TL;DR

The Supreme Court affirmed that Guagua National Colleges (GNC) engaged in unfair labor practice by bargaining in bad faith. GNC failed to genuinely negotiate a Collective Bargaining Agreement (CBA) with its employees’ unions, leading them to believe an agreement was reached, only to later submit a counter-proposal. The Court upheld the National Labor Relations Commission’s (NLRC) decision to impose the unions’ final CBA draft as the binding agreement for 2009-2014. This case underscores the crucial legal duty of employers to bargain in good faith and not merely go through the motions of negotiation, reinforcing the protection of workers’ rights to fair collective bargaining and preventing employers from undermining labor agreements through delaying tactics.

Bargaining Breakdown: When a ‘No Strike’ Clause Couldn’t Shield Bad Faith

This case, Guagua National Colleges vs. Guagua National Colleges Faculty Labor Union, revolves around a contentious Collective Bargaining Agreement (CBA) negotiation that spiraled into allegations of unfair labor practice. At the heart of the dispute was whether Guagua National Colleges (GNC) negotiated in good faith with its faculty and non-teaching staff unions, or if it merely engaged in delaying tactics to avoid reaching a fair agreement. The unions, frustrated by what they perceived as GNC’s insincere bargaining, filed a notice of strike, citing bad faith bargaining as a key grievance. GNC, in turn, argued that the dispute should have been resolved through voluntary arbitration, citing a ‘no-strike, no lock-out’ clause in their existing CBA. The Supreme Court had to determine whether GNC truly bargained in good faith, and if the labor dispute was properly handled by the NLRC or should have been relegated to voluntary arbitration.

The narrative unfolds with GNC and its unions having a history of successful CBA negotiations. However, the 2009 CBA renewal talks took a different turn. After the unions submitted their proposals, GNC failed to provide a timely counter-proposal, instead engaging in oral discussions. The unions believed they had reached an agreement on key economic terms, a belief seemingly supported by statements from GNC’s representatives. However, GNC later submitted a counter-proposal that contradicted these perceived agreements, leading the unions to file a preventive mediation case and eventually a notice of strike alleging bad faith bargaining and unfair labor practices. The Secretary of Labor and Employment assumed jurisdiction and certified the case to the NLRC for compulsory arbitration, effectively enjoining the strike. GNC contested the NLRC’s jurisdiction, arguing for voluntary arbitration based on the CBA’s ‘no-strike, no lock-out’ clause and grievance machinery.

The Supreme Court addressed the jurisdictional question first. It clarified that while the CBA contained a ‘no-strike, no lock-out’ clause and provisions for grievance machinery and voluntary arbitration, these are not absolute bars to strike action or compulsory arbitration, especially when unfair labor practices are alleged. The Court emphasized that a ‘no-strike, no lock-out’ clause is generally inapplicable when a strike is grounded on unfair labor practices, as was the case here. The unions’ strike notice was prompted by their perception of GNC’s bad faith bargaining, a form of unfair labor practice under Article 248(g) of the Labor Code. The Court distinguished this case from University of San Agustin Employees’ Union-FFW v. Court of Appeals, where the dispute genuinely involved CBA interpretation, falling under voluntary arbitration. Here, the core issue was GNC’s alleged bad faith, not CBA interpretation, thus placing it within the realm of compulsory arbitration.

The Court then delved into whether GNC bargained in bad faith. Article 252 of the Labor Code defines the duty to bargain collectively as performing a mutual obligation to meet and convene promptly and expeditiously in good faith. Good faith bargaining, the Court reiterated, is not about reaching an agreement at all costs, but about the sincerity and genuine effort to negotiate fairly. The Court meticulously examined GNC’s actions, highlighting several indicators of bad faith. These included GNC’s failure to submit a timely counter-proposal, its initial oral negotiations followed by a contradictory written counter-proposal after agreements were seemingly reached, and its lack of transparency regarding its alleged financial difficulties during negotiations. The Court noted that GNC’s conduct at both the plant level and during NCMB mediation demonstrated a pattern of leading the unions to believe in an agreement, only to backtrack and introduce new obstacles.

Crucially, the Supreme Court underscored that the employer’s duty to bargain in good faith includes a willingness to present and discuss its position openly and honestly. GNC’s claim of financial hardship, raised late in the negotiation process and without substantial prior discussion, was deemed a tactic to stall the agreement. The Court stated:

There must be common willingness among the parties to discuss freely and fully their respective claims and demands and, when these are opposed, to justify them on reason.

GNC’s failure to openly discuss its financial situation and its sudden submission of a counter-proposal after apparent agreement was reached were viewed as attempts to evade its bargaining duty. The Court found no merit in GNC’s justifications for the counter-proposal, including the need for separate CBAs or improved provisions, as these were not raised during initial negotiations. Consequently, the Supreme Court affirmed the NLRC’s finding of bad faith bargaining and upheld the imposition of the unions’ final CBA draft for the period of 2009-2014. This remedy, the Court explained, is consistent with precedents like Kiok Lay v. National Labor Relations Commission and General Milling Corporation v. Court of Appeals, where employers who bargain in bad faith forfeit their right to further negotiation, and the union’s proposal can be imposed as the CBA.

In conclusion, this case serves as a significant reminder of the legal imperative to bargain in good faith in the Philippines. Employers cannot merely go through the motions of negotiation; they must demonstrate genuine intent to reach a fair agreement. Bad faith tactics, such as delaying counter-proposals, reneging on apparent agreements, and lack of transparency, can lead to findings of unfair labor practice and the imposition of the union’s CBA proposal. The ruling reinforces the protection of workers’ rights to collective bargaining and ensures that ‘no-strike, no lock-out’ clauses are not misused to shield employers from their duty to negotiate fairly and in good faith.

FAQs

For inquiries regarding the application of this ruling to specific circumstances, please contact Atty. Gabriel Ablola through gaboogle.com or via email at connect@gaboogle.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Guagua National Colleges v. Guagua National Colleges Faculty Labor Union, G.R. No. 204693, July 13, 2016