Section A

1.Are there any exceptions to the non-retroactivity of union security clause regarding employees
who are not members of any labor organization?

a. Yes, the exception is when there exists a valid union security clause requiring
compulsory membership in the SEBA
b. Yes, the exception is when the stipulation in the security clause excludes the non-
members of the organization
c. Yes, the exception is to cover and bind the employees who are not included in the security
clause
d. No, there is no exception as to the application of the non-retroactivity of union security
clause

Rationale: The exception to non-retroactivity rule is when there exists a valid union
security clause requiring compulsory membership in the SEBA, in which case, an
employee who is not a member of any labor organization at the time of the effectivity of
the CBA may be compelled to join it and his refusal to so join will justify his dismissal.
(Page 720)

2. In the event of mergers or consolidating corporations, what union shop clause shall cover the
absorbed employees of the non-surviving corporation?
Under the Corporation Code, the surviving corporation has the legal obligation to assume all the
obligations and liabilities of the merged constituent corporation.
However, in the absence of any stipulation in the merger plan of the merging corporations:
a. a new CBA shall be entered upon covering all employees including the absorbed
employees;
b. the union shop clause of the CBA of the surviving corporation shall be amended;
c. the union shop clause in the CBA of the non-surviving corporation shall be consolidated
to that of the surviving corporation’s CBA; or
d. the CBA of the surviving corporation will apply to the absorbed employees of the
non-surviving corporation.

Rationale:
It is the policy of the state to assure the right of workers to "security of tenure". The
guarantee is an act of social justice. When a person has no property, his job may possibly
be his only possession or means of livelihood. Therefore, he should be protected against
any arbitrary deprivation of his job. Article 280 of the Labor Code has construed security
of tenure as meaning that "the employer shall not terminate the services of an employee
except for a just cause or when authorized by" the Code. (Rance v. NLRC, G.R. No. L-
68147 June 30, 1988)

In the case of BPI vs. BPI Employees Union-Davao (G.R. No. 164301, October 19, 2011),
the Supreme Court held that in the absence of stipulation in the Articles of Merger and
Merger Plan of the merging corporations, the absorbed employees are subject to the union
shop provision of the CBA of the surviving corporation. (Page 721)
3. The following are the requisites for termination based on union security clause except:

a) The union clause is applicable

b) The SEBA is requesting for the enforcement of such clause
c) There is sufficient evidence to support the SEBA’s decision to expel the employee from
membership.
d) The DOLE director is requesting for the enforcement of such clause.

Rationale: As enunciated in the case of Alabang Country Club vs NLRC the following are
the requisites that the employer should determine to prove and comply with prior to
terminating the employment of an employee by virtue of the employment of the union
security clause.

The union clause is applicable

The SEBA is requesting for the enforcement of such clause

There is sufficient evidence to support the SEBA’s decision to expel the employee
from membership.

These 3 requisites were again reiterated in Inguillo vs First Philippine Scales, Inc. Source
: page 722

4. Is the signing of an authorization letter to file a petition for certification election by another union
a sufficient ground to terminate the employment of a union member based on union security
clause?

A. YES, as this complies with the third requisite and was signed before the 60-day freedom period
which further cements their loyalty to the other union.
B. YES, because the signing of the authorization to file a certification election was already a
positive act to the filing of the petition for certification election for another union, which can already
be considered as disloyalty.
C. NO, if they filed the actual Petition for Certification Election within the freedom period,
since the signing of the authorization to file a CE was merely preparatory to the filing of
the petition.
D. NO, the mere signing of the authorization in support for Union Election before the freedom
period is not sufficient ground to terminate employment of respondents.

Rationale: In the 2010 case of Picop Resources vs Taneca, it was held that the mere
signing of the authorization to file a CE was merely preparatory to the filing of the petition
and is considered a valid exercise of respondents’ right to self-organization. It was clear
that while they signed such authorization letter outside the freedom period, it was clear
that the actual petition for CE was filed within the ambit of the freedom period. Strictly
speaking, what is prohibited is the filing of a petition for CE outside the 60-day freedom
period. Source: page 723
5. Which of the following statements is/are True?

I. To avoid the possibility of incurring liability for breaching the union security clause of the CBA
and to protect its own interests, the employer, upon receipt of demand from the union for the
dismissal of the employees whom it accused of committing acts of disloyalty , is to conduct its
own inquiry on the factual and legal bases of such demand.

II. Substantive due process must be observed as a means of ensuring that the security of tenure
of the employees is not infringed.

a. Only Statement I is True.

b. Only Statement II is True.

c. Both statements are True.

d. None of the statements are true.

Rationale: The employer must conduct its own inquiry on the factual and legal bases of
the demand by the union to dismiss an employee on the ground of acts of disloyalty. In
determining whether a valid cause exists for the termination of an employee, substantive
due process must be observed as a means of ensuring that the security of tenure of the
employees is not infringed. Page: 724

6. Can an employer, without the union’s recommendation, dismiss an employee who has been
expelled by the union?

A. Yes, on the ground of violation of the union security clause.

B. Yes, on the ground that the employee is no longer part of the union.
C. No, the employee’s expulsion from the union is not sufficient to justify the dismissal
of the expelled employee .
D. No, the employer has to report it to the Bureau of Labor Relations before dismissing the
expelled employee.

Rationale: An employee expelled by the union cannot be dismissed by the employer on

the ground of violation of the union security clause without the proper recommendation of
the union to that effect. The fact of union expulsion alone would not be a sufficient
justification for the employer to dismiss the expelled employee; the employer should wait
for the union recommendation before he could act thereon. Source: Page 725

7. The following statements are true, EXCEPT:

a. The law requires the employer to furnish the employee sought to be dismissed with two written
notices before termination of employment can be legally effected.

b. The use of the phrase "independent and separate hearing" in connection with the due process
required in termination grounded on violation of the union security clause means that the employer
is not duty-bound to immediately implement the recommendation to terminate made by the SEBA.
c. Even on the assumption that the federation had valid grounds to expel the union officers, due
process requires that these union officers be accorded a separate hearing by respondent
company.

d. The twin requirements of notice and hearing constitute the essential elements of
procedural due process. The procedure is voluntary and its absence does not taint the
dismissal with illegality.

Rationale: D - The twin requirements of notice and hearing constitute the essential
elements of procedural due process. The procedure is mandatory and its absence taints
the dismissal with illegality. Source: page 726

8. In the termination of employment of an employee due to violation of the union security clause,
the employer may approve the dismissal recommendation of the SEBA without affording due
process since there is no more need to afford procedural due process to the employee because
the same has already been given to and complied with by the SEBA prior to an employee’s
expulsion.

A. TRUE, It is the contention of the employer to avoid, on the part of the employee, from
further paying procedural due process for such has been complied with by the SEBA when
it afforded the employee due process prior to his dismissal recommendation.
B. TRUE. Under the union security clause, a violation of such automatically warrants
dismissal in both the union and employment.
C. FALSE. There is a distinction between due process afforded by the SEBA and that
of the employer. Due process required by the union concerns termination of his
membership with the union; while due process that must be complied with by the
employer pertains to termination of his employment with the employer. The
employee should be given the opportunity to be heard to make sure that the union
had not been acting arbitrarily or capriciously.
D. FALSE. It is required on the part of the employer to comply with such due process on his
part to guarantee that the employee spends for procedural due process which it will later
hand over to the SEBA as part of its negotiation or attorney’s fees.

Rationale: In Carino v. NLRC, the Supreme Court held that the company should have
given the petitioner an opportunity to explain his side of the story with the union.
Notwithstanding the union security clause, the company should have reasonably satisfied
itself by its own inquiry that the union had not been merely acting arbitrarily or capriciously
in impeaching and expelling the petitioner. Had the company taken the trouble to
investigate the acts and proceedings of the union, it could have easily determined that the
union had acted arbitrarily. Source: page 727
9. As shown in the case of Rance v. NLRC (G.R. No. 68147, Jun. 30, 1998), the Court held that
the following are evidence of unfair labor practice, except:

A. Absence of an impartial tribunal or body vested with authority to conduct

disciplinary proceedings
B. The furnishing of notice of charge and timely notice of hearing to the
concerned union members
C. Dismissal of union members for disloyalty based on the union security clause of
the CBA
D. Commanding concerned union members to write the answers to questions as
dictated to them by the union and company representatives

Rationale:

As held by the Court in the same case, employees are entitled to due process before they
may be expelled from the union on charge of disloyalty. The scandalous haste with which
respondent corporation dismissed 125 employees lent credence to the claim that there
was connivance between respondent corporation and respondent union. It is evident that
private respondents were in bad faith in dismissing petitioners. They are guilty of unfair
labor practice. Source: Pp. 728

10. What is the legal status of a dismissal based on a union security clause if it was made on
good faith?

a. The dismissal of union members occasioned by the demand of the management pursuant to
their constitution and by-laws and in reference to the union security clause, where said union
members had been expelled by the management for organizing a rival union, is legal and not an
Unfair Labor Practice (ULP)

b. The dismissal of union members occasioned by the demand of the SEBA pursuant to a union
security clause, where said union members had been expelled by the SEBA for organizing a
friendly union, is illegal and an Unfair Labor Practice. (ULP)

c. The dismissal of union members occasioned by the demand of the management pursuant to
their constitution and by-laws and in reference to the union security clause, where said union
members had been expelled by the management for organizing a friendly union, is illegal and
Unfair Labor Practice (ULP)

d. The dismissal of union members occasioned by the demand of the SEBA pursuant to a
union security clause, where said union members had been expelled by the SEBA for
organizing a rival union, is legal and not an Unfair Labor Practice (ULP).

Rationale: The dismissal of union members occasioned by the demand of the SEBA
pursuant to a union security clause, where said union members had been expelled by the
SEBA for organizing a rival union, is legal and not an Unfair Labor Practice (ULP). The
case of Malayang Samahan ng Manggagawa sa M. Greenfield v. Ramos held the rule that
the dismissal of an employee by the company pursuant to a labor union's demand in
accordance with a union security agreement does not constitute ULP. An employer is not
 considered guilty of ULP if it merely complied in good faith, with the request of the SEBA
for the dismissal of its members whom it expelled pursuant to the union security clause of
the CBA. Source: Page 729

11. Which of the following is inconsistent with the rule on liability for reinstatement, backwages
and damages in case dismissal due to violation of union security clause is declared illegal?

a. The latest rule is that good faith will not exonerate the employer and the SEBA from liability
for reinstatement, backwages and damages, in case the dismissal based on violation of
the union security clause is declared illegal.
b. In the case of National Labor Union v. Zip Venetian Blind, the latest rule affirmed by
the Supreme Court is the disallowance of backwages or “financial assistance”
where the employer acted in good faith in dismissing the employees on the basis
of a closed-shop agreement, even if the dismissal was held illegal.
c. An employee who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his actual reinstatement.
d. All of the above.

Rationale: The latest rule is that good faith will not exonerate the employer and the SEBA
from liability for reinstatement, backwages and damages, in case the dismissal based on
violation of the union security clause is declared illegal. The case of National Labor Union
v. Zip Venetian Blind is inconsistent with Article 294 [279] of the Labor Code, as amended
by R.A. No. 6715 which states that “An employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other privileges and
to his full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the time
of his actual reinstatement.” Source: Page 730

12. What is the nature of the liability of the employer and the union for reinstatement, backwages,
damages and other monetary claims in cases of illegal dismissal arising from purported violation
of the union security clause?

a) joint and several

b) joint or several
c) jointly
d) severally

RATIONALE: To illustrate, both the respondent employer and respondent union were
adjudged guilty of ULP in the case of Rizal Labor Union v. Rizal Cement Co. (GR NO. L-
19779, July 30, 1966), when the union requested the dismissal of 15 employees and the
employer acceded by effecting the dismissal on the ground that the said employees
formed another union. The union security clause in the CBA, however, merely provided
for a limited closed shop which did not justify the dismissal. Consequently, respondent
 company and union were ordered to reinstate petitioners, and pay jointly and severally,
their backwages from the date of their dismissal until they were reinstated. Page: 731

13. Is there an instance where the employer is held liable only for reinstatement while the union
is held solely liable for backwages?

a. Yes, an employer can be held liable only for reinstatement but not for backwages.

b. No, the employer and the union are solidarily liable for both reinstatement and backwages.

c. No, the employer must be liable for both reinstatement and backwages.

d. No, the union cannot be held liable for reinstatement and backwages.

Rationale: In the cases: Salunga v. CIR, Guijarno v. CIR, and Manila Mandarin
Employees Union v. NLRC, the employer was held liable only for reinstatement but not for
backwages because it was the union which was held solely liable for the payment of
backwages. Page: 732

14. The following instances are dismissals for violation of union security clause where BOTH the
employer and the SEBA were declared guilty of ULP, except one.

a. Where the union requested the dismissal of the workers who instigated the disaffiliation of the
local union from the federation.

b. Where the union requested the dismissal of 15 employees and management acceded by
effecting the dismissal on the ground that the said employees formed another union, it appearing
that the union security clause in the CBA merely provided for a limited closed shop which did not
justify the dismissal.

c. Where the union expelled, demanded, and caused the dismissal of a union member
based on the union security clause in the CBA.

d. Where the dismissal is due to the act of some union members seeking help from another
federation cannot constitute disloyalty contemplated in the CBA.

RATIONALE: In the case of Manila Mandarin Employees Union vs NLRC, the union was
held ALONE guilty of ULP when it expelled, demanded, and caused the dismissal of a
union member based on the union security clause in the CBA. Union Security Clauses are
governed by law and by principles of justice, fair play, and legality. They cannot be used
by union officials against an employer, much less their own members, EXCEPT with a
high sense of responsibility, fairness, prudence, and judiciousness. A union member may
not be expelled from her union and consequently from her job for personal or impetuous
reasons or for causes foreign to the closed shop agreement and in a manner characterized
by arbitrariness and whimsicality. Source: Page 733
15. If an employee is terminated pursuant to a union security clause is ordered reinstated, on the
basis of the finding that his dismissal was illegal, who shall reinstate the employee?

A. DOLE
B. BLR
C. The employer
D. Regional Trial court

Rationale: In cases where the employee was terminated pursuant to a union security
clause is ordered reinstated, on the basis of the finding that his dismissal was illegal, there
is no doubt that such obligation to reinstate devolves only upon the employer, this despite
the fact that the liability for reinstatement may have been made solidary for both the
employer and the union. Source: Page 734

16. There are cases where employer’s liability can be limited to reinstatement only and the union
held solely liable for payment and monetary awards; there are also cases where the employer
can be held liable for all the claims alongside with the union.

The abovementioned statements were illustrative of:

a. Application of Check-off agency fee

b. Effect of Union Security clause

c. Application of free and harmless stipulation in the union security clause

d. None of the above

Rationale: It is a common feature in union security clauses to provide that the union shall
hold employers “free and harmless” from any monetary claims or damages that may arise
in the declaration of illegality of termination. However, the juridical dicta on this point vary
from case to case and depends on the facts and circumstances in each case. Source: 735

17. Which of the following is not true regarding Free and Harmless Clause?

a. Free and Harmless Clause in the CBA is a guarantee that it will be considered by the
Court in its resolution of issues related to the illegality of termination.

b. The employer may be held solidarily liable for all the claims alongside the guilty union officers
but not the union itself.

c. The Court may determine the appropriate relief without regard of the Free and Harmless
Clause.

d. None of the above

 Rationale: The fact that there is a Free and Harmless Clause in the CBA is not a guarantee
that it will be considered by the Court in its resolution of issues related to the illegality of
the termination of employment due to violation of the union security clause. The Court may
determine the appropriate relief without regard of this clause. Source: 736

18. The following are true regarding the right of reimbursement by employer from union:

I. The employer has a right to be reimbursed for payment of any claims arising out of dismissals
demanded by the union under the union security clause.

II. Jurisdiction over money claims arising from the interpretation or implementation of the CBA
and those arising from the interpretation or enforcement of company personnel policies is vested
with the Labor Arbiter.

III. In cases where an employee has been illegally dismissed, upon recommendation of the union,
the right of reimbursement by employer may be granted by judicial decree or by express provision
in the CBA to that effect.

a. I and II only

b. II and III only

c. I and III only

d. II only

Rationale: In reconciling the grants of jurisdiction vested under Articles 274 [261] and 224
[217] of the Labor Code, the Court has pronounced that the original and exclusive
jurisdiction of the Labor Arbiter under Article 224 for money claims is limited only to those
arising from statutes or contracts other than a Collective Bargaining Agreement. The
Voluntary Arbitrator or Panel of Voluntary Arbitrators will have original and exclusive
jurisdiction over money claims 'arising from the interpretation or implementation of the
Collective Bargaining Agreement and, those arising from the interpretation or enforcement
of company personnel policies', under Article 274. (Del Monte Philippines, Inc. vs.
Saldivar)

Source: Page 737

19. The bargaining agent which successfully negotiated the CBA with the employer is given the
right to collect a reasonable fee from its non-members in case they accept the benefits under the
CBA. What do you call this ‘reasonable fee’?

A. Transaction Fee
B. Agency Fee
C. Bargaining Fee
D. CBA Benefit Fee

Rationale: The SEBA is given the right to collect a reasonable fee, called “agency fee” in
case the non-SEBA members accept the benefits under the CBA. It is called “agency fee”
 because by availing of the benefits of the CBA, they, in effect, recognize and accept the
SEBA as their “agent” as well when it negotiated and concluded the CBA with the
employer. In other jurisdictions, it is also known as “fair share fee”. Source: Page 738

20. “Benefits” may also refer to non-economic or political benefits such as availment of the
grievance machinery, voluntary arbitration, and the like. The following are the ratiocinations cited
by law, EXCEPT:

a. Fair representation of all members of the CBU

b. Public relation activities
c. Non- waiver of right of individual employee or group of employees
d. Payment of agency fee converts non-SEBA members into quasi-SEBA members

Rationale: The law does not explain nor expound the meaning of the term “CBA Benefits.
The decision in Del Pilar Academy, clearly shows that the term “benefits” does not only
refer to salary increases but also to others that are, however, definitely purely economic
in nature. It is opined, however, that “benefits” may also refer to non-economic or political
benefits such as the availment of grievance machinery, voluntary arbitration, and the like.
The following ratiocinations may be cited: Fair representation of all members of the CBU,
Non- waiver of right of individual employee or group of employees, and Payment of agency
fee converts non-SEBA members into quasi-SEBA members. Source: Page 739

21. All of the following statements are true, EXCEPT:

a. There is no law that compels a non-SEBA member, who is part of the CBU being represented
by the SEBA, to accept the benefits provided in the CBA.

b. The SEBA cannot capriciously fix the amount of agency fee it can collect from its non-members.

c. The payment of agency fees to the SEBA is a requirement recognized by law, it is not, however,
contractual but simply quasi-contractual in nature.

d. None of the choices.

Rationale: (a) A non-SEBA member has the freedom to choose between accepting and
rejecting the entire CBA itself or any of the benefits flowing therefrom. (b) Article 259(e)
[248(e)] expressly lays down the limitation in that the agency fee should be reasonable in
amount and equivalent to the dues and other fees paid by members of the SEBA. Thus,
any agency fee collected in excess of this limitation is a nullity. (c) It could not be
contractual because the non-SEBA members have no contractual relationship with the
SEBA. Source: Page 740
22. The following cost and expenses incurred by the SEBA may not be imposed as part of the
agency fee it collects from non-SEBA members, except:

a. public relations activities

b. litigation unrelated to collective bargaining
c. contract administration
d. ideological activities

Rationale: The following constitute the best examples of cost and expenses incurred by
the SEBA which may not be imposed as part of the agency fee it collects from non-SEBA
members, to wit: 1) political activities (including activities related to ballot and bond issues;
2) ideological activities; 3) public relations activities; 4) litigation unrelated to collective
bargaining; 5) engaging in illegal strikes; 6) union "members only" benefits; 7) portion of
the union publications reporting on the foregoing activities. Source: Page 741

23. The following statements are true except one. Which one is not true?

a. The act of paying the agency fees automatically makes them a member of the SEBA.

b. The SEBA cannot discipline or hold the non-members liable for certain acts which are related
to membership with the SEBA.

c. Non-members cannot participate in SEBA elections or meetings.

d. Employees are not required to become members of the SEBA despite the acceptance of the
benefits flowing from the CBA.

Rationale: The act of paying the agency fees does not make them members of the SEBA
since it is not required for employees to become members of the SEBA. Therefore, they
cannot participate in the SEBA elections as well as other "internal" union activities of the
SEBA. Pg. 742

24. The following are true regarding the union dues and agency fees except:

a. Union dues are required to be paid by the members of the SEBA

b. Union dues are likewise required to be paid by non-SEBA members to the SEBA.
c. Non-SEBA members can be required to pay agency fees to SEBA by reason of their
acceptance of the CBA and its benefits.

Rationale: Non-SEBA members cannot be compelled to pay such union dues to the
SEBA, since they are not part thereof. However, they can be required to pay agency fees
to it by reason of their acceptance of the CBA and its benefits. Page: 743
25. In cases of open shop is there a distinction between SEBA members refusal to pay union
dues and for Non-SEBA members refusing to pay agency fees?

A. Yes, because if the SEBA members will refuse they can still claim their benefits under the
CBA while the NON-SEBA members cannot claim benefits even if they agreed to a CBA.
B. Yes, because if NON-SEBA members will refuse to pay the agency fees, they can still
claim their benefits under the CBA while SEBA members cannot claim their benefits for
refusing to pay union dues.
C. No, there are no distinctions if the SEBA members refuse to pay their union dues as well
as the non-SEBA members for refusing to pay agencies because the refusing employee
will just be sanctioned for refusing to pay.
D. No, there are no distinctions if SEBA members refuse to pay their union dues and
Non-SEBA members by refusing to pay their agency fees.

Rationale: In cases where the prevailing arrangement is "open shop", there is no

distinction between the refusal of a SEBA member to pay union dues, on the one hand,
and refusal of a non-SEBA member to pay agency fees, on the other hand. This is because
under this arrangement, there is no legal compulsion on the part of the employee to pay
union dues or agency fees, as the case may be. No sanction is imposed upon the refusing
employee, irrespective of his membership or non-membership with the SEBA.

PAGE 744
Section B Week 3 MCQs

Page 745

Question:

It is an election process intended to achieve only one purpose and effect, that is, to get rid of the
"union security clause" in the CBA which imposes "forced membership" in the SEBA as a
condition of continued employment.

a. Union busting

b. Deauthorization

c. Secret ballot

d. Ranked voting

Rationale: "Deauthorization" is an election process intended to achieve only one

purpose and effect, that is, to get rid of the "union security clause" in the CBA which
imposes "forced membership" in the SEBA as a condition of continued employment. It
ensures that the employees are no longer forced to pay union dues or agency fees or
similar impositions. The process is called a "deauthorization election" because
employees "deauthorize" the forced unionism clause and remove it from the CBA.

Page 746

Question:

Which of the following statements is not correct?

a. The net effect should at least a majority or more of the employees vote to deauthorize
the union security clause would be the nullification and deletion of this clause from the
CBA.

b. Relative to letter (a), the bargaining unit, therefore, becomes an "open shop" or
"merit shop". Under this arrangement, there is a SEBA but the employees are
required to join or financially support it by requiring the payment of union dues to
it as a condition for their hiring or continued employment.

c. It is Unfair Labor Practice (ULP) for an employer to dismiss, discharge, or otherwise

prejudice or discriminate against an employee for having given or being about to give
testimony under the Labor Code.

d. The phrase "having given or being about to give testimony under the Labor Code"
should not be confined merely to the act of the employee in actually testifying or offering
his testimony in a labor case, whether as a party-in-interest therein or as a witness for
himself, for a co-employee, for a union, for the government or for a third party.
 Rationale: Even after a successful deauthorization, every employee remains fully covered
by the CBA, whether or not he or she remains a union member or pays any dues. The
employees cannot, be compelled to pay any dues or fees to the SEBA. Employees
are not required to join or financially support the SEBA by requiring the payment of union
dues as a condition for their hiring or continued employment. The CBA continues to be in
force and effect, with the sole exception of the deauthorized "union security clause". The
remainder of the CBA, including its provisions on wages and benefits, remains in effect
and the SEBA continues to serve as such in that capacity, whether or not the employees
pay any dues or fees to it.

Page 747

Question:

Which is an example of Unfair Labor Practice (ULP) over filing of charges or giving of testimony

a. X was fired after testifying against one of the Company’s manager over a co-worker’s
allegation of sexual abuse
b. Y had his brother fired when he testified against the company of B over an environment
case.
c. Both
d. Neither

Rationale:

1. Unfair Labor Practice (ULP) over giving or about to give testimony under the Labor
Code is not confined over labor cases, what is important to consider is the sanction
imposed by the employee that constitute ULP

2. Section 4 (a) (5) of Republic Act No. 875 should be construed in line with the spirit
and purpose of said legislation of which to assure absolute freedom of the employees
and laborers to establish labor organizations and unions, as well as to prefer charges
before the proper organs of the Government for violation of our labor laws. If the
dismissal of an employee due to the filing by him of said charges would be and is an
undue restraint upon said freedom, the dismissal of his brother owing to the non-
withdrawal of the charges of the former, would be and constitute as much a restraint
upon the same freedom. (PHILIPPINE AMERICAN CIGAR & CIGARETTE FACTORY
WORKERS INDEPENDENT UNION (NLU) vs. PHILIPPINE AMERICAN CIGAR &
CIGARETTE MANUFACTURING CO., INC., G.R. No. L-18364 February 28, 1963)

Page 748

Question:

The following are the three Collective Bargaining Agreement-related Unfair Labor Practices,
EXCEPT:

a. To violate the duty to bargain collectively as prescribed in the Labor Code.

 b. To pay negotiation on attorney's fees to the union or its officers or agents as part of the
settlement of any issue in collective bargaining or any other dispute.

c. To violate a Collective Bargaining Agreement.

d. To restrain or coerce employees in the exercise of their right to self-organization.

Rationale: To restrain or coerce employees in the exercise of their right to self -

organization constitutes Unfair Labor Practice of a labor organization under Article 260.
Whereas, the three Collective Bargaining Agreement-related Unfair Labor Practices are
enunciated under Article 259.

Page 749

Which is not considered a violation of the duty to bargain collectively?

a. Failure of the employer to submit its counter-proposals to the demands of

the SEBA.

b. Refusal of the employer to send a counter-proposal to the SEBA and to bargain

anew on the economic terms of the CBA despite several letters received from the
union.

c. Lack of sincere desire of the employer to negotiate CBA, failing to make a timely
reply to the SEBA more than a month after the same was submitted to it.

d. Refusal of the employer to submit counter-proposals on basis that the union

ceased to be the exclusive bargaining agent by reason of the disaffiliation of the
majority of its members.

Rationale: The failure of the employer to submit its counter-proposals tot eh demands of
the SEBA does not, in itself, constitute refusal to bargain as would amount to ULP.
However, it is different if the employer refuses to submit an answer or reply to the written
bargaining proposals of the SEBA, which in the case, unfair labor practice is committed.

Page 750

Question:

It is considered a failure and refusal to bargain in good faith if an employer without first negotiating
with:

a. the DOLE, unilaterally makes changes in wages, hours of work and other terms
and conditions of work that are not the subject of the on-going CBA negotiation.

b. the union, unilaterally makes changes in wages that is subject of DOLE

negotiation.
 c. the union, unilaterally makes changes in wages, hours of work and other
terms and conditions of work that are the subject of the on-going CBA
negotiation.

d. the union, unilaterally makes changes in wages, hours of work and other terms
and conditions of work that are not the subject of the on-going CBA negotiation.

Rationale: Unilateral changes in wages and terms and conditions of employment in the
course of the CBA negotiations are not allowed. But, the situation is different once the
employer has given the SEBA the opportunity to negotiate over a set of proposals and
there has been a deadlock, in which case, the employer has the liberty to unilaterally
implement its proposals. The law certainly does not intend to impose an embargo upon
the employer from introducing improvements in its employees’ benefits until the CBA is
concluded with the SEBA.

Page 751

Question:

What is not considered as interference in the choice of union bargaining panel?

a. An employer coerces the union to exclude a representative of the union from its
panel of negotiators.
b. An employer who interferes in the selection of a representative of the union as a
negotiator.
c. An Employer who excludes a federation president from the negotiating panel.
d. An Employer who still bargained with the Union even if there is perceived
or actual conflicts between their representatives.

Rationale: The employer and the SEBA have the freedom and right to designate whomever they
respectively choose and designate to represent them at the bargaining table.

Page 752

Question:

It bears noting that the goal of the DOLE is geared towards ”a single - _________ unit
which is more to the broader and greater benefit of the _________ force.
a. employer - wide, employees working
b. employer - centered, employees work
c. employees - employer’s
d. employee centered - employer’s work

Rationale: The philosophy is to avoid fragmentation of the bargaining unit so as to strengthen

the employees’ bargaining power with the management,. To veer away from such goal would be
contrary, inimical and repugnant to the objectives of a strong and dynamic unionism.
Page 753

Question:

Which of the following is considered Unfair Labor Practice (ULP):

a. During a strike, a company through its president sends a letter to the individual strikers
containing promises of benefits and at the same time threats of replacements as
conditions for their return to work.
b. A company, exercising their right to free speech under the Constitution, negotiates with
the individual members of the union who are on strike.
c. Both are ULP
d. Neither

Rationale: To negotiate or attempt to negotiate with individual workers rather than with the SEBA
is Unfair Labor Practice (ULP). Even in the event that a union is on strike, the employer is still
under obligation to bargain with the union as the employee's bargaining representative. Also, free
speech protection under the Constitution is inapplicable where the expression of opinion by the
employer or his agent contains a promise of benefit or threat or reprisal.

Page 754

Question:

It is a form of ULP that may only be committed by the employer. Defined as “going through
the motions of negotiating” without any legal intent to reach an agreement, it involves the question
of whether an employer’s conduct demonstrates an unwillingness to bargain in good faith or is
merely hard bargaining.

a. Blue-sky bargaining
b. Surface bargaining
c. Boulwarism
d. All of the above
e. None of the above

Rationale:

According to the case of Standard Chartered Bank Employees Union v. Confesor,

“Surface bargaining” involves the question of whether an employer’s conduct demonstrates an
unwillingness to bargain in good faith or is merely hard bargaining. There can be no surface
bargaining, absent any evidence that the management had done acts, bot at and away from the
bargaining table, which tend to show that it did not want to reach an agreement with the union or
to settle the differences between it and the union.

“Blue-sky bargaining” means making exaggerated or unreasonable proposals. This

is a kind of ULP which can only be committed by a SEBA.
Boulwarism is a negotiation tactic named after the former vice president of General Electric,
Lemuel Boulware, who pioneered this strategy. It is a labor law principle in which management
opens the negotiation with a generous offer that is not meant to be negotiated. In other words, it
is an offer which is ultimate and to which no further revisions will be made. This "take it or leave
it” offer or counter-offer does not constitute proper collective bargaining not only within the
contemplation of United States laws but also under Philippine law. It is considered ULP as
essentially, no labor negotiation has taken place.

Page 755

Which of the following is NOT considered as Unfair Labor Practice in payment of

Negotiation fees or attorney's fees;

a. Fees must be collected from the employees individually.

b. Union asking or accepting payment from the employer as part of the settlement of any
issue in collective bargaining or any other dispute.
c. Attorney's fees, Negotiation fees or similar charges shall be paid from the Union
Funds.
d. Employer paying fees to SEBA, its officers, or agent as part of settlement of any issue.

Rationale: Article 259 (h) of the Labor Code considers as ULP, the act of employer in paying
negotiation fees or attorney's fees to the SEBA or its officers or agents as part of the settlement
of any issue in collective bargaining or any other dispute.

Under Article 260 (e) of the Labor Code, on the part of the Union, asking for or accepting
attorney's fees or negotiation fees from the employer as part of the settlement of any issue in
collective bargaining or any other dispute is considered ULP.

Article 228 (b) requires that such attorney's fees, negotiation fees or similar charges
should be paid from the union funds.

Page 756

Question:

Which of the following statements are not considered Unfair Labor Practice?

a. The act of the employer in refusing to comply with the terms and conditions of a CBA.
b. Refusal for a considerable number of years to give salary adjustments according to the
improved salary scales in the CBA.
c. The act of permitting non-union members to participate in the service charges, contrary
to the stipulation in the CBA.
d. Reduction of working hours.
Rationale: Reduction of working hours cannot be considered a violation of the CBA absent any
clear and specific prohibition thereon. The court held in the case Special Events & Central
Shipping Office Workers Union vs San Miguel Corporation that reduction of working days of the
individual complainants is not violative of Article IV of the disputants' collective agreement
because the "practice" adverted to therein refers not to the number of working days per week but
to the "assignment of work" in relation to "working hours" and "work schedules."

Thus, the decisive rule is that:

1. If the stipulation of any contract should admit of several meanings, it should be understood
that as bearing that import which is most adequate to render it effectual. (Art. 1372, NCC)

2. The interpretation of obscure records or stipulations in a contract shall not favor the party
who caused the obscurity (Art. 1377, NCC)

A collective bargaining agreement is entered into by a union with the sole purpose of improving
the working terms and conditions of employment.

Page 757

Question:

Is mere membership in the governing body of a corporation sufficient to make a person

criminally liable for corporate acts?

a. No, because of the personal character of criminal liability, mere membership in

the governing body of a corporation is not sufficient to make a person criminally
liable for corporate acts.

b. Yes, because being a member of the governing body of a corporation means

participation in corporate acts.

c. No, because of the conditional character of criminal liability, mere membership is not
sufficient to make a person criminally liable for corporate acts.

d. Yes, because being a member means you consent to the acts of the governing body
of the corporation.

Rationale: It bears stressing that because of the personal character of criminal liability, mere
membership in the governing body of a corporation does not suffice to make a person criminally
liable for corporate acts. This was underscored in the case of Manila Electric Company vs. Atilano,
where the court ruled that only corporate officers shown to have participated in the alleged
anomalous acts may be held criminally liable.

Moreover, as provided for in the last paragraph of Article 259 [248], only officers and agents of
corporations, associations, or partnerships who have actually participated in, authorizes, or
ratified unfair labor practices shall be held liable. Absent any such participation, authorization, or
ratification, the officers and agents of said entities cannot be held personally liable for ULP.

Page 758

Question:

Statement I: Article 260[249] of the Labor Code sets forth the six categories of behavior for which
a labor organization may be charged for unfair labor practice.

Statement II: Labor organizations, its officers, agents or representatives who have actually
participated in, authorized or ratified unfair labor practices shall be administratively liable.

a. Both statements are true

b. Both statements are false

c. Only Statement II is true

d. None of the above

Rationale: The first statement is true. Article 260[249] of the Labor Code enumerated six major
categories of behavior for which a labor organization may be charged for unfair labor practice.
The second statement is false since labor organizations, its officers, agents or representatives
who have actually participated in, authorized or ratified unfair labor practices shall be criminally
liable. This is so because ULP is not only a violation of the civil rights of both labor and
management, but also a criminal offense against the State. Criminal ULP cases may be filed with
the regular courts but no criminal prosecution may be filed without a final judgment from the NLRC
that an unfair labor practice was committed.

Page: 759

Question:

Of the six categories of ULPs provided under Article 260 [249], the following are the only
categories which can be committed by a certified SEBA and not merely by ordinary unions,
EXCEPT:

a. To violate the duty, or refuse to bargain collectively with the employer, provided it is the
representative of the employees;
b. To violate a collective bargaining agreement;
c. To restrain or coerce employees in the exercise of their right to self-organization.
d. To ask for or accept negotiation or attorney's fees from employers as part of the settlement
of any issue in collective bargaining or any other dispute.

Rationale: Of the six categories of ULPs provided under Article 260[249], it is only those
mentioned in paragraphs (c), (e) and (f) of this article that can be committed by a certified SEBA
and not merely by any ordinary union:
(c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the
representative of the employees;

(e) To ask for or accept negotiation or attorney's fees from employers as part of the settlement of
any issue in collective bargaining or any other dispute.

(g) To violate a collective bargaining agreement;

All the rest of the ULPs in this article can be committed by unions, irrespective of whether it is a
SEBA or a non-SEBA.

Page 760

Question:

A union cannot employees who disagree with its policies or violate its rules as would
amount to restraint or coercion of their organizational rights.

a. punish

b. question

c. expel

d. suspend

Rationale: It is ULP for union to restrain or coerce any employee in the exercise oh his
organization rights. He may or may not join a union. He cannot be coerced into joining a union
nor be strained from joining one. Once a member of the union, he cannot be punished purely on
the basis of his act of disagreeing with certain policies of the union against which he feels strongly.

Page 761

Question:

Which of the following actions is not covered by the Union Member’s twin freedoms of assembly
and of expression?

a. The freedom to meet outside the regular meetings of the union and discuss union affairs
without fear of reprisals from union officials.
b. The freedom to express their opinions at union meetings without any threat being
punished.
c. The freedom to support a rival union without fear of reprisals from union officials.
d. The freedom to express their arguments at union gatherings without any threat of being
sanctioned for speaking their minds.

Rationale: “Union members should have the twin freedoms of assembly and of expression.
Freedom of assembly means the freedom to meet outside of the regular meetings of the union
and discuss its affairs without fear of reprisals from union officials. And, freedom of expression is
the freedom to express their opinions, views and arguments at union meetings or gatherings
without any threat of being sanctioned or punished for speaking their minds. But this freedom of
assembly and of expression does not include acts deleterious or inimical to the core interest of
the union.”

Page 762

Question:

Mr. X was a former union member of ABC Employees Union, a legitimate labor organization and
the sole and exclusive bargaining agent of the rank-and-file employees of ABC Company. Under
the constitution and by-laws of the said union, before a complaint may be brought against the
officers of the union, all the remedies available within the organization must be first availed of. Mr.
X was expelled from his membership with the said union for failure to follow the internal rules
prescribed in the constitution and by-laws. Instead of availing the remedies for reinstatement
available, Mr. X filed a complaint with the Court. Which of the following statements is true?

a. The complaint of Mr. X against the union will prosper because the same was filed with the
proper court and was filed on time.
b. The complaint will not prosper because Mr. X should have first exhausted all the
remedies available in the constitution and by-laws for the reinstatement of his
membership.
c. The complaint will prosper because Mr. X right to self-organization is guaranteed in the
1987 Philippine Constitution.
d. None of the statements is true.

Rationale: In the case of Baptista vs. Villanueva [GR No. 194709, July 31, 2013], the Supreme
Court upheld that validity of petitioners' expulsion and the dismissal of their ULP accusation
because they failed to comply with the express mandate of RPNEU's constitution and by-laws
that before a party is allowed to seek the intervention of the pre-condition that he should have
availed of all the internal remedies within the organization.

A labor organization is granted the right to prescribe its own rules with respect the acquisition or
retention of membership. Although not expressly mentioned in the law, it is equally the right of the
union to prescribe in the same rules with respect to the loss of membership therein through
various modes allowed by law, such as resignation, expulsion or impeachment.

Page 763

Question:

Under Article 260(b) [249(b)], it is considered ULP for a _______________ ______________, its
officers, agents or representatives, to cause or attempt to cause an employer to discriminate
against an employee.

a. Employer Corporation
b. SEBA
 c. Labor Department
d. Labor Organization

Rationale: ULP is not only committed by the employer. It is also committed by the labor
organizations. It is perpetrated by instigating or inducing the employer to commit discrimination
against an employee who may or may not be its members; and by the labor organizations
discrimination to the employee himself.

Page 764

Question:

All of the following are forms of discrimination by a union, except:

a. Causing or attempting an employer to discriminate against an employee, whether

he or she is a member of the union.

b. Denying membership to the union.

c. Terminating on any ground other than the usual terms and conditions under which
membership or continuation of membership is made available to the others.

d. Causing an employer to discharge employees who fail to join or maintain

membership in good standing in the union as condition for continued employment
as provided for in the union security clause in the CBA.

Rationale: Union security clause in the CBA is not discriminatory. This is an exception to the
general rule that unions may not cause or attempt to cause an employer to discriminate against
(or in favor of) employees on union-related grounds.

Page 765

Question:

Which of the following are requisites before a union may be held liable for ULP?

I. The union is a duly certified SEBA.

II. It violates the duty to bargain collectively.

III. It refuses to bargain collectively with the employer.

a. I and II

b. I and III

c. II and III

d. I, II and III
Rationale: The following are requisites before a union may be held liable for ULP: the union is a
duly certified SEBA; and it commits any of the following: it violates the duty to bargain collectively
or it refuses to bargain collectively with the employer.

Page 766

Question:

As a duly certified SEBA, a union has the duty to and responsibility to represent all
employees in the collective bargaining unit (CBA) equally and fairly, irrespective of whether they
are its members or not. This principle is the so-called:

a. conduct of equal opportunity

b. duty of fair representation
c. absolute privilege
d. doctrine of impartiality

Rationale: A union owes a duty of fair representation to all of the workers it represents. This duty
requires that the union act fairly, impartially, and without ill will or discrimination when pursuing a
worker's grievance or when negotiating a new contract with the employer.

Page 767

Question:

In relation to the requisites of featherbedding, this is a legal term which pertains to an excessive
or harsh demand of a reward or fee for an official service performed in the normal course of duty.
It is taking more fee or pay for the services than what the law allows, under color of one's official
authority.

a. Extortion
b. Exaction
c. Coercion
d. Intimidation

Rationale: Worthy to note is that, exaction is a form of extortion, however, in extortion the union
extorts more than it is due when something is actually due. In exaction, on the other hand, the
union exacts what is not due, when there is nothing due to it. Thus, where the employer
agrees to pay money or deliver things for value, the employees do not render the services in
exchange for the money paid or things of value rendered, hence, exaction.

Page 768
Question:

A union commits Unfair Labor Practice (ULP) under the anti-featherbedding provision in the
Labor Code by causing or attempting to cause an employer to pay or agree to pay for
____________.

a. Stand on services

b. Stand in services

c. Made work

d. Standby services

Rationale: A union commits ULP under the the anti-featherbedding provision in the Labor Code
by causing or attempting to cause an employer to pay or agree to pay for standby services.
Payments for "standing-by," or for the substantial equivalent of "standing-by," are not payments
for "services performed" within the meaning of the law.

Page 769

Question:

The following are the requisites to hold a union liable for ULP based on the demand or
acceptance of negotiation fees or attorney’s fees, EXCEPT:

Statement 1: The union or any of its officers, agents or representatives commit either of the
following acts: (a) to ask for negotiation fees or attorney's fees; or (b) to accept negotiation fees
or attorney's fees;

Statement 2: The negotiation fees or attorney's fees are demanded from, or given by, the
employer as part of the settlement of any of the following issues: (a) in collective bargaining; or
(b) in any other dispute.

a. Statement No. 1 only

b. Statement No. 2 only
c. Both statements
d. None of the above

Rationale: First requisite, the union or any of its officers, agents or representatives commit
either of the following acts: (a) to ask for negotiation fees or attorney's fees; or (b) to accept
negotiation fees or attorney's fees; there are 2 situations contemplated namely; (a) when the
union, its officers, agents or representatives are held guilty of ULP from the very moment they
“ask" for negotiation fees or attorney's fees from the employer. Under this situation, there is no
need to prove that the employer has succumbed and given in to the union's demand. (b) when
the union, its officers, agents or representatives are held guilty of ULP even if they have not asked
or demanded from the employer the payment to them of negotiation fees or attorney's fees for as
long as there is evidence that they have "accepted" negotiation fees or attorney’s fees from the
employer.
Second requisite, the negotiation fees or attorney's fees are demanded from, or given by,
the employer as part of the settlement of any of the following issues: (a) in collective
bargaining; or (b) in any other dispute. In order to be held guilty of Unfair Labor Practice, there
is a need to prove that the union has "asked" or "accepted," as the case may be, for the payment
to it of the negotiation fees or attorney's fees by the employer, as principal consideration for the
settlement of any issues affecting labor-management relations, or. even if not a principal
consideration, part of the settlement of any such issues, chief of which are issues affecting
collective bargaining.
Section C

1. S1: An existing CBA can constitute a bar to the filing of a petition for certification election
(PCE), when there exists a representation issue.

S2: It is within the employer’s legitimate sphere of management control of the business to
adopt economic policies or make some changes or adjustments in its organization or
operations that would insure profit to itself or protect the investment of its stockholders.

a. Both statements are true

b. Both statements are false
c. S1 is true, S2 is false
d. S1 is false, S2 is true

Rationale:
An existing CBA cannot constitute a bar to the filing of PCE. Under the Article 264
[253] which provides for automatic renewal pertains only to the economic
provisions of the CBA, and does not include representational aspect of the CBA.

In the exercise of management’s wide prerogative, the employer may merge or

consolidate its business with another, or sell or dispose all or substantially all of its
assets and properties.

Source: p - 783

2. There must be utmost __________ on the part of both parties in negotiating the CBA.
The existence of _________ is a question of fact and is therefore evidentiary.

a. good faith; bad faith

b. neutrality; good faith
c. neutrality; bad faith
d. bad faith; good faith

Rationale:
The crucial question of whether or not a party has met his statutory duty to bargain
in good faith typically turns on the facts of the individual case, and good faith or
bad faith is an inference to be drawn from the facts. It requires that the reviewing
court look into the evidence to find if indeed there is proof that is substantial enough
to show such bad faith.
Source: p – 777
3. According to Article 264 [253] of the Labor Code, when there is a collective bargaining
agreement, the duty to bargain collectively shall also mean that neither the employer and
the representatives of the employees shall _______ or _______ such agreement during
its lifetime.

a. violate or alter
b. terminate or modify
c. rescind or amend
d. abrogate or transform

Rationale:
Article 264 [253]. 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 or 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 term and conditions of the existing agreement during the
60-day period and/or until a new agreement is reached by the parties.

Source: p - 773

4. S1: The duty to bargain collectively does not need to arise from an employer - employee
relationship between the parties.

S2: The duty to bargain collectively does not exist when the majority status of the
employees' representative is not established.

a. Both statements are true.

b. Only the first statement is true.
c. Only the second statement is true.
d. Both statements are false.

Rationale:
The law on labor relations states that the duty to bargain collectively arises only
when there is an employer - employee relationship between the parties.

Source: p - 775
5. S1: Double recovery of benefits under the Labor Code and Social Security Act of 1997 is
allowed.

S2: Double recovery of benefits under the GSIS Law and Labor Code is allowed.

a. S1 is true, S2 is false
b. S1 is false, S2 is true
c. Both are true
d. Both are false

Rationale:
Under the amendatory law, R.A. 8282 (Social Security Act of 1997), the provision
which bars double recovery has been deleted. The benefits under the Labor Code
is to compensate the injured or sick employee or deceased for the hazards of
employment, while the benefits under the SSS law is because of the social security
for which they contributed.

While double recovery is not allowed under the GSIS law as stated in Sec. 55
where the employee has to make a choice between the benefits thereunder and
those provided under other laws.

Source: p - 772

6. Ratification of the CBA by of all the workers in the bargaining unit makes the
same binding on all employees therein.

a. 3/4
b. 2/3
c. half
d. majority

Rationale:
Ratification of the CBA by majority of all the workers in the bargaining unit makes
the same binding on all employees therein. A CBA gives rise to valid enforceable
contractual relations against the union members, in matters that affect them
individually, and against the union itself; in matters that affect the entire
membership in general. A person who is an employee and at the same time a
union member, is bound by the CBA, in both capacities as such. This is so because
the CBA is a joint and several contract of the members of the union entered into
by the union as their agent.

Source: p - 792

7. This refers to the negotiated contract between a duly certified SEBA of workers and the
employer incorporating the agreement reached after negotiations with respect to wages,
hours of work and all other terms and conditions of employment in the appropriate
bargaining unit, including mandatory provisions for grievances and arbitration
 machineries. It may be executed not only upon the request of the SEBA but also by the
employer.

a. Employment Contract
b. SEBA Agreement
c. Collective Bargaining Agreement
d. Yellow Dog Contract

Rationale:
As provided in Section 1(f), Rule II of NCMB Revised Procedural Guidelines in the
Conduct of Voluntary Arbitration Proceedings (Oct. 15, 2004) and Section 1(jj)
Rule I, Book V, Rules to Implement the Labor Code, as amended by DO No. 40-
03, Series of 2003 (Feb. 17, 2003) and a row of cases decided by the Supreme
Court, Collective Bargaining Agreement (CBA) refers to the negotiated contract
between a duly certified SEBA of workers and the employer incorporating the
agreement reached after negotiations with respect to wages, hours of work and all
other terms and conditions of employment in the appropriate bargaining unit,
including mandatory provisions for grievances and arbitration machineries.

Source: p - 785

8. Which of the following is true about the agreement in the CBA to reduce wages and
benefits of employees?

a. Parties to the CBA are allowed to stipulate on wages and benefits below the
minimum rates or standards set by law.
b. Parties are precluded from negotiating and agreeing to their reduction for as long
as they do not result in being reduced to the level below the legal minimum rates
and standards.
c. Reducing the wages and benefits runs contrary to Article 100 of the Labor Code
which enunciates non-diminution of benefits principle.
d. The principle of non-diminution of benefits does not prohibit a union from
offering and agreeing to reduce wages and benefits of employees.

Rationale:
a. Parties to the CBA are NOT allowed to stipulate on wages and benefits
below the minimum rates or standards set by law.
b. Parties are NOT precluded from negotiating and agreeing to their reduction
for as long as they do not result in being reduced to the level below the
legal minimum rates and standards.
c. Reducing the wages and benefits runs contrary to Article 100 of the Labor
Code which enunciates non-diminution of benefits principle. - This was only
the argument of petitioners in the case of Insular Hotel. (G.R. No. 174040-
41)
 d. As stated in the case of Insular Hotel, the CBA is the end-product of
negotiations by the employer and the SEBA not only with respect to wages,
hours of work, but to all other terms and conditions of employment. The
parties are free to enter into any stipulation that is permissible under the
law.

Source: p - 794

9. S1: In “duty to bargain collectively”, it is a requirement on both parties to perform the

mutual obligation to meet and convene promptly and expeditiously in good faith for the
purpose of negotiating an agreement.

S2: Duty to bargain is a framework to stabilize the relation between employees to create
a climate of sound and stable industrial peace.

a. Only S1 is true.
b. Only S2 is true.
c. Both statements are true.
d. Both statements are false.

Rationale:
Article 263 (252) appropriately describes the whole gamut of the "duty to bargain
collectively". Underscored in the definition is the requirement on both parties to
perform the mutual obligation to meet and convene promptly and expeditiously in
good faith for the purpose of negotiating an agreement. It is no doubt a democratic
framework under the Labor Code to stabilize the relation between labor and
management to create a climate of sound and stable industrial peace. It is a mutual
responsibility of the employer and the union and is their legal obligation.

Source: p - 776

10. In the case of SUNDOWNER DEVELOPMENT CORPORATION vs. HON. FRANKLIN M.

DRILON, which of the following is true in resolving the issue whether or not the purchaser
of the assets of an employer corporation can be considered a successor employer of the
latter's employees:

S1: Absolutely, labor contracts such as employment contracts and collective bargaining
agreements are not enforceable against a transferee of an enterprise, labor contracts
being in personam, thus binding only between the parties.

S2: A labor contract merely creates an action in personally and does not create any real
right which should be respected by third parties. This conclusion draws its force from the
right of an employer to select his employees and to decide when to engage them as
protected under our Constitution, and the same can only be restricted by law through the
exercise of the police power.
 a. S1 only.
b. S2 only.
c. S1 and S2.
d. None is true.

Rationale:
The rule is that unless expressly assumed, labor contracts such as employment
contracts and collective bargaining agreements are not enforceable against a
transferee of an enterprise, labor contracts being in personam, thus binding only
between the parties. A labor contract merely creates an action in personally and
does not create any real right which should be respected by third parties. This
conclusion draws its force from the right of an employer to select his employees
and to decide when to engage them as protected under our Constitution, and the
same can only be restricted by law through the exercise of the police power.
[(SUNDOWNER DEVELOPMENT CORPORATION vs. HON. FRANKLIN M.
DRILON, G.R. No. 82341 December 6, 1989 citing Fernando vs. Angat Labor
Union, 5 SCRA 248, 251 (1962) and Visayan Transportation Co., Inc. vs. Java, 93
Phil. 962, 967-968 (1953)]

Source: p - 784

11. As a contract and the governing law between the parties, the general rules of statutory
construction apply in the interpretation of the provisions of the CBA. When may the CBA's
provision be made subject to interpretation or construction?
a. When the terms of the provisions of the CBA are plain, clear and leave no doubt
on the intention of the contracting parties
b. When there is no ambiguity in the terms of the provisions of the CBA
c. When the terms of the provisions of the CBA are ambiguous and doubtful
or leading to several interpretations
d. When there is no need to go beyond the obvious intendment of the provisions laid
down in the CBA

Rationale:
As a contract and the governing law between the parties, the general rules of
statutory construction apply in the interpretation of the provisions of the CBA. If the
terms of the provisions of the CBA are plain, clear and leave no doubt on the
intention of the contracting parties, the literal meaning of its stipulations, as they
appear on the face of the contract, shall prevail. Contracts which are not
ambiguous are to be interpreted according to their literal meaning and not beyond
their obvious intendment. It is only when the words used are ambiguous and
doubtful or leading to several interpretations of the parties' agreement that a resort
to interpretation and construction is called for.

Source: p - 789
12. In the case of Allan M. Mendoza vs. Officers of Manila Water Employees Union (MWEU),
the respondents’ unfair labor practices (ULP) consists in their act of twice suspending
petitioner and subsequently expelling him from membership therewith on the ground of
non- payment of union dues, without affording him the right to appeal under the union's
constitution and by-laws. They were thus declared "guilty of unfair labor practices under
article 260(249) (a) and (b)-that is, violation of petitioner's _____________, unlawful
discrimination, and illegal termination of his union membership''.

a. right to freedom of religion

b. right to engage in other concerted activities
c. right to self-organization
d. right to equal pay for equal work

Rationale:
Allan M. Mendoza vs. Officers of Manila Water Employees Union (MWEU), G.R.
No. 201595, January 25,2016

DOCTRINE: In essence, unfair labor practice relates to the commission of acts

that transgress the workers’ right to organize. All the prohibited acts constituting
unfair labor practice in essence relate to the workers’ right to self-organization. The
term unfair labor practice refers to that gamut of offenses defined in the Labor
Code which, at their core, violates the constitutional right of workers and
employees to self-organization.
Guaranteed to all employees or workers is the right to self-organization and to
form, join, or assist labor organizations of their own choosing for purposes of
collective bargaining.

LABOR CODE, ART. 249 ART. 249. Unfair labor practices of labor organizations
– It shall be unfair labor practice for a labor organization, its officers, agents or
representatives:
(a) To restrain or coerce employees in the exercise of their right to self-
organization. However, a labor organization shall have the right to prescribe its
own rules with respect to the acquisition or retention of membership;
(b) To cause or attempt to cause an employer to discriminate against an employee,
including discrimination against an employee with respect to whom membership in
such organization has been denied or to terminate an employee on any ground
other than the usual terms and conditions under which membership or continuation
of membership is made available to other members

Source: p - 771

13. Company X is experiencing severe financial constraints and is at the threat of an imminent
bankruptcy, the employer then adopted a rehabilitation plan that would mean the
downsizing of 1/3 of its labor force. The employee's association accepted this and have
 agreed that the collective bargaining agreement (CBA) be suspended for 10 years until
the financial constraints be solved. Does this serve the purpose of the CBA?.

a. No. This violates the provision in Article 253-A of the Labor Code and that the
suspension is inordinately long compared to the statutory life of a CBA, which is 5
years.
b. No. This violates Article 253 in the sense that the suspension is inordinately long
and would prevent any CBA to be created during this suspension. Suspension of
CBA means suspension of employee's rights.
c. Yes. The primary purpose of a CBA is to stabilize the labor-management relations
in order to create a climate of sound and stable industrial peace. Thus, terminating
1/3 of the labor force in order to retain the wages and salaries of the remaining
employees constitute industrial peace.
d. Yes. The primary purpose of a CBA is to stabilize the labor-management
relations in order to create a climate of sound and stable industrial peace.
Thus the termination of employees and the suspension of the CBA in order
for the company to thrive and recuperate constitute industrial peace.

Rationale:
In the case of Rivera and Espiritu, the Philippine Airlines (PAL) and the Philippine
Airlines Employees' Association (PALEA) entered into an agreement that they
suspend the CBA for 10 years. This would in turn suspend employees' rights such
as strikes, and union activities that would further put the company in a worse
severe financial situation. The rationale is that the suspension was agreed upon
not only to promote industrial peace, but to also prevent the company from closure.
"Industrial peace" also includes the prevention of worse case scenarios in the labor
force and therefore such practice of suspension is practical and realistic given the
situation. In the case, when PALEA itself were the ones who recommended the
suspension, they are within their right of free collective bargaining, as it is imbued
in this right, is also the right to suspend it.
Source: p - 786

14. Which of the following is true about the benefits derived from law and those from the CBA
or company policy/ practice?

a. Workers are allowed to negotiate wage increases separately from and in

addition to legislated wage increases.
b. Parties to the CBA are allowed to stipulate on wages and benefits below the
minimum rates or standards set by law.
c. Wage order should be construed to prevent workers in particular firms or
enterprises or industries from bargaining for higher wages with their respective
employers.
d. Should there be any government mandated wage increases and/or allowances,
the same shall be under and below the benefits herein granted.
 Rationale:
It is provided under Article 125 of the Labor Code that no wage order should be
construed to prevent workers in particular firms or enterprises or industries from
bargaining for higher wages with their respective employers. This is usually the
case because all CBA negotiations are conducted with the end in view of effecting
improvements and upward changes in wages and other benefits over and above
the rates set by law. Obviously, the parties do not sit down and negotiate a CBA
for the purpose of reducing existing wages and benefits below the minimum
standards fixed and mandated by law.

Source: p - 793

15. Under the provisions of the Amended Rules on Employee’s Compensation, it is the period
required by the law to file for a notice of appeal to prevent the decisions, orders or
resolutions of ECC to the CA become final and executory?

a. 15-day period
b. 60-freedom day period
c. There is no period required by the law as it is the right of every party to appeal
whenever they deem it necessary.
d. The period to file for a notice of appeal could depend on the facts and
circumstances surrounding the case.

Rationale:
Under the Amended Rules on Employee’s Compensation, The 15-day period is
the period within which appeals should be made from the decisions, orders or
resolutions of the ECC to the CA in accordance with the 1995 and 1997 Rules.
Failure to appeal within said period would make the decision, order or resolution
of the ECC, which has been rendered in its appellate jurisdiction, final and
executory.

Source: p - 791

16. Which of the following statements is not true regarding the effect of the automatic renewal
provision of the last sentence of Article 264 [253]?

a. Although the PCE was filed during the freedom period, the union security
clause of the CBA is still binding during the 60-day freedom period and even
after the expiration of the CBA; hence, an employee may be terminated on
the basis of the recommendation of the SEBA.
b. The provision for the status quo is conditioned on the fact that no PCE was filed
during the freedom period. Any other view would render nugatory the clear
statutory policy to favor certification election as the means of ascertaining the true
expression of the will of the workers as to which labor organization would represent
them.
 c. The last sentence of Article 264 [253], which provides for automatic renewal
pertains only to the economic provisions of the CBA, and does not include
representational aspects of the CBA.
d. None of the above

Rationale:
It was squarely addressed in Picop Resources,Inc. (PRI), that while it is incumbent
for the employer to continue to recognize the majority status of the incumbent
SEBA even after the expiration of the 60-day freedom period, it could only do so
when no PCE was filed during that period. The reason is, with the pendency of
such a petition, any CBA entered into by management with a labor organization is
fraught with the risk that such a labor union may not be chosen thereafter as the
SEBA.

Source: p - 782

17. Who should be held criminally liable for ULP's committed by Labor Organizations?

a. The SEBA and its officers who initiated and authorized the collective bargaining
agreement with the employer.
b. Officers or members of the governing boards who induced the employees to
engage in an unfair labor practice.
c. Employers including its top level and middle level managers who have actually
participated in, authorized or ratified the ULP's.
d. Only the officers, members of governing boards, representatives or agents
or members of labor associations or organizations who have actually
participated in, authorized or ratified the ULP's.

Rationale:
Article 260 (249) last paragraph is explicit in prescribing who should be held
criminally liable for ULP's committed by labor organizations. It states that only the
officers, members of governing boards, representatives or agents or members of
labor associations or organizations who have actually participated in, authorized
or ratified the ULP's.

Source: p - 770

18. If there is doubt in the interpretation of the provision of the CBA, it should be resolved in
favor of labor, as this has been mandated by no less than the Constitution. In the case of
Mindanao Steel Corporation v. Minsteel Free Workers Organization, Section 3, Article VII
of the CBA entered into by the parties provides that:“It is hereby agreed that these salary
increases shall be exclusive of any wage increase that may be provided by law as a result
of any economic change.” How did the Supreme Court ruled on emergency cost of living
(ECOLA) for three months granted under Interim Wage Order No. RX-02?
a. The Supreme Court ruled that aside from the P20.00 CBA wage increase,
union members are entitled to the ECOLA under the Interim Wage Order.
 b. Though the law favors labor, the Supreme Court couldn’t keep a blind eye to the
rights of the employer. Paying three months of ECOLA is excessive, hence, the
Court remanded the case to the Regional Tripartite Wages and Productivity Board
to review its order.
c. Though the law favors labor, the Supreme Court couldn’t keep a blind eye to the
rights of the employer. Paying three months of ECOLA is excessive; hence,
Mindanao Steel should only pay the P20.00 CBA wage increase.
d. The Supreme Court ruled that Mindanao Steel should be exempt from paying both
the P20.00 CBA increase and the ECOLA because the company has been
suffering from loses.in the previous years.

Rationale:
The said provision should be interpreted in accordance with its literal meaning.
The CBA provision is clear that the salary increases, such as the P20.00 provided
under the CBA, shall not include any wage increase that may be provided by law
as a result of economic change.

Source: p - 790

19. It is a well-entrenched principle in the labor law as regards the exercise by the employer
that " the power to grant benefits over and beyond the minimum standards of the law or
the Labor Code for that matters belongs to the employer"

a. Collective Bargaining Agreement

b. Constitution By-Laws
c. Management Prerogatives
d. Labor Relations

Rationale:
Under the doctrine of management prerogative, every employer has the inherent
right to regulate, according to his own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, the time, place
and manner of work, work supervision, transfer of employees, lay-off of workers,
and discipline, dismissal, and recall of employees ( Peckson vs. Robinsons
Supermarket Corporation G.R. NO. 198534, July 03, 2013)

This management prerogative is a function associated with the employer's inherent

right to control and manage effectively its enterprise. Even as the law is solicitous
of the welfare of the employees, it must also protect the right of an employer to
exercise what are clearly management prerogatives. The free will of management
to conduct of its own business affairs to achieve its purpose cannot be denied
(SCA Hygiene Products Corporations Employees Association -FFW v. SCA
Hygiene Products Corp. G.R. NO. 182877, August 9, 2010)

Source: p - 787
20. One of the duties of Employees' Compensation Commission (ECC) is to make the
necessary actuarial studies and calculations concerning the grant of constant help and
income benefits for permanent disability or death and the rationalization of the benefits for
permanent disability and death with benefits payable by the System for similar
contingencies. Said duty is subject to the following conditions, except:

a. Determine the rate of contribution payable by an employer whose records

show a high frequency of work accidents or occupational diseases due to
failure by the said employer to observe adequate safety measures.
b. The Commission may upgrade benefits and add new ones subject to approval of
the President.
c. The actuarial stability of the State Insurance Fund shall be guaranteed.
d. Increases in benefits shall not require any increases in contribution.

Rationale:
Letter (a) is not among the conditions provided under paragraph (e) of Art. 183 of
the LC in order that the aforementioned duty will be exercised. Instead, (a) is also
one of the duties of the Employees' Compensation Commission (ECC)
enumerated under Art. 183 [177] of the Labor Code and an exception to the
condition that "increases in benefits shall not require any increases in contribution".
(Art. 183 [177] (e) of the Labor Code)

Source: p - 778

21. I. The duty to bargain collectively does not mean that neither party shall terminate nor
modify such agreement during its lifetime.

II. The only time the parties are allowed to terminate or modify the CBA is within the period
of sixty (60) days prior to its expiration date by serving a notice to that effect.

a. Statement I. is true, statement II is false

b. Statement I. is false, statement II. is true
c. Both statements are true
d. Both statements are false

Rationale:
Article 264 [253] broadens the scope of such duty when there is an existing CBA ,
in describing this duty, it explicitly states that "the duty to bargain collectively shall
also mean that neither party shall terminate nor modify such agreement during its
lifetime." In other words, the parties' mutual duty to bargain collectively includes
only the performance of the mutual to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating a CBA but their firm
commitment that all throughout the lifetime of the CBA , they will not do or perform
any act that will unduly result in its modification or termination.

Article 264 [253] clearly states that "(w)hen there is an existing CBA, the parties
thereto are bound to observe the terms and conditions therein set forth until its
 expiration. Neither party is allowed to terminate such agreement during its lifetime.
The only time the parties are allowed to terminate or modify the CBA is within the
period of sixty (60) days prior to its expiration date by serving a notice to that effect.

Source: p - 779

22. While the CBA constitutes the law between the parties, it is not, however, an ordinary
contract to which the principles of law governing ordinary contracts apply. A CBA, as a
labor contract within the contemplation of __________ , is not merely contractual in nature
but impressed with public interest and thus, must yield to the common good.

a. Article 241 of the Labor Code

b. R.A. 8042
c. Article 1700 of the Civil Code
d. R.A. 10361

Rationale:
Art. 1700 of the civil code states that the relations between capital and labor are
not merely contractual. They are so impressed with public interest that labor
contracts must yield to the common good. Therefore, such contracts are subject
to the special laws on labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of labor and similar subjects.

R.A. 8042 & 10361 are the Migrant Workers and Overseas Filipinos Act and
Domestic Workers Act respectively. Art. 241 of the labor code is the Rights and
conditions of membership in a labor organization.

Source: p - 788

23. A petition for certification election challenging the majority status of the existing SEBA
should be filed _________and not ______________said 60-day freedom period.

a. before; after
b. after; before
c. within; before or after
d. before or after; within

Rationale:
A petition for certification election challenging the majority status of the existing
SEBA should be filed within and not before or after said 60-day freedom period.
Upon the expiration of the said period and no petition for certification election is
filed by a challenging union, the employer is duty bound to continue to recognize
the majority status of the incumbent SEBA.

Source: p – 780
24. If a CBA has expired, the following situations occurs, except:

a. Both parties to the CBA to keep the status quo, as they shall continue in full force
and effect the terms and conditions of the existing agreement until a new
agreement is reached by the parties.
b. The law does not consider the CBA as continuing in force and effect and its
contents will not be enforceable to the parties. A new CBA must be stipulated
and agreed upon within 60 days from the date of expiration to establish new
terms and conditions that will bind the parties.
c. By operation of law, the CBA is still binding to the parties, and therefore the
contract bar rule applies.
d. Despite the formal effectiveness of the existing collective bargaining agreement,
the CBA is still valid and continues to have legal effects as between the parties
until a new CBA has entered into.

Rationale:
In the case of Lopez Sugar Corporation v, FFW, 189 SCRA 179, the court held
that although the CBA expired, it continues to have legal effects between the
parties until a new CBA has entered into. Moreover, the parties to the CBA cannot
discontinue to follow the terms and conditions embodied in the expired CBA, as it
is duty bound to maintain the status quo by continuing to give the same benefits
until a renewal thereof is concluded by the parties (Pier 8 Arrastre and Stevedoring
Services v. Confesor, G.R. No. 110854, 13 February 1995).

Source: p - 781

25. 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 _______ 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.

a. 40 days
b. 60 days
c. 65 days
d. 55 days

Rationale:
Under the Labor Code of the Philippines, Art. 253, when it comes to the duty to
bargain collectively when there exists a collective bargaining agreement, w 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.

Source: p - 774
Section D

1. Which of the following statements is true?

a. Non-SEBA members who are entitled to the benefits of the CBA must pay membership
fees.
b. Members of the minority union/s who paid agency fees to the SEBA are not entitled to the
benefits of CBA.
c. The benefits under the CBA should be extended to new employees who are hired
after the CBA was concluded and during its effectivity or even after its expiration
provided they are included in the CBU being represented by the SEBA.
d. Being a member of SEBA, who enjoys its benefits, payment to the membership fee is not
required.

Rationale: To exclude new employees hired after the conclusion of the CBA and during its
effectivity or even after its expiration would constitute undue discrimination and deprive them of
monetary benefits. This holds true even if no new agreement had been entered into after the
expiration of the CBA's stipulated term. It is only fair and just that the employees hired are
included.

Source – p. 795

2. The term "Free Rider" is a union-used derogatory term to describe an employee who works in
a "closed-shop" and chooses to not join the SEBA or any union for that matter, but is still covered
by the CBA. The Labor Code accommodates a situation where there would be Free Riders.

a. Sentence 1 is true.
b. Sentence 2 is true.
c. Both sentences are false.
d. Both sentences are true.

Rationale: The term "Free Rider" is a union-used derogatory tenn to describe an employee who
works in an “open-shop" and chooses to not join the SEBA or any union for that matter, but is
still covered by the CBA. Notably, the Labor Code does not contemplate a situation where there
would be Free Riders. The prevailing rule is that anyone who avails of the benefits of the CBA is
liable to pay agency fees to the SEBA.

Source – p. 796

3. It is a recognized norm that when an employer suffers from extreme business losses or financial
reverses, it is _____ from paying any separation pay once it decides to close its business or cease
in its operation.

a. Exempt
b. Liable
c. Given the choice
d. Subject
Rationale: Article 298 [283] of the Labor Code which imposes such liability for separation pay only
"in case of closure or cessation of operations of establishment or undertaking not due to serious
business losses or financial reverses."

Source – p. 797

4. It cannot be generally demanded as a matter of right because its grant is a management

prerogative. It cannot also be forced upon the employer who may not be obliged to assume the
onerous burden of granting this and other benefits.

a. medical benefits
b. salary increase
c. bonus
d. 13th month pay

Rationale: It is equally a well-respected norm that bonus, being granted and paid ex gratia to the
employees, cannot generally be demanded as a matter of right because its grant is a management
prerogative. It cannot be forced upon the employer who may not be obliged to assume the
onerous burden of granting bonuses or other benefits aside from the employees' basic salaries
and wages. If there is no profit, there should be no bonus. If profit is reduced, bonus should
likewise be reduced, absent any agreement to the contrary.

Source – p. 798

5. The employer has no duty to bargain collectively:

I. With a union whose PCE is still pending and, therefore, it has yet to be certified as the
SEBA; or
II. If the majority status of the current SEBA is being challenged and contested by other
union/s in the bargaining unit which seasonably filed PCE/s within the 60-day freedom
period.
III. When the employer does not want recognize the current SEBA.

a. Statements 1 and 2 are correct

b. Statements 1, 2 and 3 are false
c. Statements 2 and 3 are false
d. Statements 1 and 3 are false

Rationale: Statements 1 and 2 are correct. The reason is that under any of the foregoing
situations, the issue of majority representation in the bargaining unit remains unresolved until the
certification election shall have been conducted and a SEBA is proclaimed as a result thereof.

Source — p. 799

6. The contract bar rule continues to be effective even after the CBA's _______.
 a. Cancellation
b. Nullification
c. Termination
d. Expiration

Rationale: The purpose of the CONTRACT BAR RULE is to ensure stability in the relationship of
the workers and the company by preventing frequent modifications of the CBA entered earlier into
by them in good faith and for the stipulated original period.

Source — p. 800

7. It is defined as the "counteraction of things producing entire stoppage: a state of inaction or of

neutralization caused by the opposition of persons or of factions (as in government or a voting
body):

a. Deadlock
b. CBA
c. Check-off
d. Agency Fee

Rationale: There is a deadlock when there is a "complete blocking or stoppage resulting from the
action of equal and opposed forces; as, the deadlock of a jury or legislature."' The word is
synonymous with the word impasse' which, within the meaning of the American federal labor laws,
''presupposes reasonable effort at good faith bargaining which, despite noble intentions, does not
conclude in agreement between the parties."

Source — p. 801

8. Who may declare a deadlock?

a. The SEBA
b. The employer
c. Either of the parties in a CBA negotiation
d. Neither of the parties in a CBA negotiation

Rationale: There is no law that mandates that only the SEBA or the employer alone may declare
a deadlock. Such declaration, in fact, may be made separately or jointly by the parties and either
expressly or impliedly. The filing of a notice of strike by the SEBA or notice of lockout by the
employer, signals the formal declaration of a CBA deadlock--one of only two (2) grounds allowed
under the law that may be invoked in such notice, the other being ULP committed either by the
employer or the SEBA.

Source – p. 802
9. In case of a deadlock in the initial negotiation or re-negotiation or renewal of the CBA, the
parties may exercise their respective rights under the Labor Code which includes the following:
EXCEPT.

a. Submission of the deadlock issue to conciliation and mediation by the NCMB.

b. Declaration and actual staging of a strike by the union or lockout by the employer.
c. Referral of the case to compulsory or voluntary arbitration.
d. In case of industries necessary to the national interest, filing of the petition for
referral of jurisdiction over labor dispute or certification thereof to the Labor Arbiter
for compulsory mediation.

Rationale: In case of a deadlock in the initial negotiation or renewal of the CBA, the law provides
that the parties may exercise rights under the Labor Code which includes, filing of petition for
assumption of jurisdiction over the labor code disputes or certification therefore to the NLRC for
compulsory arbitration in case of industries indispensable to the national interest.

Source – p. 803

10. The following are natures of arbitral awards. EXCEPT:

a. Arbitrally awarded ones are granted through the intervention of a third party called a
voluntary arbitrator or compulsory arbitrator.
b. Arbitral awards cannot per se be categorized as agreements voluntarily entered into by
the parties because they are determinations and impositions made by a third party, they
can be considered as "approximations of collective bargaining agreements"
c. Arbitral award should not include terms and conditions not contemplated by law and by
the parties.
d. Arbitral award can impose conditions that limit exercise of management rights and
prerogatives. The DOLE Secretary can likewise impose in his arbitral award certain
conditions that would limit what is clearly an exercise by the employer of its
inherent management rights and prerogatives.

Rationale: Arbitral award cannot impose conditions that limit exercise of management rights and
prerogatives. Neither can the DOLE Secretary impose certain conditions that limits the employer’s
inherent management rights and prerogatives in his arbitral award.

In the case of Manila Electric Ccmpany, the SC rejected the added requirement of
consultation with the union imposed by the DOLE Secretary. Employer is allowed to contract out
services for six (6) months or more. Still, a line must be drawn between management prerogatives
regarding business operations per se and those which affect the rights of employees, and in
treating the latter, the employer should see to it that its employees are at least properly informed
of its decision or modes of action to attain a harmonious labor-management relationship.

Source – p. 804
11. In the Meralco Rule, the determination of the factors that should affect wage determination,
the best way are the following factors except one.

a. The bargaining history of the company and the public interest aspects of the case.
b. The trends and amounts of arbitrated and agreed wage awards and the company's
previous CBAs.
c. The private interest of the corporation and its willingness to compensate its
employees with the bare minimum.
d. The affordability or capacity to pay and The industry trends in general.

Rationale: According to Meralco Ruling, a collective bargaining dispute requires due consideration
and proper balancing of the interests of the parties to the dispute and of those who might be
affected by the dispute. In determining the factors that should affect wage determination, the best
way is to holistically consider the available objective facts, including, where applicable, factors
such as:

1. The bargaining history of the company;

2. The trends and amounts of arbitrated and agreed wage awards and the company's previous
CBAs;

3. The industry trends in general;

4. The affordability or capacity to pay; and

5. The public interest aspects of the case.

Source — p. 805

12. Under the Triumph Rule, which is NOT considered a factor in resolving a wage issue?

a. prevailing economic indicators in the workplace

b. comparative standing of the company in employees' wages and other economic benefits
c. Prevailing economic indicators in the local and regional economy
d. the company's previous CBAs

Rationale: In Triumph International, the High Court, in affirming the DOLE Secretary's award
resolving the bargaining deadlock between the petitioner union and the private respondent
company for their 1999-2001 CBA, noted the reasonableness thereof as it as based on the
prevailing economic indicators in the workplace, in the industry, and in the local and regional
economy. As well, it took into account the comparative standing of the company in terms of
employees' wages and other economic benefits. The company's previous CBAs is a consideration
under the Asia Brewery Rule.

Source – p. 806
13. It is an approach in resolving a wage dispute by merely finding the midway point between the
demands of the company and the union and splitting the difference to successfully negotiate the
Collective Bargaining Agreement (CBA).

a. Solomonic Approach
b. Voluntary Approach
c. Liberal Approach
d. Substantial Approach

Rationale: In the 1998 case of Manila Central Line Corporation, this solomonic or middle ground
approach was given approbation. In this case, the parties' proposal and counter-proposal shows
that the union was demanding that the rate be increased to 10% and 8% from the old rate of 8%
and 6% or an increase of 2%, while that of the company effectively increased the rate by .5% to
make the rate at 8.5% and 6.5%. From this, it appears that the disagreement lies on how much
would the increase in the rate be. As appearing the union was asking for an increase equivalent
to at least 25% for the drivers and at least 33% for the conductor/tresses, while that which
proposed (sic) by the company shows an increase of at least 6% and 8% respectively. The
difference between the parties proposal and counter-proposal is at least 19% and 25%,
respectively. With this disagreement in this difference, it is thought of to be practical and
reasonable to meet at the middle of the difference in the rate by dividing the same into two. Hence,
the increase in the rate should be from the present 8% and 6% to 8.75% and 6.75%. However, in
order to make the increase realistic it is opined that it should be rounded off to the nearest full
number that is to 9% and 7%, respectively (MANILA CENTRAL LINE CORPORATION vs.
MANILA CENTRAL LINE FREE WORKERS UNION-NATIONAL FEDERATION OF LABOR and
the NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 109383 June 15, 1998).

Source – p. 807

14. Statement 1: The DOLE Secretary is not authorized to grant an arbitral wage increase more
than what the parties mutually agreed upon.

Statement 2: An arbitral award should be based on externally audited financial statements.

a. Both statements are true.

b. Both statements are false.
c. Only Statement 1 is true.
d. Only Statement 2 is true.

Rationale: The question of whether the DOLE Secretary is authorized to grant an arbitral wage
increase more than what the parties mutually agreed upon in the Memorandum of Agreement is
answered in the affirmative in the case of Cirtek Employees Labor Union-Federation of Free
Workers v. Cirtek Electronics, Inc. (G.R. No. 190515, June 6, 2011). The Court ruled that:

“For the Secretary, in resolving the CBA deadlock, is not limited to considering the MOA
as basis in computing the wage increases. He could, as he did, consider the financial documents
submitted by respondent as well as the parties' bargaining history and respondent's financial
outlook and improvements as stated in its website.”
 As discussed in the Decision under reconsideration, the then Acting Secretary of Labor
Manuel G. Imson acted well within his jurisdiction in ruling that the wage increases to be given
are ₱10 per day effective January 1, 2004 and ₱15 per day effective January 1, 2005, pursuant
to his power to assume jurisdiction under Art. 263 (g) of the Labor Code.

While an arbitral award cannot per se be categorized as an agreement voluntarily entered

into by the parties because it requires the interference and imposing power of the State thru the
Secretary of Labor when he assumes jurisdiction, the award can be considered as an
approximation of a collective bargaining agreement which would otherwise have been entered
into by the parties. Hence, it has the force and effect of a valid contract obligation between the
parties.

Source – p. 808

15. In accordance with the provision of article 264 [253] which imposes on 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 __________ freedom period [prior to its expiration date] and/or until a new
agreement is reached by the parties, the Supreme Court has consistently ruled that the CBA, as
proposed by the SEBA, may be __________________ imposed on the employer.

a. 60-day, forcefully
b. 30-day, unilaterally
c. 60-day, unilaterally
d. 30-day, forcefully

Rationale: The Supreme Court has consistently ruled that the CBA, as proposed by the SEBA,
may be unilaterally imposed on the employer in the event the latter tails to discharge its duty to
bargain collectively by refusing to make any counterproposals to those made by the SEBA or for
engaging in bad faith bargaining.

Source – p. 809

16. The employer which violates the duty to bargain collectively loses its statutory right to
___________ the terms and conditions of the draft CBA proposed by the SEBA.

a. implement
b. cancel
c. negotiate or re-negotiate
d. adjudicate

Rationale: While under ordinary circumstances, it is not obligatory upon either side of a labor
controversy to precipitately accept or agree to the proposals of the other, but an erring party
should not be allowed to resort with impunity to schemes feigning negotiations by going through
empty gestures. Thus, by compulsorily imposing on the employer the provisions of the draft CBA
proposed by the union, the interests of equity and fair play are properly served and both parties
regain footing which was lost when the employer thwarted the negotiations for new economic
terms of the CBA.

Source — p. 810
17. In Manila Electric Company, the DOLE Secretary originally ordered the _______ of the
retirement pay, rice subsidy and medical benefits of MERALCO retirees.

a. Restrict
b. Shrinkage
c. Increase
d. Freeze

Rationale: This ruling was reconsidered based on the position that retirees are no longer
employees of the company and, therefore, are no longer bargaining members who can benefit
from a compulsory arbitration award. The DOLE Secretary, however, ruled that all members of
the bargaining unit who retired between August 19, 1996 and November 30, 1997 (i.e., the term
of the disputed CBA under the DOLE Secretary's disputed orders) are entitled to receive an
additional rice subsidy. The question squarely brought in this petition is whether the DOLE
Secretary can issue an order that binds the retirement fund. The company alleges that a separate
and independent trust fund is the source of retirement benefits for MERALCO retirees, while the
union maintains that MERALCO controls these funds and may, therefore, be compelled to
improve this benefit in an arbitral award.

Source — p. 811

18. Only the terms and conditions already existing in the current CBA and was granted by the
______________ should be _______________ in the CBA.

a. secretary; repealed
b. president; abolished
c. employer; amended
d. secretary; incorporated

Rationale: In the case of Manila Electric Company, the Supreme Court ruled that only the terms
and conditions already existing in the current CBA and was granted by the Secretary should be
incorporated in the CBA.

Source – p. 812

19. S1 : Arbitral Award can be subject to re-negotiation.

S2 : The CBA to be concluded should include both negotiated and arbitrally awarded benefits and
terms and conditions of employment.

a. S1 is correct; S2 is incorrect
b. S1 is correct only
c. S2 is correct only
d. Both statements are correct
Rationale: S1: Arbitral Award cannot be subject to re-negotiation.

Having freely agreed to submit the unresolved issues through the arbitration process, the parties
are duty bound to adhere and comply with the arbitral award rendered therein and subsequently
execute a CBA completely reflecting and incorporating the arbitrally awarded benefits and other
terms and conditions without further need to discuss again and re-negotiate them.

S2 : The CBA to be concluded should include both negotiated and arbitrally awarded benefits and
terms and conditions of employment.

In the Nissan Motors Philippines Inc vs Secretary of Labor and Employment , the parties were
ordered by the DOLE Secretary "to conclude a CBA embodying the dispositions made {in the
case} and all other agreements which were reached by the parties during negotiation and
conciliation".

Source – p. 813

20. The NLRC, through its Administrative Order No. 11-17, Series of 2012, which was issued in
relation to BIR Revenue Memorandum Circular No. 39-2012, imposes a ____________
withholding income tax on arbitrally awarded benefits provided under the CBA except for sickness
benefits and conversion of leave benefits of not more than ten (10) days.

a. five percent (5%)

b. six percent (6%)
c. ten percent (10%)
d. twenty percent (20%)

Rationale: Under the issuance, the following labor dispute awards are subject to 5% withholding
income tax: (a) Backwages; (b) Reinstatement Wages; (c) Allowances; (d) Salary Differentials or
Underpayment of salaries; (e) Unpaid Salaries/wages; (f) 13th Month Pay; (g) Overtime.

Source – p. 814

21. _______________ is a bargaining involving a CBA negotiation between and among several
certified SEBAs and employers.

a. Single-enterprise
b. Multi-employer
c. Collective bargaining
d. None of the above

Rationale: The Rules to Implement the Labor Code, as amended, enunciate two (2) kinds of
collective bargaining, namely:

(I) Single-enterprise bargaining involving a CBA negotiation between one certified sole and
exclusive bargaining agent (SEBA) and one employer; and
(2) Multi-employer bargaining involving a CBA negotiation between and among several certified
SEBAs and employers.

Source — p. 815

22. Employers who agree to group themselves or use their existing associations to engage in
multi-employer bargaining should send a ____________ to each of their counterpart legitimate
labor unions indicating their desire to engage in multi-employer bargaining.

a. Scope and and coverage of the negotiations and agreement

b. Names of the employers desire to avail multi-employer bargaining
c. Duration of the current CBA
d. Written notice

Rationale: Employers who agree to group themselves or use their existing associations to engage
in multi-employer bargaining should send a written notice to each of their counterpart legitimate
labor unions indicating their desire to engage in multi-employer bargaining. said notice should
indicate the following:

1. The names of the employers desire to avail multi-employer bargaining;

2. Their corresponding legitimate labor organizations;

3. The fact that each corresponding legitimate union in an incumbent SEBA; and

4. The duration of the current CBA, if any entered into by each employer with the counterpart
legitimate labor union.

Source – p. 816

23. The following are essential requisites of collective bargaining except;

a. Employer-employee relationship must exist between the employer and the members of
the bargaining unit being represented by the SEBA.
b. The bargaining unit being sought to represented by the SEBA should be validly constituted
and established in accordance with law.
c. There should be a lawful written demand to bargain and a clear statement of the proposals
by one party to negotiate an agreement and the equivalent counter-proposals thereto by
the other party before the collective bargaining negotiations process may validly
commence.
d. One of the parties may establish terms and conditions to prejudice the rights of the
other party.

Rationale: The last requisite, the majority status of the SEBA must be duly established through
any of the modes sanctioned by law such as SEBA Certification, or certification, consent, run off
or re-run election. Proof of the majority status of the union demanding negotiation should be
clearly established; otherwise the employer has no obligation to engage in collective bargaining
negotiations with it and it has the right to refuse to negotiate until such official proof is presented.

Source — p. 817

24. Which among the following is not a basic principle in collective bargaining negotiations:

a. Parties must act in good faith

b. Employer and employees should stand on equal footing
c. Parties have the power to fix the terms and conditions of their employment relationship
d. Parties must act in bad faith

Rationale: Parties must act in good faith. Collective bargaining is not merely going through the
motions of negotiating. Good faith bargaining requires that claims made by either bargainer
should be honest claims.

Source – p. 818

25. The following are the exceptions referred to Article 218(B) [211(B)] of the Labor Code involves
the exercise of powers and functions vested by law, except one:

a. National Wages and Productivity Commission or Regional Tripartite Wages and

Productivity Board
b. Grievance Machinery and Voluntary Arbitrators or Labor Arbiters, National Labor
Relations Commission or National Conciliation and Mediation Board
c. Secretary of Labor and Employment or President of the Philippines
d. Bureau of Labor Relations or Med-Arbiters

Rationale: Article 218(B) of the Labor Code provides that "to encourage a truly democratic method
of regulating the relations between the employers and employees by means of agreements freely
entered into through collective bargaining, no court or administrative agency or official shall have
the power to set or fix wages, rates of pay, hours of work or other terms and conditions of
employment, except as otherwise provided under this Code." The exceptions referred to therein
involve the exercise of the powers and functions vested by law to the following: 1. National Wages
and Productivity Commission or Regional Tripartite Wages and Productivity Boards as to the
fixing of minimum wages; 2. Grievance Machinery and Voluntary Arbitrators or Labor Arbiters,
National Labor Relations Commission or National Conciliation and Mediation Board as to the
resolution of wage distortion cases; and 3. Secretary of Labor and Employment or President of
the Philippines as to assumption of labor disputes affecting the national interest or certification
thereof to the NLRC for compulsory arbitration.

Source – p. 819