36. SMC Employees Union vs.

Confesor, 262 S 81

Facts: San Miguel Corporation Employees Union (PTGWO) entered into a CBA with private
respondent San Miguel Corporation (SMC) to take effect upon the expiration of the previous
CBA. The CBA provided that it would remain in force with a five-year term for representation.
The freedom period for representation was 60 days before June 30, 1994. The CBA
remained in force until a subsequent agreement was reached. In 1992, the CBA was
renegotiated, with the petitioner-union insisting that the bargaining unit of SMC should
include employees of the spun-off corporations Magnolia and SMFI. SMC argued that
members who moved to Magnolia and SMFI automatically ceased to be part of the
bargaining unit at SMC. The CBA was declared deadlock on September 29, 1990, and the
Secretary's decision was that the CBA would be effective for three years from June 30,
1992, covering only SMC employees.

Issues: 1) Whether or not the duration of the renegotiated terms of the CBA is to be
effective for three years or for only two years;
2) Whether or not the bargaining unit of SMC includes also the employees of the
Magnolia and SMFI.

Ruling: I) In case of a deadlock in the renegotiation of the CBA, the parties may exercise
their rights under this Code. The “representation aspect” refers to the identity and majority
status of the union that negotiated the CBA as the exclusive bargaining representative of the
appropriate bargaining unit concerned. “All other provisions” simply refers to the rest of the
CBA, economic as well as non-economic provisions, except representation. The law aimed
to maintain industrial peace and stability by ensuring harmonious management and labor
work. It prohibited outside unions from entering the establishment within 5 years and
questioned employment terms and conditions. The CBA is a contract between parties, and
the effectivity of employment terms is left to the parties. The Secretary of Labor's decision to
extend the non-representation provisions of the CBA to three years without abuse of
discretion is valid and legal. The renegotiated contract, ratified by majority members, binds
the contracting parties and is valid and legal.
II) The transformation of companies was a management prerogative and business
judgment, which courts cannot examine unless it is contrary to law, public policy, or morals.
Magnolia and SMFI became distinct entities with separate juridical personalities, making
them not belong to a single bargaining unit. The test of grouping is mutuality or commonality
of interests, as employees must have substantial mutual interests in terms of employment
and working conditions.

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37. Asso. Trade Union vs. Trajano, 162 S 318

Facts: ATU filed a petition for certification election at Baliwag Transit, Inc., despite
opposition from the union. The election was ordered to determine the exclusive bargaining
agent for collective bargaining. ATU argued that the orders were tainted with abuse of
discretion and should be reversed. A temporary restraining order was issued, maintaining
the status quo. ATU argued that its collective bargaining agreement with Baliwag Transit on
April 1, 1986, should bar the certification election, as it would disturb the new agreement.

Issue: Whether or not TUPAS was barred from filing a petition for certification election under
the contract-bar rule under Section 3, Rule 5, Book V of the Implementing Rules and
Regulations.

Ruling: No. Section 3, Rule 5, Book V of the Implementing Rules and Regulations simply
provides that a petition for certification election or a motion for intervention can only be
entertained within sixty days prior to the expiry date of an existing collective bargaining
agreement. Otherwise put, the rule prohibits the filing of a petition for certification election
during the existence of a collective bargaining agreement except within the freedom period,
as it is called, when the said agreement is about to expire. The purpose, obviously, is to
ensure stability in the relationships of the workers and the management by preventing
frequent modifications of any collective bargaining agreement earlier entered into by them in
good faith and for the stipulated original period.

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38. Liberty Flour Mills Employees vs. Liberty Flour Mill and NLRC, 180 S 668

Facts: On February 6, 1974, respondent Philippine Labor Alliance Council (PLAC) and
Liberty Flour entered into a 3-year CBA effective January 1, 1974, providing for a daily wage
increase of PhP2.00 for 1974, PhP1.00 for 1975 and PhP1.00 for 1976. The parties also
agreed to establish a union shop by imposing “membership in good standing for the duration
of CBA” as a condition for continued employment of workers. PLAC complained against the
company for non-payment of E-COLA under P.D. 525. A similar complaint was filed on
March 4, 1975, this time by petitioners who apparently were veering away from PLAC.
Evaristo and Biascan, after organizing a union, filed for a certification election among rank-
and-file employees. PLAC then expelled the two for disloyalty and demanded their dismissal
by the respondent company, which complied on May 20, 1975. The claims for E-COLA were
dismissed as it was already absorbed by the wage increase. The termination case in relation
to back wages was also dismissed.

Issue: Whether or not E_COLA was also absorbed in the wage increases and won
dismissal of Evaristo and Biascan was illegal.

Ruling: The company agreed to grant the emergency allowance even before the obligation
was imposed by the government (P.D. 525). What the petitioners claim they are being made
to waive is the additional allowance but the truth is they are not entitled to it because they
are already enjoying the stipulated increases. As with the case of illegal dismissal, the CBA
concluded in 1974 was certifiable and in fact certified on April 11, 1975, while the two were
dismissed on May 20, 1975. Evidence shows that after the cancellation of the registration
certificate of the Federation of Democratic Labor Unions, no other union contested the
exclusive representation of the PLAC, consequently there was no more legal impediment
that stood on the way of its validity and enforceability of the provisions of the collective
bargaining agreement entered into by and between a respondent corporation and
respondent union. Once it was duly entered into and signed by the parties, a collective
bargaining agreement becomes effective as between the parties regardless of winning the
same has been certified by the BLR.

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39. Meycauayan College vs. Drilon, 185 S 50

Facts: Petitioner is a private educational institution operating in Meycauayan, Bulacan. Its

board of trustees recognized the Meycauayan College Faculty and Personnel Association as
the employees' union in Meycauayan College. Prior to said recognition or on July 17, 1983,
the petitioner and the union, entered into a collective bargaining agreement for 1983-1986.
Article IV thereof provided the salary scale for teachers. Later on, the union discovered that
the provisions of said article were not implemented. Consequently, on March 27, 1987, the
union filed with the Department of Labor and Employment, Regional Office No. III in San
Fernando, Pampanga, a notice of strike on the ground of unfair labor practice. Petitioner's
contention is that an agreement on a salary scale should be distinguished from an
agreement on a salary increase. Thus, it argues in fine that an agreement on a salary scale
should be considered as an addition to the salary increase imposed by law and vice-versa.

Issue: Whether or not increases in employees' salaries resulting from the implementation of
presidential decrees and wage orders, which are over and above the agreed salary scale
contracted for between the employer and the employees in a collective bargaining
agreement, preclude the employees from claiming the difference between their old salaries
and those provided for under said salary scale.

Ruling: Increments to the laborers’ financial gratification, be they in the form of salary
increases or changes in the salary scale are aimed at one thing - improvement of the
economic predicament of the laborers. As such they should be viewed in the light of the
State’s avowed policy to protect labor. Thus, having entered into an agreement with its
employees, an employer may not be allowed to renege on its obligation under a collective
bargaining agreement should, at the same time, the law grant the employees
the same or better terms and conditions of employment. Employee benefits derived from law
are exclusive of benefits arrived at through negotiation and agreement unless otherwise
provided by the agreement itself or by law. The one-year prescriptive period is inapplicable
in this case because of peculiar factual circumstances which the petitioner has not denied.
Although the collective bargaining agreement covers the school years 1983 to 1986, a copy
of the agreement was only made available to the union in 1987. Immediately thereafter, the
union sought its implementation. The union members might have been aware of the
existence of the collective bargaining agreement but the fact that their president was actually
a management employee being petitioner's registrar, they must have been deterred from
demanding its implementation earlier. Hence, to apply the provisions of Article 290 (Art. 291)
would be unfair and prejudicial to the union members particularly those who have served
petitioner for a number of years who stand to benefit most from the salary scale.

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40. University of East vs. MOLE, 152 S 676

Facts: Prior to 1983-1984, the University of the East distributed 70% incremental proceeds
from tuition fee increases proportional to the average number of academic and non-
academic personnel. However, starting 1994-1995, the distribution was based on a
percentage of salary. The University of the East Employees' Association (UEEA) questioned
the validity of this distribution. A tripartite meeting agreed to change the distribution to a
percentage of salary, but UEEA filed a complaint against UE for non-payment or
underpayment of rank-and-file employees' tuition fee increases.

Issue: Whether or not UE’s revised employee distribution scheme for proceeds of the tuition
fee increase is valid

Ruling: Yes. The Supreme Court finds the distribution scheme for proceeds of the tuition fee
increase to be valid. First and foremost, the new distribution scheme is in accordance with
the law. UE, being a private educational institution has the full discretion on the disposition of
the 70% incremental proceeds from tuition fee increase, with the only condition imposed that
the proceeds should go to the salaries, wages and allowances and other benefits of teachers
and non-teaching personnel. Also, the distribution scheme is clearly not a diminution of
benefits, contrary to the respondent’s claim. The principle against diminution of benefits shall
be applicable only if the grant or benefit is founded on an express policy or has ripened into
a practice over a long period of time which is consistent and deliberate, both of which
conditions do not exist in the case. The revised distribution scheme is not a product of an
express policy nor has it ripened a consistent and deliberate practice. UE also did not
change the distribution scheme peremptorily, as proven in the tripartite meeting that was
held to settle the issue.

41. Citibank Employees Union vs. MOLE, 97 S 52

Facts: petitioner filed a case for regular holiday pay under Article 208 (a) of the Labor Code.
The parties agreed to submit the dispute to voluntary arbitration. The Voluntary Arbitrator
awarded the respondent holiday pay, which was partially implemented. However, the
respondent stopped paying holiday pay after the Integrated Implementing Rules of the Labor
Code and Policy Instructions No. 9. The petitioner filed a motion for execution to enforce the
award. The Executive Labor Arbiter ordered the respondent to continue paying unworked
regular holidays to its employees. The case was dismissed due to lack of merit.

Issue: Whether or not employees of the Bank are legally entitled to holiday pay provided
under Article 208 (now 94) of the Labor Code, considering their contractual wage scale.

Ruling: After mature deliberation, we have arrived at the conclusion that the respondent’s
position is not well taken. The situation before Us in the instant case has no parity with those
obtaining in the instances where this Court sanctioned departure from the terms of a final
and executory judgment by reason of supervening events that would make literal execution
in whole or in part of such judgment unjust and inequitable. It should be clear to anyone
conversant with the elementary principles of collective bargaining and the constitutional
injunction assuring the rights of workers thereto (Sec. 9, Article II, Constitution of the
Philippines) that the terms and conditions of a collective bargaining agreement constitute the
sacred law between the parties as long as they do not contravene public order, interest or
policy. We might say that the prohibition in the Constitution’s Bill of Rights against the
passage or promulgation of any law impairing the obligation of contracts applies with
perhaps greater force to collective bargaining agreements, considering that these deal with

43
the rights and interests of labor to which the charter explicitly affords protection. (Sec. 9,
Article II.)

42. Ranises vs. NLRC, 262 S 37

Facts: The petitioner, a seaman, was hired by Orophil Shipping International Co. Inc. He
was rehired by Sinkai Shipping Co. Ltd. and departed the Philippines. The petitioner filed a
complaint at the Philippine Employment Attorney General (POEA) against private
respondents for illegal dismissal, salary differential, non-payment of overtime pays, and
leave pay.
The NLRC upheld the dismissal, stating there was just cause for the dismissal due to
his actions causing discontent among crew members. The petitioner filed a petition for
certiorari, assailing the NLRC for grave abuse of discretion in reversing the judgment. The
court found that there was no just cause for the dismissal, and therefore, his termination
from employment is illegal. The petitioner's claim for the salary provided in his original
contract is rejected, but the court found that under the new ITF/JSU/AMOSUP CBA with
Sinkai Shipping Co. Ltd., his salary should be reduced to $1,387.00 and his employment
period to 10 months, in accordance with Article XXXV of the new CBA.

Issue: Whether or not there was indeed just cause for the petitioner’s dismissal.

Ruling: No. It was therefore not far-fetched that, as found by the POEA, the petitioner’s
persistence in demanding payment of the salary in his original contract prompted
respondent’s employer to cause his early repatriation and eventual dismissal. Evidently, in
the face of contrary evidence, respondent NLRC committed grave abuse of discretion in
opting to rely exclusively on the bare allegations pertaining to the petitioner’s alleged illegal
acts as contained in the aforementioned telex, consequently finding the petitioner liable for
breach of trust. Consequent therefore to the respondent employer’s failure to discharge the
burden of substantiating its charges of breach of trust against the petitioner, there is no just
cause for the latter’s dismissal. Hence, his termination from employment is illegal.

43. Manila Fashions Inc. vs. NLRC, 264 S 104

Facts: Manila Fashions, Inc. filed a complaint against the LA for non-compliance with a
wage order, resulting in underpaid basic pay, 13 th-month pay, service incentive leave, legal
holiday pay, night shift differential, and overtime pay. Manila Fashions, Inc. argued that the
failure was due to losses and a strike. The strikers, who supported the increase, sent a
notice to prevent business closure for three months.
Issue: Whether or not the condonation of the implementation of Wage Order No. NCR-02
and 02-A contained in Sec. 3, Art. VIII, of the CBA valid.
Ruling: No, the condonation appearing in Sec. 3, Art. VIII, of the CBA did not exempt the
petitioner from compliance with Wage Order No. NCR-02 and 02-A. A Collective Bargaining
Agreement refers to the negotiated contract between a legitimate labor organization and the
employer concerning wages, hours of work, and all other terms and conditions of
employment in a bargaining unit, including mandatory provisions for grievances and
arbitration machinery. As in all other contracts, the parties in a CBA may establish such
stipulations, clauses, terms, and conditions as they may deem convenient provided, they are
not contrary to law, morals, good customs, public order, or public policy.
The CBA questioned provision is void because by agreeing to condone the
implementation of the Wage Order the parties thereby contravened its mandate on wage

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increase of P12. It is only the Tripartite Wage Productivity Board of the DOLE that could
approve the exemption of an establishment from coverage of a Wage Order.

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