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LABOR LAW REVIEW

Review Material Part III
I.

As we previously discussed, the union cannot be certified as the exclusive

representative of all the employees in an appropriate collective bargaining unit for
purposes of collective bargaining unless it is a legitimate labor organization. You
may also note that the labor organization does not have the right to be furnished
with the audited financial statement unless it has been duly recognized by the
employer or certified as the sole and exclusive bargaining representative of the
employees in the bargaining unit.
You may likewise note that the legitimate labor organization enjoys tax
exemption.
ARTICLE 249. 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 collective bargaining unit for purposes of collective
bargaining;

(c)

To be furnished by the employer, upon written request, with his 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, 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.

(g)

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 The exemptions provided herein may be withdrawn only by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.
II.

In your corporation law, the failure of the corporation to properly observe the
reportorial requirements will result to delisting and/or cancellation of the name of
the corporation from the list of the corporations with the Securities and Exchange
Commission. The failure of the legitimate labor organization to comply with the
reportorial requirements will only result to the suspension, expulsion from
membership, or any appropriate penalty of the unions erring officers.
ARTICLE 250.
Reportorial Requirements. The following are
documents required to be submitted to the Bureau by the legitimate labor
organization concerned:
(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-laws 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.

III.

Careful reading of the law on coverage and employees right to self organization
will prove that with respect to employees right to self organization there is no
specific minimum number of employees in any particular establishment that is
required in order that the employees can enjoy the right to self organization.
ARTICLE 251. 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-organizations and to
form, join, or assist labor organizations of their own choosing for purposes
of collective bargaining. Ambulant, intermittent and itinerant workers, selfemployed people, rural workers and those without any definite employers
may form labor organizations for their mutual aid and protection.
ARTICLE 252. Right of Employees in the Public Service. Employees
of 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.
Jurisprudential Reference
The protection of workers' right to self-organization in no way
interfere with employer's freedom to enforce such rules and orders as
are necessary to proper conduct of his businesses, so long as
employer's supervision is not for the purpose of intimidating or
coercing his employees with respect to their self-organization and
representation. It is the functions of the court to see that the rights of
self-organization and collective bargaining guaranteed by the Act are
amply secured to the employee, but in its effort to prevent the
prescribed unfair labor practice, the court must be mindful of the
welfare of the honest employer.(Lakas Ng Manggagawang
Makabayan vs. Marcelo Enterprises, G.R. No. L-38258, November
19, 1982)
With respect to other civil servants, that is, employees of all branches,
subdivisions, instrumentalities and agencies of the government
including government-owned or controlled corporations with original
charters and who are, therefore, covered by the civil service laws, the
guidelines for the exercise of their right to organize is provided for
under Executive Order No. 180. Chapter IV thereof, consisting of
Sections 9 to 12, regulates the determination of the "sole and
exclusive employees' representative." (Trade Unions of the
Philippines and Allied Services vs. National Housing Corporation,
G.R. No. 49677, May 4, 1989)
The State guarantees the right of all workers to self-organization,
collective bargaining and negotiations, as well as peaceful concerted
activities, including the right to strike, in accordance with law. The
right to strike, however, is not absolute. It has heretofore been held
that a "no strike, no lock-out" provision in the Collective Bargaining
Agreement ("CBA") is a valid stipulation although the clause may be
invoked by an employer only when the strike is economic in nature or
one which is conducted to force wage or other concessions from the
employer that are not mandated to be granted by the law itself. It
would be inapplicable to prevent a strike which is grounded on unfair
labor practice. In this situation, it is not essential that the unfair labor
practice act has, in fact, been committed; it suffices that the striking
workers are shown to have acted honestly on an impression that the
company has committed such unfair labor practice and the
surrounding circumstances could warrant such a belief in good faith.
(Panay Electric Company, Inc. vs. NLRC, G.R. No. 102672, October
4, 1995)
IV.

Be reminded that under the present law and jurisprudence, the mixture of
membership is no longer a ground for cancellation of the unions registration and

the unions status as a legitimate labor organization cannot be challenged in the

certification election cases.
ARTICLE 253. 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.
ARTICLE 254. 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 the cancellation of the
registration of the union. Said employees are automatically deemed removed
from the list of membership of said union.
Jurisprudential References
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 companydominated with the presence of managerial employees in Union
membership. (Bulletin Publishing Corp. vs. Augusto S. Sanchez,
G.R. No. 74425, October 7, 1986)
Determining the status of supervisory and rank-and-file employees is
not a hard row to hoe in labor law. The test of supervisory status as we
have repeatedly ruled is whether an employee possesses authority to
act in the interest of his employer, which authority should not be
merely routinary or clerical in nature but requires the use of
independent judgment. Corollarily, what determines the nature of
employment is not the employee's title, but his job description.
(Dunlop Slazenger (Phils.) vs. Secretary of Labor, G.R. No. 131248,
December 11, 1998)
The test of "supervisory" or "managerial status" depends on whether a
person possesses authority to act in the interest of his employer and
whether such authority is not merely routinary or clerical in nature,
but requires the use of independent judgment. (Clientlogic Phil., Inc.,
et al. vs. Benedict Castro, G.R. No. 186070, April 11, 2011)
While above-quoted Article 245 expressly prohibits supervisory
employees from joining a rank-and-file union, it does not provide
what would be the effect if a rank-and-file union counts supervisory
employees among its members, or vice-versa. (Tagaytay Highlands

International Golf Club Incorporated vs. Tagaytay Highlands

Employees Union-PGTWO, G.R. No. 142000, January 22, 2003)
Confidential employees, by the very nature of their functions, assist
and act in a confidential capacity to, or have access to confidential
matters of, person who exercise managerial functions in the field of
labor relations. Therefore, the rationale behind the ineligibility of
managerial employees to form, assist or join a labor union was held
equally applicable to them.
An important element of the "confidential employee rule" is the
employee's need to use labor relations information. Thus, in
determining the confidentiality of certain employees, a key question
frequently considered is the employees' necessary access to
confidential labor relations information. (San Miguel Corp.
Supervisors vs. Bienvenido E. Laguesma, G.R. No. 110399, August
15, 1997)
While 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. (Standard Chartered Bank Employees Union
vs. Standard Chartered Bank, et al., G.R. No. 161933, April 22,
2008; Republic of the Phil. vs. Kawashima Textile Mfg., Phil., Inc.,
G.R. No. 160352, July 23, 2008; Tunay na Pagkakaisa ng
Manggagawa sa Asia Brewery vs. Asia Brewery, Inc., G.R. No.
162025, August 3, 2010)
Confidential employees are defined as those who (1) assist or act in a
confidential capacity, (2) to persons who formulate, determine, and
effectuate management policies in the field of labor relations. The two
(2) criteria are cumulative, and both must be met if an employee is to
be considered a confidential employee that is, the confidential
relationship must exist between the employee and his supervisor, and
the supervisor must handle the prescribed responsibilities relating to
labor relations. The exclusion from bargaining units of employees
who, in the normal course of their duties, become aware of
management policies relating to labor relations is a principal objective
sought to be accomplished by the "confidential employee rule."
(Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery vs. Asia
Brewery, Inc., G.R. No. 162025, August 3, 2010: San Miguel Foods,
Inc. vs. San Miguel Corp. Supervisors and Exempt Union, G.R. No.
146206, August 1, 2011)
The position of Payroll Master does not involve dealing with
confidential labor relations information in the course of the

performance of his functions. Since the nature of his work does not
pertain to company rules and regulations and confidential labor
relations, it follows that he cannot be excluded from the subject
bargaining unit. . . . The positions of Human Resource Assistant and
Personnel Assistant belong to the category of confidential employees
and, hence, are excluded from the bargaining unit, considering their
respective positions and job descriptions. As Human Resource
Assistant, the scope of one's work necessarily involves labor relations,
recruitment and selection of employees, access to employees' personal
files and compensation package, and human resource management. As
regards a Personnel Assistant, one's work includes the recording of
minutes for management during collective bargaining negotiations,
assistance to management during grievance meetings and
administrative investigations, and securing legal advice for labor
issues from the petitioner's team of lawyers, and implementation of
company programs. Therefore, in the discharge of their functions,
both gain access to vital labor relations information which outrightly
disqualifies them from union membership. (San Miguel Foods, Inc.
vs. San Miguel Corp. Supervisors and Exempt Union, G.R. No.
146206, August 1, 2011)
Corollarily, 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. Confidential employees are thus excluded
from the rank-and-file bargaining unit. The rationale for their separate
category and disqualification to join any labor organization is similar
to the inhibition for managerial employees, because if allowed to be
affiliated with a union, the latter might not be assured of their loyalty
in view of evident conflict of interests and the union can also become
company-denominated with the presence of managerial employees in
the union membership. Having access to confidential information,
confidential employees may also become the source of undue
advantage. Said employees may act as a spy or spies of either party to
a collective bargaining agreement. (San Miguel Foods, Inc. vs. San
Miguel Corp. Supervisors and Exempt Union, G.R. No. 146206,
August 1, 2011)
V.

The following article emanated from Section 3, Article 13 of the 1987

Constitution. This is better explained by the provisions of the law on unfair labor
practice.
ARTICLE 255. 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.
VI.

Articles 256 258 refer to the law on unfair labor practice. It may be observed that
the law prohibits double recovery of damages. This is to avoid unjust enrichment.
This means that if the offended party or private complainant in the criminal case
was awarded with damages in the proceedings before the NLRC, he is no longer
entitled to any damages in any criminal proceedings.
ARTICLE 256. 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 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 administrative proceeding referred to 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.

ARTICLE 257. 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 withdraw 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 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
collective 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
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 attorneys 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.
ARTICLE 258.
Unfair Labor Practices of Labor Organizations. It
shall be unfair labor practice for a labor organizations, its officers, agents
or representatives:
(a) To restrain or coerce employees in the exercise of their right to selforganization. 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 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 negotiations or attorney's fees from employer 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.
Jurisprudential References
[T]he prohibited acts considered as ULP relate to the workers' right to
self-organization and to the observance of a CBA. It refers to "acts
that violate the workers' right to organize." Without that element, the
acts, even if unfair, are not ULP. Thus, an employer may only be held
liable for unfair labor practice if it can be shown that his acts affect in
whatever manner the right of his employees to self-organize.
(Bankard, Inc. vs. NLRC-First Division, et al., G.R. No. 171664,
March 6, 2013)
A finding of an unfair labor practice is not to be taken lightly for the
Labor Code has again criminalized these practices. (Magnolia
Corporation vs. NLRC, G.R. No. 116813, November 24, 1995)
By the very nature of an unfair labor practice, it is not only a violation
of the civil rights of both labor and management but is also a criminal
offense against the State which is subject to prosecution and
punishment. (Hongkong and Shanghai Banking Corp. vs. NLRC,
G.R. No. 125038, November 6, 1997)
What it settled law, dating from the case of Standard Cigarette
Workers' Union v. Court of Industrial Relations, decided in 1957, is
that if it were a labor organization objecting to the participation in a
certification election of a company-dominated union, as a result of
which a complaint for an unfair labor practice case against the

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employer was filed, the status of the latter union must be first cleared
in such a proceeding before such voting could take place. (Juan S.
Barrera vs. Court of Industrial Relations, G.R. No. L-32853,
September 25, 1981)
In labor jurisprudence, it is well established that quitclaims and/or
complete releases executed by the employees do not estop them from
pursuing their claims arising from the unfair labor practice of the
employer. The basic reason for this is that such quitclaims and/or
complete releases are against public policy and, therefore, null and
void. The acceptance of termination pay does not divest a laborer of
the right to prosecute his employer for unfair labor practice acts.
(Armed Forces of the Phil. Mutual Benefit Asso., Inc. vs. AFPMBAI-EU, G.R. Nos. L-39140 & 39145, May 17, 1980)
Quitclaims and/or complete releases executed by the employees do
not estop them from pursuing their claims arising from unfair labor
practices of the employer. The basic reason for this is that such
quitclaims and/or complete releases are against public policy and,
therefore, null and void. The acceptance of termination does not divest
a laborer of the right to prosecute his employer for unfair labor
practice acts. (Lourdes G. Marcos vs. NLRC, G.R. No. 111744,
September 8, 1995)
[The employer] had an existing CBA with a union, which agreement
must be respected in any move affecting the security of tenure of
affected employees; otherwise, it ran the risk of committing unfair
labor practice both a criminal and an administrative offense.
(Farley Fulache, et al. vs. ABS-CBN Broadcasting Corp., G.R. No.
183810, January 21, 2010)
It is the settled jurisprudence that it is an unfair labor practice for an
employer not to reinstate, or re-employment to, members of union
who abandon their strike and make unconditional offer to return to
work. (Lakas ng Manggagawang Makabayan vs. Marcelo
Enterprises, G.R. No. L-38258, November 19, 1982)
Contracting out of services is an exercise of business judgment or
management prerogative. Absent any proof that management acted in
a malicious or arbitrary manner, the Court will not interfere with the
exercise of judgment by an employer. Furthermore, bear in mind that
ULP is punishable with both civil and/or criminal sanctions. As such,
the party so alleging must necessarily prove it by substantial evidence.
The Union, as earlier noted, failed to do this. Bankard merely validly
exercised its management prerogative. Not shown to have acted
maliciously or arbitrarily, no act of ULP can be imputed against it.
(Bankard, Inc. vs. NLRC-First Division, et al., G.R. No. 171664,
March 6, 2013)

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The employer's right to conduct the affairs of its business, according

to its own discretion and judgment, is well-recognized. Management
has a wide latitude to conduct its own affairs in accordance with the
necessities of its business. As the Court once said:
The Court has always respected a company's exercise of its prerogative to devise
means to improve its operations. Thus, we have held that management is free to
regulate, according to its own discretion and judgment, all aspects of employment,
including hiring, work assignments, supervision and transfer of employees,
working methods, time, place and manner of work.

This is so because the law on unfair labor practices is not intended to

deprive employers of their fundamental right to prescribe and enforce
such rules as they honestly believe to be necessary to the proper,
productive and profitable operation of their business. (Bankard, Inc.
vs. NLRC-First Division, et al., G.R. No. 171664, March 6, 2013)
All employees in the bargaining unit covered by a Union Shop Clause
in their CBA with management are subject to its terms. However,
under law and jurisprudence, the following kinds of employees are
exempted from its coverage, namely, employees who at the time the
union shop agreement takes effect are bona fide members of a
religious organization which prohibits its members from joining labor
unions on religious grounds; employees already in the service and
already members of a union other than the majority at the time the
union shop agreement took effect; confidential employees who are
excluded from the rank and file bargaining unit; and employees
excluded from the union shop by express terms of the agreement.
(BPI vs. BPI Employees Union-Davao Chapter-Federation of
Unions in BPI Unibank, G.R. No. 164301, August 10, 2010)
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 wields group solidarity. (BPI vs.
BPI Employees Union-Davao Chapter-Federation of Unions in BPI
Unibank, G.R. No. 164301, August 10, 2010)
In terminating the employment of an employee by enforcing the union
security clause, the employer needs to determine and prove that: (1)
the union security clause is applicable; (2) the union is requesting for
the enforcement of the union security provision in the CBA; and (3)
there is sufficient evidence to support the decision of the union to
expel the employee from the union. These requisites constitute just
cause for terminating an employee based on the union security
provision of the CBA. (PICOP Resources, Inc. vs. Anacleto L.
Taeca, et al., G.R. No. 160828, August 9, 2010)

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No requirement of written authorization from the non-union

employees is needed to effect a valid check off. Article 248 (e) makes
it explicit that Article 241, paragraph (o), requiring written
authorization is inapplicable to non-union members, especially in this
case where the non-union employees receive several benefits under
the CBA. (Del Pilar Academy, et al. vs. Del Pilar Academy
Employees Union, G.R. No. 170112, April 30, 2008)
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 . . . (Del Pilar Academy, et al.
vs. Del Pilar Academy Employees Union, G.R. No. 170112, April 30,
2008)
It is State policy to promote unionism to enable workers to negotiate
with management on an even playing field and with more
persuasiveness than if they were to individually and separately bargain
with the employer. For this reason, the law has allowed stipulations
for "union shop" and "closed shop" as means of encouraging workers
to join and support the union of their choice in the protection of their
rights and interest vis--vis the employer. (General Milling Corp. vs.
Ernesto Casio, et al., G.R. No. 149552, March 10, 2010)
VII. As what had been emphasized during the class discussion, both the employer and
the union have the common duty to freely negotiate an agreement. While it is a
common practice that the union usually submits a statement of its proposals,
nothing in the law that prohibits the employer to submit its statement of proposals
without waiting for the union to make the first move.
ARTICLE 259.
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

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(e) The Board shall exert all efforts to settle disputes amicably and
encourage the parties to submit their case to a voluntary arbitrator.
ARTICLE 260.
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.
ARTICLE 261.
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 agreements 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 262.
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.
Jurisprudential References
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. (Kiok Loy vs. National Labor Relations
Commission, G.R. No. L-54334, January 22, 1986)
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 consequences of these principles is that the

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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. . . . Although an employer has the
undoubted right to bargain with a bargaining agent whose authority
has been established, without the requirement that the bargaining
agent be officially certified by the National Labor Relations Board as
such, if the informally presented evidence leaves a real doubt as to the
issue, the employer has a right to demand a certification and to refuse
to negotiate until such official certification is presented. (Lakas Ng
Manggagawang Makabayan vs. Marcelo Enterprises, G.R. No. L38258, November 19, 1982)
In the bargaining process, the workers and employer shall be
represented by their exclusive bargaining representatives. The labor
organization designated or selected by the majority of employees in an
appropriate collective bargaining unit, shall be the exclusive
representative of the employees in such unit for the purpose of
collective bargaining. (Balmar Farms, Inc. vs. National Labor
Relations Commission, G.R. No. 73504, October 15, 1991; UFEDFA-KMU vs. Nestl Phil. Inc., G.R. Nos. 158930-31 & 158944-45,
March 3, 2008)
Until a new CBA is 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 on which
economic provisions of the existing agreement are to retain its force
and effect. Therefore, it must be understood as encompassing all the
terms and conditions in the said agreement. (FAMIT vs. Court of
Appeals, et al., G.R. No. 164060, June 15, 2007; New Pacific
Timber & Supply Company, Inc. v. NLRC, G.R. No. 124224, March
17, 2000; UFE-DFA-KMU vs. Nestl Phil. Inc., G.R. Nos. 15893031 & 158944-45, March 3, 2008; Lepanto Ceramics, Inc. vs.
Lepanto Ceramics Employees Ass'n., G.R. No. 180866, March 2,
2010)
VIII. The terms of the collective bargaining agreement are as follows: (a) five (5) years
with respect to the representation aspect; and (b) three (3) years with respect to any
other provisions of the CBA; and (c) therefore, except for the representation
aspect, the provisions of the CBA can be renewed after three (3) years for the
period of two (2) years. Take note of the retroactivity of the agreement counted
from the date of expiry: (a) if entered into within six months from the date of
expiry, it shall retroact to the day immediately following such date; and (b) if

15

entered beyond six (6) months, the parties shall agree on the duration of
retroactivity.
ARTICLE 263. 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 sixtyday 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.
Jurisprudential References
The filing of a petition for certification election during the 60-day
freedom period gives rise to a representation case that must be
resolved even though a new CBA has been entered into within that
period. This is clearly provided for in the aforequoted Section 4, Rule
V, Book V of the Omnibus Rules Implementing the Labor Code. The
reason behind this rule is obvious. A petition for certification election
is not necessary where the employees are one in their choice of a
representative in the bargaining process. Moreover, said provision of
the Omnibus Rules manifests the intent of the legislative authority to
allow, if not encourage, the contending unions in a bargaining unit to
hold a certification election during the freedom period. (Oriental Tin
Can Labor Union vs. Secretary of Labor, G.R. Nos. 116751 &
116779, August 28, 1998)
The agreement prematurely signed by the union and the company during the
freedom period does not affect the petition for certification election filed by
another union. (Warren Manufacturing Workers Union vs. Bureau of
Labor Relations, G.R. No. L-76185, March 30, 1988)
A bargaining unit is "a group of employees of a given employer, comprised
of all or less than all of the entire body of employees, consistent with equity
to the employer indicate to be the best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining provisions of the
law." The factors in determining the appropriate collective bargaining unit
are (1) the will of the employees (Globe Doctrine); (2) affinity and unity of
the employees' interest, such as substantial similarity of work and duties, or

16

similarity of compensation and working conditions (Substantial Mutual

Interests Rule); (3) prior collective bargaining history; and (4) similarity of
employment status. 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. (International School Alliance of Educators vs. Leonardo A.
Quisumbing, G.R. No. 128845, June 1, 2000)
An appropriate bargaining unit is defined as a group of employees of a given
employer, comprised of all or less than all of the entire body of employees,
which the collective interest of all the employees, consistent with equity to
the employer, indicate to be best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the law.
(San Miguel Foods, Inc. vs. San Miguel Corp. Supervisors and Exempt
Union, G.R. No. 146206, August 1, 2011)
The test of grouping is community or mutuality of interest. This is so
because 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. (San Miguel
Foods, Inc. vs. San Miguel Corp. Supervisors and Exempt Union, G.R.
No. 146206, August 1, 2011, citing National Association of Free Trade
Unions v. Mainit Lumber Development Company Workers Union-United
Lumber and General Workers of the Phils., G.R. No. 79526, December 21,
1990)