● 4.

2 Sub-Minimum CBA: CBAs cannot set terms below legally

CHAPTER IX: COLLECTIVE BARGAINING NEGOTIATIONS AND established standards, especially for minimum wages, which
AGREEMENT are non-negotiable (Phil. Am. Mgmt. v. Phil. Am. Ees. Assn.).
● 4.3 Required Provisions: CBAs must contain grievance
procedures, family planning, "no strike-no lockout" clauses,
A. Collective Bargaining and Negotiations cooperative schemes, and a Labor Management Council
(LMC). Disputes under the exclusive jurisdiction of the
1. Collective Bargaining, Defined Voluntary Arbitration (VA) must be directed to the CBA’s
Grievance Machinery or VA, as mandated by Art. 261 (now
● Collective bargaining is a structured negotiation process 273), Labor Code.
between an employer and the exclusive bargaining agent of a
unit, focusing on wages, work hours, and other employment
5. Bargaining Representative
terms. This definition aims to establish a labor contract.

5.1 Exclusive Representative: The labor organization chosen by the

2. Nature of Collective Bargaining
majority within the bargaining unit is the exclusive representative for
collective bargaining. Case Reference: Militante v. NLRC, 246 SCRA 365
● 2.1 Collective bargaining is a democratic, stabilizing tool under (1995).
the Labor Code, fostering stable relations and industrial peace.
Both the employer and union share this responsibility, making it
● 5.1.1 Only employees, not employers, can designate a union as
legally required to negotiate in good faith. Art. 263 (g) states
their exclusive representative (Samahang Manggagawa sa
that refusing to negotiate in good faith constitutes an unfair
Permex v. Secretary of Labor, 286 SCRA 692 [1998]).
labor practice (ULP).
● 2.2 Bargaining isn’t adversarial, unlike litigation. It’s meant to
5.2 Union Representation: The union representative can be external, but
resolve conflict and reach a fair compromise (Caltex Refinery
a union officer must be an employee within the company’s bargaining unit
Employees Association v. Brillantes).
(Rule III, Sec. 4(f) of PD 1391).

3. Duty to Bargain Collectively

5.3 Personal Interests: Unions can represent members but cannot
override personal decisions related to individual matters (Caltex Refinery
● Art. 251, Labor Code: Bargaining collectively means that both
Employees Association v. Brillantes, 279 SCRA 218 [1997]).
parties must meet in good faith for agreements on employment
terms. However, this does not obligate either party to agree or
5.4 Validity of CBA: A collective bargaining agreement (CBA) is void if
make concessions.
the union wasn’t court-certified as the employees’ chosen representative
● Art. 253, Labor Code: If there is an existing Collective
(Binalbagan-Isabela Sugar Co., Inc. v. PAFLU, 8 SCRA 700 [1963]).
Bargaining Agreement (CBA), neither party should alter it 60
days before its expiration. Both sides must maintain the current
terms until a new agreement is reached. 6. Scope of Bargaining Agent's Representation
● 3.1 Mutual Duty: Both the employer and employees'
representatives must negotiate collectively (Oriental Tin Can 6.1 Broad Representation: The bargaining representative covers all
Labor Union v. Secretary of Labor). employees in the unit, not just union members (Mactan Workers Union v.
○ 3.1.1 Neither side is forced to agree or concede Aboitiz, 45 SCRA 577 [1972]).
(Article 253).
○ 3.1.2 Bargaining does not ensure an agreement will 6.2 Non-Discrimination: CBA benefits extend to all employees,
be reached (Union of Filipro Employees v. Nestle regardless of union membership, to prevent discrimination (National
Philippines). Brewery & Allied Industries Labor Union of the Philippines v. San Miguel
● 3.2 Duty Based on Majority Representation: An employer Brewery, Inc., 8 SCRA 805 [1963]).
must negotiate only if the bargaining agent represents the
majority. The employer may request proof of this, provided it’s in
7. Grievance Machinery
good faith and not a delay tactic (Lakas Manggagawa v.
Marcelo).
7.1 Grievance Procedure Purpose: This process is a part of collective
● 3.3 Principle of Collective Responsibility: Good faith
bargaining aimed at facilitating labor-management dialogue for industrial
bargaining allows the employer to rely on union representatives'
peace (Republic Savings Bank v. CIR, 21 SCRA 226 [1967]).
commitments (Heirs of Teodolo M. Cruz v. Court of Industrial
Relations).
● 3.4 CBA Continuity (Art. 253): If a CBA exists, neither side 7.2 Binding Nature: Grievance handling procedures in the CBA are
can terminate it mid-term. They may send a notice of intent to mandatory for both parties (Elizalde Rope Factory, Inc. v. CIR, 8 SCRA 67
change it 60 days before expiration, but existing terms remain [1963]).
active until a new CBA is settled (Lopez Sugar Corporation v.
FFW). 7.3.1 ULP for Refusal: Ignoring grievance procedures is an unfair labor
practice (ULP), viewed as a refusal to bargain collectively.
4. Mandatory Aspects of Bargaining
7.4 Exhaustion of Grievance Steps: All grievance and arbitration steps
● 4.1 Topics like wages, hours, and work conditions must be in the CBA must be completed. A strike is illegal if it occurs without
included in negotiations. adhering to these procedures (San Miguel Corp. v. NLRC, 304 SCRA 1
[1999]).

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7.5 Proper Grievance Issues: Grievance procedures cover disputes on 10.2 Lack of Counter-Proposals as Bad Faith: A company's refusal to
CBA interpretation or implementation, not disciplinary code violations submit counter-proposals suggests a lack of genuine intent to negotiate,
(Navarro III v. Damasco, 246 SCRA 260 [1995]). which is a breach of Article 250 of the Labor Code and constitutes an
unfair labor practice (Colegio De San Juan De Letran v. Association of
8. Unfair Labor Practices (ULP) in Collective Bargaining Employees and Faculty of Letran, 340 SCRA 587, 2000).

● a. Bargaining in Bad Faith: Engaging without genuine intent to These principles emphasize that genuine negotiation requires active
reach an agreement. participation and sincere attempts to reach mutual agreements, with any
● b. Refusal to Bargain: Outright refusal to engage in outright refusal seen as a violation of good-faith bargaining.
bargaining.
● c. Individual Bargaining: Negotiating directly with employees 11. Violations of CBA No Longer ULP
instead of through the union (Insular Life Assurance Co. v.
Insular Life Ass. Co. Ltd., 76 SCRA 50). Under the Labor Code, violations of a Collective Bargaining Agreement
● d. Gross Violation of CBA Provisions: Serious breaches of (CBA) are generally not considered an unfair labor practice (ULP), except
agreed-upon terms in the CBA. when the violation is "gross" in nature. Non-gross violations are treated as
grievances, meaning they should be resolved according to the grievance
Each of these actions undermines the collective bargaining process and procedures specified within the CBA itself (Silva v. NLRC, 274 SCRA 159,
can be considered an unfair labor practice (ULP) as it disrupts the legal 1997).
framework established for employer-employee negotiations.
12. Individual Bargaining Explained
9. Bargaining in Bad Faith
Definition and Prohibition: Employers cannot bypass the union and
9.1 Presumption of Good Faith: Good faith is assumed in collective negotiate directly with individual employees when a union represents
bargaining. Anyone alleging bad faith must provide proof (Central them in collective bargaining. Doing so undermines the union's role and is
Azucarera De Bais Employees Union-NFL v. Central Azucarera De Bais, considered an unfair labor practice. In Insular Life Assurance Co. v.
Inc., G.R. No. 186605, 2010). Insular Life Assurance Co., Ltd., Employees-NATO, the employer’s direct
communication with strikers, offering benefits to return to work, was ruled
9.2 Good Faith Determination: Good or bad faith is judged from the an unfair labor practice. The Supreme Court emphasized that such
overall conduct of both parties during bargaining, rather than isolated actions compromise the collective bargaining process and constitute
actions (General Milling Corp. v. Court of Appeals, G.R. No. 146728, interference in union activities.
2004).
Freedom of Speech Limitation: While employers have freedom of
9.3 Objective of Bargaining: The goal is to reach a binding agreement, speech, they cannot use it to promise benefits or threaten employees, as
but failing to agree after reasonable negotiation doesn’t prove bad faith. this may coerce them to undermine the union’s stance. Such
The law encourages bargaining but doesn’t require a final agreement communications, if they aim to weaken the strike or encourage individual
(Samahang Manggagawa sa Top Form Manufacturing v. NLRC, G.R. No. returns to work, are seen as violations of good faith in collective
113856, 1998). bargaining.

9.4 Impasse Not Indicative of Bad Faith: Persisting on a bargaining 13. Deadlock in Collective Bargaining
position to an impasse doesn’t imply bad faith unless the position is trivial
or unreasonable (Divine Word University of Tacloban v. Secretary of Definition: A collective bargaining deadlock occurs when negotiations
Labor, G.R. No. 91915, 1992). between labor and management reach a complete stalemate, with no
agreement on terms despite all efforts. This "stoppage" results from
9.5 Lump Sum Proposal: Offering a lump sum instead of a wage opposing and equal forces unable to reach a compromise (San Miguel
increase is not inherently bargaining in bad faith, as long as negotiations Corp. v. NLRC). A deadlock implies a complete blocking or halt in
were sincerely attempted on other issues. The duty to bargain does not negotiations, often requiring mediation or arbitration to move forward
compel acceptance or concession (Tabangao Shell Refinery Employees (Capitol Medical Center Alliance of Concerned Employees v. Laguesma,
Association v. Pilipinas Shell Petroleum Corp., G.R. No. 170007, 2014). 267 SCRA 503, 1997).

10. Refusal to Bargain These explanations outline key restrictions and conditions within collective
bargaining, emphasizing the role of good faith negotiation and respect for
Refusal to bargain in good faith violates the duty to collectively bargain. If union representation in the bargaining process.
an employer refuses, the union's CBA draft may be imposed as binding
(Divine Word v. Secretary of Labor, 213 SCRA 759, 1992). In Kiok Loy v. 14. Definition of Collective Bargaining Agreement (CBA)
NLRC (141 SCRA 179, 1986), the Court ruled that a refusal to make
counterproposals, especially when requested by the union, signifies bad A Collective Bargaining Agreement (CBA) is a negotiated contract
faith. between a legitimate labor organization and the employer. It outlines
wages, working hours, and other employment terms in a bargaining unit,
10.1 Secretary of Labor's Authority: When an employer unjustly refuses as mandated by Dept. Order No. 9 and Implementing Rules and
to bargain, the Secretary of Labor can grant wage increases to resolve Regulations. Additionally, CBAs must include provisions for grievance and
the dispute (San Pedro Hospital of Digos v. Secretary of Labor, 263 SCRA arbitration processes.
98, 1996).

2
 ● Essence of CBA: The CBA incorporates the terms agreed 16.2 Types of Union Security Clauses
upon after negotiations, including adjustments for grievances
and questions under the agreement (Davao Integrated Port ● Closed Shop: Only union members may be employed, and
Stevedoring Services v. Abarquez, 220 SCRA 197 [1993]). they must remain members to retain employment.
● Scope: Benefits under a CBA only apply to employees within ● Union Shop: New hires must join the union within a specific
the bargaining unit (Castro v. PLDT, 678 SCRA 730 [2012]). period to remain employed.
● Continuous Nature: CBA execution is not the end of ● Maintenance of Membership Shop: Employees who join the
bargaining but part of a continuous process (Republic Savings union must maintain membership as a condition of employment.
Bank v. CIR, 21 SCRA 226 [1967]). ● Open Shop: Employees may choose not to join the union but
may be required to join later.
15. CBA as a Contract ● Agency Shop: Non-union employees pay fees equivalent to
union dues since they benefit from union representation.
A Collective Bargaining Agreement is legally binding for both parties
and is backed by law. 16.3 Coverage

● Interpretation of CBA Provisions: In cases where CBA Union shop clauses generally apply to all employees in the bargaining
wording conflicts with the evident intent of the parties, intent unit, with exceptions for:
should take precedence (Kimberly Clark Philippines v. Lorredo,
226 SCRA 639 [1993]). ● Members of religious organizations that prohibit union
● Proposal Absence: Proposals not included in the CBA are not membership.
enforceable, as they remain unratified (Samahang ● Employees already in another union at the time of the
Manggagawa sa Top Form Manufacturing v. NLRC, 295 SCRA agreement.
171 [1998]). ● Confidential employees or others excluded by specific terms in
● Limited Scope: CBAs do not bind non-parties (E. Razon, Inc. v. the CBA.
Sec. of Labor and Employment, 222 SCRA 1 [1993]).
16.4 Absorbed Employees in Mergers
Case Summaries on CBA Interpretation
In a merger, "absorbed" employees are considered new hires under union
1. No Negative Data Bank (No NDB): Supreme Court ruled that shop clauses unless expressly excluded. The Supreme Court ruled that
imposing the "No NDB" condition violated the CBA, as it absorbed employees must comply with union membership requirements
introduced a new, unreasonable condition not agreed upon in (BPI v. BPI Employees Union-Davao Chapter, G.R. No. 164301, 2010).
the original CBA terms (BPI v. BPI Employees Union-Metro
Manila, G.R. No. 175678 [2012]).
2. Funeral and Bereavement Aid: The term "legal dependent" in 16.5 Discharge and Article 248(e) of the Labor Code
CBA for funeral aid includes anyone truly reliant on the
employee, regardless of marital status, thus entitling married The clause is viewed cautiously when it restricts existing employees'
employees to bereavement aid for parents as well (Philippine union freedom. Article 248(e) protects employees already in other unions
Journalist, Inc. v. Journal Employees Union, G.R. No. 192601 from mandatory membership in a new union under a CBA.
[2013]).
3. Double Insurance Claims: An employer is not liable to 16.6 Employer's Obligation
reimburse hospital expenses already covered by another Health
Maintenance Organization (HMO), as CBAs are strict contracts For union membership to be grounds for employment termination, the
that do not allow double claims for the same expenses CBA must clearly and unequivocally state this requirement (Rizal Labor
(Mitsubishi Motors Phils. Salaried Employees Union v. Union v. Rizal Cement Co., Inc.).
Mitsubishi Motors Phils Corp., G.R. No. 175773 [2013]).

17. Check-Offs of Union Dues, Special Assessments, and Agency Fees

16. UNION SECURITY CLAUSE
17.1 Union Dues: Nature and Requirements Union dues are regular
This clause ensures that employees are required to acquire or retain monthly payments required from union members, which support union
union membership as a condition of their employment. It encompasses activities, member benefits, and other union services. Under Article 277 of
arrangements such as closed shop, union shop, and maintenance of the Labor Code, unions can collect fees for various needs like labor
membership. This is to promote collective bargaining strength, preventing education, welfare funds, and strike funds.
individual employees from negotiating separately, which could weaken the
union's impact (PICOP Resources, Inc. v. Taneca, G.R. No. 160828, 17.2 Requirements for Special Assessments For a union to impose a
2010). special assessment (e.g., for attorney’s fees or expenses), three
conditions under Article 241(n) and (o) of the Labor Code must be met:
16.1 Purpose
● A written resolution approved by the majority during a general
Union security clauses support state policies that promote unionism, membership meeting.
enabling workers to negotiate collectively on a level playing field with ● Secretary-recorded minutes of the meeting.
management. This promotes unity in addressing workplace concerns and ● Each member’s individual written authorization for the
strengthens the union's role in employee advocacy (Liberty Flour Mills check-off.
Employers v. Liberty Flour Mills, Inc., 1989).

3
Employees who do not sign a check-off authorization cannot have expiration, benefits and wage increases apply retroactively to the day
deductions made from their wages. Additionally, only a resolution from all after the previous CBA expired.
members, not just board directors, can authorize such deductions.
20.2 Retroactivity After Six Months
17.3 Agency Fee Assessment Requirements For non-union members If the new CBA is signed more than six months after the previous CBA
in the bargaining unit who benefit from the CBA: expired, retroactivity must be mutually agreed upon by the parties.

● They must be part of the bargaining unit. 20.3 Arbitral Awards and Retroactivity
● They should not belong to the union. CBAs arising from arbitration may also have retroactive effect, though this
● They receive CBA benefits. No written authorization is needed is not explicitly required by Article 253(A) (as interpreted in Manila Central
to collect agency fees, to prevent “free-riders.” Article 248(e) Line Corporation v. Manila Central Line Free Workers Union).
outlines that assessing non-members who gain from the CBA
does not require individual authorization, thus ensuring fair 21. Expiration of a CBA
contribution from all benefiting employees.
21.1 Continued Legal Effect
18. CBA Registration and the Freedom Period Even after a CBA expires, it remains in effect between the parties until a
new CBA is established (Pier 8 Arrastre & Stevedoring Services, Inc. v.
18.1 Registration's Role in Preventing Certification Elections Roldan-Confesor).
Registering a CBA prevents certification elections during its effective
period, except within the "freedom period" (usually 60 days before the 21.2 Recognition of Union’s Majority Status
CBA’s expiration). However, an unregistered CBA remains valid and After the five-year representation period, the employer must continue
binding, though it does not block certification election petitions. recognizing the incumbent union’s majority status if no certification
election is requested (Article 267, last paragraph, Labor Code).
18.2 Arbitration Awards as Bars to Certification Elections A Certified
Arbitration Agreement (CRA) or arbitral award doesn’t need BLR In summary, CBAs establish a structured term for union representation
certification to bar a certification election, as it is already enforceable and economic provisions, specify retroactive application of benefits, and
between parties. outline conditions for maintaining or challenging union representation over
time.
This summary covers the key legal stipulations for union dues, special
assessments, agency fees, and CBA registration, per the Labor Code.

19. Duration of the CBA (Article 253[A], Labor Code; DOLE Dept. Order Key Terms and Their Definitions
No. 9)
Collective Bargaining Agreement (CBA): A formal contract between an
19.1 CBA Term and Economic Provisions employer and a union representing the employees, detailing the terms
The Labor Code stipulates that CBAs have a five-year term regarding the and conditions of employment, such as wages, hours, and other work
representation status of the bargaining agent. This means: conditions.

● Representation Aspect: Unions maintain representation for Union Dues: Regular, often monthly, fees collected by a union from its
five years, barring any challenges outside the 60-day "freedom members to fund union activities, benefits, and services.
period" prior to the expiration of this term.
● Economic Provisions: These (e.g., wages) must be Special Assessment: An additional fee charged by the union to its
renegotiated every three years after the CBA is signed (DOLE members, usually for specific purposes like covering legal fees or
Dept. Order No. 9, Rule XIV, Sec. 3). representation costs.

19.2 Contract-Bar Rule and Exceptions Agency Fee: A fee charged to non-union members within a
The CBA prevents certification elections during its five-year term, except: union-represented bargaining unit who benefit from the collective
bargaining agreement. This prevents "free-riders" who gain benefits
● If any provision in the CBA does not meet legal standards, or without paying dues.
● If its registration documents are proven falsified or
misrepresented (DOLE Dept. Order No. 9, Rule XIV, Secs. 3-4). Check-Off: A process by which an employer automatically deducts union
dues, special assessments, or agency fees from an employee's paycheck,
19.3 Limitations on Extending Representation Terms with the employee’s authorization.
The Supreme Court ruled in FVC Labor Union - PTGWO v.
Sama-Samang Nagkakaisang Manggagawa sa FVC-SIGLO that the Representation Status: The legal recognition of a union as the exclusive
five-year limit on union representation is mandatory. Any CBA extension representative of all employees in a bargaining unit for purposes of
beyond five years will not extend the union’s exclusive bargaining rights. collective bargaining.

20. Automatic Retroactivity of CBA Benefits (Article 253[A]) Certification Election: A formal process conducted by the Department of
Labor and Employment (DOLE) to determine which union will represent a
20.1 Retroactivity Within Six Months specific group of employees.
When a new CBA is signed within six months after the prior CBA's

4
Freedom Period: The 60-day period before a CBA’s five-year term ends,
during which a petition can be filed to challenge the union's
representation.

Contract-Bar Rule: A rule that prohibits the filing of a certification election

petition for the duration of the CBA’s five-year term, except during the
freedom period.

Deadlock: A situation in bargaining negotiations where both parties

(employer and union) cannot reach an agreement on terms.

Arbitral Award: A decision issued by an arbitrator or a panel, often

related to labor disputes, which can serve as the terms of a CBA if parties
cannot agree on their own.

Majority Status: The condition of a union being recognized as the

representative of the majority of employees in a bargaining unit, giving it
exclusive bargaining rights.

Exclusive Bargaining Agent: The union or representative authorized by

the majority of employees in a bargaining unit to negotiate with the
employer on their behalf.

Mutual Agreement: A decision or contract terms agreed upon by both the

employer and the union without coercion.

Retroactivity: The application of new contract terms, such as wage

increases, starting from an earlier date, typically the date of the previous
CBA’s expiration.

Voluntary Arbitrator: A neutral third-party individual agreed upon by both

parties (employer and union) to resolve disputes and negotiate contract
terms.

DOLE Dept. Order No. 9: An order from the Department of Labor and
Employment that outlines the rules and procedures for collective
bargaining agreements and other labor matters.

Union Fund: The pool of resources collected from union dues and
assessments, used for union activities and member benefits.

Incumbent Bargaining Agent: The current union or group that

represents employees in a bargaining unit at the time of a CBA.

Labor Code: The legal framework governing employment and labor

relations in the Philippines, including rules on CBAs, union rights, and
employer obligations.

Unfair Labor Practice: Actions by employers or unions that violate

employees’ rights or interfere with their ability to organize and bargain
collectively.