G.R. No. L-25291. January 30, 1971.
THE INSULAR LIFE ASSURANCE CO., LTD., EMPLOYEES ASSOCIATION-NATU, ET AL., petitioners, vs. THE INSULAR LIFE ASSURANCE CO., LTD., ET AL., respondents.

FACTS

Petitioner unions, while affiliated with the Federation of Free Workers (FFW), entered into collective bargaining agreements with respondent companies. Their former lawyer, Ramon Garcia, who had actively opposed their disaffiliation from FFW, was subsequently hired by the companies as a legal assistant. During negotiations for a new CBA, a deadlock arose primarily over the union security clause. The companies refused to make any counter-proposals unless the unions first dropped this demand, threatening to withdraw the retroactivity of agreed benefits. The unions eventually dropped the demand, but negotiations then stalled on economic issues like salary increases. The companies, instead of presenting counter-proposals, asked the unions to submit a “workable formula” based on the companies’ financial data. The unions declared a strike, alleging unfair labor practices. During the strike, the companies, through respondent Jose M. Olbes, sent a letter to strikers offering incentives like free meals, movies, and overtime pay to entice them to return to work. Furthermore, the companies reclassified 87 union members as supervisors during negotiations, causing them to resign from the union.

ISSUE

Whether the respondents committed unfair labor practices under the Industrial Peace Act ( Republic Act No. 875 ).

RULING

Yes. The Supreme Court found the respondents guilty of unfair labor practices. The legal logic is anchored on the totality of the respondents’ conduct, which constituted bad faith in collective bargaining. First, the hiring of the unions’ former counsel, Ramon Garcia, who had knowledge of union strategy, created a conflict of interest and was indicative of an attempt to undermine the unions. Second, the companies’ refusal to bargain in good faith was manifest in their insistence that the unions unilaterally abandon the union security clause as a precondition for any negotiation on other items, and their subsequent failure to present substantive counter-proposals on economic demands, instead shifting the burden to the unions to justify their proposals. This evasive tactic was a clear refusal to bargain collectively. Third, the mass reclassification of 87 union members to supervisory status during active negotiations was a blatant act of interference with the employees’ right to self-organization, aimed at weakening the bargaining unit. Finally, the strikebreaking letter of May 21, 1958, offering special benefits to entice strikers to return, constituted an independent unfair labor practice by interfering with the employees’ right to strike. The Court emphasized that good faith bargaining requires a sincere effort to reach an agreement, which was absent here. The confluence of these acts demonstrated a pattern of conduct designed to frustrate the bargaining process and defeat the legitimate rights of the unions.