BENGUET CONSOLIDATED, INC. vs.

BCI EMPLOYEES &

WORKERS UNION-PAFLU, PHILIPPINE ASSOCIATION OF FREE
LABOR UNIONS, CIPRIANO CID and JUANITO GARCIA

G.R. No. L-24711,; Apr 30, 1968

FACTS:

On June 23, 1959, the Benguet-Balatoc Workers Union (“BBWU”), for and in
behalf of all Benguet Consolidated, Inc (BENGUET) employees in its mines
and milling establishment located at Balatoc, Antamok and Acupan, Mt.
Province, entered into a Collective Bargaining Contract (CONTRACT) with
BENGUET. The CONTRACT was stipulated to be effective for a period of 4-
1/2 years, or from June 23, 1959 to December 23, 1963. It likewise embodied a
No-Strike, No-Lockout clause.

3 years later, or on April 6, 1962, a certification election was conducted by the

Department of Labor among all the rank and file employees of BENGUET in
the same collective bargaining units. BCI EMPLOYEES & WORKERS UNION
(UNION) obtained more than 50% of the total number of votes, defeating
BBWU. The Court of Industrial Relations certified the UNION as the sole and
exclusive collective bargaining agent of all BENGUET employees as regards
rates of pay, wages, hours of work and such other terms and conditions of
employment allowed them by law or contract.

Later on, the UNION filed a notice of strike against BENGUET. UNION
members who were BENGUET employees in the mining camps at Acupan,
Antamok and Balatoc, went on strike. The strike was attended by violence,
some of the workers and executives of the BENGUET were prevented from
entering the premises and some of the properties of the BENGUET were
damaged as a result of the strike. Eventually, the parties agreed to end the
dispute. BENGUET and UNION executed the AGREEMENT. PAFLU placed
its conformity thereto. About a year later or on January 29, 1964, a collective
bargaining contract was finally executed between UNION-PAFLU and
BENGUET.

Meanwhile, BENGUET sued UNION, PAFLU and their Presidents to recover

the amount the former incurred for the repair of the damaged properties
resulting from the strike. BENGUET also argued that the UNION violated the
CONTRACT which has a stipulation not to strike during the effectivity thereof.

Defendants unions and their presidents defended that: (1) they were not
bound by the CONTRACT which BBWU, the defeated union, had executed
with BENGUET; (2) the strike was due, among others, to unfair labor
practices of BENGUET; and (3) the strike was lawful and in the exercise of the
legitimate rights of UNION-PAFLU under Republic Act 875.
The trial court dismissed the complaint on the ground that the CONTRACT,
particularly the No-Strike clause, did not bind defendants. BENGUET
interposed the present appeal.

ISSUE:

Did the Collective Bargaining Contract executed between Benguet and BBWU
on June 23, 1959 and effective until December 23, 1963 automatically bind
UNION-PAFLU upon its certification, on August 18, 1962, as sole bargaining
representative of all BENGUET employees

RULING:

NO. BENGUET erroneously invokes the so-called “Doctrine of Substitution”

referred to in General Maritime Stevedore’s Union v. South Sea Shipping
Lines where it was ruled that:

“We also hold that where the bargaining contract is to run for more than two
years, the principle of substitution may well be adopted and enforced by the
CIR to the effect that after two years of the life of a bargaining agreement, a
certification election may be allowed by the CIR, that if a bargaining agent
other than the union or organization that executed the contract, is elected,
said new agent would have to respect said contract, but that it may bargain
with the management for the shortening of the life of the contract if it
considers it too long, or refuse to renew the contract pursuant to an
automatic renewal clause.”

BENGUET’s reliance upon the Principle of Substitution is totally misplaced.

This principle, formulated by the NLRB as its initial compromise solution to
the problem facing it when there occurs a shift in employees’ union allegiance
after the execution of a bargaining contract with their employer, merely states
that even during the effectivity of a collective bargaining agreement executed
between employer and employees thru their agent, the employees can change
said agent but the contract continues to bind them up to its expiration date.
They may bargain however for the shortening of said expiration date.

In formulating the “substitutionary” doctrine, the only consideration involved

was the employees‘ (principal) interest in the existing bargaining agreement.
The agent’s (union) interest never entered the picture. The majority of the
employees, as an entity under the statute, is the true party in interest to the
contract, holding rights through the agency of the union representative. Thus,
any exclusive interest claimed by the agent is defeasible at the will of the
principal. The “substitutionary” doctrine only provides that the employees
cannot revoke the validly executed collective bargaining contract with their
employer by the simple expedient of changing their bargaining agent. And it is
in the light of this that the phrase “said new agent would have to respect said
contract” must be understood. It only means that the employees, thru their
new bargaining agent, cannot renege on their collective bargaining contract,
except of course to negotiate with management for the shortening thereof.

The “substitutionary” doctrine cannot be invoked to support the contention

that a newly certified collective bargaining agent automatically assumes all the
personal undertakings — like the no-strike stipulation here — in the collective
bargaining agreement made by the deposed union. When BBWU bound itself
and its officers not to strike, it could not have validly bound also all the other
rival unions existing in the bargaining units in question. BBWU was the agent
of the employees, not of the other unions which possess distinct personalities.

UNION, as the newly certified bargaining agent, could always voluntarily

assume all the personal undertakings made by the displaced agent. But as the
lower court found, there was no showing at all that, prior to the strike, UNION
formally adopted the existing CONTRACT as its own and assumed all the
liabilities imposed by the same upon BBWU. Defendants were neither
signatories nor participants in the CONTRACT.

Everything binding on a duly authorized agent, acting as such, is binding on

the principal; not vice-versa, unless there is mutual agency, or unless the agent
expressly binds himself to the party with whom he contracts. Here, it was the
previous agent who expressly bound itself to the other party, BENGUET.
UNION, the new agent, did not assume this undertaking of BBWU.

Since defendants were not contractually bound by the no-strike clause in the
CONTRACT, for the simple reason that they were not parties thereto, they
could not be liable for breach of contract to plaintiff.

WHEREFORE, the judgment of the lower court appealed from is hereby

affirmed

LAKAS NG MANGAGAGAWANG MAKABAYAN VS MARCELO ENTERPRISE

GR. NO. L-38258
J. GUERERO

FACTS:
On May 23, 1967, the Lakas had existing CBAs within the bargaining units in the
respective companies comprising Marcelo Companies. The said CBAs were entered
into while they were affiliated with a national federation, Phil Social Security
Labor Union.

Two of the CBAs were about to expire in May and June 1967. The other one faced
conflict as there was a rival union.
On March 14, 1967, the management of Marcelo Steel received a letter
requesting negotiation of a new CBA from PSSLU in behalf of UNWU. There were
also proposals from the unions in Marcelo Tire and Marcelo Rubber as the existing
CBA was about to expire. Same day, the union oin Marcelo Tire disauthorized
PSSLU as their agent. Afterwards, the rival union submitted ita own proposals.

Another requests were received on May 3, 1967 and May 23, 1967 from two
different unions.

As the management was confused as to which of the union really represents the
workers, the president asked for the proof of authorization from the unions and
they were informed of the conflicting claims and suggested that they file for
certification election and the decision of the court shall be followed and respected.

PSSLU refused the suggestion of the management and said that they will file ULP
for refusing to bargain with them. All of the unuons subsequently filed a Notice of
Strike.

MUEWA was certified as the bargaining agent as it represents the majority of the
workers in Marcelo Tire and that there were no oppositions from the other union
or interested persons.

Notices of Strike were withdrawn and the management agreed to sit down in a
conference for the bargaining. On the fourth conference, Lakas declared a strike
against Marcelo Companies. Acts of violence and vandalism attended by picketing,
the premises were blocked, windows of the plants were bad.y damaged.

Cases were filed against the strikers and a Return to Work order was agreed upon.
Marcelo Companies resumed its operations and strikers went back to work.

Marcelo Companies and Lakas resumed their bargaining negotiations.

On Oct. 13, 1967 the negotiations reached its final stage. Then Lakas declared
another strike without filing a notice of strike resulting to complete paralyzation of
the business.

Notices to return to work were posted and some of the strikers started working
again. The management required the workers to fill up forms so that they may be
given a schedule. However, the workers refused and insisted that they be admitted
without complying to the said requirement.

Lakas then filed a ULP case based on the alleged fact of non readmission of striking
members.

The trial court ruled that the Marcelo Companies were not remiss in their
obligation to bargain and that the strikes conducted were illegal. However, it was
decided that there was ULP in not readmitting all the strikers.

ISSUE:
-Whether or not Marcelo Companies are guilty of ULP
-legitimate representation

HELD:
The SC ruled in favor of Marcelo Companies. Lakas was not the bargaining
representative, yet the management did not ignore the demand for collective
bargaining neither it was refused.

Marcelo Companies may rightfully demand for reasonable proof of majority

representation on the part of the supposed or putative bargaining agent as it is a
natural consequence of the employer’s duty to bargain with the bargaining agent
who represents the majority of the workers. It is, however, necessary that such
demand is made in good faith and not as a pretext of delay or evasion.

Marcelo Companies did not commit ULP. The facts of the case shows that the
strikers were readmitted to work and the form required was intended for proper
scheduling and not to prevent workers from coming back to work. It is only those
who did not report back to work who are not readmitted.

G.R. No. 82341 December 6, 1989

SUNDOWNER DEVELOPMENT CORPORATION vs. HON. FRANKLIN M. DRILON, in
his capacity as Secretary of the Department of Labor and Employment,
NATIONAL UNION OF WORKERS IN HOTEL, RESTAURANT AND ALLIED
INDUSTRIES, (NUWHRAIN), HOTEL MABUHAY CHAPTER, THE CHAPTER
OFFICERS AND MEMBERS, HOTEL MABUHAY, INC. and MR. MARIANO PENANO,
President of Hotel Mabuhay, Inc.
FACTS:
Private respondent Hotel Mabuhay, Inc. (Mabuhay for short,) leased the premises
belonging to Santiago Syjuco, Inc. (Syjuco for short) located at 1430 A. Mabini St.,
Ermita, Manila. However, due to non-payment of rentals, a case for ejectment
was filed by Syjuco against Mabuhay in the Metropolitan Trial Court of Manila.
Mabuhay offered to amicably settle the case by surrendering the premises to
Syjuco and to sell its assets and personal property to any interested party.

Syjuco offered the said premises for lease to petitioner. The negotiation culminated
with the execution of the lease agreement on April 16, 1987 to commence on
May 1, 1987 and to expire on April 30,1992.

On same date Syjuco formally turned over the possession of the leased premises to
petitioner who actually took possession and occupied the same on May 1, 1987.

On May 4, 1987, respondent National Union of Workers in Hotel, Restaurant and

Allied Services (NUWHRAIN for short) picketed the leased premises, barricaded the
entrance to the leased premises and denied petitioner’s officers, employees and
guests free access to and egress from said premises. Thus, petitioner wrote a
letter-complaint to Syjuco.

A complaint for damages with preliminary injunction and/or temporary

restraining order was filed by petitioner on May 7, 1987 with the Regional Trial
Court of Manila. On the same day, the Executive Judge of said court issued a
restraining order against respondent NUWHRAIN.

On May 14, 1987, an order was issued by public respondent Secretary of Labor
assuming jurisdiction over the labor dispute, requiring all striking employees to
return to work and for respondent Mabuhay to accept all returning employees
pending final determination of the issue of the absorption of the former employees
of Mabuhay. The parties were also directed to submit their respective position
papers within ten (10) days from receipt of the order.

On May 25, 1987, Mabuhay submitted its position paper alleging among others
that it had sold all its assets and personal properties to petitioner and that there
was no sale or transfer of its shares whatsoever and that Mabuhay completely
ceased operation effective April 28,1987 and surrendered the premises to
petitioner so that there exists a legal and physical impossibility on its part to
comply with the return to work order specifically on absorption.
On June 26, 1987, petitioner in order to commence its operation, signed a tri-
partite agreement so the workers may lift their strike, by and among petitioner,
respondents NUWHRAIN and Mabuhay whereby the latter paid to respondent
NUWHRAIN the sum of P 638,000.00 in addition to the first payment in the sum
of P 386,447.11, for which reason respondent NUWHRAIN agreed to lift the
picket .

Respondent NUWHRAIN on July 13, 1987 filed its position paper alleging
connivance between Mabuhay and petitioner in selling the assets and closing the
hotel to escape its obligations to the employees of Mabuhay and so it prays that
petitioner accept the workforce of Mabuhay and pay backwages from April
15,1986 to April 28,1987, the day Mabuhay stopped operation.

On January 20, 1988, the public respondent issued an order requiring petitioner
to absorb the members of the union and to pay backwages from the time it
started operations up to the date of the order.

Petitioner filed on January 27,1988 a motion for reconsideration of the aforesaid

order. Respondent NUWHRAIN also filed a motion for clarification of the aforesaid
order.

On March 8, 1988, the public respondent denied said motion for reconsideration
and motion for clarification for lack of merit.

Hence, this petition for review by certiorari with prayer for preliminary injunction
and/or temporary restraining order filed by petitioner.

ISSUE:
HELD:
In the case at bar, contrary to the claim of the public respondent that the
transaction between petitioner and Mabuhay was attended with bad faith, the
court finds no cogent basis for such contention. Thus, the absorption of the
employees of Mabuhay may not be imposed on petitioner.

It is undisputed that when Mabuhay surrendered the leased premises to Syjuco and
asked Syjuco to offer same to other lessees it was Syjuco who found petitioner and
persuaded petitioner to lease said premises. Mabuhay had nothing to do with the
negotiation and consummation of the lease contract between petitioner and
Syjuco.
It was only when Mabuhay offered to sell its assets and personal properties in the
premises to petitioner that they came to deal with each other. It appears that
petitioner agreed to purchase said assets of respondent Mabuhay to enable
Mabuhay to pay its obligations to its striking employees and to Syjuco. Indeed, in
the deed of assignment that was executed by Mabuhay in favor of petitioner on
April 14, 1 987 for and in consideration of P2,500,000.00, it is specifically
provided therein that the same is “purely for and in consideration of the
sale/transfer and assignment of the personal properties and assets of Hotel
Mabuhay, Inc. listed . . . ” and “in no way involves any assumption or undertaking
on the part of Second Party (petitioner) of any debts or liabilities whatsoever of
Hotel Mabuhay, Inc.” The liabilities alluded to in this agreement should be
interpreted to mean not only any monetary liability of Mabuhay but any other
liability or obligation arising from the operation of its business including its liability
to its employees.

KIOK LOY VS NLRC

GR NO L-54334
J. CUEVAS

FACTS:
On Oct 3, 1978 the Pambansang Kilusan ng Paggawa a LLO won in the
certification election and subsequently certified in a resolution by the BLR as the
sole bargaining agent of the rank and file employees of Sweden Ice Cream Plant.
The company’s MR was denied.

On Dec 7, 1978 the union furnished the company of its proposal for the CBA and
requested for a counterproposal to no avail. Two subsequent requests were made
but itbwere ignored and remained unacted byt the company. The union then filed
a notice of strike with the BLR based on the ground of unresolved economic issues
in the CBA.

Conciliation proceedings were made but the amicable settlements failed.

Compulsory arbitration was resorted however the parties failed to submit position
papers then there were subsequent postponements and resets of the hearing. Upon
the submission of the union of its position paper, itbwas again reset to another
date, the company filed its position paper on May 28, 1979.
There were postponements again.
The labor arbiter submitted a report to NLRC and declared that the company is
guilty of unjustified refusal to bargain. The draft agreement submitted was found
to be reasonable under the premises.

ISSUE:
Whether or not the company violated its duty to bargain.

HELD:
The SC found that there was a valid cause to complain against the company.

Collective bargaining is the negotiations towards a collective agreement,

democratic frameworks designed to stabilize the relations between the labor and
management and to create a climate of sound and stable industrial peace.
It is a mutual responsibility of both parties, however, the employer is not under
the obligation of initiating contract negotiation.

Jurisdictional preconditions:
1) status of majority representation of the employees
2) proof of majority
3) demand to bargain

The three JP enumerated above were proved by the union.

A company’s refusal to make counter proposal may indicate bad faith and
especially true when left unanswered. The undue delay during the compulsory
arbritration leads to no other conclusion except that it is unwilling to negotiate
and reach an agreement.

KIOK LOY VS NLRC

GR NO L-54334
J. CUEVAS

FACTS:
On Oct 3, 1978 the Pambansang Kilusan ng Paggawa a LLO won in the
certification election and subsequently certified in a resolution by the BLR as the
sole bargaining agent of the rank and file employees of Sweden Ice Cream Plant.
The company’s MR was denied.

On Dec 7, 1978 the union furnished the company of its proposal for the CBA and
requested for a counterproposal to no avail. Two subsequent requests were made
but itbwere ignored and remained unacted byt the company. The union then filed
a notice of strike with the BLR based on the ground of unresolved economic issues
in the CBA.

Conciliation proceedings were made but the amicable settlements failed.

Compulsory arbitration was resorted however the parties failed to submit position
papers then there were subsequent postponements and resets of the hearing. Upon
the submission of the union of its position paper, itbwas again reset to another
date, the company filed its position paper on May 28, 1979.
There were postponements again.

The labor arbiter submitted a report to NLRC and declared that the company is
guilty of unjustified refusal to bargain. The draft agreement submitted was found
to be reasonable under the premises.

ISSUE:
Whether or not the company violated its duty to bargain.

HELD:
The SC found that there was a valid cause to complain against the company.

Collective bargaining is the negotiations towards a collective agreement,

democratic frameworks designed to stabilize the relations between the labor and
management and to create a climate of sound and stable industrial peace.
It is a mutual responsibility of both parties, however, the employer is not under
the obligation of initiating contract negotiation.

Jurisdictional preconditions:
1) status of majority representation of the employees
2) proof of majority
3) demand to bargain

The three JP enumerated above were proved by the union.

A company’s refusal to make counter proposal may indicate bad faith and
especially true when left unanswered. The undue delay during the compulsory
arbritration leads to no other conclusion except that it is unwilling to negotiate
and reach an agreement.
DIVINE WORD UNIVERSITY OF TACLOBAN VS SECRETARY OF LABOR
GR NO 91915
J. ROMERO

FACTS:
On Sept 6, 1984 the med-arbiter certified the Divine Word University Employees Union as
the sole and exclusive bargaining agent of the Divine Word University. The union submitted
its proposals on March 7, 1985. The University’s reply requested that a preliminary
conference be held on May 28, 1985. Before the conference the VP of the union resigned
and withdrew the proposals hence the PC was cancelled.

After three years, the affiliate of the union, Associated Labor Union, requested a conference
with the University for the purposes of continuing the bargaining negotiations. Not having
heard from the university, a follow up request was sent and warned the university from
intereference. The university maintained it silence.

The union thereafter filed a notice of strike on the grounds of bargaining deadlock and ULP,
refusal to bargain, discrimination and coercion. Conferences were held after the filing of the
notice of strike and the parties came to an agreement.

It was found however, that the university filed for a petition for certification election one hour
before the agreement was concluded.

The union then submitted proposals which were again ignored by the university. Marathon
conciliations were held to no avail.

The Sec of Labor assumed jurisdiction and directed that all striking workers to report back
to work within 24 hours.

The med-arbiter issued an order directing the conduct of the certification election. To Which
the Sec of Labor directed to hold in abeyance. The Sec of Labor dismissed the cases of
ULP filed by the union and the university.

ISSUE:
Whether or not certification election can be held after CBA was agreed upon after 5 years.

HELD:
An employer who is requested to bargain collectively may file a petition for certification
election any time except upon clear showing the existence of either:
1) petition is filed within one year from the issuance of a final certification election result OR
2) when a bargaining deadlock had been submitted to conciliation or arbitration or had
become the subject of a valid notice of strike or lockout.

Deadlock is the counteraction of things producing entire stoppage: a state of inaction or of

neutralization caused by the opposition of persons or factions. There is a deadlock when
there is a complete blocking or stoppage resulting from the action of equal and opposed
forces.

The records of the case shows that there was no reasonable effort at good faith bargaining
on the part of the university.

Procedure:
1) proposal
2) conference in case of differences
3) conciliation
4) the parties are prohibited from exercising acts which would impede or disrupt the early
settlement of the case
5) exert efforts for amicable settlement

The union after submitting proposals which were ignored by the university, remained
passive. Technically, the university has the right to file the petition for certification election
as there was no bargaining deadlock. However such right was forfeited by its inaction.

G.R. No. 113856 September 7, 1998

SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING UNITED WORKERS
OF THE PHILIPPINES (SMTFM-UWP) vs. NATIONAL LABOR RELATIONS
COMMISSION, HON. JOSE G. DE VERA and TOP FORM MANUFACTURING PHIL., INC.

FACTS:
Petitioner Samahang Manggagawa sa Top Form Manufacturing — United Workers of the
Philippines (SMTFM) was the certified collective bargaining representative of all regular
rank and file employees of private respondent Top Form Manufacturing Philippines, Inc. At
the collective bargaining negotiation held at the Milky Way Restaurant in Makati, Metro
Manila on February 27, 1990, the parties agreed to discuss unresolved economic issues.
According to the minutes of the meeting, Article VII of the collective bargaining agreement
was discussed.

On October 15, 1990, the RTWPB-NCR issued Wage Order No. 01 granting an increase of
P17.00 per day in the salary of workers. This was followed by Wage Order No. 02 dated
December 20, 1990 providing for a P12.00 daily increase in salary.

As expected, the union requested the implementation of said wage orders. However, they
demanded that the increase be on an across-the-board basis. Private respondent refused to
accede to that demand. Instead, it implemented a scheme of increases purportedly to avoid
wage distortion. Thus, private respondent granted the P17.00 increase under Wage Order
No. 01 to workers/employees receiving salary of P125.00 per day and below. The P12.00
increase mandated by Wage Order No. 02 was granted to those receiving the salary of
P140.00 per day and below. For employees receiving salary higher than P125.00 or
P140.00 per day, private respondent granted an escalated increase ranging from P6.99 to
P14.30 and from P6.00 to P10.00, respectively.

On October 24, 1991, the union, through its legal counsel, wrote private respondent a letter
demanding that it should “fulfill its pledge of sincerity to the union by granting an across-the-
board wage increases (sic) to all employees under the wage orders.” The union reiterated
that it had agreed to “retain the old provision of CBA” on the strength of private respondent’s
“promise and assurance” of an across-the-board salary increase should the government
mandate salary increases. Several conferences between the parties notwithstanding,
private respondent adamantly maintained its position on the salary increases it had granted
that were purportedly designed to avoid wage distortion.

Consequently, the union filed a complaint with the NCR NLRC alleging that private
respondent’s act of “reneging on its undertaking/promise clearly constitutes act of unfair
labor practice through bargaining in bad faith.” It charged private respondent with acts of
unfair labor practices or violation of Article 247 of the Labor Code, as amended, specifically
“bargaining in bad faith,” and prayed that it be awarded actual, moral and exemplary
damages. In its position paper, the union added that it was charging private respondent with
“violation of Article 100 of the Labor Code.”
Private respondent, on the other hand, contended that in implementing Wage Orders Nos.
01 and 02, it had avoided “the existence of a wage distortion” that would arise from such
implementation. It emphasized that only “after a reasonable length of time from the
implementation” of the wage orders “that the union surprisingly raised the question that the
company should have implemented said wage orders on an across-the-board basis.” It
asserted that there was no agreement to the effect that future wage increases mandated by
the government should be implemented on an across-the-board basis. Otherwise, that
agreement would have been incorporated and expressly stipulated in the CBA.

On March 11, 1992, Labor Arbiter Jose G. de Vera rendered a decision dismissing the
complaint for lack of merit.

petitioner appealed to the NLRC that, in turn, promulgated the assailed Resolution of April
29, 1993 9 dismissing the appeal for lack of merit. Still dissatisfied, petitioner sought
reconsideration which, however, was denied by the NLRC in the Resolution dated January
17, 1994. Hence, the instant petition for certiorari

ISSUE:
whether or not an employer committed an unfair labor practice by bargaining in bad faith
and discriminating against its employees.

HELD:
To start with, if there was indeed a promise or undertaking on the part of private respondent
to obligate itself to grant an automatic across-the-board wage increase, petitioner union
should have requested or demanded that such “promise or undertaking” be incorporated in
the CBA. After all, petitioner union has the means under the law to compel private
respondent to incorporate this specific economic proposal in the CBA. It could have invoked
Article 252 of the Labor Code defining “duty to bargain,” thus, the duty includes “executing a
contract incorporating such agreements if requested by either party.” Petitioner union’s
assertion that it had insisted on the incorporation of the same proposal may have a factual
basis considering the allegations in the aforementioned joint affidavit of its members.
However, Article 252 also states that the duty to bargain “does not compel any party to
agree to a proposal or make any concession.” Thus, petitioner union may not validly claim
that the proposal embodied in the Minutes of the negotiation forms part of the CBA that it
finally entered into with private respondent.

ASSOCIATED LABOR UNION

VS

CALLEJA

179 SCRA 127

[May 5, 1989]

NATURE

Special civil action for certiorari and prohibition

FACTS

-The associated Labor Unions (ALU) informed GAW Trading, Inc. (GAWTI) that majority
of the latter’s employees have authorized ALU to be their sole and exclusive bargaining
representative, and requested GAW Trading Inc., for a conference for the execution of an
initial CBA. GAWTI recognized ALU as the sole and exclusive bargaining agent for
the majority of its employees and for which it set the time for conference and/or
negotiation at 4PM on May 12, 1986 at the Pillsbury Office, Aboitiz Building Juan Luna
Street, Cebu City. On May 15, 1986, ALU in behalf of the majority of the employees of
GAW Trading Inc. and GAWTI signed and executed the CBA.

-In the meantime, the Southern Philippines Federation of Labor (SPFL) together with
Nagkahiusang Mamumuo sa GAW (NAMGAW) undertook a Strike after it failed to get
the management of GAWTI to sit for a conference respecting its demands in an effort to
pressure GAWTI to make a turnabout of its standing recognition of ALU as the sole and
exclusive bargaining representative of its employees, as to which strike GAWTI filed a
petition for Restraining Order/Preliminary Injunction, and which strike
Labor ArbiterTumamak held as illegal.

-On May 19, 1986, GAW Lumad Labor Union (GALLU-PSSLU) Federation filed a
Certification Election petition but as found by Med-Arbiter Cumba, without having
complied with the subscription requirement for which it was merely considered an
intervenor until compliance thereof in the other petition for direct recognition as
bargaining agent filed on MAy 28, 1986 by southern Philippines Federation of Labor
(SPFL)

-In the meantime, CBA executed by ALU and GAWTI was duly filed with the MOLE, Cebu
city. Nevertheless, Med-Arbiter Cumba ruled for the holding of a certification election in
all branches of GAWTI in Cebu City, as to which ALU filed MFR, which was treated as an
appeal. So the entire record of subject certification case was forwarded for the Director,
Bureau of Labor Relations (BLR), MOLE, Manila.

-BLR Director Trajano, granted ALU’s appeal (MFR) and set aside the questioned Med-
Arbiter, on the ground that the CBA has been effective and valid and the contract bar rule
applicable; Philippine Social Security Labor Union (PSSLU) and Southern Philippines
Federation of Labor (SPFL) filed MFR, supplemented by the ‘Submission of
Additional Evidence.’ GAWTI and ALU opposed. Trajano’s decision was reversed by
herein public respondent Calleja. ALU filed MFR but was denied. Hence this petition.

-Calleja ordered the holding of a certification election ruling that the “contract bar rule”
relied upon by her predecessor Trajano does not apply in the present case. Calleja ruled
that CBA is defective because it “was not duly submitted in accordance with Sec. I, Rule
IX, Book V of the Implementing Rules of BP 130.” There’s no proof that CBA has been
posted in at least 2 conspicuous places in the establishment at least 5 days before its
ratification and that it has been ratified by the majority of the employees in the bargaining
unit.”

ISSUE

WON Calleja erred in reversing Trajano’s ruling and ordering the holding of a certification
election.

HELD

NO

The CBA in question is defective.

-The mechanics of collective bargaining are set in motion only when the following
jurisdictional preconditions are present: (1) possession of the status of majority
representation by the employees’ representative in accordance with any of the means of
selection and/or designation provided for by the Labor Code; (2) proof of majority
representation; and
(3) a demand to bargain under Art.256, par. (a) of the Labor Code4

-The standing of ALU as an exclusive bargaining representative is dubious. The

recognition by GAWTI appears to have been based on the self-serving claim of ALU that
it had the support of the majority of the employees in the bargaining unit.

-In cases where the then Minister of Labor directly certified the union as the bargaining
representative, SC voided such certification where there was a failure to properly
determine with legal certainty whether the union enjoyed a majority representation. In
such a case, the holding of a certification election at a proper time would not necessarily
be a mere formality as there was a compelling reason not to directly and
unilaterally certify a union

-CBA was defective also because of: [a] the failure of GAWTI to post the CBA in at least 2
conspicuous places in the establishment at least 5 days before its ratification, [b] the
finding of Calleja that 181 of the 281 4 Art. 256. Representation issue in organized
establishments. In organized establishments, when a verified petitionquestioning the
majority status of the incumbent bargainingagent is filed before the DOLE within the 60-
day period beforethe expiration of a CBA, the Med-Arbiter shall automaticallyorder an
election by secret ballot when the verified petition issupported by the written consent of
at least 25% of all the EEsin the appropriate bargaining unit. To have a valid election,
atleast a majority of all eligible voters in the unit must have casttheir votes. The labor
union receiving the majority of the validvotes cast shall be certified as the exclusive
bargaining agentof all the workers in the unit. When an election which providesfor three
or more choices results in no choice receiving a majority of the valid votes cast, a run-off
election shall be conducted between the labor unions receiving the two highestnumber of
votes: Provided,That the total number of votes for all contending unions is at least 50%
of the number of votes cast. workers who “ratified” the same now ” strongly and
vehemently deny and/or repudiate the alleged negotiations and ratification of the CBA.

-Finally, the inapplicability of the contract bar rule is further underscored by the fact that
when the disputed agreement was filed before the Labor Regional Office on May 27, 1986,
a petition for certification election had already been filed on May 19, 1986. Although the
petition was not supported by the signatures of 30% of the workers in the bargaining unit,
it was enough to initiate certification election.

Liberty Flour Mills Employees vs Liberty Flour

G.RN - 58768 December 29, 1989

Cruz, J:

Facts:

On February 6, 1974, respondent Philippine Labor Alliance Council (PLAC) and

Liberty Flour entered into a 3-year CBA effective January 1, 1974 providing for
a daily wage increase of PhP2.00 for 1974, PhP1.00 for 1975 and PhP1.00 for
1976. The parties also agreed to establish a union shop by imposing “membership
in good standing for the duration of CBA” as a condition for continued
employment of workers. PLAC complained against the company for non-payment
of E-COLA under P.D. 525. A similar complaint was filed on March 4, 1975, this
time by petitioners who apparently were veering away from PLAC. Evaristo and
Biascan, after organizing a union, filed for a certification election among rank-
and-file employees. PLAC then expelled the two for disloyalty and demanded their
dismissal by the respondent company, who complied on May 20, 1975. The claims
for E-COLA was dismissed as it was already absorbed by the wage increase. The
termination case in relation to back wages was also dismissed.

Issue:

Whether or not E_COLA was also absorbed in the wage increases and won dismissal
of Evaristo and Biascan was illegal.

Ruling:

The company agreed to grant the emergency allowance even before the obligation
was imposed by government (P.D. 525). What the petitioners claim they are being
made to waive is the additional allowance but the truth is they are not entitled to
because they are already enjoying the stipulated increases.

As with the case of illegal dismissal, the CBA concluded in 1974 was certifiable
and in fact certified in April 11, 1975 while the two were dismissed on may 20,
1975. Evidence show that after the cancellation of the registration certificate of
the Federation of Democratic Labor Unions, no other union contested the exclusive
representation of the PLAC, consequently there was no more legal impediment
that stood on the way of its validity and enforceability of the provisions of the
collective bargaining agreement entered into by and between respondent
corporation and respondent union. Once it was duly entered into and signed by
the parties, a collective bargaining agreement becomes effective as between the
parties regardless of won the same has been certified by the BLR.