Q: KMDD-CFW is a union whose CBA with the company A expired.

During
renegotiations, the management panel arrived late causing the union panel to walk
out. The management addressed a letter of apology to the union and requested for
negotiations to resume. The union panel did not show up despite letters from
management advising the former of the CBA meetings. Consequently, the union
struck. A complaint was filed by Golden Donuts to declare the strike illegal.
Counsel for the union strikers pleaded for a compromise whereupon a 257 out of
262 members agreed to a compromise settlement whereby they shall be paid
separation pay in exchange for the dismissal of the criminal and unfair labor
practice cases filed by petitioners against them. Could the union compromise or
waive the rights to security of tenure and money claims of its minority members,
without the latters consent?

A: No. Absent a showing of the unions special authority to compromise the

individual claims of private respondents for reinstatement and backwages, there is
no valid waiver of the aforesaid rights. The judgment of the Labor Arbiter upholding
the dismissal of private respondents based on the compromise agreement does not
have the effect of res judicata those who did not agree thereto since the
requirement of identity of parties is not satisfied. A judgment upon a compromise
agreement is conclusive only upon parties thereto and their privies. Private
respondents have not waived their right to security of tenure nor can they be barred
from entitlement of their individual claims. Since there was no evidence that
private respondents committed any illegal act, petitioners failure to reinstate them
after the settlement of the strike amounts to illegal dismissal. (Golden Donuts, Inc.
v. NLRC, G.R. Nos. 113666-68, January 19, 2000)

BOY SCOUTS OF THE PHILIPPINES,

petitioner,vs.
NATIONAL LABOR RELATIONS COMMISSION, FORTUNATO ESGUERRA,
ROBERTOMALABORBOR, ESTANISLAO MISA, VICENTE EVANGELISTA, and
MARCELINOGARCIA,
respondents
.
Julio Lopez as Petitioner.
1.Private respondents Fortunato C. Esquerra, Roberto O. Malaborbor, Estanislao M.
Misa, Vicente N.Evangelista and Marcelino P. Garcia, had all been rank-and-file
employees of petitioner Boy Scoutsof the Philippines ("BSP"). At the time of

termination of their services, private respondents werestationed at the BSP Camp in

Makiling, Los Baos, Laguna.
2.The Sec Gen of BSP issued special orders addressed separately to the
5respondents informing them to be transferred f
rom the BSP Camp in Makiling to the BSPLand Grant in Asuncion, Davao del Norte.
Private respondents opposed and appealed the matter tothe BSP National
Pres.3.Petitioner BSP conducted a pre-transfer briefing at its National Headquarters
in Manila. Privaterespondents were there assured that their transfer to Davao del
Norte would not involve anydiminution in salary, and that each of them would
receive a relocation allowance equivalent to onemonth's basic pay. However, it
failed to persuade private respondents to abandon their opposition.4.A complaint
for illegal transfer was filed by Private Respondents with the then Ministry of Labor
andEmployment, Sub-Regional Arbitration Branch IV, San Pablo City, Laguna to
enjoin implementationof Special Orders, alleging that said orders were "indubitable
and irrefutable action[s] prejudicial notonly to [them] but to [their] families and
[would] seriously affect [their] economic stability andsolvency considering the
present cost of living."5.The BSP National President said that their refusal to comply
with the Special Orders was notsufficiently justified and constituted rank
disobedience. Memoranda subsequently issued by the BSPSecretary-General
stressed that such refusal as well as the explanations proffered therefor,
wereunacceptable and could altogether result in termination of employment with
petitioner BSP. Still,private respondents continued to disobey the disputed transfer
orders.6.A five-day suspension was imposed on the 5 private respondents.
Subsequently, by Special Order issued by the BSP Secretary-General, private
respondents' services were ordered terminated.
7.The private respondents then amended their complaint to include charges of
illegal
dismissal and unfair labor practice against petitioner BSP. The Labor Arbiter ordered
the dismissalof private respondents' complaint for lack of merit. However, the ruling
of the Labor Arbiter wasreversed by public respondent, NLRC.
8.
Solicitor General on behalf of public respondent NLRC; private respondents stated in
their AppealMemorandum
11
with the NLRC that petitioner BSP is "
by mandate of law a Public Corporation
"

ISSUE: Whether
or not the BSP is embraced within the Civil Service as that term is defined in Article
IX (B) (2) (1) of the 1987 Constitution (The Civil Service embraces all branches,
subdivisions,instrumentality mentalities and agencies of the Government, including
government-owned or controlled corporations with original charters.) --
will determine whether or not private respondentNLRC had jurisdiction to render the
Decision and Resolution which are here sought to be nullified.
HELD:
While the BSP may be seen to be a mixed type of entity, combining aspects of both
public and private entities, we believe that considering the character of its purposes
and its functions, the statutory designation of the BSP as "a public corporation" and
the substantial participation of the Government in the selection of members of the
National Executive Board of the BSP, the BSP, as presently constituted under its
charter, is a government-controlled corporation within the meaning of Article IX. (B)
(2) (1) of the Constitution.

We are fortified in this conclusion when we note that the Administrative Code of
1987 designates the BSP as one of the attached agencies of the Department of
Education, Culture and Sports ("DECS"). 20 An "agency of the Government" is
defined as referring to any of the various units of the Government including a
department, bureau, office, instrumentality, government-owned or-controlled
corporation, or local government or distinct unit therein. 21 "Government
instrumentality" is in turn defined in the 1987 Administrative Code in the following
manner:

Instrumentality refers to any agency of the National Government, not integrated

within the department framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers, administering special funds,
and enjoying operational autonomy usually through a charter. This term includes
regulatory agencies, chartered institutions and government-owned or controlled
corporations. 22 (Emphasis supplied)

The same Code describes a "chartered institution" in the following terms:

Chartered institution refers to any agency organized or operating under a special

charter, and vested by law with functions relating to specific constitutional policies
or objectives. This term includes the state universities and colleges, and the
monetary authority of the State. 23 (Emphasis supplied)

We believe that the BSP is appropriately regarded as "a government

instrumentality" under the 1987 Administrative Code.

It thus appears that the BSP may be regarded as both a "government controlled
corporation with an original charter" and as an "instrumentality" of the Government
within the meaning of Article IX (B) (2) (1) of the Constitution. It follows that the
employees of petitioner BSP are embraced within the Civil Service and are
accordingly governed by the Civil Service Law and Regulations.

BLISS vs. Calleja

the Civil Service embraces government-owned or controlled corporations with

original charter; and, therefore, by clear implication, the Civil Service does not
include government-owned or controlled corporations which are organized as
subsidiaries of government-owned or controlled corporations under the general
corporation law. 8

A corporation is created by operation of law. It acquires a judicial personality either

by special law or a general law. The general law under which a private corporation
may be formed or organized is the Corporation Code, the requirements of which
must be complied with by those wishing to incorporate. Only upon such compliance
will the corporation come into being and acquire a juridical personality, thus giving
rise to is right to exist and act as a legal entity. On the other hand, a government
corporation is normally created by special law, referred to often as a charter. 9

BDC is a government-owned corporation created under the Corporation Law. It is

without a charter, governed by the Labor Code and not by the Civil Service Law
hence, Executive Order No. 180 does not apply to it.

Davao City Water District vs. CSC

Issue: Whether or not the Local Water Districts formed and created pursuant to the
provisions of Presidential Decree No. 198, as amended, are government-owned or
controlled corporations with original charter falling under the Civil Service Law
and/or covered by the visitorial power of the Commission on Audit.

Held: water districts government-owned or controlled corporations with original

charter.

As early as Baguio Water District v. Trajano, et al., (G.R. No. 65428, February 20,
1984, 127 SCRA 730), We already ruled that a water district is a corporation created
pursuant to a special law P.D. No. 198, as amended, and as such its officers and
employees are covered by the Civil Service Law.

By "government-owned or controlled corporation with original charter," We mean

government owned or controlled corporation created by a special law and not under
the Corporation Code of the Philippines.

Atlas Lithograhic Services Inc v Laguesma and Kampil-Katipunan

Supervisors and Rank and File Union Association (prohibition)

LC245 January 6, 1962 J. Gutierrez, Jr. FACTS: KAMPIL-KATIPUNAN is the local union
of the national labor organization Kaisahan ng Manggagawang Pilipino, a national
labor organization of rank and file employees. KAMPIL-KATIPUNAN files an
application for a certifcation election on behalf of the supervisory, administrative
personnel, production, accounting and confidential employees of ATLAS for the
purpose of collective bargaining negotiations. ATLAS. contends the application of
KAMPIL-KATIPUNAN

KAMPIL-KATIPUNAN cannot represent the supervisory employees for the purpose of

collective bargaining because they already represent rank and file employees. DOLE
Med-Arbiter


IN FAVOR OF KAMPIL-KATIPUNAN ATLAS appealed to the SOLE SOLE

affirmed Med-arbiter ATLAS now argues that KAMPIL-KATIPUNAN should not be

granted the certification election because by doing so, they are allowed to affiliate
with rank and file employees which is in violation of LC245
ISSUE:
Whether a local union of supervisory employeesmay be allowed to affiliate with a
national federation of labor organizations of rank-and-file employees for purposeof
CBA?
No! This violates the prohibition of affiliation of rank and file employees with
supervisory employees. DISPOSITIVE: DOLE decisions reversed. Petition of ATLAS is
granted.

Prohibition of co-mingling in LC 245 extends to joining national federations

The prohibition against a supervisors' union joining a local union of rank-and-file is

replete with jurisprudence.

The Court emphasizes that the limitation is not confined to a case of supervisors
wanting to join a rank-and-file local union.

The prohibition extends to a supervisors' local union applying for membership in a

national federation the members of which include local unions of rank-and-file
employees. The intent of the law is clear especially where, as in the case at bar, the
supervisors will be co-mingling with those employees whom they directly supervise
in their own bargaining unit.
Conflict of Interest may ensue

Conflict of interest may arise in the areas of discipline, collective bargaining and
strikes.


Members of the supervisory unionmight refuse to carry out disciplinary measures
againsttheir co-member rank-and-file employees.
Prohibition in LC245

The Court construes Article 245 to mean that supervisors shall not be given an
occasion to bargain together with the rank-and-file against the interests of the
employer regarding terms and conditions of work.

Thus, if the intent of the law is to avoid a situation where supervisors would merge
with the rank and-file or where the supervisors' labor organization would represent
conflicting interests, then a local supervisors' union should not be allowed to affiliate
with the national federation of union of rank-and-file employees where that
federation actively participates in union activity in the company.

Sugbuanon Rural Bank, Inc. v. Laguesma [324 SCRA 425, February 2, 2000]
Tuesday, January 27, 2009 Posted by Coffeeholic Writes
Labels: Case Digests, Labor Law
FACTS: Sugbuanon Rural Bank employed some 5 supervisory employees. APSOLTEUTUCP, a legitimate labor organization, then filed a petition for certification election
of the said supervisory employees. The bank opposed the petition on the ground
that the supervisory employees were actually managerial/confidential employees. In
addition, the union was represented in the petition by ALU-TUCP, and since
according to the Bank the latter also sought to represent the rank and file members,
granting the petition would violate the principle of separation of unions.

ISSUE: Should the petition for certification election be granted, or denied?

HELD: It should be granted. For one, the supervisory employees cannot be

considered managerial or confidential employees. While the nature of the
employees work (evaluating borrowers capacity to pay, approving loans,
scheduling terms of repayment of the latter, and endorsing delinquent accounts to
legal counsel for collection) indeed constituted the core of the banks business, their
functions did not fall within the definition of either a managerial employee (lay down
and execute management policies related to labor relations) or a confidential
employee (they did not act in a confidential capacity to persons who formulate and
execute management policies related to labor relations). Secondly, granting the
petition would not be violative of the separation of union doctrine. The petition for
certification election was filed by APSOTEU-TUCP, a legitimate labor organization.
True, it was assisted to some extent by ALU and the national federation TUCP.
However, APSOTEU-TUCP had separate legal personality from ALU and TUCP, under
the principle that a local union maintains its separate legal personality despite
affiliation with a national federation.

Q. Supervisory employees of SMC were retired prior to reaching the compulsory age
of 60 pursuant to a CBA reducing optional retirement to fifteen years. They claim
that their signatures in conformity with their retirement from the service were
secured through threats, and that the employees had no choice but no accept the
benefits. Were the employees validly retired? Did their acceptance of benefits
amount to estoppel?

A. No the employees were not validly retired. The mere absence of actual physical
force to compel them to ink their application for retirement did not make it
voluntary. They were confronted with the danger of being jobless. Their
acceptance of benefits did not likewise amount to estoppel. If the intention to retire
is not clearly established or if the retirement is involuntary, such is to be treated as
a discharge. In any case, the CBA is not applicable to them as it expressly excluded
supervisory positions which petitioners occupy. (San Miguel Corporation v. NLRC;
July 23, 1999)

Q. San Miguel Corporation shut down some of its plants and declared 55 positions
as redundant, in order to streamline operations due to financial losses.
Consequently, the union filed several grievance cases for the said retrenched
employees, and sought the redeployment of said employees to other divisions of
the company. Grievance proceedings were conducted pursuant to the parties'
Collective Bargaining Agreement. The procedure outlined in the CBA required the
settlement of grievances on 3 levels - department manager, plant manager, and a
conciliation board. During the proceedings, many employees were redeployed,

some accepted early retirement. San Miguel informed the union that the remaining
employees would be terminated, if they could not be redeployed. Subsequently, the
union filed a notice of strike with the NCMB of the DOLE due to a bargaining
deadlock and gross violation of the CBA such as non-compliance with the grievance
procedure. On the other hand, San Miguel filed a complaint with the NLRC to
dismiss the notice of strike. Can the union hold a strike on the grounds relied upon?

A. The grounds relied upon by the union are non-strikeable. A strike or lockout may
only be declared in cases of bargaining deadlocks and ULP. Violations of the CBA,
except flagrant/malicious refusal to comply with economic provisions shall not be
strikeable. (Sec. 1, Rule XXII, LC IRR) A collective bargaining deadlock is the
situation between the labor and management of the company where there is failure
in the collective bargaining negotiations resulting in a stalemate. This situation is
nonexistent in the present case since there is a conciliation board assigned in Step 3
of the grievance machinery to resole the conflicting views of the parties. 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 the union ordered to proceed with the grievance and arbitration proceedings.
Moreover, in abandoning the grievance proceedings and refusing to avail of the
remedies under the CBA, the union violated the mandatory provisions of the CBA.
Parenthetically, it is worthy to note that abolition of departments or positions in the
company is one of the recognized management prerogatives. (San Miguel
Corporation v. NLRC, 304 SCRA 1 (2 March 1999))

Nestle Philippines vs NLRC Case Digest

Nestle Philippines, Inc. vs. NLRC and Union of Filipro Employees 193 SCRA 504

Facts:
Four (4) collective bargaining agreements separately covering the petitioner's
employees in its Alabang/Cabuyao factories; Makati Administration Office. (Both
Alabang/Cabuyao factories and Makati office were represented by the respondent,
Union of Filipro Employees [UFE]);Cagayan de Oro Factory represented by WATU;
and Cebu/Davao Sales Offices represented by the Trade Union of the Philippines and
Allied Services (TUPAS), all expired on June 30, 1987. UFE was certified as the sole
and exclusive bargaining agent for all regular rank-and-file employees at the
petitioner's Cagayan de Oro factory, as well as its Cebu/Davao Sales Office. In
August 1987, while the parties, were negotiating, the employees at Cabuyao
resorted to a "slowdown" and walk-outs prompting the petitioner to shut down the

factory. Marathon collective bargaining negotiations between the parties ensued. On

September 1987, the UFE declared a bargaining deadlock. On September 8, 1987,
the Secretary of Labor assumed jurisdiction and issued a return to work order. In
spite of that order, the union struck, without notice, at the Alabang/Cabuyao
factory, the Makati office and Cagayan de Oro factory on September 11, 1987 up to
December 8, 1987. The company retaliated by dismissing the union officers and
members of the negotiating panel who participated in the illegal strike. The NLRC
affirmed the dismissals on November 2, 1988. On January 26, 1988, UFE filed a
notice of strike on the same ground of CBA deadlock and unfair labor practices.
However, on March 30, 1988, the company was able to conclude a CBA with the
union at the Cebu/Davao Sales Office, and on August 5, 1988, with the Cagayan de
Oro factory workers. The union assailed the validity of those agreements and filed a
case of unfair labor practice against the company on November 16, 1988. After
conciliation efforts of the NCMB yielded negative results, the dispute was certified to
the NLRC. The NLRC issued a resolution on June 5, 1989, whose pertinent disposition
regarding the union's demand for liberalization of the company's retirement plan for
its workers. the NLRC issued a resolution denying the motions for reconsideration.
With regard to the Retirement Plan, the NLRC held that Anent management's
objection to the modification of its Retirement Plan, the plan is specifically
mentioned in the previous bargaining agreements thereby integrating or
incorporating the provisions thereof to the agreement. By reason of its
incorporation, the plan assumes a consensual character which cannot be terminated
or modified at will by either party. Consequently, it becomes part and parcel of CBA
negotiations. Petitioner alleged that since its retirement plan is non-contributory,
Nestle has the sole and exclusive prerogative to define the terms of the plan
because the workers have no vested and demandable rights, the grant thereof
being not a contractual obligation but merely gratuitous. At most the company can
only be directed to maintain the same but not to change its terms. It should be left
to the discretion of the company on how to improve or modify the same.
Issue:
Whether or not the workers have vested and demandable rights over the retirement
plan.
Ruling:
The Court ruled that employees have a vested and demandable right over the
retirement plan. The inclusion of the retirement plan in the collective bargaining
agreement 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
contribute nothing to the operation of the plan, does not make it a non-issue in the
CBA negotiations. As a matter of fact, almost all of the benefits that the petitioner
has granted to its employees under the CBA

salary increases, rice allowances, midyear bonuses, 13th and 14th month pay,
seniority pay, medical and hospitalization plans, health and dental services,
vacation, sick & other leaves with pay

are non-contributory benefits. Since the retirement plan has been an integral part
of the CBA since 1972, the Union's demand to increase the benefits due the
employees under said plan, is a valid CBA issue. The petitioner's contention, that
employees have no vested or demandable right to a non-contributory retirement
plan, has no merit for employees do have a vested and demandable right over
existing benefits voluntarily granted to them by their employer. The latter may not
unilaterally withdraw, eliminate or diminish such benefits.

NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY vs TRAJANO (Medialdea,

1992!UIC" FACTS
:
FACTS#
Petitioner National Congress of Unions in the Sugar Industry of the Philippines
(NACUSIP)-TUCP is the certified exclusie !argaining representati e of the ran" and
file #or"ers of Calinog $efinery Corporation% Pri ate respondent &ederation of
Unions of $i'al (&U$)-TUCP is a la!or organi'ation duly registered #ith the
epartent of *a!or and +ployent #hile pri ate respondent !y irtue of the
certification election held on ,arch ./ 0120%3n 4uly 05/ 0126/ Calinog $efineries
+ployees Union (C$+U)-NACUSIP/ the certified exclusi e !argaining
representatie of the ran" and file #or"ers of Calinog $efinery Corporation opted
for oluntary ar!itration (7A) after filing a petition for deadloc" in collecti e !
argaining #ith the ,inistry of *a!or and +ploy ent (,3*+)%A fe# days after/ on
4uly 60/ 0126/ &ederation of Unions of $i'al (&U$)-TUCP filed #ith the $egional
3ffice No% 7I/ ,3*+ (no# 3*+)/ Iloilo City a
$e%i%i&' &) *e)%ii*a%i&' ele*%i&'

/ alleging that: (0) a!out 589 of C$+Us eployees had disaffiliated fro C$+UNACUSIP ang ;oined &U$-TUCP< (6) no election had !een held for the past t#el e
(06) onths< and () #hile petitioner union had !een certified as the sole
collectie !argaining agent/ for oer a year it failed to conclude a collecti e !
argaining agreeent%C$+U-NACUSIP filed a otion to inter ene%ACTIN= ,+A$>IT+$ ,ilitante: disissed the petition for certification election for lac" of erit
since the petition is !arred !y a pending !argaining deadloc"% &U$- TUCP appeals to
>ureau of *a!or $elations (>*$)/ ,anila%>*$ I$+CT3$ Cresenciano >% Tra;ano:
sets aside the decision of ,ilitante and re ands case to $egional 3ffice 7I/ Iloilo City
for hearing and reception of eidence%,+-A$>IT+$ e etrio Correa: ifo &U$TUCP% A ne# election should !e held #ithin 6. days fro receipt of the order% C$
+U-NACUSIP appeals to the >*$%?hile it is still on appeal/ a ne# C>A !et#een the
copany and C$+U-NACUSIP #as entered and executed !y the anage ent of the
National Sugar $efineries Co%/ Inc% and petitioner union and #as su!se@uently
ratified !y a a;ority of the ran" and file e ployees% 3n the !asis of this C>A/ the
*a!or Ar!iter Celerino =recia II issued an a#ard adopting the su! itted agree ent
as the C>A !et#een the parties%>*$ I$+CT3$ Cresenciano >% Tra;ano: affir s
#ith @ualification the order of ,ed-Ar!iter Correa% e says that since B89 of the
#or"ers are no# affiliated #ith &U$- TUCP/ thus/ C$+U-NACUSIPs status as sole
and exclusie !argaining representatie

is no# of dou!tful alidity/ and therefore a ne# certification election is in order% C$

+U-NACUSIP files ,$% ,$ denied/ thus this petition% Note: Solgen posits that C>A
concluded on Septe!er 0./ 012 has a life span of three ( ) years and constitutes
a !ar to the petition for certification election pursuant to Section of the $ules
Ipleenting >atas Pa!ansa >lg% 0.%
ISSUE#
?3N a petition for certification election ay !e filed during the pendency of a !
argaining deadloc" su!itted to ar!itration or conciliation
RULING#
N3/ it ay not !e filed% ir% Tra;ano coitted a grae a!use of discretion #hen
he ordered a certification election during the pendency of a !argaining deadloc"% is
Section / >oo" 7/ $ule 7 of the 3ni!us $ules Iple enting the *a!or Code
says:DS+CTI3N %?hen to file% E In the a!sence of a collecti e !argaining
agreeent duly registered in accordance #ith Article 6 0 of the Code/ a petition
for certification election ay !e filed at any ti e% o#e er/ no certification
election ay !e held #ithin one year fro the date of issuance of a final
certification election result% Neither ay a representation @uestion !e entertained

if/ !efore the filing of a petition for certification election/ a !argaining deadloc" to
#hich an incu!ent or certified !argaining agent is a party had !een su! itted to
conciliation or ar!itration or had !ecoe the su!;ect of alid notice or stri"e or
loc"out%DIf a collectie !argaining agreeent has !een duly registered in
accordance #ith Article 60 of the code/ a petition for certification election or a
otion for interention can only !e entertained #ithin sixty (F.) days prior to the
expiry date of such agreeent%D The rule prohi!its the filing of a petition for
certification election in the follo#ing cases:(0)during the existence of a collecti e !
argaining agreeent except #ithin the freedo period<(6)#ithin one (0) year fro
the date of issuance of declaration of a final certification election result<
or()during the existence of a !argaining deadloc" to #hich an incu !ent or
certified !argaining agent is a party and #hich had !een su! itted to conciliation or
ar!itration or had !ecoe the su!;ect of a alid notice of stri"e or loc"out%
T+e Deadl&* -a) R.le
proides that a petition for certification election can only !e entertained if there is
no pending !argaining deadloc" su!itted to conciliation or ar!itration or had !
ecoe the su!;ect of a alid notice of stri"e or loc"out% The principal purpose is to
ensure sta!ility in the relationship of the #or"ers and the anage ent%

In this case/ a !argaining deadloc" #as already su! itted to ar!itration #hen
priate respondent &U$-TUCP filed a petition for certification election% ir%
Tra;anoGs decision is nullified and the order of ,ed-Ar!iter ,ilitante dis issing the
petition for certification election is reinstated

PHILIPPINE GRAPHIC ARTS INC., IGMIDIO R. SILVERIO AND CARLOSCABAL,

petitioners,vs. NATIONAL LABOR RELATIONS COMMISSION, ROSALINA M.
PULPULAANAND EMELITA SALONGA, respondents
GUTIERREZ, JR.,
J
FACTS: petitioner corporation was forced by economic circumstances to require
itsworkers to go on mandatory vacation leave. The workers were paid while on leave
butthe pay was charged against their respective earned leaves. As a result, the
privaterespondents filed complaints for unfair labor practice and
discrimination.Labor Arbiter rendered a decision dismissing the complaint for ULP.
Ordering thePhilippine Graphic arts, inc to restore and grant to all its employees the
company policyregarding groceries previously enjoyed by them.The private
respondents filed a "partial appeal" with (NLRC) questioning the Labor Arbiter's
dismissal of their complaint for ULP and the resultant forced vacation leaveswhich

were actually without pay. NLRC affirmed the arbiter's decision with modification
ordering the employers to refundthe amount equivalent to the earned leave of the
employees.Issue: whether or not the forced vacation leave without pay is unfair
labor practice and if not an unfair labor practice, whether or not it was tainted with
arbitrariness.Held: The Court is convinced from the records now before it, that there
was no unfair labor practice. As found by the NLRC, the private respondents
themselves never questioned the existence of an economic crisis but, in fact,
admitted its existence.There is also no showing that the imposition of forced leave
was exercised for the purpose of defeating or circumventing the rights of employees
under special laws or under valid agreements.Petitioner contends that before the
implementation of the forced leave a consensus onhow to deal with deteriorating
economic conditions was reached between the employer and employees, and such
in consonance with their collective bargaining agreement. Thusthe Court finds that
the decision to resort to forced leaves was, under the circumstances, amanagement
prerogative.Private respondents contend that the petitioners should discuss said
management's plan inthe grievance procedure so that the Union members thereof
may well be apprised of thereason therefor. The Court however do not agree.
The statutory law on grievance procedure provides that:ART. 261.
Grievance machinery
. Whenever a grievance arises from the interpretation or implementation of a
collective agreement, including disciplinary actions imposed onmembers of the
bargaining unit, the employer and the bargaining representative shallmeet to adjust
the grievance. Where the grievance procedure as provided herein does notapply,
grievances shall be subject to negotiation, conciliation or arbitration as
providedelsewhere in this Code.As the law stands, both employers and bargaining
representative of the employees arerequired to go through the grievance machinery
in case a grievance arises. And thoughthe law does not provide who, as between
labor and capital, should initiate that saidgrievance be brought first to the,
grievance machinery, it is only logical, just andequitable that whoever is aggrieved
should initiate settlement of the grievance throughthe grievance machinery. To
impose the compulsory procedure on employers alonewould be oppressive of
capital, notwithstanding the fact that in most cases the grievanceis of the
employeesIn the case at bar private respondents instituted a case before the Labor
Arbiter for unfair labor practices and discrimination, prior to any referral to the
grievance machinery, whichthey are equally mandated to go through and under the
circumstances they were better situated to initiate.The SC ordered the decision of
the Labor Arbiter is REINSTATED.

G.R. No. 101619 July 8, 1992 SANYO PHILIPPINES WORKERS UNION-PSSLU vs.
CANIZARES, in his capacity as Labor Arbiter, BERNARDO YAP, RENATO BAYBON,
SALVADOR SOLIBEL, ALLAN MISTERIO, EDGARDO TANGKAY, LEONARDO DIONISIO,
ARNEL SALVO, REYNALDO RICOHERMOSO, BENITO VALENCIA, GERARDO LASALA
AND ALEXANDER ATANASIO FACTS:
PSSLU had an existing CBA with Sanyo. The CBA contained a union security clause.
PSSLU wrote Sanyo that the private respondents/employees were notified that their
membership with PSSLU were cancelled for anti-union, activities, economic
sabotage, threats, coercion and intimidation, disloyalty and for joining another
union called KAMAO. In accordance with the security clause of the CBA, Sanyo
dismissed the employees. The dismissed employees filed a complaint with the NLRC
for illegal dismissal. Named respondent were PSSLU and Sanyo. PSSLU filed a
motion to dismiss the complaint alleging that the Labor Arbiter was without
jurisdiction over the case, relying on Article 217 (c) of the Labor Code which
provides that cases arising from the interpretation or implementation of the CBA
shall be disposed of by the labor arbiter by referring the same to the grievance
machinery and voluntary arbitration. Nevertheless, the Labor Arbiter assumed
jurisdiction. Public respondent through the Sol Gen, argued that the case at bar
does not involve an "interpretation or implementation" of a collective bargaining
agreement or "interpretation or enforcement" of company policies but involves a
"termination." Where the dispute is just in the interpretation, implementation or
enforcement stage, it may be referred to the grievance machinery set up in the CBA
or by voluntary arbitration. Where there was already actual termination, i.e.,
violation of rights, it is already cognizable by the Labor Arbiter.
ISSUE:
Whether or not the Labor Arbiter has jurisdiction over the case.
HELD:
We hold that the Labor Arbiter and not the Grievance Machinery provided for in the
CBA has the jurisdiction to hear and decide the case. While it appears that the
dismissal of the private respondents was made upon the recommendation of PSSLU
pursuant to the union security clause provided in the CBA, We are of the opinion
that these facts do not come within the phrase "grievances arising from the
interpretation or implementation of (their) Collective Bargaining Agreement and
those arising from the interpretation or enforcement of company personnel
policies," the jurisdiction of which pertains to the Grievance Machinery or thereafter,
to a voluntary arbitrator or panel of voluntary arbitrators. No grievance between
them exists which could be brought to a grievance machinery. The problem or
dispute in the present case is between the union and the company on the one hand
and some union and non-union members who were dismissed, on the other hand.
The dispute has to be settled before an impartial body. The grievance machinery

with members designated by the union and the company cannot be expected to be
impartial against the dismissed employees. Due process demands that the
dismissed workers grievances be ventilated before an impartial body. Since there
has already been an actual termination, the matter falls within the jurisdiction of
the Labor Arbiter.

Volkschel Labor Union v. BLR

Disaffiliation of Labor Union from a Federation
Facts:
Volkschel Labor Union was once affiliated with Associated Labor Union for Metal
Workers(ALUMETAL).Both Volkschel and Alumetal entered into aCBA.They agreed
that ALUMETAL will apply payrolldeductions twice a month on the members of
theUNION as membership dues and other fees/fines, as may be duly authorized by
theUNION AND ITS MEMBERS. They called thischeck-off authorization.Subsequently,
majority of Volkschels membersdecided to disaffiliate from ALUMETAL in order to
operate on its own as an independent labor group, pursuant to
Art. 241 of the Labor Code.*
Moreover, the same want to revoke their check-off authorization in favour of
ALUMETAL
On the other hand, ALUMETAL assailed thatthe disaffiliation is contrary to law and
themembers are still obliged to pay their dues.
Issues:
Can a local union like Volkschel disaffiliate fromits mother union like
ALUMETALShould the local union still pay unionmembership dues even upon
disaffiliation fromits mother union?
Held:
YES. A local union, being a separate andvoluntary association, is free to serve
theinterest of all its members including the freedomto disaffiliate. This right is
consistent withconstitutional guarantee of FREEDOM OF ASSOCIATION. (Art. IV, Sec.
7, Phil.Constitution) NO. The obligation of an employee to pay uniondues is
coterminous with hisaffiliation/membership.
*ART. 241 of the Labor Code
Incumbent affiliates of existing
federations or national unions may disaffiliate only

for the purpose of joining a federation or national unionin the industry or region in
which is properly belongs or for the purpose of operating as an
independent labor group.

In
Sime Darby Pilipinas, Inc. v. Deputy Administrator Magsalin,G.R. No. 90426,
December 15, 1989
, the Supreme Court ruled that thevoluntary arbitrator had plenary jurisdiction
andauthority to interpret the agreement to arbitrateand to determine the scope of
his own authority

subject only, in a proper case, to the certiorari jurisdiction of this Court. It was also
held in thatcase that the failure of the parties to specificallylimit the issues to that
which was stated allowedthe arbitrator to assume jurisdiction over therelated issue.
In
Ludo & Luym Corporation v.Saornido, G.R. No. 140960, January 20, 2003
, theSupreme Court recognized that voluntaryarbitrators are generally expected to
decide onlythose questions expressly delineated by thesubmission agreement; that,
nevertheless, theycan assume that they have the necessary power tomake a final
settlement on the related issues,since arbitration is the final resort for
theadjudication of disputes. Thus, the Supreme Courtruled that even if the specific
issue brought beforethe arbitrators merely mentioned the question of
whether an employee was discharged for justcause, they could reasonably
assume that their
powers extended beyond the determination thereof to include the power to
reinstate the employee orto grant back wages. In the same vein, if thespecific issue
brought before the arbitratorsreferred to the date of regularization of theemployee,
law and jurisprudence gave themenough leeway as well as adequate prerogative
todetermine the entitlement of the employees tohigher benefits in accordance with
the finding of regularization. Indeed, to require the parties to fileanother action for
payment of those benefits wouldcertainly undermine labor proceedings
andcontravene the constitutional mandate providingfull protection to labor and
speedy labor justice.

FEATI University v. Judge Bautista & FEATI University Faculty

Chester Cabalza recommends his visitors to please read the original & full text of
the case cited. Xie xie!

G.R. No. L-21278 December 27, 1966

FEATI UNIVERSITY, petitioner,

vs.
HON. JOSE S. BAUTISTA, Presiding Judge of the Court of Industrial Relations and
FEATI UNIVERSITY FACULTY CLUB-PAFLU, respondents.

Facts:

The private respondent wrote a letter to president of petitioner informing her of the
organization of the Faculty Club into a registered labor union.

President of the Faculty Club sent another letter containing twenty-six demands that
have connection with the employment of the members of the Faculty Club by the
University, and requesting an answer within ten days from receipt thereof. The
President of the University answered the two letters, requesting that she be given at
least thirty days to study thoroughly the different phases of the demands.

Meanwhile counsel for the University, to whom the demands were referred, wrote a
letter to the President of the Faculty Club demanding proof of its majority status and
designation as a bargaining representative.

President of the Faculty Club filed a notice of strike with the Bureau of Labor alleging
as reason therefore the refusal of the University to bargain collectively.

The parties were called to conferences but efforts to conciliate them failed.

Members of the Faculty Club declared a strike and established picket lines in the
premises of the University, resulting in the disruption of classes in the University.
President of the Philippines certified to the Court of Industrial Relations the dispute
between the management of the University and the Faculty Club pursuant to the
provisions of Section 10 of Republic Act No. 875.

The Judge endeavored to reconcile the part and it was agreed upon that the striking
faculty members would return to work and the University would readmit them under
a status quo arrangement. On that very same day, however, the University, thru
counsel filed a motion to dismiss the case upon the ground that the CIR has no
jurisdiction over the case, because (1) the Industrial Peace Act is not applicable to
the University, it being an educational institution, nor to the members of the Faculty
Club, they being independent contractors; and (2) the presidential certification is
violative of Section 10 of the Industrial Peace Act, as the University is not an
industrial establishment and there was no industrial dispute which could be certified
to the CIR.

The respondent judge denied the motion to dismiss. The University filed a motion
for reconsideration by the CIRen banc, without the motion for reconsideration
having been acted upon by the CIR en banc, respondent Judge set the case for
hearing but the University moved the cancellation of the said hearing upon the
ground that the court en banc should first hear the motion for reconsideration and
resolve the issues raised therein before the case is heard on the merits but denied.

Faculty Club filed with the CIR in Case 41-IPA a petition to declare in contempt of
court certain parties, alleging that the University refused to accept back to work the
returning strikers, in violation of the return-to-work order.

The University filed its opposition to the petition for contempt by way of special
defense that there was still the motion for reconsideration which had not yet been
acted upon by the CIR en banc. Hence, this petition.

Issue:

Whether or not FEATI is an employer within the purview of the Industrial Peace Act.

Held:

The Supreme Court denied the petition. Based on RA 875 Section 2(c) The term
employer include any person acting in the interest of an employer, directly or
indirectly, but shall not include any labor organization (otherwise than when acting
as an employer) or any one acting in the capacity or agent of such labor
organization.

In this case, the University is operated for profit hence included in the term of
employer. Professors and instructors, who are under contract to teach particular
courses and are paid for their services, are employees under the Industrial Peace
Act.

Professors and instructors are not independent contractors. university controls the
work of the members of its faculty; that a university prescribes the courses or
subjects that professors teach, and when and where to teach; that the professors
work is characterized by regularity and continuity for a fixed duration; that
professors are compensated for their services by wages and salaries, rather than by
profits; that the professors and/or instructors cannot substitute others to do their
work without the consent of the university; and that the professors can be laid off if
their work is found not satisfactory. All these indicate that the university has control
over their work; and professors are, therefore, employees and not independent
contractors.