FINALS (1) – LABOR RELATIONS – Atty.

Balino

COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENTS

Statutory References:
Art. 261 to 272 of the renumbered Labor Code
DOLE Department Order No. 40-03, series of 2003
DOLE Department Order No. 40-1-15, series of 2015

a. Procedures in collective bargaining (Art. 261)

1. CONCEPT
 “To bargain collectively”
 “Collective bargaining agreement”
2. NATURE
 “collective bargaining”
3. CHARACTERISTICS of Collective Bargaining
a. A continuing legal relationship – series of negotiations
b. A process of adjustment or mutual accommodation between the employer and the union. Negotiating
parties should bargain in good faith.
c. A contract of reasonable benefits – Thus, CBA should not provide for benefits below the standards
provided by law. Otherwise, it becomes a SWEETHEART CONTRACT.
d. A contract of relative equality – Not only a process for fixing terms of employment but also for a relative
equality of bargaining power where the employer is compelled to deal with the employees ‘as a group rather
than as isolated individuals.’
e. An agency of participatory democracy because workers are allowed to participate in policy and decision
making process.
4. STANDARDS in Collective Bargaining
a. Mutual
b. in good faith. Thus, delaying tactics of employer during the bargaining process (i.e. introducing off-
tangent matters, frequent change in bargaining positions, and other deceptive gimmicks) to frustrate
collective bargaining, indicate “that the employer appears to negotiate but without any intention to reach an
agreement, which is a SURFACE BARGAINING, a form of ULP.
c. Reasonable Terms and Conditions – Thus, where the union submits a proposal containing exaggerated
economic demands beyond the capacity of the employer, the union is liable for ULP known as “BLUE SKY
BARGAINING”
d. The duty to bargain does not compel any party to agree to a proposal or to make any concession.
5. CONTENTS of CBA (18)
6. PROCEDURES/STEPS in Collective Bargaining (8: PNE-PRRAI)
7. Written Notice required in Demand to Bargain
8. Failure to submit reply within 10 calendar days, a ULO.

b. Duty to bargain collectively (Arts. 262,263, 264)

1. PRE-CONDITIONS for Collective Bargaining
a. Employer-employee relationship
b. Majority representation of employees’ representative
c. Proof of majority representation
d. Demand to bargain
e. That the legitimate labor organization is the certified bargaining agent in the bargaining unit.
2. Pendency of cancellation proceeding, not a bar to set in motion the mechanics of collective bargaining
3. SCOPE
a. Wages
 b.Hours of work
c.All other terms and conditions of employment
d.Including proposals for adjusting any grievances or questions arising under such agreement
i. Retirement plan – non-contributory benefits
4. No per se a test of good faith or bad faith; a question of fact.
5. CBA, a contract in personam – Thus, binding only between parties and not enforceable against a transferee or a
buyer in good faith, except when the transaction with the latter is clothed with bad faith.
6. BOULWAREISM – employer’s bargaining proposal on a “take-it or leave-it” basis; a ULP

7. “Neither party shall terminate nor modify such agreement during its lifetime.” (Art. 264)

CONTRACT-BAR RULE / 60-DAY FREEDOM PERIOD –when either party can serve a written notice to
terminate or modify the agreement. petition for certification election or a motion for intervention may be made
within the freedom period or 60 days prior to the expiry date of the agreement. PURPOSE: to ensure stability in
the relationship of workers and management by preventing frequent modifications
8. “It shall be 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 or until a new agreement is reached.”

The law still considers the same as continuing in force and effect until a new CBA shall have been validly
executed, and therefore, the contract-bar rule still applies. Thus, it is the duty of both parties to keep the status
quo.

If the employer evades the duty to bargain, the proposed CBA can be unilaterally imposed upon the former.

C. TERMS OF A CBA (ART. 265)

i. Periods
ii. Expiry and Renewal thereof and its effects
 5 years – life span of CBA in terms of ‘representation aspect’
o Representation – refers to the identity and majority status of the union that negotiated the CBA as
the exclusive bargaining agent of the appropriate bargaining unit. Such could not be affected by a
subsequent CBA signed between the same bargaining agent and employer during the 5-year period.
o Extended term of CBA on representation; its effect. “Despite an agreement for a CBA with a life of
more than 5 years, the bargaining unions exclusive bargaining status is effective only for 5
years and can be challenged within 60 days prior to the expiration of the CBAs.
o 1year extension of CBA approved by the Union in a referendum supervised by the DOLE and
accepted by the employer which gave a “signing bonus” is valid.
o CBA benefits extend to non-union members; provided they be required to pay fees equivalent to
the amount or dues paid by union members
 Not later than 3 years after its execution – workers may renegotiate all other provisions of the CBA, except
representation aspect
o Renegotiation – should only pertain to the terms and conditions of the parties’ relationship for the
last remaining 2 years of the 5-year period of the CBA.
o Failure to renegotiate all other provisions before the end of the third year – such provisions shall
continue to be in full force and effect until a new CBA is concluded.  AUTOMATIC
RENEWAL CLAUSE / PRINCIPLE OF HOLD-OVER / CBA CONTINUITY

RETROACTIVITY of CBA
 If parties concluded an agreement within the 6-month period – effectivity date of such retroacts to the day
“immediately following” the expiration date of the term of such other provisions as fixed in the CBA
 Agreement arrived beyond 6 months – parties shall agree on its effectivity/duration of retroactivity
CBA concluded through ARBITRAL AWARDS (Art. 265 retroactivity has no application in arbitral awards):
 The effectivity date of the CBA concluded through arbitral awards made by the DOLE Secretary, the NLRC,
or voluntary arbitrators was made retroactive when the Secretary of Labor resolved the labor dispute. (Note:
Previous case in St. Lukes vs Torres: retroactive to the date of the expiration of the previous collective
bargaining agreement

SUBSTITUTIONARY DOCTRINE
  Where the collective bargaining agent is changed during the lifetime of an agreement, the new agent takes the
place of the old and administers the agreement which subsists in spite of the change in representation. Note
that under the doctrine, the only consideration is the employee’s interest in the existing bargaining agreement.
 CBA entered into between the predecessor-employer and the bargaining agent are binding on the successor-
employer, even though labor contracts are in personam or that there is no privity between the successor-
employer and the bargaining agent.
 Disaffiliation of a local union from the federation does not affect the enforceability and administration of a
collective bargaining agreement.

DEADLOCK in CBA renegotiation

 Deadlock = synonymous with impasse or standstill which presupposes a reasonable effort at good faith
bargaining but does not conclude an agreement between the parties despite noble intentions.
 REMEDIES:
o NCMB to intervene for conciliation of preventive mediation
o Refer the matter for voluntary or compulsory arbitration
o Declare a strike or lock-out = remedy of last resort

SUSPENSION OF CBA (10-year)

 Legally tenable; “The right to free collective bargaining includes the right to suspend it;” as when undertaken
in the light of the severe financial situation faced by the employer
 Does not contravene the protection to labor policy of the Constitution
 Does not violate the 5-year representation limited by Art. 265 for such only applies when there is an extant
CBA in full force and effect and not when CBA is put in abeyance.
2-FOLD PURPOSE OF CBA
1. To promote industrial stability and practicability
2. To assign specific timetables wherein negotiations become a matter of right and requirement.
 NOTHING in Art. 265 prohibits the parties from waiving or suspending the mandatory timetables and
agreeing on the remedies enforce to the same.

d. Injunction prohibited (Art. 266)

e. Participation in decision-making
f. Petition for Certification Election & Remedies
i. Factors to determine ABU
ii. Methods to determine bargaining unit
iii. Grounds for dismissal of CE
iv. Double Majority
v. Run-off election
vi. Re-run election
g. Employer as bystander
h. Rules that prevent the holding of CE and exception

CASES:
1. Davao Integrated Stevedoring vs. Abarquez, 220 SCRA 197 (Art. 261)
 Thus, a collective bargaining agreement refers to a contract executed upon request of either the employer or the
exclusive bargaining representative incorporating the agreement reached after negotiations with respect to
wages, hours of work and all other terms and conditions of employment, including mandatory provisions for
grievance and arbitration machineries.
 It is not a ordinary contract to which principles of law governing ordinary contracts are applied.
2. General Milling vs. CA, G.R. No. 146728, Feb. 11, 2004 (Art. 262-263)
 The employer’s failure to make a timely reply to the proposals presented by the union within 10 calendar days is
indicative of its utter lack of interest in bargaining with the union. Its refusal to make a counter-proposal for CBA
negotiation is an indication of its bad faith and it is a clear evasion of the duty to bargain collectively which is an
unfair labor practice.
  Also, feigning negotiations by going through empty gestures is not bargaining in good faith.
 Also, when the union submitted a bargaining proposal, the employer did not submit a counter CBA proposal.
What it did was to question the existence of the union and the status of its membership to prevent any negotiation.
Indeed, the employer was in bad faith.
 There is no per se test of good faith in bargaining. Good faith or bad faith is an inference to be drawn from the
facts of the individual case.
3. Pier 8 Arrastre vs. Confesor, G.R. No. 110854, Feb. 13, 1995
 The effectivity date of the CBA concluded through arbitral awards made by the DOLE Secretary, the NLRC, or
voluntary arbitrators was made retroactive when the Secretary of Labor resolved the labor dispute.
4. Union of Filipro Employees vs. NLRC, G.R. No. 91025, December 19, 1990
5. Free Employer vs CIR, 14 SCRA 781 (Art. 268)
 (Nature of certification election; non-litigious, non adversarial proceeding) “Petition for certification election
is not the same as the ordinary complaint where there are adversary parties, the complainant and the
defendant. However, if the representation issue is contested, the proceeding becomes one of the adversary
type and has to be decided according to lawful evidence where the intervening parties can present their
witnesses and to cross-examine those of the adversary.”
6. Tagaytay Highlands vs. Tagaytay Highlands Employees Union, G.R. No. 142000, Jan. 22, 2003 (Art. 268)
 (Petition for certification election should be supported by the written consent of at least 25% of all the
employees in the appropriate bargaining unit) “However, if there was allegation that some of the signatures in
the petition for certification election were obtained through fraud, false statement and misrepresentation, the
proper procedure is t file a separate petition for cancellation of the certificate of registration, and not to
intervene in a petition for certification election.”
 Best Forum Rule (Retractions or recantations before or after filing of petition of certification election) “IF
the retraction was made after the filing of the petition, certification election may still be ordered for the
withdrawal of consent is presumed to be involuntary. The best forum for determining whether there were
indeed retractions from some of the laborers is in the certification itself wherein the workers can freely
express their choice in a secret ballot, known as the best forum rule.
 (Art. 271) “As an innocent bystander, the employer may pray for the dismissal of a petition for certification
election on the basis of lack of mutuality of interests of the members of the union as well as lack of
employer-employee relationship.”
7. RPB Gen. Services vs. Laguesma, 264 SCRA 637 (Art. 268)
 Contract Bar Rule; 60-Day Freedom Period Rule. A petition for certification election may not be filed
when a CBA has been registered with the BLR. Where the CBA is duly registered, a petition for certification
election may be filed within the 60-day freedom period prior to its expiry.
8. Notre Dame of Greater Manila vs. Laguesma, G.R. No. 149883, June 29, 2004 (Art. 268)
 Appeal-Bar Rule. The filing of the appeal from the Order or Decision of the Med-Arbiter granting the
petition for certification election ‘stays the holding of the certification election.’
 (Pre-election conference; inclusion-exclusion proceedings) The list of eligible voters can no longer be
questioned if it was not contested in the pre-election conference. “Thus, it is not proper for the employer to
question the qualifications of workers who should be included in the list of voters in the certification election
as the ‘employer is definitely an intruder.’
9. California Manufacturing vs. Laguesma, G.R. No. 97020, June 9, 1992 (Art. 269)
 (Certification election in unorganized establishments) “In any establishment where there is no certified
bargaining agent, a certification election shall automatically be conducted by the med-arbitrator upon the
filing of a petition by a legitimate labor organization. The 25% subscription requirement necessary for the
filing of a petition is not applicable in unorganized establishments.
 (Art. 269 applies to unorganized labor organizations) “Where the supervisors of the company constitute a
bargaining unit separate and distinct from that of the rank-and-file which is organized, and they have no
bargaining agent, they may file a petition for certification elections through a legitimate labor organization as
one under an unorganized establishment.”
10. Phil. Fruits vs. Torres, G.R. No. 92391, July 3, 1992
 (Art. 268) (Perfection of election protest) “The protesting party must formalize its protest with the Med-
Arbiter within 5 days after the close of the election proceedings. If not recorded in the minutes and
formalized within the prescribed period, the protest shall be deemed dropped.”
 (Art. 270) (Petition for certification election filed by an employer) “A certification election is the sole
concern of the workers and the employer is regarded as nothing more than a bystander with no right to
interfere at all in the election, the only exception being where the employer has to file a petition for
certification election because it is requested to bargain collectively.