The Supreme Court ruled that Guagua National Colleges (GNC) engaged in bad faith bargaining by submitting a counter-proposal after leading its employees’ unions to believe that an agreement on a Collective Bargaining Agreement (CBA) had been reached. This decision reinforces the principle that employers must demonstrate genuine intent to reach an agreement during collective bargaining, upholding the rights of employees to fair labor practices and protecting the integrity of the CBA process.

Broken Promises: When Can a Union Claim Bad Faith Bargaining?

This case revolves around the failure of Guagua National Colleges (GNC) and its faculty and non-teaching unions to finalize a Collective Bargaining Agreement (CBA). The unions accused GNC of bad faith bargaining, alleging that the school administration reneged on agreed-upon terms after prolonged negotiations. The Supreme Court was asked to determine whether GNC had indeed violated its duty to bargain in good faith, and whether the final draft CBA submitted by the unions should be imposed as the binding agreement. The resolution of this dispute has significant implications for labor relations in the Philippines, particularly regarding the enforcement of collective bargaining rights and the role of good faith in negotiations.

The core issue revolves around the duty to bargain collectively in good faith, as mandated by Article 252 of the Labor Code. This duty requires both employers and unions to approach negotiations with a sincere desire to reach an agreement on wages, hours of work, and other terms and conditions of employment. The Supreme Court has consistently held that good faith bargaining is not simply a matter of form, but requires a genuine intent to find common ground and reach a consensus. The failure to bargain in good faith constitutes an unfair labor practice, which can lead to legal sanctions and remedies for the aggrieved party.

In this case, the unions argued that GNC had engaged in a series of actions that demonstrated a lack of genuine intent to reach an agreement. These actions included the belated submission of a counter-proposal after leading the unions to believe that an agreement had already been reached, the failure to respond to the unions’ concerns, and the unilateral withdrawal of certain employee benefits. The unions contended that these actions constituted a violation of GNC’s duty to bargain in good faith, and that the final draft CBA submitted by the unions should be imposed as the binding agreement between the parties.

GNC, on the other hand, argued that it had consistently engaged in negotiations with the unions, and that the submission of a counter-proposal was necessary due to the school’s financial difficulties and the need to address certain issues raised by the unions. GNC also denied that it had unilaterally withdrawn any employee benefits, and contended that the unions’ claims were without merit.

The Supreme Court, after reviewing the evidence presented by both parties, sided with the unions and found that GNC had indeed engaged in bad faith bargaining. The Court emphasized that the duty to bargain collectively requires more than simply going through the motions of negotiations; it requires a genuine intent to find common ground and reach an agreement. The Court found that GNC’s actions, including the belated submission of a counter-proposal and the failure to respond to the unions’ concerns, demonstrated a lack of genuine intent to bargain in good faith.

Specifically, the Court pointed to GNC’s failure to provide a timely reply/counter-proposal to the unions’ initial proposal, as required by Article 250 of the Labor Code. The Court also noted that GNC had led the unions to believe that an agreement had been reached on the economic terms of the CBA, only to later submit a counter-proposal that contradicted those terms. These actions, the Court held, were indicative of bad faith bargaining.

The Court quoted Article 252 of the Labor Code, emphasizing the requirement of good faith in collective bargaining:

ARTICLE 252. Meaning of duty to bargain collectively. – The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreements and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any agreement.

Building on this principle, the Court affirmed the NLRC’s imposition of the final CBA draft submitted by the unions as the governing agreement between the parties. This decision was based on the premise that GNC, by its acts of insincerity, had forfeited its right to further negotiate the terms and conditions of the CBA. The Court emphasized that fairness, equity, and social justice would be best served by imposing the CBA draft that reflected the agreements already reached by the parties.

The Court addressed GNC’s argument that the dispute should have been referred to voluntary arbitration, citing the “no-strike, no lock-out” clause in the CBA. The Court clarified that such clauses are generally applicable to economic strikes but not to strikes grounded on unfair labor practices. Since the unions’ strike notice was primarily based on GNC’s alleged bad faith bargaining, the Court found that the Secretary of Labor and Employment correctly certified the dispute to the NLRC for compulsory arbitration.

The Court also rejected GNC’s reliance on the case of University of San Agustin Employees’ Union-FFW v. Court of Appeals, distinguishing the facts of that case from the present one. In University of San Agustin, the dispute primarily involved the interpretation of the CBA, which fell under the jurisdiction of the voluntary arbitrator. In contrast, the dispute in this case centered on GNC’s alleged commission of unfair labor practice, which is a matter for compulsory arbitration.

The Supreme Court’s decision in this case underscores the importance of good faith in collective bargaining and provides valuable guidance for employers and unions in the Philippines. The decision clarifies that the duty to bargain collectively requires more than simply going through the motions of negotiations; it requires a genuine intent to find common ground and reach an agreement. Employers who fail to bargain in good faith may face legal sanctions and remedies, including the imposition of the unions’ proposed CBA.

The ruling also highlights the distinction between economic strikes and strikes based on unfair labor practices, clarifying the applicability of “no-strike, no lock-out” clauses in CBAs. This distinction is crucial for determining the appropriate forum for resolving labor disputes and protecting the rights of employees to engage in concerted activities.

FAQs

What was the key issue in this case?	The key issue was whether Guagua National Colleges (GNC) engaged in bad faith bargaining, violating its duty to bargain collectively with its employees’ unions. The unions claimed GNC reneged on agreed terms, while GNC argued it negotiated in good faith.
What is the duty to bargain collectively in good faith?	The duty to bargain collectively in good faith, as defined by Article 252 of the Labor Code, requires both employers and unions to approach negotiations with a sincere desire to reach an agreement on wages, hours of work, and other terms and conditions of employment. This involves a genuine intent to find common ground and reach a consensus.
What constitutes bad faith bargaining?	Bad faith bargaining can be inferred from an employer’s actions that demonstrate a lack of genuine intent to reach an agreement. These actions may include delaying tactics, refusal to provide information, unilateral changes in working conditions, and reneging on agreed-upon terms.
What is the significance of a “no-strike, no lock-out” clause in a CBA?	A “no-strike, no lock-out” clause typically applies to economic strikes, which are aimed at forcing wage or other agreements from the employer. It does not apply to strikes based on unfair labor practices, which are intended to protest illegal actions by the employer.
What remedies are available for bad faith bargaining?	When an employer is found to have engaged in bad faith bargaining, the NLRC may impose various remedies, including ordering the employer to cease and desist from engaging in such practices, ordering the employer to bargain in good faith, and imposing the unions’ proposed CBA as the binding agreement.
Why was the case not referred to voluntary arbitration?	The case was not referred to voluntary arbitration because the primary issue was GNC’s alleged commission of unfair labor practice, which falls under the jurisdiction of compulsory arbitration. While voluntary arbitration is preferred for disputes arising from CBA interpretation, unfair labor practice cases are typically handled through compulsory arbitration.
What was the basis for imposing the unions’ final CBA draft?	The NLRC imposed the unions’ final CBA draft because GNC, by its acts of insincerity and bad faith bargaining, forfeited its right to further negotiate the terms and conditions of the CBA. The Court deemed that imposing the draft was fair, equitable, and served the interests of social justice.
What is the role of the Secretary of Labor and Employment in labor disputes?	The Secretary of Labor and Employment has the authority to assume jurisdiction over labor disputes that affect national interest and to certify such disputes to the NLRC for compulsory arbitration. This power is aimed at promoting industrial peace and protecting the rights of workers.

The Supreme Court’s decision in Guagua National Colleges v. Guagua National Colleges Faculty Labor Union serves as a reminder of the importance of good faith in collective bargaining and the need for employers to respect the rights of their employees. This ruling reinforces the principle that employers must demonstrate genuine intent to reach an agreement during collective bargaining, upholding the rights of employees to fair labor practices.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.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 vs. GUAGUA NATIONAL COLLEGES FACULTY LABOR UNION, G.R. No. 204693, July 13, 2016