Labor Law: Book V; Title VII Collective Bargaining and Administration of Agreement (Arts. 261

Collective Bargaining and Administration of Agreement

Arts. 261 - 272

Q: Before collective bargaining takes place, the employees' representative should first be identified. How is this done?

Q: Can there be several unions of rank-and-file employees in one company?

Q: In an election to resolve union rivalry, is the employer an "outsider" although it is his company being affected?

Q: After winning an election, what may a union do if the employer still refuses to bargain?

Q: Is a moratorium on wage increases valid?

Q: May the parties "invent" their own method of collective bargaining?

Art. 261. Procedure in collective bargaining

The following procedures shall be observed in collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice;

(b) Should differences arise on the basis of such notice and reply, either party may request for a conference which shall begin not later than ten (10) calendar days from the date of request.

(c) If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own initiative and immediately call the parties to conciliation meetings. The Board shall have the power to issue subpoenas requiring the attendance of the parties to such meetings. It shall be the duty of the parties to participate fully and promptly in the conciliation meetings the Board may call;

(c) During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or impede the early settlement of the disputes; and

(d) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary arbitrator.

Own Notes

Procedure in collective bargaining

Notice

When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals.

Reply

The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice;

Conference

Should differences arise on the basis of such notice and reply, either party may request for a conference which shall begin not later than ten (10) calendar days from the date of request.

Intervention/Conciliation

If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own initiative and immediately call the parties to conciliation meetings.

Power/Duty of the Board

The Board shall have the power to issue subpoenas requiring the attendance of the parties to such meetings.

The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary arbitrator.

Duty of the Parties

It shall be the duty of the parties to participate fully and promptly in the conciliation meetings the Board may call.
During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or impede the early settlement of the disputes.

Notes

Collective bargaining may be viewed, firstly, as a system of relations among the industrial "actors" identified by Harvard's John Dunlop as the:

government,
employers and their associations
employees and their associations

It is a system of industrial democracy.
Secondly, collective bargaining refers to the process of formulating and administering at the enterprise a binding collective contract between the employer and employees.

This second meaning is the subject of Article 261.

A bird's-eye view of this process is shown below.
But before collective bargaining can take place, the employees' bargaining representative should first be identified.

The way to do this is explained in Articles 268 and 269.

Article 259(g) says that violating the duty to bargain is considered an unfair labor practice.

Stages of the Collective Bargaining Process

Stage 1: Organization Non-Representational

Normal Course:

Formation and registration of union
Request and grant of DOLE certification; or
Petition for certification/consent election (C.E.)
Determination of election constituency or collective bargaining unit (CBU)
Holding of election
Certification of exclusive bargaining representative (EBR)

Detour/Deviation:

Election protest
Appeal to Labor secretary
Certiorari in Court of Appeals
Strike because of union busting or other ULP by employer
Third-party intervention: conciliation-mediation or arbitration

Stage 2: Bargaining Proper

Normal Course:

Bargaining preparations
Presentation of proposals and counter proposals
Bargaining on specific mandatory or non- mandatory items
Conclusion of negotiations; signing
Ratification
Registration of Collective Bargaining Agreement (CBA)

Detour/Deviation:

Strike/lockout because of bargaining deadlock or ULP in bargaining
Third-party intervention: conciliation-mediation or arbitration

Stage 3: Contract Administration

Normal Course:

Implementation of CBA provisions
CBA questions submitted to and resolved through grievance machinery or voluntary arbitration
Renegotiation on second or third year of non-representational provisions
Freedom period on the fifth years; holding of election to resolve employee representation

Detour/Deviation:

Strike because of gross violation of CBA economic provisions
Third-party intervention: conciliation-mediation or arbitration

Art. 262. Duty to bargain collectively in the absence of collective bargaining agreements.

In the absence of an agreement or other voluntary arrangement providing for a more expeditious manner of collective bargaining, it shall be the duty of employer and the representatives of the employees to bargain collectively in accordance with the provisions of this Code.

Own Notes

Duty to bargain collectively in the absence of collective bargaining agreements.

Absence of:

collective bargaining agreement or
other voluntary arrangement providing for a more expeditious manner of collective bargaining,

Duty of employer and the representatives of the employees:

Bargain collectively in accordance with the provisions of this Code.

Art. 263. Meaning of duty to bargain collectively.

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

Own Notes

Meaning of duty to bargain collectively.

The performance of a mutual obligation to meet and convene promptly and expeditiously in good faith

Purpose of negotiating an agreement with respect to:

wages
hours of work
all other terms and conditions of employment

including proposals for adjusting any grievances or questions arising under such agreement, and
executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession.

Art. 264. Duty to bargain collectively when there exists a collective bargaining agreement.

When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties.

Own Notes

Duty to bargain collectively when there exists a collective bargaining agreement

Neither party shall terminate nor modify such agreement during its lifetime.

However:

Either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date.

Duty of both parties:

Keep the status quo
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.

Duty to Bargain

The duty to bargain collectively arises only between the "employer" and its "employees."

Where neither party party is is an an "employer" nor an "employee of the other, no such duty exists.
Certainly, where there is no duty to bargain collectively, the refusal to bargain violates no right. (Allied Free Workers, January 31, 1967, 19 SCRA 258)

The parties, then, to collective bargaining are the employer and the employees represented by their labor union.
While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate contract negotiation.
The mechanics of collective bargaining (jurisdictional preconditions) are set in motion only when the following conditions are present, namely:

possession of the status of majority representation of the employees' representative in accordance with any of the means of selection or designation provided for by the Labor Code;
proof of majority representation; and
a demand to bargain under Article 261, par. (a) of the Labor Code.

In the case Kiok Loy vs. NLRC, January 22, 1986, the Supreme Court called these the "jurisdictional preconditions" of collective bargaining.

If the jurisdictional preconditions are present, the collective bargaining should begin within the "certification year" which means the 12 months following the determination and certification of the employees' exclusive bargaining representative.
The law contemplates two situations when the duty to bargain exists:

Situation one, where there is yet no collective bargaining agreement (Art. 262), and
Situation two, where a CBA exists. (Art. 264)

For Situation One

the duty to bargain means in essence the performance of an obligation to meet and convene. It is a mutual obligation devolving upon both the employer and the employees' majority union
The meeting and convening is for the purpose:

negotiating an agreement on the subjects of:

wages;
hours of work; and
all other terms and conditions of employment including proposals for adjusting grievances or questions arising under such agreement; and

executing a contract incorporating such agreement if requested by either party.

The kind compliance required is prompt, expeditious and in good faith.
The limitations of the duty are that it does not compel any party:

to agree to a proposal, or
to make a concession

For Situation Two

the duty to bargain means all of the above and additionally, the obligation not to terminate or modify the CBA during its lifetime which is:

five years for the representational ("political") provisions
three years for all other ("economic") provisions.

But 60 days before the CBA expires, either party may notify the other, in writing, that it desires to terminate or modify the negotiable provisions of the agreement.
During this 60-day notice period and until a new agreement is reached, the CBA remains in full force and effect and the parties (the employer and the bargaining union) are duty-bound to keep the status quo.

Violations of Duty to Bargain

Violating the duty to bargain, amounting to ULP, is committed in one or more of four ways:

failure or refusal to meet and convene;
evading the purposes of bargaining;
not observing good faith in bargaining; and/or
grossly violating the economic provisions of the CBA.

Expeditious Bargaining

The bargaining method outlined in the Code is not the only method available.
Article 262 allows the parties to devise a more expeditious manner of collective bargaining.
In the absence of such agreement, the parties should observe the procedure described in the Code.

CBA Imposed on Employer

Article 262 allows the parties to expedite the bargaining process but not to evade the bargaining duty.
In the case of Kiok Loy vs. NLRC, the facts showed that:

the union is the duly certified bargaining agent;
it made a definite request to bargain and submitted its collective bargaining proposals; but
the employer made no counter proposal whatsoever.

Because of the employer's refusal to bargain, the NLRC issued an Order declaring the union's draft CBA as the collective agreement that should govern the relationship between the parties.
On review, the Supreme Court upheld the NLRC, i.e., it imposed on the employer the CBA as drafted and proposed by the union. (Consequently, the business collapsed.)

The sad experience of Mr. Kiok Loy was repeated, unfortunately, in the Divine Word University of Tacloban case (decided on September 11, 1992). The Court applied the Kiok Loy precedent. (Subsequently, the school closed.)

Bargaining in Good Faith

Collective bargaining frequently succeeds or fails depending on the good faith and credibility of the parties.
Good faith or bad faith has to be deduced from the facts of each case.
Werne has commented:

"A fair criterion of good faith in collective bargaining requires that the parties involved deal with each other with open and fair mind and sincerely endeavor to overcome obstacles or difficulties existing between them to the end that employment relations may be established and obstruction to the free flow of commerce prevented. Mere pretended bargaining will not suffice; neither must the mind be hermetically sealed against the thought of entering into an agreement, To do less than is required by the standards of good faith and conduct is a refusal to bargain collectively and violates the spirit and intent of the Act." (Werne, The Law on Labor Relations, pp. 249-250)

The duty to bargain in good faith is "an obligation to participate actively in the deliberation so as to indicate a present intention to find a basis for agreement."
Not only must the employer have an open mind and a sincere desire to reach an agreement but a sincere effort must be made to reach a common ground.

open mind + sincere desire + sincere effort

A complaint against " bargaining in bad faith " has to be raised while bargaining is still on-going.

When bargaining is over and the contract is already executed, to complain of bargaining in bad faith is too late. Such complaint may no longer be entertained.
If the alleged bad faith in bargaining is serious enough to affect the binding character of the contract, the charge of bad faith should have been raised and resolved before contract signing. (See Samahang Manggagawa sa Top Form Manufacturing United Workers of the Philippines, September 7, 1998.)

Bargaining in bad faith is considered an unfair labor practice.

It may serve as a valid reason to hold a strike (by employees) or declare a deadlock (by employer).

Deadlock

Similarly, a strike or a lockout may occur when the bargaining is caught in a deadlock or impasse.
There is deadlock over an issue when the parties bargaining in good faith, fail to resolve the issue despite efforts or attempts to do so and there are no definite plans for further efforts to harmonize their dissimilar positions.

Boulwarism

It is likewise ULP to make a proposal which is not subject to bargaining.
In a US case, the employer's "firm and final" offer, accompanied by a take-it-or-leave-it strategy, was presented through a barrage of publicity praising the "fairness" of the package and picturing the company (not the union) as the employees' "true" representative.

In effect, there was to be no bargaining and the union was rendered ineffective or irrelevant.
The company dealt with the union through the employees rather than with the employees through the union.

This strategy, called Boulwarism because it was first used by a Mr. Boulware, is construed by a US court as bad-faith bargaining, hence an unfair labor practice. (See NLRB vs. General Electric Co., 418 F. 2d 736.)

Disclosure of Information

During bargaining, employee representatives may be entitled to wage information and related data in order to negotiate effectively over the rates of compensation. (Timken Roller Bearing Co. vs. NLRB, 325 F 2d 746; NLRB vs. Fitzgerald Mills Carp., 313 F 2d 260)
This right of a legitimate labor organization is recognized under Article 251, particularly paragraph (c) and detailed in Book V, Rule XXII, Section 5 of the Implementing Rules.

Contents of CBA

The subjects of provisions commonly found in collective bargaining agreements are:

Enumeration or reservation of management rights;
Union recognition and security;
Wage and fringe benefits and their administration;
Physical working conditions;
Particular matters affecting personnel management and plant operation;
Grievance and arbitration;
Duration of contract.

Programs to promote drug-free workplaces are required of employers and unions.

Such programs shall include mandatory drafting and adoption of company policies against drug use in the workplace.
The programs should be made part of CBA and any similar agreements. (R.A. No. 9165, Comprehensive Dangerous Drugs Act approved on June 7, 2002)

Modification

Sixty days before a CBA expires, either party notifies the other of its desire "to terminate or modify" the contract.
"To modify" does not necessarily mean "upward revision" of the provisions of the contract, such as increasing the wages and replacement of employment benefits, if justified by circumstances.

The parties, said the Court, may not only renew the existing CBA but also propose and discuss revisions required by circumstances. (De La Salle University, April 12, 2000)

"Downward revision" is lawful but good faith is always a rule of conduct.

Ratification and Registration

The agreement negotiated by the employees' bargaining agent should be ratified or approved by the majority of all the workers in the bargaining unit not just the members of the bargaining union.
This requirement is found in Article 237 and restated in Book V, Rule XVI Section 1 of the Implementing Rules.
The ratification and the way to do it are mandatory.

The CBA should be posted for at least five days in two conspicuous places in the establishment before ratification, to enable the workers to inform themselves of its provisions.
Moreover, the CBA to be submitted to the DOLE should carry the sworn statement of the union secretary, attested to by the union president, that the CBA had been duly posted and ratified.

These requirements are mandatory; noncompliance makes the CBA ineffective. (Associated Trade Unions, June 20, 1988)

The collective agreement, after ratification, should be registered with the Bureau of Labor Relations or the DOLE Regional Office that has jurisdiction over the establishment.
The registration should be done within 30 calendar days from execution of the agreement. (Book V, Rule XVI, Sec. 1, Implementing Rules)

Centralized or Decentralized Bargaining

"Decentralized"

A collective bargaining agreement is concluded in a particular enterprise and binds only that enterprise.
The common method of collective bargaining in the country.

"Centralized"

It is also possible and no provision in the Code expressly disallows it.
It takes place when collective bargaining is done with the intention of formulating a contract that will bind number of employer enterprises grouped by geographical location, or along industry line, or some other agreed basis of grouping of employers.

For instance. there may be a common CBA for all companies or "locators" in a special economic zone, or a common CBA for all companies in the fast food or the hotel business. The parties may agree what matters to cover in the common CBA and what to be left to the CBAs of the individual enterprises.
The idea of centralized bargaining is introduced by D.O. No. 40-03 in its provisions on multi-employer bargaining. Some details of procedure are mentioned in the department order (which is also the implementing rules of Book V of the Labor Code).
But it is stressed that multi-employer bargaining is optional for employers and unions.

The outlined procedures moreover, may be considered modifiable because the Labor Code itself, in Article 262, allows the parties to devise a "more expeditious" manner of bargaining.

Art. 265. Terms of a collective bargaining agreement.

Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five-year term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the Collective Bargaining Agreement, the parties may exercise their rights under this Code.

Own Notes:

Terms of a collective bargaining agreement:

Representation aspect

term of five (5) years

All other provisions

not later than three (3) years after its execution

Prohibition on:

Entertaining a petition

Questioning the majority status of the incumbent bargaining agent

Conducting certification election

Conditions on Prohibition:

by the Department of Labor and Employment
outside of the sixty-day period immediately before the date of expiry of five-year term of the CBA

Retroactivity of Agreements

Entered into within six (6) months from the date of expiry of CBA

shall retroact to the day immediately following such date

Entered into beyond six months,

parties shall agree on the duration of retroactivity thereof

Deadlock in the renegotiation of the CBA

parties may exercise their rights under this Code

Effectivity Date

This Article speaks of two matters:

effectivity date
duration or term of a CBA.

If the CBA is new, that is, not a renegotiated or extended extended CBA

effectivity date:

not covered by any rule in the Labor Code
parties may agree on the date.

If the CBA is an extension or renegotiation of an expiring one,

effectivity date:

Article 265 will apply
Example:

A CBA expires on December 31 and its renegotiation is finished within the next six months, then the renegotiated CBA dates back to January 1.
If no new CBA is concluded by June 30, then there will be no automatic retroaction; both the retroaction (if any) and the effectivity date of the new contract will be left to the parties to agree on.

The above rule on retroaction does not necessarily apply to a CBA resulting from an arbitration award, such as in the case of "national interest dispute" under Article 278 (g). In that situation, the Secretary's determination of the retroactivity date shall control in the absence of agreement between the parties. (See Manila Electric, February 22, 2000.)

Automatic Renewal

But suppose the parties fail to renew or extend the expired CBA. Is there a CBA?
YES. The last sentence of Article 264 states: "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."
In other words, the law provides for automatic renewal and self- continuity of the CBA. (See New Pacific Timber, March 17, 2000)

Duration of a CBA

The other matter Article 265 speaks of is the duration of a CBA.
A CBA lasts for:

five (5) years for the "representation aspect"
not more than three (3) years for "all other provisions."

"Representation aspect"

refers to the identity and majority status of the union that negotiated the CBA as the exclusive bargaining representative.

"All other provisions"

simply refers to the rest of the CBA, economic as well as noneconomic, except representational, provisions.
For instance, redefining the inclusions or exclusions of the bargaining unit is not "representational" as it does not concern the standing of the union as the bargaining representative of the employees; hence, it falls under "all other provisions" that are renegotiable on the third year of the CBA, unless the CBA itself specifies otherwise.

May the parties agree on a CBA that will last longer than three years? YES
Rivera, et al., January 23, 2002

In the situation presented in Rivera vs. Espiritu, the Philippine Airlines (employer) had long been suffering from severe financial losses, for which reason the management took steps to close the company.
To help find ways to prevent the closure, the union presented a set of proposals including (1) a 10-year suspension of the existing CBA, and (2) union entitlement to three seats in the PAL board of directors.
After the general membership ratified the union proposal, the PAL management acceded to it.
But some members of the union dissented and questioned the arrangement as unconstitutional and contrary to public policy, citing particularly the three-year and five-year periods specified in Article 265.
The High Court junked the objection. It ruled that, given the peculiar circumstances of the case, the 10-year suspension of the CBA was valid and not in conflict with Article 265.

Insular Hotel Employees Union-NFL, September 22, 2010

In a similar situation, the union president proposed to the employer a ten-year suspension of the CBA and the retirement of some employees to be rehired at lower pay rates.
The suggestions were made all for the purpose of preventing closure of the company due to severe losses.
The union's action and the resulting memorandum of agreement, supported by the union members and needed for the survival of the company, were upheld by the Court of Appeals and the Supreme Court.
We should note carefully that the agreement is bilateral between the employer and the union, hence, not violative of Article 100 that prohibits unilateral diminution of benefits.

Art. 266. Injunction prohibited.

No temporary or permanent injunction or restraining order in any case involving or growing out of labor disputes shall be issued by any court or other entity, except as otherwise provided in Articles 226 and 279 of this Code.

Own Notes:

Injunction prohibited:

any case involving or growing out of labor disputes

Exception:

Art. 226

Ocular Inspection (NLRC)

Art. 279

Prohibited Activities (Strikes)

Notes

This Article states the government's no-injunction policy on labor disputes.
This means that disputes between employers and employees, unionized or not, should preferably be resolved by them instead of by government command.
Labor disputes, defined in Article 219, should as much as possible be resolved by the parties themselves because the dispute is essentially confined only between them; they should know best how to resolve it.

Article 218, we recall, declares as a policy the primacy of bargaining and voluntary modes of settling labor disputes.
In labor dispute resolution, government intervention is the exception, not the rule. Injunctive writ is not favored.

An order or writ of injunction

commands a person to do or not to do a particular act.
It may be a positive (mandatory) or negative (prohibitory) command.
Injunction may be issued in instances specified in Article 279 dealing with prohibited activities in the course of a strike or lockout.

If, for instance, strikers are blockading the factory gate — something the law prohibits — then an injunction against the blockade may be issued.

The injunction is directed against the illegal activities, not against the strike itself.

Even then, the issuance of the injunction has to follow the stringent procedure specified in Article 226(e).
"National interest" cases, however, are a totally different story.

Here, an injunction may be issued automatically by the Secretary of Labor even when none of the parties asks for it.
The injunction is directed against the strike itself and is meant to protect public welfare.
This matter is taken up under Article 278.

Art. 267. Exclusive bargaining representation and workers’ participation in policy and decision-making.

The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils: Provided, That the representatives of the workers in such labor-management councils shall be elected by at least the majority of all employees in said establishment.

Own Notes

Exclusive bargaining representation

labor organization designated or selected by the majority of the employees
individual employee or group of employees may present grievances to their employer

Workers’ participation in policy and decision-making

right to participate in policy and decision-making processes

directly affecting their rights, benefits and welfare

right to form labor-management councils

elected by at least the majority of all employees

"CBU": The Employees Represented in Bargaining;

"CBU" Not the Same as the Union

This Article introduces two names:

bargaining unit
bargaining representative.

Collective Bargaining Unit (CBU)

the group of employees that will deal or negotiate as group with their employer.
This group has to be organized and registered.
This formalized organization is union.
If small, the unit may form only one union. If big they can form several unions.
If there union rivalry, only one of them should emerge as the bargaining is representative.

Bargaining Unit

refers to a group of employees sharing mutual interests within a given within employer unit, comprised of all or less than all of the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer unit. (Implementing Rules [Book V, Rule I, Sec. 1])

In a school, for instance, all the teachers may constitute one bargaining unit and all the nonteachers, another unit.
In a factory, all production personnel may comprise a unit, and another one for office and/or sales staff.
Or, geographically, all the rank-and-file employees in, say, Bataan may be one unit and those in Batangas, another.

"Appropriate" CBU

Whether the grouping is based on geography, or types of jobs, or something else, the CBU should be "appropriate," that is, the CBU members should share community or mutuality of interest.
Their problems — the matters they want to raise to their employer — should be substantially similar if not the same.
This is preferred because the basic test of a bargaining unit's acceptability [or appropriateness] is whether it will best assure to all employees the exercise of their collective bargaining rights. (Democratic Labor, February 28, 1958; Alhambra Cigar, February 20, 1960)
Bargaining will be difficult and may even harm the employees if the bargaining unit is composed of jobholders with dissimilar, from even or clashing interests.

The interests of sales people for instance, may differ even oppose the interest of the factory group. If the two groups are in the same bargaining unit, their interests may clash when they face the employer in bargaining. The field sales group may want higher insurance coverage, the factory group may prefer higher overtime pay.
Similarly, in a transportation company, the bus drivers and conductors may want to group separately from the office and maintenance personnel.

Commonality of interests defines "appropriateness" of the bargaining unit.

One Employer One Unit

The law prefers to consider as one bargaining unit all the employees in one enterprise, except that supervisors and rank-and-file should constitute separate units.
The employer enterprise is itself a unit, meaning that all the rank-and-file in the company should, as a rule, constitute only one unit.
Solidarity is strength. To maintain the solidarity and strength of the group, the law does not favor dividing and shrinking the rank-and-file into several smaller units.
A single plant unit is presumed to be appropriate for purposes of collective bargaining. (Stalfort and Sons, 156 NLRB No. 7; Parsons Investment Co., 152 NLRB No. 14; Purity Foods, 150 NLRB No. 148)
It is likewise basic, however, that two separate corporations cannot be treated as a single bargaining unit even if their businesses are related. Two different employers make two different bargaining units. (Diatagon Labor, 101 SCRA 534 [1980])

"EBR": The Bargaining Representative

"EBR" — exclusive bargaining representative

The union chosen by the CBU members to represent them in bargaining with the employer.

Within one unit there may be one or several unions, but only one union may act as the bargaining representative of the whole unit.
The representational rivalry has to be resolved through an election among the CBU members.
In short:

the unit is the group represented;
the union is the representative of that unit;
the unit is the principal;
the union is the agent.

How to choose the EBR is explained in Articles 268 and 269.
Distinguishing the bargaining unit from the union affects not only bargaining but also voting.

It is the unit (not only the union members) that is

represented in negotiating a CBA with the employer.
votes to reject or to accept the draft CBA.

Only of the union members, excluding the rest of the unit:

decides whether to strike or not

Employee's Right to Participate

The first paragraph of this article speaks of organized employees
The second paragraph deals about workers' participation in policy or decision-making processes whether the workers are unionized or not.
But the participation method should be organized.

For that purpose, a council may be formed where the employees' representatives may or may not come from organized unions.

The employees' participatory right is guaranteed under the Constitution, reiterated as a state policy under Article 218(g), and restated in this Article 267, second paragraph.

Because of these two Articles, both founded on the Constitution and strengthened by court rulings and Rule XXI of the Implementing Rules, participatory management in the Philippines appears to be not just a theory, but a mandate of law.

The law, while promoting collective bargaining, really aims at employee participation in policy and decision-making.

In other words, despite the far-reaching significance of collective bargaining, it is incorrect to say that what secures industrial democracy is collective bargaining and no other.
It is equally misleading to say that employee participation is impossible or ineffective without unions.

Neither is collective bargaining the end-goal of employee representation.

Rather, the real aim is employee participation in whatever form it may appear — bargaining or no bargaining, union or no union.

Collective bargaining may be the distinctive feature of industrial democracy but employee participation is both its generating force and governing consequence, both its cause and effect.

But what is the extent of the employee's participatory right?

The Highest Court has explained that the participatory right does not carry management powers. It does not turn employees or their union into co-managers of the enterprise. The participatory right does not give authority to approve or disapprove a policy or a managerial decision. It gives opportunity to suggest, to express opinions, but not power to say yes or no to a projected decision. It implies right of expression, not a power to decide business or management issues.

Labor-Management Councils (LMC)

Promotion of employees' participation is likewise the reason the law allows (but does not require) the formation of labor-management councils (Art. 267) or labor-management committee. (Art. 292[h])
The Rules mandate the DOLE to promote the formation of labor-management councils in organized and unorganized establishments. (Implementing Rules, Book V Rule XX7, Sec. 1)

An LMC, either as council or committee or cooperation program, can serve as a forum where management and employees may air their concerns, short of collective bargaining.

It is largely a communication mechanism for myriad purposes including prevention or resolution of disputes.
It can even act as a grievance machinery.

Article 267, second sentence, reserves the right of an individual employee or group of employees (unionized or ununionized) to present grievances to their employer at any time.

Effectively voicing one's grievance is reserved and hallowed by law, with or without collective bargaining, with or without the EBR or an LMC.

Art. 268. Representation issue in organized establishments.

In organized establishments, when a verified petition questioning the majority status of the incumbent bargaining agent is filed by any legitimate labor organization including a national union or federation which has already issued a charter certificate to its local chapter participating in the certification election or a local chapter which has been issued a charter certificate by the national union or federation before the Department of Labor and Employment within the sixty (60)-day period before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an election by secret ballot when the verified petition is supported by the written consent of at least twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the will of the employees in the appropriate bargaining unit.

To have a valid election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit.

When an election which provides for three or more choices results in no choice receiving a majority of the valid votes cast, a run-off election shall be conducted between the labor unions receiving the two highest number of votes: Provided, That the total number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast. In cases where the petition was filed by a national union or federation, it shall not be required to disclose the names of the local chapter's officers and members.

At the expiration of the freedom period, the employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election is filed.

Own Notes:

Procedure in Organized Establishments

Filing of a verified petition

questioning the majority status of the incumbent bargaining agent
by any legitimate labor organization

including a national union or federation which

has already issued a charter certificate to its local chapter participating in the certification election

local chapter which

has been issued a charter certificate by the national union or federation before the Department of Labor and Employment within the sixty (60)-day period before the expiration of the collective bargaining agreement

supported by the written consent of at least twenty-five percent (25%) of all the employees in the bargaining unit

Automatically Ordering of an Election

by the Med-Arbiter
secret ballot

Valid Election

at least a majority of all eligible voters in the unit must have cast their votes
labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit

Run-off Election Requisites

A run-off election shall be conducted between the labor unions receiving the two highest number of votes if:

When an election which provides for three or more choices results in no choice receiving a majority of the valid votes cast
The total number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast.

In cases where the petition was filed by a national union or federation, it shall not be required to disclose the names of the local chapter's officers and members

Expiration of the freedom period

Employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election is filed

Art. 269. Petitions in unorganized establishments.

In any establishment where there is no certified bargaining agent, a certification election shall automatically be conducted by the Med-Arbiter upon the filing of a petition by any legitimate labor organization, including a national union or federation which has already issued a charter certificate to its local/chapter participating in the certification election or a local/chapter which has been issued a charter certificate by the national union or federation. In cases where the petition was filed by a national union or federation, it shall not be required to disclose the names of the local chapter's officers and members.

Own Notes

Procedure in Unorganized Establishments

Filing of a Petition

by any legitimate labor organization

including a national union or federation which

has already issued a charter certificate to its local/chapter participating in the certification election

a local/chapter which

has been issued a charter certificate by the national union or federation.

Automatic Certification Election

conducted by the Med-Arbiter

Petition was filed by a national union or federation

Not be required to disclose the names of the local chapter's officers and members

Methods of Choosing the Bargaining Union

Before collective bargaining can take place, the employees have to choose a labor union that will represent them in bargaining with the employer.
This union is known as the "bargaining agent" whose principal is the employees themselves.
These employees comprise a group which is technically called the "bargaining unit."
The union that will represent the bargaining unit is chosen through one of three methods:

SEBA certification
Certification Election, and
Consent Election.

SEBA Certification

The easiest method.
SEBA Certification happens when a union proves to the DOLE regional office that:

the bargaining unit has no existing CBA;
the requesting union the only union in the bargaining unit; and
such union's membership comprises the majority of the employees in the bargaining unit.

If anyone of these three requisites is not proved, the requested certification cannot be be granted.
In that case, the DOLE has to treat the union's request as a petition for a certification election (PCE).
On the other hand, if the SEBA Certification is granted, the union becomes the EBR (exclusive bargaining representative) or SEBA (sole and exclusive bargaining agent).
The certification has to be posted for 15 days at conspicuous places at the workplace.
Upon issuance of the certification, the certified union becomes entitled to all the rights and privileges of an exclusive bargaining agent of the bargaining unit.
It shall take steps to initiate negotiation for a CBA.

This it must do within one year from its being certified.
Within this one-year period, as a rule, a petition (from another union) seeking to replace the bargaining agent will not be entertained by DOLE.

SEBA Certification, introduced in D.O. No. 40-1-15 (September 7, 2015) replaces the now defunct voluntary recognition method.

Certification Election (C.E.)

Where SEBA certification does not or cannot happen, a union selection through election should take place.
The electoral procedure to determine the employees' exclusive bargaining representative is outlined in Articles 268 to 272.
The process is properly called "certification election" because it serves as the official, reliable and democratic basis for the DOLE to determine and name (or "certify") the union that shall represent the employees in bargaining with the employer.
Logically, it is also called "representation election."

Where and When C.E. May Happen

C.E. may take place in either an organized company (Art. 268) or an unorganized company. (Art. 269)
A company is said to be "unorganized" if there is yet no duly recognized or certified bargaining union.

In a nonunionized company, a C.E., after DOLE's approval of a petition for certification election, may be held anytime, except within 12 months of a previous C.E.
The tenor of Article 269 is one of command.

Once a PCE is filed by a legitimate labor organization involving an unorganized establishment, the Med-Arbiter shall automatically order the conduct of a certification election, and that order cannot be appealed.
The employer, under such situation, cannot voluntarily recognize another union and sign a CBA with it. To do so would constitute ULP. (Me-Shurn Corp., January 11, 2005)

PCE in Organized Company

In an organized company, i.e., where there is already a bargaining union, C.E. cannot be held anytime.
A petition to hold a C.E. can be filed only within the so-called "freedom period" which is the last 60 days of the fifth year of the CBA.
If there is no such petition or such petition is denied, no C.E. will take place and the incumbent union continues being the bargaining agent.
In other words, all throughout the five-year life of the CBA, including the "freedom period," and thereafter, the bargaining union remains as the employees' representative, until duly replaced by a challenger union.
Even during the "freedom period" it can renegotiate the expiring CBA with the employer, except that the Med-Arbiter may order to suspend the renegotiation if a petition for C.E. has been filed within the "freedom period" and the petition needs to be resolved.
Even a change of officers does not terminate the status union as the bargaining agent.

This is so, because the bargaining agent is the union itself as an entity, not the union officers.

In an organized company, the PCE is filed by a union that wants to replace the incumbent union.

Such union (the challenger) may be:

an independent union,
a chapter of a federation, or
the federation itself;

in any case, it has to be an LLO, a legitimate (registered) labor organization.

The amendatory law R.A. No. 9481 emphatically states that if the petitioner is a national union or federation, it cannot be required to disclose the names of the officers of the local chapter.

This non-disclosure rule is intended to protect the local officers from possible adverse reaction of the employer.
Evidently, the lawmakers are so seriously concerned about this identity shield that the non-disclosure rule is stated twice, once in Article 268 and again in Article 269.

Naturally, the incumbent union does not file a petition for C.E. because it does not challenge itself. But is necessary party, a "forced intervenor," when a petition tor a C.E. is filed by a challenger union(s).

The incumbent has to file a motion for intervention so it can oppose the petition or just to make itself a party to the petition, so that its name will be included in the ballot as a candidate.

An employer, under Article 270, may (but very rarely) file such a petition.

Except under Article 270, only a legitimate labor organization may petition for a C.E. The employer is not a party to the petition; hence, he cannot oppose it even if he is entitled be notified. (SMC Quarry 2, May 19, 2004)

The PCE filed by a rival legitimate labor union with a Med-Arbiter in the DOLE Regional Office that has jurisdiction over the principal office of the employer.

But where the employees work place is located in another region, the convenience of the workers, as the economically disadvantaged party should be given greater consideration.
If the venue or place of filing is improper, it should be objected to at the first hearing of the petition, or the objection is deemed waived. (Nestle Phil., 209 SCRA 834 [1992]; Cruzvak, 238 SCRA 389 [1994])

The PCE should be supported by the written consent of at least 25% of the employees in the bargaining unit.

The 25% support is intended to indicate whether the petitioner union has a sizeable membership to possibly win and replace the incumbent union.
Without the 25% support, the petition would look like a nuisance.

If the needed support is depleted by withdrawal of the supposed union sympathizers, the Med-Arbiter shall consider the time the withdrawals happened.

Withdrawals made:

before the filing of the petition are presumed voluntary;
done after the filing are deemed involuntary. (La Suerte Cigar & Cigarette Factory, 123 SCRA 674 [1983])

Even when the sufficiency of the 25% support is in doubt, the Med-Arbiter still has the discretion to call a C.E. since an election is the democratic way of determining the employees' choice.

If the 25% support is evident, holding the C.E. becomes compulsory. (California Mfg. Corp., 209 SCRA 606 [1992])

After receipt of the petition for C.E., the Med-Arbiter calls the parties to a preliminary conference:

to identify the bargaining unit to be represented
to explore the possibility of a consent election
to verify the existence of any of the bars or legal objections to the holding of a certification election, and
such other relevant matters.

If at the preliminary conference

the unions agree to hold a consent election

the PCE will no longer be heard and the unions will instead prepare for the consent election.

the unions fail to agree to hold a consent election

the Med-Arbiter may deny and dismiss, or
He may grant the petition for a C.E.

Denial or grant of the petition is always appealable to the Secretary, but never the approval of a PCE in an unorganized (ununionized) bargaining unit, in line with the policy to promote unionization.

Consent Election Instead of C.E.

If the contending unions agree to hold a consent election, the Med- Arbiter shall not issue an order for holding a certification election.
Instead, he shall enter the fact of the unions agreement in the minutes of the hearing and schedule a pre-election conference.
The Regional Director will immediately designate an election officer to assist the Med-Arbiter.
Thus, "Consent Election" means an election voluntarily agreed upon by the contending unions, with or without the intervention of the Department, to determine which union carries the majority of the workers in the appropriate collective bargaining unit.
The result of a consent election binds the parties. The union that wins has the right to claim being the EBR and act accordingly.

Election Bars

Aside from observing the freedom period and obtaining a 25% support, the petitioner union must meet three more requisites for the holding of a certification election.
But these are "negative requisites" i.e., they should not be there or else their existence can bar or block the holding of a C.E. They are:

Certification Year Bar

No C.E. may be held within 12 months from a previous C.E., or a consent election, or a run-off election or SEBA Certification; in short, only one C.E. is allowed in a 12-month period.
But the 12-month prohibition presupposes that there has been an actual conduct of election, i.e., ballots were cast and votes were counted.
In a case where there was no certification election because the first petition was dismissed on the ground that it did not include all the employees who should be properly included in the collective bargaining unit, there was really no election, hence the certification year bar does not apply. (R Transport Corp., November 16, 1993)

Deadlock Bar

No C.E. may be held if there is a pending bargaining deadlock which has been submitted to conciliation or arbitration or has become the subject of a valid notice of strike or lockout.

Contract Bar

It refers to the existence of a CBA (Art. 268 in relation to Art. 238): Where there is an existing CBA which has been duly registered, a petition for C.E. may be filed, as already explained, only within the "freedom period" which is the last 60 days of the fifth year of the CBA.
In the period before that, i.e., within the preceding four years and 10 months, no petition for C.E. may be entertained; the subsisting contract must be respected.
During the 60-day freedom period, the parties may renegotiate and conclude a CBA, unless ordered not to do so. In any case, such "early agreement" does not adversely affect the representation case. (D.O. No. 40-03, Rule VIII, Sec. 24)

Additional grounds for dismissal of a PCE are listed in the Implementing Rules of Book V, Rule VIII, Sec. 14.

Question of Union Legitimacy

If the legitimacy of the union that filed a PCE is questioned in a petition to cancel its registration, such question does not suspend hearing the petition for C.E.
Under the Implementing Rules as amended by D.O. No. 40-03 , the PCE may be dismissed if the union's legal personality has been revoked or cancelled with finality; hence, mere pendency of a petition to cancel the union's registration is not reason enough to dismiss a petition for C.E
Moreover, the question of whether or not the petitioner is an LLO cannot be raised in the PCE itself; it can be raised only in a separate and independent petition for cancellation. It has to be heard and resolved by the Regional Director, not by the Med-Arbiter.
But DOLE itself has a list of LLOs.

The Med-Arbiter can easily verify if the petitioner is in the list.
If it is not there, the Med-Arbiter is allowed to dismiss the PCE.

Objection to the legitimacy of the union is estopped or barred if holding the C.E. was "by agreement of the parties." By such agreement, the legal personality of the petitioner union is deemed acknowledged. (Associated Labor Union, 305 SCRA 762 [1999])

Voters

Before a C.E. is held, a pre-election conference has to be conducted by an election officer designated by the DOLE regional director. The conference sets the mechanics of the election. It also determines the list of qualified voters.
All employees within the bargaining unit at least three months before the filing of the PCE shall be eligible to vote, including a dismissed employee whose dismissal is being contested in a pending case unless the dismissal was declared valid in a final judgment at the time of the conduct of the CE. (Rule IX, D.O. No. 40-1-15)
Voting in a C.E. requires only membership in the bargaining unit.

It does not require membership in the union because C.E. elects a bargaining union; it does not elect union officers.

Even probationary employees, and employees who are Iglesia ni Cristo members are entitled to vote in a C.E., if they are part of the bargaining unit.
The Implementing Rules provide the details or mechanics of holding a certification election.
The Implementing Rules also detail the requisites for a valid election protest.

Required Vote: Run-off Election

To have a valid election, a majority (50% + 1) of the qualified voters should vote.
But the winning vote is not majority of the voters, nor majority of the votes cast, but majority of the valid votes cast; in other words, the valid votes should be segregated from the invalid ones, and only the valid votes should decide the winner.
If not one of the unions gets the majority of the valid votes, then none of them wins.
But there may be a run-off election if the combined votes for the contending unions total at least 50% of the votes cast.

If this is so, the unions that received the two highest votes will face a rematch in the run-off.
The "No Union" choice is excluded in a run-off.

The run-off should be held in 10 days unless an election protest has been filed and needs to be resolved first.

A protest should be formalized before the med-arbiter within five days from the close of the proceedings; otherwise, the protest is deemed waived or abandoned. (Timbungco, 183 SCRA 140 [1990]; see the IRR. of Book V, Rule IX)

To summarize, the requisites for holding a run-off election are the:

There has been "enough" turn-out of voters, i.e., at least 50% plus one of the CBU actually voted; otherwise, there is a "failure of election" (see below).
There are at least two contending unions.
Not one of the unions obtained the majority of the valid votes.
The votes for the unions, added together, equal at least one-half of the total votes cast.
There is no pending challenge or objection to the election.

Only the unions that received the highest and the next highest votes shall join the run-off. The "no union" choice is out.
Example:

The collective bargaining unit has 100 members. 80 voted.
Union One received 40 votes; Union Two, 20; and No Union, 20. No invalid votes.
In this example, there is no winner, not even Union One because it failed to get at least 41 votes which is the majority (50% + 1) of the 8 valid votes.
But the desire of the employees to have a union is evident from the fac

If not one of the unions wins in the run-off, then the company remains ununionized for at least 12 months until an interested union again files a petition to hold a C.E. and gets the needed vote.
Union politics is spaces by the 12-month bar.

Re-run Different from Run-off Election

Run-off election should be differentiated from re-run election.
When a certification or a consent or a run-off election results in a tie between two choices, the election officer shall immediately notify the parties of a re-run election within five days from the certification, consent or run-off election.
The DOLE rules say that the re-run election shall be conducted within 10 days after the posting of notice. (D.O. No. 40-1-15)
The choice (or the candidate) receiving the highest votes cast during the re-run election shall be declared the winner and shall be certified accordingly.
Re-run election also is held in case of failure of election.

Failure of Election

A failure of election occurs when less than majority of the CBU members voted.
In that case, the Election Officer shall declare a failure of election in the minutes of the election proceedings.
After such declaration, a motion may be filed for the immediate holding of a re-run certification election or a consent election within six months from the date of declaration of failure of election.
Therefore, the 12-month bar does not apply where there has been a failure of election.
Within 24 hours from receipt of the motion, the Election officer shall immediately schedule the conduct of another certification or consent election within 15 days from receipt of the motion.
He shall post the notice of certification election in two most conspicuous places in the establishment at least 10 days prior to the election.
The same guidelines and list of voters used m the failed election shall be used in the re-run election.

Certifications Election Different from Union Election

Certification election (C.E.) should not be mistaken for a union election, and vice-versa.
A union election

Selects the officers of the union;
In a union election, the voters are only the members of that union;
A union election is held in accordance with the union's constitution and by-laws;

Certification election (C.E.) selects the particular union that will represent the bargaining unit in bargaining with the employer.

In C.E., the voters are all the employees belonging to the bargaining unit regardless of union membership.
A C.E. is held in accordance with the order of a Med-Arbiter upon petition of a proper party, usually a union. (See UST Faculty Union, November 16, 1999)

Art. 270. When an employer may file petition.

When requested to bargain collectively, an employer may petition the Bureau for an election. If there is no existing certified collective bargaining agreement in the unit, the Bureau shall, after hearing, order a certification election.

All certification cases shall be decided within twenty (20) working days.

The Bureau shall conduct a certification election within twenty (20) days in accordance with the rules and regulations prescribed by the Secretary of Labor.

Own Notes

When an employer may file petition to Bureau.

Employer can file a petition with the Bureau when requested to engage in collective bargaining.
If no certified collective bargaining agreement exists in the unit, after a hearing, the Bureau will order a certification election.
All certification cases must be resolved within 20 working days.
The Bureau must conduct the certification election within 20 days as per the Secretary of Labor's regulations.

Art. 271. Employer as Bystander.

In all cases, whether the petition for certification election is filed by an employer or a legitimate labor organization, the employer shall not be considered a party thereto with a concomitant right to oppose a petition for certification election. The employer's participation in such proceedings shall be limited to: (1) being notified or informed of petitions of such nature; and (2) submitting the list of employees during the pre-election conference should the Med-Arbiter act favorably on the petition.

Own Notes

Employer as Bystander.

whether the petition for certification election is filed by:

employer or
legitimate labor organization

employer shall not be considered a party thereto with a concomitant right to oppose a petition for certification election

Employer's participation in such proceedings shall be limited to:

being notified or informed of petitions of such nature; and
submitting the list of employees during the pre-election conference should the Med-Arbiter act favorably on the petition.

Note:

This Article dispels any doubt as to the standing of the employer in a petition for C.E.
He is merely a bystander.
Employer's participation in such proceedings shall be limited to:

being notified or informed of petitions of such nature; and
submitting the list of employees during the pre-election conference should the Med-Arbiter act favorably on the petition.

Art. 272. Appeal from certification election orders.

Any party to an election may appeal the order or results of the election as determined by the Med-Arbiter directly to the Secretary of Labor and Employment on the ground that the rules and regulations or parts thereof established by the Secretary of Labor and Employment for the conduct of the election have been violated. Such appeal shall be decided within fifteen (15) calendar days.

Own Notes

Appeal from certification election orders.

Any party to an election may appeal the order or results of the election
Determined by the Med-Arbiter directly to the Secretary of Labor and Employment
On the ground that the rules and regulations or parts thereof established by the Secretary of Labor and Employment for the conduct of the election have been violated.
Such appeal shall be decided within fifteen (15) calendar days.

Appeal

The order granting the conduct of a certification election in an unorganized establishment is not appealable.

Any issue arising from such order may be raised by means of protest on the conduct and results of the certification election. (D.O. No. 40-03, Rule VIII, Sec. 17)

The order granting the conduct of a certification election in an organized establishment and the decision dismissing or denying the petition, whether in an organized or unorganized establishment, may be appealed to the Office of the Secretary within 10 days from receipt thereof.

In short, any grant or denial of a petition for C.E. in a unionized employer is appealable. What is not appealable is an order to hold C.E. in an unorganized bargaining unit. The law wants the ununionized unionized.

Where no appeal is filed within the 10-day period, the Med-Arbiter shall enter the finality of the order/decision in the records of the case and transmit the records of the petition to the Regional Director.
Where there is appeal, a reply to the appeal may be filed by any party to the petition within 10 days from receipt of the memorandum of appeal.
The reply shall be filed directly with the Office of the Secretary.
The decision of the Secretary shall become final and executory after 10 days from receipt by the parties. Within 48 hours from notice o receipt decision by the parties and finality of the decision, the office of the Secretary shall remand the entire records to the Regional Office for implementation.
Implementation of the Secretary's decision shall proceed unless restrained by the appropriate court, i.e, the Court of Appeals. (D.O. No. 40-03, Rule VIII, Sec. 22)

Questions:

What is the procedure in collective bargaining?

The following is the procedure in collective bargaining:

Proposal

A party desiring to negotiate serves a written notice upon the other party with statement of its proposals.
The other party shall respond within 10 calendar days from receipt.

Conference

Either party may request for a conference if difference arises on notice and reply.
The conference shall begin within 10 calendar days from request.

Board Intervention

The Board shall intervene upon request or in its own initiative if disputes are not settled.

What is the meaning of duty to bargain collectively pursuant to the Labor Code? Is there any difference in the duties if a CBA exists or not? Explain.

The duty to bargain collectively is the mutual obligation of the employer and the bargaining agent to meet and convene on the terms and conditions of employment in good faith.
If there is a collective bargaining agreement, the parties are obliged to upheld and not to terminate nor modify the agreement during its lifetime.
However, if there is no collective bargaining agreement, the employer and the representative of the employees may still bargain in accordance with the provisions of the Labor Code.

Briefly explain the four ULP in bargaining identified by the author of your book with illustrative cases.

The four acts of Unfair Labor Practice are:

Failure or refusal to meet or convene

It is when an employer refuses to bargain with the representative of the employees.
Illustrative Case: An employer who does not recognize the existence of a union representing the employees for collective bargaining.

Evading mandatory subjects of bargaining

It is when an employer refuses to bargain on the labor standards and terms and conditions of employment which are mandatory.
Illustrative Case: An employer who refuses to hear the employees’ concern on working hours.

Bad faith in bargaining

It is when an employer lacks sincerity and intention in bargaining with the representative of the employees.
Illustrative Case: An employer who deliberately delays the schedule of bargaining to avoid such.

Gross violation of the Collective Bargaining Agreement

It is when an employer violates a provision in the Collective Bargaining Agreement.
Illustrative Case: An employer who fails to comply with the working hours specified in the Collective Bargaining Agreement

Briefly explain the following terms:

(a) Surface Bargaining

(b) Blue-Sky Bargaining

(c) Boulwarism

a. Surface bargaining is a type of bargaining where the parties negotiate but there are no legal intentions of reaching an agreement.
b. Blue Sky bargaining is a type of bargaining where there are exaggerated or unreasonable proposals by either party.
c. Boulwarism is giving a proposal which is not subject to bargaining, a take-it-or-leave-it offer. In a sense, there is no bargaining at all.

Explain the life cycle of a CBA from its juridical preconditions, procedure, ratification to renegotiation, including its effectivity, duration and retroactivity.

The terms of a Collective Bargaining Agreement shall be five years for representation aspect and not more than three years for all other provisions.
The Department of Labor shall not entertain a petition questioning the majority status of the bargaining agent as well as conduct a certification election until 60 days before the expiration of the Collective Bargaining Agreement, called the “freedom period.’
During the freedom period, the parties may renegotiate a Collective Bargaining Agreement. The Collective Bargaining Agreement must be ratified by the majority of all the workers in the bargaining unit.
If an agreement is entered within six months from the expiration of the Collective Bargaining Agreement, it shall retroact to the day immediately following such.
If an agreement is entered beyond six months from the expiration of the Collective Bargaining Agreement, the parties shall agree on the retroactivity.

What are the factors considered in determining the appropriateness of a collective bargaining unit?

There must be a community of interest in order to determine the appropriateness of a collective bargaining unit, the factors considered, among others, are:

Similarity of earnings
Similarity of benefits and conditions of employment
Similarity in the work performed
Similarity in qualifications and skills
Intention of the employees

What are the three methods to determine the bargaining unit? Explain each method

SEBA Certification

The Department of Labor and Employment requires proof from the applicant union such as the absence of an existing Collective Bargaining Agreement, sole union in the bargaining unit, and majority membership of employees.
The SEBA Certification is granted by the Department of Labor and Employment and the union becomes the exclusive bargaining representative or sole and exclusive bargaining agent.

Certification Election

It is an electoral process to determine the exclusive bargaining representative of the unit in accordance with the provisions of the Labor Code.
It may be conducted in an organized or unorganized company.

Consent Election

It is an election voluntarily agreed upon by the contending unions to determine which union should represent the union.
It may be conducted with or without intervention of the Department of Labor and Employment.

Briefly explain the eight grounds in which the Med Arbiter may disapprove a Petition for Certification Election.

The following are the grounds in which the Med Arbiter may disapprove a Petition for Certification Election:

Non-Appearance

It is when the petitioner failed to appear in two consecutive conferences despite notice.

Unregistered Union

It is when the petitioning union is not registered with Department of Labor and Employment or the certificate of registration was revoked.

Union without Charter

It is when the petitioning union failed to submit a charter certificate.

No Employer-Employee Relationship

It is when there is no employer-employee relationship between the supposed employer and the members of the petitioning union.

Election Bar (12 months)

It is when there was a valid certification election, consent election or run-off election held within 12 months prior to filing of the petition.

Deadlock

It is when there exists a collective bargaining deadlock.

Existing Collective Bargaining Agreement

It is when the petition was filed outside of the freedom period of an existing Collective Bargaining Agreement.

Lack of Support

It is when the petition as not supported by at least 25% of the bargaining unit.

Company X is a Pharmaceutical Company, composed of 400 regular rank and file employees, 50 probationary employees, 30 supervisory employees, and 20 managerial employees. Among the rank and file employees, a certification election was ordered conducted by the Med Arbiter.

Contending parties obtained the following votes

Union A — 80

Union B — 75

Union C — 45

Union D — 35

No Union — 1

Spoiled Votes — 4

Challenged Votes — 150

The challenged votes were those cast by members of a religious group who are not allowed to be members of the union, the votes cast by probationary employees and the votes cast by supervisory employees. Were the votes properly segregated? Explain.

~~Yes, the challenged votes were properly segregated.~~

~~For the employees who are members of a religious group who are not allowed to be members of the union, their votes must be segregated because of the prohibition in their religion.~~
~~For the probationary employees, their votes must be segregated because they are not yet considered regular employees until the completion of their probationary period.~~
~~For the supervisory employees, their votes must be segregated because they are not eligible to join the union of rank-and-file employees.~~

No, the challenged votes were not properly segregated.

Even probationary employees (who have already served for three months), and employees who are Iglesia ni Cristo (who will vote for non-union) members are entitled to vote in a C.E., if they are part of the bargaining unit.
However, for the supervisory employees, their votes must be segregated because they are not eligible to join the union of rank-and-file employees.

Assuming that there were no challenged votes, was there a valid election in the instant case? Explain.

Yes, because the total number of votes (390) constituted more than the majority (201) of all the employees.

Considering the challenged votes, was there a valid election in the instant case? Explain.

No, there was no valid election because the total number of votes (240 votes) did not constitute the majority of the eligible employees (480 votes).
In order for an election to be valid, majority (50% + 1) of the qualified voters in the bargaining unit should vote. Since managerial employees are not qualified to vote, they are excluded from the eligible employees. Also, since all the challenged votes are disregarded, the total votes are reduced to 240. The requirement of at least 241 votes is not satisfied.

Should Union A be declared as the exclusive bargaining representative? Explain.

No, Union A should not be declared the exclusive bargaining representative even if it received the highest votes (80).
To be declared the winner, a union must receive the majority of the valid votes cast, in this case, the majority of 236 votes if the challenged votes are not considered. The union must garner at least 119 votes to be declared as the exclusive bargaining representative.

Is a Run Off election proper in the instant case? Explain.

Yes, a run-off election is proper.
A run-off election is necessary if no union received the majority of the valid votes cast among three or more contending unions. A run-off election shall be conducted between the unions who received the two highest votes.
In this case, a run-off election should be conducted between Union A and Union B who garnered the highest and the next highest votes among the contending unions.

What is the equity of the incumbent?

What are the mandatory subjects of bargaining?

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Labor Law: Book V; Title VII Collective Bargaining and Administration of Agreement (Arts. 261 - 272)

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