San Miguel Corporation v. NLRC mandatory provisions of the collective bargaining agreement.
Collective Bargaining
GR. NO. 99266
MARCH 2,
FACTS:
In July 1990, San Miguel Corporation, alleging the need to
streamline its operations due to financial losses, shut down some of its plants
and declared 55 positions as redundant, listed as follows: seventeen (17) employees
in the Business LogisticsDivision ("BLD"), seventeen (17) in the Ayala Operations
Center (AOC), andeighteen (18) in the Magnolia-Manila Buying Station ("Magnolia-
MBS").
Consequently, the private respondent union filed several
grievance cases for the said retrenched employees, praying for the
redeployment of the said employees to the other divisions of the company.
Grievance proceedings were conducted. However, most
of the employees were redeployed, while others accepted early retirement. As
a result only 17 employees remained when the parties proceeded to the third level
(Step 3) of the grievance procedure.
In a meeting on October 26, 1990, petitioner informed private
respondent union that if by October 30, 1990, the remaining 17 employees
could not yet be redeployed; their services would be terminated on November 2,
1990. The said meeting adjourned when Mr. Daniel S. L. Borbon II, a representative
of the union, declared that there was nothing more to discuss in view of the
deadlock.
ISSUE:
1.Whether or not San Miguel Corporation exercised a
management prerogative.
2.Whether or not San Miguel Corporation violated the
Collective BargainingAgreement.
HELD:
1.YES. Abolition of departments or positions in the company is one of
the recognized management prerogatives. Noteworthy is the fact that
the private respondent does not question the validity of the business move of
petitioner. In the absence of proof that the act of petitioner was ill-motivated, it is
presumed that petitioner San Miguel Corporation acted in good faith. In fact,
petitioner acceded to the demands of the private respondent union by redeploying
most of the employees involved; such that from an original 17 excess employees in
BLD, 15 were successfully redeployed. In AOC, out of the 17 original excess, 15 were
redeployed. In the Magnolia – Manila Buying Station, out of 18 employees, 6 were
redeployed and only 12 were terminated
2.NO, alleged violation of the CBA, is chargeable against the private
respondent union. In abandoning the grievance proceedings and stubbornly
refusing to avail of the remedies under the CBA, private respondent violated the
Deadlock is defined as "the situation between the labor and the management of the
company where there is failure in the collective bargaining negotiations resulting in
a stalemate" This situation, is non-existent in the present case since there is a Board
assigned on the third level (Step 3), of the grievance machinery to resolve the
conflicting views of the parties. Instead of asking theConciliation Board composed
of five representatives each from the company and the union, to decide the
conflict, private respondent union declared a deadlock, and thereafter, filed a
notice of strike. The main purpose of the parties in adopting a procedure in the
settlement of their disputes is to prevent a strike. This procedure must be followed
in its entirety if it is to achieve its objective. x x x strikes held in violation of the
terms contained in the collective bargaining agreement are illegal, especially when
they provide for conclusive arbitration clauses. These agreements must be strictly
adhered to and respected if their ends have to be achieved.
UNION OF FILIPRO EMPLOYEES vs. NLRC and NESTLE PHILIPPINES, INC.
G.R. No. 91025 :
December 19, 1990.
FACTS:
On June 22, 1988, the petitioner Union of the Filipro Employees, the sole and
exclusive bargaining agent of all rank-and-file employees of Nestle Philippines,
(private respondent) filed a Notice of Strike at the DOLE raising the issues of CBA
deadlock and unfair labor practice. Private respondent assailed the legal personality
of the proponents of the said notice of strike to represent the Nestle employees,
before the NCMB. This notwithstanding, the NCMB proceeded to invite the parties
to attend the conciliation meetings and to which private respondent failed to
attend contending that it will deal only with a negotiating panel duly constituted
and mandated in accordance with the UFE Constitution and By-laws. Thereafter,
Company terminated from employment all UFE Union officers, and all the members
of the negotiating panel for instigating and knowingly participating in a strike staged
at the Makati, Alabang, Cabuyao and Cagayan de Oro on September 11, 1987
without any notice of strike filed and a strike vote obtained for the purpose. The
union filed a complaint for illegal dismissal. LA upheld the validity of the dismissal;
NLRC en banc affirmed. Subsequently, company concluded separate CBAs with the
general membership of the union at Cebu/Davao and Cagayan de Oro units;
Assailing the validity of these agreements, the union filed a case of ULP against the
company with the NLRC-NCR Arbitration Branch Efforts to resolve the dispute
amicably were taken by the NCMB but yielded negative result. Petitioner filed a
motion asking the Secretary of Labor to assume jurisdiction over the dispute of
deadlock in collective bargaining between the parties. On October 28, 1988, Labor
Secretary Franklin Drilon “certified” to the NLRC the said dispute between the UFE
and Nestle, Philippines.. which reads as follows: xxx “The NLRC is further directed to
call all the parties immediately and resolve the CBA deadlock within twenty (20)
days from submission of the case for resolution.” Second Division of the NLRC
promulgated a resolution granting wage increase and other benefits to Nestle’s
employees, ruling on non-economic issues, as well as absolving the private
respondent of the Unfair Labor Practice charge. Petitioner finds said resolution to
be inadequate and accordingly, does not agree therewith. It filed a motion for
reconsideration, denied. Hence, this petition.
ISSUE: (relative to the topic)
WHETHER OR NOT THE RESPONDENT NLRC HAD ACTED WITH GRAVE ABUSE OF
DISCRETION AND COMMITTED SERIOUS ERRORS IN FACT AND IN LAW WHEN IT
RULED THAT THE CBA IS EFFECTIVE ONLY UPON THE PROMULGATION OF THE
ASSAILED RESOLUTION
HELD: No.
this Court finds the provisions of Article 253 and Article 253-A of the Labor Code as
amended by R.A. 6715 as the applicable laws, thus:
“Art. 253. Duty to bargain collectively when there exists a collective bargaining
agreement. — When there is a collective bargaining agreement, the duty to bargain
collectively shall also mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve a written notice to
terminate or modify the agreement at least sixty (60) days prior to its expiration
date. It shall be the duty of both parties to keep the status quo and to continue in
full force and effect the terms and conditions of the existing agreement during the
60-day period and/or until a new agreement is reached by the parties.
“Art. 253-A. Terms of a collective bargaining agreement. — Any Collective
Bargaining Agreement that the parties may enter into shall, insofar as the
representation aspect is concerned, be for a term of five (5) years. No petition
questioning the majority status of the incumbent bargaining agent shall be
entertained and no certification election shall be conducted by the Department of
Labor and Employment outside of the sixty-day period immediately before the date
of expiry of such five year term of the Collective Bargaining Agreement. All other
provisions of the Collective Bargaining Agreement shall be renegotiated not later
than three (3) years after its execution. Any agreement on such other provisions of
the Collective Bargaining Agreement entered into within six (6) months from the
date of expiry of the term of such other provisions as fixed in the 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.”
In the light of the foregoing, this Court upholds the pronouncement of the
NLRC holding the CBA to be signed by the parties effective upon the promulgation
of the assailed resolution. It is clear and explicit from Article 253-A that any
agreement on such other provisions of the CBA shall be given retroactive effect
only when it is entered into within six (6) months from its expiry date. If the
agreement was entered into outside the six (6) month period, then the parties
shall agree on the duration of the retroactivity thereof. The assailed resolution
which incorporated the CBA to be signed by the parties was promulgated June 5,
1989, and hence, outside the 6 month period from June 30, 1987, the expiry date
of the past CBA. Based on the provision of Section 253-A, its retroactivity should
be agreed upon by the parties. But since no agreement to that effect was made,
public respondent did not abuse its discretion in giving the said CBA a prospective
effect. The action of the public respondent is within the ambit of its authority
vested by existing laws.
DAVAO INTEGRATED PORT STEVEDORING SERVICES vs. RUBEN V.
ABARQUEZ
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 and 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:
WON intermittent (irregular) workers are entitled to commutation of their
unenjoyed sick leave with pay benefits.
HELD:
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.
The 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 (2) intermittent field workers who are
members of the regular labor pool and the present regular extra labor pool.
Sick leave benefits, like other economic benefits stipulated in the CBA such
as maternity leave and vacation leave benefits, among others, are by their
nature, intended to be replacements for regular income which otherwise
would not be earned because an employee is not working during the period
of said leaves. They are non-contributory in nature, in the sense that the
employees contribute nothing to the operation of the benefits. By their
nature, upon agreement of the parties, they are intended to alleviate the
economic condition of the workers.
NATIONAL BREWERY & ALLIED INDUSTRIES LABOR UNION OF THE
PHILIPPINES vs. SAN MIGUEL BREWERY, INC.
FACTS:
Appellant National Brewery & Allied Industries Labor Union of the
Philippines is the bargaining representative of all regular workers paid on
the daily basis and of route helpers of San Miguel Brewery, Inc.
It signed a collective bargaining agreement with the company, which
provided, among other things, that —
The COMPANY will deduct the UNION agency fee from the wages of
workers who are not members of the UNION, provided the aforesaid
workers authorized the COMPANY to make such deductions in writing or if
no such authorization is given, if a competent court direct the COMPANY to
make such deduction. (Art. II, Sec. 4)
Alleging that it had obtained benefits for all workers in the company and
that "defendant Independent S.M.B. Workers' Association refused and still
refuses to pay UNION AGENCY FEE to the plaintiff UNION and defendant
COMPANY also refuses and still refuses to deduct the UNION AGENCY FEE
from the wages of workers who are not members of the plaintiff UNION and
remit the same to the latter," the union brought suit for the collection of
union agency fees under the bargaining contract.
ISSUE:
Whether such an agreement is a permissible form of union security under
Section 4(a) (4) as contended by the union.
HELD:

Although closed-shop agreement may validly be entered into under Section

4 (a) (4) of the Industrial Peace Act (National Labor Union v. Aguinaldo's
Echague, Inc., 51 O.G. p. 2899), We held that the same cannot be made to
apply to employees who, like the employees in this case, are already in the
service and are members of another union. (Freeman Shirt Mfg. Co. v. Court
of Industrial Relations, G.R. No. L-16561, January 28, 1961.) Hence, if a
closed shop agreement cannot be applied to these employees, neither may
an agency fee, as a lesser form of union security, be imposed upon them.

It is true, as the union claims, that whatever benefits the majority union
obtains from the employer accrue to its members as well as to non-
members. But this alone does not justify the collection of agency fee from
non-members. For the benefits of a collective bargaining agreement are
extended to all employees regardless of their membership in the union
because to withhold the same from the non-members would be to
discriminate against them. (International Oil Factory Worke+rs Union (FFW)
v. Martinez, et al., G.R. No. L-15560, Dec. 31, 1960).

Moreover, when a union bids to be the bargaining agent, it voluntarily

assumes the responsibility of representing all the employees in the
appropriate bargaining unit. That is why Section 12 of the law states that
"The labor organization designated or selected for the purpose of collective
bargaining by the majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of all employees in such
unit for the purpose of collective bargaining in respect to rates of pay,
wages, hours of employment, or other conditions of employment."