Standard Chartered Bank Employees Union (NUBE) vs. Confesor

Surface bargaining, which constitutes unfair labor practice under Article 248(g) of the Labor Code, requires proof of an intent not to reach an agreement, which must be inferred from the totality of the party’s conduct both at and away from the bargaining table; mere hard bargaining or the failure to agree to proposals does not constitute ULP, as the duty to bargain collectively does not compel either party to make concessions or agree to specific terms.

The case arose from the renegotiation of a Collective Bargaining Agreement (CBA) between Standard Chartered Bank (Bank) and Standard Chartered Bank Employees Union (Union) in 1993. The parties had an existing five-year CBA signed in August 1990 with a provision to renegotiate terms on the third year. The negotiations eventually reached an impasse, leading to a deadlock declaration by the Union, the filing of a Notice of Strike, and the assumption of jurisdiction by the Secretary of Labor and Employment.

• In August 1990, Standard Chartered Bank and the Union signed a five-year Collective Bargaining Agreement (CBA) containing a provision to renegotiate terms on the third year.
• Prior to the expiration of the three-year period but within the sixty-day freedom period, the Union initiated negotiations by sending a letter dated February 18, 1993, containing proposals for political provisions and thirty-four economic provisions, including wage increases, group hospitalization, death assistance, and dental benefits.
• The Bank responded on February 24, 1993, with counter-proposals on non-economic provisions and stated it would present counter-proposals on economic items after the Union presented its justifications.
• Before negotiations commenced, the Union President suggested excluding bank lawyers from the Bank's negotiating panel, to which the Bank acceded. Simultaneously, the Bank's Human Resource Manager suggested excluding Jose P. Umali, Jr., President of the National Union of Bank Employees (NUBE) federation, from the Union's panel, but Umali was retained.
• From March 12 to May 4, 1993, the parties conducted meetings to discuss non-economic provisions, marking some items as "DEFERRED/DEADLOCKED" when no agreement could be reached.
• On May 18, 1993, negotiations for economic provisions commenced, with both parties presenting their proposals and counter-proposals on wages, insurance, death assistance, and dental benefits.
• During the June 15, 1993 meeting, the Union declared a deadlock after the Bank refused to make further revisions to its counter-proposal, and subsequently filed a Notice of Strike on June 21, 1993.
• The Bank filed a complaint for ULP on June 28, 1993, alleging that the Union engaged in blue-sky bargaining by demanding "sky high economic demands" and violated the no-strike clause.
• The Secretary of Labor assumed jurisdiction on July 21, 1993, and subsequently dismissed both parties' ULP charges in an Order dated October 29, 1993, while imposing the terms of the CBA.

• The Union alleged that the Bank committed ULP under Article 248(a) of the Labor Code by interfering with the Union's choice of negotiator when the Bank's HR Manager suggested excluding Federation President Jose Umali, Jr. from the negotiating panel, which constituted anti-union conduct.
• The Union claimed that the Bank engaged in surface bargaining under Article 248(g) by merely going through the motions of collective bargaining without any intent to reach an agreement, evidenced by the Bank's limited counter-proposals and refusal to prioritize items for the economic package.
• The Union argued that the Bank made bad faith non-economic proposals by opening political provisions "up for grabs," effectively diminishing gains made by the Union in previous CBAs.
• The Union contended that the Bank refused to furnish material and necessary data when it failed to validate the Union's "guestimates" regarding rank and file employee data despite repeated requests.
• The Union asserted that the Secretary of Labor committed grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing the ULP charges, particularly in requiring proof of injury to the public interest for ULP to prosper.

• The Bank argued that the Union was estopped from raising ULP claims because it signed the new CBA on March 22, 1994, thereby accepting the benefits and terms imposed by the Secretary.
• The Bank alleged that it was the Union that committed ULP through blue-sky bargaining by making exaggerated and unreasonable economic demands, and by violating the no-strike clause of the existing CBA.
• The Bank claimed that Union negotiator Jose Umali, Jr. engaged in offensive conduct by hurling invectives at the Bank's head negotiator and demanding her exclusion from the panel.
• The Solicitor General, representing the Secretary of Labor, contended that the Union failed to substantiate its ULP charges with substantial evidence and that the Secretary did not commit grave abuse of discretion in issuing the assailed orders.

• Procedural Issues:
  • Whether the Secretary of Labor committed grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing the Union's ULP charges and failing to rule on other alleged ULP acts.
  • Whether the Union is estopped from filing the petition after signing the CBA and receiving the signing bonus.
• Substantive Issues:
  • Whether the Bank committed ULP under Article 248(a) by interfering with the Union's choice of negotiator.
  • Whether the Bank committed ULP under Article 248(g) by engaging in surface bargaining and making bad faith proposals.
  • Whether the Bank committed ULP by refusing to furnish the Union with relevant financial data.

• Procedural:
  • The Supreme Court held that the Secretary did not commit grave abuse of discretion. Grave abuse implies a capricious and whimsical exercise of judgment equivalent to lack of jurisdiction, which was not present here. The Secretary's findings were supported by evidence and did not indicate arbitrariness or despotic manner.
  • The Court ruled that the Union was not estopped from filing the action. While the Union signed the CBA and received signing bonuses, this did not constitute a waiver of its ULP claims regarding the negotiation process, especially since the Union had previously filed motions for reconsideration of the Secretary's orders.
• Substantive:
  • Interference with Choice of Negotiator: The Court found no ULP under Article 248(a). The suggestion to exclude Umali was made simultaneously with the Union's suggestion to exclude bank lawyers, occurred before negotiations commenced, and the negotiations proceeded with Umali present. The charge was deemed an afterthought filed after the deadlock, and no substantial evidence showed the Bank intended to adversely affect the right to self-organization.
  • Surface Bargaining and Bad Faith Proposals: The Court ruled that surface bargaining requires proof of intent not to reach an agreement, inferred from the totality of conduct. The Bank's participation in negotiations, exchange of proposals, and acceptance of some demands while rejecting others indicated hard bargaining, not surface bargaining. The duty to bargain does not compel agreement or concessions. The Bank's counter-proposals on non-economic provisions were legitimate and did not constitute bad faith.
  • Refusal to Furnish Data: The Court found no ULP. The Union failed to comply with Article 242(c) of the Labor Code, which requires a written request for financial statements. The Union's oral request for validation of "guestimates" during a meeting did not satisfy this statutory requirement.

• Surface Bargaining — Defined as "going through the motions of negotiating" without any legal intent to reach an agreement. The determination requires examining the totality of the challenged party's conduct both at and away from the bargaining table to infer intent. It is distinct from "hard bargaining," which is permissible even if it results in deadlock.
• Interference with Self-Organization (Article 248(a)) — Requires substantial evidence showing that the employer engaged in conduct intended to yield adverse effects on the free exercise of the right to self-organization or collective bargaining. Mere suggestions made in the context of mutual accommodations before negotiations commence do not constitute ULP if the negotiations subsequently proceed without obstruction.
• Duty to Bargain Collectively — The obligation to bargain collectively does not compel either party to agree to a proposal or require the making of concessions. The failure to reach an agreement does not automatically constitute ULP.
• Blue-Sky Bargaining — Defined as making unrealistic and unreasonable demands where neither party concedes anything. It is not per se ULP unless the demands are proven to be exaggerated or unreasonable based on objective standards.
• Estoppel — Signing a CBA and accepting its benefits does not automatically waive or estop a union from pursuing ULP claims related to the negotiation process, particularly when the union has previously challenged the dismissal of such claims through available remedies.

• "Surface bargaining is defined as 'going through the motions of negotiating' without any legal intent to reach an agreement."
• "The resolution of surface bargaining allegations never presents an easy issue. The determination of whether a party has engaged in unlawful surface bargaining is usually a difficult one because it involves, at bottom, a question of the intent of the party in question, and usually such intent can only be inferred from the totality of the challenged party's conduct both at and away from the bargaining table."
• "The duty to bargain 'does not compel either party to agree to a proposal or require the making of a concession.'
• "Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion."
• "It is clear that such ULP charge was merely an afterthought. The accusation occurred after the arguments and differences over the economic provisions became heated and the parties had become frustrated."

• National Labor Union v. Insular-Yebana Tobacco Corporation, 2 SCRA 924 (1961) — Cited by the Secretary of Labor regarding the requirement of prejudice to public interest for ULP charges, though the Supreme Court clarified that this is not a statutory requirement but did not disturb the dismissal on other grounds.
• Insular Life Assurance Co., Ltd. Employees Association – NATU v. Insular Life Assurance Co., Ltd., 37 SCRA 244 (1971) — Established the test for interference with self-organization under Article 248(a): whether the employer engaged in conduct tending to interfere with free exercise of employees' rights.
• U.S. Postal Service, 280 NLRB No. 80 and Harley Davidson Motor Co., Inc., 214 NLRB No. 062 — U.S. cases cited by the Union regarding interference with choice of negotiators under the NLRA; distinguished by the Court as inapplicable to the factual context where the suggestion was mutual and pre-negotiation.
• K-Mart Corporation v. National Labor Relations Board, 626 F.2d 704 (1980) — Cited for the definition of surface bargaining and the principle that refusal to furnish information supports the inference of surface bargaining.
• National Union of Restaurant Workers (PTUC) v. Court of Industrial Relations, 10 SCRA 843 (1964) — Cited for the principle that accepting some demands while rejecting others indicates willingness to bargain, negating refusal to bargain.
• Eastern Maine Medical Center v. National Labor Relations Board, 658 F.2d 1 (1981) — Cited for the principle that the duty to bargain does not require making concessions.

• Article 248(a) of the Labor Code — Defines ULP as including interference, restraint, or coercion of employees in the exercise of their right to self-organization.
• Article 248(g) of the Labor Code — Defines ULP as including refusal to bargain collectively with the employees' representative.
• Article 242(c) of the Labor Code — Grants legitimate labor organizations the right to be furnished by the employer, upon written request, with annual audited financial statements.
• Article 243 of the Labor Code — Guarantees employees' right to self-organization and collective bargaining.
• Article 263(g) of the Labor Code — Grants the Secretary of Labor the power to assume jurisdiction over labor disputes in industries indispensable to national interest.
• Article 1431 of the Civil Code — Defines estoppel as rendering an admission or representation conclusive upon the person making it.
• ILO Convention No. 87 (Freedom of Association and Protection of the Right to Organize) — Cited regarding workers' rights to establish organizations of their own choosing.
• ILO Convention No. 98 (Right to Organize and Collective Bargaining) — Cited regarding protection against interference in establishment and functioning of workers' organizations.