100 KIOK LOY V NLRC AUTHOR: PAGCALIWAGAN

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

TOPIC: Collective Bargaining; Nature and Purpose
PONENTE: Cuevas, J.
CASE LAW/ DOCTRINE: 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.
Emergency Recit: Union won in a certification election and was subsequently certified by BLR as sole and exclusive bargaining
agent. There were various request by Union for collective bargaining negotiations but were always ignored by the Company. Issue
is WON the Company is guilty of ULP. (refer to underlined part in the ratio)
FACTS:
 Pambansang Kilusang Paggawa (Union), a legitimate labor federation won in a certification election.
 Union was subsequently certified in a resolution by BLR as the sole and exclusive bargaining agent of the rank-and-file
employees of Sweden Ice Cream Plant (Company)
 Union furnished Company with 2 copies of is proposed CBA.
 Union also requested the Company for its counter proposals
 There was no response from the Company.
 Thus Union again wrote Company reiterating its request for collective bargaining negotiations and for Company to
furnish them with counter proposals.
 Both requests were ignored and unacted upon.
 Union filed “Notice of Strike” with BLR on the ground of unresolved economic issues in collective bargaining.
 Conciliation proceeding followed.
 All attempts towards amicable settlement failed, thus BLR certified case to NLRC for compulsory arbitration.
 LA Fidelino set initial hearing.
 Parties failed to submit position papers, hearing was cancelled and reset.
 Union submitted position paper, Company did not and instead requested for reset.
 Case was further reset due to withdrawal of Company’s counsel of record. Another request for postponement for the
purpose of new counsel’s acquainting with case. Company submitted position paper.
 Case was called for hearing, Company’s representative Mr. Ching failed to appear. Company requested for another
postponement but was denied. LA ruled that Company waived his right to present further evidence.
Company’s Contentions: Maintains that its right to procedural due process has been violated when it was precluded from
presenting further evidence in support of its stand and when its request for further postponement was denied.
ISSUE(S): WON Company is guilty of unfair labor practice.

HELD: YES.
RATIO:
 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.
 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.
 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.
 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 Collective Bargaining Agreement, 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. Petitioner has not at any instance, evinced good faith or
willingness to discuss freely and fully the claims and demands set forth by the Union much less justify its opposition thereto.  
 As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner capitalizes on the issue of due
process claiming, that it was denied the right to be heard and present its side when the Labor Arbiter denied the Company's
motion for further postponement.
 Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements granted in its behalf, the
claimed denial of due process appeared totally bereft of any legal and factual support. As herein earlier stated, petitioner had
not even honored respondent Union with any reply to the latter's successive letters, all geared towards bringing the Company
to the bargaining table. It did not even bother to furnish or serve the Union with its counter proposal despite persistent
requests made therefor. Certainly, the moves and overall behavior of petitioner-company were in total derogation of the
policy enshrined in the New Labor Code which is aimed towards expediting settlement of economic disputes. Hence, this
Court is not prepared to affix its imprimatur to such an illegal scheme and dubious maneuvers.

101. Manila Fashions v. NLRC, N. Zamora, Nagkakaisang AUTHOR: Pineda

Manggagawa ng Manila Fashions Notes:
GR 117878
TOPIC: bargainable issues
PONENTE: Bellosillo, J.
CASE LAW/ DOCTRINE: As in all other contracts, parties are free to establish such stipulations, provided they are not contrary to
law, morals, good customs, public order, or public policy.
Emergency Recit
FACTS:
 Union filed a complaint against ER for non-implementation of the Wage Order mandating a P12 increase
 ER justifies its non-increase of wages on the CBA between ER and Union, that had a provision: “The Union realizes the
company’s closeness to insolvency and, as such, sympathizes with the financial condition. Therefore, the union has agreed to
condone the implementation of the Wage Order.
ISSUE(S): W/N ER exempted from compliance with wage order by virtue of CBA

HELD: NO. Parties cannot stipulate contrary to law. The law sets a minimum – that ER must comply with the wage increase.
RATIO:
 A CBA refers to the negotiated contract between a legitimate labor organization and the ER concerning working conditions.
 As in all other contracts, parties are free to establish such stipulations, provided they are not contrary to law, morals, good
customs, public order, or public policy.
 The CBA cannot contravene a Wage Order, mandated by law. Further, it is only the Tripartite Wage Productivity Board that
can grant exemptions form wage order. Hence, CBA provision VOID.

03 UNION OF THE FILIPRO EMPLOYEES-DRUG V. NESTLE AUTHOR: RAMOS

[G.R. 158930-31; August 22, 2006]  Edited Zosimo’s facts and included related ratio
TOPIC: Bargainable issues PONENTE: Chico-Nazario  Included only the ratio related to the topic
DOCTRINE:
 The Retirement Plan is consensual in character; and so, negotiable
 Inclusion of the retirement plan in the CBA as part of the package of economic benefits extended by the company to its EEs
to provide them a measure of financial security after they shall have ceased to be employed, reward their loyalty, boost their
morale and efficiency and promote industrial peace, gives a consensual character to the plan so that it may NOT be
terminated or modified at will by either party
ER: Nestle and the union are arguing about whether or not the matter of Retirement Plan is a bargainable issue. Nestle argues
that after a prior SC case between them was decided, the parties agreed that retirement plan was a unilateral grant on the part of
Nestle and is thus not a bargainable issue. To this end, they cite the 1998 Ground Rules for CBA Negotiations and the 1998
Memorandum of Agreement. The union denied that such documents reflect such a concession and that the Retirement Plan is
still a subject of CBA negotiations. The MOA itself had a provision that reference to the Retirement Plan was to be maintained in
the CBA. It also only talks of improvements upon or review of such improvements upon the plan. The Court agreed with the
union. In the earlier SC case, the Court categorically stated that the Retirement Plan was consensual in nature. (see doctrine for
continuation)
FACTS:
 4 April 2001: in consideration of the impending expiration of the existing CBA between Nestlé and the Union, the latter’s
presidents in the Alabang and Cabuyao Divisions (Ernesto Pasco and Diosdado Fortuna) informed Nestlé through its letter of
intent to create a new CBA.
 29 May 2001: Nestlé underscored its position that “unilateral grants, one-time company grants, company-initiated policies
and programs, which include, but are not limited to the Retirement Plan, Incidental Straight Duty Pay and Calling Pay
Premium, are by their very nature NOT proper subjects of CBA negotiations and therefore shall be excluded in the CBA.” It
also excluded the Alabang Division from the negotiations because the plant is already closed.
 Nestlé claimed that an impasse was reached, so they requested the NCMB, Regional Office IV to conduct preventive
mediation proceedings between it and the Union. Despite 15 meetings, they failed to reach any agreement on the proposed
CBA.
o Conciliation proceedings were nevertheless ineffective.
 Union filed a Notice of Strike, complaining of bargaining deadlock on economic issues (retirement plan, panel composition,
costs, attendance)
 Union filed another Notice of Strike based on Nestlé’s alleged ULPs (i.e., bargaining in bad faith in that it was setting
preconditions in the ground rules by refusing to include the issue of the Retirement Plan in the CBA negotiations).
 In view of the looming strike, Nestlé filed with DOLE a Petition for SOLE Sto. Tomas to assume jurisdiction over the dispute,
per Art 263 (g).
o SOLE assumed jurisdiction and ordered the parties to cease and desist from committing any act that might
deteriorate the situation further and to meet for the discussion of the union proposals and company counter-
proposals before the NCMB.
 The Union sought reconsideration questioning the constitutionality of LC Art 263 (g).
o SOLE defended the constitutionality, invoking an SC decision which said that the provision does not violate the right
to strike
 Despite SOLE’s injunction, the Union went on strike at the Nestlé Cabuyao Plant.
o SOLE issued a return-to-work order (ignored). PNP was asked to help with the enforcement.
 At the hearing:
o Nestlé addressed several issues allegedly pertaining to the current labor dispute (economic provisions of the CBA as
well as the non-inclusion of the issue of the Retirement Plan in the collective bargaining negotiations).
o Union limited itself to tackling the issue of WON the retirement plan was a mandatory subject in its CBA
negotiations with the company, contending that the Order of Assumption of Jurisdiction covers only the issue of
Retirement Plan.
 8 Feb 2002: Nestle moved that Union be declared to have waived its right to present arguments respecting the other issues
raised by the company since the latter limited itself to discussing only 1 issue.
 SOLE: allowed Union the chance to tender its stand on the other issues raised by Nestle
o Union: manifested that the SOLE’s order was contrary to law as the Secretary could only assume jurisdiction over
issues mentioned in the subject notice of strike. Here, the Amended Notice of Strike did not cite the CBA deadlock as
a ground
 SOLE: denied Union’s manifestation with MR. Afterwards, the Union filed a petition for Certiorari before the CA.
 Acting SOLE Arturo Brion: ruled in favor of Nestle. Dismissed the Union’s charges against Nestlé for ULP.
o Retirement Plan at the Nestle Cabuyao Plant is a unilateral grant that the parties have expressly recognized
subsequent to the SC ruling in Nestle v. NLRC, and is therefore NOT a mandatory subject for bargaining
 SOLE: denied Union’s MR
 CA: acting on the 2 petitions for Certiorari, nullified SOLE’s orders. Ruled in favor of the Union in stating that SOLE acted in
grave abuse of her discretion in declaring the retirement plan as not a mandatory subject for bargaining. Nestle was also
absolved of ULP charges.
o Both parties moved for reconsideration
ISSUE: WON the retirement plan was negotiable / a proper subject to be included in the CBA negotiations between the parties
HELD: YES, the Retirement Plan is a valid issue in the CBA negotiations. As to this, the CA decision is AFFIRMED. Parties to
continue negotiations.
 CA: Union signed a Memorandum of Agreement (Oct 8, 1998) with Nestle which states that the Company agreed to extend
 the following unilateral grants which shall not form part of the CBA. HOWEVER, the same document made a proviso that
reference on the Retirement Plan in the CBA signed on July 4, 1995, shall be maintained. As such, the Retirement Plan is still
a valid CBA issue. It is to be used as an integral part of the CBA and as a topic for future bargaining. SC, in the previous Nestle
case, held the Retirement Plan was a CB issue from the start,
 Nestle: after the 1991 SC Decision was promulgated, there was an agreement by the parties to no longer consider the
Retirement Plan as a negotiable item subject to bargaining. Rather, said benefit would be regarded as a unilateral grant
outside the ambit of negotiation.
o Under the Ground Rules for 1998 Alabang/Cabuyao Factories CBA Negotiation, both sides expressly recognized
Nestle’s prerogative to initiate unilateral grants which are not negotiable.
o The Memorandum of Agreement also referred to the Retirement Plan as one of the unilateral grants alluded to in
the Ground Rules.
o clear agreement to remove the Retirement Plan from the scope of CBA negotiation, such being under Nestle’s sole
discretion
 Union: nothing in either documents aboveclaimed proves that it agreed to treat the Retirement Plan as a unilateral grant of
the company. The MOA merely speaks of the improvement or the review for the improvement of the current Retirement Plan
and nothing else
o Had the objective been to consider the Retirement Plan as not a subject for collective bargaining, they would have
expressly stated so in categorical terms. Or, they could have deleted the said benefit from the CBA.
o Since the Retirement Plan did not derive its existence from the letter and MOA, its nature was not altered by the
subsequent issuance by Nestle of the letter and MOA. The Retirement Plan remained a proper subject of CB, per SC’s
1991 ruling.

 SC: We agree with the Union.

 In the 1991 decision involving the same parties, the SC affirmed that the retirement plan is consensual in nature
o EEs resorted to a slowdown and walked out of the factory, prompting management to shut down its operations.
Collective bargaining negotiations reached a deadlock. SOLE assumed jurisdiction and issued a return-to-work order.
NLRC issued its resolution modifying Nestle’s existing non-contributory Retirement Plan. Nestle filed a petition for
certiorari alleging grave abuse of discretion on the part of the NLRC, as Nestle was arguing that since its Retirement
Plan is non-contributory, it should be a non-issue in CBA negotiations. Nestle had the sole and exclusive prerogative
to define the terms of the plan as the EEs had no vested and demandable rights thereon, the grant of such being
gratuitous and not an obligation.
o SC: inclusion of the retirement plan in the CBA as part of the package of economic benefits extended by the
company to its EEs to provide them a measure of financial security after they shall have ceased to be employed,
reward their loyalty, boost their morale and efficiency and promote industrial peace, gives a consensual character to
the plan so that it may not be terminated or modified at will by either party
o That the retirement plan is non-contributory (EEs contribute nothing to its operation) does NOT make it a non-issue
in the CBA negotiations. Most of the benefits Nestle has granted to its EEs under the CBA are non-contributory
benefits.
o Since the retirement plan has been an integral part of the CBA since 1972, the Union’s demand to increase the
benefits due the EEs under said plan, is a VALID CBA issue
o EEs do have a vested and demandable right over existing benefits voluntarily granted to them by their ER. The
latter may NOT unilaterally withdraw, eliminate or diminish such benefits (Company Policy na)
 Here, in demanding that the terms of the Retirement Plan be opened for renegotiation, the members of UFE-DFA-KMU acted
well within their rights, as we have declared that the Retirement Plan is consensual in character; and so, negotiable
o CBA that was about to expire contained provisions respecting the Retirement Plan. As the latter benefit was already
subject of the existing CBA, the members of the Union were only exercising their prerogative to bargain or
renegotiate for the improvement of the terms of the Retirement Plan just like they would for all the other benefits
previously enjoyed by them.
o Precisely, the PURPOSE OF COLLECTIVE BARGAINING is the acquisition or attainment of the best possible covenants
or terms relating to economic and non-economic benefits granted by ERs and due the EEs. The Labor Code imposed
as a mutual obligation of both parties, this duty to bargain collectively [LC Art 252].
 ART. 252. The DUTY TO BARGAIN COLLECTIVELY means the performance of a mutual obligation to meet
and confer promptly and expeditiously and in good faith for the purpose of negotiating an agreement with
respect to wages, hours of work, and all other terms and conditions of employment including proposals for
adjusting any grievances or questions arising under such agreement and executing a contract incorporating
such agreement if requested by either party, but such duty does not compel any party to agree to a
proposal or to make any concession
 ART. 253. DUTY TO BARGAIN COLLECTIVELY WHEN THERE EXISTS A CBA. The duty to bargain collectively
 shall also mean that either party shall NOT terminate nor modify such agreement during its lifetime.
However, either party can serve a written notice to terminate or modify the agreement at least 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.
o Contrary to Neste’s claim that the categorical mention of the terms “unilateral agreement” in the letter and the
MOA signed by the Union estopped them from raising it as an issue in the CBA negotiations, the provisions of the
same does NOT persuade us that the members of the Union agreed to treat the Retirement Plan as a benefit
dependent on Nestle, removed from the ambit of the CBA
 Par. 6: the COMPANY agrees to extend the following unilateral grants which shall not form part of the CBA:
 Sub-Par. 6.2: Review for improvement of the Retirement Plan and the reference on the Retirement Plan in
the CBA signed on 4 July 1995 shall be maintained
 Sub-Par. 6.2 highlights an undeniable fact that Nestle recognizes that the Retirement Plan is part of the
existing CBA
o NOTE: The consensual nature of the Retirement Plan NEITHER gives the union members the unfettered right nor the
unbridled prerogative to demand more than what the company can viably give.

103. Samahan ng Manggagawa sa Top Form Manufacturing V. AUTHOR: REYES

NLRC NOTES:
TOPIC: Bargainable Issues
PONENTE: J. Romero
CASE LAW/ DOCTRINE:
 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.
 On account of the importance of the economic issue proposed by petitioner union, it could have refused to bargain and to
enter into a CBA with private respondent. On the other hand, private respondents firm stand against the proposal did not
mean that it was bargaining in bad faith
Emergency Recit:
SMTFM and the management held a collective bargaining negotiation. The parties agreed to discuss unresolved economic issues.
According to the minutes of the meeting, ArticleVII of the collective bargaining agreement was discussed In the minutes of the
meeting, across the board wage increase was tackled but it was not stated anymore in the CBA since the union dropped such
proposals relying to the undertakings made by the officials of the company. RTWPB-NCR issued Wage Order No. 01 granting an
increase of P17.00 per day in the salary of workers. This was followed by Wage Order No. 02 providing for a P12.00 daily increase
in salary. As expected, the union requested the implementation of said wage orders. However, they demanded that the increase be
on an across-the-board basis. Private respondent refused to accede to that demand. Instead, it implemented a scheme of increases
purportedly to avoid wage distortion. The union filed a complaint with the NCR NLRC alleging that private respondents act of
reneging on its undertaking/promise clearly constitutes an act of unfair labor practice through bargaining in bad faith. SC held that
On account of the importance of the economic issue proposed by petitioner union, it could have refused to bargain and to enter into
a CBA with private respondent. On the other hand, private respondents firm stand against the proposal did not mean that it was
bargaining in bad faith.

It had the right to insist on (its) position to the point of stalemate. On the part of petitioner union, the importance of its proposal
dawned on it only after the wage orders were issued after the CBA had been entered into. Indeed, from the facts of this case, the
charge of bad faith bargaining on the part of private respondent was nothing but a belated reaction to the implementation of the
wage orders that private respondent made in accordance with law
FACTS:
 Petitioner Samahang Manggagawa sa Top Form Manufacturing United Workers of the Philippines (SMTFM) was the certified
collective bargaining representative of all regular rank and file employees of private respondent Top Form Manufacturing
Philippines, Inc.
 At the collective bargaining negotiation, the parties agreed to discuss unresolved economic issues. According to the minutes
of the meeting, Article VII of the collective bargaining agreement was discussed. The following appear in said Minutes:
Section 3. Union proposed that any future wage increase given by the government should be
implemented by the company across-the-board or non-conditional.
 Management requested the union to retain this provision since their sincerity was already proven when the P25.00 wage
increase was granted across-the-board.
 In their joint affidavit, union members affirmed that at the subsequent collective bargaining negotiations, the union insisted
on the incorporation in the collective bargaining agreement (CBA) of the union proposal on automatic across-the-board wage
increase.
 On October 15, 1990, the RTWPB-NCR issued Wage Order No. 01 granting an increase of P17.00 per day in the salary of
workers. This was followed by Wage Order No. 02 providing for a P12.00 daily increase in salary.
 As expected, the union requested the implementation of said wage orders.
 However, they demanded that the increase be on an across-the-board basis.
 Private respondent refused to accede to that demand. Instead, it implemented a scheme of increases purportedly to avoid
wage distortion.
 Thus, private respondent granted the P17.00 increase under Wage Order No. 01 to workers/employees receiving salary of
P125.00 per day and below.
 The P12.00 increase mandated by Wage Order No. 02 was granted to those receiving the salary of P140.00 per day and
below. For employees receiving salary higher than P125.00 or P140.00 per day, private respondent granted an escalated
increase ranging from P6.99 to P14.30 and from P6.00 to P10.00, respectively.
 On October 24, 1991, the union, through its legal counsel, wrote private respondent a letter demanding that it should fulfill
its pledge of sincerity to the union by granting an across-the-board wage increases to all employees under the wage orders.
 The union reiterated that it had agreed to retain the old provision of CBA on the strength of private respondents promise and
assurance of an across-the-board salary increase should the government mandate salary increases.
 Despite Several conferences between the parties, private respondent adamantly maintained its position on the salary
increases it had granted that were purportedly designed to avoid wage distortion.
 Consequently, the union filed a complaint with the NCR NLRC alleging that private respondents act of reneging on its
undertaking/promise clearly constitutes an act of unfair labor practice through bargaining in bad faith.
 Private respondent, on the other hand, contended that in implementing Wage Orders Nos. 01 and 02, it had avoided the
existence of a wage distortion that would arise from such implementation. It asserted that there was no agreement to the
effect that future wage increases mandated by the government should be implemented on an across-the-board basis.
 On March 11, 1992, Labor Arbiter Jose G. de Vera rendered a decision dismissing the complaint for lack of merit. He
considered two main issues in the case: (a) whether or not respondents are guilty of unfair labor practice, and (b) whether or
not the respondents are liable to implement Wage Orders Nos. 01 and 02 on an across-the-board basis. Otherwise, that
agreement would have been incorporated and expressly stipulated in the CBA. It quoted the provision of the CBA that reflects
the parties intention to fully set forth therein all their agreements that had been arrived at after negotiations that gave the
parties unlimited right and opportunity to make demands and proposals with respect to any subject or matter not removed
by law from the area of collective bargaining
 Not satisfied, petitioner appealed to the NLRC that, in turn, promulgated the assailed Resolution of April 29, 1993 dismissing
the appeal for lack of merit.
 Still dissatisfied, petitioner sought reconsideration which however, was denied by the NLRC.
ISSUE(S):
(a) Whether or not private respondent committed an unfair labor practice in its refusal to grant across-the-board wage
increases in implementing Wage Orders Nos. 01 and 02,
(b) Whether or not there was a significant wage distortion of the wage structure in private respondent as a result of the
manner by which said wage orders were implemented
HELD: There was no unfair labor practice. The finding of fact by the lower courts shall be accorded respect in that they found
there was a significant wage distortion if the orders were granted across the board

RATIO

 With respect to the first issue, petitioner union anchors its arguments on the alleged commitment of private respondent
to grant an automatic across-the-board wage increase in the event that a statutory or legislated wage increase is
promulgated.
 The basic premise of this argument is definitely untenable. To start with, if there was indeed a promise or undertaking on
the part of private respondent to obligate itself to grant an automatic across-the-board wage increase, petitioner union
should have requested or demanded that such promise or undertaking be incorporated in the CBA.
 It could have invoked Article 252 of the Labor Code defining duty to bargain, thus, the duty includes executing a contract
incorporating such agreements if requested by either party.
 Petitioner unions assertion that it had insisted on the incorporation of the same proposal may have a factual basis
considering the allegations in the aforementioned joint affidavit of its members. However, Article 252 also states that the
duty to bargain does not compel any party to agree to a proposal or make any concession.
  The collective bargaining representative and the employer-company. Compliance with a CBA is mandated by the
expressed policy to give protection to labor.
 In the same vein, CBA provisions should be construed liberally rather than narrowly and technically, and the courts must
place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and
purpose which it is intended to serve."
 This is founded on the dictum that a CBA is not an ordinary contract but one impressed with public interest. It goes
without saying, however, that only provisions embodied in the CBA should be so interpreted and complied with. Where a
proposal raised by a contracting party does not find print in the CBA, it is not a part thereof and the proponent has no
claim whatsoever to its implementation.
 At the negotiations, it is but natural for both management and labor to adopt positions or make demands and offer
proposals and counter-proposals. However, nothing is considered final until the parties have reached an agreement.
 In fact, one of managements usual negotiation strategies is to agree tentatively as you go along with the understanding
that nothing is binding until the entire agreement is reached. If indeed private respondent promised to continue with the
practice of granting across-the-board salary increases ordered by the government, such promise could only be
demandable in law if incorporated in the CBA.
 Moreover, by making such promise, private respondent may not be considered in bad faith or at the very least, resorting
to the scheme of feigning to undertake the negotiation proceedings through empty promises. As earlier stated,
petitioner union had, under the law, the right and the opportunity to insist on the foreseeable fulfillment of the private
respondents promise by demanding its incorporation in the CBA. Because the proposal was never embodied in the CBA,
the promise has remained just that, a promise, the implementation of which cannot be validly demanded under the law.
 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.
 On account of the importance of the economic issue proposed by petitioner union, it could have refused to bargain and
to enter into a CBA with private respondent. On the other hand, private respondents firm stand against the proposal did
not mean that it was bargaining in bad faith.
 It had the right to insist on (its) position to the point of stalemate. On the part of petitioner union, the importance of its
proposal dawned on it only after the wage orders were issued after the CBA had been entered into.
 Indeed, from the facts of this case, the charge of bad faith bargaining on the part of private respondent was nothing but
a belated reaction to the implementation of the wage orders that private respondent made in accordance with law.
 In other words, petitioner union harbored the notion that its members and the other employees could have had a better
deal in terms of wage increases had it relentlessly pursued the incorporation in the CBA of its proposal.
 The inevitable conclusion is that private respondent did not commit the unfair labor practices of bargaining in bad faith
and discriminating against its employees for implementing the wage orders pursuant to law.

104. Caltex Refinery Employees Association v. Brillantes, AUTHOR: S A Y O

G.R. No. 123782. September 16, 1997 NOTES: Hindi clear ano gusto ni union. Also walang nabanggit
TOPIC: Bargaining Procedure (Labor Procedure) sa ruling ni DOLE. Yan lang din namention sa doctrine regarding
PONENTE: PANGANIBAN Bargaining
CASE LAW/ DOCTRINE: When parties agree to submit unresolved issues to the secretary of labor for his resolution, they should
not expect their positions to be adopted in toto. It is understood that they defer to his wisdom and objectivity in insuring
industrial peace. And unless they can clearly demonstrate bias, arbitrariness, capriciousness or personal hostility on the part of
such public officer, the Court will not interfere or substitute the said officer’s judgment with its own.
Emergency Recit: CREA and Caltex Ph, upon several tries to negotiate the terms of their CBA (5 issues mentioned in the ratio)
since it was nearing its expiration, failed to agree thus strikes and deadlocks occurred. The dispute was submitted to the DOLE for
resolution. The DOLE decision (not mentioned) was contrary what the union has hoped for thus this action. SC basically defined
the nature of bargaining: It should be understood that bargaining is not equivalent to an adversarial litigation where rights and
obligations are delineated and remedies applied—it is simply a process of finding a reasonable solution to a conflict and
harmonizing opposite positions into a fair and reasonable compromise.
FACTS:
 Petitioner Caltex Refinery Employees Association (CREA) seeks through Rule 65 of the Rules of Court reversal or modification
of three orders
 Anticipating the expiration of their CBA, petitioner (CREA) and private respondent (CALTEX Ph) negotiated the terms and
 conditions of employment to be contained in a new CBA. 
 The negotiation between the two parties was participated in by the National Conciliation and Meditation Board (NCMB) and
the Office of the Secretary of Labor and Employment. 
 Some items in the new CBA were amicably arrived at and agreed upon, but some others were unresolved.
 To settle the unresolved issues, eight meetings between the parties were conducted. (failed to reach progress, deadlock was
declared by petitioner)
 On July 24, 1995, petitioner filed a notice of strike. (after conciliation meetings and marathon meetings, they still failed to
settle)
 During a strike vote on August 16, 1995, the members of petitioner opted for a walkout. 
 Private respondent then filed with the Department of Labor and Employment (DOLE) a petition for assumption of jurisdiction
in accordance with Article 263 (g) of the Labor Code.
 DOLE assumed jurisdiction. (ordered any strike or lockout, whether actual or intended, is hereby enjoined; parties are
further directed to cease and desist from committing any and all acts which might exacerbate the situation)
 In defiance of the above Order, petitioner began a strike and set up a picket in the premises of private respondent. They
were directed to return to work but the order was defied.
 In the course of the strike, DOLE Undersecretary Laguesma interceded and conducted several conciliation meetings between
the contending parties. (He convinced the members to return to work but were subsequently terminated)
 Again, the parties tried to resolve their differences through conciliation. (Still failed)
 Petitioner does not specifically pinpoint the issues it wants the Court to rule upon. It appears, however, that petitioner
questions public respondents resolution of five issues in the CBA.
ISSUE(S): WON DOLE erred in its resolution- NO

HELD: We have carefully reviewed the assailed Orders. Other than his failure to rule on the issue of union security, the secretary
of labor cannot be indicted for grave abuse of discretion amounting to want or excess of jurisdiction. (Remanded to DOLE only
with respect to the Union Security issue)
RATIO:
 The foregoing requirement has been sufficiently met. Petitioner’s claim of grave abuse of discretion is anchored on the simple
fact that public respondent adopted largely the proposals of private respondent. It should be understood that bargaining is
not equivalent to an adversarial litigation where rights and obligations are delineated and remedies applied.

 It is simply a process of finding a reasonable solution to a conflict and harmonizing opposite positions into a fair and
reasonable compromise. When parties agree to submit unresolved issues to the secretary of labor for his resolution, they
should not expect their positions to be adopted in toto. It is understood that they defer to his wisdom and objectivity in
insuring industrial peace.

 And unless they can clearly demonstrate bias, arbitrariness, capriciousness or personal hostility on the part of such public
officer, the Court will not interfere or substitute the said officer’s judgment with its own. In this case, it is possible that this
Court, or some its members at least, may even agree with the wisdom of petitioner’s claims. But unless grave abuse of
discretion is cogently shown, this Court will refrain from using its extraordinary power of certiorari to strike down decisions
and orders of quasi-judicial officers specially tasked by law to settle administrative questions and disputes. This is particularly
true in the resolution of controversies in collective bargaining agreements where the question is rarely one of legal right or
wrong—nay, of black and white—but one of wisdom, cogency and compromise as to what is possible, fair and reasonable
under the circumstances.

JUST IN CASE: The issues

Wage Increase

We find no compelling reasons to alter or modify our award after having sufficiently passed upon the
same arguments raised by both parties in our previous Order. The subsequent agreement on a package
of wage increases at Shell Company, adverted to by the Union as the usual yardstick for purposes of
developing its own package of improved wage increases, would not be sufficient basis to grant the same
increases to the Union members herein considering that other factors, among which is employment size,
were carefully taken into account. 

Union Security Clause (No Decision)

Section 1. Employees of the COMPANY who at the signing of this Agreement are members of the UNION
and those who subsequently become members thereof shall maintain their membership with the UNION
 for the duration of this Agreement as a condition of employment.
Section 2. Members of the UNION who cease to be members of the UNION in good standing by reason of
resignation or expulsion shall not be retained in the employment of the COMPANY.
xxxxxxx

are sought to be amended by the Union, to read as follows:

Section 1. Employees of the Company who at the signing of this Agreement are members of the Union
and those who subsequently become members thereof shall maintain their membership in GOOD
STANDING with the Union for the duration of this Agreement as a condition of CONTINUOUS
employment.

Section 2. PURSUANT TO THE FOREGOING, ANY UNION MEMBER WHO CEASES TO BE SUCH MEMBER ON
GROUNDS PROVIDED IN ITS CONSTITUTION AND BY-LAWS SHALL , UPON PRIOR WRITTEN NOTICE BY THE
UNION TO THE COMPANY, BUT SUBJECT TO THE OBSERVANCE OF DUE PROCESS AND THE EXPRESS
RATIFICATION OF THE MAJORITY OF THE UNION MEMBERSHIP, BE DISMISSED FROM EMPLOYMENT BY
THE COMPANY; PROVIDED, HOWEVER, THAT THE UNION SHALL HOLD THE COMPANY FREE AND
BLAMELESS FROM ANY LIABILITY IN THE EVENT THAT THE EMPLOYEE IN ANY MANNER QUESTIONS HIS
DISMISSAL.

Retirement Benefits/ Application of new retirement plan

We hold that public respondent did not commit grave abuse of discretion in respecting the free and
voluntary decision of the employees in regard to the Provident Plan and the irrevocable one-time option
provided for in the New Retirement Plan. Although the union has every right to represent its members in
the negotiation regarding the terms and conditions of their employment, it cannot negate their wishes
on matters which are purely personal and individual to them. In this case, the forty employees freely
opted to be covered by the Old Plan; their decision should be respected. The company gave them every
opportunity to choose, and they voluntarily exercised their choice. The union cannot pretend to know
better; it cannot impose its will on them.

Signing Bonus

Although proposed by petitioner, the signing bonus was not accepted by private respondent. Besides, a
signing bonus is not a benefit which may be demanded under the law. Rather, it is now claimed by
petitioner under the principle of “maintenance of existing benefits” of the old CBA. However, as clearly
explained by private respondent, a signing bonus may not be demanded as a matter of right. If it is not
agreed upon by the parties or unilaterally offered as an additional incentive by private respondent, the
condition for awarding it must be duly satisfied. In the present case, the condition sine qua non for its
grant—a nonstrike—was not complied with
Grievance and Arbitration Machineries

No particular setup for a grievance machinery is mandated by law. Rather, Article 260 of the Labor Code,
as incorporated by RA 6715, provides for only a single grievance machinery in the company to settle
problems arising from “interpretation or implementation of their collective bargaining agreement and
those arising from the interpretation or enforcement of company personnel policies.”

105. Tabigue et al vs. International Copra Export Corporation AUTHOR: SOLIS

(INTERCO) NOTES:
[G.R. No. 183335. December 23, 2009.]
TOPIC: Bargaining Procedure—Conciliation/preventive
mediation
PONENTE: Carpio Morales, J.
CASE LAW/ DOCTRINE:
Emergency Recit: Tabigue et al (20 employees) filed a Notice of Preventive Mediation against NCMB against INTERCO for violation
of CBA. They opted for voluntary arbitration. INTERCO opposed and alleged that Tabigue et al are not the authorized to represent
the union, hence, they will not be recognized and they moved to dismiss Tabigue et al’s complaint. The parties failed to settle the
dispute. NCMB Director concluded that the demand of Tabigue et al to submit the issues to voluntary arbitration CANNOT BE
GRANTED. He thus advised petitioners to avail of the compulsory arbitration process to enforce their rights. Petitioner’s MR
stated that NCMB has no rule-making power to decide on issues as it only facilitates settlement among the parties to labor
disputes. However, this was DENIED. Whether Tabigue et al are duly authorized to represent their union. The Court held in the
negative and that only disputes involving the union and the company shall be referred to the grievance machinery or voluntary
arbitrators
FACTS:
 Tabigue et al, 20 employees of INTERCO, filed a Notice of Preventive Mediation with the National Conciliation and Mediation
Board (NCMB) in Davao City against INTERCO for violation of CBA and failure to sit on the grievance conference/meeting.

 Parties did not settle their dispute in NCMB, thus, they elevated the matter for voluntary arbitration.

 Before the parties could finally meet, respondent presented before the NCMB a letter  of Genaro Tan, president of the
INTERCO Employees/Laborers Union of which petitioners are members, addressed to respondents plant manager Engr.
Paterno C. Tangente, stating that petitioners are not duly authorized by the board or the officers to represent the
union, hence, all actions, representations or agreements made by these people with the management will not be honored or
recognized by the union. INTERCO thus moved to dismiss petitioners’ complaint for lack of jurisdiction.

 Tabigue et al sent union president Tan and manager Tangete a Notice to Arbitrate. This notice was opposed by INTERCO.

 The parties failed to arrive at a settlement, NCMB citing that there was lack of willingness of both parties to submit to
voluntary arbitration, which willingness is a pre-requisite to submit the case thereto; and that under the CBA forged by the
parties, the union is an indispensable party to a voluntary arbitration but that since Tan informed respondent that the union
had not authorized Tabigue et al to represent it, it would be absurd to bring the case to voluntary arbitration.

 NCMB Director concluded that the demand of Tabigue et al to submit the issues to voluntary arbitration CANNOT BE
GRANTED. He thus advised petitioners to avail of the compulsory arbitration process to enforce their rights.

 Petitioner’s MR stated that NCMB has no rule-making power to decide on issues as it only facilitates settlement among the
parties to labor disputes. However, this was DENIED.

 Petitioners thus assailed the NCMB Director’s decision via Petition for Review before the Court of Appeals which dismissed it
by Resolution of October 24, 2007 in this wise:

Considering that NCMB is not a quasi-judicial agency exercising quasi-judicial functions but merely a conciliatory body for
the purpose of facilitating settlement of disputes between parties, its decisions or that of its authorized officer cannot be
appealed either through a petition for review under Rule 43 or under Rule 65 of the Revised Rules of Court.

 Hence, Petition for Review on Certiorari raising the argument that the NCMB is exercising adjudicative powers, acts as a
quasi-judicial agency and therefore decisions made by the NCMB are appealable by petition for review to the CA.
ISSUE(S):
(1) WON NCMB is a quasi-judicial agency.
(2) WON Tabigue et al are duly authorized to represent their union.

HELD: (1) NO; (2) NO.

RATIO:

FIRST ISSUE
Under Section 9 (3) of the Judiciary Reorganization Act of 1980, the Court of Appeals exercises exclusive appellate
jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and  quasi-judicial agencies,
instrumentalities, boards or commissions.
 
Rule 43 of the Rules of Court under which petitioners filed their petition before the Court of Appeals  applies to awards,
judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions.
 
A[n agency] is said to be exercising judicial function where [it] has the power to determine what the
 law is and what the legal rights of the parties are, and then undertakes to determine these questions and
adjudicate upon the rights of the parties. Quasi-judicial function is a term which applies to the action,
discretion, etc. of public administrative officers or bodies, who are required to investigate facts or ascertain the
existence of facts, hold hearings, and draw conclusions from them as a basis for their official action and to
exercise discretion of a judicial nature.
 
Given NCMBs following functions, as enumerated in Section 22 of Executive Order No. 126 (the Reorganization Act of the Ministry
of Labor and Employment), viz:
 
(a) Formulate policies, programs, standards, procedures, manuals of operation and guidelines pertaining to
effective mediation and conciliation of labor disputes;
 
(b) Perform preventive mediation and conciliation functions;
 
(c) Coordinate and maintain linkages with other sectors or institutions, and other government authorities
concerned with matters relative to the prevention and settlement of labor disputes;
 
(d) Formulate policies, plans, programs, standards, procedures, manuals of operation and guidelines pertaining
to the promotion of cooperative and non-adversarial schemes, grievance handling, voluntary arbitration
and other voluntary modes of dispute settlement;
 
(e) Administer the voluntary arbitration program; maintain/update a list of voluntary arbitrations; compile
arbitration awards and decisions;
 
(f) Provide counseling and preventive mediation assistance particularly in the administration of collective
agreements;
 
(g) Monitor and exercise technical supervision over the Board programs being implemented in the regional
offices; and
 
(h) Perform such other functions as may be provided by law or assigned by the Minister,
 
it can not be considered a quasi-judicial agency.
  
 SECOND ISSUE
Petitioners have not, however, been duly authorized to represent the union. Apropos is this Courts pronouncement
in Atlas Farms, Inc. v. National Labor Relations Commission, viz:
 
x x x Pursuant to Article 260 of the Labor Code, the parties to a CBA shall name or designate their
respective representatives 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 parties to a
CBA. Consequently only disputes involving the union and the company shall be referred to the grievance
machinery or voluntary arbitrators
 
 
Clutching at straws, petitioners invoke the first paragraph of Article 255 of the Labor Code which states:
 
Art. 255. The labor organization designated or selected by the majority of the employees in an
appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the
purpose of collective bargaining. However, an individual employee or group of employees shall have the right at
any time to present grievances to their employer.
x x x x (emphasis and underscoring supplied)
 
To petitioners, the immediately quoted provision is meant to be an exception to the exclusiveness of the representative role of the
labor organization/union.
 
This Court is not persuaded. The right of any employee or group of employees to, at any time, present grievances to the
employer does not imply the right to submit the same to voluntary arbitration.

106. National Union of Workers in the Hotel Restaurant and AUTHOR: The Taliño
Allied Industries (NUWHRAIN-APL-IUF) Dusit Hotel Nikko NOTES:
Chapter vs Court of Appeals (Former Eighth Division), NLRC,
Philippine Hoteliers Inc., Owner and Operator of Dusit Hotel NUWHRAIN – National Union of Workers in the Hotel
Nikko and/or Chiyuki Fujimoto, And Esperanza V. Alvez Restaurant and Allied Industries
DHN – Dusit Hotel Nikko
[G.R. No. 163942; November 11, 2008] PHI – Philippine Hoteliers, Inc.
NCMB – National Conciliation and Mediation Board
NUWHRAIN-Dusit Hotel Nikko Chapter vs Secretary of Labor
and Employment, and Philippine Hoteliers, Inc. Kulit ng NUWHRAIN. MR ng MR tengene.

[G.R. No. 166295; November 11, 2008] THIRD of the ratio on the issue of illegal strike is the relevant
one to our topic.
TOPIC: Collective Bargaining: General Concept, Procedure, and
Issues – Bargaining Procedure; Conciliation/Preventive It’s an easy case.  Look’s hard lang because it seems long due
Mediation to NUWHRAIN repeatedly filing for an MR and filing noticed of
PONENTE: Velasco, Jr., J. strikes.
CASE LAW/ DOCTRINE: The union officers and members' concerted action to shave their heads and crop their hair not only
violated the Hotel's Grooming Standards but also violated the NUWHRAIN’s duty and responsibility to bargain in good faith. By
shaving their heads and cropping their hair, the union officers and members violated then Sec. 6, Rule XIII of the Implementing
Rules of Book V of the Labor Code. This rule prohibits the commission of any act, which will disrupt or impede the early settlement
of the labor disputes that are under conciliation. Since the bargaining deadlock is being conciliated by the NCMB, the
NUWHRAIN’s action to have their officers and members' heads shaved was manifestly calculated to antagonize and embarrass
the Hotel management and in doing so effectively disrupted the operations of DHN and violated their duty to bargain collectively
in good faith.
EMERGENCY RECIT: NUWHRAIN and DHN had a bargaining deadlock. As a result, NUWHRAIN filed a notice of strike with the
NCMB. The conciliation hearings were unsuccessful and so NUWHRAIN conducted a strike on the hotel’s basement, where some
of its members sported closely cropped hair or cleanly shaven heads in violation of the hotel’s grooming standards. Because of
this, DHN prevented those workers from entering the premises, which eventually led to DHN experiencing a severe lack of
manpower. DHN then preventively suspended some workers due to conducting an illegal strike and violating the grooming
standards. NUWHRAIN then filed a 2nd notice of strike with the NCMB. DHN terminated and suspended various union officers and
members. NUWHRAIN pushed through with the strike and started picketing the premises of DHN. A 3rd notice of strike was
subsequently filed with the NCMB. The SOLE certified the case to the NLRC, which ruled in favour of DHN. The CA also ruled for
DHN. The SC ruled for DHN as well because (refer to case law/doctrine).
FACTS:
 NUWHRAIN is the certified bargaining agent of the regular rank-and-file employees of DHN, a 5-star service establishment
owned and operated by PHI. Chiyuki Fuijimoto and Esperanza V. Alvez are the Hotel's GM and Director of HR, respectively.
 NUHWRAIN submitted its CBA negotiation proposals to DHN. As negotiations ensued, the parties failed to arrive at mutually
acceptable terms and conditions. Due to the bargaining deadlock, NUWHRAIN filed a Notice of Strike with the NCMB.
 Thereafter, conciliation hearings were conducted which proved unsuccessful. Consequently, a Strike Vote was conducted by
NUWHRAIN on which it was decided that it would wage a strike.
 Soon thereafter, NUWHRAIN held a general assembly at its office located in the hotel’s basement, where some members
sported closely cropped hair or cleanly shaven heads. The next day, more male Union members came to work sporting the
same hairstyle. DHN prevented these workers from entering the premises claiming that they violated the Hotel's Grooming
Standards.
 Because of this, NUWHRAIN staged a picket outside the premises. Later, other workers were also prevented from entering
the hotel causing them to join the picket. For this reason, DHN experienced a severe lack of manpower, which forced them to
temporarily cease operations in 3 restaurants.
 Subsequently, DHN issued notices to the union members, preventively suspending them and charging them with the
 following offenses:
o Violation of the duty to bargain in good faith;
o Illegal picket;
o Unfair labor practice;
o Violation of the Hotel's Grooming Standards;
o Illegal strike; and
o Commission of illegal acts during the illegal strike.
 The next day, NUWHRAIN filed with the NCMB a second Notice of Strike on the ground of unfair labor practice and violation
of Art. 248(a) of the Labor Code on illegal lockout. In the meantime, the union officers and members submitted their
explanations to the charges alleged by DHN, while they continued to stage a picket just inside the hotel's compound.
 DHN terminated the services of 29 Union officers and 61 members; and suspended 81 employees for 30 days, 48 employees
for 15 days, 4 employees for 10 days, and 3 employees for 5 days. On the same day, NUWHRAIN declared a strike. Starting
that day, NUWHRAIN engaged in picketing the premises of DHN. During the picket, the union officials and members
unlawfully blocked the ingress and egress of the premises.
 Consequently, NUWHRAIN filed its third Notice of Strike with the NCMB on the ground of unfair labor practice and union-
busting.
 SOLE Patricia Sto. Tomas assumed jurisdiction over the labor dispute and certified the case to the NLRC for compulsory
arbitration, which was The SOLE’s Order gave DHN the option, in lieu of actual reinstatement, to merely reinstate the
dismissed or suspended workers in the payroll in light of the special circumstances attendant to their reinstatement.
 Pursuant to this order DHN issued an Inter-Office Memo, directing some of the employees to return to work, while advising
others not to do so, as they were placed under payroll reinstatement.
 NUWHRAIN moved for reconsideration, but the was denied by the SOLE. NUWHRAIN then filed a Petition for Certiorari with
the CA.
 Meanwhile, the NLRC:
o Ordered DHN and NUWHRAIN to execute a CBA within 30 days from the receipt of its decision.
o Held that NUWHRAIN conducted an illegal strike and that the strike violated the "No Strike, No Lockout" provision of
the CBA, which thereby caused the dismissal of 29 union officers and 61 union members.
o Ordered DHN to grant the 61 dismissed union members financial assistance in the amount of ½ month's pay for
every year of service or their retirement benefits under their retirement plan whichever was higher.
o Explained that the strike, which occurred, was illegal because it failed to comply with the mandatory 30-day cooling-
off period and the 7-day strike ban, as the strike occurred only 29 days after the submission of the notice of strike
and only 4 days after the submission of the strike vote.
o Ruled that even if NUWHRAIN had complied with the temporal requirements mandated by law, the strike would
nonetheless be declared illegal because it was attended by illegal acts committed by the union officers and
members.
 NUWHRAIN filed an MR of the NLRC's decision, which was denied. NUWHRAIN then filed a Petition for Certiorari with the
CA.
 CA: Dismissed NUWHRAIN’s petition and affirmed the rulings of the NLRC. The CA ruled that NUWHRAIN failed to show that
the NLRC committed grave abuse of discretion and capriciously exercised its judgment or exercised its power in an arbitrary
and despotic manner. It also dismissed NUWHRAIN’s subsequent MR for lack of merit. ALSO, the CA dismissed the earlier
petition for certiorari of NUWHRAIN in relation to the denial of the SOLE of its MR. Subsequent MR was also dismissed.
ISSUE(S): WON NUWHRAIN conducted an illegal strike.

HELD: Yarp.
RATIO:
 FIRST: NUWHRAIN’s violation of the Hotel's Grooming Standards was clearly a deliberate and concerted action to undermine
the authority of and to embarrass DHN and was, therefore, not a protected action. The appearances of the hotel employees
directly reflect the character and well-being of DHN, being a 5-star hotel that provides service to top-notch clients. Being bald
or having cropped hair per se does not evoke negative or unpleasant feelings. The reality that a substantial number of
employees assigned to the food and beverage outlets of DHN with full heads of hair suddenly decided to come to work bald-
headed or with cropped hair, however, suggests that something is amiss and insinuates a sense that something out of the
ordinary is afoot. Obviously, DHN does not need to advertise its labor problems with its clients. It can be gleaned from the
records before us that the union officers and members deliberately and in apparent concert shaved their heads or cropped
their hair. This was shown by the fact that after coming to work, some union members even had their heads shaved or their
hair cropped at the union office in the hotel's basement. Clearly, the decision to violate the company rule on grooming was
designed and calculated to place the Hotel management on its heels and to force it to agree to the NUWHRAIN’s proposals.

 In view of the NUWHRAIN’s collaborative effort to violate the Hotel's Grooming Standards, it succeeded in forcing DHN to
 choose between allowing its inappropriately hair styled employees to continue working, to the detriment of its reputation, or
to refuse them work, even if it had to cease operations in affected departments or service units, which in either way would
disrupt the operations of DHN. This Court is of the opinion, therefore, that the act of NUWHRAIN was not merely an
expression of their grievance or displeasure but, indeed, a calibrated and calculated act designed to inflict serious damage to
DHN’s finances or its reputation. Thus, we hold that NUWHRAIN’s concerted violation of the Hotel's Grooming Standards
which resulted in the temporary cessation and disruption of the Hotel's operations is an unprotected act and should be
considered as an illegal strike.

 SECOND: the NUWHRAIN’s concerted action which disrupted DHN’s operations clearly violated the CBA's "No Strike, No
Lockout" provision, which reads:

ARTICLE XXII - NO STRIKE/WORK STOPPAGE AND LOCKOUT

SECTION 1. No Strikes - The Union agrees that there shall be no strikes, walkouts, stoppage or slow-down of
work, boycott, refusal to handle accounts, picketing, sit-down strikes, sympathy strikes or any other form of
interference and/or interruptions with any of the normal operations of the HOTEL during the life of this
Agreement.

 The facts are clear that the strike arose out of a bargaining deadlock in the CBA negotiations with the Hotel. The concerted
action is an economic strike upon which the afore-quoted "no strike/work stoppage and lockout" prohibition is squarely
applicable and legally binding.

 THIRD: the union officers and members' concerted action to shave their heads and crop their hair not only violated the
Hotel's Grooming Standards but also violated the NUWHRAIN’s duty and responsibility to bargain in good faith. By shaving
their heads and cropping their hair, the union officers and members violated then Sec. 6, Rule XIII of the Implementing Rules
of Book V of the Labor Code.  This rule prohibits the commission of any act, which will disrupt or impede the early settlement
of the labor disputes that are under conciliation. Since the bargaining deadlock is being conciliated by the NCMB, the
NUWHRAIN’s action to have their officers and members' heads shaved was manifestly calculated to antagonize and
embarrass the Hotel management and in doing so effectively disrupted the operations of DHN and violated their duty to
bargain collectively in good faith.

 FOURTH: NUWHRAIN failed to observe the mandatory 30-day cooling-off period and the 7-day strike ban before it conducted
the strike. The NLRC correctly held that NUWHRAIN failed to observe the mandatory periods before conducting or holding a
strike. Records reveal that NUWHRAIN filed its Notice of Strike on the ground of bargaining deadlock on December 20, 2001.
The 30-day cooling-off period should have been until January 19, 2002. On top of that, the strike vote was held on January 14,
2002 and was submitted to the NCMB only on January 18, 2002; therefore, the 7-day strike ban should have prevented them
from holding a strike until January 25, 2002. The concerted action committed by NUWHRAIN on January 18, 2002 which
resulted in the disruption of DHN’s operations clearly violated the above-stated mandatory periods.

 LAST: NUWHRAIN committed illegal acts in the conduct of its strike. The NLRC ruled that the strike was illegal since, as shown
by the pictures presented by DHN, the union officers and members formed human barricades and obstructed the driveway
of DHN. There is no merit in NUWHRAIN’s argument that it was not its members but DHN’s security guards and the police
officers who blocked the driveway, as it can be seen that the guards and/or police officers were just trying to secure the
entrance to the Hotel. The pictures clearly demonstrate the tense and highly explosive situation brought about by the
strikers' presence in DHN’s driveway.

107 P.I. MANUFACTURING, INC. vs. P.I. MANUFACTURING AUTHOR: TAN

SUPERVISORS AND FOREMEN ASSOCIATION Notes: We took this up in Labor 1.
G.R. NO. 167217. FEBRUARY 4, 2008
TOPIC: DUTY TO BARGAIN
PONENTE:SANDOVAL-GUTIERREZ.
CASE LAW/ DOCTRINE:
The duty to bargain requires that the parties deal with each other with open and fair minds. A sincere endeavor to overcome
obstacles and difficulties that may arise, so that employer-employee relations may be stabilized and industrial strife eliminated,
must be apparent.
EMERGENCY RECIT: RA 6640 provides for an increase in statutory minimum wage and salary raes of EEs and workers in the
private sector. After RA 6640 took effect, the parties entered into a CBA whereby the supervisors were granted an increase of
P625.00 per month and the foremen, P475.00 per month. The increases were made retroactive to May 12, 1987, or prior to the
passage of R.A. No. 6640, and every year thereafter until July 26, 1989. Respondents filed a complaint, charging petitioner for
violation of RA 6640. The Labor Arbiter ruled in favor of respondents and ordered petitioner to give the members of respondent
wage increases equivalent to 13.5% of their basic pay. NLRC affirmed. CA affirmed, but raised the wage increase to 18.5%. SC
originally ruled against petitioners but reversed upon MR, ruling that although a wage distortion ensued due to RA 6640, it was
cured by the 1987 CBA and that to order petitioners to pay 13.5%/18.5% across-the-board increase is highly unfair and
oppressive, given that RA 6640 only mandates increases in favor of those earning P100 and below and most of its employees
receive more than P100.
FACTS:
 Petitioner P.I. Manufacturing, Incorporated is a domestic corporation engaged in the manufacture and sale of household
appliances. On the other hand, respondent P.I. Manufacturing Supervisors and Foremen Association (PIMASUFA) is an
organization of petitioners supervisors and foremen, joined in this case by its federation, the National Labor Union (NLU).
 On December 10, 1987, the President signed into law Republic Act (R.A.) No. 6640 providing, among others, an increase in
the statutory minimum wage and salary rates of employees and workers in the private sector. Section 2 provides:
SEC. 2. The statutory minimum wage rates of workers and employees in the private sector, whether
agricultural or non-agricultural, shall be increased by ten pesos (P10.00) per day, except non-agricultural
workers and employees outside Metro Manila who shall receive an increase of eleven pesos (P11.00) per day:
Provided, That those already receiving above the minimum wage up to one hundred pesos (P100.00) shall
receive an increase of ten pesos (P10.00) per day. Excepted from the provisions of this Act are domestic
helpers and persons employed in the personal service of another.
 Petitioner and respondent PIMASUFA entered into a new Collective Bargaining Agreement (1987 CBA) whereby the
supervisors were granted an increase of P625.00 per month and the foremen, P475.00 per month. The increases were made
retroactive to May 12, 1987, or prior to the passage of R.A. No. 6640, and every year thereafter until July 26, 1989.
 Respondents PIMASUFA and NLU filed a complaint with the Arbitration Branch of the National Labor Relations Commission
(NLRC), charging petitioner with violation of R.A. No. 6640. Respondents attached to their complaint a numerical illustration
of wage distortion resulting from the implementation of R.A. No. 6640.
 The Labor Arbiter rendered his Decision in favor of respondents. Petitioner was ordered to give the members of respondent
PIMASUFA wage increases equivalent to 13.5% of their basic pay they were receiving prior to December 14, 1987. NLRC
affirmed the Labor Arbiters judgment.
 Petitioner filed a petition for certiorari with the SC, which referred the petition to the Court of Appeals pursuant to its ruling
in St. Martin Funeral Homes v. NLRC. The CA affirmed Decision of the NLRC with modification by raising the 13.5% wage
increase to 18.5%. MR was denied.
 Hence, the present petition for certiorari.
 Petitioner contends that the findings of the NLRC and the Court of Appeals as to the existence of a wage distortion are not
supported by evidence; that Section 2 of R.A. No. 6640 does not provide for an increase in the wages of employees receiving
more than P100.00; and that the 1987 CBA has obliterated any possible wage distortion because the increase granted to the
members of respondent PIMASUFA in the amount of P625.00 and P475.00 per month substantially widened the gap between
the foremen and supervisors and as against the rank and file employees.
 Respondents PIMASUFA and NLU, despite notice, failed to file their respective comments.
 In a Minute Resolution dated April 18, 2005, [SC] denied the petition for petitioners’ failure to show that the Court of Appeals
committed a reversible error.
 Hence, this motion for reconsideration.
ISSUE(S):
1. Whether a wage distortion occurred due to the implementation of R.A. No. 6640.
2. Whether said wage distortion was cured or remedied by the 1987 CBA.

HELD: YES. YES. MR granted.

RATIO:
 The Court of Appeals correctly ruled that a wage distortion occurred due to the implementation of R.A. No. 6640.
 However, the same were cured or remedied when respondent PIMASUFA entered into the 1987 CBA with petitioner after the
effectivity of R.A. No. 6640. The 1987 CBA increased the monthly salaries of the supervisors by P625.00 and the foremen, by
P475.00,effective May 12, 1987. These increases re-established and broadened the gap, not only between the supervisors
and the foremen, but also between them and the rank-and-file employees. Significantly, the 1987 CBA wage increases almost
doubled that of the P10.00 increase under R.A. No. 6640. The P625.00/month means P24.03increase per day for the
supervisors, while the P475.00/month means P18.26 increase per day for the foremen. These increases were to be observed
every year, starting May 12, 1987 until July 26, 1989. Clearly, the gap between the wage rates of the supervisors and those of
the foremen was inevitably re-established. It continued to broaden through the years.
 Interestingly, such gap as re-established by virtue of the CBA is more than a substantial compliance with R.A. No. 6640. We
hold that the Court of Appeals erred in not taking into account the provisions of the CBA viz-a-viz the wage increase under
the said law. That this re-establishment of a significant differential was the result of collective bargaining negotiations, rather
 than of a special grievance procedure, is not a legal basis for ignoring it.
 Requiring petitioner to pay all the members of respondent PIMASUFA a wage increase of 18.5%, over and above the
negotiated wage increases provided under the 1987 CBA, is highly unfair and oppressive to the former. Obviously, it was not
the intention of R.A. No. 6640 to grant an across-the-board increase in pay to all the employees of petitioner. Section 2
of R.A. No. 6640 mandates only the following increases in the private sector: (1) P10.00 per day for the employees in the
private sector, whether agricultural or non-agricultural, who are receiving the statutory minimum wage rates; (2) P11.00 per
day for non-agricultural workers and employees outside Metro Manila; and (3) P10.00 per day for those already receiving the
minimum wage up to P100.00. To be sure, only those receiving wages P100.00 and below are entitled to the P10.00 wage
increase. The apparent intention of the law is only to
upgrade the salaries or wages of the employees specified therein. Almost all of the members of respondent PIMASUFA have
been receiving wage rates above P100.00 and, therefore, not entitled to the P10.00 increase. Only three (3) of them are
receiving wage rates below P100.00, thus, entitled to such increase. Now, to direct petitioner to grant an across-the-board
increase to all of them, regardless of the amount of wages they are already receiving, would be harsh and unfair to the
former. 
 At this juncture, it must be stressed that a CBA constitutes the law between the parties when freely and voluntarily entered
into. Here, it has not been shown that respondent PIMASUFA was coerced or forced by petitioner to sign the 1987 CBA. All of
its thirteen (13) officers signed the CBA with the assistance of respondent NLU. They signed it fully aware of the passage of
R.A. No. 6640. The duty to bargain requires that the parties deal with each other with open and fair minds. A sincere
endeavor to overcome obstacles and difficulties that may arise, so that employer-employee relations may be stabilized and
industrial strife eliminated, must be apparent. Respondents cannot invoke the beneficial provisions of the 1987 CBA but
disregard the concessions it voluntary extended to petitioner. The goal of collective bargaining is the making of agreements
that will stabilize business conditions and fix fair standards of working conditions. Definitely, respondents posture
contravenes this goal.

108 Colegio de San Juan de Letran v. Association of AUTHOR: TIGLAO

Employees and Faculties of Letran NOTES: Supra.
[G.R. No. 141471 | 18 September 2000]
TOPIC: Duty to Bargain
PONENTE: J. Kapunan
CASE LAW/ DOCTRINE: Art. 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.
EMERGENCY RECIT: Letran employed delaying tactics to avoid renegotiating with the respondent union, such as not submitting a
counter proposal to the union. It was clearly guilty of unfair labor practice. Letran cannot take defense also to the fact that there
was another union that filed for a petition for certification election. Again, it does not ipso facto suspend negotiation proceedings
unless it shows a legitimate representation issue. None exists in this case.
FACTS:
 During the renegotiation of the union’s CBA with petitioner Letran, respondent Ambas became the newly elected president of
the union.
 Ambas wanted to continue the renegotiation of the CBA. However, Letran, through Fr. Lao, claimed that the CBA was already
prepared for signing. The Union, naturally, rejected the CBA.
 Thereafter, petitioner Letran accused the union’s officers of bargaining bad faith before the LA, to which the Labor Arbiter
ruled in the former’s favor. Reversed on appeal with the NLRC.
 This resulted to the parties disregarding the unsigned CBA and agreed to restart negotiating on a new five year CBA. During
the pendency for approval of the proposals, Ambas was informed that her work schedule was being changed. Ambas
protested and requested management to submit the issue to a grievance machinery under the old CBA.
 Petitioner Letran failed to act on the CBA. Hence, the union filed a notice to strike. After meeting with the NMCB to discuss
the ground rules for renegotiation, Ambas was dismissed for insubordination. Petitioner Letran then unilaterally ceased
negotiations when it received news that another labor organization had filed a petition for certification election.
 The union went on a strike, to which the SOLE ordered them to return to work and for Letran to accept them back. SOLE later
rendered judgment that petitioner committed unfair labor practice. CA affirmed. Hence, this appeal.
ISSUE(S): W/N Letran was guilty of unfair labor practice for having refused to bargain with the union

HELD: Yes. Petition denied.

RATIO:
 Petitioner Letran’s failure to act on the submitted CBA proposal within the ten-day period under the Labor Code is a clear
violation of the procedure of collective bargaining.
 The Court ruled in Kiok Loy v. NLRC that the company’s refusal to make a counter proposal to the union’s proposed CBA is an
indication of bad faith.
 The next events are obvious signs that the petitioner had merely been employing delaying tactics to the passage of the
proposed CBA.
 Further, in order to allow the employer to validly suspend the bargaining process, there must be a valid petition for
certification election raising a legitimate representation issue.
 Hence, the mere filing of a petition for certification election does not ipso facto justify the suspension of negotiation by the
employer.

109 Faculty Association of Mapua vs. CA AUTHOR: Valera

G.R. No. 164060. June 15, 2007 NOTES: Halos relevant lahat kaya medj mahaba.:( sorry.
TOPIC: Duty To Bargain.
PONENTE: Quisumbing.
CASE LAW/ DOCTRINE:
 -Article 253 provides that until a new CBA is 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 on which economic provisions of the existing agreement are to
retain its force and effect. Therefore, it must be understood as encompassing all the terms and conditions in the said
agreement
 -The CBA during its lifetime binds all the parties. The provisions of the CBA 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 and ask redress.
 -The CBA is the norm of conduct between petitioner and private respondent and compliance therewith is mandated by the
express policy of the law
Emergency Recit: Mapua hired Andersen to develop a faculty ranking and compensation system, In their new CBA negotioations,
Mapua presented the new ranking system which the Faculty Assoc(FA) approved of but with the reservation that there should be
no diminution in rank and pay for the faculty. The new CBA agreed upon by the parties incorporated the new ranking system.
Mapua, after a while called the FA’s attention to some flaws, and requested its amendment. The FA argued that the amendment
sought will be cause a diminution in rank and benefits of the faculy. Also, due to a change its curriculum, Mapua changed the
salary formula for HS faculty, which the FA argues to be in violation with its CBA provisions. The SC held that both acts are invalid
and stated that until a new CBA is executed, the CBA agreed by them shall be in force and they are dutybound to effect in in full
force and effect the terms and conditions of the existing agreement.
FACTS:
 In July 200, Mapua hired Andersen to develop a faculty ranking and compensation system.
 In the 5th CBA negotiation meeting, Mapuua presented the new faculty ranking system to the Faculty Assoc(FA) which they
agreed to the adoption and implementation of the new system but with the reservation that there should be no diminution
n rank and pay for the faculty.
 The FA and Mapua then entered into a new CBA where it incorporated the new ranking for the college faculty which states
that a new faculty ranking shall be implemented, however there shall be no diminution n the exisiting rank and salary.
 The faculty ranking sheet was annexed to the CBA as Annex B, while the college faculty rates sheet for the faculty and which
included the point rages and corresponding pay rates per faculty level was Annex C.
 When the CBA became effect the VP for Academics issued a memorandum to all deans and subjects chairs to evaluate and
re-rank their faculty under their supervision using the new ranking instrument, which takes in to account the following
factors:
1.) Educational attainment
2.) Professional honors
3.) Relevant training
4.) Relevant professional experience
5.) Scholarly work
6.) Award winning works
7.) Officership in relevant technical and professional orgs
8.) And Administrative positions held at Mapua.
 After a month, Mapua called FA’s attention to some flaws in the CBA which then it requested for an amended on the
following annexes Annex B-( The Faculty Ranking Sheet) Annex C-( College Faculty Rates for Permanent Faculty Only) and
Annex D- (HS Faculty Rates for Permanent Faculty Only)
 - Mapua Clams that with Annex C & D, which contained date under the heading “Total Points were not germane to the 2
other columns in both annexes.
- With regard to the Faculty Ranking Point Range Sheet of the new faculty ranking instrument. Mapua avers that it was
inadvertently not attached to the CBA.
 The FA rejected the proposal and states that such changes would constitute a violation rank and benefits of the ratified 2001
CBA and will result in the diminution of rank and benefits of the faculty.
- Argues that the proposed amendment in the ranking system for the college faculty revised the point ranges earlier
agreed upon by the parties and expands the 19 faculty ranks to 23.
 Mapua instituted some changes in its curriculum, which resulted in changes in the number of hours for certain subjects.
Mapua then adopted a new formula for determining the pay rates of HS faculty : Rate/Load x Total Teaching Load = Salary.
- FA opposed this, contending that unknown to them, Mapua has not been implementing the relevant provisions of the
2001 In particular, Sec 2 of its General Wage Clause, which provides a rate per load as its salary formula for HS faculty.
 The FA met with Mapua to settle the issues but was of no avail. Mapua maintains that it was within its right to change the
pay formula used.
 The FA then bought the matter to the NCMB for mediation. Wherein the Panel of Voluntary Arbitrators ruled in favor of the
FA, ordering Mapua to:
1.) Implement the agreed upon point range system with 19 faculty ranks, along with the corresponding pay levels for
the college faculty, consistent with Annex C of the CBA.
2.) Comply with the General wage Clause of its existing CBA using the rate per load for HS Faculty.
 On appeal, the CA reversed the ruling where it found that Mapua’s proposal to include the faculty point range sheet n Annex
B and to replace Annex C with the document on the 23 level faculty ranking instrument and replace the column containing
he heading which is attached in Annexes C & D of the 2001 CBA with the correct data as valid acts.
ISSUE(S):
1.) WON Mapua’s new proposal regarding faculty ranking and evaluation, lawful and consistent with the ratified CBA?
2.) WON Mapua’s development of a new pay formula for the HS faculty without the knowledge of the FA lawful and
consistent with the ratified CBA?
HELD:
1.) No
2.) No.
RATIO:
1st Issue:
 The FA avers that Mapua’s proposal on faculty ranking and evaluation is an unlawful modification of the existing CBA
without approval of the Contracting parties.
 On the Other hand Mapua argues that it was done in good faith and in the exercise of its inherent prerogative to freely
regulate according to its own discretion and judgement all aspects of employment.
- The SC fins that the new point range system proposed by Mapua is an unauthorized modification of Annex C of the CBA
- It is made up of a faculty classification that is substantially different form the one originally incorporated in the current
CBA thus, the proposed system contravenes the existing provisions of the CBA, hence, violative of the law between the
parties.
- The voluntary arbiters observed that the evaluation system differs from past evaluation practices( gives more weight to
tenure and faculty load) such that the system can lead to a demotion in rank for faculty members.
 Example: “Take the case of a faculty member with 17 years of teaching experience who has a Phd. Degree. For
school year 2000-2001 his corresponding rank is Professor 3 with 4001-4500 points using the previous CBA. If the
college faculty member is ranked based on the ratified 2001 CBA, his/her corresponding rank would increase to
Professor 5 with 5001-5500 points. But if the proposal of private respondent is used, the professor, would be
ranked as Associate Professor 5 with 5001- 5749 points, instead of Professor 5 as recognized by the 2001 CBA. True,
there may be an increase in points but there is also a resulting diminution in rank from Professor 3 based on the
previous CBA to Associate Professor 5. This would translate to a reduction of the salary increase he is entitled to
under the 2001 CBA.”
- Article 253 provides that until a new CBA is 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 on which economic provisions of the existing agreement
are to retain its force and effect. Therefore, it must be understood as encompassing all the terms and conditions in the
said agreement
- The CBA during its lifetime binds all the parties. The provisions of the CBA 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 and ask
redress.
- The CBA is the norm of conduct between petitioner and private respondent and compliance therewith is mandated by
 the express policy of the law.
2nd Issue:
 FA avers that Mapua unilaterally modified the CBA salary formula for HS Faculty.
 Mapua contents that it is entitled to consider the actual number of teaching hours to arrive at a fair and just salary of its HS
faculty.
- The SC agrees with FA’s argument. And ruled that Mapua cannot adopt its unilateral interpretation of terms in the CBA.
- It is clear from the provisions of the 2001 CBA that the salary of a high school faculty member is based on a rate per load
and not on a rate per hour basis
- The SC views that there is no room for unilateral change of the formula by Mapua.
- The Labor code is specific in stating that in case of doubt in the interpretation of any law/provision affecting labor such
should be interpreted in favor of labor.

110 MACTAN WORKERS UNION and TOMAS FERRER, as AUTHOR: ACIDO

President thereof v. DON RAMON ABOITIZ, President, Cebu NOTES:
Shipyard & Engineering Works, Inc.; EDDIE LIM, as Treasurer;
JESUS DIAGO, Superintendent of the aforesaid corporation;
WILFREDO VIRAY, as Resident Manager of the Shipyard &
Engineering Works, Inc.; and the CEBU SHIPYARD &
ENGINEERING WORKS, INC.; ASSOCIATED LABOR UNION,
intervenor-appellant
[G.R. No. L-30241, June 30, 1972]
TOPIC: The CBA - Beneficiaries
PONENTE: Fernando, J. 
CASE LAW/ DOCTRINE: It is a well-settled doctrine that the benefits of a collective bargaining agreement extend to the laborers
and employees in the collective bargaining unit, including those who do not belong to the chosen bargaining labor organization.
Emergency Recit: CSEWI and ALU entered into a CBA with provisions for a profit-sharing bonus and a 60-day claiming period for
said bonus; otherwise, ALU must return the money to CSEWI. 72 members of the MWU failed to receive the 2 nd installment for
the bonus, so ALU returned their shares and warned CSEWI not to give the same to the MWU members unless ordered by the
Court. MWU did bring the matter to court and won; ALU intervened and appealed. SC affirmed the lower courts. See doctrine.
FACTS:
 Defendant Cebu Shipyard & Engineering Works, Inc. in Lapulapu City is employing laborers and employees belonging to 2
rival labor unions. 72 of these employees or laborers whose names appear in the complaint are affiliated with the Mactan
Workers Union while the rest are members of the intervenor Associated Labor Union.
 On November 28, 1964, the defendant Cebu Shipyard & Engineering Works, Inc. and the Associated Labor Union entered
into a 'Collective Bargaining Agreement' ... the pertinent part of which, Article XIII thereof, [reads thus]: '... The [Company]
agrees to give a profit-sharing bonus to its employees and laborers to be taken from ten per cent (10%) of its net profits or
net income derived from the direct operation of its shipyard and shop in Lapulapu City and after deducting the income tax
and the bonus annually given to its General Manager and the Superintendent and the members of the Board of Directors
and Secretary of the Corporation, to be payable in two (2) installments, the first installment being payable in March and the
second installment in June, each year out of the profits in agreement… If a laborer or employee of the [Company] does not
want to accept the profit-sharing bonus which the said employee or laborer is entitled under this Agreement, it shall be the
duty of the [Associated Labor Union] to return the money received by [it] as profit-sharing bonus to the [Company] within a
period of sixty (60) days from the receipt by the [Union] from the [Company] of the said profit-sharing bonus.’
 In compliance with the said CBA, in March 1965 CSEWI delivered to the ALU for distribution to the laborers or employees
working with the defendant corporation to the profit-sharing bonus corresponding to the first installment for the year 1965.
Again in June 1965 the defendant corporation delivered to the ALU the profit-sharing bonus corresponding to the second
installment for 1965. The members of the MWU failed to receive their shares in the second installment of bonus because
they did not like to go to the office of the ALU to collect their shares.
 In accordance with the terms of the collective bargaining, after 60 days, the uncollected shares of the plaintiff union
members were returned by the ALU to CSEWI. At the same time the defendant corporation was advised by the ALU not to
deliver the said amount to the members of the MWU unless ordered by the Court, otherwise the ALU will take such step to
protect the interest of its members. Because this warning given by the intervenor union the defendant corporation did not
pay to the plaintiffs the sum of P4,035.82 which was returned by the ALU, but instead, deposited the said amount with the
Labor Administrator.
 On behalf of 72 of its members working in defendant corporation, Cebu Shipyard and Engineering Works, Inc., MWU filed a
complaint for a money claim in the amount of P4,035.82 representing the second installment of the profit-sharing
agreement under the CBA.
 City Court of Lapulapu and CFI of Cebu: MWU won. CSEWI must give ALU the money, then ALU must pay the profit-sharing
bonus to the 72 MWU members.
 (Somewhere sa lower courts) ALU intervened and interposed an appeal.
ISSUE: Whether or not the benefits of a collective bargaining agreement extend to the laborers and employees in the collective
bargaining unit, including those who do not belong to the chosen bargaining labor organization.

HELD: Yes. Decision affirmed.

RATIO:
 The terms and conditions of a collective bargaining contract 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.
 Nor does it suffice as a defense that the claim is made on behalf of non-members of intervenor Associated Labor Union, for
it is a well-settled doctrine that the benefits of a collective bargaining agreement extend to the laborers and employees in
the collective bargaining unit, including those who do not belong to the chosen bargaining labor organization. Any other
view would be a discrimination on which the law frowns.
 United Restauror's Employees and Labor Union v. Torres:  "the right to be the exclusive representative of all the employees in
an appropriate collective bargaining unit is vested in the labor union 'designated or selected' for such purpose 'by the
majority of the employees' in the unit concerned." If it were otherwise, the highly salutory purpose and objective of the
collective bargaining scheme to enable labor to secure better terms in employment condition as well as rates of pay would be
frustrated insofar as non-members are concerned, deprived as they are of participation in whatever advantages could
thereby be gained. The labor union that gets the majority vote as the exclusive bargaining representative does not act for
its members alone. It represents all the employees in such a bargaining unit. It is not to be indulged in any attempt on its
part to disregard the rights of non-members. Yet that is what intervenor labor union was guilty of, resulting in the complaint
filed on behalf of the laborers, who were in the ranks of plaintiff Mactan Labor Union.
 [JUST IN CASE]
o MWU has cause of action (right and redress; see first bullet of ratio)
o MCTC has jurisdiction under the Judiciary Act. It is true that if an element of unfair labor practice may be discerned
in a suit for the enforcement of a collective bargaining contract, then the matter is solely cognizable by the Court of
Industrial Relations. It is equally true that as of the date the lower court decision was rendered, the question of such
enforcement had been held to be for the regular courts to pass upon.
o It is not to be forgotten that what is entitled to constitutional protection is labor, or more specifically the working
men and women, not labor organizations. The latter are merely the instrumentalities through which their welfare
may be promoted and fostered. That is the raison d'etre of labor unions. The utmost care should be taken then, lest
in displaying an unyielding, intransigent attitude on behalf of their members, injustice be committed against
opposing labor organizations. 

111 Samahan ng Manggagawa sa Top Form Manufacturing v. AUTHOR: ADRE

NLRC NOTES: Supra  mainly focused sa ratio about minutes.
[95 SCRA 171 (1998)]
TOPIC: Minutes of Negotiation
PONENTE: ROMERO, J.
CASE LAW/ DOCTRINE: The Minutes reflects the proceedings and discussions undertaken in the process of bargaining for worker
benefits in the same way that the minutes of court proceedings show what transpired therein; If an employer promised
something in the negotiations, such promise could only be demandable in law if incorporated in the CBA.
Emergency Recit: SMTFM and Top Form had a collective bargaining negotiation. In the minutes it discussed Sec. 3 of CBA, SMTFM
proposed that any future wage increase given by the government should be implemented by the company across-the-board or
non-conditional. Top Form requested the union to retain this provision since their sincerity was already proven when the P25.00
wage increase was granted across-the-board. SMTFM decided to defer this provision. This deferred provision was however not
included in the 1990 CBA agreement. 2 Wage Orders were implemented but Top Form did not implement it but Top Form
implemented the increase in a certain staggered scheme to avoid wage distortions. SMTFM filed ULP against Top Form for
“bargaining in bad faith”. LA AND NLRC ruled that no ULP. On appeal with SC, it affirmed the decision. The Minutes reflects the
proceedings and discussions undertaken in the process of bargaining for worker benefits in the same way that the minutes of
court proceedings show what transpired. At the negotiations, it is but natural for both management and labor to adopt positions
or make demands and offer proposals and counter-proposals. However, nothing is considered final until the parties have reached
an agreement. In fact, one of managements usual negotiation strategies is to x x x agree tentatively as you go along with the
understanding that nothing is binding until the entire agreement is reached. If indeed private respondent promised to continue
with the practice of granting across-the-board salary increases ordered by the government, such promise could only be
demandable in law if incorporated in the CBA.
FACTS:
 Petitioner Samahang Manggagawa sa Top Form Manufacturing United Workers of the Philippines (SMTFM) was the certified
collective bargaining representative of all regular rank and file employees of private respondent Top Form Manufacturing
Philippines, Inc.
 February 27, 1990: Collective bargaining negotiation was held.
 The MINUTES of the meeting:
a. Art VII Section 3 of the CBA: SMTFM proposed that any future wage increase given by the government should be
implemented by the company across-the-board or non-conditional.
- Management requested the union to retain this provision since their sincerity was already proven when the P25.00
wage increase was granted across-the-board. The union acknowledges management's sincerity but they are worried that
in case there is a new set of management, they can just show their CBA. The union decided to defer this provision.
o This deferred provision was however not included in the 1990 CBA agreement
 October 15, 1990: RTWPB-NCR issued Wage Order No. 01 granting an increase of P17.00 per day in the salary of workers.
This was followed by Wage Order No. 02 dated December 20, 1990 providing for a P12.00 daily increase in salary.
 SMTFM requested the implementation of this increase across the board. Top Form implemented the increase in a certain
staggered scheme to avoid wage distortions.
o [just in case] Granted the P17.00 increase under Wage Order No. 01 to workers/employees receiving salary
of P125.00 per day and below. The P12.00 increase mandated by Wage Order No. 02 was granted to those
receiving the salary of P140.00 per day and below. For employees receiving salary higher than P125.00 or
P140.00 per day, private respondent granted an escalated increase ranging from P6.99 to P14.30 and from
P6.00 to P10.00,
 SMTFM, through counsel, wrote to Top Form demanding that it should fulfill its pledge that the union agreed on the
deferment of the above provision due to the company’s “promise and assurance” of an across the board salary increase.
[napag usapan daw ito nung nag negotiate nung Feb. 27, mahirap talaga yang mga promise na yan. Haha]
o Quoting the full text: “To fulfill its pledge of sincerity to the union by granting an across-the-board wage
increases (sic) to all employees under the wage orders.” The union reiterated that it had agreed to “retain
the old provision of CBA” on the strength of private respondent’s “promise and assurance” of an across-
the-board salary increase should the government mandate salary increases
 Top Form still did not comply, maintaining its position that their implementation scheme was done to avoid wage
distortions.
 They held conferences to discuss but to no avail.
 SMTFM: filed a complaint with the NCR NLRC alleging that private respondent’s act of “reneging on its undertaking/promise
clearly constitutes act of unfair labor practice through bargaining in bad faith.” It charged private respondent with acts of
unfair labor practices or violation of Article 247 of the Labor Code, as amended, specifically “bargaining in bad faith,” and
prayed that it be awarded actual, moral and exemplary damages. In its position paper, the union added that it was charging
private respondent with “violation of Article 100 of the Labor Code.”
 Top Form’s Answer: In implementing Wage Orders Nos. 01 and 02, it had avoided “the existence of a wage distortion” that
would arise from such implementation. It emphasized that only “after a reasonable length of time from the
implementation” of the wage orders “that the union surprisingly raised the question that the company should have
implemented said wage orders on an across-the-board basis.”
o It asserted that there was no agreement to the effect that future wage increases mandated by the
government should be implemented on an across-the-board basis. Otherwise, that agreement would
have been incorporated and expressly stipulated in the CBA.
 LA: Dismissed the complaint. (1)There was no unfair labor practice since it was the union itself which decided for its
deferment. (2)The wage orders themselves do not allow for across the board wage increases. What the company did in
order to deter wage distortion is certainly commendable. (3) There was no violation of LC Art. 100 since no benefits were
withdrawn, the alleged past across the board increase is an isolated act which did not make it a company practice.
 NLRC: Affirmed LA. Dismissed. MR denied din.
 Hence, the instant petition for certiorari
ISSUE(S): Whether or not private respondent committed an unfair labor practice in its refusal to grant across-the-board wage
increases in implementing Wage Orders Nos. 01 and 02 (base from the minutes of the meeting were it was “promised”)

HELD: NO. WHEREFORE, the instant petition for certiorari is hereby DISMISSED and the questioned Resolutions of the NLRC
AFFIRMED.
RATIO:
 Petitioner union anchors its arguments on the alleged commitment of private respondent to grant an automatic across-the-
board wage increase in the event that a statutory or legislated wage increase is promulgated. It cites as basis, the portion of
 the Minutes of the collective bargaining negotiation on February 27, 1990 regarding wages, arguing additionally that said
Minutes forms part of the entire agreement between the parties.
 The basic premise of this argument is definitely untenable. To start with, if there was indeed a promise or undertaking on
the part of private respondent to obligate itself to grant an automatic across-the-board wage increase, petitioner union
should have requested or demanded that such promise or undertaking be incorporated in the CBA. After all, petitioner
union has the means under the law to compel private respondent to incorporate this specific economic proposal in the CBA.
It could have invoked Article 252 of the Labor Code defining duty to bargain, thus, the duty includes executing a contract
incorporating such agreements if requested by either party. Petitioner unions assertion that it had insisted on the
incorporation of the same proposal may have a factual basis considering the allegations in the aforementioned joint affidavit
of its members. However, Article 252 also states that the duty to bargain does not compel any party to agree to a proposal or
make any concession. Thus, petitioner union may not validly claim that the proposal embodied in the Minutes of the
negotiation forms part of the CBA that it finally entered into with private respondent.
 The CBA is the law between the contracting parties the collective bargaining representative and the employer-company.
Compliance with a CBA is mandated by the expressed policy to give protection to labor. In the same vein, CBA provisions
should be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic
construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to
serve." This is founded on the dictum that a CBA is not an ordinary contract but one impressed with public interest
 It goes without saying, however, that only provisions embodied in the CBA should be so interpreted and complied with.
Where a proposal raised by a contracting party does not find print in the CBA, it is not a part thereof and the proponent has
no claim whatsoever to its implementation.
 Hence, petitioner unions contention that the Minutes of the collective bargaining negotiation meeting forms part of the
entire agreement is pointless. The Minutes reflects the proceedings and discussions undertaken in the process of bargaining
for worker benefits in the same way that the minutes of court proceedings show what transpired. At the negotiations, it is
but natural for both management and labor to adopt positions or make demands and offer proposals and counter-
proposals. However, nothing is considered final until the parties have reached an agreement. In fact, one of managements
usual negotiation strategies is to x x x agree tentatively as you go along with the understanding that nothing is binding
until the entire agreement is reached. If indeed private respondent promised to continue with the practice of granting
across-the-board salary increases ordered by the government, such promise could only be demandable in law if
incorporated in the CBA.
 Moreover, by making such promise, private respondent may not be considered in bad faith or at the very least, resorting to
the scheme of feigning to undertake the negotiation proceedings through empty promises. As earlier stated, petitioner union
had, under the law, the right and the opportunity to insist on the foreseeable fulfillment of the private respondents promise
by demanding its incorporation in the CBA. Because the proposal was never embodied in the CBA, the promise has remained
just that, a promise, the implementation of which cannot be validly demanded under the law.
 JUST IN CASE:
Union’s reliance on Kiok Loy v. NLRC is misplaced.
a. KIOK LOY: The company completely refused to negotiate, ignoring all notices for negotiations.
b. CASE NOW: There was in fact a negotiation and that the provision was deferred by the union relying on the
“undertaking” of the company that it will grant it. However, the mere fact that the proposal was not included in the final
CBA indicates that no contractual commitment thereon was ever made by the company. All provision in the CBA are
supposed to have been jointly and voluntarily incorporated therein by both parties.

112. Norkis Free and Independent Workers Union v. Norkis AUTHOR: Castro
Trading Co. Notes:
[G.R. No. 157098, June 30, 2005]
TOPIC: Interpretation, Administration, and Enforcement
PONENTE: Panganiban, J.
CASE LAW/ DOCTRINE: The CBA is no ordinary contract, but one impressed with public interest. Therefore, it is subject to special
orders on wages, such as those issued by the RTWPB.
Emergency Recit: The Union is demanding an across-the-board increase in the wages pursuant to the Wage Order issued by
RTWPB and a provision in their CBA. However, at the time of the effectivity of the order, the employees are already receiving
above the minimum wage hence the refusal of the company to grant the increase. The Union argues the company should grant
the increase because as mutually agreed upon, the CBA imposed upon the company the obligation to implement the increases
mandated by law without any condition or qualification. SC cannot sustain the Union, even if the Court assumes that its
contention is right and that the implementation of any government-decreed increase under the CBA is absolute, because the CBA
is no ordinary contract, but one impressed with public interest. Therefore, it is subject to special orders on wages, such as those
issued by the RTWPB.
FACTS:
 Norkis Free and Independent Workers Union (Union) and Norkis Trading Co. (Company) entered into a CBA effective from
August 1, 1994 to July 31, 1999, which provided: Sec. 2. Minimum Wage Law Amendment. In the event that a law is
enacted increasing minimum wage, an across-the-board increase shall be granted by the company according to the
provisions of the law.
 In January 1998, a re-negotiation of the CBA was terminated and the parties forged a Memorandum of Agreement, which
provided a salary increase to all regular and permanent employees as follows: Ten (10) pesos per day increase effective
August 1, 1997; Ten (10) pesos per day increase effective August 1, 1998.
 As a result of the MOA, the agreed P10.00 re-negotiated salary increase effectively raised the daily wage of the employees to
P165.00 retroactive August 1, 1997; and another increase of P10.00, effective August 1, 1998, raised the employees’ daily
wage to P175.00.
 In March 1998, Regional Tripartite Wages and Productivity Board (RTWPB) of Region VII issued Wage Order No. ROVII-06,
which established the daily minimum wage to P165.00, by increasing the minimum daily wage by P10.00 [5-peso increase
beginning April 1, 1998 and another 5-peso increase effective October 1, 1998].
 In accordance with the Wage Order and Sec. 2, Art. XII of the CBA, the Union demanded an across-the-board increase.
 The company refused to implement the Wage order, insisting that it has been paying its employees the new minimum wage
of P165.00 long before the issuance of such [at the time of the effectivity of Wage Order, employees were already receiving
P175.00 per day].
 The union filed a preventive mediation complaint before the NCMB for the Voluntary Arbitrator to rule on whether the
company has complied with the wage order in relation to the CBA provision.

Voluntary Arbitrator: Company did not comply with the wage order. The CBA provision in question (providing for an across-the-
board increase in case of a wage order) is worded and couched in a vague and unclear manner. The evidence submitted by the
parties, all point to the fact that their true intention on how to implement existing wage orders is to grant such wage orders in an
across-the-board manner in relation to the provisions of Section 2, Article XII of their existing CBA.

Court of Appeals: The grant of an across-the-board increase, provided under Section 2 of Article XII of the CBA, was qualified by
the phrase according to the provisions of the law. Taking into consideration the opinion of the RTWPB Region VII, the company
had sufficiently complied with Wage Order No. ROVII-06. The Board had opined that since adjustments granted are only to raise
the minimum wage or the floor wage as a matter of policy, wages granted over the above amount set by this Board is deemed
compliance. The Order effectively made the previous voluntary increases given by respondent to its employees creditable against
the law-mandated increase. Consequently, there was no need for the Collective Bargaining Agreement (CBA) to provide expressly
for such creditability. Finally, the CA sustained respondents explanation that the across-the-board increases provided in the CBA
was required only when a minimum wage law caused a distortion in the wage structure.
ISSUE(S)/HELD:
 Whether the CA erred in admitting RTWPB’s letter-opinion – NO.
 Whether the company violated the CBA in its refusal to grant its employees an across-the-board increase as a result of the
passage of the Wage Order – NO.
RATIO:
Further supporting this construction of Wage Order No. ROVII-06 is the opinion of its drafter, the RTWPB Region VII. In its letter-
opinion answering respondent’s queries, the Board gave a similar interpretation of the essence of the Wage Order: to fix a new
floor wage or to upgrade the wages of the employees receiving lower than the minimum wage set by the Order.

Notably, the RTWPB was interpreting only its own issuance, not a statutory provision. The best authority to construe a rule or an
issuance is its very source, in this case the RTWPB. Without a doubt, the Board, like any other executive agency, has the authority
to interpret its own rules and issuances; any phrase contained in its interpretation becomes a part of those rules or issuances
themselves. Therefore, it was proper for the CA to consider the letter dated June 13, 2000, written by the RTWPB to explain the
scope and import of the latter’s own Order, as such interpretation is deemed a part of the Order itself. That the letter was
belatedly submitted to that Court is not fatal in the determination of this particular case.

We cannot sustain petitioner, even if we assume that its contention is right and that the implementation of any government-
decreed increase under the CBA is absolute. The CBA is no ordinary contract, but one impressed with public interest. Therefore,
it is subject to special orders on wages, such as those issued by the RTWPB. Capitol Wireless v. Bate is squarely in point. The
union in that case claimed that all government-mandated increases in salaries should be granted to all employees across-the-
board without any qualification whatsoever, pursuant to the CBA provision that any government-mandated wage increases
should be over and above the benefits granted in the CBA. The Court denied such claim and held that the provisions of the
Agreement should be read in harmony with the Wage Orders. Applying that ruling to the present case, we hold that the
implementation of a wage increase for respondent’s employees should be controlled by the stipulations of Wage Order No.
ROVII-06.
The employees are not entitled to the claimed salary increase, simply because they are not within the coverage of the Wage
Order, as they were already receiving salaries greater than the minimum wage fixed by the Order. Concededly, there is an
increase necessarily resulting from raising the minimum wage level, but not across-the-board. Indeed, a double burden cannot be
imposed upon an employer except by clear provision of law. It would be unjust, therefore, to interpret Wage Order No. ROVII-06
to mean that respondent should grant an across-the-board increase. Such interpretation of the Order is not sustained by its text.

Petitioner disregards altogether in its argument the qualifying phrase “according to the provisions of the law” and merely focuses
its attention on the across-the-board increase clause. Given the entire sentence, it is clear that the above-quoted CBA provision
does not support the unyielding view of petitioner that the issuance of Wage Order No. ROVII-06 entitles its members to an
across-the-board increase, absolutely and without any condition.

The CA correctly observed that the import of Wage Order No. ROVII-06 should be considered in the implementation of the
government-decreed increase. The present Petition makes no denial or refutation of this finding, but merely an averment of the
silence of the CBA on the creditability of increases provided under the Agreement against those in the minimum wage under a
wage order. It insists that the parties intended no such creditability; otherwise, they would have expressly stated such intent in
the CBA.
 
We hold that the issue here is not about creditability, but the applicability of Wage Order No. ROVII-06 to respondent’s
employees. The Wage Order was intended to fix a new minimum wage only, not to grant across-the-board wage increases to all
employees in Region VII. The intent of the Order is indicated in its title, Establishing New Minimum Wage Rates, as well as in its
preamble: the purpose, reason or justification for its enactment was to adjust the minimum wage of workers to cushion the
impact brought about by the latest economic crisis not only in the Philippines but also in the Asian region.

113 University of San Agustin v. USA Employees Union AUTHOR: Concepcion/Pineda

GR 177594 Notes:
TOPIC: interpretation/administration/enforcement of CBA
PONENTE: Carpio-Morales, J.
CASE LAW/ DOCTRINE:
 CBA is the law between the parties and they are obliged to comply with its provisions.
 If the terms of the contract (CBA) are clear and unambiguous, the literal meaning must prevail.
Emergency Recit
FACTS:
 ER and Union entered into a CBA which provided for salary increases based on the incremental tuition fee increases of tuition
incremental proceeds (TIP), pursuant to RA 6728
 CBA Article VIII, Sec. 3: S.Y. 2001-2002: “P1500 per month or 80% of the TIP whichever is higher across the board”
 The parties disagreed on the interpretation of the said provision above.
o ER: Salary increases refer not only to increase in salary, but can include increase in other benefits – in order to comply
with RA 6728.
o ER: RA 6728 mandates only a 70% TIP allocation, hence CBA provision VOID, as it is not compliant with the 70% figure
ISSUE(S): W/N the ER’s interpretation of the CBA provision is valid

HELD: NO. The literal meaning of the CBA provision should prevail, given that it is unambiguous. Hence, the EEs are entitled to a
salary increase, sharing in a 80% allotment of TIP.
RATIO:
 CBA is the law between the parties and they are obliged to comply with its provisions.
 If the terms of the contract (CBA) are clear and unambiguous, the literal meaning must prevail.
 A plain reading of the CBA would show that it does not speak of any other benefits that would be covered by the TIP. Had the
parties intended that, they ought to have expressly included such in the CBA. Also, the parties agreed to 80% allocation. Had
ER intended otherwise, it could have negotiated a lower allocation.
 RA 6728 only prescribes a minimum that ERs must comply with – 70%. The ER is not proscribed from granting higher
allocation, as in this case.

114 Pantranco North Express, Inc. v. NLRC AUTHOR: De Leon

G.R. No. 95940. July 24, 1996 NOTES:
TOPIC: The Collective Bargaining Agreement (Nature)
PONENTE: PANGANIBAN, J.
CASE LAW/ DOCTRINE: A CBA is not an ordinary contract. "(A)s a labor contract within the contemplation of Article 1700 of the
Civil Code of the Philippines which governs the relations between labor and capital, (it) is not merely contractual in nature but
impressed with public interest, thus it must yield to the common good.
Emergency Recit: PR retired at the age of 52 due to compulsory retirement in the CBA. He alleged that it is illegal dismissal. The
Court held No, because private respondent is bound by the CBA because its terms and conditions constitute the law between the
parties.
FACTS:
 Private respondent was hired by petitioner in 1964 as a bus conductor. He eventually joined the Pantranco Employees
Association-PTGWO. He continued in petitioner's employ until August 12, 1989, when he was retired at the age of fifty-two
(52) after having rendered twenty five years' service. The basis of his retirement was the compulsory retirement provision of
the collective bargaining agreement between the petitioner and the aforenamed union. Private respondent received
P49,300.00 as retirement pay.
 On February 15, 1990, private respondent filed a complaint for illegal dismissal against petitioner with the Sub-Regional
Arbitration Branch of the respondent Commission in Dagupan City. The complaint was consolidated with two other cases of
illegal dismissal having similar facts and issues, filed by other employees, non-union members.
 LA ruled in his favor. NLRC affirmed, hence this petition.
ISSUE(S): W/N the CBA stipulation on compulsory retirement after twenty-five years of service is legal and enforceable.

HELD: Yes.
RATIO:
 Art. 287 of the Labor Code as worded permits employers and employees to fix the applicable retirement age at below 60
years. Moreover, providing for early retirement does not constitute diminution of benefits. In almost all countries today, early
retirement, i.e., before age 60, is considered a reward for services rendered since it enables an employee to reap the fruits of
his labor particularly retirement benefits, whether lump-sum or otherwise at an earlier age, when said employee, in
presumably better physical and mental condition, can enjoy them better and longer. As a matter of fact, one of the
advantages of early retirement is that the corresponding retirement benefits, usually consisting of a substantial cash windfall,
can early on be put to productive and profitable uses by way of income-generating investments, thereby affording a more
significant measure of financial security and independence for the retiree who, up till then, had to contend with life's
vicissitudes within the parameters of his fortnightly or weekly wages. Thus we are now seeing many CBAs with such early
retirement provisions. And the same cannot be considered a diminution of employment benefits.

 It is also further argued that, being a union member, private respondent is bound by the CBA because its terms and
conditions constitute the law between the parties. The parties are bound not only to the fulfillment of what has been
expressly stipulated but also to all the consequences which according to their nature, may be in keeping with good faith,
usage and law. It binds not only the union but also its members. Thus, the Solicitor General said:

"Private respondent cannot therefore claim illegal dismissal when he was compulsory retired after rendering twenty-five
(25) years of service since his retirement is in accordance with the CBA."

 A CBA incorporates the agreement reached after negotiations between employer and bargaining agent with respect to terms
and conditions of employment. A CBA is not an ordinary contract. "(A)s a labor contract within the contemplation of Article
1700 of the Civil Code of the Philippines which governs the relations between labor and capital, (it) 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."

 Being a product of negotiation, the CBA between the petitioner and the union intended the provision on compulsory
retirement to be beneficial to the employees-union members, including herein private respondent. When private respondent
ratified the CBA with the union, he not only agreed to the CBA but also agreed to conform to and abide by its provisions.
Thus, it cannot be said that he was illegally dismissed when the CBA provision on compulsory retirement was applied to his
case.

115 DOLE PHILS v PAWIS NG MAKABAYANG OBRERO AUTHOR: DELFIN

[G.R. No. 146650 | January 13, 2003] NOTES:
TOPIC: CBA: Interpretation, Administration and Enforcement --
Nature
PONENTE: CORONA
CASE LAW/ DOCTRINE: When the disputed provision of the CBA is clear and unambiguous and the terms are explicit then the
language of the CBA is not susceptible to any other interpretation.
Emergency Recit: The CBA of the parties was renewed. A section of which provided for free meals on overtime on a weekday. The
contested provision is FREE MEALS, as presently practiced, not exceeding TWENTY FIVE PESOS (P25.00) after THREE (3) hours of
actual overtime work. Some of DOLE depts granted free meals after exactly 3hrs while the others granted means only after more
than 3 hours (or the 4th hour). PAMAO and DOLE agreed to voluntary arbitration which ruled for PAMAO. DOLE appealed, CA
affirmed the VA ruling. The SC looked at the past CBAs and ruled that the contention of PAMAO was more logical. The phrase
means after exactly three hours of OT work.
FACTS:
 A new five-year Collective Bargaining Agreement (Feb 1996-2001) was executed by Dole Phils and Pawis ng Makabayang
Obrero- NFL (PAMAO). In the said CBA, the section on meal allowance under Section 3 of Article XVIII on Bonuses and
Allowance is disputed. It reads as:
 Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL ALLOWANCE of TEN PESOS (P10.00) to all
employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE MEALS, as
presently practiced, not exceeding TWENTY FIVE PESOS (P25.00) after THREE (3) hours of actual overtime work.
 However, some departments of DOLE reverted to the previous practice of granting free means after exactly three hours of
actual overtime work while others grant free meals only after more than three hours of overtime work. For this reason,
PAMAO filed a complaint before the National Conciliation and Mediation Board alleging the refusal of DOLE to comply with
the provisions of the 1996-2001 CBA.
 The parties agreed to submit the dispute to voluntary arbitration. The Voluntary Arbitrator decided in favor of PAMAO and
ordered DOLE to extend the meal benefit even to those who rendered exactly 3 hours of overtime work.
 DOLE sought reconsideration but was denied. DOLE went to the CA on certiorari which upheld the decision of the Voluntary
Arbiter. Hence, this instant petition.

Argument of DOLE: the phrase after three hours of actual overtime work should be interpreted to mean after more than three
hours of actual overtime work.

Argument of PAMAO: the phrase should mean after exactly three hours of actual overtime work.
ISSUE(S): What interpretation of the subject provision should prevail?

HELD: The court held that the interpretation of PAMAO is more logical.
RATIO:
 The court reviewed the provision on the meals of the past CBA.
The CBA (1985-1988) states:
o Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL ALLOWANCE of FOUR (P4.00) PESOS to all
employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE MEALS, as
presently practiced, after THREE (3) hours of actual overtime work.
The (1990-1995) CBA provides:
o Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL ALLOWANCE of EIGHT PESOS (P8.00) to all
employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE MEALS, as
presently practiced, not exceeding SIXTEEN PESOS (P16.00) after THREE (3) hours of actual overtime work.
This was later amended when the parties renegotiated the economic provisions of the CBA pursuant to Article 253-A of the
Labor Code. The supplement reads:
o Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL SUBSIDY of NINE PESOS (P9.00) to all
employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE MEALS, as
presently practiced, not exceeding TWENTY ONE PESOS (P21.00) after more than THREE (3) hours of actual
overtime work (Section 3, as amended).

 Based on these, the court noted that the phrase more than was neither in the 1985-1988 CBA nor in the original 1990-1995
CBA. It was inserted only in the 1993-1995 CBA Supplement. But said phrase is again absent in Section 3 of Article XVIII of the
1996-2001 CBA, which reverted to the phrase after three (3) hours.
 It further held that the omission of the phrase more than between after and three hours in the present CBA spells a big
difference. No amount of legal semantics can convince the Court that after more than means the same as after.
 The disputed provision of the CBA is clear and unambiguous. The terms are explicit and the language of the CBA is not
susceptible to any other interpretation. Hence, the literal meaning of free meals after three (3) hours of overtime work shall
prevail, which is simply that an employee shall be entitled to a free meal if he has rendered exactly, or no less than, three
hours of overtime work, not after more than or in excess of three hours overtime work.
Just in case: DOLE invoked MP- the court said that the CBA is not included in the MP as it is norm of conduct between employee
and employer and compliance is mandated by express policy of the law.

116 G.R. No. 169632             March 28, 2006 AUTHOR: Enriquez

NOTES:
UNIVERSITY OF SAN AGUSTIN EMPLOYEES’ UNION-
FFW (USAEU-FFW), and individual union
officers, Petitioners, 
vs.
THE COURT OF APPEALS and UNIVERSITY OF SAN
AGUSTIN, Respondents.

TOPIC: The Collective Bargaining Agreement: Interpretation,

Administration and Enforcement; Grievance Procedure

PONENTE: GARCIA
CASE LAW/ DOCTRINE: 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.
Emergency Recitation: Union is the bargaining unit of the University of San Agustin. In their CBA, there is a "no strike, no
lockout" clause and a grievance machinery procedure to resolve management-labor disputes, including a voluntary arbitration
mechanism should the grievance committee fail to satisfactorily settle such disputes. Because of failure to agree the Union filed a
Notice of Strike before the NCMB which was opposed by the University in a Motion to Strike Out Notice of Strike and to Refer the
Dispute to Voluntary Arbitration, invoking the "No strike, no lockout" clause of the parties’ CBA. In ruling that the dispute should
be under Voluntary Arbitration, the Supreme Court said that the parties agreed that practically all disputes – including bargaining
deadlocks – shall be referred to the grievance machinery which ends in voluntary arbitration. Moreover, no strike or no lockout
shall ensue while the matter is being resolved.
FACTS:
 Respondent University of San Agustin (University) is a non-stock, non-profit educational institution which offers both basic
and higher education courses. Petitioner USAEU-FFW (Union) is the duly recognized collective bargaining unit for teaching
and non-teaching rank-and-file personnel of the University while the other individual petitioners are its officers.
 The parties entered into a 5-year CBA which provided that the economic provisions shall have a period of three (3) years.
Complementary to said provisions is Section 3 of Article VIII of the CBA providing for salary increases for School Years
(SY) 2000-2003, such increase to take the form of either a lump sum or a percentage of the tuition incremental proceeds
(TIP).
 The CBA contained a "no strike, no lockout" clause and a grievance machinery procedure to resolve management-labor
disputes, including a voluntary arbitration mechanism should the grievance committee fail to satisfactorily settle such
disputes.
 Pursuant to the CBA, the parties commenced negotiations for the economic provisions for the remaining two years. During
the negotiations, the parties could not agree on the manner of computing the TIP, thus the need to undergo preventive
mediation proceedings before the National Conciliation and Mediation Board (NCMB), Iloilo City.
 The impasse respecting the computation of TIP was not resolved. This development prompted the Union to declare a
bargaining deadlock grounded on the parties’ failure to arrive at a mutually acceptable position on the manner of computing
the seventy percent (70%) of the net TIP to be allotted for salary and other benefits.
 Thereafter, the Union filed a Notice of Strike before the NCMB which was opposed by the University in a Motion to Strike
Out Notice of Strike and to Refer the Dispute to Voluntary Arbitration, invoking the "No strike, no lockout" clause of the
parties’ CBA. The NCMB, however, failed to resolve the University’s motion.
 The parties then made a joint request for the SOLE to assume jurisdiction over the dispute. Thus, an Assumption of
Jurisdiction Order5 (AJO) was issued by the SOLE.
 At around 6:45AM, the Union then staged a strike. During the strike, the sheriffs tried to serve the AJO. However, the
Union’s VP refused because only the Union President can receive such by virtue of a Union Board Resolution. Thus, the
sheriffs posted the AJO at the main entrance of its buildings and at the Union’s office inside the campus. At around 5:25
p.m., the Union president arrived at the respondent University’s premises and received the AJO from the sheriffs.
 The University filed a Petition to Declare Illegal Strike and Loss of Employment Status  at the NLRC) Sub-regional
Arbitration Branch No. VI in Iloilo City.
 The SOLE rendered a Decision resolving the various economic issues over which the parties had a deadlock in the collective
bargaining, including the issue of legality/illegality of the September 19, 2003 strike.
 o Directed to conclude a MOA embodying the foregoing dispositions to be appended to the current CBA.
o The petition to declare the strike illegal is hereby DISMISSED for want of legal and factual basis.
o Consequently, there is no basis whatsoever to declare loss of employment status on the part of any of the striking
union members.
 University’s MR denied. The University elevated the matter to the CA by way of a petition for certiorari. the CA rendered a
decision partially granting the University’s petition. While the CA affirmed the rest of the SOLE’s decision on the economic
issues, particularly the formula to be used in computing the share of the employees in the tuition fee increase, it, however,
reversed the SOLE’s ruling as to the legality of the September 19, 2003 strike.
 Both parties filed their respective motions for partial reconsideration of the aforestated decision, the University excepting
from the CA’s decision insofar as the latter affirmed the SOLE’s resolution of the economic issues. On the other hand, the
Union sought reconsideration of the CA’s finding of illegality of the September 19, 2003 strike.
 In the meantime, the University served notices of termination to the union officers who were declared by the CA as deemed
to have lost their employment status.
 On the same day, in response to the University’s action, the Union filed with the NCMB a second notice of strike, this time
on ground of alleged union busting.
 The parties again took initial steps to negotiate the new CBA but said attempts proved futile. Hence, the Union went on
strike. In reaction, the University notified the Union that it was pulling out of the negotiations because of the strike.
 The CA, acting on the parties’ respective motions for reconsideration, promulgated the herein challenged Partially Amended
Decision. Finding merit in the respondent University’s motion for partial reconsideration, the CA ruled that the SOLE
abused its discretion in resolving the economic issues on the ground that said issues were proper subject of the grievance
machinery as embodied in the parties’ CBA. Consequently, the CA directed the parties to refer the economic issues of the
CBA to voluntary arbitration. The CA, however, stood firm in its finding that the strike conducted by the petitioner Union
was illegal and its officers were deemed to have lost their employment status
ISSUES/HELD:
1. Whether or not the strike was illegal and the Union Officers deemed to have lost their employment status on their failure to
return to work immediately upon the service of AJO issued by the SOLE? YES.
2. (TOPIC RELATED) Whether or not the economic provisions of the CBA should be referred to Voluntary Arbitration? YES.
RATIO:
1. On the first issue, the SC ruled that ART. 263 of the Labor Code provides: "Such assumption or certification (of the SOLE)
shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or
certification order. If one has already taken place at the time of assumption or certification, all striking or locked out
employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers
under the same terms and conditions prevailing before the strike or lockout." In this case, the AJO was served at 8:45 a.m. of
September 19, 2003. The strikers then should have returned to work immediately. However, they persisted with their refusal
to receive the AJO and waited for their union president to receive the same at 5:25 p.m. The Union’s defiance of the AJO was
evident in the sheriff’s report. Thus, we see no reversible error in the CA’s finding that the strike of September 19, 2003 was
illegal. Consequently, the Union officers were deemed to have lost their employment status for having knowingly participated
in said illegal act.

2. We likewise find logic in the CA’s directive for the herein parties to proceed with voluntary arbitration as provided in their
CBA. As we see it, the issue as to the economic benefits, which included the issue on the formula in computing the TIP share
of the employees, is one that arises from the interpretation or implementation of the CBA. To be sure, the parties’ CBA
provides for a grievance machinery to resolve any "complaint or dissatisfaction arising from the interpretation or
implementation of the CBA and those arising from the interpretation or enforcement of company personnel policies."
Moreover, the same CBA provides that should the grievance machinery fail to resolve the grievance or dispute, the same shall
be "referred to a Voluntary Arbitrator for arbitration and final resolution." However, through no fault of the University these
processes were not exhausted. It must be recalled that while undergoing preventive mediation proceedings before the NCMB,
the Union declared a bargaining deadlock, filed a notice of strike and thereafter, went on strike. The University filed a Motion
to Strike Out Notice of Strike and to Refer the Dispute to Voluntary Arbitration but the motion was not acted upon by the
NCMB. As borne by the records, the University has been consistent in its position that the Union must exhaust the grievance
machinery provisions of the CBA which ends in voluntary arbitration.

The University’s stance is consistent with Articles 261 and 262 of the Labor Code, as amended which respectively provide:

ART. 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.

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.

The grievance machinery and no strike, no lockout provisions of the CBA forged by the University and the Union are
founded on Articles 261 and 262 quoted above. The parties agreed that practically all disputes – including bargaining
deadlocks – shall be referred to the grievance machinery which ends in voluntary arbitration. Moreover, no strike or no
lockout shall ensue while the matter is being resolved.

The University filed a Motion to Strike Out Notice of Strike and Refer the Dispute to Voluntary Arbitration precisely to call
the attention of the NCMB and the Union to the fact that the CBA provides for a grievance machinery and the parties’
obligation to exhaust and honor said mechanism. Accordingly, the NCMB should have directed the Union to honor its
agreement with the University to exhaust administrative grievance measures and bring the alleged deadlock to voluntary
arbitration. Unfortunately, the NCMB did not resolve the University’s motion thus paving the way for the strike on
September 19, 2003 and the deliberate circumvention of the CBA’s grievance machinery and voluntary arbitration
provisions.

As we see it, the failure or refusal of the NCMB and thereafter the SOLE to recognize, honor and enforce the grievance
machinery and voluntary arbitration provisions of the parties’ CBA unwittingly rendered said provisions, as well as, Articles
261 and 262 of the Labor Code, useless and inoperative. As here, a union can easily circumvent the grievance machinery
and a previous agreement to resolve differences or conflicts through voluntary arbitration through the simple expedient of
filing a notice of strike. On the other hand, management can avoid the grievance machinery and voluntary arbitration
provisions of its CBA by simply filing a notice of lockout.

117 Atlas Farms, Inc. v. NLRC AUTHOR: GARCIA

[G.R. No. 142244 November 18, 2002] NOTES:
TOPIC: Grievance Procedure
PONENTE:
CASE LAW/ DOCTRINE: Artilce 260 – parties to a CBA shall name or designate their respective representatives 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. Consequently, only disputes involving the union and the company shall be referred to the
grievance machinery or voluntary arbitrators.
EMERGENCY RECITATION: 2 employees were dismissed (Jaime and Marcial). They filed separate complaints for illegal dismissal
(consolidated). LA dismissed their complaints on the ground that the grievance machinery in the CBA had not yet been exhausted.
Jaime and Marcial availed of the grievance process, but later on refiled the case. LA dismissed the complaint for lack of merit,
finding that the case was one of illegal dismissal and did not involve the interpretation or implantation of any CBA provision. He
stated that Article 217 (c) of the Labor Code was inapplicable to the case. Although Jaime and Marcial failed to substantiate their
claims of illegal dismissal, there was proof that they voluntarily accepted their separation pay and financial assistance of Atlas.
Whether the LA and the NLRC had jurisdiction to decide complaints for illegal dismissal. SC said yes. Article 217 of the Labor Code
provides that labor arbiters have original and exclusive jurisdiction over termination disputes. A possible exception is provided in
Article 261. Records show, that Jaime and Marcial sought without success to avail of the grievance procedure in their CBA. It is
worth pointing out that Marcial and Jaime went to the NLRC only after the labor arbiter dismissed their original complaint for
illegal dismissal.
FACTS:
 Jaime O. dela Peña (Jaime) was employed as veterinary aide by Atlas Farms, Inc. (Atlas). He was among several employees
terminated in July 1989.
 July 8, 1989 – he was re-hired by Atlas and given the additional job of feedmill operator.
 March 13, 1993 – Jaime was allegedly caught urinating and defecating on company premises not intended for the purpose.
 The manager of Atlas issued a formal notice directing him to explain within 24 hours why disciplinary action should not be
taken against him for violating company rules and regulations. Jaime refuses to receive the formal notice. He never bothered
to explain.
 March 20, 1993 – a notice of termination with payment of his monetary benefits was sent to him. He duly acknowledged
receipt of his separation pay.
 Marcial I. Abion (Marcial) was a carpenter/mason and maintenance man of Atlas.
 Allegedly, he caused the clogging of the fishpond drainage resulting in damages worth several hundred thousand pesos
when he improperly disposed of the cut grass and other waste materials into the pond’s drainage system.
 Atlas sent written notice to him, requiring him to explain what happened, otherwise, disciplinary action would be taken
against him.
 He refused to receive the notice and give an explanation. Consequently, the company terminated his services. He
acknowledged receipt of a written notice of dismissal, with his separation pay.
 Jaime and Marcial filed separate complaints for illegal dismissal that were later consolidated.
 LA dismissed their complaints on the ground that the grievance machinery in the CBA had not yet been exhausted.
 Jaime and Marcial availed of the grievance process, but later on refiled the case.
 LA dismissed the complaint for lack of merit, finding that the case was one of illegal dismissal and did not involve the
interpretation or implantation of any CBA provision.
 He stated that Article 217 (c) of the Labor Code was inapplicable to the case. Although Jaime and Marcial failed to
substantiate their claims of illegal dismissal, there was proof that they voluntarily accepted their separation pay and financial
assistance of Atlas.
 NLRC reversed the LA’s decision.
ISSUE(S):
1. Whether Marcial and Jaime were legally and validly dismissed
2. Whether the LA and the NLRC had jurisdiction to decide complaints for illegal dismissal; and
3. Whether Atlas is liable for costs of the suit.
HELD:
1. No.
2. Yes.
3. Atlas
RATIO:
With regard to illegal dismissal
 NLRC found that Atlas failed to substantiate its claim that both Marcial and Jaime committed certain acts that violated
company rules and regulations, hence the SC find no factual basis to say that their dismissal was in order.
With regard to jurisdiction
 Article 217 of the Labor Code provides that labor arbiters have original and exclusive jurisdiction over termination disputes. A
possible exception is provided in Article 261.
 Records show, that Jaime and Marcial sought without success to avail of the grievance procedure in their CBA. It is worth
pointing out that Marcial and Jaime went to the NLRC only after the labor arbiter dismissed their original complaint for illegal
dismissal.
 Under these circumstances, Marcial and Jaime had to find another avenue for redress.
 It was Atlas who failed to show proof that it took steps to convene the grievance machinery after the labor arbiter first
dismissed the complaints for illegal dismissal and directed the parties to avail of the grievance procedure under Article VII of
the existing CBA.
 They could not now be faulted for attempting to find an impartial forum, after Atlas failed to listen to them and after the
intercession of the labor arbiter proved futile.
 NLRC had aptly concluded in part that Marcial and Jaime had already exhausted the remedies under the grievance procedure.
It erred only in finding that their cause of action was ripe for arbitration.
 Maneja v. NLRC – the dismissal case does not fall within the phrase “grievances arising from the interpretation or
implementation of the collective bargaining agreement and those arising from the interpretation or enforcement of company
personnel policies.” The LA had original exclusive jurisdiction over the termination case.
 Vivero v. CA – since what was challenged was the legality of the employee’s dismissal for lack of cause and lack of due
process, the case was primarily a termination dispute. The issue of whether there was proper interpretation and
implementation of the CBA provisions came into play only because the grievance procedure in the CBA was not observed,
after he sought his union’s assistance. Since the real issue then was whether there was a valid termination, there was no
reason to invoke the need to interpret nor question an implantation of any CBA provision.
 Artilce 260 – parties to a CBA shall name or designate their respective representatives 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. Consequently, only disputes involving the union and the company shall be referred to the grievance
machinery or voluntary arbitrators.
 In these termination cases of Jaime and Marcial, the union had no participation, it having failed to object to the dismissal of
the employees concerned by Atlas. It is obvious that arbitration without the union’s active participation on behalf of the
dismissed employees would be pointless, or even prejudicial to their cause.
With regard to liability for the cost of suit.
 Having found Jaime and Marcial’s dismissal to be illegal, and the labor arbiter and the NLRC duly vested with jurisdiction to
hear and decide their cases, we agree with the appellate court that Atkas should pay the costs of suit.

118 HOLY CROSS OF DAVAO COLLEGE, INC. vs. HOLY CROSS OF DAVAO FACULTY UNION - AUTHOR: HABLADO
KAMAPI NOTES: The actual words of
G.R. No. 156098       June 27, 2005 Article XIII, Section 1 in the CBA
TOPIC: Contract Ambiguity PONENTE: Sandoval-Gutierrez, J. were not quoted in the case
CASE LAW/ DOCTRINE: Labor laws and agreements should be construed in favor of the working man.
EMERGENCY RECIT: The contract ambiguity in the CBA is the term “higher studies” which qualifies whether or not Jean Legaspi, a
teacher who was selected for a scholarship grant in Japan, is entitled to a “grant-in aid” from the school. The SC said that the
construction of any ambiguity in the CBA, such as which course would be relevant to Legaspi’s job, and whether such course
comprises ‘higher studies’ should be made in favor of the employee, Legaspi, in consonance with the rule that labor laws and
agreements should be construed in favor of the working man.
FACTS:
 The CBA provided for a faculty development scholarship for academic teaching personnel.
 When the college received a letter of invitation for the 1999 Monbusho scholarship grant (In-Service Training for Teachers)
offered and sponsored by the Japanese Government, Jean Legaspi, a permanent English teacher submitted her application.
 The school however issued policy statement and guidelines on educational trips abroad for the school year 1998 to 1999.
 Jean Legaspi was then selected by the Japanese gov’t to be a recipient of the scholarship. She requested petitioner to allow
her to be on study leave with grant-in aid equivalent to her 18 months salary and allowance, pursuant to Section 1, Article
XIII of the CBA.
 However, petitioner denied her request, claiming that she is not entitled to grant-in aid under its "Policy Statement and
Guidelines for Trips Abroad for Professional Growth." Nevertheless, petitioner granted her 12 months study leave without
pay from October 1999 to September 2000.
 Before she left for Japan, she asked respondent union KAMPI to submit to the Grievance Committee petitioner’s refusal to
grant her claim for grant-in aid, but the same was not settled.
 The union filed with the National Conciliation and Mediation Board (NCMB), Regional Office No. XI, Davao City, a complaint
for payment of grant-in aid against petitioner, which was then submitted for voluntary arbitration.
 Voluntary Arbitrator Decision: to pay Jean A. Legaspi, her grant-in aid benefits under Article XIII, Section 1 of the CBA which
was not implemented
 The petitioner’s MR was denied; on appeal the CA affirmed the arbiter’s decision, because the CBA was clear
 Petitioner now argues: that Jean Legaspi failed to comply with the “substantive condition” in Article XIII, Section 1 of the CBA,
which is that the course must be related to her functions with petitioner and that it must be in the pursuit of a “higher
degree” - the Monbusho scholarship will be conducted in a foreign language and will only lead to the grant of a certificate of
completion and not a masters or higher degree.
ISSUE(S): WON Petitioner should comply with the CBA on “grant-in aid” benefits for its teachers pursuing “higher studies”
HELD: YES. Petition DENIED. CA decision affirmed.
RATIO:
 First, it was petitioner who encouraged its employees to apply in such scholarships
 Second, the training program relates to enhancing Legaspi’s effectiveness as a teacher. The fact that the medium of
instruction is Japanese does not negate the program’s relevance to Legaspi’s work as an English teacher because the course
contents were designed to hone her skills in effectively teaching her students.
 While only a certificate of completion will be conferred on Legaspi, she should not be barred from availing of the benefits
under the CBA. A certificate which is granted by a premier foreign institute, is an added higher qualification in favor of Legaspi
in recognition of her increased competence in handling her classes under petitioner’s auspices.
o The CBA merely states ‘higher studies’ and did not specify to which trainings the benefit will apply; had it intended to
limit, the agreement should have so stated
o The CBA provides the award of grant-in aid benefits to faculty members who will pursue ‘higher studies.’ The term is
so broad.
 [See Doctrine]
119 New Pacific Timber Co. Inc. vs. NLRC, Musib Buat, Leon AUTHOR: Tristan
Gonzaga Jr., et al., National Federation of Labor (NFL), NOTES:
Mariano Aklit and 350 Others
[G.R. No. 124224, March 17, 2000]
TOPIC: Contract Duration and Renewal
PONENTE: Kapunan
DOCTRINE: Until a new CBA 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. Although a CBA has expired, it continues to
have legal effects as between the parties until a new CBA has been entered into.
ER: NFL tried to negotiate better terms and conditions but company resisted thus a case was filed by NFL against the company.
Proposals submitted by the NFL was declared as the CBA between the parties (CBA period 1981-1984). Employees hired after
1984 were claiming benefits under the CBA, Company refused and said employees hired after the term of a CBA are not parties to
the agreement, and therefore, may not claim benefits thereunder. SC Said Company was wrong (See Doctrine).
FACTS:
 The National Federation of Labor (NFL) is the certified bargaining agent of rank and file employees in New Pacific Timber &
Supply Co., Inc. (Company).
 NFL started to negotiate for better terms and conditions of employment. However, Company resisted, which caused NFL to
file a complaint for unfair labor practice on the ground of refusal to bargain collectively.
 Labor Arbiter issued an order declaring the CBA proposals submitted by the NFL as the CBA between the regular rank-and-file
employees in the bargaining unit and petitioner Company. Petitioner Company filed a petition for certiorari with SC but SC
dismissed said petition.
 Thereafter, the case was remanded to the arbitration branch of origin for the execution of Labor Arbiter’s Order granting
monetary benefits consisting of wage increases, housing allowances, bonuses, etc. to the regular rank-and-file employees.
Labor Arbiter Reynaldo S. Villena issued an Order, directing petitioner Company to pay 142 employees entitled to the
aforesaid benefits the respective amounts due them under the CBA. Petitioner Company complied. The case was considered
closed following NFL's manifestation that it will no longer appeal the Order of Labor Arbiter Villena.
 However, notwithstanding such manifestation, a "Petition for Relief" was filed in behalf of 186 of the private respondents
"Mariano J. Akilit and 350 others". They claimed that they were wrongfully excluded from enjoying the benefits under the
CBA since the agreement with NFL and petitioner Company limited the CBA's implementation to only the 142 rank-and-file
employees enumerated.
 Treating the petition for relief as an appeal, the NLRC entertained the same. NLRC issued a resolution declaring that the 186
excluded employees "form part and parcel of the then existing rank-and- file bargaining unit" and were, therefore, entitled to
the benefits under the CBA. Thus, directing New Pacific Timber to pay the complainants their CBA benefits in the aggregate
amount of P13,559,510.37. Hence, this petition by the Company.
 Petitioners argues that the private respondents are not entitled to the benefits under the CBA because employees hired after
the term of a CBA are not parties to the agreement, and therefore, may not claim benefits thereunder, even if they
subsequently become members of the bargaining unit. According to petitioner, the provision on wage increase in the 1981 to
1984 CBA between petitioner Company and NFL provided for yearly wage increases. Logically, these provisions ended in the
years 1984 — the last year that the economic provisions of the CBA were effective. (claimants were hired in 1985 onwards)
ISSUE(S): WoN the CBA can extend beyond the term expressly stipulated therein, and, in the absence of a new CBA, even beyond
the three-year period provided by law? YES.
Are employees hired after the stipulated term of a CBA entitled to the benefits provided thereunder? YES.

HELD: Petition dismissed, the company lost.

RATIO:
CBA Effectivity:
 It is clear from Article 253 of the Labor Code that until a new CBA 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
during the 60-day period prior to the expiration of the old CBA and/or until a new agreement is reached by the parties.
Consequently, the automatic renewal clause provided for by the law, which is deemed incorporated in all CBA's, provides the
reason why the new CBA can only be given a prospective effect. Although a CBA has expired, it continues to have legal effects
as between the parties until a new CBA has been entered into.
 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.
 In the case at bar, no new agreement was entered into by and between petitioner Company and NFL pending appeal of the
decision in NLRC Case; nor were any of the economic provisions and/or terms and conditions pertaining to monetary benefits
 in the existing agreement modified or altered. Therefore, the existing CBA in its entirety, continues to have legal effect.
 To rule otherwise, i.e., that the economic provisions of the existing CBA in the instant case ceased to have force and effect in
the year 1984 would be to create a gap during which no agreement would govern, from the time the old contract expired to
the time a new agreement shall have been entered into. Consequently, the employees from the year 1985 onwards would be
deprived of a substantial amount of monetary benefits, which they could have enjoyed had the terms and conditions of the
CBA remained in force and effect. Such a situation runs contrary to the very intent and purpose of Article 253 and 253-A of
the Labor Code, which is to curb labor unrest and to promote industrial peace.

Who are entitled to the benefits provided in the CBA:

 Petitioner Company insists that the rank-and-file employees hired after the term of the CBA inspite of their subsequent
membership in the bargaining unit, are not parties to the agreement, and certainly may not claim the benefits thereunder.
 The benefits under the CBA in the instant case should be extended to those employees who only became such after the year
1984. To exclude them would constitute undue discrimination and deprive them of monetary benefits they would otherwise
be entitled to under a new collective bargaining contract to which they would have been parties. Since in this particular case,
no new agreement had been entered into after the CBA's stipulated term, it is only fair and just that the employees hired
thereafter be included in the existing CBA.

120 Rivera v. Espiritu AUTHOR: Laureta (edited Garcia)

[G.R. No.135547 January 23, 2002] NOTES: ERARDO F. RIVERA, ALFRED A. RAMISO, AMBROCIO PALAD, DENNIS R. ARANAS,
TOPIC: contract duration and DAVID SORIMA, JR., JORGE P. DELA ROSA, and ISAGANI ALDEA, petitioners, vs. HON.
renewal EDGARDO ESPIRITU in his capacity as Chairman of the PAL Inter-Agency Task Force created
PONENTE: Quisumbing, J. 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.
CASE LAW/ DOCTRINE:
 It was PALEA that voluntarily opted for the 10-year suspension of the CBA. Either case was the unions exercise of its right to
collective bargaining. The right to free collective bargaining, after all, includes the right to suspend it.

 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
Emergency Recit: PAL is beset by financial losses and downsized its labor force. Pilot’s union went on strike and worsened the
situation. Tan wanted to close PAL, but upon the intervention of the President, PALEA submitted a plan to wit: in order for PAL to
attain a degree of normalcy while we are tackling its problems, we would request for a suspension of the Collective Bargaining
Agreements (CBAs) for 10 years. Tan agreed and PAL resumed operations. On same day this case for prohibition and certiorari
was filed.
FACTS:
 June 5, 1998 – PAL pilots affiliated with the Airline Pilots Association of the Philippines (ALPAP) went on a 3-week strike,
causing serious losses to the financially beleaguered flag carrier.
 Faced with bankruptcy, PAL adopted a rehabilitation plan and downsized its labor force by more than 1/3.
 July 22, 1998 – PALEA went on strike to protest the retrenchment measures adopted by the airline.
 August 28, 1998 – President Estrada issued Administrative Order no. 16 creating an Inter-Agency Task Force (Task Force) to
address the problems of the ailing flag carrier.
 September 4, 1998 – PAL Management Submitted to the Task Force an offer by Lucio Tan, Chairman and Chief Executive
Officer of PAL, a plan to transfer shares of stocks to its employees.
 September 10, 1998 – the Board of Directors of PALEA voted to accept Tan’s offer and requested the Task Force’s assistance
in implementing the same. Union members, however, rejected Tan’s offer. Under intense pressure from PALEA members,
the union’s directors subsequently resolved to reject Tan’s offer.
 September 17, 1998 – PAL informed the Task Force that it was shutting down its operations effective September 23, 1998,
preparatory to liquidating its assets and paying off its creditors.
 September 18, 1998 – PALEA sought the intervention of the Office of the President in immediately convening the parties to
prevent imminent closure of PAL.
 September 19, 1998 – PALEA informed the DOLE that it had no objection to a referendum on Tan’s offer.
 September 23, 1998 – PAL ceased its operations and sent notices of termination to its employees.
 Two days later, the PALEA board wrote President Estrada, seeking his intervention. PALEA offered a 10-year moratorium on
strikes and similar actions and a waiver of some of the economic benefits in the existing CBA. Tan rejected this counter-offer.
 September 27, 1998 – PALEA board again wrote President Estrada new proposals subject to ratification of its members
 1. Each PAL employee shall be granted 60,000 shares of stock with a par value of P5.00, from Mr. Lucio Tans shareholdings,
with three (3) seats in the PAL Board and an additional seat from government shares as indicated by His Excellency;
2. Likewise, PALEA shall, as far as practicable, be granted adequate representation in committees or bodies which deal with
matters affecting terms and conditions of employment;
3. To enhance and strengthen labor-management relations, the existing Labor-Management Coordinating Council shall be
reorganized and revitalized, with adequate representation from both PAL management and PALEA;
4. To assure investors and creditors of industrial peace, PALEA agrees, subject to the ratification by the general
membership, (to) the suspension of the PAL-PALEA CBA for a period of ten (10) years, provided the following safeguards
are in place:
a. PAL shall continue recognizing PALEA as the duly certified bargaining agent of the regular rank-and-file ground
employees of the Company;
b. The union shop/maintenance of membership provision under the PAL-PALEA CBA shall be respected.
c. No salary deduction, with full medical benefits.
5. PAL shall grant the benefits under the 26 July 1998 Memorandum of Agreement forged by and between PAL and PALEA,
to those employees who may opt to retire or be separated from the company.
6. PALEA members who have been retrenched but have not received separation benefits shall be granted priority in the
hiring/rehiring of employees.
7. In the absence of applicable Company rule or regulation, the provisions of the Labor Code shall apply.
 October 2, 1998 – 5,324 PALEA members cast their votes in a DOLE-supervised referendum. Of the votes cast, 61% were in
favor of accepting the PAL-PALEA agreement, while 34% rejected it.
 October 7, 1998 – PAL resumed domestic operations. On the same date, 7 officers and members of the PALEA filed a petition
(certiorari and prohibition) to annul the September 27,1998 agreement entered into between PAL and PALEA.
ISSUE(S): W/N 10 year suspension of CBA void?

HELD: No
RATIO:
1. Under Art 253-A provision, insofar as representation is concerned, a CBA has a term of five years, while the other
provisions, except for representation, may be negotiated not later than three years after the execution.

Petitioners contend that the controverted PAL-PALEA agreement is void because

 By agreeing to a 10-year suspension, PALEA, in effect, abdicated the workers constitutional right to bargain for another
CBA at the mandated time
 the agreement was not meant merely to suspend the existing PAL-PALEA CBA, which expires on  September 30, 2000, but
also to foreclose any renegotiation or any possibility to forge a new CBA for a decade or up to 2008.
 it violates the protection to labor policy laid down by the Constitution.
 a 10-year CBA suspension is inordinately long, way beyond the maximum statutory life of a CBA, provided for in Article
253-A. 

We find the argument devoid of merit.

 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.
o 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 latters closure. 
o 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.
 In the instant case, it was PALEA, as the exclusive bargaining agent of PALs 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 unions exercise of its right to collective bargaining. The right to free collective bargaining, after all, includes the
 right to suspend it.

2. Petitioners further allege that the 10-year suspension virtually installed PALEA as a company union for said period, amounting
to unfair labor practice, in violation of Article 253-A of the Labor Code mandating that an exclusive bargaining agent serves for five
years only.

See 4a& b of proposal in facts.

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 for 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--vis the
employer.

Petitioners contention that the agreement installs PALEA as a virtual company union is also untenable. Under Article 248 (d) of the
Labor Code, a company union exists when the employer acts [t]o 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. The case records are bare of any showing of such acts by PAL.

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.

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.

121 MERALCO v. Quisumbing: AUTHOR: Mendoza

[G.R. No. 127598 August 1, 2000] NOTES: No facts as regards how the labor dispute arised.The
TOPIC: Collective Bargaining; Contract Duration and Renewal Court went straight to the arbitral award.
PONENTE: Ynares-Santiago
CASE LAW/ DOCTRINE: Article 253-A (Third Sentence): Any agreement on such other provisions of the CBA entered into within 6
months from the date of expiry of the term of such other provisions as fixed in the CBA, shall retroact to the day immediately
following such date. If any such agreement is entered into beyond 6 months ,the parties shall agree on the duration of
retroactivity thereof.
Emergency Recit: MERALCO contested the resolution of the SC in favor of MEWA ruling that the arbitral award should be
retroactively applied. And that it should be applied prospectively taking into account the huge amount it will cost MERALCO.
MEWA answered by stating that the Sec of Labor has the discretion to determine the effectivity of the awards, thus, the full
retroactive application should apply. The SC partially granted MERALCO’s petition by ruling that even if the arbitral award will be
retroactively applied, it is not a full retroaction by taking into account that it belongs into an industry imbued with public interest.
FACTS:
 On Feb 22, 2000, the SC issued a resolution that the arbitral award in favor of the MEWA shall retroact from Dec 1, 1995 to
Nov 30, 1997. According to the Resolution, i. In general, a CBA negotiated within 6 months after the expiration of the existing
CBA retroacts to the day immediately following such date and if agreed thereafter; ii. The law is silent as to the retroactivity
of a CBA arbitral award and despite such silence, the arbitral awards granted after 6 months from the last CBA shall
retroact to such time agreed upon by the ER and EE; and iii. In the absence of the CBA, the Secretary of Labor’s discretionary
powers over arbitral awards shall control.
 On March 17, 2000, MERALCO filed a Motion for Partial Modification on the above-resolution made by the Court
contending that: i. The ruling did not take into account the huge cost of the award amounting to less than P800
Million; ii. The SC erred in holding that the effectivity of the CBA are automatically retroactive— That an arbitrated
CBA operates and may be executed only prospectively unless there are legal justifications for retroactive
application; and iii. The reckoning date of the award should have been June 1, 1996 not Dec 1,1995, which is the last
day of the 3-year lifetime of the economic provisions of the CBA.
 Thus, MERALCO prays that the 2-year term of the CBA be fixed from Dec 26, 1996 to Dec 28, 1998.
 MEWA that the Motion filed by MERALCO because its President, Manuel Lopez, categorically stated in a memo to the
rank-and-file employees that management will comply with the SC’s Resolution and will not file any MR. Generally, it
 wanted the the full retroaction of the arbitral award to the date of the expiry of the CBA.
 MERALCO: Citing Union of Filipro Employees v. NLRC, the arbitral award should be applied prospectively. And there is
nothing in Art 253-A which states that it should be applied retroactively.
 MEWA: Invoked St. Luke’s Medical Center v. Torres, the Sec of Labor has plenary and discretionary powers to
determine the effectivity of arbitral awards. Thus, it should be made effective from Dec 1, 1995 to Nov 30, 1997.
ISSUE(S): Whether the arbitral award should be applied retroactively or prospectively.

HELD: MERALCO’s petition partially granted. It should be applied retroactively

RATIO:
 Where an arbitral award is granted beyond six months after the expiration of the existing CBA, and there is no agreement
between the parties as to the date of effectivity, it shall retroact to the first day after the 6-month period following the
expiration of the last day of the CBA. In the Feb 22 Resolution, the period to which award shall retroact was inadvertently
stated as beginning on Dec 1, 1995 to Nov 30, 1997.
 However, The SC took into account the fact that MERALCO belongs to an industry imbued with public interest. As such the
SC cannot ignore the enormous cost that MERALCO will have to bear as a consequence of the full retroaction of the arbitral
award to the date of the expiry of the CBA and the inevitable effect that it would have on the national economy. It also
balanced the interest of both parties by taking into account the policy of Social Justice in favor of the employees.
 Hence, the SC arrived at a formula that would address both sides, the arbitral award should be made to retroact to the 1 st
day after the 6-month period following the expiration of the last day of the CBA ( the 2-year period June 1, 1996-May 31,
1998).
 During the interregnum between the expiration of the economic provisions of the CBA and the date of effectivty of the
arbitral award, the former shall govern.

122 ASSOCIATED LABOR UNIONS V NLRC AUTHOR: PAGCALIWAGAN

G.R. No. 74841 December 20, 1991 Notes:
TOPIC: CBA and 3rd party liability
PONENTE: Davide, Jr.
CASE LAW/ DOCTRINE:
Labor contracts such as are not enforceable against a transferee of an enterprise, labor contracts being in
personam, thus binding only between the parties. As a general rule, there is no law requiring a bona fide purchaser
of the assets of an on-going concern to absorb in its employ the employees of the latter. However, although the
purchaser of the assets or enterprise is not legally bound to absorb in its employ the employees of the seller of such
assets or enterprise, the parties are reliable to the employees if the transaction between the parties is colored or
clothed with bad faith. The sale or disposition must be motivated by good faith as an element of exemption from
liability.
This flows from the well-recognized principle that is within the employer's legitimate sphere of management
control of the business to adopt economic policies or make some changes or adjustments in their organization or
operations that would insure profit to itself or protect the investment of its stockholders. As in the exercise of such
management prerogative, the employer may merge or consolidate its business with another, or sell or dispose all
or substantially all of its assets and properties which may bring about the dismissal or termination of its employees
in the process. This disposes of the allegation that there was termination due to redundancy; such could not be the
case as all the employees were terminated as a result of the closure. Redundancy contemplates a situation where
employees are dismissed because of duplicitous functions.
Emergency Recit: CALTEX purchased Mobil Petroleum’s USA shareholdings in MOPI. Upon consummation of sale,
MOPI filed amended AOI which provided that its corporate term will cease. MOPI then closed and ceased operations.
Before closure, complainants were notified of the termination of their services and accepted checks for separation
pay. Complainants filed case for ULP and illegal dismissal impleading Caltex and MPI (MOPI continuing its business
under this name) Issue is WON MOPI is guilty of ULP and illegal dismissal. No. What was effected was cessation of
business and that the requirement of due notice was substantially complied with, the allegations that both MOPI and
Caltex merely intended to evade the provisions of the CBA cannot be sustained. There was nothing irregular in the
closure by MOPI of its business operation. Caltex may not be said to have stepped into the picture as an assignee of
the CBA because of the very fact of such closure.
FACTS:
 CBA was entered between complainants and respondent Mobil Oil Philippines, Inc. (MOPI) for a period of 3
 years starting from April 1, 1982 to March 31, 1985.
 August 5, 1983 – President of MOPI sent letters to employees notifying of the termination of their services
effective August 31, 1983 because of the sale of the firm.
 Complainant employee accepted their checks for separation pay and signed quit-claims under
protest and subject to the outcome of this case
 Caltex Philippines, Inc. (CALTEX) was impleaded as additional respondent because of its acquisition of the
entire marketing and distribution assets of MOPI.
 Mobil Philippines, Inc. (MPI) was also made a respondent in view of a metropolitan daily newspaper
announcement that MOPI will continue to do business under the corporate name of MPI.
 This newly formed company will market chemicals and special products such as solvents, process
products, waxes and industrial asphalt, fuels and lubricants for the international marine and aviation
industries.
 Complainants chare MOPI and its president with ULP for violating their CBA agreement which states that:
 "This Agreement shall be binding upon the parties hereto and their successors and assigns, and may
be assigned by the company without the previous approval of the Union. However, the latter will be
notified of such assignment when it occurs."
 In this case, the complainant unions were not notified officially of such assignment to CALTEX and
MOPI made announcement in major dailies that the company shall continue to operate its business.
 What CALTEX purchased was Mobil Petroleum’s USA (MOBIL PET) shareholdings in MOPI for $40M.
 Upon consummation of the sale, MOPI filed an amended AOI which provided that its corporate term
would cease on December 31, 1983. By September 5, 1983 MOPI actually closed and ceased
operations.

Labor Arbiter: Dismissed complaint on the basis of the following:

 Alleged sale by Mobil Petroluem, USA to Caltex, the former being a principal stockholder of MOPI, was in fact
made by MOPI to Caltex, and whatever CBA entered into by MOPI binds its stockholders. However, Section I
of Article XX of the CBA was not violated by respondent MOPI as the record shows and from the admission of
complainants-union that the latter has knowledge of the impending sales and closure of the firm in a series of
negotiations/meetings.
 As between complainants and respondent MOPI, the situation is one of closure and not redundancy
 Although Caltex is bound by the said agreement under Section I, but the rights and interests or benefits that
may have been earned during the remaining term of the CBA have been satisfied by MOPI when herein
complainants accepted their respective checks and executed quitclaim from and in favor of the firm. The
office took note of the fact although acceptance of payment was under protest, there have been previous
long negotiations/meetings for settlement between herein parties, and the benefits granted by respondent
MOPI, were far above the benefits provided for by law.
 As regards respondent MPI, in addition to the above, there is no concrete evidence to establish or prove
complainant's allegation that MOPI will continue its business

NLRC & CA: Affirmed Labor Arbiter

ISSUE(S): WON MOPI is guilty of ULP and illegal dismissal.

HELD: NO. What was effected was cessation of business and that the requirement of due notice was substantially
complied with, the allegations that both MOPI and Caltex merely intended to evade the provisions of the CBA cannot
be sustained. There was nothing irregular in the closure by MOPI of its business operation. Caltex may not be said to
have stepped into the picture as an assignee of the CBA because of the very fact of such closure.
RATIO:

Examination of the CBA provisions entitled "Effectivity" shows that the written notice to terminate that is required to
be given by either party to the other relates to notice to terminate the CBA at the end of the original three-year,
period or any subsequent year thereafter,  in the absence of which written notice, the duration of the CBA would be
automatically extended for one (1) year periods. What is involved in instant Petition is not, however, the termination
of the CBA itself, considering that the sale by Mobil Pet of its wholly owned subsidiary MOPI to Caltex Pet took place
in 1983, in the middle of original (sic) period of the CBA's. It appears to the Court that the applicable provision is
Article II, Section 1, quoted above. Under Article II, Section 1, in cases of termination of services of employees, the
company is required to comply with the provisions of the Labor Code and its implementing Rules and Regulations and,
"time and circumtances permitting" and "whenever possible," management should enlist the support of the unions in
actions affecting the vital interest of the bargainable (i.e., member) employees. It may be well to add that, since actual
notice was given to all of MOPI's employees, including, of course, the employees who were members of petitioner
unions, such notice may also be regarded as effectively the notice to the unions contemplated by the CBA provision
on "Effectivity."

In Sundowner Development Corp. vs. Drilon, We stated the rule that unless expressly assumed, labor contracts such as
are not enforceable against a transferee of an enterprise, labor contracts being in personam, thus binding only
between the parties. As a general rule, there is no law requiring a bona fide purchaser of the assets of an on-going
concern to absorb in its employ the employees of the latter. However, although the purchaser of the assets or
enterprise is not legally bound to absorb in its employ the employees of the seller of such assets or enterprise, the
parties are reliable to the employees if the transaction between the parties is colored or clothed with bad faith. The
sale or disposition must be motivated by good faith as an element of exemption from liability.

This flows from the well-recognized principle that is within the employer's legitimate sphere of management control
of the business to adopt economic policies or make some changes or adjustments in their organization or operations
that would insure profit to itself or protect the investment of its stockholders. As in the exercise of such management
prerogative, the employer may merge or consolidate its business with another, or sell or dispose all or substantially all
of its assets and properties which may bring about the dismissal or termination of its employees in the process. This
disposes of the allegation that there was termination due to redundancy; such could not be the case as all the
employees were terminated as a result of the closure. Redundancy contemplates a situation where employees are
dismissed because of duplicitous functions.
DISSENTING/CONCURRING OPINION(S):

123 Elisco-Elirol Labor Union (EELU) v. Noriel, Elizalde Steel AUTHOR: Pineda
Consolidated, NAFLU Notes:
GR L-41955
TOPIC: CBA + disaffiliation
PONENTE: Teehankee, J.
CASE LAW/ DOCTRINE:
 Affiliation is to increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet
the locals remained the basic units of association, free to serve their own and the common interest of all, subject to the
restraints imposed by the Constitution and By-Laws, and free also to renounce the affiliation for mutual welfare upon the
terms laid down in the agreement which brought it into existence.
 Substitutionary doctrine:
o Even during the effectivity of a CBA executed through an agent, the EEs can change said agent but the contract
continues to bind them up to its expiration date
Emergency Recit
FACTS:
 EELU, before independent registration, was under NAFLU. While it was under NAFLU, there was a CBA between EELU (NAFLU
as agent) and ER.
 After the CBA, EELU became independent and disaffiliated from NAFLU.
 Subsequently, the ER refused to recognize the validity of the CBA – on the ground that it was with NAFLU, not EELU that it
had concluded the CBA with.
 ER dismissed EE members of EELU, pursuant to union security clause – considering that they left NAFLU (ER under the belief
the CBA was between NAFLU and ER, not EELU and ER)
 EELU asserting validity of CBA considering that NAFLU was merely an agent, and that EELU was always the principal.
ISSUE(S): W/N the disaffiliation terminated the CBA or rendered it ineffective as to members of EELU, the disaffiliated
independent union

HELD: NO. EELU was always the principal, and NAFLU the agent. Hence, the CBA is valid and binding on EELU and ER.
RATIO:
 NAFLU, as the mother union, in participating in the execution of the CBA acted merely as agent of the local union, which
remained the basic unit of the association existing principally and freely to serve the common interest of all its members,
including the freedom to disaffiliate when the circumstances is warranted as in this present case.
 Even if NAFLU is no longer the agent of EEs, the CBA remains in existence because the principal is present although now in
the form of an independent organization.
 Affiliation is to increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet
the locals remained the basic units of association, free to serve their own and the common interest of all, subject to the
restraints imposed by the Constitution and By-Laws, and free also to renounce the affiliation for mutual welfare upon the
terms laid down in the agreement which brought it into existence.
 Substitutionary doctrine:
o Even during the effectivity of a CBA executed through an agent, the EEs can change said agent but the contract
continues to bind them up to its expiration date
o Not change the provisions of the CBA, but give the disaffiliated local labor union the chance to enforce the same
since there is a shift of allegiance in the majority of the EEs at the company
o Only consideration is EEs interest, not the agent’s interest in the CBA