DEL PILAR ACADEMY, EDUARDO ESPEJO and ELISEO OCAMPO, JR.

, petitioners,
vs.
DEL PILAR ACADEMY EMPLOYEES UNION, respondents.

G.R. No. 170112 April 30, 2008

FACTS: Respondent Del Pilar Academy Employees Union (the UNION) is the certified
collective bargaining representative of teaching and non-teaching personnel of petitioner
Del Pilar Academy (DEL PILAR), an educational institution operating in Imus, Cavite.

On September 15, 1994, the UNION and DEL PILAR entered into a Collective Bargaining
Agreement (CBA) granting salary increase and other benefits to the teaching and
non-teaching staff. The UNION then assessed agency fees from non-union employees, and
requested DEL PILAR to deduct said assessment from the employees’ salaries and wages.
DEL PILAR, however, refused to effect deductions claiming that the non-union employees
were not amenable to it.

In September 1997, the UNION negotiated for the renewal of the CBA. DEL PILAR, however,
refused to renew the same unless the provision regarding entitlement to two (2) months
summer vacation leave with pay will be amended by limiting the same to teachers, who
have rendered at least three (3) consecutive academic years of satisfactory service. The
UNION objected to the proposal claiming diminution of benefits. DEL PILAR refused to sign
the CBA, resulting in a deadlock. The UNION requested DEL PILAR to submit the case for
voluntary arbitration, but the latter allegedly refused, prompting the UNION to file a case for
unfair labor practice with the Labor Arbiter against DEL PILAR; Eduardo Espejo, its president;
and Eliseo Ocampo, Jr., chairman of the Board of Trustees.

DEL PILAR denied committing unfair labor practices against the UNION. It justified the
non-deduction of the agency fees by the absence of individual check off authorization from
the non-union employees.

ISSUE:

Whether or not the UNION is entitled to collect agency fees from non-union members, and
if so, whether an individual written authorization is necessary for a valid check off.

HELD:

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,
thus:

Employees of an appropriate collective bargaining unit who are not members of the
recognized collective bargaining agent may be assessed reasonable fees equivalent to the
dues and other fees paid by 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 241, paragraph (o) of this Code shall not
apply to the non-members of recognized collective bargaining agent.

When so stipulated in a collective bargaining agreement or authorized in writing by the

employees concerned, the Labor Code and its Implementing Rules recognize it to be the
duty of the employer to deduct the sum equivalent to the amount of union dues, as agency
fees, from the employees’ wages for direct remittance to the union. The system is referred
to as check off. No requirement of written authorization from the non-union employees is
necessary if the non-union employees accept the benefits resulting from the CBA.

The grant of annual salary increase is not the only provision in the CBA that benefited the
non-union employees. The UNION negotiated for other benefits, namely, limitations on
teaching assignments to 23 hours per week, additional compensation for overload units or
teaching assignments in excess of the 23 hour per week limit, and payment of longevity pay.
It also negotiated for entitlement to summer vacation leave with pay for two (2) months for
teaching staff who have rendered six (6) consecutive semesters of service. For the
non-teaching personnel, the UNION worked for their entitlement to fifteen (15) days leave
with pay.13 These provisions in the CBA surely benefited the non-union employees,
justifying the collection of, and the UNION’s entitlement to, agency fees.

Accordingly, no requirement of written authorization from the non-union employees is

needed to effect a valid check off. Article 248(e) makes it explicit that Article 241, paragraph
(o), requiring written authorization is inapplicable to non-union members, especially in
this case where the non-union employees receive several benefits under the CBA.

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.

Bank of the Philippine Islands v BPI Employees Union-Davao Chapter - Federation of

Unions in BPI Unibank

GR. No. 164301 August 10, 2010

Facts:

On April 7, 2000 the Articles and Plan of Merger between Bank of the Philippine Islands (BPI)
and Far East Bank and Trust Company (FEBTC) was approved by the Securities and Exchange
Commission (SEC). Pursuant to the Article and Plan of Merger, all the assets and liabilities of
FEBTC were transferred to and absorbed by BPI as the surviving corporation.
FEBTC employees were hired by petitioner as its own employees, with their status and
tenure recognized and salaries and benefits maintained.Respondent Union is the exclusive
bargaining agent of BPI’s rank and file employees in Davao City. The former FEBTC
rank-and-file employees in Davao City did not belong to any labor union at the time of the
merger. Prior to the effectivity of the merger, respondent Union invited said FEBTC
employees to a meeting regarding the Union Shop Clause (Article II, Section 2) of the existing
CBA between petitioner BPI and respondent Union.Section 2, Article II states:Union Shop -
New employees falling within the bargaining unit as defined in Article I of this Agreement,
who may hereafter be regularly employed by the Bank shall, within thirty (30) days after
they become regular employees, join the Union as a condition of their continued
employment Respondent Union then sent notices to the former FEBTC employees who
refused to join, as well as those who retracted their membership, and called them to a
hearing regarding the matter.

When these former FEBTC employees refused to attend the hearing, the president of the
Union requested BPI to implement the Union Shop Clause of the CBA and to terminate their
employment pursuant thereto. When the issue remained unsolved, the parties submitted it
to voluntary arbitration. The Voluntary Arbitrator ruled in favor of petitioner BPI’s
interpretation that the former FEBTC employees were not covered by the Union Security
Clause of the CBA on the ground that the said employees were not new employees who
were hired and subsequently regularized, but were absorbed employees “by operation of
law” because the “former employees of FEBTC can be considered assets and liabilities of the
absorbed corporation.”

Respondent Union filed a Motion for Reconsideration but it was denied. Respondent
appealed to the Court of Appeals (CA) which ruled in their favor. CA ruled that “new” and
“absorbed” employees are similar. Hence, the FEBTC employees are to be considered as
“new” employees for purposes of applying the provisions of the CBA regarding the
“union-shop” clause.Hence, this appeal.

ISSUE:

Whether or not the former FEBTC employees that were absorbed by petitioner upon the
merger between FEBTC and BPI should be covered by the Union Shop Clause found in the
existing CBA between petitioner and respondent Union.

RULING:

Petition is denied. The FEBTC employees are covered by the Union Shop Clause.

The court ruled that Section 2, Article II of the CBA is silent as to how one becomes a
“regular employee”of the BPI for the first time. However, it must be properly appreciated
that petitioner’s new regular employees(regardless of the manner by which they became
employees of BPI) are required to join the Union as a condition of their continued
employment.
As a general rule, all employees in the bargaining unit covered by a Union Shop Clause in
their CBA with management are subject to its terms. However, under law and
jurisprudence, the following kinds of employees are exempted from its coverage, namely,
employees who at the time the union shop agreement takes effect are bona fide members
of a religious organization which prohibits its members from joining labor unions on religious
grounds;employees already in the service and already members of a union other than the
majority at the time the union shop agreement took effect; confidential employees who are
excluded from the rank and file bargaining unit; and employees excluded from the union
shop by express terms of the agreement. In the case at bar, BPI failed to prove that the
situation of the former FEBTC employees fall to any of these exceptions.Petitioner argued
that as a consequence of the merger, that these absorbed employees as included in
the“assets and liabilities” of the dissolved corporation. The court however ruled that the
absorbed FEBTC employees are neither assets nor liabilities. It is contrary to public policy to
declare the former FEBTC employees as forming part of the assets or liabilities of FEBTC that
were transferred and absorbed by BPI in the Articles of Merger.

Assets and liabilities, in this case, should be deemed to refer only to property rights and
obligations of FEBTC and do not include the employment contracts of its personnel. The
Corporation Code (Sec. 80) does not mandate the absorption of the employees of the
non-surviving corporation by the surviving corporation in the case of a merger. Whether or
not there is a stipulation in the Articles of Merger and Plan of Merger with respect to the
employment contracts of existing personnel of the non-surviving entity, it does not follow
that the absorbed employees should not be subject to the terms and conditions of
employment obtaining in the surviving corporation.Citing American jurisprudence, the court
further ruled that on the consequences of voluntary mergers on the right to employment
and seniority rights, it has been recognized in some cases that the accumulated seniority
does not survive and cannot be transferred to the "new" job, unless stipulated in the
contract or agreement (Carver vBrien (1942) 315 Ill App 643, 43 NE2d 597).

The absorption of the dissolved corporation’s employees or the recognition of the absorbed
employees’ service with their previous employer may be demanded from the surviving
corporation if required by provision of law or contract. The lack of a provision in the plan of
merger regarding the transfer of employment contracts to the surviving corporation could
have very well been deliberate on the part of the parties to the merger, in order to grant the
surviving corporation the freedom to choose who among the dissolved corporation’s
employees to retain, in accordance with the surviving corporation’s business needs. The
surviving corporation is duty-bound to protect the rights of its own employees who may be
affected by the merger in terms of seniority and other conditions of their employment due
to the merger. With respect to FEBTC employees that BPI chose to employ and who also
chose to be absorbed, then due to BPI’s blanket assumption of liabilities and obligations
under the articles of merger, BPI was bound to respect the years of service of these FEBTC
employees and to pay the same, or commensurate salaries and other benefits that these
employees previously enjoyed with FEBTC.

Pampanga Bus Company vs. Pambusco Employees Union

GR. No. 46739 September 23, 1939

FACTS:

On May 31, 1939, the Court of Industrial Relations issued an order, directing the petitioner
herein, Pampanga Bus Company, Inc., to recruit from the respondent, Pambusco Employees'
Union, Inc., new employees or laborers it may need to replace members of the union who
may be dismissed from the service of the company, with the proviso that, if the union fails to
provide employees possessing the necessary qualifications, the company may employ any
other persons it may desire. This order, in substance and in effect, compels the company,
against its will, to employ preferentially, in its service, the members of the union.

ISSUE:

Whether or not the right of the employer to select its employees was violated.

RULING:

Yes. We hold that the court has no authority to issue such compulsory order. The general
right to make a contract in relation to one's business is an essential part of the liberty of the
citizens protected by the due-process clause of the Constitution. The right of the laborer to
sell his labor to such person as he may choose is, in its essence, the same as the right of an
employer to purchase labor from any person whom it chooses. The employer and the
employee have thus an equality of right guaranteed by the Constitution. "If the employer
can compel the employee to work against the latter's will, this is servitude. If the employee
can compel the employer to give him work against the employer's will, this is oppression."
(Mills vs. United States Printing Co., 99 App. Div., 605; 91 N.Y.S., 185, 189-192.) chanrobles
virtual law library.

Section of Commonwealth Act No. 213 confers upon labor organizations the right "to
collective bargaining with employers for the purpose of seeking better working and living
conditions, fair wages, and shorter working hours for laborers, and, in general, to promote
the material, social and moral well-being of their members." The term "collective
bargaining" denotes, in common usage as well as in legal terminology, negotiations looking
toward a collective agreement. This provision in granting to labor unions merely the right of
collective bargaining, impliedly recognizes the employer's liberty to enter or not into
collective agreements with them. Indeed, we know of no provision of the law compelling
such agreements. Such a fundamental curtailment of freedom, if ever intended by law upon
grounds of public policy, should be effected in a manner that is beyond all possibility of
doubt. The supreme mandates of the Constitution should not be loosely brushed aside. As
held by the Supreme Court of the United States in Hitchman Coal & Co. vs. Mitchell (245 U.
S., 229; 62 Law. ed., 260, 276):

. . . Whatever may be the advantages of "collective bargaining," it is not bargaining at all, in

any just sense, unless it is voluntary on both sides. The same liberty which enables men to
form unions, and through the union to enter into agreements with employers willing to
agree, entitles other men to remain independent of the union, and other employers to agree
with them to employ no man who owes any allegiance or obligation to the union. In the
latter case, as in the former, the parties are entitled to be protected by the law in the
enjoyment of the benefits of any unlawful agreements they make. This court repeatedly has
held that the employer is as free to make non-membership in a union a condition or
employment, as the working man is free to join the union, and that this is a part of the
constitutional rights of personal liberty and private property, not to be taken away by
legislation, unless through some proper exercise of the paramount police power.

GENERAL MILLING CORPORATION vs HON. COURT OF APPEALS, GENERAL MILLING

CORPORATION INDEPENDENT LABOR UNION (GMC-ILU), and RITO MANGUBAT

G.R. No. 146728 February 11, 2004

FACTS:

In its two plants located at Cebu City and Lapu-Lapu City, petitioner General Milling
Corporation (GMC) employed 190 workers. They were all members of private respondent
General Milling Corporation Independent Labor Union. On April 28, 1989, GMC and the
union concluded a collective bargaining agreement (CBA) which included the issue of
representation effective for a term of three years. The day before the expiration of the CBA,
the union sent GMC a proposed CBA, with a request that a counter-proposal be submitted
within ten (10) days. However, GMC had received collective and individual letters from
workers who stated that they had withdrawn from their union membership, on grounds of
religious affiliation and personal differences. Believing that the union no longer had standing
to negotiate a CBA, GMC did not send any counter-proposal.

On December 16, 1991, GMC wrote a letter to the union’s officers, Rito Mangubat and Victor
Lastimoso. The letter stated that it felt there was no basis to negotiate with a union which
no longer existed, but that management was nonetheless always willing to dialogue with
them on matters of common concern and was open to suggestions on how the company
may improve its operations. In answer, the union officers wrote a letter dated December 19,
1991 disclaiming any massive disaffiliation or resignation from the union and submitted a
manifesto, signed by its members, stating that they had not withdrawn from the union.
NLRC held that the action of GMC in not negotiating was ULP.

ISSUE:

WON the company (GMC) should have entered into collective bargaining with the union

HELD:

The law mandates that the representation provision of a CBA should last for five
years. The relation between labor and management should be undisturbed until the last 60
days of the fifth year. Hence, it is indisputable that when the union requested for a
renegotiation of the economic terms of the CBA on November 29, 1991, it was still the
certified collective bargaining agent of the workers, because it was seeking said
renegotiation within five (5) years from the date of effectivity of the CBA on December 1,
1988. The union’s proposal was also submitted within the prescribed 3-year period from
the date of effectivity of the CBA, albeit just before the last day of said period. It was
obvious that GMC had no valid reason to refuse to negotiate in good faith with the
union. For refusing to send a counter-proposal to the union and to bargain anew on the
economic terms of the CBA, the company committed an unfair labor practice under Article
248 of the Labor Code.

ART. 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….

ART. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to
commit any of the following unfair labor practice:

(g) To violate the duty to bargain collectively as prescribed by this Code;

Under Article 252 abovecited, both parties are required to perform their mutual obligation
to meet and convene promptly and expeditiously in good faith for the purpose of
negotiating an agreement. The union lived up to this obligation when it presented proposals
for a new CBA to GMC within three (3) years from the effectivity of the original CBA. But
GMC failed in its duty under Article 252. What it did was to devise a flimsy excuse, by
questioning the existence of the union and the status of its membership to prevent any
negotiation.
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.

GMC’s failure to make a timely reply to the proposals presented by the union is indicative of
its utter lack of interest in bargaining with the union. Its excuse that it felt the union no
longer represented the workers, was mainly dilatory as it turned out to be utterly baseless.

Failing to comply with the mandatory obligation to submit a reply to the union’s proposals,
GMC violated its duty to bargain collectively, making it liable for unfair labor practice.

KIOK LOY vs. NLRC and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN)

G.R. No. L-54334 January 22, 1986

FACTS:

In a certification election, KILUSAN, a legitimate late labor federation, won and was
subsequently certified in a resolution by the BLR as the sole and exclusive bargaining agent
of the rank-and-file employees of Sweden Ice Cream Plant (Company).

Thereafter, the Union furnished the Company with copies of its proposed CBA. At the same
time, it requested the Company for its counter proposals. The request were ignored and
remained unacted upon by the Company.

Left with no other alternative in its attempt to bring the Company to the bargaining table,
the Union filed a “Notice of Strike”, with the BLR on ground of unresolved economic issues in
collective bargaining.

The NLRC rendered its decision, the dispositive portion of which reads as follows:

WHEREFORE, the respondent [company] is hereby declared guilty of unjustified refusal to

bargain, in violation of Section (g) Article 248 (now Article 249), of P.D. 442, as amended. xx

ISSUE:

Did the NLRC act with grave abuse of discretion?

HELD: NO

Collective bargaining which is defined as negotiations towards a collective agreement, is one

of the democratic frameworks under the New Labor Code, designed to stabilize the relation
between labor and management and to create a climate of sound and stable industrial
peace. It is a mutual responsibility of the employer and the Union and is characterized as a
legal obligation. So much so that Article 249, par. (g) of the Labor Code makes it an unfair
labor practice for an employer to refuse “to meet and convene promptly and expeditiously
in good faith for the purpose of negotiating an agreement with respect to wages, hours of
work, and all other terms and conditions of employment including proposals for adjusting
any grievance or question arising under such an agreement and executing a contract
incorporating such agreement, if requested by either party.

We are in total conformity with respondent NLRC’s pronouncement that petitioner Company
is GUILTY of unfair labor practice. It has been indubitably established that (1) respondent
Union was a duly certified bargaining agent; (2) it made a definite request to bargain,
accompanied with a copy of the proposed CBA, to the Company not only once but twice
which were left unanswered and unacted upon; and (3) the Company made no counter
proposal whatsoever all of which conclusively indicate lack of a sincere desire to
negotiate. A Company’s refusal to make counter proposal if considered in relation to the
entire bargaining process, may indicate bad faith and this is specially true where the Union’s
request for a counter proposal is left unanswered. Even during the period of compulsory
arbitration before the NLRC, petitioner Company’s approach and attitude-stalling the
negotiation by a series of postponements, non-appearance at the hearing conducted, and
undue delay in submitting its financial statements, lead to no other conclusion except that it
is unwilling to negotiate and reach an agreement with the Union.

From the over-all conduct of petitioner company in relation to the task of negotiation, there
can be no doubt that the Union has a valid cause to complain against its (Company’s)
attitude, the totality of which is indicative of the latter’s disregard of, and failure to live up to,
what is enjoined by the Labor Code — to bargain in good faith.

NOTES: 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 . … all of which
preconditions are undisputedly present in the instant case.
THE INSULAR LIFE ASSURANCE CO., LTD., EMPLOYEES ASSOCIATION-NATU, FGU
INSURANCE GROUP WORKERS and EMPLOYEES ASSOCIATION-NATU, and INSULAR LIFE
BUILDING EMPLOYEES ASSOCIATION-NATU
vs.
THE INSULAR LIFE ASSURANCE CO., LTD., FGU INSURANCE GROUP, JOSE M. OLBES and
COURT OF INDUSTRIAL RELATIONS

G.R. No. L-25291 January 30, 1971

FACTS:

The Insular Life Assurance Co., Ltd., Employees Association-NATU, FGU Insurance Group
Workers & Employees Association-NATU, and Insular Life Building Employees
Association-NATU (hereinafter referred to as the Unions), while still members of the
Federation of Free Workers (FFW), entered into separate CBAs with the Insular Life
Assurance Co., Ltd. and the FGU Insurance Group (hereinafter referred to as the Companies).

Two of the lawyers of the Unions then were Felipe Enaje and Ramon Garcia; the latter was
formerly the secretary-treasurer of the FFW and acting president of the Insular Life/FGU
unions and the Insular Life Building Employees Association. Garcia, as such acting president,
in a circular issued in his name and signed by him, tried to dissuade the members of the
Unions from disaffiliating with the FFW and joining the National Association of Trade Unions
(NATU), to no avail.

Enaje and Garcia soon left the FFW and secured employment with the Anti-Dummy Board of
the Department of Justice. Thereafter, the Companies hired Garcia in the latter part of 1956
as assistant corporate secretary and legal assistant in their Legal Department. Enaje was
hired as personnel manager of the Companies, and was likewise made chairman of the
negotiating panel for the Companies in the collective bargaining with the Unions.

Unions jointly submitted proposals to the Companies; negotiations were conducted on the
Union’s proposals, but these were snagged by a deadlock on the issue of union shop, as a
result of which the Unions filed on January 27, 1958 a notice of strike for “deadlock on
collective bargaining.” The issue was dropped subsequently (in short, nagkasundo). But, the
parties negotiated on the labor demands but with no satisfactory result due to a stalemate
on the matter of salary increases.

Meanwhile, 87 unionists were reclassified as supervisors without increase in salary nor in

responsibility while negotiations were going on in the Department of Labor after the
notice to strike was served on the Companies. These employees resigned from the Unions.

On May 21, 1958 the Companies through their acting manager and president, sent to each
of the strikers a letter (exhibit A) quoted verbatim as follows:
We recognize it is your privilege both to strike and to conduct picketing.

However, if any of you would like to come back to work voluntarily, you may:

1. Advise the nearest police officer or security guard of your intention to do so.
2. Take your meals within the office.
3. Make a choice whether to go home at the end of the day or to sleep nights at the
office where comfortable cots have been prepared.
4. Enjoy free coffee and occasional movies.
5. Be paid overtime for work performed in excess of eight hours.
6. Be sure arrangements will be made for your families.
7. The decision to make is yours — whether you still believe in the motives of the strike
or in the fairness of the Management.

Unions, however, continued on strike, with the exception of a few unionists who were
convinced to desist by the aforesaid letter

From the date the strike was called on May 21, 1958, until it was called off on May 31,
1958, some management men tried to break thru the Unions’ picket lines xxx succeeded in
penetrating the picket lines in front of the Insular Life Building, thus causing injuries to the
picketers and also to the strike-breakers due to the resistance offered by some picketers.

Alleging that some non-strikers were injured and with the use of photographs as evidence,
the Companies then filed criminal charges against the strikers with the City Fiscal’s Office of
Manila.xxx

Another letter was sent by the company to the individual strikers:

The first day of the strike was last 21 May 1958.

Our position remains unchanged and the strike has made us even more convinced of our
decision.

We do not know how long you intend to stay out, but we cannot hold your positions open
for long. We have continued to operate and will continue to do so with or without you.

If you are still interested in continuing in the employ of the Group Companies, and if there
are no criminal charges pending against you, we are giving you until 2 June 1958 to report
for work at the home office. If by this date you have not yet reported, we may be forced to
obtain your replacement.

Before, the decisions was yours to make.

So it is now.

Incidentally, all of the more than 120 criminal charges filed against the members of the
Unions, except 3, were dismissed by the fiscal’s office and by the courts. These three cases
involved “slight physical injuries” against one striker and “light coercion” against two others.

At any rate, because of the issuance of the writ of preliminary injunction against them as
well as the ultimatum of the Companies giving them until June 2, 1958 to return to their jobs
or else be replaced, the striking employees decided to call off their strike and to report back
to work on June 2, 1958.

* However, before readmitting the strikers, the Companies required them not only to secure
clearances from the City Fiscal’s Office of Manila but also to be screened by a management
committee among the members of which were Enage and Garcia. The screening committee
initially rejected 83 strikers with pending criminal charges. However, all non-strikers with
pending criminal charges which arose from the breakthrough incident were readmitted
immediately by the Companies without being required to secure clearances from the fiscal’s
office. Subsequently, when practically all the strikers had secured clearances from the
fiscal’s office, the Companies readmitted only some but adamantly refused readmission to
34 officials and members of the Unions who were most active in the strike, on the ground
that they committed “acts inimical to the interest of the respondents,” without however
stating the specific acts allegedly committed. Some 24 of the above number were
ultimately notified months later that they were being dismissed retroactively as of June 2,
1958 and given separation pay checks computed under Rep. Act 1787, while others (ten in
number) up to now have not been readmitted although there have been no formal dismissal
notices given to them.

CIR prosecutor filed a complaint for unfair labor practice against the Companies under
Republic Act 875. The complaint specifically charged the Companies with (1) interfering with
the members of the Unions in the exercise of their right to concerted action, by sending out
individual letters to them urging them to abandon their strike and return to work, with a
promise of comfortable cots, free coffee and movies, and paid overtime, and, subsequently,
by warning them that if they did not return to work on or before June 2, 1958, they might be
replaced; and (2) discriminating against the members of the Unions as regards readmission
to work after the strike on the basis of their union membership and degree of participation
in the strike.

ISSUE:

Whether or not respondent company is guilty of ULP

HELD:

YES
The act of an employer in notifying absent employees individually during a strike following
unproductive efforts at collective bargaining that the plant would be operated the next day
and that their jobs were open for them should they want to come in has been held to be an
unfair labor practice, as an active interference with the right of collective bargaining
through dealing with the employees individually instead of through their collective
bargaining representatives.

Although the union is on strike, the employer is still under obligation to bargain with the
union as the employees’ bargaining representative.

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.

Indeed, when the respondents 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. It is equivalent to an attempt to
break a strike for an employer to offer reinstatement to striking employees individually,
when they are represented by a union, since the employees thus offered reinstatement are
unable to determine what the consequences of returning to work would be.

ULP: Hiring of Enage and Garcia with attractive compensations; respondents reclassified 87
employees as supervisors without increase in salary or in responsibility, in effect compelling
these employees to resign from their unions; respondents, thru their president and manager,
respondent Jose M. Olbes, brought three truckloads of non-strikers and others, escorted by
armed men, who, despite the presence of eight entrances to the three buildings occupied by
the Companies, entered thru only one gate less than two meters wide and in the process,
crashed thru the picket line posted in front of the premises of the Insular Life Building. This
resulted in injuries on the part of the picketers and the strike-breakers; respondents brought
against the picketers criminal charges, only three of which were not dismissed, and these
three only for slight misdemeanors. As a result of these criminal actions, the respondents
were able to obtain an injunction from the court of first instance restraining the strikers
from stopping, impeding, obstructing, etc. the free and peaceful use of the Companies’ gates,
entrance and driveway and the free movement of persons and vehicles to and from, out and
in, of the Companies’ buildings.

Verily, the above actuations of the respondents before and after the issuance of the letters,
exhibit A and B, yield the clear inference that the said letters formed of the respondents
scheme to preclude if not destroy unionism within them.
II. The respondents did not merely discriminate against all the strikers in general. They
separated the active from the less active unionists on the basis of their militancy, or lack of it,
on the picket lines. Unionists belonging to the first category were refused readmission even
after they were able to secure clearances from the competent authorities with respect to
the criminal charges filed against them.

It is noteworthy that — perhaps in an anticipatory effort to exculpate themselves from

charges of discrimination in the readmission of strikers returning to work — the respondents
delegated the power to readmit to a committee.

III. Anent the third assignment of error, the record shows that not a single dismissed striker
was given the opportunity to defend himself against the supposed charges against him. As
earlier mentioned, when the striking employees reported back for work on June 2, 1958, the
respondents refused to readmit them unless they first secured the necessary clearances; but
when all, except three, were able to secure and subsequently present the required
clearances, the respondents still refused to take them back.

Indeed, the individual cases of dismissed officers and members of the striking unions do not
indicate sufficient basis for dismissal.

STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE) vs. The Honorable MA. NIEVES R.
CONFESOR, in her capacity as SECRETARY OF LABOR AND EMPLOYMENT; and the
STANDARD CHARTERED BANK

G.R. No. 114974 June 16, 2004

FACTS:

Before the commencement of the negotiation for the new CBA between the bank and the
Union, the Union, through Divinagracia, suggested to the Bank’s Human Resource Manager
and head of the negotiating panel, Cielito Diokno, that the bank lawyers should be excluded
from the negotiating team. The Bank acceded. Meanwhile, Diokno(head of the negotiating
team for the bank) suggested to Divinagracia that Jose P. Umali, Jr., the President of the
National Union of Bank Employees (NUBE), the federation to which the Union was affiliated,
be excluded from the Union’s negotiating panel. However, Umali was retained as a member
thereof.

There was deadlock in the negotiations. Both parties alleged ULP. Bank alleged that the
Union violated its no strike- no lockout clause by filing a notice of strike before the NCMB.
Considering that the filing of notice of strike was an illegal act, the Union officers should be
dismissed. Union alleged unfair labor practice when the bank allegedly interfered with the
Union’s choice of negotiator. It argued that, Diokno’s suggestion that the negotiation be
limited as a “family affair” was tantamount to suggesting that Federation President Jose
Umali, Jr. be excluded from the Union’s negotiating panel. It further argued that, damage or
injury to the public interest need not be present in order for unfair labor practice to
prosper. The Union also contended that the Bank merely went through the motions of
collective bargaining without the intent to reach an agreement

ISSUE:

1. WON there was interference

2. WON the bank committed “surface bargaining”

HELD:

1.NONE
Article 248(a) of the Labor Code, considers it an unfair labor practice when an employer
interferes, restrains or coerces employees in the exercise of their right to self-organization
or the right to form association. The right to self-organization necessarily includes the right
to collective bargaining. Parenthetically, if an employer interferes in the selection of its
negotiators or coerces the Union to exclude from its panel of negotiators a representative of
the Union, and if it can be inferred that the employer adopted the said act to yield adverse
effects on the free exercise to right to self-organization or on the right to collective
bargaining of the employees, ULP under Article 248(a) in connection with Article 243 of the
Labor Code is committed.

In order to show that the employer committed ULP under the Labor Code, substantial
evidence is required to support the claim. Substantial evidence has been defined as such
relevant evidence as a reasonable mind might accept as adequate to support a
conclusion. In the case at bar, the Union bases its claim of interference on the alleged
suggestions of Diokno to exclude Umali from the Union’s negotiating panel.

The circumstances that occurred during the negotiation do not show that the suggestion
made by Diokno to Divinagracia is an anti-union conduct from which it can be inferred that
the Bank consciously adopted such act to yield adverse effects on the free exercise of the
right to self-organization and collective bargaining of the employees, especially considering
that such was undertaken previous to the commencement of the negotiation and
simultaneously with Divinagracia’s suggestion that the bank lawyers be excluded from its
negotiating panel.

The records show that after the initiation of the collective bargaining process, with the
inclusion of Umali in the Union’s negotiating panel, the negotiations pushed through. The
complaint was made only on August 16, 1993 after a deadlock was declared by the Union on
June 15, 1993.

It is clear that such ULP charge was merely an afterthought. The accusation occurred after
the arguments and differences over the economic provisions became heated and the parties
had become frustrated. It happened after the parties started to involve personalities. As the
public respondent noted, passions may rise, and as a result, suggestions given under less
adversarial situations may be colored with unintended meanings. Such is what appears to
have happened in this case.

2.NO. Surface bargaining is defined as “going through the motions of negotiating” without
any legal intent to reach an agreement.”
The Union alleges that the Bank violated its duty to bargain; hence, committed ULP under
Article 248(g) when it engaged in surface bargaining. It alleged that the Bank just went
through the motions of bargaining without any intent of reaching an agreement, as evident
in the Bank’s counter-proposals. It explained that of the 34 economic provisions it made, the
Bank only made 6 economic counter proposals. Further, as borne by the minutes of the
meetings, the Bank, after indicating the economic provisions it had rejected, accepted,
retained or were open for discussion, refused to make a list of items it agreed to include in
the economic package.

The minutes of meetings from March 12, 1993 to June 15, 1993 do not show that the Bank
had any intention of violating its duty to bargain with the Union. Records show that after the
Union sent its proposal to the Bank on February 17, 1993, the latter replied with a list of its
counter-proposals on February 24, 1993. Thereafter, meetings were set for the settlement
of their differences. The minutes of the meetings show that both the Bank and the Union
exchanged economic and non-economic proposals and counter-proposals.

The Union has not been able to show that the Bank had done acts, both at and away from
the bargaining table, which tend to show that it did not want to reach an agreement with
the Union or to settle the differences between it and the Union. Admittedly, the parties
were not able to agree and reached a deadlock. However, it is herein emphasized that the
duty to bargain “does not compel either party to agree to a proposal or require the
making of a concession.”

Hence, the parties’ failure to agree did not amount to ULP under Article 248(g) for violation
of the duty to bargain.

NOTE: (on the allegation of the bank’s refusal to give certain information) The Union, did not,
as the Labor Code requires, send a written request for the issuance of a copy of the data
about the Bank’s rank and file employees. Moreover, as alleged by the Union, the fact that
the Bank made use of the aforesaid guestimates, amounts to a validation of the data it had
used in its presentation.