Central Azucarera de Bais Employees Union-NFL vs. Central Azucarera de Bais, Inc.

An employer does not commit unfair labor practice by concluding a collective bargaining agreement with a new union when it reasonably believes the original certified bargaining agent has lost majority status, provided the employer's actions are not motivated by bad faith, ill will, or anti-unionism. Good faith is presumed, and the party alleging bad faith bears the burden of presenting substantial evidence to overcome that presumption.

Central Azucarera de Bais, Inc. (CAB) is a Philippine corporation represented by its President, Antonio Steven L. Chan. Central Azucarera de Bais Employees Union-National Federation of Labor (CABEU-NFL) is a duly registered labor union and the certified bargaining agent of CAB's rank-and-file employees, represented by its President, Pablito Saguran. The dispute arose from collective bargaining negotiations between CAB and CABEU-NFL, which commenced when CABEU-NFL submitted a proposed CBA on January 19, 2004, seeking increases in wages and benefits. After CAB submitted a counter-proposal and the parties exchanged amended proposals, the negotiations reached a deadlock, prompting CABEU-NFL to file a Notice of Strike with the National Conciliation and Mediation Board (NCMB), which then assumed conciliatory-mediation jurisdiction.

Central Azucarera de Bais, Inc. (CAB) is a Philippine corporation, and Central Azucarera de Bais Employees Union-National Federation of Labor (CABEU-NFL) is the duly registered labor union and certified bargaining agent of CAB's rank-and-file employees. On January 19, 2004, CABEU-NFL sent CAB a proposed Collective Bargaining Agreement seeking increases in daily wages, vacation and sick leave benefits for monthly employees, and the grant of leave benefits and 13th month pay to seasonal workers. CAB responded with a counter-proposal on March 27, 2004, agreeing to pro-rated wage increases whenever the government mandated a minimum wage hike but declining to grant additional Christmas bonuses. On May 21, 2004, CABEU-NFL submitted an Amended Union Proposal reducing its previous demands, but CAB maintained its position, and the negotiations resulted in a deadlock.

On account of the impasse, CABEU-NFL filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB), which assumed conciliatory-mediation jurisdiction and summoned the parties to conciliation conferences. On June 2, 2005, CABEU-NFL sent CAB a letter-request seeking copies of CAB's annual financial statements from 2001 to 2004 and asking for the resumption of conciliation meetings. CAB replied through a June 14, 2005 letter to NCMB Regional Director Isidro Cepeda, stating that Saguran was no longer a CAB employee having been lawfully terminated for redundancy, and that CABEU-NFL had lost its majority status because more than 90% of the rank-and-file employees had withdrawn their support sometime in January 2005. CAB further informed the NCMB that the disaffected workers had organized a new union, Central Azucarera de Bais Employees Labor Association (CABELA), obtained registration, and concluded a new CBA with CAB on April 21, 2005, duly ratified by 91% of the collective bargaining unit. CAB accordingly beseeched the NCMB to disregard CABEU-NFL's request for further conciliation, as it would serve no lawful or practical purpose.

The NCMB failed to act on CAB's letter-response and did not convene the parties to continue negotiations. Reacting to CAB's letter-response, CABEU-NFL filed a Complaint for Unfair Labor Practice, alleging that CAB's refusal to bargain and its execution of a CBA with CABELA constituted a violation of CAB's duty to bargain collectively. The Labor Arbiter dismissed the complaint on July 13, 2006, finding that CAB had actively participated in negotiations and that the complaint was premature while conciliation remained pending before the NCMB. The NLRC reversed the Labor Arbiter on July 18, 2007, finding CAB guilty of unfair labor practice and imposing CABEU-NFL's proposed CBA as amended upon CAB. The Court of Appeals thereafter reversed the NLRC and reinstated the Labor Arbiter's decision on September 26, 2008, holding that CABEU-NFL failed to present substantial evidence of bad faith. CABEU-NFL's motion for reconsideration was denied by the CA on January 21, 2009, prompting the present petition.

• Service of CA Petition: CABEU-NFL argued that the CA erred in giving due course to CAB's petition for certiorari because CAB served a copy of the petition on CABEU-NFL's counsel rather than on CABEU-NFL itself, in violation of Section 1, Rule 65 in relation to Section 3, Rule 46 of the Rules of Court.
• Failure to Indicate Address: CABEU-NFL contended that CAB failed to indicate CABEU-NFL's full address in the CA petition, as required by Section 3, Rule 46 of the Rules of Court.
• Forum Shopping: CABEU-NFL asserted that CAB committed forum shopping by failing to disclose the pendency of CA-G.R. SP No. 033132 and CA-G.R. SP No. 03017, involving the same parties, in its certification against forum shopping filed with the CA.
• Unfair Labor Practice: CABEU-NFL maintained that CAB was guilty of unfair labor practice for refusing to bargain collectively, citing CAB's admission in its letter-response that it had concluded a CBA with CABELA, which allegedly violated Article 253 and Article 248(g) of the Labor Code. CABEU-NFL asserted its status as the duly certified bargaining agent and argued that CAB had no reason to negotiate with CABELA, which lacked majority representation status.

• Sufficiency of Service: CAB argued that service of the CA petition on CABEU-NFL's counsel was sufficient pursuant to Section 2, Rule 13 of the Rules of Court, and denied any failure to indicate CABEU-NFL's name and address in the petition.
• No Forum Shopping: CAB stressed that CA-G.R. SP No. 033132 and CA-G.R. SP No. 03017 were initiated exclusively by members of CABEU and by CABEU itself, respectively, and not by CAB, and that there was no identity of issues or causes of action between those cases and the present case.
• Good Faith in Negotiating with CABELA: CAB countered that in view of the disassociation of more than 90% of rank-and-file workers from CABEU-NFL, it was constrained to negotiate and conclude in good faith a new CBA with CABELA. CAB emphasized that it declined further negotiations with CABEU-NFL in good faith because continuing would serve no practical purpose, and that the NCMB had not yet resolved its query in the letter-response. CAB claimed it acted in the best interest of the rank-and-file workers, which belied bad faith.

• Service of Petition: Whether the CA erred in giving due course to the petition for certiorari despite service of the copy of the petition on CABEU-NFL's counsel rather than on CABEU-NFL itself.
• Address Requirement: Whether the CA erred in giving due course to the petition for certiorari despite CAB's alleged failure to indicate the address of CABEU-NFL in the petition.
• Unfair Labor Practice: Whether the CA erred in absolving CAB of unfair labor practice arising from its refusal to bargain collectively with CABEU-NFL.

• Service of Petition: No. Service on CABEU-NFL's counsel was sufficient, the Rules of Court providing that if the adverse party appears by counsel, service shall be made on such counsel pursuant to Section 2, Rule 13.
• Address Requirement: No. CABEU-NFL's contention was misleading; a perusal of the CA petition revealed that CAB indicated both the name and address of CABEU-NFL, and the indication that CABEU-NFL could be served through counsel constituted substantial compliance with the Rules.
• Unfair Labor Practice: No. CAB was not guilty of unfair labor practice, its actions having been undertaken in good faith and without the ill will, bad faith, or anti-unionism required to sustain a charge under Article 248(g) of the Labor Code; the complaint was likewise premature as the collective bargaining issue remained pending before the NCMB.

• Service of Petition: Section 1, Rule 65 in relation to Section 3, Rule 46 of the Rules of Court requires the petitioner to serve a copy of the petition on the adverse party before filing. However, if the adverse party appears by counsel, service shall be made on such counsel pursuant to Section 2, Rule 13. CABEU-NFL appeared through its counsel of record, who had already filed an extensive comment on the petition. Service on counsel was therefore proper and sufficient, and CABEU-NFL could not claim denial of notice or opportunity to be heard.

• Address Requirement: A perusal of the CA petition filed by CAB revealed that CAB had indeed indicated both the name and address of CABEU-NFL. CABEU-NFL's assertion to the contrary was misleading. Moreover, CAB's indication that CABEU-NFL could be served with court processes through its counsel constituted substantial compliance with the Rules, as supported by OSM Shipping Philippines, Inc. vs. National Labor Relations Commission.

• Unfair Labor Practice: For a charge of unfair labor practice to prosper, it must be shown that the employer was motivated by ill will, bad faith, fraud, or oppression, or acted in a manner contrary to morals, good customs, or public policy. Good faith is presumed, and the party alleging bad faith bears the burden of presenting substantial evidence. CABEU-NFL relied solely on two circumstances — the execution of a CBA with CABELA and the letter requesting suspension of negotiations — to impute bad faith. These were insufficient. CAB believed, reasonably, that CABEU-NFL was no longer the representative of the workers, as more than 90% of the rank-and-file had withdrawn support and organized CABELA, which concluded a CBA ratified by 91% of the bargaining unit. CAB's actions were directed toward fostering industrial peace by acceding to the wishes of the overwhelming majority, not toward anti-unionism, which is the evil sought to be punished in unfair labor practice cases. Furthermore, the LA correctly determined that the ULP complaint was premature because the collective bargaining issue was still pending before the NCMB, which had not yet officially concluded conciliation proceedings. The NCMB's failure to act on CAB's letter-response could not be attributed to CAB as intransigence or refusal to bargain.

• Presumption of Good Faith in Employer's Actions — Good faith is presumed in the conduct of employer-employee relations, and the party alleging bad faith bears the burden of proving it with substantial evidence. In this case, CABEU-NFL failed to present substantial evidence to rebut the presumption that CAB acted in good faith when it concluded a CBA with CABELA and sought to suspend negotiations with CABEU-NFL, which it reasonably believed had lost majority status.

• Elements of Forum Shopping — Forum shopping exists when a party initiates two or more actions in separate tribunals grounded on the same cause, hoping for a favorable disposition in one. The elements are: (1) identity of parties, or at least such parties as represent the same interests; (2) identity of rights asserted and relief prayed for, founded on the same facts; and (3) identity of the two preceding particulars such that any judgment in the other action would amount to res judicata. CABEU-NFL failed to demonstrate any similarity in causes of action between the cited pending CA cases and the present case.

• Unfair Labor Practice Requires Bad Faith or Anti-Unionism — Unfair labor practice under Article 248(g) of the Labor Code requires that the employer's violation of the duty to bargain collectively be motivated by ill will, bad faith, fraud, oppression, or conduct contrary to morals, good customs, or public policy. Mere insistence on a legal position — even if ultimately incorrect — does not constitute bad faith absent evidence of anti-union animus.

• "Such actions of CAB are nowhere tantamount to anti-unionism, the evil sought to be punished in cases of unfair labor practices." — This passage articulates the ratio decidendi: that the employer's conduct, though resulting in a CBA with a different union, was not actuated by anti-unionism and therefore did not constitute unfair labor practice.

• "Furthermore, basic is the principle that good faith is presumed and he who alleges bad faith has the duty to prove the same." — This states the controlling doctrine on the burden of proof in unfair labor practice cases, placing the onus on the charging party to rebut the presumption of good faith with substantial evidence.

• "By forum shopping, a party initiates two or more actions in separate tribunals, grounded on the same cause, hoping that one or the other tribunal would favorably dispose of the matter." — This defines forum shopping and introduces its three elements, a formulation frequently cited in subsequent jurisprudence.

• T'boli Agro-Industrial Development, Inc. vs. Solilapsi, 442 Phil. 499 (2002) — Cited for the proposition that courts cannot take judicial notice of the contents or issues of other pending cases absent evidence introduced by the parties, supporting the rejection of CABEU-NFL's forum shopping claim.

• OSM Shipping Philippines, Inc. vs. National Labor Relations Commission, 446 Phil. 793 (2003) — Cited for the doctrine of substantial compliance with procedural rules, supporting the holding that CAB's indication of service through counsel satisfied the address requirement.

• Tunay Na Pagkakaisa Ng Manggagawa Sa Asiabrewery vs. Asia Brewery, Inc., G.R. No. 162025, August 3, 2010 — Cited for the principle that an employer's good faith belief that a union no longer represented the workers negates bad faith in labor relations, supporting the finding that CAB acted in good faith.

• Union of Filipro Employees-DFA-KMU vs. Nestlé Philippines, Incorporated, G.R. No. 158930-31, August 22, 2006 — Cited for the doctrine that good faith is presumed and the party alleging bad faith bears the burden of proof, a foundational principle applied in the ruling.

• Chavez vs. Court of Appeals, G.R. No. 174356, January 20, 2010 — Cited for the definition and elements of forum shopping, which the Court applied to reject CABEU-NFL's forum shopping contention.

• Go vs. Court of Appeals, G.R. 163745, August 24, 2007 — Cited for the rule that service on counsel is sufficient when the adverse party appears by counsel, pursuant to Section 2, Rule 13 of the Rules of Court.

• Article 247, Labor Code — Defines the concept of unfair labor practice as violations of the constitutional right to self-organization, inimical to the interests of labor and management, and disruptive of industrial peace. The provision establishes the framework within which the Court assessed whether CAB's conduct constituted unfair labor practice.

• Article 248(g), Labor Code — Enumerates as an unfair labor practice of employers the violation of the duty to bargain collectively as prescribed by the Code. The Court examined whether CAB's actions — concluding a CBA with CABELA and declining to resume negotiations with CABEU-NFL — constituted a violation of this provision, ultimately concluding they did not for lack of bad faith.

• Article 250, Labor Code — Prescribes the procedure for the discharge of the duty to bargain collectively, including the exchange of proposals, NCMB conciliation upon deadlock, and the option to strike or lockout. The LA cited this article in finding that CAB had complied with the procedural requisites of collective bargaining and that the complaint was premature.

• Article 253, Labor Code — Defines the duty to bargain collectively when a CBA exists, requiring the parties to maintain the status quo and continue the terms of the existing agreement during the 60-day period before expiration or until a new agreement is reached. CABEU-NFL invoked this article to support its ULP charge, but the Court found no violation.

• Section 1, Rule 65, Rules of Court — Governs petitions for certiorari and requires service of the petition on the adverse party before filing. The Court applied this provision in conjunction with Section 2, Rule 13 to hold that service on CABEU-NFL's counsel was sufficient.

• Section 3, Rule 46, Rules of Court — Requires that petitions contain the full names and actual addresses of all petitioners and respondents and be filed with proof of service on the respondent. The Court found that CAB had complied with this requirement, as the petition indicated CABEU-NFL's name and address.

Carpio (Chairperson), Nachura, Peralta, and Abad, JJ., concurred.