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21. G.R. No. 107792 March 2, 1998

SAMAHANG MANGGAGAWA SA PERMEX (SMP-PIILU-TUCP), petitioners,

vs.
THE SECRETARY OF LABOR, NATIONAL FEDERATION OF LABOR, PERMEX PRODUCER AND
EXPORTER CORPORATION, respondents.

MENDOZA, J.:

This is a petition for review on certiorari of the decision, dated October 8, 1992 and order dated November 12, 1992, of
Undersecretary of Labor and Employment Bienvenido Laguesma, ordering a certification election to be conducted among
the employees of respondent company.

The facts of the case are as follows. On January 15, 1991, a certification election was conducted among employees of
respondent Permex Producer and Exporter Corporation (hereafter referred to as Permex Producer). The results of the
elections were as follows:

National Federation of 235

Labor (NFL)
No Union 466
Spoiled Ballots 18
Marked Ballots 9
Challenged Ballots 7

However, some employees of Permex Producer formed a labor organization known as the Samahang Manggagawa sa
Permex (SMP) which they registered with the Department of Labor and Employment on March 11, 1991. The union later
affiliated with the Philippine Integrated Industries Labor Union (PIILU).

On August 16, 1991, Samahang Manggagawa sa Permex-Philippine Integrated Industries Labor Union (SMP-PIILU),
wrote the respondent company requesting recognition as the sole and exclusive bargaining representative of employees at
the Permex Producer. On October 19, 1991 Permex Producer recognized SMP-PIILU and, on December 1, entered into a
collective bargaining agreement with it. The CBA was ratified between December 9 and 10, 1991 by the majority of the
rank and file employees of Permex Producer. On December 13, 1991, it was certified by the DOLE.

On February 25, 1992, respondent NFL filed a petition for certification election, but it was dismissed by Med-Arbiter
Edgar B. Gongalos in an order dated August 20, 1992. Respondent NFL then appealed the order to the Secretary of Labor
and Employment. On October 8, 1992, the Secretary of Labor, through Undersecretary Bienvenido Laguesma, set aside
the order of the Med-Arbiter and ordered a certification election to be conducted among the rank and file employees at the
Permex Producer, with the following choices:

1. National Federation of Labor

2. Samahang Manggagawa sa Permex

3. No union

Petitioner moved for a reconsideration but its motion was denied in an order dated November 12, 1992. Hence, this
petition.

Two arguments are put forth in support of the petition. First, it is contended that petitioner has been recognized by the
majority of the employees at Permex Producer as their sole collective bargaining agent. Petitioner argues that when a
group of employees constituting themselves into an organization and claiming to represent a majority of the work force
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requests the employer to bargain collectively, the employer may do one of two things. First, if the employer is satisfied
with the employees' claim the employer may voluntarily recognize the union by merely bargaining collectively with it. The
formal written confirmation is ordinarily stated in the collective bargaining agreement. Second, if on the other hand, the
employer refuses to recognize the union voluntarily, it may petition the Bureau of Labor Relations to conduct a
certification election. If the employer does not submit a petition for certification election, the union claiming to represent
the employees may submit the petition so that it may be directly certified as the employees' representative or a
certification election may be held.

The case of Ilaw at Buklod ng Manggagawa v. Ferrer-Calleja, 1 cited by the Solicitor General in his comment filed in
behalf of the NLRC, is particularly apropos. There, the union also requested voluntary recognition by the company.
Instead of granting the request, the company petitioned for a certification election. The union moved to dismiss on the
ground that it did not ask the company to bargain collectively with it. As its motion was denied, the union brought the
matter to this Court. In sustaining the company's stand, this Court ruled:

. . . Ordinarily, in an unorganized establishment like the Calasiao Beer Region, it is the union that files a
petition for a certification election if there is no certified bargaining agent for the workers in the
establishment. If a union asks the employer to voluntarily recognize it as the bargaining agent of the
employees, as the petitioner did, it in effect asks the employer to certify it as the bargaining representative
of the employees — A CERTIFICATION WHICH THE EMPLOYER HAS NO AUTHORITY TO GIVE, for it
is the employees' prerogative (not the employer's) to determine whether they want a union to represent
them, and, if so, which one it should be. (emphasis supplied)

In accordance with this ruling, Permex Producer should not have given its voluntary recognition to SMP-PIILU-TUCP
when the latter asked for recognition as exclusive collective bargaining agent of the employees of the company. The
company did not have the power to declare the union the exclusive representative of the workers for the purpose of
collective bargaining,

Indeed, petitioner's contention runs counter to the trend towards the holding of certification election. By virtue of
Executive Order No. 111, which became effective on March 4, 1987, the direct certification previously allowed under the
Labor Code had been discontinued as a method of selecting the exclusive bargaining agents of the workers. 2 Certification
election is the most effective and the most democratic way of determining which labor organization can truly represent the
working force in the appropriate bargaining unit of a company. 3

Petitioner argues that of the 763 qualified employees of Permex Producer, 479 supported its application for registration
with the DOLE and that when petitioner signed the CBA with the company, the CBA was ratified by 542 employees.
Petitioner contends that such support by the majority of the employees justifies its finding that the CBA made by it is valid
and binding.

But it is not enough that a union has the support of the majority of the employees. It is equally important that everyone in
the bargaining unit be given the opportunity to express himself. 4

This is especially so because, in this case, the recognition given to the union came barely ten (10) months after the
employees had voted "no union" in the certification election conducted in the company. As pointed out by respondent
Secretary of Labor in his decision, there can be no determination of a bargaining representative within a year of the
proclamation of the results of the certification election. 5 Here the results, which showed that 61% of the employees voted
for "no union," were certified only on February 25, 1991 but on December 1, 1991 Permex Producer already recognized the
union and entered into a CBA with it.

There is something dubious about the fact that just ten (10) months after the employees had voted that they did not want
any union to represent them, they would be expressing support for petitioner. The doubt is compounded by the fact that in
sworn affidavits some employees claimed that they had either been coerced or misled into signing a document which
turned out to be in support of petitioner as its collective bargaining agent. Although there were retractions, we agree with
the Solicitor General that retractions of statements by employees adverse to a company (or its favored union) are
oftentimes tainted with coercion and intimidation. For how could one explain the seeming flip-flopping of position taken
by the employees? The figures claimed by petitioner to have been given to it in support cannot readily be accepted as true.

Second. Petitioner invokes the contract-bar rule. They contend that under Arts. 253, 253-A and 256 of the Labor Code and
Book V, Rule 5, §3 of its Implementing Rules and Regulations, a petition for certification election or motion for
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intervention may be entertained only within 60 days prior to the date of expiration of an existing collective bargaining
agreement. The purpose of the rule is to ensure stability in the relationships of the workers and the management by
preventing frequent modifications of any collective bargaining agreement earlier entered into by them in good faith and
for the stipulated original period. Excepted from the contract-bar rule are certain types of contracts which do not foster
industrial stability, such as contracts where the identity of the representative is in doubt. Any stability derived from such
contracts must be subordinated to the employees' freedom of choice because it does not establish the kind of industrial
peace contemplated by the law. 6 Such situation obtains in this case. The petitioner entered into a CBA with Permex
Producer when its status as exclusive bargaining agent of the employees had not been established yet.

WHEREFORE, the challenged decision and order of the respondent Secretary of Labor are AFFIRMED.

SO ORDERED.

22. G.R. No. 85750 September 28, 1990

INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION, petitioner

vs
HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND
TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU respondents.

G.R. No. 89331 September 28, 1990

KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR ASSOCIATION IN LINE

INDUSTRIES AND AGRICULTURE, petitioner,
vs
SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE RESEARCH INSTITUTE,
INC., respondents.

Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750.

Dominguez, Armamento, Cabana & Associates for petitioner in G.R. No. 89331.

Jimenez & Associates for IRRI.

Alfredo L. Bentulan for private respondent in 85750.

MELENCIO-HERRERA, J.:

Consolidated on 11 December 1989, these two cases involve the validity of the claim of immunity by the International
Catholic Migration Commission (ICMC) and the International Rice Research Institute, Inc. (IRRI) from the application of
Philippine labor laws.

Facts and Issues

A. G.R. No. 85750 — the International Catholic Migration Commission (ICMC) Case.

As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from South Vietnam's communist rule
confronted the international community.

In response to this crisis, on 23 February 1981, an Agreement was forged between the Philippine Government and the
United Nations High Commissioner for Refugees whereby an operating center for processing Indo-Chinese refugees for
eventual resettlement to other countries was to be established in Bataan (Annex "A", Rollo, pp. 22-32).
 4

ICMC was one of those accredited by the Philippine Government to operate the refugee processing center in Morong,
Bataan. It was incorporated in New York, USA, at the request of the Holy See, as a non-profit agency involved in
international humanitarian and voluntary work. It is duly registered with the United Nations Economic and Social Council
(ECOSOC) and enjoys Consultative Status, Category II. As an international organization rendering voluntary and
humanitarian services in the Philippines, its activities are parallel to those of the International Committee for Migration
(ICM) and the International Committee of the Red Cross (ICRC) [DOLE Records of BLR Case No. A-2-62-87, ICMC v.
Calleja, Vol. 1].

On 14 July 1986, Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then Ministry of Labor and
Employment a Petition for Certification Election among the rank and file members employed by ICMC The latter opposed
the petition on the ground that it is an international organization registered with the United Nations and, hence, enjoys
diplomatic immunity.

On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed the petition for lack of jurisdiction.

On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR), reversed the Med-Arbiter's Decision
and ordered the immediate conduct of a certification election. At that time, ICMC's request for recognition as a specialized
agency was still pending with the Department of Foreign Affairs (DEFORAF).

Subsequently, however, on 15 July 1988, the Philippine Government, through the DEFORAF, granted ICMC the status of a
specialized agency with corresponding diplomatic privileges and immunities, as evidenced by a Memorandum of
Agreement between the Government and ICMC (Annex "E", Petition, Rollo, pp. 41-43), infra.

ICMC then sought the immediate dismissal of the TUPAS Petition for Certification Election invoking the immunity
expressly granted but the same was denied by respondent BLR Director who, again, ordered the immediate conduct of a
pre-election conference. ICMC's two Motions for Reconsideration were denied despite an opinion rendered by DEFORAF
on 17 October 1988 that said BLR Order violated ICMC's diplomatic immunity.

Thus, on 24 November 1988, ICMC filed the present Petition for Certiorari with Preliminary Injunction assailing the BLR
Order.

On 28 November 1988, the Court issued a Temporary Restraining Order enjoining the holding of the certification election.

On 10 January 1989, the DEFORAF, through its Legal Adviser, retired Justice Jorge C. Coquia of the Court of Appeals,
filed a Motion for Intervention alleging that, as the highest executive department with the competence and authority to act
on matters involving diplomatic immunity and privileges, and tasked with the conduct of Philippine diplomatic and
consular relations with foreign governments and UN organizations, it has a legal interest in the outcome of this case.

Over the opposition of the Solicitor General, the Court allowed DEFORAF intervention.

On 12 July 1989, the Second Division gave due course to the ICMC Petition and required the submittal of memoranda by
the parties, which has been complied with.

As initially stated, the issue is whether or not the grant of diplomatic privileges and immunites to ICMC extends to
immunity from the application of Philippine labor laws.

ICMC sustains the affirmative of the proposition citing (1) its Memorandum of Agreement with the Philippine
Government giving it the status of a specialized agency, (infra); (2) the Convention on the Privileges and Immunities of
Specialized Agencies, adopted by the UN General Assembly on 21 November 1947 and concurred in by the Philippine
Senate through Resolution No. 91 on 17 May 1949 (the Philippine Instrument of Ratification was signed by the President
on 30 August 1949 and deposited with the UN on 20 March 1950) infra; and (3) Article II, Section 2 of the 1987
Constitution, which declares that the Philippines adopts the generally accepted principles of international law as part of
the law of the land.

Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and seeks an affirmance of the DEFORAF
determination that the BLR Order for a certification election among the ICMC employees is violative of the diplomatic
immunity of said organization.
 5

Respondent BLR Director, on the other hand, with whom the Solicitor General agrees, cites State policy and Philippine
labor laws to justify its assailed Order, particularly, Article II, Section 18 and Article III, Section 8 of the 1987
Constitution, infra; and Articles 243 and 246 of the Labor Code, as amended, ibid. In addition, she contends that a
certification election is not a litigation but a mere investigation of a non-adversary, fact-finding character. It is not a suit
against ICMC its property, funds or assets, but is the sole concern of the workers themselves.

B. G.R. No. 89331 — (The International Rice Research Institute [IRRI] Case).

Before a Decision could be rendered in the ICMC Case, the Third Division, on 11 December 1989, resolved to consolidate
G.R. No. 89331 pending before it with G.R. No. 85750, the lower-numbered case pending with the Second Division, upon
manifestation by the Solicitor General that both cases involve similar issues.

The facts disclose that on 9 December 1959, the Philippine Government and the Ford and Rockefeller Foundations signed
a Memorandum of Understanding establishing the International Rice Research Institute (IRRI) at Los Baños, Laguna. It
was intended to be an autonomous, philanthropic, tax-free, non-profit, non-stock organization designed to carry out the
principal objective of conducting "basic research on the rice plant, on all phases of rice production, management,
distribution and utilization with a view to attaining nutritive and economic advantage or benefit for the people of Asia and
other major rice-growing areas through improvement in quality and quantity of rice."

Initially, IRRI was organized and registered with the Securities and Exchange Commission as a private corporation subject
to all laws and regulations. However, by virtue of Pres. Decree No. 1620, promulgated on 19 April 1979, IRRI was granted
the status, prerogatives, privileges and immunities of an international organization.

The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a legitimate labor organization with an
existing local union, the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan, for short) in respondent IRRI.

On 20 April 1987, the Kapisanan filed a Petition for Direct Certification Election with Region IV, Regional Office of the
Department of Labor and Employment (DOLE).

IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the status of an international organization
and granting it immunity from all civil, criminal and administrative proceedings under Philippine laws.

On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on the basis of Pres. Decree No. 1620 and
dismissed the Petition for Direct Certification.

On appeal, the BLR Director, who is the public respondent in the ICMC Case, set aside the Med-Arbiter's Order and
authorized the calling of a certification election among the rank-and-file employees of IRRI. Said Director relied on Article
243 of the Labor Code, as amended, infra and Article XIII, Section 3 of the 1987 Constitution, 1 and held that "the
immunities and privileges granted to IRRI do not include exemption from coverage of our Labor Laws." Reconsideration
sought by IRRI was denied.

On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR Director's Order, dismissed the
Petition for Certification Election, and held that the grant of specialized agency status by the Philippine Government to the
IRRI bars DOLE from assuming and exercising jurisdiction over IRRI Said Resolution reads in part as follows:

Presidential Decree No. 1620 which grants to the IRRI the status, prerogatives, privileges and immunities
of an international organization is clear and explicit. It provides in categorical terms that:

Art. 3 — The Institute shall enjoy immunity from any penal, civil and administrative proceedings, except
insofar as immunity has been expressly waived by the Director-General of the Institution or his
authorized representative.

Verily, unless and until the Institute expressly waives its immunity, no summons, subpoena, orders,
decisions or proceedings ordered by any court or administrative or quasi-judicial agency are enforceable
as against the Institute. In the case at bar there was no such waiver made by the Director-General of the
Institute. Indeed, the Institute, at the very first opportunity already vehemently questioned the
jurisdiction of this Department by filing an ex-parte motion to dismiss the case.
 6

Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of discretion by respondent Secretary of
Labor in upholding IRRI's diplomatic immunity.

The Third Division, to which the case was originally assigned, required the respondents to comment on the petition. In a
Manifestation filed on 4 August 1990, the Secretary of Labor declared that it was "not adopting as his own" the decision of
the BLR Director in the ICMC Case as well as the Comment of the Solicitor General sustaining said Director. The last
pleading was filed by IRRI on 14 August 1990.

Instead of a Comment, the Solicitor General filed a Manifestation and Motion praying that he be excused from filing a
comment "it appearing that in the earlier case of International Catholic Migration Commission v. Hon. Pura Calleja, G.R.
No. 85750. the Office of the Solicitor General had sustained the stand of Director Calleja on the very same issue now
before it, which position has been superseded by respondent Secretary of Labor in G.R. No. 89331," the present case. The
Court acceded to the Solicitor General's prayer.

The Court is now asked to rule upon whether or not the Secretary of Labor committed grave abuse of discretion in
dismissing the Petition for Certification Election filed by Kapisanan.

Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI the status, privileges, prerogatives and
immunities of an international organization, invoked by the Secretary of Labor, is unconstitutional in so far as it deprives
the Filipino workers of their fundamental and constitutional right to form trade unions for the purpose of collective
bargaining as enshrined in the 1987 Constitution.

A procedural issue is also raised. Kapisanan faults respondent Secretary of Labor for entertaining IRRI'S appeal from the
Order of the Director of the Bureau of Labor Relations directing the holding of a certification election. Kapisanan contends
that pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of the Omnibus Rules Implementing the Labor Code, the Order of the
BLR Director had become final and unappeable and that, therefore, the Secretary of Labor had no more jurisdiction over
the said appeal.

On the other hand, in entertaining the appeal, the Secretary of Labor relied on Section 25 of Rep. Act. No. 6715, which
took effect on 21 March 1989, providing for the direct filing of appeal from the Med-Arbiter to the Office of the Secretary
of Labor and Employment instead of to the Director of the Bureau of Labor Relations in cases involving certification
election orders.

III

Findings in Both Cases.

There can be no question that diplomatic immunity has, in fact, been granted ICMC and IRRI.

Article II of the Memorandum of Agreement between the Philippine Government and ICMC provides that ICMC shall have
a status "similar to that of a specialized agency." Article III, Sections 4 and 5 of the Convention on the Privileges and
Immunities of Specialized Agencies, adopted by the UN General Assembly on 21 November 1947 and concurred in by the
Philippine Senate through Resolution No. 19 on 17 May 1949, explicitly provides:

Art. III, Section 4. The specialized agencies, their property and assets, wherever located and by
whomsoever held, shall enjoy immunity from every form of legal process except insofar as in any
particular case they have expressly waived their immunity. It is, however, understood that no waiver of
immunity shall extend to any measure of execution.

Sec. 5. — The premises of the specialized agencies shall be inviolable. The property and assets of the
specialized agencies, wherever located and by whomsoever held shall be immune from search, requisition,
confiscation, expropriation and any other form of interference, whether by executive, administrative,
judicial or legislative action. (Emphasis supplied).

IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its grant of immunity, thus:
 7

Art. 3. Immunity from Legal Process. — The Institute shall enjoy immunity from any penal, civil and
administrative proceedings, except insofar as that immunity has been expressly waived by the Director-
General of the Institute or his authorized representatives.

Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC'S invocation of immunity when in a
Memorandum, dated 17 October 1988, it expressed the view that "the Order of the Director of the Bureau of Labor
Relations dated 21 September 1988 for the conduct of Certification Election within ICMC violates the diplomatic
immunity of the organization." Similarly, in respect of IRRI, the DEFORAF speaking through The Acting Secretary of
Foreign Affairs, Jose D. Ingles, in a letter, dated 17 June 1987, to the Secretary of Labor, maintained that "IRRI enjoys
immunity from the jurisdiction of DOLE in this particular instance."

The foregoing opinions constitute a categorical recognition by the Executive Branch of the Government that ICMC and
IRRI enjoy immunities accorded to international organizations, which determination has been held to be a political
question conclusive upon the Courts in order not to embarrass a political department of Government.

It is a recognized principle of international law and under our system of separation of powers that
diplomatic immunity is essentially a political question and courts should refuse to look beyond a
determination by the executive branch of the government, and where the plea of diplomatic immunity is
recognized and affirmed by the executive branch of the government as in the case at bar, it is then the
duty of the courts to accept the claim of immunity upon appropriate suggestion by the principal law
officer of the government . . . or other officer acting under his direction. Hence, in adherence to the settled
principle that courts may not so exercise their jurisdiction . . . as to embarrass the executive arm of the
government in conducting foreign relations, it is accepted doctrine that in such cases the judicial
department of (this) government follows the action of the political branch and will not embarrass the
latter by assuming an antagonistic jurisdiction. 3

A brief look into the nature of international organizations and specialized agencies is in order. The term "international
organization" is generally used to describe an organization set up by agreement between two or more states. 4 Under
contemporary international law, such organizations are endowed with some degree of international legal
personality 5 such that they are capable of exercising specific rights, duties and powers. 6 They are organized mainly as a
means for conducting general international business in which the member states have an interest. 7 The United Nations,
for instance, is an international organization dedicated to the propagation of world peace.

"Specialized agencies" are international organizations having functions in particular fields. The term appears in Articles
57 8 and 63 9 of the Charter of the United Nations:

The Charter, while it invests the United Nations with the general task of promoting progress and
international cooperation in economic, social, health, cultural, educational and related matters,
contemplates that these tasks will be mainly fulfilled not by organs of the United Nations itself but by
autonomous international organizations established by inter-governmental agreements outside the
United Nations. There are now many such international agencies having functions in many different
fields, e.g. in posts, telecommunications, railways, canals, rivers, sea transport, civil aviation,
meteorology, atomic energy, finance, trade, education and culture, health and refugees. Some are virtually
world-wide in their membership, some are regional or otherwise limited in their membership. The
Charter provides that those agencies which have "wide international responsibilities" are to be brought
into relationship with the United Nations by agreements entered into between them and the Economic
and Social Council, are then to be known as "specialized agencies." 10

The rapid growth of international organizations under contemporary international law has paved the way for the
development of the concept of international immunities.

It is now usual for the constitutions of international organizations to contain provisions conferring certain
immunities on the organizations themselves, representatives of their member states and persons acting
on behalf of the organizations. A series of conventions, agreements and protocols defining the immunities
of various international organizations in relation to their members generally are now widely in force; . . . 11

There are basically three propositions underlying the grant of international immunities to international organizations.
These principles, contained in the ILO Memorandum are stated thus: 1) international institutions should have a status
 8

which protects them against control or interference by any one government in the performance of functions for the
effective discharge of which they are responsible to democratically constituted international bodies in which all the
nations concerned are represented; 2) no country should derive any national financial advantage by levying fiscal charges
on common international funds; and 3) the international organization should, as a collectivity of States members, be
accorded the facilities for the conduct of its official business customarily extended to each other by its individual member
States. 12 The theory behind all three propositions is said to be essentially institutional in character. "It is not concerned
with the status, dignity or privileges of individuals, but with the elements of functional independence necessary to free
international institutions from national control and to enable them to discharge their responsibilities impartially on behalf
of all their members. 13 The raison d'etre for these immunities is the assurance of unimpeded performance of their
functions by the agencies concerned.

The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their international character
and respective purposes. The objective is to avoid the danger of partiality and interference by the host country in their
internal workings. The exercise of jurisdiction by the Department of Labor in these instances would defeat the very
purpose of immunity, which is to shield the affairs of international organizations, in accordance with international
practice, from political pressure or control by the host country to the prejudice of member States of the organization, and
to ensure the unhampered performance of their functions.

ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its basic rights, which are guaranteed
by Article II, Section 18, 14 Article III, Section 8, 15 and Article XIII, Section 3 (supra), of the 1987 Constitution; and
implemented by Articles 243 and 246 of the Labor Code, 16 relied on by the BLR Director and by Kapisanan.

For, ICMC employees are not without recourse whenever there are disputes to be settled. Section 31 of the Convention on
the Privileges and Immunities of the Specialized Agencies of the United Nations 17 provides that "each specialized agency
shall make provision for appropriate modes of settlement of: (a) disputes arising out of contracts or other disputes of
private character to which the specialized agency is a party." Moreover, pursuant to Article IV of the Memorandum of
Agreement between ICMC the the Philippine Government, whenever there is any abuse of privilege by ICMC, the
Government is free to withdraw the privileges and immunities accorded. Thus:

Art. IV. Cooperation with Government Authorities. — 1. The Commission shall cooperate at all times with
the appropriate authorities of the Government to ensure the observance of Philippine laws, rules and
regulations, facilitate the proper administration of justice and prevent the occurrences of any abuse of the
privileges and immunities granted its officials and alien employees in Article III of this Agreement to the
Commission.

2. In the event that the Government determines that there has been an abuse of the privileges and
immunities granted under this Agreement, consultations shall be held between the Government and the
Commission to determine whether any such abuse has occurred and, if so, the Government shall
withdraw the privileges and immunities granted the Commission and its officials.

Neither are the employees of IRRI without remedy in case of dispute with management as, in fact, there had been
organized a forum for better management-employee relationship as evidenced by the formation of the Council of IRRI
Employees and Management (CIEM) wherein "both management and employees were and still are represented for
purposes of maintaining mutual and beneficial cooperation between IRRI and its employees." The existence of this Union
factually and tellingly belies the argument that Pres. Decree No. 1620, which grants to IRRI the status, privileges and
immunities of an international organization, deprives its employees of the right to self-organization.

The immunity granted being "from every form of legal process except in so far as in any particular case they have expressly
waived their immunity," it is inaccurate to state that a certification election is beyond the scope of that immunity for the
reason that it is not a suit against ICMC. A certification election cannot be viewed as an independent or isolated process. It
could tugger off a series of events in the collective bargaining process together with related incidents and/or concerted
activities, which could inevitably involve ICMC in the "legal process," which includes "any penal, civil and administrative
proceedings." The eventuality of Court litigation is neither remote and from which international organizations are
precisely shielded to safeguard them from the disruption of their functions. Clauses on jurisdictional immunity are said to
be standard provisions in the constitutions of international Organizations. "The immunity covers the organization
concerned, its property and its assets. It is equally applicable to proceedings in personam and proceedings in rem." 18

We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p. 161, Rollo), wherein TUPAS calls
attention to the case entitled "International Catholic Migration Commission v. NLRC, et als., (G.R. No. 72222, 30
 9

January 1989, 169 SCRA 606), and claims that, having taken cognizance of that dispute (on the issue of payment of salary
for the unexpired portion of a six-month probationary employment), the Court is now estopped from passing upon the
question of DOLE jurisdiction petition over ICMC.

We find no merit to said submission. Not only did the facts of said controversy occur between 1983-1985, or before the
grant to ICMC on 15 July 1988 of the status of a specialized agency with corresponding immunities, but also because ICMC
in that case did not invoke its immunity and, therefore, may be deemed to have waived it, assuming that during that
period (1983-1985) it was tacitly recognized as enjoying such immunity.

Anent the procedural issue raised in the IRRI Case, suffice it to state that the Decision of the BLR Director, dated 15
February 1989, had not become final because of a Motion for Reconsideration filed by IRRI Said Motion was acted upon
only on 30 March 1989 when Rep. Act No. 6715, which provides for direct appeals from the Orders of the Med-Arbiter to
the Secretary of Labor in certification election cases either from the order or the results of the election itself, was already in
effect, specifically since 21 March 1989. Hence, no grave abuse of discretion may be imputed to respondent Secretary of
Labor in his assumption of appellate jurisdiction, contrary to Kapisanan's allegations. The pertinent portion of that law
provides:

Art. 259. — Any party to an election may appeal the order or results of the election as determined by the
Med-Arbiter directly to the Secretary of Labor and Employment on the ground that the rules and
regulations or parts thereof established by the Secretary of Labor and Employment for the conduct of the
election have been violated. Such appeal shall be decided within 15 calendar days (Emphasis supplied).

En passant, the Court is gratified to note that the heretofore antagonistic positions assumed by two departments of the
executive branch of government have been rectified and the resultant embarrassment to the Philippine Government in the
eyes of the international community now, hopefully, effaced.

WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the Order of the Bureau of Labor Relations
for certification election is SET ASIDE, and the Temporary Restraining Order earlier issued is made PERMANENT.

In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of discretion having been committed by the
Secretary of Labor and Employment in dismissing the Petition for Certification Election.

No pronouncement as to costs.

SO ORDERED.

23. G.R. No. 97020 June 8, 1992

CALIFORNIA MANUFACTURING CORPORATION, petitioner,

vs.
THE HONORABLE UNDERSECRETARY OF LABOR BIENVENIDO E. LAGUESMA, ABD FEDERATION OF
FREE WORKERS (FFW), CALIFORNIA MFG. CORP. SUPERVISORS UNION CHAPTER
(CALMASUCO), respondents.

PARAS, J.:

This is a petition for review on certiorari with prayer for preliminary injunction and/or temporary restraining order
seeking to annul and set aside the (a) resolution * of the Department of Labor and Employment dated October 16, 1990 in
OS-A-10-283-90 (NCR-OD-M-90-05-095) entitled "In Re: Petition for Certification Election Among the Supervisors of
California Manufacturing Corporation, Federation of Free Workers (FFW) California Mfg. Corp. Supervisors Union
Chapter (CALMASUCO), petitioner-appellee, California Manufacturing Corporation, employer-appellant" which denied
herein petitioner's appeal and affirmed the order of Med-Arbiter Arsenia Q. Ocampo dated August 22, 1990 directing the
conduct of a certification election among the supervisory employees of California Manufacturing Corporation, and (b) the
Order ** of the same Department denying petitioner's motion for reconsideration.
 10

As culled from the records, the following facts appear undisputed:

On May 24, 1990, a petition for certification election among the supervisors of California Manufacturing Corporation
(CMC for brevity) was filed by the Federation of Free Workers (FFW) — California Manufacturing Corporation
Supervisors Union Chapter (CALMASUCO), alleging inter alia, that it is a duly registered federation with registry
certificate no. 1952-TTT-IP, while FFW-CALMASUCO Chapter is a duly registered chapter with registry certificate no. 1-
AFBI-038 issued on May 21, 1990 (Annex "A", Rollo, p. 63); that the employer CMC employs one hundred fifty (150)
supervisors; that there is no recognized supervisors union existing in the company; that the petition is filed in accordance
with Article 257 of the Labor Code, as amended by Republic Act No. 6715; and that the petition is nevertheless supported
by a substantial member of signatures of the employees concerned (Annexes "E" and "F", Ibid., pp. 28-29).

In its answer, CMC, now petitioner herein, alleged among others, that the petition for the holding of a certification election
should be denied as it is not supported by the required twenty-five percent (25%) of all its supervisors and that a big
number of the supposed signatories to the petition are not actually supervisors as they have no subordinates to supervise,
nor do they have the powers and functions which under the law would classify them as supervisors (Annex "D", Ibid., P.
25).

On July 24. 1990, FFW—CALMASUCO filed its reply maintaining that under the law, when there is no existing unit yet in
a particular bargaining unit at the time a petition for certification election is filed, the 25% rule on the signatories does
not apply; that the "organized establishment" contemplated by law does not refer to a "company"per se but rather refers to
a "bargaining unit" which may be of different classifications in a single company; that CMC has at least two (2) different
bargaining units, namely, the supervisory (unorganized) and the rank-and-file (organized); that the signatories to the
petition have been performing supervisory functions; that since it is CMC which promoted them to the positions, of
supervisors. it is already estopped from claiming that they are not supervisors; that the said supervisors were excluded
from the coverage of the collective bargaining agreement of its rank-and-file employees; and that the contested signatories
are indeed supervisors as shown in the "CMC Master List of Employees" of January 2, 1990 and the CMS Publication
(Annex "G", Ibid., p 30).

On August 12, 1990, the Med-Arbiter issued an order, the decretal portion of which reads:

WHEREFORE, premises considered, it is hereby ordered that a certification election be conducted among
the supervisory employees of California Manufacturing Corporation within twenty (20) days from receipt
hereof with the usual pre-election conference of the parties to thresh out the mechanics of the election
The payroll of the company three (3) months prior to the filing of the petition shall be used as the basis in
determining the list of eligible voters.

The choices are:

1. Federation of Free Workers (FFW) California Manufacturing Corporation Supervisors

Union Chapter (CALMASUCO); and

2. No union.

SO ORDERED. (Annex "H" Ibid., p. 33).

CMC thereafter appealed to the Department of Labor and Employment which, however, affirmed the above order in its
assailed resolution dated October 16, 1990 (Annex, "B", Ibid, a 18) CMC's subsequent motion for reconsideration was also
denied in its order dated November 17, 1990 (Annex "A", Ibid., p. 15), hence, his petition.

a) whether or not the term "unorganized establishment' in Article 257 of the tabor Code refers to a
bargaining unit or a business establishment;

b) whether or not non-supervisors can participate in a supervisor's certification election; and

c) whether or not the two (2) different and separate plants of herein petitioner in Parañaque and Las
Piñas can be treated as a single bargaining unit.
 11

The petition must be denied.

The Court has already categorically ruled that Article 257 of the Labor code is applicable to unorganized labor
organizations and not to establishments where there exists a certified bargaining agent which had previously entered
into a collective bargaining agreement with the management (Associated Labor Unions [ALU] v. Calleja, G.R. No. 85085,
November 6, 1989, 179 SCRA 127) (Emphasis supplied). Otherwise stated, the establishment concerned must have no
certified bargaining agent (Associated Labor Unions [ALU] v. Calleja G.R. No. 82260, July 19, 1989, 175 SCRA 490). In the
instant case, it is beyond cavil that the supervisors of CMC which constitute a bargaining unit separate and distinct from
that of the rank-and-file, have no such agent. thus they correctly filed a petition for certification election thru union FFW-
CALMASUCO, likewise indubitably a legitimate labor organization. CMC's insistence on the 25% subscription
requirement, is clearly immaterial. The same has been expressly deleted by Section 24 of Republic Act No. 6715 and is
presently prescribed only in organized establishments, that is, those with existing bargaining agents. Compliance with the
said requirement need not even be established with absolute certainty. The Court has consistently ruled that "even
conceding that the statutory requirement of 30% (now 25%) of the labor force asking for a certification election had not
been strictly compiled with, the Director (now the Med-Arbiter) is still empowered to order that it be held precisely for the
purpose of ascertaining which of the contending labor organizations shall be the exclusive collective bargaining agent
(Atlas Free Workers Union (AFWU)-PSSLU Local v. Noriel, G.R. No. L-51905, May 26, 1981, 104 SCRA 565). The
requirement then is relevant only when it becomes mandatory to conduct a certification election. In all other instances,
the discretion, according to the rulings of this Tribunal, ought to be ordinarily exercised in favor of a petition for
certification (National Mines and Allied Workers Union (NAMAWU-UIF) v. Luna, et al., G.R. No. L-46722, June 15, 1978,
83 SCRA 607).

In any event, CMC as employer has no standing to question a certification election (Asian Design and Manufacturing
Corporation v. Calleja, et al., G.R. No. 77415, June 29, 1989, 174 SCRA 477). Such is the sole concern of the workers. The
only exception is where the employer has to file the petition for certification election pursuant to Article 259 (now 258) of
the Labor Code because it was requested to bargain collectively. Thereafter, the role of the employer in the certification
process ceases. The employer becomes merely a bystander. Oft-quoted is the pronouncement of the Court on management
interference in certification elections, thus:

On matters that should be the exclusive concern of labor, the choice of a collective bargaining
representative, the employer is definitely an intruder, His participation, to say the least, deserves no
encouragement. This Court should be the last agency to lend support to such an attempt at interference
with purely internal affair of labor. (Trade Unions of the Philippines and Allied Services (TUPAS) v.
Trajano. G.R. No. L-61153 January 17, 1983, 120 SCRA 64 citing Consolidated Farms, Inc. v. Noriel, G.R
No. L-47752 July 31, 1978, 84 SCRA 469, 473).

PREMISES CONSIDERED, the petition is DISMISSED for utter lack of merit.

SO ORDERED.

24. G.R. No. 75810 September 9, 1991

KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPIL-KATIPUNAN), petitioner,

vs.
HON. CRESENCIANO B. TRAJANO in his capacity as Director, Bureau of Labor Relations, and VIRON
GARMENTS MFG., CO., INC., respondents.

Esteban M. Mendoza for petitioner.

R E S O LU T I O N

NARVASA, J.:
 12

The propriety of holding a certification election is the issue in the special civil action of certiorari at bar.

By virtue of a Resolution of the Bureau of Labor Relations dated February 27, 1981, the National Federation of Labor
Unions (NAFLU) was declared the exclusive bargaining representative of all rank-and-file employees of Viron Garments
Manufacturing Co., Inc. (VIRON).

More than four years thereafter, or on April 11, 1985, another union, the Kaisahan ng Manggagawang Pilipino KAMPIL
Katipunan filed with the Bureau of Labor Relations a petition for certification election among the employees of VIRON.
The petition allegedly counted with the support of more than thirty percent (30%) of the workers at VIRON.

NAFLU opposed the petition, as might be expected. The Med-Arbiter however ordered, on June 14, 1985, that a
certification election be held at VIRON as prayed for, after ascertaining that KAMPIL had complied with all the
requirements of law and that since the certification of NAFLU as sole bargaining representative in 1981, no collective
bargaining agreement had been executed between it and VIRON.

NAFLU appealed. It contended that at the time the petition for certification election was filed on April 11, 1985, it was in
process of collective bargaining with VIRON; that there was in fact a deadlock in the negotiations which had prompted it
to file a notice of strike; and that these circumstances constituted a bar to the petition for election in accordance with
Section 3, Rule V, Book V of the Omnibus Rules Implementing the Labor Code, 1 reading as follows:

SEC. 3. When to file. — In the absence of a collective bargaining agreement submitted in accordance with Article
231 of the Code, a petition for certification election may be filed at any time. However, no certification election
may be held within one year from the date of issuance of declaration of a final certification election result. Neither
may a representation question be entertained if, before the filing of a petition for certification election, a
bargaining deadlock to which an incumbent or certified bargaining agent is a party had been submitted to
conciliation or arbitration or had become the subject of a valid notice of strike or lockout.

If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition
for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the
expiry date of such agreement.

Finding merit in a NAFLU's appeal, the Director of Labor Relations rendered a Resolution on April 30, 1986 setting aside
the Med-Arbiter's Order of June 14, 1985 and dismissing KAMPIL's petition for certification election. This disposition is
justified in the Resolution as follows:

... While it may be true that the one-year period (mentioned in Section 3 above quoted) has long run its course
since intervenor NAFLU was certified on February 27, 1981, it could not be said, however, that NAFLU slept on its
right to bargain collectively with the employer. If a closer look was made on the history of labor management
relations in the company, it could be readily seen that the delay in the negotiations for and conclusion of a
collective agreement — the object of the one-year period — could be attributed first, on the exhaustion of all legal
remedies in the representation question twice initiated in the company before the filing of the present petition and
second, to management who had been resisting the representations of NAFLU in collective bargaining.

The one-year period therefore, should not be applied literally to the present dispute, especially considering that
intervenor had to undergo a strike to bring management to the negotiation table. ...

KAMPIL moved for reconsideration, and when this was denied, instituted in this Court the present certiorari action.

It is evident that the prohibition imposed by law on the holding of a certification election "within one year from the date of
issuance of declaration of a final certification election result' — in this case, from February 27, 1981, the date of the
Resolution declaring NAFLU the exclusive bargaining representative of rank-and-file workers of VIRON — can have no
application to the case at bar. That one-year period-known as the "certification year" during which the certified union is
required to negotiate with the employer, and certification election is prohibited2 — has long since expired.

Thus the question for resolution is whether or not KAMPIL's petition for certification election is barred because, before its
filing, a bargaining deadlock between VIRON and NAFLU as the incumbent bargaining agent, had been submitted to
conciliation or arbitration or had become the subject of a valid notice of strike or lockout, in accordance with Section 3,
Rule V, Book V of the Omnibus Rules above quoted.
 13

Again it seems fairly certain that prior to the filing of the petition for election in this case, there was no such "bargaining
deadlock ... (which) had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike
or lockout." To be sure, there are in the record assertions by NAFLU that its attempts to bring VIRON to the negotiation
table had been unsuccessful because of the latter's recalcitrance and unfulfilled promises to bargain collectively;3 but there
is no proof that it had taken any action to legally coerce VIRON to comply with its statutory duty to bargain collectively. It
could have charged VIRON with unfair labor practice; but it did not. It could have gone on a legitimate strike in protest
against VIRON's refusal to bargain collectively and compel it to do so; but it did not. There are assertions by NAFLU, too,
that its attempts to bargain collectively had been delayed by continuing challenges to the resolution pronouncing it the
sole bargaining representative in VIRON; but there is no adequate substantiation thereof, or of how it did in fact prevent
initiation of the bargaining process between it and VIRON.

The stark, incontrovertible fact is that from February 27, 1981 — when NAFLU was proclaimed the exclusive bargaining
representative of all VIRON employees — to April 11, 1985 — when KAMPIL filed its petition for certification election or a
period of more than four (4) years, no collective bargaining agreement was ever executed, and no deadlock ever arose from
negotiations between NAFLU and VIRON resulting in conciliation proceedings or the filing of a valid strike notice.

The respondents advert to a strike declared by NAFLU on October 26, 1986 for refusal of VIRON to bargain and for
violation of terms and conditions of employment, which was settled by the parties' agreement, and to another strike staged
on December 6, 1986 in connection with a claim of violation of said agreement, a dispute which has since been certified for
compulsory arbitration by the Secretary of Labor & Employment. 4 Obviously, however, these activities took place after the
initiation of the certification election case by KAMPIL, and it was grave abuse of discretion to have regarded them as
precluding the holding of the certification election thus prayed for.

WHEREFORE, it being apparent that none of the proscriptions to certification election set out in the law exists in the case
at bar, and it was in the premises grave abuse of discretion to have ruled otherwise, the contested Resolution of the
respondent Director of the Bureau of Labor Relations dated April 30, 1986 in BLR Case No. A-7-139-85 (BZEO-CE-04-
004-85) is NULLIFIED AND SET ASIDE. Costs against private respondent.

SO ORDERED.

25. G.R. No. 118915 February 4, 1997

CAPITOL MEDICAL CENTER OF CONCERNED EMPLOYEES-UNIFIED FILIPINO SERVICE WORKERS,

(CMC-ACE-UFSW), petitioners,
vs.
HON. BIENVENIDO E. LAGUESMA, Undersecretary of the Department of Labor and Employment;
CAPITOL MEDICAL CENTER EMPLOYEES ASSOCIATION-ALLIANCE OF FILIPINO WORKERS AND
CAPITOL MEDICAL CENTER INCORPORATED AND DRA. THELMA CLEMENTE, President, respondents.

HERMOSISIMA, JR., J.:

This petition for certiorari and prohibition seeks to reserves and set aside the Order dated November 18, 1994 of public
respondent Bienvenido E. Laguesma, Undersecretary of the Department of Labor and Employment in Case No. OS.-A-
136-94 1 which dismissed the petition for certification election filed by petitioner for lack of merit and further directed
private respondent hospital to negotiate a collective bargaining agreement with respondent union, Capitol Medical Center
Employees Association-Alliance of Filipino Workers.

The antecedent facts are undisputed.

On February 17, 1992, Med-Arbiter Rasidali C. Abdullah issued an Order which granted respondent union's petition for
certification election among the rank-and-file employees of the Capitol Medical Center.2 Respondent CMC appealed the
Order to the Office of the Secretary by questioning the legal status of respondent union's affiliation with the Alliance of
Filipino Workers (AFW). To correct any supposed infirmity in its legal status, respondent union registered itself
independently and withdrew the petition which had earlier been granted. Thereafter, it filed another petition for
certification election.
 14

On May 29, 1992, Med-Arbiter Manases T. Cruz issued an order granting the petition for certification
election.3Respondent CMC again appealed to the Office of the Secretary which affirmed 4 the Order of the Med-Arbiter
granting the certification election.

On December 9, 1992, elections were finally held with respondent union garnering 204 votes, 168 in favor of no union and
8 spoiled ballots out of a total of 380 votes cast. Thereafter, on January 4, 1993, Med-Arbiter Cruz issued an Order
certifying respondent union as the sole and exclusive bargaining representative of the rank and file employees at CMC. 5

Unsatisfied with the outcome of the elections, respondent CMC again appealed to the Office of the Secretary of Labor
which appeal was denied on February 26, 1993.6 A subsequent motion for reconsideration filed by respondent CMC was
likewise denied on March 23, 1993.7

Respondent CMC's basic contention was the supposed pendency of its petition for cancellation of respondent union's
certificate of registration in Case No. NCR-OD-M-92211-028. In the said case, Med-Arbiter Paterno Adap issued an Order
dated February 4, 1993 which declared respondent union's certificate of registration as null and void. 8 However, this order
was reversed on appeal by the Officer-in-Charge of the Bureau of Labor Relations in her Order issued on April 13, 1993.
The said Order dismissed the motion for cancellation of the certificate of registration of respondent union and declared
that it was not only a bona fide affiliate or local of a federation (AFW), but a duly registered union as well. Subsequently,
this case reached this Court in Capitol Medical Center, Inc. v. Hon. Perlita Velasco, G.R. No. 110718, where we issued a
Resolution dated December 13, 1993, dismissing the petition of CMC for failure to sufficiently show that public respondent
committed grave abuse of discretion.9 The motion for reconsideration filed by CMC was likewise denied in our Resolution
dated February 2, 1994. 10 Thereafter, on March 23, 1994, we issued an entry of judgment certifying that the Resolution
dated December 13, 1993 has become final and executory. 11

Respondent union, after being declared as the certified bargaining agent of the rank-and-file employees of respondent
CMC by Med-Arbiter Cruz, presented economic proposals for the negotiation of a collective bargaining agreement (CBA).
However, respondent CMC contended that CBA negotiations should be suspended in view of the Order issued on February
4, 1993 by Med-Arbiter Adap declaring the registration of respondent union as null and void. In spite of the refusal of
respondent CMC, respondent union still persisted in its demand for CBA negotiations, claiming that it has already been
declared as the sole and exclusive bargaining agent of the rank-and-file employees of the hospital.

Due to respondent CMC's refusal to bargain collectively, respondent union filed a notice of strike on March 1, 1993. After
complying with the other legal requirements, respondent union staged a strike on April 15, 1993. On April 16, 1993, the
Secretary of Labor assumed jurisdiction over the case and issued an order certifying the same to the National Labor
Relations Commission for compulsory arbitration where the said case is still pending. 12

It is at this juncture that petitioner union, on March 24, 1994, filed a petition for certification election among the regular
rank-and-file employees of the Capitol Medical Center Inc. It alleged in its petition that: 1) three hundred thirty one (331)
out of the four hundred (400) total rank-and-file employees of respondent CMC signed a petition to conduct a certification
election; and 2) that the said employees are withdrawing their authorization for the said union to represent them as they
have joined and formed the union Capitol Medical Center Alliance of Concerned Employees (CMC-ACE). They also alleged
that a certification election can now be conducted as more that 12 months have lapsed since the last certification election
was held. Moreover, no certification election was conducted during the twelve (12) months prior to the petition, and no
collective bargaining agreement has as yet been concluded between respondent union and respondent CMC despite the
lapse of twelve months from the time the said union was voted as the collective bargaining representative.

On April 12, 1994, respondent union opposed the petition and moved for its dismissal. It contended that it is the certified
bargaining agent of the rank-and-file employees of the Hospital, which was confirmed by the Secretary of Labor and
Employment and by this Court. It also alleged that it was not remiss in asserting its right as the certified bargaining agent
for it continuously demanded the negotiation of a CBA with the hospital despite the latter's avoidance to bargain
collectively. Respondent union was even constrained to strike on April 15, 1993, where the Secretary of Labor intervened
and certified the dispute for compulsory arbitration. Furthermore, it alleged that majority of the signatories who
supported the petition were managerial and confidential employees and not members of the rank-and-file, and that there
was no valid disaffiliation of its members, contrary to petitioner's allegations.

Petitioner, in its rejoinder, claimed that there is no legal impediment to the conduct of a certification election as more than
twelve (12) months had lapsed since respondent union was certified as the exclusive bargaining agent and no CBA was as
yet concluded. It also claimed that the other issues raised could only be resolved by conducting another certification
election.
 15

In its surrejoinder, respondent union alleged that the petition to conduct a certification election was improper, immoral
and in manifest disregard of the decisions rendered by the Secretary of Labor and by this Court. It claimed that CMC
employed "legal obstructionism's" in order to let twelve months pass without a CBA having been concluded between them
so as to pave the way for the entry of petitioner union.

On May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for certification election among the
rank and file
employees. 13 It ruled that the issue was the majority status of respondent union. Since no certification election was held
within one year from the date of issuance of a final certification election result and there was no bargaining deadlock
between respondent union and the employees that had been submitted to conciliation or had become the subject of a valid
notice of strike or lock out, there is no bar to the holding of a certification election. 14

Respondent union appeared from the said Order, alleging that the Med-Arbiter erred in granting the petition for
certification election and in holding that this case falls under Section 3, Rule V Book V of the Rules Implementing the
Labor Code. 15 It also prayed that the said provision must not be applied strictly in view of the facts in this case.

Petitioner union did not file any opposition to the appeal.

On November 18, 1994, public respondent rendered a Resolution granting the appeal. 16 He ratiocinated that while the
petition was indeed filed after the lapse of one year form the time of declaration of a final certification result, and that no
bargaining deadlock had been submitted for conciliation or arbitration, respondent union was not remiss on its right to
enter into a CBA for it was the CMC which refused to bargain collectively. 17

CMC and petitioner union separately filed motions for reconsideration of the said Order.

CMC contended that in certification election proceedings, the employer cannot be ordered to bargain collectively with a
union since the only issue involved is the determination of the bargaining agent of the employees.

Petitioner union claimed that to completely disregard the will of the 331 rank-and-file employees for a certification
election would result in the denial of their substantial rights and interests. Moreover,it contended that public respondent's
"indictment" that petitioner "capitalize (sic) on the ensuing delay which was caused by the Hospital, . . ." was unsupported
by the facts and the records.

On January 11, 1995, public respondent issued a Resolution which denied the two motions for reconsideration hence this
petition. 18

The pivotal issue in this case is whether or not public respondent committed grave abuse of discretion in dismissing the
petition for certification election, and in directing the hospital to negotiate a collective bargaining agreement with the said
respondent union.

Petitioner alleges that public respondent Undersecretary Laguesma denied it due process when it ruled against the
holding of a certification election. It further claims that the denial of due process can be gleaned from the manner by
which the assailed resolution was written, i.e., instead of the correct name of the mother federation UNIFIED, it was
referred to as UNITED; and that the respondent union's name CMCEA-AFW was referred to as CMCEA-AFLO. Petitioner
maintains that such errors indicate that the assailed resolution was prepared with "indecent haste."

We do not subscribe to petitioner's contention.

The errors pointed to by petitioner can be classified as mere typographical errors which cannot materially alter the
substance and merit of the assailed resolution.

Petitioner cannot merely anchor its position on the aforementioned erroneous' names just to attain a reversal of the
questioned resolution. As correctly observed by the Solicitor General, petitioner is merely "nit-picking vainly trying to
make a monumental issue out of a negligible error of the public respondent." 19
 16

Petitioner also assails public respondents' findings that the former "capitalize (sic) on the ensuing delay which was caused
by the hospital and which resulted in the non-conclusion of a CBA within the certification year.'' 20 It further argues that
the denial of its motion fro a fair hearing was clear case of denial of its right to due process.

Such contention of petitioner deserves scant consideration.

A perusal of the record shows that petitioner failed to file its opposition to oppose the grounds for respondent union's
appeal.

It was given an opportunity to be heard but lost it when it refused to file an appellee's memorandum.

Petitioner insists that the circumstances prescribed in Section 3, Rule V, Book V Of the Rules Implementing the Labor
Code where a certification election should be conducted, viz: (1) that one year had lapsed since the issuance of a final
certification result; and (2) that there is no bargaining deadlock to which the incumbent or certified bargaining agent is a
party has been submitted to conciliation or arbitration, or had become the subject of a valid notice of strike or lockout, are
present in this case. It further claims that since there is no evidence on record that there exists a CBA deadlock, the law
allowing the conduct of a certification election after twelve months must be given effect in the interest of the right of the
workers to freely choose their sole and exclusive bargaining agent.

While it is true that, in the case at bench, one year had lapsed since the time of declaration of a final certification result,
and that there is no collective bargaining deadlock, public respondent did not commit grave abuse of discretion when it
ruled in respondent union's favor since the delay in the forging of the CBA could not be attributed to the fault of the latter.

A scrutiny of the records will further reveal that after respondent union was certified as the bargaining agent of CMC, it
invited the employer hospital to the bargaining table by submitting its economic proposal for a CBA. However, CMC
refused to negotiate with respondent union and instead challenged the latter's legal personality through a petition for
cancellation of the certificate of registration which eventually reached this Court. The decision affirming the legal status of
respondent union should have left CMC with no other recourse but to bargain collectively; but still it did not. Respondent
union was left with no other recourse but to file a notice of strike against CMC for unfair labor practice with the National
Conciliation and Mediation Board. This eventually led to a strike on April 15, 1993.

Petitioner union on the other hand, after this Court issued an entry of judgment on March 23, 1994, filed the subject
petition for certification election on March 24, 1994, claiming that twelve months had lapsed since the last certification
election.

Was there a bargaining deadlock between CMC and respondent union, before the filing of petitioner of a petition for
certification election, which had been submitted to conciliation or had become the subject of a valid notice of strike or
lockout?

In the case of Divine Word University of Tacloban v. Secretary of Labor and Employment, 21 we had the occasion to
define what a deadlock is, viz:\

A "deadlock" is . . . the counteraction of things producing entire stoppage; . . . . There is a deadlock when
there is a complete blocking or stoppage resulting from the action of equal and opposed forces . . . . The
word is synonymous with the word impasse, which . . "presupposes reasonable effort at good faith
bargaining which, despite noble intentions, does not conclude in agreement between the parties."

Although there is no "deadlock" in its strict sense as there is no "counteraction" of forces present in this case nor
"reasonable effort at good faith bargaining," such can be attributed to CMC's fault as the bargaining proposals of
respondent union were never answered by CMC. In fact, what happened in this case is worse than a bargaining deadlock
for CMC employed all legal means to block the certification of respondent union as the bargaining agent of the rank-and-
file; and use it as its leverage for its failure to bargain with respondent union. Thus, we can only conclude that CMC was
unwilling to negotiate and reach an agreement with respondent union. CMC has not at any instance shown willingness to
discuss the economic proposals given by respondent union. 22

As correctly ratiocinated by public respondent, to wit:

 17

For herein petitioner to capitalize on the ensuing delay which was caused by the hospital and which
resulted in the non-conclusion of a CBA within the certification year, would be to negate and render a
mockery of the proceedings undertaken before this Department and to put an unjustified premium on the
failure of the respondent hospital to perform its duty to bargain collectively as mandated in Article 252 of
the Labor Code, as amended, which states".

"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 grievance or questions arising under such agreement 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 concession."

The duly certified bargaining agent, CMCEA-AFW, should not be made to further bear the brunt flowing
from the respondent hospital's reluctance and thinly disguised refusal to bargain. 23

If the law proscribes the conduct of a certification election when there is a bargaining deadlock submitted to conciliation
or arbitration, with more reason should it not be conducted if, despite attempts to bring an employer to the negotiation
table by the "no reasonable effort in good faith" on the employer certified bargaining agent, there was to bargain
collectively.

In the case of Kaisahan ng Manggagawang Pilipino vs. Trajano 201 SCRA 453 (1991), penned by Chief Justice Andres R.
Narvasa, the factual milieu of which is similar to this case, this Court allowed the holding of a certification election and
ruled that the one year period known as the "certification year" has long since expired. We also ruled, that:

. . . prior to the filing of the petition for election in this case, there was no such "bargaining deadlock . .
(which) had been submitted to conciliation or arbitration or had become the subject of a valid notice of
strike or lockout." To be sure, there are in the record assertions by NAFLU that its attempts to bring
VIRON to the negotiation table had been unsuccessful because of the latter's recalcitrance, and unfulfilled
promises to bargain collectively; but there is no proof that it had taken tiny action to legally coerce VIRON
to comply with its statutory duty to bargain collectively. It could have charged VIRON with unfair labor
practice; but it did not. It could have gone on a legitimate strike in protest against VIRON's refusal to
bargain collectively and compel it to do so; but it did not. There are assertions by NAFLU, too, that its
attempts to bargain collectively had been delayed by continuing challenges to the resolution
pronouncing it the sole bargaining representative in VIRON; but there is no adequate substantiation
thereof, or of how it did in fact prevent initiation of the bargaining process between it and VIRON. 24

Although the statements pertinent to this case are merely obiter, still the fact remains that in the Kaisahan case, NAFLU
was counselled by this Court on the steps that it should have undertaken to protect its interest, but which it failed to do so.

This is what is strikingly different between the Kaisahan case and the case at bench for in the latter case, there was proof
that the certified bargaining agent, respondent union, had taken an action to legally coerce the employer to comply with its
statutory duty to bargain collectively, i.e., charging the employer with unfair labor practice and conducting a strike in
protest against the employer's refusal to bargain. 25 It is only just and equitable that the circumstances in this case should
be considered as similar in nature to a "bargaining deadlock" when no certification election could be held. This is also to
make sure that no floodgates will be opened for the circumvention of the law by unscrupulous employers to prevent any
certified bargaining agent from negotiating a CBA. Thus, Section 3, Rule V, Book V of the Implement Rules should be
interpreted liberally so as to include a circumstance, e.g. where a CBA could not be concluded due to the failure of one
party to willingly perform its duty to bargain collectively.

The order for the hospital to bargain is based on its failure to bargain collectively with respondent union.

WHEREFORE, the Resolution dated November 18, 1994 of public respondent Laguesma is AFFIRMED and the instant
petition is hereby DISMISSED.

SO ORDERED
 18

26. G.R. No. L-45528 February 10, 1982

EASTLAND MANUFACTURING COMPANY, INC., petitioner,

vs.
HONORABLE CARMELO C. NORIEL and PHILIPPINE SOCIAL SECURITY LABOR UNIONS-PSSLU
Fed.—(TUCP) (PSSLU Eastland LOCAL), respondents.

FERNANDO, C.J.:

This petition for certiorari raised novel issues at the time of its filing resulting in granting the plea for restraining
order. 1 Petitioner-employer was able then to allege with a certain degree of plausibility contentions which could cast
doubt on the validity of the resolution of respondent Carmelo C. Noriel, Director of the Bureau of Labor Relations,
ordering a certification election. In the light of the applicable decisions rendered thereafter, the dismissal of the petition is
indicated. The challenged order, the Court cannot set aside.

It is not disputed that petitioner had 275 people in its labor force of whom 175 were members of respondent labor union.
They signed a petition for the holding of a certification election. That fact in itself would more than justify the granting of
such a plea, the 30% mandatory requirement being met. It was alleged, however, that there were 43 employees with less
than six months service and 6 who had left their employment. Even then there would still be more than 30% of the
employees whose votes certainly should be counted. Petitioner-employer was adamant. It invoked a provision in the Labor
Code. 2 That is the basic issue raised in this petition. The other is whether a certification election could be conducted
without the restructuring of labor organizations as likewise provided in the Labor Code. This issue need not be given any
further thought as until now such restructuring has not taken place.

As noted at the outset, this petition calls for dismissal.

1. At the time of the issuance of the restraining order, it had been previously held that even if there were less than 30% of
the employees asking for a certification election, that of itself would not be a bar to respondent Director ordering such an
election provided, of course, there is no abuse of discretion, So it was explicitly declared in Philippine Association of Free
Labor Unions v. Bureau of Labor Relations: 3 "Petitioner's contention to the effect that the 30% requirement should be
satisfied suffers from an even graver flaw. It fails to distinguish between the right of a labor organization to be able to
persuade 30% of the labor force to petition for a certification election, in which case respondent Bureau is left with no
choice but to order it, and the power of such governmental agency precisely entrusted with the implementation of the
collective bargaining process to determine, considering the likelihood that there may be several unions within a bargaining
unit to order such an election precisely for the purpose of ascertaining, which of them shall be the exclusive collective
bargaining representative. The decision of respondent Bureau of April 14, 1975 was intended for that purpose. That was
why not only petitioner but also the Philippine Federation of Labor, the National Labor Union, the National Federation of
Labor Unions and the Samahan ng mga Manggagawa at Kawani sa AG&P were included in the fist of labor unions that
could be voted on. To reiterate a thought already expressed, what could be more appropriate than such a procedure if the
goal desired is to enable labor to determine which of the competing organizations should represent it for the purpose of a
collective bargaining contract? 4 Such a doctrine is now firmly entrenched in the law. 5

2. There was, however, the remaining question of whether or not the reliance of respondent Noriel under Article 257 on
the requirement of the law of 30 % of all the employees suffices. As noted earlier, for purposes of membership in any labor
union, the one year period is required. That is one thing. Who can vote in a certification election is another. The plain
language of the law certainly is controlling. All employees can participate. The later article is, therefore, lacking in any
relevance. It is not a limitation to the right of an those in a collective bargaining unit to cast their vote. A recent
decision, Confederation of Citizens Labor Unions v. Noriel 6 speaks to that effect. Thus: "From United Employees Union
of Gelmart Industries v. Noriel, a 1975 decision, it has been the consistent ruling of this Court that for the integrity of the
collective bargaining process to be maintained and thus manifest steadfast adherence to the concept of industrial
democracy, all the workers of a collective bargaining unit should be given the opportunity to participate in a certification
election. The latest decision in point, promulgated barely a year ago, is United Lumber and General Workers v. Noriel.
This Court has resolutely set its face against any attempt that may frustrate the above statutory policy. The success of this
petition would, therefore, be an unwarranted departure from a principle that has been firmly embedded in our
jurisprudence. We are not inclined to take that step." 7 It is only worth recalling that even under the Industrial Peace
Act 8 that was the ruling consistently followed. This Court in Federation of the United Workers Organization v. Court of
Industrial Relations 9 categorically stated: "The slightest doubt cannot therefore be entertained that what possesses
 19

significance in a petition for certification is that through such a device the employees are given the opportunity to make
known who shall have the right to represent them. What is equally important is that not only some but all of them should
have the right to do so." 10

3. It is equally well settled by this time that the petition was filed by a party, the employer, whose interest in certificate
petition election hardly rises above the minimal, the only possible exception thus far recognized being the contract-bar
rule. The decision in Consolidated Farms, Inc. v. Noriel 11 explain why: "The record of this proceeding leaves no doubt
that an the while the party that offered the most obdurate resistance to the holding of a certification election is
management, petitioner Consolidated Farms, Inc., II. That circumstance of itself militated against the success of this
petition. On a matter that should be the exclusive concern of labor, the choice of a collective bargaining representative, the
employer is definitely an intruder. His participation, to say the least, deserves no encouragement. This court should be the
last agency to lend support to such an attempt at interferance with a purely internal affair of labor. So it was made clear in
a recent decision, Monark International, Inc. v. Noriel, in these words: "There is another infirmity from which the petition
suffers. It was filed by the employer, the adversary in the collective bargaining process. Precisely, the institution of
collective bargaining is designed to assure that the other party, labor, is free to choose its representative. To resolve any
doubt on the matter, a certification election, to repeat, is the most appropriate means of ascertaining its will. It is true that
there may be circumstances where the interest of the employer calls for its being heard on the matter. An obvious instance
is where it invokes the obstacle interposed by the contract-bar rule. This case certainly does not fall within the exception.
Sound policy dictates that as much as possible, management is to maintain a strictly hands-off policy. For if it does not, it
may lend itself to the legitimate suspension that it is partial to one of the contending unions. That is repugnant to the
concept of collective bargaining. That is against the letter and spirit of welfare legislation intended to protect labor and to
promote social justice. The judiciary then should be the last to look with tolerance at such efforts of an employer to take
part in the process leading to the free and untrammeled choice of the exclusive bargaining representative of the
workers." 12 Hopefully, with a reiteration of this ruling, counsel for management will be well-advised to accord the utmost
scrutiny to any claim that there would be a violation of the rights of his client if a certification election were conducted.
What cans for priority is this constitutional mandate: "The State shall assure the rights of workers to self-organization,
collective bargaining, security of tenure, and just and humane conditions of work." 13

WHEREFORE, the petition is dismissed for lack of merit. The restraining order is hereby lifted. This decision is
immediately executory, and the certification election can take place forthwith.

Barredo, Aquino, Abad Santos, De Castro, Ericta and Escolin, JJ., concur.

Concepcion, J., took no part.

27. G.R. No. 159553 December 10, 2007

YOKOHAMA TIRE PHILIPPINES, INC. Petitioner,

vs.
YOKOHAMA EMPLOYEES UNION Respondent.

DECISION

QUISUMBING, J.:

In this appeal, petitioner Yokohama Tire Philippines, Inc. (hereafter Yokohama, for brevity) assails the Decision 1dated
April 9, 2003 of the Court of Appeals in CA-G.R. SP No. 74273 and its Resolution2 dated August 15, 2003, denying the
motion for reconsideration.

The antecedent facts are as follows:

On October 7, 1999, respondent Yokohama Employees Union (Union) filed a petition for certification election among the
rank-and-file employees of Yokohama. Upon appeal from the Med-Arbiter’s order dismissing the petition, the Secretary of
the Department of Labor and Employment (DOLE) ordered an election with (1) "Yokohama Employees’ Union" and (2)
"No Union" as choices.3 The election held on November 23, 2001 yielded the following result:

YOKOHAMA EMPLOYEES UNION - 131

 20

NO UNION - 117
SPOILED - 2
---------
250
VOTES CHALLENGED BY [YOKOHAMA] - 78
VOTES CHALLENGED BY [UNION] - 73
---------
-
TOTAL CHALLENGED VOTES - 151
TOTAL VOTES CAST - 401 4

Yokohama challenged 78 votes cast by dismissed employees. On the other hand, the Union challenged 68 votes cast by
newly regularized rank-and-file employees and another five (5) votes by alleged supervisor-trainees. Yokohama formalized
its protest and raised as an issue the eligibility to vote of the 78 dismissed employees, 5 while the Union submitted only a
handwritten manifestation during the election.

On January 21, 2002, the Med-Arbiter resolved the parties’ protests, decreeing as follows:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered as follows:

xxxx

2. The appreciation of the votes of the sixty-five (65) dismissed employees who contested their dismissal before
the National Labor Relations Commission shall be suspended until the final disposition of their complaint for
illegal dismissal. . . .

3. The votes of the sixty-eight (68) so-called "newly-regularized" rank-and-file employees shall be appreciated in
the final tabulation.

xxxx

SO ORDERED.6 (Emphasis supplied.)

On May 22, 2002, the DOLE Acting Secretary disposed of the appeals as follows:

WHEREFORE, the partial appeal of [Yokohama] is DENIED and the appeal of [the union] is PARTIALLY
GRANTED. Thus, the Order of the Med-Arbiter dated 21 January 2002 is hereby MODIFIED as follows:

xxxx

2. The votes of dismissed employees who contested their dismissal before the National Labor
Relations Commission (NLRC) shall be appreciated in the final tabulation of the certification
election results.

3. The votes of the sixty-eight (68) newly regularized rank-and-file employees shall be excluded.

xxxx

SO RESOLVED.7 (Emphasis supplied.)

The Court of Appeals affirmed in toto the decision of the DOLE Acting Secretary. 8 The appellate court held that the 78
employees who contested their dismissal were entitled to vote under Article 212 (f)9 of the Labor Code and Section 2, Rule
 21

XII10 of the rules implementing Book V of the Labor Code. However, it disallowed the votes of the 68 newly regularized
employees since they were not included in the voters’ list submitted during the July 12, 2001 pre-election conference. The
appellate court also noted that Yokohama’s insistence on their inclusion lends suspicion that it wanted to create a
company union, and ruled that Yokohama had no right to intervene in the certification election. Finally, it ruled that the
union’s handwritten manifestation during the election was substantial compliance with the rule on protest.

Yokohama appealed.

On September 15, 2003, we issued a temporary restraining order against the implementation of the May 22, 2002
Decision of the DOLE Acting Secretary and the October 15, 2002 Resolution of the DOLE Secretary, denying Yokohama’s
motion for reconsideration.11

In a manifestation with motion to annul the DOLE Secretary’s entry of judgment filed with this Court on October 16,
2003, Yokohama attached a Resolution12 dated April 25, 2003 of the Med-Arbiter. The resolution denied Yokohama’s
motion to suspend proceedings and cited the decision of the Court of Appeals. The resolution also certified that the Union
obtained a majority of 208 votes in the certification election while "No Union" obtained 121 votes. Yokohama also attached
an entry of judgment13 issued by the DOLE stating that the April 25, 2003 Resolution of the Med-Arbiter was affirmed by
the DOLE Secretary’s Office on July 29, 2003 and became final on September 29, 2003.

In a subsequent manifestation/motion with erratum filed on October 21, 2003, Yokohama deleted an allegation in its
October 16, 2003 manifestation which was included "through inadvertence and clerical mishap." Said allegation reads:

xxxx

. . . Notably, the Resolution dated 29 July 2003 which affirmed the Resolution dated 25 April 2003 is still
not final and executory considering the timely filing of a motion for its reconsideration on 15 August
2003 which until now has yet to be resolved.14

In this appeal, petitioner raises the following issues:

I.

WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN DISALLOWING THE APPRECIATION
OF THE VOTES OF SIXTY-EIGHT REGULAR RANK-AND-FILE.

II.

WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE [DOLE
SECRETARY’S] DECLARATION THAT [THE UNION’S] MANIFESTATION ON THE DAY OF THE
CERTIFICATION ELECTION WAS SUFFICIENT COMPLIANCE WITH THE RULE ON FORMALIZATION OF
PROTESTS.

III.

WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN ALLOWING THE APPRECIATION OF
VOTES OF ALL OF ITS EMPLOYEES WHO WERE PREVIOUSLY DISMISSED FOR SERIOUS MISCONDUCT
AND ABANDONMENT OF WORK WHICH ARE CAUSES UNRELATED TO THE CERTIFICATION ELECTION.15

We shall first resolve the last assigned issue: Was it proper to appreciate the votes of the dismissed employees?

Petitioner argues that "the Court of Appeals erred in ruling that the votes of the dismissed employees should be
appreciated." Petitioner posits that "employees who have quit or have been dismissed for just cause prior to the date of the
certification election are excluded from participating in the certification election." Petitioner had questioned the eligibility
to vote of the 78 dismissed employees.

Respondent counters that Section 2, Rule XII 16 of the rules implementing Book V of the Labor Code allows a dismissed
employee to vote in the certification election if the case contesting the dismissal is still pending.
 22

Section 2, Rule XII, the rule in force during the November 23, 2001 certification election clearly, unequivocally and
unambiguously allows dismissed employees to vote during the certification election if the case they filed contesting their
dismissal is still pending at the time of the election.17

Here, the votes of employees with illegal dismissal cases were challenged by petitioner although their cases were still
pending at the time of the certification election on November 23, 2001. These cases were filed on June 27, 2001 18 and the
appeal of the Labor Arbiter’s February 28, 2003 Decision was resolved by the NLRC only on August 29, 2003. 19

Even the new rule20 has explicitly stated that without a final judgment declaring the legality of dismissal, dismissed
employees are eligible or qualified voters. Thus,

Rule IX
Conduct of Certification Election

Section 5. Qualification of voters; inclusion-exclusion. – . . . An employee who has been dismissed from work but has
contested the legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance of the order for the
conduct of a certification election shall be considered a qualified voter, unless his/her dismissal was declared valid in a
final judgment at the time of the conduct of the certification election.1avvphi1

xxxx

Thus, we find no reversible error on the part of the DOLE Acting Secretary and the Court of Appeals in ordering the
appreciation of the votes of the dismissed employees.

Finally, we need not resolve the other issues for being moot. The 68 votes of the newly regularized rank-and-file
employees, even if counted in favor of "No Union," will not materially alter the result. There would still be 208 votes in
favor of respondent and 18921 votes in favor of "No Union."

We also note that the certification election is already a fait accompli, and clearly petitioner’s rank-and-file employees had
chosen respondent as their bargaining representative.

WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated April 9, 2003 of the Court of Appeals
in CA-G.R. SP No. 74273 and the Resolution dated August 15, 2003 are AFFIRMED. The temporary restraining order
issued on September 15, 2003 is hereby DISSOLVED. No pronouncement as to costs.

SO ORDERED.

28. G.R. No. 104556 March 19, 1998

NATIONAL FEDERATION OF LABOR (NFL), petitioner,

vs.
THE SECRETARY OF LABOR OF THE REPUBLIC OF THE PHILIPPINES AND HIJO PLANTATION INC.,
(HPI), respondents.

MENDOZA, J.:

Petitioner NFL (National Federation of Labor) was chosen the bargaining agent of rank-and-file employees of the Hijo
Plantation Inc. (HPI) in Mandaum, Tagum, Davao del Norte at a certification election held on August 20, 1989. Protests
filed by the company and three other unions against the results of the election were denied by the Department of Labor
and Employment in its resolution dated February 14, 1991 but, on motion of the company (HPI), the DOLE reconsidered
its resolution and ordered another certification election to be held. The DOLE subsequently denied petitioner NFL's
motion for reconsideration.

The present petition is for certiorari to set aside orders of the Secretary of Labor and Employment dated August 29, 1991,
December 26, 1991 and February 17, 1992, ordering the holding of a new certification election to be conducted in place of
 23

the one held on August 20, 1989 and, for this purpose, reversing its earlier resolution dated February 14, 1991 dismissing
the election protests of private respondent and the unions.

The facts of the case are as follows:

On November 12, 1988, a certification election was conducted among the rank-and-file employees of the Hijo Plantation,
Inc. resulting in the choice of "no union." However, on July 3, 1989, on allegations that the company intervened in the
election, the Director of the Bureau of Labor Relations nullified the results of the certification election and ordered a new
one to be held.

The new election was held on August 20, 1989 under the supervision of the DOLE Regional Office in Davao City with the
following results:

Total Votes cast 1,012

Associated Trade Unions (ATU) 39
RUST KILUSAN 5
National Federation of Labor (NFL) 876
Southern Philippines Federation of 4
Labor
SANDIGAN 6
UFW 15
No Union 55
Invalid 13

The Trust Union Society and Trade Workers-KILUSAN (TRUST-Kilusan), the United Lumber and General Workers of the
Philippines (ULGWP), the Hijo Labor Union and the Hijo Plantation, Inc. sought the nullification of the results of the
certification election on the ground that it was conducted despite the pendency of the appeals filed by Hijo Labor Union
and ULGWP from the order, dated August 17, 1989, of the Med-Arbiter denying their motion for intervention. On the
other hand, HPI claimed that it was not informed or properly represented at the pre-election conference. It alleged that, if
it was represented at all in the pre-election conference, its representative acted beyond his authority and without its
knowledge. Private respondent also alleged that the certification election was marred by massive fraud and irregularities
and that out of 1,692 eligible voters, 913, representing 54% of the rank-and-file workers of private respondent, were not
able to vote, resulting in a failure of election.

On January 10, 1990, Acting Labor Secretary Dionisio dela Serna directed the Med-Arbiter, Phibun D. Pura, to investigate
the company's claim that 54% of the rank-and-file workers were not able to vote in the certification election.

In his Report and Recommendation, dated February 9, 1990, Pura stated:

1. A majority of the rank-and-file workers had been disfranchised in the election of August 20, 1989 because of confusion
caused by the announcement of the company that the election had been postponed in view of the appeals of ULGWP and
Hijo Labor Union (HLU) from the order denying their motions for intervention. In addition, the election was held on a
Sunday which was non-working day in the company.

2. There were irregularities committed in the conduct of the election. It was possible that some people could have voted for
those who did not show up. The election was conducted in an open and hot area. The secrecy of the ballot had been
violated. Management representatives were not around to identify the workers.

3. The total number of votes cast, as duly certified by the representation officer, did not tally with the 41-page listings
submitted to the Med-Arbitration Unit. The list contained 1,008 names which were checked or encircled (indicating that
they had voted) and 784 which were not, (indicating that they did not vote), or a total of 1,792. but according to the
representation officer the total votes cast in the election was 1,012.
 24

Med-Arbiter Pura reported that he interviewed eleven employees who claimed that they were not able to vote and who
were surprised to know that their names had been checked to indicate that they had voted.

But NFL wrote a letter to Labor Secretary Ruben Torres complaining that it had not been informed of the investigation
conducted by Med-Arbiter Pura and so was not heard on its evidence. For this reason, the Med-Arbiter was directed by the
Labor Secretary to hear interested parties.

The Med-Arbiter therefore summoned the unions. TRUST-Kilusan reiterated its petition for the annulment of the results
of the certification election. Hijo Labor Union manifested that it was joining private respondent HPI's appeal, adopting as
its own the documentary evidence presented by the company, showing fraud in the election of August 20, 1989. On the
other hand, petitioner NFL reiterated its contention that management had no legal personality to file an appeal because it
was not a party to the election but was only a bystander which did not even extend assistance in the election. Petitioner
denied that private respondent HPI was not represented in the pre-election conference, because the truth was that a
certain Bartolo was present on behalf of the management and he in fact furnished the DOLE copies of the list of
employees, and posted in the company premises notices of the certification election.

Petitioner NFL insisted that more than majority of the workers voted in the election. It claimed that out of 1,692 qualified
voters, 1,012 actually voted and only 680 failed to cast their vote. It charged management with resorting to all kinds of
manipulation to frustrate the election and make the "Non Union" win.

In a resolution dated February 14, 1991, the DOLE upheld the August 20, 1989 certification election. With respect to claim
that election could not be held in view of the pendency of the appeals of the ULGWP and Hijo Labor Union from the order
of the Med-Arbiter denying their motions for intervention, the DOLE said: 1

. . . even before the conduct of the certification election on 12 November 1988 which was nullified, Hijo Labor
Union filed a motion for interventions. The same was however, denied for being filed unseasonably, and as a
result it was not included as one of the choices in the said election. After it has been so disqualified thru an order
which has become final and executory, ALU filed a second motion for intervention when a second balloting was
ordered conducted. Clearly, said second motion is proforma and intended to delay the proceedings. Being so, its
appeal from the order of denial did not stay the election and the Med-Arbiter was correct and did not violate any
rule when he proceeded with the election even with the appeal. In fact, the Med-Arbiter need not rule on the
motion as it has already been disposed of with finality.

The same is true with the motion for intervention of ULGWP. The latter withdrew as a party to the election on
September 1988 and its motion to withdraw was granted by the Med-Arbiter on October motion for intervention
filed before the conduct of a second balloting where the choices has already been pre-determined.

Let it be stressed that ULGWP and HLU were disqualified to participate in the election through valid orders that
have become final and executory even before the first certification election was conducted. Consequently, they
may not be allowed to disrupt the proceeding through the filing of nuisance motions. Much less are they possessed
of the legal standing to question the results of the second election considering that they are not parties thereto.

The DOLE gave no weight to the report of the Med-Arbiter that the certification election was marred by massive fraud and
irregularities. Although affidavits were submitted showing that the election was held outside the company premises and
private vehicles were used as makeshift precincts, the DOLE found that this was because respondent company did not
allow the use of its premises for the purpose of holding the election, company guards were allegedly instructed not to allow
parties, voters and DOLE representation officers to enter the company premises, and notice was posted on the door of the
company that the election had been postponed.

Nor was weight given to the findings of the Med-Arbiter that a majority of the rank-and-file workers had been
disfranchised in the August 20, 1989 election and that the secrecy of the ballot had been violated, first, because the NFL
was not given notice of the investigation nor the chance to present its evidence to dispute this finding and, second, the
Med Arbiter's report was not supported by the minutes of the proceedings nor by any record of the interviews of the 315
workers. Moreover, it was pointed out that the report did not state the names of the persons investigated, the questions
asked and the answers given. The DOLE held that the report was "totally baseless."

The resolution of February 14, 1991 concluded with a reiteration of the rule that the choice of the exclusive bargaining
representative is the sole concern of the workers. It said: "If indeed there were irregularities committed during the
 25

election, the contending unions should have been the first to complain considering that they are the ones which have
interest that should be protected." 2

Accordingly, the Labor Secretary denied the petition to annul the election filed by the ULGWP, TRUST-KILUSAN, HLU
and the HPI and instead certified petitioner NFL as the sole and exclusive bargaining representative of the rank-and-file
employees of private respondent HPI.

However, on motion of HPI, the Secretary of Labor, on August 29, 1991, reversed his resolution of February 14, 1991.
Petitioner NFL filed a motion for reconsideration but its motion was denied in an order, dated December 26, 1991.
Petitioner's second motion for reconsideration was likewise denied in another order dated February 17, 1992. Hence, this
petition.

First. Petitioner contends that certification election is the sole concern of the employees and the employer is a mere
bystander. The only instance wherein the employer may actively participate is when it files a petition for certification
election under Art. 258 of the Labor Code because it is requested to bargain collectively. Petitioner says that this is not the
case here and so the DOLE should not have given due course to private respondent's petition for annulment of the results
of the certification election.

In his resolution of August 29, 1991, the Secretary of Labor said he was reversing his earlier resolution because "workers of
Hijo Plantation, Inc. have deluged this Office with their letter-appeal, either made singly or collectively expressing their
wish to have a new certification election conducted" and that as a result "the firm position we held regarding the integrity
of the electoral exercise had been somewhat eroded by this recent declaration of the workers, now speaking in their
sovereign capacity."

It is clear from this, that what the DOLE Secretary considered in reversing its earlier rulings was not the petition of the
employer but the letter-appeals that the employees sent to his office denouncing the irregularities committed during the
August 20, 1989 certification election. The petition of private respondent was simply the occasion for the employees to
voice their protests against the election. Private respondent HPI attached to its Supplemental Appeal filed on September 5,
1989 the affidavits and appeals of more or less 784 employees who claimed that they had been disfranchised, as a result of
which they were not able to cast their votes at the August 20, 1989 election. It was the protests of employees which moved
the DOLE to reconsider its previous resolution of February 14, 1991, upholding the election.

Nor is it improper for private respondent to show interest in the conduct of the election. Private respondent is the
employer. The manner in which the election was held could make the difference between industrial strife and industrial
harmony in the company. What an employer is prohibited from doing is to interfere with the conduct of the certification
election for the purpose of influencing its outcome. But certainly an employer has an abiding interest in seeing to it that
the election is clean, peaceful, orderly and credible.

Second. The petitioner argues that any protest concerning the election should be registered and entered into the minutes
of the election proceedings before it can be considered. In addition, the protest should be formalized by filing it within five
(5) days. Petitioner avers that these requirements are condition precedents in the filing of an appeal. Without these
requisites the appeal cannot prosper. It cites the following provisions of Book V, Rule VI of the Implementing Rules and
Regulations of the Labor Code:

Sec. 3. Representation officer may rule on any on-the-spot question. — The Representation officer may rule on
any on-the-spot question arising from the conduct of the election. The interested party may however, file a protest
with the representation officer before the close of the proceedings.

Protests not so raised are deemed waived. Such protests shall be contained in the minutes of the proceedings.

Sec. 4. Protest to be decided in twenty (20) working days. — Where the protest is formalized before the med-
arbiter within five (5) days after the close of the election proceedings, the med-arbiter shall decide the same within
twenty (20) working days from the date of its formalization. If not formalized within the prescribed period, the
protest shall be deemed dropped. The decision may be appealed to the Bureau in the same manner and on the
same grounds as provided under Rule V.
 26

In this case, petitioner maintains that private respondent did not make any protest regarding the alleged irregularities
(e.g., massive disfranchisement of employees) during the election. Hence, the appeal and motions for reconsideration of
private respondent HPI should have been dismissed summarily.

The complaint in this case was that a number of employees were not able to cast their votes because they were not
properly notified of the date. They could not therefore have filed their protests within five (5) days. At all events, the
Solicitor General states, that the protests were not filed within five (5) days, is a mere technicality which should not be
allowed to prevail over the workers' welfare. 3 As this Court stressed in LVN Pictures, Inc. v. Phil. Musicians Guild, 4 it is
essential that the employees must be accorded an opportunity to freely and intelligently determine which labor
organization shall act in their behalf. The workers in this case were denied this opportunity. Not only were a substantial
number of them disfranchised, there were, in addition, allegations of fraud and other irregularities which put in question
the integrity of the election. Workers wrote letters and made complaints protesting the conduct of the election. The Report
of Med-Arbiter Pura who investigated these allegations found the allegations of fraud and irregularities to be true.

In one case this Court invalidated a certification election upon a showing of disfranchisement, lack of secrecy in the voting
and bribery. 5 We hold the same in this case. The workers' right to self-organization as enshrined in both the Constitution
and Labor Code would be rendered nugatory if their right to choose their collective bargaining representative were denied.
Indeed, the policy of the Labor Code favors the holding of a certification election as the most conclusive way of choosing
the labor organization to represent workers in a collective bargaining unit. 6 In case of doubt, the doubt should be
resolved in favor of the holding of a certification election.

Third. Petitioner claims that the contending unions, namely, the Association of Trade Union (ATU), the Union of Filipino
Workers (UFW), as well as the representation officers of the DOLE affirmed the regularity of the conduct of the election
and they are now estopped from questioning the election.

In its comment, ATU-TUCP states,

. . . The representative of the Association of Trade Unions really attest to the fact that we cannot really identify all
the voters who voted on that election except some workers who were our supporters in the absence of Hijo
Plantation representatives. We also attest that the polling precinct were not conducive to secrecy of the voters
since it was conducted outside of the Company premises. The precincts were (sic) the election was held were
located in a passenger waiting shed infront of the canteen across the road; on the yellow pick-up; at the back of a
car; a waiting shed near the Guard House and a waiting shed infront of the Guard House across the road. Herein
private respondents also observed during the election that there were voters who dictated some voters the phrase
"number 3" to those who were casting their votes and those who were about to vote. Number 3 refers to the
National Federation of Labor in the official ballot.

ATU-TUCP explains that it did not file any protest because it expected workers who had been aggrieved by the conduct of
the election would file their protest since it was in their interests that they do so.

Fourth. Petitioner points out that the letter-appeals were written almost two years after the election and they bear the
same dates (May 7 and June 14, 1991); they are not verified; they do not contain details or evidence of intelligent acts; and
they do not explain why the writers failed to vote. Petitioner contends that the letter-appeals were obtained through
duress by the company.

We find the allegations to be without merit. The records shows that as early as August 22 and 30, 1989, employees already
wrote letters/affidavits/
manifestoes alleging irregularities in the elections and disfranchisement of workers. 7 As the Solicitor General says in his
Comment, 8 these affidavits and manifestoes, which were attached as Annexes "A" to "CC" and Annexes "DD" to "DD-33"
to private respondent's Supplemental Petition of September 5, 1989 — just 16 days after the August 20, 1989 election. It is
not true therefore that the employees slept on their rights.

As to the claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates because they were prepared by
private respondent HPI and employees were merely asked to sign them, suffice it to say that this is plain speculation which
petitioner has not proven by competent evidence.

As to the letters not being verified, suffice it to say that technical rules of evidence are not binding in labor cases.
 27

The allegation that the letters did not contain evidence of intelligent acts does not have merit. The earlier letters 9 of the
workers already gave details of what they had witnessed during the election, namely the open balloting (with no secrecy),
and the use of NFL vehicles for polling precinct. These letters sufficiently give an idea of the irregularities of the
certification election. Similarly, the letters containing the signatures of those who were not able to vote are sufficient. They
indicate that the writers were not able to vote because they thought the election had been postponed, especially given the
fact that the two unions had pending appeals at the time from orders denying them the right to intervene in the election.

WHEREFORE, the petition for certiorari is DISMISSED and the questioned orders of the Secretary of Labor and
Employment are AFFIRMED.

SO ORDERED.

29. G.R. No. 97622 October 19, 1994

CATALINO ALGIRE and OTHER OFFICERS OF UNIVERSAL ROBINA TEXTILE MONTHLY SALARIED
EMPLOYEES UNION (URTMSEU), petitioners,
vs.
REGALADO DE MESA, et al., and HON. SECRETARY OF LABOR, respondents.

C.A. Montano Law Office for petitioner.

Cabio and Ravanes Law Offices and Jaime D. Lauron for private respondents.

ROMERO, J.:

This petition for certiorari seeks to nullify and set aside the decision dated January 31, 1991 of the Secretary of Labor
which reversed on appeal the Order dated December 20, 1990 issued by Med-arbiter Rolando S. dela Cruz declaring
petitioners as the duly-elected officers of the Universal Robina Textile Monthly Salaried Employees union (URTMSEU) as
well as the order dated March 5, 1991 denying petitioner Catalino Algire's motion for reconsideration.

The case arose out of the election of the rightful officers to represent the union in the Collective Bargaining Agreement
(CBA) with the management of Universal Robina Textile at its plant in Km. 50, Bo. San Cristobal, Calamba, Laguna.

Universal Robina Textile Monthly Salaried Employees Union, (URTMSEU), through private respondent Regalado de
Mesa, filed on September 4, 1990 a petition for the holding of an election of union officers with the Arbitration Branch of
the Department of Labor and Employment (DOLE). Acting thereon, DOLE's med-arbiter Rolando S. de la Cruz issued an
Order dated October 19, 1990 directing that such an election be held.

In the pre-election conference, it was agreed that the election by secret ballot be conducted on November 15, 1990 between
petitioners (Catalino Algire, et al.) and private respondents (Regalado de Mesa, et al.) under the supervision of DOLE
through its duly appointed representation officer.

The official ballot contained the following pertinent instructions:

Nais kong pakatawan sa grupo ni:

LINO ALGIRE REGALADO

and DE MESA
his officers and his
officers

1. Mark Check (/) or cross (x) inside the box specified above who among the two contending parties you
desire to be represented for the purpose of collecting bargaining.
 28

2. This is a secret ballot. Don't write any other markings. 1

The result of the election were as follows:

Lino Algire group — 133

Regalado de Mesa — 133
Spoiled — 6

———

Total votes cast 272

On November 19, 1990, Catalino Algire filed a Petition and/or Motion (RO 400-9009-AU-002), which DOLE's Med
Arbitration unit treated as a protest, to the effect that one of the ballots wherein one voter placed two checks inside the box
opposite the phrase "Lino Algire and his officers," hereinafter referred to as the "questioned ballot," should not have been
declared spoiled, as the same was a valid vote in their favor. The group argued that the two checks made even clearer the
intention of the voter to exercise his political franchise in favor of Algire's group.

During the schedules hearing thereof, both parties agreed to open the envelope containing the spoiled ballots and it was
found out that, indeed, one ballot contained two (2) checks in the box opposite petitioner Algire's name and his officers.

On December 20, 1990, med-arbiter de la Cruz issued an order declaring the questioned ballot valid, thereby counting the
same in Algire's favor and accordingly certified petitioner's group as the union's elected officers. 2

Regalado de Mesa, et al. appealed from the decision of the med-arbiter to the Secretary of Labor in Case No. OS-A-1-37-91
(RO 400-9009-AU-002). On January 31, 1991, the latter's office granted the appeal and reversed the aforesaid Order. In
its stead, it entered a new one ordering "the calling of another election of officers of the Universal Robina Textile Monthly
Salaried Employees Union (URTMSEU), with the same choices as in the election of
15 November, 1990, after the usual pre-election conference." 3

Director Maximo B. Lim of the Industrial Relations Division, Regional Office No. IV of the DOLE set the hearing for
another pre-election conference on March 22, 1991, reset to April 2, 1991, and finally reset to April 5, 1991.

Catalino Algire's group filed a motion for reconsideration of the Order. It was denied for lack of merit and the decision
sought to be reconsidered was sustained.

Algire, et al. filed this petition on the following issues:

(1) the Secretary of Labor erred in applying Sections 1 and 8 (6), Rule VI, Book V of the Rules and
Regulations implementing the Labor Code to the herein case, considering that the case is an intra-union
activity, which act constitutes a grave abuse in the exercise of authority amounting to lack of jurisdiction.

(2) the assailed decision and order are not supported by law and evidence.

with an ex-parte motion for issuance of a temporary restraining order, alleging that the assailed decision of the office of
the Secretary of Labor as public respondent is by nature immediately executory and the holding of an election at any time
after April 5, 1991, would render the petition moot and academic unless restrained by this Court.

On April 5, 1991, we issued a temporary restraining order enjoining the holding of another election of union officers
pursuant to the January 31, 1991 decision. 4

There is no merit in the petition.

The contention of the petitioner is that a representation officer (referring to a person duly authorized to conduct and
supervise certification elections in accordance with Rule VI of the Implementing Rules and Regulations of the Labor Code)
can validly rule only on on-the-spot questions arising from the conduct of the elections, but the determination of the
validity of the questioned ballot is not within his competence. Therefore, any ruling made by the representation officer
 29

concerning the validity of the ballot is deemed an absolute nullity because — such is the allegation — it was done without
or in excess of his functions amounting to lack of jurisdiction.

To resolve the issue of union representation at the Universal Robina Textile plant, what was agreed to be held at the
company's premises and which became the root of this controversy, was a consent election, not a certification election.

It is unmistakable that the election held on November 15, 1990 was a consent election and not a certification election. It
was an agreed one, the purpose being merely to determine the issue of majority representation of all the workers in the
appropriate collective bargaining unit. It is a separate and distinct process and has nothing to do with the import and
effort of a certification election. 5

The ruling of DOLE's representative in that election that the questioned ballot is spoiled is not based on any legal
provision or rule justifying or requiring such action by such officer but simply in pursuance of the intent of the parties,
expressed in the written instructions contained in the ballot, which is to prohibit unauthorized markings thereon other
than a check or a cross, obviously intended to identify the votes in order to preserve the sanctity of the ballot, which is in
fact the objective of the contending parties.

If indeed petitioner's group had any opposition to the representation officer's ruling that the questioned ballot was
spoiled, it should have done so seasonably during the canvass of votes. Its failure or inaction to assail such ballot's validity
shall be deemed a waiver of any defect or irregularity arising from said election. Moreover, petitioners even question at
this stage the clear instruction to mark a check or cross opposite the same of the candidate's group, arguing that such
instruction was not clear, as two checks "may be interpreted that a voter may vote for Lino Algire but not with (sic) his
officers or
vice-versa,"6 notwithstanding the fact that a pre-election conference had already been held where no such question was
raised.

In any event, the choice by the majority of employees of the union officers that should best represent them in the
forthcoming collective bargaining negotiations should be achieved through the democratic process of an election, the
proper forum where the true will of the majority may not be circumvented but clearly defined. The workers must be
allowed to freely express their choice once and for all in a determination where anything is open to their sound judgment
and the possibility of fraud and misrepresentation is minimized, if not eliminated, without any unnecessary delay and/or
maneuvering.

WHEREFORE, the petition is DENIED and the challenged decision is hereby AFFIRMED.

SO ORDERED.

G.R. Nos. 174040-41 September 22, 2010

INSULAR HOTEL EMPLOYEES UNION-NFL, Petitioner,

vs.
WATERFRONT INSULAR HOTEL DAVAO, Respondent.

DECISION

PERALTA, J.:

Before this Court is a petition for review on certiorari,1 under Rule 45 of the Rules of Court, seeking to set aside the
Decision2 dated October 11, 2005, and the Resolution 3 dated July 13, 2006 of the Court of Appeals (CA) in consolidated
labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP No. 83657. Said Decision reversed the Decision 4 dated the
April 5, 2004 of the Accredited Voluntary Arbitrator Rosalina L. Montejo (AVA Montejo).

The facts of the case, as culled from the records, are as follows:

On November 6, 2000, respondent Waterfront Insular Hotel Davao (respondent) sent the Department of Labor and
Employment (DOLE), Region XI, Davao City, a Notice of Suspension of Operations 5 notifying the same that it will suspend
its operations for a period of six months due to severe and serious business losses. In said notice, respondent assured the
 30

DOLE that if the company could not resume its operations within the six-month period, the company would pay the
affected employees all the benefits legally due to them.

During the period of the suspension, Domy R. Rojas (Rojas), the President of Davao Insular Hotel Free Employees Union
(DIHFEU-NFL), the recognized labor organization in Waterfront Davao, sent respondent a number of letters asking
management to reconsider its decision.

In a letter6 dated November 8, 2000, Rojas intimated that the members of the Union were determined to keep their jobs
and that they believed they too had to help respondent, thus:

xxxx

Sir, we are determined to keep our jobs and push the Hotel up from sinking. We believe that we have to help in this (sic)
critical times. Initially, we intend to suspend the re-negotiations of our CBA. We could talk further on possible
adjustments on economic benefits, the details of which we are hoping to discuss with you or any of your emissaries. x x x7

In another letter8 dated November 10, 2000, Rojas reiterated the Union's desire to help respondent, to wit:

We would like to thank you for giving us the opportunity to meet [with] your representatives in order for us to air our
sentiments and extend our helping hands for a possible reconsideration of the company's decision.

The talks have enabled us to initially come up with a suggestion of solving the high cost on payroll.

We propose that 25 years and above be paid their due retirement benefits and put their length of service to zero without
loss of status of employment with a minimum hiring rate.

Thru this scheme, the company would be able to save a substantial amount and reduce greatly the payroll costs without
affecting the finance of the families of the employees because they will still have a job from where they could get their
income.

Moreover, we are also open to a possible reduction of some economic benefits as our gesture of sincere desire to help.

We are looking forward to a more fruitful round of talks in order to save the hotel.9

In another letter10 dated November 20, 2000, Rojas sent respondent more proposals as a form of the Union's gesture of
their intention to help the company, thus:

1) Suspension of [the] CBA for ten years, No strike no lock-out shall be enforced.

2) Pay all the employees their benefits due, and put the length of service to zero with a minimum hiring rate.
Payment of benefits may be on a staggered basis or as available.

3) Night premium and holiday pays shall be according to law. Overtime hours rendered shall be offsetted as
practiced.

4) Reduce the sick leaves and vacation leaves to 15 days/15days.

5) Emergency leave and birthday off are hereby waived.

6) Duty meal allowance is fixed at ₱30.00 only. No more midnight snacks and double meal allowance. The cook
drinks be stopped as practiced.

7) We will shoulder 50% of the group health insurance and family medical allowance be reduced to 1,500.00
instead of 3,000.00.

8) The practice of bringing home our uniforms for laundry be continued.

 31

9) Fixed manning shall be implemented, the rest of manpower requirements maybe sourced thru WAP and casual
hiring. Manpower for fixed manning shall be 145 rank-and-file union members.

10) Union will cooperate fully on strict implementation of house rules in order to attain desired productivity and
discipline. The union will not tolerate problem members.

11) The union in its desire to be of utmost service would adopt multi-tasking for the hotel to be more competitive.

It is understood that with the suspension of the CBA renegotiations, the same existing CBA shall be adopted and that all
provisions therein shall remain enforced except for those mentioned in this proposal.

These proposals shall automatically supersede the affected provisions of the CBA. 11

In a handwritten letter12 dated November 25, 2000, Rojas once again appealed to respondent for it to consider their
proposals and to re-open the hotel. In said letter, Rojas stated that manpower for fixed manning shall be one hundred
(100) rank-and-file Union members instead of the one hundred forty-five (145) originally proposed.

Finally, sometime in January 2001, DIHFEU-NFL, through Rojas, submitted to respondent a Manifesto13concretizing
their earlier proposals.

After series of negotiations, respondent and DIHFEU-NFL, represented by its President, Rojas, and Vice-Presidents,
Exequiel J. Varela Jr. and Avelino C. Bation, Jr., signed a Memorandum of Agreement 14 (MOA) wherein respondent
agreed to re-open the hotel subject to certain concessions offered by DIHFEU-NFL in its Manifesto.

Accordingly, respondent downsized its manpower structure to 100 rank-and-file employees as set forth in the terms of the
MOA. Moreover, as agreed upon in the MOA, a new pay scale was also prepared by respondent.

The retained employees individually signed a "Reconfirmation of Employment" 15 which embodied the new terms and
conditions of their continued employment. Each employee was assisted by Rojas who also signed the document.

On June 15, 2001, respondent resumed its business operations.

On August 22, 2002, Darius Joves (Joves) and Debbie Planas, claiming to be local officers of the National Federation of
Labor (NFL), filed a Notice of Mediation 16 before the National Conciliation and Mediation Board (NCMB), Region XI,
Davao City. In said Notice, it was stated that the Union involved was "DARIUS JOVES/DEBBIE PLANAS ET. AL, National
Federation of Labor." The issue raised in said Notice was the "Diminution of wages and other benefits through unlawful
Memorandum of Agreement."

On August 29, 2002, the NCMB called Joves and respondent to a conference to explore the possibility of settling the
conflict. In the said conference, respondent and petitioner Insular Hotel Employees Union-NFL (IHEU-NFL), represented
by Joves, signed a Submission Agreement17 wherein they chose AVA Alfredo C. Olvida (AVA Olvida) to act as voluntary
arbitrator. Submitted for the resolution of AVA Olvida was the determination of whether or not there was a diminution of
wages and other benefits through an unlawful MOA. In support of his authority to file the complaint, Joves, assisted by
Atty. Danilo Cullo (Cullo), presented several Special Powers of Attorney (SPA) which were, however, undated and
unnotarized.

On September 2, 2002, respondent filed with the NCMB a Manifestation with Motion for a Second Preliminary
Conference,18 raising the following grounds:

1) The persons who filed the instant complaint in the name of the Insular Hotel Employees Union-NFL have no
authority to represent the Union;

2) The individuals who executed the special powers of attorney in favor of the person who filed the instant
complaint have no standing to cause the filing of the instant complaint; and

3) The existence of an intra-union dispute renders the filing of the instant case premature.19
 32

On September 16, 2002, a second preliminary conference was conducted in the NCMB, where Cullo denied any existence
of an intra-union dispute among the members of the union. Cullo, however, confirmed that the case was filed not by the
IHEU-NFL but by the NFL. When asked to present his authority from NFL, Cullo admitted that the case was, in fact, filed
by individual employees named in the SPAs. The hearing officer directed both parties to elevate the aforementioned issues
to AVA Olvida.20

The case was docketed as Case No. AC-220-RB-11-09-022-02 and referred to AVA Olvida. Respondent again raised its
objections, specifically arguing that the persons who signed the complaint were not the authorized representatives of the
Union indicated in the Submission Agreement nor were they parties to the MOA. AVA Olvida directed respondent to file a
formal motion to withdraw its submission to voluntary arbitration.

On October 16, 2002, respondent filed its Motion to Withdraw. 21 Cullo then filed an Opposition22 where the same was
captioned:

NATIONAL FEDERATION OF LABOR

And 79 Individual Employees, Union Members,
Complainants,

-versus-

Waterfront Insular Hotel Davao,

Respondent.

In said Opposition, Cullo reiterated that the complainants were not representing IHEU-NFL, to wit:

xxxx

2. Respondent must have been lost when it said that the individuals who executed the SPA have no standing to
represent the union nor to assail the validity of Memorandum of Agreement (MOA). What is correct is that
the individual complainants are not representing the union but filing the complaint through their
appointed attorneys-in-fact to assert their individual rights as workers who are entitled to the benefits granted by
law and stipulated in the collective bargaining agreement.23

On November 11, 2002, AVA Olvida issued a Resolution 24 denying respondent's Motion to Withdraw. On December 16,
2002, respondent filed a Motion for Reconsideration25 where it stressed that the Submission Agreement was void because
the Union did not consent thereto. Respondent pointed out that the Union had not issued any resolution duly authorizing
the individual employees or NFL to file the notice of mediation with the NCMB.

Cullo filed a Comment/Opposition 26 to respondent's Motion for Reconsideration. Again, Cullo admitted that the case was
not initiated by the IHEU-NFL, to wit:

The case was initiated by complainants by filling up Revised Form No. 1 of the NCMB duly furnishing respondent, copy of
which is hereto attached as Annex "A" for reference and consideration of the Honorable Voluntary Arbitrator. There is no
mention there of Insular Hotel Employees Union, but only National Federation of Labor (NFL). The one appearing at the
Submission Agreement was only a matter of filling up the blanks particularly on the question there of Union; which was
filled up with Insular Hotel Employees Union-NFL. There is nothing there that indicates that it is a complainant as the
case is initiated by the individual workers and National Federation of Labor, not by the local union. The local union was
not included as party-complainant considering that it was a party to the assailed MOA.27

On March 18, 2003, AVA Olvida issued a Resolution 28 denying respondent's Motion for Reconsideration. He, however,
ruled that respondent was correct when it raised its objection to NFL as proper party-complainant, thus:

Anent to the real complainant in this instant voluntary arbitration case, the respondent is correct when it raised objection
to the National Federation of Labor (NFL) and as proper party-complainants.

The proper party-complainant is INSULAR HOTEL EMPLOYEES UNION-NFL, the recognized and incumbent bargaining
agent of the rank-and-file employees of the respondent hotel. In the submission agreement of the parties dated August 29,
 33

2002, the party complainant written is INSULAR HOTEL EMPLOYEES UNION-NFL and not the NATIONAL
FEDERATION OF LABOR and 79 other members.

However, since the NFL is the mother federation of the local union, and signatory to the existing CBA, it can represent the
union, the officers, the members or union and officers or members, as the case may be, in all stages of proceedings in
courts or administrative bodies provided that the issue of the case will involve labor-management relationship like in the
case at bar.

The dispositive portion of the March 18, 2003 Resolution of AVA Olvida reads:

WHEREFORE, premises considered, the motion for reconsideration filed by respondent is DENIED. The resolution dated
November 11, 2002 is modified in so far as the party-complainant is concerned; thus, instead of "National Federation of
Labor and 79 individual employees, union members," shall be "Insular Hotel Employees Union-NFL et. al., as stated in the
joint submission agreement dated August 29, 2002. Respondent is directed to comply with the decision of this Arbitrator
dated November 11, 2002,

No further motion of the same nature shall be entertained.29

On May 9, 2003, respondent filed its Position Paper Ad Cautelam, 30 where it declared, among others, that the same was
without prejudice to its earlier objections against the jurisdiction of the NCMB and AVA Olvida and the standing of the
persons who filed the notice of mediation.

Cullo, now using the caption "Insular Hotel Employees Union-NFL, Complainant," filed a Comment31 dated June 5, 2003.
On June 23, 2003, respondent filed its Reply.32

Later, respondent filed a Motion for Inhibition33 alleging AVA Olvida's bias and prejudice towards the cause of the
employees. In an Order34 dated July 25, 2003, AVA Olvida voluntarily inhibited himself out of "delicadeza" and ordered
the remand of the case to the NCMB.

On August 12, 2003, the NCMB issued a Notice requiring the parties to appear before the conciliator for the selection of a
new voluntary arbitrator.

In a letter35 dated August 19, 2003 addressed to the NCMB, respondent reiterated its position that the individual union
members have no standing to file the notice of mediation before the NCMB. Respondent stressed that the complaint
should have been filed by the Union.

On September 12, 2003, the NCMB sent both parties a Notice36 asking them to appear before it for the selection of the new
voluntary arbitrator. Respondent, however, maintained its stand that the NCMB had no jurisdiction over the case.
Consequently, at the instance of Cullo, the NCMB approved ex parte the selection of AVA Montejo as the new voluntary
arbitrator.

On April 5, 2004, AVA Montejo rendered a Decision37 ruling in favor of Cullo, the dispositive portion of which reads:

WHEREOF, in view of the all the foregoing, judgment is hereby rendered:

1. Declaring the Memorandum of Agreement in question as invalid as it is contrary to law and public policy;

2. Declaring that there is a diminution of the wages and other benefits of the Union members and officers under
the said invalid MOA.

3. Ordering respondent management to immediately reinstate the workers wage rates and other benefits that they
were receiving and enjoying before the signing of the invalid MOA;

4. Ordering the management respondent to pay attorney’s fees in an amount equivalent to ten percent (10%) of
whatever total amount that the workers union may receive representing individual wage differentials.
 34

As to the other claims of the Union regarding diminution of other benefits, this accredited voluntary arbitrator is of the
opinion that she has no authority to entertain, particularly as to the computation thereof.

SO ORDERED.38

Both parties appealed the Decision of AVA Montejo to the CA. Cullo only assailed the Decision in so far as it did not
categorically order respondent to pay the covered workers their differentials in wages reckoned from the effectivity of the
MOA up to the actual reinstatement of the reduced wages and benefits. Cullos' petition was docketed as CA-G.R. SP No.
83831. Respondent, for its part, questioned among others the jurisdiction of the NCMB. Respondent maintained that the
MOA it had entered into with the officers of the Union was valid. Respondent's petition was docketed as CA-G.R. SP No.
83657. Both cases were consolidated by the CA.

On October 11, 2005, the CA rendered a Decision39 ruling in favor of respondent, the dispositive portion of which reads:

WHEREFORE, premises considered, the petition for review in CA-G.R. SP No. 83657 is hereby GRANTED, while the
petition in CA-G.R. SP No. 83831 is DENIED. Consequently, the assailed Decision dated April 5, 2004 rendered by AVA
Rosalina L. Montejo is hereby REVERSED and a new one entered declaring the Memorandum of Agreement dated May 8,
2001 VALID and ENFORCEABLE. Parties are DIRECTED to comply with the terms and conditions thereof.

SO ORDERED.40

Aggrieved, Cullo filed a Motion for Reconsideration, which was, however, denied by the CA in a Resolution 41 dated July 13,
2006.

Hence, herein petition, with Cullo raising the following issues for this Court's resolution, to wit:

I.

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN FINDING THAT
THE ACCREDITED VOLUNTARY ARBITRATOR HAS NO JURISDICTION OVER THE CASE SIMPLY BECAUSE THE
NOTICE OF MEDIATION DOES NOT MENTION THE NAME OF THE LOCAL UNION BUT ONLY THE AFFILIATE
FEDERATION THEREBY DISREGARDING THE SUBMISSION AGREEMENT DULY SIGNED BY THE PARTIES AND
THEIR LEGAL COUNSELS THAT MENTIONS THE NAME OF THE LOCAL UNION.

II.

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR BY DISREGARDING
THE PROVISIONS OF THE CBA SIMPLY BECAUSE IT BELIEVED THE UNPROVEN ALLEGATIONS OF
RESPONDENT HOTEL THAT IT WAS SUFFERING FROM FINANCIAL CRISIS.

III.

THE HONORABLE COURT OF APPEALS MUST HAVE SERIOUSLY ERRED IN CONCLUDING THAT ARTICLE 100 OF
THE LABOR CODE APPLIES ONLY TO BENEFITS ENJOYED PRIOR TO THE ADOPTION OF THE LABOR CODE
WHICH, IN EFFECT, ALLOWS THE DIMINUTION OF THE BENEFITS ENJOYED BY EMPLOYEES FROM ITS
ADOPTION HENCEFORTH.42

The petition is not meritorious.

Anent the first error raised, Cullo argues that the CA erred when it overlooked the fact that before the case was submitted
to voluntary arbitration, the parties signed a Submission Agreement which mentioned the name of the local union and not
only NFL. Cullo, thus, contends that the CA committed error when it ruled that the voluntary arbitrator had no
jurisdiction over the case simply because the Notice of Mediation did not state the name of the local union thereby
disregarding the Submission Agreement which states the names of local union as Insular Hotel Employees Union-NFL.43

In its Memorandum,44 respondent maintains its position that the NCMB and Voluntary Arbitrators had no jurisdiction
over the complaint. Respondent, however, now also contends that IHEU-NFL is a non-entity since it is DIHFEU-NFL
 35

which is considered by the DOLE as the only registered union in Waterfront Davao. 45 Respondent argues that the
Submission Agreement does not name the local union DIHFEU-NFL and that it had timely withdrawn its consent to
arbitrate by filing a motion to withdraw.

A review of the development of the case shows that there has been much confusion as to the identity of the party which
filed the case against respondent. In the Notice of Mediation46 filed before the NCMB, it stated that the union involved was
"DARIUS JOVES/DEBBIE PLANAS ET. AL., National Federation of Labor." In the Submission Agreement, 47 however, it
stated that the union involved was "INSULAR HOTEL EMPLOYEES UNION-NFL."

Furthermore, a perusal of the records would reveal that after signing the Submission Agreement, respondent persistently
questioned the authority and standing of the individual employees to file the complaint. Cullo then clarified in subsequent
documents captioned as "National Federation of Labor and 79 Individual Employees, Union Members, Complainants"
that the individual complainants are not representing the union, but filing the complaint through their appointed
attorneys-in-fact.48 AVA Olvida, however, in a Resolution dated March 18, 2003, agreed with respondent that the proper
party-complainant should be INSULAR HOTEL EMPLOYEES UNION-NFL, to wit:

x x x In the submission agreement of the parties dated August 29, 2002, the party complainant written is INSULAR
HOTEL EMPLOYEES UNION-NFL and not the NATIONAL FEDERATION OF LABOR and 79 other members.49

The dispositive portion of the Resolution dated March 18, 2003 of AVA Olvida reads:

WHEREFORE, premises considered, the motion for reconsideration filed by respondent is DENIED. The resolution dated
November 11, 2002, is modified in so far as the party complainant is concerned, thus, instead of "National Federation of
Labor and 79 individual employees, union members," shall be "Insular Hotel Employees Union-NFL et. al., as stated in the
joint submission agreement dated August 29, 2002. Respondent is directed to comply with the decision of this Arbitrator
dated November 11, 2002.50

After the March 18, 2003 Resolution of AVA Olvida, Cullo adopted "Insular Hotel Employees Union-NFL et.
al., Complainant" as the caption in all his subsequent pleadings. Respondent, however, was still adamant that neither
Cullo nor the individual employees had authority to file the case in behalf of the Union.

While it is undisputed that a submission agreement was signed by respondent and "IHEU-NFL," then represented by
Joves and Cullo, this Court finds that there are two circumstances which affect its validity: first, the Notice of Mediation
was filed by a party who had no authority to do so; second, that respondent had persistently voiced out its objection
questioning the authority of Joves, Cullo and the individual members of the Union to file the complaint before the NCMB.

Procedurally, the first step to submit a case for mediation is to file a notice of preventive mediation with the NCMB. It is
only after this step that a submission agreement may be entered into by the parties concerned.

Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice of preventive mediation, to wit:

Who may file a notice or declare a strike or lockout or request preventive mediation. -

Any certified or duly recognized bargaining representative may file a notice or declare a strike or request
for preventive mediation in cases of bargaining deadlocks and unfair labor practices. The employer may file
a notice or declare a lockout or request for preventive mediation in the same cases. In the absence of a certified or duly
recognized bargaining representative, any legitimate labor organization in the establishment may file a notice, request
preventive mediation or declare a strike, but only on grounds of unfair labor practice.

From the foregoing, it is clear that only a certified or duly recognized bargaining agent may file a notice or request for
preventive mediation. It is curious that even Cullo himself admitted, in a number of pleadings, that the case was filed not
by the Union but by individual members thereof. Clearly, therefore, the NCMB had no jurisdiction to entertain the notice
filed before it.

Even though respondent signed a Submission Agreement, it had, however, immediately manifested its desire to withdraw
from the proceedings after it became apparent that the Union had no part in the complaint. As a matter of fact, only four
days had lapsed after the signing of the Submission Agreement when respondent called the attention of AVA Olvida in a
 36

"Manifestation with Motion for a Second Preliminary Conference"51 that the persons who filed the instant complaint in the
name of Insular Hotel Employees Union-NFL had no authority to represent the Union. Respondent cannot be estopped in
raising the jurisdictional issue, because it is basic that the issue of jurisdiction may be raised at any stage of the
proceedings, even on appeal, and is not lost by waiver or by estoppel.

In Figueroa v. People,52 this Court explained that estoppel is the exception rather than the rule, to wit:

Applying the said doctrine to the instant case, the petitioner is in no way estopped by laches in assailing the jurisdiction of
the RTC, considering that he raised the lack thereof in his appeal before the appellate court. At that time, no considerable
period had yet elapsed for laches to attach. True, delay alone, though unreasonable, will not sustain the defense of
"estoppel by laches" unless it further appears that the party, knowing his rights, has not sought to enforce them until the
condition of the party pleading laches has in good faith become so changed that he cannot be restored to his former state,
if the rights be then enforced, due to loss of evidence, change of title, intervention of equities, and other causes. In
applying the principle of estoppel by laches in the exceptional case of Sibonghanoy, the Court therein considered the
patent and revolting inequity and unfairness of having the judgment creditors go up their Calvary once more after more or
less 15 years.The same, however, does not obtain in the instant case.

We note at this point that estoppel, being in the nature of a forfeiture, is not favored by law. It is to be applied rarely—only
from necessity, and only in extraordinary circumstances. The doctrine must be applied with great care and the equity must
be strong in its favor.When misapplied, the doctrine of estoppel may be a most effective weapon for the accomplishment of
injustice. x x x (Italics supplied.)53

The question to be resolved then is, do the individual members of the Union have the requisite standing to question the
MOA before the NCMB? On this note, Tabigue v. International Copra Export Corporation (INTERCO)54 is instructive:

Respecting petitioners’ thesis that unsettled grievances should be referred to voluntary arbitration as called for in the CBA,
the same does not lie.The pertinent portion of the CBA reads:

In case of any dispute arising from the interpretation or implementation of this Agreement or any matter affecting the
relations of Labor and Management, the UNION and the COMPANY agree to exhaust all possibilities of conciliation
through the grievance machinery. The committee shall resolve all problems submitted to it within fifteen (15) days after
the problems ha[ve] been discussed by the members. If the dispute or grievance cannot be settled by the Committee, or if
the committee failed to act on the matter within the period of fifteen (15) days herein stipulated, the UNION and the
COMPANY agree to submit the issue to Voluntary Arbitration. Selection of the arbitrator shall be made within seven (7)
days from the date of notification by the aggrieved party. The Arbitrator shall be selected by lottery from four (4) qualified
individuals nominated by in equal numbers by both parties taken from the list of Arbitrators prepared by the National
Conciliation and Mediation Board (NCMB). If the Company and the Union representatives within ten (10) days fail to
agree on the Arbitrator, the NCMB shall name the Arbitrator. The decision of the Arbitrator shall be final and binding
upon the parties. However, the Arbitrator shall not have the authority to change any provisions of the Agreement.The cost
of arbitration shall be borne equally by the parties.

Petitioners have not, however, been duly authorized to represent the union. Apropos is this Court’s pronouncement in
Atlas Farms, Inc. v. National Labor Relations Commission, viz:

x x x Pursuant to Article 260 of the Labor Code, the parties to a CBA shall name or designate their respective
representatives to the grievance machinery and if the grievance is unsettled in that level, it shall automatically be referred
to the voluntary arbitrators designated in advance by parties to a CBA. Consequently, only disputes involving the union
and the company shall be referred to the grievance machinery or voluntary arbitrators. (Emphasis and
underscoring supplied.)55

If the individual members of the Union have no authority to file the case, does the federation to which the local union is
affiliated have the standing to do so? On this note, Coastal Subic Bay Terminal, Inc. v. Department of Labor and
Employment56 is enlightening, thus:

x x x A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct
voluntary association owing its creation to the will of its members. Mere affiliation does not divest the local union
of its own personality, neither does it give the mother federation the license to act independently of the
 37

local union. It only gives rise to a contract of agency, where the former acts in representation of the latter. Hence, local
unions are considered principals while the federation is deemed to be merely their agent. x x x 57

Based on the foregoing, this Court agrees with approval with the disquisition of the CA when it ruled that NFL had no
authority to file the complaint in behalf of the individual employees, to wit:

Anent the first issue, We hold that the voluntary arbitrator had no jurisdiction over the case. Waterfront contents that the
Notice of Mediation does not mention the name of the Union but merely referred to the National Federation of Labor
(NFL) with which the Union is affiliated. In the subsequent pleadings, NFL's legal counsel even confirmed that the case
was not filed by the union but by NFL and the individual employees named in the SPAs which were not even dated nor
notarized.

Even granting that petitioner Union was affiliated with NFL, still the relationship between that of the local union and the
labor federation or national union with which the former was affiliated is generally understood to be that of agency, where
the local is the principal and the federation the agency. Being merely an agent of the local union, NFL should have
presented its authority to file the Notice of Mediation. While We commend NFL's zealousness in protecting the rights of
lowly workers, We cannot, however, allow it to go beyond what it is empowered to do.

As provided under the NCMB Manual of Procedures, only a certified or duly recognized bargaining representative and an
employer may file a notice of mediation, declare a strike or lockout or request preventive mediation. The Collective
Bargaining Agreement (CBA), on the other, recognizes that DIHFEU-NFL is the exclusive bargaining representative of all
permanent employees. The inclusion of the word "NFL" after the name of the local union merely stresses that the local
union is NFL's affiliate. It does not, however, mean that the local union cannot stand on its own. The local union owes its
creation and continued existence to the will of its members and not to the federation to which it belongs. The spring
cannot rise higher than its source, so to speak.58

In its Memorandum, respondent contends that IHEU-NFL is a non-entity and that DIHFEU-NFL is the only recognized
bargaining unit in their establishment. While the resolution of the said argument is already moot and academic given the
discussion above, this Court shall address the same nevertheless.

While the November 16, 2006 Certification59 of the DOLE clearly states that "IHEU-NFL" is not a registered labor
organization, this Court finds that respondent is estopped from questioning the same as it did not raise the said issue in
the proceedings before the NCMB and the Voluntary Arbitrators. A perusal of the records reveals that the main theory
posed by respondent was whether or not the individual employees had the authority to file the complaint notwithstanding
the apparent non-participation of the union. Respondent never put in issue the fact that DIHFEU-NFL was not the same
as IHEU-NFL. Consequently, it is already too late in the day to assert the same.

Anent the second issue raised by Cullo, the same is again without merit.

Cullo contends that respondent was not really suffering from serious losses as found by the CA. Cullo anchors his position
on the denial by the Wage Board of respondent's petition for exemption from Wage Order No. RTWPB-X1-08 on the
ground that it is a distressed establishment.60 In said denial, the Board ruled:

A careful analysis of applicant's audited financial statements showed that during the period ending December 31, 1999, it
registered retained earnings amounting to ₱8,661,260.00. Applicant's interim financial statements for the
quarter ending June 30, 2000 cannot be considered, as the same was not audited. Accordingly, this Board
finds that applicant is not qualified for exemption as a distressed establishment pursuant to the aforecited criteria. 61

In its Decision, the CA held that upholding the validity of the MOA would mean the continuance of the hotel's operation
and financial viability, to wit:

x x x We cannot close Our eyes to the impending financial distress that an employer may suffer should the terms of
employment under the said CBA continue.

If indeed We are to tilt the balance of justice to labor, then We would be inclined to favor for the nonce petitioner
Waterfront. To uphold the validity of the MOA would mean the continuance of the hotel's operation and financial viability.
Otherwise, the eventual permanent closure of the hotel would only result to prejudice of the employees, as a consequence
thereof, will necessarily lose their jobs.62
 38

In its petition before the CA, respondent submitted its audited financial statements 63 which show that for the years 1998,
1999, until September 30, 2000, its total operating losses amounted to ₱48,409,385.00. Based on the foregoing, the CA
was not without basis when it declared that respondent was suffering from impending financial distress. While the Wage
Board denied respondent's petition for exemption, this Court notes that the denial was partly due to the fact that the June
2000 financial statements then submitted by respondent were not audited. Cullo did not question nor discredit the
accuracy and authenticity of respondent's audited financial statements. This Court, therefore, has no reason to question
the veracity of the contents thereof. Moreover, it bears to point out that respondent's audited financial statements
covering the years 2001 to 2005 show that it still continues to suffer losses. 64

Finally, anent the last issue raised by Cullo, the same is without merit.

Cullo argues that the CA must have erred in concluding that Article 100 of the Labor Code applies only to benefits already
enjoyed at the time of the promulgation of the Labor Code.

Article 100 of the Labor Code provides:

PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS- Nothing in this Book shall be construed to
eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of the promulgation
of this Code.

On this note, Apex Mining Company, Inc. v. NLRC65 is instructive, to wit:

Clearly, the prohibition against elimination or diminution of benefits set out in Article 100 of the Labor Code is specifically
concerned with benefits already enjoyed at the time of the promulgation of the Labor Code. Article 100 does not, in other
words, purport to apply to situations arising after the promulgation date of the Labor Code x x x. 66

Even assuming arguendo that Article 100 applies to the case at bar, this Court agrees with respondent that the same does
not prohibit a union from offering and agreeing to reduce wages and benefits of the employees. In Rivera v.
Espiritu,67 this Court ruled that the right to free collective bargaining, after all, includes the right to suspend it, thus:

A CBA is "a contract executed upon request of either the employer or the exclusive bargaining representative
incorporating the agreement reached after negotiations 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 agreement."
The primary purpose of a CBA is the stabilization of labor-management relations in order to create a climate of a sound
and stable industrial peace. In construing a CBA, the courts must be practical and realistic and give due consideration to
the context in which it is negotiated and the purpose which it is intended to serve.

The assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations
undertaken in the light of the severe financial situation faced by the employer, with the peculiar and
unique intention of not merely promoting industrial peace at PAL, but preventing the latter’s closure. We
find no conflict between said agreement and Article 253-A of the Labor Code. Article 253-A has a two-fold purpose. One is
to promote industrial stability and predictability. Inasmuch as the agreement sought to promote industrial peace at PAL
during its rehabilitation, said agreement satisfies the first purpose of Article 253-A.1awphi1 The other is to assign specific
timetables wherein negotiations become a matter of right and requirement. Nothing in Article 253-A, prohibits the parties
from waiving or suspending the mandatory timetables and agreeing on the remedies to enforce the same.

In the instant case, it was PALEA, as the exclusive bargaining agent of PAL’s ground employees, that voluntarily entered
into the CBA with PAL. It was also PALEA that voluntarily opted for the 10-year suspension of the CBA. Either case was
the union’s exercise of its right to collective bargaining. The right to free collective bargaining, after all, includes
the right to suspend it.68

Lastly, this Court is not unmindful of the fact that DIHFEU-NFL's Constitution and By-Laws specifically provides that "the
results of the collective bargaining negotiations shall be subject to ratification and approval by majority vote of the Union
members at a meeting convened, or by plebiscite held for such special purpose." 69 Accordingly, it is undisputed that the
MOA was not subject to ratification by the general membership of the Union. The question to be resolved then is, does the
non-ratification of the MOA in accordance with the Union's constitution prove fatal to the validity thereof?
 39

It must be remembered that after the MOA was signed, the members of the Union individually signed contracts
denominated as "Reconfirmation of Employment."70 Cullo did not dispute the fact that of the 87 members of the Union,
who signed and accepted the "Reconfirmation of Employment," 71 are the respondent employees in the case at bar.
Moreover, it bears to stress that all the employees were assisted by Rojas, DIHFEU-NFL's president, who even co-signed
each contract.

Stipulated in each Reconfirmation of Employment were the new salary and benefits scheme. In addition, it bears to stress
that specific provisions of the new contract also made reference to the MOA. Thus, the individual members of the union
cannot feign knowledge of the execution of the MOA. Each contract was freely entered into and there is no indication that
the same was attended by fraud, misrepresentation or duress. To this Court's mind, the signing of the individual
"Reconfirmation of Employment" should, therefore, be deemed an implied ratification by the Union members of the MOA.

In Planters Products, Inc. v. NLRC,71 this Court refrained from declaring a CBA invalid notwithstanding that the same was
not ratified in view of the fact that the employees had enjoyed benefits under it, thus:

Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the Implementing Rules, the parties to a collective
[bargaining] agreement are required to furnish copies of the appropriate Regional Office with accompanying proof of
ratification by the majority of all the workers in a bargaining unit. This was not done in the case at bar. But we do not
declare the 1984-1987 CBA invalid or void considering that the employees have enjoyed benefits from it. They cannot
receive benefits under provisions favorable to them and later insist that the CBA is void simply because other provisions
turn out not to the liking of certain employees. x x x. Moreover, the two CBAs prior to the 1984-1987 CBA were not also
formally ratified, yet the employees are basing their present claims on these CBAs. It is iniquitous to receive benefits
from a CBA and later on disclaim its validity.72

Applied to the case at bar, while the terms of the MOA undoubtedly reduced the salaries and certain benefits previously
enjoyed by the members of the Union, it cannot escape this Court's attention that it was the execution of the MOA which
paved the way for the re-opening of the hotel, notwithstanding its financial distress. More importantly, the execution of
the MOA allowed respondents to keep their jobs. It would certainly be iniquitous for the members of the Union to sign
new contracts prompting the re-opening of the hotel only to later on renege on their agreement on the fact of the non-
ratification of the MOA.

In addition, it bears to point out that Rojas did not act unilaterally when he negotiated with respondent's management.
The Constitution and By-Laws of DIHFEU-NFL clearly provide that the president is authorized to represent the union on
all occasions and in all matters in which representation of the union may be agreed or required. 73 Furthermore, Rojas was
properly authorized under a Board of Directors Resolution 74 to negotiate with respondent, the pertinent portions of which
read:

SECRETARY's CERTIFICATE

I, MA. SOCORRO LISETTE B. IBARRA, x x x, do hereby certify that, at a meeting of the Board of Directors of the
DIHFEU-NFL, on 28 Feb. 2001 with a quorum duly constituted, the following resolutions were unanimously approved:

RESOLVED, as it is hereby resolved that the Manifesto dated 25 Feb. 2001 be approved ratified and adopted;

RESOLVED, FURTHER, that Mr. Domy R. Rojas, the president of the DIHFEU-NFL, be hereby authorized
to negotiate with Waterfront Insular Hotel Davao and to work for the latter's acceptance of the proposals
contained in DIHFEU-NFL Manifesto; and

RESOLVED, FINALLY, that Mr. Domy R. Rojas is hereby authorized to sign any and all documents to
implement, and carry into effect, his foregoing authority.75

Withal, while the scales of justice usually tilt in favor of labor, the peculiar circumstances herein prevent this Court from
applying the same in the instant petition. Even if our laws endeavor to give life to the constitutional policy on social justice
and on the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law
also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair
play.76
 40

WHEREFORE, premises considered, the petition is DENIED. The Decision dated October 11, 2005, and the Resolution
dated July 13, 2006 of the Court of Appeals in consolidated labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP
No. 83657, are AFFIRMED.

SO ORDERED.