LABOR RELATIONS: Azucena Vol.

II
BOOK FIVE shall have the power to set or fix wages,
LABOR RELATIONS rates of pay, hours of work or other terms
and conditions of employment, except as
Title I otherwise provided under this Code. (As
POLICY AND DEFINITIONS amended by Section 3, Republic Act No.
6715, March 21, 1989)
Chapter I ________
POLICY
1. OVERVIEW AND VIEWPOINT
Art. 211. Declaration of Policy.
A. It is the policy of the State: “Labor Standards” refers to the minimum
a. To promote and emphasize the terms and conditions of employment
primacy of free collective which employees are legally entitled to
bargaining and negotiations, and employers must comply with.
including voluntary arbitration,
mediation and conciliation, as “Labor Relations” refers to the
modes of settling labor or industrial interactions between employer and
disputes; employees or their representatives and
the mechanism by which the standards
b. To promote free trade unionism and other terms and conditions of
as an instrument for the employment are negotiated, adjusted and
enhancement of democracy and enforced.
the promotion of social justice and
development; The government labor relations policy is
declared in Art. 211 which is a focused
c. To foster the free and voluntary elaboration of the basic labor policy
organization of a strong and united announced in Art.3 which, in turn, echoes
labor movement; the constitutional mandates. The policy
intends to attain social justice through
d. To promote the enlightenment of industrial peace and progress. The latter
workers concerning their rights and is founded on employee participation and
obligations as union members and collective interactions between employer
as employees; and employees. In Management parlance,
the input is the parties’ rights and duties,
e. To provide an adequate the process is worker’s organization and
administrative machinery for the collective bargaining, and the output is
expeditious settlement of labor or industrial peace and progress towards
industrial disputes; social justice as the end goal.

f. To ensure a stable but dynamic Work stoppage—known as “strike” by

and just industrial peace; and
g. To ensure the participation of
workers in decision and policy-
making processes affecting their
rights, duties and welfare.
B. To encourage a truly democratic
method of regulating the relations
between the employers and employees
by means of agreements freely entered
into through collective bargaining, no
court or administrative agency or official
employees or “lockout” by the employer
—is not favoured in law. It is recognized
as a legal right but regulated as to the
purpose and manner of doing it. Deviation
from the mandatory requirements has
adverse consequences to the violators.
Work stoppage, because it is counter-
productive, is and has to be considered a
measure of last resort.
The principle behind labor unionism in
private industry is that industrial peace
cannot be secured through compulsion by
 LABOR RELATIONS: Azucena Vol. II
law. Relations between private employers
and their employees rest on an 3. WHY WORKERS ORGANIZE
essentially voluntary basis. Subject to the
minimum requirements of wage laws and Self-help through economic action
other labor and welfare legislation, the necessarily requires increasing the
terms and conditions of employment in bargaining power of employees; hence
the unionized private sector are settled one of the basic purposes of a labor union
through the process of collective is to eliminate competition among
bargaining. employees in the labor market.

Because labor relations are primarily
“domestic,” third parties, even the
Government, shy away from meddling, as
much as it can be helped. This is why an
in-house problem solving structure, called
grievance machinery, is a requirement in
CBAs. If this machinery fails, the parties
themselves are free to select any third
party, called voluntary arbitrator, to
resolve their differences.
Three other human desires should be
noted among the forces that led workers
to organize:
(1) One is the desire for job security.
(2) Employees wished to substitute what
we should term “the rule of law” for the
arbitrary and often capricious exercise of
power by the boss.

The laws, as a force that balances the
parties’ rights and obligations, are
admittedly necessary in the industrial
setting.1
2. WORKERS’ ORGANIZATION
(3) Finally, unions helped to give
employees a sense of participation in the
business enterprises of which they are
part—a function of labor unions which
became important as organizations
spread into mass production industries.

A labor or trade union is a combination of The union is the recognized

workmen organized for the ultimate instrumentality and mouthpiece of the
purpose of securing through united action laborers.
the most favourable conditions as regards
wages, hours of labor, conditions of 4. ILO CONVENTION NO. 87
employment, etc., for its members. ________

In the popular sense a labor union is Chapter II

understood to be a completely organized DEFINITIONS
body of dues-paying members, operating
through elected officers and constituting Art. 212. Definitions.
a militant, vital and functioning organ. It a. "Commission" means the National
may be said that while every labor union Labor Relations Commission or any of its
is a labor organization, not every labor divisions, as the case may be, as provided
organization is a labor union. The under this Code.
difference is one of organization,
composition and operation. b. "Bureau" means the Bureau of Labor
Relations and/or the Labor Relations
1 Art. 1700. The relations between capital and labor are Divisions in the regional offices
not merely contractual. They are so impressed with public established under Presidential Decree No.
interest that labor contracts must yield to the common
good. 1, in the Department of Labor.
Art. 19. Every person must, in the exercise of his rights
and in the performance of his duties, act with justice, give c. "Board" means the National
everyone his due, and observe honesty and good faith.
Conciliation and Mediation Board

established under Executive Order No.
126.
d. "Council" means the Tripartite
Voluntary Arbitration Advisory Council
established under Executive Order No.
126, as amended.
e. "Employer" includes any person acting
in the interest of an employer, directly or
indirectly. The term shall not include any
labor organization or any of its officers or
agents except when acting as employer.
f. "Employee" includes any person in the
employ of an employer. The term shall
not be limited to the employees of a
particular employer, unless the Code so
explicitly states. It shall include any
individual whose work has ceased as a
result of or in connection with any current
labor dispute or because of any unfair
labor practice if he has not obtained any
other substantially equivalent and regular
employment.
g. "Labor organization" means any union
or association of employees which exists
in whole or in part for the purpose of
collective bargaining or of dealing with
employers concerning terms and
conditions of employment.
h. "Legitimate labor organization" means
any labor organization duly registered
with the Department of Labor and
Employment, and includes any branch or
local thereof.
i. "Company union" means any labor
organization whose formation, function or
administration has been assisted by any
act defined as unfair labor practice by this
Code.
j. "Bargaining representative" means a
legitimate labor organization whether or
not employed by the employer.
k. "Unfair labor practice" means any
unfair labor practice as expressly defined
by the Code.
LABOR RELATIONS: Azucena Vol. II
l. "Labor dispute" includes any
controversy or matter concerning terms
and conditions of employment or the
association or representation of persons
in negotiating, fixing, maintaining,
changing or arranging the terms and
conditions of employment, regardless of
whether the disputants stand in the
proximate relation of employer and
employee.
m. "Managerial employee" is one who is
vested with the powers or prerogatives to
lay down and execute management
policies and/or to hire, transfer, suspend,
lay-off, recall, discharge, assign or
discipline employees. Supervisory
employees are those who, in the interest
of the employer, effectively recommend
such managerial actions if the exercise of
such authority is not merely routinary or
clerical in nature but requires the use of
independent judgment. All employees not
falling within any of the above definitions
are considered rank-and-file employees
for purposes of this Book.
n. "Voluntary Arbitrator" means any
person accredited by the Board as such or
any person named or designated in the
Collective Bargaining Agreement by the
parties to act as their Voluntary
Arbitrator, or one chosen with or without
the assistance of the National Conciliation
and Mediation Board, pursuant to a
selection procedure agreed upon in the
Collective Bargaining Agreement, or any
official that may be authorized by the
Secretary of Labor and Employment to
act as Voluntary Arbitrator upon the
written request and agreement of the
parties to a labor dispute.
o. "Strike" means any temporary
stoppage of work by the concerted action
of employees as a result of an industrial
or labor dispute.
p. "Lockout" means any temporary refusal
of an employer to furnish work as a result
of an industrial or labor dispute.

q. "Internal union dispute" includes all
disputes or grievances arising from any
violation of or disagreement over any
provision of the constitution and by-laws
of a union, including any violation of the
rights and conditions of union
membership provided for in this Code.
r. "Strike-breaker" means any person who
obstructs, impedes, or interferes with by
force, violence, coercion, threats, or
intimidation any peaceful picketing
affecting wages, hours or conditions of
work or in the exercise of the right of self-
organization or collective bargaining.
s. "Strike area" means the establishment,
warehouses, depots, plants or offices,
including the sites or premises used as
runaway shops, of the employer struck
against, as well as the immediate vicinity
actually used by picketing strikers in
moving to and fro before all points of
entrance to and exit from said
establishment. (As amended by Section 4,
Republic Act No. 6715, March 21, 1989)
________
1. EMPLOYER-EMPLOYEE
RELATIONSHIP ESSENTIAL
The existence of employer-employee
relationship, as explained in Book III, is
determined by the presence of the
following elements, namely:
(a) selection and engagement of the
employee;
(b) payment of wages;
(c) power to dismiss; and
(d) power to control the employee’s
conduct.
The fourth is the most important element.
2. WHO ARE EMPLOYEES
The term “employee”:
(1) shall include any employee
LABOR RELATIONS: Azucena Vol. II
(2) and shall not be limited to the
employee of any particular employer,
unless the Act so explicitly states
otherwise
(3) and shall include any individual
(a) whose work has ceased as a
result of, or in connection with any
current labor dispute
(b) and who has not obtained any
other substantially equivalent and
regular employment.
“Employee” refers to any person working
for an employer. It includes one whose
work has ceased in connection with any
current labor dispute or because of any
unfair labor practice and one who has
been dismissed from work but the legality
of the dismissal is being contested in a
forum of appropriate jurisdiction.
“Employer” refers to any person or entity
who employs the services of others, one
for whom employees work and who pays
their wages or salaries. An employer
includes any person directly or indirectly
acting in the interest of an employer. It
shall also refer to the enterprise where a
labor organization operates or seeks to
operate.
An employer may be brought into
bargaining and economic relationship
with persons not in his actual employ;
such persons are given the status and
tights of “employees” in relation to him,
in order to accord to them the protection
of the Act. Thus, The nature of a “labor
dispute” does not require that the
disputants should stand in the proximate
relation of employer and employee, with
consequent protection of concerted
activities carried out by many persons
belonging to several employers.
2.1 “One whose work has ceased...”
Cessation of work due to strike or lockout,
or to dismissal or suspensions

constituting unfair labor practices, does
not in itself affect the “employee” status,
in the sense that the rights and benefits
of the employee are protected as though
there had been no interruption of service,
effective upon actual return to work.
3. LABOR ORGANIZATION AS
EMPLOYER
Exceptionally, a labor organization may
be deemed an “employer” when it is
acting as such in relation to persons
rendering services under hire, particularly
in connection with its activities for profit
or gain.
4. LABOR DISPUTE
The test of whether a labor controversy
comes within the definition of a labor
dispute depends on whether it involves or
concerns terms, conditions of
employment or representation.
The existence of a labor dispute is not
negative by the fact that the plaintiffs and
defendants do not stand in the proximate
relation of employer and employee.
5. LABOR DISPUTES AND REMEDIES:
A SUMMARY
5.1 Definition
“Labor Dispute” includes any controversy
or matter concerning terms and
conditions of employment or the
association or representation of persons
in negotiating, fixing, maintaining,
changing or arranging the terms and
conditions of employment, regardless of
whether the disputants stand in the
proximate relation of employer and
employee.
5.2 Tests or Criteria of “Labor Dispute”
A. Nature: Dispute arises from employer-
employee relationship, although
disputants need not be proximately
“employee” or “employer” of the other.
LABOR RELATIONS: Azucena Vol. II
B. Subject matter: Dispute concerns (1)
terms or conditions of employment; or (2)
association or representation of persons
in negotiating, fixing, maintaining, or
changing terms or conditions of
employment.
5.3 Kinds of Labor Disputes
A. Labor Standards Disputes:
(1) Compensation – (underpayment of
minimum wage)
(2) Benefits – (nonpayment of holiday
pay)
(3) Working conditions – (unrectified work
hazards)
B. Labor Relations Disputes:
(1) Organizational Right Dispute/ ULP –
(coercion)
(2) Representation Disputes –
(determination of appropriate collective
bargaining unit)
(3) Bargaining Disputes – (refusal to
bargain)
(4) Contract Administration or Personnel
Policy Disputes – (noncompliance with
CBA provision)
(5) Employment Tenure Disputes –
(nonregularization of employees)
5.4 Remedies in Labor Disputes (SEE
TABLE 1)
________
Title II
NATIONAL LABOR RELATIONS
COMMISSION
Chapter I
CREATION AND COMPOSITION
Art. 213. National Labor Relations
Commission. There shall be a National
Labor Relations Commission which shall

be attached to the Department of Labor
and Employment for program and policy
coordination only, composed of a
Chairman and fourteen (14) Members.
Five (5) members each shall be chosen
from among the nominees of the workers
and employers organizations,
respectively. The Chairman and the four
(4) remaining members shall come from
the public sector, with the latter to be
chosen from among the recommendees
of the Secretary of Labor and
Employment.
Upon assumption into office, the
members nominated by the workers and
employers organizations shall divest
themselves of any affiliation with or
interest in the federation or association to
which they belong.
The Commission may sit en banc or in
five (5) divisions, each composed of three
(3) members. Subject to the penultimate
sentence of this paragraph, the
Commission shall sit en banc only for
purposes of promulgating rules and
regulations governing the hearing and
disposition of cases before any of its
divisions and regional branches, and
formulating policies affecting its
administration and operations. The
Commission shall exercise its adjudicatory
and all other powers, functions, and
duties through its divisions. Of the five (5)
divisions, the first, second and third
divisions shall handle cases coming from
the National Capital Region and the parts
of Luzon; and the fourth and fifth
divisions, cases from the Visayas and
Mindanao, respectively; Provided that the
Commission sitting en banc may, on
temporary or emergency basis, allow
cases within the jurisdiction of any
division to be heard and decided by any
other division whose docket allows the
additional workload and such transfer will
not expose litigants to unnecessary
additional expense. The divisions of the
Commission shall have exclusive
appellate jurisdiction over cases within
LABOR RELATIONS: Azucena Vol. II
their respective territorial jurisdictions.
[As amended by Republic Act No. 7700].
The concurrence of two (2)
Commissioners of a division shall be
necessary for the pronouncement of
judgment or resolution. Whenever the
required membership in a division is not
complete and the concurrence of two (2)
commissioners to arrive at a judgment or
resolution cannot be obtained, the
Chairman shall designate such number of
additional Commissioners from the other
divisions as may be necessary.
The conclusions of a division on any case
submitted to it for decision shall be
reached in consultation before the case is
assigned to a member for the writing of
the opinion. It shall be mandatory for the
division to meet for purposes of the
consultation ordained herein. A
certification to this effect signed by the
Presiding Commissioner of the division
shall be issued and a copy thereof
attached to the record of the case and
served upon the parties.
The Chairman shall be the Presiding
Commissioner of the first division and the
four (4) other members from the public
sector shall be the Presiding
Commissioners of the second, third,
fourth and fifth divisions, respectively. In
case of the effective absence or
incapacity of the Chairman, the Presiding
Commissioner of the second division shall
be the Acting Chairman.
The Chairman, aided by the Executive
Clerk of the Commission, shall have
administrative supervision over the
Commission and its regional branches
and all its personnel, including the
Executive Labor Arbiters and Labor
Arbiters.
The Commission, when sitting en banc
shall be assisted by the same Executive
Clerk and, when acting thru its Divisions,
by said Executive Clerks for the second,
third, fourth and fifth Divisions,
respectively, in the performance of such

similar or equivalent functions and duties
as are discharged by the Clerk of Court
and Deputy Clerks of Court of the Court of
Appeals. (As amended by Section 5,
Republic Act No. 6715, March 21, 1989)
________
Art. 214. Headquarters, Branches and
Provincial Extension Units. The
Commission and its First, Second and
Third divisions shall have their main
offices in Metropolitan Manila, and the
Fourth and Fifth divisions in the Cities of
Cebu and Cagayan de Oro, respectively.
The Commission shall establish as many
regional branches as there are regional
offices of the Department of Labor and
Employment, sub-regional branches or
provincial extension units. There shall be
as many Labor Arbiters as may be
necessary for the effective and efficient
operation of the Commission. Each
regional branch shall be headed by an
Executive Labor Arbiter. (As amended by
Section 6, Republic Act No. 6715, March
21, 1989)
________
1. NLRC: NATURE AND
ORGANIZATION
1.1 Creation and Autonomy
Before the advent of the Labor Code the
labor court was the Court of Industrial
Relations. When martial law was declared
in September 1972, PD No. 21 (October
14, 1972) abolished the CIR and replaced
it with an ad hoc National Labor Relations
Commission. This NLRC was short-lived as
it gave way to the NLRC which the Labor
Code created in 1974.
1.2 Administrative Supervision Delegated
to the DOLE Secretary
Executive Order No. 204 delegated to the
Secretary of Labor “administrative
supervision over the NLRC, its regional
branches and all its personnel.” The Order
cited two objectives: (1) to further
improve the rate of disposition of cases
and (2) to enhance existing measures for
LABOR RELATIONS: Azucena Vol. II
the prevention of graft and corruption in
the NLRC.
1.3 Essential Character
Under Republic Act No. 6715 in 1989, as
under the former law, the National Labor
Relations Commission continues to act
collegially, whether it performs
administrative or rule-making functions or
exercises appellate jurisdiction to review
decisions and final orders of the Labor
Arbiters.
1.4 Tripartite Composition
The same Article 213, as amended,
provides that the Chairman and twenty-
three members composing the National
Labor Relations Commission shall be
chosen from the workers, employers and
the public sectors.
1.5 Allocation of Powers Between NLRC
En Banc and Its Division
The “division: is a legal entity, not the
persons who sit in it. Hence, an individual
commissioner has no adjudicatory power,
although, of course, he can concur or
dissent in deciding a case. The law lodges
the adjudicatory power on each of the
eight divisions, not on the individual
commissioners not on the whole
commission.
1.6 The NLRC Rules of Procedure
“The 2005 Revised Rules of Procedure of
the National Labor Relations Commission”
was published in newspapers on
December 23, 2005 and took effect on
January 7, 2006.
________
Art. 215. Appointment and Qualifications.
The Chairman and other Commissioners
shall be members of the Philippine Bar
and must have engaged in the practice of
law in the Philippines for at least fifteen
(15) years, with at least five (5) years
experience or exposure in the field of
labor-management relations, and shall

preferably be residents of the region
where they are to hold office. The
Executive Labor Arbiters and Labor
Arbiters shall likewise be members of the
Philippine Bar and must have been
engaged in the practice of law in the
Philippines for at least seven (7) years,
with at least three (3) years experience or
exposure in the field of labor-
management relations: Provided,
However, that incumbent Executive Labor
Arbiters and Labor Arbiters who have
been engaged in the practice of law for at
least five (5) years may be considered as
already qualified for purposes of
reappointment as such under this Act.
The Chairman and the other
Commissioners, the Executive Labor
Arbiters and Labor Arbiters shall hold
office during good behavior until they
reach the age of sixty-five years, unless
sooner removed for cause as provided by
law or become incapacitated to discharge
the duties of their office.
The Chairman, the division Presiding
Commissioners and other Commissioners
shall be appointed by the President,
subject to confirmation by the
Commission on Appointments.
Appointment to any vacancy shall come
from the nominees of the sector which
nominated the predecessor. The
Executive Labor Arbiters and Labor
Arbiters shall also be appointed by the
President, upon recommendation of the
Secretary of Labor and Employment and
shall be subject to the Civil Service Law,
rules and regulations.
The Secretary of Labor and Employment
shall, in consultation with the Chairman of
the Commission, appoint the staff and
employees of the Commission and its
regional branches as the needs of the
service may require, subject to the Civil
Service Law, rules and regulations, and
upgrade their current salaries, benefits
and other emoluments in accordance with
law. (As amended by Section 7, Republic
Act No. 6715, March 21, 1989)
________
LABOR RELATIONS: Azucena Vol. II
REQUIRING CONFIRMATION BY
COMMISSION ON APPOINTMENTS,
UNCONSTITUTIONAL
________
Art. 216. Salaries, benefits and other
emoluments. The Chairman and members
of the Commission shall receive an annual
salary at least equivalent to, and be
entitled to the same allowances and
benefits as those of the Presiding Justice
and Associate Justices of the Court of
Appeals, respectively. The Executive
Labor Arbiters shall receive an annual
salary at least equivalent to that of an
Assistant Regional Director of the
Department of Labor and Employment
and shall be entitled to the same
allowances and benefits as that of a
Regional Director of said Department. The
Labor Arbiters shall receive an annual
salary at least equivalent to, and be
entitled to the same allowances and
benefits as that of an Assistant Regional
Director of the Department of Labor and
Employment. In no case, however, shall
the provision of this Article result in the
diminution of existing salaries, allowances
and benefits of the aforementioned
officials.(As amended by Section 8,
Republic Act No. 6715, March 21, 1989)
________
Chapter II
POWERS AND DUTIES
Art. 217. Jurisdiction of the Labor Arbiters
and the Commission.
a. Except as otherwise provided under
this Code, the Labor Arbiters shall have
original and exclusive jurisdiction to hear
and decide, within thirty (30) calendar
days after the submission of the case by
the parties for decision without extension,
even in the absence of stenographic
notes, the following cases involving all
workers, whether agricultural or non-
agricultural:
1. Unfair labor practice cases;
2. Termination disputes;

3. If accompanied with a claim for
reinstatement, those cases that
workers may file involving wages,
rates of pay, hours of work and
other terms and conditions of
employment;
4. Claims for actual, moral,
exemplary and other forms of
damages arising from the
employer-employee relations;
5. Cases arising from any violation
of Article 264 of this Code,
including questions involving the
legality of strikes and lockouts; and
6. Except claims for Employees
Compensation, Social Security,
Medicare and maternity benefits,
all other claims arising from
employer-employee relations,
including those of persons in
domestic or household service,
involving an amount exceeding five
thousand pesos (P5,000.00)
regardless of whether accompanied
with a claim for reinstatement.
b. The Commission shall have exclusive
appellate jurisdiction over all cases
decided by Labor Arbiters.
c. Cases arising from the interpretation or
implementation of collective bargaining
agreements and those arising from the
interpretation or enforcement of company
personnel policies shall be disposed of by
the Labor Arbiter by referring the same to
the grievance machinery and voluntary
arbitration as may be provided in said
agreements. (As amended by Section 9,
Republic Act No. 6715, March 21, 1989)
________
1. ADDITIONAL CASES
To the six (6) kinds of cases mentioned in
Article 217, the following should be
added:
1. Money claims arising out of employer-
employee relationship or by virtue of any
LABOR RELATIONS: Azucena Vol. II
law or contract, involving Filipino workers
for overseas deployment, including claims
for actual, moral, exemplary and other
forms of damages, as well as employment
termination of OFWs;
2. Wage distortion disputes in
unorganized establishments not
voluntarily settled by the parties pursuant
to Republic Act No. 6727, as reflected in
Article 124;
3. Enforcement of compromise
agreements when there is non-
compliance by any of the parties pursuant
to Article 227 of the Labor Code, as
amended; and
4. Other cases as may be provided by
law.
2. COMPULSORY ARBITRATION BY
LABOR ARBITERS
In its broad sense, arbitration is the
reference of a dispute to an impartial
third person, chosen by the parties or
appointed by statutory authority to hear
and decide the case in controversy. When
the consent of one of the parties is
enforced by statutory provisions, the
proceeding is referred to as compulsory
arbitration. In labor cases, compulsory
arbitration is the process of settlement of
labor disputes by a government agency
which has the authority to investigate and
to make an award which is binding on all
the parties.
2.1 NLRC Appellate Proceedings Not Part
of Arbitration
Under the Labor Code, it is the Labor
Arbiter who is clothed with the authority
to conduct compulsory arbitration on
cases involving termination disputes and
other cases under Art. 217.
When the Labor Arbiter renders his
decision, compulsory arbitration is
deemed terminated because by then the
hearing and determination of the
controversy has ended.

2.2 Nature of Proceedings
The NLRC Rules describe the proceedings
before the Labor Arbiter as non-litigious.
Subject to the requirements of due
process, the technicalities of law and
procedure in the regular courts do not
apply in NLRC/labor arbiter proceedings
(Art. 221). The arbiter may avail himself
of all reasonable means, including ocular
inspection, to ascertain the facts speedily;
he shall personally conduct the
conference or hearings and take full
control of the proceedings. (Rule V, Sec.
2, NLRC 2005 Rules of Procedure)
2.3 Article 217 Yields to Arts. 2612 and
2623
3. LABOR ARBITER’S JURISDICTION,
IN GENERAL
The cases labor arbiter can hear and
decide are employment-related.
3.1 Supervisory Control, Crucial
Control over the performance of the work
is the crucial indicator of employment
relationship, without which the labor
arbiter has no jurisdiction over the
dispute.
It is well-settled in law and jurisprudence
that where no employer-employee
relationship exists between the parties
and no issue is involved which may be
resolved by reference to the Labor Code,
other labor statutes, or any collective
2 A voluntary arbitrator, under Art. 261,
has “original and exclusive” jurisdiction
over disputes concerning CBA
implementation or personnel policy
enforcement.
3 In addition, under Art. 262, the parties
may submit to a voluntary arbitrator (or
panel) “all other disputes including unfair
labor practices and bargaining deadlocks.
LABOR RELATIONS: Azucena Vol. II
bargaining agreement, it is the Regional
Trial Court that has jurisdiction.
4. VENUE
The NLRC Rules of Procedure provides:
Section 1. Venue. - a) All cases which Labor
Arbiters have authority to hear and decide
may be filed in the Regional Arbitration
Branch having jurisdiction over the workplace
of the complainant or petitioner.
For purposes of venue, the workplace shall be
understood as the place or locality where the
employee is regularly assigned at the time the
cause of action arose. It shall include the
place where the employee is supposed to
report back after a temporary detail,
assignment, or travel. In case of field
employees, as well as ambulant or itinerant
workers, their workplace is where they are
regularly assigned, or where they are
supposed to regularly receive their salaries
and wages or work instructions from, and
report the results of their assignment to, their
employers.
b) Where two (2) or more Regional Arbitration
Branches have jurisdiction over the workplace
of the complainant or petitioner, the Branch
that first acquired jurisdiction over the case
shall exclude the others.
c) When venue is not objected to before the
filling of position papers such issue shall be
deemed waived.
d) The venue of an action may be changed or
transferred to a different Regional Arbitration
Branch other than where the complaint was
filed by written agreement of the parties or
when the Commission or Labor Arbiter before
whom the case is pending so orders, upon
motion by the proper party in meritorious
cases.
e) Cases involving overseas Filipino workers
may be filed before the Regional Arbitration
Branch having jurisdiction over the place
where the complainant resides or where the
principal office of any of the respondents is
situated, at the option of the complainant.
4.1 Worker’s Option

The worker, being the economically-
disadvantaged party—whether as
complainant/petitioner or as respondent,
as the case may be—the nearest
governmental machinery to settle the
dispute must be placed at his immediate
disposal.
4.2 Waiver
The 2005 NLRC Rules, in Sec. 1(c), Rule IV
states: “When venue is not objected to
before the filling of position papers such
issue shall be deemed waived.”
5. LABOR ARBITER’S JURISDICTION:
U.L.P. CASES
But its essence, captured in Art. 246, is
any act intended or directed to weaken or
defeat the worker’s rights to self-organize
or to engage in lawful concerted
activities. In short, unfair labor practice,
when committed by an employer, carries
the effect of anti-unionism.
6. CBA VIOLATION AMOUNTING TO
ULP
Certainly, violations of the collective
bargaining agreement would be unfair
labor practice which falls under the
jurisdiction of the Labor Arbiters and the
National Labor Relations Commission.
7. LABOR ARBITER’S JURISDICTION:
TERMINATION DISPUTES
Termination disputes or illegal dismissal
complaints fall within the jurisdiction of a
labor arbiter, as stated in Art. 217(2).
7.1 Termination of Corporate Officer;
Jurisdiction over Intra-Corporate Disputes
Transferred from SEC to RTC
The dismissal of a corporate officer by a
corporate board is a corporate dispute
that should be brought to the regular
courts.
A corporate officer’s dismissal is always a
corporate act, or an extra-corporate
LABOR RELATIONS: Azucena Vol. II
controversy and the nature is not altered
by the reason or wisdom with which the
Board of Directors may have in taking
such action.
7.2 Effect of Claim for Backwages,
Benefits, or Damages
In intra-corporate matters, such as those
affecting the corporation, its directors,
trustees, officers and shareholders, the
issue of consequential damages may just
as well be resolved and adjudicated by
the SEC. Undoubtedly, it is still within the
competence and expertise of the SEC to
resolve all matters arising from or closely
connected with all intra-corporate
disputes.
7.3 Mainland v. Movilla: The “Better
Policy” in Determining SEC Jurisdiction
The better policy to be followed in
determining jurisdiction over a case
should be to consider concurrent factors
such as the status or relationship of the
parties or the nature of the question that
is the subject of their controversy.
7.4 Tabang v. NLRC: SEC Jurisdiction
Reaffirmed; Corporate Officer and Intra-
corporate Controversy Defined
An “intra-corporate controversy” is one
which arises between a stockholder and
the corporation. There is no distinction,
qualification, nor any exemption
whatsoever. The provision is broad and
covers all kinds of controversies between
stockholders and corporations.
8. LABOR ARBITER’S JURISDICTION:
MONEY CLAIMS
A money claim arising from employer-
employee relations, excepting
SSS/ECC/Medicare claims, is within the
jurisdiction of a labor arbiter—
1. if the claim, regardless of amount, is
accompanied with a claim for
reinstatement; or

2. if the claim, whether or not
accompanied with a claim for
reinstatement, exceeds five thousand
pesos (P5,000.00) per claimant.
8.1 Only Money Claims Not Arising from
CBA
The Voluntary Arbitrator or Panel of
Voluntary Arbitrators will have original
and exclusive jurisdiction over money
claims "arising from the interpretation or
implementation of the Collective
Bargaining Agreement and, those arising
from the interpretation or enforcement of
company personnel policies", under
Article 261.
8.2 Money Claims Must Have Arisen from
Employment
Money claims of workers which do not
arise out of or in connection with their
employer-employee relationship fall
within the general jurisdiction of regular
courts of justice.
Where the claim to the principal relief
sought is to be resolved not by reference
to the Labor Code or other labor relations
statute or a collective bargaining
agreement but by the general civil law,
the jurisdiction over the dispute belongs
to the regular courts of justice and not to
the Labor Arbiter and the National Labor
Relations Commission.
8.3 Money Claims of Coop Employees
8.4 Jurisdiction over Claims for Damages
Money claims of workers which the labor
arbiter has original and exclusive
jurisdiction are comprehensive enough to
include claims for moral damages of a
dismissed employee against his employer.
8.5 Splitting of Actions Not Allowed
An employee who has been illegally
dismissed so as to cause him moral
damages has a cause of action for
reinstatement, back wages and damages.
LABOR RELATIONS: Azucena Vol. II
When he institutes proceedings before
the Labor Arbiter, he should make a claim
for all said reliefs.
8.6 Employer’s Complaint for Damages
An employer’s claim for damages against
an employee may be filed as
counterclaim in the illegal dismissal case
filed by the employee. Such claim for
damages, arising from employment
relationship, is outside the jurisdiction of
the regular court.
9. LABOR ARBITER’S JURISDICTION:
STRIKE AND LOCKOUTS
Questions relating to strikes or lockouts or
any form of work stoppage including
incidents thereof under Art. 264 fall within
the labor arbiter’s jurisdiction.
But the power to issue injunction is
lodged with an NLRC division, not a labor
arbiter. Moreover, “national interest’
cases are handled differently. Art. 263 (g)
empowers the DOLE Secretary or the
President of the Republic to assume
jurisdiction or refer the case to the NLRC
if the labor dispute or impending strike or
lockout involves an industry indispensible
to national interest.
Still another limit to the arbiter’s
jurisdiction is the jurisdiction of the
regular courts to hear and decide actions
filed by third parties being affected by a
strike of people who are not their
employees. Finally, if a crime is
committed, whether in relation to a strike
or not, the prosecution of the crime has to
be done not before a labor arbiter but a
regular court, because in such a case the
laws to be administered are primarily the
penal laws of the land.
10. LABOR ARBITER’S JURISDICTION:
OFW’S MONEY CLAIMS OR DISMISSAL
Section 10 of RA 8042, approved on June
7, 1995, known as the Migrant Workers
and Overseas Filipinos Act of 1995,
transfers from the POEA to Labor Arbiters

the original and exclusive jurisdiction to
hear and decide claims arising out of an
employer-employee relationship or by
virtue of any law or contract involving
Filipino workers for overseas deployment,
including claims for actual, moral,
exemplary and other forms of damages.
Based on [Article 217, Labor Code and
Section 10, R.A. No. 8042], labor arbiters,
clearly have original and exclusive
jurisdiction over claims arising from
employer-employee relations, including
terminations disputes involving all
workers, among them whom are Overseas
Filipino Workers (OFW).
11. LABOR ARBITER’S JURISDICTION:
WGAE DISTORTION
A salary distortion case, referred to in the
Article 124, is resolved either through the
CBA mechanism or, in unorganized
establishments, through the NCMB. IF the
NCMB fails to resolve the dispute in ten
days of conciliation conferences, it shall
be final to the appropriate branch of the
NLRC.
12. LABOR ARBITER’S JURISDICTION:
DISPUTES OVER COMPROMISE
SETTLEMENTS
Because labor law policy encourages
voluntary resolution of disputes,
compromise settlements are ordinarily
final and binding upon the parties. But a
compromise settlement may itself
become the subject of dispute. If there is
noncompliance with the compromise
agreement or if there is prima facie
evidence that the settlement was
obtained through fraud,
misrepresentation, or coercion, then,
according to Article 227, the NLRC
through the labor arbiter may assume
jurisdiction over such dispute.
13. SUBMISSION TO JURISDICTION
The active participation of the party
against whom the action was brought
coupled with his failure to object to the
LABOR RELATIONS: Azucena Vol. II
jurisdiction of the Court or quasi-judicial
body where the action is pending, is
tantamount to an invocation of that
jurisdiction, and a willingness to abide by
the resolution of the case will bar said
party from later on impugning the court
or body’s jurisdiction.
The Supreme Court frowns upon the
undesirable practice of a party submitting
his case for decision and then accepting
the judgment only if favourable, and
attacking it for lack of jurisdiction when
adverse.
14. IMMUNITY OF FOREIGN
GOVERNMENTS
In international law, "immunity" is
commonly understood as an exemption of
the state and its organs from the judicial
jurisdiction of another state. This is
anchored on the principle of the
sovereign equality of states under which
one state cannot assert jurisdiction over
another in violation of the maxim par in
parem non habet imperium (an equal has
no power over an equal).
As it stands now, the application of the
doctrine of immunity from suit has been
restricted to sovereign or governmental
activities (jure imperii). The mantle of
state immunity cannot be extended to
commercial, private and proprietary acts
(jure gestionis).
14.1 Immunity of the UN and Its
Specialized Agencies
15. EXECUTING MONEY CLAIMS
AGAINST THE GOVERNMENT
Even when a government agency enters
into a business contract with a private
entity, it is not the Labor Code but C.A.
No. 327 that applies in pursuing a money
claim (against the Government) arising
from such contract.
16. LOCAL WATER DISTRICT

They are quasi public corporations whose
employees belong to the civil service,
hence, the dismissal of those employees
shall be governed by the civil service law,
rules and regulations.
16.1 Exception: Where NLRC Jurisdiction
is Invoked
17. REPUBLIC ACT NO. 6715—
RETROACTIVE?
________
Art. 218. Powers of the Commission. The
Commission shall have the power and
authority:
a. To promulgate rules and regulations
governing the hearing and disposition of
cases before it and its regional branches,
as well as those pertaining to its internal
functions and such rules and regulations
as may be necessary to carry out the
purposes of this Code; (As amended by
Section 10, Republic Act No. 6715, March
21, 1989)
b. To administer oaths, summon the
parties to a controversy, issue subpoenas
requiring the attendance and testimony
of witnesses or the production of such
books, papers, contracts, records,
statement of accounts, agreements, and
others as may be material to a just
determination of the matter under
investigation, and to testify in any
investigation or hearing conducted in
pursuance of this Code;
c. To conduct investigation for the
determination of a question, matter or
controversy within its jurisdiction,
proceed to hear and determine the
disputes in the absence of any party
thereto who has been summoned or
served with notice to appear, conduct its
proceedings or any part thereof in public
or in private, adjourn its hearings to any
time and place, refer technical matters or
accounts to an expert and to accept his
report as evidence after hearing of the
parties upon due notice, direct parties to
be joined in or excluded from the
proceedings, correct, amend, or waive
LABOR RELATIONS: Azucena Vol. II
any error, defect or irregularity whether in
substance or in form, give all such
directions as it may deem necessary or
expedient in the determination of the
dispute before it, and dismiss any matter
or refrain from further hearing or from
determining the dispute or part thereof,
where it is trivial or where further
proceedings by the Commission are not
necessary or desirable; and
d. To hold any person in contempt directly
or indirectly and impose appropriate
penalties therefor in accordance with law.
A person guilty of misbehavior in the
presence of or so near the Chairman or
any member of the Commission or any
Labor Arbiter as to obstruct or interrupt
the proceedings before the same,
including disrespect toward said officials,
offensive personalities toward others, or
refusal to be sworn, or to answer as a
witness or to subscribe an affidavit or
deposition when lawfully required to do
so, may be summarily adjudged in direct
contempt by said officials and punished
by fine not exceeding five hundred pesos
(P500) or imprisonment not exceeding
five (5) days, or both, if it be the
Commission, or a member thereof, or by
a fine not exceeding one hundred pesos
(P100) or imprisonment not exceeding
one (1) day, or both, if it be a Labor
Arbiter.
The person adjudged in direct contempt
by a Labor Arbiter may appeal to the
Commission and the execution of the
judgment shall be suspended pending the
resolution of the appeal upon the filing by
such person of a bond on condition that
he will abide by and perform the
judgment of the Commission should the
appeal be decided against him. Judgment
of the Commission on direct contempt is
immediately executory and unappealable.
Indirect contempt shall be dealt with by
the Commission or Labor Arbiter in the
manner prescribed under Rule 71 of the
Revised Rules of Court; and (As amended
by Section 10, Republic Act No. 6715,
March 21, 1989)

e. To enjoin or restrain any actual or
threatened commission of any or all
prohibited or unlawful acts or to require
the performance of a particular act in any
labor dispute which, if not restrained or
performed forthwith, may cause grave or
irreparable damage to any party or
render ineffectual any decision in favor of
such party: Provided, That no temporary
or permanent injunction in any case
involving or growing out of a labor dispute
as defined in this Code shall be issued
except after hearing the testimony of
witnesses, with opportunity for cross-
examination, in support of the allegations
of a complaint made under oath, and
testimony in opposition thereto, if offered,
and only after a finding of fact by the
Commission, to the effect:
1. That prohibited or unlawful acts
have been threatened and will be
committed and will be continued
unless restrained, but no injunction
or temporary restraining order shall
be issued on account of any threat,
prohibited or unlawful act, except
against the person or persons,
association or organization making
the threat or committing the
prohibited or unlawful act or
actually authorizing or ratifying the
same after actual knowledge
thereof;
2. That substantial and irreparable
injury to complainant’s property
will follow;
3. That as to each item of relief to
be granted, greater injury will be
inflicted upon complainant by the
denial of relief than will be inflicted
upon defendants by the granting of
relief;
4. That complainant has no
adequate remedy at law; and
5. That the public officers charged
with the duty to protect
complainant’s property are unable
LABOR RELATIONS: Azucena Vol. II
or unwilling to furnish adequate
protection.
Such hearing shall be held after due and
personal notice thereof has been served,
in such manner as the Commission shall
direct, to all known persons against whom
relief is sought, and also to the Chief
Executive and other public officials of the
province or city within which the unlawful
acts have been threatened or committed,
charged with the duty to protect
complainant’s property: Provided,
however, that if a complainant shall also
allege that, unless a temporary
restraining order shall be issued without
notice, a substantial and irreparable
injury to complainant’s property will be
unavoidable, such a temporary
restraining order may be issued upon
testimony under oath, sufficient, if
sustained, to justify the Commission in
issuing a temporary injunction upon
hearing after notice. Such a temporary
restraining order shall be effective for no
longer than twenty (20) days and shall
become void at the expiration of said
twenty (20) days. No such temporary
restraining order or temporary injunction
shall be issued except on condition that
complainant shall first file an undertaking
with adequate security in an amount to
be fixed by the Commission sufficient to
recompense those enjoined for any loss,
expense or damage caused by the
improvident or erroneous issuance of
such order or injunction, including all
reasonable costs, together with a
reasonable attorney’s fee, and expense of
defense against the order or against the
granting of any injunctive relief sought in
the same proceeding and subsequently
denied by the Commission.
The undertaking herein mentioned shall
be understood to constitute an
agreement entered into by the
complainant and the surety upon which
an order may be rendered in the same
suit or proceeding against said
complainant and surety, upon a hearing
to assess damages, of which hearing,
complainant and surety shall have

reasonable notice, the said complainant
and surety submitting themselves to the
jurisdiction of the Commission for that
purpose. But nothing herein contained
shall deprive any party having a claim or
cause of action under or upon such
undertaking from electing to pursue his
ordinary remedy by suit at law or in
equity: Provided, further, That the
reception of evidence for the application
of a writ of injunction may be delegated
by the Commission to any of its Labor
Arbiters who shall conduct such hearings
in such places as he may determine to be
accessible to the parties and their
witnesses and shall submit thereafter his
recommendation to the Commission. (As
amended by Section 10, Republic Act No.
6715, March 21, 1989)
________
Art. 219. Ocular inspection. The
Chairman, any Commissioner, Labor
Arbiter or their duly authorized
representatives, may, at any time during
working hours, conduct an ocular
inspection on any establishment, building,
ship or vessel, place or premises,
including any work, material, implement,
machinery, appliance or any object
therein, and ask any employee, laborer,
or any person, as the case may be, for
any information or data concerning any
matter or question relative to the object
of the investigation.
________
1. POWERS OF THE COMMISSION
1.1 Rule-Making Power
The Commission has the power to
promulgate rules and regulations:
a) governing the hearing and disposition
of cases before it and its regional
branches;
b) pertaining to its internal functions; and
c) those that may be necessary to carry
out the purposes of this Code.
LABOR RELATIONS: Azucena Vol. II
It is an elementary rule in administrative
law that administrative regulations and
policies enacted by administrative bodies,
such as the Revised Rules of the NLRC, to
interpret the law which they are entrusted
to enforce, have the force of law, and are
entitled to great respect.
1.2 Power to Issue Compulsory Processes
The Commission has the power to:
a) administer oaths;
b) summon parties; and
c) issue subpoenas ad testificandum and
duces tecum.
1.3 Power to Investigate and Hear
Disputes within Its Jurisdiction
The Commission has the power to:
a) conduct investigation for the
determination of a question, matter or
controversy within its jurisdiction; and
b) proceed to hear and determine the
disputes in the manner laid down under
paragraph (c) of Art. 218.
1.4 Contempt Power
Contempt is defined as a disobedience to
the Court by setting up an opposition to
its authority, justice and dignity. It
signifies not only a willful disregard or
disobedience of the court's orders but
such conduct as tends to bring the
authority of the court and the
administration of law into disrepute or in
some manner to impede the due
administration of justice.
1.5 Power to Conduct Ocular Inspection
Under Article 219, the Chairman, any
Commissioner, Labor Arbiter or their duly
authorized representatives, may, at any
time during working hours:

a) conduct an ocular inspection on any
establishment, building, ship or vessel,
place or premises, including any work,
material, implement, machinery,
appliance or any object therein; and
b) ask any employee, laborer, or any
person, as the case may be, for any
information or data concerning any
matter or question relative to the object
of the investigation.
1.6 Adjudicatory Power: Original
The NLRC has original jurisdiction over
petitions for injunction or temporary
restraining order under Art. 218(e).
Also, it has original jurisdiction to hear
and decide “National Interest” cases
certified to it by the Secretary of Labor
under Art. 263(g).
1.7 Adjudicatory Power: Appellate
The NLRC has exclusive appellate
jurisdiction over all cases decided by
labor arbiters (Art. 217[b]) and the DOLE
regional director or hearing officers under
Art. 129.
The NLRC has no appellate jurisdiction
over decisions rendered by (1) a
voluntary arbitrator, or (2) the secretary
of labor, or (3) the bureau of labor
relations director on cases appealed from
the DOLE regional offices. The decisions
of these three offices are appealable
rather to the Court of Apeals.
Where the labor arbiter has no jurisdiction
or has not acquired jurisdiction, neither
has the NLRC. Its jurisdiction over cases
under Art. 217(a) is appellate, not
original.
2. POWER TO ISSUE INJUNCTION OR
TEMPORARY RESTRAINING ORDER
The NLRC has injunction power or, simply,
the power to command that an act be
done or not done.
LABOR RELATIONS: Azucena Vol. II
The action for injunction is distinct from
the ancillary remedy of preliminary
injunction4 which cannot exist except only
as part or an incident of an independent
action or proceeding.
A writ of preliminary injunction is
generally based solely on initial and
incomplete evidence.
2.1 Injunction by Labor Arbiter
Article 218 limits the grant of injunctive
power to the “Commission” meaning the
Commission en banc or any of its
divisions.
2.2 Requisites for Issuance of Restraining
Order or Injunction
As a rule, restraining orders or injunctions
do not issue ex parte and only after
compliance with the following requisites,
to wit:
a) a hearing held "after due and personal
notice thereof has been served, in such
manner as the Commission shall direct, to
all known persons against whom relief is
sought, and also to the Chief Executive
and other public officials of the province
or city within which the unlawful acts
have been threatened or committed
charged with the duty to protect
complainant's property;"
b) reception at the hearing of "testimony
of witnesses, with opportunity for cross-
examination, in support of the allegations
of a complaint made under oath," as well
as "testimony in opposition thereto, if
offered x x;
c) “a finding of fact by the Commission, to
the effect: (1) That prohibited or unlawful
acts have been threatened and will be
committed and will be continued unless
restrained, but no injunction or temporary
4 The sole object of which is to preserve
the status quo until the merits can be
heard.

restraining order shall be issued on
account of any threat, prohibited or
unlawful act, except against the person or
persons, association or organization
making the threat or committing the
prohibited or unlawful act or actually
authorizing or ratifying the same after
actual knowledge thereof; (2) That
substantial and irreparable injury to
complainant's property will follow; (3)
That as to each item of relief to be
granted, greater injury will be inflicted
upon complainant by the denial of relief
than will be inflicted upon defendants by
the granting of relief; (4) That
complainant has no adequate remedy at
law; and (5) That the public officers
charged with the duty to protect
complainant's property are unable or
unwilling to furnish adequate protection.”
2.3 Conditions for Issuance Ex Parte of a
Temporary Restraining Order (TRO)
A temporary restraining order (valid only
for 20 days) may be issued ex parte
under the following conditions:
a) the complainant "shall also allege that,
unless a temporary restraining order shall
be issued without notice, a substantial
and irreparable injury to complainant's
property will be unavoidable;
b) there is "testimony under oath,
sufficient, if sustained, to justify the
Commission in issuing a temporary
injunction upon hearing after notice;"
c) the "complainant shall first file an
undertaking with adequate security in an
amount to be fixed by the Commission
sufficient to recompense those enjoined
for any loss, expense or damage caused
by the improvident or erroneous issuance
of such order or injunction, including all
reasonable costs, together with a
reasonable attorney's fee, and expense of
defense against the order or against the
granting of any injunctive relief sought in
the same proceeding and subsequently
denied by the Commission;" and
LABOR RELATIONS: Azucena Vol. II
d) the "temporary restraining order shall
be effective for no longer than twenty
(20) days and shall become void at the
expiration of said twenty (20) days.
An injury is considered irreparable if it is
of such constant and frequent recurrence
that no fair and reasonable redress can
be had therefor in a court of law, or where
there is no standard by which their
amount can be measured with reasonable
accuracy, that is, it is not susceptible of
mathematical computation. It is
considered irreparable injury when it
cannot be adequately compensated in
damages due to the nature of the injury
itself or the nature of the right or property
injured or when there exists no certain
pecuniary standard for the measurement
of damages.
“Property” includes not only tangible
property but also the right to use such
property.
“Public officers” means local law
enforcing officers.
The “protection” contemplated is that
which would enable the employer to
proceed with the work.
The intent of this requirement is to take
the executive function of law enforcement
out of the court and leave it to the
appropriate executive officers, unless
they fail to function.
2.4 No Adequate Remedy
In addition to the other requirements
which the complainant must satisfy in
order to obtain injunctive relief under the
Act, the complainant must show that “he
has no adequate remedy at law.”
An adequate remedy at law has been
defined as one “that affords relief with
reference to the matter in controversy,
and which is appropriate to the particular
circumstances of the case.
2.5 Cash Bond

Under the NLRC Rules of 2005, no
temporary restraining order or writ of
preliminary injunction shall be issued
except on the condition that petitioner
shall first file an undertaking to answer
for the damages and post a cash bond in
the amount of Fifty Thousand Pesos
(P50,000.00), or such higher amount as
may be determined by the Commission.
The purpose of the bond is to recompense
those enjoined for any loss, expense or
damage caused by the improvident or
erroneous issuance of such order or
injunction, including all reasonable costs,
together with a reasonable attorney’s fee,
and expense of defense against the order
or against the granting of any injunctive
relief sought in the same proceeding and
subsequently denied by the Commission.
2.6 Scope
As to the scope of an injunction issued
under the Act, both the Act itself and the
cases restrict the operation of such
injunction not only to the specific acts
complained of in the pleadings and
proven at trial as wrongful, but further,
limits the injunction to only those alleged
and proven guilty of actual participation,
authorization or ratification of such acts.
The power of the NLRC to enjoin or
restrain the commission of any or all
prohibited or unlawful acts as provided in
Art. 218 of the Labor Code, can only be
exercised in a labor dispute.
2.7 Reception of Evidence
The reception of evidence “for the
application of a writ of injunction may be
delegated by the Commission to any of its
Labor Arbiters who shall conduct such
hearings in such places as he may
determine to be accessible to the parties
and their witnesses and shall submit
thereafter his recommendation to the
Commission.”
“Labor Arbiter” in the preceding sentence
may now refer to “Commission Attorney,”
a position created by R.A. No. 9347 (July
LABOR RELATIONS: Azucena Vol. II
27, 2006) to assist the Commission and
its divisions in their appellate and
adjudicatory functions.
2.8 Twenty-day Life of TRO
A temporary restraining order (TRO), if
issued at all in a petition for injunction, is
valid only for twenty (20) days and
becomes void ipso facto at the end of
that period.
The TRO takes effect upon its issuance
and not upon receipt of the parties.
The maximum period of 20 days includes
Saturdays, Sundays, and holidays.
2.9 Illustrative Case: Issuance of TRO
2.10 Injunction from NLRC: Not the Proper
Remedy against Employee’s Dismissal
________
[Art. 220. Compulsory arbitration. The
Commission or any Labor Arbiter shall
have the power to ask the assistance of
other government officials and qualified
private citizens to act as compulsory
arbitrators on cases referred to them and
to fix and assess the fees of such
compulsory arbitrators, taking into
account the nature of the case, the time
consumed in hearing the case, the
professional standing of the arbitrators,
the financial capacity of the parties, and
the fees provided in the Rules of Court.]
(Repealed by Section 16, Batas Pambansa
Bilang 130, August 21, 1981)
________
Art. 221. Technical rules not binding and
prior resort to amicable settlement. 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 Arbiters 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. In any proceeding before the
Commission or any Labor Arbiter, the
parties may be represented by legal
counsel but it shall be the duty of the
Chairman, any Presiding Commissioner or
Commissioner or any Labor Arbiter to
exercise complete control of the
proceedings at all stages.
Any provision of law to the contrary
notwithstanding, the Labor Arbiter shall
exert all efforts towards the amicable
settlement of a labor dispute within his
jurisdiction on or before the first hearing.
The same rule shall apply to the
Commission in the exercise of its original
jurisdiction. (As amended by Section 11,
Republic Act No. 6715, March 21, 1989)
________
1. PROCEEDINGS BEFORE LABOR
ARBITER OR THE COMMISSION;
TECHNICAL RULES NOT APPLICABLE
Administrative and quasi-judicial bodies,
like the National Labor Relations
Commission, are not bound by the
technical rules of procedure in the
adjudication of cases.
Simplification of procedure, without
regard to technicalities of law or
procedure and without sacrificing the
fundamental requisites of due process, is
mandated to insure a speedy
administration of social justice. This Court
construed Article 221 of the Labor Code
as to allow the NLRC or a labor arbiter to
decide a case on the basis of position
papers and other documents submitted
without resorting to technical rules of
evidence as observed in regular courts of
justice.
1.1 Modicum of Admissibility; Substantial
Evidence
It is true that administrative and quasi-
judicial bodies like the NLRC are not
bound by the technical rules of procedure
in the adjudication of cases. However,
this procedural rule should not be
LABOR RELATIONS: Azucena Vol. II
construed as a license to disregard
certain fundamental evidentiary rules.
While the rules of evidence prevailing in
the courts of law or equity are not
controlling in proceedings before the
NLRC, the evidence presented before it
must at least have a modicum of
admissibility for it to be given some
probative value.
Not only must there be some evidence to
support a finding or conclusion, but
evidence must be "substantial."
"Substantial evidence is more than a
mere scintilla. It means such relevant
evidence as a reasonable mind might
accept as adequate to support a
conclusion.
1.2 Cardinal Rights in Quasi-Judicial
Proceedings
There are cardinal primary rights which
must be respected even in proceedings of
this character:
1) right to a hearing;
2) tribunal must consider the evidence
presented;
3) decision must be supported by
something (evidence);
4) supporting evidence must be
substantial;
5) Decision must be rendered on the
evidence presented or at least contained
in the record and disclosed to the parties
affected;
6) the body or CIR or any of its judges
must act on his own independent
considerations of the law and facts, and
not simply accept the views of the
subordinate in arriving at a decision; and
7) decide in such manner that parties can
know the various issues involved and the
reason for the decision.
1.3 Verification

Verification is intended to assure that the
allegations in the pleading have been
prepared in good faith or are true and
correct, not mere speculations. Generally,
lack of verification is merely a format
defect that is neither jurisdictional nor
fatal.
1.4 Party Respondent
In a complaint for underpayment of
wages and other money claims filed by
employees of a single proprietorship
business, the respondent should be the
business owner. This is not necessarily
the person in whose name the business is
registered.
1.5 Prohibited Pleadings and Motions
Emphasizing the avoidance of legal
technicalities, the NLRC 2005 Rules (in
Rule III, Section4) does not allow the
following motions or pleadings:
a) Motion to dismiss the complaint except
on the ground of lack of jurisdiction over
the subject matter, improper venue, res
judicata, prescription and forum
shopping;
b) Motion for a bill of particulars;
c) Motion for new trial;
d) Petition for relief from judgment when
filed with the Labor Arbiter;
e) Petition for Certiorari, Mandamus or
prohibition;
f) Motion to declare respondent in default;
g) Motion for reconsideration or appeal
from any interlocutory order of the Labor
Arbiter.
2. MANDATORY CONCILIATION AND
MEDIATION CONFERENCE;
COMPROMISE ENCOURAGED
LABOR RELATIONS: Azucena Vol. II
Section 2. Nature of Proceedings. - The
proceedings before the Labor Arbiter shall be
non-Iitigious in nature. Subject to the
requirements of due process, the
technicalities of law and procedure and the
rules obtaining in the courts of law shall not
strictly apply thereto. The Labor Arbiter may
avail himself of all reasonable means to
ascertain the facts of the controversy
speedily, including ocular inspection and
examination of well-informed persons.
Section 3. Mandatory Conciliation and
Mediation Conference. – a) The mandatory
conciliation and mediation conference shall be
called for the purpose of (1) amicably settling
the case upon a fair compromise; (2)
determining the real parties in interest; (3)
determining the necessity of amending the
complaint and including all causes of action;
(4) defining and simplifying the issues in the
case; (5) entering into admissions or
stipulations of facts; and (6) threshing out all
other preliminary matters. The Labor Arbiter
shall preside and take full control of the
proceedings.
b) Conciliation and mediation efforts shall be
exerted by the Labor Arbiters all throughout
the proceedings. Should the parties arrive at
any agreement as to the whole or any part of
the dispute, the same shall be reduced to
writing and signed by the parties and their
respective counsel or authorized
representative, if any, before the Labor
Arbiter.
c) In any case, the compromise agreement
shall be approved by the Labor Arbiter, if after
explaining to the parties, particularly to the
complainants, the terms, conditions and
consequences thereof, he is satisfied that
they understand the agreement, that the
same was entered into freely and voluntarily
by them, and that it is not contrary to law,
morals, and public policy.
d) A compromise agreement duly entered into
in accordance with this Section shall be final
and binding upon the parties and shall have
the force and effect of a judgment rendered
by the Labor Arbiter.
e) The mandatory conciliation and mediation
conference shall, except for justifiable
grounds, be terminated within thirty (30)
calendar days from the date of the first
conference.

f) No motion for postponement shall be
entertained except on meritorious grounds.
Section 4. Effect of Failure of Conciliation and
Mediation. - Should the parties fail to agree
upon an amicable settlement, either in whole
or in part, during the mandatory conciliation
and mediation conference, the Labor Arbiter
shall terminate the conciliation and mediation
stage and proceed to pursue the other
purposes of the said conference as
enumerated in the immediately preceding
Section. Thereafter, the Labor Arbiter shall
direct the parties to simultaneously file their
respective position papers on the issues
agreed upon by the parties and as reflected in
the minutes of the proceedings.
Section 5. Non-Appearance of Parties. - The
non-appearance of the complainant or
petitioner during the two (2) settings for
mandatory conciliation and mediation
conference scheduled in the summons,
despite due notice thereof, shall be a ground
for the dismissal of the case without
prejudice.
In case of non-appearance by the respondent
during the first scheduled conference, the
second conference shall proceed as scheduled
in the summons. If the respondent still fails to
appear at the second conference despite
being duly served with summons, the Labor
Arbiter shall immediately terminate the
mandatory conciliation and mediation
conference. The Labor Arbiter shall thereafter
allow the complainant or petitioner to file his
verified position paper and submit evidence in
support of his causes of action, and thereupon
render his decision on the basis of the
evidence on record.
It is true that a compromise agreement
once approved by the court has the effect
of res judicata between the parties and
should not be disturbed except for vices
of consent and forgery. However, settled
is the rule that the NLRC may disregard
technical rules of procedure in order to
give life to the constitutional mandate
affording protection to labor and to
conform to the need of protecting the
working class whose inferiority against
the employer has always been earmarked
by disadvantage.
LABOR RELATIONS: Azucena Vol. II
2.1 Binding Effect of Compromise
Agreement
The authority to compromise cannot
lightly be presumed and should be
established by evidence.
Section 9. Authority to Bind Party. - Attorneys
and other representatives of parties shall
have authority to bind their clients in all
matters of procedure; but they cannot,
without a special power of attorney or express
consent, enter into a compromise agreement
with the opposing party in full or partial
discharge of a client's claim.
Also not to be overlooked is Section 3 (c
and d) of the NLRC 2005 Rules of
Procedure quoted above. It requires the
Labor Arbiter’s approval of a compromise
agreement over a case pending before
the Labor Arbiter.
2.2 Quitclaim and Waivers
A deed of release or quitclaim cannot bar
an employee from demanding benefits to
which he is legally entitled.
2.2a Final and Executory Judgment
Cannot be Negotiated
The judgment may no longer be modified
in any respect, even if the modification is
meant to correct what is perceived to be
an erroneous conclusion of fact or law,
and regardless of whether the
modification is attempted to be made by
the court rendering it or by the highest
court of the land.
3. MOTION TO DISMISS
Section 6. Motion to Dismiss. - On or before
the date set for the mandatory conciliation
and mediation conference, the respondent
may file a motion to dismiss. Any motion to
dismiss on the ground of lack of jurisdiction,
improper venue, or that the cause of action is
barred by prior judgment, prescription, or
forum shopping, shall be immediately
resolved by the Labor Arbiter through a
written order. An order denying the motion to

dismiss, or suspending its resolution until the
final determination of the case, is not
appealable.
3.1 Motu proprio Dismissal of Complaint
based on Prescription
3.2 Res Judicata as Reason to Dismiss
Complaint
For a prior judgment to constitute a bar to
a subsequent case, the following
requisites must concur: (a) it must be a
final judgment or order; (b) the court
rendering the same must have
jurisdiction over the subject matter and
over the parties; (c) it must be a
judgment or order on the merits, and (d)
there must be between the two cases
Identity of parties, subject matter, and
causes of action.
3.3 No Dismissal of Complaint despite
Death
3.4 Revival or Refiling of Dismissed Case
A dismissed case is not necessarily dead.
Section 16. Revival And Re-Opening Or Re-
Filing Of Dismissed Case. - A party may file a
motion to revive or re-open a case dismissed
without prejudice, within ten (10) calendar
days from receipt of notice of the order
dismissing the same; otherwise, his only
remedy shall be to re-file the case in the
arbitration branch of origin.
A complaint dismissed “without
prejudice” simply means a tentative or
temporary dismissal—the complaint may
be revived through an appropriate
motion.
4. SUBMISSION OF POSITION PAPERS
AND REPLY
4.1 Determination of necessity of Hearing
or Clarificatory Conference
Section 8. Determination of Necessity of
Hearing or Clarificatory Conference. -
Immediately after the submission by the
parties of their position paper or reply, as the
LABOR RELATIONS: Azucena Vol. II
case may be, the Labor Arbiter shall, motu
proprio, determine whether there is a need for
a hearing or clarificatory conference. At this
stage, he may, at his discretion and for the
purpose of making such determination, ask
clarificatory questions to further elicit facts or
information, including but not limited to the
subpoena of relevant documentary evidence,
if any, from any party or witness.
4.2 Role of the Labor Arbiter in hearing
and clarificatory conference--
Section 9. Role of the Labor Arbiter in Hearing
and Clarificatory Conference. - a) The Labor
Arbiter shall take full control and personally
conduct the hearing or clarificatory
conference. Unless otherwise provided by law,
the Labor Arbiter shall determine the order of
presentation of evidence by the parties,
subject to the requirements of due process.
He shall examine the parties and their
witnesses with respect to the matters at
issue; and ask questions only for the purpose
of clarifying points of law or fact involved in
the case. He shall limit the presentation of
evidence to matters relevant to the issue
before him and necessary for a just and
speedy disposition of the case.
b) In the cross-examination of witnesses, only
relevant, pertinent and material questions
necessary to enlighten the Labor Arbiter shall
be allowed.
c) The Labor Arbiter shall make a written
summary of the proceedings, including the
substance of the evidence presented, in
consultation with the parties. The written
summary shall be signed by the parties and
shall form part of the records.
4.3 Non-appearance of Parties;
Postponement of Hearing and
Clarificatory Conferences.
Section 10. Non-Appearance of Parties, and
Postponement of Hearings and Clarificatory
Conferences. - a) Non-appearance at a
hearing or clarificatory conference by the
complainant or petitioner, who was duly
notified thereof, may be sufficient cause to
dismiss the case without prejudice. Subject to
Section 16 of this Rule, where proper
justification is shown by proper motion to
warrant the re-opening of the case, the Labor
Arbiter shall call another hearing or

clarificatory conference and continue the
proceedings until the case is finally decided.
The dismissal of the case for the second time
due to the unjustified non-appearance of the
complainant or petitioner, who was duly
notified of the clarificatory hearing, shall be
with prejudice.
b) In case the respondent fails to appear
during the hearing or clarificatory conference
despite due notice thereof, the complainant
shall be allowed to present evidence ex-parte,
without prejudice to cross-examination at the
next hearing or conference. Two (2)
successive non-appearances by the
respondent during his scheduled presentation
of evidence or opportunity to cross-examine
witnesses, despite due notice thereof, shall be
construed as a waiver on his part to present
evidence or conduct cross-examination.
c) The parties and their counsels appearing
before the Labor Arbiter shall be prepared for
continuous hearing or clarificatory
conference. No postponement or continuance
shall be allowed by the Labor Arbiter, except
upon meritorious grounds and subject always
to the requirement of expeditious disposition
of cases. In any case, the hearing or
clarificatory conference shall be terminated
within ninety (90) calendar days from the date
of the initial hearing or conference.
d) Paragraph (c) of this Section
notwithstanding, in cases involving overseas
Filipino workers, the aggregate period for
conducting the mandatory conciliation and
mediation conference, including hearing on
the merits or clarificatory conference, shall
not exceed sixty (60) days, which shall be
reckoned from the date of acquisition of
jurisdiction by the Labor Arbiter over the
person of the respondents.
5. SUBMISSION OF THE CASE FOR
DECISION
5.1 Position Papers as Basis of Decision
The affidavits in such case may take the
place of their direct testimony. The labor
arbiter may choose, if he deems it
necessary, to set the case for hearing on
the merits where witnesses may be
presented and examined by the parties.
In both instances, the burden of proving
LABOR RELATIONS: Azucena Vol. II
that the termination was for valid or
authorized cause rests on the employer.
5.2 Lack of Verification, Not Fatal
The lack of verification of the position
paper-affidavit is a formal, rather than a
substantial, defect. It is not fatal. It could
be easily corrected by requiring an oath.
5.3 Due Process: Opportunity to Be Heard
The simple meaning of procedural due
process is that a party to a case must be
given sufficient opportunity to be heard.
Its very essence is to allow all parties
opportunity to present evidence.
A formal or trial-type hearing is not at all
times and in all instances essential to due
process, the requirements of which are
satisfied where parties are afforded fair
and reasonable opportunity to explain
their side of the controversy at hand.
5.4 Inhibition
Section 12. Inhibition. - A Labor Arbiter may
voluntarily inhibit himself from the resolution
of a case and shall so state in writing the legal
justifications therefor. Upon motion of a party,
either on the ground of relationship within the
fourth civil degree of consanguinity or affinity
with the adverse party or counsel, or on
question of impartiality, the Labor Arbiter may
inhibit himself from further hearing and
deciding the case. Such motion shall be
resolved within five (5) days from the filing
thereof. An order denying or granting a
motion for inhibition is inappealable.
5.5 Due Process Includes Impartiality of
the Appeal Body
In addition, administrative due process
includes (a) the right to notice, be it
actual or constructive, of the institution of
the proceedings that may affect a
person's legal right; (b) reasonable
opportunity to appear and defend his
rights and to introduce witnesses and
relevant evidence in his favor; (c) a
tribunal so constituted as to give him
reasonable assurance of honesty and

impartiality, and one of competent
jurisdiction; and (d) a finding or decision
by that tribunal supported by substantial
evidence presented at the hearing or at
least ascertained in the records or
disclosed to the parties.
It is self-evident from the ruling case law
that the officer who reviews a case on
appeal should not be the same person
whose decision is the subject of review.
Thus, we have ruled that "the reviewing
officer must perforce be other than the
officer whose decision is under review.
6. SUSPENSION OF PROCEEDINGS
To allow labor cases to proceed would
clearly defeat the purpose of the
automatic stay and severely encumber
the management committee’s time and
resources.
7. FILING AND SERVICE OF
PLEADINGS AND DECISIONS
Section 5. Filing and Service of Pleadings. - All
pleadings in connection with the case shall be
filed with the appropriate docketing unit of
the Regional Arbitration Branch or the
Commission, as the case maybe.
The party filing the pleadings shall serve the
opposing parties with a copy thereof and its
supporting documents in the manner provided
for in these Rules with proof of service
thereof.
7.1 Service of Notice and Resolutions
Section 6. Service of Notices and Resolutions.
- a) Notices or summons and copies of orders,
shall be served on the parties to the case
personally by the Bailiff or duly authorized
public officer within three (3) days from
receipt thereof or by registered mail; Provided
that in special circumstances, service of
summons may be effected in accordance with
the pertinent provisions of the Rules of Court;
Provided further, that in cases of decisions
and final awards, copies thereof shall be
served on both parties and their counsel or
representative by registered mail; Provided
further that in cases where a party to a case
or his counsel on record personally seeks
LABOR RELATIONS: Azucena Vol. II
service of the decision upon inquiry thereon,
service to said party shall be deemed effected
upon actual receipt thereof; Provided finally,
that where parties are so numerous, service
shall be made on counsel and upon such
number of complainants, as may be
practicable, which shall be considered
substantial compliance with Article 224 (a) of
the Labor Code, as amended.
For purposes of appeal, the period shall be
counted from receipt of such decisions,
resolutions, or orders by the counsel or
representative of record.
b) The Bailiff or officer serving the notice,
order, resolution or decision shall submit his
return within two (2) days from date of service
thereof, stating legibly in his return his name,
the names of the persons served and the date
of receipt, which return shall be immediately
attached and shall form part of the records of
the case. In case of service by registered mail,
the Bailiff or officer shall write in the return,
the names of persons served and the date of
mailing of the resolution or decision. If no
service was effected, the service officer shall
state the reason therefor in the return.
7.2 Proof and Completeness of Service
Section 7. Proof and Completeness of Service.
- The return is prima facie proof of the facts
indicated therein. Service by registered mail is
complete upon receipt by the addressee or his
agent; but if the addressee fails to claim his
mail from the post office within five (5) days
from the date of first notice of the postmaster,
service shall take effect after such time.
Section 4, Rule 13 of the Rules of Court
which is suppletory to the rules of the
NLRC, provides as follows:
Section 4. Personal Service. — Service of the
papers may be made by delivering personally
a copy to the party or his attorney, or by
leaving it in his office with his clerk or with a
person having charge thereof. If no person is
found in his office, or his office is not known,
then by leaving the copy, between the hours
of eight in the morning and six in the evening,
at the party's or attorney's residence, if
known, with a person of sufficient discretion
to receive the same.

8. RESOLUTION OF DOUBT IN LAW OR
EVIDENCE
It is now a familiar rule that doubt as to
the interpretation of labor laws and
regulations has to be resolved in favor of
labor. This precept is etched in the Labor
Code (Art. 4) and, in similar tenor, the
Civil Code (Art. 1702).
But this precept is not limited to
interpretation of legal provisions. It
extends likewise to doubts about the
evidence of the disputants.
9. DECISION OF LABOR ARBITER
Section 13. Period to Decide Case. - The Labor
Arbiter shall render his decision within thirty
(30) calendar days, without extension, after
the submission of the case by the parties for
decision, even in the absence of stenographic
notes; Provided however, that cases involving
overseas Filipino workers shall be decided
within ninety (90) calendar days after the
filing of the complaint which shall commence
to run upon acquisition by the Labor Arbiter of
jurisdiction over the respondents.
9.1 Contents of Decisions
Section 14. Contents of Decisions. - The
decisions and orders of the Labor Arbiter shall
be clear and concise and shall include a brief
statement of the: a) facts of the case; b)
issues involved; c) applicable laws or rules; d)
conclusions and the reasons therefor; and e)
specific remedy or relief granted. In cases
involving monetary awards, the decisions or
orders of the Labor Arbiter shall contain the
amount awarded.
In case the decision of the Labor Arbiter
includes an order of reinstatement, it shall
likewise contain: a) a statement that the
reinstatement aspect is immediately
executory; and b) a directive for the employer
to submit a report of compliance within ten
(10) calendar days from receipt of the said
decision.
9.2 No Motions for Reconsideration and
Petition for Relief from Judgment
Section 15. Motions for Reconsideration and
Petitions for Relief from Judgment. - No
LABOR RELATIONS: Azucena Vol. II
motions for reconsideration or petitions for
relief from judgment of any decision,
resolution or order of a Labor Arbiter shall be
allowed.However, when one such motion for
reconsideration is filed, it shall be treated as
an appeal provided that it complies with the
requirements for perfecting an appeal.In the
case of a petition for relief from judgment, the
Labor Arbiter shall elevate the case to the
Commission for disposition.
________
Art. 222. Appearances and Fees.
a. Non-lawyers may appear before the
Commission or any Labor Arbiter only:
1. If they represent themselves; or
2. If they represent their
organization or members thereof.
b. No attorney’s fees, negotiation fees or
similar charges of any kind arising from
any collective bargaining agreement shall
be imposed on any individual member of
the contracting union: Provided, However,
that attorney’s fees may be charged
against union funds in an amount to be
agreed upon by the parties. Any contract,
agreement or arrangement of any sort to
the contrary shall be null and void. (As
amended by Presidential Decree No.
1691, May 1, 1980)
________
1. APPEARANCE OF NON-LAWYERS
Section 8. Appearances. - b) A non-lawyer
may appear as counsel in any of the
proceedings before the Labor Arbiter or
Commission only under the following
conditions:
(1) he represents himself as party to the case;
(2) he represents a legitimate labor
organization, as defined under Article 212 and
242 of the Labor Code, as amended, which is
a party to the case: Provided, that he
presents: (i) a certification from the Bureau of
Labor Relations (BLR) or Regional Office of the
Department of Labor and Employment
attesting that the organization he represents
is duly registered and listed in the roster of
legitimate labor organizations; (ii) a verified

certification issued by the secretary and
attested to by the president of the said
organization stating that he is authorized to
represent the said organization in the said
case; and (iii) a copy of the resolution of the
board of directors of the said organization
granting him such authority;
(3) he represents a member or members of a
legitimate labor organization that is existing
within the employer's establishment, who are
parties to the case: Provided, that he
presents: (i) a verified certification attesting
that he is authorized by such member or
members to represent them in the case; and
(ii) a verified certification issued by the
secretary and attested to by the president of
the said organization stating that the person
or persons he is representing are members of
their organization which is existing in the
employer's establishment;
(4) he is a duly-accredited member of any
legal aid office recognized by the Department
of Justice or Integrated Bar of the Philippines:
Provided, that he (i) presents proof of his
accreditation; and (ii) represents a party to
the case;
(5) he is the owner or president of a
corporation or establishment which is a party
to the case: Provided, that he presents: (i) a
verified certification attesting that he is
authorized to represent said corporation or
establishment; and (ii) a copy of the
resolution of the board of directors of said
corporation, or other similar resolution or
instrument issued by said establishment,
granting him such authority.
2. CHANGE OF LAWYER
No substitution of attorneys will be
allowed unless the following requisites
concur:
1) there must be filed a written
application for substitution;
2) there must be filed the written consent
of the client to the substitution;
3) there must be filed the written consent
of the attorney to be substituted, if such
consent can be obtained;
LABOR RELATIONS: Azucena Vol. II
4) in case such written consent cannot be
procured, there must be filed with the
application for substitution, proof of the
service of notice of such motion in the
manner required by the rules, on the
attorney to be substituted.
3. AUTHORITY TO BIND PARTY
Section 9. Authority to Bind Party. - Attorneys
and other representatives of parties shall
have authority to bind their clients in all
matters of procedure; but they cannot,
without a special power of attorney or express
consent, enter into a compromise agreement
with the opposing party in full or partial
discharge of a client's claim.
4. ATTORNEY’S FEE
The purpose of the provision is to prevent
imposition on the workers of the duty to
individually contribute their respective
shares in the fee to be paid the attorney
for his services on behalf of the union in
its negotiations with the management.
The obligation to pay the attorney's fees
belongs to the union and cannot be
shunted to the workers as their direct
responsibility.
4.1 Negotiation Fee
The 105 negotiation fee which covers
attorney’s fees, agency fee, and the like
is based on the amount of backwages
receivable under the CBA which is beyond
what the law grants.
4.2 For Services Rendered by Union
Officers
Article 222 (b) prohibits attorney's fees,
negotiations fees and similar charges
arising out of the conclusion of a
collective bargaining agreement from
being imposed on any individual union
member. The collection of the special
assessment partly for the payment for
services rendered by union officers,
consultants and others may not be in the
category of "attorney's fees or
negotiations fees." But there is no

question that it is an exaction which falls
within the category of a "similar charge,"
and, therefore, within the coverage of the
prohibition in the aforementioned article.
________
Chapter III
APPEAL
Art. 223. Appeal. Decisions, awards, or
orders of the Labor Arbiter are final and
executory unless appealed to the
Commission by any or both parties within
ten (10) calendar days from receipt of
such decisions, awards, or orders. Such
appeal may be entertained only on any of
the following grounds:
a. If there is prima facie evidence of
abuse of discretion on the part of the
Labor Arbiter;
b. If the decision, order or award was
secured through fraud or coercion,
including graft and corruption;
c. If made purely on questions of law; and
d. If serious errors in the findings of facts
are raised which would cause grave or
irreparable damage or injury to the
appellant.
In case of a judgment involving a
monetary award, an appeal by the
employer may be perfected only upon the
posting of a cash or surety bond issued by
a reputable bonding company duly
accredited by the Commission in the
amount equivalent to the monetary
award in the judgment appealed from.
In any event, the decision of the Labor
Arbiter reinstating a dismissed or
separated employee, insofar as the
reinstatement aspect is concerned, shall
immediately be executory, even pending
appeal. The employee shall either be
admitted back to work under the same
terms and conditions prevailing prior to
his dismissal or separation or, at the
option of the employer, merely reinstated
in the payroll. The posting of a bond by
LABOR RELATIONS: Azucena Vol. II
the employer shall not stay the execution
for reinstatement provided herein.
To discourage frivolous or dilatory
appeals, the Commission or the Labor
Arbiter shall impose reasonable penalty,
including fines or censures, upon the
erring parties.
In all cases, the appellant shall furnish a
copy of the memorandum of appeal to
the other party who shall file an answer
not later than ten (10) calendar days from
receipt thereof.
The Commission shall decide all cases
within twenty (20) calendar days from
receipt of the answer of the appellee. The
decision of the Commission shall be final
and executory after ten (10) calendar
days from receipt thereof by the parties.
Any law enforcement agency may be
deputized by the Secretary of Labor and
Employment or the Commission in the
enforcement of decisions, awards or
orders. (As amended by Section 12,
Republic Act No. 6715, March 21, 1989)
________
1. NO MOTION FOR
RECONSIDERATION OF LABOR
ARBITER’S DECISION
If any grounds mentioned in this Article
exists, the losing party may appeal the
Labor Arbiter’s decision to the NLRC
within ten (10) days from receipt of the
decision.
1.1 Final Decision Cannot Be Amended
If not appealed on time, the Labor
Arbiter’s decision becomes final and
cannot be amended.
The perfection of an appeal within the
statutory or reglementary period is not
only mandatory but also jurisdictional and
failure to do so renders the questioned
decision final and executor, thus
depriving the appellate court of

jurisdiction to alter the final judgment,
much less entertain the appeal.
2. PERIOD TO APPEAL FROM LABOR
ARBITER
2.1 Ten Calendar Days
A period of ten (10) days from receipt of
any order is granted to either or to both
parties involved to appeal to the National
Labor Relations Commission.
After mature and careful deliberation, We
have arrived at the conclusion that the
shortened period of ten (10) days fixed by
Article 223 contemplates calendar days
and not working days. We are persuaded
to this conclusion, if only because We
believe that it is precisely in the interest
of labor that the law has commanded that
labor cases be promptly, if not
peremptorily, dispose of.
This Court reiterates the doctrine
enunciated in said case that the 10-day
period provided in Art. 223 of the Labor
Code refers to 10 calendar days and not
10 working days. This means that
Saturdays, Sundays and Legal Holidays
are not to be excluded, but included, in
counting the 10-day period. This is in line
with the objective of the law for speedy
disposition of labor cases with the end in
view of protecting the interests of the
working man.
2.2 Ten-Calendar-Day Rule Not Applicable
Prior to Vir-Jen Case
2.3 Under the 2005 NLRC Rules of
Procedure
Section 1. Periods of Appeal. - Decisions,
resolutions or orders of the Labor Arbiter shall
be final and executory unless appealed to the
Commission by any or both parties within ten
(10) calendar days from receipt thereof; and
in case of decisions, resolutions or orders of
the Regional Director of the Department of
Labor and Employment pursuant to Article
129 of the Labor Code, within five (5) calendar
days from receipt thereof. If the 10th or 5th
day, as the case may be, falls on a Saturday,
LABOR RELATIONS: Azucena Vol. II
Sunday or holiday, the last day to perfect the
appeal shall be the first working day following
such Saturday, Sunday or holiday.
2.4 Date of Receipt by Mail
The rule is that service by registered mail
is complete either upon actual receipt by
the addressee or at the end of five (5)
days, if he does not claim it within five (5)
days from the first notice of the
postmaster. (Rule 13, §8) The purpose is
to place the date of receipt of pleadings,
judgments and processes beyond the
power of the party being served to
determine at his pleasure.
2.5 Failure to Give Copy of Appeal to
Adverse Party Within Ten Days
The failure to give copy of appeal to the
appellee within ten (10) days is not fatal if
the appellee was not prejudiced by the
delay in the service of said copy of
appeal.
2.6 No Extension of Period
Section 1. Periods of Appeal. - No motion or
request for extension of the period within
which to perfect an appeal shall be allowed.
2.7 Periods Generally Mandatory
Such periods are imposed with a view to
prevent needless delays and to ensure
the orderly and speedy discharge of
judicial business. Strict compliance with
such rule is both mandatory and
imperative.
3. GROUNDS OF APPEAL
Section 2. Grounds. - The appeal may be
entertained only on any of the following
grounds:
a) If there is prima facie evidence of abuse of
discretion on the part of the Labor Arbiter or
Regional Director;
b) If the decision, resolution or order was
secured through fraud or coercion, including
graft and corruption;

c) If made purely on questions of law; and/or
d) If serious errors in the findings of facts are
raised which, if not corrected, would cause
grave or irreparable damage or injury to the
appellant.
4. WHERE TO FILE APPEAL
Section 3. Where Filed. - The appeal shall be
filed with the Regional Arbitration Branch or
Regional Office where the case was heard and
decided.
5. REQUISITES FOR PERFECTION OF
APPEAL
Section 4. requisites For Perfection Of Appeal.
- a) The appeal shall be: 1) filed within the
reglementary period provided in Section 1 of
this Rule; 2) verified by the appellant himself
in accordance with Section 4, Rule 7 of the
Rules of Court, as amended; 3) in the form of
a memorandum of appeal which shall state
the grounds relied upon and the arguments in
support thereof, the relief prayed for, and with
a statement of the date the appellant
received the appealed decision, resolution or
order; 4) in three (3) legibly typewritten or
printed copies; and 5) accompanied by i)
proof of payment of the required appeal fee;
ii) posting of a cash or surety bond as
provided in Section 6 of this Rule; iii) a
certificate of non-forum shopping; and iv)
proof of service upon the other parties.
b) A mere notice of appeal without complying
with the other requisites aforestated shall not
stop the running of the period for perfecting
an appeal.
c) The appellee may file with the Regional
Arbitration Branch or Regional Office where
the appeal was filed, his answer or reply to
appellant's memorandum of appeal, not later
than ten (10) calendar days from receipt
thereof. Failure on the part of the appellee
who was properly furnished with a copy of the
appeal to file his answer or reply within the
said period may be construed as a waiver on
his part to file the same.
d) Subject to the provisions of Article 218 of
the Labor Code, once the appeal is perfected
in accordance with these Rules, the
Commission shall limit itself to reviewing and
LABOR RELATIONS: Azucena Vol. II
deciding only the specific issues that were
elevated on appeal.
6. FRIVOLOUS APPEAL
Section 11, Rule VI of the NLRC Rules of
Procedure empowers not only the
Commission but also the Labor Arbiter to
impose reasonable penalties, including
fines and censures, upon a party for filing
a frivolous appeal. This implies that even
when the appeal is still with the Labor-
Arbiter, and not yet transmitted to the
Commission, the former may already find
it frivolous and, there and then, terminate
that appeal.
6.1 Unverified Letter Not Proper Appeal
7. PAYMENT OF APPEAT FEES
Section 5. Appeal Fee. - The appellant shall
pay an appeal fee of One Hundred Fifty Pesos
(P150.00) to the Regional Arbitration Branch
or Regional Office of origin, and the official
receipt of such payment shall form part of the
records of the case.
The failure to pay the appeal docketing
fee confers a directory and not a
mandatory power to dismiss an appeal,
and such power must be exercised with a
sound discretion and with a great deal of
circumspection considering all attendant
circumstances.
8. APPEAL BOND; FILING ON TIME;
EXCEPTIONS
Section 6. Bond. - In case the decision of the
Labor Arbiter or the Regional Director involves
a monetary award, an appeal by the employer
may be perfected only upon the posting of a
bond, which shall either be in the form of cash
deposit or surety bond equivalent in amount
to the monetary award, exclusive of damages
and attorney's fees.
In case of surety bond, the same shall be
issued by a reputable bonding company duly
accredited by the Commission or the Supreme
Court, and shall be accompanied by original
or certified true copies of the following:

a) a joint declaration under oath by the
employer, his counsel, and the bonding
company, attesting that the bond posted is
genuine, and shall be in effect until final
disposition of the case.
b) an indemnity agreement between the
employer-appellant and bonding company;
c) proof of security deposit or collateral
securing the bond: provided, that a check
shall not be considered as an acceptable
security;
d) a certificate of authority from the Insurance
Commission;
e) certificate of registration from the
Securities and Exchange Commission;
f) certificate of authority to transact surety
business from the Office of the President;
g) certificate of accreditation and authority
from the Supreme Court; and
h) notarized board resolution or secretary's
certificate from the bonding company
showing its authorized signatories and their
specimen signatures.
A cash or surety bond shall be valid and
effective from the date of deposit or posting,
until the case is finally decided, resolved or
terminated, or the award satisfied.This
condition shall be deemed incorporated in the
terms and conditions of the surety bond, and
shall be binding on the appellants and the
bonding company.
The appellant shall furnish the appellee with a
certified true copy of the said surety bond
with all the above-mentioned supporting
documents.The appellee shall verify the
regularity and genuineness thereof and
immediately report any irregularity to the
Commission.
Upon verification by the Commission that the
bond is irregular or not genuine, the
Commission shall cause the immediate
dismissal of the appeal, and censure or cite in
contempt the responsible parties and their
counsels, or subject them to reasonable fine
or penalty.
No motion to reduce bond shall be
entertained except on meritorious grounds,
LABOR RELATIONS: Azucena Vol. II
and only upon the posting of a bond in a
reasonable amount in relation to the
monetary award.
The mere filing of a motion to reduce bond
without complying with the requisites in the
preceding paragraphs shall not stop the
running of the period to perfect an appeal.
The bond is sine qua non to the
perfection of appeal from the labor
arbiter’s monetary award.
8.1 Motion to Reduce Bond under NLRC
Rules
A motion to reduce the amount of the
bond may be entertained, but, meantime,
a bond in reasonable amount must be
filed anyway.
8.2 No Bond, No Appeal Perfected
The lawmakers intended the posting of a
cash or surety bond by the employer to
be the exclusive means by which an
employer’s appeal may be considered
completed.
8.2a Relaxing the Ten-day Period
8.3 No Distinction Between “Filing” and
“Perfection” of Appeal; Star Angel
Decision, Not “Venerable”
8.4 Amount of Appeal Bond Excludes
Damages
An appeal is deemed perfected upon the
posting of the bond equivalent to the
monetary award exclusive of moral and
exemplary damages as well as attorney’s
fees.
8.5 Is Property Bond Acceptable? YES.
8.6 Supersedeas Bond
Substantial justice demands that it fulfill
its commitment to post the bond in order
to stay execution of the judgment against
it pending resolution of the appeal
therefrom. This consideration cannot be

outweighed by the claim that procedural
errors were committed by the Labor
Arbiter.
9. RECORDS AND TRANSMITTAL
Section 7. Records of Case on Appeal. - The
records of a case shall have a corresponding
index of its contents which shall include the
following: a) the original copy of the
complaint; b) other pleadings and motions; c)
minutes of the proceedings, notices,
transcripts of stenographic notes, if any; d)
decisions, orders, and resolutions as well as
proof of service thereof, if available; e) the
computation of the award; f) memorandum of
appeal and the reply or answer thereto, if any,
and proof of service, if available; g) official
receipt of the appeal fee; and h) the appeal
bond, if any.
The records shall be chronologically arranged
and paged prominently.
Section 8. Transmittal Of Records Of Case On
Appeal. - Within forty-eight (48) hours after
the filing of the appeal, the records of the
case shall be transmitted by the Regional
Arbitration Branch or office of origin to the
Commission.
10. EFFECT OF APPEAL OF ARBITER’S
DECISION
Section 9. Perfection Of Appeal; Effect. -
Without prejudice to immediate reinstatement
pending appeal under Section 6 of Rule XI,
once an appeal is filed, the Labor Arbiter loses
jurisdiction over the case. All pleadings and
motions pertaining to the appealed case shall
thereafter be addressed to and filed with the
Commission.
10.1 Execution or Reinstatement Pending
Appeal
Section 6. Execution of Reinstatement
Pending Appeal. - In case the decision
includes an order of reinstatement, and the
employer disobeys the directive under the
second paragraph of Section 14 of Rule V or
refuses to reinstate the dismissed employee,
the Labor Arbiter shall immediately issue writ
of execution, even pending appeal, directing
the employer to immediately reinstate the
dismissed employee either physically or in the
payroll, and to pay the accrued salaries as a
LABOR RELATIONS: Azucena Vol. II
consequence of such reinstatement at the
rate specified in the decision.
The Sheriff shall serve the writ of execution
upon the employer or any other person
required by law to obey the same. If he
disobeys the writ, such employer or person
may be cited for contempt in accordance with
Rule IX.
10.2 Effect of Perfection of Appeal on
Execution
Section 9. Effect of Perfection of Appeal on
Execution. - The perfection of an appeal shall
stay the execution of the decision of the Labor
Arbiter on appeal, except execution for
reinstatement pending appeal.
11. FRIVOLOUS OR DILATORY
APPEALS
Section 10. Frivolous or Dilatory Appeals. - No
appeal from an interlocutory order shall be
entertained.To discourage frivolous or dilatory
appeals, including those taken from
interlocutory orders, the Commission may
censure or cite in contempt the erring parties
and their counsels, or subject them to
reasonable fine or penalty.
12. APPEALS FROM DECISION OF
OTHER AGENCIES
Section 11. Appeals from Decision of Other
Agencies. - The Rules provided herein
governing appeals from the decisions or
orders of Labor Arbiters shall apply to appeals
to the Commission from decisions or orders of
the other offices or agencies appealable to
the Commission according to law.
13. PROCEEDING BEFORE THE
COMMISSION
Section 2. Composition and Internal Functions
of the Commission En Banc and Its Divisions. –
b) Commission En Banc. - The Commission
shall sit en banc only for purposes of
promulgating rules and regulations governing
the hearing and disposition of cases before its
Divisions and Regional Arbitration Branches,
and for the formulation of policies affecting its
administration and operations. It may, on
temporary or emergency basis, allow cases
within the jurisdiction of any Division to be

heard by any other Division whose docket
allows the additional workload and such
transfer will not expose litigants to
unnecessary additional expense.
c) Divisions. - Unless otherwise provided by
law, the Commission shall exercise its
adjudicatory and all other powers, functions
and duties through its five (5) Divisions. Each
Division shall consist of one member from the
public sector who shall act as the Presiding
Commissioner and one member each from the
workers and employers sectors, respectively.
Section 4. Commission En Banc Session,
Quorum and Vote. - c) Division. - The presence
of at least two (2) Commissioners of a Division
shall constitute a quorum. The concurrence of
two (2) Commissioners of a Division shall be
necessary for the pronouncement of a
judgment or resolution.
Whenever the required membership in a
Division is not complete and the concurrence
of two (2) Commissioners to arrive at a
judgment or resolution cannot be obtained,
the Chairman shall designate such number of
additional Commissioners from the other
Divisions as may be necessary from the same
sector.
d) Role of Chairman in the Division. - The
Chairman of the Commission may convene
and preside over the session of any Division
to consider any case pending before it and
participate in its deliberations, if in his
judgment, his presence therein will best serve
the interests of labor justice. He shall not
however, participate in the voting by the
Division, except when he is acting as
Presiding Commissioner of the Division in the
absence of the regular Presiding
Commissioner
13.1 Issues on Appeal
Section 4(d) Rule VI of the NLRC Rules of
Procedure, the Commission shall, in cases
of perfected appeals, limit itself to
reviewing those issues which were raised
on appeal.
13.2 Technical Rules Not Binding
Section 10. Technical Rules Not Binding. - The
rules of procedure and evidence prevailing in
courts of law and equity shall not be
LABOR RELATIONS: Azucena Vol. II
controlling and the Commission shall use
every and all reasonable means to ascertain
the facts in each case speedily and
objectively, without regard to technicalities of
law or procedure, all in the interest of due
process.
In any proceeding before the Commission, the
parties may be represented by legal counsel
but it shall be the duty of the Chairman, any
Presiding Commissioner or Commissioner to
exercise complete control of the proceedings
at all stages.
13.2a Evidence Submitted on Appeal to
NLRC
The settled rule is that the NLRC is not
precluded from receiving evidence on
appeal as technical rules of evidence are
not binding in labor cases. In fact, labor
officials are mandated by the Labor Code
to use every and all reasonable means to
ascertain the facts in each case speedily
and objectively, without regard to
technicalities of law or procedure, all in
the interest of due process.
13.3 Conciliation/Mediation
Section 11. Conciliation and Mediation. - In
the exercise of its exclusive, original and
appellate jurisdiction, the Commission may
exert all efforts towards the amicable
settlement of a labor dispute.
The settlement of cases on appeal, to be valid
and binding between the parties, shall be
made before the Commissioner or his
authorized representative.
13.4 Consultation
Section 5. Consultation. - The conclusions of a
Division on any case or matter submitted to it
for decision shall be reached in consultation
before the case is assigned to a member for
the writing of the opinion. It shall be
mandatory for the Division to meet for the
purpose of the consultation ordained herein.
A certification to this effect signed by the
Presiding Commissioner of the Division shall
be issued and a copy thereof attached to the
record of the case and served upon the
parties.

13.5 Dissenting Opinion
Section 6. Dissenting Opinion. - Should any
member of a Division indicate his intention to
write a dissenting opinion, he may file the
same within the period prescribed for
deciding or resolving the appeal; otherwise,
such written dissenting opinion shall not be
considered part of the records of the case.
13.5 Inhibition
Section 7. Inhibition. - No motion to inhibit the
entire Division of the Commission shall be
entertained. However, any Commissioner may
inhibit himself from the consideration and
resolution of any case or matter before the
Division and shall so state in writing the legal
or justifiable grounds therefor. In the event
that a member inhibits himself, the case shall
be raffled by the Executive Clerk or Deputy
Executive Clerk to either of the two (2)
remaining Commissioners. In case two (2)
Commissioners in a Division inhibit
themselves in a case or matter before it, the
Chairman shall, as far as practicable, appoint
two (2) Commissioners from other Divisions
representing the sector of the Commissioners
who inhibited themselves.
14. FORM OF DECISION, RESOLUTION
AND ORDER
Section 13. Form of Decision, Resolution and
Order. - The decision, resolution and order of
the Commission shall state clearly and
distinctly the findings of facts, issues, and
conclusions of law on which it is based, and
the relief granted, if any. If the decision,
resolution or order involves monetary awards,
the same shall contain the specific amount
awarded as of the date the decision is
rendered.
Under Art. 223, the Commission shall
decide ll cases within twenty calendar
days from receipt of the answer of the
appellee.
The decision of the Commission shall be
final and executory after ten calendar
days from receipt thereof by the parties.
14.1 Reasoned Reversal
LABOR RELATIONS: Azucena Vol. II
While it is within respondent
Commission's competence, as an
appellate agency reviewing decisions of
Labor Arbiters, to disagree with and set
aside the latter's findings, it stands to
reason that it should state an acceptable
cause therefor. It would otherwise be a
whimsical, capricious, oppressive,
illogical, unreasonable exercise of quasi-
judicial prerogative, subject to
invalidation by the extraordinary writ of
certiorari.
14.2 Extended Meaning of “Appeal” under
Article 223; NLRC May Issue Writ of
Certiorari
15. FINALITY OF DECISION OF THE
COMMISSION AND ENTRY OF
JUDGMENT
Section 14. Finality Of Decision Of The
Commission And Entry Of Judgment. - a)
Finality of the Decisions, Resolutions or Orders
of the Commission. - Except as provided in
Section 9 of Rule X, the decisions, resolutions
or orders of the Commission shall become
final and executory after ten (10) calendar
days from receipt thereof by the parties.
b) Entry of Judgment. - Upon the expiration of
the ten (10) calendar day period provided in
paragraph (a) of this Section, the decision,
resolution, or order shall be entered in a book
of entries of judgment.
The Executive Clerk or Deputy Executive Clerk
shall consider the decision, resolution or order
as final and executory after sixty (60)
calendar days from date of mailing in the
absence of return cards, certifications from
the post office, or other proof of service to
parties.
16. MOTION FOR RECONSIDERATION
Section 15.MOTIONS FOR RECONSIDERATION.
- Motion for reconsideration of any decision,
resolution or order of the Commission shall
not be entertained except when based on
palpable or patent errors; provided that the
motion is under oath and filed within ten (10)
calendar days from receipt of decision,
resolution or order, with proof of service that
a copy of the same has been furnished, within
the reglementary period, the adverse party;

and provided further, that only one such
motion from the same party shall be
entertained.
Should a motion for reconsideration be
entertained pursuant to this section, the
resolution shall be executory after ten (10)
calendar days from receipt thereof.
The NLRC Rules does not allow a second
motion for reconsideration. The NLRC
abuses its discretion when it violates its
own rules by entertaining such a motion.
A supplemental motion for
reconsideration filed outside the 10-day
appeal period cannot be entertained.
16.1 Party Who Failed to Appeal on Time
From Decision of Labor Arbiter May Still
File Motion for Reconsideration of NLRC
Decision
It is also an accepted postulate that
issues not raised in the lower court or the
labor arbiter may not be raised for the
first time on appeal.
17. CERTIFIED CASES
18. APPEAL FROM THE NATIONAL
LABOR RELATIONS COMMISSION
18.1 Review by Certiorari by the Court of
Appeals; St. Martin case
In a nutshell, the St. Martin precedent
states:
(1) the way to review NLRC decisions is
through the special civil action of
certiorari under Rule 65;
(2) the jurisdiction over such action
belongs to both the Supreme Court and
the Court of Appeals; but
(3) in line with the doctrine n hierarchy of
courts, the petition should be initially
presented to the lower of the two courts,
that is, the Court of Appeals.
18.2 When and Where to File Petition
LABOR RELATIONS: Azucena Vol. II
Section 4. When and where petition filed.
— The petition shall be filed not later than
sixty (60) days from notice of the judgment,
order or resolution. In case a motion for
reconsideration or new trial is timely filed,
whether such motion is required or not, the
sixty (60) day period shall be counted from
notice of the denial of said motion.
The petition shall be filed in the Supreme
Court or, if it relates to the acts or omissions
of a lower court or of a corporation, board,
officer or person, in the Regional Trial Court
exercising jurisdiction over the territorial area
as defined by the Supreme Court. It may also
be filed in the Court of Appeals whether or not
the same is in aid of its appellate jurisdiction,
or in the Sandiganbayan if it is in aid of its
appellate jurisdiction. If it involves the acts or
omissions of a quasi-judicial agency, unless
otherwise provided by law or these Rules, the
petition shall be filed in and cognizable only
by the Court of Appeals.
No extension of time to file the petition shall
be granted except for compelling reason and
in no case exceeding fifteen (15) days. (4a)
(Bar Matter No. 803, 21 July 1998; A.M. No.
00-2-03-SC)
18.2a One Day Late
The 60-day period must carefully be
observed.
Reglementary periods are indispensable
interdictions against needless delays.
18.2b Certified True Copy of NLRC
Decision
Numerous decisions issued by this Court
emphasize that in appeals under Rule 45
and in original civil actions for certiorari
under Rule 65 in relation to Rules 46 and
56, what is required to be certified is the
copy of the questioned judgment, final
order or resolution. Since the LA's
Decision was not the questioned ruling, it
did not have to be certified. What had to
be certified was the NLRC Decision.
18.3 Effect on NLRC’s Decision
 LABOR RELATIONS: Azucena Vol. II
Section 10. Effect of Petition for Certiorari on or to a virtual refusal to perform the duty
Execution. - A petition for certiorari with the enjoined or to act at all in contemplation
Court of Appeals or the Supreme Court shall of law.
not stay the execution of the assailed decision
unless a restraining order is issued by said
18.7 Sole Office of Certiorari
courts.
The appellate court’s jurisdiction to
18.4 Appeal to Labor Secretary Abolished
review a decision of the NLRC in a petition
for certiorari is confined to issues of
Presidential Decree No. 1391 amended
jurisdiction or grave abuse of discretion.
Article 223 and abolished appeals to the
An extraordinary remedy, a petition for
Secretary of Labor.
certiorari is available only and
restrictively in truly exceptional cases.
18.5 Grounds for Certiorari
The sole office of the writ of certiorari is
the correction of errors of jurisdiction
A party may seasonably avail of the
including the commission of grave abuse
special civil action for certiorari, where
of discretion amounting to lack or excess
the tribunal, board or officer exercising
of jurisdiction. It does not include
judicial functions has acted without or in
correction of the NLRC’s evaluation of the
excess of its jurisdiction, or with grave
evidence or of its factual findings. Such
abuse of discretion, and praying that
findings are generally accorded not only
judgment be rendered annulling or
respect but also finality. A party assailing
modifying the proceedings, as the law
such findings bears the burden of
requires, of such tribunal, board or officer.
showing that the tribunal acted
capriciously and whimsically or in total
In spite of statutory provisions making
disregard of evidence material to the
‘final’ the decisions of certain
controversy, in order that the
administrative agencies, the Supreme
extraordinary writ of certiorari will lie.
Court [or Court of Appeals] using the
power of judicial review, has taken
18.8 Appeal from OSEC to CA; St. Martin
cognizance of petitions questioning the
Ruling Applies
decisions where want of jurisdiction,
grave abuse of discretion, violation of due
Though appeals from the NLRC to the
process, denial of substantial justice, or
Secretary of Labor were eliminated,
erroneous interpretation of the law were
presently there are several instances in
brought to its attention.
the Labor Code and its implementing and
related rules where an appeal can be filed
The writ of certiorari will issue to undo
with the Office of the Secretary of Labor
those acts, and do justice to the
or the Secretary of Labor issues a ruling,
aggrieved party.
to wit:
18.6 “Grave Abuse of Discretion”
(1) Under the Rules and Regulations
Governing Recruitment and Placement
By grave abuse of discretion is meant
Agencies for Local Employment 14 dated
capricious and whimsical exercise of
June 5, 1997 superseding certain
judgment as is equivalent to lack of
provisions of Book I (Pre-Employment) of
jurisdiction. Mere abuse of discretion is
the implementing rules, the decision of
not enough. It must be grave abuse of
the Regional Director on complaints
discretion as when the power is exercised
against agencies is appealable to the
in an arbitrary or despotic manner by
Secretary of Labor within ten (10) working
reason of passion or personal hostility,
days from receipt of a copy of the order,
and must be so patent and so gross as to
on specified grounds, whose decision
amount to an evasion of a positive duty
shall be final and inappealable.

(2) Art. 128 of the Labor Code provides
that an order issued by the duly
authorized representative of the
Secretary of Labor in labor standards
cases pursuant to his visitorial and
enforcement power under said article
may be appealed to the Secretary of
Labor.
Sec. 2 in relation to Section 3 (a), Rule X, Book
III (Conditions of Employment) of the
implementing rules gives the Regional
Director the power to order and administer
compliance with the labor standards
provisions of the Code and other labor
legislation. Section 4 gives the Secretary the
power to review the order of the Regional
Director, and the Secretary's decision shall be
final and executory.
Sec. 1, Rule IV (Appeals) of the Rules on the
Disposition of Labor Standards Cases in the
Regional Offices dated September 16, 1987
15 provides that the order of the Regional
Director in labor standards cases shall be final
and executory unless appealed to the
Secretary of Labor.
Sec. 5, Rule V (Execution) provides that the
decisions, orders or resolutions of the
Secretary of Labor and Employment shall
become final and executory after ten (10)
calendar days from receipt of the case
records. The filing of a petition for certiorari
before the Supreme Court shall not stay the
execution of the order or decision unless the
aggrieved party secures a temporary
restraining order from the Court within fifteen
(15) calendar days from the date of finality of
the order or decision or posts a supersedeas
bond.
Sec. 6 of Rule VI (Health and Safety Cases)
provides that the Secretary of Labor at his
own initiative or upon the request of the
employer and/or employee may review the
order of the Regional Director in occupational
health and safety cases. The Secretary's order
shall be final and executory.
(2) Art. 236 provides that the decision of
the Labor Relations Division in the
regional office denying an applicant labor
organization, association or group of
unions or workers' application for
LABOR RELATIONS: Azucena Vol. II
registration may be appealed by the
applicant union to the Bureau of Labor
Relations within ten (10) days from
receipt of notice thereof.
Sec. 4, Rule V, Book V (Labor Relations), as
amended by Department Order No. 9 dated
May 1, 1997 16 provides that the decision of
the Regional Office denying the application for
registration of a workers association whose
place of operation is confined to one regional
jurisdiction, or the Bureau of Labor Relations
denying the registration of a federation,
national or industry union or trade union
center may be appealed to the Bureau or the
Secretary as the case may be who shall
decide the appeal within twenty (20) calendar
days from receipt of the records of the case.
(3) Art. 238 provides that the certificate
of registration of any legitimate
organization shall be canceled by the
Bureau of Labor Relations if it has reason
to believe, after due hearing, that the
said labor organization no longer meets
one or more of the requirements
prescribed by law.
Sec. 4, Rule VIII, Book V provides that the
decision of the Regional Office or the Director
of the Bureau of Labor Relations may be
appealed within ten (10) days from receipt
thereof by the aggrieved party to the Director
of the Bureau or the Secretary of Labor, as the
case may be, whose decision shall be final
and executory.
(4) Art. 259 provides that any party to a
certification election may appeal the
order or results of the election as
determined by the Med-Arbiter directly to
the Secretary of Labor who shall decide
the same within fifteen (15) calendar
days.
Sec. 12, Rule XI, Book V provides that the
decision of the Med-Arbiter on the petition for
certification election may be appealed to the
Secretary.
Sec. 15, Rule XI, Book V provides that the
decision of the Secretary of Labor on an
appeal from the Med-Arbiter's decision on a
petition for certification election shall be final
and executory. The implementation of the
decision of the Secretary affirming the

decision to conduct a certification election
shall not be stayed unless restrained by the
appropriate court.
Sec. 15, Rule XII, Book V provides that the
decision of the Med-Arbiter on the results of
the certification election may be appealed to
the Secretary within ten (10) days from
receipt by the parties of a copy thereof,
whose decision shall be final and executory.
Sec. 7, Rule XVIII (Administration of Trade
Union Funds and Actions Arising Therefrom),
Book V provides that the decision of the
Bureau in complaints filed directly with said
office pertaining to administration of trade
union funds may be appealed to the Secretary
of Labor within ten (10) days from receipt of
the parties of a copy thereof.
Sec. 1, Rule XXIV (Execution of Decisions,
Awards, or Orders), Book V provides that the
decision of the Secretary of Labor shall be
final and executory after ten (10) calendar
days from receipt thereof by the parties
unless otherwise specifically provided for in
Book V.
(5) Art. 263 provides that the Secretary of
Labor shall decide or resolve the labor
dispute over which he assumed
jurisdiction within thirty (30) days from
the date of the assumption of jurisdiction.
His decision shall be final and executory
ten (10) calendar days after receipt
thereof by the parties.
18.9 Exhaustion of Administrative
Remedies; Motion for Reconsideration
Required
The remedy of an aggrieved party in a
decision or resolution of the Secretary of
the DOLE is to timely file a motion for
reconsideration as a precondition of or
any further or subsequent remedy, and
then seasonably file a special civil action
for certiorari under Rule 65 of the 1997
Rules of Civil Procedure.
Petitioner’s failure to file its motion for
reconsideration seasonably is fatal to its
cause and in effect, renders final and
executor the Resolution of the Secretary
of the DOLE.
LABOR RELATIONS: Azucena Vol. II
A petition for certiorari should be
preceded by exhaustion of administrative
remedies.
When an administrative remedy is
provided by law, relief must be sought by
first exhausting that remedy before
seeking judicial intervention. Failure to do
so is fatal.
18.10 Exceptions
It has been held that the requirement of a
motion for reconsideration may be
dispensed with in the following instances:
(1) when the issue raised is one purely of
law; (2) where public interest is involved;
(3) in cases of urgency; and (4) where
special circumstances warrant immediate
or more direct action. On the other hand,
among the accepted exceptions to the
rule on exhaustion of administrative
remedies are: (1) where the question in
dispute is purely a legal one; and (2)
where the controverted act is patently
illegal or was performed without
jurisdiction or in excess of jurisdiction.
19. CERTIFICATION OF NON-FORUM
SHOPPING
Forum shopping is the act or attempt to
present the same dispute to different
adjudicators in the hope of securing a
favourable ruling.
In relation thereto, Rule 7, Section 5 of
the Rules of Court provides:
Certification against forum shopping.—The
plaintiff or principal party shall certify under
oath in the complaint or other initiatory
pleading asserting a claim for relief, or in a
sworn certification annexed thereto and
simultaneously filed therewith:
(a) that he has not theretofore commenced
any action or filed any claim involving the
same issues in any court, tribunal or quasi-
judicial agency and, to the best of his
knowledge, no such other action or claim is
pending therein;

(b) if there is such other pending action or
claim, a complete statement of the present
status thereof; and
(c) if he should thereafter learn that the same
or similar action or claim has been filed or is
pending, he shall report that fact within five
(5) days therefrom to the court wherein his
aforesaid complaint or initiatory pleading has
been filed.
Failure to comply with the foregoing
requirements shall not be curable by
mere amendment of the complaint or
other initiatory pleading but shall be
cause for the dismissal of the case
without prejudice, unless otherwise
provided, upon motion and after hearing.
The submission of a false certification or
non-compliance with any of the
undertakings therein shall constitute
indirect contempt of court, without
prejudice to the corresponding
administrative and criminal actions. If the
acts of the party or his counsel clearly
constitute willful and deliberate forum
shopping, the same shall be ground for
summary dismissal with prejudice and
shall constitute direct contempt, as well
as a cause for administrative sanctions.
19.1 Certification of Nonforum Shopping
Must be Made by Petitioner
The certification must be made by
petitioner himself and not by counsel
since it is petitioner who is in the best
position to know whether he has
previously commenced any similar action
involving the same issues in any other
tribunal or agency.
20. DISPOSITION BY THE COURT OF
APPEALS
20.1 Remand
20.2 Dismissal of Appeal
20.3 Findings of Facts Generally Final
As a general rule, the findings of
administrative agencies are accorded not
only respect but even finality.
LABOR RELATIONS: Azucena Vol. II
The doctrine that the findings of facts of
the NLRC are binding on this Court if
supported by substantial evidence is well
established. However, in the same way
that the findings of facts unsupported by
substantial and credible evidence do not
bind the Supreme Court [or Court of
Appeals], neither will we uphold
erroneous conclusions of the NLRC when
we find that the latter committed grave
abuse of discretion in reversing the
decision of the labor arbiter, especially if
the findings of NLRC based on practically
the same facts established in the
hearings before the arbiter are
speculative and conjectural
20.4 Exceptions:
(1) when the findings are grounded
entirely on speculation, surmises, or
conjectures;
(2) when the inference made is manifestly
mistaken, absurd, or impossible;
(3) when there is grave abuse of
discretion;
(4) when the judgment is based on a
misapprehension of facts;
(5) when the findings of facts are
conflicting;
(6) when in making its findings, the Court
of Appeals went beyond the issues of the
case, or its findings are contrary to the
admissions of both the appellant and the
appellee;
(7) when the findings are contrary to the
trial court;
(8) when the findings are conclusions
without citation of specific evidence on
which they are based;
(9) when the facts set forth in the petition
as well as in the petitioner's main and
reply briefs are not disputed by the
respondent;

(10) when the findings of fact are
premised on the supposed absence of
evidence and contradicted by the
evidence on record; and
(11) when the Court of Appeals manifestly
overlooked certain relevant facts not
disputed by the parties, which, if properly
considered, would justify a different
conclusion.
20.5 Examples: Some Findings of Facts
Reversed
21. FROM CA TO SC: ONLY QUESTION
OF LAW, RULE 45
It must be filed within fifteen (15) days
from notice of the judgment or final order
or resolution appealed from, or of the
denial of the petitioner’s motion for new
trial or reconsideration.
The special civil action of certiorari under
Rule 65 cannot be used as a substitute for
an appeal under Rule 45 that the
petitioner already lost.
________
Art. 224. Execution of decisions, orders or
awards.
a. The Secretary of Labor and
Employment or any Regional Director, the
Commission or any Labor Arbiter, or Med-
Arbiter or Voluntary Arbitrator may, motu
proprio or on motion of any interested
party, issue a writ of execution on a
judgment within five (5) years from the
date it becomes final and executory,
requiring a sheriff or a duly deputized
officer to execute or enforce final
decisions, orders or awards of the
Secretary of Labor and Employment or
regional director, the Commission, the
Labor Arbiter or med-arbiter, or voluntary
arbitrators. In any case, it shall be the
duty of the responsible officer to
separately furnish immediately the
counsels of record and the parties with
copies of said decisions, orders or awards.
Failure to comply with the duty prescribed
herein shall subject such responsible
LABOR RELATIONS: Azucena Vol. II
officer to appropriate administrative
sanctions.
b. The Secretary of Labor and
Employment, and the Chairman of the
Commission may designate special
sheriffs and take any measure under
existing laws to ensure compliance with
their decisions, orders or awards and
those of the Labor Arbiters and voluntary
arbitrators, including the imposition of
administrative fines which shall not be
less than P500.00 nor more than
P10,000.00. (As amended by Section 13,
Republic Act No. 6715, March 21, 1989)
________
1. EXECUTION
A writ of “Execution” is an order to carry
out, to implement, a final judgment.
Under Art. 224, a writ of execution may
be issued by the following officials for the
final decisions, order or awards
promulgated by them:
a) Secretary of Labor and Employment;
b) any Regional Director;
c) the Commission;
d) the Labor Arbiter;
e)the Med-Arbiter;
f) the Voluntary Arbitrator; or
g) the Panel of Arbitrators.
The writ of execution on a judgment may
be issued motu proprio or on motion of
any interested party within five (5) years
from the date it becomes final and
executory
Execution is done through the regular or
special sheriff. But alternatively, the
Secretary, the Commission, any Labor
Arbiter, the Regional Director or the
Director of the Bureau of Labor Relations
in appropriate cases may deputize the

Philippine National Police or any law
enforcement agencies in the enforcement
of final awards, orders or decisions.
1.1 Article 224 is Execution, Not Appeal,
Procedure
1.2 Both Party and Counsel Should Be
Notified
2. EXECUTION UPON FINALITY OF
DECISION OR ORDER
Section 1. Execution Upon Finality of Decision
or Order. - a) A writ of execution may be
issued motu proprio or on motion, upon a
decision or order that finally disposes of the
action or proceedings after the parties and
their counsels or authorized representatives
are furnished with copies of the decision or
order in accordance with these Rules, but only
after the expiration of the period to appeal if
no appeal has been filed, as shown by the
certificate of finality. If an appeal has been
filed, a writ of execution may be issued when
there is an entry of judgment as provided for
in Section 14 of Rule VII.
b) No motion for execution shall be
entertained nor a writ of execution be issued
unless the Labor Arbiter or the Commission is
in possession of the records of the case which
shall include an entry of judgment if the case
was appealed; except that, as provided for in
Section 14 of Rule V and Section 6 of this
Rule, and in those cases where partial
execution is allowed by law, the Labor Arbiter
shall retain duplicate original copies of the
decision to be implemented and proof of
service thereof for the purpose of immediate
enforcement.
Section 2. Pre-Execution Conference. - Within
two (2) working days from receipt of a motion
for the issuance of a writ of execution, and
subject to Section 1, paragraph (b) of this
Rule, the Labor Arbiter shall schedule a pre-
execution conference or hearing to thresh out
matters relevant to execution, including the
computation of the award.
Section 3. Form and Contents of a Writ of
Execution. - The writ of execution must be
issued in the name of the Republic of the
Philippines signed by the Commission or
Labor Arbiter requiring the Sheriff to execute
the decision, order, or award of the
LABOR RELATIONS: Azucena Vol. II
Commission or Labor Arbiter, and must
contain the dispositive portion thereof, the
amount, if any, to be demanded, and all
lawful fees to be collected from the losing
party or any other person required by law to
obey the same.
Section 4. Computation During Execution. -
Where further computation of the award in
the decision, resolution or order is necessary
during the course of the execution
proceedings, no writ of execution shall be
issued until after the computation has been
approved by the Labor Arbiter in an order
issued after the parties have been duly
notified and heard on the matter.
Section 5. Execution of Monetary Judgment. -
a) Immediate payment on demand. - The
Sheriff shall enforce a monetary judgment by
demanding the immediate payment of the full
amount stated in the writ of execution and all
lawful fees from the losing party or any other
person required by law to obey the same.
b) In the event of failure or refusal of the
losing party to pay the judgment award, the
Sheriff shall immediately proceed against the
cash deposit or surety bond posted by the
losing party, if any;
c) If the bonding company refuses to comply
with the writ of execution, then its president
and officers or authorized representatives
shall be cited for contempt, and the bonding
company shall be barred from transacting
business with the Commission;
d) Should the cash deposit or surety bond be
insufficient, or in case the surety bond cannot
be proceeded against for any reason, the
Sheriff shall, within five (5) days from
demand, execute the monetary judgment by
levying on the property, personal and real, of
the losing party not exempt from execution,
sufficient to cover the judgment award, which
may be disposed of for value at a public
auction to the highest bidder.
e) Proceeds of execution shall be deposited
with the Cashier of the concerned Division or
Regional Arbitration Branch, or with an
authorized depositary bank. Where payment
is made in the form of a check, the same shall
be payable to the Commission.
Section 7. Enforcement of Writ of Execution. -
In executing a decision, resolution or order,

the Sheriff, or other authorized officer acting
as Sheriff of the Commission, shall be guided
strictly by these Rules, and by the Manual on
Execution of Judgment, which shall form part
of these Rules. In the absence of applicable
rules, the Rules of Court, as amended, shall
be applied in a suppletory manner.
Section 8. Execution By Motion or By
Independent Action. - A decision or order may
be executed on motion within five (5) years
from the date it becomes final and executory.
After the lapse of such period, the judgment
shall become dormant, and may only be
enforced by an independent action within a
period of ten (10) years from date of its
finality.
Section 10. Effect of Petition for Certiorari on
Execution. - A petition for certiorari with the
Court of Appeals or the Supreme Court shall
not stay the execution of the assailed decision
unless a restraining order is issued by said
courts.
Section 11. Resolution of Motion to Quash. -
The mere filing of a motion to quash shall not
stay execution proceedings. A motion to
quash shall be resolved by the Labor Arbiter
within ten (10) working days from submission
of said motion for resolution.
3. APPEAL ON THE EXECUTION OF
DECISION; SUPERVENING EVENTS
A judgment becomes final and executory
by operation of law, not by judicial
declaration. Accordingly, finality of
judgment becomes a fact upon the lapse
of the reglementary period of appeal if no
appeal is perfected. In such a situation,
the prevailing party is entitled as a matter
of right to a writ of execution; and
issuance thereof is a ministerial duty,
compellable by mandamus.
4. GENERAL RULE: REGIONAL TRIAL
COURT CANNOT ISSUE INJUNCTION
AGAINST NLRC
Precedents abound confirming the rule
that said courts have no labor jurisdiction
to act on labor cases or various incidents
arising therefrom, including the execution
of decisions, awards or orders. Jurisdiction
to try and adjudicate such cases pertains
LABOR RELATIONS: Azucena Vol. II
exclusively to the proper labor official
concerned under the Department of Labor
and Employment. To hold otherwise is to
sanction split jurisdiction which is
obnoxious to the orderly administration of
justice.
4.1 Execution Over Property Owned Only
by Judgment Debtor; Remedies of Third
Party Claimant; The Yupangco Case
A third party whose property has been
levied upon by a sheriff to enforce a
decision against a judgment debtor is
afforded with several alternative
remedies to protect its interests. The third
party may avail himself of alternative
remedies cumulatively, and one will not
preclude the third party from availing
himself of the other alternative remedies
in the event he failed in the remedy first
availed of.
Thus, a third party may avail himself of
the following alternative remedies:
a) File a third party claim with the sheriff
of the Labor Arbiter, and
b) If the third party claim is denied, the
third party may appeal the denial to the
NLRC.
Even if a third party claim was denied, a
third party may still file a proper action
with a competent court to recover
ownership of the property illegally seized
by the sheriff.
The right of a third-party claimant to file
an independent action to vindicate his
claim of ownership over the properties
seized is reserved by Section 17 (now 16),
Rule 39 of the Rules of Court.
The aforesaid remedies are nevertheless
without prejudice to 'any proper action'
that a third-party claimant may deem
suitable to vindicate 'his claim to the
property.
Quite obviously, too, this 'proper action'
would have for its object the recovery of

ownership or possession of the property
seized by the sheriff, as well as damages
resulting from the allegedly wrongful
seizure and detention thereof despite the
third-party claim.
The remedies above mentioned are
cumulative and may be resorted to by a
third-party claimant independent of or
separately from and without need of
availing of the others.
4.2 RTC Injunction against Labor Arbiter
or NLRC, When Allowed
The regional trial court where the
reinvindicatory action is filed can issue an
injunction or temporary restraining order
against the execution ordered by a labor
arbiter or the NLRC.
The general rule that no court has the
power to interfere by injunction with the
judgments or decrees of another court
with concurrent or coordinate jurisdiction
possessing equal power to grant
injunctive relief, applies only when no
third-party claimant is involved.
Jurisprudence is likewise replete with
rulings that since the third-party claimant
is not one of the parties to the action, he
could not, strictly speaking, appeal from
the order denying his claim, but should
file a separate reinvindicatory action
against the execution creditor or the
purchaser of the property after the sale at
public auction, or a complaint for
damages against the bond filed by the
judgment creditor in favor of the sheriff.
4.3 Third Party Claim
Section 12. Third Party Claim. - A third party
claim shall be filed within five (5) days from
the last day of posting or publication of the
notice of execution sale; otherwise the claim
shall be forever barred.The third party
claimant shall execute an affidavit stating his
title to the property or right to possession
thereof with supporting evidence, and shall
file the same with the Sheriff and the
Commission or Labor Arbiter who issued the
writ of execution.Upon receipt of the third
LABOR RELATIONS: Azucena Vol. II
party claim, all proceedings, with respect to
the execution of the property subject of such
claim, shall automatically be suspended.The
Labor Arbiter who issued the writ may require
the third party claimant to adduce additional
evidence in support of his third party claim
and to post a cash or surety bond equivalent
to the amount of his claim, as provided for in
Section 6 of Rule VI, without prejudice to the
posting by the prevailing party of a
supersedeas bond in an amount equivalent to
that posted by the third party claimant.The
Labor Arbiter shall resolve the propriety of
such third party claim within ten (10) working
days from submission of said claim for
resolution.
4.4 Simulated Sale, Void Ab Initio
A third-party claim on a levied property
does not automatically prevent execution.
When a third-party claim is filed, the
sheriff is not bound to proceed with the
levy of the property unless the judgment
creditor or the latter's agent posts an
indemnity bond against the claim. Where
the bond is filed, the remedy of the third-
party claimant is to file an independent
reivindicatory action against the
judgment creditor or the purchaser of the
property at public auction.
________
Art. 225. Contempt powers of the
Secretary of Labor. In the exercise of his
powers under this Code, the Secretary of
Labor may hold any person in direct or
indirect contempt and impose the
appropriate penalties therefor.
________
Title III
BUREAU OF LABOR RELATIONS
Art. 226. Bureau of Labor Relations. The
Bureau of Labor Relations and the Labor
Relations Divisions in the regional offices
of the Department of Labor, shall have
original and exclusive authority to act, at
their own initiative or upon request of
either or both parties, on all inter-union
and intra-union conflicts, and all disputes,
grievances or problems arising from or
affecting labor-management relations in

all workplaces, whether agricultural or
non-agricultural, except those arising
from the implementation or interpretation
of collective bargaining agreements which
shall be the subject of grievance
procedure and/or voluntary arbitration.
The Bureau shall have fifteen (15)
working days to act on labor cases before
it, subject to extension by agreement of
the parties. (As amended by Section 14,
Republic Act No. 6715, March 21, 1989).
________
1. BLR JURISDICTION
The Bureau of Labor Relations (BLR) no
longer handles “all” labor-management
disputes; rather, its functions and
jurisdiction are largely confined to union
matters, collective bargaining registry,
and labor education.
Section 16. Bureau of Labor Relations. - The
Bureau of Labor Relations shall set policies,
standards, and procedures on the registration
and supervision of legitimate labor union
activities including denial, cancellation and
revocation of labor union permits. It shall also
set policies, standards, and procedure relating
to collective bargaining agreements, and the
examination of financial records of accounts
of labor organizations to determine
compliance with relevant laws.
2. INTER-UNION AND INTRA-UNION
DISPUTES; D.O. NO. 40-03
"Inter-Union Dispute" refers to any
conflict between and among legitimate
labor unions involving representation
questions for purposes of collective
bargaining or to any other conflict or
dispute between legitimate labor unions.
"Intra-Union Dispute" refers to any
conflict between and among union
members, including grievances arising
from any violation of the rights and
conditions of membership, violation of or
disagreement over any provision of the
union's constitution and by-laws, or
disputes arising from
chartering or affiliation of union.
LABOR RELATIONS: Azucena Vol. II
In inter/intra-union dispute the complaint
may be filed by a union or union
members; in a “related labor relations
dispute” the complaint may be filed by a
party-in-interest who is not necessarily a
union or union member.
Whether the dispute be of the first or the
second category, the complainant or
petition, if it involves an independent
union, a chartered local, or a worker’s
association, shall be filed with the DOLE
Regional Office where the labor
organization is registered. But if the
complaint involves a federation or an
industry/national union, it shall be filed
with the BLR itself.
2.1 D.O. No. 40-03
The Order appears to aim the following
specific objectives:
1. to simplify the formation and
registration of unions, especially
chartered locals
2. to simplify and expedite the holding of
certification elections
3. to promote responsible unionism,
particularly in administration of union
funds
4. to authorize union merger,
consolidation, and change of name
5. to authorize deregistration of collective
bargaining agreements
2.2 Effect of Pendency
Section 3. Effects of the filing/pendency of
inter/intra-union and other related labor
relations disputes. - The rights, relationships
and obligations of the parties litigants against
each other and other parties-in-interest prior
to the institution of the petition shall continue
to remain during the pendency of the petition
and until the date of finality of the decision
rendered therein.
2.3 Appeal

Section 16. Appeal. - The decision of the Med-
Arbiter and Regional Director may be
appealed to the Bureau by any of the parties
within ten (10) days from receipt thereof,
copy furnished the opposing party. The
decision of the Bureau Director in the exercise
of his/her original jurisdiction may be
appealed to the Office of the Secretary by any
party within the same period, copy furnished
the opposing party.
The appeal shall be verified under oath and
shall consist of a memorandum of appeal
specifically stating the grounds relied upon by
the appellant, with supporting arguments and
evidence.
Section 17. Where to file appeal. - The
memorandum of appeal shall be filed in the
Regional Office or Bureau where the
complaint or petition originated. Within
twenty-four (24) hours from receipt of the
memorandum of appeal, the Bureau or
Regional Director shall cause the transmittal
thereof together with the entire records of the
case to the Office of the Secretary or the
Bureau, as the case may be.
Section 18. Finality of Decision. - Where no
appeal is filed within the ten-day period, the
Bureau and Regional Director or Med-Arbiter,
as the case may be, shall enter the finality of
the decision in the records of the case and
cause the immediate implementation thereof.
Section 19. Period to reply. - A reply to the
appeal may be filed by any party to the
complaint or petition within ten (10) days
from receipt of the memorandum of appeal.
The reply shall be filed directly with the
Bureau or the Office of the Secretary, as the
case may be.
Section 20. Decision of the Bureau/Office of
the Secretary. - The Bureau Director or the
Secretary, as the case may be, shall have
twenty (20) days from receipt of the entire
records of the case within which to decide the
appeal. The filing of the memorandum of
appeal from the decision of the MedArbiter or
Regional Director and Bureau Director stays
the implementation of the assailed decision.
The Bureau or Office of the Secretary may call
the parties to a clarificatory hearing in aid of
its appellate
jurisdiction.
LABOR RELATIONS: Azucena Vol. II
Section 21. Finality of Decision of
Bureau/Office of the Secretary. - The decision
of the Bureau or the Office of the Secretary
shall become final and executory after ten
(10) days from receipt thereof by the parties,
unless a motion for its reconsideration is filed
by any party therein within the same period.
Only one (1) motion for reconsideration of the
decision of the Bureau or the Office of the
Secretary in the exercise of their appellate
jurisdiction shall be allowed.
Section 22. Execution of decision. - The
decision of the Med-Arbiter and Regional
Director shall automatically be stayed
pending appeal with the Bureau. The decision
of the Bureau in the exercise of its appellate
jurisdiction shall be immediately executory
upon issuance of entry of final judgment.
The decision of the Bureau in the exercise of
its original jurisdiction shall automatically be
stayed pending appeal with the Office of the
Secretary. The decision of the Office of the
Secretary shall be immediately executory
upon issuance of entry of final judgment.
3. EXTENT OF BLR AUTHORITY
In the interest of industrial peace and for
the promotion of the salutary
constitutional objectives of social justice
and protection to labor, the competence
of the governmental entrusted with
supervision over disputes involving
employers and employees as well as
"inter-union and intra-union conflicts," is
broad and expensive.
4. KATARUNGANG PAMBARANGAY,
NOT APPLICABLE TO LABOR
DISPUTES
Presidential Decree No. 1508 applies only
to courts of justice and not to labor
relations commissions or labor arbitrators’
offices.
Note: Conciliation-mediation is now done
by NCMV not BLR.
Instead of simplifying labor proceedings
designed at expeditious settlement or
referral to the proper court or office to

decide it finally, the position taken by the
petitioner would only duplicate the
conciliation proceedings and unduly delay
the disposition of the labor case.
________
Art. 227. Compromise agreements. Any
compromise settlement, including those
involving labor standard laws, voluntarily
agreed upon by the parties with the
assistance of the Bureau or the regional
office of the Department of Labor, shall
be final and binding upon the parties. The
National Labor Relations Commission or
any court, shall not assume jurisdiction
over issues involved therein except in
case of non-compliance thereof or if there
is prima facie evidence that the
settlement was obtained through fraud,
misrepresentation, or coercion.
________
1. COMPROMISE AGREEMENTS
The assistance of the BLR or the regional
office of the DOLE in the execution of a
compromise settlement is a basic
requirement; without it, there can be no
valid compromise settlement.
The NLRC or any court shall not assume
jurisdiction over issues involved therein,
except:
a) in case of noncompliance with the
compromise agreement, or
b) if there is prima facie evidence that the
settlement was obtained through fraud,
misrepresentation, or coercion.
Along the same line, the Court reiterated
in 2005:
There are legitimate waivers that represent a
voluntary and reasonable settlement of a
worker’s claim which should be respected by
the courts as the law between the parties.
Indeed, not all quitclaims are per se invalid or
against public policy, except (1) where there
is clear proof that the waiver was wangled
from an unsuspecting or gullible person, or (2)
where the terms of settlement are
unconscionable on their faces; in these cases,
LABOR RELATIONS: Azucena Vol. II
the law will step in to annul the questionable
transactions. Such quitclaims are regarded as
ineffective to bar the workers from claiming
the full measure of their legal rights.
2. FORMAL REQUIREMENTS OF
COMPROMISE AGREEMENT
Compromise agreements involving labor
standards cases must be reduced to
writing and signed in the presence of the
Regional Director or his duly authorized
representative.
3. VALID COMPROMISE AND
QUITCLAIM
The law looks with disfavor upon
quitclaims and releases by employees
who are inveigled or pressured into
signing them by unscrupulous employers
seeking to evade their legal
responsibilities. On the other hand, there
are legitimate waivers that represent a
voluntary settlement of laborer's claims
that should be respected by the courts as
the law between the parties.
Not all waivers and quitclaims are invalid
as against public policy. If the agreement
was voluntarily entered into and
represents a reasonable settlement, it is
binding on the parties and may not later
be disowned simply because of a change
of mind. It is only where there is clear
proof that the waiver was wangled from
an unsuspecting or gullible person, or the
terms of settlement are unconscionable
on its face, that the law will step in to
annul the questionable transaction. But
where it is shown that the person making
the waiver did so voluntarily, with full
understanding of what he was doing, and
the consideration for the quitclaim is
credible and reasonable, the transaction
must be recognized as a valid and binding
undertaking.
4. COMPROMISE SHOULD BE DULY
AUTHORIZED
Section 9. Authority to Bind Party. - Attorneys
and other representatives of parties shall
 LABOR RELATIONS: Azucena Vol. II
have authority to bind their clients in all Section 16, Batas Pambansa Bilang 130,
matters of procedure; but they cannot, August 21, 1981)
without a special power of attorney or express ________
consent, enter into a compromise agreement
with the opposing party in full or partial
Art. 229. Issuance of subpoenas. The
discharge of a client's claim.
Bureau shall have the power to require
the appearance of any person or the
The authority to compromise cannot
production of any paper, document or
lightly be presumed and should be duly
matter relevant to a labor dispute under
established by evidence.
its jurisdiction, either at the request of
any interested party or at its own
5. RULINGS ON COMPROMISE
initiative.
SETTLEMENTS SUMMARIZED
________
6. WHEN TO EFFECT COMPROMISE:
Art. 230. Appointment of bureau
FINAL DECISION, NEGOTIABLE?
personnel. The Secretary of Labor and
Employment may appoint, in addition to
A compromise agreement may be
the present personnel of the Bureau and
effected at any stage of the proceedings
the Industrial Relations Divisions, such
and even when there is already a final
number of examiners and other assistants
and executor judgment.
as may be necessary to carry out the
purpose of the Code. (As amended by
7. OPTIONS WHEN COMPROMISE
Section 15, Republic Act No. 6715, March
AGREEMENTS IS VIOLATED
21, 1989)
________
Under Article 2041 of the Civil Code,
should a party fail or refuse to comply
Art. 231. Registry of unions and file of
with the terms of a compromise or
collective bargaining agreements. The
amicable settlement, the other party
Bureau shall keep a registry of legitimate
could either: (1) enforce the compromise
labor organizations. The Bureau shall also
by a writ of execution, or (2) regard it as
maintain a file of all collective bargaining
rescinded and so insist upon his original
agreements and other related
demand.
agreements and records of settlement of
________
labor disputes and copies of orders and
decisions of voluntary arbitrators. The file
[Art. 228. Indorsement of cases to Labor
shall be open and accessible to interested
Arbiters.
parties under conditions prescribed by
a. Except as provided in paragraph (b) of
the Secretary of Labor and Employment,
this Article, the Labor Arbiter shall
provided that no specific information
entertain only cases endorsed to him for
submitted in confidence shall be
compulsory arbitration by the Bureau or
disclosed unless authorized by the
by the Regional Director with a written
Secretary, or when it is at issue in any
notice of such indorsement or non-
judicial litigation, or when public interest
indorsement. The indorsement or non-
or national security so requires.
indorsement of the Regional Director may
be appealed to the Bureau within ten (10)
Within thirty (30) days from the execution
working days from receipt of the notice.
of a Collective Bargaining Agreement, the
parties shall submit copies of the same
b. The parties may, at any time, by
directly to the Bureau or the Regional
mutual agreement, withdraw a case from
Offices of the Department of Labor and
the Conciliation Section and jointly submit
Employment for registration,
it to a Labor Arbiter, except deadlocks in
accompanied with verified proofs of its
collective bargaining.](Repealed by
posting in two conspicuous places in the

place of work and ratification by the
majority of all the workers in the
bargaining unit. The Bureau or Regional
Offices shall act upon the application for
registration of such Collective Bargaining
Agreement within five (5) calendar days
from receipt thereof. The Regional Offices
shall furnish the Bureau with a copy of the
Collective Bargaining Agreement within
five (5) days from its submission.
The Bureau or Regional Office shall assess
the employer for every Collective
Bargaining Agreement a registration fee
of not less than one thousand pesos
(P1,000.00) or in any other amount as
may be deemed appropriate and
necessary by the Secretary of Labor and
Employment for the effective and efficient
administration of the Voluntary Arbitration
Program. Any amount collected under this
provision shall accrue to the Special
Voluntary Arbitration Fund.
The Bureau shall also maintain a file and
shall undertake or assist in the
publication of all final decisions, orders
and awards of the Secretary of Labor and
Employment, Regional Directors and the
Commission. (As amended by Section 15,
Republic Act No. 6715, March 21, 1989)
________
REGISTRY OF UNIONS AND CBAs
The Bureau shall keep a registry of
legitimate labor organizations.
The Bureau shall also maintain a file of all
Collective Bargaining Agreements (CBAs)
and other related agreements.
________
Art. 232. Prohibition on certification
election. The Bureau shall not entertain
any petition for certification election or
any other action which may disturb the
administration of duly registered existing
collective bargaining agreements
affecting the parties except under Articles
253, 253-A and 256 of this Code. (As
amended by Section 15, Republic Act No.
6715, March 21, 1989)
LABOR RELATIONS: Azucena Vol. II
________
THE CONTRACT-BAR RULE
Article 232 speaks of the contract-bar rule
which means that while a valid and
registered CBA is subsisting, the Bureau is
not allowed to hold an election contesting
the majority status of the incumbent
union. The existence of the CBA does not
allow, that is, it bars, the holding of the
inter-union electoral contest. The election
is legally allowed, says Art. 256, only
during the “freedom period” which refers
to the last 60 days of the fifth year of a
CBA.
The objective of the rule, obviously, is to
minimize union “politicking” until the
proper time comes.
________
Art. 233. Privileged communication.
Information and statements made at
conciliation proceedings shall be treated
as privileged communication and shall
not be used as evidence in the
Commission. Conciliators and similar
officials shall not testify in any court or
body regarding any matters taken up at
conciliation proceedings conducted by
them.
________
Title IV
LABOR ORGANIZATIONS
Chapter I
REGISTRATION AND CANCELLATION
Art. 234. Requirements of Registration. - A
federation, national union or industry or
trade union center or an independent
union shall acquire legal personality and
shall be entitled to the rights and
privileges granted by law to legitimate
labor organizations upon issuance of the
certificate of registration based on the
following requirements:
(a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their
addresses, the principal address of the
labor organization, the minutes of the
organizational meetings and the list of
the workers who participated in such
meetings;
(c) In case the applicant is an
independent union, the names of all its
members comprising at least twenty
percent (20%) of all the employees in the
bargaining unit where it seeks to operate;
(d) If the applicant union has been in
existence for one or more years, copies of
its annual financial reports; and
(e) Four copies of the constitution and by-
laws of the applicant union, minutes of its
adoption or ratification, and the list of the
members who participated in it. (As
amended by Republic Act No. 9481, May
25, 2007)
________
Art. 234-A. Chartering and Creation of a
Local Chapter. - A duly registered
federation or national union may directly
create a local chapter by issuing a charter
certificate indicating the establishment of
the local chapter. The chapter shall
acquire legal personality only for
purposes of filing a petition for
certification election from the date it was
issued a charter certificate.
The chapter shall be entitled to all other
rights and privileges of a legitimate labor
organization only upon the submission of
the following documents in addition to its
charter certificate:
(a) The names of the chapter's officers,
their addresses, and the principal office of
the chapter; and
(b) The chapter's constitution and by-
laws: Provided, That where the chapter's
constitution and by-laws are the same as
that of the federation or the national
union, this fact shall be indicated
accordingly.
LABOR RELATIONS: Azucena Vol. II
The additional supporting requirements
shall be certified under oath by the
secretary or treasurer of the chapter and
attested by its president.
________
Art. 235. Action on application. The
Bureau shall act on all applications for
registration within thirty (30) days from
filing.
All requisite documents and papers shall
be certified under oath by the secretary
or the treasurer of the organization, as
the case may be, and attested to by its
president.
________
Art. 236. Denial of registration; appeal.
The decision of the Labor Relations
Division in the regional office denying
registration may be appealed by the
applicant union to the Bureau within ten
(10) days from receipt of notice thereof.
________
Art. 237. Additional requirements for
federations or national unions. Subject to
Article 238, if the applicant for
registration is a federation or a national
union, it shall, in addition to the
requirements of the preceding Articles,
submit the following:
a. Proof of the affiliation of at least ten
(10) locals or chapters, each of which
must be a duly recognized collective
bargaining agent in the establishment or
industry in which it operates, supporting
the registration of such applicant
federation or national union; and
b. The names and addresses of the
companies where the locals or chapters
operate and the list of all the members in
each company involved.
________
[Art. 238. Conditions for registration of
federations or national unions. No
federation or national union shall be
registered to engage in any organization
activity in more than one industry in any

area or region, and no federation or
national union shall be registered to
engage in any organizational activity in
more than one industry all over the
country.
The federation or national union which
meets the requirements and conditions
herein prescribed may organize and
affiliate locals and chapters without
registering such locals or chapters with
the Bureau.
Locals or chapters shall have the same
rights and privileges as if they were
registered in the Bureau, provided that
such federation or national union
organizes such locals or chapters within
its assigned organizational field of activity
as may be prescribed by the Secretary of
Labor.
The Bureau shall see to it that federations
and national unions shall only organize
locals and chapters within a specific
industry or union.] (Repealed by
Executive Order No. 111, December 24,
1986)
________
1. LABOR ORGANIZATION: TWO
BROAD PURPOSES
A “labor organization” is not always a
union; it may be an “association of
employees.” And, the purpose is not only
or necessarily “collective bargaining” but
also dealing with employers concerning
terms and conditions of employment.
"Labor Organization" refers to any union
or association of employees in the private
sector which exists in whole or in part for
the purpose of collective bargaining,
mutual aid, interest, cooperation,
protection, or other lawful purposes.
"Legitimate Labor Organization" refers to
any labor organization in the private
sector registered or reported with the
Department in accordance with Rules III
and IV of these Rules.
LABOR RELATIONS: Azucena Vol. II
"Union" refers to any labor organization in
the private sector organized for collective
bargaining and for other legitimate
purposes.
We should note that not every union is
“legitimate;” only those properly
registered are considered LLO. But non-
registration does not mean it is
“illegitimate;” it simply is unregistered
and has no legal personality. It exists
legally but does not possess the rights of
an LLO.
"Exclusive Bargaining Representative"
refers to a legitimate labor union duly
recognized or certified as the sole and
exclusive bargaining representative or
agent of all the employees in a bargaining
unit.
"Workers' Association" refers to an
association of workers organized for the
mutual aid and protection of its members
or for any legitimate purpose other than
collective bargaining.
"Legitimate Workers' Association" refers
to an association of workers organized for
mutual aid and protection of its members
or for any legitimate purpose other than
collective bargaining registered with the
Department in accordance with Rule III,
Sections 2-C and 2-D of these Rules.
1.1 Distinction Between “Collective
Bargaining” and “Dealing with Employer”
To bargain collectively is a right that may
be acquired by a labor organization after
registering itself with the Department of
Labor and Employment and after being
recognized or certified by DOLE as the
exclusive bargaining representative (EBR)
of the employees.
Dealing with employer, on the other
hand, is a generic description of
interaction between employer and
employees concerning grievances, wages,
work hours and other terms and
conditions of employment, even if the
employee’s group is not registered with
 LABOR RELATIONS: Azucena Vol. II
the Department of Labor and
Employment. 2.1 Unions at Enterprise Level

2. CLASSIFICATION OF LABOR A labor union at the enterprise level may

ORGANIZATIONS be created either by (a) independent
registration or (b) chartering.
"National Union/Federation" means any Independent registration is obtained by
labor organization with at least ten (10) the union organizers in an enterprise
locals or chapters each of which must be through their own action instead of
a duly recognized collective bargaining through issuance of a charter by a
agent. federation or national union. An
independent union has a legal personality
“Industry Union” means any group of of its own not derived from that of a
legitimate labor organizations operating federation.
within an identified industry, organized
for collective bargaining or for dealing "Independent Union" refers to a labor
with employers concerning terms and organization operating at the enterprise level
conditions of employment within an that acquired legal personality through
industry, or for participating in the independent registration under Article 234 of
the Labor Code and Rule III, Section 2-A of
formulation of social and employment
these Rules.
policies, standards and programs in such
industry, which is duly registered with the
Chartering, on the other hand, takes
Department. D.O. No. 40-03, however,
place when a duly registered federation
does not carry this term and this
or national union issue a charter to a
definition, although under Rule III, Section
union in an enterprise and registers the
2-B, “labor organizations operating within
creation of the chapter with the Regional
an identified industry may also apply for
Office where the applicants operates. The
registration as a federation or national
union recipient of the charter s called a
union within the specified industry by
chapter or local or chartered local. Its
submitting to the Bureau the same set of
legal personality is derived from the
documents (as required of federations
federation/ national union but it may
and national unions.)”
subsequently register itself
independently.
“Trade Union Center” means any group of
registered national unions or federations
3. REGISTRATION RATIONALE
organized for the mutual aid and
protection of its members, for assisting
A labor organization may be registered or
such members in collective bargaining, or
not. If registered with DOLE, it is
for participating in the formulation of
considered “legitimate labor organization”
social and employment policies,
(LLO). But the reverse us not true, that is,
standards and programs, which is duly
a labor organization is not “illegitimate”
registered with the Department.
just because it is unregistered. It is still
lawful organization and can deal with the
An “alliance” is an aggregation of unions
employer, but it has no legal personality
existing in one line of industry, or in a
to demand collective bargaining with the
conglomerate, a group of franchises, a
employer. It cannot petition for a
geographical area, or an industrial center.
certification election and cannot hold a
legal strike.
A “company-union” is a labor organization
which, in whole or in part, is employer-
Registration is merely a condition sine
controlled or employer-denominated.
qua non for the acquisition of legal
Article 248(d) prohibits being a company
personality by labor organizations,
union.

associations or unions and the possession
of the rights and privileges granted by
law to legitimate labor organizations.
Such requirement is a valid exercise of
the police power, because the activities in
which labor organizations, associations
and union of workers are engaged affect
public interest, which should be
protected.
3.1 Effect of Registration Under the
Corporation Law
A labor organization may be organized
under the Corporation Law as a non-stock
corporation and issued a certificate of
incorporation by the Securities and
Exchange Commission. But such
incorporation has only the effect of giving
to it juridical personality before regular
courts of justice. Such incorporation does
not grant the rights and privileges of a
legitimate labor organization.
4. WHERE TO REGISTER
Applications for registration of
independent labor unions, chartered
locals, and worker’s association shall be
filed with the Regional Office where the
applicant principally operates.
If the Regional Office denies the
application, the denial is appealable to
the Bureau and from there to the Court of
Appeals (not to the Secretary of Labor) if
proper grounds exist.
5. REGISTRATION REQUIREMENTS
5.1 Independent Labor Union
Section 2. Requirements for application. - A.
The application for registration of an
independent labor union shall be
accompanied by the following documents:
(a) the name of the applicant labor union, its
principal address, the name of its officers and
their respective addresses, approximate
number of employees in the bargaining unit
where it seeks to operate, with a statement
LABOR RELATIONS: Azucena Vol. II
that it is not reported as a chartered local of
any federation or national union;
(b) the minutes of the organizational
meeting(s) and the list of employees who
participated in the said meeting(s);
(c) the name of all its members comprising at
least 20% of the employees in the bargaining
unit;
(d) the annual financial reports if the applicant
has been in existence for one or more years,
unless it has not collected any amount from
the members, in which case a statement to
this effect shall be included in the application;
(e) the applicant's constitution and by-laws,
minutes of its adoption or ratification, and the
list of the members who participated in it. The
list of ratifying members shall be dispensed
with where the constitution and by-laws was
ratified or adopted during the organizational
meeting. In such a case, the factual
circumstances of the ratification shall be
recorded in the minutes of the organizational
meeting(s).
5.2 Federation or National Union
B. The application for registration of
federations and national unions shall be
accompanied by the following documents:
(a) a statement indicating the name of the
applicant labor union, its principal address,
the name of its officers and their respective
addresses;
(b) the minutes of the organizational
meeting(s) and the list of employees who
participated in the said meeting(s);
(c) the annual financial reports if the applicant
union has been in existence for one or more
years, unless it has not collected any amount
from the members, in which case a statement
to this effect shall be included in the
application;
(d) the applicant union's constitution and by-
laws, minutes of its adoption or ratification,
and the list of the members who participated
in it. The list of ratifying members shall be
dispensed with where the constitution and by-
laws was ratified or adopted during the
organizational meeting(s). In such a case, the
factual circumstances of the ratification shall

be recorded in the minutes of the
organizational meeting(s);
(e) the resolution of affiliation of at least ten
(10) legitimate labor organizations, whether
independent unions or chartered locals, each
of which must be a duly certified or
recognized bargaining agent in the
establishment where it seeks to operate; and
(f) the name and addresses of the companies
where the affiliates operate and the list of all
the members in each company involved.
Labor organizations operating within an
identified industry may also apply for
registration as a federation or national union
within the specified industry by submitting to
the Bureau the same set of documents.
5.3 Worker’s Association
C. The application for registration of a
workers' association shall be accompanied by
the following documents:
(a) the name of the applicant association, its
principal address, the name of its officers and
their respective addresses;
(b) the minutes of the organizational
meeting(s) and the list of members who
participated therein;
(c) the financial reports of the applicant
association if it has been in existence for one
or more years, unless it has not collected any
amount from the members, in which case a
statement to this effect shall be included in
the application;
(d) the applicant's constitution and by-laws to
which must be attached the names of
ratifying members, the minutes of adoption or
ratification of the constitution and by-laws
and the date when ratification was made,
unless ratification was done in the
organizational meeting(s), in which case such
fact shall be reflected in the minutes of the
organizational meeting(s).
5.4 Chartered Local
5.4a When Does a Chartered Local
Become an LLO
LABOR RELATIONS: Azucena Vol. II
The acquisition of legal personality
cannot be the date of filing of the
documents. Section 3 (Department Order
No. 9, 1997) was defeating the very
purpose of registration of unions which
was to block off fly-by-night unions.
5.4b When Does a Chartered Local
Acquire Legal Personality under D.O. No.
40, Series of 2003
Section 8. Effect of registration. - The labor
union or workers' association shall be deemed
registered and vested with legal personality
on the date of issuance of its certificate of
registration or certificate of creation of
chartered local
The determinative date now is not the
date the required documents were filed
but the date the certificate was issued.
And the date of issuance is likely to be
the date the documents were filed
because D.O. No. 40-D-05, supplementing
D.O. No. 40-03, requires the Regional
Office or the Bureau to either approve or
deny the application for registration
“within one (1) day from receipt thereof.”
5.4c Recognition by BLR not a Ministerial
Duty
5.4d Chartered Local Has to be
Registered; Requirements
5.4e Registration Requirements for a
Chartered Local
E. A duly-registered federation or national
union may directly create a chartered local by
submitting to the Regional Office two (2)
copies of the following:
(a) A charter certificate issued by the
federation or national union indicating the
creation or establishment of the local/chapter;
(b) The names of the local/chapter’s officers,
their addresses, and the principal office of the
local/chapter; and
(c) The local/chapter’s constitution and by-
laws, provided that where the local/chapter’s
constitution and by-laws is the same as that

of the federation or national union, this fact
shall be indicated accordingly.
All of the foregoing supporting requirements
shall be certified under oath by the Secretary
or the Treasurer of the local/chapter and
attested by its President. (As amended by DO
40-B-03.)
5.4f Requirements Relaxed
The creation of a local does not need
subscription by a minimum number of
members. The 20 percent initial
membership mentioned in Article 234(c)
is required of an independent union but
not of a chartered local.
5.5 Union’s Legitimacy not Subject to
Collateral Attack
Such legal personality may be questioned
only through an independent petition for
cancellation of union registration in
accordance with Rule XIV of these Rules, and
not by way of collateral attack in petition for
certification election proceedings under Rule
VIII.
6. COLLECTIVE BARGAINING UNIT
(CBU)
"Bargaining Unit" refers to a group of
employees sharing mutual interests
within a given employer unit, comprised
of all or less than all of the entire body of
employees in the employer unit or any
specific occupational or geographical
grouping within such employer unit.
While officers lead and represent a union,
a union represents a CBU. The
representative is the union; the group
represented is the CBU. The
representative union, once determined,
will represent even the members of other
unions as long as they are part of the
CBU. This is why the representative union
(also called bargaining agent or majority
union) is called “exclusive bargaining
representative” (EBR).
7. CONSTITUION, BY-LAWS, AND
REGULATIONS
LABOR RELATIONS: Azucena Vol. II
Like other voluntary associations, labor
unions have the right to adopt
constitutions, rules, and by-laws within
the scope of the lawful purposes of the
union and bind their members thereby,
provided they are reasonable, uniform,
and not discriminatory, and provided they
are not contrary to public policy or the
law of the land.
The articles of agreement of a labor
union, whether called a constitution,
charter, by-laws, or any other name,
constitutes a contract between the
members which the courts will enforce, if
not immoral or contrary to public policy or
the law of the land.
A union’s constitution and by-laws govern
the relationship between and among its
members. As in the interpretation of
contracts, if the terms are clear and leave
no doubt as to the intentions of the
parties, the literal meaning of the
stipulation shall control.
7.1 Limitation to By-laws
Under Art. 234(e) it is implied that the
members are the ones to adopt or ratify
the union’s constitution and by-laws. It
being a governing law of the union, the
CBL should be democratically ratified.
7.2 Amendments
A union’s constitution and by-laws may be
amended, modified and extended by the
duly constituted union authorities under
the laws of the state, In the absence of
other requirements, and subject to vested
rights, a union constitution may be made,
changed, unmade, or superseded by a
majority vote of the members or its
constituent body.
Under Art. 241(d), major policy questions
are to be deliberated upon and decided
by secret ballot by the members.
8. PROVISIONS COMMON TO THE
REGISTRATION OF LABOR

ORGANIZATIONS AND WORKER’S
ASSOCIATION
8.1 Attestation, Fee, Copies of Documents
Section 1. Attestation requirements. - The
application for registration of labor unions and
workers' associations, notice for change of
name, merger, consolidation and affiliation
including all the accompanying documents,
shall be certified under oath by its Secretary
or Treasurer, as the case may be, and
attested to by its President.
Section 3. Accompanying documents. - One
(1) original copy and two (2) duplicate copies
of all documents accompanying the
application or notice shall be submitted to the
Regional Office or the Bureau.
8.2 Action on the Application/Notices
Section 4. Action on the application/notice. -
The Regional Office or the Bureau, as the case
may be, shall act on all applications for
registration or notice of change of name,
affiliation, merger and consolidation within
ten (10) days from receipt either by: (a)
approving the application and issuing the
certificate of registration/acknowledging the
notice/report; or (b) denying the
application/notice for failure of the applicant
to comply with the requirements for
registration/notice.
8.3 Denial of Application/Return of Notice
Section 5. Denial of Application/Return of
Notice. - Where the documents supporting the
application for registration/notice of change of
name, affiliation, merger and consolidation
are incomplete or do not contain the required
certification and attestation, the Regional
Office or the Bureau shall, within five (5) days
from receipt of the application/notice, notify
the applicant/labor organization concerned in
writing of the necessary requirements and
complete the same within thirty (30) days
from receipt of notice. Where the
applicant/labor organization concerned fails to
complete the requirements within the time
prescribed, the application for registration
shall be denied, or the notice of change of
name, affiliation, merger and consolidation
returned, without prejudice to filing a new
application or notice.
LABOR RELATIONS: Azucena Vol. II
Section 6. Form of Denial of
Application/Return of Notice; Appeal. - The
notice of the Regional Office or the Bureau
denying the application for
registration/returning the notice of change of
name, affiliation, merger or consolidation shall
be in writing stating in clear terms the
reasons for the denial or return.
8.4 Appeal
Section 6. Form of Denial of
Application/Return of Notice; Appeal. - The
denial may be appealed to the Bureau if
denial is made by the Regional Office or to the
Secretary if denial is made by the Bureau,
within ten (10) days from receipt of such
notice, on the ground of grave abuse of
discretion or violation of these Rules.
Section 7. Procedure on appeal. - The
memorandum of appeal shall be filed with the
Regional Office or the Bureau that issued the
denial/return of notice. The memorandum of
appeal together with the complete records of
the application for registration/notice of
change of name, affiliation, merger or
consolidation, shall be transmitted by the
Regional Office to the Bureau or by the
Bureau to the Office of the Secretary, within
twenty-four (24) hours from receipt of the
memorandum of appeal.
The Bureau or the Office of the Secretary shall
decide the appeal within twenty (20) days
from receipt of the records of the case.
9. AFFILIATION
An affiliate is an independently registered
union that enters into an agreement of
affiliation with a federation or a national
union. It also refers to a chartered local
which applies for and is granted an
independent registration but does not
disaffiliate from its mother federation or
national union.
A union, either an independent or a local,
affiliates with a federation or national
union for a number of reasons. The most
common ones are to secure support or
assistance particularly during the
formative stage of unionization; or to
utilize expertise in preparing and pursuing
bargaining proposals; or to marshal mind

and manpower in the course of a group
action such as strike.
The relationship between a local or
chapter and the labor federation or
national union is generally understood to
be that of agency, where the local is the
principal and the federation the agent.
9.1 Report of Affiliation; Requirements
Section 6. Report of Affiliation with
federations or national unions; Where to file. -
The report of affiliation of an independently
registered labor union with a federation or
national union shall be filed with the Regional
Office that issued its certificate of registration.
Section 7. Requirements of affiliation. - The
report of affiliation of independently
registered labor unions with a federation or
national union shall be accompanied by the
following documents:
(a) resolution of the labor union's board of
directors approving the affiliation;
(b) minutes of the general membership
meeting approving the affiliation;
(c) the total number of members comprising
the labor union and the names of members
who approved the affiliation;
(d) the certificate of affiliation issued by the
federation in favor of the independently
registered labor union; and
(e) written notice to the employer concerned
if the affiliating union is the incumbent
bargaining agent.
10. DISAFFILIATION
The sole essence of affiliation is to
increase, by collective action, the
common bargaining power of local unions
for the effective enhancement and
protection of their interests. Admittedly,
there are times when without succor and
support local unions may find it hard,
unaided by other support groups, to
secure justice for themselves.
LABOR RELATIONS: Azucena Vol. II
Yet the local unions remain the basic units
of association, free to serve their own
interests subject to the restraints imposed
by the constitution and by-laws of the
national federation, and free also to
renounce the affiliation upon the terms
laid down in the agreement which
brought such affiliation into existence.
To disaffiliate is a right, but to observe the
terms of affiliation is an obligation
10.1 Local Union is the Principal,
Federation the Agent
Disaffiliation of employees from their
mother union and their formation into a
new union do not terminate their status
as employees of the corporation, as the
employees and members of the local
union did not form a new union but
merely exercised their right to register
their local union.
10.2 When to Disaffiliate
While it is true that a local union is free to
serve the interest of all its members and
enjoys the freedom to disaffiliate, such
right to disaffiliate may be exercised and
is thus considered a protected labor
activity only when warranted by
circumstances. Generally, a labor union
may disaffiliate from the mother union to
form a local or independent union only
during the 60-day freedom period
immediately preceding the expiration of
the CBA.
The “freedom period” refers to the last
60-days of the fifth and last year of a
CBA.
But even before the onset of the freedom
period (and despite the closed-shop
provision in the CBA between the mother
union and management) disaffiliation
may still be carried out, but such
disaffiliation must be effected by a
majority of the members in the
bargaining unit.

This ruling is true ONLY if the contract of
affiliation does not specify the period for
possible disaffiliation.
10.3 Disaffiliation must be by Majority
Decision
Article 241(d) applies to disaffiliation,
thus, it has to be decided by the entire
membership through secret balloting.
10.4 Disaffiliation: Effect on Legal Status
When a union which is not independently
registered disaffiliates from the
federation, it is not entitled to the rights
and privileges granted to a legitimate
labor organization. It cannot file a petition
for certification election.
10.5 Disaffiliation: Effect on Union Dues
The obligation of an employee to pay
union dues is coterminous with his
affiliation or membership.
A contract between an employer and the
parent organization as bargaining agent
for the employees is terminated by the
disaffiliation of the local of which the
employees are members.
10.6 Disaffiliation: Effect on Existing CBA;
the “Substitutionary” Doctrine
The “substitutionary doctrine” provides
that the employees cannot revoke the
validly executed collective bargaining
contract with their employer by the
simple expedient of changing their
bargaining agent. The new agent must
respect the contract.
11. REVOCATION OF CHARTER
A federation, national union or workers’
association may revoke the charter issued
to a local/chapter or branch by serving on
the latter a verified notice of revocation,
copy furnished the Bureau, on the ground
of disloyalty or such other grounds as
may be specified in the constitution and
bylaws of the federation, national union
LABOR RELATIONS: Azucena Vol. II
or workers’ association. The revocation
shall divest the local/chapter of its legal
personality upon receipt of the notice by
the Bureau, unless in the meantime the
local/chapter has acquired independent
registration in accordance with these
Rules.
11.1 Effect of Cancellation of Registration
of Federation or National Union on
Locals/Chapter
The cancellation of registration of a
federation or national union shall operate
to divest its local/chapter of their status
as legitimate labor organizations, unless
the locals/chapters are covered by a duly
registered collective bargaining
agreement.
12 MERGER AND CONSOLIDATION
Section 10. Effect of merger or consolidation. -
Where there is a merger of labor
organizations, the legal existence of the
absorbed labor organization(s) ceases, while
the legal existence of the absorbing labor
organization subsists. All the rights, interests
and obligations of the absorbed labor
organizations are transferred to the absorbing
organization.
Where there is consolidation, the legal
existence of the consolidating labor
organizations shall cease and a new labor
organization is created. The newly created
labor organization shall acquire all the rights,
interests and obligations of the consolidating
labor organizations.
Consolidation usually occurs between two
unions that are approximately the same
size, whereas merger often involves a
larger union merging with a smaller
union.
Why do unions merge? They merge for
reasons similar to those behind corporate
mergers.
First, a small union may merge with a
larger union in order to gain access to
greater resources and expertise.

Second, unions that have traditionally
competed with each other for members
may merge in order to eliminate inter-
organizational conflicts.
Third, unions whose members’ skills have
been outmoded by technological and
economic changes may merge with a
stronger union in order to maintain job
security and institutional survival.
12.1 Notice of Merger/Consolidation of
Labor Organizations’; Where to File
Section 8. Notice of Merger/Consolidation of
labor organizations; Where to file. - Notice of
merger or consolidation of independent labor
unions, chartered locals and workers'
associations shall be filed with and recorded
by the Regional Office that issued the
certificate of registration/certificate of
creation of chartered local of either the
merging or consolidating labor organization.
Notice of merger or consolidation of
federations or national unions shall be filed
with and recorded by the Bureau.
12.2 Requirements of Notice of
Merger/Consolidation
The notice of merger of labor organizations
shall be accompanied by the following
documents:
(a) the minutes of merger convention or
general membership meeting(s) of all the
merging labor organizations, with the list of
their respective members who approved the
same; and
(b) the amended constitution and by-laws and
minutes of its ratification, unless ratification
transpired in the merger convention, which
fact shall be indicated accordingly.
12.3 Certificate of Registration
Section 10. Certificate of Registration. - The
certificate of registration issued to merged
labor organizations shall bear the registration
number of one of the merging labor
organizations as agreed upon by the parties
to the merger.
The certificate of registration shall indicate
the following: (a) the new name of the
LABOR RELATIONS: Azucena Vol. II
merged labor organization; (b) the fact that it
is a merger of two or more labor
organizations; (c) the name of the labor
organizations that were merged; (d) its office
or business address; and (e) the date when
each of the merging labor organization.
13. CHANGE OF NAME
Section 3. Notice of change of name of labor
organizations; Where to file. - The notice for
change of name of a registered labor
organization shall be filed with the Bureau or
the Regional Office where the concerned labor
organization's certificate of registration or
certificate of creation of a chartered local was
issued.
Section 4. Requirements for notice of change
of name. - The notice for change of name of a
labor organization shall be accompanied by
the following documents:
(a) proof of approval or ratification of change
of name; and
(b) the amended constitution and by-laws.
13.1 Effect of Change of Name
The change of name of a labor
organization shall not affect its legal
personality. All rights and obligations of a
labor organization under its old name
shall continue to be exercised by the
labor organization under its new name.
________
Art. 238. Cancellation of Registration. -
The certificate of registration of any
legitimate labor organization, whether
national or local, may be cancelled by the
Bureau, after due hearing, only on the
grounds specified in Article 239 hereof.
(As amended by Republic Act No. 9481,
May 25, 2007)
________
Art. 238-A. Effect of a Petition for
Cancellation of Registration. - A petition
for cancellation of union registration shall
not suspend the proceedings for
certification election nor shall it prevent
the filing of a petition for certification
election.

In case of cancellation, nothing herein
shall restrict the right of the union to seek
just and equitable remedies in the
appropriate courts. (As amended by
Republic Act No. 9481, May 25, 2007)
________
Art. 239. Grounds for Cancellation of
Union Registration. - The following may
constitute grounds for cancellation of
union registration:
(a) Misrepresentation, false statement or
fraud in connection with the adoption or
ratification of the constitution and by-laws
or amendments thereto, the minutes of
ratification, and the list of members who
took part in the ratification;
(b) Misrepresentation, false statements or
fraud in connection with the election of
officers, minutes of the election of
officers, and the list of voters;
(c) Voluntary dissolution by the members.
(As amended by Republic Act No. 9481,
May 25, 2007)
________
Art. 239-A. Voluntary Cancellation of
Registration. - The registration of a
legitimate labor organization may be
cancelled by the organization itself.
Provided, That at least two-thirds of its
general membership votes, in a meeting
duly called for that purpose to dissolve
the organization: Provided, further, That
an application to cancel registration is
thereafter submitted by the board of the
organization, attested to by the president
thereof. (As amended by Republic Act No.
9481, May 25, 2007)
________
1. CANCELLATION OF REGISTRATION;
GROUNDS
While registration is the act that converts
a labor organization to a legitimate labor
organization, cancellation is the
government act that [divests] it of that
status. It thereby reverts to its character
LABOR RELATIONS: Azucena Vol. II
prior to the registration. Although it does
not cease to exist or become an unlawful
organization, its juridical personality as
well as its statutory rights and privileges
[are] suspended. It loses entitlement to
the rights enumerated in Article 242 of
the Labor Code. It cannot demand
recognition by or bargaining with the
employer, cannot file a petition for
certification election, and cannot strike.
1.1 “Cabo”
"Cabo" refers to a person or group or
persons or to a labor group which, in the
guise of a labor organization, supplies
workers to an employer, with or without
any monetary or other consideration
whether in the capacity of an agent of the
employer or as an ostensible independent
contractor.
1.2 Administrative Cancellation; the
“reportorial requirements”
Section 1. Reporting requirements. - It shall be
the duty of every legitimate labor unions and
workers associations to submit to the Regional
Office or the Bureau which issued its
certificate of registration or certificate of
creation of chartered local, as the case may
be, two (2) copies of each of the following
documents:
(a) any amendment to its constitution and by-
laws and the minutes of adoption or
ratification of such amendments, within thirty
(30) days from its adoption or ratification;
(b) annual financial reports within thirty (30)
days after the close of each fiscal year or
calendar year;
(c) updated list of newly-elected officers,
together with the appointive officers or agents
who are entrusted with the handling of funds,
within thirty (30) days after each regular or
special election of officers, or from the
occurrence of any change in the officers of
agents of the labor organization or workers
association;
(d) updated list of individual members of
chartered locals, independent unions and
workers' associations within thirty (30) days
after the close of each fiscal year; and

(e) updated list of its chartered locals and
affiliates or member organizations, collective
bargaining agreements executed and their
effectivity period, in the case of federations or
national unions, within thirty (30) days after
the close of each fiscal year, as well as the
updated list of their authorized
representatives, agents or signatories in the
different regions of the country.
As understood in these Rules, the fiscal year
of a labor organization shall coincide with the
calendar year, unless a different period is
prescribed in the constitution and by-laws.
Failure of the labor organization to submit
the reports mentioned above for five (5)
consecutive years authorizes the Bureau
to institute cancellation proceedings upon
its own initiative or upon complaint by
any party-in-interest.
2. WHO FILES PETITION FOR
CANCELLATION
Section 2. Who may file. - Any party-in-
interest may commence a petition for
cancellation of registration, except in actions
involving violations of Article 241, which can
only be commenced by members of the labor
organization concerned.
Section 3. Grounds for cancellation. - The
following shall constitute grounds for
cancellation of registration of labor
organizations:
(g) commission of any of the acts enumerated
under Article 241 of the Labor Code; provided
that no petition for cancellation based on this
ground may be granted unless supported by
at least thirty (30%) percent of all the
members of the respondent labor
organization;
The petition shall be under oath and shall
state clearly and concisely the facts and
grounds relied upon, accompanied by
proof of service to the respondent. But
such petition cannot be entertained in the
petition for certification election filed by
the union.
3. WHERE TO FILE PETITION
LABOR RELATIONS: Azucena Vol. II
Section 1. Where to file. - Subject to the
requirements of notice and due process, the
registration of any legitimate independent
labor union, chartered local and workers'
association may be cancelled by the Regional
Director, or in the case of federations,
national or industry unions and trade union
centers, by the Bureau Director, upon the
filing of an independent complaint or petition
for cancellation.
Cancellation orders issued by the
Regional Director are appealable to the
BLR. The latter’s decision is final and
executor, hence, not appealable to the
DOLE Secretary but it may be elevated to
the Court of Appeals by certiorari.
BLR decisions on cancellation cases that
originated at the BLR itself may be
appealed to the Secretary and, again, by
certiorari to the CA.
4. PROCEDURE
Section 2. Procedure. - The Labor Relations
Division of the Regional Office shall make a
report of the labor organization's non-
compliance and submit the same to the
Bureau for verification with its records. The
Bureau shall send by registered mail with
return card to the labor organization
concerned, a notice for compliance indicating
the documents it failed to submit and the
corresponding period in which they were
required, with notice to comply with the said
reportorial requirements and to submit proof
thereof to the Bureau within ten (10) days
from receipt thereof.
Where no response is received by the Bureau
within thirty (30) days from the release of the
first notice, another notice for compliance
shall be made by the Bureau, with warning
that failure on its part to comply with the
reportorial requirements within the time
specified shall cause the continuation of the
proceedings for the administrative
cancellation of its registration.
Section 3. Publication of notice of cancellation
of registration . - Where no response is again
received by the Bureau within thirty (30) days
from release of the second notice, the Bureau
shall cause the publication of the notice of
cancellation of registration of the labor
 LABOR RELATIONS: Azucena Vol. II
organization in two (2) newspapers of general within thirty (30) calendar days after the
circulation. The Bureau may conduct an election of officers or from the occurrence
investigation within the employer's premises of any change in the list of officers of the
and at the labor organization's last known labor organization; (As amended by
address to verify the latter's existence.
Section 16, Republic Act No. 6715, March
________
21, 1989)
Art. 240. Equity of the incumbent. All
d. The members shall determine by secret
existing federations and national unions
ballot, after due deliberation, any
which meet the qualifications of a
question of major policy affecting the
legitimate labor organization and none of
entire membership of the organization,
the grounds for cancellation shall
unless the nature of the organization or
continue to maintain their existing
force majeure renders such secret ballot
affiliates regardless of the nature of the
impractical, in which case, the board of
industry and the location of the affiliates.
directors of the organization may make
________
the decision in behalf of the general
membership;
Chapter II
RIGHTS AND CONDITIONS OF
e. No labor organization shall knowingly
MEMBERSHIP
admit as members or continue in
membership any individual who belongs
Art. 241. Rights and conditions of
to a subversive organization or who is
membership in a labor organization. The
engaged directly or indirectly in any
following are the rights and conditions of
subversive activity;
membership in a labor organization:
a. No arbitrary or excessive initiation fees
f. No person who has been convicted of a
shall be required of the members of a
crime involving moral turpitude shall be
legitimate labor organization nor shall
eligible for election as a union officer or
arbitrary, excessive or oppressive fine
for appointment to any position in the
and forfeiture be imposed;
union;
b. The members shall be entitled to full
g. No officer, agent or member of a labor
and detailed reports from their officers
organization shall collect any fees, dues,
and representatives of all financial
or other contributions in its behalf or
transactions as provided for in the
make any disbursement of its money or
constitution and by-laws of the
funds unless he is duly authorized
organization;
pursuant to its constitution and by-laws;
c. The members shall directly elect their
h. Every payment of fees, dues or other
officers, including those of the national
contributions by a member shall be
union or federation, to which they or their
evidenced by a receipt signed by the
union is affiliated, by secret ballot at
officer or agent making the collection and
intervals of five (5) years. No qualification
entered into the record of the
requirements for candidacy to any
organization to be kept and maintained
position shall be imposed other than
for the purpose;
membership in good standing in subject
labor organization. The secretary or any
i. The funds of the organization shall not
other responsible union officer shall
be applied for any purpose or object other
furnish the Secretary of Labor and
than those expressly provided by its
Employment with a list of the newly-
constitution and by-laws or those
elected officers, together with the
expressly authorized by written resolution
appointive officers or agents who are
adopted by the majority of the members
entrusted with the handling of funds,

at a general meeting duly called for the
purpose;
j. Every income or revenue of the
organization shall be evidenced by a
record showing its source, and every
expenditure of its funds shall be
evidenced by a receipt from the person to
whom the payment is made, which shall
state the date, place and purpose of such
payment. Such record or receipt shall
form part of the financial records of the
organization.
Any action involving the funds of the
organization shall prescribe after three (3)
years from the date of submission of the
annual financial report to the Department
of Labor and Employment or from the
date the same should have been
submitted as required by law, whichever
comes earlier: Provided, That this
provision shall apply only to a legitimate
labor organization which has submitted
the financial report requirements under
this Code: Provided, further, that failure of
any labor organization to comply with the
periodic financial reports required by law
and such rules and regulations
promulgated thereunder six (6) months
after the effectivity of this Act shall
automatically result in the cancellation of
union registration of such labor
organization; (As amended by Section 16,
Republic Act No. 6715, March 21, 1989)
k. The officers of any labor organization
shall not be paid any compensation other
than the salaries and expenses due to
their positions as specifically provided for
in its constitution and by-laws, or in a
written resolution duly authorized by a
majority of all the members at a general
membership meeting duly called for the
purpose. The minutes of the meeting and
the list of participants and ballots cast
shall be subject to inspection by the
Secretary of Labor or his duly authorized
representatives. Any irregularities in the
approval of the resolutions shall be a
ground for impeachment or expulsion
from the organization;
LABOR RELATIONS: Azucena Vol. II
l. The treasurer of any labor organization
and every officer thereof who is
responsible for the account of such
organization or for the collection,
management, disbursement, custody or
control of the funds, moneys and other
properties of the organization, shall
render to the organization and to its
members a true and correct account of all
moneys received and paid by him since
he assumed office or since the last day on
which he rendered such account, and of
all bonds, securities and other properties
of the organization entrusted to his
custody or under his control. The
rendering of such account shall be made:
1. At least once a year within thirty (30)
days after the close of its fiscal year;
2. At such other times as may be required
by a resolution of the majority of the
members of the organization; and
3. Upon vacating his office.
The account shall be duly audited and
verified by affidavit and a copy thereof
shall be furnished the Secretary of Labor.
m. The books of accounts and other
records of the financial activities of any
labor organization shall be open to
inspection by any officer or member
thereof during office hours;
n. No special assessment or other
extraordinary fees may be levied upon
the members of a labor organization
unless authorized by a written resolution
of a majority of all the members in a
general membership meeting duly called
for the purpose. The secretary of the
organization shall record the minutes of
the meeting including the list of all
members present, the votes cast, the
purpose of the special assessment or fees
and the recipient of such assessment or
fees. The record shall be attested to by
the president.
o. Other than for mandatory activities
under the Code, no special assessments,

attorney’s fees, negotiation fees or any
other extraordinary fees may be checked
off from any amount due to an employee
without an individual written
authorization duly signed by the
employee. The authorization should
specifically state the amount, purpose
and beneficiary of the deduction; and
p. It shall be the duty of any labor
organization and its officers to inform its
members on the provisions of its
constitution and by-laws, collective
bargaining agreement, the prevailing
labor relations system and all their rights
and obligations under existing labor laws.
For this purpose, registered labor
organizations may assess reasonable
dues to finance labor relations seminars
and other labor education activities.
Any violation of the above rights and
conditions of membership shall be a
ground for cancellation of union
registration or expulsion of officers from
office, whichever is appropriate. At least
thirty percent (30%) of the members of a
union or any member or members
specially concerned may report such
violation to the Bureau. The Bureau shall
have the power to hear and decide any
reported violation to mete the appropriate
penalty.
Criminal and civil liabilities arising from
violations of above rights and conditions
of membership shall continue to be under
the jurisdiction of ordinary courts.
________
1. DEMOCRATIZATION OF UNIONS
As unionism’s aim is to install industrial
democracy, the unions themselves must
be democratic. This is a rationale behind
Article 241.
To democratize the unions, Article 241
requires that the union officers be elected
directly by the members through secret
ballot and that the major policy decisions,
as a rule, be made by the union
LABOR RELATIONS: Azucena Vol. II
members, again, by secret ballot. As in a
republic where sovereignty resides in the
people, the members of the union are the
keepers and dispensers of authority. The
governing power is the members, not the
officers.
2. NATURE OF RELATIONSHIP
BETWEEN UNION AND ITS MEMEBERS
The union has been evolved as an
organization of collective strength for the
protection of labor against the unjust
exactions of capital, but equally important
is the requirement of fair dealing between
the union and its members, which is
fiduciary in nature, and arises out of two
factors: "one is the degree of dependence
of the individual employee on the union
organization; the other, a corollary of the
first, is the comprehensive power vested
in the union with respect to the
individual." The union may be considered
but the agent of its members for the
purpose of securing for them fair and just
wages and good working conditions and
is subject to the obligation of giving the
members as its principals all information
relevant to union and labor matters
entrusted to it.
2.1 Duty of Court to Protect Laborers from
Unjust Exploitation by Oppressive
Employers and Union Leaders
Just as this Court has stricken down
unjust exploitation of laborers by
oppressive employers, so will it strike
down their unfair treatment by their own
unworthy leaders. The Constitution
enjoins the State to afford protection to
labor. Fair dealing is equally demanded of
unions as well as of employers in their
dealings with employees.
The union constitution is a covenant
between the union and its members and
among the members.
3. RIGHTS OF UNION MEMBERS

The rights and conditions of membership
laid down in Art. 241 may be summarized
as follows:
(1) Political right – the member’s right to
vote and be voted for, subject to lawful
provisions on qualifications and
disqualifications.
(2) Deliberative and decision-making right
– the member’s right to participate in
deliberations on major policy questions
and decide them by secret ballot.
(3) Rights over money matters – the
member’s right against excessive fees;
the right against unauthorized collection
of contributions or unauthorized
disbursements; the right to require
adequate records of income and
expenses and the right of access to
financial records; the right to vote on
officers’ compensation; the right to vote
on proposed special assessments and be
deducted a special assessment only with
the member’s written authorization.
(4) Right to Information – the member’s
right to be informed about the
organization’s constitution and by-laws
and the collective bargaining agreement
and about labor laws.
Although not so denominated, Article 241
of the Labor Code carries the character of
a bill of rights of union members.
3.1 Eligibility for Membership
When, how, and under what conditions
does an employee become a union
member? The answer depends on the
union’s constitution and by-laws
inasmuch as Article 249 gives a labor
organization the right to prescribe its own
rules for acquisition or retention of
membership. Nonetheless, under Art. 277
an employee is already qualified for union
membership starting on his first day of
service.
Qualifying for union membership does not
necessarily mean inclusion in the
LABOR RELATIONS: Azucena Vol. II
coverage of the CBA. The reverse is
equally true: membership in the CBU
does not automatically mean membership
in the union.
To sum up:
Inclusion in the CBU depends on the
determination of its appropriateness
under Art. 234 and Art. 255.
Inclusion or membership in a union
depends on the union’s constitution and
by-laws, without prejudice to Art. 277(c).
Inclusion or coverage in the CBA depends
on the stipulations in the CBA itself.
4. ELECTION OF UNION OFFICERS
The officers of the union are elected by
the members in secret ballot voting. The
election takes place at intervals of five
years which is the term of office of the
union officers including those of a
national union, federation, or trade union
center.
The Implementing Rules (Rule XII, Section
1) require the incumbent president to
create an election committee within 60
days before expiration of the incumbent
officers’ term.
If the officers with expired term do not
call an election, the remedy, according to
Rule XII, is for at least 30% of the
members to file a petition with the DOLE
Regional Office.
The member’s frustration over the
performance of the union officers, as well
as their fear of a “fraudulent” election to
be held under the latter’s supervision,
does not justify disregard of the union’s
constitution and by-laws.
4.1 Eligibility of Voters
Only members of the union can take part
in the election of union officers.

Ember in good standing is any person
who has fulfilled the requirements for
membership in the union and who has
neither voluntarily withdrawn from
membership nor been expelled or
suspended from membership after
appropriate proceedings consistent with
the lawful provisions of the union’s
constitution and by-laws.
A labor organization may prescribe
reasonable rules and regulations with
respect to voting eligibility.
A labor organization may condition the
exercise of the right to vote on the
payment of dues, since paying dues is a
basic obligation of membership. However,
this rule is subject to two qualifications in
that (a) any rule denying dues-delinquent
members the right to vote must be
applied uniformly; and (b) members must
be afforded a reasonable opportunity to
pay dues, including a grace period during
which dues may be paid without any loss
of rights.
Submission of the employees names with
the BLR as qualified members of the
union is not a condition sine qua non to
enable said members to vote in the
election of union's officers.
4.2 Union Officers Must Be an Employee
(f) No person who is not an employee or
worker of the company or establishment
where an independently registered union,
affiliate, local or chapter of a labor federation
or national union operates shall henceforth be
elected or appointed as an officer of such
union, affiliate, local or chapter.
In short, one should be employed in the
company to qualify as officer of a union in
that company.
4.3 Disqualification of Union Officers
"Moral turpitude" has been defines as an
act of baseness, vileness, or depravity in
the private and social duties which a man
owes his fellow men, or to society in
LABOR RELATIONS: Azucena Vol. II
general, contrary to the accepted and
customary rule of right and duty between
man and man or conduct contrary to
justice, honesty, modesty, or good
morals.
4.4 Union Election Protest: Proclamation
of Winners
Section 13. Protest; when perfected. - Any
party-in-interest may file a protest based on
the conduct or mechanics of the election.
Such protests shall be recorded in the minutes
of the election proceedings. Protests not so
raised are deemed waived.
The protesting party must formalize its
protest with the Med-Arbiter, with specific
grounds, arguments and evidence, within five
(5) days after the close of the election
proceedings. If not recorded in the minutes
and formalized within the prescribed period,
the protest shall be deemed dropped.
5. ACTION AGAINST UNION OFFICERS
A union officer, after his election, may not
be expelled from the union for past
malfeasance or misfeasance. To do so
would nullify the choice made by the
union members.
The remedy against erring union officers
is not referendum but union expulsion,
i.e., to expel them from the Union.
It is the better part of conventional or
pragmatic solutions in cases of this
nature, absent overriding considerations
to the contrary, to respect the will of the
majority of the workers who voted in the
elections. Although decreed under a
different setting, it is apropos to recall the
ruling that where the people have elected
a man to office, it must be assumed that
they did this with knowledge of his life
and character, and that they disregarded
or forgave his faults or misconduct, if he
had been guilty of any.
6. DUE PROCESS IN IMPEACHMENT
7. EXPULSION OF MEMBER

Just as an officer is entitled to due
process, so does a member. In a case, the
Court explicitly ruled that a member of a
labor union may be expelled only for a
valid cause and by following the
procedure outlined in the constitution and
by-laws of the union.
Expulsion of a member for arbitrary or
impetuous reason may amount to unfair
labor practice by the union.
8. RELIEF WITHIN THE UNION
Generally, redress must first be sought
within the union itself in accordance with
its constitution and by-laws.
If intra-union remedies have failed to
correct any violations of the internal labor
organization procedures, a case can be
filed with the Bureau of Labor Relations,
which is authorized to hear and decide
cases of this nature.
8.1 Exceptions
Where exhaustion of remedies within the
union itself would practically amount to a
denial of justice, or would be illusory or
vain, it will not be insisted upon,
particularly where property rights of the
members are involved, as a condition to
the right to invoke the aid of a court.
9. CONSEQUENCES OF VIOLATION OF
RIGHTS
If the conditions of membership, or the
right of the members, are violated, the
violation may result in the cancellation of
the union registration or the expulsion of
the culpable officers.
Section 4. Actions arising from Article 241. -
Any complaint or petition with allegations of
mishandling, misappropriation or non-
accounting of funds in violation of Article 241
shall be treated as an intra-union dispute. It
shall be heard and resolved by the Med-
Arbiter pursuant to the provisions of Rule XI.
9.1 Exception: When 30% Not Required
LABOR RELATIONS: Azucena Vol. II
When such violation directly affects only
one or two members, then only one or
two members would be enough to report
such violation.
It states that a report of a violation of
rights and conditions of membership in a
labor organization may be made by "(a)t
least thirty percent (30%) of all the
members of a union or any member or
members specially concerned.
10. VISITORIAL POWER
Article 247 authorizes the Secretary of
Labor and Employment or his duly
authorized representative to inquire into
the financial activities of any labor
organization on the basis of a complaint
under oath, supported by 20 percent of
the membership in order to determine
compliance or noncompliance with the
laws and to aid in the prosecution of any
violation thereof.
11. CHECK-OFF AND ASSESSMENTS
A check-off is a method of deducting from
an employee’s pay at prescribed period,
the amounts due the union for fees, fines,
or assessments. The right of a union to
collect union dues is recognized under
Article 277(a).
11.1 Assessments, like dues, may also be
checked off
Dues are defined as payments to meet
the union’s general and current
obligations. The payment must be
regular, periodic, and uniform. Payments
used for a special purpose, especially if
required only for a limited time, are
regarded as assessment.
ART. 241. Rights and conditions of
membership in a labor organization. — The
following are the rights and conditions of
membership in a labor organization.
(o) Other than for mandatory activities under
the Code, no special assessment, attorney's

fees, negotiation fees or any other
extraordinary fees may be checked off from
any amount due an employee without an
individual written authorization duly signed by
an employee. The authorization should
specifically state the amount, purpose and
beneficiary of the deduction.
Attorney's fees may not be deducted or
checked off from any amount due to an
employee without his written consent
except for mandatory activities under the
Code.
A mandatory activity has been defined as
a judicial process of settling dispute laid
down by the law. An amicable settlement
entered into by the management and the
union is not a mandatory activity under
the Code. Moreover, the law explicitly
requires the individual written
authorization of each employee
concerned, to make the deduction of
attorney’s fees valid.
Deductions for union service fee are
authorized by law and do not require
individual check-off authorizations.
Notwithstanding its "compulsory" nature,
“compulsory arbitration” is not the
"mandatory activity" under the Code
which dispenses with individual written
authorizations for check-offs.
(1) Requirements – The failure of the Union to
comply strictly with the requirements set out
by the law invalidates the questioned special
assessment. Substantial compliance is not
enough in view of the fact that the special
assessment will diminish the compensation of
the union members. Their express consent is
required, and this consent must be obtained
in accordance with the steps outlined by law,
which must be followed to the letter. No
shortcuts are allowed.
It submitted only minutes of the local
membership meetings when what is required
is a written resolution adopted at the general
meeting. Worse still, the minutes of three of
those local meetings held were recorded by a
union director and not by the union secretary.
The minutes submitted to the Company
contained no list of the members present and
LABOR RELATIONS: Azucena Vol. II
no record of the votes cast. Since it is quite
evident that the Union did not comply with
the law at every turn, the only conclusion that
may be made therefrom is that there was no
valid levy of the special assessment pursuant
to paragraph (n) of Article 241 of the Labor
Code.
(2) Effects of withdrawal of authorizations –
Paragraph (o) on the other hand requires an
individual written authorization duly signed by
every employee in order that a special
assessment may be validly checked-off. Even
assuming that the special assessment was
validly levied pursuant to paragraph (n), and
granting that individual written authorizations
were obtained by the Union, nevertheless
there can be no valid check-off considering
that the majority of the union members had
already withdrawn their individual
authorizations. A withdrawal of individual
authorizations is equivalent to no
authorization at all.
(3) Forms of disauthorization – The Union
points out, however, that said
disauthorizations are not valid for being
collective in form, as they are "mere bunches
of randomly procured signatures, under loose
sheets of paper." The contention deserves no
merit for the simple reason that the
documents containing the disauthorizations
have the signatures of the union members.
The Court finds these retractions to be valid.
There is nothing in the law which requires that
the disauthorization must be in individual
form.
(4) Purpose of the special assessment – Of the
stated purposes of the special assessment, as
embodied in the board resolution of the
Union, only the collection of a special fund for
labor and education research is mandated, as
correctly pointed out by the Union. The two
other purposes, namely, the purchase of
vehicles and other items for the benefit of the
union officers and the general membership,
and the payment of services rendered by
union officers, consultants and others, should
be supported by the regular union dues, there
being no showing that the latter are not
sufficient to cover the same.
(5) Article 222(b) of the Labor Code, “similar
charge” – The last stated purpose is
contended by petitioners to fall under the
coverage of Article 222 (b) of the Labor Code.
The contention is impressed with merit.

Article 222 (b) prohibits attorney's fees,
negotiations fees and similar charges arising
out of the conclusion of a collective
bargaining agreement from being imposed on
any individual union member. The collection
of the special assessment partly for the
payment for services rendered by union
officers, consultants and others may not be in
the category of "attorney's fees or
negotiations fees." But there is no question
that it is an exaction which falls within the
category of a "similar charge," and, therefore,
within the coverage of the prohibition in the
aforementioned article.
(6) Unlimited discretion of union president,
disallowed – There is an additional proviso
giving the Union President unlimited
discretion to allocate the proceeds of the
special assessment. Such a proviso may open
the door to abuse by the officers of the Union
considering that the total amount of the
special assessment is quite considerable —
P1,027,694.33 collected from those union
members who originally authorized the
deduction, and P1,267,863.39 from those who
did not authorize the same, or subsequently
retracted their authorizations.
The Court, therefore, stakes down the
questioned special assessment for being a
violation of Article 241, paragraphs (n) and
(o), and Article 222 (b) of the Labor Code.
11.2 Three Requisites to Collect Special
Assessment
Article 241 speaks of three (3) requisites
that must be complied with in order that
the special assessment for Union's
incidental expenses, attorney's fees and
representation expenses, as stipulated in
Article XII of the CBA, be valid and upheld
namely: 1) authorization by a written
resolution of the majority of all the
members at the general membership
meeting duly called for the purpose; (2)
secretary's record of the minutes of the
meeting; and (3) individual written
authorization for check-off duly signed by
the employee concerned.
11.3 Check-off of Agency Fee
This is the amount, equivalent to union
dues, which a non-union member pays to
LABOR RELATIONS: Azucena Vol. II
the union because he benefits from the
CBA negotiated by the union. In
negotiating the CBA the union served as
the employee’s agent. Check-off of
agency fee is allowed under Art. 248(e).
11.4 Illegal Check-off Ground for
cancellation
11.5 Employer’s Liability in Check-off
Arrangement
Check-offs in truth impose an extra
burden on the employer in the form of
additional administrative and
bookkeeping costs. It is a burden
assumed by management at the instance
of the union and for its benefit, in order to
facilitate the collection of dues necessary
for the latter's life and sustenance. But
the obligation to pay union dues and
agency fees obviously devolves not upon
the employer, but the individual
employee. It is a personal obligation not
demandable from the employer upon
default or refusal of the employee to
consent to a check-off. The only
obligation of the employer under a check-
off is to effect the deductions and remit
the collections to the union.
11.6 Jurisdiction Over Check-off Disputes
The Regional Director of DOLE, not the
labor arbiter, has jurisdiction over check-
off disputes.
________
Chapter III
RIGHTS OF LEGITIMATE LABOR
ORGANIZATIONS
Art. 242. Rights of legitimate labor
organizations. A legitimate labor
organization shall have the right:
a. To act as the representative of its
members for the purpose of collective
bargaining;
b. To be certified as the exclusive
representative of all the employees in an
appropriate bargaining unit for purposes
of collective bargaining;

c. To be furnished by the employer, upon
written request, with its annual audited
financial statements, including the
balance sheet and the profit and loss
statement, within thirty (30) calendar
days from the date of receipt of the
request, after the union has been duly
recognized by the employer or certified
as the sole and exclusive bargaining
representative of the employees in the
bargaining unit, or within sixty (60)
calendar days before the expiration of the
existing collective bargaining agreement,
or during the collective bargaining
negotiation;
d. To own property, real or personal, for
the use and benefit of the labor
organization and its members;
e. To sue and be sued in its registered
name; and
f. To undertake all other activities
designed to benefit the organization and
its members, including cooperative,
housing, welfare and other projects not
contrary to law.
Notwithstanding any provision of a
general or special law to the contrary, the
income and the properties of legitimate
labor organizations, including grants,
endowments, gifts, donations and
contributions they may receive from
fraternal and similar organizations, local
or foreign, which are actually, directly and
exclusively used for their lawful purposes,
shall be free from taxes, duties and other
assessments. The exemptions provided
herein may be withdrawn only by a
special law expressly repealing this
provision. (As amended by Section 17,
Republic Act No. 6715, March 21, 1989)
________
Art. 242-A. Reportorial Requirements. -
The following are documents required to
be submitted to the Bureau by the
legitimate labor organization concerned:
LABOR RELATIONS: Azucena Vol. II
(a) Its constitution and by-laws, or
amendments thereto, the minutes of
ratification, and the list of members who
took part in the ratification of the
constitution and by-laws within thirty (30)
days from adoption or ratification of the
constitution and by-lam or amendments
thereto;
(b) Its list of officers, minutes of the
election of officers, and list of voters
within thirty (30) days from election;
(c) Its annual financial report within thirty
(30) days after the close of every fiscal
year; and
(d) Its list of members at least once a
year or whenever required by the Bureau.
Failure to comply with the above
requirements shall not be a ground for
cancellation of union registration but shall
subject the erring officers or members to
suspension, expulsion from membership,
or any appropriate penalty. (As amended
by Republic Act No. 9481, May 25, 2007)
________
1. NOT ANY L.L.O.
The first three rights mentioned in this
article do not pertain to just about any
union but only to the union that has been
selected as the bargaining representative
of the employees in the bargaining unit.
This article must be read in relation to
Article 255.
2. RIGHTS OF UNION TO REPRESENT
ITS MEMBERS
It is the function of a labor union to
represent its members against the
employer’s unfair labor practices. It can
file in their behalf without the
cumbersome procedure of joining each
and every member as a separate party.
A labor union has the requisite
personality to sue on behalf of its
members for their individual money
claims. It would be an unwarranted

impairment of the right to self-
organization if such collective entities
would be barred from instituting an action
in their representative capacity.
2.1 Members Doubting Their Union
A labor union is one such party authorized
to represent its members under Article
242(a) of the Labor Code which provides
that a union may act as the
representative of its members for the
purpose of collective bargaining. This
authority includes the power to represent
its members for the purpose of enforcing
the provisions of the CBA.
The intervention may be allowed when
there is a suggestion of fraud or collusion
or that the representative will not act in
good faith for the protection of all
interests represented by the union.
3. COMPROMISE BINDING UPON
MINORITY MEMBERS OF UNION;
EXCEPTION
It is an accepted rule under our laws that the
will of the majority should prevail over the
minority and that the action taken by
petitioners as minority members of the Union
is contrary to the policy of the Magna Carta of
Labor, which promotes the settlement of
differences between management and labor
by mutual agreement, and that if said action
were tolerated, no employer would ever enter
into any compromise agreement for the
minority members of the Union will always
dishonor the terms of the agreement and
demand for better terms.
4. COMPROMISE OF MONEY CLAIMS
Money claims due to laborers cannot be
the object of settlement or compromise
effected by a union or counsel without the
specific individual consent of each laborer
concerned. The beneficiaries are the
individual complainants themselves. The
union to which they belong can only
assist them but cannot decide for them.
Awards in favor of laborers after long
years of litigation must be attended to
with mutual openness and in the best of
LABOR RELATIONS: Azucena Vol. II
faith. Only thus can we really give
meaning to the constitutional mandate of
giving laborers maximum protection and
security.
Under the philosophy of collective
responsibility, an employer who bargains in
good faith should be entitled to rely upon the
promises and agreements of the union
representatives with whom he must deal
under the compulsion of law and contract.
The collective bargaining process should be
carried on between parties who can mutually
respect and rely upon the authority of each
other." Where, however, collective bargaining
process is not involved, and what is at stake
are back wages already earned by the
individual workers by way of overtime,
premium and differential pay, and final
judgment has been rendered in their favor,
the present case, the real parties in interest
with direct material interest, as against the
union which has only served as a vehicle for
collective action to enforce their just claims,
are the individual workers themselves.
Authority of the union to waive or quitclaim all
or part of the judgment award in favor of the
individual workers cannot be lightly presumed
but must be expressly granted, and the
employer, as judgment debtor, must deal in
all good faith with the union as the agent of
the individual workers. The Court in turn
should certainly verify and assure itself of the
fact and extent of the authority of the union
leadership to execute any compromise or
settlement of the judgment on behalf of the
individual workers who are the real judgment
creditors.
5. RIGHT TO BE FURNISHED WITH
FINANCIAL STATEMENT
To better equip the union in preparing for
or in negotiating with the employer, the
law gives it the right to be furnished with
the employer’s audited financial
statements. There are four points in time
when the union may ask in writing for
these statements:
(1) after the union has been recognized
by the employer as sole bargaining
representative of the employees in the
bargaining unit; or

(2) after the union is certified by DOLE as
such sole bargaining representative; or
(3) within the last 60 days of the life of a
CBA; or
(4) during the collective bargaining
negotiation.
The audited statements, including the
balance sheet and the profit and loss
statement, should be provided by the
employer within 30 calendar days after
receipt of the union’s request.
6. RIGHT TO COLLECT DUES
________
Title V
COVERAGE
Article 243. Coverage and employees’
right to self-organization. – All persons
employed in commercial, industrial and
agricultural enterprises and in religious,
charitable, medical, or educational
institutions, whether operating for profit
or not, shall have the right to self-
organization and to form, join, or assist
labor organizations of their own choosing
for purposes of collective bargaining.
Ambulant, intermittent and itinerant
workers, self-employed people, rural
workers and those without any definite
employers may form labor organizations
for their mutual aid and protection. (As
amended by Batas Pambansa Bilang 70,
May 1, 1980).
________
1. ORGANIZING IN GENERAL
The rights to organize and to bargain, in a
general sense, are given not exclusively
to employees. Even workers who are not
employees of any particular employer
may form their organizations to protect
their interests.
Under Art. 243 of this Code, the right to
organize refers also to forming, joining or
LABOR RELATIONS: Azucena Vol. II
assisting a labor organization. Connected
to Art. 246 this right carries with it the
right to engage in group action, provided
it is peaceful, to support the
organization’s objective which is not
necessarily bargaining but, simply, to aid
and protect its members. But this kind of
group action must be differentiated from
strike which, because it is work stoppage,
must observe certain regulation;
otherwise, the strike may be declared
illegal and its leaders may be thrown out
of their jobs.
1.1 Coverage of the Right to Organize;
Exceptions
The right to form, join or assist a labor
organization is granted to all kinds of
employees of all kinds of employers—
public or private, profit or non-profit,
commercial or religious. Their usual form
of organization is a union and the usual
purpose is collective bargaining with their
employers.
But the seemingly all-inclusive coverage
of “all persons” in Article 243 actually
admits exceptions. Under Art. 245, for
instance, managerial employees,
regardless of the kind of organization
where they are employed, may not join,
assist or form any labor organization,
meaning a labor union.
Accordingly, managerial employees
cannot, in the absence of an agreement
to the contrary, be allowed to share in the
concessions obtained by the labor union
through collective negotiation. Otherwise,
they would be exposed to the temptation
of colluding with the union during the
negotiations to the detriment of the
employer. However, there is nothing to
prevent the employer from granting
benefits to managerial employees equal
to or higher than those afforded to union
members.
Supervisors are allowed to organize, but
they cannot for, join or assist a rank-and-
file union.

2. RIGHT TO ORGANIZE CANNOT BE
BARGAINED AWAY
Although we have upheld the validity of
the CBA as the law among the parties, its
provisions cannot override what is
expressly provided by law that only
managerial employees are ineligible to
join, assist or form any labor organization.
Therefore, regardless of the challenged
employees' designations, whether they
are employed as Supervisors or in the
confidential payrolls, if the nature of their
job does not fall under the definition of
"managerial" as defined in the Labor
Code, they are eligible to be members of
the bargaining unit and to vote in the
certification election. Their right to self-
organization must be upheld in the
absence of an express provision of law to
the contrary. It cannot be curtailed by a
collective bargaining agreement.
3. EMPLOYEES OF NONPROFIT
INSTITUTIONS
Under Article 243 of the Labor Code, the
rank-and-file employees of non-profit
medical institutions are permitted to
form, organize or join labor unions of their
choice for purposes of collective
bargaining. If the union has complied with
the requisites provided by law for calling
a certification election, it is incumbent
upon the DOLE Regional Director to
conduct such certification election to
ascertain the bargaining representative of
the hospital employees.
4. EXCEPTION: EMPLOYEE-MEMBERS
OF A COOPERATIVE
A cooperative is by its nature different
from an ordinary business concern being
run either, by persons, partnerships or
corporations. Its owners and/or members
are the ones who run and operate the
business while the others are its
employees. As above stated, irrespective
of the name of shares owned by its
members they are entitled to cast one
vote each in deciding upon the affair of
the cooperative. Their share capital earn
LABOR RELATIONS: Azucena Vol. II
limited interests. They enjoy special
privileges as exemption from income tax
and sales taxes, preferential right to
supply their products to State agencies
and even exemption from minimum wage
laws.
An employee of such a cooperative who is
a member and co-owner thereof cannot
invoke the right to collective bargaining
for certainly an owner cannot bargain
with himself or his co-owners.
However, in so far as it involves
cooperatives with employees who are not
members or co-owners thereof, certainly
such employees are entitled to exercise
the rights of all workers to organization,
collective bargaining, negotiations and
others as are enshrined in the
Constitution and existing laws of the
country.
In another case, the court clarified that it
is the fact of ownership of the
cooperative, and not involvement in the
management thereof, which disqualifies a
member from joining any labor
organization within the cooperative. Thus,
irrespective of the degree of their
participation in the actual management of
the cooperative, all members thereof
cannot form, assist or join a labor
organization for the purpose of collective
bargaining.
But member-employees of a cooperative
may withdraw as members of the
cooperative in order to join a labor union.
Membership in a cooperative is voluntary;
inherent in it is the right not to join.
4.1 Exception to Exception: Association,
not Union
While the members of a cooperative who
are also its employees cannot unionize for
bargaining purposes, the law does not
prohibit them from forming an association
for their mutual aid and protection as
employees.

D.O. No. 40-03 allows and defines a
“workers’ association” as one which is
organized for the mutual aid and
protection of its members or for any
legitimate purpose other than collective
bargaining.
5. EXCEPTION: INTERNATIONAL
ORGANIZATIONS
A certification election cannot be
conducted in an international
organization which the Philippine
Government has granted immunity from
local jurisdiction.
The grant of such immunity is a political
question whose resolution by the
executive branch of government is
conclusive upon the courts
(1) “International Organization” and
“Specialized Agencies”—The term
"international organization" is generally used
to describe an organization set up by
agreement between two or more states.
Under contemporary international law, such
organizations are endowed with some degree
of international legal personality such that
they are capable of exercising specific rights,
duties and powers. They are organized mainly
as a means for conducting general
international business in which the member
states have an interest. The United Nations,
for instance, is an international organization
dedicated to the propagation of world peace.
"Specialized agencies" are international
organizations having functions in particular
fields. The term appears in Articles 57 and 63
of the Charter of the United Nations.
(2) Principles Underlying the Grant of
International Immunities to International
Organizations—There are basically three
propositions underlying the grant of
international immunities to international
organizations. These principles, contained in
the ILO Memorandum are stated thus: 1)
international institutions should have a status
which protects them against control or
interference by any one government in the
performance of functions for the effective
discharge of which they are responsible to
democratically constituted international
bodies in which all the nations concerned are
represented; 2) no country should derive any
LABOR RELATIONS: Azucena Vol. II
national financial advantage by levying fiscal
charges on common international funds; and
3) the international organization should, as a
collectivity of States members, be accorded
the facilities for the conduct of its official
business customarily extended to each other
by its individual member States. The theory
behind all three propositions is said to be
essentially institutional in character. "It is not
concerned with the status, dignity or
privileges of individuals, but with the
elements of functional independence
necessary to free international institutions
from national control and to enable them to
discharge their responsibilities impartially on
behalf of all their members. The raison d'etre
for these immunities is the assurance of
unimpeded performance of their functions by
the agencies concerned.
(3) Labor’s Basic Rights Remain—The
immunity of International Catholic Migration
Commission (ICMC) and the International Rice
Research Institution (IRRI) from local
jurisdiction by no means deprives labor of its
basic rights, which are guaranteed by Article
II, Section 18, Article III, Section 8, and Article
XIII, Section 3, of the 1987 Constitution; and
implemented by Articles 243 and 246 of the
Labor Code.
(4) Certification Election Barred by Immunity
—The immunity granted being "from every
form of legal process except in so far as in any
particular case they have expressly waived
their immunity," it is inaccurate to state that a
certification election is beyond the scope of
that immunity for the reason that it is not a
suit against ICMC. A certification election
cannot be viewed as an independent or
isolated process. It could trigger off a series of
events in the collective bargaining process
together with related incidents and/or
concerted activities, which could inevitably
involve ICMC in the "legal process," which
includes “any penal, civil and administrative
proceedings.” The eventuality of Court
litigation is neither remote and from which
international organizations are precisely
shielded to safeguard them from the
disruption of their functions. Clauses on
jurisdictional immunity are said to be
standard provisions in the constitutions of
international Organizations. “The immunity
covers the organization concerned, its
property and its assets...”
5.1 Waiver of Immunity

Waiver of its immunity is discretionary to
IRRI. Without such express waiver the
NLRC or its labor arbiters have no
jurisdiction over IRRI even in cases of
alleged illegal dismissal of any of its
employees.
5.2 Foreign Workers
Foreigners, whether natural or juridical, as
well as foreign corporations are strictly
prohibited from engaging directly or indirectly
in all forms of trade union activities. However,
aliens working in the country with valid work
permits may exercise the right to self-
organization if they are nationals of a country
that grants the same or similar rights to
Filipino workers. (Art. 269)
6. EXCEPTION: RELIGIOUS
OBJECTORS; IGLESIA NI CRISTO
MEMBERS
Under the Industrial Peace Act (1953)
which preceded the Labor Code (and even
under the present Code) the employer
and the union could enter into a “closed
shop” agreement which would compel
employees to become union workers as a
condition of continued employment. But
in 1961 R.A. No. 3350 was passed to
exempt from such compulsory union
membership the followers of any religious
sect (such as the Iglesia ni Cristo) whose
teachings forbid membership in labor
unions. The constitutionality of R.A. No.
3350 was upheld by the Supreme Court in
Victoriano v. Elizalde.
It may not be amiss to point out here that
the free exercise of religious profession or
belief is superior to contract rights. In
case of conflict, the latter must, therefore,
yield to the former.
6.1 Does the Exemption Still Stand?
6.2 Iglesia Ni Cristo Members May Form
and Join Own Union
________
Article 244. Right of employees in the
public service. – Employees of
LABOR RELATIONS: Azucena Vol. II
government corporations established
under the Corporation Code shall have
the right to organize and to bargain
collectively with their respective
employers. All other employees in the
civil service shall have the right to form
associations for purposes not contrary to
law. (As amended by Executive Order No.
111, December 24, 1986).
________
1. GOVERNMENT EMPLOYEES’ RIGHT
TO ORGANIZE; LIMITATIONS
The highest law of the land guarantees to
government employees the right to
organize and to negotiate, but not the
right to strike.
1.1 Limited Purpose
The extent of the government employees'
right of self-organization differs
significantly from that of employees in
the private sector. The latter's right of
self-organization, i.e., "to form, join or
assist labor organizations for purposes of
collective bargaining," admittedly
includes the right to deal and negotiate
with their respective employers in order
to fix the terms and conditions of
employment and also, to engage in
concerted activities for the attainment of
their objectives, such as strikes,
picketing, boycotts. But the right of
government employees to "form, join or
assist employees organizations of their
own choosing" under Executive Order No.
180 is not regarded as existing or
available for "purposes of collective
bargaining," but simply "for the
furtherance and protection of their
interests."
In other words, the right of Government
employees to deal and negotiate with
their respective employers is not quite as
extensive as that of private employees.
Excluded from negotiation by government
employees are the "terms and conditions
of employment...that are fixed by law," it
being only those terms and conditions not
otherwise fixed by law that "may be

subject of negotiation between the duly
recognized employees' organizations and
appropriate government authorities."
Declared to be 'not negotiable' are matters
"that require appropriation of funds;" e.g.,
increase in salary emoluments and other
allowances, car plan, special hospitalization,
medical and dental services, increase in
retirement benefits (Sec. 3, Rule VIII), and
those "that involve the exercise of
management prerogatives;" e.g.,
appointment, promotion, assignment/detail,
penalties as a result of disciplinary actions,
etc. (Sec. 4, Id.) Considered negotiable are
such matters as schedule of vacation and
other leaves, work assignment of pregnant
women; recreational, social, athletic, and
cultural activities and facilities, etc. (Sec. 2,
Id.).
1.2 No Signing Bonus
Employees and officers of SSS are not
entitled to the signing bonus provided for
in the collective negotiation agreement
because the process of collective
negotiations in the public sector does not
encompass terms and conditions of
employment requiring the appropriation
of public funds. The Court reminds the
Social Security Commission officials that
the SSS fund is not their money
1.3 Excepted Employees
Excepted from the application of
Executive Order 180, however, are
“members of the Armed Forces of the
Philippines, including police officers,
policemen, firemen, and jail guards” (Sec.
4). For reasons of security and safety,
they are not allowed to unionize.
A “high level employee” is one “whose
functions are normally considered policy
determining, managerial or one whose
duties are highly confidential in nature. A
managerial function refers to the exercise
of powers such as: (1) to effectively
recommend such managerial actions; (2)
to formulate or execute management
policies and decisions; or (3) to hire,
LABOR RELATIONS: Azucena Vol. II
transfer, lay-off, recall, dismiss, assign or
discipline employees.
1.3a Professors as rank-and-file
employees
Professors at the University of the
Philippines who are not exercising
managerial or highly confidential
functions are rank-and-file employees and
may unionize separately from the non-
academic personnel.
In short, the professors, associate
professors and assistant professors of the
University of the Philippines are rank-and-
file employees. The full professors,
associate professors, assistant professors,
instructors and the research, extension
and professional staff may, if so minded,
organize themselves into a separate
collective bargaining unit.
1.4 Right to Strike
EO No. 180 also concedes to government
employees, like their counterparts in the
private sector, the right to engage in
concerted activities, including the right to
strike, the executive order is quick to add that
those activities must be exercised in
accordance with law, i.e. are subject both to
"Civil Service Law and rules" and "any
legislation that may be enacted by Congress,"
that "the resolution of complaints, grievances
and cases involving government employees"
is not ordinarily left to collective bargaining or
other related concerted activities, but to "Civil
Service Law and labor laws and procedures
whenever applicable;" and that in case "any
dispute remains unresolved after exhausting
all available remedies under existing laws and
procedures, the parties may jointly refer the
dispute to the (Public Sector Labor-
Management) Council for appropriate action."
What is more, the Rules and Regulations
implementing Executive Order No. 180
explicitly provide that since the "terms and
conditions of employment in the government,
including any political subdivision or
instrumentality thereof and government-
owned and controlled corporations with
original charters are governed by law, the
employees therein shall not strike for the
purpose of securing changes thereof.

2. REGISTRATION
Sec. 7. Government employees' organizations
shall register with the Civil Service
Commission and the Department of Labor and
Employment. The application shall be filed
with the Bureau of Labor Relations of the
Department which shall process the same in
accordance with the provisions of the Labor
Code of the Philippines, as amended.
Applications may also be filed with the
Regional Offices of the Department of Labor
and Employment which shall immediately
transmit the said applications to the Bureau of
Labor Relations within three (3) days from
receipt thereof.
Sec. 8. Upon approval of the application, a
registration certificate be issued to the
organization recognizing it as a legitimate
employees' organization with the right to
represent its members and undertake
activities to further and defend its interest.
The corresponding certificates of registration
shall be jointly approved by the Chairman of
the Civil Service Commission and Secretary of
Labor and Employment. (E.O. No. 180)
3. CERTIFICATION ELECTION IN
GOVERNMENT CORPORATION
A certification election to choose the
union that will represent the employees
may be conducted by the Bureau of Labor
Relations in a government corporation,
whether governed by the Labor Code or
the Civil Service rules.
3.1 Election of Officers in Government
Unions
It is quite clear from this provision that
BLR has the original and exclusive
jurisdiction on all inter-union and intra-
union conflicts. An intra-union conflict
would refer to a conflict within or inside a
labor union, and an inter-union
controversy or dispute, one occurring or
carried on between or among unions. The
subject of the case at bar, which is the
election of the officers and members of
the board of KMKK-MWSS, is, clearly, an
intra-union conflict, being within or inside
LABOR RELATIONS: Azucena Vol. II
a labor union. It is well within the powers
of the BLR to act upon.
4. WHEN PSLMC MAY RULE ON
LEGALITY OF DISMISSAL
The Public Sector Labor-Management
Council, created by Executive Order No.
180 (June 1, 1987) has jurisdiction to hear
charges of unfair labor practice filed by
government employees against their
employer, e.g., the Pamantasan ng
Lungsod ng Maynila. In deciding the ULP
charge the PSLMC may also rule on the
complainants’ dismissal if the two issues
—ULP and dismissal—are unavoidably
interlinked.
5. UNION-BUSTING IN A
GOVERNMENT AGENCY, U.L.P.
5.1 Even Temporary Employees May
Organize
Even temporary employees enjoy the
basic right to form organization or
association for purposes not contrary to
law.
Under Art. 277(c) of the Labor Code, “any
employee, whether employed for a
definite period of not, shall beginning on
his first day of service, be considered an
employee for purposes of membership in
any labor union.”
________
Article 245. Ineligibility of managerial
employees to join any labor organization;
Right of Supervisory Employees. -
Managerial employees are not eligible to
join, assist or form any labor organization.
Supervisory employees shall not be
eligible for membership in the collective
bargaining unit of the rank-and-file
employees but may join, assist or form
separate collective bargaining units
and/or legitimate labor organizations of
their own. The rank-and-file union and the
supervisors’ union operating within the
same establishment may join the same
federation or national union. (As amended
by Section 18, Republic Act No. 6715,

March 21, 1989 and Section 8, Republic
Act No. 9481 which lapsed into law on
May 25, 2007 and became effective on
June 14, 2007).
________
1. CATEGORIES OF EMPLOYEES
RA 6715 which took effect on March 21,
1989 (15 days after its publication in the
"Philippines Daily Inquirer") provides that
although "supervisory employees shall
not be eligible for membership in a labor
organization of the rank and file
employees," they may, however, "join,
assist or form separate labor organization
of their own."
2. INELIGIBILITY OF MANAGERS
2.1 Types of Managerial Employees
The term "manager" generally refers to
"anyone who is responsible for subordinates
and other organizational resources." As a
class, managers constitute three levels of a
pyramid, namely, top management, middle
management, and first-line management
which is also called supervisor. Below this
third level are the operatives or operating
employees who, we may add, are also called
rank-and-file.
FIRST-LINE MANAGERS — The lowest level in
an organization at which individuals are
responsible for the work of others is called
first-line or first-level management. First-line
managers direct operating employees only;
they do not supervise other managers.
Examples of first-line managers are the
"foreman" or production supervisor in a
manufacturing plant, the technical supervisor
in a research department, and the clerical
supervisor in a large office. First-level
managers are often called supervisors.
MIDDLE MANAGERS — The term middle
management can refer to more than one level
in an organization. Middle managers direct
the activities of other managers and
sometimes also those of operating
employees. Middle managers' principal
responsibilities are to direct the activities that
implement their organizations' policies and to
balance the demands of their superiors with
the capacities of their subordinates. A plant
LABOR RELATIONS: Azucena Vol. II
manager in an electronics firm is an example
of a middle manager.
TOP MANAGERS — Composed of a
comparatively small group of executives, top
management is responsible for the overall
management of the organization. It
establishes operating policies and guides the
organization's interactions with its
environment. Typical titles of top managers
are "chief executive officer," "president," and
"senior vice-president." Actual titles vary from
one organization to another and are not
always a reliable guide to membership in the
highest management classification.
As can be seen from this description, a
distinction exists between those who have the
authority to devise, implement and control
strategic and operational policies (top and
middle managers) and those whose task is
simply to ensure that such policies are carried
out by the rank-and-file employees of an
organization (first-level
managers/supervisors). What distinguishes
them from the rank-and-file employees is that
they act in the interest of the employer in
supervising such rank-and-file employees.
"Managerial employees" may therefore be
said to fall into two distinct categories: the
"managers" per se, who compose the former
group described above, and the "supervisors"
who form the latter group. Whether they
belong to the first or the second category,
managers, vis-a-vis employers, are, likewise,
employees.
2.2 Constitutionality of the Prohibition
The question is whether the first sentence
of Art. 245 of the Labor Code, prohibiting
managerial employees from forming,
assisting or joining any labor
organization, is constitutional in light of
Art. III, Sec. 8 of the Constitution which
provides:
The right of the people, including those
employed in the public and private sectors, to
form unions, association, or societies for
purposes not contrary to law shall not be
abridged.
The present Article 245 is the result of the
amendment of the Labor Code in 1989 by

R.A. No. 6715, otherwise known as the
Herrera-Veloso Law. Unlike the Industrial
Peace Act or the provisions of the Labor
Code which it superseded, R.A. No. 6715
provides separate definitions of the terms
"managerial" and "supervisory
employees" (See Art. 212[m]).
Although the definition of "supervisory
employees" seems to have been unduly
restricted to the last phrase of the
definition in the Industrial Peace Act, the
legal significance given to the phrase
"effectively recommends" remains the
same. In fact, the distinction between top
and middle managers, who set
management policy, and front-line
supervisors, who are merely responsible
for ensuring that such policies are carried
out by the rank and file, is articulated in
the present definition.
The rationale for this inhibition has been
stated to be, because if these managerial
employees would belong to or be affiliated
with a Union, the latter might not be assured
of their loyalty to the Union in view of evident
conflict of interests. The Union can also
become company-dominated with the
presence of managerial employees in Union
membership.
2.2a Other Opinions
Justice Puno further airs a warning: “To
declare Article 245 of the Labor Code
unconstitutional cuts deep into our existing
industrial life and will open the floodgates to
unionization at all levels of the industrial
hierarchy. Such a ruling will wreak havoc on
the existing set-up between management and
labor. If all managerial employees will be
allowed to unionize, then all who are in the
payroll of the company, starting from the
president, vice-president, general managers
and everyone, with the exception of the
directors, may go on strike or picket the
employer. Company officers will join forces
with the supervisors and rank-and-file.”
3. EVOLUTION OF SUPERVISORS’
RIGHT TO ORGANIZE
Unlike managers, supervisors can
unionize.
LABOR RELATIONS: Azucena Vol. II
3.1 First Period: Under the Industrial
Peace Act
The problem was that although the
Industrial Peace Act defined a
“supervisor,” it failed to define a
“manager” or “managerial employee.” So
the question arose: Did the word
“supervisor” include “manager”? Could
managers also unionize? In a case
involving Caltex managers, the Court
answered affirmatively.
3.2 Second Period: Under the Labor Code
Before Amendment by R.A. No. 6715
This time the question was: Did
‘managerial employee” include
“supervisor”? Were supervisors also
banned from unionizing? Yes. The
prohibition was applied to supervisors in
the case of Bulletin Publishing Corp. V.
Sanchez, 144 SCRA 428, decided on
October 7, 1986.
3.3 Third Period: Under the Labor Code as
Amended by RA 6715
R.A. No. 6715 presents a compromise
formula: retain the ineligibility of
managerial employees but revive the
right of supervisory employees to
unionize.
4. DEFINITION OF MANAGER AND
SUPERVISOR
Unlike in the Industrial Peace Act and the
Labor Code before such amendment, the
power to decide on managerial acts is
now separated from the power to
recommend those managerial acts, such
as laying down policy, hiring or dismissing
employees, etc. A supervisor has the
power only to recommend while a
managerial employee has the power to
decide and do those acts.
But to make one a supervisor, the power
to recommend must not be merely
routinary or clerical in nature but requires
the use of independent judgment. In

other words, the recommendation is (1)
discretionary or judgmental (not clerical),
(2) independent (not a dictation of
someone else), and (3) effective (given
particular weight in making the
management decision). If these qualities
are lacking or, worse, if the power to
recommend is absent, then the person is
not really a supervisor but a rank-and-file
employee and therefore belongs or
should belong to a rank-and-file
organization.
Similarly, a so-called manager, no matter
how his position is titled, is not really a
manager in the eyes of the law if he does
not possess managerial powers (to lay
down and execute management policies
and/ or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline
employees). If he can only recommend
the exercise of any of these powers, he is
only a supervisor, hence, may join, assist
or form a supervisors’ organization.
5. TEST OF SUPERVISORY STATUS
The test of "supervisory" or "managerial
status" depends on whether a person
possesses authority to act in the interest of
his employer in the matter specified in Article
212 (k) of the Labor Code and Section 1 (m) of
its Implementing Rules and whether such
authority is not merely routinary or clerical in
nature, but requires the use of independent
judgment. Thus, where such recommendatory
powers as in the case at bar, are subject to
evaluation, review and final action by the
department heads and other higher
executives of the company, the same,
although present, are not effective and not an
exercise of independent judgment as required
by law.
It is the nature of an employee's functions and
not the nomenclature or title given to his job
which determines whether he has rank-and-
file or managerial status. Among the
characteristics of managerial rank are: (1) He
is not subject to the rigid observance of
regular office hours; (2) His work requires the
consistent exercise of discretion and
judgment in its performance; (3) the output
produced or the result accomplished cannot
be standardized in relation to a given period
LABOR RELATIONS: Azucena Vol. II
of time; (4) He manages a customarily
recognized department or subdivision of the
establishment, customarily and regularly
directing the work of other employees therein;
(5) He either has the authority to hire or
discharge other employees or his suggestions
and recommendations as to hiring and
discharging, advancement and promotion or
other change of status of other employees are
given particular weight; and (6) As a rule, he
is not paid hourly wages nor subjected to
maximum hours of work.
5.1 The Power to Recommend
The power to recommend, in order to
qualify an employee as a supervisor,
must not only be effective but should
require the use of independent judgment.
It should not be merely of a routinary or
clerical nature.
5.2 Examples of Ineffective or Clerical
Recommendation
6. SEGREGATION OF RANK-AND-FILE
AND SUPERVISORS
Article 245 allows supervisory employees
to form, join, or assist separate labor
organizations of their own, but they are
not eligible for membership in a labor
organization of the rank-and-file
employees. Neither may a rank-and-file
join a union of supervisors.
This policy of segregating the supervisors’
union from that of the rank-and-file is
founded on fairness to the employees
themselves. It will be doubly detrimental
to the employer if the supervisors and the
rank-and-file, as members of only one
union, could take a common stand
against the employer.
6.1 Effects of Having Mixed Membership
A union whose membership is a mixture
of supervisors and rank-and-file is not and
cannot become a legitimate labor
organization. It cannot petition for a
certification election, much less ask to be
recognized as the bargaining
representative of employees.

The Labor Code has made it a clear statutory
policy to prevent supervisory employees from
joining labor organizations consisting of rank-
and-file employees as the concerns which
involve members of either group are normally
disparate and contradictory.
Clearly, based on Article 245, a labor
organization composed of both rank-and-file
and supervisory employees is no labor
organization at all. It cannot, for any guise or
purpose, be a legitimate labor organization.
Not being one, an organization which carries a
mixture of rank-and-file and supervisory
employees cannot possess any of the rights of
a legitimate labor organization, including the
right to file a petition for certification election
for the purpose of collective bargaining. It
becomes necessary, therefore, anterior to the
granting of an order allowing a certification
election, to inquire into the composition of
any labor organization whenever the status of
the labor organization is challenged on the
basis of Article 245 of the Labor Code.
The rationale behind the Code's exclusion of
supervisors from unions of rank-and-file
employees is that such employees, while in
the performance of supervisory functions,
become the alter ego of management in the
making and the implementing of key
decisions at the sub-managerial level.
Certainly, it would be difficult to find unity or
mutuality of interests in a bargaining unit
consisting of a mixture of rank-and-file and
supervisory employees. And this is so because
the fundamental test of a bargaining unit's
acceptability is whether or not such a unit will
best advance to all employees within the unit
the proper exercise of their collective
bargaining rights. The Code itself has
recognized this, in preventing supervisory
employees from joining unions of rank-and-file
employees.
6.2 How Many? How Few?
6.3 Illegal Mixed Membership Must Be
Raised and Proved
6.4 Cancellation of Union Registration on
Ground of Inclusion of Disqualified
Positions: What needs to be Proved
What is essential is the nature of the
employee’s function and not the
LABOR RELATIONS: Azucena Vol. II
nomenclature or title given to the job which
determines whether the employee has rank-
and-file or managerial status or whether he is
a supervisory employee.
The implementing Rules state that the
legal personality of the petitioner union
cannot be subject to collateral attack “but
may be questioned only in an
independent petition for cancellation.”
To summarize, the petition for
certification election is not the proper
forum to raise the issue of legal
personality of the union. Also, a petition
to cancel union registration cannot be
heard or decided by the Med-Arbiter but
either the DOLE Regional Director for
enterprise-level or the BLR Director for
national unions.
6.5 Affiliation of Supervisors and Rank-
and-File Unions
Even in affiliating with a federation, the
unions of the supervisors and of the ran-
and-file should be segregated.
The peculiar role of supervisors is such that
while they are not managers, when they
recommend action implementing
management policy or ask for the discipline or
dismissal of subordinates, they identify with
the interests of the employer and may act
contrary to the interests of the rank-and-file.
We agree with the petitioner's contention that
a conflict of interest may arise in the areas of
discipline, collective bargaining and strikes.
Members of the supervisory union might
refuse to carry out disciplinary measures
against their co-member rank-and-file
employees. In the area of bargaining, their
interests cannot be considered identical. The
needs of one are different from those of the
other. Moreover, in the event of a strike, the
national federation might influence the
supervisors' union to conduct a sympathy
strike on the sole basis of affiliation.
Thus, if the intent of the law is to avoid a
situation where supervisors would merge with
the rank and-file or where the supervisors'
labor organization would represent conflicting
interests, then a local supervisors' union
should not be allowed to affiliate with the

national federation of union of rank-and-file
employees where that federation actively
participates in union activity in the company.
6.6 Restriction in Affiliation Clarified in De
La Salle
First, the rank-and-file employees are
directly under the authority of the
supervisory employees. Second, the
national federation is actively involved in
union activities in the company. If these
two conditions are absent, the rule
prohibiting supervisors from affiliating
with the mother union of the rank-and-file
union does not apply.
The affiliation of two local unions in a
company with the same national federation is
not by itself a negate-on of their
independence since in relation to the
employer, the local unions are considered as
the principals, while the federation is deemed
to be merely their agent.
7. CONFIDENTIAL EMPLOYEES
7.1 First Swing: Inclusion Among Rank-
and-File
7.2 Second Swing: Exclusion from Rank-
and-File
7.3 Third Swing: Inclusion Among
Supervisors
7.4 Fourth Swing: Inclusion Among
Monthly Paid Rank-and-File
7.4a Limited Exclusion; Doctrine of
Necessary Implication
A confidential employee is one entrusted
with confidence on delicate matters, or
with the custody, handling, or care and
protection of the employer's property.
While Art. 245 of the Labor Code singles
out managerial employees as ineligible to
join, assist or form any labor organization,
under the doctrine of necessary
implication, confidential employees are
similarly disqualified.
LABOR RELATIONS: Azucena Vol. II
The doctrine of necessary implication
means that what is implied in a statute is
as much a part thereof as that which is
expressed.
7.4b The Metrolab and Meralco
Summations: Exclusion from Bargaining
unit and Closed-shop Clause
Although Article 245 of the Labor Code limits
the ineligibility to join, form and assist any
labor organization to managerial employees,
jurisprudence has extended this prohibition to
confidential employees or those who by
reason of their positions or nature of work are
required to assist or act in a fiduciary manner
to managerial employees and hence, are
likewise privy to sensitive and highly
confidential records.
7.4c Who Are Confidential Employees?
Confidential employees assist and act in a
confidential capacity to, or have access to
confidential matters of, persons who
exercise managerial functions in the field
of labor relations. As such, the rationale
behind the ineligibility of managerial
employees to form, assist or join a labor
union equally applies to them.
Confidential employees are those who by
reason of their positions or nature of work
are required to assist or act in a fiduciary
manner to managerial employees and
hence, are likewise privy to sensitive and
highly confidential records.
By the very nature of their functions, they
assist and act in a confidential capacity
to, or have access to confidential matters
of, persons who exercise managerial
functions in the field of labor relations.
7.4d The Labor Nexus
The broad rationale behind this rule is that
employees should not be placed in a position
involving a potential conflict of interests.
"Management should not be required to
handle labor relations matters through
employees who are represented by the union
with which the company is required to deal
and who in the normal performance of their

duties may obtain advance information of the
company's position with regard to contract
negotiations, the disposition of grievances, or
other labor relations matters."
Art. 245 of the Labor Code does not
directly prohibit confidential employees
from engaging in union activities.
However, under the doctrine of necessary
implication, the disqualification of
managerial employees equally applies to
confidential employees. The confidential-
employee rule justifies exclusion of
confidential employees because in the
normal course of their duties they
become aware of management policies
relating to labor relations. It must be
stressed, however, that when the
employee does not have access to
confidential labor relations information,
there is no legal prohibition against
confidential employees from forming,
assisting, or joining a union.
7.4e New CBA may include employees
excluded from old CBA; Expired CBA may
be Modified, not just Renewed
The employer and the union in an
enterprise may negotiate and agree
whom to cover in their CBA. And they are
free to change their agreement: people
excluded before may be included now, or
vice versa.
8. SECURITY GUARDS MAY JOIN
RANK-AND-FILE OR SUPERVISORS
UNION
Under the old rules, security guards were
barred from joining a labor organization of
the rank-and-file. Under RA 6715, they
may now freely join a labor organization
of the rank-and-file or that of the
supervisory union, depending on their
rank.
________
Article 245-A. Effect of inclusion as
members of employees outside the
bargaining unit. - The inclusion as union
members of employees outside the
bargaining unit shall not be a ground for
LABOR RELATIONS: Azucena Vol. II
the cancellation of the registration of the
union. Said employees are automatically
deemed removed from the list of
membership of said union. (Introduced as
new provision by Section 9, Republic Act
No. 9481 which lapsed into law on May
25, 2007 and became effective on June
14, 2007).
________
Article 246. Non-abridgment of right to
self-organization. – It shall be unlawful for
any person to restrain, coerce,
discriminate against or unduly interfere
with employees and workers in their
exercise of the right to self-organization.
Such right shall include the right to form,
join, or assist labor organizations for the
purpose of collective bargaining through
representatives of their own choosing and
to engage in lawful concerted activities
for the same purpose or for their mutual
aid and protection, subject to the
provisions of Article 264 of this Code. (As
amended by Batas Pambansa Bilang 70,
May 1, 1980).
________
1. CONCEPT OF THE RIGHT TO SELF
ORGANIZATION
This is a key article that offers an
inclusionary definition of the right to self-
organization (S.O.) by saying not what it
is but what it includes. It includes at least
two rights: (1) the right to form, join or
assist labor organizations, and (2) the
right to engage in lawful concerted
activities. The “labor organization” may
be a union or association of employees,
as mentioned in Article 212(g). Its
purposes may be collective bargaining (as
stated in this Article) or dealing with the
employer [as stated in Article 212(g)].
The right to form labor organization is
twin to the right to engage in concerted
activities.
It is worth noting, finally, that the right to
self-organization is granted not only to
employees but to “workers,” whether
employed or not. In fact, constitutionally

speaking, the right to form associations or
societies is a right of the “people,”
whether workers or not.
No “person”—inside or outside of
government, employer or non-employer,
unionist or non-unionist—may abridge
these rights. If abridged in the workplace,
the abridgment is termed ULP (unfair
labor practice).
Article 246, is both (in mixed metaphors),
the conceptual mother and the
formidable fortress of the prohibition
expounded in the next three articles.
________
Title VI
UNFAIR LABOR PRACTICES
Chapter I
CONCEPT
Article 247. Concept of unfair labor
practice and procedure for prosecution
thereof. – Unfair labor practices violate
the constitutional right of workers and
employees to self-organization, are
inimical to the legitimate interests of both
labor and management, including their
right to bargain collectively and otherwise
deal with each other in an atmosphere of
freedom and mutual respect, disrupt
industrial peace and hinder the promotion
of healthy and stable labor-management
relations.
Consequently, unfair labor practices are
not only violations of the civil rights of
both labor and management but are also
criminal offenses against the State which
shall be subject to prosecution and
punishment as herein provided.
Subject to the exercise by the President
or by the Secretary of Labor and
Employment of the powers vested in
them by Articles 263 and 264 of this
Code, the civil aspects of all cases
involving unfair labor practices, which
may include claims for actual, moral,
exemplary and other forms of damages,
attorney’s fees and other affirmative
LABOR RELATIONS: Azucena Vol. II
relief, shall be under the jurisdiction of
the Labor Arbiters. The Labor Arbiters
shall give utmost priority to the hearing
and resolution of all cases involving unfair
labor practices. They shall resolve such
cases within thirty (30) calendar days
from the time they are submitted for
decision.
Recovery of civil liability in the
administrative proceedings shall bar
recovery under the Civil Code.
No criminal prosecution under this Title
may be instituted without a final
judgment finding that an unfair labor
practice was committed, having been first
obtained in the preceding paragraph.
During the pendency of such
administrative proceeding, the running of
the period of prescription of the criminal
offense herein penalized shall be
considered interrupted: Provided,
however, that the final judgment in the
administrative proceedings shall not be
binding in the criminal case nor be
considered as evidence of guilt but
merely as proof of compliance of the
requirements therein set forth. (As
amended by Batas Pambansa Bilang 70,
May 1, 1980 and later further amended
by Section 19, Republic Act No. 6715,
March 21, 1989).
________
1. CONCEPT OF UNFAIR LABOR
PRACTICE
As noted at the start of Book V a major
aim of labor relations policy is industrial
democracy whose realization is most felt
in free collective bargaining or
negotiation over terms and conditions of
employment. But for bargaining
negotiation to be true and meaningful,
the employees, first of all, must organize
themselves. Because self-organization is
a prerequisite—the lifeblood—of industrial
democracy, the right to self-organize has
been enshrined in the Constitution, and
any act intended to weaken or defeat the
right is regarded by law as an offense.
The offense is technically called “unfair

labor practice” (ULP). Literally, it does not
mean an unfair practice by labor but a
practice unfair to labor, although the
offender may either be an employer or a
labor organization.
The victim of the offense is not just the
workers as a body and the well-meaning
employers who value industrial peace,
but the State as well. Thus, the attack to
this constitutional right is considered a
crime which therefore carries both civil
and criminal liabilities.
A consideration of the entire law on the
matter clearly discloses the intention of the
lawmaker to consider acts which are alleged
to constitute unfair labor practices as
violations of the law or offenses, to be
prosecuted in the same manner as a criminal
offense. The reason for this provision is that
the commission of an unfair labor practice is
an offense against a public right or interest
and should be prosecuted in the same
manner as a public offense. The reason for
the distinction between an unfair labor
practice case and a mere violation of an
employer of its contractual obligation towards
an employees is, x x x that unfair labor
practice cases involve violations of a public
right or policy, to be prosecuted like criminal
offenses whereas a breach of an obligation of
the employer to his employee is only a
contractual breach to be redressed like an
ordinary contract or obligation.
1.1 Elements
Commission of unfair labor practice at the
enterprise level needs the presence of
certain elements: first, there is
employer-employee relationship
between the offender and the offended;
and second, the act done is expressly
defined in the Code as an act of unfair
labor practice. The first element is
required because ULP is negation of, a
counteraction to, the right to organize
which is available only to employees in
relation to their employer. No
organizational right can be negated or
assailed if employer-employee
relationship is absent in the first place.
LABOR RELATIONS: Azucena Vol. II
The second element is that the act done
is prohibited by the Code, specifically in
Articles 248 and 261 for an employer and
Article 249 for a labor organization. Art.
212(k) emphatically defines “unfair labor
practice” as “any unfair labor practice as
expressly defined in this Code.” Art. 261
amplifies Art. 248(i) by stating that
violation of a CBA is unfair labor practice
only if the violation is gross in character.
The prohibited acts, it should be stressed,
are all related to the worker’s self-
organizational right and to the
observance of a collective bargaining
agreement (CBA). The only possible
exception is Art. 248(f) referring to
dismissing or prejudicing an employee
giving testimony under this Code
[regardless of the subject of the
testimony].
Because ULP is and has to be related to
the right to self-organization and to the
observance of the CBA, it follows that not
every unfair act is “unfair labor practice.”
ULP, therefore, has a limited, technical
meaning because it is a labor relations
concept with a statutory definition. It
refers only to acts opposed to worker’s
right to organize. Without that element,
the act, no matter how unfair, is not
unfair labor practice as legally defined.
Stripped of legalese, unfair labor practice,
when committed by the employer,
commonly connotes anti-unionism.
1.2 Prejudice to Public Interest not an
Element of U.L.P.
A showing of prejudice to public interest
is not a requisite for ULP charges to
prosper.
2. PROSECUTION OF U.L.P.
Under Art. 247 ULP has civil as well as
criminal aspects. The civil aspect may
include liability for damages and these
may be passed upon by a labor arbiter.

To prosecute ULP as criminal offense is
not possible until after finality of
judgment in the labor case, finding that
the respondent indeed committed unfair
labor practice. But such judgment will not
serve as evidence of ULP in the criminal
case; the criminal charge must be proved
independently from the labor case.
Moreover, while only substantial evidence
is required in labor case in the NLRC,
proof beyond reasonable doubt is needed
to convict in the criminal case of ULP.
The criminal charge, states Art. 228, falls
under the concurrent jurisdiction of the
Municipal or Regional Trial Court. The
same article defines the penalty of fine
and/ or imprisonment.
Under Art. 289, the penalty shall be
imposed upon the guilty officers of a
corporation, partnership, association or
entity. If the ULP is committed by a labor
organization the parties liable are those
mentioned in Art. 249.
The offense prescribes in one year. (Art.
290)
________
Chapter II
UNFAIR LABOR PRACTICES OF
EMPLOYERS
Article 248. Unfair labor practices of
employers. – It shall be unlawful for an
employer to commit any of the following
unfair labor practice:
(a) To interfere with, restrain or coerce
employees in the exercise of their right to
self-organization;
(b) To require as a condition of
employment that a person or an
employee shall not join a labor
organization or shall with-draw from one
to which he belongs;
(c) To contract out services or functions
being performed by union members when
such will interfere with, restrain or coerce
LABOR RELATIONS: Azucena Vol. II
employees in the exercise of their rights
to self-organization;
(d) To initiate, dominate, assist or
otherwise interfere with the formation or
administration of any labor organization,
including the giving of financial or other
support to it or its organizers or
supporters;
(e) To discriminate in regard to wages,
hours of work and other terms and
conditions of employment in order to
encourage or discourage membership in
any labor organization. Nothing in this
Code or in any other law shall stop the
parties from requiring membership in a
recognized collective bargaining agent as
a condition for employment, except those
employees who are already members of
another union at the time of the signing
of the collective bargaining agreement.
Employees of an appropriate bargaining
unit who are not members of the
recognized collective bargaining agent
may be assessed a reasonable fee
equivalent to the dues and other fees
paid by members of the recognized
collective bargaining agent, if such non-
union members accept the benefits under
the collective bargaining agreement:
Provided, that the individual authorization
required under Article 242, paragraph (o)
of this Code shall not apply to the non-
members of the recognized collective
bargaining agent;
(f) To dismiss, discharge or otherwise
prejudice or discriminate against an
employee for having given or being about
to give testimony under this Code;
(g) To violate the duty to bargain
collectively as prescribed by this Code;
(h) To pay negotiation or attorney’s fees
to the union or its officers or agents as
part of the settlement of any issue in
collective bargaining or any other
dispute; or
(i) To violate a collective bargaining
agreement.

The provisions of the preceding
paragraph notwithstanding, only the
officers and agents of corporations,
associations or partnerships who have
actually participated in, authorized or
ratified unfair labor practices shall be held
criminally liable. (As amended by Batas
Pambansa Bilang 130, August 21, 1981).
________
1. CONDITIONS PRECEDENT TO U.L.P.
CHARGE
Before an employee may be considered
aggrieved by an alleged unfair labor
practice (ULP) by an employer, it must be
demonstrated, firstly, that the injured
party comes within the definition of
“employee” as that term is defined by the
Code, and secondly, the act charged as
ULP must fall under the prohibition of Art.
248 (acts of the employer) or 249 (acts of
the union).
Nonetheless, specific denomination of the
act is not necessary to prosecute ULP. In
resolving the question of whether or not
an employer committed the act charged
in the complaint, it is of no consequence,
either as a matter of procedure or of
substantive law, how the act is
denominated—whether as a restraint,
interference or coercion, or a fundamental right to prescribe and
discriminatory discharge, or as a refusal
to bargain, or even as a combination of
any or all of these. For however the
employer’s conduct may be
characterized, what is important is that it
constituted an unfair labor practice.
2. ILO CONVENTION NO. 98
Article 1
1. Workers shall enjoy adequate protection
against acts of anti-union discrimination in
respect of their employment.
2. Such protection shall apply more
particularly in respect of acts calculated to--
LABOR RELATIONS: Azucena Vol. II
(a) make the employment of a worker subject
to the condition that he shall not join a union
or shall relinquish trade union membership;
(b) cause the dismissal of or otherwise
prejudice a worker by reason of union
membership or because of participation in
union activities outside working hours or, with
the consent of the employer, within working
hours.
Article 2
1. Workers' and employers' organisations shall
enjoy adequate protection against any acts of
interference by each other or each other's
agents or members in their establishment,
functioning or administration.
2. In particular, acts which are designed to
promote the establishment of workers'
organisations under the domination of
employers or employers' organisations, or to
support workers' organisations by financial or
other means, with the object of placing such
organisations under the control of employers
or employers' organisations, shall be deemed
to constitute acts of interference within the
meaning of this Article.
3. NO U.L.P.: ILLUSTRATIVE
INSTANCES OF VALID EXERCISE OF
MANAGEMENT RIGHTS
The law on “unfair labor practices” is not
intended to deprive employers of their
enforce such rules as they honestly
believe to be necessary to the proper,
productive and profitable operation of
their business. Nor are his rights of
selection and discharge of his employees
wrested from him by the Act. Rothenberg
stresses that an employer, subject to the
provisions of his contract with his
employees, has the same full measure of
control over his business as he had prior
to the enactment of the Wagner Act and
undiminished by the amended Act. The
only condition imposed upon this control
is that it must not be exercised so as to
effect a violation of the Act and its several
prohibitions.
3.1 Personnel Movements

As a rule, it is the prerogative of the
company to promote, transfer or even
demote its employees to other positions
when the interests of the company
reasonably demand it. Unless there are
instances which directly point to
interference by the company with the
employees' right to self-organization, the
transfer of private respondent should be
considered as within the bounds allowed
by law. Furthermore, although private
respondent was transferred to a lower
position, his original rank and salary
remained undiminished.
It is the company’s prerogative to
promote its employees to managerial
positions. Managerial positions are offices
which can only be held by persons who
have the trust of the corporation and its
officers. It should not be prevented from
doing so. A promotion which is manifestly
beneficial to an employee should not give
rise to a gratuitous speculation that such
a promotion was made simply to deprive
the union of the membership of the
promoted employee.
3.2 Acceptance of Mass Resignation
Acceptance of a voluntary resignation is
not ULP. In a Philippine Airlines case the
court said that the pilots’ "protest
retirement/resignation" was not a
concerted activity which was protected by
law. They did not assume the status of
strikers. They cannot, therefore, validly
claim that the company committed unfair
labor practice. When the pilots voluntarily
terminated their employment relationship
with the company, they cannot claim that
they were dismissed.
3.3 Grant of Profit-Sharing Benefits to
Non-Union Members
Management has the prerogative to
regulate, according to its discretion and
judgment, all aspects of employment.
This flows from the established rule that
labor law does not authorize the
substitution of the judgment of the
LABOR RELATIONS: Azucena Vol. II
employer in the conduct of its business.
Such management prerogative may be
availed of without fear of any liability so
long as it is exercised in good faith for the
advancement of the employers' interest
and not for the purpose of defeating or
circumventing the rights of employees
under special laws or valid agreement
and are not exercised in a malicious,
harsh, oppressive, vindictive or wanton
manner or out of malice or spite.
3.4 Forced Vacation Leave
Where the vacation leave without pay,
which the employer requires employees
to take in view of the economic crisis, is
neither malicious, oppressive or
vindictive, ULP is not committed.
3.5 Issuance of Rules or Policy
Every business enterprise endeavors to
increase its profits. In the process, it may
adopt or devise means designed towards
that goal.
Even as the law is solicitous of the welfare
of the employees, it must also protect the
right of an employer to exercise what are
clearly management prerogatives. The
free will of management to conduct its
own business affairs to achieve its
purpose cannot be denied.
3.6 Taking Action Against Slowdown
Employees have the right to strike, but
they have no right to continue working on
their own terms while rejecting the
standards desired by their employer.
Hence, an employer does not commit an
unfair labor practice by discharging
employees who engaged in a slowdown,
even if their object is a pay increase
which is lawful. Moreover, an employer
does not violate the act by discharging
only some of the employees who
participate in the slowdown where he
discharges them to serve as an
“example” to stop the slowdown and not
for discriminatory reasons.

4. DETERMINATION OF VALIDITY
Necessarily, determining the validity of an
employer’s act involves an appraisal of
his motives.
An employer may treat freely with an
employee and is not obliged to support his
actions with a reason or purpose. However,
where the attendant circumstances, the
history of employer's past conduct and like
considerations, coupled with an intimate
connection between the employer's action
and the union affiliations or activities of the
particular employee or employees taken as a
whole raise a suspicion as to the motivation
for the employer's action, the failure of the
employer to ascribe a valid reason therefor
may justify an inference that his unexplained
conduct in respect of the particular employee
or employees was inspired by the latter's
union membership or activities.
While the presence of this mere suspicion
neither takes the place of evidence that the
employer's conduct was improperly motivated
nor dispenses with the requirement of proof of
the fact, such suspicion, when coupled with
other facts which in themselves, might have
been inadequate to support an adverse
finding against the employer, may suffice to
sustain a finding that the employer's action
violated the prohibition of the Act.
5. FIRST U.L.P.: INTERFERENCE (ART.
248[a])
In summarized form, the nine U.L.P. acts
of an employer under Art. 248 are: (1)
Interference, (2) “yellow dog” condition,
(3) contracting out, (4) company
unionism, (5) discrimination, (6)
discrimination because of testimony, (7)
violation of duty to bargaining, (8) paid
negotiation, and (9) violation of CBA.
5.1 Interrogation
Persistent interrogation of employees to
elicit information as to what had
happened at union meetings and the
identity of the active union employees
was held as violative of organizational
rights of employees.
LABOR RELATIONS: Azucena Vol. II
In order that the questioning of an
employee concerning his union activities
would not be deemed coercive, the
employer must communicate to the
employee the purpose of the questioning,
assure him that no reprisal would take
place, and obtain his participation on a
voluntary basis. In addition, questioning
must also occur in a context free from
employer hostility to union organization
and must not itself be coercive in nature.
5.2 U.L.P. Even Before Union is Registered
An employer who interfered with the right
to self-organization before the union is
registered can be held guilty of ULP.
5.3 Prohibiting Organizing Activities
A rule prohibiting solicitation of union
membership in company property is
unlawful if it applies to non-working time
as well as to working time.
Where majority of the employees live on
the premises of the employer and cannot
be reached by any means or procedures
practically available to union organizers,
the employer may be required to permit
non-employee union organizers to come
within its premises, in order to solicit
employees.
However, in the absence of showing that
the illegal dismissal was dictated by anti-
union motives, the same does not
constitute an unfair labor practice as
would be a valid ground for strike. The
remedy is an action for reinstatement
with backwages and damages.
We have held that unfair labor practice
cases are not, in view of the public
interest involved, subject to
compromises.
5.4 Violence or Intimidation
An employer unlawfully coerced
employees by directing two individuals to
his office at gun point on the day of
representation election after the

individuals had informed the employer
that they were on the premises to vote in
the election.
5.5 Espionage and Surveillance
One form of “pressure” which some over-
eager employers sometimes use is the
practice of spying upon employees. This
device consists of using one or a small
group of employees, or other agents,
inspired by profit opportunism,
vengeance or come kindred human frailty
to use his or their access to employees’
quarters and affairs for the purpose of
spying upon fellow employees and
reporting back to the employer. It is
plainly evident that such conduct on the
employer’s part, however subtly it may
be accomplished, constitutes interference
with the employee’s exercise of their
rights. Inasmuch as the “pressure” results
more from the employees’ apprehension
than from the employer’s purpose in
spying and the use of its result, it has
been held to be no answer to a charge of
unfair labor practice that the fruits of
espionage were not used.
When an employer engages in
surveillance or takes steps leading his
employees to believe it is going on, a
violation results because the employees
come under threat of economic coercion
or retaliation for their union activities.
Unlawful surveillance was properly found
where supervisors were present near the
place where union meeting was being
held to check the names of employees
leaving the meeting.
5.6 Economic Inducements
A violation results from an employer’s
announcement of benefits prior to a
representation election, where it is
intended to induce the employees to vote
against the union.
It is well-settled rule that while a
representation election is pending, the
conferral of employee benefits for the
LABOR RELATIONS: Azucena Vol. II
purpose of inducing the employees to
vote against a union is unlawful.
5.7 Employer’s Expression of Opinion;
Totality of Conduct Doctrine
The doctrine holds that the culpability of
employer’s remarks was to be evaluated
not only on the basis of their implications,
but against the background of and in
conjunction with collateral circumstances.
(1) Letter to individual employees—It is an act
of interference for the employer to send a
letter to all employees notifying them to
return to work at a time specified therein,
otherwise new employees would be engaged
to perform their jobs. Individual solicitation of
the employees or visiting their homes, with
the employer or his representative urging the
employees to cease union activity or cease
striking, constitutes unfair labor practice. All
the above-detailed activities are unfair labor
practices because they tend to undermine the
concerted activity of the employees, an
activity to which they are entitled free from
the employer's molestation.
(2) Strike-breaking—When the respondent
company offered reinstatement and
attempted to "bribe" the strikers with
"comfortable cots," "free coffee and
occasional movies," "overtime" pay for "work
performed in excess of eight hours," and
"arrangements" for their families, so they
would abandon the strike and return to work,
they were guilty of strike-breaking and/or
union-busting and, consequently, of unfair
labor practice.
(3) Acts violative of right to organize—
Violative of the right to organize, form and
join labor organizations are the following acts:
the offer of a Christmas bonus to all "loyal"
employees of a company shortly after the
making of a request by the union to bargain;
wage increases given for the purpose of
mollifying employees after the employer has
refused to bargain with the union, or for the
purpose of inducing striking employees to
return to work; the employer's promises of
benefits in return for the strikers'
abandonment of their strike in support of their
union; and the employer's statement, made
about 6 weeks after the strike started, to a
group of strikers in a restaurant to the effect
that if the strikers returned to work, they

would receive new benefits in the form of
hospitalization, accident insurance, profit-
sharing, and a new building to work in.
(4) Test of interference or coercion—The test
of whether an employer has interfered with
and coerced employees within the meaning of
subsection (a) (1) is whether the employer
has engaged in conduct which it may
reasonably be said tends to interfere with the
free exercise of employees' rights under
section 3 of the Act, and it is not necessary
that there be direct evidence that any
employee was in fact intimidated or coerced
by statements of threats of the employer if
there is a reasonable inference that anti-union
conduct of the employer does have an
adverse effect on self-organization and
collective bargaining.
(5) The “totality of conduct” doctrine—the
letters of the company president to the
individual strikers should not be considered by
themselves alone but should be read in the
light of the preceding and subsequent
circumstances. The letters should be
interpreted according to the "totality of
conduct doctrine," whereby the culpability of
an employer's remarks has to be evaluated
not only on the basis of their implicit
implications, but were to be appraised against
the background of and in conjunction with
collateral circumstances.
5.8 Mass Layoff Amounting to U.L.P.
A company’s capital reduction efforts, to
camouflage the fact that it has been
making profits, and to justify the mass
lay-off of its employees especially union
members, were an unfair labor practice
which can neither be countenanced nor
condoned.
5.9 Lockout or Closure Amounting to
U.L.P.
A lockout, actual or threatened, as a
means of dissuading the employees from
exercising their rights under the Act is
clearly an unfair labor practice. However,
to hold an employer who actually or who
threatens to lock out his employees guilty
of a violation of the Act, the evidence
must establish that the purpose thereof
LABOR RELATIONS: Azucena Vol. II
was to interfere with the employees’
exercise of their rights.
An honest closing of one’s plant is not a
violation of the Act. However, cessation of
operations, actual or threatened, does
constitute an unfair labor practice, if it is,
directly or indirectly, expressly or by
innuendo, calculated or employed to
interfere with the employees’ rights under
the Act. Proof of the employer’s state of
mind, unless it is expressed, is often very
difficult. However, it may be proven by
circumstantial evidence.
The rule is that it is unlawful for the
employer to threaten its employees with
moving or shutting down the plant and
consequent loss of employment, as the
result of their support for the union.
An employer which closed its business to
put an end to a union’s activities, and
which made no effort to allow the
employees’ attempt to exercise their right
to self-organization and collective
bargaining, and even threatening the
employees that they would lose their jobs
if they did not cease affiliation with the
union, commits unfair labor practice.
5.9a Sale in Bad Faith
Where the sale of a business enterprise was
attended with bad faith, there is no need to
consider the applicability of the rule that labor
contracts being in personam are not
enforceable against the transferee. The latter
is in the position of tort-feasor having been a
party likewise responsible for the damage
inflicted on the members of the aggrieved
union and therefore cannot justly escape
liability.
It is irrational to suppose that a purchaser
of a manufacturing enterprise is not
aware of the labor-management situation
in the firm he bought.
5.9b Assumption of Obligations by New
Company
5.10 Successor Employer; Piercing the
Corporate Veil

Closure is likewise not legal and the
employees cannot be separated if, in fact,
there is no closure because the “closed”
department or company reappeared
although under a new name. If the “new”
company is, for instance, engaging in the
same business as the closed company or
department, or is owned by the same
people, and the “closure” is calculated to
defeat the workers’ organizational right,
then, the closure may be declared a
“subterfuge” and the doctrine of
successor employer will be applied, that
is, the new company will be treated as a
continuation or successor of the one that
closed. If such be the case, the separated
employees will have to be employed in
the “new” firm because in the first place
they should not have been separated at
all.
The “successor employer” ruling is an
enforcement of the legal recourse called
“piercing the veil of corporate entity.”
Under the doctrine of piercing the veil of
corporate entity, when valid grounds
therefore exist, the legal fiction that a
corporation is an entity with a juridical
personality separate and distinct from its
members or stockholders may be
disregarded. In such cases, the corporation
will be considered as a mere association of
persons. The members or stockholders of the
corporation will be considered as the
corporation, that is, liability will attach directly
to the officers and stockholders. The doctrine
applies when the corporate fiction is used to
defeat public convenience, justify wrong,
protect fraud, or defend crime, or when it is
made as a shield to confuse the legitimate
issues or where a corporation is the mere
alter ego or business conduit of a person, or
where the corporation is so organized and
controlled and its affairs are so conducted as
to make it merely an instrumentality, agency,
conduit or adjunct of another corporation.
6. SECOND U.L.P.: “YELLOW DOG”
CONDITION (ART. 248[b])
Contract provisions whereby an employee
agrees that during the period of his
employment he will not become a
LABOR RELATIONS: Azucena Vol. II
member of a labor union have been
outlawed in the United States, by
legislation in some states, as well as by
Federal legislation.
The “yellow dog” contract is a promise
exacted from workers as a condition of
employment that they are not to belong
to, or attempt to foster, a union during
their period of employment.
An American scheme, the typical yellow
dog contract is an at-will employment
agreement which contains, in addition to
the usual provisions for employment, the
following three provisions: (1) a
representation by the employee that he is
not a member of a labor union; (2) a
promise by the employee not to join a
labor union; (3) a promise by the
employee that, upon joining a labor
union, he will quit his employment.
7. THIRD U.L.P.: CONTRACTING OUT
(ART. 248[c])
Contracting out itself, is not ULP; it is the
ill intention that makes it so.
An employer’s contracting out of work is
itself an unfair labor practice where
motivated by a desire to prevent his
employees from organizing and selecting
a collective bargaining representative, rid
himself of union men, or escape his
statutory duty to bargain collectively with
his employees’ bargaining representative.
As we have previously held, the company can
determine in its best business judgment
whether it should contract out the
performance of some of its work for as long as
the employer is motivated by good faith, and
the contracting out must not have been
resorted to to circumvent the law or must not
have been the result of malicious or arbitrary
action.
7.1 Contracting out restricted by CBA
7.2 Runaway Shop
Resorting to a runaway shop is a U.L.P. A
“runaway” shop is defined as 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 plant
because of their union activities.
Moreover, it has been held that where a
plant removal is for business reasons but
the relocation is hastened by anti-union
motivation, the early removal is an unfair
labor practice. It is immaterial that the
relocation is accompanied by a transfer of
title to a new employer who is an alter
ego of the original employer.
Runaway shop refers to business
relocation animated by anti-union animus.
Sameness of business is not reason
enough to show run-away shop to pierce
the veil of separate corporate entity.
A "runaway shop" is defined as 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 plant because of their union activities.
It is one wherein the employer moves its
business to another location or it temporarily
closes its business for anti-union purposes. A
"runaway shop" in this sense, is a relocation
motivated by anti-union animus rather than
for business reasons.
Mere ownership by a single stockholder or by
another corporation of all or nearly all of the
capital stock of a corporation is not of itself
sufficient ground for disregarding the
separate corporate personality.
This fiction of corporate entity can only be
disregarded in certain cases such as when it is
used to defeat public convenience, justify
wrong, protect fraud, or defend crime. To
disregard said separate juridical personality of
a corporation, the wrongdoing must be clearly
and convincingly established.
8. FOURTH U.L.P.: COMPANY-
DOMINATION OF UNION (ART. 248[d])
Domination of a labor union usually
manifests in the following forms:
LABOR RELATIONS: Azucena Vol. II
(a) Initiation of the company union idea.
This may further occur in three styles: (1)
outright formation by the employer or his
representatives; (2) employee formation
on outright demand or influence by
employer; and (3) managerially
motivated formation by employees.
(b) Financial support to the union. An
employer commits unfair labor practice if
he defrays the union expenses or pays
the attorney’s fees to the attorney who
drafted the constitution and by-laws of
the union.
(c) Employer encouragement and
assistance. Immediately granting the
union exclusive recognition as a
bargaining agent without determining
whether the union represents the majority
of employees is an illegal form of
assistance amounting to unfair labor
practice.
(d) Supervisory assistance. This takes the
form of soliciting membership, permitting
union activities during working time or
coercing employees to join the union by
threats of dismissal or demotion.
An employer was held to have unlawfully
aided a union by assisting its attempt to
secure authorization cards from
employees and by executing a contract
with such union when it was not the
authorized representative of the
employees.
A labor union is company-dominated where it
appears that key officials of the company
have been forcing employees belonging to a
rival labor union to join the former under pain
of dismissal should they refuse to do so; that
hey officials of the company, as well as its
legal counsel, have attended the election of
officers of the former union; that officers and
members of the rival union were dismissed
allegedly pursuant to a retrenchment policy of
the company, after they had presented
demands for the improvement of the working
conditions despite its alleged retrenchment
policy; and that, after dismissal of the
aforesaid officers of the rival labor union, the

company engages the services of new
laborers.
9. FIFTH U.L.P.: DISCRIMINATION
(ART. 248[e])
What the law prohibits is discrimination to
encourage or discourage membership in a
labor organization. Where the purpose is
to influence the union activity of
employees, the discrimination is unlawful.
But discrimination is not the same as
differentiation or classification. For
instance, it is common management
practice to classify jobs and grant them
varying levels of pay benefits package.
These are valid differentiations that
recognize differences in job requirements
or contributions. They are not necessarily
discrimination classifiable as ULP.
Under the Industrial Peace Act, to constitute
an unfair labor practice, the discrimination
committed by the employer must be in regard
to the "hire or tenure of employment or any
term or condition of employment to
encourage or discourage membership in any
labor organization." The exaction, by the
Company, from the strikers returning to work,
of a promise not to destroy company property
and not to commit acts of reprisal against the
Union-members who did not participate in the
strike, cannot be considered as intended to
encourage or discourage Union-membership.
Taking the circumstances surrounding the
prescribing of that condition, the requirement
by the Company is actually an act of self-
preservation and designed to insure the
maintenance of peace and order in the
Company premises.
Discouraging membership in a labor
organization includes not only
discouraging adhesion to union
membership but also discouraging
participation in union activities such as
legitimate strike.
9.1 Discrimination in Work Quota
Considered in the light of the anti-union
attitude exhibited by respondent company in
transferring union president Leones from the
main office in Manila to Cebu when the union
was still being organized, and which act was
LABOR RELATIONS: Azucena Vol. II
found by the NLRC as constituting unfair labor
practice and union-busting in connection with
the application for clearance to terminate
Leones filed by respondent company, 34 the
uneven application of its marketing plan by
respondent company is patently an act of
discrimination, considered as an unfair labor
practice under Art. 248(e) of the Labor Code.
9.2 Discrimination in Bonus Allocation or
Salary Adjustments
There is unfair and unjust discrimination
in the granting of salary adjustments
where the evidence shows that (a) the
management paid the employees of the
unionized branch; (b) where the salary
adjustments were granted to employees
of one of its nonunionized branches
although it was losing in its operations;
and (c) the total salary adjustments given
every ten of its unionized employees
would not even equal the salary
adjustments given one employee in the
nonunionized branch.
9.3 Discrimination in Layoff or Dismissal
Even where business conditions justified a
layoff of employees, unfair labor practices
in the form of discriminatory dismissal
were found where only unionists were
permanently dismissed while
nonunionists were not.
Labor is a person's means of livelihood. He
cannot be deprived of his labor or work
without due process of law. Retrenchment
very heart of one's employment. While the
right of strikes at the very heart of an
employer to dismiss an employee is conceded
in a valid retrenchment, the right differs from
and should not be confused with the manner
in which such right is exercised. It should not
be oppressive and abusive since it affects
one's person and property. Due process of law
demands nothing less.
9.4 Discrimination in Regularization
9.5 Discrimination by Blacklisting
A blacklist has been defined as “a list of
persons marked out for special
avoidance, antagonism or enmity on the

part of those who prepare the list, or
those among whom it is intended to
circulate, as where a trade union
‘blacklists’ workmen who refuse to
conform to its rules, or where a list of
insolvent or untrustworthy persons is
published by a commercial agency or
mercantile association.”
When it is resorted to by a combination of
employers to prevent employment of
employees for union activities, it may
constitute unfair labor practice. Aside
from constituting an unfair labor practice,
it may give rise to a right of action for
damages by the employees prejudice
under Article 28 of the new Civil Code.
In its broad sense, however that is, in the
sense of the employer’s circulating a list of
former employees of notorious laziness or
negligence in the performance of their duties
or of incorrigible propensity to create trouble
in the place of employment, it may be a
proper measure for the protection of
employers. Thus, it has been held that unless
the action of the employers in combining or in
passing communications among themselves
for the purpose of excluding unwanted
workers from employment, constitutes a libel
or slander (and according to some decisions
the defamation, to be actionable, must be
malicious), the excluded employee possesses
no right of action because the employers’
community of interest acts both to justify the
combination and to privilege the
communication.
9.6 Indirect Discrimination
It is a well settled rule of law that what is
prohibited to be done directly shall not be
allowed to be accomplished indirectly.
Thus, the following acts have been held
unfair labor practices: (1) the dismissal of
a laborer in account of union activities of
his brother; (2) the discharge of an
employee due to the union activities of
the wife; and (3) the discharge of a wife
due to the union activities of the
husband.
9.7 Test of Discrimination
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For the purpose of determining whether
or not a discharge is discriminatory, it is
necessary that the underlying reason for
the discharge be established. The fact
that a lawful cause for discharge is
available is not a defense where the
employee is actually discharged because
of his union activities. If the discharge is
actually motivated by a lawful reason, the
fact that the employee is engaged in
union activities at the time will not lie
against the employer and prevent him
from the exercise of his business
judgment to discharge an employee for
cause.
Where circumstances establish a
discriminatory motive on the part of the
employer, the assignment of a just cause
will be unavailing. If it can be established
that the true and basic inspiration for the
employer’s act is derived from the
employees’ union affiliations or activities,
the assignment by the employer of
another reason, whatever its semblance
of validity, is unavailing.
An interference that the discharge of an
employee was motivated by his union
activity must be based upon evidence,
direct or circumstantial, not upon mere
suspicion.
9.8 Constructive Discharge
Where the employer prohibits employees
from exercising their rights under the Act,
on pain of discharge, and the employee
quits as a result of the prohibition, a
constructive discharge occurs, which may
be remedies in an unfair labor practice
proceeding.
9.9 Discharge Due to Union Activity, A
Question of Fact
The question of whether an employee was
discharged because of his union activities is
essentially a question of fact as to which the
findings of the Court of Industrial Relations
are conclusive and binding if supported by
substantial evidence considering the record as

a whole. This is so because the Industrial
Court is governed by the rule of substantial
evidence, rather than by the rule of
preponderance of evidence as in any ordinary
civil cases. Substantial evidence has been
defined as such relevant evidence as a
reasonable mind might accept as adequate to
support a conclusion. It means such evidence
which affords a substantial basis from which
the fact in issue can be reasonably inferred.
9.10 Valid Discrimination: Union Security
Clause
There is a form of encouragement of
union membership which is not
considered ULP. This is where
Management and Union enter into a
collective bargaining agreement
containing a union security clause.
Despite variations and limitations, a union
security clause essentially requires
membership in the union so that an
employee may retain his job and the
union’s existence is assured.
“Union security” is a generic term which
is applied to and comprehends “closed
shop,” “union shop,” “maintenance of
membership” or any other form of
agreement which imposes upon
employees the obligation to acquire or
retain union membership as a condition
affecting employment. It is indeed
compulsory union membership whose
objective is to assure continued existence
of the union. In a sense, there is
discrimination when certain employees
are obliged to join a particular union. But
it is discrimination favouring unionism; it
is a valid kind of “discrimination.”
The employer is not guilty of unfair labor
practice if it merely complies in good faith
with the request of the certified union for
the dismissal of employees expelled from
the union pursuant to the union security
clause in the collective bargaining
agreement.
9.10a Kinds of Union Security Agreements
Closed-shop: Only union members can be
hired by the company and they must
LABOR RELATIONS: Azucena Vol. II
remain as union members to retain
employment in the company.
Union Shop: Nonmembers may be hired,
but to retain employment must become
union members after a certain period.
The requirement applies to present and
future employees.
Modified Union Shop: Employees who are
not union members at the time of signing
the contract need not join the union, but
all workers hired thereafter must join.
Maintenance of Membership Shop: No
employee is compelled to join the union,
but all present or future members must,
as a condition of employment, remain in
good standing in the union.
Exclusive Bargaining Shop: The union is
recognized as the exclusive bargaining
agent for all employees in the bargaining
unit, whether union members or not.
Bargaining for Members Only: The union
is recognized as the bargaining agent
only for its own members
Agency Shop: An agreement whereby
employees must either join the union or
pay the union as exclusive bargaining
agent a sum equal to that paid by the
members. This is directed against “free
rider” employees who benefits from union
activities without contributing financially
to union support. It prevents situation
where non-union members enrich
themselves at the expense of union
members. Another term for agency shop
agreement is “maintenance of treasury
shop.”
The above variations are opposite of open
shop, an arrangement which does not
require union membership as a condition
of employment.
9.10b Validity of Closed-Shop Agreement
It is true that disaffiliation from a labor union
is not open to legal objection. It is implicit in
the freedom of association ordained by the

Constitution. But this Court has laid down the
ruling that a closed shop is a valid form of
union security, and such provision in a
collective bargaining agreement is not a
restriction of the right of freedom of
association guaranteed by the Constitution.
It is the policy of the State to promote
unionism to enable the workers to negotiate
with management on the same level and with
more persuasiveness than if they were to
individually and independently bargain for the
improvement of their respective conditions. To
this end, the Constitution guarantees to them
the rights "to self-organization, collective
bargaining and negotiations and peaceful
concerted actions including the right to strike
in accordance with law." There is no question
that these purposes could be thwarted if
every worker were to choose to go his own
separate way instead of joining his co-
employees in planning collective action and
presenting a united front when they sit down
to bargain with their employers. It is for this
reason that the law has sanctioned
stipulations for the union shop and the closed
shop as a means of encouraging the workers
to join and support the labor union of their
own choice as their representative in the
negotiation of their demands and the
protection of their interest vis-a-vis the
employer.
A 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. It is "the most
prized achievement of unionism." It adds
membership and compulsory dues. By holding
out to loyal members a promise of
employment in the closed-shop, it welds
group solidarity. It is a very effective form of
union security agreement.
9.10c Advantages and Disadvantages of
Closed-Shop Agreement
A closed-shop agreement is
advantageous because it—
a. Increases the strength and bargaining
power of labor organizations.
b. Prevents non-union workers from
sharing in the benefits of the union’s
LABOR RELATIONS: Azucena Vol. II
activities without also sharing its
obligations.
c. Prevents the weakening of labor
organizations by discrimination against
union members.
d. Eliminates the lowering of standards
caused by competition with non-union
workers.
e. Enables labor organizations effectively
to enforce collective agreements.
f. Facilitates the collection of dues and the
enforcement of union rules.
g. Creates harmonious relations between
the employer and employee.
But it is disadvantageous as it—
a. Results in monopolistic domination of
employment by labor organizations.
b. Interferes with the freedom of contract
and personal liberty of the individual
worker.
c. Compels employers to discharge all
non-union workers regardless of
efficiency, length of service, etc.
d. Facilitates the use of labor
organizations by unscrupulous union
leaders for the purpose of extortion,
restraint of trade, etc.
e. Denies to non-union workers equal
opportunity for employment.
f. Enables union to charge exorbitant dues
and initiation fees.
9.10d Valid Dismissal Because of
Application of Union Security Clause
Union security clauses in collective bargaining
agreements, if freely and voluntarily entered
into, are valid and binding. Corollary,
dismissals pursuant to union security clauses
are valid and legal subject only to the
requirement of due process, that is, notice

and hearing prior to dismissal. Thus, the
dismissal of an employee by the company
pursuant to a labor union's demand in
accordance with a union security agreement
does not constitute unfair labor practice.
Even if the union members were unaware of
the closed-shop stipulation in the CBA, they
were bound by it. Neither their ignorance of,
nor their dissatisfaction with its terms and
conditions would justify breach thereof or the
formation by them of a union of their own.
This is so because a union member who is
employed under an agreement between the
union and his employer is bound by the
provisions thereof, since it is a joint and
several contract of the members of the union
entered into by the union as their agent.
This provision is an indirect restriction on the
right of an employee to self-organization. It is
a solemn pronouncement of a policy that
while an employee is given the right to join a
labor organization, such right should only be
asserted in a manner that will not spell the
destruction of the same organization The law
requires loyalty to the union on the part of its
members in order to obtain to the full extent
its cohesion and integrity.
9.10e Dismissal Pursuant to Closed-Shop
Clause Must Clearly Appear in Contract
In order to validly dismiss an employee by
force of the union security clause, there
should be a clear and unequivocal
statement that the loss of the status of a
member of good standing in the union
shall be a cause for dismissal.
Union shop, as with closed-shop
provisions, should be strictly construed
against the existence of union shop.
Sometimes harsh and onerous, such
provisions should not be extended
beyond the explicit coverage of their
terms, and will not be deemed to
authorize by implication any dismissal of
employees already working before the
agreement was made.
9.10f Due Process Required in Enforcing
Union Security Clause; Intra-union Matter
becomes Termination Dispute with
Employer
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Although a union security clause in a CBA
may be validly enforced and that
dismissal pursuant thereto may likewise
be valid, this does not erode the
fundamental requirement of due process.
The reason behind the enforcement of
union security clauses which is the
sanctity and inviolability of contracts
cannot override one's right to due
process.
9.10g Liability of Union to Pay Wages and
Fringe Benefits of Illegally Dismissed
Employee
9.10h Employer in Good Faith Not Liable
9.10i Closed-Shop, To Whom Not
Applicable
All employees in the bargaining unit
covered by a closed-shop agreement are
subject to its terms, except the following:
(1) any employee who at the time the
closed-shop agreement takes effect is a
bona fide member of religious
organization which prohibits its members
from joining labor unions on religious
grounds; (2) employees already in the
service and already members of a labor
union or unions other than the majority
union at the time the closed-shop
agreement took effect; (3) Confidential
employees who are excluded from the
rank-and-file bargaining unit; and (4)
employees excluded from the closed-shop
by express terms of the agreement.
It is well settled in this jurisdiction that, in the
absence of a manifest intent to the contrary,
"closed shop" provisions in a collective
bargaining agreement "apply only to persons
to be hired or to employees who are not yet
members of any labor organization" and that
said provisions of the agreement are not
applicable to those already in the service at
the time of its execution. To hold that the
employees in a company who are members of
a minority union may be compelled to
disaffiliate from their union and join the
majority or contracting union, would render
nugatory the right of all employees to self
organization and to form, join or assist labor

organizations of their own choosing, a right
guaranteed by the Industrial Peace Act (sec.
3, Rep. Act No. 875) as well as by the
Constitution (Art. III, sec. 1[6]).
9.10j Agency Fee Instead of Union
Membership
The employees who are benefitting from
the CBA, without being members of the
bargaining union, may be required to pay
an agency fee. The collection of agency
fees in an amount equivalent to union
dues and fees, from employees who are
not union members, is recognized by
Article 248 (e) of the Labor Code. A
written authorization from the non-union
employee is imposed. The employee's
acceptance of benefits resulting from a
collective bargaining agreement justifies
the deduction of agency fees from his pay
and the union's entitlement thereto. In
this aspect, the legal basis of the union's
right to agency fees is neither contractual
nor statutory, but quasi-contractual,
deriving from the established principle
that non-union employees may not
unjustly enrich themselves by benefiting
from employment conditions negotiated
by the bargaining union.
The justification of collecting agency fee
is the union’s accomplishment in having
negotiated a CBA in behalf of the
employees. The union served as agent of
the employees, and the agency fee is
recognition of the agent’s efforts. The fee
is collectible only from employees
deriving economic benefits from the
union-negotiated CBA.
10. SIXTH U.L.P.: DISCRIMINATION
BECAUSE OF TESTIMONY (ART.
248[f])
The law protects not only the employees’
right to form, join, or assist labor
organizations but also their right to testify
on matters covered by the Code. If this
right is not protected, the right to self-
organization will be indirectly defeated
because the employees will fear their
employer’s reprisal. By protecting the
LABOR RELATIONS: Azucena Vol. II
employee’s right to testify, the law
therefore shields the workers’ right to
self-organization from indirect assault by
the employer. Thus, it is ULP “to dismiss,
discharge, or otherwise prejudice or
discriminate against an employee for
having given or being about to give
testimony under this Code.
Employer’s reprisal against a testifying
employee is ULP because, furthermore, it
violates the right to engage in concerted
activity, a right included in the right to
self-organize (Art. 246) and reiterated in
Article 263(b). Concerted activity does
not always require a number of people
acting in unison. An employee acting
alone in pursuing a group interest may be
said to be doing a concerted activity
which the employer may not curtail.
10.1 Refusal to Testify
Clearly, the efforts to justify petitioner's
dismissal — on top of the private respondent's
scheme of inducing his employees to sign an
affidavit absolving him from possible
violations of the Labor Code — taints with
evident bad faith and deliberate malice
petitioner's summary termination from
employment. The pivotal question in any case
where unfair labor practice on the part of the
employer is alleged is whether or not the
employer has exerted pressure, in the form of
restraint, interference or coercion, against his
employee's right to institute concerted action
for better terms and conditions of
employment. Without doubt, the act of
compelling employees to sign an instrument
indicating that the employer observed labor
standards provisions of law when he might
have not, together with the act of terminating
or coercing those who refuse to cooperate
with the employer's scheme constitutes unfair
labor practice. The first act clearly preempts
the right of the hotel's workers to seek better
terms and conditions of employment through
concerted action.
10.2 Labor Standards Violation May Lead
to a Srike
Art. 118. Retaliatory measures. It shall be
unlawful for an employer to refuse to pay
or reduce the wages and benefits,

discharge or in any manner discriminate
against any employee who has filed any
complaint or instituted any proceeding
under this Title or has testified or is about
to testify in such proceedings.
And yet, Articles 118 and 248 are related.
They both speak of employee’s filing a
complaint or giving testimony. But the
subject of complaint or testimony under
Article 118 is limited to matters about
wages, the subject of Title I of Book III.
Under Article 248, on the other hand, the
subject testified to is any issue covered
by the Code. Both articles likewise speak
of retaliation by the employer. Retaliation
is wrong, and more than that, Article 248
considers it an unfair labor practice
which, under Art. 263, is a legal reason
for employees to hold a strike.
11. SEVENTH U.L.P.: VIOLATION OF
THE DUTY TO BARGAIN (ART. 248[g])
The seventh ULP act under Art. 248 refers
to violating the duty to bargain. See
Articles 252 and 253
12. EIGHT U.L.P.: PAID NEGOTIATION
(ART. 248[h])
Self-organization and collective
bargaining are treasured rights of
workers. The law zealously shields them
from corruption. It is a punishable act of
ULP for the employer to pay the union or
any of its officers or agents any
negotiation fee or attorney’s fee as part
of settlement in collective bargaining or
any labor dispute. To do so is not
unlawful. It is ethically reprehensible.
13. NINTH U.L.P.: VIOLATION OF THE
CBA (ART. 248[i])
After a CBA is concluded, its
implementation follows. Implementation
is still part of the bargaining process
which, it should be recalled, rests on the
parties’ “duty to bargain.” The duty to
bargain, it should also be recalled,
requires good faith. And good faith
implies faithful observance of what has
LABOR RELATIONS: Azucena Vol. II
been agreed upon. It logically follows that
noncompliance with the agreement is
non-observance of good faith in
bargaining; therefore, the noncompliance
amounts to ULP.
But such violation, to constitute ULP,
must be “gross,” according to Art. 261.
14. RELIEF IN U.L.P. CASES
14.1 Cease and Desist Order
To support a cease and desist order, the
record must show that the restrained
misconduct was an issue in the case; that
there was a finding of fact of said
misconduct and such finding of fact was
supported by evidence. The Court is not
authorized to issue blank cease and
desist orders, but must confine its
injunction orders to specific act or acts
which are related to past misconduct. A
cease and desist order is not invalidated
because the act complained of was
voluntarily discontinued prior to or during
the course of the proceedings. But if the
act complained of happened so long a
time that there is no longer any threat or
probability of a recurrence, a cease and
desist order will not be justified.
14.2 Affirmative Order
The Court does not only have the power
to issue negative or prohibitive orders but
also affirmative or positive orders.
The order may usually direct the full
reinstatement of the discharged
employees to their substantially
equivalent position without prejudice to
their seniority and other rights and
privileges.
14.3 Order to Bargain; Mandated CBA
Likewise, when an employer has failed or
refused to bargain with the proper
bargaining agent of his employees, the
Court may, in addition to the usual cease
and desist orders, issue an affirmative

order to compel the respondent to
“bargain” with the bargaining agent.
14.4 Disestablishment
Where the employer had initiated,
dominated or assisted in or interfered
with the formation or establishment of
any labor organization or contributed
financial or other support to it, the Court
may issue, in addition to a cease and
desist order, an order directing the
employer to withdraw all recognition from
the dominated labor union and to
disestablish the same.
15. U.L.P. NOT SUBJECT TO
COMPROMISE
Unfair labor practice cases are not, in
view of the public interest involved,
subject to compromises. The relation
between capital and labor are not merely
contractual. They are so impressed with
the public interest that labor contracts
must yield to the common good.
16. U.L.P. IN A GIVEN PERIOD
SHOULD BE INCLUDED IN SINGLE
CHARGE
When a labor union accuses an employer
of acts of unfair labor practice allegedly
committed during a given period of time,
the charges should include all acts of
unfair labor practice committed against
any and all members of the Union during
that period. The Union should not, upon
the dismissal of the charges first
preferred, be allowed to split its cause of
action and harass the employer with
subsequent charges. based upon acts
committed during the same period of
time.
17. EMPLOYER’S RESPONSIBILITY
FOR U.L.P. ACTS BY SUBORDINATE
OFFICIALS
Knowledge by the employer of the
employee’s improper acts: Where it was
established that the employer was aware
of the employee’s wrongdoing, his failure
LABOR RELATIONS: Azucena Vol. II
to prevent continuation of the course of
conduct or his failure to renounce any
connection or affinity therewith, invited
the imputation of fault and responsibility
to the employer.
Continuity of improper conduct by
employee: A single utterance by a
supervisory employee, whether
improvident or deliberate on the
employee’s part, was not ordinarily and n
absence of proof of actual authority held
to be sufficient to convict an employer of
an unfair labor practice; however,
continued, repeated or widespread
activities by such supervisory employee
in affront of the rights of the body of
employees was deemed ample
justification for ascribing knowledge and
blame to the employer.
Employer’s past policy and attitude: It has
been held that, among other things, the
similarity between the past attitude or
policy of the employer and that of the
offending supervisory employee might, in
certain cases, be indicative of a concert
of effort between the two.
________
Chapter III
UNFAIR LABOR PRACTICES OF LABOR
ORGANIZATIONS
Article 249. Unfair labor practices of labor
organizations. - It shall be unfair labor
practice for a labor organization, its
officers, agents or representatives:
(a) To restrain or coerce employees in the
exercise of their right to self-organization.
However, a labor organization shall have
the right to prescribe its own rules with
respect to the acquisition or retention of
membership;
(b) To cause or attempt to cause an
employer to discriminate against an
employee, including discrimination
against an employee with respect to
whom membership in such organization
has been denied or to terminate an
employee on any ground other than the

usual terms and conditions under which
membership or continuation of
membership is made available to other
members;
(c) To violate the duty, or refuse to
bargain collectively with the employer,
provided it is the representative of the
employees;
(d) To cause or attempt to cause an
employer to pay or deliver or agree to
pay or deliver any money or other things
of value, in the nature of an exaction, for
services which are not performed or not
to be performed, including the demand
for fee for union negotiations;
(e) To ask for or accept negotiation or
attorney’s fees from employers as part of
the settlement of any issue in collective
bargaining or any other dispute; or
(f) To violate a collective bargaining
agreement.
The provisions of the preceding
paragraph notwithstanding, only the
officers, members of governing boards,
representatives or agents or members of
labor associations or organizations who
have actually participated in, authorized
or ratified unfair labor practices shall be
held criminally liable. (As amended by
Batas Pambansa Bilang 130, August 21,
1981).
________
1. RESTRAINT OR COERCION BY
LABOR ORGANIZATION;
INTERFERENCE BY UNION IS NOT ULP
A labor organization commits ULP when it
restrains or coerces employees in their
right to self-organization. This provision of
Art. 249(a) parallels with Art. 248(a). But
“interference” is left out. This deliberate
omission is “the equivalent of license of
labor organization to engage in those
practices which, at the hands of an
employer, would constitute actionable
unfair labor practices by way of
“interference.” In other words, a labor
LABOR RELATIONS: Azucena Vol. II
organization may interfere in the
employees’ right to self-organization as
long as the interference does not amount
to restraint or coercion.
Interference by a labor organization is not
ULP because interfering in the exercise of
the right to organize is itself a function of
self-organizing.
1.1 Coercing Participation in Strike
The provision is violated by a union’s
restraining or coercing an employee in
the exercise of his right to refuse to
participate in or recognize a strike.
Similarly, violation is committed when a
union threatens employees with bodily
harm in order to force them to strike.
2. UNION-INDUCED DISCRIMINATION
The law forbids as ULP union attempts to
cause an employer to grant advantages
for union members over non-members,
for union members in good standing over
suspended or expelled members, for
union members over permit holders, for
members of the union executive board
over more senior employees, for
members of one union over members of
another union, or for members of one
local over members of another local.
The forbidden discrimination may refer to
terms of hiring or firing, in layoff, in
seniority, or in benefits.
2.1 Arbitrary Use of Union Security Clause
The broad rule is that the union has the
right to determine its membership and to
prescribe the conditions for the
acquisition and retention thereof.
Consequently, admission to membership
may not be compelled. This rule,
however, is qualified in the case of labor
unions holding a monopoly in the supply
of labor, either in a given locality, or as
regards a particular employer by reason
of a closed-shop or similar agreements. In
such case, qualified applicants may not
be arbitrarily excluded from membership

and their admission may not be barred by
unreasonable rules.
It is well settled that labor unions are not
entitled to arbitrarily exclude qualified
applicants for membership, and a closed-shop
provision would not justify the employer in
discharging, or a union in insisting upon the
discharge of, an employee whom the union
thus refuses to admit to membership, without
any reasonable ground therefor.4 Needless to
say, if said unions may be compelled to admit
new members, who have the requisite
qualifications, with more reason may the law
and the courts exercise the coercive power
when the employee involved is a long
standing union member, who, owing to
provocations of union officers, was impelled to
tender his resignation, which he forthwith
withdrew or revoked. Surely, he may, at least,
invoke the rights of those who seek admission
for the first time, and cannot arbitrarily he
denied readmission.
The Court stresses, however, that union
security clauses are also governed by law and
by principles of justice, fair play, and legality.
Union security clauses cannot be used by
union officials against an employer, much less
their own members, except with a high sense
of responsibility, fairness, prudence, and
judiciousness.
A union member may not be expelled from
her union, and consequently from her job, for
personal or impetuous reasons or for causes
foreign to the closed-shop agreement and in a
manner characterized by arbitrariness and
whimsicality.
2.2 Not Disloyalty to Ask Help from
Another Union
3. REFUSAL TO BARGAIN
ULP under Art. 249(c) is intended to
insure that unions approach the
bargaining table with the same attitude of
willingness to agree as the Act requires of
management.
A union violates its duty to bargain
collectively by entering negotiations with
a fixed purpose of not reaching an
agreement or signing a contract.
LABOR RELATIONS: Azucena Vol. II
4. FEATHERBEDDING AND MAKE-
WORK ARRANGEMENTS
Art. 249(d) refers to featherbedding.
“Featherbedding” is the name given to
employee practices which create or
spread employment by “unnecessarily”
maintaining or increasing the number of
employees used, or the amount of time
consumed, to work on a particular job.
In spite of employee assertions that these
so-called featherbedding practices are
directly related to job security, health and
safety, most courts at common law found
these practices to be economically
wasteful and without any legitimate
employee justification.
________
Title VII
COLLECTIVE BARGAINING AND
ADMINISTRATION OF AGREEMENTS
ART. 250. Procedure in collective
bargaining. - The following procedures
shall be observed in collective bargaining:
(a) When a party desires to negotiate an
agreement, it shall serve a written notice
upon the other party with a statement of
its proposals. The other party shall make
a reply thereto not later than ten (10)
calendar days from receipt of such notice;
(b) Should differences arise on the basis
of such notice and reply, either party may
request for a conference which shall
begin not later than ten (10) calendar
days from the date of request.
(c) If the dispute is not settled, the Board
shall intervene upon request of either or
both parties or at its own initiative and
immediately call the parties to
conciliation meetings. The Board shall
have the power to issue subpoenas
requiring the attendance of the parties to
such meetings. It shall be the duty of the
parties to participate fully and promptly in
the conciliation meetings the Board may
call;

(d) During the conciliation proceedings in
the Board, the parties are prohibited from
doing any act which may disrupt or
impede the early settlement of the
disputes; and
(e) The Board shall exert all efforts to
settle disputes amicably and encourage
the parties to submit their case to a
voluntary arbitrator. (As amended by
Section 20, Republic Act No. 6715, March
21, 1989).
________
Article 251. Duty to bargain collectively in
the absence of collective bargaining
agreements. – In the absence of an
agreement or other voluntary
arrangement providing for a more
expeditious manner of collective
bargaining, it shall be the duty of
employer and the representatives of the
employees to bargain collectively in
accordance with the provisions of this
Code.
________
1. NATURE OF COLLECTIVE
BARGAINING
1.1 Definition
Collective bargaining or negotiations
towards a collective agreement is a
democratic framework 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.
Collective bargaining includes four related
but distinguishable processes:
(1) negotiation between representatives
of the management and the union over
“wages, hours, and other terms of
employment;”
(2) the execution of a written contract
embodying the terms agreed upon;
LABOR RELATIONS: Azucena Vol. II
(3) negotiation of any question arising as
to the interpretation or application of the
contract; and
(4) negotiation over the terms of a new
contract or proposed modifications, when
an existing agreement is validly opened
for negotiations.
Collective bargaining is a system made
up of a set of continuous processes; it is
customary and helpful to distinguish
negotiation of contracts (the “legislative”
phase of the union-employer
relationship), administration of contracts
(the “executive phase), and interpretation
or application of contracts (the “judicial”
phase).
In common usage as well as in legal
terminology, collective bargaining
denotes negotiations looking forward to a
collective agreement. However, it does
not end with the execution of an
agreement. It is a continuous process. It
requires both parties, the employer and
duly authorized representatives of
employees, to deal with each other with
open and fair minds and sincerely
endeavor to fight the obstacles in the
process to stabilize employer-employee
relationship.
1.1a CBA Defined
A collective bargaining agreement (CBA),
as used in Article 252 of the Labor Code,
refers to a contract executed upon
request of either the employer or the
exclusive bargaining representative
incorporating the agreement reached
after negotiations with respect to wages,
hours of work and all other terms and
conditions of employment, including
proposals for adjusting any grievances or
questions arising under such agreement.
While the terms and conditions of a CBA
constitute the law between the parties, it is
not, however, an ordinary contract to which is
applied the principles of law governing
ordinary contracts. A CBA, as a labor contract
within the contemplation of Article 1700 of

the Civil Code of the Philippines which
governs the relations between labor and
capital, is not merely contractual in nature but
impressed with public interest, thus, it must
yield to the common good. As such, it must be
construed liberally rather than narrowly and
technically, and the courts must place a
practical and realistic construction upon it,
giving due consideration to the context in
which it is negotiated and purpose which it is
intended to serve.
A CBA is more than a contract; it is a
generalized code to govern a myriad of
cases which the draftsmen wholly
anticipate. It covers the whole
employment relationship and prescribes
the rights and duties of the parties.
1.2 Rationale
By “collective bargaining” the employee
shares through his chosen
representatives in fixing the conditions
under which he works, and a rule of law is
substituted for absolute authority.
1.3 Strength of the Collective Bargaining
Method
Collective bargaining is also a means of
ensuring worker’s participation in
decision-making. The notion that workers
are entitled to participate in setting the
terms under which they are to work is
inherent in collective bargaining; even the
most rudimentary form of collective
bargaining involves a transfer of certain
issues, be it only wages, from the area of
unilateral to the area of bilateral decision-
making.
It provides an opportunity for the
exchange of information tending to
enhance the understanding of the parties
for each other problems and objectives,
both where they differ and where they are
identical.
Moreover—and this is very important—it
provides an orderly procedure by which
each side can seek to present to the other
the best possible case for the satisfaction
of its particular demands.
LABOR RELATIONS: Azucena Vol. II
It elicits the consent of those who will
have to live under the terms of any
agreement derived from the bargaining
process. Stability is an important element
in employment, and “consent assures
stability because parties who have
accepted an agreement will live by its
terms.”
2. EMERGENCE OF COLLECTIVE
BARGAINING
First in Great Britain, but not much later in
other countries, working men sought to
protect themselves against the harsh
effects of new machines, new methods of
production, new divisions of labor and
new intensities of competition by forming
organizations capable of representing
their interests as a group vis-à-vis
employees and the State.
2.1 Originator
The credit for coining the expression
belongs to Beatrice Webb, who first used
it in 1891 in her study on “The
Cooperative Movement in Great Britain.”
In non-English speaking countries,
particularly on the European continent,
where the process of collective bargaining
has an equally long history, the emphasis
was placed on the term “collective
agreement” because during the early
period the workers aimed not so much at
establishing the procedure of bargaining
itself as at having such agreements
recognized and enforced as legally
binding contracts.
2.2 Adoption in the Philippines
In the Philippines the idea of collective
bargaining first gained formal and official
recognition through Commonwealth Act
No. 213, approved by President Manuel L.
Quezon on November 21, 1936.
But it is the Industrial Peace Act (RA No.
875, approved by President Elpidio
Quirino on June 17, 1953), that defined

collective bargaining and outlined its
procedure.
3. PARTIES TO COLLECTIVE
BARGAINING
The duty to bargain collectively arises
only between the “employer” and its
“employees”. Where neither party is an
“employer” nor an "employee" of the
other, no such duty would exist. Needless
to add, where there is no duty to bargain
collectively the refusal to bargain violates
no right.
The parties, then, to collective bargaining
as traditionally understood, are the
employer and the employees represented
by their labor union.
Article. 212. (j) "Bargaining representative"
means a legitimate labor organization
whether or not employed by the employer.
The bargaining representative of the
employees is an entity—the union—and
not the officers of the union.
4. JURISDICTIONAL PRECONDITIONS
OF COLLECTIVE BARGAINING
While it is a mutual obligation of the
parties to bargain, the employer,
however, is not under any legal duty to
initiate contract negotiation. The
mechanics of collective bargaining is set
in motion only when the following
jurisdictional preconditions are present,
namely:
(1) possession of the status of majority
representation of the employees'
representative in accordance with any of
the means of selection or designation
provided for by the Labor Code;
(2) proof of majority representation; and
(3) a demand to bargain under Article
251, par. (a) of the New Labor Code.
An employer’s duty to recognize and
bargain collectively with a union as the
collective bargaining representative of his
LABOR RELATIONS: Azucena Vol. II
employees does not arise until after the
union requests the employer to bargain.
Hence, an employer is not in default
respecting the duty to bargain until a
request therefor has been made.
It is essential to the right of a putative
bargaining agent to represent the employees
that it be the delegate of a majority of the
employees and, conversely, an employer is
under duty to bargain collectively only when
the bargaining agent is representative of the
majority of the employees. A natural
consequence of these principles is that the
employer has the right to demand of the
asserted bargaining agent proof of its
representation of its employees. Having the
right to demonstration of this fact, it is not an
'unfair labor practice' for an employer to
refuse to negotiate until the asserted
bargaining agent has presented reasonable
proof of majority representation. It is
necessary however, that such demand be
made in good faith and not merely as a
pretext or device for delay or evasion. The
employer's right is however to reasonable
proof.
4.1 Bargaining with Minority Union, ULP
Where a majority representative has been
designated, it is an unfair labor practice,
[for the employer] as a refusal of
collective bargaining, to deal and
negotiate with the minority
representative.
On the union side, where there exists a
legitimate issue as to which of several
unions is the legitimate representative of
employees, it is ULP for one of the unions
to stage a strike and demand that the
employer sit down with it for collective
bargaining.
5. WHEN BARGAINING SHOULD BEGIN
If the three jurisdictional preconditions
are present, the collective bargaining
should begin within the 12 months
following the determination and
certification of the employees’ exclusive
bargaining representative. This period is
known as the “certification year.”

The employer’s duty to bargain during the
certification year has been held to extend
throughout the entire year. Absent
unusual circumstances, an employer
commits an unfair labor practice by
refusing to bargain with the union during
its certification year, notwithstanding the
repudiation of the union by a majority of
its employees before the expiration of the
one-year period. The rule is the same
whether the union lost its majority as a
result of the employer’s unfair labor
practices or through no fault of the
employer.
A union which has been certified by the
NLRB as a bargaining representative for a
particular unit enjoys an irrefutable
presumption of a majority status for one
year, absent special circumstances.
Following the expiration of the one-year
certification period, there continues to be
a presumption in favor of a union
majority, though the presumption is
rebuttable. Employee turnover does not
constitute “unusual circumstances”
shortening the period.
6. SINGLE ENTERPRISE BARGAINING
PROCEDURE BROADLY DESCRIBED
The law gives primacy to free collective
bargaining (Art. 211) and allows the
parties to devise their bargaining rules
(Art. 251). This is the basic reason the
bargaining procedure is governed
primarily by agreement of the parties.
In the presence of validly agreed
procedure, the Labor Code procedure
applies suppletorily only.
D.O. No. 40-03 supplements the codal
provisions:
Section 3. When single enterprise bargaining
available. - Any voluntarily recognized or
certified labor union may demand
negotiations with its employer for terms and
conditions of work covering employees in the
bargaining unit concerned.
Section 4. Procedure in single enterprise
bargaining - A recognized or certified labor
LABOR RELATIONS: Azucena Vol. II
union that desires to negotiate with its
employer shall submit such intention in
writing to the employer, together with its
proposals for collective bargaining.
The recognized or certified labor union
and its employer may adopt such
procedures and processes they may
deem appropriate and necessary for the
early termination of their negotiations.
They shall name their respective
representatives to the negotiation,
schedule the number and frequency of
meetings, and agree on wages, benefits
and other terms and conditions of work
for all employees covered in the
bargaining unit.
7. MULTI-EMPLOYER BARGAINING
Collective bargaining may take place at
the national, industry, or enterprise level.
The Philippines so far has tried only
enterprise-level, or decentralized
bargaining.
7.1 Rationale of Multi-employer
Bargaining
When a number of employees join forces
for purposes of collective bargaining, the
unit structure is described as a multi-
employer bargaining unit. The structure
may consist of an association
representing employers, or even a whole
industry, or it may be composed of only a
few employers who bargain as a group, or
through an association.
Competitive pressures are the dominant
forces that encourage both unions and
employers to enter into multi-employer or
industry-wide bargaining relationships.
Small employers in highly competitive
and labor-intensive fields may find it
easier to operate with uniformity of labor
cost.
The multi-employer unit is particularly
advantageous to both sides in industries
composed of many small, financially weak
employers.

Multi-employer bargaining provides both
management and unions with significant
cost savings in negotiation of labor
agreements. It is cheaper to negotiate
one master multi-employer agreement
than a number of single-employer
agreements.
There are, however, other considerations
than costs, such as intra-organizational
issues, that the parties take into account
before opting for multi-employer units.
Multi-employer bargaining may not only
overlook the needs of various employee
groups, but also ignore particular
requirements of individual employers.
What may be readily acceptable to one
employer may be considered as
financially disastrous by another.
To arrive at multi-employer agreements is
much more difficult than to arrive at
single-employer contracts. The expanded
size of the unit composed of many
heterogeneous groups leads to intensive
intra-organizational bargaining both on
the union’s and on the employer’s side. At
times, these intra-organizational
pressures may lead to lengthy delays in
negotiations and even to breakdown of
bargaining.
7.2 Multi-employer Bargaining Procedure
(D.O. No. 40-03)
Section 5. When multi-employer bargaining
available. - A legitimate labor union(s) and
employers may agree in writing to come
together for the purpose of collective
bargaining, provided:
(a) only legitimate labor unions who are
incumbent exclusive bargaining agents may
participate and negotiate in multi-employer
bargaining;
(b) only employers with counterpart
legitimate labor unions who are incumbent
bargaining agents may participate and
negotiate in multi-employer bargaining; and
(c) only those legitimate labor unions who
pertain to employer units who consent to
LABOR RELATIONS: Azucena Vol. II
multi-employer bargaining may participate in
multi-employer bargaining.
Section 6. Procedure in multi-employer
bargaining. - Multi-employer bargaining may
be initiated by the labor unions or by the
employers.
(a) Legitimate labor unions who desire to
negotiate with their employers collectively
shall execute a written agreement among
themselves, which shall contain the following:
1) the names of the labor unions who desire
to avail of multi-employer bargaining;
2) each labor union in the employer unit;
3) the fact that each of the labor unions are
the incumbent exclusive bargaining agents for
their respective employer units;
4) the duration of the collective bargaining
agreements, if any, entered into by each labor
union with their respective employers.
Legitimate labor unions who are members of
the same registered federation, national, or
industry union are exempt from execution of
this written agreement.
(b) The legitimate labor unions who desire to
bargain with multi-employers shall send a
written notice to this effect to each employer
concerned. The written agreement stated in
the preceding paragraph, or the certificates of
registration of the federation, national, or
industry union, shall accompany said notice.
Employers who agree to group themselves or
use their existing associations to engage in
multiemployer bargaining shall send a written
notice to each of their counterpart legitimate
labor unions
indicating their desire to engage in multi-
employer bargaining. Said notice shall
indicate the following:
1) the names of the employers who desire to
avail of multi-employer bargaining;
2) their corresponding legitimate labor
organizations;
3) the fact that each corresponding legitimate
union is any incumbent exclusive bargaining
agent;

4) the duration of the current collective
bargaining agreement, if any, entered into by
each employer with the counterpart
legitimate labor union.
(c) Each employer or concerned labor union
shall express its willingness or refusal to
participate in multi-employer bargaining in
writing, addressed to its corresponding
exclusive bargaining agent or employer.
Negotiations may commence only with regard
to respective employers and labor unions who
consent to participate in multi-employer
bargaining;
(d) During the course of negotiations,
consenting employers and the corresponding
legitimate labor unions shall discuss and
agree on the following:
1) the manner by which negotiations shall
proceed;
2) the scope and coverage of the negotiations
and the agreement; and
3) where appropriate, the effect of the
negotiations on current agreements or
conditions of employment among the parties.
Section 7. Posting and registration of
collective bargaining agreement. - Two (2)
signed copies of collective bargaining
agreement reached through multi-employer
bargaining shall be posted for at least five ( 5)
days in two conspicuous areas in each
workplace of the employer units concerned.
Said collective bargaining agreement shall
affect only those employees in the bargaining
units who have ratified it.
The same collective bargaining agreement
shall be registered with the Department in
accordance with the following Rule.
7.4 Optional
Under D.O. No. 40-03 multi-employer
bargaining is purely optional for
employers and unions.
Unlike other bargaining units, the multi-
employer unit is based primarily on the
consent of the firms involved.
________
LABOR RELATIONS: Azucena Vol. II
Article 252. Meaning of duty to bargain
collectively. – The duty to bargain
collectively means the performance of a
mutual obligation 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 grievances or questions
arising under such agreement and
executing a contract incorporating such
agreements if requested by either party
but such duty does not compel any party
to agree to a proposal or to make any
concession.
________
Article 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.
________
1. DUTY TO BARGAIN DEFINED
The law contemplates and defines two
situations when the duty to bargain
exists: Situation one, when there is yet no
collective bargaining agreement (Art.
252), and Situation two, where a CBA
exists (Art. 253).
For Situation One, the duty to bargain
means in essence the mutual obligation
of the employer and the employees’
majority union to meet and convene.
The purposes of the meeting and
convening are:

(1) to negotiate an agreement on the
subjects of:
(a) wages, (b) hours of work, and (c) all
other terms and conditions of
employment including proposals for
adjusting grievances or questions arising
under such agreement; and
(2) to execute a contract incorporating
such agreement if requested by either
party.
The kind of compliance required is
prompt, expeditious, and in good faith.
The limitations or reservations of the duty
are that it does not compel any party to
agree to a proposal or to make a
concession.
For Situation Two, the duty to bargain
means all of the above and, additionally,
the obligation not to terminate or modify
the CBA during its lifetime. But 60 days
before the CBA expires, either party may
notify the other in writing that it desires
to terminate or modify the agreement.
During the 60-day period and until a new
agreement is reached, the CBA remains in
full force and effect; the parties are duty-
bound to keep the status quo. The law
therefore provides for automatic renewal
or extension of the CBA. This 60-day
period under Art. 253 refers to submission
of proposals to renegotiate the
nonrepresentational provisions of the
CBA. It does not always coincide with the
60-day period mentioned in Articles 253-A
and 256 pertaining to “freedom period” to
resolve representation contest between
unions
1.1 Four Forms of ULP in Bargaining
(1) failure to meet and convene; (2)
evading the mandatory subjects of
bargaining; (3) bad faith in bargaining,
including failure or refusal to execute the
collective agreement, if requested; and
(4) gross violation of the CBA.
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2. FIRST U.L.P. IN BARGAINING:
FAILURE OR REFUSAL TO MEET AND
CONVENE
An employer is guilty of an unfair labor
practice in refusing to bargain with the
representative of a majority of his
employees. To bargain in good faith, an
employer must not only meet and confer
with the union which represents his
employees, but also must recognize the
union for the purpose of collective
bargaining. In addition, he must recognize
the union as the bargaining
representative of all the employees in the
appropriate bargaining unit, even if they
are not all members of the union.
The duty to bargain extends beyond the
period of contract negotiations, and
applies to labor-management relations
during the term of the agreement. Since a
collective bargaining agreement does not
define all the rights and obligations of the
employer and his employees, negotiation
of grievances is part and parcel of the
bargaining process.
The failure of refusal of an employer to
bargain collectively with his employees
constitutes an enjoinable unfair labor
practice not only under the subdivision of
the Act dealing expressly with “collective
bargaining,” but also under the
subsection making it an “unfair labor
practice” to: “interfere with, restrain or
coerce employees in the exercise” of their
guaranteed rights, on the theory that
refusal by an employer to bargain
collectively with his employees
constitutes “interference” with the latter’s
right of self-organization.
2.1 Unresolved Petition for Union
Cancellation
2.2 Selling the Company
If an employer is guilty of unfair labor
practice when he directly discharges his
employees to forestall a demand for
collective bargaining, he certainly should
not be allowed to evade responsibility if

he indirectly causes that discharge by
selling to a company that he knows is
unwilling to accept his employees.
The basic rule is that if the transfer of
assets and employees from one employer
to another leaves intact the identity of
the employing enterprise, the transferor’s
duty to recognize and bargain with an
incumbent union devolves upon the
transferee as “successor employer.” That
means that an acquiring employer is a
successor to the bargaining obligations of
his predecessor if there is a continuity in
the business operation. Only a high
degree of enterprise continuity will justify
imposing obligations under a contract
with the union to which the new employer
was not a party.
A mere change in ownership of a business
is insufficient to alter a union’s status as
bargaining representative.
2.3 Successor Employer: Continuity and
Identity
In making the determination as to
whether an employer is successor, the
NLRB looks to the totality of
circumstances to determine whether
there has been a substantial and material
alteration in the employing enterprise. If
there is a substantial and material
alteration in the employing enterprise,
the new employer need not bargain with
the incumbent union.
2.4 Conversion to Independent Franchise
or Operation
A decision to withdraw capital from a
company-operated facility and relinquish
the operating control to an independent
dealership lies very much at the core of
entrepreneurial control, and hence is not
a mandatory subject of bargaining
2.5 Do Economic Exigencies Justify
Refusal to Bargain?
An employer has been held not guilty of a
refusal to bargain by adamantly rejecting
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the union’s economic demands where he
is operating at a loss, on a low profit
margin, or in a depressed industry, as
long as he continues to negotiate.
2.6 Acts not Deemed Refusal to Bargain
The duty to bargain is not violated by:
(1) adoption of an adamant bargaining
position in good faith, particularly when
the company is operating at a loss;
(2) refusal to bargain over demands for
commission of unfair labor practices;
(3) refusal to bargain during period of
illegal strike.
If a union engages in an illegal strike, the
employer has no obligation to bargain
until he is notified that the illegal strike
has been terminated.
Where, pursuant to an honest doubt, the
employer has demanded additional proof
or acquisition of an official certification of
bargaining agency, there is no obligation
or duty on the employer’s part to enter
into negotiations until the demanded
proof is presented pending the
certification proceedings, unless it can be
established that the demand lacks in
good faith and is intended as an
obstruction to negotiations.
Neither is the duty to bargain violated
where:
(1) there is no request for bargaining;
(2) the union seeks recognition for an
inappropriately large unit;
(3) the union seeks to represent some
persons who are excluded from the Act;
(4) the rank-and-file unit includes
supervisors or inappropriate otherwise;
(5) the demand for recognition and
bargaining is made within the year
following a certification election in which

the clear choice was no union and no ad
interim significant change has taken
place in the unit;
(6) the union makes unlawful bargaining
demands.
2.7 Alleged Interference in the Selection
of the Union’s Negotiation Panel
In order to show that the employer committed
ULP under the Labor Code, substantial
evidence is required to support the claim.
Substantial evidence has been defined as
such relevant evidence as a reasonable mind
might accept as adequate to support a
conclusion.
2.8 Non-reply to Proposal; CBA Imposed
on Employer
Collective bargaining, designed to stabilize
the relation between labor and management
and to create a climate of sound and stable
industrial peace. It is a legal obligation, so
much so that Article 248 of the Labor Code
makes it an unfair labor practice 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.
We agree with the pronouncement that it is
not obligatory upon either side of a labor
controversy to precipitately accept or agree to
the proposals of the other. But an erring party
should not be tolerated and allowed with
impunity to resort to schemes feigning
negotiations by going through empty
gestures.
2.8a Repetition in Divine Word University
“A company’s refusal to make counter
proposal if considered in relation to the entire
bargaining process, may indicate bad faith
and this is especially true where the Union’s
request for a counter proposal is left
unanswered.” Moreover, the Court added in
the same case that “it is not obligatory upon
either side of a labor controversy to
precipitately accept or agree to the proposals
of the other. But an erring party should not be
tolerated and allowed with impunity to resort
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to schemes feigning negotiations by going
through empty gestures.”
3. SECOND U.L.P. IN BARGAINING:
EVADING THE MANDATORY SUBJECTS
It is the obligation of the employer and
the employees’ representative to bargain
with each other with respect to “wages,
hours, and other terms and conditions of
employment.” They are statutory or
“mandatory” proposals. An employer’s
refusal to negotiate a mandatory subject
of bargaining is an unfair labor practice
although the employer has every desire
to reach agreement and earnestly and in
all good faith bargains to that end. On the
other hand, an employer’s duty to
bargain is limited to the mandatory
bargaining subjects; as to other matters,
he is free to bargain or not to bargain.
A mere remote, direct, or incidental
impact is insufficient to render a subject a
mandatory subject of bargaining; in order
for a matter to be subject to mandatory
collective bargaining, it must materially
or significantly affect the terms or
conditions of employment.
3.1 Wages and Employment Conditions
The term “wages,” as used in 29 USCS
Sec. 158(d), has been held to include not
only compensation but also other
emoluments of value furnished by the
employer to his employees. Under our
Labor Code, “wage” refers to
remuneration or earnings, however
designated, capable of being expressed in
terms of money, etc.
Since the passage of the Taft-Hartley Act, the
National Labor Relations Board has held that
industrial pensions, group insurance, and
merit increases all are matters about which
employers must bargain collectively.
The following are examples of matters
considered as mandatory subjects of
bargaining:

(1) Wages and other types of
compensation, including merit increases;
(2) Working hours and working days,
including work shifts;
(3) Vacations and holidays;
(4) Bonuses;
(5) Pensions and retirement plans;
(6) Seniority;
(7) Transfer;
(8) Lay-offs;
(9) Employee workloads;
(10) Work rules and regulations;
(11) Rent of company houses;
(12) Union security arrangements.
3.1a Wage Agreement; “Solomonic”
Approach
We take note of the "middle ground" approach
employed by the Secretary in this case which.
we do not necessarily find to be the best
method of resolving a wage dispute. Merely
finding the midway point between the
demands of the company and the union, and
"splitting the difference" is a simplistic
solution that fails to recognize that the parties
may already be at the limits of the wage
levels they can afford. It may lead to the
danger too that neither of the parties will
engage in principled bargaining; the company
may keep its position artificially low while the
union presents an artificially high position, on
the fear that a "Solomonic" solution cannot be
avoided. Thus, rather than encourage
agreement, a "middle ground approach"
instead promotes a "play safe" attitude that
leads to more deadlocks than to successfully
negotiated CBAs.
3.2 Workloads and Work Rules
Employee workloads are a mandatory
subject of bargaining. Employer rules
concerning coffee breaks, lunch periods,
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smoking, employee discipline, and dress
are also mandatory subjects of
bargaining, as are plant safety rules and
general regulations.
Company rules relating to safety and
work practices come within the meaning
of the phrase “other terms and conditions
of employment” as used in the Act and,
therefore, constitute a mandatory subject
of collective bargaining.
3.2a Code of Conduct
Work rules and regulations are commonly
compiled into a booklet usually called
“Code of Discipline” or “Code of
Conduct.” Such dos and don’ts for
employees of the enterprise are work
rules, forming part of terms and
conditions of employment, that are
proper subjects of collective bargaining.
Hardly may the employer contend that
they are “non-negotiable” matters.
3.3 Management Prerogatives Clause
An employer does not commit an unfair
labor practice by insisting, to the point of
a bargaining impasse, on the inclusion in
the contract of a management
prerogatives clause, even though some of
the matters covered by the clause are
“conditions of employment” which are
mandatory subjects of bargaining under
29 USCS Sec. 158(d). Thus, an employer’s
insistence that its decisions regarding
hiring and tenure of employment should
not be reviewable by arbitration is not a
refusal to bargain.
3.4 Union Discipline Clause
An employer may bargain to an impasse
over his proposal that the union eliminate
a piecework ceiling imposed by a union
rule which subjects members to discipline
for exceeding the production quota.
However, an employer’s insistence to the
point of a bargaining impasse on the
union’s withdrawal of fines imposed on
member-employees who crossed a picket
line around the employer’s plant is an

unlawful refusal to bargain, since the right
not to withdraw fines is an internal union
affairs, a matter involving relations
between employees and their unions, and
therefore not a mandatory bargaining
item.
3.5 Arbitration, Strike-Vote, or No-Strike
Clause
An employer may lawfully bargain to an
impasse over his proposal that the
collective bargaining agreement include
an arbitration clause or a no-strike clause
which prohibits the employees from
striking during the life of the agreement.
3.6 No-Lockout Clause; Clause Fixing
Contractual Term
An employer’s statutory duty to bargain
requires him to negotiate over the union’s
proposal that their agreement include a
clause binding him not to lock out the
employees. An employer’s refusal to
bargaining over the duration of the
contract to be entered into is also an
unfair labor practice. But an employer’s
obligation to enter into a collective
bargaining agreement does not require
that the employer enter into an
unalterable obligation for an extended
period of time, and many collective
bargaining agreements contain a clause
permitting termination or modification by
either party upon prescribed notice.
3.7 Signing Bonus
Signing bonus is a grant motivated by
goodwill created when a CBA is
successfully negotiated and signed
between the employer and the union.
Where goodwill does not exist, why ask
for a signing bonus?
In contractual terms, a signing bonus is
justified by and is the consideration paid for
the goodwill that existed in the negotiations
that culminated in the signing of a CBA.
Without the goodwill, the payment of a
signing bonus cannot be justified and any
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order for such payment, to our mind,
constitutes grave abuse of discretion.
In short, if the reason behind a signing
bonus is absent, no signing bonus need
be given.
3.8 No Duty to Agree Even on Mandatory
Subjects
The Act does not compel agreements
between employers and employees, and
neither party is legally obligated to yield
even on a mandatory bargaining subject.
Where the subject of the dispute is a
mandatory bargaining subject, either
party may bargain to an impasse as long
as he bargains in good faith. The duty to
bargain does not obligate a party to make
concessions or yield a position fairly held.
Hence, an employer’s adamant insistence
on a bargaining position is not necessarily
a refusal to bargain in good faith.
Even if the negotiating party thumbs
down the other party’s proposals, there is
no violation of the duty to bargain—
hence, no ULP—as long as the negative
reply can be explained in good faith.
3.9 Non-mandatory Subjects
An employer cannot insist, to the point of
creating a bargaining impasse, on the
inclusion of a provision outside the scope
of the statutory bargaining subjects, even
if he acts in good faith. On the other
hand, it is lawful to insist on the inclusion
of a provision in a collective bargaining
agreement if the provision is within the
scope of a statutory subject of bargaining.
An employer bargains to an impasse over
a non-mandatory bargaining subject
when he refuses to reach any agreement
with the union unless the union
capitulates to him on that subject.
However, it has been held that a
bargaining impasse may be reached over
a non-mandatory bargaining subject
although that subject is not the sole
cause for the parties’ failure to agree.
When a subject under discussion is not
mandatory, it may be discussed if both

parties agree, but a strike or lockout may
not be used to compel a negotiation or
agreement.
While most matters that might be
discussed or proposed in collective
bargaining are likely to bear some
relation, even if tenuous, to “wage, hours,
and other terms and conditions of
employment,” not all proposals that
somehow respond to a problem that is
customarily bargained about may
themselves be insisted upon to impasse.
By once bargaining and agreeing on a
permissive subject of bargaining, the
parties do not make the subject a
mandatory topic of future bargaining.
3.10 Bargaining to the Point of Impasse:
Not necessarily Bad Faith
The adamant insistence on a bargaining
position to the point where the
negotiations reach an impasse does not
establish bad faith. Neither can bad faith
be inferred from a party’s insistence on
the inclusion of a particular substantive
provision unless it concerns trivial
matters or is obviously intolerable.
The question as to what are mandatory and
what are merely permissive subjects of
collective bargaining is of significance on the
right of a party to insist on his position to the
point of stalemate. A party may refuse to
enter into a collective bargaining contract
unless it includes a desired provision as to a
matter which is a mandatory subject of
collective bargaining; but a refusal to contract
unless the agreement covers a matter which
is not a mandatory subject is in substance a
refusal to bargain about matters which are
mandatory subjects of collective bargaining,
and it is no answer to the charge of refusal to
bargain in good faith that the insistence on
the disputed clause was not the sole cause of
the failure to agree or that agreement was not
reached with respect to other disputed
clauses.
Stated in another way, the ruling means
that bargaining to the point of deadlock
may or may not amount to bargaining in
bad faith depending on whether the
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insistence refers to a mandatory or a non-
mandatory subject of bargaining.
The reason is that the duty to bargain
requires meeting and convening on terms
and conditions of employment but does
not require assent to the other party’s
proposals.
Over a non-mandatory subject, on the
other hand, a party may not insist on
bargaining to the point of impasse,
otherwise his insistence can be construed
as bargaining in bad faith. It may be
construed as evasion of the duty to
bargain; such evasion is ULP.
The above rulings do not mean that non-
mandatory subjects cannot be proposed
or that the proponent cannot demand
serious discussion of such proposal. What
the rulings forbid is the posture of making
settlement on a non-mandatory subject a
precondition to the discussion or
settlement of a mandatory subject. If a
non-mandatory subject is proposed and
agreed upon, the agreeing party, by itself,
is binding.
3.11 When Is There Deadlock or Impasse?
A bargaining impasse over an issue exists
where good faith bargaining on the part
of the parties has failed to resolve the
issue and there are no definite plans for
further efforts to break the deadlock.
“Impasse,” within the meaning of the
federal labor laws, presupposes
reasonable effort at good faith bargaining
which, despite noble intentions, does not
conclude in an agreement between the
parties. In the NLRB’s view, whether a
bargaining impasse exists is a matter of
judgment dependent on such factors as
the bargaining history, the parties’ good
faith in negotiations, the length of the
negotiations, the importance of the issue
or issues as to which there is
disagreement, and the contemporaneous
understanding of the parties as to the
state of negotiations.

3.11a Duty to Bargain When There Is
Deadlock or Impasse
Deadlock does not mean the end of
bargaining. It signals rather the need to
continue the bargaining with the
assistance of a third party as conciliator
or arbitrator whose first aim is to get the
parties back to the negotiating table and
help them craft a win-win solution.
3.11b Strike or Lockout in Case
Deadlock
Bargaining may proceed smoothly—and
this is the wish of most negotiation panels
—but it may also be marred by
insinuations, misunderstandings, and
apparently irreconcilable bargaining
positions. Deadlock develops. In fact,
deadlock may occur anytime for various
reasons such as unacceptability of a
proposal or counter proposal,
grandstanding of a negotiator, autocratic
or arrogant stance, or imprecise wording
of a stipulation.
The law (Art. 263) recognizes bargaining
deadlock as a valid reason to declare a
strike or lockout. Strike/ lockout presents
a major deviation from the preferred
smooth route of bargaining. At this point
of bargaining scenario, strike/ lockout is
supposed to be a method of resolving an
impasse, a device to constrain the parties
to end an impasse and go back to the
negotiation table. But strike/ lockout,
while meant to be a solution, frequently
becomes a problem in itself.
Although the union's petition was for
"compulsory arbitration," the subsequent
agreement of petitioner to submit the matter
for arbitration in effect made the arbitration a
voluntary one. The essence of voluntary
arbitration, after all, is that it is by agreement
of the parties, rather than compulsion of law,
that a matter is submitted for arbitration. It
does not matter that the person chosen as
arbitrator is a labor arbiter who, under Art.
217 of the Labor Code, is charged with the
compulsory arbitration of certain labor cases.
There is nothing in the law that prohibits
these labor arbiters from also acting as
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voluntary arbitrators as long as the parties
agree to have him hear and decide their
dispute.
4. THIRD U.L.P. IN BARGAINING: BAD
FAITH
Bargaining deadlock may be precipitated
not only by hard-line positions on
mandatory or non-mandatory subjects. It
may also arise because of lack of good
of faith in bargaining.
Good-faith bargaining demands more
than sterile and repetitive discussion of
formalities precluding actual negotiation,
more than formal replies which constitute
in effect a refusal to treat with the union,
and more than a willingness to enter upon
a sterile discussion of union-management
differences. It requires a sincere effort to
reach agreement, although it does not
require agreement itself. Moreover, the
duty to bargain does not end with the
negotiation of the agreement.
The duty to bargain collectively may be
violated without a general failure of
subjective good faith, and there is no
occasion to consider the issue of good
faith if a party refuses even to negotiate
in fact about any of the mandatory
subjects. AN employer cannot be guilty of
a refusal to bargain if the union is not
itself bargaining in good faith.
4.1 Determination of Good Faith
The crucial question whether or not a party
has met his statutory duty to bargain in good
faith typically turns on the facts of the
individual case. There is no per se test of
good faith in bargaining. Good faith or bad
faith is an inference to be drawn from the
facts and is largely a matter for the NLRB’s
expertise. To some degree, the question of
good faith may be a question of credibility.
A fair criterion of good faith in collective
bargaining requires that the parties
involved deal with each other with open
and fair mind and sincerely endeavor to
overcome obstacles or difficulties existing
between them to the end that

employment relations may be established
and obstruction to the free flow of
commerce prevented. Mere pretended
bargaining will not suffice; neither must
the mind be hermetically sealed against
the thought of entering into an
agreement. To do less that is required by
the standards of good faith and conduct is
a refusal to bargain collectively and
violates the spirit and intent of the Act.
4.2 When Can Bargaining in Bad Faith
Occur?
Bargaining in bad faith is considered ULP
under Art, 248(g). But if one will be
charged with bargaining in bad faith, the
charge should be raised while the
bargaining is in progress. When the
bargaining is finished and the CBA has
been executed voluntarily by the parties,
a charge of bargaining in bad faith is too
late and untenable.
With the execution of the CBA, bad faith
bargaining can no longer be imputed upon
any of the parties thereto. All provisions in the
CBA are supposed to have been jointly and
voluntarily incorporated therein by the
parties. This is not a case where private
respondent exhibited an indifferent attitude
towards collective bargaining because the
negotiations were not the unilateral activity of
petitioner union. The CBA is proof enough that
private respondent exerted "reasonable effort
at good faith bargaining."
The union’s proposal, not being part of the
signed contract, cannot serve as basis of
holding the management guilty of bad faith in
bargaining or in implementing their contract
as signed.
4.3 Instances of Bad Faith: Delay of, or
Imposing Time Limit on, Negotiations
An unwarranted delay in negotiations
may be evidence of bad faith on the part
of the employer. However, an employer
has been held not guilty of bad faith for
failing to complete a collective bargaining
contract during a 3-year period, where
many conferences had been held during
the period, even though the employer
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had insisted on a no-strike clause and had
raised wages during negotiations for the
purpose of meeting competition.
The National Labor Relations Board of the
United States reported that “lack of good
faith is indicated where the employer
engages in unfair labor practices while
bargaining with the union; where it
engages in dilatory tactics during
negotiations; or where it institutes a wage
cut by unilateral action and without
consulting the majority representative.”
Nonetheless, the prior adjudication of bad
faith on an earlier occasion is not itself
substantial evidence of present bad faith.
As the Court held in the case of Kiok Loy v.
NLRC, 141 SCRA 179, 186 (1986), the
company's refusal to make counter-proposal
to the union's proposed CBA is an indication
of its bad faith.
4.3a Bad Faith: Surface Bargaining;
Shifting Bargaining Positions; Blue Sky
Bargaining
“Surface bargaining,” which means a
sophisticated pretense in the form of
apparent bargaining, does not satisfy the
statutory duty to bargain. The duty is not
discharged by merely meeting together or
simply manifesting a willingness to talk. It
requires more than a willingness to enter
upon a sterile discussion of union-
management differences. Collective
bargaining is not simply an occasion for
purely formal meetings between
management and labor while each
maintains an attitude of “take it or leave
it,” but presupposes a desire to reach an
ultimate agreement to enter into a
collective bargaining contract. An
employer’s proposals which could not be
offered with any reasonable expectation
that they would be accepted by the union
constitute surface bargaining.
Repeated shifts in position and attitude
on the part of an employer whenever a
tentative agreement is reached are
evidence of a refusal to bargain

collectively in good faith. It has also been
held that an employer cannot reject a
union’s acceptance of the employer’s
counter offer on the ground that the
union had earlier rejected the offer.
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 the challenged
party’s conduct both at and away from the
bargaining table. It involves the question of
whether an employer’s conduct demonstrates
an unwillingness to bargain in good faith or is
merely hard bargaining. x x x We, likewise, do
not agree that the Union is guilty of ULP for
engaging in blue-sky bargaining or making
exaggerated or unreasonable proposals.
4.3b Bad Faith: Inflexible Demands; Strike
Amid Negotiation
4.3c Bad Faith: Boulwarism; Take-It-or-
Leave-It Bargaining
The new plan was threefold. As negotiations
approached, the Company would use its local
management personnel on the desires of the
work force on the type and level of benefits;
these were then translated into specific
proposals, whose cost and effectiveness were
researched in order to determine an attractive
bargaining offer within the Company's means;
the Company then attempted to "sell" its
proposals to its employees and the general
public through a publicity campaign in plant
newspapers, bulletins, letters, television and
radio announcements and personal contacts.
The Company announced in negotiations that
it rejected the usual “horse trading” approach
to bargaining, with each side eventually
compromising initial unreasonable positions; it
advertised its initial proposals as “fair” and
“firm.” Though willing to accept Union
suggestions based on facts it might have
overlooked, the Company refused to change
its position simply because the Union
disagreed with it.
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We have already indicated that one of the
central tenets of "the Boulware approach" is
that the "product" or "firm, fair offer" must be
marketed vigorously to the "consumers" or
employees, to convince them that the
Company, and not the Union, is their true
representative.
The aim, in a word, was to deal with the Union
through the employees, rather than with the
employees through the Union.
4.4 Not Bad Faith to Propose Modifications
to the Expiring CBA
It is not bad-faith bargaining when a party
proposes modifications to the expiring
CBA. The second sentence of Article 253
explicitly refers to serving a written notice
“to terminate or modify” the agreement.
Modification may mean addition to,
subtraction from, or other ways of
changing the contents or phraseology of
contents of the expiring CBA. It does not
connote a one-direction movement. But
whichever way it is proposed to go, the
proposed changes require honest
explanation.
What was excluded from the old CBA may
be proposed for inclusion in the
forthcoming CBA, or vice-versa.
Negotiation precisely contemplates
proposals and counter-proposals.
4.5 Giving of Information
Part of good-faith bargaining, and a
method to expedite the process, is
supplying of information to the other
party, as required by law. It should be
recalled that under Art. 242 one of the
rights of a legitimate labor organization
which is certified as the exclusive
bargaining agent, is to ask for and be
furnished with the employer’s annual
audited financial statements, including
the balance sheet and the profit and loss
statement. Such information is crucial in
bargaining.
An employer is under a duty, upon
request of the bargaining representative,
to provide information relevant to the

issues at the bargaining table. Refusal to
provide relevant information after the
same has been requested constitutes per
se violation of the duty to bargain.
Relevant information or data may include
information concerning the employees in
the bargaining unit, such as their names,
addresses, and seniority standing, or
concerning the financial status of the
employer, especially where needed to
substantiate claims of inability to pay.
5. FOURTH U.L.P. IN BARGAINING:
GROSS VIOLATION OF THE CONTRACT
At this stage, the negotiations are over;
the document has been signed, sealed,
and delivered. Implementation should
follow. But at this stage the collective
bargaining process is not yet over, and
the duty to bargain is still operative
because such duty further requires
faithful adherence to the contractual
provisions. Violation of the contract
amounts to ULP, if the violation is “gross.”
6. RATIFICATION BY THE CBU;
MANDATORY REQUIREMENTS
The agreement negotiated by the
employees’ bargaining agent should be
ratified or approved by the majority of all
the workers in the bargaining unit.
The proper ratifying group is not just the
majority union but the majority of all
the workers in the bargaining unit
represented in the negotiation.
The ratification and the manner of doing
it are mandatory.
The Implementing Rules require posting
of the CBA in two conspicuous places for
five days. In one case, the CBA was not
posted for at least five days in two
conspicuous places in the establishment
before ratification, to enable the workers
to clearly inform themselves of its
provisions. Moreover, the CBA submitted
to the MOLE did not carry the sworn
statement of the union secretary,
attested by the union president, that the
LABOR RELATIONS: Azucena Vol. II
CBA had been duly posted and ratified, as
required by the Implementing Rules and
Regulations. The court ruled that these
requirements being mandatory, non-
compliance therewith rendered the said
CBA ineffective.
6.1 Invalid Ratification
6.2 When Ratification Not Needed
Ratification of the CBA by the employees
in the bargaining unit is not needed when
the CBA is a product of an arbitral award
by appropriate government authority or
by a voluntary arbitrator. The arbitral
award may result from voluntary
arbitration under Art.262 or from the
secretary’s assumption of jurisdiction or
certification of the dispute to the NLRC,
under Art. 263(g).
In any of those situations the CBA still
needs to be posted in two conspicuous
places in the workplace, but the posting is
for the information of, and not ratification
by, the employees affected. Moreover,
the CBA has to be registered with the
DOLE regional office.
To require ratification of the CBA in case
of arbitral awards will be inconsistent with
the nature of arbitration as a dispute-
settlement device.
The preceding comment, however, does
not mean that the arbitral award is
beyond question. Certiorari on proper
grounds is available.
6.3 Ratified but Unsigned
Lack of the purely ministerial act of
signing the formal contract did not
obviate the fact that there was a binding
contract.
6.4 Unratified but Implemented
The parties to a collective agreement are
required to furnish copies to the appropriate
Regional Office with accompanying proof of
ratification by the majority of all the workers

in the bargaining unit. This was not done in
the case at bar. But we do not declare the
CBA invalid or void considering that the
employees have enjoyed benefits from it.
They cannot receive benefits under provisions
favorable to them and later insist that the
CBA is void simply because other provisions
turn out not to the liking of certain
employees. It is iniquitous to receive benefits
from a CBA and later on disclaim its validity.
7. EXECUTION OF CONTRACT
A party to a collective bargaining may be
required to sign a contract where the
agreement has been reached by the
parties and only one party’s refusal to
execute a contract is preventing its being
carried into effect. Such refusal is an
unfair labor practice
7.1 Unwritten or Unsigned Agreement
American courts have held that a
collective bargaining agreement is valid
though not reduced to writing or signed, if
neither party requests a written
instrument.
7.2 Effect of Signing on Other Disputes
8. REGISTRATION OF C.B.A.
The collective agreement, having been
properly ratified, should be registered
with the DOLE Regional Office where the
bargaining union is registered or where it
principally operates. Art. 231 requires the
registration within thirty (3) calendar days
from execution of the agreement. Multi-
employer collective bargaining
agreements shall be filed with the
Bureau.
It is believed that failure to register the
CBA does not make it invalid or
unenforceable. Its non-registration,
however, renders the contract-bar rule
inoperative.
8.1 Requirements for Registration
Section 2. Requirements for registration. - The
application for CBA registration shall be
LABOR RELATIONS: Azucena Vol. II
accompanied by the original and two (2)
duplicate copies of the following documents
which must be certified under oath by the
representative(s) of the employer(s) and labor
union(s) concerned
(a) the collective bargaining agreement;
(b) a statement that the collective bargaining
agreement was posted in at least two (2)
conspicuous places in the establishment or
establishments concerned for at least five (5)
days before its ratification; and
(c) a statement that the collective bargaining
agreement was ratified by the majority of the
employees in the bargaining unit of the
employer or employers concerned.
No other document shall be required in the
registration of collective bargaining
agreements
The application may be denied if the
supporting documents are incomplete or
not verified under oath. The denial, if by
the Regional office, is appealable to the
Bureau within ten (10) days or to the
Secretary if the denial is by the Bureau.
9. AUTOMATIC RENEWAL OF CBA
The parties shall continue the CBA in “full
force and effect” until they reach a new
agreement.
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.
________
Article 253-A. Terms of a collective
bargaining agreement. – Any Collective
Bargaining Agreement that the parties
may enter into shall, insofar as the
representation aspect is concerned, be for

a term of five (5) years. No petition
questioning the majority status of the
incumbent bargaining agent shall be
entertained and no certification election
shall be conducted by the Department of
Labor and Employment outside of the
sixty-day period immediately before the
date of expiry of such five-year term of
the Collective Bargaining Agreement. All
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 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
retroactivity thereof. In case of a deadlock
in the renegotiation of the Collective
Bargaining Agreement, the parties may
exercise their rights under this Code. (As
amended by Section 21, Republic Act No.
6715, March 21, 1989).
________
1. DURATION OF A C.B.A.
RA No. 9715 (March 21, 2989) has
introduced through Art. 253-A a
significant change in setting the durations
or terms of a CBA at five years for the
“representation aspect” and not more
than three years for “all other provisions.”
The “representation aspect” refers to the
identity and majority status of the union
that negotiated the CBA as the exclusive
representative of the bargaining unit. “All
other provisions: simply refers to the rest
of the CBA, economic as well as non-
economic other than representational.
The conference agreed to make the
“terms and conditions” or “economic”
provision of the CBA good only for three
years so as to protect the economic gains
of the workers.
LABOR RELATIONS: Azucena Vol. II
Obviously, the framers of the law wanted to
maintain industrial peace and stability by
having both management and labor work
harmoniously together without any
disturbance. Thus, no outside union can enter
the establishment within five (5) years and
challenge the status of the incumbent union
as the exclusive bargaining agent. Likewise,
the terms and conditions of employment
(economic and non-economic) cannot be
questioned by the employers or employees
during the period of effectivity of the CBA. The
CBA is a contract between the parties and the
parties must respect the terms and conditions
of the agreement. Notably, the framers of the
law did not give a fixed term as to the
effectivity of the terms and conditions of
employment. It can be gleaned from their
discussions that it was left to the parties to fix
the period.
The issue as to the term of the non-
representation provisions of the CBA need not
belabored especially when we take note of the
Memorandum of the Secretary of Labor dated
February 24, 1994. In said memorandum, the
Secretary of Labor had occasion to clarify the
term of the renegotiated terms of the CBA vis-
a-vis the term of the bargaining agent, to wit:
As a matter of policy the parties are
encourages (sic) to enter into a renegotiated
CBA with a term which would coincide (sic)
with the aforesaid five (5) year term of the
bargaining representative.
In the event however, that the parties, by
mutual agreement, enter into a renegotiated
contract with a term of three (3) years or one
which does not coincide with the said 5-year
term, and said agreement is ratified by
majority of the members in the bargaining
unit, the subject contract is valid and legal
and therefore, binds the contracting parties.
The same will however not adversely affect
the right of another union to challenge the
majority status of the incumbent bargaining
agent within sixty (60) days before the lapse
of the original five (5) year term of the CBA.
2. EFFECTIVITY AND RETROACTIVITY
OF A C.B.A.
If the CBA is the very first for the
bargaining unit, the Code does not state
any rule on the CBA’s effectivity date. The

parties have to decide it for themselves.
But if the ensuing CBA is renewal,
modification or renegotiation of an
expiring one, the Code offers a formula
for the effectivity date. Article 253-A
provides that the ensuing agreement, if
entered into within six (6) months from
expiry of the old one, shall retroact to the
date following such expiry date; thus, if
the CBA expired on December 31 and the
new one is concluded on, say, March 31,
its effectivity date is January 1. If, on the
other hand, the new agreement is
concluded after June 30, then the matter
of retroaction and the possible retroactive
date are left to the parties.
When, precisely, is the date an
agreement is “concluded” or “entered
into”?
The determining point is the date the parties
agreed, not the date they signed. Art. 253-A
refers merely to an "agreement" which,
according to Black's Law Dictionary is "a
coming together of minds; the coming
together in accord of two minds on a given
proposition." This is similar to Art. 1305 of the
Civil Code's definition of "contract" as "a
meeting of minds between two persons." The
two terms, "agreement" and "contract," are
indeed similar, although the former is broader
than the latter because an agreement may
not have all the elements of a contract. As in
the case of contracts, however, agreements
may be oral or written. Hence, even without
any written evidence of the Collective
Bargaining Agreement made by the parties, a
valid agreement existed in this case from the
moment the minds of the parties met on all
matters they set out to discuss, as provided
under Art. 1315 of the Civil Code.
2.1 Effectivity of CBA Concluded After Six
Months from Expiration of Old CBA
Significantly, the law does not specifically
cover the situation where six months
have elapsed but the parties have
reached no agreement with respect to
effectivity. In this eventuality, we hold
that any provision of law should then
apply, for the law abhors a vacuum.
LABOR RELATIONS: Azucena Vol. II
One such provision is the principle of hold
over, i.e., 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.
In this manner, the law prevents the existence
of a gap in the relationship between the
collective bargaining parties. Another legal
principle that should apply is that 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
prospectively unless there are legal
justifications for its retroactive application.
3. EXTENSION OF EFFECTIVITY OF
C.B.A., WHEN VALID
3.1 Ten-Year Suspension of CBA
________
Article 254. Injunction prohibited. – No
temporary or permanent injunction or
restraining order in any case involving or
growing out of labor disputes shall be
issued by any court or other entity,
except as otherwise provided in Articles
218 and 264 of this Code. (As amended
by Batas Pambansa Bilang 227, June 1,
1982).
________
1. NO-INJUNCTION POLICY
An injunction may require or restrain the
doing of an act.
Article 254 announces the policy that
labor disputes are generally not subject to
injunction. If the rule were otherwise, it
would contradict the declared policy,
under Article 211(a), “to promote and
emphasize the primacy of free collective
bargaining and negotiations, including
voluntary arbitration, mediation and
conciliation, as modes of settling labor or
industrial disputes.”
The policy, basically, is freedom at the
workplace. The law, true to the tenets of
free enterprise system, allows
management and labor to fashion the

contents and incidents of their
relationship. If there is dispute between
the parties, the responsibility to solve it
devolves upon them primarily, not upon
the government. Government
intervention is the exception rather than
the rule. This anti-injunction policy applies
even as regards wage-fixing by the wage
commission or regional wage boards.
Moreover, any injunctive order in “non-
national interest” disputes can be
directed only against the illegal acts
being committed in connection with the
labor dispute; it cannot be directed
against the dispute itself.
There is no power the exercise of which is
more delicate which requires grater caution,
deliberation, and sound discretion, or (which
is) more dangerous in a doubtful case than
the issuing of an injunction; it is the strong
arm of equity that never ought to be
extended unless to cases of great injury,
where courts of law cannot afford an
adequate or commensurate remedy in
damages. The right must be clear, the injury
impending or threatened, so as to be averted
only by protection preventive process of
injunction.
1.1 Reason of the No-Injunction Policy
The labor injunction is an employer’s
most effective remedy in labor dispute.
However narrow its scope and form, the
issuance of an injunction for any purpose
in a labor dispute will generally tip the
scales of the controversy. The issuance of
an injunction in the early phases of a
strike can critically sway the balance of
the economic struggle against the union.
Enforced by the court’s contempt powers,
even a preliminary injunction is an
effectual strike-breaking weapon because
so much time ordinarily elapses between
the issuance of a preliminary injunction
and the time when a final decree can be
reviewed on appeal.
1.2 Injunction Issued by Regular Court,
When Proper
LABOR RELATIONS: Azucena Vol. II
Regular courts are without authority to
issue injunction orders in cases involving
or originating from labor disputes even if
the complaint was filed by non-striking
employees and the employer was also
made a respondent to the action or even
if the complainant was a customer of the
strike-bound employer or a sister
company of the strike-bound employer,
whose premises were picketed by the
strikers.
The court may issue an injunction, whether
temporary or permanent, as provided in said
section of Republic Act 875, only in a case
involving or growing out of a labor dispute.
________
Article 255. Exclusive bargaining
representation and workers’ participation
in policy and decision-making. – The labor
organization designated or selected by
the majority of the employees in an
appropriate collective bargaining unit
shall be the exclusive representative of
the employees in such unit for the
purpose of collective bargaining.
However, an individual employee or
group of employees shall have the right
at any time to present grievances to their
employer.
Any provision of law to the contrary
notwithstanding, workers shall have the
right, subject to such rules and
regulations as the Secretary of Labor and
Employment may promulgate, to
participate in policy and decision-making
processes of the establishment where
they are employed insofar as said
processes will directly affect their rights,
benefits and welfare. For this purpose,
workers and employers may form labor-
management councils: Provided, That the
representatives of the workers in such
labor-management councils shall be
elected by at least the majority of all
employees in said establishment. (As
amended by Section 22, Republic Act No.
6715, March 21, 1989).
________

1. WORKERS’ PARTICIPATORY RIGHT:
ITS CONSTITUTIONAL MEANING
The crucial question is: what is the
meaning or extent of the workers’ right to
participate in policy and decision-making?
Enlightening in this regard are the
deliberations of the 1986 Constitutional
Commission. They reveal that the
intention was to refer to participation in
grievance procedures and voluntary
modes of settling disputes and not to
formulation of corporate programs or
policies.
There are three levels in which employees
could influence management in their
decision-making, and one would be at the
corporate level. This would refer to
strategic policies pertaining to the
mergers, acquisitions, pricing and
marketing policies, disposition of profits
and the like. The second level would be
the plant or department level. It is here
where administrative decisions are made.
Decisions made in this level may refer to
hiring, firing, and promotion of
employees, cost and quality control,
resource allocations, achievement of
target quotas, etc. And the third will be
the shop-floor level. It is here where the
so-called operating decisions are made.
Decisions made in this level usually refer
to scheduling of work, safety regulations,
work methods, training of new
employees. So these are the different
levels in which we hope there would be
this democratic participation of workers in
vital issues that affect both management
and the workers.
1.1 Employees’ Participation in
Formulating the Code of Discipline
Indeed, it was only on March 2, 1989, with the
approval of Republic Act No. 6715, amending
Article 211 of the Labor Code, that the law
explicitly considered it a State policy "(t)o
ensure the participation of workers in decision
and policy-making processes affecting the
rights, duties and welfare." However, even in
the absence of said clear provision of law, the
LABOR RELATIONS: Azucena Vol. II
exercise of management prerogatives was
never considered boundless.
Verily, a line must be drawn between
management prerogatives regarding business
operations per se and those which affect the
rights of the employees. In treating the latter,
management should see to it that its
employees are at least properly informed of
its decisions or modes action.
2. WORKERS’ PARTICIPATION AS THE
REAL OBJECTIVE; THE LMC
Article 255 deals with the crucial concept
of employee participation. The law, while
promoting collective bargaining, really
aims at employee participation in policy
and decision-making. Collective
Bargaining is just one of the forms of
employee participation. Despite so much
interest in and promotion of collective
bargaining, it is incorrect to say that the
device which secures industrial
democracy is collective bargaining and no
other. And it is equally misleading to say
that collective bargaining is the end-goal
of employee representation. Rather, the
real aim is employee participation in
whatever form it may appear—bargaining
or no bargaining, union or no union.
This is why Art. 255, second sentence,
reserves the right of an individual
employee or group of employees
(unionized or ununionized, or inside or
outside a union) to present grievances to
their employer at any time. Effectively
voicing one’s grievance is reserved and
hallowed by law, with or without
collective bargaining.
But individual representation in dealing or
bargaining with the employer is weak. For
this reason the law provides another
forum—the labor-management council
aside from or instead of a union. An LMC
is versatile. It can exist where there is no
union or co-exist with a union. One thing
it cannot and must not do is to replace a
union. While a labor union is hamstrung
by such legal prescriptions as formal
registration, limited bargaining unit,
majority status, mandatory and non-

mandatory subjects, etc., an LMC need
not be held back by any of these. It can
represent employees across the
enterprise, present grievances regardless
of the grievant’s rank, and proffer
proposals unhindered by formalities. It
can also handle projects and programs
whoever is the proponent, form
committees for myriad purposes, instill
discipline and improve productivity.
The LMC, in short, can deal with the
employer on matters affecting the
employees’ rights, benefits and welfare.
“Dealing with the employer,” we have
seen, is broader, freer, and (from the
employer’s viewpoint) less threatening
method than collective bargaining.
2.1 Department’s Promotion of LMC and
Other Councils
Section 1. Creation of labor-management and
other councils. - The Department shall
promote the formation of labor-management
councils in organized and unorganized
establishments to enable the workers to
participate in policy and decision-making
processes in the establishment, insofar as
said processes will directly affect their rights,
benefits and welfare, except those which are
covered by collective bargaining agreements
or are traditional areas of bargaining.
3. INDIVIDUAL GRIEVANCE
As briefly indicated above, the presence
of an employees’ organization,--a union,
an LMC or other forum—does not replace
the individual employee’s right to pursue
grievances. Each employee retains the
right to deal with his or her employer, and
vice-versa. The labor organization is a
representative of the collective
employees, but this fact does not mean
that an employee can act only through
the representative. For these reasons, the
law (rt. 255) explicitly preserves and
respects the right of an individual
employee or any group of employees to
directly present grievances to their
employers at any time. Even when under
investigation, an employee can choose to
handle personally his defense, unassisted
LABOR RELATIONS: Azucena Vol. II
by any representative (Art. 277[b]). The
second sentence of Art. 255 is meant to
be an exception to the exclusiveness of
the representative role of the labor
organization. Such individual right cannot
be taken away even by a union’s
constitution and by-laws.
American jurisprudence holds that
notwithstanding a union’s obligation as
exclusive bargaining representative to
process the grievances of all bargaining
unit employees, individual employees
may at any time present grievances
directly to the employer for adjustment
without the intervention of the bargaining
representative, and without subjecting
the employer to liability for refusing to
bargain with the union. However, the
adjustment of the grievances must be
consistent with the terms of the current
collective bargaining contract or
agreement. Moreover, the bargaining
representative must be given the
opportunity to be present at the meeting
between the employer and employee.
4. COLLECTIVE BARGAINING UNIT
(CBU) DEFINED
At the enterprise level there are three
democratic devices, statutorily
embedded, to advance the cause of
industrial peace, namely: airing of
grievance even by an individual employee
directly to the employer anytime;
participation in policy and decision-
making by employees, whether unionized
or not; and collective bargaining with the
employer by unionized employees.
The collective bargaining that the law
envisions occurs between the employer
and the employees comprised in an
“appropriate” collective bargaining unit
(CBU) represented by a union. As initially
explained in Art. 234, the “CBU” is that
group of jobs and jobholders represented
by the recognized or certified union when
it bargains with the employer. The
“group” may comprise all the supervisors
or, separately, all the rank-and-file
population in the company. Or it may be

less than all of these two categories,
although the law prefers to have only one
grouping per category in one enterprise
because the more solid the unit, the
stronger its bargaining capacity. But if a
single unit (only one for all supervisors or
only one for all rank-and-file) is not
feasible, the law allows subgroups as
bargaining units, provided only that each
sub-group is “appropriate.” It is
appropriate if its members share
substantially common concerns and
interests.
As defined in D.O. No. 40-03 which is now
the revised Book V of the Rules
Implementing the Labor Code,
“bargaining unit” refers to a group of
employees sharing mutual interests
within a given employer unit, comprised
of all or less than all of the entire body of
employees in the employer unit or any
specific occupational or geographical
grouping within such employer unit.
Within one unit there may be one or more
unions. The bargaining unit therefore is
not the same as, and usually a bigger
group than, a union. But only one union
should represent the whole CBU in
bargaining with the employer. The chosen
union is called the bargaining agent, its
principal being the CBU members
themselves.
The bargaining union has to be the
majority union, the one where majority of
the CBU members belong.
“Representative union,” “bargaining
union,” “majority union,” “bargaining
agent,” and “bargaining representative”
are one and the same. It refers to the
union that represents the CBU in
bargaining or dealing with the employer.
5. APPROPRIATENESS OF
BARGAINING UNIT; FACTORS
CONSIDERED
The determination of what constitutes a
proper bargaining unit lies primarily in the
discretion of the Bureau, since no individual
LABOR RELATIONS: Azucena Vol. II
factor is given by law decisive weight. But
while the determination of the appropriate
collective bargaining unit (CBU) is a primary
function of the Bureau, it is subject to the
legal requirement that proper consideration
should be given to all legally relevant factors.
The basic test of an asserted bargaining unit's
acceptability is whether or not it is
fundamentally the combination which will
best assure to all employees the exercise of
their collective bargaining rights. Industrial
experience indicates that the most efficacious
bargaining unit is one which is comprised of
constituents enjoying a community of
interest. This community of interest is
reflected in groups having substantial
similarity of work and duties or similarity of
compensation and working conditions.
In making judgments about “community
of interest” in these different settings, the
Board will look to such factors as: (1)
similarity in the scale and manner of
determining earnings; (2) similarity in
employment benefits, hours of work and
other terms and conditions of
employment; (3) similarity in the kinds of
work performed; (4) similarity in the
qualifications, skills and training of the
employees; (5) frequency of contact or
interchange among the employees; (6)
geographic proximity; (7) continuity or
integration of production processes; (8)
common supervision and determination
of labor-relations policy; (9) history of
collective bargaining; (10) desires of the
affected employees; or (11) extent of
union organization.
Geographical location can be completely
disregarded if the communal or mutual
interests of the employees are not
sacrificed.
5.1 Bargaining History Not Decisive Factor
The basic test of an asserted bargaining unit's
acceptability is whether or not it is
fundamentally the combination which will
best assure to all employees the exercise of
their collective bargaining rights.
5.2 Exclusion of Confidential Employees

By the very nature of their functions, they
assist and act in a confidential capacity to, or
have access to confidential matters of,
persons who exercise managerial functions in
the field of labor relations. As such, the
rationale behind the ineligibility of managerial
employees to form, assist or join a labor union
equally applies to them.
5.3 Temporary or Part-Time Employees
The NLRB has been upheld in excluding
temporary employees from bargaining
units of workers in certain jobs. In
determining whether temporary or part-
time employees are sufficiently identified
with the regular employees, so as to be
properly included in the bargaining unit,
one of the important factors considered
by the NLRB is the reasonable likelihood
that the temporary or part-time
employees will eventually become
adequately identified in employment with
the other members of the bargaining unit.
5.4 Seasonal Employees
The full-time seasonal employees who
have a reasonable expectation of
substantial seasonal employment from
year to year have been held properly
included in the unit, but part-time
seasonal employees who receive none of
the fringe benefits enjoyed by full-time
employees have insufficient common
interest with the full-time employees to
be included in the same bargaining unit.
5.5 Probationary Employees
The fact that an employee is given a
classification such as beginner, trainee or
probationary employee, and the fact that
contemplation of permanent tenure is
subject to satisfactory completion of an
initial trial period, are insufficient to
warrant such employee’s exclusion from a
bargaining unit. Moreover, the eligibility
of probationary employees does not turn
on the proportion of such employees who,
willingly or not, fail to continue to work for
the employer throughout the trial period.
LABOR RELATIONS: Azucena Vol. II
6. REFERENDUM WHERE INTERESTS
ARE DISSIMILAR
The decision then of the Executive Labor
Arbiter in merely directing the holding of
a referendum “to determine the will of the
service engineers, sales representatives
as to their inclusion or exclusion in the
bargaining unit” is the most appropriate
procedure that conforms with their right
to form, assist or join a labor union or
organization.
6.1 Desire of the Employees; The Globe
Doctrine
The desires of the employees are relevant
to the determination of the appropriate
bargaining unit. The relevancy of the
wishes of employees concerning their
inclusion or exclusion from a proposed
bargaining unit is inherent in the basic
right to self organization. While the
desires of the employees with respect to
their inclusion in a bargaining unit is not
controlling, it is a factor which would be
taken into consideration in reaching a
decision.
7. SINGLE OR “EMPLOYER UNIT” IS
FAVORED
It has been the policy of the Bureau of
Labor Relations to encourage the
formation of an employer unit unless
circumstances otherwise require. In other
words, one employer enterprise
constitutes only one bargaining unit. The
more solid the employees are, the
stronger is their bargaining capacity.
The proliferation of unions in an employer
unit is discouraged as a matter of policy
unless there are compelling reasons
which would deny a certain class of
employees the right to self-organization
for purposes of collective bargaining.
Single plant units are presumed to be
appropriate for purposes of collective
bargaining.

Instead of forming another bargaining unit,
the law requires them to be members of the
existing one. The ends of unionism are better
served if all the rank-and-file employees with
substantially the same interests and who
invoke their right to self-organization are part
of a single unit so that they can deal with
their employer with just one and yet potent
voice. The employees' bargaining power with
management is strengthened thereby.
7.1 Exception to One-unit Policy
The “one unit-one company” rule is not
without exception. The exclusion of the
subject employees from the rank-and-file
bargaining unit and the CBA is definitely a
“compelling reason,” for it completely
deprived them of the chance to bargain
collectively with petitioner and are thus
left with no recourse but to group
themselves into a separate and distinct
bargaining unit and form their own
organization.
The usual exception, of course, is where the
employer unit has to give way to the other
units like the craft unit, plant unit, or a
subdivision thereof; the recognition of these
exceptions takes into account the policy to
assure employees of the fullest freedom in
exercising their rights. Otherwise stated, the
one company-one union policy must yield to
the right of the employees to form unions or
associations for purposes not contrary to law,
to self-organization and to enter into
collective bargaining negotiations, among
others, which the Constitution guarantees.
8. TWO COMPANIES WITH RELATED
BUSINESSES
Two corporations cannot be treated as a
single bargaining unit even if their
businesses are related.
8.1 Subsidiaries and Spun-Off
Corporations
Subsidiaries or corporations formed out of
former divisions of a mother company
following a bona fide reorganization may
constitute separate bargaining units.
LABOR RELATIONS: Azucena Vol. II
Moreover, in determining an appropriate
bargaining unit, the test of grouping is
mutuality or commonality of interests. The
employees sought to be represented by the
collective bargaining agent must have
substantial mutual interests in terms of
employment and working conditions as
evinced by the type of work they performed.
Considering the spin-offs, the companies
would consequently have their respective and
distinctive concerns in terms of the nature of
work, wages, hours of work and other
conditions of employment. Interests of
employees in the different companies
perforce differ. SMC is engaged in the
business of the beer manufacturing. Magnolia
is involved in the manufacturing and
processing of dairy products while SMFI is
involved in the production of feeds and the
processing of chicken. The nature of their
products and scales of business may require
different skills which must necessarily be
commensurated by different compensation
packages. The different companies may have
different volumes of work and different
working conditions. For such reason, the
employees of the different companies see the
need to group themselves together and
organize themselves into distinctive and
different groups. It would then be best to have
separate bargaining units for the different
companies where the employees can bargain
separately according to their needs and
according to their own working conditions.
9. SUMMATION OF SIGNIFICANCE
It is helpful to reiterate that the
bargaining unit is not the same as the
union; in fact, there may be several
unions (majority and minority) in one
bargaining unit. Determining the scope or
“membership” of the bargaining unit is
significant and far-reaching because it
leads to the determination also of: (1) the
employees who can vote in the
certification election; (2) the employees
to be represented in bargaining with the
employer; and (3) the employees who will
be covered by the resulting CBA.
Distinguishing the CBU from the union is
important because—
1. in a CE the voters are the CBU,
whether union or non-union members;

2. in CBA ratification the voters are the
unit, not just the union members;
3. in strike voting, the voters are the
members of the union, not all of the unit.
________
Article 256. Representation Issue in
Organized Establishments. - In organized
establishments, when a verified petition
questioning the majority status of the
incumbent bargaining agent is filed by
any legitimate labor organization
including a national union or federation
which has already issued a charter
certificate to its local chapter
participating in the certification election
or a local chapter which has been issued
a charter certificate by the national union
or federation before the Department of
Labor and Employment within the sixty
(60)-day period before the expiration of
the collective bargaining agreement, the
Med-Arbiter shall automatically order an
election by secret ballot when the verified
petition is supported by the written
consent of at least twenty-five percent
(25%) of all the employees in the
bargaining unit to ascertain the will of the
employees in the appropriate bargaining
unit. To have a valid election, at least a
majority of all eligible voters in the unit
must have cast their votes. The labor
union receiving the majority of the valid
votes cast shall be certified as the
exclusive bargaining agent of all the
workers in the unit. When an election
which provides for three or more choices
results in no choice receiving a majority
of the valid votes cast, a run-off election
shall be conducted between the labor
unions receiving the two highest number
of votes: Provided, That the total number
of votes for all contending unions is at
least fifty percent (50%) of the number of
votes cast. In cases where the petition
was filed by a national union or
federation, it shall not be required to
disclose the names of the local chapter’s
officers and members.
LABOR RELATIONS: Azucena Vol. II
At the expiration of the freedom period,
the employer shall continue to recognize
the majority status of the incumbent
bargaining agent where no petition for
certification election is filed. (As amended
by Section 23, Republic Act No. 6715,
March 21, 1989 and Section 10, Republic
Act No. 9481 which lapsed into law on
May 25, 2007 and became effective on
June 14, 2007).
________
Article 257. Petitions in Unorganized
Establishments. - In any establishment
where there is no certified bargaining
agent, a certification election shall
automatically be conducted by the Med-
Arbiter upon the filing of a petition by any
legitimate labor organization, including a
national union or federation which has
already issued a charter certificate to its
local/chapter participating in the
certification election or a local/chapter
which has been issued a charter
certificate by the national union or
federation. In cases where the petition
was filed by a national union or
federation, it shall not be required to
disclose the names of the local chapter’s
officers and members. (As amended by
Section 24, Republic Act No. 6715, March
21, 1989 and Section 11, Republic Act No.
9481 which lapsed into law on May 25,
2007 and became effective on June 14,
2007).
________
Article 258. When an employer may file
petition. – When requested to bargain
collectively, an employer may petition the
Bureau for an election. If there is no
existing certified collective bargaining
agreement in the unit, the Bureau shall,
after hearing, order a certification
election.
All certification cases shall be decided
within twenty (20) working days.
The Bureau shall conduct a certification
election within twenty (20) days in
accordance with the rules and regulations
prescribed by the Secretary of Labor.

________
Article 258-A. Employer as Bystander. - In
all cases, whether the petition for
certification election is filed by an
employer or a legitimate labor
organization, the employer shall not be
considered a party thereto with a
concomitant right to oppose a petition for
certification election. The employer’s
participation in such proceedings shall be
limited to:
(1) being notified or informed of petitions
of such nature; and
(2) submitting the list of employees
during the pre-election conference should
the Med-Arbiter act favorably on the
petition. (As amended by Section 12,
Republic Act No. 9481 which lapsed into
law on May 25, 2007 and became
effective on June 14, 2007).
________
Article 259. Appeal from certification
election orders. – Any party to an election
may appeal the order or results of the
election as determined by the Med-Arbiter
directly to the Secretary of Labor and
Employment on the ground that the rules
and regulations or parts thereof
established by the Secretary of Labor and
Employment for the conduct of the
election have been violated. Such appeal
shall be decided within fifteen (15)
calendar days. (As amended by Section
25, Republic Act No. 6715, March 21,
1989).
________
1. DETERMINING THE BARGAINING
UNION: OVERVIEW OF THE METHODS
To bargain with the employer, the
employees in the collective bargaining
unit (CBU) can be represented by one and
only one union which has to be a
legitimate labor organization duly
designated or selected by the employees
in the CBU.
LABOR RELATIONS: Azucena Vol. II
Under the Code a “bargaining
representative” is defined as a
“legitimate labor organization or any
officer or agent of such organization
whether or not employed by the
employer.” The Implementing Rules,
however, as amended by D.O. No. 40-03
drops the “officer or agent” as it states:
“Exclusive bargaining representative
means any legitimate labor union duly
recognized or certified as the sole and
exclusive bargaining representative or
agent of all the employees in a bargaining
unit.”
The selection of such bargaining agent
may take place in an organized or an
unorganized establishment. “Organized
establishment” refers to an enterprise
where there exists a recognized or
certified sole and exclusive bargaining
agent. The employer company is
“unorganized” where no union has yet
been duly recognized or certified as
bargaining representative. Art. 256
speaks of an organized firm; Art. 257, of
the unorganized.
Whether the proceedings take place in an
organized or an unorganized bargaining
unit, and whether the proceedings are
called consent election or certification
election, the objective is the same,
namely, to identify the union that will
represent the employees in bargaining
with the employer. Until this
representation dispute is resolved, no
CBA can be entered into.
In an unorganized establishment, the
employer may voluntarily recognize the
bargaining agent. If there are obstacles to
this, the petition to hold an election may
be filed anytime by any legitimate labor
organization (LLO), except within 12
months from a previous CE, run-off, or
consent election.
In an organized establishment, on the
other hand, voluntary recognition is not
possible. A petition to hold a CE has to be
filed within the “freedom period” which
means the last sixty (60) days of the fifth

year of the expiring CBA; in other words,
the contest between unions comes at
intervals of roughly four years and ten
months. The petition may be filed by any
LLO, but the petition must have the
written support of at least twenty-five
percent (25%) of the employees in the
bargaining unit. The 25% initial support
indicates that the petitioner has a fair
chance of winning and that the petition is
not just a nuisance.
Conceivably but rarely an employer may
also file a petition for a CE.
The election is conducted under the
supervision and control of DOLE officials.
It ends up with a formal and official
statement of results, certifying which
union won, if any. Hence, the election is
appropriately called “certification
election.”
Where one casting of votes is not decisive
enough to elect a union, the election
officials may require a run-off election if
certain other conditions exist, as
explained below.
But a certification election, a run-off
election, or a consent election is needed
only when two or more unions are vying
for the “office” of exclusive bargaining
representative (EBR). Where there is but
one union in the bargaining unit and there
is ample proof that that union carries the
majority of the employees, the law allows
the employer to voluntarily recognize
such union. Voluntary recognition does
away with the more tedious electoral
contest between unions.
There are, therefore, three methods to
determine the bargaining union: (1)
voluntary recognition; (2) certification
election with or without run-off; and (3)
consent election.
2. FIRST METHOD: VOLUNTARY
RECOGNITION (V.R.)
The employer’s voluntary recognition of
the employees’ union significantly
LABOR RELATIONS: Azucena Vol. II
facilitates the bargaining process. The
employees, especially the union leaders
and organizers, rejoice when they are
able to convince the employer to
voluntarily recognize and subsequently
bargain with their union. But VR requires
three concurrent conditions.
First, voluntary recognition is possible
only in an unorganized establishment. In
an organized setting the employer cannot
voluntarily recognized any new union
because the law (Art. 256) requires him to
continue recognizing and dealing with the
incumbent union as long as it has not
been properly replaced by another union.
Second, only one union is asking for
recognition; if there are two or more
unions asking to be recognized the
employer cannot recognize any of them;
the rivalry must be resolved through an
election;
Third, the union voluntarily recognized
should be the majority union as indicated
by the fact that members of the
bargaining unit did not object to the
projected recognition. If no objection is
raised, the recognition will proceed, the
DOLE will be informed and CBA
negotiation will commence. If objection is
raised, the recognition is barred, and a
certification election or consent election
will have to take place.
2.1 VR Under D.O. No. 40-03
Section 1. When and where to file. - In
unorganized establishments with only one
legitimate labor organization, the employer
may voluntarily recognize the representation
status of such a union. Within thirty (30) days
from such recognition, the employer and
union shall submit a notice of voluntary
recognition with the Regional Office which
issued the recognized labor union's certificate
of registration or certificate of creation of a
chartered local.
Section 2. Requirements for voluntary
recognition. - The notice of voluntary
recognition shall be accompanied by the

original copy and two (2) duplicate copies of
the following documents:
(a) a joint statement under oath of voluntary
recognition attesting to the fact of voluntary
recognition;
(b) certificate of posting of the joint statement
of voluntary recognition for fifteen (15)
consecutive days in at least two (2)
conspicuous places in the establishment or
bargaining unit where the union seeks to
operate;
(c) the approximate number of employees in
the bargaining unit, accompanied by the
names of those who support the voluntary
recognition comprising at least a majority of
the members of the bargaining unit; and
(d) a statement that the labor union is the
only legitimate labor organization operating
within the bargaining unit.
All accompanying documents of the notice for
voluntary recognition shall be certified under
oath by the employer representative and
president of the recognized labor union.
Section 3. Action on the Notice. - Where the
notice of voluntary recognition is sufficient in
form, number and substance and where there
is no other registered labor union operating
within the bargaining unit concerned, the
Regional Office, through the Labor Relations
Division shall, within ten (10) days from
receipt of the notice, record the fact of
voluntary recognition in its roster of legitimate
labor unions and notify the labor union
concerned.
Where the notice of voluntary recognition is
insufficient in form, number and substance,
the Regional Office shall, within the same
period, notify the labor union of its findings
and advise it to comply with the necessary
requirements. Where neither the employer
nor the labor union failed to complete the
requirements for voluntary recognition under
Section 2 of this Rule within thirty (30) days
from receipt of the advisory, the Regional
Office shall return the notice for voluntary
recognition together with all its accompanying
documents without prejudice to its re-
submission.
Section 4. Effect of recording of fact of
voluntary recognition. - From the time of
LABOR RELATIONS: Azucena Vol. II
recording of voluntary recognition, the
recognized labor union shall enjoy the rights,
privileges and obligations of an existing
bargaining agent of all the employees in the
bargaining unit.
Entry of voluntary recognition shall bar the
filing of a petition for certification election by
any labor organization for a period of one (1)
year from the date of entry of voluntary
recognition. Upon expiration of this one-year
period, any legitimate labor organization may
file a petition for certification election in the
same bargaining unit represented by the
voluntarily recognized union, unless a
collective bargaining agreement between the
employer and voluntarily recognized labor
union was executed and registered with the
Regional Office in accordance with Rule XVII of
these Rules.
Simply said, the last paragraph means
that the employer and the union should
conclude and register a CBA within one
year from the voluntary recognition,
otherwise, the recognition will lapse and a
rival union may petition for a certification
election.
3. SECOND METHOD: CERTIFICATION
ELECTION (C.E.)
Whenever there is doubt as to whether a
particular union represents the majority of the
rank-and-file employees, in the absence of a
legal impediment, the holding of a
certification election is the most democratic
method of determining the employees' choice
of their bargaining representative. It is the
appropriate means whereby controversies and
disputes on representation may be laid to
rest, by the unequivocal vote of the
employees themselves.
Exercising their suffrage through the medium
of the secret ballot, they can select the
exclusive bargaining representative that,
emboldened by their confidence and
strengthened by their support shall fight for
their rights at the conference table. That is
how union solidarity is achieved and union
power is increased in the free society. Hence,
rather than being inhibited and delayed, the
certification election should be given every
encouragement under the law, that the will of
the workers may be discovered and, through

their freely chosen representatives, pursued
and realized.
3.1 Fact-Finding
In labor legislation, certification
proceedings is not a litigation in the sense
in which the term is ordinarily
understood, but an investigation of non-
adversary and fact finding character. As
such, it is not bound by technical rules of
evidence.
The law does not contemplate the holding
of a certification election unless the
preliminary inquiry shows a reasonable
doubt as to which of the contending
unions represents a majority, or unless
ten per centum of the laborers demand
this election. But these grounds
necessarily depend on the weight of the
evidence adduced by the rival unions,
and this weight, in turn, cannot be
determined properly if the right to cross
examination is denied.
Certification proceedings directly involve
only two issues: (a) proper composition
and constituency of the bargaining unit;
and (b) veracity of majority membership
claims of the competing unions so as to
identify the one union that will serve as
the bargaining representative of the
entire bargaining unit.
But some of the employees may not want
to have a union; hence, “No Union” is one
of the choices (“candidates”) named in
the ballot. If “No Union” wins, the
company pr the bargaining unit remains
ununionized for at least 12 months, the
period known as the 12-month bar. After
that period, a petition for a CE may be
filed again.
3.1a Certification Election Differentiated
from Union Election
A union election is held pursuant to the
union's constitution and bylaws, and the right
to vote in it is enjoyed only by union
members. A union election should be
distinguished from a certification election,
LABOR RELATIONS: Azucena Vol. II
which is the process of determining, through
secret ballot, the sole and exclusive
bargaining agent of the employees in the
appropriate bargaining unit, for purposes of
collective bargaining. Specifically, the purpose
of a certification election is to ascertain
whether or not a majority of the employees
wish to be represented by a labor organization
and, in the affirmative case, by which
particular labor organization.
In a certification election, all employees
belonging to the appropriate bargaining unit
can vote. Therefore, a union member who
likewise belongs to the appropriate bargaining
unit is entitled to vote in said election.
However, the reverse is not always true; an
employee belonging to the appropriate
bargaining unit but who is not a member of
the union cannot vote in the union election,
unless otherwise authorized by the
constitution and bylaws of the union. Verily,
union affairs and elections cannot be decided
in a non-union activity.
The winners in a union election become
officers and representatives of the union
only. The winner in a certification election
is an entity, a union, which becomes the
representative of the whole bargaining
unit that includes even the members of
the defeated unions.
3.2 Direct Certification No Longer Allowed
Even in a case where a union has filed a
petition for certification election, the
mere fact that there was no opposition
does not warrant a direct certification.
The holding of a certification election at the
proper time is not necessarily a mere
formality as there was a compelling legal
reason not to directly and unilaterally certify a
union whose legitimacy is precisely the object
of litigation in a pending cancellation case
filed by certain "concerned salesmen," who
also claim majority status.
The direct certification originally allowed
under Article 257 of the Labor Code has
apparently been discontinued as a method of
selecting the exclusive bargaining agent of
the workers. This amendment affirms the
superiority of the certification election over
the direct certification which is no longer

available now under the change in said
provision.
3.3 Who Files Petition for CE
Any legitimate labor organization or any
employer, when requested to bargain
collectively while the majority status of
the union is in doubt, may file a petition
for certification election (PCE)
In an unorganized establishment one a
petition is filed by a legitimate labor
organization, the Med-arbiter shall
automatically order the conduct of a
certification election. The tenor of Article
257 is one of command, so such order is
not appealable. To make it appealable will
contradict the objective stated in Article
211, to promote free trade unionism. But
the application of Article 257 has to be
initiated by a genuine petition from a
legitimate labor organization. Indeed, the
law did not reduce the Med-Arbiter to an
automaton which can instantly be set to
impulse by the mere filing of a petition for
certification election. He is still tasked to
satisfy himself that all the conditions of
the law are met, and among the legal
requirements is that the petitioning union
must be a legitimate labor organization in
good standing.
In an organized establishment the
incumbent bargaining agent, of course,
will not file a PCE because it will not
contest its own incumbency. The filer will
most likely be a union that was defeated
in the CE held some five years before. In
any such petition the incumbent union is
a necessary party, a forced intervenor.
But even so, it does not thereby lose its
representative status; it remains the sole
bargaining representative until it is
replaced by another. And until so replaced
it has the right to retain the recognition
by the employer.
The employer, says Article 258, may file a
PCE when it has been asked to bargain. If
this happens, the holding of the CE
becomes mandatory if there is no existing
registered collective bargaining
LABOR RELATIONS: Azucena Vol. II
agreement. However, instead of itself
filing a petition, the employer usually lets
the unions interplead to determine who
among them will bargain with the
employer.
Other unions which are interested in
joining a certification election may file a
motion for intervention. Such motion is
governed by the same rules that apply to
a PCE.
Whether petitioner or intervenor, the
union has to be an LLO.
If the petition for certification election was
filed by the federation which is merely an
agent, the petition is deemed to be filed by
the chapter, the principal, which must be a
legitimate labor organization. The chapter
cannot merely rely on the legitimate status of
the mother union.
Where the constitution, by-laws and the list of
members who supposedly ratified the same
were not attested to by the union president,
and the constitution and by-laws were not
verified under oath, the local union has no
personality to file a petition for certification
election it not being a legitimate labor
organization. The petition should be
dismissed.
A union that has no legal personality to file a
petition for CE has no personality either to file
a petition-in-intervention.
3.4 Where to File the Petition for CE
A petition for certification election (PCE)
shall be filed with the Regional Office
which issued the petitioning union’s
certificate of registration or certificate of
creation of chartered local. The petition
shall be heard and resolved by the Med-
Arbiter.
Where two or more petitions involving the
same bargaining unit are filed in one
Regional Office, the same shall be
automatically consolidated with the Med-
Arbiter who first acquired jurisdiction.
Where the petitions are filed in different
Regional Offices, the Regional Office in
which the petitions are first filed shall

exclude all others; in which case, the
latter shall indorse the petition to the
former for consolidation.
3.5 When to File the Petition
The proper time to file a petition for CE
depends on whether the CBU has a CBA
or not. If it has no CBA , the petition may
be filed anytime outside the 12-month
bar. If it has a CBA, it can be filed only
within the last 60 days of the fifth year of
the CBA.
3.6 Action on the Petition: Preliminary
Conference
The preliminary conference shall
determine the following:
(a) the bargaining unit to be represented;
(b) contending labor unions;
(c) possibility of a consent election;
(d) existence of any of the bars to
certification election under Section3 of
D.O. No. 40-03;
(e) such other matters as may be relevant
for the final disposition of the case.
If at the preliminary conference the
unions agree to hold a consent election,
then the PCE will no longer be heard and
the unions will instead prepare for the
consent election.
If the unions fail to agree to hold a
consent election, the Med-arbiter
proceeds to consider the petition. He may
deny and dismiss, or he may grant, the
petition. Denial or grant of the petition is
always appealable to the Secretary. Never
appealable, however, is the approval of a
PCE in an unorganized (ununionized)
bargaining unit, the reason being that the
law wants the ununionized unionized.
3.7 Action on the Petition: Hearings and
Pleadings
LABOR RELATIONS: Azucena Vol. II
If the contending unions fail to agree to a
consent election during the preliminary
conference, the Med-arbiter may conduct
as many hearings as he may deem
necessary. But the conduct of the
hearings cannot exceed fifteen (15) days
from the date of the scheduled
preliminary conference/ hearing. After
that time the petition shall be considered
submitted for decision. The Med-arbiter
shall have control of the proceedings.
Postponements or continuances are
discouraged.
The failure of any party to appear in the
hearing(s) when notified or to file its
pleadings shall be deemed a waiver of its
right to be heard. The Med-arbiter,
however, upon the agreement of the
parties for meritorious reasons, may allow
the cancellation of scheduled hearing(s).
The cancellation of any scheduled
hearing(s) shall not be used as a basis for
extending the 15-day period within which
to terminate the same.
Within ten (10) days from the date of the
last hearing, the Med-arbiter shall issue a
formal order denying or granting the
petition. In organized establishments,
however, no order or decision shall be
issued by the Med-arbiter during the
freedom period.
The reason for the last-mentioned rule is
that during the entire 60-day freedom
period, up to its last day, the door should
remain open for any union to file a PCE or
a motion for intervention.
3.8 Action on the Petition: Denial;
Grounds
The Med-arbiter, after due hearing may
dismiss the petition on any of the
following grounds:
(1) Not an LLO
(2) Twelve-month Bar
(3) Negotiation Bar or Deadlock Bar

(4) No 25% Support
(5) Contract Bar; PCE Filed Outside
the Freedom Period
The first three grounds are applicable to
establishments with or without a CBA; the
last two are pertinent only to an
establishment with a CBA about to expire
on its fifth year.
3.8a Ground 1: Petitioner not an LLO
Excepting Article 258, only a legitimate
labor organization (LLO) can file a petition
for certification election. Thus, if the
petitioning union is not listed in the
DOLE’s list of LLOs or it has no CBA
registered in the DOLE, these facts raise
doubt as to its being an LLO, and the
med-arbiter may dismiss the PCE.
But even if the union is listed as LLO or is
a party to a CBA, its legitimacy may still
be questioned in a separate and
independent petition for cancellation to
be heard and decided by the BLR Director
or the Regional Director himself.
Does the filing of a petition to cancel the
petitioner’s registration cause the
suspension or dismissal of the PCE? No,
the mere filing foes not. To serve as a
ground for dismissal of a PCE, the legal
personality of the petitioner should have
been revoked or cancelled “with finality.”
The filing or pendency of any inter/intra-union
dispute and other related labor relations
dispute is not a prejudicial question to any
petition for certification election and shall not
be a ground for the dismissal of a petition for
certification election or suspension of
proceedings for certification election.
The justification for this rule is that the
employees’ opportunity to choose a
bargaining agent can easily be blocked or
forestalled by an employer through the
simple expedience of questioning the
legitimacy of the petitioner union.
LABOR RELATIONS: Azucena Vol. II
Suspension of Proceedings: “Company
Union” Charge
A complaint for unfair labor practice may be
considered a prejudicial question in a
proceeding for certification election when it is
charged therein that one or more labor unions
participating in the election are being aided,
or are controlled, by the company or
employer. The reason is that the certification
election may lead to the selection of an
employer-dominated or company union as the
employees’ bargaining representative, and
when the court finds that said union is
employer-dominated in the unfair labor
practice case, the union selected would be
decertified and the whole election
proceedings would be rendered useless and
nugatory.
NONETHELESS, a certification election
cannot be stayed during the pendency of
unfair labor practice charge against a
union filed by the employer.
Similarly, certification election may be
ordered despite pendency of a petition to
cancel the union’s registration certificate
founded on alleged illegal strike by the
union.
3.8b Ground 2: The 12-month Bar
(certification year bar)
No petition for a CE may be filed within
one year from the date of a valid
certification, consent, or run-off election
or from the date of entry of a voluntary
recognition of the union by the employer.
Thus, if an election had been held but not
one of the unions won a PCE may be filed
again but only after 12 months. The law
does not want more than one election in a
12-month period. The same bar applies if
“No Union” won in the previous election.
On the other hand, if a union has won,
such union and the employer must within
12 months start negotiating a collective
agreement. If they fail to do so, they are
defeating the employees’ wish to have a
CBA; hence, the union or unions that lost
can petition again for a certification
election after 12 months from the last

election so as to replace the unproductive
bargaining agent which, perhaps, is
cavorting with the employer.
Ordinarily, a bargaining agent who failed to
secure a CBA within 12 months could be
suspected as a tool of management and
should deserve to be replaced. But if
circumstances show that the cause of not
having concluded a CBA was not the union’s
fault, such union should not be blamed, and a
CE should not be authorized even though no
CBA has been concluded despite passage of
twelve months. The situation takes the nature
of a “deadlock bar.”
The 12-month prohibition presupposes 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, the certification
year bar does not apply.
Neither does this bar apply if in fact there
was a failure of election because less
than majority of the CBU members voted.
In that case, another PCE may be filed
within six (6) months.
An election held less than a year after an
invalid election is not barred. Also not
barred would be a second election held
among a group of employees who had not
participated in the first election and had
not been given the opportunity to be
represented as part of the unit in the first
election.
A radical change in the size of a
bargaining unit within a short period of
time, raising a question as to the majority
status of the certified representative, may
also prompt the NLRB to entertain a
petition for an election during the
certification year.
The one-year rule does not apply to a unit
clarification petition filed during the
certification year.
LABOR RELATIONS: Azucena Vol. II
In a CE, the “No Union” choice won.
Within 12 months from that election the
employer voluntarily recognized a new
union and then concluded with it a CBA. Is
the 12-month bar violated? Are the
recognition and the CBA valid?
Excepted from the contract-bar rule are
certain types of contracts which do not foster
industrial stability, such as contracts where
the identity of the representative is in doubt.
Any stability derived from such contracts
must be subordinated to the employees'
freedom of choice because it does not
establish the kind of industrial peace
contemplated by the law.
In other words, the court strongly doubted
that the union voluntarily recognized by
the employer was really the employees’
choice. Most probably, it was a company
union.
3.8c Ground 3: Negotiation or Deadlock
Bar
Neither will a PCE prosper if the
negotiation is caught in a deadlock. The
deadlock does not erase that fact that
there is negotiation which is a barrier to
holding a certification election. The
parties should be allowed to try to resolve
their deadlock; replacing the negotiating
union will not help.
The “Deadlock Bar” Rule simply provides
that a petition for certification election
can only be entertained if there is no
pending bargaining deadlock submitted
to conciliation or arbitration or had
become the subject of a valid notice of
strike or lockout. The principal purpose is
to ensure stability in the relationship of
the workers and the management.
A "deadlock" is the counteraction of things
producing entire stoppage; there is a deadlock
when there is a complete blocking or
stoppage resulting from the action of equal
and opposed forces. The word is synonymous
with the word impasse, which "presupposes
reasonable effort at good faith bargaining
which, despite noble intentions, does not
conclude in agreement between the parties."

If the law proscribes the conduct of a
certification election when there is a
bargaining deadlock submitted to conciliation
or arbitration, with more reason should it not
be conducted if, despite attempts to bring an
employer to the negotiation table by the "no
reasonable effort in good faith" on the
employer certified bargaining agent, there
was to bargain collectively. It is only just and
equitable that the circumstances in this case
should be considered as similar in nature to a
"bargaining deadlock" when no certification
election could be held.
“Deadlock Bar” Rule, When Not
Applicable; Artificial Deadlock
The deadlock that bars a CE must be
genuine and not a drama. One indicator
that it is genuine is the submission of the
deadlock to a third-party conciliator or
arbitrator. Another is that the deadlock is
the subject of a valid notice of strike or
lockout. An artificial deadlock—a deadlock
prearranged or preserved by collusion of
the employer and the majority union—is
deception of the workers, hence, not a
barrier to a petition for a CE.
3.8d Ground 4: 25 Percent Support to PCE
Article 256 requires that the petition for a
CE in an organized establishment which
may be filed within the “freedom period”
should be supported by at least twenty-
five percent (25%) of the bargaining unit.
The support requirement is explained by
government policy to favor the self-
organization of workers. In a company still
unorganized the workers should find it
easy to organize, but one a union has
established itself as the employees’
representative, it should not be so easy
for another union to replace the
incumbent. Trying to so will disturb the
peace in the enterprise. To justify the
disturbance, it must appear that a
sizeable portion of the employees—at
least 25%—desires to have a new union.
Without this minimum support the
challenge to the incumbent looks like a
nuisance.
LABOR RELATIONS: Azucena Vol. II
The CBU, Not the Enterprise
If a company’s rank-and-file employees
are unionized but the supervisors are not,
does the supervisors’ petition need the
25% minimum support?
NO, because the company is considered
unorganized. The petition for CE involves
only the supervisors, not the rank-and-
file. Insofar as the supervisors are
concerned, the “establishment” is
considered ununionized. Hence the
requirement for 25% support to the
petition does not apply.
In other words, in deciding whether the
25% requirement is applicable or not, the
law considers the CBU involved, not the
whole enterprise. This, again, makes it
easy for workers to unionize, a basic
objective of labor relations law.
Election Despite Lack of 25 Percent
Support
Even in the situation where the 25% is
needed. This requirement may be
relaxed.
Compliance with the said requirement need
not even be established with absolute
certainty. The Court has consistently ruled
that "even conceding that the statutory
requirement of 30% of the labor force asking
for a certification election had not been
strictly complied with, respondent Director is
still empowered to order that it be held
precisely for the purpose of ascertaining
which of the, contending labor organizations
shall be the exclusive collective bargaining
agent."
Effect of Withdrawal of Signatories
If a petition for a certification election
lacks the 25% support because a sizeable
number of union members has withdrawn
their membership, may the petition still
be granted? Or must it be dismissed? A
critical fact to consider is whether the
withdrawal happened before or after the
filing of the petition. If it happened

before the filing, the withdrawal is
presumed voluntary and it does not
affect the propriety of the petition; if
after, the withdrawal is deemed
involuntary (perhaps pressured by the
employer) and it does not necessarily
cause the dismissal of the petition
The presumption would arise that the
withdrawal was procured through duress,
coercion or for valuable consideration. In
other words, the distinction must be that
withdrawals made before the filing of the
petition are presumed voluntary unless there
is convincing proof to the contrary, whereas
withdrawals made after the filing of the
petition are deemed involuntary.
The reason for such distinction is that if the
withdrawal or retraction is made before the
filing of the petition, the names of employees
supporting the petition are supposed to be
held secret to the opposite party. Logically,
any such withdrawal or retraction shows
voluntariness in the absence of proof to the
contrary. Moreover, it becomes apparent that
such employees had not given consent to the
filing of the petition, hence the subscription
requirement has not been met.
When the withdrawal or retraction is made
after the petition is filed, the employees who
are supporting the petition become known to
the opposite party since their names are
attached to the petition at the time of filing.
Therefore, it would not be unexpected that
the opposite party would use foul means for
the subject employees to withdrawal their
support.
3.8e Ground 5: PCE Filed Outside the
Freedom Period; the Contract Bar
This means that there exists in the
bargaining unit a CBA still in effect at the
time the PCE is filed. The ban spans a
period of five years, excluding, however,
the last sixty (60) days of the fifth (last)
year of the CBA.
The contract bar rule prohibits the filing of a
petition for certification election during the
existence of a collective bargaining
agreement except within the freedom period,
as it is called, when the said agreement is
about to expire. The purpose, obviously, is to
LABOR RELATIONS: Azucena Vol. II
ensure stability in the relationships of the
workers and the management by preventing
frequent modifications of any collective
bargaining agreement earlier entered into by
them in good faith and for the stipulated
original period.
The “freedom period” under Articles 253-
A and 256 is different from and ought not
to be mistaken for the other sixty-day
period mentioned in Art. 253. The latter
speaks of the right of the parties to
propose modifications to the existing
CBA, as an exception to the rule that the
CBA cannot be modified during its
lifetime. To clarify terms, the sixty days in
Art. 253 may be called “renegotiation
notice period” or simply “notice/proposal
period,” in contrast to the “freedom
period” under Arts. 253-A and 256.
The notice period is the last 60 days of
the second or third year of the
nonrepresentational provisions; the
freedom period is the last 60 days of the
CBA’s fifth year of the representational
aspect. The notice period is an economic
event involving the employer and the
bargaining union; the freedom period is a
political event involving only the unions
and the employees. The two periods, of
course, may coincide on the fifth year of
the CBA.
Registered CBA
To bar a certification election it is no
longer necessary that the CBA be
“certified”; it is enough that it is
registered in accordance with Art. 231.
Contract-Bar Rule Applied: Extended CBA
Under Deadlock
No petition for certification election may
be filed before the onset of the freedom
period not after such period. The old CBA
is extended until a new one is signed.
Section 6, Rule V, Book V of the implementing
Rules provides that a petition for certification
election or a motion for intervention can only
be entertained within sixty days prior to the
expiry date of an existing collective

bargaining agreement. Otherwise put, the rule
prohibits the filing of a petition for
certification election during the existence of a
collective bargaining agreement except within
the freedom period, as it is called, when the
said agreement is about to expire.
Article 253 of the Labor Code provides that:
"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." Despite the lapse of the formal
effectivity of the CBA the law still considers
the same as continuing in force and effect
until a new CBA shall have been validly
executed. Hence, the contract bar rule still
applies.
Contract-Bar Rule Applied: Unproved
Surreptitious Registration of CBA
Even if the existing CBA is registered
surreptitiously, as alleged by the
petitioner union, but no evidence is
presented proving the alleged
surreptitious registration, the petition for
CE cannot be granted. The contract-bar
rule applies. Whether or not the CBA was
indeed surreptitiously registered is a
factual matter whose determination is
outside the ambit of a petition for
certiorari.
Contract-Bar Rule Not Applied: (a)
Defective CBA
To be a bar to a certification election, the CBA
must be adequate in that it comprises
substantial terms and conditions of
employment.
(b) Referendum to Register on
Independent Union
This referendum is neither union disaffiliation
nor severance; it is not disallowed by law
even while a CBA exists.
(c) CBA Signed Before or Within Freedom
Period Despite Injunctive Order
A collective bargaining agreement which was
prematurely renewed is not a bar to the
LABOR RELATIONS: Azucena Vol. II
holding of a certification election. Such
indecent haste in renewing the CBA despite
an order enjoining them from doing so is
designed to frustrate the constitutional right
of the employees to self-organization.
Moreover, We cannot countenance the
actuation of the petitioner and the
management in this case which is not
conducive to industrial peace.
Validity of CBA Signed During
Representation Dispute
It is true that the contract-bar rule does not
apply during the “freedom period”; i.e., within
that period a petition for CE may be
entertained. But it is equally true that the
petition for CE does not bar the employer and
the incumbent union from renegotiating and
renewing the expiring CBA. In other words, a
CBA may be renegotiated before, during, or
after the 60-day freedom period. But if during
such period a PCE is filed, the Med-arbiter can
order the suspension of the renegotiation until
the representation proceedings finally end.
The law is attempting a balancing feat. By
allowing a PCE during the freedom period
the law preserves democratic between
unions, and, in the same breadth, by
allowing CBA renegotiation during the
same freedom period, the law safeguards
the opportunity to possibly upgrade the
employees’ employment condition.
The question may be asked: What would
be the effect on the renegotiated CBA if a
union other than the one that executed it
should win the CE? In a pertinent case, it
was held that the union thus certified
would have to respect the contract, but
that it may bargain with the management
to shorten the life of the contract if it is
too long.
When a collective bargaining agreement is
entered into at a time when the petition for
certification election had already been filed by
a union and was then pending resolution, the
said CBA cannot be deemed permanent,
precluding the commencement of
negotiations by another union with the
management. In the meantime however, so
as not to deprive the workers of the benefits
of the said agreement, it shall be recognized
and given effect on a temporary basis, subject

to the results of the certification election. The
agreement may be continued in force if the
union is certified as the exclusive bargaining
representative of the workers or may be
rejected and replaced in the event that the
rival emerges as the winner.
But in a 2005 decision the Court took one
step further. It invalidated the hasty
recognition of a union and the signing of a
CBA with that union where such acts were
done while there was a pending petition
for certification election by another union.
Basic to the contract bar rule is the
proposition that the delay of the right to
select representatives can be justified only
where stability is deemed paramount.
Excepted from the contract bar rule are
certain types of contracts which do not foster
industrial stability, such as contracts where
the Identity of the representative is in doubt.
Any stability derived from such contracts
must be subordinated to the employees'
freedom of choice because it does not
establish the type of industrial peace
contemplated by the law.
A CBA automatically renewed usually
operates as a bar to a certification election.
But it is not a bar if the employer has served
notice that it will terminate the contract if and
when the union no longer represents the
majority of the employees.
3.9 Invalid Grounds for the
Denial/Suspension of the Petition
Questions pertaining to the validity of
petitioning union’s certificate of
registration, or its legal personality as a
labor organization, or the validity of
registration and execution of collective
bargaining agreements shall be heard
and resolved by the Regional Director in
an independent petition for cancellation
of the union’s registration. They are not
reasons for the Med-arbiter to suspend
hearing the PCE. However, the Med-
arbiter himself may rule on the objection
if the pending union is not found in the
Department’s roster of legitimate labor
organizations or an alleged collective
bargaining agreement is unregistered
with the Department.
LABOR RELATIONS: Azucena Vol. II
3.9a Authority to Decide Existence of
Employer-Employee Relationship; Med-
Arbiter’s Order Appealable to Secretary
Does the Med-arbiter or the Secretary of
Labor and Employment have the
authority to determine the existence of an
employer-employee relationship between
the parties in a petition for certification
election?
All issues pertaining to the existence of
employer-employee relationship or to
eligibility to union membership shall be
resolved in the order or decision ranting
or denying the petition for certification
election. In other words, those issues do
not stall the PCE and they are not
grounds for dismissing a PCE.
It is absurd to suggest that the med-arbiter
and Secretary of Labor cannot make their own
independent finding as to the sentence of
such relationship and must have to rely and
wait for such a determination by the labor
arbiter or NLRC in a separate proceeding. For
then, given a situation where there is no
separate complaint filed with the labor
arbiter, the med-arbiter and/or the Secretary
of Labor can never decide a certification
election case or any labor-management
dispute properly brought before them as they
have no authority to determine the existence
of an employer-employee relationship. Such a
proposition is, to say the least, anomalous.
Once there is a determination as to the
existence of such a relationship, the med-
arbiter can then decide the certification
election case. 9 As the authority to determine
the employer-employee relationship is
necessary and indispensable in the exercise of
jurisdiction by the med-arbiter, his finding
thereon may only be reviewed and reversed
by the Secretary of Labor who exercises
appellate jurisdiction under Article 259 of the
Labor Code, as amended.
It is apparent that incidental to the power
of the med-arbiter to hear and decide
representation cases is the power to
determine who the eligible voters are. In
so doing, it is axiomatic that the med-

arbiter should determine the legality of
the employees' membership in the union.
3.10 Action on the Petition: Is the
Employer a Bystander? See Art. 258-A
3.10a Employer a Bystander; Cannot
Oppose PCE
3.11 Action on the Petition: Approval
Section 13. Order/Decision on the petition. -
Within ten (10) days from the date of the last
hearing, the Med-Arbiter shall issue a formal
order granting the petition or a decision
denying the same. In organized
establishments, however, no order or decision
shall be issued by the Med-Arbiter during the
freedom period.
The order granting the conduct of a
certification election shall state the following:
(a) the name of the employer or
establishment;
(b) the description of the bargaining unit;
(c) a statement that none of the grounds for
dismissal enumerated in the succeeding
paragraph exists;
(d) the names of contending labor unions
which shall appear as follows: petitioner
union/s in the order in which their petitions
were filed, forced intervenor, and no union;
and
(e) a directive upon the employer and the
contending union(s) to submit within ten (10)
days from receipt of the order, the certified
list of employees in the bargaining unit, or
where necessary, the payrolls covering the
members of the bargaining unit for the last
three (3) months prior to the issuance of the
order
3.12 Appeal of Order Granting or Denying
Petition
Section 17. Appeal. - The order granting the
conduct of a certification election in an
unorganized establishment shall not be
subject to appeal. Any issue arising therefrom
may be raised by means of protest on the
LABOR RELATIONS: Azucena Vol. II
conduct and results of the certification
election.
The order granting the conduct of a
certification election in an organized
establishment and the decision dismissing or
denying the petition, whether in an organized
or unorganized establishment, may be
appealed to the Office of the Secretary within
ten (10) days from receipt thereof.
The appeal shall be verified under oath and
shall consist of a memorandum of appeal,
specifically stating the grounds relied upon by
the appellant with the supporting arguments
and evidence.
In short, denial of any petition for CE is
always appealable, but never appealable
is the approval of any PCE in an
enterprise still ununionized. The reason is
sound and simple: the law wants to
unionized the ununionized.
Section 18. Where to file appeal. - The
memorandum of appeal shall be filed in the
Regional Office where the petition originated,
copy furnished the contending unions and the
employer, as the case may be. Within twenty-
four (24) hours from receipt of the appeal, the
Regional Director shall cause the
transmittal thereof together with the entire
records of the case to the Office of the
Secretary.
Section 19. Finality of Order/Decision. - Where
no appeal is filed within the ten-day period,
the Med-Arbiter shall enter the finality of the
order/decision in the records of the case and
cause the transmittal of the records of the
petition to the Regional Director.
Section 20. Period to Reply. - A reply to the
appeal may be filed by any party to the
petition within ten (10) days from receipt of
the memorandum of appeal. The reply shall
be filed directly with the Office of the
Secretary.
Section 21. Decision of the Secretary. - The
Secretary shall have fifteen (15) days from
receipt of the entire records of the petition
within which to decide the appeal. The filing
of the memorandum of appeal from the order
or decision of the Med-Arbiter stays the
holding of any certification election.

The decision of the Secretary shall become
final and executory after ten (10) days from
receipt thereof by the parties. No motion for
reconsideration of the decision shall be
entertained.
Section 22. Transmittal of records to the
Regional Office. - Within forty-eight (48) hours
from notice of receipt of decision by the
parties and finality of the decision, the entire
records of the case shall be remanded to the
Regional Office of origin for implementation.
Implementation of the decision shall not be
stayed unless restrained by the appropriate
court.
May a certification election be held legally
upon petition of Union B while a petition
for CE by Union A is pending on appeal at
the Office of the Secretary? No, the
appeal should first be resolved.
3.13 Conducting the CE
3.13a Pre-election Conference
Section 1. Raffle of the case. - Within twenty-
four (24) hours from receipt of the notice of
entry of final judgment granting the conduct
of a certification election, the Regional
Director shall cause the raffle of the case to
an Election Officer who shall have control of
the pre-election conference and election
proceedings.
Section 2. Pre-election conference. - Within
twenty-four (24) hours from receipt of the
assignment for the conduct of a certification
election, the Election Officer shall cause the
issuance of notice of preelection conference
upon the contending unions and the
employer, which shall be scheduled within ten
(10) days from receipt of the assignment.
The pre-election conference shall set the
mechanics for the election and shall
determine, among others, the following:
(a) date, time and place of the election, which
shall not be later than forty-five (45) days
from the date of the first pre-election
conference, and shall be on a regular working
day and within the employer's premises,
unless circumstances require otherwise;
(b) list of eligible and challenged voters;
LABOR RELATIONS: Azucena Vol. II
(c) number and location of polling places or
booths and the number of ballots to be
prepared with appropriate translations, if
necessary;
(d) name of watchers or representatives and
their alternates for each of the parties during
election;
(e) mechanics and guidelines of the election.
Section 3. Waiver of right to be heard. - Failure
of any party to appear during the pre-election
conference despite notice shall be considered
as a waiver to be present and to question or
object to any of the agreements reached in
said pre-election conference. Nothing herein,
however, shall deprive the non-appearing
party or the employer of its right to be
furnished notices of subsequent pre-election
conferences and to attend the same.
Section 4. Minutes of pre-election conference.
- The Election Officer shall keep the minutes
of matters raised and agreed upon during the
pre-election conference. The parties shall
acknowledge the completeness and
correctness of the entries in the minutes by
affixing their signatures thereon. Where any
of the parties refuse to sign the minutes, the
Election Officer shall note such fact in the
minutes, including the reason for refusal to
sign the same. In all cases, the parties shall
be furnished a copy of the minutes.
The pre-election conference shall be
completed within thirty (30) days from the
date of the first hearing.
Section 6. Posting of Notices. - The Election
Officer shall cause the posting of notice of
election at least ten (10) days before the
actual date of the election in two (2) most
conspicuous places in the company premises.
The notice shall contain:
(a) the date and time of the election;
(b) names of all contending unions;
(c) the description of the bargaining unit and
the list of eligible and challenged voters.
The posting of the notice of election, the
information required to be included therein
and the duration of posting cannot be waived
by the contending unions or the employer.
3.13b Conducting the CE: The Voters

One of the matters the pre-election
conference threshes out is the list of
voters.
Section 5. Qualification of voters; inclusion-
exclusion. - All employees who are members
of the appropriate bargaining unit sought to
be represented by the petitioner at the time
of the issuance of the order granting the
conduct of a certification election shall be
eligible to vote.
The list of voters should be based on the
employer-certified list of employees in the
CBU or payrolls. If the employer does not
submit the list or payrolls, the union may
submit its own list.
Even the list of employees submitted to
the SSS may be used as basis to comprise
the list of voters for the CE. “It should
ideally be the payroll which should have
been used for the purpose of the election.
However, the unjustified refusal of a
company to submit the payroll in its
custody, despite efforts to make it
produce it, compelled resort to the SSS
list as the next best source of information.
After all, the SSS list is a public record
whose regularity is presumed.”
Only the employees who are directly
employed by the employer and working
along the activities to which the employer
is engaged and linked by employer-
employee relationship are qualified to
participate in the certification election,
“irrespective of the period of their
employment.”
Employees of an independent contractor
who undertakes to do a piece of work for
his account and responsibility, with
minimum interference on the part of the
other contracting party (indirect
employer), not being laborers or
employees of the latter, are not qualified
to participate therein.
In case of disagreement over the voters' list
or over the eligibility of voters, all contested
voters shall be allowed to vote. But their
votes shall be segregated and sealed in
LABOR RELATIONS: Azucena Vol. II
individual envelopes in accordance with
Sections 10 and 11 of this Rule.
Dismissed Employee
An employee who has been dismissed
from work but has contested the legality
of the dismissal in a forum of appropriate
jurisdiction at the time of the issuance of
the order for the conduct of a certification
election shall be considered a qualified
voter, unless his/her dismissal was
declared final judgment at the time of the
conduct of the certification election.
In Philippine jurisprudence it is now 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. 10
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
practice was filed, the employees concerned
could still qualify to vote in the elections.
Probationary Employee
In a certification election all rank-and-file
employees in the appropriate bargaining unit
are entitled to vote. This principle is clearly
stated in Art. 255 of the Labor Code which
states that the "labor organization designated
or selected by the majority of the employees
in an appropriate bargaining unit shall be the
exclusive representative of the employees in
such unit for the purpose of collective
bargaining."
Collective bargaining covers all aspects of the
employment relation and the resultant CBA
negotiated by the certified union binds all
employees in the bargaining unit. Hence, all
rank-and-file employees, probationary or
permanent, have a substantial interest in the
selection of the bargaining representative.
The Code makes no distinction as to their
employment status as basis for eligibility in
supporting the petition for certification
election. The law refers to "all" the employees
in the bargaining unit. All they need to be
eligible to support the petition is to belong to
the "bargaining unit.".
INK Believers May Vote
 LABOR RELATIONS: Azucena Vol. II
In the CE all members of the unit, religious grounds, from joining or forming any
whether union members or not, have the labor organization" — and "hence, not one of
right to vote. Union membership is not a the unions which vied for certification as sole
prerequisite. If majority of the unit and exclusive bargaining representative," is
specious. Neither law, administrative rule nor
members do not want a union, as
jurisprudence requires that only employees
expressed in the CE, such majority affiliated with any labor organization may take
decision must be respected. part in a certification election. On the
contrary, the plainly discernible intendment of
Logically, the right NOT to join, affiliate with, the law is to grant the right to vote to all bona
or assist any union, and to disaffiliate or fide employees in the bargaining unit,
resign from a labor organization, is subsumed whether they are members of a labor
in the right to join, affiliate with, or assist any organization or not.
union, and to maintain membership therein.
The right to form or join a labor organization 3.13c Conducting the CE: The Voting
necessarily includes the right to refuse or
refrain from exercising said right. It is self-
Section 7. Secrecy and sanctity of the ballot. -
evident that just as no one should be denied
To ensure secrecy of the ballot, the Election
the exercise of a right granted by law, so also,
Officer, together with the authorized
no one should be compelled to exercise such
representatives of the contending unions and
a conferred right. The fact that a person has
the employer, shall before the start of the
opted to acquire membership in a labor union
actual voting, inspect the polling place, the
does not preclude his subsequently opting to
ballot boxes and the polling booths.
renounce such membership.
Section 8. Preparation of ballots. - The
The purpose of a certification election is
Election Officer shall prepare the ballots in
precisely the ascertainment of the wishes of
English and Filipino or the local dialect,
the majority of the employees in the
corresponding to the number of voters and a
appropriate bargaining unit: to be or not to be
reasonable number of extra ballots. All ballots
represented by a labor organization, and in
shall be signed at the back by the Election
the affirmative case, by which particular labor
Officer and authorized representative of each
organization. If the results of the election
of the contending unions and employer.
should disclose that the majority of the
Failure or refusal to sign the ballots shall be
workers do not wish to be represented by any
considered a waiver thereof and the Election
union, then their wishes must be respected,
Officer shall enter the fact of such refusal or
and no union may properly be certified as the
failure in the records of the case as well as the
exclusive representative of the workers in the
reason for the refusal or failure to sign.
bargaining unit in dealing with the employer
regarding wages, hours and other terms and
Section 9. Marking of votes. - The voter must
conditions of employment. The minority
put a cross () or check () mark in the
employees — who wish to have a union
square opposite the name of the union of his
represent them in collective bargaining — can
choice or "No Union" if he/she does not want
do nothing but wait for another suitable
to be represented by any union.
occasion to petition for a certification election
and hope that the results will be different.
If a ballot is torn, defaced or left unfilled in
They may not and should not be permitted,
such a manner as to create doubt or
however, to impose their will on the majority
confusion or to identify the voter, it shall be
— who do not desire to have a union certified
considered spoiled. If the voter inadvertently
as the exclusive workers' benefit in the
spoils a ballot, he/she shall return it to the
bargaining unit — upon the plea that they, the
Election Officer who shall destroy it and give
minority workers, are being denied the right
him/her another ballot.
of self-organization and collective bargaining.
Section 10. Challenging of votes. - An
The respondents' argument that the
authorized representative of any of the
petitioners are disqualified to vote because
contending unions and employer may
they "are not constituted into a duly
challenge a vote before it is deposited in the
organized labor union" — "but members of
ballot box only on any of the following
the INK which prohibits its followers, on
grounds:

(a) that there is no employer-employee
relationship between the voter and the
company;
(b) that the voter is not a member of the
appropriate bargaining unit which petitioner
seeks to represent.
Section 11. Procedure in the challenge of
votes. - When a vote is properly challenged,
the Election Officer shall place the ballot in an
envelope which shall be sealed in the
presence of the voter and the representatives
of the contending unions and employer. The
Election Officer shall indicate on the envelope
the voter's name, the union or employer
challenging the voter, and the ground for the
challenge. The sealed envelope shall then be
signed by the Election Officer and the
representatives of the contending unions and
employer. The Election Officer shall note all
challenges in the minutes of the election and
shall be responsible for consolidating all
envelopes containing the challenged votes.
The envelopes shall be opened and the
question of eligibility shall be passed upon
only if the number of segregated voters will
materially alter the results of the election.
Section 12. On-the-spot questions. - The
Election Officer shall rule on any question
relating to and raised during the conduct of
the election. In no case, however, shall the
election officer rule on any of the grounds for
challenge specified in the immediately
preceding section.
Section 13. Protest; when perfected. - Any
party-in-interest may file a protest based on
the conduct or mechanics of the election.
Such protests shall be recorded in the minutes
of the election proceedings. Protests not so
raised are deemed waived.
The protesting party must formalize its
protest with the Med-Arbiter, with specific
grounds, arguments and evidence, within five
(5) days after the close of the election
proceedings. If not recorded in the minutes
and formalized within the prescribed period,
the protest shall be deemed dropped.
Section 15. Conduct of election and canvass
of votes. - The election precincts shall open
and close on the date and time agreed upon
during the pre-election conference. The
opening and canvass shall proceed
immediately after the precincts have closed.
LABOR RELATIONS: Azucena Vol. II
Failure of any party or the employer or
his/her/their representative to appear during
the election proceedings shall be considered a
waiver to be present and to question the
conduct thereof.
ULP in Relation to Election
The employer deserves our strongest
condemnation for ignoring the petitioners'
request for permission for some time out to
attend to the hearing of their petition before
the med-arbiter. It is not only an act of
arrogance, but a brazen interference as well
with the employees right to self-organization,
contrary to the prohibition of the Labor Code
against unfair labor practices.
It is unfair labor practice for the company to
suspended the workers on the ground of
"abandonment of work" on the day on which
the pre-election conference had been
scheduled. It is the employee’s right to hold a
certification election, the exercise of which is
their sole prerogative.
A company commits unfair labor practice
where it issued suspension and termination
orders while the employees are in the midst of
a certification election preliminary to a labor
management conference "to normalize
employer-employee relations."
3.13d Conducting the CE: Canvassing of
Votes
The voting shall close on the date and
time agreed upon in the pre-election
conference. Canvassing shall immediately
follow.
Section 14. Canvassing of votes. - The votes
shall be counted and tabulated by the
Election Officer in the presence of the
representatives of the contending unions.
Upon completion of the canvass, the Election
Officer shall give each representative a copy
of the minutes of the election proceedings
and results of the election. The ballots and the
tally sheets shall be sealed in an envelope
and signed by the Election Officer and the
representatives of the contending unions and
transmitted to the Med-Arbiter, together with
the minutes and results of the election, within
twenty-four (24) hours from the completion of
the canvass.

Where the election is conducted in more than
one region, consolidation of results shall be
made within fifteen (15) days from the
conduct thereof.
3.13e Who Wins in CE: Proclamation and
Certification
Section 20. Proclamation and certification of
the result of the election. - Within twenty-four
(24) hours from final canvass of votes, there
being a valid election, the Election Officer
shall transmit the records of the case to the
Med-Arbiter who shall, within the same period
from receipt of the minutes and results of
election, issue an order proclaiming the
results of the election and certifying the union
which obtained a majority of the valid votes
cast as the sole and exclusive bargaining
agent in the subject bargaining unit, under
any of the following conditions:
(a) no protest was filed or, even if one was
filed, the same was not perfected within the
five-day period for perfection of the protest;
(b) no challenge or eligibility issue was raised
or, even if one was raised, the resolution of
the same will not materially change the
results of the elections.
The winning union shall have the rights,
privileges and obligations of a duly certified
collective bargaining agent from the time the
certification is issued.
Where majority of the valid votes cast results
in "No Union" obtaining the majority, the Med-
Arbiter shall declare such fact in the order.
Section 16. Certification of Collective
Bargaining Agent. - The union which obtained
a majority of the valid votes cast shall be
certified as the sole and exclusive bargaining
agent of all the employees in the appropriate
bargaining unit within five (5) days from the
day of the election, provided no protest is
recorded in the minutes of the election.
3,13f Failure of Election: Motion for a
Remedial Election
Section 17. Failure of election. - Where the
number of votes cast in a certification or
consent election is less than the majority of
the number of eligible voters and there are no
material challenged votes, the Election Officer
LABOR RELATIONS: Azucena Vol. II
shall declare a failure of election in the
minutes of the election proceedings.
Section 18. Effect of failure of election. - A
failure of election shall not bar the filing of a
motion for the immediate holding of another
certification or consent election within six (6)
months from date of declaration of failure of
election.
Section 19. Action on the motion. - Within
twenty-four (24) hours from receipt of the
motion, the Election Officer shall immediately
schedule the conduct of another certification
or consent election within fifteen (15) days
from receipt of the motion and cause the
posting of the notice of certification election
at least ten (10) days prior to the scheduled
date of election in two (2) most conspicuous
places in the establishment. The same
guidelines and list of voters shall be used in
the election.
3.13g Run-off Election
Section 1. When proper. - When an election
which provides for three (3) or more choices
results in none of the contending unions
receiving a majority of the valid votes cast,
and there are no objections or challenges
which if sustained can materially alter the
results, the Election Officer shall motu propio
conduct a run-off election within ten (10) days
from the close of the election proceedings
between the labor unions receiving the two
highest number of votes; provided, that the
total number of votes for all contending
unions is at least fifty (50%) percent of the
number of votes cast.
"No Union" shall not be a choice in the run-off
election.
Notice of run-off elections shall be posted by
the Election Officer at least five (5) days
before the actual date of run-off election.
Section 2. Qualification of voters. - The same
voters' list used in the certification election
shall be used in the run-off election. The
ballots in the run-off election shall provide as
choices the unions receiving the highest and
second highest number of the votes cast. The
labor union receiving the greater number of
valid votes cast shall be certified as the
winner, subject to Section 20, Rule IX.

To summarize, a run-off election is proper
if five concurrent conditions exist,
namely:
1. a valid election took place because
majority of the CBU members voted.
2. the election presented a least three
choices, e.g., Union One, Union Two, and
No Union, meaning there are at least two
union “candidates.”
3. not one of the unions obtained the
majority ofthe valid votes.
4. the total number of votes for all the
unions is at least 50% of the valid votes
cast.
5. there is no unresolved challenge of
voter or election protest.
3.14 Appeal to Secretary as to Election
Result—See D.O. No. 40-E-03 (dated 30
November 2005)
3.15 Election Irregularities, Protest by
Employer
The manner in which the election was held
could make the difference between industrial
strife and industrial harmony in the company.
What an employer is prohibited from doing is
to interfere with the conduct of the
certification election for the purpose of
influencing its outcome. But certainly an
employer has an abiding interest in seeing to
it that the election is clean, peaceful, orderly
and credible.
4. THIRD METHOD: CONSENT
ELECTION
Like a CE, its purpose is the same,
namely, to find out which union should
serve as the bargaining agent. The
difference is that a certification is ordered
by the Department while a consent
election is voluntarily agreed upon by the
parties, with or without the intervention
of the Department.
Two or more unions are involved in a
consent election. And like certification
election, consent election may take place
LABOR RELATIONS: Azucena Vol. II
in an unorganized or organized
establishment.
4.1 Effect of Consent Election
Section 23. Effects of consent election. -
Where a petition for certification election had
been filed, and upon the intercession of the
Med-Arbiter, the parties agree to hold a
consent election, the results thereof shall
constitute a bar to the holding of a
certification election for one (1) year from the
holding of such consent election. Where an
appeal has been filed from the results of the
consent election, the running of the one-year
period shall be suspended until the decision
on appeal has become final and executory.
Where no petition for certification election
was filed but the parties themselves agreed to
hold a consent election with the intercession
of the Regional Office, the results thereof shall
constitute a bar to another petition for
certification election.
5. THE WINNER AS SOLE AND
EXCLUSIVE REPRESENTATIVE
Collective bargaining contemplates the
representation of the collective
bargaining interests of all the employees
in the particular bargaining unit by a
properly selected bargaining agent. The
selection of a bargaining agent by a
majority of such employees, under
express provisions of the Act, constitutes
the agent as the representative of all the
employees within the particular
bargaining unit. The Act provides that
such bargaining agent shall be the
“exclusive” representative of the
employees. The term “exclusive” was
interpreted under the original Act to
mean that the employer must treat with
the representative to the exclusion of all
other claiming bargaining agents.
5.1 Exclusive Bargaining Agent
Represents Even the Minority Union
On the part of the union that won in the
certification election, it becomes, and is
certified as, the exclusive bargaining agent of
all the workers in the bargaining unit. It

represents even the members of the minority
union.
However, although the union has every right
to represent its members in the negotiation
regarding the terms and conditions of their
employment, it cannot negate their wishes on
matters which are purely personal and
individual to them.
5.2 Protection and Capacity of the Loser;
the Duty of Fair Representation
What if the majority union neglects the
interest of the employees in the minority
union? The majority union in such case
will be violating its duty of fair
representation. This duty obligates the
majority union to serve the interest of all
members of the whole bargaining unit
without hostility or discrimination.
What can the minority do? The minority
union, although a loser in the election,
does not lose its character as a lawful
labor organization entitled to protection
under Article 246 which makes it unlawful
for any person to abridge the right to self-
organization. (see also Article 255)
May a minority union charge the
employer with ULP? Yes. It can file an
individual or group complaint for ULP. It
can even engage in peaceful concerted
activity. But it cannot resort to work
stoppage or strike because strike is
reserved, under Article 263, to an
exclusive bargaining representative (i.e.,
the majority union), if there is one.
5.3 Is the Bargaining Union a Majority
Union?
The minority union’s entitlement to
protection gains greater force and respect
if it is remembered that the bargaining
union does not always comprise the
numerical majority in the bargaining unit.
Article 256 requires, for a union to win a
CE, only a majority of the valid votes cast.
The majority of the valid votes may be
lesser that the majority of the employees
in the bargaining unit.
LABOR RELATIONS: Azucena Vol. II
Article 256 therefore does not support
Article 255; in fact, they are incongruent.
Whereas Article 255 requires selection by
majority of the unit members, Article 256
requires only majority of the valid votes
cast. The result may be a bargaining
agent that does not carry the mandate of
the majority of the employees.
5.4 May the Bargaining Agent Represent
Retired Employees?
In pursuing their claim for retirement
benefits under the CBA, the claimant
retirees are represented by the union of
which they were former members.
________
Title VII-A
GRIEVANCE MACHINERY
AND VOLUNTARY ARBITRATION
Article. 260. Grievance machinery and
voluntary arbitration. - The parties to a
Collective Bargaining Agreement shall
include therein provisions that will ensure
the mutual observance of its terms and
conditions. They shall establish a
machinery for the adjustment and
resolution of grievances arising from the
interpretation or implementation of their
Collective Bargaining Agreement and
those arising from the interpretation or
enforcement of company personnel
policies.
All grievances submitted to the grievance
machinery which are not settled within
seven (7) calendar days from the date of
its submission shall automatically be
referred to voluntary arbitration
prescribed in the Collective Bargaining
Agreement.
For this purpose, parties to a Collective
Bargaining Agreement shall name and
designate in advance a Voluntary
Arbitrator or panel of Voluntary
Arbitrators, or include in the agreement a
procedure for the selection of such
Voluntary Arbitrator or panel of Voluntary
Arbitrators, preferably from the listing of

qualified Voluntary Arbitrators duly
accredited by the Board. In case the
parties fail to select a Voluntary Arbitrator
or panel of Voluntary Arbitrators, the
Board shall designate the Voluntary
Arbitrator or panel of Voluntary
Arbitrators, as may be necessary,
pursuant to the selection procedure
agreed upon in the Collective Bargaining
Agreement, which shall act with the same
force and effect as if the Arbitrator or
panel of Arbitrators has been selected by
the parties as described above.
________
1. CONTRACT ADMINISTRATION AS
PART OF THE DUTY TO BARGAIN
Collective bargaining is not an end in
itself. It is a means to an end, which is the
making of collective agreements
stabilizing employment relations for a
period of time with results advantageous
both to the worker and the employer.
However narrowly it may canalize its
course, the execution of a contract does
not complete collective bargaining. Piece
rates and work assignments frequently
require day-to-day adjustments; periodic
decisions must be made concerning such
matters as shop rules, job content, and
the letting of subcontracts. There will be
ambiguities in the agreement to be
clarified and gaps be filled. In other
words, the duty to bargain continues into
the contract administration stage.
In effect, therefore, “contract negotiations
are the legislative process of collective
bargaining; the day-to-day working out of
plant problems is its administrative or
judicial aspects.
Strengthening the binding force of the
CBA, Art. 248 considers as unfair labor
practice any act that violates an existing
collective bargaining agreement. But this
law must be related to Art, 261 which
limits that kind of ULP to “gross
violations” only.
LABOR RELATIONS: Azucena Vol. II
2. C.B.A., LAW BETWEEN THE
PARTIES
The provisions of the collective bargaining
agreement must be respected since its terms
and conditions "constitute the law between
the parties." Those who are entitled to its
benefits can invoke its provisions. In the event
that an obligation therein imposed is not
fulfilled, the aggrieved party has the right to
go to court for redress.
Unilaterally formulated rules and policy
can neither contradict nor undermine the
CBA provisions.
Since the collective bargaining agreement is
considered the law between the parties,
containing as it does the agreed terms of
employment of the employee with his
employer, unilaterally imposed orders or rules
qualifying the terms contained in the
agreement are subordinate to the CBA. At
most, such rules, such as the rules on trips
abroad formulated by petitioner [school] a few
months before Legaspi’s application, are
merely suppletory and can neither contradict
nor undermine the terms found in the CBA.
2.1 Construing the Contract
The CBA being a contract, the rules embodied
in the Civil Code on interpretation of contracts
should govern. The intent of the parties
should be ascertained by considering relevant
provisions of the said CBA. The intention of
the parties is primordial; if the terms of the
contract are clear, the literal meaning of the
stipulations shall control, but if the words
appear to be contrary to the evident intention
of the parties, the latter shall prevail over the
former.
Any doubts or ambiguity in the contract
between management and the union
members should be resolved in the light of
Article 1702 of the Civil Code that: In case of
doubt, all labor legislation and all labor
contracts shall be construed in favor of the
safety and decent living for the laborer. This is
also in consonance with the principle
enunciated in the Labor Code that all doubts
should be resolved in favor of the worker.
But contracts which are not ambiguous are to
be interpreted according to their literal

meaning and should not be interpreted
beyond their obvious intendment.
Compliance with a CBA is mandated by the
expressed policy to give protection to labor. In
the same vein, CBA provisions should be
"construed liberally rather than narrowly and
technically, and the courts must place a
practical and realistic construction upon it,
giving due consideration to the context in
which it is negotiated and purpose which it is
intended to serve." This is founded on the
dictum that a CBA is not an ordinary contract
but one impressed with public interest. It goes
without saying, however, that only provisions
embodied in the CBA should be so interpreted
and complied with.
2.2 Proposal Contained in Minutes but Not
in the CBA Itself
A proposal mentioned in the negotiation
but not embodied in the collective
bargaining contract itself is not part of the
CBA. It cannot serve as basis of a charge
of violating the CBA or of bargaining in
bad faith.
2.3 “Zipper Clause”
A device to forestall negotiation proposals
after the CBA has been signed is the
“zipper clause.” It is a stipulation in a CBA
indicating that issues that could have
been negotiated but not contained in the
CBA cannot be raised for negotiation
when the CBA is already in effect. In
short, the CBA is a complete agreement;
negotiation is closed, as a zipper does.
3. LAW DEEMED WRITTEN IN
CONTRACT
The principle is thus well-settled that an
existing law enters into and forms part of
a valid contract without the need for the
parties expressly making reference to it.
Only thus could its validity insofar as
some of its provisions are concerned be
assured.
4. BINDING EFFECT OF AGREEMENT
LABOR RELATIONS: Azucena Vol. II
A collective bargaining agreement entered
into by officers of a union, as agent of the
members, and an employer, gives rise to valid
enforceable contractual relations, against the
individual union members in matters that
affect them peculiarly, and against the union
in matters that affect the entire membership
or large classes of its members," and "a union
member who is employed under an
agreement between the union and his
employer is bound by the provisions thereof,
since it is a joint and several contract of the
members of the union entered into by the
union as their agent."
4.1 Persons Entitled to Benefits
It is true that whatever benefits the majority
union obtains from the employer accrue to its
members as well as to non-members. For 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 non-members
would be to discriminate against them.
It is even conceded that a laborer can claim
benefits from a collective bargaining
agreement entered into between the
company and the union of which he is a
member at the time of the conclusion of the
agreement, even after he has resigned from
said union.
4.2 Managers Not Entitled to CBA
Benefits; Exception
Managers, who are not allowed to
unionize to bargain collectively with the
employer, cannot claim the benefits
contained in the CBA negotiated by the
workers under them. They cannot obtain
indirectly what they cannot do directly.
Accordingly, managerial employees cannot, in
the absence of an agreement to the contrary,
be allowed to share in the concessions
obtained by the labor union through collective
negotiation. Otherwise, they would be
exposed to the temptation of colluding with
the union during the negotiations to the
detriment of the employer.
However, there is nothing to prevent the
employer from granting benefits to
managerial employees equal to or higher than
those afforded to union members. There can

be no conflict of interest where the employer
himself voluntarily agrees to grant such
benefits to managerial employees. In the case
at bar, at the beginning of petitioner's
employment, he was told that those who are
not covered by the CBA would nevertheless
be entitled to benefits which would be, if not
higher, at least equivalent to those provided
in the CBA. That private respondents made
such a promise to petitioner is not denied by
them.
4.3 Effect of Collective Agreement on the
Individual Contracts of Employment
When a collective agreement is concluded
between a labor union and an employer,
the members of the labor union are
precluded from entering into individual
contracts of employment. But if the
agreement merely fixes wages and
working conditions, the employer may
enter into particular contracts of
employment with his employees even
though both are bound by the general
contract as to wages and working
conditions.
5. ENFORCEABILITY AGAINST
TRANSFEREE OF ENTERPRISE
5.1 Purchase of Assets
The rule is that unless expressly assumed,
labor contracts such as employment contracts
and collective bargaining agreements are not
enforceable against a transferee of an
enterprise, labor contracts being in personam,
thus binding only between the parties. A labor
contract merely creates an action in
personally and does not create any real right
which should be respected by third parties.
This conclusion draws its force from the right
of an employer to select his employees and to
decide when to engage them as protected
under our Constitution, and the same can only
be restricted by law through the exercise of
the police power.
As a general rule, there is no law requiring a
bona fide purchaser of assets of an on-going
concern to absorb in its employ the
employees of the latter.
5.2 Exceptions
LABOR RELATIONS: Azucena Vol. II
Although the purchaser of the assets or
enterprise is not legally bound to absorb in its
employ the employers of the seller of such
assets or enterprise, the parties are liable to
the employees if the transaction between the
parties is colored or clothed with bad faith.
5.3 Merger and Consolidation
Merger takes place when two or more
corporations join into a single corporation
which is one of the merging corporations;
the separate existence of the other
constituent corporations ceases.
Consolidation occurs when two or more
corporations join into a new single
corporation; the separate existence of all
the constituent corporations ceases,
except that of the consolidated
corporation.
Section 80. Effects of merger or consolidation.
- The merger or consolidation shall have the
following effects:
xxx
5. The surviving or consolidated corporation
shall be responsible and liable for all the
liabilities and obligations of each of the
constituent corporations in the same manner
as if such surviving or consolidated
corporation had itself incurred such liabilities
or obligations; and any pending claim, action
or proceeding brought by or against any of
such constituent corporations may be
prosecuted by or against the surviving or
consolidated corporation. The rights of
creditors or liens upon the property of any of
such constituent corporations shall not be
impaired by such merger or consolidation. (n)
5.4 Wiley Doctrine
The disappearance by merger of a
corporate employer which has entered
into a collective bargaining agreement
with a union does not automatically
terminate all rights of the employees
covered by the agreement, even though
the merger is for genuine business
reasons. Under the Wiley doctrine, a duty
to arbitrate arising from a collective
bargaining agreement survives the
employer’s ceasing to do business as a

separate entity after its merger with a
substantially large corporation, so as to
be binding on the larger corporation,
where relevant similarity and continuity of
operations across the change in
ownership is evidenced by the wholesale
transfer of the smaller corporation’s
employees to the larger corporation’s
plant. If a contractual duty to arbitrate
survives the employer’s merger into
another corporate employer, question as
to the effect of the merger on the rights
of the employees covered by the
agreement—the former employees of the
merged employer—are arbitrable if
questions as to those rights would have
been arbitrable before the merger.
But a duty to arbitrate arising from
collective bargaining agreement does not
survive in every case in which the
ownership or corporate structure of an
enterprise is changed. It does not survive
where there is lack of any substantial
continuity of identity in the business
enterprise before and after a change, or
where the union abandons its right to
arbitration by failing to make its claims
known.
6. CHANGE OF BARGAINING AGENT;
SUBSTITUTIONARY DOCTRINE
How does disaffiliation affect the CBA?
The agreement is binding on the parties for
the period therein specified. The employees
cannot revoke the validly executed collective
bargaining contract with their employer by
the simple expedient of changing their
bargaining representative. Thus, when there
occurs a shift in employees' union allegiance
after the execution of a bargaining contract
with their employer, and the employees
change their bargaining representative, the
contract continues to bind them up to its
expiration date. The new agent, however,
may bargain for the shortening of the contract
period.
In formulating the "substitutionary" doctrine,
the only consideration involved was the
employees' interest in the existing bargaining
agreement. The agent's interest never
LABOR RELATIONS: Azucena Vol. II
entered the picture. In fact, the justification 9
for said doctrine was:
xxx that the majority of the employees, as an
entity under the statute, is the true party in
interest to the contract, holding rights through
the agency of the union representative. Thus,
any exclusive interest claimed by the agent is
defeasible at the will of the principal....
(Emphasis supplied)
Stated otherwise, the "substitutionary"
doctrine only provides that the employees
cannot revoke the validly executed collective
bargaining contract with their employer by
the simple expedient of changing their
bargaining agent. And it is in the light of this
that the phrase "said new agent would have
to respect said contract" must be understood.
It only means that the employees, thru their
new bargaining agent, cannot renege on their
collective bargaining contract, except of
course to negotiate with management for the
shortening thereof.
The "substitutionary" doctrine, therefore,
cannot be invoked to support the contention
that a newly certified collective bargaining
agent automatically assumes all the personal
undertakings — like the no-strike stipulation
here — in the collective bargaining agreement
made by the deposed union. When BBWU
bound itself and its officers not to strike, it
could not have validly bound also all the other
rival unions existing in the bargaining units in
question. BBWU was the agent of the
employees, not of the other unions which
possess distinct personalities. To consider
UNION contractually bound to the no-strike
stipulation would therefore violate the legal
maxim that res inter alios nec prodest nec
nocet.
7. GRIEVANCES
A grievance is defined as “any question
by either the employer or the union
regarding the interpretation or application
of the collective bargaining agreement or
company personnel policies or any claim
by either party that the other party is
violating any provision of the CBA or
company personnel policies.”
If the term grievance is to be applied in
the loose or generic sense, any dispute or
 LABOR RELATIONS: Azucena Vol. II
controversy respecting terms and management as a means of maintaining
conditions of employment which an industrial peace.
employee or group of employees may
present to the employer can be a Before an aggrieved employee may resort
grievance, even without a union or CBA. to the courts to enforce his individual
rights under a bargaining contract, the
The expansion of the original and employee must exhaust all the remedies
exclusive jurisdiction of voluntary available to him under such contract. And
arbitrators to include questions arising a court should not entertain any
from the interpretation and enforcement complaint by an aggrieved employee until
of company personnel policies has the proper use has been made of the contract
effect of widening the meaning and grievance procedure agreed upon by
interpretation of a grievance to include a employer and the bargaining
situation where there is no collective representative.
bargaining agent and no CBA.
The grievance machinery under the
Personnel policies are guiding principles agreement is the very heart of industrial
stated in broad, long-range terms that self0government.
express the philosophy or beliefs of an
organization’s top authority regarding May a grievance be brought to voluntary
personnel matters. arbitration without passing through the
grievance procedure under the CBA?
They deal with matters affecting
efficiency and well-being of employees This appears to be proscribed by the
and include, among others, the Labor Code which directs the parties to a
procedures in administration of wages, CBA to establish a grievance machinery
benefits, promotions, transfer and other for the adjustment and resolution of
personnel movements which are usually grievances arising from the interpretation
not spelled out in the collective or enforcement of company personnel
agreement. The usual source of policies.
grievances, however, is the rules and
regulations governing disciplinary actions. In view, however, of the State policy to
encourage voluntary arbitration of all
7.1 By-passing the Grievance Machinery: other labor-management disputes, it is
ULP submitted that a grievance may be
brought directly to voluntary arbitration
All grievances arising from the without passing through the grievance
implementation or interpretation of the machinery, especially when the latter has
collective bargaining agreement and/or been proven to be ineffective in the past,
interpretation and enforcement of or when the parties inadvertently failed to
company personnel policies are include a grievance machinery provision
compulsorily subject to the grievance of in their CBA.
machinery.
7.2 Waiver of Grievance Machinery
Upholding the requirement, the Court has Procedure and Submission to VA
ruled that the grievance procedure
provided in the CBA should be adhered to Article 262 of the Labor Code provides that
by the parties. Refusal or failure to do so upon agreement of the parties, the voluntary
is an unfair labor practice, because the arbitrator can hear and decide all other labor
grievance procedure is part of the disputes.
continuous process of collective
Contrary to the finding of the Court of
bargaining. It is intended to promote Appeals, voluntary arbitration as a mode of
friendly dialogue between labor and

settling the dispute was not forced upon
respondents. Both parties indeed agreed to
submit the issue of validity of the dismissal of
petitioner to the jurisdiction of the voluntary
arbitrator by the Submission Agreement duly
signed by their respective counsels. As the
voluntary arbitrator had jurisdiction over the
parties' controversy, discussion of the second
issue is no longer necessary.
The employee’s waiver of her option to
submit her case to grievance machinery did
not amount to relinquishing her right to avail
herself of voluntary arbitration.
7.3 Structure and Procedure
In the absence of applicable provision in the
collective bargaining agreement, a grievance
committee shall be created within ten (10)
days from signing of the collective bargaining
agreement. The committee shall be composed
of at least two (2) representatives each from
the members of the bargaining unit and the
employer, unless otherwise agreed upon by
the parties. The representatives from among
the members of the bargaining unit shall be
designated by the union.
Section 2. Procedure in handling grievances. -
In the absence of a specific provision in the
collective bargaining agreement or existing
company practice prescribing for the
procedures in handling grievance, the
following shall apply:
(a) An employee shall present this grievance
or complaint orally or in writing to the shop
steward. Upon receipt thereof, the shop
steward shall verify the facts and determine
whether or not the grievance is valid.
(b) If the grievance is valid, the shop steward
shall immediately bring the complaint to the
employee's immediate supervisor. The shop
steward, the employee and his immediate
supervisor shall exert efforts to settle the
grievance at their level.
(c) If no settlement is reached, the grievance
shall be referred to the grievance committee
which shall have ten (10) days to decide the
case.
Where the issue involves or arises from the
interpretation or implementation of a
provision in the collective bargaining
agreement, or from any order, memorandum,
LABOR RELATIONS: Azucena Vol. II
circular or assignment issued by the
appropriate authority in the establishment,
and such issue cannot be resolved at the level
of the shop steward or the supervisor, the
same may be referred immediately to the
grievance committee.
8. VOLUNTARY ARBITRATION
Section 3. Submission to voluntary arbitration.
- Where grievance remains unresolved, either
party may serve notice upon the other of its
decision to submit the issue to voluntary
arbitration. The notice shall state the issue or
issues to be arbitrated, copy thereof furnished
the board or the voluntary arbitrator or panel
of voluntary arbitrators named or designated
in the collective bargaining agreement. If the
party upon whom the notice is served fails or
refuses to respond favorably within seven (7)
days from receipt thereof, the voluntary
arbitrator or panel of voluntary arbitrators
designated in the collective bargaining
agreement shall commence voluntary
arbitration proceedings. Where the collective
bargaining agreement does not so designate,
the board shall call the parties and appoint a
voluntary arbitrator or panel of voluntary
arbitrators, who shall thereafter commence
arbitration proceedings in accordance with
the proceeding paragraph.
In instances where parties fail to select a
voluntary arbitrator or panel of voluntary
arbitrators, the regional branch of the Board
shall designate the voluntary arbitrator or
panel of voluntary arbitrators, as may be
necessary, which shall have the same force
and effect as if the parties have selected the
arbitrator.
The parties to a CBA will decide on the
number of arbitrators who may hear a
dispute only when the need for it arises.
Even the law itself does not specify the
number of arbitrators. Their alternatives
— whether to have one or three
arbitrators — have their respective
advantages and disadvantages. In this
matter, cost is not the only consideration;
full deliberation on the issues is another,
and it is best accomplished in a hearing
conducted by three arbitrators. In effect,
the parties are afforded the latitude to
decide for themselves the composition of

the grievance machinery as they find
appropriate to a particular situation.
Labor arbitration is the reference of a
labor dispute to a third party for
determination on the basis of evidence
and arguments presented by such
parties, who are bound to accept the
decision.
Voluntary arbitration has been defined as a
contractual proceeding whereby the parties to
any dispute or controversy, in order to obtain
a speedy and inexpensive final disposition of
the matter involved, select a judge of their
own choice and by consent submit their
controversy to him for determination. Under
voluntary arbitration, on the other hand,
referral of a dispute by the parties is made,
pursuant to a voluntary arbitration clause in
their collective agreement, to an impartial
third person for a final and binding resolution.
Ideally, arbitration awards are supposed to be
complied with by both parties without delay,
such that once an award has been rendered
by an arbitrator, nothing is left to be done by
both parties but to comply with the same.
After all, they are presumed to have freely
chosen arbitration as the mode of settlement
for that particular dispute. Pursuant thereto,
they have chosen a mutually acceptable
arbitrator who shall hear and decide their
case. Above all, they have mutually agreed to
de bound by said arbitrator's decision.
Compulsory arbitration is a system whereby
the parties to a dispute are compelled by the
government to forego their right to strike and
are compelled to accept the resolution of their
dispute through arbitration by a third party. 1
The essence of arbitration remains since a
resolution of a dispute is arrived at by resort
to a disinterested third party whose decision
is final and binding on the parties, but in
compulsory arbitration, such a third party is
normally appointed by the government.
In Philippine context, the “judge” in voluntary
arbitration is called arbitrator, while that in
compulsory is labor arbiter. The jurisdiction of
a VA is stated in Articles 261 and 262 while
that of an LA is in Article 217.
8.1 Voluntary Arbitration: A Private
Judicial System
LABOR RELATIONS: Azucena Vol. II
A voluntary arbitrator “is not a public
tribunal imposed upon the parties by a
superior authority which the parties are
obliged to accept. He has no general
character to administer justice for a
community which transcends the parties.
He is rather part of a system of self-
government created by and confined to
the parties.”
The primary function of voluntary labor
arbitration is to provide (1) a process for
the orderly disposition of disputes and (2)
a foundation for stable labor-management
relations.
8.2 Voluntary Arbitration: A Master
Procedure
In labor-management relations voluntary
arbitration is a master procedure. Any
and all kinds of labor disputes may be
submitted to, settled, or resolved through
voluntary arbitration, if the parties so
desire. Money claims, bargaining
deadlocks, strike or lockout, employment
termination, and even questions about
existence or absence of employer-
employee relationship, may be resolved
by the parties—with finality—by availing
themselves of voluntary arbitration.
As a master procedure voluntary
arbitration takes precedence over other
dispute settlement devices (i.e., cases
before the labor arbiter or Secretary of
Labor or the NLRC)
A dispute pending in voluntary arbitration
(or compulsory arbitration, for that
matter) cannot be the subject of a strike
or lockout notice.
9. WHO MAY BE ACCREDITED AS
VOLUNTARY ARBITRATOR
The following are the minimum criteria for
accreditation as voluntary arbitrator:
1. A Filipino citizen residing in the Philippines;
2. A holder of at least a Bachelor’s Degree in
any field of behavioral or applied sciences or
 LABOR RELATIONS: Azucena Vol. II
equivalent educational training short of a higher court
Bachelor’s Degree; Hear a great variety Hear only industrial
of cases disputes
3. At least five (5) years experience in the
field of Labor-Management relations; Services of a lawyer Not essential
is essential due to
4. Completion of a training course on complexity
voluntary arbitration conducted by the Board;
and Arbitration, in sum, is a non-technical and
relatively inexpensive procedure for
5. A person of good moral character, noted for obtaining a quick solution to industrial
impartiality, probity, and has not been civilly,
disputes by persons who have specialized
criminally and administratively adjudged
guilty of any offense involving moral turpitude knowledge of labor management
as evidenced by a duly sworn affidavit. relations.
________
10. HOW VOLUNTARY ARBITRATOR IS
CHOSEN Article. 261. Jurisdiction of Voluntary
Arbitrators or panel of Voluntary
A voluntary arbitrator is chosen by the Arbitrators. - The Voluntary Arbitrator or
parties themselves (preferably accredited panel of Voluntary Arbitrators shall have
by the NCMB). The choice is usually original and exclusive jurisdiction to hear
influenced by the trust in the person’s and decide all unresolved grievances
fairness and knowledge of the dynamics, arising from the interpretation or
including law, of labor-management implementation of the Collective
relation. Bargaining Agreement and those arising
from the interpretation or enforcement of
The preferred method of selection is by company personnel policies referred to in
mutual agreement of the parties. the immediately preceding article.
Alternative methods include the selection Accordingly, violations of a Collective
or appointment by an administrative Bargaining Agreement, except those
agency like the NCMB. which are gross in character, shall no
longer be treated as unfair labor practice
Parties in general may choose between and shall be resolved as grievances under
the use of a temporary (when a dispute is the Collective Bargaining Agreement. For
already at hand; specific) or permanent purposes of this article, gross violations of
arbitrator (before a dispute arises; for a Collective Bargaining Agreement shall
period of time, usually during the life of mean flagrant and/or malicious refusal to
the CBA). They have also a choice as to comply with the economic provisions of
the number of arbitrators, either a sole such agreement.
arbitrator or a panel of arbitrators or
Arbitration Board. The Commission, its Regional Offices and
the Regional Directors of the Department
11. DISTINGUISHED FROM A COURT of Labor and Employment shall not
OF LAW entertain disputes, grievances or matters
under the exclusive and original
Court of Law Arbitration jurisdiction of the Voluntary Arbitrator or
Formal Informal panel of Voluntary Arbitrators and shall
Follow precedents Not obliged immediately dispose and refer the same
Rules of evidence Not observed to the Grievance Machinery or Voluntary
Arbitration provided in the Collective
observed
Bargaining Agreement.
Decisions may be No comparable ________
appealed to the appeal recourse

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.
________
1. ARBITRABLE DISPUTES
In the field of labor relations, arbitration
applies to two kinds of disputes: (1)
contract-negotiation disputes; and (2)
contract-interpretation disputes. Contract
negotiation disputes are disputes as to
the terms of a collective bargaining
agreement. Where there is an existing
agreement to arbitrate such disputes, and
a bargaining deadlock or impasse has
arisen, the disputants submit to an
impartial outsider for settlement the
collective bargaining issue which they
had been unable to settle by themselves,
whether or not aided by conciliators.
Contract interpretation disputes are
disputes arising under an existing
collective bargaining agreement,
involving such matters as the
interpretation and application of the
contract, or alleged violation of its
provisions.
Arbitration of contract negotiation
disputes is often known as arbitration of
“interest,” while arbitration of contract
interpretation disputes is known as
arbitration of “grievance” or “rights.”
2. JURISDICTION OF L.A. AND V.A.
The aforecited provisions of law cannot be
read in isolation or separately. They must be
read as a whole and each Article of the Code
reconciled one with the other. An analysis of
the provisions of Articles 217, 261, and 262
indicates, that:
1. The jurisdiction of the Labor Arbiter and
Voluntary Arbitrator or Panel of Voluntary
Arbitrators over the cases enumerated in
Articles 217, 261 and 262, can possibly
include money claims in one form or another.
LABOR RELATIONS: Azucena Vol. II
2. The cases where the Labor Arbiters have
original and exclusive jurisdiction are
enumerated in Article 217, and that of the
Voluntary Arbitrator or Panel of Voluntary
Arbitrators in Article 261.
3. The original and exclusive jurisdiction of
Labor Arbiters is qualified by an exception as
indicated in the introductory sentence of
Article 217 (a), to wit:
Art. 217. Jurisdiction of Labor Arbiters . . .
(a) Except as otherwise provided under this
Code the Labor Arbiter shall have original and
exclusive jurisdiction to hear and decide . . .
the following cases involving all workers. . . .
The phrase "Except as otherwise provided
under this Code" refers to the following
exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters . . .
xxx
(c) Cases arising from the interpretation or
implementation of collective bargaining
agreement and those arising from the
interpretation or enforcement of company
procedure/policies shall be disposed of by the
Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitrator
as may be provided in said agreement.
B. Art. 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.
4. The jurisdiction of Voluntary Arbitrator or
Panel of Voluntary Arbitrators is provided for
in Arts. 261 and 262 of the Labor Code as
indicated above.
A. A close reading of Article 261 indicates that
the original and exclusive jurisdiction of
Voluntary Arbitrator or Panel of Voluntary
Arbitrators is limited only to:
. . . unresolved grievances arising from the
interpretation or implementation of the
Collective Bargaining Agreement and those
arising from the interpretation or enforcement
of company personnel policies . . .
Accordingly, violations of a collective
bargaining agreement, except those which are

gross in character, shall no longer be treated
as unfair labor practice and shall be resolved
as grievances under the Collective Bargaining
Agreement. . . . .
B. Voluntary Arbitrators or Panel of Voluntary
Arbitrators, however, can exercise jurisdiction
over any and all disputes between an
employer and a union and/or individual
worker as provided for in Article 262.
It must be emphasized that the jurisdiction of
the Voluntary Arbitrator or Panel of Voluntary
Arbitrators under Article 262 must be
voluntarily conferred upon by both labor and
management. The labor disputes referred to
in the same Article 262 can include all those
disputes mentioned in Article 217 over which
the Labor Arbiter has original and exclusive
jurisdiction.
As shown in the above contextual and
wholistic analysis of Articles 217, 261, and
262 of the Labor Code, the National Labor
Relations Commission correctly ruled that the
Labor Arbiter had no jurisdiction to hear and
decide petitioner's money-claim-
underpayment of retirement benefits, as the
controversy between the parties involved an
issue "arising from the interpretation or
implementation" of a provision of the
collective bargaining agreement. The
Voluntary Arbitrator or Panel of Voluntary
Arbitrators has original and exclusive
jurisdiction over the controversy under Article
261 of the Labor Code, and not the Labor
Arbiter.
2.1 Jurisdiction over Termination Disputes
The preference or bias of the law in favor
of voluntary arbitration justifies the view
that employment termination disputes,
arising from CBA or personnel policy
implementation, are cognizable by a
voluntary arbitrator and not a labor
arbiter. Such termination cases, if filed
with a labor arbiter, is to be dismissed for
lack of jurisdiction and referred to the
concerned NCMB Regional Branch for
appropriate action.
Article 260 of the Labor Code on grievance
machinery and voluntary arbitrator states that
"(t)he parties to a Collective Bargaining
Agreement shall include therein provisions
LABOR RELATIONS: Azucena Vol. II
that will ensure the mutual observance of its
terms and conditions. They shall establish a
machinery for the adjustment and resolution
of grievances arising from the interpretation
or implementation of their Collective
Bargaining Agreement and those arising from
the interpretation or enforcement of company
personnel policies." It is further provided in
said article that the parties to a CBA shall
name or designate their respective
representatives to the grievance machinery
and if the grievance is not settled in that
level, it shall automatically be referred to
voluntary arbitrators (or panel of voluntary
arbitrators) designated in advance by the
parties. It need not be mentioned that the
parties to a CBA are the union and the
company. Hence, only disputes involving the
union and the company shall be referred to
the grievance machinery or voluntary
arbitrators.
Article 261 of the Labor Code which grants to
voluntary arbitrators original and exclusive
jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or
implementation of the collective bargaining
agreement and those arising from the
interpretation or enforcement of company
personnel policies. Note the phrase
"unresolved grievances." In the case at bar,
the termination of petitioner is not an
unresolved grievance.
Article 260 further provides that the parties to
a CBA shall name or designate their
respective representative to the grievance
machinery and if the grievance is unsettled in
that level, it shall automatically be referred to
the voluntary arbitrators designated in
advance by the parties to a CBA of the union
and the company. It can thus be deduced that
only disputes involving the union and the
company shall be referred to the grievance
machinery or voluntary arbitrators.
2.1a “Policies,” “Rules,” “Procedures”
Policies are formulated by management
even before a company opens for
business in order to guide the men in the
operational level, the line manager or
supervisor as to the scope of their
activities, authority and responsibility,
and to enable them to arrive at sound
decisions. Policies are valuable in fixing
definite objectives for the organization.

Policy statements are also needed to
allow subordinate executives to make fair
and consistent decisions on recurrent
problems. They promote uniformity of
action and prevent conflicting decisions
especially as regards labor matter.”
Company policies must be issued by top
management which is responsible for
making major policies that are by nature
company-wide in application.
Minor policies, better known as rules and
procedures, are the extension of major
policies and are usually formulated by
minor executives or department
managers. Rules are specific guides
intended to govern conduct and action of
operating supervisors and employees in
the performance of their designated
activities. Procedures are made to specify
ways or methods of carrying out policies
and rules. A procedure tells what work or
task to do, how to do it, and when to do
it.
2.2 Jurisdiction over CBA Violations
CBA violations not constituting ULP are
likewise cognizable by a voluntary
arbitrator if not resolved through the
grievance machinery. If the violations,
however, are “gross” in character, these
are to be treated as unfair labor practice
which, following Art. 217 (a-1), are to be
heard and decided by a labor arbiter.
The law wants the industrial players to
resolve their differences by and among
themselves as much as possible. And if
they need help, they are likewise free to
agree where that help may come from.
For a ULP case to be cognizable by the Labor
Arbiter, and the NLRC to exercise its appellate
jurisdiction, the allegations in the complaint
should show prima facie the concurrence of
two things, namely: (1) gross violation of the
CBA; AND (2) the violation pertains to the
economic provisions of the CBA.
Unsubstantiated conclusions of bad faith and
unjustified refusal to re-employ petitioners, to
our mind, do not constitute gross violation of
LABOR RELATIONS: Azucena Vol. II
the CBA for purposes of lodging jurisdiction
with the Labor Arbiter and the NLRC. Although
evidentiary matters are not required (and
even discouraged) to be alleged in complaint,
still, sufficient details supporting the
conclusion of bad faith and unjust refusal to
re-employ petitioners must be indicated.
Furthermore, it is even doubtful if the CBA
provision on re-employment fits into the
accepted notion of an economic provision of
the CBA.
2.3 Other Cases
Section 4. Jurisdiction of voluntary arbitrator
or panel of voluntary arbitrators. - The
voluntary arbitrator or panel of voluntary
arbitrators shall have exclusive and original
jurisdiction to hear and decide all grievances
arising from the implementation or
interpretation of the collective bargaining
agreements and those arising from the
interpretation or enforcement of company
personnel policies which remain unresolved
after exhaustion of the grievance procedure.
They shall also have exclusive and original
jurisdiction, to hear and decide wage
distortion issues arising from the application
of any wage orders in organized
establishments, as well as unresolved
grievances arising from the interpretation and
implementation of the productivity incentive
programs under RA 6971.
Upon agreement of the parties, any other
labor dispute may be submitted to a voluntary
arbitrator or panel of voluntary arbitrators.
Before or at any stage of the compulsory
arbitration process, the parties may opt to
submit their dispute to voluntary arbitration.
The National Labor Relations Commission, its
regional branches and Regional Directors of
the Department of Labor and Employment
shall not entertain disputes, grievances or
matters under the exclusive and original
jurisdiction of the voluntary arbitrator or panel
of voluntary arbitrators and shall immediately
dispose and refer the same to the appropriate
grievance machinery or voluntary arbitration
provided in the collective bargaining
agreement.
2.4 Dispute over Company’s Drug Abuse
Policy

A union’s petition to enjoin implementation of
the company’s drug policy is a labor dispute
beyond RTC’s jurisdiction. It is a personnel
policy dispute within the jurisdiction of a VA.
3. HOW VOLUNTARY ARBITRATION IS
INITIATED
Voluntary arbitration may be initiated
either by 1) a Submission or 2) by a
Demand or Notice invoking a collective
agreement arbitration clause. Sometimes
both instruments are used in a case.
Submission is sometimes called a
“Stipulation” or an “Agreement to
Arbitrate.” It is used where there is no
previous agreement to arbitrate. The
Submission, which must be signed by
both parties, describes an existing
dispute; it often names the arbitrator,
procedures in the hearing and it
sometimes contains considerable details
of the arbitrator’s authority and other
matters which the parties wish to control.
Submission is more appropriate in
interest disputes since collective
agreement generally do not provide for
the arbitration of such disputes that may
arise in the future. Submission is often
entered into after the dispute has
materialized and the issues can already
be defined.
However, Demand or Notice of Intent to
Arbitrate is more applicable to rights
dispute because collective agreements
are required under RA 6715 to provide for
a grievance procedure and a voluntary
arbitration clause with respect to disputes
arising from the application or
interpretation of the agreement. Thus,
there is an “agreement to arbitrate”
future dispute that may arise under and
during the term of the CBA. If a dispute is
covered by such an arbitration clause,
arbitration may be initiated unilaterally by
one party by serving upon the other a
written demand or notice of intent to
arbitrate.
3.1 The Submission Agreement; Extent of
Arbitrator’s Authority
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Although the contract may establish the
breadth of the arbitrator’s power and the
limits of his authority, his power may be
more sharply defined in the submission
agreement. Frequently, the parties jointly
formulate in writing the specific issues to
be decided by the arbitrator. Sometimes
the arbitrator is asked by the parties to
help them frame the issue on the basis of
the written grievance or the case as
presented.
In general, the arbitrator is expected to
decide those questions expressly stated
and limited in the submission agreement.
However, since arbitration is the final
resort for the adjudication of disputes, the
arbitrator will assume that he has the
power to make a final settlement.
It is thus essential to stress that the
Voluntary Arbitrator had plenary
jurisdiction and authority to interpret the
agreement to arbitrate and to determine
the scope of hs own authority subject
only, in a proper case, to the certiorari
jurisdiction of this Court.
Generally, the arbitrator is expected to
decide only those questions expressly
delineated by the submission agreement.
Nevertheless, the arbitrator can assume
that he has the necessary power to make
a final settlement since arbitration is the
final resort for adjudication of disputes.
The issue of regularization should be viewed
as two-tiered issue. While the submission
agreement mentioned only the determination
of the date or regularization, law and
jurisprudence give the voluntary arbitrator
enough leeway of authority as well as
adequate prerogative to accomplish the
reason for which the law on voluntary
arbitration was created – speedy labor justice.
It bears stressing that the underlying reason
why this case arose is to settle, once and for
all, the ultimate question of whether
respondent employees are entitled to higher
benefits. To require them to file another action
for payment of such benefits would certainly
undermine labor proceedings and contravene

the constitutional mandate providing
protection to labor.
4. POWERS OF THE ARBITRATOR
The study of collective bargaining
agreements discloses different types of
arbitration clauses with varying degrees
of power granted to the arbitration. This
power may be very limited or unusually
broad in scope.
4.1 Power to Arbitrate Any Dispute
The contract clause that gives the
arbitrator the broadest scope of power is
commonly known as the “disputes”
clause.
This type of clause grants the arbitrator
jurisdiction to hear and determine
practically any matter in dispute between
the parties. Moreover, he is not
necessarily limited to matters specifically
stated in the contract. It is common,
however, for some relationship to be
shown between the matter in dispute and
the provisions of the contract.
4.2 No Power to Add To or Subtract From
the Contract
Some arbitration clauses limit the
arbitrator’s power to an interpretation
and application of the contract and
further specifically provide that he “shall
have no power to add to or subtract from
the contract.
Such clauses clearly state the parties’
intention that the arbitrator will be
empowered only to interpret the contract
but not add to or modify it.
As a general rule, the authority of an
arbitrator embraces or covers the
following:
1. General authority to investigate and
hear the case upon notice of the parties
and to render an award based on the
contract and record of the case;
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full 2. Incidental authority to perform all acts
necessary to an adequate discharge of his
duties and responsibilities like setting and
conduct of hearing, attendance of
witnesses and proof documents and other
evidences, fact-finding and other modes
of discovery, reopening of hearing, etc.;
3. Special power in aid of his general
contractual authority like the authority to
determine arbitrability of any particular
dispute and to modify any provision of
existing agreement upon which a
proposed change is submitted for
arbitration.
5. FUNCTIONS OF ARBITRATOR
The labor arbitrator under a collective
bargaining agreement is an indispensable
agency in the continuous collective
bargaining process. He sits to settle
disputes at the plant level—disputes
which require for their solution knowledge
of the custom and practices of a
particular factory or of a particular
industry as reflected in particular
agreements.
On the other hand, the power and
authority of arbitrators in labor dispute
cases is derived from and limited by the
terms of the parties’ agreement. The
arbitrator is confined to interpretation and
application of the CBA; he does not sit to
dispense his own brand of industrial
justice. The arbitrator’s authority is
contractual rather than judicial in nature;
his power is conferred by the CBA; and his
duty with respect to that agreement is to
settle disputes arising thereunder by
applying and interpreting that agreement.
But so long as an arbitrator is not
arbitrary, he has wide latitude in
exercising his authority, especially in
fashioning an appropriate remedy.
5.1 Arbitrator’s Interpretation of CBA
It is said that an arbitral award does not draw
its essence from the CBA; hence, there is an

unauthorized amendment or alteration
thereof, if:
1. It is so unfounded in reason and fact;
2. It is so unconnected with the working and
purpose of the agreement;
3. It is without factual support in view of its
language, its context, and any other indicia of
the parties' intention;
4. It ignores or abandons the plain language
of the contract;
5. It is mistakenly based on a crucial
assumption which concededly is a nonfact;
6. It is unlawful, arbitrary or capricious; and
7. It is contrary to public policy.
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Article. 262-A. Procedures. - The Voluntary
Arbitrator or panel of Voluntary
Arbitrators shall have the power to hold
hearings, receive evidences and take
whatever action is necessary to resolve
the issue or issues subject of the dispute,
including efforts to effect a voluntary
settlement between parties.
All parties to the dispute shall be entitled
to attend the arbitration proceedings. The
attendance of any third party or the
exclusion of any witness from the
proceedings shall be determined by the
Voluntary Arbitrator or panel of Voluntary
Arbitrators. Hearing may be adjourned for
cause or upon agreement by the parties.
Unless the parties agree otherwise, it
shall be mandatory for the Voluntary
Arbitrator or panel of Voluntary
Arbitrators to render an award or decision
within twenty (20) calendar days from the
date of submission of the dispute to
voluntary arbitration.
The award or decision of the Voluntary
Arbitrator or panel of Voluntary
Arbitrators shall contain the facts and the
law on which it is based. It shall be final
and executory after ten (10) calendar
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days from receipt of the copy of the
award or decision by the parties.
Upon motion of any interested party, the
Voluntary Arbitrator or panel of Voluntary
Arbitrators or the Labor Arbiter in the
region where the movant resides, in case
of the absence or incapacity of the
Voluntary Arbitrator or panel of Voluntary
Arbitrators, for any reason, may issue a
writ of execution requiring either the
sheriff of the Commission or regular
courts or any public official whom the
parties may designate in the submission
agreement to execute the final decision,
order or award.
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1. COMPLIANCE WITH DUTY TO
ARBITRATE
If a CBA requires settlement of disputes
“exclusively” by the arbitration, then
arbitration is needed before court suits for
breach of the contract may be filed.
Nonetheless, the parties to a CBA may
waive the arbitration covenants of the
agreement, but their conduct must clearly
show that intention.
2. WHO DETERMINES THE
ARBITRATION PROCEDURES
In practice, voluntary arbitration of labor
cases use procedures based on the Labor
Code as amended by RA 6715 and its
Implementing Rules, the CBA, and other
agreements of the parties, the directives
of the arbitrator, and the procedural rules
of appropriate agencies like the NCMB
Procedural Guidelines in Conduct of
Voluntary Arbitration Proceedings.
3. ETHICAL STANDARDS OF
ARBITRATORS
An arbitrator is obliged to maintain a high
level of professional ethics in his
relationship with the parties and the
appointing agencies. He also has a
responsibility to society. His conduct
should be above reproach. Since in effect,

he is a judge, and his ethics must be on
the same high level as the code that
governs the conduct of judicial tribunals.
Failure on the part of the voluntary arbitrator
to render a decision, resolution, order or
award within the prescribed period, shall upon
complaint of a party, be sufficient ground for
the Board to discipline said voluntary
arbitrator, pursuant to the guidelines issued
by the Secretary. In cases that the
recommended sanction is de-listing, it shall be
unlawful for the voluntary arbitrator to refuse
or fail to turn over to the board, for its further
disposition, the records of the case within ten
(10) calendar days from demand thereof.
4. VOLUNTARY ARBITRATION AWARD
GENERALLY FINAL; EXCEPTIONS
The decisions of voluntary arbitrators must be
given the highest respect and as a general
rule must be accorded a certain measure of
finality. This is especially true where the
arbitrator chosen by the parties enjoys the
first rate credentials. It is not correct,
however, that this respect precludes the
exercise of judicial review over their decisions.
Inspite of statutory provisions making 'final'
the decisions of certain administrative
agencies, we have taken cognizance of
petitions questioning these decisions where
want of jurisdiction, grave abuse of discretion,
violation of due process, denial of substantial
justice, or erroneous interpretation of the law
were brought to our attention.
A voluntary arbitrator by the nature of her
fucntions acts in quasi-judicial capacity. There
is no reason why herdecisions involving
interpretation of law should be beyond this
Court's review. Administrative officials are
presumed to act in accordance with law and
yet we do hesitate to pass upon their work
where a question of law is involved or where a
showing of abuse of authority or discretion in
their official acts is properly raised in petitions
for certiorari.
The Labor Code and its Implementing
Rules thus clearly reflect the important
public policy of encouraging recourse to
voluntary arbitration and of shortening
the arbitration process by rendering the
arbitral award non- appealable to the
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NLRC. The result is that a voluntary
arbitral award may be modified and set
aside only upon the same grounds on
which a decision of the NLRC itself may
be modified or set aside, by the Supreme
Court.
4.1 Motion for Reconsideration*
Section 7. Finality of Award/Decision. - The
decision, order, resolution or award of the
voluntary arbitrator or panel of voluntary
arbitrators shall be final and executory after
ten (10) calendar days from receipt of the
copy of the award or decision by the parties
and it shall not be subject of a motion for
reconsideration.
4.2 Review of Award by Certiorari
The voluntary arbitrator no less performs a
state function pursuant to a governmental
power delegated to him under the provisions
therefor in the Labor Code and he falls,
therefore, within the contemplation of the
term "instrumentality" in the aforequoted Sec.
9 of B.P. 129. The fact that his functions and
powers are provided for in the Labor Code
does not place him within the exceptions to
said Sec. 9 since he is a quasi-judicial
instrumentality as contemplated therein.
A fortiori, the decision or award of the
voluntary arbitrator or panel of arbitrators
should likewise be appealable to the Court of
Appeals, in line with the procedure outlined in
Revised Administrative Circular No. 1-95, just
like those of the quasi-judicial agencies,
boards and commissions enumerated therein.
In effect, this equates the award or decision of
the voluntary arbitrator with that of the
regional trial court. Consequently, in a petition
for certiorari from that award or decision, the
Court of Appeals must be deemed to have
concurrent jurisdiction with the Supreme
Court. As a matter of policy, this Court shall
henceforth remand to the Court of Appeals
petitions of this nature for proper disposition.
4.2a From VA to CA: Mode of Appeal is
Rule 43, not 65
The mode of appeal from VA to the CA is
therefore Rule 43 of the 1997 Rules of
Procedure. It is not Rule 65 because a petition

for certiorari under that Rule lies only where
there is “no appeal” and no plain, speedy and
adequate remedy in the ordinary course of
law. Certiorari under Rule 65 cannot be
allowed when a party to a case fails to appeal
a judgment despite the availability of that
remedy, certiorari not being a substitute for
lost appeal. The remedies of appeal and
certiorari are mutually exclusive and not
alternative or successive.
4.3 Findings of Facts of a Voluntary
Arbitrator
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Article. 262-B. Cost of voluntary
arbitration and Voluntary Arbitrator’s fee.
- The parties to a Collective Bargaining
Agreement shall provide therein a
proportionate sharing scheme on the cost
of voluntary arbitration including the
Voluntary Arbitrator’s fee. The fixing of
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fee of Voluntary Arbitrators, whether
shouldered wholly by the parties or
subsidized by the Special Voluntary
Arbitration Fund, shall take into account
the following factors:
(a) Nature of the case;
(b) Time consumed in hearing the case;
(c) Professional standing of the Voluntary
Arbitrator;
(d) Capacity to pay of the parties; and
(e) Fees provided for in the Revised Rules
of Court.
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