General Milling Corporation vs. Court of Appeals

An employer that violates its duty to bargain collectively through a baseless refusal to negotiate and dilatory tactics forfeits its statutory right to negotiate, justifying the unilateral imposition of the union's proposed collective bargaining agreement for the remaining term of the representation period.

General Milling Corporation (GMC) employed 190 workers at its Cebu City and Lapu-Lapu City plants, all members of the General Milling Corporation Independent Labor Union (GMC-ILU), the duly certified bargaining agent. On April 28, 1989, the parties concluded a collective bargaining agreement (CBA) retroactive to December 1, 1988. Under Article 253-A of the Labor Code, the representation aspect was effective for five years (expiring November 30, 1993), while the economic provisions were to be renegotiated within three years (by November 30, 1991). On November 29, 1991, GMC-ILU submitted a proposed CBA draft and requested a counter-proposal within ten days. GMC refused to submit a counter-proposal, claiming it had received letters of union withdrawal from some workers and thus doubted the union's standing. GMC-ILU denied the alleged disaffiliation and submitted a manifesto affirming membership. GMC subsequently dismissed a union member and refused to engage in the CBA's grievance procedure, prompting GMC-ILU to file an unfair labor practice complaint.

• CBA Execution and Term: GMC and GMC-ILU signed a CBA on April 28, 1989, retroactive to December 1, 1988. The representation aspect was effective for five years (until November 30, 1993), while the economic provisions were to be renegotiated within three years (by November 30, 1991).
• Union's Proposal and GMC's Refusal: On November 29, 1991, a day before the economic term expired, GMC-ILU submitted a proposed CBA draft and requested a counter-proposal within ten days. GMC refused to submit a counter-proposal, citing collective and individual letters of withdrawal from workers received as early as October 1991, and claimed the union no longer had standing to negotiate.
• Union's Rebuttal: On December 19, 1991, GMC-ILU officers denied any massive disaffiliation and submitted a manifesto signed by members affirming they had not withdrawn from the union.
• Discriminatory Dismissal: On January 13, 1992, GMC dismissed union member Marcia Tumbiga for incompetence. When the union protested and requested submission to the CBA grievance procedure, GMC advised the union to refer to its December 16, 1991 letter refusing to recognize the union.
• Interference with Self-Organization: During the pendency of the ULP case before the labor arbiter, GMC presented individual letters of resignation from 13 union members dated between February and June 1993 to prove the union lacked worker support.

• Constitutional Violation: Petitioner argued that the Court of Appeals decision violated the constitutional mandate that no decision shall be rendered without clearly and distinctly expressing the facts and the law on which it is based.
• Grave Abuse of Discretion: Petitioner maintained that the Court of Appeals committed grave abuse of discretion in reversing the NLRC's second resolution without any finding of substantial error or grave abuse of discretion amounting to lack or excess of jurisdiction.
• NLRC Jurisdiction: Petitioner argued that the NLRC lacked jurisdiction to determine the terms and conditions of a collective bargaining agreement and impose a draft CBA.

• Duty to Bargain Collectively: Respondent countered that petitioner violated its statutory duty to bargain by refusing to reply to the union's proposal within the prescribed period, constituting unfair labor practice.
• Interference with Self-Organization: Respondent argued that petitioner interfered with the employees' right to self-organization by exerting pressure on members to resign, as evidenced by the ill-timed resignation letters submitted during the pendency of the labor case.
• Imposition of CBA Draft: Respondent maintained that petitioner's bad faith and dilatory tactics warranted the imposition of the union's proposed CBA draft for the remaining representation period.

• Duty to Bargain Collectively: Whether petitioner committed unfair labor practice by refusing to bargain collectively when it ignored the union's proposed CBA draft.
• Interference with Self-Organization: Whether petitioner interfered with its employees' right to self-organization by pressuring union members to resign.
• Imposition of CBA: Whether the Court of Appeals gravely abused its discretion in imposing the union's proposed CBA draft on petitioner for the remaining two years of the representation period.

• Duty to Bargain Collectively: Petitioner committed unfair labor practice. Under Article 253-A of the Labor Code, the union remained the certified bargaining agent within the five-year representation period when it proposed renegotiation on November 29, 1991. The proposal was timely submitted within the three-year period for renegotiating economic provisions. Petitioner's failure to submit a reply within ten days, as mandated by Article 250 of the Labor Code, indicates bad faith and a clear evasion of the duty to bargain collectively under Articles 248 and 252. An employer's failure to even bother submitting an answer to bargaining proposals is a clear evasion of its statutory duty.
• Interference with Self-Organization: Petitioner interfered with self-organization. The resignation letters obtained from 13 union members during the pendency of the case before the labor arbiter indicated that petitioner exerted pressure on employees to cast doubt on the union's legitimate status. The ill-timed resignations confirmed employer interference.
• Imposition of CBA: The imposition of the union's draft CBA was proper. While Article 253 of the Labor Code mandates maintaining the status quo until a new agreement is reached, a departure from this general rule is warranted when an employer abuses the grace period by purposely delaying the bargaining process. Following Kiok Loy v. NLRC and Divine Word University of Tacloban v. Secretary of Labor and Employment, an employer who refuses to bargain in bad faith forfeits its statutory right to negotiate, justifying the unilateral imposition of the union's proposed CBA to serve equity and fair play.

• Duty to Bargain Collectively — The performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement. Good faith or bad faith is an inference drawn from the facts, considering the impact of all occasions or actions as a whole. Failure to submit a reply to bargaining proposals within the prescribed period indicates bad faith and a clear evasion of this duty.
• Forfeiture of the Right to Negotiate — When an employer refuses to perform its duty to bargain collectively and resorts to delaying tactics or schemes feigning negotiations, it forfeits its statutory right to negotiate or renegotiate the terms and conditions of the CBA. This forfeiture warrants the unilateral imposition of the union's proposed CBA to restore equal footing and serve the interests of equity and social justice.

• "Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively."
• "By its acts, no less than its action which bespeak its insincerity, it has forfeited whatever rights it could have asserted as an employer."
• "But an erring party should not be allowed to resort with impunity to schemes feigning negotiations by going through empty gestures."

• Kiok Loy vs. NLRC, G.R. No. L-54334, 22 January 1986 — Controlling precedent followed. Established that an employer refusing to submit counter-proposals and stalling negotiations loses its right to bargain, warranting the unilateral imposition of the union's CBA draft lock, stock, and barrel.
• Divine Word University of Tacloban vs. Secretary of Labor and Employment, G.R. No. 82222, 11 September 1992 — Followed. Upheld the unilateral imposition of a CBA on an employer that refused to perform its duty to bargain collectively, having forfeited its rights through insincere actions.
• Hongkong and Shanghai Banking Corporation Employees Union v. NLRC, G.R. No. 125038, 6 November 1997 — Cited for the proposition that good faith or bad faith in bargaining is an inference drawn from the facts, considering the impact of all actions as a whole rather than a per se test.
• Colegio De San Juan De Letran v. Association of Employees and Faculty of Letran, G.R. No. 141471, 18 September 2000 — Cited to support the finding that failure to submit an answer to bargaining proposals constitutes clear evasion of the duty to bargain.

• Article 253-A, Labor Code — Terms of a collective bargaining agreement. Provides that the representation aspect of a CBA lasts for five years, and no petition questioning majority status shall be entertained outside the sixty-day period before expiry. Economic provisions are renegotiated within three years. Applied to determine that the union remained the certified bargaining agent when it proposed renegotiation within the five-year term.
• Article 248(g), Labor Code — Unfair labor practices of employers. Declares it unlawful for an employer to violate the duty to bargain collectively as prescribed by the Code. Applied to classify GMC's refusal to negotiate as an unfair labor practice.
• Article 252, Labor Code — Meaning of duty to bargain collectively. Defines the duty as the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith. Applied to establish that GMC failed its mutual obligation by devising a flimsy excuse to prevent negotiation.
• Article 250, Labor Code — Procedure in collective bargaining. Mandates that the receiving party shall make a reply to proposals not later than ten calendar days from receipt of the notice. GMC's failure to comply indicated utter lack of interest in bargaining.
• Article 253, Labor Code — Duty to bargain collectively when there exists a CBA. Mandates keeping the status quo and continuing the terms of the existing agreement until a new agreement is reached. Applied to establish the general rule, from which a departure was warranted because GMC abused the period through bad faith.

Puno (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.