G.R. No.

179146 July 23, 2013

HOLY CHILD CATHOLIC SCHOOL, Petitioner,

vs.
HON. PATRICIA STO. TOMAS, in her official capacity as Secretary of the Department of Labor and Employment,
and PINAG-ISANG TINIG AT LAKAS NG ANAKPAWIS – HOLY CHILD CATHOLIC SCHOOL TEACHERS AND
EMPLOYEES LABOR UNION (HCCS-TELU-PIGLAS), Respondents.

Labor Law; Certification Elections; Bystander Rule; It has been consistently held in a number of cases that a certification
election is the sole concern of the workers, except when the employer itself has to file the petition pursuant to Article 259
of the Labor Code, as amended, but even after such filing its role in the certification process ceases and becomes merely
a bystander.—Note must be taken that even without the express provision of Section 12 of RA No. 9481, the “Bystander
Rule” is already well entrenched in this jurisdiction. It has been consistently held in a number of cases that a certification
election is the sole concern of the workers, except when the employer itself has to file the petition pursuant to Article 259
of the Labor Code, as amended, but even after such filing its role in the certification process ceases and becomes merely
a bystander. The employer clearly lacks the personality to dispute the election and has no right to interfere at all therein.
This is so since any uncalled-for concern on the part of the employer may give rise to the suspicion that it is batting for a
company union. Indeed, the demand of the law and policy for an employer to take a strict, hands-off stance in certification
elections is based on the rationale that the employees’ bargaining representative should be chosen free from any
extraneous influence of the management; that, to be effective, the bargaining representative must owe its loyalty to the
employees alone and to no other.

Same; Collective Bargaining Agreements; The determination of whether union membership comprises managerial and/or
supervisory employees is a factual issue that is best left for resolution in the inclusion-exclusion proceedings, which has
not yet happened in this caseso still premature to pass upon.—The determination of whether union membership
comprises managerial and/or supervisory employees is a factual issue that is best left for resolution in the inclusion-
exclusion proceedings, which has not yet happened in this case so still premature to pass upon. We could only
emphasize the rule that factual findings of labor officials, who are deemed to have acquired expertise in matters within
their jurisdiction, are generally accorded not only with respect but even finality by the courts when supported by
substantial evidence. Also, the jurisdiction of this Court in cases brought before it from the CA via Rule 45 is generally
limited to reviewing errors of law or jurisdiction. The findings of fact of the CA are conclusive and binding. Except in certain
recognized instances, We do not entertain factual issues as it is not Our function to analyze or weigh evidence all over
again; the evaluation of facts is best left to the lower courts and administrative agencies/quasi-judicial bodies which are
better equipped for the task.

Same; Bargaining Units; Words and Phrases; A bargaining unit has been defined as a “group of employees of a given
employer, comprised of all or less than all of the entire body of employees, which the collective interests of all the
employees, consistent with equity to the employer, indicated to be best suited to serve reciprocal rights and duties of the
parties under the collective bargaining provisions of the law.”—A bargaining unit has been defined as a “group of
employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective
interests of all the employees, consistent with equity to the employer, indicated to be best suited to serve reciprocal rights
and duties of the parties under the collective bargaining provisions of the law.” In determining the proper collective
bargaining unit and what unit would be appropriate to be the collective bargaining agency, the Court, in the seminal case
of Democratic Labor Association v. Cebu Stevedoring Company, Inc., mentioned several factors that should be
considered, to wit: (1) will of employees (Globe Doctrine); (2) affinity and unity of employees’ interest, such as substantial
similarity of work and duties, or similarity of compensation and working conditions; (3) prior collective bargaining history;
and (4) employment status, such as temporary, seasonal and probationary employees. We stressed, however, that the
test of the grouping is community or mutuality of interest, because “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.”

Same; Certification Elections; The purpose of a certification election is precisely to ascertain the majority of the
employees’ choice of an appropriate bargaining unit — to be or not to be represented by a labor organization and, if in the
affirmative case, by which one.—Indeed, the purpose of a certification election is precisely to ascertain the majority of the
employees’ choice of an appropriate bargaining unit — to be or not to be represented by a labor organization and, if in the
affirmative case, by which one. At this point, it is not amiss to stress once more that, as a rule, only questions of law may
be raised in a Rule 45 petition. In Montoya v. Transmed Manila Corporation, the Court discussed the particular
parameters of a Rule 45 appeal from the CA’s Rule 65 decision on a labor case.
 [G.R. No. 91915. September 11, 1992.]

DIVINE WORD UNIVERSITY OF TACLOBAN, Petitioner,

v.
SECRETARY OF LABOR AND EMPLOYMENT and DIVINE WORD UNIVERSITY EMPLOYEES UNION-ALU,
Respondents.

Labor Laws; Bargaining Representatives; Certification election; Role of employer.—xxx [Petitioner’s undue interest in the
resolution of the DWU-IFEU’s motion for intervention becomes significant since a certification election is the sole concern
of employees except where the employer itself has to file a petition for certification election. But once an employer has
filed said petition, as the petitioner did in this case, its active role ceases and it becomes a mere bystander. Any uncalled-
for concern on the part of the employer may give rise to the suspicion that it is batting for a company union.

Same; Same; Same; Same; Bargaining deadlock presupposes reasonable effort at good faith bargaining.—xxx [A]n
employer who is requested to bargain collectively may file a petition for certification election any time except upon a clear
showing that one of these two instances exists: (a) the petition is filed within one year from the date of issuance of a final
certification election result or (b) when a bargaining deadlock had been submitted to conciliation or arbitration or had
become the subject of a valid notice of strike or lockout. While there is no question that the petition for certification election
was filed by the herein petitioner after almost four years from the time of the certification election and, therefore, there is
no question as to the timeliness of the petition, the problem appears to lie in the fact that the Secretary of Labor had found
that a bargaining deadlock exists. A “deadlock” is defined as the “counteraction of things producing entire stoppage: a
state of inaction or of neutralization caused by the opposition of persons or of factions (as in government or a voting
body): standstill.” There is a deadlock when there is a “complete blocking or stoppage resulting from the action of equal
and opposed forces; as, the deadlock of a jury or legislature.” The word is synonymous with the word impasse which,
within the meaning of the American federal labor laws, “presupposes reasonable effort at good faith bargaining which,
despite noble intentions, does not conclude in agreement between the parties.” A thorough study of the records reveals
that there was no “reasonable effort at good faith bargaining” specially on the part of the University. Its indifferent attitude
towards collective bargaining inevitably resulted in the failure of the parties to arrive at an agreement.

G.R. No. 111262 September 19, 1996

SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, represented by its President RAYMUNDO HIPOLITO,
JR., petitioner,
vs.
HON. MA. NIEVES D. CONFESOR, Secretary of Labor, Dept. of Labor & Employment, SAN MIGUEL
CORPORATION, MAGNOLIA CORPORATION (Formerly, Magnolia Plant) and SAN MIGUEL FOODS, INC.
(Formerly, B-Meg Plant), respondents.

Labor Law; Labor Unions; Collective Bargaining; Legislators inclined to have the effectivity of the CBA for three (3) years
insofar as the economic as well as non-economic provisions are concerned.—From the aforesaid discussions, the
legislators were more inclined to have the period of effectivity for three (3) years insofar as the economic as well as non-
economic provisions are concerned, except representation.

Same; Same; Same; No grave abuse of discretion on the part of the Secretary of Labor in ruling that the effectivity of the
renegotiated terms of the CBA shall be for three (3) years.—Thus, we do not find any grave abuse of discretion on the
part of the Secretary of Labor in ruling that the effectivity of the renegotiated terms of the CBA shall be for three (3) years.

Same; Same; Same; No merit in petitioner-union’s assertion that the employees of Magnolia and SMFI should still be
considered part of the bargaining unit of SMC.—With respect to the second issue, there is, likewise, no merit in petitioner-
union’s assertion that the employees of Magnolia and SMFI should still be considered part of the bargaining unit of SMC.

Same; Same; Same; Transformation of the companies is a managerial prerogative and business judgment which the
courts can not look into unless it is contrary to law, public policy or morals.—Undeniably, the transformation of the
companies was a management prerogative and business judgment which the courts can not look into unless it is contrary
to law, public policy or morals. Neither can we impute any bad faith on the part of SMC so as to justify the application of
the doctrine of piercing the corporate veil. Ever mindful of the employees’ interests, management has assured the
concerned employees that they will be absorbed by the new corporations without loss of tenure and retaining their present
pay and benefits according to the existing CBAs.

Same; Same; Same; Magnolia and SMFI became distinct entities with separate juridical personalities .—Indubitably,
therefore, Magnolia and SMFI became distinct entities with separate juridical personalities. Thus, they can not belong to a
single bargaining unit as held in the case of Diatagon Labor Federation Local 110 of the ULGWP v. Ople.

Same; Same; Same; 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.—
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.

Same; Same; Same; 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 .—Interests of
employees in the different companies perforce differ. SMC is engaged in the business of 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.

SECOND DIVISION

G.R. Nos. 184903 October 10, 2012

DIGITAL TELECOMMUNICATIONS PHILIPPINES, INC., Petitioner,

vs.
DIGITEL EMPLOYEES UNION (DEU), ARCELO RAFAEL A. ESPLANA, ALAN D. LICANDO, FELICITO C. ROMERO,
JR., ARNOLD D. GONZALES, REYNEL FRANCISCO B. GARCIA, ZOSIMO B. PERALTA, REGINO T. UNIDAD and
JIM L. JAVIER, Respondents.

Labor Law; Collective Bargaining Agreements (CBA); The pendency of a petition for cancellation of union registration
does not preclude collective bargaining.—The pendency of a petition for cancellation of union registration does not
preclude collective bargaining, thus: That there is a pending cancellation proceeding against the respondent Union is not
a bar to set in motion the mechanics of collective bargaining. If a certification election may still be ordered despite the
pendency of a petition to cancel the union’s registration certificate (National Union of Bank Employees vs. Minister of
Labor, 110 SCRA 274), more so should the collective bargaining process continue despite its pendency. We must
emphasize that the majority status of the respondent Union is not affected by the pendency of the Petition for Cancellation
pending against it. Unless its certificate of registration and its status as the certified bargaining agent are revoked, the
Hospital is, by express provision of the law, duty bound to collectively bargain with the Union.

Same; Labor-Only Contracting; Labor-only contracting is expressly prohibited by our labor laws.—Labor-only
contracting is expressly prohibited by our labor laws. Article 106 of the Labor Code defines labor-only contracting as
“supplying workers to an employer [who] does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers recruited and placed by such person are performing
activities which are directly related to the principal business of such employer.”

Same; Same; Job Contractors; “Labor-Only Contractors” and “Job Contractors,” Distinguished.—In PCI Automation
Center, Inc. v. National Labor Relations Commission, 252 SCRA 493 (1996), the Court made the following distinction: “the
legitimate job contractor provides services while the labor-only contractor provides only manpower. The legitimate job
contractor undertakes to perform a specific job for the principal employer while the labor-only contractor merely provides
the personnel to work for the principal employer.”
 Same; Termination of Employment; Retrenchment; Elements of a Valid Retrenchment.—For a valid retrenchment,
the following elements must be present: (1) That retrenchment is reasonably necessary and likely to prevent business
losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected,
are reasonably imminent as perceived objectively and in good faith by the employer; (2) That the employer served written
notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended
date of retrenchment; (3) That the employer pays the retrenched employees separation pay equivalent to one (1) month
pay or at least ½ month pay for every year of service, whichever is higher; (4) That the employer exercises its prerogative
to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees’
right to security of tenure; and (5) That the employer used fair and reasonable criteria in ascertaining who would be
dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age,
and financial hardship for certain workers.

Same; Same; Same; Unfair Labor Practice; The dismissal constitutes an unfair labor practice under Article 248(c) of the
Labor Code which refers to contracting 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.—It needs to be mentioned
too that the dismissal constitutes an unfair labor practice under Article 248(c) of the Labor Code which refers to
contracting 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. At the height of the labor dispute, occasioned by Digitel’s
reluctance to negotiate with the Union, I-tech was formed to provide, as it did provide, the same services performed by
Digiserv, the Union members’ nominal employer.

Same; Same; Backwages; Reinstatement; Under Article 279 of the Labor Code, an illegally dismissed employee is
entitled to backwages and reinstatement.—Under Article 279 of the Labor Code, an illegally dismissed employee is
entitled to backwages and reinstatement. Where reinstatement is no longer viable as an option, as in this case where
Digiserv no longer exists, separation pay equivalent to one (1) month salary, or one-half (1/2) month pay for every year of
service, whichever is higher, should be awarded as an alternative. The payment of separation pay is in addition to
payment of backwages.

Same; Same; Doctrine of Strained Relations; Separation Pay; Under the doctrine of strained relations, the payment
of separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or
viable.—Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to
reinstatement when the latter option is no longer desirable or viable. On one hand, such payment liberates the employee
from what could be a highly oppressive work environment. On the other hand, it releases the employer from the grossly
unpalatable obligation of maintaining in its employ a worker it could no longer trust.

Same; Moral Damages; Exemplary Damages; An illegally dismissed employee should be awarded moral and exemplary
damages as their dismissal was tainted with unfair labor practice.—An illegally dismissed employee should be awarded
moral and exemplary damages as their dismissal was tainted with unfair labor practice. Depending on the factual milieu,
jurisprudence has awarded varying amounts as moral and exemplary damages to illegally dismissed employees when the
dismissal is attended by bad faith or fraud; or constitutes an act oppressive to labor; or is done in a manner contrary to
good morals, good customs or public policy; or if the dismissal is effected in a wanton, oppressive or malevolent manner.

G.R. No. 169754. February 23, 2011.*

LEGEND INTERNATIONAL RESORTS LIMITED, petitioner,
vs.
KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT), respondent.

Labor Law; Labor Unions; Certification Election; An order to hold a certification election is proper despite the
pendency of the petition for cancellation of the registration certificate of the respondent union. —This issue is not new or
novel. In Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor, 312 SCRA 104 (1999), we already ruled that: Anent
the issue of whether or not the Petition to cancel/revoke registration is a prejudicial question to the petition for certification
election, the following ruling in the case of Association of the Court of Appeals Employees (ACAE) v. Hon. Pura Ferrer-
Calleja, 203 SCRA 596 (1991), x x x is in point, to wit: x x x At any rate, the Court applies the established rule correctly
followed by the public respondent that an order to hold a certification election is proper despite the pendency of the
petition for cancellation of the registration certificate of the respondent union. The rationale for this is that at the time the
respondent union filed its petition, it still had the legal personality to perform such act absent an order directing the
cancellation.

Same; Same; Same; The pendency of a petition for cancellation of union registration does not preclude collective
bargaining.—In Capitol Medical Center, Inc. v. Hon. Trajano, 462 SCRA 457 (2005), we also held that “the pendency of a
petition for cancellation of union registration does not preclude collective bargaining.” Citing the Secretary of Labor, we
held viz.: That there is a pending cancellation proceedings against the respondent Union is not a bar to set in motion the
mechanics of collective bargaining. If a certification election may still be ordered despite the pendency of a petition to
cancel the union’s registration certificate x x x more so should the collective bargaining process continue despite its
pendency.

Same; Same; Same; The legitimacy of the legal personality may not be subject to a collateral attack but only
through a separate action instituted particularly for the purpose of assailing it.—We agree with the ruling of the Office of
the Secretary of DOLE that the legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for
certification election proceeding. This is in consonance with our ruling in Laguna Autoparts Manufacturing Corporation v.
Office of the Secretary, Department of Labor and Employment, 457 SCRA 730 (2005), that “such legal personality may
not be subject to a collateral attack but only through a separate action instituted particularly for the purpose of assailing it.”

Same; Same; Same; Once a certificate of registration is issued to a union, its legal personality cannot be subject to
a collateral attack.—“[T]he legal personality of a legitimate labor organization x x x cannot be subject to a collateral attack.
The law is very clear on this matter. x x x The Implementing Rules stipulate that a labor organization shall be deemed
registered and vested with legal personality on the date of issuance of its certificate of registration. Once a certificate of
registration is issued to a union, its legal personality cannot be subject to a collateral attack. In may be questioned only in
an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules.”

G.R. No. 127598 February 22, 2000

MANILA ELECTRIC COMPANY, petitioner,

vs.
Hon. SECRETARY OF LABOR LEONARDO QUISUMBING and MERALCO EMPLOYEES and WORKERS
ASSOCIATION (MEWA), respondent.

Labor Law; Salaries; Bonus; As a rule, a bonus is not a demandable and enforceable obligation; it may nevertheless be
granted on equitable considerations as when the giving of such bonus has been the company’s long and regular practice.
—As a rule, a bonus is not a demandable and enforceable obligation; it may nevertheless be granted on equitable
considerations as when the giving of such bonus has been the company’s long and regular practice. To be considered a
“regular practice,” the giving of the bonus should have been done over a long period of time, and must be shown to have
been consistent and deliberate. Thus we have ruled in National Sugar Refineries Corporation vs. NLRC: “The test or
rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the
benefits knowing fully well that said employees are not covered by the law requiring payment thereof.”

Same; Same; Same.—In the case at bar, the record shows that MERALCO, aside from complying with the regular 13th
month bonus, has further been giving its employees an additional Christmas bonus at the tail-end of the year since 1988.
While the special bonuses differed in amount and bore different titles, it can not be denied that these were given
voluntarily and continuously on or about Christmas time. The considerable length of time MERALCO has been giving the
special grants to its employees indicates a unilateral and voluntary act on its part, to continue giving said benefits knowing
that such act was not required by law.
Same; Same; Same; The giving of the special bonus can no longer be withdrawn by the company as this would amount to
a diminution of the employee’s existing benefits.—Indeed, a company practice favorable to the employees has been
established and the payments made by MERALCO pursuant thereto ripened into benefits enjoyed by the employees.
Consequently, the giving of the special bonus can no longer be withdrawn by the company as this would amount to a
diminution of the employee’s existing benefits.

Same; Labor Union; Prohibition to Join Labor Union; Employees holding a confidential position are prohibited from joining
the union of the rank and file employees.—Both MERALCO and the Office of the Solicitor General dispute this ruling
because it disregards the rule We have established on the exclusion of confidential employees from the rank and file
bargaining unit. In Pier 8 Arrastre vs. Confesor and General Maritime and Stevedores Union, we ruled that: “Put another
way, the confidential employee does not share in the same ‘community of interests’ that might otherwise make him eligible
to join his rank and file co-workers, precisely because of a conflict in those interests.” Thus, in Metrolab Industries vs.
Roldan-Confesor, We ruled: “. . . . that the Secretary’s order should exclude the confidential employees from the regular
rank and file employees qualified to become members of the MEWA bargaining unit.” From the foregoing disquisition, it is
clear that employees holding a confidential position are prohibited from joining the union of the rank and file employees.

Same; Job-Contracting; The company can determine in its best business judgment whether it should contract out the
performance of some of its work for as long as the employer is motivated by good faith, and the contracting out must not
have been resorted to circumvent the law or must not have been the result of malicious or arbitrary action.—We recognize
that contracting out is not unlimited; rather, it is a prerogative that management enjoys subject to well-defined legal
limitations. As we have previously held, the company can determine in its best business judgment whether it should
contract out the performance of some of its work for as long as the employer is motivated by good faith, and the
contracting out must not have been resorted to circumvent the law or must not have been the result of malicious or
arbitrary action. The Labor Code and its implementing rules also contain specific rules governing contracting out
(Department of Labor Order No. 10, May 30, 1997, Sections 1-25).

Same; Collective Bargaining Agreement; Article 253-A serves as the guide in determining when the CBA is to take effect.
—Article 253-A serves as the guide in determining when the effectivity of the CBA at bar is to take effect. It provides that
the representation aspect of the CBA is to be for a term of 5 years, while “x x x [A]ll other provisions of the Collective
Bargaining Agreement shall be re-negotiated not later than 3 years after its execution. Any agreement on such other
provision of the Collective Bargaining Agreement entered into within 6 months from the date of expiry of the term of such
other provisions as fixed in such Collective Bargaining Agreement shall retroact to the day immediately following such
date. If such agreement is entered into beyond 6 months, the parties shall agree on the duration of the effectivity thereof.
x x x.”

Same; Same; If no agreement is reached within six (6) months from the expiry date of the three (3) years that follow the
CBA execution, the law expressly gives the parties the discretion to fix the effectivity of the agreement.—Under these
terms, it is clear that the 5-year term requirement is specific to the representation aspect. What the law additionally
requires is that a CBA must be re-negotiated within 3 years “after its execution.” It is in this re-negotiation that gives rise to
the present CBA deadlock. If no agreement is reached within 6 months from the expiry date of the 3 years that follow the
CBA execution, the law expressly gives the parties—not anybody else—the discretion to fix the effectivity of the
agreement.

Same; Same; Principle of Hold Over; 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. —
Significantly, the law does not specifically cover the situation where 6 months have elapsed but no agreement has been
reached with respect to effectivity. In this eventuality, we hold that any provision of law should then apply for the law
abhors a vacuum. One such provision is the principle of hold over, i.e., that in the absence of a new CBA, the parties must
maintain the status quo and must continue in full force and effect the terms and conditions of the existing agreement until
a new agreement is reached. In this manner, the law prevents the existence of a gap in the relationship between the
collective bargaining parties. Another legal principle that should apply is that in the absence of an agreement between the
parties, then, an arbitrated CBA takes on the nature of any judicial or quasi-judicial award; it operates and may be
executed only respectively unless there are legal justifications for its retroactive application.

G.R. No. 135547 January 23, 2002

GERARDO F. RIVERA, ALFRED A. RAMISO, AMBROCIO PALAD, DENNIS R. ARANAS, DAVID SORIMA, JR.,
JORGE P. DELA ROSA, and ISAGANI ALDEA, Petitioners,
vs.
HON. EDGARDO ESPIRITU in his capacity as Chairman of the PAL Inter-Agency Task Force created under
Administrative Order No. 16; HON. BIENVENIDO LAGUESMA in his capacity as Secretary of Labor and
Employment; PHILIPPINE AIRLINES (PAL), LUCIO TAN, HENRY SO UY, ANTONIO V. OCAMPO, MANOLO E.
AQUINO, JAIME J. BAUTISTA, and ALEXANDER O. BARRIENTOS, Respondents.

abor Law; Words and Phrases; Collective Bargaining Agreement, Defined; The primary purpose of a CBA is the
stabilization of labor-management relations in order to create a climate of a sound and stable industrial peace, and in
construing a CBA, the courts must be practical and realistic and give due consideration to the context in which it is
negotiated and the purpose which it is intended to serve.—A CBA is “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.” The primary purpose of a CBA is the stabilization of labor-
management relations in order to create a climate of a sound and stable industrial peace. In construing a CBA, the courts
must be practical and realistic and give due consideration to the context in which it is negotiated and the purpose which it
is intended to serve.

Same; Collective Bargaining; Article 253-A of the Labor Code has a two-fold purpose—one is to promote industrial
stability and predictability, and the other is to assign specific timetables wherein negotiations become a matter of right and
requirement; Nothing in Article 253-A prohibits the parties from waiving or suspending the mandatory timetables and
agreeing on the remedies to enforce the same.—The assailed PAL-PALEA agreement was the result of voluntary
collective bargaining negotiations undertaken in the light of the severe financial situation faced by the employer, with the
peculiar and unique intention of not merely promoting industrial peace at PAL, but preventing the latter’s closure. We find
no conflict between said agreement and Article 253-A of the Labor Code. Article 253-A has a two-fold purpose. One is to
promote industrial stability and predictability. Inasmuch as the agreement sought to promote industrial peace at PAL
during its rehabilitation, said agreement satisfies the first purpose of Article 253-A. The other is to assign specific
timetables wherein negotiations become a matter of right and requirement. Nothing in Article 253-A, prohibits the parties
from waiving or suspending the mandatory timetables and agreeing on the remedies to enforce the same.

Same; Same; The right to free collective bargaining, after all, includes the right to suspend it. —In the instant case, it was
PALEA, as the exclusive bargaining agent of PAL’s ground employees, that voluntarily entered into the CBA with PAL. It
was also PALEA that voluntarily opted for the 10-year suspension of the CBA. Either case was the union’s exercise of its
right to collective bargaining. The right to free collective bargaining, after all, includes the right to suspend it.

Same; Same; The acts of the public functionaries in sanctioning the 10-year suspension of the PAL-PALEA CBA did not
contravene the “protection to labor” policy of the Constitution.—The acts of public respondents in sanctioning the 10-year
suspension of the PAL-PALEA CBA did not contravene the “protection to labor” policy of the Constitution. The agreement
afforded full protection to labor; promoted the shared responsibility between workers and employers; and the exercised
voluntary modes in settling disputes, including conciliation to foster industrial peace.

Same; Same; Union Security Clauses; Unfair Labor Practice; The Court is unable to declare the objective of union
security an unfair labor practice.—The questioned proviso of the agreement reads: a. PAL shall continue recognizing
PALEA as the duly certified bargaining agent of the regular rank-and-file ground employees of the Company. Said proviso
cannot be construed alone. In construing an instrument with several provisions, a construction must be adopted as will
give effect to all. Under Article 1374 of the Civil Code, contracts cannot be construed by parts, but clauses must be
interpreted in relation to one another to give effect to the whole. The legal effect of a contract is not determined alone by
any particular provision disconnected from all others, but from the whole read together. The aforesaid provision must be
read within the context of the next clause, which provides: b. The ‘union shop/maintenance of membership’ provision
under the PAL-PALEA CBA shall be respected. The aforesaid provisions, taken together, clearly show the intent of the
parties to maintain “union security” during the period of the suspension of the CBA. Its objective is to assure the continued
existence of PALEA during the said period. We are unable to declare the objective of union security an unfair labor
practice. It is State policy to promote unionism to enable workers to negotiate with management on an even playing field
and with more persuasiveness than if they were to individually and separately bargain with the employer. For this reason,
the law has allowed stipulations “union shop” and “closed shop” as means of encouraging workers to join and support the
union of their choice in the protection of their rights and interests vis-à-vis the employer.

Same; Same; Under Article 253-A of the Labor Code, the representation limit for the exclusive bargaining agent applies
only when there is an extant CBA in full force and effect.—We also do not agree that the agreement violates the five-year
representation limit mandated by Article 253-A. Under said article, the representation limit for the exclusive bargaining
agent applies only when there is an extant CBA in full force and effect. In the instant case, the parties agreed to suspend
the CBA and put in abeyance the limit on the representation period.

Same; Same; The PAL-PALEA agreement dated 27 September 1998 is a valid exercise of the freedom to contract, and
under the principle of inviolability of contracts guaranteed by the Constitution, the contract must be upheld.—In sum, we
are of the view that the PAL-PALEA agreement dated September 27, 1998, is a valid exercise of the freedom to contract.
Under the principle of inviolability of contracts guaranteed by the Constitution, the contract must be upheld.
 G.R. No. 109002 April 12, 2000

DELA SALLE UNIVERSITY, petitioner,

vs.
DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA) and BUENAVENTURA MAGSALIN,
respondents.

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

G.R. No. 110072 April 12, 2000

DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION-NATIONAL FEDERATION OF TEACHERS AND

EMPLOYEES UNION (DLSUEA-NAFTEU), petitioner,
vs.
DELA SALLE UNIVERSITY and BUENAVENTURA MAGSALIN, respondents.

Labor Law; Certification Elections; Rules in a Petition for Certiorari Involving Labor Cases. —Now, before proceeding to
the discussion and resolution of the issues raised in the pending petitions, certain preliminary matters call for disposition.
As we reiterated in the case of Caltex Refinery Employees Association (CREA) vs. Jose S. Brillantes, the following are the
well-settled rules in a petition for certiorari involving labor cases. “First, the factual findings of quasijudicial agencies (such
as the Department of Labor and Employment), when supported by substantial evidence, are binding on this Court and
entitled to great respect, considering the expertise of these agencies in their respective fields. It is well-established that
findings of these administrative agencies are generally accorded nbt only respect but even finality. “Second, substantial
evidence in labor cases is such amount of relevant evidence which a reasonable mind will accept as adequate to justify a
conclusion. “Third, in Flores vs. National Labor Relations Commission, we explained the role and function of Rule 65 as
an extraordinary remedy: “It should be noted, in the first place, that the instant petition is a special civil action for certiorari
under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use is available only and restrictively in truly
exceptional cases—those wherein the action of an inferior court, board or officer performing judicial or quasi-judicial acts
is challenged for being wholly void on grounds of jurisdiction. 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 public respondent NLRC’s evaluation of the evidence and factual findings based thereon,
which are generally accorded not only great respect but even finality.

Same; Same; Bargaining Units; Collective Bargaining Agreements; The express exclusion of certain groups of employees
from the bargaining unit of the rank-and-file employees in a previous collective bargaining agreement does not bar any re-
negotiation for the future inclusion of the said employees in the bargaining unit.—The University’s arguments on the first
issue fail to impress us. The Court agrees with the Solicitor General that the express exclusion of the computer operators
and discipline officers from the bargaining unit of rank-and-file employees in the 1986 collective bargaining agreement
does not bar any re-negotiation for the future inclusion of the said employees in the bargaining unit. During the freedom
period, the parties may not only renew the existing collective bargaining agreement but may also propose and discuss
modifications or amendments thereto.

Same; Same; Same; Confidential Employees; Computer operators and discipline officers are not confidential employees.
—With regard to the alleged confidential nature of the said employees’ functions, after a careful consideration of the
pleadings filed before this Court, we rule that the said computer operators and discipline officers are not confidential
employees. As carefully examined by the Solicitor General, the service record of a computer operator reveals that his
duties are basically clerical and non-confidential in nature. As to the discipline officers, we agree with the voluntary
arbitrator that based on the nature of their duties, they are not confidential employees and should therefore be included in
the bargaining unit of rank-and-file employees.

Same; Same; Corporation Law; Piercing the Veil of Corporate Ficton; The employees of an affiliated educational
institution should be excluded from the bargaining unit of the rank-and-file employees of the other institution where the
two educational institutions have their own separate juridical personality and no sufficient evidence was shown to justify
the piercing of the veil of corporate fiction.—The Court also affirms the findings of the voluntary arbitrator that the
employees of the College of St. Benilde should be excluded from the bargaining unit of the rank-and-file employees of
Dela Salle University, because the two educational institutions have their own separate juridical personality and no
sufficient evidence was shown to justify the piercing of the veil of corporate fiction.

Same; Management Prerogatives; An employer, as an exercise of management prerogative, has the right to adopt valid
and equitable grounds as basis for terminating or transferring employees.—We agree with the voluntary arbitrator that as
an exercise of management prerogative, the University has the right to adopt valid and equitable grounds as basis for
terminating or transferring employees. As we ruled in the case of Autobus Workers’ Union (AWU) and Ricardo Escanlar
vs. National Labor Relations Commission, “[a] valid exercise of management prerogative is one which, among others,
covers: work assignment, working methods, time, supervision of workers, transfer of employees, work supervision, and
the discipline, dismissal and recall of workers. Except as provided for, or limited by special laws, an employer is free to
regulate, according to his own discretion and judgment, all aspects of employment.”

Same; Collective Bargaining; Financial Statements; Financial statements audited by independent external auditors
constitute the normal method of proof of profit and loss performance of a company—the financial capability of a company
cannot be based on its proposed budget because a proposed budget does not reflect the true financial condition of a
company.—On the fourth issue involving the voluntary arbitrator’s ruling that on the basis of the University’s proposed
budget, the University can no longer be required to grant a second round of wage increases for the school years 1991-92
and 1992-93 and charge the same to the incremental proceeds, we find that the voluntary arbitrator committed grave
abuse of discretion amounting to lack or excess of jurisdiction. As we ruled in the case of Caltex Refinery Employees
Association (CREA) vs. Jose S. Brillantes, “x x x x x x. [w]e believe that the standard proof of a company’s financial
standing is its financial statements duly audited by independent and credible external auditors.” Financial statements
audited by independent external auditors constitute the normal method of proof of profit and loss performance of a
company. The financial capability of a company cannot be based on its proposed budget because a proposed budget
does not reflect the true financial condition of a company, unlike audited financial statements, and more importantly, the
use of a proposed budget as proof of a company’s financial condition would be susceptible to abuse by scheming
employers who might be merely feigning dire financial condition in their business ventures in order to avoid granting salary
increases and fringe benefits to their employees.

G.R. No. 99395 June 29, 1993

ST. LUKE'S MEDICAL CENTER, INC., petitioner,

vs.
HON. RUBEN O. TORRES and ST. LUKE'S MEDICAL CENTER ASSOCIATION-ALLIANCE OF FILIPINO WORKERS
("SLMCEA-AFW"), respondents.

Labor Law; Labor Code; Considering public respondent’s expertise on the subject and his observance of the cardinal
principles of due process, the assailed order deserves to be accorded great respect by this Court.—We rule that the
Order, particularly in its disposition on the economic issues, was not arbitrarily imposed by public respondent. A perusal of
the Order shows that public respondent took into consideration the parties’ respective contentions, a clear indication that
he was keenly aware of their contrary positions. Both sides having been heard, they were allowed to present their
respective evidence. The due process requirement was thus clearly observed. Considering public respondent’s expertise
on the subject and his observance of the cardinal principles of due process, the assailed Order deserves to be accorded
great respect by this Court.

Same; Same; Labor Organization; A duly registered local union affiliated with a national union or federation does not lose
its legal personality or independence.—Only the collective bargaining agent, the local union SLMCEA in this case,
possesses legal standing to negotiate with petitioner. A duly registered local union affiliated with a national union or
federation does not lose its legal personality or independence.

Remedial Law; Jurisdiction; A party cannot invoke the jurisdiction of a Court to secure affirmative relief against his
opponent and after failing to obtain such relief, repudiate or question that same jurisdiction.—It is a settled rule that a party
cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and after failing to obtain such
relief, repudiate or question that same jurisdiction. A party cannot invoke jurisdiction at one time and reject it at another
time in the same controversy to suit its interests and convenience. The Court frowns upon and does not tolerate the
undesirable practice of some litigants who submit voluntarily a cause and then accepting the judgment when favorable to
them and attacking it for lack of jurisdiction when adverse.