Article 252

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UFE-DFA-KMU vs Nestle Phils. Inc.

Ust Faculty Union vs UST
General Milling Corporation vs CA
Kiok loy vs NLRC
Collegio de san juan de letran case
Pal vs PALEA

Article 253-A
Article 254
1. Ando vs Campo

Topic: ART 252

Title: UFE-DFA-KMU vs. Nestle Philippines Inc. ; March 3, 2008
Ponente: Chico-Nazario, J.
Doctrine: While the law makes it an obligation for the employer and the employees to bargain
collectively with each other, such compulsion does not include the commitment to precipitately
accept or agree to the proposals of the other. All it contemplates is that both parties should
approach the negotiation with an open mind and make reasonable effort to reach a common
ground of agreement.
Indeed, an adamant insistence on a bargaining position to the point where the negotiations reach
an impasse does not establish bad faith. It is but natural that at negotiations, management and
labor adopt positions or make demands and offer proposals and counter-proposals.
Writer: MRSD

FACTS: UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file employees of
Nestl belonging to the latters Alabang and Cabuyao plants. On 4 April 2001, as the existing collective
bargaining agreement (CBA) between Nestl and UFE-DFA-KMU was to end on 5 June 2001, the
Presidents of the Alabang and Cabuyao Divisions of UFE-DFA-KMU informed Nestl of their intent to
"open [our] new Collective Bargaining Negotiation for the year 2001-2004" In response thereto, Nestl
informed them that it was also preparing its own counter-proposal and proposed ground rules to govern
the impending conduct of the CBA negotiations.
On 29 May 2001, in another letter to the UFE-DFA-KMU (Cabuyao Division only), Nestl reiterated its
stance that "unilateral grants, one-time company grants, company-initiated policies and programs, which
include, but are not limited to the Retirement Plan, Incidental Straight Duty Pay and Calling Pay Premium,
are by their very nature not proper subjects of CBA negotiations and therefore shall be excluded
therefrom." Dialogue between the company and the union thereafter ensued.

On 14 August 2001, however, Nestl requested the National Conciliation and Mediation Board (NCMB),
Regional Office No. IV, Imus, Cavite, to conduct preventive mediation proceedings between it and UFEDFA-KMU since despite fifteen (15) meetings between them, the parties failed to reach any agreement on
the proposed CBA.
Conciliation proceedings proved ineffective, though, and the UFE-DFA-KMU filed a Notice of Strike on 31
October 2001 with the NCMB, complaining, in essence, of a bargaining deadlock pertaining to economic
issues, i.e., "retirement (plan), panel composition, costs and attendance, and CBA. On 07 November
2001, another rNotice of Strike was filed by the union, this time predicated on Nestls alleged unfair labor
practices, that is, bargaining in bad faith by setting pre-conditions in the ground rules and/or refusing to
include the issue of the Retirement Plan in the CBA negotiations. The result of a strike vote conducted by
the members of UFE-DFA-KMU yielded an overwhelming approval of the decision to hold a strike.
On 26 November 2001, prior to holding the strike, Nestl filed with the DOLE a Petition for Assumption of
Jurisdiction, praying for the Secretary of the DOLE, Hon. Patricia A. Sto. Tomas, to assume jurisdiction
over the current labor dispute in order to effectively enjoin any impending strike by the members of the
UFE-DFA-KMU at the Nestls Cabuyao Plant in Laguna. Subsequently, Sec. Sto. Tomas issued an
Order assuming jurisdiction over the subject labor dispute. The Order enjoined any strike or lockout and
the parties are directed to cease and desist from committing any act that might lead to the further
deterioration of the current labor relations situation.
On 15 January 2002, despite the order enjoining the conduct of any strike or lockout and conciliation
efforts by the NCMB, the employee members of UFE-DFA-KMU at Nestls Cabuyao Plant went on strike.
In view of this, Sec. Sto. Tomas directed: (1) the members of UFE-DFA-KMU to return-to-work within
twenty-four (24) hours from receipt of such Order; (2) Nestl to accept back all returning workers under
the same terms and conditions existing preceding to the strike; (3) both parties to cease and desist from
committing acts inimical to the on-going conciliation proceedings leading to the further deterioration of the
situation; and (4) the submission of their respective position papers within ten (10) days from receipt
thereof. But notwithstanding the Return-to-Work Order, the members of UFE-DFA-KMU continued with
their strike, thus, prompting Sec. Sto. Tomas to seek the assistance of the Philippine National Police
(PNP) for the enforcement of said order.
On 7 February 2002, Nestl and UFE-DFA-KMU filed their respective position papers. Nestl addressed
several issues concerning economic provisions of the CBA as well as the non-inclusion of the issue of the
Retirement Plan in the collective bargaining negotiations. On the other hand, UFE-DFA-KMU limited itself
to the issue of whether or not the retirement plan was a mandatory subject in its CBA negotiations.

Thereafter, UFE-DFA-KMU filed a Petition for Certiorari before the Court of Appeals, alleging that Sec.
Sto. Tomas committed grave abuse of discretion amounting to lack or excess of jurisdiction when she
issued the Orders of 11 February 2002 and 8 March 2002. In the interim, in an attempt to finally resolve
the crippling labor dispute between the parties, then Acting Secretary of the DOLE, Hon. Arturo D. Brion,
came out with an Order dated 02 April 2002, ruling that:
a. we hereby recognize that the present Retirement Plan at the Nestl Cabuyao Plant is a
unilateral grant that the parties have expressly so recognized subsequent to the Supreme Courts
ruling in Nestl, Phils. Inc. vs. NLRC, G.R. No. 90231, February 4, 1991, and is therefore not a
mandatory subject for bargaining;
b. the Unions charge of unfair labor practice against the Company is hereby dismissed for lack of
merit;
f. the parties shall execute their CBA within thirty (30) days from receipt of this Order, furnishing
this Office a copy of the signed Agreement;
UFE-DFA-KMU moved to reconsider the aforequoted ruling, but such was subsequently denied on 6 May
2002. For the second time, UFE-DFA-KMU went to the Court of Appeals via another Petition
for Certiorari seeking to annul the Orders of 02 April 2002 and 06 May 2002 of the Secretary of the DOLE,
having been issued in grave abuse of discretion amounting to lack or excess of jurisdiction.
CA: The appellate court ruled in favor of UFE-DFA-KMU with regard to the issue of the retirement plan
but held that Nestle was not guilty of unfair labor practice.
UFE-DFA-KMU and Nestl separately filed the instant Petitions for Review on Certiorari under Rule 45 of
the Rules of Court and the two petitions are consolidated herein.
ISSUE: WON Nestle is guilty of unfair labor practice
RULING: No. Nestle is not guilty of ULP. UFE-DFA-KMU argues therein that Nestls "refusal to bargain
on a very important CBA economic provision constitutes unfair labor practice." It explains that Nestl set
as a precondition for the holding of collective bargaining negotiations the non-inclusion of the issue of
Retirement Plan. The duty to bargain collectively is mandated by Articles 252 and 253 of the Labor Code.
Obviously, the purpose of collective bargaining is the reaching of an agreement resulting in a contract
binding on the parties; but the failure to reach an agreement after negotiations have continued for a
reasonable period does not establish a lack of good faith. The statutes invite and contemplate a collective
bargaining contract, but they do not compel one. The duty to bargain does not include the obligation

to reach an agreement. The crucial question, therefore, of whether or not a party has met his statutory
duty to bargain in good faith typically turns on the facts of the individual case. As we have said, there is
no per se test of good faith in bargaining. Good faith or bad faith is an inference to be drawn from the
facts. To some degree, the question of good faith may be a question of credibility. The effect of an
employers or a unions individual actions is not the test of good-faith bargaining, but the impact of all such
occasions or actions, considered as a whole, and the inferences fairly drawn therefrom collectively may
offer a basis for the finding of the NLRC.
For a charge of unfair labor practice to prosper, it must be shown that Nestl was motivated by ill will,
"bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or
public policy, and, of course, that social humiliation, wounded feelings, or grave anxiety resulted x x x" in
disclaiming unilateral grants as proper subjects in their collective bargaining negotiations. While the law
makes it an obligation for the employer and the employees to bargain collectively with each other, such
compulsion does not include the commitment to precipitately accept or agree to the proposals of the
other. All it contemplates is that both parties should approach the negotiation with an open mind and
make reasonable effort to reach a common ground of agreement. This is not a case where the employer
exhibited an indifferent attitude towards collective bargaining, because the negotiations were not the
unilateral activity of the bargaining representative. Nestls desire to settle the dispute and proceed with
the negotiation being evident in its cry for compulsory arbitration is proof enough of its exertion of
reasonable effort at good-faith bargaining.
In the case at bar, Nestle never refused to bargain collectively with UFE-DFA-KMU. The corporation
simply wanted to exclude the Retirement Plan from the issues to be taken up during CBA negotiations, on
the postulation that such was in the nature of a unilaterally granted benefit. An employers steadfast
insistence to exclude a particular substantive provision is no different from a bargaining representatives
perseverance to include one that they deem of absolute necessity. Indeed, an adamant insistence on a
bargaining position to the point where the negotiations reach an impasse does not establish bad faith. It is
but natural that at negotiations, management and labor adopt positions or make demands and offer
proposals and counter-proposals. On account of the importance of the economic issue proposed by UFEDFA-KMU, Nestle could have refused to bargain with the former but it did not. And the managements
firm stand against the issue of the Retirement Plan did not mean that it was bargaining in bad faith. It had
a right to insist on its position to the point of stalemate.

Topic: Article 252 (Meaning of duty to bargain collectively)

Title: UST faculty union vs UST
Ponente:: Velasco, JR., J.
Doctrine: An act of bargaining collectively is valid when done in good faith
Writer: Donato Vergara III
Facts: On September 21, 1996, the University of Santo Tomas Faculty Union (USTFU) wrote a letter to all
its members informing them of a General Assembly (GA) that was to be held on October 5, 1996. The
letter contained an agenda for the GA which included an election of officers. The then incumbent
president of the USTFU was Atty. Eduardo J. Mario, Jr.
On October 2, 1996, Fr. Rodel Aligan, O.P., Secretary General of the UST, issued a
Memorandum allowing the request of the Faculty Clubs of the university to hold a convocation on October
4, 1996.
Members of the faculties of the university attended the convocation, including members of the
USTFU, without the participation of the members of the UST administration. Also during the convocation,
an election for the officers of the USTFU was conducted by a group called the Reformist Alliance. Upon
learning that the convocation was intended to be an election, members of the USTFU walked out.
Meanwhile, an election was conducted among those present, and Gil Gamilla and other faculty members
(Gamilla Group) were elected as the president and officers, respectively, of the union. Such election was
communicated to the UST administration in a letter dated October 4, 1996. Thus, there were two (2)
groups claiming to be the USTFU: the Gamilla Group and the group led by Atty. Mario, Jr. (Mario
Group).
On October 8, 1996, the Mario Group filed a complaint for ULP against the UST with the
Arbitration Branch of the NLRC, docketed as NLRC NCR Case No. 10-06255-96. It also filed on October
11, 1996 a complaint with the Office of the Med-Arbiter of the Department of Labor and Employment
(DOLE), praying for the nullification of the election of the Gamilla Group as officers of the USTFU.
On December 3, 1996, a Collective Bargaining Agreement (CBA) was entered into by the Gamilla
Group and the UST. The CBA superseded an existing CBA entered into by the UST and USTFU which
was intended for the period of June 1, 1993 to May 31, 1998.
On February 11, 1997, the med-arbiter issued a Resolution, declaring the election of the Gamilla
group as null and void and ordering that this group cease and desist from performing the duties and
responsibilities of USTFU officers. This Resolution was appealed to the Director of the Bureau of Labor
Relations. Later, the director issued a Resolution dated August 15, 1997 affirming the Resolution of the
med-arbiter. His Resolution was then appealed to this Court which rendered its November 16, 1999
Decision in G.R. No. 131235 upholding the ruling of the BLR.
Thus, on January 21, 2000, USTFU filed a Manifestation with the Arbitration Branch of the NLRC
in NLRC Case No. 10-06255-96, informing it of the Decision of the Court. Thereafter, on August 15, 2003,
the Arbitration Branch of the NLRC issued a Decision dismissing the complaint for lack of merit. The
complaint was dismissed on the ground that USTFU failed to establish with clear and convincing evidence
that indeed UST was guilty of ULP. The acts of UST which USTFU complained of as ULP were the
following: (1) allegedly calling for a convocation of faculty members which turned out to be an election of

officers for the faculty union; (2) subsequently dealing with the Gamilla Group in establishing a new CBA;
and (3) the assistance to the Gamilla Group in padlocking the USTFU office.
As to the CBA, the labor arbiter ruled that when the new CBA was entered into, (1) the Gamilla
Group presented more than sufficient evidence to establish that they had been duly elected as officers of
the USTFU; and (2) the ruling of the med-arbiter that the election of the Gamilla Group was null and void
was not yet final and executory. Thus, UST was justified in dealing with and entering into a CBA with the
Gamilla Group, including helping the Gamilla Group in securing the USTFU office.
The USTFU appealed the labor arbiters Decision to the Third Division of the NLRC which
rendered a Resolution affirming the Decision of the labor arbiter. USTFUs Motion for Reconsideration of
the NLRC Resolution was denied.
The case was then elevated to the CA which rendered the assailed Decision affirming the
Resolutions of the NLRC. The CA also denied the Motion for Reconsideration of USTFU in the assailed
resolution.
Issue(s):

1. Won UST is guilty of ULP

2. Won the subsequent dealing of UST with the Gamilia Group in establishing a new CBA
is valid?

Held: No, the concept of ULP is contained in Article 247 of the Labor Code which states:
Article 247. Concept of unfair labor practice and procedure for
prosecution thereof.Unfair labor practices violate the constitutional right of
workers and employees to self-organization, are inimical to the legitimate
interests of both labor and management, including their right to bargain
collectively and otherwise deal with each other in an atmosphere of freedom and
mutual respect, disrupt industrial peace and hinder the promotion of healthy and
stable labor-management relations. (Emphasis supplied.)
Notably, petitioner claims that respondents violated paragraphs (a) and (d) of Art. 248 of the Code
which provide:
Article 248. Unfair labor practices of employers.It shall be unlawful for
an employer to commit any of the following unfair labor practices:
(a)
To interfere with, restrain or coerce employees in the
exercise of their right to self-organization;
xxxx
(d) To initiate, dominate, assist or otherwise interfere with the formation
or administration of any labor organization, including the giving of financial or
other support to it or its organizers or supporters.
The general principle is that one who makes an allegation has the burden of proving it. While
there are exceptions to this general rule, in the case of ULP, the alleging party has the burden of proving
such ULP. In order to show that the employer committed ULP under the Labor Code, substantial evidence
is required to support the claim. Substantial evidence has been defined as such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion. In other words, whether the
employee or employer alleges that the other party committed ULP, it is the burden of the alleging party to

prove such allegation with substantial evidence. Such principle finds justification in the fact that ULP is
punishable with both civil and/or criminal sanctions.
2. Valid, Anent USTs dealing with the Gamilla Group, including the processing of faculty
members educational and hospitalization benefits, the labor arbiter ruled that: Neither are We persuaded
by complainants stand that respondents acquiescence to bargain with USTFU, through Gamillas group,
constitutes unfair labor practice. x x x Such conduct alone, uncorroborated by other overt acts leading to
the commission of ULP, does not conclusively show and establish the commission of such unlawful acts.
The fact of the matter is, the Gamilla Group represented itself to respondents as the duly elected
officials of the USTFU. As such, respondents were bound to deal with them.
Art. 248(g) of the Labor Code provides that:
ART. 248. Unfair labor practices of employers.It shall be unlawful for
an employer to commit any of the following unfair labor practice:
xxx
(g) To violate the duty to bargain collectively as prescribed by this Code.
Correlatively, Art. 250(a) of the Code provides:
ART. 250. Procedure in collective bargaining.The following procedures
shall be observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a
written notice upon the other party with a statement of its proposals. The other
party shall make a reply thereto not later than ten (10) calendar days from receipt
of such notice;
Moreover, Art. 252 of the Code defines the duty to bargain collectively as:
ART. 252. Meaning of duty to bargain collectively.The duty to bargain
collectively means the performance of a mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work and all other terms and
conditions of employment including proposals for adjusting any grievances or
questions arising under such agreement and executing a contract incorporating
such agreements if requested by either party but such duty does not compel any
party to agree to a proposal or to make any concession.
In the instant case, until our Decision in G.R. No. 131235 that the Gamilla Group was not validly
elected into office, there was no reason to believe that the members of the Gamilla Group were not the
validly elected officers and directors of USTFU. To reiterate, the Gamilla Group submitted a Letter dated
October 4, 1996 whereby it informed Fr. Rolando De La Rosa that its members were the newly elected
officers and directors of USTFU. In the Letter, every officer allegedly elected was identified with the Letter
signed by the alleged newly elected Secretary General and President, Ma. Lourdes Medina and Gamilla,
respectively.
More important though is the fact that the records are bereft of any evidence to show that the
Mario Group informed the UST of their objections to the election of the Gamilla Group. In fact, there is
even no evidence to show that the scheduled elections on October 5, 1996 that was supposed to be
presided over by the Mario Group ever pushed through. Instead, petitioner filed a complaint with the
med-arbiter on October 11, 1996 praying for the nullification of the election of the Gamilla Group.

As such, there was no reason not to recognize the Gamilla Group as the new officers and
directors of USTFU. And as stated in the above-quoted provisions of the Labor Code, the UST was
obligated to deal with the USTFU, as the recognized representative of the bargaining unit, through the
Gamilla Group. USTs failure to negotiate with the USTFU would have constituted ULP.
It is not the duty or obligation of respondents to inquire into the validity of the election of the
Gamilla Group. Such issue is properly an intra-union controversy subject to the jurisdiction of the medarbiter of the DOLE. Respondents could not have been expected to stop dealing with the Gamilla Group
on the mere accusation of the Mario Group that the former was not validly elected into office.

Topic: Article 252 (Meaning of duty to bargain collectively)

Title: General Milling Corporation vs CA
Ponente:: Quisimbing, J.
Doctrine: The effect of an employers or a unions actions individually is not the test of good-faith
bargaining, but the impact of all such occasions or actions, considered as a whole
Writer: Nicole Elena III
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 (union, for brevity), a duly certified bargaining agent.
GMC and the union concluded a collective bargaining agreement (CBA) which included the issue
of representation effective for a term of three years. The CBA was effective for three years retroactive to
December 1, 1988. Hence, it would expire on November 30, 1991. A 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 instead GMC wrote a letter to the unions officers, Rito Mangubat and Victor Lastimoso.
The letter stated that it felt there was no basis to negotiate with a union which no longer existed.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.
On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the ground of
incompetence. The union protested and requested GMC to submit the matter to the grievance procedure
provided in the CBA. GMC, however, advised the union to "refer to the letter they sent.
Thus, the union filed a complaint against GMC for ULP with the NLRC, Arbitration Division, Cebu
City. The labor arbiter dismissed the case with the recommendation that a petition for certification election
be held to determine if the union still enjoyed the support of the workers.

The union appealed to the NLRC. The NLRC set aside the labor arbiters decision. Citing Article
253-A of the Labor Code, as amended by Rep. Act No. 6715, which fixed the terms of a collective
bargaining agreement to 5 years, the NLRC ordered GMC to abide by the CBA draft that the union
proposed for a period of two (2) years beginning December 1, 1991, the date when the original CBA
ended, to November 30, 1993. Thus, the NLRC held that respondent union remained as the exclusive
bargaining agent with the right to renegotiate the economic provisions of the CBA. Consequently, it was
unfair labor practice for GMC not to enter into negotiation with the union.
The NLRC likewise held that the individual letters of withdrawal from the union submitted by 13 of
its members from February to June 1993 confirmed the pressure exerted by GMC on its employees to
resign from the union. Thus, the NLRC also found GMC guilty of unfair labor practice for interfering with
the right of its employees to self-organization.
The union then filed a petition for certiorari before the Court of Appeals. For failure of the union to
attach the required copies of pleadings and other documents and material portions of the record to
support the allegations in its petition, the CA dismissed the petition on February 9, 1999. The same
petition was subsequently filed by the union, this time with the necessary documents. In its resolution
dated April 26, 1999, the appellate court treated the refiled petition as a motion for reconsideration and
gave the petition due course. The appellate court rendered a decision granting the petition for certiorari.
Issue: (1) WON GMC guilty of unfair labor practice for violating the duty to bargain collectively and/or
interfering with the right of its employees to self-organization?
(2) WON imposing upon GMC the draft CBA proposed by the union for two years to begin from
the expiration of the original CBA is valid?
Held:
1. On the first issue, Article 253-A of the Labor Code, as amended by Rep. Act No. 6715, states:
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....

The law mandates that the representation provision of a CBA should last for five years. The
relation between labor and management should be undisturbed until the last 60 days of the fifth year.
Hence, it is indisputable that when the union requested for a renegotiation of the economic terms of the
CBA on November 29, 1991, it was still the certified collective bargaining agent of the workers, because it

was seeking said renegotiation within five (5) years from the date of effectivity of the CBA on December 1,
1988. The unions proposal was also submitted within the prescribed 3-year period from the date of
effectivity of the CBA, albeit just before the last day of said period. It was obvious that GMC had no valid
reason to refuse to negotiate in good faith with the union. For refusing to send a counter-proposal to the
union and to bargain anew on the economic terms of the CBA, the company committed an unfair labor
practice under Article 248 of the Labor Code, which provides that:
ART. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit
any of the following unfair labor practice:
xxx
(g) To violate the duty to bargain collectively as prescribed by this Code;
xxx
Article 252 of the Labor Code elucidates the meaning of the phrase "duty to bargain collectively,"
thus:
ART. 252. Meaning of duty to bargain collectively. The duty to bargain collectively means the
performance of a mutual obligation to meet and convene promptly and expeditiously in good faith
for the purpose of negotiating an agreement....

We have held that the crucial question whether or not a party has met his statutory duty to
bargain in good faith typically turns on the facts of the individual case. There is no per se test of good faith
in bargaining. Good faith or bad faith is an inference to be drawn from the facts. The effect of an
employers or a unions actions individually is not the test of good-faith bargaining, but the impact of all
such occasions or actions, considered as a whole
Under Article 252 above cited, 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. GMCs failure to make a timely reply to the proposals presented by the union is
indicative of its utter lack of interest in bargaining with the union. Its excuse that it felt the union no longer
represented the workers, was mainly dilatory as it turned out to be utterly baseless.

We hold that GMCs refusal to make a counter-proposal to the unions proposal for CBA
negotiation is an indication of its bad faith. Where the employer did not even bother to submit an answer
to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively. Failing
to comply with the mandatory obligation to submit a reply to the unions proposals, GMC violated its duty
to bargain collectively, making it liable for unfair labor practice. Perforce, the Court of Appeals did not
commit grave abuse of discretion amounting to lack or excess of jurisdiction in finding that GMC is, under
the circumstances, guilty of unfair labor practice.
2. As regards to the second issue, did the CA gravely abuse its discretion when it imposed on GMC the draft
CBA proposed by the union for two years commencing from the expiration of the original CBA?
The Code provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining
agreement. .... 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
[prior to its expiration date] and/or until a new agreement is reached by the parties. (Underscoring
supplied.)
The provision mandates the parties to keep the status quo while they are still in the process of
working out their respective proposal and counter proposal. The general rule is that when a CBA already
exists, its provision shall continue to govern the relationship between the parties, until a new one is
agreed upon. The rule necessarily presupposes that all other things are equal. That is, that neither party
is guilty of bad faith. However, when one of the parties abuses this grace period by purposely delaying the
bargaining process, a departure from the general rule is warranted.
It would be unfair to the union and its members if the terms and conditions contained in the old
CBA would continue to be imposed on GMCs employees for the remaining two (2) years of the CBAs
duration. We are not inclined to gratify GMC with an extended term of the old CBA after it resorted to
delaying tactics to prevent negotiations. Since it was GMC which violated the duty to bargain collectively it
had lost its statutory right to negotiate or renegotiate the terms and conditions of the draft CBA proposed
by the union.
Under ordinary circumstances, it is not obligatory upon either side of a labor controversy to
precipitately accept or agree to the proposals of the other. But an erring party should not be allowed to
resort with impunity to schemes feigning negotiations by going through empty gestures. Thus, by
imposing on GMC the provisions of the draft CBA proposed by the union, in our view, the interests of
equity and fair play were properly served and both parties regained equal footing, which was lost when
GMC thwarted the negotiations for new economic terms of the CBA.

Art. 252
TOPIC: unfair labor practice, refusal to negotiate
TITLE: Kiok Loy v. NLRC 141 SCRA 179 (1986)
Writer:
Sam
DOCTRINE: 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.

Facts:
The Pambansang Kilusang Paggawa, a legitimate late labor federation, won and was subsequently
certified in a resolution by the Bureau of Labor Relations as the sole and exclusive bargaining agent of
the rank-and-file employees of Sweden Ice Cream Plant.
The Union furnished the Company with two copies of its proposed collective bargaining agreement. At
the same time, it requested the Company for its counter proposals. Both requests were ignored and
remained unacted upon by the Company.
Thereafter, the Union filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on ground of
unresolved economic issues in collective bargaining.
Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all attempts
towards an amicable settlement failed.
The case was brought to the National Labor Relations Commission (NLRC) for compulsory arbitration
pursuant to Presidential Decree No. 823, as amended. But the Company requested for a lot of
postponements. NLRC ruled that respondent Sweden Ice Cream is guilty of unjustified refusal to bargain,
in violation of Section (g) Article 248 (now Article 249), of P.D. 442, as amended.
Issue: Whether the Company is guilty of unfair labor practice for refusal to bargain

Held: Yes. Petition dismissed for lack of merit.

Collective bargaining 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.
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.

The mechanics of collective bargaining are 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.

A Company's refusal to make counter proposal if considered in relation to the entire bargaining
process, may indicate bad faith since the Union's request for a counter proposal is left unanswered.
Besides, 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.

Case Digest: COLEGIO DE SAN JUAN DE LETRAN vs. ASSOCIATION OF EMPLOYEES AND
FACULTIES OF LETRAN and ELEONOR AMBAS
G.R. No. 141471.

September 18, 2000

Facts:
During the renegotiation of the respondent unions Collective Bargaining Agreement with the petitioner,
Eleonor Ambas emerged as the newly elected President of the union. Ambas wanted to continue the
renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already
prepared for signing by the parties. However, the union members rejected the said CBA. Thereafter,
petitioner accused the union officers of bargaining in bad faith before the NLRC. The Labor Arbiter
decided in favor of the petitioner. This decision was reversed on appeal with the NLRC.
The parties later agreed to disregard the unsigned CBA and to start negotiation on new five-year CBA.
During the pendency of approval of proposals, Ambas was informed that her work schedule was being

changed. Ambas protested and requested management to submit the issue to a grievance machinery
under the old CBA.
After the petitioners inaction on the CBA, the union filed a notice to strike. After meeting with the NCMB
to discuss the ground rules for renegotiation, Ambas received a letter dismissing her for alleged
insubordination.

The petitioner then ceased negotiations when it received news that another labor

organization had filed a petition for certification.

The union finally struck, but the Secretary of Labor and Employment ordered them to return to work and
for petitioner to accept them back. The Secretary of Labor and Employment later rendered judgement
that the petitioner had been guilty of unfair labor practice. The Court of Appeals affirmed the findings of
the former.
Issue(s):
Whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when it unilaterally
suspended the ongoing negotiations for a new CBA; and
Whether the termination of the union president amounts to an interference of the employees right to selforganization.

Held:
The Supreme Court found the petition unmeritorious.
The petitioners failure to act upon the submitted CBA proposal within the ten-day period exemplified in
Article 250 of the Labor Code is a clear violation of the governing procedure of collective bargaining. As
the Court has held in Kiok Loy vs. NLRC, the companys refusal to make counter-proposal to the unions
proposed CBA is an indication of bad faith. Moreover, the succeeding events are obvious signs that the
petitioner had merely been employing delaying tactics to the passage of the proposed CBA. Moreover, in
order to allow the employer to validly suspend the bargaining process, there must be a valid petition for
certification election raising a legitimate representation issue. Hence, the mere filing of a petition for
certification election does not ipso facto justify the suspension of negotiation by the employer.
The factual backdrop of the termination of Ambas led the Court to no other conclusion that she was
dismissed in order to strip the union of a leader who would fight for the right of her co-workers in the
bargaining table. While the Court recognizes the right of the employer to terminate the services of an

employee for a just or authorized cause, nevertheless, the dismissal of employees must be made within
the parameters of aw and pursuant to the tenets of equity and fair play. Even assuming arguendo that
Ambas was guilty of insubordination, such disobedience was not a valid ground to terminate her
employment. When the exercise of the management to discipline its employees tends to interfere with
the employees right to self-organization, it amounts to union-busting and is therefore a prohibited act.

Topic: Art 252

Title: PHILIPPINE AIRLINES, INCORPORATED vs. PHILIPPINE AIRLINES EMPLOYEES
ASSOCIATION (PALEA)
Ponente: J. Chico Nazario
Doctrine: It is a well-settled doctrine that the benefits of a CBA extend to the laborers and
employees in the collective bargaining unit, including those who do not belong to the chosen
bargaining labor organization. Otherwise, it would be a clear case of discrimination. To be entitled
to the benefits under the CBA, the employees must be members of the bargaining unit, but not
necessarily of the labor organization designated as the bargaining agent.
Writer: Raz

Facts:
On February 6, 1987, PAL and PALEA entered into a CBA covering the period of 1986 -1989.
Section 3 thereof provides that all the terms and conditions of employment of employees within the
bargaining unit are embodied in this Agreement, and the same shall govern the relationship between the
Company and such employees. x x x Part of said agreement required petitioner PAL to pay its rank and
file employees the following: 13th Month Pay (Mid-year Bonus) equivalent to one months current
basic pay, to be paid in advance in May; and Christmas Bonus which is the equivalent of one months
current basic pay as of November 30, to be paid in December. On April 22, 1988, prior to the payment of
the 13th month pay, PAL released a guideline implementing said provisions, to wit:
1) Eligibility
a) Ground employees in the general payroll who are regular as of April 30, 1988;
b) Other ground employees in the general payroll, not falling within category a) above shall receive their
13th Month Pay on or beforeDecember 24, 1988;
2) Amount
a) For category a) above, one month basic salary as of April 30, 1988;

b) Employees covered under 1 b) above shall be paid not less than 1/12 of their basic salary for every
month of service within the calendar year.
3) Payment Date: May 9, 1988 for category 1 a) above.
PALEA assailed the implementation of the guideline on the ground that all employees of PAL, regular or
non-regular, must be paid their 13th month pay. Subsequently, in a letter, PALEA, through Herbert C.
Baldovino, informed PAL that some regular employees failed to receive their 13th Month Pay.
PAL answered that rank and file employees regularized after April 30, 1988 were not entitled to the 13th
month pay as they were already given their Christmas bonuses on December 9, 1988 per the
Implementing Rules of PD 851 (The 13th Month Pay Law).
Disagreeing with PAL, PALEA filed a labor complaint for ULP against PAL before the NLRC. The
complaint interposed that "the cut-off period for regularization should not be used as the parameter for
granting [the] 13th month pay considering that the law does not distinguish the status of employment but
the law covers all employees."
LA: dismissed PALEAs complaint, holding that the giving of the particular bonus was said to be merely an
additional practice made in the past.
NLRC: reversed the Decision of the Arbiter, convinced that the 13th month pay or
mid-year bonus is distinct from the Christmas Bonus.
PAL went directly to SC via Petition for Review on Certiorari but was referred to the CA, which dismissed
PALs petition and its subsequent MR.
Hence, the Petition
Petitioner PAL argues that 1) the CBA does not apply to non-regular employees such that any benefits
arising from said agreement cannot be made to apply to them, including the mid-year bonus; and 2) it has
always been the company practice not to extend the mid-year bonus to those employees who have not
attainedregular status prior to the month of May, when payment of the particular bonus accrues.
PALEA, however, disputes petitioner PALs allegations and maintains that "[a]ll employees in PAL are
entitled to the same benefit as they are within the same collective bargaining unit and the entitlement to
such benefit spills over to even non-union members." Anent the supposed company practice of PAL not to
extend the payment of the 13th month pay or mid-year bonus to non-regular employees, non-payment of

said benefit is considered a diminution of privileges or benefits proscribed by PD 851; that petitioner PAL
misrepresented that the 13th month pay or mid-year bonus is the same as the Christmas bonus when, in
actuality, the latter is entirely different as it is a benefit paid under the provisions of the CBA, while the
former is one mandated by law, Presidential Decree No.851, in particular.
Issue: 1)Whether or Not the payment of the 13th month pay or mid-year bonus applies to PAL
employees regularized after April 30, 1988.
2) Whether or not the 13th month pay or mid-year bonus can be equated to the Christmas bonus.
Ruling
1) YES. The Court ruled that a cursory reading of the 1986-1989 CBA of the parties herein will
instantly reveal that Art. I, Sec. 3 of said agreement made its provision applicable to all employees in the
bargaining unit, without distinguishing between regular and non-regular employees.
It is a well-settled doctrine that the benefits of a CBA extend to the laborers and employees in the
collective bargaining unit, including those who do not belong to the chosen bargaining labor organization.
Otherwise, it would be a clear case of discrimination. To be entitled to the benefits under the CBA, the
employees must be members of the bargaining unit, but not necessarily of the labor organization
designated as the bargaining agent.
A "bargaining unit" has been defined as a group of employees of a given employer, comprised of
all or less than all of the entire body of employees, which the collective interest of all the employees,
consistent with equity to the employer, indicates to be the best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining provisions of the law. PALs allegation that the nonregular employees do not belong to the collective bargaining unit and are thus not covered by the CBA is
unjustified and unsubstantiated.
PAL excludes certain employees from the benefits of the CBA only because they have not yet
achieved regular status by the cut-off date, April 30, 1988. There is no showing that the non-regular status
of the concerned employees by said cut-off date sufficiently distinguishes their interests from those of the
regular employees so as to exclude them from the collective bargaining unit and the benefits of the CBA.
2) NO. While employers already paying their employees a 13th month pay or more in a calendar
year or its equivalent at the time of the issuance of PD 851 are already exempted from the mandatory
coverage of said law, PAL cannot escape liability in this case by virtue thereof. It must be stressed that in
the 1986-1989 CBA, petitioner PAL agreed to pay its employees 1) the 13th month pay or the mid-year
bonus, and 2) the Christmas bonus. The 13th month pay, guaranteed by PD 851, is explicitly covered or

provided for as the mid-year bonus in the CBA, while the Christmas bonus is evidently and distinctly a
separate benefit.
PAL may not be allowed to brush off said distinction, and unilaterally and arbitrarily declare that
for nonregular employees, their Christmas bonus is the same as or equivalent tothe 13th month pay. PD
851 mandates the payment of the 13th month pay to uniformly provide the low-paid employees with
additional income. It but sets a minimum requirement that employers must comply with. It does not intend,
however, to preclude the employers from voluntarily granting additional bonuses that will benefit their
employees. A bonus is an amount granted and paid to an employee for his industry and loyalty which
contributed to the success of the employer's business and made possible the realization of profits. It is an
act of generosity of the employer for which the employee ought to be thankful and grateful. It is also
granted by an enlightened employer to spur the employee to greater efforts for the success of the
business and realization of bigger profits. The Court ruled that the Christmas bonus in this case is of this
nature, although, by virtue of its incorporation into the CBA, it has become more than just an act of
generosity on the part of PAL, but a contractual obligation it has undertaken.