Balmar Farms, Inc. vs. National Labor Relations Commission

An employer commits unfair labor practice under Article 248(g) of the Labor Code when it refuses to bargain collectively with the union certified as the sole and exclusive bargaining representative of its rank and file employees, where the alleged disaffiliation of the employees rests on a mere letter that the labor office never acted upon and no order superseded the certification.

BALMAR Farms, Inc. is a corporation engaged in the planting of bananas at Kapalong, Davao del Norte, with its address at 60 V. Mapa St., Davao City, while the Associated Labor Unions is a labor organization duly registered with the Ministry of Labor and Employment with a regional office in Davao City. Under the Labor Code, the labor organization selected by the majority of the employees in an appropriate bargaining unit becomes their exclusive representative for collective bargaining, and an employer's violation of the duty to bargain with that representative is an unfair labor practice. The case tests that statutory duty where a rival employees' group claims to have withdrawn its support from the certified union.

BALMAR Farms, Inc. is a corporation engaged in the planting of bananas with operations at Kapalong, Davao del Norte, while the Associated Labor Unions is a labor organization registered with the Ministry of Labor and Employment. On October 19, 1982, a certification election was held at the premises of BALMAR, and ALU obtained the majority of the votes cast. On October 27, 1982, Med-Arbiter Antonino G. Jolejole issued an order certifying ALU as the sole and exclusive bargaining representative of the rank and file workers and employees of BALMAR at Kapalong, Davao del Norte.

Sometime in November 1982, BALMAR received a copy of a letter dated November 12, 1982 signed by Johnny Y. Luces in his capacity as President of the BALMAR Employees Association and addressed to Regional Director Eugenio Sagmit, Jr. The letter stated that after discussing the matter among themselves, more than a majority of the employees had agreed to disregard ALU in representing them; that they had no collective bargaining agreement at present; that they were in a better position to negotiate directly with management for their working conditions, being aware of their basic needs; and that they were filing the letter with the Regional Office so that it could help in requesting BALMAR to negotiate directly with them and not through ALU.

On February 8, 1983, ALU sent BALMAR a letter attaching its proposals for a collective bargaining agreement. On February 25, 1983, BALMAR replied that it could not favorably act on the request for the reason, among others, that it had been furnished a copy of the letter of Johnny Luces, president of the Balmar Farms Employees Association, addressed to the Regional Director of the Ministry of Labor and Employment, about their disaffiliation from ALU. In another letter dated March 1, 1983, ALU answered BALMAR's letter and requested that it be recognized as the bargaining representative, it being certified by the Ministry of Labor and Employment as the sole and exclusive bargaining representative of BALMAR's rank and file workers. On March 10, 1983, BALMAR replied that management had been requested by the Balmar Farms Employees Association to negotiate with them directly and not with ALU because ALU had been dis-authorized as the agent of the BALMAR employees, and further contended that ALU had to disprove the dis-authorization, for only then could BALMAR negotiate with ALU.

For alleged refusal to bargain, ALU filed a complaint for unfair labor practice and damages against BALMAR, docketed as NLRC Case No. 1114-LR-XI-83. The Labor Arbiter required the parties to submit their position papers; ALU filed its position paper dated May 18, 1983, while BALMAR filed its position paper dated May 20, 1983. On the basis of those position papers, Labor Arbiter Potenciano S. Canizares, Jr. rendered a decision dated March 13, 1984 declaring BALMAR guilty of the unfair labor practice acts complained of, ordering it to cease and desist from further committing unfair labor practice acts, ordering it to bargain collectively in good faith with ALU, and dismissing the claim for damages for lack of merit. BALMAR appealed to the NLRC by filing a Memorandum on Appeal, and on July 31, 1985 the NLRC rendered a resolution dismissing the appeal for obvious lack of merit and affirming the appealed decision en toto. BALMAR moved for reconsideration on September 4, 1985, and on October 4, 1985 the NLRC issued a resolution denying the motion. Both tribunals proceeded from the same factual footing: ALU had been certified after winning the certification election, and no order had ever superseded that certification.

• Disaffiliation of the Employees: BALMAR maintained that it could not favorably act on ALU's request for collective bargaining because it had been furnished a copy of the November 12, 1982 letter of Johnny Y. Luces, president of the Balmar Farms Employees Association, informing the Regional Director that more than a majority of the employees had disaffiliated from ALU and wanted to negotiate directly with management.
• Burden on ALU to Disprove Disauthorization: BALMAR contended that ALU had to disprove the dis-authorization before BALMAR could be required to negotiate with it.

• Unfair Labor Practice — Refusal to Bargain Collectively: Whether BALMAR is guilty of unfair labor practice for refusing to bargain collectively with ALU.

• Unfair Labor Practice — Refusal to Bargain Collectively: Yes. BALMAR violated the duty to bargain collectively under Article 248(g) of the Labor Code, ALU having remained the certified sole and exclusive bargaining representative and the alleged disaffiliation never having been acted upon nor the certification superseded.

• Unfair Labor Practice — Refusal to Bargain Collectively: The SC anchored the analysis on the certification election. On October 19, 1982, ALU obtained the majority of the votes cast in the election held at BALMAR's premises, and on October 27, 1982 Med-Arbiter Jolejole issued an order certifying ALU as the sole and exclusive bargaining representative of BALMAR's rank and file workers and employees. Citing Confederation of Citizens Labor Union (CCLU) vs. Noriel, National Association of Free Trade Union vs. Bureau of Labor Relations, PLUM Federation of Industrial and Agrarian Workers vs. Noriel, and Phil. Airlines Employees' Association (PALEA) vs. Ferrer-Calleja, the SC stressed that a certification election is the most democratic and expeditious method by which laborers can freely determine the union that shall act as their representative, the most effective way of determining which labor organization can truly represent the working force, and the means by which employees exercise their constitutional right to choose their own bargaining representative. The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit is the exclusive representative for collective bargaining, and at BALMAR that organization is ALU, which accordingly has the right and duty to bargain collectively with the company.

The SC then applied Article 252 of the Labor Code, defining the duty to bargain collectively as 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 grievances, if requested by either party, without compelling either party to agree to a proposal or to make any concession. Procedurally, ALU sent BALMAR a letter attaching its proposals for a collective bargaining agreement. BALMAR refused to negotiate, invoking the November 12, 1982 letter of Johnny Luces informing the Regional Director that more than a majority of the employees would like to negotiate directly with their employer. The SC found no showing that the letter was favorably acted upon, much less that any order had been issued superseding the Med-Arbiter's order of October 27, 1982 certifying ALU. Absent such an order, ALU's certification stood and BALMAR had no legal basis to refuse to deal with it.

BALMAR's plea of good faith failed. The SC adopted the Solicitor General's observation that BALMAR's pretense that a majority of its rank and file employees had disaffiliated, simply because of a letter it received to that effect, all the more sustained the finding of bad faith, since it is not for the employer to question which group is the collective bargaining representative of its rank and file employees. BALMAR's taking sides with the rank and file employees who allegedly disaffiliated rendered its stand on the matter highly suspicious. From these circumstances the SC inferred that BALMAR's refusal to bargain collectively with ALU was a clear act of unfair labor practice, Article 248 of the Labor Code enumerating among employer unfair labor practices the violation of the duty to bargain collectively as prescribed by the Code.

• Certification Election and the Exclusive Bargaining Representative — A certification election is the most democratic and expeditious method by which employees freely determine the union that shall represent them in dealing with the employer, and the labor organization selected by the majority in an appropriate bargaining unit becomes the exclusive representative for collective bargaining. ALU won the October 19, 1982 election and was certified on October 27, 1982, making it the exclusive representative of BALMAR's rank and file employees.
• Duty to Bargain Collectively (Art. 252, Labor Code) — The duty 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 grievances, if requested by either party; it does not compel any party to agree to a proposal or to make any concession. ALU discharged its side by sending its CBA proposals on February 8, 1983; BALMAR's refusal to meet and negotiate breached the obligation.
• Refusal to Bargain as Unfair Labor Practice (Art. 248[g], Labor Code) — An employer commits unfair labor practice when it violates the duty to bargain collectively. The SC inferred the violation from BALMAR's outright refusal to act on ALU's proposals despite the standing certification.
• Employer Cannot Question the Employees' Choice of Representative — It is not for the employer to question which group is the collective bargaining representative of its rank and file employees; taking sides with a faction that allegedly disaffiliated renders the employer's stand highly suspicious. BALMAR's reliance on the Luces letter, without any favorable action thereon, sustained the finding of bad faith.
• Good Faith Not a Defense Against a Certified Union — An employer cannot invoke good faith in refusing to negotiate with a union that has been certified as the exclusive bargaining representative of its rank and file employees.

• "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 or employment including proposals for adjusting any grievance or questions arising under such agreement if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession (Art. 252, Labor Code, as amended)." — The SC's operative definition of the duty to bargain collectively, tracking Article 252 and framing the obligation BALMAR breached.
• "There is no showing, however, that said letter was favorably acted upon, much less, is there an order superseding the Med-Arbiter's order of October 27, 1982 certifying ALU as the sole and exclusive bargaining representative of the rank and file workerks of BALMAR." — The decisive factual gap: the disaffiliation letter never produced any labor office action, so the certification remained intact.
• "BALMAR cannot also invoke good faith in refusing to negotiate with ALU, considering that the latter has been certified as the exclusive bargaining representative of BALMAR rank and file employees." — Rejects the employer's defense of good faith once a certification exists.
• "It can, therefore, be inferred that BALMAR's refusal to bargain collectively with ALU is a clear act of unfair labor practice." — The conclusion tying the refusal to Article 248(g) of the Labor Code.

• Confederation of Citizens Labor Union (CCLU) vs. Noriel, 116 SCRA 649 [1982] — Cited for the purpose of a certification election: to give employees true representation in their collective bargaining with an employer.
• National Association of Free Trade Union vs. Bureau of Labor Relations, 161 SCRA 246 [1988] — Cited for the rule that certification election is the most democratic and expeditious method by which laborers can freely determine their bargaining representative.
• PLUM Federation of Industrial and Agrarian Workers vs. Noriel, 119 SCRA 299 [1982] — Cited for the rule that certification election is the most effective way of determining which labor organization can truly represent the working force.
• Phil. Airlines Employees' Association (PALEA) vs. Ferrer-Calleja, 162 SCRA 246 [1988] — Cited for the employees' constitutional right to choose their own bargaining representative, a right exercised through certification election.

• Article 252, Labor Code, as amended — Defines the duty to bargain collectively as the mutual obligation to meet and convene promptly and expeditiously in good faith to negotiate an agreement on wages, hours of work and other terms and conditions of employment, including proposals for adjusting grievances, without compelling either party to agree or concede; applied to measure BALMAR's refusal to act on ALU's proposals.
• Article 248(g), Labor Code, as amended — Lists among employer unfair labor practices the violation of the duty to bargain collectively as prescribed by the Code; applied to hold BALMAR guilty of unfair labor practice for refusing to negotiate with the certified union.