G.R. No. L-54334. January 22, 1986.
KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN), respondents.

FACTS

Following a certification election, the Pambansang Kilusang Paggawa (Union) was certified as the sole and exclusive bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant (Company). The Union furnished the Company with copies of its proposed collective bargaining agreement on December 7, 1978, and requested counter-proposals. The Company ignored this and subsequent written requests to bargain. Consequently, the Union filed a Notice of Strike. Conciliation failed, leading the Bureau of Labor Relations to certify the case to the NLRC for compulsory arbitration.
During the arbitration proceedings before the Labor Arbiter, the Company engaged in dilatory tactics. It failed to submit its position paper on time, its counsel withdrew, and its new counsel requested postponements. When a hearing was finally set, the Company’s representative failed to appear. The Labor Arbiter thus denied a further postponement, deemed the Company to have waived its right to present evidence, and submitted the case for resolution. The NLRC subsequently found the Company guilty of unfair labor practice for unjustified refusal to bargain and declared the Union’s draft proposal as the governing collective bargaining agreement.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in: (1) finding the Company guilty of unfair labor practice for refusal to bargain; and (2) adopting the Union’s proposed collective bargaining agreement as the governing agreement between the parties.

RULING

The Supreme Court dismissed the petition, upholding the NLRC’s decision. On the first issue, the Court ruled that the Company’s actions constituted a clear refusal to bargain in good faith, an unfair labor practice under Article 249(g) of the Labor Code. Good faith bargaining requires not only the willingness to meet but also to discuss proposals with an open mind and a sincere desire to reach an agreement. The Company’s pattern of ignoring the Union’s requests, failing to submit counter-proposals, and employing dilatory tactics during arbitration demonstrated a lack of sincere intention to negotiate. Its claim of only receiving the proposal later was unavailing, as its conduct before and after showed bad faith.
On the second issue, the Court held that the NLRC acted within its authority in adopting the Union’s draft proposal as the collective bargaining agreement. In a certified case where an employer refuses to bargain, the NLRC is empowered to determine reasonable terms and conditions of employment. The Company’s failure to participate meaningfully in the proceedings and to present evidence on the unreasonableness of the Union’s proposals precluded it from assailing the agreement’s terms. The Court accorded deference to the NLRC’s finding that the proposal was reasonable under the circumstances. The Company’s procedural due process claim was rejected, as it had waived its right to present evidence through its own unjustified delays and non-appearance.