Laws & Jurisprudence
Good Faith Bargaining And Collective Bargaining Agreement Deadlock May Co-Exist
12:49 AM
In
anticipation of the expiration of the Collective Bargaining Agreement
(CBA) between the petitioner and the respondent Pilipinas Shell
Petroleum Corporation, the parties started negotiations for a new
CBA. After several meetings on the ground rules that would govern the
negotiations and on political items, the parties started their
discussion on the economic items. The union proposed a 20% annual
across-the-board basic salary increase for the next three years that
would be covered by the new CBA. In lieu of the annual salary
increases, the company made a counter-proposal to grant all covered
employees a lump sum amount ofP80,000.00
yearly for the three-year period of the new CBA.
The
union requested the company to present its counter-proposal in full
detail, similar to the presentation by the union of its economic
proposal. The company explained that the lump sum amount was based on
its affordability for the corporation, the then current salary levels
of the members of the union relative to the industry, and the then
current total pay and benefits package of the employees. The union
lowered its proposal to 12% annual across-the-board increase for the
next three years. For its part, the company increased its
counter-proposal to a yearly lump sum payment of P88,000.00
for the next three years. However, the union remained unconvinced and
asked for additional documents to justify the company’s
counter-offer. Alleging failure on the part of the company to justify
its offer, the union manifested that the company was bargaining in
bad faith. The company, in turn, expressed its disagreement with the
union’s manifestation.
After
several negotiations, the company proposed the declaration of a
deadlock and recommended that the help of a third party be sought.
The union replied that they would formally answer the proposal of the
company a day after the signing of the official minutes of the
meeting. On that same day, however, the union filed a Notice of
Strike in the National Conciliation and Mediation Board (NCMB),
alleging bad faith bargaining on the part of the company. The NCMB
immediately summoned the parties for the mandatory
conciliation-mediation proceedings but the parties failed to reach an
amicable settlement.
During
the cooling off period, the union conducted the necessary strike
vote. The members of the union, who participated in the voting,
unanimously voted for the holding of a strike. Upon being aware of
this development, the company filed a Petition for Assumption of
Jurisdiction with the Secretary of Labor and Employment. The
Secretary of Labor and Employment granted the petition of the
company.
The
union contended that the issue is the unfair labor practice of the
company in the form of bad faith bargaining and not the CBA deadlock.
Anchoring its position on item 8 of what the parties agreed upon as
the ground rules that would govern the negotiations, the union argued
that, at the time the Assumption Order was issued, there was no CBA
deadlock on account of the union’s non-conformity with the
declaration of a deadlock, as item 8 of the said ground rules
provided that a "deadlock can only be declared upon mutual
consent of both parties." Thus, the Secretary of Labor and
Employment committed grave abuse of discretion when she assumed
jurisdiction.
The
union insists that the corporation is guilty of unfair labor practice
through bad faith bargaining. According to the union, bad faith
bargaining and a CBA deadlock cannot legally co-exist because an
impasse in negotiations can only exist on the premise that both
parties are bargaining in good faith. Besides, there could have been
no deadlock between the parties as the union had not given its
consent to it, pursuant to item 8 of the ground rules governing the
parties’ negotiations which required mutual consent for a
declaration of deadlock.
ISSUE:
Is
there absence of good faith on the part of the respondent, Pilipinas
Shell Petroleum Corporation?
RULING:
No
absence of good faith on the part of the company. While the purpose
of collective bargaining is the reaching of an agreement between the
employer and the employee’s union resulting in a binding contract
between the parties, the failure to reach an agreement after
negotiations continued for a reasonable period does not mean lack of
good faith. The laws invite and contemplate a collective bargaining
contract but do not compel one. For after all, a CBA, like any
contract is a product of mutual consent and not of compulsion. As
such, the duty to bargain does not include the obligation to reach an
agreement. In this light, the corporation’s unswerving position on
the matter of annual lump sum payment in lieu of wage increase did
not, by itself, constitute bad faith even if such position caused a
stalemate in the negotiations.
As
there was no bad faith on the part of the company in its bargaining
with the union, deadlock was possible and did occur. The union’s
reliance on item 8 of the ground rules governing the parties’
negotiations which required mutual consent for a declaration of
deadlock was reduced to irrelevance by the actual facts. Contra
factum non valet argumentum. There is no argument against facts. And
the fact is that the negotiations between the union and the company
were stalled by the opposing offers of yearly wage increase by the
union, on the one hand, and annual lump sum payment by the company,
on the other hand. Each party found the other’s offer unacceptable
and neither party was willing to yield. The company suggested seeking
the assistance of a third party to settle the issue but the union
preferred the remedy of filing a notice of strike. Each party was
adamant in its position. Thus, because of the unresolved issue on
wage increase, there was actually a complete stoppage of the ongoing
negotiations between the parties and the union filed a Notice of
Strike. A mutual declaration would neither add to nor subtract from
the reality of the deadlock then existing between the parties. Thus,
the absence of the parties’ mutual declaration of deadlock does not
mean that there was no deadlock. At most, it would have been simply a
recognition of the prevailing status quo between the parties.
The
union is wrong. As discussed above, there was already an actual
existing deadlock between the parties. What was lacking was the
formal recognition of the existence of such a deadlock because the
union refused a declaration of deadlock. Thus, the union’s view
that, at the time the Secretary of Labor and Employment exercised her
power of assumption of jurisdiction, the issue of deadlock was
neither an incidental issue to the matter of unfair labor practice
nor an existing issue is incorrect.
G.R.
No. 170007, April 7, 2014
TABANGAO
SHELL REFINERY EMPLOYEES ASSOCIATION, Petitioner, vs. PILIPINAS
SHELL PETROLEUM CORPORATION, Respondent.
LEONARDO-DE
CASTRO, J.:
The author takes no responsibility for the validity, correctness and result of this work. The information provided is not a legal advice and it should not be used as a substitute for a competent legal advice from a licensed lawyer. See the disclaimer
0 comments