Mid Term Cases

CORPUZ
1. WISE AND CO., INC., Petitioner, vs. WISE And CO., INC. Employees Union Natu
and honorable Bienvenido G. Laguesma .
G.R. No. 87672. October 13, 1967

VS
WISE & CO., INC. EMPLOYEES UNION-NATU, AND HONORABLE BIENVENIDO G.
LAGUESMA, in his capacity as voluntary Arbitrator
(Respondents)

Facts:
On April 3, 1987, the management board issued a circular establishing a profit-sharing
system for its managers and supervisors, the first distribution took effect on March 31,
1988.
On 3 July 1987, the defendant union wrote to its president requesting participation in the
scheme.
This was denied by the plaintiff on the grounds of strict compliance with the Collective
Bargaining Agreement (CBA).

Meanwhile, negotiations were underway for early negotiations between the ABC parties,
scheduled to expire on April 30, 1988. Negotiations thus began before the free period.
.
On 11 November 1987, the petitioner wrote to the respondent union advising that it was
prepared to consider including employees covered by ABC in the profit-sharing plan
from 1987, subject to current negotiations that must be concluded by December 1987.
However, union negotiations are deadlocked over the issue of the scope of the
bargaining unit. Conciliation efforts to resolve the dispute were made on 29 March 1988
but no resolution was reached.

On March 30, 1988, the petitioner distributed profit-sharing benefits not only to
managers and supervisors but also to all other rank-and-file employees not covered by
the CBA. This caused the defendant union to file a strike notice, accusing the plaintiff of
committing unfair labor practices because union members had been discriminated
against in the provision of profit-sharing benefits. As a result, management refused to
continue collective bargaining negotiations unless the final strike notice was first
resolved. The union has agreed to postpone discussions on profit-sharing demands
until a new collective agreement is reached. After a series of conciliations, the parties
agreed to resolve the dispute through voluntary arbitration. After the parties filed their
position papers, rejoinder, and responses, on March 20, 1989, the voluntary arbitrator
entered an award directing the plaintiff to also extend the benefits of the Sharing Plan
1987 profits to the members of the respondent union. In this petition, therefore, in which
the petitioner alleges the following reasons in support of its decision the petition is
impressed with merit.

Issue:

Whether the grant by management of profit-sharing benefits to its non-union member

employees is discriminatory against its workers who are union members.

Decision: Supreme court said no Discrimination prerogative no bad faith and no ULP No
intention to discourage you from joining the union
The court found that the management had a responsibility to regulate all aspects of
employment according to its discretion and judgment. This is in accordance with the
established rule that labor law does not authorize the employer to conduct its own
affairs. This management prerogative can be exercised without fear of any liability as
long as it is done properly. interests of the employer and is not intended to undermine or
undermine the rights of employees under special laws or valid agreements and is not
carried out in a way that is malicious, harsh, oppressive, vindictive or wanton or with
malice or malice.

The plaintiff's award of profit-sharing benefits to employees outside the “bargaining unit”
was within his or her management prerogative. This appears to have been done in good
faith and without ulterior motives. Especially since, as in this case, there is a provision in
the collective agreement according to which workers are classified between those who
are union members and those who are not. In the case of union members, they receive
the benefit of the terms and conditions of the CBA contract which constitutes the law
between the contracting parties. Both the employer and the union member are subject
to bound by this agreement. However, the court made clear that it would not hesitate to
invalidate any action by an employer that tends to discriminate against union members.
It is only because of the specific circumstances of this case, which demonstrate that
there was no such intention, that this court ruled otherwise.

WHEREFORE, the motion is GRANTED and the defendant's voluntary arbitration award
dated March 20, 1989, is hereby REVERSED AND SET, null and void, without an award
of costs.

2. Republic Savings Bank vs. CIR.

G.R No. L-20303. September 27, 1967

REPUBLIC SAVINGS BANK (now REPUBLIC BANK)

(Petitioners)
VS
COURT OF INDUSTRIAL RELATIONS, ROSENDO T. RESUELLO, BENJAMIN
JARA, FLORENCIO ALLASAS, DOMINGO B. JOLA, DIOSDADO S. MENDIOLA,
TEODORO DE LA CRUZ, NARCISO MACARAEG and MAURO A. ROVILLOS
(Respondents)
Facts:
Rosendo T. Resuello, Benjamin Jara, Florencio Allasas, Domingo B. Jola, Diosdado S.
Mendiola, Teodoro de la Cruz, Narciso Macaraeg, and Mauro A. Rovillos were among
the responders who worked for the Bank. On July 12, 1958, it fired Jola and the
remaining respondents for writing and publishing "a patently libelous letter tending to
cause the dishonor, discredit, or contempt not only of officers and employees of this
bank but also of your employer, the bank itself." A few days later, on July 18, 1958, it
fired the remaining respondents.
The letter in question was a letter charge that the respondents had sent to the bank
president, requesting his resignation due to immorality, nepotism in hiring and selecting
workers, favoritism, and discrimination in promoting bank employees. It was written on
July 9, 1958.
The Central Bank Governor and the Chairman of the Bank's Board of Directors both
received copies of this letter, it is true. Prosecutor A. was called upon at the
respondents' request. The Industrial Peace Act's section 4(a)(5) declares it an unfair
labor practice for an employer to "fire, discharge, or otherwise prejudice, or discriminate
against an employee for having filed charges, for having given or being about to give
testimony under this Act," and Tirona complained about the Bank's actions in the CIR on
September 15, 1958. The Bank made a motion to dismiss the complaint, arguing that
the reason the respondents were let go was not because they participated in union
activities but rather because they had written and published a defamatory letter about
the bank president. The case was heard after the court declined the motion on the
grounds that section 4(a)(5) applies to situations where an employee is fired or treated
differently because they have brought "any charges against his employer."

ISSUE:
Whether or not the dismissal of the eight (8) respondent employees by the petitioner
Republic Bank (hereinafter referred to as the Bank) constituted an unfair labor practice
within the meaning and intendment of the Industrial Peace Act (Republic Act 875).

Decision: COURT FOUND THEM GUILTY

In 1960, Court overruled the decision of the CIR in the Royal Interocean case and held
that "the charge, the filing of which is the cause of the dismissal of the employee, must
be related to his right to self-organization in order to give rise to unfair labor practice on
the part of the employer," because "under subsection 5 of section 4(a), the employee's
(1) having filed charges or (2) having given testimony or (3) being about to give
testimony, are modified by 'under this Act' appearing after the last item." The Bank
therefore renewed its motion to dismiss, but the court held the motion in abeyance and
proceeded with the hearing.
On July 4, 1962, the court issued a ruling finding the Bank guilty of unfair labor practice
and requiring it to restore the respondents, with full back pay, without losing seniority or
other advantages, and other terms and conditions. On August 9, 1962, the court upheld
this verdict.
Indeed, when respondents complained about nepotism, favoritism and other
management practices, they were acting in an area designated by law as an
appropriate area of collective bargaining. Even the reference to immorality is not
irrelevant as it is intended to support the respondent's other allegation that the bank
president failed to provide healthy working conditions, not let alone setting a good moral
example for employees by practicing discrimination and favoritism in appointments. And
promoting certain employees on the basis of illicit relationships
LIBRES
3. Manila Pencil Co. Vs. CIR. G.R. No. L-16903
August 31, 1965

G.R. No. L-16903

August 31, 1965

MANILA PENCIL COMPANY, INC., and DOMINADOR P. CANLAS

(Petitioners)
VS.
COURT OF INDUSTRIAL RELATIONS, and MAPECO LABOR UNION (PAFLU)
(Respondents)

FACTS:
In 1958 thirty-three of the Company's forty-one employees were members of the
Mapeco Labor Union. On November 25, 1958 the Union filed a complaint against the
Company and its President and General Manager, Dominador P. Canlas, with unfair
labor practice, consisting of the dismissal of fifteen employees by reason of their union
membership. The complaint was amended on April 4, 1959, to include two more
employees, among the complainants.
At the hearing, eleven of them testified each to the effect that his employment had been
terminated upon refusal to disaffiliate himself from the union. The dismissals took place
on the following dates: Jesus Pineda on October 3, 1958; Armenia Hernandez on
October 27, 1958; union President Godofredo C. Galang on October 28; Elena Lingat
on November 7; union, Vice-President Francisco Parawan, Union organizer Roberto
Torres, Marina Tayag, Eduardo Martinez and Jesus Tayag on November 11; and Regino
Raquez and Cresencio Yabut on November 14. Of these eleven, six were subsequently
recalled. Those not recalled are Galang, Torres, Lingat, Yabut and Jesus Tayag.
The Company claims that due to severe cuts in its dollar allocations, resulting in the
reduction of available raw materials during the second semester of 1958, it temporarily
laid off a number of the employees, some of whom were union members, and
permanently dismissed others for allegedly legal cause.
The Court of Industrial Relations found the charge of unfair labor practice proven and
ordered the Company:
1. To cease and desist from dismissing its employees and workers due to their union
affiliation;
2. To reinstate Godofredo Galang, Roberto Torres, Elena Lingat, Cresencio Yabut and
Jesus Tayag to their former or equivalent positions, with back wages, from the date of
their dismissals until they are actually re-employed; to reinstate Jesus Pineda, Corazon
Galang and Elpidio Nunag without backpay (they failed to answer the call to work)
should they report for work within thirty days after due notice of recall and should they
fail to return, their right to readmission would be considered waived and lost. On the
other hand, Ludovina Gonzales lost her right to reinstatement.
3. To post a copy of this decision on the bulletin board of the Company or in any
conspicuous place of the factory for a period of 30 days from the date said decision is
posted.
After its motion for reconsideration was denied by the Court en banc, the Company filed
the instant petition for review or as an original petition for certiorari, claiming error or
grave abuse of discretion on the part of respondent Court in finding the charge of unfair
labor practice as duly proven.
The Company argues that the testimony of the eleven complainants who were
presented as witnesses should not be given credence since each one of them testified
only as to his own particular case, failing thereby to corroborate the testimony of the
others. Such lack of mutual corroboration, however, is explained by the fact that the
Company did not openly deal with the unionists as a group but called them individually,
one at a time, thus preventing them from presenting a united front.

ISSUE:
Whether or not the Manila Pencil Company is guilty of unfair labor practice for dismissal
of their employees by reason of their union membership.

DECISION: Guilty of Unfair Labor Practice CEASE AND DESIST AND REINSTATE TO
EQUIVALENT POSITION
5 PINABALIK
The conclusion of the Industrial Court that petitioner Company was guilty of unfair labor
practice is supported by substantial evidence, that is, relevant evidence which a
reasonable mind would accept as adequate to support said conclusion. It is true that the
Company's dollar allocations for the importation of raw materials had been reduced.
Since according to petitioners, the raw materials corresponding to the dollar allocation
for a given semester usually arrived in the Philippines in the middle or latter part of the
semester immediately following, it was constrained to lay off some employees
temporarily, both union members and non-union members, during the second semester
of 1958. The explanation, however, does not by any means account for the permanent
dismissal of five of the unionists, when it does not appear that non-unionists were
similarly dismissed.
Godofredo C. Galang testified that he first thought of organizing a union in September
1958. He and two other organizers, Parawan and Torres, succeeded in recruiting all but
eight of the Company's employees for membership. The Company dismissed three of
them even before the Union was registered with the Department of Labor on November
6, 1958 and affiliated itself with the PAFLU on the same day. Then the Union presented
a list of demands to the Company, but the latter did not even bother to answer them.
Instead it dismissed eight more union members, including Vice-President Parawan and
the other organizer, Roberto Torres. In each case, the lay-off was affected after the
member refused to heed the demand of Canlas to give up his union membership.
With respect to Galang, the Company tried to establish that he was dropped because
he often voluntarily absented himself from work. The evidence in this respect is
unsatisfactory, as Galang's time record was not presented. And insofar as the other four
of those ordered reinstated with back wages are concerned, no reason for the dismissal
appears in the record other than their union activities. And the discrimination shown by
the Company strongly is confirmed by the fact that during the period from October 1958
to August 17, 1959 it hired from fifteen to twenty new employees and ten apprentices. It
says these employees were for its new lead factory, but is not shown that the five who
had been permanently dismissed were not suitable for work in that new factory. On the
whole we find no reason to disagree with the factual findings of the respondent Court.

4. East Asiatic Co. Vs. CIR. G.R. No. L-29068, August 31,1971

G.R. No. L-17037

April 30, 1966

THE EAST ASIATIC CO., LTD., E. JAKOBSEN, P. H. SORENSEN and K.R. NIELSEN
(Petitioners)
VS.
COURT OF INDUSTRIAL RELATIONS, THE EAST ASIATIC CO. EMPLOYEES' UNION
(PTUC) and SOLEDAD A. DIZON
(Respondents)

FACTS:
On September 28, 1958, The East Asiatic Co. Employees' Union (PTUC) and Soledad
A. Dizon charged The East Asiatic and the other petitioners herein, with unfair labor
practice, alleging specifically that they had dismissed Soledad A. Dizon by reason of her
union activities. The said company denied the charge, and averred that Dizon had been
dismissed by reason of inefficiency, grave discourtesy and usurious practices.
Judge Tabigne found respondents there to have been guilty as charged, of unfair labor
practice, and accordingly ordered them to reinstate Dizon with back wages from
September 1, 1958 until actually reinstated. East Asiatic moved for a reconsideration by
the full court of Judge Tabigne's decision; but the motion was denied. Hence, this
appeal for review by certiorari.
The records reveal that the East Asiatic is a corporation licensed to engage in the
import, export, and shipping business in the Philippines, its managers being, E.
Jakobsen, and K. R. Nielsen. The Assistant-Manager of the import department, was P.
H. Sorensen, who acted as the immediate chief of Soledad Dizon at the time of her
dismissal from the company's service.
Asiatic Employees Union was organized in March, 1958, among the personnel of East
Asiatic. It was duly registered as a legitimate labor organization, and its membership
included Soledad Dizon. On April 22, 1958, Employees' Union presented to East Asiatic,
a written demand for collective bargaining. In reply thereto, the latter required proof that
the members of said union represented the majority of the company's employees. In
compliance therewith, the list with the corresponding signatures of its members, one of
them Dizon's, was submitted on May 3, 1958.
Soledad Dizon began working in East Asiatic's shipping department on February 8,
1951; later she was detailed in its export department in 1956, and in the import
department in July, 1958. She rendered services as secretary in all these departments.
She enjoyed maternity leave in May, 1957, and upon her return on September 15, 1957,
she was requested to assist in the export department as secretary to a certain Miss
Virginia Mata. In July, 1958, she was assigned to the import department also as
secretary, and this time under the direct supervision of petitioner P. H. Sorensen.
Her work as secretary in the shipping and export departments included that of attending
to correspondence, taking down dictations and transcribing them, filing, receiving
telephone calls for the manager, making appointments for his official and personal
engagements and for his consular work in the Danish Consulate. In the import
department, in addition to the duties above-mentioned, she sometimes operated the
telephone switchboard.
On August 28, 1958, around 8 to 9 in the morning, P. H. Sorensen requested Dizon to
prepare three applications for letters of credit to be opened with the National City Bank
of New York; one for milk for Copenhagen and two for flour for Vancouver and Portland;
and to write an offer for tube mills to be submitted to one of the customers of the
corporation. According to Dizon, when Sorensen at 2:00 o'clock in the afternoon of the
following day, August 29, discovered that the work had not been completed, he called
her inefficient, less efficient than when she was not yet a union member. She further
declared that Sorensen would not listen to any explanation; that instead, he told her to
finish the work right away before the close of banking hours (it being a Friday); that she
sought the help of one Mr. Julio Jimenez who made the necessary computations and
that at about 3:00 o'clock that afternoon of August 29, 1958, she managed to finish the
three letters of credit with all the necessary supporting papers. Dizon said that it took
her some time to finish the said work because she had never before undertaken such
task; that the preparation required a detailed procedure, utilizing facts and figures to be
found in the files.
Continuing her statements, she said that she finished the offer for the tube mills on
August 30, 1958 (Saturday); but on this day, petitioner Sorensen called her to his table
and inquired why she had abandoned her desk for three hours; that when she tried to
explain that she was out for only 15 minutes for a call of nature, Sorensen again
reproached her with the imputations that she merely attended to union activities, and
neglecting her work; that when she asked him if they wanted her to leave the company.
On September 1, 1958, when she reported for work, she felt sick and that upon the
written advice of the company's medical officer, the management gave her two days'
sick leave; that upon her return to work on September 4, 1958, petitioner Jakobsen
informed her that he had decided that she should resign voluntarily from the company in
order that she might be entitled to the Provident Fund; that said Jakobsen also told her
that she had become inefficient because of union activities; that should she not resign,
the Company would be forced to dismiss her. On September 6, 1958, she was again
pressed into resigning on pain of dismissal; that when she forced the issue of whether
or not she was being kicked out for union activities. Both E. Jakobsen and K. R. Nielsen
presented to her the letter dismissing her effective September 1, 1958.

ISSUE:
Whether or not the East Asiatic Co., Ltd is guilty of unfair labor practice for dismissal of
Soledad A. Dizon by reason of her union activities.
DECISION: Favored to Miss Dizon Reinstated with Back wages
Judge Tabigne, after considering the conflicting evidence in detail in a long decision,
gave credence to Dizon's version. It is possible that her testimony, upon critical
examination — as was done by petitioners' attorneys — may disclose some defective or
weak particulars; but allowing for the advantage of the trial judge who observed her on
the witness stand, and considering that under the law, we are not permitted to pass —
at this level — on the preponderance of evidence, the finding must be approved that
she had been dismissed without sufficient cause, but owing to her activities on behalf of
the Union. It is to be observed that delay in her assigned work has not been shown to
be habitual although she was in the employ of the company for seven years; and only
after she had joined the Union, was she called to account or reproached for something
that, under other circumstances, might have been overlooked.3 She must have
perceived the new fault-finding attitude of her superiors, and realizing she had become
persona non-grata, she burst into tears on the day (August 30, 1958), when Sorensen
asked why she had not yet finished the tube-mills chore and sneeringly referred to her
other interests.

Root-cause of it all, she suspected, — and as the court found — was her concern for
the new labor association. Her employment was terminated without any of the justifying
causes enumerated in Republic Act No. 1787.
Wherefore, her reinstatement with back pay was correctly ordered. Judgment affirmed,
with costs.

BLANCO

5. Carlos Cruz, petitioner vs. philippine association of free labor union. G.R No, L 26519
CARLOS CRUZ, Petitioner, v. PHILIPPINE ASSOCIATION OF FREE LABOR
UNIONS (PAFLU), Respondent. [G.R. No. L-26519. October 29, 1971.]
Facts:
Spouses Tan own a business venture where they own a Quality Container Factory they
employed hired hand in the manufacture and sale of tin cans. In January 1961, their
workers formed a union called Philippine Trade and General Workers' Organization
(PTGWO), elected its officers and had it registered with the Department of Labor. A
month later on Feb 28, 1961, the factory received a notice of its existence with their
collective bargaining proposals. But due to Union’s unreasonable delay in discussing
the CBA contract to the factory, a complaint was filed by the company against the union.
The Complainant Union proposed to continue the negotiations to possibly finalize a
Collective Bargaining Contract with the management.
Notwithstanding the protest lodged by PTWGO, PAFLU, by a majority vote was
declared as the winning Collective Bargained representative of the factory’s workers.
After the issue of the certification was decided by Court of Industrial Relations (CIR),
however, PAFLU proposed to continue the negotiations to possibly finalize a CBA
contract with the management but a month later, the Factory was however sold after a
month to respondent Carlos Cruz. Carlos Cruz however avers that the existence of
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU) was not declared by
Mrs. Tan prior to the sale although the court stated that the sale in all phases is
seemingly without flaw.
PAFLU then instituted an action against the Tan spouses for ULP. CIR sustained the
claim of PAFLU that the sale factory was tainted by a bad faith and designed to avoid
bargaining collectively with it as the duly chosen representative of such employee. And
an order was given for the reinstatement of union members with full back wages.
Issue:
Whether or not, there is unfair labor practice because of the sale.
CIR erred in holding the failure of the factory owners to bargain collectively and the sale
of the factory as unfair labor practice.
Decision: Deemed bad faith as the Tan Spouses failed to bargain collectively
The court determined the company's motive for the sale, revealing that it supported a
stand against workers' sentiments and financed witness testimony during protests. The
sale was executed to eliminate curricular labor issues, leading to the conclusion that the
transaction was tainted by bad faith and an unfair labor practice.
The court ruled that a buyer should not enjoy all profits from a sale without
corresponding responsibilities, especially when the sale was executed under dubious
circumstances. Carlos Cruz was not free from attending faults, as Mrs. Tan disclosed he
was aware of labor problems. The decision must be affirmed, as the Industrial Peace
Act instituting free collective bargaining would be frustrated if it held otherwise. The
labor organization designated for collective bargaining should represent all employees
in such units.
Petitioner Cruz's connivance with the union was deemed bad faith, as the Tan spouses
failed to bargain collectively, resulting in unfair labor practice and discrimination against
the union. The court deemed this conduct unjust.
Respondent Judge Co refused to dismiss Union members and reinstated them,
ensuring the law was followed. The case was remanded to CIR for further proceedings
.
6. Complex electronics employees association vs. NLRC, G.R No. 121315

Complex Electronics Employees Association vs NLRC,

[G.R. No. 121315. July 19, 1999.]
Facts
Complex Electronics Corporation (Complex) was engaged in the manufacture of
electronic products as a subcontractor where its customers gave their job orders, sent
their own materials and consigned their equipment to Complex
The customers were foreign-based companies with different product lines and
specifications requiring the employment of workers with specific skills for each product
line.
- One of their product lines is Lite-On-Lite for the Lite-On Philippines Electronics
Co.
The rank and file workers of Complex were organized into a union known as the
Complex Electronics Employees Association (Union).
On March 4, 1992, Complexed received a facsimile message from Lite-On Philippines
Electronics Co., requiring it to lower its prices by 10% since it was no longer competitive
with that of mainland China.
March 9, 1992, a meeting was held between Complex and the personnel of the Lite-On
Production Line.
- Complex informed its Lite-On personnel that the request to lower the price was
not feasible as they were already incurring losses at the present prices of their products.
- That Complex was left with no alternative but to close down the operations of the
Lite-On-Line.
- Complex, however, promised that retrenchment will not take place until 1 month
from March 09, 1992; the company will try to prolong the work for the EE or transfer
them to other lines; and a retrenchment pay of ½ of the salary for every year of service.
March 13,1992, the Union filed a notice of closure of the Lite-On Line with the DOLE
and the retrenchment of the (97) affected EEs.
March 25,1993, the Union filed a notice of strike with the National Conciliation and
Mediation Board (NCMB).
April 6,1992 (night time) the machinery, equipment and materials being used for
production at Complex were pulled- out from the company premises and transferred to
the premises of Ionics Circuit, Inc.
April 7,1992, a total closure of company operation was effected at Complex.
The Union filed a complaint with the Labor Arbitration Branch of the NLRC for unfair
labor practice, illegal closure/ illegal lockout, money claims for vacation leave, sick
leave, unpaid wages, 13th month pay, and damages.
- The pull-out of the machinery, equipment and materials, which resulted to the
sudden closure of the company was in violation of the Labor Code and the existing
CBA.
- Ionics was impleaded as a party defendant because the officers and
management personnel of Complex were also holding office at the Ionics with Lawrence
Qua, as the President of both companies.
Complex averred that since the time the union filed its of strike, there was a significant
declined in the quantity and quality of the product in all of the production lines.
- Fearful that the machinery, equipment and materials would be trenched
inoperative and unproductive due to the impending strike, the customers ordered their
pull-out and transfer to Ionics. Thus, Complex was compelled to cease operations.
Ionics contented that it was an entity separate and distinct from Complex and had been
in existence 8 years
- Lawrence Qua, the president of Complex and also the president of Ionics.
- It denied having Qua as their owner since he had no recorded subscription of
P 1,200,000.00 in Ionics (as claimed by the Union).
- The hiring of some displaced workers of Complex was an exercise of
management prerogatives.
- The transfer of the machinery, equipment and materials from Complex was the
decision of the owners who were common customers of Complex and Ionics.
The Labor Arbiter ruled in favor of the Union (reinstatement, back wages,and damages)
NLRC modified the ruling of the Labor Arbiter ( separation pay and damages);MRs was
denied
Issues The issues in the case of Complex Electronics Employees Association vs. NLRC
include:Legitimacy of Business Closure: The main issue revolves around the legitimacy
of the closure of Complex Electronics Corporation's Lite-On Line.
● The business of complex had not yet ceased and that Ionics is merely a
“runaway shop”
- an industrial plant moved by its owners from one location to another to
escape union labor regulations or state laws, but the term is also used to
describe a plant removed to a new location in order to discriminate against
employees at the old plants because of their union activities.
● There is an illegal lock-out/illegal dismissal.
- No, there was no illegal lockout/ illegal dismissal.
● QUA can be held personally liable to the Union
- No, Qua should not be held personally liable,
● NLRC erred in ordering Complex to pay the Union 1 month pay as indemnity
- NO,
● Complex is not liable for the payment of separation
- NO, Complex is liable for separation pays
Decision NO UNFAIR LABOR PRACTICE THE RULING AFFIRMS THE RULING OF
THE NLRC. The closure was deemed justified.
The closure of a respondent's operation was justified, as it was not intended to
circumvent the Labor Code on termination of employment. The closure was abrupt and
not due to a 30-day prior notice requirement. Customers, alarmed by a labor dispute
and a strike, directed the company to pull out its equipment, machinery, and materials.
The Labor Arbiter concluded that the decision to cease operation was not justified, as
most customers did not express a pull-out. The determination to cease operation is a
prerogative of management, not a state interference.
The petitioner Union claims Complex is gaining profit, but financial statements show it's
experiencing deficits and losses. Management has the right to close the business in
good faith, regardless of significant losses.
Respondent Qua pulled out machinery, equipment, and materials during nighttime due
to unrest and demands from customers. The laborers were vandalizing equipment,
picketing company premises, and making threats to lock out officers. These actions
were merely done for Qua's official functions and were not indicative of bad faith.
The Labor Arbiter found respondents not guilty of unfair labor practice due to the lack of
strong evidence that the closure of the Complex was intended to interfere with
employees' rights to self-organization and collective bargaining. The closure was
triggered by customers' withdrawal of equipment, machinery, and materials due to a
labor dispute and union strike. The Union's indiscretion in filing a strike notice was not
the proper remedy.
WHEREFORE, premises considered, the assailed decision of the NLRC is AFFIRMED.
SO ORDERED.
7. Manila Electric Company, Petitioner, vs. the honorable secretary of labor. leonardo
quisumbing. G.R No. 127598

GR No. 127598
January 27, 1999
Petitioner:
Manila Electric Company
Respondents:
The Honorable Secretary of Labor Leonardo Quisumbing
Meralco Employees and Workers Association (MEWA) (duly recognized labor
organization of the rank-and-file employees of Meralco)
Issue:
Meralco seeks to annul the orders of the Secretary of Labor dated August 19, 1996 and
December 28, 1996, wherein the Secretary required Meralco and MEWA to execute a
CBA for the remainder of the parties’ 1992-1997 CBA cycle and to incorporate the
Secretary’s dispositions on the disputed economic and non-economic issues
Facts:
September 7, 1995, MEWA approached Meralco with the intention to renegotiate the
CBA
October 17, 1995, Meralco agreed and formed a CBA panel for this purpose
November 10, 1995, Negotiations began but did not result to the mutually accepted
agreement the parties were hoping for
April 23, 1996, MEWA filed a Notice of Strike with the NCMB on the grounds of
bargaining deadlock and ULP. NCMB conducted conciliation conferences but was
unable to reach a settlement between Meralco and MEWA
May 2, 1996, Meralco filed an Urgent Petition with DOLE asking the Secretary to
assume jurisdiction and urge the workers on strike to go back to work.
May 8, 1996, The Secretary granted the petition. The dispositive position contains:
1. The Office assumes jurisdiction over the labor dispute
2. The parties are discouraged from committing any acts that could exacerbate the
situation
3. Both parties must submit their respective Position Papers within 10 days from
receipt.
 4. The Undersecretary, with the help of the Legal Service, will conduct conciliation
conferences between the parties
August 19, 1996, The Secretary resolved the labor dispute with the following demands:
Political Demands:
a. Scope of the collective bargaining unit — the collective bargaining unit shall be
composed of all regular rank-and-file employees hired by the company in all its offices
and operative centers throughout its franchise area and those it may employ by reason
of expansion, reorganization or as a result of operational exigencies (urgent need or
demand).
b. Union recognition and security —
i. The union shall be recognized by the Company as sole and exclusive bargaining
representative of the rank-and-file employees included in the bargaining unit. The
Company shall agree to meet only with Union officers and its authorized representatives
on all matters involving the Union and all issues arising from the implementation and
interpretation of the new CBA.
ii. The union shall meet with the newly regularized employees for a period not to exceed
four (4) hours, on company time, to acquaint the new regular employees of the rights,
duties and benefits of Union membership.
iii. The right of all rank-and-file employees to join the union shall be recognized in
accordance with the maintenance of membership principle as a form of union security.
c. Transfer of assignment and job security —
i. No transfer of an employee from one position to another shall be made if motivated by
considerations of sex, race, creed, political and religious belief, seniority or union
activity.
ii. If the transfer is due to the reorganization or decentralization, the distance from the
employee's residence shall be considered unless the transfer is accepted by the
employee. If the transfer is extremely necessary, the transfer shall be made within the
offices in the same district.
iii. Personnel hired through agencies or contractors to perform the work done by
covered employees shall not exceed one month. If extension is necessary the union
shall be informed. But the Company shall not permanently contract out regular or
permanent positions that are necessary in the normal operation of the Company.
d. Check off Union Dues — where the union increases its dues as approved by the
Board of Directors, the Company shall check off such increase from the salaries of
union members after the union submits check off authorizations signed by the majority
of the members. The Company shall honor only those individual authorizations signed
by the majority of the union members and collectively submitted by the union to the
Company's Salary Administration.
e. Payroll Reinstatement — shall be in accordance with Article 223, p. 3 of the Labor
Code.
f. Union Representation in Committees — the union is allowed to participate in policy
formulation and in the decision-making process on matters affecting their rights and
welfare, particularly in the Uniform Committee, the Safety Committee and other
committees that may be formed in the future.
Signing Bonus — P4,000.00 per member of the bargaining unit for the conclusion of the
CBA.
Existing benefits given by the company will be included in the new agreement if neither
expressly nor impliedly repealed. Effective December 1, 1995
August 30, 1996, Meralco filed a Motion for Reconsideration alleging that the Secretary
gravely abused his discretion amounting to lack or excess of jurisdiction
1. The Secretary awarded a package worth at least 1.142 billion which would not be
financially sustainable for a company that provides public utility.
2. in ordering the grant of a P4,500.00 wage increase, as well as a new and improved
fringe benefits, under the remaining two (2) years of the CBA for the-rank-and-file
employees.
3. in ordering the "incorporation into the CBA of all existing employee benefits, on the
one hand, and those that MERALCO has unilaterally granted to its employees by virtue
of voluntary company policy or practice, on the other hand."
4. in granting certain "political demands" presented by the union.
5. in ordering the CBA to be "effective December 1995" instead of August 19, 1996
when he resolved the dispute.
September 18, 1995, Meralco filed a supplement to the motion for reconsideration
stating that the financial effects were not appreciated properly
MEWA filed a motion for reconsideration in regards with the benefits and decentralizing
the filing of said benefits. The union also wants to implement a Code of Discipline for its
members and the union's representation in the administration of the Pension Fund.
December 28, 1996, The Secretary issued modifications of the August 19, 1996 Order:
1) Effectivity of Agreement — December 1, 1995 to November 30, 1997.
Political Demands:
 1. Union recognition and Security- The Company shall provide the Union a list of
newly regularized employees within a week from regularization and meet the
employees on the Union’s and employees own time
2. Transfer of assignment and job security- The transfer is up to the company but
must be done without discrimination, for valid business reason, made in good
faith and reasonably exercised with the employee’s written consent
3. Contracting out- The Union must be consulted before implementation if the
contract lasts more than 6 months
4. Check Off of Union Dues- With respect to special assessments, attorney's fees,
negotiation fees or any other extraordinary fees individual authorization shall be
necessary before the company may so deduct the same.
5. Union Representation in Committees — The union is granted representation in
the Safety Committee, the Uniform Committee and other committees of a similar
nature and purpose involving personnel welfare, rights and benefits as well as
duties.
Meralco filed petition contending the grave abuse of discretion (non-economic only):
1) . . . in expanding the scope of the bargaining unit to all regular rank and file
employees hired by the company in all its offices and operating centers and those it
may employ by reason of expansion, reorganization or as a result of operational
exigencies;
2) . . . in ordering for a closed shop when his original order for a maintenance of
membership arrangement was not questioned by the parties;
3) . . . in ordering that Meralco should consult the union before any contracting out for
more than six months;
4) . . . in decreeing that the union be allowed to have representation in policy and
decision making into matters affecting "personnel welfare, rights and benefits as well as
duties;"
5) . . . in ruling for the inclusion of all terms and conditions of employment in the
collective bargaining agreement;
6) . . . in exercising discretion in determining the retroactivity of the CBA;
The Union disputes the allegation of grave abuse of discretion by citing that the
Secretary followed constitutional norms and specific standards laid by the constitution
itself and that the Secretary, whose expertise and experience result to findings that
generally binding on this Court, properly weighed relevant evidence in rendering a
decision.
Sec. 1, Art. 8 of the Constitution
Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the government.
It is recognized that the provisions cited by the union can serve in assessing the validity
of the Secretary’s actions, but are not clear, precise and objective standards. These
yardsticks and constitutional interpretations will not be used, rather the Court will simply
apply the standard of reasonableness and observe due process.
The Court found that the Secretary misappreciated evidence by using the evidence from
the union that was lacking in breakdowns and supporting evidence instead of the
evidence Meralco presented based on the first 6 months of 1996.
The Court’s resolution (non-economic only):
1. Scope of the Bargaining Unit (sided with the Labor Secretary)
The court granted the union demand to the composition of the CBU only be that of the
regular rank and file employees by reason of expansion, reorganization or as result of
operational exigencies.
2. Issue of Union Security (sided with Meralco)
The court sided with Meralco’s objection on the grounds that no party questioned it, no
evidence was found that would warrant the restriction, and the demand is not a
mandatory subject for CBA.
3. The Contracting Out Issue (disagrees with the Secretary’s added requirement)
The union wanted to limit the implementation of any contracting out in a way that the
Secretary saw as not necessary or applicable for their situation. The court felt that there
was already balance and the requirement provided by the Secretary only seems
unreasonable, restrictive and potentially disruptive rather than helpful.
4. Union Representation in Committees (sided with the Secretary)
The court finds merit in the ruling made by the Secretary in including the union through
its representatives in decision-making process on matters affecting the Union members'
rights, duties and welfare as required in Article 211 (A) (g) of the Labor Code. The
decision made to include them was not found as an intrusion to the management
prerogatives.
5. Inclusion of All Terms and Condition in the CBA (sided with Meralco)
The court agrees with Meralco that the Secretary acted in excess of the discretion
allowed by law. To avoid possible problems and conflicted the ruling was that only those
terms and conditions that already exists in the current CBA and was granted by the
Secretary should be included.
6. Retroactivity of the CBA (sided with Meralco)
The Court found no sufficient legal ground on the other justification for the retroactive
application of the disputed CBA, and therefore hold that the CBA should be effective for
a term of 2 years counted from December 28, 1996 (the date of the Secretary of Labor's
disputed order on the parties' motion for reconsideration) up to December 27, 1999.
ISSUE: is the validity and reasonableness of the orders issued by the Secretary of
Labor regarding the Collective Bargaining Agreement (CBA) negotiations between
MERALCO and MEWA.
Decision: Set aside yung claim sa Secretary labor
The petition is granted and the orders of the Secretary Labor dated August 19, 1996
and December 28, 1996 are set aside to the extent set forth above. The parties are
directed to execute a Collective Bargaining Agreement incorporating the terms and
conditions contained in the unaffected portion is of the Secretary of Labor's orders of
August 19, 1996 and December 28, 1996, and the modifications set forth above. The
retirement fund issue is remanded to the Secretary of Labor for reception of evidence
and determination of the legal personality of the MERALCO retirement
SO ORDERED
Source: https://lawphil.net/judjuris/juri1999/jan1999/gr_127598_1999.html

8. Cainta Catholic School and MSGR. Mariano T. Balbago, petitioner Vs. Cainta catholic
school employee. GR. 151021

GR No. 151021
May 4, 2006
Petitioners:
Cainta Catholic School
Msngr. Mariano T. Balbago
Respondent:
Cainta Catholic School Employees Union
DECISION: COURT OF APPEALS SAID THE PETITION WAS GRANTED AND ULP
WAS PRESENT

SUPREME COURT: DID NOT FIND ULP ON THE RETIREMENT OF LLAGAS AND
JAVIER.. And within her rights.
Issue:
The main issue for resolution hinges on the validity of a stipulation in a Collective
Bargaining Agreement (CBA) that allows management to retire an employee in its
employ for a predetermined lengthy period but who has not yet reached the minimum
compulsory retirement age provided in the Labor Code.
Antecedent facts:
On 6 March 1986, a Collective Bargaining Agreement (CBA) was entered into between
Cainta Catholic School (School) and the Cainta Catholic School Employees Union
(Union) effective 1 January 1986 to 31 May 1989. This CBA provided, among others,
that:
Duration of the Agreement:
CBA shall be effective between January 1,1986-May 31,1989. At least 60 days before
expiration of the Agreement the parties will be made to send the basis of negotiations
for the execution of a new agreement. If no new agreement is reached by expiration
date, the agreement will remain in full effect until a new one is executed.
Msngr. Mariano Balbago was appointed School Director in April 1987. From this time
the Union became inactive.
September 10, 1993, The union held an election with the ff as results:
President- Mrs. Rosalina Llagas
Vice-President- Paz Javier
Treasurer- Fe Villegas
Secretary- Maria Luisa Santos
Llagas was then the Dean of the Student Affairs while Villegas and Santos were Year-
Level Chairmen.
Other elected officers:
Secretaries- Rizalina Fernandez, Ester Amigo
Treasurer- Nena Marvilla

Auditors- Gilda Galange and Jimmy del Rosario

P.R.O.s- Filomeno Dacanay and Adelina Andres
Business managers- Danilo Amigo and Arturo Guevarra
October 15,1993, Persuant to Section 2, Article X of the CBA, the School retired both
Llagas and Javier. The emnployee can be retired either by applying himself or by
decision of the Director of the School, upon reaching 60 yrs old or having rendered 20
yrs of service with at least 3 yrs continuous.
Three (3) days later, the Union filed a notice of strike with the National Conciliation and
Mediation Board (NCMB) docketed as NCMB-RB-12-NS-10-124-93.
On November 8, 1993, the Union struck and picketed the School's entrances.
On November 11, 1993, then Secretary of Labor Ma. Nieves R. Confesor issued an
Order certifying the labor dispute to the National Labor Relations Commission (NLRC).
The dispositive portion reads (summarized and paraphrased):
The Office certifies the labor dispute pursuant to Article 263(g) of the Labor Code asn
amended. All strikers are to return to work within 24 hrs, under the same terms and
conditions before the strike, upon receiving the order. The effects of the termination of
Llagas and Javier are suspended and they will be reinstated to their former positions
and privileges without loss of seniority rights pending validity of their dismissal. Both
parties are discouraged to do any act that could aggravate the situation.
December 20, 1993, the School file a petition to the NLRC to declare the strike illegal.
July 27,1994, the Union filed a complaint for ULP to the NLRC docketed as NLRC Case
No. RAB-IV-7-6827-94-R, entitled, "Cainta Catholic School Employees Union v. Cainta
Catholic School, et. al.," before Arbitration Branch IV. Upon motion, then Labor Arbiter
Oswald Lorenzo ordered the consolidation of this unfair labor practice case with the
above-certified case.
January 31, 1997, NLRC rendered resolution favoring the School.
Three (3) issues were passed upon by the NLRC, namely: (1) whether the retirement of
Llagas and Javier is legal; (2) whether the School is guilty of unfair labor practice; and
(3) whether the strike is legal.
NLRC ruled the retirements to be legal and was merely the exercise of an option given
under the CBA. The ULP charges against the School were dismissed due to insufficient
evidence. The strike between November 8-12, 1993 is illegal, thereby declaring all
union officers to have lost their employment status.
The Union moved for reconsideration but it was denied in a Resolution dated April 30,
1997.
Hence, on 9 July 1997, the Union filed a petition for certiorari before this Court docketed
as G.R. No. 129548. The Court issued a temporary restraining order (TRO) against the
enforcement of the subject resolutions effective as of 23 July 1997. The School,
however, filed a motion for clarification considering that it had already enforced the 31
January 1997 NLRC Resolution.
July 28,1997, the 10 regular teachers that lost their employment status reported back to
work but were not accepted by the School due to the pending motion for clarification.
This prompted the Union to file a petition for contempt against Balbago and his agents
before this Court, docketed as G.R. No. 130004, which was later on consolidated with
G.R. No. 129548.
Pursuant to the ruling of this Court in St. Martin Funeral Homes v. NLRC,12 the case
was referred to the Court of Appeals and re-docketed as CA-G.R. SP No. 50851.
August 20,2001, The Court of Appeals granted the petition to annul the Resolutions
dated January 31, 1997 and April 30, 1997 of the NLRC; and dismissed the petition for
contempt for lack of merit. The decretal portion of the decision reads:
WHEREFORE, premises considered, the petition to annul and set aside the 31 January
1997 and the 30 April 1997 resolutions of the National Labor Relations Commission is
GRANTED. Judgment is hereby RENDERED directing private respondents: 1) to
REINSTATE the terminated union officers, except Rosalinda Llagas, Paz Javier, Gilda
Galange and Ester Amigo, to their former positions without loss of seniority rights and
other privileges with full backwages, inclusive of allowances and other benefits or their
monetary equivalent from 9 June 1997 up to the time of their actual reinstatement; 2) to
pay Rosalinda Llagas: a) separation pay equivalent to one (1) month pay for every year
of service, in lieu of reinstatement, with full backwages, inclusive of allowances and
other benefits or their monetary equivalent from 9 June 1997 up to the time of the
finality of this decision; b) moral and exemplary damages in the amount of ten thousand
pesos (P10,000.00) and five thousand (P5,000.00), respectively; 3) to pay Paz Javier,
or her heirs: a) unpaid salaries, inclusive of allowances and other benefits, including
death benefits, or their monetary equivalent from the time her compensation was
withheld from her up to the time of her death; b) separation pay equivalent to one (1)
month's salary for every year of service; and c) moral and exemplary damages in the
amount of ten thousand pesos (P10,000.00) and five thousand pesos (P5,000.00),
respectively.
Private respondents are also ordered to pay petitioner union attorney's fees equivalent
to five percent (5%) of the total judgment award.
The petition for contempt, however, is DISMISSED for lack of merit.
No pronouncement as to costs.
SO ORDERED.13
The retirement of Llagas and Javier are now being interpreted as an act amounting to
ULP when viewed against the relevant circumstances obtaining in the case. The
appellate court pointed out that both Llagas and Javier are the most vocal, dynamic and
influential of all union officers. Both Llagas and Javier were seen as threats specially
with the aggressive union, in contrast to the previous union president who was seen as
passive, cooperative and pacific. The School decided to “nip the bud” by retiring its
prominent leaders.
Msngr. Balbago was obviously anti-union as seen when he immediately asked for a
temporary stop on all union activities as soon as he assumed office. When the union
furnished the school, through counsel, a copy of a proposed CBA on 3 November 1993,
the school in a cavalier fashion ignored it on the pretext that the union no longer
enjoyed the majority status among the employees.
The appellate court concluded that the retirement was a bust and a ULP commited by
the School. The “no-strike, no-lockout” clause was also said to not have been violated
between November 8-12, 1993.
The motion for reconsideration filed by the school was denied save for some union
officers where the court modified its ruling granting them separation pay instead of
reinstatement due to retirement or death.
The school argued that the retirement of Llagas and Javier was within their rights under
the CBA. The Union relying on the findings of the appellate court, argues that the act
was a subterfuge to but the union.
NLRC ruled that the retirement of Llagas was inevitable with her being a managerial
employee accepting the role as Union President, she lost trust and confidence by the
School as she has allowed her loyalties to be divided between administration and union.
Javier’s retirement was decided upon evaluation of the complaints of her students about
her attitude, language and attendance.
NLRC is impelled to reverse the Court of Appeals and affirm the retirement of Llagas
and Javier due to the acts being within their right under CBA.
The School insisted that Llagas and Javier were managerial employees while the union
maintains that they are rank-and-file employees. After considering the responsibilities
their roles perform, it was concluded that Llagas and Javier are managerial and
supervisory employees, respectively.
Finally, there is neither legal nor factual justification in awarding backwages to some
union officers who have lost their employment status, in light of our finding that the
strike is illegal. The ruling of the NLRC is thus upheld on this point. We are also satisfied
with the disposition of the NLRC that mandates that Llagas and Javier (or her heirs)
receive their retirement benefits.
WHEREFORE, the petition is GRANTED. The Resolution dated 31 January 1997 of the
National Labor Relations Commission in NLRC NCR CC No. L-000028-93 is
REINSTATED.
SO ORDERED.
Source:
https://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=4806
0:gr-151021-2006&catid=1479&Itemid=566

PERONA
9. Alex Ferrer, Rafael Ferrer, Henry Diaz, Domingo Banco Lita, Gil Deguzman and
Federations of Democratic labor union. FEDLU PETITIONERS VS. NLRC G.R No.
100898

G.R. No. 100898 July 5, 1993

ALEX FERRER, RAFAEL FERRER HENRY DIAZ, DOMINGO BANCOLITA, GIL DE
GUZMAN,
and FEDERATION OF DEMOCRATIC LABOR UNIONS, (FEDLU), petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), HUI KAM
CHANG (In
his capacity as General Manager of Occidental Foundry Corporation), OCCIDENTAL
FOUNDRY CORPORATION, MACEDONIO S. VELASCO (In his capacity as
representative of
the Federation of Free Workers), GENARO CAPITLE, JESUS TUMAGAN, ERNESTO
BARROGA, PEDRO LLENA, GODOFREDO PACHECO, MARCELINO CASTILLO,
GEORGE
IGNAS, PIO DOMINGO, and JAIME BAYNADO, respondents.
Genrosa P. Jacinto and Raymundo D. Mallilin for private respondents.
MELO, J.:
FACTS
Petitioners were regular and permanent employees of the Occidental Foundry
Corporation
(OFC) in Malanday, Valenzuela, Metro Manila which was under the management of Hui
Kam
Chang. As piece workers, petitioners' earnings ranged from P110 to P140 a day. They
had been
in the employ of OFC for about ten years at the time of their dismissal in 1989 (p. 38,
Rollo).
On January 5, 1989, the Samahang Manggagawa ng Occidental Foundry Corporation-
FFW
(SAMAHAN) and the OFC entered into a collective bargaining agreement (CBA) which
would be
effective for the three-year period between October 1, 1988 and September 30, 1991
(Memorandum for OFC and Hui Kam Chang, p. 6, Rollo; p. 551).
Article II thereof provides for a union security clause thus:
Sec. 1 — The company agrees that all permanent and regular factory workers in the
company
who are members in good standing of the union or who thereafter may become
members, shall
as a condition of continued employment, maintain their membership in the union in good
standing for the duration of the agreement.
xxx xxx xxx
Sec. 3 — The parties agree that failure to retain membership in good standing with the
UNION
shall be ground for the operation of paragraph 1 hereof and the dismissal by the
company of the
aforesaid employee upon written request by the union. The aforesaid request shall be
accompanied by a verified carbon original of the Board of (sic) Resolution by the UNION
signed
by at least a majority of its officers/directors. (p. 562, Rollo.)
On May 6, 1989, petitioner Alex Ferrer and the SAMAHAN, filed in the Department of
Labor and
Employment (DOLE), a complaint for the expulsion from SAMAHAN of the following
officers:
Genaro Capitle (president), Jesus Tumagan (vice-president), Godofredo Pacheco
(auditor), and
Marcelino Pacheco (board member) (Case No. NCR-00-M-89-11-01). The complaint
was
founded on said officers' alleged inattentiveness to the economic demands of the
workers.
However, on September 4, 1989, petitioners Diaz and Alex Ferrer withdrew the petition
(p. 590,
Rollo).
On September 10, 1989, petitioners conducted a special election of officers of the
SAMAHAN
(pp. 205 & 583, Rollo). Said election was, however, later questioned by the FFW.
Nonetheless,
the elected set of officers tried to dissuade the OFC from remitting union dues to the
officers led
by Capitle who were allied with the FFW. Later, however, Romulo Erlano, one of the
officers
elected at the special election, manifested to the DOLE that he was no longer objecting
to the
remittance of union dues to the officers led by Capitle. Petitioners' move to stage a
strike based
on economic demands was also later disowned by members of the SAMAHAN.
The intraunion squabble came to a head when, on September 11, 1989, a resolution
expelling
petitioners from the SAMAHAN was issued by the aforesaid union officials headed by
Capitle,
together with board members George Ignas, Pio Domingo, and Jaime Baynado (pp. 286
& 599,
Rollo). The following day, Capitle sent OFC the following letter:
12 September 1989
Mr. Hui Kam Chang
General Manager
Malanday, Valenzuela
Metro Manila
Dear Mr. Chang:
In compliance with Article II, Sec. 3 of the Union Security Clause as enunciated in our
Collective
Bargaining Agreement, I would like you to dismiss the following employees on the
ground of
failure to retain membership in good standing:
1. Alex Ferrer
2. Gil de Guzman
3. Henry Diaz
4. Domingo Bancolita
5. Rafael Ferrer, Jr.
Attached herewith is the verified carbon original of the Board Resolution of the union
signed by
the majority of its officers/directors.
Thank you very much.
Very truly yours,
(Sgd.)
GENARO CAPITLE
President
(p. 66, Rollo.)
Although petitioners received this letter weeks after its date, it appears that on that
same date,
they had learned about their dismissal from employment as shown by the letter also
dated
September 13, 1989 which they sent the Federation of Democratic Labor Unions
(FEDLU).
They volunteered therein to be admitted as members of the FEDLU and requested that
they be
represented ("katawanin") by said federation before the DOLE in the complaint which
they
intended to file against the union (SAMAHAN), the FFW and the company for illegal
dismissal,
reinstatement, and other benefits in accordance with law
(p. 74, Rollo).
Thereafter, on various dates, petitioners sent individual letters to Hui Kam Chang
professing
innocence of the charges leveled against them by the SAMAHAN and the FFW and
pleading
that they be reinstated (pp. 69-73, Rollo). Their letters appear to have elicited no
response.
Thus, contending that their dismissal was without cause and in utter disregard of their
right to
due process of law, petitioners, through the FEDLU, filed a complaint for illegal
dismissal and
unfair labor practice before the NLRC against Hui Kam Chang, OFC, Macedonio S.
Velasco (as
representative of the FFW) the FFW, and the SAMAHAN officers headed by Capitle (p.
75,
Rollo).
LABOR ARBITER DECISION
In due course, after the case was ventilated through position papers and other
documents, the
labor arbiter rendered a decision dismissing petitioners' complaint (pp. 79-89, Rollo). He
found
that in dismissing petitioners, OFC was "merely complying with the mandatory
provisions of the
CBA — the law between it and the union." He added:
To register compliance with the said covenant, all that is necessary is a written request
of the
union requesting dismissal of the employees who have failed to retain membership in
good
standing with the union. The matter or question, therefore of determining why and how
did
complainants fail to retain membership in good standing is not for the company to
inquire via
formal investigation. The employer shall refuse to employ any person unless he is a
member of
the majority union and the employer shall dismiss employees who fail to retain their
membership
in the majority union. The effect is discrimination to encourage membership in other
unions. (pp.
86-87, Rollo.)
Hence, the labor arbiter concluded, the dismissal of petitioners was an exercise of
legitimate
management prerogative which cannot be considered as an unfair labor practice. On
whether
the SAMAHAN and the FFW could be held liable for illegal dismissal and unfair labor
practice,
the arbiter opined that since there was no employer-employee relationship between
petitioners
and respondent unions, the complaint against the latter has no factual and legal bases,
because
petitioners "should not have confused expulsion from membership in the union as one
and the
same incident to their subsequent employment termination."
Consequently, petitioners appealed to the NLRC on the grounds that there was prima
facie
evidence of abuse of discretion on the part of the labor arbiter and that he committed
serious
errors in his findings of facts.
On June 20, 1991, the NLRC rendered the herein questioned decision affirming in toto
the
decision of the arbiter. Petitioners motion for the reconsideration of the NLRC decision
having
been denied, they resorted to the instant petition for certiorari which presents the issue
of
whether or not respondent Commision gravely abused its discretion in affirming the
decision of
the labor arbiter which is allegedly in defiance of the elementary principles of procedural
due
process as the petitioners were summarily dismissed from employment without an
investigation
having been conducted by the OFC on the veracity of the allegation of the SAMAHAN-
FFW that
they violated the CBA.
In the case at bar, while it is true that the CBA between OFC and the SAMAHAN
provided for
the dismissal of employees who have not maintained their membership in the union, the
manner
in which the dismissal was enforced left much to be desired in terms of respect for the
right of
petitioners to procedural due process.
In the first place, the union has a specific provision for the permanent or temporary
"expulsion"
of its erring members in its constitution and by-laws ("saligang batas at alituntunin").
Under the
heading membership and removal ("pag-aanib at pagtitiwalag"), it states:
Sec. 4. Ang sinumang kasapi ay maaring itiwalag (sic) ng Samahan pansamantala o
tuluyan sa
pamamagitan (sic) ng tatlo't ikaapat (¾) na bahagi ng dami ng bilang ng Pamunuang
Tagapagpaganap. Pagkaraan lamang sa pandinig sa kanyang kaso. Batay sa
sumusunod:
(a) Sinumang gumawa ng mga bagay bagay na labag at lihis sa patakaran ng
Samahan.
(b) Sinumang gumawa ng mga bagay na maaaring ikabuwag ng Samahan.
(c) Hindi paghuhulog ng butaw sa loob ng tatlong buwan na walang sakit o Doctor's
Certificate.
(d) Hindi pagbibigay ng abuloy na itinatadhana ng Samahan.
(e) Sinumang kasapi na natanggal sa kapisanan at gustong, sumapi uli ay
magpapanibago ng
bilang, mula sa taon ng kanyang pagsapi uli sa Samahan. (Emphasis supplied; Ibid., p.
177).
No hearing ("pandinig") was ever conducted by the SAMAHAN to look into petitioners'
explanation of their moves to oust the union leadership under Capitle, or their
subsequent
affiliation with FEDLU.
On the other hand, herein petitioners were not given even one opportunity to explain
their side
in the controversy. This procedural lapse should not have been overlooked considering
the
union security provision of the CBA.
What aggravated the situation in this case is the fact that OFC itself took for granted
that the
SAMAHAN had actually conducted an inquiry and considered the CBA provision for the
closed
shop as self-operating that, upon receipt of a notice that some members of the
SAMAHAN had
failed to maintain their membership in good standing in accordance with the CBA, it
summarily
dismissed petitioners. To make matters worse, the labor arbiter and the NLRC shared
the same
view in holding that "(t)he matter or question, therefore, of determining why and how did
complainants fail to retain membership in good standing is not for the company to
inquire via
formal investigation" (pp. 87 & 135, Rollo). In this regard, the following words of my
learned
brother, Mr. Justice Feliciano, in the Resolution in Cariño are apt:
(Closed-shop agreement is an agreement whereby an employer binds himself to hire
only
members of the contracting union who must continue to remain members in good
standing to keep their jobs.)
The right of an employee to be informed of the charges against him and to reasonable
opportunity to
present his side in a controversy with either the Company or his own Union, is not wiped
away by a
Union Security Clause or a Union Shop Clause in a CBA. An employee is entitled to be
protected not
only from a company which disregards his rights but also from his own Union the
leadership of which
could yield to the temptation of swift and arbitrary expulsion from membership and
hence dismissal
from his job. (pp. 186 & 189.)
(Union security clauses refer to arrangements or stipulations in the collective bargaining
agreements (CBA) requiring membership in the contracting union as a condition for
employment or retention of employment in the company. )
The need for a company investigation is founded on the consistent ruling of this Court
that the
twin requirements of notice and hearing which are essential elements of due process
must be
met in employment-termination cases. The employee concerned must be notified of the
employer's intent to dismiss him and of the reason or reasons for the proposed
dismissal. The
hearing affords the employee an opportunity to answer the charge or charges against
him and
to defend himself therefrom before dismissal is effected (Kwikway Engineering Works
vs. NLRC,
195 SCRA 526 [1991]; Salaw vs. NLRC, 202 SCRA 7 [1991]).
While the law recognizes the right of an employer to dismiss employees in warranted
cases, it
frowns upon arbitrariness as when employees are not accorded due process (Tan, Jr.
vs. NLRC,
183 SCRA 651 [1990]). Thus, the prerogatives of the OFC to dismiss petitioners should
not
have been whimsically done for it unduly exposed itself to a charge of unfair labor
practice for
dismissing petitioners in line with the closed shop provision of the CBA, without a proper
hearing
(Tropical Hut Employees' Union-CGW vs. Tropical Hut Food Market, Inc., 181 SCRA
173
[1990]; citing Binalbagan-Isabela Sugar Co., Inc. (BISCOM) vs. Philippine Association of
Free
Labor Unions (PAFLU), 8 SCRA 700 [1983]
Under Rule XIV, Sections 2, 5, and 6 of the rules implementing Batas Pambansa Blg.
130, the
OFC and the SAMAHAN should solidarity indemnify petitioners for the violation of their
right to
procedural due process (Great Pacific Life Assurance Corporation vs. NLRC, 187 SCRA
694[1990], citing Wenphil vs. NLRC, 170 SCRA 69 [1989], Cariño vs. NLRC, supra).
However,
such a penalty may be imposed only where the termination of employment is justified
and not
when the dismissal is illegal as in this case where the damages are in the form of back
wages.
As earlier discussed, petitioners' alleged act of sowing disunity among the members of
the
SAMAHAN could have been ventilated and threshed out through a grievance procedure
within
the union itself. But resort to such procedure was not pursued. What actually happened
in this
case was that some members, including petitioners, tried to unseat the SAMAHAN
leadership
headed by Capitle due to the latter's alleged inattention to petitioners' demands for the
implementation of the P25-wage increase which took effect on July 1, 1989. The
intraunion
controversy was such that petitioners even requested the FFW to intervene to facilitate
the
enforcement of the said wage increase (Petition, p. 54; p. 55, Rollo).
Petitioners sought the help of the FEDLU only after they had learned of the termination
of their
employment upon the recommendation of Capitle. Their alleged application with
federations
other than the FFW (Labor Arbiter's Decision, pp. 4-5; pp. 82-83, Rollo) can hardly be
considered as disloyalty to the SAMAHAN, nor may the filing of such applications
denote that
petitioners failed to maintain in good standing their membership in the SAMAHAN. The
SAMAHAN is a different entity from FFW, the federation to which it belonged. Neither
may it, be
inferred that petitioners sought disaffiliation from the FFW for petitioners had not formed
a union
distinct from that of the SAMAHAN. Parenthetically, the right of a local union to
disaffiliate from a
federation in the absence of any provision in the federation's constitution preventing
disaffiliation
of a local union is legal (People's Industrial and Commercial Employees and Worker's
Org.
(FFW) vs. People's Industrial and Commercial Corp., 112 SCRA 440 (1982]). Such right
is
consistent with the constitutional guarantee of freedom of association (Tropical Hut
Employees
Union-CGW vs. Tropical Hut Food Market, Inc., 181 SCRA 173 [1990]).
Hence, while petitioners' act of holding a special election to oust Capitle, et al. may be
considered as an act of sowing disunity among the SAMAHAN members, and, perhaps,
disloyalty to the union officials, which could have been dealt with by the union as a
disciplinary
matter, it certainly cannot be considered as constituting disloyalty to the union. Faced
with a
SAMAHAN leadership which they had tried to remove as officials, it was but a natural
act of
self-preservation that petitioners fled to the arms of the FEDLU after the union and the
OFC had
tried to terminate their employment. Petitioners should not be made accountable for
such an
act.
With the passage of Republic Act No. 6715 which took effect on March 21, 1989, Article
279 of
the Labor Code was amended to read as follows:
Security of Tenure. — In cases of regular employment, the employer shall not terminate
the
services of an employee except for a just cause or when authorized by this Title. An
employee
who is unjustly dismissed from work shall be entitled to reinstatement without loss of
seniority
rights and other privileges and to his full backwages, inclusive of allowances, and to his
other
benefits or their monetary equivalent computed from the time his compensation was
withheld
from him up to the time of his actual reinstatement.
and as implemented by Section 3, Rule 8 of the 1990 New Rules of Procedure of the
National
Labor Relations Commission, it would seem that the Mercury Drug Rule (Mercury Drug
Co., Inc.
vs. Court of Industrial Relations, 56 SCRA 694 [1974]) which limited the award of back
wages of
illegally dismissed workers to three (3) years "without deduction or qualification" to
obviate the
need for further proceedings in the course of execution, is no longer applicable.
Computation of full back wages and presentation of proof as to income earned
elsewhere by the
illegally dismissed employee after his termination and before actual reinstatement
should be
ventilated in the execution proceedings before the Labor Arbiter concordant with Section
3, Rule
8 of the 1990 new Rules of Procedure of the National Labor Relations Commission.
Inasmuch as we have ascertained in the text of this discourse that the OFC whimsically
dismissed petitioners without proper hearing and has thus opened OFC to a charge of
unfair
labor practice, it ineluctably follows that petitioners can receive their back wages
computed from
the moment their compensation was withheld after their dismissal in 1989 up to the date
of
actual reinstatement. In such a scenario, the award of back wages can extend beyond
the
3-year period fixed by the Mercury Drug Rule depending, of course, on when the
employer will
reinstate the employees.
It may appear that Article 279 of the Labor Code, as amended by Republic Act No.
6715, has
made the employer bear a heavier burden than that pronounced in the Mercury Drug
Rule, but
perhaps Republic Act No. 6715 was enacted precisely for the employer to realize that
the
employee must be immediately restored to his former position, and to impress the idea
that
immediate reinstatement is tantamount to a cost-saving measure in terms of overhead
expense
plus incremental productivity to the company which lies in the hands of the employer.
WHEREFORE, the decision appealed from is hereby SET ASIDE and private
respondents are
hereby ordered to reinstate petitioners to their former or equivalent positions without
loss of
seniority rights and with full back wages, inclusive of allowances and other benefits or
their
monetary equivalent, pursuant to Article 279 of the Labor Code, as amended by
Republic Act
No. 6715.
ISSUE:
The main issue in this case is whether or not the termination of the employees who
failed to
maintain their membership in the union in good standing constitutes an unfair labor
practice.
The employees argued that their dismissal was illegal and discriminatory, and that they
were not
given due process before their employment was terminated. The employer, on the other
hand,
argued that the termination was based on the closed shop provision of the collective
bargaining
agreement (CBA) between the company and the union, which required that all
employees be
members of the union and maintain good standing. The employer was obligated to
dismiss
employees who failed to retain their membership in the majority union. The Supreme
Court's
Third Division ultimately upheld the termination of the employees, finding that the
employer was
merely complying with the mandatory provisions of the CBA and that there was no
evidence of
unfair labor practices
FINAL DECISION: Labor arb. And NLRC binasura ung claim ng petitioner
Supreme court- may ULP and illegally dismissed
the decision appealed from is hereby SET ASIDE and private respondents are hereby
ordered
to reinstate petitioners to their former or equivalent positions without loss of seniority
rights and
with full back wages, inclusive of allowances and other benefits or their monetary
equivalent,
pursuant to Article 279 of the Labor Code, as amended by Republic Act No. 6715.
SO ORDERED.
10. National Brewery and Allied industries labor union. Vs. San Miguel Brewery. G.R
No. L-18170

G.R. No. L-18170 August 31, 1963

NATIONAL BREWERY & ALLIED INDUSTRIES LABOR UNION OF THE PHILIPPINES,
plaintiff-appellant,
vs.
SAN MIGUEL BREWERY, INC., THE INDEPENDENT SAN MIGUEL BREWERY
WORKERS'
ASSOCIATION and
ALL OTHER UNKNOWN NON-UNION WORKERS OF THE SAN MIGUEL BREWERY,
INC.,
defendants-appellees.
Marcos Estacio and Ricardo P. Garcia for plaintiff-appellant.
Ponce Enrile, Siguion Reyna, Montecillo and Belo for defendant-appellee San Miguel
Brewery,
Inc.
Nemicio P. Diaz for other defendants-appellees.
REGALA, J.:
FACTS:
Appellant National Brewery & Allied Industries Labor Union of the Philippines is the
bargaining
representative of all regular workers paid on the daily basis and of route helpers of San
Miguel
Brewery, Inc.
On October 2, 1959, it signed a collective bargaining agreement with the company,
which
provided, among other things, that —
The COMPANY will deduct the UNION agency fee from the wages of workers who are
not
members of the UNION, provided the aforesaid workers authorized the COMPANY to
make
such deductions in writing or if no such authorization is given, if a competent court direct
the
COMPANY to make such deduction. (Art. II, Sec. 4)
Alleging that it had obtained benefits for all workers in the company and that "defendant
Independent S.M.B. Workers' Association refused and still refuses to pay UNION
AGENCY FEE
to the plaintiff UNION and defendant COMPANY also refuses and still refuses to deduct
the
UNION AGENCY FEE from the wages of workers who are not members of the plaintiff
UNION
and remit the same to the latter," the union brought suit in the Court of First Instance of
Manila
on November 17, 1960 for the collection of union agency fees under the bargaining
contract.
The lower court, in dismissing the complaint, held that there was nothing in the
Industrial Peace
Act (Republic Act No. 875) which would authorize the collection of agency fees and that
neither
may such collection be justified under the rules of quasi contract because the workers
had not
neglected their business so as to warrant the intervention, of an officious manager. The
trial
court also held the rules of agency inapplicable because there was no agreement
between the
union and the workers belonging to the other union as to the payment of fee nor was
there, said
the court, any allegation in the complaint that the amount of P4.00, which the union
sought to
collect from each employee, was the expense incurred by the union in representing him.
Its motion for reconsideration having been denied, the union appealed to this Court.
The right of employees "to self-organization and to form, join or assist labor
organizations of
their own choosing" (Sec. 3, Republic Act No. 875) is a fundamental right that yields
only to the
proviso that "nothing in this Act or statute of the Republic of the Philippines shall
preclude an
employer from making an agreement with a labor organization to require as a condition
of
employment membership therein, if such labor organization is the representative of the
employees as provided in Section twelve." (Sec. 4[a] [4]).
The only question here is whether such an agreement is a permissible form of union
security
under Section 4(a)(4) as contended by the union.
In the case of General Motors Corp., 130 NLRB 481, the National Labor Relations
Board was
faced with a similar question. In that case, the union proposed to the company that
employees
represented by it and new employees hired thereafter be required as a condition of
continued
employment after 30 days, following the date of the supplementary agreement or of
their initial
employment (whichever was later) to pay to the union a sum equal to the initiation fee
and a
monthly sum equal to the regular dues required of union members at each location. The
company contended that the clause was illegal under Section 7 and Section 8(a) (1) of
the
National Labor Relations Act, as amended.1
In upholding the company's contention the Board held:
. . . any union-security agreement, including one providing for an agency shop,
necessarily
interferes with the Section 7 right of employees to refrain from assisting a labor
organization,
and encourages membership in a labor organization. Such an agreement is therefore
clearly
unlawful under Section 8(a) (1) and (3), unless it is saved by the provision to Section
8(a) (3) of
the Act. That proviso permits an employer to make an agreement with a labor
organization "to
require as a condition of employment membership therein on or after the thirtieth day
following
the beginning of such employment or the effective date of such agreement, whichever is
later ..
Thus, the conclusion is inescapable that an agency-shop arrangement, whatever its
status
under Indiana law, cannot be lawful under the National Labor Relations Act in a State
like
Indiana where employment cannot lawfully be conditioned on literal membership.
GM and UAW were not free under the National Labor Relations Act to require Indiana
employees union membership as a condition of employment, and so they were not free
to
require, as a condition of employment of such employees, any lesser form of union
security,
such as an agency shop. For one cannot waive a right he does not have.
In the Philippines, there is no right-to-work law. But the basic principle underlying the
decision in
that case equally applies here, namely, that where the parties are not free to require
employees
membership in a union as a condition of employment, neither can they require a lesser
form of
union security. "For one cannot waive a right he does not have." And herein lies the
error into
which the union has fallen in arguing that the agency shop agreement in this case can
be
justified under Section 4 (a) (4) because "the lesser must of necessity be included in the
greater."
For although a closed-shop agreement may validly be entered into under Section 4 (a)
(4) of the
Industrial Peace Act (National Labor Union v. Aguinaldo's Echague, Inc., 51 O.G. p.
2899, We
held that the same cannot be made to apply to employees who, like the employees in
this case,
are already in the service and are members of another union. (Freeman Shirt Mfg. Co.
v. Court
of Industrial Relations, G.R. No. L-16561, January 28, 1961.) Hence, if a closed shop
agreement cannot be applied to these employees, neither may an agency fee, as a
lesser form
of union security, be imposed upon them.
It is true, as the union claims, that whatever benefits the majority union obtains from the
employer accrue to its members as well as to nonmembers. But this alone does not
justify the
collection of agency fees from non-members. The benefits of a collective bargaining
agreement
are extended to all employees regardless of their membership in the union because to
withhold
the same from the nonmembers would be to discriminate against them. (International
Oil
Factory Workers Union (FFW) v. Martinez, et al., G.R. No. L-15560, Dec. 31, 1960).
The union's contention that nonmembers are "free riders" who should be made to pay
for
benefits received by them is answered.
And now We come to the next point raised by the union, namely, that nonmembers
should be
made to pay on the principle of quasi contract. The union invokes Article 2142 of the
Civil Code
which provides that —
Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-
contract to
the end that no one shall be unjustly enriched or benefited at the expense of another.
(Emphasis
supplied)
But the benefits that accrue to nonmembers by reason of a collective bargaining
agreement can
hardly be termed "unjust enrichment" because, as already pointed out, the same are
extended
to them precisely to avoid discrimination among employees. (International Oil Factory
Workers'
Union (FFW) v. Martinez, et al., G.R. No. L-15560, Dec. 31, 1960).
Besides, as the trial court held, there is no allegation in the complaint that the amount of
P4.00
represents the expense incurred by the union in representing each employee. For the
benefits
extended to nonmembers are merely incidental.
ISSUE:
It is true, as the union claims, that whatever benefits the majority union obtains from the
employer accrue to its members as well as to nonmembers. But this alone does not
justify the
collection of agency fees from non-members. The benefits of a collective bargaining
agreement
are extended to all employees regardless of their membership in the union because to
withhold
the same from the nonmembers would be to discriminate against them.
In answer to this point, it may be stated that when a union acts as the bargaining agent,
it
assumes the responsibility imposed upon it by law to represent not only its members but
all
employees in the appropriate bargaining unit of which it is the agent.
As an agency it assumes a responsibility imposed by the law na to represent or give
benefits
not only to members but all employees.
DECISION: Dismiss the complaint/Petition
The decision of the Court of First Instance of Manila dismissing the complaint upon the
petition
of the defendant San Miguel Brewery Workers' Association was affirmed by the
Supreme Court.
The orders dated December 6, 1960, and December 20, 1960, of the Court of First
Instance of
Manila are hereby affirmed, without pronouncement as to costs.
Padilla, Bautista Angelo, Labrador, Concepcion, Paredes, Dizon and Makalintal, JJ.,
concur.
Reyes, J.B.L., J., reserves his vote.
Bengzon, C.J., and Barrera, J., took no part.

11. Kiok Loy vs. NLRC, GR L-54334.

Facts
-The Pambansang Kilusan ng Paggawa (Union for short) was certified as the sole
and exclusive bargaining agent of the rank-and-file employees of Sweden Ice
Cream Plant (Company for short) on November 29, 1978. On December 7, 1978,
the Union furnished the Company with two copies of its proposed collective
bargaining agreement (CBA) and requested for counter proposals.
- The Company failed to respond to the Union's request. The Union sent a followup
letter to the Company on February 14, 1979, reiterating its request for
collective bargaining negotiations and for the Company to furnish them with its
counter proposals. The Company again failed to respond. Left with no other
alternative, the Union filed a "Notice of Strike" with the Bureau of Labor Relations
(BLR) on February 14, 1979. Conciliation proceedings were held, but all attempts
towards an amicable settlement failed.

- The case was certified to the National Labor Relations Commission (NLRC) for
compulsory arbitration. The labor arbiter to whom the case was assigned set the
initial hearing for April 29, 1979.
- The Company failed to submit its position paper as required, and the hearing
was cancelled and reset to another date.
-The Company again failed to submit its position paper and instead requested for
a resetting, which was granted.
- The Company again failed to submit its position paper and instead requested for
another resetting, which was denied. The labor arbiter issued a decision on July
20, 1979, finding the Company guilty of unfair labor practice for unjustified refusal
to bargain and declaring the Union's draft proposal for a CBA as the governing
CBA between the employees and the management.

ISSUE
- Whether or not the Company committed unfair labor practice for
unjustified refusal to bargain.
- Whether or not the labor arbiter erred in declaring the Union's draft
proposal for a CBA as the governing CBA between the employees and
the management

DECISION
The Supreme Court held that:
- The Company committed unfair labor practice for unjustified refusal to
bargain. The labor arbiter did not err in declaring the Union's draft
proposal for a CBA as the governing CBA between the employees and
the management. The Supreme Court found that the Company's failure
to respond to the Union's request for CBA negotiations and its repeated
requests for resetting of the hearings were clear indications of its lack of
a sincere desire to bargain.
- The Supreme Court also found that the labor arbiter was correct in
declaring the Union's draft proposal for a CBA as the governing CBA
between the employees and the management, given the Company's
unjustified refusal to bargain.
12. SNTFN-UWP vs. NLRC, GR 113856

Facts
Samahang Manggagawa sa Top Form Manufacturing-United Workers of
the Philippines (SMTFM-UWP) is a labor union representing the
employees of Top Form Manufacturing Phil., Inc. (Top Form)
In 1990, the Regional Tripartite Wages and Productivity Board (RTWPBNCR) issued
Wage Orders Nos. 01 and 02, mandating wage increases
for workers in the National Capital Region (NCR).
Workers receiving a salary of P140.00 per day or less received a P12.00
increase under Wage Order No. 02.
For workers receiving a salary higher than P140.00 per day, the increase
was more than P12.00, but less than P17.00.

Samahang Manggagawa sa TOP Form Manufacturing United Workers of the

Philippines (SMTFM-UWP) filed a complaint against Top Form Manufacturing Phil.,
Inc. (Top Form) for unfair labor practice, alleging that Top Form had discriminated
against its employees by refusing to grant them across-the-board increases in
implementing Wage Orders Nos. 1 and 2.During collective bargaining negotiations,
the parties discussed unresolved economic issues, including wage increases.
Top Form justified its refusal to grant across-the-board increases on the grounds that
(1) the wage orders themselves did not allow for such increases, and (2) granting
across-the-board increases would have resulted in wage distortion. An employer's
promise to grant an across-the-board increase in government-mandated salary
benefits reflected in the Minutes of the negotiation is not an enforceable part of the
CBA.
The CBA is a legal document that governs the relationship between an
employer and its employees. For a promise to be enforceable, it must be
included in the CBA. If a promise is not included in the CBA, it is not
enforceable, even if it is reflected in the Minutes of the negotiation.
Labor Arbiter's Ruling
The Labor Arbiter dismissed the SMTFM's complaint, finding that there was
no agreement between the parties to implement the wage orders on an
across-the-board basis. The NLRC affirmed the Labor Arbiter's decision

ISSUE

Whether Top Form's refusal to implement the wage orders on an

across-the-board basis violated the collective bargaining
agreement (CBA) and the Labor Code.
whether or not the employees of the respondents are entitled to
an across-the-board wage increase pursuant to Wage Orders
Nos. 01 and 02,

DECISION In summary, the Supreme Court ruled in favor of Top Form, affirming the
NLRC's decision that the company did not commit unfair labor practice in refusing to
provide across-the-board wage increases as mandated by the wage orders.
The National Labor Relations Commission (NLRC) found in favor of
Top Form, dismissing the complaint filed by SMTFM-UWP. SMT FMUWP appealed the
NLRC's decision to the Supreme Court. The
decision of the labor arbiter and NLRC on collective bargaining in the
Samahan case was that Top Form did not commit unfair labor
practice by refusing to grant across-the-board increases in
implementing Wage Orders Nos. 1 and 2.

The labor arbiter and NLRC held that the wage orders themselves did
not require employers to grant across-the-board increases, and that
Top Form was justified in refusing to grant increases to certain
employees in order to prevent wage distortion. The labor arbiter and
NLRC also found that Top Form did not refuse to bargain in good faith
with SMTFM-UWP.For unions, the decision means that they need to be
more careful in negotiating CBAs. Unions need to make sure that all of
their promises are included in the CBA, otherwise they will not be
enforceable.

13. Manila Electronic Co vs Secretary of Labor GR 127598

G.R. No. 127598 February 22, 2000

MANILA ELECTRIC COMPANY, petitioner,

vs.
Hon. SECRETARY OF LABOR LEONARDO QUISUMBING and MERALCO
EMPLOYEES and WORKERS ASSOCIATION (MEWA), respondent.

RESOLUTION

YNARES-SANTIAGO, J.:

In the Decision promulgated on January 27, 1999, the Court disposed of the case as
follows:

WHEREFORE, the petition is granted and the orders of public respondent Secretary of
Labor dated August 19, 1996 and December 28, 1996 are set aside to the extent set
forth above. The parties are directed to execute a Collective Bargaining Agreement
incorporating the terms and conditions contained in the unaffected portions of the
Secretary of Labor's orders of August 19, 1996 and December 28, 1996, and the
modifications set forth above. The retirement fund issue is remanded to the Secretary of
Labor for reception of evidence and determination of the legal personality of the
MERALCO retirement fund.1

The modifications of the public respondent's resolutions include the following:

January 27, 1999 decision Secretary's resolution

Wages - P1,900.00 for 1995-96 P2,200.00
X'mas bonus - modified to one month 2 months
Retirees - remanded to the Secretary granted
Loan to coops - denied granted
GHSIP, HMP and
Housing loans - granted up to P60,000.00 granted
Signing bonus - denied granted
Union leave - 40 days (typo error) 30 days
High voltage/pole - not apply to those who are
not exposed to the risk members of a team
Collectors - no need for cash bond, no
need to reduce quota and MAPL
CBU - exclude confidential employees include
Union security - maintenance of membership closed shop
Contracting out - no need to consult union consult first
All benefits - existing terms and conditions all terms
Retroactivity - Dec. 28, 1996-Dec. 27, 199(9) from Dec. 1, 1995
Dissatisfied with the Decision, some alleged members of private respondent union
(Union for brevity) filed a motion for intervention and a motion for reconsideration of the
said Decision. A separate intervention was likewise made by the supervisor's union
(FLAMES2) of petitioner corporation alleging that it has bona fide legal interest in the
outcome of the case.3 The Court required the "proper parties" to file a comment to the
three motions for reconsideration but the Solicitor-General asked that he be excused
from filing the comment because the "petition filed in the instant case was granted" by
the Court.4 Consequently, petitioner filed its own consolidated comment. An "Appeal
Seeking Immediate Reconsideration" was also filed by the alleged newly elected
president of the Union.5 Other subsequent pleadings were filed by the parties and
intervenors.

The issues raised in the motions for reconsideration had already been passed upon by
the Court in the January 27, 1999 decision. No new arguments were presented for
consideration of the Court. Nonetheless, certain matters will be considered herein,
particularly those involving the amount of wages and the retroactivity of the Collective
Bargaining Agreement (CBA) arbitral awards.
Petitioner warns that if the wage increase of P2,200.00 per month as ordered by the
Secretary is allowed, it would simply pass the cost covering such increase to the
consumers through an increase in the rate of electricity. This is a non sequitur. The
Court cannot be threatened with such a misleading argument. An increase in the prices
of electric current needs the approval of the appropriate regulatory government agency
and does not automatically result from a mere increase in the wages of petitioner's
employees. Besides, this argument presupposes that petitioner is capable of meeting a
wage increase. The All Asia Capital report upon which the Union relies to support its
position regarding the wage issue cannot be an accurate basis and conclusive
determinant of the rate of wage increase. Section 45 of Rule 130 Rules of Evidence
provides:

Commercial lists and the like. — Evidence of statements of matters of interest to

persons engaged in an occupation contained in a list, register, periodical, or other
published compilation is admissible as tending to prove the truth of any relevant matter
so stated if that compilation is published for use by persons engaged in that occupation
and is generally used and relied upon by them therein.

Under the afore-quoted rule, statement of matters contained in a periodical, may be

admitted only "if that compilation is published for use by persons engaged in that
occupation and is generally used and relied upon by them therein." As correctly held in
our Decision dated January 27, 1999, the cited report is a mere newspaper account and
not even a commercial list. At most, it is but an analysis or opinion which carries no
persuasive weight for purposes of this case as no sufficient figures to support it were
presented. Neither did anybody testify to its accuracy. It cannot be said that
businessmen generally rely on news items such as this in their occupation. Besides, no
evidence was presented that the publication was regularly prepared by a person in
touch with the market and that it is generally regarded as trustworthy and reliable.
Absent extrinsic proof of their accuracy, these reports are not admissible.6 In the same
manner, newspapers containing stock quotations are not admissible in evidence when
the source of the reports is available.7 With more reason, mere analyses or projections
of such reports cannot be admitted. In particular, the source of the report in this case
can be easily made available considering that the same is necessary for compliance
with certain governmental requirements.

Nonetheless, by petitioner's own allegations, its actual total net income for 1996 was
P5.1 billion.8 An estimate by the All Asia financial analyst stated that petitioner's net
operating income for the same year was about P5.7 billion, a figure which the Union
relies on to support its claim. Assuming without admitting the truth thereof, the figure is
higher than the P4.171 billion allegedly suggested by petitioner as its projected net
operating income. The P5.7 billion which was the Secretary's basis for granting the
P2,200.00 is higher than the actual net income of P5.1 billion admitted by petitioner. It
would be proper then to increase this Court's award of P1,900.00 to P2,000.00 for the
two years of the CBA award. For 1992, the agreed CBA wage increase for rank-and-file
was P1,400.00 and was reduced to P1,350.00; for 1993; further reduced to P1,150.00
for 1994. For supervisory employees, the agreed wage increase for the years 1992-
1994 are P1,742.50, P1,682.50 and P1,442.50, respectively. Based on the foregoing
figures, the P2,000.00 increase for the two-year period awarded to the rank-and-file is
much higher than the highest increase granted to supervisory employees.9 As
mentioned in the January 27, 1999 Decision, the Court does "not seek to enumerate in
this decision the factors that should affect wage determination" because collective
bargaining disputes particularly those affecting the national interest and public service
"requires due consideration and proper balancing of the interests of the parties to the
dispute and of those who might be affected by the dispute."10 The Court takes judicial
notice that the new amounts granted herein are significantly higher than the weighted
average salary currently enjoyed by other rank-and-file employees within the
community. It should be noted that the relations between labor and capital is impressed
with public interest which must yield to the common good.11 Neither party should act
oppressively against the other or impair the interest or convenience of the public.12
Besides, matters of salary increases are part of management prerogative.13

On the retroactivity of the CBA arbitral award, it is well to recall that this petition had its
origin in the renegotiation of the parties' 1992-1997 CBA insofar as the last two-year
period thereof is concerned. When the Secretary of Labor assumed jurisdiction and
granted the arbitral awards, there was no question that these arbitral awards were to be
given retroactive effect. However, the parties dispute the reckoning period when
retroaction shall commence. Petitioner claims that the award should retroact only from
such time that the Secretary of Labor rendered the award, invoking the 1995 decision in
Pier 8 case14 where the Court, citing Union of Filipino Employees v. NLRC,15 said:

The assailed resolution which incorporated the CBA to be signed by the parties was
promulgated on June 5, 1989, the expiry date of the past CBA. Based on the provision
of Section 253-A, its retroactivity should be agreed upon by the parties. But since no
agreement to that effect was made, public respondent did not abuse its discretion in
giving the said CBA a prospective effect. The action of the public respondent is within
the ambit of its authority vested by existing law.
On the other hand, the Union argues that the award should retroact to such time
granted by the Secretary, citing the 1993 decision of St. Luke's.16

Finally, the effectivity of the Order of January 28, 1991, must retroact to the date of the
expiration of the previous CBA, contrary to the position of petitioner. Under the
circumstances of the case, Article 253-A cannot be properly applied to herein case. As
correctly stated by public respondent in his assailed Order of April 12, 1991 dismissing
petitioner's Motion for Reconsideration —

Anent the alleged lack of basis for the retroactivity provisions awarded; we would stress
that the provision of law invoked by the Hospital, Article 253-A of the Labor Code,
speaks of agreements by and between the parties, and not arbitral awards . . .

Therefore, in the absence of a specific provision of law prohibiting retroactivity of the

effectivity of arbitral awards issued by the Secretary of Labor pursuant to Article 263(g)
of the Labor Code, such as herein involved, public respondent is deemed vested with
plenary and discretionary powers to determine the effectivity thereof.

In the 1997 case of Mindanao Terminal,17 the Court applied the St. Luke's doctrine and
ruled that:

In St. Luke's Medical Center v. Torres, a deadlock also developed during the CBA
negotiations between management and the union. The Secretary of Labor assumed
jurisdiction and ordered the retroaction of the CBA to the date of expiration of the
previous CBA. As in this case, it was alleged that the Secretary of Labor gravely abused
its discretion in making his award retroactive. In dismissing this contention this Court
held:

Therefore, in the absence of a specific provision of law prohibiting retroactive of the

effectivity of arbitral awards issued by the Secretary of Labor pursuant to Article 263(g)
of the Labor Code, such as herein involved, public respondent is deemed vested with
plenary and discretionary powers to determine the effectivity thereof.

The Court in the January 27, 1999 Decision, stated that the CBA shall be "effective for a
period of 2 years counted from December 28, 1996 up to December 27, 1999."
Parenthetically, this actually covers a three-year period. Labor laws are silent as to
when an arbitral award in a labor dispute where the Secretary had assumed jurisdiction
by virtue of Article 263 (g) of the Labor Code shall retroact. In general, a CBA negotiated
within six months after the expiration of the existing CBA retroacts to the day
immediately following such date and if agreed thereafter, the effectivity depends on the
agreement of the parties.18 On the other hand, the law is silent as to the retroactivity of
a CBA arbitral award or that granted not by virtue of the mutual agreement of the parties
but by intervention of the government. Despite the silence of the law, the Court rules
herein that CBA arbitral awards granted after six months from the expiration of the last
CBA shall retroact to such time agreed upon by both employer and the employees or
their union. Absent such an agreement as to retroactivity, the award shall retroact to the
first day after the six-month period following the expiration of the last day of the CBA
should there be one. In the absence of a CBA, the Secretary's determination of the date
of retroactivity as part of his discretionary powers over arbitral awards shall control.

It is true that an arbitral award cannot per se be categorized as an agreement voluntarily

entered into by the parties because it requires the interference and imposing power of
the State thru the Secretary of Labor when he assumes jurisdiction. However, the
arbitral award can be considered as an approximation of a collective bargaining
agreement which would otherwise have been entered into by the parties.19 The terms
or periods set forth in Article 253-A pertains explicitly to a CBA. But there is nothing that
would prevent its application by analogy to an arbitral award by the Secretary
considering the absence of an applicable law. Under Article 253-A: "(I)f any such
agreement is entered into beyond six months, the parties shall agree on the duration of
retroactivity thereof." In other words, the law contemplates retroactivity whether the
agreement be entered into before or after the said six-month period. The agreement of
the parties need not be categorically stated for their acts may be considered in
determining the duration of retroactivity. In this connection, the Court considers the letter
of petitioner's Chairman of the Board and its President addressed to their stockholders,
which states that the CBA "for the rank-and-file employees covering the period
December 1, 1995 to November 30, 1997 is still with the Supreme Court,"20 as
indicative of petitioner's recognition that the CBA award covers the said period. Earlier,
petitioner's negotiating panel transmitted to the Union a copy of its proposed CBA
covering the same period inclusive.21 In addition, petitioner does not dispute the
allegation that in the past CBA arbitral awards, the Secretary granted retroactivity
commencing from the period immediately following the last day of the expired CBA.
Thus, by petitioner's own actions, the Court sees no reason to retroact the subject CBA
awards to a different date. The period is herein set at two (2) years from December 1,
1995 to November 30, 1997.

On the allegation concerning the grant of loan to a cooperative, there is no merit in the
union's claim that it is no different from housing loans granted by the employer. The
award of loans for housing is justified because it pertains to a basic necessity of life. It is
part of a privilege recognized by the employer and allowed by law. In contrast, providing
seed money for the establishment of the employee's cooperative is a matter in which
the employer has no business interest or legal obligation. Courts should not be utilized
as a tool to compel any person to grant loans to another nor to force parties to
undertake an obligation without justification. On the contrary, it is the government that
has the obligation to render financial assistance to cooperatives and the Cooperative
Code does not make it an obligation of the employer or any private individual.22

Anent the 40-day union leave, the Court finds that the same is a typographical error. In
order to avoid any confusion, it is herein declared that the union leave is only thirty (30)
days as granted by the Secretary of Labor and affirmed in the Decision of this Court.

The added requirement of consultation imposed by the Secretary in cases of contracting

out for six (6) months or more has been rejected by the Court. Suffice it to say that the
employer is allowed to contract out services for six months or more. However, a line
must be drawn between management prerogatives regarding business operations per
se and those which affect the rights of employees, and in treating the latter, the
employer should see to it that its employees are at least properly informed of its
decision or modes of action in order to attain a harmonious labor-management
relationship and enlighten the workers concerning their rights.23 Hiring of workers is
within the employer's inherent freedom to regulate and is a valid exercise of its
management prerogative subject only to special laws and agreements on the matter
and the fair standards of justice.24 The management cannot be denied the faculty of
promoting efficiency and attaining economy by a study of what units are essential for its
operation. It has the ultimate determination of whether services should be performed by
its personnel or contracted to outside agencies. While there should be mutual
consultation, eventually deference is to be paid to what management decides.25
Contracting out of services is an exercise of business judgment or management
prerogative.26 Absent proof that management acted in a malicious or arbitrary manner,
the Court will not interfere with the exercise of judgment by an employer.27 As
mentioned in the January 27, 1999 Decision, the law already sufficiently regulates this
matter.28 Jurisprudence also provides adequate limitations, such that the employer
must be motivated by good faith and the contracting out should not be resorted to
circumvent the law or must not have been the result of malicious or arbitrary actions.29
These are matters that may be categorically determined only when an actual suit on the
matter arises.

WHEREFORE, the motion for reconsideration is PARTIALLY GRANTED and the

assailed Decision is MODIFIED as follows: (1) the arbitral award shall retroact from
December 1, 1995 to November 30, 1997; and (2) the award of wage is increased from
the original amount of One Thousand Nine Hundred Pesos (P1,900.00) to Two
Thousand Pesos (P2,000.00) for the years 1995 and 1996. This Resolution is subject to
the monetary advances granted by petitioner to its rank-and-file employees during the
pendency of this case assuming such advances had actually been distributed to them.
The assailed Decision is AFFIRMED in all other

SO ORDERED

Decision:
In the decision dated January 27, 1999, the Court granted the petition and set aside the
orders of the Secretary of Labor dated August 19, 1996, and December 28, 1996. The
parties were directed to execute a Collective Bargaining Agreement incorporating the
terms and

CBA Issue:
The main issue in the case was the Collective Bargaining Agreement (CBA) between
MERALCO and its employees represented by MEWA. The dispute arose during the
renegotiation of the parties' 1992-1997 CBA, specifically regarding the last two years of
its duration.

14. New Pacific Timber And Supply Co. Vs. NLRC GR 124224

NEW PACIFIC TIMBER & SUPPLY COMPANY, CO., INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, MUSIB M. BUAT, LEON G.
GONZAGA, JR., ET AL., NATIONAL FEDERATION OF LABOR, MARIANO AKILIT and
350 OTHERS, respondents.

KAPUNAN, J.:

May the term of a Collective Bargaining Agreement (CBA) as to its economic provisions
be extended beyond the term expressly stipulated therein, and, in the absence of a new
CBA, even beyond the three-year period provided by law? Are employees hired after
the stipulated term of a CBA entitled to the benefits provided thereunder?
These are the issues at the heart of the instant petition for certiorari with prayer for the
issuance of preliminary injunction and/or temporary restraining order filed by petitioner
New Pacific Timber & Supply Company, Incorporated against the National Labor
Relations Commission (NLRC), et. al., and the National Federation of Labor, et. al.

The antecedents facts, as found by the NLRC, are as follows:

The National Federation of Labor (NFL, for brevity) was certified as the sole and
exclusive bargaining representative of all the regular rank-and-file employees of New
Pacific Timber & Supply Co., Inc. (hereinafter referred to as petitioner Company). 1 As
such, NFL started to negotiate for better terms and conditions of employment for the
employees in the bargaining unit which it represented. However, the same was
allegedly met with stiff resistance by petitioner Company, so that the former was
prompted to file a complaint for unfair labor practice (ULP) against the latter on the
ground of refusal to bargain collectively. 2

On March 31, 1987, then Executive Labor Arbiter Hakim S. Abdulwahid issued an order
declaring (a) herein petitioner Company guilty of ULP; and (b) the CBA proposals
submitted by the NFL as the CBA between the regular rank-and-file employees in the
bargaining unit and petitioner Company. 3

Petitioner Company appealed the above order to the NLRC. On November 15, 1989,
the NLRC rendered a decision dismissing the appeal for lack of merit. A motion for
reconsideration thereof was, likewise, denied in a Resolution, dated November 12,
1990. 4

Unsatisfied, petitioner Company filed a petition for certiorari with this Court. But the
Court dismissed said petition in a Resolution, dated January 21, 1991. 5

Thereafter, the records of the case were remanded to the arbitration branch of origin of
the execution of Labor Arbiter Abdulwahid's Order, dated March 31, 1987, granting
monetary benefits consisting of wage increases, housing allowances, bonuses, etc. to
the regular rank-and-file employees. Following a series of conferences to thresh out the
details of computation, Labor Arbiter Reynaldo S. Villena issued an Order, dated
October 18, 1993, directing petitioner Company to pay the 142 employees entitled to
the aforesaid benefits the respective amounts due them under the CBA. Petitioner
Company complied; and the corresponding quitclaims were executed. The case was
considered closed following NFL's manifestation that it will no longer appeal the October
18, 1993 Order of Labor Arbiter Villena. 6

However, notwithstanding such manifestation, a "Petition for Relief" was filed in behalf
of 186 of the private respondents "Mariano J. Akilit and 350 others" on May 12, 1994. In
their petition, they claimed that they were wrongfully excluded from enjoying the benefits
under the CBA since the agreement with NFL and petitioner Company limited the CBA's
implementation to only the 142 rank-and-file employees enumerated. They claimed that
NFL's misrepresentations had precluded them from appealing their exclusion. 7

Treating the petition for relief as an appeal, the NLRC entertained the same. On August
4, 1994, said commission issued a resolution 8 declaring that the 186 excluded
employees "form part and parcel of the then existing rank-and-file bargaining unit" and
were, therefore, entitled to the benefits under the CBA. The NLRC held, thus:

WHEREFORE, the appeal is hereby granted and the Order of the Labor arbiter dated
October 18, 1993 is hereby. Set Aside and Vacated. In lieu hereof, a new Order is
hereby issued directing respondent New Pacific Timber & Supply Co., Inc. to pay all its
regular rank-and-file workers their wage differentials and other benefits arising from the
decreed CBA as explained above, within ten (10) days from receipt of this order.

SO ORDERED. 9

Petitioner Company filed a motion for reconsideration of the aforequoted resolution.

Meanwhile, four separate groups of the private respondents, including the original 186
who had filed the "Petition for Relief" filed individual money claims, docketed as NLRC
Cases Nos. M-001991-94 to M-001994-94, before the Arbitration Branch of the NLRC,
Cagayan de Oro City. However, Labor Arbiter Villena dismissed these cases in Orders,
dated March 11, 1994; April 13, 1994; March 9, 1994; and, May 10, 1994. The
employees appealed the respective dismissals of their complainants to the NLRC. The
latter consolidated these appeals with the aforementioned motion for reconsideration
filed by petitioner Company.
On February 29, 1996, the NLRC issued a resolution, the dispositive portions of which
reads as follows:

WHEREFORE, the instant petition for reconsideration of respondent is DENIED for lack
of merit and the Resolution of the Commission dated August 4, 1994 Sustained. The
separate orders of the Labor Arbiter dated March 11, 1994, April 13, 1994, March 9,
1994 and May 10, 1994, respectively, in NLRC Cases Nos. M-001991-94 to M-001994-
94 are Set Aside and Vacated for lack of legal bases.

Conformably, respondent New Pacific Timber and Supply Co., Inc., is hereby directed to
pay individual complainants their CBA benefits in the aggregate amount of
P13,559,510.37, the detailed computation thereof is contained in Annex "A" which forms
an integral part of this resolution, plus ten (10%) percent thereof as Attorney's fees.

SO ORDERED. 10

Hence, the instant petition wherein petitioner Company raises the following issues:

THE PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION

IN ALLOWING THE "PETITION FOR RELIEF" TO PROSPER.

II

THE PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION

IN RULING THAT PRIVATE RESPONDENTS MARIANO AKILIT AND 350 OTHERS
ARE ENTITLED TO BENEFITS UNDER THE COLLECTIVE BARGAINING
AGREEMENT IN SPITE OF THE FACT THAT THEY WERE NOT EMPLOYED BY THE
PETITIONER MUCH LESS WERE THEY MEMBERS OF THE BARGAINING UNIT
DURING THE TERM OF THE CBA.

III
PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN
MAKING FACTUAL FINDINGS WITHOUT BASIS.

IV

THE DISPOSITIVE PORTIONS OF THE ASSAILED RESOLUTIONS ARE DEFECTIVE

AND/OR REVEAL THE GRAVE ABUSE OF DISCRETION COMMITTED BY PUBLIC
RESPONDENT. 11

Petitioner company contends that a "Petition of Relief" is not the proper mode of
seeking a review of a decision rendered by the arbitration branch of the NLRC. 12
According to the petitioner, nowhere in the Labor Code or in the NLRC Rules of
Procedure is there such a pleading. Rather, the remedy of a party aggrieved by an
unfavorable of the labor arbiter is to appeal said judgment to the NLRC. 13

Petitioners asseverates that even assuming that the NLRC correctly treated the petition
for relief as an appeal, still, it should not have allowed the same to prosper, because the
petition was filed several months after the ten-day reglementary period for filing an
appeal had expired; and therefore, it failed to comply with the requirements of an appeal
under the Labor Code and the NLRC Rules of Procedure.

Petitioner Company further contends that in filing separate complaints and/or money
claims at the arbitration level in spite of their pending petition for relief and in spite of the
final order, dated October 18, 1993, in NLRC Case No. RAB-IX-0334-82, the private
respondents were in fact forum-shopping, an act which is proscribed as trifling with the
courts and abusing their practices.

Anent the second issue, petitioners argues that the private respondents are not entitled
to the benefits under the CBA because employees hired after the term of a CBA are not
parties to the agreement, and therefore, may not claim benefits thereunder, even if they
subsequently become members of the bargaining unit.

As for the term of the CBA, petitioner maintains that Article 253 of the Labor Code refers
to the continuation in full force and effect of the previous CBA's terms and conditions.
By necessity, it could not possibly refers to terms and conditions which, as expressly
stipulated, ceased to have force and effect.14

According to petitioner, the provision on wage increase in the 1981 to 1984 CBA
between petitioner Company and NFL provided for yearly wage increases. Logically,
these provisions ended in the years 1984 — the last year that the economic provisions
of the CBA were, to contract and law, effective. Petitioner claims that there is no
contractual basis for the grant of CBA benefits such as wage increases in 1985 and
subsequent years, since the CBA stipulated only the increases for the years 1981 to
1984.

Moreover, petitioner alleges that it was through no fault of theirs that no new CBA was
entered pending appeal of the decision in NLRC Case No. RAB-IX-0334-82.

Finally, petitioner Company claims that it was never given the opportunity to submit a
counter-computation of the benefits supposedly due the private respondents. Instead,
the NLRC allegedly relied on the self-serving computations of private respondents.

Petitioner's contentions as untenable.

We find no grave abuse of discretion on the part of the NLRC, when it entertained the
petition for relief filed by the private respondents and treated it as an appeal, even if it
was filed beyond the reglementary period for filing an appeal. Ordinarily, once a
judgment has become final and executory, it can no longer be disturbed, altered or
modified. However, a careful scrutiny of the facts and circumstances of the instant case
warrants liberality in the application of technical rules and procedure. It would be a
greater injustice to deprive the concerned employees of the monetary benefits rightly
due them because of a circumstance over which they had no control. As stated above,
private respondents, in their petition for relief, claimed that they were wrongfully
excluded from the list of those entitled to the CBA benefits by their union, NFL, without
their knowledge; and, because they were under the impression that they were ably
represented, they were not able to appeal their case on time.

The Supreme Court has allowed appeals from decisions of the labor arbiter to the
NLRC, even if filed beyond the reglementary period, in the interest of justice. 15
Moreover, under Article 218 (c) of the Labor Code, the NLRC may, in the exercise of its
appellate powers, "correct, amend or waive any error, defect or irregularity whether in
the substance or in form." Further, Article 221 of the same provides that "In any
proceeding before the Commission or any of the Labor Arbiters, the rules of evidence
prevailing in courts of law or equity shall not be controlling and it is the spirit and
intention of this Code that the Commission and its members and the Labor Arbiter shall
use every and all reasonable means to ascertain the facts in each case speedily and
objectively and without regard to technicalities of law or procedure, all in the interest of
due process. . . . 16

Anent the issue of whether or not the term of an existing CB, particularly as to its
economic provisions, can be extended beyond the period stipulated therein, and even
beyond the three-year period prescribed by law, in the absence of a new agreement,
Article 253 of the Labor Code explicitly provides:

Art. 253. Duty to bargain collectively when there exists a collective bargaining
agreement. — When there is a collective bargaining agreement, the duty to bargain
collectively shall also mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve a written notice to
terminate or modify the agreement at least sixty (60) days prior to its expiration date. It
shall be the duty of both parties to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement during the 60-day period
and/or until a new agreement is reached by the parties. (Emphasis supplied.)

It is clear from the above provision of law that until a new Collective Bargaining
Agreement has been executed by and between the parties, they are duty-bound to keep
the status quo and to continue in full force and effect the terms and conditions of the
existing agreement. The law does not provide for any exception nor qualification as to
which of the economic provisions of the existing agreement are to retain force and
effect, therefore, it must be understood as encompassing all the terms and conditions in
the said agreement.

In the case at bar, no new agreement was entered into by and between petitioner
Company and NFL pending appeal of the decision in NLRC Case No. RAB-IX-0334-82;
nor were any of the economic provisions and/or terms and conditions pertaining to
monetary benefits in the existing agreement modified or altered. Therefore, the existing
CBA in its entirety, continues to have legal effect.

In a recent case, the Court had occasion to rule that Article 253 and 253-A 17 mandate
the parties to keep the status quo and to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day period prior to the expiration of
the old CBA and/or until a new agreement is reached by the parties. Consequently, the
automatic renewal clause provided for by the law, which is deemed incorporated in all
CBA's, provides the reason why the new CBA can only be given a prospective effect. 18

In the case of Lopez Sugar Corporation vs. Federation of Free Workers, et. al, 19 this
Court reiterated the rule although a CBA has expired, it continues to have legal effects
as between the parties until a new CBA has been entered into. It is the duty of both
parties to the CBA to keep the status quo, and to continue in full force and effect the
terms and conditions of the existing agreement during the 60-day period and/or until a
new agreement is reached by the parties. 20

To rule otherwise, i.e., that the economic provisions of the existing CBA in the instant
case ceased to have force and effect in the year 1984 would be to create a gap during
which no agreement would govern, from the time the old contract expired to the time a
new agreement shall have been entered into. For if, as contended by the petitioner, the
economic provisions of the existing CBA were to have no legal effect, what agreement
as to wage increases and other monetary benefits would govern at all? None, it would
seem, if we are to follow the logic of petitioner Company. Consequently, the employees
from the year 1985 onwards would be deprived of a substantial amount of monetary
benefits which they could have enjoyed had the terms and conditions of the CBA
remained in force and effect. Such a situation runs contrary to the very intent and
purpose of Article 253 and 253-A of the Labor Code which is to curb labor unrest and to
promote industrial peace, as can be gleaned from the discussion of the legislators
leading to the passage of the said laws, thus:

HON. CHAIRMAN HERRERA: Pag nag-survey tayo sa mga unyon, ganoon ang
mangyayari. And I think our responsibility here is to create a legal framework to promote
industrial peace and to develop responsible and fair labor movement.

HON. CHAIRMAN VELOSO: In other words, the longer the period of the effectivity.

xxx xxx xxx

HON. CHAIRMAN VELOSO: (continuing) . . . . in other words, the longer the period of
effectivity of the CBA, the better for industrial peace.
xxx xxx x x x 21

Having established that the CBA between petitioner Company and NFL remained in full
force and effect even beyond the stipulated term, in the absence of a new agreement;
and, therefore, that the economic provisions such as wage increases continued to have
legal effect, we are now faced with the question of who are entitled to the benefits
provided thereunder.

Petitioner Company insists that the rank-and-file employees hired after the term of the
CBA inspite of their subsequent membership in the bargaining unit, are not parties to
the agreement, and certainly may not claim the benefits thereunder.

We do not agree. In a long line of cases, this Court has held that when a collective
bargaining contract is entered into by the union representing the employees and the
employer, even the non-member employees are entitled to the benefits of the contract.
To accord its benefits only to members of the union without any valid reason would
constitute undue discrimination against nonmembers. 22 It is even conceded, that a
laborer can claim benefits from the CBA entered into between the company and the
union of which he is a member at the time of the conclusion of the agreement, after he
has resigned from the said union. 23

In the same vein, the benefits under the CBA in the instant case should be extended to
those employees who only became such after the year 1984. To exclude them would
constitute undue discrimination and deprive them of monetary benefits they would
otherwise be entitled to under a new collective bargaining contract to which they would
have been parties. Since in this particular case, no new agreement had been entered
into after the CBA's stipulated term, it is only fair and just that the employees hired
thereafter be included in the existing CBA. This is in consonance with our ruling that the
terms and conditions of a collective bargaining agreement continue to have force and
effect even beyond the stipulated term when no new agreement is executed by and
between the parties to avoid or prevent the situation where no collective bargaining
agreement at all would govern between the employer company and its employees.

Anent the other issues raised by petitioner Company, the Court finds that these pertain
to questions of fact that have already been passed upon by the NLRC. It is axiomatic
that, the factual findings of the National Labor Relations Commissions, which have
acquired expertise because its jurisdiction is confined to specific matters, are accorded
respect and finality by the Supreme Court, when these are supported by substantial
evidence. "A perusal of the assailed resolution reveals that the same was reached on
the basis of the required quantum of evidence.

WHEREFORE, in view of the foregoing, the instant petition for certiorari is hereby
DISMISSED for lack of merit

SO ORDERED.

ISSUE: The main Collective Bargaining Agreement (CBA) issue in this case involved
the extension of the economic provisions of the CBA beyond its stipulated term and the
entitlement of employees hired after the term of the CBA to the benefits provided
therein.

FINAL DECISION:
The court dismissed the petition for certiorari filed by the petitioner Company, affirming
the NLRC's decision.

15. Diatagon Labor Federation vs Secretary Labor, GR L-44493-94

DIATAGON LABOR FEDERATION LOCAL 110 OF THE ULGWP, petitioner,

vs.
HON. BLAS F. OPLE, Secretary of Labor, CARMELO C. NORIEL, Director of Labor
Relations,
MINDANAO ASSOCIATION OF TRADE UNIONS (MATU) LIANGA BAY LOGGING CO.,
INC.
and GEORGIA PACIFIC INTERNATIONAL CORPORATION, respondents.
G.R. No. L-44493 & L-44494 December 3, 1980
FACTS
The Diatagon Labor Federation Local 110 of ULGWP (United Lumber and General
Workers of
the Philippines) had a collective bargaining agreement with the Lianga Bay logging Co.,
Inc.
which was due to expire on March 31, 1975.
On February 3, 1975, before the expiration of the CBA, a rival union which is the
Mindanao
Association of Trade Unions, filed with the Bureau of Labor Relations a petition for the
holding of
a certification election at Lianga Bay Logging Co., Inc., BLR Case No. 0399. The union
assumed that Lianga Bay Logging Co., Inc. had approximately 900 employees.
On March 17, 1975, before that petition could be acted upon, the Diatagon Labor
Federation
was able to negotiate with Georgia Pacific International Corporation a CBA for a term of
three
years expiring on March 31, 1978. That CBA was certified by the Bureau of Labor
Relations on
July 10, 1975.
Also, It should be stressed that the said CBA included 236 employees working at the
veneer
plant and electrical department of Georgia Pacific International Corporation in Lianga.
Those
236 employees were formerly employees of Lianga Bay Logging Co., Inc. After July,
1974, they
were transferred to Georgia Pacific International Corporation and became employees of
the
latter
The transfer of the 236 employees is not clearly brought out in the pleadings of the
parties. The
obscuration of that fact is one reason for the delay in the disposition of this case
because if the
consequences of that transfer are not taken into account, the case remains unclear and
controversial.
Another fact that should be tackled is that, in spite of the transfer, the 236 employees
continued
to use in 1975 the pay envelopes and Identification cards of their former employer,
Lianga Bay
Logging Co., Inc. That confusing circumstance spawned the controversy in this case
because
the Mindanao Association of Trade Unions and the Director of Labor Relations used that
circumstance to support their conclusion that the 236 employees should still be
regarded as
employees of Lianga Bay Logging Co., Inc. and not of Georgia Pacific International
Corporation
or that the two companies should be regarded as only one bargaining unit.
On May 14, 1975 the pursuant to the order of the Med-Arbiter in BLR Case No. 0399.
On July
20, 1975 a certification election was held in the premises of Lianga Bay Logging Co.,
Inc. at
Diatagon. The Diatagon Labor Federation won the election with 290 votes as against
227 votes
for the Mindanao Association of Trade Unions.
The Mindanao Association of Trade Unions wanted the aforementioned 236 employees
of
Georgia Pacific International Corporation to vote and take part in the election because
they
were using the pay envelopes and Identification cards of Lianga Bay Logging Co., Inc.
but they
were not allowed to vote because they were not included in the payrolls of Lianga
Logging Co.,
Inc.
On July 23, 1975 the Mindanao Association of Trade Unions filed an election protest on
the
ground, inter alia, that around four hundred workers were disenfranchised because of
the
inaccuracy of the official voting lists. Because the Mindanao Association of Trade
Unions was
confronted by the undeniable fact that the said 236 employees were already included in
the
CBA entered into between Georgia Pacific international Corporation and Diatagon Labor
Federation on March 17, 1975.
The Mindanao Association of Trade Unions resorted to the expedient of filing on August
1, 1975
with the Bureau of Labor Relations a petition for the decertification of the
aforementioned CBA
BLR Case No. 098.
That petition was dismissed by the Med-Arbiter in his order of February 4, 1976 on The
ground
that it was a reiteration of the election protest of the same union in BIR Case No. 0399.
On September 8, 1975, the Med-Arbiter dismissed the election protest of the Mindanao
Association of Trade Unions and certified the Diatagon Labor Federation as the
exclusive
bargaining agent of the employees of Lianga Bay Logging Co., Inc.
From that order from the Med-Arbiter, the Mindanao Association of Trade Unions
appealed on
September 15, 1975 to the Director of Labor Relations. Its appeal was based on the fact
that the
aforementioned 236 employees were not allowed to vote at the certification election
since the
Med-Arbiter regarded them as employees of Georgia Pacific International Corporation.
The Mindanao Association of Trade Unions adopted another remedy in its unrelenting
effort to
attain its objective of becoming the collective bargaining agent of the workers of the two
companies alleged to have a common management and represented by the said
lawyers.
It filed with the Bureau of Labor Relations on October 10, 1975 a petition for a
certification
election in Georgia Pacific International Corporation (its prior petition was for the
decertification
of the listing CBA). It alleged that there had not been any certification election in that
corporation
(BLR Case No. 2033).
That petition was dismissed by the Med-Arbiter in his order of December 22, 1975 but,
upon
appeal, the Director of Labor Relations called the attention of the parties to his order in
BLR
Case No. 0399. In that petition, the Mindanao Association of Trade Unions assumed
that the
236 employees were employees of Georgia Pacific International Corporation.
On October 29, 1915, the Mindanao Association of Trade Unions scored a notable
victory. The
Director of Labor Relations issued on that date in BLR Case No. 0399 an order
reversing the
order of the Med-Arbiter and sustaining the appeal of the Mindanao Association of
Trade
Unions. The Director held that the aforementioned 236 employees should be allowed to
vote in
the certification election at Lianga Bay Logging Co., Inc. because they used the
company's pay
envelopes and Identification cards.
In addition, the Director ignored the fact that those 236 employees were included in the
payrolls
of Georgia Pacific International Corporation and were already covered by the existing
CBA. The
Director ordered the holding of a new certification election at Lianga Bay Logging Co.,
Inc.
wherein the 236 employees would be allowed to vote.
The Diatagon Labor Federation filed a motion for the reconsideration of that order.
Lianga Bay
Logging Co., Inc. filed a manifestation dated November 17, 1975 categorically alleging
that the
236 workers were not its employees but employees of Georgia Pacific International
Corporation.
The Director denied the motion in his order of December 17, 1975, wherein it was
intimated that
the Bureau's Labor Organization Division would thresh out, at the pre-election
conference,
whether the said 236 employees should be allowed to take part in the election.
The Diatagon labor federation appealed to the Secretary of Labor but he refused to rule
on the
appeal and, instead, referred it to the Director of Labor relations. The Director in his
order of
March 15, 1976 dismissed the appeal. He ruled that Lianga Bay Logging Co., Inc. and
Georgia
Pacific International Corporation have a common interest and that the 236 employees
should be
regarded as employees of Lianga Bay Logging Co., Inc.
The Director held that the transfer of the 236 employees to Georgia Pacific International
Corporation was designed to prejudice the Mindanao Association of Trade Unions and
to favor
Diatagon Labor Federation, and that such an eventuality should not be tolerated.
Again, the Diatagon Labor Federation appealed to the Secretary of Labor from the
Director's
order of March 15, 1976 and again the Secretary referred the appeal to the Director
who,
treating the appeal as another motion for reconsideration, denied it in his resolution of
April 29,
1976 in BLR Case No. 0399
The Diatagon Labor Federation moved for the clarification of the resolution of April 27,
1976 in
BLR Case No. 2033 wherein the Director impliedly allowed one certification election for
the
employees of the two companies. It wanted to know whether there should be two
bargaining
units and whether the 236 employees should be allowed to vote twice. Georgia Pacific
International Corporation filed its own motion for reconsideration.
The Director in his order of May 29, 1976 in BLR Cases Nos. 0399 and 2033 (a
consolidation of
the two certification cases) ruled that the two companies should be treated as one
bargaining
unit because they have a common interest and that the 236 employees should be
allowed to
vote.
From the order of May 29, 1976, the Diatagon Labor Federation appealed to the
Secretary of
Labor but the appeal was referred to the Director of Labor Relations to be regarded as a
motion
for reconsideration.
On August 18, 1976, as expected, the Director denied the appeal or motion for
reconsideration.
He held that there existed no distinction between the employees of the two companies
and.
Consequently, they should belong to only one bargaining unit.
On September 9, 1976, the Diatagon Labor Federation filed this certiorari case wherein
it
prayed for the annulment of the aforementioned orders of the Director of Labor
Relations. The
two companies were impleaded as respondents. They adopted the stand of the
petitioner.
On September 16, 1976, this Court issued a restraining order to enjoin the holding of a
new
certification election. But before that restraining order was issued, or on September 12,
1976, a
Sunday, a certification election was held among the employees of the two companies.
The Diatagon Labor Federation opposed the holding of the election. There were 944
eligible
voters. The Mindanao Association of Trade Unions obtained 456 votes. The Diatagon
Labor
Federation obtained 63 votes. Only 555 voters took part in the election.
It turned out that the election was transferred by the Director of Labor Relations to
September
15, 1976. The protest of the Diatagon Labor Federation against that election was not
acted
upon by the Director of Labor Relations in view of the pendency of this case.
ISSUES
The issue in this case, which involves a 1975 certification election, is whether two
companies
should be regarded as a single collective bargaining unit.
In addition to that, there are also some issues whether the Director of Labor Relations
gravely
abused his discretion in treating the employees of the two companies as one bargaining
unit
and, whether the Secretary of Labor gravely abused his discretion in not entertaining
the
appeals of the petitioner from the orders of the Director of Labor Relations.
DECISIONS
The director of Labor Relations acted with grave abuse of discretion in treating the two
companies as a single bargaining unit. That ruling is arbitrary and untenable because
the two

The court concluded that the Director of Labor Relations acted with grave abuse of
discretion in treating the two companies as a single bargaining unit. The ruling
emphasized that the two companies are distinct entities with separate juridical
personalities.
companies are indubitably distinct entities with separate juridical personalities. The fact
that
their businesses are related and that the 236 employees of Georgia Pacific International
Corporation were originally employees of Lianga Bay Logging Co., Inc. is not a
justification for
disregarding their separate personalities.
Hence, the 236 employees, who are now attached to Georgia Pacific International
Corporation,
should not be allowed to vote in the certification election at the Lianga Bay Logging Co.,
Inc.
They should vote at a separate certification election to determine the collective
bargaining
representative of the employees of Georgia Pacific International Corporation.
After the lapse of more than five years, the result of the 1975 certification election
should not be
implemented. A new certification election should be held at Lianga Bay Logging Co.,
Inc. but the
236 employees should not be allowed to vote in that election.
With due respect to the refusal of the Secretary of Labor (now Minister of Labor and
Employment) to entertain appeals from the orders of the Director of Labor Relations,
that norm
of conduct is based on the rule laid down by the Secretary himself in Rule V
(Certification Cases
and Intra-Union Conflicts of Book Five [Labor Relations]) of the Rules and Regulations
Implementing
the Labor Code dated February 16, 1976, which Rule V provides: SECTION 10.
Decision of the
Bureau is final and unappealable.
It is noteworthy that pursuant to that policy Presidential Decree No. 1391, which took
effect on
May 29, 1978, eliminated appeals to the Secretary of Labor from the decisions of the
National
Labor Relations commission.
Under the Rule III (Representation Issues, Interventions, Affiliations and Disaffiliations)
of the
Rules Implementing Presidential Decree No. 1391, which rules took effect on
September 15,
1978, reaffirms the above-quoted section 10 of Rule Five in the following provisions
which also
recognize the Court's power to review the orders of the Director of Labor Relations:
SEC. 8. Decision of the Bureau Director. — Final and Unappealable
SEC. 9. Petition for certiorari Prohibition etc. to the Supreme Court.
On the other hand, the petitioner and the two companies cite section 3, Rule XVIII of the
Rules
of Procedure of the Bureau of Labor Relations dated September 13, 1975 which provide
that
"decisions of the Bureau of Labor Relations may be appealed to the Secretary of Labor
whose
decisions shall be final and unappealable". Evidently, that rule was abrogated by the
1976 and
1978 implementing rules quoted above.
Wherefore, the orders of the Director of Labor Relations holding that the employees of
Lianga
Bay Logging Co., Inc. and Georgia Pacific International Corporation should be treated
as one
bargaining unit are reversed and set aside. A new certification election should be held at
Lianga
Bay Logging Co., Inc. The 236 employees of Georgia Pacific International Corporation
should
not be allowed to vote in that election. No costs.

16. Me-Shun Corp vs. Me-Shun Workers Union GR 156292

ME-SHURN CORPORATION AND SAMMY CHOU, petitioners,

vs.
ME-SHURN WORKERS UNION-FSM AND ROSALINA* CRUZ, respondents.
G.R. No. 156292 January 11, 2005
FACTS
On June 7, 1998, the regular rank and file employees of Me-Shurn Corporation
organized
Me-Shurn Workers Union-FSM, an affiliate of the February Six Movement (FSM).
Respondent
union had a pending application for registration with the Bureau of Labor Relations
(BLR)
through a letter dated June 11, 1998.
On June 17, 1998, ten days later, petitioner corporation started placing on forced leave
all the
rank and file employees who were members of the union's bargaining unit.
On June 23, 1998, respondent union filed a Petition for Certification Election with the
Med-Arbitration Unit of the Department of Labor and Employment (DOLE), Regional
Office No.
3.
Instead of filing an answer to the Petition, the corporation filed on July 27, 1998, a
comment
stating that it would temporarily lay off employees and cease operations, on account of
its
alleged inability to meet the export quota required by the Board of Investment.
While the Petition was pending, 184 union members allegedly submitted a
retraction/withdrawal
thereof on July 14, 1998. As a consequence, the med-arbiter dismissed the Petition. On
May 7,
1999, Department of Labor and Employment (DOLE) Undersecretary Rosalinda
Dimapilis-Baldoz granted the union's appeal and ordered the holding of a certification
election
among the rank and file employees of the corporation.
On August 31, 1998, Chou Fang Kuen (alias Sammy Chou, the other petitioner herein)
and
Raquel Lamayra (the Filipino administrative manager of the corporation) imposed a
precondition
for the resumption of operation and the rehiring of laid off workers. He allegedly required
the
remaining union officers to sign an Agreement containing a guarantee that upon their
return to
work, no union or labor organization would be organized. Instead, the union officers
were to
serve as mediators between labor and management. After the signing of the Agreement,
the
operations of the corporation resumed in September 1998.
On November 5, 1998, the union reorganized and elected a new set of officers.
Respondent
Rosalina Cruz was elected president. Thereafter, it filed two Complaints docketed as
NLRC
Case Nos. RAB-III-11-9586-98 and RAB-III-09-0322-99. These cases were consolidated
and
assigned to Labor Arbiter Henry Isorena for compulsory arbitration. Respondents
charged the
petitioner corporation with unfair labor practice, illegal dismissal, underpayment of
wages and
deficiency in separation pay, for which they prayed for damages and attorney's fees.
The corporation countered that because of economic reversals, it was compelled to
close and
cease its operations to prevent serious business losses; that under Article 283 of the
Labor
Code, it had the right to do so; that in August 1998, it had paid its 342 laid off employees
separation pay and benefits in the total amount of P1,682,863.88; and that by virtue of
these
payments, the cases had already become moot and academic. It also averred that its
resumption of operations in September 1998, and that some of the former employees
had
reapplied.
Petitioner corporation questioned the legality of the representation of respondent union.
Allegedly, it was not the latter, but the Me-Shurn Independent Employees' Union - - with
Christopher Malit as president - - that was recognized as the existing exclusive
bargaining agent
of the rank and file employees and as the one that had concluded a Collective
Bargaining
Agreement (CBA) with the corporation on May 19, 1999. Hence, the corporation
asserted that
Undersecretary Dimapilis-Baldoz's Decision ordering the holding of a certification
election had
become moot and academic.
Labor Arbiter Isorena dismissed the Complaints for lack of merit. He ruled that (1) actual
and
expected losses justified the closure of petitioner corporation and its dismissal of its
employees;
(2) the voluntary acceptance of separation pay by the workers precluded them from
questioning
the validity of their dismissal; and (3) the claim for separation pay lacked factual basis.
On appeal, the NLRC reversed the Decision of Labor Arbiter Isorena. Finding petitioners
guilty
of unfair labor practice, the Commission ruled that the closure of the corporation shortly
after
respondent union had been organized, as well as the dismissal of the employees, had
been
effected under false pretenses. The true reason therefore was allegedly to bar the
formation of
the union. Accordingly, the NLRC held that the illegally dismissed employees were
entitled to
back wages.
After the denial of their Motion for Reconsideration, petitioners elevated the cases to the
CA via
a Petition for Certiorari under Rule 65. They maintained that the NLRC had committed
grave
abuse of discretion and serious errors of fact and law in reversing the Decision of the
labor
arbiter and in finding that the corporation's cessation of operations in August 1998 had
been
tainted with unfair labor practice.
Petitioners added that respondent union's personality to represent the affected
employees had
already been repudiated by the workers themselves in the certification election
conducted by
the DOLE. Pursuant to the Decision of Undersecretary Dimapilis-Baldoz in Case No.
RO3 00
9806 RU 001, a certification election was held on September 7, 2000, at the premises of
petitioner corporation under the supervision of the DOLE.
ISSUES
"(1) Whether or NOT the dismissal of the employees of petitioner Meshurn Corporation
is for an
authorized cause, and
(2) Whether or NOT respondents can maintain a suit against petitioners.
DECISIONS: THE PETITION IS DENIED the issues revolved around the validity of the
dismissal of employees and the legal personality of the respondent union The closure of
Me-Shurn Corporation was deemed an unfair labor practice, and the discriminatory acts
against the union were recognized
Ruling under the Issue of Validity of the Dismissal
Basic is the rule in termination cases that the employer bears the burden of showing
that the
dismissal was for a just or authorized cause. Otherwise, the dismissal is deemed
unjustified.
The reason invoked by petitioners to justify the cessation of corporate operations was
alleged
business losses. Yet, other than generally referring to the financial crisis in 1998 and to
their
supposed difficulty in obtaining an export quota, interestingly, they never presented any
report
on the financial operations of the corporation during the period before its shutdown.
Neither did
they submit any credible evidence to substantiate their allegation of business losses.
The Court has ruled that matters regarding the financial condition of a company - -
those that
justify the closing of its business and show the losses in its operations - - are questions
of fact
that must be proven. Petitioners must bear the consequence of their neglect. Indeed,
their
unexplained failure to present convincing evidence of losses at the early stages of the
case
clearly belies the credibility of their present claim.
Obviously, on the basis of the evidence - - or the lack thereof - - the appellate court
cannot be
faulted for ruling that the NLRC did not gravely abuse its discretion in finding that the
closure of
petitioner corporation was not due to alleged financial losses.
The claim of petitioners that they were compelled to close down the company to prevent
further
losses is belied by their resumption of operations barely a month after the corporation
supposedly folded up. Moreover, petitioners attribute their loss mainly to their failure to
obtain an
export quota from the Garments and Textile Export Board (GTEB). But the business that
the
petitioner corporation engaged in did not depend entirely on exports to the United
States.
On the other hand, the Statement of Income and Deficit for the year 1998 does not
reflect the
extent of the losses that petitioner corporation allegedly suffered in the months prior to
its
closure in July/August 1998. This document is not an adequate and competent proof of
the
alleged losses, considering that it resumed operations in the succeeding month of
September.
We also take note of the allegation that after several years of attempting to organize a
union, the
employees finally succeeded on June 7, 1998. Ten days later, without any valid notice,
all of
them were placed on forced leave, allegedly because of lack of quota.
All these considerations give credence to their claim that the closure of the corporation
was a
mere subterfuge, "a systematic approach intended to dampen the enthusiasm of the
union
members."
Also, as a condition for the rehiring of the employees, the union officers were made to
sign an
agreement that they would not form any union upon their return to work. This move was
contrary to law.
Notwithstanding the Petition for Certification Election filed by respondents and despite
knowledge of the pendency thereof, petitioners recognized a newly formed union and
hastily
signed with it an alleged Collective Bargaining Agreement. Their preference for the new
union
was at the expense of the respondent union. Moncada Bijon Factory v. CIR held that an
employer could be held guilty of discrimination, even if the preferred union was not
company-dominated. Petitioners were not able to prove their allegation that some of the
employees' contracts had expired even before the cessation of operations. We find this
claim
inconsistent with their position that all 342 employees of the corporation were paid their
separation pay plus accrued benefits in August 1998.
Lastly, proper written notices of the closure were not sent to the DOLE and the
employees at
least one month before the effective date of the termination, as required under the
Labor Code.
Notice to the DOLE is mandatory to enable the proper authorities to ascertain whether
the
closure and/or dismissals were being done in good faith and not just as a pretext for
evading
compliance with the employer's just obligations to the affected employees. This
requirement is
intended to protect the workers' right to security of tenure. The absence of such a
requirement
taints the dismissal.
All these factors strongly give credence to the contention of respondents that the real
reason
behind the shutdown of the corporation was the formation of their union.
But where it is manifest that the closure is motivated not by a desire to avoid further
losses, but
to discourage the workers from organizing themselves into a union for more effective
negotiations with management, the State is bound to intervene.
Ruling under the Issue of Legal Personality of Respondent Union
Neither the Court is prepared to believe petitioners' argument that respondent union
was not
legitimate. It should be pointed out that on June 29, 1998, it filed a Petition for
Certification
Election. While this Petition was initially dismissed by the med-arbiter on the basis of a
supposed retraction, note that the appeal was granted and that Undersecretary
Dimapilis-Baldoz ordered the holding of a certification election.
The DOLE would not have entertained the Petition if the union were not a legitimate
labor
organization within the meaning of the Labor Code. Under this Code, in an unorganized
establishment, only a legitimate union may file a petition for certification election. Hence,
while it
is not clear from the record whether respondent union is a legitimate organization, the
court is
not readily inclined to believe otherwise, especially in the light of the pro-labor policies
enshrined
in the Constitution and the Labor Code.
"It would be an unwarranted impairment of the right to self-organization through
formation of
labor associations if thereafter such collective entities would be barred from instituting
action in
their representative capacity."
Finally, in view of the discriminatory acts committed by petitioners against respondent
union
prior to the holding of the certification election on September 27, 2000 - - acts that
included their
immediate grant of exclusive recognition to another union as a bargaining agent despite
the
pending Petition for certification election - - the results of that election cannot be said to
constitute a repudiation by the affected employees of the union's right to represent them
in the
present case.
WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED. Costs
against
the petitioners.
SO ORDERED.

17. DLSU vs DLSUEA, GR 109002 and 110072

DELA SALLE UNIVERSITY, petitioner,

vs.
DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA) and
BUENAVENTURA MAGSALIN, respondents.

x-----------------------x

G.R. No. 110072 April 12, 2000

DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION-NATIONAL FEDERATION

OF TEACHERS AND EMPLOYEES UNION (DLSUEA-NAFTEU), petitioner,
vs.
DELA SALLE UNIVERSITY and BUENAVENTURA MAGSALIN, respondents.

BUENA, J.:

Filed with this Court are two petitions for certiorari,1 the first petition with preliminary
injunction and/or temporary restraining order,2 assailing the decision of voluntary
arbitrator Buenaventura Magsalin, dated January 19, 1993, as having been rendered
with grave abuse of discretion amounting to lack or excess of jurisdiction. These two
petitions have been consolidated inasmuch as the factual antecedents, parties involved
and issues raised therein are interrelated.3

The facts are not disputed and, as summarized by the voluntary arbitrator, are as
follows. On December 1986, Dela Salle University (hereinafter referred to as
UNIVERSITY) and Dela Salle University Employees Association — National Federation
of Teachers and Employees Union (DLSUEA-NAFTEU), which is composed of regular
non-academic rank and file employees,4 (hereinafter referred to as UNION) entered into
a collective bargaining agreement with a life span of three (3) years, that is, from
December 23, 1986 to December 22, 1989.5 During the freedom period, or 60 days
before the expiration of the said collective bargaining agreement, the Union initiated
negotiations with the University for a new collective bargaining agreement6 which,
however, turned out to be unsuccessful, hence, the Union filed a Notice of Strike with
the National Conciliation and Mediation Board, National Capital Region.7 After several
conciliation-mediation meetings, five (5) out of the eleven (11) issues raised in the
Notice of Strike were resolved by the parties. A partial collective bargaining agreement
was thereafter executed by the parties.8 On March 18, 1991, the parties entered into a
Submission Agreement, identifying the remaining six (6) unresolved issues for
arbitration, namely: "(1) scope of the bargaining unit, (2) union security clause, (3)
security of tenure, (4) salary increases for the third and fourth years [this should
properly read second and third years]9 of the collective bargaining agreement, (5)
indefinite union leave, reduction of the union president's workload, special leave, and
finally, (6) duration of the agreement." 10 The parties appointed Buenaventura Magsalin
as voluntary arbitrator. 11 On January 19, 1993, the voluntary arbitrator rendered the
assailed decision. 12

In the said decision, the voluntary arbitrator, on the first issue involving the scope of the
bargaining unit, ruled that ". . . the Computer Operators assigned at the CSC [Computer
Services Center], just like any other Computer Operators in other units, [should be]
included as members of the bargaining unit," 13 after finding that "[e]vidently, the
Computer Operators are presently doing clerical and routinary work and had nothing to
do with [the] setting of management policies for the University, as [may be] gleaned
from the duties and responsibilities attached to the position and embodied in the CSC
[Computer Services Center] brochure. They may have, as argued by the University,
access to vital information regarding the University's operations but they are not
necessarily confidential." 14 Regarding the discipline officers, the voluntary arbitrator ". .
. believes that this type of employees belong (sic) to the rank-and-file on the basis of the
nature of their job." 15 With respect to the employees of the College of St. Benilde, the
voluntary arbitrator found that the College of St. Benilde has a personality separate and
distinct from the University and thus, held ". . . that the employees therein are outside
the bargaining unit of the University's rank-and-file employees." 16

On the second issue regarding the propriety of the inclusion of a union shop clause in
the collective bargaining agreement, in addition to the existing maintenance of
membership clause, the voluntary arbitrator opined that a union shop clause ". . . is not
a restriction on the employee's right of (sic) freedom of association but rather a valid
form of union security while the CBA is in force and in accordance with the
Constitutional policy to promote unionism and collective bargaining and negotiations.
The parties therefore should incorporate such union shop clause in their CBA." 17

On the third issue with respect to the use of the "last-in-first-out" method in case of
retrenchment and transfer to other schools or units, the voluntary arbitrator upheld the ".
. . elementary right and prerogative of the management of the University to select and/or
choose its employees, a right equally recognized by the Constitution and the law. The
employer, in the exercise of this right, can adopt valid and equitable grounds as basis
for lay-off or separation, like performance, qualifications, competence, etc. Similarly, the
right to transfer or reassign an employee is an employer's exclusive right and
prerogative." 18

Regarding the fourth issue concerning salary increases for the second and third years
of the collective bargaining agreement, the voluntary arbitrator opined that the ". .
.proposed budget of the University for SY 1992-93 could not sufficiently cope up with
the demand for increases by the Union. . . . . . . . With the present financial condition of
the University, it cannot now be required to grant another round of increases through
collective bargaining without exhausting its coffers for other legitimate needs of the
University as an institution," 19 thus, he ruled that ". . . the University can no longer be
required to grant a second round of increase for the school years under consideration
and charge the same to the incremental proceeds." 20

On the fifth issue as to the Union's demand for a reduction of the workload of the union
president, special leave benefits and indefinite union leave with pay, the voluntary
arbitrator rejected the same, ruling that unionism ". . . is no valid reason for the
reduction of the workload of its President," 21 and that there is ". . . no sufficient
justification to grant an indefinite leave." 22 Finding that the Union and the Faculty
Association are not similarly situated, technically and professionally, 23 and that "[w]hile
professional growth is highly encouraged on the part of the rank-and-file employees,
this educational advancement would not serve in the same degree as demanded of the
faculty members," 24 the voluntary arbitrator denied the Union's demand for special
leave benefits.

On the last issue regarding the duration of the collective bargaining agreement, the
voluntary arbitrator ruled that ". . . when the parties forged their CBA and signed it on 19
November 1990, where a provision on duration was explicitly included, the same
became a binding agreement between them. Notwithstanding the Submission
Agreement, thereby reopening this issue for resolution, this Voluntary Arbitrator is
constrained to respect the original intention of the parties, the same being not contrary
to law, morals or public policy." 25 As to the economic aspect of the collective
bargaining agreement, the voluntary arbitrator opined that the ". . . economic provisions
of the CBA shall be re-opened after the third year in compliance with the mandate of the
Labor Code, as amended." 26

Subsequently, both parties filed their respective motions for reconsideration which,
however, were not entertained by the voluntary arbitrator "pursuant to existing rules and
jurisprudence governing voluntary arbitration cases." 27

On March 5, 1993, the University filed with the Second Division of this Court, a petition
for certiorari with temporary restraining order and/or preliminary injunction assailing the
decision of the voluntary arbitrator, as having been rendered "in excess of jurisdiction
and/or with grave abuse of discretion." 28 Subsequently, on May 24, 1993, the Union
also filed a petition for certiorari with the First Division. 29 Without giving due course to
the petition pending before each division, the First and Second Divisions separately
resolved to require the respondents in each petition, including the Solicitor General on
behalf of the voluntary arbitrator, to file their respective Comments. 30 Upon motion by
the Solicitor General dated July 29, 1993, both petitions were consolidated and
transferred to the Second Division. 31

In his consolidated Comment 32 filed on September 9, 1993 on behalf of voluntary

arbitrator Buenaventura C. Magsalin, the Solicitor General agreed with the voluntary
arbitrator's assailed decision on all points except that involving the employees of the
College of St. Benilde. According to the Solicitor General, the employees of the College
of St. Benilde should have been included in the bargaining unit of the rank-and-file
employees of the University. 33 The Solicitor General came to this conclusion after
finding ". . . sufficient evidence to justify the Union's proposal to consider the University
and the CSB [College of St. Benilde] as only one entity because the latter is but a mere
integral part of the University," to wit: 34
1. One of the duties and responsibilities of the CSB's Director of Academic Services is
to coordinate with the University's Director of Admissions regarding the admission of
freshmen, shiftees and transferees (Annex "3" of the University's Reply);

2. Some of the duties and responsibilities of the CSB's Administrative Officer are as
follows:

A. xxx xxx xxx

4. Recommends and implements personnel policies and guidelines (in accordance with
the Staff Manual) as well as pertinent existing general policies of the university as a
whole. . . . .

12. Conducts and establishes liaison with all the offices concerned at the Main Campus
as well (sic) with other government agencies on all administrative-related matters. . . .

B. xxx xxx xxx

7. Handles processing, canvassing and direct purchasing of all requisitions worth more
than P10,000 or less. Coordinates and canvasses with the Main Campus all requisitions
worth more than P10,000. . . .

C. xxx xxx xxx

7. Plans and coordinates with the Security and Safety Committee at the Main Campus
the development of a security and safety program during times of emergency or
occurrence of fire or other natural calamities. . . . (Annex "4" of the University's Reply).

3. The significant role which the University assumes in the admission of students at the
CSB is revealed in the following provisions of the CSB's Bulletin for Arts and Business
Studies Department for the schoolyear 1992-1993, thus:
Considered in the process of admission for a (sic) high school graduate applicants are
the following criteria: results of DLSU College Entrance Examination . . . .

Admission requirements for transferees are: . . . and an acceptable score in the DLSU
admission test. . . .

Shiftees from DLSU who are still eligible to enroll may be admitted in accordance with
the DLSU policy on shifting. Considering that there sometimes exist exceptional cases
where a very difficult but temporary situation renders a DLSU student falling under this
category a last chance to be re-admitted provided he meets the cut-off scores required
in the qualifying examination administered by the university. . . .

He may not be remiss in his study obligations nor incur any violation whatsoever, as
such will be taken by the University to be an indication of his loss of initiative to pursue
further studies at DLSU. In sch (sic) a case, he renders himself ineligible to continue
studying at DLSU. DLSU thus reserves the right to the discontinuance of the studies of
any enrolee whose presence is inimical to the objectives of the CSB/DLSU. . . .

As a college within the university, the College of St. Benilde subscribes to the De La
Salle Mission." (Annexes "C-1," "C-2," and "C-3" of the Union's Consolidated Reply and
Rejoinder)

4. The academic programs offered at the CSB are likewise presented in the University's
Undergraduate Prospectus for schoolyear 1992-1993 (Annex "D" of the Union's
Consolidated Reply and Rejoinder).

5. The Leave Form Request (Annex "F" of the Union's Position Paper) at the CSB
requires prior permission from the University anent leaves of CSB employees, to wit:

AN EMPLOYEE WHO GOES ON LEAVE WITHOUT PRIOR PERMISSION FROM THE

UNIVERSITY OR WHO OVEREXTENDS THE PERIOD OF HIS APPROVED LEAVE
WITHOUT SECURING AUTHORITY FROM THE UNIVERSITY, OR WHO REFUSE TO
BE RECALLED FROM AN APPROVED LEAVE SHALL BE CONSIDERED ABSENT
WITHOUT LEAVE AND SHALL BE SUBJECT TO DISCIPLINARY ACTION.
6. The University officials themselves claimed during the 1990 University Athletic
Association of the Philippines (UAAP) meet that the CSB athletes represented the
University since the latter and the CSB comprise only one entity.

On February 9, 1994, this Court resolved to give due course to these consolidated
petitions and to require the parties to submit their respective memoranda. 35

In its memorandum filed on April 28, 1994, 36 pursuant to the above-stated Resolution,
37 the University raised the following issues for the consideration of the Court: 38

I.

WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE

VOLUNTARY ARBITRATOR WHEN HE INCLUDED, WITHIN THE BARGAINING UNIT
COMPRISING THE UNIVERSITY'S RANK-AND-FILE EMPLOYEES, THE COMPUTER
OPERATORS ASSIGNED AT THE UNIVERSITY'S COMPUTER SERVICES CENTER
AND THE UNIVERSITY'S DISCIPLINE OFFICERS, AND WHEN HE EXCLUDED THE
COLLEGE OF SAINT BENILDE EMPLOYEES FROM THE SAID BARGAINING UNIT.

II.

WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE

VOLUNTARY ARBITRATOR WHEN HE UPHELD THE UNION'S DEMAND FOR THE
INCLUSION OF A UNION SHOP CLAUSE IN THE PARTIES' COLLECTIVE
BARGAINING AGREEMENT.

III.

WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE

VOLUNTARY ARBITRATOR WHEN HE DENIED THE UNION'S PROPOSAL FOR THE
"LAST-IN-FIRST-OUT" METHOD OF LAY-OFF IN CASES OF RETRENCHMENT.
IV.

WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE

VOLUNTARY ARBITRATOR WHEN HE RULED THAT THE UNIVERSITY CAN NO
LONGER BE REQUIRED TO GRANT A SECOND ROUND OF WAGE INCREASES
FOR THE SCHOOL YEARS 1991-92 AND 1992-93 AND CHARGE THE SAME TO THE
INCREMENTAL PROCEEDS.

V.

WHETHER OR NOT GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE

VOLUNTARY ARBITRATOR WHEN HE DENIED THE UNION'S PROPOSALS ON THE
DELOADING OF THE UNION PRESIDENT, IMPROVED LEAVE BENEFITS AND
INDEFINITE UNION LEAVE WITH PAY.

The Union, on the other hand, raised the following issues, in its memorandum, 39 filed
pursuant to Supreme Court Resolution dated February 9, 1994, 40 to wit; that the
voluntary arbitrator committed grave abuse of discretion in:

(1) FAILING AND/OR REFUSING TO PIERCE THE VEIL OF CORPORATE FICTION

OF THE COLLEGE OF ST. BENILDE-DLSU DESPITE THE PRESENCE OF
SUFFICIENT BASIS TO DO SO AND IN FINDING THAT THE EMPLOYEES THEREAT
ARE OUTSIDE OF THE BARGAINING UNIT OF THE DLSU'S RANK-AND-FILE
EMPLOYEES. HE ALSO ERRED IN HIS INTERPRETATION OF THE APPLICATION
OF THE DOCTRINE;

(2) DENYING THE PETITIONER'S PROPOSAL FOR THE "LAST-IN FIRST-OUT"

METHOD OF LAY-OFF IN CASE OF RETRENCHMENT AND IN UPHOLDING THE
ALLEGED MANAGEMENT PREROGATIVE TO SELECT AND CHOOSE ITS
EMPLOYEES DISREGARDING THE BASIC TENETS OF SOCIAL JUSTICE AND
EQUITY UPON WHICH THIS PROPOSAL WAS FOUNDED;

(3) FINDING THAT THE MULTISECTORAL COMMITTEE IN THE RESPONDENT

UNIVERSITY IS THE LEGITIMATE GROUP WHICH DETERMINES AND
SCRUTINIZES ANNUAL SALARY INCREASES AND FRINGE BENEFITS OF THE
EMPLOYEES;
(4) HOLDING THAT THE 70% SHARE IN THE INCREMENTAL TUITION PROCEEDS
IS THE ONLY SOURCE OF SALARY INCREASES AND FRINGE BENEFITS OF THE
EMPLOYEES;

(5) FAILING/REFUSING/DISREGARDING TO CONSIDER THE RESPONDENT

UNIVERSITY'S FINANCIAL STATEMENTS FACTUALLY TO DETERMINE THE
FORMER'S CAPABILITY TO GRANT THE PROPOSED SALARY INCREASES OVER
AND ABOVE THE 70% SHARE IN THE INCREMENTAL TUITION PROCEEDS AND IN
GIVING WEIGHT AND CONSIDERATION TO THE RESPONDENT UNIVERSITY'S
PROPOSED BUDGET WHICH IS MERELY AN ESTIMATE.

(6) FAILING TO EQUATE THE POSITION AND RESPONSIBILITIES OF THE UNION

PRESIDENT WITH THOSE OF THE PRESIDENT OF THE FACULTY ASSOCIATION
WHICH IS NOT EVEN A LEGITIMATE LABOR ORGANIZATION AND IN
SPECULATING THAT THE PRESIDENT OF THE FACULTY ASSOCIATION SUFFERS
A CORRESPONDING REDUCTION IN SALARY ON THE ACCOUNT OF THE
REDUCTION OF HIS WORKLOAD; IN FAILING TO APPRECIATE THE EQUAL
RIGHTS OF THE MEMBERS OF THE UNION AND OF THE FACULTY FOR
PROFESSIONAL ADVANCEMENT AS WELL AS THE DESIRABLE EFFECTS OF THE
INSTITUTIONALIZATION OF THE SPECIAL LEAVE AND WORKLOAD REDUCTION
BENEFITS. 41

The question which now confronts us is whether or not the voluntary arbitrator
committed grave abuse of discretion in rendering the assailed decision, particularly, in
resolving the following issues: (1) whether the computer operators assigned at the
University's Computer Services Center and the University's discipline officers may be
considered as confidential employees and should therefore be excluded from the
bargaining unit which is composed of rank and file employees of the University, and
whether the employees of the College of St. Benilde should also be included in the
same bargaining unit; (2) whether a union shop clause should be included in the parties'
collective bargaining agreement, in addition to the existing maintenance of membership
clause; (3) whether the denial of the Union's proposed "last-in-first-out" method of
laying-off employees, is proper; (4) whether the ruling that on the basis of the
University's proposed budget, the University can no longer be required to grant a
second round of wage increases for the school years 1991-92 and 1992-93 and charge
the same to the incremental proceeds, is correct; (5) whether the denial of the Union's
proposals on the deloading of the union president, improved leave benefits and
indefinite union leave with pay, is proper; (6) whether the finding that the multi-sectoral
committee in the University is the legitimate group which determines and scrutinizes the
annual salary increases and fringe benefits of the employees of the University, is
correct; and (7) whether the ruling that the 70% share in the incremental tuition
proceeds is the only source of salary increases and fringe benefits of the employees, is
proper.

Now, before proceeding to the discussion and resolution of the issues raised in the
pending petitions, certain preliminary matters call for disposition. As we reiterated in the
case of Caltex Refinery Employees Association (CREA) vs. Jose S. Brillantes, 42 the
following are the well-settled rules in a petition for certiorari involving labor cases. "First,
the factual findings of quasi-judicial agencies (such as the Department of Labor and
Employment), when supported by substantial evidence, are binding on this Court and
entitled to great respect, considering the expertise of these agencies in their respective
fields. It is well-established that findings of these administrative agencies are generally
accorded not only respect but even finality. 43

Second, substantial evidence in labor cases is such amount of relevant evidence which
a reasonable mind will accept as adequate to justify a conclusion. 44

Third, in Flores vs. National Labor Relations Commission, 45 we explained the role and
function of Rule 65 as an extraordinary remedy:

It should be noted, in the first place, that the instant petition is a special civil action for
certiorari under Rule 65 of the Revised Rules of Court. An extraordinary remedy, its use
is available only and restrictively in truly exceptional cases — those wherein the action
of an inferior court, board or officer performing judicial or quasi-judicial acts is
challenged for being wholly void on grounds of jurisdiction. The sole office of the writ of
certiorari is the correction of errors of jurisdiction including the commission of grave
abuse of discretion amounting to lack or excess of jurisdiction. It does not include
correction of public respondent NLRC's evaluation of the evidence and factual findings
based thereon, which are generally accorded not only great respect but even finality.

No question of jurisdiction whatsoever is being raised and/or pleaded in the case at

bench. Instead, what is being sought is a judicial re-evaluation of the adequacy or
inadequacy of the evidence on record, which is certainly beyond the province of the
extraordinary writ of certiorari. Such demand is impermissible for it would involve this
Court in determining what evidence is entitled to belief and the weight to be assigned it.
As we have reiterated countless times, judicial review by this Court in labor cases does
not go so far as to evaluate the sufficiency of the evidence upon which the proper labor
officer or office based his or its determination but is limited only to issues of jurisdiction
or grave abuse of discretion amounting to lack of jurisdiction. (emphasis supplied).

With the foregoing rules in mind, we shall now proceed to discuss the merit of these
consolidated petitions.

We affirm in part and modify in part.

On the first issue involving the classification of the computer operators assigned at the
University's Computer Services Center and discipline officers, the University argues that
they are confidential employees and that the Union has already recognized the
confidential nature of their functions when the latter agreed in the parties' 1986
collective bargaining agreement to exclude the said employees from the bargaining unit
of rank-and-file employees. As far as the said computer operators are concerned, the
University contends that ". . . the parties have already previously agreed to exclude all
positions in the University's Computer Services Center (CSC), which include the
positions of computer operators, from the collective bargaining unit. . . . . . . . " 46 The
University further contends that ". . . the nature of the work done by these Computer
Operators is enough justification for their exclusion from the coverage of the bargaining
unit of the University's rank-and-file employees. . . . . . . ." 47 According to the University,
the Computer Services Center, where these computer operators work, ". . . processes
data that are needed by management for strategic planning and evaluation of systems.
It also houses the University's confidential records and information [e.g. student records,
faculty records, faculty and staff payroll data, and budget allocation and expenditure
related data] which are contained in computer files and computer-generated reports. . . .
. . . . Moreover, the Computer Operators are in fact the repository of the University's
confidential information and data, including those involving and/or pertinent to labor
relations. . . . . . . ." 48

As to the discipline officers, the University maintains that " . . . they are likewise
excluded from the bargaining unit of the rank-and-file employees under the parties' 1986
CBA. The Discipline Officers are clearly alter egos of management as they perform
tasks which are inherent in management [e.g. enforce discipline, act as peace officers,
secure peace and safety of the students inside the campus, conduct investigations on
violations of University regulations, or of existing criminal laws, committed within the
University or by University employees] . . . . . . . " 49 The University also alleges that
"the Discipline Officers are privy to highly confidential information ordinarily accessible
only to management." 50
With regard to the employees of the College of St. Benilde, the Union, supported by the
Solicitor General at this point, asserts that the veil of corporate fiction should be pierced,
thus, according to the Union, the University and the College of St. Benilde should be
considered as only one entity because the latter is but a mere integral part of the
University. 51

The University's arguments on the first issue fail to impress us. The Court agrees with
the Solicitor General that the express exclusion of the computer operators and discipline
officers from the bargaining unit of rank-and-file employees in the 1986 collective
bargaining agreement does not bar any re-negotiation for the future inclusion of the said
employees in the bargaining unit. During the freedom period, the parties may not only
renew the existing collective bargaining agreement but may also propose and discuss
modifications or amendments thereto. With regard to the alleged confidential nature of
the said employees' functions, after a careful consideration of the pleadings filed before
this Court, we rule that the said computer operators and discipline officers are not
confidential employees. As carefully examined by the Solicitor General, the service
record of a computer operator reveals that his duties are basically clerical and non-
confidential in nature. 52 As to the discipline officers, we agree with the voluntary
arbitrator that based on the nature of their duties, they are not confidential employees
and should therefore be included in the bargaining unit of rank-and-file employees.

The Court also affirms the findings of the voluntary arbitrator that the employees of the
College of St. Benilde should be excluded from the bargaining unit of the rank-and-file
employees of Dela Salle University, because the two educational institutions have their
own separate juridical personality and no sufficient evidence was shown to justify the
piercing of the veil of corporate fiction. 53

On the second issue involving the inclusion of a union shop clause in addition to the
existing maintenance of membership clause in the collective bargaining agreement, the
University avers that ". . . it is in the spirit of the exercise of the constitutional right to
self-organization that every individual should be able to freely choose whether to
become a member of the Union or not. The right to join a labor organization should
carry with it the corollary right not to join the same. This position of the University is but
in due recognition of the individual's free will and capability for judgment." 54 The
University assails the Union's demand for a union shop clause as ". . . definitely unjust
and amounts to oppression. Moreover, such a demand is repugnant to democratic
principles and the constitutionally guaranteed freedom of individuals to join or not to join
an association as well as their right to security of tenure, particularly, on the part of
present employees." 55

The Union, on the other hand, counters that the Labor Code, as amended, recognizes
the validity of a union shop agreement in Article 248 thereof which reads:

Art. 248. Unfair labor practices of employers. —

xxx xxx xxx

(e) To discriminate in regard to hire or tenure of employment or any term or condition of

employment in order to encourage or discourage membership in any labor organization.
Nothing in this Code or in any other law shall prevent the parties from requiring
membership in a recognized collective bargaining agent as a condition for employment,
except of those employees who are already members of another union at the time of the
signing of the collective bargaining agreement. . . . . . . ." (emphasis supplied)

We affirm the ruling of the voluntary arbitrator for the inclusion of a union shop provision
in addition to the existing maintenance of membership clause in the collective
bargaining agreement. As the Solicitor General asserted in his consolidated Comment,
the University's reliance on the case of Victoriano vs. Elizalde Rope Workers' Union 56
is clearly misplaced. In that case, we ruled that ". . . the right to join a union includes the
right to abstain from joining any union. . . . . . . . The right to refrain from joining labor
organizations recognized by Section 3 of the Industrial Peace Act is, however, limited.
The legal protection granted to such right to refrain from joining is withdrawn by
operation of law, where a labor union and an employer have agreed on a closed shop,
by virtue of which the employer may employ only members of the collective bargaining
union, and the employees must continue to be members of the union for the duration of
the contract in order to keep their jobs. . . . . . . ." 57

On the third issue regarding the Union's proposal for the use of the "last-in-first-out"
method in case of lay-off, termination due to retrenchment and transfer of employees,
the Union relies on social justice and equity to support its proposition, and submits that
the University's prerogative to select and/or choose the employees it will hire is limited,
either by law or agreement, especially where the exercise of this prerogative might
result in the loss of employment. 58 The Union further insists that its proposal is ". . . in
keeping with the avowed State policy '(q) To ensure the participation of workers in
decision and policy-making processes affecting their rights, duties and welfare' (Art.
211, Labor Code, as amended)." 59

On the other hand, the University asserts its management prerogative and counters that
"[w]hile it is recognized that this right of employees and workers to 'participate in policy
and decision-making processes affecting their rights and benefits as may be provided
by law' has been enshrined in the Constitution (Article III, [should be Article XIII], Section
3, par. 2), said participation, however, does not automatically entitle the Union to dictate
as to how an employer should choose the employees to be affected by a retrenchment
program. The employer still retains the prerogative to determine the reasonable basis
for selecting such employees." 60

We agree with the voluntary arbitrator that as an exercise of management prerogative,

the University has the right to adopt valid and equitable grounds as basis for terminating
or transferring employees. As we ruled in the case of Autobus Workers' Union (AWU)
and Ricardo Escanlar vs. National Labor Relations Commission, 61 "[a] valid exercise of
management prerogative is one which, among others, covers: work assignment,
working methods, time, supervision of workers, transfer of employees, work supervision,
and the discipline, dismissal and recall of workers. Except as provided for, or limited by
special laws, an employer is free to regulate, according to his own discretion and
judgment, all aspects of employment." (emphasis supplied)

On the fourth issue involving the voluntary arbitrator's ruling that on the basis of the
University's proposed budget, the University can no longer be required to grant a
second round of wage increases for the school years 1991-92 and 1992-93 and charge
the same to the incremental proceeds, we find that the voluntary arbitrator committed
grave abuse of discretion amounting to lack or excess of jurisdiction. As we ruled in the
case of Caltex Refinery Employees Association (CREA) vs. Jose S. Brillantes, 62 ". . . . .
. . [w]e believe that the standard proof of a company's financial standing is its financial
statements duly audited by independent and credible external auditors." 63 Financial
statements audited by independent external auditors constitute the normal method of
proof of profit and loss performance of a company. 64 The financial capability of a
company cannot be based on its proposed budget because a proposed budget does not
reflect the true financial condition of a company, unlike audited financial statements, and
more importantly, the use of a proposed budget as proof of a company's financial
condition would be susceptible to abuse by scheming employers who might be merely
feigning dire financial condition in their business ventures in order to avoid granting
salary increases and fringe benefits to their employees.
On the fifth issue involving the Union's proposals on the deloading of the union
president, improved leave benefits and indefinite union leave with pay, we agree with
the voluntary arbitrator's rejection of the said demands, there being no justifiable reason
for the granting of the same.

On the sixth issue regarding the finding that the multi-sectoral committee in the
University is the legitimate group which determines and scrutinizes the annual salary
increases and fringe benefits of the employees of the University, the Court finds that the
voluntary arbitrator did not gravely abuse his discretion on this matter. From our reading
of the assailed decision, it appears that during the parties' negotiations for a new
collective bargaining agreement, the Union demanded for a 25% and 40% salary
increase for the second and third years, respectively, of the collective bargaining
agreement. 65 The University's counter-proposal was for a 10% increase for the third
year. 66 After the meeting of the multi-sectoral committee on budget, which is
composed of students, parents, faculty, administration and union, the University granted
across-the-board salary increases of 11.3% and 19% for the second and third years,
respectively. 67 While the voluntary arbitrator found that the said committee ". . .
decided to grant the said increases based on the University's viability which were
exclusively sourced from the tuition fees. . . . . . . .," no finding was made as to the basis
of the committee's decision. Be that as it may, assuming for the sake of argument that
the said committee is the group responsible for determining wage increases and fringe
benefits, as ruled by the voluntary arbitrator, the committee's determination must still be
based on duly audited financial statements following our ruling on the fourth
issue.1âwphi1

On the seventh and last issue involving the ruling that the 70% share in the incremental
tuition proceeds is the only source of salary increases and fringe benefits of the
employees, the Court deems that any determination of this alleged error is unnecessary
and irrelevant, in view of our rulings on the fourth and preceding issues and there being
no evidence presented before the voluntary arbitrator that the University held
incremental tuition fee proceeds from which any wage increase or fringe benefit may be
satisfied.

WHEREFORE, premises considered, the petitions in these consolidated cases, G.R.

No. 109002 and G.R. No. 110072 are partially GRANTED. The assailed decision dated
January 19, 1993 of voluntary arbitrator Buenaventura Magsalin is hereby AFFIRMED
with the modification that the issue on salary increases for the second and third years of
the collective bargaining agreement be REMANDED to the voluntary arbitrator for
definite resolution within one month from the finality of this Decision, on the basis of the
externally audited financial statements of the University already submitted by the Union
before the voluntary arbitrator and forming part of the records.1âwphi1.nêt

SO ORDERED.

ISSUE: The case involves a dispute over the Collective Bargaining Agreement (CBA)
between Dela Salle University (petitioner) and Dela Salle University Employees
Association-National Federation of Teachers and Employees Union (DLSUEA-NAFTEU,
petitioner). The voluntary arbitrator, Buenaventura Magsalin, rendered a decision on
January 19, 1993, which was subsequently challenged through petitions for certiorari.

DECISION: The overall decision affirmed the voluntary arbitrator's decision with a
modification, specifically remanding the issue of salary increases for the second and
third years of the CBA for resolution based on externally audited financial statements.

18. R. Transport Corp vs DOLE, GR 106830, Nov 16, 1993

G.R. No. 106830 November 16, 1993

R. TRANSPORT CORPORATION, petitioner,

vs.
HON. BIENVIENIDO E. LAGUESMA. in his capacity as Undersecretary of the
Department of Labor and Employment, CHRISTIAN LABOR ORGANIZATION OF THE
PHILIPPINES (CLOP), NATIONAL FEDERATION OF LABOR UNIONS (NAFLU), and
ASSOCIATED LABOR UNIONS (ALU-TUCP), respondents.

Gaspar V. Tagalo for petitioner.

Jose Torregoza for Christian Labor Organization of the Philippines.

Joji Barrios for intervenor ALU-TUCP.

Villy Cadiz for National Federation of Labor Unions.

QUIASON, J.:

This is a petition for certiorari under Rule 65 of the Rules of Court which seeks to set
aside the Resolutions of the Undersecretary of the Department of Labor and
Employment (DOLE) dated July 22, 1992, affirming the order of the Med-Arbiter calling
for the conduct of the certification election, and August 25, 1992, denying petitioner's
motion for reconsideration.

On January 4, 1991, respondent Christian Labor Organization of the Philippines

(CLOP), filed with the Med-Arbitration Unit of the DOLE a petition for certification
election among the rank and file employees of the petitioner (NCR-OD-M-91-01-002).

On April 8, 1991, Med-Arbiter A. Dizon dismissed the petition on the ground that the
bargaining unit sought to be represented by respondent did not include all the eligible
employees of petitioner but only the drivers, conductors and conductresses to the
exclusion of the inspectors, inspectresses, dispatchers, mechanics and washerboys.

On May 10, 1991, respondent. CLOP rectified its mistake and filed a second petition for
certification election,which included all the rank and file employees of the company, who
hold non-managerial. and non-supervisorial positions.

Petitioner filed a motion to dismiss the second petition and contended that the dismissal
of the first petition constituted res judicata. Petitioner argued that respondent CLOP
should have interposed an appeal to the dismissal of the first petition and its failure to
do so barred it from filing another petition for certification election.

On July 3, 1991, Med-Arbiter R. Parungo rendered a decision, which ordered that a

certification election among the regular rank and file workers of petitioner company be
conducted (Rollo, pp. 87-91).

On October 16, 1991, the Associated Labor Unions (ALU-TUCP) filed a motion for
intervention (NCR OD-M-91-01-002) and alleged that it has members in the proposed
bargaining unit. Subsequently, the National Federation of Labor Unions (NAFLU) filed a
separate petition for certification election (NCR-OD-M-91-10-058) and a motion to
consolidate related cases to avoid confusion.

Dissatisfied with the Decision dated July 3, 1991 rendered by Med-Arbiter R. Parungo,
petitioner appealed to the DOLE Secretary, who, through Undersecretary Bienvenido E.
Laguesma, affirmed the Med-Arbiter in its Resolution dated July 22, 1992 calling for the
conduct of the certification election (Rollo, pp. 25-28). The Resolution, in pertinent part,
reads as follows:

xxx xxx xxx

The defense of res judicata is not obtaining in the present petition for certification
election. It is settled that for res judicata to apply there must be a final judgment on the
merits on matters put in issue. In the instant case, it could not be said that there is a
final judgment on the merits of the petition simply because the composition of the
present proposed bargaining unit is different from that in the first petition. Moreover,
there are now other parties involved, and therefore, it would not be correct to say that
the parties in the said two cases are identical.

xxx xxx xxx

With regard however, to the question on propriety of consolidation, there is merit in the
argument of respondent-appellant on the need to consolidate the separate petitions for
certification election because they involve the same bargaining unit. Case No. NCR-OD-
M-91-10-058 should be consolidated with that of Case No. NCR- OD-M-91-05-062,
where the petition of NAFLU should be treated as an intervention and resolved by the
Med-Arbiter together with the intervention of ALU-TUCP.

PREMISES CONSIDERED, the Order of the Med-Arbiter calling for the conduct of the
certification election is hereby affirmed subject to the resolution of the Med-Arbiter of the
motions for intervention aforementioned (Rollo, pp. 27-28; emphasis supplied).

On July 31, 1992, petitioner filed a Motion for Reconsideration, again stressing the
principle of res judicata. Petitioner further argued that the second petition for a
certification election by respondent CLOP, NAFLU and ALU-TUCP were barred at least
for a period of one year from the time the first petition of CLOP was dismissed pursuant
to Section Rule V, Book V of the Omnibus Rules Implementing the Labor Code as
amended.

On August 25, 1991, Undersecretary Laguesma denied the motion for reconsideration
(Rollo, pp. 32-34).

On September 3, 1992, petitioner filed a Motion to Suspend Proceedings based on

Prejudicial Questions as an Addendum to the Motion for Reconsideration filed on July
31, 1992. Petitioner argued that the present case must be indefinitely suspended until
the following cases are resolved by the NLRC and the Supreme Court: a) NLRC-NCR
Case No. 00-08-04708-91 entitled "R". Transport Corporation v. Jose S. Torregaza, et.
al., wherein Labor Arbiter de Castro declared the strike staged by respondent CLOP
illegal and ordered the strikers to pay petitioner the amount of P10,000.00 as exemplary
damages; b) NLRC-NCR Case No. 06-03415092 filed by respondent CLOP and its
members for illegal dismissal; and NLRC-NCR Case No. 00-08-04389-92 filed by
respondent CLOP in behalf of its affected members for illegal dismissal (Rollo, pp. 139-
145).

On September 29, 1992, Undersecretary Laguesma in a resolution denied the motion to

suspend the conduct of the certification election. The pertinent portion of said resolution
reads as follows:

The pendency of NLRC-NCR Cases Nos. 00-08- 04708-91, 06-03415092 and 00-08-
04389-92 before the NLRC is not a valid ground for the suspension of the already
stalled petition for certification election which must be resolved with dispatch.

This must be so, because the employees subject of the pending cases before the NLRC
legally remain as employees of respondent until the motion to declare them as having
lost their employment status by reason of the illegal strike or their complaint for illegal
dismissal is finally resolved. (Rollo, pp. 181-182; emphasis supplied)

On October 14, 1992, petitioner filed a motion for reconsideration of the Resolution
dated September 29, 1992 which was subsequently denied by Undersecretary
Laguesma on October 29, 1992 (Rollo, pp. 29-31).
Petitioner filed a Comment and Objection to the Order dated October 29, 1992 with
Urgent Motion to Dismiss the Petition for Certification Election. Without waiting for the
resolution of the motion to dismiss, petitioner resorted to this Court by way of the instant
special civil action.

This petition is without merit.

Before the principle of res judicata can be operative, the following requisites must be
present: a) the former judgment or order must be final; b) it must be a judgment ororder
on the merits; c) it must have been rendered by a court having jurisdiction over the
subject-matter and the parties; and d) there must be, between the first and second
actions, identity of parties (Nabus v. Court of Appeals, 193 SCRA 732 [1991]).

In the case at bench, it cannot be said that the parties in the first and second actions
were identical. The first action was dismissed by the Med-Arbiter because it excluded
parties essential to the bargaining unit such as inspectors, inspectresses, dispatchers
and washer boys. The second petition included all the employees who were excluded in
the first petition. Therefore, the Med-Arbiter was correct when he gave due course to
the second petition for certification election after respondent CLOP corrected its
mistake.

Likewise untenable is petitioner's contention that the second petition for certification
election should have been filed after one year from the dismissal of the first petition
certification election under Section 3, Rule V, Book V of the Omnibus Rules
Implementing the Labor Code as amended. Said section provides as follows:

When to file — In the absence of collective bargaining agreement duly registered in

accordance with Article 231 of the Code, a petition for certification election may be filed
any time. However, no certification election may be held within one year from the date of
the issuance of a final certification election result (Emphasis supplied).

Apparently, petitioner misread the above-mentioned provision of law. The phrase "final
certification election result" means that there was an actual conduct of election i.e.
ballots were cast and there was a counting of votes. In this case, there was no
certification election conducted precisely because the first petition was dismissed, on
the ground of a defective petition which did not include all the employees who should be
properly included in the collective bargaining unit.
Devoid of merit is petitioner's contention that the employment status of the members of
respondent CLOP who joined the strike must first be resolved before a certification
election can be conducted.

As held in the case of Philippine Fruits and Vegetables Industries, Inc. v. Torres, 211
SCRA 95 (1992):

At any rate, it is now well-settled that employees who have been improperly laid-off but
who have a present, unabandoned right to or expectation of re-employment, are eligible
to vote in certification elections (Rothenberg on Labor Relations, p. 548). Thus, and to
repeat, if the dismissal is under question, as in the case now at bar whereby a case of
illegal dismissal and/or unfair labor practices was filed, the employees concerned could
still qualify to vote in the elections.

Therefore, the employees of petitioner who participated in the strike, legally remain as
such, until either the motion to declare their employment status legally terminated or
their complaint for illegal dismissal is resolved by the NLRC.

It should be noted that it is the petitioner, the employer, which has offered the most
tenacious resistance to the holding of a certification election. This must not be so for the
choice of a collective bargaining agent is the sole concern of the employees. The
employer has no right to interfere in the election and is merely regarded as a bystander
(Divine Word University of Tacloban v. Secretary of Labor and Employment, 213 SCRA
759 [1992]).

Finally, petitioner's Comment and Objection to the Order dated October 29, 1992 with
Urgent Motion to Dismiss the Petition for Certification Election is still pending with the
Undersecretary of Labor. The resort to judicial action by petitioner is premature. Hence,
it is also guilty of forum-shopping in pursuing the same cause of action involving the
same issue, parties and subject matter before two different fora.

WHEREFORE, the Court Resolved to DISMISS the petition.

SO ORDERED.

ISSUE: The primary issue in the case was whether the principle of res judicata applied
to bar the second petition for a certification election filed by the Christian Labor
Organization of the Philippines (CLOP) after the dismissal of its first petition.

DECISION: The court dismissed the petition, stating that the principle of res judicata
was not applicable because the parties in the first and second actions were not
identical. The court also addressed other arguments raised by the petitioner, such as
the timing of the second petition for certification election and the employment status of
certain employees who participated in a strike.

19. Timbungco vs BLR, Gr 76111

EMMANUEL TIMBUNGCO, petitioner,

vs.
HON. RICARDO C. CASTRO, in his capacity as Officer-in-Charge, Bureau of Labor
Relations, Ministry of Labor and Employment, and DELICANO PAJARES,
respondents.
FACTS:
● The petitioner in the special civil action of certiorari at bar prays for nullification of
the Resolutions of the Bureau of Labor Relations dated September 9, 1986 and
September 30, 1986 — sustaining that of Med-Arbiter Danilo Reynante dated
July 3, 1986,which granted the petition for election of officers of the labor
organization known as Kapisanan ng Manggagawa sa Associated Anglo
American Tobacco Corporation.
● Emmanuel Timbungco was the president of the Kapisanan, which was composed
of employees of the Associated Anglo American Tobacco Corporation (AAATC).
● The union had a three-year collective bargaining agreement (CBA) with AAATC.
● On July 15, 1984 (Freedom Period), a general meeting of all the KAPISANAN
members was held, during which they unanimously approved the disaffiliation of
the KAPISANAN from the mother union, Federation FOITAF (FEDERACIÓN
OBRERA DE LA INDUSTRIA TABAQUERA Y OTROS TRABAJADORES DE
FILIPINAS), and an amendment of its constitution and by-laws.
● A new set of officers was elected, with Timbungco re-elected as president without
opposition.
● On July 23, 1984 Timbungco submitted to the Bureau of Labor Relations the
following documents:
1. a certified copy of the Kapisanan's amended constitution and by-laws;
2. an affidavit jointly executed by him and the union secretary declaring that the
Kapisanan was the sole collective bargaining agent in AAATC;
3. a copy of the minutes of the meeting of July 15, 1984; and
4. a copy of the Kapasiyahan (Resolution) of the rank and file members to
disaffiliate from the Federacion FOITAF.● After submitting the required documentation to
the Bureau of Labor Relations
(BLR), a new registration certificate was issued to the KAPISANAN.
● CBA negotiations were initiated between Timbungco, as the re-elected president
of the KAPISANAN, and AAATC, resulting in the execution of another 3-year
CBA. A copy of the agreement was filed with the BLR.
● On April 8, 1986, Leodegario L. Zapanta, president of the Association of
Democratic Labor Organizations (ADLO), sent a letter to the BLR saying that the
majority of KAPISANAN members had affiliated with ADLO.
● On April 10, 1986, ADLO's Executive National Vice President Tayo wrote to
AAATC, requesting the cessation of dues deductions and refusing to deal with
Timbungco and his group.
● On April 12, 1986, Delicano Pajares, a KAPISANAN member, wrote a letter to
AAATC requesting the cessation of union dues deductions and filed a petition
with the BLR for the election of KAPISANAN officers; he alleged that he and his
co-workers numbered 700, 62% of whom had signed the petition; alleging that
the election of officers held on July 15, 1984, was invalid.
● After due process, the Med-Arbiter Reynante issued an order declaring the
election of union officers held on July 15, 1984, invalid.
ISSUE:
Whether the election of union officers held on July 15, 1984, is valid.
RULING: The main issue addressed in the case is whether the election of union officers
is valid, and the ruling affirms the validity of the election.
Yes, the election of union officers held on July 15, 1984, is valid. According to the rules
implementing the Labor Code, protests against elections should be formalized before
the med-arbiter within five days from the close of the election proceedings and must be
decided by the med-arbiter within twenty working days.The private respondents'
objections to the elections of July 15, 1984, came too late, and they must be deemed to
have forfeited their right to impugn the same. The protest against the election was
presented to the med-arbiter almost two years after it was held, and no informal protest,
oral or written, was presented against the election during that interval. This implied tacit
acceptance of the regularity of the elections and their results. There was no indication
that the relaxation of certain technical requirements or formalities related to the election
of July 15, 1984, resulted in the deprivation of any substantial right or prerogative of
anyone, caused fraud or other serious anomalies, or precluded the expression and
ascertainment of the popular will in the choice of officers. Therefore, the election of
union officers held on July 15, 1984, is considered valid.

20. San Miguel Corp vs NLRVC, GR 108001

[G.R. No. 108001. March 15, 1996.]

SAN MIGUEL CORPORATION, ANGEL G. ROA and MELINDA MACARAIG,
Petitioners, v. NATIONAL LABOR RELATIONS COMMISSION(Second Division),
LABOR ARBITER EDUARDO J. CARPIO, ILAW AT BUKLOD NG MANGGAGAWA
(IBM), ET AL., Respondents.
Facts:
● On or about July 31, 1990, private respondents, employed by petitioner San
Miguel Corporation (SMC) as mechanics, machinists, and carpenters, bona fide
officers and members of private respondent Ilaw at Buklod ng Manggagawa,
were served a memorandum from petitioner Angel G. Rao, Vice- President and
Manager of SMC’s Business Logistics Division (BLD), to the effect that they had
to be separated from the service effective October 31, 1990 on the ground of
“redundancy or excess personnel."
● Respondent union, on behalf of private respondents, opposed the intended
dismissal and asked for a dialogue with management.
● Accordingly, a series of dialogues were held between petitioners and private
respondents.
● Even before the conclusion of said dialogues, the aforesaid petitioner Angel Roa
issued another memorandum on October 1, 1990 informing private respondents
that they would be dismissed from work effective as of the close of business
hours on November 2, 1990.
● Private respondents were in fact purged on the date aforesaid. Thus, on
February 25, 1991, private respondents filed a complaint against petitioners for
Illegal Dismissal and Unfair Labor Practices, with a prayer for damages and
attorney’s fees, with the arbitration branch of respondent National Labor
Relations Commission.
● Petitioners filed a motion to dismiss the complaint, alleging that respondent Labor
Arbiter had no jurisdiction over the subject matter of the complaint, and that
respondent Labor Arbiter must defer consideration of the unfair labor practice
complaint until after the parties have gone through the grievance procedure
provided for in the existing Collective Bargaining Agreement (CBA).
Issues:
● Whether the Labor Arbiter had jurisdiction over the alleged illegal termination and
unfair labor practice cases without prior resort to the grievance and arbitration
provided under the CBA.
Ruling: The main issue addressed in the case was whether the Labor Arbiter had
jurisdiction over the alleged illegal termination and unfair labor practice cases without
prior resort to the grievance and arbitration provided under the Collective Bargaining
Agreement (CBA).
Yes. The law in point is Article 217 (a) of the Labor Code. It is elementary that this law is
deemed written into the CBA. In fact, the law speaks in plain and unambiguous terms
that termination disputes, together with unfair labor practices, are matters falling under
the original and exclusive jurisdiction of the Labor Arbiter. The sole exception to the
above rule can be found under Article 262 of the same Code which provides: "Article
262. Jurisdiction over other labor disputes — The voluntary arbitrator or panel of
voluntary arbitrators, upon agreement of the parties, shall also hear and decide all other
labor disputes including unfair labor practices and bargaining deadlocks." We subjected
the records of this case, particularly the CBA, to meticulous scrutiny and we find no
agreement between SMC and the respondent union that would state in unequivocal
language that petitioners and respondent union conform to the submission of
termination disputes and unfair labor practices to voluntary arbitration. Section 1, Article
V of the CBA, cited by the herein petitioners, certainly does not provide so. Hence,
consistent with the general rule under Article 217 (a) of the Labor Code, the Labor
Arbiter property has jurisdiction over the complaint filed by the respondent union on
February 25, 1991 for illegal dismissal and unfair labor practice.

G.R. No. 127598 January 27, 1999 - February 22, 2000

MANILA ELECTRIC COMPANY, petitioner, Vs Hon. SECRETARY OF LABOR
LEONARDO QUISUMBING and MERALCO EMPLOYEES and WORKERS
ASSOCIATION (MEWA), respondent.
Facts: In this petition for certiorari, the Manila Electric Company (MERALCO) seeks to
annul the orders of the Secretary of Labor dated August 19, 1996 and December 28,
1996, wherein the Secretary required MERALCO and its rank and file union — the
Meralco Workers Association (MEWA) — to execute a collective bargaining agreement
(CBA) for the remainder of the parties' 1992-1997 CBA cycle, and to incorporate in this
new CBA the Secretary's dispositions on the disputed economic and non-economic
issues.
On September 7, 1995, MEWA informed MERALCO of its intention to renegotiate the
terms and conditions of their existing 1992-1997 Collective Bargaining Agreement
(CBA) covering the remaining period of two years starting from December 1, 1995 to
November 30, 1997. MERALCO signified its willingness to re-negotiate through its letter
dated October 17, 1995 and formed a CBA negotiating panel for the purpose. On
November 10, 1995, MEWA submitted its proposal to MERALCO, which, in turn,
presented a counter-proposal. Thereafter, collective bargaining negotiations proceeded.
However, despite the series of meetings between the negotiating panels of MERALCO
and MEWA, the parties failed to arrive at "terms and conditions acceptable to both of
them."
On April 23, 1996, MEWA filed a Notice of Strike with the National Capital Region
Branch of the National Conciliation and Mediation Board (NCMB) of the Department of
Labor and Employment (DOLE) which was docketed as NCMB-NCR-NS-04-152-96, on
the grounds of bargaining deadlock and unfair labor practices. The NCMB then
conducted a series of conciliation meetings but the parties failed to reach an amicable
settlement. Faced with the imminence of a strike, MERALCO on May 2, 1996, filed an
Urgent Petition with the Department of Labor and Employment which was docketed as
OS-AJ No. 0503[1]96 praying that the Secretary assume jurisdiction over the labor
dispute and to enjoin the striking employees to go back to work.
Secretary granted the petition on May 8, 1996 where the cause of his decision is
pursuant to Article 263(g) of the Labor Code and deputizing USEC. Espanol, Jr. to
conduct conciliation conferences between the parties. Thereafter, both parties submitted
their Memoranda on August 19, 1996, in which Economic Demands ( such as wages,
Red Circle Rate (RCR) allowance ect. were generally granted except for resignation
benefits, night work) and Political Demands ( such as scope of the collective bargaining
unit, union recognition and security, transfer of assignment and job security) were
granted.
MERALCO filed MR alleging that the Sec. of Labor committed grave abuse of discretion
amounting to lack or excess of jurisdiction in (1) awarding MEWA P1.142B that would
imperil MERALCO’s viability as a public utility; (2) granting wage increase; (3)
incorporation into the CBA of all existing employee benefits; (4) granding certain political
demands presented by the union; and (5) in ordering the CBA to be effect of Dec. 1995
instead of Aug. 19 1996 when he resolved the dispute.
ECONOMIC ISSUES JANUARY 27 1999:
1. CHRISTMAS BONUS
2. RICE SUBSIDY and RETIREMENT BENEFITS for RETIREES
3. EMPLOYEES' COOPERATIVE
4. GHSIP, HMP BENEFITS FOR DEPENDENTS and HOUSING EQUITY LOAN
5. SIGNING BONUS
6. RED-CIRCLE-RATE ALLOWANCE
7. SICK LEAVE RESERVE OF 15 DAYS
9. HIGH VOLTAGE/HIGH POLE/TOWING ALLOWANCE
10. BENEFITS FOR COLLECTORS
Issue: 1. Whether the decisions of the Secretary of labor on economic issues are
proper.
2. Whether the retroactivity set by the Secretary of labor is correct?
Decision:
1999
The Secretary of Labor disregarded and misappreciated evidence, particularly with
respect to the wage award. The Secretary apparently also acted arbitrarily and even
whimsically in considering several legal points; even the Solicitor General himself
considered that the Secretary gravely abused his discretion on at least three major
points; (a) on the signing bonus issue; (b) on the inclusion of confidential employee in
the rank and file bargaining unit, and (c) in mandating a union security closed-shop
regime in the bargaining unit.
2000
Wherefore , the petition is granted and the orders of public respondent Secretary of
Labor dated August 19, 1996 and December 28, 1996 are set aside to the extent set
forth above. The parties are directed to execute a CBA incorporating the terms and
conditions contained in the unaffected portions of the Secretary of Labors order of
August 19, 1996 and December 28, 1996, and the modification set forth above. The
retirement fund issue is remanded to the Secretary of Labor for reception of evidence
and determination of the legal personality of the MERALCO retirement fund. As
correctly held in our Decision dated January 27, 1999, the cited report is a mere
newspaper account and not even a commercial list. At most, it is but an analysis or
opinion which carries no persuasive weight for purposes of this case as no sufficient
figures to support it were presented. Neither did anybody testify to its accuracy. It
cannot be said that businessmen generally rely on news items such as this in their
occupation. Besides, no evidence was presented that the publication was regularly
prepared by a person in touch with the market and that it is generally regarded as
trustworthy and reliable. Absent extrinsic proof of their accuracy, these reports are not
admissible. In the same manner, newspapers containing stock quotations are not
admissible in evidence when the source of the reports is available. With more reason,
mere analyses or projections of such reports cannot be admitted. In particular, the
source of the report in this case can be easily made available considering that the same
is necessary for compliance with certain governmental requirements.
DECISION
1999:
NO. CBA should be effective for a term of 2 years from December 28, 1996 (the date of
the Secretary of Labor’s decision) up to December 27, 1999. What the law additionally
requires is that a CBA must be re-negotiated within 3 years “after its execution.” It is in
this re-negotiation that gives rise to the present CBA deadlock. ● If no agreement is
reached within 6 months from the expiry date of the 3 years that follow the CBA
execution, the law expressly gives the parties—not anybody else—the discretion to fix
the effectivity of the agreement. PRINCIPLE OF HOLD OVER- in the absence of a new
CBA, the parties must maintain the status quo and must continue in full force and effect
the terms and conditions of the existing agreement until a new agreement is reached.51
Remedy for lapse in Art. 253-A. the law prevents the existence of a gap in the
relationship between the collective bargaining parties. In the absence of an agreement
between the parties, then, an arbitrated CBA takes on the nature of any judicial or
quasi-judicial award; it operates and may be executed only respectively unless there are
legal justifications for its retroactive application. Consequently, we find no sufficient legal
ground on the other justification for the retroactive application of the disputed CBA, and
therefore hold that the CBA should be effective for a term of 2 years counted from
December 28, 1996 (the date of the Secretary of Labor’s disputed order on the parties’
motion for reconsideration) up to December 27, 1999.
DECISION 2000:
YES. The period is herein set at two (2) years from December 1, 1995 to November 30,
1997 (there was an agreement implied through MERALCO’s acts) Collective Bargaining
Agreement arbitral awards granted after six months from the expiration of the last
Collective Bargaining Agreement shall retroact to such time. Agreed upon by both
employer and the employees or their union. In the absence of such an agreement as to
retroactivity, to the first day after the six-month period following the expiration of the last
day of the Collective Bargaining Agreement should there be one. In the absence of a
Collective Bargaining Agreement, the Secretary’s determination of the date of
retroactivity as part of his discretionary powers over arbitral awards shall control. The
agreement of the parties need not be categorically stated for their acts may be
considered in determining the duration of retroactivity. By petitioner’s own actions, the
Court sees no reason to retroact the subject CBA awards to a different date. The period
is herein set at two (2) years from December 1, 1995 to November 30, 1997. ● The
petitioner did not dispute the allegation that in the past CBA arbitral awards, the
Secretary granted retroactivity commencing from the period immediately following the
last day of the expired CBA. Letter of petitioner’s Chairman of the Board and its
President addressed to their stockholder: CBA covering the period December 1, 1995 to
November 30, 1997. The proposed CBA MERALCO gave MEWA covering the same
period inclusive.

G.R. No. 124224. March 17, 2000.

NEW PACIFIC TIMBER & SUPPLY COMPANY, CO., INC., Petitioner VS NATIONAL
LABOR RELATIONS COMMISSION, MUSIB M. BUAT, LEON G. GONZAGA, JR., ET
AL., NATIONAL FEDERATION OF LABOR, MARIANO AKILIT and 350 OTHERS,
Respondents.
FACTS: The National Federation of Labor (NFL, for brevity) was certified as the sole
and exclusive bargaining representative of all the regular rank-and-file employees of
New Pacific Timber & Supply Co., Inc. (hereinafter referred to as petitioner Company).
As such, NFL started to negotiate for better terms and conditions of employment for the
employees in the bargaining unit which it represented. However, the same was
allegedly met with stiff resistance by petitioner Company, so that the former was
prompted to file a complaint for unfair labor practice (ULP) against the latter on the
ground of refusal to bargain collectively.
Thru a complaint for ULP against the Company, the Labor arbiter declared the CBA
proposals submitted by NFL as the CBA between the regular rank-and-file employees in
the bargaining unit and the Company.
The Company was also directed to pay the 142 employees entitled to the aforesaid
benefits the respective amounts due them under the CBA consisting of wage increases,
housing allowances, bonuses, etc. in the exclusion of 186 other employees.
In a petition for relief, it was declared that the 186 excluded employees “form part and
parcel of the then existing rank-and-file bargaining unit” and were, therefore, entitled to
the benefits under the CBA.
Petitioner argues that the private respondents are not entitled to the benefits under the
CBA because employees hired after the term of a CBA are not parties to the agreement,
and therefore, may not claim benefits thereunder, even if they subsequently become
members of the bargaining unit.
As for the term of the CBA, petitioner maintains that Article 253 of the Labor Code refers
to the continuation in full force and effect of the previous CBA’s terms and conditions. By
necessity, it could not possibly refer to terms and conditions which, as expressly
stipulated, ceased to have force and effect.
According to petitioner, the provision on wage increase in the 1981 to 1984 CBA
between petitioner Company and NFL provided for yearly wage increases. Logically,
these provisions ended in the year 1984—the last year that the economic provisions of
the CBA were, pursuant to contract and law, effective. Petitioner claims that there is no
contractual basis for the grant of CBA benefits such as wage increases in 1985 and
subsequent years, since the CBA stipulates only the increases for the years 1981 to
1984.
ISSUES: May the term of a Collective Bargaining Agreement (CBA) as to its economic
provisions be extended beyond the term expressly stipulated therein, and, in the
absence of a new CBA, even beyond the three-year period provided by law? Are
employees hired after the stipulated term of a CBA entitled to the benefits provided
thereunder?
DECISION: Yes. As stated in Article 253 of the LC: Xxx It shall be the duty of both
parties to keep the status quo and to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day period and/or until a new
agreement is reached by the parties. (Italics supplied.) It is clear from the above
provision of law that until a new CBA has been executed by and between the parties,
they are duty- bound to keep the status quo and to continue in full force and effect the
terms and conditions of the existing agreement. The law does not provide for any
exception nor qualification as to which of the economic provisions of the existing
agreement are to retain force and effect; therefore, it must be understood as
encompassing all the terms and conditions in the said agreement. In the case at bar, no
new agreement was entered into by and between petitioner Company and NFL pending
appeal of the decision in NLRC; nor were any of the economic provisions and/or terms
and conditions pertaining to monetary benefits in the existing agreement modified or
altered. Therefore, the existing CBA in its entirety, continues to have legal effect. YES.
When a collective bargaining contract is entered into by the union representing the
employees and the employer, even the non-member employees are entitled to the
benefits of the contract. To accord its benefits only to members of the union without any
valid reason would constitute undue discrimination against nonmembers. It is even
conceded that a laborer can claim benefits from a CBA entered into between the
company and the union of which he is a member at the time of the conclusion of the
agreement, after he has resigned from said union. In the same vein, the benefits under
the CBA in the instant case should be extended to those employees who only became
such after the year 1984. To exclude them would constitute undue discrimination and
deprive them of monetary benefits they would otherwise be entitled to under a new
collective bargaining contract to which they would have been parties. Since in this
particular case, no new agreement had been entered into after the CBA’s stipulated
term, it is only fair and just that the employees hired thereafter be included in the
existing CBA. This is in consonance with our ruling that the terms and conditions of a
collective bargaining agreement continue to have force and effect beyond the stipulated
term when no new agreement is executed by and between the parties to avoid or
prevent the situation where no collective bargaining agreement at all would govern
between the employer company and its employees. SO ORDERED
DLSU vs DLSUEA, GR 109002 &110072, April 12, 2000

G.R. No. 109002 April 12, 2000

DELA SALLE UNIVERSITY, petitioner,

vs.
DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION (DLSUEA) and BUENAVENTURA
MAGSALIN, respondents.

x-----------------------x

G.R. No. 110072 April 12, 2000

DELA SALLE UNIVERSITY EMPLOYEES ASSOCIATION-NATIONAL FEDERATION OF TEACHERS

AND EMPLOYEES UNION (DLSUEA-NAFTEU), petitioner,
vs.
DELA SALLE UNIVERSITY and BUENAVENTURA MAGSALIN, respondents.

FACTS

● DLSU and DLSUEA-NEAFTEU (union), composed of the regular non-academic

rank and file employees, entered into a CBA with a life span of 3 years.
● During the freedom period (60 days before the expiration of the CBA), the Union
initiated negotiations with DLSU for a new CBA but turned out unsuccessful. The
Union then filed a Notice of Strike with the NCMB.
● After several conciliation-mediation meetings, 5/11 issues raised in the Notice of
Strike were resolved by the parties. A partial CBA was thereafter executed.
● the parties entered into a submission agreement, identifying the six unresolved
issues for arbitration:
o scope of the bargaining unit, (2) union security clause, (3) security of tenure,
(4) salary increases for the third and fourth years [this should properly read
second and third years] 9 of the collective bargaining agreement, (5)
indefinite union leave, reduction of the union president’s workload, special
leave, and finally, (6) duration of the agreement.
● Buenaventura Magsalin, the voluntary arbitrator, ruled on the issues:
1) The Computer Operators assigned at the CSC (Computer Services Center)
should be included as members of the bargaining unit, just like any other
computer operators in the unit. They are doing clerical and routinary work,
and not setting management policies for DLSU. While they may have access
to vital information regarding the University’s operations, they are not
necessarily confidential. The discipline officers are also rank-and-file on the
basis of the nature of their job. For the employees of the College of St.
Benilde, the College has a personality separate and distinct from DLSU and
thus their employees are outside the bargaining unit of DLSU.
 2) A union shop clause is not a restriction on the employee’s right of freedom of
association but rather a valid form of union security while the CBA is in force
and in accordance with the Constitutional policy to promote unionism and
collective bargaining and negotiations. It should be incorporated in their CBA.
3) With respect to the “last-in-first-out” method in case of retrenchment and
transfer to other school or units, the elementary right and prerogative of the
management of the University to select and/or choose its employees, a right
equally recognized by the Constitution and the law. The employer, in the
exercise of this right, can adopt valid and equitable grounds as basis for lay-
off or separation, like performance, qualifications, competence, etc. Similarly,
the right to transfer or reassign an employee is an employer’s exclusive right
and prerogative.
4) The proposed budget of DLSU for SY92-93 could not sufficiently cope up with
the demand for increases by the Union. With the present financial condition of
the University, it cannot now be required to grant another round of increases
through collective bargaining without exhausting its coffers for other legitimate
needs of the University as an institution
5) Unionism is no valid reason for the reduction of the workload of its President.
There is no sufficient justification to grant an indefinite leave
6) The duration provided in the CBA was a binding agreement between the
parties. Notwithstanding the Submission Agreement, the original intention of
the parties must be respected. But, the economic provisions of the CBA shall
be re-opened after the 3rd year in compliance with the Labor Code.
● DLSU filed a petition for certiorari with TRO assailing the decision of the
voluntary arbitrator for being rendered in grave abuse of discretion. The Union
also filed a petition for certiorari in another division. The first and second
divisions separately resolved to require the respondents in each petition to file
their respective Comments.
● The SolGen agreed with the voluntary arbitrator’s points except the one involving
the employees of the College of St. Benilde, and they should be included in the
bargaining unit.

ISSUE

Whether or not the voluntary arbitrator committed grave abuse of discretion in rendering
the assailed decision, particularly, in resolving the following issues: (1) whether the
computer operators assigned at the University's Computer Services Center and the
University's discipline officers may be considered as confidential employees and should
therefore be excluded from the bargaining unit which is composed of rank and file
employees of the University, and whether the employees of the College of St. Benilde...
should also be included in the same bargaining unit; (2) whether a union shop clause
should be included in the parties' collective bargaining agreement, in addition to the
existing maintenance of membership clause; (3) whether the denial of the Union's
proposed "last-in-first-out" method of laying-off employees, is proper; (4) whether the
ruling that on the basis of the University's proposed budget, the University can no longer
be required to grant a second round of wage increases for the school years 1991-92
and 1992-93 and charge the... same to the incremental proceeds, is correct; (5) whether
the denial of the Union's proposals on the deloading of the union president, improved
leave benefits and indefinite union leave with pay, is proper; (6) whether the finding that
the multi-sectoral committee in the University is the legitimate group which determines
and scrutinizes the annual salary increases and fringe benefits of the employees of the
University, is correct; and (7) whether the ruling that the 70% share in the incremental
tuition proceeds is the only source of salary... increases and fringe benefits of the
employees, is proper.

DECISION

WHEREFORE, premises considered, the petitions in these consolidated cases, G.R.

No. 109002 and G.R. No. 110072 are partially GRANTED. The assailed decision dated
January 19, 1993 of voluntary arbitrator Buenaventura Magsalin is hereby AFFIRMED
with the modification that the issue on salary increases for the second and third years of
the collective bargaining agreement be REMANDED to the voluntary arbitrator for
definite resolution within one month from the finality of this Decision, on the basis of the
externally audited financial statements of the University already submitted by the Union
before the voluntary arbitrator and forming part of the records.

G.R. No. 106830 November 16, 1993

R. TRANSPORT CORPORATION, petitioner,

vs.
HON. BIENVIENIDO E. LAGUESMA. in his capacity as Undersecretary of the Department of
Labor and Employment, CHRISTIAN LABOR ORGANIZATION OF THE PHILIPPINES (CLOP),
NATIONAL FEDERATION OF LABOR UNIONS (NAFLU), and ASSOCIATED LABOR UNIONS
(ALU-TUCP), respondents.

Facts:
● The case involves a petition for certiorari filed by a petitioner seeking to set
aside the Resolutions of the Undersecretary of the Department of Labor
and Employment (DOLE) dated July 22, 1992, and August 25, 1992.
● On January 4, 1991, the respondent Christian Labor Organization of the
Philippines (CLOP) filed a petition for certification election with the Med-
Arbiter Unit of the DOLE.
● The first petition for certification election was dismissed on April 8, 1991,
by Med-Arbiter A. Dizon on the grounds that it did not include all eligible
employees and excluded certain categories of employees.
● On May 10, 1991, CLOP filed a second petition for certification election
that included all rank and file employees.
● The petitioner filed a motion to dismiss the second petition, claiming res
judicata as the first petition was dismissed.
● On July 3, 1991, Med-Arbiter R. Parungo ordered the conduct of a
certification election.
● The Associated Labor Unions (ALU-TUCP) filed a motion for intervention,
and the National Federation of Labor Unions (NAFLU) filed a separate
petition for certification election.
● The petitioner appealed to the DOLE Secretary, who affirmed the Med-
Arbiter's decision in a resolution dated July 22, 1992.
● On July 31, 1992, petitioner filed a Motion for Reconsideration, again
stressing the principle of res judicata. Petitioner further argued that the
second petition for a certification election by respondent CLOP, NAFLU
and ALU-TUCP were barred at least for a period of... one year from the
time the first petition of CLOP was dismissed On August 25, 1991,
Undersecretary Laguesma denied the motion for reconsideration
● On September 29, 1992, Undersecretary Laguesma in a resolution denied
the motion to suspend the conduct of the certification election.
● On October 14, 1992, petitioner filed a motion for reconsideration of the
Resolution dated September 29, 1992 which was subsequently denied by
Undersecretary Laguesma

Petitioner filed a Comment and Objection to the Order dated October 29,
1992 with Urgent Motion to Dismiss the Petition for Certification Election.
Without waiting for the resolution of the motion to dismiss, petitioner resorted
to this Court by way of the instant special... civil action.
Issues:

● Whether the principle of res judicata applies, given the dismissal of the first
petition for certification election.
● Whether the second petition, which included all rank and file employees,
should have been filed within a year from the dismissal of the first petition,
as per the rules.
● Employment status of the members of respondent CLOP who joined the
strike must first be resolved before a certification election can be
conducted.

Decision:

● The court dismissed the petitioner's claims and upheld the decisions of the
DOLE. The court's findings include:
● Res Judicata: The court ruled that the principle of res judicata does not
apply because the parties in the first and second actions were not
identical. The first petition was dismissed due to its defective composition
of the proposed bargaining unit, while the second petition rectified this
mistake by including all relevant employees.
● Timeliness of the Second Petition: The court clarified that the rule
regarding the one-year period applies to "final certification election results."
Since the first petition was dismissed and no actual certification election
was conducted, the rule did not come into effect.
● Employment Status of Striking Employees: The court mentioned that the
employees who participated in the strike still legally held their employment
status, and their ability to vote in a certification election should not be
affected until issues related to their dismissal are resolved by the National
Labor Relations Commission (NLRC).
● Premature Resort to Judicial Action: The court noted that the petitioner's
resort to judicial action was premature because their motion to dismiss was
still pending before the Undersecretary of Labor. Thus, the petitioner was
found guilty of forum-shopping by pursuing the same cause of action in two
different fora.
The court ultimately dismissed the petition, upholding the DOLE's resolutions
and emphasizing that the choice of a collective bargaining agent is the sole
concern of the employees, and the employer has no right to interfere in the
election