COVERAGE OF COLLECTIVE BARGAINING PROCESS:

As a worker or an employee, the most ideal

situation
which could be envisioned is that he will be able to dictate the
terms and conditions of his work, even including how much he
will be paid, the manner and method by which he will work,
and such other terms and conditions. But that is not usually
the case. In practical terms, the terms and conditions of
employment are usually dictated upon by the employer at the
time of the hiring of the employee. In a sense, the contract of
employment (if ever there is one) is in the nature of a contract
of adhesion, e.g., there is already a printed form enumerating
the terms and conditions of employment and the employee
takes it or leaves it. From the time of hiring, you can already
note the inherent inequality between management and labor.
Thus, in cognizance of this inherent inequality in industrial
relations, the State has provided constitutional guarantees to
correct
the
same.
Who may join labor organizations?
Art. 249, Title V- COVERAGE- All persons employed in
commercial, industrial and agricultural enterprises, including
employees of government owned or controlled corporations
without original charters established under the Corporation
Code, as well as employees of religious, charitable, medical or
educational institutions whether operating for profit or not,
shall have the right to self-organization and to form, join or
assist labor unions for purposes of collective bargaining:
PROVIDED however, THAT Supervisory employees shall not be
eligible for membership in a labor union of the rank and file
employees but may form, join or assist separate labor unions of
their own. Managerial employees shall not be eligible to form,
join or assist any labor unions for purpose of collective
bargaining. Alien employees with valid working permits issued
by the Department may exercise the right to self-organization
and join or assist labor unions for purposes of collective
bargaining if they are nationals of a country which grants the
same or similar rights to Filipino workers, as certified by the
Department of Foreign Affairs. (Rule II, Department Order 4003)

All other workers, including ambulant, intermittent and

other workers, the self-employed, rural workers and those
without any definite employers may form labor organizations for their
mutual aid and protection and other legitimate purposes except collective
bargaining.
It must be noted that only registered legitimate labor unions have the
right to represent their members for collective bargaining and other
purposes; while the workers association can represent their members for
purposes other than collective bargaining.

DEFINITION OF
MEMBERSHIP:

EMPLOYEE

FOR

PURPOSES

OF

UNION

Any employee, whether employed for a definite period or

not, shall, beginning on his first day of service, be considered
an employee for purposes of membership in any labor union.
(Art. 283(c))
Security guards can now join a labor organization. While
under the old rules, security guards were barred from joining a
labor organization of the rank and file, but the present law,
they may now freely join a labor organization of the rank and
file or that of a supervisory union depending on their rank.
(MERALCO vs. Secretary of Labor, GR No. 91902, 20 May 1991)
The Implementing rules of RA 6715 insofar as they disqualify
security guards from joining a rank and file organization, are
null and void fir not being germane to the object and purposes
of EO 111 and RA 6715.
WHO CANNOT JOIN A LABOR UNION?
1. Managerial employees by necessary implication
2. Employee-members of a cooperative while employees
who are at the same time members of the cooperative
cannot invoke the right to collective bargaining
because an owner cannot bargain with himself or his
co-owners. However, insofar as it involves cooperatives
with employees who are not members or co-owners
thereof, certainly such employees are entitled to
exercise the rights of all workers to organization,
collective bargaining, negotiations and others as are
enshrined in the Constitution and existing laws of the
country. (Cooperative Rural Bank of Davao City Inc. vs.
Ferre-Calleja, 165 SCRA 725)

3. Confidential Employees ineligible to join a union, under

confidential
employee
doctrine;
Exception:
Confidential employees without access to confidential
labor relations information.
Examples: Confidential employees (such as division
secretaries, staff of general management, staff of the
personnel department, secretaries of audit, EDP ,
financial systems) are ineligible to form, assist or join
a labor union because by the nature of their functions,
they assist and act in a confidential capacity to or have
access to confidential matters, of persons who exercise
managerial functions in the field of labor relations, and
the union might not be assured of their loyalty in view
of evident conflict of interests. (Philips Industrial Dev.
Inc. vs. NLRC, GR No. 88957, 25 June 1992) By the
nature of their functions, legal secretaries fall under
the category of confidential employees. (Metrolab
Industries Inc. vs. Confesor, GR No. 108855, 28 Feb.
1996)
Also
confidential
employees
performing
managerial functions cannot join unions. (MetroDrug
Inc. vs. Secretary of Labor and Employment, GR No.
109204, 18 May 1994)
However, if the access to confidential labor relations
information is merely incidental in the performance of
their functions, they do not have to be treated as
confidential employees, thus eligible and have the
right to form or join a union. (SMC Supervisors and
Exempt Employees Union vs. Hon. Laguesma, 277 SCRA
370).
4. Alien employees without valid working permits cannot
form or join a
union. Assuming they possess valid
working permits, still they are not allowed to enjoy right
to self-organization if theyare nationals of a country that
does not grant the same right to Filipino workers. (Rule
II, Dept. Order 40-03)
RIGHT TO SELF-ORGANIZATION IN THE PUBLIC SECTOR
Employees of all branches, subdivisions, instrumentalities
and agencies of government, including government-owned or
controlled corporations with original charters, except members
of the ARMED FORCES OF THE PHILIPPINES, POLICE OFFICERS,
POLICEMEN, FIREMEN, and JAIL GUARDS (Sec. 4, EO 180), may

form, join or assist organizations, associations and/or

federations of exclusively government employees of their own
choosing for the furtherance and the protection of their
interests (Sec. 1, Rule II, EO 180). High level employees whose
functions are normally considered as policy-making or
managerial or whose duties are of a highly confidential nature
shall not be eligible to join the organization of rank and file
government employees (Sec. 3, EO 180)
Government employees may, therefore through their
union or associations, either petition Congress for the
betterment of the terms and conditions of employment which
are within the ambit of legislation or negotiate with the
appropriate government agencies for the improvement of
those which are not fixed by law. )SSS vs. CA 176 SCRA 686)
If there be any unresolved grievances, the dispute may
be referred to the Public Sector-Labor Management Council for
appropriate action. But employees in the civil service may not
resort to strikes, walkouts and other temporary work
stoppages like workers in the private sector, to pressure the
Government to accede in their demands as so provided under
Sec. 4, Rule III of the Rules and Regulations to Govern the
Exercise of the Right of Government Employees to SelfOrganization.
Constitutional and statutory basis;
Concept and rationale of collective bargaining
Consti., Art. 13, sec. 3. The State shall afford full
protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of
employment opportunities for all.
It shall guarantee the rights of all workers to selforganization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike
in accordance with law. They shall be entitled to security
of tenure, humane conditions of work, and a living wage.
They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be
provided by law.

The State shall promote the principle of shared

responsibility between workers and employers, and the
preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith
to foster industrial peace.
The State shall regulate the relations between the
workers and employers, recognizing the right of labor to
its just share in the fruits of production, and the right of
entrepreneurs to reasonable returns on investments, and
to expansion and growth.
Art. 211 (a), Labor Code cf. Art. 255, LC
Art. 211. Declaration of policy. -- It is the policy of the
State: (a) to promote and emphasize the primacy of free
collective bargaining and negotiations, as modes of settling labor
or industrial dispute.
Art. 255. Exclusive bargaining representation and
workers participation in policy and decision-making. -The labor organization designated or selected by a majority of
the employees in an appropriate bargaining unit shall be the
exclusive representative of the employees in such unit for the
purpose of collective bargaining. However, an individual
employee or a group of employees shall have the right at any
time to present grievances to their employer.
Any provision of the law to the contrary notwithstanding,
workers shall have the right, subject to such rules and
regulations as the Secretary of Labor and Employment may
promulgate, the participate in policy and decision-making
processes of the establishment where they are employed insofar
as said processes will directly affect their rights, benefits and
welfare. For this purpose, workers and employers may form
labor-management councils: Provided, that the representatives of
the workers in such labor-management councils shall be elected
by at least the majority of all employees in said establishment.
Kiok Loy vs. NLRC, 141 SCRA 179 (1986)
Collective bargaining which is defined as negotiations
towards a collective agreement, is one of the democratic
frameworks under the New Labor Code, designed to stabilize the
relation between labor and management, and to create a climate
of sound and stable industrial peace. It is a mutual resonsibility

of the employer and the union, and is characterized as a legal

obligation. So much so that Art. 249 (g) of the Labor Code
makes it a ULP for the employer to refuse to meet and convene
promptly and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours of work
and all other terms and conditions of employment, including
proposals for adjusting any grievance or question arising under
such an agreement, and executing a contract incorporating such
an agreement, if requested by either party.
Caltex Refinery Empl. Union vs. Brillantes, 279 SCRA 218
(1997)
Bargaining is not equivalent to an adversarial litigation
where rights and obligations are delineated and remedies
applied. It is simply a process of finding a reasonable solution to
a conflict and harmonizing opposite positions into a fair and
reasonable compromise.
Definition:
Collective bargaining is a procedure looking towards the
execution of a labor contract between the employer and the
bargaining agent, regarding wages, hours of work and other
terms and conditions of employment.

2. PARTIES TO COLLECTIVE BARGAINING

Basically: (a) the employer, as represented by the
members of the Management panel; and (b) the employees, as
represented by the union certified as the exclusive bargaining
agent/representative in a certification election called for such
purpose.
Note 1: The duty to bargain collectively exists
only
between
the
employer
and
the
employees. Hence, in the case of Planters Products
Employees Union vs. Planters Products where a
company employed an independent contractor who
had his own employees assigned to the plant, the
unionized contract workers cannot demand for
collective bargaining with the company, inasmuch as
they are employees of the contractor and not of the
company.

Note
2:
As
representative:

regards

the

bargaining

(a) The union representative need not be an

employee in the unit. However, the union officer
must an employee in the unit. (Example: Union
which is certified as the exclusive bargaining agent
may be represented by the officers of the federation
to which it is affiliated, during the collective
bargaining negotiations.)
(b) The union that gets the majority vote in a
certification election, once it is certified as the
exclusive bargaining agent, does not act for its
members alone. It represents all the employees in
the bargaining unit. (Mactan Workers Union vs.
Aboitiz).
2.1

Definition of the appropriate bargaining unit Dept. Order No. 9 (April 1997), Rule I, Sec. 1 (q) -

Bargaining unit refers to a group of employees sharing mutual

interests within a given employer unit, comprised of all or less than all
of the entire body of employees in the employer unit or any specific
occupational or geographical grouping within such employer unit.
Golden Farms vs. Sec. of Labor, 234 SCRA 517 - A
bargaining unit has been defined as a group of employees
of a given employer, comprised of all or less than all of the
entire body of employees, which the collective interest of all
of the employees indicate to be best suited to serve the
reciprocal rights and duties of the parties under the
collective bargaining provision of the law.
NOTE:
HOW TO
BARGAINING UNIT

DETERMINE

THE

APPROPRIATE

San Miguel Corp. vs. Laguesma, 236 SCRA 595

The fundamental factors in determining the appropriate collective
bargaining unit are: (1) the will of the employees [Globe doctrine]; (2)
the affinity and unity of the employees interests, such as the
substantial similarity of work and duties, or of compensation and
working conditions [Substantial or Mutual Interests rule; community of

interest]; (3) prior collective bargaining history; and (4) similarity of

employment status.
Toyota Motor Phils. vs. Toyota MP Labor Union, 268 SCRA 571
(1997)
According to Rothenberg, an appropriate bargaining unit is a
group of employees of a given employer, composed of all or
less than all of the employees which the collective interest of
all of the employees indicate to be best suited to serve the
reciprocal rights and duties of the parties under the
collective bargaining provision of the law. In Belyca
Corporation vs. Ferrer-Calleja, we defined the bargaining unit
as the legal collectivity for purposes of collective
bargaining
purposes
whose
members
have
substantially mutual bargaining interests in terms
and conditions of employment as will assure to all
employees their collective bargaining rights.
2.2

Generally -- community of interest

The determinative factor in finding out what kind of workers
may properly constitute an appropriate bargaining unit is the
SUBSTANTIAL SIMILARITY OF WORK AND DUTIES. The most
efficatious bargaining unit is one which is comprised of
workers
enjoying
COMMUNITY
OR
MUTUALITY
OF
INTERESTS. This is so because the basic test of a bargaining
units acceptability is whether it will best assure to all the
employees concerned of the exercise of their collective
bargaining rights.

Phil. Land-Air-Sea Labor Union vs. CIR, 110 Phil. 176

In making judgments about community of interests, the
Board will look to the following factors: (1) similarity in scale
and manner of determining earnings; (2) similarity in
employments benefits, hours of work, and other terms and
conditions of employment; (3) similarity in the kind of work
performed; (4) similarity in the qualifications, skills and
training of employees; (5) frequency of contact or
interchange between the employees; (6) geographic
proximity; (7) continuity or integration of production
processes; (8) common supervision and determination of
collective bargaining; (9) history of collective bargaining;
(10) desires of the affected employees; and (11) extent of
union organization.

Pagkakaisa ng Manggagawa sa Triumph vs. Calleja, 181 SCRA

119
Where the supervisory employees sought to be represetned
by the union are actually NOT INVOLVED in policy making,
and their recommendatory powers are not even instantly
effective since they are subject to review by at least three
(3) managers (dept. mgr., personnel mgr. And general
manager), then it is evident that these employees doe not
possess managerial status.
The fact that their work designations are either
managerial or supervisory is of no moment,
considering that it is the nature of their functions and
NOT SAID NOMENCLATURES which determines their
respective status.
A careful examination of the records of this case reveals no
evidence that rules out the commonality or community of
interest among the rank-and-file members of the petitioners,
and the herein declared rank-and-file members of the
respondent union. Instead of forming another bargaining
unit, the law requires them to be members of the existing
one. The ends of unionism are better served if all the
rank-and-file members with substantially the same
interests and who invoke their right to selforganization are part of a single unit so they can deal
with their ER with JUST ONE AND YET POTENT VOICE.
The Ees bargaining power with management is
strengthened thereby.
San Miguel vs. Laguesma, 236 SCRA 595
Facts: Petition for CE of North Luzon Magnolia Sales Force,
seeking to represent all regular sales personnel of Magnolia
in the North Luzon area. This was opposed by the company,
on the ground of prior bargaining history, re: each sales
office/plant/warehouse to be considered a separate
bargaining unit.
Decision: Existence of prior bargaining history is neither
decisive nor conclusive in determination of an appropriate
bargaining unit, the more decisive being the mutuality or
community of interest in terms of the employment
conditions and type of work performed. .

contra: SMC Employees Union vs. Confesor, 262 SCRA

81 [1996]
Spin-off of Magnolia and San Miguel Foods Companies from
the San Miguel Corporation as separate corporate entities.
Existing CBA included all four divisions. During the renewal
or renegotiation for two years on the economic provisions,
spin-off corporations were already in existence. The Union
insisted that the employees of the spun-off corporations
were still to be considered as part of the appropriate
bargaining unit.
Decision: Considering the spin-off, the companies would
consequently have their respective and distinctive concerns
in terms of the nature of work, wages, hours of work and
other conditions of employment. The interests of the
employees in different companies would perforce differ.
SMC is engaged in beer manufacturing; Magnolia with
manufacturing and processing of dairy products; SM Foods
with production of feeds and processing of chicken. The
nature of the products and sales of business may require
diff. Skills which must necessarily be commensurated by
different compensation packages; different volumes of work
and working conditions. It would then be best to have
separate bargaining units for different companies
where the employees can bargain separately accdg.
to their needs and working conditions.
2.3

Globe Doctrine -- desire of employees

The desires of the employees are relevant to the
determination of the appropriate bargaining unit, but not
controlling under this jurisdiction. It is only when, all other
considerations being equally balanced, the determining
factor would be the desire of the employees themselves.
Globe Machine, 3 NLRB 294 [1937]
Three AFL unions representing different categories of
employees (metal polishers and buffers; punch press
operators; others) of Globe Machine filed petitions for CE.
Another union (UAW) intervened, claiming representation of
all production and maintenance workers.

Three unions contended that it would be most feasible to

have separate bargaining units, and that there was a
previous bargaining history of separate units.
UAW contended that the interrelational and interdependence
of the various units constitute proof of feasibility of one
company-one union policy, and was shown by negotiation of
plant-wide agreement (not CBA).
NLRB ruled that in such a case where all other
considerations being equally balanced, the determining
factor would be the desire of the employees themselves.
2.4 One Company - One Union; modifications under Rep.
Act. No. 6715
LECTURE:
The proliferation of unions in a single employer unit is
discouraged as a matter of policy unless there are
compelling reasons which would deny a certain class of
employees the right to self-org. for purposes of collective
bargaining. Thus: Managerial employees are prohibited by
law to join, assist or form labor union; supervisory are
prohibited from joining rank-and-file.
Article 245, Labor Code. Ineligibility of managerial
employees to join any labor organization; right of
supervisory employees. Managerial employees are not
eligible to join, assist or form any labor organization.
Supervisory employees shall not be eligible for membership
in a labor organization of the rank-and-file employees, but
may join, assist or form separate labor organizations of their
own.
Philtranco vs. BLR, 174 SCRA 388
It is natural in almost all fairly sized corporations to
have different groups of workers discharging
different functions. No company could possibly have
all employees performing exactly the same work.
Variety of tasks is to be expected. It would not be in the
interest of sound mgmt.-labor relations if each group of
employees were to be allowed to form their own separate
bargaining unit. Certainly there is commonality in
interests of all workers: they are all interested in the

progress of their company and in each worker

sharing the fruits of their endeavors equitably and
generously. While there may be differences in the
nature of their individual jobs, such difference is not
substantial as to warrant the formation of separate
unions.
Indophil Textile Mills Workers Union vs. Calica, 205
SCRA 697
Acrylic Indophil Corporation cannot be considered an
extension of Indophil Corporation, as to cover in one
bargaining unit all employees thereof. Note separate
corporate entities: doctrine of piercing the veil of corporate
entity not applied.
Knitjoy Manufacturing vs. Ferrer-Calleja, 214 SCRA
174
Article 245 of Labor Code expressly allows for supervisory
employees who are not performing managerial functions to
join, assist or form unions, but bars them from membership
in the rank-and-file. The provisions obviously allows more
than one union in the company.
Toyota Motor Phils. vs. Toyota MP Labor Union, 268
SCRA 571 (1997)
A labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It
cannot, for any guise or purpose, be a legitimate labor
organization, and consequently, cannot have the right to file
a petition for CE for purposes of collective bargaining. It
becomes necessary therefore, anterior to the granting of an
order allowing for a CE, to inquire into the composition of
any labor organization whenever the status of the labor org
is challenged on the basis of Art. 245 of the Labor Code.
Supervisory employees: those who, in the interest of the
employer, effectively recommend managerial actions if the
exercise of such authority is not merely routinary or clerical
in nature but require the use of independent
judgment.
In relation to:

Managerial employees: one who is vested with powers or

prerogatives to lay down and execute management policies,
including right to hire, transfer, suspend, lay-off and recall.
Villuga vs. NLRC: A managerial employee is one whose:
(a) primary duties consists of performance of work directly
related to management policies; (b) customarily and
regularly exercises discretion and independent judgment
relative thereto; (c) regularly and directly assists in the
management of the establishment; (d) does not devote 20%
of his time to work other than those described above.
Duty to bargain collectively
3.1

Defined:
Art. 252, Labor Code. Meaning of duty to bargain
collectively. -- The duty to bargain collectively means THE
PERFORMANCE OF A MUTUAL OBLIGATION TO MEET
AND CONVENE PROMPTLY AND EXPEDITIOUSLY IN
GOOD FAITH FOR THE PURPOSE OF NEGOTIATING AN
AGREEMENT WITH RESPECT TO THE WAGES, HOURS
OF WORK AND ALL OTHER TERMS AND CONDITIONS
OF EMPLOYMENT including proposals for adjusting any
grievances or questions arising under such agreement and
executing a contract incorporating such agreements if
requested by either party, but such duty does not compel
any party to agree to a proposal or to make any
concession.
Kiok Loy vs. NLRC, supra.
Sweden Ice cream company, with an already certified
union. Company given CBA proposals and request for
counter-proposal. Company ignored the request. Union
filed a case for ULP after notice of strike. NLRC for Union
and declared the proposals as the CBA.

3.2
a)

When duty to bargain exists/begins

In the absence of a CBA
Art. 251, Labor Code. Duty to bargain collectively in
the absence of collective bargaining agreements. -- In
the absence of an agreement or other voluntary
arrangement providing for a more expeditious manner of

collective bargaining, it shall be the duty of the employer

and the representatives of the employees to bargain
collectively in accordance with the provisions of this
Code.
Lakas Manggagawa vs. Marcelo, 12 Nov. 1982
It is essential to the right of a putative bargaining
agent to represet the employees that it be the delegate
of a majority of the employees, and conversely, AN
EMPLOYER
IS
UNDER
DUTY
TO
BARGAIN
COLLECTIVELY ONLY WHEN THE BARGAINING
AGENT IS REPRESENTATIVE OF THE MAJORITY OF
THE EMPLOYEES.
A natural consequence of this is that the employer
has the right to demand of the asserted bargaining
agent proof of its representation of its employees.
Having the right to demonstration of this fact, it
is not unfair labor practice for an employer to
refuse to negotiate until the asserted bargaining
agent has presented reasonable proof of majority
representation. It is necessary however that the
demand be made in good faith, and not merely as
a pretext or device for delay or evasion. The
employers right is however subject to reasonable
proof only.
b) With the existence of a CBA - only during freedom
period
Art. 253, Labor Code. Duty to bargain collectively
when there exists a collective bargaining agreement. -When there is a collective bargaining agreement, the
duty to bargain collectively shall also mean that neither
party shall terminate nor modify such agreement during
its lifetime. HOWEVER, EITHER PARTY CAN SERVE A
WRITTEN NOTICE TO TERMINATE OR MODIFY THE
AGREEMENT AT LEAST SIXTY (60) DAYS PRIOR TO
ITS EXPIRATION DATE. It shall be the duty of both
parties to keep the status quo and to continue in full
force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new
agreement is reached by the parties.

Note 1. When there is a collective bargaining

agreement, the duty to bargain collectively shall also
mean that neither party shall terminate or modify
such agreement during its lifetime.
However, either party can serve a written notice to
terminate or modify the agreement at least 60 days
prior to the expiration day.
It shall be the duty of each party to keep the
status quo and to 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.
Note 2: As regards CBA about to expire, the law
provides for an AUTOMATIC RENEWAL CLAUSE, e.g.,
that the terms and conditions of the existing CBA shall
continue to be in full force and effect during the sixtyday freedom period (Union of Filipro Ees. vs. NLRC,
192 SCRA 414), or until a new CBA is reached. Thus,
depiste the lapse of the effectivity of the old CBA, the
law considers the same as continuing in full force and
effect until a new CBA is executed. (Lopez Sugar vs.
FFW, 30 Aug. 1990)
Note 3: In both instances however, the duty to bargain
collectively is therefore an obligation of both the
employer and the employees/union.
3.3 Effect of refusal to bargain - constitutes ULP under
Art. 248 (g)
Art. 248 (g), Labor Code.
Unfair labor practices of
employers. -- To violate the duty to bargain collectively as
prescribed by this Code.
If the employer is guilty of violating the duty to bargain
collectively in good faith, the employer may be held guilty
of ULP under Art. 258 (g). Furthermore, the unions draft
CBA proposals may unilaterally be imposed upon the
employer as the collective bargaining agreement to govern
their relationship. Hence, the case of Divine Word.
Divine Word Univ. vs. NLRC, 213 SCRA 759

Petitioners contention that the Unions proposal may not

be unilaterally imposed on it on the ground that a CBA is a
contract where in the consent of both parties is
indispensable, is devoid of merit.
A similar argument has already been disregarded in the
case of KIOK LOY, where the SC upheld the order of the
NLRC declaring the unions draft CBA proposal as the
collective agreement which should govern the relationship
between the parties. That case is applicable because of
the similarities: (a) the union made a definite request to
bargain and submitted its bargaining proposals; (b) the
University made no counter-proposal whatsoever.
As stated in Kiok Loy, a companys refusal to make
counter proposals, if considered in relation to the
entire bargaining process, may indicate bad faith,
and this is especially true where the Unions request
for the counter-proposal is left unanswered. While
it is not obligatory for either party to precipitately accept or
agree to the proposals of the other, an erring party should
not be tolerated and allowed with impunity to resort to
schemes feigning negotiations by going through empty
gestures.
Hence, Divine Word may not validly assert that its consent
should be a primordial consideration in the bargaining
process. By its acts, no less that its inaction which
bespeck of its sincerity, it has forfeited whatever
rights it could have asserted as an employer.
3.4

When duty to bargain ceases

1. Upon actual loss of majority status of the bargaining
representative without fault of the employer; or
2. Where a representation question or dispute has arisen in
the unit.

B.

COLLECTIVE BARGAINING NEGOTIATIONS

A PRACTICAL GUIDE IN HANDLING CBA NEGOTIATIONS

As had been intimated earlier, the constitutional guarantee of the

workers right to collective bargaining is an implicit cognizance of
the inherent inequality in the economic relationship between labor
and management. Management controls and owns the capital, the
disposition and direction of which is entirely within management
prerogatives, in its quest for PROFITS.
On the other hand, the workers are economically dependent upon
capital, and hence, the weaker of the two.
Note however that
despite this, there is no gainsaying the fact that without the
workers efforts, profits could not be had. Thus, it is but just that
they should be given their equitable share in the profits.
In the context of a depressed economy such as ours, and the lack of
employment opportunities, employer-employee relationships may
thus be subject to abuses by management. Hence, the State
regulates the relationship through the promulgation and
implementation of laws which are intended to protect the interests
of labor. One such right is thus collective bargaining.
1.

Submission of Proposals
As intimated earlier, collective bargaining allows for a means
toward the ideal laissez faire condition, where the employees
stand on a more or less equal footing with the employer, in
threshing out the conditions and terms of their employment.
It is in pursuance of the better terms and conditions of their
employment that the Union would seek vast improvements
therein. Thus, in the submission of their proposals, the Union
usually maximizes their proposals (SUNTOK SA BUWAN), in
cognizance that these proposals will usually be whittled down
during the negotiation proper.
On the other hand, the Company will usually maintain a very
conservative stand. In the context of its quest for profits, the
Company will as much as possible not want to give anything
more than that which is mandated by law. Thus, this is where
the bargaining power and the relative strength of the Union
comes in. This is in turn, backed up by its constitutional rights to
strike and to undertake concerted activities --- but note that this
must all be done in accordance with law.

2.

Composition of Panels; requirements

2.1

Appointment of the members of the respective

panels; by whose authority
For the management panel: by authority of the
President or the Board of Directors/Trustees, depending
upon the By-laws of the corporation.
Usually, Board of Directors/Trustees give authority by way of
a resolution passed and approved during a regular meeting,
there being a quorum to transact business.
For the union panel: usually the officers of the union are
members of the panel, duly given authority by their own
Board.

2.2
2.3

Presentation of the appropriate Special Power of

Attorney
Identification of Chairman and Recorder
Chairman: note that it is only the chairman that can bind
their respective panel.
Recorder: to ensure the recording of the minutes of each
meeting or conference. The minutes are useful later, in case
there arises a question of the interpretation and/or
implementation of the CBA provisions.

3. Determination of ground rules (on 1st mtg.

3.1

What will be considered as Working Documents

e.g., Existing CBA and the proposals of Union
The following documents may considered as the working
documents of the CBA negotiations: (a) Original CBA; (b)
Proposals of the Union for a new CBA; and (c) Counterproposals of the Management shall be considered as
references.

3.2

Quorum
The quorum for business to be transacted shall be at least:
(a) three [3] members for the Management Panel; and (b)
three [3] members for the Union Panel.

3.3

Postponement
It may be agreed by both panels that should a
postponement be necessary, to inform the other panel, in
writing, of such postponement within twenty four (24) hours.
Should the Union request for a postponement, such notice
should be addressed to Chairman or Recorder of the
Management panel; should the Management request for a
postponement, such notice should be addressed to the
President of the Union or the recorder.

3.4

Recording of the Minutes

Both panels should appoint their respective recording
secretary.
(The recording secretary for the Institute shall be Ms.
Rosanna Roces, while the recording secretary for the Union
panel shall be Ms. Ara Mina).
Both recording secretaries shall consult with each other and
make the common minutes for the past meeting.
Mechanics: The Union recording secretary may fax their
minutes to the Management recording secretary who will
make the common minutes. The common minutes must be
faxed at least one (1) day immediately prior to the next
scheduled meeting, in order that the Union may review the
same.

3.5

Signing of the Common Minutes

The common minutes should all be signed before the
actual start of the negotiations. Hence, any correction,
amendments or modifications to the common minutes must
be made prior to the start of the negotiations.

3.6

Order of Discussion or Negotiations

Both panels may agree to discuss non-economic provisions
first (inclusive of political and union rights), prior to the
discussion on all economic provisions.
OR

Both panels may agree to follow the order provided in the

Working Documents (CBA 1996) in accordance with the
above priority.
3.7

Setting of the Agenda

In order that the discussions per meeting will be both fast
and productive, both panel should agree that before
adjournment of each meeting, that they will enumerate the
agenda for discussion on the next meeting.

3.8

Related expenses
It was agreed that expenses for the collective bargaining
negotiations pertaining to merienda, shall be for the account
of the Management.

3.9

Recess
Recess during negotiations shall be allowed upon request of
either panel.

3.10 Venue, frequency and time of meetings

Usually better to set it at a particular day and time, e.g., every Friday
at 10:00 a.m. Note that for union members, this is considered time-in.
The time frame per each meeting may be extended by
mutual consent of both parties, should the same be deemed
necessary
under
the
circumstances.
4.

What are Bargainable Issues - Art. 252, LC

Art. 252, Labor Code. Meaning of duty to bargain collectively.
-- The duty to bargain collectively means the performance of a
mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an
agreement with respect to the wages, hours of work and all
other terms and conditions of employment including
proposals for adjusting any grievances or questions
arising under such agreement and executing a contract
incorporating such agreements if requested by either
party, but such duty does not compel any party to agree to a
proposal or to make any concession.

4.1 Mandatory Subjects

a. As regards minimum standards provided by the
Labor Code and effect of substandard contract
Phil. Am. Mgmt. vs. Phil. Am. Ees. Assn., 51 SCRA 98
(1971)
There is an area placed beyond the sphere of bargaining
between the parties. Included therein is the question of
minimum wages. It is understandable why it is so. For
legislation of that character proceeds from the
premise that THERE IS A FLOOR BELOW WHICH THE
AMOUNT PAID LABOR SHOULD NOT FALL. That is to
assrue decent living conditions. Such an enactment is
compoulsory in nature; not even the consent of the
employees themselves suffices to defeat its operation.
MORE PLAINLY PUT, THE QUESTION OF MINIMUM
WAGES IS NOT NEGOTIABLE. What the law decrees
must be obeyed. It is as simple as that.
NOTE: By entering into a sub-minimum contract,
there arises a cause of action on the part of the
affected employees to DECERTIFY the Union (Article
239, LC).
Nestle Phils. vs. NLRC, 193 SCRA 504 (1991)
The companys contention that the retirement plan being
non-contributory and hence, non-negotiable, is not welltaken. The NLRC correctly observed that the inclusion of
the retirement plan in the CBA as part of the package of
economic benefits extended by the company to its
employees to provide them a measure of financial security
after they shall have ceased to be employed in the
company, reward their loyalty, boost their morale and
efficiency, and promote industrial peace, gives a
consensual character to the plan so that it may not be
terminated or modified at will by either party.
The fact that the retirement plan is non-contributory (i.e.
that the employees do not contribute anything to the
operation of the plan) does not make it a non-issue in CBA
negotiations. As a matter of fact, almost all of the benefits
which the company has granted to its employees are noncontributory, such as salary increases, rice allowances,

mid-year bonuses, 13th and 14th month pay, seniority pay,

medical and hospitalization plans, health and dental
services, vacation, sick and other leaves with pay, are noncontributory.
b. Grievance procedure and voluntary arbitration
The grievance machinery as provided in the CBA
usually defines the following: (a) composition of the
panel; (b) procedure at plant level; and (c) what is to be
considered as a grievance. If the definition includes
ULP as subject to the grievance procedure, a strike in
violation of its terms will be illegal.
PROCEDURE UNDER THE LAW AFTER GRIEVANCE
MACHINERY PLANT LEVEL:
Under the Labor Code, all grievances submitted to the
grievance machinery which are not settled within 7
calendar days from the date of its submission shall
automatically be referred to voluntary arbitration
prescribed in the CBA (Art. 260, LC).
For this purpose, parties to a CBA shall name and
designate in advance a Voluntary Arbitrator or panel of
Voluntary Arbitrators, or include in the agreement a
procedure for the selection of such VA or panel of VAs,
preferably from a listing of qualified VAs duly accredited
by the Board.
The VA or panel of VAs shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances
arising from the jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or
implementation of the CBA and those arising from the
interpretation or enforcement of company personnel
policies. Violations of a CBA, except those which
are gross in character, shall no longer be treated
as unfair labor practice and shall be resolved as
grievances under the CBA. Gross violations of the
CBA shall mean flagrant and/or malicious refusal to
comply with the economic provisions of the
agreement (Art. 260, LC).
The Commission, its Regional Offices and the Regional
Directors of the Department of Labor & Employment shall

not entertain disputes, grievances or matters under the

exclusive and original jurisdiction of the VA or VA panel
and shall immediately dispose and refer the same to the
Grievance Machinery or Voluntary Arbitration provided in
the CBA (Art. 261, LC).
The VA or VA panel, upon agreement of the parties, shall
also hear and decide all other labor disputes including
unfair labor practices (ULPs) and bargaining deadlocks
(Art. 262, LC).
The VA shall have the power to hold hearings, receive
evidence and take whatever action is necessary to
resolve the issue/s subject to the dispute, including
efforts to effect a voluntary settlement between the
parties.
All parties to the dispute shall be entitled to attend the
arbitration proceedings. The attendance of any third
party or the exclusion of any witness from the
proceedings shall be determined by the VA or VA panel.
Hearings may be adjourned for cause or upon agreement
by the parties.
Unless the parties agree otherwise, it shall be mandatory
for the VA or the VA panel to render an award or decision
within 20 calendar days from the date of submission of
the dispute to VA.
c. union dues, special assessment
Art. 241, Labor Code. Rights
membership in a labor organization

and

conditions

of

(g) No officer, agent or member of a labor organization shall collect

any fees, dues or other contributions in its behalf or make any
disbursement of its money or funds unless he is duly authorized
pursuant to its constitution and by-laws;
(h) Every payment of fees, dues or other contributions by a member
shall be evidenced by a receipt signed by the officer or agent making
the collection and entered into the record of the organization to be
kept and maintained for the purpose;
(n) No special assessment or other extraordinary fees may be levied
upon the members of a labor organization unless authorized by a

written resolution of a majority of all the members of a general

membership meeting duly called for the purpose. The secretary of the
organization shall record the minutes of the meeting including the list
of all members present, the votes cast, the purpose of the special
assessment or fees and the recipient of such assessment or fees. The
record shall be attested to by the president.
(o) Other than for mandatory activities under the Code, no special
assessments, attorneys fees, negotiation fees or any other
extraordinary fees may be checked off from any amount due to an
employee, without an individual written authorization duly signed by
the employee. The authorization should specifically state the amount,
purpose and beneficiary of the deduction, if any.
xxx Any violation of the above rights and conditions of membership
shall be a ground for the cancellation of union registration or expulsion
of officer from office, whichever is appropriate. At least thirty percent
(30%) of all the members of a union or any member or members
specifically concerned may report such violation to the Bureau. xxx
Art. 222 (b), Labor Code. Appearances and fees. -- (b)
No attorneys fees, negotiation fees or similar charges of
any kind arising from any collective bargaining
negotiations or conclusion of the collective agreement shall
be imposed on any individual member of the contracting
union; Provided, however, that attorneys fees may be
charged against union funds in an amount to be
agreed upon by the parties.
Any contract,
agreement or arrangement of any sort to the
contrary shall be null and void.
Palacol vs. Calleja, 26 Feb. 1990
THE SPECIAL ASSESSMENT
DECLARED INVALID.

IN

THIS

CASE

WAS

A special assessment cannot be validly deducted by the

Union certified as coll. barg. agent from the lump-sum pay
of its members granted under the CBA, especially so
that there had been subsequent disauthorizations
by the majority of the union members, and that the
procedure for imposition of special assessment
provided by the Labor Code was not followed.
Special assessment was for purposes of putting up a
cooperative and credit union, for purchase of vehicles and

other items needed for the benefit of the officers and

general membership, and for payment of services rendered
by union members. Allocation thereof at discretion of
Union President.
The Union, contrary to the legal procedure, held local
membership meetings on different occasion, on different
dates and various venues. It submitted only minutes of
said meetings when what is required is a written resolution
adopted at the general meeting. Worse, only a union
director recorded the minutes and not the secretary, no
record of votes or list of members present.
d. No Strike - No Lock-out clause
Example:
MANAGEMENT and UNION agree that the way to
preserve job security and improve the welfare of the
employees is to increase the goodwill xxx. It is therefore to
the mutual interest of both parties that the business of the
company will continue without inconvenience to the public,
and as such, MANAGEMENT and UNION agree as follows:
1. UNION agrees that there shall be no strike, walkouts, stoppage, slowdown, boycotts, xxx whether
sympathetic or general, during the effectivity of this CBA.
2. MANAGEMENT agrees that there shall be no lockout during the effectivity of this CBA.
The No Strike-No Lockout Clause is not an
infringement
or
undue
restriction
of
the
constitutional right to strike, because said clause is
applicable only to ECONOMIC STRIKES, but not to
ULP strikes.
In other words, even during the
effectivity of the CBA, the Union may still strike if
the company commits ULP as enumerated in Article
248 of the Labor Code.
(PHIL. METAL FOUNDRIES
VS. CIR, 90 SCRA 135)
General rule:
A No strike - No Lock-out clause applies only to
economic strikes, and not to ULP strike. (Phil. Metal
Foundries case).

Exception: (but this is no longer controlling; already

overturned and modified by the new rules which reverts
back to the Phil. Metal Foundries case)
When the CBA provides for a conclusive arbitration clause,
in which case, even ULP strikes are subject to the no-strike
no lock-out clause. (Union of Filipro vs. Nestle Phils.)
4.2

Other non-mandatory subjects

a. Management prerogatives clause
The above provisions notwithstanding, MANAGEMENT
is not precluded from exercising its management
prerogatives, including but not limited to the exclusive
right to hire and appoint employees subject to such
reasonable rules and regulations it may prescribe, to
transfer, demote, suspend, lay-off, dismiss or impose
any form of disciplinary action upon its employees, or
such other matters relative to the conduct of the
business of the company.
b. Union security clauses (union shop/closed shop,
etc.)
Example 1:
MANAGEMENT agrees to require as a condition of
employment for those employees within the bargaining
unit who are either members of the ABC FEDERATION
on the date of the effectivity of this CBA, or may join
the union during the effectivity of this Agreement, and
that they shall not voluntarily resign from the union
earlier than 60 days prior to expiration of this
Agreement. xxx
Example 2:
Section 1. Employees of the COMPANY who at the
signing of this Agreement are members of the UNION
and those who subsequently become members thereof
shall maintain their membership with the UNION for the
duration of this Agreement as a condition of
employment.

Section 2. Members of the Union who cease to be

members of the UNION in good standing by reason of
resignation or expulsion shall not be retained in the
employment of the COMPANY.
NOTE: A Union security clause cannot have any retroactive effect
under Article 248 of the Labor Code, and as such, will not apply to
employees who are already members of another union at the time of
the effectivity of the CBA.
ART. 248. Unfair labor practices of employers. - It shall
be unlawful for an employer to commit any of the
following unfair labor practice:
xxx
(e) To discriminate in regard to wages, hours of work,
and other terms and conditions of employment in order
to encourage or discourage membership in any labor
organization. Nothing in this Code or in any other
law shall stop the parties from requiring
membership
in
a
recognized
collective
bargaining agent as a condition for employment,
except those employees who are already
members of another union at the time of the
signing of the collective bargaining agreement.
Employees of an appropriate collective bargaining unit
who are not members of the recognized collective
bargaining agent may be assessed a reasonable fee
equivalent to the dues and other fees paid by members
of the recognized collective bargaining agent, if such
non-union members accept the benefits under the
collective agreement: Provided, that the individual
authorization required under Article 242, paragraph (o)
of this Code shall not apply to the non-members of the
recognized collective bargaining agent;
c. Signing bonus:
Caltex Refinery Assn. vs. Brillantes, 279 SCRA 218
Although proposed by petitioner UNION, the signing
bonus was not accepted by the Company. Besides, a
signing bonus is not a benefit which may be demanded
under the law. Rather, it is now claimed by petitioner
Union under the principle of maintenance of existing

benefits of the old CBA. However, as clearly

explained by the respondent Company, a signing
bonus may not be demanded as a matter of right.
If it is not agreed upon by the parties, or
unilaterally offered as an additional incentive by
the company, the condition for awarding it must
be duly satisfied. In the present case, the condition
sine qua non for its grant a non-strike was not
complied
with.
5.

Bargaining Deadlock
5.1 When is there a deadlock in collective bargaining
Deadlock is defined as the counteraction of things
producing an entire stoppage; a state of inaction or of
neutralization caused by the opposition of persons or
factions; STANDSTILL.
During negotiations, it is a situation where both parties
have reached a point beyond which there is no longer any
compromise, e.g., unacceptable. The word is synonymous
to an impasse, which in labor relations law, presupposes
reasonable effort at good faith bargaining which, despite
noble intentions, does not conclude in an agreement
between the parties.
Capitol Medical Center Alliance of
Employees
vs. Laguesma, 267 SCRA 503 (1997)

Concerned

In the case of Divine Word University of Tacloban vs.

Secretary of Labor and Employment, we had the occasion
to define what a deadlock is, viz:
A deadlock is xxx the counterclaim of things producing
entire stoppage; xxx. There is a deadlock when there is a
complete blocking or stoppage resulting from the action of
equal and opposed forces xxx. The word is synonymous
with the word impasse, which xxx presupposes reasonable
effort at good faith bargaining which, despite noble
intentions, does not conclude in agreement between the
parties.

If the law proscribes the conduct of a certification

election when there is a bargaining deadlock
submitted to conciliation or arbitration, with more
reason should it not be conducted if, despite
attempts to bring an employer to the negotiation
table by the certified bargaining agent, there was
no reasonable effort in good faith on the part of
the employer to bargain collectively.
This is what is strikingly different between the Kaisahan
case and the case at bench for in the latter case, there was
proof that the certified bargaining agent, respondent union,
had taken an action to legally coerce the employer to
comply with its statutory duty to bargain collectively, i.e.,
charging the employer with unfair labor practice and
conducting a strike in protest against the employer' refusal
to bargain. It is only just and equitable that the
circumstances in this case should be considered as
similar in nature to a bargaining deadlock when
no certification election could be held. This is also to
make sure that no floodgates will be opened for the
circumvention of the law by unscrupulous employers to
prevent any certified bargaining agent from negotiating a
CBA. THUS, SECTION 3, RULE V, BOOK V OF THE
IMPLEMENTING RULES SHOULD BE INTERPRETED
LIBERALLY SO AS TO INCLUDE A CIRCUMSTANCE,
E.G. WHERE A CBA COULD NOT BE CONCLUDED DUE
TO THE FAILURE OF ONE PARTY TO WILLINGLY
PERFORM ITS DUTY TO BARGAIN COLLECTIVELY.
5.2

Remedies - Notice of strike or notice of lock-out

30-day cooling-period and 7-day strike

ban.
Art. 263 (c), Labor Code. Strikes, picketing and lockouts. -- (c) In cases of bargaining deadlocks, the
duly certified or recognized bargaining agent may
file a notice of strike or the employer may file a
notice of lock-out with the Ministry (Department) at
least 30 days before the intended date thereof.
In cases of unfair labor practice, the period of
notice shall be 15 days and in the absence of a duly
certified or recognized bargaining agent, the notice of
strike may be filed by any legitimate labor organization in
behalf of its members. However, in case of dismissal from

employment of union officers duly elected in accordance

with the union constitution and by-laws, which may
constitute union busting where the existence of the union
is threatened, the 15-day cooling off period shall not
apply, and the union may take action accordingly.
(f) A decision to declare a strike must be approved by a
majority of the total union membership in the bargaining
unit concerned, obtained by secret ballot in meetings or
referenda called for that purpose. Xxx The decision shall
be valid for the duration of the dispute based on
substantially the same grounds considered when the strike
or lockout vote was considered. Xxx. In every case, the
union
or
the
employer
shall
furnish
the
(Department) the results of the volting at least
seven days before the intended date of strike or
lockout, subject to the cooling-off period herein
provided.

C.

COLLECTIVE BARGAINING AGREEMENT

1. Definition
Dept. Order No. 9, Rule I. Definition of terms. (pp)
Collective bargaining agreement refers to the negotiated
contract between a legitimate labor organization and the
employer concerning wages, hours of work and all other terms
and conditions of employment in a bargaining unit.
B5 R1 S1 (jj), Impl. Rules and Regulations. Collective
bargaining agreement refers to the negotiated contract
between a legitimate labor organization and the employer
concerning wages, hours of work and all other terms and
conditions of employment in a bargaining unit, including
mandatory provisions for grievances and arbitration machineries.
Davao Integrated Port Stevedoring vs. Abarquez, 220
SCRA 197 (1993)
While the terms and conditions of a CBA constitute the
law between the parties, it is not an ordinary contract to
which is applied the principles of law governing ordinary
contracts.
A CBA, as a labor contract within
contemplation of Art. 1700 of the Civil Code, is not

merely contractual in nature but is impressed with public

interest. Thus, it must yield to the common good. As
such, it must be construed liberally rather than narrowly and
technically, and the courts must place a practical and realistic
construction upon it, giving due consideration to the context in
which it is negotiated and the purpose which it is intended to
serve.
2.

Signing and ratification

2.1

The collective bargaining agreement should be signed by

the members of both panels.

2.2

After the signing by the panels, a majority of the

employees covered by the appropriate bargaining unit
should ratify the same.

2.3

Note the posting requirement in at least two conspicuous

places in the establishment at least five (5) days before its
ratification

2.4

If certified CBA, contract bar rule applies and operates as

a bar to a representation question.

2.5

Note however that a CBA is valid even without

certification, and will be considered as binding upon the
parties.

3. Procedure in registration of CBA

Dept. Order No. 9 (April 1997), Rule XVI, Secs. 1, 2 & 5:
(See also: B5 R9 S1, IRR)
Section 1. Registration of collective bargaining agreement.
The parties to a collective bargaining agreement shall submit to
the appropriate Regional Office two (2) duly signed copies
thereof within thirty (30) calendar days from execution. Such
copies of the agreement shall be accompanied with verified proof
of posting in two conspicuous places in the work place and of
ratification by the majority of all the workers of the bargaining
unit.

Such proof shall consist of copies of the following

documents certified under oath by the union secretary and
attested to by the union president.
(a) Statement that the collective bargaining agreement
was posted in at least two conspicuous places in the
establishment at least five (5) days before its ratification; and
(b) Statement that the collective bargaining agreement
was ratified by the majority of the employees in the bargaining
unit.
The Regional Office shall assess the employer for every
collective bargaining agreement a registration fee of one
thousand pesos (P1,000.00).
The Regional Office shall retain one (1) copy of the
agreement for its file and transmit one (1) copy thereof tot he
Bureau within five (5) calendar days from its registration. The
Regional Office shall issue a certification of registration within
five (5) calendar days from receipt of the agreement and the
proofs of posting and ratification as required herein.
Section 2. Registration of agreement resulting from awards by
the Secretary, the Commission or the Voluntary Arbitrator. -Where the agreement results from an arbitration award, the
same shall be registered in accordance with the immediately
preceding section, except that the requirement of ratification and
proof thereof shall be dispensed with.
Section 5. Appeal. -- The decision of the Regional Director
granting or denying an action to declare the registration
ineffectual may be appealed to the Bureau on the ground of
grave abuse of discretion within ten (10) days from receipt of the
parties of a copy thereof. The Bureau shall have twenty (20)
dyas within which to resolve the appeal and its decision shall be
final and executory.
Art. 231, Labor Code. Registry of unions and file of collective
agreements. -- The Bureau shall keep a registry of legitimate
labor organizations. The Bureau shall also maintain a file of all
collective bargaining agreements and other related agreements
and records of settlement of labor disputes, and copies of orders,
and decisions of voluntary arbitrators. The files shall be open
and accessible to interested parties subject to conditions
prescribed by the Secretary of Labor and Employment, provided

that no specific information submitted in confidence shall be

disclosed unless authorized by the Secretary, or when it is at
issue in any judicial litigation or when public interest or national
security so requires.
xxx
4. Scope of the agreement; who may avail of benefits Natl. Brewers and Allied Industries Labor Union vs. San
Miguel Brewery
All employees in the barg. unit are covered, regardless of their
membership or non-membership in the union; otherwise,
discrimination.
5. Duration of the CBA (Art. 253-A. cf. Dept. Order No. 9,
Rule XIV, Secs. 3-4)
Article 253-A, Labor Code.
XIV, secs. 3-4)

(same as Dept. Order No. 9, Rule

5.1 Economic provisions of the CBA - term of 3 yrs.

Dept. Order No. 9, Rule XIV, sec. 3
All other provisions of said agreement shall, as a matter of
right, be renegotiated not later than three (3) years after
its execution.
5.2 Representation question and the contract-bar rule
Dept. Order No. 9, Rule XIV, secs. 3-4
Section 3. Term of representation status of agreement;
contract-bar rule. -- The representation status of the
incumbent exclusive bargaining representative which is a
party to a duly registered collective bargaining agreement
shall be for a term of five (5) years. (CONTRACT BAR
RULE) NO PETITION QUESTIONING THE MAJORITY
STATUS OF THE INCUMBENT EXCLUSIVE BARGAINING
REPRESENTATIVE SHALL BE ENTERTAINED AND NO
CERTIFICATION ELECTION SHALL BE CONDUCTED BY
THE DEPARTMENT OUTSIDE OF THE SIXTY-DAY PERIOD

IMMEDIATELY BEFORE THE DATE OF EXPIRY OF SUCH

FIVE-YEAR TERM.
Section 4.
Exception to the contract bar rule.
Notwithstanding its registration, a collective bargaining
agreement shall not constitute a bar to a certification
election where it is found in appropriate proceedings before
the Regional Director that any of the following conditions
exist:
(a) The agreement contains provisions lower
than the standards fixed by law; or
(b) The documents supporting its registration
are falsified, fraudulent or tainted with
misrepresentation.
ALU vs. Ferrer-Calleja, 173 SCRA 178
CONTRACT BAR RULE DOES NOT APPLY WHERE THE
CBA WAS NOT DULY SUBMITTED IN ACCORDANCE
WITH LAW. Moreover, there is no proof tending to show
that the CBA has been posted in at least 2 conspicuous
places in the company at least 5 days prior to the
ratification, and that the same was ratified by a majority of
the members of the union.
Perusal of the facts show that the CBA was defective, and
hence unproductive of the legal effects of a certified CBA.
Note that the Labor unions representation was in itself
questionable, and that there was precipitate haste in
recognizing the union based on an unsubstantiated and selfserving claim that it represented the majority of the
employees in the bargaining unit. Moreover, there was an
apparent and suspicious hurry in the formulation and
finalization of the CBA.
Hence: IF NOT CERTIFIED AND FILED WITH THE BLR, the
representation issue may be questioned by another union.
5.3 Retroactivity
Dept. Order No. 9, Rule XIV, sec. 3
Any agreement on such other provisions entered into within six
(6) months from the date of expiry of such provisions shall

retroact to the day immediately following such date. If any

such provisions are entered into beyond six months, the
parties shall agree on the duration of retroactivity. In
case of a deadlock in the renegotiation of the agreement, the
parties may exercise their rights under the Code. In case of
renegotiation, all requirements for registration prescribed under
the two immediately preceding sections shall be complied with,
whichever is applicable, except payment of the registration fee.
Union of Filipro Employees vs. NLRC, 192 SCRA 397, at
425
In the aforecited case, the Court only pointed out that, it is not
right for union members to argue that they cannot be covered
by the past and the new CBAs both containing the same closedshop agreement for acts committed during the interregnum.
What as emphasized by this Court is that in no case
should there be a period in which no agreement would
govern at all. But nowhere in the said pronouncement
did We rule that every CBA contracted after the expiry
date of the previous CBA must retroact to the day
following such date. Hence, it is proper to rule that in the
case at bar, the clear and unmistakable terms of Articles 253
and 253-A must be deemed controlling.
Articles 253 and 253-A mandate the parties to keep the status
quo and to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day period
prior to the expiration of the old CBA and/or until a new
agreement is reached by the parties. Consequently, there
being no new agreement reached, the automatic renewal
clause provided for by the law which is deemed incorporated in
all CBAs, provides the reason why the new CBA can only be
given a prospective effect.
Petitioner claims that because of the prospective effect of the
CBA, union members were deprived of substantial amount of
monetary benefits which they could have enjoyed had the CBA
be given retroactive effect. This would include backwages, the
immediate effects of the mandated wage increase on the fringe
benefits such as the 13th and 14th month pay, overtime
premium, and right to differential pay, leaves, etc. This Court,
is not unmindful of these. Nevertheless, We are convinced that
the CBA formulated by public respondent is fair, reasonable and
just. Even if prospective in effect, said CBA still entitles the
Nestle workers and employees reasonable compensation and

benefits which, in the opinion of this Court, is one of the

highest, if not the highest in the industry. Petitioner did not
succeed in overcoming the presumption of regularity in the
performance of the public respondents functions. Even if the
resolution fell short of meeting the numerous demands of the
union, the petitioner failed to establish that public respondent
committed grave abuse of discretion in not giving the CBA a
retrospective
effect.
6.

Violations of the CBA (Art. 261)

Question: Is the violation of the CBA provisions a ULP as to
allow the union to strike?
Answer: It depends on whether the violation is gross in
character or not. If gross, then ULP and the union may strike. If
not gross, then non-strikeable and must be referred to the
grievance machinery.
Hence:
6.1 Generally: Grievances arising from interpretation or
implementation of the CBA is no longer
considered ULP and hence, non-strikeable.
Must be referred to grievance machinery
and voluntary arbitrators

6.2

Exception: Strikeable issue when there is gross and

flagrant refusal to comply with the economic
provisions of the CBA

Article 261, Labor Code. Jurisdiction of Voluntary Arbitrators

or panel of Voluntary Arbitrators. -- The Voluntary Arbitrator or
panel of voluntary arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising
from interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation
or enforcement of company personnel policies referred to in the
immediately preceding article. Accordingly, violations of a
Collective Bargaining Agreement, except those which are
gross in character, shall no longer be treated as unfair
labor practices and shall be resolved as grievances
under the Collective Bargaining Agreement.
For

purposes of this article, gross violations of the Collective

Bargaining Agreement shall mean flagrant and/or
malicious refusal to comply with the economic provisions
of
such
agreement.
7. Substitutionary Doctrine
Benguet Consolidated vs. BCI Ees Union, 23 SCRA 465
The employees cannot revoke the validly executed CBA with
their employer by the simple expedient of changing their
bargaining representative. The CBA is binding for the period
specified therein, but the new agent may bargain for the
shortening of the period.
But the substitutionary doctrine applies only to the employees of
the unit, not to the new agent which is not bound by the purely
personal undertakings of the displaced agent like the no-strike
clause
in
the
CBA.
8. Effect:

(w/ respect to successor-employer)

General rule:
An innocent transferee of a business concern has no
liability to the employees either with respect to continuing them
in employment or with respect to the past ULP of previous
owner.
Exceptions to above general rule:
a) By virtue of obligations assumed under the contract.
b) Liability arises because of new owners participation in
defeating the rights of the employees. In such instance, he is
treated as in the same position of a tortfeasor.
E. Razon vs. Secretary of Labor, 222 SCRA 1
A CBA is a contract in personam, and therefore, not enforceable
against the successor-employer. In rehiring the workers of the old
employer, the successor-employer has the right to consider them as
new employees. The old employer, to whom years of service had
been rendered by its suddenly jobless employees, had the

corresponding obligation to pay them their respective separation pay.