Showing posts with label COLLECTIVE BARGAINING. Show all posts
Showing posts with label COLLECTIVE BARGAINING. Show all posts


 I. COLLECTIVE BARGAINING – 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.

- Also ensures workers’ participation in decision-making.

 a democratic framework to stabilize the relation between labor and management to create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the union and is their legal obligation. (purpose)

4 related but distinguishable processes:

1. Negotiation between representatives of the management and the union over “wages, hours, and other term… of employment”; 

2. The execution of a written contract embodying the terms agreed upon;

3. Negotiation of any question arising as to the interpretation or application of the contract; and

4. Negotiation over the terms of a new contract or proposed modifications, when an existing agreement is validly opened for negotiations.

EMPLOYEE’S BARGAINING REPRESENTATIVE – any legitimate labor organization duly recognized or certified as the sole and exclusive bargaining agent of all the employees in a bargaining unit


1. Possession of the status of majority representation of the employees’ representative in accordance with any of the means of selection or designation provided for by the LC;

2. Proof of majority representation; and

3. A demand to bargain under Art. 250 (a) of the LC

DUTY TO BARGAIN COLLECTIVELY – only between employer and its employees. 

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

- Art. 253. When there is a CBA, 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 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.

- An employer’s duty to recognize and bargain collectively with a union as the collective bargaining representative of his employees does not arise until after the union requests the employer to bargain. (There must be a request by the union)

- It is not a ULP for an employer to refuse to negotiate until the asserted bargaining agent has presented reasonable proof of majority representation.

- Demand must be made in good faith and not merely as a pretext or device for delay or evasion.

- It is ULP to bargain with the minority representative

- Collective bargaining is a continuous process. It does not end with the execution of the CBA. 

CERTIFICATION YEAR – if the 3 preconditions are present, the collective bargaining should begin within the 12 months following the determination and certification of the employees’ exclusive bargaining representative.

- ULP if employer refuses to bargain during this period, notwithstanding the repudiation of the union by a majority of its employees before the expiration of the 1 year period.

PRESUMPTION IN FAVOR OF A UNION MAJORITY, absent special circumstances


1. SINGLE ENTERPRISE BARGAINING – one where any voluntary recognized or certified labor union may demand negotiations with its employer for terms and conditions of work covering employees in the bargaining unit concerned.

2. MULTIPLE EMPLOYER BARGAINING – a legitimate labor union and employer may agree in writing to come together for the purpose of collective bargaining, provided: 

a. Only legitimate labor unions who are incumbent exclusives bargaining agents may participate and negotiate in multi-employer bargaining 

b. Only employers with counterpart legitimate labor unions who are incumbent bargaining agents may participate and negotiate in multi-employer bargaining; and

c. Only those legitimate labor unions who pertain to employer units who consent to multi-employer bargaining may participate in multi-employer bargaining.

- A number of employers join forces for purposes of collective bargaining (group, association)

a. Legitimate labor unions who desire to negotiate with their employers collectively shall execute a written agreement among themselves, which shall contain the following in order to avail of multi-employer bargaining;

1. The names of the labor unions who desire to avail of multi-employer bargaining;

2. Each labor union in the employer unit;

3. The fact that each of the labor unions are the incumbent exclusive bargaining agents for their respective employer units;

4. The duration of the collective bargaining agreements, if any, entered into by each labor union with their respective employers.

Legitimate labor unions who are members of the same registered federation, national, or industry union are exempt from execution of this written agreement.

b. The legitimate labor unions who desire to bargain with multi-employers shall send a written notice to this effect to each employer concerned. The written agreement stated in the preceding par or the certificates of registration of the federation, national, or industry union, shall accompany said notice. 

Employers who agree to group themselves or use their existing associations to engage in multi-employer bargaining shall send a written notice to each of their counterpart legitimate labor unions indicating their desire to engage in multi-employer bargaining. Notice shall indicate:

1. The names of the employers who desire to avail of multi-employer bargaining;

2. Their corresponding legitimate labor organizations;

3. The fact that each corresponding legitimate union is an incumbent exclusive bargaining agent;

4. The duration of the current collective bargaining agreement, if any, entered into by each employer with the counterpart legitimate labor union.

c. Each employer or concerned labor union shall express its willingness or refusal to participate in multi-employer bargaining in writing, addressed to its corresponding exclusive bargaining agent or employer. Negotiations may commence only with regard to respective employers and labor unions who consent to participate in multi-employer bargaining;

d. During the course of negotiations, consenting employers and the corresponding legitimate labor unions shall discuss and agree on:

1. The manner by which negotiations shall proceed;

2. The scope and coverage of the negotiations and the agreement; and

3. Where appropriate, the effect of the negotiations on current agreements or conditions of employment among the parties.

2 signed copies of CBA reached through multi-employer bargaining shall be posted for at least 5 days in 2 conspicuous areas in each workplace of the employer units concerned. Said CBA shall affect only those employees in the bargaining units who have ratified it.


- In the absence of a CBA, Art. 251. “…it shall be the duty of employer and the representatives of the employees to bargain collectively in accordance with the provisions of this Code.

- Existence of a CBA – only during freedom period, Art. 253. When there is a CBA, 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 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 days period and/or until a new agreement is reached by the parties. 

EFFECT OF REFUSAL TO BARGAIN – ULP under Art. 260(g) “…to violate the duty to bargain collectively as prescribed by this Code.”

Divine Word Univ. vs. NLRC, 213 SCRA 759 – Kiok Loy v. NLRC is applicable in this case. The factors are: 

a. The union is the duly certified bargaining agent;

b. It made a definite request to bargain and submitted its collective bargaining proposals, and

c. The University made no counter proposal whatsoever.

“a company’s refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and this is especially true where the Union’s request for a counter proposal is left unanswered.”

Colegio de San Juan de Letran vs. Assn of Employees and Faculty of Letran - whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when it unilaterally suspended the ongoing negotiations for a new Collective Bargaining Agreement (CBA) upon mere information that a petition for certification has been filed by another legitimate labor organization?

- In order to allow the employer to validly suspend the bargaining process there must be a valid petition for certification election raising a legitimate representation issue. Hence, the mere filing of a petition for certification election does not ipso fact justify the suspension of negotiation by the employer. A petition for certification election must be filed during the 60-day freedom period. Under the Contract Bar Rule – if a CBA has been duly registered in accordance with Art 231 of the Code, a petition for certification election or a motion for intervention can only be entertained within 60 days prior to the expiry date of such agreement. The old CBA is extended until a new one is signed. In this case the CBA was from 1989-1994. The petition for certification election by ACEC was filed with the DOLE only on May 26, 1996. (outside the 60-day period) Consequently, there is no legitimate representation issue and, as such, the filing of the petition for certification election did not constitute a bar to the ongoing negotiation.

WHEN DUTY TO BARGAIN CEASES – the union which seek to bargain in behalf of the employees:

1. Is not a legitimate labor organization;

2. Not composed of employees of the employer; and

3. Not certified by the DOLE as the collective bargaining agent of the employees

STANDARD OF CONDUCT REQUIRED – all that is required is for the parties to meet with an open mind and make reasonable effort to reach an agreement. There must be common willingness to freely and fully discuss their respective demands and to justify them on reason when the demands are opposed. 

- To meet and confer promptly and expeditiously to adjust any grievance or question arising under such agreement; and

- To refrain from terminating or modifying the agreement during its lifetime.

SURFACE BARGAINING – a sophisticated pretense in the form of apparent bargaining, does not satisfy the statutory duty to bargain. An employer’s proposals which could not be offered with any reasonable expectation that they would be accepted by the union. 

Standard chartered Bank Employees Union (NUBE) vs Secretary Nieves Confesor

and Standard Chartered Bank GR No. 11497 June 16 2004 – surface bargaining is defined as going through the motions of negotiating without any legal intent to reach an agreement.

- The union has not been able to show that the Bank had done acts, both at and away from the bargaining table, which ten to show that it did not want to reach an agreement with the Union or to settle the differences between it and the Union. They 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.” Hence the parties’ failure to agree did not amount to ULP under Art 248(g) for violation of the duty to bargain.

- BLUE SKY BARGAINING – making exaggerated or unreasonable proposals. The bank failed to show that the economic demands made by the Union were exaggerated or unreasonable. The minutes of the meeting show that the union based its economic proposals on data of rank and file employees and the prevailing economic benefits received by bank employees from other foreign banks doing business in the Philippines and other branches of the Bank in the Asian region. 

INDIVIDUAL BARGAINING - Insular life Assurance Employees- NATO Vs. Insular life Assurance Ltd.,

- it is an unfair labor practice for an employer operating under a CBA to negotiate or to attempt to negotiate with his employees individually in connection with changes in the agreement. Although the union is on strike, the employer is still under obligation to bargain with the union as the employees’ bargaining representative. 

- “The act of an employer in notifying absent employees individually during a strike following unproductive efforts at collective bargaining that the plant would be operated the next day and that their jobs were open for them should they want to come in has been held to be a ULP, as an active interference with the right of collective bargaining through dealing with the employees individually instead of through their collective bargaining representatives.”

- 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 ULP. They tend to under the concerted activity of the employees, an activity to which they are entitled free from the employer’s molestation. 

- When respondents offered reinstatement and attempted to “bribe” the strikers with “comfortable cots,” “free coffee and occasional movies,” “overtime” pay for “work performed in excess of eight hours,” and “arrangements” for their families, so they would abandon the strike and return to work, they were guilty of strike-breaking and/or union-busting and, consequently, of ULP.

- The letters should be interpreted according to the “totality of conduct doctrine,” “…whereby the culpability of an employer’s remarks were to be evaluated not only on the basis of their implicit implications, but were to be appraised against the background of and in conjunction with collateral circumstances. Under this ‘doctrine’ expressions of opinion by an employer which, though innocent in themselves, frequently were held to be culpable because of the circumstances under which they were uttered, the history of the particular employer’s labor relations or anti-union bias or because of their connection with an established collateral plan of coercion or interference.”


- Terms and conditions of employment

- An impasse is reached 

- Negotiations fail to produce any agreement

- Health

- Pension plans

- Economic provisions (wages, loan benefits, bonuses, allowances, retirement plans, other fringe benefits)

- Non-economic provisions (union security clauses, labor-management cooperation schemes, grievance procedures, and other provisions without monetary value)

BARGAINING DEADLOCK – synonymous with impasse or a standstill which presupposes reasonable effort in good faith bargaining but despite noble intentions does not conclude an agreement between the parties. 

- Deadlock does not mean the end of bargaining. It signals the need to continue the bargaining with the assistance of a third party as conciliator or arbitrator whose first aim is to get the parties to negotiate. 


1. Call upon the NCMB to intervene for the purpose of conducting conciliation preventive mediation;

2. Refer the matter for voluntary ARBITRATION or compulsory arbitration

3. Declare a STRIKE or LOCKOUT upon compliance with the legal requirements. This is the remedy of last resort. (30-day cooling period and 7-day strike ban)

ECONOMIC PROVISIONS – these involve: wage increases, loan benefits, bonuses, allowances, retirement plan and other fringe benefits. Whereas, NON-ECONOMIC PROVISIONS involve: union security clauses, labor-management cooperation schemes, grievance procedures, and other provisions without monetary value.

J. COLLECTIVE BARGAINING AGREEMENT – refers to the contract between a legitimate labor union and the employer concerning wages, hours of work, and all other terms and conditions of employment in a bargaining union, including proposals for adjusting any grievances or questions arising under such agreement. 

Davao Integrated Port vs. Abarquez – While the terms and conditions of a CBA constitute the law between the parties, it is not, however, an ordinary contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of Art. 1700 of the CC which governs the relations between labor and capital, is not merely contractual in nature but 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 purpose which it is intended to serve. 

- Interpretation fienda es tut res magis valeat quam pereat. Such interpretation is to be adopted, that the thing may continue to have efficacy rather than fail.


1. Wages and other types of compensation, including merit increases

2. Working hours and working days, including work shifts

3. Vacations and holidays

4. Bonuses

5. Pensions and retirement plans


RFM Corp Flour Division vs. KAMPI-NAFLU-KMU, GR No. 162324, 04 February 2009

- If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, as in the herein questioned provision, the literal meaning thereof shall prevail. As such, the daily-paid employees must be paid their regular salaries on the holidays which are so declared by the national government, regardless of whether they fall on rest days.

- The CBA is the law between the parties, hence, they are obliged to comply with its provisions. Indeed, if petitioner and respondents intended the provision in question to cover payment only during holidays falling on work or weekdays, it should have been so incorporated therein.

- In case of doubt in the interpretation of any law or provision affecting labor, it should be interpreted in favor of labor.

GRIEVANCE PROCEDURE – Initially, the employee presents his grievance to the shop steward. If the grievance is valid, the shop steward brings the matter to the employee’s immediate supervisor. Thereafter, the shop steward, the employee and his immediate supervisor will meet to discuss ways and means to settle the grievance. If not settlement is reach at their level, the grievance shall be referred to the grievance committee. Grievances not settled by the grievance committee shall automatically be referred to voluntary arbitration.

VOLUNTARY ARBITRATION – a system whereby the parties agree to refer their dispute to an impartial third person called voluntary arbitrator for a final and binding resolution. It differs from compulsory arbitration in the sense that in compulsory arbitration, the third party is appointed by the government. 

San Miguel Corp. vs. NLRC, 204 SCRA 1 (1999) – In abandoning the grievance proceedings and stubbornly refusing to avail of the remedies under the CBA, private respondent violated the mandatory provisions of the CBA. Abolition of departments or positions in the company is one of the recognized management prerogatives. Noteworthy is the fact that the private respondent does not question the validity of the business move of petitioner. In the absence of proof that the act of petitioner was ill-motivated, it is presumed that petitioner San Miguel Corporation acted in good faith. In fact, petitioner acceded to the demands of the private respondent union by redeploying most of the employees involved; such that from an original 17 excess employees in BLD, 15 were successfully redeployed. In AOC, out of the 17 original excess, 15 were redeployed. In the Magnolia-Manila Buying Station, out of 18 employees, 6 were redeployed and only 12 were terminated. 

- The situation of deadlock is non-existent in this case since there is a Board assigned on the 3rd level of the grievance machinery to resolve the conflicting views of the parties. Instead of asking the Conciliation Board composed of 5 representatives each from the company and the union, to decide the conflict, petitioner declared a deadlock, and thereafter, filed a notice of strike. For failing to exhaust all the steps in the grievance machinery and arbitration proceedings provided in the CBA, the notice of strike should have been dismissed by the NLRC and private respondent union ordered to proceed with the grievance and arbitration proceedings. In Liberal Labor Union v. Phil. Can Co., “the main purpose of the parties in adopting a procedure in the settlement of their disputes is to prevent a strike. This procedure must be followed in its entirety if its to achieve its objective… strike held in violation of the terms contained in the collective bargaining agreement are illegal, specially when they provide for conclusive arbitration clauses. These agreements must be strictly adhered to and respected if their ends have to be achieved…”


Malayang Samahan ng Manggagawa sa M Grenfield vs Ramos, 326 SCRA 428 – A no strike, no lock out provision can only be invoked when the strike is economic in nature, i.e., to force wage or other concessions from the employer which he is not required by law to grant. Such a provision cannot be used to assail the legality of a strike which is grounded on unfair labor practice, as was the honest belief of herein petitioners. Again, whether or not there was indeed unfair labor practice does not affect the strike.   


Art. 241(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 in 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. 

Art 222(b) – No attorney’s fees, negotiation fees or similar charges of any kind arising from any collective bargaining agreement shall be imposed on any individual member of the contracting union: Provided, however, That attorney’s 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 Feb 26 1990 – The failure of the Union to comply strictly with the requirements set out by the law invalidates the questioned special assessment. Substantial compliance is not enough in view of the fact that the special assessment will diminish the compensation of the union members. Their express consent is required. Art. 241 (n), the Union must submit to the company a written resolution of a majority of all the members at a general membership meeting duly called for the purpose. In addition, the secretary of the organization must record the minute of the meeting which, in turn, must include, among others, the list of all the members present as well as the votes cast. The Union failed to comply with the requirements. 

- Par. (o) on the other hand requires an individual written authorization duly signed by every employee in order that a special assessment may be validly checked off. The withdrawal of the authorization is equivalent to no authorization at all. There is nothing in the law which requires that the disauthorization must be in individual form. 

- Requisites : 

1. Authorization by a written resolution of the majority of all the members at the general membership meeting duly called for the purpose;

2. Secretary’s record of the minutes of the meetings;

3. Individual written authorization for check-off duly signed by the employee concerned.

EFFECT IF EMPLOYER FAILS TO IMPLEMENT CHECK OFF – Holy Cross of Davao vs Joaquin 263 SCRA 358 - The employer’s failure to make the requisite deductions may constitute a violation of a contractual commitment for which it may incur liability for unfair labor practice. But the employer does not, by that omission, incur liability to the union for the aggregate of dues or assessments uncollected from the union members or agency fees for non-union employees. The only obligation of the employer under a check-off is to effect the deductions and remit the collections to the union. 

UNION SECURITY CLAUSES; NATURE AND KINDS: imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. It is indeed compulsory union membership whose objective is to assure continued existence of the union. In a sense, there is discrimination when certain employees are obliged to join a particular union. But it is discrimination favoring unionism; it is a valid kind of discrimination.  The employer is not guilty of unfair labor practice if it merely complies 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 CBA. 

1. Closed-shop – only union members can be hired by the company and they must remain as union members to retain employment in the company.

2. Union shop – nonmembers may be hired, but to retain employment must become union members after a certain period. The requirement applies to present and future employees.

3. Modified union shop – employees who are not union members at the time of signing the contract need not join the union, but all workers hired thereafter must join.

4. Maintenance of Membership Shop – no employee is compelled to join the union, but all present or future members must, as a condition of employment, remain in good standing in the union.

5. Exclusive Bargaining Shop – the union is recognized as the exclusive bargaining agent for all employees in the bargaining unit, whether union members or not.

6. Bargaining for Members Only – the union is recognized as the bargaining agent only for its own members. 

7. Agency Shop – an agreement whereby employees must either join the union or pay to the union as exclusive bargaining agent a sum equal to that paid by the members. “free riders” unjust enrichment. A.K.A “maintenance of treasury shop.” 

The above variations are opposite of Open Shop, an arrangement which does not require union membership as a condition of employment. 

Bank of the Philippine Islands vs. BPI Employees Union – Davao Chapter – GR no. 164301

August 10, 2010 – absorbed FEBTC employees fell within the definition of “new employees” under the Union Shop Clause. Although by virtue of the merger BPI steps into the shoes of FEBTC as a successor employer as if the former had been the employer of the latter’s employees from the beginning it must be emphasized that, in reality, the legal consequences of the merger only occur at a specific date, i.e., upon its effectivity which is the date of approval of the merger by the SEC. The obligation of BPI to pay the salaries and benefits of the former FEBTC employees and its right of discipline and control over them only arose with the effectivity of the merger. Concomitantly, the obligation of former FEBTC employees to render service to BPI and their right to receive benefits from the latter also arose upon the effectivity of the merger. Hence, what is material is that all of these legal consequences of the merger took place during the life of an existing and valid CBA between BPI and the Union wherein they have mutually consented to include a Union Shop Clause. 


Olvido vs CA, 536 SCRA 81[2007] – the 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 CBA. Hence, the company may not be ordered to grant either backwages or financial assistance in the form of separation pay as a form of penalty. 

- Sicaltek did not assail the finding of the CA that petitioners were not covered by the Modified Union Shop provision in the CBA. The appellate court found that petitioners were already members of SWU when the CBA was signed on Oct 10, 1992. Thus, they could not be obliged to become members of SEU-ADFLO after the CBA was signed, and their dismissal by reason of disloyalty or disaffiliation was illegal. Such being the case, the ruling of the appellate court in this regard should now be considered final.

Inquillo vs First Philippines Scales, 588 SCRA 471 – in terminating the employment of an employee by enforcing the Union Security Clause, the employer needs only 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;

3. There is sufficient evidence to support the union’s decision to expel the employee from the union or company. 

FPSI was justified in applying the Union Security Clause, as it was a valid provision in the CBA, the existence and validity of which was not questioned by either party. Moreover, petitioners were among the 93 employees who affixed their signatures to the document that ratified the CBA. They cannot now turn their back and deny knowledge of such provision. 

FPSILU acted on its prerogative to recommend to FPSI the dismissal of the members who failed to maintain their membership with the Union. Aside from joining another rival union, FPSILU cited other grounds committed by petitioners and the other employees which tend to prejudice FPSI’s interests, i.e., dereliction of duty – by failing to call periodic membership meetings and to give financial reports; depositing union funds in the names of Grutas and former VP Yolanda Tapang, instead of in the name of FPSILU care of the President; causing damage to FPSI by deliberately slowing down production, preventing the Union from even attempting to ask for an increase in benefits from the former; and poisoning the minds of the rest of the members of the Union so that they would be enticed to join the rival union. 

FPSILU’s decision to ask for the termination of the employees in the “Petisyon” was justified and supported by the evidence on record. Bergante and Inguillo were undisputably former members of FPSILU. In fact, Inguillo was the Secretary of Finance, the underlying reason why his salary was garnished to satisfy the judgment of the Med-Arbiter who order NLM-KATIPUNAN to return the Union dues it erroneously collected from the employees. Their then affiliation with FPSILU was also clearly shown by their signatures in the document which ratified the CBA. Without a doubt, they committed acts of disloyalty to the Union when they failed not only to maintain their membership but also disaffiliated from it. They abandoned FPSILU and even joined another union which works against the former’s interests. This is evident from the intra-union dispute filed by KATIPUNAN against FPSILU. Once affiliated with KATIPUNAN, Bergante and Inguillo proceeded to recruit other employees to disaffiliate from FPSILU and even collected Union dues from them. 

SIGNING BONUS – a grant motivated by the goodwill created when a CBA is successfully negotiated and signed between the employer and the union. In contractual terms, a signing bonus is justified by and is the consideration paid for the goodwill that existed in the negotiations that culminated in the signing of a CBA. If the reason behind a signing bonus is absent, no signing bonus need be given.

Caltex refinery, supra 279 SCRA 218 – although proposed by petitioner union, the signing bonus was not accepted by private respondent (employer). Besides, a signing bonus is not a benefit which may be demanded under the law. Rather, it is now claimed by petitioner under the principle of “maintenance of existing benefits” of the old CBA. However, as clearly explained by private respondent, 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 private respondent, the condition for awarding it must be duly satisfied. In this case, the condition sine qua non for its grants – a non-strike – was not complied with. In fact, private respondent categorically stated in its counter-proposal – to the exclusion of those agreed upon before – that the new CBA would constitute the only agreement between the parties. 


BPI vs BPI Employees Union, G.R. No. 158678 – a union security clause in a CBA should be interpreted to give meaning and effect to its purpose, which is to afford protection 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. 

- Without the union shop clause or with the restrictive interpretation thereof as proposed in the dissenting opinions, the company can jeopardize the majority status of the certified union by excluding from union membership all new regular employees whom the Company will “absorb” in future mergers and all new regular employees whom the Company hires as regular from the beginning of their employment without undergoing a probationary period. In this manner, the Company can increase the number of members of the collective bargaining unit and if this increase is not accompanied by a corresponding increase in union membership, the certified union may lose its majority status and render it vulnerable to attack by another union who wishes to represent the same bargaining unit. 

- The restrictive interpretation of the union shop clause would place the certified union’s very existence at the mercy and control of the employer. Relevantly, only BPI, the employer appears to be interested in pursuing this case. 

Mitsubishi Motors Phils. Salaried Employees Union (MMPSEU) vs. Mitsubishi

Motors Phils Corp., G.R. No. 175773 – The CBA constitutes a contract between the parties and as such, it should be strictly construed for the purpose of limiting the amount of the employer’s liability. The terms of the subject provision are clear and provide no room for any other interpretation. As there is no ambiguity, the terms must be taken in their plain, ordinary and popular sense. Consequently, MMPSEU cannot rely on the rule that a contract of insurance is to be liberally construed in favor of the insured. Neither can it rely on the theory that any doubt must be resolved in favor of labor. 

National Union of Workers In Hotel Restaurant And Allied Industries (NUWHRAIN) -

Philippine Plaza Chapter vs. Philippines Plaza Inc., G.R. No. 177524, 23 July 2014 - Notably, the CBA does not specifically define the terms "negotiated contracts" and "special rates". Nonetheless, the CBA likewise does not explicitly limit the use of these terms to specified transactions. With particular reference to "negotiated contracts," the CBA does not confine its application to "airline contracts" as argued by the Union. Thus, as correctly declared by the CA, the term "negotiated contracts" should be read as applying to all types of negotiated contracts and not to "airlines contracts" only. This is in line with the basic rule of construction that when the terms are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall prevail. A constricted interpretation of this term, i.e., as applicable to "airlines contracts" only, must be positively shown either by the wordings of the CBA or by sufficient evidence of the parties' intention to limit its application. The Union completely failed to provide support for its constricted reading of the term "negotiated contracts," either from the wordings of the CBA or from the evidence. 

SIGNING AND RATIFICATION – It has been held that a collective bargaining agreement was effective on ratification by union members, even without signature by the union president or union secretary-treasurer, notwithstanding a contractual provision that the agreement "is not valid unless so countersigned," because lack of the purely ministerial act of signing the formal contract did not obviate the fact that there was a binding contract.

- ALU vs. Ferrer-Calleja, 173 SCRA 178 - Basic to the contract bar rule is the proposition that the delay of the right to select representatives can be justified only where stability is deemed paramount. Excepted from the contract bar rule are certain types of contracts which do not foster industrial stability, such as contracts where the identity of the representative is in doubt. Any stability derived from such contracts must be subordinated to the employees' freedom of choice because it does not establish the type of industrial peace contemplated by the law.


E. Razon vs. Secretary of Labor, 222 SCRA 1 - 

PURCHASER NOT REQUIRED TO ABSORB EMPLOYER OF THE SELLING CORPORATION. — MARINA might have been impelled not only by compassion for the employees but also by their tested skills in hiring them back upon their separation from the employment of ERI/MPSI. It should be recalled, however, there is no law that requires the purchaser to absorb the employees of the selling corporation (San Felipe Neri School of Mandaluyong, Inc. vs. NLRC, 201 SCRA 478 [1991], citing MDII Supervisors and Confidential Employees Association (FFW) vs. Presidential Assistant on Legal Affairs, 79 SCRA 40 [1977]). As such, when MARINA rehired the ERI/MPSI employees, it had all the right to consider them as new ones. On the other hand, ERI/MPSI, to whom years of service had been rendered by its suddenly jobless employees, had the corresponding obligation to grant them what is theirs under the law and the collective bargaining agreement.||| (E. Razon. Inc. v. Secretary of Labor and Employment, G.R. No. 85867, [May 13, 1993])

Metrobank Union vs. NLRC, 226 SCRA 268 - WAGE DISTORTION ACTUALLY EXISTS IN CASE AT BAR; ALL DOUBTS IN THE INTERPRETATION AND IMPLEMENTATION OF LABOR LAWS MUST BE RESOLVED IN FAVOR OF LABOR. — In this case, the majority of the members of the NLRC, as well as its dissenting member, agree that there is a wage distortion arising from the bank's implementation of the P25 wage increase; they do differ, however, on the extent of the distortion that can warrant the adoption of corrective measures required by the law. The "intentional quantitative differences" in wage among employees of the bank has been set by the CBA to about P900 per month as of 01 January 1989. It is intentional as it has been arrived at through the collective bargaining process to which the parties are thereby concluded. The Solicitor General, in recommending the grant of due course to the petition, has correctly emphasized that the intention of the parties, whether the benefits under a collective bargaining agreement should be equated with those granted by law or not, unless there are compelling reasons otherwise, must prevail and be given effect. In keeping then with the intendment of the law and the agreement of the parties themselves, along with the often repeated rule that all doubts in the interpretation and implementation of labor laws should be resolved in favor of labor, we must approximate an acceptable quantitative difference between and among the CBA agreed work levels.


Benguet Consolidated vs. BCI Ees Union, 23 SCRA 465 - The principle of substitution, formulated by the National Labor Relations Board, counterpart of our Court of Industrial Relations, means that where there occurs a shift in employees' union allegiance after the execution of a collective bargaining contract with their employer, the employees can change their agent - the labor union, but the collective bargaining contract which is still subsisting, continues to bind the employees up to its expiration date. They may, however, bargain for the shortening of said expiration date. And the only consideration for the "substitutionary" doctrine is the employees' interest in the existing bargaining agreement; the agent's (Union's) interest never enters into the picture.

- UNDER "SUBSTITUTIONARY DOCTRINE", EMPLOYEES CANNOT RENEGE ON THEIR COLLECTIVE BARGAINING CONTRACT; EXCEPTION. — THE "Substitutionary doctrine" provides that the employees cannot revoke the validly executed collective bargaining contract with their employer by the simple expedient of changing their bargaining agent. The new agent must respect the contract. The employees, thru their new bargaining agent, cannot renege on the collective bargaining contract, except to negotiate with management for the shortening thereof.

- NEW COLLECTIVE BARGAINING AGENT DOES NOT AUTOMATICALLY ASSUME ALL PERSONAL UNDERTAKINGS OF DEPOSED UNION; SUBSTITUTIONARY DOCTRINE, HELD INAPPLICABLE. — The "Substitutionary doctrine" cannot be invoked to support the claim that a newly certified collective bargaining agent automatically assumes all personal undertakings, such as the no-strike stipulation in this case, assumed by the deposed union. When the BBWU bound itself and its officers not to strike, it could not bind all the rival unions because the BBWU was the agent only of the employees, not of the other unions which possess distinct personalities.


1. Submission of copies of the CBA to the BLR or the regional offices of DOLE within 30 days from execution, accompanied by the following:

a. Verified proof of posting in 2 conspicuous places in the place of work; and

b. Verified proof of ratification by the majority of all the workers in the bargaining unit;

2. Action upon the application for registration within 5 calendar days from receipt thereof;

3. The regional office shall furnish the BLR with a copy of the CBA within 5 days from its submission;

4. The BLR or regional office shall assess the employer for every CBA, a registration fee of not less than P1,000 or any amount deemed appropriate by the Secretary of Labor;

5. Issuance of Certificate of Registration.

SCOPE OF AGREEMENT, WHO MAY AVAIL BENEFITS - Natl. Brewers and Allied Industries Labor Union vs San Miguel Brewery - PARTIES TO CIVIL ACTIONS; REPRESENTATIVE PARTIES; WHEN LABOR UNION MAY SUE FOR WAGES OF ITS MEMBERS. — Where the right of the members of the union to the wages in question was only recognized when the collective bargaining agreement between the union and the company was concluded, the action for said wages may be brought in the name of the union that has obliged itself to secure those wages for its members, without need of joining said members.

New Pacific Timber vs. NLRC - BENEFITS OF THE COLLECTIVE BARGAINING AGREEMENT SHOULD ALSO BE EXTENDED TO THOSE EMPLOYEES WHO ONLY BECAME SUCH AFTER THE AGREEMENT WAS ENTERED INTO; TO DEPRIVE THEM WOULD CONSTITUTE UNDUE DISCRIMINATION AND DEPRIVE THEM OF MONETARY BENEFITS THEY WOULD OTHERWISE BE ENTITLED TO UNDER A NEW COLLECTIVE BARGAINING CONTRACT TO WHICH THEY WOULD HAVE BEEN PARTIES. — Petitioner Company insists that the rank-and-file employees hired after the term of the CBA inspite of their subsequent membership in the bargaining unit, are not parties to the agreement, and certainly may not claim the benefits thereunder. We do not agree. In a long line of cases, this Court has held that when a collective bargaining contract is entered into by the union representing the employees and the employer, even the non-member employees are entitled to the benefits of the contract. To accord its benefits only to members of the union without any valid reason would constitute undue discrimination against nonmembers. It is even conceded, that a laborer can claim benefits from a CBA entered into between the company and the union of which he is a member at the time of the conclusion of the agreement, after he has resigned from said union. In the same vein, the benefits under the CBA in the instant case should be extended to those employees who only became such after the year 1984. To exclude them would constitute undue discrimination and deprive them of monetary benefits they would otherwise be entitled to under a new collective bargaining contract to which they would have been parties. Since in this particular case, no new agreement had been entered into after the CBA's stipulated term, it is only fair and just that the employees hired thereafter be included in the existing CBA. This is in consonance with our ruling that the terms and conditions of a collective bargaining agreement continue to have force and effect beyond the stipulated term when no new agreement is executed by and between the parties to avoid or prevent the situation where no collective bargaining agreement at all would govern between the employer company and its employees.


1. With respect to the representation aspect, the same lasts for 5 years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the DOLE outside the 60-day period immediately prior to the expiration of such 5 year term of the CBA.

2. With respect to all other provisions (economic and non-economic other than representational), of the CBA, it shall be renegotiated not later than 3 years after its execution.


General Milling Corporation vs General Milling Corporation Independent Labor Union, GR No.

183122 and 183889 -  Art. 253 mandates 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. In the same manner that it does not provide for any exception nor qualification on which economic provisions of the existing agreement are to retain its force and effect, the law does not distinguish between a CBA duly agreed upon by the parties and an imposed CBA like the one under consideration. 


CONTRACT BAR RULE – Sec. 3 DO 9 – The representation status of the incumbent exclusive bargaining representative which is a party to a duly registered CBA shall be for a term of 5 years… All other provisions of said agreement shall, as a matter of right, be renegotiated not later than 3 years after its execution. Any agreement on such other provisions entered into within 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 6 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. 

Section 4. Exception to 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.

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) days within which to resolve the appeal and its decision shall be final and executory.


FVC Labor Union – Phil Transport and General Workers Org vs Sama-samang Nagkakaisang

Maggagawa sa FVC-Solidarity, GR No. 176249, Nov 27 2009 – While the parties may agree to extend the CBA’s original 5-year term together with all other CBA provisions, any such amendment or term in excess of 5 years will not carry with it a change in the union’s exclusive collective bargaining status. By express provision of the above-quoted Article 253-A, the exclusive bargaining status cannot go beyond 5 years and the representation status is a legal matter not for the workplace parties to agree upon. In other words, despite an agreement for a CBA with a life of more than 5 years, either as an original provision or by amendment, the bargaining union’s exclusive bargaining status is effective only for 5 years and can be challenged within 60 days prior to the expiration of the CBA’s first 5 years. As held in San Miguel Employees Union v. Confesor, San Miguel - In the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a term of three (3) years or one which does not coincide with the said five-year term and said agreement is ratified by majority of the members in the bargaining unit, the subject contract is valid and legal and therefore, binds the contracting parties. The same will however not adversely affect the right of another union to challenge the majority status of the incumbent bargaining agent within sixty (60) days before the lapse of the original five (5) year term of the CBA. 

In the present case, the CBA was originally signed for a period of five years, i.e., from February 1, 1998 to January 30, 2003, with a provision for the renegotiation of the CBA's other provisions at the end of the 3rd year of the five-year CBA term. Thus, prior to January 30, 2001 the workplace parties sat down for renegotiation but instead of confining themselves to the economic and non-economic CBA provisions, also extended the life of the CBA for another four months, i.e., from the original expiry date on January 30, 2003 to May 30, 2003.

As discussed above, this negotiated extension of the CBA term has no legal effect on the FVCLU-PTGWO's exclusive bargaining representation status which remained effective only for five years ending on the original expiry date of January 30, 2003. Thus, sixty days prior to this date, or starting December 2, 2002, SANAMA-SIGLO could properly file a petition for certification election. Its petition, filed on January 21, 2003 or nine (9) days before the expiration of the CBA and of FVCLU-PTGWO's exclusive bargaining status, was seasonably filed.

We thus find no error in the appellate court's ruling reinstating the DOLE order for the conduct of a certification election. If this ruling cannot now be given effect, the only reason is SANAMA-SIGLO's own desistance; we cannot disregard its manifestation that the members of SANAMA themselves are no longer interested in contesting the exclusive collective bargaining agent status of FVCLU-PTGWO. This recognition is fully in accord with the Labor Code's intent to foster industrial peace and harmony in the workplace.

RETROACTIVITY - Union of Filipino Employees vs NLRC, 23 SCRA 465 -The assailed resolution which incorporated the CBA to be signed by the parties was promulgated June 5, 1989, and hence, outside the 6 month period from June 30, 1987, the expiry date of the past CBA. Based on the provision of Section 253-A, its retroactivity should be agreed upon by the parties. But since no agreement to that effect was made, public respondent did not abuse its discretion in giving the said CBA a prospective effect. The action of the public respondent is within the ambit of its authority vested by existing laws. 

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 respondent's 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.

Manila Electric Company vs. Quisumbing, 302 SCRA 173 (1999-  RETROACTIVITY OF THE CBA

Finally, MERALCO also assails the Secretary's order that the effectivity of the new CBA shall retroact to December 1, 1995, the date of the commencement of the last two years of the effectivity of the existing CBA. This retroactive date, MERALCO argues, is contrary to the ruling of this Court in Pier 8 Arrastre and Stevedoring Services, Inc. vs. Roldan-Confesor 47 which mandates that the effective date of the new CBA should be the date the Secretary of Labor has resolved the labor dispute.

On the other hand, MEWA supports the ruling of the Secretary on the theory that he has plenary power and discretion to fix the date of effectivity of his arbitral award citing our ruling in St. Lukes Medical Center, Inc. vs. Torres. 48 MEWA also contends that if the arbitral award takes effect on the date of the Secretary Labor's ruling on the parties' motion for reconsideration (i.e., on December 28, 1996), an anomaly situation will result when CBA would be more than the 5-year term mandated by Article 253-A of the Labor Code.

However, neither party took into account the factors necessary for a proper resolution of this aspect. Pier 8, for instance, does not involve a mid-term negotiation similar to this case, while St. Lukes does not take the "hold over" principle into account, i.e., the rule that although a CBA has expired, it continues to have legal effects as between the parties until a new CBA has been entered into. 49

Article 253-A serves as the guide in determining when the effectivity of the CBA at bar is to take effect. It provides that the representation aspect of the CBA is to be for a term of 5 years, while

". . . [A]ll other provisions of the Collective Bargaining Agreement shall be re-negotiated not later than 3 years after its execution. Any agreement on such other provision of the Collective Bargaining Agreement entered into within 6 months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement shall retroact to the day immediately following such date. If such agreement is entered into beyond 6 months, the parties shall agree on the duration of the effectivity thereof. . . ."

Under these terms, it is clear that the 5-year term requirement is specific to the representation aspect. What the law additionally requires is that a CBA must be re-negotiated within 3 years "after its execution." It is in this re-negotiation that gives rise to the present CBA deadlock.

If no agreement is reached within 6 months from the expiry date of the 3 years that follow the CBA execution, the law expressly gives the parties — not anybody else — the discretion to fix the effectivity of the agreement.

Significantly, the law does not specifically cover the situation where 6 months have elapsed but no agreement has been reached with respect to effectivity. In this eventuality, we hold that any provision of law should then apply for the law abhors a vacuum. 50

One such provision is the principle of hold over, i.e., that in the absence of a new CBA, the parties must maintain the status quo and must continue in full force and effect the terms and conditions of the existing agreement until a new agreement is reached. 51 In this manner, the law prevents the existence of a gap in the relationship between the collective bargaining parties. Another legal principle that should apply is that in the absence of an agreement between the parties, then, an arbitrated CBA takes on the nature of any judicial or quasi-judicial award; it operates and may be executed only respectively unless there are legal justifications for its retroactive application.

Consequently, we find no sufficient legal ground on the other justification for the retroactive application of the disputed CBA, and therefore hold that the CBA should be effective for a term of 2 years counted from December 28, 1996 (the date of the Secretary of Labor's disputed order on the parties' motion for reconsideration) up to December 27, 1999.

WHEREFORE, the petition is granted and the orders of public respondent Secretary of Labor dated August 19, 1996 and December 28, 1996 are set aside to the extent set forth above. The parties are directed to execute a Collective Bargaining Agreement incorporating the terms and conditions contained in the unaffected portions of the Secretary of Labor's orders of August 19, 1996 and December 28, 1996, and the modifications set forth above. The retirement fund issue is remanded to the Secretary of Labor for reception of evidence and determination of the legal personality of the MERALCO retirement fund.