D. Collective bargaining

Frequency: ★★★★★

1. Duty to bargain collectively, bargaining in bad faith

Concept: Duty to Bargain Collectively. The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession. (Article 263. [252], Labor Code)

a) Duty to Bargain Collectively in the Absence of Collective Bargaining Agreements.

In the absence of an agreement or other voluntary arrangement providing for a more expeditious manner of collective bargaining, it shall be the duty of employer and the representatives of the employees to bargain collectively in accordance with the provisions of this Code. (Article 262. [251], Ibid.)

b) Duty to Bargain Collectively When There Exists a Collective Bargaining Agreement

When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. (Article 264. [253], Ibid.)

2. Collective bargaining agreement (CBA), mandatory provisions

Concept: Collective bargaining agreement (CBA). Collective bargaining agreement (CBA) – refers to the contract between a legitimate labor union and the employer concerning wages, hours of work, and all other terms and conditions of employment in a bargaining unit. (Section 1[k], Rule I, Book V, Omnibus Rules Implementing the Labor Code, as amended by D.O. No. 40, Series of 2003)

a) Procedure in Collective Bargaining

The following procedures shall be observed in collective bargaining:

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

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

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

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

5) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary arbitrator. (Article 261, Ibid.)

b) Mandatory provisions

NB: Mandatory provisions are those required by law or regulations.

Mandatory provisions:
1) Grievance machinery.The grievance machinery is procedure set forth in an organized establishment for the adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies. (Article 273, Ibid.)
2) Voluntary arbitration. The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies. (Article 273, Ibid.)   All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining Agreement. (Paragraph 2, Article 273, Ibid.)   For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement a procedure for the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of Arbitrators have been selected by the parties as described above. (Paragraph 3, Article 273, Ibid.)
3) Joint continuing programs and information campaigns for a drug-free workplace. (Section 4, R.A. 9165)

c) 2 Kinds of CBA provisions

2 Kinds of CBA provisions:
1) Economic provisions
e.g. Labor standards (e.g. wage, holiday pay, overtime pay, retirement, etc.)
2) Non-economic provisions
Examples:
a) Grievance machinery
b) Voluntary arbitration
c) Joint continuing programs and information campaigns for a drug-free workplace (Section 4, R.A. 9165)
d) Union security clause/s
e) Working conditions (e.g. work hours, transfer, seniority, lay-offs, etc.)
f) Analogous thereto

NB: The above-list on non-economic benefits are non-exhaustive. Essentially, any stipulations not related to compensation and benefits (which consist of economic provisions) fall under non-econmic provisions.

•••••

BAR EXAM QUESTION

(Question A.1[e], Part I, Labor Law, 2019 Bar Exam)

Define, explain or distinguish the following terms:

(e) Grievance machinery (2%)

SUGGESTED ANSWER:

The grievance machinery is procedure set forth in an organized establishment for the adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies.

•••••

BAR EXAM QUESTION

(Question IV, Labor Law, 2018 Bar Exam)

Natasha Shoe Company adopted an organizational streamlining program that resulted in the retrenchment of 550 employees in its main plant. After having been paid their separation benefits, the retrenched workers demanded payment of retirement benefits under a CBA between their union and management. Natasha Shoe Company denied the workers’ demand.

(a) What is the most procedurally peaceful means to resolve this dispute? (2.5%)

SUGGESTED ANSWER:

Endorsing the dispute to the grievance machinery is the most procedurally peaceful means to resolve the issue considering Natasha Shoe Company is an organized establishment. If the issue remains unresolved, the dispute may be submitted for voluntary arbitration.

•••••

BAR EXAM QUESTION

(Question XVI, Labor Law, 2018 Bar Exam)

Nagrab Union and Nagrab Corporation have an existing CBA which contains the following provision: “New employees within the coverage of the bargaining unit who may be regularly employed shall become members of Nagrab Union. Membership in good standing with the Nagrab Union is a requirement for continued employment with Nagrab Corporation.” Nagrab Corporation subsequently acquired all the assets and rights of Nuber Corporation and absorbed all of the latter’s employees. Nagrab Union immediately demanded enforcement of the above-stated CBA provision with respect to the absorbed employees. Nagrab Corporation refused on the ground that this should not apply to the absorbed employees who were former employees of another corporation whose assets and rights it had acquired.

(a) Was Nagrab Corporation correct in refusing to enforce the CBA provision with respect to the absorbed employees? (2.5%)

(b) May a newly-regularized employee of Nagrab Corporation (who is not part of the absorbed employees) refuse to join Nagrab Union?

(c) How would you advise the human resources manager of Nagrab Corporation to proceed? (2.5%)

SUGGESTED ANSWER:

(a) No. Answer

Under labor law jurisprudence, in order to apply or not apply the Union Shop Clause, the absorbed employees may only be classified as either “old” or “new.” If they are not “old” employees, they are necessarily “new” employees. If they are new employees, the Union Shop Clause did not distinguish between new employees who are non-regular at their hiring but who subsequently become regular and new employees who are “absorbed” as regular and permanent from the beginning of their employment. Rule

In the case at bar, the absorbed employees are “new” employees of Nagrab Corporation. That being the case, the Union Shop Clause applies to them. The absorbed employees automatically became members of Nagrab Union. Apply

Thus, Nagrab Corporation was not correct in refusing to enforce the CBA provision with respect to the absorbed employees. Conclusion

(b) No. Answer

Under labor law jurisprudence, a union shop clause is valid and enforceable against new employees. Meaning, all new regular employees are required to join the union within a certain period for their continued employment. However, under law and jurisprudence, the following kinds of employees are exempted from its coverage, namely, employees who at the time the union shop agreement takes effect are bona fide members of a religious organization which prohibits its members from joining labor unions on religious grounds; employees already in the service and already members of a union other than the majority at the time the union shop agreement took effect; confidential employees who are excluded from the rank and file bargaining unit; and employees excluded from the union shop by express terms of the agreement. Rule

In the case at bar, the Union Shop Clause applies to all new employees. Meaning, it includes the newly-regularized employee. Hnce, he is covered by the Union Shop Clause. There is no ground for him to be exempted from the application of the union security clause. Apply

Thus, the newly-regularized employee of Nagrab Corporation cannot refuse to join Nagrab Union. Conclusion

(c) I would advise the human resources manager of Nagrab Corporation to proceed with enforcing the CBA provision on the absorbed employees and the newly-regularized employee. I would remind here that the union shop clause is valid, binding, and enforceable. I would explain to her that the Supreme Court, through various labor law cases, held that union shop clauses are not a restriction on the worker’s right to self-organization.

•••••

3. Signing, posting, registration

4. Term of CBA, freedom period

a) 5-year term

Representation aspect. Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five-year term of the Collective Bargaining Agreement. (Article 265, Ibid.)

Same; 60-day freedom period. Another union may file a petition for certification election within the last sixty (60) days prior to the date of expiration of the five-year term of the Collective Bargaining Agreement. (Ibid.)

b) 3-year term

 All other provisions.All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. (Ibid.)

If within the 6-month from date of expiration of term/provision of CBA.Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day immediately following such date. (Ibid.)

Same; If agreed to after 6 months.If any such agreement is entered into beyond six months, the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the Collective Bargaining Agreement, the parties may exercise their rights under this Code. (Ibid.)

•••••

BAR EXAM QUESTION

(Question B.15[b], Part II, Labor Law, 2019 Bar Exam)

On December 1, 2018, GHI Co., an organized establishment, and Union J, the exclusive bargaining agent therein executed a five (5)-year collective bargaining agreement (CBA) which, after ratification, was registered with the Bureau of Labor Relations.

(a) When can the union ask, at the earliest, for the renegotiation of all terms of the CBA, except its representation aspect? Explain. (2.5%)

(b) When is the earliest time that another union can file for a petition for certification election? Explain. (2.5%)

SUGGESTED ANSWER:

(a) Except for the representation aspect, all other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution.

(b) At least sixty (60) days immediately preceding the date of expiry of the five-year term of the Collective Bargaining Agreement, is the earliest time that another union can file for a petition for certification election.

•••••

Disclaimer: All information herein is for educational and general information only intended for those preparing for the bar exam. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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