14 FVC Labor Union-PTGWO v Samahang Nagkakaisang Manggagawa Sa FVC-SIGLO

2/4/2015 SUPREME COURT REPORTS ANNOTATED VOLUME 606

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MANDED to the arbitration branch of origin for theconduct of further proceedings.

SO ORDERED.

Carpio (Chairperson), LeonardoDe Castro, Brion andDel Castillo, JJ., concur.

Petition granted, judgment and resolution reversed andset aside.

Note.Corporate officers are not personally liable forthe money claims of discharged corporate employees unlessthey acted with evident malice and bad faith interminating their employment. (Uy vs. Villanueva, 526SCRA 73 [2007])

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G.R. No. 176249.November 27, 2009.*

FVC LABOR UNIONPHILIPPINE TRANSPORT ANDGENERAL WORKERS ORGANIZATION (FVCLUPTGWO), petitioner, vs. SAMASAMANGNAGKAKAISANG MANGGAGAWA SA FVCSOLIDARITY OF INDEPENDENT AND GENERALLABOR ORGANIZATIONS (SANAMAFVCSIGLO),respondent.

Labor Law; Labor Unions; Collective Bargaining Agreements(CBAs); The law allows a challenge to the exclusive representationstatus of a collective bargaining agent through the filing of acertification election petition only within 60 days from the

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*SECOND DIVISION.



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VOL. 606, NOVEMBER 27, 2009 199

FVC Labor UnionPhilippine Transport and General WorkersOrganization (FVCLUPTGWO) vs. SamaSamang Nagkakaisang

Manggagawa sa FVCSolidarity of Independent and GeneralLabor Organizations (SANAMAFVCSIGLO)

expiration of the fiveyear Collective Bargaining Agreement (CBA).The legal question before us centers on the effect of theamended or extended term of the CBA on the exclusiverepresentation status of the collective bargaining agent and theright of another union to ask for certification as exclusivebargaining agent. The question arises because the law allows achallenge to the exclusive representation status of a collectivebargaining agent through the filing of a certification electionpetition only within 60 days from the expiration of the fiveyearCBA.

Same; Same; Same; By express provision of Article 253A, theexclusive bargaining status cannot go beyond five years and therepresentation status is a legal matter not for the workplaceparties to agree upon.We hold this FVCLUPTGWO position tobe correct, but only with respect to the original fiveyear term ofthe CBA which, by law, is also the effective period of the unionsexclusive bargaining representation status. While the parties mayagree to extend the CBAs original fiveyear term together with allother CBA provisions, any such amendment or term in excess offive years will not carry with it a change in the unions exclusivecollective bargaining status. By express provision of the abovequoted Article 253A, the exclusive bargaining status cannot gobeyond five years and the representation status is a legal matternot for the workplace parties to agree upon. In other words,despite an agreement for a CBA with a life of more than fiveyears, either as an original provision or by amendment, thebargaining unions exclusive bargaining status is effective only forfive years and can be challenged within sixty (60) days prior tothe expiration of the CBAs first five years.

PETITION for review on certiorari of the decision andresolution of the Court of Appeals.

The facts are stated in the opinion of the Court. Jose P. Calinao for petitioner. Ernesto R. Arellano for respondent.



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200 SUPREME COURT REPORTS ANNOTATEDFVC Labor UnionPhilippine Transport and GeneralWorkers Organization (FVCLUPTGWO) vs. Sama

Samang Nagkakaisang Manggagawa sa FVCSolidarity ofIndependent and General Labor Organizations (SANAMA

FVCSIGLO)

BRION,J.:We pass upon the petition for review on certiorari under

Rule 45 of the Rules of Court1 filed by FVC Labor UnionPhilippine Transport and General Workers Organization(FVCLUPTGWO) to challenge the Court of Appeals (CA)decision of July 25, 20062 and its resolution rendered onJanuary 15, 20073 in CAG.R. SP No. 83292.4

The AntecedentsThe facts are undisputed and are summarized below.On December 22, 1997, the petitioner FVCLUPTGWO

the recognized bargaining agent of the rankandfileemployees of the FVC Philippines, Incorporated (company)signed a fiveyear collective bargaining agreement (CBA)with the company. The fiveyear CBA period was fromFebruary 1, 1998 to January 30, 2003.5 At the end of the3rd year of the fiveyear term and pursuant to the CBA,FVCLUPTGWO and the company entered into therenegotiation of the CBA and modified, among otherprovisions, the CBAs duration. Article XXV, Section 2 ofthe renegotiated CBA provides that this renegotiationagreement shall take effect beginning February 1, 2001 anduntil May

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1Rollo, pp. 317.2Id., at pp. 6985. Penned by Associate Justice Mariflor P. Punzalan

Castillo and concurred in by Associate Justice Remedios A. SalazarFernando and Associate Justice Noel G. Tijam.

3Id., at pp. 9496.4SamaSamang Nagkakaisang Manggagawa sa FVCSolidarity of

Independent and General Labor Organizations (SANAMAFVCSIGLO) v.Hon. Patricia Sto. Tomas, Secretary of Labor and Employment, FVC LaborUnionPTGWO and FVC Philippines.

5Petition, Annex A; Rollo, pp. 1935.



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VOL. 606, NOVEMBER 27, 2009 201FVC Labor UnionPhilippine Transport and GeneralWorkers Organization (FVCLUPTGWO) vs. Sama


FVCSIGLO)

31, 2003 thus extending the original fiveyear period of theCBA by four (4) months.

On January 21, 2003, nine (9) days before the January30, 2003 expiration of the originallyagreed fiveyear CBAterm (and four [4] months and nine [9] days away from theexpiration of the amended CBA period), the respondentSamaSamang Nagkakaisang Manggagawa sa FVCSolidarity of Independent and General LaborOrganizations (SANAMASIGLO) filed before theDepartment of Labor and Employment (DOLE) a petitionfor certification election for the same rankandfile unitcovered by the FVCLUPTGWO CBA. FVCLUPTGWOmoved to dismiss the petition on the ground that thecertification election petition was filed outside the freedomperiod or outside of the sixty (60) days before the expirationof the CBA on May 31, 2003.Action on the Petition and Related Incidents

On June 17, 2003, MedArbiter Arturo V. Cosucodismissed the petition on the ground that it was filedoutside the 60day period counted from the May 31, 2003expiry date of the amended CBA.6 SANAMASIGLOappealed the MedArbiters Order to the DOLE Secretary,contending that the filing of the petition on January 21,2003 was within 60days from the January 30, 2003expiration of the original CBA term.

DOLE Secretary Patricia A. Sto. Tomas sustainedSANAMASIGLOs position, thereby setting aside thedecision of the MedArbiter.7 She ordered the conduct of acer

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6Petition, Annex C; Id., at pp. 5155.7Dated August 6, 2003; Petition, Annex D; Id., at pp. 5660.

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FVCSIGLO)

tification election in the company. FVCLUPTGWOmoved for the reconsideration of the Secretarys decision.

On November 6, 2003, DOLE Acting Secretary ManuelG. Imson granted the motion; he set aside the August 6,2003 DOLE decision and dismissed the petition as theMedArbiters Order of June 17, 2003 did.8 The ActingSecretary held that the amended CBA (which extended therepresentation aspect of the original CBA by four [4]months) had been ratified by members of the bargainingunit some of whom later organized themselves asSANAMASIGLO, the certification election applicant. Sincethese SANAMASIGLO members fully accepted and in factreceived the benefits arising from the amendments, theActing Secretary rationalized that they also accepted theextended term of the CBA and cannot now file a petition forcertification election based on the original CBA expirationdate.

SANAMASIGLO moved for the reconsideration of theActing Secretarys Order, but Secretary Sto. Tomas deniedthe motion in her Order of January 30, 2004.9

SANAMASIGLO sought relief from the CA through apetition for certiorari under Rule 65 of the Rules of Courtbased on the grave abuse of discretion the Labor Secretarycommitted when she reversed her earlier decision callingfor a certification election. SANAMASIGLO pointed outthat the Secretarys new ruling is patently contrary to theexpress provision of the law and established jurisprudence.

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8 Petition, Annex E; Id., at pp. 6164.9 Petition, Annex F; Id., at pp. 6567.

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FVCSIGLO)

The CA DecisionThe CA found SANAMASIGLOs petition meritorious

on the basis of the applicable law10 and the rules,11 asinterpreted in the congressional debates. It set aside thechallenged DOLE Secretary decisions and reinstated herearlier ruling calling for a certification election. Theappellate court declared:

It is clear from the foregoing that while the parties mayrenegotiate the other provisions (economic and noneconomic) ofthe CBA, this should not affect the fiveyear representation aspectof the original CBA. If the duration of the renegotiated agreementdoes not coincide with but rather exceeds the original fiveyearterm, the same will not adversely affect the right of another unionto challenge the majority status of the incumbent bargainingagent within sixty (60) days before the lapse of the original five (5)year term of the CBA. In the event a new union wins in thecertification election, such union is required to honor andadminister the renegotiated CBA throughout the excess period.

FVCLUPTGWO moved to reconsider the CA decisionbut the CA denied the motion in its resolution of January15, 2007.12 With this denial, FVCLUPTGWO now comesbefore us to challenge the CA rulings.13 It argues that inlight of the peculiar attendant circumstances of the case,the CA erred in strictly applying Section 11 (11b), Rule XI,

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10Labor Code, Article 253A.11 Omnibus Rules Implementing the Labor Code, Book V, Rule XI,

Section 11(11b).12Supra note 3.13Supra note 1.

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FVCSIGLO)

Book V of the Omnibus Rules Implementing the LaborCode, as amended by Department Order No. 9, s. 1997.14

Apparently, the peculiar circumstances the FVCLUPTGWO referred to relate to the economic and otherprovisions of the February 1, 1998 to January 30, 2003CBA that it renegotiated with the company. Therenegotiated CBA changed the CBAs remaining term fromFebruary 1, 2001 to May 31, 2003. To FVCLUPTGWO,this extension of the CBA term also changed the unionsexclusive bargaining representation status and effectivelymoved the reckoning point of the 60day freedom periodfrom January 30, 2003 to May 30, 2003. FVCLUPTGWOthus moved to dismiss the petition for certification electionfiled on January 21, 2003 (9 days before the expiry date onJanuary 30, 2003 of the original CBA) by SANAMASIGLOon the ground that the petition was filed outside theauthorized 60day freedom period.

It also submits in its petition that the SANAMASIGLOis estopped from questioning the extension of the CBA termunder the amendments because its members are the verysame ones who approved the amendments, including theexpiration date of the CBA, and who benefited from theseamendments.

Lastly, FVCLUPTGWO posits that the representationpetition had been rendered moot by a new CBA it enteredinto with the company covering the period June 1, 2003 toMay 31, 2008.15

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14Supra note 11.15Petition, Annex J; Rollo, pp. 97120.

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FVCSIGLO)

Required to comment by the Court16 and to show cause



for its failure to comply,17 SANAMASIGLO manifested onOctober 10, 2007 that: since the promulgation of the CAdecision on July 25, 2006 or three years after the petitionfor certification election was filed, the local leaders ofSANAMASIGLO had stopped reporting to the federationoffice or attending meetings of the council of local leaders;the SANAMASIGLO counsel, who is also the SIGLOnational president, is no longer in the position to pursuethe present case because the local union and its leadership,who are principals of SIGLO, had given up and abandonedtheir desire to contest the representative status of FVCLUPTGWO; and a new CBA had already been signed byFVCLUPTGWO and the company.18 Under thesecircumstances, SANAMASIGLO contends that pursuingthe case has become futile, and accordingly simply adoptedthe CA decision of July 25, 2006 as its position; its counsellikewise asked to be relieved from filing a comment in thecase. We granted the request for relief and dispensed withthe filing of a comment.19

The Courts Ruling

While SANAMASIGLO has manifested itsabandonment of its challenge to the exclusive bargainingrepresentation status of FVCLUPTGWO, we deem itnecessary in the exercise of our discretion to resolve thequestion of law raised since this exclusive representationstatus issue will inevitably recur in the future as workplaceparties avail of

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16Resolution dated February 26, 2007; Id., at p. 127.17Resolution dated July 16, 2007; Id., at p. 138.18Id., at pp. 140142.19Resolution dated November 19, 2007; Id., at pp. 144145.

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FVCSIGLO)



opportunities to prolong workplace harmony by extendingthe term of CBAs already in place.20

The legal question before us centers on the effect of theamended or extended term of the CBA on the exclusiverepresentation status of the collective bargaining agent andthe right of another union to ask for certification asexclusive bargaining agent. The question arises becausethe law allows a challenge to the exclusive representationstatus of a collective bargaining agent through the filing ofa certification election petition only within 60 days fromthe expiration of the fiveyear CBA.

Article 253A of the Labor Code covers this situation andit provides:

Terms of a collective bargaining agreement.Any CollectiveBargaining Agreement that the parties may enter into, shall,insofar as the representation aspect is concerned, be for a term offive (5) years. No petition questioning the majority status of theincumbent bargaining agent shall be entertained and nocertification election shall be conducted by the Department ofLabor and Employment outside of the sixty day periodimmediately before the date of expiry of such fiveyear term of theCollective Bargaining Agreement. All other provisions of theCollective Bargaining Agreement shall be renegotiated not laterthan three (3) years after its execution.

Any agreement on such other provisions of the CollectiveBargaining Agreement entered into within six (6) months fromthe date of expiry of the term of such other provisions as fixed insuch Collective Bargaining Agreement, shall retroact to the day

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20Caneland Sugar Corporation v. Alon, et al., G.R. No. 142896, September 12,2007, 533 SCRA 29; Manalo v. Calderon, G.R. No. 178920, October 15, 2007, 536SCRA 2007; See Acop v. Guingona, G.R. No. 134855, July 2, 2002, 383 SCRA 577;433 Phil 62 (2002).

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VOL. 606, NOVEMBER 27, 2009 207FVC Labor UnionPhilippine Transport and General Workers

Organization (FVCLUPTGWO) vs. SamaSamang NagkakaisangManggagawa sa FVCSolidarity of Independent and General

Labor Organizations (SANAMAFVCSIGLO)

immediately following such date. If any such agreement is



entered into beyond six months, the parties shall agree on theduration of retroactivity thereof. In case of a deadlock in therenegotiation of the collective bargaining agreement, the partiesmay exercise their rights under this Code.

This Labor Code provision is implemented through BookV, Rule VIII of the Rules Implementing the Labor Code21which states:

Sec.14.Denial of the petition; grounds.The MedArbiter maydismiss the petition on any of the following grounds:

x x x x(b)the petition was filed before or after the freedom period of

a duly registered collective bargaining agreement; providedthat the sixtyday period based on the original collectivebargaining agreement shall not be affected by anyamendment, extension or renewal of the collectivebargaining agreement (underscoring supplied).

x x x x

The root of the controversy can be traced to amisunderstanding of the interaction between a unionsexclusive bargaining representation status in a CBA andthe term or effective period of the CBA.

FVCLUPTGWO has taken the view that its exclusiverepresentation status should fully be in step with the termof the CBA and that this status can be challenged onlywithin 60 days before the expiration of this term. Thus,when the term of the CBA was extended, its exclusivebargaining status was similarly extended so that thefreedom period for the filing of a petition for certificationelec

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21Supra note 11.

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FVCSIGLO)



tion should be counted back from the expiration of theamended CBA term.

We hold this FVCLUPTGWO position to be correct, butonly with respect to the original fiveyear term of the CBAwhich, by law, is also the effective period of the unionsexclusive bargaining representation status. While theparties may agree to extend the CBAs original fiveyearterm together with all other CBA provisions, any suchamendment or term in excess of five years will not carrywith it a change in the unions exclusive collectivebargaining status. By express provision of the abovequotedArticle 253A, the exclusive bargaining status cannot gobeyond five years and the representation status is a legalmatter not for the workplace parties to agree upon. Inother words, despite an agreement for a CBA with a life ofmore than five years, either as an original provision or byamendment, the bargaining unions exclusive bargainingstatus is effective only for five years and can be challengedwithin sixty (60) days prior to the expiration of the CBAsfirst five years. As we said in San Miguel Corp. EmployeesUnionPTGWO, et al. v. Confesor, San Miguel Corp.,Magnolia Corp. and San Miguel Foods, Inc.,22 where wecited the Memorandum of the Secretary of Labor andEmployment dated February 24, 1994:

In the event however, that the parties, by mutual agreement,enter into a renegotiated contract with a term of three (3) years orone which does not coincide with the said fiveyear term and saidagreement is ratified by majority of the members in thebargaining unit, the subject contract is valid and legal andtherefore, binds the contracting parties. The same will howevernot

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22G.R. No. 111262, September 19, 1996, 262 SCRA 81.

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VOL. 606, NOVEMBER 27, 2009 209FVC Labor UnionPhilippine Transport and General Workers

Organization (FVCLUPTGWO) vs. SamaSamang NagkakaisangManggagawa sa FVCSolidarity of Independent and General

Labor Organizations (SANAMAFVCSIGLO)

adversely affect the right of another union to challenge the



majority status of the incumbent bargaining agent within sixty(60) days before the lapse of the original five (5) year term of theCBA.

In the present case, the CBA was originally signed for aperiod of five years, i.e., from February 1, 1998 to January30, 2003, with a provision for the renegotiation of theCBAs other provisions at the end of the 3rd year of thefiveyear CBA term. Thus, prior to January 30, 2001 theworkplace parties sat down for renegotiation but instead ofconfining themselves to the economic and noneconomicCBA provisions, also extended the life of the CBA foranother four months, i.e., from the original expiry date onJanuary 30, 2003 to May 30, 2003.

As discussed above, this negotiated extension of the CBAterm has no legal effect on the FVCLUPTGWOs exclusivebargaining representation status which remained effectiveonly for five years ending on the original expiry date ofJanuary 30, 2003. Thus, sixty days prior to this date, orstarting December 2, 2002, SANAMASIGLO couldproperly file a petition for certification election. Its petition,filed on January 21, 2003 or nine (9) days before theexpiration of the CBA and of FVCLUPTGWOs exclusivebargaining status, was seasonably filed.

We thus find no error in the appellate courts rulingreinstating the DOLE order for the conduct of acertification election. If this ruling cannot now be giveneffect, the only reason is SANAMASIGLOs owndesistance; we cannot disregard its manifestation that themembers of SANAMA themselves are no longer interestedin contesting the exclusive collective bargaining agentstatus of FVCLUPTGWO. This recognition is fully inaccord with the Labor

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FVCSIGLO)

Codes intent to foster industrial peace and harmony in theworkplace.



WHEREFORE, premises considered, we AFFIRM thecorrectness of the challenged Decision and Resolution ofthe Court of Appeals and accordingly DISMISS thepetition, but nevertheless DECLARE that no certificationelection, pursuant to the underlying petition forcertification election filed with the Department of Laborand Employment, can be enforced as this petition haseffectively been abandoned.

SO ORDERED.

Carpio (Chairperson), LeonardoDe Castro, Del Castilloand Abad, JJ., concur.

Judgment and resolution affirmed, petition dismissed.

Note.Until a new Collective Bargaining Agreement(CBA) is executed by and between the parties, they areduty bound to keep the status quo and to continue in fullforce and effect the terms and conditions of the existingagreement. (Faculty Association of Mapua Institute ofTechnology (FAMIT) vs. Court of Appeals, 524 SCRA 709[2007])

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14 FVC Labor Union-PTGWO v Samahang Nagkakaisang Manggagawa Sa FVC-SIGLO

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