laborers by oppressive employers, so will it strike down their
unfair treatment by their own unworthy leaders. The
Constitution enjoins the State to afford protection to labor. Fair
dealing is equally demanded of unions as well as of employers
in their dealings with employees.
37 | P LATON
The union constitution is a covenant between the union and its
members and among the members.
3. RIGHTS OF UNION MEMBERS
The rights and conditions of membership laid down in Art. 241
may be summarized as follows:
(1) Political right – the member’s right to vote and be voted for,
subject to lawful provisions on qualifications and
disqualifications.
(2) Deliberative and decision-making right – the member’s right
to participate in deliberations on major policy questions and
decide them by secret ballot.
(3) Rights over money matters – the member’s right against
excessive fees; the right against unauthorized collection of
contributions or unauthorized disbursements; the right to
require adequate records of income and expenses and the right
of access to financial records; the right to vote on officers’
compensation; the right to vote on proposed special
assessments and be deducted a special assessment only with
the member’s written authorization.
(4) Right to Information – the member’s right to be informed
about the organization’s constitution and by-laws and the
collective bargaining agreement and about labor laws.
Although not so denominated, Article 241 of the Labor Code
carries the character of a bill of rights of union members.
3.1 Eligibility for Membership
When, how, and under what conditions does an employee
become a union member? The answer depends on the union’s
constitution and by-laws inasmuch as Article 249 gives a labor
organization the right to prescribe its own rules for acquisition
or retention of membership. Nonetheless, under Art. 277 an
employee is already qualified for union membership starting on
his first day of service.
Qualifying for union membership does not necessarily mean
inclusion in the coverage of the CBA. The reverse is equally
true: membership in the CBU does not automatically mean
membership in the union.
To sum up:
Inclusion in the CBU depends on the determination of its
appropriateness under Art. 234 and Art. 255.
Inclusion or membership in a union depends on the union’s
constitution and by-laws, without prejudice to Art. 277(c).
Inclusion or coverage in the CBA depends on the stipulations in
the CBA itself.
4. ELECTION OF UNION OFFICERS
The officers of the union are elected by the members in secret
ballot voting. The election takes place at intervals of five years
which is the term of office of the union officers including those
of a national union, federation, or trade union center.
The Implementing Rules (Rule XII, Section 1) require the
incumbent president to create an election committee within 60
days before expiration of the incumbent officers’ term.
If the officers with expired term do not call an election, the
remedy, according to Rule XII, is for at least 30% of the
members to file a petition with the DOLE Regional Office.
The member’s frustration over the performance of the union
officers, as well as their fear of a “fraudulent” election to be
held under the latter’s supervision, does not justify disregard of
the union’s constitution and by-laws.
4.1 Eligibility of Voters
Only members of the union can take part in the election of
union officers.
Ember in good standing is any person who has fulfilled the
requirements for membership in the union and who has neither
voluntarily withdrawn from membership nor been expelled or
suspended from membership after appropriate proceedings
consistent with the lawful provisions of the union’s constitution
and by-laws.
A labor organization may prescribe reasonable rules and
regulations with respect to voting eligibility.
A labor organization may condition the exercise of the right to
vote on the payment of dues, since paying dues is a basic
obligation of membership. However, this rule is subject to two
qualifications in that (a) any rule denying dues-delinquent
members the right to vote must be applied uniformly; and (b)
members must be afforded a reasonable opportunity to pay
dues, including a grace period during which dues may be paid
without any loss of rights.
Submission of the employees names with the BLR as qualified
members of the union is not a condition sine qua non to enable
said members to vote in the election of union's officers.
4.2 Union Officers Must Be an Employee
(f) No person who is not an employee or worker of the company or
establishment where an independently registered union, affiliate, local
or chapter of a labor federation or national union operates shall
henceforth be elected or appointed as an officer of such union, affiliate,
local or chapter.
In short, one should be employed in the company to qualify as
officer of a union in that company.
4.3 Disqualification of Union Officers
"Moral turpitude" has been defines as an act of baseness,
vileness, or depravity in the private and social duties which a
man owes his fellow men, or to society in general, contrary to
the accepted and customary rule of right and duty between
man and man or conduct contrary to justice, honesty, modesty,
or good morals.
4.4 Union Election Protest: Proclamation of Winners
Section 13. Protest; when perfected. - Any party-in-interest may file a
protest based on the conduct or mechanics of the election. Such
38 | P LATON
protests shall be recorded in the minutes of the election proceedings.
Protests not so raised are deemed waived.
The protesting party must formalize its protest with the Med-Arbiter,
with specific grounds, arguments and evidence, within five (5) days
after the close of the election proceedings. If not recorded in the
minutes and formalized within the prescribed period, the protest shall
be deemed dropped.
5. ACTION AGAINST UNION OFFICERS
A union officer, after his election, may not be expelled from the
union for past malfeasance or misfeasance. To do so would
nullify the choice made by the union members.
The remedy against erring union officers is not referendum but
union expulsion, i.e., to expel them from the Union.
It is the better part of conventional or pragmatic solutions in
cases of this nature, absent overriding considerations to the
contrary, to respect the will of the majority of the workers who
voted in the elections. Although decreed under a different
setting, it is apropos to recall the ruling that where the people
have elected a man to office, it must be assumed that they did
this with knowledge of his life and character, and that they
disregarded or forgave his faults or misconduct, if he had been
guilty of any.
6. DUE PROCESS IN IMPEACHMENT
7. EXPULSION OF MEMBER
Just as an officer is entitled to due process, so does a member.
In a case, the Court explicitly ruled that a member of a labor
union may be expelled only for a valid cause and by following
the procedure outlined in the constitution and by-laws of the
union.
Expulsion of a member for arbitrary or impetuous reason may
amount to unfair labor practice by the union.
8. RELIEF WITHIN THE UNION
Generally, redress must first be sought within the union itself in
accordance with its constitution and by-laws.
If intra-union remedies have failed to correct any violations of
the internal labor organization procedures, a case can be filed
with the Bureau of Labor Relations, which is authorized to hear
and decide cases of this nature.
8.1 Exceptions
Where exhaustion of remedies within the union itself would
practically amount to a denial of justice, or would be illusory or
vain, it will not be insisted upon, particularly where property
rights of the members are involved, as a condition to the right
to invoke the aid of a court.
9. CONSEQUENCES OF VIOLATION OF RIGHTS
If the conditions of membership, or the right of the members,
are violated, the violation may result in the cancellation of the
union registration or the expulsion of the culpable officers.
Section 4. Actions arising from Article 241. - Any complaint or petition
with allegations of mishandling, misappropriation or non-accounting of
funds in violation of Article 241 shall be treated as an intra-union
dispute. It shall be heard and resolved by the Med-Arbiter pursuant to
the provisions of Rule XI.
9.1 Exception: When 30% Not Required
When such violation directly affects only one or two members,
then only one or two members would be enough to report such
violation.
It states that a report of a violation of rights and conditions of
membership in a labor organization may be made by "(a)t least
thirty percent (30%) of all the members of a union or any
member or members specially concerned.
10. VISITORIAL POWER
Article 247 authorizes the Secretary of Labor and Employment
or his duly authorized representative to inquire into the
financial activities of any labor organization on the basis of a
complaint under oath, supported by 20 percent of the
membership in order to determine compliance or
noncompliance with the laws and to aid in the prosecution of
any violation thereof.
11. CHECK-OFF AND ASSESSMENTS
A check-off is a method of deducting from an employee’s pay at
prescribed period, the amounts due the union for fees, fines, or
assessments. The right of a union to collect union dues is
recognized under Article 277(a).
11.1 Assessments, like dues, may also be checked off
Dues are defined as payments to meet the union’s general and
current obligations. The payment must be regular, periodic, and
uniform. Payments used for a special purpose, especially if
required only for a limited time, are regarded as assessment.
ART. 241. Rights and conditions of membership in a labor organization.
— The following are the rights and conditions of membership in a labor
organization.
(o) Other than for mandatory activities under the Code, no special
assessment, attorney's fees, negotiation fees or any other
extraordinary fees may be checked off from any amount due an
employee without an individual written authorization duly signed by an
employee. The authorization should specifically state the amount,
purpose and beneficiary of the deduction.
Attorney's fees may not be deducted or checked off from any
amount due to an employee without his written consent except
for mandatory activities under the Code.
A mandatory activity has been defined as a judicial process of
settling dispute laid down by the law. An amicable settlement
entered into by the management and the union is not a
mandatory activity under the Code. Moreover, the law explicitly
requires the individual written authorization of each employee
concerned, to make the deduction of attorney’s fees valid.
Deductions for union service fee are authorized by law and do
not require individual check-off authorizations.
39 | P LATON
Notwithstanding its "compulsory" nature, “compulsory
arbitration” is not the "mandatory activity" under the Code
which dispenses with individual written authorizations for
check-offs.
(1) Requirements – The failure of the Union to comply strictly with the
requirements set out by the law invalidates the questioned special
assessment. Substantial compliance is not enough in view of the fact
that the special assessment will diminish the compensation of the
union members. Their express consent is required, and this consent
must be obtained in accordance with the steps outlined by law, which
must be followed to the letter. No shortcuts are allowed.
It submitted only minutes of the local membership meetings when
what is required is a written resolution adopted at the general meeting.
Worse still, the minutes of three of those local meetings held were
recorded by a union director and not by the union secretary. The
minutes submitted to the Company contained no list of the members
present and no record of the votes cast. Since it is quite evident that
the Union did not comply with the law at every turn, the only
conclusion that may be made therefrom is that there was no valid levy
of the special assessment pursuant to paragraph (n) of Article 241 of
the Labor Code.
(2) Effects of withdrawal of authorizations – Paragraph (o) on the other
hand requires an individual written authorization duly signed by every
employee in order that a special assessment may be validly checked-
off. Even assuming that the special assessment was validly levied
pursuant to paragraph (n), and granting that individual written
authorizations were obtained by the Union, nevertheless there can be
no valid check-off considering that the majority of the union members
had already withdrawn their individual authorizations. A withdrawal of
individual authorizations is equivalent to no authorization at all.
(3) Forms of disauthorization – The Union points out, however, that
said disauthorizations are not valid for being collective in form, as they
are "mere bunches of randomly procured signatures, under loose
sheets of paper." The contention deserves no merit for the simple
reason that the documents containing the disauthorizations have the
signatures of the union members. The Court finds these retractions to
be valid. There is nothing in the law which requires that the
disauthorization must be in individual form.
(4) Purpose of the special assessment – Of the stated purposes of the
special assessment, as embodied in the board resolution of the Union,
only the collection of a special fund for labor and education research is
mandated, as correctly pointed out by the Union. The two other
purposes, namely, the purchase of vehicles and other items for the
benefit of the union officers and the general membership, and the
payment of services rendered by union officers, consultants and others,
should be supported by the regular union dues, there being no showing
that the latter are not sufficient to cover the same.
(5) Article 222(b) of the Labor Code, “similar charge” – The last stated
purpose is contended by petitioners to fall under the coverage of
Article 222 (b) of the Labor Code. The contention is impressed with
merit. Article 222 (b) prohibits attorney's fees, negotiations fees and
similar charges arising out of the conclusion of a collective bargaining
agreement from being imposed on any individual union member. The
collection of the special assessment partly for the payment for services
rendered by union officers, consultants and others may not be in the
category of "attorney's fees or negotiations fees." But there is no
question that it is an exaction which falls within the category of a
"similar charge," and, therefore, within the coverage of the prohibition
in the aforementioned article.
(6) Unlimited discretion of union president, disallowed – There is an
additional proviso giving the Union President unlimited discretion to
allocate the proceeds of the special assessment. Such a proviso may
open the door to abuse by the officers of the Union considering that
the total amount of the special assessment is quite considerable —
P1,027,694.33 collected from those union members who originally
authorized the deduction, and P1,267,863.39 from those who did not
authorize the same, or subsequently retracted their authorizations.
The Court, therefore, stakes down the questioned special assessment
for being a violation of Article 241, paragraphs (n) and (o), and Article
222 (b) of the Labor Code.
11.2 Three Requisites to Collect Special Assessment
Article 241 speaks of three (3) requisites that must be complied
with in order that the special assessment for Union's incidental
expenses, attorney's fees and representation expenses, as
stipulated in Article XII of the CBA, be valid and upheld namely:
1) authorization by a written resolution of the majority of all
the members at the general membership meeting duly called
for the purpose; (2) secretary's record of the minutes of the
meeting; and (3) individual written authorization for check-off
duly signed by the employee concerned.
11.3 Check-off of Agency Fee
This is the amount, equivalent to union dues, which a non-
union member pays to the union because he benefits from the
CBA negotiated by the union. In negotiating the CBA the union
served as the employee’s agent. Check-off of agency fee is
allowed under Art. 248(e).
11.4 Illegal Check-off Ground for cancellation
11.5 Employer’s Liability in Check-off Arrangement
Check-offs in truth impose an extra burden on the employer in
the form of additional administrative and bookkeeping costs. It
is a burden assumed by management at the instance of the
union and for its benefit, in order to facilitate the collection of
dues necessary for the latter's life and sustenance. But the
obligation to pay union dues and agency fees obviously
devolves not upon the employer, but the individual employee.
It is a personal obligation not demandable from the employer
upon default or refusal of the employee to consent to a check-
off. The only obligation of the employer under a check-off is to
effect the deductions and remit the collections to the union.
11.6 Jurisdiction Over Check-off Disputes
The Regional Director of DOLE, not the labor arbiter, has
jurisdiction over check-off disputes.
________
Chapter III
RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS
Art. 242. Rights of legitimate labor organizations. A legitimate
labor organization shall have the right:
a. To act as the representative of its members for the purpose
of collective bargaining;
b. To be certified as the exclusive representative of all the
employees in an appropriate bargaining unit for purposes of
collective bargaining;
c. To be furnished by the employer, upon written request, with
its annual audited financial statements, including the balance
sheet and the profit and loss statement, within thirty (30)
calendar days from the date of receipt of the request, after the
union has been duly recognized by the employer or certified as
40 | P LATON
the sole and exclusive bargaining representative of the
employees in the bargaining unit, or within sixty (60) calendar
days before the expiration of the existing collective bargaining
agreement, or during the collective bargaining negotiation;
d. To own property, real or personal, for the use and benefit of
the labor organization and its members;
e. To sue and be sued in its registered name; and
f. To undertake all other activities designed to benefit the
organization and its members, including cooperative, housing,
welfare and other projects not contrary to law.
Notwithstanding any provision of a general or special law to the
contrary, the income and the properties of legitimate labor
organizations, including grants, endowments, gifts, donations
and contributions they may receive from fraternal and similar
organizations, local or foreign, which are actually, directly and
exclusively used for their lawful purposes, shall be free from
taxes, duties and other assessments. The exemptions provided
herein may be withdrawn only by a special law expressly
repealing this provision. (As amended by Section 17, Republic
Act No. 6715, March 21, 1989)
________
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-lam 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. (As amended by
Republic Act No. 9481, May 25, 2007)
________
1. NOT ANY L.L.O.
The first three rights mentioned in this article do not pertain to
just about any union but only to the union that has been
selected as the bargaining representative of the employees in
the bargaining unit. This article must be read in relation to
Article 255.
2. RIGHTS OF UNION TO REPRESENT ITS MEMBERS
It is the function of a labor union to represent its members
against the employer’s unfair labor practices. It can file in their
behalf without the cumbersome procedure of joining each and
every member as a separate party.
A labor union has the requisite personality to sue on behalf of
its members for their individual money claims. It would be an
unwarranted impairment of the right to self-organization if
such collective entities would be barred from instituting an
action in their representative capacity.
2.1 Members Doubting Their Union
A labor union is one such party authorized to represent its
members under Article 242(a) of the Labor Code which
provides that a union may act as the representative of its
members for the purpose of collective bargaining. This
authority includes the power to represent its members for the
purpose of enforcing the provisions of the CBA.
The intervention may be allowed when there is a suggestion of
fraud or collusion or that the representative will not act in good
faith for the protection of all interests represented by the
union.
3. COMPROMISE BINDING UPON MINORITY MEMBERS OF
UNION; EXCEPTION
It is an accepted rule under our laws that the will of the majority should
prevail over the minority and that the action taken by petitioners as
minority members of the Union is contrary to the policy of the Magna
Carta of Labor, which promotes the settlement of differences between
management and labor by mutual agreement, and that if said action
were tolerated, no employer would ever enter into any compromise
agreement for the minority members of the Union will always dishonor
the terms of the agreement and demand for better terms.
4. COMPROMISE OF MONEY CLAIMS
Money claims due to laborers cannot be the object of
settlement or compromise effected by a union or counsel
without the specific individual consent of each laborer
concerned. The beneficiaries are the individual complainants
themselves. The union to which they belong can only assist
them but cannot decide for them. Awards in favor of laborers
after long years of litigation must be attended to with mutual
openness and in the best of faith. Only thus can we really give
meaning to the constitutional mandate of giving laborers
maximum protection and security.
Under the philosophy of collective responsibility, an employer who
bargains in good faith should be entitled to rely upon the promises and
agreements of the union representatives with whom he must deal
under the compulsion of law and contract. The collective bargaining
process should be carried on between parties who can mutually respect
and rely upon the authority of each other." Where, however, collective
bargaining process is not involved, and what is at stake are back wages
already earned by the individual workers by way of overtime, premium
and differential pay, and final judgment has been rendered in their
favor, the present case, the real parties in interest with direct material
interest, as against the union which has only served as a vehicle for
collective action to enforce their just claims, are the individual workers
themselves. Authority of the union to waive or quitclaim all or part of
the judgment award in favor of the individual workers cannot be lightly
presumed but must be expressly granted, and the employer, as
judgment debtor, must deal in all good faith with the union as the
agent of the individual workers. The Court in turn should certainly
verify and assure itself of the fact and extent of the authority of the
union leadership to execute any compromise or settlement of the
41 | P LATON
judgment on behalf of the individual workers who are the real
judgment creditors.
5. RIGHT TO BE FURNISHED WITH FINANCIAL STATEMENT
To better equip the union in preparing for or in negotiating with
the employer, the law gives it the right to be furnished with the
employer’s audited financial statements. There are four points
in time when the union may ask in writing for these
statements:
(1) after the union has been recognized by the employer as sole
bargaining representative of the employees in the bargaining
unit; or
(2) after the union is certified by DOLE as such sole bargaining
representative; or
(3) within the last 60 days of the life of a CBA; or
(4) during the collective bargaining negotiation.
The audited statements, including the balance sheet and the
profit and loss statement, should be provided by the employer
within 30 calendar days after receipt of the union’s request.
6. RIGHT TO COLLECT DUES
________
Title V
COVERAGE
Article 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. (As amended by Batas
Pambansa Bilang 70, May 1, 1980).
________
1. ORGANIZING IN GENERAL
The rights to organize and to bargain, in a general sense, are
given not exclusively to employees. Even workers who are not
employees of any particular employer may form their
organizations to protect their interests.
Under Art. 243 of this Code, the right to organize refers also to
forming, joining or assisting a labor organization. Connected to
Art. 246 this right carries with it the right to engage in group
action, provided it is peaceful, to support the organization’s
objective which is not necessarily bargaining but, simply, to aid
and protect its members. But this kind of group action must be
differentiated from strike which, because it is work stoppage,
must observe certain regulation; otherwise, the strike may be
declared illegal and its leaders may be thrown out of their jobs.
1.1 Coverage of the Right to Organize; Exceptions
The right to form, join or assist a labor organization is granted
to all kinds of employees of all kinds of employers—public or
private, profit or non-profit, commercial or religious. Their
usual form of organization is a union and the usual purpose is
collective bargaining with their employers.
But the seemingly all-inclusive coverage of “all persons” in
Article 243 actually admits exceptions. Under Art. 245, for
instance, managerial employees, regardless of the kind of
organization where they are employed, may not join, assist or
form any labor organization, meaning a labor union.
Accordingly, managerial employees cannot, in the absence of
an agreement to the contrary, be allowed to share in the
concessions obtained by the labor union through collective
negotiation. Otherwise, they would be exposed to the
temptation of colluding with the union during the negotiations
to the detriment of the employer. However, there is nothing to
prevent the employer from granting benefits to managerial
employees equal to or higher than those afforded to union
members.
Supervisors are allowed to organize, but they cannot for, join or
assist a rank-and-file union.
2. RIGHT TO ORGANIZE CANNOT BE BARGAINED AWAY
Although we have upheld the validity of the CBA as the law
among the parties, its provisions cannot override what is
expressly provided by law that only managerial employees are
ineligible to join, assist or form any labor organization.
Therefore, regardless of the challenged employees'
designations, whether they are employed as Supervisors or in
the confidential payrolls, if the nature of their job does not fall
under the definition of "managerial" as defined in the Labor
Code, they are eligible to be members of the bargaining unit
and to vote in the certification election. Their right to self-
organization must be upheld in the absence of an express
provision of law to the contrary. It cannot be curtailed by a
collective bargaining agreement.
3. EMPLOYEES OF NONPROFIT INSTITUTIONS
Under Article 243 of the Labor Code, the rank-and-file
employees of non-profit medical institutions are permitted to
form, organize or join labor unions of their choice for purposes
of collective bargaining. If the union has complied with the
requisites provided by law for calling a certification election, it
is incumbent upon the DOLE Regional Director to conduct such
certification election to ascertain the bargaining representative
of the hospital employees.
4. EXCEPTION: EMPLOYEE-MEMBERS OF A COOPERATIVE
A cooperative is by its nature different from an ordinary
business concern being run either, by persons, partnerships or
corporations. Its owners and/or members are the ones who run
and operate the business while the others are its employees. As
above stated, irrespective of the name of shares owned by its
members they are entitled to cast one vote each in deciding
upon the affair of the cooperative. Their share capital earn
limited interests. They enjoy special privileges as exemption
from income tax and sales taxes, preferential right to supply
42 | P LATON
their products to State agencies and even exemption from
minimum wage laws.
An employee of such a cooperative who is a member and co-
owner thereof cannot invoke the right to collective bargaining
for certainly an owner cannot bargain with himself or his co-
owners.
However, in so far as it involves cooperatives with employees
who are not members or co-owners thereof, certainly such
employees are entitled to exercise the rights of all workers to
organization, collective bargaining, negotiations and others as
are enshrined in the Constitution and existing laws of the
country.
In another case, the court clarified that it is the fact of
ownership of the cooperative, and not involvement in the
management thereof, which disqualifies a member from joining
any labor organization within the cooperative. Thus,
irrespective of the degree of their participation in the actual
management of the cooperative, all members thereof cannot
form, assist or join a labor organization for the purpose of
collective bargaining.
But member-employees of a cooperative may withdraw as
members of the cooperative in order to join a labor union.
Membership in a cooperative is voluntary; inherent in it is the
right not to join.
4.1 Exception to Exception: Association, not Union
While the members of a cooperative who are also its
employees cannot unionize for bargaining purposes, the law
does not prohibit them from forming an association for their
mutual aid and protection as employees.
D.O. No. 40-03 allows and defines a “workers’ association” as
one which is organized for the mutual aid and protection of its
members or for any legitimate purpose other than collective
bargaining.
5. EXCEPTION: INTERNATIONAL ORGANIZATIONS
A certification election cannot be conducted in an international
organization which the Philippine Government has granted
immunity from local jurisdiction.
The grant of such immunity is a political question whose
resolution by the executive branch of government is conclusive
upon the courts
(1) “International Organization” and “Specialized Agencies”—The term
"international organization" is generally used to describe an
organization set up by agreement between two or more states. Under
contemporary international law, such organizations are endowed with
some degree of international legal personality such that they are
capable of exercising specific rights, duties and powers. They are
organized mainly as a means for conducting general international
business in which the member states have an interest. The United
Nations, for instance, is an international organization dedicated to the
propagation of world peace. "Specialized agencies" are international
organizations having functions in particular fields. The term appears in
Articles 57 and 63 of the Charter of the United Nations.
(2) Principles Underlying the Grant of International Immunities to
International Organizations—There are basically three propositions
underlying the grant of international immunities to international
organizations. These principles, contained in the ILO Memorandum are
stated thus: 1) international institutions should have a status which
protects them against control or interference by any one government
in the performance of functions for the effective discharge of which
they are responsible to democratically constituted international bodies
in which all the nations concerned are represented; 2) no country
should derive any national financial advantage by levying fiscal charges
on common international funds; and 3) the international organization
should, as a collectivity of States members, be accorded the facilities
for the conduct of its official business customarily extended to each
other by its individual member States. The theory behind all three
propositions is said to be essentially institutional in character. "It is not
concerned with the status, dignity or privileges of individuals, but with
the elements of functional independence necessary to free
international institutions from national control and to enable them to
discharge their responsibilities impartially on behalf of all their
members. The raison d'etre for these immunities is the assurance of
unimpeded performance of their functions by the agencies concerned.
(3) Labor’s Basic Rights Remain—The immunity of International
Catholic Migration Commission (ICMC) and the International Rice
Research Institution (IRRI) from local jurisdiction by no means deprives
labor of its basic rights, which are guaranteed by Article II, Section 18,
Article III, Section 8, and Article XIII, Section 3, of the 1987 Constitution;
and implemented by Articles 243 and 246 of the Labor Code.
(4) Certification Election Barred by Immunity—The immunity granted
being "from every form of legal process except in so far as in any
particular case they have expressly waived their immunity," it is
inaccurate to state that a certification election is beyond the scope of
that immunity for the reason that it is not a suit against ICMC. A
certification election cannot be viewed as an independent or isolated
process. It could trigger off a series of events in the collective
bargaining process together with related incidents and/or concerted
activities, which could inevitably involve ICMC in the "legal process,"
which includes “any penal, civil and administrative proceedings.” The
eventuality of Court litigation is neither remote and from which
international organizations are precisely shielded to safeguard them
from the disruption of their functions. Clauses on jurisdictional
immunity are said to be standard provisions in the constitutions of
international Organizations. “The immunity covers the organization
concerned, its property and its assets...”
5.1 Waiver of Immunity
Waiver of its immunity is discretionary to IRRI. Without such
express waiver the NLRC or its labor arbiters have no
jurisdiction over IRRI even in cases of alleged illegal dismissal of
any of its employees.
5.2 Foreign Workers
Foreigners, whether natural or juridical, as well as foreign corporations
are strictly prohibited from engaging directly or indirectly in all forms of
trade union activities. However, aliens working in the country with valid
work permits may exercise the right to self-organization if they are
nationals of a country that grants the same or similar rights to Filipino
workers. (Art. 269)
6. EXCEPTION: RELIGIOUS OBJECTORS; IGLESIA NI CRISTO
MEMBERS
Under the Industrial Peace Act (1953) which preceded the
Labor Code (and even under the present Code) the employer
and the union could enter into a “closed shop” agreement
which would compel employees to become union workers as a
condition of continued employment. But in 1961 R.A. No. 3350
was passed to exempt from such compulsory union
membership the followers of any religious sect (such as the
Iglesia ni Cristo) whose teachings forbid membership in labor
43 | P LATON
unions. The constitutionality of R.A. No. 3350 was upheld by
the Supreme Court in Victoriano v. Elizalde.
It may not be amiss to point out here that the free exercise of
religious profession or belief is superior to contract rights. In
case of conflict, the latter must, therefore, yield to the former.
6.1 Does the Exemption Still Stand?
6.2 Iglesia Ni Cristo Members May Form and Join Own Union
________
Article 244. Right of employees in the public service. –
Employees of government corporations established under the
Corporation Code shall have the right to organize and to
bargain collectively with their respective employers. All other
employees in the civil service shall have the right to form
associations for purposes not contrary to law. (As amended by
Executive Order No. 111, December 24, 1986).
________
1. GOVERNMENT EMPLOYEES’ RIGHT TO ORGANIZE;
LIMITATIONS
The highest law of the land guarantees to government
employees the right to organize and to negotiate, but not the
right to strike.
1.1 Limited Purpose
The extent of the government employees' right of self-
organization differs significantly from that of employees in the
private sector. The latter's right of self-organization, i.e., "to
form, join or assist labor organizations for purposes of
collective bargaining," admittedly includes the right to deal and
negotiate with their respective employers in order to fix the
terms and conditions of employment and also, to engage in
concerted activities for the attainment of their objectives, such
as strikes, picketing, boycotts. But the right of government
employees to "form, join or assist employees organizations of
their own choosing" under Executive Order No. 180 is not
regarded as existing or available for "purposes of collective
bargaining," but simply "for the furtherance and protection of
their interests."
In other words, the right of Government employees to deal and
negotiate with their respective employers is not quite as
extensive as that of private employees. Excluded from
negotiation by government employees are the "terms and
conditions of employment...that are fixed by law," it being only
those terms and conditions not otherwise fixed by law that
"may be subject of negotiation between the duly recognized
employees' organizations and appropriate government
authorities."
Declared to be 'not negotiable' are matters "that require appropriation
of funds;" e.g., increase in salary emoluments and other allowances, car
plan, special hospitalization, medical and dental services, increase in
retirement benefits (Sec. 3, Rule VIII), and those "that involve the
exercise of management prerogatives;" e.g., appointment, promotion,
assignment/detail, penalties as a result of disciplinary actions, etc. (Sec.
4, Id.) Considered negotiable are such matters as schedule of vacation
and other leaves, work assignment of pregnant women; recreational,
social, athletic, and cultural activities and facilities, etc. (Sec. 2, Id.).
1.2 No Signing Bonus
Employees and officers of SSS are not entitled to the signing
bonus provided for in the collective negotiation agreement
because the process of collective negotiations in the public
sector does not encompass terms and conditions of
employment requiring the appropriation of public funds. The
Court reminds the Social Security Commission officials that the
SSS fund is not their money
1.3 Excepted Employees
Excepted from the application of Executive Order 180,
however, are “members of the Armed Forces of the Philippines,
including police officers, policemen, firemen, and jail guards”
(Sec. 4). For reasons of security and safety, they are not allowed
to unionize.
A “high level employee” is one “whose functions are normally
considered policy determining, managerial or one whose duties
are highly confidential in nature. A managerial function refers
to the exercise of powers such as: (1) to effectively recommend
such managerial actions; (2) to formulate or execute
management policies and decisions; or (3) to hire, transfer, lay-
off, recall, dismiss, assign or discipline employees.
1.3a Professors as rank-and-file employees
Professors at the University of the Philippines who are not
exercising managerial or highly confidential functions are rank-
and-file employees and may unionize separately from the non-
academic personnel.
In short, the professors, associate professors and assistant
professors of the University of the Philippines are rank-and-file
employees. The full professors, associate professors, assistant
professors, instructors and the research, extension and
professional staff may, if so minded, organize themselves into a
separate collective bargaining unit.
1.4 Right to Strike
EO No. 180 also concedes to government employees, like their
counterparts in the private sector, the right to engage in concerted
activities, including the right to strike, the executive order is quick to
add that those activities must be exercised in accordance with law, i.e.
are subject both to "Civil Service Law and rules" and "any legislation
that may be enacted by Congress," that "the resolution of complaints,
grievances and cases involving government employees" is not ordinarily
left to collective bargaining or other related concerted activities, but to
"Civil Service Law and labor laws and procedures whenever applicable;"
and that in case "any dispute remains unresolved after exhausting all
available remedies under existing laws and procedures, the parties may
jointly refer the dispute to the (Public Sector Labor-Management)
Council for appropriate action." What is more, the Rules and
Regulations implementing Executive Order No. 180 explicitly provide
that since the "terms and conditions of employment in the
government, including any political subdivision or instrumentality
thereof and government-owned and controlled corporations with
original charters are governed by law, the employees therein shall not
strike for the purpose of securing changes thereof.
2. REGISTRATION
Sec. 7. Government employees' organizations shall register with the
Civil Service Commission and the Department of Labor and
Employment. The application shall be filed with the Bureau of Labor
Relations of the Department which shall process the same in
accordance with the provisions of the Labor Code of the Philippines, as
44 | P LATON
amended. Applications may also be filed with the Regional Offices of
the Department of Labor and Employment which shall immediately
transmit the said applications to the Bureau of Labor Relations within
three (3) days from receipt thereof.
Sec. 8. Upon approval of the application, a registration certificate
be issued to the organization recognizing it as a legitimate employees'
organization with the right to represent its members and undertake
activities to further and defend its interest. The corresponding
certificates of registration shall be jointly approved by the Chairman of
the Civil Service Commission and Secretary of Labor and Employment.
(E.O. No. 180)
3. CERTIFICATION ELECTION IN GOVERNMENT CORPORATION
A certification election to choose the union that will represent
the employees may be conducted by the Bureau of Labor
Relations in a government corporation, whether governed by
the Labor Code or the Civil Service rules.
3.1 Election of Officers in Government Unions
It is quite clear from this provision that BLR has the original and
exclusive jurisdiction on all inter-union and intra-union
conflicts. An intra-union conflict would refer to a conflict within
or inside a labor union, and an inter-union controversy or
dispute, one occurring or carried on between or among unions.
The subject of the case at bar, which is the election of the
officers and members of the board of KMKK-MWSS, is, clearly,
an intra-union conflict, being within or inside a labor union. It is
well within the powers of the BLR to act upon.
4. WHEN PSLMC MAY RULE ON LEGALITY OF DISMISSAL
The Public Sector Labor-Management Council, created by
Executive Order No. 180 (June 1, 1987) has jurisdiction to hear
charges of unfair labor practice filed by government employees
against their employer, e.g., the Pamantasan ng Lungsod ng
Maynila. In deciding the ULP charge the PSLMC may also rule
on the complainants’ dismissal if the two issues—ULP and
dismissal—are unavoidably interlinked.
5. UNION-BUSTING IN A GOVERNMENT AGENCY, U.L.P.
5.1 Even Temporary Employees May Organize
Even temporary employees enjoy the basic right to form
organization or association for purposes not contrary to law.
Under Art. 277(c) of the Labor Code, “any employee, whether
employed for a definite period of not, shall beginning on his
first day of service, be considered an employee for purposes of
membership in any labor union.”
________
Article 245. Ineligibility of managerial employees to join any
labor organization; Right of Supervisory Employees. -
Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be
eligible for membership in the collective bargaining unit of the
rank-and-file employees but may join, assist or form separate
collective bargaining units and/or legitimate labor organizations
of their own. The rank-and-file union and the supervisors’ union
operating within the same establishment may join the same
federation or national union. (As amended by Section 18,
Republic Act No. 6715, March 21, 1989 and Section 8, Republic
Act No. 9481 which lapsed into law on May 25, 2007 and
became effective on June 14, 2007).
________
1. CATEGORIES OF EMPLOYEES
RA 6715 which took effect on March 21, 1989 (15 days after its
publication in the "Philippines Daily Inquirer") provides that
although "supervisory employees shall not be eligible for
membership in a labor organization of the rank and file
employees," they may, however, "join, assist or form separate
labor organization of their own."
2. INELIGIBILITY OF MANAGERS
2.1 Types of Managerial Employees
The term "manager" generally refers to "anyone who is responsible for
subordinates and other organizational resources." As a class, managers
constitute three levels of a pyramid, namely, top management, middle
management, and first-line management which is also called
supervisor. Below this third level are the operatives or operating
employees who, we may add, are also called rank-and-file.
FIRST-LINE MANAGERS — The lowest level in an organization at which
individuals are responsible for the work of others is called first-line or
first-level management. First-line managers direct operating employees
only; they do not supervise other managers. Examples of first-line
managers are the "foreman" or production supervisor in a
manufacturing plant, the technical supervisor in a research department,
and the clerical supervisor in a large office. First-level managers are
often called supervisors.
MIDDLE MANAGERS — The term middle management can refer to
more than one level in an organization. Middle managers direct the
activities of other managers and sometimes also those of operating
employees. Middle managers' principal responsibilities are to direct the
activities that implement their organizations' policies and to balance
the demands of their superiors with the capacities of their
subordinates. A plant manager in an electronics firm is an example of a
middle manager.
TOP MANAGERS — Composed of a comparatively small group of
executives, top management is responsible for the overall management
of the organization. It establishes operating policies and guides the
organization's interactions with its environment. Typical titles of top
managers are "chief executive officer," "president," and "senior vice-
president." Actual titles vary from one organization to another and are
not always a reliable guide to membership in the highest management
classification.
As can be seen from this description, a distinction exists between those
who have the authority to devise, implement and control strategic and
operational policies (top and middle managers) and those whose task is
simply to ensure that such policies are carried out by the rank-and-file
employees of an organization (first-level managers/supervisors). What
distinguishes them from the rank-and-file employees is that they act in
the interest of the employer in supervising such rank-and-file
employees.
"Managerial employees" may therefore be said to fall into two distinct
categories: the "managers" per se, who compose the former group
described above, and the "supervisors" who form the latter group.
Whether they belong to the first or the second category, managers, vis-
a-vis employers, are, likewise, employees.
2.2 Constitutionality of the Prohibition
The question is whether the first sentence of Art. 245 of the
Labor Code, prohibiting managerial employees from forming,
45 | P LATON
assisting or joining any labor organization, is constitutional in
light of Art. III, Sec. 8 of the Constitution which provides:
The right of the people, including those employed in the public and
private sectors, to form unions, association, or societies for purposes
not contrary to law shall not be abridged.
The present Article 245 is the result of the amendment of the
Labor Code in 1989 by R.A. No. 6715, otherwise known as the
Herrera-Veloso Law. Unlike the Industrial Peace Act or the
provisions of the Labor Code which it superseded, R.A. No.
6715 provides separate definitions of the terms "managerial"
and "supervisory employees" (See Art. 212[m]).
Although the definition of "supervisory employees" seems to
have been unduly restricted to the last phrase of the definition
in the Industrial Peace Act, the legal significance given to the
phrase "effectively recommends" remains the same. In fact, the
distinction between top and middle managers, who set
management policy, and front-line supervisors, who are merely
responsible for ensuring that such policies are carried out by
the rank and file, is articulated in the present definition.
The rationale for this inhibition has been stated to be, because if these
managerial employees would belong to or be affiliated with a Union,
the latter might not be assured of their loyalty to the Union in view of
evident conflict of interests. The Union can also become company-
dominated with the presence of managerial employees in Union
membership.
2.2a Other Opinions
Justice Puno further airs a warning: “To declare Article 245 of the Labor
Code unconstitutional cuts deep into our existing industrial life and will
open the floodgates to unionization at all levels of the industrial
hierarchy. Such a ruling will wreak havoc on the existing set-up
between management and labor. If all managerial employees will be
allowed to unionize, then all who are in the payroll of the company,
starting from the president, vice-president, general managers and
everyone, with the exception of the directors, may go on strike or
picket the employer. Company officers will join forces with the
supervisors and rank-and-file.”
3. EVOLUTION OF SUPERVISORS’ RIGHT TO ORGANIZE
Unlike managers, supervisors can unionize.
3.1 First Period: Under the Industrial Peace Act
The problem was that although the Industrial Peace Act defined
a “supervisor,” it failed to define a “manager” or “managerial
employee.” So the question arose: Did the word “supervisor”
include “manager”? Could managers also unionize? In a case
involving Caltex managers, the Court answered affirmatively.
3.2 Second Period: Under the Labor Code Before Amendment
by R.A. No. 6715
This time the question was: Did ‘managerial employee” include
“supervisor”? Were supervisors also banned from unionizing?
Yes. The prohibition was applied to supervisors in the case of
Bulletin Publishing Corp. V. Sanchez, 144 SCRA 428, decided on
October 7, 1986.
3.3 Third Period: Under the Labor Code as Amended by RA
6715
R.A. No. 6715 presents a compromise formula: retain the
ineligibility of managerial employees but revive the right of
supervisory employees to unionize.
4. DEFINITION OF MANAGER AND SUPERVISOR
Unlike in the Industrial Peace Act and the Labor Code before
such amendment, the power to decide on managerial acts is
now separated from the power to recommend those
managerial acts, such as laying down policy, hiring or dismissing
employees, etc. A supervisor has the power only to recommend
while a managerial employee has the power to decide and do
those acts.
But to make one a supervisor, the power to recommend must
not be merely routinary or clerical in nature but requires the
use of independent judgment. In other words, the
recommendation is (1) discretionary or judgmental (not
clerical), (2) independent (not a dictation of someone else), and
(3) effective (given particular weight in making the
management decision). If these qualities are lacking or, worse,
if the power to recommend is absent, then the person is not
really a supervisor but a rank-and-file employee and therefore
belongs or should belong to a rank-and-file organization.
Similarly, a so-called manager, no matter how his position is
titled, is not really a manager in the eyes of the law if he does
not possess managerial powers (to lay down and execute
management policies and/ or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees). If he can only
recommend the exercise of any of these powers, he is only a
supervisor, hence, may join, assist or form a supervisors’
organization.
5. TEST OF SUPERVISORY STATUS
The test of "supervisory" or "managerial status" depends on whether a
person possesses authority to act in the interest of his employer in the
matter specified in Article 212 (k) of the Labor Code and Section 1 (m)
of its Implementing Rules and whether such authority is not merely
routinary or clerical in nature, but requires the use of independent
judgment. Thus, where such recommendatory powers as in the case at
bar, are subject to evaluation, review and final action by the
department heads and other higher executives of the company, the
same, although present, are not effective and not an exercise of
independent judgment as required by law.
It is the nature of an employee's functions and not the nomenclature or
title given to his job which determines whether he has rank-and-file or
managerial status. Among the characteristics of managerial rank are:
(1) He is not subject to the rigid observance of regular office hours; (2)
His work requires the consistent exercise of discretion and judgment in
its performance; (3) the output produced or the result accomplished
cannot be standardized in relation to a given period of time; (4) He
manages a customarily recognized department or subdivision of the
establishment, customarily and regularly directing the work of other
employees therein; (5) He either has the authority to hire or discharge
other employees or his suggestions and recommendations as to hiring
and discharging, advancement and promotion or other change of status
of other employees are given particular weight; and (6) As a rule, he is
not paid hourly wages nor subjected to maximum hours of work.
5.1 The Power to Recommend
The power to recommend, in order to qualify an employee as a
supervisor, must not only be effective but should require the
use of independent judgment. It should not be merely of a
routinary or clerical nature.
46 | P LATON

5.2 Examples of Ineffective or Clerical Recommendation
6. SEGREGATION OF RANK-AND-FILE AND SUPERVISORS
Article 245 allows supervisory employees to form, join, or assist
separate labor organizations of their own, but they are not
eligible for membership in a labor organization of the rank-and-
file employees. Neither may a rank-and-file join a union of
supervisors.
This policy of segregating the supervisors’ union from that of
the rank-and-file is founded on fairness to the employees
themselves. It will be doubly detrimental to the employer if the
supervisors and the rank-and-file, as members of only one
union, could take a common stand against the employer.
6.1 Effects of Having Mixed Membership
A union whose membership is a mixture of supervisors and
rank-and-file is not and cannot become a legitimate labor
organization. It cannot petition for a certification election,
much less ask to be recognized as the bargaining representative
of employees.
The Labor Code has made it a clear statutory policy to prevent
supervisory employees from joining labor organizations consisting of
rank-and-file employees as the concerns which involve members of
either group are normally disparate and contradictory.
Clearly, based on Article 245, a labor organization composed of both
rank-and-file and supervisory employees is no labor organization at all.
It cannot, for any guise or purpose, be a legitimate labor organization.
Not being one, an organization which carries a mixture of rank-and-file
and supervisory employees cannot possess any of the rights of a
legitimate labor organization, including the right to file a petition for
certification election for the purpose of collective bargaining. It
becomes necessary, therefore, anterior to the granting of an order
allowing a certification election, to inquire into the composition of any
labor organization whenever the status of the labor organization is
challenged on the basis of Article 245 of the Labor Code.
The rationale behind the Code's exclusion of supervisors from unions of
rank-and-file employees is that such employees, while in the
performance of supervisory functions, become the alter ego of
management in the making and the implementing of key decisions at
the sub-managerial level. Certainly, it would be difficult to find unity or
mutuality of interests in a bargaining unit consisting of a mixture of
rank-and-file and supervisory employees. And this is so because the
fundamental test of a bargaining unit's acceptability is whether or not
such a unit will best advance to all employees within the unit the
proper exercise of their collective bargaining rights. The Code itself has
recognized this, in preventing supervisory employees from joining
unions of rank-and-file employees.
6.2 How Many? How Few?
6.3 Illegal Mixed Membership Must Be Raised and Proved
6.4 Cancellation of Union Registration on Ground of Inclusion of
Disqualified Positions: What needs to be Proved
What is essential is the nature of the employee’s function and not the
nomenclature or title given to the job which determines whether the
employee has rank-and-file or managerial status or whether he is a
supervisory employee.
The implementing Rules state that the legal personality of the
petitioner union cannot be subject to collateral attack “but may
be questioned only in an independent petition for
cancellation.”
To summarize, the petition for certification election is not the
proper forum to raise the issue of legal personality of the
union. Also, a petition to cancel union registration cannot be
heard or decided by the Med-Arbiter but either the DOLE
Regional Director for enterprise-level or the BLR Director for
national unions.
6.5 Affiliation of Supervisors and Rank-and-File Unions
Even in affiliating with a federation, the unions of the
supervisors and of the ran-and-file should be segregated.
The peculiar role of supervisors is such that while they are not
managers, when they recommend action implementing management
policy or ask for the discipline or dismissal of subordinates, they
identify with the interests of the employer and may act contrary to the
interests of the rank-and-file.
We agree with the petitioner's contention that a conflict of interest
may arise in the areas of discipline, collective bargaining and strikes.
Members of the supervisory union might refuse to carry out disciplinary
measures against their co-member rank-and-file employees. In the area
of bargaining, their interests cannot be considered identical. The needs
of one are different from those of the other. Moreover, in the event of
a strike, the national federation might influence the supervisors' union
to conduct a sympathy strike on the sole basis of affiliation.
Thus, if the intent of the law is to avoid a situation where supervisors
would merge with the rank and-file or where the supervisors' labor
organization would represent conflicting interests, then a local
supervisors' union should not be allowed to affiliate with the national
federation of union of rank-and-file employees where that federation
actively participates in union activity in the company.
6.6 Restriction in Affiliation Clarified in De La Salle
First, the rank-and-file employees are directly under the
authority of the supervisory employees. Second, the national
federation is actively involved in union activities in the
company. If these two conditions are absent, the rule
prohibiting supervisors from affiliating with the mother union
of the rank-and-file union does not apply.
The affiliation of two local unions in a company with the same national
federation is not by itself a negate-on of their independence since in
relation to the employer, the local unions are considered as the
principals, while the federation is deemed to be merely their agent.
7. CONFIDENTIAL EMPLOYEES
7.1 First Swing: Inclusion Among Rank-and-File
7.2 Second Swing: Exclusion from Rank-and-File
7.3 Third Swing: Inclusion Among Supervisors
7.4 Fourth Swing: Inclusion Among Monthly Paid Rank-and-File
7.4a Limited Exclusion; Doctrine of Necessary Implication
A confidential employee is one entrusted with confidence on
delicate matters, or with the custody, handling, or care and
protection of the employer's property. While Art. 245 of the
Labor Code singles out managerial employees as ineligible to
join, assist or form any labor organization, under the doctrine
47 | P LATON
of necessary implication, confidential employees are similarly
disqualified.
The doctrine of necessary implication means that what is
implied in a statute is as much a part thereof as that which is
expressed.
7.4b The Metrolab and Meralco Summations: Exclusion from
Bargaining unit and Closed-shop Clause
Although Article 245 of the Labor Code limits the ineligibility to join,
form and assist any labor organization to managerial employees,
jurisprudence has extended this prohibition to confidential employees
or those who by reason of their positions or nature of work are
required to assist or act in a fiduciary manner to managerial employees
and hence, are likewise privy to sensitive and highly confidential
records.
7.4c Who Are Confidential Employees?
Confidential employees assist and act in a confidential capacity
to, or have access to confidential matters of, persons who
exercise managerial functions in the field of labor relations. As
such, the rationale behind the ineligibility of managerial
employees to form, assist or join a labor union equally applies
to them.
Confidential employees are those who by reason of their
positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and hence, are
likewise privy to sensitive and highly confidential records.
By the very nature of their functions, they assist and act in a
confidential capacity to, or have access to confidential matters
of, persons who exercise managerial functions in the field of
labor relations.
7.4d The Labor Nexus
The broad rationale behind this rule is that employees should not be
placed in a position involving a potential conflict of interests.
"Management should not be required to handle labor relations matters
through employees who are represented by the union with which the
company is required to deal and who in the normal performance of
their duties may obtain advance information of the company's position
with regard to contract negotiations, the disposition of grievances, or
other labor relations matters."
Art. 245 of the Labor Code does not directly prohibit
confidential employees from engaging in union activities.
However, under the doctrine of necessary implication, the
disqualification of managerial employees equally applies to
confidential employees. The confidential-employee rule
justifies exclusion of confidential employees because in the
normal course of their duties they become aware of
management policies relating to labor relations. It must be
stressed, however, that when the employee does not have
access to confidential labor relations information, there is no
legal prohibition against confidential employees from forming,
assisting, or joining a union.
7.4e New CBA may include employees excluded from old CBA;
Expired CBA may be Modified, not just Renewed
The employer and the union in an enterprise may negotiate and
agree whom to cover in their CBA. And they are free to change
their agreement: people excluded before may be included now,
or vice versa.
8. SECURITY GUARDS MAY JOIN RANK-AND-FILE OR
SUPERVISORS UNION
Under the old rules, security guards were barred from joining a
labor organization of the rank-and-file. Under RA 6715, they
may now freely join a labor organization of the rank-and-file or
that of the supervisory union, depending on their rank.
________
Article 245-A. Effect of inclusion as members of employees
outside the bargaining unit. - The inclusion as union members
of employees outside the bargaining unit shall not be a ground
for the cancellation of the registration of the union. Said
employees are automatically deemed removed from the list of
membership of said union. (Introduced as new provision by
Section 9, Republic Act No. 9481 which lapsed into law on May
25, 2007 and became effective on June 14, 2007).
________
Article 246. Non-abridgment of right to self-organization. – It
shall be unlawful for any person to restrain, coerce,
discriminate against or unduly interfere with employees and
workers in their exercise of the right to self-organization. Such
right shall include the right to form, join, or assist labor
organizations for the purpose of collective bargaining through
representatives of their own choosing and to engage in lawful
concerted activities for the same purpose or for their mutual
aid and protection, subject to the provisions of Article 264 of
this Code. (As amended by Batas Pambansa Bilang 70, May 1,
1980).
________
1. CONCEPT OF THE RIGHT TO SELF ORGANIZATION
This is a key article that offers an inclusionary definition of the
right to self-organization (S.O.) by saying not what it is but what
it includes. It includes at least two rights: (1) the right to form,
join or assist labor organizations, and (2) the right to engage in
lawful concerted activities. The “labor organization” may be a
union or association of employees, as mentioned in Article
212(g). Its purposes may be collective bargaining (as stated in
this Article) or dealing with the employer [as stated in Article
212(g)].
The right to form labor organization is twin to the right to
engage in concerted activities.
It is worth noting, finally, that the right to self-organization is
granted not only to employees but to “workers,” whether
employed or not. In fact, constitutionally speaking, the right to
form associations or societies is a right of the “people,”
whether workers or not.
No “person”—inside or outside of government, employer or
non-employer, unionist or non-unionist—may abridge these
rights. If abridged in the workplace, the abridgment is termed
ULP (unfair labor practice).
Article 246, is both (in mixed metaphors), the conceptual
mother and the formidable fortress of the prohibition
expounded in the next three articles.
________
48 | P LATON
 practice unfair to labor, although the offender may either be an
Title VI employer or a labor organization.
UNFAIR LABOR PRACTICES
The victim of the offense is not just the workers as a body and
Chapter I the well-meaning employers who value industrial peace, but
CONCEPT the State as well. Thus, the attack to this constitutional right is
considered a crime which therefore carries both civil and
Article 247. Concept of unfair labor practice and procedure for criminal liabilities.
prosecution thereof. – Unfair labor practices violate the
constitutional right of workers and employees to self- A consideration of the entire law on the matter clearly discloses the
organization, are inimical to the legitimate interests of both intention of the lawmaker to consider acts which are alleged to
labor and management, including their right to bargain constitute unfair labor practices as violations of the law or offenses, to
be prosecuted in the same manner as a criminal offense. The reason for
collectively and otherwise deal with each other in an
this provision is that the commission of an unfair labor practice is an
atmosphere of freedom and mutual respect, disrupt industrial offense against a public right or interest and should be prosecuted in
peace and hinder the promotion of healthy and stable labor- the same manner as a public offense. The reason for the distinction
management relations. between an unfair labor practice case and a mere violation of an
employer of its contractual obligation towards an employees is, x x x
Consequently, unfair labor practices are not only violations of that unfair labor practice cases involve violations of a public right or
the civil rights of both labor and management but are also policy, to be prosecuted like criminal offenses whereas a breach of an
criminal offenses against the State which shall be subject to obligation of the employer to his employee is only a contractual breach
to be redressed like an ordinary contract or obligation.
prosecution and punishment as herein provided.
1.1 Elements
Subject to the exercise by the President or by the Secretary of
Labor and Employment of the powers vested in them by
Commission of unfair labor practice at the enterprise level
Articles 263 and 264 of this Code, the civil aspects of all cases
needs the presence of certain elements: first, there is
involving unfair labor practices, which may include claims for
employer-employee relationship between the offender and
actual, moral, exemplary and other forms of damages,
the offended; and second, the act done is expressly defined in
attorney’s fees and other affirmative relief, shall be under the
the Code as an act of unfair labor practice. The first element is
jurisdiction of the Labor Arbiters. The Labor Arbiters shall give
required because ULP is negation of, a counteraction to, the
utmost priority to the hearing and resolution of all cases
right to organize which is available only to employees in
involving unfair labor practices. They shall resolve such cases
relation to their employer. No organizational right can be
within thirty (30) calendar days from the time they are
negated or assailed if employer-employee relationship is absent
submitted for decision.
in the first place.
Recovery of civil liability in the administrative proceedings shall
The second element is that the act done is prohibited by the
bar recovery under the Civil Code.
Code, specifically in Articles 248 and 261 for an employer and
Article 249 for a labor organization. Art. 212(k) emphatically
No criminal prosecution under this Title may be instituted
defines “unfair labor practice” as “any unfair labor practice as
without a final judgment finding that an unfair labor practice
expressly defined in this Code.” Art. 261 amplifies Art. 248(i) by
was committed, having been first obtained in the preceding
stating that violation of a CBA is unfair labor practice only if the
paragraph. During the pendency of such administrative
violation is gross in character.
proceeding, the running of the period of prescription of the
criminal offense herein penalized shall be considered
The prohibited acts, it should be stressed, are all related to the
interrupted: Provided, however, that the final judgment in the
worker’s self-organizational right and to the observance of a
administrative proceedings shall not be binding in the criminal
collective bargaining agreement (CBA). The only possible
case nor be considered as evidence of guilt but merely as proof
exception is Art. 248(f) referring to dismissing or prejudicing an
of compliance of the requirements therein set forth. (As
employee giving testimony under this Code [regardless of the
amended by Batas Pambansa Bilang 70, May 1, 1980 and later
subject of the testimony].
further amended by Section 19, Republic Act No. 6715, March
21, 1989).
Because ULP is and has to be related to the right to self-
________
organization and to the observance of the CBA, it follows that
not every unfair act is “unfair labor practice.”
1. CONCEPT OF UNFAIR LABOR PRACTICE
ULP, therefore, has a limited, technical meaning because it is a
As noted at the start of Book V a major aim of labor relations
labor relations concept with a statutory definition. It refers only
policy is industrial democracy whose realization is most felt in
to acts opposed to worker’s right to organize. Without that
free collective bargaining or negotiation over terms and
element, the act, no matter how unfair, is not unfair labor
conditions of employment. But for bargaining negotiation to be
practice as legally defined.
true and meaningful, the employees, first of all, must organize
themselves. Because self-organization is a prerequisite—the
Stripped of legalese, unfair labor practice, when committed by
lifeblood—of industrial democracy, the right to self-organize
the employer, commonly connotes anti-unionism.
has been enshrined in the Constitution, and any act intended to
weaken or defeat the right is regarded by law as an offense.
1.2 Prejudice to Public Interest not an Element of U.L.P.
The offense is technically called “unfair labor practice” (ULP).
Literally, it does not mean an unfair practice by labor but a

49 | P LATON
A showing of prejudice to public interest is not a requisite for
ULP charges to prosper.
2. PROSECUTION OF U.L.P.
Under Art. 247 ULP has civil as well as criminal aspects. The civil
aspect may include liability for damages and these may be
passed upon by a labor arbiter.
To prosecute ULP as criminal offense is not possible until after
finality of judgment in the labor case, finding that the
respondent indeed committed unfair labor practice. But such
judgment will not serve as evidence of ULP in the criminal case;
the criminal charge must be proved independently from the
labor case. Moreover, while only substantial evidence is
required in labor case in the NLRC, proof beyond reasonable
doubt is needed to convict in the criminal case of ULP.
The criminal charge, states Art. 228, falls under the concurrent
jurisdiction of the Municipal or Regional Trial Court. The same
article defines the penalty of fine and/ or imprisonment.
Under Art. 289, the penalty shall be imposed upon the guilty
officers of a corporation, partnership, association or entity. If
the ULP is committed by a labor organization the parties liable
are those mentioned in Art. 249.
The offense prescribes in one year. (Art. 290)
________
Chapter II
UNFAIR LABOR PRACTICES OF EMPLOYERS
Article 248. Unfair labor practices of employers. – It shall be
unlawful for an employer to commit any of the following unfair
labor practice:
(a) To interfere with, restrain or coerce employees in the
exercise of their right to self-organization;
(b) To require as a condition of employment that a person or an
employee shall not join a labor organization or shall with-draw
from one to which he belongs;
(c) To contract out services or functions being performed by
union members when such will interfere with, restrain or
coerce employees in the exercise of their rights to self-
organization;
(d) To initiate, dominate, assist or otherwise interfere with the
formation or administration of any labor organization, including
the giving of financial or other support to it or its organizers or
supporters;
(e) To discriminate in regard to wages, hours of work and other
terms and conditions of employment in order to encourage or
discourage membership in any labor organization. Nothing in
this Code or in any other law shall stop the parties from
requiring membership in a recognized collective bargaining
agent as a condition for employment, except those employees
who are already members of another union at the time of the
signing of the collective bargaining agreement. Employees of an
appropriate bargaining unit who are not members of the
recognized collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other fees paid by
members of the recognized collective bargaining agent, if such
non-union members accept the benefits under the collective
bargaining agreement: Provided, that the individual
authorization required under Article 242, paragraph (o) of this
Code shall not apply to the non-members of the recognized
collective bargaining agent;
(f) To dismiss, discharge or otherwise prejudice or discriminate
against an employee for having given or being about to give
testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by
this Code;
(h) To pay negotiation or attorney’s fees to the union or its
officers or agents as part of the settlement of any issue in
collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding,
only the officers and agents of corporations, associations or
partnerships who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable. (As
amended by Batas Pambansa Bilang 130, August 21, 1981).
________
1. CONDITIONS PRECEDENT TO U.L.P. CHARGE
Before an employee may be considered aggrieved by an alleged
unfair labor practice (ULP) by an employer, it must be
demonstrated, firstly, that the injured party comes within the
definition of “employee” as that term is defined by the Code,
and secondly, the act charged as ULP must fall under the
prohibition of Art. 248 (acts of the employer) or 249 (acts of the
union).
Nonetheless, specific denomination of the act is not necessary
to prosecute ULP. In resolving the question of whether or not
an employer committed the act charged in the complaint, it is
of no consequence, either as a matter of procedure or of
substantive law, how the act is denominated—whether as a
restraint, interference or coercion, or a discriminatory
discharge, or as a refusal to bargain, or even as a combination
of any or all of these. For however the employer’s conduct may
be characterized, what is important is that it constituted an
unfair labor practice.
2. ILO CONVENTION NO. 98
Article 1
1. Workers shall enjoy adequate protection against acts of anti-union
discrimination in respect of their employment.
2. Such protection shall apply more particularly in respect of acts
calculated to--
(a) make the employment of a worker subject to the condition that he
shall not join a union or shall relinquish trade union membership;
(b) cause the dismissal of or otherwise prejudice a worker by reason of
union membership or because of participation in union activities
outside working hours or, with the consent of the employer, within
working hours.
Article 2
50 | P LATON
 from the established rule that labor law does not authorize the
1. Workers' and employers' organisations shall enjoy adequate substitution of the judgment of the employer in the conduct of
protection against any acts of interference by each other or each its business. Such management prerogative may be availed of
other's agents or members in their establishment, functioning or
without fear of any liability so long as it is exercised in good
administration.
faith for the advancement of the employers' interest and not
2. In particular, acts which are designed to promote the establishment for the purpose of defeating or circumventing the rights of
of workers' organisations under the domination of employers or employees under special laws or valid agreement and are not
employers' organisations, or to support workers' organisations by exercised in a malicious, harsh, oppressive, vindictive or
financial or other means, with the object of placing such organisations wanton manner or out of malice or spite.
under the control of employers or employers' organisations, shall be
deemed to constitute acts of interference within the meaning of this 3.4 Forced Vacation Leave
Article.
Where the vacation leave without pay, which the employer
3. NO U.L.P.: ILLUSTRATIVE INSTANCES OF VALID EXERCISE OF
requires employees to take in view of the economic crisis, is
MANAGEMENT RIGHTS
neither malicious, oppressive or vindictive, ULP is not
committed.
The law on “unfair labor practices” is not intended to deprive
employers of their fundamental right to prescribe and enforce
3.5 Issuance of Rules or Policy
such rules as they honestly believe to be necessary to the
proper, productive and profitable operation of their business.
Every business enterprise endeavors to increase its profits. In
Nor are his rights of selection and discharge of his employees
the process, it may adopt or devise means designed towards
wrested from him by the Act. Rothenberg stresses that an
that goal.
employer, subject to the provisions of his contract with his
employees, has the same full measure of control over his
Even as the law is solicitous of the welfare of the employees, it
business as he had prior to the enactment of the Wagner Act
must also protect the right of an employer to exercise what are
and undiminished by the amended Act. The only condition
clearly management prerogatives. The free will of management
imposed upon this control is that it must not be exercised so as
to conduct its own business affairs to achieve its purpose
to effect a violation of the Act and its several prohibitions.
cannot be denied.
3.1 Personnel Movements
3.6 Taking Action Against Slowdown
As a rule, it is the prerogative of the company to promote,
Employees have the right to strike, but they have no right to
transfer or even demote its employees to other positions when
continue working on their own terms while rejecting the
the interests of the company reasonably demand it. Unless
standards desired by their employer. Hence, an employer does
there are instances which directly point to interference by the
not commit an unfair labor practice by discharging employees
company with the employees' right to self-organization, the
who engaged in a slowdown, even if their object is a pay
transfer of private respondent should be considered as within
increase which is lawful. Moreover, an employer does not
the bounds allowed by law. Furthermore, although private
violate the act by discharging only some of the employees who
respondent was transferred to a lower position, his original
participate in the slowdown where he discharges them to serve
rank and salary remained undiminished.
as an “example” to stop the slowdown and not for
discriminatory reasons.
It is the company’s prerogative to promote its employees to
managerial positions. Managerial positions are offices which
4. DETERMINATION OF VALIDITY
can only be held by persons who have the trust of the
corporation and its officers. It should not be prevented from
Necessarily, determining the validity of an employer’s act
doing so. A promotion which is manifestly beneficial to an
involves an appraisal of his motives.
employee should not give rise to a gratuitous speculation that
such a promotion was made simply to deprive the union of the An employer may treat freely with an employee and is not obliged to
membership of the promoted employee. support his actions with a reason or purpose. However, where the
attendant circumstances, the history of employer's past conduct and
3.2 Acceptance of Mass Resignation like considerations, coupled with an intimate connection between the
employer's action and the union affiliations or activities of the
Acceptance of a voluntary resignation is not ULP. In a Philippine particular employee or employees taken as a whole raise a suspicion as
Airlines case the court said that the pilots’ "protest to the motivation for the employer's action, the failure of the employer
to ascribe a valid reason therefor may justify an inference that his
retirement/resignation" was not a concerted activity which was
unexplained conduct in respect of the particular employee or
protected by law. They did not assume the status of strikers. employees was inspired by the latter's union membership or activities.
They cannot, therefore, validly claim that the company
committed unfair labor practice. When the pilots voluntarily While the presence of this mere suspicion neither takes the place of
terminated their employment relationship with the company, evidence that the employer's conduct was improperly motivated nor
they cannot claim that they were dismissed. dispenses with the requirement of proof of the fact, such suspicion,
when coupled with other facts which in themselves, might have been
3.3 Grant of Profit-Sharing Benefits to Non-Union Members inadequate to support an adverse finding against the employer, may
suffice to sustain a finding that the employer's action violated the
prohibition of the Act.
Management has the prerogative to regulate, according to its
discretion and judgment, all aspects of employment. This flows
5. FIRST U.L.P.: INTERFERENCE (ART. 248[a])

51 | P LATON

In summarized form, the nine U.L.P. acts of an employer under
Art. 248 are: (1) Interference, (2) “yellow dog” condition, (3)
contracting out, (4) company unionism, (5) discrimination, (6)
discrimination because of testimony, (7) violation of duty to
bargaining, (8) paid negotiation, and (9) violation of CBA.
5.1 Interrogation
Persistent interrogation of employees to elicit information as to
what had happened at union meetings and the identity of the
active union employees was held as violative of organizational
rights of employees.
In order that the questioning of an employee concerning his
union activities would not be deemed coercive, the employer
must communicate to the employee the purpose of the
questioning, assure him that no reprisal would take place, and
obtain his participation on a voluntary basis. In addition,
questioning must also occur in a context free from employer
hostility to union organization and must not itself be coercive in
nature.
5.2 U.L.P. Even Before Union is Registered
An employer who interfered with the right to self-organization
before the union is registered can be held guilty of ULP.
5.3 Prohibiting Organizing Activities
A rule prohibiting solicitation of union membership in company
property is unlawful if it applies to non-working time as well as
to working time.
Where majority of the employees live on the premises of the
employer and cannot be reached by any means or procedures
practically available to union organizers, the employer may be
required to permit non-employee union organizers to come
within its premises, in order to solicit employees.
However, in the absence of showing that the illegal dismissal
was dictated by anti-union motives, the same does not
constitute an unfair labor practice as would be a valid ground
for strike. The remedy is an action for reinstatement with
backwages and damages.
We have held that unfair labor practice cases are not, in view of
the public interest involved, subject to compromises.
5.4 Violence or Intimidation
An employer unlawfully coerced employees by directing two
individuals to his office at gun point on the day of
representation election after the individuals had informed the
employer that they were on the premises to vote in the
election.
5.5 Espionage and Surveillance
One form of “pressure” which some over-eager employers
sometimes use is the practice of spying upon employees. This
device consists of using one or a small group of employees, or
other agents, inspired by profit opportunism, vengeance or
come kindred human frailty to use his or their access to
employees’ quarters and affairs for the purpose of spying upon
fellow employees and reporting back to the employer. It is
plainly evident that such conduct on the employer’s part,
however subtly it may be accomplished, constitutes
interference with the employee’s exercise of their rights.
Inasmuch as the “pressure” results more from the employees’
apprehension than from the employer’s purpose in spying and
the use of its result, it has been held to be no answer to a
charge of unfair labor practice that the fruits of espionage were
not used.
When an employer engages in surveillance or takes steps
leading his employees to believe it is going on, a violation
results because the employees come under threat of economic
coercion or retaliation for their union activities. Unlawful
surveillance was properly found where supervisors were
present near the place where union meeting was being held to
check the names of employees leaving the meeting.
5.6 Economic Inducements
A violation results from an employer’s announcement of
benefits prior to a representation election, where it is intended
to induce the employees to vote against the union.
It is well-settled rule that while a representation election is
pending, the conferral of employee benefits for the purpose of
inducing the employees to vote against a union is unlawful.
5.7 Employer’s Expression of Opinion; Totality of Conduct
Doctrine
The doctrine holds that the culpability of employer’s remarks
was to be evaluated not only on the basis of their implications,
but against the background of and in conjunction with collateral
circumstances.
(1) Letter to individual employees—It is an act of interference for the
employer to send a letter to all employees notifying them to return to
work at a time specified therein, otherwise new employees would be
engaged to perform their jobs. Individual solicitation of the employees
or visiting their homes, with the employer or his representative urging
the employees to cease union activity or cease striking, constitutes
unfair labor practice. All the above-detailed activities are unfair labor
practices because they tend to undermine the concerted activity of the
employees, an activity to which they are entitled free from the
employer's molestation.
(2) Strike-breaking—When the respondent company offered
reinstatement and attempted to "bribe" the strikers with "comfortable
cots," "free coffee and occasional movies," "overtime" pay for "work
performed in excess of eight hours," and "arrangements" for their
families, so they would abandon the strike and return to work, they
were guilty of strike-breaking and/or union-busting and, consequently,
of unfair labor practice.
(3) Acts violative of right to organize—Violative of the right to organize,
form and join labor organizations are the following acts: the offer of a
Christmas bonus to all "loyal" employees of a company shortly after the
making of a request by the union to bargain; wage increases given for
the purpose of mollifying employees after the employer has refused to
bargain with the union, or for the purpose of inducing striking
employees to return to work; the employer's promises of benefits in
return for the strikers' abandonment of their strike in support of their
union; and the employer's statement, made about 6 weeks after the
strike started, to a group of strikers in a restaurant to the effect that if
the strikers returned to work, they would receive new benefits in the
form of hospitalization, accident insurance, profit-sharing, and a new
building to work in.
52 | P LATON
(4) Test of interference or coercion—The test of whether an employer
has interfered with and coerced employees 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, and 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.
(5) The “totality of conduct” doctrine—the letters of the company
president to the individual strikers should not be considered by
themselves alone but should be read in the light of the preceding and
subsequent circumstances. The letters should be interpreted according
to the "totality of conduct doctrine," whereby the culpability of an
employer's remarks has to be evaluated not only on the basis of their
implicit implications, but were to be appraised against the background
of and in conjunction with collateral circumstances.
5.8 Mass Layoff Amounting to U.L.P.
A company’s capital reduction efforts, to camouflage the fact
that it has been making profits, and to justify the mass lay-off of
its employees especially union members, were an unfair labor
practice which can neither be countenanced nor condoned.
5.9 Lockout or Closure Amounting to U.L.P.
A lockout, actual or threatened, as a means of dissuading the
employees from exercising their rights under the Act is clearly
an unfair labor practice. However, to hold an employer who
actually or who threatens to lock out his employees guilty of a
violation of the Act, the evidence must establish that the
purpose thereof was to interfere with the employees’ exercise
of their rights.
An honest closing of one’s plant is not a violation of the Act.
However, cessation of operations, actual or threatened, does
constitute an unfair labor practice, if it is, directly or indirectly,
expressly or by innuendo, calculated or employed to interfere
with the employees’ rights under the Act. Proof of the
employer’s state of mind, unless it is expressed, is often very
difficult. However, it may be proven by circumstantial evidence.
The rule is that it is unlawful for the employer to threaten its
employees with moving or shutting down the plant and
consequent loss of employment, as the result of their support
for the union.
An employer which closed its business to put an end to a
union’s activities, and which made no effort to allow the
employees’ attempt to exercise their right to self-organization
and collective bargaining, and even threatening the employees
that they would lose their jobs if they did not cease affiliation
with the union, commits unfair labor practice.
5.9a Sale in Bad Faith
Where the sale of a business enterprise was attended with bad faith,
there is no need to consider the applicability of the rule that labor
contracts being in personam are not enforceable against the transferee.
The latter is in the position of tort-feasor having been a party likewise
responsible for the damage inflicted on the members of the aggrieved
union and therefore cannot justly escape liability.
It is irrational to suppose that a purchaser of a manufacturing
enterprise is not aware of the labor-management situation in
the firm he bought.
5.9b Assumption of Obligations by New Company
5.10 Successor Employer; Piercing the Corporate Veil
Closure is likewise not legal and the employees cannot be
separated if, in fact, there is no closure because the “closed”
department or company reappeared although under a new
name. If the “new” company is, for instance, engaging in the
same business as the closed company or department, or is
owned by the same people, and the “closure” is calculated to
defeat the workers’ organizational right, then, the closure may
be declared a “subterfuge” and the doctrine of successor
employer will be applied, that is, the new company will be
treated as a continuation or successor of the one that closed. If
such be the case, the separated employees will have to be
employed in the “new” firm because in the first place they
should not have been separated at all.
The “successor employer” ruling is an enforcement of the legal
recourse called “piercing the veil of corporate entity.”
Under the doctrine of piercing the veil of corporate entity, when valid
grounds therefore exist, the legal fiction that a corporation is an entity
with a juridical personality separate and distinct from its members or
stockholders may be disregarded. In such cases, the corporation will be
considered as a mere association of persons. The members or
stockholders of the corporation will be considered as the corporation,
that is, liability will attach directly to the officers and stockholders. The
doctrine applies when the corporate fiction is used to defeat public
convenience, justify wrong, protect fraud, or defend crime, or when it is
made as a shield to confuse the legitimate issues or where a
corporation is the mere alter ego or business conduit of a person, or
where the corporation is so organized and controlled and its affairs are
so conducted as to make it merely an instrumentality, agency, conduit
or adjunct of another corporation.
6. SECOND U.L.P.: “YELLOW DOG” CONDITION (ART. 248[b])
Contract provisions whereby an employee agrees that during
the period of his employment he will not become a member of
a labor union have been outlawed in the United States, by
legislation in some states, as well as by Federal legislation.
The “yellow dog” contract is a promise exacted from workers as
a condition of employment that they are not to belong to, or
attempt to foster, a union during their period of employment.
An American scheme, the typical yellow dog contract is an at-
will employment agreement which contains, in addition to the
usual provisions for employment, the following three
provisions: (1) a representation by the employee that he is not
a member of a labor union; (2) a promise by the employee not
to join a labor union; (3) a promise by the employee that, upon
joining a labor union, he will quit his employment.
7. THIRD U.L.P.: CONTRACTING OUT (ART. 248[c])
Contracting out itself, is not ULP; it is the ill intention that
makes it so.
An employer’s contracting out of work is itself an unfair labor
practice where motivated by a desire to prevent his employees
from organizing and selecting a collective bargaining
53 | P LATON
representative, rid himself of union men, or escape his
statutory duty to bargain collectively with his employees’
bargaining representative.
As we have previously held, the company can determine in its best
business judgment whether it should contract out the performance of
some of its work for as long as the employer is motivated by good faith,
and the contracting out must not have been resorted to to circumvent
the law or must not have been the result of malicious or arbitrary
action.
7.1 Contracting out restricted by CBA
7.2 Runaway Shop
Resorting to a runaway shop is a U.L.P. A “runaway” shop is
defined as an industrial plant moved by its owners from one
location to another to escape union labor regulations or state
laws, but the term is also used to describe a plant removed to a
new location in order to discriminate against employees at the
old plant because of their union activities. Moreover, it has
been held that where a plant removal is for business reasons
but the relocation is hastened by anti-union motivation, the
early removal is an unfair labor practice. It is immaterial that
the relocation is accompanied by a transfer of title to a new
employer who is an alter ego of the original employer.
Runaway shop refers to business relocation animated by anti-
union animus. Sameness of business is not reason enough to
show run-away shop to pierce the veil of separate corporate
entity.
A "runaway shop" is defined as an industrial plant moved by its owners
from one location to another to escape union labor regulations or state
laws, but the term is also used to describe a plant removed to a new
location in order to discriminate against employees at the old plant
because of their union activities. It is one wherein the employer moves
its business to another location or it temporarily closes its business for
anti-union purposes. A "runaway shop" in this sense, is a relocation
motivated by anti-union animus rather than for business reasons.
Mere ownership by a single stockholder or by another corporation of all
or nearly all of the capital stock of a corporation is not of itself sufficient
ground for disregarding the separate corporate personality.
This fiction of corporate entity can only be disregarded in certain cases
such as when it is used to defeat public convenience, justify wrong,
protect fraud, or defend crime. To disregard said separate juridical
personality of a corporation, the wrongdoing must be clearly and
convincingly established.
8. FOURTH U.L.P.: COMPANY-DOMINATION OF UNION (ART.
248[d])
Domination of a labor union usually manifests in the following
forms:
(a) Initiation of the company union idea. This may further occur
in three styles: (1) outright formation by the employer or his
representatives; (2) employee formation on outright demand or
influence by employer; and (3) managerially motivated
formation by employees.
(b) Financial support to the union. An employer commits unfair
labor practice if he defrays the union expenses or pays the
attorney’s fees to the attorney who drafted the constitution
and by-laws of the union.
(c) Employer encouragement and assistance. Immediately
granting the union exclusive recognition as a bargaining agent
without determining whether the union represents the
majority of employees is an illegal form of assistance
amounting to unfair labor practice.
(d) Supervisory assistance. This takes the form of soliciting
membership, permitting union activities during working time or
coercing employees to join the union by threats of dismissal or
demotion.
An employer was held to have unlawfully aided a union by
assisting its attempt to secure authorization cards from
employees and by executing a contract with such union when it
was not the authorized representative of the employees.
A labor union is company-dominated where it appears that key officials
of the company have been forcing employees belonging to a rival labor
union to join the former under pain of dismissal should they refuse to
do so; that hey officials of the company, as well as its legal counsel,
have attended the election of officers of the former union; that officers
and members of the rival union were dismissed allegedly pursuant to a
retrenchment policy of the company, after they had presented
demands for the improvement of the working conditions despite its
alleged retrenchment policy; and that, after dismissal of the aforesaid
officers of the rival labor union, the company engages the services of
new laborers.
9. FIFTH U.L.P.: DISCRIMINATION (ART. 248[e])
What the law prohibits is discrimination to encourage or
discourage membership in a labor organization. Where the
purpose is to influence the union activity of employees, the
discrimination is unlawful. But discrimination is not the same as
differentiation or classification. For instance, it is common
management practice to classify jobs and grant them varying
levels of pay benefits package. These are valid differentiations
that recognize differences in job requirements or contributions.
They are not necessarily discrimination classifiable as ULP.
Under the Industrial Peace Act, to constitute an unfair labor practice,
the discrimination committed by the employer must be in regard to the
"hire or tenure of employment or any term or condition of employment
to encourage or discourage membership in any labor organization." The
exaction, by the Company, from the strikers returning to work, of a
promise not to destroy company property and not to commit acts of
reprisal against the Union-members who did not participate in the
strike, cannot be considered as intended to encourage or discourage
Union-membership. Taking the circumstances surrounding the
prescribing of that condition, the requirement by the Company is
actually an act of self-preservation and designed to insure the
maintenance of peace and order in the Company premises.
Discouraging membership in a labor organization includes not
only discouraging adhesion to union membership but also
discouraging participation in union activities such as legitimate
strike.
9.1 Discrimination in Work Quota
Considered in the light of the anti-union attitude exhibited by
respondent company in transferring union president Leones from the
main office in Manila to Cebu when the union was still being organized,
and which act was found by the NLRC as constituting unfair labor
practice and union-busting in connection with the application for
clearance to terminate Leones filed by respondent company, 34 the
uneven application of its marketing plan by respondent company is
patently an act of discrimination, considered as an unfair labor practice
under Art. 248(e) of the Labor Code.
54 | P LATON

9.2 Discrimination in Bonus Allocation or Salary Adjustments
There is unfair and unjust discrimination in the granting of
salary adjustments where the evidence shows that (a) the
management paid the employees of the unionized branch; (b)
where the salary adjustments were granted to employees of
one of its nonunionized branches although it was losing in its
operations; and (c) the total salary adjustments given every ten
of its unionized employees would not even equal the salary
adjustments given one employee in the nonunionized branch.
9.3 Discrimination in Layoff or Dismissal
Even where business conditions justified a layoff of employees,
unfair labor practices in the form of discriminatory dismissal
were found where only unionists were permanently dismissed
while nonunionists were not.
Labor is a person's means of livelihood. He cannot be deprived of his
labor or work without due process of law. Retrenchment very heart of
one's employment. While the right of strikes at the very heart of an
employer to dismiss an employee is conceded in a valid retrenchment,
the right differs from and should not be confused with the manner in
which such right is exercised. It should not be oppressive and abusive
since it affects one's person and property. Due process of law demands
nothing less.
9.4 Discrimination in Regularization
9.5 Discrimination by Blacklisting
A blacklist has been defined as “a list of persons marked out for
special avoidance, antagonism or enmity on the part of those
who prepare the list, or those among whom it is intended to
circulate, as where a trade union ‘blacklists’ workmen who
refuse to conform to its rules, or where a list of insolvent or
untrustworthy persons is published by a commercial agency or
mercantile association.”
When it is resorted to by a combination of employers to
prevent employment of employees for union activities, it may
constitute unfair labor practice. Aside from constituting an
unfair labor practice, it may give rise to a right of action for
damages by the employees prejudice under Article 28 of the
new Civil Code.
In its broad sense, however that is, in the sense of the employer’s
circulating a list of former employees of notorious laziness or
negligence in the performance of their duties or of incorrigible
propensity to create trouble in the place of employment, it may be a
proper measure for the protection of employers. Thus, it has been held
that unless the action of the employers in combining or in passing
communications among themselves for the purpose of excluding
unwanted workers from employment, constitutes a libel or slander
(and according to some decisions the defamation, to be actionable,
must be malicious), the excluded employee possesses no right of action
because the employers’ community of interest acts both to justify the
combination and to privilege the communication.
9.6 Indirect Discrimination
It is a well settled rule of law that what is prohibited to be done
directly shall not be allowed to be accomplished indirectly.
Thus, the following acts have been held unfair labor practices:
(1) the dismissal of a laborer in account of union activities of his
brother; (2) the discharge of an employee due to the union
activities of the wife; and (3) the discharge of a wife due to the
union activities of the husband.
9.7 Test of Discrimination
For the purpose of determining whether or not a discharge is
discriminatory, it is necessary that the underlying reason for the
discharge be established. The fact that a lawful cause for
discharge is available is not a defense where the employee is
actually discharged because of his union activities. If the
discharge is actually motivated by a lawful reason, the fact that
the employee is engaged in union activities at the time will not
lie against the employer and prevent him from the exercise of
his business judgment to discharge an employee for cause.
Where circumstances establish a discriminatory motive on the
part of the employer, the assignment of a just cause will be
unavailing. If it can be established that the true and basic
inspiration for the employer’s act is derived from the
employees’ union affiliations or activities, the assignment by
the employer of another reason, whatever its semblance of
validity, is unavailing.
An interference that the discharge of an employee was
motivated by his union activity must be based upon evidence,
direct or circumstantial, not upon mere suspicion.
9.8 Constructive Discharge
Where the employer prohibits employees from exercising their
rights under the Act, on pain of discharge, and the employee
quits as a result of the prohibition, a constructive discharge
occurs, which may be remedies in an unfair labor practice
proceeding.
9.9 Discharge Due to Union Activity, A Question of Fact
The question of whether an employee was discharged because of his
union activities is essentially a question of fact as to which the findings
of the Court of Industrial Relations are conclusive and binding if
supported by substantial evidence considering the record as a whole.
This is so because the Industrial Court is governed by the rule of
substantial evidence, rather than by the rule of preponderance of
evidence as in any ordinary civil cases. Substantial evidence has been
defined as such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion. It means such evidence which
affords a substantial basis from which the fact in issue can be
reasonably inferred.
9.10 Valid Discrimination: Union Security Clause
There is a form of encouragement of union membership which
is not considered ULP. This is where Management and Union
enter into a collective bargaining agreement containing a union
security clause. Despite variations and limitations, a union
security clause essentially requires membership in the union so
that an employee may retain his job and the union’s existence
is assured.
“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. It is indeed
compulsory union membership whose objective is to assure
55 | P LATON
continued existence of the union. In a sense, there is
discrimination when certain employees are obliged to join a
particular union. But it is discrimination favouring unionism; it is
a valid kind of “discrimination.”
The employer is not guilty of unfair labor practice if it merely
complies in good faith with the request of the certified union
for the dismissal of employees expelled from the union
pursuant to the union security clause in the collective
bargaining agreement.
9.10a Kinds of Union Security Agreements
Closed-shop: Only union members can be hired by the company
and they must remain as union members to retain employment
in the company.
Union Shop: Nonmembers may be hired, but to retain
employment must become union members after a certain
period. The requirement applies to present and future
employees.
Modified Union Shop: Employees who are not union members
at the time of signing the contract need not join the union, but
all workers hired thereafter must join.
Maintenance of Membership Shop: No employee is compelled
to join the union, but all present or future members must, as a
condition of employment, remain in good standing in the
union.
Exclusive Bargaining Shop: The union is recognized as the
exclusive bargaining agent for all employees in the bargaining
unit, whether union members or not.
Bargaining for Members Only: The union is recognized as the
bargaining agent only for its own members
Agency Shop: An agreement whereby employees must either
join the union or pay the union as exclusive bargaining agent a
sum equal to that paid by the members. This is directed against
“free rider” employees who benefits from union activities
without contributing financially to union support. It prevents
situation where non-union members enrich themselves at the
expense of union members. Another term for agency shop
agreement is “maintenance of treasury shop.”
The above variations are opposite of open shop, an
arrangement which does not require union membership as a
condition of employment.
9.10b Validity of Closed-Shop Agreement
It is true that disaffiliation from a labor union is not open to legal
objection. It is implicit in the freedom of association ordained by the
Constitution. But this Court has laid down the ruling that a closed shop
is a valid form of union security, and such provision in a collective
bargaining agreement is not a restriction of the right of freedom of
association guaranteed by the Constitution.
It is the policy of the State to promote unionism to enable the workers
to negotiate with management on the same level and with more
persuasiveness than if they were to individually and independently
bargain for the improvement of their respective conditions. To this end,
the Constitution guarantees to them the rights "to self-organization,
collective bargaining and negotiations and peaceful concerted actions
including the right to strike in accordance with law." There is no
question that these purposes could be thwarted if every worker were
to choose to go his own separate way instead of joining his co-
employees in planning collective action and presenting a united front
when they sit down to bargain with their employers. It is for this reason
that the law has sanctioned stipulations for the union shop and the
closed shop as a means of encouraging the workers to join and support
the labor union of their own choice as their representative in the
negotiation of their demands and the protection of their interest vis-a-
vis the employer.
A closed-shop agreement is an agreement whereby an employer binds
himself to hire only members of the contracting union who must
continue to remain members in good standing to keep their jobs. It is
"the most prized achievement of unionism." It adds membership and
compulsory dues. By holding out to loyal members a promise of
employment in the closed-shop, it welds group solidarity. It is a very
effective form of union security agreement.
9.10c Advantages and Disadvantages of Closed-Shop
Agreement
A closed-shop agreement is advantageous because it—
a. Increases the strength and bargaining power of labor
organizations.
b. Prevents non-union workers from sharing in the benefits of
the union’s activities without also sharing its obligations.
c. Prevents the weakening of labor organizations by
discrimination against union members.
d. Eliminates the lowering of standards caused by competition
with non-union workers.
e. Enables labor organizations effectively to enforce collective
agreements.
f. Facilitates the collection of dues and the enforcement of
union rules.
g. Creates harmonious relations between the employer and
employee.
But it is disadvantageous as it—
a. Results in monopolistic domination of employment by labor
organizations.
b. Interferes with the freedom of contract and personal liberty
of the individual worker.
c. Compels employers to discharge all non-union workers
regardless of efficiency, length of service, etc.
d. Facilitates the use of labor organizations by unscrupulous
union leaders for the purpose of extortion, restraint of trade,
etc.
e. Denies to non-union workers equal opportunity for
employment.
f. Enables union to charge exorbitant dues and initiation fees.
9.10d Valid Dismissal Because of Application of Union Security
Clause
56 | P LATON
Union security clauses in collective bargaining agreements, if freely and
voluntarily entered into, are valid and binding. Corollary, dismissals
pursuant to union security clauses are valid and legal subject only to
the requirement of due process, that is, notice and hearing prior to
dismissal. Thus, the dismissal of an employee by the company pursuant
to a labor union's demand in accordance with a union security
agreement does not constitute unfair labor practice.
Even if the union members were unaware of the closed-shop
stipulation in the CBA, they were bound by it. Neither their ignorance
of, nor their dissatisfaction with its terms and conditions would justify
breach thereof or the formation by them of a union of their own. This is
so because a union member who is employed under an agreement
between the union and his employer is bound by the provisions
thereof, since it is a joint and several contract of the members of the
union entered into by the union as their agent.
This provision is an indirect restriction on the right of an employee to
self-organization. It is a solemn pronouncement of a policy that while
an employee is given the right to join a labor organization, such right
should only be asserted in a manner that will not spell the destruction
of the same organization The law requires loyalty to the union on the
part of its members in order to obtain to the full extent its cohesion
and integrity.
9.10e Dismissal Pursuant to Closed-Shop Clause Must Clearly
Appear in Contract
In order to validly dismiss an employee by force of the union
security clause, there should be a clear and unequivocal
statement that the loss of the status of a member of good
standing in the union shall be a cause for dismissal.
Union shop, as with closed-shop provisions, should be strictly
construed against the existence of union shop. Sometimes
harsh and onerous, such provisions should not be extended
beyond the explicit coverage of their terms, and will not be
deemed to authorize by implication any dismissal of employees
already working before the agreement was made.
9.10f Due Process Required in Enforcing Union Security Clause;
Intra-union Matter becomes Termination Dispute with
Employer
Although a union security clause in a CBA may be validly
enforced and that dismissal pursuant thereto may likewise be
valid, this does not erode the fundamental requirement of due
process. The reason behind the enforcement of union security
clauses which is the sanctity and inviolability of contracts
cannot override one's right to due process.
9.10g Liability of Union to Pay Wages and Fringe Benefits of
Illegally Dismissed Employee
9.10h Employer in Good Faith Not Liable
9.10i Closed-Shop, To Whom Not Applicable
All employees in the bargaining unit covered by a closed-shop
agreement are subject to its terms, except the following: (1)
any employee who at the time the closed-shop agreement
takes effect is a bona fide member of religious organization
which prohibits its members from joining labor unions on
religious grounds; (2) employees already in the service and
already members of a labor union or unions other than the
majority union at the time the closed-shop agreement took
effect; (3) Confidential employees who are excluded from the
rank-and-file bargaining unit; and (4) employees excluded from
the closed-shop by express terms of the agreement.
It is well settled in this jurisdiction that, in the absence of a manifest
intent to the contrary, "closed shop" provisions in a collective
bargaining agreement "apply only to persons to be hired or to
employees who are not yet members of any labor organization" and
that said provisions of the agreement are not applicable to those
already in the service at the time of its execution. To hold that the
employees in a company who are members of a minority union may be
compelled to disaffiliate from their union and join the majority or
contracting union, would render nugatory the right of all employees to
self organization and to form, join or assist labor organizations of their
own choosing, a right guaranteed by the Industrial Peace Act (sec. 3,
Rep. Act No. 875) as well as by the Constitution (Art. III, sec. 1[6]).
9.10j Agency Fee Instead of Union Membership
The employees who are benefitting from the CBA, without
being members of the bargaining union, may be required to pay
an agency fee. The collection of agency fees in an amount
equivalent to union dues and fees, from employees who are
not union members, is recognized by Article 248 (e) of the
Labor Code. A written authorization from the non-union
employee is imposed. The employee's acceptance of benefits
resulting from a collective bargaining agreement justifies the
deduction of agency fees from his pay and the union's
entitlement thereto. In this aspect, the legal basis of the union's
right to agency fees is neither contractual nor statutory, but
quasi-contractual, deriving from the established principle that
non-union employees may not unjustly enrich themselves by
benefiting from employment conditions negotiated by the
bargaining union.
The justification of collecting agency fee is the union’s
accomplishment in having negotiated a CBA in behalf of the
employees. The union served as agent of the employees, and
the agency fee is recognition of the agent’s efforts. The fee is
collectible only from employees deriving economic benefits
from the union-negotiated CBA.
10. SIXTH U.L.P.: DISCRIMINATION BECAUSE OF TESTIMONY
(ART. 248[f])
The law protects not only the employees’ right to form, join, or
assist labor organizations but also their right to testify on
matters covered by the Code. If this right is not protected, the
right to self-organization will be indirectly defeated because the
employees will fear their employer’s reprisal. By protecting the
employee’s right to testify, the law therefore shields the
workers’ right to self-organization from indirect assault by the
employer. Thus, it is ULP “to dismiss, discharge, or otherwise
prejudice or discriminate against an employee for having given
or being about to give testimony under this Code.
Employer’s reprisal against a testifying employee is ULP
because, furthermore, it violates the right to engage in
concerted activity, a right included in the right to self-organize
(Art. 246) and reiterated in Article 263(b). Concerted activity
does not always require a number of people acting in unison.
An employee acting alone in pursuing a group interest may be
said to be doing a concerted activity which the employer may
not curtail.
10.1 Refusal to Testify
57 | P LATON
Clearly, the efforts to justify petitioner's dismissal — on top of the
private respondent's scheme of inducing his employees to sign an
affidavit absolving him from possible violations of the Labor Code —
taints with evident bad faith and deliberate malice petitioner's
summary termination from employment. The pivotal question in any
case where unfair labor practice on the part of the employer is alleged
is whether or not the employer has exerted pressure, in the form of
restraint, interference or coercion, against his employee's right to
institute concerted action for better terms and conditions of
employment. Without doubt, the act of compelling employees to sign
an instrument indicating that the employer observed labor standards
provisions of law when he might have not, together with the act of
terminating or coercing those who refuse to cooperate with the
employer's scheme constitutes unfair labor practice. The first act clearly
preempts the right of the hotel's workers to seek better terms and
conditions of employment through concerted action.
10.2 Labor Standards Violation May Lead to a Srike
Art. 118. Retaliatory measures. It shall be unlawful for an
employer to refuse to pay or reduce the wages and benefits,
discharge or in any manner discriminate against any employee
who has filed any complaint or instituted any proceeding under
this Title or has testified or is about to testify in such
proceedings.
And yet, Articles 118 and 248 are related. They both speak of
employee’s filing a complaint or giving testimony. But the
subject of complaint or testimony under Article 118 is limited to
matters about wages, the subject of Title I of Book III. Under
Article 248, on the other hand, the subject testified to is any
issue covered by the Code. Both articles likewise speak of
retaliation by the employer. Retaliation is wrong, and more
than that, Article 248 considers it an unfair labor practice
which, under Art. 263, is a legal reason for employees to hold a
strike.
11. SEVENTH U.L.P.: VIOLATION OF THE DUTY TO BARGAIN
(ART. 248[g])
The seventh ULP act under Art. 248 refers to violating the duty
to bargain. See Articles 252 and 253
12. EIGHT U.L.P.: PAID NEGOTIATION (ART. 248[h])
Self-organization and collective bargaining are treasured rights
of workers. The law zealously shields them from corruption. It is
a punishable act of ULP for the employer to pay the union or
any of its officers or agents any negotiation fee or attorney’s
fee as part of settlement in collective bargaining or any labor
dispute. To do so is not unlawful. It is ethically reprehensible.
13. NINTH U.L.P.: VIOLATION OF THE CBA (ART. 248[i])
After a CBA is concluded, its implementation follows.
Implementation is still part of the bargaining process which, it
should be recalled, rests on the parties’ “duty to bargain.” The
duty to bargain, it should also be recalled, requires good faith.
And good faith implies faithful observance of what has been
agreed upon. It logically follows that noncompliance with the
agreement is non-observance of good faith in bargaining;
therefore, the noncompliance amounts to ULP.
But such violation, to constitute ULP, must be “gross,”
according to Art. 261.
14. RELIEF IN U.L.P. CASES
14.1 Cease and Desist Order
To support a cease and desist order, the record must show that
the restrained misconduct was an issue in the case; that there
was a finding of fact of said misconduct and such finding of fact
was supported by evidence. The Court is not authorized to issue
blank cease and desist orders, but must confine its injunction
orders to specific act or acts which are related to past
misconduct. A cease and desist order is not invalidated because
the act complained of was voluntarily discontinued prior to or
during the course of the proceedings. But if the act complained
of happened so long a time that there is no longer any threat or
probability of a recurrence, a cease and desist order will not be
justified.
14.2 Affirmative Order
The Court does not only have the power to issue negative or
prohibitive orders but also affirmative or positive orders.
The order may usually direct the full reinstatement of the
discharged employees to their substantially equivalent position
without prejudice to their seniority and other rights and
privileges.
14.3 Order to Bargain; Mandated CBA
Likewise, when an employer has failed or refused to bargain
with the proper bargaining agent of his employees, the Court
may, in addition to the usual cease and desist orders, issue an
affirmative order to compel the respondent to “bargain” with
the bargaining agent.
14.4 Disestablishment
Where the employer had initiated, dominated or assisted in or
interfered with the formation or establishment of any labor
organization or contributed financial or other support to it, the
Court may issue, in addition to a cease and desist order, an
order directing the employer to withdraw all recognition from
the dominated labor union and to disestablish the same.
15. U.L.P. NOT SUBJECT TO COMPROMISE
Unfair labor practice cases are not, in view of the public interest
involved, subject to compromises. The relation between capital
and labor are not merely contractual. They are so impressed
with the public interest that labor contracts must yield to the
common good.
16. U.L.P. IN A GIVEN PERIOD SHOULD BE INCLUDED IN SINGLE
CHARGE
When a labor union accuses an employer of acts of unfair labor
practice allegedly committed during a given period of time, the
charges should include all acts of unfair labor practice
committed against any and all members of the Union during
that period. The Union should not, upon the dismissal of the
charges first preferred, be allowed to split its cause of action
and harass the employer with subsequent charges. based upon
acts committed during the same period of time.
17. EMPLOYER’S RESPONSIBILITY FOR U.L.P. ACTS BY
SUBORDINATE OFFICIALS
58 | P LATON

Knowledge by the employer of the employee’s improper acts:
Where it was established that the employer was aware of the
employee’s wrongdoing, his failure to prevent continuation of
the course of conduct or his failure to renounce any connection
or affinity therewith, invited the imputation of fault and
responsibility to the employer.
Continuity of improper conduct by employee: A single utterance
by a supervisory employee, whether improvident or deliberate
on the employee’s part, was not ordinarily and n absence of
proof of actual authority held to be sufficient to convict an
employer of an unfair labor practice; however, continued,
repeated or widespread activities by such supervisory
employee in affront of the rights of the body of employees was
deemed ample justification for ascribing knowledge and blame
to the employer.
Employer’s past policy and attitude: It has been held that,
among other things, the similarity between the past attitude or
policy of the employer and that of the offending supervisory
employee might, in certain cases, be indicative of a concert of
effort between the two.
________
Chapter III
UNFAIR LABOR PRACTICES OF LABOR ORGANIZATIONS
Article 249. Unfair labor practices of labor organizations. - It
shall be unfair labor practice for a labor organization, its
officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their right
to self-organization. However, a labor organization shall have
the right to prescribe its own rules with respect to the
acquisition or retention of membership;
(b) To cause or attempt to cause an employer to discriminate
against an employee, including discrimination against an
employee with respect to whom membership in such
organization has been denied or to terminate an employee on
any ground other than the usual terms and conditions under
which membership or continuation of membership is made
available to other members;
(c) To violate the duty, or refuse to bargain collectively with the
employer, provided it is the representative of the employees;
(d) To cause or attempt to cause an employer to pay or deliver
or agree to pay or deliver any money or other things of value, in
the nature of an exaction, for services which are not performed
or not to be performed, including the demand for fee for union
negotiations;
(e) To ask for or accept negotiation or attorney’s fees from
employers as part of the settlement of any issue in collective
bargaining or any other dispute; or
(f) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding,
only the officers, members of governing boards,
representatives or agents or members of labor associations or
organizations who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable. (As
amended by Batas Pambansa Bilang 130, August 21, 1981).
________
1. RESTRAINT OR COERCION BY LABOR ORGANIZATION;
INTERFERENCE BY UNION IS NOT ULP
A labor organization commits ULP when it restrains or coerces
employees in their right to self-organization. This provision of
Art. 249(a) parallels with Art. 248(a). But “interference” is left
out. This deliberate omission is “the equivalent of license of
labor organization to engage in those practices which, at the
hands of an employer, would constitute actionable unfair labor
practices by way of “interference.” In other words, a labor
organization may interfere in the employees’ right to self-
organization as long as the interference does not amount to
restraint or coercion.
Interference by a labor organization is not ULP because
interfering in the exercise of the right to organize is itself a
function of self-organizing.
1.1 Coercing Participation in Strike
The provision is violated by a union’s restraining or coercing an
employee in the exercise of his right to refuse to participate in
or recognize a strike. Similarly, violation is committed when a
union threatens employees with bodily harm in order to force
them to strike.
2. UNION-INDUCED DISCRIMINATION
The law forbids as ULP union attempts to cause an employer to
grant advantages for union members over non-members, for
union members in good standing over suspended or expelled
members, for union members over permit holders, for
members of the union executive board over more senior
employees, for members of one union over members of
another union, or for members of one local over members of
another local.
The forbidden discrimination may refer to terms of hiring or
firing, in layoff, in seniority, or in benefits.
2.1 Arbitrary Use of Union Security Clause
The broad rule is that the union has the right to determine its
membership and to prescribe the conditions for the acquisition
and retention thereof. Consequently, admission to membership
may not be compelled. This rule, however, is qualified in the
case of labor unions holding a monopoly in the supply of labor,
either in a given locality, or as regards a particular employer by
reason of a closed-shop or similar agreements. In such case,
qualified applicants may not be arbitrarily excluded from
membership and their admission may not be barred by
unreasonable rules.
It is well settled that labor unions are not entitled to arbitrarily exclude
qualified applicants for membership, and a closed-shop provision would
not justify the employer in discharging, or a union in insisting upon the
discharge of, an employee whom the union thus refuses to admit to
membership, without any reasonable ground therefor.4 Needless to
say, if said unions may be compelled to admit new members, who have
the requisite qualifications, with more reason may the law and the
courts exercise the coercive power when the employee involved is a
long standing union member, who, owing to provocations of union
59 | P LATON
officers, was impelled to tender his resignation, which he forthwith
withdrew or revoked. Surely, he may, at least, invoke the rights of those
who seek admission for the first time, and cannot arbitrarily he denied
readmission.
The Court stresses, however, that union security clauses are also
governed by law and by principles of justice, fair play, and legality.
Union security clauses cannot be used by union officials against an
employer, much less their own members, except with a high sense of
responsibility, fairness, prudence, and judiciousness.
A union member may not be expelled from her union, and
consequently from her job, for personal or impetuous reasons or for
causes foreign to the closed-shop agreement and in a manner
characterized by arbitrariness and whimsicality.
2.2 Not Disloyalty to Ask Help from Another Union
3. REFUSAL TO BARGAIN
ULP under Art. 249(c) is intended to insure that unions
approach the bargaining table with the same attitude of
willingness to agree as the Act requires of management.
A union violates its duty to bargain collectively by entering
negotiations with a fixed purpose of not reaching an agreement
or signing a contract.
4. FEATHERBEDDING AND MAKE-WORK ARRANGEMENTS
Art. 249(d) refers to featherbedding. “Featherbedding” is the
name given to employee practices which create or spread
employment by “unnecessarily” maintaining or increasing the
number of employees used, or the amount of time consumed,
to work on a particular job.
In spite of employee assertions that these so-called
featherbedding practices are directly related to job security,
health and safety, most courts at common law found these
practices to be economically wasteful and without any
legitimate employee justification.
________
Title VII
COLLECTIVE BARGAINING AND
ADMINISTRATION OF AGREEMENTS
ART. 250. Procedure in collective bargaining. - The following
procedures shall be observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall
serve a written notice upon the other party with a statement of
its proposals. The other party shall make a reply thereto not
later than ten (10) calendar days from receipt of such notice;
(b) Should differences arise on the basis of such notice and
reply, either party may request for a conference which shall
begin not later than ten (10) calendar days from the date of
request.
(c) If the dispute is not settled, the Board shall intervene upon
request of either or both parties or at its own initiative and
immediately call the parties to conciliation meetings. The Board
shall have the power to issue subpoenas requiring the
attendance of the parties to such meetings. It shall be the duty
of the parties to participate fully and promptly in the
conciliation meetings the Board may call;
(d) During the conciliation proceedings in the Board, the parties
are prohibited from doing any act which may disrupt or impede
the early settlement of the disputes; and
(e) The Board shall exert all efforts to settle disputes amicably
and encourage the parties to submit their case to a voluntary
arbitrator. (As amended by Section 20, Republic Act No. 6715,
March 21, 1989).
________
Article 251. Duty to bargain collectively in the absence of
collective bargaining agreements. – In the absence of an
agreement or other voluntary arrangement providing for a
more expeditious manner of collective bargaining, it shall be
the duty of employer and the representatives of the employees
to bargain collectively in accordance with the provisions of this
Code.
________
1. NATURE OF COLLECTIVE BARGAINING
1.1 Definition
Collective bargaining or negotiations towards a collective
agreement is a democratic framework to stabilize the relation
between labor and management and to create a climate of
sound and stable industrial peace. It is a mutual responsibility
of the employer and the Union and is characterized as a legal
obligation.
Collective bargaining includes four related but distinguishable
processes:
(1) negotiation between representatives of the management
and the union over “wages, hours, and other terms of
employment;”
(2) the execution of a written contract embodying the terms
agreed upon;
(3) negotiation of any question arising as to the interpretation
or application of the contract; and
(4) negotiation over the terms of a new contract or proposed
modifications, when an existing agreement is validly opened for
negotiations.
Collective bargaining is a system made up of a set of continuous
processes; it is customary and helpful to distinguish negotiation
of contracts (the “legislative” phase of the union-employer
relationship), administration of contracts (the “executive
phase), and interpretation or application of contracts (the
“judicial” phase).
In common usage as well as in legal terminology, collective
bargaining denotes negotiations looking forward to a collective
agreement. However, it does not end with the execution of an
agreement. It is a continuous process. It requires both parties,
the employer and duly authorized representatives of
employees, to deal with each other with open and fair minds
and sincerely endeavor to fight the obstacles in the process to
stabilize employer-employee relationship.
1.1a CBA Defined
60 | P LATON
A collective bargaining agreement (CBA), as used in Article 252
of the Labor Code, refers to a contract executed upon request
of either the employer or the exclusive bargaining
representative incorporating the agreement reached after
negotiations with respect to wages, hours of work and all other
terms and conditions of employment, including proposals for
adjusting any grievances or questions arising under such
agreement.
While the terms and conditions of a CBA constitute the law between
the parties, it is not, however, an ordinary contract to which is applied
the principles of law governing ordinary contracts. A CBA, as a labor
contract within the contemplation of Article 1700 of the Civil Code of
the Philippines which governs the relations between labor and capital,
is not merely contractual in nature but impressed with public interest,
thus, it must yield to the common good. As such, it must be construed
liberally rather than narrowly and technically, and the courts must
place a practical and realistic construction upon it, giving due
consideration to the context in which it is negotiated and purpose
which it is intended to serve.
A CBA is more than a contract; it is a generalized code to govern
a myriad of cases which the draftsmen wholly anticipate. It
covers the whole employment relationship and prescribes the
rights and duties of the parties.
1.2 Rationale
By “collective bargaining” the employee shares through his
chosen representatives in fixing the conditions under which he
works, and a rule of law is substituted for absolute authority.
1.3 Strength of the Collective Bargaining Method
Collective bargaining is also a means of ensuring worker’s
participation in decision-making. The notion that workers are
entitled to participate in setting the terms under which they are
to work is inherent in collective bargaining; even the most
rudimentary form of collective bargaining involves a transfer of
certain issues, be it only wages, from the area of unilateral to
the area of bilateral decision-making.
It provides an opportunity for the exchange of information
tending to enhance the understanding of the parties for each
other problems and objectives, both where they differ and
where they are identical.
Moreover—and this is very important—it provides an orderly
procedure by which each side can seek to present to the other
the best possible case for the satisfaction of its particular
demands.
It elicits the consent of those who will have to live under the
terms of any agreement derived from the bargaining process.
Stability is an important element in employment, and “consent
assures stability because parties who have accepted an
agreement will live by its terms.”
2. EMERGENCE OF COLLECTIVE BARGAINING
First in Great Britain, but not much later in other countries,
working men sought to protect themselves against the harsh
effects of new machines, new methods of production, new
divisions of labor and new intensities of competition by forming
organizations capable of representing their interests as a group
vis-à-vis employees and the State.
2.1 Originator
The credit for coining the expression belongs to Beatrice Webb,
who first used it in 1891 in her study on “The Cooperative
Movement in Great Britain.”
In non-English speaking countries, particularly on the European
continent, where the process of collective bargaining has an
equally long history, the emphasis was placed on the term
“collective agreement” because during the early period the
workers aimed not so much at establishing the procedure of
bargaining itself as at having such agreements recognized and
enforced as legally binding contracts.
2.2 Adoption in the Philippines
In the Philippines the idea of collective bargaining first gained
formal and official recognition through Commonwealth Act No.
213, approved by President Manuel L. Quezon on November
21, 1936.
But it is the Industrial Peace Act (RA No. 875, approved by
President Elpidio Quirino on June 17, 1953), that defined
collective bargaining and outlined its procedure.
3. PARTIES TO COLLECTIVE BARGAINING
The duty to bargain collectively arises only between the
“employer” and its “employees”. Where neither party is an
“employer” nor an "employee" of the other, no such duty
would exist. Needless to add, where there is no duty to bargain
collectively the refusal to bargain violates no right.
The parties, then, to collective bargaining as traditionally
understood, are the employer and the employees represented
by their labor union.
Article. 212. (j) "Bargaining representative" means a legitimate labor
organization whether or not employed by the employer.
The bargaining representative of the employees is an entity—
the union—and not the officers of the union.
4. JURISDICTIONAL PRECONDITIONS OF COLLECTIVE
BARGAINING
While it is a mutual obligation of the parties to bargain, the
employer, however, is not under any legal duty to initiate
contract negotiation. The mechanics of collective bargaining is
set in motion only when the following jurisdictional
preconditions are present, namely:
(1) possession of the status of majority representation of the
employees' representative in accordance with any of the means
of selection or designation provided for by the Labor Code;
(2) proof of majority representation; and
(3) a demand to bargain under Article 251, par. (a) of the New
Labor Code.
An employer’s duty to recognize and bargain collectively with a
union as the collective bargaining representative of his
employees does not arise until after the union requests the
employer to bargain. Hence, an employer is not in default
61 | P LATON
respecting the duty to bargain until a request therefor has been In the presence of validly agreed procedure, the Labor Code
made. procedure applies suppletorily only.

It is essential to the right of a putative bargaining agent to represent D.O. No. 40-03 supplements the codal provisions:
the employees that it be the delegate of a majority of the employees
and, conversely, an employer is under duty to bargain collectively only Section 3. When single enterprise bargaining available. - Any voluntarily
when the bargaining agent is representative of the majority of the recognized or certified labor union may demand negotiations with its
employees. A natural consequence of these principles is that the employer for terms and conditions of work covering employees in the
employer has the right to demand of the asserted bargaining agent bargaining unit concerned.
proof of its representation of its employees. Having the right to
demonstration of this fact, it is not an 'unfair labor practice' for an Section 4. Procedure in single enterprise bargaining - A recognized or
employer to refuse to negotiate until the asserted bargaining agent has certified labor union that desires to negotiate with its employer shall
presented reasonable proof of majority representation. It is necessary submit such intention in writing to the employer, together with its
however, that such demand be made in good faith and not merely as a proposals for collective bargaining.
pretext or device for delay or evasion. The employer's right is however
to reasonable proof.
The recognized or certified labor union and its employer may
adopt such procedures and processes they may deem
4.1 Bargaining with Minority Union, ULP
appropriate and necessary for the early termination of their
negotiations. They shall name their respective representatives
Where a majority representative has been designated, it is an
to the negotiation, schedule the number and frequency of
unfair labor practice, [for the employer] as a refusal of
meetings, and agree on wages, benefits and other terms and
collective bargaining, to deal and negotiate with the minority
conditions of work for all employees covered in the bargaining
representative.
unit.
On the union side, where there exists a legitimate issue as to
7. MULTI-EMPLOYER BARGAINING
which of several unions is the legitimate representative of
employees, it is ULP for one of the unions to stage a strike and
Collective bargaining may take place at the national, industry,
demand that the employer sit down with it for collective
or enterprise level.
bargaining.
The Philippines so far has tried only enterprise-level, or
5. WHEN BARGAINING SHOULD BEGIN
decentralized bargaining.
If the three jurisdictional preconditions are present, the
7.1 Rationale of Multi-employer Bargaining
collective bargaining should begin within the 12 months
following the determination and certification of the employees’
When a number of employees join forces for purposes of
exclusive bargaining representative. This period is known as the
collective bargaining, the unit structure is described as a multi-
“certification year.”
employer bargaining unit. The structure may consist of an
association representing employers, or even a whole industry,
The employer’s duty to bargain during the certification year has
or it may be composed of only a few employers who bargain as
been held to extend throughout the entire year. Absent
a group, or through an association.
unusual circumstances, an employer commits an unfair labor
practice by refusing to bargain with the union during its
Competitive pressures are the dominant forces that encourage
certification year, notwithstanding the repudiation of the union
both unions and employers to enter into multi-employer or
by a majority of its employees before the expiration of the one-
industry-wide bargaining relationships. Small employers in
year period. The rule is the same whether the union lost its
highly competitive and labor-intensive fields may find it easier
majority as a result of the employer’s unfair labor practices or
to operate with uniformity of labor cost.
through no fault of the employer.
The multi-employer unit is particularly advantageous to both
A union which has been certified by the NLRB as a bargaining
sides in industries composed of many small, financially weak
representative for a particular unit enjoys an irrefutable
employers.
presumption of a majority status for one year, absent special
circumstances. Following the expiration of the one-year
Multi-employer bargaining provides both management and
certification period, there continues to be a presumption in
unions with significant cost savings in negotiation of labor
favor of a union majority, though the presumption is
agreements. It is cheaper to negotiate one master multi-
rebuttable. Employee turnover does not constitute “unusual
employer agreement than a number of single-employer
circumstances” shortening the period.
agreements.
6. SINGLE ENTERPRISE BARGAINING PROCEDURE BROADLY
There are, however, other considerations than costs, such as
DESCRIBED
intra-organizational issues, that the parties take into account
before opting for multi-employer units. Multi-employer
The law gives primacy to free collective bargaining (Art. 211)
bargaining may not only overlook the needs of various
and allows the parties to devise their bargaining rules (Art.
employee groups, but also ignore particular requirements of
251). This is the basic reason the bargaining procedure is
individual employers.
governed primarily by agreement of the parties.
What may be readily acceptable to one employer may be
considered as financially disastrous by another.

62 | P LATON

To arrive at multi-employer agreements is much more difficult
than to arrive at single-employer contracts. The expanded size
of the unit composed of many heterogeneous groups leads to
intensive intra-organizational bargaining both on the union’s
and on the employer’s side. At times, these intra-organizational
pressures may lead to lengthy delays in negotiations and even
to breakdown of bargaining.
7.2 Multi-employer Bargaining Procedure (D.O. No. 40-03)
Section 5. When multi-employer bargaining available. - A legitimate
labor union(s) and employers may agree in writing to come together for
the purpose of collective bargaining, provided:
(a) only legitimate labor unions who are incumbent exclusive bargaining
agents may participate and negotiate in multi-employer bargaining;
(b) only employers with counterpart legitimate labor unions who are
incumbent bargaining agents may participate and negotiate in multi-
employer bargaining; and
(c) only those legitimate labor unions who pertain to employer units
who consent to multi-employer bargaining may participate in multi-
employer bargaining.
Section 6. Procedure in multi-employer bargaining. - Multi-employer
bargaining may be initiated by the labor unions or by the employers.
(a) Legitimate labor unions who desire to negotiate with their
employers collectively shall execute a written agreement among
themselves, which shall contain the following:
1) the names of the labor unions who desire to avail of multi-employer
bargaining;
2) each labor union in the employer unit;
3) the fact that each of the labor unions are the incumbent exclusive
bargaining agents for their respective employer units;
4) the duration of the collective bargaining agreements, if any, entered
into by each labor union with their respective employers.
Legitimate labor unions who are members of the same registered
federation, national, or industry union are exempt from execution of
this written agreement.
(b) The legitimate labor unions who desire to bargain with multi-
employers shall send a written notice to this effect to each employer
concerned. The written agreement stated in the preceding paragraph,
or the certificates of registration of the federation, national, or industry
union, shall accompany said notice.
Employers who agree to group themselves or use their existing
associations to engage in multiemployer bargaining shall send a written
notice to each of their counterpart legitimate labor unions
indicating their desire to engage in multi-employer bargaining. Said
notice shall indicate the following:
1) the names of the employers who desire to avail of multi-employer
bargaining;
2) their corresponding legitimate labor organizations;
3) the fact that each corresponding legitimate union is any incumbent
exclusive bargaining agent;
4) the duration of the current collective bargaining agreement, if any,
entered into by each employer with the counterpart legitimate labor
union.
(c) Each employer or concerned labor union shall express its willingness
or refusal to participate in multi-employer bargaining in writing,
addressed to its corresponding exclusive bargaining agent or employer.
Negotiations may commence only with regard to respective employers
and labor unions who consent to participate in multi-employer
bargaining;
(d) During the course of negotiations, consenting employers and the
corresponding legitimate labor unions shall discuss and agree on the
following:
1) the manner by which negotiations shall proceed;
2) the scope and coverage of the negotiations and the agreement; and
3) where appropriate, the effect of the negotiations on current
agreements or conditions of employment among the parties.
Section 7. Posting and registration of collective bargaining agreement. -
Two (2) signed copies of collective bargaining agreement reached
through multi-employer bargaining shall be posted for at least five ( 5)
days in two conspicuous areas in each workplace of the employer units
concerned. Said collective bargaining agreement shall affect only those
employees in the bargaining units who have ratified it.
The same collective bargaining agreement shall be registered with the
Department in accordance with the following Rule.
7.4 Optional
Under D.O. No. 40-03 multi-employer bargaining is purely
optional for employers and unions.
Unlike other bargaining units, the multi-employer unit is based
primarily on the consent of the firms involved.
________
Article 252. Meaning of duty to bargain collectively. – The duty
to bargain collectively means the performance of a mutual
obligation to meet and convene promptly and expeditiously in
good faith for the purpose of negotiating an agreement with
respect to wages, hours of work and all other terms and
conditions of employment including proposals for adjusting any
grievances or questions arising under such agreement and
executing a contract incorporating such agreements if
requested by either party but such duty does not compel any
party to agree to a proposal or to make any concession.
________
Article 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.
________
1. DUTY TO BARGAIN DEFINED
The law contemplates and defines two situations when the
duty to bargain exists: Situation one, when there is yet no
collective bargaining agreement (Art. 252), and Situation two,
where a CBA exists (Art. 253).
63 | P LATON
For Situation One, the duty to bargain means in essence the
mutual obligation of the employer and the employees’ majority
union to meet and convene.
The purposes of the meeting and convening are:
(1) to negotiate an agreement on the subjects of:
(a) wages, (b) hours of work, and (c) all other terms and
conditions of employment including proposals for adjusting
grievances or questions arising under such agreement; and
(2) to execute a contract incorporating such agreement if
requested by either party.
The kind of compliance required is prompt, expeditious, and in
good faith.
The limitations or reservations of the duty are that it does not
compel any party to agree to a proposal or to make a
concession.
For Situation Two, the duty to bargain means all of the above
and, additionally, the obligation not to terminate or modify the
CBA during its lifetime. But 60 days before the CBA expires,
either party may notify the other in writing that it desires to
terminate or modify the agreement. During the 60-day period
and until a new agreement is reached, the CBA remains in full
force and effect; the parties are duty-bound to keep the status
quo. The law therefore provides for automatic renewal or
extension of the CBA. This 60-day period under Art. 253 refers
to submission of proposals to renegotiate the
nonrepresentational provisions of the CBA. It does not always
coincide with the 60-day period mentioned in Articles 253-A
and 256 pertaining to “freedom period” to resolve
representation contest between unions
1.1 Four Forms of ULP in Bargaining
(1) failure to meet and convene; (2) evading the mandatory
subjects of bargaining; (3) bad faith in bargaining, including
failure or refusal to execute the collective agreement, if
requested; and (4) gross violation of the CBA.
2. FIRST U.L.P. IN BARGAINING: FAILURE OR REFUSAL TO
MEET AND CONVENE
An employer is guilty of an unfair labor practice in refusing to
bargain with the representative of a majority of his employees.
To bargain in good faith, an employer must not only meet and
confer with the union which represents his employees, but also
must recognize the union for the purpose of collective
bargaining. In addition, he must recognize the union as the
bargaining representative of all the employees in the
appropriate bargaining unit, even if they are not all members of
the union.
The duty to bargain extends beyond the period of contract
negotiations, and applies to labor-management relations during
the term of the agreement. Since a collective bargaining
agreement does not define all the rights and obligations of the
employer and his employees, negotiation of grievances is part
and parcel of the bargaining process.
The failure of refusal of an employer to bargain collectively with
his employees constitutes an enjoinable unfair labor practice
not only under the subdivision of the Act dealing expressly with
“collective bargaining,” but also under the subsection making it
an “unfair labor practice” to: “interfere with, restrain or coerce
employees in the exercise” of their guaranteed rights, on the
theory that refusal by an employer to bargain collectively with
his employees constitutes “interference” with the latter’s right
of self-organization.
2.1 Unresolved Petition for Union Cancellation
2.2 Selling the Company
If an employer is guilty of unfair labor practice when he directly
discharges his employees to forestall a demand for collective
bargaining, he certainly should not be allowed to evade
responsibility if he indirectly causes that discharge by selling to
a company that he knows is unwilling to accept his employees.
The basic rule is that if the transfer of assets and employees
from one employer to another leaves intact the identity of the
employing enterprise, the transferor’s duty to recognize and
bargain with an incumbent union devolves upon the transferee
as “successor employer.” That means that an acquiring
employer is a successor to the bargaining obligations of his
predecessor if there is a continuity in the business operation.
Only a high degree of enterprise continuity will justify imposing
obligations under a contract with the union to which the new
employer was not a party.
A mere change in ownership of a business is insufficient to alter
a union’s status as bargaining representative.
2.3 Successor Employer: Continuity and Identity
In making the determination as to whether an employer is
successor, the NLRB looks to the totality of circumstances to
determine whether there has been a substantial and material
alteration in the employing enterprise. If there is a substantial
and material alteration in the employing enterprise, the new
employer need not bargain with the incumbent union.
2.4 Conversion to Independent Franchise or Operation
A decision to withdraw capital from a company-operated
facility and relinquish the operating control to an independent
dealership lies very much at the core of entrepreneurial
control, and hence is not a mandatory subject of bargaining
2.5 Do Economic Exigencies Justify Refusal to Bargain?
An employer has been held not guilty of a refusal to bargain by
adamantly rejecting the union’s economic demands where he is
operating at a loss, on a low profit margin, or in a depressed
industry, as long as he continues to negotiate.
2.6 Acts not Deemed Refusal to Bargain
The duty to bargain is not violated by:
(1) adoption of an adamant bargaining position in good faith,
particularly when the company is operating at a loss;
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(2) refusal to bargain over demands for commission of unfair not obligatory upon either side of a labor controversy to precipitately
labor practices; accept or agree to the proposals of the other. But an erring party
should not be tolerated and allowed with impunity to resort to
schemes feigning negotiations by going through empty gestures.”
(3) refusal to bargain during period of illegal strike.
3. SECOND U.L.P. IN BARGAINING: EVADING THE
If a union engages in an illegal strike, the employer has no
MANDATORY SUBJECTS
obligation to bargain until he is notified that the illegal strike
has been terminated.
It is the obligation of the employer and the employees’
representative to bargain with each other with respect to
Where, pursuant to an honest doubt, the employer has
“wages, hours, and other terms and conditions of
demanded additional proof or acquisition of an official
employment.” They are statutory or “mandatory” proposals. An
certification of bargaining agency, there is no obligation or duty
employer’s refusal to negotiate a mandatory subject of
on the employer’s part to enter into negotiations until the
bargaining is an unfair labor practice although the employer has
demanded proof is presented pending the certification
every desire to reach agreement and earnestly and in all good
proceedings, unless it can be established that the demand lacks
faith bargains to that end. On the other hand, an employer’s
in good faith and is intended as an obstruction to negotiations.
duty to bargain is limited to the mandatory bargaining subjects;
as to other matters, he is free to bargain or not to bargain.
Neither is the duty to bargain violated where:
A mere remote, direct, or incidental impact is insufficient to
(1) there is no request for bargaining;
render a subject a mandatory subject of bargaining; in order for
a matter to be subject to mandatory collective bargaining, it
(2) the union seeks recognition for an inappropriately large
must materially or significantly affect the terms or conditions of
unit;
employment.
(3) the union seeks to represent some persons who are
3.1 Wages and Employment Conditions
excluded from the Act;
The term “wages,” as used in 29 USCS Sec. 158(d), has been
(4) the rank-and-file unit includes supervisors or inappropriate
held to include not only compensation but also other
otherwise;
emoluments of value furnished by the employer to his
employees. Under our Labor Code, “wage” refers to
(5) the demand for recognition and bargaining is made within
remuneration or earnings, however designated, capable of
the year following a certification election in which the clear
being expressed in terms of money, etc.
choice was no union and no ad interim significant change has
taken place in the unit;
Since the passage of the Taft-Hartley Act, the National Labor Relations
Board has held that industrial pensions, group insurance, and merit
(6) the union makes unlawful bargaining demands. increases all are matters about which employers must bargain
collectively.
2.7 Alleged Interference in the Selection of the Union’s
Negotiation Panel The following are examples of matters considered as
mandatory subjects of bargaining:
In order to show that the employer committed ULP under the Labor
Code, substantial evidence is required to support the claim. Substantial (1) Wages and other types of compensation, including merit
evidence has been defined as such relevant evidence as a reasonable
increases;
mind might accept as adequate to support a conclusion.

(2) Working hours and working days, including work shifts;

2.8 Non-reply to Proposal; CBA Imposed on Employer

Collective bargaining, designed to stabilize the relation between labor (3) Vacations and holidays;
and management and to create a climate of sound and stable industrial
peace. It is a legal obligation, so much so that Article 248 of the Labor (4) Bonuses;
Code makes it an unfair labor practice for an employer to refuse "to
meet and convene promptly and expeditiously in good faith for the (5) Pensions and retirement plans;
purpose of negotiating an agreement with respect to wages, hours of
work, and all other terms and conditions of employment. (6) Seniority;
We agree with the pronouncement that it is not obligatory upon either
side of a labor controversy to precipitately accept or agree to the (7) Transfer;
proposals of the other. But an erring party should not be tolerated and
allowed with impunity to resort to schemes feigning negotiations by (8) Lay-offs;
going through empty gestures.
(9) Employee workloads;
2.8a Repetition in Divine Word University
(10) Work rules and regulations;
“A company’s refusal to make counter proposal if considered in relation
to the entire bargaining process, may indicate bad faith and this is (11) Rent of company houses;
especially true where the Union’s request for a counter proposal is left
unanswered.” Moreover, the Court added in the same case that “it is
(12) Union security arrangements.

65 | P LATON
3.1a Wage Agreement; “Solomonic” Approach
We take note of the "middle ground" approach employed by the
Secretary in this case which. we do not necessarily find to be the best
method of resolving a wage dispute. Merely finding the midway point
between the demands of the company and the union, and "splitting the
difference" is a simplistic solution that fails to recognize that the parties
may already be at the limits of the wage levels they can afford. It may
lead to the danger too that neither of the parties will engage in
principled bargaining; the company may keep its position artificially low
while the union presents an artificially high position, on the fear that a
"Solomonic" solution cannot be avoided. Thus, rather than encourage
agreement, a "middle ground approach" instead promotes a "play safe"
attitude that leads to more deadlocks than to successfully negotiated
CBAs.
3.2 Workloads and Work Rules
Employee workloads are a mandatory subject of bargaining.
Employer rules concerning coffee breaks, lunch periods,
smoking, employee discipline, and dress are also mandatory
subjects of bargaining, as are plant safety rules and general
regulations.
Company rules relating to safety and work practices come
within the meaning of the phrase “other terms and conditions
of employment” as used in the Act and, therefore, constitute a
mandatory subject of collective bargaining.
3.2a Code of Conduct
Work rules and regulations are commonly compiled into a
booklet usually called “Code of Discipline” or “Code of
Conduct.” Such dos and don’ts for employees of the enterprise
are work rules, forming part of terms and conditions of
employment, that are proper subjects of collective bargaining.
Hardly may the employer contend that they are “non-
negotiable” matters.
3.3 Management Prerogatives Clause
An employer does not commit an unfair labor practice by
insisting, to the point of a bargaining impasse, on the inclusion
in the contract of a management prerogatives clause, even
though some of the matters covered by the clause are
“conditions of employment” which are mandatory subjects of
bargaining under 29 USCS Sec. 158(d). Thus, an employer’s
insistence that its decisions regarding hiring and tenure of
employment should not be reviewable by arbitration is not a
refusal to bargain.
3.4 Union Discipline Clause
An employer may bargain to an impasse over his proposal that
the union eliminate a piecework ceiling imposed by a union rule
which subjects members to discipline for exceeding the
production quota. However, an employer’s insistence to the
point of a bargaining impasse on the union’s withdrawal of
fines imposed on member-employees who crossed a picket line
around the employer’s plant is an unlawful refusal to bargain,
since the right not to withdraw fines is an internal union affairs,
a matter involving relations between employees and their
unions, and therefore not a mandatory bargaining item.
3.5 Arbitration, Strike-Vote, or No-Strike Clause
An employer may lawfully bargain to an impasse over his
proposal that the collective bargaining agreement include an
arbitration clause or a no-strike clause which prohibits the
employees from striking during the life of the agreement.
3.6 No-Lockout Clause; Clause Fixing Contractual Term
An employer’s statutory duty to bargain requires him to
negotiate over the union’s proposal that their agreement
include a clause binding him not to lock out the employees. An
employer’s refusal to bargaining over the duration of the
contract to be entered into is also an unfair labor practice. But
an employer’s obligation to enter into a collective bargaining
agreement does not require that the employer enter into an
unalterable obligation for an extended period of time, and
many collective bargaining agreements contain a clause
permitting termination or modification by either party upon
prescribed notice.
3.7 Signing Bonus
Signing bonus is a grant motivated by goodwill created when a
CBA is successfully negotiated and signed between the
employer and the union. Where goodwill does not exist, why
ask for a signing bonus?
In contractual terms, a signing bonus is justified by and is the
consideration paid for the goodwill that existed in the negotiations that
culminated in the signing of a CBA. Without the goodwill, the payment
of a signing bonus cannot be justified and any order for such payment,
to our mind, constitutes grave abuse of discretion.
In short, if the reason behind a signing bonus is absent, no
signing bonus need be given.
3.8 No Duty to Agree Even on Mandatory Subjects
The Act does not compel agreements between employers and
employees, and neither party is legally obligated to yield even
on a mandatory bargaining subject. Where the subject of the
dispute is a mandatory bargaining subject, either party may
bargain to an impasse as long as he bargains in good faith. The
duty to bargain does not obligate a party to make concessions
or yield a position fairly held. Hence, an employer’s adamant
insistence on a bargaining position is not necessarily a refusal
to bargain in good faith.
Even if the negotiating party thumbs down the other party’s
proposals, there is no violation of the duty to bargain—hence,
no ULP—as long as the negative reply can be explained in good
faith.
3.9 Non-mandatory Subjects
An employer cannot insist, to the point of creating a bargaining
impasse, on the inclusion of a provision outside the scope of
the statutory bargaining subjects, even if he acts in good faith.
On the other hand, it is lawful to insist on the inclusion of a
provision in a collective bargaining agreement if the provision is
within the scope of a statutory subject of bargaining.
An employer bargains to an impasse over a non-mandatory
bargaining subject when he refuses to reach any agreement
with the union unless the union capitulates to him on that
subject. However, it has been held that a bargaining impasse
may be reached over a non-mandatory bargaining subject
66 | P LATON
although that subject is not the sole cause for the parties’
failure to agree. When a subject under discussion is not
mandatory, it may be discussed if both parties agree, but a
strike or lockout may not be used to compel a negotiation or
agreement.
While most matters that might be discussed or proposed in
collective bargaining are likely to bear some relation, even if
tenuous, to “wage, hours, and other terms and conditions of
employment,” not all proposals that somehow respond to a
problem that is customarily bargained about may themselves
be insisted upon to impasse. By once bargaining and agreeing
on a permissive subject of bargaining, the parties do not make
the subject a mandatory topic of future bargaining.
3.10 Bargaining to the Point of Impasse: Not necessarily Bad
Faith
The adamant insistence on a bargaining position to the point
where the negotiations reach an impasse does not establish
bad faith. Neither can bad faith be inferred from a party’s
insistence on the inclusion of a particular substantive provision
unless it concerns trivial matters or is obviously intolerable.
The question as to what are mandatory and what are merely permissive
subjects of collective bargaining is of significance on the right of a party
to insist on his position to the point of stalemate. A party may refuse to
enter into a collective bargaining contract unless it includes a desired
provision as to a matter which is a mandatory subject of collective
bargaining; but a refusal to contract unless the agreement covers a
matter which is not a mandatory subject is in substance a refusal to
bargain about matters which are mandatory subjects of collective
bargaining, and it is no answer to the charge of refusal to bargain in
good faith that the insistence on the disputed clause was not the sole
cause of the failure to agree or that agreement was not reached with
respect to other disputed clauses.
Stated in another way, the ruling means that bargaining to the
point of deadlock may or may not amount to bargaining in bad
faith depending on whether the insistence refers to a
mandatory or a non-mandatory subject of bargaining.
The reason is that the duty to bargain requires meeting and
convening on terms and conditions of employment but does
not require assent to the other party’s proposals.
Over a non-mandatory subject, on the other hand, a party may
not insist on bargaining to the point of impasse, otherwise his
insistence can be construed as bargaining in bad faith. It may be
construed as evasion of the duty to bargain; such evasion is
ULP.
The above rulings do not mean that non-mandatory subjects
cannot be proposed or that the proponent cannot demand
serious discussion of such proposal. What the rulings forbid is
the posture of making settlement on a non-mandatory subject
a precondition to the discussion or settlement of a mandatory
subject. If a non-mandatory subject is proposed and agreed
upon, the agreeing party, by itself, is binding.
3.11 When Is There Deadlock or Impasse?
A bargaining impasse over an issue exists where good faith
bargaining on the part of the parties has failed to resolve the
issue and there are no definite plans for further efforts to break
the deadlock.
“Impasse,” within the meaning of the federal labor laws,
presupposes reasonable effort at good faith bargaining which,
despite noble intentions, does not conclude in an agreement
between the parties. In the NLRB’s view, whether a bargaining
impasse exists is a matter of judgment dependent on such
factors as the bargaining history, the parties’ good faith in
negotiations, the length of the negotiations, the importance of
the issue or issues as to which there is disagreement, and the
contemporaneous understanding of the parties as to the state
of negotiations.
3.11a Duty to Bargain When There Is Deadlock or Impasse
Deadlock does not mean the end of bargaining. It signals rather
the need to continue the bargaining with the assistance of a
third party as conciliator or arbitrator whose first aim is to get
the parties back to the negotiating table and help them craft a
win-win solution.
3.11b Strike or Lockout in Case of Deadlock
Bargaining may proceed smoothly—and this is the wish of most
negotiation panels—but it may also be marred by insinuations,
misunderstandings, and apparently irreconcilable bargaining
positions. Deadlock develops. In fact, deadlock may occur
anytime for various reasons such as unacceptability of a
proposal or counter proposal, grandstanding of a negotiator,
autocratic or arrogant stance, or imprecise wording of a
stipulation.
The law (Art. 263) recognizes bargaining deadlock as a valid
reason to declare a strike or lockout. Strike/ lockout presents a
major deviation from the preferred smooth route of bargaining.
At this point of bargaining scenario, strike/ lockout is supposed
to be a method of resolving an impasse, a device to constrain
the parties to end an impasse and go back to the negotiation
table. But strike/ lockout, while meant to be a solution,
frequently becomes a problem in itself.
Although the union's petition was for "compulsory arbitration," the
subsequent agreement of petitioner to submit the matter for
arbitration in effect made the arbitration a voluntary one. The essence
of voluntary arbitration, after all, is that it is by agreement of the
parties, rather than compulsion of law, that a matter is submitted for
arbitration. It does not matter that the person chosen as arbitrator is a
labor arbiter who, under Art. 217 of the Labor Code, is charged with the
compulsory arbitration of certain labor cases. There is nothing in the
law that prohibits these labor arbiters from also acting as voluntary
arbitrators as long as the parties agree to have him hear and decide
their dispute.
4. THIRD U.L.P. IN BARGAINING: BAD FAITH
Bargaining deadlock may be precipitated not only by hard-line
positions on mandatory or non-mandatory subjects. It may also
arise because of lack of good faith in bargaining.
Good-faith bargaining demands more than sterile and
repetitive discussion of formalities precluding actual
negotiation, more than formal replies which constitute in effect
a refusal to treat with the union, and more than a willingness to
enter upon a sterile discussion of union-management
differences. It requires a sincere effort to reach agreement,
although it does not require agreement itself. Moreover, the
67 | P LATON
duty to bargain does not end with the negotiation of the
agreement.
The duty to bargain collectively may be violated without a
general failure of subjective good faith, and there is no occasion
to consider the issue of good faith if a party refuses even to
negotiate in fact about any of the mandatory subjects. AN
employer cannot be guilty of a refusal to bargain if the union is
not itself bargaining in good faith.
4.1 Determination of Good Faith
The crucial question whether or not a party has met his statutory duty
to bargain in good faith typically turns on the facts of the individual
case. There is no per se test of good faith in bargaining. Good faith or
bad faith is an inference to be drawn from the facts and is largely a
matter for the NLRB’s expertise. To some degree, the question of good
faith may be a question of credibility.
A fair criterion of good faith in collective bargaining requires
that the parties involved deal with each other with open and
fair mind and sincerely endeavor to overcome obstacles or
difficulties existing between them to the end that employment
relations may be established and obstruction to the free flow of
commerce prevented. Mere pretended bargaining will not
suffice; neither must the mind be hermetically sealed against
the thought of entering into an agreement. To do less that is
required by the standards of good faith and conduct is a refusal
to bargain collectively and violates the spirit and intent of the
Act.
4.2 When Can Bargaining in Bad Faith Occur?
Bargaining in bad faith is considered ULP under Art, 248(g). But
if one will be charged with bargaining in bad faith, the charge
should be raised while the bargaining is in progress. When the
bargaining is finished and the CBA has been executed
voluntarily by the parties, a charge of bargaining in bad faith is
too late and untenable.
With the execution of the CBA, bad faith bargaining can no longer be
imputed upon any of the parties thereto. All provisions in the CBA are
supposed to have been jointly and voluntarily incorporated therein by
the parties. This is not a case where private respondent exhibited an
indifferent attitude towards collective bargaining because the
negotiations were not the unilateral activity of petitioner union. The
CBA is proof enough that private respondent exerted "reasonable effort
at good faith bargaining."
The union’s proposal, not being part of the signed contract, cannot
serve as basis of holding the management guilty of bad faith in
bargaining or in implementing their contract as signed.
4.3 Instances of Bad Faith: Delay of, or Imposing Time Limit on,
Negotiations
An unwarranted delay in negotiations may be evidence of bad
faith on the part of the employer. However, an employer has
been held not guilty of bad faith for failing to complete a
collective bargaining contract during a 3-year period, where
many conferences had been held during the period, even
though the employer had insisted on a no-strike clause and had
raised wages during negotiations for the purpose of meeting
competition.
The National Labor Relations Board of the United States
reported that “lack of good faith is indicated where the
employer engages in unfair labor practices while bargaining
with the union; where it engages in dilatory tactics during
negotiations; or where it institutes a wage cut by unilateral
action and without consulting the majority representative.”
Nonetheless, the prior adjudication of bad faith on an earlier
occasion is not itself substantial evidence of present bad faith.
As the Court held in the case of Kiok Loy v. NLRC, 141 SCRA 179, 186
(1986), the company's refusal to make counter-proposal to the union's
proposed CBA is an indication of its bad faith.
4.3a Bad Faith: Surface Bargaining; Shifting Bargaining
Positions; Blue Sky Bargaining
“Surface bargaining,” which means a sophisticated pretense in
the form of apparent bargaining, does not satisfy the statutory
duty to bargain. The duty is not discharged by merely meeting
together or simply manifesting a willingness to talk. It requires
more than a willingness to enter upon a sterile discussion of
union-management differences. Collective bargaining is not
simply an occasion for purely formal meetings between
management and labor while each maintains an attitude of
“take it or leave it,” but presupposes a desire to reach an
ultimate agreement to enter into a collective bargaining
contract. An employer’s proposals which could not be offered
with any reasonable expectation that they would be accepted
by the union constitute surface bargaining.
Repeated shifts in position and attitude on the part of an
employer whenever a tentative agreement is reached are
evidence of a refusal to bargain collectively in good faith. It has
also been held that an employer cannot reject a union’s
acceptance of the employer’s counter offer on the ground that
the union had earlier rejected the offer.
Surface bargaining is defined as "going through the motions of
negotiating" without any legal intent to reach an agreement. The
resolution of surface bargaining allegations never presents an easy
issue. The determination of whether a party has engaged in unlawful
surface bargaining is usually a difficult one because it involves, at
bottom, a question of the intent of the party in question, and usually
such intent can only be inferred from the totality of the challenged
party’s conduct both at and away from the bargaining table. It involves
the question of whether an employer’s conduct demonstrates an
unwillingness to bargain in good faith or is merely hard bargaining. x x x
We, likewise, do not agree that the Union is guilty of ULP for engaging
in blue-sky bargaining or making exaggerated or unreasonable
proposals.
4.3b Bad Faith: Inflexible Demands; Strike Amid Negotiation
4.3c Bad Faith: Boulwarism; Take-It-or-Leave-It Bargaining
The new plan was threefold. As negotiations approached, the Company
would use its local management personnel on the desires of the work
force on the type and level of benefits; these were then translated into
specific proposals, whose cost and effectiveness were researched in
order to determine an attractive bargaining offer within the Company's
means; the Company then attempted to "sell" its proposals to its
employees and the general public through a publicity campaign in plant
newspapers, bulletins, letters, television and radio announcements and
personal contacts. The Company announced in negotiations that it
rejected the usual “horse trading” approach to bargaining, with each
side eventually compromising initial unreasonable positions; it
advertised its initial proposals as “fair” and “firm.” Though willing to
accept Union suggestions based on facts it might have overlooked, the
68 | P LATON
Company refused to change its position simply because the Union
disagreed with it.
We have already indicated that one of the central tenets of "the
Boulware approach" is that the "product" or "firm, fair offer" must be
marketed vigorously to the "consumers" or employees, to convince
them that the Company, and not the Union, is their true representative.
The aim, in a word, was to deal with the Union through the employees,
rather than with the employees through the Union.
4.4 Not Bad Faith to Propose Modifications to the Expiring CBA
It is not bad-faith bargaining when a party proposes
modifications to the expiring CBA. The second sentence of
Article 253 explicitly refers to serving a written notice “to
terminate or modify” the agreement. Modification may mean
addition to, subtraction from, or other ways of changing the
contents or phraseology of contents of the expiring CBA. It does
not connote a one-direction movement. But whichever way it is
proposed to go, the proposed changes require honest
explanation.
What was excluded from the old CBA may be proposed for
inclusion in the forthcoming CBA, or vice-versa. Negotiation
precisely contemplates proposals and counter-proposals.
4.5 Giving of Information
Part of good-faith bargaining, and a method to expedite the
process, is supplying of information to the other party, as
required by law. It should be recalled that under Art. 242 one of
the rights of a legitimate labor organization which is certified as
the exclusive bargaining agent, is to ask for and be furnished
with the employer’s annual audited financial statements,
including the balance sheet and the profit and loss statement.
Such information is crucial in bargaining.
An employer is under a duty, upon request of the bargaining
representative, to provide information relevant to the issues at
the bargaining table. Refusal to provide relevant information
after the same has been requested constitutes per se violation
of the duty to bargain. Relevant information or data may
include information concerning the employees in the
bargaining unit, such as their names, addresses, and seniority
standing, or concerning the financial status of the employer,
especially where needed to substantiate claims of inability to
pay.
5. FOURTH U.L.P. IN BARGAINING: GROSS VIOLATION OF THE
CONTRACT
At this stage, the negotiations are over; the document has been
signed, sealed, and delivered. Implementation should follow.
But at this stage the collective bargaining process is not yet
over, and the duty to bargain is still operative because such
duty further requires faithful adherence to the contractual
provisions. Violation of the contract amounts to ULP, if the
violation is “gross.”
6. RATIFICATION BY THE CBU; MANDATORY REQUIREMENTS
The agreement negotiated by the employees’ bargaining agent
should be ratified or approved by the majority of all the
workers in the bargaining unit.
The proper ratifying group is not just the majority union but the
majority of all the workers in the bargaining unit represented
in the negotiation.
The ratification and the manner of doing it are mandatory.
The Implementing Rules require posting of the CBA in two
conspicuous places for five days. In one case, the CBA was not
posted for at least five days in two conspicuous places in the
establishment before ratification, to enable the workers to
clearly inform themselves of its provisions. Moreover, the CBA
submitted to the MOLE did not carry the sworn statement of
the union secretary, attested by the union president, that the
CBA had been duly posted and ratified, as required by the
Implementing Rules and Regulations. The court ruled that these
requirements being mandatory, non-compliance therewith
rendered the said CBA ineffective.
6.1 Invalid Ratification
6.2 When Ratification Not Needed
Ratification of the CBA by the employees in the bargaining unit
is not needed when the CBA is a product of an arbitral award by
appropriate government authority or by a voluntary arbitrator.
The arbitral award may result from voluntary arbitration under
Art.262 or from the secretary’s assumption of jurisdiction or
certification of the dispute to the NLRC, under Art. 263(g).
In any of those situations the CBA still needs to be posted in
two conspicuous places in the workplace, but the posting is for
the information of, and not ratification by, the employees
affected. Moreover, the CBA has to be registered with the DOLE
regional office.
To require ratification of the CBA in case of arbitral awards will
be inconsistent with the nature of arbitration as a dispute-
settlement device.
The preceding comment, however, does not mean that the
arbitral award is beyond question. Certiorari on proper grounds
is available.
6.3 Ratified but Unsigned
Lack of the purely ministerial act of signing the formal contract
did not obviate the fact that there was a binding contract.
6.4 Unratified but Implemented
The parties to a collective agreement are required to furnish copies to
the appropriate Regional Office with accompanying proof of ratification
by the majority of all the workers in the bargaining unit. This was not
done in the case at bar. But we do not declare the CBA invalid or void
considering that the employees have enjoyed benefits from it. They
cannot receive benefits under provisions favorable to them and later
insist that the CBA is void simply because other provisions turn out not
to the liking of certain employees. It is iniquitous to receive benefits
from a CBA and later on disclaim its validity.
7. EXECUTION OF CONTRACT
A party to a collective bargaining may be required to sign a
contract where the agreement has been reached by the parties
and only one party’s refusal to execute a contract is preventing
69 | P LATON
its being carried into effect. Such refusal is an unfair labor
practice
7.1 Unwritten or Unsigned Agreement
American courts have held that a collective bargaining
agreement is valid though not reduced to writing or signed, if
neither party requests a written instrument.
7.2 Effect of Signing on Other Disputes
8. REGISTRATION OF C.B.A.
The collective agreement, having been properly ratified, should
be registered with the DOLE Regional Office where the
bargaining union is registered or where it principally operates.
Art. 231 requires the registration within thirty (3) calendar days
from execution of the agreement. Multi-employer collective
bargaining agreements shall be filed with the Bureau.
It is believed that failure to register the CBA does not make it
invalid or unenforceable. Its non-registration, however, renders
the contract-bar rule inoperative.
8.1 Requirements for Registration
Section 2. Requirements for registration. - The application for CBA
registration shall be accompanied by the original and two (2) duplicate
copies of the following documents which must be certified under oath
by the representative(s) of the employer(s) and labor union(s)
concerned
(a) the collective bargaining agreement;
(b) a statement that the collective bargaining agreement was posted in
at least two (2) conspicuous places in the establishment or
establishments concerned for at least five (5) days before its
ratification; and
(c) a statement that the collective bargaining agreement was ratified by
the majority of the employees in the bargaining unit of the employer or
employers concerned.
No other document shall be required in the registration of collective
bargaining agreements
The application may be denied if the supporting documents are
incomplete or not verified under oath. The denial, if by the
Regional office, is appealable to the Bureau within ten (10) days
or to the Secretary if the denial is by the Bureau.
9. AUTOMATIC RENEWAL OF CBA
The parties shall continue the CBA in “full force and effect” until
they reach a new agreement.
It is clear from the above provision of law that until a new Collective
Bargaining Agreement has been executed by and between the parties,
they are duty-bound to keep the status quo and to continue in full force
and effect the terms and conditions of the existing agreement. The law
does not provide for any exception nor qualification as to which of the
economic provisions of the existing agreement are to retain force and
effect, therefore, it must be understood as encompassing all the terms
and conditions in the said agreement.
________
Article 253-A. Terms of a collective bargaining agreement. –
Any Collective Bargaining Agreement that the parties may enter
into shall, insofar as the representation aspect is concerned, be
for a term of five (5) years. No petition questioning the majority
status of the incumbent bargaining agent shall be entertained
and no certification election shall be conducted by the
Department of Labor and Employment outside of the sixty-day
period immediately before the date of expiry of such five-year
term of the Collective Bargaining Agreement. All other
provisions of the Collective Bargaining Agreement shall be
renegotiated not later than three (3) years after its execution.
Any agreement on such other provisions of the Collective
Bargaining Agreement entered into within six (6) months from
the date of expiry of the term of such other provisions as fixed
in such Collective Bargaining Agreement, shall retroact to the
day immediately following such date. If any such agreement is
entered into beyond six months, the parties shall agree on the
duration of retroactivity thereof. In case of a deadlock in the
renegotiation of the Collective Bargaining Agreement, the
parties may exercise their rights under this Code. (As amended
by Section 21, Republic Act No. 6715, March 21, 1989).
________
1. DURATION OF A C.B.A.
RA No. 9715 (March 21, 2989) has introduced through Art. 253-
A a significant change in setting the durations or terms of a CBA
at five years for the “representation aspect” and not more than
three years for “all other provisions.” The “representation
aspect” refers to the identity and majority status of the union
that negotiated the CBA as the exclusive representative of the
bargaining unit. “All other provisions: simply refers to the rest
of the CBA, economic as well as non-economic other than
representational.
The conference agreed to make the “terms and conditions” or
“economic” provision of the CBA good only for three years so
as to protect the economic gains of the workers.
Obviously, the framers of the law wanted to maintain industrial peace
and stability by having both management and labor work harmoniously
together without any disturbance. Thus, no outside union can enter the
establishment within five (5) years and challenge the status of the
incumbent union as the exclusive bargaining agent. Likewise, the terms
and conditions of employment (economic and non-economic) cannot
be questioned by the employers or employees during the period of
effectivity of the CBA. The CBA is a contract between the parties and
the parties must respect the terms and conditions of the agreement.
Notably, the framers of the law did not give a fixed term as to the
effectivity of the terms and conditions of employment. It can be
gleaned from their discussions that it was left to the parties to fix the
period.
The issue as to the term of the non-representation provisions of the
CBA need not belabored especially when we take note of the
Memorandum of the Secretary of Labor dated February 24, 1994. In
said memorandum, the Secretary of Labor had occasion to clarify the
term of the renegotiated terms of the CBA vis-a-vis the term of the
bargaining agent, to wit:
As a matter of policy the parties are encourages (sic) to enter into a
renegotiated CBA with a term which would coincide (sic) with the
aforesaid five (5) year term of the bargaining representative.
In the event however, that the parties, by mutual agreement, enter into
a renegotiated contract with a term of three (3) years or one which
does not coincide with the said 5-year term, and said agreement is
ratified by majority of the members in the bargaining unit, the subject
contract is valid and legal and therefore, binds the contracting parties.
70 | P LATON
The same will however not adversely affect the right of another union
to challenge the majority status of the incumbent bargaining agent
within sixty (60) days before the lapse of the original five (5) year term
of the CBA.
2. EFFECTIVITY AND RETROACTIVITY OF A C.B.A.
If the CBA is the very first for the bargaining unit, the Code does
not state any rule on the CBA’s effectivity date. The parties
have to decide it for themselves. But if the ensuing CBA is
renewal, modification or renegotiation of an expiring one, the
Code offers a formula for the effectivity date. Article 253-A
provides that the ensuing agreement, if entered into within six
(6) months from expiry of the old one, shall retroact to the date
following such expiry date; thus, if the CBA expired on
December 31 and the new one is concluded on, say, March 31,
its effectivity date is January 1. If, on the other hand, the new
agreement is concluded after June 30, then the matter of
retroaction and the possible retroactive date are left to the
parties.
When, precisely, is the date an agreement is “concluded” or
“entered into”?
The determining point is the date the parties agreed, not the date they
signed. Art. 253-A refers merely to an "agreement" which, according to
Black's Law Dictionary is "a coming together of minds; the coming
together in accord of two minds on a given proposition." This is similar
to Art. 1305 of the Civil Code's definition of "contract" as "a meeting of
minds between two persons." The two terms, "agreement" and
"contract," are indeed similar, although the former is broader than the
latter because an agreement may not have all the elements of a
contract. As in the case of contracts, however, agreements may be oral
or written. Hence, even without any written evidence of the Collective
Bargaining Agreement made by the parties, a valid agreement existed
in this case from the moment the minds of the parties met on all
matters they set out to discuss, as provided under Art. 1315 of the Civil
Code.
2.1 Effectivity of CBA Concluded After Six Months from
Expiration of Old CBA
Significantly, the law does not specifically cover the situation
where six months have elapsed but the parties have reached no
agreement with respect to effectivity. In this eventuality, we
hold that any provision of law should then apply, for the law
abhors a vacuum.
One such provision is the principle of hold over, i.e., that in the absence
of a new CBA, the parties must maintain the status quo and must
continue in full force and effect the terms and conditions of the existing
agreement until a new agreement is reached. In this manner, the law
prevents the existence of a gap in the relationship between the
collective bargaining parties. Another legal principle that should apply is
that in the absence of an agreement between the parties, then, an
arbitrated CBA takes on the nature of any judicial or quasi-judicial
award; it operates and may be executed only prospectively unless there
are legal justifications for its retroactive application.
3. EXTENSION OF EFFECTIVITY OF C.B.A., WHEN VALID
3.1 Ten-Year Suspension of CBA
________
Article 254. Injunction prohibited. – No temporary or
permanent injunction or restraining order in any case involving
or growing out of labor disputes shall be issued by any court or
other entity, except as otherwise provided in Articles 218 and
264 of this Code. (As amended by Batas Pambansa Bilang 227,
June 1, 1982).
________
1. NO-INJUNCTION POLICY
An injunction may require or restrain the doing of an act.
Article 254 announces the policy that labor disputes are
generally not subject to injunction. If the rule were otherwise, it
would contradict the declared policy, under Article 211(a), “to
promote and emphasize the primacy of free collective
bargaining and negotiations, including voluntary arbitration,
mediation and conciliation, as modes of settling labor or
industrial disputes.”
The policy, basically, is freedom at the workplace. The law, true
to the tenets of free enterprise system, allows management
and labor to fashion the contents and incidents of their
relationship. If there is dispute between the parties, the
responsibility to solve it devolves upon them primarily, not
upon the government. Government intervention is the
exception rather than the rule. This anti-injunction policy
applies even as regards wage-fixing by the wage commission or
regional wage boards.
Moreover, any injunctive order in “non-national interest”
disputes can be directed only against the illegal acts being
committed in connection with the labor dispute; it cannot be
directed against the dispute itself.
There is no power the exercise of which is more delicate which requires
grater caution, deliberation, and sound discretion, or (which is) more
dangerous in a doubtful case than the issuing of an injunction; it is the
strong arm of equity that never ought to be extended unless to cases of
great injury, where courts of law cannot afford an adequate or
commensurate remedy in damages. The right must be clear, the injury
impending or threatened, so as to be averted only by protection
preventive process of injunction.
1.1 Reason of the No-Injunction Policy
The labor injunction is an employer’s most effective remedy in
labor dispute. However narrow its scope and form, the issuance
of an injunction for any purpose in a labor dispute will generally
tip the scales of the controversy. The issuance of an injunction
in the early phases of a strike can critically sway the balance of
the economic struggle against the union. Enforced by the
court’s contempt powers, even a preliminary injunction is an
effectual strike-breaking weapon because so much time
ordinarily elapses between the issuance of a preliminary
injunction and the time when a final decree can be reviewed on
appeal.
1.2 Injunction Issued by Regular Court, When Proper
Regular courts are without authority to issue injunction orders
in cases involving or originating from labor disputes even if the
complaint was filed by non-striking employees and the
employer was also made a respondent to the action or even if
the complainant was a customer of the strike-bound employer
or a sister company of the strike-bound employer, whose
premises were picketed by the strikers.
71 | P LATON
The court may issue an injunction, whether temporary or permanent, provision of law, the exercise of management prerogatives was never
as provided in said section of Republic Act 875, only in a case involving considered boundless.
or growing out of a labor dispute.
________ Verily, a line must be drawn between management prerogatives
regarding business operations per se and those which affect the rights
Article 255. Exclusive bargaining representation and workers’ of the employees. In treating the latter, management should see to it
that its employees are at least properly informed of its decisions or
participation in policy and decision-making. – The labor
modes action.
organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit shall be
2. WORKERS’ PARTICIPATION AS THE REAL OBJECTIVE; THE
the exclusive representative of the employees in such unit for
LMC
the purpose of collective bargaining. However, an individual
employee or group of employees shall have the right at any
Article 255 deals with the crucial concept of employee
time to present grievances to their employer.
participation. The law, while promoting collective bargaining,
really aims at employee participation in policy and decision-
Any provision of law to the contrary notwithstanding, workers
making. Collective Bargaining is just one of the forms of
shall have the right, subject to such rules and regulations as the
employee participation. Despite so much interest in and
Secretary of Labor and Employment may promulgate, to
promotion of collective bargaining, it is incorrect to say that the
participate in policy and decision-making processes of the
device which secures industrial democracy is collective
establishment where they are employed insofar as said
bargaining and no other. And it is equally misleading to say that
processes will directly affect their rights, benefits and welfare.
collective bargaining is the end-goal of employee
For this purpose, workers and employers may form labor-
representation. Rather, the real aim is employee participation
management councils: Provided, That the representatives of
in whatever form it may appear—bargaining or no bargaining,
the workers in such labor-management councils shall be
union or no union.
elected by at least the majority of all employees in said
establishment. (As amended by Section 22, Republic Act No.
This is why Art. 255, second sentence, reserves the right of an
6715, March 21, 1989).
individual employee or group of employees (unionized or
________
ununionized, or inside or outside a union) to present grievances
to their employer at any time. Effectively voicing one’s
1. WORKERS’ PARTICIPATORY RIGHT: ITS CONSTITUTIONAL
grievance is reserved and hallowed by law, with or without
MEANING
collective bargaining.
The crucial question is: what is the meaning or extent of the
But individual representation in dealing or bargaining with the
workers’ right to participate in policy and decision-making?
employer is weak. For this reason the law provides another
forum—the labor-management council aside from or instead of
Enlightening in this regard are the deliberations of the 1986
a union. An LMC is versatile. It can exist where there is no union
Constitutional Commission. They reveal that the intention was
or co-exist with a union. One thing it cannot and must not do is
to refer to participation in grievance procedures and voluntary
to replace a union. While a labor union is hamstrung by such
modes of settling disputes and not to formulation of corporate
legal prescriptions as formal registration, limited bargaining
programs or policies.
unit, majority status, mandatory and non-mandatory subjects,
etc., an LMC need not be held back by any of these. It can
There are three levels in which employees could influence
represent employees across the enterprise, present grievances
management in their decision-making, and one would be at the
regardless of the grievant’s rank, and proffer proposals
corporate level. This would refer to strategic policies pertaining
unhindered by formalities. It can also handle projects and
to the mergers, acquisitions, pricing and marketing policies,
programs whoever is the proponent, form committees for
disposition of profits and the like. The second level would be
myriad purposes, instill discipline and improve productivity.
the plant or department level. It is here where administrative
decisions are made. Decisions made in this level may refer to
The LMC, in short, can deal with the employer on matters
hiring, firing, and promotion of employees, cost and quality
affecting the employees’ rights, benefits and welfare. “Dealing
control, resource allocations, achievement of target quotas,
with the employer,” we have seen, is broader, freer, and (from
etc. And the third will be the shop-floor level. It is here where
the employer’s viewpoint) less threatening method than
the so-called operating decisions are made. Decisions made in
collective bargaining.
this level usually refer to scheduling of work, safety regulations,
work methods, training of new employees. So these are the
2.1 Department’s Promotion of LMC and Other Councils
different levels in which we hope there would be this
democratic participation of workers in vital issues that affect Section 1. Creation of labor-management and other councils. - The
both management and the workers. Department shall promote the formation of labor-management
councils in organized and unorganized establishments to enable the
1.1 Employees’ Participation in Formulating the Code of workers to participate in policy and decision-making processes in the
Discipline establishment, insofar as said processes will directly affect their rights,
benefits and welfare, except those which are covered by collective
Indeed, it was only on March 2, 1989, with the approval of Republic Act bargaining agreements or are traditional areas of bargaining.
No. 6715, amending Article 211 of the Labor Code, that the law
explicitly considered it a State policy "(t)o ensure the participation of 3. INDIVIDUAL GRIEVANCE
workers in decision and policy-making processes affecting the rights,
duties and welfare." However, even in the absence of said clear As briefly indicated above, the presence of an employees’
organization,--a union, an LMC or other forum—does not
72 | P LATON
replace the individual employee’s right to pursue grievances.
Each employee retains the right to deal with his or her
employer, and vice-versa. The labor organization is a
representative of the collective employees, but this fact does
not mean that an employee can act only through the
representative. For these reasons, the law (rt. 255) explicitly
preserves and respects the right of an individual employee or
any group of employees to directly present grievances to their
employers at any time. Even when under investigation, an
employee can choose to handle personally his defense,
unassisted by any representative (Art. 277[b]). The second
sentence of Art. 255 is meant to be an exception to the
exclusiveness of the representative role of the labor
organization. Such individual right cannot be taken away even
by a union’s constitution and by-laws.
American jurisprudence holds that notwithstanding a union’s
obligation as exclusive bargaining representative to process the
grievances of all bargaining unit employees, individual
employees may at any time present grievances directly to the
employer for adjustment without the intervention of the
bargaining representative, and without subjecting the employer
to liability for refusing to bargain with the union. However, the
adjustment of the grievances must be consistent with the terms
of the current collective bargaining contract or agreement.
Moreover, the bargaining representative must be given the
opportunity to be present at the meeting between the
employer and employee.
4. COLLECTIVE BARGAINING UNIT (CBU) DEFINED
At the enterprise level there are three democratic devices,
statutorily embedded, to advance the cause of industrial peace,
namely: airing of grievance even by an individual employee
directly to the employer anytime; participation in policy and
decision-making by employees, whether unionized or not; and
collective bargaining with the employer by unionized
employees.
The collective bargaining that the law envisions occurs between
the employer and the employees comprised in an
“appropriate” collective bargaining unit (CBU) represented by a
union. As initially explained in Art. 234, the “CBU” is that group
of jobs and jobholders represented by the recognized or
certified union when it bargains with the employer. The
“group” may comprise all the supervisors or, separately, all the
rank-and-file population in the company. Or it may be less than
all of these two categories, although the law prefers to have
only one grouping per category in one enterprise because the
more solid the unit, the stronger its bargaining capacity. But if a
single unit (only one for all supervisors or only one for all rank-
and-file) is not feasible, the law allows subgroups as bargaining
units, provided only that each sub-group is “appropriate.” It is
appropriate if its members share substantially common
concerns and interests.
As defined in D.O. No. 40-03 which is now the revised Book V of
the Rules Implementing the Labor Code, “bargaining unit”
refers to a group of employees sharing mutual interests within
a given employer unit, comprised of all or less than all of the
entire body of employees in the employer unit or any specific
occupational or geographical grouping within such employer
unit.
Within one unit there may be one or more unions. The
bargaining unit therefore is not the same as, and usually a
bigger group than, a union. But only one union should
represent the whole CBU in bargaining with the employer. The
chosen union is called the bargaining agent, its principal being
the CBU members themselves.
The bargaining union has to be the majority union, the one
where majority of the CBU members belong.
“Representative union,” “bargaining union,” “majority union,”
“bargaining agent,” and “bargaining representative” are one
and the same. It refers to the union that represents the CBU in
bargaining or dealing with the employer.
5. APPROPRIATENESS OF BARGAINING UNIT; FACTORS
CONSIDERED
The determination of what constitutes a proper bargaining unit lies
primarily in the discretion of the Bureau, since no individual factor is
given by law decisive weight. But while the determination of the
appropriate collective bargaining unit (CBU) is a primary function of the
Bureau, it is subject to the legal requirement that proper consideration
should be given to all legally relevant factors.
The basic test of an asserted bargaining unit's acceptability is whether
or not it is fundamentally the combination which will best assure to all
employees the exercise of their collective bargaining rights. Industrial
experience indicates that the most efficacious bargaining unit is one
which is comprised of constituents enjoying a community of interest.
This community of interest is reflected in groups having substantial
similarity of work and duties or similarity of compensation and working
conditions.
In making judgments about “community of interest” in these
different settings, the Board will look to such factors as: (1)
similarity in the scale and manner of determining earnings; (2)
similarity in employment benefits, hours of work and other
terms and conditions of employment; (3) similarity in the kinds
of work performed; (4) similarity in the qualifications, skills and
training of the employees; (5) frequency of contact or
interchange among the employees; (6) geographic proximity;
(7) continuity or integration of production processes; (8)
common supervision and determination of labor-relations
policy; (9) history of collective bargaining; (10) desires of the
affected employees; or (11) extent of union organization.
Geographical location can be completely disregarded if the
communal or mutual interests of the employees are not
sacrificed.
5.1 Bargaining History Not Decisive Factor
The basic test of an asserted bargaining unit's acceptability is whether
or not it is fundamentally the combination which will best assure to all
employees the exercise of their collective bargaining rights.
5.2 Exclusion of Confidential Employees
By the very nature of their functions, they assist and act in a
confidential capacity to, or have access to confidential matters of,
persons who exercise managerial functions in the field of labor
relations. As such, the rationale behind the ineligibility of managerial
employees to form, assist or join a labor union equally applies to them.
5.3 Temporary or Part-Time Employees
73 | P LATON
The NLRB has been upheld in excluding temporary employees
from bargaining units of workers in certain jobs. In determining
whether temporary or part-time employees are sufficiently
identified with the regular employees, so as to be properly
included in the bargaining unit, one of the important factors
considered by the NLRB is the reasonable likelihood that the
temporary or part-time employees will eventually become
adequately identified in employment with the other members
of the bargaining unit.
5.4 Seasonal Employees
The full-time seasonal employees who have a reasonable
expectation of substantial seasonal employment from year to
year have been held properly included in the unit, but part-time
seasonal employees who receive none of the fringe benefits
enjoyed by full-time employees have insufficient common
interest with the full-time employees to be included in the
same bargaining unit.
5.5 Probationary Employees
The fact that an employee is given a classification such as
beginner, trainee or probationary employee, and the fact that
contemplation of permanent tenure is subject to satisfactory
completion of an initial trial period, are insufficient to warrant
such employee’s exclusion from a bargaining unit. Moreover,
the eligibility of probationary employees does not turn on the
proportion of such employees who, willingly or not, fail to
continue to work for the employer throughout the trial period.
6. REFERENDUM WHERE INTERESTS ARE DISSIMILAR
The decision then of the Executive Labor Arbiter in merely
directing the holding of a referendum “to determine the will of
the service engineers, sales representatives as to their inclusion
or exclusion in the bargaining unit” is the most appropriate
procedure that conforms with their right to form, assist or join
a labor union or organization.
6.1 Desire of the Employees; The Globe Doctrine
The desires of the employees are relevant to the determination
of the appropriate bargaining unit. The relevancy of the wishes
of employees concerning their inclusion or exclusion from a
proposed bargaining unit is inherent in the basic right to self
organization. While the desires of the employees with respect
to their inclusion in a bargaining unit is not controlling, it is a
factor which would be taken into consideration in reaching a
decision.
7. SINGLE OR “EMPLOYER UNIT” IS FAVORED
It has been the policy of the Bureau of Labor Relations to
encourage the formation of an employer unit unless
circumstances otherwise require. In other words, one employer
enterprise constitutes only one bargaining unit. The more solid
the employees are, the stronger is their bargaining capacity.
The proliferation of unions in an employer unit is discouraged
as a matter of policy unless there are compelling reasons which
would deny a certain class of employees the right to self-
organization for purposes of collective bargaining.
Single plant units are presumed to be appropriate for purposes
of collective bargaining.
Instead of forming another bargaining unit, the law requires them to be
members of the existing one. The ends of unionism are better served if
all the rank-and-file employees with substantially the same interests
and who invoke their right to self-organization are part of a single unit
so that they can deal with their employer with just one and yet potent
voice. The employees' bargaining power with management is
strengthened thereby.
7.1 Exception to One-unit Policy
The “one unit-one company” rule is not without exception. The
exclusion of the subject employees from the rank-and-file
bargaining unit and the CBA is definitely a “compelling reason,”
for it completely deprived them of the chance to bargain
collectively with petitioner and are thus left with no recourse
but to group themselves into a separate and distinct bargaining
unit and form their own organization.
The usual exception, of course, is where the employer unit has to give
way to the other units like the craft unit, plant unit, or a subdivision
thereof; the recognition of these exceptions takes into account the
policy to assure employees of the fullest freedom in exercising their
rights. Otherwise stated, the one company-one union policy must yield
to the right of the employees to form unions or associations for
purposes not contrary to law, to self-organization and to enter into
collective bargaining negotiations, among others, which the
Constitution guarantees.
8. TWO COMPANIES WITH RELATED BUSINESSES
Two corporations cannot be treated as a single bargaining unit
even if their businesses are related.
8.1 Subsidiaries and Spun-Off Corporations
Subsidiaries or corporations formed out of former divisions of a
mother company following a bona fide reorganization may
constitute separate bargaining units.
Moreover, in determining an appropriate bargaining unit, the test of
grouping is mutuality or commonality of interests. The employees
sought to be represented by the collective bargaining agent must have
substantial mutual interests in terms of employment and working
conditions as evinced by the type of work they performed. Considering
the spin-offs, the companies would consequently have their respective
and distinctive concerns in terms of the nature of work, wages, hours of
work and other conditions of employment. Interests of employees in
the different companies perforce differ. SMC is engaged in the business
of the beer manufacturing. Magnolia is involved in the manufacturing
and processing of dairy products while SMFI is involved in the
production of feeds and the processing of chicken. The nature of their
products and scales of business may require different skills which must
necessarily be commensurated by different compensation packages.
The different companies may have different volumes of work and
different working conditions. For such reason, the employees of the
different companies see the need to group themselves together and
organize themselves into distinctive and different groups. It would then
be best to have separate bargaining units for the different companies
where the employees can bargain separately according to their needs
and according to their own working conditions.
9. SUMMATION OF SIGNIFICANCE
It is helpful to reiterate that the bargaining unit is not the same
as the union; in fact, there may be several unions (majority and
minority) in one bargaining unit. Determining the scope or
74 | P LATON
“membership” of the bargaining unit is significant and far-
reaching because it leads to the determination also of: (1) the
employees who can vote in the certification election; (2) the
employees to be represented in bargaining with the employer;
and (3) the employees who will be covered by the resulting
CBA.
Distinguishing the CBU from the union is important because—
1. in a CE the voters are the CBU, whether union or non-union
members;
2. in CBA ratification the voters are the unit, not just the union
members;
3. in strike voting, the voters are the members of the union, not
all of the unit.
________
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 by any legitimate labor organization including a
national union or federation which has already issued a charter
certificate to its local chapter participating in the certification
election or a local chapter which has been issued a charter
certificate by the national union or federation before the
Department of Labor and Employment within the sixty (60)-day
period before the expiration of the 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
percent (50%) of the number of votes cast. In cases where the
petition was filed by a national union or federation, it shall not
be required to disclose the names of the local chapter’s officers
and members.
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. (As amended by Section 23, Republic Act No. 6715, March
21, 1989 and Section 10, Republic Act No. 9481 which lapsed
into law on May 25, 2007 and became effective on June 14,
2007).
________
Article 257. Petitions in Unorganized Establishments. - In any
establishment where there is no certified bargaining agent, a
certification election shall automatically be conducted by the
Med-Arbiter upon the filing of a petition by any legitimate labor
organization, including a national union or federation which has
already issued a charter certificate to its local/chapter
participating in the certification election or a local/chapter
which has been issued a charter certificate by the national
union or federation. In cases where the petition was filed by a
national union or federation, it shall not be required to disclose
the names of the local chapter’s officers and members. (As
amended by Section 24, Republic Act No. 6715, March 21, 1989
and Section 11, Republic Act No. 9481 which lapsed into law on
May 25, 2007 and became effective on June 14, 2007).
________
Article 258. When an employer may file petition. – When
requested to bargain collectively, an employer may petition the
Bureau for an election. If there is no existing certified collective
bargaining agreement in the unit, the Bureau shall, after
hearing, order a certification election.
All certification cases shall be decided within twenty (20)
working days.
The Bureau shall conduct a certification election within twenty
(20) days in accordance with the rules and regulations
prescribed by the Secretary of Labor.
________
Article 258-A. Employer as Bystander. - In all cases, whether the
petition for certification election is filed by an employer or a
legitimate labor organization, the employer shall not be
considered a party thereto with a concomitant right to oppose
a petition for certification election. The employer’s
participation in such proceedings shall be limited to:
(1) being notified or informed of petitions of such nature; and
(2) submitting the list of employees during the pre-election
conference should the Med-Arbiter act favorably on the
petition. (As amended by Section 12, Republic Act No. 9481
which lapsed into law on May 25, 2007 and became effective
on June 14, 2007).
________
Article 259. Appeal from certification election orders. – Any
party to an election may appeal the order or results of the
election as determined by the Med-Arbiter directly to the
Secretary of Labor and Employment on the ground that the
rules and regulations or parts thereof established by the
Secretary of Labor and Employment for the conduct of the
election have been violated. Such appeal shall be decided
within fifteen (15) calendar days. (As amended by Section 25,
Republic Act No. 6715, March 21, 1989).
________
1. DETERMINING THE BARGAINING UNION: OVERVIEW OF THE
METHODS
To bargain with the employer, the employees in the collective
bargaining unit (CBU) can be represented by one and only one
union which has to be a legitimate labor organization duly
designated or selected by the employees in the CBU.
Under the Code a “bargaining representative” is defined as a
“legitimate labor organization or any officer or agent of such
organization whether or not employed by the employer.” The
Implementing Rules, however, as amended by D.O. No. 40-03
drops the “officer or agent” as it states: “Exclusive bargaining
representative means any legitimate labor union duly
recognized or certified as the sole and exclusive bargaining
75 | P LATON
representative or agent of all the employees in a bargaining
unit.”
The selection of such bargaining agent may take place in an
organized or an unorganized establishment. “Organized
establishment” refers to an enterprise where there exists a
recognized or certified sole and exclusive bargaining agent. The
employer company is “unorganized” where no union has yet
been duly recognized or certified as bargaining representative.
Art. 256 speaks of an organized firm; Art. 257, of the
unorganized.
Whether the proceedings take place in an organized or an
unorganized bargaining unit, and whether the proceedings are
called consent election or certification election, the objective is
the same, namely, to identify the union that will represent the
employees in bargaining with the employer. Until this
representation dispute is resolved, no CBA can be entered into.
In an unorganized establishment, the employer may voluntarily
recognize the bargaining agent. If there are obstacles to this,
the petition to hold an election may be filed anytime by any
legitimate labor organization (LLO), except within 12 months
from a previous CE, run-off, or consent election.
In an organized establishment, on the other hand, voluntary
recognition is not possible. A petition to hold a CE has to be
filed within the “freedom period” which means the last sixty
(60) days of the fifth year of the expiring CBA; in other words,
the contest between unions comes at intervals of roughly four
years and ten months. The petition may be filed by any LLO, but
the petition must have the written support of at least twenty-
five percent (25%) of the employees in the bargaining unit. The
25% initial support indicates that the petitioner has a fair
chance of winning and that the petition is not just a nuisance.
Conceivably but rarely an employer may also file a petition for a
CE.
The election is conducted under the supervision and control of
DOLE officials. It ends up with a formal and official statement of
results, certifying which union won, if any. Hence, the election
is appropriately called “certification election.”
Where one casting of votes is not decisive enough to elect a
union, the election officials may require a run-off election if
certain other conditions exist, as explained below.
But a certification election, a run-off election, or a consent
election is needed only when two or more unions are vying for
the “office” of exclusive bargaining representative (EBR).
Where there is but one union in the bargaining unit and there is
ample proof that that union carries the majority of the
employees, the law allows the employer to voluntarily
recognize such union. Voluntary recognition does away with
the more tedious electoral contest between unions.
There are, therefore, three methods to determine the
bargaining union: (1) voluntary recognition; (2) certification
election with or without run-off; and (3) consent election.
2. FIRST METHOD: VOLUNTARY RECOGNITION (V.R.)
The employer’s voluntary recognition of the employees’ union
significantly facilitates the bargaining process. The employees,
especially the union leaders and organizers, rejoice when they
are able to convince the employer to voluntarily recognize and
subsequently bargain with their union. But VR requires three
concurrent conditions.
First, voluntary recognition is possible only in an unorganized
establishment. In an organized setting the employer cannot
voluntarily recognized any new union because the law (Art.
256) requires him to continue recognizing and dealing with the
incumbent union as long as it has not been properly replaced
by another union.
Second, only one union is asking for recognition; if there are
two or more unions asking to be recognized the employer
cannot recognize any of them; the rivalry must be resolved
through an election;
Third, the union voluntarily recognized should be the majority
union as indicated by the fact that members of the bargaining
unit did not object to the projected recognition. If no objection
is raised, the recognition will proceed, the DOLE will be
informed and CBA negotiation will commence. If objection is
raised, the recognition is barred, and a certification election or
consent election will have to take place.
2.1 VR Under D.O. No. 40-03
Section 1. When and where to file. - In unorganized establishments
with only one legitimate labor organization, the employer may
voluntarily recognize the representation status of such a union. Within
thirty (30) days from such recognition, the employer and union shall
submit a notice of voluntary recognition with the Regional Office which
issued the recognized labor union's certificate of registration or
certificate of creation of a chartered local.
Section 2. Requirements for voluntary recognition. - The notice of
voluntary recognition shall be accompanied by the original copy and
two (2) duplicate copies of the following documents:
(a) a joint statement under oath of voluntary recognition attesting to
the fact of voluntary recognition;
(b) certificate of posting of the joint statement of voluntary recognition
for fifteen (15) consecutive days in at least two (2) conspicuous places
in the establishment or bargaining unit where the union seeks to
operate;
(c) the approximate number of employees in the bargaining unit,
accompanied by the names of those who support the voluntary
recognition comprising at least a majority of the members of the
bargaining unit; and
(d) a statement that the labor union is the only legitimate labor
organization operating within the bargaining unit.
All accompanying documents of the notice for voluntary recognition
shall be certified under oath by the employer representative and
president of the recognized labor union.
Section 3. Action on the Notice. - Where the notice of voluntary
recognition is sufficient in form, number and substance and where
there is no other registered labor union operating within the bargaining
unit concerned, the Regional Office, through the Labor Relations
Division shall, within ten (10) days from receipt of the notice, record the
fact of voluntary recognition in its roster of legitimate labor unions and
notify the labor union concerned.
Where the notice of voluntary recognition is insufficient in form,
number and substance, the Regional Office shall, within the same
period, notify the labor union of its findings and advise it to comply
76 | P LATON
with the necessary requirements. Where neither the employer nor the
labor union failed to complete the requirements for voluntary
recognition under Section 2 of this Rule within thirty (30) days from
receipt of the advisory, the Regional Office shall return the notice for
voluntary recognition together with all its accompanying documents
without prejudice to its re-submission.
Section 4. Effect of recording of fact of voluntary recognition. - From
the time of recording of voluntary recognition, the recognized labor
union shall enjoy the rights, privileges and obligations of an existing
bargaining agent of all the employees in the bargaining unit.
Entry of voluntary recognition shall bar the filing of a petition for
certification election by any labor organization for a period of one (1)
year from the date of entry of voluntary recognition. Upon expiration of
this one-year period, any legitimate labor organization may file a
petition for certification election in the same bargaining unit
represented by the voluntarily recognized union, unless a collective
bargaining agreement between the employer and voluntarily
recognized labor union was executed and registered with the Regional
Office in accordance with Rule XVII of these Rules.
Simply said, the last paragraph means that the employer and
the union should conclude and register a CBA within one year
from the voluntary recognition, otherwise, the recognition will
lapse and a rival union may petition for a certification election.
3. SECOND METHOD: CERTIFICATION ELECTION (C.E.)
Whenever there is doubt as to whether a particular union represents
the majority of the rank-and-file employees, in the absence of a legal
impediment, the holding of a certification election is the most
democratic method of determining the employees' choice of their
bargaining representative. It is the appropriate means whereby
controversies and disputes on representation may be laid to rest, by
the unequivocal vote of the employees themselves.
Exercising their suffrage through the medium of the secret ballot, they
can select the exclusive bargaining representative that, emboldened by
their confidence and strengthened by their support shall fight for their
rights at the conference table. That is how union solidarity is achieved
and union power is increased in the free society. Hence, rather than
being inhibited and delayed, the certification election should be given
every encouragement under the law, that the will of the workers may
be discovered and, through their freely chosen representatives,
pursued and realized.
3.1 Fact-Finding
In labor legislation, certification proceedings is not a litigation in
the sense in which the term is ordinarily understood, but an
investigation of non-adversary and fact finding character. As
such, it is not bound by technical rules of evidence.
The law does not contemplate the holding of a certification
election unless the preliminary inquiry shows a reasonable
doubt as to which of the contending unions represents a
majority, or unless ten per centum of the laborers demand this
election. But these grounds necessarily depend on the weight
of the evidence adduced by the rival unions, and this weight, in
turn, cannot be determined properly if the right to cross
examination is denied.
Certification proceedings directly involve only two issues: (a)
proper composition and constituency of the bargaining unit;
and (b) veracity of majority membership claims of the
competing unions so as to identify the one union that will serve
as the bargaining representative of the entire bargaining unit.
But some of the employees may not want to have a union;
hence, “No Union” is one of the choices (“candidates”) named
in the ballot. If “No Union” wins, the company pr the bargaining
unit remains ununionized for at least 12 months, the period
known as the 12-month bar. After that period, a petition for a
CE may be filed again.
3.1a Certification Election Differentiated from Union Election
A union election is held pursuant to the union's constitution and
bylaws, and the right to vote in it is enjoyed only by union members. A
union election should be distinguished from a certification election,
which is the process of determining, through secret ballot, the sole and
exclusive bargaining agent of the employees in the appropriate
bargaining unit, for purposes of collective bargaining. Specifically, the
purpose of a certification election is to ascertain whether or not a
majority of the employees wish to be represented by a labor
organization and, in the affirmative case, by which particular labor
organization.
In a certification election, all employees belonging to the appropriate
bargaining unit can vote. Therefore, a union member who likewise
belongs to the appropriate bargaining unit is entitled to vote in said
election. However, the reverse is not always true; an employee
belonging to the appropriate bargaining unit but who is not a member
of the union cannot vote in the union election, unless otherwise
authorized by the constitution and bylaws of the union. Verily, union
affairs and elections cannot be decided in a non-union activity.
The winners in a union election become officers and
representatives of the union only. The winner in a certification
election is an entity, a union, which becomes the
representative of the whole bargaining unit that includes even
the members of the defeated unions.
3.2 Direct Certification No Longer Allowed
Even in a case where a union has filed a petition for
certification election, the mere fact that there was no
opposition does not warrant a direct certification.
The holding of a certification election at the proper time is not
necessarily a mere formality as there was a compelling legal reason not
to directly and unilaterally certify a union whose legitimacy is precisely
the object of litigation in a pending cancellation case filed by certain
"concerned salesmen," who also claim majority status.
The direct certification originally allowed under Article 257 of the Labor
Code has apparently been discontinued as a method of selecting the
exclusive bargaining agent of the workers. This amendment affirms the
superiority of the certification election over the direct certification
which is no longer available now under the change in said provision.
3.3 Who Files Petition for CE
Any legitimate labor organization or any employer, when
requested to bargain collectively while the majority status of
the union is in doubt, may file a petition for certification
election (PCE)
In an unorganized establishment one a petition is filed by a
legitimate labor organization, the Med-arbiter shall
automatically order the conduct of a certification election. The
tenor of Article 257 is one of command, so such order is not
appealable. To make it appealable will contradict the objective
stated in Article 211, to promote free trade unionism. But the
application of Article 257 has to be initiated by a genuine
petition from a legitimate labor organization. Indeed, the law
77 | P LATON
did not reduce the Med-Arbiter to an automaton which can
instantly be set to impulse by the mere filing of a petition for
certification election. He is still tasked to satisfy himself that all
the conditions of the law are met, and among the legal
requirements is that the petitioning union must be a legitimate
labor organization in good standing.
In an organized establishment the incumbent bargaining agent,
of course, will not file a PCE because it will not contest its own
incumbency. The filer will most likely be a union that was
defeated in the CE held some five years before. In any such
petition the incumbent union is a necessary party, a forced
intervenor. But even so, it does not thereby lose its
representative status; it remains the sole bargaining
representative until it is replaced by another. And until so
replaced it has the right to retain the recognition by the
employer.
The employer, says Article 258, may file a PCE when it has been
asked to bargain. If this happens, the holding of the CE
becomes mandatory if there is no existing registered collective
bargaining agreement. However, instead of itself filing a
petition, the employer usually lets the unions interplead to
determine who among them will bargain with the employer.
Other unions which are interested in joining a certification
election may file a motion for intervention. Such motion is
governed by the same rules that apply to a PCE.
Whether petitioner or intervenor, the union has to be an LLO.
If the petition for certification election was filed by the federation
which is merely an agent, the petition is deemed to be filed by the
chapter, the principal, which must be a legitimate labor organization.
The chapter cannot merely rely on the legitimate status of the mother
union.
Where the constitution, by-laws and the list of members who
supposedly ratified the same were not attested to by the union
president, and the constitution and by-laws were not verified under
oath, the local union has no personality to file a petition for
certification election it not being a legitimate labor organization. The
petition should be dismissed.
A union that has no legal personality to file a petition for CE has no
personality either to file a petition-in-intervention.
3.4 Where to File the Petition for CE
A petition for certification election (PCE) shall be filed with the
Regional Office which issued the petitioning union’s certificate
of registration or certificate of creation of chartered local. The
petition shall be heard and resolved by the Med-Arbiter.
Where two or more petitions involving the same bargaining
unit are filed in one Regional Office, the same shall be
automatically consolidated with the Med-Arbiter who first
acquired jurisdiction. Where the petitions are filed in different
Regional Offices, the Regional Office in which the petitions are
first filed shall exclude all others; in which case, the latter shall
indorse the petition to the former for consolidation.
3.5 When to File the Petition
The proper time to file a petition for CE depends on whether
the CBU has a CBA or not. If it has no CBA , the petition may be
filed anytime outside the 12-month bar. If it has a CBA, it can be
filed only within the last 60 days of the fifth year of the CBA.
3.6 Action on the Petition: Preliminary Conference
The preliminary conference shall determine the following:
(a) the bargaining unit to be represented;
(b) contending labor unions;
(c) possibility of a consent election;
(d) existence of any of the bars to certification election under
Section3 of D.O. No. 40-03;
(e) such other matters as may be relevant for the final
disposition of the case.
If at the preliminary conference the unions agree to hold a
consent election, then the PCE will no longer be heard and the
unions will instead prepare for the consent election.
If the unions fail to agree to hold a consent election, the Med-
arbiter proceeds to consider the petition. He may deny and
dismiss, or he may grant, the petition. Denial or grant of the
petition is always appealable to the Secretary. Never
appealable, however, is the approval of a PCE in an unorganized
(ununionized) bargaining unit, the reason being that the law
wants the ununionized unionized.
3.7 Action on the Petition: Hearings and Pleadings
If the contending unions fail to agree to a consent election
during the preliminary conference, the Med-arbiter may
conduct as many hearings as he may deem necessary. But the
conduct of the hearings cannot exceed fifteen (15) days from
the date of the scheduled preliminary conference/ hearing.
After that time the petition shall be considered submitted for
decision. The Med-arbiter shall have control of the proceedings.
Postponements or continuances are discouraged.
The failure of any party to appear in the hearing(s) when
notified or to file its pleadings shall be deemed a waiver of its
right to be heard. The Med-arbiter, however, upon the
agreement of the parties for meritorious reasons, may allow
the cancellation of scheduled hearing(s). The cancellation of
any scheduled hearing(s) shall not be used as a basis for
extending the 15-day period within which to terminate the
same.
Within ten (10) days from the date of the last hearing, the Med-
arbiter shall issue a formal order denying or granting the
petition. In organized establishments, however, no order or
decision shall be issued by the Med-arbiter during the freedom
period.
The reason for the last-mentioned rule is that during the entire
60-day freedom period, up to its last day, the door should
remain open for any union to file a PCE or a motion for
intervention.
3.8 Action on the Petition: Denial; Grounds
78 | P LATON
The Med-arbiter, after due hearing may dismiss the petition on
any of the following grounds:
(1) Not an LLO
(2) Twelve-month Bar
(3) Negotiation Bar or Deadlock Bar
(4) No 25% Support
(5) Contract Bar; PCE Filed Outside the Freedom Period
The first three grounds are applicable to establishments with or
without a CBA; the last two are pertinent only to an
establishment with a CBA about to expire on its fifth year.
3.8a Ground 1: Petitioner not an LLO
Excepting Article 258, only a legitimate labor organization (LLO)
can file a petition for certification election. Thus, if the
petitioning union is not listed in the DOLE’s list of LLOs or it has
no CBA registered in the DOLE, these facts raise doubt as to its
being an LLO, and the med-arbiter may dismiss the PCE.
But even if the union is listed as LLO or is a party to a CBA, its
legitimacy may still be questioned in a separate and
independent petition for cancellation to be heard and decided
by the BLR Director or the Regional Director himself.
Does the filing of a petition to cancel the petitioner’s
registration cause the suspension or dismissal of the PCE? No,
the mere filing foes not. To serve as a ground for dismissal of a
PCE, the legal personality of the petitioner should have been
revoked or cancelled “with finality.”
The filing or pendency of any inter/intra-union dispute and other
related labor relations dispute is not a prejudicial question to any
petition for certification election and shall not be a ground for the
dismissal of a petition for certification election or suspension of
proceedings for certification election.
The justification for this rule is that the employees’ opportunity
to choose a bargaining agent can easily be blocked or
forestalled by an employer through the simple expedience of
questioning the legitimacy of the petitioner union.
Suspension of Proceedings: “Company Union” Charge
A complaint for unfair labor practice may be considered a prejudicial
question in a proceeding for certification election when it is charged
therein that one or more labor unions participating in the election are
being aided, or are controlled, by the company or employer. The reason
is that the certification election may lead to the selection of an
employer-dominated or company union as the employees’ bargaining
representative, and when the court finds that said union is employer-
dominated in the unfair labor practice case, the union selected would
be decertified and the whole election proceedings would be rendered
useless and nugatory.
NONETHELESS, a certification election cannot be stayed during
the pendency of unfair labor practice charge against a union
filed by the employer.
Similarly, certification election may be ordered despite
pendency of a petition to cancel the union’s registration
certificate founded on alleged illegal strike by the union.
3.8b Ground 2: The 12-month Bar (certification year bar)
No petition for a CE may be filed within one year from the date
of a valid certification, consent, or run-off election or from the
date of entry of a voluntary recognition of the union by the
employer. Thus, if an election had been held but not one of the
unions won a PCE may be filed again but only after 12 months.
The law does not want more than one election in a 12-month
period. The same bar applies if “No Union” won in the previous
election.
On the other hand, if a union has won, such union and the
employer must within 12 months start negotiating a collective
agreement. If they fail to do so, they are defeating the
employees’ wish to have a CBA; hence, the union or unions that
lost can petition again for a certification election after 12
months from the last election so as to replace the unproductive
bargaining agent which, perhaps, is cavorting with the
employer.
Ordinarily, a bargaining agent who failed to secure a CBA within 12
months could be suspected as a tool of management and should
deserve to be replaced. But if circumstances show that the cause of not
having concluded a CBA was not the union’s fault, such union should
not be blamed, and a CE should not be authorized even though no CBA
has been concluded despite passage of twelve months. The situation
takes the nature of a “deadlock bar.”
The 12-month prohibition presupposes that there was an actual
conduct of election i.e. ballots were cast and there was a counting of
votes. In this case, there was no certification election conducted
precisely because the first petition was dismissed, on the ground of a
defective petition which did not include all the employees who should
be properly included in the collective bargaining unit, the certification
year bar does not apply.
Neither does this bar apply if in fact there was a failure of
election because less than majority of the CBU members voted.
In that case, another PCE may be filed within six (6) months.
An election held less than a year after an invalid election is not
barred. Also not barred would be a second election held among
a group of employees who had not participated in the first
election and had not been given the opportunity to be
represented as part of the unit in the first election.
A radical change in the size of a bargaining unit within a short
period of time, raising a question as to the majority status of
the certified representative, may also prompt the NLRB to
entertain a petition for an election during the certification year.
The one-year rule does not apply to a unit clarification petition
filed during the certification year.
In a CE, the “No Union” choice won. Within 12 months from
that election the employer voluntarily recognized a new union
and then concluded with it a CBA. Is the 12-month bar violated?
Are the recognition and the CBA valid?
Excepted from the contract-bar rule are certain types of contracts
which do not foster industrial stability, such as contracts where the
identity of the representative is in doubt. Any stability derived from
such contracts must be subordinated to the employees' freedom of
choice because it does not establish the kind of industrial peace
contemplated by the law.
79 | P LATON
In other words, the court strongly doubted that the union
voluntarily recognized by the employer was really the
employees’ choice. Most probably, it was a company union.
3.8c Ground 3: Negotiation or Deadlock Bar
Neither will a PCE prosper if the negotiation is caught in a
deadlock. The deadlock does not erase that fact that there is
negotiation which is a barrier to holding a certification election.
The parties should be allowed to try to resolve their deadlock;
replacing the negotiating union will not help.
The “Deadlock Bar” Rule simply provides that a petition for
certification election can only be entertained if there is no
pending bargaining deadlock submitted to conciliation or
arbitration or had become the subject of a valid notice of strike
or lockout. The principal purpose is to ensure stability in the
relationship of the workers and the management.
A "deadlock" is the counteraction of things producing entire stoppage;
there is a deadlock when there is a complete blocking or stoppage
resulting from the action of equal and opposed forces. The word is
synonymous with the word impasse, which "presupposes reasonable
effort at good faith bargaining which, despite noble intentions, does
not conclude in agreement between the parties."
If the law proscribes the conduct of a certification election when there
is a bargaining deadlock submitted to conciliation or arbitration, with
more reason should it not be conducted if, despite attempts to bring an
employer to the negotiation table by the "no reasonable effort in good
faith" on the employer certified bargaining agent, there was to bargain
collectively. It is only just and equitable that the circumstances in this
case should be considered as similar in nature to a "bargaining
deadlock" when no certification election could be held.
“Deadlock Bar” Rule, When Not Applicable; Artificial Deadlock
The deadlock that bars a CE must be genuine and not a drama.
One indicator that it is genuine is the submission of the
deadlock to a third-party conciliator or arbitrator. Another is
that the deadlock is the subject of a valid notice of strike or
lockout. An artificial deadlock—a deadlock prearranged or
preserved by collusion of the employer and the majority
union—is deception of the workers, hence, not a barrier to a
petition for a CE.
3.8d Ground 4: 25 Percent Support to PCE
Article 256 requires that the petition for a CE in an organized
establishment which may be filed within the “freedom period”
should be supported by at least twenty-five percent (25%) of
the bargaining unit.
The support requirement is explained by government policy to
favor the self-organization of workers. In a company still
unorganized the workers should find it easy to organize, but
one a union has established itself as the employees’
representative, it should not be so easy for another union to
replace the incumbent. Trying to so will disturb the peace in the
enterprise. To justify the disturbance, it must appear that a
sizeable portion of the employees—at least 25%—desires to
have a new union. Without this minimum support the challenge
to the incumbent looks like a nuisance.
The CBU, Not the Enterprise
If a company’s rank-and-file employees are unionized but the
supervisors are not, does the supervisors’ petition need the
25% minimum support?
NO, because the company is considered unorganized. The
petition for CE involves only the supervisors, not the rank-and-
file. Insofar as the supervisors are concerned, the
“establishment” is considered ununionized. Hence the
requirement for 25% support to the petition does not apply.
In other words, in deciding whether the 25% requirement is
applicable or not, the law considers the CBU involved, not the
whole enterprise. This, again, makes it easy for workers to
unionize, a basic objective of labor relations law.
Election Despite Lack of 25 Percent Support
Even in the situation where the 25% is needed. This
requirement may be relaxed.
Compliance with the said requirement need not even be established
with absolute certainty. The Court has consistently ruled that "even
conceding that the statutory requirement of 30% of the labor force
asking for a certification election had not been strictly complied with,
respondent Director is still empowered to order that it be held precisely
for the purpose of ascertaining which of the, contending labor
organizations shall be the exclusive collective bargaining agent."
Effect of Withdrawal of Signatories
If a petition for a certification election lacks the 25% support
because a sizeable number of union members has withdrawn
their membership, may the petition still be granted? Or must it
be dismissed? A critical fact to consider is whether the
withdrawal happened before or after the filing of the petition.
If it happened before the filing, the withdrawal is presumed
voluntary and it does not affect the propriety of the petition; if
after, the withdrawal is deemed involuntary (perhaps
pressured by the employer) and it does not necessarily cause
the dismissal of the petition
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 withdrawal
their support.
3.8e Ground 5: PCE Filed Outside the Freedom Period; the
Contract Bar
This means that there exists in the bargaining unit a CBA still in
effect at the time the PCE is filed. The ban spans a period of five
80 | P LATON
years, excluding, however, the last sixty (60) days of the fifth
(last) year of the CBA.
The contract bar rule prohibits the filing of a petition for certification
election during the existence of a collective bargaining agreement
except within the freedom period, as it is called, when the said
agreement is about to expire. The purpose, obviously, is to ensure
stability in the relationships of the workers and the management by
preventing frequent modifications of any collective bargaining
agreement earlier entered into by them in good faith and for the
stipulated original period.
The “freedom period” under Articles 253-A and 256 is different
from and ought not to be mistaken for the other sixty-day
period mentioned in Art. 253. The latter speaks of the right of
the parties to propose modifications to the existing CBA, as an
exception to the rule that the CBA cannot be modified during
its lifetime. To clarify terms, the sixty days in Art. 253 may be
called “renegotiation notice period” or simply “notice/proposal
period,” in contrast to the “freedom period” under Arts. 253-A
and 256.
The notice period is the last 60 days of the second or third year
of the nonrepresentational provisions; the freedom period is
the last 60 days of the CBA’s fifth year of the representational
aspect. The notice period is an economic event involving the
employer and the bargaining union; the freedom period is a
political event involving only the unions and the employees.
The two periods, of course, may coincide on the fifth year of
the CBA.
Registered CBA
To bar a certification election it is no longer necessary that the
CBA be “certified”; it is enough that it is registered in
accordance with Art. 231.
Contract-Bar Rule Applied: Extended CBA Under Deadlock
No petition for certification election may be filed before the
onset of the freedom period not after such period. The old CBA
is extended until a new one is signed.
Section 6, Rule V, Book V of the implementing Rules provides that a
petition for certification election or a motion for intervention can only
be entertained within sixty days prior to the expiry date of an existing
collective bargaining agreement. Otherwise put, the rule prohibits the
filing of a petition for certification election during the existence of a
collective bargaining agreement except within the freedom period, as it
is called, when the said agreement is about to expire.
Article 253 of the Labor Code provides 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." Despite
the lapse of the formal effectivity of the CBA the law still considers the
same as continuing in force and effect until a new CBA shall have been
validly executed. Hence, the contract bar rule still applies.
Contract-Bar Rule Applied: Unproved Surreptitious Registration
of CBA
Even if the existing CBA is registered surreptitiously, as alleged
by the petitioner union, but no evidence is presented proving
the alleged surreptitious registration, the petition for CE cannot
be granted. The contract-bar rule applies. Whether or not the
CBA was indeed surreptitiously registered is a factual matter
whose determination is outside the ambit of a petition for
certiorari.
Contract-Bar Rule Not Applied: (a) Defective CBA
To be a bar to a certification election, the CBA must be adequate in that
it comprises substantial terms and conditions of employment.
(b) Referendum to Register on Independent Union
This referendum is neither union disaffiliation nor severance; it is not
disallowed by law even while a CBA exists.
(c) CBA Signed Before or Within Freedom Period Despite
Injunctive Order
A collective bargaining agreement which was prematurely renewed is
not a bar to the holding of a certification election. Such indecent haste
in renewing the CBA despite an order enjoining them from doing so is
designed to frustrate the constitutional right of the employees to self-
organization. Moreover, We cannot countenance the actuation of the
petitioner and the management in this case which is not conducive to
industrial peace.
Validity of CBA Signed During Representation Dispute
It is true that the contract-bar rule does not apply during the “freedom
period”; i.e., within that period a petition for CE may be entertained.
But it is equally true that the petition for CE does not bar the employer
and the incumbent union from renegotiating and renewing the expiring
CBA. In other words, a CBA may be renegotiated before, during, or after
the 60-day freedom period. But if during such period a PCE is filed, the
Med-arbiter can order the suspension of the renegotiation until the
representation proceedings finally end.
The law is attempting a balancing feat. By allowing a PCE during
the freedom period the law preserves democratic between
unions, and, in the same breadth, by allowing CBA
renegotiation during the same freedom period, the law
safeguards the opportunity to possibly upgrade the employees’
employment condition.
The question may be asked: What would be the effect on the
renegotiated CBA if a union other than the one that executed it
should win the CE? In a pertinent case, it was held that the
union thus certified would have to respect the contract, but
that it may bargain with the management to shorten the life of
the contract if it is too long.
When a collective bargaining agreement is entered into at a time when
the petition for certification election had already been filed by a union
and was then pending resolution, the said CBA cannot be deemed
permanent, precluding the commencement of negotiations by another
union with the management. In the meantime however, so as not to
deprive the workers of the benefits of the said agreement, it shall be
recognized and given effect on a temporary basis, subject to the results
of the certification election. The agreement may be continued in force
if the union is certified as the exclusive bargaining representative of the
workers or may be rejected and replaced in the event that the rival
emerges as the winner.
But in a 2005 decision the Court took one step further. It
invalidated the hasty recognition of a union and the signing of a
CBA with that union where such acts were done while there
was a pending petition for certification election by another
union.
Basic to the contract bar rule is the proposition that the delay of the
right to select representatives can be justified only where stability is
81 | P LATON
deemed paramount. Excepted from the contract bar rule are certain
types of contracts which do not foster industrial stability, such as
contracts where the Identity of the representative is in doubt. Any
stability derived from such contracts must be subordinated to the
employees' freedom of choice because it does not establish the type of
industrial peace contemplated by the law.
A CBA automatically renewed usually operates as a bar to a certification
election. But it is not a bar if the employer has served notice that it will
terminate the contract if and when the union no longer represents the
majority of the employees.
3.9 Invalid Grounds for the Denial/Suspension of the Petition
Questions pertaining to the validity of petitioning union’s
certificate of registration, or its legal personality as a labor
organization, or the validity of registration and execution of
collective bargaining agreements shall be heard and resolved
by the Regional Director in an independent petition for
cancellation of the union’s registration. They are not reasons
for the Med-arbiter to suspend hearing the PCE. However, the
Med-arbiter himself may rule on the objection if the pending
union is not found in the Department’s roster of legitimate
labor organizations or an alleged collective bargaining
agreement is unregistered with the Department.
3.9a Authority to Decide Existence of Employer-Employee
Relationship; Med-Arbiter’s Order Appealable to Secretary
Does the Med-arbiter or the Secretary of Labor and
Employment have the authority to determine the existence of
an employer-employee relationship between the parties in a
petition for certification election?
All issues pertaining to the existence of employer-employee
relationship or to eligibility to union membership shall be
resolved in the order or decision ranting or denying the petition
for certification election. In other words, those issues do not
stall the PCE and they are not grounds for dismissing a PCE.
It is absurd to suggest that the med-arbiter and Secretary of Labor
cannot make their own independent finding as to the sentence of such
relationship and must have to rely and wait for such a determination by
the labor arbiter or NLRC in a separate proceeding. For then, given a
situation where there is no separate complaint filed with the labor
arbiter, the med-arbiter and/or the Secretary of Labor can never decide
a certification election case or any labor-management dispute properly
brought before them as they have no authority to determine the
existence of an employer-employee relationship. Such a proposition is,
to say the least, anomalous.
Once there is a determination as to the existence of such a relationship,
the med-arbiter can then decide the certification election case. 9 As the
authority to determine the employer-employee relationship is
necessary and indispensable in the exercise of jurisdiction by the med-
arbiter, his finding thereon may only be reviewed and reversed by the
Secretary of Labor who exercises appellate jurisdiction under Article
259 of the Labor Code, as amended.
It is apparent that incidental to the power of the med-arbiter to
hear and decide representation cases is the power to
determine who the eligible voters are. In so doing, it is
axiomatic that the med-arbiter should determine the legality of
the employees' membership in the union.
3.10 Action on the Petition: Is the Employer a Bystander? See
Art. 258-A
3.10a Employer a Bystander; Cannot Oppose PCE
3.11 Action on the Petition: Approval
Section 13. Order/Decision on the petition. - Within ten (10) days from
the date of the last hearing, the Med-Arbiter shall issue a formal order
granting the petition or a decision denying the same. In organized
establishments, however, no order or decision shall be issued by the
Med-Arbiter during the freedom period.
The order granting the conduct of a certification election shall state the
following:
(a) the name of the employer or establishment;
(b) the description of the bargaining unit;
(c) a statement that none of the grounds for dismissal enumerated in
the succeeding paragraph exists;
(d) the names of contending labor unions which shall appear as follows:
petitioner union/s in the order in which their petitions were filed,
forced intervenor, and no union; and
(e) a directive upon the employer and the contending union(s) to
submit within ten (10) days from receipt of the order, the certified list
of employees in the bargaining unit, or where necessary, the payrolls
covering the members of the bargaining unit for the last three (3)
months prior to the issuance of the order
3.12 Appeal of Order Granting or Denying Petition
Section 17. Appeal. - The order granting the conduct of a certification
election in an unorganized establishment shall not be subject to appeal.
Any issue arising therefrom may be raised by means of protest on the
conduct and results of the certification election.
The order granting the conduct of a certification election in an
organized establishment and the decision dismissing or denying the
petition, whether in an organized or unorganized establishment, may
be appealed to the Office of the Secretary within ten (10) days from
receipt thereof.
The appeal shall be verified under oath and shall consist of a
memorandum of appeal, specifically stating the grounds relied upon by
the appellant with the supporting arguments and evidence.
In short, denial of any petition for CE is always appealable, but
never appealable is the approval of any PCE in an enterprise
still ununionized. The reason is sound and simple: the law
wants to unionized the ununionized.
Section 18. Where to file appeal. - The memorandum of appeal shall be
filed in the Regional Office where the petition originated, copy
furnished the contending unions and the employer, as the case may be.
Within twenty-four (24) hours from receipt of the appeal, the Regional
Director shall cause the
transmittal thereof together with the entire records of the case to the
Office of the Secretary.
Section 19. Finality of Order/Decision. - Where no appeal is filed within
the ten-day period, the Med-Arbiter shall enter the finality of the
order/decision in the records of the case and cause the transmittal of
the records of the petition to the Regional Director.
Section 20. Period to Reply. - A reply to the appeal may be filed by any
party to the petition within ten (10) days from receipt of the
memorandum of appeal. The reply shall be filed directly with the Office
of the Secretary.
Section 21. Decision of the Secretary. - The Secretary shall have fifteen
(15) days from receipt of the entire records of the petition within which
82 | P LATON
to decide the appeal. The filing of the memorandum of appeal from the
order or decision of the Med-Arbiter stays the holding of any
certification election.
The decision of the Secretary shall become final and executory after ten
(10) days from receipt thereof by the parties. No motion for
reconsideration of the decision shall be entertained.
Section 22. Transmittal of records to the Regional Office. - Within forty-
eight (48) hours from notice of receipt of decision by the parties and
finality of the decision, the entire records of the case shall be remanded
to the Regional Office of origin for implementation. Implementation of
the decision shall not be stayed unless restrained by the appropriate
court.
May a certification election be held legally upon petition of
Union B while a petition for CE by Union A is pending on appeal
at the Office of the Secretary? No, the appeal should first be
resolved.
3.13 Conducting the CE
3.13a Pre-election Conference
Section 1. Raffle of the case. - Within twenty-four (24) hours from
receipt of the notice of entry of final judgment granting the conduct of
a certification election, the Regional Director shall cause the raffle of
the case to an Election Officer who shall have control of the pre-
election conference and election proceedings.
Section 2. Pre-election conference. - Within twenty-four (24) hours
from receipt of the assignment for the conduct of a certification
election, the Election Officer shall cause the issuance of notice of
preelection conference upon the contending unions and the employer,
which shall be scheduled within ten (10) days from receipt of the
assignment.
The pre-election conference shall set the mechanics for the election
and shall determine, among others, the following:
(a) date, time and place of the election, which shall not be later than
forty-five (45) days from the date of the first pre-election conference,
and shall be on a regular working day and within the employer's
premises, unless circumstances require otherwise;
(b) list of eligible and challenged voters;
(c) number and location of polling places or booths and the number of
ballots to be prepared with appropriate translations, if necessary;
(d) name of watchers or representatives and their alternates for each of
the parties during election;
(e) mechanics and guidelines of the election.
Section 3. Waiver of right to be heard. - Failure of any party to appear
during the pre-election conference despite notice shall be considered
as a waiver to be present and to question or object to any of the
agreements reached in said pre-election conference. Nothing herein,
however, shall deprive the non-appearing party or the employer of its
right to be furnished notices of subsequent pre-election conferences
and to attend the same.
Section 4. Minutes of pre-election conference. - The Election Officer
shall keep the minutes of matters raised and agreed upon during the
pre-election conference. The parties shall acknowledge the
completeness and correctness of the entries in the minutes by affixing
their signatures thereon. Where any of the parties refuse to sign the
minutes, the Election Officer shall note such fact in the minutes,
including the reason for refusal to sign the same. In all cases, the
parties shall be furnished a copy of the minutes.
The pre-election conference shall be completed within thirty (30) days
from the date of the first hearing.
Section 6. Posting of Notices. - The Election Officer shall cause the
posting of notice of election at least ten (10) days before the actual
date of the election in two (2) most conspicuous places in the company
premises. The notice shall contain:
(a) the date and time of the election;
(b) names of all contending unions;
(c) the description of the bargaining unit and the list of eligible and
challenged voters.
The posting of the notice of election, the information required to be
included therein and the duration of posting cannot be waived by the
contending unions or the employer.
3.13b Conducting the CE: The Voters
One of the matters the pre-election conference threshes out is
the list of voters.
Section 5. Qualification of voters; inclusion-exclusion. - All employees
who are members of the appropriate bargaining unit sought to be
represented by the petitioner at the time of the issuance of the order
granting the conduct of a certification election shall be eligible to vote.
The list of voters should be based on the employer-certified list
of employees in the CBU or payrolls. If the employer does not
submit the list or payrolls, the union may submit its own list.
Even the list of employees submitted to the SSS may be used as
basis to comprise the list of voters for the CE. “It should ideally
be the payroll which should have been used for the purpose of
the election. However, the unjustified refusal of a company to
submit the payroll in its custody, despite efforts to make it
produce it, compelled resort to the SSS list as the next best
source of information. After all, the SSS list is a public record
whose regularity is presumed.”
Only the employees who are directly employed by the
employer and working along the activities to which the
employer is engaged and linked by employer-employee
relationship are qualified to participate in the certification
election, “irrespective of the period of their employment.”
Employees of an independent contractor who undertakes to do
a piece of work for his account and responsibility, with
minimum interference on the part of the other contracting
party (indirect employer), not being laborers or employees of
the latter, are not qualified to participate therein.
In case of disagreement over the voters' list or over the eligibility of
voters, all contested voters shall be allowed to vote. But their votes
shall be segregated and sealed in individual envelopes in accordance
with Sections 10 and 11 of this Rule.
Dismissed Employee
An employee who has been dismissed from work but has
contested the legality of the dismissal in a forum of appropriate
jurisdiction at the time of the issuance of the order for the
conduct of a certification election shall be considered a
qualified voter, unless his/her dismissal was declared final
judgment at the time of the conduct of the certification
election.
83 | P LATON
In Philippine jurisprudence it is now settled that employees who have
been improperly laid off but who have a present, unabandoned right to
or expectation of re-employment, are eligible to vote in certification
elections. 10 Thus, and to repeat, if the dismissal is under question, as
in the case now at bar whereby a case of illegal dismissal and/or unfair
labor practice was filed, the employees concerned could still qualify to
vote in the elections.
Probationary Employee
In a certification election all rank-and-file employees in the appropriate
bargaining unit are entitled to vote. This principle is clearly stated in
Art. 255 of the Labor Code which states that the "labor organization
designated or selected by the majority of the employees in an
appropriate bargaining unit shall be the exclusive representative of the
employees in such unit for the purpose of collective bargaining."
Collective bargaining covers all aspects of the employment relation and
the resultant CBA negotiated by the certified union binds all employees
in the bargaining unit. Hence, all rank-and-file employees, probationary
or permanent, have a substantial interest in the selection of the
bargaining representative. The Code makes no distinction as to their
employment status as basis for eligibility in supporting the petition for
certification election. The law refers to "all" the employees in the
bargaining unit. All they need to be eligible to support the petition is to
belong to the "bargaining unit.".
INK Believers May Vote
In the CE all members of the unit, whether union members or
not, have the right to vote. Union membership is not a
prerequisite. If majority of the unit members do not want a
union, as expressed in the CE, such majority decision must be
respected.
Logically, the right NOT to join, affiliate with, or assist any union, and to
disaffiliate or resign from a labor organization, is subsumed in the right
to join, affiliate with, or assist any union, and to maintain membership
therein. The right to form or join a labor organization necessarily
includes the right to refuse or refrain from exercising said right. It is
self-evident that just as no one should be denied the exercise of a right
granted by law, so also, no one should be compelled to exercise such a
conferred right. The fact that a person has opted to acquire
membership in a labor union does not preclude his subsequently opting
to renounce such membership.
The purpose of a certification election is precisely the ascertainment of
the wishes of the majority of the employees in the appropriate
bargaining unit: to be or not to be represented by a labor organization,
and in the affirmative case, by which particular labor organization. If
the results of the election should disclose that the majority of the
workers do not wish to be represented by any union, then their wishes
must be respected, and no union may properly be certified as the
exclusive representative of the workers in the bargaining unit in dealing
with the employer regarding wages, hours and other terms and
conditions of employment. The minority employees — who wish to
have a union represent them in collective bargaining — can do nothing
but wait for another suitable occasion to petition for a certification
election and hope that the results will be different. They may not and
should not be permitted, however, to impose their will on the majority
— who do not desire to have a union certified as the exclusive workers'
benefit in the bargaining unit — upon the plea that they, the minority
workers, are being denied the right of self-organization and collective
bargaining.
The respondents' argument that the petitioners are disqualified to vote
because they "are not constituted into a duly organized labor union" —
"but members of the INK which prohibits its followers, on religious
grounds, from joining or forming any labor organization" — and "hence,
not one of the unions which vied for certification as sole and exclusive
bargaining representative," is specious. Neither law, administrative rule
nor jurisprudence requires that only employees affiliated with any labor
organization may take part in a certification election. On the contrary,
the plainly discernible intendment of the law is to grant the right to
vote to all bona fide employees in the bargaining unit, whether they are
members of a labor organization or not.
3.13c Conducting the CE: The Voting
Section 7. Secrecy and sanctity of the ballot. - To ensure secrecy of the
ballot, the Election Officer, together with the authorized
representatives of the contending unions and the employer, shall
before the start of the actual voting, inspect the polling place, the ballot
boxes and the polling booths.
Section 8. Preparation of ballots. - The Election Officer shall prepare the
ballots in English and Filipino or the local dialect, corresponding to the
number of voters and a reasonable number of extra ballots. All ballots
shall be signed at the back by the Election Officer and authorized
representative of each of the contending unions and employer. Failure
or refusal to sign the ballots shall be considered a waiver thereof and
the Election Officer shall enter the fact of such refusal or failure in the
records of the case as well as the reason for the refusal or failure to
sign.
Section 9. Marking of votes. - The voter must put a cross () or check
() mark in the square opposite the name of the union of his choice or
"No Union" if he/she does not want to be represented by any union.
If a ballot is torn, defaced or left unfilled in such a manner as to create
doubt or confusion or to identify the voter, it shall be considered
spoiled. If the voter inadvertently spoils a ballot, he/she shall return it
to the Election Officer who shall destroy it and give him/her another
ballot.
Section 10. Challenging of votes. - An authorized representative of any
of the contending unions and employer may challenge a vote before it
is deposited in the ballot box only on any of the following grounds:
(a) that there is no employer-employee relationship between the voter
and the company;
(b) that the voter is not a member of the appropriate bargaining unit
which petitioner seeks to represent.
Section 11. Procedure in the challenge of votes. - When a vote is
properly challenged, the Election Officer shall place the ballot in an
envelope which shall be sealed in the presence of the voter and the
representatives of the contending unions and employer. The Election
Officer shall indicate on the envelope the voter's name, the union or
employer challenging the voter, and the ground for the challenge. The
sealed envelope shall then be signed by the Election Officer and the
representatives of the contending unions and employer. The Election
Officer shall note all challenges in the minutes of the election and shall
be responsible for consolidating all envelopes containing the challenged
votes. The envelopes shall be opened and the question of eligibility
shall be passed upon only if the number of segregated voters will
materially alter the results of the election.
Section 12. On-the-spot questions. - The Election Officer shall rule on
any question relating to and raised during the conduct of the election.
In no case, however, shall the election officer rule on any of the
grounds for challenge specified in the immediately preceding section.
Section 13. Protest; when perfected. - Any party-in-interest may file a
protest based on the conduct or mechanics of the election. Such
protests shall be recorded in the minutes of the election proceedings.
Protests not so raised are deemed waived.
The protesting party must formalize its protest with the Med-Arbiter,
with specific grounds, arguments and evidence, within five (5) days
after the close of the election proceedings. If not recorded in the
minutes and formalized within the prescribed period, the protest shall
be deemed dropped.
84 | P LATON
Section 15. Conduct of election and canvass of votes. - The election
precincts shall open and close on the date and time agreed upon during
the pre-election conference. The opening and canvass shall proceed
immediately after the precincts have closed. Failure of any party or the
employer or his/her/their representative to appear during the election
proceedings shall be considered a waiver to be present and to question
the conduct thereof.
ULP in Relation to Election
The employer deserves our strongest condemnation for ignoring the
petitioners' request for permission for some time out to attend to the
hearing of their petition before the med-arbiter. It is not only an act of
arrogance, but a brazen interference as well with the employees right
to self-organization, contrary to the prohibition of the Labor Code
against unfair labor practices.
It is unfair labor practice for the company to suspended the workers on
the ground of "abandonment of work" on the day on which the pre-
election conference had been scheduled. It is the employee’s right to
hold a certification election, the exercise of which is their sole
prerogative.
A company commits unfair labor practice where it issued suspension
and termination orders while the employees are in the midst of a
certification election preliminary to a labor management conference
"to normalize employer-employee relations."
3.13d Conducting the CE: Canvassing of Votes
The voting shall close on the date and time agreed upon in the
pre-election conference. Canvassing shall immediately follow.
Section 14. Canvassing of votes. - The votes shall be counted and
tabulated by the Election Officer in the presence of the representatives
of the contending unions. Upon completion of the canvass, the Election
Officer shall give each representative a copy of the minutes of the
election proceedings and results of the election. The ballots and the
tally sheets shall be sealed in an envelope and signed by the Election
Officer and the representatives of the contending unions and
transmitted to the Med-Arbiter, together with the minutes and results
of the election, within twenty-four (24) hours from the completion of
the canvass.
Where the election is conducted in more than one region, consolidation
of results shall be made within fifteen (15) days from the conduct
thereof.
3.13e Who Wins in CE: Proclamation and Certification
Section 20. Proclamation and certification of the result of the election. -
Within twenty-four (24) hours from final canvass of votes, there being a
valid election, the Election Officer shall transmit the records of the case
to the Med-Arbiter who shall, within the same period from receipt of
the minutes and results of election, issue an order proclaiming the
results of the election and certifying the union which obtained a
majority of the valid votes cast as the sole and exclusive bargaining
agent in the subject bargaining unit, under any of the following
conditions:
(a) no protest was filed or, even if one was filed, the same was not
perfected within the five-day period for perfection of the protest;
(b) no challenge or eligibility issue was raised or, even if one was raised,
the resolution of the same will not materially change the results of the
elections.
The winning union shall have the rights, privileges and obligations of a
duly certified collective bargaining agent from the time the certification
is issued.
Where majority of the valid votes cast results in "No Union" obtaining
the majority, the Med-Arbiter shall declare such fact in the order.
Section 16. Certification of Collective Bargaining Agent. - The union
which obtained a majority of the valid votes cast shall be certified as
the sole and exclusive bargaining agent of all the employees in the
appropriate bargaining unit within five (5) days from the day of the
election, provided no protest is recorded in the minutes of the election.
3,13f Failure of Election: Motion for a Remedial Election
Section 17. Failure of election. - Where the number of votes cast in a
certification or consent election is less than the majority of the number
of eligible voters and there are no material challenged votes, the
Election Officer shall declare a failure of election in the minutes of the
election proceedings.
Section 18. Effect of failure of election. - A failure of election shall not
bar the filing of a motion for the immediate holding of another
certification or consent election within six (6) months from date of
declaration of failure of election.
Section 19. Action on the motion. - Within twenty-four (24) hours from
receipt of the motion, the Election Officer shall immediately schedule
the conduct of another certification or consent election within fifteen
(15) days from receipt of the motion and cause the posting of the
notice of certification election at least ten (10) days prior to the
scheduled date of election in two (2) most conspicuous places in the
establishment. The same guidelines and list of voters shall be used in
the election.
3.13g Run-off Election
Section 1. When proper. - When an election which provides for three
(3) or more choices results in none of the contending unions receiving a
majority of the valid votes cast, and there are no objections or
challenges which if sustained can materially alter the results, the
Election Officer shall motu propio conduct a run-off election within ten
(10) days from the close of the election proceedings 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 (50%)
percent of the number of votes cast.
"No Union" shall not be a choice in the run-off election.
Notice of run-off elections shall be posted by the Election Officer at
least five (5) days before the actual date of run-off election.
Section 2. Qualification of voters. - The same voters' list used in the
certification election shall be used in the run-off election. The ballots in
the run-off election shall provide as choices the unions receiving the
highest and second highest number of the votes cast. The labor union
receiving the greater number of valid votes cast shall be certified as the
winner, subject to Section 20, Rule IX.
To summarize, a run-off election is proper if five concurrent
conditions exist, namely:
1. a valid election took place because majority of the CBU
members voted.
2. the election presented a least three choices, e.g., Union One,
Union Two, and No Union, meaning there are at least two
union “candidates.”
3. not one of the unions obtained the majority ofthe valid
votes.
4. the total number of votes for all the unions is at least 50% of
the valid votes cast.
85 | P LATON
5. there is no unresolved challenge of voter or election protest.
3.14 Appeal to Secretary as to Election Result—See D.O. No. 40-
E-03 (dated 30 November 2005)
3.15 Election Irregularities, Protest by Employer
The manner in which the election was held could make the difference
between industrial strife and industrial harmony in the company. What
an employer is prohibited from doing is to interfere with the conduct of
the certification election for the purpose of influencing its outcome. But
certainly an employer has an abiding interest in seeing to it that the
election is clean, peaceful, orderly and credible.
4. THIRD METHOD: CONSENT ELECTION
Like a CE, its purpose is the same, namely, to find out which
union should serve as the bargaining agent. The difference is
that a certification is ordered by the Department while a
consent election is voluntarily agreed upon by the parties, with
or without the intervention of the Department.
Two or more unions are involved in a consent election. And like
certification election, consent election may take place in an
unorganized or organized establishment.
4.1 Effect of Consent Election
Section 23. Effects of consent election. - Where a petition for
certification election had been filed, and upon the intercession of the
Med-Arbiter, the parties agree to hold a consent election, the results
thereof shall constitute a bar to the holding of a certification election
for one (1) year from the holding of such consent election. Where an
appeal has been filed from the results of the consent election, the
running of the one-year period shall be suspended until the decision on
appeal has become final and executory.
Where no petition for certification election was filed but the parties
themselves agreed to hold a consent election with the intercession of
the Regional Office, the results thereof shall constitute a bar to another
petition for certification election.
5. THE WINNER AS SOLE AND EXCLUSIVE REPRESENTATIVE
Collective bargaining contemplates the representation of the
collective bargaining interests of all the employees in the
particular bargaining unit by a properly selected bargaining
agent. The selection of a bargaining agent by a majority of such
employees, under express provisions of the Act, constitutes the
agent as the representative of all the employees within the
particular bargaining unit. The Act provides that such
bargaining agent shall be the “exclusive” representative of the
employees. The term “exclusive” was interpreted under the
original Act to mean that the employer must treat with the
representative to the exclusion of all other claiming bargaining
agents.
5.1 Exclusive Bargaining Agent Represents Even the Minority
Union
On the part of the union that won in the certification election, it
becomes, and is certified as, the exclusive bargaining agent of all the
workers in the bargaining unit. It represents even the members of the
minority union.
However, although the union has every right to represent its members
in the negotiation regarding the terms and conditions of their
employment, it cannot negate their wishes on matters which are purely
personal and individual to them.
5.2 Protection and Capacity of the Loser; the Duty of Fair
Representation
What if the majority union neglects the interest of the
employees in the minority union? The majority union in such
case will be violating its duty of fair representation. This duty
obligates the majority union to serve the interest of all
members of the whole bargaining unit without hostility or
discrimination.
What can the minority do? The minority union, although a loser
in the election, does not lose its character as a lawful labor
organization entitled to protection under Article 246 which
makes it unlawful for any person to abridge the right to self-
organization. (see also Article 255)
May a minority union charge the employer with ULP? Yes. It
can file an individual or group complaint for ULP. It can even
engage in peaceful concerted activity. But it cannot resort to
work stoppage or strike because strike is reserved, under
Article 263, to an exclusive bargaining representative (i.e., the
majority union), if there is one.
5.3 Is the Bargaining Union a Majority Union?
The minority union’s entitlement to protection gains greater
force and respect if it is remembered that the bargaining union
does not always comprise the numerical majority in the
bargaining unit.
Article 256 requires, for a union to win a CE, only a majority of
the valid votes cast. The majority of the valid votes may be
lesser that the majority of the employees in the bargaining unit.
Article 256 therefore does not support Article 255; in fact, they
are incongruent. Whereas Article 255 requires selection by
majority of the unit members, Article 256 requires only
majority of the valid votes cast. The result may be a bargaining
agent that does not carry the mandate of the majority of the
employees.
5.4 May the Bargaining Agent Represent Retired Employees?
In pursuing their claim for retirement benefits under the CBA,
the claimant retirees are represented by the union of which
they were former members.
________
Title VII-A
GRIEVANCE MACHINERY
AND VOLUNTARY ARBITRATION
Article. 260. Grievance machinery and voluntary arbitration. -
The parties to a Collective Bargaining Agreement shall include
therein provisions that will ensure the mutual observance of its
terms and conditions. They shall establish a machinery for the
adjustment and resolution of grievances arising from the
interpretation or implementation of their Collective Bargaining
Agreement and those arising from the interpretation or
enforcement of company personnel policies.
86 | P LATON
All grievances submitted to the grievance machinery which are
not settled within seven (7) calendar days from the date of its
submission shall automatically be referred to voluntary
arbitration prescribed in the Collective Bargaining Agreement.
For this purpose, parties to a Collective Bargaining Agreement
shall name and designate in advance a Voluntary Arbitrator or
panel of Voluntary Arbitrators, or include in the agreement a
procedure for the selection of such Voluntary Arbitrator or
panel of Voluntary Arbitrators, preferably from the listing of
qualified Voluntary Arbitrators duly accredited by the Board. In
case the parties fail to select a Voluntary Arbitrator or panel of
Voluntary Arbitrators, the Board shall designate the Voluntary
Arbitrator or panel of Voluntary Arbitrators, as may be
necessary, pursuant to the selection procedure agreed upon in
the Collective Bargaining Agreement, which shall act with the
same force and effect as if the Arbitrator or panel of Arbitrators
has been selected by the parties as described above.
________
1. CONTRACT ADMINISTRATION AS PART OF THE DUTY TO
BARGAIN
Collective bargaining is not an end in itself. It is a means to an
end, which is the making of collective agreements stabilizing
employment relations for a period of time with results
advantageous both to the worker and the employer.
However narrowly it may canalize its course, the execution of a
contract does not complete collective bargaining. Piece rates
and work assignments frequently require day-to-day
adjustments; periodic decisions must be made concerning such
matters as shop rules, job content, and the letting of
subcontracts. There will be ambiguities in the agreement to be
clarified and gaps be filled. In other words, the duty to bargain
continues into the contract administration stage.
In effect, therefore, “contract negotiations are the legislative
process of collective bargaining; the day-to-day working out of
plant problems is its administrative or judicial aspects.
Strengthening the binding force of the CBA, Art. 248 considers
as unfair labor practice any act that violates an existing
collective bargaining agreement. But this law must be related
to Art, 261 which limits that kind of ULP to “gross violations”
only.
2. C.B.A., LAW BETWEEN THE PARTIES
The provisions of the collective bargaining agreement must be
respected since its terms and conditions "constitute the law between
the parties." Those who are entitled to its benefits can invoke its
provisions. In the event that an obligation therein imposed is not
fulfilled, the aggrieved party has the right to go to court for redress.
Unilaterally formulated rules and policy can neither contradict
nor undermine the CBA provisions.
Since the collective bargaining agreement is considered the law
between the parties, containing as it does the agreed terms of
employment of the employee with his employer, unilaterally imposed
orders or rules qualifying the terms contained in the agreement are
subordinate to the CBA. At most, such rules, such as the rules on trips
abroad formulated by petitioner [school] a few months before Legaspi’s
application, are merely suppletory and can neither contradict nor
undermine the terms found in the CBA.
2.1 Construing the Contract
The CBA being a contract, the rules embodied in the Civil Code on
interpretation of contracts should govern. The intent of the parties
should be ascertained by considering relevant provisions of the said
CBA. The intention of the parties is primordial; if the terms of the
contract are clear, the literal meaning of the stipulations shall control,
but if the words appear to be contrary to the evident intention of the
parties, the latter shall prevail over the former.
Any doubts or ambiguity in the contract between management and the
union members should be resolved in the light of Article 1702 of the
Civil Code that: In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent living for
the laborer. This is also in consonance with the principle enunciated in
the Labor Code that all doubts should be resolved in favor of the
worker.
But contracts which are not ambiguous are to be interpreted according
to their literal meaning and should not be interpreted beyond their
obvious intendment.
Compliance with a CBA is mandated by the expressed policy to give
protection to labor. In the same vein, CBA provisions should be
"construed liberally rather than narrowly and technically, and the
courts must place a practical and realistic construction upon it, giving
due consideration to the context in which it is negotiated and purpose
which it is intended to serve." This is founded on the dictum that a CBA
is not an ordinary contract but one impressed with public interest. It
goes without saying, however, that only provisions embodied in the
CBA should be so interpreted and complied with.
2.2 Proposal Contained in Minutes but Not in the CBA Itself
A proposal mentioned in the negotiation but not embodied in
the collective bargaining contract itself is not part of the CBA. It
cannot serve as basis of a charge of violating the CBA or of
bargaining in bad faith.
2.3 “Zipper Clause”
A device to forestall negotiation proposals after the CBA has
been signed is the “zipper clause.” It is a stipulation in a CBA
indicating that issues that could have been negotiated but not
contained in the CBA cannot be raised for negotiation when the
CBA is already in effect. In short, the CBA is a complete
agreement; negotiation is closed, as a zipper does.
3. LAW DEEMED WRITTEN IN CONTRACT
The principle is thus well-settled that an existing law enters into
and forms part of a valid contract without the need for the
parties expressly making reference to it. Only thus could its
validity insofar as some of its provisions are concerned be
assured.
4. BINDING EFFECT OF AGREEMENT
A collective bargaining agreement entered into by officers of a union,
as agent of the members, and an employer, gives rise to valid
enforceable contractual relations, against the individual union
members in matters that affect them peculiarly, and against the union
in matters that affect the entire membership or large classes of its
members," and "a union member who is employed under an
agreement between the union and his employer is bound by the
provisions thereof, since it is a joint and several contract of the
members of the union entered into by the union as their agent."
87 | P LATON
4.1 Persons Entitled to Benefits
It is true that whatever benefits the majority union obtains from the
employer accrue to its members as well as to non-members. For the
benefits of a collective bargaining agreement are extended to all
employees regardless of their membership in the union because to
withhold the same from the non-members would be to discriminate
against them.
It is even conceded that a laborer can claim benefits from a collective
bargaining agreement entered into between the company and the
union of which he is a member at the time of the conclusion of the
agreement, even after he has resigned from said union.
4.2 Managers Not Entitled to CBA Benefits; Exception
Managers, who are not allowed to unionize to bargain
collectively with the employer, cannot claim the benefits
contained in the CBA negotiated by the workers under them.
They cannot obtain indirectly what they cannot do directly.
Accordingly, managerial employees cannot, in the absence of an
agreement to the contrary, be allowed to share in the concessions
obtained by the labor union through collective negotiation. Otherwise,
they would be exposed to the temptation of colluding with the union
during the negotiations to the detriment of the employer.
However, there is nothing to prevent the employer from granting
benefits to managerial employees equal to or higher than those
afforded to union members. There can be no conflict of interest where
the employer himself voluntarily agrees to grant such benefits to
managerial employees. In the case at bar, at the beginning of
petitioner's employment, he was told that those who are not covered
by the CBA would nevertheless be entitled to benefits which would be,
if not higher, at least equivalent to those provided in the CBA. That
private respondents made such a promise to petitioner is not denied by
them.
4.3 Effect of Collective Agreement on the Individual Contracts
of Employment
When a collective agreement is concluded between a labor
union and an employer, the members of the labor union are
precluded from entering into individual contracts of
employment. But if the agreement merely fixes wages and
working conditions, the employer may enter into particular
contracts of employment with his employees even though both
are bound by the general contract as to wages and working
conditions.
5. ENFORCEABILITY AGAINST TRANSFEREE OF ENTERPRISE
5.1 Purchase of Assets
The rule is that unless expressly assumed, labor contracts such as
employment contracts and collective bargaining agreements are not
enforceable against a transferee of an enterprise, labor contracts being
in personam, thus binding only between the parties. A labor contract
merely creates an action in personally and does not create any real
right which should be respected by third parties. This conclusion draws
its force from the right of an employer to select his employees and to
decide when to engage them as protected under our Constitution, and
the same can only be restricted by law through the exercise of the
police power.
As a general rule, there is no law requiring a bona fide purchaser of
assets of an on-going concern to absorb in its employ the employees of
the latter.
5.2 Exceptions
Although the purchaser of the assets or enterprise is not legally bound
to absorb in its employ the employers of the seller of such assets or
enterprise, the parties are liable to the employees if the transaction
between the parties is colored or clothed with bad faith.
5.3 Merger and Consolidation
Merger takes place when two or more corporations join into a
single corporation which is one of the merging corporations;
the separate existence of the other constituent corporations
ceases. Consolidation occurs when two or more corporations
join into a new single corporation; the separate existence of all
the constituent corporations ceases, except that of the
consolidated corporation.
Section 80. Effects of merger or consolidation. - The merger or
consolidation shall have the following effects:
xxx
5. The surviving or consolidated corporation shall be responsible and
liable for all the liabilities and obligations of each of the constituent
corporations in the same manner as if such surviving or consolidated
corporation had itself incurred such liabilities or obligations; and any
pending claim, action or proceeding brought by or against any of such
constituent corporations may be prosecuted by or against the surviving
or consolidated corporation. The rights of creditors or liens upon the
property of any of such constituent corporations shall not be impaired
by such merger or consolidation. (n)
5.4 Wiley Doctrine
The disappearance by merger of a corporate employer which
has entered into a collective bargaining agreement with a union
does not automatically terminate all rights of the employees
covered by the agreement, even though the merger is for
genuine business reasons. Under the Wiley doctrine, a duty to
arbitrate arising from a collective bargaining agreement
survives the employer’s ceasing to do business as a separate
entity after its merger with a substantially large corporation, so
as to be binding on the larger corporation, where relevant
similarity and continuity of operations across the change in
ownership is evidenced by the wholesale transfer of the smaller
corporation’s employees to the larger corporation’s plant. If a
contractual duty to arbitrate survives the employer’s merger
into another corporate employer, question as to the effect of
the merger on the rights of the employees covered by the
agreement—the former employees of the merged employer—
are arbitrable if questions as to those rights would have been
arbitrable before the merger.
But a duty to arbitrate arising from collective bargaining
agreement does not survive in every case in which the
ownership or corporate structure of an enterprise is changed. It
does not survive where there is lack of any substantial
continuity of identity in the business enterprise before and
after a change, or where the union abandons its right to
arbitration by failing to make its claims known.
6. CHANGE OF BARGAINING AGENT; SUBSTITUTIONARY
DOCTRINE
How does disaffiliation affect the CBA?
The agreement is binding on the parties for the period therein
specified. The employees cannot revoke the validly executed collective
88 | P LATON
bargaining contract with their employer by the simple expedient of
changing their bargaining representative. Thus, when there occurs a
shift in employees' union allegiance after the execution of a bargaining
contract with their employer, and the employees change their
bargaining representative, the contract continues to bind them up to its
expiration date. The new agent, however, may bargain for the
shortening of the contract period.
In formulating the "substitutionary" doctrine, the only consideration
involved was the employees' interest in the existing bargaining
agreement. The agent's interest never entered the picture. In fact, the
justification 9 for said doctrine was:
xxx that the majority of the employees, as an entity under the statute, is
the true party in interest to the contract, holding rights through the
agency of the union representative. Thus, any exclusive interest
claimed by the agent is defeasible at the will of the principal....
(Emphasis supplied)
Stated otherwise, the "substitutionary" doctrine only provides that the
employees cannot revoke the validly executed collective bargaining
contract with their employer by the simple expedient of changing their
bargaining agent. And it is in the light of this that the phrase "said new
agent would have to respect said contract" must be understood. It only
means that the employees, thru their new bargaining agent, cannot
renege on their collective bargaining contract, except of course to
negotiate with management for the shortening thereof.
The "substitutionary" doctrine, therefore, cannot be invoked to support
the contention that a newly certified collective bargaining agent
automatically assumes all the personal undertakings — like the no-
strike stipulation here — in the collective bargaining agreement made
by the deposed union. When BBWU bound itself and its officers not to
strike, it could not have validly bound also all the other rival unions
existing in the bargaining units in question. BBWU was the agent of the
employees, not of the other unions which possess distinct personalities.
To consider UNION contractually bound to the no-strike stipulation
would therefore violate the legal maxim that res inter alios nec prodest
nec nocet.
7. GRIEVANCES
A grievance is defined as “any question by either the employer
or the union regarding the interpretation or application of the
collective bargaining agreement or company personnel policies
or any claim by either party that the other party is violating any
provision of the CBA or company personnel policies.”
If the term grievance is to be applied in the loose or generic
sense, any dispute or controversy respecting terms and
conditions of employment which an employee or group of
employees may present to the employer can be a grievance,
even without a union or CBA.
The expansion of the original and exclusive jurisdiction of
voluntary arbitrators to include questions arising from the
interpretation and enforcement of company personnel policies
has the effect of widening the meaning and interpretation of a
grievance to include a situation where there is no collective
bargaining agent and no CBA.
Personnel policies are guiding principles stated in broad, long-
range terms that express the philosophy or beliefs of an
organization’s top authority regarding personnel matters.
They deal with matters affecting efficiency and well-being of
employees and include, among others, the procedures in
administration of wages, benefits, promotions, transfer and
other personnel movements which are usually not spelled out
in the collective agreement. The usual source of grievances,
however, is the rules and regulations governing disciplinary
actions.
7.1 By-passing the Grievance Machinery: ULP
All grievances arising from the implementation or
interpretation of the collective bargaining agreement and/or
interpretation and enforcement of company personnel policies
are compulsorily subject to the grievance of machinery.
Upholding the requirement, the Court has ruled that the
grievance procedure provided in the CBA should be adhered to
by the parties. Refusal or failure to do so is an unfair labor
practice, because the grievance procedure is part of the
continuous process of collective bargaining. It is intended to
promote friendly dialogue between labor and management as a
means of maintaining industrial peace.
Before an aggrieved employee may resort to the courts to
enforce his individual rights under a bargaining contract, the
employee must exhaust all the remedies available to him under
such contract. And a court should not entertain any complaint
by an aggrieved employee until proper use has been made of
the contract grievance procedure agreed upon by employer
and the bargaining representative.
The grievance machinery under the agreement is the very heart
of industrial self0government.
May a grievance be brought to voluntary arbitration without
passing through the grievance procedure under the CBA?
This appears to be proscribed by the Labor Code which directs
the parties to a CBA to establish a grievance machinery for the
adjustment and resolution of grievances arising from the
interpretation or enforcement of company personnel policies.
In view, however, of the State policy to encourage voluntary
arbitration of all other labor-management disputes, it is
submitted that a grievance may be brought directly to
voluntary arbitration without passing through the grievance
machinery, especially when the latter has been proven to be
ineffective in the past, or when the parties inadvertently failed
to include a grievance machinery provision in their CBA.
7.2 Waiver of Grievance Machinery Procedure and Submission
to VA
Article 262 of the Labor Code provides that upon agreement of the
parties, the voluntary arbitrator can hear and decide all other labor
disputes.
Contrary to the finding of the Court of Appeals, voluntary arbitration as
a mode of settling the dispute was not forced upon respondents. Both
parties indeed agreed to submit the issue of validity of the dismissal of
petitioner to the jurisdiction of the voluntary arbitrator by the
Submission Agreement duly signed by their respective counsels. As the
voluntary arbitrator had jurisdiction over the parties' controversy,
discussion of the second issue is no longer necessary.
The employee’s waiver of her option to submit her case to grievance
machinery did not amount to relinquishing her right to avail herself of
voluntary arbitration.
7.3 Structure and Procedure
89 | P LATON
In the absence of applicable provision in the collective bargaining
agreement, a grievance committee shall be created within ten (10) days
from signing of the collective bargaining agreement. The committee
shall be composed of at least two (2) representatives each from the
members of the bargaining unit and the employer, unless otherwise
agreed upon by the parties. The representatives from among the
members of the bargaining unit shall be designated by the union.
Section 2. Procedure in handling grievances. - In the absence of a
specific provision in the collective bargaining agreement or existing
company practice prescribing for the procedures in handling grievance,
the following shall apply:
(a) An employee shall present this grievance or complaint orally or in
writing to the shop steward. Upon receipt thereof, the shop steward
shall verify the facts and determine whether or not the grievance is
valid.
(b) If the grievance is valid, the shop steward shall immediately bring
the complaint to the employee's immediate supervisor. The shop
steward, the employee and his immediate supervisor shall exert efforts
to settle the grievance at their level.
(c) If no settlement is reached, the grievance shall be referred to the
grievance committee which shall have ten (10) days to decide the case.
Where the issue involves or arises from the interpretation or
implementation of a provision in the collective bargaining agreement,
or from any order, memorandum, circular or assignment issued by the
appropriate authority in the establishment, and such issue cannot be
resolved at the level of the shop steward or the supervisor, the same
may be referred immediately to the grievance committee.
8. VOLUNTARY ARBITRATION
Section 3. Submission to voluntary arbitration. - Where grievance
remains unresolved, either party may serve notice upon the other of its
decision to submit the issue to voluntary arbitration. The notice shall
state the issue or issues to be arbitrated, copy thereof furnished the
board or the voluntary arbitrator or panel of voluntary arbitrators
named or designated in the collective bargaining agreement. If the
party upon whom the notice is served fails or refuses to respond
favorably within seven (7) days from receipt thereof, the voluntary
arbitrator or panel of voluntary arbitrators designated in the collective
bargaining agreement shall commence voluntary arbitration
proceedings. Where the collective bargaining agreement does not so
designate, the board shall call the parties and appoint a voluntary
arbitrator or panel of voluntary arbitrators, who shall thereafter
commence arbitration proceedings in accordance with the proceeding
paragraph.
In instances where parties fail to select a voluntary arbitrator or panel
of voluntary arbitrators, the regional branch of the Board shall
designate the voluntary arbitrator or panel of voluntary arbitrators, as
may be necessary, which shall have the same force and effect as if the
parties have selected the arbitrator.
The parties to a CBA will decide on the number of arbitrators
who may hear a dispute only when the need for it arises. Even
the law itself does not specify the number of arbitrators. Their
alternatives — whether to have one or three arbitrators —
have their respective advantages and disadvantages. In this
matter, cost is not the only consideration; full deliberation on
the issues is another, and it is best accomplished in a hearing
conducted by three arbitrators. In effect, the parties are
afforded the latitude to decide for themselves the composition
of the grievance machinery as they find appropriate to a
particular situation.
Labor arbitration is the reference of a labor dispute to a third
party for determination on the basis of evidence and
arguments presented by such parties, who are bound to accept
the decision.
Voluntary arbitration has been defined as a contractual proceeding
whereby the parties to any dispute or controversy, in order to obtain a
speedy and inexpensive final disposition of the matter involved, select a
judge of their own choice and by consent submit their controversy to
him for determination. Under voluntary arbitration, on the other hand,
referral of a dispute by the parties is made, pursuant to a voluntary
arbitration clause in their collective agreement, to an impartial third
person for a final and binding resolution.
Ideally, arbitration awards are supposed to be complied with by both
parties without delay, such that once an award has been rendered by
an arbitrator, nothing is left to be done by both parties but to comply
with the same. After all, they are presumed to have freely chosen
arbitration as the mode of settlement for that particular dispute.
Pursuant thereto, they have chosen a mutually acceptable arbitrator
who shall hear and decide their case. Above all, they have mutually
agreed to de bound by said arbitrator's decision.
Compulsory arbitration is a system whereby the parties to a dispute are
compelled by the government to forego their right to strike and are
compelled to accept the resolution of their dispute through arbitration
by a third party. 1 The essence of arbitration remains since a resolution
of a dispute is arrived at by resort to a disinterested third party whose
decision is final and binding on the parties, but in compulsory
arbitration, such a third party is normally appointed by the
government.
In Philippine context, the “judge” in voluntary arbitration is called
arbitrator, while that in compulsory is labor arbiter. The jurisdiction of a
VA is stated in Articles 261 and 262 while that of an LA is in Article 217.
8.1 Voluntary Arbitration: A Private Judicial System
A voluntary arbitrator “is not a public tribunal imposed upon
the parties by a superior authority which the parties are obliged
to accept. He has no general character to administer justice for
a community which transcends the parties. He is rather part of
a system of self-government created by and confined to the
parties.”
The primary function of voluntary labor arbitration is to provide
(1) a process for the orderly disposition of disputes and (2) a
foundation for stable labor-management relations.
8.2 Voluntary Arbitration: A Master Procedure
In labor-management relations voluntary arbitration is a master
procedure. Any and all kinds of labor disputes may be
submitted to, settled, or resolved through voluntary
arbitration, if the parties so desire. Money claims, bargaining
deadlocks, strike or lockout, employment termination, and
even questions about existence or absence of employer-
employee relationship, may be resolved by the parties—with
finality—by availing themselves of voluntary arbitration.
As a master procedure voluntary arbitration takes precedence
over other dispute settlement devices (i.e., cases before the
labor arbiter or Secretary of Labor or the NLRC)
A dispute pending in voluntary arbitration (or compulsory
arbitration, for that matter) cannot be the subject of a strike or
lockout notice.
9. WHO MAY BE ACCREDITED AS VOLUNTARY ARBITRATOR
90 | P LATON
The following are the minimum criteria for accreditation as voluntary
arbitrator:
1. A Filipino citizen residing in the Philippines;
2. A holder of at least a Bachelor’s Degree in any field of behavioral or
applied sciences or equivalent educational training short of a Bachelor’s
Degree;
3. At least five (5) years experience in the field of Labor-Management
relations;
4. Completion of a training course on voluntary arbitration conducted
by the Board; and
5. A person of good moral character, noted for impartiality, probity,
and has not been civilly, criminally and administratively adjudged guilty
of any offense involving moral turpitude as evidenced by a duly sworn
affidavit.
10. HOW VOLUNTARY ARBITRATOR IS CHOSEN
A voluntary arbitrator is chosen by the parties themselves
(preferably accredited by the NCMB). The choice is usually
influenced by the trust in the person’s fairness and knowledge
of the dynamics, including law, of labor-management relation.
The preferred method of selection is by mutual agreement of
the parties. Alternative methods include the selection or
appointment by an administrative agency like the NCMB.
Parties in general may choose between the use of a temporary
(when a dispute is already at hand; specific) or permanent
arbitrator (before a dispute arises; for a period of time, usually
during the life of the CBA). They have also a choice as to the
number of arbitrators, either a sole arbitrator or a panel of
arbitrators or Arbitration Board.
11. DISTINGUISHED FROM A COURT OF LAW
Court of Law Arbitration
Formal Informal
Follow precedents Not obliged
Rules of evidence observed Not observed
Decisions may be appealed to No comparable appeal
the higher court recourse
Hear a great variety of cases Hear only industrial disputes
Services of a lawyer is Not essential
essential due to complexity
Arbitration, in sum, is a non-technical and relatively inexpensive
procedure for obtaining a quick solution to industrial disputes
by persons who have specialized knowledge of labor
management relations.
________
Article. 261. Jurisdiction of Voluntary Arbitrators or panel of
Voluntary Arbitrators. - The Voluntary Arbitrator or panel of
Voluntary Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising
from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation
or enforcement of company personnel policies referred to in
the immediately preceding article. Accordingly, violations of a
Collective Bargaining Agreement, except those which are gross
in character, shall no longer be treated as unfair labor practice
and shall be resolved as grievances under the Collective
Bargaining Agreement. For purposes of this article, gross
violations of Collective Bargaining Agreement shall mean
flagrant and/or malicious refusal to comply with the economic
provisions of such agreement.
The Commission, its Regional Offices and the Regional Directors
of the Department of Labor and Employment shall not
entertain disputes, grievances or matters under the exclusive
and original jurisdiction of the Voluntary Arbitrator or panel of
Voluntary Arbitrators and shall immediately dispose and refer
the same to the Grievance Machinery or Voluntary Arbitration
provided in the Collective Bargaining Agreement.
________
Article. 262. Jurisdiction over other labor disputes. - The
Voluntary Arbitrator or panel of Voluntary Arbitrators, upon
agreement of the parties, shall also hear and decide all other
labor disputes including unfair labor practices and bargaining
deadlocks.
________
1. ARBITRABLE DISPUTES
In the field of labor relations, arbitration applies to two kinds of
disputes: (1) contract-negotiation disputes; and (2) contract-
interpretation disputes. Contract negotiation disputes are
disputes as to the terms of a collective bargaining agreement.
Where there is an existing agreement to arbitrate such
disputes, and a bargaining deadlock or impasse has arisen, the
disputants submit to an impartial outsider for settlement the
collective bargaining issue which they had been unable to settle
by themselves, whether or not aided by conciliators. Contract
interpretation disputes are disputes arising under an existing
collective bargaining agreement, involving such matters as the
interpretation and application of the contract, or alleged
violation of its provisions.
Arbitration of contract negotiation disputes is often known as
arbitration of “interest,” while arbitration of contract
interpretation disputes is known as arbitration of “grievance”
or “rights.”
2. JURISDICTION OF L.A. AND V.A.
The aforecited provisions of law cannot be read in isolation or
separately. They must be read as a whole and each Article of the Code
reconciled one with the other. An analysis of the provisions of Articles
217, 261, and 262 indicates, that:
1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or
Panel of Voluntary Arbitrators over the cases enumerated in Articles
217, 261 and 262, can possibly include money claims in one form or
another.
2. The cases where the Labor Arbiters have original and exclusive
jurisdiction are enumerated in Article 217, and that of the Voluntary
Arbitrator or Panel of Voluntary Arbitrators in Article 261.
3. The original and exclusive jurisdiction of Labor Arbiters is qualified by
an exception as indicated in the introductory sentence of Article 217
(a), to wit:
Art. 217. Jurisdiction of Labor Arbiters . . . (a) Except as otherwise
provided under this Code the Labor Arbiter shall have original and
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exclusive jurisdiction to hear and decide . . . the following cases
involving all workers. . . .
The phrase "Except as otherwise provided under this Code" refers to
the following exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters . . .
xxx
(c) Cases arising from the interpretation or implementation of collective
bargaining agreement and those arising from the interpretation or
enforcement of company procedure/policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitrator as may be provided in said agreement.
B. Art. 262. Jurisdiction over other labor disputes. — The Voluntary
Arbitrator or panel of Voluntary Arbitrators, upon agreement of the
parties, shall also hear and decide all other labor disputes including
unfair labor practices and bargaining deadlocks.
4. The jurisdiction of Voluntary Arbitrator or Panel of Voluntary
Arbitrators is provided for in Arts. 261 and 262 of the Labor Code as
indicated above.
A. A close reading of Article 261 indicates that the original and exclusive
jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators is
limited only to:
. . . unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement and those
arising from the interpretation or enforcement of company personnel
policies . . . Accordingly, violations of a collective bargaining agreement,
except those which are gross in character, shall no longer be treated as
unfair labor practice and shall be resolved as grievances under the
Collective Bargaining Agreement. . . . .
B. Voluntary Arbitrators or Panel of Voluntary Arbitrators, however, can
exercise jurisdiction over any and all disputes between an employer
and a union and/or individual worker as provided for in Article 262.
It must be emphasized that the jurisdiction of the Voluntary Arbitrator
or Panel of Voluntary Arbitrators under Article 262 must be voluntarily
conferred upon by both labor and management. The labor disputes
referred to in the same Article 262 can include all those disputes
mentioned in Article 217 over which the Labor Arbiter has original and
exclusive jurisdiction.
As shown in the above contextual and wholistic analysis of Articles 217,
261, and 262 of the Labor Code, the National Labor Relations
Commission correctly ruled that the Labor Arbiter had no jurisdiction to
hear and decide petitioner's money-claim-underpayment of retirement
benefits, as the controversy between the parties involved an issue
"arising from the interpretation or implementation" of a provision of
the collective bargaining agreement. The Voluntary Arbitrator or Panel
of Voluntary Arbitrators has original and exclusive jurisdiction over the
controversy under Article 261 of the Labor Code, and not the Labor
Arbiter.
2.1 Jurisdiction over Termination Disputes
The preference or bias of the law in favor of voluntary
arbitration justifies the view that employment termination
disputes, arising from CBA or personnel policy implementation,
are cognizable by a voluntary arbitrator and not a labor arbiter.
Such termination cases, if filed with a labor arbiter, is to be
dismissed for lack of jurisdiction and referred to the concerned
NCMB Regional Branch for appropriate action.
Article 260 of the Labor Code on grievance machinery and voluntary
arbitrator states that "(t)he parties to a Collective Bargaining
Agreement shall include therein provisions that will ensure the mutual
observance of its terms and conditions. They shall establish a
machinery for the adjustment and resolution of grievances arising from
the interpretation or implementation of their Collective Bargaining
Agreement and those arising from the interpretation or enforcement of
company personnel policies." It is further provided in said article that
the parties to a CBA shall name or designate their respective
representatives to the grievance machinery and if the grievance is not
settled in that level, it shall automatically be referred to voluntary
arbitrators (or panel of voluntary arbitrators) designated in advance by
the parties. It need not be mentioned that the parties to a CBA are the
union and the company. Hence, only disputes involving the union and
the company shall be referred to the grievance machinery or voluntary
arbitrators.
Article 261 of the Labor Code which grants to voluntary arbitrators
original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the
collective bargaining agreement and those arising from the
interpretation or enforcement of company personnel policies. Note the
phrase "unresolved grievances." In the case at bar, the termination of
petitioner is not an unresolved grievance.
Article 260 further provides that the parties to a CBA shall name or
designate their respective representative to the grievance machinery
and if the grievance is unsettled in that level, it shall automatically be
referred to the voluntary arbitrators designated in advance by the
parties to a CBA of the union and the company. It can thus be deduced
that only disputes involving the union and the company shall be
referred to the grievance machinery or voluntary arbitrators.
2.1a “Policies,” “Rules,” “Procedures”
Policies are formulated by management even before a
company opens for business in order to guide the men in the
operational level, the line manager or supervisor as to the
scope of their activities, authority and responsibility, and to
enable them to arrive at sound decisions. Policies are valuable
in fixing definite objectives for the organization. Policy
statements are also needed to allow subordinate executives to
make fair and consistent decisions on recurrent problems. They
promote uniformity of action and prevent conflicting decisions
especially as regards labor matter.”
Company policies must be issued by top management which is
responsible for making major policies that are by nature
company-wide in application.
Minor policies, better known as rules and procedures, are the
extension of major policies and are usually formulated by minor
executives or department managers. Rules are specific guides
intended to govern conduct and action of operating supervisors
and employees in the performance of their designated
activities. Procedures are made to specify ways or methods of
carrying out policies and rules. A procedure tells what work or
task to do, how to do it, and when to do it.
2.2 Jurisdiction over CBA Violations
CBA violations not constituting ULP are likewise cognizable by a
voluntary arbitrator if not resolved through the grievance
machinery. If the violations, however, are “gross” in character,
these are to be treated as unfair labor practice which, following
Art. 217 (a-1), are to be heard and decided by a labor arbiter.
The law wants the industrial players to resolve their differences
by and among themselves as much as possible. And if they
need help, they are likewise free to agree where that help may
come from.
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For a ULP case to be cognizable by the Labor Arbiter, and the NLRC to
exercise its appellate jurisdiction, the allegations in the complaint
should show prima facie the concurrence of two things, namely: (1)
gross violation of the CBA; AND (2) the violation pertains to the
economic provisions of the CBA.
Unsubstantiated conclusions of bad faith and unjustified refusal to re-
employ petitioners, to our mind, do not constitute gross violation of the
CBA for purposes of lodging jurisdiction with the Labor Arbiter and the
NLRC. Although evidentiary matters are not required (and even
discouraged) to be alleged in complaint, still, sufficient details
supporting the conclusion of bad faith and unjust refusal to re-employ
petitioners must be indicated. Furthermore, it is even doubtful if the
CBA provision on re-employment fits into the accepted notion of an
economic provision of the CBA.
2.3 Other Cases
Section 4. Jurisdiction of voluntary arbitrator or panel of voluntary
arbitrators. - The voluntary arbitrator or panel of voluntary arbitrators
shall have exclusive and original jurisdiction to hear and decide all
grievances arising from the implementation or interpretation of the
collective bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies which
remain unresolved after exhaustion of the grievance procedure.
They shall also have exclusive and original jurisdiction, to hear and
decide wage distortion issues arising from the application of any wage
orders in organized establishments, as well as unresolved grievances
arising from the interpretation and implementation of the productivity
incentive programs under RA 6971.
Upon agreement of the parties, any other labor dispute may be
submitted to a voluntary arbitrator or panel of voluntary arbitrators.
Before or at any stage of the compulsory arbitration process, the
parties may opt to submit their dispute to voluntary arbitration.
The National Labor Relations Commission, its regional branches and
Regional Directors of the Department of Labor and Employment shall
not entertain disputes, grievances or matters under the exclusive and
original jurisdiction of the voluntary arbitrator or panel of voluntary
arbitrators and shall immediately dispose and refer the same to the
appropriate grievance machinery or voluntary arbitration provided in
the collective bargaining agreement.
2.4 Dispute over Company’s Drug Abuse Policy
A union’s petition to enjoin implementation of the company’s drug
policy is a labor dispute beyond RTC’s jurisdiction. It is a personnel
policy dispute within the jurisdiction of a VA.
3. HOW VOLUNTARY ARBITRATION IS INITIATED
Voluntary arbitration may be initiated either by 1) a Submission
or 2) by a Demand or Notice invoking a collective agreement
arbitration clause. Sometimes both instruments are used in a
case.
Submission is sometimes called a “Stipulation” or an
“Agreement to Arbitrate.” It is used where there is no previous
agreement to arbitrate. The Submission, which must be signed
by both parties, describes an existing dispute; it often names
the arbitrator, procedures in the hearing and it sometimes
contains considerable details of the arbitrator’s authority and
other matters which the parties wish to control. Submission is
more appropriate in interest disputes since collective
agreement generally do not provide for the arbitration of such
disputes that may arise in the future. Submission is often
entered into after the dispute has materialized and the issues
can already be defined.
However, Demand or Notice of Intent to Arbitrate is more
applicable to rights dispute because collective agreements are
required under RA 6715 to provide for a grievance procedure
and a voluntary arbitration clause with respect to disputes
arising from the application or interpretation of the agreement.
Thus, there is an “agreement to arbitrate” future dispute that
may arise under and during the term of the CBA. If a dispute is
covered by such an arbitration clause, arbitration may be
initiated unilaterally by one party by serving upon the other a
written demand or notice of intent to arbitrate.
3.1 The Submission Agreement; Extent of Arbitrator’s Authority
Although the contract may establish the breadth of the
arbitrator’s power and the limits of his authority, his power
may be more sharply defined in the submission agreement.
Frequently, the parties jointly formulate in writing the specific
issues to be decided by the arbitrator. Sometimes the arbitrator
is asked by the parties to help them frame the issue on the
basis of the written grievance or the case as presented.
In general, the arbitrator is expected to decide those questions
expressly stated and limited in the submission agreement.
However, since arbitration is the final resort for the
adjudication of disputes, the arbitrator will assume that he has
the power to make a final settlement.
It is thus essential to stress that the Voluntary Arbitrator had
plenary jurisdiction and authority to interpret the agreement to
arbitrate and to determine the scope of hs own authority
subject only, in a proper case, to the certiorari jurisdiction of
this Court.
Generally, the arbitrator is expected to decide only those
questions expressly delineated by the submission agreement.
Nevertheless, the arbitrator can assume that he has the
necessary power to make a final settlement since arbitration is
the final resort for adjudication of disputes.
The issue of regularization should be viewed as two-tiered issue. While
the submission agreement mentioned only the determination of the
date or regularization, law and jurisprudence give the voluntary
arbitrator enough leeway of authority as well as adequate prerogative
to accomplish the reason for which the law on voluntary arbitration
was created – speedy labor justice. It bears stressing that the
underlying reason why this case arose is to settle, once and for all, the
ultimate question of whether respondent employees are entitled to
higher benefits. To require them to file another action for payment of
such benefits would certainly undermine labor proceedings and
contravene the constitutional mandate providing full protection to
labor.
4. POWERS OF THE ARBITRATOR
The study of collective bargaining agreements discloses
different types of arbitration clauses with varying degrees of
power granted to the arbitration. This power may be very
limited or unusually broad in scope.
4.1 Power to Arbitrate Any Dispute
The contract clause that gives the arbitrator the broadest scope
of power is commonly known as the “disputes” clause.
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This type of clause grants the arbitrator jurisdiction to hear and
determine practically any matter in dispute between the
parties. Moreover, he is not necessarily limited to matters
specifically stated in the contract. It is common, however, for
some relationship to be shown between the matter in dispute
and the provisions of the contract.
4.2 No Power to Add To or Subtract From the Contract
Some arbitration clauses limit the arbitrator’s power to an
interpretation and application of the contract and further
specifically provide that he “shall have no power to add to or
subtract from the contract.
Such clauses clearly state the parties’ intention that the
arbitrator will be empowered only to interpret the contract but
not add to or modify it.
As a general rule, the authority of an arbitrator embraces or
covers the following:
1. General authority to investigate and hear the case upon
notice of the parties and to render an award based on the
contract and record of the case;
2. Incidental authority to perform all acts necessary to an
adequate discharge of his duties and responsibilities like setting
and conduct of hearing, attendance of witnesses and proof
documents and other evidences, fact-finding and other modes
of discovery, reopening of hearing, etc.;
3. Special power in aid of his general contractual authority like
the authority to determine arbitrability of any particular
dispute and to modify any provision of existing agreement
upon which a proposed change is submitted for arbitration.
5. FUNCTIONS OF ARBITRATOR
The labor arbitrator under a collective bargaining agreement is
an indispensable agency in the continuous collective bargaining
process. He sits to settle disputes at the plant level—disputes
which require for their solution knowledge of the custom and
practices of a particular factory or of a particular industry as
reflected in particular agreements.
On the other hand, the power and authority of arbitrators in
labor dispute cases is derived from and limited by the terms of
the parties’ agreement. The arbitrator is confined to
interpretation and application of the CBA; he does not sit to
dispense his own brand of industrial justice. The arbitrator’s
authority is contractual rather than judicial in nature; his power
is conferred by the CBA; and his duty with respect to that
agreement is to settle disputes arising thereunder by applying
and interpreting that agreement.
But so long as an arbitrator is not arbitrary, he has wide latitude
in exercising his authority, especially in fashioning an
appropriate remedy.
5.1 Arbitrator’s Interpretation of CBA
It is said that an arbitral award does not draw its essence from the CBA;
hence, there is an unauthorized amendment or alteration thereof, if:
1. It is so unfounded in reason and fact;
2. It is so unconnected with the working and purpose of the agreement;
3. It is without factual support in view of its language, its context, and
any other indicia of the parties' intention;
4. It ignores or abandons the plain language of the contract;
5. It is mistakenly based on a crucial assumption which concededly is a
nonfact;
6. It is unlawful, arbitrary or capricious; and
7. It is contrary to public policy.
________
Article. 262-A. Procedures. - The Voluntary Arbitrator or panel
of Voluntary Arbitrators shall have the power to hold hearings,
receive evidences and take whatever action is necessary to
resolve the issue or issues subject of the dispute, including
efforts to effect a voluntary settlement between parties.
All parties to the dispute shall be entitled to attend the
arbitration proceedings. The attendance of any third party or
the exclusion of any witness from the proceedings shall be
determined by the Voluntary Arbitrator or panel of Voluntary
Arbitrators. Hearing may be adjourned for cause or upon
agreement by the parties.
Unless the parties agree otherwise, it shall be mandatory for
the Voluntary Arbitrator or panel of Voluntary Arbitrators to
render an award or decision within twenty (20) calendar days
from the date of submission of the dispute to voluntary
arbitration.
The award or decision of the Voluntary Arbitrator or panel of
Voluntary Arbitrators shall contain the facts and the law on
which it is based. It shall be final and executory after ten (10)
calendar days from receipt of the copy of the award or decision
by the parties.
Upon motion of any interested party, the Voluntary Arbitrator
or panel of Voluntary Arbitrators or the Labor Arbiter in the
region where the movant resides, in case of the absence or
incapacity of the Voluntary Arbitrator or panel of Voluntary
Arbitrators, for any reason, may issue a writ of execution
requiring either the sheriff of the Commission or regular courts
or any public official whom the parties may designate in the
submission agreement to execute the final decision, order or
award.
________
1. COMPLIANCE WITH DUTY TO ARBITRATE
If a CBA requires settlement of disputes “exclusively” by the
arbitration, then arbitration is needed before court suits for
breach of the contract may be filed.
Nonetheless, the parties to a CBA may waive the arbitration
covenants of the agreement, but their conduct must clearly
show that intention.
2. WHO DETERMINES THE ARBITRATION PROCEDURES
In practice, voluntary arbitration of labor cases use procedures
based on the Labor Code as amended by RA 6715 and its
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Implementing Rules, the CBA, and other agreements of the
parties, the directives of the arbitrator, and the procedural
rules of appropriate agencies like the NCMB Procedural
Guidelines in Conduct of Voluntary Arbitration Proceedings.
3. ETHICAL STANDARDS OF ARBITRATORS
An arbitrator is obliged to maintain a high level of professional
ethics in his relationship with the parties and the appointing
agencies. He also has a responsibility to society. His conduct
should be above reproach. Since in effect, he is a judge, and his
ethics must be on the same high level as the code that governs
the conduct of judicial tribunals.
Failure on the part of the voluntary arbitrator to render a decision,
resolution, order or award within the prescribed period, shall upon
complaint of a party, be sufficient ground for the Board to discipline
said voluntary arbitrator, pursuant to the guidelines issued by the
Secretary. In cases that the recommended sanction is de-listing, it shall
be unlawful for the voluntary arbitrator to refuse or fail to turn over to
the board, for its further disposition, the records of the case within ten
(10) calendar days from demand thereof.
4. VOLUNTARY ARBITRATION AWARD GENERALLY FINAL;
EXCEPTIONS
that his functions and powers are provided for in the Labor Code does
not place him within the exceptions to said Sec. 9 since he is a quasi-
judicial instrumentality as contemplated therein.
A fortiori, the decision or award of the voluntary arbitrator or panel of
arbitrators should likewise be appealable to the Court of Appeals, in
line with the procedure outlined in Revised Administrative Circular No.
1-95, just like those of the quasi-judicial agencies, boards and
commissions enumerated therein.
In effect, this equates the award or decision of the voluntary arbitrator
with that of the regional trial court. Consequently, in a petition for
certiorari from that award or decision, the Court of Appeals must be
deemed to have concurrent jurisdiction with the Supreme Court. As a
matter of policy, this Court shall henceforth remand to the Court of
Appeals petitions of this nature for proper disposition.
4.2a From VA to CA: Mode of Appeal is Rule 43, not 65
The mode of appeal from VA to the CA is therefore Rule 43 of the 1997
Rules of Procedure. It is not Rule 65 because a petition for certiorari
under that Rule lies only where there is “no appeal” and no plain,
speedy and adequate remedy in the ordinary course of law. Certiorari
under Rule 65 cannot be allowed when a party to a case fails to appeal
a judgment despite the availability of that remedy, certiorari not being
a substitute for lost appeal. The remedies of appeal and certiorari are
mutually exclusive and not alternative or successive.

The decisions of voluntary arbitrators must be given the highest respect 4.3 Findings of Facts of a Voluntary Arbitrator
and as a general rule must be accorded a certain measure of finality.
________
This is especially true where the arbitrator chosen by the parties enjoys
the first rate credentials. It is not correct, however, that this respect
precludes the exercise of judicial review over their decisions. Article. 262-B. Cost of voluntary arbitration and Voluntary
Arbitrator’s fee. - The parties to a Collective Bargaining
Inspite of statutory provisions making 'final' the decisions of certain Agreement shall provide therein a proportionate sharing
administrative agencies, we have taken cognizance of petitions scheme on the cost of voluntary arbitration including the
questioning these decisions where want of jurisdiction, grave abuse of Voluntary Arbitrator’s fee. The fixing of fee of Voluntary
discretion, violation of due process, denial of substantial justice, or Arbitrators, whether shouldered wholly by the parties or
erroneous interpretation of the law were brought to our attention.
subsidized by the Special Voluntary Arbitration Fund, shall take
A voluntary arbitrator by the nature of her functions acts in quasi- into account the following factors:
judicial capacity. There is no reason why her decisions involving
interpretation of law should be beyond this Court's review. (a) Nature of the case;
Administrative officials are presumed to act in accordance with law and
yet we do hesitate to pass upon their work where a question of law is (b) Time consumed in hearing the case;
involved or where a showing of abuse of authority or discretion in their
official acts is properly raised in petitions for certiorari. (c) Professional standing of the Voluntary Arbitrator;
The Labor Code and its Implementing Rules thus clearly reflect
(d) Capacity to pay of the parties; and
the important public policy of encouraging recourse to
voluntary arbitration and of shortening the arbitration process
(e) Fees provided for in the Revised Rules of Court.
by rendering the arbitral award non- appealable to the NLRC.
________
The result is that a voluntary arbitral award may be modified
and set aside only upon the same grounds on which a decision
of the NLRC itself may be modified or set aside, by the Supreme
Court.

4.1 Motion for Reconsideration*

Section 7. Finality of Award/Decision. - The decision, order, resolution

or award of the voluntary arbitrator or panel of voluntary arbitrators
shall be final and executory after ten (10) calendar days from receipt of
the copy of the award or decision by the parties and it shall not be
subject of a motion for reconsideration.

4.2 Review of Award by Certiorari

The voluntary arbitrator no less performs a state function pursuant to a

governmental power delegated to him under the provisions therefor in
the Labor Code and he falls, therefore, within the contemplation of the
term "instrumentality" in the aforequoted Sec. 9 of B.P. 129. The fact

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