ART.

263 – Duty to Bargain Collectively Upon expiration of the tailings permit of MMC DENR-
The duty to bargain means the performance of a mutual EMB did not issue a permanent permit due to the
obligation to meet and convene promptly and inability of MMC to secure an Environmental Compliance
expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours Certificate (ECC). which compelled it to temporarily shut
of work and all other terms and conditions of down its mining operations, resulting in the temporary
employment including proposals for adjusting any
lay-off of more than 400 employees in the mine site
grievances or questions arising under such agreement
and executing a contract incorporating such agreements including the petitioners herein.
if requested by either party but such duty does not
compel any party to agree to a proposal or to make any MMC called for the suspension of negotiations on the
concession.
CBA with the Union until resumption of mining
MANILA MINING CORP EMPLOYEES ASSOCIATION operations. Complainants challenged the validity of their
v. MANILA MINING CORP.
G.R. Nos. 178222-23 lay-off on the averment that MMC was not suffering
September 29, 2010 from business losses. They alleged that MMC did not
Respondent Manila Mining Corporation (MMC) is a want to bargain collectively with the Union, so that
publicly-listed corporation engaged in large-scale instead of submitting their counterproposal to the CBA,
mining for gold and copper ore. MMC is required by law MMC decided to terminate all union officers and active
to maintain a tailings containment facility to store the members. Petitioners questioned the timing of their lay-
waste material generated by its mining off, and alleged that
operations. Meanwhile, the Union filed with the
- first, there was no showing that cost-cutting
Department of Labor and Employment (DOLE) all the
measures were taken by MMC;
requirements for its registration. The Union acquired its
- second, no criteria were employed in choosing
legitimate registration status and subsequently
which employees to lay-off; and
submitted letters to MMC relating in its intention to
bargain collectively.
 - third, the individuals laid-off were those who humiliation, wounded feelings or grave anxiety.
signed the attendance sheet of the union While the law makes it an obligation for the
organizational meeting. employer and the employees to bargain
collectively with each other, such compulsion does
Respondents justified the temporary lay-off as bona
not include the commitment to precipitately
fide in character and a valid management prerogative
accept or agree to the proposals of the other. All
pending the issuance of the permit to continuously
it contemplates is that both parties should
operate TP No. 7.
approach the negotiation with an open mind and
make reasonable effort to reach a common
The labor arbiter ruled in favor of MMC and held that
ground of agreement.The Union based its
the temporary shutdown of the mining operation, as
contention on the letter request by MMC for the
well as the temporary lay-off of the employees, is valid.
suspension of the collective bargaining
ISSUE: Whether or not MMC deliberately avoided the negotiations until it resumes operations. Verily, it
negotiation with the union and thus guilty of unfair cannot be said that MMC deliberately avoided the
labor practice negotiation. It merely sought a suspension and in
fact, even expressed its willingness to negotiate
No. Unfair labor practice cannot be imputed to
once the mining operations resume. There was
MMC since the call of MMC for a suspension of the
valid reliance on the suspension of mining
CBA negotiations cannot be equated to refusal to
operations for the suspension, in turn, of the CBA
bargain. For a charge of unfair labor practice to
negotiation. The Union failed to prove bad faith in
prosper, it must be shown that the employer was
MMCs actuations.
motivated by ill-will, bad faith or fraud, or was
oppressive to labor. The employer must have
Even as we declare the validity of the lay-off, we cannot
acted in a manner contrary to morals, good
say that MMC has no obligation at all to the laid-off
customs, or public policy causing social
employees. The validity of its act of suspending its
operations does not excuse it from paying separation
pay.
GENERAL MILLING CORPORATION vs HON. COURT
OF APPEALS, GENERAL MILLING CORPORATION
INDEPENDENT LABOR UNION (GMC-ILU), and
RITO MANGUBAT
G.R. No. 146728
February 11, 2004
FACTS:
- In its two plants located at Cebu City and
Lapu-Lapu City, petitioner General Milling
Corporation (GMC) employed 190 workers.
They were all members of private respondent
General Milling Corporation Independent Labor
Union.
- On April 28, 1989, GMC and the union
concluded a collective bargaining agreement
(CBA) which included the issue of
representation effective for a term of three
years.
- The day before the expiration of the CBA, the
union sent GMC a proposed CBA, with a
request that a counter-proposal be submitted
within ten (10) days.
- However, GMC had received collective and
individual letters from workers who stated that
they had withdrawn from their union
membership, on grounds of religious affiliation
and personal differences. Believing that the
union no longer had standing to negotiate a
CBA, GMC did not send any counter-proposal.
On December 16, 1991, GMC wrote a letter to the
union’s officers, RitoMangubat and Victor Lastimoso.
The letter stated that it felt there was no basis to
negotiate with a union which no longer existed, but that
management was nonetheless always willing to dialogue
with them on matters of common concern and was open
to suggestions on how the company may improve its
operations.
In answer, the union officers wrote a letter dated
December 19, 1991 disclaiming any massive
disaffiliation or resignation from the union and
submitted a manifesto, signed by its members, stating
that they had not withdrawn from the union.
NLRC held that the action of GMC in not negotiating was
ULP.
Issue: Whether or not GMC failed in its duty to
bargain collectively under Art. 263 in relation to
Art. 248 (g)
Ruling: Yes, GMC failed in its duty under Art 263 in
relation to Art. 248. The latter provides that ‘It shall be
unlawful for an employer to violate the duty to bargain
collectively as prescribed by this Code
Under Article 263, both parties are required to perform
their mutual obligation to meet and convene promptly
and expeditiously in good faith for the purpose of
negotiating an agreement. The union lived up to this
obligation when it presented proposals for a new CBA to
GMC within three (3) years from the effectivity of the
original CBA. But GMC failed in its duty under Article
252. What it did was to devise a flimsy excuse, by
questioning the existence of the union and the status of
its membership to prevent any negotiation.
DAVAO INTEGRATED PORT STEVEDORING
SERVICES, petitioner, vs. RUBEN V. ABARQUEZ, at.
al., respondents
GR No. 102132
March 19, 1993
FACTS:
- Petitioner and private respondent, THE
ASSOCIATION OF TRADE UNIONS (ATU-TUCP),
entered into a CBA providing for 2 sections on
sick leave with pay benefits which apply to
both the regular non-intermittent workers or
those workers who render a daily eight-hour
service to the company as governed by Section
1, Article VIII of the 1989 CBA, and the
intermittent field workers who are members of
the regular labor pool and the present regular
extra labor pool, as governed by Sec. 3
thereof.
- Sec. 1, however, of said CBA had a proviso
that only those regular workers of the
company whose work are not intermittent, are
entitled to the commutation of sick leave
privilege. A proviso not found in Sec. 3. This
caused the new assistant manager to
discontinue the commutation of the unenjoyed
portion of the sick leave with pay benefits of
the intermittent workers or its conversion to
cash.
- The Union objected to the said discontinuance
of commutation or conversion to cash of the
unenjoyed sick leave with pay benefits of
petitioner's intermittent workers contending
that it is a deviation from the true intent of the
parties that negotiated the CBA; that it would
violate the principle in labor laws that benefits
already extended shall not be taken away and
that it would result in discrimination between
the non-intermittent and the intermittent
workers of the petitioner-company.
- The Union brought the matter for voluntary
arbitration before the National Conciliation and
Mediation Board with respondent Abarquez
acting as voluntary arbitrator who later issued
an award in favor of the Union. Hence, the
instant petition.
Issue: Whether or notDavao Integrated Port
Stevedoring Services must pay the intermittent
workers their unenjoyed portion of the sick leave
as stipulated in the CBA
Yes, 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.
It is thus erroneous for petitioner to isolate Section 1,
Article VIII of the 1989 CBA from the other related
section on sick leave with pay benefits, specifically
Section 3 thereof, in its attempt to justify the
discontinuance or withdrawal of the privilege of
commutation or conversion to cash of the unenjoyed
portion of the sick leave benefit to regular intermittent
workers. The manner they were deprived of the
privilege previously recognized and extended to them
by petitioner-company during the lifetime of the CBA of
October 16, 1985 until three (3) months from its
renewal on April 15, 1989, or a period of three (3)
years and nine (9) months, is not only tainted with
arbitrariness but likewise discriminatory in nature. It
must be noted that the 1989 CBA has two (2) sections
on sick leave with pay benefits which apply to two (2)
distinct classes of workers in petitioner's company,
namely: (1) the regular non-intermittent workers or
those workers who render a daily eight-hour service to
the company and are governed by Section 1, Article
VIII of the 1989 CBA; and (2) intermittent field workers
who are members of the regular labor pool and the
present regular extra labor pool as of the signing of the
agreement on April 15, 1989 or those workers who
have irregular working days and are governed by
Section 3, Article VIII of the 1989 CBA. It is not
disputed that both classes of workers are entitled to
sick leave with pay benefits provided they comply with
the conditions set forth under Section 1 in relation to
the last paragraph of Section 3, to wit: (1) the
employee-applicant must be regular or must have
rendered at least one year of service with the company;
and (2) the application must be accompanied by a
certification from a company-designated physician. the
phrase "herein sick leave privilege," as used in the last
sentence of Section 1, refers to the privilege of having a
fixed 15-day sick leave with pay which, as mandated by
Section 1, only the non-intermittent workers are
entitled to. This fixed 15-day sick leave with pay benefit
should be distinguished from the variable number of
days of sick leave, not to exceed 15 days, extended to
intermittent workers under Section 3 depending on the
number of hours of service rendered to the company,
including overtime pursuant to the schedule provided
therein. It is only fair and reasonable for petitioner-
company not to stipulate a fixed 15-day sick leave with
pay for its regular intermittent workers since, as the
term "intermittent" implies, there is irregularity in their
work-days. Reasonable and practical interpretation
must be placed on contractual provisions.
Interpetatiofiendaestut res magisvaleatquampereat.
Such interpretation is to be adopted, that the thing may
continue to have efficacy rather than fail.

HERALD DELIVERY CARRIERS UNION (PAFLU) and
PHILIPPINE ASSOCIATION OF FREE LABOR
UNIONS (PAFLU), Petitioners, vs. HERALD
PUBLICATION, INC., Respondent.
G.R. No. L-29966
February 28, 1974
Facts:
"1. Respondent employer, after it was served with
written bargaining proposals by petitioner union in
behalf of 90 of respondent's delivery and carrier
workers, undertook to act unilaterally and without
notice to petitioner union on a subject of mandatory
bargaining by contracting out with 12 so-called
independent contractors the work done by said delivery
and carrier workers, thereby affecting their separation
and undercutting the bargaining relationship with
petitioner union.
2. Respondent employer never did submit an answer or
reply tendering an issue respecting the written
bargaining proposal submitted by petitioner union,
thereby violating its statutory duty to make a reply
thereto not later than ten (10) days from receipt of
such proposals
3. Respondent employer evaded its duty to bargain
collectively through unfulfilled promises of submitting
an answer or counter-proposals, or of taking up the
demands submitted by petitioner Union in meetings or
conferences." All that was mentioned in the answer of
respondent Herald Publications on the above points
were to the effect that: "When petitioners presented
their bargaining proposals to respondent company, the
latter sent a reply asserting that the carriers are
independent contractors and not employees. This reply
placed in issue the right of the carriers and their
representatives to bargain collectively with respondent
company.
Issue: Whether respondent company failed to bargain
collectively in good faith
Ruling:
Yes, while the law does not compel the parties to reach
agreement, it does contemplate that both parties will
approach the negotiations with an open mind and will
make a reasonable effort to reach a common ground of
agreement." 13 The same thought found expression in a
later decision, with its stress on "the incontestably
sound principle" that the employer "had a duty to
negotiate in good faith with his employees'
representatives, to match their proposals, if
unacceptable, with counterproposals; and to make
every reasonable effort to reach an agreement." 14 The
Wagner Act called for a more explicit declaration. There
must be, according to National Labor Relations Board v.
Pilling and Son Co., 15 "common willingness among the
parties to discuss freely and fully their respective claims
and demands and, when these are opposed, to justify
them on reason." 16 Professor Cox added: "Although the
law cannot open a man's mind, it can at least compel
him to conduct himself as if he were trying to persuade
and were willing to be persuaded. To offer the union a
contract saying 'Take it or leave it,' is not bargaining
collectively within the meaning of the act." 17 These are
among the indicia referred to by him to indicate lack of
good faith: "Stalling the negotiations by unexplained
delays in answering correspondence and ... unnecessary
postponement of meeting ... ." 18 In the latest work on
the subject, 19 Professor Smith, also an authoritative
voice, wrote on the present state of American law thus:
"As a minimum it would seem that the Act prescribes a
superficial pretense at bargaining - fictitious negotiation
which essentially denies recognition of a union.
However, manifestations of such activity may be subtle
and hard to detect. Even when it is not, the manner in
which 'sham bargaining' can be prevented presents
problems. Statutory antinomy arises because as a
matter of legislative history, meaningful bargaining was
to be accomplished by 'leading the parties to the
bargaining table' without intrusions into the
negotiations, and, in any event, without compelling
either party to agree to a proposal or make a
concession." 20c

Nothing can be clearer, therefore, than that on the

undisputed facts, there was a failure on the part of
private respondent to yield obedience to the law's
command that it should bargain in good faith.

NEW PACIFIC TIMBER SUPPLY COMPANY, CO. v.
NLRC
[G.R. No. 124224
March 17, 2000]
SC: Petition was dismissed.
[Rationale: 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.]
WHAT ARE THE ISSUES?
1. May the term of a Collective Bargaining Agreement (CBA) as
to its economic provisions be extended beyond the term
expressly stipulated therein, and,
2. in the absence of a new CBA, even beyond the three-year
period provided by law? Are employees hired after the
stipulated term of a CBA entitled to the benefits provided
thereunder?
Petitioner’s arguments:
I. As for the term of the CBA, petitioner maintains
that Article 253 of the Labor Code refers to the
continuation in full force and effect of the
previous CBA's terms and conditions. By
necessity, it could not possibly refer to terms
and conditions which, as expressly stipulated,
ceased to have force and effect. [no contractual
basis for the grant of CBA benefits such as wage
increases in 1985 and subsequent years, since the
CBA stipulates only the increases for the years 1981
to 1984.]
II. petitioner argues that the private respondents
are not entitled to the benefits under the CBA
because employees hired after the term of a
CBA are not parties to the agreement, and
therefore, may not claim benefits thereunder,
even if they subsequently become members of
the bargaining unit.
WHAT HAPPENED?
The National Federation of Labor (NFL, for brevity) was certified
as the sole and exclusive bargaining representative of all the
regular rank-and-file employees of New Pacific Timber & Supply
Co., Inc. (hereinafter referred to as petitioner Company).[1] As
such, NFL started to negotiate for better terms and conditions of
employment for the employees in the bargaining unit which it
represented. However, the same was allegedly met with stiff force and effect the terms and conditions of the
resistance by petitioner Company, so that the former was existing agreement. The law does not provide for any
prompted to file a complaint for unfair labor practice (ULP) exception nor qualification as to which of the economic
against the latter on the ground of refusal to bargain collectively.
provisions of the existing agreement are to retain force
RULING OF THE SUPREME COURT and effect; therefore, it must be understood as
encompassing all the terms and conditions in the said
agreement.
Anent the issue of whether or not the term of an existing
CBA, particularly as to its economic provisions, can be In the case at bar, no new agreement was entered into by and
extended beyond the period stipulated therein, and even between petitioner Company and NFL nor were any of the
beyond the three-year period prescribed by law, in the economic provisions and/or terms and conditions pertaining to
absence of a new agreement, Article 253 of the Labor monetary benefits in the existing agreement modified or altered.
Code explicitly provides: Therefore, the existing CBA in its entirety, continues to have
legal effect.
ART. 253. Duty to bargain collectively when
there exists a collective bargaining Having established that the CBA between petitioner Company
agreement. - When there is a collective and NFL remained in full force and effect even beyond the
bargaining agreement, the duty to bargain stipulated term, in the absence of a new agreement; and,
therefore, that the economic provisions such as wage increases
collectively shall also mean that neither party
continued to have legal effect, we are now faced with the
shall terminate nor modify such agreement question of who are entitled to the benefits provided thereunder.
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. (Underlining supplied. )

It is clear from the above provision of law that until a

new Collective Bargaining Agreement has been
executed by and between the parties, they are duty-
bound to keep the status quo and to continue in full

Whether the CBA extended to 10years is valid
RIVERA et. al, vs. Espiritu
[G.R. No. 135547
January 23, 2002]
SC: petition was dismissed
[Rationale:
- the representation limit for the exclusive
bargaining agent applies only when there is
an extant CBA in full force and effect. In
the instant case, the parties agreed to suspend
the CBA and put in abeyance the limit on the
representation period.
- In construing a CBA, the courts must be
practical and realistic and give due
consideration to the context in which it is
negotiated and the purpose which it is
intended to serve.
- Under the principle of inviolability of contracts guaranteed
by the Constitution (SECTION 10. No law impairing the obligation of
contracts shall be passed), the contract must be upheld.
WHAT ARE THE ISSUES?
WHAT HAPPENED?
- PAL pilots affiliated with the Airline Pilots
Association of the Philippines (ALPAP) went on
a three-week strike, causing serious losses
PAL. Faced with bankruptcy, PAL adopted a
rehabilitation plan and downsized its labor
force by more than one-third.
- PALEA went on strike to protest the
retrenchment measures adopted by PAL.
- The strike ended when the PALEA and PAL
agreed to a more systematic reduction of PAL’s
personnel and payment of the latter’s benefits
- Thereafter, President Estrada issued AO No. 16
creating a task force to address the problems
of PAL. The said task force was led by
Chairman Espiritu
- PAL management submitted a plan to the task
force on regarding the steps they will take to
address its problems. One of the pertinent
portions of the submitted plan was a request
for suspension of the CBA for 10 years.
- Union members, however, rejected Tan’s offer.
Under intense pressure from PALEA members,
the union’s directors subsequently resolved to
reject Tan’s offer.
- As a result, PAL shuts down its operation.
Several days later, PALEA informed PAL that it
had no objection whatsoever with the previous
 offer of the management and that it offered
10-year moratorium on strikes and similar
actions and a waiver of some of the economic
benefits in the existing CBA which was
subsequently accepted by PAL management.
- On the same date that PAL operations were
resumed, 7 officers and members of PALEA
filed a petition to annul the PAL-PALEA
agreement.
RULING OF THE SUPREME COURT
PETITIONER contended that the controverted PAL-
PALEA agreement is void because it abrogated the right
of workers to self-organization and their right to
[14]
collective bargaining. Petitioners claim that the
[15]
agreement was not meant merely to suspend the
existing PAL-PALEA CBA, which expires on September
30, 2000, but also to foreclose any renegotiation or any
possibility to forge a new CBA for a decade or up to
2008. It violates the protection to labor policy laid down
[16]
by the Constitution.
Under this provision, insofar as representation is
concerned, a CBA has a term of five years, while the
other provisions, except for representation, may be
negotiated not later than three years after the
execution. Petitioners submit that a 10-year CBA
[17]
suspension is inordinately long, way beyond the
maximum statutory life of a CBA, provided for in Article
253-A. By agreeing to a 10-year suspension, PALEA, in
effect, abdicated the workers constitutional right to
bargain for another CBA at the mandated time.
We find the argument devoid of merit.
A CBA is 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.The primary purpose of a CBA is the
stabilization of labor-management relations in order to
create a climate of a sound and stable industrial peace.
In construing a CBA, the courts must be practical and
realistic and give due consideration to the context in
which it is negotiated and the purpose which it is
intended to serve.[20]
The assailed PAL-PALEA agreement was the result
of voluntary collective bargaining negotiations
undertaken in the light of the severe financial situation
faced by the employer, with the peculiar and unique
intention of not merely promoting industrial peace at
PAL, but preventing the latters closure. We find no
conflict between said agreement and Article 253-A of the
Labor Code. Article 253-A has a two-fold purpose. One
is to promote industrial stability and
predictability. Inasmuch as the agreement sought to
promote industrial peace at PAL during its rehabilitation,
said agreement satisfies the first purpose of Article 253-
A. The other is to assign specific timetables wherein
negotiations become a matter of right and requirement.
Nothing in Article 253-A, prohibits the parties from
waiving or suspending the mandatory timetables and
agreeing on the remedies to enforce the same.
In the instant case, it was PALEA, as the exclusive
bargaining agent of PALs ground employees, that
voluntarily entered into the CBA with PAL. It was also
PALEA that voluntarily opted for the 10-year suspension
of the CBA. Either case was the unions exercise of its
right to collective bargaining. The right to free collective
bargaining, after all, includes the right to suspend it.
The acts of public respondents in sanctioning the 10-
year suspension of the PAL-PALEA CBA did not
contravene the protection to labor policy of the
Constitution. The agreement afforded full protection to
labor; promoted the shared responsibility between
workers and employers; and the
exercised voluntary modes in settling disputes, including
conciliation to foster industrial peace." [21]
Petitioners further allege that the 10-year suspension
of the CBA under the PAL-PALEA agreement virtually
installed PALEA as a company union for said period,
amounting to unfair labor practice, in violation of Article
253-A of the Labor Code mandating that an exclusive
bargaining agent serves for five years only.
The questioned proviso of the agreement reads:
a. PAL shall continue recognizing PALEA as the duly
certified-bargaining agent of the regular rank-and-file ground
employees of the Company;
Said proviso cannot be construed alone. In
construing an instrument with several provisions, a
construction must be adopted as will give effect to
all. Under Article 1374 of the Civil Code, contracts
[22]
cannot be construed by parts, but clauses must be
interpreted in relation to one another to give effect to the
whole. The legal effect of a contract is not determined
alone by any particular provision disconnected from all
others, but from the whole read together. The aforesaid
[23]
provision must be read within the context of the next
clause, which provides:
b. The union shop/maintenance of membership provision
under the PAL-PALEA CBA shall be respected.
The aforesaid provisions, taken together, clearly
show the intent of the parties to maintain union security
during the period of the suspension of the CBA. Its
objective is to assure the continued existence of PALEA
during the said period. We are unable to declare the
objective of union security an unfair labor practice. 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
interests vis--vis the employer. [24]
Petitioners contention that the agreement installs
PALEA as a virtual company union is also
untenable. Under Article 248 (d) of the Labor Code, a
company union exists when the employer acts [t]o
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. The case records are bare of
any showing of such acts by PAL.
We also do not agree that the agreement violates the
five-year representation limit mandated by Article 253-
A. Under said article, the representation limit for the
exclusive bargaining agent applies only when there is an
extant CBA in full force and effect. In the instant case,
the parties agreed to suspend the CBA and put in
abeyance the limit on the representation period.
In sum, we are of the view that the PAL-PALEA
agreement dated September 27, 1998, is a valid
exercise of the freedom to contract. Under the principle
of inviolability of contracts guaranteed by the
Constitution, the contract must be upheld.
[25]
WHAT ARE THE ISSUES?
Whether or not the petitioner FVC’s exclusive bargaining
representative status can be challenged only within 60days
counted from May 30, 2003 – the agreed 4 months extension
WHAT HAPPENED?
- FVC labor union and FVC Inc entered into a 5year CBA
which is from February 1, 1998 – January 30 2003.
- At the end of the3rd year of the five-year term and
pursuant to the CBA, FVCLU-PTGWO and the company entered
into the renegotiation of the CBA and modified the CBA’s
duration extending the original 5 years by four months

- Nine (9) days before the expiration of the original 5 year

agreed CBA, Samasamangnagkakaisangmanggagawa ng FVC
filed before DOLE petition for certification election
FVC LABOR UNION v SamasamangManggagawasa FVC
G.R. No. 176249
FVC labor union moved to dismiss the petition on the ground
November 27, 2009 that the certification election petition was filed outside the
freedom period or outside of the sixty (60) days before the
SC: dismissed the petition
expiration of the CBA on May 31, 2003.
[Rationale: By express provision of Art 265 the exclusive
bargaining status cannot go beyond five years and the
RULING OF THE SUPREME COURT
representation status is a legal matter not for the workplace
parties to agree upon. In other words, despite an agreement for
The root of the controversy can be traced to a misunderstanding
a CBA with a life of more than five years, either as an original
of the interaction between a union’s exclusive bargaining
provision or by amendment, the bargaining union’s exclusive
representation status in a CBA and the term or effective period
bargaining status is effective only for five years and can be
of the CBA.
challenged within sixty (60) days prior to the expiration of
Petitioner has taken the view that the representation status
the CBA’s first five years.]
should fully be in step with the term of the CBA and that this
status can be challenged only within 60 days before the In the event however, that the parties, by mutual agreement,
expiration of this term. Thus, when the term of the CBA was enter into a renegotiated contract with a term of three (3) years
extended, its exclusive bargaining status was similarly extended or one which does not coincide with the said five-year term and
so that the freedom period for the filing of a petition for said agreement is ratified by majority of the members in the
certification election should be counted back from the bargaining unit, the subject contract is valid and legal and
expiration of the amended CBA term. therefore, binds the contracting parties. The same will however
We hold this FVCLU-PTGWO position to be correct, but only with not
respect to the original five-year term of the CBA which, by law,
is also the effective period of the union’s exclusive bargaining
representation status. While the parties may agree to extend
the CBA’s original five-year term together with all other CBA
provisions, any such amendment or term in excess of five years
will not carry with it a change in the union’s exclusive collective
bargaining status. By express provision of the above-quoted
Article 2635, the exclusive bargaining status cannot go beyond
five years and the representation status is a legal matter not for
the workplace parties to agree upon. In other words, despite an
agreement for a CBA with a life of more than five years, either
as an original provision or by amendment, the bargaining
union’s exclusive bargaining status is effective only for five years
and can be challenged within sixty (60) days prior to the
expiration of the CBA’s first five years.

In the present case, the CBA was originally signed for a period of
five years, i.e., from February 1, 1998 to January 30, 2003, with
a provision for the renegotiation of the CBA’s other provisions at
the end of the 3rd year of the five-year CBA term. Thus, prior to
January 30, 2001 the workplace parties sat down for
renegotiation but instead of confining themselves to the
economic and non-economic CBA provisions, also extended the
life of the CBA for another four months, i.e., from the original
expiry date on January 30, 2003 to May 30, 2003.
SAN MIGUEL CORP EMPLOYEES UNION v CONFESOR
G.R. No. 111262.
September 19, 1996
SC: the petition was dismissed
Rationale: the legislators were more inclined to have the period of
effectivity for three (3) years insofar as the economic as well as non-
economic provisions are concerned, except representation.
WHAT IS THE ISSUE?
Whether or not the duration of the renegotiated terms of the CBA is to be
effective for three years or for only two years
WHAT HAPPENED?
- Petitioner union entered into a CBA with SMC to take
effect upon the expiration of the previous CBA on June 30,
1989. That the said CBA will bind the parties and their
successors-in-interests and will be effective until June 30
1992.
- the CBA provides, insofar as the representation aspect is
concerned that it will be for five years from July 1 1989 to
June 30 1994
- SMC informed its employees that it would undergo a
restructuring and notwithstanding the restructuring, the
CBA remained in force and effect
- After June 30, 1992, the CBA was renegotiated
- the petitioner-union insisted that the bargaining unit of SMC
should still include the employees of the spun-off corporations:
Magnolia and SMFI; and that the renegotiated terms of the CBA
shall be effective only for the remaining period of two years or
until June 30, 1994
- SMC contended that the members/employees who had moved
to Magnolia and SMFI, automatically ceased to be part of the
bargaining unit at the SMC. Furthermore, the CBA should be
effective for three years in accordance with Art. 253-A of the
Labor Code.
- Petitioner-union contends that the duration for the
nonrepresentation provisions of the CBA should be coterminous
with the term of the bargaining agency which in effect shall be
for the remaining two years of the current CBA
RULING OF THE SC
This new provision states that the CBA has a term of five (5) years instead of
three years, before the amendment of the law as far as the representation
aspect is concerned. All other provisions of the CBA shall be negotiated not
later than three (3) years after its exe-cution. The “representation aspect”
refers to the identity and majority status of the union that negotiated the
CBA as the exclusive bargaining representative of the appropriate
bargaining unit concerned. “All other provisions” simply refers to the rest of
the CBA, economic as well as non-economic provisions except
representation.
the framers of the law wanted to maintainindustrial 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 andconditions 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
termsand 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
In the instant case, it is not difficult to determine the period of effectivity
for the non-representation provisions of the CBA. Taking it from the history
of their CBAs, SMC intended to have the terms of the CBA effective for
three (3) years reckoned from the expiration of the old or previous CBA
which was on June 30, 1989.
As a matter of policy, the parties are encouraged (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 saidagreement 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 theCBA.
Port Workers Union of the Phils. (PWUP) vs. Laguesma
G.R. Nos. 94929-30
March 18, 1992
SC: grants the petition
Rationale: Deviation from the contract-bar rule is justified only
where the need for industrial stability is clearly shown to be
imperative.
WHAT IS/ARE THE ISSUES?
Whether or not the respondent company may deviate from the
contract bar rule due to the overwhelming ratification of the CBA
WHAT HAPPENED?
- The CBA of the respondent company and Associate Port
Checkers and Workers Union was about to expire and
other unions were seeking to represent the laborers in the
negotiation of the next CBA and were already plotting
their moves.
- first challenge was filed by SAMADA when it filed a
petition for certification election The consent signatures of
at least 25% of the employees in the bargaining unit were
- herein petitioner Port Workers Union of the Philippines
(PWUP) filed a petition for intervention.
- Still another petition for certification election was filed by
the Port Employees Association and Labor Union (PEALU)
- APCWU filed a motion to dismiss them on the ground that
they did not comply with the requirement set forth in
Section 6, Rule V, Book V of the Implementing Rules, which
requires that the signatures be submitted upon filing of
petition. This contention was upheld by the Med-Arbiter
- PWUP appealed to the Secretary of Labor, arguing that
Article 256 of the Labor Code did not require the written
consent to be submitted simultaneously with the petition
for certification election.
- required, first, ratification of the CBA, and second, affirmation of
- Laguesma affirmed the order of the Med-Arbiter and
dismissed PWUP’s appeal.
- Thereafter, ICTSI and APCWU resumed negotiations for a
new collective bargaining agreement, which was ratified
by a majority of the workers in the bargaining unit, and
subsequently registered with the DOLE.
- APCWU questions PWUP's personality in these
proceedings in view of the lack of consent signatures
in its petition, and argues as well that the petitioner
has no authority to represent SAMADA or PEALU,
which had not appealed. The private respondent also
invokes Tupas and maintains that the ratification of
the new CBA by the majority of the workers was an
affirmation of their membership in the union that
negotiated that agreement.
RULING OF THE SC
No, deviation from the contract-bar rule is justified only where the
need for industrial stability is clearly shown to beimperative. Subject
to this singular exception, contracts where the identity of the
authorized representative of the workers is in doubt must be rejected
in favor of a more certain indication of the will of the workers. As we
stated inPhilippine Association of Free Labor Union vs. Estrella, any
stability that does not establish the type of industrial peace
contemplated by the law must be subordinated to the employees’
freedom to choose theirreal representative.
The private respondents contend that the overwhelmingratification
of the CBA is an affirmation of their membership in the bargaining
agent, rendering the representation issue moot and academic and
conclusively barring the holding of a certification election thereon.
That conclusion does not follow. Even Tupas did not say that the
mere ratification of the CBA by most of the workers signified their
affirmation of membership in the negotiating union. That case
membership in the negotiating union. The second requirement has
not been established in the case at bar as the record does not show election, subject to the submission of the consent signatures
that the majority of the workers, besides ratifying the new CBA, have within a reasonable period from such filing.
also formally affiliated with APCWU.
Section 4, Rule V, Book V of the Omnibus Rules implementing the
Labor Code provides that the representation case shall not be
adversely affected by a collective agreement submitted before or
during the last 60 days of a subsisting agreement or during the
pendency of the representation case. As the new CBA was entered
into at the time when the representation case was still pending, it
follows that it cannot be recognized as the final agreement between
the ICTSI and its workers.

As to the certifcation election –

it has long been settled that the policy of the Labor Code is
indisputably partial to the holding of a certification election so as
to arrive in a manner definitive and certain concerning the
choice of the labor organization to represent the workers in a
collective bargaining unit. Conformably to said basic concept,
this Court recognized that the Bureau of Labor Relations in the
exercise of sound discretion, may order a certification election
notwithstanding the failure to meet the 30% requirement.
In line with the policy, we feel that the administrative rule
requiring the simultaneous submission of the 25% consent
signatures upon the filing of petition for certification election
should not be strictly applied to frustrate the determination of the
legitimate representative of the workers. Significantly, the
requirement in the rule is not found in Article 256, the law it
seeks to implement. This is all the more reason why the
regulation should at best be given only a directory effect.
Accordingly, we hold that the mere filing of a petition for
certification election within the freedom period is sufficient basis
for the issuance of an order for the holding of a certification
ALLIANCE OF NATIONALIST AND GENUINE LABOR
ORGANIZATION (ANGLO-KMU) vs SAMAHAN NG MGA
MANGAGAWANG NAGKAKAISA SA MANILA BAY
SPINNING MILLS AT J.P. COATS (SAMANA BAY),
[G.R. No. 118562. July 5, 1996]
SC: petition was dismissed
Rationale: even before the onset of the freedom period,
disaffiliation may be carried out when there is a shift of
allegiance on the part of the majority of the members
of the union
WHAT IS THE ISSUE?
Wheter or not SAMANA BAY may disaffiliate from ANGLO-KMU
prior to the freedom period
WHAT HAPPENED?
- Petitioner ANGLO is a duly registered labor organization while
respondent (SAMANA BAY is its affiliate.
- In representation of SAMANA BAY, ANGLO entered and
concluded a Collective Bargaining Agreement (CBA) with
Manila Bay Spinning Mills and J.P. Coats Manila Bay, Inc.
- the Executive Committee of SAMANA BAY decided to
disaffiliate from ANGLO. Said disaffiliation was unanimously
confirmed by the members of SAMANA BAY.
- a petition to stop remittance of federation dues to ANGLO was
filed by SAMANA BAY with the Bureau of Labor Relations on
the ground that the corporations, despite having been
furnished copies of the union resolution relating to said
disaffiliation, refused to honor the same.
- In its position paper, ANGLO contended that the disaffiliation
was void considering that a collective bargaining agreement is
still existing and the freedom period has not yet set in. The
Med-Arbiter resolved that the disaffiliation was void but
upheld the illegality of the ouster officers of SAMANA BAY.
RULING OF THE SC
Yes, settled is the rule that a local union has the right to
disaffiliate from its mother union when circumstances warrant.
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. However, even before the onset of the freedom
period, disaffiliation may be carried out when there is a
shift of allegiance on the part of the majority of the
members of the union.[6]
Coming now to the second issue, ANGLO contends
that individual private respondents were validly ousted as
they have ceased to be officers of the incumbent union
(ANGLO-KMU) at the time of disaffiliation. In order to fill
the vacuum, it was deemed proper to appoint the
individual replacements so as not to put in disarray the
organizational structure and to prevent chaos and
confusion among the general membership and within the
company.
The contention is bereft of merit. A local labor union
is a separate and distinct unit primarily designed to
secure and maintain an equality of bargaining power
between the employer and their employee-members. A
local union does not owe its existence to the federation
with which it is affiliated. It is a separate and distinct
voluntary association owing its creation to the will of its
members. The mere act of affiliation does not divest the
[7]
local union of its own personality, neither does it give the
mother federation the license to act independently of the
local union. It only gives rise to a contract of
agency where the former acts in representation of the
[8]

latter.
By SAMANA BAY's disaffiliation from ANGLO, the
vinculum that previously bound the two entities was
completely severed. ANGLO was divested of any and all
power to act in representation of SAMANA BAY. Thus,
any act performed by ANGLO affecting the interests and
affairs of SAMANA BAY, including the ouster of herein
individual private respondents, is rendered without force
and effect.
ORIENTAL TIN CAN LABOR UNION vs Secretary of Labor and
Employment
[G.R. No. 116751
August 28, 1998]
SC: dismissed the petition
Rationale: 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
WHAT IS THE ISSUE
Whether or not the ratification of the new CBA prior to the expiration
of freedom period nullify the petition for certification election
WHAT HAPPEN?
- Oriental Tin Can Company entered into CBA with OTCLU
(Oriental Tin Can Labor Union).
- 248 rank and file workers FFW to file a petition for certification
election. However, this petition was repudiated by waiver of
115 signatories who ratified the new CBA.
- During the Freedom Period, OTCWU-FFW filed a petition for
certification election, accompanied by “authentic signatures”
of 25% of employees.
- OTCLU filed motion for dismissal of the petition for certification
election. It said the petition was not endorsed by at least 25%
as some of the employees allegedly withdrew their support.
- Company filed comment alleging that the new CBA was already
ratified.
- OTCWU-FFW filed a reply, alleging that the employer has no
legal personality to oppose petition for certification election.
- DOLE issued certificate of registration of the CBA. It showed
that the CBA between the OTCLU and the company has the
force and effect of law.
- OTCWU-FFW officers walked out of their jobs. The union filed
notice of strike with NCMB.grounded on alleged dismissal of
union members/officers. Company directed the officers to
return to work. None of them did.
- The OTCLU contends that (a) in imposing upon the employees
the manner of choosing their collective bargaining
representative by ordering a certification election
notwithstanding the fact that the overwhelming majority of the
employees have already decided to retain the petitioner
(OCTLU) as their collective bargaining representative, and (b) in
giving due course to the petition for certification election even
though it lacked the required support of 25% of the
employees.
RULING OF SC
No, 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. Hence, the
Court held in the case of Warren Manufacturing Workers Union
(WMWU) v. Bureau of Labor Relations,[18] that 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.
MINDANAO TERMINAL AND BROKERAGE SERVICE, INC v
Confessor
G.R. No. 111809
May 5, 1997
Facts:
- Petitioner Mindanao Terminal and Brokerage Service, Inc.,
(hereafter referred to as the Company) and respondent
Associated Labor Unions, (hereafter referred to as the Union)
entered into a collective bargaining agreement for a period of
five (5) years, starting on August 1, 1989 and ending July 31,
1994.
- On the third year of the CBA on August 1, 1992, the Company
and the Union met to renegotiate the provisions of the CBA
for the fourth and fifth years. The parties, however, failed to
resolve some of their differences, as a result of which a
deadlock developed.
- On December 18, 1992, as a result of a conference called by
the NCMB, the Union and the Company went back to the
bargaining table and agreed on the following provisions of
their CBA, leaving only the issue of retirement which was also
settled on January 14, 1993.
- After submission by the parties of their position papers, the
Secretary of Labor issued an Order ordering the Company and
the Union to incorporate into their existing collective
bargaining agreement all improvements reached by them in
the course of renegotiations.
- The Secretary of Labor held the fourth year wage increase was
to be retroactive to August 1992 and was to be implemented
until July 31, 1993, while the fifth year wage increase was to
take effect on August 1, 1993 until the expiration of the CBA.
- The petitioner contends that respondent erred in making the
fourth year wage increase retroactive to August 1, 1992. It
denies the power of the Secretary of Labor to decree
retroaction of the wage increases, as the respondent herself
had stated in her order subject of this petition, that it had
been more than six (6) months since the expiration of the
third anniversary of the CBA and, therefore, the automatic
renewal clause of Art. 253-A of the Labor Code had no
application.
Issue: Whether or not automatic renewal will not apply
Ruling: No, The signing of the CBA is not determinative of the
question whether the agreement was entered into within six months
from the date of expiry of the term of such other provisions as fixed
in such collective bargaining agreement within the contemplation of
Art. 253-A.
As already stated, on November 12, 1992, the Union sent the
Company a notice of deadlock in view of their inability to reconcile
their positions on the main issues,[3] particularly on wages. The Union
filed a notice of strike. However, on December 18, 1992, in a
conference called by the NCMB, the Union and the Company agreed
on a number of provisions of the CBA, including the provision on
wage increase,[4] leaving only the issue of retirement to be threshed
out. In time, this, too, was settled, so that in his record of the January
14, 1993 conference, the Med-Arbiter noted that the issues raised by
the notice of strike had been settled and said notice is thus
terminated. It would therefore seem that at that point, there was
already a meeting of the minds of the parties, which was before the
February 1993 end of the six-month period provided in Art. 253-A.
The fact that no agreement was then signed is of no moment. Art.
253-A refers merely to an agreement which, according to Blacks Law
Dictionary is a coming together of minds; the coming together in
accord of two minds on a given proposition.[5] This is similar to Art.
1305 of the Civil Codes 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.[6] 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
Art. 1315 of the Civil Code states:
Contracts are perfected by mere consent, and from that moment, the
parties are bound not only to the fulfillment of what has been
expressly stipulated but also to all the consequences which, according
to their nature, may be in keeping with good faith, usage and law.
The Secretary of Labor found that as early as January 14, 1993, well
within the six (6) month period provided by law, the Company and
the Union have perfected their agreement.[7] The claim of petitioner
to the contrary notwithstanding, this is a finding of an administrative
agency which, in the absence of evidence to the contrary, must be
affirmed.
LMG CHEMICALS vs Secretary of DOLE
Facts:
- LMG Chemicals Corporation, (petitioner) is a domestic corporation
engaged in the manufacture and sale of various kinds of chemical
substances \
- There are two unions within petitioners One
union represents the daily
paid employees and the other union represents the monthly
paid employees.
- Sometime in December 1995, the petitioner and the
respondent started negotiation for a new Collective
Bargaining Agreement (CBA) as their old CBA was about to
expire. They were able to agree on the political provisions of
the new CBA, but no agreement was reached on the issue of
wage increase. The economic issues were not also settled.
- In the course of the negotiations, respondent union pruned down the
originally proposed wage increase
- With the CBA negotiations at a deadlock, respondent union
filed a notice of strike. Despite several conferences, the
parties failed to reach an amicable settlement.
- After numerous failed attempt to negotiate, the secretary of
labor intervened and ask the parties to submit their position
papers
- The secretary issued among others that their new Collective
bargaining Agreement shall retroact to January 1 1996
Ruling:
Finally, the effectivity of the Order of January 28, 1991, must
retroact to the date of the expiration of the previous CBA,
contrary to the position of the petitioner. Under the
circumstances of the case, Art. 253-A cannot be properly
applied to herein case. As correctly stated by public respondent
in his assailed Order of April 12, 1991 -
Anent the alleged lack of basis for retroactivity
provisions awarded, We would stress that the provision
of law invoked by the Hospital, Article 253-A of the
Labor Code, speaks of agreement by and between the
parties, and not arbitral awards.
Therefore in the absence of the specific provision of law
prohibiting retroactivity of the effectivity of the arbitral awards
issued by the Secretary of Labor pursuant to Article 263(g) of
the Labor Code, such as herein involved, public respondent is
deemed vested with plenary powers to determine the effectivity
thereof.

BENGUET CONSOLIDATED, INC. vs. BCI EMPLOYEES & WORKERS
UNION
G.R. No. L-24711,
Apr 30, 1968
Facts:
- On June 23, 1959, the Benguet-Balatoc Workers Union
(“BBWU”), for and in behalf of all Benguet Consolidated, Inc
(BENGUET) employees entered into a Collective Bargaining
Contract (CONTRACT) with BENGUET. The CONTRACT was
stipulated to be effective for a period of 4-1/2 years, or from
June 23, 1959 to December 23, 1963. It likewise embodied a
No-Strike, No-Lockout clause.
- 3 years later, or on April 6, 1962, a certification election was
conducted by the Department of Labor among all the rank and
file employees of BENGUET in the same collective bargaining
units.
- BCI EMPLOYEES & WORKERS UNION (UNION) obtained more
than 50% of the total number of votes, defeating BBWU.
- Later on, the UNION filed a notice of strike against BENGUET.
UNION members who were BENGUET employees in the
mining camps at Acupan, Antamok and Balatoc, went on
strike. The strike was attended by violence, some of the
workers and executives of the BENGUET were prevented from
entering the premises and some of the properties of the
BENGUET were damaged as a result of the strike. Eventually,
the parties agreed to end the dispute.
- BENGUET and UNION executed the AGREEMENT. PAFLU
placed its conformity thereto. About a year later or on January
29, 1964, a collective bargaining contract was finally executed
between UNION-PAFLU and BENGUET.
- Meanwhile, BENGUET sued UNION, PAFLU and their
Presidents to recover the amount the former incurred for the
repair of the damaged properties resulting from the strike.
BENGUET also argued that the UNION violated the
CONTRACT which has a stipulation not to strike during the
effectivity thereof.
- Defendants unions and their presidents defended that: (1)
they were not bound by the CONTRACT which BBWU, the
defeated union, had executed with BENGUET; (2) the strike
was due, among others, to unfair labor practices of BENGUET;
and (3) the strike was lawful and in the exercise of the
legitimate rights of UNION-PAFLU under Republic Act 875.
- The trial court dismissed the complaint on the ground that the
CONTRACT, particularly the No-Strike clause, did not bind
defendants. BENGUET interposed the present appeal.
Issue:
Wheter the Collective Bargaining Contract executed between Benguet
and BBWU automatically bind UNION-PAFLU upon its certification as
sole bargaining representative of all BENGUET employees
No, BENGUET's reliance upon the Principle of Substitution is totally
misplaced. This principle, formulated by the NLRB as its initial
compromise solution to the problem facing it when there occurs a
shift in employees' union allegiance after the execution of a
bargaining contract with their employer, merely states that even
during the effectivity of a collective bargaining agreement executed
between employer and employees thru their agent, the employees
can change said agent but the contract continues to bind them up to
its expiration date. They may bargain however for the shortening of
said expiration date. 8

In formulating the "substitutionary" doctrine, the only consideration

involved was the employees' interest in the existing bargaining
agreement. The agent's interest never entered the picture. In fact,
the justification 9 for said doctrine was:

... 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

Of course, UNION, as the newly certified bargaining agent, could

always voluntarily assume all the personal undertakings made by the
displaced agent.

Ilaw at Buklod ng Manggagawa (IBM) v. NLRC
- controversy at bar had its origin in the "wage distortions" affecting
the employees of respondent San Miguel Corporation
- IBM representing 4500 employees of SMC working at various plants,
offices and warehouses in NCR presented to the company a demand
for correction of the significant distortion in the workers’ wages
pursuant to the Wage Rationalization Act.
- But the Union claims that demand was ignored. So the workers
refused to work beyond 8 hours as a legitimate way of compeling
SMC to correct the wage distortion
- This abandonment of the long-standing schedule of work and the
reversion to the eight-hour shift apparently caused substantial
losses to SMC.
- Thereafter, on October 18, 1989, SMC filed with the Arbitration
Branch of the National Labor Relations Commission a complaint
against the Union and its members "to declare the strike or
slowdown illegal" and to terminate the employment of the union
officers and shop stewards. After presenting the pieces of
evidenceand posting cash bond, the NLRC issued a TRO for a period
of 20 days DIRECTING the respondents to CEASE and DESIST from
further committing the acts complained about particularly their not
complying with the work schedule
Issue: Whether or not NLRC Division had no jurisdiction to issue the TRO
Ruling :
No. Untenable is the Union's other argument that the respondent NLRC
Division had no jurisdiction to issue the temporary restraining order or
otherwise grant the preliminary injunction prayed for by SMC and that, even
assuming the contrary, the restraining order had been improperly issued.
The Court finds that the respondent Commission had acted entirely in
accord with applicable provisions of the Labor Code.
Article 254 of the Code provides that "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 . . ." Article 264 lists down specific
"prohibited activities" which may be forbidden or stopped by a restraining
order or injunction. Article 218 inter alia enumerates the powers of the
National Labor Relations Commission and lays down the conditions under
which a restraining order or preliminary injunction may issue, and the
procedure to be followed in issuing the same.
Among the powers expressly conferred on the Commission by Article 218 is
the power 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 . . ."
As a rule such restraining orders or injunctions do not issue ex parte, but
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 . . .;
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 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.
However, a temporary restraining order 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
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.
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."
The record reveals that the Commission exercised the power directly and
plainly granted to it by sub-paragraph (e) Article 217 in relation to Article
254 of the Code, and that it faithfully observed the procedure and complied
with the conditions for the exercise of that power prescribed in said sub-
paragraph (e) It acted on SMC's application for immediate issuance of a
temporary restraining order ex parte on the ground that substantial and
irreparable injury to its property would transpire before the matter could be
heard on notice; it, however, first direct SMC Labor Arbiter Carmen Talusan
to receive SMC's testimonial evidence in support of the application and
thereafter submit her recommendation thereon; it found SMC's evidence
adequate and issued the temporary restraining order upon
bond.1âwphi1 No irregularity may thus be imputed to the respondent
Commission in the issuance of that order.
In any event, the temporary restraining order had a lifetime of only twenty
(20) days and became void ipso facto at the expired ration of that period.
Halagueña, et al. vs PAL arbiter. Actions between employees and employer where the
GR No. 172013 employer-employee relationship is merely incidental and the cause of
action precedes from a different source of obligation is within the
October 2, 2009 exclusive jurisdiction of the regular court.
Facts:
Being an ordinary civil action, the same is beyond the jurisdiction of
Petitioners were employed as flight attendants of respondent on
labor tribunals.The said issue cannot be resolved solely by applying
different dates prior to November 1996.
the Labor Code. Rather, it requires the application of the Constitution,
They are members of FASAP union exclusive bargaining organization
labor statutes, law on contracts and the Convention on the
of the flightattendants, flight stewards and pursers.
Elimination of All Forms of Discrimination Against Women, and the
On July 2001, respondent and FASAP entered into a CBA
power to apply and interpret the constitution and CEDAW is within
incorporating the terms and conditions of their agreement for the
the jurisdiction of trial courts, a court of general jurisdiction. In
years 2000 to 2005 (compulsory retirement of 55 for female and 60
GeorgGrotjahn GMBH & Co. v. Isnani, this Court held that not every
for males).
dispute between an employer and employee involves matters that
only labor arbiters and the NLRC can resolve in the exercise of their
In July 2003, petitioner and several female cabin crews, in a letter,
adjudicatory or quasi-judicial powers. The jurisdiction of labor
manifested that the provision in CBA on compulsory retirement is
arbiters and the NLRC under Article 217 of the Labor Code is limited
discriminatory.
to dispute arising from an employer-employee relationship which can
On July 2004, petitioners filed a Special Civil Action for Declaratory
only be resolved by reference to the Labor Code other labor statutes,
Relief with issuanceof TRO with the RTC Makati. The RTC issued a
or their collective bargaining agreement.
TRO.
After the denial of the respondent on its motion for reconsideration
for the TRO, it filed a Petition with the CA.
CA granted respondent’s petition and ordered lower court to dismiss
the case. Hence, this petition.

Issue: Whether or not the regular courts has jurisdiction over the
case.
Ruling:

Yes. The subject of litigation is incapable of pecuniary estimation,

exclusively cognizable by the RTC. Being an ordinary civil action, the
same is beyond the jurisdiction of labor tribunals.

Not every controversy or money claim by an employee against the

employer or vice-versa is within the exclusive jurisdiction of the labor