UP08 Labor Law 02

UNIVERSITY OF THE PHILIPPINESCOLLEGE OF LAW

Bar Operations 2008

LABOR LAW II

Bar Operations Head │ Arianne Reyes

Academics Head │ Henry AgudaRyan Balisacan

Subject Head │ Dielle KapunanRowena Salonga

TABLE OF CONTENTS

Section TopicSECTION 1 Right to Self-OrganizationSECTION 2 Labor OrganizationSECTION 3 Union SecuritySECTION 4 Appropriate Bargaining UnitSECTION 5 Union RepresentationSECTION 6 Collective BargainingSECTION 7 Unfair Labor PracticeSECTION 8 Concerted ActivitiesSECTION 9 Labor InjunctionSECTION 10 Other Modes of Labor Dispute SettlementSECTION 11 Amendments to the Labor Code

LABOR LAW II

Page no.259

1215212532394454

LABOR RELATIONS

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LABOR LAW II LABOR RELATIONS

PART I

RIGHT TO SELF ORGANIZATION

I. Basis of Right

II. Extent and Scope of Right

NOTE: The certification election is an example of the exercise of theright to self-organization.

THE RIGHT TO SELF ORGANIZATION SHALL ALSO INCLUDE:

Right not to exercise it: the right NOT to join, affiliate with, or assistany union, and to disaffiliate or resign from a labor organization, issubsumed in the right to join, affiliate with, or assist any union, andto maintain membership therein. It is self-evident that just as noone should be denied the exercise of a right granted by law, so also,no one should be compelled to exercise such a conferred right(Reyes v. Trajano (1992))

Right to withdraw from the organization: the right of theemployees to self-organization is a compelling reason why theirwithdrawal from the cooperative must be allowed. As pointed outby the union, the resignation of the member-employees is anexpression of their preference for union membership over that ofmembership in the cooperative (Central Negros ElectricCooperative v. Sec. of Labor (1991))

Right to raise issues in behalf of the organization: Luna's remarkswere intended to protect the interests of the members of theProvident Fund from what he honestly believed was a risky ventureon the part of management. His actuations as such should thereforebe considered as legitimate exercise of the employees' right to self-organization and as an activity for their mutual aid and protection,aside from being privileged communication protected by theconstitutional guarantee on free speech (Union of Supervisors v.Sec. of Labor (1991))

III. Workers with Right to Self-Organization

WORKER QUALIFICATIONS

Employees have the right to form, join or assist labor organizationsfor the purpose of collective bargaining or for their mutual aid andprotection. Whether employed for a definite period or not, theyshall, beginning on his first day of service, be considered as anemployee for purposes of membership in any labor union (USTFaculty Union v. Bitonio (1999), see also ART. 277(c))

Even 1) rank-and-file employees of non-profit medical institutionsare now permitted to form, organize or join labor unions of theirchoice for purposes of collective bargaining (FEU-Dr. Nicanor Reyesmedical Foundation, Inc. v. Trajano (1987)); and 2) members ofreligious sects such as the INC, can now form their own union(Victoriano v. Elizalde Workers Union (1974)).

Art. 212 (m): “Supervisory Employees” are those who, in theinterest of the employer,

Effectively RECOMMENDS such managerial actions

If the exercise of such authority is not merely routinary orclerical in nature

But requires the use of INDEPENDENT JUDGMENT.

Why can’t supervisors join a union of rank-and-file?» To avoid a situation where supervisors would merge with

the rank and file, or where the supervisors' labororganization would represent conflicting interests(Dunlop v. Sec. of Labor (1998)).

organization.

» Subject to the provisions of Art 264 of this

The right to self-organization is granted to the employee byboth the Constitution (ART. III, Sec 8; ART. XIII, Sec. 3) and bythe Labor Code (ART. 243). Thus, it is both constitutionallyguaranteed as well as statutorily guaranteed. Being aprimordial Constitutional Right, it prevails most of the timeover the right to property of the employer.

ALIENS

ART. 269

General Rule: they are strictly PROHIBITED from engagingdirectly or indirectly in all forms of trade union activities

Exception: aliens working in the country

a. Have valid permits issued by DOLE

b. Reciprocity: That said aliens are nationals of acountry which grants the same or similar rights

ALL OTHER EMPLOYEES

ART. 244

Government Corporation Employees: shall have the rightto organize and to bargain collectively with theirrespective employers.Other Employees in the Civil Service: shall have the rightto form associations for purposes not contrary to law.

ART. 245

Supervisory Employees: SHALL NOT be eligible formembership in a labor organization of the rank and fileemployees BUT MAY join, assist or form SEPARATE labororganizations of their OWN.

EO 111, Manila Electric Co. v. Sec. of Labor (1991)

Security Guards: may now join a rank and file

ART. 246The right to self-organization shall include the right:

To form, join or assist labor organizations» For the purpose of collective bargaining» Through representatives of their own choosing

and

To engage in lawful concerted activities» For the same purpose or for their mutual aid

and protection,

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IV. Workers with No Right to Self-Organization

MANAGERIAL AND CONFIDENTIAL EMPLOYEES

ART. 245

NOT eligible to join, assist or form any labor organization.

ART. 212 (m)

“Managerial employee” is one who is vested with powers orprerogatives:

To lay down and execute management policies and/ or

To hire, transfer, suspend, layoff, recall, discharge, assign, ordiscipline employees.

Sugbuanon Rural Bank vs. Laguesma (2000)

“Confidential employees” are those who

a. Assist or act in a confidential capacity, in regard

b. To persons who formulate, determine, and effectuatemanagement policies [specifically in the field of laborrelations].

The two criteria are cumulative, and both must be met if anemployee is to be considered a confidential employee.

NOTE: The manager’s right to self-organize is NOT removed, but onlylimited. It cannot be a labor organization which has a technical

to Filipino workers

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meaning of its own, being composed of employees (which excludesmanagers, as managers are considered employers under laborrelations) and for the purpose of collective bargaining.

Art. 245 of the Labor Code does not directly prohibit confidentialemployees from engaging in union activities. However, under thedoctrine of necessary implication, the disqualification of managerialemployees equally applies to confidential employees

RATIONALE: Employees should not be placed in a position involving apotential conflict of interests.

COOPERATIVE MEMBERS

Cooperative Rural Bank of Davao vs Ferrer-Calleja (1988)

An employee of such a cooperative who is a member AND CO-OWNER cannot invoke the right to collective bargaining for certainlyan owner cannot bargain with himself or his co-owners.

However, insofar as it involves cooperatives with employees whoare NOT members or co-owners thereof, certainly such employeesare entitled to exercise the rights of all workers to organization,collective bargaining negotiations, and others as are enshrined inthe Constitution and existing laws of the country.

PD 175: a COOPERATIVE is an organization composed of smallproducers and of consumers who voluntarily join together to formbusiness enterprises which they themselves, own, control andpatronize. Its owners or members are the ones who run andoperate the business while the others are its employees.

V. Party Protected

VI. Non-Abridgement of Right

1. Supervisor – Rank and File Union Affiliation

RULE ON AFFILIATION, RATIONALE

Atlas Lithographic v Laguesma (1992)

A local union of supervisory employees may be allowed to affiliatewith a national federation of labor organizations of rank and fileemployees. What the law prohibits is that supervisory employeesjoin a rank and file union.

The national federation would be representing the respectiveinterests of the 2 groups separately.Adamson v. CIR (1984)

Individuals employed as supervisors shall not be eligible formembership in a labor organization of employees under theirsupervision but may form separate organizations of their own.

2. Local Union Disaffiliation

parent union.

considered an unfair labor practice (ART. 248, 249)

ALL EMPLOYEES OF BARGAINING UNIT

Mactan Workers Union vs Aboitiz (1972)

The labor union who won as sole bargaining agent of theemployees does not act for its members alone. Itrepresents all the employees in such a bargaining unit.Furthermore, what is entitled to protection is labor, notthe labor organization. The latter are merelyinstrumentalities through which their welfare may bepromoted and fostered.

bargaining agent can be recognized.
RULE – LEGALITY OF DISAFFILIATION
Villar vs Inciong (1983)Although, as a matter of principle, an affiliate has theright to disaffiliate, this right must respect the terms ofthe affiliation agreement.

PERIOD OF DISAFFILIATION

Tanduay Distillery Labor Union v. NLRC (1987)

GENERALLY, a labor union may disaffiliate from themother union to form a local or independent union ONLYduring the 60 day freedom period immediately precedingexpiration of CBA.

EXCEPTION: Shift of allegiance of majority. In such a case,however, the CBA continues to bind members of the newor disaffiliated and independent union up to the CBA’s

NATURE OF RIGHT TO DISAFFILIATE

Volkschel Labor Union v BLR (1985)

Right of a local union to disaffiliate from its mother unionis well-settled. A local union, being a separate andvoluntary association, is free to serve the interest of all itsmembers including the freedom to disaffiliate whencircumstances warrant. This right is consistent with theconstitutional guarantee of freedom of association.

Malayang Samahan v. Ramos (2000)

A local union which has affiliated itself with a federationis free to sever such affiliation anytime and suchdisaffiliation cannot be considered disloyalty. In theabsence of specific provisions in the federation'sconstitution prohibiting disaffiliation or the declaration ofautonomy of a local union, a local may dissociate with its

POLICY AND DEFINITION

DEFINITIONS

1. EMPLOYER AND EMPLOYEE

EMPLOYER

Art. 212 (e)

INCLUDES any person acting in the interest of an

expiration date

NON-ABRIDGEMENT OF RIGHT TO SELF ORGANIZATION

ART. 246

It shall be UNLAWFUL for any person to restrain, coerce,discriminate against or unduly interfere with employees andworkers in their exercise of the right to self-organization.

Violation of the right to self-organization shall be

NON-EMPLOYEES

Rep. Planters Bank General Services Employees Union v.Laguesma (1996)

If union members are not employees, no right to organizefor the purpose of bargaining and to be certified as

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employer, directly or indirectly.

The term shall NOT INCLUDE any labororganization or any of its officer or agentsEXCEPT when acting as an employer.

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Note: By using the word “includes” and not “mean”, congress didnot intend to give a complete definition of “employer”. Butrather such definition should be complementary to what iscommonly understood as employers.

- IMPLICATION: the employer may NOT necessarily be the ownerof the business.

- Can a Labor Organization be considered an employer?» Yes, but the only instance wherein a labor organization

becomes an employer is when it is acting as an employerin relation to its own employees and not as a labororganization.

» Significance of this is that a Labor Organization canpossibly commit an Unfair Labor Practice in two ways:

▪ As an Employer, if in relation to its own employees(Art. 248); or

▪ As a Labor Organization, in relation to the company(Art. 249).

2. LABOR ORGANIZATION - LEGITIMATE LABORORGANIZATION

LABOR ORGANIZATION:COMPOSITION: EmployeesPURPOSE: Collective Bargaining or of dealing with employersconcerning terms and conditions of employment.

Is the local or branch required to be a legitimate labor organization,even though the national union or federation to which it is affiliatedis already a legitimate labor organization? -- Yes.

Lopez Sugar Corporation v. Secretary of Labor (1995)It is not enough that the national union or federation, but the localor branch should also be a legitimate labor union either by

1. Direct (independent) registration or2. By submitting requirements as a local affiliate of a legitimate

labor organization.

REASON: In relation to the employer, the local is the principal andthe national union is the agent. So if the principal is not legitimate,

it does not matter whether the agent is legitimate or not because asagent it acts as an extension of the personality of the principal andnot as itself.

Can a legitimate labor organization be composed of both rankand file employees and supervisory employees? -- No.

3. LABOR DISPUTES

DOLE and includes any branch or local thereof.

terms and conditions of employment.

REGULAR employment.”

LABOR DISPUTES

Art. 212 (l)

INCLUDE1. Any controversy or matter2. Concerning

a. Terms or conditions of employment or;b. The association or representation of

persons in negotiating, fixing,maintaining, changing or arranging theterms and conditions of employment,

3. Regardless of whether the disputants standin proximate relation of employer and

Can a dispute between contractual employees (who are notregular employees of the company) and the company beconsidered a labor dispute, despite the absence of employee-employer relationship? –

Yes, provided the controversy concerns, among others,the terms and conditions of employment or a change orarrangement thereof (San Miguel Corp. Employees Union-PTGWO v. Bersamira (199

employee.

LEGITIMATE LABOR ORGANIZATION

Art. 212 (h)

Any labor organization DULY REGISTERED with

LABOR ORGANIZATION

Art. 212 (g)

Labor organization means any:a) union or association of employeesb) which exists in whole or in part…c) for the purpose of:

i. collective bargaining concerning termsand conditions of employment, orii. of dealing with employers concerning

EMPLOYEE

Art. 212 (f)

INCLUDES any person in the employ1 of anemployer.

The term shall NOT be limited to the employeesof a particular employer, UNLESS this code soexplicitly states.

It shall include any individual whose work HASCEASED as a result of or in connection with -- a)Any current labor dispute; or b) Because of anyunfair labor practice -- If he has NOT obtainedany other SUBSTANTIALLY EQUIVALENT and

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PART II

LABOR ORGANIZATION

I. Labor Organization – Unions

NOTE: A labor organization composed of both rank and file andsupervisory employees is no labor organization at all. It cannotposses the rights of a legitimate labor organization (Dunlop v. Sec.of Labor (1998)).

DOLE REGISTRATION AS BASIS OF LEGITIMACY

The union’s registration with the BLR, and UPON issuance of theCERTIFICATE OF REGISTRATION based on the requirements underART 234, makes it a legitimate labor organization, with the rightsand privileges granted by the Labor Code including the release orcustody of union dues (Cebu Seamen’s Assoc., Inc v. Ferrer-Calleja(1992), Progressive Dev’t v. Sec. of Labor (1992)).

II. Union Function and Rationale

1. To promote interests of labor without unnecessary labordisputes (United Seaman’s Union v Davao Ship-ownersAssoc (1967)).

2. It is the instrumentality through which an individuallaborer who is helpless as against a powerful employermay, through concerted effort and activity, achieve thegoal of economic well-being. Workers unorganized areweak, workers organized are strong (Guijarno v. CIR(1973))

III. Labor Union and Government Regulation

1. Union Registration and Procedure

REQUIREMENTS – TO ACQUIRE LEGAL PERSONALITY

Any Labor Organization/AssociationART. 234

1. P50 registration fee2. The names of its officers their addresses, the

principal address of the labor org, the minutes ofthe organizational meetings and the list of theworkers who participated in such meetings

3. The names of all its members comprising at least20% of all the employees of the bargaining unit itseeks to operate

4. If the applicant union has been in existence for 1 ormore years, copies of its annual financial reports;and

5. Four (4) copies of the constitution and by-laws ofthe applicant union, minutes of its adoption orratification and the list of the membersparticipating in it.

th

FEDERATION/NATIONAL UNION

ART. 237

a. Proof of affiliation of at least 10 locals or chapters

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ART. 237 is subject to ART. 238

DURE

. 235

requisite documents and papers to be filed shall beified under oath by the secretary or the treasurer oforganization/union as the case may be and attestedy its president.

reover, Book V, Rule II, Sec. 4 requires:

of all the members of each company involved.

DEFINITIONS

LABOR ORGANIZATION

ART. 212 (g)

Any union or association of employees which existsin whole or in part for the purpose of:

collective bargaining or of dealing with employers concerning terms

and conditions of employment

LEGITIMATE LABOR ORGANIZATION

ART. 212 (h)

Any labor organization duly registered with the Dept.of Labor and Employment and includes any branch orlocal thereof.

e of a local/chapter: need not be registered independentlyquire personality. Any legitimate labor organization mayly create a local/chapter by issuing a charter certificateting establishment of the local/charter. The local/chapternjoy rights and privileges of a legitimate labor org only upon

ission of:

ARTER CERTIFICATE within 30 days from issuance of national

AMES of officers, their addresses, and principal address ofchapter; and

CONSTITUTION AND BY-LAWS (but if same withtion/national union – this shall be indicated accordingly)

se supporting documents must be CERTIFIED UNDER OATH bycretary/treasurer, and ATTESTED to by its president (ART.234-

of Registration on Freedom of Association: theement of registration does NOT curtail the freedoms ofbly and association. Said freedoms may still be exercised withhout registration. The latter is merely a condition sine quar the acquisition of legal personality by labor unions and the

ssions of rights and privileges granted by law (PAFLU v. Sec. of(1969))

. Action or Denial of Application and Remedy

N OF APPLICATION

235

reau shall act on all applications for registration within 30 daysiling.

that the application should be signed by atleast twenty percent (20%) of the employeesin the appropriate bargaining unit and

be accompanied by a sworn statement of theapplicant union that there is no certifiedbargaining agent or, where there is an existingcollective agreement duly submitted to theDOLE, that the application is filed during thefreedom period

All requisite documents and papers shall be certified underoath by the secretary or the treasurer of the org as the casemay be and attested to by its president the applicant union to

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reau within 10 days from receipt of notice thereof.

1


NOTE: As long as an applicant union complies with all of the legalrequirements for registration, it becomes the BLR’s ministerial dutyto so register the union (Vassar Industries EEs Union v. Estrella(1951)

3. Collateral Attack

After a certificate of registration is issued to a union, its legalpersonality CANNOT be subject to collateral attack. It may bequestioned only in an independent petition for cancellation inaccordance with Section 5 of Rule V, Book IV of the "Rules toImplement the Labor Code" (Tagaytay Highlands InternationalGolf Club, Inc. vs. Tagaytay Highlands Employees Union (2003)).

GA

1

amendments thereto; minutes of the ratification; and list ofmembers who participated in the ratification;

2. MISREPRESENTATION, false statement or fraud in with electionof officers; minutes of election, and list of voters;

VOLUNTARY DISSOLUTION by members

EFFECT OF PETITION FOR CANCELLATION OF REGISTRATION

In the case of Progressive Development v. Laguesma (1997), theCourt held that the certification election proceedings should beSUSPENDED until the issue of the legality of the Union’sregistration shall have been resolved.

BUT under ART 238-A, a petition for cancellation of unionregistration SHALL NOT SUSPEND the proceedings on certificationelection nor shall it prevent the filing of a petition forcertification election (see collateral attack, pg 3).

IV. International Activities of Union – Prohibition andRegulation

Aliens, natural/juridical, as well as foreign orgs, are strictlyprohibited from engaging directly/indirectly in all forms of tradeunion activities, subject to certain exceptions (ART. 269).

No foreign individual, org or entity may give any donations,grants or other forms of assistance, in cash or in kind, directly orindirectly, to any labor org, group of workers or any auxiliarythereof, as well as those given directly or indirectly to anyemployer(s) org to support any activity or activities affectingtrade unions – WITHOUT prior permission of the Secretary ofLabor (ART. 270). This prohibition applies to farm tenants andrural workers (ART. 271).

The Sec. of Labor shall promulgate rules and regulations toregulate/control the giving and receiving of such donations,including mandatory reporting of amounts donated, theprojects/activities to be supported and their duration (ART. 270).

V. Union-Member Relations

1. Nature of Relationship

Union is but an AGENT of the individual workers and it has the duty

office denying registration may be appealed by

RIGHTS OF LEGITIMATE LABOR ORGANIZATION

ART. 242

1. to act as REPRESENTATIVE of MEMBERS for purposeof collective bargaining

2. to be certified as EXCLUSIVE REPRESENTATIVE ofEMPLOYEES in appropriate bargaining unit forpurpose of collective bargaining

3. to BE FURNISHED by employer, upon writtenrequest, with its annual audited FINANCIALSTATEMENTS

4. to OWN PROPERTY, real/personal, for use andbenefit of the labor organization and its members

5. to SUE and be sued in its registered name6. to UNDERTAKE ALL activities designed to benefit the

organization and members – not contrary to law7. income, properties, grants, endowments, gifts,

donations, and contributions – used for their lawfulpurposes – shall be FREE from TAXES, DUTIES andASSESSMENTS, except when this provision is

DENIAL OF APPLICATION – MAY BE APPEALED

ART. 236

The decision of the Labor Relations Division in the regional

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4. Effect of Non-registration

If not registered – union does not become LEGITIMATE labororganization; hence, CANNOT enjoy rights and privileges grantedunder ART. 242 (Sugbuanon Rural Bank,Inc. v. Laguesma (2000),Protection Technology v. Sec. Of Labor (1995)).

5. Cancellation of Union Certificate of Registration

The certificate of registration of any legitimate labor organizationshall be cancelled by the BLR, after due hearing, ONLY ONGROUNDS specified in ART. 239 (ART. 238, as amended).

The cancellation of a certificate of registration is the equivalentof snuffing out the life of a labor organization. For without suchregistration, it loses — as a rule — its rights under the LaborCode. A decision rendered without any hearing is null and void(Alliance of Democratic Labor Organization v. Laguesma(1996)).

BUT take note of last par of ART. 241(j): Failure of any labororganization to comply with the periodic financial reportsrequired by law and such rules and regulations promulgatedthereunder 6 months after the effectivity of this Act shallautomatically result in the cancellation of union registration ofsuch labor organization.

ROUNDS FOR CANCELLATION (MCBL, ME, VD)RT. 239 (as amended)

. MISREPRESENTATION, false statement or fraud in connectionwith adoption/ratification of the constitution and by laws or

to inform the members of the labor matters entrusted to it. Theemployer may rely on the authority of the union to bring the unionmembers especially in collective bargaining (Heirs of Cruz v. CIR(1969)).

2. Issueso The point to be stressed is that the union’s CBL is the

fundamental law that governs the relationship between andamong the members of the union. They embody a covenantbetween a union and its members and constitute thefundamental law governing members’ rights and obligations (USTFaculty Union v. Bitonio (1999)).

o GENERAL RULE: Labor union remains a PRIVATE and VOLUNTARYorganization. Hence, membership is a matter of privilege.

o EXCEPTION: When union has access to employment, example:CLOSED SHOP AGREEMENT. This converts union into one with apublic character and thus the government will have a right toinquire into the rules or business of the union (see Salunga v. CIR(1967)).

ADMISSION AND DISCIPLINE OF MEMBERS

ART. 249 (a)

A labor organization shall have the right to prescribe its ownrules with respect to the acquisition or retention of membership.

ART. 277 (c)

Any employee, whether employed for a definite period or not, shallbe considered as an employee for purposes of membership in anylabor union -- beginning on his first day of service.

RIGHT TO DISCIPLINE

VILLAR V. INCIONG (1983)

expressly repealed by a special law

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When a labor union affiliates with a mother union, it becomesbound by the laws and regulations of the parent organization. Itbecomes subject to the laws of the superior body under whoseauthority the local union functions.

When members of a labor union sow the seeds of dissension andstrife within the union, when they seek the disintegration anddestruction of the very union to which they belong – they forfeittheir rights to remain as members.

DUE PROCESS

ART. 279

A regular employee CANNOT be removed from his services byemployer WITHOUT a just cause or when NOT authorized,otherwise, employee is entitled to reinstatement without loss ofseniority rights/privileges + full backwages, allowances and otherbenefits/monetary equivalent from time his compensation waswithheld up to his actual reinstatement.

ELECTION OF OFFICERS

QUALIFICATIONS

Membership in good standing (ART. 241 (c))

Must not have been convicted of any crime involving moralturpitude (ART. 241 (f))

MANNER OF ELECTION

ART. 241 (C)

members shall directly elect their officers

by secret ballot

at intervals of 5 years

TENURE

ART 241 (C)

5 years

COMPENSATION

ART. 241 (k)

General Rule: NONE

Except: If specifically provided by their CBL, or allowed by writtenresolution duly authorized by majority of all members in ageneral membership meting duly called for the purpose

VOTER’S LIST

o Only MEMBERS of union can participate in the election of unionofficers, and the question of eligibility is determined through theuse of the applicable payroll period and employee’s status duringthe applicable payroll period (Tancinco vs Calleja (1988))

o UNION ELECTION is different from CERTIFICATION ELECTION (seeUST Faculty Union v. Bitonio (1999)).o Union election – election of officers of union; members

only can participate.o Certification election – election of sole and exclusive

bargaining agent of the employees in an appropriatebargaining unit; all employees belonging to theappropriate bargaining unit can participate.

DISQUALIFICATION OF CANDIDATE

o If candidate is proven to be disqualified, it does not mean thatthe candidate with 2nd highest number of votes becomes theelected officer (Manalad v. Trajano (1989)).

EXPULSION REMEDY

o If herein union officers were guilty of the alleged acts imputed,BLR pursuant to Article 242 should have meted out theappropriate penalty on them, i.e., to expel them from the Union,

as prayed for, and not call for a referendum to decide the issue(Kapisanan v. Trajano (1985)).

ELECTION INVALID

o Free and honest elections are indispensable to the enjoyment byemployees and workers of their constitutionally protected rightto self-organization. If attended by grave irregularities – electionshould therefore be declared INVALID (Rodriguez vs Director(1988)).

MAJOR POLICY MATTERS

ART. 241 (d)

o MEMBERS shall determine by secret ballot, after duedeliberation, any question of major policy affecting the entiremembership of the organization

o but if such secret ballot becomes impracticalo the BOARD OF DIRECTORS of the organization may make the

decision in behalf of the general membership

UNION FUNDS

RIGHTS/CONDITIONS OF MEMBERSHIP IN A LABOR ORG

ART 241

(b) Members are entitled to full/detailed financial transactionreports

(g) Collection of any fees, dues or other contributions in behalf ofthe labor org, or any disbursement of its money/funds – allowed ifduly authorized by CBL

(h) Payment of fees, dues or other contributions by member shallbe evidenced by a receipt signed by the officer or agent making thecollection and entered into the record of the org

(i) Funds of the org shall not be applied for any purpose or objectother than those expressly provided by the CBL or authorized bywritten resolution adopted by the majority of the members at ageneral meeting duly called for the purpose

(j) Every income or revenue of the org shall be evidenced by arecord showing its source, and every expenditure of its funds shallbe evidenced by a receipt

(l) The treasurer shall render account (duly audited and verified byaffidavit and a copy thereof shall be furnished the Secretary ofLabor)

1. At least once a year within 30 days after the close of itsfiscal year.;

2. At such other times as may be required by a resolution ofthe majority of the members of the organization; and

3. Upon vacating his office.

(m) Books of accounts and other records of the financial activitiesof any labor org shall be open to inspection by any officer ormember thereof during office hours

(n) No special assessment or other extraordinary fees may belevied upon the members of a labor org unless authorized by awritten resolution of a majority of all the members of a generalmembership meeting duly called for the purpose

(o) Other than for mandatory activities under the Code, no specialassessments, atty.’s fees, negotiation fees or any otherextraordinary fees may be checked off from any amount due to anemployee without an individual written authorization duly signedby the Employeee. The authorization should specifically state theamount, purpose and beneficiary of the deduction.

NOTE: Sec of Labor or his duly authorized representative mayinquire into financial activities of legitimate labor orgs – UPON filingof complaint under oath and supported by written consent of atleast 20% of total membership, Provided, such inquiry shall not beconducted during (60)-day freedom period nor within the thirty (30)

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days immediately preceding the date of election of union officials(ART 274).

SOURCE OF PAYMENT – ATTORNEY’S FEES, SPECIAL ASSESSMENTS

o Attorney’s fees, negotiation fees or similar charges of any kindarising from any collective bargaining negotiations or conclusionof the collective agreement shall NOT be imposed on individualmember of contracting union, but may be charged against unionfunds in an amount to be agreed upon by the parties. Anycontract, agreement or arrangement of any sort to the contraryshall be null and void (ART. 222 (b)).

o Art. 241 (n) has three requisites for the validity of the specialassessment for the unions incidental expenses:

1) Authorization by written resolution of majority of ALL themembers at the general membership meeting called forthat purpose

2) Secretary’s record of the minutes of the meetingsattested to by the president.

3) Individual written authorization for check-off duly signedby the employees concerned.

RULE: Attorney’s fees, special assessments and other extraordinaryfees may be charged against individual members. EXCEPT: Ifpayment is effected through forced contributions from workers –workers did not expressly consent or give written authorization (seeABS-CBN Supervisors Employees Union Members V. ABS-CBNBroadcasting Corp (1999), Gabriel v. Sec. of Labor (2000)).

MANDATORY ACTIVITY

Judicial process of settling disputes laid down by the law. Amicablesettlements cannot be considered as a mandatory activity. ART 241(o) envisions a situation where there is a judicial or administrativeproceeding for recovery of wages (Vengco v Trajano (1989))

Note: Article 222 (b) does not except a CBA, later placed undercompulsory arbitration, from the ambit of its prohibition. Hence,individual written authorizations for check-offs are not dispensedwith, even if the CBA provides so (Galvadores v Trajano (1986)).

ENFORCEMENT AND REMEDIES – PROCEDURE AND SANCTIONS

JURISDICTION

ART. 241, last paragraphCriminal and civil liabilities arising from violations of above rightsand conditions of membership shall continue to be under thejurisdiction of ordinary courts.

ART. 226o The BLR and the Labor Relations Division in the regional offices

of the Department of Labor shall have original and exclusiveauthority to act

o at their own initiative oro upon request of either or both parties

o on all inter-union and intra-union conflicts, and all disputes,grievances or problems arising from or affecting labor-management relations in all workplaces

o Except those arising from the implementation or interpretationof collective bargaining agreements which shall be the subject ofgrievance procedure and/or voluntary arbitration.

GENERALLY - EXHAUSTION OF INTERNAL REMEDIES

Villar v. Inciong (1983)

When members of a labor union sow the seeds of dissension andstrife within the union, when they seek the disintegration anddestruction of the very union to which they belong. They forfeittheir rights to remain as members. Union has right to expel erringmembers in accordance to their CBL. Redress must be firstsought within union itself.

ExceptionKapisanan v Hernandez (20 SCRA 109)

Futility of intra-union remedies

Improper expulsion procedure

Undue delay in appeal as to constitute substantial injustice

When the action is for damages

Lack of jurisdiction of investigating body

When the action of the administrative agency is patently illegal,arbitrary and oppressive

When the issue involved is purely a question of law

Where the administrative agency has already prejudged the case

Where the administrative agency was practically given theopportunity to act on the case but did not.

VI. Union Affiliation: Local-Parent Relations

3. Affiliation

PURPOSE

ART 211 (C)

To foster the free and voluntary organization of astrong and united labor movement

PHIL SKYLANDERS V. NLRC (2002)

The sole essence of affiliation is to increase, bycollective action, the common bargaining power oflocal unions for the effective enhancement andprotection of their interests. Admittedly, there aretimes when without succor and support local unionsmay find it hard, unaided by other support groups, to

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NATURE OF RELATIONSHIP

Filipino Pipe and Foundry Corp v. NLRC (1999)

The mother union, acting for and in behalf of itsaffiliate, had the status of an agent while the localremained the basic unit of the association, free toserve the common interest of all its members, subjectonly to restraints imposed by the constitution and bythe by-laws of the association. The same is true even ifthe local is not a legitimate labor organization.

EFFECT OF AFFILIATION

Adamson v. CIR (1984)

Locals remain the basic units of association, free toserve their own and the common interest of all.Inclusion of FFW in the registration is merely to stressthat they are its affiliates at the time of registrations. Itdoes not mean that said local unions cannot stand ontheir own. Affiliation does not mean they lost theirown legal personality.

secure justice for themselves.



PART III

UNION SECURITYHiring Continued

EmploymentGround forTermination

Union Shop Employeeshaveaccess tolabormarket.Can behired evenif notunionmember.

After sometime,employeemust becomea member

If the employeedoes not join theunion after areasonable time,it will be groundsfor termination,after dueprocess isobserved

Closed Shop Employeemustbecome amemberat the timeof hiring

Must be amember allthrough-out

If not a memberat anytime,grounds fortermination,after dueprocess isobserved

Maintenanceshop

Already amemberat the timeof hiring

Mustmaintainmembership,otherwise itshall be aground fortermination

If disaffiliatesfrom union,grounds fortermination,after dueprocess isobserved

4.01 STATUTORY BASIS

Art. 248(e)UNFAIR LABOR PRACTICE OF EMPLOYERS1. to discriminate in regard to wages, hours of work, and other

terms and conditions of employment in order to encourage ordiscourage membership in any labor organization.

2. Nothing in this code or in any other law shall stop the partiesfrom requiring membership in a recognized collectivebargaining agent as a condition for employment, EXCEPT thoseemployees who are already members of ANOTHER UNION atthe time of signing of the collective bargaining agreement.

Art. 243COVERAGE AND EMPLOYEES’ RIGHT TO SELF-ORGANIZATION.3. All persons employed in commercial, industrial and agricultural

enterprises and in religious, charitable, medical, or educationalinstitutions, whether operating for profit or not, shall have theright to self-organization and to form, join, or assist labororganizations of their own choosing for purposes of collectivebargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without anydefinite employers may form labor organizations for theirmutual aid and protection.

4.02 RATIONALE-EMPLOYEE ACTION

A closed shop agreement has been considered as one form of unionsecurity whereby only union members can be hired AND workersmust remain union members as a condition of continuedemployment. (Juat v. CIR, 1965)

RATIONALE CLOSED SHOP: The requirement for employeesor workers to become members of a union as acondition for employment redounds to thebenefit and advantage of said employeesbecause by holding out to loyal members apromise of employment in the closed-shop theunion wields group solidarity. In fact it is said

that the closed-shop contract is the mostprized achievement of unionism.

1. To whom is Closed-shop proviso of a CBA applicable?Closed-shop proviso of a collective bargaining agreemententered into between an employer and a duly authorized laborunion is applicable not only to the employer and a dulyauthorized labor union is applicable NOT ONLY to the

(1) Employees or laborers that are employed AFTER thecollective bargaining agreement was entered into.

(2) BUT ALSO to old employees who ARE NOT membersof any labor union at the time the said collectivebargaining agreement was entered into.

In other words, if an employee or laborer is already a memberof a labor union different from the union that entered into acollective bargaining agreement with the employer providing for aclosed-shop, said employee or worker cannot be obliged to becomea member of that union which had entered into a CBA with theemployer as a condition for his continued employment.

GENERALLY: a state may NOT compel ordinary voluntaryassociations to admit thereto any given individual, becausemembership therein may be accorded or withheld as a matter ofprivilege.

EXCEPTION: The rule is qualified in respect of labor unions holding amonopoly in the supply of labor, either in a given locality, or asregards a particular employer with which it has a closed-shopagreement.

Consequently, it is well settled that such unions are NOTentitled to arbitrarily excluded qualified applicants for membership,and a closed-shop provision would not justify the employer indischarging, or a union in insisting upon the discharge of, anemployee whom he union thus refuses to admit to membership,without any reasonable ground thereof.

To further increase the effectiveness of labor organizations, aclosed-shop has been allowed. (Guijarno v. CIR, 1973)

Del Monte Phils. v. Saldivar (2006)Admittedly, the enforcement of a closed-shop or union

security provision in the CBA as a ground for termination finds noextension within any of the provisions under Title I, Book Six of theLabor Code. Yet jurisprudence has consistently recognized, thus: "Itis State policy to promote unionism to enable workers to negotiatewith management on an even playing field and with morepersuasiveness than if they were to individually and separatelybargain with the employer. For this reason, the law has allowedstipulations for 'union shop' and 'closed shop' as means ofencouraging workers to join and support the union of their choice inthe protection of their rights and interests vis-a-vis the employer."

4.03 VALIDITY OF AGREEMENT AND EFFECT ON FREEDOM OFCHOICE

Tanduay Distillery Labor Union V. NLRC (1987)As a matter of principle the provision of the

industrial Peace Act granting freedom to employees toorganize themselves and select their representative forentering into bargaining agreements, should besubordinated to the constitutional provision protecting thesanctity of contracts. We can not conceive how freedom tocontract, which should be allowed to be exercised withoutlimitation may be subordinated to the freedom of laborersto choose the organization they desire to represent them.And even if the legislature had intended to do so and madesuch freedom of the laborer paramount to the sanctity ofobligation of contracts, such attempt to override theconstitutional provision would necessarily and ipso facto benull and void



4.04 CONTRACT DRAFTING AND INTERPRETATION OFPROVISION–UNION SECURITY

In order for an employer to be bound under a union security clausein the CBA, to dismiss an employer for lack of or loss of unionmembership, the stipulation must be so clear and unequivocal as toleave absolutely no room for doubt. There must be a provision thatunion members must be in good standing to keep their job.(Rizal Labor Union v. Rizal Cement Co., 1955)

TAKE NOTE: Close shop and union shop provisions are in principlevalid and allowed by law. BUT since their application necessarilyinvolves the surrender of a portion of a worker’s individual freedomand could result in loss of his employment. The terms of specificunion clauses should be construed strictly and doubts should beresolved against their existence.

4.05 COVERAGE – WORKER INCLUSION AND EXCLUSION

Art. 248 (e)4. To discriminate in regard to wages, hours of work and other

terms and conditions of employment in order to encourage ordiscourage membership in any labor organization.

5. Nothing in this Code or in any other law shall stop the partiesfrom requiring membership in a recognized collectivebargaining agent as a condition for employment, except thoseemployees who are already members of another union at thetime of the signing of the collective bargaining agreement.

6. Employees of an appropriate bargaining unit whoare not members of the recognized collectivebargaining agent may be assessed a reasonable feeequivalent to the dues and other fees paid bymembers of the recognized collective bargainingagent, if such non-union members accept thebenefits under the collective bargaining agreement:

7. Provided, that the individual authorization requiredunder Article 242, paragraph (o) of this Code shallnot apply to the non-members of the recognizedcollective bargaining agent;

4.06 NO RETROACTIVE EFFECT

A closed-shop provision in a collective bargaining agreement is notto be given a retroactive effect so as to preclude its being applied toemployees already in the service. (Guijano v. CIR, 1973)

A closed-shop agreement applies only to persons to be hired or toemployees who are not yet members of any labor organization. It isinapplicable to those already in the service who are members ofanother union. (Freeman Shirt Manufacturing Co., Inc. vs. CIR)

4.07 IMPLEMENTATION–OBLIGATION & LIABILITIES

Carino v. NLRC (1990)

We believe that the Company should have given petitionerCariño an opportunity to explain his side of the controversy withthe Union.

It is OUR considered view that respondent company is equallyliable for the payment of backwages for having acted in bad faith ineffecting the dismissal of the individual petitioners. Bad faith on thepart of respondent company may be gleaned from the fact that thepetitioner workers were dismissed hastily and summarily. At best, itwas guilty of a tortious act, for which it must assume solidaryliability, since it apparently chose to summarily dismiss the workersat the union's instance secure in the union's contractualundertaking that the union would hold it "free from any liability"arising from such dismissal.

We conclude that the Company had failed to accord topetitioner Cariño the latter's right to procedural due process. Theright of an employee to be informed of the charges against him andto reasonable opportunity to present his side in a controversy witheither the Company or his own Union, is not wiped away by a UnionSecurity Clause or a Union Shop Clause in a CBA.

An employee is entitled to be protected not only from acompany which disregards his rights but also from his own Unionthe leadership of which could yield to the temptation of swift andarbitrary expulsion from membership and hence dismissal from hisjob.

IMPLICATION: Even if there exists a union security clause, dueprocess is still necessary.

Right to Due Process

a. The dispute has to be settled before an impartial body. Thegrievance machinery with members designated by the unionand the company cannot be expected to be impartial againstthe dismissed employees. Due process demands that thedismissed workers grievances be ventilated before animpartial body. Since there has already been an actualtermination, the matter falls within the jurisdiction of theLabor Arbiter. (Sanyo Phil. Workers Union v. Canizares, 1992)

b. Although union security clauses embodied in the collectivebargaining agreement may be validly enforced and thatdismissals pursuant thereto may likewise be valid, this doesnot erode the fundamental requirement of due process. Thereason behind the enforcement of union security clauseswhich is the sanctity and inviolability of contracts cannotoverride one's right to due process. (Malayang Samahan ngmga Manggagawa sa M. Greenfield v. Ramos, 2000)

4.07 FINANCIAL SECURITY

CHECK-OFF

Art. 113 bNo employer, in his own behalf or in behalf of any person, shallmake any deduction from the wages of his employees except: forunion dues, in cases where the right of the worker of his union tocheck-off has been recognized by the employer OR authorized inwriting by the individual worker concerned.

CHECK-OFF:1) Ordinary Union dues2) Extraordinary Fees, but can only be made when

authorized by individual written authorization, dulysigned by each employee concerned.

Art. 241 m,n,o

m. The books of accounts and other records of the financialactivities of any labor org shall be open to inspection by anyofficer or member thereof during office hours;

n. No special assessment or other extraordinary fees may belevied upon the members of a labor org:8. unless authorized by a written resolution9. of a majority of all the members of a general

membership meeting10. duly called for the purpose.

The secretary of the org shall record:11. the minutes of the meeting12. including the list of all members present,13. the votes cast,14. the purpose of the special assessment or fees

and15. the recipient of such assessments or fees.

The record shall be attested to by the president. (Noneed to be under oath)

o. Other than for mandatory activities under the Code,no special assessments, atty.’s fees, negotiation fees or anyother extraordinary fees may be checked off from any amountdue to an employee16. without an individual written authorization duly signed

by the employee.17. The authorization should specifically state the amount,

purpose and beneficiary of the deduction

1. A check-off is a process or device whereby the employer, onagreement with the Union, recognized as the proper


bargaining representative, OR on PRIOR authorization from itsemployees, deduct union dues or agency fees from the latter’swages and remit them directly to the union. Its desirability in alabor organization is quite evident. (ABS-CBN SupervisorsEmployees Union V. ABS-CBN)

2. It is assured thereby of CONTINOUS FUNDING. As this Courthas acknowledge, the system of check-off is primarily for thebenefit of the Union and only indirectly, for the individualemployees. (ABS-CBN Supervisors Employees Union V. ABS-CBN)

Legal basis of check-off: statutes or in contracts.

Statutory limitation on check-offs:Article 241 g“No officer, agent, or member of a labor organization shall collectany fees, dues, or other contributions in its behalf or make anydisbursement of its money or funds unless he is duly authorizedpursuant to its constitution and by-laws. etc. See also 241 m,n,o.

DISINI:

Requisites so that special assessment for union’s incidentalexpenses is valid:

Article 241 speaks of three (3) requisites that must be compliedwith in order that the special assessment for Union’s incidentalexpenses, attorney’s fees and representation expenses be valid andupheld:1. Authorization by a written of the majority of all themembers at the general meeting for that purpose.2. Secretary’s record of the meeting.3. Individual written authorization for check-off.

National Brewery and Allied Industries Labor Union v. San MiguelCorporation (1963)

NOTE: In this case the SC cited different reasons why non-unionmembers cannot be compelled to pay agency fees but this case isoverturned by Art. 248 e.

AGENCY FEE now has a statutory basisArt. 248 e 2nd paragraph: “ …employees of an appropriatebargaining unit who are not members of the recognized collectivebargaining agent mat be assessed a reasonable fee equivalent tothe dues and other fees paid by members of a recognized collectivebargaining agent, if such non-union member accepts the benefitunder the CBA…”

Take note: In the case of agency fee, individual authorization notapplied, or not required. This is for practical reasons, because thelaw recognizes the extreme difficulty of imposing agency fee onnon-union members, more especially to members of rival unions.

DO No.40-03 Series of 2003RULE XIII

ADMINISTRATION OF TRADE UNION FUNDS AND ACTIONSARISING THEREFROM

Section 1. Right of union to collect dues and agency fees. - Theincumbent bargaining agent shall continue to be entitled to check-off and collect dues and agency fees despite the pendency of arepresentation case, other inter/intra-union disputes or relatedlabor relations disputes.

Exceptions: (National Brewery and Allied Industries Labor Union v.San Miguel Corporation, 1963):1) Any employee who is a member of a religious group whichprohibits its members from joining labor unions on religiousgrounds, at the time such agreement takes effect2) Employees who, at the time such agreement takes effect, arealready members of a union other than the majority3) Employees excluded from the closed-shop by express terms ofthe agreement

Note: Employees who cannot join a union in the first place (i.e.Confidential and Managerial) are obviously exempted as well.

How Construed: STRICTLY against the employer

Financial Security:Gen. Rule: Employee’s wage CANNOT be used for Union purposesException:1) Union Dues2) Check-Off


Definition:

Union Security Clause – a term applied to any form of agreementwhich imposes upon employees the obligation to acquire or retainunion membership, at the expense of their employment if they failto do soNote: Observance of Due Process still holds

Closed Shop Agreement:Gen. Rule: All employees in the bargaining unit are covered

SUMMARY OF NOTES



Part IV

APPROPRIATE BARGAINING UNIT

5.01 DEFINITION AND ROLE IN LAW

Bargaining Unit: a group of employees sharing mutual interestswithin a given employer unit, comprised of all or lessthan all of the entire body of employees in the employer unit or anyspecific occupational or geographical grouping within suchemployer unit [DO No. 40-03 series of 2003 Rule I (d)]

Appropriate Bargaining Unit: a group of employees of a givenemployer comprised of all or less than all of the entire body ofemployees, which the collective interests of all the employees,consistent with equity to the employer, indicate to be best suited toserve reciprocal rights and duties of the parties [Belyca Corp. vsCalleja (1988)]

Elements of an appropriate bargaining unit:

1. COMPOSITION - All or less than all of the entire body ofemployees

2. EQUITY - Of employees: A.k.a = “Collective interest ofemployees” consistent with the equity of the employer.

3. PURPOSE - to serve the reciprocal rights & duties of the partiesunder the CB provisions of the law

What is the function of an appropriate bargaining unit?

1. To act as a SOVEREIGN in relation to the CE and CBA

2. It is an ELECTORAL DISTRICT. It marks the boundaries of thosewho may participate in a certification election.

3. It is an Economic Unit.

4. To select or designate a labor organization to represent them incollective bargaining [Art. 255]

18. General Rule: the labor organization designated or selected bythe majority of the employees in an appropriate bargainingunit shall be the exclusive representative of the employees insuch unit for the purpose of collective bargaining.

19. Exceptions:1. an individual EE or group of Employees shall have the

right at any time to present grievances to their ER

2. Any provision of law to the contrary notwithstanding andsubject to rules and regulations as the SOLE maypromulgate, workers shall have the right to participate inpolicy and decision-making processes of theestablishment where they are employed in so far as saidprocesses will directly affect their RIGHTS, BENEFITS andWELFARE.

Provision for LABOR MANAGEMENT COUNCILSby workers and ERs – representatives ofworkers must be elected by at least a majorityof all employees in said establishment

5.02 DETERMINATION OF APPROPRIATEBARGAINING UNIT

1. FACTORS

IN GENERAL

Rothenberg [UP v. Ferrer-Calleja (1992) citing Democratic LaborAssoc v. Cebu Stevedoring Co.] W-A-P-E

1. Will of the Employees

2. Affinity & unity of Employees interest, such as substantialsimilarity of works and duties or similarity of compensation &working conditions

3. Prior CB history

Rationale: if it worked well before, it will work well againnow

Note: Prior collective bargaining history is not conclusiveor determinative of what constitutes the appropriatebargaining unit. [San Miguel Corp. v. Laguesma (1994)]

4. Employment status i.e. temporary, seasonal, & probationaryEmployees

TEST of Grouping: COMMUNITY or MUTUALITY of INTERESTS

Rationale: Greater chance of success for the collectivebargaining process - the basic test of an asserted bargainingunit’s ACCEPTABILITY is won it is fundamentally thecombination w/c will best assure to all Employees the exerciseof their CB rights. This is related to the policy of the law inensuring the right to collective bargain.

Example of application: Casual employees were barred fromjoining union of the permanent and regular employees.

DISINI:The law is looking only for what is PROPER OR APPROPRIATE.The law is NOT looking for the best!

Can you have a permanent bargaining unit?

No. An appropriate bargaining unit depends on the factors that areinfluenced by the market place. The bargaining unit is designed tomaintain the mutuality of interest among the employees in suchunit. Reason to dissolve, change or expand a certain bargaining

unit: when THE INTEREST BETWEEN GROUPS HAS CHANGEDOVER TIME.

GEOGRAPHY – LOCATION

The primary element in determining whether a given group ofemployees constitute a proper bargaining unit is still whether it will,without inequity to the employer, best serve all employees in theexercise of their bargaining rights. Geography and location only playa significant role if:

the separation between the camps and the different kinds ofwork in each all militate in favor of the system of separatebargaining units

when the problems and interests of the workers are peculiar ineach camp or department

the system of having one collective bargaining unit in eachcamp has operated satisfactorily in the past[Benguet Consolidated Inc. and Balatok Mining Co. v. BobokLumberjack Assn. (1958)]

CORPORATE ENTITIES

Doctrine: It is grave abuse of discretion to treat 2 companies as asingle bargaining unit when these 2 companies are indubitablydistinct entities with separate juridical personalities. In Umali vs CA, legal corporate entity is disregarded only if it is

sought to hold the officers and stockholders directly liable fora corporate debt or obligation.[Indophil Textile Mills Workers Union v. Calica (1992)]

Principles in determining whether to establish separatebargaining units:

1. The existence of a bonafide business relationship between the2 companies is not proof of being a single corporate entity,especially when the services provided by the other companyare merely auxiliary.

2. The fact that there are as many bargaining units as there arecompanies in a conglomeration of companies is a positiveproof that a corporation is endowed with a legal personality



DISTINCTLY ITS OWN, independent and separate from othercorporations. [Diatagon Labor Federation v. Ople (1980)]

3. Separate legitimate purposes militate against treating onecorporation as an adjunct or alter ego of the other.

4. The fact that the businesses are related, that some of theemployees are the same persons working in the othercompany and the physical plants, offices and facilities are inthe same compound are NOT sufficient to justify piercing thecorporate veil. [Indophil Textile Mills Workers Union v. Calica(1992)]

5. The transformation of companies is a managementprerogative and business judgment which the courts cannotlook into unless it is contrary to law, public policy or morals.

6. Determine who exercises supervision and control.a. whether different management termsb. enforcement of administrative and operational rulesc. maintenance of financial statements and auditingd. cross-linking of command, control and

communication systems [Phil. Scouts Veterans v.Torres (1993)]

7. If, considering the spin-offs, the companies wouldconsequently have their respective and distinctive concerns interms of nature of work, wages, hours of work and otherconditions of employment.

8. The nature of their products and scales of business mayrequire different skills, volumes of work, and workingconditions which must necessarily be commensurate bydifferent compensation packages. [San Miguel ..Union v.Confesor (1996)]

2. UNIT SEVERANCE AND THE GLOBEDOCTRINE

Concept: the practice of the courts to hold a series of elections notfor the purpose of granting the right of representation to the groupgarnering the majority vote but to let employees select on severalunits to represent them [Kapisanan ng mga Manggagawa saManila Road Co. v. Yard Crew Union (1960)]

Rationale: highly skilled workers have to separate to increase theirmarket value

DISINI: A brief explanation of the GLOBE DOCTRINE

It is best explained in the context of a market place and the demandof employment on such market place. The GLOBE DOCTRINE usuallyapplies to employees with rare skills or highly technical ones.

Example: Case of Pilots and Stewardess.

If ,originally, pilots and stewardesses belong to ONE bargaining unit(unit A) for the purpose of collective bargaining, with the use of theGLOBE DOCTRINE a plebiscite can be held to determine if the pilotemployees would want toform a separate bargaining unit (unit B).

Illustration:

Unit A (original bargaining unit): 100 Pilots + 200 Stewardesses =300 employeesUnit B (proposed new unit): Pilots = 100 employees.

Those in unit B (100 pilots) will vote in a plebiscite. Their choices willbe…

(1) To vote for Unit A: this would mean that they do not wish toseparate from the original bargaining unit.(2) To vote for Unit B: This would mean that they would want toform their OWN bargaining unit, composed of pilots only.(3) Neither: They do not want the choices

If you have one BIG bargaining unit, most probably you aregrouping together DIFFERENT SKILLED workers.

Principles:

3. The will of the employees is the determinative factor.

4. The plebiscite is to be conducted NOT by the DOLE but by theCourt itself, in keeping with the court’s right to investigatefully in matters concerning certification elections.

5. The order of the court for the conduct of elections is aninterlocutory order – certiorari is not proper.

[Kapisanan ng mga Manggagawa sa Manila Road Co. v. YardCrew Union (1960)]

3. SIZE OF UNIT AND EFFECT ON RIGHT TO SELF-ORGANIZATION

Filoil Refinery Corp. v Filoil Supervisory andConfidential Employees Union (1972)

Since the confidential employees are very few in number and are bypractice and tradition identified with the supervisors in their role asrepresentatives of management vis-à-vis the rank and fileemployees, such identity of interest has allowed their inclusion inthe bargaining of supervisors for purposes of collective bargainingin turn as employees in relation to the company as their employer.This identity of interest logically calls for their inclusion in the samebargaining unit and at thesame time fulfills the law’s objective of insuring to them the fullbenefit of their right to self organization and to collectivebargaining, which could hardly be accomplished if the respondentassociation’s membership were to be broken up into five separateineffective tiny units. Creating fragmentary units would not servethe interest of industrial peace. The breaking up of bargaining unitsinto tiny units will greatly impair their organizational value. Sincethe confidential employees are very few and are identified with thesupervisors in their role as representatives of management vis-a-visthe rank and file employees, such identity of interesthas allowed their inclusion in the bargaining unit of supervisors-managers for purposes of collective bargaining. Industrial courtenjoys a wide discretion in determining the procedure necessary toinsure the fair and free choice of bargaining representations byemployees. Action in deciding upon an appropriate unit forcollective bargaining purposes is discretionary. Its judgment isentitled to finality, unless its action is arbitrary or capricious.

SUPERVISOR UNIT

Supervisors can be an appropriate bargaining unit. [DunlopSlazenger v. NLRC (1998)]

4. EFFECT OF PRIOR AGREEMENT

Rule: Prior agreement as to the inclusion or exclusion of workers ina bargaining unit or prohibition from forming their own unionagreed upon by the corporation with the previous bargainingrepresentatives can never bind subsequent federations. [GeneralRubber & Footwear Corp. v BLR, (1987)]

Rationale: It is a curtailment of the right to self-organization. Duringthe freedom period, the parties may not only renew the existingcollective bargaining agreement but may also propose and discussmodifications or amendments thereto. [DLSU v. DLSUEA (2000)]

5.03 DETERMINING AGENCY

General Rule: The Bureau shall not entertain any petition forcertification election or any other action which may disturb theadministration of duly registered existing collective bargainingagreements affecting the parties [Art. 232 – sec. 15 of RA 6715]

Exceptions: Art. 253, 253-A and 256 of this Code (60 day freedomperiod)

AGENCY AND FINALITY ORDER



Filoil Refinery Corp. v Filoil Supervisory andConfidential Employees Union (1972)Industrial court enjoys a wide discretion in determining theprocedure necessary to insure the fair and free choice of bargainingrepresentations by employees, and that its action in deciding uponan appropriate unit for collective bargainingpurpose is discretionary. Its judgment in this respect is entitled toalmost complete finality, unless its action is arbitrary or capriciousand that absent any grave abuse of discretion as to justify theCourt’s intervention.

5.04 EXCLUSIVE BARGAINING REPRESENTATIVE ANDINDIVIDUAL UNION MEMBER

General Rule: the labor organization designated or selected by themajority of the employees in an appropriate bargaining unit shall bethe exclusive representative of the employees in such unit for thepurpose of collective bargaining.

Exceptions:1. an individual EE or group of Employees shall have the right at

any time to present grievances to their ER

2. Any provision of law to the contrary notwithstanding andsubject to rules and regulations as the SOLE may promulgate,workers shall have the right to participate in policy anddecision-making processes of the establishment where theyare employed in so far as said processes will directly affecttheir RIGHTS, BENEFITS and WELFARE.

Provision for LABOR MANAGEMENT COUNCILS byworkers and ERs – representatives of workers must beelected by at least a majority of all employees in saidestablishment



Part V

UNION REPRESENTATION

ESTABLISHING UNION MAJORITY

STATUS

CONCEPTS

Certification Election OR Consent Election: the process ofdetermining through secret ballot the sole and exclusiverepresentative of the employees in an appropriate bargaining unitfor purposes of collective bargaining or negotiation. [DepartmentOrder No. 40-03 Series of 2003 Rule I (h)]

Certification election Consent Election

Purpose Aimed at determiningthe sole and exclusivebargaining agent of allemployees in anappropriate bargainingunit for the purpose ofcollective bargaining1st Level of Choice:Yes Union or No Union2nd Level of Choice: If“Yes Union” wins,WHICH union.[UST Faculty Union v.Bitonio (1999)]

Merely todetermine theissue of majorityrepresentation ofall the workers inthe appropriatecollectivebargaining unit

Conduct Ordered by the DOLE Voluntarilyagreed upon bythe parties, withor w/ointervention fromDOLE

From the very nature of consent election, it is a separate anddistinct process and has nothing to do with the import and effect ofa certification election. Neither does it shorten the terms of anexisting CBA nor entitle the participants thereof to immediatelyrenegotiate an existing CBA although it does not preclude theworkers from exercising their right to choose their sole andexclusive bargaining representative after the expiration of the sixty(60) day freedom period.[Warren Manufacturing Workers Union vs. The Bureau Of LaborRelations (1988)]

Run-off Election: an election between the labor unions receivingthe two (2) highest number of votes in a certification or consentelection with three (3) or more choices

Conditions:1. such a certified or consent election results in none

of the 3 or more choices receiving the majority ofthe valid votes cast

2. the total number of votes cast for all contendingunions is at least 50% of the number of votes cast[Department Order No. 40-03 Series of 2003 Rule I(ss)]

CERTIFICATION ELECTION

BACKGROUND POLICIES AND CHARACTERISTICS BEHIND ACERTIFICATION ELECTION (IDS-DV)

1. It is not litigation, but a mere investigation of a non-adversarycharacter

2. Object of the proceedings is not the decision of anyalleged commission of wrong nor asserted deprivation of right,but is merely the determination of proper bargaining units andthe ascertainment of the will and choice and choice of theemployees in respect of the selection of the bargainingrepresentative. The determination of the proceeding does notentail the entry of remedial orders or redress of rights, butculmination solely in an official designation of bargaining unitsand an affirmation of the employees expressed choice of

bargaining agent. [Young Men Labor Union Stevedores v CIR(1965)]

IMPLICATION: “Technical rules and objections should nothamper the correct ascertainment of the labor union thathas the support and confidence of the majority of theworkers and is thus entitled to represent them inbargaining for the terms and conditions of theiremployment.” (Port Workers Union v. DOLE)

2. It is most DEMOCRATIC and most efficacious/effective way(Samahang Manggagawa sa Permex case)3. It is a STATUTORY POLICY (Belyca Corp. v. Ferrer-Calleja)

IMPLICATION: Thus it should not be circumvented[George & Peter Lines, Inc. v. Associated Labor Union(1985)]. There should be no obstacle in conducting theCertification election.

4. There can be no direct certification

Rationale for prohibition: The main purpose of theprocedure in Art. 257 - 260 is to aid in ascertaining themajority representation. The implementing rulespertinent to these provision are all calculated to ensurethat the certified bargaining rep is the TRUE CHOICE OFTHE EMPLOYEES against all contender. The constitutionalmandate that the State shall assure the rights of theworkers to selforganization, collective bargaining,security of tenure and just and humane conditions ofwork, should be achieved under a system of law such asthe aforementioned provisions of the pertinent statute.[Colgate Palmolive Philippines v. Ople(1988)]

6. There can be no voluntary recognition

Rationale for prohibition: Certification election is thebest and most appropriate means of ascertaining the willof the employees as to their choice of an exclusivebargaining representative. That there are no competingunions involved should not alter that principle. Thefreedom of choice by the employer being the primordialconsideration, besides the fact that the employees canchoose between ALU, the union, and NO union. (George& Peter Lines, Inc. v. ALU, 1985)

This has been a debatable topic. Even after the SupremeCourt made the ruling, the DOLE still included provisionso Voluntary Recoginition in DO No. 40-03 series of 20031.

1Rule I: (bbb) "Voluntary Recognition" refers to the process

by which a legitimate labor union is recognized by the employer as theexclusive bargaining representative or agent in a bargaining unit,reported with the Regional Office in accordance with Rule VII, Section 2of these Rules.

Rule VI Section 2. Determination of representation status;modes. – The determination of an exclusive bargaining agent shall bethrough voluntary recognition in cases where there is only onelegitimate labor organization operating within the bargaining unit, orthrough certification, run-off or consent election as provided in theseRules.

RULE VII: VOLUNTARY RECOGNITIONSection 1. When and where to file. – In unorganized

establishments with only one legitimate labor organization, theemployer may voluntarily recognize the representation status of such aunion. Within thirty (30) days from such recognition, the employer andunion shall submit a notice of voluntary recognition with the RegionalOffice which issued the recognized labor union's certificate ofregistration or certificate of creationof a chartered local.

Section 2. Requirements for voluntary recognition. - Thenotice of voluntary recognition shall be accompanied by the originalcopy and two(2) duplicate copies of the following documents:

(a) a joint statement under oath of voluntary recognitionattesting to the fact of voluntary recognition;

(b) certificate of posting of the joint statement of voluntaryrecognition for fifteen (15) consecutive days in at least two (2)conspicuous places in the establishment or bargaining unit where theunion seeks to operate;



So the issue now is which should prevail? Azucena in hisbook recognizes Voluntary Recognition as valid andwelcomes it as a new development to the law.

7. An employer-employee relationship a PRE-CONDITION beforea petition for certification election can be entertained

Rationale: Without such relationship, there will be noduty to bargain on the part of either the employer oremployee. Thus it will be senseless to go on with acertification election to choose their bargainingrepresentative when there is no duty to collectivelybargain anyway. (Allied Free Workers Union v. CiaMaritima, 1967)

8. Non-union members are not excluded from voting in thecertification election

Neither law, administrative rule nor jurisprudencerequires that only employees affiliated with any labororganization may take part in a certification election. Onthe contrary, the plainly discernible intendment of thelaw is to grant the right to vote to all bona fideemployees in the bargaining unit, whether they aremembers of a labor organization or not. [Reyes v.Trajano (1992)]

7. The receipt by the excluded employees of certain benefits underthe existing CBA does not bar them from forming their own labororganization and from participating in the certification election.[Barbizon v. Nagkakaisang Supervisor (1996)]

STATUTORY FRAME-WORK AND POLICY

Statutory Frame-work

A. The different entry points to a certification election

Note: The mechanics of the three entry-points are similar and

(c) the approximate number of employees in the bargainingunit, accompanied by the names of those who support the voluntaryrecognition comprising at least a majority of the members of thebargaining unit; and

(d) a statement that the labor union is the only legitimatelabor organization operating within the bargaining unit.

All accompanying documents of the notice for voluntaryrecognition shall be certified under oath by the employer representativeand president of the recognized labor union.

Section 3. Action on the Notice. - Where the notice ofvoluntary recognition is sufficient in form, number and substance andwhere there is no other registered labor union operating within thebargaining unit concerned, the Regional Office, through the LaborRelations Division shall, within ten (10) days from receipt of the notice,record the fact of voluntary recognition in its roster of legitimate laborunions and notify the labor union concerned.

Where the notice of voluntary recognition is insufficient inform, number and substance, the Regional Office shall, within the sameperiod, notify the labor union of its findings and advise it to comply withthe necessary requirements. Where neither the employer nor the laborunion failed to complete the requirements for voluntary recognitionunder Section 2 of this Rule within thirty (30) days from receipt of theadvisory, the Regional Office shall return the notice for voluntaryrecognition together with all its accompanying documents withoutprejudice to its re-submission.

Section 4. Effect of recording of fact of voluntaryrecognition. - From the time of recording of voluntary recognition, therecognized labor union shall enjoy the rights, privileges and obligationsof an existing bargaining agent of all the employees in the bargainingunit. Entry of voluntary recognition shall bar the filing of a petition forcertification election by any labor organization for a period of one (1)year from the date of entry of voluntary recognition. Upon expiration ofthis one-year period, any legitimate labor organization may file apetition for certification election in the same bargaining unitrepresented by the voluntarily recognized union, unless a collectivebargaining agreement between the employer and voluntarily recognizedlabor union was executed and registered with the Regional Office inaccordance with Rule XVII of these Rules.

the same.

I. Art. 256: Organized Establishments

Organized establishment: an establishment with eithera. an existing CBA; orb. duly certified bargaining agent

II. Art. 257: Unorganized Establishments

Unorganized establishment: an establishment without abargaining representative

III. Art. 258: Employer-Initiated Certificate Election

B. The BARS to a CE: Prevents the happening of a CE.

a. Contract bar rule (Art. 232)b. Deadlock-bar rulec. One year bar rule

Note: among all the bar rules, only the contract bar is actuallyin the Labor Code, the other two are in the implementing rules.

C. Suspension of CE: Prejudicial question rule

Detailed Discussion of the Framework

A. The different entry points to a certification election

I. Art. 256: Organized Establishment

Requisites for holding certification election:

a. Verified petition, supported by at least 25% of all theemployees in the bargaining unit, questioning themajority status of the incumbent bargaining agent

b. Filed before the DOLE withing the 60-day period beforethe expiration of the collective bargaining agreement

Note: In relation to the one-year bar rule, a duly certified bargainingagent is allowed one year to negotiate for the signing of a CBA, thatis why no CE can be filed at this time.Requisite for valid election: at least a majority of all eligible votersin the unit must have cast their votes

Organized Establishment v. Unorganized Establishment(The distinctions are important because the requirements aredifferent.)

Art. 256:ORGANIZED

Art. 257:UNORGANIZED

Bargainingagent

Existing, has one None

Petition filed Has to be aVERIFIED petition

No need to beVerified

Freedom Period No petition forCertificationelection EXCEPTwithin 60 daysbefore theexpiration of thecollectivebargainingagreement (SeeArt. 253 & 253-A)

Take note how SCinterpreted theterm “WITHIN”.

What is therationale of

Not applicable.

No freedom period.Can file petitionanytime.



freedom period inOrganizedestablishments,why is there none inunorganizedestablishments?

It has something todo with industrialpeace

Substantial supportrule

Must be dulysupported by 25%of ALL THEMEMBERS OF THEAPPROPRIATEBARGAININGUNIT.

Percentage base:all members of anappropriatebargaining unit.

What is intent andpurpose of law forrequiring thesubstantial supportrule?Law wants to knowthe intentionof the employees.If they really wanta CE, since theyalready have abargaining agent.

NO substantialsupport rule.

WHY?Intention of law isto bring in theunion, toimplement policybehind Art. 211a.

DISCUSSIONS ON THE FREEDOM PERIOD

General Rule: The Bureau shall not entertain any petition forcertification election or any other action which may disturb theadministration of duly registered existing collective bargainingagreements affecting the parties [Art. 232 – sec. 15 of RA 6715]

Exceptions: Art. 253, 253-A and 256 of this Code (60 day freedomperiod)

The purpose of the prohibition against the filing of apetition for certification election outside the so-called freedomperiod is to ensure industrial peace between the employer andits employees during the existence of the CBA. [RepublicPlanters Bank Unionv. Laguesma (1996)]

The premature renewal of a CBA cannot bar the holdingof a certification election by virtue of a bona fide petition filedwithin the freedom period if the clear intention was tofrustrate the constitutional right of the employees to self-organization. [Associated Labor Union v. Calleja (1989)]

DISCUSSION ON THE SUBSTANTIAL SUPPORT RULE IN ORGANIZEDESTABLISHMENTS

NOTE: A union that is merely filing a MOTION FOR INTERVENTION ina CE filed by another union need NOT present substantial support.The substantial support is only needed when filing for a petition forcertification election.

When should the substantial support be shown or complied with?

It need not be shown at the time of filing of the petition, may beshown within a reasonable time thereafter but should bebefore the election. [Port Worker’s Union of the Philippines v.Laguesma]

Is the substantial support rule a mandatory requirement?

If you strictly follow the letter of the law it would seem to bemandatory. However, if the petition does not comply with the

substantial support requirement, the BLR may exercise its discretionin determining whether or not a certification election must beconducted. [Scout Albano Memorial College v. Noriel (1978)]

Does a RIVAL union have authority to VERIFY the signatures in thesubstantial support requirement?

No a rival union may not. Only the department of labor hasauthority to verify. (Today’s Knitting Free Workers Union v.Noriel,1977)

What is the effect on a petition of certification election of thewithdrawal from union membership filed by thatunion?

Once the required percentage requirement has been reached, theemployees’ withdrawal from union membership taking place afterthe filing of the petition for certification election will not affect thepetition. On the contrary the presumption arises that thewithdrawal was not free but was procured through duress,coercion, or for a valuable consideration. (Oriental Tin Can LaborUnion v. Secretary of Labor and Employment, 1998)

II. Art. 257: Unorganized Establishment

Who shall file the petition under Art. 257?

A LEGITIMATE labor organization. It cannot be an unregistered labororganization. This is best read in relation to Art. 242 whichenumerates the rights granted to a legitimate labor organizationand one of those rights is the right to be chosen as the exclusivebargaining representative. This is one way the law encouragesunion registration.

VENUE: Where to file? BLR region where union is. The one nearerto the employees.

III. Art. 258: Employer-Initiated Petition

When can an employer file a petition?

Only when it is requested to bargain collectively.

Principles:

1. Employer is a TOTAL STRANGER in the process of CertificationElection. Employer has NO STANDING to file a MOTION TODISMISS (Phil. Telephone Telegraph v. SOL)

2. A company’s interference in the CE creates a suspicion that itintends to establish a company union (Oriental Tin Can LaborUnion v. Secretary of Labor).

CONDUCTING AGENCY

Bureau of Labor Relations [Art. 226 & 258]

1. All certification cases shall be decided within 20 working days

2. The BLR shall conduct the certification election within 20 days

Certification Election–Process and ProcedureDO No. 40-03

WHO may file? Sec. 1 1) Any legitimate labor organizationmayfile a petition for certificationelection.

2) When requested to bargaincollectively, an employer may file apetition for certification electionwith theRegional Office.

3) If there is no existing registeredcollective bargaining agreement in



thebargaining unit, the Regional Officeshall,after hearing, order the conduct of acertification election.

WHERE to file?Sec. 2

Regional Office whichissued the petitioning union'scertificateof registration/certificate of creationofchartered local.

The petition shall be heardand resolved by the Med-Arbiter.

Where two or morepetitions involving the samebargaining unit are filed in oneRegional Office, the same shall beautomatically consolidated with theMed-Arbiter who first acquiredjurisdiction.

Where the petitions arefiled in different Regional Offices, theRegional Office in which the petitionwas first filed shall exclude allothers; in which case, the latter shallindorse the petition to the formerfor consolidation.

WHEN to file?Sec. 3

A petition for certification electionmay be filed anytime, except:

(a) when a fact of voluntaryrecognition has been entered or avalid certification, consent or run-offelection has been conducted withinthe bargaining unit within one (1)year prior to the filing ofthe petition for certification election.

Where an appeal has beenfiled from the order of the Med-Arbiter certifying the results of theelection, the running of theone year period shall be suspendeduntil the decision on the appeal hasbecome final and executory;

(b) when the duly certified union hascommenced and sustainednegotiations in good faith with theemployer in accordance with Article250 of the Labor Code within theone year period referred to in theimmediately preceding paragraph;

(c) when a bargaining deadlock towhich an incumbent or certifiedbargaining agent is a party had beensubmitted to conciliation orarbitration or had become thesubject of a valid notice of strike orlockout;

(d) when a collective bargainingagreement between the employerand a duly recognized or certifiedbargaining agent has been registeredin accordance with Article 231 of theLabor Code.

Where such collectivebargaining agreement is registered,the petition may

be filed only within sixty (60) daysprior to its expiry.

What is a forced intervenor?

The incumbent bargaining agent shall automatically be one of thechoices in the certification election as forced intervenor. [Sec. 7D.O. 40-03]

POSTING OF NOTICE

General Rule: Mandatory posting of election notices for 5 days.

Exception: Posting of election notices may be waived. [JisscorIndependent Union v Torres (1993)]

VOTING LIST AND VOTERS

Basis of determining voters may be agreed upon by the parties (i.e.the use pf payroll) [Acoje Workers Union v NAMAWU (1963)]

EFFECT NON-PARTICIPATION PREVIOUS ELECTION

Failure to take part in previous elections is no bar to the right toparticipate in future elections. No law, administrative rule orprecedent prescribes forfeiture of the right to vote by reason ofneglect to exercise the right in past cases. [Reyes v. Trajano (1992)]

ALL EMPLOYEES ENTITLED TO VOTE

1. All rank-and-file employees in the appropriate bargaining unit:The Code makes no distinction as to their employment status.All they need to be eligible to support the petition is to belongto a bargaining unit. [Airtime Specialists, Inc. v Director of BLR(1990)]



Rationale: Collective bargaining covers allaspects of the employment relation and the resultantCBA binds all employees in the bargaining unit. All rankand file employees, probationary or permanent, have asubstantial interest in the selection of the bargainingrepresentative.

2. Employees who have been improperly laid off but who have apresent, unabandoned right to or expectation ofreemployment, are eligible to vote in certification elections. Ifthe dismissal is under question, employees concerned couldstill qualify to vote in the elections. [Philippine Fruits v Torres(211 SCRA 95)]

CHALLENGE VOTER

An employer has no standing to question a certification electionsince this is the sole concern of the workers but may question theinclusion of any disqualified employee in the certification electionduring the exclusion-inclusion proceedings before therepresentation officer. [Phil. Telephone & Telegraph Co. vLaguesma (1993)]

VOTING DAY

The election shall be set on a regular business day. [Section 2, RuleVI,Book VI of the Rules to Implement the Labor Code]

PROTEST

Requirements in order that a protest filedwould prosper [Philippine Fruits and Vegetables Industries v.Torres (1992)]:

1. The protest must be filed with the representation officer andmade of record in the minutes of the proceedings before theclose of election proceedings, and

2. The protest must be formalized before the Med-Arbiter withinfive (5) days after the close of the election proceedings.

Protests not so raised are deemed waived. [JisscorIndependent Union v Torres (1993)]

Appeal from Certification Election Orders [Art. 259]

Ground: the rules and regulations or parts thereof established bythe Secretary of Labor for the conduct of election have beenviolated

Period for decision: 15 calendar days

Referral of the appeal to the Trade Union Congress of thePhilippines (TUCP), a federation of labor unions is glaringly illegaland void. The Labor Code never intended that the Director of LaborRelations should abdicate, delegate and relinquish his arbitrationalprerogatives in favor of a private person or entity or to a federationof trade unions. Article 226, 259, 260 are mandatory and should bestrictly adhered to. They are part and parcel of the adequateadministrative machinery established by the Labor Code for theexpeditious settlement of labor disputes. [Ilaw at Buklod ngManggagawa v. Dir. Of Labor Relations. 91 SCRA 482]

ANNULMENT

General allegation of duress is not sufficient to invalidatea certification election; it must be shown by competent and credibleproof. [United Employees Union of Gelmart Inv. v. Noriel (1975)]

Irregularities that may invalidate certification election:c. inability of workers to voted. failure to safeguard secrecy of the ballote. intimidation of election supervisors and neglect in

performance of duties[Confederation of Citizens Labor Union v. Noriel (1982)]

Certification Election at a glance…

Filing of petition for certification election

Hearing and resolution by Med-Arbiter

Conduct of certification election

Filing of protest at the close of the certification election

Protest formalized within 5 days from close of election

Appeal decision of the Med-Arbiter to the Secretary of Labor

Appeal to be decided within 15 calendar days

B. Bars to the Certification Election

1. THE CONTRACT BAR RULE (Art. 232)

GENERAL RULE: The bureau shall NOT entertain any petition forcertification election.

EXCEPT: (Freedom period)Art. 253, 253-A, 256: Within 60 daysbefore expiration of the five year term of the CBA.

The contract bar rule can be validly invoked only if theexisting CBA contains substantially those materials that should beincluded in the CBA at the time of the filing of the petition forcertification election. [Buklod ng Saulog Transit v. Casalla (1956)]

What if a CBA is not registered but validly entered into by theparties, will it bar a petition for CE?

Disini: It will, applying by analogy Trade Union of Philippines v.Laguesma which says that none compliance with a proceduralrequirement (in this case it was a late filing of the CBA) should notadversely affect the substantive validity of the CBA.

What is the effect of an expired CBA on the contract bar rule?No petition for CE may be filed after the lapse of the 60 dayfreedom period. The old CBA is extended until a new one is filed.The purpose is to ensure stability in the relationship of the workersand the company by preventing frequent modifications of any CBAearlier entered into by them in good faith and for the stipulatedoriginal period.

What if the CBA was suspended?Under Art. 253-A the representation limit for the exclusivebargaining agent applies only when there is an extant CBA in fullforce and effect. In the instant case, the parties agreed to suspendthe CBA and put in abeyance the limit on the representation period.(Rivera v. Espiritu GR no. 135547 January 23, 2002)

2. DEADLOCK-BAR RULERequisites:

1. Parties must have negotiated in good faith.

2. Deadlock must have been submitted to voluntaryarbitration or a valid subject of a valid notice of strike orlock-out.

3. ONE-YEAR BAR RULE

From time of valid certification election. Not from time offinal resolution of appeal.

DATE OF ELECTION:1. Date election is certified



2. If APPEALED, date when finally resolved

C. SUSPENSION PREJUDICIAL QUESTION RULE

*Should be read in relation to Art. 248d: ULP: “It shall be unlawfulfor an employer to commit any of the following unfair laborpractice. (d) To initiate, dominate, assist or otherwise interfere withthe formation or administration of any labor organization, includingthe giving of financial or other support to it or its organizers orsupporters.

WHAT SUSPENDS: Formal charge of ULP against the employer forestablishing a company union.

WHO MAY ASK FOR SUSPENSION: Only a union. CE cannot besuspended based on a pendency of a formal charge of ULP against alabor organization.

RATIONALE FOR SUSPENSION: If there is a union dominated by thecompany, to which some of the workers belong, an election amongworkers and employees of the company would not reflect the truesentiment and wishes of the said workers and employees becausethe votes of the members of the dominated union would not befree. Such charge of company domination is a prejudicial questionthat until decided, shall suspend or bar proceedings for certificationelection. If it were a labor organization objecting to theparticipation in a certification election of a company-dominatedunion, as a result of which acomplaint for an unfair labor practice case against the employerwas filed, the status of the latter union must be first cleared in sucha proceeding before such voting could take place. The reason is thatthe certification election may lead to the selection of an employerdominated or company union as the employees' bargainingrepresentative, and when the courtfinds that said union is employer-dominated in the unfair laborpractice case, the union selected would be decertified and thewhole election proceedings would be rendered useless andnugatory.' There would be an impairment of the integrity of thecollective bargaining process if a company-dominated union wereallowed to participate in a certification election. [United CMCTextile Worker’s Union v. BLR (1984)]



Part VI

COLLECTIVE BARGAINING

IMPLEMENTING PROVISIONS

1. PROCEDURE Art. 250Art. 251Cf. Art. 233

2. DUTY TO BARGAIN Art. 252COLLECTIVELY Art. 253

3. TERMS Art. 253-A

7.01 GENERAL CONCEPTS

1. POLICY DECLARATION

1987 Constitution. Art. XIII, Sec. 3

The State shall guarantee the rights of workers tocollective bargaining and negotiations.

The State shall promote the principle of sharedresponsibilities between workers and employers and thepreferential use of voluntary modes in settling disputes,including conciliation, and shall enforce their mutualcompliance therewith to foster industrial peace.

Labor Code, Art 211

(a) To promote and emphasize the primacy of FREE COLLECTIVEBARGAINING and negotiations, including voluntary arbitration,mediation and conciliation, as modes of setting labor or industrialdisputes;

Kiok Loy v. NLRC (1986)

Collective bargaining which is defined as negotiations towards acollective agreement, is one of the democratic frameworks underthe New Labor Code, designed to stabilize the relation betweenlabor and management and to create a climate of sound and stableindustrial peace. It is a mutual responsibility of the employer andthe Union and is characterized as a legal obligation. So much so thatArticle 249, par. (g) of the LaborCode makes it an unfair labor practice for an employer to refuse "tomeet and convene promptly and expeditiously in good faith for thepurpose of negotiating an agreement with respect to wages, hoursof work, and all other terms and conditions of employmentincluding proposals for adjusting any grievance or question arisingunder such an agreement and executing a contract incorporatingsuch agreement, if requested by either party. "

2. NATURE AND PURPOSE

The institution of collective bargaining is a prime manifestation ofindustrial democracy at work. The two parties to the relationship,labor and management, make their own rules by coming to terms.That is to govern themselves in matters that really count. [UnitedEmployees Union of Gelmart Industries v. Noriel (1975)]

3. WAIVER

The right to free collective bargaining includes the right to suspendit. [Rivera v. Espiritu (2000)]7.02 BARGAINING PROCEDURE

1. PRIVATE PROCEDURE

Art. 251 Duty to bargain collectively in the absence of collectivebargaining agreements. — In the ABSCENCE of an agreement orother VOLUNTARY ARRANGEMENT providing for a MOREEXPEDITIOUS manner of collective bargaining, it shall be the duty ofthe employer and the representatives of the employees to bargaincollectively in accordance with the provisions of this Code.

The Labor Code authorizes parties to provide for their ownprocedures in Collective Bargaining but it must be moreEXPEDITIOUS that that provided in Art. 250.

o If they are unable to agree they must followprocedure in the labor code (Art. 250).

IMPLICATION: Provisions of this code are only supplementarynot mandatory with regards to the process of collective bargaining.Because it is the policy of the state to promote the primacy of FREEcollective bargaining. (211a).

2. CODE PROCEDURE

Art. 250

Party desiring to bargain collectively shall serve written notice onother party with statement of proposals

Reply by other party within 10 calendar days from receipt of notice

Should differences arise, request for conference: within 10 daysfrom date of request

If dispute not settled, Board shall intervene on request or motuproprio & call parties to conciliation meetings

NOTE: These procedures are DIRECTORY in nature and notmandatory, failure to comply with the prescribed time periods willnot amount to an unfair labor practice.

3. CONCILIATION PROCEDURE

Art. 250 (c) If the dispute is not settled, the Board shall interveneupon request of either or both parties or at its own initiative andimmediately call the parties to conciliation meetings.

During conciliation proceedings:

1. The Board shall have the power to issue subpoenas requiringthe attendance of the parties to such meetings.

2. It shall be the duty of the parties to participate fully andpromptly in the conciliation meetings the Board may call;

3. The parties are prohibited from doing any act which maydisrupt or impede the early settlement of the disputes; and

4. The Board shall exert all efforts to settle disputes amicably andencourage the parties to submit their case to a voluntaryarbitrator.

Privileged Communication (Art. 233)5. Information and statements made at conciliation proceedings

shall be treated as privileged communication and shall not beused as evidence in the Commission.

6. Conciliators and similar officials shall not testify in any court orbody regarding any matters taken up at conciliationproceedings conducted by them.

7.03 DUTY TO BARGAIN

Meaning of duty to bargain collectively:

A. the performance of a mutual obligation to meet and convenepromptly and expeditiously in good faith for the purpose ofnegotiating an agreement with respect to wages, hours ofwork and all other terms and conditions of employmentincluding proposals for adjusting any grievances or questionsarising under such agreement and executing a contractincorporating such agreements if requested by either party,but such duty does not compel any party to agree to aproposal or to make any concession. [Art. 252]



1. POSITIVE STATEMENT

NATURE of duty to bargain: Mutual Obligation

HOW: to meet and convene promptly and expeditiously in goodfaith.

PURPOSE: for the purpose of negotiating an agreement(CBA)

NEGOTIABLE ISSUES: with respect to wages, hours of work and allother terms and conditions of employment including proposals foradjusting any grievances or questions arising under such agreement

2. NEGATIVE STATEMENT DUTY:

“…but such duty does not compel any party to agree to a proposalor to make any concession. “

3. EXECUTION OF A CONTRACT: Art. 252 also states that it is part ofthe duty to bargain to “execute a contract incorporating suchagreements if requested by either party.”

B. When there is a collective bargaining agreement, the duty tobargain collectively shall also mean that neither party shallterminate or modify such agreement during its lifetime. [Art.253]

Exception: either party can serve a written notice toterminate or modify the agreement at least sixty (60)days prior to its expiration date BUT it shall be the duty ofboth parties to keep the status quo and to continue in fullforce and effect the term and conditions of the existingagreement during the 60-day period and/or until a newagreement is reached by the parties.

Rights of the parties:

1. Right of legitimate labor organization to be furnished bythe employer with annual audited financial statements,including the balance sheet and profit and lossstatement, upon request [Art. 242 (c)]

2. The parties shall, at the request of either of them, makeavailable such up-to-date financial information on theeconomic situation of the undertaking, which is normallysubmitted to relevant government agencies, as ismaterial and necessary for meaningful negotiations.

Where the disclosure of some of this information couldbe prejudicial to the undertaking, its communication may bemade condition upon a commitment that it would be regardedas confidential to the extent required. The information to be made available may be agreedupon between the parties to collective bargaining.

[DO No.40-03 Seriies of 2003, RULE XVI, Section 2]

DOCTRINES

While it is a mutual obligation, the employer is not under anylegal duty to initiate contract negotiation.The mechanics of collective bargaining is set in motion when thefollowing are present:

(1) possession of the status of majority representation of theemployees' representative in accordance with any of the means ofselection or designation provided for by the Labor Code,

(2) proof of majority representation and

(3) a demand to bargain under Article 251, par. (a) of the New LaborCode. [Kiok Loy v NLRC (1986)]

Collective bargaining does not end with the execution of anagreement. It is a continuous process. The duty to bargain imposeson the parties during the term of their agreement themutual obligation "to meet and confer promptly and expeditiouslyand in good faith . . . for the purpose of adjusting any grievances orquestion arising under such agreement" and a violation of this

obligation is an unfair labor practice. [Republic Savings Bank v. CIR(1967)]

DEADLOCK

Collective Bargaining Deadlock: the situation between the laborand the management of the company where there is failure in thecollective bargaining negotiations resulting in a stalemate [SanMiguel Corporation v. NLRC (1999)]

Ground for strike or lockout [Rule XXII, Section I, of the Rulesand Regulations Implementing Book V the Labor Code]

MINUTES OF NEGOTIATION

The Minutes reflects the proceedings and discussions undertaken inthe process of bargaining for worker benefits in the same way thatthe minutes of court proceedings show what transpired therein. Atthe negotiations, it is but natural for both management and labor toadopt positions or make demands and offer proposals and counter-proposals. However, nothing is considered final until the partieshave reached an agreement. Where a proposal raised by acontracting party does not find print in the CBA, it is not a partthereof and the proponent has no claim whatsoever to itsimplementation.[Samahang Manggagawa sa Top Form v. NLRC(1998)]

SUSPENSION OF BARGAINING

In order to allow the employer to validly suspend the bargainingprocess there must be a valid petition for certification electionraising a legitimate representation issue. Hence, the mere filing of apetition for certification election does not ipso facto justify thesuspension of negotiation by the employer. The petition must firstcomply with the provisions of the Labor Code and its ImplementingRules. [Colegio de San Juan de Letran v. Assn. of Employees (2000)]

7.04 BARGAINABLE ISSUES

BARGAINABLE ISSUES: wages, hours of work and all other termsand conditions of employment including proposals for adjusting anygrievances or questions arising under such agreement

What do we mean by “all other terms and conditions ofemployment”?

The “other terms and conditions of employment” to become amandatory bargainable issue must have a connection between theproposal and the nature of the work.

Example of what falls under this statement:Stewardess bargains for better uniforms.

Example of what does not fall under this statement:A company janitor asks for a car.

Importance of determining whether an issue is a mandatorybargaining issue or only a permissive bargaining issue:

"The question as to what are mandatory and what are merelypermissive subjects of collective bargaining is of significance on theright of a party to insist on his position to the point of stalemate. Aparty may refuse to enter into a collective bargaining contractunless it includes a desired provision as to a matter which is amandatory subject of collective bargaining; but a refusal to contractunless the agreement covers a matter which is not a mandatorysubject is in substance a refusal to bargain about matters which aremandatory subjects of collective bargaining; and it is no answer tothe charge of refusal to bargain in good faith that the insistence onthe disputed clause was not the sole cause of the failure to agree orthat agreement was not reached with respect to other disputedclauses." [Samahang Manggagawa sa Top Form v. NLRC (1998)]

The consequences are different for the refusal to bargain.

If mandatory issue, refusal to bargain could lead to:- A case of Unfair Labor Practice- May be a valid ground for a strike or lockout



If permissive issue, refusal to bargain will NOTproduce a case for ULP, NOR will it allow thateconomic weapons be used. Cannot strike or lock-out.

Guidelines:

1. The question of minimum wage is not negotiable.PhilAmerican Mgt Co. v. Phil. American Mgt Employees(1973)

2. Retirement plan is negotiable. [Nestle Phil. V NLRC(1991)]

7.05 THE COLLECTIVE BARGAINING AGREEMENT

Definition: a contract executed upon request of either theemployer or the exclusive bargaining representative incorporatingthe agreement reached after negotiations with respect to wages,hours of work and all other terms and conditions of employment,including proposals for adjusting any grievances or questions arisingunder such agreement.

Note: While the terms and conditions of a CBA constitute thelaw between the parties, it is not, however, an ordinary contract towhich is applied the principles of law governing ordinary contracts.A CBA, as a labor contract within the contemplation of Article 1700Civil Code which governs the relations between labor and capital, isnot merely contractual in nature but impressed with public interest,thus, it must yield to the common good.

[Davao Integrated Port Stevedoring Services v. Abrquez (93)]

CONTENTS

Effect Sub-standard Contract: entering into CBA which providesterms and conditions of employment below minimum standardsestablished by law is a ground for cancellation of union registration[Art. 239 (f)]

Duration and Re-negotiation

Art. 253-A Terms of a collective bargaining agreement.

POLITICAL ASPECT: Any Collective Bargaining Agreement that theparties may enter into shall, insofar as the representation aspect isconcerned, be for a term of five (5) years.

No petition questioning the majority status of theincumbent bargaining agent shall be entertainedand no certification election shall be conducted bythe DOLE outside of the sixty-day periodimmediately before the date of the expiry of suchfive year term of the Collective BargainingAgreement.

ECONOMIC ASPECT: All other provisions of the CBA shall berenegotiated not later than three (3) years after its execution.

Any agreement on such other provisions of the CBAentered into within six months from the expiry ofthe term of such other provisions as fixed in suchCBA, shall retroact to the day immediately followingsuch date.

If any such agreement is entered into beyond sixmonths, the parties shall agree on the duration ofthe retroactivity thereof.

In case of a deadlock in the renegotiation of theCBA, the parties may exercise their rights under thisCode.

Grievance Procedure

What are subject of the grievance procedure for adjustment andresolution are grievances arising from the interpretation orimplementation of the collective bargaining agreement. [Navarro IIIv. Damasco (1995)]

REGISTRATION – PERIOD, REQUIREMENTS AND ACTIONS

Art. 231 - Registry of unions and file of CBAs

Within 30 days from execution of CBA, parties must submit copiesto Bureau or DOLE Regional Office for registration, accompanied by

verified proofs of posting in workplace and ratification

Bureau or Regional Offices to act on application within 5 days fromreceipt of CBA

Regional Offices to furnish Bureau copy within 5 days fromsubmission

Bureau or Regional Office shall assess employer a registration fee

Bureau shall maintain file of all CBAs and other related agreements

General Rule: The file shall be open and accessible to interestedparties

Exceptions:1. no specific information submitted I confidence shall be

disclosed unless authorized by the Secretary of Labor2. when it is at issue in any judicial litigation

when public interest or national security so requires

CONTRACT BENEFICIARIES

Who are the beneficiaries to a CBA? All workers in an ABU

In a long line of cases, this Court has held that when a collectivebargaining contract is entered into by the union representing theemployees and the employer, even the nonmember employees areentitled to the benefits of the contract. To accord its benefits onlyto members of the union without any valid reason would constituteundue discrimination against nonmembers. [New Pacific Timberand Supply v. NLRC (2000)]

CONTRACT ADMINISTRATION AND ENFORCEMENT

Nature of the Contract

In Mactan Workers Union vs. Aboitiz, we held that “the termsand conditions of a collective bargaining contract constitute the lawbetween the parties. Those who are entitled to its benefits caninvoke its provisions. In the event that an obligation thereinimposed is not fulfilled, the aggrieved party has the right to go tocourt for redress.” [Babcock-Hitachi (Phils.) V. Babcock-Hitachi(2005)]

A collective bargaining agreement, just like any other contract,is respected as the law between the contracting parties andcompliance therewith in good faith is mandated. Similarly, the rulesembodied in the Civil Code on the proper interpretation ofcontracts can very well govern. The intention of the parties isprimodial; if the terms of the contract are clear, the literal meaningof the stipulations shall control, but if the words appear to becontrary to the evident intention of the parties, the latter shallprevail over the former. [Kimberly Clark Phils. V. Lorredo (1993)]

GRIEVANCE PROCEDURE; Dispute issues and Individual Grievance

Art. 260 Grievance Machinery and Voluntary Arbitration. –

What is to be included in the CBA?

1. provisions that will ensure the mutual observance of its termsand conditions

2. a machinery for the adjustment and resolution of grievancesarising from:

a. the interpretation or implementation of their CBAand



b. those arising from the interpretation orenforcement of company personnel policies.

Procedure:

1. parties to a CBA shall:a. name and designate in advance a Voluntary

Arbitrator or panel of Voluntary Arbitrators, ORb. include in the agreement a procedure for the

selection of such Voluntary Arbitrator or panel ofVoluntary Arbitrators preferably from the listing ofqualified Voluntary Arbitrators duly accredited bythe Board.

In case the parties fail to select a Voluntary Arbitrator orpanel of Voluntary Arbitrators, the Board shall designate theVoluntary Arbitrator or panel of Voluntary Arbitrators, as maybe necessary, pursuant to the selection procedure agreedupon in the CBA, which shall act with the same force andeffect as if the Voluntary Arbitrator or panel of Arbitrators hasbeen selected by the parties as described above.

2. All grievances submitted to the grievance machinery which arenot settled within 7 calendar days from the date of its submissionshall automatically be referred to voluntary arbitration prescribedin the CBA.

3. However, an individual employee or group of employees shallhave the right at any time to present grievances to theiremployer. [Art. 255]

Doctrines:

1. It should be remembered that a grievance procedure is part ofthe continuous process of collective bargaining It is intendedto promote a friendly dialogue between labor andmanagement as a means of maintaining industrialpeace.[Master Iron Labor Union v. NLRC (1993)]

2. No particular setup for a grievance machinery is mandated bylaw. Rather, Article 260 of the Labor Code, as incorporated byRA 6715, provides for only a single grievance machinery in thecompany to settle problems arising from "interpretation orimplementation of their collective bargaining agreement andthose arising from the interpretation or enforcement ofcompany personnel policies.". [Caltex Refinery EmployeesAssociation v. Brilliantes (1997)]

Contract Duration And Renewals

Art. 253-A Terms of a collective bargaining agreement.

Art. 253-A serves as the guide in determining when the CBA atbar is to take effect. It provides that the representation aspect ofthe CBA is to be for a term of 5 years, while . . . [A]ll otherprovisions of the Collective Bargaining Agreement shall be re-negotiated not later than 3 years after its execution. Any agreementon such other provision of the Collective Bargaining Agreemententered into within 6 months from the date of expiry of the term ofsuch other provisions as fixed in such Collective BargainingAgreement shall retroact to the day immediately following suchdate. If such agreement is entered into beyond 6 months, theparties shall agree on the duration of the effectivity thereof. . . . .- Under these terms, it is clear that the 5- year term requirement isspecific to the representation aspect. What the law additionallyrequires is that a CBA must be re-negotiated within 3 years "after itsexecution." It is in this re-negotiation that gives rise to the presentCBA deadlock.- If no agreement is reached within 6 months from the expiry dateof the 3 years that follow the CBA execution, the law expressly givesthe parties — not anybody else — the discretion to fix theeffectivity of the agreement.- Significantly, the law does not specifically cover the situationwhere 6 months have elapsed but no agreement has been reachedwith respect to effectivity. In this eventuality, we hold that anyprovision of law should then apply for the law abhors a vacuum.- One such provision is the principle of hold over, i.e., that in theabsence of a new CBA, the parties must maintain the status quo andmust continue in full force and effect the terms and conditions of

the existing agreement until a new agreement is reached. In thismanner, the law prevents the existence of a gap in the relationshipbetween the collective bargaining parties. Another legal principlethat should apply is that in the absence of an agreement betweenthe parties, then, an arbitrated CBA takes on the nature of anyjudicial or quasi-judicial award; it operates and may be executedonly respectively unless there are legal justifications for itsretroactive application. [Manila Electric Co. V. Quisumbing (1999)]

Art. 253-A refers to CBA’s entered into by the parties as aresult of their mutual agreement. The CBA in this case, on the otherhand, is part of an arbitral award. As such, it may be maderetroactive to the date of expiration of the previous agreement.Therefore, in the absence of a specific provision of law prohibitingretroactivity of the effectivity of arbitral awards issued by theSecretary of Labor pursuant to Article 263(g) of the Labor Code,such as herein involved, public respondent is deemed vested withplenary and discretionary powers to determine the effectivitythereof. [Manila Central Line Corp. v. Manila Central Line FreeWorkers Union (1998)]

CBA and 3rd Party Applicability Rule

Labor contracts such as employment contracts and CBAs arenot enforceable against a transferee of an enterprise, laborcontracts being in personam, thus binding only between the parties.[Sundowner Dev’t. Corp. v Drilon (1989)]

Indeed, an innocent transferee of a business establishmenthas no liability to the employees of the transferor to continueemploying them. Nor is the transferee liable for past unfair laborpractices of the previous owner, except, when the liability thereforis assumed by the new employer under the contract of sale, orwhen liability arises because of the new owner's participation inthwarting or defeating the rights of the employees. The most thatthe transferee may do, for reasons of public policy and socialjustice, is to give preference to the qualified separated employeesin the filling of vacancies in the facilities of the purchaser.[Manlimos v. NLRC (1995)]

Disaffiliation: Doctrine of Substitution

Where there occurs a shift in employee’s union allegianceafter the execution of a collective bargaining contract with theiremployer, the employees can change their agent – the labor union,but the CBA continues to exist. [Benguet Consolidated, Inc. v BCIEmployees and Workers Union—PAFLU (1968)]

WON the terms of an existing CBA particularly as to the economicprovisions, can be extended beyond the three year periodprescribed by law in the absence of a new agreement?

YES. Until a new CBA has been executed by and between theparties, they are duty bound to keep the status quo and to continuein full force and effect the terms and conditions of the existingagreements. The law does not provide for an exception norqualification as to which of the economic provisions of the existingagreements are to retain force and effect, therefore it encompassesall provisions. The New CBA is given PROSPECTIVE effect generallysince 253 and 253-A provides for an automatic renewal clause inexisting CBAs.

PURPOSE: To avoid creating a gap during which noagreement would govern. Better for industrial peace ifeffectivity of the CBA is longer.

[New Pacific Timber and Supply Co. Inc v. NLRC (2000)]



Part VII

UNFAIR LABOR PRACTICE

8.01 INTRODUCTORY CONCEPTS

1. DEFINITION AND GENERAL CONCEPT

Art. 212 (k), LC

Unfair labor practice - means any unfair laborpractice as expressly defined by the Code.

PURPOSE OF THE RULE ON UNFAIR LABOR PRACTICE: protection ofright to self-organization and/or collective bargaining

The employee is not only protected from the employerbut also from labor organization

Employer is also protected from ULP committed by alabor organization

The public is also protected because it has an interest incontinuing industrial peace

Philcom Employees Union v. Phil. Global (2006)Unfair labor practice refers to acts that violate the workers’ right

to organize. The prohibited acts are related to the workers’ right toself-organization and to the observance of a CBA. Without thatelement, the acts, no matter how unfair, are not unfair laborpractices. The only exception is Art. 248 (f) [i.e. to dismiss, dischargeor otherwise prejudice or discriminate against an employee forhaving given or being about to give testimony under this Code]

2. REQUISITE RELATIONSHIP

American President Lines v. Clave (1982)An unfair labor practice may be committed only within the

context of an employer-employee relationship

3. CONSTRUCTION

HSBC Employee Union V. NLRC (1997)The Labor Code does not undertake the impossible task of

specifying in precise and unmistakable language each incidentwhich constitutes an unfair labor practice. Rather, it leaves to thecourt the work of applying the law's general prohibitory language inlight of infinite combinations of events which may be charged asviolative of its terms.

4. ESTOPPEL

Standard Chartered Bank Union v. Confesor (2004)The eventual signing of the CBA does not operate to estop the

parties from raising unfair labor practice charges against each other

5. INTER-RELATIONS OF ACTS OF ULP

Art. 248Unfair labor practices of employers. It shall beunlawful for an employer to commit any of thefollowing unfair labor practice:

a. To interfere with, restrain or coerce employeesin the exercise of their right to self-organization;

Art. 249Unfair labor practices of labor organizations. Itshall be unfair labor practice for a labororganization, its officers, agents or representatives:

a. To restrain or coerce employees in theexercise of their right to self-organization.However, a labor organization shall havethe right to prescribe its own rules withrespect to the acquisition or retention ofmembership;

Note the difference between the wordings of Art. 248(a) and Art.249(a).

Art. 248 (a) – “interfere, restraint, coerce”

Art. 249(a) – “restraint, coerce”

“interfere” not included in Art. 249 because any act of alabor organization amounts to interference to a right toself-organization

Art. 248 (a) and Art. 249(a) are the general grant of protection. Allother cases of ULP enumerated under the said provisions arederivatives of Art. 248(a) and Art. 249 (a)

8.02 UNFAIR LABOR PRACTICE: EMPLOYER AND LABORORGANIZATION ACTS VIOLATING RIGHT OF SELF-ORGANZATION

ULP AND MANAGEMENT FUNCTIONS

Royal InterOcean Lines v. CIR (1960)The protection of workers' right to self-organization does not

interfere with employer's freedom to enforce such rules and ordersas are necessary to [the] proper conduct of his business, so long asemployer's supervision is not for the purpose of intimidating orcoercing his employees with respect to their self-organization andrepresentation.

It is the function of the court to see to it that the rights of self-organization and collective bargaining guaranteed by the Act areamply secured to the employee, but in its effort to prevent unfairlabor practices, the court must be mindful of the welfare of thehonest employer.

Despite the employees' right to self-organization, theemployer therefore still retains his inherent right to discipline hisemployees, his normal prerogative to hire or dismiss them. Theprohibition is directed only against the use of the right to employ ordischarge as an instrument of discrimination, interference oroppression because of one's labor or union activities.

Art. 247, LC

Unfair labor practices violate the constitutionalright of workers and employees to self-organization

These are inimical to the legitimate interests ofboth labor and management, including theirright to bargain collectively and otherwise dealwith each other in an atmosphere of freedomand mutual respect, disrupt industrial peace andhinder the promotion of healthy and stablelabor-management relations.

Unfair Labor Practices are not only violations ofthe civil rights of both labor and managementbut are also criminal offenses



Great Pacific Life Employees Union v. Great Pacific Life AssuranceCorp. (1999)

While an act or decision of an employer may be unfair,certainly not every unfair act or decision constitutes unfair laborpractice (ULP) as defined and enumerated under Art. 248 of theLabor Code.

All the prohibited acts constituting unfair labor practice inessence relate to the workers' right to self-organization. Thus, anemployer may be held liable under this provision if his conductaffects in whatever manner the right of an employee to self-organize. The decision of employer [GREPALIFE] to consider the topofficers of union as unfit for reinstatement is not essentiallydiscriminatory and constitutive of an unlawful labor practice ofemployers under the above-cited provision. Discriminating in thecontext of the Code involves either encouraging membership in anylabor organization or is made on account of the employee's havinggiven or being about to give testimony under the Labor Code.

1. INTERFERENCE, RESTRAINT AND COERCION

Art. 248 (a), LC

It shall be unlawful for an employer to commit any ofthe following unfair labor practice:

a. To interfere with, restrain or coerce employeesin the exercise of their right to self-organization;

Art. 255, LC

The labor organization designated or selected bythe majority of the employees in an appropriatecollective bargaining unit shall be the exclusiverepresentative of the employees in such unit for thepurpose of collective bargaining.

However, an individual employee or group ofemployees shall have the right at any time to presentgrievances to their employer.

Any provision of law to the contrarynotwithstanding, workers shall have the right, subjectto such rules and regulations as the Secretary of Laborand Employment may promulgate, to participate inpolicy and decision-making processes of theestablishment where they are employed insofar assaid processes will directly affect their rights, benefitsand welfare. For this purpose, workers and employersmay form labor-management councils: Provided, Thatthe representatives of the workers in such labormanagement councils shall be elected by at least themajority of all employees in said establishment.

Art. 277 (g), LC

The Department shall help promote and graduallydevelop, with the agreement of labor organizationsand employers, labor-management cooperationprograms at appropriate levels of the enterprisebased on the shared responsibility and mutual respectin order to ensure industrial peace and improvementin productivity, working conditions and the quality ofworking life.

2. NON-UNION MEMBERSHIP OR WITHDRAWAL FROMMEMBERSHIP AS CONDITION EMPLOYMENT

Art. 248 (b), LC

To require as a condition of employment that a person or anemployee shall not join a labor organization or shall withdraw fromone to which he belongs;

This particular provision signifies what is known as a yellow dogcontract.A typical yellow dog contract embodies the following stipulations:

a. a representation by the employee that he is not amember of a labor organization

b. a promise by the employee that he will not join a union

c. a promise by the employee that upon joining a labororganization, he will quit his employment

3. CONTRACTING OUT TO DISCOURAGE UNIONISM

Art. 248 (c), LC

To contract out services or functions beingperformed by union members when such willinterfere with, restrain or coerce employees in theexercise of their rights to self-organization;

The act of an employer in having certain services or functionsbeing performed by union members contracted out is NOT per se anunfair labor practice act. It is only when the contracting out of theservices or functions being performed by union members willinterfere with, restrain or coerce employees in the exercise of theirright to self-organization that it shall be unlawful and shallconstitute ULP act. [Sec. 6 (f) DOLE Department Order No. 18-02,Series of 2002]

4. COMPANY DOMINATION UNION

Art. 248 (d)

To initiate, dominate, assist or otherwise interferewith the formation or administration of any labororganization, including the giving of financial orother support to it or its organizers or supporters;

5. DISCRIMINATION ENCOURAGE/DISCOURAGE UNIONISM

Art. 248 (e), LC

GENERAL RULE: It shall be unlawful To discriminate in regard towages, hours of work and other terms and conditions ofemployment in order to encourage or discourage membership inany labor organization.

EXCEPTION: Nothing in this Code or in any other law shall stop theparties from requiring membership in a recognized collectivebargaining agent as a condition for employment

EXCEPTION TO THE EXCEPTION: Those employees who are alreadymembers of another union at the time of the signing of thecollective bargaining agreement.

Employees of an appropriate bargaining unit who are notmembers of the recognized collective bargaining agent may beassessed a reasonable fee equivalent to the dues and other feespaid by members of the recognized collective bargaining agent, ifsuch non-union members accept the benefits under the collectivebargaining agreement: Provided, that the individual authorizationrequired under Article 242, paragraph (o) of this Code shall notapply to the non-members of the recognized collective bargainingagent;

CLOSED-SHOP – may be defined as an enterprise in which, byagreement between the employer and his employees or theirrepresentatives, no person may be employed in any or certainagreed departments of the enterprise unless he or she is,becomes, and for the duration of the agreement, remains amember in good standing of a union entirely comprised of or ofwhich the employees in interest are part of. [Del Monte v.Saldivar (2007)]



UNION SECURITY CLAUSE – is a stipulation in the CBA whereby themanagement recognizes that the membership of employees inthe union which negotiated the said agreement should bemaintained and continued as a condition for employment orretention of employment. Its purpose is to safeguard andensure the continued existence of the union.

Different kinds of Union Security Clause

a. Closed shop agreement

b. Union shop agreement

c. Agency shop agreement

d. Maintenance of membership agreement

e. Check off

f. Modified closed shop agreement

g. Modified union shop agreement

h. Open shop agreement

Del Monte v. Saldivar (2007)Under the Labor Code, a dismissal may only be effected for any

just or authorized causes as provided by the said law. A dismissalbased on a union security clause of company CBA is notenumerated as one of the just or authorized causes in the LaborCode. But jurisprudence recognized that “it is a State policy topromote unionism to enable workers to negotiate withmanagement on an even level playing field and with morepersuasiveness than if they were individually and separately bargainwith the employer.” For this reason, the law has allowedstipulations for “union shop” and “closed shop” as a means ofencouraging workers to join ands support the union of their choicein the protection of their rights and interests vis-à-vis the employer.

Even though the law recognizes union shop agreement as valid,yet it cannot be used as a means to guarantee to the union anunmitigated discretion in terminating the employment status on anemployee-member. Therefore, the requirements laid down by thelaw in determining whether or not an employee was validlyterminated must still be followed even if it is based on a closed-shop provision of a CBA, i.e. the substantive as well as theprocedural due process requirements.

6. RETALIATION TESTIMONY AGAINST EMPLOYER

Art. 248 (f), LC

To dismiss, discharge or otherwise prejudice ordiscriminate against an employee for having given orbeing about to give testimony under this Code;

7. EXACTION- FEATHERBEDDING

Art. 249 (b)To cause or attempt to cause an employer to

discriminate against an employee, includingdiscrimination against an employee with respect towhom membership in such organization has beendenied or to terminate an employee on any groundother than the usual terms and conditions under whichmembership or continuation of membership is madeavailable to other members;

NATURE OF ACT

Interrogation

Scoty’s Dept. Store v. Micaller (1956)Questioning of employees concerning union membership and

activities and disparaging remarks by supervisory employees madein such away as to hamper the exercise of free choice on the part ofthe employees, have been uniformly condemned as an unfair laborpractice.

Phil. Steam Navigation Co. v. Phil. Marine Officer’s Guild (1965)

An employer is not denied the privilege of interrogating itsemployees as to their union affiliation, provided the same is for alegitimate purpose and assurance is given by the employer that noreprisals would be taken against unionists. Nonetheless, anyemployer who engages in interrogation does so with notice that herisks a finding of unfair labor practice if the circumstances are suchthat his interrogation restrains or interferes with employees in theexercise of their rights to self-organization.

When the interrogation and investigation by the company’ssupervisory officials of the employees in such a way that it hampersthe exercise of their right to self-organization, ULP is committed.The subjection by the company of union to vilification and itsparticipation in soliciting membership for a competing union is alsoULP act.

Speech

Insular Life Assurance Co. Employees Assn. v. Insular LifeAssurance Co. Ltd (1971)

Indeed, it is an unfair labor practice for an employer operatingunder a collective bargaining agreement to negotiate or to attemptto negotiate with his employees individually in connection withchanges in the agreement. And the basis of the prohibitionregarding individual bargaining with the strikers is that although theunion is on strike, the employer is still under obligation to bargainwith the union as the employees' bargaining representative. This istantamount to an illegal act of interference.

The sending of letter containing promises of benefits to theindividual employees in order to entice them to return to work isnot protected by the free speech provision of the Constitution. Thesame is true with letters containing threats to obtain replacementsfor the striking employees in the event they do not report to workon a certain date. The free speech protection under theConstitution is inapplicable where the expression of opinion by theemployer or his agent contains promise of benefits, threats orreprisals.

Espionage


As regard to espionage, it is said that “picketing is inherentlyexplosive”. As pointed out by one author, “The picket line is anexplosive front, charged with the emotions and fierce loyalties ofthe union-management dispute. It is marked by colorful name-calling, intimidating threats or sporadic fights between the picketsand those who pass the line.”

It has been held in a great number of decisions that espionage bythe employer of union activities, or surveillance thereof, are suchinstances of interference, restraint or coercion of employees inconnection with their right to organize, form and join unions as toconstitute unfair labor practice. Nothing is more calculated tointerfere with, restrain or coerce employees in the exercise of theirright to self-organization than such activity even where nodischarge results. The information obtained by means of espionageis invaluable to the employer and can be used in a variety of casesto break a union. The unfair labor practice is committed whetherespionage is carried on by a professional labor spy or detective, byofficials or supervisory employees of the employer, or by fellowemployees acting at the request or direction of the employer or anex-employee

Economic Coercion And Inducement


Indeed, when the respondents offered reinstatement andattempted to "bribe" the strikers with "comfortable cots," "freecoffee and occasional movies," "overtime" pay for "work performedin excess of eight hours," and "arrangements" for their families, sothey would abandon the strike and return to work, they were guiltyof strike-breaking and/or union-busting and, consequently, of unfairlabor practice.

It is equivalent to an attempt to break a strike for an employerto offer reinstatement to striking employees individually, when theyare represented by a union, since the employees thus offered



reinstatement are unable to determine what the consequences ofreturning to work would be.

Likewise violative of the right to organize, form and join labororganizations are the following acts:

the offer of a Christmas bonus to all "loyal" employees ofa company shortly after the making of a request by theunion to bargain; wage increases given for the purpose ofmollifying employees after the employer has refused tobargain with the union, or for the purpose of inducingstriking employees to return to work; the employer'spromises of benefits in return for the strikers'abandonment of their strike in support of their union;and the employer's statement, made about 6 weeks afterthe strike started, to a group of strikers in a restaurant tothe effect that if the strikers returned to work, theywould receive new benefits in the form of hospitalization,accident insurance, profit-sharing, and a new building towork in.

Union Solicitation And Distribution Of Literature And Materials

Republic Aviation Corp. v. NLRB 324 US 793 (1945)The Supreme Court held that it was permissible for the Board

to strike the balance in favor of employees challenging anemployer's no-solicitation policy. The Court affirmed the Board'sconclusion that employees have a presumptive right to wear unioninsignia, a right that cannot be abridged unless the employer is ableto establish that a special circumstance exists, which justifiesbanning such insignia.

Discrimination

Wise and Co. v. Wise and Co. Employees Union-NATU (1989)The grant of profit-sharing benefits to managers,

supervisors and all rank-and-file employees not covered by the CBAis not discriminatory but a valid exercise of managementprerogative.

Run-Away Shop

Complex Electronics Employees Association v. NLRC (1999)A RUNAWAY SHOP is defined as an industrial plant moved by

its owners from one location to another to escape union laborregulations or state laws, but the term is also used to describe aplant removed to a new location in order to discriminate againstemployees at the old plant because of their union activities. It isone wherein the employer moves its business to another location orit temporarily closes its business for anti-union purposes. A“runaway shop” in this sense, is a relocation motivated by anti-union animus rather than for business reasons.

8.03 UNFAIR LABOR PRACTICE; EMPLOYER AND LABORORGANIZATION ACTS VIOLATIVE OF RIGHT TO COLLECTIVEBARGAINING

1. VIOLATE DUTY TO BARGAIN

To employers

Art. 248 (f)To violate the duty to bargain collectively as prescribed

by this Code;

To labor organizations

Art. 249 (c)To violate the duty, or refuse to bargain collectively

with the employer, provided it is the representative of theemployees;

Art. 250Procedure in collective bargaining. The followingprocedures shall be observed in collective bargaining:a. When a party desires to negotiate an agreement, it

shall serve a written notice upon the other partywith a statement of its proposals. The other partyshall make a reply thereto not later than ten (10)calendar days from receipt of such notice;

b. Should differences arise on the basis of such noticeand reply, either party may request for a conferencewhich shall begin not later than ten (10) calendardays from the date of request.

c. If the dispute is not settled, the Board shall interveneupon request of either or both parties or at its owninitiative and immediately call the parties toconciliation meetings. The Board shall have thepower to issue subpoenas requiring the attendanceof the parties to such meetings. It shall be the dutyof the parties to participate fully and promptly in theconciliation meetings the Board may call;

d. During the conciliation proceedings in the Board, theparties are prohibited from doing any act which maydisrupt or impede the early settlement of thedisputes; and

e. The Board shall exert all efforts to settle disputesamicably and encourage the parties to submit theircase to a voluntary arbitrator.

Art. 251Duty to bargain collectively in the absence of collectivebargaining agreements.

In the absence of an agreement or other voluntaryarrangement providing for a more expeditiousmanner of collective bargaining, it shall be the dutyof employer and the representatives of theemployees to bargain collectively in accordance withthe provisions of this Code.

Art. 252Meaning of duty to bargain collectively.

The duty to bargain collectively means theperformance of a mutual obligationo to meet and convene promptly and

expeditiously in good faith for the purpose ofnegotiating an agreement with respect

o to wages, hours of work and all other termsand conditions of employment includingproposals for adjusting any grievances orquestions arising under such agreement andexecuting a contract incorporating suchagreements if requested by either party butsuch duty does not compel any party to agreeto a proposal or to make any concession.

Art. 253Duty to bargain collectively when there exists a collectivebargaining agreement.

When there is a collective bargaining agreement,o the duty to bargain collectively shall also mean

that neither party shall terminate nor modifysuch agreement during its lifetime.

o However, either party can serve a writtennotice to terminate or modify the agreementat least sixty (60) days prior to its expirationdate.

o It shall be the duty of both parties to keep thestatus quo and to continue in full force andeffect the terms and conditions of the existingagreement during the 60-day period and/oruntil a new agreement is reached by theparties.



General Milling Corp. v. Court of Appeals (2004)GMC’s failure to make a timely reply to the proposals

presented by the union is indicative of its utter lack of interest inbargaining with the union. Its excuse that it felt the union no longerrepresented the workers, was mainly dilatory as it turned out to beutterly baseless.

We hold that GMC’s refusal to make a counter-proposal to theunion’s proposal for CBA negotiation is an indication of its bad faith.Where the employer did not even bother to submit an answer tothe bargaining proposals of the union, there is a clear evasion of theduty to bargain collectively.

Failing to comply with the mandatory obligation to submit areply to the union’s proposals, GMC violated its duty to bargaincollectively, making it liable for unfair labor practice. Perforce, theCourt of Appeals did not commit grave abuse of discretionamounting to lack or excess of jurisdiction in finding that GMC is,under the circumstances, guilty of unfair labor practice.

Colegio de San Juan de Letran v. Association (2000)The school is guilty of unfair labor practice when it failed to make

a timely reply to the proposals of the union more than one monthafter the same were submitted by the union. In explaining its failureto reply, the school merely offered a feeble excuse that its Board ofTrustees had not yet convened to discuss the matter. Clearly, itsactuation showed a lack of sincere desire to negotiate.

2. NEGOTIATION OR ATTORNEY’S FEES

Art. 248 (f), LC

To pay negotiation or attorney’s fees to the union orits officers or agents as part of the settlement of anyissue in collective bargaining or any other dispute; or

3. VIOLATE COLLECTIVE BARGAINING AGREEMENT

Art. 248

To violate the duty to bargain collectively as prescribedby this Code;

Art. 249 (f), LC

To violate a collective bargaining agreement

Art. 261Jurisdiction of Voluntary Arbitrators or panel ofVoluntary Arbitrators.

x x x. Accordingly, violations of a CollectiveBargaining Agreement, except those which aregross in character, shall no longer be treated asunfair labor practice and shall be resolved asgrievances under the Collective BargainingAgreement.

For purposes of this article, gross violations ofCollective Bargaining Agreement shall meanflagrant and/or malicious refusal to comply with theeconomic provisions of such agreement. x x x

Singapore Airlines Employees Association v. NLRC (1984)An error in the interpretation of a provision of the CBA, absent

any malice or bad faith, is not an unfair labor practice. Honestdifferences in construction may arise in the actual application ofcontractual provisions.

PAL V. NLRC (1997)Violations of collective bargaining agreements were no longer

deemed unfair labor practices - except those gross in character i. e.flagrant and malicious refusal to comply with the economicprovisions thereof - and were considered mere grievancesresolvable through the appropriate grievance machinery, orvoluntary arbitration provided in the CBA.

8.04 EMPLOYER FUNCTIONS AND ULP

San Miguel Corp. Employees Union v. Bersamira (1990)A "labor dispute" as defined in Article 212 (1) of the Labor

Code includes "any controversy or matter concerning terms andconditions of employment or the association or representation ofpersons in negotiating, fixing, maintaining, changing, or arrangingthe terms and conditions of employment, regardless of whether thedisputants stand in the proximate relation of employer andemployee."

While it is SanMig's submission that no employer-employeerelationship exists between itself, on the one hand, and thecontractual workers of Lipercon and D'Rite on the other,

o a labor dispute can nevertheless exist "regardless ofwhether the disputants stand in the proximaterelationship of employer and employee" (Article 212 [1],Labor Code, supra) provided the controversy concerns,among others, the terms and conditions of employmentor a "change" or "arrangement" thereof (ibid).

o Put differently, and as defined by law, the existence of alabor dispute is not negatived by the fact that theplaintiffs and defendants do not stand in the proximaterelation of employer and employee.

That a labor dispute, as defined by the law, does exist herein isevident. At bottom, what the Union seeks is to regularize the statusof the employees contracted by Lipercon and D'Rite and, in effect,that they be absorbed into the working unit of SanMig. This matterdefinitely dwells on the working relationship between saidemployees vis-a-vis SanMig.

o Terms, tenure and conditions of their employment andthe arrangement of those terms are thus involvedbringing the matter within the purview of a labor dispute.

o Further, the Union also seeks to represent those workers,who have signed up for Union membership, for thepurpose of collective bargaining.

Obvious then is that representation and association, for thepurpose of negotiating the conditions of employment are alsoinvolved. In fact, the injunction sought by SanMig was precisely alsoto prevent such representation.

o Again, the matter of representation falls within the scopeof a labor dispute. Neither can it be denied that thecontroversy below is directly connected with the labordispute already taken cognizance of by the NCMB-DOLE(NCMB-NCR-NS-O1-021-89; NCMB NCR NS-01-093-83).

As the case is indisputably linked with a labor dispute,jurisdiction belongs to the labor tribunals. As explicitly provided forin Article 217 of the Labor Code, prior to its amendment by R.A. No.6715 on 21 March 1989, since the suit below was instituted on 6March 1989,

o Labor Arbiters have original and exclusive jurisdiction tohear and decide the following cases involving all workersincluding "

1. unfair labor practice cases;2. those that workers may file involving wages,hours of work and other terms and conditions ofemployment; and3. cases arising from any violation of Article 265 ofthis Code, including questions involving the legalityof striker and lockouts.

The claim of SanMig that the action below is for damagesunder Articles 19, 20 and 21 of the Civil Code would not suffice tokeep the case within the jurisdictional boundaries of regular Courts.

o That claim for damages is interwoven with a labordispute existing between the parties and would have tobe ventilated before the administrative machineryestablished for the expeditious settlement of thosedisputes.

o To allow the action filed below to prosper would bringabout "split jurisdiction" which is obnoxious to theorderly administration of justice

We recognize the proprietary right of SanMig to exercise aninherent management prerogative and its best business judgmentto determine whether it should contract out the performance ofsome of its work to independent contractors,



o However, the rights of all workers to self-organization,collective bargaining and negotiations, and peacefulconcerted activities, including the right to strike inaccordance with law (Section 3, Article XIII, 1987Constitution) equally call for recognition and protection.Those contending interests must be placed in properperspective and equilibrium.

Republic Savings Bank v. CIR (1967)It is for the Court of Industrial Relations, in the first instance,

to make the determination, "to weigh the employer's expressedmotive in determining the effect on the employees ofmanagement's otherwise equivocal act" (NLRB vs. Stowe SpinningCo., 336 U.S. 226).

For the Industrial Peace Act does not undertake the impossibletask of specifying in precise and unmistakable language eachincident which constitutes an unfair labor practice, rather, it leavesto the court the work of applying the Act's general prohibitorylanguage in the light of infinite combinations of events which maybe charged as violative of its terms

8.05 MOTIVE, CONDUCT AND PROOF

1. EMPLOYER MOTIVE AND PROOF

Visayan Bicycle Manuf. Co. v. National Labor Union (1965)The act of the employer in provoking the union officers into a

fight by two recently hired employees pursuant to a strategy of thecompany designed to provide an apparently lawful cause for theirdismissal, and said dismissed employees have not figured in similarincidents before or violated company rules in their several yearswith the company are deemed as an unfair labor practice.

Me-Shurn Corp. v. Me-Shurn Workers Union (2005)To justify the closure of a business and the termination of the

services of the concerned employees, the law requires that theemployer prove that it suffered substantial actual losses. Thecessation of the company’s operations shortly after theorganization of a labor union as well as the resumption of businessbarely a month after, gives credence to the employees’ claim thatthe closure was meant to discourage union membership and tointerfere in union activities. These acts constitute unfair laborpractices. The reason invoked by petitioners to justify the cessationof corporate operations was alleged business losses which they,however, failed to substantiate by any credible evidence.

St. John Colleges Inc. v. St. John Academy Faculty and EmployeesUnion (2006)

Under the circumstances, it is not difficult to discern that theclosure was done to defeat the parties’ agreement to refer thelabor dispute to the Secretary of Labor; to unilaterally end thebargaining deadlock; to render nugatory any decision of theSecretary of Labor; and to circumvent the Union’s right to collectivebargaining and its members’ right to security of tenure. Byadmitting that the closure was due to irreconcilable differencesbetween the Union and school management, specifically, thefinancial aspect of the ongoing CBA negotiations, SJCI in effectadmitted that it wanted to end the bargaining deadlock andeliminate the problem of dealing with the demands of the Union.This is precisely what the Labor Code abhors and punishes as unfairlabor practice since the net effect is to defeat the Union’s right tocollective bargaining.

2. TOTALITY OF CONDUCT RULE AND EFFECT OF FAILURE OF ACT

TOTALITY OF CONDUCT DOCTRINEIt means that expressions of opinion by an employer

though innocent in themselves, may be held to be constitutive ofunfair labor practice because of the circumstances under whichthey were uttered, the history of the particular employer’s laborrelations or anti-union bias or because of their connection with anestablished collateral plan of coercion or interference. [Insular LifeAssurance Co. Employees Ass’n. v. Insular Life (1971)]

Effect of Failure of the Act

Interference constituting unfair labor practice will not cease tobe such simply because it was susceptible of being thwarted orresisted, or that it did not proximately cause the result intended.

For success of purpose is not, and should not, be the criterionin determining whether or not a prohibited act constitutes unfairlabor practice.

"The test of whether an employer has interfered with andcoerced employees within the meaning of subsection (a) (1) is

o whether the employer has engaged in conduct which itmay reasonably be said tends to interfere with the freeexercise of employees' rights under section 3 of the Act,

o and it is not necessary that there be direct evidence thatany employee was in fact intimidated or coerced bystatements of threats of the employer if there is areasonable inference that anti-union conduct of theemployer does have an adverse effect on self-organization and collective bargaining." (Francisco, LaborLaws 1956, Vol. II, p. 323, citing NLRB v. Ford, C.A., 1948,170 F2d 735).

8.06 ENFORCEMENT, REMEDIES AND SANCTIONS

1. PARTIES AGAINST WHOM ULP COMMITTED

Art. 212, LC(e) "Employer" includes any person acting in the

interest of an employer, directly or indirectly. Theterm shall not include any labor organization or anyof its officers or agents except when acting asemployer.

(f) "Employee" includes any person in the employ ofan employer. The term shall not be limited to theemployees of a particular employer, unless theCode so explicitly states. It shall include anyindividual whose work has ceased as a result of orin connection with any current labor dispute orbecause of any unfair labor practice if he has notobtained any other substantially equivalent andregular employment.

(g) "Labor organization" means any union orassociation of employees which exists in whole or inpart for the purpose of collective bargaining or ofdealing with employers concerning terms andconditions of employment.

2. PARTIES LIABLE FOR ACTS

EMPLOYER

Art. 248The provisions of the preceding paragraph

notwithstanding, only the officers and agents ofcorporations, associations or partnerships who haveactually participated in, authorized or ratified unfairlabor practices shall be held criminally liable.

LABOR ORGANIZATION

Art. 249The provisions of the preceding paragraph

notwithstanding, only the officers, members ofgoverning boards, representatives or agents or membersof labor associations or organizations who have actuallyparticipated in, authorized or ratified unfair laborpractices shall be held criminally liable.

3. PROSECUTION AND PRESCRIPTIVE PERIOD

CIVIL ASPECT

Art. 247, LC



Concept of unfair labor practice and procedure forprosecution

x x x

Consequently, unfair labor practices are not onlyviolations of the civil rights of both labor andmanagement but are also criminal offenses againstthe State which shall be subject to prosecution andpunishment as herein provided.

Subject to the exercise by the President or by theSecretary of Labor and Employment of the powersvested in them by Articles 263 and 264 of this Code,

o the civil aspects of all cases involvingunfair labor practices, which mayinclude claims for actual, moral,exemplary and other forms ofdamages, attorney’s fees and otheraffirmative relief,

- shall be under the jurisdiction of theLabor Arbiters.

o The Labor Arbiters shall give utmostpriority to the hearing and resolutionof all cases involving unfair laborpractices.

- They shall resolve such cases withinthirty (30) calendar days from thetime they are submitted fordecision.

Recovery of civil liability in the administrativeproceedings shall bar recovery under the Civil Code.

CRIMINAL ASPECT

Art. 247Concept of unfair labor practice and procedure forprosecution

x x x

No criminal prosecution under this Title may beinstituted without a final judgment finding that anunfair labor practice was committed, having beenfirst obtained in the preceding paragraph.

o During the pendency of suchadministrative proceeding, the runningof the period of prescription of thecriminal offense herein penalized shallbe considered interrupted:

o Provided, however, that the finaljudgment in the administrativeproceedings shall not be binding in thecriminal case nor be considered asevidence of guilt but merely as proofof compliance of the requirementstherein set forth.

Gochangco Workers Union v. NLRC (1988)Before Batas Blg. 7029 was enacted into law, unfair labor

practices were considered administrative offenses, and have beenheld akin to tort, wherein damages are payable.

We therefore not only order herein the reinstatement of thepetitioner and the payment of backwages (including cost-of-livingallowances) to them, but impose as well moral and exemplarydamages.

With respect to backwages, we hold the respondent E.G.Gochangco, Inc. liable, in line with the recommendation of theSolicitor General and in accordance with accepted practice, forbackwages equivalent to 3 years without qualification or deduction.

4. COMPROMISE

Gochangco Workers Union v. NLRC (1988)Unfair labor practices are not subject to compromises in any

event in view of the public interest involved therein.

AFP Mutual Benefit Association Inc. v. FP MBAI-EU (1980)

In labor jurisprudence, it is well-established that quitclaimsand/or complete releases executed by the employees do not estopthem from pursuing their claims arising from the unfair laborpractice of the employer. The basic reason for this is that suchquitclaims and/or complete releases are against public policy and,therefore, null and void.

The acceptance of termination pay does not divest a laborer ofthe right to prosecute his employer for unfair labor practice acts.

Reformist Union of R.B. Liner, Inc. v. NLRC (1997)The agreement entered into by the company and the union,

was in the nature of a compromise agreement, i.e., "an agreementbetween two or more persons, who, for preventing or putting anend to a lawsuit, adjust their difficulties by mutual consent in themanner which they agree on, and which everyone of them prefersto the hope of gaining, balanced by the danger of losing."

Thus, in the agreement, each party made concessions in favorof the other to avoid a protracted litigation.

While we do not abandon the rule that "unfair labor practiceacts are beyond and outside the sphere of compromises," theagreement herein was voluntarily entered into and represents areasonable settlement, thus it binds the parties.

On this score, the Labor Code bestows finality to unvitiatedcompromise agreements. The private respondents' cause likewisefails in light of Article 2037 of the Civil Code, which givescompromise agreements "the effect and authority of res judicata"upon the parties to the same, even when effected without judicialapproval.

The Labor Arbiter and the NLRC therefore erroneouslyreviewed an issue which had already been laid to rest by the partiesthemselves and which, applying the principle of res judicata, theycould no longer relitigate.

DISINI: Did the Reformist case abandon the doctrine laid down bythe court in Gochanco and AFP Mutual Benefit Association? Notethat the Reformist case involved a compulsory arbitration.

Implication: One may argue that it is only applicable to a casewhere the issue on ULP was to be resolved in a compulsoryarbitration and the parties entered into a compromise agreement.

5. REMEDIES AND SANCTIONS

CIVIL REMEDIES

Art. 247Concept of unfair labor practice and procedure forprosecution

x x x

Recovery of civil liability in the administrativeproceedings shall bar recovery under the Civil Code.

x x

Nueva Ecija I. Electric Coop. Inc. v. NLRC (2000)Unfair labor practices violate the constitutional rights of

workers and employees to self-organization, are inimical to thelegitimate interests of both labor and management, including theirright to bargain collectively and otherwise deal with each other inan atmosphere of freedom and mutual respect; and disruptindustrial peace and hinder the promotion of healthy and stablelabor-management relations.

For this reason, we find it proper in this case to impose moraland exemplary damages on private respondent.

PENAL REMEDIES

Art. 247Concept of unfair labor practice and procedure for prosecution

x x x

Recovery of civil liability in the administrative proceedingsshall bar recovery under the Civil Code.

No criminal prosecution under this Title may be instituted without afinal judgment finding that an unfair labor practice was committed,having been first obtained in the preceding paragraph.



Part VIII

CONCERTED ACTIVITIES

9.01 BASIS OF RIGHT TO ENGAGE IN CONCERTED ACTIVITIES

3. CONSTITUTION

Art. XIII. Section 3 It shall 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.

PURPOSE AND MEANS TEST

Purpose: For purpose of enforcing right to:1. Self-Organization (Strikes against ULP) and2. Collective bargaining and negotiations

(economic strikes based on bargainingdeadlock)

4. Means: Peaceful and in accordance with law

Luzon Marine Dept. Union v. Roldan (1950)The law does not look with favor upon strikes and lockouts

because of their disturbing and pernicious effects upon the socialorder and the public interests; to prevent or avert them and toimplement section 6, Article XIV of the Constitution, the law hascreated several agencies, namely: the Bureau of Labor, theDepartment of Labor, the Labor-Management Advisory Board, andthe Court of Industrial Relations.

Paragraphs (c) and (f) of Article 263 mandate the followingprocedural steps to be followed before a strike may be staged:

1. filing of notice of strike,2. taking of strike vote, and3. reporting of the strike vote result to the Department ofLabor and Employment.

these requirements are mandatory, meaning, non-compliancetherewith makes the strike illegal. The evident intention of thelaw in requiring the strike notice and strike-vote report is toreasonably regulate the right to strike, which is essential to theattainment of legitimate policy objectives embodied in thelaw.

(Stamford Marketing Corp v. Julian, 2004)

4. STATUTORY

Art. 263

Strikes, picketing and lockouts.

(b) Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual

benefit and protection. The right of legitimate labor organizations to strike and picket

and of employers to lockout, consistent with the national interest, shall continue to be

recognized and respected. However, no labor union may strike and no employer may

declare a lockout on grounds involving inter-union and intra-union

disputes. The Constitution and the law set limitation for the exercise of

the right to strike or lock-out. It is the most regulated activity.

Constitution In accordance with law

Labor Code Consistent with National Interest

5. INTERNATIONAL COVENANT ON ECONOMIC, SOCIAL ANDCULTURAL RIGHTS

Article 81. The States Parties to the present Covenant undertake toensure:

(d) The right to strike, provided that it is exercised inconformity with the laws of the particular country.

6. LIMITATIONS

A strike be declared only after the most thoughtfulconsultation, conducted in the only way allowed, that is,peacefully, and in every case conformably to reasonableregulation.

Any violation of the legal requirements and strictures, such asa defiance to a return-to-work order in industries affected withpublic interest, will render the strike illegal to the detriment ofthe very workers it is supposed to protect.(BLT Bus Company v. NLRC, 1992)

9.02 STRIKE ACTIVITY

9. DEFINITION

Art. 212(o)"Strike" means any temporary stoppage of work by theconcerted action of employees as a result of an industrial orlabor dispute.

Strike - any temporary stoppage of work by the concerted action ofemployees as a result of an industrial or labor dispute.

Labor dispute - any controversy or matter concerning terms orconditions of employment or the association or representation ofpersons in negotiating, fixing, maintaining, changing or arrangingthe terms and conditions of employment, regardless of whether thedisputants stand in the proximate relation of employer andemployee. (Bukluran ng Manggagawa sa Clothman KnittingCorporation-Solidarity Unions in the Phil v. CA, 2005)

The term “strike” shall comprise not only concerted workstoppages, but also slowdowns, mass leaves, sitdowns,attempts to damage, destroy or sabotage plant equipment andfacilities, and similar activities.(Samahang Manggagawa v. Sulpicio Lines, 2004)

Basic Concepts:

1. Initiating Party:Employer: LockoutUnion: Strike

2. Cause: Labor dispute An inter-union and intra-union dispute cannot be a valid

ground for a strike or lock-out since a labor dispute istechnically defined under Art. 212.

Welga ng Bayan (Political Strike) is not a valid strike under theLabor Code since no labor dispute is involved. A welga ngbayan for purpose of lowering oil price is not a valid strikeunder the Labor Code but it may be upheld as a valid exerciseof right of speech. However, the employee may suffer theconsequence of abandonment of work

Wage distortion are not also a valid ground for a strike sincethe law provides for a procedure to settle wage distortionproblems (see Ilaw at Buklod case)

3. Temporary in Nature3. Employee-Employer relationship continues to exist. Mere

participation in a strike is not a ground for termination

10. NATURE AND PURPOSE

A strike is a coercive measure resorted to by laborers to enforcetheir demands. The idea behind a strike is that a company engagedin a profitable business cannot afford to have its production oractivities interrupted, much less, paralyzed.(Phil. Can Co. v. CIR, 1950)

11. EFFECT ON WORK RELATIONSHIP

Although during a strike the worker renders no work or service andreceives no compensation, yet his relationship as an employee withhis employer is not severed or dissolved. (Elizalde Rope Factory,Inc. v. SSS, 1972)



12. TYPES, CHANGES AND CONVERSION

TYPES

Unfair Labor Practice

Art. 263


(c) In case of bargaining deadlocks, the duly certified or recognizedbargaining agent may file a notice of strike or the employer may filea notice of lockout with the Ministry at least 30 day before theintended date thereof.

In cases of unfair labor practice, the period of noticeshall be 15 days and in the absence of a duly certifiedor recognized bargaining agent, the notice of strikemay be filed by any legitimate labor organization inbehalf of its members.

f. However, in case of dismissal from employment ofunion officers duly elected in accordance with theunion constitution and by-laws, which may constituteunion busting, where the existence of the union isthreatened, the 15-day cooling-off period shall notapply and the union may take action immediately.

Bargaining Deadlock – Economic

Consolidated Labor Assoc. of the Phil. V. Marsman and Co. (1984)economic strike - one which is to forge wage or other concessionsfrom the employer which he is not required by law to grant.

CHANGE IN TYPE

it is possible to change an economic strike into a ULPstrike

Consolidated Labor Assoc. of the Phil. V. Marsman and Co. (1984)

Initially the strike staged by the Union was meant to compelthe Company to grant it certain economic benefits set forth in itsproposal for collective bargaining. The strike was an economic one,and the striking employees would have a right to be reinstated if, inthe interim, the employer had not hired other permanent workersto replace them.

For it is recognized that during the pendency of an economicstrike an employer may take steps to continue and protect hisbusiness by supplying places left vacant by the strikers, and is notbound to discharge those hired for that purpose upon election ofthe strikers to resume their employment.

But the strike changed its character from the time theCompany refused to reinstate complainants because of their unionactivities after it had offered to admit all the strikers and in fact didreadmit the others. It was then converted into an unfair laborpractice strike.

The Union began the strike because it believed in good faiththat settlement of their demands was at an impasse and thatfurther negotiations would only come to naught. It stopped thestrike upon the belief they could go back to work.

3. Then it renewed the strike (or it started a new strike)as a protest against the discrimination practiced by theCompany.

4. Both are valid grounds for going on a strike.

NON-CONVERSION – STRIKE TO LOCKOUT

A strike CANNOT be converted into a pure and simple lockout bythe mere expedient of filing before the trial court a notice of offerto return to work during the pendency of the labor dispute betweenthe union and the employer.(Rizal Cement Workers Union v. CIR, 1962)

13. GROUNDS

Valid grounds for strike:1) Bargaining Deadlock (BD) (Art. 263)2) ULP (Art. 263)

ALLOWABLE STRIKES

Art. 263



3. In cases of unfair labor practice, the period of notice shallbe 15 days and in the absence of a duly certified orrecognized bargaining agent, the notice of strike may befiled by any legitimate labor organization in behalf of itsmembers.

4. However, in case of dismissal from employment of unionofficers duly elected in accordance with the unionconstitution and by-laws, which may constitute unionbusting, where the existence of the union is threatened,the 15-day cooling-off period shall not apply and theunion may take action immediately.

PROHIBITED STRIKES

Art. 263 (g)When, in his opinion, there exists a labor dispute causing or likely tocause a strike or lockout in an industry indispensable to the nationalinterest, the Secretary of Labor and Employment may assumejurisdiction over the dispute and decide it or certify the same to theCommission for compulsory arbitration.

Effect of Assumption Order pursuant to Art. 263 (g):1) Strike/Lockout automatically enjoined2) Striking/Locked Out employees shall immediately return to work3) Employer shall resume operations and readmit all workers

In line with the national concern for and the highest respectaccorded to the right of patients to life and health, strikes andlockouts in hospitals, clinics and similar medical institutions shall,to every extent possible, be avoided, and all serious efforts, notonly by labor and management but government as well, beexhausted to substantially minimize, if not prevent, their adverseeffects on such life and health, through the exercise, howeverlegitimate, by labor of its right to strike and by management tolockout.

In labor disputes adversely affecting the continuedoperation of such hospitals, clinics or medical institutions,it shall be the duty of the striking union or locking-outemployer to provide and maintain an effective skeletalworkforce of medical and other health personnel, whosemovement and services shall be unhampered andunrestricted, as are necessary to insure the proper andadequate protection of the life and health of its patients,most especially emergency cases, for the duration of thestrike or lockout.

In such cases, therefore, the Secretary of Labor andEmployment may immediately assume, within twentyfour (24) hours from knowledge of the occurrence ofsuch a strike or lockout, jurisdiction over the same orcertify it to the Commission for compulsory arbitration.

For this purpose, the contending parties are strictlyenjoined to comply with such orders, prohibitions and/orinjunctions as are issued by the Secretary of Labor andEmployment or the Commission, under pain ofimmediate disciplinary action, including dismissal or lossof employment status or payment by the locking-outemployer of backwages, damages and other affirmativerelief, even criminal prosecution against either or both ofthem.

The foregoing notwithstanding, the President of the Philippinesshall not be precluded from determining the industries that, in hisopinion, are indispensable to the national interest, and fromintervening at any time and assuming jurisdiction over any suchlabor dispute in order to settle or terminate the same.



No strike or lockout shall be declared after assumption ofjurisdiction by the President or the Minister or after certification orsubmission of the dispute to compulsory or voluntary arbitration orduring the pendency of cases involving the same grounds for thestrike or lockout. (Art. 264)

WAGE DISTORTION cannot be a ground for strike.A SLOWDOWN or a “strike on an installment plan” is prohibited.

It is a willful reduction in the rate of work by theconcerted action of the employees for the purpose of restricting theoutput of the employer, in relation to a labor dispute. It is anactivity by which workers, without a complete stoppage of work,retard production or their performance of duties and functions tocompel management to grant their demands.

Such act is inherently illicit and unjustifiable becausewhile the employees continue to work, they, at the same time,select what part of their duties they perform. In essence, they workon their own terms. (Ilaw at Buklod ng Manggagawa (IBM) v.NLRC, 1991)

A strike that is undertaken, despite the issuance by the SOLE ofan assumption or certification order, becomes a prohibitedactivity and, thus, illegal pursuant to Article 264 of the LaborCode of the Philippines, as amended. As this Court ruled inUnion of Filipro Employees v. Nestle Philippines, Inc., underArticle 264(a) of the said code, once an assumptioncertification order is issued by the SOLE, strikes are enjoined orif one has already taken place, all strikers shall immediatelyreturn to work. (GRAND BOULEVARD HOTEL V. GRAND LABOR

ORGANIZATION, 2003)

NO STRIKE CLAUSE

applicable only to economic strikes, not ULP strikes

A "no strike, no lock-out" provision in the Collective BargainingAgreement ("CBA") is a valid stipulation although the clause may beinvoked by an employer only when the strike is economic in natureor one which is conducted to force wage or other concessions fromthe employer that are not mandated to be granted by the law itself.It would be inapplicable to prevent a strike which is grounded onunfair labor practice.(Panay Electric Co. v. NLRC, 1995; Malayang Samahan ng mgaManggagawa sa Greenfield v. Ramos, 2000)

14. STRIKING PARTY

Who may file (IRR, Book V, Rule XXII, Sec. 6):1) If based on ULP, any Legitimate Labor Organization (in theabsence of SEBA)2) If based on BD, SEBA

Where to file (IRR, Book V, Rule XXII, Sec. 1):

National Conciliation and Mediation Board (NCMB)

Art. 263. Strikes, picketing and lockouts.

(b) Workers shall have the right to engage in concerted activities forpurposes of collective bargaining or for their mutual benefit andprotection.

c. The right of legitimate labor organizations to strike andpicket and of employers to lockout, consistent with thenational interest, shall continue to be recognized andrespected.

d. However, no labor union may strike and no employermay declare a lockout on grounds involving inter-unionand intra-union disputes.


3. In cases of unfair labor practice, the period of notice shallbe 15 days and in the absence of a duly certified orrecognized bargaining agent, the notice of strike may befiled by any legitimate labor organization in behalf of itsmembers.

a. However, in case of dismissal from employment of unionofficers duly elected in accordance with the unionconstitution and by-laws, which may constitute unionbusting, where the existence of the union is threatened,the 15-day cooling-off period shall not apply and theunion may take action immediately.

15. PROCEDURAL REQUIREMENTS

Requisites of a valid strike/lockout:1) Good faith bargaining has been conducted in accordance withArt. 250 (Art. 264, a)2) The following procedural requisites are met: (Art. 263; c, f)

a. Notice of Strike/Lockout – 0 (Union Busting) or 15 (ULP) or 30(BD) days cooling-off period; filed with DOLEb. Strike/Lockout Vote – approved by a majority of unionmembers/board of directors or partners through secret ballot in ameeting called for the purposec. Notice of Result of Strike/Lockout Vote – filed with DOLE at least7 days before the intended date of strike

3) Must be based on valid grounds4) The strike or lockout must be pursued within the bounds of thelaw (Art. 264)

Also, take note of the following:5) Statutory prohibition as to striking workers (i.e. Governmentemployees can organize but cannot strike)6) If an injunction is subsequently ordered, strike/lockout mustcease7) No-Strike Clause in CBA – affects only economic strikes, notstrikes based on ULP

Duty of DOLE during cooling-off period: to exert all efforts atmediation and conciliation to effect a voluntary settlement. Shouldthe dispute remain unsettled until the lapse of the requisite numberof days from the mandatory filing of the notice, the labor union maystrike or the employer may declare a lockout.

Piñero v. NLRC (2004)Under Art. 263, the requisites for a valid strike are as follows:3. a notice of strike filed with the DOLE thirty days before

the intended date thereof or fifteen days in case of unfairlabor practice

4. strike vote approved by a majority of the total unionmembership in the bargaining unit concerned obtainedby secret ballot in a meeting called for that purpose;

5. notice given to the DOLE of the results of the voting atleast seven days before the intended strike.

These requirements are mandatory and failure of a unionto comply therewith renders the strike illegal.

Capitol Medical Center, Inc. v. NLRC (2005)

Aside from the mandatory notices embedded in Article 263,paragraphs (c) and (f) of the Labor Code, a union intending to stagea strike is mandated to notify the NCMB of the meeting for theconduct of strike vote, at least twenty-four (24) hours prior to suchmeeting. Unless the NCMB is notified of the date, place and time ofthe meeting of the union members for the conduct of a strike vote,the NCMB would be unable to supervise the holding of the same, ifand when it decides to exercise its power of supervision.

The requirement of giving notice of the conduct of a strikevote to the NCMB at least 24 hours before the meeting for the saidpurpose is designed to (a) inform the NCMB of the intent of theunion to conduct a strike vote; (b) give the NCMB ample time todecide on whether or not there is a need to supervise the conductof the strike vote to prevent any acts of violence and/orirregularities attendant thereto; and (c) should the NCMB decide onits own initiative or upon the request of an interested partyincluding the employer, to supervise the strike vote, to give it ampletime to prepare for the deployment of the requisite personnel,including peace officers if need be.



Requirements are mandatory, meaning, non-compliancetherewith makes the strike illegal. The evident intention of thelaw in requiring the strike notice and strike-vote report is toreasonably regulate the right to strike, which is essential to theattainment of legitimate policy objectives embodied in thelaw.(Bukluran ng Manggagawa sa Clothman Knitting Corporation-Solidarity Unions in the Phil. For Employment and Reforms v.CA, 2005)

16. TEST OF LEGALITY

LEGAL STRIKES

Purpose and Means Test

Luzon Marine Dept Union v. Roldan (1950)In the case of Rex Taxicab Company vs. Court of Industrial

Relations (70 Phil., 621), wherein this Supreme Court held that "theemployee, tenant or laborer is inhibited from striking or walking outof his employment only when so enjoined by the Court of IndustrialRelations,"

c. it was also held that "in cases not falling within theprohibition, the legality or illegality of a strike depends,first, upon the purpose for which it is maintained, and,second, upon the means employed in carrying it on."

d. Thus, if the purpose which the laborers intend toaccomplish by means of a strike is trivial, unreasonable orunjust, or if in carrying on the strike the strikers shouldcommit violence or cause injuries to persons or damageto property the strike, although not prohibited by injunction,

may be declared by the court illegal, with theadverse consequences to the strikers.

Caltex Phil. Inc. v. Phil Labor Org. Caltex Chapter (1953)Our constitutional government assures the ER against deprivationof their property except in accordance with the statutes orsupplementary equitable principles.

Philippine Marine Officers Guild v. Cia. Maritima (1968)Acts of violence in this jurisdiction, when committed in

carrying on a strike are not to be overlooked in determining itslegality or illegality.

To overlook these acts of violence would encourageabuses and terrorism and subvert the purpose of the lawwhich provides for arbitration and peaceful settlement ofdisputes.

If a strike is unjustified as when it is declared for trivial,unjust or unreasonable purpose, the employer may notbe compelled to reinstate the strikers to theiremployment. More so, when the strike is carried onillegally.

San Miguel Corp. v. NLRC (2003)Pursuant to Article 218 (e), the coercive measure of injunction

may be used to restrain an actual or threatened unlawful strike. Inthe case at bar, petitioner sought a permanent injunction to enjointhe respondent’s strike. A strike is considered as the most effectiveweapon in protecting the rights of the employees to improve theterms and conditions of their employment. However, to be valid, astrike must be pursued within legal bounds.

One of the procedural requisites that Article 263 of the LaborCode and its Implementing Rules prescribe is the filing of a validnotice of strike with the NCMB. Imposed for the purpose ofencouraging the voluntary settlement of disputes, this requirementhas been held to be mandatory, the lack of which shall render astrike illegal.

Clearly, therefore, applying the aforecited ruling to the case atbar, when the NCMB ordered the preventive mediation on May 2,1994, respondent had thereupon lost the notices of strike it hadfiled. Subsequently, however, it still defiantly proceeded with thestrike while mediation was ongoing, and notwithstanding the letter-advisories of NCMB warning it of its lack of notice of strike.

Such disregard of the mediation proceedings was a blatantviolation of the Implementing Rules, which explicitly oblige the

parties to bargain collectively in good faith and prohibit them fromimpeding or disrupting the proceedings.

Moreover, it bears stressing that Article 264(a) of the LaborCode explicitly states that a declaration of strike without first havingfiled the required notice is a prohibited activity, which may beprevented through an injunction in accordance with Article 254.Clearly, public respondent should have granted the injunctive reliefto prevent the grave damage brought about by the unlawful strike.

Malayang Samahan ng mga Manggagawa sa Greenfield v. Ramos(2000)

Petitioners believed in good faith that in dismissing them uponrequest by the federation, respondent company was guilty of unfairlabor pratice in that it violated the petitioner’s right to self-organization. The strike was staged to protest respondentcompany’s act of dismissing the union officers.

Even if the allegations of unfair labor practice aresubsequently found out to be untrue, the presumption oflegality of the strike prevails.

Guidelines and Balancing of Interest

Shell Oil Workers Union v. Shell Co. of the Phils (1971)A strike otherwise valid, if violent in character, maybe placed

beyond the pale. Care is to be taken, however, especially where anunfair labor practice is involved, to avoid stamping it with illegalityjust because it is tainted by such acts. To avoid rendering illusorythe recognition of the right to strike, responsibility in such a caseshould be individual and not collective. A different conclusionwould be called for, of course, if the existence of force while thestrike lasts is pervasive and widespread, consistently anddeliberately resorted to as a matter of policy. It could be reasonablyconcluded then that even if justified as to ends, it becomes illegalbecause of the means employed'.

This is not by any means to condone the utilization of force bylabor to attain its objectives. It is only to show awareness that inlabor conflicts, the tension that fills the air as well as the feeling offrustration and bitterness could break out in sporadic acts ofviolence.

If there be in this case a weighing of interests in the balance,the ban the law imposes on unfair labor practices by managementthat could provoke a strike and its requirement that it be conductedpeaceably, it would be, to repeat, unjustified, considering all thefacts disclosed, to stamp the strike with illegality. It is enough thatindividual liability be incurred by those guilty of such acts of violencethat call for loss of employee status. Such an approach is reflected inour recent decisions.

DEFENSES – GOOD FAITH - ULP

Gen. Rule: A strike based on non-strikeable grounds is illegalException: Employees believe in good faith that ULP acts exist so asto constitute a valid ground to strike(Interwood Employees Assoc v. Int’l Hardwood, 1956)

Interwood Employees Assoc. v. Int’l Hardwood (1956)An established caveat, however, is that a mere claim of good

faith would not justify the holding of a strike under the aforesaidexception as, in addition thereto, the circumstances must havewarranted such belief. It is, therefore, not enough that the unionbelieved that the employer committed acts of ULP when thecircumstances clearly negate even a prima facie showing to sustainsuch belief.

PNOC Dockyard v. NLRC (1998)Although rejecting that PNOC and its subsidiaries were guilty

of discrimination, the NLRC reiterated the policy enunciated inseveral labor cases "that a strike does not automatically carry thestigma of illegality even if no unfair labor practice were committedby the employer. It suffices if such a belief in good faith isentertained by labor as the inducing factor for staging a strike."

Indeed, the presumption of legality prevails even if theallegation of unfair labor practice is subsequently foundto be untrue, provided that the union and its membersbelieved in good faith in the truth of such averment.



ILLEGAL STRIKES

Basis – Illegality

In essence (based on Arts. 263-264), a strike is illegal if:1) No good faith bargaining has been conducted yet2) The strike is not based on valid grounds3) Procedural requirements are not met4) Any of the prohibited acts stated in Art. 264 is done

Phil. Diamond Hotel and Resort, Inc. v. Manila Diamond HotelEmployees Union (2006)

Even if the purpose of a strike is valid, the strike may still beheld illegal where the means employed are illegal.

In this case, the union was never the sole and exclusivebargaining agent (SEBA) of the bargaining unit. Its move to bargaincollectively “for its members” only tends to fragment the workers’interest. Likewise, The union still went on strike on Nov. 29, 1997despite the fact that in a couple of days, on Dec. 1, 1997, there wasa scheduled conciliatory meeting between the parties.

Effect of Illegality

Effect of Illegal Strike (Art. 264):1) To Union Officer – loss of employment2) To Union Member – None (loss of employment ONLY IF illegalacts are committed during such strike)

Effect of Illegal Lockout (Art. 264):1) To Dismissed Employees – reinstatement with full backwages

San Juan de Dios etc. v. San Juan de Dios (2004)Despite the receipt of an order from then SOLE to return to

their respective jobs, the Union officers and members refused to doso and defied the same. Consequently, then, the strike staged bythe Union is a prohibited activity under Article 264 of the LaborCode. Hence, the dismissal of its officers is in order. The respondentFoundation was, thus, justified in terminating the employment ofthe petitioner Union’s officers.

Stamford Marketing Corp. v. Julian (2004)Article 264 of the Labor Code, in providing for the

consequences of an illegal strike, makes a distinction betweenunion officers and members who participated thereon. Thus,knowingly participating in an illegal strike is a valid ground fortermination from employment of a union officer. The law, however,treats differently mere union members. Mere participation in anillegal strike is not a sufficient ground for termination of the servicesof the union members. The Labor Code protects an ordinary, rank-and-file union member who participated in such a strike from losinghis job, provided that he did not commit an illegal act during thestrike. Thus, absent any clear, substantial and convincing proof ofillegal acts committed during an illegal strike, an ordinary strikingworker or employee may not be terminated from work.

With respect to union officers, however, there is no disputethey could be dismissed for participating in an illegal strike. Unionofficers are duty- bound to guide their members to respect the law.Nonetheless, as in other termination cases, union officers must begiven the required notices for terminating an employment, i.e.,notice of hearing to enable them to present their side, and notice oftermination, should their explanation prove unsatisfactory. Nothingin Article 264 of the Labor Code authorizes an immediate dismissalof a union officer for participating in an illegal strike. The act ofdismissal is not intended to happen ipso facto but rather as anoption that can be exercised by the employer and after compliancewith the notice requirements for terminating an employee. In thiscase, petitioners did not give the required notices to the unionofficers.

Employment of Strike Breakers

Art. 264 (c)No employer shall use or employ any strike-breaker, nor shall anyperson be employed as a strike-breaker.

Art. 212(r)"Strike-breaker" means any person who obstructs, impedes, orinterferes with by force, violence, coercion, threats, or intimidationany peaceful picketing affecting wages, hours or conditions of workor in the exercise of the right of self-organization or collectivebargaining.

Run-Away Shop one wherein the employer moves its business to

another location or it temporarily closes its business for anti-unionpurposes

Complex Electronics Employees Assoc v. NLRC (1999)The Union anchors its position on the fact that Lawrence Qua

is both the president of Complex and Ionics and that bothcompanies have the same set of Board of Directors. It claims thatbusiness has not ceased at Complex but was merely transferred toIonics, a runaway shop.

Held: The Union's contentions are untenable.A “runaway shop” is defined as one wherein the employer

moves its business to another location or it temporarily closes itsbusiness for anti-union purposes. A “runaway shop” in this sense, isa relocation motivated by anti-union animus rather than forbusiness reasons.

In this case, however, Ionics was not set up merely for thepurpose of transferring the business of Complex. At the time thelabor dispute arose at Complex, Ionics was already existing as anindependent company.

The mere fact that one or more corporations are owned orcontrolled by the same or single stockholder is not a sufficientground for disregarding separate corporate personalities.

Ionics may be engaged in the same business as that ofComplex, but this fact alone is not enough reason to pierce the veilof corporate fiction of the corporation.

As very clearly established, the closure was triggered by thecustomers' pull-out of their equipment, machinery and materials,who were alarmed by the pending labor dispute and the imminentstrike by the union, and as a protection to their interest pulled-outof business from Complex who had no recourse but to ceaseoperation to prevent further losses.

Burden of Economic Loss

Crownwell Commercial Employees & Laborer’s Union v. CIR (1964)

At the outset, two types of employees involved in this casemust be distinguished, namely, those who were discriminatorilydismissed for union activities and those who voluntarily went onstrike.

Gen. Rule: Striking employees are entitled to reinstatementwhether or not the strike was the consequence of the employer'sunfair labor practiceException: Employees may be denied reinstatement because of (1)unlawful conduct or (2) because of violence

Note: Refer to Philippine Diamond Case (2006)

Consolidated Labor Assoc. v. Marsman & Co. (1964)We now come to the question of backpay. In an economic

strike, the strikers are not entitled to backpay, since the employershould get the equivalent day's work for what he pays hisemployees. During the time that the strike was an economic one,complainants had no right to back pay. The Industrial Court couldnot have made a finding of unfair labor practice with respect tosuch time, as none had so far been committed. This being an unfairlabor practice case, it cannot, therefore, order reinstatement muchless back pay for that period.

On the other hand, even after the court has made a finding ofunfair labor practice, it still has the discretion to determine whetheror not to grant back pay. Such discretion was not abused when itdenied back wages to complainants, considering the climate ofviolence which attended the strike and picket that the complainantsconducted. While the complainants ordered reinstated did notactively take part in the acts of violence, their minatory attitudetowards the Company may be gathered from the fact that from thevery first day of the strike policemen had to patrol the strike zone inorder to preserve peace.



SSS v. SSS Supervisors’ Union (1982)We find for the petitioner based on the equitable tenet of a

"fair day's wage for a fair day's labor.""The age-old rule governing the relation between labor and

capital or management and employee is that of a 'fair day's age fora fair day's labor.' If there is no work performed by the employeethere can be no wage or pay, unless of course the laborer was able,willing and ready to work but "as illegally locked out, dismissed orsuspended. It is hardly fair or just for an employee or laborer tofight or litigate against his employer on the employer's time."

Phil. Diamond Hotel and Resort, Inc. v. Manila Diamond HotelEmployees Union (2006)

In Cromwell Commercial Employees and Laborers Union (PTUC)v. Court of Industrial Relations, this Court made a distinctionbetween two types of employees involved in a ULP: those who arediscriminatorily dismissed for union activities, and those whovoluntarily go on strike even if it is in protest of an ULP.Discriminatorily dismissed employees were ordered entitled tobackpay from the date of the act of discrimination, that is, from theday of their discharge, whereas employees who struck as avoluntary act of protest against what they considered a ULP of theiremployer were held generally not entitled to backpay.

Jurisprudential law, however, recognizes several exceptions tothe "no backwages rule," to wit:- when the employees were illegally locked to thus compel them tostage a strike;- when the employer is guilty of the grossest form of ULP;- when the employer committed discrimination in the rehiring of

strikers refusing to readmit those against whom there werepending criminal cases while admitting nonstrikers who were alsocriminally charged in court; or

- when the workers who staged a voluntary ULP strike offered toreturn to work unconditionally but the employer refused toreinstate them.

Improved Offer Balloting and Strikes

Art. 265

Improved offer balloting.

In an effort to settle a strike, the Department of Labor andEmployment shall conduct a referendum by secret ballot on theimproved offer of the employer on or before the 30th day of thestrike.

3. When at least a majority of the union members vote toaccept the improved offer the striking workers shallimmediately return to work and the employer shallthereupon readmit them upon the signing of theagreement.

In case of a lockout, the Department of Labor and Employment shallalso conduct a referendum by secret balloting on the reduced offerof the union on or before the 30th day of the lockout.

4. When at least a majority of the board of directors ortrustees or the partners holding the controlling interest inthe case of a partnership vote to accept the reducedoffer, the workers shall immediately return to work andthe employer shall thereupon readmit them upon thesigning of the agreement

9.03 PICKETING

Definition:PICKETING – consists in walking or patrolling the vicinity of a placeof business involved in a labor dispute to inform the public aboutthe dispute.

Requisites of a valid picket:1) Aim is to inform public about the labor dispute2) Must be conducted peacefully

- NOT carried on with intimidation, threats, coercion,force

- NOT accompanied with vandalism- NO obstruction of ingress/egress in place of business

NATURE AND PURPOSE OF PICKET LINE

Security Bank Employees Union v. Security Bank and Trust Co.(1968)

This is not to say that picketing, like freedom of expression ingeneral, has no limits. Certainly, to the extent that it is aninstrument of coercion rather than of persuasion, it cannotrightfully be entitled to the protection associated with free speech.Equally so, there can be no indiscriminate ban on the freedom todisseminate the facts of a labor dispute and to appeal for publicsympathy, which is the aim of peaceful picketing, without atransgression of the Constitution, sufficient to oust a court ofjurisdiction, even on the assumption that it was originally possessedof such a competence, which was not so in this case as had beenearlier made clear.

PAFLU V. Cloribel (1969)The right to picket as a means of communicating the facts of a

labor dispute is a phase of the freedom of speech guaranteed bythe constitution. If peacefully carried out, it can not be curtailedeven in the absence of employer-employee relationship.

The right is, however, not an absolute one. While peacefulpicketing is entitled to protection as an exercise of free speech, webelieve that courts are not without power to confine or localize thesphere of communication or the demonstration to the parties tothe labor dispute, including those with related interest, and toinsulate establishments or persons with no industrial connection orhaving interest totally foreign to the context of the dispute.

Thus the right may be regulated at the instance of third partiesor "innocent bystanders" if it appears that the inevitable result of itsexercise is to create an impression that a labor dispute with whichthey have no connection or interest exists between them and thepicketing union or constitute an invasion of their rights.

PICKETING AND LIBEL LAWS

PCIB V. Philnabank Employees (1981)There is a unique aspect to this action for libel against the

Philippine National Bank Employees' Association. It was filed byplaintiff PCIB as a result of placards and signboards along the PNBbuilding in Escolta, Manila, containing the following: "PCIB BADACCOUNTS TRANSFERRED TO PNB-NIDC?"

There was a labor controversy resulting in a strike, fortunatelylasting only for one day. The labor union made use of itsconstitutional right to picket.

From the time of Mortera vs. CIR, a 1947 decision this Courthas been committed to the view that' peaceful picketing is part ofthe freedom of speech guarantee of the Constitution. The latestcase in point where such a principle was reaffirmed expressly isAssociated Labor Union v. Gomez, a 1980 decision.

There is no mention of the other placards but it is not unlikelythat to bolster its claim, mention was likewise made and in boldletters at that of such alleged failing of its management. That wasthe aim and intent as found by the lower court. That could not verywell be disputed by plaintiff-appellant. Unfortunately, the offendingimputation, but in the form of a question, was included. It was dueto a former official of plaintiff appellant's bank who was thereafternamed as President of the Philippine National Bank. Should therebe an automatic attitude of condemnation for such incident?

If the realistic observation of Justice Frankfurter in Milk WagonDrivers Union of Chicago v. Meadowmoor Dairies be heeded thatlabor disputes give rise to strong emotional response, then thedecision reached by the lower court becomes even moreacceptable.

5. It is a fact of industrial life, both in the Philippines as inthe United States, that in the continuing confrontationbetween labor and management, it is far from likely thatthe language employed would be both courteous andpolite. Such being the case, there is no affront either toreason or to the law in the complaint for libel beingdismissed. In placing reliance on the constitutional rightof freedom of expression, this Court once again makesmanifest its adherence to the principle first announcedby Justice Malcolm as ponente in the leading case ofUnited States v. Bustos.

6. In no uncertain terms, it made clear that the judiciary, indeciding suits for libel, must ascertain whether or not the



alleged offending words may be embraced by theguarantees of free speech and free press. It cannot betoo often said that Bustos was promulgated as far back asMarch 8, 1918. A doctrine analogous in character.

EMPLOYER-EMPLOYEE RELATIONSHIP

De Leon v. National Labor Union (1957)PICKETING; ABSENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP

DOES NOT MAKE PICKETING ILLEGAL.-Picketing peacefully carriedout is not illegal even in the absence of employer-employeerelationship, for peaceful picketing is a part of the freedom ofspeech guaranteed by the Constitution.

CURTAILMENT

Free Telephone Workers Union v. PLDT Co. (1982)Indeed, it is now well-settled that peaceful picketing cannot be

restrained because the same is part of the freedom of speech butpetitioner fails to realize that the questioned July 16, 1965 order ofthe Court of Industrial Relations did not refer to peaceful picketing.

In Mortera, supra, where the therein questioned order partlydeclared that ". . . picketing under any guise and form is herebyprohibited . . .," this Court ruled that the "order of the Court ofIndustrial Relations prohibiting picketing must be understood torefer only to illegal picketing, that is, picketing through the use ofillegal means.

In this case, the questioned (restraining) order should also betaken as limited to the lifting of the picket lines which constitutedillegal picketing especially so because it expressly stated that thepetitioner union and its officers, agents or symphatizers "are herebydirected to call off the strike declared on July 17, 1965, and to liftthe picket lines established in and around the premises ofrespondent company's various offices and installations . . . . Thepersons manning the picket lines in these places are herebyenjoined from impeding and interfering with implementation of thisOrder as well as from interfering in any manner with the operationsof respondent.

Nagkakaisang Manggagawa sa Cuizon Hotel v. Libron (1983)The above restraining order had to be issued because as

contended in the petition, the order of the labor arbiter certainlycannot be declared final and executory upon the mere issuancethereof. That is manifestly in contravention of the law. Article 223of the Labor Code is quite explicit on the matter, a period of 10 daysbeing granted either or both to the parties involved from receipt ofany order to appeal to the National Labor Relations Commission.

Moreover, the wholesale condemnation of peaceful picketingis likewise clearly bereft of support in law. As pointed out in a veryrecent decision decided this year, PAFLU v. CFI of Rizal: "It need notbe stressed that peaceful picketing is embraced in freedom ofexpression. As emphatically declared in Philippine Commercial &Industrial Bank v. Philnabank Employees' Association: 'From thetime of Mortera v. Court of Industrial Relations, a 1947 decision thisCourt has been committed to the view that peaceful picketing ispart of the freedom of speech guarantee of the Constitution.'Reference was made in such opinion to Associated Labor Union v.Gomez.

RESTRICTIONS, INNOCENT THIRD PARTY RULE AND LIABILITIES

Liwayway Publishing Co. v. Permanent Concrete Workers Union(1981)

At this juncture, it is well to cite and stress thepronouncements of the Supreme Court on the right to picket. Thus,in the case of PAFLU vs. Cloribel, the SC said:

"The right to picket as a means of communicatingthe facts of a labor dispute is a phase of the freedom ofspeech guaranteed by the constitution. If peacefullycarried out, it cannot be curtailed even in the absence ofemployer-employee relationship.

The right is, however, not an absolute one. Whilepeaceful picketing is entitled to protection as anexercise of free speech, we believe that courts are notwithout power to confine or localize the sphere ofcommunication or the demonstration to the parties tothe labor dispute, including those with related interest,and to insulate establishments or persons with no

industrial connection or having interest totally foreign tothe context of the dispute.

Thus, the right may be regulated at the instance ofthird parties or 'innocent bystanders' if it appears thatthe inevitable result of its exercise is to create animpression that a labor dispute with which they have noconnection or interest exists between them and thepicketing union or constitute an invasion of their rights.

The same case state clearly and succinctly the rationalizationfor the court's regulation of the right to picket in the following wiseand manner:

"Wellington and Galang are mere 'innocentbystanders'. They are entitled to seek protection of theirrights from the courts and the courts may, accordingly,legally extend the same. Moreover, PAFLU's right topeacefully picket METBANK is not curtailed by theinjunctions issued by respondent judge. The picket ismerely regulated to protect the rights of third parties.And the reason for this is not farfetched. If the law failsto afford said protection, men will endeavor tosafeguard their rights by their own might, take the lawin their own hands, and commit acts which lead tobreaches of the law. This should not be allowed tohappen."

MSF Tire and Rubber Inc. v. CA (1999)Thus, an "innocent bystander," who seeks to enjoin a labor

strike, must satisfy the court that aside from the grounds specifiedin Rule 58 of the Rules of Court, it is entirely different from, withoutany connection whatsoever to, either party to the dispute and,therefore, its interests are totally foreign to the context thereof.

PROHIBITED ACTIVITIES- PEACEFUL PICKETING

Art. 264 (b)No person shall obstruct, impede, or interfere with, by force,violence, coercion, threats or intimidation, any peaceful picketingby employees during any labor controversy or in the exercise of theright to self-organization or collective bargaining, or shall aid orabet such obstruction or interference.

9.04 ROLE OF PEACE OFFICERS DURING STRIKES AND PICKETING

ESCORTING

Art. 264 (d)No public official or employee, including officers and personnel ofthe New Armed Forces of the Philippines or the Integrated NationalPolice, or armed person,

3. shall bring in, introduce or escort in any manner,4. any individual who seeks to replace strikers in entering or

leaving the premises of a strike area, or work in place ofthe strikers.

The police force shall keep out of the picket lines unless actualviolence or other criminal acts occur therein:

IV. Provided, That nothing herein shall be interpreted toprevent any public officer from taking any measurenecessary to maintain peace and order, protect life andproperty, and/or enforce the law and legal order.

ARREST AND DETENTION OF LAW VIOLATORS

Art. 266

Requirement for arrest and detention.

Except on grounds of national security and public peace or in caseof commission of a crime,

3. no union members or union organizers may be arrestedor detained for union activities without previousconsultations with the Secretary of Labor.



Part IX

LABOR INJUNCTION

10.01 DEFINITION AND NATURE

INJUNCTION: An injunction is available as a remedy for harm forwhich there is no adequate remedy at law. Thus it is used toprevent a future harmful action rather than to compensate for aninjury that has already been occurred, or to provide relief fromharm for which an award of money damages is not a satisfactorysolution or for which a monetary value is impossible to calculate. Adefendant who violates an injunction is subject to penalty forcontempt. (Webster)

Philippine Airlines, Inc. v. NLRC (1998)GENERALLY, injunction is a preservative remedy for the

protection of one's substantive rights or interest. It is not a cause ofaction in itself but merely a provisional remedy, an adjunct to amain suit.

It is resorted to only when there is a pressing necessity toavoid injurious consequences which cannot be remedied under anystandard of compensation. The application of the injunctive writrests upon the existence of an emergency or of a special reasonbefore the main case be regularly heard.

The essential conditions for granting such temporaryinjunctive relief are:

1) that the complaint alleges facts which appear to besufficient to constitute a proper basis for injunction and

2) that on the entire showing from the contending parties,the injunction is reasonably necessary to protect the legalrights of the plaintiff pending the litigation.

Injunction is also a special equitable relief granted only incases where there is no plain, adequate and complete remedy atlaw.

The foregoing ancillary power may be exercised by the LaborArbiters:

ONLY as an INCIDENT to the cases pending before themin order to preserve the rights of the parties during thependency of the case,

BUT excluding labor disputes involving strikes or lockout.

Why does injunction not apply to the facts of this case?

In the present case, there is no labor dispute between thepetitioner and private respondents as there has yet been nocomplaint for illegal dismissal filed with the labor arbiter by theprivate respondents against the petitioner.Furthermore, an examination of private respondents' petition forinjunction reveals that it has no basis since there is no showing ofany urgency or irreparable injury which the private respondentsmight suffer.

When is an injury considered irreparable?

An injury is considered irreparable if it is of such constant andfrequent recurrence that no fair and reasonable redress can be hadtherefor in a court of law, or where there is no standard by whichtheir amount can be measured with reasonable accuracy, that is, itis not susceptible of mathematical computation.

It is considered irreparable injury when it cannot beadequately compensated in damages due to the nature of the injuryitself or the nature of the right or property injured or when thereexists no certain pecuniary standard for the measurement ofdamages.

POLICY BEHIND PROHIBITION OF ISSUANCE OF INJUNCTION:It has been the policy of the State to encourage the parties to

use the non-judicial process of negotiation and compromise,mediation and arbitration.

Thus, injunctions may be issued only in cases of extremenecessity based on legal grounds clearly established, after dueconsultations or hearing and when all efforts at conciliationare exhausted which factors, however, are clearly absent inthe present case.

10.02 GENERAL RULE –PROHIBITION

Art. 254No temporary or permanent injunction or restraining order in anycase involving or growing out of labor disputes shall be issued byany court or other entity, except as otherwise provided in Articles218 and 264 of this code.

Art. 212 (l)‘LABOR DISPUTE’ includes any controversy or matters:

concerning terms or conditions of employment or theassociation or

representation of persons in negotiating, fixing,maintaining, changing or arranging the terms andconditions of employment,

regardless of whether the disputants stand in theproximate relation of employer and employee.

ART. 218Powers of the Commission. — The Commission shall have thepower and authority:(e) To enjoin or restrain any actual or threatened commission of anyor all prohibited or unlawful acts or to require the performance of aparticular act in any labor dispute

which, if not restrained or performed forthwith, maycause grave or irreparable damage to any party or renderineffectual any decision in favor of such party:

Provided, That no temporary or permanent injunction inany case involving or growing out of a labor dispute asdefined in this Code shall be issued

except after hearing the testimony of witnesses, with opportunityfor cross-examination, in support of the allegations of a complaintmade under oath,and testimony in opposition thereto, if offered, and only after afinding of fact by the commission, to the effect:

(1) That prohibited or unlawful acts have beenthreatened and will be committed and will becontinued unless restrained but no injunctionor temporary restraining order shall be issuedon account of any threat, prohibited orunlawful act, except against the person orpersons, association or organization makingthe threat or committing the prohibited orunlawful act or actually authorizing orratifying the same after actual knowledgethereof;

2) That substantial and irreparable injury tocomplainants property will follow;

3) That as to each item of relief to be granted,greater injury will be inflicted uponcomplainant by the denial of relief than willbe inflicted upon defendants by the grantingof relief;

4) That complainant has no adequate remedy atlaw; and"

(5) That the public officers charged with the duty toprotect complainants property are unable orunwilling to furnish adequate protection.

"Such hearing shall be held after due andpersonal notice thereof has been served, insuch manner as the Commission shall direct,to all known persons against whom relief issought, and also to the Chief Executive andother public officials of the province or citywithin which the unlawful have beenthreatened or committed charged with theduty to protect complainant's property:



Provided, however,

a) the complainant "shall also allege that, unless atemporary restraining order shall be issued without notice,

a SUBSTANTIAL and IRREPARABLEINJURY to complainant's PROPERTY willbe unavoidable;"

b) there is "TESTIMONY under OATH, sufficient, if sustained,to justify the Commission in issuing a temporary injunctionupon hearing after notice;"

c) the "temporary restraining order shall be effective for nolonger than twenty (20) days and shall become void at theexpiration of said twenty (20) days."

d) No such temporary restraining order or temporaryinjunction shall be issued except on condition that"complainant shall first file an undertaking with adequatesecurity in an amount to be fixed by the Commission sufficientto recompense those enjoined for any loss, expense ordamage caused by the improvident or erroneous issuance ofsuch order or injunction, including all reasonable costs,together with a reasonable attorney's fee, and expense ofdefense against the order or against the granting of anyinjunctive relief sought in the same proceeding andsubsequently denied by the Commission;"

The UNDERTAKING herein mentioned shall be understood toconstitute an agreement into by the complainant and the suretyupon which an order may be rendered in the same suit orproceeding against said complainant and surety upon a hearing toassess damages, of which hearing complainant and surety shallhave reasonable notice, the said complainant and surety submittingthemselves to the jurisdiction of the Commission for that purpose.

But nothing herein contained shall deprive any party having a claimor cause of action under or upon such undertaking from electing topursue his ordinary remedy by suit at law or in equity:

Provided, further, That the reception of evidence for the applicationof a writ of injunction may be delegated by the Commission to anyof its Labor Arbiters who shall conduct such hearings in such placesas he may determine to be accessible to the parties and theirwitnesses and shall submit thereafter his recommendation to theCommission.

Caltex Filipino Managers and Supervisors Assoc. v. CIR (72)RATIONALE for prohibition:1) It is well known that the scheme in Republic Act No. 875

for achieving industrial peace rests essentially on a FREEAND PRIVATE AGREEMENT between the employer andhis employees as to the terms and conditions underwhich the employer is to give work and the employeesare to furnish labor, unhampered as far as possible byjudicial or administrative intervention. On this premisethe lawmaking body has virtually prohibited the issuanceof injunctive relief involving or growing out of labordisputes.

2) The prohibition to issue labor injunctions is designed togive labor a comparable bargaining power with capitaland must be liberally construed to that end.

GENERAL RULE: there can be no injunction issued against anystrike.

EXCEPT in only one instance, that is, when a labor disputearises in an INDUSTRY INDISPENSABLE TO THE NATIONAL INTERESTand such dispute is CERTIFIED BY THE PRESIDENT of the Philippinesto the Court of Industrial Relations in compliance with Sec. 10 ofRepublic Act No. 875.

Purpose of an injunction in an UNCERTIFIED case: As a corollary tothis, an injunction in an uncertified case must be based on the strictrequirements of Sec. 9(d) of Republic Act No. 875; the purpose of

such an injunction is not to enjoin the strike itself, but only unlawfulactivities.

10.03 EXCEPTIONS – WHEN INJUCTION ALLOWED

Ilaw at Buklod ng Manggagawa v. NLRC (1991)HELD: Also untenable is the Union's other argument that the

respondent NLRC Division had no jurisdiction to issue thetemporary restraining order or otherwise grant the preliminaryinjunction prayed for by SMC and that, even assuming the contrary,the restraining order had been improperly issued. The Court findsthat the respondent Commission had acted entirely in accord withapplicable provisions of the Labor Code.GENERAL RULE:

Article 254 of the Code provides that:"No temporary or permanent injunction orrestraining order in any case involving orgrowing out of labor disputes shall be issued byany court or other entity, except as otherwiseprovided in Articles 218 and 264 . . .

EXCEPTIONS: Article 264 lists down specific "prohibited activities" whichmay be forbidden or stopped by a restraining order orinjunction. Article 218 inter alia enumerates the powers of the

National Labor Relations Commission and lays down the conditionsunder which a restraining order or preliminary injunction may issue,and the procedure to be followed in issuing the same.

Among the powers expressly conferred on the Commission byArticle 218 is the power to "enjoin or restrain any actual orthreatened commission of any or all prohibited or unlawful acts orto require the performance of a particular act in any labor disputewhich,:

if not restrained or performed forthwith, may causegrave or irreparable damage to any party or renderineffectual any decision in favor of such party . . . ."

National Mines and Allied Workers v. Vera (1984)An injunction is a proper remedy to prevent a sheriff from

selling the property of one person for the purpose of paying thedebts of another." (In this case, NO LABOR DISPUTE exists).

To sustain petitioners' theory will inevitably lead to disastrousconsequences and lend judicial imprimatur to deprivation ofproperty without due process of law.

Simply because a writ of execution was issued by the NLRCdoes not authorize the sheriff implementing the same to levy onanybody's property. To deny the victim of the wrongful levy, therecourse such as that availed of by the herein private respondents,under the pretext that no court of general jurisdiction can interferewith the writ of execution issued in a labor dispute, will besanctioning a greater evil than that sought to be avoided by theLabor Code provision in question. Certainly, that could not havebeen the intendment of the law creating the NLRC. For well-settledis the rule that the power of a court to execute its judgmentextends only over properties unquestionably belonging to thejudgment debtor.

Ravago v. Eastern Marine Ltd (2005)

NO Labor Dispute exists in this case

Facts: Petitioner is a seafarer who was hired on a contractualbasis. Shortly after the termination of his latest contract, he wasgranted a vacation leave. During that time, he was hit by a straybullet on his left leg which caused permanent injury. Eastern Marinerefused to re-hire him. Petitioner filed a case for illegal dismissal.

The Labor Arbiter found that Petitioner was not illegallydismissed. NLRC reversed. On appeal, CA issued a preliminaryinjunction.

The petitioner asserts that the CA violated Article 254 of theLabor Code when it issued a temporary restraining order, andthereafter a writ of preliminary injunction, to derail theenforcement of the final and executory judgment of the LaborArbiter as affirmed by the NLRC. On the other hand, therespondents contend that the issue has become academic since theCA had already decided the case on its merits.



Held: The petitioner’s reliance on Article 25 of the Labor Codeis misplaced. The law proscribes the issuance of injunctive reliefonly in those cases involving or growing out of a labor dispute.

The case before the NLRC neither involves nor grows outof a labor dispute. It did not involve the fixing of terms orconditions of employment or representation of personswith respect thereto.

In fact, the petitioner’s complaint revolves around theissue of his alleged dismissal from service and his claimfor backwages, damages and attorney’s fees. Moreover,Article 254 of the Labor Code specifically provides thatthe NLRC may grant injunctive relief under Article 218thereof.

Besides, the anti-injunction policy of the Labor Code, basically,is freedom at the workplace. It is more appropriate in thepromotion of the primacy of free collective bargaining andnegotiations, including voluntary arbitration, mediation andconciliation, as modes of settling labor and industrial disputes.

10.04 ISSUING AGENCY

1. NATIONAL LABOR RELATIONS COMMISSION AND ROLE OF THELABOR ARBITER

See Art. 218 (e) Above

ROLE OF THE LABOR ARBITER ( Book V Rule XXI sec. 13)—

…The reception of evidence for the application of the writ ofinjunction may be delegated by the Commission to any LaborArbiter who shall submit his recommendations to the Commissionsfor its consideration and resolution.

2. PROCEDURAL REQUIREMENTS AND RULES FOR THE ISSUANCEOF LABOR INJUNCTIONS

Ilaw at Buklod ng Manggagawa (IBM) v. NLRC (1991)GENERAL RULE: Cannot issue EX PARTE

As a rule such restraining orders or injunctions do not issue exparte, but only after compliance with the following requisites, towit:

a. a HEARING held "after due and PERSONAL NOTICEthereof has been served, in such manner as theCommission shall direct, to all known persons againstwhom relief is sought, and also to the Chief Executive andother public officials of the province or city within whichthe unlawful acts have been threatened or committedcharged with the duty to protect complainant's property

b. reception at the hearing of "testimony of witnesses, withopportunity for cross-examination, in support of theallegations of a complaint made under oath," as well as"testimony in opposition thereto, if offered . . .;

c. "a finding of fact by the Commission, to the effect:1) That prohibited or unlawful acts have been

threatened and will be committed and will becontinued unless restrained,

but no injunction or temporary restrainingorder shall be issued on account of anythreat, prohibited or unlawful act,

except against the person or persons,association or organization making thethreat or committing the prohibited orunlawful act or actually authorizing orratifying the same after actual knowledgethereof;

2) That substantial and irreparable injury tocomplainant's property will follow;

3) That as to each item of relief to be granted,greater injury will be inflicted upon complainantby the denial of relief than will be indicted upondefendants by the granting of relief;

4) That complainant has no adequate remedy atlaw; and

5) That the public officers charged with the duty toprotect complainant's property are unable orunwilling to furnish adequate protection."

EXCEPTION: When it can issue ex parte.However, a temporary restraining order may be issued ex

parte under the following conditions:a. the complainant "shall also allege that, unless a

temporary restraining order shall be issued withoutnotice,

a SUBSTANTIAL and IRREPARABLE INJURY tocomplainant's PROPERTY will be unavoidable;"

b. there is "TESTIMONY under OATH, sufficient, if sustained,to justify the Commission in issuing a temporaryinjunction upon hearing after notice;"

c. the "complainant shall first file an undertaking withadequate security in an amount to be fixed by theCommission sufficient to recompense those enjoined forany loss, expense or damage caused by the improvidentor erroneous issuance of such order or injunction,including all reasonable costs, together with a reasonableattorney's fee, and expense of defense against the orderor against the granting of any injunctive relief sought inthe same proceeding and subsequently denied by theCommission;" and

Bisig ng Manggagawa, etc. v. NLRC (1993)In the case at bar, the records will show that the respondent

NLRC failed to comply with the letter and spirit of Article 218 (e), (4)and (5) of the Labor Code in issuing its Order of May 5, 1992.

Article 218 (e) of the Labor Code provides both theprocedural and substantive requirements which muststrictly be complied with before a temporary orpermanent injunction can issue in a labor dispute

"Verily, the factual circumstances proven by the evidenceshow that there was no concurrence of the five (5)prerequisites mandated by Art. 218(e) of the Labor Code.Thus there is no justification for the issuance of thequestioned Order of preliminary injunction."

To be sure, the issuance of an ex parte temporary restrainingorder in a labor dispute is not per se prohibited. Its issuance,however, should be characterized by care and caution for the lawrequires that it be clearly justified by considerations of EXTREMENECESSITY, i.e., when the commission of unlawful acts is causingsubstantial and irreparable injury to company properties and thecompany is, for the moment, bereft of an adequate remedy at law.

This is as it ought to be, for imprudently issued temporaryrestraining orders can break the back of employees engaged in alegal strike.

3. INJUNCTION AND MED-ARBITER

Dinio v. Laguesma (1997)In the performance of his duties, the public respondent should

not be shackled by stringent rules, if to do so would result inmanifest injustice. Thus, he cannot, and correctly did not, turn ablind eye to the arbitrary and haphazard manner by which the Med-Arbiter issued the subject temporary restraining order, even thoughthis issue was not explicitly raised by private respondents.

There is no question that the issuance of a temporaryrestraining order is addressed to the sound discretion of the Med-Arbiter.

However, "this discretion should be exercised basedupon the grounds and in the manner provided by law."

In the case of labor injunctions or temporary restrainingorders, one may issue only in instances where the complainant orapplicant will suffer grave or irreparable damages as provided inSec. 5, Rule XVI, Book V of the Omnibus Rules Implementing theLabor Code:

Sec 5. Injunctions. — No temporary injunctionsor restraining order in any case involving or growing outof a labor dispute shall be issued by any court or otherentity. On the other hand, the Office of the President,the Secretary of Labor, the Commission, the Labor



Arbiter or med-arbiter may enjoin any or all actsinvolving or arising from any case pending before any ofsaid offices or officials which if not restrained forthwithmay cause grave or irreparable damage to any of theparties to the case or seriously affect social or economicstability.

While it is true that the Med-Arbiter has the authority to issuea writ of preliminary injunction, or a temporary restraining orderagainst any act arising from any case pending before him, theexercise thereof shall always be subject to the test ofreasonableness.

The Med-Arbiter should ascertain that the act complained of,if not restrained forthwith, may cause grave or irreparable damageto any of the parties to the case.

When damage is considered "irreparable":

a) if it is of such constant and frequent recurrence that nofair or reasonable redress can be had therefor in a courtof law (Allendorf vs. Abalanson, 38 Phil. 585), or

b) where there is no standard by which their amount can bemeasured with reasonable accuracy, that is, it is notsusceptible of mathematical computation (SSC vs.Bayona, et al., L-13555, May 30, 1962).

DISINI:1. Labor Injunction is not the same as the injunction under the

rules of court.2. General rule is stated in Art. 254

- The exceptions are in Art. 218 and Art. 264- If you are filing injunction under Art. 218, the allegations ofthe acts committed are different from the allegations of actscommitted under Art. 264. BUT the procedure to follow is thesame, Art. 218.

3. Procedure for issuance of TRO is different from procedure ofissuance of Injunction.- The similarity is in the testimony given.- But TRO is different because it is valid only for 20 days.

4. It is important to take note of the BOND filed and what otherremedies there are just in case the injunction or TRO iswrongfully issued.

ART. 218Powers of the Commission. — The Commission shall have thepower and authority:

I. ALLEGATIONS FOR ART. 218 TO APPLY

(e) To enjoin or restrain any actual or threatenedcommission of any or all prohibited or unlawfulacts or to require the performance of aparticular act in any labor dispute

-- which, if not restrained or performedforthwith, may cause grave or irreparabledamage to any party or render ineffectual anydecision in favor of such party:

II. PROCEDURE for issuance of injunction (also thesame for allegations under Art. 264)

-- Provided, That no temporary or permanentinjunction in any case involving or growing outof a labor dispute as defined in this Code shallbe issued

A. except after hearing the testimony ofwitnesses,

B. with opportunity for cross-examination, insupport of the allegations of a complaintmade under oath,

C. and testimony in opposition thereto, ifoffered, and

D. only after a finding of fact by thecommission, to the effect:

(1) That prohibited or unlawful acts havebeen threatened and will be committedand will be continued unless restrainedbut no injunction or temporaryrestraining order shall be issued onaccount of any threat, prohibited orunlawful act, except against the person orpersons, association or organizationmaking the threat or committing theprohibited or unlawful act or actuallyauthorizing or ratifying the same afteractual knowledge thereof;

"(2) That substantial and irreparable injury tocomplainants property will follow;

"(3) That as to each item of relief to begranted, greater injury will be inflictedupon complainant by the denial of reliefthan will be inflicted upon defendants bythe granting of relief;

"(4) That complainant has no adequateremedy at law; and"

(5) That the public officers charged with theduty to protect complainants propertyare unable or unwilling to furnishadequate protection.

E. PERSONAL NOTICE To whom : "Suchhearing shall be held after due andpersonal notice thereof has been served,in such manner as the Commission shalldirect,- to all known persons against whomrelief is sought,- and also to the Chief Executive andother public officials of the province orcity within which the unlawful have beenthreatened or committed charged withthe duty to protect complainant'sproperty:

III. PROCEDURE for issuance of TemporaryRestraining Order

Provided, however,a) the complainant "shall also allege that, unless a temporary

restraining order shall be issued without notice,

- a SUBSTANTIAL and IRREPARABLE INJURY to complainant'sPROPERTY will be unavoidable;"

b) there is "TESTIMONY under OATH, sufficient, if sustained, tojustify the Commission in issuing a temporary injunction uponhearing after notice;"

c) the "temporary restraining order shall be effective for nolonger than twenty (20) days and shall become void at theexpiration of said twenty (20) days."

d) No such temporary restraining order or temporary injunctionshall be issued except on condition that

- "complainant shall first file an undertaking with adequatesecurity in an amount to be fixed by the Commission sufficientto recompense those enjoined for any loss, expense ordamage caused by the improvident or erroneous issuance ofsuch order or injunction, including all reasonable costs,together with a reasonable attorney's fee, and expense ofdefense against the order or against the granting of anyinjunctive relief sought in the same proceeding andsubsequently denied by the Commission;"



IV. The UNDERTAKING WITH ADEQUATE SECURITY(bond)

A. The UNDERTAKING herein mentioned shall beunderstood to constitute an agreement into by thecomplainant and the surety upon which an order maybe rendered in the same suit or proceeding againstsaid complainant and surety upon a hearing to assessdamages, of which hearing complainant and suretyshall have reasonable notice, the said complainant andsurety submitting themselves to the jurisdiction of theCommission for that purpose.

V. Other RemediesBut nothing herein contained shall deprive any partyhaving a claim or cause of action under or upon suchundertaking from electing to pursue his ordinary remedyby suit at law or in equity:

VI. Role of the Labor Arbiter

Provided, further, that the(1) reception of evidence for the application of a writ ofinjunction may be delegated by the Commission to any of itsLabor Arbiters who shall conduct such hearings in such placesas he may determine to be accessible to the parties and theirwitnesses and shall(2) submit thereafter his recommendation to the Commission.

SUMMARY NOTES:

Definition:

Labor Injunction – an order or a writ of injunction commands aperson to do or not to do a particular act. It may be positive(mandatory) or negative (prohibitory) command.

Note: This remedy will apply only if there exists a labor dispute

Gen. Rule: An injunction CANNOT be issued in any case involving orgrowing out of labor disputes. (Art. 254)

Exceptions:1) Art. 218 (e) – to enjoin or restrain any actual or threatenedcommission of any or all prohibited or unlawful acts or to requirethe performance of a particular act in any labor dispute which, ifnot restrained or performed forthwith, may cause grave orirreparable damage to any party or render ineffectual any decisionin favor of such party.2) Art. 263 (g) – the SOLE or Commission may seek the assistance oflaw enforcement agencies to ensure compliance with this provisionas well as with such orders as he may issue to enforce the same.(IRR, Book V, Rule XXII, Sec. 14)3) Ilaw at Buklod ng Manggagawa v. NLRC (1991) – may issueinjunction to prevent any of the prohibited acts enumerated in Art.264

Procedure for the issuance of injunction (Art. 218, e):1) Observance of due process (Notice and Hearing)2) Certain factors have been established by the Commission[enumerated below]

(The following, if followed, allows for issuance of Injunction EXPARTE)3) Testimony under oath to the effect that substantial andirreparable injury to complainant’s property will be unavoidable4) Complainant must first file an undertaking with adequatesecurity sufficient to recompense those enjoined for any loss,expense, or damage caused by the erroneous issuance of suchorder (amount determined by NLRC)

Note: NLRC may delegate to LA the reception of evidence ininjunction hearings which is accessible to the parties. The LA, then,submits its recommendation to the NLRC.

Factors (Art. 218, e):

the prohibited or unlawful acts have been threatened and will becommitted unless restrained, or have been committed and will becontinued unless restrained (actual knowledge required) substantial and irreparable injury to complainant’s property willfollow greater injury will be inflicted upon complainant by the denial ofthe relief prayed for than will be inflicted upon the defendants bygranting the relief the complainant has no adequate remedy at law the public officers charged with the duty to protectcomplainant’s property are unable or unwilling to urnish adequateprotection

Effectivity: 20 days upon issuance of the order



Part X

ALTERNATIVES TO USE OF ECONOMIC

FORCE: CONCILIATION AND ARBITRATION

AS MODES OF LABOR DISPUTE

SETTLEMENT

1. CONCILIATION

11.01 POLICY

Art. 211.Declaration of Policy.(e)To provide an adequate administrative machinery for theexpeditious settlement of labor or industrial disputes;

1987 Constitution. Art. XIII, Sec. 3x x x The State shall promote the principle of shared responsibilitybetween workers and employers and the preferential use ofvoluntary modes in settling disputes, including conciliation, andshall enforce their mutual compliance therewith to foster industrialpeace.

Kinds of Conciliation meetings:1) As part of the collective bargaining process (Art. 250)2) As preventive mediation cases (IRR, Book V, Rule XXII, Sec. 1)3) As part of disputes involving notices of strike or lockout (Art. 263,e)

11.02 CONCILIATION – AS PART OF COLLECTIVEBARGAINING PROCESS

Art. 250Procedure in collective bargaining.c. If the dispute is not settled, the Board shall intervene upon

request of either or both parties or at its own initiative andimmediately call the parties to conciliation meetings. TheBoard shall have the power to issue subpoenas requiring theattendance of the parties to such meetings. It shall be the dutyof the parties to participate fully and promptly in theconciliation meetings the Board may call;

d. During the conciliation proceedings in the Board, the partiesare prohibited from doing any act which may disrupt orimpede the early settlement of the disputes; and

e. The Board shall exert all efforts to settle disputes amicably andencourage the parties to submit their case to a voluntaryarbitrator.

Art. 233Privileged communication. Information and statements made atconciliation proceedings shall be treated as privilegedcommunication and shall not be used as evidence in theCommission. Conciliators and similar officials shall not testify in anycourt or body regarding any matters taken up at conciliationproceedings conducted by them.

11.03 CONCILIATION AGENCY – NATIONALCONCILIATION AND MEDIATION BOARD

Executive Order 251, Sec. 4:

Sec. 4. Section 22 of Executive Order No. 126 is hereby amended toread as follows:

"Sec. 22. National Conciliation and Mediation Board. A NationalConciliation and Mediation Board, herein referred to as the"Board", is hereby created and which shall absorb the conciliationmediation and voluntary arbitration functions of the Bureau ofLabor of Relations in accordance with Section 29 (c) hereof…”x x xA Tripartite Voluntary Arbitration Advisory Council is herebycreated and attached to the National Conciliation and Mediation

Board. The Tripartite Voluntary Arbitration Advisory Council shalladvise the National Conciliation Board on matters pertaining to thepromotion of voluntary arbitration as the preferred mode ofdispute settlement.

2. ARBITRATION

11.04 IN GENERAL

Chung Fu Industries v. CA (1992)As early as the 1920's, this Court declared: "In the Philippines

fortunately, the attitude of the courts toward arbitrationagreements is slowly crystallizing into definite and workable form ...The rule now is that unless the agreement is such as absolutely toclose the doors of the courts against the parties, which agreementwould be void, the courts will look with favor upon such amicablearrangements and will only with great reluctance interfere toanticipate or nullify the action of the arbitrator.”

In practice nowadays, absent an agreement of the parties toresolve their disputes via a particular mode, it is the regular courtsthat remain to resolve such matters. However, the parties may optfor recourse to third parties, exercising their basic freedom to"establish such stipulations, clauses, terms and conditions as theymay deem convenient, provided they are not contrary to law,morals, good customs, public order or public policy." In such a case,resort to the arbitration process may be spelled out by them in acontract in anticipation of disputes that may arise between them.Or this may be stipulated in a submission agreement when they areactually confronted by a dispute. Whatever be the case, suchrecourse to an extrajudicial means of settlement is not intended tocompletely deprive the courts of jurisdiction. In fact, the early caseson arbitration carefully spelled out the prevailing doctrine at thetime, thus: ". . . a clause in a contract providing that all matters indispute between the parties shall be referred to arbitrators and tothem alone is contrary to public policy and cannot oust the courtsof jurisdiction."

But certainly, the stipulation to refer all future disputes to anarbitrator or to submit an ongoing dispute to one is valid. Being partof a contract between the parties, it is binding and enforceable incourt in case one of them neglects, fails or refuses to arbitrate.Going a step further, in the event that they declare their intentionto refer their differences to arbitration first before taking courtaction, this constitutes a condition precedent, such that where asuit has been instituted prematurely, the court shall suspend thesame and the parties shall be directed forthwith to proceed toarbitration.

A court action may likewise be proper where the arbitrator hasnot been selected by the parties.

Under present law, may the parties who agree to submit theirdisputes to arbitration further provide that the arbitrators' awardshall be final, unappealable and executory?

Article 2044 of the Civil Code recognizes the validity of suchstipulation, thus:

"Any stipulation that the arbitrator's award or decision shallbe final is valid, without prejudice to Articles 2038, 2039 and2040."

Similarly, the Construction Industry Arbitration Law providesthat the arbitral award "shall be final and inappealable excepton questions of law which shall be appealable to the SupremeCourt."

The voluntary arbitrator is now mandated to render an awardor decision within 20 calendar days from the date of submission ofthe dispute and such decision shall be final and executory after 10calendar days from receipt of the copy of the award or decision bythe parties.

Where the parties agree that the decision of the arbitratorshall be final and unappealable as in the instant case, the pivotalinquiry is whether subject arbitration award is indeed beyond theambit of the court's power of judicial review.

It is stated explicitly under Art. 2044 of the Civil Code that thefinality of the arbitrators' award is not absolute and withoutexceptions.

Where the conditions described in Articles 2038, 2039 and



2040 applicable to both compromises and arbitrations areobtaining, the arbitrators' award may be annulled orrescinded.

Additionally, under Sections 24 and 25 of the Arbitration Law,there are grounds for vacating, modifying or rescinding anarbitrator's award.

If courts refuse or neglect to inquire into the factual milieu of anarbitrator's award to determine whether it is in accordance with lawor within the scope of his authority? How may the power of judicialreview be invoked?

This is where the proper remedy is certiorari under Rule 65 theRevised Rules of Court. It is to be borne in mind, however, that thisaction will lie only where a grave abuse of discretion or an actwithout or in excess of jurisdiction on the part of the voluntaryarbitrator is clearly shown.

It should be stressed too, that voluntary arbitrators, by thenature of their functions, act in a quasi-judicial capacity. It stands toreason, therefore, that their decisions should not be beyond thescope of the power of judicial review of this Court.

LM Power Engineering Corp. v. Capitol Industrial ConstructionGroups (2003)

In any event, the inclusion of an arbitration clause in a contractdoes not ipso facto divest the courts of jurisdiction to pass upon thefindings of arbitral bodies, because the awards are still judiciallyreviewable under certain conditions.

Being an inexpensive, speedy and amicable method of settlingdisputes, arbitration -- along with mediation, conciliation andnegotiation -- is encouraged by the Supreme Court. Aside fromunclogging judicial dockets, arbitration also hastens the resolutionof disputes, especially of the commercial kind. It is thus regarded asthe “wave of the future” in international civil and commercialdisputes. Brushing aside a contractual agreement calling forarbitration between the parties would be a step backward.

Consistent with the above-mentioned policy of encouragingalternative dispute resolution methods, courts should liberallyconstrue arbitration clauses. Provided such clause is susceptible ofan interpretation that covers the asserted dispute, an order toarbitrate should be granted. Any doubt should be resolved in favorof arbitration.

Sec 1 of Article II of the old Rules of Procedure GoverningConstruction Arbitration indeed required the submission of arequest for arbitration, as follows. However, the new Rules ofProcedure Governing Construction Arbitration has dispensed withthis requirement and recourse to the CIAC may now be availed ofwhenever a contract “contains a clause for the submission of afuture controversy to arbitration” .

Clearly, there is no more need to file a request with the CIACin order to vest it with jurisdiction to decide a construction dispute.

The arbitral clause in the Agreement is a commitment on thepart of the parties to submit to arbitration the disputes coveredtherein. Because that clause is binding, they are expected to abideby it in good faith. And because it covers the dispute between theparties in the present case, either of them may compel the other toarbitrate.

11.05 COMPULSORY ARBITRATION

1. DEFINITION AND NATURE OF DISPUTE SUBJECT TOCOMPULSORY ARBITRATION

Compulsory Arbitration is by mandate of law. While voluntaryarbitration is by agreement of parties.

What is the type of dispute subject to compulsoryarbitration? Labor disputes in industry indispensable to thenational interest.

Who is initiating party? Initiated by the Secretary of Labor orthe President.

Take note that the NLRC has no authority to initiate. The NLRC onlycomes into the picture when the secretary of labor or the Presidentcertifies the case to them.

REQUISITES FOR A COMPULSARY ARBITRATION (Art. 263, g):- there exists a LABOR DISPUTE- causing or likely to cause a STRIKE OR LOCK-OUT- in an INDUSTRY INDISPENDSABLE TO THE NATIONAL INTERESTS

The Secretary of Labor and Employment MAY:1) assume jurisdiction over the dispute and decide it OR2) certify the same to the Commission (NLRC) for COMPULSORYARBITRATION.

EFFECT of Assumption or Certification of SOLE:

If the parties are yet to go on strike or lockout:- AUTOMATICALLY enjoining the intended or impending strike or

lock-out as specified in the assumption or certification order.

If one has already taken place at the time of assumption orcertification,

- All striking or locked-out employees shall IMMEDIATELY RETURNTO WORK

- AND the employer shall IMMEDIATELY resume operations andREADMIT all workers under the SAME terms and conditionsprevailing before the strike or lock-out.

Note: The Secretary of Labor and Employment or the Commissionmay seek the assistance of law enforcement agencies to ensure thecompliance with this provision (Art. 263, g) as well as with suchorders as he may issue to enforce the same.

Art. 263 (g) on strikes/lockouts in medical institutions:

In labor disputes adversely affecting the continued operation ofsuch hospitals, clinics or medical institutions,

1) It shall be the DUTY of striking union or locking out employer toprovide and maintain an EFFECTIVE SKELETAL WORKFORCE ofmedical and other health personnel,

2) Whose movement and services shall be unhampered andunrestricted, as are necessary to insure the proper and adequateprotection of the life and health of its patients, most especiallyemergency cases, for the duration of the strike or lockout.

The Secretary of Labor and Employment may IMMEDIATELYassume, within twenty four (24) hours from knowledge of theoccurrence of such a strike or lockout, jurisdiction over the same orcertify it to the Commission for compulsory arbitration.

Sec. 22 RA 8791Banking institutions are industries indispensable to the nationalinterest.

PAL v. NLRC (1989)

Proceedings on appeal before the NLRC en banc cannot beconsidered as part of the arbitration proceeding.

In its broad sense, arbitration is the reference of a dispute toan impartial third person, chosen by the parties or appointed bystatutory authority to hear and decide the case in controversy[Chan Linte v. Law Union and Rock, Inc. Co., 42 Phil. 548 (1921)].

When the consent of one of the parties is enforced bystatutory provisions, the proceeding is referred to as compulsoryarbitration.

In labor cases, compulsory arbitration is the process ofsettlement of labor disputes by a government agency which has theauthority to investigate and to make an award which is binding onall the parties

Under the Labor Code, it is the Labor Arbiter who is clothedwith the authority to conduct compulsory arbitration on casesinvolving termination disputes [Article 217, Pres. Decree No. 442, asamended].

When the Labor Arbiter renders his decision, compulsoryarbitration is deemed terminated because by then the hearing anddetermination of the controversy has ended.

GTE Directories Corp. v. GTE Directories Corp. Employees Union(1991)

The production and publication of telephone directories,which is the principal activity of GTE, can scarcely be described asan industry affecting the national interest. GTE is a publishing firm



chiefly dependent on the marketing and sale of advertising spacefor its not inconsiderable revenues.

Its services, while of value, cannot be deemed to be in thesame category of such essential activities as "the generation ordistribution of energy" or those undertaken by "banks, hospitals,and export-oriented industries."

It cannot be regarded as playing as vital a role incommunication as other mass media. The small number ofemployees involved in the dispute, the employer's paymentof "P10 million in income tax alone to the Philippinegovernment," and the fact that the "top officers of the unionwere dismissed during the conciliation process," obviously donot suffice to make the dispute in the case at bar one"adversely affecting the national interest."

Luzon Development Bank v. Association of Development BankEmployees (1995)

Compulsory arbitration is a system whereby the parties to adispute are compelled by the government to forego their right tostrike and are compelled to accept the resolution of their disputethrough arbitration by a third party.

The essence of arbitration remains since a resolution of adispute is arrived at by resort to a disinterested third party whosedecision is final and binding on the parties, but in compulsoryarbitration, such a third party is normally appointed by thegovernment.

Trans-Asia Shipping Lines, Inc. v. CA (2004)A cursory reading of the above provision shows that when the

Secretary of Labor assumes jurisdiction over a labor dispute in anindustry indispensable to national interest or certifies the same tothe NLRC for compulsory arbitration, such assumption orcertification shall have the effect of automatically enjoining theintended or impending strike or lockout. Moreover, if one hadalready taken place, all striking workers shall immediately return towork and the employer shall immediately resume operations andreadmit all workers under the same terms and conditions prevailingbefore the strike or lockout.

The powers granted to the Secretary of Labor under Article263 (g) of the Labor Code have been characterized as an exercise ofthe police power of the State, with the aim of promoting publicgood:When the Secretary exercises these powers, he is granted “greatbreadth of discretion” in order to find a solution to a labor dispute.The most obvious of these powers is the automatic enjoining of animpending strike or lockout or the lifting thereof if one has alreadytaken place.

The maritime industry is indubitably imbued with nationalinterest. Under the circumstances, the Labor Secretary correctlyintervened in the labor dispute between the parties to this case bycertifying the same to the NLRC for compulsory arbitration.

Manila Diamond Hotel Employees’ Union v. CA (2004)In the present case, there is no showing that the facts called

for payroll reinstatement as an alternative remedy. A strainedrelationship between the striking employees and management is noreason for payroll reinstatement in lieu of actual reinstatement.

Petitioner correctly points out that labor disputes naturallyinvolve strained relations between labor and management, and thatin most strikes, the relations between the strikers and the non-strikers will similarly be tense. Nevertheless, the government muststill perform its function and apply the law, especially if, as in thiscase, national interest is involved.

Gen. Rule: Voluntary Arbitration (Article XIII, Section 3 of theConstitution; Art. 211)

Exception: Assumption of jurisdiction by Sec. of Labor (Art.263, g)

Even in the exercise of his discretion under Article 236(g), theSecretary must always keep in mind the purpose of the law. Timeand again, this Court has held that when an official by-passes thelaw on the asserted ground of attaining a laudable objective, thesame will not be maintained if the intendment or purpose of thelaw would be defeated.

2. RATIONALE FOR COMPULSORY ARBITRATION

Manila Cordage Company v. CIR (1971)The purpose of a presidential certification is nothing more

than to bring about soonest, thru arbitration by the industrial court,a fair and just solution of the differences between an employer andhis workers regarding the terms and conditions of work in theindustry concerned which in the opinion of the President involvesthe national interest, so that the damage such employer-workerdispute might cause upon the national interest may be minimizedas much as possible, if not totally averted by avoiding the stoppageof work as a result of a strike or lock out or any lagging of theactivities of the industry or the possibility of these contingencieswhich might cause detriment to such national interest.

This is the foundation of that court's jurisdiction in what maybe termed as a certification case.

Naturally, if the employer and the workers are able to arrive atan amicable settlement by free and voluntary collective bargainingpreferably thru a labor union, before the court is able to use itsgood offices, it is but in consonance with the objective of theIndustrial Peace Act to promote unionism and free collectivebargaining that the court should step out of the picture and declareits function in the premises at an end, except as it may becomenecessary to determine whether or not the agreement forged bythe parties is not contrary to law, morals or public policy.

National Federation of Labor v. MOLE (1983)"The very nature of a return-to-work order issued in a certified

case lends itself to no other construction.

The certification attests to the urgency of the matter,affecting as it does an industry indispensable to the nationalinterest. The order is issued in the exercise of the court'scompulsory power of arbitration, and therefore must beobeyed until set aside.

To say that its effectivity must await affirmance on a motionfor reconsideration is not only to emasculate it but indeed todefeat its import, for by then the deadline fixed for the returnto work would, in the ordinary course, have already passedand hence can no longer be affirmed insofar as the timeelement is concerned."

The very purpose of a compulsory arbitration, is to call a haltto a pending strike by requiring that the status quo prior to itsdeclaration be preserved.

Phil. School of Business Administration v. Noriel(1988)The Solicitor General was correct when he stated that by

assuming jurisdiction over the labor dispute, the Acting Secretary ofLabor merely provided for a formal forum for the parties toventilate their positions with the end in view of settling the dispute.

As contended by the SolGen, "there can be no suchunconstitutional application (of BP 227) because all that Ministerhas done is to certify the labor dispute for arbitration andthereafter personally assume jurisdiction over it. He has notrendered any decision; he has not favored one party over the other.

LABOR DISPUTE of NATIONAL INTEREST (determined by Sec. ofLabor or President)

Sec. of Labor may assume jurisdiction over the caseand resolve it

Sec. of Labor may certify the case to the NLRC forcompulsory arbitration

3. PROCESS INITIATION – CERTIFICATION OF DISPUTE1) Initiating Party

a) Secretary DOLE

PLDT v. Manggagawa ng Komunikasyon sa Pilipinas (2005)When the Secretary exercises the powers granted by Article

263(g) of the Labor Code, he is, indeed, granted great breadth ofdiscretion. However, the application of this power is not withoutlimitation, lest the Secretary would be above the law.

As Article 263(g) is clear and unequivocal in stating that ALLstriking or locked out employees shall immediately return to workand the employer shall immediately resume operations and readmitALL workers under the same terms and conditions prevailing before



the strike or lockout, then the unmistakable mandate must befollowed by the Secretary.

b) President

Union of Filipro Employees v. Nestle Philippines (1990)The assumption of jurisdiction by the Secretary of Labor over

labor disputes causing or likely to cause a strike or lockout in anindustry indispensable to the national interest is in the nature of aPOLICE POWER measure.

The compelling consideration of the Secretary's assumption ofjurisdiction is the fact that

a prolonged strike or lockout is inimical to the nationaleconomy and

thus, the need to implement some measures to suppress anyact which will hinder the company's essential productions isindispensable for the promotion of the COMMON GOOD.

Corollary, the NLRC was thereby charged with the task ofimplementing the certification order for compulsory arbitration.

As the implementing body, its authority did not include thepower to amend the Secretary's order.

When sitting in a compulsory arbitration certified to by theSecretary of Labor, the NLRC is:- not sitting as a judicial court- but as an administrative body charged with the duty to implementthe order of the Secretary.

Int’l Pharmaceuticals Inc. v. Secretary of DOLE (1992)In the present case, the Secretary was explicitly granted by Art.

263(g) of the Labor Code the authority to assume jurisdiction over alabor dispute causing or likely to cause a strike or lockout in anindustry indispensable to the national interest, and decide the sameaccordingly.

Necessarily, this authority to assume jurisdiction over the said labordispute must include and extend toall questions and controversies arising therefrom,- including cases over which the labor arbiter has exclusivejurisdiction.

Moreover, Art. 217 is not without, but contemplates,exceptions thereto. This is evident from the opening proviso thereinreading "(e)xcept as otherwise provided under this Code . . ."Plainly, Article 263(g) was meant to make both the Secretary (or thevarious regional directors) and the labor arbiters share jurisdiction,subject to certain conditions.

Otherwise, the Secretary would not be able to effectively andefficiently dispose of the primary dispute. To hold the contrary mayeven lead to the absurd and undesirable result wherein theSecretary and the labor arbiter concerned may have diametricallyopposed rulings.

c) Office of the President – 263 (g)

Feati University v. Feati University Faculty Club (1966)"It thus appears that when in the opinion of the President a

labor dispute exists in an industry indispensable to national interestand he certifies it to the Court of Industrial Relations the latteracquires jurisdiction to act thereon in the manner provided by law.

Thus the court may take either of the following courses:a. it may issue an order forbidding employees to strike or

the employer to lockout its employees, or, failing in this,b. it may issue an order fixing the terms and conditions of

employment. It has no other alternative. It can throw thecase out in the assumption that the certification waserroneous.

". . . The fact, however, is that because of the strike declaredby the members of the minority union which threatens a majorindustry the President deemed it wise to certify the controversy tothe Court of Industrial Relations for adjudication.

What matters is that by virtue of the certification made by thePresident the case was placed under the jurisdiction of said court."To certify a labor dispute to the CIR is the prerogative of the

President under the law, and this Court will not interfere in, muchless curtail, the exercise of that prerogative.

4. ARBITRATION AGENCIES

St. Scholastica’s College v. Torres (1992)

A return to work order is immediately executory notwithstandingthe filing of a motion for reconsideration.

An issue that is not part of the dispute may be ruled on acompulsory arbitration case if it was submitted by the parties.

The issue on whether respondent SECRETARY has the power toassume jurisdiction over a labor dispute and its incidentalcontroversies, causing or likely to cause a strike or lockout in anindustry indispensable to the national interest, was already settledin International Pharmaceuticals, Inc. Secretary of Labor andEmployment. Therein, We ruled that:

". . . [T]he Secretary was explicitly granted by Article263 (g) of the Labor Code the authority to assumejurisdiction over a labor dispute causing or likely tocause a strike or lockout in an industry indispensableto the national interest, and decide the sameaccordingly. Necessarily, this authority to assumejurisdictional over the said labor dispute must includeand extend to all questions and controversies arisingtherefrom, including cases over which the LaborArbiter has exclusive jurisdiction."

The submission of an incidental issue of a labor dispute, inassumption and/or certification cases, to the Secretary of Labor andEmployment for his resolution is thus one of the instances referredto whereby the latter may exercise concurrent jurisdiction togetherwith the Labor Arbiters.

Effect of non-compliance with return to work order

Non-compliance with the certification order of the Sec ofLabor or a return to work order of the Commission shall beconsidered an illegal act committed in the course of the strike orlookout and shall authorize the Sec. of Labor or the Commission, asthe case may be, to enforce the same under pain or loss ofemployment status or entitlement to full employment benefitsfrom the locking-out employer or backwages, damages and/orother positive and/or affirmative reliefs, even to criminalprosecution against the liable parties . . ."

It must be strictly complied with even during the pendency ofany petition questioning its validity (Union of Filipro Employees v.Nestle' Philippines, Inc., supra)

After all, the assumption and/or certification order isissued in the exercise of respondent SECRETARY'scompulsive power of arbitration and, until set aside, musttherefore be immediately complied with.

The rationale for this rule is explained in University of Sto.Tomas v. NLRC,

"To say that the return-to-work order effectivity mustwait affirmance in a motion for reconsideration is notonly to emasculate it but indeed to defeat its import, forby then the deadline fixed for the return to work would,in the ordinary course, have already passed and hencecan no longer be affirmed insofar as the time element isconcerned."

The respective liabilities of striking union officers andmembers who failed to immediately comply with the return-to-work order is outlined in Art. 264 of the Labor Code which providesthat any declaration of a strike or lockout after the Secretary ofLabor and Employment has assumed jurisdiction over the labordispute is considered an illegal act. Any worker or union officer whoknowingly participates in a strike defying a return-to-work ordermay, consequently, "be declared to have lost his employmentstatus."

5. EFFECT OF CERTIFICATION AND VIOLATION OF ORDER

Effect of Assumption/Certification Order pursuant to Art. 263 (g):1) Strike/Lockout automatically enjoined



2) Striking/Locked Out employees shall immediately return to work3) Employer shall resume operations and readmit all workers

Effect of Non-Compliance with Assumption/Certification Order:For this purpose the contending parties are STRICTLY

ENJOINED to comply with such orders, prohibitions and/orinjunctions as are issued by the Secretary of Labor and Employmentor the Commission, under pain of immediate disciplinary action,including dismissal or loss of employment status or payment by thelocking-out employer of back wages, damages and other affirmativerelief, even criminal prosecution against either or both of them.(Art. 263, g)

Sarmiento v. Tuico (1988)The law itself provides that "such assumption or certification

shall have the effect of automatically enjoining the intended orimpending strike. If one has already taken place at the time ofassumption or certification, all striking or locked out employeesshall immediately return to work and the employer shallimmediately resume operations and readmit all workers under thesame terms and conditions prevailing before the strike or lockout."

It must be stressed that while one purpose of the return-to-work order is to protect the workers who might otherwise belocked out by the employer for threatening or waging the strike, themore important reason is to prevent impairment of the nationalinterest in case the operations of the company are disrupted by arefusal of the strikers to return to work as directed.

It is also important to emphasize that the return-to-work ordernot so much confers a right as it imposes a duty; and while as aright it may be waived, it must be discharged as a duty even againstthe worker's will.

Not a violation of right against involuntary servitude

So imperative is the order in fact that it is not even consideredviolative of the right against involuntary servitude, as this Courtheld in Kaisahan ng Mga Manggagawa sa Kahoy v. GotamcoSawmills. The worker can of course give up his work, thus severinghis ties with the company, if he does not want to obey the order;but the order must be obeyed if he wants to retain his work even ifhis inclination is to strike.

One other point that must be underscored is that the return-to-work order is issued pending the determination of the legality orillegality of the strike. It is not correct to say that it may be enforcedonly if the strike is legal and may be disregarded if the strike isillegal, for the purpose precisely is to maintain the status quo whilethe determination is being made.

Telefunken Semi-Conductor Employees Union v. CA (2000)It is clear from Art. 263 that the moment the Secretary of

Labor assumes jurisdiction over a labor dispute in an industryindispensable to national interest, such assumption shall have theeffect of automatically enjoining the intended or impending strike.

The rationale of this prohibition is that once jurisdiction overthe labor dispute has been properly acquired by the competentauthority, that jurisdiction should not be interfered with by theapplication of the coercive processes of a strike.

Manila Hotel Employees Assn. v. Manila Hotel Corp. (2007)Returning to work in this situation is not a matter of option or

voluntariness but of obligation. The worker must return to his jobtogether with his co-workers so the operations of the company canbe resumed and it can continue serving the public and promoting itsinterest. This extraordinary authority given to the Secretary of Laboris aimed at arriving at a peaceful and speedy solution to labordisputes, without jeopardizing national interests. Regardlesstherefore of their motives, or the validity of their claims, the strikingworkers must cease and/or desist from any and all acts that tend to,or undermine this authority of the Secretary of Labor, once anassumption and/or certification order is issued. They cannot, forinstance, ignore return-to-work orders, citing unfair labor practiceson the part of the company, to justify their action.

Disini: RULES REGARDING RETURN TO WORK ORDER1) The moment there is Presidential (or by Secretary of Labor)assumption of jurisdiction, whether a return to work order is issued

or not, the return to work order is an integral part of theassumption of jurisidiction. (Sarmiento v. Tuico)2) A return to work order does not violate the Involuntary Servitudeclause (Sarmiento v. Tuico)3) A return-to-work order must be complied with as a matter ofduty not just a right.4) A return-to-work order may be appealed but even pendingappeal the return-to-work order must still be followed.5) According to the Bagiou Colleges case: If there is doubt, take noteof the duty to comply. One merely has to file a motion forclarification.

TAKE NOTE: The extent of authority of the compulsory arbitrationare those that may be necessary to settle the dispute.

6. AWARDS AND ORDERS

Art. 263Strikes, picketing and lockouts.i. The Secretary of Labor and Employment, the Commission or thevoluntary arbitrator shall decide or resolve the dispute, as the casemay be. The decision of the President, the Secretary of Labor andEmployment, the Commission or the voluntary arbitrator shall befinal and executory ten (10) calendar days after receipt thereof bythe parties.

Art. 277i. To ensure speedy labor justice, the periods provided in this Codewithin which decisions or resolutions of labor relations cases ormatters should be rendered shall be mandatory. For this purpose, acase or matter shall be deemed submitted for decision or resolutionupon the filing of the last pleading or memorandum required by therules of the Commission or by the Commission itself, or the LaborArbiter, or the Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director.

Upon expiration of the corresponding period, a certification statingwhy a decision or resolution has not been rendered within the saidperiod shall be issued forthwith by the Chairman of theCommission, the Executive Labor Arbiter, or the Director of theBureau of Labor Relations or Med-Arbiter, or the Regional Director,as the case may be, and a copy thereof served upon the parties.

Despite the expiration of the applicable mandatory period, theaforesaid officials shall, without prejudice to any liability which mayhave been incurred as a consequence thereof, see to it that thecase or matter shall be decided or resolved without any furtherdelay.

Nissan Motors Phils., Inc. v. Sec. of Labor (2006)The company is therefore right in dismissing the subject Union

officers in accordance with Article 264 (a) of the Labor Code, forparticipating in illegal strike in defiance of the assumption ofjurisdiction order by the Labor Secretary.

However, the members of the Union should not be as severelypunished. Dismissal is a harsh penalty as surely they were onlyfollowing orders from their officers. Besides, there is no evidencethat they engaged or participated in the commission of illegalactivities during the said strike. They should thus be reinstated totheir former positions, but without backwages. Their action whichresulted in prejudice to the Company cannot however gounpunished. For the injury that they have collectively inflicted onthe company, they should be disciplined. A one month suspension isa reasonable disciplinary measure which should be deemed servedduring the time they out of their jobs (sic).

Telefunken Semi-Conductor Employees Union v. CA (2000)

SOLE OFFICE OF THE WRIT OF CERTIORARI IS THE CORRECTION OFERRORS OF JURISDICTION INCLUDING THE COMMISSION OF ABUSEOF DISCRETION AMOUNTING TO LACK OF JURISDICTION

In Meralco v. The Honorable Secretary of Labor Leonardo A.Quisumbing. we ruled that:

“The extent of judicial review over the Secretary ofLabor’s arbitral award is not limited to adetermination of grave abuse in the manner of thesecretary’s exercise of his statutory powers. This



Court is entitled to, and must – in the exercise of itsjudicial power – review the substance of theSecretary’s award when grave abuse of discretion isalleged to exist in the award, i.e., in the appreciationof and the conclusions the Secretary drew from theevidence presented.”

However, this Court’s “review of the substance” does notmean a re-calibration of the evidence presented before the DOLEbut only a determination of whether the Secretary of Labor’s awardpassed the test of reasonableness when he arrived at hisconclusions made thereon. The main thrust of a petition forcertiorari under Rule 65 of the Rules of Court is only the correctionof errors of jurisdiction including the commission of grave abuse ofdiscretion amounting to lack or excess of jurisdiction.

However, for this Court to properly exercise the power ofjudicial review over a decision of an administrativeagency, such as the DOLE, it must first be shown that thetribunal, board or officer exercising judicial or quasi-judicial functions has indeed acted without or in excess ofits or his jurisdiction, and that there is no appeal, or anyplain, speedy and adequate remedy in the ordinarycourse of law. In the absence of any showing of lack ofjurisdiction or grave abuse tantamount to lack or excessof jurisdiction, judicial review may not be had over anadministrative agency’s decision. We have gone over therecords of the case at bar and we see no cogent basis tohold that the Secretary of Labor has abused hisdiscretion.

The grant of plenary powers to the Secretary of Labor underArt. 263(g) makes it incumbent for him to bring about soonest, afair and just solution to the differences between the employer andthe employees so that the damage such labor dispute might causeupon the national interest may be minimized as much as possible, ifnot totally averted, by avoiding stoppage of work or any lagging ofthe activities of the industry or the possibility of these contingencieswhich might cause detriment to such national interest.

On Backwages

Since, as correctly found by the Secretary of Labor, the strikerswere not illegally dismissed, the COMPANY is under no obligation topay backwages to them. It is simply inconsistent, nay, absurd, toaward backwages when there is no finding of illegal dismissal(Filflex Industrial and Manufacturing Corporation, 286 SCRA 245)when the record shows that the striking workers did not complywith lawful orders for them to return to work during said periods oftime.

In fact, the Secretary of Labor observed that while “it wasobligatory on the part of both parties to restore, in themeantime, the status quo obtaining in the workplace”,the same “was not possible considering the strikers haddefied the return-to-work Order of this Office”. With suchblatant disregard by the strikers of official edicts orderingtheir “temporary reinstatement”, there is no basis toaward them backwages corresponding to said timeframes. Otherwise, they will recover something theyhave not or could not have earned by their willfuldefiance of the return-to-work order, a patentlyincongruous and unjust situation (Santos v. NationalLabor Relations Commission, 154 SCRA 166).

On Award of Financial Assistance or Separation pay

The same view holds with respect to the award of financialassistance or separation pay. The assumption for granting financialassistance or separation pay, which is, that there is an illegallydismissed employee and that illegally dismissed employee wouldotherwise have been entitled to reinstatement, is not present in thecase at bench.

We are of course aware that financial assistance may beallowed as a measure of social justice in exceptionalcircumstances and as an equitable concession. We arelikewise mindful that financial assistance is allowed onlyin those instances where the employee is validlydismissed for causes other than serious misconduct orthose reflecting on his moral character

o However, the attendant facts show that such

exceptional circumstances do not obtain in theinstant cases to warrant the grant of financialassistance to the striking workers.

o To our mind, the strikers’ open and willfuldefiance of the assumption order datedSeptember 16, 1995 constitute seriousmisconduct as well as reflective of their moralcharacter, hence, granting financial assistanceto them is not and cannot be justified

7. OPTION – SUBMIT CASE VOLUNTARY ARBITRATION AFTERCERTIFICATION

Art. 263Strikes, picketing and lockouts.(h) Before or at any stage of the compulsory arbitration process, theparties may opt to submit their dispute to voluntary arbitration.

8. COMPULSORY ARBITRATION AND LABOR RIGHTS

Philtread Workers Union v. Confessor (1997)Petitioners contend that Article 263 (g) of the Labor

Code violates the workers’ right to strike which is provided forby Section 3, Article XIII of the Constitution. The assailedorder of the Secretary of Labor, which enjoins the strike, is anutter interference of the workers’ right to self-organization,to manage their own affairs, activities and programs, andtherefore is illegal.

Held: The petition is devoid of merit. On the issue of theconstitutionality of Article 263 (g), the same had already beenresolved in Union of Filipro Employees vs. Nestle Philippines, Inc., towit:

“In the case at bar, no law has ever been passed byCongress expressly repealing Articles 263 and 264 of theLabor Code. Neither may the 1987 Constitution beconsidered to have impliedly repealed the said Articlesconsidering that there is no showing that said articles areinconsistent with the said Constitution. Moreover, nocourt has ever declared that the said articles areinconsistent with the 1987 Constitution.

On the contrary, the continued validity and operation ofArticles 263 and 264 of the Labor Code has beenrecognized by no less than the Congress of thePhilippines when the latter enacted into law R.A. 6715,otherwise known as Herrera law, Section 27 of whichamended paragraphs (g) and (l) of Article 263 of theLabor Code.

At any rate, it must be noted that Articles 263 (g) and 264of the Labor Code have been enacted pursuant to thepolice power of the State, which has been defined as thepower inherent in a government to enact laws, withinconstitutional limits, to promote the order, safety, health,morals and general welfare of society (People vs. VeraReyes, 67 Phil. 190).

Article 263 (g) of the Labor Code does not violate the workers’constitutional right to strike. The foregoing article clearly does notinterfere with the workers’ right to strike but merely regulates it,when in the exercise of such right, national interests will beaffected.

The rights granted by the Constitution are not absolute.

They are still subject to control and limitation to ensurethat they are not exercised arbitrarily. The interests ofboth the employers and employees are intended to beprotected and not one of them is given unduepreference.

The Secretary of Labor acts to maintain industrial peace. Thus,his certification for compulsory arbitration is not intended toimpede the workers’ right to strike but to obtain a speedysettlement of the dispute.



11.05 VOLUNTARY ARBITRATION

1. DEFINED

Manila Central Line Corp. v. manila Central Line Free WorkersUnion (1998)

Despite the fact that it agreed with the union to submit theirdispute to the labor arbiter for arbitration, petitioner questions thejurisdiction of the labor arbiter to render the decision in question.Petitioner contends that the policy of the law now is to encourageresort to conciliation and voluntary arbitration as Art 250(e) of theLabor Code provides.

This is what the parties did in this case. After the Board failedto resolve the bargaining deadlock between parties, the union fileda petition for compulsory arbitration in the Arbitration Branch ofthe NLRC. Petitioner joined the petition and the case wassubmitted for decision.

Although the union’s petition was for “compulsoryarbitration,” the subsequent agreement of petitioner tosubmit the matter for arbitration in effect made thearbitration a voluntary one.

Moreover, petitioner must be deemed to be estopped fromquestioning the authority of Labor Arbiter, to act as voluntaryarbitrator and render a decision in this case. Petitioner agreedtogether with the union, to refer their dispute for arbitration tohim. It was only after the decision was rendered that petitionerraised the question of lack of jurisdiction.

2. BASIS FOR VOLUNTARY ARBITRATION AND RATIONALE

1987 Constitution. Art. XIII, Sec. 3x x x The State shall promote the principle of shared responsibilitybetween workers and employers and the preferential use ofvoluntary modes in settling disputes, including conciliation, andshall enforce their mutual compliance therewith to foster industrialpeace.

3. PROCESS ENCOURAGEMENT/PROMOTION

Establishing Machinery Dispute Settlement – Collective BargainingAgreement and Time Frame

Art. 260Grievance Machinery and Voluntary Arbitration.—The parties to a Collective Bargaining Agreement shall includetherein provisions that will ensure the mutual observance of itsterms and conditions. They shall establish a machinery for theadjustment and resolution of grievances arising from theinterpretation of their Collective Bargaining Agreement and thosearising from the interpretation or enforcement of companypersonnel policies.

All grievances submitted to the grievance machinery which are notsettled within 7 month calendar days from the date of its submissionshall automatically be referred to voluntary arbitration prescribed inthe Collective Bargaining Agreement.

x x x

Executive Order 251, Sec. 4:Sec. 4. Section 22 of Executive Order No. 126 is hereby amended toread as follows:

"Sec. 22. National Conciliation and Mediation Board. A NationalConciliation and Mediation Board, herein referred to as the"Board", is hereby created and which shall absorb the conciliationmediation and voluntary arbitration functions of the Bureau ofLabor of Relations in accordance with Section 29 (c) hereof…”x x xA Tripartite Voluntary Arbitration Advisory Council is herebycreated and attached to the National Conciliation and MediationBoard. The Tripartite Voluntary Arbitration Advisory Council shalladvise the National Conciliation Board on matters pertaining to thepromotion of voluntary arbitration as the preferred mode ofdispute settlement.

4. ARBITRABLE ISSUES

Art. 261

Disputes covered in Voluntary Arbitration:Gen. Rule (Art. 261):- Those unresolved grievances arising from the interpretation orimplementation of the CBA;- Also, those arising from the interpretation or enforcement ofcompany personnel policies- Gross violations of CBA provisionExcpeption (Art. 262):- If parties agree, VA may hear and decide all other labor disputesincluding ULP and bargaining deadlock

For purposes of this article, gross violations of CBAshall mean flagrant and/ or malicious refusal tocomply with the economic provisions of suchagreement.

Rights Disputes v. Interest DisputesRights disputes: Claim for violation of a specific right (Arising

from a contract, ex: CBA or company policies).Voluntary Arbitrator has original and exclusivejurisdiction over this matters.

Interest Disputes: These ponders on the questions “what should beincluded in the CBA.” Strictly speaking, theparties may choose a voluntary arbitrator todecide on terms and conditions ofemployment, but that is impracticable becauseit will be a value judgment of the arbitratorand not the parties.

5. ARBITRATOR

SELECTION

How Voluntary Arbitrator is selected (Art. 260):1) As stated in CBA (or selection procedure of a VA), preferably froma list of qualified VA’s accredited by NCMB2) If parties fail to select, the Board (NCMB) shall select VA pursuantto selection procedure as stated in CBA

Art. 260x x x. For this purpose, parties to a Collective Bargaining Agreementshall name and designate in advance a Voluntary Arbitrator or panelof Voluntary Arbitrators,

or include in the agreement the procedure for theselection of such Voluntary Arbitrator or panel ofvoluntary Arbitrators, preferably from the listing ofqualified Voluntary Arbitrators duly accredited bythe Board.

In case the parties fail to select a VoluntaryArbitrators, the Board shall designate the VoluntaryArbitrators, as may be necessary, pursuant to theselection procedure agreed upon in the CollectiveBargaining Agreement, which shall act with thesame force and effect as if the Arbitrator or panel ofArbitrators has been selected by the parties asprescribed.

Manila Central Line Free Workers Union v. Manila Central LineCorp. (1998)

Indeed, the Labor Code formerly provided that if the parties incollective bargaining fail to reach an agreement, the Bureau ofLabor Relations should call them to conciliation meetings and, if itsefforts were not successful, certify the dispute to a labor arbiter forcompulsory arbitrarion. But this was changed by R.A.No. 6715which took effect on March 21, 1989. Art 250(e) of the Labor Codenow provides that if effects of conciliation fail, the Board shall“encourage the parties to submit their case to a voluntaryarbitrator.”

This is what the parties did in this case. After the Board failedto resolve the bargaining deadlock between parties, the union fileda petition for compulsory arbitration in the Arbitration Branch ofthe NLRC. Petitioner joined the petition and the case wassubmitted for decision. Although the union’s petition was for



“compulsory arbitration,” the subsequent agreement of petitionerto submit the matter for arbitration in effect made the arbitration avoluntary one. The essence of voluntary arbitration, after all is thatit is by agreement of the parties, rather than compulsion of law,that a matter is submitted for arbitration. It does not matter thatthe person chosen as arbitrator is a labor arbiter who, under Art217 of the Labor Code, is charged with the compulsory arbitrationof certain labor cases. There is nothing in the law that prohibitsthese labor arbiters from also acting as voluntary arbitrators as longas the parties agree to have him hear and decide their dispute.

JURISDICTION

Disputes covered in Voluntary Arbitration:Gen. Rule (Art. 261):- Those unresolved grievances arising from the interpretation or implementation of the CBA;- Also, those arising from the interpretation or enforcement of company personnel policies- Gross violations of CBA provisionExcpeption (Art. 262):- If parties agree, VA may hear and decide all other labor disputes including ULP and bargaining deadlock

Gross Violations of CBA, defined (Art. 261): flagrant and/or malicious refusal to comply with the economicprovisions of the CBA

Viviero v. Court of appeals (2000)

Termination disputes fall within the jurisdiction of the Labor Arbiter:

Private respondents attempt to justify the conferment ofjurisdiction over the case on the Voluntary Arbitrator on the groundthat the issue involves the proper interpretation andimplementation of the Grievance Procedure found in the CBA.

They point out that when petitioner sought the assistance ofhis Union to avail of the grievance machinery, he in effectsubmitted himself to the procedure set forth in the CBA regardingsubmission of unresolved grievances to a Voluntary Arbitrator.

Held: The argument is untenable. The case is primarily atermination dispute.

It is clear from the claim/assistance request formsubmitted by petitioner to AMOSUP that he waschallenging the legality of his dismissal for lack of causeand lack of due process.

The issue of whether there was proper interpretation andimplementation of the CBA provisions comes into playonly because the grievance procedure provided for in theCBA was not observed after he sought his Union’sassistance in contesting his termination.

Thus, the question to be resolved necessarily springsfrom the primary issue of whether there was a validtermination; without this, then there would be no reasonto invoke the need to interpret and implement the CBAprovisions properly.

A possible exception:

In San Miguel Corp. v. National Labor Relations Commissionthis Court held that the phrase "all other labor disputes" mayinclude termination disputes provided that the agreement betweenthe Union and the Company states "in unequivocal language that[the parties] conform to the submission of termination disputes andunfair labor practices to voluntary arbitration."

Ergo, it is not sufficient to merely say that parties to theCBA agree on the principle that "all disputes" should firstbe submitted to a Voluntary Arbitrator. There is a needfor an express stipulation in the CBA that illegaltermination disputes should be resolved by a VoluntaryArbitrator or Panel of Voluntary Arbitrators, since thesame fall within a special class of disputes that aregenerally within the exclusive original jurisdiction ofLabor Arbiters by express provision of law.

Absent such express stipulation, the phrase "all disputes"should be construed as limited to the areas of conflicttraditionally within the jurisdiction of VoluntaryArbitrators, i.e., disputes relating to contract-interpretation, contract-implementation, orinterpretation or enforcement of company personnelpolicies. Illegal termination disputes - not falling within

any of these categories - should then be considered as aspecial area of interest governed by a specific provisionof law.

Ludo and Luym Corp v. Saornido (2003)

Arguments:

Petitioner contends that the appellate court gravely erredwhen it upheld the award of benefits which were beyond the termsof submission agreement. Petitioner asserts that the arbitratormust confine its adjudication to those issues submitted by theparties for arbitration, which in this case is the sole issue of the dateof regularization of the workers. Hence, the award of benefits bythe arbitrator was done in excess of jurisdiction.

On the matter of the benefits, respondents argue that thearbitrator is empowered to award the assailed benefits becausenotwithstanding the sole issue of the date of regularization,standard companion issues on reliefs and remedies are deemedincorporated. Otherwise, the whole arbitration process would berendered purely academic and the law creating it inutile.

Resolution:

The jurisdiction of Voluntary Arbitrator or Panel of VoluntaryArbitrators and Labor Arbiters is clearly defined and specificallydelineated in the Labor Code (Art. 217 for LA, Art. 261-262 for VA).

While a voluntary arbitrator is not part of the governmentalunit or labor department’s personnel, said arbitrator rendersarbitration services provided for under labor laws. Generally, thearbitrator is expected to decide only those questions expresslydelineated by the submission agreement.

Nevertheless, the arbitrator can assume that he has thenecessary power to make a final settlement sincearbitration is the final resort for the adjudication ofdisputes.

In one case, the SC stressed that “xxx the VoluntaryArbitrator had plenary jurisdiction and authority tointerpret the agreement to arbitrate and to determinethe scope of his own authority subject only, in a propercase, to the certiorari jurisdiction of this Court. TheArbitrator, as already indicated, viewed his authority asembracing not merely the determination of the abstractquestion of whether or not a performance bonus was tobe granted but also, in the affirmative case, the amountthereof.

By the same token, the issue of regularization should beviewed as two-tiered issue. While the submission agreementmentioned only the determination of the date or regularization,law and jurisprudence give the voluntary arbitrator enoughleeway of authority as well as adequate prerogative to accomplishthe reason for which the law on voluntary arbitration was created– speedy labor justice. It bears stressing that the underlying reasonwhy this case arose is to settle, once and for all, the ultimatequestion of whether respondent employees are entitled to higherbenefits. To require them to file another action for payment ofsuch benefits would certainly undermine labor proceedings andcontravene the constitutional mandate providing full protection tolabor.

PROCEDURE

Art. 262-AProcedures -The voluntary Arbitrators or panel of Voluntary Arbitrators shallhave the power to hold hearings, receive evidences and takewhatever action is necessary to resolve the issue or issues subjectof dispute, including efforts to effect a voluntary settlementbetween parties.

All parties to the dispute shall be entitled to attend the arbitrationproceedings. The attendance of any third party or the exclusion ofany witness from the proceedings shall be determined by theVoluntary Arbitrator or panel of Voluntary Arbitrators. Hearing maybe adjourned for a cause or upon agreement by the parties.

Unless the parties agreed otherwise, it shall be mandatory for theVoluntary Arbitrators or panel of Voluntary Arbitrators to render anaward or decision within twenty ?(20) calendar days from the dateof submission of the dispute to voluntary arbitration.



The award or decision shall contain the facts and the law on whichit is based. It shall be final and executory after ten (10) calendardays from receipt of the copy of the award or its decision by theparties. Upon motion of any interested party, the VoluntaryArbitrator or panel of Voluntary Arbitrators or the Labor Arbiter inthe region where the movant resides, in case of the absence orincapacity of the voluntary arbitrator or panel of voluntaryarbitrators for any reason, may issue a writ of execution requiringwither the sheriff of the Commission or regular Courts or any publicofficial whom the parties may designate in the submissionagreement to execute the final decision, order, or award.

NATURE OF OFFICE AND FUNCTION

United Kimberly-Clark Employees Union v. Kimberly-Clark Phils.Inc. (2006)

As a general proposition, an arbitrator is confined to theinterpretation and application of the collective bargainingagreement. He does not sit to dispense his own brand of industrialjustice: his award is legitimate only in so far as it draws its essencefrom the CBA.

The VA is not merely to rely on the cold and cryptic words onthe face of the CBA but is mandated to discover the intention of theparties.

Nippon Paint Employees Union v. CA (2004)In the case of Luzon Development Bank vs. Association of

Luzon Development Bank Employees, this Court ruled that avoluntary arbitrator partakes of the nature of a “quasi-judicialinstrumentality” and is within the ambit of Section 9(3) of theJudiciary Reorganization Act, as amended. As such, the decisions ofa voluntary arbitrator fall within the exclusive appellate jurisdictionof the Court of Appeals.

6. AWARDS AND ORDERS

Art. 262-Ax x xThe award or decision shall contain the facts and the law on whichit is based. It shall be final and executory after ten (10) calendardays from receipt of the copy of the award or its decision by theparties.Upon motion of any interested party,

the Voluntary Arbitrator or panel of VoluntaryArbitrators or the Labor Arbiter in the region wherethe movant resides, in case of the absence orincapacity of the voluntary arbitrator or panel ofvoluntary arbitrators for any reason,

may issue a writ of execution requiring the sheriff ofthe Commission or regular Courts or any publicofficial whom the parties may designate in thesubmission agreement to execute the final decision,order, or award.

Davao Integrated v. Abarquez (1993)Petitioner-company's objection to the authority of the

Voluntary Arbitrator to direct the commutation of the unenjoyedportion of the sick leave with pay benefits of intermittent workersin his decision is misplaced. Article 261 of the Labor Code is clear.

The questioned directive of the herein public respondentis the necessary consequence of the exercise of hisarbitral power as Voluntary Arbitrator under Article 261of the Labor Code "to hear and decide all unresolvedgrievances arising from the interpretation orimplementation of the Collective Bargaining Agreement."

We, therefore, find that no grave abuse of discretion wascommitted by public respondent in issuing the award(decision). Moreover, his interpretation of Sections 1 and3, Article VIII of the 1989 CBA cannot be faulted with andis absolutely correct.

Citibank Employees Union v. MOLE (1980)The award of the arbitrator in this case is not to be equated

with a judicial decision.In effect, when in relation to a controversy as to working

conditions, which necessarily include the amount of wages,allowances, bonuses, overtime pay, holiday pay, etc., the parties

submit their differences to arbitration, they do not seek any judicialpronouncement technically as such:

they are merely asking the arbitrator to fix for them whatwould be the fair and just condition or term regarding thematter in dispute that should govern further collectivebargaining relations between them.

Stated differently, the arbitrator's award when stipulatedby the parties to be conclusive becomes part and parcelof the CBA. Viewed in this sense, which We are fullyconvinced is most consistent with the principles ofcollective bargaining, the subsequent or superveningfacts referred to by the Solicitor General consisting ofacts of none other than the respondent Minister may notbe invoked to alter, modify, reform, much less abrogate,the new terms, so to speak, of the collective bargaininginserted by virtue of the award of the arbitrator. To dootherwise would violate the prescription of theConstitution against impairment of the obligation ofcontracts.

We hold that regardless of any law anterior or posterior to theArbitrator's award, the collective bargaining agreement in this casehas been correspondingly amended in a manner that is unalterable,immovable and immutable like the rock of Gibraltar, during thelifetime of the said collective bargaining agreement.

See: Ludo and Luym v. Saornido, supra

7. FINALITY AND EXECUTION OF AWARDS Art. 262-A: Award or decision of the voluntaryarbitrator shall be final and executory after 10 days fromreceipt of the copy of the award or decision by theparties.

Imperial Textile Miles, etc. Calica (1992)When the parties submitted their grievance to arbitration,

they expressly agreed that the decision of the Voluntary Arbitratorwould be final, executory and unappealable.

In fact, even without this stipulation, the first decisionhad already become so by virtue of Article 263 of theLabor Code making voluntary arbitration awards ordecisions final and executory.

In the case of The Consolidated Bank & Trust Corporation(SOLIDBANK) v. Bureau of Labor Relations, et al., this Court heldthat the Voluntary Arbitrator lost jurisdiction over the casesubmitted to him the moment he rendered his decision. Therefore,he could no longer entertain a motion for reconsideration of thedecision for its reversal or modification. Thus:

By modifying the original award, respondent arbitratorexceeded his authority as such, a fact he was well awareof, as shown by his previous Resolution of Inhibitionwherein he refused to act on the Union's motion forreconsideration of the award or decision.

Coca-Cola v. Coca-Cola (2005)It is a hornbook rule that once a judgment has become final

and executory, it may no longer be modified in any respect, even ifthe modification is meant to be an erroneous conclusion of fact orlaw, and regardless of whether the modification is attempted to bemade by the court rendering it or by the highest court of the land,as what remains to be done is the purely ministerial enforcement orexecution of the judgment.

The doctrine of finality of judgment is grounded onfundamental considerations of public policy and sound practice thatat the risk of occasional errors, the judgment of adjudicating bodiesmust become final and executory on some definite date fixed bylaw. In the more recent case of DBP v. NLRC, the Supreme Courtreiterated that the doctrine of immutability of final judgment isadhered to by necessity notwithstanding occasional errors that mayresult thereby, since litigations must somehow come to an end forotherwise, it would “be even more intolerable than the wrong andinjustice it is designed to correct.”

Rule VII, Section 1 of the “Procedural Guidelines in theConduct of Voluntary Arbitration Proceedings” provides thekey. Therein, what constitutes the voluntary arbitrator’s decision(and, by extension, that of the Panel of voluntary arbitrators) isdefined with precision, to wit:



Section 1. Decision Award. -- The final arbitral disposition ofissue/s submitted to voluntary arbitration is the Decision. Thedisposition may take the form of a dismissal of a claim or grant ofspecific remedy, either by way of prohibition of particular acts orspecific performance of particular acts. In the latter case thedecision is called an Award.

In herein case, the Decision of the Panel was in the form of adismissal of petitioner’s complaint. Naturally, this dismissal wascontained in the main decision and not in the dissentingopinion. Thus, under Section 6, Rule VII of the same guidelinesimplementing Article 262-A of the Labor Code, this Decision, as amatter of course, would become final and executory after ten (10)calendar days from receipt of copies of the decision by the partieseven without receipt of the dissenting opinion unless, in themeantime, a motion for reconsideration or a petition for review tothe Court of Appeals under Rule 43 of the Rules of Court is filedwithin the same 10-day period.

8. APPEAL

Luzon Development Bank v. Assoc of Luzon Dev’t Employees(1995)

The Jurisdiction conferred by law on a voluntary arbitrator or apanel of such arbitrators is quite limited compared to the originaljurisdiction of the labor arbiter and the appellate jurisdiction of theNLRC for that matter.

The state of our present law relating to voluntary arbitrationprovides that "the award or decision of the Voluntary Arbitrator x xx shall be final and executory after ten (10) calendar days fromreceipt of the copy of the award or decision by the parties,"

while the "decision, awards, or orders of the LaborArbiter are final and executory unless appealed to theCommission by any or both parties within ten (10)calendar days from receipt of such decisions, awards, ororders."

Hence, while there is an express mode of appeal from thedecision of a labor arbiter, Republic Act No. 6715 is silentwith respect to an appeal from the decision of avoluntary arbitrator.

Assuming arguendo that the voluntary arbitrator or the panelof voluntary arbitrators may not strictly be considered as a quasi-judicial agency, board or commission, still both he and the panel arecomprehended within the concept of a "quasi-judicialinstrumentality."

A fortiori, the decision or award of the voluntary arbitrator orpanel of arbitrators should likewise be appealable to the Court ofAppeals, in line with the procedure outlined in RevisedAdministrative Circular No. 1-95, just like those of the quasi-judicialagencies, boards and commissions enumerated therein.

This would be in furtherance of, and consistent with, theoriginal purpose of Circular No. 1-91 to provide a uniformprocedure for the appellate review of adjudications of all quasi-judicial entities18 not expressly excepted from the coverage of Sec.9 of B.P. 129 by either the Constitution or another statute.

In effect, this equates the award or decision of the voluntaryarbitrator with that of the regional trial court. Consequently, in apetition for certiorari from that award or decision, the Court ofAppeals must be deemed to have concurrent jurisdiction with theSupreme Court. As a matter of policy, this Court shall henceforthremand to the Court of Appeals petitions of this nature for properdisposition.

Unicraft Industries Int’l v. CA (2001)Both parties acknowledge that the proceedings before the

Voluntary Arbitrator have not been completed.

Despite this, the Court of Appeals rendered the assailedresolution ordering the immediate execution of theaward of separation pay and attorney’s fees.

Prior to that, Voluntary Arbitrator Calipay filed acomment contending that he had lost jurisdiction overthe case after he rendered judgment. While under thelaw decisions of voluntary arbitrators are accordedfinality, the same may still be subject to review, such ashere where there was a violation of petitioners’ right todue process and to be heard.

The right of due process is fundamental in our legal systemand we adhere to this principle not for reasons of convenience ormerely to comply with technical formalities but because of a strongconviction that every man must have his day in court.

At this juncture, it may not be amiss to restate our previousreminder to labor tribunals in the weighing of the rights andinterest of employers and employees, viz:

While the intendment of our laws is to favor theemployee, it in no way implies that the employer isnot entitled to due process. For a tribunal such asthe NLRC to wantonly disregard the employer’sconstitutional right to be heard is a matter thatcause great concern to the Court. Such an actioncan only result in public mistrust of our entire legalsystem, and we strongly remind the NLRC of theirduty to uphold an inspire confidence in the same.

The Court of Appeals, thus, committed grave abuse ofdiscretion amounting to lack of jurisdiction when it ordered theimmediate execution of the Voluntary Arbitrator’s award ofseparation pay and attorney’s fees, notwithstanding that the samewas null and void for violation of petitioner’s right to due process oflaw.

9. COSTS

Art. 262-B. Cost of Voluntary Arbitration and Voluntary Arbitratorsfee.—The parties to a Collective Bargaining Agreement shall providetherein a proportionate sharing scheme on the cost of the voluntaryarbitration including the Voluntary Arbitrators fee.

The fixing of the fee of the Voluntary Arbitrators, whethershouldered wholly by the parties or subsidized by the specialvoluntary arbitration fund, shall take into account the followingfactors:

a. Nature of the caseb. Time consumed in hearing the casec. Professional Standing of the Voluntary Arbitratord. Capacity to Pay of the parties.

SUMMARY NOTES

Definition:

CONCILIATION – process whereby the parties cometogether to settle labor disputes.

ARBITRATION – process whereby an impartial thirdparty is either chosen by the parties themselves(voluntary) or chosen for them (compulsory) to aid in thesettlement of the labor dispute.

Agencies involved:1) Conciliation Proceedings – NCMB (Art. 212, c)2) Arbitration Proceedings

– if compulsory, by Labor Arbiter (initiated bySec. of Labor)

– if voluntary, by a Voluntary Arbitrator (VA) or apanel of VA’s

Kinds of Conciliation meetings:1) As part of the collective bargaining process (Art. 250)2) As preventive mediation cases (IRR, Book V, Rule XXII,Sec. 1)3) As part of disputes involving notices of strike or lockout(Art. 263, e)

Kinds of Arbitration Proceedings:1) Compulsary (Art. 263, g) – process of settlement oflabor disputes by a government agency which has theauthority to investigate and to make an award which isbinding on all the parties (PAL v. NLRC, 1989)2) Voluntary (Art. 260) – contractual proceedings wherethe parties to a labor dispute select a judge (arbitrator) oftheir own choice and by consent, submit their controversyto him for determination.



Compulsary Arbitration:1) Applies to labor disputes in industries indispensable tonational interest2) Initiated by either the Secretary of Labor / thePresident of the Philippines3) Under the jurisdiction of Secretary of Labor / NLRC(only if certified by the Secretary of Labor to NLRC)

REQUISITES FOR A COMPULSARY ARBITRATION(Art. 263, g):

- there exists a LABOR DISPUTE- causing or likely to cause a STRIKE/LOCK-OUT- in an INDUSTRY INDISPENDSABLE TO THE

NATIONAL INTEREST

The Secretary of Labor and Employment MAY:1) assume jurisdiction over the dispute and decide it OR2) certify the same to the Commission (NLRC) forCOMPULSORY ARBITRATION.

When sitting in a compulsory arbitration certified to bythe Secretary of Labor, the NLRC is:- not sitting as a judicial court- but as an administrative body charged with the duty toimplement the order of the Secretary.(Union of Filipro Employees v. Nestle Philippines, 1990)

Effect of Assumption/Certification Order pursuantto Art. 263 (g):1) Strike/Lockout automatically enjoined2) Striking/Locked Out employees shall immediatelyreturn to work3) Employer shall resume operations and readmit allworkers

Effect of Non-Compliance withAssumption/Certification Order:

…Immediate disciplinary action, including dismissal orloss of employment status or payment by the locking-outemployer of back wages, damages and other affirmativerelief, even criminal prosecution against either or both ofthem. (Art. 263, g)

Disputes covered in Voluntary Arbitration:Gen. Rule (Art. 261):- Those unresolved grievances arising from theinterpretation or implementation of the CBA;- Also, those arising from the interpretation orenforcement of company personnel policies- Gross violations of CBA provisionExcpeption (Art. 262):- If parties agree, VA may hear and decide all other labordisputes including ULP and bargaining deadlock

Gross Violations of CBA, defined (Art. 261): flagrant and/or malicious refusal to comply with theeconomic provisions of the CBA

Grievance Machinery/Voluntary ArbitrationProcedure:1) Regarding interpretation or implementation of the CBA,the dispute is referred to the Grievance MachineryNote: Procedure is pre-determined by the parties2) If unresolved after 7 days, the dispute is put up forVoluntary Arbitration.Note: Must be agreed upon by the parties first

How Voluntary Arbitrator is selected (Art. 260):1) As stated in CBA (or selection procedure of a VA),preferably from a list of qualified VA’s accredited by NCMB2) If parties fail to select, the Board (NCMB) shall selectVA pursuant to selection procedure as stated in CBA

As per Art. 262-A:Gen. Rule: VA must render an award or decision on alabor dispute within 20 days from submission toarbitrationException: Parties agree otherwise



ARTICLE 234 (LABOR CODE) vis-à-vis RA 9481

Article 234 LC As amended by RA 9481

(May 2007)

Requirements of registration.

Any applicant labororganization, association orgroup of unions or workers shallacquire legal personality andshall be entitled to the rightsand privileges granted by law tolegitimate labor organizationsupon issuance of the certificateof registration based on thefollowing requirements.

a. Fifty pesos (P50.00)registration fee;

b. The names of itsofficers, theiraddresses, theprincipal address ofthe labororganization, theminutes of theorganizationalmeetings and the listof the workers whoparticipated in suchmeetings;

c. The names of all itsmembers comprisingat least twentypercent (20%) of allthe employees in thebargaining unit whereit seeks to operate;(As amended byExecutive Order No.111, December 24,1986)

d. If the applicant unionhas been in existencefor one or moreyears, copies of itsannual financialreports; and

e. Four (4) copies of theconstitution and by-laws of the applicantunion, minutes of itsadoption orratification, and thelist of the memberswho participated init. (As amended byBatas PambansaBilang 130, August21, 1981)

Requirements of Registration.

A federation, national union orindustry or trade union centeror an independent union shallacquire legal personality andshall be entitled to the rightsand privileges granted by law tolegitimate labor organizationsupon issuance of the certificateof registration based on thefollowing requirements:

a. Fifty pesos (P50.00)registration fee;

b. The names of itsofficers, theiraddresses, the

principal address of thelabor organization,

the minutes of theorganizational meetings

and the list of theworkers who participated

in such meetings;

(c) In case the applicantis an independentunion, the names ofall its memberscomprising at leasttwenty percent (20%)of all the employeesin the bargaining unitwhere it seeks tooperate;

(d) If the applicant unionhas been in existencefor one or moreyears, copies of itsannual financialreports; and

(e) Four copies of theconstitution and by-laws of the applicantunion, minutes of itsadoption orratification, and thelist of the memberswho participated in it.

NEW PROVISION

ART. 234-A. Charteringand Creation of a Local Chapter.— A duly registered federationor national union may directlycreate a local chapter by issuing

a charter certificate indicatingthe establishment of the localchapter. The chapter shallacquire legal personality onlyfor purposes of filing a petitionfor certification election fromthe date it was issued a chartercertificate.

The chapter shall be entitled toall other rights and privileges ofa legitimate labor organizationonly upon the submission of thefollowing documents in additionto its charter certificate:

(a) The names of thechapter's officers,their

addresses, and theprincipal office of thechapter;

and(b) The chapter's

constitution and by-laws: Provided,

That where the chapter'sconstitution and by-laws

are the same as that ofthe federation or the

national union, this factshall be indicated

accordingly.

The additional supportingrequirements shall be certifiedunder oath by the secretary ortreasurer of the chapter andattested by its president.

Article 238 As amended

Cancellation of registration;appeal.

The certificate of registration ofany legitimate labororganization, whether nationalor local, shall be cancelled bythe Bureau if it has reason tobelieve, after due hearing, thatthe said labor organization nolonger meets one or more ofthe requirements hereinprescribed.

[The Bureau upon approval ofthis Code shall immediatelyinstitute cancellationproceedings and take suchother steps as may be necessaryto restructure all existingregistered labor organizations inaccordance with the objectiveenvisioned above.] (Repealedby Executive Order No. 111,December 24, 1986)

Cancellation of Registration.

The certificate of registration ofany legitimate labororganization, whether nationalor local, may be cancelled by theBureau, after due hearing, onlyon the grounds specified inArticle 239 hereof.

NEW PROVISION

ART. 238-A. Effect of aPetition for Cancellation ofRegistration. — A petition forcancellation of unionregistration shall not suspendthe proceedings for certification



election nor shall it prevent thefiling of a petition forcertification election.

In case of cancellation, nothingherein shall restrict the right ofthe union to seek just andequitable remedies in theappropriate courts.


Grounds for cancellation ofunion registration.

The following shall constitutegrounds for cancellation of unionregistration:

a. Misrepresentation,false statement or fraudin connection with theadoption or ratificationof the constitution andby-laws or amendmentsthereto, the minutes ofratification and the listof members who tookpart in the ratification;

b. Failure to submit thedocuments mentionedin the precedingparagraph within thirty(30) days from adoptionor ratification of theconstitution and by-laws or amendmentsthereto;

c. Misrepresentation,false statements orfraud in connectionwith the election ofofficers, minutes of theelection of officers, thelist of voters, or failureto submit thesedocuments togetherwith the list of thenewlyelected/appointedofficers and their postaladdresses within thirty(30) days from election;

d. Failure to submit theannual financial reportto the Bureau withinthirty (30) days afterthe closing of everyfiscal year andmisrepresentation, falseentries or fraud in thepreparation of thefinancial report itself;

e. Acting as a laborcontractor or engagingin the "cabo" system, orotherwise engaging inany activity prohibitedby law;

f. Entering into collective

Grounds for Cancellation of UnionRegistration.

The following may constitute groundsfor cancellation of union registration:

(a) Misrepresentation, falsestatement or fraud inconnection with theadoption or ratificationof the constitution andby-laws or amendmentsthereto, the minutes ofratification, and the listof members who tookpart in the ratification;

(b) Misrepresentation, falsestatements or fraud inconnection with theelection of officers,minutes of the electionof officers, and the list ofvoters;

(c)Voluntary dissolution bythe members.

bargaining agreementswhich provide termsand conditions ofemployment belowminimum standardsestablished by law;

g. Asking for or acceptingattorney’s fees ornegotiation fees fromemployers;

h. Other than formandatory activitiesunder this Code,checking off specialassessments or anyother fees without dulysigned individualwritten authorizationsof the members;

i. Failure to submit list ofindividual members tothe Bureau once a yearor whenever requiredby the Bureau; and

j. Failure to comply withrequirements underArticles 237 and 238.

1) NEW PROVISION

ART. 239-A. VoluntaryCancellation of Registration. — Theregistration of a legitimate labororganization may be cancelled by theorganization itself: Provided, That atleast two-thirds, of its generalmembership votes, in a meeting dulycalled for that purpose to dissolve theorganization: Provided, further, Thatan application to cancel registration isthereafter submitted by the board ofthe organization, attested to by thepresident thereof.

NEW PROVISION

ART. 242-A. ReportorialRequirements. — The followingare documents required to besubmitted to the Bureau by thelegitimate labor organizationconcerned:

(a) Its constitution and by-laws, or amendmentsthereto, the minutes ofratification, and the listof members who tookpart in the ratification ofthe constitution and by-laws within thirty (30)days from adoption orratification of theconstitution and by-lawsor amendments thereto;

(b) Its list of officers,minutes of the electionof officers, and list ofvoters within thirty (30)



days from election;(c) Its annual financial

report within thirty (30)days after the close ofevery fiscal year; and

(d) Its list of members atleast once a year orwhenever required bythe Bureau.

Failure to comply with the aboverequirements shall not be a groundfor cancellation of unionregistration but shall subject theerring officers or members tosuspension, expulsion frommembership, or any appropriatepenalty.

Article 245 As amendedIneligibility of managerialemployees to join any labororganization; right of

Managerial employees are noteligible to join, assist or formany labor organization.Supervisory employees shall notbe eligible for membership in alabor organization of the rank-and-file employees but mayjoin, assist or form separatelabor organizations of theirown. (As amended by Section18, Republic Act No. 6715,March 21, 1989)

Ineligibility of ManagerialEmployees to Join any LaborOrganization; Right ofSupervisory Employees.

Managerial employees are noteligible to join, assist or formany labor organization.Supervisory employees shall notbe eligible for membership inthe collective bargaining unit ofthe rank-and-file employees butmay join, assist or form separatecollective bargaining unitsand/or legitimate labororganizations of their own. Therank and file union and thesupervisors' union operatingwithin the same establishmentmay join the same federation ornational union.

NEW PROVISION

ART. 245-A. Effect ofInclusion as Members ofEmployees Outside theBargaining Unit. — Theinclusion as union members ofemployees outside thebargaining unit shall not be aground for the cancellation ofthe registration of the union.Said employees areautomatically deemed removedfrom the list of membership ofsaid union.

Article 256 LC As amendedRepresentation issue inorganized establishments.

In organized establishments,when a verified petitionquestioning the majority statusof the incumbent bargainingagent is filed before theDepartment of Labor andEmployment within the sixty-day period before the expirationof the collective bargainingagreement, the Med-Arbitershall automatically order anelection by secret ballot whenthe verified petition issupported by the written

Representation Issue inOrganized Establishments.

In organized establishments,when a verified petitionquestioning the majority statusof the incumbent bargainingagent is filed by any legitimatelabor organization including anational union or federationwhich has already issued acharter certificate to its localchapter participating in thecertification election or a localchapter which has been issued acharter certificate by thenational union or federation

consent of at least twenty-fivepercent (25%) of all theemployees in the bargainingunit to ascertain the will of theemployees in the appropriatebargaining unit. To have a validelection, at least a majority ofall eligible voters in the unitmust have cast their votes. Thelabor union receiving themajority of the valid votes castshall be certified as theexclusive bargaining agent of allthe workers in the unit. Whenan election which provides forthree or more choices results inno choice receiving a majority ofthe valid votes cast, a run-offelection shall be conductedbetween the labor unionsreceiving the two highestnumber of votes: Provided, thatthe total number of votes for allcontending unions is at leastfifty percent (50%) of thenumber of votes cast.

At the expiration of the freedomperiod, the employer shallcontinue to recognize themajority status of theincumbent bargaining agentwhere no petition forcertification election is filed. (Asamended by Section 23,Republic Act No. 6715, March21, 1989)

before the Department of Laborand Employment within thesixty (60)-day period before theexpiration of the collectivebargaining agreement, the Med-Arbiter shall automatically orderan election by secret ballotwhen the verified petition issupported by the writtenconsent of at least twenty-fivepercent (25%) of all theemployees in the bargainingunit to ascertain the will of theemployees in the appropriatebargaining unit. To have a validelection, at least a majority ofall eligible voters in the unitmust have cast their votes. Thelabor union receiving themajority of the valid votes castshall be certified as theexclusive bargaining agent of allthe workers in the unit. Whenan election which provides forthree or more choices results inno choice receiving a majority ofthe valid votes cast, a run-offelection shall be conductedbetween the labor unionsreceiving the two highestnumber of votes: Provided, Thatthe total number of votes for allcontending unions is at leastfifty percent (50%) of thenumber of votes cast. In caseswhere the petition was filed bya national union or federation,it shall not be required todisclose the names of the localchapter's officers and members.

At the expiration of the freedomperiod, the employer shallcontinue to recognize themajority status of theincumbent bargaining agentwhere no petition forcertification election is filed.

Article 257 As AmendedPetitions in unorganizedestablishments.

In any establishment wherethere is no certified bargainingagent, a certification electionshall automatically beconducted by the Med-Arbiterupon the filing of a petition by alegitimate labor organization.(As amended by Section 24,Republic Act No. 6715, March21, 1989)

Petitions in UnorganizedEstablishments.

In any establishment wherethere is no certified bargainingagent, a certification electionshall automatically beconducted by the Med-Arbiterupon the filing of a petition byany legitimate labororganization, including anational union or federationwhich has already issued acharter certificate to itslocal/chapter participating inthe certification election or alocal/chapter which has beenissued a charter certificate bythe national union orfederation. In cases where thepetition was filed by a nationalunion or federation, it shall notbe required to disclose thenames of the local chapter'sofficers and members.



NEW PROVISION

ART. 258-A. Employeras Bystander. — In all cases,whether the petition forcertification election is filed byan employer or a legitimatelabor organization, theemployer shall not beconsidered a party thereto witha concomitant right to oppose apetition for certificationelection. The employer'sparticipation in suchproceedings shall be limited to:(1) being notified or informed ofpetitions of such nature; and (2)submitting the list of employeesduring the pre-electionconference should the Med-Arbiter act favorably on thepetition


National Labor RelationsCommission.

There shall be a National LaborRelations Commission whichshall be attached to theDepartment of Labor andEmployment for program andpolicy coordination only,composed of a Chairman andfourteen (14) Members.

Five (5) members each shall bechosen from among thenominees of the workers andemployers organizations,respectively. The Chairman andthe four (4) remaining membersshall come from the publicsector, with the latter to bechosen from among therecommendees of the Secretaryof Labor and Employment.

Upon assumption into office,the members nominated by theworkers and employersorganizations shall divestthemselves of any affiliationwith or interest in thefederation or association towhich they belong.

The Commission may sit enbanc or in five (5) divisions, eachcomposed of three (3)members. Subject to thepenultimate sentence of thisparagraph, the Commissionshall sit en banc only forpurposes of promulgating rulesand regulations governing thehearing and disposition of casesbefore any of its divisions andregional branches, andformulating policies affecting itsadministration and operations.

National Labor RelationsCommission.

There shall be a National LaborRelations Commission whichshall be attached to theDepartment of Labor andEmployment solely for programand policy coordination,composed of a Chairman andtwenty-three (23) members.

Eight (8) members each shall bechosen only from among thenominees of the workers andemployers organizations,respectively. The Chairman andthe seven (7) remainingmembers shall come from thepublic sector, with the latter tobe chosen preferably fromamong the incumbent laborarbiters.

Upon assumption into office,the members nominated by the

workers and employersorganizations shall divest

themselves of any affiliationwith or interest in the

federation or association towhich they belong.

The Commission may sit enbanc or in eight (8) divisions,each composed of three (3)members. The Commission shallsit en banc only for purposes ofpromulgating rules andregulations governing thehearing and disposition of casesbefore any of its divisions andregional branches andformulating policies affecting itsadministration and operations.The Commission shall exerciseits adjudicatory and all otherpowers, functions and dutiesthrough its divisions. Of the

The Commission shall exerciseits adjudicatory and all otherpowers, functions, and dutiesthrough its divisions. Of the five(5) divisions, the first, secondand third divisions shall handlecases coming from the NationalCapital Region and the parts ofLuzon; and the fourth and fifthdivisions, cases from the Visayasand Mindanao, respectively;Provided that the Commissionsitting en banc may, ontemporary or emergency basis,allow cases within thejurisdiction of any division to beheard and decided by any otherdivision whose docket allowsthe additional workload andsuch transfer will not exposelitigants to unnecessaryadditional expense. Thedivisions of the Commissionshall have exclusive appellatejurisdiction over cases withintheir respective territorialjurisdictions. [As amended byRepublic Act No. 7700].

The concurrence of two (2)Commissioners of a divisionshall be necessary for thepronouncement of judgment orresolution. Whenever therequired membership in adivision is not complete and theconcurrence of two (2)commissioners to arrive at ajudgment or resolution cannotbe obtained, the Chairman shalldesignate such number ofadditional Commissioners fromthe other divisions as may benecessary.

The conclusions of a division onany case submitted to it fordecision shall be reached inconsultation before the case isassigned to a member for thewriting of the opinion. It shall bemandatory for the division tomeet for purposes of theconsultation ordained herein. Acertification to this effect signedby the Presiding Commissionerof the division shall be issuedand a copy thereof attached tothe record of the case andserved upon the parties.

The Chairman shall be thePresiding Commissioner of thefirst division and the four (4)other members from the publicsector shall be the PresidingCommissioners of the second,third, fourth and fifth divisions,respectively. In case of theeffective absence or incapacityof the Chairman, the PresidingCommissioner of the seconddivision shall be the ActingChairman.

The Chairman, aided by the

eight (8) divisions, the first,second, third, fourth, fifth andsixth divisions shall handle casescoming from the NationalCapital Region and other partsof Luzon, and the seventh andeighth divisions, cases fromVisayas and Mindanao,respectively: Provided, That theCommission sitting en bancmay, on temporary oremergency basis, allow caseswithin the jurisdiction of anydivision to be heard anddecided by any other divisionwhose docket allows theadditional workload and suchtransfer will not expose litigantsto unnecessary additionalexpense. The divisions of theCommission shall have exclusiveappellate jurisdiction over caseswithin their respectiveterritorial jurisdiction.

The concurrence of two (2)Commissioners of a divisionshall be necessary for thepronouncement of judgment orresolution. Whenever therequired membership in adivision is not complete and theconcurrence of two (2)Commissioners to arrive at ajudgment or resolution cannotbe obtained, the Chairman shalldesignate such number ofadditional Commissioners fromthe other divisions as may benecessary.

The conclusions of a division onany case submitted to it fordecision shall be reached inconsultation before the case isassigned to a member for thewriting of the opinion. It shall bemandatory for the division tomeet for purposes of theconsultation ordained herein. Acertification to this effect signedby the Presiding Commissionerof the division shall be issued,and a copy thereof attached tothe record of the case andserved upon the parties.

The Chairman shall be thePresiding Commissioner of thefirst division, and the seven (7)other members from the publicsector shall be the PresidingCommissioners of the second,third, fourth, fifth, sixth,seventh and eighth divisions,respectively. In case of theeffective absence or incapacityof the Chairman, the PresidingCommissioner of the seconddivision shall be the ActingChairman.

The Chairman, aided by theExecutive Clerk of theCommission, shall haveexclusive administrativesupervision over theCommission and its regional



Executive Clerk of theCommission, shall haveadministrative supervision overthe Commission and its regionalbranches and all its personnel,including the Executive LaborArbiters and Labor Arbiters.

The Commission, when sittingen banc shall be assisted by thesame Executive Clerk and, whenacting thru its Divisions, by saidExecutive Clerks for the second,third, fourth and fifth Divisions,respectively, in the performanceof such similar or equivalentfunctions and duties as aredischarged by the Clerk of Courtand Deputy Clerks of Court ofthe Court of Appeals. (Asamended by Section 5, RepublicAct No. 6715, March 21, 1989)

branches and all its personnel,including the Labor Arbiters.

The Commission, when sittingen banc, shall be assisted by

the same Executive Clerk, and,when acting thru its Divisions,by said Executive Clerk for its

first division and seven (7)other Deputy Executive Clerksfor the second, third, fourth,

fifth, sixth, seventh and eighthDivisions, respectively, in the

performance of such similar orequivalent functions and dutiesas are discharged by the Clerkof Court and Deputy Clerks ofCourt of the Court of Appeals.

The Commission and its eight(8) divisions shall be assisted bythe Commission Attorneys in itsappellate and adjudicatoryfunctions whose term shall becoterminous with theCommissioners with whom theyare assigned. The CommissionAttorneys shall be members ofthe Philippine Bar with at leastone (1) year experience orexposure in the field of labor-management relations. Theyshall receive annual salaries andshall be entitled to the sameallowances and benefits asthose falling under Salary Gradetwenty-six (SG 26). There shallbe as many CommissionAttorneys as may be necessaryfor the effective and efficientoperation of the Commissionbut in no case more than three(3) assigned to the Office of theChairman and eachCommissioner.

No Labor Arbiter shall beassigned to perform thefunctions of the CommissionAttorney nor detailed to theoffice of any Commissioner."

Article 214As Amended

Headquarters, Branches andProvincial Extension Units.

The Commission and its First,Second and Third divisions shallhave their main offices inMetropolitan Manila, and theFourth and Fifth divisions in theCities of Cebu and Cagayan deOro, respectively. TheCommission shall establish asmany regional branches asthere are regional offices of theDepartment of Labor andEmployment, sub-regionalbranches or provincial extensionunits. There shall be as manyLabor Arbiters as may benecessary for the effective andefficient operation of theCommission. Each regional

Headquarters, Branches andProvincial Extension Units.

The Commission and its first,second, third, fourth, fifth andsixth divisions shall have theirmain offices in MetropolitanManila, and the seventh andeighth divisions in the cities ofCebu and Cagayan de Oro,respectively. The Commissionshall establish as many regionalbranches as there are regionaloffices of the Department ofLabor and Employment, sub-regional branches or provincialextension units. There shall beas many Labor Arbiters as maybe necessary for the effectiveand efficient operation of theCommission.

branch shall be headed by anExecutive Labor Arbiter. (Asamended by Section 6, RepublicAct No. 6715, March 21, 1989)

Article 215 As AmendedAppointment andQualifications.

The Chairman and otherCommissioners shall bemembers of the Philippine Barand must have engaged in thepractice of law in the Philippinesfor at least fifteen (15) years,with at least five (5) yearsexperience or exposure in thefield of labor-managementrelations, and shall preferablybe residents of the regionwhere they are to hold office.The Executive Labor Arbitersand Labor Arbiters shall likewisebe members of the PhilippineBar and must have beenengaged in the practice of law inthe Philippines for at least seven(7) years, with at least three (3)years experience or exposure inthe field of labor-managementrelations: Provided, However,that incumbent Executive LaborArbiters and Labor Arbiters whohave been engaged in thepractice of law for at least five(5) years may be considered asalready qualified for purposes ofreappointment as such underthis Act. The Chairman and theother Commissioners, theExecutive Labor Arbiters andLabor Arbiters shall hold officeduring good behavior until theyreach the age of sixty-five years,unless sooner removed forcause as provided by law orbecome incapacitated todischarge the duties of theiroffice.

The Chairman, the divisionPresiding Commissioners andother Commissioners shall beappointed by the President,subject to confirmation by theCommission on Appointments.Appointment to any vacancyshall come from the nomineesof the sector which nominatedthe predecessor. The ExecutiveLabor Arbiters and LaborArbiters shall also be appointedby the President, uponrecommendation of theSecretary of Labor andEmployment and shall besubject to the Civil Service Law,

Appointment andQualifications.

— The Chairman and otherCommissioners shall bemembers of the Philippine Barand must have been engaged inthe practice of law in thePhilippines for at least fifteen(15) years, with at least five (5)years experience or exposure inthe field of labor-managementrelations, and shall preferablybe residents of the regionwhere they shall hold office.The Labor Arbiters shall likewisebe members of the PhilippineBar and must have beenengaged in the practice of law inthe Philippines for at least ten(10) years, with at least five (5)years experience or exposure inthe field of labor-managementrelations.

The Chairman, the otherCommissioners and the LaborArbiters shall hold office duringgood behavior until they reachthe age of sixty-five (65) years,unless sooner removed forcause as provided by law orbecome incapacitated todischarge the duties of theiroffice: Provided, however, Thatthe President of the Republic ofthe Philippines may extend theservices of the Commissionersand Labor Arbiters up to themaximum age of seventy (70)years upon therecommendation of theCommission en banc.

The Chairman, the DivisionPresiding Commissioners andother Commissioners shall all beappointed by the President.Appointment to any vacancy ina specific division shall comeonly from the nominees of thesector which nominated thepredecessor. The Labor Arbitersshall also be appointed by thePresident, uponrecommendation of theCommission en banc to aspecific arbitration branchpreferably in the region wherethey are residents, and shall besubject to the Civil Service Law,rules and regulations: Provided,That the Labor Arbiters who arepresently holding office in the



rules and regulations.

The Secretary of Labor andEmployment shall, inconsultation with the Chairmanof the Commission, appoint thestaff and employees of theCommission and its regionalbranches as the needs of theservice may require, subject tothe Civil Service Law, rules andregulations, and upgrade theircurrent salaries, benefits andother emoluments inaccordance with law. (Asamended by Section 7, RepublicAct No. 6715, March 21, 1989)

region where they are residentsshall be deemed appointedthereat.

The Chairman of theCommission shall appoint thestaff and employees of theCommission and its regionalbranches as the needs of theservice may require, subject tothe Civil Service Law, rules andregulations, and upgrade theircurrent salaries, benefits andother emoluments inaccordance with law.

Article 216 As AmendedSalaries, benefits and otheremoluments.

The Chairman and members ofthe Commission shall receive anannual salary at least equivalentto, and be entitled to the sameallowances and benefits asthose of the Presiding Justiceand Associate Justices of theCourt of Appeals, respectively.The Executive Labor Arbitersshall receive an annual salary atleast equivalent to that of anAssistant Regional Director ofthe Department of Labor andEmployment and shall beentitled to the same allowancesand benefits as that of aRegional Director of saidDepartment. The Labor Arbitersshall receive an annual salary atleast equivalent to, and beentitled to the same allowancesand benefits as that of anAssistant Regional Director ofthe Department of Labor andEmployment. In no case,however, shall the provision ofthis Article result in thediminution of existing salaries,allowances and benefits of theaforementioned officials. (Asamended by Section 8, RepublicAct No. 6715, March 21, 1989)

Salaries, Benefits andEmoluments.

The Chairman and members ofthe Commission shall have thesame rank, receive an annualsalary equivalent to, and beentitled to the same allowances,retirement and benefits asthose of the Presiding Justiceand Associate Justices of theCourt of Appeals, respectively.Labor Arbiters shall have thesame rank, receive an annualsalary equivalent to and beentitled to the same allowances,retirement and other benefitsand privileges as those of theJudges of the Regional TrialCourts. In no case, however,shall the provision of this Articleresult in the diminution of theexisting salaries, allowances andbenefits of the aforementionedofficials

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