| Labor Relations-2A
ACOSTA
SAN JOSE CITY ELECTRIC SERVICE
COOPERATIVE, INC. (SAJELCO) V.
MINISTRY OF LABOR AND
EMPLOYMENT and MAGKAISA-ADLO
May 31, 1969
FACTS:
Private respondent MAGKAISA-ADLO filed a
petition for direct certification election with
the Regional Office No. 111 of the Department
of Labor and Employment in San Fernando,
Pampanga which was opposed by SALJECO on
the ground that the employees who sought to
be represented by private respondent
(MAGKAISA-ADLO) are members-consumers
of the Cooperative itself and at the same time
members of the General Assembly which,
pursuant to the By-laws is also the final arbiter of
any dispute arising in the Cooperative and
therefore cannot fairly and prudently represent
such opposing personalities that merge into one
juridical or natural person.
The Med-Arbiter who was assigned to the case
issued an Order granting the petition for direct
certification election on the basis of the
pleadings filed. On appeal, Respondent Director
of the Bureau of Labor Relations sustained the
ruling of the Med-Arbiter. Accordingly, a direct
certification election was conducted in
SALJECO, there being no restraining order from
thie Court enjoining the holding thereof. Hence,
the instant petition.
ISSUE: Whether or not the employees-
members of an electric cooperative can
organize themselves for purposes of
collective bargaining.
HELD: NO. SAJELCO claims that its
employees are also members of the
cooperative. It cited Section 17(18) of its By-
laws which declares that:
The Board shall also create
positions for subordinate
employees and fix their
duties and remunerations.
Only member-consumers or
1
members of their immediate
family shall be employed by
the cooperative
The above-cited provision, however,
mentions two types of employees, namely:
the members-consumers and the members
of their immediate families. As regards
employees of SAJELCO who are members-
consumers, the rule is settled that they are
not qualified to form, join or assist labor
organizations for purposes of collective
bargaining. The reason for withholding
from employees of a cooperative who are
members-co-owners the right to collective
bargaining is clear: an owner cannot
bargain with himself. However, employees
who are not members-consumers may
form, join or assist labor organizations
for purposes of collective bargaining
notwithstanding the fact that employees
of SAJELCO who are not members-
consumers were employed ONLY
because they are members of the
immediate family of members-
consumers. The fact remains that they are
not themselves members-consumers, and
as such, they are entitled to exercise the
rights of all workers to organization,
collective bargaining, negotiations and
others as are enshrined in Section 8, Article
III and Section 3, Article XIII of the 1987
Constitution, Labor Code of the Philippines
and other related laws (Cooperative Rural
Bank of Davao City, Inc., supra, p. 10).
The assailed Order of respondent Pura
Ferrer-Calleja, Director of the Bureau of
Labor Relations was MODIFIED to the
effect that only the rank-and-file
employees of petitioner who are not its
members-consumers are entitled to self-
organization, collective bargaining, and
negotiations, while other employees who
are members-consumers thereof cannot
enjoy such right. The direct certification
election conducted on April 13, 1987 is
hereby set aside.

BARRIETA
VICTORIANO V. ELIZALDE ROPE
WORKERS UNION
September 12, 1974
PONENTE: Zaldivar, J.:
FACTS:
Benjamin Victoriano (hereinafter referred to
as Appellee), a member of the religious sect
known as the "Iglesia ni Cristo", had been in
the employ of the Elizalde Rope Factory Inc.
(hereinafter referred to as Company) since
1958. As such employee, he was a
member of the Elizalde Rope Workers'
Union (hereinafter referred to as Union)
which had with the Company a collective
bargaining agreement containing a closed
shop provision which reads as follows:
"Membership in the Union shall be required
as a condition of employment for all
permanent employees workers covered by
this Agreement.” The collective bargaining
agreement expired on March 3, 1964 but
was renewed the following day, March 4,
1964.
Under Section 4 (a), paragraph 4, of
Republic Act No. 875, prior to its
amendment by Republic Act No. 3350, the
employer was not precluded "from making
an agreement with a labor organization to
require as a condition of employment
membership therein, if such labor
organization is the representative of the
employees." On June 18, 1961, however,
Republic Act No. 3350 was enacted,
introducing an amendment to paragraph (4)
subsection (a) of section 4 of Republic Act
No. 875, as follows: . . "but such agreement
shall not cover members of any religious
sects which prohibit affiliation of their
members in any such labor organization”.
Being a member of a religious sect that
prohibits the affiliation of its members with
any labor organization, Appellee presented
his resignation to appellant Union. The
management of the Company in turn
notified Appellee and his counsel that
2
| Labor Relations-2A
unless the Appellee could achieve a
satisfactory arrangement with the Union, the
Company would be constrained to dismiss
him from the service. This prompted the
appellee to file a motion for injunction to
enjoin the Company and the Union from
dismissing him.
In its answer, the Union contended, among
others, that Republic Act No. 3350 infringes
on the fundamental right to form lawful
associations; that "the very phraseology of
said Republic Act 3350, that 'membership in
a labor organization is banned to all those
belonging to such religious sect prohibiting
affiliation with any labor organization’”,
"prohibits all the members of a given
religious sect from joining any labor union if
such sect prohibits affiliations of their
members thereto”; and, consequently,
deprives said members of their
constitutional right to form or join lawful
associations or organizations guaranteed by
the Bill of Rights, and thus becomes
obnoxious to Article III, Section 1 (6) of the
1935 Constitution.
ISSUE:
Whether or not R.A. No. 3350 violates the
constitutional provision on freedom of
association as it prohibits and bans the
members of religious sects that forbid
affiliation of their members with labor unions
from joining labor unions.
HELD:
No. Appellant Union's contention that
Republic Act No. 3350 prohibits and bans
the members of such religious sects that
forbid affiliation of their members with labor
unions from joining labor unions appears
nowhere in the wording of Republic Act No.
3350; neither can the same be deduced by
necessary implication therefrom. It is not
surprising, therefore, that appellant, having
thus misread the Act, committed the error of
contending that said Act is obnoxious to the
constitutional provision on freedom of
association. Both the Constitution and
Republic Act No. 875 recognize freedom of
association. Section 1 (6) of Article III of the

Constitution of 1935, as well as Section 7 of
Article IV of the Constitution of 1973,
provide that the right to form associations or
societies for purposes not contrary to law
shall not be abridged. Section 3 of Republic
Act No. 875 provides that employees shall
have the right to self-organization and to
form, join or assist labor organizations of
their own choosing for the purpose of
collective bargaining and to engage in
concerted activities for the purpose of
collective bargaining and other mutual aid or
protection. What the Constitution and the
Industrial Peace Act recognize and
guarantee is the "right" to form or join
associations. Notwithstanding the different
theories propounded by the different
schools of jurisprudence regarding the
nature and contents of a "right", it can be
safely said that whatever theory one
subscribes to, a right comprehends at least
two broad notions, namely: first, liberty or
freedom, i.e., the absence of legal restraint,
whereby an employee may act for himself
without being prevented by law; and
second, power, whereby an employee may,
as he pleases, join or refrain from joining an
association. It is, therefore, the employee
who should decide for himself whether he
should join or not an association; and
should he choose to join, he himself makes
up his mind as to which association he
would join; and every after he has joined, he
still retains the liberty and the power to
leave and cancel his membership with said
organization at any time. It is clear,
therefore, that the right to join a union
includes the right to abstain from joining any
union. Inasmuch as what both the
Constitution and the Industrial Peace Act
have recognized, and guaranteed to the
employee, is the "right" to join associations
of his choice, it would be absurd to say that
the law also imposes, in the same breath,
upon the employee the duty to join
associations. The law does not enjoin an
employee to sign up with any association.
The right to refrain from joining labor
organizations recognized by Section 3 of
the Industrial Peace Act is, however,
3
| Labor Relations-2A
limited. The legal protection granted to
such right to refrain from joining is
withdrawn by operation of law, where a
labor union and an employer have agreed
on a closed shop, by virtue of which the
employer may employ only members of the
collective bargaining union, and the
employees must continue to be members of
the union for the duration of the contract in
order to keep their jobs. Thus Section 4 (a)
(4) of the Industrial Peace Act, before its
amendment by Republic Act No. 3350,
provides that although it would be an unfair
labor practice for an employer "to
discriminate in regard to hire or tenure of
employment or any term or condition of
employment to encourage or discourage
membership in any labor organization" the
employer is, however, not precluded "from
making an agreement with a labor
organization to require as a condition of
employment membership therein, if such
labor organization is the representative of
the employees". By virtue, therefore, of a
closed shop agreement, before the
enactment of Republic Act No. 3350, if any
person, regardless of his religious beliefs,
wishes to be employed or to keep his
employment, he must become a member of
the collective bargaining union. Hence, the
right of said employee not to join the labor
union is curtailed and withdrawn.
To that all embracing coverage of the
closed shop arrangement, Republic Act No.
3350 introduced an exception, when it
added to Section 4 (a) (4) of the Industrial
Peace Act the following proviso: "but such
agreement shall not cover members of any
religious sects which prohibit affiliation of
their members in any such labor
organization". Republic Act No. 3350
merely excludes ipso jure from the
application and coverage of the closed shop
agreement the employees belonging to any
religious sects which prohibit affiliation of
their members with any labor organization.
What the exception provides, therefore, is
that members of said religious sects cannot
be compelled or coerced to join labor unions
even when said unions have closed shop

agreements with the employers; that in spite
of any closed shop agreement, members of
said religious sects cannot be refused
employment or dismissed from their jobs on
the sole ground that they are not members
of the collective bargaining union. It is
clear, therefore, that the assailed Act, far
from infringing the constitutional provision
on freedom of association, upholds and
reinforces it. It does not prohibit the
members of said religious sects from
affiliating with labor unions. It still leaves to
said members the liberty and the power to
affiliate, or not to affiliate, with labor unions.
If, notwithstanding their religious beliefs, the
members of said religious sects prefer to
sign up with the labor union, they can do
so. If in deference and fealty to their
religious faith, they refuse to sign up, they
can do so; the law does not coerce them to
join; neither does the law prohibit them from
joining; and neither may the employer or
labor union compel them to join. Republic
Act No. 3350, therefore, does not violate the
constitutional provision on freedom of
association.
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BATALLER
KAPATIRAN SA MEAT AND CANNING
DIVISION vs. CALLEJA
G.R. No. 82914, June 20 1988
FACTS:
From 1984 to 1987 Petitioner Kapatiran sa
Meat and Canning Division (TUPAS) was
the sole and exclusive collective bargaining
representative of the workers in the Meat
and Canning Division of the Universal
Robina Corporation, with a 3-year collective
bargaining agreement (CBA) which was to
expire on November 15, 1987. Within the
freedom period of 60 days prior to the
expiration of its CBA, TUPAS filed an
amended notice of strike as a means of
pressuring the company to extend, renew,
or negotiate a new CBA with it. On October
8, 1987, the NEW ULO, composed mostly
of workers belonging to the IGLESIA NI
KRISTO sect, registered as a labor union.
On October 12, 1987, the TUPAS staged a
strike. ROBINA obtained an injunction
against the strike, resulting in an agreement
to return to work and for the parties to
negotiate a new CBA. The next day NEW
ULO filed a petition for a certification
election at the Bureau of Labor Relations.
TUPAS moved to dismiss the petition
claiming among others that the members of
the NEW ULO were mostly members of the
Iglesia ni Kristo sect which three years
previous refused to affiliate with any labor
union. It also accused the company of using
the NEW ULO to defeat TUPAS’ bargaining
rights. The Med-Arbiter ordered the holding
of a certification election. TUPAS appealed
to the Bureau of Labor Relations. In the
meantime, it was able to negotiate a new 3-
year CBA with ROBINA, which was signed
on December 3, 1987 and to expire on
November 15, 1990. On January 27, 1988,

respondent BLR Director Calleja dismissed
the appeal.
ISSUE:
W/N members of a sect who are not allowed
by their religion to join a labor union may
form their own union?
HELD:
YES. This Court’s decision in Victoriano vs.
Elizalde Rope Workers’ Union, 59 SCRA
54, upholding the right of members of the
IGLESIA NI KRISTO sect not to join a labor
union for being contrary to their religious
beliefs, does not bar the members of that
sect from forming their own union. The
public respondent correctly observed that
the “recognition of the tenets of the sect
… should not infringe on the basic right
of self-organization granted by the
constitution to workers, regardless of
religious affiliation.”
The fact that TUPAS was able to negotiate
a new CBA with ROBINA within the 60-day
freedom period of the existing CBA, does
not foreclose the right of the rival union,
NEW ULO, to challenge TUPAS’ claim to
majority status, by filing a timely petition for
certification election before TUPAS’ old
CBA expired and before it signed a new
CBA with the company. As pointed out by
Med-Arbiter Abdullah, a “certification
election is the best forum in ascertaining
the majority status of the contending
unions wherein the workers themselves
can freely choose their bargaining
representative thru secret ballot.” Since it
has not been shown that this order is tainted
with unfairness, this Court will not thwart the
holding of a certification election
(Associated Trade Unions [ATU] vs. Noriel,
88 SCRA 96).
5
| Labor Relations-2A
CANAPE
UP vs. FERRER-CALLEJA
G.R. No. 96189, July 14, 1992
FACTS:
The case was initiated in the Bureau of
Labor Relations by a petition filed on March
2, 1990 by a registered labor union, the
"Organization of Non-Academic Personnel
of UP" (ONAPUP). Claiming to have a
membership of 3,236 members —
comprising more than 33% of the 9,617
persons constituting the non-academic
personnel of UP-Diliman, Los Baños,
Manila, and Visayas, it sought the holding of
a certification election among all said non-
academic employees of the University of the
Philippines. At a conference thereafter held
on March 22, 1990 in the Bureau, the
University stated that it had no objection to
the election.
On April 18, 1990, another registered labor
union, the "All UP Workers' Union," filed a
comment, as intervenor in the certification
election proceeding. Alleging that its
membership covers both academic and
non-academic personnel, and that it aims to
unite all UP rank-and-file employees in one
union, it declared its assent to the holding of
the election provided the appropriate
organizational unit was first clearly defined.
It observed in this connection that the
Research, Extension and Professional Staff
(REPS), who are academic non-teaching
personnel, should not be deemed part of the
organizational unit.
For its part, the University, through its
General Counsel, made of record its view
that there should be two (2) unions: one for
academic, the other for non-academic or
administrative, personnel considering the
dichotomy of interests, conditions and rules
governing these employee groups.
Director Calleja ruled on the matter on
August 7, 1990. She declared that "the
appropriate organizational unit should

embrace all the regular rank-and-file
employees, teaching and non-teaching, of
the University of the Philippines, including
all its branches" and that there was no
sufficient evidence "to justify the grouping of
the non-academic or administrative
personnel into an organization unit apart
and distinct from that of the academic or
teaching personnel." Director Calleja
adverted to Section 9 of Executive Order
No. 180
The Director thus commanded that a
certification election be "conducted among
rank-and-file employees, teaching and non-
teaching" in all four autonomous campuses
of the UP, and that management appear
and bring copies of the corresponding
payrolls for January, June, and July, 1990 at
the "usual pre-election conference . . ."
At the pre-election conference held on
March 22, 1990 at the Labor Organizational
Division of the DOLE, 8 the University
sought further clarification of the coverage
of the term, "rank-and-file" personnel,
asserting that not every employee could
properly be embraced within both teaching
and non-teaching categories since there are
those whose positions are in truth
managerial and policy-determining, and
hence, excluded by law.
At a subsequent hearing (on October 4,
1990), the University filed a Manifestation
seeking the exclusion from the
organizational unit of those employees
holding supervisory positions among non-
academic personnel, and those in teaching
staff with the rank of Assistant Professor or
higher, submitting the following as grounds
therefor:
1) Certain "high-level employees" with
policy-making, managerial, or confidential
functions, are ineligible to join rank-and-file
employee organizations under Section 3,
EO 180:
Sec. 3. High-level employees
whose functions are normally
considered as policy-making
6
| Labor Relations-2A
or managerial or whose
duties are of a highly
confidential nature shall not
be eligible to join the
organization of rank-and file
government employees;
2) In the University hierarchy, not all
teaching and non-teaching personnel
belong the rank-and file: just as there are
those occupying managerial positions within
the non-teaching roster, there is also a
dichotomy between various levels of the
teaching or academic staff;
3) Among the non-teaching employees
composed of Administrative Staff and
Research personnel, only those holding
positions below Grade 18 should be
regarded as rank-and-file, considering that
those holding higher grade positions, like
Chiefs of Sections, perform supervisory
functions including that of effectively
recommending termination of appointments
or initiating appointments and promotions;
and
4) Not all teaching personnel may be
deemed included in the term, "rank-and-
file;" only those holding appointments at the
instructor level may be so considered,
because those holding appointments from
Assistant Professor to Associate Professor
to full Professor take part, as members of
the University Council, a policy-making
body, in the initiation of policies and rules
with respect to faculty tenure and
promotion.
The ONAPUP quite categorically made of
record its position; that it was not opposing
the University's proferred classification of
rank-and file employees. On the other hand,
the "All UP Workers' Union" opposed the
University's view, in a Position Paper
presented by it under date of October 18,
1990.
Director Calleja subsequently promulgated
an Order dated October 30, 1990, resolving
the "sole issue" of "whether or not
 | Labor Relations-2A

professors, associate professors and to the Board of Regents the

assistant professors are included in the conferment of degrees, and
definition of high-level employee(s)" in light disciplinary power over
of Rule I, Section (1) of the Implementing students. The policy-
Guidelines of Executive Order No. 180, determining functions
defining "high level employee" as follows: contemplated in the definition
of a high-level employee
1. High Level Employee — is pertain to managerial,
one whose functions are executive, or organization
normally considered policy policies, such as hiring, firing,
determining, managerial or and disciplining of
one whose duties are highly employees, salaries,
confidential in nature. A teaching/working hours,
managerial function refers to other monetary and non-
the exercise of powers such monetary benefits, and other
as: terms and conditions of
1. To employment. They are the
effectively usual issues in collective
recommend bargaining negotiations so
such that whoever wields these
managerial powers would be placed in a
actions; situation of conflicting
2. To interests if he were allowed
formulate or to join the union of rank-and-
execute file employees.
management
policies and The University seasonably moved for
decisions; or reconsideration, seeking to make the
3. To hire, following points, to wit:
transfer,
suspend, lay- 1) UP professors do "wield the most potent
off, recall, managerial powers: the power to rule on
dismiss, tenure, on the creation of new programs
assign or and new jobs, and conversely, the abolition
discipline of old programs and the attendant re-
employees. assignment of employees.

The Director adjudged that said teachers
are rank-and-file employees "qualified to
join unions and vote in certification
elections." According to her —
A careful perusal of the
University Code . . shows
that the policy-making
powers of the Council are
limited to academic matters,
namely, prescribing courses
of study and rules of
discipline, fixing student
admission and graduation
requirements, recommending
2) To say that the Council is "limited to
(acting on) academic matters" is error, since
academic decisions "are the most important
decisions made in a University . . (being, as
it were) the heart, the core of the University
as a workplace.
3) Considering that the law regards as a
"high level" employee, one who performs
either policy-determining, managerial, or
confidential functions, the Director erred in
applying only the "managerial functions"
test, ignoring the "policy-determining
functions" test.

7

4) The Director's interpretation of the law
would lead to absurd results, e.g.: "an
administrative officer of the College of Law
is a high level employee, while a full
Professor who has published several
treatises and who has distinguished himself
in argument before the Supreme Court is a
mere rank-and-file employee. A dormitory
manager is classified as a high level
employee, while a full Professor or Political
Science with a Ph. D. and several Honorary
doctorates is classified as rank-and-file."
ISSUE: Whether or not they, and other
employees performing academic
12
functions, should comprise a collective
bargaining unit distinct and different from
that consisting of the non-academic
employees of the University, 13 considering
the dichotomy of interests, conditions and
rules existing between them.
HELD:
The Supreme Court applied the
principles laid down in Democratic Labor
Association vs. Cebu Stevedoring
Company, Inc ( 103 Phil. 1103). In the said
case, the Supreme Court said that there are
various factors which must be satisfied and
considered in determining the proper
constituency of a bargaining unit. No one
particular factor is itself decisive of the
determination. The weight accorded to any
particular factor varies in accordance with
the particular question or questions that
may arise in a given case. What are these
factors? Rothenberg mentions a good
number, but the most pertinent to our case
are: (1) will of the employees (Globe
Doctrine); (2) affinity and unit of employees'
interest, such as substantial similarity of
work and duties, or similarity of
compensation and working conditions; (3)
prior collective bargaining history; and (4)
employment status, such as temporary,
seasonal probationary employees.
The Court further explained that "the
test of the grouping is community or
mutuality of interests. And this is so
8
| Labor Relations-2A
because 'the basic test of an asserted
bargaining unit's acceptability is whether or
not it is fundamentally the combination
which will best assure to all employees the
exercise of their collective bargaining rights'
(Rothenberg on Labor Relations, 490)."
Hence, in that case, the Court upheld the
trial court's conclusion that two separate
bargaining units should be formed, one
consisting of regular and permanent
employees and another consisting of casual
laborers or stevedores.
In the case at bar, the University
employees may, as already suggested,
quite easily be categorized into two general
classes: one, the group composed of
employees whose functions are non-
academic, i.e., janitors, messengers, typists,
clerks, receptionists, carpenters,
electricians, grounds-keepers, chauffeurs,
mechanics, plumbers; and two, the group
made up of those performing academic
functions, i.e., full professors, associate
professors, assistant professors, instructors
— who may be judges or government
executives — and research, extension and
professorial staff. Not much reflection is
needed to perceive that the community or
mutuality of interests which justifies the
formation of a single collective bargaining
unit is wanting between the academic and
non-academic personnel of the university. It
would seem obvious that teachers would
find very little in common with the University
clerks and other non-academic employees
as regards responsibilities and functions,
working conditions, compensation rates,
social life and interests, skills and
intellectual pursuits, cultural activities, etc.
On the contrary, the dichotomy of interests,
the dissimilarity in the nature of the work
and duties as well as in the compensation
and working conditions of the academic and
non-academic personnel dictate the
separation of these two categories of
employees for purposes of collective
bargaining. The formation of two separate
bargaining units, the first consisting of the
rank-and-file non-academic personnel, and
the second, of the rank-and-file academic
 | Labor Relations-2A

employees, is the set-up that will best

assure to all the employees the exercise of
their collective bargaining rights. These
special circumstances, i.e., the dichotomy of
interests and concerns as well as the
dissimilarity in the nature and conditions of
work, wages and compensation between
the academic and non-academic personnel,
bring the case at bar within the exception
contemplated in Section 9 of Executive
Order No. 180. It was grave abuse of
discretion on the part of the Labor Relations
Director to have ruled otherwise, ignoring
plain and patent realities.

The Order of August 7, 1990 is

MODIFIED in the sense that the non-
academic rank-and-file employees of the
University of the Philippines shall constitute
a bargaining unit to the exclusion of the
academic employees of the institution —
i.e., full professors, associate professors,
assistant professors, instructors, and the
research, extension and professorial staff,
who may, if so minded, organize
themselves into a separate collective
bargaining unit; and that, therefore, only
said non-academic rank-and-file personnel
of the University of the Philippines in
Diliman, Manila, Los Baños and the Visayas
are to participate in the certification election.

9

CARILLO
GENARO BAUTISTA, petitioner, vs. HON.
COURT OF APPEALS and THE
OFFICIALS AND BOARD OF DIRECTORS
OF KAISAHAN AT KAPATIRAN NG MGA
MANGGAGAWA AT KAWANI SA
METROPOLITAN WATERWORKS AND
SEWERAGE SYSTEM UNION(KKMK-
MWSS), REPRESENTED BY ITS
PRESIDENT, PRUDENCIO CRUZ,
respondents.
Facts:
A Petition for Prohibition with Prayer for a
Temporary Restraining Order/Injunction was
filed by Genaro Bautista, et al., against
Perlita Bathan-Velasco, Director, Eugenia
Fernandez, Med-Arbiter, and Johnny P.
Garcia, Chief, Labor Organizations Division,
all of the BLR, before the Regional Trial
Court (RTC), Quezon City, Branch 87. The
petition sought to enjoin the herein
respondents from proceeding with the
election of officers of KKMK-MWSS
scheduled on 02 December 1993, and to
permanently prohibit them from exercising
jurisdiction over the conduct of election of
the officers of the KKMK-MWSS. On 26
November 1993, the RTC, Quezon City,
Branch 87, through Judge Elsie Ligot Telan,
issued a temporary restraining order On 02
December 1993, the election of the officers
of KKMK-MWSS pushed through despite
the issuance of the temporary restraining
order. Another Order was issued by Branch
87 on the same date. On 29 December
1993, a Writ of Preliminary Injunction was
issued by the RTC, the pertinent portion of
which reads: NOW THEREFORE, you the
respondents, your agents and
representatives, particularly the officers
concerned ordering them until further orders
of this Court to refrain from giving any effect
10
| Labor Relations-2A
to the elections above adverted to by
ratifying and registering the same, and
recognizing as officers the persons
supposedly elected; and for the latter to
refrain from assuming office and acting as
officers of the KKMK-MWSS. However on
09 October 1995, a Decision was rendered
by the Court of Appeals finding for the
private respondents, upholding that the BLR
had jurisdiction over an intra-union dispute.
Issue: WON the BLR has jurisdiction to call
for and conduct the election of officers of an
employee’s association in the public sector?
Ruling: YES.
Insofar as power to call for and supervise
the conduct of certification elections is
concerned, we rule against the petitioner.
The authority of the BLR in assuming
jurisdiction over a certification election, or
any inter-union or intra-union conflicts, is
found in Article 226 of the Labor Code of the
Philippines, which reads: ART. 226.
BUREAU OF LABOR RELATIONS. – The
Bureau of Labor Relations and the Labor
Relations Division in the regional offices of
the Department of Labor shall have original
and exclusive authority to act, at their own
initiative or upon request of either or both
parties, on all inter-union and intra-union
conflicts, and all disputes, grievances or
problems arising from or affecting labor-
management relations in all workplaces
whether agricultural or nonagricultural,
except those arising from the
implementation or interpretation of collective
bargaining agreements which shall be the
subject of grievance procedure and/or
voluntary arbitration. The Bureau shall have
fifteen (15) working days to act on labor
cases before it, subject to extension by
agreement of the parties. It is quite clear
from this provision that BLR has the original

and exclusive jurisdiction on all inter-union
and intra-union conflicts. An intra-union
conflict would refer to a conflict within or
inside a labor union, and an inter-union
controversy or dispute, one occurring or
carried on between or among unions. The
subject of the case at bar, which is the
election of the officers and members of the
board of KMKK-MWSS, is, clearly, an intra-
union conflict, being within or inside a labor
union. It is well within the powers of the BLR
to act upon. The petitioner is asking us to
make an illogical edict by declaring that our
ruling in the ACAE case, considering that it
involved an inter-union conflict, should not
apply to the instant case for the reason that
the latter involves an intra-union conflict.
This, we cannot do because the law is very
clear on this matter.
11
| Labor Relations-2A
CASTRO
PAMANTASAN NG LUNGSOD NG
MAYNILA V. CIVIL SERVICE
COMMISSION
G.R. No. 107590, February 21, 1995
FACTS:
The 16 individual private
respondents were full-time instructors of
PLM under "temporary contracts" of
employment renewable on a yearly basis.
They joined the Pamantasan ng Lungsod ng
Maynila Faculty Organization. Uniform
notices of termination were individually sent
to private respondents informing them of the
expiration of their temporary appointments
and the non-renewal of their appointments
for the school year (SY) 1990-1991. A
series of letter-complaints addressed to the
CSC by private respondents evoked a
letter-response from PLM, traversing the
complainants' right to compel a renewal of
the appointments. They were advised that
their retention was not recommended by
their respective Deans. Private
respondents, through PLMFO, filed with the
CSC a verified complaint for illegal
dismissal and unfair labor practice against
petitioner and its officers. Public respondent
CSC referred the case to the Public Sector
Labor-Management Council. The latter
found petitioner guilty of unfair labor
practice and held that private respondents
should be reinstated. CSC sustained the
findings of PSLMC and directed
reinstatement with back salaries of private
respondents.
ISSUE:
Whether or not petitioner is guilty of
unfair labor practice.
RULING:
Yes. Employees who hold temporary
contracts of employment may not expect
renewal of appointment as a matter of right
since the decision is a management
prerogative. However, when the exercise of
this privilege is alleged to be the means by
which management hinders unionism or

outrightly bust unions and such allegation is
supported by evidence, the act needs to be
examined and studied. Had complainants
not been among those active officers and/or
members of the PLMFO, and had their
qualifications, training, experience and
performance rating not been impressive, the
Commission would have agreed that the
termination or non-renewal of the contracts
of complainants does not constitute unfair
labor practice. Hence, there is no reason for
PLM Management to terminate the services
of these employees except to bust their
organization.
Even temporary employees enjoy
that basic right to form organization or
association for purposes not contrary to law.
PLMFO is that organization. Thus, its
members cannot be separated from the
service for the simple reason of
membership in the said organization. And
when the appointment status of these
members happens to be temporary in
nature, such becomes merely incidental and
the doctrine that temporary employees have
no security of tenure must yield or is not
applicable. When the clear intent therefore
of PLM Management in terminating the
services of these employees is to abridge
their constitutional right to self-organization,
the Commission has the duty to give them
protection and uphold their basic right. This
constitutional right of employees is superior
to the right of management not to renew the
temporary appointment of its employees.
When the exercise of discretion by the
management is calculated to bust the union
as what PLM Management had done, the
Commission has no choice but to declare it
as a grave abuse of discretion.
12
| Labor Relations-2A
DELAROSA-REID
UNITED PEPSI-COLA SUPERVISORY
UNION (UPSU), petitioner, vs. HON.
BIENVENIDO E. LAGUESMA and PEPSI-
COLA PRODUCTS, PHILIPPINES,
INC. respondents.
[G.R. No. 122226. March 25, 1998]
FACTS:
Petitioner is a union of supervisory
employees. They filed a petition for
certification election on behalf of the route
managers at Pepsi-Cola Products
Philippines, Inc. However, its petition was
denied by the med-arbiter and, on appeal,
by the Secretary of Labor and Employment,
on the ground that the route managers are
managerial employees and, therefore,
ineligible for union membership pursuant to
Art. 245 of the Labor Code, which provides:
“Ineligibility of managerial employees to join
any labor organization; right of supervisory
employees. — Managerial employees are
not eligible to join, assist or form any labor
organization. Supervisory employees shall
not be eligible for membership in a labor
organization of the rank-and-file employees
but may join, assist or form separate labor
organizations of their own.”
Petitioner brought this suit challenging the
validity of the order of the Secretary of
Labor and Employment. Its petition was
dismissed by the Third Division for lack of
showing that respondent committed grave
abuse of discretion. But petitioner filed a
motion for reconsideration, pressing for
resolution its contention that the first
sentence of Art. 245 of the Labor Code, so
far as it declares managerial employees to
be ineligible to form, assist or join unions,
contravenes the constitution which provides
in Art. III, Section 8 that:
The right of the people, including those
employed in the public and private sectors,
to form unions, associations, or societies for
purposes not contrary to law shall not be
abridged.

Citing the Court’s ruling in Nasipit Lumber
Co. v. National Labor Relations
Commission, petitioner argues that previous
administrative determinations of the NLRC
do not have the effect of res judicata in this
case, because “labor relations proceedings”
are “non-litigious and summary in nature
without regard to legal technicalities.”
ISSUE: Whether or not the route managers
at Pepsi-Cola Products Philippines, Inc. are
managerial employees
HELD: Managers constitute three levels of
a pyramid: (1) Top management; (2) Middle
Management; and (3) First-line
Management also called supervisors.
FIRST-LINE MANAGERS — The lowest
level in an organization at which individuals
are responsible for the work of others is
called first-line or first-level management.
First-line managers direct operating
employees only; they do not supervise other
managers. Examples of first-line managers
are the “foreman” or production supervisor
in a manufacturing plant, the technical
supervisor in a research department, and
the clerical supervisor in a large office. First-
level managers are often called supervisors.
MIDDLE MANAGERS — The term middle
management can refer to more than one
level in an organization. Middle managers
direct the activities of other managers and
sometimes also those of operating
employees. Middle managers’ principal
responsibilities are to direct the activities
that implement their organizations’ policies
and to balance the demands of their
superiors with the capacities of their
subordinates. A plant manager in an
electronics firm is an example of a middle
manager.
TOP MANAGERS — Composed of a
comparatively small group of executives,
top management is responsible for the
overall management of the organization. It
establishes operating policies and guides
13
| Labor Relations-2A
the organization’s interactions with its
environment. Typical titles of top managers
are “chief executive officer,” “president,” and
“senior vice-president.” Actual titles vary
from one organization to another and are
not always a reliable guide to membership
in the highest management classification.
A distinction exists between those who have
the authority to devise, implement and
control strategic and operational policies
(top and middle managers) and those
whose task is simply to ensure that such
policies are carried out by the rank-and-file
employees of an organization (first-level
managers/supervisors). What distinguishes
them from the rank-and-file employees is
that they act in the interest of the employer
in supervising such rank-and-file
employees.
“Managerial employees” may therefore be
said to fall into two distinct categories: the
“managers” per se, who compose the
former group described above, and the
“supervisors” who form the latter group.
It appears that this question was the subject
of two previous determinations by the
Secretary of Labor and Employment, in
accordance with which this case was
decided by the med-arbiter. To qualify as
managerial employee, there must be a clear
showing of the exercise of managerial
attributes under paragraph (m), Article 212
of the Labor Code as amended.
Designations or titles of positions are not
controlling. As to the route managers and
accounting manager, they are managerial
employees as their job descriptions clearly
reveal so in the case of Worker’s Alliance
Trade Union (WATU) v. Pepsi-Cola
Products Philippines, Inc.,

DELEON
FRANKLIN BAKER COMPANY V.
TRAJANO
G.R. No. 75039 January 28, 1988
Doctrine: Employees who do not
participate in policy-making but are given
ready policies to execute and standard
practices to observe are not managerial
employees.
FACTS:
Private respondent Franklin Baker
Brotherhood Association Board filed for
certification election among the office and
technical employees of petitioner company
before the Ministry of Labor and
Employment (MOLE). It alleges that
petitioner has 90 regular technical and office
employees, which group is separate and
distinct from the regular rank and file
employees and is excluded from the
coverage of the existing Collective
Bargaining Agreement.
Petitioner did not object to the holding of
such an election, but manifested that out of
the 90 employees sought to be represented
by respondent union, 74 are managerial
employees and 2 are confidential
employees, hence must be excluded from
the certification election and from the
bargaining unit that may result from such
election.
The Labor Arbiter granted the petition and
ordered for the certification election.
Petitioner appealed to the Bureau of Labor
Relations, praying that the appealed order
may be set aside and another to be issued
declaring the 74 inspectors, foremen and
supervisors as managerial employees. The
14
| Labor Relations-2A
Bureau of Labor Relations affirmed the
decision of the Labor Arbiter.
Petitioner’s Motion for Reconsideration was
denied by MOLE Director Cresencio
Trajano for lack of merit.
ISSUE:
Whether or not subject employees are
managerial employees and thus not entitled
to join the union of rank and file employees.
HELD:
NO. Art. 219 [212] (m) of the Labor Code
defines managerial employees as “one who
is vested with the powers or prerogatives to
lay down and execute management policies
and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline
employees. Supervisory employees are
those who, in the interest of the employer,
effectively recommend such managerial
actions xxx”
It will be noted, however, that in the
performance of their duties and functions
and in the exercise of their recommendatory
powers, subject employees may only
recommend, as the ultimate power to hire,
fire or suspend as the case may be, rests
upon the plant personnel manager.
The test of "supervisory" or "managerial
status" depends on whether a person
possesses authority to act in the interest of
his employer in the matter specified in
Article 212 (k) of the Labor Code and
Section 1 (m) of its Implementing Rules and
whether such authority is not merely
routinary or clerical in nature, but requires
the use of independent judgment. Thus,
where such recommendatory powers as in
the case at bar, are subject to evaluation,
review and final action by the department
 | Labor Relations-2A

heads and other higher executives of the DEL ROSARIO

company, the same, although present, are
not effective and not an exercise of PAPER INDUSTRIES CORP. VS HON.
independent judgment as required by law. LAGUESMA ET AL
GR No. 101738 April 12, 2000
Furthermore, in line with the ruling of the
Court, subject employees are not FACTS:
managerial employees because as borne by Petitioner PICOP is engaged in the
the records, they do not participate in policy manufacture of paper and timber products.
making but are given ready policies to More or less 487 of its supervisory and
execute and standard practices to observe, technical staff employees are signatory
thus having little freedom of action. members of the private respondent PICOP-
Bislig Supervisory and Technical Staff
Lastly, even if the Court regard the Employees Union (PBSTSEU) who had
employees concerned as "managerial instituted a Petition for Certification Election
employees," they can still join the union of to determine the sole and exclusive
the rank and file employees. They cannot bargaining agent of the supervisory and
however form their own exclusive union as technical staff employees of PICOP for CBA
"managerial employees" purposes. Meanwhile, other private
respondents Federation of Free Workers
(FFW) and Associated Labor Union (ALU)
filed their respective petitions for
intervention.

On September 14, 1989, Med-

Arbiter Arturo L. Gamolo issued an
Order holding of a certification election
among PICOP's supervisory and technical
staff employees in Tabon, Bislig, Surigao
del Sur, with four (4) choices, namely: (1)
PBSTSEU; (2) FFW; (3) ALU; and (4) no
union. However, during the pre-election
conference on January 18, 1990, PICOP
questioned and objected to the inclusion of
some section heads and supervisors in the
list of voters whose positions it averred were
reclassified as managerial employees in the
light of the reorganization effected by it
under its Revised Organizational Structure.
PICOP advanced the view that considering
the alleged present authority of these
section managers and unit managers to hire
and fire, they are classified as managerial

15

employees, and hence, ineligible to form or
join any labor organization.
Med-Arbiter Pura holds that the
supervisors and section heads of the
petitioner are managerial employees and
therefore excluded from the list of voters for
purposes of certification election. Upon
appeal of the unions Bienvenido E.
Laguesma, acting as the then
Undersecretary of Labor, issued the
assailed Order dated April 17, 1991 setting
aside the Order of the Med-Arbiter and
declaring that the subject supervisors and
section heads are supervisory employees
eligible to vote in the certification election.
Petitioner then sought before SC the
annulment of Hon. Laguesma’s Order.
ISSUE: Whether or not PICOP’s managerial
employees may join unions and took part on
the certification election
HELD:
Managerial employees are ranked as Top
Managers, Middle Managers and First Line
Managers. Top and Middle Managers
have the authority to devise, implement and
control strategic and operational policies
while the task of First-Line Managers is
simply to ensure that such policies are
carried out by the rank-and- file employees
of an organization. Under this distinction,
"managerial employees" therefore fall in two
(2) categories, namely, the
"managers" per se composed of Top and
Middle Managers, and the "supervisors"
composed of First-Line Managers. Thus, the
mere fact that an employee is designated
manager" does not ipso facto make him
one. Designation should be reconciled with
the actual job description of the employee,
for it is the job description that determines
the nature of employment.
16
| Labor Relations-2A
In the petition before us, a thorough
dissection of the job description of the
concerned supervisory employees and
section heads indisputably show that they
are not actually managerial but only
supervisory employees since they do not lay
down company policies. PICOP's contention
that the subject section heads and unit
managers exercise the authority to hire and
fire is ambiguous and quite misleading for
the reason that any authority they exercise
is not supreme but merely advisory in
character. Theirs is not a final determination
of the company policies inasmuch as any
action taken by them on matters relative to
hiring, promotion, transfer, suspension and
termination of employees is still subject to
confirmation and approval by their
respective superior.
Finally, considering all the foregoing, the
fact that PICOP voiced out its objection to
the holding of certification election, despite
numerous opportunities to ventilate the
same, only after respondent Undersecretary
of Labor affirmed the holding thereof, simply
bolstered the public respondents'
conclusion that PICOP raised the issue
merely to prevent and thwart the concerned
section heads and supervisory employees
from exercising a right granted them by law.
Needless to stress, no obstacle must be
placed to the holding of certification
elections, for it is a statutory policy that
should not be circumvented.

DIOLA
SAN MIGUEL CORPORATION vs.
MANDAUE PACKING PLANTS-SAN
PACKAGING PRODUCTS SAN MIGUEL
CORPORATION MONTHLIES RANK-
AND-FILE UNION FFW
G.R. No. 152356, August 16, 2005
FACTS:
Respondent union filed a petition for
certification election with the DOLE
Regional Office seeking to be certified and
to represent the permanent rank-and-file
monthly paid employees of Petitioner. The
required documents for the certification
were attached to the petition of Respondent.
Respondent submitted the same documents
to the Bureau of Labor Relations hoping that
the submission would facilitate the listing of
the respondent under the roster of
legitimate labor organizations.
Petitioner San Miguel filed a motion to
dismiss the petition for two grounds: (1) that
respondent is not included in the roster of
legitimate labor organizations based on the
certification of one of the Regional Directors
of DOLE and (2) that the Respondent has
no legal personality to file the petition for
certification election.
ISSUE: WON the Respondent has legal
personality?
RULING: YES.
The Labor Code defines a “labor
organization” as – as any union or
association of employees which exists in
whole or in part for the purpose of collective
bargaining or of dealing with employers
concerning terms and conditions of
employment; and a “legitimate labor
organization” as – any labor organization
17
| Labor Relations-2A
duly registered with the DOLE, including
any branch or local thereof.
Only legitimate labor organizations may file
a petition for certification election. Article
234 of the Labor Code enumerates the
requirements for registration of an applicant
labor organization, association in order that
such entity could acquire legal personality
and entitlement to the rights and privileges
granted by law to legitimate labor
organizations.
Although the present law in effect regarding
the procedure of applications for a
local/chapter is Department Order No. 40, it
is still Department Order No. 9 which
governs the case at bar because it was the
law in effect during the time of the filing of
this petition. Under Sec. 1, Rule VI of the
D.O. No. 9, a duly registered federation or
national union may directly create a
local/chapter by submitting to the Regional
Office or to the Bureau certain specific
documents. Sec. 3 of the same rule
provides that the local/chapter acquires
legal personality from the date of the filing of
the complete documentary requirements,
and not from the issuance of a certification
to such effect by the Regional Office or
Bureau.
In regular order, it is the federation or
national union, already in possession of
legal personality, which initiates the creation
of the local/chapter. It issues a charter
certificate indicating the creation or
establishment of the local/chapter. It then
submits this charter certificate, along with
the names of the local/chapters officers,
constitution and by-laws to the Regional
Office or Bureau. It is the submission of
these documents which vests legal
personality in the local/chapter, which is

then free to file on its own a petition for
certification election.
In this case, the federation in question, the
FFW, did not submit any of these
documentary requirements to the Regional
Office or Bureau. It did however issue a
charter certificate to the putative
local/chapter along with the other
documentary requirements to the Regional
Office, but not for the specific purpose of
creating the local/chapter, but for filing the
petition for certification election.
The peculiar circumstances in this case
allow the Court to rule that respondent
acquired the requisite legal personality
at the same time it filed the petition for
certification election. In doing so, the
Court acknowledges that the strict letter of
the procedural rule was not complied with.
However, labor laws are generally
construed liberally in favor of labor,
especially if doing so affirms the
constitutionally guaranteed right to self-
organization. True enough, there was no
attempt made by the national federation, or
the local/chapter for that matter, to submit
the enumerated documentary requirements
to the Regional Office or Bureau for the
specific purpose of creating the
local/chapter. However, these same
documents were submitted by the
local/chapter to the Regional Office as
attachments to its petition for certification
election. Under Section 3, Rule VI of
Department Order No. 9, it is the
submission of these same documents to the
Regional Office or Bureau that operates to
vest legal personality on the local/chapter.
18
| Labor Relations-2A
DIZON
METROLAB INDUSTRIES, INC. VS. HON.
ROLDAN-CONFESOR
G.R. No. 108855 February 28, 1996
FACTS:
Metro Drug Corporation Employees
Association-Federation of Free Workers
(hereinafter referred to as the Union) is a
labor organization representing the rank and
file employees of petitioner Metrolab
Industries, Inc. (hereinafter referred to as
Metrolab/MII) and also of Metro Drug, Inc.
After the CBA between the parties expired,
negotiations for new CBA ended into
deadlock. Both parties failed to settle their
dispute hence the order issued by the
Secretary of Labor and Employment, Ruben
D. Torres, that any strike or acts that might
exacerbate the situation is ceased and
ordered the parties to execute a new CBA.
Later, the petitioner moved two lay-off acts
to its rank and file employees and was
opposed by the union. Petitioner assailed
that the move was temporary and exercise
of its management prerogative.
On various dates, Metrolab recalled some of
the laid off workers on a temporary basis
due to availability of work in the production
lines.
Acting Labor Secretary Nieves Confesor,
herein public respondent, declared that the
petitioner’s act illegal and ordered
reinstatement with full backwages. He also
issued two resolution of cease and desist
stating that the move exacerbate and
caused conflict to the case at bar. Included
on the last resolution issued by the public
respondent which states that executive
secretaries are excluded from the closed-
shop provision of the CBA, not from the
bargaining unit.
A petition for certiorari seeking the
annulment of the Resolution and Omnibus
Resolution of Roldan-Confessor on grounds

that they were issued with grave abuse of
discretion and excess of jurisdiction.
ISSUES:
1. W/N public respondent Labor Secretary
committed grave abuse of discretion
and exceeded her jurisdiction in
declaring the subject layoffs instituted by
Metrolab illegal.
2. W/N Executive Secretaries must be
included as part of the bargaining unit of
rank and file employees?
RULING:
1. No. This Court recognizes the exercise of
management prerogatives and often
declines to interfere with the legitimate
business decisions of the employer.
However, this privilege is not absolute but
subject to limitations imposed by law.
The case at bench constitutes one of the
exceptions. The Secretary of Labor is
expressly given the power under the Labor
Code to assume jurisdiction and resolve
labor disputes involving industries
indispensable to national interest. The
disputed injunction is subsumed under this
special grant of authority. Art. 263 (g) of the
Labor Code specifically provides that:
xxx xxx xxx
(g) When, in his opinion, there exists
a labor dispute causing or likely to
cause a strike or lockout in an
industry indispensable to the
national interest, the Secretary of
Labor and Employment may assume
jurisdiction over the dispute and
decide it or certify the same to the
Commission for compulsory
arbitration. Such assumption or
certification 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
19
| Labor Relations-2A
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. The Secretary of
Labor and Employment or the
Commission may seek the
assistance of law enforcement
agencies to ensure compliance with
this provisionas well as with such
orders as he may issue to enforce
the same. . . . (Emphasis ours.)
That Metrolab's business is of national
interest is not disputed. Metrolab is one of
the leading manufacturers and suppliers of
medical and pharmaceutical products to the
country.
Metrolab's management prerogatives,
therefore, are not being unjustly curtailed
but duly balanced with and tempered by the
limitations set by law, taking into account its
special character and the particular
circumstances in the case at bench.
Metrolab and the Union were still in the
process of resolving their CBA deadlock
when petitioner implemented the subject
layoffs. As a result, motions and oppositions
were filed diverting the parties', attention,
delaying resolution of the bargaining
deadlock and postponing the signing of their
new CBA, thereby aggravating the whole
conflict.
We, likewise, find untenable Metrolab's
contention that the layoff of the 94 rank-and-
file employees was temporary, despite the
recall of some of the laid off workers.
If Metrolab intended the layoff of the 94
workers to be temporary, it should have
plainly stated so in the notices it sent to the
affected employees and the Department of
Labor and Employment.
2. No. Although Article 245 of the Labor
Code limits the ineligibility to join, form and
assist any labor organization to managerial
employees, jurisprudence has extended this

prohibition to confidential employees or
those who by reason of their positions or
nature of work are required to assist or act
in a fiduciary manner to managerial
employees and hence, are likewise privy to
sensitive and highly confidential records.
By recognizing the expanded scope of the
right to self-organization, our intent was to
delimit the types of employees excluded
from the close shop provision, not from the
bargaining unit, to executive secretaries
only. Otherwise, the conversion of the
exclusionary provision to one that refers to
the bargaining unit from one that merely
refers to the close shop provision would
effectively curtail all the organizational rights
of executive secretaries.
The executive secretaries of General
Manager and Management Committees
should not only be exempted from the
closed-shop provision but should not be
permitted to join in the bargaining unit of the
rank and file employees as well as on the
grounds that the executive secretaries are
confidential employees, having access to
“vital labor information”
As stated in several cases, confidential
employees are prohibited and disqualified to
join any bargaining unit since the very
nature of the fuction are to assist and act in
a confidential capacity, or to have access to
confidential matters of, person who exercise
managerial fuctions in the field of labor
relations.
Finally, confidential employees cannot be
classified as rank and file from the very
nature of their work. Excluding confidential
employees from the rank and file of
bargaining unit, therefore is not tantamount
to discrimination.
Therefore, executive secretaries of
petitioners’ General Manager and its
Management Committee are permanently
excluded from the bargaining unit of
petitioner’s rank and file employees.
20
| Labor Relations-2A
DOÑA
MANILA ELECTRIC COMPANY v.
SECRETARY OF LABOR LEONARDO
QUISUMBING and MERALCO
EMPLOYEES AND WORKERS
ASSOCIATION (MEWA)
G.R. No. 127598 January 27, 1999
FACTS:
MERALCO seeks to annul the
orders of the Secretary of labor wherein the
Secretary required MERALCO and MEWA,
the duly recognized labor organization of
the rank-and-file employees of MERALCO,
to execute a CBA as t0 re-negotiate the
terms and conditions of their existing 1992-
1997 Collective Bargaining Agreement
(CBA) covering the remaining period of two
years. That when the negotiating panels of
MERALCO and MEWA failed to arrive at
terms and conditions acceptable to both of
them, MEWA filed a Notice of Strike with the
NCMB-NCR on the grounds of bargaining
deadlock and unfair labor practices. The
NCMB then conducted a series of
conciliation meetings but the parties failed
to reach an amicable settlement.
The Labor Secretary granted the
petition of MERALCO to assume jurisdiction
over the labor dispute and to enjoin the
striking employees to go back to work.
Consequently, the Secretary resolved the
labor dispute and awarded various
economic demands, wages and benefits in
favor of MEWA. MERALCO filed a motion
for reconsideration alleging that the
Secretary of Labor did not properly
appreciate the effect of the awarded wages
and benefits on MERALCOs financial
viability. The union disputes the allegation of
MERALCO that the Secretary abused his
discretion in issuing the assailed orders.

RULING:
The Secretary of Labor’s statutory
power to assume jurisdiction over a labor
dispute in an industry indispensable to the
national interest, and, to render an award on
compulsory arbitration, does not exempt the
exercise of this power from the judicial
review. It is the duty of the courts to
determine whether or not there has been a
grave abuse of discretion amounting to lack
or excess of jurisdiction on the part of any
branch or instrumentality of the government.
This Court may review the substance of the
Secretary’s award when grave abuse of
discretion is alleged to exist in the award,
i.e., in the appreciation of and the
conclusions the Secretary drew from the
evidence presented.
The union posits that no reviewable
abuse of discretion could have attended the
Secretary’s arbitral award because the
Secretary complied with constitutional
norms in rendering the dispute award
including the obligation of the State to
protect workers, both organized and
unorganized. Every legal power of the
Secretary of Labor under the Labor Code
that is attended by grave abuse of discretion
is subject to review by the Court, particularly
when constitutional norms are cited as the
applicable yardsticks since this Court is the
final interpreter of the meaning and intent of
the Constitution.
In consideration of the parties’
positions and the evidence on record, the
Secretary of Labor disregarded and
misappreciated evidence, particularly with
respect to the wage award. The Court
emphasizes that a collective bargaining
dispute such as this one requires due
consideration and proper balancing of the
21
| Labor Relations-2A
interests of the parties to the dispute and
of those who might be affected by the
dispute. The best way in approaching this
task holistically is to consider the available
objective facts, including, where applicable,
factors such as the bargaining history of the
company, the trends and amounts of
arbitrated and agreed wage awards and the
company’s previous CBAs, and industry
trends in general. As a rule, affordability or
capacity to pay should be taken into
account but cannot be the sole yardstick in
determining the wage award, especially in a
public utility like MERALCO. In considering
a public utility, the decision maker must
always take into account the public interest
aspects of the case; MERALCOs income
and the amount of money available for
operating expenses - including labor costs -
are subject to State regulation.
SCOPE OF THE BARGAINING UNIT
The union is demanding that the
collective bargaining unit shall be composed
of all regular rank and file employees hired
by the company in all its offices and
operating centers through its franchise and
those it may employ by reason of
expansion, reorganization or as a result of
operational exigencies. The law is that only
managerial employees are excluded from
any collective bargaining unit and
supervisors are now allowed to form their
own union (Art. 254 of the Labor Code as
amended by R.A. 6715). The Court grants
the union demand.
We have established on the
exclusion of confidential employees from
the rank and file bargaining unit. In Pier 8
Arrastre vs. Confesor and General Maritime
and Stevedore Union, we ruled that: Put
another way, the confidential employee
does not share in the same community of
 | Labor Relations-2A

interests that might otherwise make him
eligible to join his rank and file co-workers,
precisely because of a conflict in those
interest. Thus, in Metrolab Industries vs.
Roldan-Confesor, We ruled: ...that the
Secretary’s order should exclude the
confidential employees from the regular
rank and file employees qualified to become
members of the MEWA bargaining unit.
Hence, employees holding a confidential
position are prohibited from joining the
union of the rank and file employees.
UNION REPRESENTATION IN
COMMITTEES
Article 211 (A)(g) of the Labor Codes
provides: To ensure the participation of
workers in decision and policy-making
processes affecting their rights, duties and
welfare. Denying this opportunity to the
Union is to lay the claim that only
management has the monopoly of ideas
that may improve management strategies in
enhancing the Company’s growth. What
every company should remember is that
there might be one among the Union
members who may offer productive and
viable ideas on expanding the Company’s
business horizons.
nature of a co-management control of the
business of MERALCO. What is granted by
the Secretary
is participation and representation. Thus,
there is no impairment of management
prerogatives.
CHECK OFF OF UNION DUES
In any increase of union dues or
contributions for mandatory activities, the
union must submit to the Company a copy
of its board resolution increasing the union
dues or authorizing such contributions. If a
board resolution is submitted, the Company
shall deduct union dues from all union
members after a majority of the union
members have submitted their individual
written authorizations. Only those check-off
authorizations submitted by the union shall
be honored by the Company. With respect
to special assessments, attorney’s fees,
negotiation fees or any other extraordinary
fees, individual authorizations shall be
necessary before the company may so
deduct the same.

All the Union demands and what the

Secretary’s order granted is that the Union
be allowed to participate in policy
formulation and decision-making process on
matters affecting the Union members right,
duties and welfare as required in Article 211
(A)(g) of the Labor Code. And this can only
be done when the Union is allowed to have
representatives in the Safety Committee,
Uniform Committee and other committees of
a similar nature and purpose involving
personnel welfare, rights and benefits as
well as duties. Such participation by the
Union in the said committees is not in the

22
 | Labor Relations-2A

DUQUILLA capacity, (2) to persons who formulate,

determine, and effectuate management
policies in the field of labor relations. The
SAN MIGUEL CORP. UNION vs.
exclusion from bargaining units of
LAGUESMA
employees who, in the normal course of
G.R. No. 110399 August 15, 1997
their duties, become aware of management
policies relating to labor relations is a
FACTS:
principal objective sought to be
Petitioner union filed before the DOLE a
accomplished by the ''confidential employee
petition for Direct Certification or
rule." The broad rationale behind this rule is
Certification Election among the supervisors
that employees should not be placed in a
and exempt employees of the SMC
position involving a potential conflict of
Magnolia Poultry Products Plants of
interests.
Cabuyao, San Fernando and Otis. An Order
issued by Undersecretary Laguesma,
Here, supervisors 3 and above may
excluded the employees under supervisory
not be considered confidential employees
levels 3 and 4 and the so-called exempt
merely because they handle "confidential
employees from the proposed bargaining
data". The information they handle are
unit and ruled out their participation in the
properly classifiable as technical and
certification election because they were
internal business operations data, relating to
admittedly confidential employees who, like
product formulation, product standards and
managerial employees, are not allowed to
product specification, which by no means
form, join or assist a labor union for
relate to labor relations. Since the
purposes of collective bargaining. Moreover,
employees are not classifiable under the
Laguesma directed the conduct of separate
confidential type, they may appropriately
certification elections in each of the three
form a bargaining unit for purposes of
plants.
collective bargaining.

ISSUES:
(2) Yes, the employees of the plants of
(1) Whether or not Supervisory
Cabuyao, San Fernando and Otis shall be
employees 3 and 4 and the exempt
recognized as one bargaining unit.
employees of the company are
considered confidential employees,
A unit to be appropriate must effect
hence ineligible from joining a union.
a grouping of employees who have
(2) Whether or not the employees of the
substantial, mutual interests in wages,
three plants constitute an appropriate
hours, working conditions and other
single bargaining unit.
subjects of collective bargaining. It is readily
seen that the employees in the instant case
HELD:
have "community or mutuality of interests,"
(1) No, said employees do not fall within the
which is the standard in determining the
term “confidential employees” who may
proper constituency of a collective
be prohibited from joining a union.
bargaining unit. It is undisputed that they all
belong to the Magnolia Poultry Division of
Confidential employees are those
San Miguel Corporation. This means that,
who (1) assist or act in a confidential

23
 | Labor Relations-2A

although they belong to three different EISMA

plants, they perform work of the same
nature, receive the same wages and SUGBUANON RURAL BANK, INC. vs.
compensation, and most importantly, share Usec. BIENVENIDO LAGUESMA
a common stake in concerted activities. G.R. No. 116194 February 2, 2000

When the employee does not have access

to confidential labor relations information,
there is no legal prohibition against
confidential employees from forming,
assisting, or joining a union.

FACTS:
Petitioner is a duly-registered banking
institution in Cebu, while private respondent
APSOTEU-TUCP was a labor organization
duly-registered with the Labor Department.
APSOTEU filed a petition for certification
election of the 5 supervisory employees.
SRBI filed a motion to dismiss the union's
petition on two grounds. First, that the
members of union were in fact managerial
or confidential employees and were to be
disqualified from forming or joining unions.
Second, the Association of Labor Unions-
TUCP was representing the union. Since
ALU-TUCP also sought to represent the
rank-and-file employees of SRBI, there was
a violation of the principle of separation of
unions. The union argued that its members
were not managerial employees but merely
supervisory employees.

Med-Arbiter: denied petitioner's motion to

dismiss.
Secretary of Labor and Employment: same
was denied.
DOLE Undersecretary: denied SRBI's
appeal.

ISSUE: WON the members of the

respondent union are
managerial/confidential employees, hence
prohibited by law from joining labor
organizations and engaging in union
activities.

24

HELD: No.
The petitioner bank failed to show that their
Cashiers, Accountant, and Acting Chief of
the Loans Department possessed
managerial powers and duties. At best, they
only had recommendatory powers subject to
evaluation, review, and final decision by the
bank's management. The job description
forms submitted by petitioner clearly show
that the union members in question may not
transfer, suspend, lay-off, recall, discharge,
assign, or discipline employees. Moreover,
the forms also do not indicate that said
officers could formulate and execute
management policies which are normally
expected of management officers. Neither
could the union members be treated as
confidential employees. Although the
cashier serves the bank's management, it
could not be deemed to have access to
confidential information specifically relating
to SRBI's labor relations policies.
As regards the issue on the violation of the
principle of separation of unions, records
show that respondent union was initially
assisted by ALU during its preliminary
stages. A local union maintains its separate
personality despite affiliation with a larger
national federation. APSOTEU-TUCP had
separate legal personality from ALU and
TUCP.
The law frowns on a union where the
membership is composed of both
supervisors and rank-and-file employees,
for fear that conflicts of interest may arise in
the areas of discipline, collective bargaining,
and strikes. However, in the present case,
none of the members of the respondent
union came from the rank-and-file
employees of the bank.
25
| Labor Relations-2A
FABON
DLSU vs. DLSU EMPLOYEES
ASSOCIATION (DLSUEA)
G.R. No. 109002 April 12, 2000
FACTS:
DLSU (the University) and DLSU
Employees Association—National
Federation of Teachers and Employees
Union (UNION) entered into a CBA. Before
the expiration of the CBA, the Union
initiated negotiations with the University for
a new CBA. After several conciliation-
mediation meetings, a partial CBA was
thereafter executed by the parties.
There arose an issue regarding the
propriety of the inclusion of a union shop
clause in the CBA, in addition to the existing
maintenance of membership clause.
The University avers that ". . . it is in the
spirit of the exercise of the constitutional
right to self-organization that every
individual should be able to freely choose
whether to become a member of the Union
or not. The right to join a labor organization
should carry with it the corollary right not to
join the same. This position of the University
is but in due recognition of the individual's
free will and capability for judgment." The
University assails the Union's demand for a
union shop clause as ". . . definitely unjust
and amounts to oppression. Moreover, such
a demand is repugnant to democratic
principles and the constitutionally
guaranteed freedom of individuals to join or
not to join an association as well as their
right to security of tenure, particularly, on
the part of present employees."
The Union, on the other hand, counters that
the Labor Code, as amended, recognizes

the validity of a union shop agreement in
Article 248 thereof which reads:
Art. 248. Unfair labor practices of
employers. —
xxx xxx xxx
(e) To discriminate in regard to hire or
tenure of employment or any term or
condition of employment in order to
encourage or discourage membership in
any labor organization. Nothing in this
Code or in any other law shall prevent
the parties from requiring membership in
a recognized collective bargaining agent
as a condition for employment, except of
those employees who are already
members of another union at the time of
the signing of the CBA…”
ISSUE:
W/N a union shop clause should be
included in the parties' CBA, in addition to
the existing maintenance of membership
clause in the CBA. (YES.)
HELD:
The SC ruled that there should be an
inclusion of a union shop provision in
addition to the existing maintenance of
membership clause in the CBA. A union
shop clause “is not a restriction on the
employee's right of (sic) freedom of
association but rather a valid form of union
security while the CBA is in force and in
accordance with the Constitutional policy to
promote unionism and collective bargaining
and negotiations. The parties therefore
should incorporate such union shop clause
in their CBA."
26
| Labor Relations-2A
FABON
PROGRESSIVE DEVELOPMENT
CORPORATION-PIZZA HUT vs. HON.
BIENVENIDO LAGUESMA
G.R. No. 115077 April 18, 1997
FACTS:
Nagkakaisang Lakas ng Manggagawa
(NLM)-Katipunan (respondent Union) filed a
petition for certification election with the
Department of Labor in behalf of the rank
and file employees of the Progressive
Development Corporation (Pizza Hut).
Petitioner filed a Motion to Dismiss the
petition alleging fraud, falsification and
misrepresentation in the respondent Union's
registration. Petitioner alleged, among
others, that respondent Union's registration
was tainted with false, forged, double or
multiple signatures.
Petitioner filed a Petition seeking the
cancellation of the Union's registration on
the grounds of fraud and falsification.
Motion was filed by petitioner with the Med-
Arbiter requesting suspension of
proceedings in the certification election case
until after the prejudicial question of the
Union's legal personality is determined in
the proceedings for cancellation of
registration.
However Med-Arbiter Abdullah directed
the holding of a certification election among
petitioner's rank and file employees. The
Order explained:
x x x Sumasaklaw sa
Manggagawa ng Pizza Hut is a
legitimate labor organization in
contemplation of law and shall
remain as such until its very
charter certificate is canceled or
otherwise revoked by competent
authority. The alleged
misrepresentation, fraud and false
statement in connection with the
issuance of the charter certificate

are collateral issues which could
be properly ventilated in the
cancellation proceedings.
ISSUE: W/N after the necessary papers and
documents have been filed by a labor
organization, recognition by the Bureau of
Labor Relations merely becomes a
ministerial function. (NO.)
HELD:
Art. 234. Requirements of registration. - Any
applicant labor organization, association or
group of unions or workers shall acquire
legal personality and shall be entitled to the
rights and privileges granted by law to
legitimate labor organizations upon
issuance of the certificate of registration
based on the following requirements:
(a) P50.00 registration fee; (b) The
names of its officers, their
addresses, the principal address
of the labor organization, the
minutes of the organizational
meetings and the list of the
workers who participated in
such meetings; (c) The names
of all its members comprising at
least twenty percent (20%) of all
the employees in the bargaining
unit where it seeks to operate;
(d) If the applicant union has
been in existence for one or
more years, copies of its annual
financial reports; and (e) 4
copies of the constitution and
by-laws of the applicant union,
minutes of its adoption or
ratification, and the list of the
members who participated in it.
The requirements are intended as
preventive measures against the
commission of fraud. After a labor
organization has filed the papers and
documents for registration, it becomes
mandatory for the Bureau of Labor
Relations to check if the requirements under
Article 234 have been complied with. If its
27
| Labor Relations-2A
application for registration is vitiated by
falsification and serious irregularities,
especially those appearing on the face of
the application and the supporting
documents, a labor organization should be
denied recognition as a legitimate labor
organization. And if a certificate of
recognition has been issued, the propriety
of the labor organization's registration could
be assailed directly through cancellation of
registration proceedings in accordance with
Articles 238 and 239 of the Labor Code, or
indirectly, by challenging its petition for the
issuance of an order for certification
election.
Registration requirements specifically
afford a measure of protection to
unsuspecting employees who may be lured
into joining unscrupulous or fly-by-night
unions whose sole purpose is to control
union funds or use the labor organization for
illegitimate ends. Such requirements are a
valid exercise of the police power, because
the activities in which labor organizations,
associations and unions of workers are
engaged directly affect the public interest
and should be protected.
The employer needs the assurance that
the union it is dealing with is a bona fide
organization, one which has not submitted
false statements or misrepresentations to
the Bureau. Clearly, fraud, falsification and
misrepresentation in obtaining recognition
as a legitimate labor organization are
contrary to the Med-Arbiter’s conclusion not
merely collateral issues. The invalidity of
respondent Union’s registration would
negate its legal personality to participate in
certification election.
Once a labor organization attains the
status of a legitimate labor organization it
begins to possess all of the rights and
privileges granted by law to such
organizations.
Inasmuch as the legal personality of
respondent Union had been seriously
challenged, it would have been more

prudent for the Med-Arbiter and public
respondent to have granted petitioner's
request for the suspension of proceedings
in the certification election case, until the
issue of the legality of the Union's
registration shall have been
resolved. Failure of the Med-Arbiter and
public respondent to heed the request
constituted a grave abuse of discretion.
28
| Labor Relations-2A
FAJARDO
JOHNSON AND JOHNSON LABOR
UNION-FFW, ET. AL. vs
DIRECTOR OF LABOR RELATIONS AND
OSCAR PILI
G.R. No. 76427 February 21, 1989
FACTS:
Private respondent Oscar Pili was
dismissed from his employment for violation
of company policy, which is for non-
disclosure in his job application form of the
fact that he had a relative in the company.
Upon his dismissal, Pili opt to receive the
financial aid under the By-Laws of petitioner
union. Financial aid is afforded to union
members who have been suspended or
terminated from work without reasonable
cause.
Petitioner union refused to give Pili
the financial aid, it alleged that the union’s
executive board has the prerogative to
determine whether or not the dismissal was
for a reasonable cause or not. They ruled,
together with the general membership, not
to extend financial aid to Pili.
Meanwhile, Pili filed a case for illegal
dismissal against his employer.
Pili also filed a complaint against
petitioner union with the Med-Arbiter which
ordered the union to pay Pili the
corresponding financial aid in case the
complaint for illegal dismissal was ruled in
Pili’s favour provided that if it is decided
otherwise, the union will be absolved in its
obligations.
The union assailed the said order
positing that the Med-Arbiter, in granting the

financial aid, has substituted its decision on
whether or not the dismissal is reasonable
ISSUE:
Whether or not the public
respondent committed grave abuse of
discretion in substituting the decision of
petitioner-union.
HELD:
NO.
A union’s constitution is covenant
between the union and its members. There
is nothing in the constitution which leaves
the legal interpretation of its terms
unilaterally to the union or its officers or
even the general membership. Hence, the
union’s own interpretation that
reasonableness of dismissal is the
prerogative of union’s executive board is
untenable.
The union’s constitution or by-laws
will clearly show that a member who is
suspended or terminated from employment
without reasonable cause is entitled to
financial assistance. However, the same by-
laws do not indicate which body has the
power to determine whether a suspension
or dismissal is for reasonable cause or not.
There can be no doubt that the by-laws
silence on this matter is a clear recognition
of the labor arbiter’s exclusive jurisdiction
over dismissal cases.
To wit, whether or not one is entitle
to the financial aid, depends on the result of
the dismissal case filed before the proper
government agency.
29
| Labor Relations-2A
FERRER
PHILIPPINE SKYLANDERS, INC.,
MARILES C. ROMULO and FRANCISCO
DAKILA vs. NATIONAL LABOR
RELATIONS COMMISSION, LABOR
ARBITER EMERSON TUMANON,
PHILIPPINE ASSOCIATION OF FREE
LABOR UNIONS (PAFLU) SEPTEMBER
(now UNIFIED PAFLU) and SERAFIN
AYROSO
[G.R. No. 127374. January 31, 2002]
Facts:
In November 1993 the Philippine
Skylanders Employees Association (PSEA),
a local labor union affiliated with the
Philippine Association of Free Labor Unions
(PAFLU) September (PAFLU), won in the
certification election conducted among the
rank and file employees of Philippine
Skylanders, Inc. (PSI). Its rival union,
Philippine Skylanders Employees
Association-WATU (PSEA-WATU)
immediately protested the result of the
election before the Secretary of Labor.
Several months later, pending settlement of
the controversy, PSEA sent PAFLU a notice
of disaffiliation citing as reason PAFLU's
supposed deliberate and habitual dereliction
of duty toward its members. Attached to the
notice was a copy of the resolution adopted
and signed by the officers and members of
PSEA authorizing their local union to
disaffiliate from its mother federation.
PSEA subsequently affiliated itself with the
National Congress of Workers (NCW),
changed its name to Philippine Skylanders
Employees Association - National Congress
of Workers (PSEA-NCW), and to maintain
continuity within the organization, allowed
the former officers of PSEA-PAFLU to
continue occupying their positions as
elected officers in the newly-forged PSEA-
NCW. On 17 March 1994 PSEA-NCW
entered into a collective bargaining
agreement with PSI which was immediately
registered with the Department of Labor and
Employment.

Meanwhile, apparently oblivious to PSEA's
shift of allegiance, PAFLU Secretary
General Serafin Ayroso wrote Mariles C.
Romulo requesting a copy of PSI's audited
financial statement. Ayroso explained that
with the dismissal of PSEA-WATUs election
protest the time was ripe for the parties to
enter into a collective bargaining
agreement. On 30 July 1994 PSI through its
personnel manager Francisco Dakila denied
the request citing as reason PSEA's
disaffiliation from PAFLU and its
subsequent affiliation with NCW.
Agitated by PSI's recognition of PSEA-
NCW, PAFLU through Serafin Ayroso filed a
complaint for unfair labor practice against
PSI, its president Mariles Romulo and
personnel manager Francisco Dakila.
PAFLU alleged that aside from PSIs refusal
to bargain collectively with its workers, the
company through its president and
personnel manager, was also liable for
interfering with its employees' union
activities. Two days later or on 6 October
1994 Ayroso filed another complaint in
behalf of PAFLU for unfair labor practice
against Francisco Dakila. Through Ayroso
PAFLU claimed that Dakila was present in
PSEA's organizational meeting thereby
confirming his illicit participation in union
activities. Ayroso added that the members
of the local union had unwittingly fallen into
the manipulative machinations of PSI and
were lured into endorsing a collective
bargaining agreement which was
detrimental to their interests. The two (2)
complaints were thereafter consolidated.
PSI, its president Mariles C. Romulo, and its
personnel manager Dakila moved for the
dismissal of the complaint on the ground
that the issue of disaffiliation was an inter-
union conflict which lay beyond the
jurisdiction of the Labor Arbiter. On the
other hand, PSEA-NCW took the cudgels
for its officers who were being sued in their
capacities as former officers of PSEA-
PAFLU and asserted that since PSEA was
no longer affiliated with PAFLU, Ayroso or
PAFLU for that matter had no personality to
30
| Labor Relations-2A
file the instant complaint. In support of this
assertion, PSEA-NCW submitted in
evidence a Katunayan signed by 111 out of
120 rank and file employees of PSI
disauthorizing Ayroso or PAFLU from
instituting any action in their behalf.
In a Decision rendered on 30 June 1995 the
Labor Arbiter declared PSEA's disaffiliation
from PAFLU invalid and held PSI, PSEA-
PAFLU and their respective officers guilty of
unfair labor practice. The Decision
explained that despite PSEA-PAFLU's
status as the sole and exclusive bargaining
agent of PSI's rank and file employees, the
company knowingly sanctioned and
confederated with Dakila in actively
assisting a rival union. This, according to
the Labor Arbiter, was a classic case of
interference for which PSI could be held
responsible. As PSEA-NCW's personality
was not accorded recognition, its collective
bargaining agreement with PSI was struck
down for being invalid. Ayroso's legal
personality to file the complaint was
sustained on the ratiocination that under the
Labor Code no petition questioning the
majority status of the incumbent bargaining
agent shall be entertained outside of the
sixty (60)-day period immediately before the
expiry date of such five (5)-year term of the
collective bargaining agreement that the
parties may enter into. Accordingly,
judgment was rendered ordering PSI,
PSEA-PAFLU and their officers to pay
PAFLU P150,000.00 in damages.
PSI, PSEA and their respective officers
appealed to the National Labor Relations
Commission (NLRC). But the NLRC upheld
the Decision of the Labor Arbiter and
conjectured that since an election protest
questioning PSEA-PAFLU's certification as
the sole and exclusive bargaining agent was
pending resolution before the Secretary of
Labor, PSEA could not validly separate from
PAFLU, join another national federation and
subsequently enter into a collective
bargaining agreement with its employer-
company.

In the current petitions, petitioner PSEA
together with its officers argued that by
virtue of their disaffiliation PAFLU as a mere
agent had no authority to represent them
before any proceedings. They further
asserted that being an independent labor
union PSEA may freely serve the interest of
all its members and readily disaffiliate from
its mother federation when circumstances
so warrant. This right, they averred, was
consistent with the constitutional guarantee
of freedom of association.
For their part, petitioners PSI, Romulo and
Dakila alleged that their decision to bargain
collectively with PSEA-NCW was actuated,
to a large extent, by PAFLU's behavior.
Having heard no objections or protestations
from PAFLU relative to PSEA's disaffiliation,
they reckoned that PSEA's subsequent
association with NSW was done bona fide.
The Solicitor General filed a Manifestation in
Lieu of Comment recommending that both
petitions be granted. In his Manifestation,
the Solicitor General argued against the
Labor Arbiter's assumption of jurisdiction
citing the following as reasons: first, there
was no employer-employee relationship
between complainant Ayroso and PSI over
which the Labor Arbiter could rightfully
assert his jurisdiction; second, since the
case involved a dispute between PAFLU as
mother federation and PSEA as local union,
the controversy fell within the jurisdiction of
the Bureau of Labor Relations; and lastly,
the relationship of principal-agent between
PAFLU and PSEA had been severed by the
local union through the lawful exercise of its
right of disaffiliation.
Issue:
Whether or not PSEA, which is an
independent and separate local union,
validly disaffiliate from PAFLU pending the
settlement of an election protest questioning
its status as the sole and exclusive
bargaining agent of PSI's rank and file
employees
31
| Labor Relations-2A
Held:
Yes, a local union can validly disaffiliate
from its mother union as a matter of right,
even pending an election protest of its
status. The finding of Unfair Labor Practice
by NLRC and Labor Arbiter against PSI was
reversed and set aside.
At the outset, let it be noted that the issue of
disaffiliation is an inter-union conflict the
jurisdiction of which properly lies with the
Bureau of Labor Relations (BLR) and not
with the Labor Arbiter. Nonetheless, with
due recognition of this fact, SC deemed it
proper to settle the controversy at this
instance since to remand the case to the
BLR would only mean intolerable delay for
the parties.
The right of a local union to disaffiliate from
its mother federation is not a novel thesis
unillumined by case law. In the landmark
case of Liberty Cotton Mills Workers Union
vs. Liberty Cotton Mills, Inc. SC upheld the
right of local unions to separate from their
mother federation on the ground that as
separate and voluntary associations, local
unions do not owe their creation and
existence to the national federation to which
they are affiliated but, instead, to the will of
their members. The sole essence of
affiliation is to increase, by collective action,
the common bargaining power of local
unions for the effective enhancement and
protection of their interests. Admittedly,
there are times when without succor and
support local unions may find it hard,
unaided by other support groups, to secure
justice for themselves.
Yet the local unions remain the basic units
of association, free to serve their own
interests subject to the restraints imposed
by the constitution and by-laws of the
national federation, and free also to
renounce the affiliation upon the terms laid
down in the agreement which brought such
affiliation into existence.
Upon an application of the aforecited
principle to the issue at hand, the
impropriety of the questioned Decisions
 | Labor Relations-2A

becomes clearly apparent. There is nothing
shown in the records nor is it claimed by
PAFLU that the local union was expressly
forbidden to disaffiliate from the federation
nor were there any conditions imposed for a
valid breakaway. As such, the pendency of
an election protest involving both the mother
federation and the local union did not
constitute a bar to a valid disaffiliation.
Neither was it disputed by PAFLU that 111
signatories out of the 120 members of the
local union, or an equivalent of 92.5% of the
total union membership supported the claim
of disaffiliation and had in fact disauthorized
PAFLU from instituting any complaint in
their behalf. Surely, this is not a case where
one or two members of the local union
decided to disaffiliate from the mother
federation, but it is a case where almost all
local union members decided to disaffiliate.
dismissed at the first instance for failure to
state a cause of action.
Policy considerations dictate that in
weighing the claims of a local union as
against those of a national federation, those
of the former must be preferred.
Parenthetically though, the desires of the
mother federation to protect its locals are
not altogether to be shunned. It will however
be to err greatly against the Constitution if
the desires of the federation would be
favored over those of its members. That, at
any rate, is the policy of the law. For if it
were otherwise, instead of protection, there
would be disregard and neglect of the lowly
workingmen.

It was entirely reasonable then for PSI to

enter into a collective bargaining agreement
with PSEA-NCW. As PSEA had validly
severed itself from PAFLU, there would be
no restrictions which could validly hinder it
from subsequently affiliating with NCW and
entering into a collective bargaining
agreement in behalf of its members.
There is a further consideration that likewise
argues for the granting of the petitions. It
stands unchallenged that PAFLU instituted
the complaint for unfair labor practice
against the wishes of workers whose
interests it was supposedly protecting. The
mere act of disaffiliation did not divest PSEA
of its own personality; neither did it give
PAFLU the license to act independently of
the local union. Recreant to its mission,
PAFLU cannot simply ignore the demands
of the local chapter and decide for its
welfare. PAFLU might have forgotten that
as an agent it could only act in
representation of and in accordance with
the interests of the local union. The
complaint then for unfair labor practice
lodged by PAFLU against PSI, PSEA and
their respective officers, having been filed
by a party which has no legal personality to
institute the complaint, should have been

32
 | Labor Relations-2A

ISSUE: W/N the local union’s declaration of

HADLOC
MALAYANG SAMAHAN NG MGA
MANGGAGAWA SA GREENFIELD v.
RAMOS
G.R. No. 113907 February 28, 2000
FACTS:
Petitioner MSMG, a local union, is
an affiliate of private respondent United
Lumber and General Workers of the
Philippines (the federation). In the Union
Security Clause included in the CBA
between the local union and the federation
on one hand, and respondent company M.
Greenfield Company Inc. on the other hand,
it is provided that:
xxx xxx xxx
Any…employee …who fails to maintain his
membership in the UNION for non-payment
of UNION dues, for resignation and for
violation of UNION's Constitution and By-
Laws and any new employee …shall upon
written notice of such failure to join or to
maintain membership in the UNION and
upon written recommendation to the
COMPANY by the UNION, be dismissed
from the employment by the COMPANY…
xxx xxx xxx
local autonomy is an act of disloyalty which
warrants their disassociation from the union
resulting in the employees’ valid termination
from employment.
RULING: No.
A local union, being a separate and
voluntary association, is free to serve the
interests of all its members including the
freedom to disaffiliate or declare its
autonomy from the federation to which it
belongs when circumstances warrant, in
accordance with the constitutional
guarantee of freedom of association. The
purpose of affiliation by a local union with a
mother union or a federation is to increase
by collective action the bargaining power in
respect of the terms and conditions of labor.
Thus, a local union which has affiliated itself
with a federation is free to sever such
affiliation anytime and such disaffiliation
cannot be considered disloyalty. In the
absence of specific provisions in the
federation's constitution prohibiting
disaffiliation or the declaration of autonomy
of a local union, a local may dissociate with
its parent union. ULGWP's constitution then
does not have such provision.

The merits of this case commenced

when 30 employees (petitioners) were
terminated by respondent company without
a prior administrative investigation following
the demand of the federation that they be
terminated. The federation alleged that the
petitioners committed acts of disloyalty
when it "undertook to disaffiliate from the
federation and declared autonomy; wherein
they prohibited the federation from
interfering in any internal and external
affairs of the local union’; and hence,
pursuant to the Union Security Clause, the
Company ought to terminate their
employment.

33

LEANO
ASSOCIATED WORKERS UNION-
PTGWO vs. NLRC
G.R. No. 87266-69 July 30, 1990
MANILA PORT SERVICES, INC., vs. Hon.
Arthur Amansec et.al
G.R. Nos. 91223-26 JULY 30, 1990
FACTS:
Petitioner, the then bargaining
representative of the dockworkers at South
Harbor, Port Area, Manila, filed a Notice of
Strike against respondent Metro Port
Service, Inc., the then arrastre contractor in
the South Harbor, on the issues, among
others, of unfilled vacancies and union
busting (NLRC Case No. NCR-NS-10-288-
84). Minsitry of Labor and Employement
ordered for the compulsary arbitration to the
NLRC and forbade the holding of strikes or
lock-outs ( Certified NLRC Case No. 0403-
85). In the latter case, one of the demands
raised by AWU was that Metro terminate the
employment of 11 repondents for having
organized the Associated Workers Union in
Metroport ("AWUM"). Metro initially resisted
AWU’s request by reason of due proces.
However, Metro eventually suspended
individual respondents after AWU staged a
strike against it, despite the express
prohibition in the Order. To end the strike,
Metro executed an Agreement with AWU.
As a result of Metro’s implementation of the
Agreement, individual respondents filed a
complaint against Metro (NLRC Case No.
NCR-4-1372-85) . Labor Arbiter Diosana in
an Order directed Metro provisionally to
reinstate individual respondents pending
resolution of the issues raised therein, with
which Order Metro complied.
All the above-mentioned cases were
ordered consolidated before the NLRC en
banc. NLRC rendered a consolidated
Decision. The NLRC ruled that that AWU
was a national union, and that individual
respondents have the right to organize
themselves into a local chapter thereof, the
34
| Labor Relations-2A
formation of which was a protected activity
and could not be considered as disloyalty,
held the suspension or dismissal of
individual respondents as illegal and
ordered their reinstatement with backwages,
to be paid solidarily by AWU and
respondent Metro. The NLRC also found
taht the strike staged by AWU is not illegal,
holding that AWU was of the belief,
although erroneously, that it could validly
stage a strike during the pendency of its
motion for reconsideration of the Minister's
Order enjoining a strike or lockout.
Both AWU and Metro filed separate motions
for reconsideration of the consolidated
Decision. Meanwhile, petitioner Marina Port
Services, Inc., started operations as the
arrastre operator at the Manila South
Harbor vice Metro. The NLRC in a
Resolution denied AWU's and Metro's
motions for reconsideration and
ordered Marina to reinstate individual
respondents with backwages and
allowances Marina complied with the
Resolution by reinstating individual
respondents
AWU thereafter in G.R. Nos. 87266-69 filed
with the Court a Petition for certiorari
praying for the reversal of the order holding
that Metro could not be compelled to fill up
vacancies with AWU’s recommendees and
of the order reinstating the 11 private
respondents to their former positions with
backwages payable solidarily by AWU and
respondent Metro.
Marina, meantime, had gone to the Court,
protesting, on grounds of alleged denial of
due process, its inclusion by the NLRC as a
party and its being required to reinstate
individual respondents with backwages.
Metro also went to the court again and
claimed that it should not have been held
solidary liable with AWU because it had
merely suspended individual respondents
pursuant to the Agreement it had executed
with AWU. These cases were dismissed by
the Court and were remanded to the LA of
origin for execution. The LA issued a writ of

execution against Marina to reinstate
individual respondents and to pay them the
salary adjustments. Marina then once more
went to the Court in G.R. Nos. 91223-26
and filed a Petition for certiorari to invalidate
the writ of execution. G.R. Nos. 91223-26
were consolidated with G.R. Nos. 87266-
69.
ISSUES:
1. WON AWU was justified in expelling its
membership the 11 individual respondents.
2. WON Metro and Marina should be held
solidary liable with AWU for the payment of
backwages.
HELD:
1. YES. AWU was justified in expelling
from its membership the 11 individual
respondents.
AWUM as a local union, being an entity
separate and distinct from AWU, is free to
serve the interest of all its members and
enjoys the freedom to disaffiliate, such right
to disaffiliate may be exercised, and is thus
considered a protected labor activity, only
when warranted by circumstances.
Generally, a labor union may disaffiliate
from the mother union to form a local or
independent union only during the 60-day
freedom period immediately preceding the
expiration of the CBA. Even before the
onset of the freedom period, disaffiliation
may still be carried out, but must be
effected by a majority of the members in the
bargaining unit. This happens when there is
a substantial shift in allegiance on the part
of the majority of the members of the union.
In such a case, however, the CBA continues
to bind the members of the new or
disaffiliated and independent union up to the
CBA's expiration date.
The record does not show that individual
respondents had disaffiliated during the
freedom period. The record does, however,
show that only 11 members of AWU had
decided to disaffiliate from AWU and form
35
| Labor Relations-2A
AWUM. Respondent Metro had about 4,000
employees, and around 2,000 of these were
members of AWU. It is evident that
individual respondents had failed to muster
the necessary majority in order to justify
their disaffiliation. Thus, in the referendum
held at the PTGWO compound to determine
whether individual respondents should be
expelled from AWU, 1,229 members out of
1,695 members present voted for expulsion
of individual respondents. In sum, the
attempted disaffiliation of the 11 private
respondents from the petitioner mother
union and the effort to organize either a new
local of the mother union or an entirely new
and separate union, did not, under the
circumstances of this case, constitute
protected activities of the 11 individual
respondents.
2. Strictly speaking, in view of the
conclusion above that AWU was justified in
expelling individual respondents from its
membership, neither AWU nor Metro/Marina
would be liable to individual respondents for
the backwages accruing during this Second
Period.
In the interest of substantial and expeditious
justice, however, we believe that the
backwages accruing during the Second
Period should be paid and shared by AWU
and by Metro Marina, on a 50-50 basis. The
equitable considerations which impel the
Court to hold AWU liable for one-half of the
backwages during the Second Period
include:
(a) the fact that Metro had been reluctant to
comply with the demand of AWU to
terminate the services of individual
respondents and had wanted to give the
latter procedural due process, but gave in to
the demands of AWU;
(b) that AWU had pressed Metro very hard
and indeed went on strike against Metro
when Metro refused simply to terminate the
services of the individual respondents;
(c) that AWU, instead of waiting for final
judicial determination of the legality of its
expulsion of individual respondents, chose

to importune the NLRC to issue the order
requiring the re-suspension of the individual
respondents on 1 August 1985, with which
order Metro eventually complied.
The equitable considerations which lead to
hold Metro/Marina responsible for one-half
of the backwages accruing during the above
Second Period relate to the failure of Metro
to accord individual respondents procedural
due process by giving them reasonable
opportunity to explain their side before
suspending or dismissing them. Such
dismissal was accordingly in violation of the
Labor Code. Notwithstanding AWU's closed-
shop clause in the CBA, Metro was bound
to conduct its own inquiry to determine the
existence of substantial basis for
terminating the employment of individual
respondents. That AWU, disregarding the
Minister of Labor and Employment's
express order, had threatened to go on
strike, and indeed actually went on strike, if
Metro had continued with the services of
individual respondents, did not relieve Metro
from the duty to accord procedural due
process to individual respondents.
36
| Labor Relations-2A
LEONARDO
TOYOTA MOTOR PHIL. CORP vs.
TOYOTA MOTOR PHIL. CORP LABOR
UNION
G.R. No. 121084. February 19, 1997
FACTS:
On Nov. 26, 1992, Toyota Motor Phil
Corp. Labor Union (TMPCLU) filed a
petition for certification election with Dept. of
Labor, for all rank-and-file employees of the
petitioner Toyota Motor Corp. Petitioner
seek the denial of the holding of the
certification election on 2 grounds: First, the
union, being “process of registration” had no
legal personality to file the same as it was
not a legitimate labor organization at the
time the petition was file; and Second, that
the union was composed of both rank-and-
file and supervisory employees in violation
of the law. The Med-Arbiter dismissed the
petition for certification election in favor with
the grounds stated by petitioner. However,
on appeal, the Secretary of Labor set aside
the decision of the Me-Arbiter and ordered
the holding of the certification election
contending that the union was already a
legitimate labor organization at the time of
the filing of the petition evidenced by a
certificate of registration.
ISSUE:
Whether or not TMPCLU is a legitimate
labor organization that can file for petition or
certification election.
HELD:
No. TMPCLU is not a legitimate labor
organization.
The Labor Code (Art. 245) has made it
a clear statutory policy to prevent
supervisory employees from joining labor
organizations consisting of rank-and-file
employees as the concerns which involve
members of either group are normally
disparate and contradictory. A labor
organization composed of both rank-and-file
and supervisory employees is no labor
organization at all. It cannot, for any guise

or purpose, be a legitimate labor
organization. Not being one, an organization
which carries a mixture of rank-and-file and
supervisory employees cannot possess any
of the rights of a legitimate labor
organization, including the right to file a
petition for certification election for the
purpose of collective bargaining. It becomes
necessary, therefore, anterior to the
granting of an order allowing a certification
election, to inquire into the composition of
any labor organization whenever the status
of the labor organization is challenged on
the basis of Article 245 of the Labor Code.
In the case at bar, as respondent
union's membership list contains the names
of at least twenty-seven (27) supervisory
employees in Level Five positions. The job-
description for the Level 5 positions is
quoted below:
LEVEL 5 He is responsible for
overseeing initial production of new models,
prepares and monitors construction
schedules for new models, identifies
manpower requirements for production,
facilities and equipment, and lay-out
processes. He also oversees other sections
in the production process (e.g. assembly,
welding, painting)." (Annex "V" of
Respondent TMP's Position Paper, which is
the Job Description for an Engineer holding
Level 5 position in the Production
Engineering Section of the Production
Planning and Control Department).
From a reading of the Labor Code’s
definition of supervisory employees, those
occupying Level 5 positions are
unquestionably supervisory employees.
Supervisory employees are those who, in
the interest of the employer, effectively
recommend managerial actions if the
exercise of such authority is not merely
routinary or clerical in nature but require the
use of independent judgment. Under the job
description for level five employees, such
personnel all engineers having a number of
personnel under them, not only oversee
production of new models but also
37
| Labor Relations-2A
determine manpower requirements, thereby
influencing important hiring decisions at the
highest levels. This determination is neither
routine nor clerical but involves the
independent assessment of factors affecting
production, which in turn affect decisions to
hire or transfer workers. The use of
independent judgment in making the
decision to hire, fire or transfer in the
identification of manpower requirements
would be greatly impaired if the employee's
loyalties are torn between the interests of
the union and the interests of management.
A supervisory employee occupying a level
five position would therefore find it difficult to
objectively identify the exact manpower
requirements dictated by production
demands.
This is precisely what the Labor Code,
in requiring separate unions among rank-
and-file employees on one hand, and
supervisory employees on the other, seeks
to avoid. The rationale behind the Code's
exclusion of supervisors from unions of
rank-and-file employees is that such
employees, while in the performance of
supervisory functions, become the alter ego
of management in the making and the
implementing of key decisions at the sub-
managerial level. Certainly, it would be
difficult to find unity or mutuality of interests
in a bargaining unit consisting of a mixture
of rank-and-file and supervisory employees.
And this is so because the fundamental test
of a bargaining unit's acceptability is
whether or not such a unit will best advance
to all employees within the unit the proper
exercise of their collective bargaining
rights. The Code itself has recognized this,
in preventing supervisory employees from
joining unions of rank-and-file employees.
Hence, the union could not attain the
status of a legitimate labor organization. Not
being one, it cannot possess the requisite
personality to file a petition for certification
election.

MAGABILIN
UST FACULTY UNION (USTFU) et al vs.
Dir. BENEDICTO ERNESTO R.BITONIO
JR. of the Bureau of Labor Relations et
al.
G.R. No. 131235 November 16, 1999
FACTS:
Marino, et. al. are duly elected officers
of the UST Faculty Union (USTFU). The
union has a subsisting five-year Collective
Bargaining Agreement with its employer
(UST).
Collantes, in her capacity as Secretary
General of USTFU, posted a notice
addressed to all USTFU members
announcing a general assembly which was
called to elect USTFUs next set of
officers. Some of the appellants filed a
separate petition with the Med-Arbiter,
alleging that the COMELEC was not
constituted in accordance with USTFUs
constitution and by-laws (CBL) and that no
rules had been issued to govern the
conduct of the election.
Thereafter, the secretary general of
UST, upon the request of the various UST
faculty club presidents issued notices
allowing all faculty members to hold a
convocation. Denominated as a general
faculty assembly, the convocation was
supposed to discuss the state of the
unratified UST-USTFU CBA and status and
election of USTFU officers. The med-arbiter
issued a temporary restraining order against
herein appellees enjoining them from
conducting the election scheduled.
The general faculty assembly was held
as scheduled. The general assembly was
attended by members of the USTFU and
38
| Labor Relations-2A
also by 'non-USTFU members who are
members in good standing of the UST
Academic Community Collective Bargaining
Unit'. On this occasion, appellants were
elected as USTFUs new set of officers. The
election of the appellants came about upon
a motion of one Atty. Lopez, admittedly not
a member of USTFU, that the USTFU CBL
and 'the rules of the election be suspended
and that the election be held on that day.
The appellees filed the instant petition
seeking injunctive reliefs and the
nullification of the results of the
election. Appellees alleged that the holding
of the same violated the temporary
restraining order issued. Accusing
appellants of usurpation, appellees
characterized the election as spurious for
being violative of USTFUs CBL.
ISSUE: Whether or not the public
respondent committed grave abuse of
discretion in refusing to recognize the
officers elected during the general
assembly.
HELD: No.
Self-organization is a fundamental right
guaranteed by the Philippine Constitution
and the Labor Code. Employees have the
right to form, join or assist labor
organizations for the purpose of collective
bargaining or for their mutual aid and
protection. Whether employed for a definite
period or not, any employee shall be
considered as such, beginning on his first
day of service, for purposes of membership
in a labor union. Corollary to this right is the
prerogative not to join, affiliate with or assist
a labor union. Therefore, to become a union
member, an employee must, as a rule, not
only signify the intent to become one, but
 | Labor Relations-2A

also take some positive steps to realize that
intent. The procedure for union membership
is usually embodied in the union’s
constitution and bylaws. An employee who
becomes a union member acquires the
rights and the concomitant obligations that
go with this new status and becomes bound
by the union’s rules and regulations. If a
member of a union dislikes the provisions of
the by-laws, he may seek to have them
amended or may withdraw from the union;
otherwise, he must abide by them. It is not
the function of courts to decide the wisdom
or propriety of legitimate by-laws of a trade
union. The agreement of a member on
joining a union to abide by its laws and
comply with the will of the lawfully
constituted majority does not require a
member to submit to the determination of
the union any question involving his
personal rights.
Union Election vs. Certification Election
bargaining unit is entitled to vote in said
election. However, the reverse is not always
true; an employee belonging to the
appropriate bargaining unit but who is not a
member of the union cannot vote in the
union election, unless otherwise authorized
by the constitution and bylaws of the
union. Verily, union affairs and elections
cannot be decided in a non-union activity.
In both elections, there are procedures
to be followed. Thus, the October 4, 1996
election cannot properly be called
a union election, because the procedure laid
down in the USTFUs CBL for the election of
officers was not followed. It could not have
been a certification election either, because
representation was not the issue, and the
proper procedure for such election was not
followed. The participation of non-union
members in the election aggravated its
irregularity.

A union election is held pursuant to the

union’s constitution and bylaws, and the
right to vote in it is enjoyed only by
union members. A union election should be
distinguished from a certification election,
which is the process of determining, through
secret ballot, the sole and exclusive
bargaining agent of the employees in the
appropriate bargaining unit, for purposes of
collective bargaining. Specifically, the
purpose of a certification election is to
ascertain whether or not a majority of the
employees wish to be represented by a
labor organization and, in the affirmative
case, by which particular labor organization.

In a certification election, all employees

belonging to the appropriate bargaining unit
can vote. Therefore, a union member who
likewise belongs to the appropriate

39

45_Mallari
PALACOL VS FERRER-CALLEJA
G.R NO. 85333. February 26, 1990
FACTS:
On October 12, 1987, the respondent
Manila CCBPI Sales Force Union
(hereinafter referred to as the Union), as the
collective bargaining agent of all regular
salesmen, regular helpers, and relief
helpers of the Manila Plant and Metro
Manila Sales Office of the respondent Coca-
Cola Bottlers (Philippines), Inc. (hereinafter
referred to as the Company) concluded a
new collective bargaining agreement with
the latter. Among the compensation benefits
granted to the employees was a general
salary increase to be given in lump sum
including recomputation of actual
commissions earned based on the new
rates of increase.
On the same day, the president of the Union
submitted to the Company the ratification by
the union members of the new CBA and
authorization for the Company to deduct
union dues equivalent to P10.00 every
payday or P20.00 every month and, in
addition, 10% by way of special
assessment, from the CBA lump-sum pay
granted to the union members. The last one
among the aforementioned is the subject of
the instant petition.
As embodied in the Board Resolution of the
Union dated September 29, 1987, the
purpose of the special assessment sought
to be levied is "to put up a cooperative and
credit union; purchase vehicles and other
items needed for the benefit of the officers
and the general membership; and for the
40
| Labor Relations-2A
payment for services rendered by union
officers, consultants and others." There was
also an additional proviso stating that the
"matter of allocation ... shall be at the
discretion of our incumbent Union
President."
This "Authorization and CBA Ratification"
was obtained by the Union through a secret
referendum held in separate local
membership meetings on various dates.
The total membership of the Union was
about 800. 528 of 800 are withdrawing or
disauthorizing the deduction of any amount
from their CBA lump sum leaving a
remainder of 272 as supporters.
On account of the above-mentioned
disauthorization, the Company filed an
action for interpleader with the Bureau of
Labor Relations in order to resolve the
conflicting claims of the parties concerned.
Petitioners filed a motion/complaint for
intervention therein in two groups of 161
and 94, respectively. They claimed to be
among those union members who either did
not sign any individual written authorization,
or having signed one, subsequently
withdrew or retracted their signatures
therefrom.
Petitioners assailed the 10% special
assessment as a violation of Article 241(o)
in relation to Article 222(b) of the Labor
Code and cited Galvadores v. Trajano
wherein it was ruled that no check-offs from
any amount due employees may be
effected without individual written
authorizations duly signed by the
employees specifically stating the amount,
purpose, and beneficiary of the deduction.
In its answer, the Union countered that the
deductions not only have the popular
indorsement and approval of the general
membership, but likewise complied with the
legal requirements of Article 241 (n) and (o)
of the Labor Code in that the board
resolution of the Union imposing the
questioned special assessment had been

duly approved in a general membership
meeting and that the collection of a special
fund for labor education and research is
mandated.
ISSUE:
Can a special assessment be validly
deducted by a labor union from the lump-
sum pay of its members, granted under a
collective bargaining agreement (CBA),
notwithstanding a subsequent
disauthorization of the same by a majority of
the union members?
HELD:
No.
After a careful review of the records of this
case, We are convinced that the deduction
of the 10% special assessment by the
Union was not made in accordance with the
requirements provided by law.
Petitioners are correct in citing the ruling of
this Court in Galvadores which is applicable
to the instant case. The principle "that
employees are protected by law from
unwarranted practices that diminish their
compensation without their known edge and
consent" is in accord with the constitutional
principle of the State affording full protection
to labor.
The applicable provisions are clear. The
Union itself admits that both paragraphs
(n) and (o) of Article 241 apply.
Paragraph (n) refers to "levy" while
paragraph (o) refers to "check-off" of a
special assessment. Both provisions
must be complied with. Under paragraph
(n), the Union must submit to the
Company a written resolution of a
majority of all the members at a general
membership meeting duly called for the
41
| Labor Relations-2A
purpose. In addition, the secretary of the
organization must record the minutes of
the meeting which, in turn, must include,
among others, the list of all the members
present as well as the votes cast.
It submitted only minutes of the local
membership meetings when what is
required is a written resolution adopted at
the general meeting. Worse still, the
minutes of three of those local meetings
held were recorded by a union director and
not by the union secretary. The minutes
submitted to the Company contained no list
of the members present and no record of
the votes cast. Since it is quite evident that
the Union did not comply with the law at
every turn, the only conclusion that may be
made therefrom is that there was no valid
levy of the special assessment pursuant to
paragraph (n) of Article 241 of the Labor
Code.
Paragraph (o) on the other hand requires an
individual written authorization duly signed
by every employee in order that a special
assessment may be validly checked-off.
Even assuming that the special assessment
was validly levied pursuant to paragraph (n),
and granting that individual written
authorizations were obtained by the Union,
nevertheless there can be no valid check-off
considering that the majority of the union
members had already withdrawn their
individual authorizations. A withdrawal of
individual authorizations is equivalent to no
authorization at all. Hence, the ruling in
Galvadores that "no check-offs from any
amounts due employees may be effected
without an individual written authorization
signed by the employees ... " is applicable.

Moreover, it is well-settled that "all
doubts in the implementation and
interpretation of the provisions of the
Labor Code ... shall be resolved in favor
of labor." And as previously stated,
labor in this case refers to the union
members, as employees of the
Company. Their mere desire to establish
a separate bargaining unit, albeit
unproven, cannot be construed against
them in relation to the legality of the
questioned special assessment. On the
contrary, the same may even be taken to
reflect their dissatisfaction with their
bargaining representative, the
respondent-Union, as shown by the
circumstances of the instant petition,
and with good reason.
42
| Labor Relations-2A
46_Panganiban
ABS CBN Supervisors Employees Union
Member v. ABS CBN Broadcasting Corp.,
et al.
GR No.106518 March 11,1999
FACTS:
ABS CBN Broadcasting Corporation
and the union officers of the petitioner
concluded a Collective Bargaining
Agreement with a check- off provision which
provides for a 10% deduction from salary
increases and signing bonuses granted to
supervisors. This is in view of the advance
made by the corporation to the union to
cover union’s incidental expenses,
attorney’s fees, and representation
expenses for its organization. Petitioner filed
a complaint against the corporation and
union officers praying for suspension of
further deductions. The union alleged that
the check off provision was illegal for failure
to comply with Article 241, paragraphs (g),
(n), and (o) of the Labor Code and with the
By-Laws of the Union, particularly its
submission to all the members for
consideration and approval at a general
membership meeting called for that
purpose.
On the other hand, respondent union
officers and corporation contended that the
provision was in accordance with law as
majority of the union members individually
executed a written authorization giving the
union officers and corporation a blanket
authority to make deductions.

ISSUE: Whether or not the check off
provision is legal and valid
HELD:
Yes, because all of the 3 requisites
in order that the special assessment for
union’s incidental expenses, attorney’s fees,
and representation expenses were complied
with. Check- off is a process whereby the
employer, by agreement with the union,
deducts union dues or agency fees from the
wages and remits them directly to the union.
It is primarily for the benefit of union as it
assures continuous funding. Its statutory
limitations can be found in Article 241 of
Labor Code which deals with rights and
conditions of membership in a labor
organization. The provision speaks of 3
requisites: a) authorization by a written
resolution of majority of all members at the
general membership meeting; b) secretary’s
record of minutes of the meeting; and c)
individual written authorization duly signed
by employee concerned. First, the union
held a general meeting where they agreed
on the 10% check off to cover their
expenses. Second, the union’s secretary
recorded the minutes of the said meeting
and was noted by the president. Third, 85 of
the members of the union executed
individual written authorizations for check-
off and records did not indicate that they
were executed under influence of force or
compulsion nor withdrawn by them. The
Court affirmed validity of check off
provision but, ruled that deductions
must be made only to workers who gave
individual written check- off
authorization.
43
| Labor Relations-2A
47_Questin
HOLY CROSS OF DAVAO COLLEGE,
INC. v. HON. JEROME JOAQUIN, in his
capacity as Voluntary Arbitrator
G.R. No. 110007, October 18, 1996
DOCTRINE OF THE CASE
The employer’s failure to make the
requisite deductions may constitute a
violation of a contractual commitment for
which it may incur liability for unfair labor
practice. But it does not by that omission,
incur liability to the union for the aggregate
of dues or assessments uncollected from
the union members, or agency fees for non-
union employees.
FACTS:
A collective bargaining agreement
(CBA) was entered into between Holy Cross
of Davao College, Inc. (Holy Cross), an
educational institution, and the affiliate labor
organization representing its employees,
Holy Cross of Davao College Union-
KAMAPI (KAMAPI). Shortly before the
expiration of the agreement, KAMAPI
President Jose Lagahit, wrote Holy Cross
expressing his union’s desire to renew the
agreement, withal seeking its extension for
two months, on the ground that the teachers
were still on summer vacation and union
activities necessary or incident to the
negotiation of a new agreement could not
yet be conducted. The Holy Cross President
replied that he had no objection to the
extension sought, it being allowable under
the collective bargaining agreement.

A meeting of the KAMAPI
membership for the purpose of electing a
new set of union officers was conducted.
Rodolfo Gallera won election as president.
Gallera forthwith initiated discussions for the
union’s disaffiliation from the KAMAPI
Federation. Gallera’s group subsequently
formed a separate organization known as
the Holy Cross of Davao College Teachers
Union, and elected its own officers.
Holy Cross thereafter stopped
deducting from the salaries and wages of its
teachers and employees the corresponding
union dues and special assessment, and
agency fees, in accordance with the check-
off clause of the CBA.
In the meantime, there ensued
between the two unions a full-blown action
on the basic issue of representation, which
was to last for some two years. It began
with the filing by the new union of a petition
for certification election in the Office of the
Med-Arbiter. KAMAPI responded by filing a
motion asking the Med-Arbiter to dismiss
the petition. The Med-Arbiter denied
KAMAPI’s motion to dismiss, and ordered
the holding of a certification election. On
appeal, however, the Secretary of Labor
reversed the Med-Arbiter’s ruling and
ordered the dismissal of the petition for
certification election, which action was
eventually sustained by the Supreme Court
in appropriate proceedings.
Thereafter, KAMAPI presented its
bargaining proposals to Holy Cross; and it
44
| Labor Relations-2A
sent a letter to the School asking for its
counter-proposals. In response, Holy Cross
declared that it would take no action
towards a new CBA without a definitive
ruling on the proper interpretation of Article I
of the old CBA. Said Article provides inter
alia for the automatic extension of the CBA
for another period of three (3) years counted
from its expiration, if the parties fail to agree
on a renewal, modification or amendment
thereof.
There has been a dispute regarding
the proper interpretation of items 1 and 2 of
Article I of the CBA. After several failed
conciliation meetings, KAMAPI and Holy
Cross referred the case to voluntary
arbitration. Voluntary Arbitrator Joaquin
ruled in favor of KAMAPI. He ruled that the
request for extension filed by KAMAPI
constituted seasonable notice of its intention
to renew, modify or amend the agreement,
which it could not however pursue because
of the absence of the teachers who were
then on summer vacation. Further, he
ordered Holy Cross to pay to KAMAPI the
amount equivalent to the uncollected union
dues, it appearing that Holy Cross stopped
complying with the CBA’s check-off
provisions.
Aggrieved, Holy Cross filed the
instant petition.
ISSUE: Is Holy Cross liable to pay to
KAMAPI, the amounts it failed to deduct
from KAMAPI’s members as union dues, or
agency fees as regards those not union
members, in accordance with the check-off
provisions of the CBA?

RULING: No.
A check-off is a process or device
whereby the employer, on agreement with
the union recognized as the proper
bargaining representatives, or on prior
authorization from its employees, deducts
union dues or agency fees from the latter's
wages and remits them directly to the union.
Its desirability to a labor organization is
quite evident; by it, it is assured of
continuous funding. Indeed, this Court has
acknowledged that the system of check-off
is primarily for the benefit of the union and,
only indirectly, of the individual laborers.
The legal basis of check-off is thus found in
statute or in contract. Statutory limitations
on check-offs generally require written
authorization from each employee to deduct
wages; however, a resolution approved and
adopted by a majority of the union members
at a general meeting will suffice when the
right to check-off has been recognized by
the employer, including collection of
reasonable assessments in connection with
mandatory activities of the union, or other
special assessments and extraordinary
fees.
On the other hand, the collection of
agency fees in an amount equivalent to
union dues and fees, from employees who
are not union members, is recognized by
Article 248 (e) of the Labor Code. No
requirement of written authorization from the
non-union employee is imposed. The
employees’ acceptance of benefits resulting
from a collective bargaining agreement
justifies the deduction of agency fees from
his pay and the union’s entitlement thereto.
45
| Labor Relations-2A
In this aspect, the legal basis of the union’s
right to agency fees is neither contractual
nor statutory, but quasi-contractual, deriving
from the established principle that non-
union employees may not unjustly enrich
themselves by benefiting from employment
conditions negotiated by the bargaining
union.
No provision of law makes the
employer directly liable for the payment to
the labor organization of union dues and
assessments that the former fails to deduct
from its employees salaries and wages
pursuant to a check-off stipulation. The
employer’s failure to make the requisite
deductions may constitute a violation of a
contractual commitment for which it may
incur liability for unfair labor practice. But it
does not by that omission, incur liability to
the union for the aggregate of dues or
assessments uncollected from the union
members, or agency fees for non-union
employees.
Where the employer fails or refuses
to implement a check-off agreement, logic
and prudence dictate that the union itself
undertake the collection of union dues and
assessments from its members (and agency
fees from non-union employees); this, of
course, without prejudice to suing the
employer for unfair labor practice.
Therefore, there was no basis for the
Voluntary Arbitrator to require Holy Cross to
assume liability for the union dues and
assessments, and agency fees that it had
failed to deduct from its employees’
salaries.

48_Reonico
Philippine Diamond Hotel vs. Manila
Diamond Hotel Union
G.R. No. 158075, June 30, 2006
FACTS
The Diamond Hotel Union sought for
a certification as the exclusive bargaining
representative of its members. However,
DOLE-NCR denied for failure to comply with
the requirements. The Union informed the
hotel of its intention to negotiate for
collective bargaining agreement. The Hotel
rejected such because the Union was not
certified by DOLE as the exclusive
bargaining agent. Hence, the Union filed a
notice to strike due to unfair labor practice
against the Hotel who refused to negotiate
with the Union.
Suddenly, the Union went on a strike
despite several conferences. The entrances
were blocked. The NLRC issued a
temporary restraining order pursuant to the
ocular inspection of the NLRC
representative who confirmed that the
strikers obstructed the free ingress to and
egress from the Hotel. The TRO directed
the strikers to cease and desist from
obstructing the entrances. In its
implementation, the strikers resisted and
some were injured. NLRC ruled that the
strike was illegal; and the termination of
union officers was based on their
participation in an illegal strike. The Union
averred that the termination equates to
union busting and unfair labor practice
because in fact they had the capacity to
46
| Labor Relations-2A
negotiate as representatives. The CA
affirmed the NLRC decision, but it ordered
the reinstatement with back wages of union
members. Hence, this present case.
ISSUE
Whether or not there is a violation of
the constitutional right to self-organization
(when the Hotel intimidated some workers
from joining the Union before, during or after
the strike)
RULING
NO. The Court observed that the
petition of the Union contained general
allegations that the Hotel committed unfair
labor practices by refusing to bargain with
the union and y alleged acts of union
interference, coercion and discrimination
tantamount to union-busting. The burden to
prove these allegations by substantial
evidence lies with the Union. While the
Union continues to accuse the Hotel of
violating their constitutional right to organize
by busting the Union, the Court cannot
overlook the events that transpired prior to
the strike that the Union staged on
November 29, 1997. It is beyond argument
that a conciliatory meeting was still
scheduled to be held on December 1, 1997
before the NCMB. In this conciliatory
meeting, the Union could have
substantiated and presented additional
evidence. Thus, as held by the Supreme
Court in the case of Tiu vs. National Labor
Relations Commission:
"The Court is not unmindful of this
rule, but in the case at bar the facts
and the evidence did not establish
 | Labor Relations-2A

events, least a rational basis why the
union would wield a strike based on
alleged unfair labor practices; it did
not even bother to substantiate
during the conciliation proceedings.
It is not enough that the union
believed that the employer
committed acts of unfair labor
practice when the circumstances
clearly negate even prima facie
showing to warrant such a belief."
Labor Code is misplaced for not every
legitimate labor organization possesses the
rights mentioned therein. Article 242 (a)
must be read in relation to Article 255.
Finally, the Court affirmed the decision of
the NLRC and CA but modified in terms that
only those members of the Union who did
not commit illegal acts during the course of
the illegal strike should be reinstated but
without back wages.

It is also evident from the records of

the instant petition, specifically from the
Notice of Strike, that their principal ground
for the strike was the "refusal of the Hotel
Management to bargain collectively with the
Union for the benefit of the latter’s
members." In the instant case, it is not
disputed that the UNION is not a certified
bargaining unit to negotiate a collective
bargaining agreement with the Hotel.
Hence, the Court notes that the Union
violated Article 264 which proscribes the
staging of a strike on the ground of ULP
during the pendency of cases involving the
same grounds for the strike.

The Court finds the strike illegal as

the Union is admittedly not the exclusive
representative of the employees of the
Hotel; hence, it could not demand from the
Hotel the right to bargain collectively in
behalf of the employees. Article 255 of the
Labor Code declares that only the labor
organization designated or selected by the
majority of the employees in an appropriate
collective bargaining unit is the exclusive
representative of the employees in such unit
for the purpose of collective bargaining. The
reliance of the Union to Article 242 of the

47

49_Terre
ME-SHURN CORP. v. ME-SHURN UNION
G.R. No. 156292 January 11, 2005
FACTS:
Rank and file employees organized the Me-
Shurn Workers Union-FSM (February Six
Movement) in July 1998. While their
application for registration was pending
before the Bureau of Labor Relations, the
Corporation placed the members of the
union’s bargaining unit on forced leave. The
Union filed a Petition for Certification
Election before the Med-Arbiter Department
of DOLE. Instead of filing an Answer, the
Corporation filed a comment stating that
they will lay off employees and cease
operations due to its inability to meet the
export quota required by the Board of
Investment. Thus, the Union withdrew its
petition. But later on the Union’s appeal was
granted by the DOLE Usec, and they were
allowed to hold the certification election.
The Corporation rehired the employees on
the condition that they sign an agreement
that no union will be organized upon their
return. After signing the agreement,
operations resumed, but the rank and file
employees organized the union once more
and elected Rosalina Cruz as president.
They filed two cases for compulsory
arbitration, citing unfair labor practice, illegal
dismissal, underpayment of wages and
deficiency in separation pay.
The Corporation reiterated they had to close
down business due to losses. They also
questioned the legality of the Union, alleging
that another one, Me-Shurn Independent
48
| Labor Relations-2A
Employees Union, has already signed a
CBA with the Corporation, making the
certification election moot and academic.
LA dismissed Union’s petitions, NLRC
reversed the decision and denied the MR,
while CA likewise dismissed the
Corporation’s petition.
ISSUES:
1. W/N the dismissal of employees
constitute unfair labor practice.
2. W/N respondent union is legitimate.
HELD:
1. YES. The Corporation has not
satisfactorily explained why the workers
dismissal was effected only after the
formation of respondent union in September
1998. We also take note of the allegation
that after several years of attempting to
organize a union, the employees finally
succeeded on June 7, 1998. Ten days later,
without any valid notice, all of them were
placed on forced leave, allegedly because
of lack of quota. All these considerations
give credence to their claim that the closure
of the corporation was a mere subterfuge, a
systematic approach intended to dampen
the enthusiasm of the union members.
Furthermore, as a condition for the
rehiring of the employees, the union officers
were made to sign an agreement that they
would not form any union upon their return
to work. This move was contrary to law.
Notwithstanding the Petition for Certification
Election filed by respondents and despite
knowledge of the pendency thereof,
petitioners recognized a newly formed union
and hastily signed with it an alleged
Collective Bargaining Agreement. Their
preference for the new union was at the
expense of respondent union.
All these factors strongly give credence
to the contention of respondents that the

real reason behind the shutdown of the
corporation was the formation of their union.
Note that, to constitute an unfair labor
practice, the dismissal need not entirely and
exclusively be motivated by the unions
activities or affiliations. It is enough that the
discrimination was a contributing factor. If
the basic inspiration for the act of the
employer is derived from the affiliation or
activities of the union, the formers
assignment of another reason, no matter
how seemingly valid, is unavailing.
2. YES. It should be pointed out that it
filed a Petition for Certification Election.
While this Petition was initially dismissed by
the med-arbiter on the basis of a supposed
retraction, note that the appeal was granted.
The DOLE would not have entertained the
Petition if the union were not a legitimate
labor organization within the meaning of the
Labor Code. Under this Code, in an
unorganized establishment, only a only the retrenchment of the employees but
legitimate union may file a petition for
certification election.
Verily, the union has the requisite
personality to sue in its own name in order
to challenge the unfair labor practice
committed by petitioners against it and its
members. It would be an unwarranted
impairment of the right to self-organization
through formation of labor associations if
thereafter such collective entities would be
barred from instituting action in their
representative capacity.
Finally, in view of the discriminatory
acts committed by petitioners against
respondent union -- acts that included their
immediate grant of exclusive recognition to
another union as a bargaining agent despite
the pending Petition for certification election
-- the results of that election cannot be said
to constitute a repudiation by the affected
employees of the unions right to represent
them in the present case.
49
| Labor Relations-2A
50_Santos
ACEDERA ET AL. V. INTERNATIONAL
CONTAINER TERMINAL SERVICES, INC.,
NLRC, & CA
GR No. 146073, 13 January 2003
Facts:
Jerry Acedera, et al. are employees of
International Container Terminal Services,
Inc. (ICTSI) and are members of Associated
Port Checkers & Workers Union-
International Container Terminal Services,
Inc.(APCWU-ICTSI), a duly registered labor
organization. ICTSI went on a retrenchment
program and laid off its on-call employees.
This prompted the APCWU to file a notice of
strike which included as cause of action not
also ICTSI's use of 365 days as divisor in
the computation of wages, even if the
employees' work week consisted only of five
days as agreed upon in the Collective
Bargaining Agreement (CBA).
The dispute respecting the retrenchment
was resolved by a compromise settlement,
while that respecting the computation of
wages was referred to the Labor Arbiter.
Subsequently, APCWU, on behalf of its
members and other employees similarly
situated, filed with the Labor Arbiter a
complaint against ICTSI which was
dismissed. Petitioners filed with the Labor
Arbiter a Complaint-in-Intervention with
Motion to Intervene, but the same was
denied upon finding that they are already
well represented by APCWU. The denial of
petitioners' intervention was affirmed by the
NLRC. Petitioners filed a petition for
certiorari with the Supreme Court which
referred the petition to the CA. The CA
 | Labor Relations-2A

dismissed the petition. Hence, this present
petition.
Issue: Whether petitioners have a legal right
to intervene and pursue the case
faith on the part of the representative must
be proven. It must be based on facts borne
on record. Mere assertions, as what
petitioners-appellants proffer, do not suffice.
INOCENTES_51

Held: Golden Donuts, Inc. v. NLRC [G.R. Nos.

113666-68, January 19, 2000.]

Wednesday, January 21, 2009 Posted

No. A labor union is one such party by Coffeeholic Writes
authorized to represent its members under Labels: Case Digests, Labor Law
Article 242 (a) of the Labor Code which
provides that a union may act as the
representative of its members for the FACTS: Private respondents were the
purpose of collective bargaining. This complainants in three consolidated cases
authority includes the power to represent its submitted with the Labor Arbiter.
members for the purpose of enforcing the Complainants were members of the KMDD-
provisions of the CBA. CFW whose CBA with the
corporation expired. During the
negotiations, the management panel arrived
late causing the union panel to walk out.
While a party acting in a representative
The management addressed a letter of
capacity, such as a union, may be permitted
apology to the union and requested for
to intervene in a case, ordinarily, a person
negotiations to resume. The union panel did
whose interests are already represented will
not show up despite letters from
not be permitted to do the same except
management advising the former of the
when there is a suggestion of fraud or
CBA meetings. The union struck. A
collusion or that the representative will not
compliant was filed by Golden Donuts to
act in good faith for the protection of all
declare the strike illegal. Counsel for the
interests represented by him.
union and strikers pleaded for a
compromise whereupon both parties would
desist from continuing their cases against
Petitioners cite the dismissal of the case each other. The Labor Arbiter rendered a
filed by APCWU, first by the Labor Arbiter, decision upholdingthe dismissal of private
and later by the CA. The dismissal of the respondents and ruling that they were
case does not, however, by itself show the bound by the compromise agreement
existence of fraud or collusion or a lack of entered into by the union with petitioners.
good faith on the part of APCWU. Private respondents appealed to the NLRC,
claiming that the union had no
To reiterate, for a member of a class to be authority to waive or compromise their
permitted to intervene in a representative individual rights and they were not bound by
action, fraud or collusion or lack of good

50
 | Labor Relations-2A

the compromise agreement entered into by

the union with petitioners.

ISSUE: Whether or not a union may

compromise or waive the right to security
of tenure and money claims of its minority
members, without the latter’s consent.

HELD: No. Absent a showing of the union’s

special authority to compromise the
individual claims of private respondents for
reinstatement and backwages, there is no
valid waiver of the aforesaid rights. The
judgment of the Labor Arbiter based on the
compromise agreement does not have the
effect of res judicata upon private
respondents who did not agree thereto
since the requirement of identity of parties is
not satisfied. A judgment upon a
compromise agreement has all the force
and effect of any other judgment and is
conclusive only upon parties thereto and
their privies. Private respondents have not
waived their right to security oftenure nor
can they be barred from entitlement of their
individual claims. Since there was no
evidence that private respondents
committed any illegalact, petitioner’s failure
to reinstate them after the settlement of the
strike amounts to illegal dismissal.

51

RIGHTS OF LEGITIMATE
LABOR ORGS
52_Palacios
CAPITOL MEDICAL CENTER, INC. vs.
HON. CRESENCIANO B. TRAJANO and
CAPITOL MEDICAL CENTER
EMPLOYEES ASSOCIATION-AFW
Facts: Capitol Medical Center,
Inc., petitioner, is a hospital with address at
Panay Avenue corner Scout Magbanua
Street, Quezon City. Upon the other hand,
Capitol Medical Center Employees
Association-Alliance of Filipino Workers,
respondent, is a duly registered labor union
acting as the certified collective bargaining
agent of the rank-and-file employees of
petitioner hospital. On October 2, 1997,
respondent union, through its president
Jaime N. Ibabao, sent petitioner a letter
requesting a negotiation of their Collective
Bargaining Agreement (CBA).In its reply
dated October 10, 1997, petitioner,
challenging the union’s legitimacy, refused
to bargain with respondent. Subsequently or
on October15, 1997, petitioner filed with the
Bureau of Labor Relations (BLR),
Department of Labor and Employment, a
petition for cancellation of respondent’s
certificate of registration.
For its part, on October 29, 1997,
respondent filed with the NCMB, National
Capital Region, a notice of strike.
Respondent alleged that petitioner’s refusal
to bargain constitutes unfair labor practice.
Despite several conferences and efforts of
the designated conciliator-mediator, the
parties failed to reach an amicable
settlement. Thus, respondent staged a
52
| Labor Relations-2A
strike. On December 4, 1997, former Labor
Secretary Leonardo A. Quisumbing, now
Associate Justice of this Court, issued an
Order assuming jurisdiction over the labor
dispute and ordering all striking workers to
return to work and the management to
resume normal operations.
Meantime, on October 1, 1998, the
Regional Director issued an Order
denying the petition for cancellation of
respondent union’s certificate of registration.
On September 20, 2001, the Appellate
Court rendered a Decision affirming the
Orders of the Secretary of Labor. The Court
of Appeals held: In order to allow
an employer to validly suspend the
bargaining process, there must be a
valid petition for certification election. The
mere filing of a petition does not ipso
facto justify the suspension of negotiation by
the employer.
If pending a petition for certification, the
collective bargaining is allowed by the
Supreme Court to proceed, with more
reason should the collective bargaining (in
this case) continue since the High Court had
recognized the respondent as the certified
bargaining agent in spite of several petitions
for cancellation filed against it.
Issue: Whether the petition for
the cancellation of respondent union’s
certificate of registration involves a
prejudicial question that should first be
settled before the Secretary of Labor
could order the parties to bargain
collectively.
Held: No. As aptly stated by the Solicitor
General in his comment on the petition, the
 | Labor Relations-2A

Secretary of Labor correctly ruled that the

pendency of a petition for cancellation of
union registration does not preclude 53_Talens
collective bargaining, thus: "That there is
a pending cancellation proceedings against
the respondent Union is not a bar to set
in motion the mechanics of collective
bargaining. If a certification election may still
be ordered despite the pendency of
a petition to cancel the union’s registration
certificate, more so should the collective
bargaining process continue despite its
pendency.

We must emphasize that the majority status

of the respondent Union is not affected by
the pendency of the Petition for Cancellation
pending against it. Unless its certificate of
registration and its status as the certified
bargaining agent are revoked, the Hospital
is, by express provision of the law, duty
bound to collectively bargain with the Union.
Indeed, no less than the Supreme Court
already ordered the Hospital to collectively
bargain with the Union when it affirmed the
resolution of this Office dated November 18,
1994 directing the management of the
Hospital to negotiate a collective bargaining
agreement with the Union.

Moreover, as mentioned earlier, during the

pendency of this case before the Court of
Appeals, the Regional Director issued an
Order on October 1, 1998 denying the
petition for cancellation of respondent’s
certificate of registration. This Order
became final and executory and recorded in
the BLR’s Book of Entries of Judgments on
June 3,1999.

53

54_Acosta
STANDARD CHARTERED BANK
EMPLOYEES UNION V. CONFESOR AS
SOLE AND STANDARD CHARTERED
BANK
FACTS: Standard Chartered Bank (the Bank) is
a foreign banking corporation doing business in
the Philippines. The exclusive bargaining agent
is the Standard Chartered Bank Employees
Union (the Union).
In August 1990, the Bank and the Union signed
a five year CBA with a provision to renegotiate
after 3 years. Prior to the expiration of the three
year period and before the 60 day freedom
period, the union initiated the negotiations
followed by a counterproposal of the Bank. The
parties agreed to settle the differences in a
meeting.
Before the commencement of the negotiation,
the Union, through Divinagracia, suggested to
the Bank’s Human Resource Manager and head
of the negotiating panel, Cielito Diokno, that the
bank lawyers should be excluded from the
negotiating team. The Bank acceded.
Meanwhile, Diokno suggested to Divinagracia
that Jose P. Umali, Jr., the President of the
National Union of Bank Employees (NUBE), the
federation to which the Union was affiliated, be
excluded from the Union’s negotiating panel.
However, Umali was retained as a member
thereof.
Both parties agreed to place the notation
“DEFERRED/DEADLOCKED” on the proposed
non-economic provisions of the CBA as they
were unable to reach an agreement.
Days after, the negotiation for economic
provisions commenced. Except for the
provisions on signing bonus and uniforms, the
Union and the Bank failed to agree on the
remaining economic provisions of the CBA. The
Union, then declared deadlock and filed a notice
of strike before NCMB. Consequently, the Bank
54
| Labor Relations-2A
filed a complaint for ULP and Damages against
the Union alleging that the union did not bargain
in good faith; that the Union demanded "sky high
economic demands," indicative of blue-sky
bargaining. It contended further, that the Union
violated its no strike- no lockout clause by filing
a notice of strike before the NCMB; that
considering the filing of notice of strike was an
illegal act, the Union officers should be
dismissed; and that the bank suffered nominal
and actual damages and was forced to litigate
and hire the services of a lawyer.
The SOLE assumed jurisdiction over the labor
dispute and ordered the parties to execute a
CBA incorporating the dispositions. The SOLE
dismissed the charges of ULP of both the Union
and the Bank. Both parties filed MFR but to no
avail. On March 22, 1994, the parties signed the
CBA. On April 28, 1994, the Union filed this
petition for certiorari under Rule 65 of the Rules
of Procedure.
ISSUE: Whether or not the Bank is guilty of
ULP because of its alleged: “interference”
with its choice of negotiator, surface
bargaining, and refusal to furnish the Union
with copies of the relevant data.
HELD: NO.
Interference
The circumstances that occurred during the
negotiation do not show that the suggestion
made by Diokno to Divinagracia is an anti-
union conduct from which it can be inferred
that the Bank consciously adopted such act
to yield adverse effects on the free exercise
of the right to self-organization and
collective bargaining of the employees,
especially considering that such was
undertaken previous to the commencement
of the negotiation and simultaneously with
Divinagracia’s suggestion that the bank
lawyers be excluded from its negotiating
panel. It is clear that such ULP charge was

merely an afterthought. The accusation
occurred after the arguments and
differences over the economic provisions
became heated and the parties had become
frustrated.
Surface bargaining
Surface bargaining is defined as going
through the motions of negotiating without
any legal intent to reach an agreement. The
determination of whether a party has
engaged in unlawful surface bargaining is
usually a difficult one because it involves
the question of whether an employer’s
conduct demonstrates an unwillingness to
bargain in good faith or is merely hard
bargaining.
The minutes of meetings from March 12,
1993 to June 15, 1993 do not show that the
Bank had any intention of violating its duty
to bargain with the Union. The minutes of
the meetings show that both the Bank and
the Union exchanged economic and non-
economic proposals and counter-proposals.
The Union has not been able to show that
the Bank had done acts, both at and away
from the bargaining table, which tend to
show that it did not want to reach an
agreement with the Union or to settle the
differences between it and the Union.
Admittedly, the parties were not able to
agree and reached a deadlock. However, it
is herein emphasized that the duty to
bargain does not compel either party to
agree to a proposal or require the making of
a concession. Hence, the parties failure to
agree did not amount to ULP under Article
248(g) for violation of the duty to bargain.
Refusal to furnish copies of relevant data
While the refusal to furnish requested
information is in itself an unfair labor
55
| Labor Relations-2A
practice, and also supports the inference of
surface bargaining, in the case at bar,
Umali, in a meeting dated May 18, 1993,
requested the Bank to validate its
guestimates on the data of the rank and file.
However, Umali failed to put his request in
writing as provided for in Article 242(c) 1 of
the Labor Code.
The Union, did not, as the Labor Code
requires, send a written request for the
issuance of a copy of the data about the
Banks rank and file employees. Moreover,
as alleged by the Union, the fact that the
Bank made use of the aforesaid
guestimates, amounts to a validation of the
data it had used in its presentation.
*1Article 242. Rights of Legitimate Labor
Organization
(c) To be furnished by the employer, upon
written request, with the annual audited
financial statements, including the balance
sheet and the profit and loss statement,
within thirty (30) calendar days from the
date of receipt of the request, after the
union has been duly recognized by the
employer or certified as the sole and
exclusive bargaining representatives of the
employees in the bargaining unit, or within
sixty (60) calendar days before the
expiration of the existing collective
bargaining agreement, or during the
collective negotiation;collective bargaining
agreement, or during the collective
negotiation;

55_Barrietta
MANILA ELECTRIC COMPANY V. HON.
SEC. OF LABOR AND MEWA
January 27, 1999
PONENTE: AUSTRIA-MARTINEZ, J.:
FACTS
Meralco and MEWA, renegotiating their
CBA for the remaining two of its five-year
term, deadlocked on such issues as wage
increase, coverage of bargaining unit,
Christmas bonus and so forth. Meralco
management petitioned the DOLE secretary
to assume jurisdiction over the deadlock
dispute. The Secretary rendered an award
and directed the parties to incorporate it in
their renegotiated CBA. Objecting to
particular items in the award as excessive
or arbitrary, Meralco moved for
reconsideration, and the Secretary did
reconsider some of the items. Still
dissatisfied, Meralco charged the Secretary
with grave abuse of discretion before the
Supreme Court. The Union opposed the
petition. It disputed the allegation of
MERALCO that the Secretary abused his
discretion in issuing the assailed orders
arguing that he acted within the scope of the
powers granted him by law and by the
Constitution. The union contends that any
judicial review is limited to an examination
of the Secretary’s decision-
making/discretion - exercising process to
determine if this process was attended by
some capricious or whimsical act that
constitutes “grave abuse”; in the absence of
such abuse, his findings - considering that
56
| Labor Relations-2A
he has both jurisdiction and expertise to
make them - are valid.
ISSUE
Whether or not the extent of judicial review
over the Secretary of Labor is limited only to
a determination of grave abuse in the
manner of the secretary’s exercise of his
statutory powers.
HELD
The Secretary of Labor’s statutory power
under Art. 263 (g) of the Labor Code to
assume jurisdiction over a labor dispute in
an industry indispensable to the national
interest, and, to render an award on
compulsory arbitration, does not exempt the
exercise of this power from the judicial
review that Sec. 1, Art. 8 of the Constitution
mandates. This constitutional provision
states:
“Judicial power includes the duty of the
courts of justice to settle actual
controversies involving rights which are
legally demandable and enforceable, and to
determine whether or not there has been a
grave abuse of discretion amounting to lack
or excess of jurisdiction on the part of any
branch or instrumentality of the
government.”
Under this constitutional mandate, every
legal power of the Secretary of Labor under
the Labor Code, or, for that matter, any act
of the Executive, that is attended by grave
abuse of discretion is subject to review by

this Court in an appropriate proceeding. To
be sure, the existence of an executive
power alone - whether granted by statute or
by the Constitution - cannot exempt the
executive action from judicial oversight,
interference or reversal when grave abuse
of discretion is, or is alleged to be, present.
This is particularly true when constitutional
norms are cited as the applicable yardsticks
since this Court is the final interpreter of the
meaning and intent of the Constitution.
The extent of judicial review over the
Secretary of Labor’s arbitral award is not
limited to a determination of grave abuse in
the manner of the secretary’s exercise of his
statutory powers. This Court is entitled to,
and must - in the exercise of its judicial
power - review the substance of the
Secretary’s award when grave abuse of
discretion is alleged to exist in the award,
i.e., in the appreciation of and the
conclusions the Secretary drew from the
evidence presented.
57
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56_Batalier
CREA vs. BRILLANTES and CALTEX
(PHILIPPINES), Inc.
G.R. No. 123782, September 16 1997
FACTS:
Anticipating the expiration of their CBA on
July 31, 1995, petitioner and private
respondent 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 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 others were unresolved.
To settle the unresolved issues, eight
meetings between the parties were
conducted. Because the parties failed to
reach any significant progress in these
meetings, petitioner declared a deadlock.
On July 24, 1995, petitioner filed a notice of
strike. 6 conciliation meetings conducted by
the NCMB failed, failed. Marathon meetings
at the plant level, but this remedy proved
also unavailing.
Secretary assumed jurisdiction and ordered
“Accordingly, any strike or lockout, whether
actual or intended, is hereby enjoined.”xxx
But the members of petitioner defied them
and continued their mass action (despite
repeated orders).

Thereafter, the contending parties filed their
position papers pertaining to unresolved
issues. Because of the strike, private
respondent terminated the employment of
some officers of petitioner union. The
legality of these dismissals brought
additional contentious issues.
Again, the parties tried to resolve their
differences through conciliation. Failing to
come to any substantial agreement, the
parties decided to refer the problem to the
secretary of labor and employment.
ISSUE:
1. Petitioner questions public
respondent’s resolution of five
issues in the CBA, specifically on
wage increase, union security
clause, retirement benefits or
application of the new retirement
plan, signing bonus and grievance
and arbitration machineries; and
2. Whether or not the Honorable
Secretary of Labor and Employment
committed grave abuse of discretion
in resolving the instant labor dispute.
HELD:
The petition is partly meritorious.
1. Wage Increase. Petitioner maintains that
the salaries of Shell Refinery employees be
used as a “reference point” in upgrading the
compensation of private respondent’s
employees because these two companies
are in the “same industry and their refineries
are both in Batangas.” Thus, the wage
increase of petitioner’s members should be
“15%/15%/15%.” Private respondent
counters with a “proposed 9% 7% 7%
increase for the same period with automatic
58
| Labor Relations-2A
adjustment should the increase fall short of
the inflation rate.
The alleged “similarity” in the situation of
Caltex and Shell cannot be considered a
valid ground for a demand of wage
increase, in the absence of a showing that
the two companies are also similar in
“substantial aspects,” as discussed above.
True, union members have the right to
demand wage increases through their
collective force; but it is equally cogent
that they should also be able to justify an
appreciable increase in wages. We
observe that private respondent’s detailed
allegations on productivity are unrebutted. It
is noteworthy that petitioner ignored this
argument of private respondent and based
its demand for wage increase not on the
ground that they were as productive as the
Shell employees. Thus, we cannot attribute
grave abuse of discretion to public
respondent.
2. Union Security Clause. Petitioner
argues that in spite of the provisions on the
“union security clause,” it may expel a
member only on any of three grounds: non-
payment of dues, subversion, or conviction
for a crime involving moral turpitude. If the
employee’s act does not constitute any of
these three grounds, the member would
continue to be employed by private
respondent. Thus, the disagreement
between petitioner and private respondent
on this issue is not only “procedural” but
also “substantial.”
We agree with petitioner. The
disagreement between petitioner and
private respondent on the union security
clause should have been definitively
resolved by public respondent. The labor

secretary should take cognizance of an
issue which is not merely incidental to
but essentially involved in the labor
dispute itself, or which is otherwise
submitted to him for resolution. The
secretary of labor assumed jurisdiction over
this labor dispute in an industry
indispensable to national interest, precisely
to settle once and for all the disputes over
which he has jurisdiction at his level. In not
performing his duty, the secretary of labor
committed a grave abuse of discretion.
3. New Retirement Plan. Petitioner
contends that “40 of its members who are
still covered by the Old Retirement Plan
because they were not able to exercise the
option to shift to the New Retirement Plan,
for one reason or another, when such option
was given in the past” are included in the
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.
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| Labor Relations-2A
4. Grievance Machinery and
Arbitration. Petitioner contends that public
respondent “derailed the grievance and
arbitration scheme proposed by the
Union.” Petitioner’s recommendation for a
“single arbitrator is based on the proposition
that if voluntary arbitration should be
resorted to at all, this recourse should entail
the least possible expense.”
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
CBA and those arising from the
interpretation or enforcement of company
personnel policies.”
We believe that the procedure described by
public respondent sufficiently complies with
the minimum requirement of the law. Public
respondent even provided for two steps in
hearing grievances prior to their referral to
arbitration. The parties will decide on the
number of arbitrators who may hear a
dispute only when the need for it
arises. Even the law itself does not
specify the number of arbitrators. . In
this matter, cost is not the only
consideration; full deliberation on the
issues is another, and it is best
accomplished in a hearing conducted by
three arbitrators. In effect, the parties are
afforded the latitude to decide for
themselves the composition of the
grievance machinery as they find
appropriate to a particular situation. At
bottom, we cannot really impute grave
abuse of discretion to public respondent on
this issue.
 | Labor Relations-2A

5. Signing Bonus. Petitioner asseverates issues to the secretary of labor for his
that the “signing bonus is an existing benefit resolution, they should not expect their
embodied in the old CBA.” 42 It explains that positions to be adopted in toto. It is
public respondent erred in removing the understood that they defer to his wisdom
award of a signing bonus xxx and objectivity in insuring industrial
peace. And unless they can clearly
Although proposed by petitioner, 45 the demonstrate bias, arbitrariness,
signing bonus was not accepted by private capriciousness or personal hostility on
respondent. 46 Besides, a signing bonus is the part of such public officer, the Court
not a benefit which may be demanded will not interfere or substitute the said
under the law. Rather, it is now claimed by officer’s judgment with its own.
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
non-strike — was not complied with. In
fact, private respondent categorically sated
in its counter-proposal — to the exclusion of
those agreed upon before — that the new
CBA would constitute the only agreement
between the parties.

II. In the present case, 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

60

57_Canape
UNION OF FILIPRO EMPLOYEES vs.
NLRC and NESTLE PHILIPPINES, INC.
G.R. No. 91025 : December 19, 1990.
FACTS: On June 22, 1988, the petitioner
Union of the Filipro Employees, the sole and
exclusive bargaining agent of all rank-and-
file employees of Nestle Philippines, (private
respondent) filed a Notice of Strike at the
DOLE raising the issues of CBA deadlock
and unfair labor practice. Private
respondent assailed the legal personality of
the proponents of the said notice of strike to
represent the Nestle employees, before the
NCMB. This notwithstanding, the NCMB
proceeded to invite the parties to attend the
conciliation meetings and to which private
respondent failed to attend contending that
it will deal only with a negotiating panel duly
constituted and mandated in accordance
with the UFE Constitution and By-laws.
Thereafter, Company terminated from
employment all UFE Union officers, and all
the members of the negotiating panel for
instigating and knowingly participating in a
strike staged at the Makati, Alabang,
Cabuyao and Cagayan de Oro on
September 11, 1987 without any notice of
strike filed and a strike vote obtained for the
purpose. The union filed a complaint for
illegal dismissal. LA upheld the validity of
the dismissal; NLRC en banc affirmed.
Subsequently, company concluded
separate CBAs with the general
membership of the union at Cebu/Davao
and Cagayan de Oro units; Assailing the
validity of these agreements, the union filed
a case of ULP against the company with the
NLRC-NCR Arbitration Branch Efforts to
resolve the dispute amicably were taken by
the NCMB but yielded negative result.
61
| Labor Relations-2A
Petitioner filed a motion asking the
Secretary of Labor to assume jurisdiction
over the dispute of deadlock in collective
bargaining between the parties. On October
28, 1988, Labor Secretary Franklin Drilon
“certified” to the NLRC the said dispute
between the UFE and Nestle, Philippines..
which reads as follows: xxx “The NLRC is
further directed to call all the parties
immediately and resolve the CBA deadlock
within twenty (20) days from submission of
the case for resolution.” Second Division of
the NLRC promulgated a resolution granting
wage increase and other benefits to
Nestle’s employees, ruling on non-economic
issues, as well as absolving the private
respondent of the Unfair Labor Practice
charge. Petitioner finds said resolution to be
inadequate and accordingly, does not agree
therewith. It filed a motion for
reconsideration, denied. Hence, this
petition.
ISSUE: (relative to the topic) WON
WHETHER OR NOT THE SECOND
DIVISION OF THE NLRC ACTED
WITHOUT JURISDICTION IN RENDERING
THE ASSAILED RESOLUTION, THE SAME
BEING RENDERED ONLY BY A DIVISION
OF THE PUBLIC RESPONDENT AND NOT
BY EN BANC;
HELD: This case was certified on October
28, 1988 when existing rules prescribed
that, it is incumbent upon the Commission
en banc to decide or resolve a certified
dispute. However, R.A. 6715 took effect
during the pendency of this case. Aside
from vesting upon each division the power
to adjudicate cases filed before the
Commission, said Act further provides that
the divisions of the Commission shall have
exclusive appellate jurisdiction over cases
within their respective territorial jurisdiction.

Section 5 of RA 6715 provides as follows:
xxxx The Commission may sit en banc or in
five (5) divisions, each composed of three
(3) members. The Commission shall sit en
banc only for purposes of promulgating
rules and regulations governing the hearing
and disposition of cases before any of its
divisions and regional branches and
formulating policies affecting
administration and operations.
Commission shall exercise its adjudicatory
and all other powers, functions and duties
through its divisions. xxxx In view of the
enactment of Republic Act 6715, the
aforementioned rules requiring
Commission en banc to decide or resolve a
certified dispute have accordingly been
repealed. Confirmed in Administrative Order
No. 36 (Series of 1989) promulgated by the
Secretary under his delegated rule-making
power. Moreover, it is to be emphasized
and it is a matter of judicial notice that since
the effectivity of R.A. 6715, many cases
have already been decided by the 5
divisions of the NLRC. We find no legal
justification in entertaining petitioner’s claim
considering that the clear intent of the
amendatory provision is to expedite the
disposition of labor cases filed before the
Commission. To rule otherwise would not
be congruous to the proper administration of
justice. ACCORDINGLY, PREMISES
CONSIDERED, the petition is DISMISSED.
The Resolutions of the NLRC, dated June 5,
1989 and August 8, 1989 are AFFIRMED,
except insofar as the ruling absolving the
private respondent of unfair labor practice
which is declared SET ASIDE
| Labor Relations-2A
58_Carillo
SAMAHANG MANGGAGAWA SA TOP
FORM MANUFACTURING-UNITED
WORKERS OF THE PHILIPPINES
(SMTFM-UWP) VS NLRC
FACTS:
its
Petitioner Samahang Manggagawa sa Top
The
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
the
Philippines, Inc. At the collective bargaining
negotiation held in Makati, the parties
agreed to discuss unresolved economic
issues. According to the minutes of the
meeting, Article VII of the collective
bargaining agreement was discussed
wherein the Union proposed that any future
wage increase given by the government
should be implemented by the company
across-the-board or non-conditional. The
RTWPB-NCR later on issued Wage Order
No. 01 and 02 providing for salary
increases.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, 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 (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.
ISSUE:
62

WON Top Form's promise at the collective
bargaining conferences to implement any
government-mandated wage increases on
an across-the-board basis is binding upon
the parties considering it was not part of the
CBA though contained in the Minutes of the
Meeting
HELD:
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 union's 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
63
| Labor Relations-2A
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 union's 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 therein. At the negotiations, it is
but natural for both management and labor
to adopt positions or make demands and
offer proposals and counterproposals.
However, nothing is considered final until
the parties have reached an agreement. In
fact, one of management's 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 respondent's promise by demanding
its incorporation in the CBA. Because the
proposal was never embodied in the CBA,
the promise has remained.
64
| Labor Relations-2A
59_Castro
Standard Chartered Bank Employees Union
vs. Confesor, G. R. No. 114974, June 16,
2004
FACTS
The petitioner asserts that the private
respondent committed ULP, i.e.,
interference in the selection of the Unions
negotiating panel, when Cielito Diokno, the
Banks Human Resource Manager,
suggested to the Unions President Eddie L.
Divinagracia that Jose P. Umali, Jr.,
President of the NUBE, be excluded from
the Unions negotiating panel. In support of
its claim, Divinagracia executed an affidavit,
stating that prior to the commencement of
the negotiation, Diokno approached him and
suggested the exclusion of Umali from the
Unions negotiating panel, and that during
the first meeting, Diokno stated that the
negotiation be kept a family affair.
ISSUE
1. whether or not the Union was able
to substantiate its claim of unfair labor
practice against the Bank arising from the
latters alleged interference with its choice of
negotiator;
2. whether or not the Union was able to
substantiate its claim of unfair labor practice
against the Bank arising from the latters
surface bargaining
HELD.
1. No. Article 248(a) of the Labor Code,
considers it an unfair labor practice when an
employer interferes, restrains or coerces
employees in the exercise of their right to

self-organization or the right to form
association. The right to self-organization
necessarily includes the right to collective
bargaining.
Parenthetically, if an employer interferes in
the selection of its negotiators or coerces
the Union to exclude from its panel of
negotiators a representative of the Union,
and if it can be inferred that the employer
adopted the said act to yield adverse effects
on the free exercise to right to self-
organization or on the right to collective
bargaining of the employees, ULP under
Article 248(a) in connection with Article 243
of the Labor Code is committed.
In order to show that the employer
committed ULP under the Labor Code,
substantial evidence is required to support
the claim. Substantial evidence has
been defined as such relevant evidence as
a reasonable mind might accept as
adequate to support a conclusion.[48] In the
case at bar, the Union bases its
claim of interference on the alleged
suggestions of Diokno to exclude Umali
from the Unions negotiating panel.
The circumstances that occurred during the
negotiation do not show that the suggestion
made by Diokno to Divinagracia is an anti-
union conduct from which it can be inferred
that the Bank consciously adopted such act
to yield adverse effects on the free exercise
of the right to self-organization and
collective bargaining of the employees,
especially considering that such was
undertaken previous to the commencement
of the negotiation and simultaneously with
Divinagracias suggestion that the bank
lawyers be excluded from its negotiating
panel.
65
| Labor Relations-2A
The records show that after the initiation of
the collective bargaining process, with the
inclusion of Umali in the Unions negotiating
panel, the negotiations pushed through. The
complaint was made only on August 16,
1993 after a deadlock was declared by
the Union on June 15, 1993.
It is clear that such ULP charge was merely
an afterthought. The accusation occurred
after the arguments and differences over
the economic provisions became heated
and the parties had become frustrated. It
happened after the parties started to involve
personalities. As the public respondent
noted, passions may rise, and as a result,
suggestions given under less adversarial
situations may be colored with unintended
meanings.[49] Such is what appears to have
happened in this case.
If at all, the suggestion made by Diokno to
Divinagracia should be construed as part of
the normal relations and innocent
communications, which are all part of the
friendly relations between the Union and
Bank.
2. The Union alleges that the Bank violated
its duty to bargain; hence, committed ULP
under Article 248(g) when it engaged in
surface bargaining. It alleged that the Bank
just went through the motions of bargaining
without any intent of reaching an
agreement, as evident in the Banks counter-
proposals. It explained that of the 34
economic provisions it made, the Bank only
made 6 economic
counterproposals. Further, as borne by the
minutes of the meetings, the Bank, after
indicating the economic provisions it had
rejected, accepted, retained or were open
for discussion, refused to make a list of

items it agreed to include in the economic
package.
Surface bargaining is defined as going
through the motions of negotiating without
any legal intent to reach an
[50]
agreement. The resolution of surface
bargaining allegations never presents an
easy issue. The determination of whether a
party has engaged in unlawful surface
bargaining is usually a difficult one because
it involves, at bottom, a question of the
intent of the party in question, and usually
such intent can only be inferred from the
totality of the challenged partys conduct
both at and away from the bargaining
table.[51] It involves the question of whether
an employers conduct demonstrates an
unwillingness to bargain in good faith or is
merely hard bargaining
The Union has not been able to show that
the Bank had done acts, both at and away
from the bargaining table, which tend to
show that it did not want to reach an
agreement with the Union or to settle the
differences between it and
the Union. Admittedly, the parties were not
able to agree and reached a workers, to signify their consent to the
deadlock. However, it is herein emphasized
that the duty to bargain does not compel
either party to agree to a proposal or require
the making of a concession.[53] Hence, the
parties failure to agree did not amount to
ULP under Article 248(g) for violation of the
duty to bargain.
66
| Labor Relations-2A
60_Dela Rosa
G.R. No. 75321 June 20, 1988
ASSOCIATED TRADE UNIONS
(ATU), petitioner,
vs.
HON. CRESENCIO B. TRAJANO, in his
capacity as Director of the Bureau of
Labor Relations, MOLE, BALIWAG
TRANSIT, INC. and TRADE UNIONS OF
THE PHILIPPINES AND ALLIED
SERVICES (TUPAS)-WFTU,respondents.
Facts: On March 25, 1986, the private
respondent union (TUPAS) filed with the
Malolos labor office of the MOLE a petition
for certification election at the Baliwag
Transit, Inc. among its rank-and-file
workers. Despite opposition from the herein
petitioner, Associated Trade Unions (ATU),
the petition was granted by the med-arbiter,
and a certification election was ordered.
ATU claims that the private respondent's
petition for certification election is defective
because (1) at the time it was filed, it did not
contain the signatures of 30% of the
certification election; and (2) it was not
allowed under the contract-bar rule because
a new collective bargaining agreement had
been entered into by ATU with the company
on April 1, 1986. ATU insists that its
collective bargaining agreement concluded
by it with Baliwag Transit, Inc, on April 1,
1986, should bar the certification election
sought by TUPAS as this would disturb the
said new agreement. Moreover, the
agreement had been ratified on April 3,
1986, by a majority of the workers and is
plainly beneficial to them because of the
many generous concessions made by the
management.
 | Labor Relations-2A

TUPAS for its part, states that the collective
bargaining agreement, besides being
vitiated by certain procedural defects, was
concluded by ATU with the management
only on April 1, 1986 after the filing of the
petition for certification election on March
25, 1986.
Issue: WON TUPAS was barred from filing
a petition for certification election under the
contract-bar rule under Section 3, Rule 5,
Book V of the Implementing Rules and
Regulations.
workers of the benefits of the said
agreement, it shall be recognized and given
effect on a temporary basis, subject to the
results of the certification election. The
agreement may be continued in force if ATU
is certified as the exclusive bargaining
representative of the workers or may be
rejected and replaced in the event that
TUPAS emerges as the winner.
61_De Leon

Ruling: No.

Section 3, Rule 5, Book V of the

Implementing Rules and Regulations simply
provides that a petition for certification
election or a motion for intervention can only
be entertained within sixty days prior to the
expiry date of an existing collective
bargaining agreement. Otherwise put, the
rule prohibits the filing of a petition for
certification election during the existence of
a collective bargaining agreement except
within the freedom period, as it is called,
when the said agreement is about to expire.
The purpose, obviously, is to ensure
stability in the relationships of the workers
and the management by preventing
frequent modifications of any collective
bargaining agreement earlier entered into
by them in good faith and for the stipulated
original period.

The said CBA was entered into at a time

when the petition for certification election
had already been filed by TUPAS and was
then pending resolution. The CBA cannot
be deemed permanent, precluding the
commencement of negotiations by another
union with the management. In the
meantime however, so as not to deprive the

67

62_Del Rosario
New Pacific Timber & Supply Company
vs NLRC
GR No. 124224 March 17, 2000
Facts: National Federation of Labor (NFL),
the sole and exclusive bargaining agent of
the rank- and-file employees of petitioner
Company, filed a complaint for unfair labor
practice (ULP) against the latter on the
ground of refusal to bargain collectively.
NFL had received a favorable decision from
the NLRC and SC (upon appeal); hence
petitioner Company was directed to pay the
142 employees entitled to different
monetary benefits under the CBA. Petitioner
Company complied; and, the corresponding
quitclaims were executed. The case was
considered closed following NFL's
manifestation that it will no longer appeal
the October 18, 1993 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" on May 12, 1994. In their petition,
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. They claimed that
NFL's misrepresentations had precluded
them from appealing their exclusion.
Treating the petition for relief as an appeal,
the NLRC entertained the same and issued
a Resolution ordering the Company to pay
these 350 other complainants. Hence this
petition seeking to annul such Resolution on
the ground that Mariano Akilit and 350
68
| Labor Relations-2A
others are not entitled for the benefits of the
CBA for they were not yet employed much
less were members of the bargaining unit
during the term of the CBA.
Issue:
a. Whether or not Collective Bargaining
Agreement (CBA) as to its economic
provisions be extended beyond the term
expressly stipulated therein, and, in the
absence of a new CBA, even beyond the
three-year period provided by law
b. whether or not employees hired after the
stipulated term of a CBA entitled to the
benefits provided thereunder
Held:
a. Yes, the CBA will extend beyond
the term expressly stipulated
therein in the absence of a new
CBA
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
year 1984 - the last year that the economic
provisions of the CBA were, pursuant to
contract and law, effective. Petitioner claims
that there is no contractual basis for the
grant of CBA benefits such as wage
increases in 1985 and subsequent years,
since the CBA stipulates only the increases
for the years 1981 to 1984.
Anent the issue of whether or not the
term of an existing CBA, particularly as to its
economic provisions, can be extended
beyond the period stipulated therein, and
even beyond the three-year period
prescribed by law, in the absence of a new
agreement, Article 253 of the Labor Code
explicitly provides:

ART. 253. Duty to bargain
collectively when there exists a
collective bargaining agreement. -
When there is a collective bargaining
agreement, the duty to bargain
collectively shall also mean that
neither party shall terminate nor
modify such agreement during its
lifetime. However, either party can
serve a written notice to terminate or
modify the agreement at least sixty
(60) days prior to its expiration
date. It shall be the duty of both
parties to keep the status quo and to
continue in full force and effect the
terms and conditions of the existing
agreement during the 60-day period
and/or until a new agreement is
reached by the parties.
It is clear from the above provision
of law that until a new Collective Bargaining
Agreement has been executed by and
between the parties, they are duty-bound to
keep the status quo and to continue in full
force and effect the terms and conditions of
the existing agreement. The law does not
provide for any exception nor qualification
as to which of the economic provisions of
the existing agreement are to retain force
and effect; therefore, it must be understood
as encompassing all the terms and
conditions in the said agreement. Sccal r
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 No. RAB-IX-0334-82; 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
69
| Labor Relations-2A
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.
b. Yes, the employees hired after the
stipulated term of a CBA are
entitled to the benefits provided
thereunder
When a collective bargaining contract is
entered into by the union representing the
employees and the employer, even the non-
member employees are entitled to the
benefits of the contract. To accord its
benefits only to members of the union
without any valid reason would constitute
undue discrimination against nonmembers.
It is even conceded, that a laborer can claim
benefits from a CBA entered into between
the company and the union of which he is a
member at the time of the conclusion of the
agreement, after he has resigned from said
union. his is in consonance with our ruling
that the terms and conditions of a collective
bargaining agreement continue to have
force and effect beyond the stipulated term
when no new agreement is executed by and
between the parties to avoid or prevent the
situation where no collective bargaining
agreement at all would govern between the
employer company and its employees.

63_Diola
UNION OF FILIPRO EMPLOYEES (UFE)
vs. NESTLE PHILIPPINES INC.
(G.R. Nos 88710-13, December 19, 1990)
FACTS:
Petitioners in this case are the various
employees of Nestle Philippines under their
Union UFE. The first incident happened when
UFE filed a notice of strike with the Bureau of
Labor Relations against Filipro (now NESTLE).
UFE likewise filed a complaint for unfair labor
practice (ULP) against Nestle for violation of the
Labor Code on Holiday Pay and non-
implementation of the CBA, among others.
Through a petition, Nestle sought the
assumption of jurisdiction over the dispute of the
NLRC for compulsory arbitration. Then Minister
of Labor Blas Ople assumed jurisdiction over the
dispute and strictly enjoined concerted actions of
strikes, lockouts, noise barrages and other acts
which tend to disrupt company operations during
office hours.
Notwithstanding the said resolution against any
concerted activity, and an absence of a
restraining order, the UFE still proceeded with a
strike. The UFE officers likewise distributed
leaflets to employees of Nestle and passers-by
advocating a boycott of company products.
Nestle filed a petition to declare the strike illegal
premised on the violation of the CBA provisions
on “no strike/no lockout” clause and the
grievance machinery provisions on settlement of
disputes.
Despite subsequent orders of Labor Minister
Ople and the then new Labor Minister Sanchez,
the UFE refused to stop the strikes. A series of
petitions and strikes later ensued.
After trial on the merits, the NLRC issued a
decision declaring the strikes of UFE illegal and
that the UFE is guilty of unfair labor practice.
70
| Labor Relations-2A
The UFE assigns several errors of the NLRC’s
judgment. the power of the Secretary of Labor
under Art. 263(g) of the Labor Code to assume
jurisdiction over a labor dispute tainted with
national interests, or to certify the same for
compulsory arbitration. UFE contends that Arts.
263 and 264 are based on the 1973
Constitution, specifically Sec. 9 of Art. II thereof,
the pertinent portion of which reads:
"Sec. 9. . . . The State may provide for
compulsory arbitration." (p. 801, Rollo)
UFE argues that since the aforecited provision
of Sec. 9 is no longer found in the 1987
Constitution, Arts. 263(g) and 264 of the Labor
Code are now "unconstitutional and must be
ignored.
ISSUE: WON the strike was legal and WON
the aforecited provisions of the Labor Code
are applicable.
RULING: NO, the strike is NOT legal and
YES, the aforecited provisions of the Labor
code are STILL APPLICABLE.
Article 7 of the New Civil Code declares
that:
Laws are repealed only by
subsequent ones, and their violation
or non-observance shall not be
excused by disuse or custom or
practice to the contrary.
In the case at bar, no law has ever been
passed by Congress expressly repealing
Articles 263 and 264 of the Labor Code.
Neither may the 1987 Constitution be
considered to have impliedly repealed the
said Articles considering that there is no
showing that said articles are inconsistent
with the said Constitution. Moreover, no
court has ever declared that the said articles
are inconsistent with the 1987 Constitution.

Articles 263 (g) and 264 of the Labor Code
have been enacted pursuant to the police
power of the State to promote the order,
safety, health, morals and general welfare
of society
On the issue of the legality of the strike
committed, UFE seeks to absolve itself by
pointing out qualifying factors such as
motives, good faith, absence of findings on
specific participation and/or liability, and
limiting the no-strike provision to economic
strikes.
UFE completely misses the underlying
principle embodied in Art. 264(g) on the
settlement of labor disputes and this is, that
assumption and certification orders are
executory in character and are to be strictly
complied with by the parties even during the
pendency of any petition questioning their
validity. This extraordinary authority given to
the Secretary of Labor is aimed at arriving
at a peaceful and speedy solution to labor
disputes, without jeopardizing national
interests.
Regardless therefore of their motives, or the
validity of their claims, the striking workers
must cease and/or desist from any and all
acts that tend to, or undermine this authority
of the Secretary of Labor, once an
assumption and/or certification order is
issued. They cannot, for instance, ignore
return-to-work orders, citing unfair labor
practices on the part of the company, to
justify their actions.
One other point that must be underscored is
that the return-to-work order is issued
pending the determination of the legality or
illegality of the strike. It is not correct to say
that it may be enforced only if the strike is
legal and may be disregarded if the strike is
illegal, for the purpose precisely is to
71
| Labor Relations-2A
maintain the status quo while the
determination is being made.
The return to work order does not so much
confer a right as it imposes a duty; and
while as a right it may be waived, it must be
discharged as a duty even against the
worker's will. Returning to work in this
situation is not a matter of option or
voluntariness but of obligation. The worker
must return to his job together with his co-
workers so the operations of the company
can be resumed and it can continue serving
the public and promoting its interest.":
We also wish to point out that an
assumption and/or certification order of the
Secretary of Labor automatically results in a
return-to-work of all striking workers,
whether or not a corresponding order has
been issued by the Secretary of Labor.
Thus, the striking workers erred when they
continued with their strike alleging absence
of a return-to-work order. Article 264(g) is
clear. Once an assumption/certification
order is issued, strikes are enjoined, or if
one has already taken place, all strikers
shall immediately return to work.
A strike that is undertaken despite the
issuance by the Secretary of Labor of an
assumption or certification order becomes a
prohibited activity and thus illegal.

64_Dizon (February and August 2000)
MANILA ELECTRIC COMPANY VS. SEC.
OF LABOR LEONARDO QUISUMBING
and MERALCO EMPLOYEES AND
WORKERS ASSOC.
G.R. No. 127598 February 22, 2000
FACTS:
In 1999, the Supreme Court promulgated a
decision directing the parties to execute a
CBA which provided for increase in wages
and retroactive application of arbitral
awards. MERALCO filed this petition
arguing that an increase in wages will result
in higher rates of electricity which will be
passed to the consumers. The Union
likewise asks for reconsideration insofar as
the 1999 decision which denied them the
benefit of being granted loans to set up a
cooperative. Finally, the Union questions
the right given to MERALCO in contracting
out jobs without need to consult the Union.
ISSUES:
1. W/N the increase in wages will result in
higher prices of electricity.
2. W/N the grant of Collective Bargaining
Agreement (CBA) arbitral awards
retroactive
3. W/N the cooperative may demand for the
loan for a cooperative
4. W/N contracting without need to consult
the Union is a valid provision
RULING:
1. ON THE INCREASE IN WAGES
No, it doesn’t follow. An increase in the
prices of electric current needs the approval
of the appropriate regulatory government
72
| Labor Relations-2A
agency and does not automatically result
from a mere increase in the wages of
petitioner's employees. Collective
bargaining disputes particularly those
affecting the national interest and public
service "requires due consideration and
proper balancing of the interests of the
parties to the dispute and of those who
might be affected by the dispute. It should
be noted that the relations between labor
and capital is impressed with public interest
which must yield to the common
good. Neither party should act oppressively
against the other or impair the interest or
convenience of the public. Besides, matters
of salary increases are part of management
prerogative.
2. ON THE RETROACTIVITY OF
ARBITRAL AWARDS
Labor laws are silent as to when an arbitral
award in a labor dispute where the
Secretary had assumed jurisdiction by virtue
of Article 263 (g) of the Labor Code shall
retroact. In general, a CBA negotiated within
six months after the expiration of the
existing CBA retroacts to the day
immediately following such date and if
agreed thereafter, the effectivity depends on
the agreement of the parties. On the other
hand, the law is silent as to the retroactivity
of a CBA arbitral award or that granted not
by virtue of the mutual agreement of the
parties but by intervention of the
government. Despite the silence of the law,
the Court rules herein that CBA arbitral
awards granted after six months from the
expiration of the last CBA shall retroact to
such time agreed upon by both employer
and the employees or their union. Absent
such an agreement as to retroactivity, the
award shall retroact to the first day after the
 | Labor Relations-2A

six-month period following the expiration of management prerogative subject only to

the last day of the CBA should there be one.
In the absence of a CBA, the Secretary's
determination of the date of retroactivity as
part of his discretionary powers over arbitral
awards shall control.
3. ON COOPERATIVE’S DEMAND FOR
LOAN
On the allegation concerning the grant of
loan to a cooperative, there is no merit in
the union's claim that it is no different from
housing loans granted by the employer. The
award of loans for housing is justified
because it pertains to a basic necessity of
life. It is part of a privilege recognized by the
employer and allowed by law. In contrast,
providing seed money for the establishment
of the employee's cooperative is a matter in
which the employer has no business
interest or legal obligation. Courts should
not be utilized as a tool to compel any
person to grant loans to another nor to force
parties to undertake an obligation without
justification.
special laws and agreements on the matter
and the fair standards of justice.24
The management cannot be denied the
faculty of promoting efficiency and attaining
economy by a study of what units are
essential for its operation. It has the ultimate
determination of whether services should be
performed by its personnel or contracted to
outside agencies. While there should be
mutual consultation, eventually deference is
to be paid to what management
decides.25 Contracting out of services is an
exercise of business judgment or
26
management prerogative. Absent proof
that management acted in a malicious or
arbitrary manner, the Court will not interfere
with the exercise of judgment by an
employer.

4. ON CONTRACTING WITHOUT
CONSULTING THE UNION

The employer is allowed to contract out

services for six months or more. However, a
line must be drawn between management
prerogatives regarding business
operations per se and those which affect the
rights of employees, and in treating the
latter, the employer should see to it that its
employees are at least properly informed of
its decision or modes of action in order to
attain a harmonious labor-management
relationship and enlighten the workers
concerning their rights. Hiring of workers is
within the employer's inherent freedom to
regulate and is a valid exercise of its

73

MANILA ELECTRIC CO. VS. HON. SEC.
OF LABOR LEONARDO QUISUMBING
AND MERALCO EMPLOYEES AND
WORKERS ASSOCIATION (MEWA)
G.R. No. 127598 August 1, 2000
FACTS:
Petitioner Manila Electric Company filed
with this Court, a "Motion for Partial
Modification (Re: Resolution Dated 22
February 2000)" anchored on the following
grounds:
I. Honorable Court’s ruling on the
retroactivity issue: (a) fails to
account for previous rulings of the
Court on the same issue; (b) fails to
indicate the reasons for reversing
the original ruling in this case on the
retroactivity issue; and (c) is
internally inconsistent.
II. Honorable Court’s ruling on the
retroactivity issue does not take into
account the huge cost that this
award imposes on petitioner,
estimated at no less than P800
Million.
Petitioner specifically assails the Resolution
as being logically flawed, arguing,
First, that while it alludes to the
Secretary’s discretionary powers
only in the absence of a CBA, Article
253-A of the Labor Code always
presupposes the existence of a prior
or subsisting CBA; hence the
exercise by the Secretary of his
discretionary powers will never come
to pass.
74
| Labor Relations-2A
Second, petitioner contends that
this Court erred in holding that the
effectivity of CBA provisions are
automatically retroactive. Petitioner
invokes, rather, this Court’s ruling in
the Decision dated January 27,
1999, which was modified in the
assailed Resolution, that in the
absence of an agreement between
the parties, an arbitrated CBA takes
on the nature of any judicial or
quasi-judicial award; it operates and
may be executed only prospectively
unless there are legal justifications
for its retroactive application.
Third, petitioner contends that the
Resolution is internally flawed
because when it held that the award
shall retroact to the first day after the
six-month period following the
expiration of the last day of the CBA,
the reckoning date should have
been June 1, 1996, not December 1,
1995, which is the last day of the
three-year lifetime of the economic
provisions of the CBA.
The petitioner also prays that the two-year
term of the CBA be fixed from December
28, 1996 to December 27, 1998 since the
application of the arbitral award will cost it
no less than P800 Million. Petitioner also
seeks this Court’s declaration that the
award of P2,000.00 be paid to petitioner’s
rank-and-file employees during this two-
year period. In the alternative, petitioner
prays that the award of P2,000.00 be made
to retroact to June 1, 1996 as the effectivity
date of the CBA.
ISSUE:

W/N Art. 253-A of the Labor Code
applies in this case.
W/N collective bargaining agreement
shall take effect only upon its signing and
shall remain in full force and effect for a
period of five years.
RULING:
1. No. Article 253-A is hereunder
reproduced for ready reference:
ART. 253-A. Terms of a collective
bargaining agreement. --- Any
Collective Bargaining Agreement
that the parties may enter into shall,
insofar as the representation aspect
is concerned, be for a term of five (5)
years. No petition questioning the
majority status of the incumbent
bargaining agent shall be
entertained and no certification
election shall be conducted by the
Department of Labor and
Employment outside of the sixty-day
period immediately before the date
of expiry of such five year term of
the Collective Bargaining
Agreement. All other provisions of
the Collective Bargaining Agreement
shall be renegotiated not later than
three (3) years after its
execution. Any agreement on such
other provisions of the Collective
Bargaining Agreement entered into
within six (6) months from the date
of expiry of the term of such other
provisions as fixed in such Collective
Bargaining Agreement, shall retroact
to the day immediately following
such date. If any such agreement is
entered into beyond six months, the
parties shall agree on the duration of
75
| Labor Relations-2A
retroactivity thereof. In case of a
deadlock in the renegotiation of the
collective bargaining agreement, the
parties may exercise their rights
under this Code.
Under the circumstances of the case, Article
253-A cannot be properly applied to herein
case. As correctly stated by public
respondent in his assailed Order of April 12,
1991 dismissing petitioner’s Motion for
Reconsideration –
Anent the alleged lack of basis for the
retroactivity provisions awarded, we would
stress that the provision of law invoked by
the Hospital, Article 253-A of the Labor
Code, speaks of agreements by and
between the parties, and not arbitral awards
. . . (p. 818 Rollo).
Therefore, in the absence of a specific
provision of law prohibiting retroactivity of
the effectivity of arbitral awards issued by
the Secretary of Labor pursuant to Article
263(g) of the Labor Code, such as herein
involved, public respondent is deemed
vested with plenary and discretionary
powers to determine the effectivity
thereof (223 SCRA 779, 792-793 [1993];
reiterated in Philippine Airlines, Inc. v.
Confessor 231 SCRA 41 [1994]).
Indeed, petitioner has not shown that the
question of effectivity was not included in
the general agreement of the parties to
submit their dispute for arbitration. To the
contrary, as the order of the labor arbiter
states, this question was among those
submitted for arbitration by the parties:

2.As regards the "Effectivity and Duration"
clause, the company proposes that the
collective bargaining agreement shall take
effect only upon its signing and shall remain
in full force and effect for a period of five
years. The union proposes that the
agreement shall take effect retroactive to
March 15, 1989, the expiration date of the
old CBA.
And after an evaluation of the parties’
respective contention and argument thereof,
it is believed that that of the union is fair and
reasonable. It is the observation of this
Arbitrator that in almost subsequent CBAs,
the effectivity of the renegotiated CBA,
usually and most often is made effective
retroactive to the date when the immediately
preceding CBA expires so as to give a
semblance of continuity. Hence, for this
particular case, it is believed that there is
nothing wrong adopting the stand of the
union, that is that this CBA be made
retroactive effective March 15, 1989.
Parenthetically, the Decision rendered in the
case at bar on January 27, 1999 ordered
that the CBA should be effective for a term
of two years counted from December 28,
1996 (the date of the Secretary of Labor’s
disputed Order on the parties’ motion for
reconsideration) up to December 27,
1998. That is to say, the arbitral award was
given prospective effect.
Upon a reconsideration of the Decision, this
Court issued the assailed Resolution which
ruled that where an arbitral award 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 thereof, the arbitral award shall
retroact to the first day after the six-month
period following the expiration of the last
76
| Labor Relations-2A
day of the CBA. In the dispositive portion,
however, the period to which the award
shall retroact was inadvertently stated as
beginning on December 1, 1995 up to
November 30, 1997.
In resolving the motions for reconsideration
in this case, this Court took into account the
fact that petitioner belongs to an industry
imbued with public interest. As such, this
Court cannot ignore the enormous cost that
petitioner will have to bear as a
consequence of the full retroaction of the
arbitral award to the date of expiry of the
CBA, and the inevitable effect that it would
have on the national economy. On the other
hand, under the policy of social justice, the
law bends over backward to accommodate
the interests of the working class on the
humane justification that those with less
privilege in life should have more in law.
Balancing these two contrasting interests,
this Court turned to the dictates of fairness
and equitable justice and thus arrived at a
formula that would address the concerns of
both sides. Hence, this Court held that the
arbitral award in this case be made to
retroact to the first day after the six-month
period following the expiration of the last
day of the CBA, i.e., from June 1, 1996 to
May 31, 1998.
This Court, therefore, maintains the
foregoing rule in the assailed Resolution pro
hac vice. It must be clarified, however, that
consonant with this rule, the two-year
effectivity period must start from June 1,
1996 up to May 31, 1998, not December 1,
1995 to November 30, 1997.1âwphi1

65_Dona
SAN MIGUEL CORP. EMPLOYEES
UNION- PTGWO, et al. v. SECRETARY
OF LABOR HON. CONFESOR, SAN
MIGUEL CORP., MAGNOLIA CORP. and
SAN MIGUEL FOODS, INC.
G.R. No. 111262 September 19, 1996
FACTS:
Petitioner-union entered into CBA
with private respondent San Miguel
Corporation (SMC) to take effect upon the
expiration of the previous CBA or on June
30, 1989. This CBA provided, among
others, that:
ARTICLE XIV
DURATION OF AGREEMENT
SECTION 1. This Agreement which shall be
binding upon the parties hereto and their
respective successors-in-interest, shall
become effective and shall remain in force
and effect until June 30, 1992.
SEC. 2. In accordance with Article 253-A of
the Labor Code as amended, the term of
this Agreement insofar as the
representation aspect is concerned, shall be
for five (5) years from July 1, 1989 to June
30, 1994. Hence, the freedom period for
purposes of such representation shall be
sixty (60) days prior to June 30, 1994.
SEC. 3. Sixty (60) days prior to June 30,
1992 either party may initiate negotiations of
all provisions of this Agreement, except
insofar as the representation aspect is
concerned. If no agreement is reached in
such negotiations, this Agreement shall
nevertheless remain in force up to the time
a subsequent agreement is reached by the
parties.
77
| Labor Relations-2A
SMC management informed its
employees that the company which was
composed of four operating divisions would
undergo a restructuring for its business
expansion. Two divisions, Magnolia and
Feeds and Livestock Division were spun-off
and became two separate and distinct
corporations: Magnolia Corporation
(Magnolia) and San Miguel Foods, Inc.
(SMFI). Notwithstanding the spin-offs, the
CBA remained in force and effect.
After June 30, 1992, the CBA was
renegotiated in accordance with the terms
of the CBA and Article 253-A of the Labor
Code.
PETITIONER-UNION’S CLAIM
The bargaining unit of SMC
should still include the employees of the
spun-off corporations; and that the
renegotiated terms of the CBA shall be
effective only for the remaining period of two
years or until June 30, 1994. Petitioner-
union contends that the duration for the
non-representation provisions of the CBA
should be coterminous with the term of the
bargaining agency which in effect shall be
for the remaining two years of the current
CBA.
RESPONDENT’S CONTENTION
SMC contended that the
members/employees who had moved to
Magnolia and SMFI, automatically ceased
to be part of the bargaining unit at the SMC.
Furthermore, the CBA should be effective
for three years in accordance with Art. 253-
A of the Labor Code.
Petitioner-union declared a deadlock
and consequently filed a Notice of Strike
against SMC. No settlement was arrived at
despite several meetings held between the

parties through NCMB. As prayed for by
private respondents, the Secretary of Labor
assumed jurisdiction over the labor dispute
on November 10, 1992. Several conciliation
meetings were held but still no
agreement/settlement was arrived at by
both parties.
The Secretary of Labor resolved the
labor dispute and issued the assailed Order
directing, among others, that the
renegotiated terms of the CBA shall be
effective for the period of three (3) years
from June 30, 1992; and that such CBA
shall cover only the employees of SMC
and not of Magnolia and SMFI.
ISSUE/S:
1) Whether or not the duration of the
renegotiated terms of the CBA is to be
effective for three years or for only two
years; and
2) Whether or not the bargaining unit of
SMC includes also the employees of
Magnolia and SMFI.
RULING:
The petition is DISMISSED for lack of
merit. There is no grave abuse of discretion
on the part of the Secretary of Labor in
rendering the assailed Order.
HELD:
1. The Court agrees with the Secretary of
Labor that the renegotiated terms of the
CBA at SMC should run for a period of three
(3) years.
Art. 253-A of the Labor Code as
amended reads:
ART. 253-A. Terms of a Collective
Bargaining Agreement. Any Collective
78
| Labor Relations-2A
Bargaining Agreement that the parties may
enter into shall, insofar as the
representation aspect is concerned, be for a
term of five (5) years … All other provisions
of the Collective Bargaining Agreement
shall be renegotiated not later than three (3)
years after its execution.
Article 253-A is a new
provision. This was incorporated by Section
21 of Republic Act No. 6715 (the Herrera-
Veloso Law) which took effect on March 21,
1989. This new provision states that the
CBA has a term of five (5) years instead of
three years, before the amendment of the
law as far as the representation aspect is
concerned. The representation aspect
refers to the identity and majority status of
the union that negotiated the CBA as the
exclusive bargaining representative of the
appropriate bargaining unit concerned. All
other provisions simply refers to the rest of
the CBA, economic as well as non-
economic provisions, except
representation.The law is clear and definite
on the duration of the CBA insofar as the
representation aspect is concerned, but is
quite ambiguous with the terms of the other
provisions of the CBA.
If we look into the deliberations
leading to the passage of the law, the
legislators were more inclined to have
the period of effectivity for three (3)
years insofar as the economic as well as
non-economic provisions are concerned,
except representation. The framers of the
law wanted to maintain industrial peace and
stability by having both management and
labor work harmoniously together without
any disturbance. Thus, no outside union can
enter the establishment within five (5) years
and challenge the status of the incumbent
union as the exclusive bargaining
agent. Likewise, the terms and conditions of

employment (economic and non-economic)
cannot be questioned by the employers or
employees during the period of effectivity of
the CBA. The CBA is a contract between
the parties and the parties must respect the
terms and conditions of the agreement.
Notably, the framers of the law did not give
a fixed term as to the effectivity of the terms
and conditions of employment. It was left to
the parties to fix the period. In the instant
case, it is not difficult to determine the
period of effectivity for the non-
representation provisions of the
CBA. Taking it from the history of their
CBAs, SMC intended to have the terms of
the CBA effective for three (3) years
reckoned from the expiration of the old
or previous CBA which was on June 30,
1989.
The company voluntary recognizes
the continuing representative status of the
unions after the aforementioned spin-offs
and the stand of the company for a 3-year
renegotiated cycle when the economic
provisions of the existing CBAs
expired. Precisely, the company conceded
to face the same union notwithstanding the
spin-offs in order to preserve industrial
peace during the infancy of the two
corporations. If the union would insist on a
shorter (2-year) renegotiated term, then all
the advantages gained by both parties in
this regard would become futile. In order to
effect a smooth transition, the companies
concerned continued to recognize the
existing unions as the bargaining agents of
their respective bargaining units. In the
meantime, the other unions in these
companies eventually concluded their CBA
negotiations on the remaining term and all
of them agreed on a 3-year cycle. Notably,
the following CBAs were forged
79
| Labor Relations-2A
incorporating a term of 3-years on the
renegotiated provisions.
The issue as to the term of the non-
representation provisions of the CBA must
be resolved in the Memorandum of the
Secretary of Labor dated February 24, 1994
which clarified that the parties are
encouraged to enter into a renegotiated
CBA with a term which would coincide with
the aforesaid five (5) year term of the
bargaining representative. In the event
however, that the parties, by mutual
agreement, enter into a renegotiated
contract with a term of three (3) years or
one which does not coincide with the said 5-
year term, and said agreement is ratified by
majority of the members in the bargaining
unit, the subject contract is valid and legal
and therefore, binds the contracting
parties. The same will however not
adversely affect the right of another union to
challenge the majority status of the
incumbent bargaining agent within sixty (60)
days before the lapse of the original five (5)
year term of the CBA.
2. The bargaining unit of SMC DOES NOT
include employees of Magnolia and SMFI.
As a result of the spin-offs,
Magnolia and SMFI became distinct
entities with separate juridical
personalities. Thus, they cannot belong to
a single bargaining unit. In determining an
appropriate bargaining unit, the test of
grouping is mutuality or commonality of
interests affecting a grouping of employees
who have substantial, mutual interests in
wages, hours, working conditions and other
subjects of collective bargaining.
Considering the spin-offs, the companies
would consequently have their respective
and distinctive concerns in terms of the

nature of work, wages, hours of work and
other conditions of employment.
SMC is engaged in the business of
beer manufacturing. Magnolia is involved in
the manufacturing and processing of dairy
products while SMFI is involved in the
production of feeds and the processing of
chicken. The nature of their products and
scales of business may require different
skills which must necessarily be
commensurated by different compensation
packages. The different companies may
have different volumes of work and different
working conditions. Hence, the employees
of the different companies see the need
to group themselves together and
organize themselves into distinctive and
different groups. It would then be best to
have separate bargaining units for the
different companies where the
employees can bargain separately
according to their needs and according
to their own working conditions.
80
| Labor Relations-2A
66_Duquila
RIVERA, ET AL. vs. ESPIRITU, ET AL.
G.R. No. 135547 January 23, 2002
FACTS: Faced with bankruptcy, PAL
adopted a rehabilitation plan and downsized
its labor force by more than one-third,
prompting PALEA to go on strike to protest
the retrenchment measures adopted by the
airline. A Task Force composed of herein
public respondents was created to hold
conciliation meetings between PAL
management and the unions representing
the airline employees, among them PALEA.
PAL eventually ceased its operations and
sent notices of termination to its employees.
However, PALEA offered a 10-year
moratorium on strikes and similar actions
and a waiver of some of the economic
benefits in the existing CBA. PAL
management accepted the PALEA proposal
and the necessary referendum was
scheduled. Of the votes cast, 61% were in
favor of accepting the PAL-PALEA
agreement, while 34% rejected it. On the
same date PAL resumed domestic
operations, seven officers and members of
PALEA filed this instant petition to annul the
agreement entered into between PAL and
PALEA on the ground that public
respondents gravely abused their discretion
and exceeded their jurisdiction in actively
pursuing the conclusion of the PAL-PALEA
agreement as the constitutional rights to
self-organization and collective bargaining,
being founded on public policy, may not be
waived, nor the waiver, ratified.
ISSUE: Whether or not the agreement
stipulating the suspension of the PAL-
PALEA CBA is unconstitutional and contrary
to public policy.
HELD: NO.

There is 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 PAL’s
ground employees, that voluntarily entered
into the CBA with PAL. It was also PALEA
that voluntarily opted for the 10-year
suspension of the CBA. Either case was the
union’s exercise of its right to collective
bargaining. The right to free collective
bargaining includes the right to suspend it.
Further, the acts of public
respondents in sanctioning the 10-year
suspension of the PAL-PALEA CBA did not
contravene the "protection to labor" policy of
the Constitution. The agreement afforded
full protection to labor; promoted the shared
responsibility between workers and
employers; and exercised the voluntary
modes in settling disputes, including
conciliation to foster industrial peace.
Moreover, the agreement does not
violate the five-year representation limit
mandate 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
81
| Labor Relations-2A
abeyance the limit on the representation
period.
PALEA PROPOSAL (Terms and
Conditions)
1. Each PAL employee shall be granted
60,000 shares of stock with a par value of
P5.00, from Mr. Lucio Tan’s 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.
 | Labor Relations-2A

c. No salary deduction, with full 67_Eisma

medical benefits.

5. PAL shall grant the benefits under the 26

July 1998 Memorandum of Agreement PHILIPPINE AIRLINES, INC. vs. NLRC,
PAL EMPLOYEES ASSOCIATION
forged by and between PAL and PALEA, to
(PALEA) et al
those employees who may opt to retire or G.R. No. 85985 August 13, 1993
be separated from the company.
Management prerogative is not boundless.
6. PALEA members who have been Line must be drawn between policies which
retrenched but have not received separation are purely business-oriented and those
benefits shall be granted priority in the which affect rights of employees.
hiring/rehiring of employees. Employee’s right to participate in
7. In the absence of applicable Company policymaking is vital in promoting industrial
rule or regulation, the provisions of the peace.
Labor Code shall apply.

FACTS:

PAL completely revised its 1966 Code of

Discipline. The Code was circulated among
the employees and was immediately
implemented, and some employees were
instantly subjected to the disciplinary
measures. Respondent PALEA filed a
complaint before the NLRC contending that
PAL is guilty of unfair labor practice due to
its unilateral implementation of the Code,
specifically violating par. E and G of Article
249 and Article 253 of the Labor Code.
PALEA alleged that copies of the Code
had been circulated in limited numbers; that
being penal in nature the Code
must conform with the requirements of
sufficient publication, and that the Code was
arbitrary, oppressive, and prejudicial to the
rights of the employees.

Respondent prayed that implementation of

the Code be held in abeyance; that PAL
should first discuss the substance of the
Code; that employees dismissed under the
Code be reinstated and their cases

82
 | Labor Relations-2A

subjected to further hearing; and that PAL
should pay damages.
PAL asserts its management prerogative
and further alleged that it had not violated
the CBA or any provision of the Labor Code.
It maintained that Article 253 of the Labor
Code cited by PALEA was inapplicable
since the current CBA had been negotiated.
adopted cannot be properly implemented in
the absence of full cooperation of the
employees. Such cooperation cannot be
attained if the employees are left out in the
determination of cardinal and fundamental
matters affecting their employment.

ISSUE: Whether management may be

compelled to share with the union or its
employees its prerogative of formulating a
code of discipline.

HELD: Yes.

PAL asserts that when it revised its Code on

March 15, 1985, there was no law which
mandated the sharing of responsibility
therefor between employer and employee. It
was only on March 2, 1989, with the
approval of Republic Act No. 6715,
amending Article 211 of the Labor Code,
that the law explicitly considered it a State
policy "to ensure the participation of workers
in decision and policy-making processes
affecting the rights, duties and welfare."
However, even in the absence of said clear
provision of law, the exercise of managerial
prerogatives is not unlimited. It is
circumscribed by limitations found in law, a
collective bargaining agreement, or the
general principles of fair play and justice.

The objectionable provisions of the Code

reveal that they are not purely business-
oriented nor do they concern the
management aspect of the business.
Management should see to it that its
employees are at least properly informed of
its decisions. A provision in the CBA may
not be interpreted as cession of employees'
rights to participate in the deliberation of
matters which may affect their rights and the
formulation of policies such as the
formulation of a code of discipline.
Whatever disciplinary measures are

83

68_Fabon
Rights of legitimate labor organizations
INDOPHIL TEXTILE MILL WORKERS
UNION-PTGWO vs. VOLUNTARY
ARBITRATOR TEODORICO P. CALICA
and INDOPHIL TEXTILE MILLS, INC.
G.R. No. 96490 February 3,
1992
FACTS:
Petitioner Indophil Textile Mill Workers
Union-PTGWO (petitioner Union) is a
legitimate labor organization and the
exclusive bargaining agent of all the rank-
and-file employees of Indophil Textile Mills,
Inc (Indophil). Private respondent Indophil is
a corporation engaged in the manufacture,
sale and export of yarns and of materials of
similar character.
Petitioner Union and Indophil executed a
CBA.
Indophil Acrylic Manufacturing Corporation
(Acrylic) was formed and registered with the
SEC. It became operational and it hired
workers according to its own criteria and
standards. The workers of Acrylic unionized
and a CBA was executed.
Petitioner Union contends that the plant
facilities built and set up by Acrylic should
be considered as an extension or expansion
of the facilities of Indophil.
In other words, it is petitioner Union's
contention that Acrylic is part of the Indophil
bargaining unit, and that the creation of
Acrylic is a device of Indophil to evade the
application of the CBA (between petitioner
Union and Indophil) to Acrylic.
84
| Labor Relations-2A
Indophil, on the other hand, submits that it is
a juridical entity separate and distinct from
Acrylic. It cited jurisprudence which ruled
that two corporations cannot be treated as a
single bargaining unit even if their
businesses are related. It submits that the
fact that there are as many bargaining units
as there are companies in a conglomeration
of companies is a positive proof that a
corporation is endowed with a legal
personality distinctly its own, independent
and separate from other corporations.
Petitioner notes that the ff. evidence
establish that Acrylic is an extension or
expansion of Indophil:
(a) the two corporations have their physical
plants, offices and facilities situated in the
same compound at Bulacan; (b) many of
Indophil's own machineries were transferred
to and are now installed and being used in
the Acrylic plant; and (c) the employees of
Indophil are the same persons manning and
servicing the units of Acrylic.
ISSUE:
W/N Acrylic is an extension or expansion of
private respondent. (NO)
W/N the rank-and-file employees working at
Acrylic should be recognized as part of,
and/or within the scope of the bargaining
unit. (NO)
HELD:
Under the doctrine of piercing the veil of
corporate entity, when valid grounds
therefore exist, the legal fiction that a
corporation is an entity with a juridical
personality separate and distinct from its
members or stockholders may be
 | Labor Relations-2A

disregarded. In such cases, the corporation
will be considered as a mere association of
persons. The members or stockholders of
the corporation will be considered as the
corporation, that is liability will attach directly
to the officers and stockholders. The
doctrine applies when the corporate fiction
is used to defeat public convenience, justify
wrong, protect fraud, or defend crime, or
when it is made as a shield to confuse the
legitimate issues, or where a corporation is
the mere alter ego or business conduit of a
person, or where the corporation is so
organized and controlled and its affairs are
so conducted as to make it merely an
instrumentality, agency, conduit or adjunct
of another corporation.
Jurisprudence also dictates that it is grave
abuse of discretion to treat two companies
as a single bargaining unit when these
companies are indubitably distinct entities
with separate juridical personalities.
Acrylic not being an extension or expansion
of Indophil, the rank-and-file employees
working at Acrylic should not be recognized
as part of, and/or within the scope of the
petitioner, as the bargaining representative
of Indophil.

In the case at bar, petitioner seeks to pierce

the veil of corporate entity of Acrylic,
alleging that the creation of the corporation
is a devise to evade the application of the
CBA between petitioner Union and Indophil.

SC did not apply the doctrine invoked by

petitioner. The fact that the businesses of
Indophil and Acrylic are related, that some
of the employees of Indophil are the same
persons manning and providing for auxilliary
services to the units of Acrylic, and that the
physical plants, offices and facilities are
situated in the same compound, these facts
are not sufficient to justify the piercing of the
corporate veil of Acrylic.

Jurisprudence dictates that "the legal

corporate entity is disregarded only if it is
sought to hold the officers and stockholders
directly liable for a corporate debt or
obligation." In the instant case, petitioner
does not seek to impose a claim against the
members of the Acrylic.

85

69_Fajardo
CAPITOL MEDICAL CENTER OF
CONCERNED EMPLOYEES-UNIFIED
FILIPINO SERVICE WORKERS (CMC-
ACE-UFSW)
vs
HON. BIENVENIDO E. LAGUESMA,
CAPITOL MEDICAL CENTER
EMPLOYEES ASSOCIATION-ALLIANCE
OF FILIPINO WORKERS AND CAPITOL
MEDICAL CENTER INCORPORATED
G.R. No. 118915 February 4, 1997
FACTS:
Respondent union applied for
certificate of election among the rank-and-
file employees of CMC. The Med-Arbiter
granted the same. Although CMC
questioned the former’s legal status, the
union was able to register as an
independent union and secure another
certificate of election. Elections were finally
held, and the union became the sole and
exclusive bargaining representative of the
rank and file employees at CMC. However,
CMC refuse to negotiate with respondent
union but instead file a petition for the
cancellation of the certificate of registration
of respondent union. Due to CMC’s refusal
to negotiate, respondent union stage a
strike, to which the SOLE assume
jurisdiction. Meanwhile, the case for the
cancellation of respondent union’s
registration reached the Supreme Court
which declared with finality the legality of
respondent union. The Court issued an
Entry of Judgment on March 23, 1994. The
next day, petitioner union filed a petition for
86
| Labor Relations-2A
certificate election, also among the regular
rank-and-file employees of CMC. They
anchor their petition on Section 3, Rule V
Book V of the Rules Implementing the
Labor Code on when a certificate election
should be conducted. They alleged that 1
year had already lapsed since respondent
union was certified as the exclusive
bargaining agent and no CBA was as yet
concluded or bargaining deadlock to which
the incumbent or certified bargaining agent
is a party had been submitted to conciliation
or had become the subject of a valid notice
of strike or lockout, hence, there is no bar to
the holding of a certificate election.
ISSUE:
Whether or not petitioner union’s
petition for certificate election shall be
granted.
HELD:
NO.
It is true that the certificate was filed
after the lapse of one year from the time of
declaration of a final certification result and
that no bargaining deadlock had been
submitted for conciliation or arbitration,
however respondent union was not remiss
on its rights to enter into a CBA for it was
the CMC which refused to bargain
collectively.
Deadlock is the counteraction of
things producing entire stoppage. It
presupposes reasonable effort at good faith
bargaining which, despite noble intentions,
does not conclude in agreement between
the parties.

Although in the present case, there
is no “deadlock” in its strict sense, what
happened is worse than a bargaining
deadlock, for CMC employed all legal
means to block the certification of
respondent union as the bargaining agent of
the rank-and-file; and use it as leverage for
its failure to bargain with respondent union.
CMC was unwilling to negotiate and reach
an agreement with respondent union. To
grant petitioner union’s application, taking
advantage of the delay caused by CMC,
would give premium on the failure of the
hospital to perform its duty to bargain
collectively as mandated by Article 252 of
the Labor Code.
----- ----- ---- ---- ---- ----- 
The case was compared to the case
of Kaisahan ng Manggagagawang Pilipino v
Trajano. In this case, the subsequent
petition for certificate of election was
granted although there is no bargaining
deadlock to speak of. The obiter advanced
the idea that the certification would not have
been granted if only the union is not remiss
in its obligation to compel the employer of
its duty to bargain collectively.
Unlike in the case of CMC, the union
took action to legally coerce the hospital to
bargain when it staged a strike.
87
| Labor Relations-2A
70_Ferrer
SAMAHANG MANGGAGAWA SA
PERMEX (SMP-PIILU-TUCP) vs. THE
SECRETARY OF LABOR, NATIONAL
FEDERATION OF LABOR, PERMEX
PRODUCER AND EXPORTER
CORPORATION
[G.R. No. 107792; March 2, 1998]
Facts:
On January 15, 1991, a certification election
was conducted among employees of
respondent Permex Producer and Exporter
Corporation (hereafter referred to as
Permex Producer). The results of the
elections were as follows:
National Federation of Labor (NFL) - 235
No Union- 466
Spoiled Ballots - 18
Marked Ballots - 9
Challenged Ballots- 7
However, some employees of Permex
Producer formed a labor organization
known as the Samahang Manggagawa sa
Permex (SMP) which they registered with
the Department of Labor and Employment
on March 11, 1991. The union later affiliated
with the Philippine Integrated Industries
Labor Union (PIILU).
On August 16, 1991, Samahang
Manggagawa sa Permex-Philippine
Integrated Industries Labor Union (SMP-
PIILU), wrote the respondent company
requesting recognition as the sole and

exclusive bargaining representative of
employees at the Permex Producer. On
October 19, 1991 Permex Producer
recognized SMP-PIILU and, on December
1, entered into a collective bargaining
agreement with it. The CBA was ratified
between December 9 and 10, 1991 by the
majority of the rank and file employees of
Permex Producer. On December 13, 1991,
it was certified by the DOLE.
On February 25, 1992, respondent NFL filed
a petition for certification election, but it was
dismissed by Med-Arbiter Edgar B.
Gongalos in an order dated August 20,
1992. Respondent NFL then appealed the
order to the Secretary of Labor and
Employment. On October 8, 1992, the
Secretary of Labor, through Undersecretary
Bienvenido Laguesma, set aside the order
of the Med-Arbiter and ordered a
certification election to be conducted among
the rank and file employees at the Permex
Producer, with the following choices:
1. National Federation of Labor
2. Samahang Manggagawa sa Permex
3. No union
Petitioner moved for a reconsideration but
its motion was denied in an order dated
November 12, 1992. Hence, this petition.
Two arguments are put forth in support of
the petition. First, it is contended that
petitioner has been recognized by the
majority of the employees at Permex
Producer as their sole collective bargaining
agent. Petitioner argues that when a group
of employees constituting themselves into
an organization and claiming to represent a
majority of the work force requests the
88
| Labor Relations-2A
employer to bargain collectively, the
employer may do one of two things. First, if
the employer is satisfied with the employees
claim the employer may voluntarily
recognize the union by merely bargaining
collectively with it. The formal written
confirmation is ordinarily stated in the
collective bargaining agreement. Second, if
on the other hand, the employer refuses to
recognize the union voluntarily, it may
petition the Bureau of Labor Relations to
conduct a certification election. If the
employer does not submit a petition for
certification election, the union claiming to
represent the employees may submit the
petition so that it may be directly certified as
the employees’ representative or a
certification election may be held.
Issue:
Whether or not Samahang Manggagawa ng
Permex is the sole and exclusive bargaining
agent of Permex Producer employees even
if not elected through certification election
Held:
No, Samahang Manggagawa ng Permex
cannot be the sole and exclusive bargaining
agent of Permex Producer employees
without winning a certification election,
despite the fact that Permex Producer
already entered a CBA with the former. The
Decision of Secretary of Labor ordering a
new certification election was upheld.
The case of Ilaw at Buklod ng Manggagawa
v. Ferrer-Calleja, cited by the Solicitor
General in his comment filed in behalf of the
NLRC, is particularly apropos. There, the

union also requested voluntary recognition
by the company. Instead of granting the
request, the company petitioned for a
certification election. The union moved to
dismiss on the ground that it did not ask the
company to bargain collectively with it. As
its motion was denied, the union brought the
matter to this Court. In sustaining the
company’s stand, this Court ruled:
...Ordinarily, in an unorganized
establishment like the Calasiao Beer
Region, it is the union that files a petition for
a certification election if there is no certified
bargaining agent for the workers in the
establishment. If a union asks the employer
to voluntarily recognize it as the bargaining
agent of the employees, as the petitioner
did, it in effect asks the employer to certify it
as the bargaining representative of the
employees A CERTIFICATION WHICH
THE EMPLOYER HAS NO AUTHORITY
TO GIVE, for it is the employees prerogative
(not the employers) to determine whether
they want a union to represent them, and, if
so, which one it should be. (emphasis
supplied)
In accordance with this ruling, Permex
Producer should not have given its
voluntary recognition to SMP-PIILU-TUCP
when the latter asked for recognition as
exclusive collective bargaining agent of the
employees of the company. The company
did not have the power to declare the union
the exclusive representative of the workers
for the purpose of collective bargaining.
Indeed, petitioner’s contention runs counter
to the trend towards the holding of
certification election. By virtue of Executive
Order No. 111, which became effective on
March 4, 1987, the direct certification
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| Labor Relations-2A
previously allowed under the Labor Code
had been discontinued as a method of
selecting the exclusive bargaining agents of
the workers. Certification election is the
most effective and the most democratic way
of determining which labor organization can
truly represent the working force in the
appropriate bargaining unit of a company.
Petitioner argues that of the 763 qualified
employees of Permex Producer, 479
supported its application for registration with
the DOLE and that when petitioner signed
the CBA with the company, the CBA was
ratified by 542 employees. Petitioner
contends that such support by the majority
of the employees justifies its finding that the
CBA made by it is valid and binding. But it is
not enough that a union has the support of
the majority of the employees. It is equally
important that everyone in the bargaining
unit be given the opportunity to express
himself.
This is especially so because, in this case,
the recognition given to the union came
barely ten months after the employees had
voted No Union in the certification election
conducted in the company. As pointed out
by respondent Secretary of Labor in his
decision, there can be no determination of a
bargaining representative within a year of
the proclamation of the results of the
certification election. Here the results, which
showed that 61% of the employees voted
for no union, were certified only on February
25, 1991 but on December 1, 1991 Permex
Producer already recognized the Samahang
Manggagawa ng Permex and entered into a
CBA with it.
 | Labor Relations-2A

There is something dubious about the fact freedom of choice because it does not
that just ten months after the employees establish the kind of industrial peace
had voted that they did not want any union contemplated by the law. Such situation
to represent them, they would be obtains in this case. The petitioner entered
expressing support for petitioner. The doubt into a CBA with Permex Producer when its
is compounded by the fact that in sworn status as exclusive bargaining agent of the
affidavits some employees claimed that they employees had not been established yet.
had either been coerced or misled into
signing a document which turned out to be
in support of petitioner as its collective
bargaining agent. Although there were
retractions, we agree with the Solicitor
General that retractions of statements by
employees adverse to a company (or its
favored union) are oftentimes tainted with
coercion and intimidation. For how could
one explain the seeming flip-flopping of
position taken by the employees? The
figures claimed by petitioner to have been
given to it in support cannot readily be
accepted as true.

Second. Petitioner invokes the contract-bar

rule. They contend that under Arts. 253,
253-A and 256 of the Labor Code and Book
V, Rule 5, 3 of its Implementing Rules and
Regulations, a petition for certification
election or motion for intervention may be
entertained only within 60 days prior to the
date of expiration of an existing collective
bargaining agreement. The purpose of the
rule is to ensure stability in the relationships
of the workers and the management by
preventing frequent modifications of any
collective bargaining agreement earlier
entered into by them in good faith and for
the stipulated original period. Excepted from
the contract-bar rule are certain types of
contracts which do not foster industrial
stability, such as contracts where the
identity of the representative is in doubt.
Any stability derived from such contracts
must be subordinated to the employees

90

71_Hadloc
San Miguel Corp. Employees Union-
PGTWO V. Confessor
FACTS:
Petitioner-union entered into a CBA
with private respondent San Miguel
Corporation (SMC) to take effect upon the
expiration of their previous CBA on June 30,
1989.This CBA provided, among others,
that:
XXX XXX XXX
Sec. 1. This Agreement which shall be
binding upon the parties hereto and their
respective successors-in-interest, shall
become effective and shall remain in force
and effect until June 30, 1992.
Sec. 2. In accordance with Article 253-A of
the Labor Code as amended, the term of
this Agreement insofar as the
representation aspect is concerned, shall be
for five (5) years from July 1, 1989 to June
30, 1994. Hence, the freedom period for
purposes of such representation shall be
sixty (60) days prior to June 30, 1994.
Sec. 3. Sixty (60) days prior to June 30,
1992 either party may initiate negotiations of
all provisions of this Agreement, except
insofar as the representation aspect is
concerned. If no agreement is reached in
such negotiations, this Agreement shall
nevertheless remain in force up to the time
a subsequent agreement is reached by the
parties.
Meanwhile, Magnolia and Feeds and
Livestock Division were spun-off and
became two separate and distinct
corporations: Magnolia Corporation
(Magnolia) and San Miguel Foods, Inc.
(SMFI). Notwithstanding the spin-offs, the
CBA remained in force and effect. After
June 30, 1992, the CBA was renegotiated in
accordance with the terms of the CBA and
Article 253-A of the Labor Code. During the
negotiations, the petitioner-union insisted
that the bargaining unit of SMC should still
include the employees of the spun-off
corporations: Magnolia and SMFI; and that
the renegotiated terms of the CBA shall be
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| Labor Relations-2A
effective only for the remaining period of two
years or until June 30, 1994. SMC, on the
other hand, contended that the employees
who had moved to Magnolia and SMFI,
automatically ceased to be part of the
bargaining unit at the SMC. Furthermore,
the CBA should be effective for three years
in accordance with Art. 253-A of the Labor
Code.
ISSUES: 1) W/N the duration of the
renegotiated terms of the CBA is to be
effective for 2 years
2) W/N the bargaining unit of SMC
includes also the employees of the
Magnolia and SMFI.
RULING:
1) NO. Art. 253-A of the Labor Code
as amended reads:
Art. 253-A. Terms of a CBA. — Any
CBA that the parties may enter into shall,
insofar as the representation aspect is
concerned, be for a term of 5 years. No
petition questioning the majority status of
the incumbent bargaining agent shall be
entertained and no certification election
shall be conducted by the Department of
Labor and Employment outside of the sixty-
day period immediately before the date of
expiry of such five year term of the CBA. All
other provisions of the CBA shall be
renegotiated not later than 3 years after its
execution. 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 such
CBA, shall retroact to the day immediately
following such date. If any such agreement
is entered into beyond six months, the
parties shall agree on the duration of
retroactivity thereof. In case of a deadlock in
the renegotiation of the CBA, the parties
may exercise their rights under this
Code.xxx The “representation aspect” refers
to the identity and majority status of the
union that negotiated the CBA as the
exclusive bargaining representative of the
appropriate bargaining unit concerned. “All
other provisions” simply refers to the rest of

the CBA, economic as well as non-
economic provisions, except representation.
The law is clear and definite on the duration
of the CBA insofar as the representation
aspect is concerned, but is quite ambiguous
with the terms of the other provisions of the
CBA. It is the framers of the law’s intention
to maintain industrial peace and stability by
having both management and labor work
harmoniously together without any
disturbance. Thus, no outside union can
enter the establishment within 5 years and
challenge the status of the incumbent union
as the exclusive bargaining agent. Likewise,
the terms and conditions of employment
(economic and non-economic) can not be
questioned by the employers or employees
during the period of effectivity of the CBA.
The CBA is a contract between the parties
and the parties must respect the terms and
conditions of the agreement. Notably, the
framers of the law did not give a fixed term
as to the effectivity of the terms and
conditions of employment. It can be gleaned
from their discussions that it was left to the
parties to fix the period.
The issue as to the term of the non-
representation provisions of the CBA need
not belaboured. The parties, by mutual
agreement, enter into a renegotiated
contract with a term of three (3) years or
one which does not coincide with the said 5-
year term, and said agreement is ratified by
majority of the members in the bargaining
unit, the subject contract is valid and legal
and therefore, binds the contracting parties.
2) NO. The transformation of the companies
was a management prerogative and
business judgment which the courts can not
look into unless it is contrary to law, public
policy or morals. Ever mindful of the
employees’ interests, management has
assured the concerned employees that they
will be absorbed by the new corporations
without loss of tenure and retaining their
present pay and benefits according to the
existing CBAs. They were advised that upon
the expiration of the CBAs, new agreements
will be negotiated between the management
of the new corporations and the bargaining
92
| Labor Relations-2A
representatives of the employees
concerned.
Therefore, Magnolia and SMFI became
distinct entities with separate juridical
personalities. Thus, they can not belong to a
single bargaining unit. Moreover, in
determining an appropriate bargaining unit,
the test of grouping is mutuality or
commonality of interests. The employees
sought to be represented by the collective
bargaining agent must have substantial
mutual interests in terms of employment
and working conditions as evinced by the
type of work they performed. Considering
the spin-offs, the companies would
consequently have their respective and
distinctive concerns in terms of the nature of
work, wages, hours of work and other
conditions of employment. Interests of
employees in the different companies
perforce differ. The nature of their products
and scales of business may require different
skills which must necessarily be
commensurated by different compensation
packages. The different companies may
have different volumes of work and different
working conditions. For such reason, the
employees of the different companies see
the need to group themselves together and
organize themselves into distinctive and
different groups. It would then be best to
have separate bargaining units for the
different companies where the employees
can bargain separately according to their
needs and according to their own working
conditions.

72_Leano
LAGUNA AUTOPARTS
MANUFACTURING CORPORATION
vs. OFFICE OF THE SOLE [G.R. No.
157146. April 29, 2005]
FACTS:
The respondent union filed a petition for
certification election before the DOLE,
alleging that Obrero Pilipino and its chapter
affiliate, LAMCOR Chapter were legitimate
labor organizations. It averred that the said
bargaining unit, composed of more or less
160 rank-and-file employees, is
unorganized and that there has been no
certification election conducted for the past
12 months prior to the filing of the petition.
The petitioner company moved to dismiss
the petition for certification election and
further asserted that even if the respondent
union was issued a certificate of
registration, it could not file a petition for
certification election since its legal
personality was at question.
Med-Arbiter Bactin dismissed the petition
for certification election for the respondent
unions lack of legal personality because it
failed to indicate its principal office on the
documents it submitted to the Regional
Office. The respondent union appealed the
case to the SOLE Sto. Tomas, who granted
the appeal and remanded the case to the
regional office of origin for the immediate
conduct of a certification election. Finding
no cogent reason to alter her decision, the
SOLE denied the motion for
reconsideration thereof.
Not convinced, the petitioner filed a petition
for certiorari with the CA, who ruled in favor
of the respondnet union. The petitioner’s
MR was denied. Hence, this petition for
review on certiorari.
ISSUES:
1)whether or not the respondent union
is a legitimate labor organization;
93
| Labor Relations-2A
2) whether or not a chapters legal
personality may be collaterally attacked in a
petition for certification election; and
3)whether or not the petitioner, as the
employer, has the legal standing to oppose
the petition for certification election.
HELD:
First of all, in a petition for review
on certiorari, a petitioner can raise only
questions of law. The SC is not the proper
venue to consider a factual issue as it is not
a trier of facts. Findings of fact of
administrative agencies and quasi-judicial
bodies, which have acquired expertise
because their jurisdiction is confined to
specific matters, are generally accorded not
only great respect but even finality.
1. YES, based on the finding of the SOLE,
the respondent union is a legitimate labor
organization. As correctly stressed by the
CA, a local or chapter need not be
registered to become a legitimate labor
organization because a local or chapter
acquires legal personality as a labor
organization from the date of filing of the
complete documents enumerated in Section
1of Rule VI of the Implementing Rules of
Book V (as amended by Department Order
[D.O.] No. 9).
The task of determining whether the
local or chapter has submitted the complete
documentary requirements is lodged with
the Regional Office or the BLR. The records
of the case show that the respondent union
submitted the said documents to Regional
Office No. IV and was subsequently issued
certificates. It, therefore, declared that the
respondent union has acquired legal
personality as a labor organization. Absent
any pronouncement to the contrary, such
determination of the Labor Relations
Division Chief will stand, on the presumption
that the duty of determining whether the
respondent union submitted the complete
documentary requirements has been
regularly performed.

2. NO. Legal personality may not be subject
to a collateral attack but only through a
separate action instituted particularly for the
purpose of assailing it, as prescribed by
Section 5, Rule V of the Implementing Rules
of Book V. . What applies in this case is the
principle that once a union acquires
legitimate status as a labor organization, it
continues as such until its certificate of
registration is cancelled or revoked in an
independent action for cancellation.
Equally important is Section 11, Paragraph
II, Rule IX of D.O. 9, which provides for the
dismissal of a petition for certification
election based on the lack of legal
personality of a labor organization only in
the following instances: (1) appellant is not
listed by the Regional Office or the BLR in
its registry of legitimate labor organizations;
or (2) appellants legal personality has been
revoked or cancelled with finality.
3. Petitioner does not have the legal
standing to oppose the petition for
certification election. The choice of a
collective bargaining agent is the sole
concern of the employees. The only
exception to this rule is where the employer
has to file the petition for certification
election pursuant to Article 258 of the LC
because it was requested to bargain
collectively. An employer’s role in a
certification election has aptly been
described in Trade Unions of the Philippines
and Allied Services (TUPAS) v. Trajano, as
that of a mere bystander. It has no legal
standing in a certification election as it
cannot oppose the petition or appeal the
Med-Arbiters orders related thereto.
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| Labor Relations-2A
73_Leonardo
REYES, et al vs. CRESENCIANO B.
TRAJANO, et al. and Tri-union
Employees Union
G.R. No. 84433 June 2, 1992
FACTS:
The Bureau of Labor Relations
(BLR ) authorized the conduct of
certification election among the employees
of Tri-Union Industries Corporation. The
competing unions were the TUEU-OLALIA
and TUPAS. Of the 384 workers initially
deemed to be qualified voters, only 240
actually took part in the election. Among the
240 who cast their votes, 141 were
members of the Iglesia ni Kristo (INK). The
ballots provided for three (3) choices. They
provided for votes to be cast, of course, for
either of the two (2) contending labor
organizations, (a) TUPAS and (b) TUEU-
OLALIA; and, conformably with established
rule and practice, 1 for (c) a third
choice: "NO UNION."
The challenged votes were those
cast by the 141 INK members. They were
segregated and excluded from the final
count because the competing unions
agreed earlier that the INK members should
not be allowed to vote “because they are
not members of any union and refused to
participate in the previous certification
election.”

The INK employees protested the
exclusion of their votes. They filed a petition
to cancel the election alleging that it “was
not fair” and the result thereof did “not
reflect the true sentiments of the majority of
the employees.”
TUEU-OLALIA opposed the petition.
It contended that petitioners “do not have
legal personality to protest the results of the
election because they are not members of
either the contending unions, but of the INK
which prohibits its followers to, on religious
grounds, from joining or forming any labor
organization.
The Med-Arbiter, seeing no merit in
the INK employees’ petition, certified the
TUEU-OLALIA as the sole and exclusive
bargaining agent of the rank-and-file
employees. The officer-in-charge of BLR
(Hon. Cresenciano Trajano) sustained the
denial by the Med Arbiter of the right to vote
of one hundred forty-one (141) members of
the "Iglesia ni Kristo" (INK).
ISSUE:
Whether or not union
membership is a prerequisite in order
to vote in a Certification Election.
HELD: No
The right of self-organization
includes the right to organize or affiliate with
95
| Labor Relations-2A
a labor union or determine which of two or
more unions in an establishment to join, and
to engage in concerted activities with co-
workers for purposes of collective
bargaining through representatives of their
own choosing, or for their mutual aid and
protection. Logically, the right NOT to join,
affiliate with, or assist any union, and to
disaffiliate or resign from a labor
organization, is subsumed in the right to
join, affiliate with, or assist any union, and to
maintain membership therein. The right to
form or join a labor organization necessarily
includes the right to refuse or refrain from
exercising said right. It is self-evident that
just as no one should be denied the
exercise of a right granted by law, so also,
no one should be compelled to exercise
such a conferred right. The fact that a
person has opted to acquire membership in
a labor union does not preclude his
subsequently opting to renounce such
membership.
The purpose of a certification
election is precisely the ascertainment of
the wishes of the majority of the employees
in the appropriate bargaining unit: to be or
not to be represented by a labor
organization, and in the affirmative case, by
which particular labor organization. If the
results of the election should disclose that
the majority of the workers do not wish to be
represented by any union, then their wishes
must be respected, and no union may
properly be certified as the exclusive
representative of the workers in the
bargaining unit in dealing with the employer
regarding wages, hours and other terms
and conditions of employment. In the
Certification Election, all members of the
unit, whether union members or not, have
the right to vote. Union membership is not
prerequisite. If majority of the unit members
do not want a union, as expressed in the
certification election, such majority decision
 | Labor Relations-2A

must be respected. Hence, the INK 74_Magabilin

members may vote.
AIRTIME SPECIALISTS, INC.VS
Moreover, the contention that the
petitioners are disqualified to vote because DIRECTOR OF LABOR RELATIONS
they "are not constituted into a duly FERRER-CALLEJA
organized labor union" — "but members of
the INK which prohibits its followers, on G.R. No. 80612-16 December 29, 1989
religious grounds, from joining or forming
any labor organization" — and "hence, not
FACTS:
one of the unions which vied for certification
Respondent Samahan ng mga
as sole and exclusive bargaining
Manggagawa sa Asia-FFW Chapter
representative," is specious. Neither law,
(SAMA-ASIA, for short) filed with the
administrative rule nor jurisprudence
National Capital Region, Ministry of Labor
requires that only employees affiliated with
and Employment, two separate petitions for
any labor organization may take part in a
direct certification and/or certification electio
certification election. Neither does the
n on behalf of the regular rank-and-
contention that petitioners should be denied
file employees of the petitioners Airtime
the right to vote because they "did not
Specialists and Absolute Sound, Inc. The
participate in previous certification elections
other respondent Pinagbuklod ng
in the company for the reason that their
Manggagawa sa Ataco-FFW Chapter (PMA
religious beliefs do not allow them to form,
for short) also filed with the same office, on
join or assist labor organizations," persuade
the same day, similar separate petitions in
acceptance. No law, administrative rule or
behalf of the regular rank
precedent prescribes forfeiture of the right
and file employees of petitioners Country-
to vote by reason of neglect to exercise the
Wealth Development, Ad Planner and
right in past certification elections.
Marketing Counsellors and Atlas
Resources.

All these five cases were consolidated.

Petitioners filed their position paper with
motion to dismiss on the following grounds
— disaffiliation of the rank
and file employees, ineligibility of some
signatories because they had less than one
(1) year of service resulting in the non-
compliance with the 30% requirement. The
Med-Arbiter issued an Order mandating
a certification election to be conducted
among the rank and file employees of the
Airtime Specialists, Inc.; Absolute Sound,
Inc.; Commonwealth Development
Corporation; Ad Planners & Mktg. Corp.;
and Atlas Resources & Management Group,
within 20 days from receipt of the Order.

Petitioners’ motion for reconsideration

having been denied they filed the instant
petition for “Certiorari and Prohibition with
Preliminary Injunction” with a Prayer for the

96
 | Labor Relations-2A

issuance of a temporary restraining order In a certification election all rank-and-file

enjoining public respondents from employees in the appropriate bargaining
conducting any further proceedings in the unit are entitled to vote. This principle is
said five cases. clearly stated in Art. 255 of the Labor Code
which states that the "labor organization
designated or selected by the majority of the
ISSUE: employees in an appropriate bargaining unit
WON the Bureau of Labor Relations (public shall be the exclusive representative of the
respondents) committed grave abuse of employees in such unit for the purpose of
discretion when they considered (a) collective bargaining." Collective bargaining
employees with less than one year of covers all aspects of the employment
service and even (b) probationary relation and the resultant CBA negotiated by
employees as qualified participants in the the certified union binds all employees in
certification election process. the bargaining unit. Hence, all rank-and-file
employees, probationary or permanent,
HELD: have a substantial interest in the selection
No. The Court had made it clear that the of the bargaining representative. The Code
Court of Industrial Relations, (or in this makes no distinction as to their employment
case), the Bureau of Labor Relations in status as basis for eligibility in supporting
deciding whether or not to grant a petition the petition for certification election. The law
for certification election considering the refers to "all" the employees in the
facts and circumstances of which it has bargaining unit. All they need to be eligible
intimate knowledge. Moreover, a perusal of to support the petition is to belong to the
Art. 258 of the Labor Code as amended by "bargaining unit.".
Presidential Decree No. 442 reveals that
compliance with the 30% requirement (now
20%) makes it mandatory upon the Bureau
of Labor Relations to order the holding of a
certification election in order to determine
the exclusive-bargaining agent of the
employees. Stated otherwise, it means that
with such, the Bureau is left without any
discretion but to order the holding of
certification election. Parenthetically, where
the petition is supported by less than 30%
(now 20%) the Bureau of Labor Relations
has discretion whether or not to order the
holding of certification election depending
on the circumstances of the case. Thus, it is
the Court’s holding in LVN Pictures vs.
Musicians Guild, et al. (1 SCRA 132) that in
connection with certification election, the
Court of Industrial Relations enjoys a wide
discretion in determining the procedure
necessary to insure a fair and free choice of
bargaining representatives by employees,
and having exercised its sound discretion,
this Court cannot interfere. (Arguelles v.
Young, 153 SCRA 690).

97

STRIKES AND LOCKOUTS
75_Mallari
BIFLEX UNION VS. FILFLEX INDUSTRIAL
MANUFACTURING
G.R. No. 155679. December 19, 2006
FACTS:
Petitioners Patricia Villanueva, Emilia
Bandola, Raquel Cruz, Delia Relato, Regina
Castillo, Lolita delos Angeles, Marissa
Villoria, Marita Antonio, Lolita Lindio, Eliza
Caraulia, and Liza Sua were officers of
Biflex (Phils.) Inc. Labor Union.
Petitioners Myrna dela Torre, Avelina
Aonuevo, Bernice Borcelo, Narlie Yagin,
Evelyn Santillan, Leony Serdoncilo, Trinidad
Cuya, Andrea Lumibao, Gynie Arneo,
Elizabeth Capellan, Josephine Detosil,
Zenaida Francisco, and Florencia Anago
were officers of Filflex Industrial and
Manufacturing Labor Union.
The two petitioner-unions, which are
affiliated with National Federation of Labor
Unions (NAFLU), are the respective
collective bargaining agents of the
employees of corporations.
Respondents Biflex (Phils.) Inc. and Filflex
Industrial and Manufacturing Corporation
(respondents) are sister companies
engaged in the garment business. Situated
in one big compound along with another
sister company, General Garments
Corporation (GGC), they have a common
entrance.
On October 24, 1990, the labor sector
staged a welga ng bayan to protest the
accelerating prices of oil. On even date,
petitioner-unions, led by their officers,
herein petitioners, staged a work stoppage
which lasted for several days, prompting
98
| Labor Relations-2A
respondents to file on October 31, 1990 a
petition to declare the work stoppage illegal
for failure to comply with procedural
requirements.
On November 13, 1990, respondents
resumed their operations. Petitioners,
claiming that they were illegally locked out
by respondents, assert that aside from the
fact that the welga ng bayan rendered it
difficult to get a ride and the apprehension
that violence would erupt between those
participating in the welga and the
authorities, respondents workers were
prevented from reporting for work.
On their putting up of tents, tables and
chairs in front of the main gate of
respondents premises, petitioners, who
claim that they filed a notice of strike on
October 31, 1990, explain that those were
for the convenience of union members who
reported every morning to check if the
management would allow them to report for
work.
Respondents, on the other hand, maintain
that the work stoppage was illegal since the
following requirements for the staging of a
valid strike were not complied with: (1) filing
of notice of strike; (2) securing a strike vote,
and (3) submission of a report of the strike
vote to the Department of Labor and
Employment.
Labor Arbiter – strike was illegal.
NLRC- reversed the ruling of the LA. No
strike to speak of as no labor or
industrial dispute existed between the
parties.
CA – reinstated the ruling of the LA.
 | Labor Relations-2A

ISSUE: purposes, or obstruct public

Whether or not the union officers engaged
in an illegal strike.
HELD:
YES.
Stoppage of work due to welga ng bayan is
in the nature of a general strike, an
extended sympathy strike. It affects
numerous employers including those who
do not have a dispute with their employees
regarding their terms and conditions of
employment.
Employees who have no labor dispute with
their employer but who, on a day they are
scheduled to work, refuse to work and
instead join a welga ng bayan commit an
illegal work stoppage.
There being no showing that petitioners
notified respondents of their intention, or
that they were allowed by respondents,
to join the welga ng bayan on October
24, 1990, their work stoppage is beyond
legal protection.
Petitioners, nonetheless, assert that when
they returned to work the day following the
welga ng bayan on October 24, 1990, they
were refused entry by the management,
allegedly as punishment for their joining the
welga. Hence, they claim that they were
illegally locked out by respondents.
thoroughfares."
Even the NLRC, which ordered their
reinstatement, took note of petitioners’ act
of "physically blocking and preventing the
entry of complainant’s customers, supplies
and even other employees who were not on
strike."
In fine, the legality of a strike is determined
not only by compliance with its legal
formalities but also by the means by which it
is carried out.
Petitioners, being union officers, should thus
bear the consequences of their acts of
knowingly participating in an illegal strike,
conformably with the third paragraph of
Article 264 (a) of the Labor Code which
provides:
. . . Any union officer who knowingly
participates in an illegal strike and any
worker or union officer who knowingly
participates in the commission of illegal acts
during a strike may be declared to have lost
his employment status: Provided, That mere
participation of a worker in a lawful strike
shall not constitute sufficient ground for
termination of his employment, even if a
replacement had been hired by the
employer during such lawful strike.

Even assuming arguendo that in staging

the strike, petitioners had complied with
legal formalities, the strike would just the
same be illegal, for by blocking the free
ingress to and egress from the company
premises, they violated Article 264(e) of
the Labor Code which provides that
"[n]o person engaged in picketing shall
… obstruct the free ingress to or egress
from the employer’s premises for lawful

99

76_Panganiban
Toyota Motor Phils. Corp. Workers
Association v. NLRC
GR Nos. 158786 & 158789 October 19,
2007
Toyota Motor Philippines Corporation v.
Toyota Motor Philippines Workers
Association
GR Nos. 158789 & 158799 October 19,
2007
Facts: Union filed a petition for certification
election among Toyota rank and file
employees with NCMB and was certified as
sole and exclusive bargaining agent of all
Toyota rank and file employees. It submitted
CBA proposals to Toyota, but the latter
refused to negotiate because of its pending
appeal. Union filed notice of strike in view of
Toyota’s refusal to bargain. NCMB
converted the notice of strike into a
preventive mediation case on the ground
that the issue of whether or not union is
exclusive bargaining agent was still
unresolved. On February 21, 2001, 135
union officers and members failed to render
the required overtime work and instead
marched to and staged a picket in front of
BLR office. The union members requested
to be absent the following day to attend the
hearing but the request was denied by
Toyota. Despite denial, more than 200
employees staged mass actions in front of
BLR and DOLE Offices which led to acute
lack of manpower and failure to meet
production goals of Toyota. The company
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| Labor Relations-2A
sent letters to the employees requiring them
to explain why they should not be
dismissed. Union explained that they only
exercised their constitutional right of
peaceably assemble and to petition
government for redress if grievances.
However, union circulated a Manifesto
urging its members to participate in a strike
and abandon posts. It filed another notice of
strike. Toyota required the employees to
attend an investigative review, but they
refused to do so. Toyota terminated 227
employees for participation in concerted
actions in violation of its Code of Conduct
and misconduct under Article 282 of Labor
Code. In view of the dismissal, union went
on strike and from March 28, 2001 to April
12, 2001, it barricaded the gates of Toyota’s
Bicutan and Sta. Rosa plants. This
prevented others from reporting to work and
delayed the operations. Toyota filed petition
for injunction with a prayer for issuance of
TRO which was granted. A petition to
declare the strike illegal was also filed.
DOLE Secretary assumed
jurisdiction over the labor dispute and
issued an order certifying the labor dispute
to NLRC. The striking workers were directed
to return to work, Toyota to accept the
workers or put them under payroll
reinstatement, and both of them to enjoin
from committing acts that may worsen the
situation. Despite issuance of Certification
Order, several payroll reinstated members
of Union staged a protest in front of Bicutan
plant on May 23, 2001. Five days after, 44
union members staged another protest in
the same plant and 29 reinstated
employees in Sta. Rosa plant.
Notwithstanding certification order, another
notice of strike was filed. NLRC declared
the strikes illegal and ordered severance

compensation to employees despite legal
dismissal.
Issues: (1) Whether or not the mass actions
committed by the union on different
occasions are
illegal strikes
(2) Whether or not separation pay
should be awarded to union members
Held: (1) Yes, the strikes were illegal. There
were 6 categories of illegal strike: a) when
contrary to specific prohibition of law; b)
when it violates specific requirement of law;
c) when it is for unlawful purpose; d) when it
employs unlawful means to achieve
objective; e) when it is declared in violation
of existing document; and f) when contrary
to existing agreement.
The Court ruled that the protest
actions on February 2001 were not exercise
of constitutional right to assemble and ask
Government for redress but in reality
temporary work stoppages that crippled
Toyota. The protests were done without
satisfying prerequisites of valid strike under
Article 263 of Labor Code. Also, such
violated the Toyota’s Code of Conduct to
which dismissal is the penalty. The March
2001 strikes were also illegal because
unlawful means were employed. Union
blocked the the free ingress and egress of 2
plants. The Court disagreed with the
contention of union that there can be no
strike to speak in May 2001 because
participants were the dismissed employees
who were on payroll. The Court emphasized
that by that time the DOLE Secretary
already assumed jurisdiction over the labor
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| Labor Relations-2A
dispute and certified the case for
compulsory arbitration. Although there was
no stoppage of work, the fact still remains
that union members picketed and performed
concerted actions which clearly violated the
assumption of jurisdiction and certification
order of DOLE Secretary.
(2) No, it should not be awarded. The
general rule is that when just causes for
terminating the services of an employee
exist, employee is not entitled to separation
pay. The rationale behind this is that the
lawbreaker should not benefit from their
illegal acts. Exception to this is when the
court finds justification in applying principles
of social justice. However, the principle will
only be considered when cause of dismissal
is other than serious misconduct or that
which reflects adversely employee’s moral
character. The Court ruled that, considering
that the dismissal of employees was due to
participation in illegal strikes as well as
violation of Code of Conduct, the same
constitute serious misconduct. It is a
transgression of established and definite
rule of action and implies wrongful intent.
The claim of union that Toyota breach its
duty to bargain has not been substantiated
by evidence as to justify union’s strategy to
cripple operations of Toyota inflicting almost
50 Million financial damage. The employees
were also fully aware of the company’s
policy on prohibition against concerted
action inimical to company’s interest yet
they still resorted to mass actions on
several occasions. Above all, they blatantly
violated the assumption and certification
order of DOLE Secretary which only proved
their lack of obeisance to the law.

77_Questin
CAPITOL MEDICAL CENTER, INC. v.
NATIONAL LABOR RELATIONS
COMMISSION, ET AL.
G.R. No. 147080, April 26, 2005, SECOND
DIVISION, (Callejo, Sr., J.)
DOCTRINE OF THE CASE
The failure of a union to comply with
the requirement of the giving of notice to the
NCMB at least 24 hours prior to the holding
of a strike vote meeting will render the
subsequent strike staged by the union
illegal.
FACTS:
Capitol Medical Center Employees
Association-Alliance of Filipino Workers (the
Union) was declared by the Supreme Court,
in a separate petition, as the exclusive
bargaining agent of the rank-and-file
employees of Capitol Medical Center, Inc.
(CMC).
Due to CMC’s failure to accede to
the Union’s repeated requests for a meeting
to discuss matters pertaining to a
negotiation for a CBA, the Union filed a
Notice of Strike on October 29, 1997 with
the National Conciliation and Mediation
Board (NCMB), serving a copy thereof to
CMC. The Union alleged as grounds for the
projected strike the following acts of CMC:
(a) refusal to bargain; (b) coercion on
employees; and (c) interference/ restraint to
self-organization.
A series of conferences was
conducted before the NCMB (National
Capital Region), but no agreement was
reached. On November 20, 1997, the Union
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| Labor Relations-2A
submitted to the NCMB the minutes of the
alleged strike vote purportedly held on
November 10, 1997 at the parking lot in
front of CMC’s premises, at the corner of
Scout Magbanua Street and Panay Avenue,
Quezon City. It appears that 178 out of the
300 union members participated therein,
and the results were as follows: 156
members voted to strike; 14 members cast
negative votes; and eight votes were
spoiled. On November 28, 1997, the officers
and members of the Union staged a strike.
The Union filed an ex parte motion
with the DOLE, praying for its assumption of
jurisdiction over the dispute. The SOLE
assumed jurisdiction over the dispute. Thus,
the officers and the members of the Union
stopped their strike and returned to work.
For its part, CMC filed a petition
before the National Labor Relations
Commission (NLRC) to declare the strike
illegal. The Labor Arbiter (LA) ruled in favor
of CMC, and declared that the strike
conducted by the Union as illegal. The LA
reasoned that there was no strike vote
conducted, and the Union failed to comply
with the requirements set by law before a
strike could be staged. Aggrieved, the Union
appealed to the NLRC. The NLRC granted
the appeal and reversed the decision of the
LA. CMC then elevated the case to the
Court of Appeals, but to no avail. Hence,
this petition.
ISSUE: Did the Union comply with all the
requirements for a lawful strike?
RULING:
NO. The Union failed to comply with
the second paragraph of Section 10, Rule
XXII of the Omnibus Rules of the NLRC.

In National Federation of Labor v.
NLRC, the Court enumerated the notices
required by Article 263 of the Labor Code
and the Implementing Rules, which include
the 24-hour prior notice to the NCMB:
1) A notice of strike, with the required contents,
should be filed with the DOLE, specifically the
Regional Branch of the NCMB, copy furnished
the employer of the union;
2) A cooling-off period must be observed
between the filing of notice and the actual
execution of the strike thirty (30) days in case of
bargaining deadlock and fifteen (15) days in
case of unfair labor practice. However, in the
case of union busting where the unions
existence is threatened, the cooling-off period
need not be observed.
4) Before a strike is actually commenced, a
strike vote should be taken by secret balloting,
with a 24-hour prior notice to NCMB. The
decision to declare a strike requires the secret-
ballot approval of majority of the total union
membership in the bargaining unit concerned.
5) The result of the strike vote should be
reported to the NCMB at least seven (7) days
before the intended strike or lockout, subject to
the cooling-off period.
The requirement of giving notice of
the conduct of a strike vote to the NCMB at
least 24 hours before the meeting for the
said purpose is designed to (a) inform the
NCMB of the intent of the union to conduct a
strike vote; (b) give the NCMB ample time to
decide on whether or not there is a need to
supervise the conduct of the strike vote to
prevent any acts of violence and/or
irregularities attendant thereto; and (c)
should the NCMB decide on its own initiative
or upon the request of an interested party
including the employer, to supervise the
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| Labor Relations-2A
strike vote, to give it ample time to prepare
for the deployment of the requisite
personnel, including peace officers if need
be. Unless and until the NCMB is notified at
least 24 hours of the unions decision to
conduct a strike vote, and the date, place,
and time thereof, the NCMB cannot
determine for itself whether to supervise a
strike vote meeting or not and insure its
peaceful and regular conduct.
The failure of a union to comply with
the requirement of the giving of notice to the
NCMB at least 24 hours prior to the holding
of a strike vote meeting will render the
subsequent strike staged by the union
illegal.
Conformably to Article 264 of the
Labor Code of the Philippines and Section 7,
Rule XXII of the Omnibus Rules
Implementing the Labor Code, no labor
organization shall declare a strike unless
supported by a majority vote of the members
of the union obtained by secret ballot in a
meeting called for that purpose. The
requirement is mandatory and the failure of
a union to comply therewith renders the
strike illegal. The union is thus mandated to
allege and prove compliance with the
requirements of the law.
In this case, the Union failed to
comply with the 24-hour prior notice
requirement to the NCMB before it
conducted the alleged strike vote meeting
on November 10, 1997. Furthermore, the
Court agrees with the finding of the LA that
no secret balloting to strike was conducted
by the Union on November 10, 1997 at the
parking lot in front of the hospital, at the
corner of Scout Magbanua Street and Panay
Avenue, Quezon City.

78_Reonico
Sukhothai vs. CA
G.R. No. 150437, July 17, 2006
FACTS
Majority of the employees of
Sukhothai Cuisine and Restaurant
(Sukhothai) organized into a union affiliated
with the Philippine Labor Alliance Council
(PLAC-Sukhothai). Later on, the Union filed
a Notice of Strike on the ground of unfair
labor practice such as harassment, fault-
finding and union-busting. Sukhothai and
the Union entered into an agreement that
there will be no termination of employment
during the pendency of the case but that
management may issue memos for violation
of company policies. Until a strike
transpired where the parties submitted the
issue for voluntary arbitration. However,
during the proceeding, Sukhothai dismissed
a union members due to a quarrel with a co-
employee, and for undisclosed reasons.
Hence, the Union’s Vice President and
other members staged a “wildcat strike”
which is a strike that is unauthorized by the
Union. When a notice of strike was re-filed,
it turned into a “sit-down strike” and
thereafter, an “actual strike”. Sukhothai filed
a complaint for illegal strike. The LA ruled
that the strike was illegal for failure to
comply with the mandatory requirements of
a lawful strike. The NLRC reversed the
decision due to Sukhothai’s violation of their
agreement that no union member will be
dismissed during the pendency of the case.
The CA, however, affirmed the decision of
the NLRC. Hence, this present case.
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| Labor Relations-2A
ISSUE
Whether or not the strike staged by
the Union is illegal.
RULING
YES. The Court finds the strike
illegal and the union officers who
participated in the illegal strike and in the
commission of illegal acts are declared to
have lost their employment status. It is a
fact that at the time the strike was staged in
June 1999, voluntary arbitration between
the parties was ongoing by virtue of the
January 1999 Submission Agreement. The
issue to be resolved under those
proceedings pertained to the very same
issues stated in the Notice of Strike that is
the commission of unfair labor practices.
Article 264 of the Labor Code provides: No
strike or lockout shall be declared after
assumption of jurisdiction by the President
or the Secretary or after certification or
submission of the dispute to compulsory or
voluntary arbitration or during the pendency
of cases involving the same grounds for the
strike or lockout.
The Court has held that strikes
staged in violation of agreements providing
for arbitration are illegal, since these
agreements must be strictly adhered to and
respected if their ends are to be achieved.
The rationale of the prohibition under Article
264 is that once jurisdiction over the labor
dispute has been properly acquired by
competent authority, that jurisdiction should
not be interfered with by the application of
the coercive processes of a strike. Indeed, it
 | Labor Relations-2A

is among the chief policies of the State to
promote and emphasize the primacy of free
collective bargaining and negotiations,
including voluntary arbitration, mediation,
and conciliation, as modes of settling labor,
or industrial disputes.
the Union was fully aware that the
arbitration proceedings were pending, good
faith cannot be invoked as a defense.
Hence, the Court declared that their strike
was illegal.

Furthermore, the dismissals of union

members, which allegedly triggered the
wildcat strike, are not sufficient grounds to
justify the radical recourse of the Union. The
questions that surround their dismissal are
connected to the alleged breach of the
"guarantee" by Sukhothai not to dismiss its
employees during the pendency of the
arbitration case, the very questions which
they also link to the other incidents of unfair
labor practices allegedly committed by
Sukhothai—these matters should have
been raised and resolved in the voluntary
arbitration proceedings that were
commenced precisely to address them.

On the other hand, if the Union

believed that the disciplinary measures had
nothing to do with the issues under
arbitration, then they should have availed of
the appropriate remedies under the Labor
Code, such as the institution of cases of
illegal dismissal or, by agreement of the
parties, the submission of the cases to the
grievance machinery of the CBA, if one is
available, so that they may be subjected to
separate voluntary arbitration proceedings,
or simply seek to terminate the pending
voluntary arbitration case and complete the
mandatory procedure for a lawful strike. The
Union should have availed themselves of
any of these alternative remedies instead of
resorting to a drastic and unlawful measure,
specifically, the holding a wildcat strike. And

105

Reonico_Strkes and Lockouts
Gold City Inc. vs. NLRC
G.R. No. 103560, July 6, 1995
FACTS
Petitioner was engaged
stevedoring and arrastre services. Members
of Macajalar Labor Union who are
employees of the petitioner, gathered in
mass action to express their grievances
regarding wages among others. Such strike
paralyzed the operations at the port in
Cagayan de Oro. On the same day, the
strikers filed individual notices of strike.
After failed conciliation conferences,
petitioner filed a case for illegal strike. The
NLRC issued a temporary restraining order
wherein majority of the strikers returned to
work, while others continued their protest.
The notice of strike was withdrawn after
verifying that the strike was staged by the
minority of the labor union without the
approval of the majority. The LA found the
strike illegal contrary to Article 264 of the
Labor Code. The NLRC affirmed the
decision but noted that the action was more
of a “protest action” than a strike. Hence,
the petition for certiorari.
ISSUE
Whether or not participants were
engaged in an illegal strike.
RULING
| Labor Relations-2A
YES. A strike, considered as the
most effective weapon of labor, is defined
as any temporary stoppage of work by the
concerted action of employees as a result of
an industrial or labor dispute. A labor
dispute includes any controversy or matter
concerning terms or conditions of
employment or the association or
representation of persons in negotiating,
fixing, maintaining, changing or arranging
in the terms and conditions of employment,
regardless of whether or not the disputants
stand in the proximate relation of employers
and employees. Private respondents and
their co-workers stopped working and held
the mass action on April 30, 1985 to press
for their wages and other benefits. What
transpired then was clearly a strike, for the
cessation of work by concerted action
resulted from a labor dispute. The Arbiter
correctly ruled that the strike was illegal for
failure to comply with the requirements of
Article 264 (now Article 263) paragraphs (c)
and (f) of the Labor Code.
Furthermore, the individual notices
of strike filed by the workers did not conform
to the notice required by the law to be filed
since they were represented by a union
(MLU-FFW) which even had an existing
collective bargaining agreement with
petitioner. Neither did the striking workers
observe the strike vote by secret ballot,
cooling-off period and reporting
requirements.
On the other hand, the effects of
such illegal strikes, outlined in Article 265
(now Article 264) of the Labor Code, make a
distinction between workers and union
officers who participate therein.
106

A union officer who knowingly
participates in an illegal strike and any
worker or union officer who knowingly
participates in the commission of illegal acts
during a strike may be declared to have lost
their employment status. An ordinary
striking worker cannot be terminated for
mere participation in an illegal strike. There
must be proof that he committed illegal acts
during a strike. A union officer, on the other
hand, may be terminated from work when
he knowingly participates in an illegal strike,
and like other workers, when he commits an
illegal act during a strike. In this case,
petitioner accepted the majority of the
striking workers, including union officers,
back to work. Private respondents were left
to continue with the strike after they refused
to submit to the "screening" required by the
company.
The question to be resolved now is
what these remaining strikers are entitled to
receive under the law, if any. An employee
is entitled to reinstatement and to his full
backwages when he is unjustly dismissed.
Reinstatement means restoration to
a state or condition from which one had
been removed or separated. Reinstatement
and backwages are separate and distinct
reliefs given to an illegally dismissed
employee. Separation pay is awarded when
reinstatement is not possible, due, for
instance, to strained relations between
employer and employee. It is also given as
a form of financial assistance when a
worker is dismissed in cases such as the
installation of labor saving devices,
redundancy, retrenchment to prevent
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| Labor Relations-2A
losses, closing or cessation of operation of
the establishment, or in case the employee
was found to have been suffering from a
disease such that his continued
employment is prohibited by law.
Backwages, on the other hand, is a
form of relief that restores the income that
was lost by reason of unlawful dismissal. It
is clear that there must generally be unjust
or illegal dismissal from work, before
reinstatement and backwages may be
granted. And in cases where reinstatement
is not possible or when dismissal is due to
valid causes, separation pay may be
granted.
Private respondents contend that
they were terminated for failure to submit to
the controversial "screening" requirement.
The Court finds that private respondents
were indeed dismissed when petitioner
refused to accept them back to work after
the former refused to submit to the
"screening" process. However, considering
that a decade has already lapsed from the
time the disputed strike occurred, the award
separation pay in lieu of reinstatement
would be more practical and appropriate.
No backwages will be awarded to private
respondent-union members as a penalty for
their participation in the illegal strike. Their
continued participation in said strike, even
after most of their co-workers had returned
to work, can hardly be rewarded by such an
award.

79_Terre
UFE v. Nestle
FACTS: UFE filed a notice of strike before
the Bureau of Labor Relations against
Nestle for unfair labor practice for violation
of Labor Code provisions on holiday pay
and non-implementation of CBA provisions.
Nestle filed a petition seeking assumption of
jurisdiction or to undergo compulsory
arbitration, thus Labor Minister Blas Ople
assumed jurisdiction and issued an order
enjoining any strike, lockout, or any
concerted activity. Despite this, the union
members staged a strike at all factories and
warehouses of Nestle in December 1985.
Nestle filed a petition to declare the strike
illegal; Ople issued another order, directing
all strikers to return to work within 48 hours,
but still they refused to do so. Nestle then
filed criminal charges against them, while
the new Labor Minister Sanchez ordered
the workers to return to their work, which
they did in March 1986. Sanchez also
dismissed UFE’s complaint for illegal
dismissal for lack of merit. Meanwhile, the
Labor Arbiter after trial on the merits
declared the strike illegal and found the
Union guilty of unfair labor practice.
Throughout August 1986 to September
1987, several strikes have been organized
by the UFE in the Cabuyao and Alabang
factories without notices of strike and in
defiance of the orders released by the
Minister of Labor. Nestle sent letters of
termination to the union members for illegal
strike and other illegal acts while UFE filed a
complaint for illegal dismissal and ULP.
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| Labor Relations-2A
The LA dismissed the complaint, which the
NLRC affirmed.
ISSUE: W/N the strikes were illegal.
HELD: YES. UFE seeks to absolve itself by
pointing out qualifying factors such as
motives, good faith, absence of findings on
specific participation and/or liability, and
limiting the no-strike provision to economic
strikes. UFE completely misses the
underlying principle embodied in Art. 264(g)
on the settlement of labor disputes and this
is, that assumption and certification orders
are executory in character and are to be
strictly complied with by the parties even
during the pendency of any petition
questioning their validity.
Regardless therefore of their motives, or the
validity of their claims, the striking workers
must cease and/or desist from any and all
acts that tend to, or undermine this authority
of the Secretary of Labor, once an
assumption and/or certification order is
issued. They cannot, for instance, ignore
return-to-work orders, citing unfair labor
practices on the part of the company, to
justify their actions.
An assumption and/or certification order of
the Secretary of Labor automatically results
in a return-to-work of all striking workers,
whether or not a corresponding order has
been issued by the Secretary of Labor.
Thus, the striking workers erred when they
continued with their strike alleging absence
of a return-to-work order. Article 264(g) is
clear. Once an assumption/certification

order is issued, strikes are enjoined, or if
one has already taken place, all strikers
shall immediately return to work.
A strike that is undertaken despite the
issuance by the Secretary of Labor of an
assumption or certification order becomes a
prohibited activity and thus illegal, pursuant
to the second paragraph of Art. 264 of the
Labor Code as amended. The Union
officers and members, as a result, are
deemed to have lost their employment
status for having knowingly participated in
an illegal act.
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| Labor Relations-2A
80_Santos
INTERPHIL EMPLOYEES V. INTERPHIL
G. R. NO. 142824, DEC. 19, 2001
FACTS:
Interphil Laboratories Employees Union-
FFW is the sole and exclusive bargaining
agent of the rank- and- file employees of
Interphil Laboratories, Inc- a company
engaged in the business of manufacturing
and packaging pharmaceutical products.
They had a Collective Bargaining
Agreement (CBA) effective from August 01,
1990 to July 31, 1993.
Prior to the expiration of the CBA,
Allesandro G. Salazar, the Vice President of
the Human Resources Department of the
respondent company was approached by
Nestor Ocampo, the union president and
Hernando Clemente. Salazar told the union
officers that the matter could be discussed
during formal negotiations. On March 1993,
the union officers again approached
Salazar. They required once more about the
CBA status and received the same reply
from Salazar. Ocampo requested for a
meeting to discuss the duration and
effectivity of CBA. Salazar however,
declared that it would still be premature to
discuss the matter and that the company
could not make a decision at a moment.
The following day all the rank- and file
employees refused to follow their regular
shift work schedule: From 6:00 am to 6:00
pm /6:00 pm to 6:00 am; 2:00 pm to 2:00
am
The employees stopped working and left
their workplace without sealing the
containers and securing the raw materials
they were working on. To minimize the
damage the overtime boycott was causing
the company, Salazar immediately asked
for the meeting with the union officers.
Gonzales told Salazar that the employees
will return to their normal work schedule if

the company would agree to their demands
as to the effectivity and duration of the new
CBA. The agreement must be effective for 2
years. Again, Salazar told the union officers
that the matter could be discussed during
formal negotiations unsatisfied with the
answer the employees started to engage in
a work slowdown campaign to delay the
production of the company.
On September 1993, respondent
company filed with NLRC a petition to
declare illegal petitioner union’s “overtime
boycott” and work slowdown” . It amounted
to illegal strike. October 1993, respondent
company filed with National Conciliation and
Mediation Board (NCMB) an urgent request
for preventive mediation aimed to help the
parties in their CBA negotiations. On
January 1994, petitioner union filed with the
NCMB a “Notice of Strike” citing unfair labor
allegedly committed by the respondent
company. Thereafter a month, Secretary of
Labor Nieves Confessor issued an order
directing respondent company to a).
Immediately accept all striking workers,
including the 53 terminated union officers;
b). Shop stewards and union members back
to work under the same terms and
conditions; and c). To pay all the unpaid
accrued year end benefits of its employees.
On the other hand, petitioner union was
directed to “strictly and immediately comply
with the return-to work order”. By
September 1995, Secretary Quisumbing
approved and adopted the decision of the
Labor Arbiter Caday declaring the overtime
boycott and work slowdown as illegal strike
and found out that the respondent company
is guilty of unfair labor practice.
Petitioner union’s reconsideration and
petition for certiorari were denied. Hence,
this petition.
ISSUE:
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| Labor Relations-2A
Whether or not the overtime boycott
or work slowdown” by the employees
constitutes a violation of the CBA which
prohibits the union to stage a strike or
engage in slowdown or interruption of work.
HELD:
YES. It’s clear that the actions taken
by the union amounted to illegal strike. The
SC classified the acts by the union as a
“strike on installment basis.” “Slowdown” is
an inherently illegal activity wherein the
workers purposefully remain at their
positions and accept wages, but at the
same time, select what parts of their allotted
task they want to perform, and refuse to do
other work
In the instant case, since there is a
contractual commitment “that there shall be
no strikes, walkouts, stoppage or slowdown
of work, boycotts or secondary boycotts x x
x or any interference with any of the
operations of the company during CBA. The
workers’ refusal to adhere to the work
schedule in force is a slowdown and it is
inherently illegal activity essentially illegal
even in the absence of a no-strike clause in
a CBA. The court also agrees that such
slowdown is generally condemned as
inherently illicit and unjustifiable because
while the employees “continue to work and
remain at their positions and accept the
wages paid to them. They select what part
of their allotted tasks they care to perform.
In other words, they work on their own
terms.
 | Labor Relations-2A

81 THE NLRC GRAVELY ABUSED ITS

DISCRETION IN ALLOWING THE TRO TO
SAN MIGUEL CORPORATION, petitioner, vs. LAPSE WITHOUT RESOLVING THE PRAYER
NATIONAL LABOR RELATIONS FOR INJUNCTION, DENYING INJUNCTION
COMMISSION, Second Division, ILAW AT WITHOUT EXPRESSING THE FACTS AND
BUKLOD NG MANGGAGAWA THE LAW ON WHICH IT IS BASED AND
(IBM), respondents. ISSUING ITS DENIAL FIVE MONTHS AFTER
[25]
THE LAPSE OF THE TRO.
DECISION
(b) We find for the petitioner.
(a) Petitioner San Miguel Corporation (SMC)
and respondent Ilaw at Buklod ng (c) Article 254 of the Labor Code provides that
Manggagawa (IBM), exclusive bargaining no temporary or permanent injunction or
agent of petitioners daily-paid rank and file restraining order in any case involving or
employees, executed a Collective growing out of labor disputes shall be issued
Bargaining Agreement (CBA) under which by any court or other entity except as
they agreed to submit all disputes to otherwise provided in Articles 218 and 264
grievance and arbitration proceedings. The of the Labor Code. Under the first exception,
CBA also included a mutually enforceable Article 218 (e) of the Labor Code expressly
no-strike no-lockout agreement. The confers upon the NLRC the power to enjoin
pertinent provisions of the said CBA are or restrain actual and threatened
quoted hereunder: commission of any or all prohibited or
unlawful acts, or to require the performance
A perusal of the records of the case clearly of a particular act in any labor dispute which,
shows that the basic point to be resolved entails if not restrained or performed forthwith, may
the question of as to who between the two (2) cause grave or irreparable damage to any
groups shall represent the workers for collective party or render ineffectual any decision in
bargaining purposes, which has been the favor of such party x x x. The second
subject of a Petition for Interpleader case exception, on the other hand, is when the
pending resolution before the Office of the labor organization or the employer engages
Secretary of Labor and Employment. Similarly, in any of the prohibited activities
the other issues raised which have been enumerated in Article 264.
discussed by the parties at the plant level, are
ancillary issues to the main question, that is, the (d) Pursuant to Article 218 (e), the coercive
[12]
union leadership... (Emphasis supplied) measure of injunction may also be used to
restrain an actual or threatened unlawful
Aggrieved by public respondents denial of a strike. In the case of San Miguel Corporation
permanent injunction, petitioner contends that: [26]
v. NLRC, where the same issue of NLRCs
duty to enjoin an unlawful strike was raised,
A. we ruled that the NLRC committed grave
abuse of discretion when it denied the
THE NLRC GRAVELY ABUSED ITS
petition for injunction to restrain the union
DISCRETION WHEN IT FAILED TO ENFORCE,
from declaring a strike based on non-
BY INJUNCTION, THE PARTIES RECIPROCAL
strikeable grounds. Further, in IBM v.
OBLIGATIONS TO SUBMIT TO ARBITRATION [27]
NLRC, we held that it is the legal duty and
AND NOT TO STRIKE.
obligation of the NLRC to enjoin a partial
B. strike staged in violation of the law. Failure
promptly to issue an injunction by the public
THE NLRC GRAVELY ABUSED ITS respondent was likewise held therein to be
DISCRETION IN WITHHOLDING INJUNCTION an abuse of discretion.
WHICH IS THE ONLY IMMEDIATE AND
EFFECTIVE SUBSTITUTE FOR THE (e) In the case at bar, petitioner sought a
DISASTROUS ECONOMIC WARFARE THAT permanent injunction to enjoin the
ARBITRATION IS DESIGNED TO AVOID. respondents strike. A strike is considered as
the most effective weapon in protecting the
C. rights of the employees to improve the terms

111

and conditions of their employment.
However, to be valid, a strike must be
[28]
pursued within legal bounds. One of the
procedural requisites that Article 263 of the
Labor Code and its Implementing Rules
prescribe is the filing of a valid notice of
strike with the NCMB. Imposed for the
purpose of encouraging the voluntary
[29]
settlement of disputes, this requirement
has been held to be mandatory, the lack of
[30]
which shall render a strike illegal.
(f) In the present case, NCMB converted IBMs
notices into preventive mediation as it found
that the real issues raised are non-
strikeable. Such order is in pursuance of the
NCMBs duty to exert all efforts at mediation
and conciliation to enable the parties to
[31]
settle the dispute amicably, and in line
with the state policy of favoring voluntary
modes of settling labor disputes. In
[32]
accordance with the Implementing Rules of
the Labor Code, the said conversion has the
effect of dismissing the notices of strike filed
[33]
by respondent. A case in point is PAL v.
[34]
Drilon, where we declared a strike illegal
for lack of a valid notice of strike, in view of
the NCMBs conversion of the notice therein
into a preventive mediation case. We ruled,
thus:
The NCMB had declared the notice of strike as
appropriate for preventive mediation. The effect
of that declaration (which PALEA did not ask to
be reconsidered or set aside) was to drop the
case from the docket of notice of strikes, as
provided in Rule 41 of the NCMB Rules, as if
there was no notice of strike. During the
pendency of preventive mediation proceedings
no strike could be legally declared... The strike
which the union mounted, while preventive
mediation proceedings were ongoing, was aptly
described by the petitioner as an ambush.
(Emphasis supplied)
(g) Clearly, therefore, applying the aforecited
ruling to the case at bar, when the NCMB
ordered the preventive mediation on May 2,
1994, respondent had thereupon lost the
notices of strike it had filed. Subsequently,
however, it still defiantly proceeded with the
strike while mediation was ongoing, and
notwithstanding the letter-advisories of
NCMB warning it of its lack of notice of
strike. In the case of NUWHRAIN v.
[35]
NLRC, where the petitioner-union therein
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| Labor Relations-2A
similarly defied a prohibition by the NCMB,
we said:
Petitioners should have complied with the
prohibition to strike ordered by the NCMB when
the latter dismissed the notices of strike after
finding that the alleged acts of discrimination of
the hotel were not ULP, hence not strikeable.
The refusal of the petitioners to heed said
proscription of the NCMB is reflective of bad
faith.
(h) Such disregard of the mediation
proceedings was a blatant violation of the
Implementing Rules, which explicitly oblige
the parties to bargain collectively in good
faith and prohibit them from impeding or
[36]
disrupting the proceedings.
(i) The NCMB having no coercive powers of
injunction, petitioner sought recourse from
the public respondent. The NLRC issued a
TRO only for free ingress to and egress from
petitioners plants, but did not enjoin the
unlawful strike itself. It ignored the fatal lack
of notice of strike, and five months after
came out with a decision summarily
rejecting petitioners cited jurisprudence in
this wise:
Complainants scholarly and impressive
arguments, formidably supported by a long line
of jurisprudence cannot however be
appropriately considered in the favorable
resolution of the instant case for the
complainant. The cited jurisprudence do not
squarely cover and apply in this case, as they
are not similarly situated and the remedy sought
[37]
for were different.
(j) Unfortunately, the NLRC decision stated no
reason to substantiate the above conclusion.
(k) Public respondent, in its decision, moreover
ruled that there was a lack of factual basis in
issuing the injunction. Contrary to the
NLRCs finding, we find that at the time the
injunction was being sought, there existed a
threat to revive the unlawful strike as
evidenced by the flyers then being circulated
by the IBM-NCR Council which led the
union. These flyers categorically
declared: Ipaalala nyo sa management na
hindi iniaatras ang ating Notice of Strike
(NOS) at anumang oras ay pwede nating
[38]
muling itirik ang picket line. These flyers
were not denied by respondent, and were

dated June 19, 1994, just a day after the
unions manifestation with the NLRC that
there existed no threat of commission of
prohibited activities.
(l) Moreover, it bears stressing that Article
[39]
264(a) of the Labor Code explicitly states
that a declaration of strike without first
having filed the required notice is a
prohibited activity, which may be prevented
through an injunction in accordance with
Article 254. Clearly, public respondent
should have granted the injunctive relief to
prevent the grave damage brought about by
the unlawful strike.
(m) Also noteworthy is public respondents
disregard of petitioners argument pointing
out the unions failure to observe the CBA
provisions on grievance and arbitration. In
the case of San Miguel Corp. v.
[40]
NLRC, we ruled that the union therein
violated the mandatory provisions of the
CBA when it filed a notice of strike without
availing of the remedies prescribed therein.
Thus we held:
x x x For failing to exhaust all steps in the
grievance machinery and arbitration
proceedings provided in the Collective
Bargaining Agreement, the notice of strike
should have been dismissed by the NLRC and
private respondent union ordered to proceed
with the grievance and arbitration proceedings.
In the case of Liberal Labor Union vs. Phil.
Can Co., the court declared as illegal the strike
staged by the union for not complying with the
grievance procedure provided in the collective
bargaining agreement. . . (Citations omitted)
(n) As in the abovecited case, petitioner herein
evinced its willingness to negotiate with the
union by seeking for an order from the
NLRC to compel observance of the
grievance and arbitration proceedings.
Respondent however resorted to force
without exhausting all available means
within its reach. Such infringement of the
aforecited CBA provisions constitutes further
justification for the issuance of an injunction
against the strike. As we said long ago:
Strikes held in violation of the terms
contained in a collective bargaining
agreement are illegal especially when they
provide for conclusive arbitration clauses.
These agreements must be strictly adhered
113
| Labor Relations-2A
to and respected if their ends have to be
[41]
achieved.
(o) As to petitioners allegation of violation of the
no-strike provision in the CBA, jurisprudence
has enunciated that such clauses only bar
strikes which are economic in nature, but not
strikes grounded on unfair labor
[42]
practices. The notices filed in the case at
bar alleged unfair labor practices, the initial
determination of which would entail fact-
finding that is best left for the labor arbiters.
Nevertheless, our finding herein of the
invalidity of the notices of strike dispenses
with the need to discuss this issue.
(p) We cannot sanction the respondent-unions
brazen disregard of legal requirements
imposed purposely to carry out the state
policy of promoting voluntary modes of
settling disputes. The states commitment
to enforce mutual compliance therewith to
foster industrial peace is affirmed by no less
[43]
than our Constitution. Trade unionism and
strikes are legitimate weapons of labor
granted by our statutes. But misuse of these
instruments can be the subject of judicial
intervention to forestall grave injury to a
[44]
business enterprise.
(q) WHEREFORE, the instant petition is hereby
GRANTED. The decision and resolution of
the NLRC in Injunction Case No. 00468-94
are REVERSED and SET ASIDE. Petitioner
and private respondent are hereby directed
to submit the issues raised in the dismissed
notices of strike to grievance procedure and
proceed with arbitration proceedings as
prescribed in their CBA, if necessary. No
pronouncement as to costs.

82_PALACIOS
PERFECTO FERRER v. COURT OF
INDUSTRIAL RELATIONS
FACTS:
After an election held, which
Inhelder Laboratories Inc. and Sister
Companies Employees Union obtained the
requisites majority, the Union submitted to
the Management of said corporations a
set of demands for a collective
bargaining agreement (first draft). This
led to negotiations, held, sometimes, with
the intervention of the Conciliation Division
of the Bureau of Labor, and, sometimes,
directly, between the representatives of the
parties, and lasting for several weeks.
In a meeting held before said
Conciliation Division a draft was drawn, to
which the Management refers as "final
draft"(second draft). However, petitioners'
representatives pressed for the inclusion, in
the agreement, of a union clause, an
accumulated sick leave clause, and an
accumulated vacation leave clause, apart
from the increase of the high cost of living
monthly allowance from P20.00 to P30.00,
the creation of a grievance committee and a
general salary increase.
The negotiations continued, in the
course of which the Management agreed to
increase the high cost of living allowance to
P25.00, provided that the other demands
were withdrawn, to which petitioners
allegedly gave their conformity. Another
draft of agreement, which the
representatives of Management, again,
characterizes as "final" (third draft) was
prepared, and the representatives of both
parties initialed it, with the understanding
that the agreement would be signed on
June 1, 1963. However, petitioners'
representative asked for the inclusion in the
agreement a union shop or union security
clause. This request not having been
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| Labor Relations-2A
granted, the Union later refused to sign the
agreement.
The Management circulated a
Memorandum and distributed it to the
members of the union, alleging that the
Union refused to sign the CBA despite of it
yielded to the demand for an increase in the
high cost of living allowance and the
creation of a grievance committee. Soon
thereafter, several members of the Union
resigned in view of the apparent failure of
their Union officer to enter into a working
agreement with the Management. With that,
the petitioners believed that said
resignations had been inspired by the
Management, and that
the latter had resorted thereto in order to
exert pressure upon the Union and compel
the same to sign the draft of agreement
without the said union shop or union
security clause. Hence, the petitioners filed
a 30-day notice of strike upon the ground
that respondents had been "bargaining in
bad faith". However, the Management, in
turn, filed unfair labor practice charges
against the Union, for alleged refusal to
bargain and alleged that the strike is illegal
on the ground of bad faith of the Union.
ISSUE: Is the strike illegal?
HELD: NO
The contention of the Management
that there was already a perfected contract
and that the Union’s refusal to sign the
contract constitute unfair labor practice and
bad faith on the part of the Union is without
merit. The draft of agreement made and
amended had been initialed by
representatives of both parties and that the
Management refers thereto as a "final draft"
(1). However, subsequent draft is likewise,
called by the Management as a "final" draft
(2). Yet, negotiations between the parties
continued after the preparation of said
"final" draft, thus indicating it as not an
expressive of a complete, definite and
perfected agreement with the petitioners, for
otherwise, the Management would not have

participated in the negotiations that took
place or continued thereafter. Hence, the so
called “final draft” was no more than a draft
of contract not a contract itself.
The surrounding circumstances
were such that petitioners were reasonably
justified in believing that the respondents'
acts constituted unfair labor practices and
that petitioners had to strike forthwith in
order to arrest the evil effects of said
practices upon the Union and its members.
The Court held that the strike in question
had been called to offset what petitioners
were warranted in believing in good faith to
be unfair labor practices on the part of
Management, that petitioners were not
bound, therefore, to wait for the expiration of
thirty (30) days from notice of strike before
staging the same, that said strike was not,
accordingly, illegal and that the strikers had
not thereby lost their status as employees of
respondents herein.
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| Labor Relations-2A
83
Malayang Samahan ng mga
Manggagawa sa M. Greenfield v. Ramos
GR NO. 113907
February 28, 2000
Facts:
The petitioner, Malayang Samahan
ng mga Manggagawa sa M. Greenfield,
Inc., (B) (MSMG), hereinafter referred to as
the "local union", is an affiliate of the private
respondent, United Lumber and General
Workers of the Philippines (ULGWP),
referred to as the "federation". A local union
election was held under the auspices of the
ULGWP wherein the herein petitioner, Beda
Magdalena Villanueva, and the other union
officers were proclaimed as winners.
Petition for Impeachment was filed with the
national federation ULGWP by the defeated
candidates in the aforementioned election.
The federation conducted an audit of the
local union funds. The investigation did not
yield any unfavorable result and the local
union officers were cleared of the charges
of anomaly in the custody, handling and
disposition of the union funds. The defeated
candidates filed a Petition for
Impeachment/Expulsion of the local union
officers with the DOLE NCR but were
dismissed for failure to substantiate the
charges and to present evidence. The local
union held a general membership meeting
at the Caruncho Complex in Pasig. Several
union members failed to attend the meeting,
prompting the Executive Board to create a
committee tasked to investigate the non-
attendance of several union members in the
said assembly, pursuant to Sections 4 and
5, Article V of the Constitution and By-Laws
of the union. The local union wrote
respondent company a letter requesting it to
deduct the union fines from the
wages/salaries of those union members
who failed to attend the general
membership meeting. The Secretary
General of the national federation,
Godofredo Paceño, Jr. disapproved the

resolution of the local union imposing the
P50.00 fine. The union officers protested
such action by the Federation. The
Federation wrote respondent company a
letter advising the latter not to deduct the
fifty-peso fine from the salaries of the union
members requesting that:. . . any and all
future representations by MSMG affecting a
number of members be first cleared from
the federation before corresponding action
by the Company
Respondent company sent a reply to
petitioner union's request in a letter, stating
that it cannot deduct fines from the
employees' salary without going against
certain laws. The company suggested that
the union refer the matter to the proper
government office for resolution in order to
avoid placing the company in the middle of
the issue. The imposition of P50.00 fine
became the subject of bitter disagreement
between the Federation and the local union
culminating in the latter's declaration of
general autonomy from the former through
Resolution No. 10 passed by the local
executive board and ratified by the general
membership
In retaliation, the national federation asked
respondent company to stop the remittance
of the local union's share in the education
funds effective August 1988. This was
objected to by the local union which
demanded that the education fund be
remitted to it in full.
The company was thus constrained to file a
Complaint for Interpleader with a Petition for
Declaratory Relief with the Med-Arbitration
Branch of the Department of Labor and
Employment where it was resolved in favor
of the company. The resolution was later
modified.
Officials of ULGWP called a Special
National Executive Board Meeting at
Nasipit, Agusan del Norte where a
Resolution was passed placing the MSMG
under trusteeship and appointing
respondent Cesar Clarete as administrator.
The administrator wrote the respondent
116
| Labor Relations-2A
company informing the latter of its
designation of a certain Alfredo Kalingking
as local union president and "disauthorizing"
the incumbent union officers from
representing the employees. Petitioner
union officers received identical letters from
the administrator requiring them to explain
within 72 hours why they should not be
removed from their office and expelled from
union membership. The officers were
thereafter expelled from ULGWP. The
federation advised respondent company of
the expulsion of the 30 union officers and
demanded their separation from
employment pursuant to the Union Security
Clause in their collective bargaining
agreement.
Thereafter, the Federation filed a Notice of
Strike with the National Conciliation and
Mediation Board to compel the company to
effect the immediate termination of the
expelled union officers. Under the pressure
of a threatened strike, respondent company
terminated the 30 union officers from
employment, serving them identical copies
of the termination letter. The expelled union
officers assigned in the first shift were
physically or bodily brought out of the
company premises by the company's
security guards. Likewise, those assigned to
the second shift were not allowed to report
for work. This provoked some of the
members of the local union to demonstrate
their protest for the dismissal of the said
union officers. Some union members left
their work posts and walked out of the
company premises. The Federation, having
achieved its objective, withdrew the Notice
of Strike filed with the NCMB. Petitioners
filed a Notice of Strike with the NCMB,
DOLE, Manila, docketed as Case No.
NCMB-NCR-NS-03-216-89, alleging the
following grounds for the strike:
(a) Discrimination
(b) Interference in union activities
(c) Mass dismissal of union officers and
shop stewards

(d) Threats, coercion and intimidation
(e) Union busting
A strike vote referendum was conducted
and out of 2, 103 union members who cast
their votes, 2,086 members voted to declare
a strike. The thirty (30) dismissed union
officers filed an urgent petition with the
Office of the Secretary of the Department of
Labor and Employment praying for the
suspension of the effects of their termination
from employment. However, the petition
was dismissed by then Secretary Franklin
Drilon.
A total of 78 union shop stewards were
placed under preventive suspension by
respondent company. This prompted the
union members to again stage a walk-out
and resulted in the official declaration of
strike. The strike was attended with
violence, force and intimidation on both
sides resulting to physical injuries to several
employees, both striking and non-striking,
and damage to company properties.
The employees who participated in the
strike and allegedly figured in the violent
incident were placed under preventive
suspension by respondent company. The
company also sent return-to-work notices to
the home addresses of the striking
employees thrice successively, on March
27, April 8 and April 31, 1989, respectively.
However, respondent company admitted
that only 261 employees were eventually
accepted back to work. Those who did not
respond to the return-to-work notice were
sent termination letters .
Petitioners filed a complaint charging private
respondents of unfair labor practice which
consists of union busting, illegal dismissal,
illegal suspension, interference in union
activities, discrimination, threats,
intimidation, coercion, violence, and
oppression.
After the filing of the complaint, the lease
contracts on the respondent company's
office and factory at Merville Subdivision,
117
| Labor Relations-2A
Parañaque expired and were not renewed.
Upon demand of the owners of the
premises, the company was compelled to
vacate its office and factory.
Thereafter, the company transferred its
administration and account/client servicing
department at AFP-RSBS Industrial Park in
Taguig, Metro Manila. For failure to find a
suitable place in Metro Manila for relocation
of its factory and manufacturing operations,
the company was constrained to move the
said departments to Tacloban, Leyte. The
complaint for unfair labor practice was
assigned to Labor Arbiter Manuel Asuncion
but was thereafter reassigned to Labor
Arbiter Cresencio Ramos when respondents
moved to inhibit him from acting on the
case. Finding the termination to be valid in
compliance with the union security clause of
the collective bargaining agreement, Labor
Arbiter Cresencio Ramos dismissed the
complaint. The First Division affirmed the
Labor Arbiter’s disposition.
Isssue:
WON the strike was illegal.
Held:
This ruling of the NLRC is erroneous
With regard to the issue of the legality or
illegality of the strike, the Labor Arbiter held
that the strike was illegal for the following
reasons: (1) it was based on an intra-union
dispute which cannot properly be the
subject of a strike, the right to strike being
limited to cases of bargaining deadlocks
and unfair labor practice (2) it was made in
violation of the "no strike, no lock-out"
clause in the CBA, and (3) it was attended
with violence, force and intimidation upon
the persons of the company officials, other
employees reporting for work and third
persons having legitimate business with the
company, resulting to serious physical
injuries to several employees and damage
to company property.

On the submission that the strike was illegal
for being grounded on a non-strikeable
issue, that is, the intra-union conflict
between the federation and the local union,
it bears reiterating that when respondent
company dismissed the union officers, the
issue was transformed into a termination
dispute and brought respondent company
into the picture. Petitioners believed in good
faith that in dismissing them upon request
by the federation, respondent company was
guilty of unfair labor practice in that it
violated the petitioner's right to self-
organization. The strike was staged to
protest respondent company's act of
dismissing the union officers. Even if the
allegations of unfair labor practice are
subsequently found out to be untrue, the
presumption of legality of the strike prevails.
A no strike, no lock out provision can only
be invoked when the strike is economic in
nature, i.e. to force wage or other
concessions from the employer which he is
not required by law to grant. Such a
provision cannot be used to assail the
legality of a strike which is grounded on
unfair labor practice, as was the honest
belief of herein petitioners. Again, whether
or not there was indeed unfair labor practice
does not affect the strike.
On the allegation of violence committed in
the course of the strike, it must be
remembered that the Labor Arbiter and the
Commission found that "the parties are
agreed that there were violent incident
resulting to injuries on both the union and
management." The evidence on record
show that the violence cannot be attributed
to the striking employees alone for the
company itself employed hired men to
pacify the strikers. With violence committed
on both sides, the management and the
employees, such violence cannot be a
ground for declaring the strike as illegal.
118
| Labor Relations-2A
84_ACOSTA
GRAND BOULEVARD HOTEL
(FORMERLY KNOWN AS SILAHIS
INTERNATIONAL HOTEL, INC.) v
GENUINE LABOR ORGANIZATION OF
WORKERS IN HOTEL, RESTAURANT
AND ALLIED INDUSTRIES (GLOWHRAIN)
G.R. NO. 153664 JULY 18, 2003
GRAND BOULEVARD HOTEL v EDNA B.
DACANAY
G.R. NO. 153665 JULY 18, 2003
FACTS: GLOWHRAIN and petitioner GBH
executed a CBA. Later, petitioner dismissed
some of its employees and suspended
others who were members of the
respondent union. The union filed a notice
of strike with the NLRC alleging illegal
dismissal, illegal suspension, CBA
violations, and harassment.
The acting SOLE issued as status quo ante
bellum order certifying the labor dispute to
the NLRC0 for compulsory arbitration
pursuant to Article 263 (g) of the Labor
Code. Subsequently, the union filed another
notice of strike due to its belief that GBH
was committing ULP. The SOLE responded
by issuing another status quo ante bellum
order. Further, it directed the employees to
return to work, enjoined the parties from
engaging in strike or lockouts, and ordered
the parties to sign a new CBA.
GBH, through its general manager, then
wrote to SOLE to inform him of the
company’s decision to retrench around 200
employees due to financial difficulties.
Meanwhile, the union wrote to the SOLE
that the union will conduct a strike vote
referendum. This led to the issuance by the
SOLE of another status quo ante bellum
order certifying the case to the NLRC for
compulsory arbitration and enjoining the
parties from engaging in any strike or
lockout. But another notice of strike was
filed by the union on September 27, 1990.
 | Labor Relations-2A

The SOLE issued another certification
order.
When GBH implemented its retrenchment
program, the union filed a notice of strike on
November 16, 1900 and staged a picket on
the same day. The SOLE thus issued a
Cease and Desist order and ordered the
reinstatement of some of the employees.
GBH subsequently filed a complaint for
illegal strike against the union with the
NLRC. The LA found in favor of GBH,
finding that the union was guilty of illegal
strike and declaring the union officers to
have forfeited their employment. The union
appealed to the NLRC, which later affirmed
the Labor Arbiter’s decision. However, on
certiorari, the CA reversed. Hence, this
petition.
of strike of September 27 had already been
taken cognizance of by the SOLE when he
issued a status quo ante bellum order
enjoining the union from staging a strike.
Thus, when the union went on strike despite
the SOLE order, it violated of Article 264 of
the LC.
The union further claims that it went on
strike because of its belief in good faith that
the company was committing ULP. Still, the
Court held that a claim of good faith is not a
valid excuse to dispense with the procedural
steps for lawful strike.

ISSUE: Whether or not the strike staged by

the union is legal.

HELD: NO. Under Article 263, the requisites

for a valid strike are as follows: (a) a notice
of strike fled with the DOLE thirty days
before the intended date thereof or fifteen
days in case of ULP; (b) strike vote
approved by a majority of the total union
membership in the bargaining unit
concerned obtained by secret ballot in a
meeting called for that purpose; (c) notice
given to the DOLE of the results of the
voting at least seven days before the
intended strike.

In the case, the union went on strike

simultaneously with the filing of the notice of
strike. This rendered the strike illegal for
failure to comply with the requisite periods
as stated above. Moreover, a strike
undertaken despite the issuance by the
SOLE of certification order becomes a
prohibited activity and thus, illegal pursuant
to Article 264 (a) of the LC.

The union claimed that its November 16

notice merely reiterated its September 27
notice of strike, thus it claims that it
complied with the statutory procedural
requirements for lawful strike. The court
held that the matters contained in the notice

119

85_BARRIETA
UNIVERSITY OF SAN AGUSTIN v. CA
G.R. NO. 169632, March 28, 2006
Garcia, J.:
FACTS
On July 27, 2000, the University and its
Union entered into a 5-year CBA. 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.
During the negotiations, the parties could
not agree on the manner of computing the
Tuition Incremental Proceeds (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 for SY2003-
2004 and SY2004-2005.
Thereafter, the Union filed a Notice of Strike
before the NCMB. The parties then made a
joint request for the SOLE to assume
jurisdiction over the dispute. On September
19, 2003, the Union staged a strike. At
approximately 8:45 a.m., the sheriffs posted
copies of the AJO at the main gate of San
Agustin University, at the main entrance of
its buildings and at the Union's office inside
the campus. At 9:20 a.m., the sheriffs
served the AJO on the University.
Notwithstanding the sheriffs' advice as to
the legal implication of the Union's refusal to
be served with the AJO, the Union went
ahead with the strike. At around 5:25 p.m.,
the Union president arrived at the
respondent University's premises and
received the AJO from the sheriffs.
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The University filed a Petition to Declare
Illegal Strike and Loss of Employment
Status at NLRC. SOLE DISMISSED the
petition to declare the strike illegal for want
of legal and factual basis. The University
thereafter appeal the decision with the CA.
CA DECLARED the strike held on
September 19, 2003 by the Union as
ILLEGAL and ordered that the union
officers are therefore deemed to have lost
their employment status.
ISSUE
Whether or not the strike was illegal.
HELD
YES. To be sure, the Union was not able to
sufficiently dispute the truth of the narration
of facts contained in the sheriff's report.
Hence, it was not unreasonable for the CA
to conclude that there was a deliberate
intent by the Union and its officers to
disregard the AJO and proceed with their
strike, which, by their act of disregarding
said AJO made said strike illegal. The AJO
was issued by the SOLE pursuant to Article
263(g) of the Labor Code, which reads:
Art. 263. Strikes, picketing, and
lockouts. - ... (g) When, in his opinion,
there exists a labor dispute causing or likely
to cause a strike or lockout in an industry
indispensable to the national interest, the
Secretary of Labor and Employment may
assume jurisdiction over the dispute and
decide it or certify the same to the
Commission for compulsory arbitration.
Such assumption or certification 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. The Secretary
 | Labor Relations-2A

of Labor and Employment or the
Commission may seek the assistance of law
enforcement agencies to ensure compliance
with this provision as well as with such
orders as he may issue to enforce the
same. (Emphasis supplied).
Conclusively, when the SOLE assumes
jurisdiction over a labor dispute in an
industry indispensable to national interest or
certifies the same to the NLRC for
compulsory arbitration, such assumption or
certification shall have the effect of
automatically enjoining the intended or
impending strike or lockout. Moreover, if
one had already taken place, all striking
workers 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 Trans-Asia
Shipping Lines, Inc., et al. vs. CA, et al., the
Court declared that when the Secretary
exercises these powers, he is granted great
breadth of discretion in order to find a
solution to a labor dispute. The most
obvious of these powers is the automatic
enjoining of an impending strike or lockout
or the lifting thereof if one has already taken
place. Assumption of jurisdiction over a
labor dispute, or the certification of the
same to the NLRC for compulsory
arbitration, always co-exists with an order
for workers to return to work immediately
and for employers to readmit all workers
under the same terms and conditions
prevailing before the strike or lockout.
263(g) of the Labor Code, supra, is explicit
that if a strike has already taken place at
the time of assumption of jurisdiction 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 lock-out. This is
compounded further by this Court's rulings
which have never interpreted the phrase
"immediately return to work" found in Article
263(g) to mean "within twenty four (24)
hours." On the other hand, the tenor of
these ponencias indicates an almost
instantaneous or automatic compliance for a
striker to return to work once an AJO has
been duly served.
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.

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 assertion of a well
settled practice that the SOLE always gives
twenty-four hours (24) to the striking
workers within which to return to work,
offers no refuge. Aside from the fact that
this alleged well settled practice has no
basis in law and jurisprudence, Article

121

86_BATALLER
TELEFUNKEN SEMICONDUCTORS EMP
LOYEES UNION-FFW vs. CA, DOLE-
SEC, and TEMIC TELEFUNKEN MICROE
LECTRONICS, (PHILS.), INC.
G.R. Nos. 143013-14, 18 December 2000
FACTS:
The labor dispute started when the
Company and the Union reached a
deadlock in their negotiations for a new
collective bargaining agreement. The Union
filed a Notice of Strike with the NCMB. The
Acting DOLE Secretary intervened and
assumed jurisdiction over the dispute and
thus enjoined any strike or lockout, whether
actual or intended, between the parties.
Despite the assumption Order, the Union
struck. And also on despite the Notice of the
Return-to-Work Order, still some of the
striking workers refused to heed the order
and continued with their picket. The
Company then issued letters of termination
for cause to the workers who did not report
back to work despite the Notice of
Assumption and Return-to-Work Orders
issued by the Acting DOLE-Sec. However,
the Acting DOLE Secretary issued another
Order directing the Company to reinstate all
striking workers “except the Union Officers,
shop stewards, and those with pending
criminal charges, x x x” while the resolution
of the legality of the strike was pending. The
strike was later declared illegal by the Sec.
ISSUE:
Whether or not defiance to the assumption
and return-to-work orders of the Secretary
of Labor after assumption of jurisdiction is a
valid ground to terminate the employment of
striking members
HELD:
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YES.
It is clear from Art. 263(g) that the moment
the Secretary of Labor assumes jurisdiction
over a labor dispute in an industry
indispensable to national interest, such
assumption shall have the effect of
automatically enjoining the intended or
impending strike. It was not even necessary
for the Secretary of Labor to issue another
order directing them to return to work. The
mere issuance of an assumption order by
the Secretary of Labor automatically carries
with it a return-to-work order, even if the
directive to return to work is not expressly
stated in the assumption order. However,
petitioners refused to acknowledge this
directive of the Secretary of Labor thereby
necessitating the issuance of another order
expressly directing the striking workers to
cease and desist from their actual strike,
and to immediately return to work but which
directive the herein petitioners opted to
ignore.
In this connection, Article 264 provides
prohibited activities. One of which is that
“No strike or lock out shall be declared after
the assumption of jurisdiction by the
President or the Secretary or after
certification or submission of the dispute to
compulsory or voluntary arbitration”. The
rationale of this prohibition is that once
jurisdiction over the labor dispute has been
properly acquired by the competent
authority, that jurisdiction should not be
interfered with by the application of the
coercive processes of a strike. We have
held in a number of cases that defiance to
the assumption and return-to-work orders of
the Secretary of Labor after he has
assumed jurisdiction is a valid ground for
loss of the employment status of any
striking union officer or member.

87_CANAPE
ST. SCHOLASTICA’S COLLEGE VS.
TORRES
210 SCRA 565
GR. NO 100158 JUNE 29, 1992
FACTS:
 The Union and College initiated
negotiations for a first ever CBA
which resulted in a deadlock and
prompted the union to file a
notice of strike with the DOLE.
 Union declared a strike which
paralyzed the operations of the
College and public respondent
Sec. of Labor immediately
assumed jurisdiction over the
labor dispute.
 Instead of returning to work, the
union filed a motion for
reconsideration of the return to
work order.
 The college sent individual letters
to the striking employees
requiring them to return to work.
In response union presented
demands, the most important of
which is the unconditional
acceptance back to work of the
striking employees. But these
were rejected.
 Sec. of Labor denied the motion
for reconsideration for his return
to work order and sternly warned
striking employees to comply with
its terms.
 Conciliation meetings were held
but this proved futile as the
college remained steadfast in its
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position that any return to work
order should be unconditional.
 The College manifested to
respondent Sec. that the union
continued to defy his return to
work order.
 The College sent termination
letters to individual strikers and
filed a complaint for illegal strike
against the union.
 The union moved for the
enforcement of the return to work
order before the Sec.
 The Sec. issued an order directing
reinstatement of striking union
members and holding union
officers responsible for the
violation of the return to work
order and were correspondingly
terminated.
 Both parties moved for the partial
consideration of the return to
work order.
 Hence tis petition.
ISSUE:
WON striking union members,
terminated for abandonment of work
after failing to comply with the return to
work order of Sec. of labor, reinstated.
HELD:
The Labor Code provides that if a
strike has already taken place at the time
of assumption, all striking employees
should immediately return to work. This
means that a return to work order is
immediately effective and executory,
notwithstanding the filing of a motion for
reconsideration. It must be strictly
complied with even during the pendency

of any petition questioning its validity.
After all, the assumption and/or
certification order issued in the exercise
of the Sec.’s compulsive power of
arbitration and until set aside, must
therefore be complied with immediately.
The college correspondingly had
every right to terminate the services of
those who chose to disregard the return
to work order issued by the Sec. of
Labor in order to protect the interest of
the students who form part of the youth
of the land.
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88_CARILLO
MANILA DIAMOND UNION vs CA
FACTS:
The Union filed a PCE which was later on
dismissed. The Union then sent a letter to
the Hotel informing it of its desire to
negotiate for a collective bargaining
agreement but the Hotel refused in view of
the earlier dismissed PCE. A Notice of
Strike was thereafter filed with NCMB for
the Hotels alleged refusal to bargain and for
alleged acts of unfair labor practice. The
Union staged a strike against the Hotel. The
Hotel claims that the strike was illegal and it
had to dismiss some employees for their
participation. The Union, on the other hand,
accused the Hotel of illegally dismissing the
workers.
What is pertinent to this case, however, is
the Order issued by the then Secretary of
Labor and Employment Cresenciano B.
Trajano assuming jurisdiction over the labor
dispute. A Petition for Assumption of
Jurisdiction was filed by the Union.
Accordingly, the striking officers and
members of the Manila Diamond Hotel
Employees Union --- were directed to return
to work within 24 hours upon receipt of this
Order and the Hotel to accept them back
under the same terms and conditions
prevailing prior to the strike. The Union
received the aforesaid Order and its
members reported for work the next day.
The Hotel, however, refused to accept the
returning workers and instead filed a Motion
for Reconsideration of the Secretary’s
Order.
The then Acting Secretary of Labor Jose M.
Espaol, issued the disputed Order, which
modified the earlier one issued by Secretary
Trajano. Instead of an actual return to work,
Acting Secretary Espaol directed that the
strikers be reinstated only in the payroll. The
Union moved for the reconsideration of this
Order, but its motion was denied. Hence it
filed this petition.

ISSUE:
W/N CA GRIEVIOUSLY ERRED IN
RULING THAT THE SECRETARY OF
LABOR’S UNAUTHORIZED ORDER OF
MERE PAYROLL REINSTATEMENT IS
NOT GRAVE ABUSE OF DISCRETION
HELD:
Petition has merit.
CA based its decision on this Courts ruling
in University of Santo Tomas (UST) v.
NLRC. There, the Secretary assumed
jurisdiction over the labor dispute between
striking teachers and the university. He
ordered the striking teachers to return to
work and the university to accept them
under the same terms and conditions.
However, in a subsequent order, the NLRC
provided payroll reinstatement for the
striking teachers as an alternative remedy to
actual reinstatement. True, this Court held
therein that the NLRC did not commit grave
abuse of discretion in providing for the
alternative remedy of payroll reinstatement.
This Court found that it was merely an error
of judgment, which is not correctible by a
special civil action for certiorari. The NLRC
was only trying its best to work out a
satisfactory ad hoc solution to a festering
and serious problem.
However, this Court notes that
the UST ruling was made in the light of one
very important fact: the teachers could not
be given back their academic assignments
since the order of the Secretary for them to
return to work was given in the middle of the
first semester of the academic year. The
NLRC was, therefore, faced with a situation
where the striking teachers were entitled to
a return to work order, but the university
could not immediately reinstate them since
it would be impracticable and detrimental to
the students to change teachers at that
point in time.
In the present case, there is no showing that
the facts called for payroll reinstatement as
an alternative remedy. A strained
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relationship between the striking employees
and management is no reason for payroll
reinstatement in lieu of actual reinstatement.
This question is answered by the nature of
Article 263(g). As a general rule, the State
encourages an environment wherein
employers and employees themselves must
deal with their problems in a manner that
mutually suits them best. This is the basic
policy embodied in Article XIII, Section 3 of
the Constitution, which was further echoed
in Article 211 of the Labor Code. Hence, a
voluntary, instead of compulsory, mode of
dispute settlement is the general rule.
However, Article 263, paragraph (g) of the
Labor Code, which allows the Secretary of
Labor to assume jurisdiction over a labor
dispute involving an industry indispensable
to the national interest, provides an
exception:
(g) When, in his opinion, there exists a labor
dispute causing or likely to cause a strike or
lockout in an industry indispensable to the
national interest, the Secretary of Labor and
Employment may assume jurisdiction over
the dispute and decide it or certify the same
to the Commission for compulsory
arbitration. Such assumption or certification
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. x x x
This provision is viewed as an exercise of
the police power of the State. A prolonged
strike or lockout can be inimical to the
national economy and, therefore, the
situation is imbued with public necessity and
involves the right of the State and the public
to self-protection.

Under Article 263(g), all workers must
immediately return to work and all
employers must readmit all of them under
the same terms and conditions prevailing
before the strike or lockout. It is, therefore,
evident from the foregoing that the
Secretary’s subsequent order for mere
payroll reinstatement constitutes grave
abuse of discretion amounting to lack or
excess of jurisdiction.
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89_CASTRO
UNIVERSITY OF IMMACULATE,
CONCEPCION, INC., v. SECRETARY OF
LABOR G.R. No. 151379. January 14,
2005
FACTS:
The case stemmed from the collective
bargaining negotiations between petitioner
University of Immaculate Concepcion, Inc.
(UNIVERSITY) and respondent The UIC
Teaching and Non-Teaching Personnel and
Employees Union (UNION). The UNION, as
the certified bargaining agent of all rank and
file employees of the UNIVERSITY,
submitted its collective bargaining
proposals. However, the inclusion or
exclusion of the Secretaries, Registrars,
Accounting Personnel, and Guidance
Counselors in the scope of the bargaining
unit remained unresolved. When the case
was submitted for voluntary arbitration, the
panel of voluntary arbitrators rendered a
decision excluding the above-mentioned
secretaries, registrars, chief of the
accounting department, cashiers and
guidance counselors from the coverage of
the bargaining unit.
Pending the UNION’s Motion for
Reconsideration, it filed a notice of strike
with the NCMB on the grounds of
bargaining deadlock and unfair labor
practice. During the thirty (30) day cooling-
off period, two union members were
dismissed by petitioner. Consequently, the
UNION went on strike. The Secretary of
Labor then issued an Order assuming
jurisdiction over the labor dispute and
ordered all workers to return to work within
24 hours and for Management to accept
them back under the same terms and
conditions prevailing prior to the strike. The
panel of voluntary arbitrators denied the
motion for reconsideration filed by the
UNION. Thereafter, the UNIVERSITY gave
the individual respondents two choices: to
resign from the UNION and remain

employed as confidential employees or
resign from their confidential positions and
remain members of the UNION. The
UNIVERSITY said they could not remain as
confidential employees and at the same
time as members or officers of the Union.
However, the respondents remained in their
claim that they could still retain their
confidential positions while being members
or officers of the Union. Hence, the
UNIVERSITY sent notices of termination.
The UNION filed another notice of
strike due to the termination. The UNION
alleged that the UNIVERSITYs act of
terminating the individual respondents is in
violation of the Order of the Secretary of
Labor. The Secretary of Labor issued
another Order stating that the effects of the
termination from employment of these
individual respondents be suspended
pending the determination of the legality
thereof. Hence, the UNIVERSITY was
directed to reinstate the individual
respondents under the same terms and
conditions prevailing prior to the labor
dispute. The UNIVERSITY argued that the
Secretary’s Order directing the
reinstatement of the individual respondents
would render nugatory the decision of the
panel of voluntary arbitrators to exclude
them from the collective bargaining unit.
However, the Acting Secretary find that
superseding circumstances would not
warrant the physical reinstatement of the
twelve (12) terminated employees. Hence,
they are hereby ordered placed under
payroll reinstatement until the validity of
their termination is finally resolved.
ISSUE:
Whether or not the Secretary of Labor may
legally order the employer to reinstate the
terminated employees even if they are not
part of the bargaining unit.
RULING:
Yes. The Court recognizes the exercise
of management prerogatives and it often
declines to interfere with the legitimate
business decisions of the employer.
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However, this privilege is not absolute, but
subject to exceptions. One of these is when
the Secretary of Labor assumes jurisdiction
over labor disputes involving industries
indispensable to the national interest under
Article 263(g) of the Labor Code.
When the Secretary of Labor ordered
the UNIVERSITY to suspend the effect of
the termination of the individual
respondents, the Secretary did not exceed
her jurisdiction, nor did the Secretary
gravely abuse the same. The rationale for
the exercise of the Secretary of Labor and
Employments power under Article 263(g) of
the Labor Code is the maintenance and
upholding of the status quo while the
dispute is being adjudicated. Hence, the
directive to the parties to refrain from
performing acts that will exacerbate the
situation is intended to ensure that the
dispute does not get out of hand, thereby
negating the direct intervention of this office.
The University’s act of suspending and
terminating union members and the Unions
act of filing another Notice of Strike after this
Office has assumed jurisdiction are certainly
in conflict with the status quo ante. The act
of the UNIVERSITY of dismissing the
individual respondents from their
employment became the impetus for the
UNION to declare a second notice of strike.
Any act committed during the pendency of
the dispute that tends to give rise to further
contentious issues or increase the tensions
between the parties should be considered
an act of exacerbation and should not be
allowed. However, the final decision of the
panel of arbitrators as to the confidential
nature of the positions of the twelve private
respondents rendered actual and physical
reinstatement impracticable. The payroll
reinstatement in lieu of actual reinstatement
is proper.

90_DE LA ROSA-REID
PASINTABI: Mahaba po ang susunod na
kaso. Mahabang pasensya at patnubay ng
Maykapal ay kailangan.
NATIONAL UNION OF WORKERS VS
COURT OF APPEALS
FACTS: The Union is the certified
bargaining agent of the regular rank-and-file
employees of Dusit Hotel Nikko. On October
24, 2000, the Union submitted its Collective
Bargaining Agreement (CBA) negotiation
proposals to the Hotel. The parties failed to
arrive at mutually acceptable terms and
conditions. Due to the bargaining deadlock,
the Union, on December 20, 2001, filed a
Notice of Strike on the ground of the
bargaining deadlock. Conciliation was
proven to be unsuccessful. Consequently, a
Strike Vote was conducted by the Union on
January 14, 2002 on which it was decided
that the Union would wage a strike.
The Union held a general assembly at its
office located in the Hotels 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 hair style. The
Hotel prevented these workers from
entering the premises claiming that they
violated the Hotels Grooming Standards.
In view of the Hotels action, the Union
staged a picket outside the Hotel premises.
Later, other workers were also prevented
from entering the Hotel causing them to join
the picket. For this reason the Hotel
experienced a severe lack of manpower
which forced them to temporarily cease
operations in three restaurants.
The Hotel issued notices to Union
members, preventively suspending them
and charging them with the following
offenses: (1) violation of the duty to bargain
in good faith; (2) illegal picket; (3) unfair
labor practice; (4) violation of the Hotels
Grooming Standards; (5) illegal strike; and
(6) commission of illegal acts during the
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illegal strike. The Union filed with the NCMB
a second Notice of Strike on the ground of
unfair labor practice and violation of Article
248(a) of the Labor Code on illegal lockout.
On January 26, 2002, the Hotel
terminated the services of twenty-nine (29)
Union officers and sixty-one (61) members;
and suspended eighty-one (81) employees
for 30 days, forty-eight (48) employees for
15 days, four (4) employees for 10 days,
and three (3) employees for five days. On
the same day, the Union declared a strike.
Starting that day, the Union engaged in
picketing the premises of the Hotel. During
the picket, the Union officials and members
unlawfully blocked the ingress and egress of
the Hotel premises.
The Union filed its third Notice of
Strike with the NCMB on the ground of
unfair labor practice and union-busting. The
Secretary assumed jurisdiction over the
labor dispute and certified the case to the
NLRC for compulsory arbitration.
Pursuant to the Secretary’s Order, the
Hotel, issued an Inter-Office Memorandum,
directing some of the employees to return to
work, while advising others not to do so, as
they were placed under payroll
reinstatement. Meanwhile, after due
proceedings, the NLRC issued its Decision
ordering the Hotel and the Union to execute
a CBA within 30 days from the receipt of the
decision. The NLRC also held that the
January 18, 2002 concerted action was an
illegal strike in which illegal acts were
committed by the Union; 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. The NLRC ordered the Hotel to
grant the 61 dismissed Union members
financial assistance in the amount of
month’s pay for every year of service or
their retirement benefits under their
retirement plan whichever was higher. The
NLRC explained that the strike which
occurred on January 18, 2002 was illegal
because it failed to comply with the

mandatory 30-day cooling-off period and the
seven-day strike ban, as the strike occurred
only 29 days after the submission of the
notice of strike on December 20, 2001 and
only four days after the submission of the
strike vote on January 14, 2002. The NLRC
also ruled that even if the Union 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.
ISSUE: Whether or not the union is liable
for illegal strike
HELD: Yes. First, the Unions violation of the
Hotels Grooming Standards was clearly a
deliberate and concerted action to
undermine the authority of and to
embarrass the Hotel and was, therefore, not
a protected action. In view of the Unions
collaborative effort to violate the Hotels
Grooming Standards, it succeeded in
forcing the Hotel 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
the Hotel. This Court is of the opinion,
therefore, that the act of the Union was not
merely an expression of their grievance or
displeasure but, indeed, a calibrated and
calculated act designed to inflict serious
damage to the Hotels finances or its
reputation. Thus, we hold that the Unions
concerted violation of the Hotels Grooming
Standards which resulted in the temporary
cessation and disruption of the Hotels
operations is an unprotected act and should
be considered as an illegal strike.
Second, the Unions concerted action which
disrupted the Hotels operations clearly
violated the CBAs No Strike, No Lockout
provision.
Third, the Union officers and members
concerted action to shave their heads and
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crop their hair not only violated the Hotels
Grooming Standards but also violated the
Unions duty and responsibility to bargain in
good faith. By shaving their heads and
cropping their hair, the Union officers and
members violated then Section 6, Rule XIII
of the Implementing Rules of Book V of the
Labor Code.
Fourth, the Union failed to observe the
mandatory 30-day cooling-off period and the
seven-day strike ban before it conducted
the strike on January 18, 2002. The NLRC
correctly held that the Union failed to
observe the mandatory periods before
conducting or holding a strike. Records
reveal that the Union 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 the Union on January
18, 2002 which resulted in the disruption of
the Hotels operations clearly violated the
above-stated mandatory periods.
Last, the Union committed illegal acts in the
conduct of its strike. The NLRC ruled that
the strike was illegal since, as shown by the
pictures1[21] presented by the Hotel, the
Union officers and members formed human
barricades and obstructed the driveway of
the Hotel. There is no merit in the Unions
argument that it was not its members but
the Hotels 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 the Hotels driveway.

ISSUE: What then are the consequent
liabilities of the Union officers and members
for their participation in the illegal strike?
HELD: Regarding the Union officers and
members liabilities for their participation in
the illegal picket and strike, Art. 264(a),
paragraph 3 of the Labor Code provides
that [a]ny union officer who knowingly
participates in an illegal strike and any
worker or union officer who knowingly
participates in the commission of illegal acts
during a strike may be declared to have lost
his employment status x x x. The law makes
a distinction between union officers and
mere union members. Union officers may
be validly terminated from employment for
their participation in an illegal strike, while
union members have to participate in and
commit illegal acts for them to lose their
employment status. Thus, it is necessary for
the company to adduce proof of the
participation of the striking employees in the
commission of illegal acts during the strikes
Clearly, the 29 Union officers may
be dismissed pursuant to Art. 264(a), par. 3
of the Labor Code which imposes the
penalty of dismissal on any union officer
who knowingly participates in an illegal
strike. However, there is room for leniency
with respect to the Union members. It is
pertinent to note that the Hotel was able to
prove before the NLRC that the strikers
blocked the ingress to and egress from the
Hotel. But it is quite apparent that the Hotel
failed to specifically point out the
participation of each of the Union members
in the commission of illegal acts during the
picket and the strike. For this lapse in
judgment or diligence, we are constrained to
reinstate the 61 Union members.
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| Labor Relations-2A
91_QUESTIN
BASCON, et al. v. COURT OF
APPEALS, et al.
G.R. No. 144899 February 5, 2004
FACTS:
Bascon and Cole were employees of
Metro Cebu Community Hospital (MCCH),
and members of labor union NAMA-MCCH.
They held the positions of head nurse and
nursing aide, respectively.
NAMA-MCCH asked MCCH to
renew their CBA, but NFL (NAMA-MCCH’s
mother federation) opposed such move.
Believing that their union was the certified
collective bargaining agent, the members
and officers of NAMA-MCCH staged a
series of mass actions inside MCCH’s
premises. Meanwhile, DOLE issued two
certifications stating that NAMA-MCCH
was not a registered labor organization.
NAMA-MCCH still filed a notice of strike; but
the NCMB disregarded it.
Consequently, notices were
served on all union members, Bascon
and Cole included, asking them to explain
in writing why they were wearing red and
black ribbons and roaming around the
hospital with placards. In their collective
response, the employees, explained that
wearing armbands and putting up
placards was their answer to MCCH’s
illegal refusal to negotiate with NAMA-
MCCH.
Subsequently, MCCH sent two
notices to Bascon and Cove: first, that they
were to be investigated for their activities
in the mass actions; and second, an order
that they should desist from participating in
the mass actions with a warning. Bascon
and Cove, however, denied receiving said
notices. Bascon and Cole were then
served notices terminating their
employment.
 | Labor Relations-2A

Bascon and Cove, thus, filed a mantle of constitutional protection under

complaint for illegal dismissal against
MCCH. The LA found that they were justly
dismissed pursuant to their participation in
the mass actions. On appeal, the NLRC
reversed the LA, and found that Bascon and
Cove were illegally dismissed. On appeal to
the CA, the appellate court held that
Bascon and Cole were validly terminated
for their gross insubordination or willful
disobedience. Hence, this petition.
ISSUE: Were Bascon and Cove validly
dismissed for (1) allegedly participating in
an illegal strike and/or (2) gross
insubordination to the order to stop
wearing armbands and putting up
placards.
RULING:
NO.
As to the first ground, while a union
officer can be terminated for mere
participation in an illegal strike, an
ordinary striking employee, like
petitioners herein, must have participated
in the commission of illegal acts during
the strike (italics supplied). There must
be proof that they committed illegal acts
during the strike. But proof beyond
reasonable doubt is not required.
Substantial evidence, which may justify
the imposition of the penalty of
dismissal, may suffice.
freedom of speech.
As regards the appellate court’s
finding that petitioners were justly
terminated for gross insubordination or
willful disobedience, we find lacking the
element of willfulness characterized by a
perverse mental attitude on the part of
petitioners in disobeying their employer’s
order as to warrant the ultimate penalty
of dismissal. Wearing armbands and
putting up placards to express one’s
views without violating the rights of third
parties, are legal per se and even
constitutionally protected.
Finally, even if willful
disobedience may be properly
appreciated, still, the penalty of dismissal
is too harsh. Not every case of willful
disobedience by an employee of a
lawful work connected order of the
employer may be penalized with
dismissal. Wearing armbands to signify
union membership and putting up
placards to express their views cannot
be of such great dimension as to
warrant the extreme penalty of dismissal.

In this case, the CA found that

petitioners’ actual participation in the
illegal strike was limited to wearing
armbands and putting up placards. There
was no finding that the armbands or the
placards contained offensive words or
symbols. Thus, neither such wearing of
armbands nor said putting up of
placards can be construed as an illegal
act. In fact, per se, they are within the

131

92_DEL ROSARIO
JACKBILT INDUSTRIES INC. vs
JACKBILT EMPLOYEES WORKERS
UNION-NAFLU-KMU
GR No. 171618-19 March 20,
2009
FACTS:
Petitioner Jackbilt Industries (the
Company), due to the 1997 Asian Financial
Crisis, decided to temporarily stop its
business of producing concrete hollow
blocks, compelling most of its employees to
go on leave for six months. The Union
alleged that such act was motivated by anti-
union sentiments since the CBA was
expiring during the period of the shutdown;
hence, the Company is merely avoiding its
duty to bargain collectively. Accordingly, the
Union went on strike. Its officers and
members picketed petitioner’s main gates
and deliberately prevented persons and
vehicles from going into and out of the
compound.
As a response to the Company’s
petition for injunction NLRC issued a TRO
directing the respondents to refrain from
preventing access to petitioner’s property.
However respondent union violated the
order. Meanwhile, the Company dismissed
the concerned officers and members of the
Union for committing illegal acts in the
course of the strike. Hence, the Union filed
complaints for illegal lockout, runaway shop
and damages, unfair labor practice, illegal
dismissal and attorney’s fees and refusal to
bargain.
In a decision dated October 15,
1999, the labor arbiter dismissed the
complaints for illegal lockout and unfair
labor practice for lack of merit. However,
because petitioner did not file a petition to
declare the strike illegal before terminating
respondent’s officers and employees, it was
found guilty of illegal dismissal. NLRC
affirmed the decision of labor arbiter with
modification. In its defense, the Company
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| Labor Relations-2A
asserts that the filing of a petition to declare
the strike illegal was unnecessary since the
NLRC, in its July 17, 1998 decision, had
already found that respondent committed
illegal acts in the course of the strike.
ISSUE: Whether or not the filing of a
petition with the labor arbiter to declare a
strike illegal is a condition sine qua non for
the valid termination of employees who
commit an illegal act in the course of such
strike
HELD: No, filing a petition before
Labor Arbiter to declare a strike illegal is not
necessary for the valid termination of the
employees.
The principle of conclusiveness of
judgment, embodied in Section 47(c), Rule
39 of the Rules of Court, holds that the
parties to a case are bound by the findings
in a previous judgment with respect to
matters actually raised and adjudged
therein.
Article 264(e) of the Labor Code
prohibits any person engaged in picketing
from obstructing the free ingress to and
egress from the employer’s premises. Since
respondent was found in the July 17, 1998
decision of the NLRC to have prevented the
free entry into and exit of vehicles from
petitioner’s compound, respondent’s officers
and employees clearly committed illegal
acts in the course of the March 9, 1998
strike. Therefore, pursuant to the principle of
conclusiveness of judgment, the March 9,
1998 strike was ipso facto illegal. The filing
of a petition to declare the strike illegal was
thus unnecessary.
Consequently, we uphold the
legality of the dismissal of respondent’s
officers and employees. Article 264 of the
Labor Code further provides that an
employer may terminate employees found
to have committed illegal acts in the course
of a strike. Petitioner clearly had the legal
right to terminate respondents’ officers and
employees.
 | Labor Relations-2A

(a) PABX transfer and contractualization

of PABX service and position;
93_DIOLA
(b) Massive contractualization;

PHILCOM EMPLOYEES UNION VS (c) Flexible labor and additional

PHILIPPINE GLOBAL work/function;
COMMUNICATIONS and PHILCOM
CORPORATION (d) Disallowance of union leave
intended for union seminar;
G.R. No. 144315 July 17, 2006
(e) Misimplementation and/or non-
Carpio, J. implementation of employees' benefits
like shoe allowance, rainboots,
Doctrine: Unfair labor practice refers to raincoats, OIC shift allowance, P450.00
acts that violate the workers' right to monthly allowance, driving allowance,
organize. The prohibited acts are related motorcycle award and full-time
to the workers' right to self-organization physician;
and to the observance of a CBA.
Without that element, the acts, no (f) Non-payment, discrimination and/or
matter how unfair, are not unfair labor deprivation of overtime, restday work,
practices. waiting/stand by time and staff
meetings;

(g) Economic inducement by promotion

Facts: during CBA negotiation;

 The Collective Bargaining (h) Disinformation scheme, surveillance

Agreement (CBA) between and interference with union affairs;
petitioner Philcom Employees
Union and the respondent (i) Issuance of memorandum/notice to
Philcom Corporation expired. employees without giving copy to union,
o the parties started change in work schedule at Traffic
negotiations for the Records Section and ITTO policies; and
renewal of their CBA in
July 1997 (j) Inadequate transportation allowance,
o While negotiations were water and facilities."
ongoing, PEU filed a
Notice of Strike with the o The company, then,
National Conciliation and suspended the ongoing
Mediation Board (NCMB) CBA negotiation
– National Capital Region  Ground: bargaining
 Ground: perceived deadlock
unfair labor practice o The union went for another
committed by the strike
company

133
 | Labor Relations-2A

 At a conciliation conference held Held: 1.) The Strike was illegal having
at the NCMB-NCR office, the found that PEU's officers and members
parties agreed to consolidate the have committed illegal acts during the
two (2) Notices of Strike filed by strike.
the union and to maintain the 2.) Those acts [enumerated] do
status quo during the pendency not constitute unfair labor practices
of the proceedings under Article 248 of the Labor Code
o While the union and the Ratio:
company officers and 1.) On illegal strike:
representatives were  Philcom is engaged in a vital
meeting, the remaining industry (in this case, Philcom is
union officers and engaged with the communication
members staged a strike industry) protected by
at the company premises. Presidential Decree No. 823 (PD
 The company immediately filed a 823), as amended by Presidential
petition for the Secretary of Labor Decree No. 849, from strikes and
and Employment to assume lockouts.
jurisdiction over the labor dispute. o the striking employees
o Acting Labor Secretary violated the no-strike
Trajano: enjoining any policy of the State in
strike or lockout, whether regard to vital industries
threatened or actual,  The Secretary had already
directing the parties to assumed jurisdiction over the
cease and desist from dispute. Despite the issuance of
committing any act that the return-to-work orders dated
may exacerbate the 19 November and 28 November
situation/ 1997, the striking employees
 Secretary of Labor: The Union's failed to return to work and
Manifestation/Motion to Strike continued with their strike.
Out Portions of and Attachments o A return-to-work order is
in Philcom's Position Paper is immediately effective and
hereby denied for lack of merit. executory despite the filing
The Union's charges of unfair labor of a motion for
practice against the Company are reconsideration. It must be
hereby dismissed. strictly complied with even
 CA: Violations of CBAs, except during the pendency of
those gross in character, are any petition questioning its
mere grievances resolvable validity.
through the appropriate  PEU staged the strike in utter
grievance machinery or voluntary disregard of the grievance
arbitration as provided in the procedure established in the
CBAs CBA.
Issue/s: 1.) Was there an illegal strike? o A strike declared on the
2.) Was there unfair labor basis of grievances which
practice? have not been submitted
to the grievance

134
 | Labor Relations-2A

committee as stipulated in labor practice to contract

the CBA of the parties is out work for reason of
premature and illegal. reduction of labor cost
2.) On ULP: through the acquisition of
 Unfair labor practices of the automatic machines.
employer are enumerated in  On the union's charge that
Article 248 of the Labor Code management disallowed
(check your codal, please) leave of union officers and
 In this case, do not fall members to attend union
under any of the prohibited seminar: this is belied by
acts defined and the evidence submitted by
enumerated in Article 248 the union itself. In a letter
of the Labor Code. to PEU's President, the
 The issues of company granted the
misimplementation or non- leave of several union
implementation of officers and members to
employee benefits, non- attend a seminar
payment of overtime and notwithstanding that its
other monetary claims, request to be given more
inadequate transportation details about the affair was
allowance, water, and left unheeded by the
other facilities, are all a union. Those who were
matter of implementation denied leave were urgently
or interpretation of the needed for the operation
economic provisions of the of the company.
CBA between Philcom and
PEU subject to the
grievance procedure.
o The Union failed to convincingly
show that there is flagrant and/or
malicious refusal by the
Company to comply with the
economic provisions stipulated in
the CBA.
 Guys, here inexplain kung
bakit hindi ULP yung acts
nun employer. Medyo
madami sya kung i-
enumerate. Examples na
lang, hehe:
 On contractualization and
economic inducement: the
acts of said company
qualify as a valid exercise
of management
prerogative. It is not unfair

135
 | Labor Relations-2A

The grant of the employer of profit-

94_DIZON
WISE AND CO. INC vs. WISE & CO. INC
EMPLOYEES UNIION-NATU ETC.
G.R. No. L-87672 October 13, 1989
FACTS:
When the management introduced a
profit-sharing scheme for its managers and
supervisors, the union wrote the
management to ask that the union members
be allowed to participate in the profit-
sharing program. The management denied
the request on the ground that such
participation was not provided in the CBA.
Later, when the renegotiation of the
CBA was approaching, the management
wrote the union that it was willing to
consider including the union members in the
profit- sharing scheme if the negotiations
would be concluded before December 1987.
On March 30, 1988, the company
distributed the profit- sharing benefit not
only to managers and supervisors but also
to all rank-and-file employees not covered
by the CBA because they were excluded
from their agreed definition of bargaining
unit, such as the regular rand-and-file
employees in the office of the president,
vice president, security office, corporate
affairs office, accounting and treasury
department.
sharing benefits to the employees outside
the “bargaining unit” falls under the ambit of
its managerial prerogative. It appears to
have been done in good faith and without
ulterior motive. More so when as in this
case there is a clause in the CBA where the
employees are classified into those who are
members of the union and those who are
not. In the case of the union members, they
derive their benefits from the terms and
conditions of the CBA which constitutes the
law between the contracting parties. Both
the employer and the union members are
bound by such agreement.
However, the Court serves notice
that it will not hesitate to strike down any act
of the employer that tends to be
discriminatory against union members. It is
only because of the peculiar circumstances
of this case showing there is no such
intention that this court has ruled otherwise.

ISSUE:
W/N the grant by the management of profit-
sharing benefits to its employees who are
non-union members is discriminatory
against the union members which amounts
to ULP.

RULING:
No. There can be no discrimination
committed by the employer as the situation
of the union employees is different from the
non union employees. Discrimination per se
is not unlawful. There can be no
discrimination where employees concerned
are not similarly situated.

136

95_DOÑA
DABUET, ET AL. v. ROCHE
PHARMACEUTICALS, INC.
G.R. No. L-45402 April 30, 1987
Subject: ULP: Interference (Article 258[a])
FACTS:
The individual petitioners, who were
all officers of the Roche Products Labor
Union, wrote respondent company
expressing the grievances of the union and
seeking a formal conference with the
management regarding the previous
dismissal of the union’s president and vice-
president. At the meeting, the company’s
general manager, instead of discussing the
problems affecting the labor union and
management, allegedly berated the
petitioners for writing that letter and called
the letter and the person who prepared it
“stupid”.
Feeling that he was the one alluded
to, since he had prepared the letter, the
counsel for labor union filed a case for
grave slander against the general manager.
The charge was based on the affidavit
executed by the petitioners. The company
and the manager, in turn, filed a complaint
for perjury against petitioners alleging that
their affidavit contained false statements.
The respondent company,
furthermore, construed the execution by
petitioners of the affidavit as an act of
breach of trust and confidence and inimical
to the interest of the company, for which the
latter were suspended and later on
dismissed.
ISSUE: Whether respondent company is
guilty of unfair labor practice.
HELD:
Yes. The respondent company had
committed ULP practice in dismissing the
petitioners from employment without just
and valid cause.
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| Labor Relations-2A
In Republic Savings Bank vs. CIR,
where the dismissed employees had written
a letter decried by the bank as patently
libellous for alleging immorality, nepotism
and favouritism on the part of the bank
president, thus amounting to behaviour
necessitating their dismissal, the Court
declared the dismissal illegal as the letter
was a concerted activity protected by R.A.
875.
In the present case, the letter written
by and for the union addressed to the
management referred to employee
grievances and/ or labor management
issues and the employees concerned were
all officers of the union, then seeking a
renegotiation of the CBA, a fact which
respondent company does not deny, there
should, all the more, be a recognition of
such letter as an act for the mutual aid,
protection and benefit of the employees
concerned. This recognition in turn should
extend to petitioners’ execution of an
affidavit in support of the charge of slander
against private respondent, for calling the
union’s lawyer, who prepared the letter, and
the contents thereof as “stupid”.
Breach of trust and confidence, the
grounds alleged for petitioners’ dismissal
must not be indiscriminately used as a
shield to dismiss an employee arbitrarily.
Respondent company’s act in dismissing
the petitioners, who then constituted the
remaining and entire officialdom of the
Roche Products Labor Union, after the
union’s president and vice-president had
been earlier dismissed and when the CBA
in the company was about to be
renegotiated, was an ULP under Sec. 4(a)
(1) of the Industrial Peace Act. Their
dismissal, under the circumstances,
amounted to interference with, and
restraint or coercion of, the petitioners in
the exercise of their right to engage in
concerted activities for their mutual aid
and protection.

96_DUQUILLA
INSULAR LIFE ASSURANCE CO.
EMPLOYEES ASSOCIATION-NATU, et al.
vs. INSULAR LIFE ASSURANCE CO., et
G.R. No. L-25291 January 30, 1971
FACTS: Petitioner unions, represented by
lawyers Enaje and Garcia, entered into
separate CBAs with respondent companies.
The unions later on joined the National
Association of Trade Unions (NATU) and
the two lawyers were hired by the
companies. Thereafter, negotiations were
conducted on the unions’ proposals for a
modified renewal of their respective CBAs
but these were snagged by a deadlock on
the issue of union shop. Instead of making
any counter-proposal, the companies
insisted that the unions first drop their
demand for union security, promising
money benefits if this was done. Despite the
unions having conceded to the demand, the
companies still failed to make any counter-
proposal on the economic demands. Thus,
the unions voted to declare a strike in
protest. Meanwhile, 87 unionists were
reclassified as supervisors without increase
in salary nor in responsibility; thus, these
employees resigned from the unions. The
unions then went on strike and picketed the
offices. The companies sent a letter to each
of the strikers, promising certain benefits if
they came back to work voluntarily. The
unions, however, continued on strike,
prompting some management men to break
through the unions’ picket lines. Alleging
that some non-strikers were injured, the
companies filed criminal charges against
the strikers, with all but three dismissed by
the fiscal’s office, and a petition for
injunction with damages. Another letter was
sent individually to the strikers giving them
until a certain date to return to their jobs or
else be replaced. With such ultimatum and
the issuance of the writ of preliminary
injunction, the striking employees decided to
call off their strike and to report back to
work. However, before readmitting the
strikers, the companies required them to
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| Labor Relations-2A
secure clearances from the fiscal’s office
and to be screened by a management
committee, of which Enaje and Garcia were
members. When all the strikers had secured
clearance, the companies readmitted only
some and refused readmission to some
officials and members of the unions who
were most active in the strike, on the ground
that they committed acts inimical to the
interest of the companies. A complaint for
unfair labor practice was filed against the
companies.
ISSUE: Whether or not the companies are
guilty of unfair labor practice for (1)
interfering with the members of the Unions
in the exercise of their right to concerted
action, by sending out individual letters to
them urging them to abandon their strike
and return to work, with a promise of
comfortable cots, free coffee and movies,
and paid overtime, and, subsequently, by
warning them that if they did not return to
work, they might be replaced; and (2)
discriminating against the members of the
Unions as regards readmission to work after
the strike on the basis of their union
membership and degree of participation in
the strike.
HELD: YES. The Unions went on strike
because of the unfair labor practices
committed by the respondents, and that
when the strikers reported back for work —
upon the invitation of the respondents —
they were discriminatorily dismissed. The
members and officials of the Unions
therefore are entitled to reinstatement with
back pay. Discriminatorily dismissed
employees must receive back pay from the
date of the act of discrimination, that is, from
the date of their discharge.
(1) It is an unfair labor practice for an
employer operating under a collective
bargaining agreement to negotiate or to
attempt to negotiate with his employees
individually in connection with changes in
the agreement. The letters, directed to the
striking employees individually without being
coursed to the unions, is an active

interference with the right of collective
bargaining. Such practice tends to
undermine the concerted activity of the
employees. Indeed, when the respondents
offered reinstatement and attempted to
"bribe" the strikers with certain benefits, so
they would abandon the strike and return to
work, they were guilty of strikebreaking
and/or union-busting and, consequently, of
unfair labor practice. Moreover, applying the
“totality of conduct doctrine”2, the actuations
of the companies before and after the
issuance of the letters yield the clear
inference that the said letters formed of the
companies’ scheme to preclude if not
destroy unionism within them.
(2) The companies committed a clear act of
discrimination in the process of rehiring. The
respondents did not merely discriminate
against all the strikers in general. They
separated the active from the less active
unionists on the basis of their militancy, or
lack of it, on the picket lines. Unionists
belonging to the first category were refused
readmission even after they were able to
secure clearances from the competent
authorities with respect to the criminal
charges filed against them. There is an
unfair labor practice where the employer,
although authorized to dismiss the
employees who participated in an illegal
strike, dismissed only the leaders of the
strikers, such dismissal being evidence of
discrimination. Moreover, the mere act of
placing in the hands of the employees
hostile to the strikers the power of
reinstatement is a form of discrimination in
hiring. Equally significant is the fact that
while the management and the members of
the screening committee admitted the
discrimination committed against the
strikers, they tossed back and around to
each other the responsibility for the
discrimination.
2 The culpability of an employer's remarks were
to be evaluated not only on the basis of their
implicit implications, but were to be appraised
against the background of and in conjunction
with collateral circumstances.
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97_EISMA
SHELL OIL WORKERS’ UNION v. SHELL
CO. and COURT OF INDUSTRIAL
RELATIONS
G.R. No. L-28607. May 31, 1971
Non-compliance with collective bargaining
agreement constitutes unfair labor
practice. Belief in good faith that employer
committed unfair labor practice renders
strike legal.
FACTS:
Dispute arose when Shell transferred 18
security guards to its other department and
the consequent hiring of a private security
agency to undertake the work of said
security guards. Shell’s Union went on a
strike due to the insistence of Shell to
dissolve its security guard section in
Pandacan notwithstanding its continuance
assured by the existing collective bargaining
contract. While Shell insists that it a valid
exercise of its management prerogative and
such strike be declared illegal, Union claims
that the transfers and eventual dismissals
were illegal being in violation of the existing
contract. Union now claims to be reinstated
with full back wages.
Prior to the strike, it appears that a joint
consultation by the Union and management
was undertaken and at that time, no serious
opposition was noted with regard to the
move for dissolution. Complication started
when a CBA was executed containing the
usual grievance procedure and no strike
clauses and the inclusion of security guards
in the contract. Needless to say, a strike
was declared by the Union. Conciliation
efforts were unsuccessful. It was not until
the Presidential certification came and a
return to work order was issued by CIR, the
respondent Court. By virtue of which
pending its resolution, Shell was not to
lockout the employees involved and the
employees in turn were not to strike.
ISSUE: Whether the then existing collective
bargaining contract running for three years
 | Labor Relations-2A

constituted a bar to such a decision reached dissolution without thereby incurring a

by management. violation of the collective bargaining
agreement.
HELD: Yes.
Shell, in failing to manifest fealty to what
There was specific coverage concerning the was stipulated in an existing collective
security guard section in the collective bargaining contract, was thus guilty of an
bargaining contract. It is found not only in unfair labor practice.
the body but in the two appendices
concerning the wage schedules as well as
the premium pay and the night
compensation to which the personnel in
such section were entitled. It was thus an
assurance of security of tenure, at least,
during the lifetime of the agreement. It was
not right defense to say that the guards
would not be unemployed as they would be
transferred to another position with an
increase in pay and with a transfer bonus.
For what is involved is the integrity of the
agreement reached, the terms of which
should be binding of both parties.

What renders the stand of Shell even more

vulnerable is the fact that as set forth in its
brief and as found by respondent Court as
far back as 1964, it had already been
studying the matter of dissolving the
security guard section and contracting out
such service to an outside agency.
Apparently, it had reached a decision to that
effect for implementation the next year. In
July 1966, there was a joint consultation
between it and the Union on the matter.
Nonetheless on August 26, 1966, a
collective bargaining contract was entered
into which, as indicated above, did assure
the continued existence of the security
guard section. The Shell did not have to
agree to such a stipulation. Or it could have
reserved the right to effect a dissolution and
reassign the guards. It did not do so.
Instead, when it decided to take such a step
resulting in the strike, it would rely primarily
on provisions in the collective bargaining
contract couched in general terms, merely
declaratory of certain management
prerogatives. Considering the
circumstances of record, there can be no
justification then for Shell's insistence on
pushing through its project of such

140

98_FABON
COMPLEX ELECTRIC v. NLRC
G.R. No. 121315 July 19, 1999
FACTS:
Complex Electronics Corporation was
engaged in the manufacture of electronic
products. It was actually a subcontractor of
electronic products where its customers
gave their job orders, sent their own
materials and consigned their equipment to
it.
The rank and file workers of Complex were
organized into a union known as the
Complex Electronics Employees
Association (the Union).
Complex received a fax message from Lite-
On Philippines Electronics Co., requiring it
to lower its price by 10%. Complex informed
its Lite-On personnel that such request of
lowering their selling price by 10% was not
feasible as they were already incurring
losses at the present prices of their
products. Complex regretfully informed the
employees that it was left with no alternative
but to close down the operations of the Lite-
On Line.
Complex filed a notice of closure of the Lite-
On Line with the DOLE and the
retrenchment of the 97 affected employees.
The Union filed a notice of strike with the
NCMB.
Thereafter, the machinery, equipment and
materials being used for production at
Complex were pulled-out from the company
premises and transferred to the premises of
Ionics Circuit, Inc. (Ionics) at Laguna.
Fearful that the machinery, equipment and
materials would be rendered inoperative
and unproductive due to the impending
strike of the workers, the customers ordered
their pull-out and their transfer to Ionics.
Complex was compelled to cease
operations.
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| Labor Relations-2A
Ionics contended that it was an entity
separate and distinct from Complex and had
been in existence for 8 years before the
labor dispute arose at Complex. Like
Complex, it was also engaged in the semi-
conductor business where the machinery,
equipment and materials were consigned to
them by their customers.
The President of Complex was also the
President of Ionics. Ionics denied having
Qua as their owner since he had no
recorded subscription of P1,200,00.00 in
Ionics as claimed by the Union. Ionics
further argued that the hiring of some
displaced workers of Complex was an
exercise of management prerogatives.
Complaint was filed for unfair labor practice
and illegal closure/illegal lockout, among
others. The Union alleged that the pull-out
of the machinery, equipment and materials
from the company premises, which resulted
to the sudden closure of the company was
in violation of the Labor Code, and the
existing CBA.
ISSUE:
W/N there was unfair labor practice.
HELD:
NO.
A "runaway shop" is defined as an industrial
plant moved by its owners from one location
to another to escape union labor regulations
or state laws, but the term is also used to
describe a plant removed to a new location
in order to discriminate against employees
at the old plant because of their union
activities. It is one wherein the employer
moves its business to another location or it
temporarily closes its business for anti-
union purposes. It is motivated by anti-
union animus rather than for business
reasons.
Ionics was not set up merely for the purpose
of transferring the business of Complex. At
the time the labor dispute arose at Complex,

Ionics was already existing as an
independent company.
The Union failed to show that the primary
reason for the closure of the establishment
was due to the union activities of the
employees.
The mere fact that one or more corporations
are owned or controlled by the same or
single stockholder is not a sufficient ground
for disregarding separate corporate
personalities.
Closure, therefore, was not motivated by the
union activities of the employees, but rather
by necessity since it can no longer engage
in production without the much needed
materials, equipment and machinery.
The determination to cease operation is a
prerogative of management that is usually
not interfered with by the State as no
employer can be required to continue
operating at a loss simply to maintain the
workers in employment.
Personal liability of Lawrence Qua- absence
of malice or bad faith, a stockholder or an
officer of a corporation cannot be made
personally liable for corporate liabilities.
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99_FAJARDO
MALAYANG SAMAHAN NG MGA
MANGGAGAWA SA M. GREENFIELD
ET.AL
vs. HON. CRESENCIO RAMOS ET.AL
G.R. No. 113907 February 28, 2000
FACTS:
Malayang Samahan ng mga
Manggagawa sa M. Greenfield (MSMG), the
local union, is an affiliate of United Lumber
and General Workers of the Philippines
(ULGWP), the federation. In the CBA
between the company and the union, there
is a Union Security clause which requires
being a member of the union in good
standing (payment of union dues and non-
violation of union constitution and by-laws),
failure of which would result to termination
of employment of the erring employees or
member.
Subsequent issues lead to the
relationship between the local union and its
affiliate federation to turn bitter. This leads
to the expulsion of the union officers for
alleged acts of disloyalty and violation of
constitution and by-laws. The federation
then recommended to the employer the
termination of employment of these union
officers pursuant to the Union Security
Clause. The employer heed to the request
of the federation because of the Notice of
Strike filed by latter. The company
immediately send notice of dismissal to the
employees concerned and on the same day
physically and bodily brought them out of
the company premises, while some were
refused entrance thereto.
The local union then filed a case for
unfair labor practice against the employer
consisting of union busting, illegal dismissal,
illegal suspension, interference in union
activities, discrimination, threats,
intimidation, coercion, violence and
oppression.
ISSUE:
WON the company is guilty of unfair
labor practice in dismissing petitioner
employees merely upon the labor
 | Labor Relations-2A

federation’s demand for the enforcement of issue is an intra-union dispute is

the union security clause embodied in their erroneous. It is true that the issue of
CBA. expulsion of local union officers is
originally between the local union
HELD: and the federation, hence, intra-
The company is NOT guilty of unfair union in character, the issue was
labor practice however, the dismissal, later on converted into a termination
relying solely on the federation’s dispute when the company
recommendation, is rendered illegal. dismissed the petitioners from work
Union security clauses in collective without the benefit of a separate
bargaining agreements, if freely and notice and hearing.
voluntarily entered into, are valid and  The union officers were dismissed
binding. Dismissal of an employee by the because its acts intending to
company pursuant to a labor union’s disaffiliate from the federation. The
demand in accordance with a union security federation deemed it a violation of
agreement does not constitute unfair labor the constitution and by-laws. There
practice. But this dismissal is subject to the is no such provision prohibiting
requirement of due process, that is, notice disaffiliation, hence, the right to
and hearing prior to dismissal. This the exercise it must be upheld and must
company failed to comply. The dismissal is not be a ground for expulsion the in
done hastily and summarily eroding the the union.
employees’ right to due process, self-
organization and security of tenure.
The company terminated the
employees without conducting a separate
and independent investigation. It did not
inquire into the cause of the expulsion and
whether or not the federation had sufficient
grounds to effect the same. And even on
the assumption that the federation had valid
grounds to expel the union officers, due
process requires that these union officers
be accorded a separate hearing.
The right of an employee to be
informed of the charges against him and to
reasonable opportunity to present his side in
a controversy with either the company or his
own union is not wiped away by a union
security clause or a union shop clause in a
CBA. An employee is entitled to be
protected not only from a company which
disregards his rights but also from his own
union the leadership of which could yield to
the temptation of swift and arbitrary
expulsion from membership and mere
dismissal from his job.
Ancillary Issue:
 The Labor Arbiter’s declaration that
the recourse of the complainants
should be against the federation and
not against the employer since the

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 | Labor Relations-2A

100_ indication that she has no intention to

abandon her work with the hotel. Even the
NORMA MABEZA vs. NATIONAL LABOR employer knows that his purported reason
RELATIONS COMMISSION, PETER of dismissing her due to abandonment will
NG/HOTEL SUPREME not fly so he amended his reply to indicate
[G.R. No. 118506. April 18, 1997] that it is actually “loss of confidence” that led
to Mabeza’s dismissal.
Norma Mabeza was an employee hired by Loss of Confidence
Hotel Supreme in Baguio City. In 1991, an It is true that loss of confidence is a valid
inspection was made by the Department of ground to dismiss an employee. But this is
Labor and Employment (DOLE) at Hotel ideally only applied to workers whose
Supreme and the DOLE inspectors positions require a certain level or degree of
discovered several violations by the hotel trust particularly those who are members of
management. Immediately, the owner of the the managerial staff. Evidently, an ordinary
hotel, Peter Ng, directed his employees to chambermaid who has to sign out for linen
execute an affidavit which would purport and other hotel property from the property
that they have no complaints whatsoever custodian each day and who has to account
against Hotel Supreme. Mabeza signed the for each and every towel or bedsheet
affidavit but she refused to certify it with the utilized by the hotel’s guests at the end of
prosecutor’s office. Later, when she her shift would not fall under any of these
reported to work, she was not allowed to two classes of employees for which loss of
take her shift. She then asked for a leave confidence, if ably supported by evidence,
but was not granted yet she’s not being would normally apply. Further, the
allowed to work. In May 1991, she then suspicious filing by Peter Ng of a criminal
sued Peter Ng for illegal dismissal. Peter case against Mabeza long after she initiated
Ng, in his defense, said that Mabeza her labor complaint against him hardly
abandoned her work. In July 1991, Peter Ng warrants serious consideration of loss of
also filed a criminal complaint against confidence as a ground of Mabeza’s
Mabeza as he alleged that she had stolen a dismissal.
blanket and some other stuff from the hotel.
Peter Ng went on to amend his reply in the
labor case to make it appear that the reason
why he dismissed Mabeza was because of
his loss of confidence by reason of the theft
allegedly committed by Mabeza. The labor
arbiter who handled the case, a certain
Felipe Pati, ruled in favor of Peter Ng.
ISSUE: Whether or not there is
abandonment in the case at bar. Whether or
not loss of confidence as ground for
dismissal applies in the case at bar.
HELD: No. The side of Peter Ng is bereft of
merit so is the decision of the Labor Arbiter
which was unfortunately affirmed by the
NLRC.
Abandonment
Abandonment is not present. Mabeza
returned several times to inquire about the
status of her work or her employment
status. She even asked for a leave but was
not granted. Her asking for leave is a clear

144