2. WON there is discrimination.

Life Assurance Employees Asso. vs. Insular Life, G. R. No. L-

2529, January 30, 1971 HELD

FACTS The respondents contend that the sending of the letters,

exhibits A and B, constituted a legitimate exercise of their
Previous to the petitioners' submission of proposals for an amended
freedom of speech. No! The free speech protection under
renewal of their respective collective bargaining agreements to the
the Constitution is inapplicable where the expression of
respondents, the latter hired Felipe Enage and Ramon Garcia, former
opinion by the employer or his agent contains a promise of
legal counsels of the petitioners (UNIONS), as personnel manager and
benefit, or threats, or reprisal
assistant corporate secretary, respectively, with attractive
compensations. After the notice to strike was served on the 1. YES. The said letters were directed to the striking
Companies and negotiations were in progress in the Department of employees individually — by registered special delivery mail
Labor, the respondents reclassified 87 employees as supervisors at that — without being coursed through the Unions which
without increase in salary or in responsibility, in effect compelling these were representing the employees in the collective bargaining
employees to resign from their unions. And during the negotiations in .
the Department of Labor, despite the fact that the petitioners granted
Indeed, it is an unfair labor practice for an employer
the respondents' demand that the former drop their demand for union
operating under a collective bargaining agreement to
shop and in spite of urgings by the conciliators of the Department of
negotiate or to attempt to negotiate
Labor, the respondents adamantly refused to answer the Unions'
demands en toto. Incidentally, Enage was the chairman of the
negotiating panel for the Companies in the collective bargaining
between the former and the Unions. After the petitioners went to strike,
the strikers were individually sent copies of exhibit A, enticing them to
abandon their strike by inducing them to return to work upon promise
of special privileges. Two days later, the respondents, thru their
president and manager, respondent Jose M. Olbes, brought three
truckloads of non-strikers and others, escorted by armed men, who,
despite the presence of eight entrances to the three buildings occupied
by the Companies, entered thru only one gate less than two meters
wide and in the process, crashed thru the picket line posted in front of
the premises of the Insular Life Building. This resulted in injuries on the
part of the picketers and the strike-breakers.lâwphî1.ñèt Then the
respondents brought against the picketers criminal charges, only three
of which were not dismissed, and these three only for slight
misdemeanors. As a result of these criminal actions, the respondents
were able to obtain an injunction from the court of first instance
restraining the strikers from stopping, impeding, obstructing, etc. the
free and peaceful use of the Companies' gates, entrance and driveway
and the free movement of persons and vehicles to and from, out and in
, of the Companies' buildings. On the same day that the injunction was
issued, the letter, Exhibit B, was sent — again individually and by
registered special delivery mail — to the strikers, threatening them with
dismissal if they did not report for work on or before June 2, 1958. But
when most of the petitioners reported for work, the respondents thru a
screening committee — of which Ramon Garcia was a member —
refused to admit 63 members of the Unions on the ground of "pending
criminal charges." However, when almost all were cleared of criminal
charges by the fiscal's office, the respondents adamantly refused
admission to 34 officials and union members. It is not, however,
disputed that all-non-strikers with pending criminal charges which
arose from the breakthrough incident of May 23, 1958 were readmitted
immediately by the respondents. Among the non-strikers with pending
criminal charges who were readmitted were Generoso Abella, Enrique
Guidote, Emilio Carreon, Antonio Castillo, Federico Barretto, Manuel
Chuidian and Nestor Cipriano. And despite the fact that the fiscal's
office found no probable cause against the petitioning strikers, the
Companies adamantly refused admission to them on the pretext that
they committed "acts inimical to the interest of the respondents,"
without stating specifically the inimical acts allegedly committed. They
were soon to admit, however, that these alleged inimical acts were the
same criminal charges which were dismissed by the fiscal and by the
courts..

ISSUE

1. WON there is interference.

 with his employees individually in connection with changes in 1. No. Article 248(a) of the Labor Code, considers it an unfair labor
the agreement. And the basis of the prohibition regarding practice when an employer interferes, restrains or coerces employees
individual bargaining with the strikers is that although the in the exercise of their right to self-organization or the right to form
association. The right to self-organization necessarily includes the right
union is on strike, the employer is still under obligation to
to collective bargaining.
bargain with the union as the employees' bargaining
representative Parenthetically, if an employer interferes in the selection of its
negotiators or coerces the Union to exclude from its panel of
It is likewise an act of interference for the employer to send a negotiators a representative of the Union, and if it can be
letter to all employees notifying them to return to work at a inferred that the employer adopted the said act to yield adverse effects
on the free exercise to right to self-organization or on the
time specified therein, otherwise new employees would be right to
engaged to perform their jobs. Individual solicitation of the
employees or visiting their homes, with the employer or his
representative urging the employees to cease union activity
or cease striking, constitutes unfair labor practice. All the
above-detailed activities are unfair labor practices because
they tend to undermine the concerted activity of the
employees, an activity to which they are entitled free from
the employer's molestation.

The test of whether an employer has interfered

with and coerced employees 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 employees' rights under section 3 of
the Act, and 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 if there is a reasonable inference
that anti-union conduct of the employer does have
an adverse effect on self-organization and
collective bargaining

2. YES. Discrimination undoubtedly exists where the record shows that

the union activity of the rehired strikers has been less prominent than
that of the strikers who were denied reinstatement. Needless to say,
the mere act of placing in the hands of employees hostile to the
strikers the power of reinstatement, is a form of discrimination in
rehiring. Exhibit H imposed three conditions for readmission of the
strikers, namely: (1) the employee must be interested in continuing his
work with the group companies; (2) there must be no criminal charges
against him; and (3) he must report for work on June 2, 1958,
otherwise he would be replaced

Standard Chartered Bank Employees Union vs. Confesor, G.

R. No. 114974, June 16, 2004
FACTS
The petitioner asserts that the private respondent committed
ULP, i.e., interference in the selection of the Unions negotiating panel,
when Cielito Diokno, the Banks Human Resource Manager, 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 negotiating
panel, and that during the first meeting, Diokno stated that the
negotiation be kept a family affair.

ISSUE

1. whether or not the Union was able to substantiate its claim

of unfair labor practice against the Bank arising from the latters alleged
interference with its choice of negotiator;
2. whether or not the Union was able to substantiate its claim of unfair
labor practice against the Bank arising from the latters surface
bargaining
HELD.
collective bargaining of the employees, ULP under Article 248(a) in
connection with Article 243 of the Labor Code is committed.
In order to show that the employer committed ULP under the
Labor Code, substantial evidence is required to support the claim.
 Substantial evidence has been defined as such relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion.[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 by Diokno 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 with
Divinagracias suggestion that the bank lawyers be excluded from its
negotiating panel.
Petitioner CAPASCO, hired private respondent Tamondong as
Assistant to the Personnel Manager, he was promoted to the position
of Personnel/Administrative Officer, and later to that of Personnel
Superintendent. Private respondent Tamondong actively involved
himself in the formation of the union and was even elected as one of its
officers after its creation. Consequently, petitioner CAPASCO sent a
memo 8 dated 3 February 1997, to private respondent Tamondong
requiring him to explain and to discontinue from his union activities,
with a warning that a continuance thereof shall adversely affect his
employment in the company. Private respondent Tamondong ignored
said warning and made a reply letter 9 on 5 February 1997, invoking
his right as a supervisory employee to join and organize a labor union.
In view of that, on 6

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 was
made 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 the arguments 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 public respondent noted, passions may rise, and as a result,
suggestions given under less adversarial situations may be colored
with unintended meanings.[49] Such is what appears to have happened
in this case.

If at all, the suggestion made by Diokno to Divinagracia should

be construed as part of the normal relations and innocent
communications, which are all part of the friendly relations between
the Union and Bank.

2. 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 through the 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 made 6 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 for discussion, 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]The
resolution of surface bargaining allegations never presents an easy
issue. The determination of whether a party has engaged in unlawful
surface bargaining 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 challenged
partys conduct both at and away from the bargaining table.[51] It
involves the question of whether an employers conduct demonstrates
an unwillingness to bargain in good faith or is merely hard bargaining

The Union has not been able to show that the Bank had done
acts, both at and away from the bargaining 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 agree and 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] Hence,
the parties failure to agree did not amount to ULP under Article 248(g)
for violation of the duty to bargain.

Cathay Pacific Steel vs. CA, G. R. No. 164561, August

30, 2006
February 1997, petitioner CAPASCO through a memo 10terminated the
employment of private respondent Tamondong on the ground of loss of
trust and confidence, citing his union activities as acts constituting
serious disloyalty to the company.
Private respondent Tamondong challenged his dismissal for
being illegal and as an act involving unfair labor practice by filing a
Complaint for Illegal Dismissal and Unfair Labor Practice before the
NLRC
In the Memorandum 15 filed by petitioners, they aver that private
respondent Tamondong as Personnel Superintendent of CAPASCO
was performing functions of a managerial employee because he was
the one laying down major management policies on personnel
relations such as: issuing memos on company rules and regulations,
imposing disciplinary sanctions such as warnings and suspensions,
and executing the same with full power and discretion.
ISSUE
WON dismissal is proper
HELD
NO. Accordingly, Article 212(m) of the Labor Code, as amended,
differentiates supervisory employees from managerial employees, to
wit: supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions, if the
exercise of such authority is not merely routinary or clerical in nature
but requires the use of independent judgment; whereas, managerial
employees are those who are vested with powers or prerogatives to
lay down and execute management policies and/or hire, transfer,
suspend, lay off, recall, discharge, assign or discipline employees.
Thus, from the foregoing provision of the Labor Code, it can be clearly
inferred that private respondent Tamondong was just a supervisory
employee. Private respondent Tamondong did not perform any of the
functions of a managerial employee as stated in the definition given to
it by the Code. Hence, the Labor Code 33 provisions regarding
disqualification of a managerial employee from joining, assisting or
forming any labor organization does not apply to herein private
respondent Tamondong. Being a supervisory employee of CAPASCO,
he cannot be prohibited from joining or participating in the union
activities of private respondent CUSE
Catholic School vs. Cainta Catholic School Employees
Union, G.R. No. 15102, May 2, 2006
Balbago)was appointed School Director in April 1987. From this time,
the Union became inactive.
It was only in 10 September 1993 that the Union held an election of
officers, with Llagas being elected as President; Javier, Villegas,
Treasurer; and Santos, Secretary. Llagas was then the Dean of the
Student Affairs while Villegas and Santos were Year-Level Chairmen.
On 15 October 1993, the School retired Llagas and Javier, who had
rendered more than twenty (20) years of continuous service, pursuant
to Section 2, Article X of the CBA, to wit:
An employee may be retired, either upon application by the employee
himself or by the decision of the Director of the School, upon reaching
the age of sixty (60) or after having rendered at least twenty (20) years
of service to the School the last three (3) years of which must be
continuous.7
Three (3) days later, the Union filed a notice of strike with the National
Conciliation and Mediation Board (NCMB) .
On 8 November 1993, the Union struck and picketed the School’s
entrances.
The NLRC ruled that the retirement of Llagas and Javier is legal as the
School was merely exercising an option given to it under the CBA.10
 The NLRC dismissed the unfair labor practice charge against the
School for insufficiency of evidence.
In reversing the decision of the NLRC, the Court of Appeals construed
the retirement of Llagas and Javier as an act amounting to unfair labor
practice when viewed against the backdrop of the relevant
circumstances obtaining in the case. Hence, this petition.
The main issue for resolution hinges on the validity of a
stipulation in a Collective Bargaining Agreement (CBA) that allows
management to retire an employee in its employ for a predetermined
lengthy period but who has not yet reached the minimum compulsory
retirement age provided in the Labor Code.
ISSUE
whether the School’s decision to retire Llagas and Javier
constitutes unfair labor practice;
HELD. No.
Article 287 of the Labor Code, a CBA may validly accord management
the prerogative to optionally retire an employee under the terms and
conditions mutually agreed upon by management and the bargaining
union, even if such agreement allows for retirement at an age lower
than the optional retirement age or the compulsory retirement age.
The law and this Court frowns upon unfair labor practices by
management, including so-called union-busting. Such illegal practices
will not be sustained by the Court, even if guised under ostensibly legal
premises. But with respect to an active unionized employee who
claims having lost his/her job for union activities, there are different
considerations presented if the termination is justified under just or
authorized cause under the Labor Code; and if separation from service
is effected through the exercise of a duly accorded management
prerogative to retire an employee. There is perhaps a greater
imperative to recognize the management prerogative on retirement
than the prerogative to dismiss employees for just or authorized
causes. Evidently, it more clearly emerges in the case of retirement
that management would anyway have the right to retire an employee,
no matter the degree of involvement of said employee in union
activities.
Having established that Llagas is a managerial employee, she is
proscribed from joining a labor union,38 more so being elected as union
officer. In the case of Javier, a supervisory employee, she may join a
labor union composed only of supervisory employees.39 Finding both
union officers to be employees not belonging to the rank-and-file, their
membership in the Union has become questionable, rendering the
Union inutile to represent their cause.
Purefoods vs. Nagkakaisang Samahang Manggagawa ng
Purefoods, G.R. No. 150896, August 28, 2008
FACTS
Three labor organizations and a federation are respondents
in this case NAGSAMA-Purefoods, the exclusive bargaining agent of
the rank-and-file workers of Purefoods, STFWU, (Sto. Tomas,
Batangas); and PGFWU (Sta. Rosa, Laguna). These organizations
were affiliates of the respondent federation, Purefoods Unified Labor
Organization (PULO). The three labor organizations manifested their
desire to re-negotiate the collective bargaining agreement, submitting
their respective demands and proposals and authorizing a negotiating
panel which included among others a PULO representative. While
Purefoods formally acknowledged receipt of the union’s proposals, but
refused to negotiate with the unions should a PULO representative be
in the panel which resulted in a deadlock. However, the petitioner
company concluded a new CBA with another union in its farm in
Malvar, Batangas and terminated the service of regular rank-and file
workers in Sto Tomas. The farm manager, supervisors and electrical
workers of the Sto. Tomas farm, who were members of another union,
were nevertheless retained by the company in its employ. The 4
respondent labor organizations jointly instated a complaint for Unfair
Labor Practice, illegal lockout/dismissal and damages.
 
In the proceedings before the Labor Arbiter (LA), Purefoods
interposed, among others, the defenses that PULO was not a
legitimate labor organization or federation for it did not have the
required minimum number of member unions; that the closure of the
Sto. Tomas farm was not arbitrary but was the result of the financial
non-viability of the operations therein, or the consequence of the
landowners pre-termination of the lease agreement; that the other
complainants had no cause of action considering that it was only the
Sto. Tomas farm which was closed; that the termination of the
employees complied with the 30-day notice requirement and that the
said employees were paid 30-day advance salary in addition to
separation pay; and that the concerned union, STFWU, lost its status
as bargaining representative when the Sto. Tomas farm was closed.[6]
 restraint on the exercise of the employees right to self-
NLRC ruled that the petitioner companys refusal to
organization and free collective bargaining. The NLRC said
recognize the labor organizations affiliation with PULO was
that the real motive of the company in the sudden closure of
unjustified considering that the latter had been granted the
the Sto. Tomas farm and the mass dismissal of the STFWU
status of a federation by the Bureau of Labor Relations; and
members was union busting, as only the union members
that this refusal constituted undue interference in, and
were locked out, and the company subsequently resumed
operations of the closed farm under a new contract with the
landowner. Because the requisites of a valid lockout were
absent, the NLRC concluded that the company committed
ULP.
Issue: WON the refusal of Purefoods to recognized PULO as a labor
organizations’ affiliation constituted undue interference in, and restraint
on the exercise of the employees’ right to self-organization and free
collective bargaining

HELD
It is crystal clear that the closure of the Sto. Tomas farm was
made in bad faith. Badges of bad faith are evident from the
following acts of the petitioner: it unjustifiably refused to
recognize the STFWUs and the other unions affiliation with
PULO; it concluded a new CBA with another union in
another farm during the agreed indefinite suspension of the
collective bargaining negotiations; it surreptitiously
transferred and continued its business in a less hostile
environment; and it suddenly terminated the STFWU
members, but retained and brought the non-members to the
Malvar farm. Petitioner presented no evidence to support the
contention that it was incurring losses or that the subject
farms lease agreement was pre-terminated. Ineluctably, the
closure of the Sto. Tomas farm circumvented the labor
organizations right to collective bargaining and violated the
members right to security of tenure.[19]
Shell Oil Workers Union vs. Shell Oil Company, G.R. No. L-
28607, May 31, 1971

FACTS: Respondent Shell Company of the Philippines (COMPANY)

dissolved its security guard section stationed at its Pandacan
Installation, notwithstanding its (guard section) continuance and that
such is assured by an existing collective bargaining contract. The
respondent company transferred 18 security guards to its other
department and consequently hired a private security agency to
undertake the work of said security guards. This resulted in a strike
called by petitioner Shell Oil Workers’ Union (UNION), The President
certified it to respondent Court of Industrial Relations (CIR). CIR
declared the strike illegal on the ground that such dissolution was a
valid exercise of a management prerogative. Thus this appeal is taken.

Petitioner argued that the 18 security guards affected are part of the
bargaining unit and covered by the existing collective bargaining
contract, as such, their transfers and eventual dismissals are illegal
being done in violation of the existing contract. The Company
maintained that in contracting out the security service and redeploying
the 18 security guards affected, it was merely performing its legitimate
prerogative to adopt the most efficient and economical method of
operation, that said action was motivated by business consideration in
line with past established practice and made after notice to and
discussion with the Union, that the 18 guards concerned were
dismissed for wilfully refusing to obey the transfer order, and that the
strike staged by the Union is illegal.

ISSUE: Whether the existing collective bargaining contract on

maintaining security guard section, among others, constitute a bar to
the decision of the management to contract out security guards.

HELD
YES. The strike was legal because there was a violation of the
collective bargaining agreement by Company. It was part of the CBA
that the Security Guard Section will remain. Yet, the Company did not
comply with the stipulation in CBA. It was thus an assurance of
security of tenure, at least, during the lifetime of the agreement. For
what is involved is the integrity of the agreement reached, the terms of
which should be binding on both parties

The stand of Shell Company as to the scope of management
prerogative is not devoid of plausibility, management prerogative of the
Company would have been valid if it
were not bound by what was stipulated in CBA. The freedom to
manage the business remains with management. It cannot be denied
the faculty of promoting efficiency and attaining economy by a study of
what units are essential for its operation. To it belongs the ultimate
determination of whether services should be performed by its
personnel or contracted to outside agencies. However, while
management has the final say on such matter, the labor union is not to
be completely left out.
An unfair labor practice is committed by a labor union or its agent by its
refusal ‘to bargain collectively with the employer’. Collective bargaining
does not end with the execution of an agreement, being a continuous
process, the duty to bargain necessarily imposing on the parties the
obligation to live up to the terms of such a collective bargaining
agreement if entered into, it is undeniable that non-compliance
therewith constitutes an unfair labor practice.
BPI Employees Union-Davao City-FUBU vs. BPI, G.R. No.
174912, July 24, 2013
BOMC, primarily engaged in providing and/or handling support
services for banks and other financial institutions, is a subsidiary of the
Bank of Philippine Islands (BPI) operating and functioning as an
entirely separate and distinct entity.
A service agreement between BPI and BOMC was initially
implemented in BPI’s Metro Manila branches.  In this agreement,
BOMC undertook to provide services such as check clearing, delivery
of bank statements, fund transfers, card production, operations
accounting and control, and cash servicing,  Not a single BPI
employee was displaced and those performing the functions, which
were transferred to BOMC, were given other assignments.
The Manila chapter of BPI Employees Union (BPIEU-Metro Manila-
FUBU) then filed a complaint for unfair labor practice (ULP). (LA)
decided the case in favor of the union. The decision was, however,
reversed on appeal by the NLRC. BPIEU-Metro Manila-FUBU filed a
petition forcertiorari before the CA which denied it, holding that BPI
transferred the employees in the affected departments in the pursuit of
its legitimate business. The employees were neither demoted nor were
their salaries, benefits and other privileges diminished.6
the service agreement was likewise implemented in Davao City. Later,
a merger between BPI and Far East Bank and Trust Company (FEBTC
) took effect on April 10, 2000 with BPI as the surviving corporation.
Thereafter, BPIs cashiering function and FEBTCs cashiering,
distribution and bookkeeping functions were handled by BOMC.
Consequently, twelve (12) former FEBTC employees were transferred
to BOMC to complete the latters service complement.
BPI Davaos rank and file collective bargaining agent, BPI Employees
Union-Davao City-FUBU (Union), objected to the transfer of the
functions and the twelve (12) personnel to BOMC contending that the
functions rightfully belonged to the BPI employees and that the Union
was deprived of membership of former FEBTC personnel who, by
virtue of the merger, would have formed part of the bargaining unit
represented by the Union pursuant to its union shop provision in the
CBA.
Union filed a notice of strike before the National Conciliation and
Mediation Board (NCMB) on the following grounds:
a) Contracting out services/functions performed by union members that interfere
restrained and/or coerced the employees in the exercise of their right to self-
organization;
The Union is of the position that the outsourcing of jobs included in the existin
bargaining unit to BOMC is a breach of the union-shop agreement in the CBA
transferring the former employees of FEBTC to BOMC instead of absorbing th
BPI as the surviving corporation in the merger, the number of positions covere
the bargaining unit was decreased, resulting in the reduction of the Union’s
membership.  For the Union, BPI’s act of arbitrarily outsourcing functions form
performed by the Union members and, in fact, transferring a number of its me
beyond the ambit of the Union, is a violation of the CBA and interfered with th
employees’ right to self organization. The Union insists that the CBA covers th
agreement with respect, not only to wages and hours of work, but to all other
and conditions of work. The union shop clause, being part of these conditions
states that the regular employees belonging to the bargaining unit, including t
absorbed by way of the corporate merger, were required to join the bargaining
“as a condition for employment.” Simply put, the transfer of former FEBTC
 employees to BOMC removed them from the coverage of unionized establishment. HELD:yes
While the Union admitted that BPI has the prerogative to determine what should be
done to meet the exigencies of business in accordance with the case of SimeThe Darby Union, however, insists that jobs being outsourced to BOMC were
included
Pilipinas, Inc. v. NLRC,19 it insisted that the exercise of management prerogative is in the existing bargaining unit, thus, resulting in a reduction of
not absolute, thus, requiring good faith and adherence to the law and the CBA. a number of positions in such unit. The reduction interfered with the
Citing the case of Shell Oil Workers’ Union v. Shell Company of the Philippines, employees’
Ltd., right to self-organization because the power of a union
20 the Union claims that it is unfair labor practice for an employer to outsourceprimarily
the depends on its strength in number.28
positions in the existing bargaining unit.
It is incomprehensible how the “reduction of positions in the collective
ISSUE: Whether or not the act of BPI to outsource the cashiering, bargaining unit” interferes with the employees’ right to self-organization
distribution and bookkeeping functions to BOMC is in conformity with because the employees themselves were neither transferred nor
the law and the existing CBA. dismissed from the service. As the NLRC clearly
stated:cralavvonlinelawlibrary

In the case at hand, the union has not presented even an iota of
evidence that petitioner bank has started to terminate certain
employees, members of the union. In fact, what appears is that the
Bank has exerted utmost diligence, care and effort to see to it that no
union member has been terminated. In the process of the
consolidation or merger of the two banks which resulted in increased
diversification of functions, some of these non-banking functions were
merely transferred to the BOMC without affecting the union
membership.29

BPI stresses that not a single employee or union member was or

would be dislocated or terminated from their employment as a result of
the Service Agreement.30  Neither had it resulted in any diminution of
salaries and benefits nor led to any reduction of union membership.31

As far as the twelve (12) former FEBTC employees are concerned, the
Union failed to substantially prove that their transfer, made to complete
BOMC’s service complement, was motivated by ill will, anti-unionism or
bad faith so as to affect or interfere with the employees’ right to self-
organization.
It is to be emphasized that contracting out of services is not illegal per
se. It is an exercise of business judgment or management prerogative.
Absent proof that the management acted in a malicious or arbitrary
manner, the Court will not interfere with the exercise of judgment by an
employer.32  In this case, bad faith cannot be attributed to BPI because
its actions were authorized by CBP Circular No. 1388, Series of 199333
 issued by the Monetary Board of the then Central Bank of the
Philippines (now Bangko Sentral ng Pilipinas). The circular covered
amendments in Book I of the Manual of Regulations for Banks and
Other Financial Intermediaries, particularly on the matter of bank
service contracts.  A finding of ULP necessarily requires the alleging
party to prove it with substantial evidence. Unfortunately, the Union
failed to discharge this burden.
Philippine American Cigar and Cigarette Factory Workers vs.
Philippine American Cigar, G.R. No.L-18364, February 28,
1963

FACTS: October 23, 1958, Apolonio San Jose’s brother, Francisco

San Jose, who is also a regular worker of the respondent and a
member of the complainant union, filed a charge for ULP against
herein respondent, which case is still pending.

Subsequent to the filing of the said charge, the respondent by its

manager Chue Yiong, summoned and advised union president Lazaro
Peralta that if Francisco San Jose will not withdraw his charge against
the company, the company will also dismiss his brother Apolonio San
Jose, to which the union president replied that should not be the
attitude of the company because Apolonio has nothing to do with his
brother’s case.

On January 24, 1959, respondent did dismiss Apolonio San Jose

without just and valid cause and in gross violation of the operative CBA
between the complainant union and respondent corporation.

ISSUE: Whether the dismissal of a relative of an employee who filed

an action against the employer is an ULP.
RULING: YES. Section 4(a) (5) of Republic Act No. 875, provides that
: case or given a testimony against the employer, it should be construed
“(a) It shall be ULP for an employer:
… (5) To dismiss, discharge, or otherwise prejudice or
discriminate against an employee for having filed charges or for having
given or being about to give testimony under this Act.”
Although the cited law pertains to the specific employee who filed a
in line with the spirit and purpose of said Section 4 and of the
legislation of which it forms part — namely, to assure absolute freedom
of the employees and laborers to establish labor organizations and
unions, as well as to prefer charges before the proper organs of the
Government for violations of our labor laws.
If the dismissal of an employee due to the filing by him of said charges
would be and is an undue restraint upon said freedom, the dismissal of
his brother owing to the non-withdrawal of the charges of the former,
would be and constitute as much a restraint upon the same freedom.
In fact, it may be greater and more effective restraint thereto. Indeed, a
complainant may be willing to risk the hazards of a possible and even
probable retaliatory action by the employer in the form of a dismissal or
another discriminatory act against him personally, considering that
nobody is perfect, that everybody commits mistakes and that there is
always a possibility that the employer may find in the records of any
employee, particularly if he has long been in the service, some act or
omission constituting a fault or negligence which may be an excuse for
such dismissal or discrimination. Yet, such complainant may not
withstand the pressure that would result if his brother or another
member of his immediate family were threatened with such action
unless the charges in question were withdrawn.
What is prohibited to be done directly shall not be allowed to be
accomplished indirectly. Thus in the Matter of Quidnick Dye Works Inc.
and Federation of Dyers, Finishers, Printers and Bleachers of America
(2 NLRB 963) it was held that the dismissal of a laborer on account of
union activities of his brother constituted an ULP.
The discharge of relatives of an employee who has himself been
discriminately discharged, for no other reason than the relation, is itself
a discriminatory discharge, in violation of the Act. An illustration is
Memphis Furniture Co. (3 NLRB 26 [1937]), “where the evidence
indicated that the sole reason for the dismissal of a female employee
was that she was the wife of an employee who has been discharged. It
was held that the discharge under the circumstances was
discriminatory and a violation of the Act, even though discharged
female employee was not herself a member of any union. The
respondent thus made union membership and activities a bar to the
employment not only of the union member himself but of members of
his family as well. A more effective mode of discouraging of union
affiliation could hardly be found then the knowledge that such activities
put not merely the union member’s employment but that of those
closely related to him in jeopardy.“
In addition to violating Section 4(a) (5) of Republic Act No. 875, the
discharge of Apolonio San Jose is, therefore, an ULP.
Rizal Cement Workers vs. Madrigal, G.R.
No. L-19767, April 30, 1964
the Union staged a strike at the plant of the respondent Rizal Cement
Co., Inc. in Binangonan, Rizal. In the early morning of the following day
, that is, on May 28, 1956, Candido de Leon warehouseman-
encargado at the Bodega Tanque, received a telephone call from one
Johnny de Leon, manager of the respondent Rizal Cement Co., Inc.,
with the information that the Union staged a strike against the company
on the previous day, May 27, 1956, in Binangonan, Rizal De Leon
further informed him that he should take precautionary measures in
protecting the properties of the company stored at the Bodega Tanque
because of the strikers caused damage to the factory in Binangonan
 and sabotage might occur. For this reason, he was advised by the
manager to request the members of the Union to stay meanwhile
outside the premises of the Bodega Tanque. What he did in the
morning of May 28, 1956 was to station himself at the gate of the
compound. When the workers arrived for work at 7:00 a.m., he did not
allow the 21 complaining workers who are members of the Union to
enter the gate and allowed only those who are not members of said
Union.
Upon refusal of Candido de Leon to allow the complaining workers to
work on that day, the Union, sent a letter to the manager of the Bodega
alleging discrimination. The manager sent a reply denying such
allegation.
Issue: WON there was discrimination against the employees who are
not allowed to work in the Bodega.
HELD NO.
It is not herein controverted that the complainants were locked out or
denied work by the respondent Company. Under Republic Act 875,
however, for the discrimination by reason of union membership to be
considered an unfair labor practice, the same must have been
committed to courage or discourage such membership in the union.
This
cannot be said of the act of the Company complained of. As clearly
established by the evidence, its refusal to all complainants to work and
requirement that the latter stay out of the premises in the meantime (
perhaps while the strike was still going on at the factory) was borne out
of the Company's justified apprehension and fear that sabotage might
be committed in the warehouse where the products machinery and
spare parts were stored, as has been the case in Binangonan. It has
never been shown that the act of the Company was intended to induce
the complain ants to renounce their union-membership or as a
deterrent for non-members to affiliate therewith, nor as a retaliatory
measure for activities in the union or in furtherance of the cause of the
union.
PICOP vs. Taneca, G.R. No. 160828, August 9, 2010
respondents, regular rank-and-file employees of PRI and bona fide
 members of Nagkahiusang Mamumuo sa PRI Southern Philippines
Federation of Labor (NAMAPRI-SPFL), which is the collective
bargaining agent for the rank-and-file employees of petitioner PRI, filed
a Complaint for unfair labor practice, illegal dismissal and money
claims against petitioner PICOP Resources, Incorporated (PRI)
Fuentes (Atty. Fuentes) sent a letter to the management of PRI
demanding the termination of employees who allegedly campaigned
for, supported and signed the Petition for Certification Election of the
Federation of Free Workers Union (FFW) during the effectivity of the
CBA. NAMAPRI-SPFL considered said act of campaigning for and
signing the petition for certification election of FFW as an act of
disloyalty and a valid basis for termination for a cause in accordance
with its Constitution and By-Laws, and the terms and conditions of the
CBA
Atty. Romero A. Boniel issued a memorandum addressed to the
concerned employees to explain in writing within 72 hours why their
employment should not be terminated due to acts of disloyalty as
alleged by their Union. Atty. Fuentes advised the management of PRI
that the Union found the member's explanations to be unsatisfactory.
He reiterated the demand for termination, but only of 46 member-
employees, including respondents.
Respondents maintained that their acts of signing the authorization
signifying support to the filing of a Petition for Certification Election of
FFW was merely prompted by their desire to have a certification
election among the rank-and-file employees of PRI with hopes of a
CBA negotiation in due time; and not to cause the downfall of
NAMAPRI-SPFL.
ISSUE:
whether an existing CBA can be given its full force and effect in all its
terms and condition including its union security clause, even beyond
the 5-year period when no new CBA has yet been entered into.
HELD
Citing Article 253 of the Labor Code,14 PRI contends that as parties to
the CBA, they are enjoined to keep thestatus quo and continue in full
force and effect the terms and conditions of the existing CBA during
the 60-day period and/or until a new agreement is reached by the
parties.
Petitioner's argument is untenable.
"Union security" is a generic term, which is applied to and
comprehends "closed shop," "union shop," "maintenance of
membership," or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as a
condition affecting employment.
There is union shop when all new regular employees are required to
join the union within a certain period as a condition for their continued
employment.
There is maintenance of membership shop when employees, who
are union members as of the effective date of the agreement, or who
thereafter become members, must maintain union membership as a
condition for continued employment until they are promoted or
transferred out of the bargaining unit, or the agreement is terminated.
A closed shop, on the other hand, may be defined as an enterprise in
which, by agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed
departments of the enterprise unless he or she is, becomes, and, for
the duration of the agreement, remains a member in good standing of
a union entirely comprised of or of which the employees in interest are
a part.15
in terminating the employment of an employee by enforcing the
union security clause, the employer needs to determine and
prove that:
(1) the union security clause is applicable;
(2) the union is requesting for the enforcement of the union security
provision in the CBA; and
(3) there is sufficient evidence to support the decision of the union to
expel the employee from the union.
• CBA between PRI and respondents included a union
security clause, specifically, a maintenance of membership
• PRI, upon written request from the Union, can indeed
terminate the employment of the employee who failed to
maintain its good standing as a union member. NAMAPRI-
SPFL, in two (2) occasions demanded from PRI, to terminate
the employment of respondents due to their acts of disloyalty
to the Union.
• However, as to the third requisite, we find that there is no
sufficient evidence to support the decision of PRI to
terminate the employment of the respondents.
1. PRI alleged that respondents were terminated from employment
based on the alleged acts of disloyalty they committed when they
signed an authorization for the Federation of Free Workers (FFW) to
file a Petition for Certification Election among all rank-and-file
employees of PRI. It contends that the acts of respondents are a
violation of the Union Security Clause, as provided in their Collective
Bargaining Agreement. We are unconvinced.
Mere signing of the authorization in support of the Petition for
Certification Election of FFW on March 19, 20 and 21, or before the "
freedom period," is not sufficient ground to terminate the employment
of respondents inasmuch as the petition itself was actually filed during
the freedom period. Nothing in the records would show that
respondents failed to maintain their membership in good standing in
the Union. Respondents did not resign or withdraw their membership
from the Union to which they belong. Respondents continued to pay
their union dues and never joined the FFW.
"authorization letter to file a petition for certification election" is different
from an actual "Petition for Certification Election." Likewise, as per
records, it was clear that the actual Petition for Certification Election of
FFW was filed only on May 18, 2000.17 Thus, it was within the ambit of
the freedom period
2. PRI anchored their decision to terminate respondents’ employment
on Article 253 of the Labor Code which states that "it shall be the
duty of both parties to keep the status quo and to continue in full
force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new agreement
is reached by the parties." It claimed that they are still bound by the
Union Security Clause of the CBA even after the expiration of the CBA;
hence, the need to terminate the employment of respondents.
Petitioner's reliance on Article 253 is misplaced.
At the expiration of the freedom period, the employer shall
continue to recognize the majority status of the incumbent
bargaining agent where no petition for certification election is
filed.19
Applying the same provision, it can be said that while it is incumbent
for the employer to continue to recognize the majority status of the
incumbent bargaining agent even after the expiration of the freedom
period, they could only do so when no petition for certification election
was filed. The reason is, with a pending petition for certification, any
such agreement entered into by management with a labor organization
is fraught with the risk that such a labor union may not be chosen
thereafter as the collective bargaining representative.20 The provision
for statusquo is conditioned on the fact that
no certification election was filed during the freedom period. Any other
view would render nugatory the clear statutory policy to favor
certification election as the means of ascertaining the true expression
of the will of the workers as to which labor organization would
represent them.21
Moreover, the last sentence of Article 253 which provides for automatic
renewal pertains only to the economic provisions of the CBA, and does
not include representational aspect of the CBA. An existing CBA
cannot constitute a bar to a filing of a petition for certification election.
When there is a representational issue, the statusquo provision in so
far as the need to await the creation of a new agreement will not apply.
Otherwise, it will create an absurd situation where the union members
will be forced to maintain membership by virtue of the union security
clause existing under the CBA and, thereafter, support another union
when filing a petition for certification election. If we apply it, there will
always be an issue of disloyalty whenever the employees exercise
their right to self-organization. The holding of a certification election is
a statutory policy that should not be circumvented,23 or compromised.
NUWHRAIN vs. NLRC, G.R. No. 179402, September 30, 2008
After the lapse of the 60-day freedom period, but pending the
disposition of the Petition for Certification Election filed by NUWHRAIN,
HIMPHLU served the Hotel with a written demand dated 28 July 2005[
10] for the dismissal of 36 employees following their expulsion from
HIMPHLU for alleged acts of disloyalty and violation of its Constitution
and by-laws. An Investigation Report[11] was attached to the said
written demand, stating that the 36 employees, who were members of
HIMPHLU, joined NUWHRAIN, in violation of Section 2, Article IV of
the Collective Bargaining Agreement, which provided for a union
security clause that reads: [12]
Section 2. DISMISSAL PURSUANT TO UNION SECURITY
CLAUSE. Accordingly, failure to join the UNION within the
period specified in the immediately preceding section or
failure to maintain membership with the UNION in good
standing either through resignation or expulsion from the
UNION in accordance with the UNIONs Constitution and by-
laws due to disloyalty, joining another union or non-
payment of UNION dues shall be a ground for the UNION
to demand the dismissal from the HOTEL of the employee
concerned. The demand shall be accompanied by
the UNIONs investigation report and the HOTEL shall act
accordingly subject to existing laws and jurisprudence
on the matter, provided, however, that the UNION shall
hold the HOTEL free and harmless from any and all
liabilities that may arise should the dismissed employee
question in any manner the dismissal. The HOTEL shall
not, however, be compelled to act on any such UNION
demand if made within a period of sixty (60) days prior
to the expiry date of this agreement.
Hotel issued Disciplinary Action Notices[13] (Notices)
directing the 36 employees to submit a written explanation for their
alleged acts of disloyalty and violation of the union security clause for
which HIMPHLU sought their dismissal. Hotel called the contending
unions and the employees concerned for a reconciliatory conference in
an attempt to avoid the dismissal of the 36 employees. NUWHRAIN
proceeded to file a Notice of Strike before the National Conciliation and
Mediation Board (NCMB) on 8 September 2005 on the ground of unfair
labor practice NUWHRAIN asserted that the Hotel committed unfair
labor practice when it issued the Notices to the 36 employees who
switched allegiance from HIMPHLU to NUWHRAIN
ISSUE
WON the HOTEL committed unfair labor practice when it
issued the Notices to the 36 employees, former members of
HIMPHLU, who switched allegiance to NUWHRAIN
Union security is a generic term which is applied to and
comprehends closed shop, union shop, maintenance of membership or
any other form of agreement which imposes upon employees the
obligation to acquire or retain union membership as a condition
affecting employment.[25] Article 248(e) of the Labor Code recognizes
the effectivity of a union shop clause:
Art. 248. Unfair labor practices of employers.
(e) To discriminate in regard to wages, hours of
work, and other terms and conditions of
employment in order to encourage or discourage employment, except of those employees who
membership in any labor organization. Nothing in are already members of another union at the
this Code or in any other law shall prevent the time of the signing of the collective bargaining
parties from requiring membership in a agreementx x x. (Emphasis supplied.)
recognized collective bargaining agent as a
In the present case, the Collective Bargaining Agreement
condition for
includes a union security provision.[28] To avoid the clear possibility of
liability for breaching the union security clause of the Collective
Bargaining Agreement and to protect its own interests, the only
sensible option left to the Hotel, upon its receipt of the demand of
HIMPHLU for the dismissal of the 36 employees, was to conduct its
own inquiry so as to make its own findings on whether there was
sufficient ground to dismiss the said employees who defected from
HIMPHLU. The issuance by the respondent of the Notices requiring
the 36 employees to submit their explanations to the charges against
them was the reasonable and logical first step in a fair investigation. It
is important to note that the Hotel did not take further steps to
terminate the 36 employees.Instead, it arranged for reconciliatory
conferences between the contending unions in order to avert the
possibility of dismissing the 36 employees for violation of the union
security clause of the Collective Bargaining Agreement.
This Court, in Malayang Samahan ng Manggagawa sa M.
Greenfield v. Ramos[29] clearly stated the general rule: the dismissal of
an employee by the company pursuant to a labor unions demand in
accordance with a union security agreement does not constitute unfair
labor practice. An employer is not considered guilty of unfair labor
practice if it merely complied in good faith with the request of the
certified union for the dismissal of employees expelled from the union
pursuant to the union security clause in the Collective Bargaining
Agreement.[30] In the case at bar, there is even less possibility of
sustaining a finding of guilt for unfair labor practice where respondent
did not dismiss the 36 employees, despite the insistence of HIMPHLU,
the sole bargaining agent for the rank and file employees of the Hotel,
on the basis of the union security clause of the Collective Bargaining
Agreement. The only act attributed to the respondent is its issuance of
the Notices which, contrary to being an unfair labor practice, even
afforded the employees involved a chance to be heard.
BPI vs. BPI Employees Union-Davao Chapter, G.R.
No. 164301, August 10, 2010

Pursuant to the Article and Plan of Merger, all the assets and liabilities
of FEBTC were transferred to and absorbed by BPI as the surviving
corporation. FEBTC employees, including those in its different
branches across the country, were hired by petitioner as its own
employees, with their status and tenure recognized and salaries and
benefits maintained.

Respondent BPI Employees Union-Davao Chapter - Federation of

Unions in BPI Unibank (hereinafter the Union, for brevity) is the
exclusive bargaining agent of BPIs rank and file employees in Davao
City. The former FEBTC rank-and-file employees in Davao City did
not belong to any labor union at the time of the merger

Prior to the effectivity of the merger, respondent Union invited said

FEBTC employees to a meeting regarding the Union Shop Clause 

Section 2. Union Shop - New employees falling

within the bargaining unit as defined in Article I of
this Agreement, who may hereafter be regularly
employed by the Bank shall, within thirty (30)
days after they become regular employees, join
the Union as a condition of their continued
employment. It is understood that membership in
good standing in the Union is a condition of their
continued employment with the Bank.[8] (
Emphases supplied.)

Respondent Union then sent notices to the former FEBTC

employees who refused to join, as well as those who retracted their
membership, and called them to a hearing regarding the matter. When
these former FEBTC employees refused to attend the hearing, the
president of the Union requested BPI to implement the Union Shop
Clause of the CBA and to terminate their employment pursuant thereto
.[10]
 Voluntary Arbitrator Rosalina Letrondo-Montejo, in a Decision[
12] dated November 23, 2001, ruled in favor of petitioner BPIs
interpretation that the former FEBTC employees were not covered by
the Union Security Clause of the CBA between the Union and the Bank
on the ground that the said employees were not new employees who
were hired and subsequently regularized, but were absorbed
employees by operation of law because the former employees of
FEBTC can be considered assets and liabilities of the absorbed
corporation. The Voluntary Arbitrator concluded that the former
FEBTC employees could not be compelled to join the Union, as it was
their constitutional right to join or not to join any organization.
ISSUE
whether or not the former FEBTC employees that were
absorbed by petitioner upon the merger between FEBTC and BPI
should be covered by the Union Shop Clause found in the existing
CBA between petitioner and respondent Union.
HELD
Section 2, Article II of the CBA is silent as to how one
becomes a regular employee of the BPI for the first time.There is
nothing in the said provision which requires that a new regular
employee first undergo a temporary or probationary status before
being deemed as such under the union shop clause of the CBA.
Union security is a generic term which is applied to and comprehends
closed shop, union shop, maintenance of membership or any other
form of agreement which imposes upon employees the obligation to
acquire or retain union membership as a condition affecting
employment.
There is union shop when all new regular employees are required to
join the union within a certain period for their continued employment. 
There is maintenance of membership shop when employees, who are
union members as of the effective date of the agreement, or who
thereafter become members, must maintain union membership as a
condition for continued employment until they are promoted or
transferred out of the bargaining unit or the agreement is terminated.
 A closed-shop, on the other hand, may be defined as an enterprise in
which, by agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed
departments of the enterprise unless he or she is, becomes, and, for
the duration of the agreement, remains a member in good standing of
a union entirely comprised of or of which the employees in interest are
a part.[19]
In other words, the purpose of a union shop or other union
security arrangement is to guarantee the continued existence of the
union through enforced membership for the benefit of the workers.
Absorbed FEBTC Employees are Neither Assets nor
Liabilities
In legal parlance, however, human beings are never embraced in the
term assets and liabilities. Moreover, BPIs absorption of former FEBTC
employees was neither by operation of law nor by legal consequence
of contract. There was no government regulation or law that compelled
the merger of the two banks or the absorption of the employees of the
dissolved corporation by the surviving corporation. Had there been
such law or regulation, the absorption of employees of the non-
surviving entities of the merger would have been mandatory on the
surviving corporation.[27] In the present case, the merger was
voluntarily entered into by both banks presumably for some mutually
acceptable consideration. In fact, the Corporation Code does not
also mandate the absorption of the employees of the non-
surviving corporation by the surviving corporation in the case of
a merger. 
Proper Appreciation of the Term New Employees Under
the CBA
In any event, it is of no moment that the former FEBTC
employees retained the regular status that they possessed while
working for their former employer upon their absorption by petitioner.
 This fact would not remove them from the scope of the phrase new
employees as contemplated in the Union Shop Clause of the CBA,
contrary to petitioners insistence that the term new employees only
refers to those who are initially hired as non-regular employees for
possible regular employment.
 The Union Shop Clause in the CBA simply states that new
employees who during the effectivity of the CBA may be regularly
employed by the Bank must join the union within thirty (30) days from
their regularization. There is nothing in the said clause that limits its
application to only new employees who possess non-regular status
, meaning probationary status, at the start of their employment.
 Petitioner likewise failed to point to any provision in the CBA expressly
excluding from the Union Shop Clause new employees who are
absorbed as regular employees from the beginning of their
employment. What is indubitable from the Union Shop Clause is that
upon the effectivity of the CBA, petitioners new regular employees (
regardless of the manner by which they became employees of BPI
) are required to join the Union as a condition of their continued
employment.
No Substantial Distinction Under the CBA Between Regular
Employees Hired After Probationary Status and Regular
Employees Hired After the Merger They both enjoy benefits that
the Union was able to secure for them under the CBA. When they
both entered the employ of BPI, the CBA and the Union Shop
Clause therein were already in effect and neither of them had the
opportunity to express their preference for unionism or not. We see
no cogent reason why the Union Shop Clause should not be
applied equally to these two types of new employees, for they are
undeniably similarly situated.
PURPOSE OF UNION SECURITY CLAUSE
Indeed, a union security clause in a CBA should be
interpreted to give meaning and effect to its purpose, which is to afford
protection to the certified bargaining agent and ensure that the
employer is dealing with a union that represents the interests of the
legally mandated percentage of the members of the bargaining unit.
The union shop clause offers protection to the certified
bargaining agent by ensuring that future regular employees who
(a) enter the employ of the company during the life of the
CBA;
(b) are deemed part of the collective bargaining unit; and (
c) whose number will affect the number of members of the
collective bargaining unit will be compelled to join the union.
• Such compulsion has legal effect, precisely
because the employer by voluntarily entering in to
a union shop clause in a CBA with the certified
bargaining agent takes on the responsibility of
dismissing the new regular employee who does
not join the union.
Right of an Employee not to Join a Union is not
Absolute and Must Give Way to the Collective Good of All
Members of the Bargaining Unit Time and again, this Court has
ruled that the individual employees right not to join a union may be
validly restricted by a union security clause in a CBA[49] and such union
security clause is not a violation of the employees constitutional right to
freedom of association.[50] Laws and jurisprudence promote unionism
and afford certain protections to the certified bargaining agent in a
unionized company because a strong and effective union presumably
benefits all employees in the bargaining unit since such a union
would be in a better position to demand improved benefits and
conditions of work from the employer. 
settled jurisprudence has already swung the balance in favor of
unionism, in recognition that ultimately the individual employee will be
benefited by that policy. In the hierarchy of constitutional values, this
Court has repeatedly held that the right to abstain from joining a labor
organization is subordinate to the policy of encouraging unionism as an
instrument of social justice.
CONCLUSION
Union Shop Clause of the CBA covers the former FEBTC
employees who were hired/employed by BPI during the effectivity of
the CBA in a manner which petitioner describes as absorption. 
Complex Electronics Employees Asso. vs. Complex
Electronics, G.R. No. 122136, July 19, 1999
FACTS: Due to losses on production of the petitioner, it was
constrained to cease operations. In the evening of April 6, 1992, the
machinery, equipment and materials being used for production at
Complex were pulled-out from the company premises and transferred
to the premises of Ionics Circuit, Inc. (Ionics) at Cabuyao, Laguna.
The following day, a total closure of company operation was effected at
Complex.
A complaint was, thereafter, filed with the Labor Arbitration Branch of
the NLRC for unfair labor practice, illegal closure/illegal lockout, money
claims for vacation leave, sick leave, unpaid wages, 13th month pay,
damages and attorney’s fees. The Union
alleged that the pull-out of the machinery, equipment and materials
from the company premises, which resulted to the sudden closure of
the company was in violation of Section 3 and 8, Rule XIII, Book V of
the Labor Code of the Philippines and the existing CBA. Ionics was
impleaded as a party defendant because the officers and management
personnel of Complex were also holding office at Ionics with Lawrence
Qua as the President of both companies.
The Union anchors its position on the fact that Lawrence Qua is both
the president of Complex and Ionics and that both companies have the
same set of Board of Directors. It claims that business has not ceased
at Complex but was merely transferred to Ionics, a runaway shop. To
prove that Ionics was just a runaway shop, petitioner asserts that out of
the 80,000 shares comprising the increased capital stock of Ionics, it
was Complex that owns majority of said shares with P1,200,000.00 as
its capital subscription and P448,000.00 as its paid up investment,
compared to P800,000.00 subscription andP324,560.00 paid-up owing
to the other stockholders, combined. Thus, according to the Union,
there is a clear ground to pierce the veil of corporate fiction.
ISSSUE: WON Ionics is merely a runaway shop
HELD: NO. A “runaway shop” is defined as an industrial plant moved
by its owners from one location to another to escape union labor
regulations or state laws, but the term is also used to describe a plant
removed to a new location in order to discriminate against employees
at the old plant because of their union activities. It is one wherein the
employer moves its business to another location or it temporarily
closes its business for anti-union purposes. A “runaway shop” in this
sense, is a relocation motivated by anti-union animus rather than for
business reasons.
In this case, however, Ionics was not set up merely for the purpose of
transferring the business of Complex. At the time the labor dispute
arose at Complex, Ionics was already existing as an independent
company. As earlier mentioned, it has been in existence since July 5,
1984 (8 years prior to the dispute). It cannot, therefore, be said that
the temporary closure in Complex and its subsequent transfer of
business to Ionics was for anti-union purposes. The Union failed to
show that the primary reason for the closure of the establishment was
due to the union activities of the employees.
The mere fact that one or more corporations are owned or controlled
by the same or single stockholder is not a sufficient ground for
disregarding separate corporate personalities. Mere ownership by a
single stockholder or by another corporation of all or nearly all of the
capital stock of a corporation is not of itself sufficient ground for
disregarding the separate corporate personality.
At first glance after reading the decision a quo, it would seem that the
closure of respondent’s operation is not justified. However, a deeper
examination of the records along with the evidence, would show that
the closure, although it was done abruptly as there was no compliance
with the 30-day prior notice requirement, said closure was not intended
to circumvent the provisions of the Labor Code on termination of
employment. The closure of operation by Complex on April 7, 1992
was not without valid reasons. Customers of respondent alarmed by
the pending labor dispute and the imminent strike to be foisted by the
union, as shown by their strike vote, directed respondent Complex to
pull-out its equipment, machinery and materials to other safe bonded
warehouse. Respondent being mere consignees of the equipment,
machinery and materials were without any recourse but to oblige the
customers’ directive. The pull-out was effected on April 6, 1992. We
can see here that Complex’s action, standing alone, will not result in
illegal closure that would cause the illegal dismissal of the complainant
workers. Hence, the Labor Arbiter’s conclusion that since there were
only 2 of respondent’s customers who have expressed pull-out of
business from respondent Complex while most of the customer’s have
not and, therefore, it is not justified to close operation cannot be upheld
. The determination to cease operation is a prerogative of
management that is usually not interfered with by the State as no
employer can be required to continue operating at a loss simply to
maintain the workers in employment. That would be taking of property
without due process of law which the employer has the right to resist.
Octavio vs. PLDT, G.R. No. 175492, February 27, 2013
Facts: PLDT and Gabay ng Unyon sa Telekominaksyon ng mga
Superbisor (GUTS) entered into a CBA covering the period January 1,
1999 to December 31, 2001 (CBA of 1999-2001). On October 1, 2000,
PLDT hired Octavio as Sales System Analyst I on a probationary
status. He became a member of GUTS.
On May 31, 2002, PLDT and GUTS entered into another CBA covering
the period January 1, 2002 to December 31, 2004 (CBA of 2002-2004
). Claiming that he was not given the salary increases of P2,500.00
effective January 1, 2001 and P2,000.00 effective January 1, 2002,
Octavio wrote the President of GUTS, Adolfo Fajardo (Fajardo). Acting
thereon and on similar grievances from other GUTS members, Fajardo
wrote the PLDT Human Resource Head to inform management of the
GUTS members’ claim for entitlement to the across-the-board salary
increases.
The committee denied the claims of Octavio. Octavio filed before the
Arbitration Branch of the NLRC a Complaint for payment of said salary
increases.
PLDT countered that the issues advanced by Octavio had already
been resolved by the Union-Management Grievance Committee when
it denied his claims through the Committee Resolution. Moreover, the
grant of across-the board salary increase for those who were
regularized starting January 1, 2002 and the exclusion thereto of those
who were regularized on January 1, 2001, do not constitute an act of
unfair labor practice as would result in any discrimination or encourage
or discourage membership in a labor organization. In fact, when the
Union-Management Grievance Committee came up with the
Committee Resolution, they considered the same as the most
practicable and reasonable solution for both management and union.
At any rate, the said Committee Resolution had already become final
and conclusive between the parties for failure of Octavio to elevate the
same to the proper forum. In addition, PLDT claimed that the NLRC
has no jurisdiction to hear and decide Octavio’s claims.
Issue: WON the decision of the Grievance Committee is binding.
Held: Yes. It is settled that "when parties have validly agreed on a
procedure for resolving grievances and to submit a dispute to voluntary
arbitration then that procedure should be strictly observed." Moreover,
we have held time and again that "before a party is allowed to seek the
intervention of the court, it is a precondition that he should have
availed of all the means of administrative processes afforded him.
Hence, if a remedy within the administrative machinery can still be
resorted to by giving the administrative officer concerned every
opportunity to decide on a matter that comes within his jurisdiction,
then such remedy should be exhausted first before the court’s judicial
power can be sought. The premature invocation of the court’s judicial
intervention is fatal to one’s cause of action." "The underlying principle
of the rule on exhaustion of administrative remedies rests on the
presumption that when the administrative body, or grievance
machinery, is afforded a chance to pass upon the matter, it will decide
the same correctly."
Under Article 26019 of the Labor Code, grievances arising from the
interpretation or implementation of the parties’ CBA should be resolved
in accordance with the grievance procedure embodied therein. It also
provides that all unsettled grievances shall be automatically referred
for voluntary arbitration as prescribed in the CBA.
By failing to question the Committee Resolution through the proper
procedure prescribed in the CBA, that is, by raising the same before a
Board of Arbitrators, Octavio is deemed to have waived his right to
question the same. Clearly, he departed from the grievance procedure
mandated in the CBA and denied the Board of Arbitrators the
opportunity to pass upon a matter over which it has jurisdiction. Hence,
and as correctly held by the CA, Octavio’s failure to assail the validity
and enforceability of the Committee Resolution makes the same
binding upon him. On this score alone, Octavio’s recourse to the labor
tribunals below, as well as to the CA, and, finally, to this Court, must
therefore fail.
Goya Inc. vs Goya Employees’ Union, G.R. No. 170054, January
21, 2013
FACTS: Sometime in January 2004, petitioner Goya, Inc. (Company)
hired contractual employees from PESO Resources Development
Corporation (PESO) to perform temporary and occasional services in
its factory. This prompted respondent Goya, Inc. Employees
Union–FFW (Union) to request for a grievance conference on the
ground that the contractual workers do not belong to the categories of
employees stipulated in the existing Collective Bargaining Agreement (
CBA).The Union asserted that the hiring of contractual employees from
PESO is not a management prerogative and in gross violation of the
CBA tantamount to unfair labor practice (ULP). It noted that the
contractual workers engaged have been assigned to work in positions
previously handled by regular workers and Union members, in effect
violating Section 4, Article I of the CBA, which provides for three
categories of employees in the Company.
During the hearing on July 1, 2004, the Company and the Union
manifested before Voluntary Arbitrator (VA) Bienvenido E. Laguesma
that amicable settlement was no longer possible; hence, they agreed
to submit for resolution the solitary issue of "[w]hether or not the
Company is guilty of unfair labor acts in engaging the services of
PESO, a third party service provider, under the existing CBA, laws,
and jurisprudence."
On October 26, 2004, VA Laguesma dismissed the Union’s charge of
ULP for being purely speculative and for lacking in factual basis, but
the Company was directed to observe and comply with its commitment
under the CBA.
While the Union moved for partial reconsideration of the VA Decision,8
 the Company immediately filed a petition for review9 before the Court
of Appeals (CA) under Rule 43 of the Revised Rules of Civil Procedure
to set aside the directive to observe and comply with the CBA
commitment pertaining to the hiring of casual employees when
necessitated by business circumstances. the CA dismissed the petition
ISSUE: WON the VA professed an order was not covered by the sole
issue submitted for voluntary arbitration
travel from home to office. Claiming that the gasoline allowance is
similar to the company policy for manages and assistant vice-
presidents that “in the event the gas allowance is not fully consumed,
the gasoline not used may be converted to cash, subject to whatever
tax is applicable”, the company deducted from union members
withholding tax corresponding to the conversion to cash of their
unused gasoline allowance, since the company considered it as part of
compensation subject to income tax. The union on the other hand
claimed that the gasoline allowance is a “negotiated item” under Article
XV Section 15 of the new CBA on fringe benefits, thus it resulted to a
grievance which was not resolved by the CBA grievance procedure.
They submitted the issue to a panel of voluntary arbitrators as required
by the CBA.
The Panel of Voluntary Arbitrators then rendered a decision declaring
that the cash conversion of the unused gasoline allowance is a fringe
benefit subject to the fringe benefit tax, not to income tax, thus the
deductions made by the company shall be considered as advances
subject to refund in future remittances of withholding tax.

HELD: No. The VA ruled on a matter that is covered by the sole issue
submitted for voluntary arbitration. Resultantly, the CA did not commit
serious error when it sustained the ruling that the hiring of contractual
employees from PESO was not in keeping with the intent and spirit of
the CBA. Indeed, the opinion of the VA is germane to, or, in the words
of the CA, "interrelated and intertwined with," the sole issue submitted
for resolution by the parties.
Generally, the arbitrator is expected to decide only those questions
expressly delineated by the submission agreement. Nevertheless, the
arbitrator can assume that he has the necessary power to make a final
settlement since arbitration is the final resort for the adjudication of
disputes. The succinct reasoning enunciated by the CA in support of its
holding, that the Voluntary Arbitrator in a labor controversy has
jurisdiction to render the questioned arbitral awards, deserves our
concurrence, thus:
On appeal, the CA Eight Division denied the appeal and affirmed with
modification the Voluntary Arbitrators’ decision. While the CA agreed
that the cash conversion is a fringe benefit, it does not necessarily
mean that it is subject to the fringe benefit tax, as it explained that
Section 33 (A) of the National Internal Revenue Code (NIRC) of 1997
imposed a fringe benefit tax, effective January 1, 2000 and thereafter,
on the grossed-up monetary value of fringe benefit furnished or
granted to the employee (except rank-and-file employees) by the
employer (unless the fringe benefit is required by the nature of, or
necessary to the trade, business or profession of the employer, or
when the fringe benefit is for the convenience or advantage of the
employer). Since

In general, the arbitrator is expected to decide those questions

expressly stated and limited in the submission agreement. However,
since arbitration is the final resort for the adjudication of disputes, the
arbitrator can assume that he has the power to make a final settlement
. Thus, assuming that the submission empowers the arbitrator to
decide whether an employee was discharged for just cause, the
arbitrator in this instance can reasonably assume that his powers
extended beyond giving a yes-or-no answer and included the power to
reinstate him with or without back pay.

In one case, the Supreme Court stressed that "xxx the Voluntary
Arbitrator had plenary jurisdiction and authority to interpret the
agreement to arbitrate and to determine the scope of his own authority
subject only, in a proper case, to the certiorari jurisdiction of this Court.
The Arbitrator, as already indicated, viewed his authority as embracing
not merely the determination of the abstract question of whether or not
a performance bonus was to be granted but also, in the affirmative
case, the amount thereof.

By the same token, the issue of regularization should be viewed as two

-tiered issue. While the submission agreement mentioned only the
determination of the date or regularization, law and jurisprudence give
the voluntary arbitrator enough leeway of authority as well as adequate
prerogative to accomplish the reason for which the law on voluntary
arbitration was created – speedy labor justice. It bears stressing that
the underlying reason why this case arose is to settle, once and for all,
the ultimate question of whether respondent employees are entitled to
higher benefits. To require them to file another action for payment of
such benefits would certainly undermine labor proceedings and
contravene the constitutional mandate providing full protection to labor.

Honda Cars vs Honda Cars Technical Specialist, G.R. No. 204142,

November 19, 2014
Facts: Honda Cars Inc., and the company’s supervisors and technical
specialists’ union, Honda Cars Technical Specialists and Supervisory
Union entered into a collective bargaining agreement for the period
April 1, 2006 to March 31, 2011. Prior to the execution of the CBA, the
union members were receiving P3,300.00 a month as transportation
allowance; on September3, 2005, they entered into a Memorandum of
Agreement converting the transportation allowance into a monthly
gasoline allowance at 125 liters each for official business purposes and
the gasoline allowance was mainly for the benefit of the company, it is the NIRC expressly vests the CIR original jurisdiction over refunds of
not subject to fringe benefit tax. internal revenue taxes, fees or other charges, penalties imposed in
relation thereto, or other tax matters.
The company elevated the case to the Supreme Court. It assails the
finding of both the arbitrators and the CA that the cash conversion of The union has no cause of action against the company
the unused portion of gasoline allowance is a fringe benefit, not a part
of compensation income. Even assuming the same is a fringe benefit, Under the withholding tax system, the employer as the withholding
the union has no cause of action for the refund of tax withheld and paid agent acts as both the government and the taxpayer’s agent. Except in
to the BIR. Citing Section 204 of the NIRC, the company contends that the case of a minimum wage earner, every employer has the duty to
an action for the refund of an erroneous withholding and payment of deduct and withhold upon the employee’s
taxes should be in the nature of a tax refund claim with the BIR. It
further contends that when it withheld the income tax due from the
cash conversion of the unused gasoline allowance of the union
members, it was simply acting as an agent of the government for the
collection and payment of taxes due from the members.

Issue: Whether or not the union has a cause of action for refund to tax
withheld by the company on the cash conversion of the unused portion
of the gasoline allowance of its members.

Ruling: We partly grant the petition. The Voluntary Arbitrator has no

jurisdiction to settle tax matters

The Labor Code vests the Voluntary Arbitrator original and exclusive
jurisdiction to hear and decide all unresolved grievances arising from
the interpretation or implementation of the Collective Bargaining
Agreement and those arising from the interpretation or enforcement of
company personnel policies[ LABOR CODE, Article 261.]. Upon
agreement of the parties, the Voluntary Arbitrator shall also hear and
decide all other labor disputes, including unfair labor practices and
bargaining deadlocks.⁠1

In short, the Voluntary Arbitrator’s jurisdiction is limited to labor

disputes. Labor dispute means “any controversy or matter concerning
terms and conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining, changing,
or arranging the terms and conditions of employment, regardless of
whether the disputants stand in the proximate relation of employer and
employee.”⁠2

The issues raised before the Panel of Voluntary Arbitrators are: (1)
whether the cash conversion of the gasoline allowance shall be subject
to fringe benefit tax or the graduated income tax rate on compensation;
and (2) whether the company wrongfully withheld income tax on the
converted gas allowance.

The Voluntary Arbitrator has no competence to rule on the taxability of

the gas allowance and on the propriety of the withholding of tax. These
issues are clearly tax matters, and do not involve labor disputes. To
be exact, they involve tax issues within a labor relations setting as they
pertain to questions of law on the application of Section 33 (A) of the
NIRC. They do not require the application of the Labor Code or the
interpretation of the MOA and/or company personnel policies.
Furthermore, the company and the union cannot agree or compromise
on the taxability of the gas allowance. Taxation is the State’s inherent
power; its imposition cannot be subject to the will of the parties.

Under paragraph 1, Section 4 of the NIRC, the CIR shall have the
exclusive and original jurisdiction to interpret the provisions of the
NIRC and other tax laws, subject to review by the Secretary of Finance
. Consequently, if the company and/or the union desire/s to seek
clarification of these issues, it/they should have requested for a tax
ruling⁠3 from the Bureau of Internal Revenue (BIR). Any revocation,
modification or reversal of the CIR’s ruling shall not be given
retroactive application if the revocation, modification or reversal will be
prejudicial to the taxpayers, except in the following cases:

(a) Where the taxpayer deliberately misstates or omits material facts

from his return or any document required of him by the BIR;

(b) Where the facts subsequently gathered by the BIR are materially
different from the facts on which the ruling is based; or

(c) Where the taxpayer acted in bad faith.⁠4

On the other hand, if the union disputes the withholding of tax and
desires a refund of the withheld tax, it should have filed an
administrative claim for refund with the CIR. Paragraph 2, Section 4 of
wages a tax determined in accordance with the rules and regulations arbitrators to be appointed by the parties, the same shall be appointed
to be prescribed by the Secretary of Finance, upon the CIR’s from the accredited voluntary arbitrators of the National Conciliation
recommendation.⁠5 As the Government’s agent, the employer collects and Mediation Board of the Department of Labor and Employment.
tax and serves as the payee by fiction of law.⁠6 As the employee’s
Under the above-quoted constitutional and legal provisions, the
agent, the employer files the necessary income tax return and remits
voluntary arbitrator or panel of voluntary arbitrators has original and
the tax to the Government.⁠7
exclusive jurisdiction over Fernandez’s disability claim. There is no
dispute that the claim arose out of Fernandez’s employment with the
Based on these considerations, we hold that the union has no cause of
petitioners and that their relationship is covered by a CBA — the
action against the company. The company merely performed its
statutory duty to withhold tax based on its interpretation of the NIRC,
albeit that interpretation may later be found to be erroneous. The
employer did not violate the employee’s right by the mere act of
withholding the tax that may be due the government.⁠8

Moreover, the NIRC only holds the withholding agent personally liable
for the tax arising from the breach of his legal duty to withhold, as
distinguished from his duty to pay tax.⁠9 Under Section 79 (B) of the
NIRC, if the tax required to be deducted and withheld is not collected
from the employer, the employer shall not be relieved from liability for
any penalty or addition to the unwithheld tax.

Thus, if the BIR illegally or erroneously collected tax, the recourse of

the taxpayer, and in proper cases, the withholding agent, is against the
BIR, and not against the withholding agent⁠10. The union’s cause of
action for the refund or non-withholding of tax is against the taxing
authority, and not against the employer. Section 229 of the NIRC
provides:

Sec.229. Recovery of Tax Erroneously or Illegally Collected. – No suit

or proceeding shall be maintained in any court for the recovery of any
national internal revenue tax hereafter alleged to have been
erroneously or illegally assessed or collected, or of any penalty
claimed to have been collected without authority, or of any sum alleged
to have been excessively or in any manner wrongfully collected, until a
claim for refund or credit has been duly filed with the Commissioner;
but such suit or proceeding may be maintained, whether or not such
tax, penalty, or sum has been paid under protest or duress.

Ace Navigation Co. Inc., vs Fernandez, G.R. No. 197309, October

10, 2012
seaman Teodorico Fernandez (Fernandez), assisted by his wife,
Glenita Fernandez, filed with the National Labor Relations Commission
(NLRC) a complaint for disability benefits, The petitioners moved to
dismiss the complaint,4 contending that the labor arbiter had no
jurisdiction over the dispute. They argued that exclusive original
jurisdiction is with the voluntary arbitrator or panel of voluntary
arbitrators, pursuant to Section 29 of the POEA Standard Employment
Contract (POEA-SEC), since the parties are covered by the AMOSUP-
TCC or AMOSUP-VELA (as later cited by the petitioners) collective
bargaining agreement (CBA). Under Section 14 of the CBA, a dispute
between a seafarer and the company shall be settled through the
grievance machinery and mandatory voluntary arbitration. Fernandez
opposed the motion.5 He argued that inasmuch as his complaint
involves a money claim, original and exclusive jurisdiction over the
case is vested with the labor arbiter. 2008, Labor Arbiter Romelita N.
Rioflorido denied the motion to dismiss, holding that under Section 10
of Republic Act (R.A.) No. 8042, the Migrant Workers and Overseas
Filipinos Act of 1995, the labor arbiter has original and exclusive
jurisdiction over money claims arising out of an employer-employee
relationship or by virtue of any law or contract, notwithstanding any
provision of law to the contrary.6
HELD
the POEA-SEC, which governs the employment of Filipino seafarers,
provides in its Section 29 on Dispute Settlement Procedures:
In cases of claims and disputes arising from this employment, the
parties covered by a collective bargaining agreement shall submit
the claim or dispute to the original and exclusive jurisdiction of
the voluntary arbitrator or panel of voluntary arbitrators. If the
parties are not covered by a collective bargaining agreement, the
parties may at their option submit the claim or dispute to either the
original and exclusive jurisdiction of the National Labor Relations
Commission (NLRC), pursuant to Republic Act (RA) 8042 otherwise
known as the Migrant Workers and Overseas Filipinos Act of 1995 or
to the original and exclusive jurisdiction of the voluntary arbitrator or
panel of voluntary arbitrators. If there is no provision as to the voluntary
AMOSUP/TCC or the AMOSUP-VELA CBA. The CBA provides for a In the present case, the Secretary was explicitly granted by Article 263(
grievance procedure for the resolution of grievances or disputes which g) of the Labor Code the authority to assume jurisdiction over a labor
occur during the employment relationship and, like the grievance dispute causing or likely to cause a strike or lockout in an industry
machinery created under Article 261 of the Labor Code, it is a two- indispensable to the national interest, and decide the same accordingly
tiered mechanism, with voluntary arbitration as the last step. . Necessarily, this authority to assume jurisdiction over the said labor
dispute must include and extend to all questions and controversies
arising therefrom, including cases over which the labor arbiter has
It bears stressing at this point that we are upholding the jurisdiction of
exclusive jurisdiction.
the voluntary arbitrator or panel of voluntary arbitrators over the
present dispute, not only because of the clear language of the parties’
Moreover, Article 217 of the Labor Code is not without, but
CBA on the matter; more importantly, we so uphold the voluntary
contemplates, exceptions thereto. This is evident from the opening
arbitrator’s jurisdiction, in recognition of the State’s express preference
proviso therein reading ‘(e)xcept as otherwise provided under this
for voluntary modes of dispute settlement, such as conciliation and
Code x x x.’ Plainly, Article 263(g) of the Labor Code was meant to
voluntary arbitration as expressed in the Constitution, the law and the
rules. It is settled that when the parties have validly agreed on a
procedure for resolving grievances and to submit a dispute to
voluntary arbitration then that procedure should be strictly
observed.31 

Interphil Laboratories Employees Union vs. Interphil Laboratories

, G.R. No. 142824, December 19, 2001
Facts: Petitioner is the sole and exclusive bargaining agent of the rank
-and-file employees of Respondent. They had a CBA.

Prior to the expiration of the CBA, respondent company was

approached by the petitioner, through its officers. The Union inquired
about the stand of the company regarding the duration of the CBA
which was set to expire in a few months. Salazar told the union officers
that the matter could be best discussed during the formal negotiations
which would start soon.

All the rank-and-file employees of the company refused to follow their

regular two-shift work schedule. The employees stopped working and
left their workplace without sealing the containers and securing the raw
materials they were working on.

To minimize the damage the overtime boycott was causing the

company, Salazar immediately asked for a meeting with the union
officers. In the meeting, Enrico Gonzales, a union director, told Salazar
that the employees would only return to their normal work schedule if
the company would agree to their demands as to the effectivity and
duration of the new CBA. Salazar again told the union officers that the
matter could be better discussed during the formal renegotiations of
the CBA. Since the union was apparently unsatisfied with the answer
of the company, the
overtime boycott continued. In addition, the employees started to
engage in a work slowdown campaign during the time they were
working, thus substantially delaying the production of the company.

Respondent company filed with the National NLRC a petition to

declare illegal petitioner union’s “overtime boycott” and “work
slowdown” which, according to respondent company, amounted to
illegal strike. It also filed with Office Secretary of Labor a petition for
assumption
of jurisdiction. Secretary of Labor Nieves Confesor issued an
assumption order over the labor dispute.

Labor Arbiter Caday submitted his recommendation to the then

Secretary of Labor Leonardo A. Quisumbing. Then Secretary
Quisumbing approved and adopted the report in his Order, finding
illegal strike on the part of petitioner Union.

Issue: WON the Labor Secretary has jurisdiction to rule over an illegal
strike.

Held: On the matter of the authority and jurisdiction of the Secretary of

Labor and Employment to rule on the illegal strike committed by
petitioner union, it cannot be denied that the issues of “overtime
boycott” and “work slowdown” amounting to illegal strike before Labor
Arbiter Caday are intertwined with the labor dispute before the Labor
Secretary.

The appellate court also correctly held that the question of the
Secretary of Labor and Employment’s jurisdiction over labor-related
disputes was already settled in International Pharmaceutical, Inc. vs.
Hon. Secretary of Labor and Associated Labor Union (ALU) where the
Court declared:
make both the Secretary (or the various regional directors) and the
labor arbiters share jurisdiction, subject to certain conditions.
Otherwise, the Secretary would not be able to effectively and efficiently
dispose of the primary dispute. To hold the contrary may even lead to
the absurd and undesirable result wherein the Secretary and the labor
arbiter concerned may have diametrically opposed rulings. As we have
said, ‘it is fundamental that a statute is to be read in a manner that
would breathe life into it, rather than defeat it.
In fine, the issuance of the assailed orders is within the province of the
Secretary as authorized by Article 263(g) of the Labor Code and Article
217(a) and (5) of the same Code, taken conjointly and rationally
construed to subserve the objective of the jurisdiction vested in the
Secretary.
notice shall, as far as practicable, state the acts complained of, and
efforts taken to resolve the dispute amicable. Any notice which does
not conform with the requirements of this and the foregoing section
shall be deemed as not having been filed and the party concerned
shall be so informed by the regional branch of the Board. The union
cannot be faulted for its omission. The union could not have attached
the counter- proposal of the company in the notice of strike it submitted
to the NCMB as there was no such counter- proposal. The union filed a
notice of strike, after several request for negotiation proved futile. It
was only after two weeks, when the company formally responded to
the union by submitting the first part of its counter-proposal. Nowhere
in the ruling of the LA can we find any discussion of how respondents,
as

NUWHRAIN-APL-IUF Dusit Hotel Nikko Chapter vs. CA, G.R. No.

163942, Nov. 11, 2008
Facts: Because of the collective bargaining deadlock, petitioner Union
staged a strike against the Hotel, herein private respondent. This strike
was declared illegal by the SC.

Issue: The effects of an illegal strike on employees.

Held: Regarding the Union officers and members’ liabilities for their
participation in the illegal picket and strike, Article 264(a), paragraph 3
of the Labor Code provides that “any union officer who knowingly
participates in an illegal strike and any worker or union officer who
knowingly participates in the commission of illegal acts during a strike
may be declared to have lost his employment status x x x.” The law
makes a distinction between union officers and mere union members.
Union officers may be validly terminated from employment for their
participation in an illegal strike, while union members have to
participate in and commit illegal acts for them to lose their employment
status. Thus, it is necessary for the company to adduce proof of the
participation of the striking employees in the commission of illegal acts
during the strikes.

Clearly, the 29 Union officers may be dismissed pursuant to Art. 264(a

), par. 3 of the Labor Code which imposes the penalty of dismissal on
“any union officer who knowingly participates in an illegal strike.” We,
however, are of the opinion that there is room for leniency with respect
to the Union members. It is pertinent to note that the Hotel was able to
prove before the NLRC that the strikers blocked the ingress to and
egress from the Hotel. But it is quite apparent that the Hotel failed to
specifically point out the participation of each of the Union members in
the commission of illegal acts during the picket and the strike. For this
lapse in judgment or diligence, we are constrained to reinstate the 61
Union members.

Further, we held in one case that union members who participated in

an illegal strike but were not identified to have committed illegal acts
are entitled to be reinstated to their former positions but without
backwages.

Club Filipino vs. Bautista, G.R. No. 168406, July 13, 2009
Facts: Petitioner and the union had a CBA which expired on May 31,
2000. Within the freedom period, the union made several demands for
negotiation but the company replied that it could not muster a quorum,
thus no CBA negotiations could be held. In order to compel the
company to negotiate, union filed a request for preventive mediation
with NCMB but again failed. On April 2001, a notice of strike was filed
by the union and thereafter, a strike was held. Petitioner filed before
the NLRC a petition to declare the strike illegal. The LA, in its decision,
declared that the strike is illegal. On appeal, the NLRC decision is
affirmed the LA decision. Upon elevation to CA, the court set aside the
ruling of the LA and NLRC as far as other respondent but dismissed
the other respondent. Hence, this petition.

Issue: Whether the strike staged by respondent is legal.

Ruling: The court ruled in affirmative. It is undisputed that the notice of

strike was filed by the union without attaching the counter-proposal of
the company. In cases of bargaining deadlocks, the notice shall, as far
as practicable, further state the unresolved issues in the bargaining
negotiations and be accompanied by the written proposals of the union
, the counter-proposals of the employer and the proof of a request for
conference to settle differences. In cases of unfair labor practices, the
union officers, knowingly participated in the alleged illegal strike. Thus, MSF Tire & Rubber, Inc., vs CA, G.R. No. 128632, August 5, 1999
even assuming Arguendo that the strike was illegal, their automatic Facts: Respondent Union filed a notice of strike in the NCMB charging
dismissal had no basis. (Phildtread) with unfair labor practice. Thereafter, they picketed and
assembled outside the gate of Philtread’s plant. Philtread, on the other
Santa Rosa CocaCola Plant Ph. Union v CocaCola Bottlers, GR No hand, filed a notice of lockout. Subsequently, the Secretary of Labor
. 164302, Jan 24, ‘07 assumed jurisdiction over the labor dispute and certified it for
Facts: The Sta. Rosa Coca-Cola Plant Employees Union (Union) is compulsory arbitration.
the sole and exclusive bargaining representative of the regular daily
paid workers and the monthly paid non-commission-earning During the pendency of the labor dispute, Philtread entered into a
employees of the Coca-Cola Bottlers Philippines, Inc. (Company) in its Memorandum of Agreement with Siam Tyre whereby its plant and
Sta. Rosa, Laguna plant. equipment would be sold to a new company, herein petitioner, 80% of
which would be owned by Siam Tyre and 20% by Philtread, while the
Upon the expiration of the CBA, the Union informed the Company of its land on which the plant was located would be sold to another company
desire to renegotiate its terms. The CBA meetings commenced on July , 60% of which would be owned by Philtread and 40% by Siam Tyre.
26, 1999, where the Union and the Company discussed the ground
rules of the negotiations. The Union insisted that representatives from
the Alyansa ng mga Unyon sa Coca-Cola be allowed to sit down as
observers in the CBA meetings. The Union officers and members also
insisted that their wages be based on their work shift rates. For its part,
the Company was of the view that the members of the Alyansa were
not members of the bargaining unit. The Alyansa was a mere
aggregate of employees of the Company in its various plants; and is
not a registered labor organization. Thus, an impasse ensued.

On August 30, 1999, the Union, its officers, directors and six shop
stewards filed a “Notice of Strike” with the NCMB.

The Union decided to participate in a mass action organized by the

Alyansa in front of the Company’s premises. Thus, the Union officers
and members held a picket along the front perimeter of the plant on
September 21, 1999. As a result, all of the 14 personnel of the
Engineering Section of the Company did not report for work, and 71
production personnel were also absent. As a result, only one of the
three bottling lines operated during the day shift. All the three lines
were operated during the night shift with cumulative downtime of five (5
) hours due to lack of manning, complement and skills requirement.
The volume of production for the day was short by 60,000 physical
cases versus budget.

On October 13, 1999, the Company filed a “Petition to Declare Strike

Illegal”

Issue: WON the strike, dubbed by petitioner as picketing, is illegal.

Held: Article 212(o) of the Labor Code defines strike as a temporary

stoppage of work by the concerted action of employees as a result of
an industrial or labor dispute. In Bangalisan v. CA, the Court ruled that
“the fact that the conventional term ‘strike’ was not used by the striking
employees to describe their common course of action is
inconsequential, since the substance of the situation, and not its
appearance, will be deemed to be controlling.”

Picketing involves merely the marching to and fro at the premises of

the employer, usually accompanied by the display of placards and
other signs making known the facts involved in a labor dispute. As
applied to a labor dispute, to picket means the stationing of one or
more persons to observe and attempt to observe. The purpose of
pickets is said to be a means of peaceable persuasion.

The basic elements of a strike are present in this case. They marched
to and fro in front of the company’s premises during working hours.
Thus, petitioners engaged in a concerted activity which already
affected the company’s operations. The mass concerted activity
constituted a strike.

For a strike to be valid, the following procedural requisites provided by

Art 263 of the Labor Code must be observed: (a) a notice of strike filed
with the DOLE 30 days before the intended date thereof, or 15 days in
case of unfair labor practice; (b) strike vote approved by a majority of
the total union membership in the bargaining unit concerned obtained
by secret ballot in a meeting called for that purpose, (c) notice given to
the DOLE of the results of the voting at least seven days before the
intended strike. These requirements are mandatory and the failure of a
union to comply therewith renders the strike illegal. It is clear in this
case that petitioners totally ignored the statutory requirements and
embarked on their illegal strike.
Petitioner then asked respondent Union to desist from picketing
outside its plant. As the respondent Union refused petitioner’s request,
petitioner filed a complaint for injunction with damages before the RTC.
Respondent Union moved to dismiss the complaint alleging lack of
jurisdiction on the part of the trial court.
2. PLDT’s unreasonable refusal to honor its commitment before
this Honorable
Office that it will provide MKP its comprehensive plan/s with respect to
personnel downsizing / reorganization and closure of exchanges. Such
refusal violates its duty to bargain collectively with MKP in good faith.

Petitioner asserts that its status as an “innocent bystander” with 3. PLDT’s continued hiring of “contractual”, “temporary”,
respect to the labor dispute between Philtread and the Union entitles it “project” and “casual”
to a writ of injunction from the civil courts.

Issue: WON petitioner has shown a clear legal right to the issuance of
a writ of injunction under the “innocent bystander” rule.

Held: In Philippine Association of Free Labor Unions (PAFLU) v.

Cloribel, this Court, through Justice J.B.L. Reyes, stated the “innocent
bystander” rule as follows:

The right to picket as a means of communicating the facts of a labor

dispute is a phase of the freedom of speech guaranteed by the
constitution. If peacefully carried out, it cannot be curtailed even in the
absence of employer-employee relationship.
The right is, however, not an absolute one. While peaceful picketing is
entitled to protection as an exercise of free speech, we believe the
courts are not without power to confine or localize the sphere of
communication or the demonstration to the parties to the labor dispute,
including those with related interest, and to insulate establishments or
persons with no industrial connection or having interest totally foreign
to the context of the dispute. Thus the right may be regulated at the
instance of third parties or “innocent bystanders” if it appears that the
inevitable result of its exercise is to create an impression that a labor
dispute with which they have no connection or interest exists between
them and the picketing union or constitute an invasion of their rights.

Thus, an “innocent bystander,” who seeks to enjoin a labor strike, must

satisfy the court it is entirely different from, without any connection
whatsoever to, either party to the dispute and, therefore, its interests
are totally foreign to the context thereof.

In the case at bar, petitioner cannot be said not to have such

connection to the dispute. We find that the “negotiation, contract of
sale, and the post transaction” between Philtread, as vendor, and Siam
Tyre, as vendee, reveals a legal relation between them which, in the
interest of petitioner, we cannot ignore. To be sure, the transaction
between Philtread and Siam Tyre, was not a simple sale whereby
Philtread ceased to have any proprietary rights over its sold assets. On
the contrary, Philtread remains as 20% owner of private respondent
and 60% owner of Sucat Land Corporation which was likewise
incorporated in accordance with the terms of the Memorandum of
Agreement with Siam Tyre, and which now owns the land were subject
plant is located. This, together with the fact that private respondent
uses the same plant or factory; similar or substantially the same
working conditions; same machinery, tools, and equipment; and
manufacture the same products as Philtread, lead us to safely
conclude that private respondent’s personality is so closely linked to
Philtread as to bar its entitlement to an injunctive writ.

Univ. of the Immaculate Conception vs. Sec. of Labor, G.R. No.

178085, Sept 14, 2015

PLDT vs. Manggagawa ng Komunikasyon sa Pilipinas, G.R. No.

161783, July 13, 2005
FACTS: Petitioner Philippine Long Distance Telephone Co., Inc. (
PLDT) is a domestic corporation engaged in the telecommunications
business. Private respondent Manggagawa ng Komunikasyon sa
Pilipinas (MKP) is a labor union of rank and file employees in PLDT.

The members of respondent union learned that a redundancy program

would be implemented by the petitioner. Thereupon it filed a Notice of
Strike with the National Conciliation and Mediation Board (NCMB) on
04 November 2002. The Notice fundamentally contained the following:

UNFAIR LABOR PRACTICES, to wit:

1. PLDT’s abolition of the Provisioning Support Division, in

violation of the duty to
bargain collectively with MKP in good faith.
employees for regular jobs performed by union members, resulting in
the decimation of the union membership and in the denial of the right
to self-organization to the concerned employees.
4. PLDT’s gross violation of the legal and CBA provisions on
overtime work and
compensation.
5. PLDT’s gross violation of the CBA provisions on promotions
and job grade re-
evaluation or reclassification.
On 11 November 2002, another Notice of Strike was filed by the
private respondent, which contained the following: UNFAIR LABOR
PRACTICES, to wit: PLDT’s alleged restructuring of its GMM
Operation Services.
Petitioner, however, challenged the union’s legitimacy and refused to
bargain with respondent. Subsequently petitioner filed with the (BLR),
Department of Labor and Employment, a petition for cancellation of
respondent’s certificate of registration.
For its part, respondent filed with the (NCMB), National Capital Region,
a notice of strike. Respondent alleged that petitioner’s refusal to
bargain constitutes unfair labor practice. Despite several conferences
and efforts of the designated conciliator-mediator, the parties failed to
reach an amicable settlement.
Respondent staged a strike.

A number of conciliation meetings, conducted by the NCMB, National

Capital Region, were held between the parties. However, these efforts
proved futile.

On 23 December 2002, the private respondent staged a strike. On 31

December 2002, three hundred eighty three (383) union members
were terminated from service pursuant to PLDT’s redundancy program
.

On 02 January 2003, the Secretary, Patricia Sto. Tomas, issued an

Order[4] in NCMB- NCR-NS-11-405-02 and NCMB-NCR-NS-11-412-
02. Portions of the Order are reproduced hereunder:

xxx Accordingly, the strike staged by the Union is hereby enjoined. All
striking workers are hereby directed to return to work within twenty four
(24) hours from receipt of this Order, except those who were
terminated due to redundancy. The employer is hereby enjoined to
accept the striking workers under the same terms and conditions
prevailing prior to the strike. The parties are likewise directed to cease
and desist from committing any act that might worsen the situation. xxx

ISSUE: WHETHER THE SUBJECT ORDERS OF THE SECRETARY

OF THE DOLE EXCLUDING FROM THE RETURN-TO-WORK
ORDER THE WORKERS DISMISSED DUE TO THE REDUNDANCY
PROGRAM OF PETITIONER, ARE VALID OR NOT.

RULING: Valid. . . . Assumption of jurisdiction over a labor dispute, or

as in this case the certification of the same to the NLRC for compulsory
arbitration, always co-exists with an order for workers to return to work
immediately and for employers to readmit all workers under the same
terms and conditions prevailing before the strike or lockout.

Time and again, this Court has held that when an official bypasses the
law on the asserted ground of attaining a laudable objective, the same
will not be maintained if the intendment or purpose of the law would be
defeated.

One last piece. Records would show that the strike occurred on 23
December 2002. Article 263(g) directs that the employer must readmit
all workers under the same terms and conditions prevailing before the
strike. Since the strike was held on the aforementioned date, then the
condition prevailing before it, which was the condition present on 22
December 2002, must be maintained.

Undoubtedly, on 22 December 2002, the members of the private

respondent who were dismissed due to alleged redundancy were still
employed by the petitioner and holding their respective positions. This
is the status quo that must be maintained.

Capitol Medical Center vs. Trajano, G.R. No. 155690, June 30,
2005
FACTS: Petitioner is a hospital with address at Panay Avenue corner
Scout Magbanua Street, Quezon City. Upon the other hand,
Respondent is a duly registered labor union acting as the certified
collective bargaining agent of the rank-and-file employees of petitioner
hospital.

Respondent sent petitioner a letter requesting a negotiation of their

Collective Bargaining Agreement (CBA).
Former Labor Secretary Leonardo A. Quisumbing, now Associate ISSUE: whether or not the public respondent acted with grave abuse of
Justice of this Court, issued an Order assuming jurisdiction over the discretion amounting to lack or excess of jurisdiction in assuming
labor dispute and ordering all striking workers to return to work and the jurisdiction over subject labor dispute.
management to resume normal operations, thus:
HELD: YES, the petition is impressed with merit.
xxx all striking workers are directed to return to work within twenty-four
(24) hours from Art. 263, paragraph (g) of the Labor Code, provides:
the receipt of this Order and the management to resume normal
operations and accept (g) When, in his opinion, there exist a labor dispute causing or likely to
back all striking workers under the same terms and conditions cause a strike or lockout in an industry indispensable to the national
prevailing before the interest, the Secretary of Labor and Employment may assume
strike. Further, parties are directed to cease and desist from jurisdiction over the dispute and decide it or certify the same to the
committing any act that may Commission for compulsory arbitration . . .
exacerbate the situation.
The Labor Code vests in the Secretary of Labor the discretion to
Moreover, parties are hereby directed to submit within 10 days from determine what industries are indispensable to the national interest.
receipt of this Order Accordingly, upon the
proposals and counter-proposals leading to the conclusion of the
collective bargaining
agreement in compliance with aforementioned Resolution of the Office
as affirmed by the
Supreme Court. xxx
ISSUE: Whether or not Secretary of Labor cannot exercise his powers
under Article 263 (g) of the Labor Code without observing the
requirements of due process.

RULING: The discretion to assume jurisdiction may be exercised by

the Secretary of Labor and Employment without the necessity of prior
notice or hearing given to any of the parties. The rationale for his
primary assumption of jurisdiction can justifiably rest on his own
consideration of the exigency of the situation in relation to the national
interests.

xxx In labor disputes adversely affecting the continued operation of

such hospitals, clinics or medical institutions, it shall be the duty of the
striking union or locking-out employer to provide and maintain an
effective skeletal workforce of medical and other health personnel,
whose movement and services shall be unhampered and unrestricted,
as are necessary to insure the proper and adequate protection of the
life and health of its patients, most especially emergency cases, for the
duration of the strike or lockout. In such cases, therefore, the Secretary
of Labor and Employment is mandated to immediately assume, within
twenty-four (24) hours from knowledge of the occurrence of such a
strike or lockout, jurisdiction over the same or certify it to the
Commission for compulsory arbitration. For this purpose, the
contending parties are strictly enjoined to comply with such orders,
prohibitions and/or injunctions as are issued by the Secretary of Labor
and Employment or the Commission, under pain of immediate
disciplinary action, including dismissal or loss of employment status or
payment by the locking-out employer of backwages, damages and
other affirmative relief, even criminal prosecution against either or both
of them.

The foregoing notwithstanding, the President of the Philippines shall

not be precluded from determining the industries that, in his opinion,
are indispensable to the national interest, and from intervening at any
time and assuming jurisdiction over any such labor dispute in order to
settle or terminate the same.xxx

Phimco vs. Brillantes, G.R. No. 120751, March 17, 1999

FACTS: On March 9, 1995, the private respondent, Phimco Industries
Labor Association (PILA), duly certified collective bargaining
representative of the daily paid workers of the petitioner PHIMCO filed
a notice of strike with the NCMB against PHIMCO, a corporation
engaged in the production of matches, after a deadlock in the
collective bargaining and negotiation. Parties failed to resolve their
differences PILA (during the conciliation conferences), composed of
352 members, staged a strike.

PHIMCO sent notice of termination to some 47 workers including

several union officers.

Secretary Brillantes assumed jurisdiction over the labor dispute; issued

a return-to-work order.

Hence, petitioner files this petition.

determination by the Secretary of Labor that such industry is
indispensable to the national interest, he will assume jurisdiction over
the labor dispute in the said industry. 8 This power, however, is not
without any limitation.
It stressed in the case of Free telephone Workers Union vs. Honorable
Minister of Labor and Employment, et al., 10 the limitation set by the
legislature on the power of the Secretary of Labor to assume
jurisdiction over a labor dispute, thus:
xxx cannot be any clearer, the coverage being limited to “strikes or
lockouts adversely affecting the national interest. 11
In this case at bar, however, the very admission by the public
respondent draws the labor dispute in question out of the ambit of the
Secretary’s prerogative, to wit.
Striking employees continued holding a strike until 12 September 1996
, claiming that they had no knowledge that the Secretary of Labor
already assumed jurisdiction over the pending labor dispute as they
were not able to receive a copy of the AJO.
The Secretary of Labor issued another Order directing all the striking
employees to return to work and the petitioner FEU-NRMF to accept
them under the same terms and conditions prevailing before the strike.
A Return to Work Agreement was executed by the disputing parties.
Subsequently, petitioner FEU-NRMF filed a case before the NLRC,
contending that respondent union staged the strike in defiance of the
AJO, hence, it was illegal. LA declared the strike illegal and allowed
dismissal of union

While the case at bar appears on its face not to fall within the strict
categorization of cases imbued with “national interest”, this office
believes that the obtaining circumstances warrant the exercise of the
powers under Article 263 (g) of the Labor Code, as amended. 12

The private respondent did not even make any effort to touch on the
indispensability of the match factory to the national interest. It must
have been aware that a match factory, though of value, can scarcely
be considered as an industry “indispensable to the national interest” as
it cannot be in the same category as “generation and distribution of
energy, or those undertaken by banks, hospitals, and export-oriented
industries.” 13 Yet, the public respondent assumed jurisdiction
thereover.

To uphold the action of the public respondent under the premises

would be stretching too far the power of the Secretary of Labor as
every case of a strike or lockout where there are inconveniences in the
community, or work disruptions in an industry though not indispensable
to the national interest, would then come within the Secretary’s power.
It would be practically allowing the Secretary of Labor to intervene in
any Labor dispute at his pleasure.

This is precisely why the law sets and defines the standard: even in the
exercise of his power of compulsory arbitration under Article 263 (g) of
the Labor Code, the Secretary must follow the law.

FEU-NRMF vs FEU-NRMF Employees Association, G.R. No.

168362, October 12, 2006
FACTS: In 1994, petitioner FEU-NRMF (a medical institution
organized and existing under the Philippine laws), and respondent
union (a legitimate labor organization and is the duly recognized
representative of the rank and file employees of petitioner), entered
into a CBA that will expire on 30 April 1996. In view of the forthcoming
expiry, respondent union sent a letter-proposal to petitioner FEU-
NRMF stating their economic and non-economic proposals for the
negotiation of the new CBA.

Petitioner FEU-NRMF rejected respondent union’s demands and

proposed to maintain the same provisions of the old CBA reasoning
that due to financial constraints, it cannot afford to accede to a number
of their demands. In an effort to arrive at a compromise, subsequent
conciliation proceedings were conducted before the NCMB, but the
negotiation failed.

Respondent union filed a Notice of Strike before NCMB on the ground

of bargaining deadlock. Union staged a strike.

Petitioner FEU-NRMF filed a Petition for the Assumption of Jurisdiction

or for Certification of Labor Dispute with the NLRC, underscoring the
fact that it is a medical institution engaged in the business of providing
health care for its patients. Secretary of Labor granted the petition and
an Order assuming jurisdiction over the labor dispute was issued,
thereby prohibiting any strike or lockout and enjoining the parties from
committing any acts which may exacerbate the situation.

On September 6, 1996, Francisco Escuadra, the NLRC process server

, certified that, on September 5, 1996 at around 4:00 P.M., he
attempted to serve a copy of the Assumption of Jurisdiction Order (
AJO) to the union officers but since no one was around at the strike
area, he just posted copies of the said Order at several conspicuous
places within the premises of the hospital.
officers for conducting the strike in defiance of the AJO. Respondent
union filed an Appeal before the NLRC. NLRC affirmed in toto the
Decision of the LA. Respondent union filed MR, it was denied.
Respondent union brought a Petition for Certiorari before CA. CA
granted the Petition and reversed the Resolutions of NLRC. Petitioner
filed MR but it was denied. Hence this petition.
ISSUE: Whether the service of the AJO was validly effected by the
process server so as to bind the respondent union and hold them liable
for the acts committed subsequent to the issuance of the said Order.
RULING: No. The process server resorted to posting the Order when
personal service was rendered impossible since the striking employees
were not present at the strike area. This mode of service, however, is
not sanctioned by either the NLRC Revised Rules of Procedure or the
Revised Rules of Court.
return-to-work orders of the Secretary of Labor after he has assumed
jurisdiction is a valid ground for the loss of employment status of any
striking union officer or member. Employment is a property right of
which one cannot be deprived of without due process. Due process
here would demand that the respondent union be properly notified of
the Assumption of Jurisdiction Order of the Secretary of Labor
enjoining the strike and requiring its members to return to work. Thus,
there must be a clear and unmistakable proof that the requirements
prescribed by the Rules in the manner of effecting personal or
substituted service had been faithfully complied with. Merely posting
copies of the AJO does not satisfy the rigid requirement for proper
service outlined by the above stated rules. Needless to say, the
manner of service made by the process server was invalid and
irregular. Respondent union could not therefore be adjudged to have
defied the said Order since it was not properly apprised

The pertinent provisions of the NLRC Revised Rules of Procedure

read:

“Section 6. Service of Notices and Resolutions.

(a) Notices or summons and copies of orders, shall be served on the
parties to the case personally by the Bailiff or duly authorized public
officer within 3 days from receipt thereof or by registered mail;
Provided that in special circumstances, service of summons may be
effected in accordance with the pertinent provisions of the Rules of
Court; Provided further, that in cases of decisions and final awards,
copies thereof shall be served on both parties and their counsel or
representative by registered mail; Provided further, that in cases where
a party to a case or his counsel on record personally seeks service of
the decision upon inquiry thereon, service to said party shall be
deemed effected upon actual receipt thereof; Provided finally, that
where parties are so numerous, service shall be made on counsel and
upon such number of complainants, as may be practicable, which shall
be considered substantial compliance with Article 224(a) of the Labor
Code, as amended.”

An Order issued by the Secretary of Labor assuming jurisdiction over

the labor dispute is not a final judgment for it does not dispose of the
labor dispute with finality. Consequently, the rule on service of
summons and orders, and not the proviso on service of decisions and
final awards, governs the service of the Assumption of Jurisdiction
Order.

Under the NLRC Revised Rules of Procedure, service of copies of

orders should be made by the process server either personally or
through registered mail. However, due to the urgent nature of the AJO
and the public policy underlying the injunction carried by the issuance
of the said Order, service of copies of the same should be made in the
most expeditious and effective manner, without any delay, ensuring its
immediate receipt by the intended parties as may be warranted under
the circumstances. Thus, personal service is the proper mode of
serving the AJO.

Personal service effectively ensures that the notice desired under the
constitutional requirement of due process is accomplished. If, however,
efforts to find the party concerned personally would make prompt
service impossible, service may be completed by substituted service,
that is, by leaving a copy, between the hours of eight in the morning
and six in the evening, at the party’s or counsel’s residence, if known,
with a person of sufficient age and
discretion then residing therein (RULE 12 of Rev Rules of Court).

Substituted service derogates the regular method of personal service.

It is therefore required that statutory restrictions for effecting
substituted service must be strictly, faithfully and fully observed. Failure
to comply with this rule renders absolutely void the substituted service
along with the proceedings taken thereafter. The underlying principle of
this rigid requirement is that the person, to whom the orders, notices or
summons are addressed, is made to answer for the consequences of
the suit even though notice of such action is made, not upon the party
concerned, but upon another whom the law could only presume would
notify such party of the pending proceedings.

In the case at bar, presumption of receipt of the copies of the

Assumption of Jurisdiction Order AJO could not be taken for granted
considering the adverse effect in case the parties failed to heed to the
injunction directed by such Order. Defiance of the assumption and
thereof. Accordingly, the strike conducted by the respondent union was ASIDE.
valid under the circumstances.
OWWA vs. Chavez, G.R. No. 169802, June 8, 2007
Union of Filipro Employees vs. NLRC, G.R. No. 91025, December FACTS: OWWA traces its beginnings to 1 May 1977, when the
19, 1990 Welfare and Training Fund for Overseas main objective, inter alia, of
FACTS: On June 22, 1988, the petitioner Union of the Filipro providing social and welfare services to OFW, including insurance
Employees, the sole and exclusive bargaining agent of all rank-and-file coverage, social work, legal and placement assistance, cultural and
employees of Nestle Philippines, (private respondent) filed a Notice of remittances services, and the like.
Strike at the DOLE raising the issues of CBA deadlock and unfair labor
practice. Private respondent assailed the legal personality of the On 1 May 1980, PD 1694 was signed into law, formalizing the
proponents of the said notice of strike to represent the Nestle operations of a comprehensive Welfare Fund (Welfund), as authorized
employees, before the NCMB. This notwithstanding, the NCMB and created under Letter of Instructions No. 537. On 16 January 1981,
proceeded to invite the parties to attend the conciliation meetings and PD 1809 was promulgated, amending certain provisions of PD 1694.
to which private respondent failed to attend contending that it will deal Subsequently, EO 126 was passed renaming the Welfare Fund as the
only with a negotiating panel duly constituted and mandated in OWWA. On January 9, 2004, as there was yet no formal OWWA
accordance with the UFE Constitution and By-laws. Thereafter, structure duly approved by the DBM and CSC, the OWWA Board of
Company terminated from employment all UFE Union officers, and all Trustees passed
the members of the negotiating panel for instigating and knowingly
participating in a strike staged at the Makati, Alabang, Cabuyao and
Cagayan de Oro on September 11, 1987 without any notice of strike
filed and a strike vote obtained for the purpose. The union filed a
complaint for illegal dismissal. LA upheld the validity of the dismissal;
NLRC en banc affirmed. Subsequently, company concluded separate
CBAs with the general membership of the union at Cebu/Davao and
Cagayan de Oro units; Assailing the validity of these agreements, the
union filed a case of ULP against the company with the NLRC-NCR
Arbitration Branch Efforts to resolve the dispute amicably were taken
by the NCMB but yielded negative result. Petitioner filed a motion
asking the Secretary of Labor to assume jurisdiction over the dispute of
deadlock in collective bargaining between the parties. On October 28,
1988, Labor Secretary Franklin Drilon “certified” to the NLRC the said
dispute between the UFE and Nestle, Philippines.. which reads as
follows: xxx “The NLRC is further directed to call all the parties
immediately and resolve the CBA deadlock within twenty (20) days
from submission of the case for resolution.” Second Division of the
NLRC promulgated a resolution granting wage increase and other
benefits to Nestle’s employees, ruling on non-economic issues, as well
as absolving the private respondent of the Unfair Labor Practice
charge. Petitioner finds said resolution to be inadequate and
accordingly, does not agree therewith. It filed a motion for
reconsideration, denied. Hence, this petition.

ISSUE: WON WHETHER OR NOT THE SECOND DIVISION OF THE

NLRC ACTED WITHOUT JURISDICTION IN RENDERING THE
ASSAILED RESOLUTION, THE SAME BEING RENDERED ONLY BY
A DIVISION OF THE PUBLIC RESPONDENT AND NOT BY EN BANC
;

HELD: This case was certified on October 28, 1988 when existing
rules prescribed that, it is incumbent upon the Commission en banc to
decide or resolve a certified dispute. However, R.A. 6715 took effect
during the pendency of this case. Aside from vesting upon each
division the power to adjudicate cases filed before the Commission,
said Act further provides that the divisions of the Commission shall
have exclusive appellate jurisdiction over cases within their respective
territorial jurisdiction. Section 5 of RA 6715 provides as follows: xxxx
The Commission may sit en banc or in five (5) divisions, each
composed of three (3) members. The Commission shall sit en banc
only for purposes of promulgating rules and regulations governing the
hearing and disposition of cases before any of its divisions and
regional branches and formulating policies affecting its administration
and operations. The Commission shall exercise its adjudicatory and all
other powers, functions and duties through its divisions. xxxx In view of
the enactment of Republic Act 6715, the aforementioned rules
requiring the Commission en banc to decide or resolve a certified
dispute have accordingly been repealed. Confirmed in Administrative
Order No. 36 (Series of 1989) promulgated by the Secretary under his
delegated rule-making power. Moreover, it is to be emphasized and it
is a matter of judicial notice that since the effectivity of R.A. 6715,
many cases have already been decided by the 5 divisions of the NLRC
. We find no legal justification in entertaining petitioner’s claim
considering that the clear intent of the amendatory provision is to
expedite the disposition of labor cases filed before the Commission. To
rule otherwise would not be congruous to the proper administration of
justice. ACCORDINGLY, PREMISES CONSIDERED, the petition is
DISMISSED. The Resolutions of the NLRC, dated June 5, 1989 and
August 8, 1989 are AFFIRMED, except insofar as the ruling absolving
the private respondent of unfair labor practice which is declared SET
Resolution No. 001, Series of 2004, depicting the organizational
structure and staffing pattern of the OWWA.
On March 24, 2004, DBM Secretary Emilia T. Boncodin approved the
organizational structure and staffing pattern of the OWWA. In her
approval thereof, she stated that the total funding requirements for the
revised organizational structure shall be P107,546,379 for 400
positions. On May 31, 2004, an advisory was given to the officials and
employees of the OWWA that the DBM had recently approved
OWWA’s also placement staffing pattern.
On June 3, 2004, DOLE Secretary Sto. Tomas issued Administrative
Order No. 171 creating a Placement Committee to evaluate
qualifications of employees, and to recommend their appropriate
placement in the new organizational chart, functional statements and
staffing pattern of the OWWA.
Court is not convinced that respondents were able to show a clear and
unmistakable legal right to warrant their entitlement to the writ. A mere
blanket allegation that they are all officers and employees of the
OWWA without a showing of how they stand to be directly injured a
right in esse. There was no showing that Respondents are the
employees who are in grave danger of being displaced due to the
reorganization. Injunction is not a remedy to protect or enforce
contingent, abstract, or future rights; it will not issue to protect aright
not in esse and which may never arise, or to restrain an action which
did not give rise to a cause of action. Indeed, the question as to the
validity of the OWWA reorganization remains the subject in the main
case pending before the trial court. Its annulment is outside the realm
of the instant Petition.

On June 18, 2004, DOLE Acting Secretary Imson issued

Administrative Order No. 186, Series of 2004, prescribing the
guidelines on the placement of personnel in the new staffing pattern of
the OWWA. Herein respondents filed a complaint to nullify the
organizational structure with Prayer for the Issuance of a Writ of
Preliminary Injunction against petitioner OWWA and its Board of
Trustees. According to the respondents, the resulting decrease in the
number of employees due to Organizational Structure will result in the
constructive dismissal of at least 110 employees. Meanwhile, the
deployment of the regular central office personnel to the regional
offices will displace the said employees, as well as their families.
Respondents challenged the validity of the new organizational
structure of the OWWA. In fine, they contended that the same is null
and void; hence, its implementation should be prohibited.

RTC granted respondents’ prayer for a writ of preliminary injunction.

Petitioner, thru OSG and the RTC to restrain, for the meantime, the
implementation of OWWA’s reorganization to prevent injury until after
the main case is heard and decided. Petitioner, thru OSG filed the
instant petition.

ISSUE: Whether CA erred in affirming the RTC in its grant of the

assailed writ of preliminary injunction.

RULING: No. Section 1, Rule 58 of the Rules of Court, defines a

preliminary injunction as an order granted at any stage of an action
prior to the judgment or final order requiring a party or a court, an
agency or a person to refrain from a particular act or acts. It persists
until it is dissolved or until the termination of the action without the
court issuing a final injunction. To be entitled to an injunctive writ, and
an urgent and paramount necessity for the writ to prevent serious
damage. A writ of evidence required to justify the issuance of a writ of
preliminary injunction in the hearing thereon need not be conclusive or
complete.

Preliminary injunction is merely a provisional remedy, an adjunct to the

main case subject to the latter’s outcome, the sole objective of which is
to preserve the status quo until the trial court hears fully the merits of
the case. The status quo usually preserved by a preliminary injunction
is the last actual, peaceable and uncontested status which preceded
the actual controversy. The status quo ante litem is the state of affairs
which is existing at the time of the filing of the case. The trial court
must not make use of its injunctive power to alter such status. In the
case at bar, the RTC did not maintain the status quo when it issued the
writ of preliminary injunction. Rather, it effectively restored the situation
prior to the status quo, in effect, disposing the issue of the main case
without trial on the merits. What was preserved by the RTC was the
state OWWA, and the subsequent administrative orders pursuant to its
passing. The RTC forgot that what is imperative in preliminary
injunction cases is that the writ cannot be effectuated to establish new
relations between the parties.

Courts should avoid issuing a writ of preliminary injunction which would

in effect dispose of the main case without trial. In this case, the RTC
also did not maintain the status quo but restored the landscape before
the implementation of OWWA’s reorganization. In thus issuing by the
trial court. What was done by the RTC was quite simply a disposition
of the case without trial. Furthermore, we find that the RTC similarly
prejudged the validity of the issuances released by the OWWA Board
of Trustees, as well as the other governmental bodies, which approved
the organizational structure and staffing pattern of the OWWA. This
Univ. of the Immaculate Conception vs. Sec. of Labor, G.R. Nos.
151379, Jan 14, 2005
Facts: This case stemmed from the collective bargaining negotiations
between petitioner University of Immaculate Concepcion, Inc. (
UNIVERSITY) and respondent The UIC Teaching and Non- Teaching
Personnel and Employees Union (UNION). The UNION, as the
certified bargaining agent of all rank and file employees of the
UNIVERSITY, submitted its collective bargaining proposals to the latter
on February 16, 1994. However, one item was left unresolved and this
was the inclusion or exclusion of some positions in the scope of the
bargaining unit.
The UNION it filed a notice of strike on the grounds of bargaining
deadlock and ULP. During the thirty (30) day cooling-off period, two
union members were dismissed by petitioner. Consequently, the
UNION went on strike.
On January 23, 1995, the then Secretary of Labor, Ma. Nieves R.
Confessor, issued an Order assuming jurisdiction over the labor
dispute.
On March 10, 1995, the UNION filed another notice of strike, this time
citing as a reason the UNIVERSITY’s termination of the individual
respondents. The UNION alleged that the UNIVERSITY’s act of
terminating the individual respondents is in violation of the Order of the
Secretary of Labor.
On March 28, 1995, the Secretary of Labor issued another Order
reiterating the directives contained in the January 23, 1995 Order.
Hence, the UNIVERSITY was directed to reinstate the individual
respondents under the same terms and conditions prevailing prior to
the labor dispute.
The UNIVERSITY filed a MR. In the Order dated August 18, 1995,
then Acting Secretary Jose S. Brilliantes denied the MR, but modified
the two previous Orders by adding:
Anent the Union’s Motion, we find that superseding circumstances
would not warrant the physical reinstatement of the twelve (12)
terminated employees.
Hence, they are hereby ordered placed under payroll reinstatement
until the validity of their termination is finally resolved.
Issue: WON payroll reinstatement, instead of actual reinstatement, is
proper.
Held: With respect to the Secretary’s Order allowing payroll
reinstatement instead of actual reinstatement for the individual
respondents herein, an amendment to the previous Orders issued by
her office, the same is usually not allowed. Article 263(g) of the Labor
Code aforementioned states that all workers must immediately return
to work and all employers must readmit all of them under the same
terms and conditions prevailing before the strike or lockout. The phrase
“under the same terms and conditions” makes it clear that the norm is
actual reinstatement. This is consistent with the idea that any work
stoppage or slowdown in that particular industry can be detrimental to
the national interest.
In ordering payroll reinstatement in lieu of actual reinstatement, then
Acting Secretary of Labor Jose S. Brillantes said:
Anent the Union’s Motion, we find that superseding circumstances
would not warrant the physical reinstatement of the twelve (12)
terminated employees. Hence, they are hereby ordered placed under
payroll reinstatement until the validity of their termination is finally
resolved.
As an exception to the rule, payroll reinstatement must rest on special
circumstances that render actual reinstatement impracticable or
otherwise not conducive to attaining the purposes of the law.
The “superseding circumstances” mentioned by the Acting Secretary of
Labor no doubt refer to the final decision of the panel of arbitrators as
to the confidential nature of the positions of the twelve private
respondents, thereby rendering their actual and physical reinstatement
impracticable and more likely to exacerbate the situation. The payroll
reinstatement in lieu of actual reinstatement ordered in these cases,
therefore, appears justified as an exception to the rule until the validity
of their termination is finally resolved. This Court sees no grave abuse
of discretion on the part of the Acting Secretary of Labor in ordering the
same. Furthermore, the issue has not been raised by any party in this
case.
Manila Diamond Hotel Employees’ Union vs CA, G.R.No. 140518,
December 16, 2004
Facts: The Union filed a petition for a certification election, which was
dismissed by the DOLE. Despite the dismissal of their petition, the
Union sent a letter to the Hotel informing the latter of its desire to
negotiate for a collective bargaining agreement. The Hotel, however,
refused to negotiate with the Union, citing the earlier dismissal of the
Union’s petition for certification by DOLE.
Failing to settle the issue, the Union staged a strike against the Hotel.
Numerous confrontations followed, further straining the relationship
between the Union and the Hotel. The Hotel claims that the strike was
illegal and dismissed some employees for their participation in the
allegedly illegal concerted activity. The Union, on the other hand,
accused the Hotel of illegally dismissing the workers.
A Petition for Assumption of Jurisdiction under Article 263(g) of the
Labor Code was later filed by the Union before the Secretary of Labor.
Thereafter, Secretary of Labor Trajano issued an Order directing the
striking officers and members of the Union to return to work within
twenty-four (24) hours and the Hotel to accept them back under the
same terms and conditions prevailing prior to the strike.
After receiving the above order the members of the Union reported for
work, but the Hotel refused to accept them and instead filed a Motion
for Reconsideration of the Secretary’s Order.
Acting on the motion for reconsideration, then Acting Secretary of
Labor Español modified the one earlier issued by Secretary Trajano
and instead directed that the strikers be reinstated only in the payroll.
Issue: WON payroll reinstatement is proper in lieu of actual
reinstatement under Article 263(g) of the Labor Code.
Held: Payroll reinstatement in lieu of actual reinstatement is not
sanctioned under the provision of the said article.
The Court noted the difference between UST vs. NLRC and the instant
case. In UST case the teachers could not be given back their
academic assignments since the order of the Secretary for them to
return to work was given in the middle of the first semester of the
academic year.
The NLRC was, therefore, faced with a situation where the striking
teachers were entitled to a return to work order, but the university
could not immediately reinstate them since it would be impracticable
and detrimental to the students to change teachers at that point in time
.
In the present case, there is no similar compelling reason that called
for payroll reinstatement as an alternative remedy. A strained
relationship between the striking employees and management is no
reason for payroll reinstatement in lieu of actual reinstatement.
Under Article 263(g), all workers must immediately return to work and
all employers must readmit all of them under the same terms and
conditions prevailing before the strike or lockout.
The Court pointed out that the law uses the precise phrase of “under
the same terms and conditions,” revealing that it contemplates only
actual reinstatement. This is in keeping with the rationale that any work
stoppage or slowdown in that particular industry can be inimical to the
national economy.
The Court reiterates that Article 263(g) was not written to protect labor
from the excesses of management, nor was it written to ease
management from expenses, which it normally incurs during a work
stoppage or slowdown. This law was written as a means to be used by
the State to protect itself from an emergency or crisis. It is not for labor,
nor is it for management.
Portillo vs. Rudolf Lietz, G.R. No. 196539, October 10, 2012
Pacific Consultants vs. Schonfeld, G.R. No. 166920, February 19,
2007
Balite vs. SS Ventures International, Inc, G.R. No. 195109,
February 4, 2015
SMART Comm vs. Solidum, G.R. Nos. 197763/197836, December 7
, 2015
Milan vs. NLRC, G.R. No. 202961, February 4, 2015
Michelin Asia Application Center, Inc. vs Ortiz, G.R. No. 189861,
November 19, 2014
Baronda vs. Court of Appeals, G.R. No. 161006, October 14, 2015
Montero vs. Times Transportation, G.R. No. 190828, March 16,
2015
One S