Labrel Set 3

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SECOND DIVISION

[G.R. No. 97020. June 8, 1992.]

CALIFORNIA MANUFACTURING CORPORATION, Petitioner, v. THE HONORABLE

UNDERSECRETARY OF LABOR BIENVENIDO E. LAGUESMA ABD FEDERATIONOF FREE WORKERS (FFW), CALIFORNIA MFG. CORP. SUPERVISORS UNION

CHAPTER (CALMASUCO), Respondents.

V.E. del Rosario & Associates for Petitioner.

Ferdinand E. Laguna for Private Respondent.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; CERTIFICATION

ELECTION; NOT APPLICABLE TO ESTABLISHMENTS WHERE THERE EXISTS ACERTIFIED BARGAINING AGENT.The Court has already categorically ruled that Article

257 of the Labor Code is applicable to unorganized labor organizations and not to establishmentswhere there exists a certified bargaining agent which had previously entered into a collective

bargaining agreement with the management (Associated Labor Unions [ALU] v. Calleja, G.R.No. 85085, November 6, 1989, 179 SCRA 127). Otherwise stated, the establishment concerned

must have no certified bargaining agent (Associated Labor Unions [ALU] v. Calleja, G.R. No.82260, July 19, 1989, 175 SCRA 490). In the instant case, it is beyond cavil that the supervisors

of CMC which constitute a bargaining unit separate and distinct from that of the rank-and-file,have no such agent, thus they correctly filed a petition for certification election thru union FFW-

CALMASUCO, likewise indubitably a legitimate labor organization.

2. ID.; ID.; ID.; TWENTY-FIVE PERCENT (25%) SUBSCRIPTION REQUIREMENT;IMMATERIAL THERETO; REASONS THEREFOR.CMCs insistence on the 25%

subscription requirement, is clearly immaterial. The same has been expressly deleted by Section24 of Republic Act No. 6715 and is presently prescribed only in organized establishments, that

is, those with existing bargaining agents. Compliance with the said requirement need not needeven be established with absolute certainty. The Court has consistently ruled that "even

conceding that the statutory requirement of 30% (now 25%) of the labor force asking for acertification election had not been strictly complied with, the Director (now the Med-Arbiter) is

still empowered to order that it be held precisely for the purpose of ascertaining which of the

contending labor organizations shall be the exclusive collective bargaining agent (Atlas FreeWorkers Union (AFWU-PSSLU Local v. Noriel, G.R. No. L-51905, May 26, 1981, 104 SCRA565). The requirement than is relevant only when it becomes mandatory to conduct a

certification election. In all other instances, the discretion, according to the rulings of thisTribunal, ought to be ordinarily exercised in favor of a petition for certification (National Mines

and Allied Workers Union (NAMAWU-UIL) v. Luna, Et Al., G.R. No. L-46722, June 15, 1978,83 SCRA 607).


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3. ID.; ID.; ID.; AS A GENERAL RULE, AN EMPLOYER HAS NO STANDING TOQUESTION THEREOF; EXCEPTION.CMC, as employer has no standing to question a

certification election (Asian Design and Manufacturing Corporation v. Calleja, Et Al., G.R. No.77415, June 29, 1989, 174 SCRA 477). Such is the sole concern of the worker has to file the

petition for certification election pursuant to Article 259 (now 258) of the Labor Code because it

was requested to bargain collectively. Thereafter, the role of the employer in the certificationprocess ceases. The employer becomes merely a by-stander. Oft-quoted is the pronouncement ofthe Court on management interference in certification elections, thus: "On matters that should be

the exclusive concern of labor, the choice of a collective bargaining representative, the employeris definitely an intruder. His participation, to say the least, deserves no encouragement. This

Court should be the last agency to lend support to such an attempt at interference with purelyinternal affair of labor." (Trade Unions of the Philippines and Allied Services (TUPAS) v.

Trajano, G.R. No. L-61153,, January 17, 1983, 120 SCRA 64 citing Consolidated Farms, Inc. v.Noriel, G.R. No. L-47752, July 31, 1978, 84 SCRA 469, 473).

D E C I S I O N

PARAS, J.:

This is a petition for review on certiorariwith prayer for preliminary injunction and/or

temporary restraining order seeking to annul and set aside the (a) resolution * of the Departmentof Labor and Employment dated October 16, 1990 in OS-A-10-283-90 (NCR-OD-M-90-05-095)

entitled "In Re: Petition for Certification Election Among the Supervisors of CaliforniaManufacturing Corporation, Federation of Free Workers (FFW) California Mfg. Corp.

Supervisors Union Chapter (CALMASUCO), petitioner-appellee, California Manufacturing

Corporation, employer-appellant" which denied herein petitioners appeal and affirmed the orderof Med-Arbiter Arsenia Q. Ocampo dated August 22, 1990 directing the conduct of acertification election among the supervisory employees of California Manufacturing

Corporation, and (b) the Order ** of the same Department denying petitioners motion forreconsideration.

As culled from the records, the following facts appear undisputed:chanrob1es virtual 1aw library

On May 24, 1990, a petition for certification election among the supervisors of California

Manufacturing Corporation (CMC for brevity) was filed by the Federation of Free Workers(FFW)California Manufacturing Corporation Supervisors Union Chapter (CALMASUCO),

alleging inter alia, that it is a duly registered federation with registry certificate no. 1952-TTT-IP,while FFW-CALMASUCO Chapter is a duly registered chapter with registry certificate no. 1-

AFBI-038 issued on May 21, 1990 (Annex "A", Rollo, p. 63); that the employer CMC employsone hundred fifty (150) supervisors; that there is no recognized supervisors union existing in the

company; that the petition is filed in accordance with Article 257 of the Labor Code, as amendedby Republic Act No. 6715; and that the petition is nevertheless supported by a substantial

number of signatures of the employees concerned (Annexes "E" and "F", Ibid., pp. 28-29).chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph


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In its answer, CMC, now petitioner herein, alleged among others, that the petition for the holding

of a certification election should be denied as it is not supported by the required twenty-fivepercent (25%) of all its supervisors and that a big number of the supposed signatories to the

petition are not actually supervisors as they have no subordinates to supervise, nor do they have

the powers and functions which under the law would classify them as supervisors (Annex "D",Ibid., p. 25).

On July 24, 1990, FFW-CALMASUCO filed its reply maintaining that under the law, whenthere is no existing unit yet in a particular bargaining unit at the time a petition for certification

election is filed, the 25% rule on the signatories does not apply; that the "organizedestablishment" contemplated by law does not refer to a "company" per se but rather refers to a

"bargaining unit" which may be of different classifications in a single company; that CMC has atleast two (2) different bargaining units, namely, the supervisory (unorganized) and the rank-and-

file (organized); that the signatories to the petition have been performing supervisory functions;that since it is CMC which promoted them to the positions of supervisors, it is already estopped

from claiming that they are not supervisors; that the said supervisors were excluded from thecoverage of the collective bargaining agreement of its rank-and-file employees; and that the

contested signatories are indeed supervisors as shown in the "CMC Master List of Employees" ofJanuary 2, 1990 and the CMS Publication (Annex "G", Ibid., p. 30).

On August 22, 1990, the Med-Arbiter issued an order, the decretal portion of which

reads:jgc:chanrobles.com.ph

"WHEREFORE, premises considered, it is hereby ordered that a certification election beconducted among the supervisory employees of California Manufacturing Corporation within

twenty (20) days from receipt hereof with the usual pre-election conference of the parties tothresh out the mechanics of the election. The payroll of the company three (3) months prior to

the filing of the petition shall be used as the basis in determining the list of eligible voters.

The choices are:chanrob1es virtual 1aw library

1. Federation of Free Workers (FFW) California Manufacturing Corporation SupervisorsUnion Chapter (CALMASUCO); and

2. No union.

"SO ORDERED." (Annex "H", Ibid., p. 33)

CMC thereafter appealed to the Department of Labor and Employment which, however, affirmed

the above order in its assailed resolution dated October 16, 1990 (Annex "B", Ibid., p. 18).CMCs subsequent motion for reconsideration was also denied in its order dated November 17,

1990 (Annex "A", Ibid., p. 15), hence, his petition.chanrobles.com : virtual law library

The issues are presented by CMC in this wise:jgc:chanrobles.com.ph


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"a) whether or not the term "unorganized establishment" in Article 257 of the Labor Code refersto a bargaining unit or a business establishment;

"b) whether or not non-supervisors can participate in a supervisors certification election; and

"c) whether or not the two (2) different and separate plants of herein petitioner in Paraaque andLas Pias can be treated as a single bargaining unit."cralaw virtua1aw library

The petition must be denied.

The Court has already categorically ruled that Article 257 of the Labor Code is applicable tounorganized labor organizations and not to establishments where there exists a certified

bargaining agent which had previously entered into a collective bargaining agreement with themanagement (Associated Labor Unions [ALU] v. Calleja, G.R. No. 85085, November 6, 1989,

179 SCRA 127) (Underscoring supplied). Otherwise stated, the establishment concerned musthave no certified bargaining agent (Associated Labor Unions [ALU] v. Calleja, G.R. No. 82260,

July 19, 1989, 175 SCRA 490). In the instant case, it is beyond cavil that the supervisors of CMCwhich constitute a bargaining unit separate and distinct from that of the rank-and-file, have no

such agent, thus they correctly filed a petition for certification election thru union FFW-CALMASUCO, likewise indubitably a legitimate labor organization. CMCs insistence on the

25% subscription requirement, is clearly immaterial. The same has been expressly deleted bySection 24 of Republic Act No. 6715 and is presently prescribed only in organized

establishments, that is, those with existing bargaining agents. Compliance with the saidrequirement need not even be established with absolute certainty. The Court has consistently

ruled that "even conceding that the statutory requirement of 30% (now 25%) of the labor forceasking for a certification election had not been strictly complied with, the Director (now the

Med-Arbiter) is still empowered to order that it be held precisely for the purpose of ascertainingwhich of the contending labor organizations shall be the exclusive collective bargaining agent

(Atlas Free Workers Union (AFWU)-PSSLU Local v. Noriel, G.R. No. L-51905, May 26, 1981,104 SCRA 565). The requirement then is relevant only when it becomes mandatory to conduct a

certification election. In all other instances, the discretion, according to the rulings of thisTribunal, ought to be ordinarily exercised in favor of a petition for certification (National Mines

and Allied Workers Union (NAMAWU-UIF) v. Luna, Et Al., G.R. No. L-46722, June 15, 1978,83 SCRA 607).

In any event, CMC as employer has no standing to question a certification election (Asian

Design and Manufacturing Corporation v. Calleja, Et Al., G.R. No. 77415, June 29, 1989, 174SCRA 477). Such is the sole concern of the workers. The only exception is where the employer

has to file the petition for certification election pursuant to Article 259 (now 258) of the LaborCode because it was requested to bargain collectively. Thereafter, the role of the employer in the

certification process ceases. The employer becomes merely a by-stander. Oft-quoted is thepronouncement of the Court on management interference in certification elections,

thus:jgc:chanrobles.com.ph

"On matters that should be the exclusive concern of labor, the choice of a collective bargainingrepresentative, the employer is definitely an intruder. His participation, to say the least, deserves


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no encouragement. This Court should be the last agency to lend support to such an attempt atinterference with purely internal affair of labor." (Trade Unions of the Philippines and Allied

Services (TUPAS) v. Trajano, G.R. No. L-61153, January 17, 1983, 120 SCRA 64 citingConsolidated Farms, Inc. v. Noriel, G.R. No. L-47752. July 31, 1978, 84 SCRA 469, 473).

PREMISES CONSIDERED, the petition is DISMISSED for utter lack of merit.

SO ORDERED.

Narvasa, C.J., Padilla and Regalado,JJ., concur.

Nocon,J., is on leave.

++++++++++++++++++++++++++++++++

2.

G.R. No. 96490 February 3, 1992

INDOPHIL TEXTILE MILL WORKERS UNION-PTGWO,petitioner,vs.

VOLUNTARY ARBITRATOR TEODORICO P. CALICA and INDOPHIL TEXTILEMILLS, INC., respondents.

Romeo C. Lagman for petitioner.

Borreta, Gutierrez & Leogardo for respondent Indophil Textile Mills, Inc.

MEDIALDEA, J.:

This is a petition for certiorari seeking the nullification of the award issued by the respondent

Voluntary Arbitrator Teodorico P. Calica dated December 8, 1990 finding that Section 1 (c),Article I of the Collective Bargaining Agreement between Indophil Textile Mills, Inc. and

Indophil Textile Mill Workers Union-PTGWO does not extend to the employees of IndophilAcrylic Manufacturing Corporation as an extension or expansion of Indophil Textile Mills,

Incorporated.

The antecedent facts are as follows:

Petitioner Indophil Textile Mill Workers Union-PTGWO is a legitimate labor organization dulyregistered with the Department of Labor and Employment and the exclusive bargaining agent of

all the rank-and-file employees of Indophil Textile Mills, Incorporated. Respondent Teodorico P.Calica is impleaded in his official capacity as the Voluntary Arbitrator of the National


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Conciliation and Mediation Board of the Department of Labor and Employment, while privaterespondent Indophil Textile Mills, Inc. is a corporation engaged in the manufacture, sale and

export of yarns of various counts and kinds and of materials of kindred character and has itsplants at Barrio Lambakin. Marilao, Bulacan.

In April, 1987, petitioner Indophil Textile Mill Workers Union-PTGWO and private respondentIndophil Textile Mills, Inc. executed a collective bargaining agreement effective from April 1,1987 to March 31, 1990.

On November 3, 1967 Indophil Acrylic Manufacturing Corporation was formed and registered

with the Securities and Exchange Commission. Subsequently, Acrylic applied for registrationwith the Board of Investments for incentives under the 1987 Omnibus Investments Code. The

application was approved on a preferred non-pioneer status.

In 1988, Acrylic became operational and hired workers according to its own criteria and

standards. Sometime in July, 1989, the workers of Acrylic unionized and a duly certified

collective bargaining agreement was executed.

In 1990 or a year after the workers of Acrylic have been unionized and a CBA executed, the

petitioner union claimed that the plant facilities built and set up by Acrylic should be consideredas an extension or expansion of the facilities of private respondent Company pursuant to Section

1(c), Article I of the CBA, to wit,.

c) This Agreement shall apply to the Company's plant facilities andinstallations and to any extension and expansion thereat. (Rollo,

p.4)

In other words, it is the petitioner's contention that Acrylic is part of the Indophilbargaining unit.

The petitioner's contention was opposed by private respondent which submits that it is a juridicalentity separate and distinct from Acrylic.

The existing impasse led the petitioner and private respondent to enter into a submission

agreement on September 6, 1990. The parties jointly requested the public respondent to act asvoluntary arbitrator in the resolution of the pending labor dispute pertaining to the proper

interpretation of the CBA provision.

After the parties submitted their respective position papers and replies, the public respondentVoluntary Arbitrator rendered its award on December 8, 1990, the dispositive portion of whichprovides as follows:

PREMISES CONSIDERED, it would be a strained interpretation and application

of the questioned CBA provision if we would extend to the employees of Acrylicthe coverage clause of Indophil Textile Mills CBA. Wherefore, an award is made

to the effect that the proper interpretation and application of Sec. l, (c), Art. I, of


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the 1987 CBA do (sic) not extend to the employees of Acrylic as an extension orexpansion of Indophil Textile Mills, Inc. (Rollo, p.21)

Hence, this petition raising four (4) issues, to wit:

1. WHETHER OR NOT THE RESPONDENT ARBITRATORERRED IN INTERPRETING SECTION 1(c), ART I OF THECBA BETWEEN PETITIONER UNION AND RESPONDENT

COMPANY.

2. WHETHER OR NOT INDOPHIL ACRYLIC IS A SEPARATE

AND DISTINCT ENTITY FROM RESPONDENT COMPANYFOR PURPOSES OF UNION REPRESENTATION.

3. WHETHER OR NOT THE RESPONDENT ARBITRATOR

GRAVELY ABUSED HIS DISCRETION AMOUNTING TO

LACK OR IN EXCESS OF HIS JURISDICTION.

4. WHETHER OR NOT THE RESPONDENT ARBITRATOR

VIOLATED PETITIONER UNION'S CARDINAL PRIMARYRIGHT TO DUE PROCESS. (Rollo, pp. 6-7)

The central issue submitted for arbitration is whether or not the operations in Indophil AcrylicCorporation are an extension or expansion of private respondent Company. Corollary to the

aforementioned issue is the question of whether or not the rank-and-file employees working atIndophil Acrylic should be recognized as part of, and/or within the scope of the bargaining unit.

Petitioner maintains that public respondent Arbitrator gravely erred in interpreting Section l(c),Article I of the CBA in its literal meaning without taking cognizance of the facts adduced thatthe creation of the aforesaid Indophil Acrylic is but a devise of respondent Company to evade the

application of the CBA between petitioner Union and respondent Company.

Petitioner stresses that the articles of incorporation of the two corporations establish that the twoentities are engaged in the same kind of business, which is the manufacture and sale of yarns of

various counts and kinds and of other materials of kindred character or nature.

Contrary to petitioner's assertion, the public respondent through the Solicitor General argues that

the Indophil Acrylic Manufacturing Corporation is not an alter ego or an adjunct or business

conduit of private respondent because it has a separate legitimate business purpose. In addition,the Solicitor General alleges that the primary purpose of private respondent is to engage in thebusiness of manufacturing yarns of various counts and kinds and textiles. On the other hand, the

primary purpose of Indophil Acrylic is to manufacture, buy, sell at wholesale basis, barter,import, export and otherwise deal in yarns of various counts and kinds. Hence, unlike private

respondent, Indophil Acrylic cannot manufacture textiles while private respondent cannot buy orimport yarns.


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Furthermore, petitioner emphasizes that the two corporations have practically the sameincorporators, directors and officers. In fact, of the total stock subscription of Indophil Acrylic,

P1,749,970.00 which represents seventy percent (70%) of the total subscription of P2,500,000.00was subscribed to by respondent Company.

On this point, private respondent cited the case ofDiatagon Labor Federation v.Ople, G.R. No.L-44493-94, December 3, 1980, 10l SCRA 534, which ruled that two corporations cannot betreated as a single bargaining unit even if their businesses are related. It submits that the fact that

there are as many bargaining units as there are companies in a conglomeration of companies is apositive proof that a corporation is endowed with a legal personality distinctly its own,

independent and separate from other corporations (seeRollo, pp. 160-161).

Petitioner notes that the foregoing evidence sufficiently establish that Acrylic is but an extensionor expansion of private respondent, to wit:

(a) the two corporations have their physical plants, offices and

facilities situated in the same compound, at Barrio Lambakin,Marilao, Bulacan;

(b) many of private respondent's own machineries, such as dyeingmachines, reeling, boiler, Kamitsus among others, were transferred

to and are now installed and being used in the Acrylic plant;

(c) the services of a number of units, departments or sections ofprivate respondent are provided to Acrylic; and

(d) the employees of private respondent are the same persons

manning and servicing the units of Acrylic. (seeRollo, pp. 12-13)

Private respondent insists that the existence of a bonafide business relationship between Acrylic

and private respondent is not a proof of being a single corporate entity because the serviceswhich are supposedly provided by it to Acrylic are auxiliary services or activities which are not

really essential in the actual production of Acrylic. It also pointed out that the essential servicesare discharged exclusively by Acrylic personnel under the control and supervision of Acrylic

managers and supervisors.

In sum, petitioner insists that the public respondent committed grave abuse of discretionamounting to lack or in excess of jurisdiction in erroneously interpreting the CBA provision and

in failing to disregard the corporate entity of Acrylic.

We find the petition devoid of merit.

Time and again, We stress that the decisions of voluntary arbitrators are to be given the highest

respect and a certain measure of finality, but this is not a hard and fast rule, it does not precludejudicial review thereof where want of jurisdiction, grave abuse of discretion, violation of due

process, denial of substantial justice, or erroneous interpretation of the law were brought to our


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attention. (seeOcampo, et al. v. National Labor Relations Commission, G.R. No. 81677, 25 July1990, First Division Minute Resolution citingOceanic Bic Division (FFW) v. Romero, G.R. No.

L-43890, July 16, 1984, 130 SCRA 392)

It should be emphasized that in rendering the subject arbitral award, the voluntary arbitrator

Teodorico Calica, a professor of the U.P. Asian Labor Education Center, now the Institute forIndustrial Relations, found that the existing law and jurisprudence on the matter, supported theprivate respondent's contentions. Contrary to petitioner's assertion, public respondent cited facts

and the law upon which he based the award. Hence, public respondent did not abuse hisdiscretion.

Under the doctrine of piercing the veil of corporate entity, when valid grounds therefore exist,

the legal fiction that a corporation is an entity with a juridical personality separate and distinctfrom its members or stockholders may be disregarded. In such cases, the corporation will be

considered as a mere association of persons. The members or stockholders of the corporationwill be considered as the corporation, that is liability will attach directly to the officers and

stockholders. The doctrine applies when the corporate fiction is used to defeat publicconvenience, justify wrong, protect fraud, or defend crime, or when it is made as a shield to

confuse the legitimate issues, or where a corporation is the mere alter ego or business conduit ofa person, or where the corporation is so organized and controlled and its affairs are so conducted

as to make it merely an instrumentality, agency, conduit or adjunct of another corporation.(Umali et al. v. Court of Appeals, G.R. No. 89561, September 13, 1990, 189 SCRA 529, 542)

In the case at bar, petitioner seeks to pierce the veil of corporate entity of Acrylic, alleging thatthe creation of the corporation is a devise to evade the application of the CBA between petitioner

Union and private respondent Company. While we do not discount the possibility of thesimilarities of the businesses of private respondent and Acrylic, neither are we inclined to apply

the doctrine invoked by petitioner in granting the relief sought. The fact that the businesses ofprivate respondent and Acrylic are related, that some of the employees of the private respondent

are the same persons manning and providing for auxilliary services to the units of Acrylic, andthat the physical plants, offices and facilities are situated in the same compound, it is our

considered opinion that these facts are not sufficient to justify the piercing of the corporate veilof Acrylic.

In the same case of Umali, et al.v.Court of Appeals(supra), We already emphasized that "the

legal corporate entity is disregarded only if it is sought to hold the officers and stockholdersdirectly liable for a corporate debt or obligation." In the instant case, petitioner does not seek to

impose a claim against the members of the Acrylic.

Furthermore, We already ruled in the case ofDiatagon Labor Federation Local 110 of theULGWP v.Ople(supra) that it is grave abuse of discretion to treat two companies as a singlebargaining unit when these companies are indubitably distinct entities with separate juridical

personalities.


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Hence, the Acrylic not being an extension or expansion of private respondent, the rank-and-fileemployees working at Acrylic should not be recognized as part of, and/or within the scope of the

petitioner, as the bargaining representative of private respondent.

All premises considered, the Court is convinced that the public respondent Voluntary Arbitrator

did not commit grave abuse of discretion in its interpretation of Section l(c), Article I of the CBAthat the Acrylic is not an extension or expansion of private respondent.

ACCORDINGLY, the petition is DENIED and the award of the respondent Voluntary Arbitratorare hereby AFFIRMED.

SO ORDERED.

Narvasa, C.J., Cruz and Grino-Aquino, JJ., concur.

+++++++++++++++++++++++++

3.

SECOND DIVISION

[G.R. No. 114974. June 16, 2004]

STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE),petitioner, vs. TheHonorable MA. NIEVES R. CONFESOR, in her capacity as SECRETARY OF LABOR AND

EMPLOYMENT; and the STANDARD CHARTERED BANK, respondents.

D E C I S I O N

CALLEJO, SR.,J.:

This is a petition for certiorari under Rule 65 of the Rules of Court filed by the StandardChartered Bank Employees Union, seeking the nullification of the October 29, 1993 Order1[1]

of then Secretary of Labor and Employment Nieves R. Confesor and her resolutions datedDecember 16, 1993 and February 10, 1994.

The Antecedents

Standard Chartered Bank (the Bank, for brevity) is a foreign banking corporation doing businessin the Philippines. The exclusive bargaining agent of the rank and file employees of the Bank isthe Standard Chartered Bank Employees Union (the Union, for brevity).


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In August of 1990, the Bank and the Union signed a five-year collective bargaining agreement(CBA) with a provision to renegotiate the terms thereof on the third year. Prior to the expiration

of the three-year period2[2] but within the sixty-day freedom period, the Union initiated thenegotiations. On February 18, 1993, the Union, through its President, Eddie L. Divinagracia, sent

a letter3[3] containing its proposals4[4] covering political provisions5[5] and thirty-four (34)

economic provisions.6[6] Included therein was a list of the names of the members of the Unionsnegotiating panel.7[7]

In a Letter dated February 24, 1993, the Bank, through its Country Manager Peter H. Harris, tooknote of the Unions proposals. The Bank attached its counter-proposal to the non-economic

provisions proposed by the Union.8[8] The Bank posited that it would be in a better position topresent its counter-proposals on the economic items after the Union had presented its

justifications for the economic proposals.9[9] The Bank, likewise, listed the members of itsnegotiating panel.10[10] The parties agreed to set meetings to settle their differences on the

proposed CBA.

Before the commencement of the negotiation, the Union, through Divinagracia, suggested to theBanks Human Resource Manager and head of the negotiating panel, Cielito Diokno, that the

bank lawyers should be excluded from the negotiating team. The Bank acceded.11[11]Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr., the President of the

National Union of Bank Employees (NUBE), the federation to which the Union was affiliated,be excluded from the Unions negotiatingpanel.12[12] However, Umali was retained as a

member thereof.


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On March 12, 1993, the parties met and set the ground rules for the negotiation. Dioknosuggested that the negotiation be kept a family affair. The proposed non-economic provisions

of the CBA were discussed first.13[13] Even during the final reading of the non-economicprovisions on May 4, 1993, there were still provisions on which the Union and the Bank could

not agree. Temporarily, the notation DEFERRED was placed therein. Towards the end of the

meeting, the Union manifested that the same should be changed to DEADLOCKED to indicatethat such items remained unresolved. Both parties agreed to place the notationDEFERRED/DEADLOCKED.14[14]

On May 18, 1993, the negotiation for economic provisions commenced. A presentation of the

basis of the Unions economic proposals was made. The next meeting, the Bank made a similarpresentation. Towards the end of the Banks presentation, Umali requested the Bank to validate

the Unions guestimates,especially the figures for the rank and file staff.15[15] In thesucceeding meetings, Umali chided the Bank for the insufficiency of its counter-proposal on the

provisions on salary increase, group hospitalization, death assistance and dental benefits. Hereminded the Bank, how the Union got what it wanted in 1987, and stated that if need be, the

Union would go through the same route to get what it wanted.16[16]

Upon the Banks insistence, the parties agreed to tackle the economic package item by item.Upon the Unions suggestion, the Bank indicated which provisions it would accept, reject, retain

and agree to discuss.17[17] The Bank suggested that the Union prioritize its economic proposals,considering that many of such economic provisions remained unresolved. The Union, however,

demanded that the Bank make a revised itemized proposal.

In the succeeding meetings, the Union made the following proposals:

Wage Increase:

1

st

YearReduced from 45% to 40%2nd

Year - Retain at 20%

Total = 60%

Group Hospitalization Insurance:Maximum disability benefit reduced from P75,000.00 to P60,000.00 per illness annually

Death Assistance:For the employee -- Reduced from P50,000.00 to P45,000.00


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For Immediate Family Member -- Reduced from P30,000.00 to P25,000.00

Dental and all others -- No change from the original demand.18[18]

In the morning of the June 15, 1993 meeting, the Union suggested that if the Bank would not

make the necessary revisions on its counter-proposal, it would be best to seek a third partyassistance.19[19] After the break, the Bank presented its revised counter-proposal20[20] asfollows:

Wage Increase : 1stYearfrom P1,000 to P1,050.00

2nd

YearP800.00no change

Group Hospitalization Insurance

From: P35,000.00 per illnessTo : P35,000.00 per illness per year

Death AssistanceFor employeeFrom: P20,000.00To : P25,000.00

Dental RetainerOriginal offer remains the same21[21]

The Union, for its part, made the following counter-proposal:

Wage Increase: 1stYear - 40%

2nd

Year - 19.5%

Group Hospitalization InsuranceFrom: P60,000.00 per year

To : P50,000.00 per year

Dental:Temporary Filling/P150.00

Tooth ExtractionPermanent Filling200.00

Prophylaxis250.00Root CanalFrom P2,000 per tooth

To: 1,800.00 per tooth


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Death Assistance:For Employees: From P45,000.00 to P40,000.00

For Immediate Family Member: From P25,000.00 to P20,000.00.22[22]

The Unions original proposals, aside from the above-quoted, remained the same.

Another set of counter-offer followed:

Management Union

Wage Increase1

stYearP1,050.00 40%

2nd

Year - 850.00 19.0%23[23]

Diokno stated that, in order for the Bank to make a better offer, the Union should clearly identifywhat it wanted to be included in the total economic package. Umali replied that it was

impossible to do so because the Banks counter-proposal was unacceptable. He furthered

asserted that it would have been easier to bargain if the atmosphere was the same as before,where both panels trusted each other. Diokno requested the Union panel to refrain frominvolving personalities and to instead focus on the negotiations.24[24] He suggested that in order

to break the impasse, the Union should prioritize the items it wanted to iron out. Divinagraciastated that the Bank should make the first move and make a list of items it wanted to be included

in the economic package. Except for the provisions on signing bonus and uniforms, the Unionand the Bank failed to agree on the remaining economic provisions of the CBA. The Union

declared a deadlock25[25] and filed a Notice of Strike before the National Conciliation andMediation Board (NCMB) on June 21, 1993, docketed as NCMB-NCR-NS-06-380-93.26[26]

On the other hand, the Bank filed a complaint for Unfair Labor Practice (ULP) and Damages

before the Arbitration Branch of the National Labor Relations Commission (NLRC) in Manila,docketed as NLRC Case No. 00-06-04191-93 against the Union on June 28, 1993. The Bank

alleged that the Union violated its duty to bargain, as it did not bargain in good faith. Itcontended that the Union demanded sky high economic demands,indicative of blue-sky

bargaining.27[27] Further, the Union violated its no strike- no lockout clause by filing a noticeof strike before the NCMB. Considering that the filing of notice of strike was an illegal act, the

Union officers should be dismissed. Finally, the Bank alleged that as a consequence of the


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illegal act, the Bank suffered nominal and actual damages and was forced to litigate and hire theservices of the lawyer.28[28]

On July 21, 1993, then Secretary of Labor and Employment (SOLE) Nieves R. Confesor,

pursuant to Article 263(g) of the Labor Code, issued an Order assuming jurisdiction over the

labor dispute at the Bank. The complaint for ULP filed by the Bank before the NLRC wasconsolidated with the complaint over which the SOLE assumed jurisdiction. After the partiessubmitted their respective position papers, the SOLE issued an Order on October 29, 1993, the

dispositive portion of which is herein quoted:

WHEREFORE, the Standard Chartered Bank and the Standard Chartered Bank EmployeesUnionNUBE are hereby ordered to execute a collective bargaining agreement incorporating

the dispositions contained herein. The CBA shall be retroactive to 01 April 1993 and shallremain effective for two years thereafter, or until such time as a new CBA has superseded it. All

provisions in the expired CBA not expressly modified or not passed upon herein are deemedretained while all new provisions which are being demanded by either party are deemed denied,

but without prejudice to such agreements as the parties may have arrived at in the meantime.

The Banks charge for unfair labor practice which it originally filed with the NLRC asNLRC-

NCR Case No. 00-06-04191-93 but which is deemed consolidated herein, is dismissed for lackof merit. On the other hand, the Unions charge for unfair labor practice is similarly dismissed.

Let a copy of this order be furnished the Labor Arbiter in whose sala NLRC-NCR Case No. 00-

06-04191-93 is pending for his guidance and appropriate action.29[29]

The SOLE gave the following economic awards:

1. Wage Increase:a) To be incorporated to present salary rates:Fourth year : 7% of basic monthly salary

Fifth year : 5% of basic monthly salary based on the 4th

year adjusted salary

b) Additional fixed amount:

Fourth year : P600.00 per month

Fifth year : P400.00 per month

2. Group Insurance

a) Hospitalization : P45,000.00

b) Life : P130,000.00c) Accident : P130,000.00

3. Medicine Allowance


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Fourth year : P5,500.00Fifth year : P6,000.00

4. Dental Benefits

Provision of dental retainer as proposed by the Bank, but without diminishing

existing benefits

5. Optical Allowance

Fourth year: P2,000.00Fifth year : P2,500.00

6. Death Assistancea) Employee : P30,000.00

b) Immediate Family Member : P5,000.00

7. Emergency LeaveFive (5) days for each contingency

8. Loansa) Car Loan : P200,000.00

b) Housing Loan : It cannot be denied that the costs attendant to having onesown home have tremendously gone up. The need, therefore, to improve on

this benefit cannot be overemphasized. Thus, the management is urged toincrease the existing and allowable housing loan that the Bank extends to its

employees to an amount that will give meaning and substance to this CBAbenefit.30[30]

The SOLE dismissed the charges of ULP of both the Union and the Bank, explaining that both

parties failed to substantiate their claims. CitingNational Labor Union v. Insular-YebanaTobacco Corporation,31[31]the SOLE stated that ULP charges would prosper only if shown tohave directly prejudiced the public interest.

Dissatisfied, the Union filed a motion for reconsideration with clarification, while the Bank filed

a motion for reconsideration. On December 16, 1993, the SOLE issued a Resolution denying themotions. The Union filed a second motion for reconsideration, which was, likewise, denied on

February 10, 1994.

On March 22, 1994, the Bank and the Union signed the CBA.32[32] Immediately thereafter, thewage increase was effected and the signing bonuses based on the increased wage were

distributed to the employees covered by the CBA.


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The Present Petition

On April 28, 1994, the Union filed this petition for certiorari under Rule 65 of the Rules ofProcedure alleging as follows:

A. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OFDISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISMISSING THEUNIONS CHARGE OF UNFAIR LABOR PRACTICE IN VIEW OF THE CLEAR

EVIDENCE OF RECORD AND ADMISSIONS PROVING THE UNFAIR LABORPRACTICES CHARGED.33[33]

B. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OFDISCRETION AMOUNTING TO LACK OF JURISDICTION IN FAILING TO RULE ON

OTHER UNFAIR LABOR PRACTICES CHARGED.34[34]

C. RESPONDENT HONORABLE SECRETARY COMMITTED GRAVE ABUSE OF

DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DISMISSING THECHARGES OF UNFAIR LABOR PRACTICES ON THE GROUND THAT NO PROOF OFINJURY TO THE PUBLIC INTEREST WAS PRESENTED.35[35]

The Union alleges that the SOLE acted with grave abuse of discretion amounting to lack or

excess of jurisdiction when it found that the Bank did not commit unfair labor practice when itinterfered with the Unions choice of negotiator. It argued that, Dioknos suggestion that the

negotiation be limited as a family affair was tantamount to suggesting that FederationPresident Jose Umali, Jr. be excluded from the Unions negotiating panel. It further argued that

contrary to the ruling of the public respondent, damage or injury to the public interest need notbe present in order for unfair labor practice to prosper.

The Union, likewise, pointed out that the public respondent failed to rule on the ULP chargesarising from the Banks surface bargaining. The Union contended that the Bank merely went

through the motions of collective bargaining without the intent to reach an agreement, and madebad faith proposals when it announced that the parties should begin from a clean slate. It argued

that the Bank opened the political provisions up for grabs, which had the effect of diminishingor obliterating the gains that the Union had made.

The Union also accused the Bank of refusing to disclose material and necessary data, even after a

request was made by the Union to validate its guestimates.

In its Comment, the Bank prayed that the petition be dismissed as the Union was estopped,considering that it signed the Collective Bargaining Agreement (CBA) on April 22, 1994. It


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asserted that contrary to the Unions allegations, it was the Union that committed ULP whennegotiator Jose Umali, Jr. hurled invectives at the Banks head negotiator, Cielito Diokno, and

demanded that she be excluded from the Banks negotiating team. Moreover, the Union engagedin blue-sky bargainingand isolated the no strike-no lockout clause of the existing CBA.

The Office of the Solicitor General, in representation of the public respondent, prayed that thepetition be dismissed. It asserted that the Union failed to prove its ULP charges and that thepublic respondent did not commit any grave abuse of discretion in issuing the assailed order and

resolutions.

The Issues

The issues presented for resolution are the following: (a) whether or not the Union was able to

substantiate its claim of unfair labor practice against the Bank arising from the latters allegedinterference with its choice of negotiator; surface bargaining; making bad faith non-economic

proposals; and refusal to furnish the Union with copies of the relevant data; (b) whether or not

the public respondent acted with grave abuse of discretion amounting to lack or excess ofjurisdiction when she issued the assailed order and resolutions; and, (c) whether or not thepetitioner is estopped from filing the instant action.

The Courts Ruling

The petition is bereft of merit.

Interference under Article248 (a) of the Labor Code

The petitioner asserts that the private respondent committed ULP, i.e., interference in theselection of the Unions negotiating panel, when Cielito Diokno, the Banks Human ResourceManager, suggested to the Unions President Eddie L. Divinagracia that Jose P. Umali, Jr.,

President of the NUBE, be excluded from the Unions negotiating panel. In support of its claim,Divinagracia executed an affidavit, stating that prior to the commencement of the negotiation,

Diokno approached him and suggested the exclusion of Umali from the Unions negotiatingpanel, and that during the first meeting, Diokno stated that the negotiation be kept a family

affair.

Citing the cases of U.S. Postal Service36[36] andHarley Davidson Motor Co., Inc., AMF,37[37]the Union claims that interference in the choice of the Unions bargaining panel is tantamount to

ULP.

In the aforecited cases, the alleged ULP was based on the employers violation of Section 8(a)(1)

and (5) of the National Labor Relations Act (NLRA),38[38] which pertain to the interference,


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restraint or coercion of the employer in the employees exercise of their rights to self-organization and to bargain collectively through representatives of their own choosing; and the

refusal of the employer to bargain collectively with the employees representatives. In bothcases, the National Labor Relations Board held that upon the employers refusal to engage in

negotiations with the Union for collective-bargaining contract when the Union includes a person

who is not an employee, or one who is a member or an official of other labor organizations, suchemployer is engaged in unfair labor practice under Section 8(a)(1) and (5) of the NLRA.

The Union further cited the case ofInsular Life Assurance Co., Ltd. Employees AssociationNATU vs. Insular Life Assurance Co., Ltd.,39[39] wherein this Court said that the test of whether

an employer has interfered with and coerced employees in the exercise of their right to self-organization within the meaning of subsection (a)(1) is whether the employer has engaged in

conduct which it may reasonably be said, tends to interfere with the free exercise of employeesrights under Section 3 of the Act.40[40] Further, it is not necessary that there be direct evidence

that any employee was in fact intimidated or coerced by statements of threats of the employer ifthere is a reasonable inference that anti-union conduct of the employer does have an adverse

effect on self-organization and collective bargaining.41[41]

Under the International Labor Organization Convention (ILO) No. 87 FREEDOM OFASSOCIATION AND PROTECTION OF THE RIGHT TO ORGANIZE to which the

Philippines is a signatory, workers and employers, withoutdistinction whatsoever, shall havethe right to establish and, subject only to the rules of the organization concerned, to job

organizations of their own choosing without previous authorization.42[42] Workers andemployers organizations shall have the right to draw up their constitutions and rules, to elect

their representatives in full freedom to organize their administration and activities and toformulate their programs.43[43] Article 2 of ILO Convention No. 98 pertaining to the Right to

Organize and Collective Bargaining, provides:

Article 2

1. Workers and employers organizations shall enjoy adequate protection against any acts

or interference by each other or each others agents or members in their establishment,functioning or administration.


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2. In particular, acts which are designed to promote the establishment of workersorganizations under the domination of employers or employers organizations or to support

workers organizations by financial or other means, with the object of placing such organizationsunder the control of employers or employers organizations within the meaning of this Article.

The aforcited ILO Conventions are incorporated in our Labor Code, particularly in Article 243thereof, which provides:

ART. 243. COVERAGE AND EMPLOYEES RIGHT TO SELF-ORGANIZATION.All personsemployed in commercial, industrial and agricultural enterprises and in religious, charitable,

medical or educational institutions whether operating for profit or not, shall have the right to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of

collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, ruralworkers and those without any definite employers may form labor organizations for their mutual

aid and protection.

and Articles 248 and 249 respecting ULP of employers and labor organizations.

The said ILO Conventions were ratified on December 29, 1953. However, even as early as the

1935 Constitution,44[44] the State had already expressly bestowed protection to labor as part ofthe general provisions. The 1973 Constitution,45[45] on the other hand, declared it as a policy of

the state to afford protection to labor, specifying that the workers rights to self-organization,collective bargaining, security of tenure, and just and humane conditions of work would be

assured. For its part, the 1987 Constitution, aside from making it a policy to protect the rights ofworkers and promote their welfare,46[46] devotes an entire section, emphasizing its mandate to

afford protection to labor, and highlights the principle of shared responsibility betweenworkers and employers to promote industrial peace.47[47]

Article 248(a) of the Labor Code, considers it an unfair labor practice when an employer

interferes, restrains or coerces employees in the exercise of their right to self-organization or theright to form association. The right to self-organization necessarily includes the right to

collective bargaining.

Parenthetically, if an employer interferes in the selection of its negotiators or coerces the Union

to exclude from its panel of negotiators a representative of the Union, and if it can be inferredthat the employer adopted the said act to yield adverse effects on the free exercise to right to self-

organization or on the right to collective bargaining of the employees, ULP under Article 248(a)in connection with Article 243 of the Labor Code is committed.


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In order to show that the employer committed ULP under the Labor Code, substantial evidence isrequired 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.48[48] In the case at bar,the Union bases its claim of interference on the alleged suggestions of Diokno to exclude Umali

from the Unions negotiating panel.

The circumstances that occurred during the negotiation do not show that the suggestion made byDiokno to Divinagracia is an anti-union conduct from which it can be inferred that the Bank

consciously adopted such act to yield adverse effects on the free exercise of the right to self-organization and collective bargaining of the employees, especially considering that such was

undertaken previous to the commencement of the negotiation and simultaneously withDivinagracias suggestion that the bank lawyers be excluded from its negotiating panel.

The records show that after the initiation of the collective bargaining process, with the inclusion

of Umali in the Unions negotiating panel, the negotiations pushed through. The complaint wasmade only on August 16, 1993 after a deadlock was declared by the Union on June 15, 1993.

It is clear that such ULP charge was merely an afterthought. The accusation occurred after thearguments and differences over the economic provisions became heated and the parties had

become frustrated. It happened after the parties started to involve personalities. As the publicrespondent noted, passions may rise, and as a result, suggestions given under less adversarial

situations may be colored with unintended meanings.49[49] Such is what appears to havehappened in this case.

The Duty to Bargain

Collectively

If at all, the suggestion made by Diokno to Divinagracia should be construed as part of thenormal relations and innocent communications, which are all part of the friendly relations

between the Union and Bank.

The Union alleges that the Bank violated its duty to bargain; hence, committed ULP under

Article 248(g) when it engaged in surface bargaining. It alleged that the Bank just went throughthe motions of bargaining without any intent of reaching an agreement, as evident in the Banks

counter-proposals. It explained that of the 34 economic provisions it made, the Bank only made6 economic counterproposals. Further, as borne by the minutes of the meetings, the Bank, after

indicating the economic provisions it had rejected, accepted, retained or were open fordiscussion, refused to make a list of items it agreed to include in the economic package.

Surface bargaining is defined as going through the motions of negotiating without any legal

intent to reach an agreement.50[50] The resolution of surface bargaining allegations never


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presents an easy issue. The determination of whether a party has engaged in unlawful surfacebargaining is usually a difficult one because it involves, at bottom, a question of the intent of the

party in question, and usually such intent can only be inferred from the totality of the challengedpartys conduct both at and away from thebargaining table.51[51] It involves the question of

whether an employers conduct demonstrates an unwillingness to bargain in good faith or is

merely hard bargaining.52[52]

The minutes of meetings from March 12, 1993 to June 15, 1993 do not show that the Bank had

any intention of violating its duty to bargain with the Union. Records show that after the Unionsent its proposal to the Bank on February 17, 1993, the latter replied with a list of its counter-

proposals on February 24, 1993. Thereafter, meetings were set for the settlement of theirdifferences. The minutes of the meetings show that both the Bank and the Union exchanged

economic and non-economic proposals and counter-proposals.

The Union has not been able to show that the Bank had done acts, both at and away from thebargaining table, which tend to show that it did not want to reach an agreement with the Union or

to settle the differences between it and the Union. Admittedly, the parties were not able to agreeand reached a deadlock. However, it is herein emphasized that the duty to bargain does not

compel either party to agree to a proposal or require the making of a concession.53[53] Hence,the parties failure to agree did not amount to ULP under Article 248(g) for violation of the duty

to bargain.

We can hardly dispute this finding, for it finds support in the evidence. The inference that

respondents did not refuse to bargain collectively with the complaining union because theyaccepted some of the demands while they refused the others even leaving open other demands

for future discussion is correct, especially so when those demands were discussed at a meetingcalled by respondents themselves precisely in view of the letter sent by the union on April 29,

196054[54]

In view of the finding of lack of ULP based on Article 248(g), the accusation that the Bank madebad faith provisions has no leg to stand on. The records show that the Banks counter-proposals

on the non-economic provisions or political provisions did not put up for grabs the entire workof the Union and its predecessors. As can be gleaned from the Banks counter-proposal, there

were many provisions which it proposed to be retained. The revisions on the other provisionswere made after the parties had come to an agreement. Far from buttressing the Unions claim

that the Bank made bad-faith proposals on the non-economic provisions, all these, on thecontrary, disprove such allegations.


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We, likewise, find that the Union failed to substantiate its claim that the Bank refused to furnishthe information it needed.

While the refusal to furnish requested information is in itself an unfair labor practice, and also

supports the inference of surface bargaining,55[55] in the case at bar, Umali, in a meeting dated

May 18, 1993, requested the Bank to validate itsguestimateson the data of the rank and file.However, Umali failed to put his request in writing as provided for in Article 242(c) of the LaborCode:

Article 242. Rights of Legitimate Labor Organization

(c) To be furnished by the employer, upon written request, with the annual audited financialstatements, including the balance sheet and the profit and loss statement, within thirty (30)

calendar days from the date of receipt of the request, after the union has been duly recognized bythe employer or certified as the sole and exclusive bargaining representatives of the employees in

the bargaining unit, or within sixty (60) calendar days before the expiration of the existing

collective bargaining agreement, or during the collective negotiation;

The Union, did not, as the Labor Code requires, send a written request for the issuance of a copy

of the data about the Banks rank and file employees. Moreover, as alleged by the Union, thefact that the Bank made use of the aforesaidguestimates, amounts to a validation of the data it

had used in its presentation.

No Grave Abuse of DiscretionOn the Part of the Public Respondent

The special civil action for certiorari may be availed of when the tribunal, board, or officer

exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction andthere is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law for thepurpose of annulling the proceeding.56[56] Grave abuse of discretion implies such capricious

and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or where the power isexercised in an arbitrary or despotic manner by reason of passion or personal hostility which

must be so patent and gross as to amount to an invasion of positive duty or to a virtual refusal toperform the duty enjoined or to act at all in contemplation of law. Mere abuse of discretion is

not enough.57[57]

While it is true that a showing of prejudice to public interest is not a requisite for ULP charges toprosper, it cannot be said that the public respondent acted in capricious and whimsical exercise

of judgment, equivalent to lack of jurisdiction or excess thereof. Neither was it shown that the


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public respondent exercised its power in an arbitrary and despotic manner by reason of passionor personal hostility.

Estoppel not Applicable

In the Case at Bar

The respondent Bank argues that the petitioner is estopped from raising the issue of ULP when itsigned the new CBA.

Article 1431 of the Civil Code provides:

Through estoppel an admission or representation is rendered conclusive upon the person makingit, and cannot be denied or disproved as against the person relying thereon.

A person, who by his deed or conduct has induced another to act in a particular manner, is barred

from adopting an inconsistent position, attitude or course of conduct that thereby causes loss or

injury to another.58[58]

In the case, however, the approval of the CBA and the release of signing bonus do notnecessarily mean that the Union waived its ULP claim against the Bank during the past

negotiations. After all, the conclusion of the CBA was included in the order of the SOLE, whilethe signing bonus was included in the CBA itself. Moreover, the Union twice filed a motion for

reconsideration respecting its ULP charges against the Bank before the SOLE.

The Union Did Not EngageIn Blue-Sky Bargaining

We, likewise, do not agree that the Union is guilty of ULP for engaging in blue-sky bargainingor making exaggerated or unreasonable proposals.59[59] The Bank failed to show that theeconomic demands made by the Union were exaggerated or unreasonable. The minutes of the

meeting show that the Union based its economic proposals on data of rank and file employeesand the prevailing economic benefits received by bank employees from other foreign banks

doing business in the Philippines and other branches of the Bank in the Asian region.

In sum, we find that the public respondent did not act with grave abuse of discretion amounting

to lack or excess of jurisdiction when it issued the questioned order and resolutions. While theapproval of the CBA and the release of the signing bonus did not estop the Union from pursuing

its claims of ULP against the Bank, we find that the latter did not engage in ULP. We, likewise,

hold that the Union is not guilty of ULP.


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IN LIGHT OF THE FOREGOING,the October 29, 1993 Order and December 16, 1993 andFebruary 10, 1994 Resolutions of then Secretary of Labor Nieves R. Confesor are AFFIRMED.

The Petition is hereby DISMISSED.

SO ORDERED.

Puno, (Chairman), Quisumbing, Austria-Martinez, and Tinga, JJ., concur.

+++++++++++++++++++

4. G.R. No. L-54334 January 22, 1986

KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT,

petitioner,vs.

NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANGKILUSAN NG PAGGAWA (KILUSAN), respondents.

Ablan and Associates for petitioner.

Abdulcadir T. Ibrahim for private respondent.

CUEVAS, J.:

Petition for certiorari to annul the decision1of the National Labor Relations Commission

(NLRC) dated July 20, 1979 which found petitioner Sweden Ice Cream guilty of unfair laborpractice for unjustified refusal to bargain, in violation of par. (g) of Article 249

2of the New

Labor Code,3and declared the draft proposal of the Union for a collective bargaining agreement

as the governing collective bargaining agreement between the employees and the management.

The pertinent background facts are as follows:

In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa (Union

for short), a legitimate late labor federation, won and was subsequently certified in a resolutiondated November 29, 1978 by the Bureau of Labor Relations as the sole and exclusive bargainingagent of the rank-and-file employees of Sweden Ice Cream Plant (Company for short). The

Company's motion for reconsideration of the said resolution was denied on January 25, 1978.

Thereafter, and more specifically on December 7, 1978, the Union furnished4the Company with

two copies of its proposed collective bargaining agreement. At the same time, it requested the

Company for its counter proposals. Eliciting no response to the aforesaid request, the Union


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again wrote the Company reiterating its request for collective bargaining negotiations and for theCompany to furnish them with its counter proposals. Both requests 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, on February 14, 1979, filed a "Notice of Strike", with the Bureau of Labor Relations(BLR) on ground of unresolved economic issues in collective bargaining.5

Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But allattempts towards an amicable settlement failed, prompting the Bureau of Labor Relations to

certify the case to the National Labor Relations Commission (NLRC) for compulsory arbitrationpursuant to Presidential Decree No. 823, as amended. The labor arbiter, Andres Fidelino, to

whom the case was assigned, set the initial hearing for April 29, 1979. For failure however, ofthe parties to submit their respective position papers as required, the said hearing was cancelled

and reset to another date. Meanwhile, the Union submitted its position paper. The Company didnot, and instead requested for a resetting which was granted. The Company was directed anew to

submit its financial statements for the years 1976, 1977, and 1978.

The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of

record, Atty. Rodolfo dela Cruz. On May 24, 1978, Atty. Fortunato Panganiban formally enteredhis appearance as counsel for the Company only to request for another postponement allegedly

for the purpose of acquainting himself with the case. Meanwhile, the Company submitted itsposition paper on May 28, 1979.

When the case was called for hearing on June 4, 1979 as scheduled, the Company's

representative, Mr. Ching, who was supposed to be examined, failed to appear. Atty. Panganibanthen requested for another postponement which the labor arbiter denied. He also ruled that the

Company has waived its right to present further evidence and, therefore, considered the casesubmitted for resolution.

On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor

Relations Commission. On July 20, 1979, the National Labor Relations Commission rendered itsdecision, the dispositive portion of which reads as follows:

WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty ofunjustified refusal to bargain, in violation of Section (g) Article 248 (now Article

249), of P.D. 442, as amended. Further, the draft proposal for a collectivebargaining agreement (Exh. "E ") hereto attached and made an integral part of this

decision, sent by the Union (Private respondent) to the respondent (petitionerherein) and which is hereby found to be reasonable under the premises, is hereby

declared to be the collective agreement which should govern the relationshipbetween the parties herein.

SO ORDERED. (Emphasis supplied)


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Petitioner now comes before Us assailing the aforesaid decision contending that the NationalLabor Relations Commission acted without or in excess of its jurisdiction or with grave abuse of

discretion amounting to lack of jurisdiction in rendering the challenged decision. On August 4,1980, this Court dismissed the petition for lack of merit. Upon motion of the petitioner, however,

the Resolution of dismissal was reconsidered and the petition was given due course in a

Resolution dated April 1, 1981.

Petitioner Company now maintains that its right to procedural due process has been violated

when it was precluded from presenting further evidence in support of its stand and when itsrequest for further postponement was denied. Petitioner further contends that the National Labor

Relations Commission's finding of unfair labor practice for refusal to bargain is not supported bylaw and the evidence considering that it was only on May 24, 1979 when the Union furnished

them with a copy of the proposed Collective Bargaining Agreement and it was only then thatthey came to know of the Union's demands; and finally, that the Collective Bargaining

Agreement approved and adopted by the National Labor Relations Commission is unreasonableand lacks legal basis.

The petition lacks merit. Consequently, its dismissal is in order.

Collective bargaining which is defined as negotiations towards a collective agreement,6is 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 isa 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 anemployer 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 termsand conditions of employment including proposals for adjusting any grievance or question

arising under such an agreement and executing a contract incorporating such agreement, ifrequested by either party.

While it is a mutual obligation of the parties to bargain, the employer, however, is not under any

legal duty to initiate contract negotiation.7The 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 anyof 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.

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, thetotality of which is indicative of the latter's disregard of, and failure to live up to, what isenjoined by the Labor Codeto bargain in good faith.

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 Unionwas a duly certified bargaining agent; (2) it made a definite request to bargain, accompanied with


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a copy of the proposed Collective Bargaining Agreement, to the Company not only once buttwice 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.8A

Company's refusal to make counter proposal if considered in relation to the entire bargaining

process, may indicate bad faith and this is specially true where the Union's request for a counter

proposal is left unanswered.

9

Even during the period of compulsory arbitration before theNLRC, petitioner Company's approach and attitude-stalling the negotiation by a series ofpostponements, 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 reachan agreement with the Union. Petitioner has not at any instance, evinced good faith or

willingness to discuss freely and fully the claims and demands set forth by the Union much lessjustify its opposition thereto.

10

The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union

(PAFLU) vs. Herald Publications11

the rule had been laid down that "unfair labor practice iscommitted when it is shown that the respondent employer, after having been served with a

written bargaining proposal by the petitioning Union, did not even bother to submit an answer orreply to the said proposal This doctrine was reiterated anew inBradman vs. Court of Industrial

Relations12

wherein it was further ruled that "while the law does not compel the parties to reachan agreement, it does contemplate that both parties will approach the negotiation with an open

mind and make a reasonable effort to reach a common ground of agreement

As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitionercapitalizes on the issue of due process claiming, that it was denied the right to be heard and

present its side when the Labor Arbiter denied the Company's motion for further postponement.

Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements

granted in its behalf, the claimed denial of due process appeared totally bereft of any legal andfactual support. As herein earlier stated, petitioner had not even honored respondent Union with

any reply to the latter's successive letters, all geared towards bringing the Company to thebargaining table. It did not even bother to furnish or serve the Union with its counter proposal

despite persistent requests made therefor. Certainly, the moves and overall behavior ofpetitioner-company were in total derogation of the policy enshrined in the New Labor Code

which is aimed towards expediting settlement of economic disputes. Hence, this Court is notprepared to affix its imprimatur to such an illegal scheme and dubious maneuvers.

Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining

Agreement which was approved and adopted by the NLRC is a total nullity for it lacks thecompany's consent, much less its argument that once the Collective Bargaining Agreement is

implemented, the Company will face the prospect of closing down because it has to pay astaggering amount of economic benefits to the Union that will equal if not exceed its capital.

Such a stand and the evidence in support thereof should have been presented before the LaborArbiter which is the proper forum for the purpose.

We agree with the pronouncement that it is not obligatory upon either side of a labor controversyto precipitately accept or agree to the proposals of the other. But an erring party should not be


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tolerated and allowed with impunity to resort to schemes feigning negotiations by going throughempty gestures.

13More so, as in the instant case, where the intervention of the National Labor

Relations Commission was properly sought for after conciliation efforts undertaken by the BLRfailed. The instant case being a certified one, it must be resolved by the NLRC pursuant to the

mandate of P.D. 873, as amended, which authorizes the said body to determine the

reasonableness of the terms and conditions of employment embodied in any CollectiveBargaining Agreement. To that extent, utmost deference to its findings of reasonableness of anyCollective Bargaining Agreement as the governing agreement by the employees and

management must be accorded due respect by this Court.

WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued onAugust 27, 1980, is LIFTED and SET ASIDE.

No pronouncement as to costs.

SO ORDERED.

Concepcion, Jr., (Chairman), Abad Santos, Escolin and Alampay, JJ., concur.

++++++++++++++++++++++++++

FIRST DIVISION

[G.R. No. 111262. September 19, 1996]

SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, represented by its PresidentRAYMUNDO HIPOLITO, JR.,petitioner, vs. HON. MA. NIEVES D. CONFESOR, Secretary

of Labor, Dept. of Labor & Employment, SAN MIGUEL CORPORATION, MAGNOLIACORPORATION (Formerly, Magnolia Plant) and SAN MIGUEL FOODS, INC. (Formerly, B-

Meg Plant), respondents.

D E C I S I O N

KAPUNAN,J.:

This is a petition for certiorariassailing the Order of the Secretary of Labor rendered on

February 15, 1993 involving a labor dispute at San Miguel Corporation.

The facts are as follows:

On June 28, 1990, petitioner-union San Miguel Corporation Employees Union - PTGWO entered

into a Collective Bargaining Agreement (CBA) with private respondent San Miguel Corporation(SMC) to take effect upon the expiration of the previous CBA or on June 30, 1989.


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This CBA provided, among others, that:

ARTICLE XIV

DURATION OF AGREEMENT

SECTION 1. This Agreement which shall be binding upon the parties hereto and their respective

successors-in-interest, shall become effective and shall remain in force and effect until June 30,1992.

SEC. 2. In accordance with Article 253-A of the Labor Code as amended, the term of this

Agreement insofar as the representation aspect is concerned, shall be for five (5) years from July1, 1989 to June 30, 1994. Hence, the freedom period for purposes of such representation shall be

sixty (60) days prior to June 30, 1994.

SEC. 3. Sixty (60) days prior to June 30, 1992 either party may initiate negotiations of all

provisions of this Agreement, except insofar as the representation aspect is concerned. If noagreement is reached in such negotiations, this Agreement shall nevertheless remain in force upto the time a subsequent agreement is reached by the parties.i[1]

In keeping with their vision and long term strategy for business expansion, SMC managementinformed its employees in a letter dated August 13, 1991ii[2]that the company which was

composed of four operating divisions namely: (1) Beer, (2) Packaging, (3) Feeds and Livestocks,(4) Magnolia and Agri-business would undergo a restructuring.iii[3]

Effective October 1, 1991, Magnolia and Feeds and Livestock Division were spun-off and

became two separate and distinct corporations: Magnolia Corporation (Magnolia) and San

Miguel Foods, Inc. (SMFI). Notwithstanding the spin-offs, the CBA remained in force andeffect.

After June 30, 1992, the CBA was renegotiated in accordance with the terms of the CBA andArticle 253-A of the Labor Code. Negotiations started sometime in July, 1992 with the two

parties submitting their respective proposals and counterproposals.

During the negotiations, 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 therenegotiated terms of the CBA shall be effective only for the remaining period of two years or

until June 30, 1994.

SMC, on the other hand, contended that the members/employees who had moved to Magnoliaand 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.

Unable to agree on these issues with respect to the bargaining unit and duration of the CBA,petitioner-union declared a deadlock on September 29, 1990.


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On October 2, 1992, a Notice of Strike was filed against SMC.

In order to avert a strike, SMC requested the National Conciliation and Mediation Board(NCMB) to conduct preventive mediation. No settlement was arrived at despite several meetings

held between the parties.

On November 3, 1992, a strike vote was conducted which resulted in a yes vote in favor of astrike.

On November 4, 1992, private respondents SMC, Magnolia and SMFI filed a petition with theSecretary of Labor praying that the latter assume jurisdiction over the labor dispute in a vital

industry.

As prayed for, the Secretary of Labor assumed jurisdiction over the labor dispute on November10, 1992.iv[4] Several conciliation meetings were held but still no agreement/settlement was

arrived at by both parties.

After the parties submitted their respective position papers, the Secretary of Labor issued theassailed Order on February 15, 1993 directing, among others, that the renegotiated terms of the

CBA shall be effective for the period of three (3) years from June 30, 1992; and that such CBAshall cover only the employees of SMC and not of Magnolia and SMFI.

Dissatisfied, petitioner-union now comes to this Court questioning this Order of the Secretary ofLabor.

Subsequently, on March 30, 1995,v[5] petitioner-union filed a Motion for Issuance of a

Temporary Restraining Order or Writ of Preliminary Injunction to enjoin the holding of the

certification elections in the different companies, maintaining that the employees of Magnoliaand SMFI fall within the bargaining unit of SMC.

On March 29, 1995, the Court issued a resolution granting the temporary restraining orderprayed for.vi[6]

Meanwhile, an urgent motion for leave to intervenevii[7]in the case was filed by the Samahan ng

Malayang Manggagawa-San Miguel Corporation-Federation of Free Workers (SMM-SMC-

FFW) through its authorized representiative, Elmer S. Armando, alleging that it is one of thecontending parties adversely effected by the temporary restraining order.

The Intervenor cited the case ofDaniel S.L. Borbon v. Hon. Bienvenido B. Laguesma,viii[8] G.R.No. 101766, March 5, 1993, where the Court recognized the separation of the employees ofMagnolia from the SMC bargaining unit. It then prayed for the lifting of the temporary

restraining order.

Likewise, Efren Carreon, Acting President of the SMCEU-PTGWO, filed a petition for thewithdrawal/dismissal of the petition considering that the temporary restraining order jeopardized

the employees right to conclude a new CBA. At the same time, he challenged the legal


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personality of Mr. Raymundo Hipolito, Jr. to represent the Union as its president when the latterwas already officially dismissed from the company on October 4, 1994.

Amidst all these pleadings, the following primordial issues arise:

1) Whether or not the duration of the renegotiated terms of the CBA is to be effective for threeyears or for only two years; and

2) Whether or not the bargaining unit of SMC includes also the employees of Magnolia and

SMFI.

Petitioner-union contends that the duration for the non-representation provisions of the CBAshould be coterminous with the term of the bargaining agency which in effect shall be for the

remaining two years of the current CBA, citing a previous decision of the Secretary of Labor onDecember 14, 1992 in the matter of the labor dispute at Philippine Refining Company.ix[9]

However, the Secretary of Labor, in her questioned Order of February 15, 1993 ruled that therenegotiated terms of the CBA at SMC should run for a period of three (3) years.

We agree with the Secretary of Labor.

Pertinent to the first issue is Art. 253-A of the Labor Code as amended which reads:

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 thedate of expiry of such five year term of the Collective Bargaining Agreement. All otherprovisions 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 BargainingAgreement entered into within six (6) months from the date of expiry of the term of such other

provisions as fixed in such Collective Bargaining Agreement, shall retroact to the dayimmediately 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 therenegotiation of the collective bargaining agreement, the parties may exercise their rights under

this Code. (underlining supplied.)

Article 253-A is a new provision. This was incorporated by Section 21 of Republic Act No.6715 (the Herrera-Veloso Law) which took effect on March 21, 1989. This new provision statesthat 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 benegotiated not later than three (3) years after its execution. The representation aspect refers to

the identity and majority status of the union that negotiated the CBA as the exclusive bargainingrepresentative of the appropriate bargaining unit concerned. All other provisions simply refers


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to the rest of the CBA, economic as well as non-economic provisions, exceptrepresentation.x[10]

As the Secretary of Labor herself observed in the instant case, the law is clear and definite on the

duration of the CBA insofar as the representation aspect is concerned, but is quite ambiguous

with the terms of the other provisions of the CBA. It is a cardinal principle of statutoryconstruction that the Court must ascertain the legislative intent for the purpose of giving effect toany statute. The history of the times and state of the things existing when the act was framed or

adopted must be followed and the conditions of the things at the time of the enactment of the lawshould be considered to determine the legislative intent.xi[11] We look into the discussions

leading to the passage of the law:

THE CHAIRMAN (REP. VELASCO): . . . the CBA, insofar as the economic provisions areconcerned . . .

THE CHAIRMAN (SEN. HERRERA): Maximum of three years?

THE CHAIRMAN (SEN. VELOSO): Maximum of three years.

THE CHAIRMAN (SEN. HERRERA): Present practice?

THE CHAIRMAN (REP. VELOSO): In other words, after three years puwede nang

magnegotiate in that CBA for the remaining two years.

THE CHAIRMAN (REP. HERRERA): You can negotiate for one year, two years or three yearsbut assuming three years which, I think, thats the likelihood. . . .

THE CHAIRMAN (REP. VELOSO): Yes.

THE CHAIRMAN (SEN. HERRERA): Three years, the new union, assuming there will be achange of agent, at least he has one year to administer and to adjust, to develop rapport with the

management. Yan ang importante.

You know, for us na nagne-negotiate, and hazard talaga sa negotiation, when we negotiate withsomebody na hindi natin kilala, then, we are governed by our biases na ito ay destroyer ng

Labor; ang mga employer, ito bayaran ko lang ito okay na.

Yan ang nangyayari, but let us give that allowance for one year to let them know.

Actually, ang thrust natin ay industrial peace, and there can be no industrial peace if you

encourage union to fight each other. Yan ang problema.xii[12]

x x x x x x x x x


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HON. ISIDRO: Madali iyan, kasi these two periods that are mentioned in the CBA seem toprovide some doubts later on in the implementation. Sabi kasi rito, insofar as representation

issue is concerned, seven years ang lifetime . . .

HON. CHAIRMAN HERRERA: Five years.

HON. ISIDRO: Five years, all the others three years.

HON. CHAIRMAN HERRERA: No. Ang three years duon sa terms and conditions, not later

than three years.

HON. ISIDRO: Not later than three years, so within three years you have to make a new CBA.

HON. CHAIRMAN HERRERA: Yes.

HON. ISIDRO: That is again for purposes of renewing the terms, three years na naman iyan

then, seven years . . .

HON. CHAIRMAN HERRERA: Not later than three years.

HON. ISIDRO: Assuming that they usually follow the periodthree years nang three years,but under this law with respect to representationfive years, ano? Now, after three years,

nagkaroon ng bagong terms, tapos na iyong term, renewed na iyong terms, ang karapatan noonsa representation issue mayroon pang two years left.

HON. CHAIRMAN HERRERA: One year na lang because six years nang lahat, three plusthree.

HON ISIDRO: Hindi, two years pa rin ang natitira, eh. Three years pa lang ang natatapos. So,

another CBA was formed and this CBA mayroon na naman siyang bagong five years withrespect to representation issue.

HON. CHAIRMAN HERRERA: Hindi. Hindi na. Ganito iyan. Iyong terms and conditions for

three years.

HON. ISIDRO: Yes.

HON. CHAIRMAN HERRERA: On the third year you can start negotiating to change the terms

and conditions.

HON. ISIDRO: Yes.

HON. CHAIRMAN HERRERA: Assuming you will follow the practice . . .

HON. ISIDRO: Oo.


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HON. CHAIRMAN HERRERA: But on the fifth year, ang representation status now can bequestioned, so baka puwedeng magkaroon ng certification election. If the incumbent union

loses, then the new union administers the contract for one year to give him time to know hiscounterpartthe employer, before he can negotiate for a new term. Iyan ang advantage.

HON. ISIDRO: Kasi, when the CBA has only a three-year lifetime with respect to the terms andconditions and then, so you have to renew that in three yearsyou ren

Labrel Set 3

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Transcript of Labrel Set 3