LABOR LAW REVIEW CASE MATRIX IV
Duty to Bargain Collectively
TITLE FACTS
Kiok Loy v. - In a certification election, the
NLRC Pambansang Kilusang Paggawa
(Union), a legitimate late labor
federation, won and was
subsequently certified by the BLR as
the sole and exclusive bargaining
agent of the R&F employees of
Sweden Ice Cream Plant (Company).
- The Union twice gave the Company
copies of its proposed CBA, and
requested for its counter proposal,
but both requests were ignored.
- The Union then filed a Notice of
Strike with the BLR. All attempts
towards an amicable settlement
failed.
- On several scheduled hearings, the
Company failed to appear. It was later
adjudged guilty of unjustified refusal
to bargain.
- The Company now contends that its
right to procedural due process has
been violated when it was precluded
from presenting further evidence in
support of its stand and when its
request for further postponement was
denied.
Standard - The Bank and the Union signed a five-
Chartered year CBA with a provision to
Bank renegotiate the terms thereof on the
Employees third year. Prior to the expiration of
Union v. the three-year period but within the
Confesor sixty-day freedom period, the Union
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ISSUE/S HELD
- WON the Company - YES. From the over-all conduct of
is guilty of ULP for petitioner company in relation to the
unjustifiably task of negotiation, there can be no
refusing to bargain. doubt that the Union has a valid
cause to complain against its
(Company's) attitude, the totality of
which is indicative of the latter's
disregard of, and failure to live up to,
what is enjoined by the Labor Code to
bargain in good faith.
- It has been indubitably established
that (1) respondent Union was a duly
certified bargaining agent; (2) it
made a definite request to bargain,
accompanied with a copy of the
proposed Collective Bargaining
Agreement, to the Company not only
once but twice which were left
unanswered and unacted upon; and
(3) the Company made no counter
proposal whatsoever all of which
conclusively indicate lack of a sincere
desire to negotiate.
- Whether or not the - NO. The circumstances that occurred
Union was able to during the negotiation do not show
substantiate its that the suggestion made by Diokno
claim of unfair labor to Divinagracia is an anti-union
practice against the conduct from which it can be inferred
Bank arising from that the Bank consciously adopted
DOCTRINE
- Collective bargaining which is
defined as negotiations
towards a collective
agreement, is one of the
democratic frameworks under
the Labor Code, designed to
stabilize the relation between
labor and management and to
create a climate of sound and
stable industrial peace.
- It is a mutual responsibility of
the employer and the Union
and is characterized as a legal
obligation. So much so that
Art. 249 (g) of the LC makes it
an ULP for an employer to
refuse to meet and convene
promptly and expeditiously in
good faith for the purpose of
negotiating an agreement with
respect to wages, hours of
work, and all other terms and
conditions of employment
including proposals for
adjusting any grievance or
question arising under such an
agreement and executing a
contract incorporating such
agreement, if requested by
either party.
- Article 248(a) of the Labor
Code, considers it an unfair
labor practice when an
employer interferes, restrains
or coerces employees in the
exercise of their right to self-
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 initiated the negotiations.
- Before the commencement of the
negotiation, the Union, through
Divinagracia, suggested to the Banks
Human Resource Manager and head
of the negotiating panel, Diokno, that
the bank lawyers should be excluded
from the negotiating team. The Bank
acceded. Meanwhile, Diokno
suggested to Divinagracia that Umali,
Jr., the President of the NUBE, the
federation to which the Union was
affiliated, be excluded from the
Unions negotiating panel. However,
Umali was retained as a member
thereof.
- Except for the provisions on signing
bonus and uniforms, the Union and
the Bank failed to agree on the
remaining economic provisions of the
CBA. The Union declared a deadlock
and filed a Notice of Strike before the
National Conciliation and Mediation
Board (NCMB).
- On the other hand, the Bank filed a
complaint for Unfair Labor Practice
(ULP) and Damages against the
Union. The Bank alleged that the
Union violated its duty to bargain, as
it did not bargain in good faith. It
contended that the Union demanded
"sky high economic demands,"
indicative of blue-sky bargaining.
Further, the Union violated its no
strike- no lockout clause by filing a
notice of strike before the NCMB.
Considering that the filing of notice of
strike was an illegal act, the Union
officers should be dismissed.
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the latters alleged such act to yield adverse effects on
"interference" with the free exercise of the right to self-
its choice of organization and collective
negotiator. (The bargaining of the employees,
Union bases its especially considering that such was
claim of undertaken previous to the
interference on the commencement of the negotiation
alleged suggestions and simultaneously with
of Diokno to Divinagracias suggestion that the
exclude Umali from bank lawyers be excluded from its
the Unions negotiating panel.
negotiating panel.) - The records show that after the
initiation of the collective bargaining
process, with the inclusion of Umali
in the Unions negotiating panel, the
negotiations pushed through. The
complaint was made only after a
deadlock was declared by the Union.
- It is clear that such ULP charge was
merely an afterthought. The
accusation occurred after the
arguments and differences over the
economic provisions became heated
and the parties had become
frustrated. It happened after the
parties started to involve
personalities. As the public
respondent noted, passions may rise,
and as a result, suggestions given
- Whether the Bank under less adversarial situations may
was guilty of be colored with unintended
surface bargaining; meanings. Such is what appears to
making bad faith have happened in this case.
non-economic - NO. The minutes of meetings do not
proposals show that the Bank had any intention
of violating its duty to bargain with
the Union. The minutes of the
meetings show that both the Bank
and the Union exchanged economic
and non-economic proposals and
counter-proposals.
- The Union has not been able to show
organization or the right to
form association. The right to
self-organization necessarily
includes the right to collective
bargaining.
- Parenthetically, if an employer
interferes in the selection of its
negotiators or coerces the
Union to exclude from its
panel of negotiators a
representative of the Union,
and if it can be inferred that
the employer adopted the said
act to yield adverse effects on
the free exercise to right to
self-organization or on the
right to collective bargaining
of the employees, ULP under
Article 248(a) in connection
with Article 243 of the Labor
Code is committed.
- In order to show that the
employer committed ULP
under the Labor Code,
substantial evidence is
required to support the claim.
- Surface bargaining is defined
as "going through the motions
of negotiating" without any
legal intent to reach an
agreement. The resolution of
surface bargaining allegations
never presents an easy issue.
The determination of whether
a party has engaged in
unlawful surface bargaining is
usually a difficult one because
it involves, at bottom, a
question of the intent of the
party in question, and usually
such intent can only be
inferred from the totality of
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 that the Bank had done acts, both at the challenged partys conduct
and away from the bargaining table, both at and away from the
which tend to show that it did not bargaining table. It involves
want to reach an agreement with the the question of whether an
Union or to settle the differences employers conduct
between it and the Union. Admittedly, demonstrates an unwillingness
the parties were not able to agree to bargain in good faith or is
- Whether the bank and reached a deadlock. However, it merely hard bargaining.
was justified in its is emphasized that the duty to
refusal to furnish bargain "does not compel either party
the Union with to agree to a proposal or require the
copies of the making of a concession." Hence, the
relevant data; parties failure to agree did not
amount to ULP under Article 248(g)
for violation of the duty to bargain.
- YES. While the refusal to furnish
requested information is in itself an
- Whether the Union unfair labor practice, and also
was guilty of blue supports the inference of surface
sky bargaining. bargaining, in the case at bar, Umali,
in a meeting requested the Bank to
validate its guestimates on the data of
the rank and file. However, Umali
failed to put his request in writing as
provided for in Article 242(c) of the
Labor Code.
- No. The Union is not guilty of ULP for
engaging in blue-sky bargaining or
making exaggerated or unreasonable
proposals. The Bank failed to show
that the economic demands made by
the Union were exaggerated or
unreasonable. The minutes of the
meeting show that the Union based
its economic proposals on data of
rank and file employees and the
prevailing economic benefits received
by bank employees from other foreign
banks doing business in the
Philippines and other branches of the
Bank in the Asian region.
MERALCO v. - Manila Electric Company (MERALCO) - WON the CBA - Article 253-A serves as the guide in - Article 253-A. Terms of a
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Quisumbing and the Meralco Workers Association
(1999) (MEWA) agreed to re-negotiate the
terms and conditions of their existing
1992-1997 Collective Bargaining
Agreement (CBA) covering the last
two years starting from 1 December
1995 to 30 November 1997.
- Negotiating panels were formed but
failed to arrive at terms and
conditions acceptable to both of
them.
- MEWA subsequently filed a notice of
strike with the NCMB on the grounds
of bargaining deadlock and unfair
labor practices.
- MERALCO, on the other hand, filed
an urgent petition with the DOLE
praying that the Secretary assume
jurisdiction over the labor dispute
and to enjoin the striking employees
to go back to work.
- The Labor Secretary assumed
jurisdiction over the labor dispute
and on 19 August 1996 resolved the
same, issuing an order which bridged
the differences between the parties
on the terms and conditions of the
CBA.
- MERALCO challenged, among others,
the Labor Secretarys order declaring
the CBA to be effective December
1995 instead of 19 August 1996
when the Secretary resolved the
dispute.
- It also raised issues as regards the
stipulation on signing bonus, the
inclusion of confidential employees in
the rank and file bargaining unit; and
the mandatory establishment of a
security closed-shop regime in the
bargaining unit.
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should take effect determining when the effectivity of
from the time of the the CBA is to take effect; it provides
Labor Secretarys that the representation aspect of the
resolution of the CBA would be for a term of five (5)
labor dispute or the years.
start of the period - Under the terms of the said provision,
subject of the re- it is clear that the 5-year term
negotiation between requirement is specific to the
the parties. representation aspect.
- What the law additionally requires is
that a CBA must be re-negotiated
within 3 years after its execution.
- If no agreement is reached within 6
months after the expiry 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.
- The law, however, does not
specifically cover the situation where
6 months have elapsed but no
agreement has been reached with
respect to effectivity.
- In this eventuality, the Court held that
any provision of law should then
apply for the law abhors a vacuum.
- One such provision is the principle
of hold over; that 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.
- Another legal principle is that in
the absence of agreement between
the parties, an arbitrated CBA takes
on the nature of any judicial or quasi-
judicial award; it operates and may be
executed only prospectively unless
there are legal justifications for its
retroactive application.
- It is held that the CBA should be
Collective Bargaining
Agreement. Any Collective
Bargaining Agreement that the
parties may enter into shall,
insofar as the representation
aspect is concerned, be for a
term of five (5) years. No
petition questioning the
majority status of the
incumbent bargaining agent
shall be entertained and no
certification election shall be
conducted by the Department
of Labor and Employment
outside the sixty-day period
immediately before the date of
expiry of such five-year term of
the Collective Bargaining
Agreement. All the other
provisions of the Collective
Bargaining Agreement shall be
renegotiated not later than
three (3) years after its
execution. Any agreement on
such other provisions of the
Collective Bargaining
Agreement entered into within
six (6) months from the date of
the expiry of the term of such
other provisions as fixed in
such Collective Bargaining
Agreement, shall retroact to
the day immediately following
such date. If any such
agreement is entered into
beyond six months, the parties
shall agree on the duration of
the retroactivity thereof. In
case of a deadlock in the
renegotiation of the collective
bargaining agreement, the
parties may exercise their
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 effective for a term of 2 years counted rights under this Code.
from 28 December 1996 (the date of
the Labor Secretarys disputed order
on the parties MR) up to 27
December 1999.
MERALCO v. - This is a reconsideration of the first - When should the - December 1, 1995. -
Quisumbing decision promulgated January 27, new CBA take - The law contemplates retroactivity
(22 February 1999. effect? whether the agreement be entered
2000) into before or after the said six-month
period.
- The SC in this case, unlike the
previous case found an agreement
between the parties as to when the
new CBA is to take effect. The
agreement was implied from the acts
of the parties, more particularly that
of Meralco. Said acts are as follows:
The letter of MERALCO'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," as indicative of
MERALCO's recognition that the
CBA award covers the said period.
MERALCOs negotiating panel
transmitted to the Union a copy of
its proposed CBA covering the
same period inclusive
MERALCO 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 MERALCO'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
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MERALCO v. - MERALCO filed a Motion for
Quisumbing Partial Modification of the Resolution
(01 August dated 22 February 2000.
2000)
General - General Milling Corporation
Milling Corp. (GMC) employed 190 workers who
v. CA were all members of the Union.
- GMC and the union concluded a
collective bargaining agreement
(CBA) which included the issue of
representation effective for a term of
three years. The CBA was effective
for three years retroactive to
December 1, 1988. Hence, it would
expire on November 30, 1991.
- On November 29, 1991, a day
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(2) years from December 1, 1995 to
November 30, 1997.
- When should - The arbitral award shall retroact -
the retroactivity of to the 2-year period from 01 June
the arbitral award 1996 to 31 May 1998.
be effective. - Upon a reconsideration of the
Decision, this Court issued the
assailed Resolution which ruled that
where an arbitral award granted
beyond six months after the
expiration of the existing CBA, and
there is no agreement between the
parties as to the date of effectivity
thereof, the arbitral award shall
retroact to the first day after the six-
month period following the expiration
of the last day of the CBA. In the
dispositive portion, however, the
period to which the award shall
retroact was inadvertently stated as
beginning on December 1, 1995 up to
November 30, 1997.
- This Court, therefore, maintains
the foregoing rule in the assailed
Resolution pro hac vice. It must be
clarified, however, that consonant
with this rule, the two-year effectivity
period must start from June 1, 1996
up to May 31, 1998, not December 1,
1995 to November 30, 1997.
- Whether GMC - The law mandates that the - The employers refusal to
is guilty of unfair representation provision of a CBA make a counter-proposal to the
labor practice for should last for five years. The relation unions proposal for CBA
violating the duty to between labor and management negotiation is an indication of
bargain collectively should be undisturbed until the last its bad faith. Where the
and/or interfering 60 days of the fifth year. Hence, it is employer did not even bother
with the right of its indisputable that when the union to submit an answer to the
employees to self- requested for a renegotiation of the bargaining proposals of the
organization economic terms of the CBA on union, there is a clear evasion
November 29, 1991, it was still the of the duty to bargain
certified collective bargaining agent collectively.
of the workers, because it was - Art. 253 mandates the parties
6
 before the expiration of the CBA, the
union sent GMC a proposed CBA,
with a request that a counter-
proposal be submitted within ten (10)
days.
- As early as October 1991,
however, GMC had received
collective and individual letters from
workers who stated that they had
withdrawn from their union
membership, on grounds of religious
affiliation and personal differences.
Believing that the union no longer
had standing to negotiate a CBA,
GMC did not send any counter-
proposal.
- On December 16, 1991, GMC
wrote a letter to the unions officers
and stated that it felt there was no
basis to negotiate with a union which
no longer existed, but that
management was nonetheless always
willing to dialogue with them on
matters of common concern and was
open to suggestions on how the
company may improve its operations.
- In answer, the union officers
wrote a letter disclaiming any
massive disaffiliation or resignation
from the union and submitted a
manifesto, signed by its members,
stating that they had not withdrawn
from the union.
- Later, GMC dismissed Marcia
Tumbiga, a union member, on the
ground of incompetence. The union
protested and requested GMC to
submit the matter to the grievance
procedure provided in the CBA. GMC,
however, advised the union to "refer
to our letter dated December 16,
1991."
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seeking said renegotiation within five to keep the status quo while
(5) years from the date of effectivity they are still in the process of
of the CBA on December 1, 1988. The working out their respective
unions proposal was also submitted proposal and counter proposal.
within the prescribed 3-year period The general rule is that when a
from the date of effectivity of the CBA already exists, its
CBA, albeit just before the last day of provision shall continue to
said period. It was obvious that GMC govern the relationship
had no valid reason to refuse to between the parties, until a
negotiate in good faith with the new one is agreed upon. The
union. For refusing to send a counter- rule necessarily presupposes
proposal to the union and to bargain that all other things are equal.
anew on the economic terms of the That is, that neither party is
CBA, the company committed an guilty of bad faith. However,
unfair labor practice under Article when one of the parties abuses
248 of the Labor Code. this grace period by purposely
- Under Article 252, both parties delaying the bargaining
are required to perform their mutual process, a departure from the
obligation to meet and convene general rule is warranted.
promptly and expeditiously in good
faith for the purpose of negotiating
an agreement. The union lived up to
this obligation when it presented
- Did GMC proposals for a new CBA to GMC
interfere with the within three (3) years from the
employees right to effectivity of the original CBA. But
self-organization? GMC failed in its duty under Article
252. What it did was to devise a
flimsy excuse, by questioning the
existence of the union and the status
of its membership to prevent any
negotiation.
- YES. The CA found that the
letters signed by the union members
signifying their resignation from the
- Did the CA union clearly indicated that GMC
gravely abuse its exerted pressure on its employees.
discretion when it The records show that GMC
imposed on GMC presented these letters to prove that
the draft CBA the union no longer enjoyed the
proposed by the support of the workers. The fact that
union for two years the resignations of the union
7
 - Thus, the union fileda complaint
against GMC for unfair labor practice
on the part of GMC for: (1) refusal to
bargain collectively; (2) interference
with the right to self-organization;
and (3) discrimination.
Capitol - The respondent union the exclusive
Medical bargaining representative of the R&F
Center v. employees of CMC.
Trajano - The union sent a letter to CMC
requesting a negotiation of their CBA.
- In its reply, CMC challenged the
legitimacy of the union and refused to
bargain with it. It then filed a petition
for cancellation of the unions
certificate of registration.
- The union then files a notice of strike
with the NCMB, alleging that CMCs
refusal to bargain constituted ULP.
- The DOLE Secretary assumed
jurisdiction over the labor dispute
and ordered the striking workers to
return to work.
- The petition to cancel the unions
registration was dismissed by the
Regional Director.
- The CA affirmed the decision of the
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commencing from members occurred during the
the expiration of the pendency of the case before the labor
original CBA? arbiter shows GMCs desperate
attempts to cast doubt on the
legitimate status of the union.
- NO. It would be unfair to the
union and its members if the terms
and conditions contained in the old
CBA would continue to be imposed on
GMCs employees for the remaining
two (2) years of the CBAs duration.
We are not inclined to gratify GMC
with an extended term of the old CBA
after it resorted to delaying tactics to
prevent negotiations. Since it was
GMC which violated the duty to
bargain collectively, it had lost its
statutory right to negotiate or
renegotiate the terms and conditions
of the draft CBA proposed by the
union.
- WON the petition - NO. The pendency of a petition for - The pendency of a petition for
for the cancellation cancellation of union registration cancellation of union
of unions certificate does not preclude collective registration does not preclude
of registration bargaining. collective bargaining.
involves a - If a certification election may still be
prejudicial question ordered despite the pendency of a
that should first be petition to cancel the unions
settled before the registration certificate, more so
Secretary of Labor should the collective bargaining
could order the process continue despite its
parties to bargain pendency.
collectively. - We must emphasize that the majority
status of the respondent Union is not
affected by the pendency of the
Petition for Cancellation pending
against it. Unless its certificate of
registration and its status as the
certified bargaining agent are
revoked, the Hospital is, by express
provision of the law, duty bound to
collectively bargain with the Union.
8
 DOLE, and ordered CMC to
collectively bargain with the
employees.
Bargaining Unit
TITLE FACTS
De La Salle - On December 1986, Dela Salle
University v. University and Dela Salle University
De La Salle Employees Association National
University Federation of Teachers and
Employees Employees Union (DLSUEA-
Association NAFTEU), which is composed of
regular non-academic rank and file
employees, entered into a collective
bargaining agreement with a life span
of three (3) years, that is, from
December 23, 1986 to December 22,
1989.
- 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 agreement 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.
- After several conciliation-mediation
meetings, only five (5) out of the
eleven (11) issues raised in the Notice
of Strike were resolved by the
parties, one of which is the issue
discussed in this matrix. A partial
collective bargaining agreement was
thereafter executed by the parties.
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ISSUE/S HELD DOCTRINE
- Whether or not the - Yes. The Court held that the express - During the freedom period, the
computer operators exclusion of the computer operators parties may not only renew the
and discipline and discipline officers from the existing collective bargaining
officers who were bargaining unit of rank-and-file agreement but may also
previously employees in the 1986 collective propose and discuss
recognized as bargaining agreement does not bar modifications or amendments
confidential any re-negotiation for the future thereto.
employees should inclusion of the said employees in the
be included in the bargaining unit. During the freedom
bargaining unit period, the parties may not only
composed of rank renew the existing collective
and file employees. 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 the Court, it ruled that the
said computer operators and
discipline officers are not confidential
employees. The service record of a
computer operator reveals that his
duties are basically clerical and non-
confidential in nature. As to the
discipline officers, 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.
- Moreover, the Court also held that
the employees of the College of St.
Benilde should be excluded from the
9
 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.

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