2010 LABOR BAR EXAM II (b)Differentiate surface bargaining from blue-sky bargaining.

(2%) SUGGESTED ANSWER: Surface bargaining is defined as going through the motions of negotiating without any legal intent to reach an agreement. This kind of unfair labor practice may only be committed by the employer. According to STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE) VS. Confesor, it involves the question of whether an employers conduct demonstrates an unwillingness to bargain in good faith or is merely hard bargaining. Blue-sky bargaining means making exaggerated or unreasonable proposals. This kind of ULP may only be committed by the Bargaining union. V Company XYZ has two recognized labor unions, one for its rankand-file employees (RFLU), and one for supervisory employees (SELU). Of late, the company instituted a restructuring program by virtue of which A, a rank-and-file employee and officer of RFLU, was promoted to a supervisory position along with four (4) other colleagues, also active union members and/or officers. Labor Union KMJ, a rival labor union seeking recognition as the rank-and-file bargaining agent, filed a petition for the cancellation of the registration of RFLU on the ground that A and her colleagues have remained to be members of RFLU. Is the petition meritorious? Explain. (3%) SUGGESTED ANSWER: The petition is unmeritorious. The mixed membership of supervisors and rank-and-file cannot be invoked as a ground for cancellation of the registration of the unions registration. Under Article 245-A of the LC, the employees so improperly included are automatically deemed removed from the list of members of said union. The removal from the said list is by operation of law. It is inconsequential that A is an officer of the RFLU. VI A is a member of the labor union duly recognized as the sole bargaining representative of his company. Due to a bargaining deadlock, 245 members of the 500-strong union voted on March 13, 2010 to stage a strike. A notice of strike was submitted to the National Conciliation and Mediation Board on March 16, 2010. Seven days later or on March 23, 2010, the workers staged a strike in the course of which A had to leave and go to the hospital where his wife had just delivered a baby. The union members later intimidated and barred other employees from entering the work premises, thus paralyzing the business operations of the company. A was dismissed from employment as a consequence of the strike. Was the strike legal? Explain. (3%) SUGGESTED ANSWER: No. The strike is illegal. Under Art. 263 (f),the union shall furnish the Ministry the result of the voting at least seven days before the intended strike subject to the cooling off period herein provided. Further, in Art 263 (c) In case of bargaining deadlock, the duly certified or recognized bargaining agent may file a notice of strike with the Ministry at least 30 days before the intended strike. In the case at bar, the strike is illegal for failure to comply with the prescribed mandatory cooling off period and the 7-day waiting period or strike/lockout ban after the submission of the report on the strike. Was As dismissal valid? Why or why not? (3%) SUGGESTED ANSWER: No. As dismissal is invalid. IX A was working as a medical representative of RX pharmaceutical company when he met and fell in love with B, a marketing strategist for Delta Drug Company, a competitor of RX. On several occasions, the management of RX called As attention to the stipulation in his employment contract that requires him to disclose any relationship by consanguinity or affinity with coemployees or employees of competing companies in light of a possible conflict of interest. A seeks your advice on the validity of the company policy. What would be your advice? (3%) SUGGESTED ANSWER: I will advise A that the company policy is valid. In the case of Duncan Asssociation vs. Glaxo (2004), the Supreme Court held that the stipulation in the company policy is a valid exercise of management prerogative. The prohibition against personal or marriage relationships with employees of competitor-companies upon its employees is reasonable under the circumstances because relationship of that nature might compromise the interest of the company. In laying down the assailed company policy, the employer only aims to protect its interest against the possibility that a company competitor will gain access to its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information. The employer has the prerogative to establish a certain company policy on personal/marriage relationship of its employees to protect its interest. X A, an employee of XYZ Cooperative, owns 500 shares in the cooperative. He has been asked to join the XYZ Cooperative Employees Association. He seeks your advice on whether he can join the association. What advice will you give him? (3%) SUGGESTED ANSWER: A is not a union officer but a union member. He did not participate in the commission of the illegal acts during the staged strike as he left to go to the hospital. Hence, A is illegally dismissed by the company. The mere finding or declaration of illegality of strike will not result in the termination of ordinary union members. For an ordinary union member to suffer termination, it must be shown that he has committed illegal acts during a strike. VIII ABC Company and U labor union have been negotiating for a new Collective Bargaining Agreement (CBA) but failed to agree on certain economic provisions of the existing agreement. In the meantime, the existing CBA expired. The company thereafter refused to pay the employees their midyear bonus, saying that the CBA which provided for the grant of midyear bonus to all company employees had already expired. Are the employees entitled to be paid their midyear bonus? Explain your answer. (3%) SUGGESTED ANSWER: Yes, the company employees are entitled to be paid their midyear bonus. Under Article 253 of the LC, 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. This principle is otherwise known as the AUTOMATIC RENEWAL CLAUSE. Pending the renewal of the CBA, ABC Company and U labor union are bound to keep the status quo and treat the terms and conditions embodied therein still in full force and effect until new agreement is negotiated and ultimately concluded by the parties. Hence, the employees are entitled to the midyear bonus provided under the expired CBA. Under Article 264 (a) [third par], any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status.

I will advice A that he cannot join the association. Members of a cooperative have no right to form or join labor organizations for purposes of collective bargaining for being themselves co-owners of the cooperative. This prohibition covers employees of the cooperative who are at the same time members thereof. [Cooperative Rural Bank of Davao City vs. Ferrer-Calleja] It is the fact of ownership of the cooperative and not involvement in the management thereof which disqualifies a member from joining any labor organization within the cooperative. A being a co-owner and employee at the same time of XYZ Cooperative cannot form or join the XYZ Cooperative Employees Association. XIII A is employed by XYZ Company where XYZ Employees Union (XYZ-EU) is the recognized exclusive bargaining agent. Although A is a member of rival union XYR-MU, he receives the benefits under the CBA that XYZ-EU had negotiated with the company. XYZ-EU assessed A a fee equivalent to the dues and other fees paid by its members but A insists that he has no obligation to pay said dues and fees because he is not a member of XYZEU and he has not issued an authorization to allow the collection. Explain whether his claim is meritorious. (3%) SUGGESTED ANSWER: The claim of A is unmeritorious. Under Article 248 (e) [last par], employees of an appropriate 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 CBA. Provided, that the authorization required under Article 242 (o) of this Code shall not apply to the non-members of the recognized collective bargaining agent. Since A is not a member of XYZ-EU and he receives/avails the benefits under the CBA that XYZ-EU negotiated with the company, XYZ-EU can assessed Agency fees from A equivalent to the dues and other fees paid by its members. There is no need for As authorization to allow the collection as it is expressly provided under the above-provision that it will not apply to nonmembers of the recognized bargaining unit. XV Samahang Manggagawa ng Terracota, a union of supervisory employees at Terracota Inc., recently admitted a member of the companys managerial staff, A, into the union ranks. Should A be a member of the supervisory union? Explain. (2%)

are automatically deemed removed from the list of members of said union. A is an employee outside the bargaining unit, his inclusion is not a ground for the cancellation of the unions registration but he must be automatically deemed removed from the list of members of the said union. The removal from the said list is by operation of law. XVI On the first day of collective bargaining negotiations between rank-and-file Union A and B Bus Company, the former proposed a P45/day increase. The company insisted that ground rules for negotiations should first be established, to which the union agreed. After agreeing on ground rules on the second day, the union representatives reiterated their proposal for a wage increase. When company representatives suggested a discussion of political provisions in the Collective Bargaining Agreement as stipulated in the ground rules, union members went on mass leave the next day to participate in a whole-day prayer rally in front of the company building. The company filed a petition for assumption of jurisdiction with the Secretary of Labor and Employment. The Union opposed the petition, arguing that it did not intend to stage a strike. Should the petition be granted? Explain. (2%) SUGGESTED ANSWER: The term Strike encompasses not only concerted stoppage of work but also Mass leaves The Union contended that assuming that the mass leave will be considered as a strike, the same was valid because of the refusal of the company to discuss the economic provisions of the CBA. Rule on the contention. (2%) SUGGESTED ANSWER: The strike is invalid. Under Article 264 (a) of the LC, no labor organization or employer shall declare a strike or lockout without first having bargained collectively in accordance with title VII of this book or without having filed the notice required in Article 263 or without the necessary strike or lockout vote first having been obtained and reported to the NCMB. The refusal of the company to discuss the economic provision of the CBA will not make the strike valid as there are requirements provided by law to be complied with before the union can staged a valid strike. Union member AA, a pastor who headed the prayer rally, was served a notice of termination by management after it filed the petition for assumption of jurisdiction. May the company validly terminate AA? Explain. (2%) SUGGESTED ANSWER:

SUGGESTED ANSWER: No. The company cannot validly terminated AA. No. A should not be a member of the supervisory union. Under Article 245, Managerial employees are not eligible to join, assist or form any labor organization. Since A is a member of the companys managerial staff, he is absolutely prohibited to join the union of supervisory employeesSamahang Manggagawa ng Terracota for collective bargaining as he is ineligible to join, assist or form any labor organization. Assuming that A is ineligible to join the union, should the registration of Samahang Manggagawa ng Terracota be cancelled? Explain. (3%) SUGGESTED ANSWER: No. As ineligibility to join union cannot be considered as a ground for the cancellation of the registration of Samahang Manggagawa ng Terracota. Under Article 245-A of the LC, the inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees According to Article 264 (a) [third par], any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status. AA is a union member and not a union officer. He cannot be validly terminated unless he knowingly participates in the commission of illegal acts during a strike. Only then may AA be declared to have lost his employment status. XIX Several employees and members of Union A were terminated by Western Phone Co. on the ground of redundancy. After complying with the necessary requirements, the Union staged a strike and picketed the premises of the company. The management then filed a petition for the Secretary of Labor and Employment to assume jurisdiction over the dispute. Without the benefit of a hearing, the Secretary issued an Order to assume jurisdiction and for the parties to revert to the status quo ante litem. Was the order to assume jurisdiction legal? Explain. (2%)

SUGGESTED ANSWER: Yes. The order to assume jurisdiction is legal. Under Article 263 (g) of the LC, when, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. There is no need for prior hearing in the issuance of the assumption order by the Secretary to be legal. The Secretary of the Labor and Employment validly issued the order to assume jurisdiction as Western Phone Co. is an industry indispensable to national interest. It can be regarded as playing a vital role in communication as other mass media. Under the same set of facts the Secretary instead issued an Order directing all striking workers to return to work within 24 hours, except those who were terminated due to redundancy. Was the Order legal? Explain. (3%) SUGGESTED ANSWER: No. The order was illegal. According to Article 263 (g) of the LC, if one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return-to-work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. Redundant employees whose termination brought about the labor dispute must be included in the return-to-work-order. The Secretary of Labor is afforded plenary and broad powers, and is granted great breadth of discretion to adopt the most reasonable and expeditious way of writing finis to the labor dispute [YSS EMPLOYEES UNION VS. YSS LABORATORIES, INC. (2009)] The Orders dated 11 May 2001 and 9 June 2001 were issued by the Secretary of Labor, with the end in view of preserving the status quo ante while the main issues of the validity of the retrenchment and legality of the strike were being threshed out in the proper forum. This was done for the promotion of the common good, considering that a lingering strike could be inimical to the interest of both employer and employee. The Secretary of Labor acts to maintain industrial peace. Thus, his certification for compulsory arbitration is not intended to interfere with the managements rights but to obtain a speedy settlement of the dispute. The very nature of a return-to-work order issued in a certified case lends itself to no other construction. The certification attests to the urgency of the matter, affecting as it does an industry indispensable to the national interest. The order is issued in the exercise of the courts compulsory power of arbitration, and therefore must be obeyed until set aside. x x x. Certainly, the determination of who among the strikers could be admitted back to work cannot be made to depend upon the discretion of employer, lest we strip the certification or assumption-of-jurisdiction orders of the coercive power that is necessary for attaining their laudable objective. The return-towork order does not interfere with the managements prerogative, but merely regulates it when, in the exercise of such right, national interests will be affected. The rights granted by the Constitution are not absolute. They are still subject to control and limitation to ensure that they are not exercised arbitrarily. The interests of both the employers and employees are intended to be protected and not one of them is given undue preference. XXIV Rank-and-file workers from Peacock Feathers, a company with 120 employees, registered their independent labor organization with the Department of Labor and Employment (DOLE) Regional Office. Management countered with a petition to cancel the unions registration on the ground that the minutes of ratification of the union constitution and by-laws submitted to the DOLE were fraudulent. Specifically, management presented affidavits of ten (10) out of forty (40) individuals named in the list of union members who participated in the ratification, alleging that they were not present at the supposed January 1, 2010 meeting held

for the purpose. The union argued that the stated date of the meeting should have read January 11, 2010, instead of January 1, 2010, and that, at any rate, the other thirty (30) union members were enough to register a union. Decide with reason. (3%) SUGGESTED ANSWER: The petition for unions registration should not be dismissed. The other thirty (30) union members were enough to register a union and the minutes of the ratification is not fraudulent with respect to the said thirty union members. As provided in Article 234 (c) of the LC, in case the applicant is an independent union, the names of all its members comprising at least twenty percent (20%) of all employees in the bargaining unit where it seeks to operate and (d) of the LC, Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated it. SS VENTURE INTERNATIONAL VS. SS VENTURES LABOR UNION (2008) It cannot be over-emphasized that the registration or the recognition of a labor union after it has submitted the corresponding papers is not ministerial on the part of the BLR. Far from it. After a labor organization has filed the necessary registration documents, it becomes mandatory for the BLR to check if the requirements under Art. 234[19] of the Labor Code have been sedulously complied with.[20] If the unions application is infected by falsification and like serious irregularities, especially those appearing on the face of the application and its attachments, a union should be denied recognition as a legitimate labor organization. Prescinding from these considerations, the issuance to the Union of Certificate of Registration No. RO300-00-02-UR-0003 necessarily implies that its application for registration and the supporting documents thereof are prima facie free from any vitiating irregularities. The assailed inclusion of the said 82 individuals to the meeting and proceedings adverted to is not really fatal to the Unions cause for, as determined by the BLR, the allegations of falsification of signatures or misrepresentation with respect to these individuals are without basis. To our mind, the relevancy of the 82 individuals active participation in the Unions organizational meeting and the signing ceremonies thereafter comes in only for purposes of determining whether or not the Union, even without the 82, would still meet what Art. 234(c) of the Labor Code requires to be submitted The cancellation of a unions registration doubtless has an impairing dimension on the right of labor to self-organization. Accordingly, we can accord concurrence to the following apt observation of the BLR: [F]or fraud and misrepresentation [to be grounds for] cancellation of union registration under Article 239 [of the Labor Code], the nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union members. XXV Company C, a toy manufacturer, decided to ban the use of cell phones in the factory premises. In the pertinent Memorandum, management explained that too much texting and phone-calling by employees disrupted company operations. Two employees members of Union X were terminated from employment due to violation of the memorandum-policy. The union countered with a prohibitory injunction case (with prayer for the issuance of a temporary restraining order) filed with the Regional Trial Court, challenging the validity and constitutionality of the cell phone ban. The company filed a motion to dismiss, arguing that the case should be referred to the grievance machinery pursuant to an existing Collective Bargaining Agreement with Union X, and eventually to Voluntary Arbitration. Is the company correct? Explain. (3%)

SUGGESTED ANSWER: No. The company is not correct that the case should be referred to the grievance machinery and eventually to the voluntary arbitration. Thus, where the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the labor arbiter and the NLRC. In such situations, resolution of the dispute requires expertise, not in labor management relations nor in wage structures and other terms and conditions of employment, but rather in the application of the general civil law. Clearly, such claims fall outside the area of competence or expertise ordinarily ascribed to labor arbiters and the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears.[19] If We divest the regular courts of jurisdiction over the case, then which tribunal or forum shall determine the constitutionality or legality of the assailed CBA provision? This Court holds that the grievance machinery and voluntary arbitrators do not have the power to determine and settle the issues at hand. They have no jurisdiction and competence to decide constitutional issues relative to the questioned compulsory retirement age. Their exercise of jurisdiction is futile, as it is like vesting power to someone who cannot wield it.