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SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING UNITED WORKERS OF PHILIPPINES v. NLRC

FACTS:

The first case involves Top Form Manufacturing Philippines, Inc. (TFMPI) and its certified collective bargaining representative, the union. During a collective bargaining negotiation, the union proposed that future government-mandated wage increases should be implemented by the company on an across-the-board basis. The company initially agreed but later refused to implement across-the-board increases when Wage Orders were issued. The union filed a complaint with the NLRC alleging unfair labor practices and violation of the Labor Code.

In the second case, the Philippine Airlines Employees Association (PALEA) was the exclusive bargaining representative of the ground employees of Philippine Airlines (PAL). PALEA filed a complaint against PAL for unfair labor practices and violation of the Collective Bargaining Agreement (CBA). PALEA alleged that PAL implemented wage orders unevenly and failed to implement wage increases across the board. The complaint was dismissed by the Labor Arbiter, and PALEA appealed to the NLRC, which also dismissed the appeal. PALEA filed a petition for certiorari before the Supreme Court, raising multiple issues for consideration.

ISSUES:

  1. Whether or not private respondent committed an unfair labor practice in its refusal to grant across-the-board wage increases in implementing Wage Orders Nos. 01 and 02.

  2. Whether private respondent committed acts of unfair labor practices by not granting across-the-board wage increases as proposed by petitioner union.

  3. Whether private respondent violated the provisions of Section 5, Article VII of the existing Collective Bargaining Agreement (CBA) and Article 100 of the Labor Code.

  4. Whether or not a wage distortion exists due to the implementation of Wage Orders Nos. 01 and 02 by the private respondent.

RULING:

  1. The court held that private respondent did not commit an unfair labor practice in refusing to grant across-the-board wage increases. The alleged commitment of private respondent to grant an automatic across-the-board wage increase was not incorporated in the Collective Bargaining Agreement (CBA). Without such incorporation, the proposal does not form part of the CBA and the proponent has no claim to its implementation.

  2. No, private respondent did not commit acts of unfair labor practices. The proposal for across-the-board wage increases was deferred and not included in the CBA. The execution of the CBA indicates that private respondent bargained in good faith and exerted reasonable effort. The adamant insistence on a bargaining position that reaches an impasse does not establish bad faith. Private respondent's firm stand against the proposal does not mean it was bargaining in bad faith or discriminating against its employees.

  3. No, private respondent did not violate the provisions of the CBA and the Labor Code. The CBA provision only requires private respondent to comply with all applicable provisions of the Labor Code and other laws, but it does not specifically require across-the-board wage increases. As for Article 100 of the Labor Code, no benefits or privileges previously enjoyed by petitioner union and other employees were withdrawn by private respondent's implementation of the wage orders.

  4. The Supreme Court upheld the ruling of the National Labor Relations Commission (NLRC) that no wage distortions marred the private respondent's implementation of the wage orders. The NLRC's decision was supported by substantial evidence and devoid of any taint of unfairness or arbitrariness. The Court accorded respect and even finality to the factual findings of the NLRC, as long as its decisions are supported by substantial evidence. The Court agreed with the NLRC that there was a meaningful implementation of the wage orders, debunking the claim of wage distortion. The petition for certiorari was dismissed, and the NLRC's resolutions were affirmed.

PRINCIPLES:

  • The CBA is the law between the contracting parties and should be complied with. CBA provisions should be construed liberally, giving due consideration to the context in which it was negotiated and the purpose it is intended to serve.

  • Proposals raised by a contracting party that do not find print in the CBA are not part of the agreement and cannot be demanded for implementation.

  • Promises made during collective bargaining negotiations are not binding until incorporated in the CBA, and the proponent has the opportunity to insist on the fulfillment of the promise by demanding its incorporation.

  • The purpose of collective bargaining is to reach an agreement resulting in a contract binding on the parties. The failure to reach an agreement after negotiations does not establish a lack of good faith.

  • The duty to bargain does not include the obligation to reach an agreement. Parties have the right to insist on their position to the point of stalemate.

  • The question of mandatory and permissive subjects of collective bargaining is significant in determining the right of a party to insist on their position. A refusal to contract on a matter that is not a mandatory subject is a refusal to bargain about mandatory subjects.

  • In determining bad faith bargaining, the insistence on a particular substantive provision is not enough unless it concerns trivial matters or is obviously intolerable.

  • The implementation of wage orders pursuant to law does not constitute unfair labor practices if there was no contractual commitment on the matter.

  • The determination of whether or not a wage distortion exists is a question of fact within the jurisdiction of the quasi-judicial tribunals, and their factual findings are accorded respect and even finality if supported by substantial evidence.

  • Judicial review of labor cases does not go beyond the evaluation of the sufficiency of the evidence, and the conclusions derived from the evidence. The court does not interfere with the factual findings of the labor tribunal unless there is a lack of substantial evidence or taint of unfairness or arbitrariness.

  • The Supreme Court is guided by the State policy of protecting the rights and promoting the welfare of workers and attaining industrial peace by the proper application of the law. The court does not favor one party over the other if there is no valid support for their claims. The court's power is limited to ruling within the ambit of the law.