Labor Relations Law

ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.

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LAST-MINUTE NOTES ON THE 2012 BAR EXAMINATION IN LABOR LAW BASED ON THE SUPREME COURT-PRESCRIBED SYLLABUS

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Prof. Joselito Guianan Chan G. LABOR RELATIONS LAW

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G. LABOR RELATIONS LAW

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3. Right to Peaceful Concerted Activities a. Forms of Concerted Activities b. Who may declare a strike or lockout? c. Requisites for a valid strike d. Requisites for a valid lockout e. Requisites for lawful picketing f. Assumption of jurisdiction by the Secretary of Labor or Certification of the Labor dispute to the NLRC for compulsory arbitration g. Nature of Assumption Order or Certification Order h. Effect of defiance of Assumption or Certification Orders

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2. Right to Collective Bargaining a. Duty to bargain collectively (1) Kiok Loy ruling b. Mandatory provisions of CBA (1) Grievance Procedure (2) Voluntary Arbitration (3) No Strike-No Lockout Clause (4) Labor Management Council c. ULP in Collective Bargaining (1) Bargaining in bad faith (2) Refusal to bargain (3) Individual bargaining (4) Blue sky bargaining (5) Surface bargaining d. Unfair Labor Practice (1) ULP of Employers (2) ULP of Labor Organizations

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1. Right to Self-organization a. Who may unionize for purposes of collective bargaining (1) Who cannot form, join or assist labor organizations (2) Executive Order No. 180 b. Bargaining unit (1) Test to determine the constituency of an appropriate bargaining unit (2) Voluntary Recognition (a) Requirements (3) Certification election (a) In an unorganized establishment (b) In an organized establishment (c) Rules prohibiting the filing of petition for certification election (d) Requirements for validity of certification election (e) Protests and other questions arising from conduct of certification election (4) Run-off election (a) Requirements (5) Re-run election (6) Consent election (7) Affiliation and disaffiliation of the local union from the mother union (a) Substitutionary doctrine (8) Union dues and special assessments (a) Requirements for validity (9) Agency fees (a) Requisites for assessment

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TOPICS UNDER THE SYLLABUS

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[These 8-part Notes discuss all topics/sub-topics in the Supreme Court-prescribed Syllabus for Labor Law]

LABOR LAW: G. LABOR RELATIONS LAW Prof. Joselito Guianan Chan

www.chanroblesbar.com : www.chanroblesbar.com.ph



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i. Illegal Strike (1) Liability of officers of the unions (2) Liability of ordinary workers (3) Waiver of illegality of strike j. Injunctions (1) Requisites for Labor Injunctions (2) “Innocent Bystander Rule”

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============================== TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 1. Right to Self-organization a. Who may unionize for purposes of collective bargaining (1) Who cannot form, join or assist labor organizations (2) Executive Order No. 180 ==============================

Relevant Provisions: Book V, Labor Code Executive Order No. 180, Series of 1987 [June 01, 1987]

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1. CONSTITUTIONAL BASIS.

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1. CONSTITUTIONAL BASIS. Under the 1987 Constitution, it is mandated that “the State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.”4 Consequently, the State is required to “guarantee the rights of all workers to self‐organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law.”5 Further, the Constitution declares that “the right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law, shall not be abridged.”6 1. WHO MAY UNIONIZE FOR PURPOSES OF COLLECTIVE BARGAINING. a. Persons who may join, form or assist a labor organization for collective bargaining purposes. The following are eligible to join, form or assist a labor organization: 1. All persons employed in commercial, industrial and agricultural enterprises; 2. Employees of government‐owned or controlled corporations without original charters established under the Corporation Code; 3. Employees of religious, charitable, medical or educational institutions, whether operating for profit or not;7 b. Employees who are allowed to organize a labor organization only for mutual aid and protection but not for collective bargaining purposes. Ambulant, intermittent and other workers, the self‐employed, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection and other legitimate purposes except collective bargaining.8 The reason for this rule is that these persons have no employers to collectively bargain with. c. Rule on the right of supervisors to join a union. There is no prohibition in the law or in the implementing rules regarding the right of supervisory employees to organize a labor organization or workers’ association of their own. They are, however, not allowed to become members of a labor union composed of rank‐and‐file employees. This is clear under Article 245 of the Labor Code.9 In case there is

Section 18, Article II [Declaration of Principles and State Policies], 1987 Constitution. Section 3 [Labor], Article XIII [Social Justice and Human Rights], 1987 Constitution. Section 8, Article III [Bill of Rights], 1987 Constitution. 4 Section 18, Article II [Declaration of Principles and State Policies], 1987 Constitution. 5 Section 3 [Labor], Article XIII [Social Justice and Human Rights], 1987 Constitution. 6 Section 8, Article III [Bill of Rights], 1987 Constitution. 7 Article 243, Labor Code; Section 2, Rule II, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003] and further amended by Department Order No. 40-C-05, Series of 2005 [March 7, 2005]; See also Article 243, Labor Code. 8 Article 243, Labor Code; FEU-Dr. Nicanor Reyes Medical Foundation, Inc. v. Trajano, G.R. No. 76273, July 31, 1987. 9 Ibid.. 1 2 3

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Under the 1987 Constitution, it is mandated that “the State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.”1 Consequently, the State is required to “guarantee the rights of all workers to self‐organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law.”2 Further, the Constitution declares that “the right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law, shall not be abridged.”3

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2 LABOR LAW: G. LABOR RELATIONS LAW Prof. Joselito Guianan Chan




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a. Persons not allowed to form, join or assist labor organizations. 1. Managerial employees; and 2. Confidential employees. b. Types of managerial employees for purposes of exercising right to self‐organization. There are 3 types of managerial employees: 1. Top Management 2. Middle Management 3. First‐Line Management (also called supervisory level)21 Top Management. – This is composed of a comparatively small group of executives. It is responsible for the overall management of the organization. It establishes operating policies and guides the organization’s interactions with A new provision inserted into the Labor Code by Section 9 of Republic Act No. 9481 (effective on June 14, 2007). Ibid.. Under Article 2 of ILO Convention No. 87 [Freedom of Association and Protection of the Right to Organize] of which the Philippines is a signatory, “workers and employers, without distinction whatsoever, shall have the right to establish and subject only to the rules of the organization concerned, job organizations of their own choosing without previous authorization.” 13 Article 2 of ILO Convention No. 98 which dwells on the Right to Organize and Collective Bargaining. 14 Article 111, Chapter 3, Title VI, P.D. No. 603, otherwise known as “The Child and Youth Welfare Code,” as amended by Presidential Decree No. 1179 which took effect on Aug. 15, 1977. 15 Section 3, Department Order No. 5, Feb. 04, 1992. 16 Section 4, Ibid.. 17 Department Order No. 18-02, Series of 2002, [Feb. 21, 2002]. 18 Cooperative Rural Bank of Davao City, Inc. v. Ferrer-Calleja, G.R. No. 77951, Sept. 26, 1988; San Jose Electric Service Cooperative, Inc. v. Ministry of Labor, G.R. No. 77231, May 31, 1989. 19 Benguet Electric Cooperative, Inc. v. Ferrer-Calleja, G.R. No. 79025, Dec. 29, 1989. 20 Central Negros Electric Corporation v. Secretary of Labor, G.R. No. 94045, Sept. 13, 1991. 21 Paper Industries Corporation of the Philippines v. Laguesma, [G.R. No. 101738, April 12, 2000]; United Pepsi-Cola Supervisory Union [UPSU] v. Laguesma, [G.R. No. 122226, March 25, 1998, 288 SCRA 15, 21-23].

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mixed membership of supervisors and rank‐and‐file employees in one union, the new rule enunciated in Article 245‐A10 of the Labor Code, unlike in the old rules, is that it cannot be invoked as a ground for the cancellation of the registration of the union. The employees so improperly included are automatically deemed removed from the list of members of said union. In other words, their removal from the said list is by operation of law. d. Rule on the right of managerial employees to join a union. As far as managerial employees are concerned, they are absolutely prohibited from forming, joining or assisting any labor unions for purposes of collective bargaining. This is also clear under Article 245 of the Labor Code.11 e. Rule on the right of alien employees to join a union. Alien employees with valid working permits issued by the Department of Labor and Employment may exercise their right to self‐organization and join or assist labor unions for purposes of collective bargaining but only if they are nationals of a country which grants the same or similar rights to Filipino workers, as certified by the Department of Foreign Affairs, or which has ratified either ILO Convention No. 8712 or ILO Convention No. 98.13 f. Rule on the right of working children to self‐organization. Working children have the same freedom as adults to join the collective bargaining union of their own choosing in accordance with existing law. Under Presidential Decree No. 603, it is clearly provided that neither management nor any collective bargaining union shall threaten or coerce working children to join, continue or withdraw as members of such union.14 g. Rule on the right of homeworkers to self‐organization. Homeworkers have the right to form, join or assist organizations of their own choosing in accordance with law.15 The registration of homeworkers’ organizations or associations following the requirements prescribed by law, will vest legal personality thereto.16 h. Rule on the right of employees of contractors to self‐organization. A contractual employee of a legitimate independent contractor is entitled to all the rights and privileges due a regular employee as provided in the Labor Code including the right to self‐organization, collective bargaining and peaceful concerted action.17 i. Rule on the right of members or employees of cooperatives to self‐organization. Members of a cooperative have no right to form or join labor organizations for purposes of collective bargaining for being themselves co‐owners of the cooperative. This prohibition covers employees of the cooperative who are at the same time members thereof.18 However, insofar as the cooperative’s employees who are not members or co‐owners thereof are concerned, they are entitled to exercise their right to self‐organization and collective bargaining as guaranteed in the Constitution and existing laws. It is the fact of ownership of the cooperative and not involvement in the management thereof which disqualifies a member from joining any labor organization within the cooperative. Thus, irrespective of the degree of their participation in the actual management of the cooperative, all members thereof cannot form, assist or join a labor organization for the purpose of collective bargaining.19 But employee‐members of a cooperative may withdraw as members of the cooperative for purposes of joining a labor union.20 3. WHO CANNOT FORM, JOIN OR ASSIST LABOR ORGANIZATIONS.





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Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., G.R. No. 162025, Aug. 3, 2010; Sugbuanon Rural Bank, Inc. v. Laguesma, G.R. No. 116194, Feb. 2, 2000. San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma, G.R. No. 110399, Aug. 15, 1997, 277 SCRA 370, 374-375. See San Miguel Corporation Supervisors and Exempt Employees Union v. Laguesma, supra; National Association of Trade Unions - Republic Planters Bank Supervisors Chapter v. Torres, G.R. No. 93468, Dec. 29, 1994, 239 SCRA 546, 560. 25 Sugbuanon Rural Bank, Inc. v. Laguesma, G.R. No. 116194, Feb. 2, 2000. 26 Standard Chartered Bank Employees Union [SCBEU-NUBE] v. Standard Chartered Bank, G.R. No. 161933, April 22, 2008; Metrolab Industries, Inc. v. Roldan-Confesor, G.R. No. 108855, Feb. 28, 1996, 254 SCRA 182; 324 Phil. 416. 22 23 24

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its environment. Typical titles of top managers are “chief executive officer,” “president,” or “senior vice‐president.” Actual titles vary from one organization to another and are not always a reliable guide to membership in the highest management classification. Middle Management. – This refers to more than one level in an organization. Middle managers direct the activities of other managers and sometimes also those of operating employees. The middle managers’ principal responsibilities are to direct the activities that implement their organization’s policies and to balance the demands of their superiors with the capacities of their subordinates. A plant manager in an electronic firm is an example of a middle manager. First‐Line Management. – This is the lowest level in an organization at which individuals are responsible for the work of others. First‐line managers direct operating employees only; they do not supervise other managers. Examples of first‐line managers are the “foreman” or production supervisor in a manufacturing plant, the technical supervisor in a research department, and the clerical supervisor in a large office. First‐level managers are often called supervisors. Based on the above classification, “managerial employees” may fall into two (2) distinct categories: namely: 1. The “managers” per se composed of top and middle managers; and 2. The “supervisors” composed of first‐line managers. Only the second above is allowed to form, join or assist a labor organization for purposes of collective bargaining. c. Confidential employee rule. Within the context of labor relations, “confidential employees” are those who meet the following criteria: (1) They assist or act in a confidential capacity; (2) To persons or officers who formulate, determine, and effectuate management policies specifically in the field of labor relations. The two (2) criteria are cumulative and both must be met if an employee is to be considered a confidential employee.22 A confidential employee may be a rank‐and‐file or supervisory employee but because in the normal course of his duties, he becomes aware of management policies relating to labor relations, he is not allowed to assist, form or join a rank‐and‐file union or supervisory union, as the case may be. His exclusion from the bargaining unit is justified under the “confidential employee rule.” To allow him to join a union would give rise to a potential conflict of interest. Management should not be required to handle labor relations matters through employees who are represented by the union with which the company is required to deal and who, in the normal performance of their duties, may obtain advance information on the company’s position with regard to collective bargaining negotiations, the disposition of grievances, or other labor relations matters.23 However, it must be stressed that the mere access of an employee to confidential labor relations information which is merely incidental to his duties and, therefore, knowledge thereof is not necessary in the performance of said duties, does not make such employee a confidential employee. If access to confidential labor relations information is to be a factor in the determination of an employee’s confidential status, such information must relate to the employer’s labor relations policies. Therefore, access to information which is regarded by the employer to be confidential from the business standpoint, such as financial information or technical trade secrets, will not render an employee a confidential employee. An employee may not be excluded from an appropriate bargaining unit merely because he has access to confidential information concerning the employer’s internal business operations which is not related to the field of labor relations.24 Thus, even a bank cashier who also serves as the secretary of the board of directors may not be classified as a confidential employee disqualified to join a union. True, the board of directors is responsible for corporate policies, the exercise of corporate powers and the general management of the business and affairs of the corporation. As secretary of the bank’s governing body, the employee serves the bank’s management, but could not be deemed to have access to confidential information specifically relating to the bank’s labor relations policies, absent a clear showing on this matter.25 The doctrine of necessary implication is the legal basis for the ineligibility of a confidential employee to join a union. The disqualification of managerial and confidential employees from joining a bargaining unit of rank‐and‐file employees or supervisory employees is already well‐entrenched in jurisprudence. While Article 245 of the Labor Code limits the ineligibility to join, assist or form a labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who, by reason of their positions or nature of work, are required to assist or act in a fiduciary manner to managerial employees and, therefore, are likewise privy to sensitive and highly confidential records.26 Article 245 of the Labor Code does not directly prohibit confidential employees from engaging in union activities. Their disqualification proceeds merely from the application of the “doctrine of necessary implication” because





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Chua v. Civil Service Commission, [G.R. No. 88979, February 7, 1992, 206 SCRA 65]. Golden Farms, Inc. v. Ferrer-Calleja, [G.R. No. 78755, July 19, 1989, 175 SCRA 471]. Philips Industrial Development, Inc. v. NLRC, [G.R. No. 88957, June 25, 1992, 210 SCRA 339]. 30 Pier 8 Arrastre & Stevedoring Services, Inc. v. Roldan-Confesor, [G.R. No. 110854, February 13, 1995, 241 SCRA 294]. 31 Metrolab Industries, Inc. v. Roldan-Confesor, [G.R. No. 108855, February 28, 1996, 254 SCRA 182; 324 Phil. 416]. 32 San Miguel Corporation Supervisors and Exempt Employees Union v. Laguesma, G.R. No. 110399, Aug. 15, 1997, 277 SCRA 370; National Association of Trade Unions - Republic Planters Bank Supervisors Chapter v. Torres, G.R. No. 93468, Dec. 29, 1994, 239 SCRA 546, 560. 33 Article 277 [c], Labor Code; No. 10, Basic Amendments under R. A. 6715, prepared by Members of the Senate-House Conference Committee of Congress. 34 Southern Philippines Federation of Labor (SPFL) v. Calleja, G.R. No. 80882, April 24, 1989, 172 SCRA 676. 35 Enunciated in Atlas Lithographic Services, Inc. v. Laguesma, [G.R. No. 96566, January 6, 1992]; Coastal Subic Bay Terminal, Inc. v. Department of Labor and Employment-Office of the Secretary, [G.R. No. 157117, November 20, 2006] and in other related cases. 36 Section 8 of Republic Act No. 9481 [effective June 14, 2007]. 27 28 29

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what Article 245 singles out as ineligible to join, assist or form any labor organization are managerial employees. By necessary implication, confidential employees are similarly disqualified. This doctrine states that what is implied in a statute is as much a part thereof as that which is expressed.27 Simply stated, in the collective bargaining process, managerial employees are supposed to be on the side of the employer to act as its representatives and to see to it that its interests are well protected. The employer is not assured of such protection if managerial employees themselves are union members. Collective bargaining in such a situation can become one‐sided. It is the same reason why the positions of confidential employees are included in the disqualification found in Article 245 as if such disqualification was written in the provision. If confidential employees could unionize in order to bargain for advantages for themselves, then they could be governed by their own motives rather than the interest of the employer. Moreover, unionization of confidential employees for the purpose of collective bargaining would mean the extension of the law to persons or individuals who are supposed to act “in the interest of” the employers. It is not far‐fetched that in the course of the collective bargaining negotiations, they might jeopardize that interest which they are duty‐bound to protect. d. Cases where confidential employees were not allowed to join unions. Based on jurisprudence, the following are considered confidential employees under the confidential employee rule: 1. Accounting personnel and radio and telegraph operators;28 2. Division secretaries, all Staff of General Management, Personnel and Industrial Relations Department, Secretaries of Audit, EDP and Financial Systems;29 3. Legal secretaries who are tasked with, among others, the typing of legal documents, memoranda and correspondence, the keeping of records and files, the giving of and receiving notices, and such other duties as required by the legal personnel of the corporation, fall under the category of confidential employees and, hence, excluded from the bargaining unit composed of rank‐and‐file employees.30 4. Executive secretaries of the General Manager and the executive secretaries of the Quality Assurance Manager, Product Development Manager, Finance Director, Management System Manager, Human Resources Manager, Marketing Director, Engineering Manager, Materials Manager and Production Manager were also considered confidential employees since they have access to “vital labor information.”31 e. Cases where confidential employees were allowed to join unions. Confidential employees are not completely prohibited from joining unions. This is the correct view since confidential employees are allowed to join unions in some cases. For instance, in Southern Philippines Federation of Labor v. Ferrer‐Calleja, [G.R. No. 80882, April 24, 1989, 172 SCRA 676], the inclusion of the confidential rank‐and‐file employees in the bargaining unit of rank‐and‐file employees was upheld by the Supreme Court. Much earlier, the High Court proclaimed in Filoil Refinery Corporation v. Filoil Supervisory and Confidential Employees Association, [G.R. No. L‐26736, August 18, 1972], that confidential rank‐and‐ file employees may join the union of supervisors, especially in a situation where the confidential employees are very few in number and are, by practice and tradition, identified with the supervisors in their role as representatives of management vis‐à‐vis the rank‐and‐file employees. Such identity of interest has allowed their inclusion in the bargaining unit of supervisors for purposes of collective bargaining. They remain employees in relation to the company as their employer. This identity of interest logically calls for their inclusion in the same bargaining unit and at the same time fulfills the law’s objective of insuring to them the full benefit of their right to self‐organization and to collective bargaining which could hardly be accomplished if the respondent association’s membership were to be broken up into five separate ineffective tiny units. Jurisprudence, therefore, has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union.32 f. Some principles on the right to self‐organization. 1. Any employee, whether employed for a definite period or not, shall, beginning on the first day of his service, be eligible for membership in any labor organization. 33 2. Right to join a union cannot be made subject of a CBA stipulation.34 3. The separation of unions doctrine35 has already been rendered nugatory by the latest amendment of Article 245 of the Labor Code introduced by R. A. No. 948136 by adding the phrase: “The rank‐and‐file union and the supervisors’ union operating within the same establishment may join the same federation or national union.” This doctrine prohibits the situation where the supervisory union and the rank‐and‐file union operating within the same establishment are both affiliated with one and the same federation because of the possible conflict of interest which may arise in the areas, inter alia, of discipline, collective bargaining and strike.





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Article 244, Labor Code. See Section 13, Executive Order No. 180, June 01, 1987; Sections 1, 2, 3 and 4, Rule III and Section 1, Rule VIII, Rules and Regulations to Govern the Exercise of the Right of Government Employees to Self-Organization. Sections 1 and 2, Executive Order No. 180, June 01, 1987; Sections 1 and 2, Rule II, Rules and Regulations to Govern the Exercise of the Right of Government Employees to Self-Organization. 40 Section 3, Executive Order No. 180, June 01, 1987; Section 2, Rule II, Ibid.. 41 Section 4, Executive Order No. 180; Section 1, Rule II, Ibid.; See also Chapter 6, Book V, Administrative Code of 1987 [Executive Order No. 292]. 42 Home Development Mutual Fund v. Commission on Audit, G.R. No. 142297, June 15, 2004 citing Association of Dedicated Employees of the Philippine Tourism Authority [ADEPT] v. Commission on Audit, G.R. No. 119597, Sept. 11, 1998, 295 SCRA 366. 43 Section 13, Executive Order No. 180, June 01, 1987; Section 1, Rule VIII, Ibid.. 44 Section 2, Rule VIII, Rules and Regulations to Govern the Exercise of the Right of Government Employees to Self-Organization. 37 38 39

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4. EXECUTIVE ORDER NO. 180, SERIES OF 1987 [JUNE 01, 1987] ENUNCIATING THE RIGHT TO SELF‐ORGANIZATION OF GOVERNMENT EMPLOYEES. a. 2 kinds of employees in the government sector for purposes of exercise of right to self‐organization. 1. Employees of government corporations established under the Corporation Code and, therefore, without original charters. They are covered by the Labor Code. They have the right to join, assist or form labor organizations of their own choosing and to bargain collectively with their respective employers in the same manner as employees in the private sector do.37 2. Employees in the government, including any political subdivision or instrumentality thereof and government‐owned and/or controlled corporations with original charters. This explains why the Civil Service Law, rules and regulations, and not the Labor Code, govern their employment. Their right to self‐ organize is governed by Executive Order No. 180, Series of 1987 [June 01, 1987] issued by Pres. Corazon C. Aquino.38 b. Who may join government employees’ organizations for purposes of collective bargaining? All rank‐and‐file employees of all branches, subdivisions, instrumentalities, and agencies of government, including government‐owned and/or controlled corporations with original charters, can form, join or assist employees’ organizations of their own choosing for the furtherance and protection of their interests.39 c. Who are not eligible to join government employees’ organizations for purposes of collective bargaining? The following are not eligible to form employees’ organizations: 1. High‐level employees whose functions are normally considered as policy‐making or managerial or whose duties are of a highly confidential nature are not eligible to join the organization of rank‐and‐file government employees;40 2. Members of the Armed Forces of the Philippines; 3. Police officers; 4. Policemen; 5. Firemen; and 6. Jail guards.41 d. Right to collectively bargain with the employer. Only workers in private corporations and government‐owned and/or controlled corporations, incorporated under the general corporation law (Corporation Code), have the right to bargain collectively. Those in government corporations with original charters which are subject to Civil Service Laws, have no right to bargain collectively, except where the terms and conditions of employment are not fixed by law. Their rights and duties are not comparable with those in the private sector.42 e. Terms and conditions subject to negotiation. The terms and conditions of employment or improvements thereof, except those that are fixed by law, may be the subject of negotiations between duly recognized employees’ organizations and appropriate government authorities.43 The following concerns, among others, may be the subject of negotiation between the employer and the accredited employees’ organization: a. Schedule of vacation and other leaves; b. Work assignment of pregnant women; c. Personnel growth and development; d. Communication system ‐ lateral and vertical; e. Provision for protection and safety; f. Provision for facilities for handicapped personnel; g. Provision for first aid medical services and supplies; h. Physical fitness program; i. Provision for family planning services for married women; j. Annual medical/physical examination; k. Recreational, social, athletic and cultural activities and facilities.44 f. Matters not subject to negotiation. Matters not subject to negotiation may be classified as follows: a. Those that require appropriation of funds; and b. Those that involve the exercise of management prerogatives. Those that require appropriation of funds, such as the following, are not negotiable:





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a. Increase in salary emoluments and other allowances not presently provided by law; b. Facilities requiring capital outlays; c. Car plan; d. Provident fund; e. Special hospitalization, medical and dental services; f. Rice/sugar/other subsidies; g. Travel expenses; h. Increase in retirement benefits.45

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Section 3, Rule VIII, Ibid.. Section 4, Rule VIII, Ibid.. Section 5, Rule VIII, Ibid.. 48 Section 1 [h], Rule I, Ibid.. 49 Section 1 [i], Rule I, Ibid.. 50 Section 1 [j], Rule I, Ibid.. 51 Section 9, Executive Order No. 180. 52 Sections 4 and 5, Rule IV, Ibid.. 53 Section 10, Executive Order No. 180. 54 Section 11, Ibid.. 55 Section 12, Ibid... 56 Section 17, Rule VI, Ibid.. 57 CSC Memorandum Circular No. 6, s. 1987, [April 21, 1987] promulgated by the Civil Service Commission categorically prohibits all government officials and employees from staging strikes, demonstrations, mass leaves, walk-outs and other forms of mass action which will result in the temporary stoppage or disruption of public services. Allowing them to strike or conduct the said prohibited acts is to undermine or prejudice the government system. Executive Order No. 180, [June 1, 1987], which provides the guidelines on the exercise of the right of government workers to organize, implicitly endorsed said CSC Memorandum Circular No. 6, s. 1987, dated April 21, 1987 [supra] by stating that the Civil Service Law and rules governing concerted activities and strikes in the government service shall be observed. (Jacinto v. Hon. CA, G.R. No. 124540. Nov. 14, 1997). 45 46

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Those that involve the exercise of management prerogatives, such as the following, are likewise not subject to negotiation: a. Appointment; b. Promotion; c. Assignment/detail; d. Reclassification/upgrading of positions; e. Revision of the compensation structure; f. Penalties imposed as a result of disciplinary actions; g. Selection of personnel to attend seminars, trainings or study grants; h. Distribution of work load; i. External communication linkages.46 The parties may submit proposals to the proper authorities to improve the terms and conditions of their employment.47 g. Some principles on government employees’ right to self‐organization. 1. The labor organization in the government sector is technically called an “employees’ organization.”48 2. Registration of employees’ organizations is made with both Civil Service Commission (CSC) and the Bureau of Labor Relations (BLR) of the Department of Labor and Employment (DOLE). Once registered, it is technically called a “registered employees’ organization.”49 In the private sector, this is theoretically known as a “legitimate labor organization.” Cancellation of registration of an employees’ organization is likewise made by both the CSC and the BLR. 3. The sole and exclusive bargaining union is called an “accredited employees’ organization.”50 In the private sector, this is in principle known as a “recognized or certified collective bargaining agent.” 4. The unit where the government employees’ organization seeks to operate and represent is called “organizational unit.” It is the employer’s unit consisting of rank‐and‐file employees unless circumstances otherwise require.51 In the private sector, this is technically known as “bargaining unit.” 5. Rights and privileges of a registered employees’ organization. Upon the issuance of the certificate of registration, the employees’ organization shall have the following rights and privileges: a. To be certified, subject to the conditions prescribed in the Rules and Regulations to Govern the Exercise of the Right of Government Employees to Self‐Organization, as the sole representative of the rank‐and‐ file employees with the right to negotiate for them. b. To undertake all other activities not contrary to law or public policy for the furtherance and protection of the interests of its members.52 6. Selection of the sole and exclusive representative. The duly registered employees’ organization having the support of the majority of the employees in the appropriate organizational unit should be designated as the sole and exclusive representative of the employees.53 It is designated as such through modes similar to private sector’s selection of sole and exclusive bargaining agent through any of the following 3 modes: a. Voluntary recognition upon a showing that no other employees’ organization is registered or is seeking registration in the organizational unit, based on the records of the BLR, and that the said organization has the majority support of the rank‐and‐file employees in the organizational unit.54 b. Certification election.55 c. Run‐off election in cases where there are at least three (3) contending organizations and none received a majority of the valid votes cast. Only the two (2) registered employees’ organizations receiving the largest and second largest number of votes in the first voting shall be voted on.56 7. The right to strike is absolutely prohibited in the government sector.57





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59 60

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Section 1, Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. Dunlop Slazenger [Phils.], Inc. v. Secretary of Labor and Employment, G.R. No. 131248, Dec. 11, 1998, 300 SCRA 120, 125-126. Democratic Labor Association v. Cebu Stevedoring Co., Inc., G.R. No. 10321, Feb. 28, 1958. 61 International School Alliance of Educators [ISAE] v. Quisumbing, [G.R. No. 128845, June 1, 2000]. 62 San Miguel Corporation Employees Union-PTGWO v. Confesor, G.R. No. 111262, Sept. 19, 1996, 262 SCRA 81, 98. 58

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=================================== TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 1. Right to Self-organization b. Bargaining unit (1) Test to determine the constituency of an appropriate bargaining unit =================================== 1. BARGAINING UNIT. a. Bargaining unit, meaning. A “bargaining unit” refers to a group of employees sharing mutual interests within a given employer unit, comprised of all or less than all of the entire body of employees in the employer unit or any specific occupational or 58 geographical grouping within such employer unit. It may also refer to the group or cluster of jobs or positions within the employer’s establishment that supports the labor organization which is applying for registration. It is a legal collectivity for collective bargaining purposes whose members have substantially mutual bargaining interests in the terms and conditions of employment as will ensure to all employees their collective bargaining rights. To be appropriate, a bargaining unit must involve a grouping of employees who have substantial, mutual interests in wages, hours of work, working conditions and other subjects of collective bargaining.59 There is no hard and fast rule in determining an appropriate bargaining unit. The test whether the designation of a bargaining unit is appropriate is whether it will best assure to all employees the exercise of their collective bargaining rights. There should be a community of interest which should be reflected in groups having substantial similarity of work and duties or similarity of compensation and working conditions, among other criteria.60 b. Tests in determining an appropriate bargaining unit. Based on jurisprudence,61 there are certain principles which may be used in determining the appropriate collective bargaining unit, to wit: (1) Substantial mutual interest doctrine; (2) Globe doctrine; (3) Collective bargaining history doctrine; and (4) Employment status doctrine. 2. SUBSTANTIAL MUTUAL INTEREST PRINCIPLE. Under this principle, the employees sought to be represented by the collective bargaining agent must have substantial mutual interest in terms of employment and working conditions as evinced by the type of work they perform. It is characterized by similarity of employment status, same duties and responsibilities and substantially similar compensation and working conditions.62 San Miguel Corporation v. Laguesma, [G.R. No. 100485, September 21, 1994]. The Supreme Court applied this principle in a petition of the union which seeks to represent the sales personnel in the various Magnolia sales offices in Northern Luzon. Petitioner took the position that each sales office should constitute one bargaining unit. In disagreeing with this proposition of petitioner, the High Court said: “What greatly militates against this position (of the company) is the meager number of sales personnel in each of the Magnolia sales office in Northern Luzon. Even the bargaining unit sought to be represented by respondent union in the entire Northern Luzon sales area consists only of approximately fifty‐five (55) employees. Surely, it would not be for the best interest of these employees if they would further be fractionalized. The adage ‘there is strength in number’ is the very rationale underlying the formation of a labor union.” San Miguel Corporation Supervisors and Exempt Employees Union v. Laguesma, [G.R. No. 110399, August 15, 1997, 277 SCRA 370, 380‐381]. The fact that the three (3) plants comprising the bargaining unit are located in three (3) different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga, was declared immaterial. Geographical location can be completely disregarded if the communal or mutual interest of the employees are not sacrificed. University of the Philippines v. Ferrer‐Calleja, [G.R. No. 96189, July 14, 1992, 211 SCRA 451]. All non‐academic rank‐and‐file employees of the University of the Philippines in Diliman, Quezon City, Padre Faura, Manila, Los Banos, Laguna and the Visayas were allowed to participate in a certification election as one bargaining unit. The distance among the three (3) plants is not productive of insurmountable difficulties in the administration of





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See also Mechanical Department Labor Union sa Philippine National Railways v. CIR, G. R. No. L-28223, Aug. 30, 1968. San Miguel Corporation v. Laguesma, infra; National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union, infra. Rothenberg on Labor Relations, pp. 482-510. 66 Philips Industrial Development, Inc. v. NLRC, G.R. No. 88957, June 25, 1992; Golden Farms, Inc. v. Ferrer-Calleja, G.R. No. 78755, July 19, 1989, 175 SCRA 471. 67 Bulletin Publishing Co., v. Sanchez, G.R. No. 74425, Oct. 7, 1986, 144 SCRA 628. 63

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union affairs. Neither are there regional differences that are likely to impede the operations of a single bargaining representative. St. James School of Quezon City v. Samahang Manggagawa sa St. James School of Quezon City, [G.R. No. 151326, November 23, 2005]. Respondent union sought to represent the rank‐and‐file employees (consisting of the motor pool, construction and transportation employees) of petitioner‐school’s Tandang Sora campus. Petitioner‐school opposed it by contending that the bargaining unit should not only be composed of said employees but must include administrative, teaching and office personnel in its five (5) campuses. The Supreme Court disagreed with said contention. The motor pool, construction and transportation employees of the Tandang Sora campus had 149 qualified voters at the time of the certification election, hence, it was ruled that the 149 qualified voters should be used to determine the existence of a quorum during the election. Since a majority or 84 out of the 149 qualified voters cast their votes, a quorum existed during the certification election. The computation of the quorum should be based on the rank‐and‐file motor pool, construction and transportation employees of the Tandang Sora campus and not on all the employees in petitioner’s five (5) campuses. Moreover, the administrative, teaching and office personnel are not members of the union. They do not belong to the bargaining unit that the union seeks to represent. 3. GLOBE DOCTRINE. This principle is based on the will of the employees. It is called Globe doctrine because this principle was first enunciated in the United States case of Globe Machine and Stamping Co., [3 NLRB 294 (1937)] where it was ruled, in defining the appropriate bargaining unit, that in a case where the company’s production workers can be considered either as a single bargaining unit appropriate for purposes of collective bargaining or as three (3) separate and distinct bargaining units, the determining factor is the desire of the workers themselves. Consequently, a certification election should be held separately to choose which representative union will be chosen by the workers.63 International School Alliance of Educators [ISAE] v. Quisumbing, [G.R. No. 128845, June 1, 2000]. The Supreme Court ruled that foreign‐hired teachers do not belong to the bargaining unit of the local‐hires because the former have not indicated their intention to be grouped with the latter for purposes of collective bargaining. Moreover, the collective bargaining history of the school also shows that these groups were always treated separately. 4. COLLECTIVE BARGAINING HISTORY DOCTRINE. This principle puts premium to the prior collective bargaining history and affinity of the employees in determining the appropriate bargaining unit. However, the existence of a prior collective bargaining history has been held as neither decisive nor conclusive in the determination of what constitutes an appropriate bargaining unit.64 National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union, [G.R. No. 79526, December 21, 1990]. It was ruled here that there is mutuality of interest among the workers in the sawmill division and logging division as to justify their formation of a single bargaining unit. This holds true despite the history of said two divisions being treated as separate units and notwithstanding their geographical distance from each other. San Miguel Corporation v. Laguesma, [G.R. No. 100485, September 21, 1994]. Despite the collective bargaining history of having a separate bargaining unit for each sales office, the Supreme Court applied the principle of mutuality or commonality of interests in holding that the appropriate bargaining unit is comprised of all the sales force in the whole of Northern Luzon. 5. EMPLOYMENT STATUS DOCTRINE. The determination of the appropriate bargaining unit based on the employment status of the employees is considered an acceptable mode.65 For instance, casual employees and those employed on a day‐to‐day basis, according to the Supreme Court in Philippine Land‐Air‐Sea Labor Union v. CIR, [G.R. No. L‐14656, November 29, 1960], do not have the mutuality or community of interest with regular and permanent employees. Hence, their inclusion in the bargaining unit composed of the latter is not justified. Confidential employees, by the very nature of their functions, assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to them. Hence, they cannot be allowed to be included in the rank‐and‐file employees’ bargaining unit.66 The rationale for this inhibition is that if these managerial employees would belong to or be affiliated with a union, the latter might not be assured of their loyalty to the union in view of evident conflict of interest. The union can also become company‐dominated with the presence of managerial employees in its membership.67





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See also Democratic Labor Association v. Cebu Stevedoring Co., Inc., G.R. No. 10321, Feb. 28, 1958, 103 Phil. 1103. Section 2, Rule VI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. Not found in the Labor Code nor in its Implementing Rules but mentioned in the Syllabus for Labor Law. 71 Section 1 [bbb], Rule I, Book V, Ibid.. 72 Section 1, Rule VII, Book V, Ibid.. 68

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Belyca Corporation v. Ferrer‐Calleja, [G.R. No. 77395, November 29, 1988]. This involves a corporation engaged in piggery and poultry raising, planting of agricultural crops and operation of supermarts and cinemas, the Supreme Court ruled that it is beyond question that the employees of the livestock‐agro division of the corporation perform work entirely different from those being performed by employees in the supermarts and cinemas. The differences among them lie in their working conditions, hours of work, rates of pay, including the categories of their positions and employment status. As stated by petitioner in its position paper, due to the nature of the business in which its livestock‐agro division is engaged, very few of its employees therein are permanent, the overwhelming majority of whom are seasonal and casual and not regular employees. Definitely, they have very little in common with the employees of the supermarts and cinemas. To lump all its employees in its integrated business concerns cannot result in an efficacious bargaining unit comprised of constituents enjoying a community or mutuality of interest. Undeniably, the rank‐and‐file employees of the livestock‐agro division fully constitute a bargaining unit that satisfies both requirements of classification according to employment status and of substantial similarity of work and duties which will ultimately assure its members the exercise of their collective bargaining rights.68 ========================================== TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 1. Right to Self-organization b. Bargaining agent (1) Voluntary Recognition (a) Requirements (2) Certification election (a) In an unorganized establishment (b) In an organized establishment (c) Rules prohibiting the filing of petition for certification election (d) Requirements for validity of certification election (e) Protests and other questions arising from conduct of certification election (3) Run-off election (a) Requirements (4) Re-run election (5) Consent election ========================================== 1. MODES OF DETERMINING THE SOLE AND EXCLUSIVE BARGAINING AGENT. The sole and exclusive bargaining agent of the employees in a bargaining unit may be determined through any of the following modes: 1. Voluntary recognition; 2. Certification election; 3. Consent election; 69 4. Run‐off election; 70 5. Re‐run election. 2. VOLUNTARY RECOGNITION. a. Voluntary recognition, defined. “Voluntary recognition” refers to the process by which a legitimate labor union is voluntarily recognized by the employer as the exclusive bargaining representative or agent in a bargaining unit and reported as such with the Regional 71 Office in accordance with Rule VII, Section 2, Book V of the Rules to Implement the Labor Code. b. Voluntary recognition, when proper. Voluntary recognition is proper only in cases where there is only one legitimate labor organization existing and operating in a bargaining unit. It cannot be done in case there are two or more unions in contention. c. Notice of voluntary recognition, when and where filed. Within thirty (30) days from such voluntary recognition, the employer and the union should submit a notice of voluntary recognition to the DOLE Regional Office which issued the recognized labor union’s certificate of registration or, in the case of local chapter, where the charter certificate and the other documents required under Article 234‐A were submitted and filed.72





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Section 2, Rule VII, Book V, Ibid.. Section 1 [h], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. Philippine Airlines Employees’ Association v. Ferrer-Calleja, G.R. No. 76673, June 22, 1988. 76 Associated Labor Unions v. Ferrer-Calleja, G.R. No. 82260, July 19, 1989; Modern Fishing Gear Labor Union v. Noriel, G.R. No. 53907, May 6, 1988. 77 National Federation of Labor v. The Secretary of Labor, G.R. No. 104556, March 9, 1998. 78 Articles 256 and 257, Labor Code, as amended by R. A. No. 9481 [effective on June 14, 2007].. 79 Article 258, Labor Code; Section 1, Rule VIII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 80 PAFLU v. Bureau of Labor Relations, G.R. No. L-43760, Aug. 21, 1976, 72 SCRA 396. 81 Progressive Development Corp. – Pizza Hut v. Laguesma, [G.R. No. 115077, April 18, 1997, 271 SCRA 593]. 82 Tagaytay Highlands International Golf Club Inc. v. Tagaytay Highlands Employees Union-PGTWO, G.R. No. 142000, Jan. 22, 2003. 73 74 75

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d. Requirements for voluntary recognition. The notice of voluntary recognition should be accompanied by the original copy and two (2) duplicate copies of the following documents: (a) A joint statement under oath attesting to the fact of voluntary recognition; (b) Certificate of posting of the joint statement of voluntary recognition for fifteen (15) consecutive days in at least two (2) conspicuous places in the establishment or bargaining unit where the union seeks to operate; (c) The approximate number of employees in the bargaining unit, accompanied by the names of those who support the voluntary recognition comprising at least a majority of the members of the bargaining unit; and (d) A statement that the labor union is the only legitimate labor organization operating within the bargaining unit. It is further required that all accompanying documents of the notice of voluntary recognition should be certified under oath by the employer‐representative and president of the recognized labor union.73 e. Voluntary recognition of a union made during pendency of a petition for certification election filed by another union, not valid. The voluntary recognition by the employer of a union while a petition for certification election filed by a rival union is pending does not have any valid effect. Thus, it was held in Me‐Shurn Corporation v. Me‐Shurn Workers Union – FSM, [G.R. No. 156292, January 11, 2005], that the results of the certification election where the petitioner‐union lost cannot be said to constitute a repudiation by the affected employees of said union’s right to represent them, in view of the discriminatory acts committed by the employer against the said union prior to the holding of the certification election ‐ acts that included the employer’s immediate grant of exclusive recognition to another union as a bargaining agent despite the pending petition for certification election. 3. CERTIFICATION ELECTION, IN GENERAL (ARTICLES 256 AND 257, LABOR CODE). a. Certification election, meaning. “Certification election” refers to the process of determining through secret ballot the sole and exclusive bargaining agent of the employees in an appropriate bargaining unit for purposes of collective bargaining or negotiations. A certification election is conducted only upon the order of the Med‐Arbiter of the Bureau of Labor Relations (BLR) of the Department of Labor and Employment (DOLE).74 It is the most democratic method of determining the choice of the employees of their bargaining representative.75 It is not a litigation proceeding in the sense in which this term is commonly understood. It is a mere investigation of a non‐adversary fact‐finding character in which the Department of Labor and Employment plays the part of a disinterested investigator seeking merely to ascertain the desires of the employees as to the matter of representation. It is not, therefore, bound by the technical rules of evidence.76 In case of doubt, the petition should be resolved in favor of the holding of a certification election.77 b. Who may file a petition for certification election. A petition for certification election may be filed by: 1. a legitimate labor organization which may be: (a) an independent union; or (b) a national union or federation which has already issued a charter certificate to its local chapter participating in the certification election; or (c) a local chapter which has been issued a charter certificate by the national union or federation. 78 2. an employer, when requested by a labor organization to bargain collectively and its majority status is in doubt.79 c. Majority vote, meaning. Absolute majority of all the members of the bargaining unit is not required in order for a union to be validly certified as the exclusive bargaining agent. Majority of the ballots cast would be sufficient, even if only a small proportion of the eligible voters participated in the certification election.80 d. Some principles on certification election, in general. 1. The petitioning union should be legitimate.81 The acquisition of rights by any union or labor organization, particularly the right to file a petition for certification election, first and foremost, depends on whether or not the labor organization has attained the status of a legitimate labor organization.82 2. The delay in the issuance of the certificate of registration to a union participating in a certification election case may effectively prevent the conduct thereof. However, where it is shown that such delay was not





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b. Written consent of at least 25% of all the employees in the bargaining unit. The 25% requirement may not be strictly enforced. Compliance therewith need not be established with absolute certainty. Even if the statutory requirement of 25% of the labor force asking for certification election has not U. E. Automotive Employees and Workers Union v. Noriel, G.R. No. L-44350, Nov. 25, 1978; Samahan ng Manggagawa sa Union Industries, Inc. v. Noriel, G.R. No. L-50874, Oct. 23, 1981. National Union of Bank Employees v. Minister of Labor, G.R. No. L-53406, Dec. 14, 1981, 110 SCRA 274. Pepsi-Cola Products Philippines, Inc. v. Hon. Secretary of Labor, G.R. No. 96663 and Pepsi-Cola Products Philippines, Inc. v. Office of the Secretary, Department of Labor and Employment, G.R. No. 103300, Aug. 10, 1999. 86 As inserted by Section 4, Republic Act No. 9481, June 14, 2007. 87 Barrera v. CIR, G,R, No. L-32853, Sept. 25, 1981, 107 SCRA 596. 88 United CMC Workers Union v. Bureau of Labor Relations, G.R. No. L-51337, March 22, 1984; Acoje Mines Employees v. Acoje Labor Union, G.R. No. L-11273, Nov. 21, 1958; 104 Phil. 814; Standard Cigarette v. CIR, G.R. No. L-9908, April 22, 1957, 101 Phil. 126. 89 See Article 248 [d], Labor Code. 90 Samahang Manggagawa sa Permex [SMP-PIILU-TUCP] v. Secretary of Labor, G.R. No. 107792, March 2, 1998, 286 SCRA 692; Central Negros Electric Cooperative v. Secretary of Labor and Employment, G.R. No. 94045, Sept. 13, 1991, 201 SCRA 591. 91 Western Agusan Workers Union v. Trajano, G.R. No. 75724, May 6, 1991; Colgate-Palmolive Philippines, Inc. v. Ople, G.R. No. 73681, June 30, 1988. 92 International Catholic Migration Commission v. Calleja, G.R. No. 85750, Sept. 28, 1990; Kapisanan ng Manggagawa at TAC sa IRRI-Organized Labor Association in Line Industries and Agriculture v. Secretary of Labor, G.R. No. 89331, Sept. 28, 1990. 93 Article 253, Labor Code. 94 California Manufacturing Corporation v. Laguesma, G.R. No. 97020, June 8, 1992. 95 Article 257, Labor Code, as amended by Section 24, Republic Act No. 6715, March 21, 1989; Section 1, Rule VIII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; Furusawa Rubber Philippines, Inc. v. Secretary of Labor and Employment, G.R. No. 121241, Dec. 10, 1997, 282 SCRA 635. 96 Trade Unions of the Philippines and Allied Services World Federation of Trade Unions [TUPAS-WFTU] v. Laguesma, G.R. No. 102350, June 30, 1994. 83 84

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3.1. CERTIFICATION ELECTION IN AN UNORGANIZED ESTABLISHMENT (ARTICLE 257, LABOR CODE). a. Unorganized establishment, meaning. As distinguished from “organized establishment,” an “unorganized establishment” is a firm or company where there is no recognized or certified collective bargaining union or agent.93 A firm or company, however, may still be considered an unorganized establishment even if there are unions in existence therein for as long as not one of them is duly recognized or certified as the sole and exclusive bargaining representative of the employees in the bargaining unit it seeks to operate and represent. Further, a firm or company remains unorganized even if there is a duly recognized or certified bargaining agent for rank‐and‐file employees, for purposes of the petition for certification election filed by supervisors. The reason is that the bargaining unit composed of supervisors is separate and distinct from the unionized bargaining unit of rank‐and‐file employees. Hence, being unorganized, the 25% required minimum support of employees within the bargaining unit of the supervisors need not be complied with.94 b. “Automatic” conduct of a certification election upon filing of the petition for certification election. In case of a petition filed by a legitimate organization involving an unorganized establishment, the Med‐Arbiter is required to immediately order the conduct of a certification election upon filing of a petition for certification election by a legitimate labor organization.95 The twenty‐five percent (25%) minimum support of the employees in the bargaining unit which is required in “organized establishments” is not necessary in the case of “unorganized establishments.” The obvious purpose is to make it easy for employees to self‐organize ‐ a policy which is enunciated in the Constitution and labor laws. 3.2. CERTIFICATION ELECTION IN AN ORGANIZED ESTABLISHMENT (ARTICLE 256, LABOR CODE). a. Requisites for the conduct of a certification election in an organized establishments. Under Article 256, the Med‐Arbiter is required to automatically order the conduct of a certification election by secret ballot in an organized establishment as soon as the following requisites are fully met: 1. That a petition questioning the majority status of the incumbent bargaining agent is filed before the DOLE within the 60‐day freedom period; 2. That such petition is verified; and 3. That the petition is supported by the written consent of at least twenty‐five percent (25%) of all the employees in the bargaining unit.96

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because of its fault but due mainly to its rivalry with other unions, it shall not stay the conduct of the certification election. Mandamus will lie to compel the issuance of such certificate of registration.83 3. The pendency of a petition to cancel the certificate of registration of a union participating in a certification election does not stay the conduct thereof.84 The rationale behind this is that at the time the union filed its petition, it still had the legal personality to perform such act absent any order directing the cancellation.85 Moreover, it is now provided under Article 238‐A of the Labor Code that a petition for cancellation of union registration does not suspend the proceedings for certification election nor does it prevent the filing of a petition for certification election. In case of cancellation, nothing in the law could restrict the right of the union to seek just and equitable remedies in the appropriate courts.86 4. As a general rule, the pendency of an unfair labor practice case filed against a labor organization participating in the certification election does not stay the holding thereof.87 But the pendency of a formal charge of company domination against one of the unions which is participating in the certification election is a prejudicial question that bars the holding thereof until its final resolution.88 “Company domination” means that the employer has either initiated, dominated, assisted or otherwise interfered with the formation or administration of the union, including the giving of financial or other support to it or its organizers or supporters.89 5. Direct certification as a method of selecting the exclusive bargaining agent of the employees is not allowed.90 This is because the conduct of a certification election is still necessary in order to arrive in a manner definitive and certain concerning the choice of the labor organization to represent the workers in a collective bargaining unit.91 6. No certification election in entities immune from suit is allowed.92





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California Manufacturing Corporation v. Laguesma, G.R. No. 97020, June 8, 1992; Atlas Free Workers Union-PSSLU Local v. Noriel, G.R. No. L-51905, May 26, 1981, 104 SCRA 565; Kapisanan ng mga Manggagawa sa La Suerte-FOITAF v. Noriel, G.R. No. L-45475, June 20, 1977, 77 SCRA 414. Section 3, Rule VIII, Book V, Rules to Implement the Labor Code. 99 Section 3 [a], Rule VIII, Book V, Ibid.. 100 Section 3 [a], Rule VIII, Book V, Ibid.. 101 Section 3 [b] and [c], Rule VIII, Book V, Ibid.; National Congress of Unions in the Sugar Industry of the Philippines-TUCP v. Trajano, G.R. No. 67485, April 10, 1992. 97

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been strictly complied with, the Med‐Arbiter is still empowered to order its conduct for the purpose of ascertaining which of the contending labor organizations should be chosen as the exclusive bargaining agent.97 4. RULES PROHIBITING THE FILING OF A PETITION FOR CERTIFICATION ELECTION. a. When filing of a petition for certification election allowed. The general rule is that in the absence of a CBA duly registered in accordance with Article 231 of the Labor Code, a petition for certification election may be filed at any time.98 b. Rules prohibiting the filing of a petition for certification election (Bar Rules). No certification election may be held under the following rules: 1. Certification year bar rule; 2. Negotiations bar rule; 3. Bargaining deadlock bar rule; or 4. Contract bar rule. 4.1. CERTIFICATION YEAR BAR RULE. Under this rule, a petition for certification election may not be filed within one (1) year: 1. from the date the fact of voluntary recognition has been entered; or 2. from the date a valid certification, consent or run‐off election has been conducted within the bargaining unit.99 Where an appeal has been filed from the order of the Med‐Arbiter certifying the results of the election, the running of the one (1) year period shall be suspended until the decision on the appeal has become final and executory.100 4.2. NEGOTIATIONS BAR RULE. Under this rule, no petition for certification election should be entertained while the sole and exclusive bargaining agent and the employer are in the process of negotiating the CBA. While the parties are negotiating the terms and conditions of the CBA, no challenging union should be allowed to disturb the process as would unduly forestall the early conclusion of the agreement. 4.3. BARGAINING DEADLOCK BAR RULE. Under this rule, a petition for certification election may not be entertained: 1. When the duly certified bargaining agent has commenced and sustained negotiations in good faith with the employer in accordance with Article 250 of the Labor Code within a period of one (1) year from the date of a valid certification, consent or run‐off election or from the date of voluntary recognition; or 2. When a bargaining deadlock to which an incumbent or certified bargaining agent is a party has been submitted to conciliation or arbitration or has become the subject of a valid notice of strike or lockout.101 Kaisahan ng Manggagawang Pilipino [KAMPIL‐KATIPUNAN] v. Trajano, [G.R. No. 75810, September 9, 1991, 201 SCRA 453]. The bargaining deadlock‐bar rule was not applied because for more than four (4) years after it was certified as the exclusive bargaining agent of all the rank‐and‐file employees, it did not take any action to legally compel the employer to comply with its duty to bargain collectively, hence, no CBA was executed. Neither did it file any unfair labor practice suit against the employer nor did it initiate a strike against the latter. Under the circumstances, a certification election may be validly ordered and held. Capitol Medical Center Alliance of Concerned Employees‐Unified Filipino Service Workers v. Laguesma, [G.R. No. 118915, February 4, 1997, 267 SCRA 503]. The bargaining deadlock‐bar rule was applied in this case. Distinguishing this case from that of Kaisahan [supra], the High Court cited the fact that the bargaining agent here has taken legal actions to legally coerce the employer to comply with its statutory duty to bargain collectively. It has charged the employer with unfair labor practice and conducted a strike to protest the employer’s refusal to bargain. It is only just and equitable that the circumstances in this case should be considered as similar in nature to a “bargaining deadlock” when no certification election could be held. This is also to make sure that no floodgates will be opened for the circumvention of the law by unscrupulous employers to prevent any certified bargaining agent from negotiating a CBA. 4.4. CONTRACT BAR RULE.





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Section 3 [d], Rule VIII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; Republic Planters Bank General Services Employees Union-National Association of Trade Unions v. Laguesma, G.R. No. 119675, Nov. 21, 1996, 264 SCRA 637, 642. Samahang Manggagawa sa Permex [SMP-PIILU-TUCP] v. Secretary of Labor, G.R. No. 107792, March 2, 1998, 286 SCRA 692. 104 Section 3 [d], Rule VIII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; TUPAS v. Inciong, G.R. No. L-46499, Aug. 19, 1982, 114 SCRA 847. 105 Article 253, Labor Code. 106 Article 256, Labor Code. 107 PLDT Employees’ Union v. Philippine Long Distance Telephone Company, G.R. No. L-8138, Aug. 20, 1955. 108 See old provision of Section 4, Rule XVI, Book V, Rules to Implement the Labor Code, as amended by Article 1, Department Order No. 09, Series of 1997 [21 June 1997]. 109 Samahang Manggagawa sa Permex [SMP-PIILU-TUCP] v. Secretary of Labor, G.R. No. 107792, March 2, 1998, 286 SCRA 692; See also Firestone Tire and Rubber Company Employees Union v. Estrella, G.R. Nos. L-45513-14, Jan. 6, 1978, 81 SCRA 49. 110 Section 24, Rule VIII, Book V, Rules to Implement the Labor Code; Samahan ng Manggagawa sa Pacific Plastic v. Laguesma, G.R. No. 111245, Jan. 31, 1997, 267 SCRA 303, 310. 111 ALU v. Calleja, G.R. No. 85095, Nov. 6, 1989, 179 SCRA 127. 112 Article 256, Labor Code; Samahan ng Manggagawa sa Pacific Plastic v. Laguesma, G.R. No. 111245, Jan. 31, 1997, 267 SCRA 303, 309. 113 Section 16, Rule IX, Book V, Rules to Implement the Labor Code.

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a. Concept. Under this rule, a petition for certification election may not be filed when a CBA between the employer and a duly recognized or certified bargaining agent has been registered with the Bureau of Labor Relations (BLR) in accordance with Article 231 of the Labor Code. Where the CBA is duly registered, a petition for certification election may be filed only within the 60‐day freedom period prior to its expiry.102 The purpose of this rule is to ensure stability in the relationship of the workers and the management by preventing frequent modifications of any CBA earlier entered into by them in good faith and for the stipulated original period.103 b. Justifications for the rule. The reasons for this rule are as follows: 1. Certification election may only be entertained within the 60‐day freedom period. Any petition filed before or after the sixty‐day freedom period should be dismissed outright.104 2. When there exists a CBA, it is the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60‐day period and/or until a new agreement is reached by the parties.105 3. At the expiration of the 60‐day freedom period, the employer should continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election challenging such majority status is filed by any other union.106 c. When contract bar rule does not apply. The contract‐bar rule does not apply in the following cases: 1. Where there is an automatic renewal provision in the CBA but prior to the date when such automatic renewal became effective, the employer seasonably filed a manifestation with the Bureau of Labor Relations of its intention to terminate the said agreement if and when it is established that the bargaining agent does not represent anymore the majority of the workers in the bargaining unit.107 2. Where the CBA, despite its due registration, is found in appropriate proceedings that: (a) it contains provisions lower than the standards fixed by law; or (b) the documents supporting its registration are falsified, fraudulent or tainted with misrepresentation.108 3. Where the CBA does not foster industrial stability, such as contracts where the identity of the representative is in doubt since the employer extended direct recognition to the union and concluded a CBA therewith less than one (1) year from the time a certification election was conducted where the “no union” vote won. This situation obtains in a case where the company entered into a CBA with the union when its status as exclusive bargaining agent of the employees has not been established yet.109 4. Where the CBA was registered before or during the last sixty (60) days of a subsisting agreement or during the pendency of a representation case.110 It is well‐settled that the sixty‐day freedom period based on the original CBA should not be affected by any amendment, extension or renewal of the CBA for purposes of certification election.111 5. REQUIREMENT FOR VALIDITY OF CERTIFICATION ELECTION. a. Requisites for the validity of the petition for certification election. The following requisites should concur: 1. The union should be legitimate which means that it is duly registered and listed in the registry of legitimate labor unions of the BLR or that its legal personality has not been revoked or cancelled with finality. 2. In case of organized establishments, the petition for certification election was filed during (and not before or after) the 60‐day freedom period of a duly registered CBA. 3. In case of organized establishments, the petition complied with the 25% written support of the members of the bargaining unit. 4. The petition was filed not in violation of any of the 4 bar rules (see above discussion thereof). b. Requisites for the validity of the certification election proceedings. The following requisites should concur: 1. Number of votes required for the validity of the certification election itself. In order to have a valid certification election, at least a majority of all eligible voters in the appropriate bargaining unit must have cast their votes.112 2. Number of votes to be certified as the collective bargaining agent. To be certified as the sole and exclusive bargaining agent, the union should obtain a majority of the valid votes cast.113





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Section 17, Rule IX, Book V, Ibid.. Section 18, Rule IX, Book V, Ibid.. Section 19, Rule IX, Book V, Ibid.. 117 Section 20, Rule IX, Book V, Ibid.. 118 Id. 119 Section 1 [p], Rule I, Book V, Rules to Implement the Labor Code. 120 Section 2, Rule VIII, Book V, Ibid.. 121 Section 1 [o], Rule I, and Sections 2-5, Rule XII, Book V, Ibid.. 114 115 116

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c. Failure of election. There is failure of election when the number of votes cast in a certification or consent election is less than the majority of the number of eligible voters and there are no challenged votes that could materially change the results of the election.114 d. Effect of failure of election; holding of another election within six (6) months. A failure of election shall not bar the filing of a motion for the immediate holding of another certification or consent election within six (6) months from the date of declaration of the failure of election.115 e. Action on the motion to hold another certification election or consent election. Within twenty‐four (24) hours from receipt of the motion to hold another certification election or consent election, the Election Officer shall immediately schedule the conduct of such election within fifteen (15) days from receipt of the motion and cause the posting of the notice of certification election at least ten (10) days prior to the scheduled date of election in two (2) most conspicuous places in the establishment. The same guidelines and list of voters shall be used in the election.116 f. Proclamation and certification of the result of the certification election. Within twenty‐four (24) hours from the final canvass of votes, there being a valid election, the Election Officer shall transmit the records of the case to the Med‐Arbiter who shall, within the same period from receipt of the minutes and results of election, issue an order proclaiming the results of the election and certifying the union which obtained the majority of the valid votes cast as the sole and exclusive bargaining agent in the subject bargaining unit, under any of the following conditions: (a) No protest was filed or, even if one was filed, the same was not perfected within the five (5) day period for perfection of the protest; (b) No challenge or eligibility issue was raised or, even if one was raised, the resolution of the same will not materially change the results of the elections. The winning union shall have the rights, privileges and obligations of a duly certified collective bargaining agent from the time the certification is issued.117 g. “No union” vote. The “No Union” vote is always one of the choices in a certification election. Where majority of the valid votes cast results in “No Union” obtaining the majority, the Med‐Arbiter shall declare such fact in the order.118 6.PROTESTS AND OTHER QUESTIONS ARISING FROM CONDUCT OF CERTIFICATION ELECTION. In order to fully appreciate and comprehend the topic of protests and other questions that may be raised in connection with the certification election, a comprehensive discussion of the election proceedings is presented below. a. Election proceedings; definition. “Election proceedings” refer to the period during a certification election, consent or run‐off election and election of union officers, starting from the opening to the closing of the polls, including the counting, tabulation and consolidation of votes, but excluding the period for the final determination of the challenged votes and the canvass thereof.119 b. Med‐Arbiter hears and resolves petitions for certification election. The petition for certification election should be heard and resolved by the Med‐Arbiter.120 c. Election Officer. The Med‐Arbiter does not conduct the certification election. It is conducted by an “Election Officer.” He is an officer of the Bureau of Labor Relations or the Labor Relations Division in the Regional Office authorized to conduct certification elections, election of union officers and other forms of elections and referenda.121 d. Pre‐election conference. Within twenty‐four (24) hours from receipt of the assignment for the conduct of a certification election, the Election Officer should cause the issuance of a notice of pre‐election conference upon the contending unions and the employer which should be scheduled within ten (10) days from receipt of the assignment. The pre‐election conference should set the mechanics for the election and should determine, among others, the following:





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123 124

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Section 2, Rule IX, Book V, Ibid.. Acoje Workers v. NAMAWU, G.R. No. L-18848, April 23, 1963, 7 SCRA 730. Samahan ng Manggagawa sa Pacific Plastic v. Laguesma, G.R. No. 111245, Jan. 31, 1997, 267 SCRA 303, 310. 125 As inserted by Section 12, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007. 126 Section 1 [q], Rule I, Book V, Ibid.. 127 Article 277 [c], Labor Code. 128 Airtime Specialists, Inc. v. Director of Labor Relations, G.R. No. 80612-16, Dec. 29, 1989. 129 Eastland Manufacturing Corporation v. Noriel, G.R. No. L-45528, Feb. 10, 1982, 111 SCRA 674. 130 Maligaya Ship Watchmen Agency v. Associate Watchmen and Security Union, G.R. No. L-12214-14, May 28, 1958. 131 Sections 5, 10 and 11, Rule IX, Book V, Ibid.. 132 Yokohama Tire Philippines, Inc. v. Yokohama Employees Union, [G.R. No. 159553, December 10, 2007]. 133 Section 6, Rule IX, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 122

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(a) The date, time and place of the election which shall not be later than forty‐five (45) days from the date of the first pre‐election conference, and shall be on a regular working day and within the employer’s premises, unless circumstances require otherwise; (b) The list of eligible and challenged voters; (c) The number and location of polling places or booths and the number of ballots to be prepared with appropriate translations, if necessary; (d) The names of the watchers or representatives and their alternates for each of the parties during the election; (e) Mechanics and guidelines of the election.122 e. Proper time to question the list of qualified voters. The proper time to question the list of qualified voters is during the pre‐election conference. It can no longer be contested during the actual conduct of the certification election.123 f. Employer’s obligation to submit the list of employees. The employer is duty‐bound to submit the list of employees in the bargaining unit. In case of unjustified refusal by the employer to submit the payroll in its custody despite efforts to make it produce it, the next best source of information is the SSS list which, after all, is a public record whose regularity is presumed.124 By express provision of Article 258‐A of the Labor Code, the participation of the employer which is treated as a mere bystander and not a party to the certification election with a concomitant right to oppose it, is limited to being notified or informed of the filing of the petition for certification election and to submit the list of employees during the pre‐election conference.125 g. Qualifications of voters; inclusion‐exclusion of voters. “Eligible voter” refers to a voter belonging to the appropriate bargaining unit that is the subject of a petition for certification, consent or run‐off election.126 All employees who are members of the appropriate bargaining unit sought to be represented by the petitioner at the time of the issuance of the order granting the conduct of a certification, consent or run‐off election shall be eligible to vote. h. Right to vote starts from first day of employment. Any employee, whether employed for a definite period or not, shall, beginning on his first day of service, already be considered an employee for purposes of membership in any labor union, hence, eligible to participate in a certification election.127 Consequently, all employees ‐ whether probationary or permanent or regular ‐ may be allowed to participate in the certification election. The law does not make any distinction. It merely mentions the term “employees.”128 It is basic, however, that only persons who have direct employment relationship with the employer may vote in the certification election, regardless of their period of employment.129 For example, a piece‐rate worker doing work for his own account with minimum interference from his indirect employer is not eligible to vote in the certification election.130 i. Rule in case of contested voters. In case of disagreement over the voters’ list or over the eligibility of voters, all contested voters shall be allowed to vote but their votes shall be segregated and sealed in individual envelopes.131 j. Rule on the right of dismissed employees to vote. An employee who has been dismissed from work but has contested the legality of his dismissal in a forum of appropriate jurisdiction at the time of the issuance of the order for the conduct of a certification election shall be considered a qualified voter, unless his dismissal was declared valid in a final judgment at the time of the conduct of the certification election.132 k. Posting of the notice of election. The Election Officer is required to cause the posting of the notice of election at least ten (10) days before the actual date of the election in two (2) most conspicuous places in the company premises. The notice should contain: (a) The date and time of the election; (b) The names of all contending unions; (c) The description of the bargaining unit and the list of eligible and challenged voters. The posting of the notice of election, the information required to be included therein and the duration of its posting cannot be waived by the contending unions or the employer.133





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135 136

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Section 7, Rule IX, Book V, Ibid.. Section 8, Rule IX, Book V, Ibid.. Section 9, Rule IX, Book V, Ibid.. 137 Section 10, Rule IX, Book V, Ibid.. 138 Section 11, Rule IX, Book V, Ibid.. 139 Section 12, Rule IX, Book V, Ibid.. 140 Section 13, Rule IX, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 141 GOP-CCP Workers Union v. CIR, G.R. No. L-33015, Sept. 10, 1979, 93 SCRA 116. 134

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l. Secrecy and sanctity of the ballot. To ensure secrecy of the ballot, the Election Officer, together with the authorized representatives of the contending unions and the employer shall, before the start of the actual voting, inspect the polling place, the ballot boxes and the polling booths.134 m. Preparation of ballots. The Election Officer is required to prepare the ballots in English and Filipino or the local dialect, corresponding to the number of voters and a reasonable number of extra ballots. All ballots should be signed at the back by the Election Officer and the authorized representative of each of the contending unions and the employer. Failure or refusal to sign the ballots shall be considered a waiver thereof and the Election Officer shall enter the fact of such refusal or failure in the records of the case as well as the reason for the refusal or failure to sign.135 n. Marking of votes. The voter must put a cross (x) or a check (3) mark in the square opposite the name of the union of his choice or “No Union” if he does not want to be represented by any union. If a ballot is torn, defaced or left unfilled in such a manner as to create doubt or confusion or to identify the voter, it shall be considered spoiled. If the voter inadvertently spoils a ballot, he should return it to the Election Officer who shall destroy it and give him another ballot.136 o. Challenging of votes, grounds. An authorized representative of any of the contending unions and the employer may challenge a vote before it is deposited in the ballot box only on any of the following grounds: (a) That there is no employer‐employee relationship between the voter and the employer; or (b) That the voter is not a member of the appropriate bargaining unit which petitioner seeks to represent.137 p. Procedure in challenging of votes. When a vote is properly challenged, the Election Officer should place the ballot in an envelope which shall be sealed in the presence of the voter and the representatives of the contending unions and employer. The Election Officer should indicate on the envelope the voter’s name, the union or employer challenging the voter, and the ground for the challenge. The sealed envelope shall then be signed by the Election Officer and the representatives of the contending unions and employer. The Election Officer should note all challenges in the minutes of the election and shall be responsible for consolidating all envelopes containing the challenged votes. The envelopes shall be opened and the question of eligibility shall be passed upon only if the number of segregated voters will materially alter the results of the election.138 q. On‐the‐spot questions. The Election Officer should rule on any question relating to and raised during the conduct of the election. In no case, however, shall the Election Officer rule on any of the grounds for challenge.139 r. Spoiled ballots are not reckoned to determine majority. The earlier ruling of the Supreme Court in the case of Allied Workers Association of the Philippines v. CIR, [G.R. Nos. L‐22580 and L‐22950, June 6, 1967, 20 SCRA 364], that spoiled ballots should be counted to determine the majority does not possess any relevance anymore according to PAFLU v. Bureau of Labor Relations, [G.R. No. L‐43760, August 21, 1976]. s. Protest; when perfected. Any party‐in‐interest may file a protest based on the conduct or mechanics of the election. Such protest shall be recorded in the minutes of the election proceedings. Protests not so raised are deemed waived. The protesting party must formalize its protest with the Med‐Arbiter, with specific grounds, arguments and evidence within five (5) days after the close of the election proceedings. If not recorded in the minutes and formalized within the said prescribed period, the protest shall be deemed dropped.140 However, in the case of National Federation of Labor v. The Secretary of Labor, [G.R. No. 104556, March 9, 1998, 287 SCRA 599, 607], it was held that where a substantial number of workers were disenfranchised since they were not notified of the date of the certification election, coupled with the fact that the report of the Med‐Arbiter confirmed to be true the allegations of fraud and irregularities, the 5‐day period should be treated as a mere technicality which should not be allowed to prevail over the workers’ welfare. As the Supreme Court stressed in LVN Pictures, Inc. v. Phil. Musicians Guild, [G.R. Nos. L‐12582 and L‐12598, January 28, 1961, 1 SCRA 132], it is essential that the employees must be accorded an opportunity to freely and intelligently determine which labor organization should act in their behalf. It must be noted that a protest cannot be filed by a labor union which is not a participant in the certification election.141





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t. Opening and closing of precincts. The election precincts should open and close on the date and time agreed upon during the pre‐election conference. The opening and canvass of votes should proceed immediately after the precincts have closed. Failure of any party or the employer or his/her/their representative to appear during the election proceedings should be considered as a waiver to be present and to question the conduct thereof.143

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u. Canvassing of votes. The votes should be counted and tabulated by the Election Officer in the presence of the representatives of the contending unions. Upon completion of the canvass, the Election Officer is required to give each representative a copy of the minutes of the election proceedings and results of the election. The ballots and the tally sheets shall be sealed in an envelope and signed by the Election Officer and the representatives of the contending unions and transmitted to the Med‐Arbiter, together with the minutes and results of the election within twenty‐four (24) hours from the completion of the canvass. Where the election is conducted in more than one region, consolidation of results should be made within fifteen (15) days from the conduct thereof.144

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8. RE‐RUN ELECTION.

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This mode of choosing the sole and exclusive bargaining unit is not expressly provided in the Labor Code nor in its implementing rules. The circumstances which would justify the holding of a re‐run election are not set out in the law. However, a re‐run election may be justified if certain irregularities have been committed during the conduct of the certification election, such as, inter alia, disfranchisement, lack of secrecy in the voting and bribery, in which case, the election should be invalidated.148 Such invalidation would necessitate the conduct of a re‐run election among the contending unions to determine the true will and desire of the employee‐electorate.

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a. Consent election, meaning. A “consent election” refers to the process of determining through secret ballot the sole and exclusive representative of the employees in an appropriate bargaining unit for purposes of collective bargaining or negotiation. It is voluntarily agreed upon by the parties, with or without the intervention of the Department of Labor and Employment.149

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b. Consent election and certification election, distinguished. A consent election is one mutually agreed upon by the parties, with or without the intervention by the DOLE, its purpose being merely to determine the issue of majority representation of all the workers in an appropriate collective bargaining unit; while a certification election is one which is ordered by the DOLE and is aimed at determining the sole and exclusive bargaining agent of all the employees in an appropriate bargaining unit for the purpose of collective bargaining. From the very nature of consent election, it is a separate and distinct process and has nothing to do with the import and effect of a certification election.150

Reyes v. Ople, G.R. No. L-48192, March 30, 1979, 89 SCRA 279. Section 15, Rule IX, Book V, Ibid.. Section 14, Rule IX, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 145 Article 256, Labor Code; Section 1 [ss], Rule I, Book V, Ibid.. 146 Section 1, Rule X, Book V, Ibid.. 147 See Section 20, Rule IX and Section 2, Rule X, Book V, Ibid.. 148 Confederation of Citizens Labor Unions v. Noriel, 116 SCRA 694 [1982]; National Federation of Labor v. The Secretary of Labor, G.R. No. 104556, March 9, 1998, 287 SCRA 599, 607. 149 Section 1 [h], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 150 See Section 1 [h], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; Algire v. De Mesa, [G.R. No. 97622, October 19, 1994, 237 SCRA 647], the Supreme Court had occasion to reiterate its earlier holding in Warren Manufacturing Workers Union [WMWU] v. Bureau of Labor Relations, [G.R. No. L-76185, March 30, 1988, 159 SCRA 387] . 142 143 144

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a. Run‐off election, meaning. A “run‐off election” refers to an election between the labor unions receiving the two (2) highest number of votes in a certification election or consent election with three (3) or more choices, where such a certification election or consent election results in none of the three (3) or more choices receiving the majority of the valid votes cast, provided that the total number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast.145 If there are no objections or challenges which, if sustained, can materially alter the results, the Election Officer should motu proprio conduct a run‐off election within ten (10) days from the close of the election proceedings between the labor unions receiving the two highest number of votes. For obvious reason, the choice of “No Union” should not be included in the run‐off election. Notice of the conduct of a run‐off election should be posted by the Election Officer at least five (5) days before the actual date thereof.146

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For the same reason of lack of personality, a union which has disaffiliated from its mother federation and which has no independent registration cannot be allowed to lodge a protest.142





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c. Consent election agreed upon by the parties to a certification election case. During the preliminary conference that the Med‐Arbiter is required to conduct in a certification election proceeding, he is required to determine if the contending labor unions are willing to submit themselves to a consent election. In case the contending unions agree to a consent election, the Med‐Arbiter is not allowed to issue a formal order calling for the conduct of a certification election. Instead, he should enter the fact of the agreement in the minutes of the hearing which should then be signed by the parties and attested to by the Med‐Arbiter.152

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d. Holding of a consent election during the pendency of a petition for certification election. Where a petition for certification election has been filed and upon the intercession of the Med‐Arbiter, the parties mutually agree to hold a consent election, the results thereof shall constitute a bar to the holding of a certification election for one (1) year from the holding of such consent election. Where an appeal has been filed from the results of the consent election, the running of the one‐year period is suspended until the decision on appeal has become final and executory.153

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e. Holding of a consent election where there is no petition for certification election filed. Where no petition for certification election is filed but the parties themselves agree to hold a consent election with the intercession of the DOLE Regional Office, the results thereof shall constitute a bar to the filing of a petition for certification election.154 =================================== TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 1. Right to Self-organization b. Bargaining agent (7) Affiliation and disaffiliation of the local union from the mother union (a) Substitutionary doctrine ===================================

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1. AFFILIATION OF AN INDEPENDENT UNION WITH A FEDERATION OR A NATIONAL UNION.

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a. Affiliate, meaning. An “affiliate” refers to: (a) An independent union affiliated with a federation or a national union; or (b) A local chapter (formerly known as “chartered local”) which has been subsequently granted independent registration but did not disaffiliate from the federation or national union which created it.155 Technically, a local chapter cannot be properly called an “affiliate” of a federation or a national union if it has not acquired any independent registration of its own.

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b. Purpose of affiliation with a federation or a national union. Affiliation with a federation or a national union is principally for the purpose of strengthening the collective bargaining leverage of the affiliate.

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c. Some principles on affiliation. 1. The relationship between the affiliate union (independent union) and the mother union (federation or national union) is that of principal‐agent relationship. The affiliate union is the principal and the mother union, the agent. 156 This principle also applies in the case of a local chapter created by a federation or a national union.157 2. The affiliate union, being an independently registered 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. It does not give the mother federation the license to act independently of the affiliate 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.158 3. By reason of the affiliation, the affiliate union becomes subject of the rules of the federation or national union.159 4. The appendage of the federation’s acronym to the affiliate union’s name in the registration with the Department of Labor and Employment does not change the principal‐agent relationship between them. Such inclusion of the acronym is merely to indicate that the local union is affiliated with the federation or

United Restauror’s Employees and Labor Union-PAFLU v. Torres, G.R. No. L-24993, Dec. 18, 1968, 26 SCRA 435. See Sections 9 and 10, Rule VIII, Book V, Ibid.. Section 23, Rule VIII, Book V, Ibid.. 154 Ibid.. 155 Section 1 [a], Rule I, Book V, Ibid.. 156 Progressive Development Corporation v. Secretary, Department of Labor and Employment, [G.R. No. 96425, February 4, 1992, 205 SCRA 802]; Pambansang Kapatiran ng mga Anak Pawis sa Formey Plastic National Workers Brotherhood v. Laguesma, G.R. No. 111836, Feb. 1, 1996, 253 SCRA 96, 103. 157 Filipino Pipe and Foundry Corporation v. NLRC, G. R. No. 115180, Nov. 16, 1999. 158 Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, [G.R. Nos. 174040-41, September 22, 2010], citing Coastal Subic Bay Terminal, Inc. v. Department of Labor and Employment-Office of the Secretary, [G.R. No. 157117, Nov. 20, 2006]; Alliance of Nationalist and Genuine Labor Org. v. Samahan ng mga Manggagawang Nagkakaisa sa Manila Bay Spinning Mills, G.R. No.118562, July 5, 1996, 258 SCRA 371, 377. 159 Liberty Cotton Mills Workers Union, v. Liberty Cotton Mills, Inc., supra; See also Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos, G.R. No. 113907, Feb. 28, 2000, 326 SCRA 428; Villar v. Inciong, G.R. Nos. L-50283-84, April 20, 1983, 121 SCRA 444. 151 152 153

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By law, as a result of the consent election, the right to be the exclusive representative of all the employees in an appropriate collective bargaining unit is vested in the labor union “designated or selected” for such purpose “by the majority of the employees” in the unit concerned.151





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national union at the time of the registration. It does not mean that the affiliate union cannot independently stand on its own. Neither can it be interpreted to mean that it cannot pursue its own interests independently of the federation or national union. An affiliate union owes its creation and continued existence to the will of its members and not to the federation or national union to which it is affiliated.160

2. DISAFFILIATION.

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a. Right to disaffiliate. The right of the affiliate union to disaffiliate from its mother federation or national union is a constitutionally‐ guaranteed right which may be invoked by the former at any time. It is axiomatic that an affiliate union is a separate and voluntary association free to serve the interest of all its members ‐ consistent with the freedom of association guaranteed in the Constitution.161

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3. SUBSTITUTIONARY DOCTRINE.

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During the lifetime of the CBA, the majority status of the sole and exclusive bargaining agent which negotiated it may be questioned as when there exist extraordinary circumstances which affect its standing in terms of membership, structure and others which may have been occasioned by union schism or split which completely changes the situation of the employer and the bargaining agent. A petition for certification election may thus be filed to determine which of the unions has the majority status. The union certified as the new sole and exclusive bargaining agent will thus substitute the previous one as a party to the existing CBA. This is allowed under the so‐called “substitutionary doctrine.” The invocation of this doctrine, however, does not mean that the employees are allowed to revoke the CBA validly executed with their employer by reason of the change in the bargaining agent during the effectivity thereof. The new bargaining agent should respect the CBA’s validity and binding effect. It may, however, negotiate for the shortening of the lifetime of the CBA.174 This doctrine cannot be invoked to support the contention that the newly certified collective bargaining agent automatically assumes all the personal undertakings made by the deposed union like the “no‐strike” stipulation in the Tropical Hut Food Employees Union - CGW v. Tropical Hut Food Market, G.R. No. 43495-99, Jan. 20, 1990; See also St. Luke’s Medical Center, Inc. v. Torres, G.R. No. 99395, June 29, 1993. Philippine Labor Alliance Council v. BLR, G.R. No. L-41288, Jan. 31, 1977, 75 SCRA 162; Volkschel Labor Union v. Bureau of Labor Relations, G.R. No. L-45824, June 19, 1985, 137 SCRA 42. See Article 234-A, Labor Code; Villar v. Inciong, G.R. Nos. L-50283-84, April 20, 1983, 121 SCRA 444. 163 Philippine Skylanders, Inc. v. NLRC, G.R. No. 127374, Jan. 31, 2002; People’s Industrial and Commercial Employees and Workers Organization [FFW] v. People’s Industrial and Commercial Corporation, G.R. No. L-37687, March 15, 1982, 112 SCRA 440 164 People’s Industrial and Commercial Employees and Workers Organization [FFW] v. People’s Industrial and Commercial Corporation, G.R. No. L-37687, March 15, 1982, 112 SCRA 440 165 Elisco-Elirol Labor Union [NAFLU] v. Noriel, G. R. L-41955, Dec. 29, 1977. 166 Villar v. Inciong, supra; Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., G.R. No. L-33987, Sept. 4, 1975, 66 SCRA 512. 167 Volkschel Labor Union v. Bureau of Labor Relations, G.R. No. L-45824, June 19, 1985 137 SCRA 42. 168 Volkschel Labor Union v. Bureau of Labor Relations, supra. 169 Associated Workers Union PTGWO v. NLRC, G.R. Nos. 87266-69, July 30, 1990. 170 Philippine Skylanders, Inc. v. NLRC, [G.R. No. 127374, January 31, 2002]. 171 Tropical Hut Employees Union - CGW, v. Tropical Hut Food Market, Inc., [G.R. No. L-43495-99, January 20, 1990]. 172 Philippine Skylanders, Inc. v. NLRC, [G.R. No. 127374, January 31, 2002]. 173 Id. 174 Elisco-Elirol Labor Union [NAFLU] v. Noriel, G.R. No. 41955, Dec. 29, 1977. 160 161

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c. Some principles on disaffiliation. 1. Disaffiliation does not divest an affiliate union of its legal personality.163 2. Disaffiliation of an affiliate union is not an act of disloyalty.164 3. Disaffiliation for purposes of forming a new union does not terminate the status of the members thereof as employees of the company. By said act of disaffiliation, the employees who are members of the local union did not form a new union but merely exercised their right to register their local union. The local union is free to disaffiliate from its mother union. 165 4. Disaffiliation should be approved by the majority of the union members.166 5. Disaffiliation terminates the right to check‐off federation dues. The obligation to check‐off federation dues is terminated with the valid disaffiliation of the local union from the federation with which it was previously affiliated.167 6. Disaffiliation does not affect CBA. It does not operate to amend it or change the administration of the contract.168 7. As a general rule, a labor union may disaffiliate from the parent union to form an independent union only during the sixty‐day freedom period prior to the expiration of the existing CBA. It is not, however, legally impossible to effect the disaffiliation prior to the freedom period, provided that the same is approved by the majority of the members of the bargaining unit. Under this situation, the CBA continues to bind the members of the new or disaffiliated and independent union up to the expiration thereof.169 8. Disaffiliating from the federation and entering into a CBA with the employer does not constitute an unfair labor practice.170 9. Disaffiliation, not a violation of the union security clause.171 10. Election protest involving both the mother federation and local union, not a bar to disaffiliation.172 11. The issue of affiliation or disaffiliation is an inter‐union conflict the jurisdiction of which properly lies with the Bureau of Labor Relations and not with the Labor Arbiter.173

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b. Disaffiliation of independently‐registered union and local chapter, distinguished. The disaffiliation of an independently‐registered union does not affect its legitimate status as a labor organization. However, the same thing may not be said of a local chapter which has no independent registration since its creation was effected pursuant to the charter certificate issued to it by the federation or national union. Once a local chapter disaffiliates from the federation or national union which created it, it ceases to be entitled to the rights and privileges granted to a legitimate labor organization. Hence, it cannot, by itself, file a petition for certification election.162





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CBA. When the former bargaining agent bound itself and its officers not to strike, it could not have validly bound also all the other rival unions existing in the bargaining unit in question. It was the agent of the employees, not of the other unions which possess distinct personalities. To consider the union contractually bound to the “no‐strike” stipulation would, therefore, violate the legal maxim “res inter alios acta alios nec prodest nec nocet.” Of course, the union, as the newly certified bargaining agent, may always voluntarily assume all the personal undertakings made by the displaced agent.175

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1. UNION DUES AND SPECIAL ASSESSMENTS.

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Relevant Provisions: Articles 241 [o] and 277 [a], Labor Code

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a. Right of union to collect dues and assessments. All unions are authorized to collect reasonable amounts of the following: 1. membership fees; 2. union dues; 3. assessments; 4. fines; 5. contributions for labor education and research, mutual death and hospitalization benefits, welfare fund, strike fund and credit and cooperative undertakings;176 6. Agency fees.177

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c. Requisites for validity of union special assessments. The following requisites must concur in order for special assessments for the union’s incidental expenses, attorney’s fees and representation expenses to be valid and upheld, namely: (1) Authorization by a written resolution of the majority of all the members at a general membership meeting duly called for the purpose; (2) Secretary’s record of the minutes of said meeting; and (3) Individual written authorizations for check‐off duly signed by the employees concerned.180

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d. Assessment for attorney’s fees, negotiation fees and similar charges. As far as attorney’s fees, negotiation fees or similar charges are concerned, the rule is that no such attorney’s fees, negotiation fees or similar charges of any kind arising from the negotiation or conclusion of the CBA shall be imposed on any individual member of the contracting union. Such fees may be charged only against the union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary is deemed null and void.181 Clearly, what is prohibited is the payment of attorney’s fees when it is effected through forced contributions from the workers from their own funds as distinguished from the union funds.182

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f. Individual written authorization, when not required. In the following cases, individual written authorization is not required:

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e. Individual written authorization, when required. The law strictly prohibits the check‐off from any amount due an employee who is a member of the union, of any special assessment, attorney’s fees, negotiation fees or any other extraordinary fees other than for mandatory activities under the Labor Code, without the individual written authorization duly signed by the employee. Such authorization must specifically state the amount, purpose and beneficiary of the deduction.183 The purpose of the individual written authorization is to protect the employees from unwarranted practices that diminish their compensation without their knowledge or consent.184

Benguet Consolidated, Inc. v. BCI Employees & Workers Union [PAFLU], G.R. No. L-24711, April 30, 1968, 23 SCRA 465. Articles 241[o] and 277[a], Labor Code; Section 1, Rule XIII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. Article 248 [e], Labor Code. 178 A. L. Ammen Trans. v. Bicol Transport Employees Mutual Association, G.R. No. L-4941, July 25, 1952, 91 Phil. 649. 179 Gabriel v. The Hon. Secretary of Labor and Employment, G.R. No. 115949, March 16, 2000; ABS-CBN Supervisors Employees Union Members v. ABS-CBN Broadcasting Corp., G.R. No. 106518, March 11, 1999; Holy Cross of Davao College, Inc. v. Joaquin, G.R. No. 110007, Oct. 18, 1996, 263 SCRA 358. 180 Article 241[o], Labor Code; Gabriel v. The Hon. Secretary of Labor and Employment, supra, ABS-CBN Supervisors Employees Union Members v. ABS-CBN Broadcasting Corp., supra. 181 See Article 241 in relation to paragraph [b] of Article 222 of the Labor Code. 182 Gabriel v. The Hon. Secretary of Labor and Employment, supra; Vengco v. Trajano, G.R. No. 74453, May 5, 1989; Stellar Industrial Services, Inc. v. NLRC, G.R. No. 117418, Jan. 24, 1996, 252 SCRA 323; Palacol v. Ferrer-Calleja, G.R. No. 85333, February 26, 1990, 182 SCRA 710. 183 Article 241 [o], Labor Code. 184 Galvadores v. Trajano, G.R. No. 70067, Sept. 15, 1986, 144 SCRA 138. 175 176 177

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b. Check‐off, defined. The term “check‐off” means a method of deducting from the employee’s pay at prescribed periods, any amount due for fees, fines or assessments.178 It is a process or device whereby the employer, on agreement with the union recognized as the proper bargaining representative, or on prior authorization from its employees, deducts union dues or agency fees from the latter’s wages and remits them directly to the union.179

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==================================== TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 1. Right to Self-organization (8) Union dues and special assessments (a) Requirements for validity ====================================





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g. Some principles on union dues and assessments. 1. Check‐off for a special assessment is not valid after the withdrawal of the individual written authorizations.190 2. Unlike in authorization for union dues and assessments, disauthorization does not require that it be written individually. The fact that the disauthorizations were collective in form consisting of randomly procured signatures and under loose sheets of paper, is of no moment for the simple reason that the documents containing the disauthorizations have the signatures of the union members. Such retractions were valid. There is nothing in the law which requires that the disauthorizations must be in individual form.191 3. The right of the incumbent bargaining representative to check off and to collect dues is not affected by the pendency of a representation case or an intra‐union dispute.192 4. Approval of the union dues and assessments by the majority of all the members of the union is required.193 Article 241 [n] of the Labor Code and Section 13 [a], Rule VIII, Book III of the Rules to Implement the Labor Code disallow a deduction for special assessment which was passed by a mere board resolution of the directors, and not by the majority of all the members of the union. Also, a written authorization duly signed individually by the employees concerned is a condition sine qua non therefor. Employees are protected by law from unwarranted practices that have for their object the diminution of the hard‐earned compensation due them. ============================= TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 1. Right to Self-organization (9) Agency fees (a) Requisites for assessment =============================

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Relevant Provision: 2nd Sentence, Paragraph [e], Article 248, Labor Code

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1. CHECK‐OFF OF AGENCY FEES FROM NON‐ MEMBERS OF THE BARGAINING AGENT. a. Agency fees. The dues and other fees that may be assessed from non‐bargaining agent members within the bargaining unit who accept and avail of the benefits flowing from the CBA are called “agency fees.” Payment of agency fees to the certified collective bargaining agent which successfully negotiated the CBA is but a reasonable requirement recognized by law. In this aspect, the legal basis of the union's right to agency fees is neither contractual nor statutory, but quasi‐ contractual, deriving from the established principle that non‐union employees may not unjustly enrich themselves by benefiting from employment conditions negotiated by the bargaining agent.194

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b. Employer has the duty to check‐off agency fees. The employer is required to check‐off from non‐bargaining union members within a collective bargaining unit the same reasonable fees equivalent to the dues and other fees normally paid by the bargaining union members without the need for individual check‐off authorizations.195

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c. No individual written authorization by non‐bargaining union members required. To effect the check‐off of agency fees, no individual written authorization from the non‐bargaining agent members who accept the benefits resulting from the CBA is necessary.196

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Article 248 [e], Labor Code. Article 241 [o], Labor Code. RCPI v. Secretary of Labor, G.R. No. 77959, Jan. 9, 1989. 188 Article 1706, Civil Code. 189 Article 1708, Civil Code. 190 Palacol v. Ferrer-Calleja, [G.R. No. 85333, February 26, 1990, 182 SCRA 710-711]. 191 Palacol v. Ferrer-Calleja, [supra]. 192 See old provision of Section 1, Rule XVIII, Book V, Rules to Implement the Labor Code, as amended by Article 1, Department Order No. 09, Series of 1997 [21 June 1997]. 193 Stellar Industrial Services, Inc. v. NLRC, G.R. No. 117418, Jan. 24, 1996, 252 SCRA 323; Palacol v. Calleja, etc., supra. 194 Holy Cross of Davao College, Inc. v. Joaquin, G.R. No. 110007, Oct. 18, 1996, 263 SCRA 358; 331 Phil. 680, 692. 195 Article 248 [e], Labor Code; Section 4, Rule XXV, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 196 Del Pilar Academy v. Del Pilar Academy Employees Union, supra; Holy Cross of Davao College, Inc. v. Joaquin, supra. 185 186 187

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1. Assessment from non‐members of the bargaining agent of “agency fees” which should be equivalent to the dues and other fees paid by members of the recognized bargaining agent, if such non‐members accept the benefits under the CBA.185 2. Deductions for fees for mandatory activities such as labor relations seminars and labor education activities.186 3. Check‐off for union service fees authorized by law.187 4. Deductions for withholding tax mandated under the National Internal Revenue Code. 5. Deductions for withholding of wages because of employee’s debt to the employer which is already due.188 6. Deductions made pursuant to a judgment against the worker under circumstances where the wages may be the subject of attachment or execution but only for debts incurred for food, clothing, shelter and medical attendance.189 7. Deductions from wages ordered by the court. 8. Deductions authorized by law such as for premiums for PhilHealth, social security, Pag‐IBIG, employees’ compensation and the like.





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Relevant Provisions: Articles 250 to 253, Article 248, Labor Code 1. COLLECTIVE BARGAINING AGREEMENT, DEFINED.

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A “Collective Bargaining Agreement” or “CBA” refers to the negotiated contract between a duly recognized or certified exclusive bargaining agent of workers and the employer concerning wages, hours of work and all other terms and conditions of employment in the appropriate bargaining unit, including mandatory provisions for grievances and arbitration machineries.197 During its lifetime, the CBA is considered the law between the parties ‐ the collective bargaining agent and its members, on the one hand, and the employer, on the other.198

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2. ESSENTIAL REQUISITES OF COLLECTIVE BARGAINING.

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3. DUTY TO BARGAIN COLLECTIVELY.

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b. Two (2) situations contemplated. The duty to bargain collectively involves two (2) situations, namely: 1. Duty to bargain collectively in the absence of a CBA.203 2. Duty to bargain collectively when there is an existing CBA.

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3.1. DUTY TO BARGAIN COLLECTIVELY IN THE ABSENCE OF A CBA (ARTICLE 251, LABOR CODE).

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a. Duty to bargain collectively, meaning. The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession.202

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Essentially, the duty to bargain in this situation requires that the employer and the bargaining union should meet, convene and confer for collective bargaining purposes. The advantage of negotiating a CBA for the first time lies in the fact that both parties are not restricted or encumbered by any previous agreements on any of the issues that may be raised in the course thereof. They are free to take positions on anything without having to worry about possible past agreements affecting the current ones for discussion. A CBA is an attempt to erect a whole system of industrial self‐ government. It constitutes a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate and is, therefore, more than a contract. It covers the whole employment relationship and calls into being a new common law ‐ the common law of a particular industry or of a particular shop.204

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3.2. DUTY TO BARGAIN COLLECTIVELY WHEN THERE EXISTS A CBA (ARTICLE 253, LABOR CODE).

a. Concept. When there is a collective bargaining agreement, the duty to bargain collectively shall mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties

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Prior to any collective bargaining negotiations between the employer and the bargaining union, the following requisites must first be satisfied: 1. Employer‐employee relationship must exist between the employer and the members of the bargaining unit being represented by the bargaining agent.199 2. The bargaining agent must have the majority support of the members of the bargaining unit established through the modes sanctioned by law.200 3. A lawful demand to bargain is made in accordance with law.201

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d. Non‐members of the certified bargaining agent need not become members thereof. It must be emphasized that the employees who are not members of the certified bargaining agent which successfully concluded the CBA are not required to become members of the latter. Their acceptance of the benefits flowing from the CBA and their act of paying the agency fees do not make them members thereof. =========================== TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 2. Right to Collective Bargaining a. Duty to bargain collectively (1) Kiok Loy ruling ===========================



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b. Freedom period. The last sixty (60) days of the 5‐year lifetime of a CBA immediately prior to its expiration is called the “freedom period.” It is denominated as such because it is the only time when the law allows the parties to freely serve a notice to terminate, alter or modify the existing CBA. It is also the time when the majority status of the bargaining agent may be challenged by another union by filing the appropriate petition for certification election.206

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c. Automatic renewal clause. If unchallenged, the majority status of the existing bargaining agent should be respected. A petition for certification election challenging the majority status of the existing bargaining agent should be filed within – and not before or after ‐ the 60‐day freedom period. Upon the expiration of the said period and no petition for certification election is filed by a challenging union, the employer is duty‐bound to continue to recognize the majority status of the incumbent bargaining agent.207 Negotiation for a new CBA may even validly commence between the incumbent bargaining agent and the employer during the 60‐day freedom period if no challenge to the bargaining agent’s majority status is posed by another union.

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a. Kiok Loy doctrine. This doctrine is based on the ruling In Kiok Loy v. NLRC, [No. L‐54334, January 22, 1986, 141 SCRA 179, 188], where the petitioner, Sweden Ice Cream Plant, refused to submit any counter‐proposal to the CBA proposed by its employees’ certified bargaining agent. The High Court ruled that the employer had thereby lost its right to bargain the terms and conditions of the CBA. Thus, the CBA proposed by the union was imposed lock, stock and barrel on the erring company. The Kiok Loy case epitomizes the classic case of negotiating a CBA in bad faith consisting of the employer’s refusal to bargain with the collective bargaining agent by ignoring all notices for negotiations and requests for counter‐ proposals. Such refusal to send a counter‐proposal to the union and to bargain anew on the economic terms of the CBA constitutes an unfair labor practice under Article 248 [g] of the Labor Code (violation of the duty bargain collectively).209

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b. Other cases subsequent to Kiok Loy. The ruling that the CBA proposed by the bargaining union may be adopted as the new CBA if employer refused to negotiate has been reiterated in the following cases: 1. Divine Word University of Tacloban v. Secretary of Labor and Employment, [G.R. No. 91915, September 11, 1992, 213 SCRA 759], where the university refused to perform its duty to bargain collectively; hence, the High Tribunal upheld the unilateral imposition on the university of the CBA proposed by the Divine Word University Employees Union. 2. General Milling Corporation v. CA, [G.R. No. 146728, February 11, 2004], where the Supreme Court imposed on the employer the draft CBA proposed by the union for two (2) years commencing from the expiration of the 3‐year term of the original CBA. This was because of the employer’s refusal to counter‐ propose to the union’s proposals which was declared as an unfair labor practice under Article 248 [g] of the Labor Code. ============================== TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 2. Right to Collective Bargaining b. Mandatory provisions of CBA (1) Grievance Procedure (2) Voluntary Arbitration (3) No Strike-No Lockout Clause (4) Labor-Management Council ==============================

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Relevant Provision: Article 260 [Grievance Machinery]; Articles 261 to 262 [Voluntary Arbitration]; and Article 255 [Labor-Management Council], Labor Code Article 253, Labor Code. Picop Resources, Inc. v. Tañeca, [G.R. No. 160828, August 9, 2010]; MRR Yard Crew v. PNR, G.R. No. L-33621, July 26, 1976, 72 SCRA 88; General Textiles Allied Workers Association - GTAWA v. Director of Bureau of Labor Relations, G.R. No. L-45719, July 31, 1978, 84 SCRA 430. 207 Article 256, Labor Code. 208 Article 253, Labor Code; New Pacific Timber & Supply Co., Inc. v. NLRC, G.R. No. 124224, March 17, 2000; Pier 8 Arrastre & Stevedoring Services, Inc. v. Roldan-Confesor, G.R. No. 110854, Feb. 13, 1995, 241 SCRA 294; Union of Filipro Employees v. NLRC, G.R. No. 91025, Dec. 19, 1990. 209 General Milling Corporation v. CA, [G.R. No. 146728, February 11, 2004]. 205 206

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4. KIOK LOY RULING.

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d. Status quo should be maintained. Pending the renewal of the CBA, the parties are bound to keep the status quo and to treat the terms and conditions embodied therein still in full force and effect during the 60‐day freedom period until a new agreement is negotiated and ultimately concluded by the parties. This principle is otherwise known as the “automatic renewal clause” which is mandated by law and deemed incorporated in all CBAs.208

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to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60‐day period and/or until a new agreement is reached by the parties.205





1. MANDATORY PROVISIONS OF THE CBA.

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The Syllabus mentions 4 provisions that are mandatorily required to be stated in the CBA, to wit: 1. Grievance Procedure210 2. Voluntary Arbitration211 3. No Strike‐No Lockout Clause 4. Labor‐Management Council212 If these provisions are not reflected in the CBA, its registration will be denied by the BLR.

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2. GRIEVANCE PROCEDURE.

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a. “Grievance” or “grievable issue,” defined. A “grievance” or “grievable issue” is any question raised by either the employer or the union regarding any of the following issues or controversies: 1. The interpretation or application of the CBA; 2. The interpretation or enforcement of company personnel policies; or 3. Any claim by either party that the other party is violating any provisions of the CBA or company personnel policies.213 It must be stressed, however, that in order to be grievable, the violations of the CBA should be ordinary and not gross in character; otherwise, they shall be considered as unfair labor practice. Gross violation of the CBA is defined as flagrant and/or malicious refusal by a party thereto to comply with the economic provisions thereof. 214 If what is violated, therefore, is a non‐economic or a political provision of the CBA, the same shall not be considered as unfair labor practice and may thus be processed as a grievable issue in accordance with and following the grievance machinery laid down in the CBA.

c. Grievance procedure, defined. “Grievance procedure” refers to the internal rules of procedure established by the parties in their CBA with voluntary arbitration as the terminal step, which are intended to resolve all issues arising from the implementation and interpretation of their collective agreement.216 It is that part of the CBA which provides for a peaceful way of settling differences and misunderstanding between the parties.217

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3. VOLUNTARY ARBITRATION.

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The terms “grievance procedure” and “grievance machinery” may be used interchangeably.

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a. Voluntary arbitration, defined. “Voluntary arbitration” refers to the mode of settling labor‐management disputes in which the parties select a competent, trained and impartial third person who is tasked to decide on the merits of the case and whose decision is final and executory.218

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b. Voluntary Arbitrator. A “Voluntary Arbitrator” refers to any person who has been accredited by the National Conciliation and Mediation Board (“NCMB” or “Board”) as such, or any person named or designated in the CBA by the parties as their Voluntary Arbitrator, or one chosen by the parties with or without the assistance of the NCMB, pursuant to a selection procedure agreed upon in the CBA or one appointed by the NCMB in case either of the parties to the CBA refuses to submit to voluntary arbitration. This term includes a panel of Voluntary Arbitrators.219 A Voluntary Arbitrator is not an employee, functionary or part of the government or of the Department of Labor and Employment, but he is authorized to render arbitration services provided under labor laws.220 4. NO STRIKE‐NO LOCKOUT CLAUSE.

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A “no strike‐no lockout” clause in the CBA is an expression of the firm commitment of the parties thereto that, on the part of the union, it will not mount a strike during the effectivity of the CBA, and on the part of the employer, that it will not stage a lockout during the lifetime thereof. It has heretofore been held that a “no strike, no lockout” provision in the CBA is a valid stipulation although the clause may be invoked by an employer only when the strike is economic in nature or one which is conducted to force wage or other concessions from the employer that are not mandated to be granted by the law itself. It does not bar strikes grounded on unfair labor practices.221 See Article 260, Labor Code. See Articles 261 to 262, Labor Code. See Article 255, Labor Code. 213 Section 1 [u], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, Feb. 17, 2003; Section 1[g], Rule II, NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings [Oct. 15, 2004]; No. 4, NCMB Primer on Grievance Settlement and Voluntary Arbitration. 214 See Article 261, Labor Code. 215 Article 260, Labor Code. 216 Rule III [7], NCMB Manual of Procedures for Conciliation and Preventive Mediation. 217 No. 12, NCMB Primer on Grievance Settlement and Voluntary Arbitration; See also Section 1[h], Rule II, NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings [Oct. 15, 2004]. 218 Section 1 [d], Rule II, NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings [Oct. 15, 2004]. 219 Section 1 [e], Rule II, NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings [Oct. 15, 2004]; See also Article 212 [n], Labor Code; Section 1, Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; Section 1 [27], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases. 220 Ludo & Luym Corporation v. Saornido, G.R. No. 140960, Jan. 20, 2003. 221 Malayang Samahan ng mga Manggagawa sa M. Greenfield (MSMG-UWP) v. Ramos, G.R. No. 113907, Feb. 28, 2000, 326 SCRA 428, citing Master Iron Labor Union v. NLRC, G.R. No. 92009, Feb. 17, 1993, 219 SCRA 47; See also Panay Electric Company, Inc. v. NLRC, G.R. No. 102672, Oct. 4, 1995, 248 SCRA 688; People’s Industrial and Commercial Employees and Workers Organization [FFW] v. People’s Industrial and Commercial Corporation, G.R. No. L-37687, March 15, 1982, 112 SCRA 440. 210 211

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b. Grievance machinery, defined. “Grievance machinery” refers to the mechanism for the adjustment and resolution of grievances arising from the interpretation or implementation of a CBA and those arising from the interpretation or enforcement of company personnel policies.215

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5. LABOR‐MANAGEMENT COUNCIL.

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b. Selection of representatives to labor‐management committees or councils. In organized establishments, the workers’ representatives to the council should be nominated by the exclusive bargaining representative. In establishments where no legitimate labor organization exists, the workers’ representative should be elected directly by the employees at large.226 ============================ TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 2. Right to Collective Bargaining c. ULP in Collective Bargaining (1) Bargaining in bad faith (2) Refusal to bargain (3) Individual bargaining (4) Blue sky bargaining (5) Surface bargaining ============================

1. BARGAINING IN BAD FAITH.

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a. Basic principles. It is essential that the employer and the employees should both act in good faith. It is in this principle of good faith that depends entirely the success and effectiveness of maintaining industrial stability and peace. The signing of the CBA is not the end of the collective bargaining and negotiations process. It continues to the stage where the parties thereto are mandated to administer and implement the agreed terms and conditions of the employment relationship. The CBA process covers, therefore, all aspects of the employment relationship between the employer and the employees, commencing with the negotiation of its stipulations and finally, its administration, application and implementation. Collective bargaining is not merely going through the motions of negotiating. A party must not have a predetermined resolve not to budge from an initial position. It is not surface bargaining accompanied by a purpose to defeat it. It is not shadow boxing to a draw. But it is not necessarily incompatible with stubbornness. Good faith bargaining requires that claims made by either bargainer should be honest claims. It would not be far‐fetched to reach the conclusion that bargaining lacks good faith when an employer mechanically repeats claim of inability to pay without making the slightest effort to substantiate the claim.227 Where an employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively.228

Toyota Motor Phils. Corp. Workers Association [TMPCWA] v. NLRC, G.R. Nos. 158786 &158789, October 19, 2007; Filcon Manufacturing Corporation v. Lakas Manggagawa sa Filcon-Lakas Manggagawa Labor Center [LMF-LMLC], G.R. No. 150166, July 26, 2004. See Section 3, Article XIII, 1987 Constitution; Article 255, Labor Code. 224 Section 1, Rule XXI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. 225 Article 277 [h], Labor Code, as amended by Section 33, Republic Act No. 6715, March 21, 1989. 226 Section 2, Rule XXI, Book V, Ibid.. 227 NLRB v. Truitt Manufacturing Co., 351 U. S. 149; 48 Am Jur 2d 1200. 228 The Bradman Co., Inc. v. CIR, G.R. No. L-23134, July 21, 1977. 222

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a. Creation of labor‐management councils. Labor‐management councils are mandated to be created in every establishment pursuant to the Constitutional grant to employees of the right to participate in policy and decision‐making processes in all matters affecting their rights, duties, benefits and welfare.223 Under the Rules to Implement the Labor Code, the Department of Labor and Employment is mandated to promote the formation of labor‐management councils in organized and unorganized establishments to enable the workers to participate in policy and decision‐making processes in the establishment, insofar as said processes will directly affect their rights, benefits and welfare, except those which are covered by collective bargaining agreements or are traditional areas of bargaining.224 In establishments where no legitimate labor organization exists, labor‐management committees may be formed voluntarily by workers and employers for the purpose of promoting industrial peace. The Department of Labor and Employment should endeavor to enlighten and educate the workers and employers on their rights and responsibilities through labor education with emphasis on the policy thrusts of the Labor Code.225

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The same rule also applies in case of a lockout. The said clause may only be invoked by the union in case the ground for the lockout is economic in nature but it may not be so cited if the ground is unfair labor practice committed by the union. The Supreme Court consistently ruled in a long line of cases that a strike is illegal if staged in violation of the said clause in the CBA especially when conclusive arbitration clause is provided therein.222 Thus, in the 2010 case of C. Alcantara & Sons, Inc. v. CA, [G.R. No. 155109, September 29, 2010], it was declared that a strike may be regarded as invalid although the labor union has complied with the strict requirements for staging one as provided in Article 263 of the Labor Code when the same is held contrary to an existing agreement, such as a “no strike, no lockout” provision that enjoins both the union and the company from resorting to the use of economic weapons available to them under the law and to instead take recourse to voluntary arbitration in settling their disputes.





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b. Making a promise during the CBA negotiations, not an indication of bad faith. Promises made by management during the CBA negotiations may not be considered an indication of bad faith or a scheme of feigning to undertake the negotiation proceedings through empty promises. The union has, under the law, the right and opportunity to insist on the foreseeable fulfillment of the company’s promise by demanding its incorporation in the CBA. As held in Samahang Manggagawa sa Top Form Manufacturing‐United Workers of the Philippines [SMTFM‐UWP] v. NLRC, [G.R. No. 113856, September 7, 1998], because the proposal was never embodied in the CBA, the promise has remained just that, a promise, the implementation of which cannot be validly demanded under the law.

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c. Adamant stance resulting in an impasse, not an indicium of bad faith. The adamant insistence on a bargaining position to the point where the negotiations reach an impasse does not establish bad faith. Neither can bad faith be inferred from a party’s insistence on the inclusion of a particular substantive provision unless it concerns trivial matters or is obviously intolerable.230

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d. Parties have no obligation to precipitately agree to the proposals of each other. While the law makes it an obligation for the employer and the employees to bargain collectively with each other, such compulsion does not include the commitment to precipitately accept or agree to the proposals of the other. All it contemplates is that both parties should approach the negotiation with an open mind and make reasonable effort to reach a common ground of agreement.231

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2. REFUSAL TO BARGAIN.

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a. Effect of failure or refusal of management to give counter‐proposals to the union’s demands. The failure of the employer to submit its counter‐proposals to the demands of the bargaining union does not, by itself, constitute refusal to bargain.233 However, it is different if the employer refuses to submit an answer or reply to the written bargaining proposals of the certified bargaining union. In this case, unfair labor practice is committed. While the law does not compel the parties to reach an agreement, it does contemplate that both parties will approach the negotiation with an open mind and make a reasonable effort to reach a common ground of agreement.234 In the case of General Milling Corporation v. CA, [G.R. No. 146728, February 11, 2004], the Supreme Court found the petitioner guilty of unfair labor practice under Article 248 [g] for refusing to send a counter‐proposal to the union and to bargain anew on the economic terms of the CBA. Similarly, in the earlier case of Colegio de San Juan de Letran v. Association of Employees and Faculty of Letran, [G.R. No. 141471, September 18, 2000], the petitioner school was declared guilty of unfair labor practice when it failed to make a timely reply to the proposals of the certified bargaining union more than a month after the same were submitted to it. In explaining its failure to reply, the school merely offered the feeble excuse that its Board of Trustees had not yet convened to discuss the matter. Clearly, its actuation showed a lack of sincere desire to negotiate the CBA thereby rendering it guilty of an unfair labor practice.

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b. Refusal of a party to sign the CBA. A party to a fully‐concluded CBA may be compelled to sign it, especially if said refusal to sign is the only remaining hitch to its being implemented. Such refusal is considered an unfair labor practice.235 3. INDIVIDUAL BARGAINING.

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Employer’s act of negotiating with individual members of the union is an unfair labor practice. To negotiate or attempt to negotiate with individual workers rather than with the certified bargaining agent is obviously ULP.236 4. BLUE‐SKY BARGAINING.

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“Blue‐sky bargaining” means making exaggerated or unreasonable proposals.237 This kind of unfair labor practice act may only be committed by the bargaining union. In the 2004 case of Standard Chartered Bank Employees Union [NUBE] v. Confesor, [G.R. No. 114974, June 16, 2004], the minutes of the meeting show that the union based its economic proposals on data of rank‐and‐file 48 Am Jur 1797, p. 248. Samahang Manggagawa sa Top Form Manufacturing-United Workers of the Philippines [SMTFM-UWP] v. NLRC, supra; Divine Word University of Tacloban v. Secretary of Labor and Employment, G.R. No. 91915, Sept. 11, 1992, 213 SCRA 759, 912-913. Union of Filipro Employees-Drug, Food and Allied Industries Unions-Kilusang Mayo Uno [UFE-DFA-KMU] v. Nestle Philippines, Inc., G.R. Nos. 158930-31, March 3, 2008. 232 Samahang Manggagawa sa Top Form Manufacturing-United Workers of the Philippines [supra]. 233 Philippine Marine Radio Officers Association v. Court of Industrial Relations, G.R. Nos. L-10095 and L-10115, Oct. 31, 1957, 102 Phil. 373. 234 Kiok Loy v. NLRC, G.R. No. 54334, Jan. 22, 1986; Bradman Co., Inc. v. CIR, G.R. Nos. L-24134-35, July 21, 1977, 78 SCRA 10. 235 Roadway Express v. General Teamster, 320 F 2d, 859. 236 Insular Life Assurance Co., Ltd., Employees Association-NATU v. Insular Life Assurance Co., Ltd., G.R. No. L-25291, Jan. 30, 1971, 37 SCRA 244. 237 Arthur A. Sloane and Fred Witney, Labor Relations, 7th Edition 1991, p. 195. 229 230 231

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e. Allegations of bad faith wiped out with the signing of the CBA. With the execution of the CBA, bad faith bargaining can no longer be imputed upon any of the parties thereto. All provisions in the CBA are supposed to have been jointly and voluntarily incorporated therein by the parties. The CBA is proof enough that the company exerted reasonable effort at good faith bargaining.232

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A CBA is not simply a document by which the union and the employees have imposed upon management express restrictions of its otherwise absolute right to manage the enterprise. While regulating or restraining the exercise of management functions, the CBA does not oust management from the performance of these functions. The choice available to the parties to a CBA is not between entering or refusing to enter into a relationship but between having that relationship governed by an agreed‐upon rule of law or leaving each and every matter subject to a temporary resolution dependent solely upon the relative strength, at any given moment, of the contending forces.229





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Relevant Provision: Article 248, Labor Code 1. UNFAIR LABOR PRACTICE (ULP), IN GENERAL. a. When an act is considered unfair labor practice. At the outset, it must be clarified that not all unfair acts constitute unfair labor practices. While an act or decision of an employer or a union may be unfair, certainly not every unfair act or decision thereof may constitute an unfair labor practice (ULP) as defined and enumerated under Articles 248 and 249 of the Labor Code.239 The act complained of as ULP must have a proximate and causal connection with the following: 1. Exercise of the right to self‐organization; 2. Exercise of the right to collective bargaining; or 3. Observance of a CBA. Sans this connection, the unfair acts do not fall within the technical signification of the term “unfair labor practice.”240 b. Article 248 [f], the only ULP not related to the exercise of the right to self‐organization and collective bargaining. The only ULP which is the exception as it may or may not relate to the exercise of the right to self‐organization and collective bargaining is the act described under Article 248 [f], i.e., to dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under the Labor Code.241 c. Labor Code provisions on ULP. Under the Labor Code, there are only five (5) provisions related to unfair labor practices, to wit: 1. Article 247 which describes the concept of unfair labor practices and prescribes the procedure for their prosecution; 2. Article 248 which enumerates the unfair labor practices that may be committed by employers; 3. Article 249 which enumerates the unfair labor practices that may be committed by labor organizations; 4. Article 261 which considers violations of the CBA as no longer unfair labor practices unless the same are gross in character which means flagrant and/or malicious refusal to comply with the economic provisions thereof. 5. Article 263 [c] which refers to union‐busting involving the dismissal from employment of union officers duly elected in accordance with the union constitution and by‐laws, where the existence of the union is threatened thereby. d. Parties who/which may commit ULP. An unfair labor practice may be committed by an employer or by a labor organization. Article 248 describes the unfair labor practices that may be committed by an employer; while Article 249 enumerates those which may be committed by a labor organization. See also National Union of Restaurant Workers [PTUC] v. CIR, G.R. No. L-20044, April 30, 1964, 10 SCRA 843. Galaxie Steel Workers Union [GSWU-NAFLU-KMU] v. NLRC, G.R. No. 165757, Oct. 17, 2006. Allied Banking Corporation v. CA, G.R. No. 144412, Nov. 18, 2003; See also Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., G.R. No. 162025, Aug. 3, 2010. 241 Philcom Employees Union v. Philippine Global Communications, G.R. No. 144315, July 17, 2006. 238 239 240

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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. Hence, it cannot be said that the union was guilty of an unfair labor practice for blue‐sky bargaining. 5. SURFACE BARGAINING. “Surface bargaining” is defined as “going through the motions of negotiating” without any legal intent to reach an agreement. This kind of unfair labor practice may only be committed by the employer. According to Standard Chartered Bank Employees Union [NUBE] v. Confesor, [supra], it involves the question of whether an employer’s conduct demonstrates an unwillingness to bargain in good faith or is merely hard bargaining. There can be no surface bargaining, absent any evidence that management 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. Here, admittedly, the parties were not able to agree and reached a deadlock. However, it must be emphasized that the duty to bargain “does not compel either party to agree to a proposal or require the making of a concession.” Hence, the parties’ failure to agree does not amount to an unfair labor practice under Article 248 [g].238 ============================= TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 2. Right to Collective Bargaining d. Unfair Labor Practice (1) ULP of Employers =============================





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Article 248, Labor Code. Article 249, Labor Code. See Article 247, Labor Code. 245 Under Article 217, Labor Code. 242 243 244

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On the part of the employer, only the officers and agents of corporations, associations or partnerships who have actually participated in or authorized or ratified unfair labor practices are criminally liable.242 On the part of the union, only the officers, members of governing boards, representatives or agents or members of labor associations or organizations who have actually participated in or authorized or ratified the unfair labor practices are criminally liable.243 e. Elements of ULP. Before an employer or labor organization, as the case may be, may be said to have committed an unfair labor practice, the following elements must concur: 1. There should exist an employer‐employee relationship between the offended party and the offender; and 2. The act complained of must be expressly mentioned and defined in the Labor Code as an unfair labor practice. Absent one of the elements aforementioned will not make the act an unfair labor practice. The first requisite is necessary because an unfair labor practice may only be committed in connection with the right to self‐organization and collective bargaining by employees. Necessarily, there must be an employment relationship in order for the organizational right to be validly and lawfully invoked. The second requisite should be present since the Labor Code itself requires that the unfair labor practice be “expressly defined by this Code.” If an act is not covered by any of the grounds expressly mentioned in the law, it cannot be deemed an unfair labor practice act. f. Aspects of ULP. Under Article 247, an unfair labor practice has two (2) aspects, namely: 1. Civil aspect; and 2. Criminal aspect. The civil aspect of an unfair labor practice includes claims for actual, moral and exemplary damages, attorney’s fees and other affirmative reliefs.244 Generally, these civil claims should be asserted in the labor case before the Labor Arbiters who have original and exclusive jurisdiction over unfair labor practices.245 2. UNFAIR LABOR PRACTICES OF EMPLOYERS (ARTICLE 248, LABOR CODE). Article 248. Unfair Labor Practices of Employers. – It shall be unlawful for an employer to commit any of the following unfair labor practices: (a) To interfere with, restrain or coerce employees in the exercise of their right to self‐ organization; (b) To require as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs; (c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self‐ organization; (d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters; (e) To discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. Employees of an appropriate bargaining unit who are not members of the recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent, if such non‐union members accept the benefits under the collective bargaining agreement: Provided, that the individual authorization required under Article 242, paragraph (o) of this Code shall not apply to the non‐members of the recognized collective bargaining agent; (f) To dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code; (g) To violate the duty to bargain collectively as prescribed by this Code; (h) To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute; or (i) To violate a collective bargaining agreement.





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The provisions of the preceding paragraph notwithstanding, only the officers and agents of corporations, associations or partnerships who have actually participated in, authorized or ratified unfair labor practices shall be held criminally liable.246

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As amended by Batas Pambansa Bilang 130, August 21, 1981. Republic Savings Bank v. CIR, G.R. No. L-20303, Sept. 27, 1967, 21 SCRA 226. Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, Inc., [G.R. No. 162025, August 3, 2010. 249 Insular Life Assurance Co., Ltd., Employees Association-NATU, v. Insular Life Assurance Co., Ltd., supra; Samahan ng Manggagawa sa Bandolino-LMLC v. NLRC, G.R. No. 126195, July 17, 1997, 275 SCRA 633. 250 Royal Undergarment Corporation of the Philippines v. CIR, G.R. No. L-39040, June 6, 1990. 246 247 248

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2.1. INTERFERENCE WITH, RESTRAINT OR COERCION OF EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO SELF‐ ORGANIZATION. a. Test of interference, restraint or coercion. Paragraph [a] of Article 248 considers it an unfair labor practice of employers to interfere with, restrain or coerce employees in the exercise of their right to self‐organization. The terms “interfere,” “restrain” or “coerce” are very broad that any act of management that may reasonably tend to have an influence or effect on the exercise by the employees of their right to self‐organize may fall within their meaning and coverage. According to the Supreme Court in Insular Life Assurance Co., Ltd., Employees Association ‐ NATU v. Insular Life Assurance Co., Ltd., [G.R. No. L‐25291, January 30, 1971, 37 SCRA 244], the test of whether an employer has interfered with or restrained or coerced employees within the meaning of the law is whether the employer has engaged in conduct which may reasonably tend to interfere with the free exercise of the employees’ rights. It is not necessary that there be direct evidence that any employee was in fact intimidated or coerced by the statements or threats of the employer if there is a reasonable inference that the anti‐union conduct of the employer does have an adverse effect on the exercise of the right to self‐ organization and collective bargaining. However the act is called or denominated ‐ whether as interference, restraint or coercion, or as a discriminatory discharge, or as a refusal to bargain, or even as a combination of any or all of these ‐ is of no consequence. What is important is that the act constitutes an unfair labor practice.247 The significant point to consider, for a charge of unfair labor practice to prosper, is that it must be shown that the employer’s act was motivated by ill will, “bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy, and, of course, that social humiliation, wounded feelings or grave anxiety resulted.”248 b. Totality of conduct doctrine. In ascertaining whether the act of the employer constitutes interference with, restraint or coercion of the employees’ exercise of their right to self‐organization and collective bargaining, the “totality of conduct doctrine” may be applied. This means that expressions of opinion by an employer, though innocent in themselves, may be held to constitute an unfair labor practice because of the circumstances under which they were uttered, the history of the particular employer’s labor relations or anti‐union bias or because of their connection with an established collateral plan of coercion or interference. An expression which may be permissibly uttered by one employer, might, in the mouth of a more hostile employer, be deemed improper and consequently actionable as an unfair labor practice.249 The past conduct of the employer and like considerations, coupled with an intimate connection between the employer’s action and the union affiliation or activities of the particular employee or employees taken as a whole, may raise a suspicion as to the motivation for the employer’s conduct. The failure of the employer to ascribe a valid reason therefor may justify an inference that his unexplained conduct in respect of the particular employee or employees was inspired by the latter’s union membership and activities.250 c. Some principles on interference, restraint or coercion as ULP. 1. Interference in the employees’ right to self‐organization is ULP. For example: a. In General Milling Corporation v. CA, [G.R. No. 146728, February 11, 2004], the Supreme Court considered the act of the employer in presenting the letters between February to June 1993 by thirteen (13) union members signifying their resignation from the union clearly indicative of the employer’s pressure on its employees and, therefore, ULP. The records show that the employer presented these letters to prove that the union no longer enjoyed the support of the workers. The fact that the resignations of the union members occurred during the pendency of the case before the Labor Arbiter shows the employer’s desperate attempt to cast doubt on the legitimate status of the union. The ill‐timed letters of resignation from the union members indicate that the employer had interfered with the right of its employees to self‐organization. Because of such act, the employer was declared guilty of unfair labor practice. b. In Hacienda Fatima v. National Federation of Sugarcane Workers – Food and General Trade, [G.R. No. 149440, January 28, 2003], the Supreme Court upheld the factual findings of the NLRC and the Court of Appeals that from the employer’s refusal to bargain to its acts of economic inducements resulting in the promotion of those who withdrew from the union, the use of armed guards to prevent the organizers to come in, and the dismissal of union officials and members, one cannot but conclude that the employer did not want a union in its hacienda ‐ a clear interference in the right of the workers to self‐organization. Hence, the employer was held guilty of unfair labor practice.





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2.2. YELLOW DOG CONTRACT. Paragraph [b] of Article 248 describes what is commonly known as “yellow dog contract.” It is one which exacts from workers as a condition of employment that they shall not join or belong to a labor organization, or attempt to organize one during their period of employment or that they shall withdraw therefrom in case they are already members of a labor organization. A typical yellow dog contract embodies the following stipulations: 1. A representation by the employee that he is not a member of a labor organization; 2. A promise by the employee that he will not join a union; and 251

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2. Interference in the choice of the union’s bargaining panel. If an employer interferes in the selection of the union’s negotiators or coerces the union to exclude from its panel of negotiators, a representative of the union, and if it can be inferred that the employer adopted the said act to yield adverse effects on the free exercise of the right to self‐organization or on the right to collective bargaining of the employees, an unfair labor practice under Article 248 [a], in connection with and in relation to Article 243 of the Labor Code, is committed.251 3. Formation of a union is never a valid ground to dismiss. In Mark Roche International v. NLRC, [G.R. No. 123825, August 31, 1999], in ruling that the private respondents were not constructively dismissed but illegally dismissed, it was established that it was the filing of the petition for certification election and organization of a union within the company which led petitioners to dismiss private respondents and not petitioners' allegations of absence or abandonment by private respondents. Evidently, it was after receiving the notice of hearing of the petition for certification election on 27 October 1992 that petitioners immediately told private respondents that they were no longer employed. The formation of a labor union has never been a ground for valid termination, and where there is an absence of clear, valid and legal cause, the law considers the termination illegal. 4. It is an unfair labor practice to dismiss a union officer or an employee for his union activities. In the 2000 case of Colegio de San Juan de Letran v. Association of Employees and Faculty of Letran, [G.R. No. 141471, September 18, 2000], the outright termination for alleged insubordination of the union president while the CBA negotiation was on‐going was declared as an act of union‐busting as it interfered with the employees’ right to self‐organization. The factual backdrop of the termination of the union president leads to no other conclusion but that she was dismissed in order to strip the union of a leader who would fight for the right of her co‐workers at the bargaining table. In Cathay Pacific Steel Corp. v. Hon. CA, [G.R. No. 164561, August 30, 2006], the act of the employer in dismissing a supervisory employee (Personnel Superintendent) on account of his union activities related to the formation of the supervisory union was held as an unfair labor practice. h. When closure constitutes ULP. In holding that petitioner is liable for unfair labor practice and illegal dismissal, the Supreme Court, in St. John Colleges, Inc. v. St. John Academy Faculty and Employees Union, [G.R. No. 167892, October 27, 2006], pronounced that the timing of, and the reasons for, the closure of the high school department and its reopening after only one year from the time it was closed down, show that the closure was done in bad faith for the purpose of circumventing the union’s right to collective bargaining and its members’ right to security of tenure. Petitioner SJCI undermined the Labor Code’s system of dispute resolution by closing down its high school department while the 1997 CBA negotiations deadlock issues were pending resolution before the Secretary of Labor and Employment. The closure was done in bad faith for the purpose of defeating the union’s right to collective bargaining. Besides, as found by the NLRC, the alleged illegality and excessiveness of the union’s demands were not sufficiently proved by SJCI. Even on the assumption that the union’s demands were illegal or excessive, SJCI’s remedy was to await the resolution by the DOLE Secretary and to file a ULP case against the union. However, SJCI did not have the power to take matters into its own hands by closing down its high school department in order to get rid of the union. In the 2008 case of Purefoods Corp. v. Nagkakaisang Samahang Manggagawa ng Purefoods Rank‐and‐File, [G.R. No. 150896, August 28, 2008], the closure of petitioner’s Sto. Tomas farm was declared to have been made in bad faith. Badges of bad faith are evident from the following acts of the petitioner: it unjustifiably refused to recognize the Sto. Tomas Free Workers Union’s (STFWU’s) and the other unions’ affiliation with Purefoods Unified Labor Organization (PULO); it concluded a new CBA with another union in another farm during the agreed indefinite suspension of the collective bargaining negotiations; it surreptitiously transferred and continued its business in a less hostile environment; and it suddenly terminated the STFWU members but retained and brought the non‐members to its Malvar farm. Petitioner presented no evidence to support its contention that it was incurring losses or that the subject farm’s lease agreement was pre‐ terminated. Ineluctably, the closure of the Sto. Tomas farm circumvented the labor organization’s right to collective bargaining and violated the members’ right to security of tenure. The sudden termination of the STFWU members is tainted with ULP because it was done to interfere with, restrain or coerce its employees in the exercise of their right to self‐organization. Thus, the petitioner company is liable for the payment of moral and exemplary damages of P500,000.00 to the illegally dismissed STFWU members.

Standard Chartered Bank Employees Union [NUBE] v. Confesor, [G.R. No. 114974, June 16, 2004].





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Manila Electric Company v. Quisumbing, G.R. No. 127598, Jan. 27, 1999, 302 SCRA 173, 214]; See also De Ocampo v. NLRC, 213 SCRA 652 [1992]. Article 248 [c], Labor Code; Section 6 [f], Department Order No. 18-02, Series of 2002, [Feb. 21, 2002]. Article 212 [i], Labor Code; Section 1 [k], Rule I, Book V, Rules to Implement the Labor Code. 255 Portuguez v. GSIS Family Bank [Comsavings Bank], G.R. No. 169570, March 2, 2007 citing Philippine American Life Gen. Insurance Co. v. Gramaje, G.R. No. 156963, Nov. 11, 2004, 442 SCRA 274, 284-285. 256 Article 248 [e], Labor Code. 252 253 254

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3. A promise by the employee that upon joining a labor organization, he will quit his employment. The act of the employer in imposing such a condition constitutes unfair labor practice under Article 248 [b] of the Labor Code. Such stipulation in the contract is null and void. 2.3. CONTRACTING OUT OF SERVICES AND FUNCTIONS. Paragraph [c] of Article 248 describes when the act of the employer of contracting out of services or functions being performed by union members is considered an unfair labor practice. As a general rule, the act of an employer in having work or certain services or functions being performed by union members contracted out is not per se an unfair labor practice. This is so because contracting‐out of a job, work or service is clearly an exercise by the employer of its business judgment and its inherent management rights and prerogatives.252 It is only when the contracting out of a job, work or service being performed by union members will interfere with, restrain or coerce employees in the exercise of their right to self‐organization that it shall be unlawful and shall constitute an unfair labor practice.253 2.4. COMPANY UNION. Paragraph [d] of Article 248 considers it an unfair labor practice to initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters. Such union is called “company union” as its formation, function or administration has been assisted by any act defined as unfair labor practice under the Labor Code.254 In Philippine American Cigar and Cigarette Factory Workers Independent Union v. Philippine American Cigar and Cigarette Manufacturing Co., [G.R. No. L‐18364, February 28, 1963, 7 SCRA 375], it was pronounced that one indication that the union is company‐dominated consists in the act of the employer in securing authorization cards from employees and by immediately granting the union exclusive recognition as a bargaining agent and entering into a contract therewith although it was not the duly authorized representative of the employees. Another is when the union approached the management rather than the employees in getting the plant organized and management extended the requested assistance to the union. The acts of the company in soliciting membership and allowing union activities to be held during working time and coercing employees to join the union under threat of dismissal or demotion are clear indicia of company domination. In Oceanic Air Products v. CIR, [G.R. No. 18704, January 31, 1963, 7 SCRA 208], several employees were forced by company officers to join a union. No member of the union had been dismissed despite the implementation of a retrenchment policy which resulted in the dismissal of other employees who are officers and members of another union. After the dismissals, the company hired several laborers. All these indicate that the union is company‐dominated. 2.5. PARAGRAPH [E] OF ARTICLE 248 COVERS THREE SEPARATE CONCEPTS. The three (3) sentences comprising paragraph [e] of Article 248 treat of three (3) separate labor law concepts, to wit: 1. Discrimination. ‐ This is found in the first sentence thereof which considers as an unfair labor practice to discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. 2. Union security clause. – This is treated in the second sentence thereof which states that “(n)othing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement.” 3. Agency fee. ‐ This is described in the third sentence thereof in that “(e)mployees of an appropriate bargaining unit who are not members of the recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent, if such non‐union members accept the benefits under the collective bargaining agreement provided that the individual authorization required under Article 242, paragraph (o) of this Code shall not apply to the non‐members of the recognized collective bargaining agent.” 2.5.1. DISCRIMINATION. a. Concept. Discrimination has been defined as the failure to treat all persons equally when no reasonable distinction can be found between those favored and those not favored.255 What is prohibited as unfair labor practice under the law is to discriminate in regard to wages, hours of work, and other terms and conditions of employment in order to encourage or discourage membership in any labor organization.256





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Bank of the Philippine islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301, Aug. 10, 2010; Picop Resources, Inc. v. Tañeca, G.R. No. 160828, Aug. 9, 2010. Caltex Refinery Employees Association [CREA] v. Brillantes, G.R. No. 123782, Sept. 16, 1997, 279 SCRA 218, 236. Bank of the Philippine islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301, Aug. 10, 2010. 260 Del Monte Philippines, Inc. v. Saldivar, G.R. No. 158620, Oct. 11, 2006. 257 258 259

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b. The purpose of the alleged discriminatory act, material. In Manila Pencil Co., Inc. v. CIR, [G.R. No. L‐16903, August 31, 1965, 14 SCRA 955], it was ruled that even assuming that business conditions justify the dismissal of employees, it is an unfair labor practice of employer to dismiss permanently only union members and not non‐unionists. In Manila Railroad Co. v. Kapisanan ng mga Manggagawa sa Manila Railroad Co., [G.R. No. L‐19728, July 30, 1964], the non‐regularization of long‐time employees because of their affiliation with the union while new employees were immediately regularized was declared an act of discrimination. In AHS/Philippines Employees Union v. NLRC, [G.R. No. 73721, March 30, 1987], the employer transferred the union president from the main office in Manila to Cebu at the time when the union was still being organized. It was held that the uneven application of its marketing plan resulting in the said transfer of the union president is patently an act of discrimination constitutive of unfair labor practice. In Bondoc v. CIR, [G.R. No. 33955, January 26, 1989], the employee charged his employer as having discriminated against him in the grant of promotion because he was not a member of any labor union. The Supreme Court held that the employee’s contention that he was discriminated against to force him to join a labor organization is untenable because he failed to mention any specific union. Moreover, it is not believable for the employer to harass and oppress an employee to force him to join a union, for it cannot be comprehended how his joining a union would benefit his employer. 2.5.2. UNION SECURITY CLAUSE. a. Nature of stipulation. The stipulation in a CBA based on the second sentence of paragraph [e] of Article 248 commonly known as the “union security clause” allows the parties thereto to enter into an agreement requiring membership in the exclusive collective bargaining agent which successfully negotiated said CBA as a condition for continued employment with the exception of employees who are already members of another union at the time of the signing of the CBA. “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 their continued employment. In other words, the purpose of a union security arrangement is to guarantee the continued existence of the union through enforced membership for the benefit of the workers.257 The employer under this clause recognizes that the membership of employees in the union which negotiated the CBA should be maintained and continued as a condition for employment or retention of employment. The obvious purpose is to safeguard and ensure the union’s continued existence and to strengthen and protect it from the fickleness or perfidy of its own members. Without this clause, the existence of the union is always subject to uncertainty as its members may resign anytime resulting in the decimation of its ranks.258 b. The right not to join a union is not absolute since it may be restricted. Time and again, it has been ruled that the individual employee’s right not to join a union may be validly restricted by a union security clause in a CBA Theoretically, there is nothing in law or jurisprudence to prevent an employer and a union from stipulating that existing employees (who already attained regular and permanent status but who are not members of any union) are to be included in the coverage of a union security clause. Even Article 248(e) of the Labor Code only expressly exempts old employees who already have a union from inclusion in a union security clause.259 c. Various forms of union security arrangements. Generally, a union security clause may take the form of: 1. Closed shop agreement; 2. Maintenance of membership agreement; 3. Union shop agreement; 4. Modified union shop agreement; 5. Exclusive bargaining agreement; 6. Bargaining for members only agreement; 7. Agency shop agreement; or 8. Preferential hiring agreement. The above classification admits of certain modified types which the parties may agree upon in the CBA depending on the peculiar requirements of the situation or the parties thereto. d. Closed Shop Agreement. A “closed‐shop” may be defined as an enterprise in which, by agreement between the employer and its 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.260 Basically, a closed shop agreement stipulates the undertaking by the employer not to hire or employ any person who is not a member of the bargaining union. Once





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National Labor Union v. Aguinaldo’s Echague, G.R. No. L-7358, May 31, 1955; See also Bank of the Philippine islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301, Aug. 10, 2010. Bank of the Philippine islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301, Aug. 10, 2010; Picop Resources, Inc. v. Tañeca, G.R. No. 160828, Aug. 9, 2010. Alabang Country Club, Inc. v. NLRC, supra; Bank of the Philippine islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301, Aug. 10, 2010. 264 Victoriano v. Elizalde Rope Workers’ Union, G.R. No. L-25246, Sept. 12, 1974, 59 SCRA 54, 68. 265 Article 248 [e], Labor Code; Freeman Shirt Manufacturing Co. v. CIR, G.R. No. L-16561, Jan. 28,1961, 1 SCRA 353, 356; Sta. Cecilia Sawmills v. CIR G.R. No. L-19273-4, Feb. 29, 1964, 10 SCRA 433, 437. 266 Metrolab Industries, Inc. v. Confesor, G.R. No. 108855, Feb. 28, 1996, 254 SCRA 182, 197. 267 Bank of the Philippine islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301, Aug. 10, 2010. 268 Holy Cross of Davao College, Inc. v. Joaquin, G.R. No. 110007, Oct. 18, 1996, 263 SCRA 358; 331 Phil. 680, 692. 261 262 263

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employed, it is required that the said person should remain a member of the bargaining union in good standing as a condition for continued employment, at least during the whole duration of the CBA. This requirement for employees or workers to become members of a union as a condition for employment redounds to the benefit and advantage of said employees because by holding out to loyal members a promise of employment in the closed shop, the union wields group solidarity.261 e. Maintenance of membership agreement. 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.262 f. Union shop agreement. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment.263 g. Modified union shop agreement. Employees under this arrangement who are not union members at the time of the signing or execution of the CBA are not required to join the bargaining union. However, any and all workers hired or employed after the signing or execution of the CBA are required to join the bargaining union. h. Exclusive bargaining agent agreement. The union which negotiated and concluded the CBA with management is considered and recognized as the sole and exclusive bargaining agent of all the covered employees in the bargaining unit, whether they be members or not of the said agent. i. Bargaining for members only agreement. Under this arrangement, the union which negotiated and concluded the CBA with management is recognized as the bargaining agent only for its own members. (Rothenberg on Labor Relations, page 410). j. Agency shop agreement. Under this scheme, there is no requirement for non‐members of the bargaining agent to become its members. However, it is required that such non‐union members should pay to the bargaining agent an agency fee as a condition for their continued employment. The third sentence of Article 248 [e] of the Labor Code validates this arrangement. k. Preferential hiring agreement. It is the principal feature of this arrangement that the employer gives preference in hiring to the members of the bargaining agent under equal circumstances and qualifications. Once hired or employed, they are required to maintain their membership in good standing in the bargaining agent for the duration of the CBA as a condition for their continued employment. l. Employees exempted from coverage of union security clause. All employees in the bargaining unit covered by a Union Security Clause in their CBA with management are subject to its terms. However, under law and jurisprudence, the following kinds of employees are exempted from its coverage, namely: 1. Employees who, at the time the union security agreement takes effect, are bona‐fide members of a religious organization which prohibits its members from joining labor unions on religious grounds.264 2. Employees already in the service and already members of a union other than the majority at the time the union security agreement took effect.265 3. Confidential employees who are excluded from the rank‐and‐file bargaining unit.266 4. Employees excluded from the union security clause by express terms of the agreement.267 2.5.3. CHECK‐OFF OF AGENCY FEES FROM NON‐ MEMBERS OF THE BARGAINING AGENT. a. Agency fees. The dues and other fees that may be assessed from non‐bargaining union members within the bargaining unit who accept and avail of the benefits flowing from the CBA are called “agency fees.” Payment of agency fees to the certified collective bargaining agent which successfully negotiated the CBA is but a reasonable requirement recognized by law. In this aspect, the legal basis of the union's right to agency fees is neither contractual nor statutory, but quasi‐ contractual, deriving from the established principle that non‐union employees may not unjustly enrich themselves by benefiting from employment conditions negotiated by the bargaining agent.268





[NOTE: See further discussion on agency fee under the topic of “Right to Self‐Organization” above] 2.6. FILING OF CHARGES OR GIVING OF TESTIMONY.

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Under paragraph [f] of Article 248 of the Labor Code, it is an unfair labor practice for an employer to dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under the Labor Code.269 It must be underscored that this is the only unfair labor practice that need not be related to the exercise by the employees of their right to self‐organization and collective bargaining.270 In Philippine American Cigar and Cigarette Factory Workers Independent Union v. Philippine American Cigar and Cigarette Manufacturing Co., [G.R. No. L‐18364, February 28, 1963]. the employer dismissed the brother of an employee who filed a case against it. The Supreme Court ruled that such act of the employer constitutes unfair labor practice. Although Section 4[a] 5 of Republic Act No. 875 (now Article 248 [f] of the Labor Code) would seem to refer only to the dismissal of the one who filed charges against the company as constituting an unfair labor practice, the legislative intent is to assure absolute freedom of the employees to establish labor organizations and unions as well as to proffer charges for violation of labor laws. If the dismissal of an employee due to the filing by him of said charges would be and is an undue restraint upon said freedom, the dismissal of his brother owing to the non‐withdrawal of the charges of the former would be and constitute as much, in fact a greater and more effective, restraint upon the same freedom. What is prohibited to be done directly shall not be allowed to be accomplished indirectly. In Itogon‐Suyoc Mines, Inc. v. Baldo, [G.R. No. L‐17739, December 24, 1964], it was declared that an unfair labor practice was committed by the employer when it dismissed the worker who had testified in the hearing of a certification election case despite its prior request for the employee not to testify in the said proceeding accompanied with a promise of being reinstated if he followed said request.271

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[NOTE: See further discussion on duty to bargain collectively under the topic of “Right to Self‐Organization” above]

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b. Duty to bargain devolves on both parties. The duty to bargain collectively devolves upon both the employer and the labor organization.275 As described in the law, the duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment, including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party; but such duty does not compel any party to make any concession.276

2.8. PAYMENT OF NEGOTIATION FEES OR ATTORNEY’S FEES.

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Article 248 [h] of the Labor Code considers as an unfair labor practice the act of the employer in paying negotiation fees or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute. Article 222 [b] of the Labor Code requires that such attorney’s fees, negotiation fees or similar charges should be paid from the union funds.277 2.9. VIOLATION OF THE CBA.

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Article 248 [i] of the Labor Code should be read in relation to Article 261 thereof. Under Article 261, violations of a CBA, except those which are gross in character, shall no longer be treated as an unfair labor practice and shall be resolved as grievances under the CBA. Gross violations of CBA shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.278 Examples: The act of the employer in refusing to implement the negotiated wage increase stipulated in the CBA, which increase is intended to be distinct and separate from any other benefits or privileges that may be forthcoming to the employees, is an unfair labor practice.279 Refusal for a considerable number of years to give salary adjustments according to the improved salary scales in the CBA is an unfair labor practice.280

See also Section 13[d], Rule XII, Book III, Rules to Implement the Labor Code. Philcom Employees Union v. Philippine Global Communications, G.R. No. 144315, July 17, 2006; See also Bisig Manggagawa sa Tryco v. NLRC, G.R. No. 151309, Oct. 15, 2008. See also National Fastener Corporation v. CIR, G.R. No. L-15834, Jan. 20, 1961, 1 SCRA 17; H. G. Henares & Sons v. National Labor Union, G.R. No. L-17535, Dec. 28, 1961, 3 SCRA 765. 272 Article 248 [g], Labor Code. 273 Article 248 [h], Labor Code. 274 Article 248 [i], Labor Code. 275 See Articles 248 [g] and 249 [c], respectively, of the Labor Code. 276 Article 252, Labor Code; Elizalde Rope Factory, Inc. v. CIR, G.R. No. L-16419, May 30, 1963, 8 SCRA 67. 277 Pacific Banking Corporation v. Clave, G.R. No. 56965, March 7, 1984. 128 SCRA 112; Galvadores v. Trajano, G.R. No. 70067, Sept. 15, 1986, 144 SCRA 138; Amalgamated Laborers Association v. CIR, G.R. No. L-23467, March 27, 1968, 22 SCRA 1266. 278 See Flight Attendants and Stewards Association of the Philippines [FASAP] v. Philippine Airlines, Inc., G.R. No. 178083, July 22, 2008. 279 Philippine Apparel Workers Union v. NLRC, G.R. No. L-50320, July 31, 1981; Alhambra Industries, Inc. v. CIR, G.R. No. L-25984, Oct. 30, 1970, 35 SCRA 550. 280 Benguet Consolidated v. BCI Employees and Workers Union, G.R. No. L-25471, March 27, 1968, 22 SCRA 1293. 269 270 271

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2.7. VIOLATION OF THE CBA OR REFUSAL TO COMPLY THEREWITH.

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Alba Patio de Makati, v. Alba Patio de Makati Employees Association, G.R. No. L-37922, March 16, 1984. As amended by Batas Pambansa Bilang 130, August 21, 1981.

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The act of the employer to permit non‐union members to participate in the service charges, contrary to the stipulation in the CBA, is an unfair labor practice.281 ============================= TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 2. Right to Collective Bargaining d. Unfair Labor Practice (2) ULP of Labor Organizations =========================== Relevant Provision: Article 249, Labor Code 1. UNFAIR LABOR PRACTICES OF LABOR ORGANIZATIONS. Article 249. Unfair Labor Practices of Labor Organizations. ‐ It shall be unfair labor practice for a labor organization, its officers, agents or representatives: (a) To restrain or coerce employees in the exercise of their right to self‐organization. However, a labor organization shall have the right to prescribe its own rules with respect to the acquisition or retention of membership; (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; (c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of the employees; (d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other things of value, in the nature of an exaction, for services which are not performed or not to be performed, including the demand for fee for union negotiations; (e) To ask for or accept negotiation or attorney’s fees from employers as part of the settlement of any issue in collective bargaining or any other dispute; or (f) To violate a collective bargaining agreement. The provisions of the preceding paragraph notwithstanding, only the officers, members of governing boards, representatives or agents or members of labor associations or organizations who have actually participated in, authorized or ratified unfair labor practices shall be held criminally liable.282 1. RESTRAINT AND COERCION OF EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO SELF‐ORGANIZATION. Under Article 249 [a], it is unfair labor practice for a labor organization, its officers, agents or representatives to restrain or coerce employees in the exercise of their right to self‐organization. This provision is substantially similar to Article 248 [a] of the Labor Code involving the unfair labor practices of employers except that the term “interfere” is not included therein. The significance in the omission of said term is the grant of unrestricted license to the labor organization, its officers, agents or representatives to interfere with the exercise by the employees of their right to self‐ organization. Such interference is not unlawful since without it, the labor organization cannot be expected to organize and recruit members. It becomes unlawful within the context of paragraph [a] of Article 249 only when it amounts to restraint or coercion which is expressly prohibited thereunder. Under the same provision, a labor organization is granted the right to prescribe its own rules with respect to the acquisition or retention of membership. These rules are normally found in the constitution and by‐laws of the labor organization. Pursuant to this right, the labor organization can prescribe the proper qualifications for membership therein as well as the rules and regulations to be followed by its members in order to retain their membership in good standing therein. The rules, to be valid, must be reasonable and within the bounds of the law. Thus, the labor organization in M. D. Transit v. de Guzman, [G.R. No. L‐18810, April 23, 1963, 7 SCRA 726], was declared to have committed an unfair labor practice when it expelled a member just because he filed charges against the union officers. 2. DISCRIMINATION. Under Article 249 [b], it is considered an unfair labor practice for a labor organization, its officers, agents or representatives 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





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Lakas ng Manggagawang Makabayan v. Marcelo Enterprises, G.R. No. L-38258, Nov. 19, 1982, 118 SCRA 425. NLRB v. Gamble Enterprises, Inc., 345 US 117 97 L Ed 864, 73 S Ct 560. International Brotherhood of Teamsters, etc., 212 NLRB 968, 1974 CCH NLRB 26867, 87 BNA LRRM 1101. 286 NLRB v. Gamble Enterprises, Inc., 345 US 117, 97 l Ed 864, 73 S Ct 560; American Newspaper Publishers Association v. NLRB, 345 US 100, 97 L Ed 852, 73 S Ct 552, 31 ALR2d 497. 287 American Newspaper Publishers Association v. NLRB, 345 US 100, 97 L Ed 852, 73 S Ct 552, 31 ALR2d 497. 288 Musicians Union v. Superior Court of Alameda County, 69 Cal 2d 695, 73 Cal Rptr 201, 447 P2d 313; NLRB v. Gamble Enterprises, Inc., 345 US 117, 97 L Ed 864, 73 S Ct 560. 283 284 285

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employee on any ground other than the usual terms and conditions under which membership or continuation of membership is made available to other members. This ground is the counterpart of the unfair labor practice of employers under Article 248 [e] which consists in the act of discriminating against an employee in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. If the act of discrimination committed by the employer was instigated by the union, both the employer and the union may be declared guilty of unfair labor practice. 3. DUTY OF UNION TO BARGAIN COLLECTIVELY. Under Article 249 [c], it is an unfair labor practice for a duly certified sole and exclusive bargaining union, its officers, agents or representatives to refuse or violate the duty to bargain collectively with the employer. This is the counterpart provision of Article 248 [g] respecting the violation by the employer of its duty to bargain collectively. The obvious purpose of the law is to ensure that the union will negotiate with management in good faith and for the purpose of concluding a mutually beneficial agreement regarding the terms and conditions of their employment relationship. For instance, it is unfair labor practice for a labor organization to demand that the employer should negotiate a CBA with it at a time when it has yet to be certified as the sole and exclusive bargaining agent of the employees since the certification election case is still pending. This act violates the employer’s right to collectively bargain only with the sole and exclusive representative of the majority of its workers.283 4. FEATHERBEDDING. a. Anti‐featherbedding provision of Article 249 [d]. Under Article 249 [d], it is an unfair labor practice for a labor organization, its officers, agents or representatives to cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other things of value, in the nature of an exaction, for services which are not performed or not to be performed, including the demand for fee for union negotiations. This practice of the union is commonly known as “featherbedding” as it unduly and unnecessarily maintains or increases the number of employees used or the amount of time consumed to work on a specific job. This is done by the employees to unduly secure their jobs in the face of technological advances or as required by minimum health and safety standards, among other justifications. These featherbedding practices have been found to be wasteful and without legitimate justifications. b. Payments for standby services. A union commits an unfair labor practice under this provision by causing or attempting to cause an employer to pay or agree to pay for standby services. Payments for “standing‐by,” or for the substantial equivalent of “standing‐by,” are not payments for “services performed” within the meaning of the law. When an employer received a bona‐fide offer of competent performance of relevant services, it remains for the employer, through free and fair negotiation, to determine whether such offer should be accepted and what compensation should be paid for the work done.284 A union’s demand for a contract calling for payments for the presence of one of its members at a jobsite when no unionist’s work was being done therein, and when the employer indicated that it had no need for such labor, coupled with a strike to make the employer respond to such demand, is an exaction within the meaning of this law, and the demand is considered not a bona‐fide offer of competent performance of relevant services.285 c. Payments for made work. Where work is actually done by an employee with the employer’s consent, the union’s demand that the employee be compensated for time spent in doing the work does not violate the law.286 The law leaves to collective bargaining the determination of what, if any, work, including bona‐fide “made work,” shall be included as compensable services and what rate of compensation shall be paid for it.287 A musicians’ union has been held not to have violated the anti‐featherbedding provision by refusing to permit a union band to perform at the opening game of the baseball season, refusing to permit a union organist to play at the home games, and picketing the baseball stadium, in order to force the owner of the baseball team to hire a union band to play at all weekend home games; or by refusing to consent to appearances of travelling bands in a theater unless the theater manager also employs a local orchestra in connection with certain programs where the local orchestra is to perform actual and not token services, even though the theater manager does not need or want to employ the local orchestra.288 d. Payments for work already compensated. The anti‐featherbedding provision has been held not to bar a union from demanding payment for work for which the employer has already paid another person. Hence, a union has been held not guilty of an unfair labor practice





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Relevant Provisions: Articles 263 and 264, Labor Code 1. FORMS OF CONCERTED ACTIVITIES. There are three (3) forms of concerted activities, namely: 1. Strike; 2. Lockout; 3. Picketing. 2. STRIKE. “Strike” means any temporary stoppage of work by the concerted action of the employees as a result of an 290 industrial or labor dispute. The term “strike” encompasses not only concerted work stoppages but also the following: 1. Slowdowns;291 2. Mass leaves; 3. Sitdowns; 4. Attempts to damage, destroy or sabotage plant equipment and facilities and similar activities;292 5. Overtime boycott;293 6. The sporting by the workers of closely cropped hair or cleanly shaven heads after their union filed a notice of strike as a result of a CBA deadlock is a form of illegal strike.294 3. LOCKOUT. “Lockout” means the temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.295 Rabouin v. NLRB [CA2] 195 F2d 906. Article 212 (o), Labor Code, as amended by Section 4, Republic Act No. 6715; Section 1 [uu], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; No. 01, Primer on Strike, Picketing and Lockout; Section 1 [24], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; G & S Transport Corp. v. Infante, G.R. No. 160303, Sept. 13, 2007. 291 Bagong Pagkakaisa ng Manggagawa ng Triumph International v. Secretary of the Department of Labor and Employment, [G.R. Nos. 167401 and 167407, July 5, 2010]. 292 Section 2, P. D. No. 823, as amended by P. D. No. 849; Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines, Inc. G.R. No. 140992, March 25, 2004, 426 SCRA 319. Bukluran ng Manggagawa sa Clothman Knitting Corp.-Solidarity of Unions in the Phils. For Empowerment and Reforms v. CA, G.R. No. 158158, Jan. 17, 2005, 448 SCRA 642. 293 Interphil Laboratories Employees Union-FFW v. Interphil Laboratories, Inc., G.R. No. 142824, Dec. 19, 2001. 294 National Union of Workers in the Hotel, Restaurant and Allied Industries [NUWHRAIN-APL-IUF] Dusit Hotel Nikko Chapter v. The Honorable CA, [G.R. Nos. 163942 and 166295, November 11, 2008]. 289 290

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in demanding payment to it of an amount equal to the wages paid by the employer to a non‐union employee for work to which the union’s members were entitled. If the work is actually done by employees, there can be no conflict with the anti‐featherbedding provision, regardless of whether or not the persons receiving payment are the ones who performed the work.289 5. DEMAND OR ACCEPTANCE OF NEGOTIATION FEES OR ATTORNEY’S FEES. Under Article 249 [e], it is an unfair labor practice for a labor organization, its officers, agents or representatives to ask for or accept negotiation fees or attorney’s fees from employers as part of the settlement of any issue in collective bargaining or any other dispute. This is the counterpart provision of Article 248 [h] regarding the payment, on the part of the employer, of negotiation fees or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute. The reason for this policy of the law is to prevent undue influence by the employer on the independence of the union in its decision over any issues it may have with the former. Moreover, it is possible that the matter of fixing the amount of negotiation fees or attorney’s fees alone would present a problem much complicated than the more substantive issues involving the terms and conditions and welfare of the workers. 6. VIOLATION OF THE CBA. Under Article 249 [f], it is considered an unfair labor practice for a labor organization, its officers, agents or representatives to violate a CBA. This is the counterpart provision of Article 248 [i] regarding the employer’s act of violating a CBA. But it must be noted that under Article 261 of the Labor Code, violation of the CBA is generally considered merely a grievable issue. It becomes an unfair labor practice only if the violation is gross in character which means that there is flagrant and/or malicious refusal to comply with the economic (as distinguished from non‐economic) stipulations in the CBA. This principle applies not only to the employer but to the labor organization as well. ================================= TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 3. Right to Peaceful Concerted Activities a. Forms of Concerted Activities =================================





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It consists of the following: 1. Shutdowns; 2. Mass retrenchment and dismissals initiated by the employer.296 3. The employer’s act of excluding employees who are union members.297

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Article 212 (p), Labor Code, as amended by Section 4, Republic Act No. 6715; Section 1 [gg], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; No. 01, Primer on Strike, Picketing and Lockout; Section 1 [14], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; Rural Bank of Alaminos Employees Union [RBAEU] v. NLRC, G.R. Nos. 100342-44, Oct. 29, 1999. Section 3, P. D. No. 823, as amended by P.D. No. 849. 297 Complex Electronics Employees Association [CEEA], etc., v. NLRC, G.R. No. 121315, July 19, 1999; Sta. Mesa Shipways & Engineering Co. v. CIR, 48 O. G. 3353. 298 Section 1 [19], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; No. 15, Guidelines Governing Labor Relations; No. 01, Primer on Strike, Picketing and Lockout; Ilaw at Buklod ng Manggagawa [IBM] v. NLRC, G.R. No. 91980, June 27, 1995. 299 Section 6, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; No. 05, Primer on Strike, Picketing and Lockout; Section 3, Rule IV, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases. 300 Article 263[c], Labor Code; Section 6, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; No. 05, Primer on Strike, Picketing and Lockout; Section 3, Rule IV, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases 301 Section 3, Rule IV, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases. 302 United Restauror’s Employees & Labor Union-PAFLU v. Torres, [G.R. No. L-24993, December 18, 1968, 26 SCRA 435]. 295

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4. PICKETING. “Picketing” is the act of workers in peacefully marching to and fro before an establishment involved in a labor dispute generally accompanied by the carrying and display of signs, placards and banners intended to inform the public about the dispute.298 ================================== TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 3. Right to Peaceful Concerted Activities b. Who may declare a strike or lockout? ================================== 1. WHO MAY DECLARE A STRIKE OR LOCKOUT? a. In establishments with certified bargaining agent. Any certified or duly recognized bargaining agent may declare a strike in case of bargaining deadlock or unfair 299 labor practice. The employer may declare a lockout based on the same grounds. b. In establishments with no certified bargaining agent. In the absence of a certified or duly recognized bargaining agent, any legitimate labor organization in the establishment may declare a strike but only on the ground of unfair labor practice.300 The ground of bargaining deadlock cannot be invoked in support of a strike in an unorganized establishment where there is no certified or duly recognized bargaining representative for the simple reason that no CBA can be negotiated absent such certified or duly recognized bargaining agent. In this situation, the existence of a bargaining deadlock is an impossibility.301 c. Minority union cannot stage a strike. A strike conducted by a minority union is patently illegal because no labor dispute which will justify the conduct of a strike may exist between the employer and a minority union. To permit the union’s picketing activities would be to flaunt at the will of the majority.302 ================================== TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 3. Right to Peaceful Concerted Activities c. Requisites for a valid strike d. Requisites for a valid lockout ================================== 1. REQUISITES FOR A VALID STRIKE OR LOCKOUT. The requisites for a valid strike are likewise applicable to a lockout. The discussion below on the requisites are applicable to both strike and lockout. a. Procedural but mandatory requisites. In accordance with Article 263 and pertinent prevailing jurisprudence, a strike or lockout, in order to be valid and legal, must conform to the following procedural requisites: • First requisite ‐ It must be based on a valid and factual ground; • Second requisite ‐ A notice of strike/lockout must be filed with the NCMB‐DOLE; • Third requisite ‐ A notice must be served to the NCMB‐DOLE at least twenty‐four (24) hours prior to the taking of the strike/lockout vote by secret balloting, informing said office of the decision to conduct a strike/lockout vote, and the date, place, and time thereof;





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Phimco Industries, Inc. v. Phimco Industries Labor Association [PILA], G.R. No. 170830, Aug. 11, 2010; Piñero v. NLRC, G.R. No. 149610, Aug. 20, 2004. See also Section 5, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003], and as further amended by Department Order No. 40-A-03 [March 12, 2003]; Section 1, Rule V, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; No. 011, Primer on Strike, Picketing and Lockout. 305 San Miguel Corporation v. NLRC, G. R. No. 99266, March 2, 1999. 306 Article 261, Labor Code; See also Section 5, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003], and as further amended by Department Order No. 40-A-03 [March 12, 2003]; No. 012, Primer on Strike, Picketing and Lockout; Section 3, Rule V, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; No. 7, Guidelines Governing Labor Relations. 307 Article 263 [b], Labor Code; Section 5, Rule XXII, Book V, Rules to Implement the Labor Code, Ibid.; No. 012, Primer, Ibid.; Section 3, Rule V, NCMB Manual, Ibid.; No. 5, Guidelines, Ibid.. 308 No. 012, Primer on Strike, Picketing and Lockout; Section 3, Rule V, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; No. 5, Guidelines Governing Labor Relations. 309 Under Republic Act No. 6727, otherwise known as the “Wage Rationalization Act.” 310 Section 1 [18], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases. 311 Section 1 [17], Rule III, Ibid.. 303 304

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• Fourth requisite ‐ A strike/lockout vote must be taken where a majority of the members of the union, in case of a strike, or the members of the Board of Directors of the corporation or association or of the partners in a partnership, in case of a lockout, obtained by secret ballot in a meeting called for the purpose, must approve it; • Fifth requisite ‐ A strike/lockout vote report should be submitted to the NCMB‐DOLE at least seven (7) days before the intended date of the strike/lockout; • Sixth requisite ‐ Except in cases of union‐busting, the cooling‐off period of 15 days, in the case of unfair labor practices, or 30 days, in the case of collective bargaining deadlock, should be fully observed; and • Seventh requisite ‐ The 7‐day waiting period or strike/lockout ban reckoned after the submission of a strike/lockout vote report to the NCMB‐DOLE should also be fully observed in all cases. All the foregoing requisites, although procedural in nature, are mandatory and failure of a union or employer to comply therewith would render a strike or lockout illegal.303 2. FIRST REQUISITE: EXISTENCE OF VALID AND FACTUAL GROUND/S. a. Valid grounds. The law recognizes only two (2) grounds in support of a valid strike/lockout in accordance with Article 263 [c] of the Labor Code, viz.: 1. Collective bargaining deadlock (Economic Strike); and/or 2. Unfair labor practice (Political Strike).304 A strike or lockout not based on any of these two grounds is illegal.305 b. Some principles on the first requisite. 1. Violation of CBA, except when gross, is not an unfair labor practice, hence, may not be cited as ground for a valid strike or lockout. Ordinary violation of a CBA is no longer treated as an unfair labor practice but as a mere grievance which should be processed through the grievance machinery and voluntary arbitration. It becomes an unfair labor practice only when it is gross in nature which means that there is flagrant and/or malicious refusal to comply with the economic provisions thereof by either the employer or the union.306 2. Inter‐union or intra‐union dispute, not a valid ground.307 3. Violation of labor standards, not a valid ground.308 4. Wage distortion, not a valid ground.309 3. SECOND REQUISITE: FILING OF A NOTICE OF STRIKE OR NOTICE OF LOCKOUT WITH NCMB‐DOLE. Article 264 [a] of the Labor Code provides that no labor organization or employer shall declare a strike or lockout without first having filed a notice of strike or notice of lockout required under Article 263 [c] of the Labor Code. Article 263 [d] of the Labor Code requires that the notice of strike or notice of lockout must be in accordance with the implementing rules and regulations promulgated by the Secretary of Labor and Employment. The said rules and regulations are extensively cited and discussed in the appropriate notes and comments below. a. Notice of strike. A “notice of strike” refers to the notification filed by a duly registered labor union with the National Conciliation and Mediation Board (NCMB) of the Department of Labor and Employment (DOLE) informing the latter of its intention to go on strike because of the alleged commission by the employer of unfair labor practices or because of a deadlock in the collective bargaining negotiations.310 b. Notice of lockout. A “notice of lockout” refers to the notification filed by an employer with the NCMB‐DOLE informing the latter of its intention to temporarily cease its operation because of the alleged commission by a duly registered labor union of unfair labor practices or because of a deadlock in the collective bargaining negotiations.311 c. Where to file the notice of strike/lockout. A notice of strike or lockout or a request for preventive mediation is required to be filed with the regional branch of the NCMB having jurisdiction over the workplace of the union members. In case of multiple workplaces, the following rules must be observed: (a) Where two or more regional branches have jurisdiction over the various workplaces, the branch that first receives the notice shall acquire jurisdiction over the dispute to the exclusion of the others.





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Section 4, Rule IV, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; No. 06, Primer on Strike, Picketing and Lockout. See Section 1 [ww], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. No. 07, Primer on Strike, Picketing and Lockout. 315 See Section 10, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]; Section 1, Rule VII, No. 06[2], Primer on Strike, Picketing and Lockout; Section 1 [30], Rule III and Section 1, Rule VII, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; No. 2[b], Guidelines Governing Labor Relations. 316 Article 263 [f], Labor Code. 317 Bukluran ng Manggagawa sa Clothman Knitting Corporation – Solidarity of Unions in the Philippines for Empowerment and Reforms (BMC-SUPER) v. CA, G.R. No. 158158, Jan. 17, 2005; Stamford Marketing Corporation v. Josephine Julian, G.R. No. 145496, Feb. 24, 2004. 318 Article 263[f], Labor Code; Section 5, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003], and as further amended by Department Order No. 40-A-03 [March 12, 2003]; No. 2[c], Guidelines Governing Labor Relations; No. 06, Primer on Strike, Picketing and Lockout; Section 2, Rule VII, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases. 319 Article 263[c], Labor Code; Section 7, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by Article 1, Department Order No. 40-03, Series of 2003 [February 17, 2003]; No. 06, Primer on Strike, Picketing and Lockout; Section 5, Rule IV, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; No. 3, Guidelines Governing Labor Relations. 312 313 314

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(b) By written agreement of both parties, the venue of the dispute may be waived.312 4. THIRD REQUISITE: SERVICE OF A 24‐HOUR PRIOR NOTICE TO THE NCMB‐DOLE TO INFORM IT OF THE CONDUCT OF A STRIKE/LOCKOUT VOTE BY SECRET BALLOTING. In the 2005 case of Capitol Medical Center, Inc. v. NLRC, [G.R. No. 147080, April 26, 2005], it was imposed as additional requisite that a 24‐hour notice must be served to the NCMB‐DOLE prior to the taking of the strike/lockout vote by secret balloting, informing it of the union’s decision to conduct a strike vote or the employer’s decision to stage a lockout vote, as well as the date, place, and time thereof. 5. FOURTH REQUISITE: CONDUCT OF A STRIKE/LOCKOUT VOTE. a. Majority approval of the conduct of a strike. Article 264 [a] of the Labor Code expressly imposes the requirement that no labor organization shall declare a strike without the necessary strike vote first having been obtained and reported to the Department of Labor and Employment. Article 263 [f] of the Labor Code requires that a decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose. This process is called “strike vote balloting.”313 The purpose of a strike vote is to ensure that the decision to strike broadly rests with the majority of the union members in general and not with a mere minority. At the same time, it is meant to discourage wildcat strikes, union bossism and even corruption.314 b. Majority approval of lockout. Article 264 [a] of the Labor Code expressly requires that no employer shall declare a lockout without the necessary lockout vote first having been obtained and reported to the Department of Labor and Employment. Article 263 [f] of the Labor Code requires that a decision to declare a lockout must be approved by a majority of the board of directors of the corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting called for that purpose.315 c. Duration of the validity of the majority approval of a strike/lockout. The majority decision to stage a strike or lockout is valid for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote was taken.316 6. FIFTH REQUISITE: SUBMISSION OF THE STRIKE/LOCKOUT VOTE REPORT TO THE NCMB‐DOLE. a. Purpose for requiring a strike/lockout vote report. The evident intention of the law in mandatorily requiring the submission of the strike/lockout vote report is to reasonably regulate the right to strike or lockout which is essential to the attainment of legitimate policy objectives embodied in the law. Verily, mere substantial compliance with a mandatory provision will not suffice. Strict adherence to the mandate of the law is required.317 b. When to submit the strike/lockout vote report. A strike/lockout vote should be reported to the Regional Branch of the NCMB, at least seven (7) days before the actual staging of the intended strike/lockout, subject to the observance of the cooling‐off periods provided under the law.318 7. SIXTH REQUISITE: OBSERVANCE OF THE COOLING‐OFF PERIODS. a. General rule. The cooling‐off periods provided under the law before the intended date of the actual mounting of the strike/lockout are as follows: 1. In case of bargaining deadlock, the cooling‐off period is thirty (30) days; 2. In case of unfair labor practice, the cooling‐off period is fifteen (15) days.319 b. Exception in case of union‐busting. In case of an unfair labor practice involving the dismissal from employment of union officers duly elected in accordance with the union constitution and by‐laws which may constitute union‐busting, where the existence of the





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Article 263[c], Labor Code; Section 7, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by Article 1, Department Order No. 40-03, Series of 2003 [February 17, 2003]; No. 06, Primer on Strike, Picketing and Lockout; Section 5, Rule IV, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; No. 3, Guidelines Governing Labor Relations. Sukothai Cuisine and Restaurant v. CA, [G.R. No. 150437, July 17, 2006]. Article 263 [c], Labor Code. 323 See old provision of Section 3, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by Article 1, Department Order No. 09, Series of 1997 [21 June 1997]. 324 No. 010, Primer on Strike, Picketing and Lockout; National Federation of Sugar Workers (NFSW) v. Ovejera, G.R. No. L-59743, May 31, 1982; See also Phimco Industries, Inc. v. Phimco Industries Labor Association [PILA], G.R. No. 170830, Aug. 11, 2010. 325 National Federation of Sugar Workers (NFSW) v. Ovejera, [G.R. No. L-59743, May 31, 1982]. 326 Samahang Manggagawa sa Sulpicio Lines, Inc. – NAFLU v. Sulpicio Lines, Inc., G.R. No. 140992, March 25, 2004. 327 Union of Filipro Employees v. Nestle Philippines, Inc., G.R. No. 88710-13, Dec. 19, 1990; Liberal Labor Union v. Phil. Can Co., G.R. No. L-4834, March 28, 1952, 91 Phil. 72; Philippine Airlines v. Philippine Airlines Employees Association, G.R. No. L-8197, Oct. 31, 1958. 328 No. 06, Primer on Strike, Picketing and Lockout issued by the NCMB; National Federation of Sugar Workers (NFSW) v. Ovejera, [G.R. No. L-59743, May 31, 1982]. 329 Pilipino Telephone Corp. v. Pilipino Telephone Employees Association [PILTEA], [G.R. No. 160058, June 22, 2007]. 330 National Union of Workers in the Hotel, Restaurant and Allied Industries [NUWHRAIN-APL-IUF] Dusit Hotel Nikko Chapter v. The Honorable CA, [G.R. Nos. 163942 and 166295, November 11, 2008]. 331 CCBPI Postmix Workers Union v. NLRC, [G.R. No. 114521, November 27, 1998] and Coca-Cola Bottlers Phils, Inc. v. NLRC, [G.R. No. 123491, November 27, 1998, 299 SCRA 410]. 332 Samahang Manggagawa sa Sulpicio Lines, Inc. – NAFLU v. Sulpicio Lines, Inc., [G.R. No. 140992, March 25, 2004].

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union is threatened, the 15‐day cooling‐off period does not apply and the union may take action immediately after the strike vote is conducted and the results thereof duly submitted to the regional branch of the NCMB.320 In cases of union‐busting, except for the 15‐day cooling‐off period, all the other requisites must be fully complied with.321 c. Cooling‐off period when notice of strike is filed in an unorganized establishment. In unorganized establishments where a duly certified or recognized bargaining agent is absent, a notice of strike may be filed by any legitimate labor organization in behalf of its members but only on the ground of unfair labor practice because the other ground of collective bargaining deadlock is not available to it since there can be no CBA negotiation in an establishment where there is no certified bargaining agent. The cooling‐off period in this case is fifteen (15) days from the intended date of the strike. In case, however, the existence of the labor organization is threatened because of union‐ busting, the 15‐day cooling‐off period need not be complied with and the union may take action immediately after complying with the other mandatory procedural requisites.322 d. Reckoning of the cooling‐off periods. The start of the cooling‐off periods should be reckoned from the time the notice of strike or lockout is filed with the NCMB, a copy thereof having been served on the other party concerned.323 e. Purpose of the cooling‐off periods. In requiring a cooling‐off period, the avowed intent of the law is to provide an opportunity for mediation and conciliation by the NCMB‐DOLE. It is designed to afford the parties the opportunity to amicably resolve the dispute with the assistance of the Conciliators‐Mediators of the NCMB‐DOLE. It thus directs the NCMB‐DOLE to exert all efforts at mediation and conciliation to effect a voluntary settlement during the cooling‐off period. Should the dispute remain unsettled until the lapse of the required number of days from the mandatory filing of the notice, the labor union may strike or the employer may commence a lockout after having complied with the 7‐day requirement for the filing of the strike or lockout vote, as the case may be.324 8. SEVENTH REQUISITE: OBSERVANCE OF THE 7‐DAY WAITING PERIOD OR STRIKE/LOCKOUT BAN. a. Purpose of the 7‐day waiting period or strike/lockout ban. The seven (7) day waiting period is intended to give the Department of Labor and Employment an opportunity to verify whether the projected strike really carries the imprimatur of the majority of the union members.325 b. Waiting period or strike/lockout ban and cooling‐off period, distinguished. The 7‐day waiting period or strike/lockout ban is a distinct and separate requirement from the cooling‐off period prescribed by law. The latter cannot be substituted for the former.326 The cooling‐off period, on the one hand, is counted from the time of the filing of the notice of strike or lockout up to the intended or actual staging thereof. In case of unfair labor practice, the cooling‐off period is 15 days; and in case of collective bargaining deadlock, such period is 30 days. The 7‐day waiting period or strike/lockout ban, on the other hand, is reckoned from the time the strike/lockout vote report is submitted to the NCMB‐DOLE. Consequently, a strike or lockout is illegal for failure to comply with the prescribed mandatory cooling‐off period and the 7‐day waiting period or strike/lockout ban after the submission of the report on the strike/lockout vote.327 c. Effect on the 7‐day waiting period of strike/lockout ban if the strike/lockout vote is taken and reported within the cooling‐off period. It must be stressed that the requirements of cooling‐off period and 7‐day waiting period or strike/lockout ban must both be complied with, although the labor union may take a strike vote and the employer may conduct a lockout vote and report the same to the NCMB‐DOLE within the statutory cooling‐off period. In this case, the 7‐day waiting period or strike/lockout ban should be counted from the day following the expiration of the cooling‐off period. A contrary view would certainly defeat and render nugatory the salutary purposes behind the distinct requirements of cooling‐off period and the waiting period or strike/lockout ban.328 d. Some principles on cooling‐off period and 7‐day waiting period. 1. A strike staged on the same day the notice of strike is filed, held illegal.329 2. A strike mounted on the same day the strike vote report is submitted to the NCMB‐DOLE, held illegal.330 3. Deficiency of even one (1) day, held fatal.331 4. One‐day strike without complying with the 7‐day strike ban, held illegal.332





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Section 13, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]. See also De Leon v. National Labor Union, G.R. No. L-7586, Jan. 30, 1957, 100 Phil. 789; The Insular Life Assurance Co., Ltd. Employees Association - NATU v. The Insular Life Assurance Co., Ltd., G.R. No. L-25291, Jan. 30, 1971, 37 SCRA 244. Malayang Manggagawa sa Esso v. Esso Standard Eastern, Inc., G.R. No. L-24224, July 30, 1965, 14 SCRA 801. 336 Philippine Association of Free Labor Unions [PAFLU] v. Court of First Instance, G.R. No. L-49580, Jan. 17, 1983, 120 SCRA 1. 337 Philippine Commercial and Industrial Bank v. Philnabank Employees Association, G.R. No. L-29630, July 2, 1981, 105 SCRA 315. 333 334 335

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================================= TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 3. Right to Peaceful Concerted Activities e. Requisites for lawful picketing ================================= 1. REQUISITES FOR LAWFUL PICKETING. a. The requisites for a valid strike or lockout are not applicable to picketing. The 7 requisites for a valid strike or lockout discussed above do not apply to picketing. b. Requisites for lawful picketing. The following are the requisites: 1. It should be peacefully carried out; 2. There should be no act of violence, coercion or intimidation attendant thereto; 3. The ingress to (entrance) or egress from (exit) the company premises should not be obstructed; 4. Public thoroughfares should not be impeded.333 c. Right to picket is protected by the constitution and the law. Unlike a strike which is guaranteed under the Constitutional provision on the right of workers to conduct peaceful concerted activities under Section 3, Article XIII thereof, the right to picket is guaranteed under the freedom of speech and of expression and to peaceably assemble to air grievances in the Constitution under Section 4, Article III (Bill of Rights) thereof.334 The right to picket is likewise guaranteed as part of the right guaranteed under the law “to engage in concerted activities for purposes of collective bargaining for their mutual benefit and protection.”335 d. Effect of absence of employment relationship on picketing. Picketing, if peacefully carried out, cannot be prohibited even in the absence of employer‐employee relationship.336 e. Effect of the use of foul language during the conduct of the picket. In the event the picketers employ discourteous and impolite language in their picket, such may not result in, or give rise to, libel or action for damages.337 f. When picket becomes a strike. In distinguishing between a picket and a strike, the totality of the circumstances obtaining in a case should be taken into account. Santa Rosa Coca‐Cola Plant Employees Union v. Coca‐Cola Bottlers Phils., Inc., [G.R. Nos. 164302‐03, January 24, 2007]. Petitioners contend that what they conducted was a mere picketing and not a strike. In disagreeing to this contention, the High Court emphasized that it is not an issue in this case that there was a labor dispute between the parties as petitioners had notified the respondent of their intention to stage a strike, and not merely to picket. Petitioners’ insistence to stage a strike is evident in the fact that an amended notice of strike was filed even as respondent moved to dismiss the first notice. The basic elements of a strike are present in this case: 106 members of petitioner Union, whose respective applications for leave of absence on September 21, 1999 were disapproved, opted not to report for work on said date, and gathered in front of the company premises to hold a mass protest action. Petitioners deliberately absented themselves and instead wore red ribbons and carried placards with slogans such as: “YES KAMI SA STRIKE,” “PROTESTA KAMI,” “SAHOD, KARAPATAN NG MANGGAGAWA IPAGLABAN,” “CBA‐’WAG BABOYIN,” “STOP UNION BUSTING.” They marched to and fro in front of the company’s premises during working hours. Thus, petitioners engaged in a concerted activity which already affected the company’s operations. The mass concerted activity obviously constitutes a strike. Moreover, the bare fact that petitioners were given a Mayor’s permit is not conclusive evidence that their action/activity did not amount to a strike. The Mayor’s description of what activities petitioners were allowed to conduct is inconsequential. To repeat, what is definitive of whether the action staged by petitioners is a strike and not merely a picket is the totality of the circumstances surrounding the situation. g. Distinction between a strike and picketing. To strike is to withhold or to stop work by the concerted action of employees as a result of an industrial or labor dispute. The work stoppage may be accompanied by picketing by the striking employees outside of the company compound. While a strike focuses on stoppage of work, picketing focuses on publicizing the labor dispute and its





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See also Article 263 [i], Labor Code. Government Insurance System Employees Association, v. CIR, G.R. No. L-18734, Dec. 30, 1961. Philtread Workers Union [PTWU] v. Confesor, G.R. No. 117169, March 12, 1997, 269 SCRA 293]. 341 Article 263[g], Labor Code; Far Eastern University-Dr. Nicanor Reyes Medical Foundation [FEU-NRMF] v. FEU-NRMF Employees Association-Alliance of Filipino Workers [FEU-NRMFEA-AFW], G.R. No. 168362, Oct. 12, 2006. 342 Id.; See new Section 16, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by DOLE Department Order No. 40-G-03, Series of 2010, issued by DOLE Secretary Marianito Roque on March 29, 2010. 338 339 340

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incidents to inform the public of what is happening in the company struck against. A picket simply means to march to and from the employer’s premises, usually accompanied by the display of placards and other signs making known the facts involved in a labor dispute. It is a strike activity separate and different from the actual stoppage of work. Phimco Industries, Inc. v. Phimco Industries Labor Association (PILA), [G.R. No. 170830, August 11, 2010]. While the right of employees to publicize their dispute falls within the protection of freedom of expression and the right to peaceably assemble to air grievances, these rights are by no means absolute. Protected picketing does not extend to blocking ingress to and egress from the company premises. That the picket was moving, was peaceful and was not attended by actual violence may not free it from taints of illegality if the picket effectively blocked entry to and exit from the company premises. ================================================== TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 3. Right to Peaceful Concerted Activities f. Assumption of jurisdiction by the Secretary of Labor or Certification of the Labor dispute to the NLRC for compulsory arbitration g. Nature of Assumption Order or Certification Order h. Effect of defiance of Assumption or Certification Orders ================================================== Relevant Provisions: Articles 263 and 264, Labor Code 1. POWER TO ASSUME JURISDICTION OVER A LABOR DISPUTE OR TO CERTIFY IT TO THE NLRC FOR COMPULSORY ARBITRATION. a. Grounds for assumption or certification by the DOLE Secretary. Article 263 [g] of the Labor Code provides that when in the opinion of the Secretary of Labor and Employment, the labor dispute causes or will likely to cause a strike or lockout in an industry indispensable to the national interest, he is empowered to do either of two (2) things: 1. He may assume jurisdiction over the labor dispute and decide it himself; or 2. He may certify it to the NLRC for compulsory arbitration, in which case, it will be the NLRC which shall hear and decide it.338 This power may be exercised by the DOLE Secretary even before the actual staging of a strike or lockout since Article 263 [g] does not require the existence of a strike or lockout but only of a labor dispute involving national interest.339 b. What constitutes a national interest case? The Labor Code vests in the Secretary of Labor and Employment the discretion to determine what industries are indispensable to the national interest. Accordingly, upon the determination by the DOLE Secretary that such industry is indispensable to the national interest, he has authority to assume jurisdiction over the labor dispute in the said industry or certify it to the NLRC for compulsory arbitration.340 A match factory like the petitioner in Phimco Industries, Inc. v. Brillantes, [G.R. No. 120751, March 17, 1999, 304 SCRA 747], though of value, can scarcely be considered as an industry “indispensable to the national interest” as it cannot be in the same category as “generation or distribution of energy, or those undertaken by banks, hospitals, and export‐oriented industries.” Thus, it was declared that the DOLE Secretary acted with grave abuse of discretion in assuming jurisdiction over the labor dispute in this case without any showing that the petitioner was engaged in an industry indispensable to the national interest. c. Different rule on strikes and lockouts in hospitals, clinics and medical institutions. In line with the national concern for and the highest respect accorded to the right of patients to life and health, strikes and lockouts in hospitals, clinics and similar medical institutions shall, to every extent possible, be avoided and all serious efforts, not only by labor and management but government as well, be exhausted to substantially minimize, if not prevent, their adverse effects on such life and health, through the exercise however legitimate by labor of its right to strike and by management to lockout.341 In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical institutions, it shall be the duty of the striking union or locking‐out employer to provide and maintain an effective skeletal workforce of medical and other health personnel whose movement and services shall be unhampered and unrestricted as are necessary to insure the proper and adequate protection of the life and health of its patients, most especially emergency cases, for the duration of the strike or lockout.342





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Ibid.. Section 2, Rule VIII, 2005 Revised Rules of Procedure of the NLRC. University of Santo Tomas v. NLRC, G.R. No. 89920, Oct. 18, 1990; Union of Filipro Employees v. NLRC, G.R. No. 91025, Dec. 19, 1990, 192 SCRA 414. 346 Marcopper Mining Corporation v. Brillantes, G.R. No. 119381, March 11, 1996, 254 SCRA 595, 600. 347 See also Section 3[a], Rule VIII, 2005 Revised Rules of Procedure of the NLRC. 348 Id.. 349 Section 3[b], Rule VIII, 2005 Revised Rules of Procedure of the NLRC; Philippine Federation of Petroleum Workers [PFPW] v. CIR, 37 SCRA 711; International Pharmaceuticals, Inc. v. Secretary of Labor and Associated Labor Union [ALU], G.R. No. 92981-83, Jan. 9, 1992; St. Scholastica’s College v. Torres, G.R. No. 100158, June 29, 1992. 350 2nd Paragraph, Section 3[b], Rule VIII, The 2005 Revised Rules of Procedure of the NLRC; Bagong Bayan Corporation Realty Investors and Developers v. Ople, G.R. No. 73334, Dec. 8, 1986. 351 Capitol Medical Center, Inc. v. Trajano, [G.R. No. 155690, June 30, 2005]. 352 Telefunken Semiconductors Employees Union-FFW v. Court of Appeals, [G.R. Nos. 143013-14, December 18, 2000]. 353 Philcom Employees Union v. Philippine Global Communications, G.R. No. 144315, July 17, 2006. 354 St. Scholastica’s College v. Torres, G.R. No. 100158, June 29, 1992, 210 SCRA 565,570. 355 Union of Filipro Employees-Drug, Food and Allied Industries Unions-Kilusang Mayo Uno [UFE-DFA-KMU] v. Nestle Philippines, Inc., G.R. No. 158930-31, Aug. 22, 2006; See also International Pharmaceuticals, Inc. v. the Secretary of Labor, supra; Cirtek Employees Labor Union-FFW v. Cirtek Electronics, Inc., G.R. No. 190515, Nov. 15, 2010. 343 344

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In such cases, the DOLE Secretary may immediately assume, within twenty four (24) hours from knowledge of the occurrence of such a strike or lockout, jurisdiction over the same or certify it to the NLRC for compulsory arbitration. For this purpose, the contending parties are strictly enjoined to comply with such orders, prohibitions and/or injunctions as are issued by the DOLE Secretary or the NLRC, as the case may be, under pain of immediate disciplinary action, including dismissal or loss of employment status or payment by the locking‐out employer of backwages, damages and other affirmative relief, even criminal prosecution against either or both of them.343 d. Certified labor disputes. “Certified labor disputes” are national interest cases certified by the DOLE Secretary to the NLRC for compulsory arbitration under Article 263 [g] of the Labor Code.344 e. In certified cases, NLRC cannot amend the terms of the DOLE Secretary’s certification order. The NLRC, when sitting in a compulsory arbitration case certified to it by the DOLE Secretary, is not taking the role of a judicial court but as an administrative body charged with the duty to implement the order of the Secretary. As the implementing body, its authority does not include the power to amend the Secretary’s order.345 Having been certified to the NLRC, it becomes the proper forum for the full and complete settlement or adjudication of all labor disputes between the parties, as well as issues that are relevant to or incidents of the certified case.346 f. Effects of certification of labor disputes to the NLRC, similar to those assumed directly by the DOLE Secretary. The following are the effects of both assumption or certification of labor disputes: 1. On intended or impending strike or lockout. Upon assumption or certification, the intended or impending strike or lockout is automatically enjoined, notwithstanding the filing of any motion for reconsideration of the certification order nor the non‐resolution of any such motion which may have been duly submitted to the Office of the DOLE Secretary.347 2. On actual strike or lockout. If a work stoppage has already taken place at the time of the assumption or certification, all striking or locked‐out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout.348 3. On cases already filed or may be filed. All cases between the same parties, except where the assumption or certification order specifies otherwise, the issues submitted for arbitration which are already filed or may be filed and are relevant to or are proper incidents of the certified case, shall be considered subsumed or absorbed by the assumed or certified case, and shall be decided by the DOLE Secretary or, in certified cases, by the appropriate Division of the NLRC.349 4. On other pending cases. The parties to an assumed or certified case, under pain of contempt, are required to inform their counsels and the DOLE Secretary or NLRC Division concerned, of all cases pending with the Labor Arbiters and Voluntary Arbitrators relative or incident to the assumed or certified case before it.350 g. Some principles on assumption/certification power of the DOLE Secretary. 1. Prior notice and hearing are not required in the issuance of the assumption or certification order.351 2. Applicability of Article 221 to proceedings before the DOLE Secretary in assumption cases. Thus, technical rules of evidence prevailing in courts of law and equity have no room in administrative and/or quasi‐judicial proceedings such as in assumption or certification proceedings. Consequently, the DOLE Secretary may well resort to position‐paper‐type of proceeding.352 3. When the DOLE Secretary exercises the powers under Article 263 [g], he is granted “great breadth of discretion” in order to find a solution to a labor dispute.353 It necessarily includes and extends to all questions and controversies that may have arisen from the labor dispute over which he assumed jurisdiction, including those cases falling under the original and exclusive jurisdiction of Labor Arbiters.354 It also includes matters incidental to the labor dispute, i.e., issues that are necessarily involved in the dispute itself, not just to those ascribed in the notice of strike or otherwise submitted to him for resolution.355 4. The DOLE Secretary may seek the assistance of law enforcement agencies like the Philippine National Police to ensure compliance with the provision thereof as well as with such orders as he may issue to enforce the same.





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h. Return‐to‐work order, part of assumption/certification order even if not expressly stated therein. It is clear from the provision of Article 263 [g] that the moment the DOLE Secretary assumes jurisdiction over a labor dispute involving national interest or certifies it to the NLRC for compulsory arbitration, such assumption or certification has the effect of automatically enjoining the intended or impending strike. It is thus not necessary for the DOLE Secretary to issue another order directing the strikers to return to work. The mere issuance of an assumption or certification order automatically carries with it a return‐to‐work order, even if the directive to return to work is not expressly stated therein.356 Thus, it is error for striking workers to continue with their strike alleging absence of a return‐to‐work order since Article 263 [g] is clear that once an assumption/certification order is issued, strikes are enjoined or, if one has already taken place, all strikers should immediately return to work.357

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j. Some principles on return‐to‐work order. 1. Return‐to‐work order is enforceable irrespective of the legality of the strike.360 2. Upon assumption or certification, the parties should revert to the status quo ante litem which refers to the state of things as it was before the labor dispute or the state of affairs existing at the time of the filing of the case. It is the last actual, peaceful and uncontested status that preceded the actual controversy.361 3. Retrenched or redundant employees whose termination brought about the labor dispute are included in the return‐to‐work order.362 4. To implement the return‐to‐work order, the norm is actual reinstatement. However, payroll reinstatement in lieu of actual reinstatement may properly be resorted to when special circumstances exist that render actual reinstatement impracticable or otherwise not conducive to attaining the purposes of the law. Examples: a. University of Sto. Tomas v. NLRC, [G.R. No. 89920, October 18, 1990, 190 SCRA 758], where the teachers ordered to return to work could not be given back their academic assignments since the return‐to‐work order of the DOLE Secretary was issued in the middle of the first semester of the academic year. The NLRC, to which the labor dispute was certified, was, therefore, faced with a situation where the striking teachers were entitled to a return‐to‐work order, but the university could not immediately reinstate them since it would be impracticable and detrimental to the students to change teachers at that point. The Supreme Court affirmed the validity of the payroll reinstatement order of the NLRC and ruled that the NLRC did not commit grave abuse of discretion in providing for the alternative remedy of payroll reinstatement. It observed that the NLRC was only trying its best to work out a satisfactory ad hoc solution to a festering and serious problem. b. University of Immaculate Concepcion, Inc. v. The Honorable Secretary of Labor, [G.R. No. 151379, January 14, 2005], where it was pronounced that while payroll reinstatement is not allowed under Article 263 [g] as the phrase “under the same terms and conditions” embodied therein makes it clear that the norm is actual reinstatement, payroll reinstatement in lieu of actual reinstatement may, however, be justified, as an exception to the rule, when special circumstances exist that render actual reinstatement impracticable or otherwise not conducive to attaining the purposes of the law. The special circumstances in the instant case no doubt refer to the final decision of the panel of arbitrators as to the confidential nature of the positions of the twelve (12) private respondents, thereby rendering their actual and physical reinstatement impracticable and more likely to exacerbate the situation. The payroll reinstatement in lieu of actual reinstatement, therefore, appears justified as an exception to the rule until the validity of their termination is finally resolved. 5. Non‐waiver of demands upon voluntary return to work. The act of the strikers in voluntarily returning to work does not result in the waiver of their original demands. Such act of returning to work only means that they desisted from the strike which desistance is a personal act of the strikers and cannot be used against the union and interpreted as a waiver by it of its original demands for which the strike was adopted as a weapon.363 6. Filing of a motion for reconsideration does not affect the enforcement of a return‐to‐work order.364 7. Intransigence to a return‐to‐work order must be duly proved to hold an employee liable therefor.365

Steel Corporation of the Philippines v. SCP Employees Union – National Federation of Labor Unions, G.R. Nos. 169829-30, April 16, 2008; Calamba Medical Center, Inc. v. NLRC, G.R. No. 176484, Nov. 25, 2008. Id.. Philippine Refining Company Workers’ Union vs. Philippine Refining Company, G.R. No. L-1668, March 29, 1948, 80 Phil. 533; Kaisahan ng mga Manggagawa sa Kahoy sa Pilipinas v. Gotamco Sawmill, G.R. No. L-1573, March 29, 1948, 80 Phil. 521. 359 Marcopper Mining Corporation v. Brillantes, G.R. No. 119381, March 11, 1996; Union of Filipino Employees v. Nestle Philippines, Inc., G.R. No. 88710-13, Dec. 19, 1990, cited in No. 033, Primer on Strike, Picketing and Lockout; No. 23, Guidelines Governing Labor Relations; Sarmiento v. Tuico, G.R. Nos. 75271-73, June 27, 1988, 162 SCRA 676. 360 Union of Filipro Employees v. Nestle Philippines, Inc., G.R. No. 88710-13, Dec. 19, 1990. 361 Overseas Workers’ Welfare Administration v. Chavez, G.R. No. 169802, June 8, 2007. 362 PLDT v. Manggagawa ng Komunikasyon sa Pilipinas, [G.R. No. 162783, July 14, 2005]. 363 Bisaya Land Transportation Co., Inc. v. CIR, G.R. No. L-10114, Nov. 26, 1957, 102 Phil. 438. 364 (Telefunken Semiconductors Employees Union-FFW v. Secretary of Labor and Employment, G.R. Nos. 122743 and 127215, Dec. 12, 1997, 283 SCRA 145. 365 Calamba Medical Center, Inc. v. NLRC, [G.R. No. 176484, November 25, 2008]. 356 357 358

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i. Nature of return‐to‐work order. A return‐to‐work order is not offensive to the constitutional provision against involuntary servitude.358 It must be discharged as a duty even against the worker’s will. The worker must return to his job together with his co‐workers so that the operation of the company can be resumed and it can continue serving the public and promoting its interest. It is executory in character and should be strictly complied with by the parties even during the pendency of any petition questioning its validity in order to maintain the status quo while the determination is being made.359





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2. NATURE OF ASSUMPTION ORDER OR CERTIFICATION ORDER.

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a. A police power measure. The power to issue assumption or certification orders is an extraordinary authority granted to the President or the Secretary of Labor and Employment, the exercise of which should be strictly limited to national interest cases.367 It is in the nature of a police power measure. This is done for the promotion of the common good considering that a prolonged strike or lockout can be inimical to the national economy. The DOLE Secretary is mandated to act to maintain industrial peace. Thus, his assuming jurisdiction over a labor dispute or his certification thereof to the NLRC for compulsory arbitration is not intended to impede the workers’ right to strike but to obtain a speedy settlement of the dispute.368 Having been enacted pursuant to the police power of the State, Article 263 [g] requires that the powers thereunder be exercised only in labor disputes involving industries indispensable to the national interest.369 A prolonged strike or lockout can be inimical to the national economy and, therefore, the situation is imbued with public necessity and involves the right of the State and the public to self‐protection.370

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a. Effect of defiance of assumption or certification orders of the DOLE Secretary. The defiance by the union, its officers and members of the Labor Secretary's assumption of jurisdiction or certification order constitutes a valid ground for dismissal.372 The following are the justifications for the defiant employees’ dismissal: 1. A strike that is undertaken after the issuance by the DOLE Secretary of an assumption or certification order becomes a prohibited activity and thus illegal. The striking union officers and members, as a result, are deemed to have lost their employment status for having knowingly participated in an illegal strike. 2. From the moment a worker defies a return‐to‐work order, he is deemed to have abandoned his job.373 3. By staging a strike after the assumption or certification for compulsory arbitration, the workers forfeit their right to be readmitted to work, having, in effect, abandoned their employment.374

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b. All defiant strikers, regardless of whether they are officers or ordinary members, are deemed dismissed. This doctrine is applicable to all striking employees, whether a union officer or a member. This has been the consistent ruling of the Supreme Court in a long line of cases spanning several decades. Once the Secretary of Labor and Employment assumes jurisdiction over a labor dispute or certifies it to the NLRC for compulsory arbitration, such jurisdiction should not be interfered with by the application of the coercive processes of a strike or lockout. Any defiance thereof is a valid ground for the loss of employment status.375 The workers defying a return‐to‐work order issued in connection with the assumption or certification by the Secretary of Labor and Employment may, in fact, be subjected not only to immediate disciplinary action such as dismissal or loss of employment status but to criminal prosecution as well.376 The defiant strikers could be validly replaced.377

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c. Period of defiance of the return‐to‐work order, not material; defiance of less than one (1) day, sufficient to effect termination of defiant strikers. The length of time within which the return‐to‐work order was defied by the strikers is not significant in determining their liability for the legal consequences thereof. The following cases are illustrative of this rule: 1. University of San Agustin Employees’ Union‐FFW v. The CA, [G.R. No. 169632, March 28, 2006], the period of defiance was from 8:45 a.m. to 5:25 p.m. on September 19, 2003.

Bagong Pagkakaisa ng Manggagawa ng Triumph International v. Secretary of the Department of Labor and Employment, [G.R. Nos. 167401 and 167407, July 5, 2010]. No. 22, Guidelines Governing Labor Relations. See Philtread Workers Union [PTWU] v. Confesor, G.R. No. 117169, March 12, 1997, 269 SCRA 293. 369 Philippine School of Business Administration-Manila v. Noriel, G.R. No. L-80648, Aug. 15, 1988, 164 SCRA 402; Sarmiento v. Tuico, G.R. Nos. 75271-73, June 27, 1988, 162 SCRA 676; Philippine Airlines, Inc. v. Secretary of Labor and Employment, G.R. No. 88210, Jan. 23, 1991, 193 SCRA 223. 370 Phimco Industries, Inc. v. Brillantes, G.R. No. 120751, March 17, 1999, 304 SCRA 747, 763. 371 Manila Diamond Hotel Employees’ Union v. CA, G.R. No. 140518, Dec. 16, 2004. 372 Bagong Pagkakaisa ng Manggagawa ng Triumph International v. Secretary of the Department of Labor and Employment, G.R. Nos. 167401 and 167407, July 5, 2010. 373 Article 263 [g], Labor Code; Section 5, Rule XXII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003], and as further amended by Department Order No. 40-A-03 [March 12, 2003]; Philippine Airlines, Inc. v. Brillantes, G.R. No. 119360, Oct. 10, 1997, 280 SCRA 515. 374 Steel Corporation of the Philippines v. SCP Employees Union – National Federation of Labor Unions, G.R. Nos. 169829-30, April 16, 2008. 375 Manila Hotel Employees Association v. Manila Hotel Corp., G.R. No. 154591, March 5, 2007, citing Grand Boulevard Hotel v. GLOWHRAIN, G.R. No. 153664, July 18, 2003, 406 SCRA 688, 710; Telefunken Semiconductors Employees Union-FFW v. CA, G.R. Nos. 143013-14, Dec. 18, 2000, 348 SCRA 565, 582; FFW v. Inciong, G.R. No. 49983, April 20, 1982, 208 SCRA 157, 165. 376 San Juan de Dios Educational Foundation Employees Union – AFW v. San Juan de Dios Educational Foundation, Inc. [Hospital], G.R. No. 143341, May 28, 2004. 377 Marcopper Mining Corporation v. Brillantes, G.R. No. 119381, March 11, 1996, 254 SCRA 595; Allied Banking Corporation v. NLRC, G.R. No. 119381, March 11, 1996, 258 SCRA 724. 366 367

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3. EFFECT OF DEFIANCE OF ASSUMPTION OR CERTIFICATION ORDERS.

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b. Grant of assumption/certification power is for the protection of the State, not of labor nor of employer. Consequent to such exercise of police power, it is provided under Article 263 [g] that all workers must immediately return to work and all employers must readmit all of them under the same terms and conditions prevailing before the strike or lockout. The law uses the precise phrase of “under the same terms and conditions,” revealing that it contemplates only actual reinstatement. This is in keeping with the rationale that any work stoppage or slowdown in that particular industry can be inimical to the national economy. It is clear that Article 263 [g] was not written to protect labor from the excesses of management, nor was it written to ease management from expenses, which it normally incurs during a work stoppage or slowdown. It is an error to view the assumption order of the DOLE Secretary as a measure to protect the striking workers from any retaliatory action from the employer. This law was written as a means to be used by the State to protect itself from an emergency or crisis. It is not for labor, nor is it for management.371 .

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8. The extension of the return‐to‐work order and the admission of all striking workers by the company, cannot in any way be considered a waiver that the union officers can use to negate liability for their illegal actions of defying the first return‐to‐work order and for commission of illegal acts in the course of the strike.366





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2. Federation of Free Workers v. Inciong, [G.R. No. L‐49983, April 20, 1992], the period of defiance was only nine (9) days. 3. Sarmiento v. Tuico, [G.R. No. 75271‐73, June 27, 1988], the period of defiance was for five (5) months.

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d. No practice of giving 24 hours to strikers within which to return to work. In the same case of University of San Agustin [supra], it was held that there is no such practice of giving the strikers twenty‐four hours (24) within which to return to work. There is no law or jurisprudence recognizing this practice.

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Relevant Provision: Article 264, Labor Code 1. PARTICIPATION IN LAWFUL STRIKE.

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e. Some principles on defiance of the assumption/certification order. 1. The assumption/certification order may be served at any time of the day.378 2. If both parties have acted in pari delicto in that the employer is guilty of illegal lockout and the union is culpable for illegal strike, the dismissal of the striking employees is unwarranted and their reinstatement should be ordered as a matter of course.379 3. Absent any notice to the union of the assumption/certification order, the strike does not automatically become illegal. 380 4. Service of the assumption/certification order and return‐to‐work order on the guard on duty instead of the president of the union who was authorized to receive the same is not valid.381 But if the strikers and their counsel were duly served with the assumption order and had actually admitted this fact in their pleadings and during the mandatory conference before the NLRC, the service of said order is deemed valid.382 5. The refusal to acknowledge receipt of such orders and other processes is an apparent attempt to frustrate the ends of justice, hence, invalid. The union cannot be allowed to thwart the efficacy of the assumption and return‐to‐work orders issued in the national interest through the simple expediency of refusing to acknowledge receipt thereof.383 ================================= TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 3. Right to Peaceful Concerted Activities i. Illegal Strike (1) Liability of officers of the unions (2) Liability of ordinary workers (3) Waiver of illegality of strike =================================

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The declaration or actual conduct of a strike does not result in the severance of the employment relationship nor a renunciation thereof. The employment relationship is merely suspended during the period of work stoppage.384 An employee who participates in a lawful strike is not deemed to have abandoned his employment but is merely exercising his right to self‐organization precisely to protect his rights as an employee and/or to obtain better working conditions.385 Such participation should not constitute sufficient ground for the termination of his employment even if a replacement has already been hired by the employer during such lawful strike.386 2. PARTICIPATION IN ILLEGAL STRIKE.

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a. Distinction in the liability between union officers and ordinary union members. 1. Union officers. The mere finding or declaration of illegality of a strike will result in the termination of all union officers. It is not required that the officers should commit an illegal during the strike.387 Telefunken Semiconductors Employees Union-FFW v. Secretary of Labor and Employment, [G.R. Nos. 122743 and 127215, December 12, 1997, 283 SCRA 145]. Philippine Airlines, Inc. v. Brillantes, [G.R. No. 119360, October 10, 1997, 280 SCRA 515]. PNOC Dockyard and Engineering Corporation v. NLRC, [G.R. No. 118223, June 26, 1998, 291 SCRA 231, 237-246]. 381 Id. 382 Manila Hotel Employees Association v. Manila Hotel Corp., [G.R. No. 154591, March 5, 2007]. 383 Navale v. CA, [G.R. No. 109957, February 20, 1996, 253 SCRA 705]. 384 Rex Taxicab Co. v. CIR, 40 O. G. 138, 70 Phil. 621. 385 No. 029, Primer on Strike, Picketing and Lockout. 386 Article 264 [a], Labor Code; No. 030, Primer on Strike, Picketing and Lockout. 387 Phimco Industries, Inc. v. Phimco Industries Labor Association [PILA], G.R. No. 170830, Aug. 11, 2010. 378 379 380

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To cast doubt on the regularity of the aforesaid service of the two orders issued by the DOLE Secretary, petitioners in the same case of Telefunken [supra] cite Section 1, Rule IX of the NLRC Manual on Execution of Judgment, to wit: “Section 1. Hours and Days When Writ Shall Be Served. – Writ of execution shall be served at any day, except Saturdays, Sundays and holidays, between the hours of eight in the morning and five in the afternoon. xxx” The Supreme Court, however, declared that the above‐cited rule is not applicable to the case at bar inasmuch as Sections 1 and 4, Rule III of the same NLRC Manual provide that such “execution shall issue only upon a judgment or order that finally disposes of an action or proceeding.” The assumption and return‐to‐work orders issued by the DOLE Secretary are not the kind of orders contemplated in the said rule of the NLRC because such orders did not yet finally dispose of the labor dispute.





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b. Some principles on illegality of a strike. 1. For purposes of determining who the union officers are in the matter of ascertaining who to dismiss, the certifications as to the union officers issued by the Chief of the Labor Organization Division of the Bureau of Labor Relations (BLR), being public records, enjoy the presumption of regularity and deserve weight and probative value. Thus, in the absence of a clear and convincing evidence that they are flawed, they should be taken on their face value.390 2. The fact that the employees are signatories to the CBA does not sufficiently establish their status as union officers during the illegal strike. Neither were their active roles during the bargaining negotiations be considered as evidence of their being union officers.391 3. Only the union officers during the period of illegal strike are liable. 392 if the employees acted as union officers after a strike, they may not be held liable and, therefore, could not be terminated in their capacity as such.393 4. Shop stewards are union officers.394 Hence, they should be terminated upon the declaration of the illegality of the strike.395 5. Union officers may be dismissed despite the fact that the illegal strike was staged only for 1 day.396 6. If the dispositive portion of the decision failed to mention the names of union officers, resort should be made to the text of the decision.397 7. Wholesale forfeiture of employment status is not allowed. The mere filing of charges against an employee for alleged illegal acts during a strike does not by itself justify his dismissal. The charges must be proved in an investigation duly called for that purpose, where the employee should be given an opportunity to defend himself. This holds true even if the alleged ground constitutes a criminal offense.398 8. The employer cannot just unceremoniously dismiss a hundred of its employees in the absence of clear and convincing proof that these people were indeed guilty of the acts charged and then, afterwards, go to court to seek validation of the dismissal it whimsically executed. That certainly cannot be allowed.399

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3. PARTICIPATION IN THE COMMISSION OF ILLEGAL ACTS DURING A STRIKE.

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a. Legality or illegality of strike, immaterial. As far as liability for commission of illegal acts during the strike, the issue of legality or illegality of the strike is irrelevant. As long as the union member commits an illegal act in a strike, be it legal or illegal, his employment can be terminated.400

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b. Meaning of “illegal acts” under Article 264 [a]. The term “illegal acts” under Article 264 [a] may encompass a number of acts that violate existing labor or criminal laws, such as the following: (1) Violation of Article 264 [e] of the Labor Code which provides that “[n]o person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares.” (2) Commission of crimes and other unlawful acts in carrying out the strike.401 (3) Violation of any order, prohibition, or injunction issued by the DOLE Secretary or NLRC in connection with the assumption of jurisdiction or certification order under Article 263 [g] of the Labor Code.402 This enumeration is not exclusive as jurisprudence abound where the term “illegal acts” has been interpreted and construed to cover other breaches of existing laws.

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c. Mere substantial evidence required to hold strikers guilty of commission of illegal acts. While in all cases, it is required that the striker must be identified, but proof beyond reasonable doubt is not required; substantial evidence, available under the attendant circumstances, suffices to justify the imposition of the

Stamford Marketing Corp., v. Julian, G.R. No. 145496, Feb. 24, 2004. Solidbank Corporation v. Gamier, G.R. No. 159460, Nov. 15, 2010. Coca-Cola Bottlers Phils, Inc. v. NLRC, G.R. No. 123491, Nov. 27, 1998, 299 SCRA 410. 391 Id. 392 Lapanday Workers Union v. NLRC, 248 SCRA 95, 106. 393 Coca-Cola Bottlers Phils, Inc. v. NLRC, [supra]. 394 Santa Rosa Coca-Cola Plant Employees Union v. Coca-Cola Bottlers Phils., Inc., [G.R. Nos. 164302-03, January 24, 2007]. 395 C. Alcantara & Sons, Inc. v. CA, [G.R. No. 155109, September 29, 2010]. 396 Samahang Manggagawa sa Sulpicio Lines, Inc. – NAFLU v. Sulpicio Lines, Inc., [G.R. No. 140992, March 25, 2004]. 397 Nissan Motors Philippines, Inc. v. Secretary of Labor and Employment, [G.R. Nos. 158190-91, October 31, 2006]. 398 Telefunken Semiconductors Employees Union-FFW v. Secretary of Labor and Employment, [G.R. Nos. 122743 and 127215, December 12, 1997, 283 SCRA 145]. 399 Times Transportation Co., Inc. v. NLRC, [G.R. Nos. 148500-01, November 29, 2006]. 400 Toyota Motor Phils. Corp. Workers Association [TMPCWA] v. NLRC, G.R. Nos. 158786 &158789, Oct. 19, 2007; See also Shell Oil Workers Union v. Shell Company of the Philippines, G.R. No. L-28607, May 31, 1971, 43 SCRA 224; Chua v. NLRC, G.R. No. 105775, Feb. 8, 1993, 218 SCRA 545. 401 National Brewery and Allied Industries Labor Union v. San Miguel Brewery, Inc., G.R. No. L- 19017, December 27, 1963, 9 SCRA 847. 402 Toyota Motor Phils. Corp. Workers Association [TMPCWA] v. NLRC, [G.R. Nos. 158786 and 158789, October 19, 2007]. 388 389

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2. Ordinary union members. The mere finding or declaration of illegality of a strike will not result in termination of ordinary union members. For an ordinary union member to suffer termination, it must be shown that he has committed illegal acts during the strike.388 The reason for this distinction is that the union officers have the duty to guide their members to respect the law. If instead of doing so, the officers urged the members to violate the law and defy the duly constituted authorities, their dismissal from the service is a just penalty or sanction for their unlawful act. Their responsibility as main players in an illegal strike is greater than that of the ordinary union members and, therefore, limiting the penalty of dismissal only for the former for participation in an illegal strike is in order.389





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b. Employer’s act of condonation. An employer’s act of condonation or forgiveness of the effects of a wrongful act committed by an employee is an effective waiver of his right to discipline or dismiss the latter. Condonation may be express or implied. While the inaction of an employer may not be considered as an implied act of condonation if there is no clear proof that he has knowledge of the employee’s wrongful act, however, if such inaction occurs after the discovery of such wrongful act so as to give the impression or inference that the employer has condoned the same, the employer can no longer invoke such wrongful act as a ground to terminate the employee. It should be underscored, however, that the condonation of one wrongful act does not, in any way, involve the condonation of other wrongful acts for which the employer may still proceed against the erring employee. Interphil Laboratories Employees Union‐FFW v. Interphil Laboratories, Inc., [G.R. No. 142824, December 19, 2001], In this illegal strike case, one of the issues raised is whether the act of the employer in paying substantial separation package to some officers of the union during the pendency of the illegal strike case (which ultimately was declared illegal by the Supreme Court) may be considered as an act of condonation of the illegal acts committed in the Phimco Industries, Inc. v. Phimco Industries Labor Association [PILA], G.R. No. 170830, Aug. 11, 2010, citing Asso. of Independent Unions in the Phil. v. NLRC, 364 Phil. 697, 707 [1999]. Phimco Industries, Inc. v. Phimco Industries Labor Association [PILA], G.R. No. 170830, Aug. 11, 2010. Solidbank Corporation v. Gamier, G.R. No. 159460, Nov. 15, 2010; See also C. Alcantara & Sons, Inc. v. CA, G.R. No. 155109, Sept. 29, 2010. 406 Association of Independent Unions in the Philippines [AIUP] v. NLRC, G.R. No. 120505, March 25, 1999, 305 SCRA 219; 364 Phil. 697, 707; G & S Transport Corp. v. Infante, G.R. No. 160303, Sept. 13, 2007. 407 Phimco Industries, Inc. v. Phimco Industries Labor Association [PILA], G.R. No. 170830, Aug. 11, 2010. 408 G & S Transport Corp. v. Infante, [G.R. No. 160303, September 13, 2007]. 409 C. Alcantara & Sons, Inc. v. CA, G.R. No. 155109, Sept. 29, 2010. 410 R.B. Michael Press v. Galit, [G.R. No. 153510, February 13, 2008]. 403 404 405

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penalty of dismissal on participating workers and union officers.403 For this purpose, the individual identity of the union members who participated in the commission of illegal acts may be proved thru affidavits and photographs.404 Photographs alone, however, will not suffice. In Arellano University Employees and Workers Union v. CA, [G.R. No. 139940, September 19, 2006], while the university adduced photographs showing the strikers picketing outside its premises, it failed to identify who they were. It thus failed to meet the “substantiality of evidence test” applicable in dismissal cases. d. Some principles on commission of illegal acts in the course of the strike. 1. Liability for illegal acts should be determined on an individual basis. In all cases, the erring strikers must be identified individually although proof beyond reasonable doubt is not required. Substantial evidence available under the attendant circumstances which may justify the imposition of the penalty of dismissal may suffice.405 Simply referring to them as “strikers,” or “complainants in this case” is not enough to justify their dismissal.406 2. Only members who are identified as having participated in the commission of illegal acts are liable. Those who did not participate should not be blamed therefor.407 3. To effectively hold ordinary union members liable, those who participated in the commission of illegal acts must not only be identified but the specific illegal acts they each committed should be described with particularity.408 Examples: a. National Union of Workers in the Hotel, Restaurant and Allied Industries [NUWHRAIN‐APL‐IUF] Dusit Hotel Nikko Chapter v. The Honorable CA, [G.R. Nos. 163942 and 166295, November 11, 2008], while the Hotel was able to prove before the NLRC that the strikers blocked the ingress to and egress from the premises of the Hotel, but it failed to specifically point out the participation of each of the union members in the commission of illegal acts during the picket and the strike. For this lapse in judgment or diligence, the sixty‐one (61) ordinary union members were ordered reinstated. b. Solidbank Corporation v. Gamier, [G.R. No. 159460, November 15, 2010], the dismissal of the respondent‐union members was declared unjustified in view of the absence of a clear showing that they committed specific illegal acts during the mass actions and concerted work boycott. Petitioners have not adduced evidence on such illegal acts committed by each of the individual respondents who are union members. Instead, petitioners simply point to their admitted participation in the mass actions which they knew to be illegal, being in violation of the Secretary’s assumption order. 4. Dismissal of the criminal case filed by reason of the illegal acts committed in the course of the strike does not extinguish liability under the Labor Code.409 Nor does such dismissal bar the admission of the affidavits, documents, and photos presented to establish their identity and guilt during the hearing of the petition to declare the strike illegal. The technical grounds that the union may interpose for denying admission of the photos are also not binding on the NLRC. 4. WAIVER OF ILLEGALITY OF STRIKE. a. Waiver, meaning. A waiver is a voluntary and intentional relinquishment or abandonment of a known legal right or privilege. A waiver to be valid and effective, must be couched in clear and unequivocal terms which leave no doubt as to the intention of a party to give up a right or benefit which legally pertains to him. Hence, the management prerogative to discipline employees and impose punishment is a legal right which cannot, as a general rule, be impliedly waived.410





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Insurefco Paper Pulp and Project Workers Union v. Insular Sugar Refining Corp., G.R. Nos. L-7594 and L-7596, Sept. 8, 1954, 95 Phil. 761. See also Reformist Union of R.B. Liner, Inc. v. NLRC, G.R. No. 120482, Jan. 27, 1997, 266 SCRA 713. Article 254, as amended by Batas Pambansa Bilang 227, June 1, 1982; See Section 14, Rule XXII, Book V thereof, as amended by Department Order No. 40-03, Series of 2003 where there is reference to Article 263 instead of Article 264. 414 Caltex Refinery Employees Association [PAFLU] v. Lucero, G.R. No. L-15338, 4 SCRA 1196. 411 412 413

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course of the illegal strike consisting of “overtime boycott” and “work slowdown.” The High Tribunal ruled in the negative: “Finally, the Court cannot agree with the proposition that respondent company, in extending substantial separation package to some officers of petitioner union during the pendency of this case, in effect, condoned the illegal acts they committed. “Respondent company correctly postured that at the time these union officers obtained their separation benefits, they were still considered employees of the company. Hence, the company was merely complying with its legal obligations. Respondent company could have withheld these benefits pending the final resolution of this case. Yet, considering perhaps the financial hardships experienced by its employees and the economic situation prevailing, respondent company chose to let its employees avail of their separation benefits. The Court view's the gesture of respondent company as an act of generosity for which it should not be punished.” i. Compliance with return‐to‐work order does not mean waiver of illegality of strike; exception. A return‐to‐work order does not have the effect of rendering as moot and academic the issue of the legality of the strike.411 However, according to Trans‐Asia Shipping Lines, Inc. – Unlicensed Crews Employees Union – Associated Labor Unions [TASLI‐ALU] v. CA, [G.R. No. 145428, July 7, 2004], an employer may be considered to have waived its right to proceed against the striking employees for alleged commission of illegal acts during the strike when, during a conference before the Chairman of the NLRC, it agreed to reinstate them and comply fully with the return‐to‐work order issued by the DOLE Secretary.412 ================================= TOPIC UNDER THE SYLLABUS: G. LABOR RELATIONS LAW 3. Right to Peaceful Concerted Activities j. Injunctions (1) Requisites for Labor Injunctions (2) “Innocent Bystander Rule” ================================= Relevant Provision: Article 254, Labor Code 1. INJUNCTION IN STRIKE OR LOCKOUT CASES. a. Injunction prohibited. Article 254 of the Labor Code explicitly provides that 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 (referring to the injunction power of the NLRC) and 264 (referring to the prohibited activities during a strike or lockout) of the same Code. Deserving of similar exception is Article 263 [g] (referring to assumption/certification power of the DOLE Secretary in national interest cases).413 b. Strikes or lockouts may not be enjoined; exceptions. As a general rule, strikes and lockouts that are validly declared enjoy the protection of the law and cannot be enjoined unless illegal acts are committed or threatened to be committed in the course thereof. This policy applies even if the strike appears to be illegal in nature. The rationale for this policy is the protection extended to the right to strike under the Constitution and the law. It is basically treated as a weapon that the law guarantees to employees for the advancement of their interest and for their protection.414 Exceptions. However, in some cases, injunctions issued to enjoin the conduct of the strike itself and not only the commission of illegal or prohibited acts in the course thereof, were held to be valid. San Miguel Corporation v. NLRC, [G.R. No. 119293, June 10, 2003]. The Supreme Court ruled that injunction may be issued not only against the commission of illegal acts in the course of the strike but against the strike itself. In this case, the notice of strike filed by the union has been converted into a preventive mediation case. Having been so converted, a strike can no longer be staged based on said notice. Upon such conversion, the legal effect is that there is no more notice of strike to speak of. When the NCMB ordered the preventive mediation, the union had thereupon lost the notice of strike it had filed. However, the NCMB which effected the conversion has, under the law, no coercive powers of injunction. Consequently, petitioner company in the instant case sought recourse from the NLRC. The NLRC, however, issued a TRO only for the free ingress to and egress from petitioner’s plants, but did not enjoin the conduct of the unlawful strike itself. It ignored the fatal lack of notice of strike





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END OF DISCUSSION ON TOPIC G. LABOR RELATIONS LAW

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See also PAL v. Drilon, G.R. No. 88210, Jan. 23, 1991, 193 SCRA 223. Mortera v. CIR, G.R. No. L-1340, Oct. 13, 1947, 79 Phil. 345. Mortera v. CIR, G.R. No. L-1340, Oct. 13, 1947, 79 Phil. 345. 418 PAFLU v. Barot, G.R. No. L-9281, Sept. 28, 1956, 99 Phil. 1008; Caltex Filipino Managers and Supervisors Association v. CIR, G.R. Nos. L-30632-33, April 11, 1972, 44 SCRA 350. 419 PAFLU v. Cloribel, G.R. No. L-25878, March 28, 1969, 27 SCRA 465. 420 Philcom Employees Union v. Philippine Global Communications, G.R. No. 144315, July 17, 2006; Liwayway Publications, Inc. v. Permanent Concrete Workers Union, G.R. No. L-25003, Oct. 23, 1981, 195 Phil. 51. 415 416 417

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consequent to the conversion thereof into a preventive mediation case. Article 264 [a] of the Labor Code explicitly states that a declaration of strike without first having filed the required notice is a prohibited activity, which may be prevented through an injunction in accordance with Article 254 of the same Code. Clearly, public respondent should have granted the injunctive relief to prevent the grave damage brought about by the unlawful strike.415 San Miguel Corporation v. NLRC, [G.R. No. 99266, March 2, 1999, 304 SCRA 1], In this case, the same issue of NLRC’s duty to enjoin an unlawful strike was raised. The Supreme Court ruled that the NLRC committed grave abuse of discretion when it denied the petition for injunction to restrain the union from declaring a strike based on non‐strikeable grounds. ILaw at Buklod ng Manggagawa [IBM] v. NLRC, [G.R. No. 91980, June 27, 1991, 198 SCRA 586]. It was held here that it is the “legal duty and obligation” of the NLRC to enjoin a partial strike staged in violation of the law. Failure to promptly issue an injunction by the NLRC was likewise held therein to be an abuse of discretion. Bulletin Publishing v. Sanchez, [G.R. No. 74425, October 7, 1986]. Here, an injunction was allowed against the strike which was staged to compel the employer to ignore the law. The reason is that when trade unionism and strikes are used in violation of the law, misuse thereof can be the subject of judicial intervention. 2. INJUNCTION IN PICKETING. a. Picketing may not be enjoined; exceptions. As a general rule, injunction cannot be issued against the conduct of picketing by the workers. Under our constitutional set up, picketing is considered part of the freedom of speech duly guaranteed by the Constitution.416 However, excepted from this legal proscription are the following situations: 1. Where picketing is carried out through the use of illegal means.417 2. Where picketing involves the use of violence and other illegal acts.418 3. Where picketing affects the rights of third parties and injunction becomes necessary to protect such rights.419 b. INNOCENT BYSTANDER RULE. Picketing strikers cannot prevent employees of other companies from using the same premises being picketed. A picketing labor union has no right to prevent employees of another company which is not their employer, from getting in and out of its rented premises, otherwise, it will be held liable for damages for its acts against an innocent bystander.420 Under the “Innocent Bystander Rule,” the third‐party employers or “innocent bystanders” who have no employer‐employee relationship with the picketing strikers, may apply for injunction with the regular courts to enjoin the conduct of the picket. Absent such employer‐employee relationship, the NLRC cannot entertain such application for injunction from “innocent bystanders.”



Labor Relations Law

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