3. Collective Bargaining Agreement

Collective Bargaining Agreement (CBA)

A contract executed upon request of either the employer or the exclusive bargaining representative of the employees, incorporating the agreement reached after negotiations with respect to the following:

• Wages;
• Hours of work; and
• All other terms and conditions of employment, including proposals for adjusting any grievance or questions under the agreement (Davao Integrated Port Stevedoring Services v. Abarquez, G.R. No. 102132, 1993)

Note: CBA constitutes the law between the parties when freely and voluntarily entered into. The goal of collective bargaining is the making of agreements that will stabilize business conditions and fix fair standards of working conditions. (PI Manufacturing Inc. v. PI Manufacturing Supervisors and Foremen Associations, G.R. No. 167217, 2008)

Registration of Collective Bargaining Agreements

Where to file

With the Regional Office which issued the certificate of registration/certificate of creation of chartered local.

If the certificate of creation of the chartered local was issued by the Bureau, the agreement shall be filed with the Regional Office which has jurisdiction over the place where it principally operates.

Multi-employer collective bargaining agreements shall be filed with the Bureau (Sec. 1, Rule XVII of D.O. 40-03).

Requirements for registration

The application for CBA registration shall be accompanied by the original and 2 duplicate copies of the following documents:

• CBA
• A statement that the CBA was posted in at least 2 conspicuous places in the establishment concerned for at least 5 days before its ratification.
• Statement that the CBA was ratified by the majority of the employees in the bargaining unit.

Note: The foregoing documents must be certified under oath by the representative of the employer and the labor union. No other document shall be required in the registration of the CBA (Sec. 2, Rule XVII of D.O. 40-03).

Denial of Registration; Grounds of Appeal

• The denial shall be in writing, stating in clear terms the reason therefore and served upon the applicant union and employer within 24 hours from issuance.
• The denial by the Regional Office of the registration of single enterprise collective bargaining agreements may be appealed to the Bureau while the denial by the Bureau of the registration of multi-employer collective bargaining agreements may be appealed to the Office of the Secretary, both within 10 days from receipt of the notice of denial.
• The memorandum of appeal is filed with the Regional Office or the Bureau, as the case may be.
• The memorandum of appeal and the entire records of the application shall be transmitted to the Bureau or the Office of the Secretary within 24 hours from receipt of the memorandum of appeal.
• Bureau or the Office of the Secretary shall resolve within the same period and in the same manner as that prescribed for inter/intra-union disputes (Sec. 5, Rule XVII of D.O. 40-03).

CBA provision vis-à-vis overtime work

CBA may stipulate higher overtime pay rate.

The basis of computation of overtime pay beyond that required by Art. 87 of the Labor Code must be the collective agreement. It is not for the court to impose upon the parties anything beyond what they have agreed upon which is not tainted with illegality. On the other hand, where the parties fail to come to an agreement, on a matter not legally required, the court abuses its discretion when it obliges any of them to do more than what is legally obliged. (PNB v. PNB Employee’s Assoc., G.R. No. L-30279, 1982)

Suspension of CBA

The right to free collective bargaining includes the right to suspend it. The act of the exclusive bargaining agent of voluntarily entering into the CBA with the employer and its act of voluntarily opting for the 10-year suspension of the CBA both constitutes as valid exercise of the union’s right to collective bargaining. The act of sanctioning the 10-year suspension the CBA did not contravene the "protection to labor" policy of the Constitution. The agreement afforded full protection to labor; promoted the shared responsibility between workers and employers; and the exercised voluntary modes in settling disputes, including conciliation to foster industrial peace. (Rivera v. Espiritu, G.R. No. 135547, January 23, 2002)

Requisites for Contract-Bar Rule

• Agreement is existing;
• Ratified by the union membership;
• CBA must be registered;
• It is adequate for it contains substantial terms and conditions for employment;
• It encompasses the employees in the appropriate bargaining unit;
• It was not prematurely extended; the CBA was not hastily entered into;
• It is for a definite period;
• No schism or mass disaffiliation affects the contracting union during the lifetime of the agreement;
• The contracting union is not defunct; and
• The contracting union is not company-dominated

Exceptions: The existence of a CBA will not bar certification election in the following instances:

• CBA is not registered
• CBA deregistered
• CBA is incomplete in itself
• CBA where the identity of the representative is in doubt (Associated Labor Unions v. Hon. Ferrer-Calleja, G.R. No. 85085, 1989)
• CBA was hastily entered into, i.e. signed before the freedom period (Associated Trade Unions-ATU v. Hon. Noriel, G.R. No. L48367, 1979)
• CBA entered into between the employer and the union during the pendency for certification election (Vassar Industries EU v. Estrella, G.R. No. L-46562, 1978)
• CBA was concluded in violation of an order enjoining the parties from entering into a CBA until the issue of representation is resolved
• Referendum to register an independent union

Note: SONEDCO Workers Free Labor Union v. URC, G.R. No. 220383, October 5, 2016 URC-SONEDCO (URC) and PACIWU-TUCP (UNION 2) then the exclusive bargaining agent entered into a CBA in 2002 which expires in 2006. Days after the 2002 Collective Bargaining Agreement was signed, a certification election was conducted. SONEDCO Workers Free Labor Union (UNION 1) won and replaced PACIWUTUCP as the exclusive bargaining representative. Union 2 contested the results but the DOLE certified Union 1 as the new EBA. Despite several demand letters and CBA proposals, URC refused to bargain with Union 1.

Bargaining in Bad Faith Must Occur While Bargaining is in Process

With the execution of the CBA, bad faith can no longer be imputed upon any of the parties thereto. All provisions in the CBA are supposed to have been jointly and voluntarily incorporated therein by the parties. This is not a case where private respondent exhibited an indifferent attitude towards collective bargaining because the negotiations were not the unilateral activity of petitioner union. The CBA is proof enough that private respondent exerted “reasonable effort of good faith bargaining.” (Samahan Ng Manggagawa sa Top Form Manufacturing-United Workers of the Philippines v. NLRC, G.R. No. 13856, 1998)

A company's refusal to make counter-proposal, if considered in relation to the entire bargaining process, may indicate bad faith and this is especially true where the Union's request for a counter-proposal is left unanswered." Considering the facts of that case, the Court concluded that the company was "unwilling to negotiate and reach an agreement with the Union." (Kiok Loy v. NLRC, G.R. 54334, 1986).

Total Disregard of CBA Constitutes ULP

Reference to the economic provisions of the CBA is not a necessary element of ULP where the employer in effect totally disregarded the CBA. (Employees’ Union of Bayer v. Bayer Phil., G.R. No. 162943, 2010)

An employer should not be allowed to rescind unilaterally its CBA with the duly certified bargaining agent it had previously contracted with, and decide to bargain with a different group if there is no legitimate reason for doing so and without first following the proper procedure. (Employees’ Union of Bayer v. Bayer Phil., G.R. No. 162943, 2010)

NINTH ULP: VIOLATION OF THE CBA (ART. 259 [I])

See above discussion on Fourth Form of ULP in Bargaining.

Note: Under Art. 259, simple violation of the collective bargaining agreement is no longer treated as unfair labor practice but as mere grievance, which should be processed through the grievance machinery in the CBA. It becomes an unfair labor practice only when it is gross in nature, which means that there is flagrant and/or malicious refusal to comply with the economic provisions of such agreement by either the employer or the union.

In the case of Master Union Labor Union v. NLRC, (G.R. No. 92009, 1993), Master Iron Works Construction Corporation’s insistence that the hiring of casual employees is a management prerogative betrays its attempt to coat with legality the illicit curtailment of its employees’ right to work under the terms of the contract of employment and to a fair implementation of the CBA.