G.R. No.

200499 OCTOBER 4, 2017

SAN FERNANDO COCA-COLA RANK-AND-FILE UNION (SACORU), represented by its President,
ALFREDO R. MARAÑON
vs.
COCA-COLA BOTTLERS PHILIPPINES, INC. (CCBPI)
FACTS The private respondent company, Coca-Cola Bottlers Philippines., Inc. ("CCBPI") issued notices of
termination to twenty seven (27) rank-and-file, regular employees and members of the San Fernando
Rank-and-File Union ("SACORU'), collectively referred to as "union members", on the ground of
redundancy due to the ceding out of two selling and distribution systems, the Conventional Route
System ("CRS') and Mini Bodega System ("MB") to the Market Execution Partners ("MEPS''), better
known as "Dealership System". The termination of employment was made effective, but the union
members were no longer required to report for work as they were put on leave of absence with pay until
the effectivity date of their termination. The union members were also granted individual separation
packages, which twenty-two (22) of them accepted, but under protest. Pending hearing of the certified
case, SACORU filed a motion for execution of the dispositive portion of the certification order praying
that the dismissal of the union members not be pushed through because it would violate the order of the
DOLE Secretary not to commit any act that would exacerbate the situation.

The NLRC dismissed the complaint for unfair labor practice and declared as valid the dismissal of the
employees due to redundancy. SACO RU filed a petition for certiorari under Rule 65 of the Rules of
Court before the CA. The CA, however, dismissed the petition and found that the NLRC did not commit
grave abuse of discretion.
ISSUE Whether CCBPI's implementation of the redundancy program was an unfair labor practice.
HELD CCBPI did not commit an unfair labor practice.

To prove the existence of unfair labor practice, substantial evidence has to be presented. Here, the
NLRC found that SACORU failed to provide the required substantial evidence, thus: The union's charge
of ULP against respondent company cannot be upheld. The union's mere allegation of ULP is not
evidence, it must be supported by substantial evidence.

Thus, the consequent dismissal of twenty seven (27) regular members of the complainant's union due
to redundancy is not per se an act of unfair labor practice amounting to union busting. For while, the
number of union membership was diminished due to the termination of herein union members, it cannot
safely be said that respondent company acted in bad faith in terminating their services because the
termination was not without a valid reason.

SACORU failed to proffer any proof that CCBPI acted in a malicious or arbitrarily manner in implementing
the redundancy program which· resulted in the dismissal of the 27 employees, and that CCBPI engaged
instead the services of independent contractors. As no credible, countervailing evidence had been put
forth by SACORU with which to challenge the validity of the redundancy program implemented by
CCBPI, the alleged unfair labor practice acts allegedly perpetrated against union members may not be
simply swallowed. SACORU was unable to prove its charge of unfair labor practice and support its
allegations that the termination of the union members was done with the end-in-view of weakening union
leadership and representation. There was no showing that the redundancy program was motivated by
ill will, bad faith or malice, or that it was conceived for the purpose of interfering with the employees' right
to self-organize.
 G.R. No. 214291 January 11, 2018
AMERICAN POWER CONVERSION CORPORATION; AMERICAN POWER CONVERSION SINGAPORE
PTE. LTD.; AMERICAN POWER CONVERSION (A.P.C.), B.V.; AMERICAN POWER CONVERSION (PHILS.)
B.V.; DAVID W. PLUMER, JR.; GEORGE KONG; and ALICIA HENDY
vs.
JAYSON YU LIM
FACTS Respondent Jason Yu Lim was hired to serve as the Country Manager of American Power Conversion
Philippine Sales Office, which was not registered with the Securities and Exchange Commission (SEC)
but whose function then was to act as a liaison office for American Power Conversion Corporation
(APCC) - an American corporation - and provide sales, marketing, and service support to the local
distributor and consumers of APCC in the Philippines. Since American Power Conversion Philippine
Sales Office was unregistered but doing business in the country, respondent was included in the list of
employees and payroll of APCPI. He was also instructed to create a petty cash fund using his own
personal bank account to answer for the day-to-day operations of American Power Conversion
Philippine Sales Office. Respondent was promoted as Regional Manager for APC North A.SEAN, a
division of APC ASEAN. As Regional Manager for APC North A.SEAN, he handled sales and marketing
operations for various countries, and reported directly to Larry Truong (Truong), Country General
Manager for the entire A.PC ASEAN and officer of APCC. Truong was not connected in any way with
APCP BV. Upon being apprised of the issues against him, Kong on September 8, 2005 sent three e-
mail messages to respondent and the other six members of the sales and marketing team indicating his
displeasure and that he took the matter quite personally. In the last of his e-mail messages, he remarked
- "'and finally, thank you for the knives in my back. Kong arrived in the country and met with respondent
where he informed the latter of a supposed company restructuring which rendered his position as
Regional Manager for North ASEAN redundant. Respondent was furnished by the Human Resource
Manager of APCP BV with a Termination Letter. Respondent filed a labor case against the petitioners
for illegal dismissal and recovery of money claims. The Labor Arbiter rendered a decision in favor of
Lim. The NLRC reversed the decision of the Labor Arbiter.
ISSUE Whether the respondent was illegally dismissed.
HELD The Court denies the Petition. It would seem that all of the petitioners are for all practical purposes
respondent's employers. He was selected and engaged by APCC. His salaries and benefits were paid
by APCP BV. And he is under the supervision and control of APCS and APC Japan. But of course, there
is no such thing in legitimate employment arrangements. This bizarre labor relation was made possible
and necessary only by the petitioners' common objective: to enable APCC to skirt the law. For all legal
purposes, APCC is respondent's employer. Therefore, this Court declares the subject redundancy
scheme a sham, the same being an integral part of petitioners' illegitimate scheme to defraud the public
- including respondent - and the State. It is null and void for being contrary to law and public policy as it
is in furtherance of an illegal scheme perpetrated by APCC with the aid of its co-petitioners. Quae ab
initio non valent, ex post facto convalescere non possunt. Things that are invalid from the beginning are
not made valid by a subsequent act. Since they all benefited from his services - APCC was able to grow
its business and conceal its sales operations and, by its misrepresentations and assurances that it would
register its operations, it successfully convinced respondent to do its bidding; APCP BV enjoyed the
immense goodwill of APCC for aiding the latter in its elaborate cover-up and duping respondent,
government, and the public into believing that it was respondent's actual employer; and APCS utilized
respondent as its workhorse even as he drew his salaries from APCP BV - and knowingly aided and
abetted each other in the commission of wrong, they should all be held responsible, under the principle
of quasi-contract, for respondent's money claims, including damages and attorney's fees. For all
purposes beneficial to respondent, all the petitioners should be considered as his employers since they
all benefited from his industry and used him in their elaborate scheme and to further their aim - evading
the regulatory processes of this country. And from a labor standpoint, they are al1 guilty of violating the
Labor Code as a result of their concerted acts of fraud and misrepresentation upon the respondent,
using him and placing him in a precarious position without risk to themselves, and thus deliberately
disregarding their fundamental obligation to afford protection to labor and insure the safety of their
employees. For this gross violation of the fundamental policy of the Labor Code, petitioners must be
held liable to pay backwages, damages, and attorney's fees.
 G.R. No. 191714 February 26, 2014
T & H SHOPFITTERS CORPORATION/GIN QUEEN CORPORATION, STINNES HUANG, BEN HUANG and
ROGELIO MADRIAGA
vs.
T & H SHOPFITTERS CORPORATION/GIN QUEEN WORKERS UNION (Interference)
FACTS The T&H Shopfitters Corporation/ Gin Queen Corporation workers union (THS-GQ Union) filed their
Complaint for Unfair Labor Practice (ULP) by way of union busting, and Illegal Lockout against T&H
Shopfitters Corporation (T&H Shopfitters) and Gin Queen Corporation (Gin Queen). Respondents and
other employees of petitioners held their first formal meeting to discuss the formation of a union. The
following day, seventeen (17) employees were barred from entering petitioners’ factory premises and
ordered to transfer to T&H Shopfitters’ warehouse at Subic Bay Freeport Zone purportedly because of
its expansion. Afterwards, the said seventeen (17) employees were repeatedly ordered to go on forced
leave due to the unavailability of work. Subsequently, a COR was issued to the union. An agreement
between petitioners and THS-GQ Union was reached. Petitioners agreed to give priority to regular
employees in the distribution of work assignments. Respondents averred, however, that petitioners
never complied with its commitment but instead hired contractual workers. Later, due to the expiration
of the lease contract between Gin Queen and its lessor, the said union officers and members were made
to work as grass cutters in Cabangan, to which the site was relocated. Due to these circumstances, the
employees assigned in Cabangan did not report for work. As a consequence, the THS-GQ Union
president was made to explain why he should not be terminated for insubordination. The other
employees who likewise failed to report in Cabangan were meted out with suspension. n its defense,
Gin Queen, claiming that it is a corporation separate and distinct from T&H Shopfitters, stressed that
respondents were all employees. Gin Queen claimed that due to the decrease in orders from its
customers, they had to resort to cost cutting measures to avoid anticipated financial losses. Thus, it
assigned work on a rotational basis. It was of the impression that the employees, who opposed its
economic measures, were merely motivated by spite in filing the complaint for ULP against it.

LA: Dismissed respondents’ complaint and all money claims for lack of merit.
NLRC: Reversed the decision of the LA and ruled in favor of the union.
ISSUE Whether the petitioners committed unfair labor practice against respondents.
HELD As to the issue of ULP, petitioners’ argument is utterly without merit. In essence, ULP relates to the
commission of acts that transgress the workers’ right to organize. As specified in Articles 248 [now Article
257] and 249 [now Article 258] of the Labor Code, the prohibited acts must necessarily relate to the
workers' right to self-organization. the various acts of petitioners, taken together, reasonably support an
inference that, indeed, such were all orchestrated to restrict respondents’ free exercise of their right to
self-organization. Not content with achieving a "no union" vote in the certification election, petitioners
launched a vindictive campaign against union members by assigning work on a rotational basis while
subcontractors performed the latter’s functions regularly. Worse, some of the respondents were made
to work as grass cutters in an effort to dissuade them from further collective action. Again, this cannot
be countenanced.

The concept of ULP is embodied in Article 256 (formerly Article 247) of the Labor Code,14 which
provides:

Article 256. Concept of unfair labor practice and procedure for prosecution thereof.––Unfair labor
practices violate the constitutional right of workers and employees to self-organization, are inimical to
the legitimate interests of both labor and management, including their right to bargain collectively and
otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt industrial peace
and hinder the promotion of healthy and stable labor-management relations.
 G.R. No. 114974 June 16, 2004
STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE)
vs.
The Honorable MA. NIEVES R. CONFESOR, in her capacity as SECRETARY OF LABOR AND
EMPLOYMENT; and the STANDARD CHARTERED BANK
(Totality of Conduct; Blue-Sky Bargaining; Surface Bargaining)
FACTS Standard Chartered Bank is a foreign banking corporation doing business in the Philippines. The
exclusive bargaining agent of the rank-and-file employees of the Bank is the Standard Chartered Bank
Employees Union. The Bank and the Union signed a five-year collective bargaining agreement (CBA)
with a provision to renegotiate the terms thereof on the third year. Prior to the expiration of the three-
year period but within the sixty-day freedom period, the Union initiated the negotiations. The Union,
through its President, Eddie L. Divinagracia, sent a letter containing its proposals covering political
provisions and thirty-four (34) economic provisions. Included therein was a list of the names of the
members of the Union’s negotiating panel. The Bank attached its counter-proposal to the non-economic
provisions proposed by the Union. The Bank posited that it would be in a better position to present its
counter-proposals on the economic items after the Union had presented its justifications for the
economic proposals. The Bank, likewise, listed the members of its negotiating panel. The parties agreed
to set meetings to settle their differences on the proposed CBA.

The Bank filed a complaint for Unfair Labor Practice before the NLRC against the Union. The Bank
alleged that the Union violated its duty to bargain, as it did not bargain in good faith. It contended that
the Union demanded "sky high economic demands," indicative of blue-sky bargaining. Further, the Union
violated its no strike- no lockout clause by filing a notice of strike before the NCMB. Considering that the
filing of notice of strike was an illegal act, the Union officers should be dismissed. The SOLE dismissed
the charges of ULP of both the Union and the Bank, explaining that both parties failed to substantiate
their claims.
ISSUE Whether or not the Union was able to substantiate its claim of unfair labor practice against the Bank
arising from the latter’s alleged "interference" with its choice of negotiator; surface bargaining; making
bad faith non-economic proposals; and refusal to furnish the Union with copies of the relevant data.
HELD The circumstances that occurred during the negotiation do not show that the suggestion made by Diokno
to Divinagracia is an anti-union conduct from which it can be inferred that the Bank consciously adopted
such act to yield adverse effects on the free exercise of the right to self-organization and collective
bargaining of the employees, especially considering that such was undertaken previous to the
commencement of the negotiation and simultaneously with Divinagracia’s suggestion that the bank
lawyers be excluded from its negotiating panel.

The records show that after the initiation of the collective bargaining process, with the inclusion of Umali
in the Union’s negotiating panel, the negotiations pushed through. The complaint was made only on
August 16, 1993 after a deadlock was declared by the Union on June 15, 1993. It is clear that such ULP
charge was merely an afterthought. The accusation occurred after the arguments and differences over
the economic provisions became heated and the parties had become frustrated. It happened after the
parties started to involve personalities. As the public respondent noted, passions may rise, and as a
result, suggestions given under less adversarial situations may be colored with unintended meanings.49
Such is what appears to have happened in this case.

In view of the finding of lack of ULP based on Article 248(g), the accusation that the Bank made bad-
faith provisions has no leg to stand on. The records show that the Bank’s counterproposals on the non-
economic provisions or political provisions did not put "up for grabs" the entire work of the Union and its
predecessors. As can be gleaned from the Bank’s counterproposal, there were many provisions which
it proposed to be retained. The revisions on the other provisions were made after the parties had come
to an agreement. Far from buttressing the Union’s claim that the Bank made bad-faith proposals on the
non-economic provisions, all these, on the contrary, disprove such allegations. We, likewise, find that
the Union failed to substantiate its claim that the Bank refused to furnish the information it needed.
The Duty to Bargain Collectively

Surface bargaining is defined as "going through the motions of negotiating" without any legal intent to
reach an agreement.50 The resolution of surface bargaining allegations never presents an easy issue.
The determination of whether a party has engaged in unlawful surface bargaining is usually a difficult
one because it involves, at bottom, a question of the intent of the party in question, and usually such
intent can only be inferred from the totality of the challenged party’s conduct both at and away from the
bargaining table.51 It involves the question of whether an employer’s conduct demonstrates an
unwillingness to bargain in good faith or is merely hard bargaining.52

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

The Union has not been able to show that the Bank had done acts, both at and away from the bargaining
table, which tend to show that it did not want to reach an agreement with the Union or to settle the
differences between it and the Union. Admittedly, the parties were not able to agree and reached a
deadlock. However, it is herein emphasized that the duty to bargain "does not compel either party to
agree to a proposal or require the making of a concession."53 Hence, the parties’ failure to agree did
not amount to ULP under Article 248(g) for violation of the duty to bargain.

The Union Did Not Engage In Blue-Sky Bargaining

We, likewise, do not agree that the Union is guilty of ULP for engaging in blue-sky bargaining or making
exaggerated or unreasonable proposals.59 The Bank failed to show that the economic demands made
by the Union were exaggerated or unreasonable. The minutes of the meeting show that the Union based
its economic proposals on data of rank and file employees and the prevailing economic benefits received
by bank employees from other foreign banks doing business in the Philippines and other branches of
the Bank in the Asian region.

In sum, we find that the public respondent did not act with grave abuse of discretion amounting to lack
or excess of jurisdiction when it issued the questioned order and resolutions. While the approval of the
CBA and the release of the signing bonus did not estop the Union from pursuing its claims of ULP
against the Bank, we find the latter did not engage in ULP. We, likewise, hold that the Union is not guilty
of ULP.
 G.R. No. 155207 August 13, 2008
WILHELMINA S. OROZCO
vs.
THE FIFTH DIVISION OF THE HONORABLE COURT OF APPEALS, PHILIPPINE DAILY INQUIRER, and
LETICIA JIMENEZ MAGSANOC
(Restraint and Coercion)
FACTS PDI engaged the services of petitioner to write a weekly column for its Lifestyle section. She religiously
submitted her articles every week, except for a six-month stint in New York City when she, nonetheless,
sent several articles through mail. She received compensation of P250.00 – later increased to P300.00
– for every column published. petitioner’s column appeared in the PDI for the last time. Petitioner claims
that her then editor, Ms. Lita T. Logarta, told her that respondent Leticia Jimenez Magsanoc, PDI Editor
in Chief, wanted to stop publishing her column for no reason at all and advised petitioner to talk to
Magsanoc herself. Petitioner narrates that when she talked to Magsanoc, the latter informed her that it
was PDI Chairperson Eugenia Apostol who had asked to stop publication of her column, but that in a
telephone conversation with Apostol, the latter said that Magsanoc informed her (Apostol) that the
Lifestyle section already had many columnists. PDI claims that in June 1991, Magsanoc met with the
Lifestyle section editor to discuss how to improve said section. They agreed to cut down the number of
columnists by keeping only those whose columns were well-written, with regular feedback and following.
In their judgment, petitioner’s column failed to improve, continued to be superficially and poorly written,
and failed to meet the high standards of the newspaper. Hence, they decided to terminate petitioner’s
column.

Aggrieved by the newspaper’s action, petitioner filed a complaint for illegal dismissal, backwages, moral
and exemplary damages, and other money claims before the NLRC. The Labor Arbiter found that
complainant was helplessly constrained to adopt her subjects and style of writing to suit the editorial
taste of her editor. Otherwise, off to the trash can went her articles. Respondent company exercised full
and complete control over the means and method by which complainant’s work – that of a regular
columnist – had to be accomplished. This control might not be found in an instruction, verbal or oral,
given to complainant defining the means and method she should write her column. Rather, this control
is manifested and curtained in respondents’ admitted prerogative to reject any article submitted by
complainant for publication.
ISSUE Whether petitioner is an employee of PDI, and if the answer be in the affirmative, whether she was
illegally dismissed.
HELD This Court has constantly adhered to the "four-fold test" to determine whether there exists an employer-
employee relationship between parties. The four elements of an employment relationship are: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and
(d) the employer’s power to control the employee’s conduct. Of these four elements, it is the power of
control which is the most crucial and most determinative factor, so important, in fact, that the other
elements may even be disregarded.

It should, however, be obvious that not every form of control that the hiring party reserves to himself
over the conduct of the party hired in relation to the services rendered may be accorded the effect of
establishing an employer-employee relationship between them in the legal or technical sense of the
term. A line must be drawn somewhere, if the recognized distinction between an employee and an
individual contractor is not to vanish altogether. Realistically, it would be a rare contract of service that
gives untrammelled freedom to the party hired and eschews any intervention whatsoever in his
performance of the engagement.

Aside from the control test, this Court has also used the economic reality test. The economic realities
prevailing within the activity or between the parties are examined, taking into consideration the totality
of circumstances surrounding the true nature of the relationship between the parties.37 This is especially
appropriate when, as in this case, there is no written agreement or contract on which to base the
relationship. In our jurisdiction, the benchmark of economic reality in analyzing possible employment
relationships for purposes of applying the Labor Code ought to be the economic dependence of the
worker on his employer.
 G.R. No. 211145 October 14, 2015
SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD rep. by its President, ALFIE ALIPIO
vs.
BUREAU OF LABOR RELATIONS, HANJIN HEAVY INDUSTRIES AND CONSTRUCTION CO., LTD. (HHIC-
PIDL.)
(Captive/ Company Unionism)
FACTS Samahan, through its authorized representative, Alfie F. Alipio, filed an application for registration 5 of
its name "Samahan ng Mga Manggagawa sa Hanjin Shipyard" with the DOLE. Attached to the
application were the list of names of the association's officers and members, signatures of the attendees
of the meeting, copies of their Constitution and By-laws. The application stated that the association had
a total of 120 members. Respondent filed a petition with DOLE-Pampanga praying for the cancellation
of registration of Samahan' s association on the ground that its members did not fall under any of the
types of workers enumerated in the second sentence of Article 243. Hanjin opined that only ambulant,
intermittent, itinerant, rural workers, self-employed, and those without definite employers may form a
workers' association. It further posited that one third (1/3) of the members of the association had definite
employers and the continued existence and registration of the association would prejudice the
company's goodwill. DOLE-Pampanga called for a conference, wherein Samahan requested for a 10-
day period to file a responsive pleading. No pleading, however, was submitted. Instead, Samahan filed
a motion to dismiss.
ISSUE Whether the CA seriously erred in finding that petitioners cannot form a workers' association of
employees and instead should have formed a union, hence their registration as a workers' association
should be cancelled.
HELD In the case at bench, the Court cannot sanction the opinion of the CA that Samahan should have formed
a union for purposes of collective bargaining instead of a workers' association because the choice
belonged to it. The right to form or join a labor organization necessarily includes the right to refuse or
refrain from exercising the 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.53 Also
inherent in the right to self-organization is the right to choose whether to form a union for purposes of
collective bargaining or a workers' association for purposes of providing mutual aid and protection.

The right to self-organization, however, is subject to certain limitations as provided by law. For instance,
the Labor Code specifically disallows managerial employees from joining, assisting or forming any labor
union. Meanwhile, supervisory employees, while eligible for membership in labor organizations, are
proscribed from joining the collective bargaining unit of the rank-and-file employees. Even government
employees have the right to self-organization. It is not, however, regarded as existing or available for
purposes of collective bargaining, but simply for the furtherance and protection of their interests.55

Hanjin posits that the members of Samahan have definite employers, hence, they should have formed
a union instead of a workers' association. The Court disagrees. There is no provision in the Labor Code
that states that employees with definite employers may form, join or assist unions only. The Court cannot
subscribe either to Hanjin's position that Samahan's members cannot form the association because they
are not covered by the second sentence of Article 243.

Clearly, there is nothing in the foregoing implementing rules which provides that workers, with definite
employers, cannot form or join a workers' association for mutual aid and protection. Section 2 thereof
even broadens the coverage of workers who can form or join a workers' association. Thus, the Court
agrees with Samahan's argument that the right to form a workers' association is not exclusive to
ambulant, intermittent and itinerant workers. The option to form or join a union or a workers' association
lies with the workers themselves, and whether they have definite employers or not.
 G.R. No. 201595 January 25, 2016
ALLAN M. MENDOZA vs. OFFICERS OF MANILA WATER EMPLOYEES UNION (MWEU)
(Acts of Discrimination)
FACTS Petitioner was a member of the Manila Water Employees Union (MWEU), a Department of Labor and
Employment (DOLE)-registered labor organization consisting of rank-and-file employees within Manila
Water Company (MWC). MWEU through Cometa informed petitioner that the union was unable to fully
deduct the increased P200.00 union dues from his salary due to lack of the required check-off
authorization from him. Petitioner was warned that his failure to pay the union dues would result in
sanctions upon him. Quebral informed Borela, through a letter, that for such failure to pay the union
dues, petitioner and several others violated Section 1(g), Article IX of the MWEU’s Constitution and By-
Laws. In turn, Borela referred the charge to the MWEU grievance committee for investigation. A notice
of hearing was sent to petitioner, who attended the scheduled hearing. The MWEU grievance committee
recommended that petitioner be suspended for 30 days. Borela informed petitioner and his
correspondents of the MWEU Executive Board’s "unanimous approval" of the grievance committee’s
recommendation. In 2008, during the freedom period and negotiations for a new collective bargaining
agreement (CBA) with MWC, petitioner joined another union, the Workers Association for Transparency,
Empowerment and Reform, All-Filipino Workers Confederation (WATER-AFWC). He was elected union
President. Other MWEU members were inclined to join WATER-AFWC, but MWEU director Torres
threatened that they would not get benefits from the new CBA.

Petitioner accused the respondents of illegal termination from MWEU in connection with the events
relative to his non-payment of union dues; unlawful interference, coercion, and violation of the rights of
MWC employees to self-organization – in connection with the proposed CBA submitted by MWEU
leadership, which petitioner claims contained provisions that discriminated against non-MWEU
members. Respondents claimed that the Labor Arbiter had no jurisdiction over the dispute, which is
intra-union in nature; that the BLR was the proper venue, in accordance with Article 226 of the Labor
Code and Section 1, Rule XI of Department Order 40-03, series of 2003, of the DOLE; and that they
were not guilty of unfair labor practices, discrimination, coercion or restraint.
ISSUE Whether the CA erred in declaring that the threats made by a union officer against members of a rival
union is merely an "interference" and do not amount to "restraint" or "coercion".
HELD ART. 249. Unfair labor practices of labor organizations. - It shall be unfair labor practice for a labor
organization, its officers, agents or representatives: (b) To cause or attempt to cause an employer to
discriminate against an employee, including discrimination against an employee with respect to whom
membership in such organization has been denied or to terminate an employee on any ground other
than the usual terms and conditions under which membership or continuation of membership is made
available to other members.

Because respondents did not act on his two appeals, petitioner was unceremoniously suspended,
disqualified and deprived of his right to run for the position of MWEU Vice-President in the September
14, 2007 election of officers, expelled from MWEU, and forced to join another union, WATER-AFWC.
For these, respondents are guilty of unfair labor practices under Article 249 (a) and (b) – that is, violation
of petitioner’s right to self-organization, unlawful discrimination, and illegal termination of his union
membership – which case falls within the original and exclusive jurisdiction of the Labor Arbiters, in
accordance with Article 217 of the Labor Code.

As members of the governing board of MWEU, respondents are presumed to know, observe, and apply
the union’s constitution and by-laws. Thus, their repeated violations thereof and their disregard of
petitioner’s rights as a union member – their inaction on his two appeals which resulted in his
suspension, disqualification from running as MWEU officer, and subsequent expulsion without being
accorded the full benefits of due process – connote willfulness and bad faith, a gross disregard of his
rights thus causing untold suffering, oppression and, ultimately, ostracism from MWEU. "Bad faith
implies breach of faith and willful failure to respond to plain and well understood obligation.
 G.R. No. 121315 July 19, 1999
COMPLEX ELECTRONICS EMPLOYEES ASSOCIATION (CEEA)
vs.
THE NATIONAL LABOR RELATIONS COMMISSION, COMPLEX ELECTRONICS CORPORATION, IONICS
CIRCUIT, INC., et. al.
(Runaway shop)
FACTS Complex Electronics Corporation (Complex) 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 customers were foreign-based companies with
different product lines and specifications requiring the employment of workers with specific skills for each
product line. Thus, there was the AMS Line for the Adaptive Micro System, Inc., the Heril Line for Heril
Co., Ltd., the Lite-On Line for the Lite-On Philippines Electronics Co., etc. The rank-and-file workers of
Complex were organized into a union known as the Complex Electronics Employees Association, herein
referred to as the Union. 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. Under such circumstances, 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 ninety-seven (97) affected employees. The
Union filed a notice of strike with the NCMB. 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 Section 3 and 8, Rule XIII, Book V of the Labor Code of the Philippines and
the existing CBA.

LA: Rendered a decision in favor of the Union.

ISSUE Whether NLRC erred in finding that Complex Electronics Corporation was not guilty of illegal closure
and illegal dismissal of the petitioners.
HELD The Court, likewise, disagrees with the Union that there was in this case an illegal lockout/illegal
dismissal. In the present case, there was a complete cessation of the business operations at Complex
not because of the labor dispute. It should be recalled that, before the labor dispute, Complex had
already informed the employees that they would be closing the Lite-On Line. The employees, however,
demanded for a separation pay equivalent to one (1) month salary for every year of service which
Complex refused to give. When Complex filed a notice of closure of its Lite-On Line, the employees filed
a notice of strike which greatly alarmed the customers of Complex and this led to the pull-out of their
equipment, machinery and materials from Complex. Thus, without the much-needed equipment,
Complex was unable to continue its business. It was left with no other choice except to shut down the
entire business. The 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 closure of operation by Complex on April 7, 1992 was not without valid reasons. Customers of
respondent alarmed by the pending labor dispute and the imminent strike to be foisted by the union, as
shown by their strike vote, directed respondent Complex to pull-out its equipment, machinery and
materials to other safe bonded warehouse. Respondent being mere consignees of the equipment,
machinery and materials were without any recourse but to oblige the customers' directive. The pull-out
was effected on April 6, 1992. We can see here that Complex's action, standing alone, will not result in
illegal closure that would cause the illegal dismissal of the complainant workers. Hence, the Labor
Arbiter's conclusion that since there were only two (2) of respondent's customers who have expressed
pull-out of business from respondent Complex while most of the customer's have not and, therefore, it
is not justified to close operation cannot be upheld. 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. That would be taking of property
without due process of law which the employer has the right to resist.
 G.R. Nos. 158930-31 March 3, 2008
UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED INDUSTRIES UNIONS - KILUSANG MAYO
UNO (UFE-DFA-KMU)
vs.
NESTLÉ PHILIPPINES, INCORPORATED
(Surface Bargaining)
FACTS UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file employees of Nestlé.
As the existing CBA between Nestlé and UFE-DFA-KMU was to end, the Presidents of the Alabang and
Cabuyao Divisions of UFE-DFA-KMU informed Nestlé of their intent to "open new Collective Bargaining
Negotiation for the year 2001-2004." In response thereto, Nestlé informed them that it was also preparing
its own counter-proposal and proposed ground rules to govern the impending conduct of the CBA
negotiations. However, Nestlé requested9 the National Conciliation and Mediation Board (NCMB),
Regional Office No. IV, Imus, Cavite, to conduct preventive mediation proceedings between it and UFE-
DFA-KMU owing to an alleged impasse in said dialogue; i.e., that despite fifteen (15) meetings between
them, the parties failed to reach any agreement on the proposed CBA. Conciliation proceedings proved
ineffective, though, and the UFE-DFA-KMU filed a Notice of Strike with the NCMB, complaining, in
essence, of a bargaining deadlock pertaining to economic issues, i.e., "retirement (plan), panel
composition, costs and attendance, and CBA". Another Notice of Strike was filed by the union, this time
predicated on Nestlé’s alleged unfair labor practices, that is, bargaining in bad faith by setting pre-
conditions in the ground rules and/or refusing to include the issue of the Retirement Plan in the CBA
negotiations. The result of a strike vote conducted by the members of UFE-DFA-KMU yielded an
overwhelming approval of the decision to hold a strike. Nestlé and UFE-DFA-KMU filed their respective
position papers. Nestlé addressed several issues concerning economic provisions of the CBA as well
as the non-inclusion of the issue of the Retirement Plan in the collective bargaining negotiations. On the
other hand, UFE-DFA-KMU limited itself to the issue of whether or not the retirement plan was a
mandatory subject in its CBA negotiations.
ISSUE Whether a party has met his statutory duty to bargain in good faith typically turns on the facts of the
individual case.
HELD Herein, the union merely bases its claim of refusal to bargain on a letter28 dated 29 May 2001 written
by Nestlé where the latter laid down its position that "unilateral grants, one-time company grants,
company-initiated policies and programs, which include, but are not limited to the Retirement Plan,
Incidental Straight Duty Pay and Calling Pay Premium, are by their very nature not proper subjects of
CBA negotiations and therefore shall be excluded therefrom." But as we have stated in this Court’s
Decision, said letter is not tantamount to refusal to bargain. In thinking to exclude the issue of Retirement
Plan from the CBA negotiations, Nestlé, cannot be faulted for considering the same benefit as
unilaterally granted, considering that eight out of nine bargaining units have allegedly agreed to treat the
Retirement Plan as a unilaterally granted benefit. This is not a case where the employer exhibited an
indifferent attitude towards collective bargaining, because the negotiations were not the unilateral activity
of the bargaining representative. Nestlé’s desire to settle the dispute and proceed with the negotiation
being evident in its cry for compulsory arbitration is proof enough of its exertion of reasonable effort at
good-faith bargaining.

In the case at bar, Nestle never refused to bargain collectively with UFE-DFA-KMU. The corporation
simply wanted to exclude the Retirement Plan from the issues to be taken up during CBA negotiations,
on the postulation that such was in the nature of a unilaterally granted benefit. An employer’s steadfast
insistence to exclude a particular substantive provision is no different from a bargaining representative’s
perseverance to include one that they deem of absolute necessity. Indeed, an adamant insistence on a
bargaining position to the point where the negotiations reach an impasse does not establish bad
faith.[fn24 p.10] It is but natural that at negotiations, management and labor adopt positions or make
demands and offer proposals and counter-proposals. On account of the importance of the economic
issue proposed by UFE-DFA-KMU, Nestle could have refused to bargain with the former – but it did not.
And the management’s firm stand against the issue of the Retirement Plan did not mean that it was
bargaining in bad faith. It had a right to insist on its position to the point of stalemate.
 G.R. No. 204693 July 13, 2016
GUAGUA NATIONAL COLLEGES
vs.
GUAGUA NATIONAL COLLEGES FACULTY LABOR UNION AND GUAGUA NATIONAL COLLEGES NON-
TEACHING AND MAINTENANCE LABOR UNION
(Gross violations of the CBA)
FACTS GNC is an educational institution located in Sta. Filomena, Guagua, Pampanga. On the other hand,
respondents Guagua National Colleges Faculty Labor Union (GNCFLU) and Guagua National Colleges
Non-Teaching and Maintenance Labor Union (GNCNTMLU) were the bargaining agents for GNC's
faculty members and non-teaching and maintenance personnel. The parties concluded their Collective
Bargaining Agreements (CBA) without issue. The 1994-1999 CBA has a "no-strike, no lock-out" clause
under Section 17 thereof which likewise provides for mechanism for grievance resolution and voluntary
arbitration. This provision was considered carried over in the subsequent CBAs. Instead of serving upon
respondents a reply/counter-proposal within 10 days from its receipt of respondents' proposal, GNC
wrote respondents calling for a meeting regarding CBA negotiations. While the said meeting took place
and was attended by panel members from GNC, GNCFLU and GNCNTMLU, no agreement was
reached except that GNC would notify respondents of the next negotiation meeting. However, what
respondents later received from GNC's Corporate Secretary was not a notice of meeting but a letter
which, among others, stated that the "management is not inclined to grant the economic/monetary-
related proposals. Respondents stressed that while they have been bargaining in good faith, it was
otherwise on the part of GNC. Respondents thus expressed their belief that the parties have already
reached an impasse. They therefore asked GNC to respond to their letter and therein state its stand as
to whether a third party is needed to assist them in threshing out their differences. As respondents did
not get any reply from GNC, they filed a preventive mediation case with the NCMB.
ISSUE Whether GNC is guilty of bad faith bargaining and thus violated its duty to bargain.
HELD GNC engaged in bad faith bargaining and thus violated its duty to bargain.

There is no truth to respondents' assertion that the parties have already reached an agreement when
GNC submitted a counter-proposal. Hence, it cannot be said that GNC engaged in dilatory tactics to
avoid the signing of the CBA since there was yet no final agreement to speak of. GNC likewise justifies
its submission of counter-proposal asserting that the same was necessary in view of the chronic financial
situation of GNC, the need to conclude a separate CBA for GNCFLU and GNCNTMLU, and in order to
introduce thereon improved provisions for the mutual benefit of the parties.

GNC has no genuine intention to comply with its duty to bargain. It merely went through the motions of
negotiations and then entered into an agreement with respondents which turned out to be an empty one
since it later denounced the same by submitting a reply/counter-proposal. Worse, when respondents
tried to clear out matters with the GNC President through their letter of January 8, 2010, GNC did not
even bother to respond. Nowhere from the afore-quoted minutes of the meeting can it be deduced that
the terms of the CBA is still subject to the approval of the GNC President. There is no clear showing that
the purpose of discussing the economic benefits with him is to secure his approval thereto. If at all, the
purported discussion appears to be a mere formality since the signing of the CBA was not made
dependent to the result of the discussion with him. As can be seen, the statement that "next time they
will be on the signing" is clearly unqualified. Indubitably, indications lead to the conclusion that the parties
already agreed on the terms of the CBA and it was only the execution thereof that needs to be done.

Accordingly, violations of a collective bargaining agreement, except those which are gross in character,
shall no longer be treated as unfair labor practice and shall be resolved as grievances under the
collective bargaining agreement. For purposes of this Article, gross violations of a collective bargaining
agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such
agreement.
 G.R. No. 232687 February 4, 2019
SLORD DEVELOPMENT CORPORATION vs. BENERANDO M. NOYA
(Union security clause; SEBA)
FACTS Respondent was employed as a welder by petitioner, a domestic corporation engaged in the business
of manufacturing and processing of sardines and other canned goods. Respondent's employment was
covered by a CBA between petitioner 'and (NLM-Katipunan), the company's sole and exclusive
bargaining agent for all the regular rank-and-file employees. Among its provisions were a union security
clause. Respondent asked several employees to affix their signatures on a blank sheet of yellow paper
for the purpose of forming a new union, prompting the president of NLM-Katipunan to file expulsion
proceedings against him for disloyalty. Subsequently respondent organized a new union named the
Bantay Manggagawa sa SLORD Development Corporation (BMSDC), which he registered with the
DOLE. In the ensuing investigation, respondent failed to appear and participate at the scheduled
hearings before the ·union. Thus, NLM-Katipunan resolved, with the ratification of its members, to expel
respondent on the ground of disloyalty. Accordingly, a notice of expulsion was issued by NLM-Katipunan
to respondent. Subsequently, a letter was sent by NLM-Katipunan to petitioner, demanding his
termination from employment pursuant to the union security clause of the CBA. After notifying
respondent of the union's decision to expel him and showing him all the documents attached to the
union's demand for his dismissal, respondent's employment was terminated. respondent filed a
complaint for illegal dismissal, unfair labor practice, and illegal deduction against petitioner before the
National Labor Relations Commission (NLRC), asserting that he did not violate any CBA provision since
he validly organized BMSDC during the freedom period.
ISSUE Whether or not the CA was correct in ruling that respondent was illegally dismissed.
HELD While not explicitly mentioned in the Labor Code, case law recognizes that dismissal from employment
due to the enforcement of the union security clause in the CBA is another just· cause for termination of
employment. Similar to the enumerated just causes in the Labor Code, the violation of a union security
clause amounts to a commission of a wrongful act or omission out of one's own volition; hence, it can
be said that the dismissal process was initiated not by the employer but by the employee's indiscretion.
Further, a stipulation in the CBA authorizing the dismissal of employees is of equal import as the
statutory provisions on dismissal under the Labor Code, since a CBA is the law between the company
and the union and compliance therewith is mandated by the express policy to give protection to labor;
thus, there is parallel treatment between just causes and violation of the union security clause.

To validly terminate the employment of an employee through the enforcement of the union ·security
clause, the following requisites must concur: (1) the union security clause is applicable; (2) the union is
requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient
evidence to support the decision of the union to expel the employee from the union. In this case, the
Court finds the confluence of the foregoing requisites, warranting the termination of respondent's
employment.

"Union security is a generic term which is applied to and comprehends 'closed shop,' 'union shop,'
'maintenance of membership' or any other form of agreement which imposes upon employees the
obligation to acquire or retain union membership as a condition affecting employment. There is union
shop when all new regular employees are required to join the union within a certain period for their
continued employment. There is maintenance of membership shop when employees, who are union
members as of the effective date of the agreement, or who thereafter become members, must maintain
union membership as a condition for continued employment until they are promoted or transferred out
of the bargaining unit, or the agreement is terminated. A closed shop, on the other hand, may be defined
as an enterprise in which, by agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed departments of the enterprise
unless he or she is, becomes, and, for the duration of the agreement, remains a member in good
standing of a union entirely comprised of or of which the employees in interest are a part. "
 G.R. No. 195163 December 13, 2017
ERGONOMIC SYSTEMS PHlLIPPINES, INC., PHILLP C. NG and MA. LOURMINDA O. NG
vs.
EMERITO C. ENAJE, et. al
(Closed shop)
FACTS Respondents were union officers and members of Ergonomic System Employees Union-Workers
Alliance Trade Unions (local union). The local union entered into a CBA with petitioner ESPJ, which was
valid for five (5) years. The local union, which was affiliated with Workers Alliance Trade Unions-Trade
Union Congress of the Philippines (Federation), was not independently registered. Thus, before the CBA
expired, the union officers secured the independent registration of the local union with the Regional
Office of the DOLE. Later on, the union officers were charged before the Federation and investigated
for attending and participating in other union's seminars and activities using union leaves without the
knowledge and consent of the Federation and ESPI as well as in initiating and conspiring in the
disaffiliation before the freedom period. ESPI notified respondents-union officers of the Federation's
demand and gave them 48 hours to explain. The local union staged a series of noise barrage and "slow
down" activities. The respondents filed a complaint for illegal dismissal and unfair labor practice against
ESPI, Phillip C. Ng, and Ma. Lourminda O. Ng. The LA held that the local union was the real party in
interest and the Federation was merely an agent in the CBA; thus, the union officers and members who
caused the implied disaffiliation did not violate the union security clause. Consequently, their dismissal
was unwarranted. The NLRC affirmed the ruling of the LA. It adjudged that the dismissal of the union
officers was effected only in response to the demand of the Federation and to comply with the union
security clause under the CBA.
ISSUE Whether the federation may invoke the union security clause in demanding the respondents' dismissal.
HELD Only the local union may invoke the union security clause in the CBA.

In this case, the primordial requisite, i.e., the union is requesting the enforcement of the union security
provision in the CBA, is clearly lacking. Under the Labor Code, a chartered local union acquires legal
personality through the charter certificate issued by a duly registered federation or national union and
reported to the Regional Office. "A local union does not owe its existence to the federation with which it
is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members.
Mere affiliation does not divest the local union of its own personality, neither does it give the mother
federation the license to act independently of the local union. It only gives rise to a contract of agency,
where the former acts in representation of the latter. Hence, local unions are considered principals while
the federation is deemed to be merely their agent."

There is no doubt that the union referred to in the foregoing provisions is the Ergonomic Systems
Employees Union or the local union as provided in Article I of the CBA.26 A perusal of the CBA shows
that the local union, not the Federation, was recognized as the sole and exclusive collective bargaining
agent for all its workers and employees in all matters concerning wages, hours of work, and other terms
and conditions of employment. Consequently, only the union may invoke the union security clause in
case any of its members commits a violation thereof. Even assuming that the union officers were disloyal
to the Federation and committed acts inimical to its interest, such circumstance did not give the
Federation the prerogative to demand the union officers' dismissal pursuant to the union security clause
which, in the first place, only the union may rightfully invoke. Certainly, it does not give the Federation
the privilege to act independently of the local union. At most, what the Federation could do is to refuse
to recognize the local union as its affiliate and revoke the charter certificate it issued to the latter. In fact,
even if the local union itself disaffiliated from the Federation, the latter still has no right to demand the
dismissal from employment of the union officers and members because concomitant to the union’s
prerogative to affiliate with a federation is its right to disaffiliate therefrom
 GR. NO. 218454 December 01, 2016
PENINSULA EMPLOYEES UNION (PEU) vs. MICHAEL B. ESQUIVEL, et al.
(Agency fees; Nature, basis)
FACTS PEU's Board of Directors passed a local board resolution authorizing (a) the affiliation of PEU with
NUWHRAIN, and the direct membership of its individual members thereto; (b) the compliance with all
the requirements therefor; and (c) the Local President to sign the affiliation agreement with NUWHRAIN
upon acceptance of such affiliation. PEU-NUWHRAIN sought to increase the union dues/agency fees
from one percent (1%) to two percent (2%) of the rank-and-file employees' monthly salaries, brought
about by PEU's affiliation with NUWHRAIN, which supposedly requires its affiliates to remit to it two
percent (2%) of their monthly salaries. PEU-NUWHRAIN requested15 the OSEC for Administrative
Intervention for Dispute Avoidance16 (AIDA) pursuant to DOLE Circular in relation to the issue, among
others, of its entitlement to collect increased agency fees from the non-PEU members. The non-PEU
members objected to the assessment of increased agency fees arguing that: (a) the new CBA is
unenforceable since no written CBA has been formally signed and executed by PEU-NUWHRAIN and
the Hotel; (b) the 2% agency fee is exorbitant and unreasonable; and (c) PEU-NUWHRAIN failed to
comply with the mandatory requirements for such increase.
ISSUE Whether the CA committed reversible error in ruling that PEU-NUWHRAIN had no right to collect the
increased agency fees.
HELD The recognized collective bargaining union which successfully negotiated the CBA with the employer is
given the right to collect a reasonable fee called "agency fee" from non-union members who are
employees of the appropriate bargaining unit, in an amount equivalent to the dues and other fees paid
by union members, in case they accept the benefits under the CBA.42 While the collection of agency
fees is recognized by Article 25943 (formerly Article 248) of the Labor Code, as amended, 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.

In the present case, PEU-NUWHRAIN's right to collect agency fees is not disputed. However, the rate
of agency fees it seeks to collect from the non-PEU members is contested, considering its failure to
comply with the requirements for a valid increase of union dues, rendering the collection of increased
agency fees unjustified.

It is evident from the foregoing that while the matter of implementing the two percent (2%) union dues
was taken up during the PEU-NUWHRAIN's 8th General Membership Meeting on October 28, 2008,
there was no sufficient showing that the same had been duly deliberated and approved. The minutes of
the Assembly itself belie PEU-NUWHRAIN's claim that the increase in union dues and the corresponding
check-off were duly approved since it merely stated that "the [two percent (2%)] Union dues will have to
be implemented,"53 meaning, it would still require the submission of such matter to the Assembly for
deliberation and approval Such conclusion is bolstered by the silence of the October 28, 2008 GMR on
the matter of two percent (2%) union dues, in contrast to the payment of 10% attorney's fees from the
CBA backwages which was clearly spelled out as having been "discussed and approved."54 Thus, as
aptly pointed out by the CA: "[i]f indeed majority of the members of [PEU-NUWHRAIN] approved the
increase in union dues, the same should have been mentioned in the [October 28, 2008 minutes], and
reflected in the GMR of the same date.
 G.R. Nos. L-51002 06 May 30, 1983
SPECIAL EVENTS & CENTRAL SHIPPING OFFICE WORKERS UNION
vs.
SAN MIGUEL CORPORATION, J.B. PREYSLER, NLRC, HON. AMADO G. INCIONG, and HON. BLAS OPLE
(ULP by labor organizations; Featherbedding)
FACTS The individual complainants were formerly regular seasonal workers of the said Special Events and
Central Shipping Office. Along with their co-workers, they organized themselves into a union and elected
the first set of officers. Respondent company was informed of the formation of the union as a labor
organization by the officers elected thereto. Together with the notice given to the company of the union's
formation, a set of bargaining demands were presented to the company by the union's counsel, in view
thereof, a conference was held between the union's panel and management wherein management
demanded that the union show proof of its majority status and suggested that the appropriate
certification proceeding be presented to ascertain the union's majority among the employees in the
Special Events and Central Shipping Department. Pursuant to management's suggestion, the union filed
with the Court of Industrial Relations a petition for certification election. After the union was certified,
negotiation conferences were carried out between the union and the company and as a result of the
negotiations, a collective bargaining agreement was concluded and executed between the union and
the company. After trial on the merits, the Labor Arbiter found that the complaint against respondent
company was substantiated by evidence on the record. Upon appeal to the NLRC en banc, the decision
was, however, reversed in a resolution dated March 28, 1978 where it was held that the reduction of
working days of the individual complainants is not violative of Article IV of the disputants' collective
agreement because the "practice" adverted to therein refers not to the number of working days per week
but to the "assignment of work" in relation to "working hours" and "work schedules."
ISSUE Whether or not the reduction of working days is violative of Article IV of the Bargaining Agreement.
HELD In resolving the question of whether the company committed an act of discrimination against the 27
complainants whose conversion did not materialize, the fact that their applications were filed after the
scheduled deadline of submission is vital and significant. Their situation is unlike that of the first 20
workers who were converted to regular daily paid workers because it is an admitted fact that these 20
workers filed their applications for conversion within the deadline of September 15, 1968 and agreed to
comply with the conditions for conversion. There is thus, no basis to the claim that the said 20 regular
seasonal workers who were converted were handpicked by the company because they were less active
union members.

Respondent company's omission to check-off union dues of individual complainants as regular seasonal
workers for the months of October and November, 1968, although coupled with complainants'
submission of check-off authorization for union dues as regular daily paid workers, did not make the
conversion of complainants into regular daily paid workers a fait accompli In the absence of the operative
act of conversion which is compliance with the conditions imposed by respondent company namely: the
signing of resignation papers and acceptance of gratuity pay, the omission whether deliberately done or
through sheer inadvertence, did not mean anything. Clearly, respondent company cannot be charged
of unfair labor practice against the 27 chosen for possible conversion among the later applicants since
the conversion did not materialize in the first place.

It is their refusal to comply with the reasonable conditions for conversion as required by the company,
for no apparent and valid reason other than their fear and belief that they were being terminated by the
company, which proved to be the hindrance to their conversion. Despite the assurance given to them
by the assistant head of the personnel department that their signing the documents indicating the
termination of their status as regular seasonal workers and their acceptance of the checks are necessary
and if done by them would mean automatic conversion, they still refused.
 G.R. No. 116751 August 28, 1998
ORIENTAL TIN CAN LABOR UNION
vs.
SECRETARY OF LABOR AND EMPLOYMENT, ORIENTAL TIN CAN WORKERS UNION — FEDERATION
OF FREE WORKERS [OTCWU-FFW] and ORIENTAL TIN CAN AND METAL SHEET MANUFACTURING
(ULP by labor organizations; Sweetheart contract)
FACTS Respondent and petitioner, Oriental Tin Can and Metal Sheet Manufacturing Company, Incis engaged
in the manufacture of tin can containers and metal sheets. It entered into a collective bargaining
agreement (CBA) with petitioner Oriental Tin Can Labor Union as the existing CBA was due to expire.
248 of the company's rank-and-file employees authorized the Federation of Free Workers (FFW) to file
a petition for certification election. However, this petition was repudiated via a written waiver by 115 of
the signatories who, along with other employees totalling 897, ratified the CBA on the same date.
Purporting to represent the regular rank-and-file employees of the company, the petition was
accompanied by the "authentic signatures" of 25% of the employees/workers in the bargaining unit. The
OTCLU filed a manifestation and motion, praying for the dismissal of the petition for certification election
on the ground that it was not endorsed by at least 25% of the employees of the bargaining unit. Some
of the employees who initially signed the petition had allegedly withdrawn in writing such support prior
to the filing of the same. The OTCWU-FFW filed a reply to said manifestation and motion, claiming that
the retraction of support for the petition was "not verified under oath" and, therefore, had no legal and
binding effect. It further asserted that the petition had the required support of more than 25% of all the
employees in the bargaining unit. the officers of the OTCWU-FFW walked out of their jobs, prompting
the company to require them to explain in writing why no disciplinary action should be taken against
them for walking out en masse. The following day, said union filed a notice of strike with the National
Conciliation and Mediation Board (NCMB) grounded on the alleged dismissal of union members/officers.
Two days later, the company directed said officers to report back to work within 48 hours, but none of
them did. The OTCWU-FFW filed a consolidated reply, alleging that "an employer has no legal
personality to oppose a petition for certification election; that there are only 882 rank and file workers in
the bargaining unit and not 1,020 which included supervisors and workers hired after the filing of the
petition; that those who gave their support to the filing of the petition did not withdraw or retract the same
before or after the petition was filed; the Collective Bargaining Agreement (CBA) between respondent
company and Forced Intervenor (OTCLU) is a sweetheart contract and concluded within the freedom
period; and that additional employees gave their support to the petition after the same was filed."
ISSUE Whether the Labor Secretary improperly prescribed the mode of picking a collective bargaining agent
upon the employees who effectively repudiated the "notion" of a certification election by ratifying the
CBA entered into during the freedom period.
HELD The Labor Code imposes upon the employer and the representative of the employees the duty to bargain
collectively. Since the question of right of representation as between competing labor organizations in a
bargaining unit is imbued with public interest, the law governs the choice of a collective bargaining
representative which shall be the duly certified agent of the employees concerned. An official certification
becomes necessary where the bargaining agent fails to present adequate and reasonable proof of its
majority authorization and where the employer demands it, or when the employer honestly doubts the
majority representation of several contending bargaining groups. In fact, Article 255 of the Labor Code
allows the majority of the employees in an appropriate collective bargaining unit to designate or select
the labor organization which shall be their exclusive representative for the purpose of collective
bargaining. The filing of a petition for certification election during the 60-day freedom period gives rise
to a representation case that must be resolved even though a new CBA has been entered into within
that period. The filing of a petition for certification election during the 60-day freedom period gives rise
to a representation case that must be resolved even though a new CBA has been entered into within
that period. The designation or selection of the bargaining representative without, however, going
through the process set out by law for the conduct of a certification election applies only when
representation is not in issue. There is no problem if a union is unanimously chosen by a majority of the
employees as their bargaining representative, but a question of representation arising from the presence
of more than one union in a bargaining unit aspiring to be the employees' representative, can only be
resolved by holding a certification election under the supervision of the proper government authority.
 G.R. No. 218390 February 28, 2018
HONGKONG BANK INDEPENDENT LABOR UNION (HBILU)
v.
HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
(Procedures in Collective Bargaining)
FACTS Petitioner Hongkong Bank Independent Labor Union (HBILU), the incumbent bargaining agent of
HSBC's rank-and-file employees, entered into a CBA with the bank. When the CBA was about to expire,
the parties started negotiations for a new one to cover the period from April 1, 2012 to March 31, 2017.
During the said negotiations, HSBC proposed amendments to the above- quoted Article XI allegedly to
align the wordings of the CBA with its BSP- approved Plan. Particularly, HSBC proposed the deletion of
Article XI, Section 4 (Credit Ratio) of the CBA. HBILU member Vince Mananghaya (Mananghaya)
applied for a loan under the provisions of Article XI of the CBA. His first loan application in March 2012
was approved, but adverse findings from the external checks on his credit background resulted in the
denial of his September application. HBILU then raised the denial as a grievance issue with the National
Conciliation Mediation Board (NCMB). It argued that the imposition of an additional requirement—the
external credit checking prior to approval of any loan application under Article XI of the CBA—is not
sanctioned under the CBA. The Union emphasized that under the terms of Article XI, there is no such
requirement and that it cannot, therefore, be unilaterally imposed by HSBC.
ISSUE Whether or not HSBC could validly enforce the credit-checking requirement under its BSP-approved
Plan in processing the salary loan applications of covered employees even when the said requirement
is not recognized under the CBA.
HELD The constitutional right of employees to participate in matters affecting their benefits and the sanctity of
the CBA. The Court deems it necessary to remind HSBC of the basic and well- entrenched rule that
although jurisprudence recognizes the validity of the exercise by an employer of its management
prerogative and will ordinarily not interfere with such, this prerogative is not absolute and is subject to
limitations imposed by law, collective bargaining agreement, and general principles of fair play and
justice.

A collective bargaining agreement or CBA is the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of work and all other terms and conditions of
employment in a bargaining unit. As in all contracts, the parties in a CBA may establish such stipulations,
clauses, terms and conditions as they may deem convenient provided these are not contrary to law,
morals, good customs, public order or public policy. Thus, where the CBA is clear and unambiguous, it
becomes the law between the parties and compliance therewith is mandated by the express policy of
the law. In Faculty Association of Mapua Institute of Technology (FAMJT) v. Court of Appeals, this Court
was emphatic in its pronouncement that the CBA during its lifetime binds all the parties. The provisions
of the CBA must be respected since its terms and conditions constitute the law between the parties. And
until a new CBA is executed by and between the parties, they are duty-bound to keep the status quo
and to continue in full force and effect the terms and conditions of the existing agreement.

In the present controversy, it is clear from the arguments and evidence submitted that the Plan was
never made part of the CBA. As a matter of fact, HBILU vehemently rejected the Plan's incorporation
into the agreement. Due to this lack of consensus, the bank withdrew its proposal and agreed to the
retention of the original provisions of the CBA. The subsequent implementation of the Plan's external
credit check provisions in relation to employee loan applications under Article XI of the CBA was then
an imposition solely by HSBC.
 G.R. No. 188020 June 27, 2016
REN TRANSPORT CORP. and/or REYNALDO PAZCOGUIN III
vs.
NLRC (2ND DIVISION), SAMAHANG MANGGAGAWA SA REN TRANSPORT-ASSOCIATION OF
DEMOCRATIC LABOR ASSOCIATIONS (SMART-ADLO)
(Duty to Bargain Collectively; Economic, Representative Aspect)
FACTS Samahan ng Manggagawa sa Ren Transport (SMART) is a registered union, which had a five-year
collective bargaining agreement (CBA) with Ren Transport Corp. (Ren Transport) set to expire. The 60-
day freedom period of the CBA passed without a challenge to SMART's majority status as bargaining
agent. SMART thereafter conveyed its willingness to bargain with Ren Transport, to which it sent
bargaining proposals. Ren Transport, however, failed to reply to the demand.5 Subsequently, two
members of SMART wrote to the Department of Labor and Employment - National Capital Region
(DOLE-NCR). The office was informed that a majority of the members of SMART had decided to
disaffiliate from their mother federation to form another union, Ren Transport Employees Association
(RTEA).6 SMART contested the alleged disaffiliation through a letter. During the pendency of the
disaffiliation dispute at the DOLE-NCR, Ren Transport stopped the remittance to SMART of the union
dues that had been checked off from the salaries of union workers as provided under the CBA. Further,
Ren Transport voluntarily recognized RTEA as the sole and exclusive bargaining agent of the rank-and-
file employees of their company. SMART filed with the labor arbiter a complaint for unfair labor practice
against Ren Transport. The labor arbiter rendered a decision finding Ren Transport guilty of acts of
unfair labor practice. The former explained that since the disaffiliation issue remained pending, SMART
continued to be the certified collective bargaining agent; hence, Ren Transport's refusal to send a
counter-proposal to SMART was not justified. The labor arbiter also held that the company's failure to
remit the union dues to SMART and the voluntary recognition of RTEA were clear indications of
interference with the employees' exercise of the right to self-organize.
ISSUE Whether Ren Transport violated its duty to bargain collectively with SMART.
HELD Violation of the duty to bargain collectively is an unfair labor practice under Article 258(g) of the Labor
Code. An instance of this practice is the refusal to bargain collectively as held in General Milling Corp.
v CA. 20 In that case, the employer anchored its refusal to bargain with and recognize the union on
several letters received by the former regarding the withdrawal of the workers' membership from the
union. We rejected the defense, saying that the employer had devised a flimsy excuse by attacking the
existence of the union and the status of the union's membership to prevent any negotiation.

It bears stressing that Ren Transport had a duty to bargain collectively with SMART. Under Article 263
in relation to Article 267 of the Labor Code, it is during the freedom period - or the last 60 days before
the expiration of the CBA - when another union may challenge the majority status of the bargaining
agent through the filing of a petition for a certification election. If there is no such petition filed during the
freedom period, then the employer "shall continue to recognize the majority status of the incumbent
bargaining agent where no petition for certification election is filed." 22

In the present case, the facts are not up for debate. No petition for certification election challenging the
majority status of SMART was filed during the freedom period, which was from November 1 to December
31, 2004 - the 60-day period prior to the expiration of the five-year CBA. SMART therefore remained the
exclusive bargaining agent of the rank-and-file employees.

Given that SMART continued to be the workers' exclusive bargaining agent, Ren Transport had the
corresponding duty to bargain collectively with the former.1âwphi1 Ren Transport's refusal to do so
constitutes an unfair labor practice.

Consequently, Ren Transport cannot avail itself of the defense that SMART no longer represents the
majority of the workers. The fact that no petition for certification election was filed within the freedom
period prevented Ren Transport from challenging SMART' s existence and membership.
 G.R. No. L-29966 February 28, 1974
HERALD DELIVERY CARRIERS UNION (PAFLU) and PHILIPPINE ASSOCIATION OF FREE LABOR
UNIONS (PAFLU)
vs.
HERALD PUBLICATION, INC.
(Boulwarism)
FACTS The merit of this appeal from a decision of respondent Court of Industrial Relations is rather apparent
when appraised in the light of the statutory command that the negotiation leading to a collective contract
be carried on in the utmost good faith by both labor and management. For respondent Court, as will be
shown, was quite lax in its duty to assure its observance by respondent Herald Publications. What is
worse, it sanctioned the separation from the service of the employees involved, ignoring that they were
the victims of an unfair labor practice, the employer having disregarded its duty to bargain. Such an
approach if given approval is fraught with adverse consequences for the regime of collective bargaining,
which is one of the prized goals of the Industrial Peace Act. This Court cannot be expected then to
countenance such an attitude, an unfair labor practice having been committed. Actually the thirty-three
individual members were separated or laid off from the service because of a new system of distribution
adopted by private respondent by contracting outside work to twelve distributors, a step which according
to it was under serious consideration before the strike of September 27, 1962, which was the precursor
of the complaint for unfair labor practice filed by petitioners with respondent Court precisely on the very
ground of a failure or refusal to comply with its statutory duty to bargain in good faith. Respondent Court,
as noted, ruled against petitioners.
ISSUE Whether the duty to bargain collectively was violated.
HELD There must be, according to National Labor Relations Board v. Pilling and Son Co., "common willingness
among the parties to discuss freely and fully their respective claims and demands and, when these are
opposed, to justify them on reason." Professor Cox added: "Although the law cannot open a man's
mind, it can at least compel him to conduct himself as if he were trying to persuade and were willing to
be persuaded. To offer the union a contract saying 'Take it or leave it,' is not bargaining
collectively within the meaning of the act." These are among the indicia referred to by him to indicate
lack of good faith: "Stalling the negotiations by unexplained delays in answering correspondence and ...
unnecessary postponement of meeting ...." In the latest work on the subject, Professor Smith, also an
authoritative voice, wrote on the present state of American law thus: "As a minimum it would seem that
the Act prescribes a superficial pretense at bargaining — fictitious negotiation which essentially denies
recognition of a union. However, manifestations of such activity may be subtle and hard to detect. Even
when it is not, the manner in which 'sham bargaining' can be prevented presents problems. Statutory
antinomy arises because as a matter of legislative history, meaningful bargaining was to be
accomplished by 'leading the parties to the bargaining table' without intrusions into the negotiations,
and, in any event, without compelling either party to agree to a proposal or make a concession."

Precisely, the fact that thereby a number of workers would as a result stand to lose their job unless
absorbed by the new distributors ought to have led private respondent to take the matter up with the
petitioner labor unions. As was set forth in Shell Oil Workers' Union v. Shell Company of the Philippines,
Ltd.: "More specifically, [management] cannot be denied the faculty of promoting efficiency and attaining
economy by a study of what units are essential for its operation. To it belongs the ultimate determination
of whether services should be performed by its personnel or contracted to outside agencies. It is the
opinion of Court, that while, management has the final say on such matter, the labor union is not to be
completely left out. What was done by Shell Company in informing the Union as to the step it was
intending to take on the proposed solution of the security guard section to be replaced by an outside
agency is praiseworthy. There should be mutual consultation even if eventually deference is to be paid
what management decides. Thereby, in the words of Chief Justice Warren, there is likely to be achieved
'peaceful accommodation of conflicting interests." Nor is it to be lost sight of that what is involved here
was of the essence of the employment relationship, the implementation of scheme of private respondent
resulting in the termination of the employment of the individual petitioners.
 G.R. No. 141471 September 18, 2000
COLEGIO DE SAN JUAN DE LETRAN
vs.
ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN and ELEONOR AMBAS
(60- Day Freedom Period)
FACTS Salvador Abtria, then President of respondent union, Association of Employees and Faculty of Letran,
initiated the renegotiation of its Collective Bargaining Agreement with petitioner Colegio de San Juan de
Letran for the last two (2) years of the CBA's five (5) year lifetime from 1989-1994. On the same year,
the union elected a new set of officers wherein private respondent Eleanor Ambas emerged as the newly
elected President (Secretary of Labor and Employment's Order Ambas wanted to continue the
renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already
prepared for signing by the parties. The parties submitted the disputed CBA to a referendum by the
union members, who eventually rejected the said CBA. Petitioner accused the union officers of
bargaining in bad faith before the NLRC. Labor Arbiter Edgardo M. Madriaga decided in favor of
petitioner. However, the Labor Arbiter's decision was reversed on appeal before the NLRC. The parties
agreed to disregard the unsigned CBA and to start negotiation on a new five-year CBA starting 1994-
1999. The union submitted its proposals to petitioner, which notified the union six days later or on
February 13, 1996 that the same had been submitted to its Board of Trustees. In the meantime, Ambas
was informed through a letter from her superior that her work schedule was being changed from Monday
to Friday to Tuesday to Saturday. Ambas protested and requested management to submit the issue to
a grievance machinery under the old CBA. Due to petitioner's inaction, the union filed a notice of strike
on March 13, 1996. The parties met on March 27, 1996 before the NCMB to discuss the ground rules
for the negotiation. On March 29, 1996, the union received petitioner's letter dismissing Ambas for
alleged insubordination. Hence, the union amended its notice of strike to include Ambas' dismissal.
ISSUE Whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when it
unilaterally suspended the ongoing negotiations for a new Collective Bargaining Agreement (CBA) upon
mere information that a petition for certification has been filed by another legitimate labor organization.
HELD In order to allow the employer to validly suspend the bargaining process there must be a valid petition
for certification election raising a legitimate representation issue. Hence, the mere filing of a petition for
certification election does not ipso facto justify the suspension of negotiation by the employer. The
petition must first comply with the provisions of the Labor Code and its Implementing Rules. Foremost
is that a petition for certification election must be filed during the sixty-day freedom period. The "Contract
Bar Rule" under Section 3, Rule XI, Book V, of the Omnibus Rules Implementing the Labor Code,
provides that: " .… If a collective bargaining agreement has been duly registered in accordance with
Article 231 of the Code, a petition for certification election or a motion for intervention can only be
entertained within sixty (60) days prior to the expiry date of such agreement." The rule is based on Article
232, in relation to Articles 253, 253-A and 256 of the Labor Code. No petition for certification election for
any representation issue may be filed after the lapse of the sixty-day freedom period. The old CBA is
extended until a new one is signed. The rule is that despite the lapse of the formal effectivity of the CBA
the law still considers the same as continuing in force and effect until a new CBA shall have been validly
executed.9 Hence, the contract bar rule still applies. The purpose is to ensure stability in the relationship
of the workers and the company by preventing frequent modifications of any CBA earlier entered into by
them in good faith and for the stipulated original period.

In the case at bar, the lifetime of the previous CBA was from 1989-1994. The petition for certification
election by ACEC, allegedly a legitimate labor organization, was filed with the Department of Labor and
Employment (DOLE). Clearly, the petition was filed outside the sixty-day freedom period. Hence, the
filing thereof was barred by the existence of a valid and existing collective bargaining agreement.
Consequently, there is no legitimate representation issue and, as such, the filing of the petition for
certification election did not constitute a bar to the ongoing negotiation. Reliance, therefore, by petitioner
of the ruling in Lakas Ng Manggagawang Makabayan v. Marcelo Enterprises is misplaced since that
case involved a legitimate representation issue which is not present in the case at bar.
 G.R. No. 184007 February 16, 2011
PAQUITO V. ANDO vs. ANDRESITO Y. CAMPO, ET AL.
(Injunction prohibited)
FACTS Petitioner was the president of Premier Allied and Contracting Services, Inc. (PACSI), an independent
labor contractor. Respondents were hired by PACSI as pilers or haulers tasked to manually carry bags
of sugar from the warehouse of Victorias Milling Company and load them on trucks. Respondents were
dismissed from employment. They filed a case for illegal dismissal and some money claims with the
National Labor Relations Commission (NLRC). Petitioner and PACSI appealed to the NLRC. In a
decision, the NLRC ruled that petitioner failed to perfect his appeal because he did not pay the
supersedeas bond. It also affirmed the Labor Arbiter’s decision with modification of the award for
separation pay to four other employees who were similarly situated. Upon finality of the decision,
respondents moved for its execution. This prompted petitioner to file an action for prohibition and
damages with prayer for the issuance of a temporary restraining order (TRO) before the Regional Trial
Court (RTC), Branch 50, Bacolod City. Petitioner claimed that the property belonged to him and his wife,
not to the corporation, and, hence, could not be subject of the execution sale. Since it is the corporation
that was the judgment debtor, execution should be made on the latter’s properties.
ISSUE Whether the CA erred in upholding the RTC’s lack of jurisdiction to restrain the implementation of the
writ of execution issued by the Labor Arbiter.
HELD There is no denying that the present controversy arose from the complaint for illegal dismissal. The
subject matter of petitioner’s complaint is the execution of the NLRC decision. Execution is an essential
part of the proceedings before the NLRC. Jurisdiction, once acquired, continues until the case is finally
terminated, and there can be no end to the controversy without the full and proper implementation of the
commission’s directives.

Further underscoring the RTC’s lack of jurisdiction over petitioner’s complaint is Article 254 of the Labor
Code, to wit:

ART. 254. INJUNCTION PROHIBITED. – No temporary or permanent injunction or restraining order in

any case involving or growing out of labor disputes shall be issued by any court or other entity, except
as otherwise provided in Articles 218 and 264 of this Code.

That said, however, we resolve to put an end to the controversy right now, considering the length of time
that has passed since the levy on the property was made.

Petitioner claims that the property sought to be levied does not belong to PACSI, the judgment debtor,
but to him and his wife. Since he was sued in a representative capacity, and not in his personal capacity,
the property could not be made to answer for the judgment obligation of the corporation.

The TCT of the property bears out that, indeed, it belongs to petitioner and his wife. Thus, even if we
consider petitioner as an agent of the corporation – and, therefore, not a stranger to the case – such
that the provision on third-party claims will not apply to him, the property was registered not only in the
name of petitioner but also of his wife. She stands to lose the property subject of execution without ever
being a party to the case. This will be tantamount to deprivation of property without due process.

Moreover, the power of the NLRC, or the courts, to execute its judgment extends only to properties
unquestionably belonging to the judgment debtor alone. A sheriff, therefore, has no authority to attach
the property of any person except that of the judgment debtor. Likewise, there is no showing that the
sheriff ever tried to execute on the properties of the corporation.

In sum, while petitioner availed himself of the wrong remedy to vindicate his rights, nonetheless, justice
demands that this Court look beyond his procedural missteps and grant the petition.
 G.R. No. 169717 March 16, 2011
SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES
FOR EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS JERRY VICTORIO-Union President,
vs.
CHARTER CHEMICAL and COATING CORPORATION
(Certification Election)
FACTS The right to file a petition for certification election is accorded to a labor organization provided that it
complies with the requirements of law for proper registration. The inclusion of supervisory employees in
a labor organization seeking to represent the bargaining unit of rank-and-file employees does not divest
it of its status as a legitimate labor organization. We apply these principles to this case.

Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment
and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-file
employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation
Arbitration Unit of the DOLE, National Capital Region. Respondent company filed an Answer with
Motion to Dismiss4 on the ground that petitioner union is not a legitimate labor organization because of
(1) failure to comply with the documentation requirements set by law, and (2) the inclusion of supervisory
employees within petitioner union.

Med-Arbiter Tomas F. Falconitin issued a Decision6 dismissing the petition for certification election. The
Med-Arbiter ruled that petitioner union is not a legitimate labor organization because the Charter
Certificate, "Sama-samang Pahayag ng Pagsapi at Authorization," and "Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas" were not executed
under oath and certified by the union secretary and attested to by the union president as required by
Section 235 of the Labor Code. the DOLE found that a review of the records indicates that no certification
election was previously conducted in respondent company. On the contrary, the prior certification
election filed by Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating Corporation was,
likewise, denied by the Med-Arbiter and, on appeal, was dismissed by the DOLE for being filed out of
time. Hence, there was no obstacle to the grant of petitioner union’s petition for certification election.
ISSUE Whether the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of
jurisdiction in holding that the alleged mixture of rank-and-file and supervisory employee[s] of petitioner
[union’s] membership is [a] ground for the cancellation of petitioner [union’s] legal personality and
dismissal of [the] petition for certification election.
HELD The issue as to the legal personality of petitioner union is not barred by the July 16, 1999 Decision of
the DOLE.

A review of the records indicates that the issue as to petitioner union’s legal personality has been timely
and consistently raised by respondent company before the Med-Arbiter, DOLE, CA and now this Court.
In its July 16, 1999 Decision, the DOLE found that petitioner union complied with the documentation
requirements of the Labor Code and that the evidence was insufficient to establish that there was an
illegal mixture of supervisory and rank-and-file employees in its membership. Nonetheless, the petition
for certification election was dismissed on the ground that another union had previously filed a petition
for certification election seeking to represent the same bargaining unit in respondent company.

The charter certificate need not be certified under oath by the local union’s secretary or treasurer and
attested to by its president. In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil.
356 (1996), the Court ruled that it was not necessary for the charter certificate to be certified and attested
by the local/chapter officers. Id. While this ruling was based on the interpretation of the previous
Implementing Rules provisions which were supplanted by the 1997 amendments, we believe that the
same doctrine obtains in this case. Considering that the charter certificate is prepared and issued by the
national union and not the local/chapter, it does not make sense to have the local/chapter’s officers x x
x certifies or attest to a document which they had no hand in the preparation of. The legal personality of
petitioner union cannot be collaterally attacked by respondent company in the certification election
proceedings.
 G.R. No. 128845 June 1, 2000
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE)
vs.
HON. LEONARDO A. QUISUMBING in his capacity as the Secretary of Labor and Employment; HON.
CRESENCIANO B. TRAJANO in his capacity as the Acting Secretary of Labor and Employment; DR.
BRIAN MACCAULEY in his capacity as the Superintendent of International School-Manila; and
INTERNATIONAL SCHOOL, INC.
(Methods of determining appropriate bargaining unit; Globe Doctrine)
FACTS Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent
School, mostly Filipinos, cry discrimination. We agree. That the local-hires are paid more than their
colleagues in other schools is, of course, beside the point. The point is that employees should be given
equal pay for work of equal value. That is a principle long honored in this jurisdiction. That is a principle
that rests on fundamental notions of justice. That is the principle we uphold today.

Private respondent International School, Inc. (the School, for short), pursuant to Presidential Decree
732, is a domestic educational institution established primarily for dependents of foreign diplomatic
personnel and other temporary residents.1 To enable the School to continue carrying out its educational
program and improve its standard of instruction, Section 2(c) of the same decree authorizes the School
to employ its own teaching and management personnel selected by it either locally or abroad, from
Philippine or other nationalities, such personnel being exempt from otherwise applicable laws and
regulations attending their employment, except laws that have been or will be enacted for the protection
of employees. When negotiations for a new collective bargaining agreement were held on June 1995,
petitioner International School Alliance of Educators, "a legitimate labor union and the collective
bargaining representative of all faculty members" of the School, contested the difference in salary rates
between foreign and local-hires. This issue, as well as the question of whether foreign-hires should be
included in the appropriate bargaining unit, eventually caused a deadlock between the parties. Petitioner
claims that the point-of-hire classification employed by the School is discriminatory to Filipinos and that
the grant of higher salaries to foreign-hires constitutes racial discrimination.
ISSUE Whether foreign-hires do not belong to the same bargaining unit as the local-hires.
HELD A bargaining unit is "a group of employees of a given employer, comprised of all or less than all of the
entire body of employees, consistent with equity to the employer, indicate to be the best suited to serve
the reciprocal rights and duties of the parties under the collective bargaining provisions of the law." 29
The factors in determining the appropriate collective bargaining unit are (1) the will of the employees
(Globe Doctrine); (2) affinity and unity of the employees' interest, such as substantial similarity of work
and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3)
prior collective bargaining history; and (4) similarity of employment status. 30 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. 31

It does not appear that foreign-hires have indicated their intention to be grouped together with local-
hires for purposes of collective bargaining. The collective bargaining history in the School also shows
that these groups were always treated separately. Foreign-hires have limited tenure; local-hires enjoy
security of tenure. Although foreign-hires perform similar functions under the same working conditions
as the local-hires, foreign-hires are accorded certain benefits not granted to local-hires. These benefits,
such as housing, transportation, shipping costs, taxes, and home leave travel allowance, are reasonably
related to their status as foreign-hires, and justify the exclusion of the former from the latter. To include
foreign-hires in a bargaining unit with local-hires would not assure either group the exercise of their
respective collective bargaining rights.