DEFINITION
KIOK LOY vs. NLRC and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN)
FACTS: In a certification election, KILUSAN, a legitimate late labor federation, won and was subsequently
certified in a resolution by the BLR as the sole and exclusive bargaining agent of the rank-and-file employees of
Sweden Ice Cream Plant (Company).
Thereafter, the Union furnished the Company with copies of its proposed CBA. At the same time, it
requested the Company for its counter proposals. The request were ignored and remained unacted upon by the
Company.
Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union filed a
“Notice of Strike”, with the BLR on ground of unresolved economic issues in collective bargaining.
The NLRC rendered its decision, the dispositive portion of which reads as follows:
WHEREFORE, the respondent [company] is hereby declared guilty of unjustified refusal to bargain, in violation of
Section (g) Article 248 (now Article 249), of P.D. 442, as amended. xx
HELD: NO
Collective bargaining which is defined as negotiations towards a collective agreement, is one of the
democratic frameworks under the New Labor Code, designed to stabilize the relation between labor and
management and to create a climate of sound and stable industrial peace. It is a mutual responsibility of the
employer and the Union and is characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor
Code makes it an unfair labor practice for an employer to refuse “to meet and convene promptly and expeditiously
in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms
and conditions of employment including proposals for adjusting any grievance or question arising under such an
agreement and executing a contract incorporating such agreement, if requested by either party.
We are in total conformity with respondent NLRC’s pronouncement that petitioner Company is GUILTY
of unfair labor practice. It has been indubitably established that (1) respondent Union was a duly certified
bargaining agent; (2) it made a definite request to bargain, accompanied with a copy of the proposed CBA, to the
Company not only once but twice which were left unanswered and unacted upon; and (3) the Company made no
counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to negotiate. A Company’s
refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and
this is especially true where the Union’s request for a counter proposal is left unanswered. Even during the period of
compulsory arbitration before the NLRC, petitioner Company’s approach and attitude-stalling the negotiation by a
series of postponements, non-appearance at the hearing conducted, and undue delay in submitting its financial
statements, lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the
Union.
From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt that the
Union has a valid cause to complain against its (Company’s) attitude, the totality of which is indicative of the
latter’s disregard of, and failure to live up to, what is enjoined by the Labor Code — to bargain in good faith.
NOTES: 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 . … all of which preconditions are
undisputedly present in the instant case
PAL v NLRC
Facts: PAL completely revised its 1966 Code of Discipline. The Code was circulated among the employees and was
immediately implemented, and some employees were forthwith subjected to the disciplinary measures embodied
therein. The Philippine Airlines Employees Association (PALEA) filed a complaint before the National Labor
Relations Commission (NLRC). PALEA contended that PAL, by its unilateral implementation of the Code, was
guilty of unfair labor practice, specifically Paragraphs E and G of Article 249 and Article 253 of the Labor Code.
PALEA alleged that copies of the Code had been circulated in limited numbers; that being penal in nature the Code
must conform with the requirements of sufficient publication, and that the Code was arbitrary, oppressive, and
prejudicial to the rights of the employees. It prayed that implementation of the Code be held in abeyance; that PAL
should discuss the substance of the Code with PALEA; that employees dismissed under the Code be reinstated and
their cases subjected to further hearing; and that PAL be declared guilty of unfair labor practice and be ordered
to pay damages PAL asserted its prerogative as an employer to prescribe rules and regulations regarding employees'
conduct in carrying out their duties and functions, and alleging that by implementing the Code, it had not violated
the collective bargaining agreement (CBA) or any provision of the Labor Code. Assailing the complaint as
unsupported by evidence, PAL maintained that Article 253 of the Labor Code cited by PALEA referred to the
requirements for negotiating a CBA which was inapplicable as indeed the current CBA had been negotiated.
Issue: W/N the formulation of a Code of Discipline among employees is a shared responsibility of the employer and
the employees.
Ruling: Petitioner's assertion that it needed the implementation of a new Code of Discipline considering the nature
of its business cannot be overemphasized. In fact, being a local monopoly in the business demands the most
stringent of measures to attain safe travel for its patrons. Nonetheless, whatever disciplinary measures are adopted
cannot be properly implemented in the absence of full cooperation of the employees. Such cooperation cannot be
attained if the employees are restive on account, of their being left out in the determination of cardinal and
fundamental matters affecting their employment.
The PRINCIPLE OF CO-DETERMINATION states that it is a joint responsibility of the employer and the
employee to establish terms and conditions of employment. In establishing such terms and conditions of
employment, the employer and the employee must take into consideration existing laws and regulations.
Participation in policy and decision making processes affecting their rights and benefits as may be provided by law
Bautista vs Inciong
FACTS:
Petitioner was employed by Associated Labor Unions(ALU) as organizer. Bautista went on leave and when he went
back to work, he was informed that he was already terminated. The Director ruled in favor of Bautista. The Deputy
Minister of Labor, however, set aside the order of the Director finding that his membership coverage with the SSS w
hich shows that respondent ALU is the one paying the employer’s share in the premiums is not conclusive proof that
respondent is the petitioner’s employer because such payments were performed by the respondent as a favor for all t
hose who were performing full time union activities with it to entitle them to SSS benefits. He then ruled that there
was no employer-
employee relationship between ALU and Bautista by the fact that ALU is not an entity for profit but a duly registere
d labor union whose sole purpose is the representation of its bonafide organization units.
ISSUE:Whether or not there can be employer-employee relationship between a labor union and its member.
HELD:Yes, the mere fact that the respondent is a labor union does not mean that it cannot be considered an employ
er of the persons who work for it.Moreover, the four elements in determining the existence of an employer-
employee relationship was present in the case at bar. The Regional Director correctly found that the petitioner was a
n employee of the respondent union as reflected in the latter’s individual payroll sheets and shown by the petitioner’
s membership with the Social Security System (SSS) and the respondent union’s share of remittances in the petitione
r’s favor. Bautista was selected and hired by the union. ALU had the power to dismiss him as indeed it dismissed hi
m. And definitely, the Union tightly controlled the work of Bautista as one of its organizers.