Guagua National Colleges vs. Guagua National Colleges Faculty Labor Union

An employer that negotiates in bad faith—reaching agreement on CBA terms and then belatedly submitting a counter-proposal to evade execution—commits unfair labor practice under Article 248(g) of the Labor Code, and the resulting dispute is properly subject to compulsory arbitration by the NLRC when certified by the Secretary of Labor under Article 263(g), rather than voluntary arbitration, absent an express CBA stipulation that unfair labor practice cases shall be submitted to the voluntary arbitrator.

GNC is an educational institution located in Sta. Filomena, Guagua, Pampanga. Respondents Guagua National Colleges Faculty Labor Union (GNCFLU) and Guagua National Colleges Non-Teaching and Maintenance Labor Union (GNCNTMLU) were the collective bargaining agents for GNC's faculty members and non-teaching and maintenance personnel, respectively. Since 1994, the parties had concluded successive CBAs without issue, all of which applied to both unions without distinction. The 1994-1999 CBA contained a "no-strike, no lock-out" clause under Section 17, which also established a grievance machinery and voluntary arbitration mechanism; this provision was carried over into all subsequent CBAs through clauses incorporating untouched terms of prior agreements. The existing CBA, effective June 1, 2004 to May 31, 2009, was set to expire, prompting the unions to initiate negotiations for a new agreement.

On April 3, 2009, the presidents of GNCFLU and GNCNTMLU wrote GNC President Atty. Ricardo V. Puno to express their intention to open negotiations for renewal of the existing CBA, which would expire on May 31, 2009. Attached to the letter was respondents' proposal for the next CBA, received by GNC on the same date. Instead of serving a reply or counter-proposal within the ten-day period required by Article 250 of the Labor Code, GNC wrote respondents on May 11, 2009 calling a meeting on May 15, 2009. The meeting was held but no agreement was reached, except that GNC would notify respondents of the next meeting. What respondents received instead was a letter dated May 27, 2009 from GNC Corporate Secretary Atty. Ricardo M. Sampang stating that management was "not inclined to grant the economic/monetary-related proposals" in respondents' letter. Respondents nevertheless requested a conference on ground rules, which GNC granted, scheduling a meeting on June 11, 2009.

The parties' accounts of subsequent events diverge. GNC asserted in general terms that proposals and counter-proposals were exchanged in the months that followed. Respondents, however, detailed a series of meetings from June through October 2009 in which the economic terms of the CBA were progressively discussed and settled. According to respondents, GNC asked for three weeks to submit a counter-proposal at the June 16, 2009 meeting but failed to do so at the July 10, 2009 meeting. Thereafter, school treasurer Cita Rodriguez, a member of the management panel, discussed specific economic items—longevity pay, birthday gift, family assistance, medical check-up, and clothing allowance—in successive meetings. By the August 17, 2009 meeting, the parties agreed on a ₱5.00 increase in longevity pay. On August 24, 2009, Rodriguez announced the increased benefits included in the new CBA—loyalty pay, cash gift, rice subsidy, birthday gift, and clothing allowance—and confirmed the grant of a union office. The only unsettled item was respondents' demand for an increased signing bonus of ₱100,000.00 per union. On September 23, 2009, respondents submitted a draft CBA containing all benefits agreed upon, which GNC requested be revised. On October 9, 2009, the parties reviewed all agreed benefits, and Rodriguez stated that the signing might take place at the next meeting. On October 15, 2009, respondents submitted the revised draft to Atty. Sampang, which they considered ready for signing.

Despite repeated follow-ups, no signing occurred. On December 21, 2009, respondents received from Atty. Sampang GNC's counter-proposal—a document respondents found surprising, as they believed all matters except details on the signing bonus had been settled, and the three-week period GNC had earlier requested had long lapsed. Atty. Sampang requested a meeting with Atty. Puno on January 5, 2010, but despite Atty. Puno's presence on school premises, he did not face respondents' representatives. Respondents wrote Atty. Puno on January 8, 2010, stressing that they had been bargaining in good faith while GNC had not, expressing their belief that an impasse had been reached, and asking GNC to state its position on whether third-party assistance was needed. Receiving no reply, respondents filed a preventive mediation case with the NCMB on February 3, 2010.

During mediation before the NCMB, respondents alleged that the parties finally agreed on the details of the signing bonus after several meetings. Respondents undertook to compose the final draft of the 2009-2014 CBA, submitted it to the NCMB on May 14, 2010, and copy furnished GNC on May 21, 2010. The parties allegedly agreed to schedule the signing on May 28, 2010, but no signing took place. Instead, Atty. Sabino Jose M. Padilla III appeared on behalf of GNC and requested ten days to submit GNC's comment or counter-proposal to what he termed the "Union[s'] CBA draft." Respondents agreed but manifested a desire to meet on June 1, 2010; no one appeared for GNC on that date. Respondents thereupon filed a Notice of Strike charging GNC with bad faith bargaining, violation of its duty to bargain, gross violations of CBA provisions, and gross and blatant diminution of benefits. GNC, for its part, contended that it had engaged Atty. Padilla to assist in negotiations upon receiving respondents' draft, and that Atty. Padilla appeared on May 28, 2010 to request time to submit a counter-proposal. GNC filed its counter-proposal on June 7, 2010.

At the June 9, 2010 conciliation conference, GNC filed a Motion to Strike Out Notice of Strike and to Refer Dispute to Grievance Machinery and Voluntary Arbitration, invoking the "no-strike, no lock-out" clause and the grievance machinery provision of the CBA. In the afternoon of the same day, respondents conducted strike votes, with the majority favoring a strike. GNC then urged the Secretary of Labor to assume jurisdiction, which the Secretary did by Order dated June 28, 2010, certifying the dispute to the NLRC for compulsory arbitration. The NLRC found GNC guilty of unfair labor practice for bad faith bargaining, declared the final CBA draft as the parties' CBA for 2009-2014, and ordered retroactive effect of agreed benefits to June 1, 2009. The NLRC's finding rested on GNC's belated submission of a counter-proposal after the parties had already reached agreement, and on GNC's discontinuance of certain benefits pending conclusion of a new CBA, in violation of the status quo duty under Article 253.

• Voluntary Arbitration Jurisdiction: GNC argued that the voluntary arbitrator has jurisdiction over the grounds cited in respondents' notice of strike, because Section 17 of the parties' 1994-1999 CBA—carried over to subsequent CBAs—contains a "no-strike, no lock-out" clause and a grievance resolution and voluntary arbitration provision. GNC maintained that respondents' grounds for strike fall within the scope of "grievance" as defined in the CBA, and that respondents circumvented the CBA's grievance machinery and voluntary arbitration provisions by the simple expedient of filing a notice of strike. GNC relied heavily on University of San Agustin Employees' Union-FFW vs. Court of Appeals, asserting that the facts therein were identical to the present case.
• No Bad Faith Bargaining: GNC insisted it was not guilty of bad faith bargaining, pointing out that it consistently engaged in negotiations with respondents at both the plant and NCMB levels. It underscored that following its submission of a counter-proposal to the NCMB, it manifested willingness to negotiate on a marathon basis, negating any ill will or oppressive conduct. GNC contended that no final agreement had yet been reached when it submitted its counter-proposal, citing minutes of the October 9, 2009 meeting indicating that economic benefits were still to be discussed with the GNC President.
• Justification for Counter-Proposal: GNC justified its counter-proposal on the ground of its chronic financial situation, the need to conclude separate CBAs for GNCFLU and GNCNTMLU, and the desire to introduce improved provisions for mutual benefit. It argued that its financial difficulties hindered it from readily agreeing to respondents' economic proposals.
• No Unilateral Withdrawal of Benefits: GNC denied stopping the release of benefits, explaining that its Protégé Program was subjected to stricter implementation guidelines but not stopped, that uniforms were distributed, that the annual retreat was already held in December 2009, and that rice subsidy was granted on a best-effort basis only when savings were generated—none having been generated since December 2009.

• Bad Faith Bargaining: Respondents argued that GNC committed unfair labor practice by bad faith bargaining, having failed to submit a timely reply or counter-proposal at the plant level, then orally discussing terms, reaching agreement, and belatedly submitting a counter-proposal on December 21, 2009 after all matters were already substantially agreed upon. The same pattern repeated at the NCMB level, where GNC denied that the draft submitted by respondents was the parties' final draft despite having agreed to its preparation during conciliation meetings.
• Unilateral Withdrawal of Benefits: Respondents averred that GNC, without notice, stopped the release of certain benefits to its employees subsequent to the filing of the notice of strike.
• Impasse and Right to Strike: Respondents expressed their belief that the parties had reached an impasse and that GNC's repeated denials of having reached an agreement—first at the plant level, then at the NCMB—constituted acts of unfair labor practice justifying the filing of a notice of strike.

• Jurisdiction: Whether the subject labor dispute should have been ordered submitted to voluntary arbitration by the Secretary of Labor and Employment pursuant to the parties' CBA, rather than certified to the NLRC for compulsory arbitration.
• Bad Faith Bargaining: Whether GNC is guilty of bad faith bargaining and thus violated its statutory duty to bargain collectively in good faith.
• Imposition of CBA: Whether the final CBA draft submitted by respondents to the NCMB was correctly declared to be the parties' CBA for the period June 1, 2009 to May 31, 2014.

• Jurisdiction: No. The Secretary of Labor correctly certified the dispute to the NLRC for compulsory arbitration, because the dispute centered on unfair labor practice charges which do not fall under the jurisdiction of the voluntary arbitrator absent an express CBA stipulation submitting such cases to voluntary arbitration.
• Bad Faith Bargaining: Yes. GNC engaged in bad faith bargaining and violated its duty to bargain collectively, as evidenced by its totality of conduct—failure to submit a timely counter-proposal, oral negotiations culminating in agreement, then belated submission of a counter-proposal to evade execution of the agreed CBA.
• Imposition of CBA: Yes. The final CBA draft submitted by respondents was correctly imposed as the parties' CBA for 2009-2014, GNC having forfeited its right to negotiate by reason of its insincere conduct, and the draft in fact incorporating the parties' agreements.

• Jurisdiction: The "no-strike, no lock-out" clause in the CBA may only be invoked by an employer when the strike is economic in nature; it is not applicable when the strike is grounded on unfair labor practice. Here, while respondents enumerated four grounds in their notice of strike, the primary impetus was their perception of bad faith bargaining and violation of the duty to bargain collectively—charges constituting unfair labor practice under Article 248(g) of the Labor Code. Respondents were justified in filing a notice of strike because GNC denied reaching an agreement not once but twice, first at the plant level and again at the NCMB. GNC's reliance on University of San Agustin Employees' Union-FFW vs. Court of Appeals was misplaced. In that case, the dispute involved the formula for computing the tuition incremental proceeds (TIP) share—a matter arising from the interpretation or implementation of the CBA, falling under the original and exclusive jurisdiction of the voluntary arbitrator under Article 261. In the present case, the dispute did not arise from the interpretation or implementation of the CBA or from company personnel policies. While the CBA's definition of "grievance" included a catch-all phrase—"any other matter or dispute"—it has been held that for unfair labor practices to fall under voluntary arbitration, the CBA must state in unequivocal language that the parties agree to submit unfair labor practice cases to the voluntary arbitrator. A general stipulation that "all disputes" or "any other matter or dispute" shall be submitted to grievance machinery is insufficient, because unfair labor practices fall within a special class of disputes generally within the exclusive original jurisdiction of the Labor Arbiter by express provision of law (Article 217). Absent such express stipulation, jurisdiction over the unfair labor practice dispute does not vest in the voluntary arbitrator. Furthermore, the Secretary of Labor's certification for compulsory arbitration is an exercise of the powers granted under Article 263(g), characterized as an exercise of police power with "great breadth of discretion." Limiting compulsory arbitration to instances agreed upon by the parties in the CBA would improperly diminish the Secretary's authority.

• Bad Faith Bargaining: The duty to bargain collectively under Article 252 requires meeting and convening in good faith. Good faith or bad faith is an inference drawn from the facts, and the effect of a party's actions must be considered as a whole. GNC's collective conduct displayed badges of bad faith at both the plant and NCMB levels. At the plant level, GNC failed to comply with the mandatory requirement under Article 250(a) of serving a reply or counter-proposal within ten calendar days from receipt of respondents' proposal—a fact indicative of lack of genuine interest to bargain. GNC then led respondents to believe it was dispensing with a written counter-proposal by orally discussing economic terms. After a series of meetings, the parties agreed on the economic terms, which was the only contentious issue. On August 24, 2009, Rodriguez categorically announced and enumerated all the benefits "given by the school in the CBA 2009-2014," indicating that the benefits were already approved. The October 9, 2009 minutes, upon which GNC relied, did not show that the terms were subject to the GNC President's approval; the statement "next time we will be on the signing" was unqualified. Despite having reached agreement, GNC ignored respondents' follow-ups and then belatedly submitted a counter-proposal on December 21, 2009. GNC's claim of financial difficulties was raised too late; it should have been squarely presented early in the negotiations, and GNC should have matched respondents' proposals with counter-proposals and made every reasonable effort to reach an agreement. Instead, GNC went through the negotiation process without fully discussing its financial status, knowingly entered into an agreement, and then belatedly interposed opposition based on financial incapacity. At the NCMB level, GNC repeated this pattern: after the parties agreed that respondents would prepare the final draft, and after the May 14, 2010 conciliation showed that only fine-tuning remained, GNC again denied that an agreement had been reached and characterized the draft as merely respondents' draft. GNC's manifestation of willingness to negotiate on a marathon basis came too late, as a final draft already existed pursuant to the parties' understanding during NCMB conciliation. As for the charge of unilateral withdrawal of benefits, respondents failed to substantiate their claim with proof, while GNC was able to show that clothing benefits and the annual retreat had been extended, the Protégé Program was still in effect under stricter guidelines, and rice subsidy was on a best-effort basis. The charge of unilateral withdrawal was thus found without basis, though this did not alter the finding of bad faith bargaining.

• Imposition of CBA: In Kiok Loy vs. NLRC, Divine Word University of Tacloban vs. Secretary of Labor and Employment, and General Milling Corporation vs. Court of Appeals, the Court unilaterally imposed upon employers the CBAs proposed by unions after the employers were found to have violated their duty to bargain collectively, on the premise that the employers, by their insincere acts, had lost their statutory right to negotiate or renegotiate. Here, the final CBA draft submitted by respondents to the NCMB was not merely the unions' proposal but actually the parties' final draft incorporating their agreements. Fairness, equity, and social justice were best served by having that draft govern the parties' industrial relationship.

• No-Strike, No-Lock-Out Clause — Applicability — A "no-strike, no lock-out" provision in a CBA may be invoked by an employer only when the strike is economic in nature—i.e., conducted to force wage or other agreements not mandated by law. It is not applicable when the strike is grounded on unfair labor practice. In this case, respondents' notice of strike was primarily motivated by perceived bad faith bargaining, an unfair labor practice under Article 248(g), justifying the filing of the notice despite the CBA's no-strike clause.

• Express Stipulation Required for ULP Submission to Voluntary Arbitration — While a CBA's catch-all phrase such as "any other matter or dispute" may appear to encompass unfair labor practices, an express stipulation in unequivocal language is required for the parties to submit unfair labor practice cases to voluntary arbitration. Absent such express stipulation, the phrase "all disputes" or "any other matter or dispute" is construed as limited to areas traditionally within the jurisdiction of voluntary arbitrators—contract interpretation, contract implementation, or interpretation or enforcement of company personnel policies. Unfair labor practices, falling within the exclusive original jurisdiction of the Labor Arbiter under Article 217, constitute a special area governed by specific provision of law.

• Duty to Bargain in Good Faith — Totality of Conduct Test — Good faith or bad faith in bargaining is an inference drawn from the facts of the individual case; there is no per se test. The effect of a party's actions individually is not the test, but the impact of all such occasions or actions considered as a whole. Badges of bad faith include failure to submit a timely reply or counter-proposal as required by Article 250(a), leading the other party to believe written counter-proposals are dispensed with, orally negotiating and reaching agreement, then belatedly submitting a counter-proposal to evade execution, and failing to respond to communications seeking clarification.

• Imposition of Union's Proposed CBA as Remedy for Bad Faith Bargaining — When an employer is found to have violated its duty to bargain collectively through bad faith, the Court may unilaterally impose upon the employer the CBA proposed by the union. The premise is that the employer, by acts bespeaking insincerity, has lost its statutory right to negotiate or renegotiate the terms and conditions contained in the union's proposed CBA.

• "It has been held that while the phrase 'all other labor dispute' or its variant 'any other matter or dispute' may include unfair labor practices, it is imperative, however, that the agreement between the union and the company states in unequivocal language that the parties conform to the submission of unfair labor practices to voluntary arbitration." — This passage articulates the controlling rule on when a CBA's catch-all grievance provision can be construed to submit unfair labor practice charges to voluntary arbitration, requiring an express and unequivocal stipulation rather than a general submission clause.

• "It is not sufficient to merely say that parties to the CBA agree on principle that 'all disputes' or as in this case, 'any other matter or dispute', should be submitted to the grievance machinery and eventually to the voluntary arbitrator. There is a need for an express stipulation in the CBA that unfair labor practices should be resolved in the ultimate by the voluntary arbitrator or panel of voluntary arbitrators since the same fall within a special class of disputes that are generally within the exclusive original jurisdiction of the Labor Arbiter by express provision of the law." — This elaborates the rationale for the express-stipulation requirement, grounding it in the special statutory classification of unfair labor practices under Article 217 of the Labor Code.

• "Good faith or bad faith is an inference to be drawn from the facts. The effect of an employer's or a union's actions individually is not the test of good-faith bargaining, but the impact of all such occasions or actions, considered as a whole." — This states the totality-of-conduct test for determining good or bad faith in collective bargaining, the analytical framework applied throughout the Court's evaluation of GNC's behavior.

• University of San Agustin Employees' Union-FFW vs. Court of Appeals, 520 Phil. 400 (2006) — Distinguished. GNC relied heavily on this case, arguing identical facts. The Court found a marked difference: in University of San Agustin, the dispute involved the formula for computing the TIP share, which arose from the interpretation or implementation of the CBA and thus fell under the voluntary arbitrator's jurisdiction under Articles 261 and 262. In the present case, the dispute centered on unfair labor practice, which did not arise from CBA interpretation or implementation, and the CBA lacked an express stipulation submitting ULP cases to voluntary arbitration.

• General Milling Corporation vs. Court of Appeals, 467 Phil. 125 (2004) — Followed. Cited as authority for the NLRC's imposition of the final CBA draft as the parties' CBA, and for the proposition that failure to submit a timely counter-proposal is indicative of lack of genuine interest to bargain.

• Kiok Loy vs. National Labor Relations Commission, 225 Phil. 138 (1986) — Followed. Cited as one of the cases where the Court unilaterally imposed the union's proposed CBA upon an employer found to have violated its duty to bargain collectively, the employer having lost its statutory right to negotiate by reason of insincere conduct.

• Divine Word University of Tacloban vs. Secretary of Labor and Employment, G.R. No. 91915, September 11, 1992, 213 SCRA 759 — Followed. Similarly cited as authority for imposing the union's proposed CBA upon an erring employer.

• Vivero vs. Court of Appeals, 398 Phil. 158 (2000) — Followed. Cited for the rule that while a catch-all phrase in a CBA may include unfair labor practices, the agreement must state in unequivocal language that the parties conform to the submission of ULP to voluntary arbitration.

• A. Soriano Aviation vs. Employees Association of A. Soriano Aviation, 612 Phil. 1093 (2009) — Followed. Cited for the doctrine that a "no-strike, no lock-out" provision may be invoked by an employer only when the strike is economic in nature, not when it is grounded on unfair labor practice.

• Steel Corporation of the Philippines vs. SCP Employees Union-National Federation of Labor Unions, 574 Phil. 716 (2008) — Followed. Cited for the characterization of the Secretary of Labor's powers under Article 263(g) as an exercise of police power with "great breadth of discretion."

• Article 248(g), Labor Code — Defines unfair labor practice of employers to include violating the duty to bargain collectively as prescribed by the Code. Applied to characterize GNC's bad faith bargaining as unfair labor practice.
• Article 250(a), Labor Code — Requires that when a party desires to negotiate an agreement, the other party shall make a reply not later than ten (10) calendar days from receipt of the notice. GNC's failure to comply was cited as a badge of bad faith.
• Article 252, Labor Code — Defines the duty to bargain collectively as the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith. Applied as the standard against which GNC's conduct was measured.
• Article 253, Labor Code — Imposes the duty to maintain the status quo and continue in full force and effect the terms and conditions of the existing agreement within 60 days prior to expiration and until a new agreement is reached. The NLRC relied on this provision in finding GNC's discontinuance of benefits violative, though the Supreme Court found the charge of unilateral withdrawal unsubstantiated.
• Article 261, Labor Code — Grants the voluntary arbitrator original and exclusive jurisdiction over unresolved grievances arising from the interpretation or implementation of the CBA and those arising from the interpretation or enforcement of company personnel policies. Distinguished from the present case, where the dispute did not arise from CBA interpretation or implementation.
• Article 262, Labor Code — Grants the voluntary arbitrator jurisdiction, upon agreement of the parties, over all other labor disputes including unfair labor practices and bargaining deadlocks. The Court held that absent an express CBA stipulation, the parties' general agreement to submit "any other matter or dispute" to grievance machinery was insufficient to vest jurisdiction over ULP in the voluntary arbitrator.
• Article 263(g), Labor Code — Authorizes the Secretary of Labor to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, and to certify the same to the NLRC for compulsory arbitration. Upheld as the basis for the Secretary's certification.
• Article 263-A, Labor Code — Governs renegotiation of economic provisions of a CBA. The NLRC ordered that the parties were free to renegotiate the economic provisions not later than May 31, 2012.
• Article 217, Labor Code — Grants Labor Arbiters original and exclusive jurisdiction over unfair labor practice cases. Cited as the statutory basis for the rule that ULP cases fall within a special class of disputes requiring an express CBA stipulation to be submitted to voluntary arbitration.

Carpio (Chairperson), Brion, and Leonen, JJ., concurred. Mendoza, J., was on official leave.