9. SAN MIGUEL CORP. VS HON. LAGUESMA and NORTH LUZON 10. CAPITOL MEDICAL CENTER, INC. vs. HON.

ITOL MEDICAL CENTER, INC. vs. HON. CRESENCIANO B.

MAGNOLIA SALES LABOR UNION-INDEPENDENT TRAJANO and CAPITOL MEDICAL CENTER EMPLOYEES ASSOCIATION-
G.R. No. 100485 September 21, 1994 AFW
G.R. No. 155690  June 30, 2005
FACTS:
Private respondent union filed for a petition for certification election
among all the regular sales personnel of Magnolia Dairy Products in the North
FACTS:
Luzon Area. This was opposed by the petitioner and questioned the
appropriateness of the bargaining unit to be represented by the union. It claimed
that its bargaining history in its sales offices, plants and warehouses is to have a Capitol Medical Center, Inc., petitioner, is a hospital with address at Panay
separate bargaining unit for each sales office. During the hearing of the petition, Avenue corner Scout Magbanua Street, Quezon City. Upon the other hand,
the substitute lawyer of the petitioner withdrew its opposition and agreed to Capitol Medical Center Employees Association-Alliance of Filipino
consider one bargaining unit in the mentioned sales office. Upon the order of the Workers, respondent, is a duly registered labor union acting as the certified
Mediator-Arbiter certifying the union as the sole and exclusive bargaining agent collective bargaining agent of the rank-and-file employees of petitioner hospital.
for all the regular sales personnel in the North Luzon area, the petitioner
appealed to the Secretary of Labor contending a mistake in the decision brought On October 2, 1997, respondent union, through its president Jaime N. Ibabao,
by its substitute lawyer. In a petition for certiorari,the petitioner contends that sent petitioner a letter requesting a negotiation of their Collective Bargaining
the prior collective bargaining is the most pervasive criterion in determining the Agreement (CBA).
approriateness of the CBA.

ISSUE: Whether or not the union represents an appropriate bargaining unit. In its reply dated October 10, 1997, petitioner, challenging the union’s
legitimacy, refused to bargain with respondent. Subsequently or on October 15,
HELD: 1997, petitioner filed with the Bureau of Labor Relations (BLR), Department of
Yes. The court ruled in accordance with the tests in determining an Labor and Employment, a petition for cancellation of respondent’s certificate of
appropriate bargaining unit. The fundamental factors in determining the registration, docketed as NCR-OD-9710-006-IRD.3
appropriate collective bargaining unit are: (1) the will of the employees (Globe
Doctrine); (2) affinity and unity of the employees' interest, such as substantial For its part, on October 29, 1997, respondent filed with the National Conciliation
similarity of work and duties, or similarity of compensation and working and Mediation Board (NCMB), National Capital Region, a notice of strike,
conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining docketed as NCMB-NCR-NS-10-453-97. Respondent alleged that petitioner’s
history; and (4) similarity of employment status. Contrary to petitioner's refusal to bargain constitutes unfair labor practice. Despite several conferences
assertion, the Court has categorically ruled that the existence of a prior and efforts of the designated conciliator-mediator, the parties failed to reach an
collective bargaining history is neither decisive nor conclusive in the amicable settlement.Thus, respondent staged a strike.
determination of what constitutes an appropriate bargaining unit. 

Indeed, the test of grouping is mutuality or commonality of interests. On December 4, 1997, former Labor Secretary Leonardo A. Quisumbing, now
The employees sought to be represented by the collective bargaining agent must Associate Justice of this Court, issued an Order assuming jurisdiction over the
have substantial mutual interests in terms of employment and working labor dispute and ordering all striking workers to return to work and the
conditions as evinced by the type of work they perform. In the case at bench, management to resume normal operations, thus:
respondent union sought to represent the sales personnel in the various
Magnolia sales offices in northern Luzon. There is similarity of employment Meantime, on October 1, 1998, the Regional Director, in NCR-OD-9710-006-IRD,
status for only the regular sales personnel in the north Luzon area are covered. issued an Order denying the petition for cancellation of respondent union’s
They have the same duties and responsibilities and substantially similar certificate of registration.5
compensation and working conditions. The commonality of interest among he
sales personnel in the north Luzon sales area cannot be gainsaid. Further, the
On September 20, 2001, the Appellate Court rendered a Decision affirming the
petitioner cannot insist that there should be one bargaining unit. What greatly
Orders of the Secretary of Labor. The Court of Appeals held:
militates against this position is the meager number of sales personnel in each
of the Magnolia sales office in northern Luzon. Even the bargaining unit sought
to be represented by respondent union in the entire north Luzon sales area In order to allow an employer to validly suspend the bargaining process, there
consists only of approximately must be a valid petition for certification election. The mere filing of a petition
fifty-five (55) employees. Surely, it would not be for the best interest of these does not ipso facto justify the suspension of negotiation by the employer
employees if they would further be fractionalized. The adage "there is strength (Colegio de San Juan de Letran vs. Association of Employees and Faculty of
in number" is the very rationale underlying the formation of a labor union. Letran and Eleanor Ambas, G.R. No. 141471, September 18, 2000). If pending a
petition for certification, the collective bargaining is allowed by the Supreme
Court to proceed, with more reason should the collective bargaining (in this
case) continue since the High Court had recognized the respondent as the
certified bargaining agent in spite of several petitions for cancellation filed
against it.

ISSUE: 11. NATIONAL ASSOCIATION OF FREE TRADE UNIONS (NAFTU) vs

MAINIT LUMBER DEVELOPMENT COMPANY WORKERS UNION
Gr. No. 79526, 192 SCRA 598, December 21, 1990
Whether the petition for the cancellation of respondent union’s certificate of
registration involves a prejudicial question that should first be settled before the FACTS:
Secretary of Labor could order the parties to bargain collectively.
Private respondent, Mainit Lumber Development Company Workers Union-
HELD: United Lumber and General Workers of the Philippines (MALDECOWU-ULGWP),
a legitimate labor organization filed with Regional Office Ministry of Labor and
Employment a petition for certification election to determine the sole and
No. As aptly stated by the Solicitor General in his comment on the petition, the exclusive collective bargaining representative among the rank and file
Secretary of Labor correctly ruled that the pendency of a petition for cancellation workers/employees of the MALDECO.
of union registration does not preclude collective bargaining, thus:
During the scheduled hearing, they submitted position papers. Petitioner
"That there is a pending cancellation proceedings against the respondent Union ULGWP, private respondent herein, alleged that there was no certification
is not a bar to set in motion the mechanics of collective bargaining. If a election conducted within 12 mos prior to the filing of the petition. The Med-
certification election may still be ordered despite the pendency of a petition to Arbiter granted the petition for certification election.
cancel the union’s registration certificate (National Union of Bank Employees vs.
Minister of Labor, 110 SCRA 274), more so should the collective bargaining NAFTU appealed the decision on the ground that MALDECO was composed of 2
process continue despite its pendency. We must emphasize that the majority bargaining units, the Sawmill Division and the Logging Division, but both the
status of the respondent Union is not affected by the pendency of the Petition for petition and decision treated these separate and distinct units only as one.
Cancellation pending against it. Unless its certificate of registration and its status
as the certified bargaining agent are revoked, the Hospital is, by express Bureau of Labor Relations affirmed the decision. Thus, certification election was
provision of the law, duty bound to collectively bargain with the Union. Indeed, held on separate dates and in said election, MALDECO-ULGWP garnered 146
no less than the Supreme Court already ordered the Hospital to collectively votes and NAFTU 2 votes.
bargain with the Union when it affirmed the resolution of this Office dated
November 18, 1994 directing the management of the Hospital to negotiate a NAFTU filed an election protest alleging massive vote buying accompanied with
collective bargaining agreement with the Union. That was the categorical grave and serious threat force and intimidation on the lives of 25 applicants.
directive of the High Court in its Resolution dated February 4, 1997 in Capitol Med-arbiter dismissed the election protest. NAFTU appealed the order of the
Medical Center Alliance of Concerned Employees-United Filipino Service Worker Med-arbiter to the Bureau of Labor Relations which denied the appeal and 2
vs. Hon. Bienvenido E. Laguesma, et al., G.R. No. L-118915." motions for reconsideration.

Moreover, as mentioned earlier, during the pendency of this case before the
ISSUES:
Court of Appeals, the Regional Director, in NCR-OD-9710-006-IRD, issued an
Whether or not there was massive vote buying and serious threat to life to
Order on October 1, 1998 denying the petition for cancellation of respondent’s
justify invalidating the result of the election.
certificate of registration. This Order became final and executory and recorded in
the BLR’s Book of Entries of Judgments on June 3, 1999.
Whether or not an election protest in a certification election can be given due
course even if not entered in the minutes of the election.

HELD:

Both no. The court ruled, after a careful perusal of the records of this case and
after considering, adducing and weighing all the pleadings, arguments, etc. and
the circumstances attendant to the instant case, this Office is of the opinion
that the grounds relied upon by the protestant NAFTU in its protest are bereft
of any merit, hence, this Office finds no cogent reason to order the invalidation
or annulment of the certification election under protest or the holding of a run-
off election thereat between no union and the protestee, MALDECOWU-ULGWP.
Indeed, the minutes of said certification elections conducted both at the
sawmill and logging departments on August 15 and 21, 1986 respectively, of employees, 116 qualify as managerial employees while the rest who are holding
the respondent/employer showed that there was no protest on massive vote confidential or technical positions should likewise be excluded.
buying accompanied with grave and serious threats, force and intimidation
raised by any of the parties who were ably represented in said elections.
Paragraph 2, Section 9, Rule 6 of the Rules and Regulations implementing the
Labor Code of the Philippines (now Section 3, Rule VI, Book 5 of the Omnibus ISSUE:
Rules Implementing the Labor Code) provides that protests not so raised and
Whether or not petitioner KNITJOY'S monthly-paid regular rank-and-file
contained in the minutes of the proceedings are deemed waived. Allegations of
employees can constitute an appropriate bargaining unit separate and distinct
vote buying, grave and serious threats, force and intimidation are questions of
from the existing unit composed of daily or piece-rate paid regular rank-and-file
fact which should be contained in the minutes of said proceedings.
employees, and
There is no clear and convincing proof presented by the protestant in support Whether or not the inclusion in the coverage of the new CBA between KNITJOY
of its contention, hence, we have no other alternative than to uphold the and CFW of the monthly-paid rank-and-file employees bars the holding of a
election results certification election among the said monthly paid employees.

HELD:

12.KNITJOY MANUFACTURING v. PURA FERRER-CALLEJA We decide for the respondents.

GR No. 81883, 1992-09-23
1. The suggested bias of the Labor Code in favor of the one company-one
union policy, anchored on the greater mutual benefits which the parties
FACTS:
could derive, especially in the case of employees whose bargaining
Petitioner KNITJOY had a collective bargaining agreement (CBA) with the strength could undeniably be enhanced by their unity and... solidarity
Federation of Filipino Workers (FFW). The bargaining unit covered only the but diminished by their disunity, division and dissension, is not without
regular rank-and-file employees of KNITJOY paid on a daily or piece-rate basis. exceptions.
It did not include regular rank-and-file office... and production employees paid
on a monthly basis. The present Article 245 of the Labor Code expressly allows supervisory
employees who are not performing managerial functions to join, assist or form
The CBA expired on 15 June 1987. their separate union but bars them from membership in a labor organization of
the rank-and-file employees.
Prior to its expiration,... the Trade Union of the Philippines and Allied Services
(TUPAS) filed a petition for the holding of a certification election among "ART. 245. Ineligibility of managerial employees to join any labor organization;
KNITJOY's regular rank-and-file employees paid on a daily and piece-rate basis. right of supervisory employees. -- Managerial employees are not eligible to join,
Excluded were the regular... rank-and-file employees paid on a monthly basis. In assist or form any labor organization.
the certification election conducted on 10 June 1987, CFW emerged as the
winner; thereafter, negotiations for a new CBA between CFW and KNITJOY Supervisory employees shall not be eligible for membership in a labor
commenced. organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own."
during the pendency of the said negotiations,... private respondent KMEU filed a
petition for certification election among KNITJOY's regular rank-and-file monthly This provision obviously allows more than one union in a company.
paid employees
Even Section 2(c), Rule V, Book V of the Implementing Rules and Regulations of
The petition was dismissed in the Order of 4 September 1987 of Med-Arbiter the Labor Code, which seeks to implement the policy, also recognizes
Rolando S. de la Cruz exceptions. It reads:

KMEU filed a motion to reconsider this order, which was treated as an appeal by "SEC. 2. Who may file. -- Any legitimate labor organization or the employer,
the Bureau of Labor Relations (BLR). when requested to bargain collectively, may file the petition.

On 1 December 1987, public respondent Pura Ferrer-Calleja, Director of the BLR, The petition, when filed by a legitimate labor organization shall contain, among
handed down a Decision... reversing the order of Med-Arbiter de la Cruz. others:... x x x

Respondent Director brushed aside KNITJOY's arguments that the monthly-paid (c) description of the bargaining unit which shall be the employer unit unless
employees have the same working incentives as their counterparts, the daily- circumstances otherwise require; x x x."
paid workers; that the existing collective bargaining agent (CFW) is willing to
include the monthly-paid employees; and that... out of the 212 monthly-paid
The right to form a union or association or to self-organization comprehends two union and to enter into collective bargaining negotiations. Stated differently,
(2) broad notions, to wit: (a) the liberty or freedom, i.e., the absence of KNITJOY and CFW recognize the fact that the existing bargaining unit in the
restraint which guarantees that the employee may act for himself without being former is not — and has never been — the employer unit. Given this historical
prevented by... law, and (b) the power, by virtue of which an employee may, as and factual setting, KMEU had the unquestioned and undisputed right to seek
he pleases, join or refrain from joining an association. certification as the exclusive bargaining representative for the monthly-paid
rank-and-file employees; both KNITJOY and CFW cannot block the same on the
basis of this Court’s declaration in Bulletin Publishing Corp. v. Hon. Sanchez 15
and General Rubber and Footwear Corp. v. Bureau of Labor Relations (155 SCRA
LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR RELATIONS; ONE 283 [1987]) regarding the one-company-one union concept.
COMPANY-ONE UNION POLICY; EXCEPTION. — The suggested bias of the Labor
Code in favor of the one company-one union policy, anchored on the greater ID.; ID.; ID.; CERTIFICATION ELECTION; RESULTS THEREOF CONFINED ONLY
mutual benefits which the parties could derive, especially in the case of TO THE GROUP IT REPRESENTS; CBA ENTERED DOES NOT BAR HOLDING OF
employees whose bargaining strength could undeniably be enhanced by their ANOTHER CERTIFICATION ELECTION FOR THE OTHER GROUP; CASE AT BAR. —
unity and solidarity but diminished by their disunity, division and dissension, is Considering that (a) the TUPAS solicited certification election was strictly
not without exceptions. The present Article 245 of the Labor Code expressly confined to the rank-and-file employees who are paid on a daily or piece-rate
allows supervisory employees who are not performing managerial functions to basis, (b) the results of the election must also necessarily confine the certified
join, assist or form their separate union but bars them from membership in a union’s representation to the group it represents and (c) the issue of the plight
labor organization of the rank-and-file employees. Even Section 2(c), Rule V, of the monthly-paid employees was still pending, KNITJOY and CFW clearly acted
Book V of the Implementing Rules and Regulations of the Labor Code, which with palpable bad faith and malice in including within the scope of the new CBA
seeks to implement the policy, also recognizes exceptions. The usual exception, these monthly-paid employees. Thus was effected a conspiracy to defeat and
of course, is where the employer unit has to give way to the other units like the suppress the right of the KMEU and its members to bargain collectively and
craft unit, plant unit, or a subdivision thereof, the recognition of these negotiate for themselves, to impose upon the latter a contract the negotiation
exceptions takes into account the policy to assure employees of the fullest for which they were not even given notice of, consulted or allowed to participate
freedom in exercising their rights. Otherwise stated, the one company-one union in, and to oust from the BLR the pending appeal on the certification issue. In the
policy must yield to the right of the employees to form unions or associations for latter case, KNITJOY and CFW are guilty of contumacious conduct. It goes
purposes not contrary to law, to self-organization and to enter into collective without saying then that the new CBA cannot validly include in its scope or
bargaining negotiations, among others, which the Constitution guarantees. coverage the monthly-paid rank-and-file employees of KNITJOY. It does not bar
the holding of a certification election to determine their sole bargaining agent,
CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT TO FROM UNION OR and the negotiation for and the execution of a subsequent CBA between KNITJOY
ASSOCIATIONS; SCOPE. — The right to form a union or association or to self- and the eventual winner in said election (Section 4, Rule V, Book V of the Rules
organization comprehends two (2) broad notions, to wit: (a) the liberty or Implementing the Labor Code)
freedom, i.e., the absence of restraint which guarantees that the employee may
act for himself without being prevented by law, and (b) the power, by virtue of
which an employee may, as he pleases, join or refrain from joining an
association. (Victoriano v. Elizalde Rope Workers’ Union, 59 SCRA 54).

LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR RELATIONS; ONE

COMPANY-ONE UNION POLICY; NOT APPLICABLE WHERE EXISTING UNION
COVERED ONLY ONE CLASS OF EMPLOYEES; CASE AT BAR. — in the bargaining
history of KNITJOY, the CBA has been consistently limited to the regular rank-
and-file employees paid on a daily or piece-rate basis. On the other hand, the
rank-and-file employees paid on a monthly basis were never included within its
scope. Respondent KMEU’s membership is limited to the latter class of
employees, KMEU does not seek to dislodge CFW as the exclusive bargaining
representative for the former. The records further disclose that in the
certification solicited by TUPAS and during the elections which followed
thereafter, resulting in the certification of CFW as the exclusive bargaining
representative, the monthly-paid employees were expressly excluded. Thus, the
negotiations between CFW and KNITJOY following such a certification could only
logically refer to the rank-and-file employees paid on a daily or piece-rate basis.
Clearly therefore, KNITJOY and CFW recognize that insofar as the monthly-paid
employees are concerned, the latter’s constituting a separate bargaining unit
with the appropriate union as sole bargaining representative, can neither be
prevented nor avoided without infringing on these employees’ rights to form a
13. STA. LUCIA EAST COMMERCIAL CORPORATION vs. HON. SECRETARY The Med-Arbiter’s Ruling
OF LABOR AND EMPLOYMENT and STA. LUCIA EAST COMMERCIAL THE UNION raised the matter to the Secretary.
CORPORATION WORKERS ASSOCIATION (CLUP LOCAL CHAPTER),
G.R. No. 162355 August 14, 2009 The Ruling of the Secretary of Labor and Employment

FACTS: The Secretary held that the subsequent negotiations and registration of a CBA
executed by THE CORPORATION with SMSLEC could not bar THE UNION’s
On 2001, Confederated Labor Union of the Philippines (CLUP) instituted a petition. THE UNION constituted a registered labor organization at the time of
petition for certification election among the regular rank-and-file employees of THE CORPORATION’s voluntary recognition of SMSLEC.
Sta. Lucia East Commercial Corporation (THE CORPORATION) and its Affiliates.
The affiliate companies included in the petition were SLE Commercial, SLE THE CORPORATION then filed a petition for certiorari before the appellate court.
Department Store, SLE Cinema, Robsan East Trading, Bowling Center, Planet
Toys, Home Gallery and Essentials. The Ruling of the Appellate Court

On August 2001, Med-Arbiter Bactin ordered the dismissal of the petition due to The appellate court affirmed the ruling of the Secretary
inappropriateness of the bargaining unit.
Issue: Whether THE CORPORATION’s voluntary recognition of SMSLEC was done
Later CLUP in its local chapter under THE CORPORATION reorganized itself and while a legitimate labor organization was in existence in the bargaining unit.
re-registered as CLUP-Sta. Lucia East Commercial Corporation Workers
Association (herein THE UNION), limiting its membership to the rank-and-file Held: The petition has no merit.
employees of Sta. Lucia East Commercial Corporation.
Legitimate Labor Organization
On the same date, THE UNION or THE UNION filed the instant petition for
certification election. It claimed that no certification election has been held Article 212(g) of the Labor Code defines a labor organization as "any union or
among them within the last 12 months prior to the filing of the petition, and association of employees which exists in whole or in part for the purpose of
while there is another union registered covering the same employees, namely collective bargaining or of dealing with employers concerning terms and
Samahang Manggawa sa SLEC [SMSLEC], it has not been recognized as the conditions of employment." Upon compliance with all the documentary
exclusive bargaining agent of [THE CORPORATION’s] employees. requirements, the Regional Office or Bureau shall issue in favor of the applicant
labor organization a certificate indicating that it is included in the roster of
OnNovember 2001, THE CORPORATION or THE CORPORATION filed a motion to legitimate labor organizations.6 Any applicant labor organization shall acquire
dismiss the petition. It averred that it has voluntarily recognized SMSLEC as the legal personality and shall be entitled to the rights and privileges granted by law
exclusive bargaining agent of its regular rank-and-file employees, and that to legitimate labor organizations upon issuance of the certificate of registration.
collective bargaining negotiations already commenced between them. THE
CORPORATION argued that the petition should be dismissed for violating the one Bargaining Unit
year and negotiation bar rules under the Omnibus Rules Implementing the Labor
Code. The concepts of a union and of a legitimate labor organization are different from,
but related to, the concept of a bargaining unit.
The CBA between SMSLEC and the corporation was ratified by its rank-and-file
employees and registered with DOLE. A bargaining unit is a "group of employees of a given employer, comprised of all
or less than all of the entire body of employees, consistent with equity to the
In the meantime, on December 2001, the union filed its Opposition to THE employer, indicated to be the best suited to serve the reciprocal rights and
CORPORATION’S Motion to Dismiss questioning the validity of the voluntary duties of the parties under the collective bargaining provisions of the law."
recognition of [SMSLEC] by [THE CORPORATION] and their consequent
negotiations and execution of a CBA. According to [THE UNION], the voluntary The fundamental factors in determining the appropriate collective bargaining unit
recognition of [SMSLEC] by [THE CORPORATION] violated the requirements for are: (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the
voluntary recognition, i.e., non-existence of another labor organization in the employees’ interest, such as substantial similarity of work and duties, or
same bargaining unit. It pointed out that the time of the voluntary recognition similarity of compensation and working conditions (Substantial Mutual Interests
on 20 July 2001, appellant’s registration which covers the same group of Rule); (3) prior collective bargaining history; and (4) similarity of employment
employees covered by Samahang Manggagawa sa Sta. Lucia East Commercial, status.
was existing and has neither been cancelled or abandoned.
The UNION’S initial problem was that they constituted a legitimate labor
organization representing a non-appropriate bargaining unit. However, The
union subsequently re-registered as THE UNION, limiting its members to the
rank-and-file of THE CORPORATION. THE CORPORATION cannot ignore the union
was a legitimate labor organization at the time of THE CORPORATION’s voluntary prompted the union to stage a strike on May 26, 2001 on the ground of a CBA
recognition of SMSLEC. THE CORPORATION and SMSLEC cannot, by themselves, bargaining deadlock.
decide whether CLUP-THE CORPORATION and its Affiliates Workers Union
represented an appropriate bargaining unit. The company filed before the National Labor Relations Commission (NLRC) a
petition to declare the strike illegal, and prayed that all union officers who
participated in the illegal strike be considered separated from the service.
The inclusion in the union of disqualified employees is not among the grounds for
cancellation of registration, unless such inclusion is due to misrepresentation,  
false statement or fraud under the circumstances. The union having been validly
The labor arbiter declared the strike procedurally [infirm] and therefore illegal.
issued a certificate of registration, should be considered as having acquired
The labor arbiter noted that the union failed to attach its written CBA proposal
juridical personality which may not be attacked collaterally. The proper and the company’s counter-proposal to the notice of strike and to provide proof
procedure for THE CORPORATION is to file a petition for cancellation of of a request for a conference to settle the dispute.
certificate of registration of CLUP-THE CORPORATION and its Affiliates Workers
Union and not to immediately commence voluntary recognition proceedings with Thus, the notice to strike was deemed not to have been filed and the strike
SMSLEC. illegal. All the officers of the union were deemed terminated from service.
However, they were entitled to separation pay equivalent to that granted to
employees affected by the retrenchment program which the company had earlier
launched.
14. Club Filipino, Inc. v. Bautista, et. al., GR No. 168406; July 13, 2009
Respondents appealed but the NLRC affirmed the labor arbiter. The NLRC did not
see fit to pass upon the issues raised by respondents because, by the time they
FACTS:
appealed, they had either resigned from the company or were no longer part of
the union because of the election of new set of officers.
Petitioner Club Filipino, Inc. (the company) is a non-stock, non profit corporation
duly formed, organized and existing under Philippine laws.
The CA set aside the rulings of the NLRC and the labor arbiter.
Respondents on the other hand, were former officers and members of the Club
ISSUE: Whether the strike staged by respondents was legal
Filipino Employees Association (the union). 
HELD:
The union and the company had a collective bargaining agreement. Prior to the
expiration of the CBA and within the freedom period, the union made several
demands for negotiation but the company replied that it could not muster a Rule XXII, Section 4 of the Omnibus Rules Implementing the Labor Code states:
quorum, thus no CBA negotiations could be held. In cases of bargaining deadlocks, the notice shall, as far as practicable, further
state the unresolved issues in the bargaining negotiations and be accompanied
The union submitted its formal CBA proposal to the company’s negotiating panel by the written proposals of the union, the counter-proposals of the employer and
and repeatedly asked for the start of negotiations. No negotiations, however, the proof of a request for conference to settle differences. In cases of unfair
took place for various reasons proffered by the company, among them the labor practices, the notice shall, as far as practicable, state the acts complained
illness of the chairman of the management panel. of, and efforts taken to resolve the dispute amicably.1avvphi1
Any notice which does not conform with the requirements of this and the
In order to compel the company to negotiate, respondents, as officers of the foregoing section shall be deemed as not having been filed and the party
union, filed a request for preventive mediation with the National Conciliation and concerned shall be so informed by the regional branch of the Board. (emphasis
Mediation Board (NCMB). However, meeting concluded with a declaration by supplied)
both parties of a deadlock in their negotiations.
In the instant case, the union cannot be faulted for its omission. The union could
The union filed a notice of strike with the NCMB on the grounds of bargaining not have attached the counter-proposal of the company in the notice of strike it
deadlock and failure to bargain. The company formally responded to the submitted to the NCMB as there was no such counter-proposal. To recall, the
demands of the union when it submitted its economic counter-proposal. union filed a notice of strike on April 6, 2001 after several requests to start
negotiations proved futile. It was only on April 22, 2001, or after two weeks,
Meanwhile, the union conducted a strike vote under the supervision of the DOLE. when the company formally responded to the union by submitting the first part
of its counter-proposal. Worse, it took the company another three weeks to
In response to the company’s counter-proposal, the union sent the company its complete it by submitting on May 11, 2001 the second part of its counter-
improved proposal, but the company refused to improve on its offer. This proposal. This was almost a year after the expiration of the CBA sought to be
renewed.
 discussed with complainant union, particularly the disputed provisions.
The Implementing Rules use the words “as far as practicable.” In this case, Thereafter, PAL is directed to furnish each employee with a copy of the
attaching the counter-proposal of the company to the notice of strike of the appealed Code of Discipline. The pending cases adverted to in the appealed
union was not practicable. It was absurd to expect the union to produce the decision if still in the arbitral level, should be reconsidered by PAL. Hence, the
company’s counter-proposal which it did not have. One cannot give what one filing of the instant petition for certiorari byPAL.
does not have. Indeed, compliance with the requirement was impossible because
no counter-proposal existed at the time the union filed a notice of strike. The law ISSUE:
does not exact compliance with the impossible. Nemo tenetur ad impossibile.
Whether or not the management may be compelled to share with the union or
its employees its prerogative of formulating a code of discipline.

HELD:
15. PAL, Inc. vs. PALEA, 548 SCRA 117
YES, the exercise of managerial prerogatives is not unlimited. It is
circumscribed by limitations found in law, a collective bargaining agreement, or
FACTS: the general principles of fair play and justice Moreover, it must be duly
established that the prerogative being invoked is clearly a managerial one.
The PAL completely revised its 1966 Code of Discipline, afterwhich, was
circulated among the employees and was immediately implemented. Some A close scrutiny of the objectionable provisions of the Code reveals that they
employees were forthwith subjected to the disciplinary measures embodied are not purely business-oriented nor do they concern the management aspect
therein. of the business of the company as in the San Miguel case. The provisions of the
Code clearly have repercussions on the employee's right to security of tenure.
Thus, the PALEA filed a complaint before the NLRC for ULP. In its position
paper, it contended that by PAL’s unilateral implementation of the Code, it was The implementation of the provisions may result in the deprivation of an
guilty of ULP. It also alleged that copies of the Code were circulated in limited employee's means of livelihood which, as correctly pointed out by the NLRC, is
numbers; the Code, being penal in nature, must conform with the a property right. In view of these aspects of the case which border on
requirements of sufficient publication; and further alleged that the Code was infringement of constitutional rights, we must uphold the constitutional
arbitrary, oppressive and prejudicial to the rights of the employees. requirements for the protection of labor and the promotion of social justice, for
these factors, according to Justice Isagani Cruz, tilt "the scales of justice when
It prayed that the implementation of the Code be held in abeyance; that the there is doubt, in favor of the worker".
PAL should discuss the substance of the Code with PALEA; that the dismissed
employees under the Code be reinstated and their cases be subjected to Verily, a line must be drawn between management prerogatives regarding
further hearing; and that PAL be declared guilty of ULP and be ordered to pay business operations per se and those which affect the rights of the employees.
damages. In treating the latter, management should see to it that its employees are at
least properly informed of its decisions or modes action. PAL asserts that all its
PAL on the other hand, filed a motion to dismiss the complaint, asserting its employees have been furnished copies of the Code. Public respondents found
prerogative as an employer to prescribe rules and regulations regarding to the contrary, which finding, to say the least is entitled to great respect.
employees’ conduct. In its Reply, PALEA maintained that PAL violated Art. 249
(e) of Labor Code when it unilaterally implemented the Code, and cited some (PAL posits the view that by signing the 1989-1991 collective bargaining
provisions of the Code as defective, for running counter to the construction of agreement, on June 27, 1990, PALEA in effect, recognized PAL's "exclusive
penal laws and making punishable any offense within PAL’s contemplation. right to make and enforce company rules and regulations to carry out the
functions of management without having to discuss the same with PALEA and
Upon failure of the parties to appear at the scheduled conference, a decision much less, obtain the latter's conformity thereto" (pp. 11-12, Petitioner's
was rendered by the labor arbiter, finding no bad faith on the part of PAL in Memorandum; pp 180-181, Rollo.) Petitioner's view is based on the following
adopting the Code and ruled that no ULP had been committed. However, the provision of the agreement:
arbiter held that PAL was not totally fault free considering that while
the issuance of rules and regulations governing conduct of employees The Association recognizes the right of the Company to determine matters of
is a legitimate management prerogative, such rules and regulations management it policy and Company operations and to direct its manpower.
must meet the test of reasonableness, propriety and fairness. It also Management of the Company includes the right to organize, plan, direct and
ordered PAL to discuss with PALEA the objectionable provisions and to furnish control operations, to hire, assign employees to work, transfer employees from
all employees with the new Code of Discipline. one department, to another, to promote, demote, discipline, suspend or
discharge employees for just cause; to lay-off employees for valid and legal
PAL appealed to the NLRC which modify the appealed decision in the causes, to introduce new or improved methods or facilities or to change
sense that the New Code of Discipline should be reviewed and
existing methods or facilities and the right to make and enforce Company rules
and regulations to carry out the functions of management.) Still unresolved, the Union declared a bargaining deadlock and thereafter filed a
Notice of Strike at the NCMB, which was expectedly opposed by the Univ through
The exercise by management of its prerogative shall be done in a just a Motion to Strike-out Notice of Strike and Refer the Dispute to Voluntary
reasonable, humane and/or lawful manner. Arbitration, since the CBA contained a "no-strike, no-lockout" provision, and a
grievance machinery for settling disputes, including a voluntary arbitration
Such provision in the collective bargaining agreement may not be interpreted mechanism should the grievance machinery fail to settle the dispute. The NCMB,
as cession of employees' rights to participate in the deliberation of matters however, failed to resolved the Univ's Motion
which may affect their rights and the formulation of policies relative thereto.
And one such mater is the formulation of a code of discipline. Thereafter, both parties made a joint request for the Secretary of Labor and
Employment (SOLE) to assume jurisdiction over the dispute.
Indeed, industrial peace cannot be achieved if the employees are denied their
just participation in the discussion of matters affecting their rights. Thus, even
On September 18, 2003, he SOLE assumed jurisdication, and with such
before Article 211 of the labor Code (P.D. 442) was amended by Republic Act
assumption of jurisdiction, any strike or lockout was strictly enjoined.
No. 6715, it was already declared a policy of the State, "(d) To promote the
enlightenment of workers concerning their rights and obligations . . . as
employees." This was, of course, amplified by Republic Act No 6715 when it The day after the SOLE assumed jurisdiction, and on the same day that the
decreed the "participation of workers in decision and policy making processes Assumption of Jurisdiction Order (AJO) was supposedly served to both parties,
affecting their rights, duties and welfare." PAL's position that it cannot be the Union staged a strike. Union members refused to receive a copy of the AJO
saddled with the "obligation" of sharing management prerogatives as during assailing that only the Union President is authorized to receive the same. The
the formulation of the Code, Republic Act No. 6715 had not yet been enacted Union filed a Petition Declare Illegal Strike and Loss of Employment Status of the
(Petitioner's Memorandum, p. 44; Rollo, p. 212), cannot thus be sustained. striking employees, which Petition was filed at the NLRC. Such Petition was later
While such "obligation" was not yet founded in law when the Code was on consolidated with the case pending before the SOLE, at the request of the
formulated, the attainment of a harmonious labor-management relationship Univ.
and the then already existing state policy of enlightening workers concerning
their rights as employees demand no less than the observance of transparency The SOLE rendered a Decision resolving the various economic issues over which
in managerial moves affecting employees' rights. the parties had a deadlock in the collective bargaining, and likewise dismissed
the Petition to Declare Illegal Strike.
Nonetheless, whatever disciplinary measures are adopted cannot be properly
implemented in the absence of full cooperation of the employees. Such The University elevated the matter to the Court of Appeals after its Motion for
cooperation cannot be attained if the employees are restive on account, of their Reconsideration was denied by the SOLE.
being left out in the determination of cardinal and fundamental matters affecting
their employment. The Court of Appeals partially granted the Petition. It declared the strike as
illegal, but affirmed the SOLE's decision regarding the economic issues.

Both the Univ and the Union filed their respective Motions for Reconsideration.
16. UNIVERSITY OF SAN AGUSTIN, INC. Petitioners, v. UNIVERSITY OF
SAN AGUSTIN EMPLOYEES UNION - FFW, Respondent.
Basing on the CA's decision, on April 7, 2005, the Univ served the striking
G.R. NO. 177594 July 23, 2009
employees with their notices for termination and concurrently, the Union filed
with the NCMB a second notice of strike, this time on ground of alleged union
FACTS:
busting.

This is a case between the University of San Agustin Employees Union-FFW

On April 22, 2005, the parties again took initial steps to negotiate the new CBA
(UNION) and The University of San Agustin (UNIV).
but said attempts proved futile. Hence, on April 25, 2005, the Union went on
strike. In reaction, the University notified the Union that it was pulling out of the
Sometime on 2000, the parties agreed on a 5-year CBA, the economic provisions
negotiations because of the strike.
of which are effective for 3 years only. After the lapse of 3 years, the parties
negotiated on the economic provisions but did not agree on the terms during the
remaining 2 years of the CBA and beyond. On August 23, 2005, the CA, acting on the parties' respective motions for
reconsideration, promulgated the herein challenged Partially Amended
Since the parties did not agree on the computation of tuition incremental Decision. Finding merit in the respondent University's motion for partial
proceeds (TIP) which shall be the basis for the increase of salaries, they reconsideration, the CA ruled that the SOLE abused its discretion in resolving the
underwent a preventive mediation proceedings at the NCMB. economic issues on the ground that said issues were proper subject of the
grievance machinery as embodied in the parties' CBA. Consequently, the CA
directed the parties to refer the economic issues of the CBA to voluntary SY 2002-2003 - P1,500.00 per month or 80% of the TIP, whichever is higher, across the
arbitration. The CA, however, stood firm in its finding that the strike conducted board. (Emphasis supplied)
by the petitioner Union was illegal and its officers were deemed to have lost their
employment status. It is a familiar and fundamental doctrine in labor law that the CBA is the law
between the parties and they are obliged to comply with its provisions.8 If the
terms of a contract, in this case the CBA, are clear and leave no doubt upon the
ISSUES: intention of the contracting parties, the literal meaning of their stipulations shall
control.9
Whether or not the strike was illegal and the Union Officers deemed to have lost
their employment status on their failure to return to work immediately upon the A reading of the above-quoted provision of the CBA shows that the parties
service of AJO issued by the SOLE. agreed that 80% of the TIP or at the least the amount of P1,500 is to be
allocated for individual salary increases.
Whether or not the economic provisions of the CBA should be referred to
The CBA does not speak of any other benefits or increases which would be
Voluntary Arbitration.
covered by the employees' share in the TIP, except salary increases. The CBA
reflects the incorporation of different provisions to cover other benefits such as
HELD: Christmas bonus (Art. VIII, Sec. 1), service award (Art. VIII, Sec.5), leaves
(Article IX), educational benefits (Sec.2, Art. X), medical and hospitalization
benefits (Secs. 3, 4 and 5, Art. 10), bereavement assistance (Sec. 6, Art. X),
On the first issue, the SC ruled that ART. 263 of the Labor Code and signing bonus (Sec. 8, Art. VIII), without mentioning that these will likewise
provides: ."..Such assumption or certification (of the SOLE) shall have be sourced from the TIP. Thus, petitioner's belated claim that the 80% TIP
the effect of automatically enjoining the intended or impending strike or should be taken to mean as covering ALL increases and not merely the salary
lockout as specified in the assumption or certification order. If one has increases as categorically stated in Sec. 3, Art. VIII of the CBA does not lie.
already taken place at the time of assumption or certification, all
striking or locked out employees shall immediately return to work and Apropos is the ruling in St. John Colleges, Inc., v. St. John Academy Faculty and
the employer shall immediately resume operations and readmit all Employees' Union10 where the Court held that the school committed Unfair
workers under the same terms and conditions prevailing before the Labor Practice (ULP) when it unceremoniously closed down allegedly because of
strike or lockout." The phrase "immediately return to work" indicates an the union's unreasonable demands including its insistence on having 100% of
almost instantaneous or automatic compliance for a striker to return to work the incremental tuition fee increase allotted for their members' benefits to be
once an AJO has been duly served. Therefore, the act of the striking employees embodied in the CBA. In striking down the school's defense, the Court held:
is violative of the foregoing provision.
That SJCI agreed to appropriate 100% of the tuition fee increase to the workers'
benefits sometime in 1995 does not mean that it was helpless in the face of the
Union's demands because neither party is obligated to precipitately give in to the
On the second issue, the Supreme Court ruled that economic benefits, which proposal of the other party during collective bargaining. (Emphasis supplied)
included the issue on the formula in computing the TIP share of the
employees, is one that arises from the interpretation or implementation In the present case, petitioner could have, during the CBA negotiations, opposed
of the CBA, and these matters should be referred to a Voluntary Arbitrator, as the inclusion of or renegotiated the provision allotting 80% of the TIP to salary
provided in Art. 261 and 262 of the Labor Code. The peculiar facts of the instant increases alone, as it was and is not under any obligation to accept respondent's
case show that the University was deprived of a remedy that would have demands hook, line and sinker. Art. 252 of the Labor Code is clear on the
enjoined the Union strike and was left without any recourse except to invoke the matter:
jurisdiction of the SOLE.

Sec. 3, Art. VIII of the 2000-20005 CBA reads: ART. 252. Meaning of duty to bargain collectively. - The duty to bargain
collectively means the performance of a mutual obligation to meet and convene
ARTICLE VIII promptly and expeditiously in good faith for the purpose of negotiating an
Economic Provisions agreement with respect to wages, hours, of work and all other terms and
conditions of employment including proposals for adjusting any grievances or
x x x questions arising under such agreement and executing a contract incorporating
such agreements if requested by either party but such duty does not compel any
Section 3. Salary Increases. The following shall be the increases under this Agreement.
party to agree to a proposal or to make any concession. (Emphasis
SY 2000-2001 - P2,000.00 per month, across the board. supplied)cralawlibrary

SY 2001-2002 - P1,500.00 per month or 80% of the TIP, whichever is higher, across the The records are thus bereft of any showing that petitioner had made it clear
board. during the CBA negotiations that it intended to source not only the salary
increases but also the increases in other employee benefits from the 80% of the
TIP. Absent any proof that petitioner's consent was vitiated by fraud, mistake or (a) For students enrolled in schools charging less than one thousand five
duress, it is presumed that it entered into the CBA voluntarily, had full hundred pesos (P1,500) per year in tuition and other fees during school year
knowledge of the contents thereof, and was aware of its commitments under the 1988-89 or such amount in subsequent years as may be determined from time
contract. to time by the State Assistance Council: The Government shall provide them
with a voucher equal to two hundred ninety pesos P290.00: Provided, That the
Contrary to petitioner's assertion, the rulings in Cebu Institute of Medicine v. student pays in the 1989-1990 school year, tuition and other fees equal to the
Cebu Institute of Medicine Employees Union-NFL and in Centro Escolar University tuition and other fees paid during the preceding academic year: Provided,
Faculty and Allied Workers Union-Independent v. Court of Appeals11 are not further, That the Government shall reimburse the vouchers from the schools
applicable to the present case. concerned within sixty (60) days from the close of the registration period:
Provided, furthermore, That the student's family resides in the same city or
In Cebu Institute, the Court held that SSS contributions and other benefits can province in which the high school is located unless the student has been enrolled
be charged to the 70% and that the academic institution has the discretion to in that school during the previous academic year.
dispose of the said 70% with the precondition that the disposition goes to the
payment of salaries, wages, allowances and other benefits of its personnel, viz: (b) For students enrolled in schools charging above one thousand five hundred
pesos (P1,500) per year in tuition and other fees during the school year 1983-
For sure, the seventy percent (70%) is not to be delivered whole to the 1989 or such amount in subsequent years as may be determined from time to
employees but packaged in the form of salaries, wages, allowances, and other time by the State Assistance Council, no assistance for tuition fees shall be
benefits which may be in the form of SSS, Medicare and Pag-Ibig premiums, all granted by the Government: Provided, however, That the schools concerned
intended for the benefit of the employees. In other words, the private may raise their tuition fee subject to Section 10 hereof.
educational institution concerned has the discretion on the disposition of the
seventy percent (70%) incremental tuition fee increase. It enjoys the privilege of (2) Assistance under paragraph (1), subparagraphs (a) and (b) shall be granted
determining how much increase in salaries to grant and the kind and amount of and tuition fee under subparagraph (c) may be increased, on the condition that
allowances and other benefits to give. The only precondition is that seventy seventy percent (70%) of the amount subsidized allotted for tuition fee or of the
percent (70%) of the incremental tuition fee increase goes to the payment of tuition fee increases shall go to the payment of salaries, wages, allowances and
salaries, wages, allowances and other benefits of teaching and non-teaching other benefits of teaching and non-teaching personnel except administrators
personnel. (Emphasis supplied) who are principal stockholders of the school, and may be used to cover increases
as provided for in the collective bargaining agreements existing or in force at the
Significantly, this ruling was arrived at in the absence of a CBA between the time when this Act is approved and made effective: Provided, That government
parties, unlike in the present case. subsidies are not used directly for salaries of teachers of nonsecular subjects. At
least twenty percent (20%) shall go to the improvement or modernization of
On the other hand, in Centro Escolar University, the issue was whether the buildings, equipment, libraries, laboratories, gymnasia and similar facilities and
University may source from the 70% incremental proceeds (IP) the integrated IP to the payment of other costs of operation. For this purpose, schools shall
incorporated into the salaries of its teaching and non-teaching staff pursuant to maintain a separate record of accounts for all assistance received from the
the CBAs entered into by their union. The controversy arose because the CBA government, any tuition fee increase, and the detailed disposition and use
provided different types of salary increases - some sourced from the University thereof, which record shall be determined by the State Assistance Council,
fund and the salary increases brought about by the IP integration which are during business hours, by the faculty, the non-teaching personnel, students of
deducted from the IP. The Court held that the charging of the integrated IP the school concerned, and Department of Education, Culture and Sports and
against the 70% is not violative of the CBA which prohibits the deduction of the other concerned government agencies.
CBA-won benefits from the 70% of the IP because the integrated IP provided for
in the CBAs of the teaching and the non-teaching staff is actually the share of Unmistakably, what the law sets is the minimum, not the maximum percentage,
the employees in the 70% of the IP that is incorporated into their salaries as a and there is even a 10% portion the disposition of which the law does not
result of the negotiation between the university and its personnel. regulate. Hence, if academic institutions wish to allot a higher percentage for
salary increases and other benefits, nothing in the law prohibits them from doing
Clearly, the above-cited cases have totally different milieus from the case at bar. so.
It is axiomatic that labor laws setting employee benefits only mandate the
Even a perusal of the law will show that it does not make 70% as the mandated minimum that an employer must comply with, but the latter is not proscribed
ceiling. It reads: from granting higher or additional benefits if it so desires, whether as an act of
generosity or by virtue of company policy or a CBA, as it would appear in this
SEC. 5. Tuition Fee Supplement for Student in Private High School case. While, in following to the letter the subject CBA provision petitioner will, in
effect, be giving more than 80% of the TIP as its personnel's share in the tuition
(1) Financial assistance for tuition for students in private high schools shall be fee increase, petitioner's remedy lies not in the Court's invalidating the
provided by the government through a voucher system in the following provision, but in the parties' clarifying the same in their subsequent CBA
manners: negotiation.