Collective Bargaining Agreement


▪ A CBA is a contract entered by the employer and the workers’ sole and exclusive bargaining agent, who shall be the only one authorized to represent the employees for the purpose of collective bargaining.

▪ There are time periods that have to be observed.

▪ CBA provisions may be economic or non-economic.

1. Concepts

“Collective bargaining agreement” – refers to the contract entered by the employer and the workers’ sole and exclusive bargaining agent on the wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party. (See Article 263, P.D. 442, Labor Code)

A collective bargaining agreement refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit. (Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, G.R. No. 145561, 15 June 2005)

a. Law between the parties

It is a familiar and fundamental doctrine in labor law that the CBA is the law between the parties and they are obliged to comply with its provisions. (Benson Industries Employees Union-ALU-TUCP v. Benson Industries, Inc., G.R. No. 200746, 06 August 2014)

b. Autonomy principle

As in all contracts, the parties in a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient provided these are not contrary to law, morals, good customs, public order or public policy. Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, supra.)

2. Time periods

a. 5-year rule and 60-day freedom period

Art. 265. Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five-year term of the Collective Bargaining Agreement. (P.D. 442, Labor Code)

1) Status quo

At the expiration of the freedom period, the employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election is filed. (Article 268, P.D. 442, Labor Code)

While it is incumbent for the employer to continue to recognize the majority status of the incumbent bargaining agent even after the expiration of the freedom period, they could only do so when no petition for certification election was filed. The reason is, with a pending petition for certification, any such agreement entered into by management with a labor organization is fraught with the risk that such a labor union may not be chosen thereafter as the collective bargaining representative. The provision for status quo is conditioned on the fact that no certification election was filed during the freedom period. Any other view would render nugatory the clear statutory policy to favor certification election as the means of ascertaining the true expression of the will of the workers as to which labor organization would represent them. (Picop Resources, Incorporated v. Dequilla, G.R. No. 172666, 07 December 2011)

Picop Resources, Incorporated v. Dequilla, G.R. No. 172666, 07 December 2011

⦁ “In the instant case, four (4) petitions were filed as early as May 12, 2000. In fact, a petition for certification election was already ordered by the Med-Arbiter of DOLE Caraga Region on August 23, 2000. Therefore, following Article 256, at the expiration of the freedom period, [the employer’s] obligation to recognize NAMAPRI-SPFL as the incumbent bargaining agent does not hold true when petitions for certification election were filed, as in this case.”

⦁ “Moreover, the last sentence of Article 253 which provides for automatic renewal pertains only to the economic provisions of the CBA, and does not include representational aspect of the CBA. An existing CBA cannot constitute a bar to a filing of a petition for certification election. When there is a representational issue, the status quo provision in so far as the need to await the creation of a new agreement will not apply. Otherwise, it will create an absurd situation where the union members will be forced to maintain membership by virtue of the union security clause existing under the CBA and, thereafter, support another union when filing a petition for certification election. If we apply it, there will always be an issue of disloyalty whenever the employees exercise their right to self-organization. The holding of a certification election is a statutory policy that should not be circumvented, or compromised.”

⦁ “Time and again, we have ruled that we adhere to the policy of enhancing the welfare of the workers. Their freedom to choose who should be their bargaining representative is of paramount importance. The fact that there already exists a bargaining representative in the unit concerned is of no moment as long as the petition for certification election was filed within the freedom period. What is imperative is that by such a petition for certification election the employees are given the opportunity to make known of who shall have the right to represent them thereafter. Not only some, but all of them should have the right to do so. What is equally important is that everyone be given a democratic space in the bargaining unit concerned.”

2) If CBA is extended

FVCLU-PTGWO v. SANAMA-FVC-SIGLO, G.R. No. 176249, 27 November 2009

⦁ “The root of the controversy can be traced to a misunderstanding of the interaction between a union’s exclusive bargaining representation status in a CBA and the term or effective period of the CBA.”

⦁ “FVCLU-PTGWO has taken the view that its exclusive representation status should fully be in step with the term of the CBA and that this status can be challenged only within 60 days before the expiration of this term. Thus, when the term of the CBA was extended, its exclusive bargaining status was similarly extended so that the freedom period for the filing of a petition for certification election should be counted back from the expiration of the amended CBA term.”

⦁ “We hold this FVCLU-PTGWO position to be correct, but only with respect to the original five-year term of the CBA which, by law, is also the effective period of the union’s exclusive bargaining representation status. While the parties may agree to extend the CBA’s original five-year term together with all other CBA provisions, any such amendment or term in excess of five years will not carry with it a change in the union’s exclusive collective bargaining status. By express provision of the above-quoted Article 253-A, the exclusive bargaining status cannot go beyond five years and the representation status is a legal matter not for the workplace parties to agree upon. In other words, despite an agreement for a CBA with a life of more than five years, either as an original provision or by amendment, the bargaining union’s exclusive bargaining status is effective only for five years and can be challenged within sixty (60) days prior to the expiration of the CBA’s first five years…”

⦁ “In the present case, the CBA was originally signed for a period of five years, i.e., from February 1, 1998 to January 30, 2003, with a provision for the renegotiation of the CBA’s other provisions at the end of the 3rd year of the five-year CBA term. Thus, prior to January 30, 2001 the workplace parties sat down for renegotiation but instead of confining themselves to the economic and non-economic CBA provisions, also extended the life of the CBA for another four months, i.e., from the original expiry date on January 30, 2003 to May 30, 2003.”

⦁ “As discussed above, this negotiated extension of the CBA term has no legal effect on the FVCLU-PTGWO’s exclusive bargaining representation status which remained effective only for five years ending on the original expiry date of January 30, 2003. Thus, sixty days prior to this date, or starting December 2, 2002, SANAMA-SIGLO could properly file a petition for certification election. Its petition, filed on January 21, 2003 or nine (9) days before the expiration of the CBA and of FVCLU-PTGWO’s exclusive bargaining status, was seasonably filed.”

c. 3-year renegotiation

Art. 265. x x x All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. (P.D. 442, Labor Code)

d. 6-month from expiration

Art. 265. x x x Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the Collective Bargaining Agreement, the parties may exercise their rights under the Labor Code. (P.D. 442, Labor Code)

3. Representation

a. Substitutionary doctrine

“[S]ubstitutionary” doctrine only provides that the employees cannot revoke the validly executed collective bargaining contract with their employer by the simple expedient of changing their bargaining agent. And it is in the light of this that the phrase “said new agent would have to respect said contract” must be understood. It only means that the employees, thru their new bargaining agent, cannot renege on their collective bargaining contract, except of course to negotiate with management for the shortening thereof. (Benguet Consolidated, Inc. v. BCI Employees, G.R. No. L-24711, En Banc, 30 April 1968)

In formulating the “substitutionary” doctrine, the only consideration involved was the employees’ interest in the existing bargaining agreement. The agent’s interest never entered the picture. (Ibid.)

Benguet Consolidated, Inc. v. BCI Employees and Workers Union-PAFLU, En Banc, G.R. No. L-24711, 30 April 1968

⦁ The “substitutionary” doctrine… cannot be invoked to support the contention that a newly certified collective bargaining agent automatically assumes all the personal undertakings — like the no-strike stipulation here — in the collective bargaining agreement made by the deposed union. When [the deposed union] bound itself and its officers not to strike, it could not have validly bound also all the other rival unions existing in the bargaining units in question. [The deposed union] was the agent of the employees, not of the other unions which possess distinct personalities. To consider [the new union] contractually bound to the no-strike stipulation would therefore violate the legal maxim that res inter alios nec prodest nec nocet.”

4. CBA provisions

a. Economic provisions

CBA economic provisions refer to compensation and benefits, including but not limited, salaries/wages, 13th month pay, overtime pay, night shift differential pay, holiday pay, premium pay, retirement pay, service charges, separation pay, and analogous thereto, as well as service incentive leave, maternity leave, paternity leave, solo parental leave, special leave for women, VAWC leave, and similar thereto.

b. Non-economic provisions

CBA non-economic provisions refer to those not related to compensation and benefits, such as working conditions, holiday swapping, personal protective equipment, due process and disciplinary action, last-in-first-out, redundancy, retrenchment, and similar terms unrelated to economic benefits.

5. CBA benefits

a. Coverage

1) Union and non-union members

[W]hatever benefits the majority union obtains from the employer accrue to its members as well as to nonmembers. But this alone does not justify the collection of agency fee from non-members. For the benefits of a collective bargaining agreement are extended to all employees regardless of their membership in the union because to withhold the same from the nonmembers would be to discriminate against them. (National Brewery & Allied Industries Labor Union of the Philippines v. San Miguel, Brewery Inc., En Banc, G.R. No. L-18170, 31 August 1963)

But the benefits that accrue to nonmembers by reason of a collective bargaining agreement can hardly be termed “unjust enrichment” because, as already pointed out, the same are extended to them precisely to avoid discrimination among employees. (Ibid. citing International Oil Factory Workers’ Union (FFW) v. Martinez, G.R. No. L-15560, Dec. 31, 1960)

2) Excluded: Managers; With exception

GENERAL RULE: [M]anagerial employees cannot, in the absence of an agreement to the contrary, be allowed to share in the concessions obtained by the labor union through collective negotiation. Otherwise, they would be exposed to the temptation of colluding with the union during the negotiations to the detriment of the employer. (Martinez v. NLRC, GMCR, Inc., G.R. No. 118743, 12 October 1998)

EXCEPTION: However, there is nothing to prevent the employer from granting benefits to managerial employees equal to or higher than those afforded to union members. There can be no conflict of interest where the employer himself voluntarily agrees to grant such benefits to managerial employees. (Ibid.)


Book V, Presidential Decree No. 442, a.k.a. Labor Code of the Philippines

Book V, Omnibus Rules Implementing the Labor Code

DOLE Department Order No. 40, Series of 2003

DOLE Department Order No. 40-A-I, Series of 2003

DOLE Department Order No. 40-B, Series of 2003

DOLE Department Order No. 40-C, Series of 2004

DOLE Department Order No. 40-D, Series of 2005

DOLE Department Order No. 40-F-3, Series of 2008

DOLE Department Order No. 40-G-03, Series of 2010

DOLE Department Order No. 40-I, Series of 2015

DOLE Department Order No. 15, Series of 2015

/Updated: December 28, 2022

Disclaimer: All information is for educational and general information only. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

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