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Transcript of Labrel Set 3
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SECOND DIVISION
[G.R. No. 97020. June 8, 1992.]
CALIFORNIA MANUFACTURING CORPORATION, Petitioner, v. THE HONORABLE
UNDERSECRETARY OF LABOR BIENVENIDO E. LAGUESMA ABD FEDERATIONOF FREE WORKERS (FFW), CALIFORNIA MFG. CORP. SUPERVISORS UNION
CHAPTER (CALMASUCO), Respondents.
V.E. del Rosario & Associates for Petitioner.
Ferdinand E. Laguna for Private Respondent.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; CERTIFICATION
ELECTION; NOT APPLICABLE TO ESTABLISHMENTS WHERE THERE EXISTS ACERTIFIED BARGAINING AGENT.The Court has already categorically ruled that Article
257 of the Labor Code is applicable to unorganized labor organizations and not to establishmentswhere there exists a certified bargaining agent which had previously entered into a collective
bargaining agreement with the management (Associated Labor Unions [ALU] v. Calleja, G.R.No. 85085, November 6, 1989, 179 SCRA 127). Otherwise stated, the establishment concerned
must have no certified bargaining agent (Associated Labor Unions [ALU] v. Calleja, G.R. No.82260, July 19, 1989, 175 SCRA 490). In the instant case, it is beyond cavil that the supervisors
of CMC which constitute a bargaining unit separate and distinct from that of the rank-and-file,have no such agent, thus they correctly filed a petition for certification election thru union FFW-
CALMASUCO, likewise indubitably a legitimate labor organization.
2. ID.; ID.; ID.; TWENTY-FIVE PERCENT (25%) SUBSCRIPTION REQUIREMENT;IMMATERIAL THERETO; REASONS THEREFOR.CMCs insistence on the 25%
subscription requirement, is clearly immaterial. The same has been expressly deleted by Section24 of Republic Act No. 6715 and is presently prescribed only in organized establishments, that
is, those with existing bargaining agents. Compliance with the said requirement need not needeven be established with absolute certainty. The Court has consistently ruled that "even
conceding that the statutory requirement of 30% (now 25%) of the labor force asking for acertification election had not been strictly complied with, the Director (now the Med-Arbiter) is
still empowered to order that it be held precisely for the purpose of ascertaining which of the
contending labor organizations shall be the exclusive collective bargaining agent (Atlas FreeWorkers Union (AFWU-PSSLU Local v. Noriel, G.R. No. L-51905, May 26, 1981, 104 SCRA565). The requirement than is relevant only when it becomes mandatory to conduct a
certification election. In all other instances, the discretion, according to the rulings of thisTribunal, ought to be ordinarily exercised in favor of a petition for certification (National Mines
and Allied Workers Union (NAMAWU-UIL) v. Luna, Et Al., G.R. No. L-46722, June 15, 1978,83 SCRA 607).
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3. ID.; ID.; ID.; AS A GENERAL RULE, AN EMPLOYER HAS NO STANDING TOQUESTION THEREOF; EXCEPTION.CMC, as employer has no standing to question a
certification election (Asian Design and Manufacturing Corporation v. Calleja, Et Al., G.R. No.77415, June 29, 1989, 174 SCRA 477). Such is the sole concern of the worker has to file the
petition for certification election pursuant to Article 259 (now 258) of the Labor Code because it
was requested to bargain collectively. Thereafter, the role of the employer in the certificationprocess ceases. The employer becomes merely a by-stander. Oft-quoted is the pronouncement ofthe Court on management interference in certification elections, thus: "On matters that should be
the exclusive concern of labor, the choice of a collective bargaining representative, the employeris definitely an intruder. His participation, to say the least, deserves no encouragement. This
Court should be the last agency to lend support to such an attempt at interference with purelyinternal affair of labor." (Trade Unions of the Philippines and Allied Services (TUPAS) v.
Trajano, G.R. No. L-61153,, January 17, 1983, 120 SCRA 64 citing Consolidated Farms, Inc. v.Noriel, G.R. No. L-47752, July 31, 1978, 84 SCRA 469, 473).
D E C I S I O N
PARAS, J.:
This is a petition for review on certiorariwith prayer for preliminary injunction and/or
temporary restraining order seeking to annul and set aside the (a) resolution * of the Departmentof Labor and Employment dated October 16, 1990 in OS-A-10-283-90 (NCR-OD-M-90-05-095)
entitled "In Re: Petition for Certification Election Among the Supervisors of CaliforniaManufacturing Corporation, Federation of Free Workers (FFW) California Mfg. Corp.
Supervisors Union Chapter (CALMASUCO), petitioner-appellee, California Manufacturing
Corporation, employer-appellant" which denied herein petitioners appeal and affirmed the orderof Med-Arbiter Arsenia Q. Ocampo dated August 22, 1990 directing the conduct of acertification election among the supervisory employees of California Manufacturing
Corporation, and (b) the Order ** of the same Department denying petitioners motion forreconsideration.
As culled from the records, the following facts appear undisputed:chanrob1es virtual 1aw library
On May 24, 1990, a petition for certification election among the supervisors of California
Manufacturing Corporation (CMC for brevity) was filed by the Federation of Free Workers(FFW)California Manufacturing Corporation Supervisors Union Chapter (CALMASUCO),
alleging inter alia, that it is a duly registered federation with registry certificate no. 1952-TTT-IP,while FFW-CALMASUCO Chapter is a duly registered chapter with registry certificate no. 1-
AFBI-038 issued on May 21, 1990 (Annex "A", Rollo, p. 63); that the employer CMC employsone hundred fifty (150) supervisors; that there is no recognized supervisors union existing in the
company; that the petition is filed in accordance with Article 257 of the Labor Code, as amendedby Republic Act No. 6715; and that the petition is nevertheless supported by a substantial
number of signatures of the employees concerned (Annexes "E" and "F", Ibid., pp. 28-29).chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
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In its answer, CMC, now petitioner herein, alleged among others, that the petition for the holding
of a certification election should be denied as it is not supported by the required twenty-fivepercent (25%) of all its supervisors and that a big number of the supposed signatories to the
petition are not actually supervisors as they have no subordinates to supervise, nor do they have
the powers and functions which under the law would classify them as supervisors (Annex "D",Ibid., p. 25).
On July 24, 1990, FFW-CALMASUCO filed its reply maintaining that under the law, whenthere is no existing unit yet in a particular bargaining unit at the time a petition for certification
election is filed, the 25% rule on the signatories does not apply; that the "organizedestablishment" contemplated by law does not refer to a "company" per se but rather refers to a
"bargaining unit" which may be of different classifications in a single company; that CMC has atleast two (2) different bargaining units, namely, the supervisory (unorganized) and the rank-and-
file (organized); that the signatories to the petition have been performing supervisory functions;that since it is CMC which promoted them to the positions of supervisors, it is already estopped
from claiming that they are not supervisors; that the said supervisors were excluded from thecoverage of the collective bargaining agreement of its rank-and-file employees; and that the
contested signatories are indeed supervisors as shown in the "CMC Master List of Employees" ofJanuary 2, 1990 and the CMS Publication (Annex "G", Ibid., p. 30).
On August 22, 1990, the Med-Arbiter issued an order, the decretal portion of which
reads:jgc:chanrobles.com.ph
"WHEREFORE, premises considered, it is hereby ordered that a certification election beconducted among the supervisory employees of California Manufacturing Corporation within
twenty (20) days from receipt hereof with the usual pre-election conference of the parties tothresh out the mechanics of the election. The payroll of the company three (3) months prior to
the filing of the petition shall be used as the basis in determining the list of eligible voters.
The choices are:chanrob1es virtual 1aw library
1. Federation of Free Workers (FFW) California Manufacturing Corporation SupervisorsUnion Chapter (CALMASUCO); and
2. No union.
"SO ORDERED." (Annex "H", Ibid., p. 33)
CMC thereafter appealed to the Department of Labor and Employment which, however, affirmed
the above order in its assailed resolution dated October 16, 1990 (Annex "B", Ibid., p. 18).CMCs subsequent motion for reconsideration was also denied in its order dated November 17,
1990 (Annex "A", Ibid., p. 15), hence, his petition.chanrobles.com : virtual law library
The issues are presented by CMC in this wise:jgc:chanrobles.com.ph
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"a) whether or not the term "unorganized establishment" in Article 257 of the Labor Code refersto a bargaining unit or a business establishment;
"b) whether or not non-supervisors can participate in a supervisors certification election; and
"c) whether or not the two (2) different and separate plants of herein petitioner in Paraaque andLas Pias can be treated as a single bargaining unit."cralaw virtua1aw library
The petition must be denied.
The Court has already categorically ruled that Article 257 of the Labor Code is applicable tounorganized labor organizations and not to establishments where there exists a certified
bargaining agent which had previously entered into a collective bargaining agreement with themanagement (Associated Labor Unions [ALU] v. Calleja, G.R. No. 85085, November 6, 1989,
179 SCRA 127) (Underscoring supplied). Otherwise stated, the establishment concerned musthave no certified bargaining agent (Associated Labor Unions [ALU] v. Calleja, G.R. No. 82260,
July 19, 1989, 175 SCRA 490). In the instant case, it is beyond cavil that the supervisors of CMCwhich constitute a bargaining unit separate and distinct from that of the rank-and-file, have no
such agent, thus they correctly filed a petition for certification election thru union FFW-CALMASUCO, likewise indubitably a legitimate labor organization. CMCs insistence on the
25% subscription requirement, is clearly immaterial. The same has been expressly deleted bySection 24 of Republic Act No. 6715 and is presently prescribed only in organized
establishments, that is, those with existing bargaining agents. Compliance with the saidrequirement need not even be established with absolute certainty. The Court has consistently
ruled that "even conceding that the statutory requirement of 30% (now 25%) of the labor forceasking for a certification election had not been strictly complied with, the Director (now the
Med-Arbiter) is still empowered to order that it be held precisely for the purpose of ascertainingwhich of the contending labor organizations shall be the exclusive collective bargaining agent
(Atlas Free Workers Union (AFWU)-PSSLU Local v. Noriel, G.R. No. L-51905, May 26, 1981,104 SCRA 565). The requirement then is relevant only when it becomes mandatory to conduct a
certification election. In all other instances, the discretion, according to the rulings of thisTribunal, ought to be ordinarily exercised in favor of a petition for certification (National Mines
and Allied Workers Union (NAMAWU-UIF) v. Luna, Et Al., G.R. No. L-46722, June 15, 1978,83 SCRA 607).
In any event, CMC as employer has no standing to question a certification election (Asian
Design and Manufacturing Corporation v. Calleja, Et Al., G.R. No. 77415, June 29, 1989, 174SCRA 477). Such is the sole concern of the workers. The only exception is where the employer
has to file the petition for certification election pursuant to Article 259 (now 258) of the LaborCode because it was requested to bargain collectively. Thereafter, the role of the employer in the
certification process ceases. The employer becomes merely a by-stander. Oft-quoted is thepronouncement of the Court on management interference in certification elections,
thus:jgc:chanrobles.com.ph
"On matters that should be the exclusive concern of labor, the choice of a collective bargainingrepresentative, the employer is definitely an intruder. His participation, to say the least, deserves
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no encouragement. This Court should be the last agency to lend support to such an attempt atinterference with purely internal affair of labor." (Trade Unions of the Philippines and Allied
Services (TUPAS) v. Trajano, G.R. No. L-61153, January 17, 1983, 120 SCRA 64 citingConsolidated Farms, Inc. v. Noriel, G.R. No. L-47752. July 31, 1978, 84 SCRA 469, 473).
PREMISES CONSIDERED, the petition is DISMISSED for utter lack of merit.
SO ORDERED.
Narvasa, C.J., Padilla and Regalado,JJ., concur.
Nocon,J., is on leave.
++++++++++++++++++++++++++++++++
2.
G.R. No. 96490 February 3, 1992
INDOPHIL TEXTILE MILL WORKERS UNION-PTGWO,petitioner,vs.
VOLUNTARY ARBITRATOR TEODORICO P. CALICA and INDOPHIL TEXTILEMILLS, INC., respondents.
Romeo C. Lagman for petitioner.
Borreta, Gutierrez & Leogardo for respondent Indophil Textile Mills, Inc.
MEDIALDEA, J.:
This is a petition for certiorari seeking the nullification of the award issued by the respondent
Voluntary Arbitrator Teodorico P. Calica dated December 8, 1990 finding that Section 1 (c),Article I of the Collective Bargaining Agreement between Indophil Textile Mills, Inc. and
Indophil Textile Mill Workers Union-PTGWO does not extend to the employees of IndophilAcrylic Manufacturing Corporation as an extension or expansion of Indophil Textile Mills,
Incorporated.
The antecedent facts are as follows:
Petitioner Indophil Textile Mill Workers Union-PTGWO is a legitimate labor organization dulyregistered with the Department of Labor and Employment and the exclusive bargaining agent of
all the rank-and-file employees of Indophil Textile Mills, Incorporated. Respondent Teodorico P.Calica is impleaded in his official capacity as the Voluntary Arbitrator of the National
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Conciliation and Mediation Board of the Department of Labor and Employment, while privaterespondent Indophil Textile Mills, Inc. is a corporation engaged in the manufacture, sale and
export of yarns of various counts and kinds and of materials of kindred character and has itsplants at Barrio Lambakin. Marilao, Bulacan.
In April, 1987, petitioner Indophil Textile Mill Workers Union-PTGWO and private respondentIndophil Textile Mills, Inc. executed a collective bargaining agreement effective from April 1,1987 to March 31, 1990.
On November 3, 1967 Indophil Acrylic Manufacturing Corporation was formed and registered
with the Securities and Exchange Commission. Subsequently, Acrylic applied for registrationwith the Board of Investments for incentives under the 1987 Omnibus Investments Code. The
application was approved on a preferred non-pioneer status.
In 1988, Acrylic became operational and hired workers according to its own criteria and
standards. Sometime in July, 1989, the workers of Acrylic unionized and a duly certified
collective bargaining agreement was executed.
In 1990 or a year after the workers of Acrylic have been unionized and a CBA executed, the
petitioner union claimed that the plant facilities built and set up by Acrylic should be consideredas an extension or expansion of the facilities of private respondent Company pursuant to Section
1(c), Article I of the CBA, to wit,.
c) This Agreement shall apply to the Company's plant facilities andinstallations and to any extension and expansion thereat. (Rollo,
p.4)
In other words, it is the petitioner's contention that Acrylic is part of the Indophilbargaining unit.
The petitioner's contention was opposed by private respondent which submits that it is a juridicalentity separate and distinct from Acrylic.
The existing impasse led the petitioner and private respondent to enter into a submission
agreement on September 6, 1990. The parties jointly requested the public respondent to act asvoluntary arbitrator in the resolution of the pending labor dispute pertaining to the proper
interpretation of the CBA provision.
After the parties submitted their respective position papers and replies, the public respondentVoluntary Arbitrator rendered its award on December 8, 1990, the dispositive portion of whichprovides as follows:
PREMISES CONSIDERED, it would be a strained interpretation and application
of the questioned CBA provision if we would extend to the employees of Acrylicthe coverage clause of Indophil Textile Mills CBA. Wherefore, an award is made
to the effect that the proper interpretation and application of Sec. l, (c), Art. I, of
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the 1987 CBA do (sic) not extend to the employees of Acrylic as an extension orexpansion of Indophil Textile Mills, Inc. (Rollo, p.21)
Hence, this petition raising four (4) issues, to wit:
1. WHETHER OR NOT THE RESPONDENT ARBITRATORERRED IN INTERPRETING SECTION 1(c), ART I OF THECBA BETWEEN PETITIONER UNION AND RESPONDENT
COMPANY.
2. WHETHER OR NOT INDOPHIL ACRYLIC IS A SEPARATE
AND DISTINCT ENTITY FROM RESPONDENT COMPANYFOR PURPOSES OF UNION REPRESENTATION.
3. WHETHER OR NOT THE RESPONDENT ARBITRATOR
GRAVELY ABUSED HIS DISCRETION AMOUNTING TO
LACK OR IN EXCESS OF HIS JURISDICTION.
4. WHETHER OR NOT THE RESPONDENT ARBITRATOR
VIOLATED PETITIONER UNION'S CARDINAL PRIMARYRIGHT TO DUE PROCESS. (Rollo, pp. 6-7)
The central issue submitted for arbitration is whether or not the operations in Indophil AcrylicCorporation are an extension or expansion of private respondent Company. Corollary to the
aforementioned issue is the question of whether or not the rank-and-file employees working atIndophil Acrylic should be recognized as part of, and/or within the scope of the bargaining unit.
Petitioner maintains that public respondent Arbitrator gravely erred in interpreting Section l(c),Article I of the CBA in its literal meaning without taking cognizance of the facts adduced thatthe creation of the aforesaid Indophil Acrylic is but a devise of respondent Company to evade the
application of the CBA between petitioner Union and respondent Company.
Petitioner stresses that the articles of incorporation of the two corporations establish that the twoentities are engaged in the same kind of business, which is the manufacture and sale of yarns of
various counts and kinds and of other materials of kindred character or nature.
Contrary to petitioner's assertion, the public respondent through the Solicitor General argues that
the Indophil Acrylic Manufacturing Corporation is not an alter ego or an adjunct or business
conduit of private respondent because it has a separate legitimate business purpose. In addition,the Solicitor General alleges that the primary purpose of private respondent is to engage in thebusiness of manufacturing yarns of various counts and kinds and textiles. On the other hand, the
primary purpose of Indophil Acrylic is to manufacture, buy, sell at wholesale basis, barter,import, export and otherwise deal in yarns of various counts and kinds. Hence, unlike private
respondent, Indophil Acrylic cannot manufacture textiles while private respondent cannot buy orimport yarns.
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Furthermore, petitioner emphasizes that the two corporations have practically the sameincorporators, directors and officers. In fact, of the total stock subscription of Indophil Acrylic,
P1,749,970.00 which represents seventy percent (70%) of the total subscription of P2,500,000.00was subscribed to by respondent Company.
On this point, private respondent cited the case ofDiatagon Labor Federation v.Ople, G.R. No.L-44493-94, December 3, 1980, 10l SCRA 534, which ruled that two corporations cannot betreated as a single bargaining unit even if their businesses are related. It submits that the fact that
there are as many bargaining units as there are companies in a conglomeration of companies is apositive proof that a corporation is endowed with a legal personality distinctly its own,
independent and separate from other corporations (seeRollo, pp. 160-161).
Petitioner notes that the foregoing evidence sufficiently establish that Acrylic is but an extensionor expansion of private respondent, to wit:
(a) the two corporations have their physical plants, offices and
facilities situated in the same compound, at Barrio Lambakin,Marilao, Bulacan;
(b) many of private respondent's own machineries, such as dyeingmachines, reeling, boiler, Kamitsus among others, were transferred
to and are now installed and being used in the Acrylic plant;
(c) the services of a number of units, departments or sections ofprivate respondent are provided to Acrylic; and
(d) the employees of private respondent are the same persons
manning and servicing the units of Acrylic. (seeRollo, pp. 12-13)
Private respondent insists that the existence of a bonafide business relationship between Acrylic
and private respondent is not a proof of being a single corporate entity because the serviceswhich are supposedly provided by it to Acrylic are auxiliary services or activities which are not
really essential in the actual production of Acrylic. It also pointed out that the essential servicesare discharged exclusively by Acrylic personnel under the control and supervision of Acrylic
managers and supervisors.
In sum, petitioner insists that the public respondent committed grave abuse of discretionamounting to lack or in excess of jurisdiction in erroneously interpreting the CBA provision and
in failing to disregard the corporate entity of Acrylic.
We find the petition devoid of merit.
Time and again, We stress that the decisions of voluntary arbitrators are to be given the highest
respect and a certain measure of finality, but this is not a hard and fast rule, it does not precludejudicial review thereof where want of jurisdiction, grave abuse of discretion, violation of due
process, denial of substantial justice, or erroneous interpretation of the law were brought to our
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attention. (seeOcampo, et al. v. National Labor Relations Commission, G.R. No. 81677, 25 July1990, First Division Minute Resolution citingOceanic Bic Division (FFW) v. Romero, G.R. No.
L-43890, July 16, 1984, 130 SCRA 392)
It should be emphasized that in rendering the subject arbitral award, the voluntary arbitrator
Teodorico Calica, a professor of the U.P. Asian Labor Education Center, now the Institute forIndustrial Relations, found that the existing law and jurisprudence on the matter, supported theprivate respondent's contentions. Contrary to petitioner's assertion, public respondent cited facts
and the law upon which he based the award. Hence, public respondent did not abuse hisdiscretion.
Under the doctrine of piercing the veil of corporate entity, when valid grounds therefore exist,
the legal fiction that a corporation is an entity with a juridical personality separate and distinctfrom its members or stockholders may be disregarded. In such cases, the corporation will be
considered as a mere association of persons. The members or stockholders of the corporationwill be considered as the corporation, that is liability will attach directly to the officers and
stockholders. The doctrine applies when the corporate fiction is used to defeat publicconvenience, justify wrong, protect fraud, or defend crime, or when it is made as a shield to
confuse the legitimate issues, or where a corporation is the mere alter ego or business conduit ofa person, or where the corporation is so organized and controlled and its affairs are so conducted
as to make it merely an instrumentality, agency, conduit or adjunct of another corporation.(Umali et al. v. Court of Appeals, G.R. No. 89561, September 13, 1990, 189 SCRA 529, 542)
In the case at bar, petitioner seeks to pierce the veil of corporate entity of Acrylic, alleging thatthe creation of the corporation is a devise to evade the application of the CBA between petitioner
Union and private respondent Company. While we do not discount the possibility of thesimilarities of the businesses of private respondent and Acrylic, neither are we inclined to apply
the doctrine invoked by petitioner in granting the relief sought. The fact that the businesses ofprivate respondent and Acrylic are related, that some of the employees of the private respondent
are the same persons manning and providing for auxilliary services to the units of Acrylic, andthat the physical plants, offices and facilities are situated in the same compound, it is our
considered opinion that these facts are not sufficient to justify the piercing of the corporate veilof Acrylic.
In the same case of Umali, et al.v.Court of Appeals(supra), We already emphasized that "the
legal corporate entity is disregarded only if it is sought to hold the officers and stockholdersdirectly liable for a corporate debt or obligation." In the instant case, petitioner does not seek to
impose a claim against the members of the Acrylic.
Furthermore, We already ruled in the case ofDiatagon Labor Federation Local 110 of theULGWP v.Ople(supra) that it is grave abuse of discretion to treat two companies as a singlebargaining unit when these companies are indubitably distinct entities with separate juridical
personalities.
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Hence, the Acrylic not being an extension or expansion of private respondent, the rank-and-fileemployees working at Acrylic should not be recognized as part of, and/or within the scope of the
petitioner, as the bargaining representative of private respondent.
All premises considered, the Court is convinced that the public respondent Voluntary Arbitrator
did not commit grave abuse of discretion in its interpretation of Section l(c), Article I of the CBAthat the Acrylic is not an extension or expansion of private respondent.
ACCORDINGLY, the petition is DENIED and the award of the respondent Voluntary Arbitratorare hereby AFFIRMED.
SO ORDERED.
Narvasa, C.J., Cruz and Grino-Aquino, JJ., concur.
+++++++++++++++++++++++++
3.
SECOND DIVISION
[G.R. No. 114974. June 16, 2004]
STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE),petitioner, vs. TheHonorable MA. NIEVES R. CONFESOR, in her capacity as SECRETARY OF LABOR AND
EMPLOYMENT; and the STANDARD CHARTERED BANK, respondents.
D E C I S I O N
CALLEJO, SR.,J.:
This is a petition for certiorari under Rule 65 of the Rules of Court filed by the StandardChartered Bank Employees Union, seeking the nullification of the October 29, 1993 Order1[1]
of then Secretary of Labor and Employment Nieves R. Confesor and her resolutions datedDecember 16, 1993 and February 10, 1994.
The Antecedents
Standard Chartered Bank (the Bank, for brevity) is a foreign banking corporation doing businessin the Philippines. The exclusive bargaining agent of the rank and file employees of the Bank isthe Standard Chartered Bank Employees Union (the Union, for brevity).
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In August of 1990, the Bank and the Union signed a five-year collective bargaining agreement(CBA) with a provision to renegotiate the terms thereof on the third year. Prior to the expiration
of the three-year period2[2] but within the sixty-day freedom period, the Union initiated thenegotiations. On February 18, 1993, the Union, through its President, Eddie L. Divinagracia, sent
a letter3[3] containing its proposals4[4] covering political provisions5[5] and thirty-four (34)
economic provisions.6[6] Included therein was a list of the names of the members of the Unionsnegotiating panel.7[7]
In a Letter dated February 24, 1993, the Bank, through its Country Manager Peter H. Harris, tooknote of the Unions proposals. The Bank attached its counter-proposal to the non-economic
provisions proposed by the Union.8[8] The Bank posited that it would be in a better position topresent its counter-proposals on the economic items after the Union had presented its
justifications for the economic proposals.9[9] The Bank, likewise, listed the members of itsnegotiating panel.10[10] The parties agreed to set meetings to settle their differences on the
proposed CBA.
Before the commencement of the negotiation, the Union, through Divinagracia, suggested to theBanks Human Resource Manager and head of the negotiating panel, Cielito Diokno, that the
bank lawyers should be excluded from the negotiating team. The Bank acceded.11[11]Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr., the President of the
National Union of Bank Employees (NUBE), the federation to which the Union was affiliated,be excluded from the Unions negotiatingpanel.12[12] However, Umali was retained as a
member thereof.
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On March 12, 1993, the parties met and set the ground rules for the negotiation. Dioknosuggested that the negotiation be kept a family affair. The proposed non-economic provisions
of the CBA were discussed first.13[13] Even during the final reading of the non-economicprovisions on May 4, 1993, there were still provisions on which the Union and the Bank could
not agree. Temporarily, the notation DEFERRED was placed therein. Towards the end of the
meeting, the Union manifested that the same should be changed to DEADLOCKED to indicatethat such items remained unresolved. Both parties agreed to place the notationDEFERRED/DEADLOCKED.14[14]
On May 18, 1993, the negotiation for economic provisions commenced. A presentation of the
basis of the Unions economic proposals was made. The next meeting, the Bank made a similarpresentation. Towards the end of the Banks presentation, Umali requested the Bank to validate
the Unions guestimates,especially the figures for the rank and file staff.15[15] In thesucceeding meetings, Umali chided the Bank for the insufficiency of its counter-proposal on the
provisions on salary increase, group hospitalization, death assistance and dental benefits. Hereminded the Bank, how the Union got what it wanted in 1987, and stated that if need be, the
Union would go through the same route to get what it wanted.16[16]
Upon the Banks insistence, the parties agreed to tackle the economic package item by item.Upon the Unions suggestion, the Bank indicated which provisions it would accept, reject, retain
and agree to discuss.17[17] The Bank suggested that the Union prioritize its economic proposals,considering that many of such economic provisions remained unresolved. The Union, however,
demanded that the Bank make a revised itemized proposal.
In the succeeding meetings, the Union made the following proposals:
Wage Increase:
1
st
YearReduced from 45% to 40%2nd
Year - Retain at 20%
Total = 60%
Group Hospitalization Insurance:Maximum disability benefit reduced from P75,000.00 to P60,000.00 per illness annually
Death Assistance:For the employee -- Reduced from P50,000.00 to P45,000.00
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For Immediate Family Member -- Reduced from P30,000.00 to P25,000.00
Dental and all others -- No change from the original demand.18[18]
In the morning of the June 15, 1993 meeting, the Union suggested that if the Bank would not
make the necessary revisions on its counter-proposal, it would be best to seek a third partyassistance.19[19] After the break, the Bank presented its revised counter-proposal20[20] asfollows:
Wage Increase : 1stYearfrom P1,000 to P1,050.00
2nd
YearP800.00no change
Group Hospitalization Insurance
From: P35,000.00 per illnessTo : P35,000.00 per illness per year
Death AssistanceFor employeeFrom: P20,000.00To : P25,000.00
Dental RetainerOriginal offer remains the same21[21]
The Union, for its part, made the following counter-proposal:
Wage Increase: 1stYear - 40%
2nd
Year - 19.5%
Group Hospitalization InsuranceFrom: P60,000.00 per year
To : P50,000.00 per year
Dental:Temporary Filling/P150.00
Tooth ExtractionPermanent Filling200.00
Prophylaxis250.00Root CanalFrom P2,000 per tooth
To: 1,800.00 per tooth
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Death Assistance:For Employees: From P45,000.00 to P40,000.00
For Immediate Family Member: From P25,000.00 to P20,000.00.22[22]
The Unions original proposals, aside from the above-quoted, remained the same.
Another set of counter-offer followed:
Management Union
Wage Increase1
stYearP1,050.00 40%
2nd
Year - 850.00 19.0%23[23]
Diokno stated that, in order for the Bank to make a better offer, the Union should clearly identifywhat it wanted to be included in the total economic package. Umali replied that it was
impossible to do so because the Banks counter-proposal was unacceptable. He furthered
asserted that it would have been easier to bargain if the atmosphere was the same as before,where both panels trusted each other. Diokno requested the Union panel to refrain frominvolving personalities and to instead focus on the negotiations.24[24] He suggested that in order
to break the impasse, the Union should prioritize the items it wanted to iron out. Divinagraciastated that the Bank should make the first move and make a list of items it wanted to be included
in the economic package. Except for the provisions on signing bonus and uniforms, the Unionand the Bank failed to agree on the remaining economic provisions of the CBA. The Union
declared a deadlock25[25] and filed a Notice of Strike before the National Conciliation andMediation Board (NCMB) on June 21, 1993, docketed as NCMB-NCR-NS-06-380-93.26[26]
On the other hand, the Bank filed a complaint for Unfair Labor Practice (ULP) and Damages
before the Arbitration Branch of the National Labor Relations Commission (NLRC) in Manila,docketed as NLRC Case No. 00-06-04191-93 against the Union on June 28, 1993. The Bank
alleged that the Union violated its duty to bargain, as it did not bargain in good faith. Itcontended that the Union demanded sky high economic demands,indicative of blue-sky
bargaining.27[27] Further, the Union violated its no strike- no lockout clause by filing a noticeof strike before the NCMB. Considering that the filing of notice of strike was an illegal act, the
Union officers should be dismissed. Finally, the Bank alleged that as a consequence of the
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illegal act, the Bank suffered nominal and actual damages and was forced to litigate and hire theservices of the lawyer.28[28]
On July 21, 1993, then Secretary of Labor and Employment (SOLE) Nieves R. Confesor,
pursuant to Article 263(g) of the Labor Code, issued an Order assuming jurisdiction over the
labor dispute at the Bank. The complaint for ULP filed by the Bank before the NLRC wasconsolidated with the complaint over which the SOLE assumed jurisdiction. After the partiessubmitted their respective position papers, the SOLE issued an Order on October 29, 1993, the
dispositive portion of which is herein quoted:
WHEREFORE, the Standard Chartered Bank and the Standard Chartered Bank EmployeesUnionNUBE are hereby ordered to execute a collective bargaining agreement incorporating
the dispositions contained herein. The CBA shall be retroactive to 01 April 1993 and shallremain effective for two years thereafter, or until such time as a new CBA has superseded it. All
provisions in the expired CBA not expressly modified or not passed upon herein are deemedretained while all new provisions which are being demanded by either party are deemed denied,
but without prejudice to such agreements as the parties may have arrived at in the meantime.
The Banks charge for unfair labor practice which it originally filed with the NLRC asNLRC-
NCR Case No. 00-06-04191-93 but which is deemed consolidated herein, is dismissed for lackof merit. On the other hand, the Unions charge for unfair labor practice is similarly dismissed.
Let a copy of this order be furnished the Labor Arbiter in whose sala NLRC-NCR Case No. 00-
06-04191-93 is pending for his guidance and appropriate action.29[29]
The SOLE gave the following economic awards:
1. Wage Increase:a) To be incorporated to present salary rates:Fourth year : 7% of basic monthly salary
Fifth year : 5% of basic monthly salary based on the 4th
year adjusted salary
b) Additional fixed amount:
Fourth year : P600.00 per month
Fifth year : P400.00 per month
2. Group Insurance
a) Hospitalization : P45,000.00
b) Life : P130,000.00c) Accident : P130,000.00
3. Medicine Allowance
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Fourth year : P5,500.00Fifth year : P6,000.00
4. Dental Benefits
Provision of dental retainer as proposed by the Bank, but without diminishing
existing benefits
5. Optical Allowance
Fourth year: P2,000.00Fifth year : P2,500.00
6. Death Assistancea) Employee : P30,000.00
b) Immediate Family Member : P5,000.00
7. Emergency LeaveFive (5) days for each contingency
8. Loansa) Car Loan : P200,000.00
b) Housing Loan : It cannot be denied that the costs attendant to having onesown home have tremendously gone up. The need, therefore, to improve on
this benefit cannot be overemphasized. Thus, the management is urged toincrease the existing and allowable housing loan that the Bank extends to its
employees to an amount that will give meaning and substance to this CBAbenefit.30[30]
The SOLE dismissed the charges of ULP of both the Union and the Bank, explaining that both
parties failed to substantiate their claims. CitingNational Labor Union v. Insular-YebanaTobacco Corporation,31[31]the SOLE stated that ULP charges would prosper only if shown tohave directly prejudiced the public interest.
Dissatisfied, the Union filed a motion for reconsideration with clarification, while the Bank filed
a motion for reconsideration. On December 16, 1993, the SOLE issued a Resolution denying themotions. The Union filed a second motion for reconsideration, which was, likewise, denied on
February 10, 1994.
On March 22, 1994, the Bank and the Union signed the CBA.32[32] Immediately thereafter, thewage increase was effected and the signing bonuses based on the increased wage were
distributed to the employees covered by the CBA.
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The Present Petition
On April 28, 1994, the Union filed this petition for certiorari under Rule 65 of the Rules ofProcedure alleging as follows:
A. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OFDISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISMISSING THEUNIONS CHARGE OF UNFAIR LABOR PRACTICE IN VIEW OF THE CLEAR
EVIDENCE OF RECORD AND ADMISSIONS PROVING THE UNFAIR LABORPRACTICES CHARGED.33[33]
B. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OFDISCRETION AMOUNTING TO LACK OF JURISDICTION IN FAILING TO RULE ON
OTHER UNFAIR LABOR PRACTICES CHARGED.34[34]
C. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISMISSING THECHARGES OF UNFAIR LABOR PRACTICES ON THE GROUND THAT NO PROOF OFINJURY TO THE PUBLIC INTEREST WAS PRESENTED.35[35]
The Union alleges that the SOLE acted with grave abuse of discretion amounting to lack or
excess of jurisdiction when it found that the Bank did not commit unfair labor practice when itinterfered with the Unions choice of negotiator. It argued that, Dioknos suggestion that the
negotiation be limited as a family affair was tantamount to suggesting that FederationPresident Jose Umali, Jr. be excluded from the Unions negotiating panel. It further argued that
contrary to the ruling of the public respondent, damage or injury to the public interest need notbe present in order for unfair labor practice to prosper.
The Union, likewise, pointed out that the public respondent failed to rule on the ULP chargesarising from the Banks surface bargaining. The Union contended that the Bank merely went
through the motions of collective bargaining without the intent to reach an agreement, and madebad faith proposals when it announced that the parties should begin from a clean slate. It argued
that the Bank opened the political provisions up for grabs, which had the effect of diminishingor obliterating the gains that the Union had made.
The Union also accused the Bank of refusing to disclose material and necessary data, even after a
request was made by the Union to validate its guestimates.
In its Comment, the Bank prayed that the petition be dismissed as the Union was estopped,considering that it signed the Collective Bargaining Agreement (CBA) on April 22, 1994. It
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asserted that contrary to the Unions allegations, it was the Union that committed ULP whennegotiator Jose Umali, Jr. hurled invectives at the Banks head negotiator, Cielito Diokno, and
demanded that she be excluded from the Banks negotiating team. Moreover, the Union engagedin blue-sky bargainingand isolated the no strike-no lockout clause of the existing CBA.
The Office of the Solicitor General, in representation of the public respondent, prayed that thepetition be dismissed. It asserted that the Union failed to prove its ULP charges and that thepublic respondent did not commit any grave abuse of discretion in issuing the assailed order and
resolutions.
The Issues
The issues presented for resolution are the following: (a) whether or not the Union was able to
substantiate its claim of unfair labor practice against the Bank arising from the latters allegedinterference with its choice of negotiator; surface bargaining; making bad faith non-economic
proposals; and refusal to furnish the Union with copies of the relevant data; (b) whether or not
the public respondent acted with grave abuse of discretion amounting to lack or excess ofjurisdiction when she issued the assailed order and resolutions; and, (c) whether or not thepetitioner is estopped from filing the instant action.
The Courts Ruling
The petition is bereft of merit.
Interference under Article248 (a) of the Labor Code
The petitioner asserts that the private respondent committed ULP, i.e., interference in theselection of the Unions negotiating panel, when Cielito Diokno, the Banks Human ResourceManager, suggested to the Unions President Eddie L. Divinagracia that Jose P. Umali, Jr.,
President of the NUBE, be excluded from the Unions negotiating panel. In support of its claim,Divinagracia executed an affidavit, stating that prior to the commencement of the negotiation,
Diokno approached him and suggested the exclusion of Umali from the Unions negotiatingpanel, and that during the first meeting, Diokno stated that the negotiation be kept a family
affair.
Citing the cases of U.S. Postal Service36[36] andHarley Davidson Motor Co., Inc., AMF,37[37]the Union claims that interference in the choice of the Unions bargaining panel is tantamount to
ULP.
In the aforecited cases, the alleged ULP was based on the employers violation of Section 8(a)(1)
and (5) of the National Labor Relations Act (NLRA),38[38] which pertain to the interference,
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restraint or coercion of the employer in the employees exercise of their rights to self-organization and to bargain collectively through representatives of their own choosing; and the
refusal of the employer to bargain collectively with the employees representatives. In bothcases, the National Labor Relations Board held that upon the employers refusal to engage in
negotiations with the Union for collective-bargaining contract when the Union includes a person
who is not an employee, or one who is a member or an official of other labor organizations, suchemployer is engaged in unfair labor practice under Section 8(a)(1) and (5) of the NLRA.
The Union further cited the case ofInsular Life Assurance Co., Ltd. Employees AssociationNATU vs. Insular Life Assurance Co., Ltd.,39[39] wherein this Court said that the test of whether
an employer has interfered with and coerced employees in the exercise of their right to self-organization within the meaning of subsection (a)(1) is whether the employer has engaged in
conduct which it may reasonably be said, tends to interfere with the free exercise of employeesrights under Section 3 of the Act.40[40] Further, it is not necessary that there be direct evidence
that any employee was in fact intimidated or coerced by statements of threats of the employer ifthere is a reasonable inference that anti-union conduct of the employer does have an adverse
effect on self-organization and collective bargaining.41[41]
Under the International Labor Organization Convention (ILO) No. 87 FREEDOM OFASSOCIATION AND PROTECTION OF THE RIGHT TO ORGANIZE to which the
Philippines is a signatory, workers and employers, withoutdistinction whatsoever, shall havethe right to establish and, subject only to the rules of the organization concerned, to job
organizations of their own choosing without previous authorization.42[42] Workers andemployers organizations shall have the right to draw up their constitutions and rules, to elect
their representatives in full freedom to organize their administration and activities and toformulate their programs.43[43] Article 2 of ILO Convention No. 98 pertaining to the Right to
Organize and Collective Bargaining, provides:
Article 2
1. Workers and employers organizations shall enjoy adequate protection against any acts
or interference by each other or each others agents or members in their establishment,functioning or administration.
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2. In particular, acts which are designed to promote the establishment of workersorganizations under the domination of employers or employers organizations or to support
workers organizations by financial or other means, with the object of placing such organizationsunder the control of employers or employers organizations within the meaning of this Article.
The aforcited ILO Conventions are incorporated in our Labor Code, particularly in Article 243thereof, which provides:
ART. 243. COVERAGE AND EMPLOYEES RIGHT TO SELF-ORGANIZATION.All personsemployed in commercial, industrial and agricultural enterprises and in religious, charitable,
medical or educational institutions whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of
collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, ruralworkers and those without any definite employers may form labor organizations for their mutual
aid and protection.
and Articles 248 and 249 respecting ULP of employers and labor organizations.
The said ILO Conventions were ratified on December 29, 1953. However, even as early as the
1935 Constitution,44[44] the State had already expressly bestowed protection to labor as part ofthe general provisions. The 1973 Constitution,45[45] on the other hand, declared it as a policy of
the state to afford protection to labor, specifying that the workers rights to self-organization,collective bargaining, security of tenure, and just and humane conditions of work would be
assured. For its part, the 1987 Constitution, aside from making it a policy to protect the rights ofworkers and promote their welfare,46[46] devotes an entire section, emphasizing its mandate to
afford protection to labor, and highlights the principle of shared responsibility betweenworkers and employers to promote industrial peace.47[47]
Article 248(a) of the Labor Code, considers it an unfair labor practice when an employer
interferes, restrains or coerces employees in the exercise of their right to self-organization or theright to form association. The right to self-organization necessarily includes the right to
collective bargaining.
Parenthetically, if an employer interferes in the selection of its negotiators or coerces the Union
to exclude from its panel of negotiators a representative of the Union, and if it can be inferredthat the employer adopted the said act to yield adverse effects on the free exercise to right to self-
organization or on the right to collective bargaining of the employees, ULP under Article 248(a)in connection with Article 243 of the Labor Code is committed.
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In order to show that the employer committed ULP under the Labor Code, substantial evidence isrequired to support the claim. Substantial evidence has been defined as such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion.48[48] In the case at bar,the Union bases its claim of interference on the alleged suggestions of Diokno to exclude Umali
from the Unions negotiating panel.
The circumstances that occurred during the negotiation do not show that the suggestion made byDiokno to Divinagracia is an anti-union conduct from which it can be inferred that the Bank
consciously adopted such act to yield adverse effects on the free exercise of the right to self-organization and collective bargaining of the employees, especially considering that such was
undertaken previous to the commencement of the negotiation and simultaneously withDivinagracias suggestion that the bank lawyers be excluded from its negotiating panel.
The records show that after the initiation of the collective bargaining process, with the inclusion
of Umali in the Unions negotiating panel, the negotiations pushed through. The complaint wasmade only on August 16, 1993 after a deadlock was declared by the Union on June 15, 1993.
It is clear that such ULP charge was merely an afterthought. The accusation occurred after thearguments and differences over the economic provisions became heated and the parties had
become frustrated. It happened after the parties started to involve personalities. As the publicrespondent noted, passions may rise, and as a result, suggestions given under less adversarial
situations may be colored with unintended meanings.49[49] Such is what appears to havehappened in this case.
The Duty to Bargain
Collectively
If at all, the suggestion made by Diokno to Divinagracia should be construed as part of thenormal relations and innocent communications, which are all part of the friendly relations
between the Union and Bank.
The Union alleges that the Bank violated its duty to bargain; hence, committed ULP under
Article 248(g) when it engaged in surface bargaining. It alleged that the Bank just went throughthe motions of bargaining without any intent of reaching an agreement, as evident in the Banks
counter-proposals. It explained that of the 34 economic provisions it made, the Bank only made6 economic counterproposals. Further, as borne by the minutes of the meetings, the Bank, after
indicating the economic provisions it had rejected, accepted, retained or were open fordiscussion, refused to make a list of items it agreed to include in the economic package.
Surface bargaining is defined as going through the motions of negotiating without any legal
intent to reach an agreement.50[50] The resolution of surface bargaining allegations never
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presents an easy issue. The determination of whether a party has engaged in unlawful surfacebargaining is usually a difficult one because it involves, at bottom, a question of the intent of the
party in question, and usually such intent can only be inferred from the totality of the challengedpartys conduct both at and away from thebargaining table.51[51] It involves the question of
whether an employers conduct demonstrates an unwillingness to bargain in good faith or is
merely hard bargaining.52[52]
The minutes of meetings from March 12, 1993 to June 15, 1993 do not show that the Bank had
any intention of violating its duty to bargain with the Union. Records show that after the Unionsent its proposal to the Bank on February 17, 1993, the latter replied with a list of its counter-
proposals on February 24, 1993. Thereafter, meetings were set for the settlement of theirdifferences. The minutes of the meetings show that both the Bank and the Union exchanged
economic and non-economic proposals and counter-proposals.
The Union has not been able to show that the Bank had done acts, both at and away from thebargaining table, which tend to show that it did not want to reach an agreement with the Union or
to settle the differences between it and the Union. Admittedly, the parties were not able to agreeand reached a deadlock. However, it is herein emphasized that the duty to bargain does not
compel either party to agree to a proposal or require the making of a concession.53[53] Hence,the parties failure to agree did not amount to ULP under Article 248(g) for violation of the duty
to bargain.
We can hardly dispute this finding, for it finds support in the evidence. The inference that
respondents did not refuse to bargain collectively with the complaining union because theyaccepted some of the demands while they refused the others even leaving open other demands
for future discussion is correct, especially so when those demands were discussed at a meetingcalled by respondents themselves precisely in view of the letter sent by the union on April 29,
196054[54]
In view of the finding of lack of ULP based on Article 248(g), the accusation that the Bank madebad faith provisions has no leg to stand on. The records show that the Banks counter-proposals
on the non-economic provisions or political provisions did not put up for grabs the entire workof the Union and its predecessors. As can be gleaned from the Banks counter-proposal, there
were many provisions which it proposed to be retained. The revisions on the other provisionswere made after the parties had come to an agreement. Far from buttressing the Unions claim
that the Bank made bad-faith proposals on the non-economic provisions, all these, on thecontrary, disprove such allegations.
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We, likewise, find that the Union failed to substantiate its claim that the Bank refused to furnishthe information it needed.
While the refusal to furnish requested information is in itself an unfair labor practice, and also
supports the inference of surface bargaining,55[55] in the case at bar, Umali, in a meeting dated
May 18, 1993, requested the Bank to validate itsguestimateson the data of the rank and file.However, Umali failed to put his request in writing as provided for in Article 242(c) of the LaborCode:
Article 242. Rights of Legitimate Labor Organization
(c) To be furnished by the employer, upon written request, with the annual audited financialstatements, including the balance sheet and the profit and loss statement, within thirty (30)
calendar days from the date of receipt of the request, after the union has been duly recognized bythe employer or certified as the sole and exclusive bargaining representatives of the employees in
the bargaining unit, or within sixty (60) calendar days before the expiration of the existing
collective bargaining agreement, or during the collective negotiation;
The Union, did not, as the Labor Code requires, send a written request for the issuance of a copy
of the data about the Banks rank and file employees. Moreover, as alleged by the Union, thefact that the Bank made use of the aforesaidguestimates, amounts to a validation of the data it
had used in its presentation.
No Grave Abuse of DiscretionOn the Part of the Public Respondent
The special civil action for certiorari may be availed of when the tribunal, board, or officer
exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction andthere is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law for thepurpose of annulling the proceeding.56[56] Grave abuse of discretion implies such capricious
and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or where the power isexercised in an arbitrary or despotic manner by reason of passion or personal hostility which
must be so patent and gross as to amount to an invasion of positive duty or to a virtual refusal toperform the duty enjoined or to act at all in contemplation of law. Mere abuse of discretion is
not enough.57[57]
While it is true that a showing of prejudice to public interest is not a requisite for ULP charges toprosper, it cannot be said that the public respondent acted in capricious and whimsical exercise
of judgment, equivalent to lack of jurisdiction or excess thereof. Neither was it shown that the
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public respondent exercised its power in an arbitrary and despotic manner by reason of passionor personal hostility.
Estoppel not Applicable
In the Case at Bar
The respondent Bank argues that the petitioner is estopped from raising the issue of ULP when itsigned the new CBA.
Article 1431 of the Civil Code provides:
Through estoppel an admission or representation is rendered conclusive upon the person makingit, and cannot be denied or disproved as against the person relying thereon.
A person, who by his deed or conduct has induced another to act in a particular manner, is barred
from adopting an inconsistent position, attitude or course of conduct that thereby causes loss or
injury to another.58[58]
In the case, however, the approval of the CBA and the release of signing bonus do notnecessarily mean that the Union waived its ULP claim against the Bank during the past
negotiations. After all, the conclusion of the CBA was included in the order of the SOLE, whilethe signing bonus was included in the CBA itself. Moreover, the Union twice filed a motion for
reconsideration respecting its ULP charges against the Bank before the SOLE.
The Union Did Not EngageIn Blue-Sky Bargaining
We, likewise, do not agree that the Union is guilty of ULP for engaging in blue-sky bargainingor making exaggerated or unreasonable proposals.59[59] The Bank failed to show that theeconomic demands made by the Union were exaggerated or unreasonable. The minutes of the
meeting show that the Union based its economic proposals on data of rank and file employeesand the prevailing economic benefits received by bank employees from other foreign banks
doing business in the Philippines and other branches of the Bank in the Asian region.
In sum, we find that the public respondent did not act with grave abuse of discretion amounting
to lack or excess of jurisdiction when it issued the questioned order and resolutions. While theapproval of the CBA and the release of the signing bonus did not estop the Union from pursuing
its claims of ULP against the Bank, we find that the latter did not engage in ULP. We, likewise,
hold that the Union is not guilty of ULP.
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IN LIGHT OF THE FOREGOING,the October 29, 1993 Order and December 16, 1993 andFebruary 10, 1994 Resolutions of then Secretary of Labor Nieves R. Confesor are AFFIRMED.
The Petition is hereby DISMISSED.
SO ORDERED.
Puno, (Chairman), Quisumbing, Austria-Martinez, and Tinga, JJ., concur.
+++++++++++++++++++
4. G.R. No. L-54334 January 22, 1986
KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT,
petitioner,vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANGKILUSAN NG PAGGAWA (KILUSAN), respondents.
Ablan and Associates for petitioner.
Abdulcadir T. Ibrahim for private respondent.
CUEVAS, J.:
Petition for certiorari to annul the decision1of the National Labor Relations Commission
(NLRC) dated July 20, 1979 which found petitioner Sweden Ice Cream guilty of unfair laborpractice for unjustified refusal to bargain, in violation of par. (g) of Article 249
2of the New
Labor Code,3and declared the draft proposal of the Union for a collective bargaining agreement
as the governing collective bargaining agreement between the employees and the management.
The pertinent background facts are as follows:
In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa (Union
for short), a legitimate late labor federation, won and was subsequently certified in a resolutiondated November 29, 1978 by the Bureau of Labor Relations as the sole and exclusive bargainingagent of the rank-and-file employees of Sweden Ice Cream Plant (Company for short). The
Company's motion for reconsideration of the said resolution was denied on January 25, 1978.
Thereafter, and more specifically on December 7, 1978, the Union furnished4the Company with
two copies of its proposed collective bargaining agreement. At the same time, it requested the
Company for its counter proposals. Eliciting no response to the aforesaid request, the Union
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again wrote the Company reiterating its request for collective bargaining negotiations and for theCompany to furnish them with its counter proposals. Both requests were ignored and remained
unacted upon by the Company.
Left with no other alternative in its attempt to bring the Company to the bargaining table, the
Union, on February 14, 1979, filed a "Notice of Strike", with the Bureau of Labor Relations(BLR) on ground of unresolved economic issues in collective bargaining.5
Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But allattempts towards an amicable settlement failed, prompting the Bureau of Labor Relations to
certify the case to the National Labor Relations Commission (NLRC) for compulsory arbitrationpursuant to Presidential Decree No. 823, as amended. The labor arbiter, Andres Fidelino, to
whom the case was assigned, set the initial hearing for April 29, 1979. For failure however, ofthe parties to submit their respective position papers as required, the said hearing was cancelled
and reset to another date. Meanwhile, the Union submitted its position paper. The Company didnot, and instead requested for a resetting which was granted. The Company was directed anew to
submit its financial statements for the years 1976, 1977, and 1978.
The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of
record, Atty. Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato Panganiban formally enteredhis appearance as counsel for the Company only to request for another postponement allegedly
for the purpose of acquainting himself with the case. Meanwhile, the Company submitted itsposition paper on May 28, 1979.
When the case was called for hearing on June 4, 1979 as scheduled, the Company's
representative, Mr. Ching, who was supposed to be examined, failed to appear. Atty. Panganibanthen requested for another postponement which the labor arbiter denied. He also ruled that the
Company has waived its right to present further evidence and, therefore, considered the casesubmitted for resolution.
On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor
Relations Commission. On July 20, 1979, the National Labor Relations Commission rendered itsdecision, the dispositive portion of which reads as follows:
WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty ofunjustified refusal to bargain, in violation of Section (g) Article 248 (now Article
249), of P.D. 442, as amended. Further, the draft proposal for a collectivebargaining agreement (Exh. "E ") hereto attached and made an integral part of this
decision, sent by the Union (Private respondent) to the respondent (petitionerherein) and which is hereby found to be reasonable under the premises, is hereby
declared to be the collective agreement which should govern the relationshipbetween the parties herein.
SO ORDERED. (Emphasis supplied)
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Petitioner now comes before Us assailing the aforesaid decision contending that the NationalLabor Relations Commission acted without or in excess of its jurisdiction or with grave abuse of
discretion amounting to lack of jurisdiction in rendering the challenged decision. On August 4,1980, this Court dismissed the petition for lack of merit. Upon motion of the petitioner, however,
the Resolution of dismissal was reconsidered and the petition was given due course in a
Resolution dated April 1, 1981.
Petitioner Company now maintains that its right to procedural due process has been violated
when it was precluded from presenting further evidence in support of its stand and when itsrequest for further postponement was denied. Petitioner further contends that the National Labor
Relations Commission's finding of unfair labor practice for refusal to bargain is not supported bylaw and the evidence considering that it was only on May 24, 1979 when the Union furnished
them with a copy of the proposed Collective Bargaining Agreement and it was only then thatthey came to know of the Union's demands; and finally, that the Collective Bargaining
Agreement approved and adopted by the National Labor Relations Commission is unreasonableand lacks legal basis.
The petition lacks merit. Consequently, its dismissal is in order.
Collective bargaining which is defined as negotiations towards a collective agreement,6is one of
the democratic frameworks under the New Labor Code, designed to stabilize the relation
between labor and management and to create a climate of sound and stable industrial peace. It isa mutual responsibility of the employer and the Union and is characterized as a legal obligation.
So much so that Article 249, par. (g) of the Labor Code makes it an unfair labor practice for anemployer to refuse "to meet and convene promptly and expeditiously in good faith for the
purpose of negotiating an agreement with respect to wages, hours of work, and all other termsand conditions of employment including proposals for adjusting any grievance or question
arising under such an agreement and executing a contract incorporating such agreement, ifrequested by either party.
While it is a mutual obligation of the parties to bargain, the employer, however, is not under any
legal duty to initiate contract negotiation.7The mechanics of collective bargaining is set in
motion only when the following jurisdictional preconditions are present, namely, (1) possession
of the status of majority representation of the employees' representative in accordance with anyof the means of selection 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 Labor Code .... all of which preconditions are undisputedly present in the instant case.
From the over-all conduct of petitioner company in relation to the task of negotiation, there can
be no doubt that the Union has a valid cause to complain against its (Company's) attitude, thetotality of which is indicative of the latter's disregard of, and failure to live up to, what isenjoined by the Labor Codeto bargain in good faith.
We are in total conformity with respondent NLRC's pronouncement that petitioner Company is
GUILTY of unfair labor practice. It has been indubitably established that (1) respondent Unionwas a duly certified bargaining agent; (2) it made a definite request to bargain, accompanied with
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a copy of the proposed Collective Bargaining Agreement, to the Company not only once buttwice which were left unanswered and unacted upon; and (3) the Company made no counter
proposal whatsoever all of which conclusively indicate lack of a sincere desire to negotiate.8A
Company's refusal to make counter proposal if considered in relation to the entire bargaining
process, may indicate bad faith and this is specially true where the Union's request for a counter
proposal is left unanswered.
9
Even during the period of compulsory arbitration before theNLRC, petitioner Company's approach and attitude-stalling the negotiation by a series ofpostponements, non-appearance at the hearing conducted, and undue delay in submitting its
financial statements, lead to no other conclusion except that it is unwilling to negotiate and reachan agreement with the Union. Petitioner has not at any instance, evinced good faith or
willingness to discuss freely and fully the claims and demands set forth by the Union much lessjustify its opposition thereto.
10
The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union
(PAFLU) vs. Herald Publications11
the rule had been laid down that "unfair labor practice iscommitted when it is shown that the respondent employer, after having been served with a
written bargaining proposal by the petitioning Union, did not even bother to submit an answer orreply to the said proposal This doctrine was reiterated anew inBradman vs. Court of Industrial
Relations12
wherein it was further ruled that "while the law does not compel the parties to reachan agreement, it does contemplate that both parties will approach the negotiation with an open
mind and make a reasonable effort to reach a common ground of agreement
As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitionercapitalizes on the issue of due process claiming, that it was denied the right to be heard and
present its side when the Labor Arbiter denied the Company's motion for further postponement.
Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements
granted in its behalf, the claimed denial of due process appeared totally bereft of any legal andfactual support. As herein earlier stated, petitioner had not even honored respondent Union with
any reply to the latter's successive letters, all geared towards bringing the Company to thebargaining table. It did not even bother to furnish or serve the Union with its counter proposal
despite persistent requests made therefor. Certainly, the moves and overall behavior ofpetitioner-company were in total derogation of the policy enshrined in the New Labor Code
which is aimed towards expediting settlement of economic disputes. Hence, this Court is notprepared to affix its imprimatur to such an illegal scheme and dubious maneuvers.
Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining
Agreement which was approved and adopted by the NLRC is a total nullity for it lacks thecompany's consent, much less its argument that once the Collective Bargaining Agreement is
implemented, the Company will face the prospect of closing down because it has to pay astaggering amount of economic benefits to the Union that will equal if not exceed its capital.
Such a stand and the evidence in support thereof should have been presented before the LaborArbiter which is the proper forum for the purpose.
We agree with the pronouncement that it is not obligatory upon either side of a labor controversyto precipitately accept or agree to the proposals of the other. But an erring party should not be
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tolerated and allowed with impunity to resort to schemes feigning negotiations by going throughempty gestures.
13More so, as in the instant case, where the intervention of the National Labor
Relations Commission was properly sought for after conciliation efforts undertaken by the BLRfailed. The instant case being a certified one, it must be resolved by the NLRC pursuant to the
mandate of P.D. 873, as amended, which authorizes the said body to determine the
reasonableness of the terms and conditions of employment embodied in any CollectiveBargaining Agreement. To that extent, utmost deference to its findings of reasonableness of anyCollective Bargaining Agreement as the governing agreement by the employees and
management must be accorded due respect by this Court.
WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued onAugust 27, 1980, is LIFTED and SET ASIDE.
No pronouncement as to costs.
SO ORDERED.
Concepcion, Jr., (Chairman), Abad Santos, Escolin and Alampay, JJ., concur.
++++++++++++++++++++++++++
FIRST DIVISION
[G.R. No. 111262. September 19, 1996]
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, represented by its PresidentRAYMUNDO HIPOLITO, JR.,petitioner, vs. HON. MA. NIEVES D. CONFESOR, Secretary
of Labor, Dept. of Labor & Employment, SAN MIGUEL CORPORATION, MAGNOLIACORPORATION (Formerly, Magnolia Plant) and SAN MIGUEL FOODS, INC. (Formerly, B-
Meg Plant), respondents.
D E C I S I O N
KAPUNAN,J.:
This is a petition for certiorariassailing the Order of the Secretary of Labor rendered on
February 15, 1993 involving a labor dispute at San Miguel Corporation.
The facts are as follows:
On June 28, 1990, petitioner-union San Miguel Corporation Employees Union - PTGWO entered
into a Collective Bargaining Agreement (CBA) with private respondent San Miguel Corporation(SMC) to take effect upon the expiration of the previous CBA or on June 30, 1989.
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This CBA provided, among others, that:
ARTICLE XIV
DURATION OF AGREEMENT
SECTION 1. This Agreement which shall be binding upon the parties hereto and their respective
successors-in-interest, shall become effective and shall remain in force and effect until June 30,1992.
SEC. 2. In accordance with Article 253-A of the Labor Code as amended, the term of this
Agreement insofar as the representation aspect is concerned, shall be for five (5) years from July1, 1989 to June 30, 1994. Hence, the freedom period for purposes of such representation shall be
sixty (60) days prior to June 30, 1994.
SEC. 3. Sixty (60) days prior to June 30, 1992 either party may initiate negotiations of all
provisions of this Agreement, except insofar as the representation aspect is concerned. If noagreement is reached in such negotiations, this Agreement shall nevertheless remain in force upto the time a subsequent agreement is reached by the parties.i[1]
In keeping with their vision and long term strategy for business expansion, SMC managementinformed its employees in a letter dated August 13, 1991ii[2]that the company which was
composed of four operating divisions namely: (1) Beer, (2) Packaging, (3) Feeds and Livestocks,(4) Magnolia and Agri-business would undergo a restructuring.iii[3]
Effective October 1, 1991, Magnolia and Feeds and Livestock Division were spun-off and
became two separate and distinct corporations: Magnolia Corporation (Magnolia) and San
Miguel Foods, Inc. (SMFI). Notwithstanding the spin-offs, the CBA remained in force andeffect.
After June 30, 1992, the CBA was renegotiated in accordance with the terms of the CBA andArticle 253-A of the Labor Code. Negotiations started sometime in July, 1992 with the two
parties submitting their respective proposals and counterproposals.
During the negotiations, the petitioner-union insisted that the bargaining unit of SMC should still
include the employees of the spun-off corporations: Magnolia and SMFI; and that therenegotiated terms of the CBA shall be effective only for the remaining period of two years or
until June 30, 1994.
SMC, on the other hand, contended that the members/employees who had moved to Magnoliaand SMFI, automatically ceased to be part of the bargaining unit at the SMC. Furthermore, the
CBA should be effective for three years in accordance with Art. 253-A of the Labor Code.
Unable to agree on these issues with respect to the bargaining unit and duration of the CBA,petitioner-union declared a deadlock on September 29, 1990.
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On October 2, 1992, a Notice of Strike was filed against SMC.
In order to avert a strike, SMC requested the National Conciliation and Mediation Board(NCMB) to conduct preventive mediation. No settlement was arrived at despite several meetings
held between the parties.
On November 3, 1992, a strike vote was conducted which resulted in a yes vote in favor of astrike.
On November 4, 1992, private respondents SMC, Magnolia and SMFI filed a petition with theSecretary of Labor praying that the latter assume jurisdiction over the labor dispute in a vital
industry.
As prayed for, the Secretary of Labor assumed jurisdiction over the labor dispute on November10, 1992.iv[4] Several conciliation meetings were held but still no agreement/settlement was
arrived at by both parties.
After the parties submitted their respective position papers, the Secretary of Labor issued theassailed Order on February 15, 1993 directing, among others, that the renegotiated terms of the
CBA shall be effective for the period of three (3) years from June 30, 1992; and that such CBAshall cover only the employees of SMC and not of Magnolia and SMFI.
Dissatisfied, petitioner-union now comes to this Court questioning this Order of the Secretary ofLabor.
Subsequently, on March 30, 1995,v[5] petitioner-union filed a Motion for Issuance of a
Temporary Restraining Order or Writ of Preliminary Injunction to enjoin the holding of the
certification elections in the different companies, maintaining that the employees of Magnoliaand SMFI fall within the bargaining unit of SMC.
On March 29, 1995, the Court issued a resolution granting the temporary restraining orderprayed for.vi[6]
Meanwhile, an urgent motion for leave to intervenevii[7]in the case was filed by the Samahan ng
Malayang Manggagawa-San Miguel Corporation-Federation of Free Workers (SMM-SMC-
FFW) through its authorized representiative, Elmer S. Armando, alleging that it is one of thecontending parties adversely effected by the temporary restraining order.
The Intervenor cited the case ofDaniel S.L. Borbon v. Hon. Bienvenido B. Laguesma,viii[8] G.R.No. 101766, March 5, 1993, where the Court recognized the separation of the employees ofMagnolia from the SMC bargaining unit. It then prayed for the lifting of the temporary
restraining order.
Likewise, Efren Carreon, Acting President of the SMCEU-PTGWO, filed a petition for thewithdrawal/dismissal of the petition considering that the temporary restraining order jeopardized
the employees right to conclude a new CBA. At the same time, he challenged the legal
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personality of Mr. Raymundo Hipolito, Jr. to represent the Union as its president when the latterwas already officially dismissed from the company on October 4, 1994.
Amidst all these pleadings, the following primordial issues arise:
1) Whether or not the duration of the renegotiated terms of the CBA is to be effective for threeyears or for only two years; and
2) Whether or not the bargaining unit of SMC includes also the employees of Magnolia and
SMFI.
Petitioner-union contends that the duration for the non-representation provisions of the CBAshould be coterminous with the term of the bargaining agency which in effect shall be for the
remaining two years of the current CBA, citing a previous decision of the Secretary of Labor onDecember 14, 1992 in the matter of the labor dispute at Philippine Refining Company.ix[9]
However, the Secretary of Labor, in her questioned Order of February 15, 1993 ruled that therenegotiated terms of the CBA at SMC should run for a period of three (3) years.
We agree with the Secretary of Labor.
Pertinent to the first issue is Art. 253-A of the Labor Code as amended which reads:
ART. 253-A. Terms of a Collective Bargaining Agreement.Any Collective Bargaining
Agreement that the parties may enter into shall, insofar as the representation aspect is concerned,be for a term of five (5) years. No petition questioning the majority status of the incumbent
bargaining agent shall be entertained and no certification election shall be conducted by the
Department of Labor and Employment outside of the sixty-day period immediately before thedate of expiry of such five year term of the Collective Bargaining Agreement. All otherprovisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3)
years after its execution. Any agreement on such other provisions of the Collective BargainingAgreement entered into within six (6) months from the date of expiry of the term of such other
provisions as fixed in such Collective Bargaining Agreement, shall retroact to the dayimmediately following such date. If any such agreement is entered into beyond six months, the
parties shall agree on the duration of retroactivity thereof. In case of a deadlock in therenegotiation of the collective bargaining agreement, the parties may exercise their rights under
this Code. (underlining supplied.)
Article 253-A is a new provision. This was incorporated by Section 21 of Republic Act No.6715 (the Herrera-Veloso Law) which took effect on March 21, 1989. This new provision statesthat the CBA has a term of five (5) years instead of three years, before the amendment of the law
as far as the representation aspect is concerned. All other provisions of the CBA shall benegotiated not later than three (3) years after its execution. The representation aspect refers to
the identity and majority status of the union that negotiated the CBA as the exclusive bargainingrepresentative of the appropriate bargaining unit concerned. All other provisions simply refers
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to the rest of the CBA, economic as well as non-economic provisions, exceptrepresentation.x[10]
As the Secretary of Labor herself observed in the instant case, the law is clear and definite on the
duration of the CBA insofar as the representation aspect is concerned, but is quite ambiguous
with the terms of the other provisions of the CBA. It is a cardinal principle of statutoryconstruction that the Court must ascertain the legislative intent for the purpose of giving effect toany statute. The history of the times and state of the things existing when the act was framed or
adopted must be followed and the conditions of the things at the time of the enactment of the lawshould be considered to determine the legislative intent.xi[11] We look into the discussions
leading to the passage of the law:
THE CHAIRMAN (REP. VELASCO): . . . the CBA, insofar as the economic provisions areconcerned . . .
THE CHAIRMAN (SEN. HERRERA): Maximum of three years?
THE CHAIRMAN (SEN. VELOSO): Maximum of three years.
THE CHAIRMAN (SEN. HERRERA): Present practice?
THE CHAIRMAN (REP. VELOSO): In other words, after three years puwede nang
magnegotiate in that CBA for the remaining two years.
THE CHAIRMAN (REP. HERRERA): You can negotiate for one year, two years or three yearsbut assuming three years which, I think, thats the likelihood. . . .
THE CHAIRMAN (REP. VELOSO): Yes.
THE CHAIRMAN (SEN. HERRERA): Three years, the new union, assuming there will be achange of agent, at least he has one year to administer and to adjust, to develop rapport with the
management. Yan ang importante.
You know, for us na nagne-negotiate, and hazard talaga sa negotiation, when we negotiate withsomebody na hindi natin kilala, then, we are governed by our biases na ito ay destroyer ng
Labor; ang mga employer, ito bayaran ko lang ito okay na.
Yan ang nangyayari, but let us give that allowance for one year to let them know.
Actually, ang thrust natin ay industrial peace, and there can be no industrial peace if you
encourage union to fight each other. Yan ang problema.xii[12]
x x x x x x x x x
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HON. ISIDRO: Madali iyan, kasi these two periods that are mentioned in the CBA seem toprovide some doubts later on in the implementation. Sabi kasi rito, insofar as representation
issue is concerned, seven years ang lifetime . . .
HON. CHAIRMAN HERRERA: Five years.
HON. ISIDRO: Five years, all the others three years.
HON. CHAIRMAN HERRERA: No. Ang three years duon sa terms and conditions, not later
than three years.
HON. ISIDRO: Not later than three years, so within three years you have to make a new CBA.
HON. CHAIRMAN HERRERA: Yes.
HON. ISIDRO: That is again for purposes of renewing the terms, three years na naman iyan
then, seven years . . .
HON. CHAIRMAN HERRERA: Not later than three years.
HON. ISIDRO: Assuming that they usually follow the periodthree years nang three years,but under this law with respect to representationfive years, ano? Now, after three years,
nagkaroon ng bagong terms, tapos na iyong term, renewed na iyong terms, ang karapatan noonsa representation issue mayroon pang two years left.
HON. CHAIRMAN HERRERA: One year na lang because six years nang lahat, three plusthree.
HON ISIDRO: Hindi, two years pa rin ang natitira, eh. Three years pa lang ang natatapos. So,
another CBA was formed and this CBA mayroon na naman siyang bagong five years withrespect to representation issue.
HON. CHAIRMAN HERRERA: Hindi. Hindi na. Ganito iyan. Iyong terms and conditions for
three years.
HON. ISIDRO: Yes.
HON. CHAIRMAN HERRERA: On the third year you can start negotiating to change the terms
and conditions.
HON. ISIDRO: Yes.
HON. CHAIRMAN HERRERA: Assuming you will follow the practice . . .
HON. ISIDRO: Oo.
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HON. CHAIRMAN HERRERA: But on the fifth year, ang representation status now can bequestioned, so baka puwedeng magkaroon ng certification election. If the incumbent union
loses, then the new union administers the contract for one year to give him time to know hiscounterpartthe employer, before he can negotiate for a new term. Iyan ang advantage.
HON. ISIDRO: Kasi, when the CBA has only a three-year lifetime with respect to the terms andconditions and then, so you have to renew that in three yearsyou ren