PICOP Petition Challenges Ruling on Managerial Employee Status

1
[G. R. No.101738. April 12, 2000]
PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner, vs. HON. BIENVENIDO E. LAGUESMA, Undersecretary of
Labor and Employment, HON. HENRY PABEL, Director of the Department of Labor and Employment Regional Office No. XI
and/or the Representation Officer of the Industrial Relations Division who will act for and in his behalf, PCOP- BISLIG
SUPERVISORY AND TECHNICAL STAFF EMPLOYEES UNION, ASSOCIATED LABOR UNION and FEDERATION OF FREE
WORKERS, respondents.
DECISION
DE LEON, JR., J.: Miso
Before us is a petition for certiorari seeking to annul the Resolution[1] and the Order[2] dated April 17, 1991 and August 7,
1991, respectively, of public respondent Bienvenido E. Laguesma, acting then as Undersecretary, now the Secretary, of
the Department of Labor and Employment (DOLE), which reversed the Order dated March 27, 1990[3] of Med-Arbiter
Phibun D. Pura declaring that supervisors and section heads of petitioner under its new organizational structure are
managerial employees and should be excluded from the list of voters for the purpose of a certification election among
supervisory and technical staff employees of petitioner.[4]
The facts of the case are the following:
Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the manufacture of paper and timber
products, with principal place of operations at Tabon, Bislig, Surigao del Sur. It has over 9,000[5] employees, 944[6] of whom
are supervisory and technical staff employees. More or less 487 of these supervisory and technical staff employees are
signatory members of the private respondent PICOP-Bislig Supervisory and Technical Staff Employees Union (PBSTSEU).[7]
On August 9, 1989. PBSTSEU instituted a Petition[8] for Certification Election to determine the sole and exclusive bargaining
agent of the supervisory and technical staff employees of PICOP for collective bargaining agreement (CBA) purposes.
In a Notice[9] dated August 10, 1989, the initial hearing of the petition was set on August 18, 1989 but it was reset to
August 25, 1989, at the instance of PICOP, as it requested a fifteen (15) day period within which to file its comments
and/or position paper. But PICOP failed to file any comment or position paper. Meanwhile, private respondents
Federation of Free Workers (FFW) and Associated Labor Union (ALU) filed their respective petitions for intervention.
On September 14, 1989, Med-Arbiter Arturo L. Gamolo issued an Order[10] granting the petitions for interventions of the
FFW and ALU. Another Order[11] issued on the same day set the holding of a certification election among PICOP's
supervisory and technical staff employees in Tabon, Bislig, Surigao del Sur, with four (4) choices, namely: (1) PBSTSEU; (2)
FFW; (3) ALU; and (4) no union.
Nex old
On September 21, 1989, PICOP appealed[12] the Order which set the holding of the certification election contending that
the Med-Arbiter committed grave abuse of discretion in deciding the case without giving PICOP the opportunity to file its
comments/answer, and that PBSTSEU had no personality to file the petition for certification election.
After PBSTSEU filed its Comments[13] to petitioner's appeal, the Secretary of the Labor[14] issued a Resolution[15] dated
November 17, 1989 which upheld the Med-Arbiter's Order dated September 17, 1989, with modification allowing the
supervising and staff employees in Cebu, Davao and Iligan City to participate in the certification election.
2
During the pre-election conference on January 18, 1990, PICOP questioned and objected to the inclusion of some
section heads and supervisors in the list of voters whose positions it averred were reclassified as managerial employees in
the light of the reorganization effected by it.[16] Under the Revised Organizational Structure of the PICOP, the company
was divided into four (4) main business groups, namely: Paper Products Business, Timber Products Business, Forest
Resource Business and Support Services Business. A vice- president or assistant vice-president heads each of these
business groups. A division manager heads the divisions comprising each business group. A department manager heads
the departments comprising each division. Section heads and supervisors, now called section managers and unit
managers, head the sections and independent units, respectively, comprising each department.[17]PICOP advanced
the view that considering the alleged present authority of these section managers and unit managers to hire and fire,
they are classified as managerial employees, and hence, ineligible to form or join any labor organization.[18]
Mani kx
Following the submission by the parties of their respective position papers[19] and evidence[20] on this issue, Med-Arbiter
Phibun D. Pura issued an Order[21] dated March 27, 1990, holding that supervisors and section heads of the petitioner are
managerial employees and therefore excluded from the list of voters for purposes of certification election.
PBSTSEU appealed[22] the Order of the Med-Arbiter to the Office of the Secretary, DOLE. ALU likewise appealed.[23] PICOP
submitted evidence militating against the appeal.[24] Public respondent Bienvenido E. Laguesma, acting as the then
Undersecretary of Labor, issued the assailed Order[25] dated April 17, 1991 setting aside the Order dated March 27, 1990
of the Med-Arbiter and declaring that the subject supervisors and section heads are supervisory employees eligible to
vote in the certification election.
PICOP sought[26] reconsideration of the Order dated April 7, 1991. However, public respondent in his Order[27] dated
August 7, 1991 denied PICOP's motion for reconsideration.
Hence, this petition.
PICOP anchors its petition on two (2) grounds, to wit: Maniks
I.
THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF LABOR AND

EMPLOYMENT, IN A CAPRICIOUS, ARBITRARY AND WHIMSICAL EXERCISE OF POWER ERRED AND
COMMITTED GRAVE ABUSE OF DISCRETION, TANTAMOUNT TO ACTING WITHOUT OR IN EXCESS OF
JURISDICTION WHEN HE DENIED YOUR PETITIONER'S PLEA TO PRESENT ADDITIONAL EVIDENCE TO PROVE
THAT SOME OF ITS MANAGERIAL EMPLOYEES ARE DISQUALIFIED FROM JOINING OR FORMING A UNION
REPRESENTED BY CO-RESPONDENT PBSTSEU, IN VIEW OF A SUPERVENING EVENT BROUGHT ABOUT BY THE
CHANGES IN THE ORGANIZATIONAL STRUCTURE OF YOUR PETITIONER WHICH WAS FULLY IMPLEMENTED
IN JANUARY 1991 AFTER THE CASE WAS ELEVATED ON APPEAL AND SUBMITTED FOR DECISION.
II.
THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA, ALSO ERRED AND COMMITTED
GRAVE ABUSE OF DISCRETION, TANTAMOUNT TO ARBITRARILY ACTING WITHOUT OR IN EXCESS OF
JURISDICTION WHEN HE TOTALLY DISREGARDED THE DOCUMENTARY EVIDENCE SO FAR SUBMITTED BY
YOUR PETITIONER AND RELIED MAINLY ON THE UNSUBSTANTIATED CLAIM AND MERE ALLEGATIONS OF
PRIVATE RESPONDENT, PBSTSEU, THAT THE REORGANIZATION OF YOUR PETITIONER WAS A SHAM AND
CALCULATED MERELY TO FRUSTRATE THE UNIONIZATION OF YOUR PETITIONER'S SUPERVISORY
3
PERSONNEL; AND SOLELY ON THIS BASIS, DENIED YOUR PETITIONER'S URGENT MOTION FOR
RECONSIDERATION.[28] Ma
nikan
PICOP's main thesis is that the positions Section Heads and Supervisors, who have been designated as Section Managers
and Unit Managers, as the case may be, were converted to managerial employees under the decentralization and
reorganization program it implemented in 1989.
Being managerial employees, with alleged authority to hire and fire employees, they are ineligible for union membership
under Article 245[29] of the Labor Code. Furthermore, PICOP contends that no malice should be imputed against it for
implementing its decentralization program only after the petition for certification election was filed inasmuch as the
same is a valid exercise of its management prerogative, and that said program has long been in the drawing boards of
the company, which was realized only in 1989 and fully implemented in 1991. PICOP emphatically stresses that it could
not have conceptualized the decentralization program only for the purpose of "thwarting the right of the concerned
employees to self-organization."
The petition, not being meritorious, must fail and the same should be as it is hereby dismissed.
First. In United Pepsi-Co/a Supervisory Union (UPSU) v. Laguesma,[30] we had occasion to elucidate on the term
"managerial employees." Managerial employees are ranked as Top Managers, Middle Managers and First Line
Managers. Top and Middle Managers have the authority to devise, implement and control strategic and operational
policies while the task of First-Line Managers is simply to ensure that such policies are carried out by the rank-and- file
employees of an organization. Under this distinction, "managerial employees" therefore fall in two (2) categories, namely,
the "managers" per se composed of Top and Middle Managers, and the "supervisors" composed of First-Line
Managers.[31]
Thus, the mere fact that an employee is designated manager" does not ipso facto make him one. Designation should be
reconciled with the actual job description of the employee,[32] for it is the job description that determines the nature of
employment.[33] Oldmis o
In the petition before us, a thorough dissection of the job description[34] of the concerned supervisory employees and
section heads indisputably show that they are not actually managerial but only supervisory employees since they do not
lay down company policies. PICOP's contention that the subject section heads and unit managers exercise the authority
to hire and fire[35]is ambiguous and quite misleading for the reason that any authority they exercise is not supreme but
merely advisory in character. Theirs is not a final determination of the company policies inasmuch as any action taken by
them on matters relative to hiring, promotion, transfer, suspension and termination of employees is still subject to
confirmation and approval by their respective superior.[36] Thus, where such power, which is in effect recommendatory in
character, is subject to evaluation, review and final action by the department heads and other higher executives of the
company, the same, although present, is not effective and not an exercise of independent judgment as required by
law.[37]
Second. No denial of due process can be ascribed to public respondent Undersecretary Laguesma for the latter's denial
to allow PICOP to present additional evidence on the implementation of its program inasmuch as in the appeal before
the said public respondent, PICOP even then had already submitted voluminous supporting documents.[38] The record of
the case is replete with position papers and exhibits that dealt with the main thesis it relied upon. What the law prohibits is
the lack of opportunity to be heard.[39] PICOP has long harped on its contentions and these were dealt upon and
resolved in detail by public respondent Laguesma. We see no reason or justification to deviate from his assailed
resolutions for the reason that law and jurisprudence aptly support them.
4
Finally, considering all the foregoing, the fact that PICOP voiced out its objection to the holding of certification election,
despite numerous opportunities to ventilate the same, only after respondent Undersecretary of Labor affirmed the
holding thereof, simply bolstered the public respondents' conclusion that PICOP raised the issue merely to prevent and
thwart the concerned section heads and supervisory employees from exercising a right granted them by law. Needless
to stress, no obstacle must be placed to the holding of certification elections, for it is a statutory policy that should not be
circumvented.[40]
WHEREFORE, the petition is hereby DISMISSED, and the Resolution and Order of public respondent Bienvenido E.
Laguesma dated April 17, 1991 and August 17, 1991, respectively, finding the subject supervisors and section heads as
supervisory employees eligible to vote in the certification election are AFFIRMED. Costs against petitioner.
SO ORDERED.
TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA BREWERY,
Petitioner,
- versus -
G.R. No. 162025
Present:
CARPIO MORALES, J.,
Chairperson,
BRION,
BERSAMIN,
ABAD,* and
VILLARAMA, JR., JJ.
ASIA BREWERY, INC.,
Respondent.
Promulgated:
August 3, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
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DECISION
VILLARAMA, JR., J.:
For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, assailing the Decision[1] dated November 22, 2002 and Resolution[2] dated January 28, 2004 rendered by the
Court of Appeals (CA) in CA-G.R. SP No. 55578, granting the petition of respondent company and reversing the
Voluntary Arbitrators Decision[3] dated October 14, 1999.
The facts are:
Respondent Asia Brewery, Inc. (ABI) is engaged in the manufacture, sale and distribution of beer, shandy, bottled water
and glass products. ABI entered into a Collective Bargaining Agreement (CBA),[4] effective for five (5) years from August
1, 1997 to July 31, 2002, with Bisig at Lakas ng mga Manggagawa sa Asia-Independent (BLMA-INDEPENDENT), the
exclusive bargaining representative of ABIs rank-and-file employees. On October 3, 2000, ABI and BLMA-INDEPENDENT
signed a renegotiated CBA effective from August 1, 2000 to 31 July 2003.[5]
Article I of the CBA defined the scope of the bargaining unit, as follows:
Section 1. Recognition. The COMPANY recognizes the UNION as the sole and exclusive bargaining representative of all
the regular rank-and-file daily paid employees within the scope of the appropriate bargaining unit with respect to rates
of pay, hours of work and other terms and conditions of employment. The UNION shall not represent or accept for
membership employees outside the scope of the bargaining unit herein defined.
Section 2. Bargaining Unit. The bargaining unit shall be comprised of all regular rank-and-file daily-paid employees of the
COMPANY. However, the following jobs/positions as herein defined shall be excluded from the bargaining unit, to wit:
1. Managers
2. Assistant Managers
3. Section Heads
4. Supervisors
5. Superintendents
6. Confidential and Executive Secretaries
7. Personnel, Accounting and Marketing Staff
8. Communications Personnel
9. Probationary Employees
10. Security and Fire Brigade Personnel
11. Monthly Employees
12. Purchasing and Quality Control Staff[6] [EMPHASIS SUPPLIED.]
Subsequently, a dispute arose when ABIs management stopped deducting union dues from eighty-one (81) employees,
believing that their membership in BLMA-INDEPENDENT violated the CBA. Eighteen (18) of these affected employees are
QA Sampling Inspectors/Inspectresses and Machine Gauge Technician who formed part of the Quality Control Staff.
Twenty (20) checkers are assigned at the Materials Department of the Administration Division, Full Goods Department of
the Brewery Division and Packaging Division. The rest are secretaries/clerks directly under their respective division
managers.[7]
6
BLMA-INDEPENDENT claimed that ABIs actions restrained the employees right to self-organization and brought the matter
to the grievance machinery. As the parties failed to amicably settle the controversy, BLMA-INDEPENDENT lodged a
complaint before the National Conciliation and Mediation Board (NCMB). The parties eventually agreed to submit the
case for arbitration to resolve the issue of [w]hether or not there is restraint to employees in the exercise of their right to
self-organization.[8]
In his Decision, Voluntary Arbitrator Bienvenido Devera sustained the BLMA-INDEPENDENT after finding that the records
submitted by ABI showed that the positions of the subject employees qualify under the rank-and-file category because
their functions are merely routinary and clerical. He noted that the positions occupied by the checkers and
secretaries/clerks in the different divisions are not managerial or supervisory, as evident from the duties and
responsibilities assigned to them. With respect to QA Sampling Inspectors/Inspectresses and Machine Gauge Technician,
he ruled that ABI failed to establish with sufficient clarity their basic functions as to consider them Quality Control Staff
who were excluded from the coverage of the CBA. Accordingly, the subject employees were declared eligible for
inclusion within the bargaining unit represented by BLMA-INDEPENDENT.[9]
On appeal, the CA reversed the Voluntary Arbitrator, ruling that:
WHEREFORE, foregoing premises considered, the questioned decision of the Honorable Voluntary Arbitrator Bienvenido
De Vera is hereby REVERSED and SET ASIDE, and A NEW ONE ENTERED DECLARING THAT:
a) the 81 employees are excluded from and are not eligible for inclusion in the bargaining unit as defined in Section 2,
Article I of the CBA;
b) the 81 employees cannot validly become members of respondent and/or if already members, that their membership
is violative of the CBA and that they should disaffiliate from respondent; and
c) petitioner has not committed any act that restrained or tended to restrain its employees in the exercise of their right to
self-organization.
NO COSTS.
SO ORDERED.[10]
BLMA-INDEPENDENT filed a motion for reconsideration. In the meantime, a certification election was held on August 10,
2002 wherein petitioner Tunay na Pagkakaisa ng Manggagawa sa Asia (TPMA) won. As the incumbent bargaining
representative of ABIs rank-and-file employees claiming interest in the outcome of the case, petitioner filed with the CA
an omnibus motion for reconsideration of the decision and intervention, with attached petition signed by the union
officers.[11] Both motions were denied by the CA.[12]
The petition is anchored on the following grounds:
(1)
THE COURT OF APPEALS ERRED IN RULING THAT THE 81 EMPLOYEES ARE EXCLUDED FROM AND ARE NOT ELIGIBLE FOR
INCLUSION IN THE BARGAINING UNIT AS DEFINED IN SECTION 2, ARTICLE 1 OF THE CBA[;]
(2)
THE COURT OF APPEALS ERRED IN HOLDING THAT THE 81 EMPLOYEES CANNOT VALIDLY BECOME UNION MEMBERS, THAT
THEIR MEMBERSHIP IS VIOLATIVE OF THE CBA AND THAT THEY SHOULD DISAFFILIATE FROM RESPONDENT;
(3)
THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT PETITIONER (NOW PRIVATE RESPONDENT) HAS NOT
COMMITTED ANY ACT THAT RESTRAINED OR TENDED TO RESTRAIN ITS EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO SELF-
ORGANIZATION.[13]
Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial
employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their
positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are
likewise privy to sensitive and highly confidential records.[14] Confidential employees are thus excluded from the rank-
and-file bargaining unit. The rationale for their separate category and disqualification to join any labor organization is
similar to the inhibition for managerial employees because if allowed to be affiliated with a Union, the latter might not be
assured of their loyalty in view of evident conflict of interests and the Union can also become company-denominated
with the presence of managerial employees in the Union membership.[15] Having access to confidential information,
7
confidential employees may also become the source of undue advantage. Said employees may act as a spy or spies of
either party to a collective bargaining agreement.[16]
In Philips Industrial Development, Inc. v. NLRC,[17] this Court held that petitioners division secretaries, all Staff of General
Management, Personnel and Industrial Relations Department, Secretaries of Audit, EDP and Financial Systems are
confidential employees not included within the rank-and-file bargaining unit.[18] Earlier, in Pier 8 Arrastre & Stevedoring
Services, Inc. v. Roldan-Confesor,[19] we declared that legal secretaries who are tasked with, among others, the typing
of legal documents, memoranda and correspondence, the keeping of records and files, the giving of and receiving
notices, and such other duties as required by the legal personnel of the corporation, fall under the category of
confidential employees and hence excluded from the bargaining unit composed of rank-and-file employees.[20]
Also considered having access to vital labor information are the executive secretaries of the General Manager and the
executive secretaries of the Quality Assurance Manager, Product Development Manager, Finance Director,
Management System Manager, Human Resources Manager, Marketing Director, Engineering Manager, Materials
Manager and Production Manager.[21]
In the present case, the CBA expressly excluded Confidential and Executive Secretaries from the rank-and-file
bargaining unit, for which reason ABI seeks their disaffiliation from petitioner. Petitioner, however, maintains that except
for Daisy Laloon, Evelyn Mabilangan and Lennie Saguan who had been promoted to monthly paid positions, the
following secretaries/clerks are deemed included among the rank-and-file employees of ABI:[22]
NAME
DEPARTMENT
IMMEDIATE SUPERIOR
C1 ADMIN DIVISION
1. Angeles, Cristina C.
Transportation
Mr. Melito K. Tan
2. Barraquio, Carina P.
Transportation
Mr. Melito K. Tan
3. Cabalo, Marivic B.
Transportation
Mr. Melito K. Tan
4. Fameronag, Leodigario C.
Transportation
Mr. Melito K. Tan

8
1. Abalos, Andrea A.
Materials
Mr. Andres G. Co
2. Algire, Juvy L.
Materials
Mr. Andres G. Co
3. Anouevo, Shirley P.
Materials
Mr. Andres G. Co
4. Aviso, Rosita S.
Materials
Mr. Andres G. Co
5. Barachina, Pauline C.
Materials
Mr. Andres G. Co
6. Briones, Catalina P.
Materials
Mr. Andres G. Co
7. Caralipio, Juanita P.
Materials
Mr. Andres G. Co
8. Elmido, Ma. Rebecca S.
Materials
Mr. Andres G. Co
9. Giron, Laura P.
Materials
Mr. Andres G. Co
10. Mane, Edna A.
Materials
Mr. Andres G. Co
9
xxxx
C2 BREWERY DIVISION
1. Laloon, Daisy S.
Brewhouse
Mr. William Tan
1. Arabit, Myrna F.
Bottling Production
Mr. Julius Palmares
2. Burgos, Adelaida D.
Bottling Production
Mr. Julius Palmares
3. Menil, Emmanuel S.
Bottling Production
Mr. Julius Palmares
4. Nevalga, Marcelo G.
Bottling Production
Mr. Julius Palmares

10
1. Mapola, Ma. Esraliza T.
Bottling Maintenance
Mr. Ernesto Ang
2. Velez, Carmelito A.
Bottling Maintenance
Mr. Ernesto Ang
1. Bordamonte, Rhumela D.
Bottled Water
Mr. Faustino Tetonche
2. Deauna, Edna R.
Bottled Water
3. Punongbayan, Marylou F.
Bottled Water
4. Saguan, Lennie Y.
Bottled Water
1. Alcoran, Simeon A.
Full Goods
Mr. Tsoi Wah Tung
2. Cervantes, Ma. Sherley Y.
Full Goods
Mr. Tsoi Wah Tung
3. Diongco, Ma. Teresa M.

11
Full Goods
Mr. Tsoi Wah Tung
4. Mabilangan, Evelyn M.
Full Goods
Mr. Tsoi Wah Tung
5. Rivera, Aurora M.
Full Goods
Mr. Tsoi Wah Tung
6. Salandanan, Nancy G.
Full Goods
Mr. Tsoi Wah Tung
1. Magbag, Ma. Corazon C.
Tank Farm/
Cella Services
Mr. Manuel Yu Liat
1. Capiroso, Francisca A.
Quality Assurance
Ms. Regina Mirasol
1. Alconaba, Elvira C.
Engineering
Mr. Clemente Wong
2. Bustillo, Bernardita E.
Electrical
Mr. Jorge Villarosa

12
3. Catindig, Ruel A.
Civil Works
Mr. Roger Giron
4. Sison, Claudia B.
Utilities
Mr. Venancio Alconaba
xxxx
C3 PACKAGING DIVISION
1. Alvarez, Ma. Luningning L.
GP Administration
Ms. Susan Bella
2. Caiza, Alma A.
GP Technical
Mr. Chen Tsai Tyan
3. Cantalejo, Aida S.
GP Engineering
Mr. Noel Fernandez
4. Castillo, Ma. Riza R.
GP Production
Mr. Tsai Chen Chih

13
5. Lamadrid, Susana C.
GP Production
Mr. Robert Bautista
6. Mendoza, Jennifer L.
GP Technical
Mr. Mel Oa
As can be gleaned from the above listing, it is rather curious that there would be several secretaries/clerks for just one (1)
department/division performing tasks which are mostly routine and clerical. Respondent insisted they fall under the
Confidential and Executive Secretaries expressly excluded by the CBA from the rank-and-file bargaining unit. However,
perusal of the job descriptions of these secretaries/clerks reveals that their assigned duties and responsibilities involve
routine activities of recording and monitoring, and other paper works for their respective departments while secretarial
tasks such as receiving telephone calls and filing of office correspondence appear to have been commonly imposed as
additional duties.[23] Respondent failed to indicate who among these numerous secretaries/clerks have access to
confidential data relating to management policies that could give rise to potential conflict of interest with their Union
membership. Clearly, the rationale under our previous rulings for the exclusion of executive secretaries or division
secretaries would have little or no significance considering the lack of or very limited access to confidential information
of these secretaries/clerks. It is not even farfetched that the job category may exist only on paper since they are all daily-
paid workers. Quite understandably, petitioner had earlier expressed the view that the positions were just being
reclassified as these employees actually discharged routine functions.
We thus hold that the secretaries/clerks, numbering about forty (40), are rank-and-file employees and not confidential
employees.
With respect to the Sampling Inspectors/Inspectresses and the Gauge Machine Technician, there seems no dispute that
they form part of the Quality Control Staff who, under the express terms of the CBA, fall under a distinct category. But we
disagree with respondents contention that the twenty (20) checkers are similarly confidential employees being quality
control staff entrusted with the handling and custody of company properties and sensitive information.
Again, the job descriptions of these checkers assigned in the storeroom section of the Materials Department, finishing
section of the Packaging Department, and the decorating and glass sections of the Production Department plainly
showed that they perform routine and mechanical tasks preparatory to the delivery of the finished products.[24] While it
may be argued that quality control extends to post-production phase -- proper packaging of the finished products -- no
evidence was presented by the respondent to prove that these daily-paid checkers actually form part of the companys
Quality Control Staff who as such were exposed to sensitive, vital and confidential information about [companys]
products or have knowledge of mixtures of the products, their defects, and even their formulas which are considered
trade secrets. Such allegations of respondent must be supported by evidence.[25]
Consequently, we hold that the twenty (20) checkers may not be considered confidential employees under the
category of Quality Control Staff who were expressly excluded from the CBA of the rank-and-file bargaining unit.
Confidential employees are defined as those who (1) assist or act in a confidential capacity, (2) to persons who
formulate, determine, and effectuate management policies in the field of labor relations. The two (2) criteria are
cumulative, and both must be met if an employee is to be considered a confidential employee that is, the confidential
relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations. The exclusion from bargaining units of employees who, in the normal course of
their duties, become aware of management policies relating to labor relations is a principal objective sought to be
accomplished by the confidential employee rule.[26] There is no showing in this case that the secretaries/clerks and
checkers assisted or acted in a confidential capacity to managerial employees and obtained confidential information
relating to labor relations policies. And even assuming that they had exposure to internal business operations of the
company, respondent claimed, this is not per se ground for their exclusion in the bargaining unit of the daily-paid rank-
and-file employees.[27]
Not being confidential employees, the secretaries/clerks and checkers are not disqualified from membership in the
Union of respondents rank-and-file employees. Petitioner argues that respondents act of unilaterally stopping the
deduction of union dues from these employees constitutes unfair labor practice as it restrained the workers exercise of
their right to self-organization, as provided in Article 248 (a) of the Labor Code.
Unfair labor practice refers to acts that violate the workers right to organize. The prohibited acts are related to the
workers right to self organization and to the observance of a CBA. For a charge of unfair labor practice to prosper, it
14
must be shown that ABI was motivated by ill will, bad faith, or fraud, or was oppressive to labor, or done in a manner
contrary to morals, good customs, or public policy, and, of course, that social humiliation, wounded feelings or grave
anxiety resulted x x x[28] from ABIs act in discontinuing the union dues deduction from those employees it believed were
excluded by the CBA. Considering that the herein dispute arose from a simple disagreement in the interpretation of the
CBA provision on excluded employees from the bargaining unit, respondent cannot be said to have committed unfair
labor practice that restrained its employees in the exercise of their right to self-organization, nor have thereby
demonstrated an anti-union stance.
WHEREFORE, the petition is GRANTED. The Decision dated November 22, 2002 and Resolution dated January 28, 2004 of
the Court of Appeals in CA-G.R. SP No. 55578 are hereby REVERSED and SET ASIDE. The checkers and secretaries/clerks of
respondent company are hereby declared rank-and-file employees who are eligible to join the Union of the rank-and-
file employees.
No costs.
SO ORDERED.
G.R. No. 78755 July 19, 1989
GOLDEN FARMS, INC., petitioner,
vs.
THE HONORABLE DIRECTOR PURA FERRER-CALLEJA, BUREAU OF LABOR RELATIONS and NATIONAL FEDERATION OF LABOR,
respondents.
J. V. Yap Law Office for petitioner.
Beethoven L. Orcullo for private respondent.
PARAS, J.:
Petitioner Golden Farms, Inc., seeks a reversal of the resolution of public respondent Department of Labor and
Employment Director Pura Ferrer-Calleja in BLR Case No. A-2-56-87 which affirmed on appeal the decision of Labor
Arbiter Conrado O. Macasa, Sr., in NLRC Case No. R-418-ROXI-MED-UR-8886, issuing a directive as follows:
In view of the foregoing, the herein petition for certification election filed by the National Federation of Labor (NFL) is
hereby DISMISSED; whereas, its resultant and relevant consequence of its recognized representation of the entire rank-
and-file employees of the bargaining unit should be given life and meaning, as it is hereby directed, and Employer
Golden Farms, Incorporated likewise enjoined to negotiate for a supplementary collective bargaining agreement, or for
the inclusion of the herein monthly paid rank-and- file employees at Luna, Kapalong, Davao del Norte, and Lanang,
Davao City in the still existing negotiated contract, whichever the parties may consider just and appropriate under the
circumstances.
SO ORDERED. (p. 29, Rollo)

15
The case originated as a Petition for Direct Certification Election or Recognition filed by herein private respondent in
behalf of certain office employees and foremen before Regional Office No. XI, Davao City of the Ministry of Labor and
Employment. Petitioner herein opposed said petition on the ground among others that a perusal of the names allegedly
supporting the said petition showed that said persons by the nature of their jobs are performing managerial functions
and/or occupying confidential positions such that they cannot validly constitute a separate or distinct group from the
existing collective bargaining unit also represented by private respondent.
Petitioner is a corporation engaged in the production of bananas for export. Private respondent Union represents the
employees/workers of petitioner corporation, who were the same signatories to an earlier Petition for Certification
Election filed in 1984 before the Ministry of Labor known as ROXI Case No. UR-70-84, which was dismissed by a Resolution
issued by Med-Arbiter Conchita Martinez when it was established that a collective bargaining unit (NFL) between the
Corporation and the rank-and-file employees was and is in existence at the time of the filing of the said petition for
certification election until the present filing. However, in the order of dismissal, it was stated:
After taking into consideration the functions exercised by the foremen as contained in their joint affidavits (Annexes "A-1",
"A-2" & "A-3", Petitioner's Position Paper) apparently, they fall within the classification of rank-and-file employees. For, as
consistently ruled in a long line of decisions, mere supervisory designations in the position titles, do not make the holders
of such positions any less rank and filers, without the convincing proof that such supervisory designations are coupled
with actual performance of managerial functions. In the cases at bar, what was submitted by the respondent
companies are only lists of employees holding the positions of foremen and confidential positions and as such are not
covered by the bargaining unit. Such piece of evidence alone does not constitute convincing proof for us to adapt
respondents' stance (Annexes "A", "B", "C", & "D"). Comment on Petition). (p. 13, Rollo)
Having had no opportunity to contest the abovementioned statement in the order of dismissal, petitioner herein as
private respondent therein, filed a "Manifestation" stating among others:
2. That since the petitions were dismissed the herein employees make clear for the record that said view would
run counter to the provision of the pertinent Collective Bargaining Agreement whereby the foremen were already
acknowledged and agreed upon to be managerial employees and accordingly excluded from the coverage of the
said CBA;
3. That with respect to those employees holding confidential positions, it is a basic principle that they cannot be
included in any bargaining unit, the fact being that having access to confidential informations, said employees may be
the source of undue advantage. Said employees may act as spies for either parties to collective bargaining agreement.
This is especially true in this case where the petitioning union is already the bargaining agent of the rank-and-file
employees in the establishment. To allow confidential employees to join existing bargaining unit will defeat the very
purpose for which an employee holding confidential position was in the first place excluded. (p. 68, Rollo)
Private respondent herein as petitioner therein appealed the order of dismissal which was accordingly opposed (Annex
"L" p. 69, Rollo) by Golden Farms, Inc., reiterating the grounds and arguments set forth in its Manifestation filed earlier. The
appeal was dismissed and subsequently the National Federation of Labor Union refiled the Petition for Certification in
NLRC Case No. R-418- ROX-MED-UR-88-86 which was also dismissed. Said order of dismissal is now the subject of this
review for containing directives not within the power of a Med-Arbiter to issue. Petitioner Golden Farms, Inc., now poses
the following questions:
I HAS A MED-ARBITER THE POWER OR AUTHORITY TO DIRECT MANAGEMENT TO ENTER INTO A SUPPLEMENTAL COLLECTIVE
BARGAINING AGREEMENT WITH A CONTRACTING UNION.
16
II MAY SUPERVISORS, CASHIERS, FOREMEN, AND EMPLOYEES HOLDING CONFIDENTIAL/MANAGERIAL FUNCTION COMPEL
MANAGEMENT TO ENTER INTO A COLLECTIVE BARGAINING AGREEMENT WITH THEM. (p. 14, Rollo)
The petition merits Our consideration.
Respondents relied heavily on the alleged finding of Med-Arbiter Martinez that the employees who were signatories to
the petition for certification election and represented by respondent Union are actually rank-and-file workers not
disqualified from entering into a collective bargaining agreement with management. In said findings of fact, Med-Arbiter
Martinez singled out in her classification as rank-and-file employees the foremen of Petitioner Corporation considered
from their joint affidavits and for lack of convincing proof that their supervisory designations are coupled with the actual
performance of managerial functions.
Whether or not such finding is supported by the evidence is beside the point. Respondents herein do not dispute that the
signatories (listed in Annex "A", page 30, Rollo) to the Petition for certification election subject of this case, were holding
the positions of cashier, purchasers, personnel officers, foremen and employees having access to confidential
information such as accounting personnel, radio and telegraph operators and head of various sections. It is also a fact
that respondent Union is the exclusive bargaining Unit of the rank-and-file employees of petitioner corporation and that
an existing CBA between petitioner corporation and the Union representing these rank-and-file employees was still
enforced at the time the Union filed a petition for certification election in behalf of the aforementioned signatories.
Under the terms of said CBA (Annex "E", p. 40, Rollo) it is expressly provided that:
Section 1. The COMPANY and the UNION hereby agree that the recognized bargaining unit for purposes of this
agreement shall consist of regular rank-and-file workers employed by the COMPANY at the plantation presently situated
at Alejal, Carmen, Davao. Consequently, all managerial personnel like, superintendents, supervisor, foremen,
administrative, professional and confidential employees, and those temporary, casual, contractual, and seasonal
workers are excluded from the bargaining unit and therefore, not covered by this agreement.
(p. 41, Rollo)
Respondents do not dispute the existence of said collective bargaining agreement. We must therefore respect this CBA
which was freely and voluntarily entered into as the law between the parties for the duration of the period agreed upon.
Until then no one can be compelled to accept changes in the terms of the collective bargaining agreement.
Furthermore, the signatories to the petition for certification election are the very type of employees by the nature of their
positions and functions which We have decreed as disqualified from bargaining with management in case of Bulletin
Publishing Co. Inc. vs. Hon. Augusto Sanchez, etc. (144 SCRA 628) reiterating herein the rationale for such ruling as
follows: if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of
their loyalty to the Union in view of evident conflict of interests or that the Union can be company- dominated with the
presence of managerial employees in Union membership. A managerial employee is defined under Art. 212 (k) of the
new Labor Code as "one who is vested with powers or prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend
such managerial actions. All employees not falling within this definitions are considered rank-and-file employees for
purposes of this Book."
This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph operators,
who having access to confidential information, may become the source of undue advantage. Said employee(s) may
act as a spy or spies of either party to a collective bargaining agreement. This is specially true in the present case where
the petitioning Union is already the bargaining agent of the rank-and-file employees in the establishment. To allow the
17
confidential employees to join the existing Union of the rank-and-file would be in violation of the terms of the Collective
Bargaining Agreement wherein this kind of employees by the nature of their functions/positions are expressly excluded.
As to the company foremen, while in the performance of supervisory functions, they may be the extension or alter ego of
the management. Adversely, the foremen, by their actuation, may influence the workers under their supervision to
engage in slow down commercial activities or similar activities detrimental to the policy, interest or business objectives of
the company or corporation, hence they also cannot join.
WHEREFORE, finding the assailed directive of Med-Arbiter Conrado O. Macasa, Sr. which was affirmed by Director Pura
Ferrer-Calleja reiterating the directive of Med- Arbiter Conchita Martinez "to negotiate for a supplementary collective
bargaining agreement, or for the inclusion of the herein monthly paid rank-and- file employees" to be erroneous as it is in
complete disregard of the terms of the collective bargaining agreement, the same is hereby DECLARED to be without
force and effect.
SO ORDERED.
G.R. No. 88957 June 25, 1992
PHILIPS INDUSTRIAL DEVELOPMENT, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and PHILIPS EMPLOYEES ORGANIZATION (FFW), respondents.
DAVIDE, JR., J.:
In this petition for certiorari and prohibition under Rule 65 of the Rules of Court with a prayer for a temporary restraining
order and/or a writ of preliminary injunction, petitioner Philips Industrial Development, Inc. (PIDI) seeks to set aside the
Decision and Resolution, dated 16 January 1989 and 17 March 1989, respectively, of the National Labor Relations
Commission (NLRC) in Case No. NLRC-NCR-00-11-03936-87 on the ground that it committed grave abuse of discretion
amounting to lack of jurisdiction in holding that service engineers, sales representatives and confidential employees of
PIDI are qualified to be included in the existing bargaining unit.
18
PIDI is a domestic corporation engaged in the manufacturing and marketing of electronic products Since 1971, it had a
total of six (6) collective bargaining agreements (CBAs) with private respondent Philips Employees Organization-FFW
(PEO-FFW), a registered labor union and the certified bargaining agent of all the rank and file employees of PIDI. In the
first CBA (1971-1974), the supervisors referred to in R.A. No. 875, confidential employees, security guards, temporary
employees and sales representatives were excluded from the bargaining unit. In the second to the fifth CBAs (1975-1977;
1978-1980; 1981-1983; and 1984-1986), the sales force, confidential employees and heads of small units, together with the
managerial employees, temporary employees and security personnel, were specifically excluded from the bargaining
unit. 1 The confidential employees are the division secretaries of light/telecom/data and consumer electronics,
marketing managers, secretaries of the corporate planning and business manager, fiscal and financial system manager
and audit and EDP manager, and the staff of both the General Management and the Personnel Department. 2
In the sixth CBA covering the years 1987 to 1989, it was agreed upon, among others, that the subject of inclusion or
exclusion of service engineers, sales personnel and confidential employees in the coverage of the bargaining unit would
be submitted for arbitration. Pursuant thereto, on June 1987, PEO-FFW filed a petition before the Bureau of Labor
Relations (BLR) praying for an order "directing the parties to select a voluntary arbitrator in accordance with its rules and
regulations."
As the parties failed to agree on a voluntary arbitrator, the BLR endorsed the petition to the Executive Labor Arbiter of
the National Capital Region for compulsory arbitration pursuant to Article 228 of the Labor Code. Docketed as Case No.
NLRC-NCR-00-11-03936-87, the case was assigned to Executive Labor Arbiter Arthur Amansec.
On 17 March 1988, Labor Arbiter Amansec rendered a decision, the dispositive portion of which states:
In view of the foregoing, a decision is hereby rendered, ordering the respondent to conduct a referendum to determine
the will of the service engineers, sales representatives as to their inclusion or exclusion in the bargaining unit.
It is hereby declared that the Division Secretaries and all Staff of general management, personnel and industrial relations
department, secretaries of audit, EDP, financial system are confidential employees and as such are hereby deemed
excluded in the bargaining unit.
SO ORDERED.
PEO-FFW appealed from the decision to the NLRC.
On 16 January 1989, the NLRC rendered the questioned decision, the dispositive portion of which reads:
WHEREFORE, the foregoing premises considered, the appealed decision of the Executive Labor Arbiter is hereby SET
ASIDE and a new one entered declaring respondent company's Service Engineers, Sales Force, division secretaries, all
Staff of General Management, Personnel and Industrial Relations Department, Secretaries of Audit, EDP and Financial
Systems are included within the rank and file bargaining unit.
SO ORDERED.
19
The reversal is anchored on the respondent NLRC's conclusion that based on Section 1, 3 Rule II, Book V of the Omnibus
Rules Implementing the Labor Code, as amended by Section 3, Implementing Rules of E.O. No. 111; paragraph (c)
Section 2, Rule V of the same Code, as amended by Section 6 4 of the Implementing Rules of E.O. No. 111; and Article
245 5 of the Labor Code, as amended:
. . . all workers, except managerial employees and security personnel, are qualified to join or be a part of the bargaining
unit. . . .
It further ruled that:
The Executive Labor Arbiters directive that the service engineers and sales representatives to (sic) conduct a referendum
among themselves is erroneous inasmuch as it arrogates unto said employees the right to define what the law means. It
would not be amiss to state at this point that there would be no one more interested in excluding the subject employees
from the bargaining unit than management and that it would not be improbable for the latter to lobby and/or exert
pressure on the employees concerned, thus agitating unrest among the rank-and-file. Likewise, the Executive Labor
Arbiter's declaration that the Division Secretaries and all Staff of general management, personnel and industrial relations
department, secretaries of audit, EDP and financial system "are confidential employees and as such are hereby deemed
excluded in (sic) the bargaining unit" is contrary to law for the simple reason that the law, as earlier quoted, does not
mention them as among those to be excluded from the bargaining unit only (sic) managerial employees and security
guards. As a matter of fact, supervisory unions have already been dissolved and their members who do not fall within the
definition of managerial employees have become eligible to join or assist the rank-and-file organization. 6
Its motion for the reconsideration of this decision having been denied by the NLRC in its Resolution of 16 March 1989, a
copy of which it received on 8 June 1989, petitioner PIDI filed the instant petition on 20 July 1989, alleging that:
THE NLRC COMMITTED ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT SERVICE
ENGINEERS, SALES REPRESENTATIVES AND CONFIDENTIAL EMPLOYEES OF PETITIONER ARE QUALIFIED TO BE PART OF THE
EXISTING BARGAINING UNIT.
II
THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN NOT APPLYING THE TIME
HONORED "GLOBE DOCTRINE." 7
On 31 July 1989, this Court; required the respondents to comment on the petition, which PEO-FFW complied with on 28
August 1989. Public respondent NLRC, thru its counsel, the Solicitor General, moved for, and was granted a 30-day
extension to file its Comment.
On 18 September 1989, this Court required the parties to show cause why the petition should not be dismissed in view of
the finality of the NLRC decision as provided for by the penultimate sentence of Article 223 of the Labor Code, as
amended by R.A. No. 6715 R..A. No. 6715, which amended Article 223 of the Labor Code, was enacted on 2 March 1989
and took effect on 21 March 1989. The parties subsequently complied with the Resolution.
20
On 16 May 1990, this Court required the parties to submit Memoranda explaining the effect in this case of Article 223 of
the Labor Code, as amended by Section 12 of R.A. No-6715 with respect to the finality of decisions of the NLRC. The
parties complied separately with the same.
On 10 September 1990, this Court gave due course to the petition and required the parties to submit their respective
Memoranda. The petitioner and the Office of the Solicitor General filed their separate Memoranda. On the other hand,
PEO-FFW moved that its Motion and manifestation dated 23 August 1989 be considered as its Memorandum; this Court
granted the same.
As stated earlier, the principal issue in this case is whether the NLRC committed grave abuse of discretion in holding that
service engineers, sales representatives and confidential employees (division secretaries, staff of general management,
personnel and industrial relations department, secretaries of audit, EDP and financial system) are qualified to be
included in the existing bargaining unit. Petitioner maintains that it did, and in support of its stand that said employees
should not be absorbed by the existing bargaining unit, it urges this Court to consider these points:
1) The inclusion of the group in the existing bargaining unit would run counter to the history of this parties CBA. The
parties' five (5) previous CBAs consistently excluded this group of employees from the scope of the bargaining unit. The
rationale for such exclusion is that these employees hold positions which are highly sensitive, confidential and of a highly
fiduciary nature; to include them in the bargaining unit may subject the company to breaches in security and the
possible revelation of highly sensitive and confidential matters. It would cripple the company's bargaining position and
would give undue advantage to the union.
2) The absence of mutuality of interests between this group of employees and the regular rank and file militates
against such inclusion. A table prepared by the petitioner shows the disparity of interests between the said groups:
SERVICE ENGINEERS SERVICE
SALES REPRESENTATIVES TECHNICIANS
(Non-Bargaining (Bargaining
AREAS OF INTEREST Unit Employees) Unit Employees)
Qualifications Professional Employees High School/
Vocational
Grads.
Work Schedule With Night Shift None
Schedule
Night Shift 10% of Basic Rate None
Differential Pay
Stand-By Call & On Stand-By Call with: None

21
Allowance First Line:15% of
basic rate
Second Line: 10% of
basic rate
Uniforms None 2 sets of polo
& pants every
6 months
Retirement Benefits 15 yrs. ser.70% 15 yrs. serv. 50%
16 75% 16 85%
17 80% 17 90%
18 85% 18 100%
19 90% 19 115%
20 100% 20 135%
Year End Performance Merit Increase system None
Evaluation
Sales Commission Yes None
Car LoanYes None
Precalculated Yes None
Kilometer allowance
The Office of the Solicitor General supports the decision of the Executive Labor Arbiter and refuses to uphold the position
of the NLRC. It holds the view that the division Secretaries; the staff members of General Management, Personnel and
the Industrial Relations Department; and the secretaries of Audit, EDP and Financial Systems, are disqualified from joining
the PEO-FFW as they are confidential employees. They cannot even form a union of their own for, as held in Golden
Farms, Inc. vs. Ferrer-Calleja, 8 the rationale for the disqualification of managerial employees from joining unions holds
true also for confidential employees. As regards the sales representatives and service engineers, however, there is no
doubt that they are entitled to join or form a union, as they are not disqualified by law from doing so. Considering that
they have interests dissimilar to those of the rank and file employees comprising the existing bargaining unit, and
following the Globe Doctrine enunciated in In Re: Globe Machine and Stamping Company 9 to the effect that in
determining the proper bargaining unit the express will or desire of the employees shall be considered, they should be
allowed to determine for themselves what union to join or form. The best way to determine their preference is through a
referendum. As shown by the records, such a. referendum was decreed by the Executive Labor Arbiter.
The petition is impressed with merit.

22
At the outset, We express Our agreement with the petitioner's view that respondent NLRC did not quite accurately
comprehend the issue raised before it. Indeed, the issue is not whether the subject employees may join or form a union,
but rather, whether or not they may be part of the existing bargaining unit for the rank and file employees of PIDI.
Even if the issue was, indeed, as perceived by the NLRC, still, a palpable error was committed by it in ruling that under
the law, all workers, except managerial employees and security personnel, are qualified to join a union, or form part of a
bargaining unit. At the time Case No. NLRC-NCR-00-11-03936-87 was filed in 1987, security personnel were no longer
disqualified from joining or forming a union.
Section 6 of E.O. No. 111, enacted on 24 December 1986, repealed the original provisions of Article 245 of the Labor
Code, reading as follows:
Art. 245. Ineligibility of security personnel to join any labor organization. — Security guards and other personnel
employed for the protection and security of the person, properties and premises of the employer shall not be eligible for
membership, in any labor organization.
and substituted it with the following provision:
Art. 245. Right of employees in the public service. — 10
xxx xxx xxx
By virtue of such repeal and substitution, security guards became eligible for membership in any labor organization. 11
On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave abuse of discretion in
reversing the decision of the Executive Labor Arbiter and in decreeing that PIDI's "Service Engineers, Sales Force, division
secretaries, all Staff of General Management, Personnel and Industrial Relations Department, Secretaries of Audit, EDP
and Financial Systems are included within the rank and file bargaining unit."
In the first place, all these employees, with the exception of the service engineers and the sales force personnel, are
confidential employees. Their classification as such is not seriously disputed by PEO-FFW; the five (5) previous CBAs
between PIDI and PEO-FFW explicitly considered them as confidential employees. By the very nature of their functions,
they assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations. 12 As such, the rationale behind the ineligibility of managerial
employees to form, assist or join a labor union equally applies to them.
In Bulletin Publishing Co., Inc. vs. Hon Augusto Sanchez, 13 this Court elaborated on this rationale, thus:
. . . The rationale for this inhibition has been stated to be, because if these managerial employees would belong to or be
affiliated with a Union, the latter might not be assured of their loyalty, to the Union in view of evident conflict of interests.
The Union can also become company-dominated with the presence of managerial employees in Union membership.
23
In Golden Farms, Inc. vs. Ferrer-Calleja, 14 this Court explicitly made this rationale applicable to confidential employees:
act as a spy or, spies of either party to a collective bargaining agreement. This is specially true in the present case where
Bargaining Agreement wherein this kind of employees by the nature of their functions/ positions are expressly excluded.
As regards the service engineers and the sales representatives, two (2) points which respondent NLRC likewise arbitrarily
and erroneously ruled upon agreed to be discussed. Firstly, in holding that they are included in the bargaining unit for the
rank and file employees of PIDI, the NLRC practically forced them to become members of PEO-FFW or to be subject to its
sphere of influence, it being the certified bargaining agent for the subject bargaining unit. This violates, obstructs, impairs
and impedes the service engineers' and the sales representatives' constitutional right to form unions or associations 15
and to self-organization. 16 In Victoriano vs. Elizalde Rope Workers Union, 17 this Court already ruled:
. . . Notwithstanding the different theories propounded by the different schools of jurisprudence regarding the nature
and contents of a "right", it can be safely said that whatever theory one subscribes to, a right comprehends at least two
broad notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee may act for
himself without being prevented by law; and second, power, whereby an employee may, as he pleases, join or refrain
from joining an association. It is, therefore, the employee who should decide for himself whether he should join or not an
association; and should he choose to join, he himself makes up his mind as to which association he would join; and even
after he has joined, he still retains the liberty and the power to leave and cancel his membership with said organization
at any time. 18 It is clear, therefore, that the right to join a union includes the right to abstain from joining any
union. 19 Inasmuch as what both the Constitution and the Industrial Peace Act have recognized, and guaranteed to the
employee, is the "right" to join associations of his choice, it would be absurd to say that the law also imposes, in the same
breath, upon the employee the duty to join associations. The law does not enjoin an employee to sign up with any
association.
The decision then of the Executive Labor Arbiter in merely directing the holding of a referendum "to determine the will of
the service engineers, sales representatives as to their inclusion or exclusion in (sic) the bargaining unit" is the most
appropriate procedure that conforms with their right to form, assist or join in labor union or organization. However, since
this decision was rendered before the effectivity of R.A. No. 6715, it must now be stressed that its future application to the
private parties in this case should, insofar as service engineers and sales representatives holding supervisory positions or
functions are concerned, take into account the present Article 245 20 of the Labor Code which, as amended by R.A.
No. 6715, now reads:
ARTICLE 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. —
Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be
eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own. (emphasis supplied)
The foregoing disquisitions render unnecessary a discussion on the second ground on the alleged grave abuse of
discretion on the part of the NLRC in not applying the "Globe Doctrine". Suffice it to state here that since the only issue is
the subject employees' inclusion in or exclusion from the bargaining unit in question, and PIDI never questioned the
decision of the Executive Labor Arbiter, the Globe Doctrine finds no application. Besides, this doctrine applies only in
instances of evenly balanced claims by competitive groups for the right to be established as the bargaining unit, 21
which do not obtain in this case.
24
WHEREFORE, the petition is hereby GRANTED. The Decision of public respondent National Labor Relations Commission in
Case No. NLRC-NCR-00-11-03936-87, promulgated on 16 January 1989, is hereby SET ASIDE while the Decision of the
Executive Labor Arbiter in said case dated 17 March 1988 is hereby REINSTATED, subject to the modifications above
indicated. Costs against private respondent.
SO ORDERED.
G.R. No. 110854 February 13, 1995
PIER 8 ARRASTRE & STEVEDORING SERVICES, INC., petitioner,
vs.
HON. MA. NIEVES ROLDAN-CONFESOR, in her capacity as Secretary of Labor and Employment, and GENERAL MARITIME
& STEVEDORES UNION (GMSU), respondents.
PUNO, J.:
Petitioner corporation and private respondent labor union entered into a three-year Collective Bargaining Agreement
(CBA) with expiry date on November 27, 1991. During the freedom period the National Federation of Labor Unions
(NAFLU) questioned the majority status of Private respondent through a petition for certification election. The election
conducted on February 27, 1992 was won by private respondent. On March 19, 1992, private respondent was certified
as the sole and exclusive bargaining agent of petitioner's rank-and-file employees.
On June 22, 1992, private respondent's CBA proposals were received by petitioner. Counter-proposals were made by
petitioner. Negotiations collapsed, and on August 24, 1992, private-respondent filed a Notice of Strike with the National
Conciliation and Mediation Board (NCMB). The NCMB tried but failed to settle the parties' controversy.
On September 30, 1992, public respondent Secretary of Labor assumed jurisdiction over the dispute. She resolved the
bargaining deadlock between the parties through an Order, dated March 4, 1993, which reads, in part:
xxx xxx xxx
A. The non-economic issues
1. Scope/coverage of the CBA. Article I of the 1988 CBA provides:
The Company recognizes the Union as the sole and exclusive collective bargaining representative of all the stevedores,
dockworkers, gang bosses, foremen, rank and file employees working at Pier 8, North Harbor and its offices and said
positions are [sic] listed in ANNEX "A" hereof.
25
As such representative the UNION is designated as the collective bargaining agent with respect to and concerning the
terms and conditions of employment and the interpretations and implementation of the provisions and conditions of this
Agreement.
Annex "A" of the CBA is the listing of positions covered thereby. These are:
1. Foremen;
2. Gang bosses;
3. Winchmen;
4. Signalmen;
5. Stevedores;
6. Dockworkers;
7. Tallymen;
8. Checkers;
9. Forklift and crane operators;
10. Sweepers;
11. Mechanics;
12. Utilitymen;
13. Carpenters; and
14. Other rank and file employees;
The company argues in the first instance that under Article 212(m) in relation to Article 245 of the Labor Code, supervisors
are ineligible for. membership in a labor organization of rank and file. Being supervisors, foremen should be excluded
from the bargaining unit.
The Company likewise seeks the exclusion on the ground of lack of community of interest and divergence in functions,
mode of compensation and working conditions of the following:
1. Accounting clerk;
2. Audit clerk;
3. Collector;
4. Payroll clerk;
5. Nurse;
6. Chief biller;
26
7. Biller;
8. Teller/biller;
9. Personnel clerk;
10. Timekeeper;
11. Asst. timekeeper;
12. Legal secretary;
13. Telephone operator;
14. Janitor/Utility; and
15. Clerk
These positions, the Company argues, cannot be lumped together with the stevedores or dockworkers who mostly
comprise the bargaining unit. Further, notwithstanding the check-off provisions of the CBA, the incumbents in these
positions have never paid union dues. Finally, some of them occupy confidential positions and therefore ought to be
excluded from the bargaining unit.
The Union generally argues that the Company's proposed exclusions retrogressive. . . .
We see no compelling justification to order the modification of Article I of the 1988 CBA as worded. For by lumping
together stevedores and other rank and file employees, the obvious intent of the parties was to treat all employees not
disqualified from union membership as members of one bargaining unit. This is regardless of working conditions, mode of
compensation, place of work, or other considerations. In the absence of mutual agreement of the parties or evidence
that the present compositions of the bargaining unit is detrimental to the individual and organizational rights either of the
employees or of the Company, this expressed intent cannot be set aside.
It may well be that as a consequence of Republic Act No. 6715, foremen are ineligible to join the union of the rank and
file. But this provision can be invoked only upon proof that the foremen sought to be excluded from the bargaining unit
are cloaked with effective recommendatory powers such as to qualify them under the legal definitions of supervisors.
xxx xxx xxx
7. Effectivity of the CBA. The Union demands that the CBA should be fully retroactive to 28 November 1991. The
Company is opposed on the ground that under Article 253-A of the labor code, the six-month period within which the
parties must come to an agreement so that the same will be automatically retroactive is long past.
The Union's demand for full retroactivity, we note, will result in undue financial burden to the Company. On the other
hand, the Company's reliance on Article 253-A is misplaced as this applies only to the renegotiated terms of an existing
CBA. Here, the deadlock arose from negotiations for a new CBA.
These considered, the CBA shall be effective from the time we assumed jurisdiction over the dispute, that is, on 22
September 1992, and shall remain e effective for five (5) years thereafter. It shall be understood that except for the
27
representation aspect all other provisions thereof shall be renegotiated not later than three (3) years after its effectivity,
consistently with Article 253-A of the Labor Code.
B. The economic issues
The comparative positions of the parties are:
COMPANY
UNION
xxx xxx xxx
5. Vacation and sick leave
17 days vacation and sick leave
i) For all covered employees
17 days sick leave per year
and 17 days sick than gang
for employment with at least
gang bosses:
five years of service.
15 working days vacation and
15 working days sick leave

28
for those with at least 1 year
of service
for those with more than one
year of service up to 5 years
of service
for those with more than 5
years of service up to 10
years of service
for those with more than 10
years of service
Provided that in the case

29
Provided that in the case of a
of a rotation worker, he
rotation worker, he must have
must have work for at
worked for 140 days in a
least 160 days in a year
calendar year as a condition
for availment
for availment.
Provided, further that in the
event a rotation worker fails
to complete 140 days work in
a calendar year, he shall still
be entitled to vacation and
sick leave with pay, as follows:
139 - 120 days worked: 90%

30
119 - 110 days worked: 50%
ii) For Gang bosses:
Same as the above schedule
except that:
1) the condition that a gang
bosses must have worked for at
least 120 days in a calendar
year shall be reduced to 110
days; and
2) where the above number of
days worked is not met, the
gang boss shall still be entitled
to vacation and sick leave with
pay, as follows:
109 - 90 days worked: 90%
89 - 75 days worked: 50%
xxx xxx xxx

31
7. Death aid
P1,500.00 to heirs
P10,000.00 to heirs of covered
of covered employees
employees
P5,000.00 assistance for death
of immediate member of
covered employee's family
xxx xxx xxx
12. Emergency loan
a) amount of
P700.00 but damage
30 days salary payable through
entitlement
to dwelling by fire shall
payroll deduction in twelve

32
be included
monthly installments
b) cash bond
None
The company shall put up a cash
for loss, damage
bond of not less than P40,000.00
or accident
for winchmen, crane and forklift
operators.
xxx xxx xxx
Balancing the right of the Company to remain viable and to just returns to its investments with right of the Union members
to just rewards for their labors, we find the following award to be fair and reasonable:
xxx xxx xxx
6. Vacation and Sick Leave
a) Non-rotation workers
17 days vacation/17 days sick leave

33
for those with at least 1 year of service
b) Rotation workers other
17 days vacation/17 days sick leave,
than gang boss
provided that the covered worker
must have worked for at least 155 days
in a calendar year
c) Gang bosses
17 days vacation/17 days sick leave,
provided that the gang boss must have
worked for at least 115 days in a
calendar year
xxx xxx xxx
8. Death aid P3,000.00 to the heirs of each covered employee
xxx xxx xxx
12. Emergency loan 30 days pay, payable through payroll deductions of 1/12 of monthly salary
34
WHEREFORE, the Pier 8 Arrastre and Stevedoring Services and the General Maritime Services Union are hereby ordered to
execute new collective bargaining agreement the incorporating the dispositions herein contained. These shall be in
addition to all other existing terms, conditions and benefits of employment, except those specifically deleted herein,
which have previously governed the relations of the parties. All other disputed items not specifically touched upon
herein are deemed denied, without prejudice to such other agreements as the parties may have reached in the
meantime. The collective bargaining agreement so executed shall be effective from 22 September 1992 and up to five
years thereafter, subject to renegotiation on the third year of its effectivity pursuant to Article 253-A of the Labor Code.1
Petitioner sought partial reconsideration of the Order. On June 8, 1993, public respondent affirmed her findings, except
for the date of effectivity of the Collective Bargaining Agreement which was changed to September 30, 1992. This is the
date when she assumed jurisdiction over the deadlock.
Petitioner now assails the Order as follows:
THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION IN NOT EXCLUDING CERTAIN
POSITIONS FROM THE BARGAINING AGREEMENT UNIT
II
THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION IN MAKING THE CBA EFFECTIVE ON
SEPTEMBER 30, 1992 WHEN SHE ASSUMED JURISDICTION OVER THE LABOR DISPUTE AND NOT MARCH 4, 1993 WHEN SHE
RENDERED JUDGMENT OVER THE DISPUTE
III
THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION IN REDUCING THE NUMBER OF DAYS
AN EMPLOYEE SHOULD ACTUALLY WORK TO BE ENTITLED TO VACATION AND SICK LEAVE BENEFITS
IV
THE HONORABLE SECRETARY OF LABOR COMMITTED GRAVE ABUSE OF DISCRETION IN INCREASING WITHOUT FACTUAL
BASIS THE DEATH AID AND EMERGENCY LOAN 2
The petition is partially meritorious.
Firstly, petitioner questions public respondent for not excluding four (4) foremen, a legal secretary, a timekeeper and an
assistant timekeeper from the bargaining unit composed of rank-and-file employees represented by private respondent.
35
Petitioner argues that: (1) the failure of private respondent to object when the foremen and legal secretary were
prohibited from voting in the certification election constitutes an admission that such employees hold
supervisory/confidential positions; and (2) the primary duty and responsibility of the timekeeper and assistant timekeeper
is "to enforce company rules and regulations by reporting to petitioner . . . those workers who committed infractions, such
as those caught abandoning their posts." and hence, they should not be considered as rank-and-file employees.
The applicable law governing the proper composition of bargaining unit is Article 245 of the labor Code, as amended,
which provides as follows:
Art. 245. Ineligibility of managerial employees to join any labor organization; employees to join any labor organization;
right of supervisory employees. — Managerial employees are not eligible to join, assist or form any labor organization.
Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but
may join, assist or form separate labor organizations of their own.
Article 212(m) of the same Code, as well as Book V, Rule 1, Section 1(o) of the Omnibus Rules Implementing the Labor
Code, as amended by the Rules and Regulations Implementing R.A.. 6715, differentiate managerial, supervisory, and
rank-and-file employees, thus:
"Managerial Employee" is one who is vested with powers or prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, layoff recall, discharge, assign or discipline employees. Supervisory employees are those
who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is
not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within
any of the above definitions are considered rank-and-file employees for purposes of the Book.
This Court has ruled on numerous occasions that the test of supervisory or managerial status is whether an employee
possesses authority to act in the interest of his employer which authority is not merely routinary or clerical in nature but
requires use of independent judgment. 3 What governs the determination of the nature of employment is not the
employee's title, but his job description. If the nature of the employee's job does not fall under the definition of
"managerial" or "supervisory" in the Labor Code, he is eligible to be a member of the rank-and-file bargaining unit. 4
Foremen are chief and often especially-trained workmen who work with and commonly are in charge of a group of
employees in an industrial plant or in construction work. 5 They are the persons designated by the employer-
management to direct the work of employees and to superintend and oversee them. 6 They are representatives of the
employer-management with authority over particular groups of workers, processes, operations, or sections of a plant or
an entire organization. In the modern industrial plant, they are at once a link in the chain of command and the bridge
between the management and labor. 7 In the performance their work, foremen definitely use their independent
judgment and are empowered to make recommendations for managerial action with respect to those employees
under their control. Foremen fall squarely under the category of supervisory employees, and cannot be part of rank-and-
file unions.
Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is basically routinary and clerical.
However, they should be differentiated from rank-and-file employees because they, are tasked with, among others, the
typing of legal documents, memoranda and correspondence, the keeping of records and files, the giving of and
receiving notices and such other duties as required by the legal personnel of the corporation. 8 Legal secretaries
therefore fall under the category of confidential employees. Thus, to them applies our holding in the case of Philips
Industrial Development, Inv., v. NLRC, 210 SCRA 339 (1992), that:
36
. . . By the very functions, they assist confidential capacity to, or have access to confidential. matters of, persons to,
exercise managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial
employees to form, assist or join a labor union equally applies to them.
In Bulletin Publishing Co., Inc., vs. Hon. Augusto Sanchez, this Court elaborated on this rationale, thus:
. . . The rationale, for this inhibition has been stated to be, because if these managerial employees would belong to or be
affiliated with Union the latter might not, be assured of their loyalty to the Union in view of evident conflict of interests.
The Union can also become company-dominated with the presence of managerial employees in Union membership.
In Golden Farms, Inc., vs. Ferrer-Calleja, 9 this court explicitly made this rationale applicable to confidential employees:
This rationale holds true also for confidential employees . . ., who having access to confidential information, may
become the source of undue advantage. Said employee(s) may act as a spy or spies of either party to a collective
bargaining agreement. . . .
We thus hold that public respondent acted with grave abuse of discretion in not excluding the four foremen and legal
secretary from the bargaining unit composed of rank-and-file employees.
As for the timekeeper and assistant timekeeper it is clear from petitioner's own pleadings that they are, neither
managerial nor supervisory employees. They are merely tasked to report those who commit infractions against company
rules and regulations. This reportorial function is routinary and clerical. They do not determine the fate of those who
violate company policy rules and regulations function. It follows that they cannot be excluded from the subject
bargaining unit.
The next issue is the date when the new CBA of the parties should be given effect. Public respondent fixed the effectivity
date on September 30, 1992. when she assumed jurisdiction over the dispute. Petitioner maintains it should be March 4.
1993, when public respondent rendered judgment over the dispute.
The applicable laws are Articles 253 and 253- A of the Labor Code, thus:
Art. 253. Duty to bargain collectively when there exists a collective bargaining agreement. — When there is a collective
bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify
such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the
agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo
and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period
and/or until a new agreement is reached by the parties.
and;
Art. 253-A. Terms of a collective bargaining agreement. — Any Collective Bargaining Agreement that the parties
may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition
questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election
37
shall be conducted by the Department of Labor and Employment outside the sixty-day period immediately before the
date of expiry of such five year term of the Collective Bargaining Agreement. All other provisions of the Collective
Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. Any agreement on such
other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of expiry of the
term of such other provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day immediately
following such date. If any such agreement is entered into beyond six months, the parties shall agree on the duration of
collective bargaining agreement, the parties may exercise their rights under this Code.
In Union of Filipino Employees v. NLRC, 192 SCRA 414 (1990), this court interpreted the above law as follows:
In light of the foregoing, this Court upholds the pronouncement of the NLRC holding the CBA to be signed by the parties
effective upon the promulgation of the assailed resolution. It is clear and explicit from Article 253-A that any agreement
on such other provisions of the CBA shall be given retroactive effect only when it is entered into within six (6) months from
its expiry date. If the agreement was entered into outside the six (6) month period, then the parties shall agree on the
duration of the retroactivity thereof.
The assailed resolution which incorporated the CBA to be signed by the parties was promulgated June 5, 1989, the expiry
date of the past CBA. Based on the provision of Section 253-A, its retroactivity should be agreed upon. by the parties. But
since no agreement to that effect was made, public respondent did not abuse its discretion in giving the said CBA a
prospective effect. The action of the public respondent is within the ambit of its authority vested by existing law.
In the case of Lopez Sugar Corporation v. Federation of Free Workers, 189 SCRA 179 (1991), this Court reiterated the rule
that although a CBA has expired, it continues to have legal effects as between the parties until a new CBA has been
entered into. It is the duty of both parties to the to keep the status quo, and to continue in full force and effect the terms
and conditions of the existing agreement during the 60-day freedom period and/or until a new agreement is reached
by the parties. 10 Applied to the case at bench, the legal effects of the immediate past CBA between petitioner and
private respondent terminated, and the effectivity of the new CBA began, only on March 4, 1993 when public
respondent resolved their dispute.
Finally, we find no need to discuss at length the merits of the third and fourth assignments of error. The questioned Order
relevantly states:
In the resolution of the economic issues, the Company urges us to consider among others, present costs of living, its
financial capacity, the present wages being paid by the other cargo handlers at the North Harbor, and the fact that the
present average wage of its workers is P127.75 a day, which is higher than the statutory minimum wage of P118.00 a day.
The Company's evidence, consisting of its financial statements for the past three years, shows that its net income was
P743,423.45 for 1989, P2,108,569.03 for 1990, and P1,479,671.84 for 1991, or an average of P1,443,885.10 over the three-
year period. It argues that for just the first year of effectivity of the CBA, the Company's proposals on wages, effect
thereof on overtime, 13th month pay, and vacation and sick leave commutation, will cost about P520,723,44, or 35.19%
of its net income for 1991. The Company likewise urges us to consider the multiplier effect of its proposals on the second
and third years of the CBA. As additional argument, the Company manifests that a portion of its pier will undergo a six-
month to one-year renovation starting January 1993.
On the other hand, the Union's main line of argument — that is, aside from being within the financial capacity of the
Company to grant, its demands are fair and reasonable — is not supported by evidence controverting the Company's
own presentation of its financial capacity. The Union in fact uses statements of the Company for 1989-1991, although it
interprets these data as sufficient justification for its own proposals. It also draws our attention to the bargaining history of
the parties, particularly the 1988 negotiations during which the company was able to grant wage increases despite
operational losses.
38
Balancing the right of the Company to remain viable and to just returns to its investments with right of the Union members
to just
rewards for their labors, we find the following award to be fair and reasonable . . . . 11
It is evident that the above portion of the impugned Order is based on well-studied evidence. The conclusions reached
by public respondent in the discharge of her statutory duty as compulsory arbitrator, demand the high respect of this
Court. The study and settlement of these disputes fall within public respondent's distinct administrative expertise. She is
especially trained for this delicate task, and she has within her cognizance such data and information as will assist her in
striking the equitable balance between the needs of management, labor and the public. Unless there is clear showing of
grave abuse of discretion, this Court cannot and will not interfere with the labor expertise of public respondent Secretary
of Labor.
IN VIEW WHEREOF, public respondents Order, dated March 4, 1993, and Resolution, dated June 8, 1993, are hereby
MODIFIED to exclude foremen and legal secretaries from the rank-and-file bargaining unit represented by private
respondent union, and to fix the date of effectivity of the five-year collective bargaining agreement between petitioner
corporation and private respondent union on March 4, 1993. No costs.
SO ORDERED.
[G.R. No. 108855. February 28, 1996]
METROLAB INDUSTRIES, INC., petitioner, vs. HONORABLE MA. NIEVES ROLDAN-CONFESOR, in her capacity as Secretary of
the Department of Labor and Employment and METRO DRUG CORPORATION EMPLOYEES ASSOCIATION-FEDERATION OF
FREE WORKERS, respondents.
LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; EXERCISE OF MANAGEMENT PREROGATIVES; NOT
ABSOLUTE; SUBJECT TO EXCEPTIONS IMPOSED BY LAW. - This Court recognizes the exercise of management prerogatives
and often declines to interfere with the legitimate business decisions of the employer. However, this privilege is not
absolute but subject to limitations imposed by law. In PAL vs. NLRC, (225 SCRA 301 [1993]), we issued this reminder: ... the
exercise of management prerogatives was never considered boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]), it
was held that managements prerogatives must be without abuse of discretion ...All this points to the conclusion that the
exercise of managerial prerogatives is not unlimited. It is circumscribed by limi(ations found in law, a collective
bargaining agreement, or the general principles of fair play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758
[1990]).
3. ID.; ID.; ID.; ID.; ID.; CASE AT BAR AN EXCEPTION. - The case at bench constitutes one of the exceptions. The Secretary
of Labor is expressly given the power under the Labor Code to assume jurisdiction and resolve labor disputes involving
industries indispensable to national interest. The disputed injunction is subsumed under this special grant of authority. Art.
263 (g) of the Labor Code specifically provides that: x x x (g) When, in his opinion, there exists a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for
compulsory arbitration. Such assumption or certification shall have the effect of automatically enjoining the intended or
impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the
time of assumption or certification, all striking or locked out employees shall immediately return to work and the
employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing
before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law
enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce
the same. . . . That Metrolabs business is of national interest is not disputed. Metrolab is one of the leading manufacturers
and suppliers of medical and pharmaceutical products to the country. Metrolabs management prerogatives, therefore,
are not being unjustly curtailed but duly balanced with and tempered by the limitations set by law, taking into account
its special character and the particular circumstances in the case at bench.
39
4. ID.; LABOR RELATIONS; INELIGIBILITY OF MANAGERIAL EMPLOYEES TO JOIN, FORM AND ASSIST ANY LABOR
ORGANIZATION; PROHIBITION EXTENDED TO CONFIDENTIAL EMPLOYEES. - Although Article 245 of the Labor Code limits
the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this
prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or
act in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly confidential
records.
5. ID.; ID.; EXCLUSION OF CONFIDENTIAL EMPLOYEES FROM THE RANK AND FILE BARGAINING UNIT; NOT TANTAMOUNT TO
DISCRIMINATION. - Confidential employees cannot be classified as rank and file. As previously discussed, the nature of
employment of confidential employees is quite distinct from the rank and file, thus, warranting a separate category.
Excluding confidential employees from the rank and file bargaining unit, therefore, is not tantamount to discrimination.
This is a petition for certiorari under Rule 65 of the Revised Rules of Court seeking the annulment of the Resolution and
Omnibus Resolution of the Secretary of Labor and Employment dated 14 April 1992 and 25 January 1993, respectively, in
OS-AJ-04491-11 (NCMB-NCR-NS-08-595-9 1; NCMB-NCR-NS-09-678-91) on grounds that these were issued with grave
abuse of discretion and in excess of jurisdiction.
Private respondent Metro Drug Corporation Employees Association-Federation of Free Workers (hereinafter referred to as
the Union) is a labor organization representing the rank and file employees of petitioner Metrolab Industries, Inc.
(hereinafter referred to as Metrolab/MII) and also of Metro Drug, Inc.
On 31 December 1990, the Collective Bargaining Agreement (CBA) between Metrolab and the Union expired. The
negotiations for a new CBA, however, ended in a deadlock.
Consequently, on 23 August 1991, the Union filed a notice of strike against Metrolab and Metro Drug Inc. The parties
failed to settle their dispute despite the conciliation efforts of the National Conciliation and Mediation Board.
To contain the escalating dispute, the then Secretary of Labor and Employment, Ruben D. Torres, issued an assumption
order dated 20 September 1991, the dispositive portion of which reads, thus:
WHEREFORE, PREMISES CONSIDERED, and pursuant to Article 263 (g) of the Labor Code, as amended, this Office hereby
assumes jurisdiction over the entire labor dispute at Metro Drug, Inc. - Metro Drug Distribution Division and Metrolab
Industries Inc.
Accordingly, any strike or lockout is hereby strictly enjoined. The Companies and the Metro Drug Corp. Employees
Association - FFW are likewise directed to cease and desist from committing any and all acts that might exacerbate the
situation.
Finally, the parties are directed to submit their position papers and evidence on the aforequoted deadlocked issues to
this office within twenty (20) days from receipt hereof.
SO ORDERED.[1] (Italics ours.)
On 27 December 1991, then Labor Secretary Torres issued an order resolving all the disputed items in the CBA and
ordered the parties involved to execute a new CBA.
40
Thereafter, the Union filed a motion for reconsideration.
On 27 January 1992, during the pendency of the abovementioned motion for reconsideration, Metrolab laid off 94 of its
rank and file employees.
On the same date, the Union filed a motion for a cease and desist order to enjoin Metrolab from implementing the mass
layoff, alleging that such act violated the prohibition against committing acts that would exacerbate the dispute as
specifically directed in the assumption order.[2]
On the other hand, Metrolab contended that the layoff was temporary and in the exercise of its management
prerogative. It maintained that the company would suffer a yearly gross revenue loss of approximately sixty-six (66)
million pesos due to the withdrawal of its principals in the Toll and Contract Manufacturing Department. Metrolab further
asserted that with the automation of the manufacture of its product Eskinol, the number of workers required its
production is significantly reduced.[3]
Thereafter, on various dates, Metrolab recalled some of the laid off workers on a temporary basis due to availability of
work in the production lines.
On 14 April 1992, Acting Labor Secretary Nieves Confesor issued a resolution declaring the layoff of Metrolabs 94 rank
and file workers illegal and ordered their reinstatement with full backwages. The dispositive portion reads as follows:
WHEREFORE, the Unions motion for reconsideration is granted in part, and our order of 28 December 1991 is affirmed
subject to the modifications in allowances and in the close shop provision. The layoff of the 94 employees at MII is hereby
declared illegal for the failure of the latter to comply with our injunction against committing any act which may
exacerbate the dispute and with the 30-day notice requirement. Accordingly, MII is hereby ordered to reinstate the 94
employees, except those who have already been recalled, to their former positions or substantially equivalent, positions
with full backwages from the date they were illegally laid off on 27 January 1992 until actually reinstated without loss of
seniority rights and other benefits. Issues relative to the CBA agreed upon by the parties and not embodied in our earlier
order are hereby ordered adopted for incorporation in the CBA. Further, the dispositions and directives contained in all
previous orders and resolutions relative to the instant dispute, insofar as not inconsistent herein, are reiterated. Finally, the
parties are enjoined to cease and desist from committing any act which may tend to circumvent this resolution.
SO RESOLVED.[4]
On 6 March 1992, Metrolab filed a Partial Motion for Reconsideration alleging that the layoff did not aggravate the
dispute since no untoward incident occurred as a result thereof. It, likewise, filed a motion for clarification regarding the
constitution of the bargaining unit covered by the CBA.
On 29 June 1992, after exhaustive negotiations, the parties entered into a new CBA. The execution, however, was
without prejudice to the outcome of the issues raised in the reconsideration and clarification motions submitted for
decision to the Secretary of Labor.[5]
41
Pending the resolution of the aforestated motions, on 2 October 1992, Metrolab laid off 73 of its employees on grounds
of redundancy due to lack of work which the Union again promptly opposed on 5 October 1992.
On 15 October 1992, Labor Secretary Confesor again issued a cease and desist order. Metrolab moved for a
reconsideration.[6]
On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus Resolution containing the following orders:
xxx xxx xxx.
1. MIIs motion for partial reconsideration of our 14 April 1992 resolution specifically that portion thereof assailing our ruling
that the layoff of the 94 employees is illegal, is hereby denied. MII is hereby ordered to pay such employees their full
backwages computed from the time of actual layoff to the time of actual recall;
2. For the parties to incorporate in their respective collective bargaining agreements the clarifications herein contained;
and
3. MIIs motion for reconsideration with respect to the consequences of the second wave of layoff affecting 73
employees, to the extent of assailing our ruling that such layoff tended to exacerbate the dispute, is hereby denied. But
inasmuch as the legality of the layoff was not submitted for our resolution and no evidence had been adduced upon
which a categorical finding thereon can be based, the same is hereby referred to the NLRC for its appropriate action.
Finally, all prohibitory injunctions issued as a result of our assumption of jurisdiction over this dispute are hereby lifted.
SO RESOLVED.[7]
Labor Secretary Confesor also ruled that executive secretaries are excluded from the closed-shop provision of the CBA,
not from the bargaining unit.
On 4 February 1993, the Union filed a motion for execution. Metrolab opposed. Hence, the present petition for certiorari
with application for issuance of a Temporary Restraining Order.
On 4 March 1993, we issued a Temporary Restraining Order enjoining the Secretary of Labor from enforcing and
implementing the assailed Resolution and Omnibus Resolution dated 14 April 1992 and 25 January 1993, respectively.
In its petition, Metrolab assigns the following errors:
A
42
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT COMMITTED GRAVE ABUSE OF DISCRETION AND
EXCEEDED HER JURISDICTION IN DECLARING THE TEMPORARY LAYOFF ILLEGAL AND ORDERING THE REINSTATEMENT AND
PAYMENT OF BACKWAGES TO THE AFFECTED EMPLOYEES.*
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT GRAVELY ABUSED HER DISCRETION IN
INCLUDING EXECUTIVE SECRETARIES AS PART OF THE BARGAINING UNIT OF RANK AND FILE EMPLOYEES.[8]
Anent the first issue, we are asked to determine whether or not public respondent Labor Secretary committed grave
abuse of discretion and exceeded her jurisdiction in declaring the subject layoffs instituted by Metrolab illegal on
grounds that these unilateral actions aggravated the conflict between Metrolab and the Union who were, then, locked
in a stalemate in CBA negotiations.
Metrolab argues that the Labor Secretarys order enjoining the parties from committing any act that might exacerbate
the dispute is overly broad, sweeping and vague and should not be used to curtail the employers right to manage his
business and ensure its viability.
We cannot give credence to Metrolabs contention.
This Court recognizes the exercise of management prerogatives and often declines to interfere with the legitimate
business decisions of the employer. However, this privilege is not absolute but subject to limitations imposed by law.[9]
In PAL v. NLRC,[10] we issued this reminder:
xxx xxx xxx
. . .the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs. Medina ( 177 SCRA 565
[1989]), it was held that managements prerogatives must be without abuse of discretion....
xxx xxx xxx
All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed by
limitations found in law, a collective bargaining agreement, or the general principles of fair play and justice (University of
Sto. Tomas v. NLRC, 190 SCRA 758 [1990]). . . . (Italics ours.)
xxx xxx xxx.

43
The case at bench constitutes one of the exceptions. The Secretary of Labor is expressly given the power under the
Labor Code to assume jurisdiction and resolve labor disputes involving industries indispensable to national interest. The
disputed injunction is subsumed under this special grant of authority. Art. 263 (g) of the Labor Code specifically provides
that:
xxx xxx xxx
(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute
and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification shall
have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or
certification order. If one has already taken place at the time of assumption or certification, all striking or locked out
employees shall immediately return to work and the employer shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and
Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this
provision as well as with such orders as he may issue to enforce the same. . . (Italics ours.)
xxx xxx xxx.
That Metrolabs business is of national interest is not disputed. Metrolab is one of the leading manufacturers and suppliers
of medical and pharmaceutical products to the country.
Metro labs management prerogatives, therefore, are not being unjustly curtailed but duly balanced with and tempered
by the limitations set by law, taking into account its special character and the particular circumstances in the case at
bench.
As aptly declared by public respondent Secretary of Labor in its assailed resolution:
xxx xxx xxx.
MII is right to the extent that as a rule, we may not interfere with the legitimate exercise of management prerogatives
such as layoffs. But it may nevertheless be appropriate to mention here that one of the substantive evils which Article 263
(g) of the Labor Code seeks to curb is the exacerbation of a labor dispute to the further detriment of the national
interest. When a labor dispute has in fact occurred and a general injunction has been issued restraining the commission
of disruptive acts, management prerogatives must always be exercised consistently with the statutory objective.[11]
xxx xxx xxx.
Metrolab insists that the subject layoffs did not exacerbate their dispute with the Union since no untoward incident
occurred after the layoffs were implemented. There were no work disruptions or stoppages and no mass actions were
threatened or undertaken. Instead, petitioner asserts, the affected employees calmly accepted their fate as this was a
matter which they had been previously advised would be inevitable.[12]
44
After a judicious review of the record, we find no compelling reason to overturn the findings of the Secretary of Labor.
We reaffirm the doctrine that considering their expertise in their respective fields, factual findings of administrative
agencies supported by substantial evidence are accorded great respect and binds this Court.[13]
The Secretary of Labor ruled, thus:
xxx xxx xxx.
Any act committed during the pendency of the dispute that tends to give rise to further contentious issues or increase
the tensions between the parties should be considered an act of exacerbation. One must look at the act itself, not on
speculative reactions. A misplaced recourse is not needed to prove that a dispute has been exacerbated. For instance,
the Union could not be expected to file another notice of strike. For this would depart from its theory of the case that the
layoff is subsumed under the instant dispute, for which a notice of strike had already been filed. On the other hand, to
expect violent reactions, unruly behavior, and any other chaotic or drastic action from the Union is to expect it to
commit acts disruptive of public order or acts that may be illegal. Under a regime of laws, legal remedies take the place
of violent ones.[14]
xxx xxx xxx.
Protest against the subject layoffs need not be in the form of violent action or any other drastic measure. In the instant
case the Union registered their dissent by swiftly filing a motion for a cease and desist order. Contrary to petitioners
allegations, the Union strongly condemned the layoffs and threatened mass action if the Secretary of Labor fails to
timely intervene:
xxx xxx xxx.
3. This unilateral action of management is a blatant violation of the injunction of this Office against committing acts
which would exacerbate the dispute. Unless such act is enjoined the Union will be compelled to resort to its legal right to
mass actions and concerted activities to protest and stop the said management action. This mass layoff is clearly one
which would result in a very serious labor dispute unless this Office swiftly intervenes.[15]
xxx xxx xxx.
Metrolab and the Union were still in the process of resolving their CBA deadlock when petitioner implemented the
subject layoffs. As a result, motions and oppositions were filed diverting the parties attention, delaying resolution of the
bargaining deadlock and postponing the signing of their new CBA, thereby aggravating the whole conflict.
We, likewise, find untenable Metrolabs contention that the layoff of the 94 rank-and-file employees was temporary,
despite the recall of some of the laid off workers.
45
If Metrolab intended the layoff of the 94 workers to be temporary, it should have plainly stated so in the notices it sent to
the affected employees and the Department of Labor and Employment. Consider the tenor of the pertinent portions of
the layoff notice to the affected employees:
xxx xxx xxx.
Dahil sa mga bagay na ito, napilitan ang ating kumpanya na magsagawa ng lay-off ng mga empleyado sa Rank & File
dahil nabawasan ang trabaho at puwesto para sa kanila. Marami sa atin ang kasama sa lay-off dahil wala nang
trabaho para sa kanila. Mahirap tanggapin ang mga bagay na ito subalit kailangan nating gawin dahil hindi kaya ng
kumpanya ang magbayad ng suweldo kung ang empleyado ay walang trabaho. Kung tayo ay patuloy na
magbabayad ng suweldo, mas hihina ang ating kumpanya at mas marami ang maaring maapektuhan.
Sa pagpapatupad ng lay-off susundin natin ang LAST IN-FIRST OUT policy. Ang mga empleyadong may pinakamaikling
serbisyo sa kumpanya ang unang maaapektuhan. Ito ay batay na rin sa nakasaad sa ating CBA na ang mga huling
pumasok sa kumpanya ang unang masasama sa lay-off kapag nagkaroon ng ganitong mga kalagayan.
Ang mga empleyado na kasama sa lay-off ay nakalista sa sulat na ito. Ang umpisa ng lay-off ay sa Lunes, Enero 27.
Hindi na muna sila papasok sa kumpanya. Makukuha nila ang suweldo nila sa Enero 30, 1992.
Hindi po natin matitiyak kung gaano katagal ang lay-off ngunit ang aming tingin ay matatagalan bago magkaroon ng
dagdag na trabaho. Dahil dito, sinimulan na namin ang isang Redundancy Program sa mga supervisors. Nabawasan
ang mga puwesto para sa kanila, kaya sila ay mawawalan ng trabaho at bibigyan na ng redundancy pay.[16] (Italics
ours.)
xxx xxx xxx.
We agree with the ruling of the Secretary of Labor, thus:
xxx xxx xxx.
. . .MII insists that the layoff in question is temporary not permanent. It then cites International Hardware, Inc. vs. NLRC, 176
SCRA 256, in which the Supreme Court held that the 30-day notice required under Article 283 of the Labor Code need
not be complied with if the employer has no intention to permanently severe (sic) the employment relationship.
We are not convinced by this argument. International Hardware involves a case where there had been a reduction of
workload. Precisely to avoid laying off the employees, the employer therein opted to give them work on a rotating basis.
Though on a limited scale, work was available. This was the Supreme Courts basis for holding that there was no intention
to permanently severe (sic) the employment relationship.
Here, there is no circumstance at all from which we can infer an intention from MII not to sever the employment
relationship permanently. If there was such an intention, MII could have made it very clear in the notices of layoff. But as
it were, the notices are couched in a language so uncertain that the only conclusion possible is the permanent
termination, not the continuation, of the employment relationship.
46
MII also seeks to excuse itself from compliance with the 30-day notice with a tautology. While insisting that there is really
no best time to announce a bad news, (sic) it also claims that it broke the bad news only on 27 January 1992 because
had it complied with the 30-day notice, it could have broken the bad news on 02 January 1992, the first working day of
the year. If there is really no best time to announce a bad news (sic), it wouldnt have mattered if the same was
announced at the first working day of the year. That way, MII could have at least complied with the requirement of the
law.[17]
The second issue raised by petitioner merits our consideration.
In the assailed Omnibus Resolution, Labor Secretary Confesor clarified the CBA provisions on closed-shop and the scope
of the bargaining unit in this wise:
xxx xxx xxx.
Appropriateness of the bargaining unit.
xxx xxx xxx.
Exclusions. In our 14 April 1992 resolution, we ruled on the issue of exclusion as follows:
These aside, we reconsider our denial of the modifications which the Union proposes to introduce on the close shop
provision. While we note that the provision as presently worded has served the relationship of the parties well under
previous CBAs, the shift in constitutional policy toward expanding the right of all workers to self-organization should now
be formally recognized by the parties, subject to the following exclusions only:
1. Managerial employees; and
2. The executive secretaries of the President, Executive Vice-President, Vice-President, Vice President for Sales, Personnel
Manager, and Director for Corporate Planning who may have access to vital labor relations information or who may
otherwise act in a confidential capacity to persons who determine or formulate management policies.
The provisions of Article I (b) and Attachment I of the 1988-1990 CBA shall thus be modified consistently with the
foregoing.
Article I (b) of the 1988-1990 CBA provides:
b)Close Shop. - All Qualified Employees must join the Association immediately upon regularization as a condition for
continued employment. This provision shall not apply to: (i) managerial employees who are excluded from the scope of
the bargaining unit; (ii) the auditors and executive secretaries of senior executive officers, such as, the President,
47
Executive Vice-President, Vice-President for Finance, Head of Legal, Vice-President for Sales, who are excluded from
membership in the Association; and (iii) those employees who are referred to in Attachment I hereof, subject, however,
to the application of the provision of Article II, par. (b) hereof.
Consequently, the above-specified employees are not required to join the Association as a condition for their continued
employment.
On the other hand, Attachment I provides:
Exclusion from the Scope of the Close Shop Provision
The following positions in the Bargaining Unit are not covered by the Close Shop provision of the CBA (Article I, par. b):
1. Executive Secretaries of Vice-Presidents, or equivalent positions.
2. Executive Secretary of the Personnel Manager, or equivalent positions.
3. Executive Secretary of the Director for Corporate Planning, or equivalent positions.
4. Some personnel in the Personnel Department, EDP Staff at Head Office, Payroll Staff at Head Office, Accounting
Department at Head Office, and Budget Staff, who because of the nature of their duties and responsibilities need not
join the Association as a condition for their employment.
5. Newly-hired secretaries of Branch Managers and Regional Managers.
Both MDD and MII read the exclusion of managerial employees and executive secretaries in our 14 April 1992 resolution
as exclusion from the bargaining unit. They point out that managerial employees are lumped under one classification
with executive secretaries, so that since the former are excluded from the bargaining unit, so must the latter be likewise
excluded.
This reading is obviously contrary to the intent of our 14 April 1992 resolution. By recognizing the expanded scope of the
right to self-organization, our intent was to delimit the types of employees excluded from the close shop provision, not
from the bargaining unit, to executive secretaries only. Otherwise, the conversion of the exclusionary provision to one
that refers to the bargaining unit from one that merely refers to the close shop provision would effectively curtail all the
organizational rights of executive secretaries.
The exclusion of managerial employees, in accordance with law, must therefore still carry the qualifying phrase from the
bargaining unit in Article I (b)(i) of the 1988-1990 CBA. In the same manner, the exclusion of executive secretaries should
be read together with the qualifying phrase are excluded from membership in the Association of the same Article and
with the heading of Attachment I. The latter refers to Exclusions from Scope of Close Shop Provision and provides that
[t]he following positions in Bargaining Unit are not covered by the close shop provision of the CBA.
48
The issue of exclusion has different dimension in the case of MII. In an earlier motion for clarification, MII points out that it
has done away with the positions of Executive Vice-President, Vice-President for Sales, and Director for Corporate
Planning. Thus, the foregoing group of exclusions is no longer appropriate in its present organizational structure.
Nevertheless, there remain MII officer positions for which there may be executive secretaries. These include the General
Manager and members of the Management Committee, specifically i) the Quality Assurance Manager; ii) the Product
Development Manager; iii) the Finance Director; iv) the Management System Manager; v) the Human Resources
Manager; vi) the Marketing Director; vii) the Engineering Manager; viii) the Materials Manager; and ix) the Production
Manager.
xxx xxx xxx
The basis for the questioned exclusions, it should be noted, is no other than the previous CBA between MII and the Union.
If MII had undergone an organizational restructuring since then, this is a fact to which we have never been made privy.
In any event, had this been otherwise the result would have been the same. To repeat, we limited the exclusions to
recognize the expanded scope of the right to self-organization as embodied in the Constitution.[18]
Metrolab, however, maintains that executive secretaries of the General Manager and the executive secretaries of the
Quality Assurance Manager, Product Development Manager, Finance Director, Management System Manager, Human
Resources Manager, Marketing Director, Engineering Manager, Materials Manager and Production Manager, who are
all members of the companys Management Committee should not only be exempted from the closed-shop provision
but should be excluded from membership in the bargaining unit of the rank and file employees as well on grounds that
their executive secretaries are confidential employees, having access to vital labor information.[19]
We concur with Metrolab.
Although Article 245 of the Labor Code[20] limits the ineligibility to join, form and assist any labor organization to
managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of
their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence,
are likewise privy to sensitive and highly confidential records.
The rationale behind the exclusion of confidential employees from the bargaining unit of the rank and file employees
and their disqualification to join any labor organization was succinctly discussed in Philips Industrial Development v.
NLRC:[21]
xxx xxx xxx.
On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave abuse of discretion in
reversing the decision of the Executive Labor Arbiter and in decreeing that PIDIs Service Engineers, Sales Force, division
secretaries, all Staff of General Management, Personnel and Industrial Relations Department, Secretaries of Audit, EDP
and Financial Systems are included within the rank and file bargaining unit.
In the first place, all these employees, with the exception of the service engineers and the sales force personnel, are
confidential employees. Their classification as such is not seriously disputed by PEO-FFW; the five (5) previous CBAs
between PIDI and PEO-FFW explicitly considered them as confidential employees. By the very nature of their functions,
they assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise
managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial employees
to form, assist or join a labor union equally applies to them.
49
In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this Court elaborated on this rationale, thus:
x x x The rationale for this inhibition has been stated to be, because if these managerial employees would belong to or
be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of
interests. The Union can also become company-dominated with the presence of managerial employees in Union
membership.
In Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale applicable to confidential employees:
act as a spy or spies of either party to a collective bargaining agreement. This is specially true in the present case where
Bargaining Agreement wherein this kind of employees by the nature of their functions/positions are expressly excluded.
xxx xxx xxx.
Similarly, in National Association of Trade Union - Republic Planters Bank Supervisors Chapter v. Torres[22] we declared:
xxx xxx xxx.
. . . As regards the other claim of respondent Bank that Branch Managers/OICs, Cashiers and Controllers are confidential
employees, having control, custody and/ or access to confidential matters, e.g., the branchs cash position, statements
of financial condition, vault combination, cash codes for telegraphic transfers, demand drafts and other negotiable
instruments, pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody, this claim is not even disputed
by petitioner. A confidential employee is one entrusted with confidence on delicate matters, or with the custody,
handling, or care and protection of the employers property. While Art. 245 of the Labor Code singles out managerial
employees as ineligible to join, assist or form any labor organization, under the doctrine of necessary, implication,
confidential employees are similarly disqualified. . . .
xxx xxx xxx.
. . .(I)n the collective bargaining process, managerial employees are supposed to be on the side of the employer, to act
as its representatives, and to see to it that its interest are well protected. The employer is not assured of such protection if
these employees themselves are union members. Collective bargaining in such a situation can become one-sided. It is
the same reason that impelled this Court to consider the position of confidential employees as included in the
disqualification found in Art. 245 as if the disqualification of confidential employees were written in the provision. If
confidential employees could unionize in order to bargain for advantages for themselves, then they could be governed
by their own motives rather than the interest of the employers. Moreover, unionization of confidential employees for the
purpose of collective bargaining would mean the extension of the law to persons or individuals who are supposed to act
in the interest of the employers. It is not farfetched that in the course of collective bargaining, they might jeopardize that
interest which they are duty-bound to protect. . . .
50
xxx xxx xxx.
And in the latest case of Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confesor,[23] we ruled that:
xxx xxx xxx.
Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is basically routinary and clerical.
However, they should be differentiated from rank-and-file employees because they are tasked with, among others, the
typing of legal documents, memoranda and correspondence, the keeping of records and files, the giving of and
receiving notices, and such other duties as required by the legal personnel of the corporation. Legal secretaries
therefore fall under the category of confidential employees. . . .
xxx xxx xxx.
We thus hold that public respondent acted with grave abuse of discretion in not excluding the four foremen and legal
secretary from the bargaining unit composed of rank-and-file employees.
xxx xxx xxx.
In the case at bench, the Union does not disagree with petitioner that the executive secretaries are confidential
employees. It however, makes the following contentions:
xxx xxx xxx.
There would be no danger of company domination of the Union since the confidential employees would not be
members of and would not participate in the decision making processes of the Union.
Neither would there be a danger of espionage since the confidential employees would not have any conflict of interest,
not being members of the Union. In any case, there is always the danger that any employee would leak management
secrets to the Union out of sympathy for his fellow rank and filer even if he were not a member of the union nor the
bargaining unit.
Confidential employees are rank and file employees and they, like all the other rank and file employees, should be
granted the benefits of the Collective Bargaining Agreement. There is no valid basis for discriminating against them. The
mandate of the Constitution and the Labor Code, primarily of protection to Labor, compels such conclusion.[24]
xxx xxx xxx.

51
The Unions assurances fail to convince. The dangers sought to be prevented, particularly the threat of conflict of interest
and espionage, are not eliminated by non-membership of Metrolabs executive secretaries or confidential employees in
the Union. Forming part of the bargaining unit, the executive secretaries stand to benefit from any agreement executed
between the Union and Metrolab. Such a scenario, thus, gives rise to a potential conflict between personal interests and
their duty as confidential employees to act for and in behalf of Metrolab. They do not have to be union members to
affect or influence either side.
Finally, confidential employees cannot be classified as rank and file. As previously discussed, the nature of employment
of confidential employees is quite distinct from the rank and file, thus, warranting a separate category. Excluding
confidential employees from the rank and file bargaining unit, therefore, is not tantamount to discrimination.
WHEREFORE, premises considered, the petition is partially GRANTED. The resolutions of public respondent Secretary of
Labor dated 14 April 1992 and 25 January 1993 are hereby MODIFIED to the extent that executive secretaries of
petitioner Metrolabs General Manager and the executive secretaries of the members of its Management Committee
are excluded from the bargaining unit of petitioners rank and file employees.
SO ORDERED.
G.R. No. 80882 April 24, 1989
SOUTHERN PHILIPPINES FEDERATION OF LABOR (SPFL), petitioner,
vs.
HONORABLE PURA FERRER CALLEJA, Director, Bureau of Labor Relations, Department of Labor and Employment, public
respondent. MINDANAO MINERS EMPLOYEE UNION SANDIGAN NG MANGGAGAWANG PILIPINO (SANDIGAN), forced
intervenor-private respondent. APEX MINING COMPANY, INC., employer-private respondent.
Proculo P. Fuentes, Jr. for petitioner.
Valeriano F. Pasquil and Ruben V. Abarquez for respondent Apex Mining Co., Inc.
Raul C. Nengasca and Antonio G. Jolejole for respondent Sandigan.
GUTIERREZ, JR., J.:
This petition for certiorari seeks to annul and set aside the Order issued by public respondent Director Pura Ferrer Calleja
of the Bureau of Labor Relations dated June 23, 1987 which certified the respondent union, Mindanao Miners Employees
Union-Sandigan ng Manggagawang Pilipino (MMEU-Sandigan), as the sole and exclusive bargaining representative of
the rank-and-file employees of respondent Apex Mining Company (Apex) after the said public respondent denied the
motion of herein petitioner to exclude one hundred ninety-seven (197) employees from voting in the certification
election. The denial is based on the ground that they are rank-and-file employees.
52
As summarized by the Solicitor General in his Comment, the facts are as follows:
On December 29, 1986, petitioner Southern Philippines Federation of Labor filed a petition for certification election
among the rank-and-file employees of private respondent Apex Mining Company, Incorporated with the Department of
Labor in Region XI, Davao City.
On February 6, 1987, Med-Arbiter Conrado 0. Macasa, Sr. issued an Order calling for the holding of the certification
election on February 23, 1987 among the rank-and-file employees of APEX with the following choices:
l. Southern Philippines Federation of Labor (SPFL)
2. Mindanao Miners Employees Union-Sandigan ng Manggagawang Pilipino (MMEU-Sandigan) and
3. No union.
On February 9, 1987, a pre-election conference was conducted among the petitioner Union; private respondent Union,
MMEU-Sandigan; and APEX to settle details in the conduct of the election such as the venue of the election and the list
of employees qualified to vote in the election.
During the pre-election conference, the parties agreed to delete from the list of workers prepared and submitted by
APEX numbering One Thousand Seven Hundred Sixteen (1,716), the names of nineteen (1 9) managerial employees and
seventy-three probationary employees who were statutorily disqualified from voting. Petitioner Union objected to the
inclusion in said list of the following: (1) employees occupying the positions of Supervisor I, II, and III; (2) employees under
confidential/special payrolls; and (3) employees who were not paying Union dues. The petitioner Union contends that
the aforementioned employees were disqualified from participating in the certification election since the Supervisors
were managerial employees while the last two were disqualified by virtue of their non-membership in the Union and their
exclusion from the benefits of the collective bargaining agreement.
In view of the lack of agreement among the parties on the list of qualified voters, Med-Arbiter Macasa issued an Order
on February 20, 1987, the dispositive portion of which reads:
"Wherefore, premises considered it is hereby declared that the following groups of workers be not included in the list of
employees qualified to vote in the consent election on February 23, 1987, as follows:
1 Nineteen (19) managerial employees;
2 Seventy-three (73) probationary employees; and
3 Nineteen (19) Supervisors 1;

53
All other workers except the foregoing will be allowed to vote."
On February 23, 1987, the day of the certification election, petitioner Union filed a Motion for Reconsideration of
Macasa's Order dated February 20, 1987. The certification election was nonetheless conducted, with the result as
follows:
l. Southern Philippines Federation of Labor............. 614
2. Mindanao Miners Employees union
(MMEU- Sandigan)................................................... 528
3. No Union......................................................................... 9
4. Challenged Ballots......................................................197
5. Spoiled............................................................................25
TOTAL VOTES CAST............................................................1,373
On the basis of the foregoing results, respondent Union filed an Urgent Motion to Open the Challenged Ballots, with the
prayer, to wit:
"Wherefore, premises considered, it is most respectfully prayed of this Honorable office that this instant motion be given
due course and that an order be issued to open and count the challenged ballots in order to determine, once and for
all, the winner in the certification and/or consent election and thereafter certify the sole and exclusive collective
bargaining representative of all rank-and-file employees and workers of Apex Mining Company, Incorporated."
xxx xxx xxx
On March 11, 1987, APEX filed a Manifestation and Motion manifesting its interest in the speedy resolution of the case
and primary concern for "the restoration of normalcy and the preservation of industrial peace in the already explosive
situation in the mining area."
xxx xxx xxx
On March 19, 1987, Med-Arbiter Macasa issued an Order, the dispositive portion of which reads:
54
"Wherefore, the interest of industrial peace considered, it is hereby directed that the challenged ballots be opened and
inventoried on 26 March 1987 at 3:00 p.m., before the entire records of the case be indorsed to the BLR for review."
xxx xxx xxx
Petitioner Union appealed Macasa's Order dated March 19, 1987 to the Bureau of Labor Relations. On April 14, 1987, BLR
Director Pura Ferrer-Calleja issued an Order, the dispositive portion of which reads:
"WHEREFORE, the Appeal of petitioner Southern Philippines Federation of Labor (SPFL) is hereby dismissed for lack of merit
and the Med- Arbiter's Order dated 19 March 1987 is affirmed with modification that the 197 ballots should be opened
and canvassed by Labor Regional Office XI, Davao City. Let, therefore, the records of this case be immediately
remanded to the said office, for the immediate implementation of this Resolution."
Petitioner Union moved for a reconsideration of the resolution dated April 14, 1987. Meanwhile, on May 21, 1987, Med-
Arbiter Macasa opened and canvassed the 197 challenged ballots with the result as follows:
SPFL 12 votes
SANDIGAN 178 votes
No Union 2 votes
Spoiled 4 votes
Envelop with
no ballots 1 vote
__________
TOTAL 197 votes
As a consequence of the opening and canvass of the challenged ballots, the outcome of the certification election
became:
SPFL 626 votes
SANDIGAN 706 votes
No Union 11 votes
___________
TOTAL 1,343 votes

55
Based on the aforementioned results, respondent Union filed a Manifestation with the BLR with prayer for the issuance of
Certification Order certifying it as the sole and exclusive bargaining representative of the rank-and-file employees of
APEX. On June 23, 1987, Director Calleja issued an Order, the dispositive portion of which reads:
"WHEREFORE, the Motion for reconsideration of Petitioner SPFL is hereby denied for lack of merit. Meanwhile, intervenor
Mindanao Employees Union-Sandigan Ng Manggagawang Pilipino (MMEU- SANDIGAN) is hereby certified as the sole
and exclusive bargaining representative of the rank-and-file employees of respondent Apex Mining Company, Inc.
Accordingly, the management of Apex Mining Company, Inc., is directed to negotiate with (MMEU-SANDIGAN) for the
conclusion of a collective bargaining agreement (CBA)."
The issue raised in this petition is whether or not the public respondent committed grave abuse of discretion in allowing
the 197 employees to vote in the certification election when, as alleged by the petitioner, they are disqualified by
express provision of law or under the existing collective bargaining agreement.
It is maintained by the petitioner that under the Labor Code, managerial employees are excluded from forming or
joining a collective bargaining unit; and under the collective bargaining agreement executed between Apex and
respondent union, among those who are excluded from the bargaining unit are: a) managerial employees as defined in
paragraph K, Article 212 of the Labor Code; b) those performing supervisory functions; and c) those holding confidential
positions as determined by the company. Therefore, the employees holding the positions of Supervisors II and III and
those in the confidential payrolls should be excluded from joining the bargaining unit and from voting in the certification
election. Likewise, those employees who are not paying union dues should be excluded from the same since the existing
CBA contains a Union shop provision.
The contentions have no merit.
Although we have upheld the validity of the CBA as the law among the parties, (see Planters Products, Inc. v. NLRC, et
al., G.R. No. 78524, January 20, 1989), its provisions cannot override what is expressly provided by law that only
managerial employees are ineligible to join, assist or form any labor organization (See Art. 247, Labor Code). Therefore,
regardless of the challenged employees' designations, whether they are employed as Supervisors or in the confidential
payrolls, if the nature of their job does not fall under the definition of "managerial" as defined in the Labor Code, they are
eligible to be members of the bargaining unit and to vote in the certification election. Their right to self-organization must
be upheld in the absence of an express provision of law to the contrary. It cannot be curtailed by a collective
bargaining agreement.
Hence, it is important to determine whether the positions of Supervisors II and III are considered "managerial" under the
law.
As defined in the Labor Code and as we have held in the case of Franklin Baker Company of the Phils. v. Trajano, (1 57
SCRA 416, 421-423, [1988]):
A managerial employee is defined as one who is vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to
effectively recommend such managerial actions. (Reynolds Phil. Corp. v. Eslava, 137 SCRA [1985], citing Section 212 (K),
Labor Code.)
56
xxxxxxxxx
The test of "supervisory" or "managerial status" depends on whether a person possesses authority to act in the interest of
his employer in the matter specified in Article 212 (k) of the Labor Code and Section 1 (m) of its Implementing Rules and
whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment. Thus,
where such recommendatory powers as in the case at bar, are subject to evaluation, review and final action by the
department heads and other higher executives of the company, the same, although present, are not effective and not
an exercise of independent judgment as required by law (National Warehousing Corp. v. CIR, 7 SCRA 602-603 [1963]).
Furthermore, in line with the ruling of this Court, subject employees are not managerial employees because as borne by
the records, they do not participate in policy making but are given ready policies to execute and standard practices to
observe, thus having little freedom of action (National Waterworks and Sewerage Authority v. NWSA Consolidated, L-
18938, 11 SCRA 766 [1964]).
The petitioner's motion for reconsideration before the public respondent outlined the job description of Supervisors. In the
category of Supervisory II, the "General Summary" provides:
GENERAL SUMMARY:
Assists the Foreman in the effective dispatching/distribution of manpower and equipment to carry out approved work.
(p. 30, Rollo)
while the first duty enumerated in the position of Supervisor III states:
1. Executes and coordinates work plans emanating from his supervisors. (p. 32, Rollo)
Thus, it is clear from the above provisions that the functions of the questioned positions are not managerial in nature
because they only execute approved and established policies leaving little or no discretion at all whether to implement
the said policies or not. The respondent Director, therefore, did not commit grave abuse of discretion in dismissing the
petitioner's appeal from the Med-Arbiter's Order to open and count the challenged ballots in denying the petitioner's
motion for reconsideration and in certifying the respondent Union as the sole and exclusive bargaining representative of
the rank-and-file employees of respondent Apex .
As regards the employees in the confidential payroll, the petitioner has not shown that the nature of their jobs is classified
as managerial except for its allegation that they are considered by management as occupying managerial positions
and highly confidential. Neither can payment or non-payment of union dues be the determining factor of whether the
challenged employees should be excluded from the bargaining unit since the union shop provision in the CBA applies
only to newly hired employees but not to members of the bargaining unit who were not members of the union at the
time of the signing of the CBA. It is, therefore, not impossible for employees to be members of the bargaining unit even
though they are non-union members or not paying union dues.
WHEREFORE, the petition is hereby DISMISSED for LACK OF MERIT. Costs against the petitioner.
57
SO ORDERED.
COASTAL SUBIC BAY TERMINAL, INC.,
Petitioner,
G.R. No. 157117
- versus -
Present:
QUISUMBING, J., Chairperson,
CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
DEPARTMENT OF LABOR and EMPLOYMENT OFFICE OF THE SECRETARY, COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY
UNION-APSOTEU, and COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP,
Respondents.
Promulgated:
November 20, 2006
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:
58
For review on certiorari is the Court of Appeals Decision[1] dated August 31, 2001, in CA-G.R. SP No. 54128 and the
Resolution[2] dated February 5, 2003, denying petitioners motion for reconsideration. The Court of Appeals had affirmed
the Decision[3] dated March 15, 1999 of the Secretary of the Department of Labor and Employment (DOLE) reversing the
Mediator Arbiters dismissal of private respondents petitions for certification election.
The facts are as follows:
On July 8, 1998, private respondents Coastal Subic Bay Terminal, Inc. Rank-and-File Union (CSBTI-RFU) and Coastal Subic
Bay Terminal, Inc. Supervisory Union (CSBTI-SU) filed separate petitions for certification election before Med-Arbiter Eladio
de Jesus of the Regional Office No. III. The rank-and-file union insists that it is a legitimate labor organization having been
issued a charter certificate by the Associated Labor Union (ALU), and the supervisory union by the Associated
Professional, Supervisory, Office and Technical Employees Union (APSOTEU). Private respondents also alleged that the
establishment in which they sought to operate was unorganized.
Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions for certification election alleging that the rank-
and-file union and supervisory union were not legitimate labor organizations, and that the proposed bargaining units
were not particularly described.
Without ruling on the legitimacy of the respondent unions, the Med-Arbiter dismissed, without prejudice to refiling, both
petitions which had been consolidated. The Med-Arbiter held that the ALU and APSOTEU are one and the same
federation having a common set of officers. Thus, the supervisory and the rank-and-file unions were in effect affiliated
with only one federation.[4]
The Med-Arbiter ruled as follows:
Viewed in the light of all the foregoing, this Office finds the simultaneous filing of the instant petitions to be invalid and
unwarranted. Consequently, this Office has no recourse but to dismiss both petitions without prejudice to the refiling of
either.
WHEREFORE, PREMISES CONSIDERED, let the instant petitions be, as they are hereby DISMISSED.
SO ORDERED.[5]
Both parties appealed to the Secretary of Labor and Employment, who reversed the decision of the Med-Arbiter. The
Secretary thru Undersecretary R. Baldoz, ruled that CSBTI-SU and CSBTI-RFU have separate legal personalities to file their
separate petitions for certification election. The Secretary held that APSOTEU is a legitimate labor organization because it
was properly registered pursuant to the 1989 Revised Rules and Regulations implementing Republic Act No. 6715, the rule
applicable at the time of its registration. It further ruled that ALU and APSOTEU are separate and distinct labor unions
having separate certificates of registration from the DOLE. They also have different sets of locals. The Secretary declared
CSBTI-RFU and CSBTI-SU as legitimate labor organizations having been chartered respectively by ALU and APSOTEU after
submitting all the requirements with the Bureau of Labor Relations (BLR). Accordingly, the Secretary ordered the holding
of separate certification election, viz:
WHEREFORE, the decision of the Med-Arbiter, Regional Office No. III is hereby REVERSED. Let separate certification
elections be conducted immediately among the appropriate employees of CSBTI, after the usual pre-election
conference, with the following choices:
I. For all rank and file employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP; and
2. NO UNION.
59
II. For all supervisory employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES UNION-APSOTEU; and
2. NO UNION.
The latest payroll of the employer, including its payrolls for the last three months immediately preceding the issuance of
this decision, shall be the basis for determining the qualified list of voters.
SO DECIDED.[6]
The motion for reconsideration was also denied.[7]
On appeal, the Court of Appeals affirmed the decision of the Secretary.[8] It held that there was no grave abuse of
discretion on the part of the Secretary; its findings are supported by evidence on record; and thus should be accorded
with respect and finality.[9]
The motion for reconsideration was likewise denied.[10] Hence, the instant petition by the company anchored on the
following grounds:
THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON THE 1989 REVISED RULES AND REGULATIONS IMPLEMENTING
RA 6715 AS BASIS TO RECOGNIZE PRIVATE RESPONDENT APSOTEUS REGISTRATION BY THE DOLE REGIONAL DIRECTOR.
II
THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED PUBLIC RESPONDENTS APPLICATION OF THE PRINCIPLE OF
STARE DECISIS TO HASTILY DISPOSE OF THE LEGAL PERSONALITY ISSUE OF APSOTEU.
III
THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN ACCORD WITH LAW AND JURISPRUDENCE WHEN IT AFFIRMED
PUBLIC RESPONDENTS APPLICATION OF THE UNION AUTONOMY THEORY.
IV
IN AFFIRMING PUBLIC RESPONDENTS FINDING THAT PRIVATE RESPONDENTS ARE SEPARATE FEDERATIONS, THE HONORABLE
COURT OF APPEALS:
(1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING NATURE OF A MED-ARBITERS FACTUAL FINDINGS; AND
(2) DISREGARDED EVIDENCE ON RECORD OF ILLEGAL COMMINGLING.[11]
Plainly, the issues are (1) Can the supervisory and the rank-and-file unions file separate petitions for certification
election?; (2) Was the Secretarys decision based on stare decisis correct?; and (3) Were private respondents engaged in
commingling?
The issue on the status of the supervisory union CSBTI-SU depends on the status of APSOTEU, its mother federation.
Petitioner argues that APSOTEU improperly secured its registration from the DOLE Regional Director and not from the BLR;
that it is the BLR that is authorized to process applications and issue certificates of registration in accordance with our
ruling in Phil. Association of Free Labor Unions v. Secretary of Labor;[12] that the certificates of registration issued by the
DOLE Regional Director pursuant to the rules are questionable, and possibly even void ab initio for being ultra vires; and
that the Court of Appeals erred when it ruled that the law applicable at the time of APSOTEUs registration was the 1989
Revised Implementing Rules and Regulations of Rep. Act No. 6715.
Petitioner insists that APSOTEU lacks legal personality, and its chartered affiliate CSBTI-SU cannot attain the status of a
legitimate labor organization to file a petition for certification election. It relies on Villar v. Inciong,[13] where we held
60
therein that Amigo Employees Union was not a duly registered independent union absent any record of its registration
with the Bureau.
Pertinent is Article 235[14] of the Labor Code which provides that applications for registration shall be acted upon by the
Bureau. Bureau as defined under the Labor Code means the BLR and/or the Labor Relations Division in the Regional
Offices of the Department of Labor.[15] Further, Section 2, Rule II, Book V of the 1989 Revised Implementing Rules of the
Labor Code (Implementing Rules) provides that:
Section 2. Where to file application; procedure Any national labor organization or labor federation or local union may
file an application for registration with the Bureau or the Regional Office where the applicants principal offices is
located. The Bureau or the Regional Office shall immediately process and approve or deny the application. In case of
approval, the Bureau or the Regional Office shall issue the registration certificate within thirty (30) calendar days from
receipt of the application, together with all the requirements for registration as hereinafter provided. [16]
The Implementing Rules specifically Section 1, Rule III of Book V, as amended by Department Order No. 9, thus:
SECTION 1. Where to file applications. The application for registration of any federation, national or industry union or
trade union center shall be filed with the Bureau. Where the application is filed with the Regional Office, the same shall
be immediately forwarded to the Bureau within forty-eight (48) hours from filing thereof, together with all the documents
supporting the registration.
The applications for registration of an independent union shall be filed with and acted upon by the Regional Office
where the applicants principal office is located .
xxxx
The DOLE issued Department Order No. 40-03, which took effect on March 15, 2003, further amending Book V of the
above implementing rules. The new implementing rules explicitly provide that applications for registration of labor
organizations shall be filed either with the Regional Office or with the BLR.[17]
Even after the amendments, the rules did not divest the Regional Office and the BLR of their jurisdiction over applications
for registration by labor organizations. The amendments to the implementing rules merely specified that when the
application was filed with the Regional Office, the application would be acted upon by the BLR.
The records in this case showed that APSOTEU was registered on March 1, 1991. Accordingly, the law applicable at that
time was Section 2, Rule II, Book V of the Implementing Rules, and not Department Order No. 9 which took effect only on
June 21, 1997. Thus, considering further that APSOTEUs principal office is located in Diliman, Quezon City, and its
registration was filed with the NCR Regional Office, the certificate of registration is valid.
The petitioner misapplied Villar v. Inciong.[18] In said case, there was no record in the BLR that Amigo Employees Union
was registered.[19]
Did the Court of Appeals err in its application of stare decisis when it upheld the Secretarys ruling that APSOTEU is a
legitimate labor organization and its personality cannot be assailed unless in an independent action for cancellation of
registration certificate?[20]
We think not.
Section 5, Rule V, Book V of the Implementing Rules states:

61
Section 5. Effect of registration The labor organization or workers association shall be deemed registered and vested with
legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be
subject to collateral attack, but maybe questioned only in an independent petition for cancellation in accordance with
these Rules.[21]
Thus, APSOTEU is a legitimate labor organization and has authority to issue charter to its affiliates.[22] It may issue a local
charter certificate to CSBTI-SU and correspondingly, CSBTI-SU is legitimate.
Are ALU, a rank-and-file union and APSOTEU, a supervisory union one and the same because of the commonalities
between them? Are they commingled?
The petitioner contends that applying by analogy, the doctrine of piercing the veil of corporate fiction, APSOTEU and
ALU are the same federation. Private respondents disagree.
First, as earlier discoursed, once a labor union attains the status of a legitimate labor organization, it continues as such
until its certificate of registration is cancelled or revoked in an independent action for cancellation.[23] In addition, the
legal personality of a labor organization cannot be collaterally attacked.[24] Thus, when the personality of the labor
organization is questioned in the same manner the veil of corporate fiction is pierced, the action partakes the nature of
a collateral attack. Hence, in the absence of any independent action for cancellation of registration against either
APSOTEU or ALU, and unless and until their registrations are cancelled, each continues to possess a separate legal
personality. The CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct and separate federations, despite the
commonalities of APSOTEU and ALU.
Under the rules implementing the Labor Code, a chartered local union acquires legal personality through the charter
certificate issued by a duly registered federation or national union, and reported to the Regional Office in accordance
with the rules implementing the Labor Code.
[25] 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 local union. It only
gives rise to a contract of agency, where the former acts in representation of the latter.[26] Hence, local unions are
considered principals while the federation is deemed to be merely their agent.[27] As such principals, the unions are
entitled to exercise the rights and privileges of a legitimate labor organization, including the right to seek certification as
the sole and exclusive bargaining agent in the appropriate employer unit.
A word of caution though, under Article 245 of the Labor Code,[28] supervisory employees are not eligible for
membership in a labor union of rank-and-file employees. The supervisory employees are allowed to form their own union
but they are not allowed to join the rank-and-file union because of potential conflicts of interest.[29] Further, to avoid a
situation where supervisors would merge with the rank-and-file or where the supervisors labor union would represent
conflicting interests, a local supervisors union should not be allowed to affiliate with the national federation of unions of
rank-and-file employees where that federation actively participates in the union activity within the company.[30] Thus,
the limitation is not confined to a case of supervisors wanting to join a rank-and-file union. The prohibition extends to a
supervisors local union applying for membership in a national federation the members of which include local unions of
rank-and-file employees.[31] In De La Salle University Medical Center and College of Medicine v. Laguesma, we
reiterated the rule that for the prohibition to apply, it is not enough that the supervisory union and the rank-and-file union
are affiliated with a single federation. In addition, the supervisors must have direct authority over the rank-and-file
employees.[32]
In the instant case, the national federations that exist as separate entities to which the rank-and-file and supervisory
unions are separately affiliated with, do have a common set of officers. In addition, APSOTEU, the supervisory federation,
actively participates in the CSBTI-SU while ALU, the rank-and-file federation, actively participates in the CSBTI-RFU, giving
occasion to possible conflicts of interest among the common officers of the federation of rank-and-file and the
federation of supervisory unions. For as long as they are affiliated with the APSOTEU and ALU, the supervisory and rank-
and-file unions both do not meet the criteria to attain the status of legitimate labor organizations, and thus could not
separately petition for certification elections.
62
The purpose of affiliation of the local unions into a common enterprise is to increase the collective bargaining power in
respect of the terms and conditions of labor.[33] When there is commingling of officers of a rank-and-file union with a
supervisory union, the constitutional policy on labor is circumvented. Labor organizations should ensure the freedom of
employees to organize themselves for the purpose of leveling the bargaining process but also to ensure the freedom of
workingmen and to keep open the corridor of opportunity to enable them to do it for themselves.
WHEREFORE, the petition is GRANTED. The Court of Appeals Decision dated August 31, 2001, in CA-G.R. SP No. 54128 and
the Resolution dated February 5, 2003 are SET ASIDE. The decision of the Med-Arbiter is hereby AFFIRMED.
SO ORDERED.
HOME DEVELOPMENT MUTUAL FUND, petitioner, vs. COMMISSION ON AUDIT, respondent.
DECISION
AZCUNA, J.:
Before us is a petition for certiorari under Rule 65 of the Rules of Court alleging that the Commission on Audit acted in
excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in issuing Resolution No. 2000-
086 dated March 7, 2000, which affirmed COA Decision No. 98-245 dated June 16, 1998. COA Decision No. 98-245
affirmed the audit disallowance of payment of productivity incentive bonus by petitioner Home Development Mutual
Fund (HDMF) to its personnel pursuant to Republic Act No. 6971, otherwise known as the Productivity Incentives Act of
1990.
The facts are as follows:
Republic Act No. 6971, An Act to Encourage Productivity and Maintain Industrial Peace by Providing Incentives to Both
Labor and Capital, was approved on November 22, 1990, and took effect on December 9, 1990.
Section 3 of said Act states:
Sec. 3. Coverage.-- This Act shall apply to all business enterprises with or without existing and duly recognized or certified
labor organizations, including government-owned and controlled corporations performing proprietary functions. It shall
cover all employees and workers including casual, regular, supervisory and managerial employees.
The Secretary of Labor and Employment and the Secretary of Finance promulgated the Rules Implementing Republic
Act No. 6971[1] on June 4, 1991. Rule II of said implementing rules provides:
Section 1. Coverage. These Rules shall apply to:
(a) All business enterprises with or without existing duly recognized or certified labor organizations, including government-
owned and controlled corporations performing proprietary functions;
(b) All employees and workers including casual, regular, rank-and-file, supervisory and managerial employees.
On November 21, 1991, petitioner HDMF granted Productivity Incentive Bonus equivalent to one month salary plus
allowance to all its personnel pursuant to Republic Act No. 6971, and its Implementing Rules.[2]
The HDMF granted said bonus despite the advice on August 26, 1991 of Undersecretary Salvador Enriquez of the
Department of Budget and Management (DBM) to all government-owned and controlled corporations (GOCCs) and
government financial institutions (GFIs) with original charters performing proprietary functions to defer payment of the
productivity incentive bonus to their employees, pending the issuance of a definite ruling by the Office of the President
on the matter.[3]
On December 27, 1991, the Department of Labor and Employment and the Department of Finance issued the
Supplemental Rules Implementing Republic Act No. 6971, which provides, thus:
Section 1.Paragraph (a) Section 1, Rule II of the Rules Implementing RA 6971, shall be amended to read as follows:
Coverage. These Rules shall apply to:

63
(a) All business enterprises with or without existing duly certified labor organizations including government-owned and
controlled corporations performing proprietary functions which are established solely for business or profit or gain and
accordingly excluding those created, maintained or acquired in pursuance of a policy of the state, enunciated in the
constitution or by law, and those whose officers and employees are covered by the Civil Service. (Emphasis supplied.)
On November 29, 1996, the grant of productivity incentive bonus to the HDMF personnel in the total amount of
P5,136,710.91 was disallowed in audit under Notice of Disallowance No. 96-006-101 (91).[4] The disallowance was based
on COA Decision No. 96-288, dated June 4, 1996, stating that Republic Act No. 6971 does not apply to government-
owned or controlled corporations or to government financial institutions with original charters performing proprietary
functions, such as the HDMF.[5]
In a letter-request dated May 28, 1997, HDMF, through its President and Chief Executive Officer, Zorayda Amelia C.
Alonzo, requested for the lifting of the disallowance.[6] Alonzo argued that Republic Act No. 6971 applies to the
employees of HDMF since the coverage of the said law includes government-owned and controlled corporations
performing proprietary functions, and the supplemental rules excluding it from coverage was issued after the HDMF had
already granted the productivity incentive bonus to its employees.
In its Decision No. 98-245[7] dated June 16, 1998, the Commission on Audit affirmed the audit disallowance. It ruled, thus:
xxxxxxxxx
Appellant (petitioner herein) further averred that while the Supplemental Rules Implementing R.A. No. 6971 issued by the
Department of Labor and Employment and the Department of Finance dated December 27, 1991, exclude from the
coverage of R.A. No. 6971 GOCCs whose officers and employees are covered by the Civil Service Law (like the HDMF),
payment of the incentive bonus have been effected prior to the issuance of the said supplemental rules. Simply stated, it
is the position of the appellant that the supplemental rules should not be given retroactive effect.
The Commission finds the appellants arguments untenable. It must be noted that the grant of the Productivity Incentive
Bonus was made on November 21, 1991 or after receipt of the advice of the Department of Budget and Management
Undersecretary dated August 26, 1991 to defer payment of Productivity Incentive Bonus to all GOCCs/GFIs with original
charters performing proprietary functions, pending definite ruling of the Office of the President. Despite the said notice,
management proceeded with the payment.
Likewise, the issue as to whether or not GOCCs/GFIs with original charters which are performing proprietary functions are
covered by R.A. No. 6971 had been resolved by the Secretary of Justice in his letter dated November 8, 1995, stating
that GOCCs with original charter, being covered by the Civil Service Law, and not by the labor laws, are clearly outside
the ambit of R.A. No. 6971.
Verily, the grant of the incentive bonus is contrary to the Supplemental Rules Implementing R.A. No. 6971 issued by the
Department of Labor and Employment and the Department of Finance dated December 27, 1991, portion of which
pertinently reads as follows:
All business enterprises x x x established solely for business of profit or gain and accordingly, excluding those created,
maintained or acquired in pursuance of a policy of the state, enunciated in the constitution or by law, and those whose
officers and employees are covered by the Civil Service (underscoring supplied).
Moreover, the issue raised by the appellant that the supplemental rules excluding GOCCs/GFIs from the coverage of
R.A. No. 6971 should not be given retroactive effect is not tenable since the HDMF from the very beginning is not
covered by the aforesaid law.
Premises considered, the audit disallowance is hereby affirmed, and the refund of the amount of P5,136,710.91 granted
as Productivity Incentive Bonus to HDMF personnel based on the provisions of R.A. No. 6971 shall be enforced
accordingly.
HDMF filed a motion for reconsideration that was denied by the Commission on Audit in Resolution No. 2000-086 dated
March 7, 2000. [8]
Petitioner raises three issues:[9]
1. What is the applicable rule at the time of the grant of the Productivity Incentive Bonus?
2. Whether the Memorandum from the Department of Finance signed by Secretary Jesus P. Estanislao dated January 16,
1992 constitutes appropriate authorization for the grant of Productivity Incentive Allowance for 1991.
64
3. Whether the Supplemental Implementing Rules are valid? If so, whether it may be given retroactive effect?
Petitioner contends that when it granted the productivity incentive bonus to its personnel on November 21, 1991, no
other rule but the Implementing Rules of Republic Act No. 6971 dated June 4, 1991 was in existence. Said Rule includes in
its coverage government-owned and controlled corporations performing proprietary functions, without any
qualification. The Supplementary Rules, which excluded petitioner from coverage, was issued only after it had already
granted the productivity incentive bonus to its personnel. Hence, the employees already acquired a vested right over
the productivity incentive bonus.
The contention is without merit.
Association of Dedicated Employees of the Philippine Tourism Authority (ADEPT) v. Commission on Audit,[10] held that the
legislature intended Republic Act No. 6971 to cover only government-owned and controlled corporations incorporated
under the general corporation law, thus:
Petitioner cites an entry in the journal of the House of Representatives to buttress its submission that PTA is within the
coverage of RA 6971, to wit:
Chairman Veloso: The intent of including government-owned and controlled corporations within the coverage of the
Act is the recognition of the principle that when government goes into business, it (divests) itself of its immunity from suit
and goes down to the level of ordinary private enterprises and subjects itself to the ordinary laws of the land just like
ordinary private enterprises. Now, when people work therefore in government-owned or controlled corporations, it is as if
they are also, just like in the private sector, entitled to all the benefits of all laws that apply to workers in the private
sector. In my view, even including the right to organize, bargain VELOSO (Bicameral Conference committee on Labor
and Employment, pp. 15-16).
After a careful study, the Court is of the view, and so holds, that contrary to petitioners interpretation, the government-
owned and controlled corporations Mr. Chairman Veloso had in mind were government-owned and controlled
corporations incorporated under the general corporation law. This is so because only workers in private corporations and
government-owned and controlled corporations, incorporated under the general corporation law, have the right to
bargain (collectively). Those in government corporations with special charter, which are subject to Civil Service Laws,
have no right to bargain (collectively), except where the terms and conditions of employment are not fixed by law. Their
rights and duties are not comparable with those in the private sector. (Emphasis supplied.)
xxxxxxxxx
The legislative intent to place only government-owned and controlled corporations performing proprietary functions
under the coverage of RA 6971 is gleanable from the other provisions of the law. For instance, section 2 of said law
envisions industrial peace and harmony and to provide corresponding incentives to both labor and capital; section 4
refers to representatives of labor and management, section 5 mentions of collective bargaining agent(s) of the
bargaining unit(s); section 6 relates to existing collective bargaining agreements, and labor and management; section 7
speaks of strike or lockout; and section 9 purports to seek the assistance of the National Conciliation and Mediation
Board of the Department of Labor and Employment and include the name(s) of the voluntary arbitrator or panel of
voluntary arbitrators. All the aforecited provisions of law apply only to private corporations and government-owned and
controlled corporations organized under the general corporation law. Only they have collective bargaining agents,
collective bargaining units, collective bargaining agreements, and the right to strike or lockout. (Emphasis supplied.)
To repeat, collectively employees of government corporations created by special charters have neither the right to strike
nor the right to bargain, as defined in the Labor Code. The case of Social Security System Employees Association
indicates the following remedy of government workers not allowed to strike or bargain collectively, to wit:
Government employees may, therefore, through their unions or associations, either petition the Congress for the
betterment of the terms and conditions of employment which are within the ambit of legislation or negotiate with the
appropriate government agencies for the improvement of those which are not fixed by law. If there be any unresolved
grievances, the dispute may be referred to the Public Sector Labor-Management Council for appropriate action. But
employees in the civil service may not resort to strikes, walkouts and other temporary work stoppages, like workers in the
private sector, to pressure the Government to accede to their demands. (supra, footnote 14, p. 698; italics ours)
It is a rule in statutory construction that every part of the statute must be interpreted with reference to the context, i.e.,
that every part of the statute must be considered together with the other parts, and kept subservient to the general
intent of the whole enactment. The provisions of RA 6971, taken together, reveal the legislative intent to include only
government-owned and controlled corporations performing proprietary functions within its coverage.
Petitioner is a government-owned and controlled corporation performing proprietary functions with original charter or
created by special law, specifically Presidential Decree (PD) No. 1752,[11] amending PD No. 1530. As such, petitioner
65
HDMF is covered by the Civil Service pursuant to Article IX, Section 2(1)[12] of the 1987 Constitution, and, therefore,
excluded from the coverage of Republic Act No. 6971.
Since Republic Act No. 6971 intended to cover only government-owned and controlled corporations incorporated
under the general corporation law, the power of administrative officials to promulgate rules in the implementation of the
statute is necessarily limited to what is intended and provided for in the legislative enactment.[13] Hence, the
Supplemental Rules clarified that government-owned and controlled corporations performing proprietary functions
which are created, maintained or acquired in pursuance of a policy of the state, enunciated in the constitution or by
law, and those whose officers and employees are covered by the Civil Service are excluded from the coverage of
Republic Act No. 6971.
Therefore, even if petitioner HDMF granted the Productivity Incentive Bonus before the Supplemental Rules were issued
clarifying that petitioner was excluded from the coverage of Republic Act No. 6971, the employees of HDMF did not
acquire a vested right over said bonus because they were not entitled to it under Republic Act No. 6971.
Moreover, the DBM advised petitioner herein, HDMF, on August 26, 1991, to defer payment of the productivity incentive
bonus to their employees, pending the issuance of a definite ruling by the Office of the President on the matter. Despite
said advice, the Board of Trustees of HDMF opted to grant the said bonus on a voluntary basis as stated in its Resolution
No. 91-549, Series of 1991.[14] It expressed its concern over the welfare of the officers and employees of the Fund rather
than adhering to the stringent technicality of the law. The Board, therefore, was aware that possibly HDMF may not be
covered by Republic Act No. 6971. It should have exercised prudence by awaiting the definite ruling on the coverage to
prevent legal problems.
Regarding the validity of the Supplemental Rules Implementing Republic Act No. 6971, ADEPT v. Commission on Audit
held that said rules issued by the Secretary of Labor and Employment and the Secretary of Finance were in accord with
the intendment and provisions of Republic Act No. 6971.[15]
Petitioner further claims that it is covered by a memorandum,[16] dated January 16, 1992, which was allegedly issued by
Secretary Jesus P. Estanislao, Department of Finance, stating that [a]s authorized by the President, the GFIs are to pay
the traditional PIA at the year-end 1991, following the standard formulas that have been observed by the GFIs over the
years. Petitioner raises as an issue whether or not said memorandum constitutes appropriate authorization for its grant of
productivity incentive allowance for 1991.
Parenthetically, the decision of the Commission on Audit subject of the petition herein, never discussed the aforesaid
memorandum. The same, in any case, cannot prevail over the law.
Petitioner finally asserts that its payment of the productivity incentive bonus to its personnel and the latters acceptance
of the same was in good faith and cites ADEPT v. Commission on Audit as precedent against a refund of said bonus.
In ADEPT v. Commission on Audit, docketed as G.R. No. 119597, the Court sustained the decision of the Commission on
Audit affirming the disallowance by the Corporate Auditor of the productivity incentive bonus granted to ADEPT (an
association of employees of the Philippine Tourism Authority) for calendar year 1992 pursuant to Republic Act No. 6971.
ADEPT v. Commission on Audit was consolidated with four other cases, which did not involve the application of Republic
Act No. 6971. It was in the other cases, docketed as G.R. Nos. 109406, 110642, 111494 and 112056, that the Court
enjoined further deductions from the salaries and allowances of petitioners therein.
In view of the foregoing, the respondent Commission on Audit did not commit grave abuse of discretion amounting to
lack of jurisdiction in affirming the audit disallowance.
WHEREFORE, the petition is DISMISSED. Respondent Commission on Audits Resolution No. 2000-086, dated March 7, 2000,
which affirmed COA Decision No. 98-245, dated June 16, 1998, is hereby AFFIRMED.
Costs de oficio.
SO ORDERED.
DUNLOP SLAZENGER (PHILS.), INC., petitioner,
vs.
HON. SECRETARY OF LABOR AND EMPLOYMENT and DUNLOP SLAZENGER STAFF ASSOCIATION-APSOTEU, respondent.
66
PUNO, J.:
In this petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, petitioner seeks the annulment of the
Resolution and Order, dated July 19, 1997 and October 16, 1997, 1 of the public respondent Secretary of Labor and
Employment calling for a certification election in its company.
It appears that on September 15, 1995, the respondent union filed a Petition for Certification Election among the
supervisory, office and technical employees of the petitioner company before the Department of Labor and
Employment, Regional Office No. III, San Fernando, Pampanga. It alleged that it is a legitimate labor organization, a duly
chartered local of the Associated Professional, Supervisory, Office & Technical Employees Union (APSOTEU); that
petitioner is a domestic corporation engaged in the manufacture of tennis balls and other allied products; that petitioner
is an unorganized establishment and there is no certified bargaining agreement that will bar the filing of its petition for
certification election; and that no certification election has been conducted within one (1) year prior to the filing
certification election.
On October 9, 1995, the petitioner company filed its Answer with Motion to Dismiss based on three (3) grounds, namely:
(1) that the respondent union is comprised of supervisory and rank-and-file employees and cannot act as bargaining
agent for the proposed unit; (2) that a single certification election cannot be conducted jointly among supervisory and
rank-and-file employees; and (3) that the respondent union lacks legal standing since it failed to submit its books of
accounts.2
In its Reply filed on December 5, 1995, the respondent union alleged that its members are supervisors and not rank-and-
file employees. It averred that all its members are paid monthly by the petitioner company. It alleged that the
bargaining unit it seeks to represent is made up of the monthly paid supervisory employees and other personnel who
cannot be classified as belonging to the rank-and-file. It further contended that it has no obligation to attach its books of
accounts since it is a legitimate labor organization. It urged that the certification election proceeding cannot be used to
question the legal personality of a labor organization. 3On March 4, 1996, however, respondent union submitted its new
books of accounts consisting of the Cash Receipts Journal, Cash Disbursements Journal and two (2) ledgers. 4
On July 15, 1996, Mediator Arbiter Ma. Carmen A. Espinosa granted the petition for certification election. Respondent
Secretary of Labor and Employment affirmed the Arbiter's decision ruling as follows:
xxx xxx xxx
The order of the Med-Arbiter directing the conduct of a certification elections is well and proper.
A perusal of the records shows that the bargaining unit that the petitioner seeks to represent has been properly defined
and this is composed of all the supervisory employees of the respondent company. We wish to emphasize that the right
of supervisory employees to form their own labor organization separate from that of the rank-and-file union has been
recognized by law. This is quite clear from the provisions of Article 245 of the Labor Code, as amended, which states:
ART. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees-managerial
employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank and file employees but may join, assist or form separate labor
organizations of their own.
As to the contention of the respondent that the petitioning union is composed of both supervisory and rank and file
employees, suffice it to stress that the same is not a sufficient reason that would warrant the dismissal of the present
petition. The same can be taken care (sic) of during the pre-election conference thru the exclusion-inclusion
proceedings wherein those employees who are occupying rank and file positions will be excluded from the list of eligible
voters.
Anent the issue on the legitimacy of the petitioner, we agree with the findings of the Med-Arbiter that the petitioner has
acquired the requisite legal personality to file the present petition for certification elections. This is shown by the fact that
the petitioner has sufficiently complied with the mandatory reportorial requirements provided for under Section 3, Rule II,
Book V of the Rules and Regulations Implementing the Labor Code, as amended and as enunciated by the Supreme
Court in the cases of Progressive Development Corporation vs. Secretary of labor, et al., 205 SCRA 802 and Protection
Technology Inc. vs. Secretary of Labor, G.R. 11711, March 1, 1995. 5
Respondent Secretary of Labor denied petitioner's motion for reconsideration; hence, this petition.
It is petitioner's submission that:

67
Respondent Secretary acted arbitrarily and with grave abuse of discretion amounting to lack or excess of jurisdiction in
holding that the respondent union is composed of all the supervisory employees of the [petitioner] company.
II
Respondent Secretary acted arbitrarily and with grave abuse of discretion amounting to lack or excess of jurisdiction in
finding that even if the respondent union is composed of both supervisory and rank-and-file employees such can be
taken cared of during the pre-election conference thru the exclusion-inclusion proceedings.
III
Respondent Secretary acted contrary to law and with grave abuse of discretion amounting to lack or excess of
jurisdiction in upholding the findings of the Med-Arbiter that the respondent union has complied with all the requirements
for it to attain the legal personality to file the petition for certification election. 6
The petition is meritorious.
We agree with the public respondent that supervisors can be an appropriate bargaining unit. This is in accord with our
repeated ruling that
"[a]n appropriate bargaining unit is a group of employees of a given employer, composed of all or less than the entire
body of employees, which the collective interests of all the employees, consistent with equity to the employer, indicate
to be best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of law.
Otherwise stated, it is a legal collectivity for collective bargaining purposes whose members have substantially mutual
bargaining interests in terms and conditions of employment as will assure to all employees their collective bargaining
rights. A unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages,
hours, working conditions and other subjects of collective bargaining." 7
The critical issue, however, is whether or not the respondent union can file a petition for certification election to represent
the supervisory employees of the petitioner company. The resolution of this issue depends on whether the respondent
union is composed solely of supervisory employees or of both supervisory and rank-and-file employees. Article 245 of the
Labor Code clearly provides that "supervisory employees shall not be eligible for membership in a labor organization of
the rank-and-file employees . . . ."
To determine who are supervisory and rank-and-file employees reference has to be made to Article 212 (m) of the Labor
Code, as amended, as well as Section 1 (t), Rule I, Book V of the Omnibus Rules Implementing the Labor Code, as
amended, viz:
Managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees. Supervisory employees are
those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such
authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not
falling within any of the above definitions are considered rank-and-file employees for purposes of this Book [these Rules].
Determining the status of supervisory and rank-and-file employees is not a hard row to hoe in labor law. The test of
supervisory status as we have repeatedly ruled is whether an employee possesses authority to act in the interest of his
employer, which authority should not be merely routinary or clerical in nature but requires the use of independent
judgment. Corrollarily, what determines the nature of employment is not the employee's title, but his job description. 8
In the instant case, the list of monthly paid employees submitted by the petitioner company contains the names of
about twenty seven (27) supervisory employees, six (6) managerial employees, one (1) confidential employee and
twenty six (26) office and technical employees holding various positions. The list reveals that the positions occupied by
the twenty six (26) office and technical employees are in fact rank-and-file positions, i.e., A/C mechanic, draftsmen,
storemen, motorpool mechanic, secretaries, accounts clerk, company nurses, industrial mechanic, boiler men,
laboratory technicians, payroll clerk; welder, purchasing clerk, company drivers and electricians. It is fairly obvious that
these positions cannot be considered as supervisory positions for they do not carry the authority to act in the interest of
the employer or to recommend managerial actions. It is not decisive that these employees are monthly paid employees.
Their mode of compensation is usually a matter of convenience and does not necessarily determine the nature and
character of their job.
We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of the
respondent union can be remedied in "the pre-election conference thru the exclusion-inclusion proceedings wherein
those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters." Public
68
respondent gravely misappreciates the basic antipathy between the interest of supervisors and the interest of rank-and-
file employees. Due to the irreconcilability of their interests we held in Toyota Motor Philippines v. Toyota Motors
Philippines Corporation Labor Union 9 viz:
xxx xxx xxx
Clearly, based on this provision [Article 245, Labor Code], a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor
organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot
possess any of the rights of a legitimate labor organization, including the right to file apetition for certification election for
the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a
certification election, to inquire into the composition of any labor organization whenever the status of the labor
organization is challenged on the basis of Article 245 of the Labor Code.
Needless to stress, the respondent union has no legal right to file a certification election to represent a bargaining unit
composed of supervisors for so long as it counts rank-and-file employees among its members.
IN VIEW WHEREOF, the Resolution and Order dated July 19, 1997 and October 16, 1997, in OS-A-10-171-96 of the public
respondent are annulled and set aside. No costs.
NAA NAKA NA DIGEST ANI .. TUO LANG
SO ORDERED.
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), petitioner, vs. HON. LEONARDO A. QUISUMBING in his capacity
as the Secretary of Labor and Employment; HON. CRESENCIANO B. TRAJANO in his capacity as the Acting Secretary of
Labor and Employment; DR. BRIAN MACCAULEY in his capacity as the Superintendent of International School-Manila;
and INTERNATIONAL SCHOOL, INC., respondents.
DECISION
KAPUNAN, J.:
Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent School, mostly Filipinos,
cry discrimination. We agree. That the local-hires are paid more than their colleagues in other schools is, of course,
beside the point. The point is that employees should be given equal pay for work of equal value. That is a principle long
honored in this jurisdiction. That is a principle that rests on fundamental notions of justice. That is the principle we uphold
today.
Private respondent International School, Inc. (the School, for short), pursuant to Presidential Decree 732, is a domestic
educational institution established primarily for dependents of foreign diplomatic personnel and other temporary
residents.[1] To enable the School to continue carrying out its educational program and improve its standard of
instruction, Section 2(c) of the same decree authorizes the School to
employ its own teaching and management personnel selected by it either locally or abroad, from Philippine or other
nationalities, such personnel being exempt from otherwise applicable laws and regulations attending their employment,
except laws that have been or will be enacted for the protection of employees.
Accordingly, the School hires both foreign and local teachers as members of its faculty, classifying the same into two: (1)
foreign-hires and (2) local-hires. The School employs four tests to determine whether a faculty member should be
classified as a foreign-hire or a local hire:
a.....What is one's domicile?
b.....Where is one's home economy?
c.....To which country does one owe economic allegiance?
d.....Was the individual hired abroad specifically to work in the School and was the School responsible for bringing that
individual to the Philippines?[2]
Should the answer to any of these queries point to the Philippines, the faculty member is classified as a local hire;
otherwise, he or she is deemed a foreign-hire.
69
The School grants foreign-hires certain benefits not accorded local-hires. These include housing, transportation, shipping
costs, taxes, and home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five percent (25%) more
than local-hires. The School justifies the difference on two "significant economic disadvantages" foreign-hires have to
endure, namely: (a) the "dislocation factor" and (b) limited tenure. The School explains:
A foreign-hire would necessarily have to uproot himself from his home country, leave his family and friends, and take the
risk of deviating from a promising career path-all for the purpose of pursuing his profession as an educator, but this time in
a foreign land. The new foreign hire is faced with economic realities: decent abode for oneself and/or for one's family,
effective means of transportation, allowance for the education of one's children, adequate insurance against illness and
death, and of course the primary benefit of a basic salary/retirement compensation.
Because of a limited tenure, the foreign hire is confronted again with the same economic reality after his term: that he
will eventually and inevitably return to his home country where he will have to confront the uncertainty of obtaining
suitable employment after a long period in a foreign land.
The compensation scheme is simply the School's adaptive measure to remain competitive on an international level in
terms of attracting competent professionals in the field of international education.[3]
When negotiations for a new collective bargaining agreement were held on June 1995, petitioner International School
Alliance of Educators, "a legitimate labor union and the collective bargaining representative of all faculty members"[4]
of the School, contested the difference in salary rates between foreign and local-hires. This issue, as well as the question
of whether foreign-hires should be included in the appropriate bargaining unit, eventually caused a deadlock between
the parties.
On September 7, 1995, petitioner filed a notice of strike. The failure of the National Conciliation and Mediation Board to
bring the parties to a compromise prompted the Department of Labor and Employment (DOLE) to assume jurisdiction
over the dispute. On June 10, 1996, the DOLE Acting Secretary, Crescenciano B. Trajano, issued an Order resolving the
parity and representation issues in favor of the School. Then DOLE Secretary Leonardo A. Quisumbing subsequently
denied petitioner's motion for reconsideration in an Order dated March 19, 1997. Petitioner now seeks relief in this Court.
Petitioner claims that the point-of-hire classification employed by the School is discriminatory to Filipinos and that the
grant of higher salaries to foreign-hires constitutes racial discrimination.
The School disputes these claims and gives a breakdown of its faculty members, numbering 38 in all, with nationalities
other than Filipino, who have been hired locally and classified as local hires.[5]The Acting Secretary of Labor found that
these non-Filipino local-hires received the same benefits as the Filipino local-hires:
The compensation package given to local-hires has been shown to apply to all, regardless of race. Truth to tell, there are
foreigners who have been hired locally and who are paid equally as Filipino local hires.[6]
The Acting Secretary upheld the point-of-hire classification for the distinction in salary rates:
The principle "equal pay for equal work" does not find application in the present case. The international character of the
School requires the hiring of foreign personnel to deal with different nationalities and different cultures, among the
student population.
We also take cognizance of the existence of a system of salaries and benefits accorded to foreign hired personnel
which system is universally recognized. We agree that certain amenities have to be provided to these people in order to
entice them to render their services in the Philippines and in the process remain competitive in the international market.
Furthermore, we took note of the fact that foreign hires have limited contract of employment unlike the local hires who
enjoy security of tenure. To apply parity therefore, in wages and other benefits would also require parity in other terms
and conditions of employment which include the employment contract.
A perusal of the parties' 1992-1995 CBA points us to the conditions and provisions for salary and professional
compensation wherein the parties agree as follows:
All members of the bargaining unit shall be compensated only in accordance with Appendix C hereof provided that the
Superintendent of the School has the discretion to recruit and hire expatriate teachers from abroad, under terms and
conditions that are consistent with accepted international practice.
Appendix C of said CBA further provides:

70
The new salary schedule is deemed at equity with the Overseas Recruited Staff (OSRS) salary schedule. The 25%
differential is reflective of the agreed value of system displacement and contracted status of the OSRS as differentiated
from the tenured status of Locally Recruited Staff (LRS).
To our mind, these provisions demonstrate the parties' recognition of the difference in the status of two types of
employees, hence, the difference in their salaries.
The Union cannot also invoke the equal protection clause to justify its claim of parity. It is an established principle of
constitutional law that the guarantee of equal protection of the laws is not violated by legislation or private covenants
based on reasonable classification. A classification is reasonable if it is based on substantial distinctions and apply to all
members of the same class. Verily, there is a substantial distinction between foreign hires and local hires, the former
enjoying only a limited tenure, having no amenities of their own in the Philippines and have to be given a good
compensation package in order to attract them to join the teaching faculty of the School.[7]
We cannot agree.
That public policy abhors inequality and discrimination is beyond contention. Our Constitution and laws reflect the policy
against these evils. The Constitution[8] in the Article on Social Justice and Human Rights exhorts Congress to "give highest
priority to the enactment of measures that protect and enhance the right of all people to human dignity, reduce social,
economic, and political inequalities." The very broad Article 19 of the Civil Code requires every person, "in the exercise of
his rights and in the performance of his duties, [to] act with justice, give everyone his due, and observe honesty and
good faith."
International law, which springs from general principles of law,[9] likewise proscribes discrimination. General principles of
law include principles of equity,[10] i.e., the general principles of fairness and justice, based on the test of what is
reasonable.[11] The Universal Declaration of Human Rights,[12] the International Covenant on Economic, Social, and
Cultural Rights,[13] the International Convention on the Elimination of All Forms of Racial Discrimination,[14] the
Convention against Discrimination in Education,[15] the Convention (No. 111) Concerning Discrimination in Respect of
Employment and Occupation[16] - all embody the general principle against discrimination, the very antithesis of fairness
and justice. The Philippines, through its Constitution, has incorporated this principle as part of its national laws.
In the workplace, where the relations between capital and labor are often skewed in favor of capital, inequality and
discrimination by the employer are all the more reprehensible.
The Constitution[17] specifically provides that labor is entitled to "humane conditions of work." These conditions are not
restricted to the physical workplace - the factory, the office or the field - but include as well the manner by which
employers treat their employees.
The Constitution[18] also directs the State to promote "equality of employment opportunities for all." Similarly, the Labor
Code[19] provides that the State shall "ensure equal work opportunities regardless of sex, race or creed." It would be an
affront to both the spirit and letter of these provisions if the State, in spite of its primordial obligation to promote and
ensure equal employment opportunities, closes its eyes to unequal and discriminatory terms and conditions of
employment.[20]
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for example, prohibits and
penalizes[21] the payment of lesser compensation to a female employee as against a male employee for work of equal
value. Article 248 declares it an unfair labor practice for an employer to discriminate in regard to wages in order to
encourage or discourage membership in any labor organization.
Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in Article 7 thereof, provides:
The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just and favourable
conditions of work, which ensure, in particular:
a.....Remuneration which provides all workers, as a minimum, with:
i.....Fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being
guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work;
x x x.
The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for
equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar
conditions, should be paid similar salaries.[22] This rule applies to the School, its "international character" notwithstanding.
71
The School contends that petitioner has not adduced evidence that local-hires perform work equal to that of foreign-
hires.[23] The Court finds this argument a little cavalier. If an employer accords employees the same position and rank,
the presumption is that these employees perform equal work. This presumption is borne by logic and human experience.
If the employer pays one employee less than the rest, it is not for that employee to explain why he receives less or why
the others receive more. That would be adding insult to injury. The employer has discriminated against that employee; it
is for the employer to explain why the employee is treated unfairly.
The employer in this case has failed to discharge this burden. There is no evidence here that foreign-hires perform 25%
more efficiently or effectively than the local-hires. Both groups have similar functions and responsibilities, which they
perform under similar working conditions.
The School cannot invoke the need to entice foreign-hires to leave their domicile to rationalize the distinction in salary
rates without violating the principle of equal work for equal pay.
"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or recompense for services performed." Similarly, the
Philippine Legal Encyclopedia states that "salary" is the "[c]onsideration paid at regular intervals for the rendering of
services." In Songco v. National Labor Relations Commission,[24] we said that:
"salary" means a recompense or consideration made to a person for his pains or industry in another man's business.
Whether it be derived from "salarium," or more fancifully from "sal," the pay of the Roman soldier, it carries with it the
fundamental idea of compensation for services rendered. (Emphasis supplied.)
While we recognize the need of the School to attract foreign-hires, salaries should not be used as an enticement to the
prejudice of local-hires. The local-hires perform the same services as foreign-hires and they ought to be paid the same
salaries as the latter. For the same reason, the "dislocation factor" and the foreign-hires' limited tenure also cannot serve
as valid bases for the distinction in salary rates. The dislocation factor and limited tenure affecting foreign-hires are
adequately compensated by certain benefits accorded them which are not enjoyed by local-hires, such as housing,
transportation, shipping costs, taxes and home leave travel allowances.
The Constitution enjoins the State to "protect the rights of workers and promote their welfare,"[25] "to afford labor full
protection."[26] The State, therefore, has the right and duty to regulate the relations between labor and capital.[27]
These relations are not merely contractual but are so impressed with public interest that labor contracts, collective
bargaining agreements included, must yield to the common good.[28] Should such contracts contain stipulations that
are contrary to public policy, courts will not hesitate to strike down these stipulations.
In this case, we find the point-of-hire classification employed by respondent School to justify the distinction in the salary
rates of foreign-hires and local hires to be an invalid classification. There is no reasonable distinction between the
services rendered by foreign-hires and local-hires. The practice of the School of according higher salaries to foreign-hires
contravenes public policy and, certainly, does not deserve the sympathy of this Court.
We agree, however, that foreign-hires do not belong to the same bargaining unit as the local-hires.
A bargaining unit is "a group of employees of a given employer, comprised of all or less than all of the entire body of
employees, consistent with equity to the employer indicate to be the best suited to serve the reciprocal rights and duties
of the parties under the collective bargaining provisions of the law."[29] The factors in determining the appropriate
collective bargaining unit are (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the employees'
interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial
Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status.[30] The basic test of
an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination which will best assure to
all employees the exercise of their collective bargaining rights.[31]
It does not appear that foreign-hires have indicated their intention to be grouped together with local-hires for purposes
of collective bargaining. The collective bargaining history in the School also shows that these groups were always
treated separately. Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreign-hires perform
similar functions under the same working conditions as the local-hires, foreign-hires are accorded certain benefits not
granted to local-hires. These benefits, such as housing, transportation, shipping costs, taxes, and home leave travel
allowance, are reasonably related to their status as foreign-hires, and justify the exclusion of the former from the latter. To
include foreign-hires in a bargaining unit with local-hires would not assure either group the exercise of their respective
collective bargaining rights.
WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN PART. The Orders of the Secretary of
Labor and Employment dated June 10, 1996 and March 19, 1997, are hereby REVERSED and SET ASIDE insofar as they
uphold the practice of respondent School of according foreign-hires higher salaries than local-hires.
SO ORDERED.
72
Naa nakay digest ani !!!!!!!
BELYCA CORPORATION, petitioner,
vs.
DIR. PURA FERRER CALLEJA, LABOR RELATIONS, MANILA, MINISTRY OF LABOR AND EMPLOYMENT; MED-ARBITER, RODOLFO
S. MILADO, MINISTRY OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 10 AND ASSOCIATED LABOR UNION (ALU-
TUCP), MINDANAO REGIONAL OFFICE, CAGAYAN DE ORO CITY, respondents.
Soriano and Arana Law Offices for petitioner.
The Solicitor General for public respondent.
Francisco D. Alas for respondent Associated Labor Unions-TUCP.
PARAS, J.:
This is a petition for certiorari and prohibition with preliminary injunction seeking to annul or to set aside the resolution of
the Bureau of Labor Relations dated November 24, 1986 and denying the appeal, and the Bureau's resolution dated
January 13, 1987 denying petitioner's motion for reconsideration.
The dispositive portion of the questioned resolution dated November 24, 1986 (Rollo, p. 4) reads as follows:
WHEREFORE, in view of all the foregoing considerations, the Order is affirmed and the appeal therefrom denied.
Let, therefore, the pertinent records of the case be remanded to the office of origin for the immediate conduct of the
The dispositive portion of the resolution dated January 13, 1987 (Rollo, p. 92) reads, as follows:
WHEREFORE, the Motion for Reconsideration filed by respondent Belyca Corporation (Livestock Agro-Division) is hereby
dismissed for lack of merit and the Bureau's Resolution dated 24 November 1986 is affirmed. Accordingly, let the records
of this case be immediately forwarded to the Office of origin for the holding of the certification elections.
No further motion shall hereafter be entertained.
The antecedents of the case are as follows:
On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP, a legitimate labor organization duly registered
with the Ministry of Labor and Employment under Registration Certificate No. 783-IP, filed with the Regional Office No. 10,
Ministry of Labor and Employment at Cagayan de Oro City, a petition for direct certification as the sole and exclusive
bargaining agent of all the rank and file employees/workers of Belyca Corporation (Livestock and Agro-Division), a duly
organized, registered and existing corporation engaged in the business of poultry raising, piggery and planting of
agricultural crops such as corn, coffee and various vegetables, employing approximately 205 rank and file
employees/workers, the collective bargaining unit sought in the petition, or in case of doubt of the union's majority
representation, for the issuance of an order authorizing the immediate holding of a certification election (Rollo, p. 18).
Although the case was scheduled for hearing at least three times, no amicable settlement was reached by the parties.
During the scheduled hearing of July 31, 1986 they, however, agreed to submit simultaneously their respective position
papers on or before August 11, 1986 (rollo. p. 62).
Petitioner ALU-TUCP, private respondent herein, in its petition and position paper alleged, among others, (1) that there is
no existing collective bargaining agreement between the respondent employer, petitioner herein, and any other
existing legitimate labor unions; (2) that there had neither been a certification election conducted in the proposed
bargaining unit within the last twelve (12) months prior to the filing of the petition nor a contending union requesting for
certification as the. sole and exclusive bargaining representative in the proposed bargaining unit; (3) that more than a
majority of respondent employer's rank-and-file employees/workers in the proposed bargaining unit or one hundred
thirty-eight (138) as of the date of the filing of the petition, have signed membership with the ALU-TUCP and have
expressed their written consent and authorization to the filing of the petition; (4) that in response to petitioner union's two
letters to the proprietor/ General Manager of respondent employer, dated April 21, 1986 and May 8, 1 986, requesting for
direct recognition as the sole and exclusive bargaining agent of the rank-and-file workers, respondent employer has
locked out 119 of its rank-and-file employees in the said bargaining unit and had dismissed earlier the local union
president, vice-president and three other active members of the local unions for which an unfair labor practice case was
73
filed by petitioner union against respondent employer last July 2, 1986 before the NLRC in Cagayan de Oro City (Rollo,
pp. 18; 263).<äre||anº•1àw>
Respondent employer, on the other hand, alleged in its position paper, among others, (1) that due to the nature of its
business, very few of its employees are permanent, the overwhelming majority of which are seasonal and casual and
regular employees; (2) that of the total 138 rank-and-file employees who authorized, signed and supported the filing of
the petition (a) 14 were no longer working as of June 3, 1986 (b) 4 resigned after June, 1986 (c) 6 withdrew their
membership from petitioner union (d) 5 were retrenched on June 23, 1986 (e) 12 were dismissed due to malicious
insubordination and destruction of property and (f) 100 simply abandoned their work or stopped working; (3) that the
128 incumbent employees or workers of the livestock section were merely transferred from the agricultural section as
replacement for those who have either been dismissed, retrenched or resigned; and (4) that the statutory requirement
for holding a certification election has not been complied with by the union (Rollo, p. 26).
The Labor Arbiter granted the certification election sought for by petitioner union in his order dated August 18, 1986
(Rollo, p. 62).
On February 4, 1987, respondent employer Belyca Corporation, appealed the order of the Labor Arbiter to the Bureau of
Labor Relations in Manila (Rollo, p. 67) which denied the appeal (Rollo, p. 80) and the motion for reconsideration (Rollo,
p. 92). Thus, the instant petition received in this Court by mail on February 20, 1987 (Rollo, p. 3).
In the resolution of March 4, 1987, the Second Division of this Court required respondent Union to comment on the
petition and issued a temporary restraining order (,Rollo, p. 95).
Respondent union filed its comment on March 30, 1987 (Rollo, p. 190); public respondents filed its comment on April 8,
1987 (Rollo, p. 218).
On May 4, 1987, the Court resolved to give due course to the petition and to require the parties to submit their respective
memoranda within twenty (20) days from notice (Rollo, p. 225).
The Office of the Solicitor General manifested on June 11, 1987 that it is adopting the comment for public respondents as
its memorandum (Rollo, p. 226); memorandum for respondent ALU was filed on June 30, 1987 (Rollo, p. 231); and
memorandum for petitioner, on July 30, 1987 (Rollo, p. 435).
The issues raised in this petition are:
WHETHER OR NOT THE PROPOSED BARGAINING UNIT IS AN APPROPRIATE BARGAINING UNIT.
II
WHETHER OR NOT THE STATUTORY REQUIREMENT OF 30% (NOW 20%) OF THE EMPLOYEES IN THE PROPOSED BARGAINING
UNIT, ASKING FOR A CERTIFICATION ELECTION HAD BEEN STRICTLY COMPLIED WITH.
In the instant case, respondent ALU seeks direct certification as the sole and exclusive bargaining agent of all the rank-
and-file workers of the livestock and agro division of petitioner BELYCA Corporation (Rollo, p. 232), engaged in piggery,
poultry raising and the planting of agricultural crops such as corn, coffee and various vegetables (Rollo, p. 26). But
petitioner contends that the bargaining unit must include all the workers in its integrated business concerns ranging from
piggery, poultry, to supermarts and cinemas so as not to split an otherwise single bargaining unit into fragmented
bargaining units (Rollo, p. 435).<äre||anº•1àw>
The Labor Code does not specifically define what constitutes an appropriate collective bargaining unit. Article 256 of
the Code provides:
Art. 256. Exclusive bargaining representative.—The labor organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit shall be exclusive representative of the employees in such unit
for the purpose of collective bargaining. However, an individual employee or group of employee shall have the right at
any time to present grievances to their employer.
According to Rothenberg, a proper bargaining unit maybe said to be a group of employees of a given employer,
comprised of all or less than all of the entire body of employees, which the collective interests of all the employees,
consistent with equity to the employer, indicate to be best suited to serve reciprocal rights and duties of the parties
under the collective bargaining provisions of the law (Rothenberg in Labor Relations, p. 482).
74
This Court has already taken cognizance of the crucial issue of determining the proper constituency of a collective
bargaining unit.
Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc. (103 Phil 1103 [1958]) are:
"(1) will of employees (Glove Doctrine); (2) affinity and unity of employee's interest, such as substantial similarity of work
and duties or similarity of compensation and working conditions; (3) prior collective bargaining history; and (4)
employment status, such as temporary, seasonal and probationary employees".
Under the circumstances of that case, the Court stressed the importance of the fourth factor and sustained the trial
court's conclusion that two separate bargaining units should be formed in dealing with respondent company, one
consisting of regular and permanent employees and another consisting of casual laborers or stevedores. Otherwise
stated, temporary employees should be treated separately from permanent employees. But more importantly, this Court
laid down the test of proper grouping, which is community and mutuality of interest.
Thus, in a later case, (Alhambra Cigar and Cigarette Manufacturing Co. et al. v. Alhambra Employees' Association 107
Phil. 28 [1960]) where the employment status was not at issue but the nature of work of the employees concerned; the
Court stressed the importance of the second factor otherwise known as the substantial-mutual-interest test and found no
reason to disturb the finding of the lower Court that the employees in the administrative, sales and dispensary
departments perform work which has nothing to do with production and maintenance, unlike those in the raw leaf,
cigar, cigarette and packing and engineering and garage departments and therefore community of interest which
justifies the format or existence as a separate appropriate collective bargaining unit.
Still later in PLASLU v. CIR et al. (110 Phil. 180 [1960]) where the employment status of the employees concerned was
again challenged, the Court reiterating the rulings, both in Democratic Labor Association v. Cebu Stevedoring Co. Inc.
supra and Alhambra Cigar and Cigarette Co. et al. v. Alhambra Employees' Association (supra) held that among the
factors to be considered are: employment status of the employees to be affected, that is the positions and categories of
work to which they belong, and the unity of employees' interest such as substantial similarity of work and duties.
In any event, whether importance is focused on the employment status or the mutuality of interest of the employees
concerned "the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective bargaining rights (Democratic Labor
Association v. Cebu Stevedoring Co. Inc. supra)
Hence, still later following the substantial-mutual interest test, the Court ruled that there is a substantial difference
between the work performed by musicians and that of other persons who participate in the production of a film which
suffice to show that they constitute a proper bargaining unit. (LVN Pictures, Inc. v. Philippine Musicians Guild, 1 SCRA 132
[1961]).
Coming back to the case at bar, it is beyond question that the employees of the livestock and agro division of petitioner
corporation perform work entirely different from those performed by employees in the supermarts and cinema. Among
others, the noted difference are: their working conditions, hours of work, rates of pay, including the categories of their
positions and employment status. As stated by petitioner corporation in its position paper, due to the nature of the
business in which its livestock-agro division is engaged very few of its employees in the division are permanent, the
overwhelming majority of which are seasonal and casual and not regular employees (Rollo, p. 26). Definitely, they have
very little in common with the employees of the supermarts and cinemas. To lump all the employees of petitioner in its
integrated business concerns cannot result in an efficacious bargaining unit comprised of constituents enjoying a
community or mutuality of interest. Undeniably, the rank and file employees of the livestock-agro division fully constitute
a bargaining unit that satisfies both requirements of classification according to employment status and of the substantial
similarity of work and duties which will ultimately assure its members the exercise of their collective bargaining rights.
II
It is undisputed that petitioner BELYCA Corporation (Livestock and Agro Division) employs more or less two hundred five
(205) rank-and-file employees and workers. It has no existing duly certified collective bargaining agreement with any
legitimate labor organization. There has not been any certification election conducted in the proposed bargaining unit
within the last twelve (12) months prior to the filing of the petition for direct certification and/or certification election with
the Ministry of Labor and Employment, and there is no contending union requesting for certification as the sole and
exclusive bargaining representative in the proposed bargaining unit.
The records show that on the filing of the petition for certification and/or certification election on June 3, 1986; 124
employees or workers which are more than a majority of the rank-and-file employees or workers in the proposed
bargaining unit had signed membership with respondent ALU-TUCP and had expressed their written consent and
authorization to the filing of the petition. Thus, the Labor Arbiter ordered the certification election on August 18, 1986 on a
finding that 30% of the statutory requirement under Art. 258 of the Labor Code has been met.
75
But, petitioner corporation contends that after June 3, 1986 four (4) employees resigned; six (6) subsequently withdrew
their membership; five (5) were retrenched; twelve (12) were dismissed for illegally and unlawfully barricading the
entrance to petitioner's farm; and one hundred (100) simply abandoned their work.
Petitioner's claim was however belied by the Memorandum of its personnel officer to the 119 employees dated July 28,
1986 showing that the employees were on strike, which was confirmed by the finding of the Bureau of Labor Relations to
the effect that they went on strike on July 24, 1986 (Rollo, p. 419). Earlier the local union president, Warrencio Maputi; the
Vice-president, Gilbert Redoblado and three other active members of the union Carmen Saguing, Roberto Romolo and
Iluminada Bonio were dismissed and a complaint for unfair labor practice, illegal dismissal etc. was filed by the Union in
their behalf on July 2, 1986 before the NLRC of Cagayan de Oro City (Rollo, p. 415).<äre||anº•1àw> The complaint was
amended on August 20, 1986 for respondent Union to represent Warrencio Maputi and 137 others against petitioner
corporation and Bello Casanova President and General Manager for unfair labor practice, illegal dismissal, illegal
lockout, etc. (Rollo, p. 416).
Under Art. 257 of the Labor Code once the statutory requirement is met, the Director of Labor Relations has no choice
but to call a certification election (Atlas Free Workers Union AFWU PSSLU Local v. Noriel, 104 SCRA 565 [1981]; Vismico
Industrial Workers Association (VIWA) v. Noriel, 131 SCRA 569 [1984]) It becomes in the language of the New Labor Code
"Mandatory for the Bureau to conduct a certification election for the purpose of determining the representative of the
employees in the appropriate bargaining unit and certify the winner as the exclusive bargaining representative of all
employees in the unit." (Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de Filipinas v. Noriel, 72 SCRA
24 [1976]; Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA 414 [1977]); more so when there is no existing collective
bargaining agreement. (Samahang Manggagawa Ng Pacific Mills, Inc. v. Noriel, 134 SCRA 152 [1985]); and there has
not been a certification election in the company for the past three years (PLUM Federation of Industrial and Agrarian
Workers v. Noriel, 119 SCRA 299 [1982]) as in the instant case.
It is significant to note that 124 employees out of the 205 employees of the Belyca Corporation have expressed their
written consent to the certification election or more than a majority of the rank and file employees and workers; much
more than the required 30% and over and above the present requirement of 20% by Executive Order No. 111 issued on
December 24, 1980 and applicable only to unorganized establishments under Art. 257, of the Labor Code, to which the
BELYCA Corporation belong (Ass. Trade Unions (ATU) v. Trajano, G.R. No. 75321, June 20, 1988).) More than that, any
doubt cast on the authenticity of signatures to the petition for holding a certification election cannot be a bar to its
being granted (Filipino Metals Corp. v. Ople 107 SCRA 211 [1981]). Even doubts as to the required 30% being met warrant
holding of the certification election (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119 SCRA 299 [1982]).
In fact, once the required percentage requirement has been reached, the employees' withdrawal from union
membership taking place after the filing of the petition for certification election will not affect said petition. On the
contrary, the presumption arises that the withdrawal was not free but was procured through duress, coercion or for a
valuable consideration (La Suerte Cigar and Cigarette Factory v. Director of the Bureau of Labor Relations, 123 SCRA 679
[1983]). Hence, the subsequent disaffiliation of the six (6) employees from the union will not be counted against or
deducted from the previous number who had signed up for certification elections Vismico Industrial Workers Association
(VIWA) v. Noriel 131 SCRA 569 [1984]).<äre||anº•1àw> Similarly, until a decision, final in character, has been issued
declaring the strike illegal and the mass dismissal or retrenchment valid, the strikers cannot be denied participation in the
certification election notwithstanding, the vigorous condemnation of the strike and the fact that the picketing were
attended by violence. Under the foregoing circumstances, it does not necessarily follow that the strikers in question are
no longer entitled to participate in the certification election on the theory that they have automatically lost their jobs.
(Barrera v. CIR, 107 SCRA 596 [1981]). For obvious reasons, the duty of the employer to bargain collectively is nullified if
the purpose of the dismissal of the union members is to defeat the union in the consent requirement for certification
election. (Samahang Manggagawa Ng Via Mare v. Noriel, 98 SCRA 507 [1980]). As stressed by this Court, the holding of
a certification election is a statutory policy that should not be circumvented. (George and Peter Lines Inc. v. Associated
Labor Unions (ALU), 134 SCRA 82 [1986]).
Finally, as a general rule, a certification election is the sole concern of the workers. The only exception is where the
employer has to file a petition for certification election pursuant to Art. 259 of the Labor Code because the latter was
requested to bargain collectively. But thereafter the role of the employer in the certification process ceases. The
employer becomes merely a bystander (Trade Union of the Phil. and Allied Services (TUPAS) v. Trajano, 120 SCRA 64
[1983]).
There is no showing that the instant case falls under the above mentioned exception. However, it will be noted that
petitioner corporation from the outset has actively participated and consistently taken the position of adversary in the
petition for direct certification as the sole and exclusive bargaining representative and/or certification election filed by
respondent Associated Labor Unions (ALU)-TUCP to the extent of filing this petition for certiorari in this Court. Considering
that a petition for certification election is not a litigation but a mere investigation of a non-adversary character to
determining the bargaining unit to represent the employees (LVN Pictures, Inc. v. Philippine Musicians Guild, supra;
Bulakena Restaurant & Caterer v. Court of Industrial Relations, 45 SCRA 88 [1972]; George Peter Lines, Inc. v. Associated
Labor Union, 134 SCRA 82 [1986]; Tanduay Distillery Labor Union v. NLRC, 149 SCRA 470 [1987]), and its only purpose is to
give the employees true representation in their collective bargaining with an employer (Confederation of Citizens Labor
76
Unions CCLU v. Noriel, 116 SCRA 694 [1982]), there appears to be no reason for the employer's objection to the formation
of subject union, much less for the filing of the petition for a certification election.
PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit (b) resolution of the Bureau of Labor Relations dated
Nov. 24, 1986 is AFFIRMED; and the temporary restraining order issued by the Court on March 4, 1987 is LIFTED
permanently.
SO ORDERED.
ME-SHURN CORPORATION AND SAMMY CHOU, petitioners, vs. ME-SHURN WORKERS UNION-FSM AND ROSALINA* CRUZ,
respondents.
DECISION
PANGANIBAN, J.:
To justify the closure of a business and the termination of the services of the concerned employees, the law requires the
employer to prove that it suffered substantial actual losses. The cessation of a companys operations shortly after the
organization of a labor union, as well as the resumption of business barely a month after, gives credence to the
employees claim that the closure was meant to discourage union membership and to interfere in union activities. These
acts constitute unfair labor practices.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to annul the November 29, 2002
Decision[2] of the Court of Appeals (CA) in CA-GR SP No. 69675, the decretal portion of which reads:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the judgment must be, as it hereby is, AFFIRMED, and the present petition
DISMISSED for lack of merit. Costs shall be taxed against petitioners.[3]
The affirmed November 29, 2001 Decision[4] of the National Labor Relations Commission (NLRC), Third Division, disposed
as follows:
WHEREFORE, the decision appealed from is hereby SET ASIDE, and respondent Me-Shurn Corp. is hereby ordered to pay
the complainants who appeared in the proceedings conducted by the Labor Arbiter their full backwages from the date
their wages were withheld from them to the date of the finality of this decision.[5]
The Facts
On June 7, 1998, the regular rank and file employees of Me-Shurn Corporation organized Me-Shurn Workers Union-FSM,
an affiliate of the February Six Movement (FSM).[6]Respondent union had a pending application for registration with the
Bureau of Labor Relations (BLR) through a letter dated June 11, 1998.[7]
Ten days later, or on June 17, 1998, petitioner corporation started placing on forced leave all the rank and file
employees who were members of the unions bargaining unit.[8]
On June 23, 1998, respondent union filed a Petition for Certification Election with the Med-Arbitration Unit of the
Department of Labor and Employment (DOLE), Regional Office No. 3.[9]
Instead of filing an answer to the Petition, the corporation filed on July 27, 1998, a comment stating that it would
temporarily lay off employees and cease operations, on account of its alleged inability to meet the export quota
required by the Board of Investment.[10]
While the Petition was pending, 184 union members allegedly submitted a retraction/withdrawal thereof on July 14, 1998.
As a consequence, the med-arbiter dismissed the Petition. On May 7, 1999, Department of Labor and Employment
(DOLE) Undersecretary Rosalinda Dimapilis-Baldoz granted the unions appeal and ordered the holding of a certification
election among the rank and file employees of the corporation.[11]
Meanwhile, on August 4, 1998, respondent union filed a Notice of Strike against petitioner corporation on the ground of
unfair labor practice (illegal lockout and union busting). This matter was docketed as Case No. NCMB-RO3-BEZ-NZ-08-42-
98.[12]
77
On August 31, 1998, Chou Fang Kuen (alias Sammy Chou, the other petitioner herein) and Raquel Lamayra (the Filipino
administrative manager of the corporation) imposed a precondition for the resumption of operation and the rehiring of
laid off workers. He allegedly required the remaining union officers to sign an Agreement containing a guarantee that
upon their return to work, no union or labor organization would be organized. Instead, the union officers were to serve as
mediators between labor and management.[13] After the signing of the Agreement, the operations of the corporation
resumed in September 1998.[14]
On November 5, 1998, the union reorganized and elected a new set of officers. Respondent Rosalina Cruz was elected
president.[15] Thereafter, it filed two Complaints docketed as NLRC Case Nos. RAB-III-11-9586-98 and RAB-III-09-0322-99.
These cases were consolidated and assigned to Labor Arbiter Henry Isorena for compulsory arbitration. Respondents
charged petitioner corporation with unfair labor practice, illegal dismissal, underpayment of wages and deficiency in
separation pay, for which they prayed for damages and attorneys fees.
The corporation countered that because of economic reversals, it was compelled to close and cease its operations to
prevent serious business losses; that under Article 283 of the Labor Code, it had the right to do so; that in August 1998, it
had paid its 342 laid off employees separation pay and benefits in the total amount of P1,682,863.88; and that by virtue
of these payments, the cases had already become moot and academic. It also averred that its resumption of
operations in September 1998 had been announced and posted at the Bataan Export Processing Zone, and that some
of the former employees had reapplied.
Petitioner corporation questioned the legality of the representation of respondent union. Allegedly, it was not the latter,
but the Me-Shurn Independent Employees Union -- with Christopher Malit as president -- that was recognized as the
existing exclusive bargaining agent of the rank and file employees and as the one that had concluded a Collective
Bargaining Agreement (CBA) with the corporation on May 19, 1999.[16] Hence, the corporation asserted that
Undersecretary Dimapilis-Baldozs Decision ordering the holding of a certification election had become moot and
academic.
On the other hand, respondents contested the legality of the formation of the Me-Shurn Independent Employees Union
and petitioners recognition of it as the exclusive bargaining agent of the employees. Respondents argued that the
pendency of the representation issue before the DOLE had barred the alleged recognition of the aforementioned union.
Labor Arbiter Isorena dismissed the Complaints for lack of merit. He ruled that (1) actual and expected losses justified the
closure of petitioner corporation and its dismissal of its employees; (2) the voluntary acceptance of separation pay by
the workers precluded them from questioning the validity of their dismissal; and (3) the claim for separation pay lacked
factual basis.[17]
On appeal, the NLRC reversed the Decision of Labor Arbiter Isorena. Finding petitioners guilty of unfair labor practice, the
Commission ruled that the closure of the corporation shortly after respondent union had been organized, as well as the
dismissal of the employees, had been effected under false pretenses. The true reason therefor was allegedly to bar the
formation of the union. Accordingly, the NLRC held that the illegally dismissed employees were entitled to back
wages.[18]
After the denial of their Motion for Reconsideration,[19] petitioners elevated the cases to the CA via a Petition for
Certiorari under Rule 65.[20] They maintained that the NLRC had committed grave abuse of discretion and serious errors
of fact and law in reversing the Decision of the labor arbiter and in finding that the corporations cessation of operations
in August 1998 had been tainted with unfair labor practice.
Petitioners added that respondent unions personality to represent the affected employees had already been
repudiated by the workers themselves in the certification election conducted by the DOLE. Pursuant to the Decision of
Undersecretary Dimapilis-Baldoz in Case No. RO3 00 9806 RU 001, a certification election was held on September 7, 2000,
at the premises of petitioner corporation under the supervision of the DOLE. The election had the following results:
Me Shurn Workers Union-FSM 1
No Union 135
Spoiled 2
Challenged 52
Total Votes Cast 190[21]
Ruling of the Court of Appeals

78
The CA dismissed the Petition because of the failure of petitioners to submit sufficient proof of business losses. It found
that they had wanted merely to abort or frustrate the formation of respondent union. The burden of proving that the
dismissal of the employees was for a valid or authorized cause rested on the employer.
The appellate court further affirmed the unions legal personality to represent the employees. It held that (1) registration
was not a prerequisite to the right of a labor organization to litigate; and (2) the cases may be treated as representative
suits, with respondent union acting for the benefit of all its members.
Hence, this Petition.[22]
Issues
In their Supplemental Memorandum, petitioners submit the following issues for our consideration:
(1) Whether the dismissal of the employees of petitioner Meshurn Corporation is for an authorized cause, and
(2) Whether respondents can maintain a suit against petitioners.[23]
The Courts Ruling
The Petition lacks merit.
First Issue:
Validity of the Dismissal
The reason invoked by petitioners to justify the cessation of corporate operations was alleged business losses. Yet, other
than generally referring to the financial crisis in 1998 and to their supposed difficulty in obtaining an export quota,
interestingly, they never presented any report on the financial operations of the corporation during the period before its
shutdown. Neither did they submit any credible evidence to substantiate their allegation of business losses.
Basic is the rule in termination cases that the employer bears the burden of showing that the dismissal was for a just or
authorized cause. Otherwise, the dismissal is deemed unjustified. Apropos this responsibility, petitioner corporation should
have presented clear and convincing evidence[24] of imminent economic or business reversals as a form of affirmative
defense in the proceedings before the labor arbiter or, under justifiable circumstances, even on appeal with the NLRC.
However, as previously stated, in all the proceedings before the two quasi-judicial bodies and even before the CA, no
evidence was submitted to show the corporations alleged business losses. It is only now that petitioners have belatedly
submitted the corporations income tax returns from 1996 to 1999 as proof of alleged continued losses during those years.
Again, elementary is the principle barring a party from introducing fresh defenses and facts at the appellate stage.[25]
This Court has ruled that matters regarding the financial condition of a company -- those that justify the closing of its
business and show the losses in its operations -- are questions of fact that must be proven below.[26] Petitioners must bear
the consequence of their neglect. Indeed, their unexplained failure to present convincing evidence of losses at the early
stages of the case clearly belies the credibility of their present claim.[27]
Obviously, on the basis of the evidence -- or the lack thereof -- the appellate court cannot be faulted for ruling that the
NLRC did not gravely abuse its discretion in finding that the closure of petitioner corporation was not due to alleged
financial losses.
At any rate, even if we admit these additional pieces of evidence, the circumstances surrounding the cessation of
operations of the corporation reveal the doubtful character of its supposed financial reason.
First, the claim of petitioners that they were compelled to close down the company to prevent further losses is belied by
their resumption of operations barely a month after the corporation supposedly folded up.
Moreover, petitioners attribute their loss mainly to their failure to obtain an export quota from the Garments and Textile
Export Board (GTEB). Yet, as pointed out by respondents, the corporation resumed its business without first obtaining an
export quota from the GTEB. Besides, these export quotas pertain only to business with companies in the United States
and do not preclude the corporation from exporting its products to other countries. In other words, the business that
petitioner corporation engaged in did not depend entirely on exports to the United States.
If it were true that these export quotas constituted the determining and immediate cause of the closure of the
corporation, then why did it reopen for business barely a month after the alleged cessation of its operations?
79
Second, the Statements of Income and Deficit for the years 1996 and 1997 show that at the beginning of 1996, the
corporation had a deficit of P2,474,505. Yet, the closure was effected only after more than a year from such year-end
deficit; that is, in the middle of 1998, shortly after the formation of the union.
On the other hand, the Statement of Income and Deficit for the year 1998 does not reflect the extent of the losses that
petitioner corporation allegedly suffered in the months prior to its closure in July/August 1998. This document is not an
adequate and competent proof of the alleged losses, considering that it resumed operations in the succeeding month
of September.
Upon careful study of the evidence, it is clear that the corporation was more profitable in 1997 than in 1996. By the end
of 1997, it had a net income of P1,816,397.
If petitioners were seriously desirous of averting losses, why did the corporation not close in 1996 or earlier, when it began
incurring deficits? They have not satisfactorily explained why the workers dismissal was effected only after the formation
of respondent union in September 1998.
We also take note of the allegation that after several years of attempting to organize a union, the employees finally
succeeded on June 7, 1998. Ten days later, without any valid notice, all of them were placed on forced leave, allegedly
because of lack of quota.
All these considerations give credence to their claim that the closure of the corporation was a mere subterfuge, a
systematic approach intended to dampen the enthusiasm of the union members.[28]
Third, as a condition for the rehiring of the employees, the union officers were made to sign an agreement that they
would not form any union upon their return to work. This move was contrary to law.
Fourth, notwithstanding the Petition for Certification Election filed by respondents and despite knowledge of the
pendency thereof, petitioners recognized a newly formed union and hastily signed with it an alleged Collective
Bargaining Agreement. Their preference for the new union was at the expense of respondent union. Moncada Bijon
Factory v. CIR[29] held that an employer could be held guilty of discrimination, even if the preferred union was not
company-dominated.
Fifth, petitioners were not able to prove their allegation that some of the employees contracts had expired even before
the cessation of operations. We find this claim inconsistent with their position that all 342 employees of the corporation
were paid their separation pay plus accrued benefits in August 1998.
Sixth, proper written notices of the closure were not sent to the DOLE and the employees at least one month before the
effectivity date of the termination, as required under the Labor Code. Notice to the DOLE is mandatory to enable the
proper authorities to ascertain whether the closure and/or dismissals were being done in good faith and not just as a
pretext for evading compliance with the employers just obligations to the affected employees.[30] This requirement is
intended to protect the workers right to security of tenure. The absence of such requirement taints the dismissal.
All these factors strongly give credence to the contention of respondents that the real reason behind the shutdown of
the corporation was the formation of their union. Note that, to constitute an unfair labor practice, the dismissal need not
entirely and exclusively be motivated by the unions activities or affiliations. It is enough that the discrimination was a
contributing factor.[31] If the basic inspiration for the act of the employer is derived from the affiliation or activities of the
union, the formers assignment of another reason, no matter how seemingly valid, is unavailing.[32]
Concededly, the determination to cease operations is a management prerogative that the State does not usually
interfere in. Indeed, no business can be required to continue operating at a loss, simply to maintain the workers in
employment. That would be a taking of property without due process of law. But where it is manifest that the closure is
motivated not by a desire to avoid further losses, but to discourage the workers from organizing themselves into a union
for more effective negotiations with management, the State is bound to intervene.[33]
Second Issue:
Legal Personality of Respondent Union
Neither are we prepared to believe petitioners argument that respondent union was not legitimate. It should be pointed
out that on June 29, 1998, it filed a Petition for Certification Election. While this Petition was initially dismissed by the med-
arbiter on the basis of a supposed retraction, note that the appeal was granted and that Undersecretary Dimapilis-
Baldoz ordered the holding of a certification election.
The DOLE would not have entertained the Petition if the union were not a legitimate labor organization within the
meaning of the Labor Code. Under this Code, in an unorganized establishment, only a legitimate union may file a
80
petition for certification election.[34] Hence, while it is not clear from the record whether respondent union is a legitimate
organization, we are not readily inclined to believe otherwise, especially in the light of the pro-labor policies enshrined in
the Constitution and the Labor Code.[35]
Verily, the union has the requisite personality to sue in its own name in order to challenge the unfair labor practice
committed by petitioners against it and its members.[36] It would be an unwarranted impairment of the right to self-
organization through formation of labor associations if thereafter such collective entities would be barred from instituting
action in their representative capacity.[37]
Finally, in view of the discriminatory acts committed by petitioners against respondent union prior to the holding of the
certification election on September 27, 2000 -- acts that included their immediate grant of exclusive recognition to
another union as a bargaining agent despite the pending Petition for certification election -- the results of that election
cannot be said to constitute a repudiation by the affected employees of the unions right to represent them in the
present case.
WHEREFORE, the Petition is DENIED, and the assailed Dec
ASSOCIATED LABOR UNIONS (ALU), petitioner,
vs.
HON. PURA FERRER-CALLEJA, DIRECTOR, BUREAU OF LABOR RELATIONS, DEPARTMENT OF LABOR AND EMPLOYMENT AND
NATIONAL FEDERATION OF LABOR (NFL), respondents.
GANCAYCO, J.:
This is a petition for the issuance of the extraordinary remedy of certiorari for the reversal of the Decision 1 of the Director
of Bureau of Labor Relations ordering the holding of a certification election among the workers of Soriano Fruits
Corporation.
The antecedent facts of the case are as follows:
Petitioner Associated Labor Unions, ALU for brevity, had a collective bargaining agreement with the employer Soriano
Fruits Corporation which expired on September 30,1987. Prior to the said date, or on June 22, 1987, petitioner and the
employer signed a collective bargaining agreement which was to take effect on September 1, 1987 and was to remain
so until August 31, 1990. The said collective bargaining agreement was unanimously approved and ratified by the
members of the bargaining unit.
However, on August 10, 1987, private respondent National Federation of Labor (NFL), filed a petition for certification
election questioning the majority status of the incumbent union, pursuant to Executive Order 111 and its Implementing
Rules, there being more than majority of its members who have expressed doubts on the sincerity of the incumbent
union. 2 Acting on the said petition the Med-Arbiter scheduled a hearing on August 21, 1987 to determine the majority
status of herein petitioner but the NFL representative failed to appear despite due notice. Consequently, the hearing
was reset to September 8, 1987 to give NFL an opportunity to substantiate its claim but again, the NFL was not
represented. Thereafter, the parties were asked to submit their position papers. To bolster its claim, ALU submitted several
petitions signed by members of the bargaining unit to dismiss any petition filed by any union which seeks to question the
majority status of the incumbent union. The signatories to the petition also reaffirmed its loyalty to ALU.
On October 2, 1987, the Med-Arbiter promulgated an Order 3 dismissing the petition for certification election on the
ground of failure to prosecute. An appeal to the Bureau of Labor Relations however, proved fruitful. On December 22,
1987 the respondent Director of the Bureau of Labor Relations held that the Med-Arbiter erred in dismissing the petition
for certification election. The dispositive portion of the decision reads thus:
WHEREFORE in view of the foregoing, the appeal of petitioner, National Federation of Labor is hereby given due course
and the Order of the Med-Arbiter is set aside. Let, therefore a certification election proceed at Soriano Fruits
Corporation, after a pre-election conference to thresh out the list of eligible voters, with the following choices:
1. National Federation of Labor (NFL);

81
2. Associated Labor Unions (ALU).
SO ORDERED. 4
ALU sought a reconsideration of the above-cited decision but to no avail. Hence, the instant petition for certiorari.
Petitioner alleges that in granting the petition for certification election, the respondent Director acted with grave abuse
of discretion amounting to lack or in excess of jurisdiction in that:
I. THE HONORABLE DIRECTOR MISSED THE LEGAL INTENT OF ARTICLE 257 AS AMENDED BY EXECUTIVE ORDER 111.
II. THE HONORABLE DIRECTOR ERRED IN CLAIMING THAT THE PETITION IS SUPPORTED BY MORE THAN TWENTY (20%) OF THE
RANK AND FILE.
III. THE RATIFICATION OF THE CONCLUDED COLLECTIVE BARGAINING AGREEMENT RENDERS THE CERTIFICATION ELECTION
MOOT AND ACADEMIC.
This Court finds the petition bereft of merit.
Petitioner hinges its claim on Art. 257 of the Labor Code which provides:
Art. 257. Petitions in unorganized establishments. In any establishment where there is no certified bargaining agent, the
petition for certification election filed by a legitimate labor organization shall be supported by the written consent of at
least twenty (20%) percent of all the employees in the bargaining unit. Upon receipt and verification of such petition, the
Med-Arbiter shall automatically order the conduct of a certification election.
But this provision finds no application in the case at bar primarily because it applies to unorganized establishments. For
the said provision to apply, the establishment concerned must have no certified bargaining agent. This is not the case in
the present petition where there was a collective bargaining agreement entered into by the management of the
Soriano Fruits Corporation and ALU, the petitioner, which was then the bargaining agent. This Court however, finds that it
is Article 256 as amended by Executive Order 111 which must be considered in the resolution of the present petition. The
said article states:
Article 256. Representation Issues in Organized Establishments. In organized establishments, when a petition questioning
the majority status of the incumbent bargaining agent is filed before the Ministry within the sixty (60) day period before
the expiration of the collective bargaining agreement, the Med- Arbiter shall automatically order an election by secret
ballot to ascertain the will of the employees in the appropriate bargaining unit. (Emphasis supplied)
A review of the records of this case would confirm the fact that the petition for certification election filed by NFL on
August 10, 1987 was well within the prescribed sixty (60) day freedom period.
Petitioner however maintains that the respondent Director misconstrued the legal intent behind the above- cited
provision and that it should not have been given a literal interpretation. Petitioner insists further that the light of the
members of the bargaining unit to choose which union should represent them is not an absolute one since a prior
hearing must be had to ascertain the veracity of the allegations contained in the petition.
This argument is untenable.
The provision of Article 256 which provides that the Med-Arbiter shall automatically order an election is clear and leaves
no room for further interpretation. The mere filing of a petition for certification election within the freedom period is
sufficient basis for the respondent Director to order the holding of a certification election. The fact that NFL did not
appear during the hearings set by the Med-Arbiter is of no moment. As the Solicitor General correctly pointed out, there
is no prohibition on the conduct of hearings by the Med-Arbiter on the competing stands of the unions. Neither does the
law require the same to be held whereby the absence or presence therefrom of any union representative would affect
the petition for certification election. In fact, it is the denial of the petition for certification election grounded solely on
the absence of NFL in the scheduled hearings which is frowned upon by the law. This is consistent with the principle in
labor legislation that "certification proceedings is not a litigation in the sense in which the term is ordinarily understood,
but an investigation of non-adversary and fact finding character. As such, it is not bound by technical rules of evidence."
5
Petitioner suggests that to grant the petition for certification election would "open the floodgates to unbridled and
scrupulous (sic) petitions whose only objective is to prejudice the industrial peace and stability existing in the Company."
6 This Court believes however that the workers' choice regarding their representative who inevitably reflects and works
for their common interest is of paramount importance. This policy was lengthily explained in the concurring opinion of
then Chief Justice Fernando in the case of Confederation of Citizens Labor Unions (CCLU) vs. National Labor Relations
82
Commission 7 where he categorically stated that "the slightest doubt therefore cannot be entertained that what
possesses 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." 8
Petitioner next contends that the respondent Director erred in relying upon the claim of the respondent Union that the
petition for certification election is supported by more than twenty percent (20%) of the rank and file considering that
the said petition merely contained the lone signature of the NFL representative.
This averment is likewise unmeritorious.
Petitioner bases its argument again on Article 257 which prescribes the twenty percent (20%) requirement. But it must be
reiterated that the said requirement applies only to unorganized establishments. It is Article 256 instead which must be
applied. A perusal of the said Article would confirm the falsity of the claim of petitioner. Nowhere in the said provision
does it require the written consent of twenty percent (20%) of the employees in the bargaining unit. Hence, the issue of
whether or not the petition for certification election is supported by twenty percent (20%) of the bargaining unit
concerned is immaterial to the case at bar. What is essential is that the petition was filed during the sixty-day freedom
period.
The petition to dismiss the petition for certification elections 9 filed by NFL and signed by some 224 employees signifying
their satisfaction with the services of the incumbent union should not be given any weight at all. The possibility that the
workers were merely coerced to sign the petition such that they did so for fear of reprisal from the members of ALU is not
remote. However, this does not discount the possibility that the workers voluntarily signed the said petition. Whatever
reason the workers may have had for signing the same may be ascertained once a certification election is held. It is in
this democratic process that the workers are given the opportunity to freely choose, by secret ballot, who they want to
represent them. In this manner, the workers are free of any undue pressure which either competing union may exert
upon them.
Finally, the petitioner assails the decision of the respondent Director on the ground that "the ratification of the collective
bargaining agreement renders the certification election moot and academic." 10
This contention finds no basis in law.
The petitioner was obviously referring to the contract-bar rule where the law prohibits the holding of certification
elections during the lifetime of the collective bargaining agreement. Said agreement was hastily and prematurely
entered into apparently in an attempt to avoid the holding of a certification election. The records show that the old
collective bargaining agreement of the petitioner with Soriano Fruits Corporation was to expire on August 31, 1987.
However, three (3) months and eight (8) days before its expiry date, or on June 22, 1987, the petitioner renewed the
same with the consent and collaboration of management. The renewed agreement was then ratified by the members
of the bargaining unit and was thereafter sent to the Bureau of Labor Relations for certification. In the meantime, on
August 10, 1987 (21 days before the expiration of the old collective bargaining agreement on August 31, 1987) a petition
for certification election was filed by respondent union, NFL. From the foregoing facts, it is quite obvious that the
renewed agreement cannot constitute a bar to the instant petition for certification election for the very reason that the
same was not yet in existence when the petition for certification election was filed on August 10, 1987 inasmuch as the
same was to take effect only on September 1, 1987, after the old agreement expires on August 31, 1987.
In the case of Associated Trade Unions-ATU vs. Noriel, 11 this Court held that "it is indubitably clear from the facts
heretofore unfolded that management and petitioner herein proceeded with such indecent haste in renewing their
CBA way ahead of the sixty-day freedom period in their obvious desire to frustrate the will of the rank and file employees
in selecting their bargaining representative. To countenance the actuation of the company and the petitioner herein
would be violative of the employees constitutional right to self-organization. 12
The Solicitor General, in his comment, brought the attention of this Court to the fact that petitioner had violated the
provisions of Article 25413 when it renewed the collective bargaining agreement before the commencement of the
sixty-day freedom period. This Court does not subscribe to this view. What the aforecited rule prohibits is the modification
and alteration of the present collective bargaining agreement during its lifetime. In the present case, the alterations and
modifications were to take effect only on September 1, 1987, i.e., after the expiration of the old agreement. It must be
noted that the new agreement did not suspend the old one. Neither did it terminate nor modify the same. Petitioner
therefore did not commit any violation of Article 254 of the Labor Code, contrary to the allegations of the Solicitor
General.
However, it is apparent that certiorari does not lie in the instant petition for this Court does not see any substantial reason
to withhold the primordial right of workers to select their bargaining representative.
83
WHEREFORE, premises considered, the instant petition is DISMISSED for lack of merit. The temporary restraining order
issued by resolution of this Court of July 11, 1988 is hereby lifted and declared to be of no force and effect. The decision is
immediately executory. No costs.
SO ORDERED.
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 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 Labor 4
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
84
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.
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.
85
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
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.
86
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.
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.
87
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.
G.R. No. 142000 January 22, 2003
TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED, petitioner,
vs.
TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO, respondent.
CARPIO-MORALES, J.:
Before this Court on certiorari under Rule 45 is the petition of the Tagaytay Highlands International Golf Club
Incorporated (THIGCI) assailing the February 15, 2002 decision of the Court of Appeals denying its petition to annul the
Department of Labor and Employment (DOLE) Resolutions of November 12, 1998 and December 29, 1998.
On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)–Philippine Transport and General Workers
Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said to represent majority of the rank-
and-file employees of THIGCI, filed a petition for certification election before the DOLE Mediation-Arbitration Unit,
Regional Branch No. IV.
THIGCI, in its Comment1 filed on November 27, 1997, opposed THEU’s petition for certification election on the ground
that the list of union members submitted by it was defective and fatally flawed as it included the names and signatures
of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as employees of The Country
Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192 signatories to the petition, only 71
were actual rank-and-file employees of THIGCI.
THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees which it annexed2 to its Comment to
the petition for certification election. And it therein incorporated the following tabulation3 showing the number of
signatories to said petition whose membership in the union was being questioned as disqualified and the reasons for
disqualification:
# of Signatures
Reasons for Disqualification

88
13
Supervisors of THIGCI
Resigned employees of THIGCI
AWOL employees of THIGCI
53
Rank-and-file employees of The Country Club at Tagaytay Highlands, Inc.
14
Supervisors of The Country Club at Tagaytay Highlands, Inc.
Resigned employees of The Country Club at Tagaytay Highlands, Inc.
Terminated employees of The Country Club at Tagaytay Highlands, Inc.
AWOL employees of The Country Club at Tagaytay Highlands, Inc.

89
Signatures that cannot be deciphered
16
Names in list that were erased
Names with first names only
THIGCI also alleged that some of the signatures in the list of union members were secured through fraudulent and
deceitful means, and submitted copies of the handwritten denial and withdrawal of some of its employees from
participating in the petition.4Replying to THIGCI’s Comment, THEU asserted that it had complied with all the requirements
for valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE Department Order No. 9,
series of 1997,5 on account of which it was duly granted a Certification of Affiliation by DOLE on October 10, 1997;6 and
that Section 5, Rule V of said Department Order provides that the legitimacy of its registration cannot be subject to
collateral attack, and for as long as there is no final order of cancellation, it continues to enjoy the rights accorded to a
legitimate organization.
THEU thus concluded in its Reply7 that under the circumstances, the Med-Arbiter should, pursuant to Article 257 of the
Labor Code and Section 11, Rule XI of DOLE Department Order No. 09, automatically order the conduct of a
By Order of January 28, 1998, 8 DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election
among the rank-and-file employees of THIGCI in this wise, quoted verbatim:
We evaluated carefully this instant petition and we are of the opinion that it is complete in form and substance. In
addition thereto, the accompanying documents show that indeed petitioner union is a legitimate labor federation and
its local/chapter was duly reported to this Office as one of its affiliate local/chapter. Its due reporting through the
submission of all the requirements for registration of a local/chapter is a clear showing that it was already included in the
roster of legitimate labor organizations in this Office pursuant to Department Order No. 9 Series of 1997 with all the legal
right and personality to institute this instant petition. Pursuant therefore to the provisions of Article 257 of the Labor Code,
as amended, and its Implementing Rules as amended by Department Order No. 9, since the respondent’s establishment
is unorganized, the holding of a certification election is mandatory for it was clearly established that petitioner is a
legitimate labor organization. Giving due course to this petition is therefore proper and appropriate.9 (Emphasis
supplied)
Passing on THIGCI’s allegation that some of the union members are supervisory, resigned and AWOL employees or
employees of a separate and distinct corporation, the Med-Arbiter held that the same should be properly raised in the
exclusion-inclusion proceedings at the pre-election conference. As for the allegation that some of the signatures were
secured through fraudulent and deceitful means, he held that it should be coursed through an independent petition for
cancellation of union registration which is within the jurisdiction of the DOLE Regional Director. In any event, the Med-
90
Arbiter held that THIGCI failed to submit the job descriptions of the questioned employees and other supporting
documents to bolster its claim that they are disqualified from joining THEU.
THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set aside the said Med-
Arbiter’s Order and accordingly dismissed the petition for certification election on the ground that there is a "clear
absence of community or mutuality of interests," it finding that THEU sought to represent two separate bargaining units
(supervisory employees and rank-and-file employees) as well as employees of two separate and distinct corporate
entities.
Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-Baldoz, by authority of the DOLE
Secretary, issued DOLE Resolution of November 12, 199810 setting aside the June 4, 1998 Resolution dismissing the
petition for certification election. In the November 12, 1998 Resolution, Undersecretary Dimapilis-Baldoz held that since
THEU is a local chapter, the twenty percent (20%) membership requirement is not necessary for it to acquire legitimate
status, hence, "the alleged retraction and withdrawal of support by 45 of the 70 remaining rank-and-file members . . .
cannot negate the legitimacy it has already acquired before the petition;" that rather than disregard the legitimate
status already conferred on THEU by the Bureau of Labor Relations, the names of alleged disqualified supervisory
employees and employees of the Country Club, Inc., a separate and distinct corporation, should simply be removed
from the THEU’s roster of membership; and that regarding the participation of alleged resigned and AWOL employees
and those whose signatures are illegible, the issue can be resolved during the inclusion-exclusion proceedings at the pre-
election stage.
The records of the case were thus ordered remanded to the Office of the Med-Arbiter for the conduct of certification
election.
THIGCI’s Motion for Reconsideration of the November 12, 1998 Resolution having been denied by the DOLE
Undersecretary by Resolution of December 29, 1998,11 it filed a petition for certiorari before this Court which, by
Resolution of April 14, 1999,12 referred it to the Court of Appeals in line with its pronouncement in National Federation of
Labor (NFL) v. Hon. Bienvenido E. Laguesma, et al.,13 and in strict observance of the hierarchy of courts, as emphasized
in the case of St. Martin Funeral Home v. National Labor Relations Commission.14
By Decision of February 15, 2000,15 the Court of Appeals denied THIGCI’s Petition for Certiorari and affirmed the DOLE
Resolution dated November 12, 1998. It held that while a petition for certification election is an exception to the
innocent bystander rule, hence, the employer may pray for the dismissal of such petition on the basis of lack of mutuality
of interests of the members of the union as well as lack of employer-employee relationship following this Court’s ruling in
Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union et al.16 and Dunlop Slazenger
[Phils.] v. Hon. Secretary of Labor and Employment et al,17 petitioner failed to adduce substantial evidence to support its
allegations.
Hence, the present petition for certiorari, raising the following
"ISSUES/ASSIGNMENT OF ERRORS:
THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMER 1998 HOLDING THAT
SUPERVISORY EMPLOYEES AND NON-EMPLOYEES COULD SIMPLY BE REMOVED FROM APPELLEES ROSTER OF RANK-AND-
FILE MEMBERSHIP INSTEAD OF RESOLVING THE LEGITIMACY OF RESPONDENT UNION’S STATUS
91
THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMBER 1998 HOLDING THAT THE
DISQUALIFIED EMPLOYEES’ STATUS COULD READILY BE RESOLVED DURING THE INCLUSION AND EXCLUSION PROCEEDINGS
THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THAT THE ALLEGATIONS OF PETITIONER HAD BEEN DULY
PROVEN BY FAILURE OF RESPONDENT UNION TO DENY THE SAME AND BY THE SHEER WEIGHT OF EVIDENCE INTRODUCED BY
PETITIONER AND CONTAINED IN THE RECORDS OF THE CASE"18
The statutory authority for the exclusion of supervisory employees in a rank-and-file union, and vice-versa, is Article 245 of
the Labor Code, to wit:
Article 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. —
Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be
eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own.
While above-quoted Article 245 expressly prohibits supervisory employees from joining a rank-and-file union, it does not
provide what would be the effect if a rank-and-file union counts supervisory employees among its members, or vice-
versa.
Citing Toyota19 which held that "a labor organization composed of both rank-and-file and supervisory employees is no
labor organization at all," and the subsequent case of Progressive Development Corp. – Pizza Hut v. Ledesma20 which
held that:
"The Labor Code requires that in organized and unorganized establishments, a petition for certification election must be
filed by a legitimate labor organization. The acquisition of rights by any union or labor organization, particularly the right
to file a petition for certification election, first and foremost, depends on whether or not the labor organization has
attained the status of a legitimate labor organization.
In the case before us, the Med-Arbiter summarily disregarded the petitioner’s prayer that the former look into the
legitimacy of the respondent Union by a sweeping declaration that the union was in the possession of a charter
certificate so that ‘for all intents and purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate
organization,’"21 (Underscoring and emphasis supplied),
petitioner contends that, quoting Toyota, "[i]t becomes necessary . . ., anterior to the granting of an order allowing a
certification election, to inquire into the composition of any labor organization whenever the status of the labor
organization is challenged on the basis of Article 245 of the Labor Code."22
Continuing, petitioner argues that without resolving the status of THEU, the DOLE Undersecretary "conveniently deferred
the resolution on the serious infirmity in the membership of [THEU] and ordered the holding of the certification election"
which is frowned upon as the following ruling of this Court shows:
We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of the
respondent union can be remedied in "the pre-election conference thru the exclusion-inclusion proceedings wherein
those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters." Public
respondent gravely misappreciated the basic antipathy between the interest of supervisors and the interest of rank-and-
92
file employees. Due to the irreconcilability of their interest we held in Toyota Motor Philippines v. Toyota Motors Philippines
Corporation Labor Union, viz:
‘x x x
"Clearly, based on this provision [Article 245], a labor organization composed of both rank-and-file and supervisory
employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not
being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot posses any of the
rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of
collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification
election, to inquire into the composition of any labor organization whenever the status of the labor organization is
challenged on the basis of Article 245 of the Labor Code." (Emphasis by petitioner) (Dunlop Slazenger (Phils.), v.
Secretary of Labor, 300 SCRA 120 [1998]; Underscoring and emphasis supplied by petitioner.)
The petition fails. After a certificate of registration is issued to a union, its legal personality cannot be subject to collateral
attack. It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V,
Book IV of the "Rules to Implement the Labor Code" (Implementing Rules) which section reads:
Sec. 5. Effect of registration. The labor organization or workers’ association shall be deemed registered and vested with
legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be
subject to collateral attack, but may be questioned only in an independent petition for cancellation in accordance with
these Rules. (Emphasis supplied)
The grounds for cancellation of union registration are provided for under Article 239 of the Labor Code, as follows:
Art. 239. Grounds for cancellation of union registration. The following shall constitute grounds for cancellation of union
registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-
laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification;
(b) Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or
ratification of the constitution and by-laws or amendments thereto;
(c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of
officers, the list of voters, or failure to subject these documents together with the list of the newly elected/appointed
officers and their postal addresses within thirty (30) days from election;
(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the losing of every fiscal year
and misrepresentation, false entries or fraud in the preparation of the financial report itself;
(e) Acting as a labor contractor or engaging in the "cabo" system, or otherwise engaging in any activity prohibited by
law;
93
(f) Entering into collective bargaining agreements which provide terms and conditions of employment below minimum
standards established by law;
(g) Asking for or accepting attorney’s fees or negotiation fees from employers;
(h) Other than for mandatory activities under this Code, checking off special assessments or any other fees without duly
signed individual written authorizations of the members;
(i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau; and
(j) Failure to comply with the requirements under Articles 237 and 238, (Emphasis supplied),
while the procedure for cancellation of registration is provided for in Rule VIII, Book V of the Implementing Rules.
The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due
to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239
of above-quoted Article 239 of the Labor Code.
THEU, having been validly issued a certificate of registration, should be considered to have already acquired juridical
personality which may not be assailed collaterally.
As for petitioner’s allegation that some of the signatures in the petition for certification election were obtained through
fraud, false statement and misrepresentation, the proper procedure is, as reflected above, for it to file a petition for
cancellation of the certificate of registration, and not to intervene in a petition for certification election.
Regarding the alleged withdrawal of union members from participating in the certification election, this Court’s following
ruling is instructive:
"‘[T]he best forum for determining whether there were indeed retractions from some of the laborers is in the certification
election itself wherein the workers can freely express their choice in a secret ballot.’ Suffice it to say that the will of the
rank-and-file employees should in every possible instance be determined by secret ballot rather than by administrative
or quasi-judicial inquiry. Such representation and certification election cases are not to be taken as contentious
litigations for suits but as mere investigations of a non-adversary, fact-finding character as to which of the competing
unions represents the genuine choice of the workers to be their sole and exclusive collective bargaining representative
with their employer."23
As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie given, as found by the court a
quo, its failure to present substantial evidence that the assailed employees are actually occupying supervisory positions.
94
While petitioner submitted a list of its employees with their corresponding job titles and ranks,24 there is nothing
mentioned about the supervisors’ respective duties, powers and prerogatives that would show that they can effectively
recommend managerial actions which require the use of independent judgment.25
As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor:26
Designation should be reconciled with the actual job description of subject employees x x x The mere fact that an
employee is designated manager does not necessarily make him one. Otherwise, there would be an absurd situation
where one can be given the title just to be deprived of the right to be a member of a union. In the case of National Steel
Corporation vs. Laguesma (G. R. No. 103743, January 29, 1996), it was stressed that:
What is essential is the nature of the employee’s function and not the nomenclature or title given to the job which
determines whether the employee has rank-and-file or managerial status or whether he is a supervisory employee.
(Emphasis supplied).27
WHEREFORE, the petition is hereby DENIED. Let the records of the case be remanded to the office of origin, the
Mediation-Arbitration Unit, Regional Branch No. IV, for the immediate conduct of a certification election subject to the
usual pre-election conference.
SO ORDERED.
G.R. No. L-44350 November 25, 1976
U.E. AUTOMOTIVE EMPLOYEES AND WORKERS UNION-TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES, petitioners,
vs.
CARMELO C. NORIEL, PHILIPPINE FEDERATION OF LABOR, AND U. E. AUTOMOTIVE MANUFACTURING CO., INC.,
respondents.
Tupaz & Associates for petitioners.
Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor General Reynato S. Puno and Trial Attorney Joselito B.
Floro for respondent Carmelo C. Noriel.
Alejandro C. Villaviza for respondent Phil. Federation of Labor.
Poblador, Nazareno, Azada, Tomacruz & Paredes for respondent Company.

95
FERNANDO, J.:
It is a notable feature of our Constitution that freedom of association is explicitly ordained; 1 it is not merely derivative,
peripheral or penumbral, as is the case in the United States. 2 It can trace its origin to the Malolos Constitution. 3 More
specifically, where it concerns the expanded rights of labor under the present Charter, it is categorically made an
obligation of the State to assure full enjoyment "of workers to self-organization [and] collective bargaining." 4 It would be
to show less than full respect to the above mandates of the fundamental law, considering that petitioner union obtained
the requisite majority at a fair and honest election, if it would not be recognized as the sole bargaining agent. The
objection by respondent Director finds no support in the wording of the law. To sustain it, however, even on the
assumption that it has merit, just because when petitioner asked for a certification election, there was lacking the three-
day period under the Industrial Peace Act then in force 5 for it to be entitled to the rights and privileges of a labor
organization, would be to accord priority to form over substance. Moreover, it was not denied that respondent Director
of Labor Relations on January 2, 1975 certified that it was petitioner which should be "the sole and exclusive bargaining
representative of all rank and file employees and workers of the U.E. Automotive Manufacturing, Inc." 6 He had no
choice as the voting was 59 in favor of petitioner and 52 for private respondent Union. It would appear evident,
therefore, that in the light of the constitutional provisions set forth above and with the present Labor Code, the
challenged order of February 24, 1975 setting aside such certification and ordering the holding of a new election did
amount to a grave abuse of discretion. That was to run counter to what the law commands. 7
The facts are undisputed. The comment submitted by respondent Director Carmelo C. Noriel, through Acting Solicitor
General Hugo E. Gutierrez, Jr. and Assistant Solicitor General Reynato S. Puno, 8 made it clear. There was, on August 15,
1974, a petition for certification election with the National Labor Relations Commission filed by petitioner. Thereafter, on
August 26, 1974, private respondent Philippine Federation of Labor submitted a motion for intervention. Three
conferences between such labor organizations resulted in an agreement to hold a consent election actually conducted
on September 19, 1974 among the rank and file workers of respondent management firm. Petitioner obtained fifty-nine
votes, with respondent union having only fifty-two votes in such consent election. There was, on September 19, 1974, a
motion by petitioner to issue an order of certification duly granted on January 2, 1975 by respondent Director who did
certify petitioner as the sole land exclusive collective bargaining representative of such rank and file employees of
respondent firm. There was, however, a motion for reconsideration which was granted notwithstanding opposition by the
union on January 22, 1975, setting aside the previous order certifying petitioner as the sole bargaining representative. It is
such an order sustaining a motion for reconsideration that resulted in this petition. 9
The submission of respondent Director to sustain the validity of his order in the comment submitted on his behalf follows:
"Petitioner union is not a legitimate labor organization. Section 2(f) of, Republic Act Number 875 defines a legitimate
labor organization as any labor organization registered by the Department of Labor. Petitioner union is not duly
registered with the Department of Labor. The records of the Labor Registration Division of the Bureau of Labor Relations,
Department of Labor show that the application for registration of petitioner union was filed therein on July 19, 1974.
Petitioner union filed a petition for certification on August 15, 1974 or merely after a period of twenty-seven (27) days.
Section 23(b) of Republic Act Number 875 explicitly provides, thus: 'Any labor organization, association or union of
workers duly organized for the material, intellectual and moral well-being of the members shall acquire legal personality
and be entitled to all the rights and privileges within thirty days of filing with the Office of the Secretary of Labor notice of
its due application and existence and the following documents, together with the amount of five pesos as registration
fee, except as provided in paragraph "d" of this section (emphasis supplied).' It is clear therefore that the petition for
certification election was filed before the expiration of the period of thirty (30) days. It is futile therefore for the petitioner
to claim that it has already legal personality and is entitled to all the rights and privileges granted by law to legitimate
labor organizations by virtue of Section 23(b) of Republic Act Number 875." 10 As noted at the outset, such an argument
rests on an infirm and shaky foundation. It definitely runs counter to what this Court has held and continues to hold in a
number of cases in accordance with the constitutional freedom of association, more specifically, where labor is
concerned, to the fundamental rights of self-organization. Hence the merit in the present petition.
1. There is pertinent to this excerpt from a recent decision, Federacion Obrera de la Industria Tabaquera v. Noriel:
11 "Clearly, what is at stake is the constitutional right to freedom of association on the part of employees. Petitioner labor
union was in the past apparently able to enlist the allegiance of the working force in the Anglo-American Tobacco
Corporation. Thereafter, a number of such individuals joined private respondent labor union. That is a matter clearly left
to their sole uncontrolled judgment. There is this excerpt from Pan American World Airways, Inc. v. Pan American
Employees Association: 'There is both a constitutional and statutory recognition that laborers have the right to form
unions to take care of their interests vis-a-vis their employees. Their freedom to form organizations would be rendered
96
nugatory if they could not choose their own leaders to speak on their behalf and to bargain for them.' It cannot be
otherwise, for the freedom to choose which labor organization to join is an aspect of the constitutional mandate of
protection to labor. Prior to the Industrial Peace Act, there was a statute setting forth the guideline for the registration of
labor unions. As implied in Manila Hotel Co. v. Court of Industrial Relations, it was enacted pursuant to what is ordained in
the Constitution. Thus in Umali v. Lovina, it was held that mandamus lies to compel the registration of a labor
organization. There is this apt summary of what is signified in Philippine Land-Air-Sea Labor Union v. Court of Industrial
Relations, 'to allow a labor union to organize itself and acquire a personality distinct and separate from its members and
to serve as an instrumentality to conclude collective bargaining agreements * * *.' It is no coincidence that in the first
decision of this Court citing the Industrial Peace Act, Pambujan United Mine Workers v. Samar Mining Company, the role
of a labor union as the agency for the expression of the collective will affecting its members both present and
prospective, was stressed. That statute certainly was much more emphatic as to the vital aspect of such a right as
expressly set forth in the policy of the law. What is more, there is in such enactment this categorical provision on the right
of employees to self-organization: 'Employees shall have the right to self-organization and to form, join or assist labor
organizations of their own choosing for the purpose of collective bargaining through representatives of their own
choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid or
protection. The new Labor Code is equally explicit on the matter. Thus: 'The State shall assure the rights of workers of self-
organization, collective bargaining, security of tenure and just and humane conditions of work.'" 12
2. The matter received further elaboration in the Federacion Obrera decision in these words: "It is thus of the very
essence of the regime of industrial democracy sought to be attained through the collective bargaining process that
there be no obstacle to the freedom Identified with the exercise of the right to self-organization. Labor is to be
represented by a union that can express its collective will. In the event, and this is usually the case, that there is more
than one such group fighting for that privilege, a certification election must be conducted. That is the teaching of a
recent decision under the new Labor Code, United Employees Union of Gelmart Industries v. Noriel. There is this relevant
except: 'The institution of collective bargaining is, to recall Cox, a prime manifestation of industrial democracy at work.
The two parties to the relationship, labor and management, make their own rules by coming to terms. That is to govern
themselves in matters that really count. As labor, however, is composed of a number of individuals, it is indispensable
that they be represented by a labor organization of their choice. Thus may be discerned how crucial is a certification
election. So our decisions from the earliest case of PLDT Employees Union v. PLDT Co. Free Telephone Workers Union to
the latest, Philippine Communications, Electronics & Electricity Workers' Federation (PCWF) v. Court of Industrial Relations,
have made clear.' An even later pronouncement in Philippine Association of Free Labor Unions v. Bureau of Labor
Relations, speaks similarly: 'Petitioner thus appears to be woefully lacking in awareness of the significance of a
certification election for the collective bargaining process. It is the fairest and most effective way of determining which
labor organization can truly represent the working force. It is a fundamental postulate that the will of the majority, if given
expression in an honest election with freedom on the part of the voters to make their choice, is controlling. No better
device can assure the institution of industrial democracy with the two parties to a business enterprise, management and
labor, establishing a regime of self-rule.' " 13
3. Deference to the above principles so often reiterated in a host of decisions ought to have exerted a
compelling force on respondent Director of Labor Relations. As a matter of fact, that appeared to be the case. He did
certify on January 2, 1975 that petitioner should be "the sole and exclusive collective bargaining representative of all
rank-and-file employees and workers of the UE Automotive Manufacturing, Inc." 14 The voting, having been 59 in favor of
petitioner and 52 for private respondent Union, had to be respected. Had he stood firm, there would have been no
occasion for the certiorari petition. He did, however, have a change of mind. On February 24, 1975, he set aside such
certification. In his comment, earlier referred to, he would predicate this turnabout on the Union lacking the three-day
period before filing the petition for certification under the appropriate provision of the Industrial Peace Act then in force.
That could be an explanation, but certainly not a justification. It would amount, to use a phrase favored by Justice
Cardozo, to a stultification of a constitutional right.
4. The excuse offered for the action taken lacks any persuasive force. It may even be looked upon as
insubstantial, not to say flimsy. The law is quite clear; the expression is within thirty days, not after thirty days. Even if
meritorious, however, it can be disregarded under the maxim de minimis non curat lex. 15 Then, too, the weakness of
such a pretext is made apparent by the well-settled principle in the Philippines that where it concerns the weight to be
accorded to the wishes of the majority as expressed in an election conducted fairly and honestly, certain provisions that
may be considered mandatory before the voting takes place becomes thereafter merely directory in order that the
wishes of the electorate prevail. 16 The indefensible character of the order of February 24, 1975 setting aside the previous
order certifying to petitioner as the exclusive bargaining representative becomes truly apparent.
97
5. Nor is the different outcome called for just because at the time of the challenged order, there was as yet no
registration of petitioner Union. If at all, that is a circumstance far from flattering as far as the Bureau of Labor Relations is
concerned. It must be remembered that as admitted in the comment of respondent Director, the application for
registration was filed on July 19, 1974. The challenged order was issued seven months later. There is no allegation that
such application suffered from any infirmity. Moreover, if such were the case, the attention of petitioner should have
been called so that it could be corrected. Only thus may the right to association be accorded full respect. As far back
as Umali v. Lovina, 17 a 1950 decision, it was held by this Court that under appropriate circumstances, mandamus lies to
compel registration. There is, in addition, a letter signed by a certain Jesus C. Cuenca, who Identified himself as the
Acting Registrar of Labor Organizations, stating that this
Office "has taken due note of your letter of July 25, 1974 informing us that this union has been accepted by the
Federation as local chapter No. 580." 18 When it is taken into consideration that the Bureau of Labor Relations itself had
allowed another labor union not registered but affiliated with the same Federation to be entitled to the rights of a duly
certified labor organization, there would appear clearly an element of arbitrariness in the actuation of respondent
Director. 19 It is likewise impressed with a character of a denial of equal protection. Lastly, this Court, in Nationalists Party
v. Bautista, 20 where one of the defenses raised is lack of capacity of petitioner as a juridical person entitled to institute
proceedings, after holding that it was entitled to the remedy of prohibition sought, allowed it either to amend its petition
so as to substitute a juridical person, or to show that it is entitled to institute such proceeding. So it should be in this Case.
In the absence of any fatal defect to the application for registration, there is no justification for withholding it from
petitioner to enable it to exercise fully its constitutional right to freedom of association. In the alternative, the petition
could very well be considered as having been filed by the parent labor federation. What is decisive is that the members
of petitioner Union did exercise their fundamental right to self-organization and did win in a fair and honest election.
WHEREFORE, the writ of prohibition is granted, the challenged order of February 24, 1975 setting aside the certification is
nullified and declared void, and the previous order of January 2, 1975 certifying to petitioner Union as the "sole and
exclusive collective bargaining representative of all rank and file employees and workers of the U.E. Automotive
Manufacturing Company, Inc.," declared valid and binding. Whatever other rights petitioner Union may have under the
present Labor Code should likewise be accorded recognition by respondent Director of the Bureau of Labor Relations.
This decision is immediately executory. No costs.
Barredo, Antonio, Aquino and Concepcion, Jr., JJ., concur.
G. R. No. L-53406 December 14, 1981
NATIONAL UNION OF BANK EMPLOYEES, petitioner,
vs.
THE HONORABLE MINISTER OF LABOR, THE HONORABLE DEPUTY MINISTER OF LABOR, THE HONORABLE DIRECTOR OF THE
BUREAU OF LABOR RELATIONS, PRODUCERS BANK OF THE PHILIPPINES, respondents.
MAKASIAR, J.:
This is a petition for mandamus filed by petitioner Union to compel public respondents to conduct a certification election
among the rank and file employees of the respondent employer in Case No. LRD-M-8-360-79 or in the alternative, to
require the respondent Minister of Labor or his Deputy to act on private respondent's "Appeal" and on petitioner's
"Motion to Dismiss with Motion to Execute."
98
It appears that on August 17, 1979, petitioner Union filed a petition to be directly certified as collective bargaining agent
of the rank and file employees of private respondent corporation (Annex "A"; p. 26, rec.).
On September 7, 1979, the date of the hearing, private respondent was required to submit on October 5, 1979 a payroll
of employees as of July 31, 1979. On the same date, in a handwritten manifestation, respondent employer through
counsel, agreed that as soon as the registration certificate of the local union was issued by the Ministry of Labor and that
it was shown that the local union represents the majority of the rank and file, the Bank would recognize the said union
and would negotiate accordingly (Annex "B" p. 27, rec.).
On October 5, 1979, the above said registration certificate of the local union [Certificate No. 9352-LC, issued by the
Ministry of Labor] was secured. On October 15, 1979, petitioner filed a Manifestation and Urgent Motion to Decide and
submitted a copy of the Registration Certificate of the local union and union membership application of 183 members
out of more or less 259 rank and file employees of employer Bank, authorizing the National Union of Bank Employees
(NUBE) [herein petitioner] to represent them "as their sole and exclusive collective bargaining agent in all matters relating
to salary rates, hours of work and other terms and conditions of employment in the Producers Bank of the Philippines" (p.
38, rec.). Nonetheless, respondent corporation failed to submit the required payroll and the list of rank and file workers
based on said payroll.
On October 18, 1979, Med-Arbiter Climaco G. Plagata issued an order directing the holding of a certification election,
the dispositive portion of which reads:
WHEREFORE, premises considered, a certification election is hereby ordered held, conducted, and supervised by
representation officers of this office within 20 days from receipt hereof. The same representation officers shall conduct
pre-election conferences in order to thresh out the mechanics and other minor details of this election including the
inclusion and exclusion proceedings to determine the qualified electors in this election. The choice shall be either YES, for
Petitioner, or No, for NO UNION DESIRED.
SO ORDERED (Annex "C", pp. 28-29, rec.).
On October 19, 1979, respondent corporation filed a motion to suspend further proceedings in view of an allegedly
prejudicial issue consisting of a pending proceeding for cancellation of the registration of petitioning union for allegedly
engaging in prohibited and unlawful activities in violation of the laws (Annex "D" pp. 30-32, rec.).
On October 23, 1979, by agreement of the parties, respondent then Deputy Minister of Labor Amado Inciong, acting for
the Minister of Labor, assumed jurisdiction over the certification election case and the application for clearance to
terminate the services of thirteen (13) union officers by private respondent corporation. Thus, an order was issued on the
same date which reads:
On October 23, 1979 the parties entered into an agreement that the Office of the Ministry of Labor shall assume
jurisdiction over the following disputes under P.D. No. 823 in the interest of speedy labor justice and industrial peace:
1. certification election case; and
2. application for clearance to terminate thirteen (13) employees with preventive suspension.
99
(Agreement, October 23, 1979).
Accordingly, the Deputy Minister deputized Atty. Luna C. Piezas, Chief of the Med- Arbiter Section, National Capital
Region, to conduct summary investigations for the purpose of determining the definition of the appropriate bargaining
unit sought to be represented by the petitioning union as wen as compliance with the 30% mandatory written consent in
support of the petition under the bargaining unit as shall have been defined.
On the application for clearance to terminate with preventive suspension, this Office deems it necessary, for the mutual
protection of each party's interest and to assure continuance of the exercise of their respective rights within legal limits,
to lift the imposition of preventive suspension on the subject employees. The lifting of the preventive suspension shall
include Messrs. Castro and Sumibcay who are presently on leave of absence with pay in pursuance of the agreement
reached at the level of the Regional Director. Further, should the two (2) employees' leave credits be exhausted, they
are to go on leave without pay, but this shall not be construed as done in pursuance of the preventive suspension.
Finally, the lifting of the preventive suspension shall be without prejudice to the continuance of the hearing on the
application for clearance involving the thirteen (13) employees the determination of the merits of which shall be
disposed of at the Regional level (Annex "E", pp. 33-34, rec.).
Hence, Med-Arbiter Luna Piezas conducted hearings but withdrew, in view of the alleged utter disrespect for authority,
gross bad faith, malicious refusal to appreciate effective, prompt and honest service and resorting in malicious and
deliberate lying in dealing with Ministry of Labor officials by a certain Mr. Jun Umali, spokesman of the Producers' Bank
Employees Association. The case was then transferred to Med-Arbiter Alberto Abis on November 7, 1979 (Annex " F ", p.
35, rec.).
During the hearing on November 9, 1979, respondent Bank failed to submit a list of rank and file employees proposed to
be excluded from the bargaining unit. Respondent Bank's counsel however, in a verbal manifestation pressed for the
exclusion of the following personnel from the bargaining unit:
1. Secretaries;
2. Staff of Personnel Department;
3. Drivers;
4. Telephone Operators;
5. Accounting Department;
6. Credit Investigators;
100
7. Collectors;
8. Messengers;
9. Auditing Department Personnel;
10. Signature Verifiers;
11. Legal Department Personnel;
12. Loan Security Custodians; and
13. Trust Department Personnel.
On November 19, 1979, Med-Arbiter Alberto Abis Jr. ordered the holding of certification election among the rank and file
employees but sustained the stand of respondent company as to the exclusion of certain employees. Thus, the pertinent
portion of said order reads:
After a careful perusal of the records, evaluation of the evidence on hand and consideration of the positions taken by
the parties, we find and so hold that Petitioner-Union has substantially complied with the mandatory and jurisdictional
requirement of 30% subscription of all the employees in the bargaining unit as prescribed by Section 2, Rule 5, Book V of
the Rules and Regulations Implementing the Labor Code. Submission by the Petitioner during the hearing of copies of the
application and membership forms of its members wherein they have duly authorized Petitioner 'as their sole and
exclusive collective bargaining agent constitutes substantial compliance of the mandatory and jurisdictional 30%
subscription requirement, it appearing from the records that out of the 264 total rank and file employees, 188 are union
members who have so authorized Petitioner to represent.
With respect to respondent bank's motion to suspend the proceedings in the instant case pending resolution of the
cancellation proceedings now pending in the Bureau of Labor Relations, we find that the same is not tenable in the
absence of a restraining order.
In consideration of the agreement of the parties, it is hereby ordered that the scope or coverage of the appropriate
bargaining unit should include the Head Office of the Producers Bank of the Philippines and all its branch offices and
shall comprise of an the regular rank and file employees of the bank. Excluded are all managerial and supervisory
employees, probationary, contractual and casual employees and security guards. It is further ordered that by virtue and
in consonance with industry practice as revealed by the CBAs of 18 banks submitted by Petitioner-Union, the following
positions should likewise be excluded from the bargaining unit; Secretaries of bank officials; employees of the Personnel
Department; EXCEPT Manuel Sumibcay Primi Zamora and Carmelita Sy; employees of the Accounting Department;
employees of the Legal Department employees of the Trust Department, credit investigators, telephone operators, and
loan security custodians. Signature verifiers, drivers, messengers and other non-confidential employees included in the
bank's list of proposed exclusions should be allowed to vote, but the votes should be segregated as challenged. In case
a doubt arises as to whether or not the position held by an employee is confidential in nature, the employee should be
allowed to vote, but his vote should be segregated as challenged .
101
WHEREFORE, in the light of the foregoing considerations, it is hereby ordered that a certification election be conducted
among the regular rank and file employees of the Producers Bank of the Philippines (the appropriate bargaining unit of
which is defined above) after the usual pre-election conference called to formulate the list of qualified voters and
discuss the mechanics of the election.
It is further ordered that the election in the bank's branches outside the Metro Manila area be conducted by the
appropriate Regional Offices of the Ministry of Labor having jurisdiction over them.
SO ORDERED (pp. 5-7, Annex "G"; pp. 41-43, rec.; emphasis supplied).
On November 29, 1979, petitioner filed a partial appeal to the Director of Bureau of Labor Relations questioning the
exclusions made by Med-Arbiter Abis of those employees who are not among those expressly enumerated under the
law to be excluded. It vigorously urged the inclusion of the rest of the employees which is allegedly the usual practice in
the banking industry. It likewise urged the holding of a certification election allowing all those excluded by Med-Arbiter
Abis to vote but segregating their votes as challenged in the meantime. Hence, it averred:
It is in the position of the petitioner that notwithstanding the statements above that the petition for certification should be
held immediately by allowing all those not excluded from Arbiter Abis' order to vote without prejudice to a final decision
on the matters subject of these appeal. Which we also submit that in order to expedite the proceedings these exclusions
should also be allowed to vote even pending resolution of the appeal but segregating them for further consideration
(pp. 3-4, Annex "H"; p. 46- 47, rec.).
On December 4, 1979, respondent bank likewise appealed from the aforesaid November 19, 1979 order of Med-Arbiter
Alberto Abis, Jr. to the Minister of Labor on the following grounds:
(1) that the act of Med-Arbiter Abis in issuing the abovesaid Order is ultra vires, full and complete jurisdiction over
the questioned petition being vested in the office of the Minister of Labor and hence the only adjudicative body
empowered to resolve the petition;
(2) that the fact that petitioner's Union registration was subject of cancellation proceedings with the Bureau of
Labor Relations rendered the issuance of the abovequestioned Order directing the holding of a certification election
premature; and
(3) that the bargaining unit was not appropriately defined [Annex " I " pp. 49-57, rec.].
On December 7, 1979, the entire records of the case were allegedly elevated as an appealed case by Regional
Director Francisco L. Estrella to the Director of the Bureau of Labor Relations and was docketed thereat as appealed
case No. A-1599-79.
On January 21, 1980, the Union of Producers Bank Employees Chapter-NATU filed a motion to intervene in the said
petition for certification election alleging among other things that it has also some signed up members in the respondent
Bank and consequently has an interest in the petition for certification election filed by petitioner as it will directly affect
their rights as to who will represent the employees in the collective bargaining negotiations (Annex "P"; pp. 100-101, rec.).
102
On January 24, 1980, the Bureau of Labor Relations Director Carmelo C. Noriel rendered a decision affirming the Med-
Arbiter's order with certain modifications, the pertinent portion of which reads:
Preliminarily, the issue of jurisdiction is being raised by respondent bank but we need not be drawn into nor tarry in this
issue but instead proceed to consider the merits of the case. Suffice it rather to say that the appealed order was signed
by the med-arbiter a quo and the records of the case were elevated on appeal to this Bureau by the Regional Director
of the National Capital Region. Besides respondent should not unduly press the jurisdictional issue. Such question does
not lead nor contribute to the resolution of the real pressing issue—the certification election issue. What is at stake here is
the right of the employees to organize and be represented for collective bargaining purposes by a union at the
respondent bank where none existed up to the present time. On this consideration alone, respondent's vigorous
objection alleging want of jurisdiction cracks from tangency of the issue.
xxx xxx xxx
The matter of defining the bargaining unit, that is to say the appropriateness thereof, usually presents for determination
three questions to wit, the general type of the bargaining unit or whether it should be an industrial unit embracing an the
employees in a broad class or a craft unit that is confined to a small specialized group within a broad class, the scope of
the bargaining unit or whether it would embrace all employees in a given class at only one plant or at several plants of
an employer, and the specific composition of the bargaining unit, that is, whether or not the unit should include
employees of different occupational groups, like clerks, inspectors, technical employees, etc. On these questions, we
are not without legal guidelines. The law and the Rules are clear. The petition for certification election, whether filed by a
legitimate labor organization or by an employer case, shall contain inter alia, the description of the bargaining unit
which shall be the employer unit unless circumstances otherwise require. Thus, the policy under the Labor Code on the
matter of fixing the bargaining unit is to favor larger units and this is sought to be implemented on a two-tiered basis. On
the lower tier, the law mandates the employer unit as the normal unit of organization at the company level, thus
discouraging if not stopping fragmentation into small craft or occupational units as what prevailed prior to the Labor
Code. But the Code envisions further consolidation into larger bargaining units. Thus, on the higher tier, the law
mandates the eventual restructuring of the labor movement along the "one union, one industry" basis. There should
therefore be no doubt as to the law and policy on the fixing of the appropriate bargaining unit which is generally the
employer unit. Applying this rule to the instant case, the appropriate bargaining unit should embrace all the regular rank
and file employees at the head as well as branch offices of respondent bank. Of course, the exception to this employer
unit rule is when circumstances otherwise require. But such is not at issue here, respondent not having adduced
circumstances that would justify a contrary composition of the bargaining unit.
Respondent however insists on the definition of the appropriate bargaining unit upon the question of whether or not to
exclude admittedly regular rank and file employees which it considers confidential, managerial and technical. This
question, it should be pointed out, does not enter the matter of defining the bargaining unit. The definition of the
appropriate unit refers to the grouping or more precisely, the legal collectivity of eligible employees for purposes of
collective bargaining. The presumption is that these employees are entitled to the rights to self-organization and
collective bargaining, otherwise they would not be, in the first place be considered at all in the determination of the
appropriate bargaining unit.
The question therefore of excluding certain rank and file employees for being allegedly confidential, managerial or
technical does not simply involve a definition of the bargaining unit but rather raises the fundamental issue of coverage
under or eligibility for the exercise of the workers' rights to self-organization and collective bargaining. On this score, the
law on coverage and exclusion on the matter should by now be very clear. Article 244 of the Labor Code states that all
persons employed in commercial, industrial and agricultural enterprises, including religious, charitable, medical or
educational institutions operating for profit shall have the right to self-organization and to form, join, or assist labor
organizations for purposes of collective bargaining. Articles 245 and 246 (ibid) provide that security guards and
managerial employees are not eligible to form, assist or join any labor organization. As defined by the Code, a
managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend
such managerial actions. All employees not falling within this definition are considered rank and file employees for
purposes of self-organization and collective bargaining.
103
It is in the light of the foregoing provisions of law that the challenged order, in so far as it excludes all managerial and
supervisory employees, secretaries of bank officials, credit investigators, telephone operators, loan security custodians,
employees in the accounting, auditing, legal, trust and personnel departments respectively, should be modified for
being either superfluous, discriminatory or simply contrary to law. The express exclusion of managerial employees in the
Order is superfluous for the same is already provided for by law and is presumed when the bargaining unit was defined
as comprising all the regular rank and file employees of the bank. It is also anomalous and discriminatory when it
excluded employees of the personnel department but included specific individuals like Manuel Simibcay Primi Zamora
and Carmelita Sy. Exclusion as managerial employee is not based on the personality of the occupant but rather on the
nature and function of the position. The exclusion of the other positions is likewise contrary to law, there being no clear
showing that they are managerial employees. The mere fact of being a supervisor or a confidential employee does not
exclude him from coverage. He must strictly come within the category of a managerial employee as defined by the
Code. The Constitution assures to all workers such rights to self-organization and collective bargaining. Exclusions, being
the exception and being in derogation of such constitutional mandate, should be construed in strictissimi juris.
Furthermore, to uphold the order of exclusion would be to allow the emasculation of the workers' right to self-
organization and to collective bargaining, statutory rights which have received constitutional recognition when they
were enshrined in the 1973 Constitution. Indeed, the further rulings that 'other non-confidential employees included in the
bank's list of proposed exclusion be allowed to vote but the votes should be segregated as challenged and that in case
of doubt as to whether or not the position held by an employee is confidential in nature, the employee should be
allowed to vote but his vote should be segregated as challenged' both complete the said order's self-nullifying effects.
At the most and indeed as a policy, exclusion of confidential employees from the bargaining unit is a matter for
negotiation and agreement of the parties. Thus, the parties may agree in the CBA, to exclude certain highly confidential
positions from the bargaining unit. Absent such agreement, coverage must be observed. In any event, any negotiation
and agreement can come after the representation issue is resolved and this is just the situation in the instant case.
In fine, the appropriate bargaining unit shall include a regular rank and file employees of the respondent including the
positions excluded in the challenged order dated 19 November 1979, with the exception of the secretaries to the Bank
President, Executive Vice-President, Senior Vice President and other Vice-Presidents as agreed upon by the parties
during the hearings.
Respondent vehemently interposes also the pendency of cancellation proceedings against petitioner as a prejudicial
issue which should suspend the petition for certification election.
We cannot fully concur with this contention Unless there is an order of cancellation which is final the union's certificate of
registration remains and its legal personality intact. It is entitled to the rights and privileges accorded by law, including
the right to represent its members and employees in a bargaining unit for collective bargaining purposes including
participation in a representation proceeding. This is especially true where the grounds for the cancellation of its union
certificate do not appear indubitable.
The rights of workers to self-organization finds general and specific constitutional guarantees. Section 7, Article IV of the
Philippine Constitution provides that the right to form associations or societies purposes not contrary to law shall not be
abridged. This right more pronounced in the case of labor. Section 9, Article II (ibid) specifically declares that the State
shall assure the rights of workers to self-organization ,collective bargaining, security of tenure and just and humane
conditions of work. Such constitutional guarantees should not be lightly taken much less easily nullified. A healthy respect
for the freedom of association demands that acts imputable to officers or members be not easily visited with capital
punishments against the association itself.
104
On the 30% consent requirement, respondent contends that the bargaining unit is not appropriately defined 'hence, the
med-arbiter's finding that there was compliance with the 30% 'jurisdictional requirement is patently erroneous. To this we
must disagree. As earlier stated, the definition of the appropriate bargaining unit does not call for an actual head count
or Identification of the particular employees belonging thereto. That is done in the pre-election conference. It is sufficient
that the bargaining unit is defined such that the employees who are part thereof may be readily ascertained for
purposes of exclusions and inclusions during the pre-election conference when the list of eligible voters are determined.
In this regard, respondent does not really seriously question the 264 total number of employees except for the alleged
exclusion which should reduce the number thus allegedly affecting the sufficiency of the supporting signatures
submitted. We have already ruled against the exclusions as violative of the constitutional guarantee of workers' right to
self-organization. Consequently, since 188 of the 264 employees subscribed to the petition, which constitutes 70% of the
total employees in bargaining unit, the 30% consent requirement has been more than sufficiently complied with. In any
case, even if we grant the alleged exclusions totalling about 45, the same will not give any refuge to respondent's
position. For assuming momentarily that the exclusions are valid, the same will not fatally affect the 30% consent
compliance.
Finally, lest it be so easily forgotten, a certification election is but an administration device for determining the true
choice of the employees in the appropriate bargaining unit as to their bargainer representative. Unnecessary obstacles
should not therefore be thrown on its way. Rather, the parties should take their case, if they have, directly to the real and
ultimate arbiter on the matter, the employees sought to be represented in the bargaining unit.
WHEREFORE, in the light of the foregoing considerations, the Order dated 19 November 1979 calling for a certification
election is hereby affirmed with the modification that the same shall be conducted among all the regular rank and file
employees of the respondent bank at its head and branch offices, including those excluded in said Order, except only
the positions of secretary to the Bank President, Executive Vice-President and other Vice-Presidents which agreed to be
excluded from the bargaining unit by the parties during the hearings. The choice shall be between the petitioner and no
union.
Let the certification election be conducted within twenty (20) days from receipt hereof. The pre-election conference
shall be immediately called to thresh out the mechanics of the election. The list of qualified voters shall be based on the
July 1979 payroll of the company.
SO ORDERED (pp. 5-9, Annex "J" pp. 63-67, rec.; emphasis supplied).
On February 11, 1980, petitioner received an undated and unverified appeal of the respondent bank to the Minister of
Labor questioning the decision of Bureau of Labor Relations Director Carmelo C. Noriel which appeal alleged that:
I. THE QUESTIONED ORDER IS NULL AND VOID FOR HAVING BEEN ISSUED WITHOUT OR IN EXCESS OF JURISDICTION
SINCE —
(i) It is this Honorable Office, not the BLR, that has jurisdiction over the parties' appeals from the Order of Med-Arbiter
Alberto A. Abis, Jr.
II. ASSUMING, AD ARGUENDO, THAT THE BLR HAS JURISDICTION, THE APPEALED ORDER IS NONETHELESS NULL AND
VOID, THE BLR HAVING GRAVELY ABUSED ITS DISCRETION IN NOT FINDING THAT THE ORDER, DATED NOVEMBER 19, 1979,
OF MED-ARBITER ABIS IS NULL AND VOID FOR HAVING BEEN ISSUED WITHOUT AUTHORITY/JURISDICTION CONSIDERING THAT
—
105
(i) Full and complete jurisdiction over this petition is vested in this Office, which, under P.D. 823, as amended, and
by agreement of the parties, is the adjudicative body solely and exclusively empowered to resolve this petition.
(ii) The fact that petitioner's Union registration is now the subject of cancellation proceedings before the BLR
renders the issuance of an Order directing the holding of a certification election premature; and
(iii) The bargaining unit is not appropriately defined; hence, the BLR'S and before it, the Med-Arbiter's finding that
there was compliance with the 30% jurisdictional requirement is completely without basis and, therefore, grossly
erroneous.
III. THE MOTION FOR INTERVENTION FILED BY INTERVENOR UNION OF PRODUCERS BANK EMPLOYEE'S CHAPTER-NATU
WHICH THE BLR, FOR UNKNOWN REASON(S), FAILED TO RESOLVE, RENDERS IMPERATIVE THE REDETERMINATION OF
WHETHER OR NOT THE MANDATORY 30% JURISDICTIONAL REQUIREMENT HAS BEEN MET. (Pp. 2-3, Annex "K", pp. 69-70,
rec.).
On February 21, 1980, petitioner union filed a manifestation on respondent's undated and unverified appeal (Annex "L";
pp. 91-94, rec.).
On the same date, petitioner filed a motion to dismiss with motion to execute (Annex " M " pp. 95-96, rec.).
On March 3, 1980, petitioner filed an urgent motion to resolve respondent's appeal together with pertitioner's motion to
dismiss and motion for execution ( Annex "N"; pp. 97-98, rec.).
On March 14, 1980, petitioner received a copy of a letter endorsement dated March 7, 1980 which reads:
Respectfully referred to the Honorable Minister of Labor, the herein attached Motion to Execute and Manifestation to
Dismiss with Motion to Execute and Manifestation on Respondent's undated and unverified Appeal dated Feb. 21, 1980
and February 20, 1980 respectively, for appropriate action.
In a memorandum dated 9 November 1979, the Deputy Minister of Labor completely inhibited himself in this case (p.
169, rec.).
Public respondent Director Carmelo C. Noriel did not proceed to hold the certification election, neither did the Minister
of Labor act on the appeal of private respondent and on petitioner's motion to dismiss with motion to execute.
Hence, petitioner filed the instant petition on March 19, 1980.
On May 2, 1980, private respondent Bank filed its comments (pp. 111-122, rec.).
106
On June 25, 1980, public respondents filed their comment (pp. 131-142, rec.).
On August 16, 1980, petitioner filed its memorandum (pp. 155-169, rec.).
On September 2, 1980, private respondent Bank filed its memorandum (pp. 179-197, rec.).
On October 1, 1980, public respondents filed a manifestation in lieu of memorandum alleging inter alia that:
1. The instant petition for mandamus seeks to compel the respondent Minister of Labor to act on respondent
Producers Bank's Appeal and on petitioner's motion to execute the decision of respondent Director of Labor Relations
dated January 24, 1980, directing the holding of a certification election in said bank;
2. The said petition, however, is now moot and academic because:
(a) Respondent Minister of Labor had already acted on the said appeal in his decision dated April 11, 1980 the
dispositive portion of which is as follows:
Wherefore, respondent Bank's Appeal is hereby dismissed and the validity of the Decision of January 24, 1980, herein
adopted is hereby recognized. No motion for reconsideration of this Order shall be entertained.
(b) Petitioner may now file, if it so desires, with respondent Director of Labor Relations, a motion for the execution of
his decision so that the certification election can be held at respondent bank;
WHEREFORE, it is respectfully prayed that the instant petition be dismissed for being moot and academic (pp. 201-202,
rec.; emphasis supplied).
On October 10, 1980, petitioner filed a "Manifestation Re: Decision of the Minister of Labor" alleging among other things
that.
xxx xxx xxx
2. Petitioner had not received any copy of such April 11, 1980 decision of the Minister of Labor mentioned by the
Honorable Solicitor General. In fact, the Comment of the public respondents dated June 11, 1980 signed by Assistant
Solicitor General Octavio R. Ramirez and Trial Attorney Elihu A. Ybañez made no mention of the same in the private
respondent's memorandum of September 2, 1980" (p. 204, rec.).
107
On October 28, 1980, petitioner filed a comment on manifestation of the Honorable Solicitor General dated 30
September 1980 and motion alleging therein that despite inquiries made, no official copy of the alleged April 11, 1980
decision of the Minister of Labor mentioned in the manifestation of the Solicitor General has been furnished the
petitioner. Hence, it prayed that the Minister of Labor be requested to submit to this Court a certified copy of the
aforesaid April 11, 1986 decision of the Minister of Labor.
On October 30, 1980, petitioner filed a manifestation and comment stating that:
1. On October 29, 1980, it received a copy of the decision of the Honorable Minister of Labor in Case No. NCR-
LRD-8-360-79 as may be seen from Annex "A".
2. The decision is dated October 23, 1980 and not April 11, 1980 as stated in the Manifestation in Lieu of
Memorandum of the Office of the Honorable Solicitor General, dated 30 September 1980.
3. Petitioner respectfully request an explanation from the public respondents on this apparent discrepancy which
has in fact misled even this Honorable Court (p. 21 1, rec.).
On November 11, 1980, private respondent Bank filed a manifestation/motion stating that the aforementioned April 11,
1980 decision of the Minister of Labor is non- existent, as in fact the Minister of Labor issued an order affirming the decision
of BLR Director Noriel only on October 23, 1980.
xxx xxx xxx
3. Notwithstanding the issuance of the October 23, 1980 Order by the Minister of Labor, the Bank respectfully
submits that this petition for mandamus, initiated by petitioner on March 19, 1980 and given due course by this
Honorable Court should not be dismissed. The petitioner herein prays from this Honorable Court that public respondents
be ordered to conduct the certification election as ordered by Med-Arbiter Plagata, Abis and BLR Director Noriel
among the rank-and-file employees ... of the Bank. Alternatively, the petitioner prays that the Minister of Labor or his
Deputy be required "to act forthwith" on the appeal filed by petitioner herein As could be gleaned clearly from the
allegations and prayer in this petition for mandamus, the petitioner primarily seeks the holding of a certification election
Only secondarily is it asking this Court to command the Minister of Labor or his Deputy to resolve the appeal filed by the
Bank.
4. The affirmance by the Minister of the disputed order of BLR Director Noriel thus renders moot and academic
only the secondary or alternative prayer of the Union in this mandamus case. What still remains for resolution by this
Honorable Courts the issue squarely put before it on the propriety or impropriety of holding a certification election. This
issue has been traversed by the petitioner and the Bank in their respective memoranda filed with this Court, with the
Bank stressing that a certification election would be improper because, among others, the petitioning Union violated the
strike ban, there is a pending case for cancellation of its registration certificate, and applications for clearance to dismiss
the Union's striking members are pending approval by the BLR Director.
5. A dismissal of this petition for mandamus would unduly delay the resolution of the issue of whether a
certification election should be held or not.
108
IN VIEW OF THE FOREGOING, it is respectfully moved that this Honorable Court rule on the issue of whether or not a
certification election should be held under circumstances obtaining in the present case (pp. 214-216, rec.; emphasis
supplied).
On November 24, 1980, public respondents filed a reply to the manifestation and comment of petitioner explaining the
discrepancy of the two dates—October 23, 1980, the actual date of the order of the Minister of Labor affirming the
decision of the BLR Director and April 11, 1980, the date mentioned by the Solicitor General as the alleged date of the
aforesaid order of the Minister of Labor. Thus, the pertinent portion of the letter of Director Noriel to the Solicitor General
likewise explaining the apparent discrepancy of the aforesaid dates reads:
It should likewise invite your attention to the date of the Order which is October 23, 1980 and not April 11, 1980 as
indicated in the "Manifestation in Lieu of Memorandum" dated September 30, 1980 of the Solicitor General filed with the
Supreme Court. The April 11, 1980 date must have been based on a draft order which was inadvertently included in the
records of the case that was forwarded to your office. We wish to point out, however, that the dispositive portion as
quoted in the Manifestation is exactly the same as that in the Order eventually signed and released by the Labor Minister
on October 23, 1980 (p. 220, rec.).
Public respondents further averred that "(I)n any event, whether the order is dated April 11, 1980 or October 23, 1980 will
not matter since both 'orders' dismissed the appeal of the respondent Bank, upon which dismissal the Manifestation in
Lieu of Memorandum dated September 30, 1980, of public respondents, was based." Public respondents thus reiterated
their prayer that the instant petition be dismissed for being allegedly moot and academic (pp. 219-222, rec.).
On December 5, 1980, petitioner filed a comment to manifestation/motion of counsel for private respondent alleging
inter alia that "... should the Honorable Court be minded to resolve the issue raised in the Manifestation/Motion of private
respondent-i.e.-whether the alleged strike ban violation is a bar to a certification election, it will be noted that the matter
of whether there has been a 'violation' of the strike ban or not is still to be heard by the Regional Director through Labor
Arbiter Crescencio Trajano after this Honorable Court dismissed G.R. No. L-52026 on the matter of jurisdiction
competence of the Regional Director to hear the question raised therein. To the present, although, the Regional Director
has commenced to act on the case, there is no decision on whether the strike ban has been violated by the petitioner
union." Petitioner union vigorously asserted that while private respondent Bank has a pending petition for cancellation of
the registration certificate of herein petitioner union, it is still premature for private respondent Bank to claim that the
petitioner union has violated the strike ban. Petitioner then alleged that "(T)here is also no proof or decision that acts
indulged in by the petitioner and its members amounted to a strike and even assuming arguendo that such act (which
was the holding of a meeting for 30 minutes before office time in the morning) constitutes a 'strike' and further that such
act violates the strike ban. It has been held through Honorable Justice Antonio P. Barredo in Petrophil. vs. Malayang
Manggagawa sa ESSO (75 SCRA 73) that only the leaders and members who participated in the illegal activity are held
responsible. If this were so, then the rest of the members who are innocent are still entitled to the benefits of collective
bargaining. There is thus no need to delay the holding of a certification election on the alleged ground that there is a
pending action of the respondent company against the petitioner union for 'violation of the strike ban' " (pp. 226-227,
rec.).
It is likewise pointed out by petitioner union that even if it would be ultimately confirmed that indeed petitioner union has
violated the strike ban, cancellation of the registration certificate of petitioner union is not the only disciplinary action or
sanction provided for under the law but other penalties may be imposed and not necessarily cancellation of its
registration certificate.
On January 12, 1981, pursuant to the resolution of this Court dated December 4, 1980, petitioner union filed its rejoinder
which reiterated the stand of the Solicitor General that the present case has become moot and academic by virtue of
the decision of the Minister of Labor affirming the decision of the BLR Director which ordered a certification election (p.
230, rec.).
109
It is quite obvious from the facts set forth above that the question of jurisdiction vigorously asserted by herein private
respondent Bank has become moot and academic.
What therefore remains for this Court to resolve is the issue as to whether or not a certification election should be held
under the circumstances obtaining in the present case. Is it proper to order a certification election despite the pendency
of the petition to cancel herein petitioner union's certificate of registration?
The Court rules in the affirmative. The pendency of the petition for cancellation of the registration certificate of herein
petitioner union is not a bar to the holding of a certification election. The pendency of the petition for cancellation of
the registration certificate of petitioner union founded on the alleged illegal strikes staged by the leaders and members
of the intervenor union and petitioner union should not suspend the holding of a certification election, because there is
no order directing such cancellation (cf. Dairy Queen Products Company of the Philippines, Inc. vs. Court of Industrial
Relations, et al. No. L-35009, Aug. 31, 1977). In said Dairy Queen case, one of the issues raised was whether the lower
court erred and concomitantly committed grave abuse of discretion in disregarding the fact that therein respondent
union's permit and license have been cancelled by the then Department of Labor and therefore could not be certified
as the sole and exclusive bargaining representative of the rank and file employees of therein petitioner company.
While the rationale of the decision was principally rested on the subsequent rescission of the decision ordering the
cancellation of the registration certificate of the respondent union, thereby restoring its legal personality and an the
rights and privileges accorded by law to a legitimate organization, this Court likewise declared: "There is no showing,
however, that when the respondent court issued the order dated December 8, 1971, certifying the Dairy Queen
Employees Association CCLU as the sole and exclusive bargaining representative of all regular rank and file employees
of the Dairy Queen Products Company of the Philippines, Inc., for purposes of collective bargaining with respect to
wages, rates of pay, hours of work and other terms and conditions for appointment, the order of cancellation of the
registration certificate of the Dairy Queen Employees Association-CC-1,U had become final" 78 SCRA 444-445. supra,
emphasis supplied).
It may be worthy to note also that the petition for cancellation of petitioner union's registration certificate based on the
alleged illegal strikes staged on October 12, 1979 and later November 5-7, 1979 was evidently intended to delay the
early disposition of the case for certification election considering that the same was apparently filed only after the
October 18, 1979 Order of Med-Arbiter Plagata which directed the holding of a certification election.
Aside from the fact that the petition for cancellation of the registration certificate of petitioner union has not yet been
finally resolved, there is another fact that militates against the stand of private respondent Bank, the liberal approach
observed by this Court as to matters of certification election. In a recent case, Atlas Free Workers Union (AFWU)-PSSLU
Local vs. Hon. Carmelo C. Noriel, et al. (No. 51005, May 26, 1981), "[T]he Court resolves to grant the petition (for
mandamus) in line with the liberal approach consistently adhered to by this Court in matters of certification election. The
whole democratic process is geared towards the determination of representation, not only in government but in other
sectors as well, by election. Thus, the Court has declared its commitment to the view that a certification election is
crucial to the institution of collective bargaining, for it gives substance to the principle of majority rule as one ' of the
basic concepts of a democratic policy" (National Mines and Allied Workers Union vs. Luna, 83 SCRA 610).
Likewise, Scout Ramon V. Albano Memorial College vs. Noriel, et al. (L-48347, Oct. 3, 1978, 85 SCRA 494, 497, 498), this
Court citing a long catena of cases ruled:
... The institution of collective bargaining is, to recall Cox, a prime manifestation of industrial democracy at work. The two
parties to the relationship, labor and management, make their own rules by coming to terms. That is to govern
themselves in matters that really count. As labor, however, is composed of a number of individuals, it is indispensable
that they be represented by a labor organization of their choice. Thus may be discerned how crucial is a certification
election. So our decisions from the earliest case of PLDT Employees Union v. PLDT Co. Free Telephone Workers Union to
the latest, Philippine Communications, Electronics & Electricity Workers' Federation (PCWF) v. Court of Industrial Relations,
110
had made clear. The same principle was again given expression in language equally emphatic in the subsequent case
of Philippine Association of Free Labor Unions v. Bureau of Labor Relations: 'Petitioner thus appears to be woefully lacking
in awareness of the significance of a certification election for the collective bargaining process. It is the fairest and most
effective way of determining which labor organization can truly represent the working force. It is a fundamental
postulate that the will of the majority, if given expression in an honest election with freedom on the part of the voters to
make their choice, is controlling. No better device can assure the institution of industrial democracy with the two parties
to a business enterprise, management and labor, establishing a regime of self-rule.' That is to accord respect to the
policy of the Labor Code, indisputably partial to the holding of a certification election so as to arrive in a manner
definitive and certain concerning the choice of the labor organization to represent the workers in a collective
bargaining unit (emphasis supplied).
It is true that under Section 8, Rule II, Book V of the Labor Code, cancellation of registration certificate may be imposed
on the following instances:
(a) Violation of Articles 234, 238, 239 and 240 of the Code;
(b) Failure to comply with Article 237 of the Code;
(c) Violation of any of the provisions of Article 242 of the Code; and
(d) Any violation of the provisions of this Book.
The aforementioned provisions should be read in relation to Article 273, Chapter IV, Title VIII which explicitly provides:
Art. 273. Penalties. — (a) Violation of any provision of this Title shall be punished by a fine of One Thousand Pesos [P l,
000.00] to Ten Thousand Pesos [P 10, 000.00] and/or imprisonment of one (1) year to five (5) years.
(b) Any person violating any provision of this Title shall be dealt with in accordance with General Order No. 2-A and
General Order No. 49.
(c) Violation of this Title by any legitimate labor organization shall be grounds for disciplinary action including, but
not limited to, the cancellation of its registration permit.
xxx xxx xxx
(emphasis supplied).
From the aforequoted provisions, We are likewise convinced that as it can be gleaned from said provisions, cancellation
of the registration certificate is not the only resultant penalty in case of any violation of the Labor Code.
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Certainly, the penalty imposable should be commensurate to the nature or gravity of the Legal activities conducted
and to the number of members and leaders of the union staging the illegal strike.
As aptly ruled by respondent Bureau of Labor Relations Director Noriel: "The rights of workers to self-organization finds
general and specific constitutional guarantees. Section 7, Article IV of the Philippine Constitution provides that the right
to form associations or societies for purposes not contrary to law shall not be abridged. This right is more pronounced in
the case of labor. Section 9, Article II (ibid) specifically declares that the State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure and just and humane conditions of work. Such constitutional
guarantees should not be lightly taken much less easily nullified. A healthy respect for the freedom of association
demands that acts imputable to officers or members be not easily visited with capital punishments against the
association itself" (p. 8, Annex "J"; p. 66, rec.).
WHEREFORE, THE WRIT OF mandamus PRAYED FOR IS GRANTED AND RESPONDENT BLR DIRECTOR NORIEL HEREBY
ORDERED TO CALL AND DIRECT THE IMMEDIATE HOLDING OF A CERTIFICATION ELECTION. NO COSTS.
SO ORDERED.
G.R. No. L-32853 September 25, 1981
JUAN S. BARRERA, (doing business under the firm and trade name, MACHINERY AND STEEL PRODUCTS ENGINEERING
MASPE petitioner,
vs.
THE HONORABLE COURT OF INDUSTRIAL RELATIONS, Philippine Associated Workers Union (PAWO) and MASPE WORKERS'
UNION, respondents.
FERNANDO C.J.:
It was the absence of any definite ruling at the time this petition was filed on the question of whether or not a pending
certification election proceeding may be dismissed or held in abeyance, there being such a motion on the part of the
employer Juan S. Barrera, doing business under the firm and trade name of Machinery and Steel Products Engineering
MASPE alleging an unfair labor practice against one of the contending parties, private respondent MASPE Workers
Union, the other being private respondent Philippine Associated Workers Union, that led this Court to give it due course.
The unfair labor practice imputed to such labor union consisted of failure to bargain collectively, aggravated by an
illegal strike. Respondent Court of Industrial Relations denied such a motion to dismiss, stating that the grounds therein
alleged "appear not to be indubitable A motion for reconsideration having proved futile, this petition was filed.
Subsequently, to be precise, in 1973, in the case of B. F. Goodrich Philippines, Inc. vs. Goodrich (Marikina Factory)
Confidential and Salaried Employees Union-NATU. 1 such a question was given an answer by this Court, one adverse to
the claim of petitioner. This petition, therefore, must be dismissed.
The case for petitioner was put most vigorously in the exhaustive and scholarly brief of its counsel, Manuel M. Crudo To
quote from its pertinent portion: "On September 22, 1970 the petitioner Barrera filed a motion to dismiss or hold case in
abeyance, in CIR Case No. 2759-MC. In said motion, we called attention to the admission of MASPE Workers Union as
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intervenor in the case. We stated that the intervenor union, its officers and members had committed various acts of
unfair labor practice and were on illegal strike punctuated by force, violence and intimidation. We called attention to
our formal charge of unfair labor practice against the intervenor union. We called attention to the fact that in the
charge of unfair labor practice among the reliefs prayed for were to declare respondents therein collectively and
individually guilty of unfair labor practice; to declare the strike, and other concerted actions resorted to in pursuance of
said unfair labor practice illegal to declare the MASPE Workers Union as consequently having lost all rights and privileges
accorded by law to a legitimate labor union; and to declare all individual respondents therein and others as having lost
their employment status by virtue of the illegality of the strike staged by them. We then pointed out that unless the case
for unfair labor practice against MASPE Workers Union, its officers and members is decided the status of that union and its
members who are respondents would be uncertain (i.e., in relation to the requested certification election and the
outcome thereof). * * * Unfortunately, the respondent Honorable Court of Industrial Relations denied our motion to
dismiss or hold case in abeyance. * * * ." 2 It remains only to be added that subsequently the Court of Industrial Relations
en banc denied a motion for reconsideration, failing "to find sufficient justification to alter or to modify the aforesaid
Order." 3
To repeat, the petition cannot prosper.
1. As set forth in the B. F. Goodrich Philippines, Inc. decision: "There is novelty in the specific question raised, as to
whether or not a certification election may be stayed at the instance of the employer, pending the determination of an
unfair labor practice case filed by it against certain employees affiliated with respondent-unions. That is a matter of
which this Court has not had an opportunity to speak on previously. What is settled law, dating from the case of
Standard Cigarette Workers' Union v. Court of Industrial Relations, decided in 1957, is that if it were a labor organization
objecting to the participation in a certification election of a company dominated union, as a result of which a
complaint for an unfair labor practice case against the employer was filed, the status of the latter union must be first
cleared in such a proceeding before such voting could take place." 4
2. This is the more relevant excerpt: "The unique situation before us, however, is exactly the reverse. It is
management that would have an unfair labor practice case filed by it for illegal strike engaged in by some of its
employees concluded, before it would agree to the holding of a certification election. That is the stand of petitioner. It
does not carry conviction. The reason that justifies the postponement of a certification election pending an inquiry, as to
the bona fides of a labor union, precisely calls for a different conclusion. If under the circumstances disclosed,
management is allowed to have its way, the result might be to dilute or fritter away the strength of an organization bent
on a more zealous defense of labor's prerogatives. The difficulties and obstacles that must be then hurdled would not be
lost on the rest of the personnel who had not as yet made up their minds one way or the other. This is not to say that
management is to be precluded from filing an unfair labor practice case. It is merely to stress that such a suit should not
be allowed to lend itself as a means, whether intended or not, to prevent a truly free expression of the will of the labor
group as to the organization that will represent it. It is not only the loss of time involved, in itself not likely to enhance the
prospect of respondent-unions, but also the fear engendered in the mind of an ordinary employee that management
has many weapons in its arsenal to bring the full force of its undeniable power against those of its employees dissatisfied
with things as they are. There is no valid reason then for the postponement sought. This is one instance that calls for the
application of the maxim, lex dilationes semper exhorret. Moreover, is there not in the posture taken by petitioner a
contravention of what is expressly set forth in the Industrial Peace Act, which speaks of the labor organizations
'designated or selected for the purpose of collective bargaining by the majority of the employees in an appropriate
collective bargaining unit [be the exclusive] representative of all the employees in such unit for the purpose of collective
bargaining.' The law clearly contemplates all the employees, not only some of them. As much as possible then, there is
to be no unwarranted reduction in the number of those taking part in a certification election, even under the guise that
in the meanwhile, which may take some time, some of those who are employees could possibly lose such status, by
virtue of a pending unfair labor practice case." 5
3. Even on the assumption that the vigorous condenmation of the strike and the picketing were attended by
violence, it does not automatically follow that thereby the strikers in question are no longer entitled to participate in the
certification election for having automatically lost their jobs. So it was made clear in another B.F. Goodrich decision: 6
What was set forth in the facts as found by respondent Judge Salvador would indicate that it was during the picketing,
certainly not peaceful, that the imputed acts of violence did occur. It cannot be ignored, however, that there were
injuries on both sides because management did not, understandably, play a passive role confronted as it was with the
unruly disruptive tactics of labor. This is not, by any means, to condone activities of such character, irrespective of the
parties responsible. It is merely to explain what cannot be justified. Nonetheless, did the acts in question call for an
113
automatic finding of illegality? Again, the order issued on February 4, 1972 appeared to be oblivious of a 1971 decision
of this Court, Shell Oil Workers' Union v. Shell Company of the Philippines, Ltd. There it was clearly held: 'A strike otherwise
valid, if violent in character, may be placed beyond the pale. Care is to be taken, however, especially where an unfair
labor practice is involved, to avoid stamping it with illegality just because it is tainted by such acts. To avoid rendering
illusory the recognition of the right to strike, responsibility in such a case should be individual and not collective. A
different conclusion would be called for, of course, if the existence of force while the strike lasts is pervasive and
widespread, consistently and deliberately resorted to as a matter of policy. It could be reasonably concluded then that
even if justified as to ends, it becomes illegal because of the means employed.' It must be pointed out likewise that the
facts as there found would seem to indicate a greater degree of violence. Thus: 'Respondent Court must have been
unduly impressed by the evidence submitted by the Shell Company to the effect that the strike was marred by acts of
force, intimidation and violence on the evening of June 14 and twice in the mornings of June 15 and 16, 1967 in Manila.
Attention was likewise called to the fact that even on the following day, with police officials stationed at the strike bound
area, molotov bombs did explode and the streets were obstructed witlh wooden planks containing protruding nails.
Moreover, in the branches of the Shell Company in Iloilo City as well as in Bacolod, on dates unspecified, physical injuries
appeared to have been inflicted on management personnel. Respondent Court in the appealed decision did penalize
with loss of employment the ten individuals responsible for such acts. Nor is it to be lost sight of that before the
certification on June 27, 1967, one month had elapsed during which the Union was on strike. Except on those few days
specified then, the Shell Company could not allege that the strike was conducted in a manner other than peaceful
Under the circumstances, it would be going too far to consider that it thereby became illegal.' Then, mention was made
of a decision in Insular Life Assurance Co., Ltd. Employees' Association vs. Insular Life Assurance Co., Ltd. [where] there is
the recognition by this Court, speaking through Justice Castro, of picketing as such being "inherently explosive." It is thus
clear that not every form of violence suffices to affix the seal of illegality on a strike or to cause the loss of employment by
the guilty party. " 7
WHEREFORE, this petition is dismissed and the appealed order affirmed. No costs.
Aquino, Guerrero, Abad Santos and De Castro, JJ., concur.
Barredo, J., is on leave.
Concepcion Jr., J., is on leave.
[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.
DECISION
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 Labor (NFL) - 235

114
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
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
115
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 companys 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 employers) 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, petitioners 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-
116
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
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.
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.

117
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).
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).
118
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.
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.
119
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:
120
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.
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.

121
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:
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
122
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
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.
123
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 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
124
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.
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
125
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.
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.
126
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.
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).
127
PREMISES CONSIDERED, the petition is DISMISSED for utter lack of merit.
SO ORDERED.
Narvasa, C.J., Padilla and Regalado, JJ. concur.
Nocon, J., is on leave.
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.:
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.
128
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
129
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.
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.
Cruz, Griño-Aquino and Medialdea, JJ., concur.

130
G . R . No . 118915 . February 4 , 1997
CAPITOL MEDICAL CENTER ALLIANCE 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 .
DECISION
HERMOSISIMA , JR . , J .
This petition for certiorari and prohibition seeks to reverse 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 .
On May 29 , 1992 , Med - Arbiter Manases T . Cruz issued an order granting the petition for certification
election . [3] Respondent 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.
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.
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 .
131
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.
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.
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
Respondent union appealed 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.
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 , . xxx 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.
132
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.
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 for a fair hearing was a clear case of a 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 :
133
A deadlock is xxx the counteraction of things producing entire stoppage ; xxx There is a deadlock when
there is a complete blocking or stoppage resulting from the action of equal and opposed forces xxx . The word is
synonymous with the word impasse , which xxx 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.
As correctly ratiocinated by public respondent , to wit :
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.
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 certified bargaining agent , there was no reasonable effort in good faith on the
employer 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 :
xxx prior to the filing of the petition for election in this case , there was no such bargaining deadlock xx (
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 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.
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
134
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.
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
135
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 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.
SECOND DIVISION
136
YOKOHAMA TIRE PHILIPPINES, INC.,
Petitioner,
- versus -
YOKOHAMA EMPLOYEES UNION,
Respondent.
G.R. No. 159553
Present:
QUISUMBING, J., Chairperson,
CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
Promulgated:
December 10, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:
In this appeal, petitioner Yokohama Tire Philippines, Inc. (hereafter Yokohama, for brevity) assails the Decision[1] dated
April 9, 2003 of the Court of Appeals in CA-G.R. SP No. 74273 and its Resolution[2] 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-Arbiters 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:
137
YOKOHAMA EMPLOYEES UNION - 131
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 XII[10] 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 Yokohamas insistence on their inclusion lends suspicion that it wanted
138
to create a company union, and ruled that Yokohama had no right to intervene in the certification election. Finally, it
ruled that the unions 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 Yokohamas
motion for reconsideration.[11]
In a manifestation with motion to annul the DOLE Secretarys entry of judgment filed with this Court on October 16, 2003,
Yokohama attached a Resolution[12] dated April 25, 2003 of the Med-Arbiter. The resolution denied Yokohamas 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 judgment[13] issued by the DOLE stating that the April 25, 2003 Resolution of the Med-Arbiter was
affirmed by the DOLE Secretarys 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 SECRETARYS] DECLARATION THAT
[THE UNIONS] 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.
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 Arbiters February 28, 2003 Decision was resolved by the NLRC only on August 29, 2003.[19]
Even the new rule[20] has explicitly stated that without a final judgment declaring the legality of dismissal, dismissed
employees are eligible or qualified voters. Thus,
139
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.
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 189[21] votes in favor of No Union.
We also note that the certification election is already a fait accompli, and clearly petitioners 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.
[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.
DECISION
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 NFLs 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 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:

140
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
TRUST KILUSAN ----------------------- 5
National Federation of Labor (NFL)---- 876
Southern Philippines Federation
of Labor ------------------------------------ 4
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.
141
On January 10, 1990, Acting Labor Secretary Dionisio dela Serna directed the Med-Arbiter, Phibun D. Pura, to investigate
the companys 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 a 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.
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 HPIs 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
142
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 27, 1988. After such withdrawal, it cannot
revive its lost personality as a party to the present case through the mere expedience of a 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 Arbiters 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 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.
Petitioners 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
143
the case here and so the DOLE should not have given due course to private respondents 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:
SECTION 3. Representation officer may rule on any on-the-spot questions. - 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.
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
144
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 record 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 respondents 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.
145
As to the letters not being verified, suffice it to say that technical rules of evidence are not binding in labor cases.
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 precincts. 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.
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.
146
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.
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.
147
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
148
officer 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.
INSULAR HOTEL EMPLOYEES UNION-NFL,
Petitioner,
- versus -
149
WATERFRONT INSULAR HOTEL DAVAO,
Respondent.
G.R. Nos. 174040-41
Present:
CARPIO, J., Chairperson,
VELASCO, JR., *
PERALTA,
BERSAMIN, ** and
ABAD, JJ.
Promulgated:
September 22, 2010
x-----------------------------------------------------------------------------------------x
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
Decision[2] 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:
150
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 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 letter[6] 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 x[7]
In another letter[8] 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 letter[10] 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.
151
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 P30.00 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.
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 letter[12] 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 Manifesto[13] concretizing 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.
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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 Agreement[17] 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]
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 Opposition[22] where the same was
captioned:
NATIONAL FEDERATION OF LABOR
And 79 Individual Employees, Union Members,
Complainants,
153
-versus-
Waterfront Insular Hotel Davao,
Respondent.
In said Opposition, Cullo reiterated that the complainants were not representing IHEU-NFL, to wit:
xxxx
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 Reconsideration[25] 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, 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
154
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 Comment[31] dated June 5, 2003.
On June 23, 2003, respondent filed its Reply.[32]
Later, respondent filed a Motion for Inhibition[33] alleging AVA Olvida's bias and prejudice towards the cause of the
employees. In an Order[34] 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 letter[35] 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 Notice[36] 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 Decision[37] 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;
155
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 attorneys fees in an amount equivalent to ten percent (10%) of
whatever total amount that the workers union may receive representing individual wage differentials.
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 Decision[39] 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.
156
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 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 Mediation[46] 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:
157
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 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:
158
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 rarelyonly
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 Courts 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
Employment[56] is enlightening, thus:
159
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 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 Certification[59] 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:
160
A careful analysis of applicant's audited financial statements showed that during the period ending December 31, 1999,
it registered retained earnings amounting to P8,661,260.00. 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]
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 P48,409,385.00. 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. NLRC[65] is instructive, to wit:

161
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 latters 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. 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 PALs 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
unions 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?
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.
162
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]
163
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.
G.R. No. L-45824 June 19, 1985
VOLKSCHEL LABOR UNION, petitioner,
vs.
BUREAU OF LABOR RELATIONS, ASSOCIATED LABOR UNION FOR METAL, WORKERS, DMG, INC., PEOPLE'S CAR, INC.,
KARBAYAN INC., and RTC TRADING, INC., respondents.
Ignacio P. Lacsina for petitioner.
William D. Dichoso for respondent DMG, Inc.
Abraham B. Drapiza for private respondent.
CUEVAS, J.:
Petition for certiorari to review the Resolutions dated January 25, 1977 and March 14, 1977 of the Bureau of Labor
Relations.
On April 25. 1977, however, a Supplemental Petition was filed seeking the issuance of —
(1) A preliminary mandatory injunction commanding respondents to return to petitioner the union dues amounting
to about P55,000.00 lawfully pertaining to it but illegally levied upon, collected and handed over by respondent Bureau,
acting through the NLRC sheriff, to respondent Associated Labor Union for Metal workers, with the collusion of
respondents DMG, Inc., Karbayan, Inc. and RTC Machineries, Inc.;
(2) A preliminary restraining order prohibiting respondents from making further delivery to respondent Associated
Labor Union for Metal workers of Union dues collected or to be collected through check-off from the wages of
petitioner's members by respondents, DMG, Inc., Karbayan, Inc., RTC Machineries, Inc., and People's Car, Inc., under or
by virtue of the questioned writ of execution issued by respondent Bureau, dated April 4, 1977.
164
Petitioner was once affiliated with the Associated Labor Union for Metal Workers (ALUMETAL for short). On August 1, 1975,
both unions, using the name Volkschel Labor Union Associated Labor Union for Metal Workers, jointly entered into a
collective bargaining agreement with respondent companies. One of the subjects dealt with is the payment of union
dues which is provided for in Section 3, Article 1, of the CBA, which reads:
Section 3. CHECK-OFF. — The COMPANY agrees to make payroll deductions not softener than twice a month of
UNION membership dues and such special assessments fees or fines as may be duly authorized by the UNION, provided
that the same is covered by the individual check-off authorization of the UNION members. All said deductions shall be
promptly transmitted within five (5) days by the COMPANY to the UNION Treasurer. The COMPANY shall prepare two (2)
checks. One (1) check will be under the name of the local union as their local fund including local special assessment
funds and the other check will be for the ALU Regional Office regarding the remittance of the UNION dues deduction.
On March 10, 1976, a majority of petitioner's members decided to disaffiliate from respondent federation in order to
operate on its own as an independent labor group pursuant to Article 241 (formerly Article 240) of the Labor Code of the
Philippines, the pertinent portion of which reads:
Incumbent affiliates of existing federations or national unions may disaffiliate only for the purpose of joining a federation
or national union in the industry or region in which it properly belongs or for the purpose of operating as an independent
labor group.
Accordingly, a resolution was adopted and signed by petitioner's members revoking their check-off authorization in
favor of ALUMETAL and notices thereof were served on ALUMETAL and respondent companies.
Confronted with the predicament of whether or not to continue deducting from employees' wages and remitting union
dues to respondent, ALUMETAL which wrote respondent companies advising them to continue deducting union dues
and remitting them to said federation, respondent companies sought the legal opinion of the respondent Bureau as
regards the controversy between the two unions. On November 11, 1976, Med-Arbiter George A. Eduvalla of respondent
Bureau rendered a Resolution which in effect found the disaffiliation legal but at the same time gave the opinion that,
petitioner's members should continue paying their dues to ALUMETAL in the concept of agency fees. 1
From the said Resolution, of the Med-Arbiter both petitioner and respondent ALUMETAL appealed to the Director of
respondent Bureau. Petitioner' contended that the Med-Arbiter's opinion to the effect that petitioner's members
remained obligated to pay dues to respondent ALUMETAL was inconsistent with the dispositive finding that petitioner's
disaffiliation from ALUMETAL was valid. ALUMETAL, on the other hand, assailed the Resolution in question asserting that
the disaffiliation should have been declared contrary to law.
On January 25, 1977, respondent Bureau, through its Acting Director, Francisco L. Estrella, REVERSED the Med-Arbiter's
Resolution., and declared that the Bureau recognized "the continued affiliation of Volkschel Labor Union with the
Associated Labor Union for Metal Workers." 2
Petitioner appealed the Acting Director's Resolution to the Secretary of Labor know Minister of Labor and Employment)
who, treating the appeal as a Motion for Reconsideration referred the same back to respondent Bureau On March 14,
1977, the Bureau denied the appeal for lack of merit.
Hence, the instant petition.

165
Meanwhile, on April 4, 1977, on motion of ALUMETAL, the then Acting Secretary of Labor, Amado Gat Inciong, issued a of
execution commanding the Sheriff of the National Labor Relations Commission to enforce and execute the order of
January 25, 1977, which has become final and executory. 3 Pursuant thereto, the NLRC Sheriff enforced and
implemented the Order of January 25, 1977, as a result of which respondent companies turned over and handed to
respondent federation the union dues and other assessments in accordance with the check-off provision of the CBA,
From the pleadings filed and arguments of counsel, the following issues present themselves for this Court's resolution.
Is petitioner union's disaffiliation from respondent federation valid?
II
Do respondent companies have the right to effect union dues collections despite revocation by the employees of the
check-off authorization? and
III
Is respondent federation entitled to union dues payments from petitioner union's members notwithstanding their
disaffiliation from said federation?
We resolve the first issue in the affirmative.
The right of a local union to disaffiliate from its mother union is well-settled. In previous cases, it has been repeatedly held
that a local union, being a separate and voluntary association, is free to serve the interest of all its members including
the freedom to disaffiliate when circumstances warrant. 4 This right is consistent with the Constitutional guarantee of
freedom of association (Article IV, Section 7, Philippine Constitution).
Petitioner contends that the disaffiliation was not due to any opportunists motives on its part. Rather it was prompted by
the federation's deliberate and habitual dereliction of duties as mother federation towards petitioner union. Employees'
grievances were allegedly left unattended to by respondent federation to the detriment of the employees' rights and
interests.
In reversing the Med-Arbiter's resolution, respondent Bureau declared: the Department of Labor is set on a task to
restructure the labor movement to the end that the workers will unite themselves along industry lines. Carried to its
complete fruition, only one union for every industry will remain to bargain collectively for the workers. The clear policy
therefore even now is to conjoin workers and worker groups, not to dismember them. 5 This policy is commendable.
However, we must not lose sight of the constitutional mandate of protecting labor and the workers' right to self-
organization. In the implementation and interpretation of the provisions of the Labor Code and its implementing
regulations, the workingman's welfare should be the primordial and paramount consideration. In the case at bar, it
would go against the spirit of the labor law to restrict petitioner's right to self-organization due to the existence of the
CBA. We agree with the Med-Arbiter's opinion that "A disaffiliation does not disturb the enforceability and administration
166
of a collective agreement; it does not occasion a change of administrators of the contract nor even an amendment of
the provisions thereof." 6 But nowhere in the record does it appear that the contract entered into by the petitioner and
ALUMETAL prohibits the withdrawal of the former from the latter.
This now brings us to the second issue. Under Section 3, Article I, of the CBA, the obligation of the respondent companies
to deduct and remit dues to ALUMETAL is conditioned on the individual check-off authorization of petitioner's members,
In other words, ALUMETAL is entitled to receive the dues from respondent companies as long as petitioner union is
affiliated with it and respondent companies are authorized by their employees (members of petitioner union) to deduct
union dues. Without said affiliation, the employer has no link to the mother union. The obligation of an employee to pay
union dues is coterminous with his affiliation or membership. "The employees' check-off authorization, even if declared
irrevocable, is good only as long as they remain members of the union concerned." 7 A contract between an employer
and the parent organization as bargaining agent for the employees is terminated by the disaffiliation of the local of
which the employees are members. 8 Respondent companies therefore were wrong in continuing the check-off in favor
of respondent federation since they were duly notified of the disaffiliation and of petitioner's members having already
rescinded their check-off authorization.
With the view we take on those two issues, we find no necessity in dwelling further on the last issue. Suffice it to state that
respondent federation is not entitled to union dues payments from petitioner's members. "A local union which has validly
withdrawn from its affiliation with the parent association and which continues to represent the employees of an
employer is entitled to the check-off dues under a collective bargaining contract." 9
WHEREFORE, the Resolutions of the Bureau of Labor Relations of January 25, 1977 and March 14, 1977 are REVERSED and
SET ASIDE. Respondent ALUMETAL is ordered to return to petitioner union all the union dues enforced and collected
through the NLRC Sheriff by virtue of the writ of execution dated April 4, 1977 issued by respondent Bureau.
No costs.
SO ORDERED.
[G.R. No. 127374. January 31, 2002]
PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and FRANCISCO DAKILA, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, LABOR ARBITER EMERSON TUMANON, PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU) SEPTEMBER
(now UNIFIED PAFLU) and SERAFIN AYROSO, respondents.
[G.R. No. 127431. January 31, 2002]
PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW, MACARIO CABANIAS, PEPITO RODILLAS, SHARON CASTILLO,
DANILO CARBONEL, MANUEL EDA, ROLANDO FELIX, JOCELYN FRONDA, RICARDO LUMBA, JOSEPH MARISOL, NERISA
MORTEL, TEOFILO QUIRONG, LEONARDO REYES, MANUEL CADIENTE and HERMINIA RIOSA, petitioners, vs. PHILIPPINE
ASSOCIATION OF FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and NATIONAL LABOR RELATIONS
COMMISSION, SECOND DIVISION, respondents.
DECISION
BELLOSILLO, J.:
167
This is a petition for certiorari[1] seeking to set aside the 31 July 1996 Decision[2] of the National Labor Relations
Commission affirming the 30 June 1995 Decision of the Labor Arbiter holding petitioners Philippine Skylanders, Inc., Mariles
C. Romulo[3] and Francisco Dakila as well as the elected officers of the Philippine Skylanders Employees and Workers
Association-PAFLU[4] guilty of unfair labor practice and ordering them to pay private respondent Philippine Association
of Free Labor Union (PAFLU) September[5] P150,000.00 as damages. Petitioners likewise seek the reversal of the 31
October 1996 Resolution of the NLRC denying their Motion for Reconsideration.
In November 1993 the Philippine Skylanders Employees Association (PSEA), a local labor union affiliated with the
Philippine Association of Free Labor Unions (PAFLU) September (PAFLU), won in the certification election conducted
among the rank and file employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders Employees
Association-WATU (PSEA-WATU) immediately protested the result of the election before the Secretary of Labor.
Several months later, pending settlement of the controversy, PSEA sent PAFLU a notice of disaffiliation citing as reason
PAFLU's supposed deliberate and habitual dereliction of duty toward its members. Attached to the notice was a copy of
the resolution adopted and signed by the officers and members of PSEA authorizing their local union to disaffiliate from
its mother federation.
PSEA subsequently affiliated itself with the National Congress of Workers (NCW), changed its name to Philippine
Skylanders Employees Association - National Congress of Workers (PSEA-NCW), and to maintain continuity within the
organization, allowed the former officers of PSEA-PAFLU to continue occupying their positions as elected officers in the
newly-forged PSEA-NCW.
On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement with PSI which was immediately registered
with the Department of Labor and Employment.
Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU Secretary General Serafin Ayroso wrote Mariles C.
Romulo requesting a copy of PSI's audited financial statement. Ayroso explained that with the dismissal of PSEA-WATUs
election protest the time was ripe for the parties to enter into a collective bargaining agreement.
On 30 July 1994 PSI through its personnel manager Francisco Dakila denied the request citing as reason PSEA's
disaffiliation from PAFLU and its subsequent affiliation with NCW.
Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin Ayroso filed a complaint for unfair labor practice
against PSI, its president Mariles Romulo and personnel manager Francisco Dakila. PAFLU alleged that aside from PSIs
refusal to bargain collectively with its workers, the company through its president and personnel manager, was also
liable for interfering with its employees' union activities.[6]
Two (2) days later or on 6 October 1994 Ayroso filed another complaint in behalf of PAFLU for unfair labor practice
against Francisco Dakila. Through Ayroso PAFLU claimed that Dakila was present in PSEA's organizational meeting
thereby confirming his illicit participation in union activities. Ayroso added that the members of the local union had
unwittingly fallen into the manipulative machinations of PSI and were lured into endorsing a collective bargaining
agreement which was detrimental to their interests.[7] The two (2) complaints were thereafter consolidated.
On 1 February 1995 PAFLU amended its complaint by including the elected officers of PSEA-PAFLU as additional party
respondents. PAFLU averred that the local officers of PSEA-PAFLU, namely Macario Cabanias, Pepito Rodillas, Sharon
Castillo, Danilo Carbonel, Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol, Nerisa Mortel,
168
Teofilo Quirong, Leonardo Reyes, Manuel Cadiente, and Herminia Riosa, were equally guilty of unfair labor practice
since they brazenly allowed themselves to be manipulated and influenced by petitioner Francisco Dakila.[8]
PSI, its president Mariles C. Romulo, and its personnel manager Dakila moved for the dismissal of the complaint on the
ground that the issue of disaffiliation was an inter-union conflict which lay beyond the jurisdiction of the Labor Arbiter. On
the other hand, PSEA-NCW took the cudgels for its officers who were being sued in their capacities as former officers of
PSEA-PAFLU and asserted that since PSEA was no longer affiliated with PAFLU, Ayroso or PAFLU for that matter had no
personality to file the instant complaint. In support of this assertion, PSEA-NCW submitted in evidence a Katunayan
signed by 111 out of 120 rank and file employees of PSI disauthorizing Ayroso or PAFLU from instituting any action in their
behalf.[9]
In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's disaffiliation from PAFLU invalid and held PSI,
PSEA-PAFLU and their respective officers guilty of unfair labor practice. The Decision explained that despite PSEA-PAFLU's
status as the sole and exclusive bargaining agent of PSI's rank and file employees, the company knowingly sanctioned
and confederated with Dakila in actively assisting a rival union. This, according to the Labor Arbiter, was a classic case of
interference for which PSI could be held responsible. As PSEA-NCW's personality was not accorded recognition, its
collective bargaining agreement with PSI was struck down for being invalid. Ayroso's legal personality to file the
complaint was sustained on the ratiocination that under the Labor Code no petition questioning the majority status of
the incumbent bargaining agent shall be entertained outside of the sixty (60)-day period immediately before the expiry
date of such five (5)-year term of the collective bargaining agreement that the parties may enter into. Accordingly,
judgment was rendered ordering PSI, PSEA-PAFLU and their officers to pay PAFLU P150,000.00 in damages.[10]
PSI, PSEA and their respective officers appealed to the National Labor Relations Commission (NLRC). But the NLRC
upheld the Decision of the Labor Arbiter and conjectured that since an election protest questioning PSEA-PAFLU's
certification as the sole and exclusive bargaining agent was pending resolution before the Secretary of Labor, PSEA
could not validly separate from PAFLU, join another national federation and subsequently enter into a collective
bargaining agreement with its employer-company.[11]
Petitioners separately moved for reconsideration but both motions were denied. Hence, these petitions for certiorari filed
by PSI and PSEA-NCW together with their respective officers pleading for a reversal of the NLRC's Decision which they
claimed to have been rendered in excess of jurisdiction. In due time, both petitions were consolidated.
In these petitions, petitioner PSEA together with its officers argued that by virtue of their disaffiliation PAFLU as a mere
agent had no authority to represent them before any proceedings. They further asserted that being an independent
labor union PSEA may freely serve the interest of all its members and readily disaffiliate from its mother federation when
circumstances so warrant. This right, they averred, was consistent with the constitutional guarantee of freedom of
association.[12]
For their part, petitioners PSI, Romulo and Dakila alleged that their decision to bargain collectively with PSEA-NCW was
actuated, to a large extent, by PAFLU's behavior. Having heard no objections or protestations from PAFLU relative to
PSEA's disaffiliation, they reckoned that PSEA's subsequent association with NSW was done bona fide.[13]
The Solicitor General filed a Manifestation in Lieu of Comment recommending that both petitions be granted. In his
Manifestation, the Solicitor General argued against the Labor Arbiter's assumption of jurisdiction citing the following as
reasons: first, there was no employer-employee relationship between complainant Ayroso and PSI over which the Labor
Arbiter could rightfully assert his jurisdiction; second, since the case involved a dispute between PAFLU as mother
federation and PSEA as local union, the controversy fell within the jurisdiction of the Bureau of Labor Relations; and lastly,
the relationship of principal-agent between PAFLU and PSEA had been severed by the local union through the lawful
exercise of its right of disaffiliation.[14]
169
Stripped of non-essentials, the fundamental issue tapers down to the legitimacy of PSEA's disaffiliation. To be more
precise, may PSEA, which is an independent and separate local union, validly disaffiliate from PAFLU pending the
settlement of an election protest questioning its status as the sole and exclusive bargaining agent of PSI's rank and file
employees?
At the outset, let it be noted that the issue of disaffiliation is an inter-union conflict the jurisdiction of which properly lies
with the Bureau of Labor Relations (BLR) and not with the Labor Arbiter.[15] Nonetheless, with due recognition of this fact,
we deem it proper to settle the controversy at this instance since to remand the case to the BLR would only mean
intolerable delay for the parties.
The right of a local union to disaffiliate from its mother federation is not a novel thesis unillumined by case law. In the
landmark case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.[16] we upheld the right of local unions to
separate from their mother federation on the ground that as separate and voluntary associations, local unions do not
owe their creation and existence to the national federation to which they are affiliated but, instead, to the will of their
members. The sole essence of affiliation is to increase, by collective action, the common bargaining power of local
unions for the effective enhancement and protection of their interests. Admittedly, there are times when without succor
and support local unions may find it hard, unaided by other support groups, to secure justice for themselves.
Yet the local unions remain the basic units of association, free to serve their own interests subject to the restraints
imposed by the constitution and by-laws of the national federation, and free also to renounce the affiliation upon the
terms laid down in the agreement which brought such affiliation into existence.
Such dictum has been punctiliously followed since then.[17]
Upon an application of the aforecited principle to the issue at hand, the impropriety of the questioned Decisions
becomes clearly apparent. There is nothing shown in the records nor is it claimed by PAFLU that the local union was
expressly forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway. As
such, the pendency of an election protest involving both the mother federation and the local union did not constitute a
bar to a valid disaffiliation. Neither was it disputed by PAFLU that 111 signatories out of the 120 members of the local
union, or an equivalent of 92.5% of the total union membership supported the claim of disaffiliation and had in fact
disauthorized PAFLU from instituting any complaint in their behalf. Surely, this is not a case where one (1) or two (2)
members of the local union decided to disaffiliate from the mother federation, but it is a case where almost all local
union members decided to disaffiliate.
It was entirely reasonable then for PSI to enter into a collective bargaining agreement with PSEA-NCW. As PSEA had
validly severed itself from PAFLU, there would be no restrictions which could validly hinder it from subsequently affiliating
with NCW and entering into a collective bargaining agreement in behalf of its members.
There is a further consideration that likewise argues for the granting of the petitions. It stands unchallenged that PAFLU
instituted the complaint for unfair labor practice against the wishes of workers whose interests it was supposedly
protecting. The mere act of disaffiliation did not divest PSEA of its own personality; neither did it give PAFLU the license to
act independently of the local union. Recreant to its mission, PAFLU cannot simply ignore the demands of the local
chapter and decide for its welfare. PAFLU might have forgotten that as an agent it could only act in representation of
and in accordance with the interests of the local union. The complaint then for unfair labor practice lodged by PAFLU
against PSI, PSEA and their respective officers, having been filed by a party which has no legal personality to institute the
complaint, should have been dismissed at the first instance for failure to state a cause of action.
Policy considerations dictate that in weighing the claims of a local union as against those of a national federation, those
of the former must be preferred. Parenthetically though, the desires of the mother federation to protect its locals are not
170
altogether to be shunned. It will however be to err greatly against the Constitution if the desires of the federation would
be favored over those of its members. That, at any rate, is the policy of the law. For if it were otherwise, instead of
protection, there would be disregard and neglect of the lowly workingmen.
WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine Skylanders and Workers Association-NCW,
together with their respective officers, are GRANTED. The Decision of the National Labor Relations Commission of 31 July
1996 affirming the Decision of the Labor Arbiter of 30 June 1995 holding petitioners Philippine Skylanders and Workers
Association-NCW, Philippine Skylanders, Inc. and their respective officers, guilty of unfair labor practice and ordering
them to pay damages to private respondent Philippine Association of Free Labor Unions (PAFLU) September (now
UNIFIED PAFLU) as well as the Resolution of 31 October 1996 denying reconsideration is REVERSED and SET ASIDE. No
costs.
SO ORDERED.
G.R. No. L-41955 December 29, 1977
ELISCO-ELIROL LABOR UNION (NAFLU) and its OFFICERS AND MEMBERS OF THE BOARD OF DIRECTORS, petitioners
vs.
CARMELO NORIEL, in his capacity as Director of the Bureau of Labor Relations, ELIZALDE STEEL CONSOLIDATED, INC. and
NATIONAL FEDERATION OF LABOR UNIONS (NAFLU), respondents.
Villaluz, Villaluz & Villaluz, Padilla Law Offices and Rizalindo V. Diaz for petitioners.
Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor Reynato S. Puno and Solicitor Ramon A. Barcelona
respondent Director.
Rolando M. Olalia for respondent Union (NAFLU).
TEEHANKEE, J.:
The Court sets aside respondent director's appealed resolution and rules in accordance with the prevailing law and
settled jurisprudence that the petitioner union consisting of the members-employees of respondent corporation is the
principal party to the collective bargaining agreement (rather than the respondent mother union which is merely its
agent) and is therefore entitled to be recognized as the sole and exclusive bargaining representative entitled to
administer and enforce the collective bargaining agreement with the employer corporation.
The undisputed antecedent facts which gave rise to the present petition are stated in the petition as follows:
2. That sometime on February 1974, petitioner-Elisco Elirol Labor Union (NAFLU), negotiated and executed a collective
bargaining agreement with respondent-Elizalde Steel Consolidated, Inc.1
3. That upon verification by individual petitioners at the Registration division, Bureau of Labor Relations, Department of
Labor, the Elisco-Elirol Labor Union (NAFLU), the contracting party in said collective bargaining agreement, was not then
registered and therefore not entitled to the benefits and privileges embodied in said collective bargaining agreement;
thus on March 3, 1975, the member of petitioner-appellant union in a general membership meeting decided in a
resolution to register their union to protect and preserve the integrity and inviolability of the collective bargaining
agreement between the Elisco-Elirol Labor Union (NAFLU) and the Elizalde Steel Consolidated, Inc.
4. That said resolution of the members of petitioner-appellant union was passed upon by the officers and members of the
Board of Directors on May 20, 1975, at a special meeting called for the purpose, resolution No. 6, s. 1975 was approved
requesting the Acting Directors, Registration Division, Bureau of Labor Relations, to register the union Elisco-Elirol Labor
Union (NAFLU).
5. That by virtue of resolution No. 6, Petitioner-appellant union applied for registration with the Bureau of Labor Relations,
hence on May 28, 1975, Certificate of Registration No. 8511-IP was issued by said Office.
171
6. That with the issuance of the certificate of registration petitioner-appellant acquired a personality separate and
distinct from any other labor union.
7. That steps were taken by petitioner-appellant to enforce the collective bargaining agreement as the principal party
to the same representing the workers covered by such agreement immediately after the issuance of the certificate of
registration.
8. That on June 10, 1975, at a special meeting called for the purpose, the general membership of petitioner union
decided that their mother union, the National Federation of Labor Unions, can no longer safeguard the rights of its
members insofar as working conditions and other terms of employment are concerned and that the interest and welfare
of petitioner can be served best if it will stay independent and disaffiliated from said mother union, hence, the general
membership adopted a resolution to disaffiliate from the National Federation of Labor Unions.
9. That on June 11, 1975, petitioner, acting through its President Hilario Riza informed respondents of said disaffiliation by
means of a letter, and subsequently requested respondents to recognize petitioner as the sole and exclusive bargaining
representative of the employees thereof.
10. That respondent without any justifiable reason refused and continues to refuse to recognize petitioner as the sole and
exclusive bargaining representative of its employees, and, now actually dismissed the petitioner union's officers and
board members.2 In this connection, a complaint for unfair labor practice was filed by petitioners against respondents
for the latter's refusal to bargain collectively with petitioner, which complaint is presently docketed as Case No. LR-RO4-
6-1662.
11. That by virtue of said refusal of respondent company to recognize petitioner as the sole and exclusive bargaining
representative of the employees, petitioners filed a petition before the Bureau of Labor Relations, Department of Labor
on July 2, 1975, with Case No. LR-861 against respondents Elizalde Steel Consolidated, Inc. and the National Federation
of Labor Unions be ordered to stop from presenting itself as the collective bargaining agent and pursuant thereto, a writ
of preliminary mandatory and prohibitory injunction be issued.
12. That on August 19, 1975. the Bureau of Labor Relations, through Med-Arbiter Reynaldo B. Carta, before whom the
case was beard, issued an Order dismissing the petition for lack of merit.
On appeal to respondent Director of the Bureau of Labor Relations, said respondent issued his Resolution of October 30,
1975 affirming the dismissal of petitioner-union's petition as follows:
On February, 1974 the members of the petitioner union who were then yet affiliated with the National Association of Free
Labor Union negotiated and executed with the respondent company a collective bargaining agreement with expiry
date in November, 1976.
On May 28, 1975, after the same members, by valid resolution of the Board of directors and approved by the general
membership, have formed themselves into an i t organization and applied for registration as a union, a certificate of
registration was issued by the Department of Labor. And on June 10, 1975 again by a valid resolution the same members
disaffiliated with the NAFLU.
The issue for resolution is —
Which of the two unions should be recognized as the sole and exclusive bargaining representative of the employees
and ultimately recognized to administer and supervise the enforcement of the collective bargaining agreement.
Petitioner-union contends that it having the necessary interest and being the real party must be the sole union to be
recognized and given authority to bargain with the company.
Setting aside jurisprudence and the collective bargaining agreement of the parties, the appellant is correct. For to grant
to the former mother union (NAFLU) the authority to administer and enforce their collective bargaining agreement
without presumably any members in the bargaining unit is quite absurd. But to transfer also the authority to the newly
formed union although the members of the same were the same members who composed then the local chapter of
the mother union is also in violation of the CBA particularly article IV which is the union security clause, wherein it is a
condition for a continued employment in the company to maintain membership in the Union. Theoreticallytherefore,
when the employees disaffiliated from the mother union and formed themselves into a new union, their status as
employees was also terminated. As such they could not therefore absolutely and legally claim that they still comprise the
majority of the bargaining unit.
Secondly, to vest, upon the new union the authority to bargain is in violation of the whole CBA, under the theory that
when the mother union (NAFLU) entered and executed the same in its separate and distinct personality aside from the
172
people composing the same. In fine, the CBA then was executed by and between the company and the (NAFLU) with
the latter as an entity having its own capacity and personality different from the members composing the same.
Lastly, to preserve and avoid unstability and disorder in the labor movement as correctly ruled by the med-arbiter, the
status quo should be preserved, there being no compelling reason to alter the same.3
Hence, the petition at bar. We find the petition to be clearly meritorious and reverse the appealed resolution.
1. Respondent director correctly perceived in his Resolution that "to grant to the former mother union (NAFLU) the
authority to administer and enforce their collective bargaining agreement without presumably any members in the
bargaining unit is quite absurd" but fell unto the grave error of holding that "When the employees disaffiliated from the
mother union and formed themselves into a new union, their status as employees was also terminated."
His error was in not perceiving that the employees and members of the local union did not form a new union but merely
registered the local union as was their right. Petitioner Elisco-Elirol Labor Union-NAFLU, consisting of employees and
members of the local union was the principal party to the agreement. NAFLU as the "mother union" in participation in the
execution of the bargaining agreement with respondent company acted merely asagent of the local union, which
remained the basic unit of the association existing principally and freely to serve the common interest of all its members,
including the freedom to disaffiliated when the circumstances so warranted as in the present case.
2. Contrary to respondent director's misimpression, our jurisprudence fully supports 'petitioner's stand. In Liberty Cotton
Mills Workers Union vs. Liberty Cotton Mills, Inc.4 , the Court expressly cited and affirmed the basic principle that "(T)he
locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power
between the employer and their employee-members in the economic struggle for the fruits of the joint productive effort
of labor and capital; and the association of the locals into the national union (as PAFLU) was in furtherance of the same
end.These associations are consensual entities capable of entering into such legal relations with their members. The
essential purpose was the affirmation of the local unions into a common enterprise to increase by collective action the
common bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of
association, free to serve their own and the common interest of all, subject to the restraints imposed by the Constitution
and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the terms laid down in
the agreement which brought it into existence."
Corollarily, the "substitutionary" doctrine likewise fully supports petitioner's stand. Petitioner union to whom the employees
owe their allegiance has from the beginning expressly avowed that it "does not intend to change and/or amend the
provisions of the present collective bargaining agreement but only to be given the chance to enforce the same since
there is a shift of allegiance in the majority of the employees at respondent company." As was stressed by the Court in
Benguet Consolidated Inc. vs. BCI Employees & W Union-PAFLU5 —
... This principle, formulated by the NLRB as its initial compromise solution to the problem facing it when there occurs a
shift in employees' union allegiance after the execution of a bargaining contract with their employer, merely states that
even during the effectivity of a collective bargaining agreement executed between employer and employees thru their
agent, the employees can change said agentbut the contract continues to bind then up to its expiration date. They
may bargain however for the shortening of said expiration date.
In formulating the "substitutionary" doctrine, the only consideration involved as the employees' interest in the existing
bargaining agreement. The agent's interest never entered the picture. In fact, the justification for said doctrine was:
... that the majority of the employees, as an entity under the statute, is the true party in interest to the contract, holding
rights through the agency of the union representative. Thus, any exclusive interest claimed by the agent is defeasible at
the will of the principal.
3. It need only be mentioned finally that the Secretary of Labor in his decision of April 23, 1976 and order of January 10,
1977 denying reconsideration in the sister unfair labor practice case and ordering respondent corporation to
immediately lift the suspension and reinstate the complainant officers and board members of petitioner union6 has
likewise adhered to the foregoing basic principles and settled jurisprudence in contrast to respondent director (as well as
therein respondent NLRC which similarly adhered to the archaic and illogical view that the officers and board members
of petitioner local union committed an "act of disloyalty" in disaffiliating from the mother union when practically all its
members had so voted to disaffiliate and the mother union [as mere agent] no longer had any local union or members
to represent), ruling that "(G)ranting arguendo that the disaffiliation from the NAFLU is a legal cause for expulsion and
dismissal, it could not detract from the fact that only 13 individual complainants out of almost 700 members who
disaffiliated, were singled out for expulsion and recommended for dismissal. The actuation of NAFLU conclusively
constitute discrimination. Since the suspension of the complainants was effected at the instance of NAFLU, it should be
held liable to the payment of back wages."
173
The Presidential Assistant for Legal Affairs Ronaldo B. Zamora has likewise dismissed as untenable in a similar case
respondents' views that "such maintenance of membership" clause be distorted as "intended for the security of the union
rather than the security of tenure for the workers", ruling that "(W)hat is paramount, as it is expressly and explicitly
emphasize in an exacting language under the New Constitution, is the security of tenure of the workers, not the security
of the union. To impress, therefore, such "maintenance of membership" — which is intended for the security of the union
rather than the security of tenure of the workers — as a bar to employees' changing their affiliation is not only to infringe
on the constitutional right of freedom of association, but also to trample upon the constitutional right of workers to
security of tenure and to render meaningless whatever "adequate social services" the State may establish or maintain in
the field of employment "to guarantee the enjoyment by the people of a decent standard of living."7
It is expected that with this decision, any suspension or lay-off of the complainants officers and board members or
employees of petitioner union arising from the respondents' misconception of the clearly applicable principles and
jurisprudence upholding the primacy of the employees and their freely chosen local union as the true party in interest to
the collective bargaining agreement will be forthwith rectified and set aside.
ACCORDINGLY, the petition is granted and the appealed resolution is set aside and petitioner local union is declared to
be the sole and exclusive bargaining representative of the employees of respondent corporation entitled to administer
and enforce any subsisting collective bargaining agreement with said employer corporation. This decision shall be
immediately executory upon its promulgation.
Makasiar, Muñoz Palma, Fernandez and Guerrero, JJ., concur.
Martin, J., took no part.
G.R. No. 113856 September 7, 1998
SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING UNITED WORKERS OF THE PHILIPPINES (SMTFM-UWP), its
officers and members, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, HON. JOSE G. DE VERA and TOP FORM MANUFACTURING PHIL., INC.,
respondents.
ROMERO, J.:
The issue in this petition for certiorari is whether or not an employer committed an unfair labor practice by bargaining in
bad faith and discriminating against its employees. The charge arose from the employer's refusal to grant across-the-
board increases to its employees in implementing Wage Orders Nos. 01 and 02 of the Regional Tripartite Wages and
Productivity Board of the National Capital Region (RTWPB-NCR). Such refusal was aggravated by the fact that prior to
the issuance of said wage orders, the employer allegedly promised at the collective bargaining conferences to
implement any government-mandated wage increases on an across-the-board basis.
Petitioner Samahang Manggagawa sa Top Form Manufacturing — United Workers of the Philippines (SMTFM) was the
certified collective bargaining representative of all regular rank and file employees of private respondent Top Form
Manufacturing Philippines, Inc. At the collective bargaining negotiation held at the Milky Way Restaurant in Makati,
Metro Manila on February 27, 1990, the parties agreed to discuss unresolved economic issues. According to the minutes
of the meeting, Article VII of the collective bargaining agreement was discussed. The following appear in said Minutes:
Art. VII, Wages
Sect. 1. — Defer —
Sect. 2. Status quo

174
Sec. 3. Union proposed that any future wage increase given by the government should be implemented by the
company across-the-board or non-conditional.
Management requested the union to retain this provision since their sincerity was already proven when the P25.00 wage
increase was granted across-the-board. The union acknowledges management's sincerity but they are worried that in
case there is a new set of management, they can just show their CBA. The union decided to defer this provision. 1
In their joint affidavit dated January 30, 1992, 2 union members Salve L. Barnes, Eulisa Mendoza, Lourdes Barbero and
Concesa Ibañez affirmed that at the subsequent collective bargaining negotiations, the union insisted on the
incorporation in the collective bargaining agreement (CBA) of the union proposal on "automatic across-the-board
wage increase." They added that:
11. On the strength of the representation of the negotiating panel of the company and the above undertaking/promise
made by its negotiating panel, our union agreed to drop said proposal relying on the undertakings made by the officials
of the company who negotiated with us, namely, Mr. William Reynolds, Mr. Samuel Wong and Mrs. Remedios Felizardo.
Also, in the past years, the company has granted to us government mandated wage increases on across-the-board
basis.
On October 15, 1990, the RTWPB-NCR issued Wage Order No. 01 granting an increase of P17.00 per day in the salary of
workers. This was followed by Wage Order No. 02 dated December 20, 1990 providing for a P12.00 daily increase in
salary.
As expected, the union requested the implementation of said wage orders. However, they demanded that the increase
be on an across-the-board basis. Private respondent refused to accede to that demand. Instead, it implemented a
scheme of increases purportedly to avoid wage distortion. Thus, private respondent granted the P17.00 increase under
Wage Order No. 01 to workers/employees receiving salary of P125.00 per day and below. The P12.00 increase
mandated by Wage Order No. 02 was granted to those receiving the salary of P140.00 per day and below. For
employees receiving salary higher than P125.00 or P140.00 per day, private respondent granted an escalated increase
ranging from P6.99 to P14.30 and from P6.00 to P10.00, respectively. 3
On October 24, 1991, the union, through its legal counsel, wrote private respondent a letter demanding that it should
"fulfill its pledge of sincerity to the union by granting an across-the-board wage increases (sic) to all employees under the
wage orders." The union reiterated that it had agreed to "retain the old provision of CBA" on the strength of private
respondent's "promise and assurance" of an across-the-board salary increase should the government mandate salary
increases. 4 Several conferences between the parties notwithstanding, private respondent adamantly maintained its
position on the salary increases it had granted that were purportedly designed to avoid wage distortion.
Consequently, the union filed a complaint with the NCR NLRC alleging that private respondent's act of "reneging on its
undertaking/promise clearly constitutes act of unfair labor practice through bargaining in bad faith." It charged private
respondent with acts of unfair labor practices or violation of Article 247 of the Labor Code, as amended, specifically
"bargaining in bad faith," and prayed that it be awarded actual, moral and exemplary damages.5 In its position paper,
the union added that it was charging private respondent with "violation of Article 100 of the Labor Code." 6
Private respondent, on the other hand, contended that in implementing Wage Orders Nos. 01 and 02, it had avoided
"the existence of a wage distortion" that would arise from such implementation. It emphasized that only "after a
reasonable length of time from the implementation" of the wage orders "that the union surprisingly raised the question
that the company should have implemented said wage orders on an across-the-board basis." It asserted that there was
no agreement to the effect that future wage increases mandated by the government should be implemented on an
across-the-board basis. Otherwise, that agreement would have been incorporated and expressly stipulated in the CBA.
It quoted the provision of the CBA that reflects the parties' intention to "fully set forth" therein all their agreements that
had been arrived at after negotiations that gave the parties "unlimited right and opportunity to make demands and
proposals with respect to any subject or matter not removed by law from the area of collective bargaining." The same
CBA provided that during its effectivity, the parties "each voluntarily and unqualifiedly waives the right, and each agrees
that the other shall not be obligated, to bargain collectively, with respect to any subject or matter not specifically
referred to or covered by this Agreement, even though such subject or matter may not have been within the knowledge
or contemplation of either or both of the parties at the time they negotiated or signed this Agreement." 7
On March 11, 1992, Labor Arbiter Jose G. de Vera rendered a decision dismissing the complaint for lack of merit.8 He
considered two main issues in the case: (a) whether or not respondents are guilty of unfair labor practice, and (b)
whether or not the respondents are liable to implement Wage Orders Nos. 01 and 02 on an across-the-board basis.
Finding no basis to rule in the affirmative on both issues, he explained as follows:
The charge of bargaining in bad faith that the complainant union attributes to the respondents is bereft of any certitude
inasmuch as based on the complainant union's own admission, the latter vacillated on its own proposal to adopt an
across-the-board stand or future wage increases. In fact, the union acknowledges the management's sincerity when the
175
latter allegedly implemented Republic Act 6727 on an across-the-board basis. That such union proposal was not
adopted in the existing CBA was due to the fact that it was the union itself which decided for its deferment. It is,
therefore, misleading to claim that the management undertook/promised to implement future wage increases on an
across-the-board basis when as the evidence shows it was the union who asked for the deferment of its own proposal to
that effect.
The alleged discrimination in the implementation of the subject wage orders does not inspire belief at all where the
wage orders themselves do not allow the grant of wage increases on an across-the-board basis. That there were
employees who were granted the full extent of the increase authorized and some others who received less and still
others who did not receive any increase at all, would not ripen into what the complainants termed as discrimination.
That the implementation of the subject wage orders resulted into an uneven implementation of wage increases is
justified under the law to prevent any wage distortion. What the respondents did under the circumstances in order to
deter an eventual wage distortion without any arbitral proceedings is certainly commendable.
The alleged violation of Article 100 of the Labor Code, as amended, as well as Article XVII, Section 7 of the existing CBA
as herein earlier quoted is likewise found by this Branch to have no basis in fact and in law. No benefits or privileges
previously enjoyed by the employees were withdrawn as a result of the implementation of the subject orders. Likewise,
the alleged company practice of implementing wage increases declared by the government on an across-the-board
basis has not been duly established by the complainants' evidence. The complainants asserted that the company
implemented Republic Act No. 6727 which granted a wage increase of P25.00 effective July 1, 1989 on an across-the-
board basis. Granting that the same is true, such isolated single act that respondents adopted would definitely not ripen
into a company practice. It has been said that "a sparrow or two returning to Capistrano does not a summer make."
Finally, on the second issue of whether or not the employees of the respondents are entitled to an across-the-board
wage increase pursuant to Wage Orders Nos. 01 and 02, in the face of the above discussion as well as our finding that
the respondents correctly applied the law on wage increases, this Branch rules in the negative.
Likewise, for want of factual basis and under the circumstances where our findings above are adverse to the
complainants, their prayer for moral and exemplary damages and attorney's fees may not be granted.
Not satisfied, petitioner appealed to the NLRC that, in turn, promulgated the assailed Resolution of April 29, 19939
dismissing the appeal for lack of merit. Still dissatisfied, petitioner sought reconsideration which, however, was denied by
the NLRC in the Resolution dated January 17, 1994. Hence, the instant petition for certioraricontending that:
-A-
THE PUBLIC RESPONDENTS GROSSLY ERRED IN NOT DECLARING THE PRIVATE RESPONDENTS GUILTY OF ACTS OF UNFAIR
LABOR PRACTICES WHEN, OBVIOUSLY, THE LATTER HAS BARGAINED IN BAD FAITH WITH THE UNION AND HAS VIOLATED THE
CBA WHICH IT EXECUTED WITH THE HEREIN PETITIONER UNION.
-B-
THE PUBLIC RESPONDENTS SERIOUSLY ERRED IN NOT DECLARING THE PRIVATE RESPONDENTS GUILTY OF ACTS OF
DISCRIMINATION IN THE IMPLEMENTATION OF NCR WAGE ORDER NOS. 01 AND 02.
-C-
THE PUBLIC RESPONDENTS SERIOUSLY ERRED IN NOT FINDING THE PRIVATE RESPONDENTS GUILTY OF HAVING VIOLATED
SECTION 4, ARTICLE XVII OF THE EXISTING CBA.
-D-
THE PUBLIC RESPONDENTS GRAVELY ERRED IN NOT DECLARING THE PRIVATE RESPONDENTS GUILTY OF HAVING VIOLATED
ARTICLE 100 OF THE LABOR CODE OF THE PHILIPPINES, AS AMENDED.
-E-
ASSUMING, WITHOUT ADMITTING THAT THE PUBLIC RESPONDENTS HAVE CORRECTLY RULED THAT THE PRIVATE
RESPONDENTS ARE GUILTY OF ACTS OF UNFAIR LABOR PRACTICES, THEY COMMITTED SERIOUS ERROR IN NOT FINDING THAT
THERE IS A SIGNIFICANT DISTORTION IN THE WAGE STRUCTURE OF THE RESPONDENT COMPANY.
-F-
THE PUBLIC RESPONDENTS ERRED IN NOT AWARDING TO THE PETITIONERS HEREIN ACTUAL, MORAL, AND EXEMPLARY
DAMAGES AND ATTORNEY'S FEES.
176
As the Court sees it, the pivotal issues in this petition can be reduced into two, to wit: (a) whether or not private
respondent committed an unfair labor practice in its refusal to grant across-the-board wage increases in implementing
Wage Orders Nos. 01 and 02, and (b) whether or not there was a significant wage distortion of the wage structure in
private respondent as a result of the manner by which said wage orders were implemented.
With respect to the first issue, petitioner union anchors its arguments on the alleged commitment of private respondent
to grant an automatic across-the-board wage increase in the event that a statutory or legislated wage increase is
promulgated. It cites as basis therefor, the aforequoted portion of the Minutes of the collective bargaining negotiation
on February 27, 1990 regarding wages, arguing additionally that said Minutes forms part of the entire agreement
between the parties.
The basic premise of this argument is definitely untenable. To start with, if there was indeed a promise or undertaking on
the part of private respondent to obligate itself to grant an automatic across-the-board wage increase, petitioner union
should have requested or demanded that such "promise or undertaking" be incorporated in the CBA. After all, petitioner
union has the means under the law to compel private respondent to incorporate this specific economic proposal in the
CBA. It could have invoked Article 252 of the Labor Code defining "duty to bargain," thus, the duty includes "executing a
contract incorporating such agreements if requested by either party." Petitioner union's assertion that it had insisted on
the incorporation of the same proposal may have a factual basis considering the allegations in the aforementioned joint
affidavit of its members. However, Article 252 also states that the duty to bargain "does not compel any party to agree to
a proposal or make any concession." Thus, petitioner union may not validly claim that the proposal embodied in the
Minutes of the negotiation forms part of the CBA that it finally entered into with private respondent.
The CBA is the law between the contracting parties 10 — the collective bargaining representative and the employer-
company. Compliance with a CBA is mandated by the expressed policy to give protection to labor. 11 In the same vein,
CBA provisions should be "construed liberally rather than narrowly and technically, and the courts must place a practical
and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it
is intended to serve." 12 This is founded on the dictum that a CBA is not an ordinary contract but one impressed with
public interest. 13 It goes without saying, however, that only provisions embodied in the CBA should be so interpreted
and complied with. Where a proposal raised by a contracting party does not find print in the CBA, 14 it is not a part
thereof and the proponent has no claim whatsoever to its implementation.
Hence, petitioner union's contention that the Minutes of the collective bargaining negotiation meeting forms part of the
entire agreement is pointless. The Minutes reflects the proceedings and discussions undertaken in the process of
bargaining for worker benefits in the same way that the minutes of court proceedings show what transpired therein. 15
At the negotiations, it is but natural for both management and labor to adopt positions or make demands and offer
proposals and counter-proposals. However, nothing is considered final until the parties have reached an agreement. In
fact, one of management's usual negotiation strategies is to ". . . agree tentatively as you go along with the
understanding that nothing is binding until the entire agreement is reached." 16 If indeed private respondent promised to
continue with the practice of granting across-the-board salary increases ordered by the government, such promise
could only be demandable in law if incorporated in the CBA.
Moreover, by making such promise, private respondent may not be considered in bad faith or at the very least, resorting
to the scheme of feigning to undertake the negotiation proceedings through empty promises. As earlier stated,
petitioner union had, under the law, the right and the opportunity to insist on the foreseeable fulfillment of the private
respondent's promise by demanding its incorporation in the CBA. Because the proposal was never embodied in the
CBA, the promise has remained just that, a promise, the implementation of which cannot be validly demanded under
the law.
Petitioner's reliance on this Court's pronouncements 17 in Kiok Loy v. NLRC 18 is, therefore, misplaced. In that case, the
employer refused to bargain with the collective bargaining representative, ignoring all notices for negotiations and
requests for counter proposals that the union had to resort to conciliation proceedings. In that case, the Court opined
that "(a) Company's refusal to make counter-proposal, if considered in relation to the entire bargaining process, may
indicate bad faith and this is specially true where the Union's request for a counter-proposal is left unanswered."
Considering the facts of that case, the Court concluded that the company was "unwilling to negotiate and reach an
agreement with the Union." 19
In the case at bench, however, petitioner union does not deny that discussion on its proposal that all government-
mandated salary increases should be on an across-the-board basis was "deferred," purportedly because it relied upon
the "undertaking" of the negotiating panel of private respondent. 20 Neither does petitioner union deny the fact that
"there is no provision of the 1990 CBA containing a stipulation that the company will grant across-the-board to its
employees the mandated wage increase." They simply assert that private respondent committed "acts of unfair labor
practices by virtue of its contractual commitment made during the collective bargaining process." 21The mere fact,
however, that the proposal in question was not included in the CBA indicates that no contractual commitment thereon
was ever made by private respondent as no agreement had been arrived at by the parties. Thus:
177
Obviously the purpose of collective bargaining is the reaching of an agreement resulting in a contract binding on the
parties; but the failure to reach an agreement after negotiations continued for a reasonable period does not establish a
lack of good faith. The statutes invite and contemplate a collective bargaining contract, but they do not compel one.
The duty to bargain does not include the obligation to reach an agreement. . . . 32
With the execution of the CBA, bad faith bargaining can no longer be imputed upon any of the parties thereto. All
provisions in the CBA are supposed to have been jointly and voluntarily incorporated therein by the parties. This is not a
case where private respondent exhibited an indifferent attitude towards collective bargaining because the negotiations
were not the unilateral activity of petitioner union. The CBA is proof enough that private respondent exerted "reasonable
effort at good faith bargaining." 23
Indeed, the adamant insistence on a bargaining position to the point where the negotiations reach an impasse does not
establish bad faith. Neither can bad faith be inferred from a party's insistence on the inclusion of a particular substantive
provision unless it concerns trivial matters or is obviously intolerable. 24
The question as to what are mandatory and what are merely permissive subjects of collective bargaining is of
significance on the right of a party to insist on his position to the point of stalemate. A party may refuse to enter into a
collective bargaining contract unless it includes a desired provision as to a matter which is a mandatory subject of
collective bargaining; but a refusal to contract unless the agreement covers a matter which is not a mandatory subject
is in substance a refusal to bargain about matters which are mandatory subjects of collective bargaining, and it is no
answer to the charge of refusal to bargain in good faith that the insistence on the disputed clause was not the sole
cause of the failure to agree or that agreement was not reached with respect to other disputed clauses. 25
On account of the importance of the economic issue proposed by petitioner union, it could have refused to bargain
and to enter into a CBA with private respondent. On the other hand, private respondent's firm stand against the
proposal did not mean that it was bargaining in bad faith. It had the right "to insist on (its) position to the point of
stalemate." On the part of petitioner union, the importance of its proposal dawned on it only after the wage orders were
issued after the CBA had been entered into. Indeed, from the facts of this case, the charge of bad faith bargaining on
the part of private respondent was nothing but a belated reaction to the implementation of the wage orders that
private respondent made in accordance with law. In other words, petitioner union harbored the notion that its members
and the other employees could have had a better deal in terms of wage increases had it relentlessly pursued the
incorporation in the CBA of its proposal. The inevitable conclusion is that private respondent did not commit the unfair
labor practices of bargaining in bad faith and discriminating against its employees for implementing the wage orders
pursuant to law.
The Court likewise finds unmeritorious petitioner union's contention that by its failure to grant across-the-board wage
increases, private respondent violated the provisions of Section 5, Article VII of the existing CBA 26 as well as Article 100 of
the Labor Code. The CBA provision states:
Sec. 5. The COMPANY agrees to comply with all the applicable provisions of the Labor Code of the Philippines, as
amended, and all other laws, decrees, orders, instructions, jurisprudence, rules and regulations affecting labor.
Art. 100 of the Labor Code on prohibition against elimination or diminution of benefits provides that "(n)othing in this Book
shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the
time of promulgation of this Code."
We agree with the Labor Arbiter and the NLRC that no benefits or privileges previously enjoyed by petitioner union and
the other employees were withdrawn as a result of the manner by which private respondent implemented the wage
orders. Granted that private respondent had granted an across-the-board increase pursuant to Republic Act No. 6727,
that single instance may not be considered an established company practice. Petitioner union's argument in this regard
is actually tied up with its claim that the implementation of Wage Orders Nos. 01 and 02 by private respondent resulted
in wage distortion.
The issue of whether or not a wage distortion exists is a question of
fact 27 that is within the jurisdiction of the quasi-judicial tribunals below. Factual findings of administrative agencies are
accorded respect and even finality in this Court if they are supported by substantial evidence. 28 Thus, inMetropolitan
Bank and Trust Company, Inc. v. NLRC, the Court said:
The issue of whether or not a wage distortion exists as a consequence of the grant of a wage increase to certain
employees, we agree, is, by and large, a question of fact the determination of which is the statutory function of the
NLRC. Judicial review of labor cases, we may add, does not go beyond the evaluation of the sufficiency of the
evidence upon which the labor officials' findings rest. As such, the factual findings of the NLRC are generally accorded
not only respect but also finality provided that its decisions are supported by substantial evidence and devoid of any
taint of unfairness or arbitrariness. When, however, the members of the same labor tribunal are not in accord on those
178
aspects of a case, as in this case, this Court is well cautioned not to be as so conscious in passing upon the sufficiency of
the evidence, let alone the conclusions derived
therefrom. 29
Unlike in above-cited case where the Decision of the NLRC was not unanimous, the NLRC Decision in this case which was
penned by the dissenter in that case, Presiding Commissioner Edna Bonto-Perez unanimously ruled that no wage
distortions marred private respondent's implementation of the wage orders. The NLRC said:
On the issue of wage distortion, we are satisfied that there was a meaningful implementation of Wage Orders Nos. 01
and 02. This debunks the claim that there was wage distortion as could be shown by the itemized wages implementation
quoted above. It should be noted that this itemization has not been successfully traversed by the appellants. . . . . 30
The NLRC then quoted the labor arbiter's ruling on wage distortion.
We find no reason to depart from the conclusions of both the labor arbiter and the NLRC. It is apropos to note,
moreover, that petitioner's contention on the issue of wage distortion and the resulting allegation of discrimination
against the private respondent's employees are anchored on its dubious position that private respondent's promise to
grant an across-the-board increase in government-mandated salary benefits reflected in the Minutes of the negotiation
is an enforceable part of the CBA.
In the resolution of labor cases, this Court has always been guided by the State policy enshrined in the Constitution that
the rights of workers and the promotion of their welfare shall be protected. 31 The Court is likewise guided by the goal of
attaining industrial peace by the proper application of the law. It cannot favor one party, be it labor or management, in
arriving at a just solution to a controversy if the party has no valid support to its claims. It is not within this Court's power to
rule beyond the ambit of the law.
WHEREFORE, the instant petition for certiorari is hereby DISMISSED and the questioned Resolutions of the NLRC AFFIRMED.
No costs.
SO ORDERED.
PICOP RESOURCES, INCORPORATED (PRI),
Petitioner,
- versus
ANACLETO L. TAECA, GEREMIAS S. TATO, JAIME N. CAMPOS, MARTINIANO A. MAGAYON, JOSEPH B. BALGOA, MANUEL G.
ABUCAY, MOISES M. ALBARAN,MARGARITO G. ALICANTE, JERRY ROMEO T. AVILA, LORENZO D. CANON, RAUL P. DUERO,
DANILO Y. ILAN, MANUEL M. MATURAN, JR., LUISITO R. POPERA, CLEMENTINO C. QUIMAN, ROBERTO Q. SILOT, CHARLITO D.
SINDAY, REMBERT B. SUZONALLAN J. TRIMIDAL, and NAMAPRI-SPFL,
Respondents. G.R. No. 160828
Present:
CARPIO, J., Chairperson,
NACHURA,
179
PERALTA
ABAD, and
MENDOZA, JJ.
Promulgated:
August 9, 2010
x----------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision[1] dated
July 25, 2003 and Resolution[2] dated October 23, 2003 of the Court of Appeals in CA-G.R. SP No. 71760, setting aside the
Resolutions dated October 8, 2001[3] and April 29, 2002[4] of the National Labor Relations Commission in NLRC CA No. M-
006309-2001 and reinstating the Decision[5] dated March 16, 2001 of the Labor Arbiter.
The facts, as culled from the records, are as follows:
On February 13, 2001, respondents Anacleto Taeca, Loreto Uriarte, Joseph Balgoa, Jaime Campos, Geremias Tato,
Martiniano Magayon, Manuel Abucay and fourteen (14) others filed a Complaint for unfair labor practice, illegal
dismissal and money claims against petitioner PICOP Resources, Incorporated (PRI), Wilfredo Fuentes (in his capacity as
PRI's Vice President/Resident Manager), Atty. Romero Boniel (in his capacity as PRI's Manager of Legal/Labor), Southern
Philippines Federation of Labor (SPFL), Atty. Wilbur T. Fuentes (in his capacity as Secretary General of SPFL), Pascasio
Trugillo (in his capacity as Local President of Nagkahiusang Mamumuo sa PICOP Resources, Inc.- SPFL [NAMAPRI-SPFL])
and Atty. Proculo Fuentes, Jr.[6] (in his capacity as National President of SPFL).
Respondents were regular rank-and-file employees of PRI and bona fide members of Nagkahiusang Mamumuo sa PRI
Southern Philippines Federation of Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the rank-and-file
employees of petitioner PRI.
PRI has a collective bargaining agreement (CBA) with NAMAPRI-SPFL for a period of five (5) years from May 22, 1995 until
May 22, 2000.
180
The CBA contained the following union security provisions:
Article II- Union Security and Check-Off
Section 6. Maintenance of membership.
6.1 All employees within the appropriate bargaining unit who are members of the UNION at the time of the signing of this
AGREEMENT shall, as a condition of continued employment by the COMPANY, maintain their membership in the UNION
in good standing during the effectivity of this AGREEMENT.
6.2 Any employee who may hereinafter be employed to occupy a position covered by the bargaining unit shall be
advised by the COMPANY that they are required to file an application for membership with the UNION within thirty (30)
days from the date his appointment shall have been made regular.
6.3 The COMPANY, upon the written request of the UNION and after compliance with the requirements of the New Labor
Code, shall give notice of termination of services of any employee who shall fail to fulfill the condition provided in Section
6.1 and 6.2 of this Article, but it assumes no obligation to discharge any employee if it has reasonable grounds to believe
either that membership in the UNION was not available to the employee on the same terms and conditions generally
applicable to other members, or that membership was denied or terminated for reasons other than voluntary resignation
or non-payment of regular union dues. Separation under the Section is understood to be for cause, consequently, the
dismissed employee is not entitled to separation benefits provided under the New Labor Code and in this
AGREEMENT.[7]
On May 16, 2000, Atty. Proculo P. Fuentes (Atty. Fuentes) sent a letter to the management of PRI demanding the
termination of employees who allegedly campaigned for, supported and signed the Petition for Certification Election of
the Federation of Free Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL considered said act of
campaigning for and signing the petition for certification election of FFW as an act of disloyalty and a valid basis for
termination for a cause in accordance with its Constitution and By-Laws, and the terms and conditions of the CBA,
specifically Article II, Sections 6.1 and 6.2 on Union Security Clause.
In a letter dated May 23, 2000, Mr. Pascasio Trugillo requested the management of PRI to investigate those union
members who signed the Petition for Certification Election of FFW during the existence of their CBA. NAMAPRI-SPFL,
likewise, furnished PRI with machine copy of the authorization letters dated March 19, 20 and 21, 2000, which contained
the names and signatures of employees.
Acting on the May 16 and May 23, 2000 letters of the NAMAPRI-SPFL, Atty. Romero A. Boniel issued a memorandum
addressed to the concerned employees to explain in writing within 72 hours why their employment should not be
terminated due to acts of disloyalty as alleged by their Union.
Within the period from May 26 to June 2, 2000, a number of employees who were served explanation memorandum
submitted their explanation, while some did not.
181
In a letter dated June 2, 2000, Atty. Boniel endorsed the explanation letters of the employees to Atty. Fuentes for
evaluation and final disposition in accordance with the CBA.
After evaluation, in a letter dated July 12, 2000, Atty. Fuentes advised the management of PRI that the Union found the
member's explanations to be unsatisfactory. He reiterated the demand for termination, but only of 46 member-
employees, including respondents.
On October 16, 2000, PRI served notices of termination for causes to the 31 out of the 46 employees whom NAMAPRIL-
SPFL sought to be terminated on the ground of acts of disloyalty committed against it when respondents allegedly
supported and signed the Petition for Certification Election of FFW before the freedom period during the effectivity of the
CBA. A Notice dated October 21, 2000 was also served on the Department of Labor and Employment Office (DOLE),
Caraga Region.
Respondents then accused PRI of Unfair Labor Practice punishable under Article 248 (a), (b), (c), (d) and (e) of the Labor
Code, while Atty. Fuentes and Wilbur T. Fuentes and Pascasio Trujillo were accused of violating Article 248 (a) and (b) of
the Labor Code.
Respondents alleged that none of them ever withdrew their membership from NAMAPRI-SPFL or submitted to PRI any
union dues and check-off disauthorizations against NAMAPRI-SPFL. They claimed that they continue to remain on record
as bona fide members of NAMAPRI-SPFL. They pointed out that a patent manifestation of ones disloyalty would have
been the explicit resignation or withdrawal of membership from the Union accompanied by an advice to management
to discontinue union dues and check-off deductions. They insisted that mere affixation of signature on such authorization
to file a petition for certification election was not per se an act of disloyalty. They claimed that while it may be true that
they signed the said authorization before the start of the freedom period, the petition of FFW was only filed with the DOLE
on May 18, 2000, or 58 days after the start of the freedom period.
Respondents maintained that their acts of signing the authorization signifying support to the filing of a Petition for
Certification Election of FFW was merely prompted by their desire to have a certification election among the rank-and-
file employees of PRI with hopes of a CBA negotiation in due time; and not to cause the downfall of NAMAPRI-SPFL.
Furthermore, respondents contended that there was lack of procedural due process. Both the letter dated May 16, 2000
of Atty. Fuentes and the follow-up letter dated May 23, 2000 of Trujillo addressed to PRI did not mention their names.
Respondents stressed that NAMAPRI-SPFL merely requested PRI to investigate union members who supported the Petition
for Certification Election of FFW. Respondents claimed that they should have been summoned individually, confronted
with the accusation and investigated accordingly and from where the Union may base its findings of disloyalty and,
thereafter, recommend to management the termination for causes.
Respondents, likewise, argued that at the time NAMAPRI-SPFL demanded their termination, it was no longer the
bargaining representative of the rank-and-file workers of PRI, because the CBA had already expired on May 22, 2000.
Hence, there could be no justification in PRIs act of dismissing respondents due to acts of disloyalty.
Respondents asserted that the act of PRI, Wilfredo Fuentes and Atty. Boniel in giving in to the wishes of the Union in
discharging them on the ground of disloyalty to the Union amounted to interference with, restraint or coercion of
respondents exercise of their right to self-organization. The act indirectly required petitioners to support and maintain
their membership with NAMAPRI-SPFL as a condition for their continued employment. The acts of NAMAPRI-SPFL, Atty.
Fuentes and Trujillo amounted to actual restraint and coercion of the petitioners in the exercise of their rights to self-
organization and constituted acts of unfair labor practice.
182
In a Decision[8] dated March 16, 2001, the Labor Arbiter declared the respondents dismissal to be illegal and ordered PRI
to reinstate respondents to their former or equivalent positions without loss of seniority rights and to jointly and solidarily
pay their backwages. The dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby entered:
1. Declaring complainants dismissal illegal; and
2. Ordering respondents Picop Resources Inc. (PRI) and NAMAPRI-SPFL to reinstate complainants to their former
or equivalent positions without loss of seniority rights and to jointly and solidarily pay their backwages in the total amount
of P420,339.30 as shown in the said Annex A plus damages in the amount of P10,000.00 each, or a total of P210,000.00
and attorneys fees equivalent to 10% of the total monetary award.
SO ORDERED.[9]
PRI and NAMAPRI-SPFL appealed to the National Labor Relations Commission (NLRC), which reversed the decision of the
Labor Arbiter; thus, declaring the dismissal of respondents from employment as legal.
Respondents filed a motion for reconsideration, but it was denied on April 29, 2001 for lack of merit.
Unsatisfied, respondents filed a petition for certiorari under Rule 65 before the Court of Appeals and sought the
nullification of the Resolution of the NLRC dated October 8, 2001 which reversed the Decision dated March 16. 2001 of
Labor Arbiter and the Resolution dated April 29, 2002, which denied respondents motion for reconsideration.
On July 25, 2003, the Court of Appeals reversed and set aside the assailed Resolutions of the NLRC and reinstated the
Decision dated March 16, 2001 of the Labor Arbiter.
Thus, before this Court, PRI, as petitioner, raised the following issues:
WHETHER AN EXISTING COLLECTIVELY (sic) BARGAINING AGREEMENT (CBA) CAN BE GIVEN ITS FULL FORCE AND EFFECT IN
ALL ITS TERMS AND CONDITION INCLUDING ITS UNION SECURITY CLAUSE, EVEN BEYOND THE 5-YEAR PERIOD WHEN NO NEW
CBA HAS YET BEEN ENTERED INTO.
II
WHETHER OR NOT AN HONEST ERROR IN THE INTERPRETATION AND/OR CONCLUSION OF LAW FALL WITHIN THE AMBIT OF
THE EXTRAORDINARY REMEDY OF CERTIORARI UNDER RULE 65, REVISED RULES OF COURT.[10]
183
We will first delve on the technical issue raised.
PRI perceived a patent error in the mode of appeal elected by respondents for the purpose of assailing the decision of
the NLRC. It claimed that assuming that the NLRC erred in its judgment on the legal issues, its error, if any, is not
tantamount to abuse of discretion falling within the ambit of Rule 65.
Petitioner is mistaken.
The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition for Certiorari has been settled as early
as in our decision in St. Martin Funeral Home v. National Labor Relations Commission.[11] This Court held that the proper
vehicle for such review was a Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and that this action
should be filed in the Court of Appeals in strict observance of the doctrine of the hierarchy of courts.[12] Moreover, it is
already settled that under Section 9 ofBatas Pambansa Blg. 129, as amended by Republic Act No. 7902[10] (An Act
Expanding the Jurisdiction of the Court of Appeals, amending for the purpose of Section Nine ofBatas Pambansa Blg.
129 as amended, known as the Judiciary Reorganization Act of 1980), the Court of Appeals pursuant to the exercise of its
original jurisdiction over Petitions for Certiorari is specifically given the power to pass upon the evidence, if and when
necessary, to resolve factual issues. [13]
We now come to the main issue of whether there was just cause to terminate the employment of respondents.
PRI argued that the dismissal of the respondents was valid and legal. It claimed to have acted in good faith at the
instance of the incumbent union pursuant to the Union Security Clause of the CBA.
Citing Article 253 of the Labor Code,[14] PRI contends that as parties to the CBA, they are enjoined to keep the status
quo and continue in full force and effect the terms and conditions of the existing CBA during the 60-day period and/or
until a new agreement is reached by the parties.
Petitioner's argument is untenable.
Union security" is a generic term, which is applied to and comprehends "closed shop," union shop," "maintenance of
membership," or any other form of agreement which imposes upon employees the obligation to acquire or retain union
membership as a condition affecting employment. There is union shop when all new regular employees are required to
join the union within a certain period as a condition for their continued employment. There is maintenance of
membership shop when employees, who are union members as of the effective date of the agreement, or who
thereafter become members, must maintain union membership as a condition for continued employment until they are
promoted or transferred out of the bargaining unit, or the agreement is terminated. A closed shop, on the other hand,
may be defined as an enterprise in which, by agreement between the employer and his employees or their
representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is,
becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of
or of which the employees in interest are a part.[15]
However, in terminating the employment of an employee by enforcing the union security clause, the employer needs to
determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of
the union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel
the employee from the union. These requisites constitute just cause for terminating an employee based on the union
security provision of the CBA.[16]
As to the first requisite, there is no question that the CBA between PRI and respondents included a union security clause,
specifically, a maintenance of membership as stipulated in Sections 6 of Article II, Union Security and Check-Off.
Following the same provision, PRI, upon written request from the Union, can indeed terminate the employment of the
employee who failed to maintain its good standing as a union member.
184
Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) occasions demanded from PRI, in their letters dated May
16 and 23, 2000, to terminate the employment of respondents due to their acts of disloyalty to the Union.
However, as to the third requisite, we find that there is no sufficient evidence to support the decision of PRI to terminate
the employment of the respondents.
PRI alleged that respondents were terminated from employment based on the alleged acts of disloyalty they committed
when they signed an authorization for the Federation of Free Workers (FFW) to file a Petition for Certification Election
among all rank-and-file employees of PRI. It contends that the acts of respondents are a violation of the Union Security
Clause, as provided in their Collective Bargaining Agreement.
We are unconvinced.
We are in consonance with the Court of Appeals when it held that the mere signing of the authorization in support of the
Petition for Certification Election of FFW on March 19, 20 and 21, or before the freedom period, is not sufficient ground to
terminate the employment of respondents inasmuch as the petition itself was actually filed during the freedom period.
Nothing in the records would show that respondents failed to maintain their membership in good standing in the Union.
Respondents did not resign or withdraw their membership from the Union to which they belong. Respondents continued
to pay their union dues and never joined the FFW.
Significantly, petitioner's act of dismissing respondents stemmed from the latter's act of signing an authorization letter to
file a petition for certification election as they signed it outside the freedom period. However, we are constrained to
believe that an authorization letter to file a petition for certification election is different from an actual Petition for
Certification Election. Likewise, as per records, it was clear that the actual Petition for Certification Election of FFW was
filed only on May 18, 2000.[17] Thus, it was within the ambit of the freedom period which commenced from March 21,
2000 until May 21, 2000. Strictly speaking, what is prohibited is the filing of a petition for certification election outside the
60-day freedom period.[18] This is not the situation in this case. If at all, the signing of the authorization to file a
certification election was merely preparatory to the filing of the petition for certification election, or an exercise of
respondents right to self-organization.
Moreover, PRI anchored their decision to terminate respondents employment on Article 253 of the Labor Code which
states that it shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms
and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the
parties. It claimed that they are still bound by the Union Security Clause of the CBA even after the expiration of the CBA;
hence, the need to terminate the employment of respondents.
Petitioner's reliance on Article 253 is misplaced.
The provision of Article 256 of the Labor Code is particularly enlightening. It reads:
Article 256. Representation issue in organized establishments. - In organized establishments, when a verified petition
questioning the majority status of the incumbent bargaining agent is filed before the Department of Labor and
Employment within the sixty-day period before the expiration of a collective bargaining agreement, the Med-Arbiter
shall automatically order an election by secret ballot when the verified petition is supported by the written consent of at
least twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the will of the employees in the
appropriate bargaining unit. To have a valid election, at least a majority of all eligible voters in the unit must have cast
their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining
agent of all the workers in the unit. When an election which provides for three or more choices results in no choice
receiving a majority of the valid votes cast, a run-off election shall be conducted between the labor unions receiving the
two highest number of votes: Provided, That the total number of votes for all contending unions is at least fifty per cent
(50%) of the number of votes cast.
185
At the expiration of the freedom period, the employer shall continue to recognize the majority status of the incumbent
bargaining agent where no petition for certification election is filed.[19]
Applying the same provision, it can be said that while it is incumbent for the employer to continue to recognize the
majority status of the incumbent bargaining agent even after the expiration of the freedom period, they could only do
so when no petition for certification election was filed. The reason is, with a pending petition for certification, any such
agreement entered into by management with a labor organization is fraught with the risk that such a labor union may
not be chosen thereafter as the collective bargaining representative.[20] The provision for status quo is conditioned on
the fact that no certification election was filed during the freedom period. Any other view would render nugatory the
clear statutory policy to favor certification election as the means of ascertaining the true expression of the will of the
workers as to which labor organization would represent them.[21]
In the instant case, four (4) petitions were filed as early as May 12, 2000. In fact, a petition for certification election was
already ordered by the Med-Arbiter of DOLE Caraga Region on August 23, 2000.[22] Therefore, following Article 256, at
the expiration of the freedom period, PRI's obligation to recognize NAMAPRI-SPFL as the incumbent bargaining agent
does not hold true when petitions for certification election were filed, as in this case.
Moreover, the last sentence of Article 253 which provides for automatic renewal pertains only to the economic
provisions of the CBA, and does not include representational aspect of the CBA. An existing CBA cannot constitute a bar
to a filing of a petition for certification election. When there is a representational issue, the status quo provision in so far as
the need to await the creation of a new agreement will not apply. Otherwise, it will create an absurd situation where the
union members will be forced to maintain membership by virtue of the union security clause existing under the CBA and,
thereafter, support another union when filing a petition for certification election. If we apply it, there will always be an
issue of disloyalty whenever the employees exercise their right to self-organization. The holding of a certification election
is a statutory policy that should not be circumvented,[23] or compromised.
Time and again, we have ruled that we adhere to the policy of enhancing the welfare of the workers. Their freedom to
choose who should be their bargaining representative is of paramount importance. The fact that there already exists a
bargaining representative in the unit concerned is of no moment as long as the petition for certification election was
filed within the freedom period. What is imperative is that by such a petition for certification election the employees are
given the opportunity to make known of who shall have the right to represent them thereafter. Not only some, but all of
them should have the right to do so. What is equally important is that everyone be given a democratic space in the
bargaining unit concerned.[24]
We will emphasize anew that the power to dismiss is a normal prerogative of the employer. This, however, is not without
limitations. The employer is bound to exercise caution in terminating the services of his employees especially so when it is
made upon the request of a labor union pursuant to the Collective Bargaining Agreement. Dismissals must not be
arbitrary and capricious. Due process must be observed in dismissing an employee, because it affects not only his
position but also his means of livelihood. Employers should, therefore, respect and protect the rights of their employees,
which include the right to labor.[25]
An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If reinstatement
is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally dismissed
employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for every year of
service. Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full backwages, inclusive of
allowances and other benefits, or their monetary equivalent, computed from the time their actual compensation was
withheld from them up to the time of their actual reinstatement. But if reinstatement is no longer possible, the backwages
shall be computed from the time of their illegal termination up to the finality of the decision. Moreover, respondents,
having been compelled to litigate in order to seek redress for their illegal dismissal, are entitled to the award of attorneys
fees equivalent to 10% of the total monetary award.[26]
WHEREFORE, the petition is DENIED. The Decision dated July 25, 2003 and the Resolution dated October 23, 2003 of the
Court of Appeals in CA-G.R. SP No. 71760, which set aside the Resolutions dated October 8, 2001 and April 29, 2002 of
the National Labor Relations Commission in NLRC CA No. M-006309-2001, areAFFIRMED accordingly. Respondents are
hereby awarded full backwages and other allowances, without qualifications and diminutions, computed from the time
they were illegally dismissed up to the time they are actually reinstated. Let this case be remanded to the Labor Arbiter
for proper computation of the full backwages due respondents, in accordance with Article 279 of the Labor Code, as
expeditiously as possible.
186
SO ORDERED.
[G.R. No. 124224. March 17, 2000]
NEW PACIFIC TIMBER SUPPLY COMPANY, CO., INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, MUSIB M.
BUAT, LEON G. GONZAGA, JR., ET AL., NATIONAL FEDERATION OF LABOR, MARIANO AKILIT and 350 OTHERS, respondents.
Juris sc
DECISION
KAPUNAN, J.:
May the term of a Collective Bargaining Agreement (CBA) as to its economic provisions be extended beyond the term
expressly stipulated therein, and, in the absence of a new CBA, even beyond the three-year period provided by law?
Are employees hired after the stipulated term of a CBA entitled to the benefits provided thereunder?
These are the issues at the heart of the instant petition for certiorari with prayer for the issuance of preliminary injunction
and/or temporary restraining order filed by petitioner New Pacific Timber & Supply Company, Incorporated against the
National Labor Relations Commission (NLRC), et al. and the National Federation of Labor, et al.
The antecedent facts, as found by the NLRC, are as follows:
The National Federation of Labor (NFL, for brevity) was certified as the sole and exclusive bargaining representative of all
the regular rank-and-file employees of New Pacific Timber & Supply Co., Inc. (hereinafter referred to as petitioner
Company).[1] As such, NFL started to negotiate for better terms and conditions of employment for the employees in the
bargaining unit which it represented. However, the same was allegedly met with stiff resistance by petitioner Company,
so that the former was prompted to file a complaint for unfair labor practice (ULP) against the latter on the ground of
refusal to bargain collectively.[2]Misj uris
On March 31, 1987, then Executive Labor Arbiter Hakim S. Abdulwahid issued an order declaring (a) herein petitioner
Company guilty of ULP; and (b) the CBA proposals submitted by the NFL as the CBA between the regular rank-and-file
employees in the bargaining unit and petitioner Company.[3]
Petitioner Company appealed the above order to the NLRC. On November 15, 1989, the NLRC rendered a decision
dismissing the appeal for lack of merit. A motion for reconsideration thereof was, likewise, denied in a Resolution, dated
November 12, 1990.[4]
Unsatisfied, petitioner Company filed a petition for certiorari with this Court. But the Court dismissed said petition in a
Resolution, dated January 21, 1991.[5]
Thereafter, the records of the case were remanded to the arbitration branch of origin for the execution of Labor Arbiter
Abdulwahid's Order, dated March 31, 1987, granting monetary benefits consisting of wage increases, housing
allowances, bonuses, etc. to the regular rank-and-file employees. Following a series of conferences to thresh out the
details of computation, Labor Arbiter Reynaldo S. Villena issued an Order, dated October 18, 1993, directing petitioner
Company to pay the 142 employees entitled to the aforesaid benefits the respective amounts due them under the CBA.
Petitioner Company complied; and, the corresponding quitclaims were executed. The case was considered closed
following NFL's manifestation that it will no longer appeal the October 18, 1993 Order of Labor Arbiter Villena.[6]Jj lex
However, notwithstanding such manifestation, a "Petition for Relief" was filed in behalf of 186 of the private respondents
"Mariano J. Akilit and 350 others" on May 12, 1994. In their petition, they claimed that they were wrongfully excluded from
enjoying the benefits under the CBA since the agreement with NFL and petitioner Company limited the CBA's
implementation to only the 142 rank-and-file employees enumerated. They claimed that NFL's misrepresentations had
precluded them from appealing their exclusion.[7]
Treating the petition for relief as an appeal, the NLRC entertained the same. On August 4, 1994, said commission issued a
resolution[8] declaring that the 186 excluded employees "form part and parcel of the then existing rank-and-file
bargaining unit" and were, therefore, entitled to the benefits under the CBA. The NLRC held, thus:
187
WHEREFORE, the appeal is hereby granted and the Order of the Labor arbiter dated October 18, 1993 is hereby Set
Aside and Vacated. In lieu hereof, a new Order is hereby issued directing respondent New Pacific Timber & Supply Co.,
Inc. to pay all its regular rank-and-file workers their wage differentials and other benefits arising from the decreed CBA as
explained above, within ten (10) days from receipt of this order.
SO ORDERED.[9]
Petitioner Company filed a motion for reconsideration of the aforequoted resolution.
Meanwhile, four separate groups of the private respondents, including the original 186 who had filed the "Petition for
Relief" filed individual money claims, docketed as NLRC Cases Nos. M-001991-94 to M-001994-94, before the Arbitration
Branch of the NLRC, Cagayan de Oro City. However, Labor Arbiter Villena dismissed these cases in Orders, dated March
11, 1994; April 13, 1994; March 9, 1994; and, May 10, 1994. The employees appealed the respective dismissal of their
complaints to the NLRC. The latter consolidated these appeals with the aforementioned motion for reconsideration filed
by petitioner Company. New miso
On February 29, 1996, the NLRC issued a resolution, the dispositive portion of which reads as follows:
WHEREFORE, the instant petition for reconsideration of respondent is Denied for lack of merit and the Resolution of this
Commission dated August 4, 1994 Sustained. The separate orders of the Labor Arbiter dated March 11, 1994, April 13,
1994, March 9, 1994 and May 10, 1994, respectively, in NLRC Cases Nos. M-001991-94 to M-001994-94 are Set Aside and
Vacated for lack of legal bases.
Conformably, respondent New Pacific Timber and Supply Co., Inc. is hereby directed to pay individual complainants
their CBA benefits in the aggregate amount of P13,559,510.37, the detailed computation thereof is contained in Annex
"A" which forms an integral part of this resolution, plus ten (10%) percent thereof as Attorney's fees.
SO ORDERED.[10]
Hence, the instant petition wherein petitioner Company raises the following issues: Acct mis
THE PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN ALLOWING THE "PETITION FOR RELIEF" TO
PROSPER.
II
THE PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN RULING THAT PRIVATE RESPONDENTS
MARIANO AKILIT AND 350 OTHERS ARE ENTITLED TO BENEFITS UNDER THE COLLECTIVE BARGAINING AGREEMENT IN SPITE OF
THE FACT THAT THEY WERE NOT EMPLOYED BY THE PETITIONER MUCH LESS WERE THEY MEMBERS OF THE BARGAINING UNIT
DURING THE TERM OF THE CBA. Mis act
III
PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN MAKING FACTUAL FINDINGS WITHOUT BASIS.
IV
THE DISPOSITIVE PORTIONS OF THE ASSAILED RESOLUTIONS ARE DEFECTIVE AND/OR REVEAL THE GRAVE ABUSE OF
DISCRETION COMMITTED BY PUBLIC RESPONDENT.[11]
Petitioner Company contends that a "Petition for Relief" is not the proper mode of seeking a review of a decision
rendered by the arbitration branch of the NLRC.[12] According to the petitioner, nowhere in the Labor Code or in the
NLRC Rules of Procedure is there such a pleading. Rather, the remedy of a party aggrieved by an unfavorable ruling of
the labor arbiter is to appeal said judgment to the NLRC.[13]
Petitioner asseverates that even assuming that the NLRC correctly treated the petition for relief as an appeal, still, it
should not have allowed the same to prosper, because the petition was filed several months after the ten-day
reglementary period for filing an appeal had expired; and, therefore, it failed to comply with the requirements of an
appeal under the Labor Code and the NLRC Rules of Procedure.
Petitioner Company further contends that in filing separate complaints and/or money claims at the arbitration level in
spite of their pending petition for relief and in spite of the final order, dated October 18, 1993, in NLRC Case No.RAB-IX-
188
0334-82, the private respondents were in fact forum-shopping, an act which is proscribed as trifling with the courts and
abusing their practices. S djad
Anent the second issue, petitioner argues that the private respondents are not entitled to the benefits under the CBA
because employees hired after the term of a CBA are not parties to the agreement, and therefore, may not claim
benefits thereunder, even if they subsequently become members of the bargaining unit.
As for the term of the CBA, petitioner maintains that Article 253 of the Labor Code refers to the continuation in full force
and effect of the previous CBA's terms and conditions. By necessity, it could not possibly refer to terms and conditions
which, as expressly stipulated, ceased to have force and effect.[14]
According to petitioner, the provision on wage increase in the 1981 to 1984 CBA between petitioner Company and NFL
provided for yearly wage increases. Logically, these provisions ended in the year 1984 - the last year that the economic
provisions of the CBA were, pursuant to contract and law, effective. Petitioner claims that there is no contractual basis
for the grant of CBA benefits such as wage increases in 1985 and subsequent years, since the CBA stipulates only the
increases for the years 1981 to 1984.
Moreover, petitioner alleges that it was through no fault of theirs that no new CBA was entered pending appeal of the
decision in NLRC Case No. RAB-IX-0334-82.
Finally, petitioner Company claims that it was never given the opportunity to submit a counter-computation of the
benefits supposedly due the private respondents. Instead, the NLRC allegedly relied on the self-serving computations of
private respondents. Sppedsc
Petitioner's contentions are untenable.
We find no grave abuse of discretion on the part of the NLRC, when it entertained the petition for relief filed by the
private respondents and treated it as an appeal. even if it was filed beyond the reglementary period for filing an appeal.
Ordinarily, once a judgment has become final and executory, it can no longer be disturbed, altered or modified.
However, a careful scrutiny of the facts and circumstances of the instant case warrants liberality in the application of
technical rules and procedure. It would be a greater injustice to deprive the concerned employees of the monetary
benefits rightly due them because of a circumstance over which they had no control. As stated above, private
respondents, in their petition for relief, claimed that they were wrongfully excluded from the list of those entitled to the
CBA benefits by their union, NFL, without their knowledge; and, because they were under the impression that they were
ably represented, they were not able to appeal their case on time. C alrsc
The Supreme Court has allowed appeals from decisions of the labor arbiter to the NLRC, even if filed beyond the
reglementary period, in the interest of justice.[15] Moreover, under Article 218 (c) of the Labor Code, the NLRC may, in
the exercise of its appellate powers, "correct, amend or waive any error, defect or irregularity whether in substance or in
form." Further, Article 221 of the same provides that: "In any proceeding before the Commission or any of the Labor
Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention
of this Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to
ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in
the interest of due process. x x x"[16]
Anent the issue of whether or not the term of an existing CBA, particularly as to its economic provisions, can be extended
beyond the period stipulated therein, and even beyond the three-year period prescribed by law, in the absence of a
new agreement, Article 253 of the Labor Code explicitly provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. - When there is a collective
bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify
such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the
agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo
and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period
and/or until a new agreement is reached by the parties. (Underlining supplied. )
It is clear from the above provision of law that until a new Collective Bargaining Agreement has been executed by and
between the parties, they are duty-bound to keep the status quo and to continue in full force and effect the terms and
conditions of the existing agreement. The law does not provide for any exception nor qualification as to which of the
economic provisions of the existing agreement are to retain force and effect; therefore, it must be understood as
encompassing all the terms and conditions in the said agreement. Sccal r
In the case at bar, no new agreement was entered into by and between petitioner Company and NFL pending appeal
of the decision in NLRC Case No. RAB-IX-0334-82; nor were any of the economic provisions and/or terms and conditions
189
pertaining to monetary benefits in the existing agreement modified or altered. Therefore, the existing CBA in its entirety,
continues to have legal effect.
In a recent case, the Court had occassion to rule that Articles 253 and 253-A[17] mandate the parties to keep the status
quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period
prior to the expiration of the old CBA and/or until a new agreement is reached by the parties. Consequently, the
automatic renewal clause provided for by the law, which is deemed incorporated in all CBA's, provides the reason why
the new CBA can only be given a prospective effect.[18]Calrsp ped
In the case of Lopez Sugar Corporation vs. Federation of Free Workers, et.al,[19] this Court reiterated the rule that
although a CBA has expired, it continues to have legal effects as between the parties until a new CBA has been entered
into. It is the duty of both parties to the CBA to keep the status quo, and to continue in full force and effect the terms
and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the
parties.[20]
To rule otherwise, i.e., that the economic provisions of the existing CBA in the instant case ceased to have force and
effect in the year 1984, would be to create a gap during which no agreement would govern, from the time the old
contract expired to the time a new agreement shall have been entered into. For if, as contended by the petitioner, the
economic provisions of the existing CBA were to have no legal effect, what agreement as to wage increases and other
monetary benefits would govern at all? None, it would seem, if we are to follow the logic of petitioner Company.
Consequently, the employees from the year 1985 onwards would be deprived of a substantial amount of monetary
benefits which they could have enjoyed had the terms and conditions of the CBA remained in force and effect. Such a
situation runs contrary to the very intent and purpose of Articles 253 and 253-A of the Labor Code which is to curb labor
unrest and to promote industrial peace, as can be gleaned from the discussions of the legislators leading to the passage
of said laws, thus:
HON. CHAIRMAN HERRERA: Pag nag-survey tayo sa mga unyon, ganoon ang mangyayari. And I think our responsibility
here is to create a legal framework to promote industrial peace and to develop responsible and fair labor movement.
HON. CHAIRMAN VELOSO: In other words, the longer the period of the effectivity.... Sce dp
xxx
HON. CHAIRMAN VELOSO: (continuing).... in other words, the longer period of effectivity of the CBA, the better for
industrial peace.
xxx.[21]
Having established that the CBA between petitioner Company and NFL remained in full force and effect even beyond
the stipulated term, in the absence of a new agreement; and, therefore, that the economic provisions such as wage
increases continued to have legal effect, we are now faced with the question of who are entitled to the benefits
provided thereunder.
Petitioner Company insists that the rank-and-file employees hired after the term of the CBA inspite of their subsequent
membership in the bargaining unit, are not parties to the agreement, and certainly may not claim the benefits
thereunder.
We do not agree. In a long line of cases, this Court has held that when a collective bargaining contract is entered into
by the union representing the employees and the employer, even the non-member employees are entitled to the
benefits of the contract. To accord its benefits only to members of the union without any valid reason would constitute
undue discrimination against nonmembers.[22] It is even conceded, that a laborer can claim benefits from a CBA
entered into between the company and the union of which he is a member at the time of the conclusion of the
agreement, after he has resigned from said union.[23]Edp sc
In the same vein, the benefits under the CBA in the instant case should be extended to those employees who only
became such after the year 1984. To exclude them would constitute undue discrimination and deprive them of
monetary benefits they would otherwise be entitled to under a new collective bargaining contract to which they would
have been parties. Since in this particular case, no new agreement had been entered into after the CBA's stipulated
term, it is only fair and just that the employees hired thereafter be included in the existing CBA. This is in consonance with
our ruling that the terms and conditions of a collective bargaining agreement continue to have force and effect
beyond the stipulated term when no new agreement is executed by and between the parties to avoid or prevent the
situation where no collective bargaining agreement at all would govern between the employer company and its
employees.
190
Anent the other issues raised by petitioner Company, the Court finds that these pertain to questions of fact that have
already been passed upon by the NLRC. It is axiomatic that, the factual findings of the National Labor Relations
Commission, which have acquired expertise because its jurisdiction is confined to specific matters, are accorded
respect and finality by the Supreme Court, when these are supported by substantial evidence. A perusal of the assailed
resolution reveals that the same was reached on the basis of the required quantum of evidence.
WHEREFORE, in view of the foregoing, the instant petition for certiorari is hereby DISMISSED for lack of merit.
SO ORDERED.
G.R. No. L-54334 January 22, 1986
KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG KILUSAN NG PAGGAWA (KILUSAN), respondents.
Ablan and Associates for petitioner.
Abdulcadir T. Ibrahim for private respondent.
CUEVAS, J.:
Petition for certiorari to annul the decision 1 of the National Labor Relations Commission (NLRC) dated July 20, 1979
which found petitioner Sweden Ice Cream guilty of unfair labor practice for unjustified refusal to bargain, in violation of
par. (g) of Article 2492 of the New Labor Code, 3 and declared the draft proposal of the Union for a collective
bargaining agreement as the governing collective bargaining agreement between the employees and the
management.
The pertinent background facts are as follows:
In a certification election held on October 3, 1978, the Pambansang Kilusang Paggawa (Union for short), a legitimate
late labor federation, won and was subsequently certified in a resolution dated November 29, 1978 by the Bureau of
Labor Relations as the sole and exclusive bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant
(Company for short). The Company's motion for reconsideration of the said resolution was denied on January 25, 1978.
Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the Company with two copies of its
proposed collective bargaining agreement. At the same time, it requested the Company for its counter proposals.
Eliciting no response to the aforesaid request, the Union again wrote the Company reiterating its request for collective
bargaining negotiations and for the Company to furnish them with its counter proposals. Both requests were ignored and
remained unacted upon by the Company.
Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union, on February 14,
1979, filed a "Notice of Strike", with the Bureau of Labor Relations (BLR) on ground of unresolved economic issues in
collective bargaining. 5
Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all attempts towards an
amicable settlement failed, prompting the Bureau of Labor Relations to certify the case to the National Labor Relations
Commission (NLRC) for compulsory arbitration pursuant to Presidential Decree No. 823, as amended. The labor arbiter,
Andres Fidelino, to whom the case was assigned, set the initial hearing for April 29, 1979. For failure however, of the
parties to submit their respective position papers as required, the said hearing was cancelled and reset to another date.
Meanwhile, the Union submitted its position paper. The Company did not, and instead requested for a resetting which
was granted. The Company was directed anew to submit its financial statements for the years 1976, 1977, and 1978.
The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of record, Atty. Rodolfo dela
Cruz. On May 24, 1978, Atty. Fortunato Panganiban formally entered his appearance as counsel for the Company only
191
to request for another postponement allegedly for the purpose of acquainting himself with the case. Meanwhile, the
Company submitted its position paper on May 28, 1979.
When the case was called for hearing on June 4, 1979 as scheduled, the Company's representative, Mr. Ching, who was
supposed to be examined, failed to appear. Atty. Panganiban then requested for another postponement which the
labor arbiter denied. He also ruled that the Company has waived its right to present further evidence and, therefore,
considered the case submitted for resolution.
On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor Relations Commission. On July 20,
1979, the National Labor Relations Commission rendered its decision, the dispositive portion of which reads as follows:
WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of unjustified refusal to bargain, in violation of
Section (g) Article 248 (now Article 249), of P.D. 442, as amended. Further, the draft proposal for a collective bargaining
agreement (Exh. "E ") hereto attached and made an integral part of this decision, sent by the Union (Private respondent)
to the respondent (petitioner herein) and which is hereby found to be reasonable under the premises, is hereby
declared to be the collective agreement which should govern the relationship between the parties herein.
SO ORDERED. (Emphasis supplied)
Petitioner now comes before Us assailing the aforesaid decision contending that the National Labor Relations
Commission acted without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction
in rendering the challenged decision. On August 4, 1980, this Court dismissed the petition for lack of merit. Upon motion
of the petitioner, however, the Resolution of dismissal was reconsidered and the petition was given due course in a
Resolution dated April 1, 1981.
Petitioner Company now maintains that its right to procedural due process has been violated when it was precluded
from presenting further evidence in support of its stand and when its request for further postponement was denied.
Petitioner further contends that the National Labor Relations Commission's finding of unfair labor practice for refusal to
bargain is not supported by law and the evidence considering that it was only on May 24, 1979 when the Union furnished
them with a copy of the proposed Collective Bargaining Agreement and it was only then that they came to know of the
Union's demands; and finally, that the Collective Bargaining Agreement approved and adopted by the National Labor
Relations Commission is unreasonable and lacks legal basis.
The petition lacks merit. Consequently, its dismissal is in order.
Collective bargaining which is defined as negotiations towards a collective agreement,6 is one of the democratic
frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to
create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union and is
characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor Code makes it an unfair labor
practice for an employer to refuse "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 question arising under such an agreement and executing a contract
incorporating such agreement, if requested by either party.
While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate
contract negotiation.7 The mechanics of collective bargaining is set in motion only when the following jurisdictional
preconditions are present, namely, (1) possession of the status of majority representation of the employees'
representative in accordance with any of the means of selection or designation provided for by the Labor Code; (2)
proof of majority representation; and (3) a demand to bargain under Article 251, par. (a) of the New Labor Code . ... all
of which preconditions are undisputedly present in the instant case.
From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt that the
Union has a valid cause to complain against its (Company's) attitude, the totality of which is indicative of the latter's
disregard of, and failure to live up to, what is enjoined by the Labor Code — to bargain in good faith.
We are in total conformity with respondent NLRC's pronouncement that petitioner Company is GUILTY of unfair labor
practice. It has been indubitably established that (1) respondent Union was a duly certified bargaining agent; (2) it
made a definite request to bargain, accompanied with a copy of the proposed Collective Bargaining Agreement, to
the Company not only once but twice which were left unanswered and unacted upon; and (3) the Company made no
counter proposal whatsoever all of which conclusively indicate lack of a sincere desire to negotiate. 8 A Company's
refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and
this is specially true where the Union's request for a counter proposal is left unanswered. 9 Even during the period of
compulsory arbitration before the NLRC, petitioner Company's approach and attitude-stalling the negotiation by a series
of postponements, non-appearance at the hearing conducted, and undue delay in submitting its financial statements,
lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the Union. Petitioner
192
has not at any instance, evinced good faith or willingness to discuss freely and fully the claims and demands set forth by
the Union much less justify its opposition thereto. 10
The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU) vs. Herald Publications 11
the rule had been laid down that "unfair labor practice is committed when it is shown that the respondent employer,
after having been served with a written bargaining proposal by the petitioning Union, did not even bother to submit an
answer or reply to the said proposal This doctrine was reiterated anew in Bradman vs. Court of Industrial Relations 12
wherein it was further ruled that "while the law does not compel the parties to reach an agreement, it does contemplate
that both parties will approach the negotiation with an open mind and make a reasonable effort to reach a common
ground of agreement
As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner capitalizes on the issue of
due process claiming, that it was denied the right to be heard and present its side when the Labor Arbiter denied the
Company's motion for further postponement.
Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements granted in its behalf, the
claimed denial of due process appeared totally bereft of any legal and factual support. As herein earlier stated,
petitioner had not even honored respondent Union with any reply to the latter's successive letters, all geared towards
bringing the Company to the bargaining table. It did not even bother to furnish or serve the Union with its counter
proposal despite persistent requests made therefor. Certainly, the moves and overall behavior of petitioner-company
were in total derogation of the policy enshrined in the New Labor Code which is aimed towards expediting settlement of
economic disputes. Hence, this Court is not prepared to affix its imprimatur to such an illegal scheme and dubious
maneuvers.
Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining Agreement which was
approved and adopted by the NLRC is a total nullity for it lacks the company's consent, much less its argument that
once the Collective Bargaining Agreement is implemented, the Company will face the prospect of closing down
because it has to pay a staggering amount of economic benefits to the Union that will equal if not exceed its capital.
Such a stand and the evidence in support thereof should have been presented before the Labor Arbiter which is the
proper forum for the purpose.
We agree with the pronouncement that it is not obligatory upon either side of a labor controversy to precipitately
accept or agree to the proposals of the other. But an erring party should not be tolerated and allowed with impunity to
resort to schemes feigning negotiations by going through empty gestures.13 More so, as in the instant case, where the
intervention of the National Labor Relations Commission was properly sought for after conciliation efforts undertaken by
the BLR failed. The instant case being a certified one, it must be resolved by the NLRC pursuant to the mandate of P.D.
873, as amended, which authorizes the said body to determine the reasonableness of the terms and conditions of
employment embodied in any Collective Bargaining Agreement. To that extent, utmost deference to its findings of
reasonableness of any Collective Bargaining Agreement as the governing agreement by the employees and
management must be accorded due respect by this Court.
WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued on August 27, 1980, is LIFTED and SET
ASIDE.
No pronouncement as to costs.
SO ORDERED.
[G.R. No. 91915. September 11, 1992.]
DIVINE WORD UNIVERSITY OF TACLOBAN, Petitioner, v. SECRETARY OF LABOR AND EMPLOYMENT and DIVINE WORD
UNIVERSITY EMPLOYEES UNION-ALU, Respondents.
193
Generosa R. Jacinto for Petitioner.
Joji L. Barrios for Private Respondent.
DECISION
ROMERO, J.:
Assailed in this petition for certiorari for being violative of the "constitutional right of employees to self-organization which
includes the right to form, join or assist labor organizations of their own choosing for purposes of collective bargaining," 1
are the Orders of May 23, 1989 and January 17, 1990 issued by then Secretary of Labor and Employment Franklin H. Drilon
and Acting Secretary of Labor and Employment Dionisio D. de la Serna, respectively.chanrobles virtual lawlibrary
Culled from the records are the following facts which led to the filing of the instant petition:chanrob1es virtual 1aw library
On September 6, 1984, Med-Arbiter Bienvenido C. Elorcha certified the Divine Word University Employees Union (DWUEU)
as the sole and exclusive bargaining agent of the Divine Word University (University for brevity). On March 7, 1985,
DWUEU submitted its collective bargaining proposals. On March 26, 1985, the University replied and requested a
preliminary conference to be held on May 28, 1985. However, two days before the scheduled conference or on May 26,
1985, DWUEU’s resigned vice-president Mr. Brigido Urminita (or Urmeneta) wrote a letter addressed to the University
unilaterally withdrawing the CBA proposals. Consequently, the preliminary conference was cancelled. 2
After almost three years, or on March 11, 1988, DWUEU, which had by then affiliated with the Associated Labor Union, 3
requested a conference with the University for the purpose of continuing the collective bargaining negotiations. 4 Not
having heard from the University, DWUEU-ALU sent a follow-up letter on March 23, 1988 reiterating its request for a
conference and warning the University against committing acts of interference through its various meetings with both
the academic and non-academic employees regarding their union affiliation and activities. Despite the letter, the
University persisted in maintaining silence.
On April 25, 1988, DWUEU-ALU filed with the National Conciliation and Mediation Board of the Department of Labor and
Employment a notice of strike on the grounds of bargaining deadlock and unfair labor practice acts, specifically, refusal
to bargain, discrimination and coercion on (sic) employees. 5 The conferences which were held after the filing of the
notice of strike led to the conclusion of an agreement between the University and DWUEU-ALU on May 10, 1888 with the
following terms:chanrobles virtual lawlibrary
"1. Union will submit their (sic) CBA proposals on Friday, May 13, 1988 for whatever action management will take.
194
2. Union and management agrees (sic) to sit down and determine (sic) the number of employees that will represent their
bargaining unit.
3. Conciliation proceedings is (sic) temporarily suspended until the parties inform this office of further development.
4. The issues of discrimination: re Ms. Colinayo and Ms. Cinco Flores is settled.
5. Issue (sic) on coercion and refusal to bargain shall be subject of continuing dialogue.
6. Atty. Jacinto shall be given 10 days notice in the next conciliation meeting." 6
However, it turned out that an hour before the May 10, 1988 agreement was concluded, the University had filed a
petition for certification election with the Region VIII office of the Department of Labor and Employment. 7
On the other hand, on May 19, 1988, DWUEU-ALU, consonant with the agreement, submitted its collective bargaining
proposals. These were ignored by the University. Thereafter, through the National Conciliation and Mediation Board
(NCMB) of Region VIII, marathon conciliation conferences were conducted but to no avail. Hence, on August 25, 1988,
then Secretary of Labor Franklin M. Drilon, exercising his powers under Art. 263(g) of the Labor Code, issued an Order
assuming jurisdiction over the labor dispute and directing all striking workers to report back to work within twenty-four (24)
hours and the management to accept them back under the same terms and conditions prevailing prior to the work
stoppage. The Secretary also designated the NCMB to hear the case and to submit its report thereon. 8
On the same day, Med-Arbiter Rodolfo S. Milado, acting on the University’s petition for certification election, issued an
Order directing the conduct of a certification election to be participated in by DWUEU-ALU and "no union," after he
found the petition to be "well-supported in fact and in law." 9
Said Order prompted the DWUEU-ALU to file with the Secretary of Labor an urgent motion seeking to enjoin Milado from
further acting on the matter of the certification election. On September 20, 1988, the Labor Secretary granted said
motion and directed Milado to hold in abeyance any and all certification election proceedings at the University
pending the resolution of the labor dispute. 10 The Labor Secretary’s Order, predicated on his extraordinary powers
under Art. 263 (g) of the Labor Code, conformed with this Court s Resolution of October 29, 1987 in the Bulletin Today
cases (G.R. Nos. 79276 and 79883) where the issue of strong disagreement among the parties on the question of
representation was deemed subsumed in the labor dispute certified for compulsory arbitration. The Secretary
added:jgc:chanrobles.com.ph
"Underscoring the necessity to conform with this settled doctrine is the fact that the dispute over which this Office
assumed jurisdiction arose from the alleged continued refusal by the University to negotiate a CBA with the Union despite
the latter’s certification as exclusive bargaining agent in 1984. Necessarily related thereto is the representativity issue
raised by the University in its certification election petition. The resolution of these issues in one proceeding is, in the words
of the Supreme Court, ‘meet and proper in view of the very special circumstances obtaining in this case, and will
prevent split jurisdiction and that multiplicity of proceedings which the law abhors’ (24 December 1987 [should be
December 17, 1987] resolution of the Supreme Court in the Bulletin Today cases, supra).chanrobles virtual lawlibrary
Moreover, to allow a certification election to proceed at this point in time might further rupture the already strained
labor-management relations pervading at the University. The assumption order issued by this Office merely served as a
195
temporary bond to hold together such a fragile relationship. More importantly, the projected election hastily decreed
would preempt the proper resolution of the issues raised and pursued so zealously by the employees that prompted
them to stage their strike." 11
The NCMB of Region VIII conducted hearings on the case from October 17-18, 1988. On October 26, 1988, the Divine
Word University Independent Faculty and Employees Union (DWUIFEU), which was registered earlier that day, filed a
motion for intervention alleging that it had "at least 20% of the rank and file employees" of the University. 12
Exercising once again his extraordinary powers under Art. 263(g) of the Labor Code, the Secretary consolidated "the
entire labor dispute including all incidents arising therefrom, or necessarily related thereto" in his Order of May 23, 1989 13
and the following cases were "subsumed or consolidated to the labor dispute" : the petition for certification election
docketed as MED-ARB-Case No. 5-04-88, the DWUEU’s complaint docketed as NLRC Case No. 8-0321-88, and the
University’s complaint docketed as NLRC Case No. 8-0323-88. Thus, in said Order of May 23, 1989, the Secretary of Labor
resolved these issues:" (1) whether there was refusal to bargain and an impasse in bargaining; (2) whether the complaints
for unfair labor practices against each other filed by both parties, including the legality of the strike with the NLRC, which
later on was subsumed by the assumption Order, are with merits; and, (3) whether or not the certification election can
be passed upon by this Office."cralaw virtua1aw library
On the first issue, the Secretary of Labor said:jgc:chanrobles.com.ph
"It is a matter of record that when the Union filed its Notice of Strike (Exh. A) two of the issues it raised were bargaining
deadlock and refusal to bargain. It is also worth mentioning that the CBA proposals by the Union were submitted on
March 7, 1985 (Exh. 9) after Med-Arbiter Bienvenido Elorcha issued a certification election Order dated September 6,
1984 (Exh. 4). An examination of the CBA proposals submitted by the Union of the University showed there was (sic) some
negotiations that has (sic) taken place as indicated on the handwritten notations made in the CBA proposal (Exh. F). The
said proposals include among others, union scope, union recognition, union security, union rights, job security, practices
and privileges, terms and conditions of work, leave of absence, hours of work, compensation salary and wages, workers’
rights and safety, workers’ education, retirement longevity pay, strike and lockouts and grievance machinery.
The said CBA proposals were indorsed by DWU President to Atty. Generosa R. Jacinto, Divine Word University legal
counsel together with a copy of the Union CBA proposals. The submission of the CBA proposals and the reply letter of the
DWU counsel, dated March 26, 1985 to the Union indicated that the CBA negotiations process was set into motion.
DWU’s counsel even suggested that the preliminary conference between the union and the university be scheduled on
28 May 1985 at 2:30 P.M. which unfortunately did not take place due to the alleged withdrawal of the CBA proposals.
Undeniably, the Union and the DWU have not been able to conclude a CBA since its certification on 6 September 1984
by then Med-Arbiter Bienvenido Elorcha. But the non-conclusion of a CBA within one year, as in this case, does not
automatically authorize the holding of a certification election when it appears that a bargaining deadlock issue has
been submitted to conciliation by the certified bargaining agent. The records show that the Notice of Strike was filed by
the Union on 25 April 1988, citing bargaining deadlock as one of the grounds (Annex ‘1’), while the Petition for
Certification Election was filed by the DWU on 10 May 1988. The filing of the notice of strike was precipitated by the
University’s act of not replying to the Union’s letters of March 11 and March 23, 1988.
This being the case, Section 3, Rule V, Book V of the Rules Implementing the Labor Code applies and we
quote:chanrobles.com:cralaw:red
‘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
196
representation question be entertained it (sic) before the filing of a petition for certification election, a bargaining
deadlock to which an 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.’
Clearly, a bargaining deadlock exists and as a matter of fact this is being conciliated by the National Conciliation and
Mediation Board at the time the University filed its Petition for Certification Election on 10 May 1988. In fact the deadlock
remained unresolved and was in fact mutually agreed upon to be conciliated further by the NCMB as per items 1 and 5
of the ‘Agreement’ (Exhibit ‘L’).
The aforequoted rule clearly barred the Med-Arbiter from further entertaining the petition for certification election.
Furthermore, the various communications sent to the University by the Union prior to the filing of the notice of strike was
enough opportunity for the former to raise the issue of representation if it really casts doubt to the majority status of the
Union. More importantly, if DWU indeed doubted the status of the union, how come it entered into an agreement with
the latter on May 10, 1988. Apparently, the move to file the petition on the same day was an afterthought on the part of
the University which this Office considers as fatal." 14
The same Order dismissed not only the case filed by DWUEU-ALU for unfair labor practice on the ground of the union’s
failure to prove the commission of the unfair labor practice acts specifically complained of (NLRC Case No. 8-0321-88)
but also the complaint filed by the University for unfair labor practices and illegal strike for "obvious lack of merit brought
about by its utter failure to submit evidence" (NLRC Case No. 8-0323-88).
Citing the Bulletin Today cases, the said Order pronounced as untenable the University s claim that the assumption Order
earlier issued by the Office of the Secretary of Labor merely held in abeyance the holding of a certification election and
that the representation issue was not deemed consolidated by virtue of the said assumption Order. Accordingly, the
Order has this dispositive portion:jgc:chanrobles.com.ph
"WHEREFORE, ALL THE FOREGOING PREMISES CONSIDERED, the Divine Word University of Tacloban and the Divine Word
University Employees Union are hereby directed to enter into a collective bargaining agreement by adopting the Union’s
CBA proposals sent to the DWU President on 19 May 1988 (Exhibit ‘6’). DWU is hereby warned that any unwarranted
delay in the execution of the collective bargaining agreement will be construed as an unfair labor practice act.
Moreover, the petition for certification election filed by the University is hereby dismissed for lack of merit and the Order
of Med-Arbiter Rodolfo Milado set aside. Likewise, NLRC CASES Nos. 8-0321-88 and 8-0323 filed by the Union and the
DWU, respectively, are hereby dismissed for lack of merit.
SO ORDERED." 15
The University filed a motion for the reconsideration of said Order. It was opposed by the DWUEU-ALU. However, since on
May 5, 1989 the DWUEU-ALU had filed a second notice of strike charging the University with violation of the return-to-work
order of the Secretary of Labor and unfair labor practices such as dismissal of union officers, coercion of employees and
illegal suspension, 16 the Office of the Secretary called for a series of conciliation and mediation conferences between
the parties. At the July 5, 1989 conference, the University agreed to submit its proposals on how to settle amicably the
labor dispute on or before July 17, 1989.
On said date, however, the University failed to appear. Instead, its representative phoned in a request for the resetting of
the conference purportedly because its Board of Directors had failed to muster a quorum. Hence, after so informing
ALU’s Eastern Visayas Vice-President, the conference was rescheduled for July 19, 1989. The University once again failed
to appear.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
197
In view of the University’s intransigence, the DWUEU-ALU pursued its second notice of strike on November 24, 1989. Four
days later, the University filed with the Office of the Secretary of Labor a motion praying that said Office assume
jurisdiction over the dispute or certify the same to the NLRC for compulsory arbitration on the ground that the strike
affected not only the University but also its other academic and non-academic employees, the students and their
parents. On December 4, 1989, the Office of the Secretary of Labor received a Resolution passed by the students of the
University urging said Office’s assumption of jurisdiction over the labor dispute and the earliest resolution of the case.
Consequently, on December 29, 1989, Secretary Drilon issued an Order reiterating the August 28, 1988 Order which
assumed jurisdiction over the labor dispute. He ordered all striking workers to return to work within 24 hours and the
University to accept them back under the same terms and conditions of employment; deemed the issues raised in the
May 5, 1989 notice of strike as "subsumed in this case" ; ordered the Director of Regional Office No. VIII to hear the issues
raised in said notice of strike and to submit his findings and recommendations within ten days from submission of the case
by the parties, and enjoined the parties to cease and desist from any act that may "aggravate the employer-employee
relationship."cralaw virtua1aw library
On January 17, 1990, Acting Secretary of Labor Dionisio L. de la Serna, "dismissed" for lack of merit the University’s motion
for reconsideration and affirmed the Order of May 23, 1989. He noted the fact that the March 7, 1985 collective
bargaining proposals of the DWUEU had not been validly withdrawn as the union’s Vice-President had resigned and the
withdrawal was signed only by three of the eight members of the Executive Board of said union. Granting that the
withdrawal was valid, the Acting Secretary believed that it did not "exculpate the University from the duty to bargain
with the Union" because the collective bargaining processes had been "set in motion from the time the CBA proposals
was (sic) received by the University until the impasse took place on account of its failure to reply to the Union’s letters
pursuing its CBA Proposals dated March 11 and 23, 1988."cralaw virtua1aw library
On the University’s assertion that no negotiations took place insofar as the March 7, 1985 collective bargaining proposals
are concerned, the Acting Secretary found that:jgc:chanrobles.com.ph
". . . The records indicate otherwise Conciliation meetings were conducted precisely to discuss the CBA proposals the
Union submitted to the University on March 7, 1985. As a matter of fact, the University admitted the existence of the
deadlock when a provision was incorporated in the agreement it signed on May 10, 1988 with the Union which
reads:chanrob1es virtual 1aw library
‘a. That on the matter of Bargaining Deadlock —
1. Union will submit their (renewed) CBA proposals on Friday May 13, 1988 for whatever action management will take.
2. Union and Management agree to sit down and determine the number of employees that will represent (constitute)
their bargaining unit;
x x x’
On account of the deadlock regarding the March 7, 1985 CBA proposals, it was agreed that the Union submit a
renewed CBA proposal which it did on May 19, 1988. The records indicate that no response was made by the University.
The uncooperative posture of the University to respond and continue with the negotiations could very well be explained
when one (1) hour prior to the start of the conciliation on May 10, 1988, the University filed a Petition for Certification with
(sic) Regional Office. The surreptitious filing of the petition and at the same time cunningly entering into an agreement
which required the Union to submit a renewed CBA proposal, is patently negotiating in bad faith. The University should
198
have candidly and timely raised the issue of representation, if it believed that such issue was valid, not by entering into
an agreement. The May 10, 1988 Agreement only served to falsely heighten the expectations of the Union and this
Office that a mutually acceptable settlement of the dispute was in the offing. This Office cannot tolerate such
actuations by the University." 17
The Acting Secretary then concluded that for reneging on the agreement of May 10, 1988 and for its "reluctance and
subscription to legal delay," the University should be "declared in default." He also maintained that since under the
circumstances the University cannot claim deprivation of due process, the Office of the Secretary of Labor may rightfully
impose the Union’s May 19, 1988 collective bargaining agreement proposals motu proprio. On the University’s
contention that the motion for intervention of the DWU-IFEU was not resolved, the Acting Secretary ruled that said motion
was in effect denied when the petition for certification election filed by the University was dismissed in the Order of May
23, 1989.chanrobles virtual lawlibrary
Hence, the University had recourse to instant petition.
In its petition for certiorari and prohibition with preliminary injunction filed on February 9, 1990, the University raises as
grounds therefor the following:jgc:chanrobles.com.ph
"A. Respondent Secretary committed grave and patent abuse of discretion amounting to lack of jurisdiction in issuing his
order dated 17 January 1990 finally denying petitioner’s motion for reconsideration in the face of the order dated 29
December 1989 and subsequent acts of DOLE official subsuming the second notice of strike with the first notice of strike.
B. In the absence of a certified CBA and there having been no certification election held in petitioner unit for more than
five (5) years, a certification election is mandatory.
C. Respondent Secretary committed grave and patent abuse of discretion in issuing his orders dated 23 May 1989 and
17 January 1990 disregarding evidence on record, provisions of law and established jurisprudence.
D. Petitioner was denied due process." 18
Citing the dispositive portion of the December 29, 1989 Order of the Secretary of Labor which states that the issues raised
in the May 5, 1989 notice of strike "are ordered subsumed in this case" and elaborating on the meaning of the word
"subsume," i.e., "to include within a larger class, group, order, etc.," 19 the petitioner University argues that the Secretary
of Labor "cannot resolve petitioner’s and (intervenor) DWU-IFEU’s motions for reconsideration (in the NS. 1) of the Order
dated 23 May 1989 until the proceedings in the subsumed NS. 2 are terminated." It opines that since the Regional
Director is an extension of the Secretary of Labor, the latter should have waited for the recommendation of the former
on the issues in notices of strike nos. 1 and 2 before the he issued the Order of January 17, 1990.
We agree with the Acting Secretary of Labor’s observation that the action for intervention had in effect been denied by
the dismissal of the petition for certification election in the May 23, 1989 Order. The sub silencio treatment of the motion
for intervention in said Order does not mean that the motion was overlooked. It only means, as shown by the findings of
facts in the same Order, that there was no necessity for the holding of a certification election wherein the DWU-IFEU
could participate. In this regard, petitioner’s undue interest in the resolution of the DWU-IFEU’s motion for intervention
becomes significant since a certification election is the sole concern of employees except where the employer itself has
to file a petition for certification election. But once an employer has filed said petition, as the petitioner did in this case, its
active role ceases and it becomes a mere bystander. Any uncalled-for concern on the part of the employer may give
rise to the suspicion that it is batting for a company union. 20
199
Petitioner’s contention that the Acting Secretary of Labor should have deferred the issuance of the Order of January 17,
1990 until after his receipt of the Regional Director’s recommendation on the notices of strike is, under the circumstances,
untenable. Ideally, a single decision or order should settle all controversies resulting from a labor dispute. This is in
consonance with the principle of avoiding multiplicity of suits. However, the exigencies of a case may also demand that
some matters be threshed out and resolved ahead of the others. Any contrary interpretation of the Secretary of Labor’s
powers under Art. 263(g) of the Labor Code on this matter would only result in confusion and delay in the resolution of
the manageable aspects of the labor dispute.chanrobles lawlibrary : rednad
In this case, resolution of the motion for reconsideration at the earliest possible time was urgently needed to set at rest
the issues regarding the first notice of strike, the certification election and the unfair labor practice cases filed by the
University and the DWUEU-ALU. The nature of the business of the University demanded immediate and effective action
on the part of the respondent public officials. Otherwise, not only the contending parties in the dispute would be
adversely affected but more importantly, the studentry and their parents. It should be emphasized that on January 17,
1990, the second notice of strike could not have been resolved as yet considering that at that time, Regional Director
Teddy S. Cabeltes was still conducting the conference between the parties in pursuance of the directive in the Order of
December 19, 1989. The Secretary, or for that matter, the Acting Secretary, could not have intended the efforts of the
Regional Director to be inutile or fruitless. Thus, when he set aside the issues raised in the second notice of strike, the
Acting Secretary was acting in accordance with the exigencies of the circumstances of the case. Hardly can it be said
to be an abuse of his discretion.
On the issue of whether or not a certification election should have been ordered by the Secretary of Labor, pertinent are
the following respective provisions of the Labor Code and Rule V, Book V of the Implementing Rules and Regulations of
the same Code:jgc:chanrobles.com.ph
"ART. 258. When an employer may file petition. — When requested to bargain collectively, an employer may petition the
Bureau for an election. If there is no existing certified collective bargaining agreement in the unit, the Bureau shall, after
hearing, order a certification election.
All certification cases shall be decided within twenty (20) working days.
The Bureau shall conduct a certification election within twenty (20) days in accordance with the rules and regulations
prescribed by the Secretary of Labor.
Sec. 3. When to file. — In the absence of a collective bargaining agreement duly registered 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 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 valid notice of strike or lockout. (Emphasis supplied)
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."cralaw virtua1aw library
These provisions make it plain that in the absence of a collective bargaining agreement, an employer who is requested
to bargain collectively may file a petition for certification election any time except upon a clear showing that one of
these two instances exists: (a) the petition is filed within one year from the date of issuance of a final certification election
200
result or (b) when a bargaining deadlock had been submitted to conciliation or arbitration or had become the subject
of a valid notice of strike or lockout.
While there is no question that the petition for certification election was filed by the herein petitioner after almost four
years from the time of the certification election and, therefore, there is no question as to the timeliness of the petition, the
problem appears to lie in the fact that the Secretary of Labor had found that a bargaining deadlock exists.chanrobles
lawlibrary : rednad
A "deadlock" is defined as the "counteraction of things producing entire stoppage: a state of inaction or of neutralization
caused by the opposition of persons or of factions (as in government or a voting body): standstill." 21 There is a deadlock
when there is a "complete blocking or stoppage resulting from the action of equal and opposed forces; as, the
deadlock of a jury or legislature." 22 The word is synonymous with the word impasse 23 which, within the meaning of the
American federal labor laws, "presupposes reasonable effort at good faith bargaining which, despite noble intentions,
does not conclude in agreement between the parties." 24
A thorough study of the records reveals that there was no "reasonable effort at good faith bargaining" specially on the
part of the University. Its indifferent attitude towards collective bargaining inevitably resulted in the failure of the parties
to arrive at an agreement. As it was evident that unilateral moves were being undertaken only by the DWUEU-ALU, there
was no "counteraction" of forces or an impasse to speak of. While collective bargaining should be initiated by the union,
there is a corresponding responsibility on the part of the employer to respond in some manner to such acts. This is clear
from the provisions of the Labor Code Art. 250(a) of which states:jgc:chanrobles.com.ph
"ART. 250. Procedure in collective bargaining. — The following procedures shall be observed in collective
bargaining:chanrob1es virtual 1aw library
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement
of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such
notice.
(b) Should differences arise on the basis of such notice and reply, either party may request for a conference which shall
begin not later than ten (10) calendar days from the date of request.
(c) If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own initiative and
immediately call the parties to conciliation meetings. The Board shall have the power to issue subpoenas requiring the
attendance of the parties to such meetings. It shall be the duty of the parties to participate fully and promptly in the
conciliation meetings the Board may call;
(d) During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or
impede the early settlement of the disputes; andchanrobles.com.ph : virtual law library
(e) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a
voluntary arbitrator."cralaw virtua1aw library
Considering the procedure outlined above, the Court cannot help but notice that the DWUEU was not entirely blameless
in the matter of the delay in the bargaining process. While it is true that as early as March 7, 1985, said union had
201
submitted its collective bargaining proposals and that, its subsequent withdrawal by the DWUEU Vice-President being
unauthorized and therefore ineffective, the same proposals could be considered as subsisting, the fact remains that said
union remained passive for three years. The records do not show that during this three-year period, it exerted any effort
to pursue collective bargaining as a means of attaining better terms of employment.
It was only after its affiliation with the ALU that the same union, through the ALU Director for Operations, requested an
"initial conference" for the purpose of collective bargaining. 25 That the DWUEU abandoned its collective bargaining
proposals prior to its affiliation with ALU is further confirmed by the fact that in the aforequoted May 10, 1988 agreement
with the University, said Union bound itself to submit a new set of proposals on May 13, 1988. Under the circumstances,
the agreement of May 10, 1988 may as well be considered the written notice to bargain referred to in the aforequoted
Art. 250(a) of the Labor Code, which thereby set into motion the machinery for collective bargaining, as in fact, on May
19, 1988, DWUEU-ALU submitted its collective bargaining proposals.
Be that as it may, the Court is not inclined to rule that there has been a deadlock or an impasse in the collective
bargaining process. As the Court earlier observed, there has not been a "reasonable effort at good faith bargaining" on
the part of the University. While DWUEU-ALU was opening all possible avenues for the conclusion of an agreement, the
record is replete with evidence on the University’s reluctance and thinly disguised refusal to bargain with the duly
certified bargaining agent, such that the inescapable conclusion is that the University evidently had no intention of
bargaining with it. Thus, while the Court recognizes that technically, the University has the right to file the petition for
certification election as there was no bargaining deadlock to speak of, to grant its prayer that the herein assailed Orders
be annulled would put an unjustified premium on bad faith bargaining.
Bad faith on the part of the University is further exemplified by the fact that an hour before the start of the May 10, 1988
conference, it surreptitiously filed the petition for certification election. And yet during said conference, it committed
itself to "sit down" with the Union. Obviously, the University tried to preempt the conference which would have legally
foreclosed its right to file the petition for certification election. In so doing, the University failed to act in accordance with
Art. 252 of the Labor Code which defines the meaning of the duty to bargain collectively as "the performance of a
mutual obligation to meet and convene promptly and expeditiously in good faith." Moreover, by filing the petition for
certification election while agreeing to confer with the DWUEU-ALU, the University violated the mandate of Art. 19 of the
Civil Code that" (e)very person must, in the exercise of his rights and in the performance of his duties, act with justice,
give everyone his due, and observe honesty and good faith."cralaw virtua1aw library
Moreover, the University’s unscrupulous attitude towards the DWUEU-ALU is also betrayed by its belated questioning of
the status of the said union. The communications between them afforded the University ample opportunity to raise the
issue of representation if indeed it was doubtful of the DWUEU-ALU’s status as a majority union, but it failed to do so. On
the other hand, in the agreement of May 10, 1988, the University even agreed "to sit down and determine the number of
employees that will represent their bargaining unit." This clearly indicates that the University recognized the DWUEU-ALU
as the bargaining representative of the employees and is, therefore, estopped from questioning the majority status of
the said union.chanrobles.com.ph : virtual law library
Hence, petitioner’s contention that the DWUEU-ALU’s proposals may not be unilaterally imposed on it on the ground that
a collective bargaining agreement is a contract wherein the consent of both parties is indispensable is devoid of merit. A
similar argument had already been disregarded in the case of Kiok Loy v. NLRC, 26 where we upheld the order of the
NLRC declaring the union’s draft CBA proposal as the collective agreement which should govern the relationship
between the parties. Kiok Loy v. NLRC is applicable in the instant case considering that the facts therein have also been
indubitably established in this case. These factors are: (a) the union is the duly certified bargaining agent; (b) it made a
definite request to bargain and submitted its collective bargaining proposals, and (c) the University made no counter
proposal whatsoever. As we said in Kiok Loy," [a] company’s refusal to make counter proposal if considered in relation to
the entire bargaining process, may indicate bad faith and this is especially true where the Union’s request for a counter
proposal is left unanswered." 27 Moreover, the Court added in the same case that "it is not obligatory upon either side of
a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should not be
tolerated and allowed with impunity to resort to schemes feigning negotiations by going through empty gestures." 28
202
That being the case, the petitioner may not validly assert that its consent should be a primordial consideration in the
bargaining process. By its acts, no less than its inaction which bespeak its insincerity, it has forfeited whatever rights it
could have asserted as an employer. We, therefore, find it superfluous to discuss the two other contentions in its petition.
WHEREFORE, the instant petition is hereby DISMISSED for lack of merit. This decision is immediately executory. Costs
against the petitioner.
SO ORDERED.
Bidin, Davide, Jr. and Melo, JJ., concur.
Gutierrez, Jr., J., is on leave.
[G.R. No. 146728. February 11, 2004]
GENERAL MILLING CORPORATION, petitioner, vs. HON. COURT OF APPEALS, GENERAL MILLING CORPORATION
INDEPENDENT LABOR UNION (GMC-ILU), and RITO MANGUBAT, respondents.
DECISION
QUISUMBING, J.:
Before us is a petition for certiorari assailing the decision[1] dated July 19, 2000, of the Court of Appeals in CA-G.R. SP No.
50383, which earlier reversed the decision[2] dated January 30, 1998 of the National Labor Relations Commission (NLRC)
in NLRC Case No. V-0112-94.
The antecedent facts are as follows:
In its two plants located at Cebu City and Lapu-Lapu City, petitioner General Milling Corporation (GMC) employed 190
workers. They were all members of private respondent General Milling Corporation Independent Labor Union (union, for
brevity), a duly certified bargaining agent.
On April 28, 1989, GMC and the union concluded a collective bargaining agreement (CBA) which included the issue of
representation effective for a term of three years. The CBA was effective for three years retroactive to December 1, 1988.
Hence, it would expire on November 30, 1991.
On November 29, 1991, a day before the expiration of the CBA, the union sent GMC a proposed CBA, with a request
that a counter-proposal be submitted within ten (10) days.
As early as October 1991, however, GMC had received collective and individual letters from workers who stated that
they had withdrawn from their union membership, on grounds of religious affiliation and personal differences. Believing
that the union no longer had standing to negotiate a CBA, GMC did not send any counter-proposal.
On December 16, 1991, GMC wrote a letter to the unions officers, Rito Mangubat and Victor Lastimoso. The letter stated
that it felt there was no basis to negotiate with a union which no longer existed, but that management was nonetheless
always willing to dialogue with them on matters of common concern and was open to suggestions on how the
company may improve its operations.
In answer, the union officers wrote a letter dated December 19, 1991 disclaiming any massive disaffiliation or resignation
from the union and submitted a manifesto, signed by its members, stating that they had not withdrawn from the union.
203
On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the ground of incompetence. The union
protested and requested GMC to submit the matter to the grievance procedure provided in the CBA. GMC, however,
advised the union to refer to our letter dated December 16, 1991.[3]
Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC, Arbitration Division, Cebu City. The
complaint alleged unfair labor practice on the part of GMC for: (1) refusal to bargain collectively; (2) interference with
the right to self-organization; and (3) discrimination. The labor arbiter dismissed the case with the recommendation that a
petition for certification election be held to determine if the union still enjoyed the support of the workers.
The union appealed to the NLRC.
On January 30, 1998, the NLRC set aside the labor arbiters decision. Citing Article 253-A of the Labor Code, as amended
by Rep. Act No. 6715,[4] which fixed the terms of a collective bargaining agreement, the NLRC ordered GMC to abide
by the CBA draft that the union proposed for a period of two (2) years beginning December 1, 1991, the date when the
original CBA ended, to November 30, 1993. The NLRC also ordered GMC to pay the attorneys fees.[5]
In its decision, the NLRC pointed out that upon the effectivity of Rep. Act No. 6715, the duration of a CBA, insofar as the
representation aspect is concerned, is five (5) years which, in the case of GMC-Independent Labor Union was from
December 1, 1988 to November 30, 1993. All other provisions of the CBA are to be renegotiated not later than three (3)
years after its execution. Thus, the NLRC held that respondent union remained as the exclusive bargaining agent with the
right to renegotiate the economic provisions of the CBA. Consequently, it was unfair labor practice for GMC not to enter
into negotiation with the union.
The NLRC likewise held that the individual letters of withdrawal from the union submitted by 13 of its members from
February to June 1993 confirmed the pressure exerted by GMC on its employees to resign from the union. Thus, the NLRC
also found GMC guilty of unfair labor practice for interfering with the right of its employees to self-organization.
With respect to the unions claim of discrimination, the NLRC found the claim unsupported by substantial evidence.
On GMCs motion for reconsideration, the NLRC set aside its decision of January 30, 1998, through a resolution dated
October 6, 1998. It found GMCs doubts as to the status of the union justified and the allegation of coercion exerted by
GMC on the unions members to resign unfounded. Hence, the union filed a petition for certiorari before the Court of
Appeals. For failure of the union to attach the required copies of pleadings and other documents and material portions
of the record to support the allegations in its petition, the CA dismissed the petition on February 9, 1999. The same
petition was subsequently filed by the union, this time with the necessary documents. In its resolution dated April 26, 1999,
the appellate court treated the refiled petition as a motion for reconsideration and gave the petition due course.
On July 19, 2000, the appellate court rendered a decision the dispositive portion of which reads:
WHEREFORE, the petition is hereby GRANTED. The NLRC Resolution of October 6, 1998 is hereby SET ASIDE, and its decision
of January 30, 1998 is, except with respect to the award of attorneys fees which is hereby deleted, REINSTATED.[6]
A motion for reconsideration was seasonably filed by GMC, but in a resolution dated October 26, 2000, the CA denied it
for lack of merit.
Hence, the instant petition for certiorari alleging that:
THE COURT OF APPEALS DECISION VIOLATED THE CONSTITUTIONAL RULE THAT NO DECISION SHALL BE RENDERED BY ANY
COURT WITHOUT EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH IT IS BASED.
II
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN REVERSING THE DECISION OF THE NATIONAL LABOR
RELATIONS COMMISSION IN THE ABSENCE OF ANY FINDING OF SUBSTANTIAL ERROR OR GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION.
III
THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT APPRECIATING THAT THE NLRC HAS NO JURISDICTION TO
DETERMINE THE TERMS AND CONDITIONS OF A COLLECTIVE BARGAINING AGREEMENT.[7]
Thus, in the instant case, the principal issue for our determination is whether or not the Court of Appeals acted with grave
abuse of discretion amounting to lack or excess of jurisdiction in (1) finding GMC guilty of unfair labor practice for
204
violating the duty to bargain collectively and/or interfering with the right of its employees to self-organization, and (2)
imposing upon GMC the draft CBA proposed by the union for two years to begin from the expiration of the original CBA.
On the first issue, Article 253-A of the Labor Code, as amended by Rep. Act No. 6715, states:
ART. 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining Agreement that the parties may
enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning
the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be
conducted by the Department of Labor and Employment outside of the sixty-day period immediately before the date of
expiry of such five year term of the Collective Bargaining Agreement. All other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than three (3) years after its execution....
The law mandates that the representation provision of a CBA should last for five years. The relation between labor and
management should be undisturbed until the last 60 days of the fifth year. Hence, it is indisputable that when the union
requested for a renegotiation of the economic terms of the CBA on November 29, 1991, it was still the certified collective
bargaining agent of the workers, because it was seeking said renegotiation within five (5) years from the date of
effectivity of the CBA on December 1, 1988. The unions proposal was also submitted within the prescribed 3-year period
from the date of effectivity of the CBA, albeit just before the last day of said period. It was obvious that GMC had no
valid reason to refuse to negotiate in good faith with the union. For refusing to send a counter-proposal to the union and
to bargain anew on the economic terms of the CBA, the company committed an unfair labor practice under Article 248
of the Labor Code, which provides that:
ART. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of the following unfair
labor practice:
...
(g) To violate the duty to bargain collectively as prescribed by this Code;
...
Article 252 of the Labor Code elucidates the meaning of the phrase duty to bargain collectively, thus:
ART. 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....
We have held that the crucial question whether or not a party has met his statutory duty to bargain in good faith
typically turn$ on the facts of the individual case.[8] There is no per setest of good faith in bargaining.[9] Good faith or
bad faith is an inference to be drawn from the facts.[10] The effect of an employers or a unions actions individually is not
the test of good-faith bargaining, but the impact of all such occasions or actions, considered as a whole.[11]
Under Article 252 abovecited, both parties are required to perform their mutual obligation to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an agreement. The union lived up to this
obligation when it presented proposals for a new CBA to GMC within three (3) years from the effectivity of the original
CBA. But GMC failed in its duty under Article 252. What it did was to devise a flimsy excuse, by questioning the existence
of the union and the status of its membership to prevent any negotiation.
It bears stressing that the procedure in collective bargaining prescribed by the Code is mandatory because of the basic
interest of the state in ensuring lasting industrial peace. Thus:
ART. 250. Procedure in collective bargaining. The following procedures shall be observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement
of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such
notice. (Underscoring supplied.)
GMCs failure to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in
bargaining with the union. Its excuse that it felt the union no longer represented the workers, was mainly dilatory as it
turned out to be utterly baseless.
We hold that GMCs refusal to make a counter-proposal to the unions proposal for CBA negotiation is an indication of its
bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there
is a clear evasion of the duty to bargain collectively.[12]
205
Failing to comply with the mandatory obligation to submit a reply to the unions proposals, GMC violated its duty to
bargain collectively, making it liable for unfair labor practice. Perforce, the Court of Appeals did not commit grave
abuse of discretion amounting to lack or excess of jurisdiction in finding that GMC is, under the circumstances, guilty of
unfair labor practice.
Did GMC interfere with the employees right to self-organization? The CA found that the letters between February to June
1993 by 13 union members signifying their resignation from the union clearly indicated that GMC exerted pressure on its
employees. The records show that GMC presented these letters to prove that the union no longer enjoyed the support of
the workers. The fact that the resignations of the union members occurred during the pendency of the case before the
labor arbiter shows GMCs desperate attempts to cast doubt on the legitimate status of the union. We agree with the
CAs conclusion that the ill-timed letters of resignation from the union members indicate that GMC had interfered with the
right of its employees to self-organization. Thus, we hold that the appellate court did not commit grave abuse of
discretion in finding GMC guilty of unfair labor practice for interfering with the right of its employees to self-organization.
Finally, did the CA gravely abuse its discretion when it imposed on GMC the draft CBA proposed by the union for two
years commencing from the expiration of the original CBA?
The Code provides:
ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement. ....It shall be the duty of both
parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement
during the 60-day period [prior to its expiration date] and/or until a new agreement is reached by the parties.
(Underscoring supplied.)
The provision mandates the parties to keep the status quo while they are still in the process of working out their
respective proposal and counter proposal. The general rule is that when a CBA already exists, its provision shall continue
to govern the relationship between the parties, until a new one is agreed upon. The rule necessarily presupposes that all
other things are equal. That is, that neither party is guilty of bad faith. However, when one of the parties abuses this grace
period by purposely delaying the bargaining process, a departure from the general rule is warranted.
In Kiok Loy vs. NLRC,[13] we found that petitioner therein, Sweden Ice Cream Plant, refused to submit any counter
proposal to the CBA proposed by its employees certified bargaining agent. We ruled that the former had thereby lost its
right to bargain the terms and conditions of the CBA. Thus, we did not hesitate to impose on the erring company the
CBA proposed by its employees union - lock, stock and barrel. Our findings in Kiok Loy are similar to the facts in the
present case, to wit:
petitioner Companys approach and attitude stalling the negotiation by a series of postponements, non-appearance at
the hearing conducted, and undue delay in submitting its financial statements, lead to no other conclusion except that
it is unwilling to negotiate and reach an agreement with the Union. Petitioner has not at any instance, evinced good
faith or willingness to discuss freely and fully the claims and demands set forth by the Union much less justify its objection
thereto.[14]
Likewise, in Divine Word University of Tacloban vs. Secretary of Labor and Employment,[15] petitioner therein, Divine Word
University of Tacloban, refused to perform its duty to bargain collectively. Thus, we upheld the unilateral imposition on the
university of the CBA proposed by the Divine Word University Employees Union. We said further:
That being the said case, the petitioner may not validly assert that its consent should be a primordial consideration in the
bargaining process. By its acts, no less than its action which bespeak its insincerity, it has forfeited whatever rights it could
have asserted as an employer.[16]
Applying the principle in the foregoing cases to the instant case, it would be unfair to the union and its members if the
terms and conditions contained in the old CBA would continue to be imposed on GMCs employees for the remaining
two (2) years of the CBAs duration. We are not inclined to gratify GMC with an extended term of the old CBA after it
resorted to delaying tactics to prevent negotiations. Since it was GMC which violated the duty to bargain collectively,
based on Kiok Loy and Divine Word University of Tacloban, it had lost its statutory right to negotiate or renegotiate the
terms and conditions of the draft CBA proposed by the union.
We carefully note, however, that as strictly distinguished from the facts of this case, there was no pre-existing CBA
between the parties in Kiok Loy and Divine Word University of Tacloban. Nonetheless, we deem it proper to apply in this
case the rationale of the doctrine in the said two cases. To rule otherwise would be to allow GMC to have its cake and
eat it too.
Under ordinary circumstances, it is not obligatory upon either side of a labor controversy to precipitately accept or
agree to the proposals of the other. But an erring party should not be allowed to resort with impunity to schemes feigning
negotiations by going through empty gestures.[17] Thus, by imposing on GMC the provisions of the draft CBA proposed
206
by the union, in our view, the interests of equity and fair play were properly served and both parties regained equal
footing, which was lost when GMC thwarted the negotiations for new economic terms of the CBA.
The findings of fact by the CA, affirming those of the NLRC as to the reasonableness of the draft CBA proposed by the
union should not be disturbed since they are supported by substantial evidence. On this score, we see no cogent reason
to rule otherwise. Hence, we hold that the Court of Appeals did not commit grave abuse of discretion amounting to lack
or excess of jurisdiction when it imposed on GMC, after it had committed unfair labor practice, the draft CBA proposed
by the union for the remaining two (2) years of the duration of the original CBA. Fairness, equity, and social justice are
best served in this case by sustaining the appellate courts decision on this issue.
WHEREFORE, the petition is DISMISSED and the assailed decision dated July 19, 2000, and the resolution dated October
26, 2000, of the Court of Appeals in CA-G.R. SP No. 50383, are AFFIRMED. Costs against petitioner.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
G.R. No. 113907 February 28, 2000
MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG-UWP), ITS PRESIDENT BEDA MAGDALENA
VILLANUEVA, MARIO DAGANIO, DONATO GUERRERO, BELLA P. SANCHEZ, ELENA TOBIS, RHODA TAMAYO, LIWAYWAY
MALLILIN, ELOISA SANTOS, DOMINADOR REBULLO, JOSE IRLAND, TEOFILA QUEJADA, VICENTE SAMONTINA, FELICITAS
DURIAN, ANTONIO POLDO, ANGELINA TUGNA, SALVADOR PENALOSA, LUZVIMINDA TUBIG, ILUMINADA RIVERA, ROMULO
SUMILANG, NENITA BARBELONIA, LEVI BASILIA, RICARDO PALAGA, MERCY ROBLES, LEODEGARIO GARIN, DOMINGO
ECLARINAL, MELCHOR GALLARDO, MARCELO GARIN, ROSALINA BAUTISTA, MARY ANN TALIGATOS, ALEJANDRO SANTOS,
ANTONIO FRAGA, LUZ GAPULTOS, MAGDALENA URSUA, EUGENIO ORDAN, LIGAYA MANALO, PEPITO DELA PAZ, PERLITA
DIMAQUIAT, MYRNA VASQUEZ, FLORENTINA SAMPAGA, ARACELI FRAGA, MAXIMINA FAUSTINO, MARINA TAN, OLIGARIO
LOMO, PRECILA EUSEBIO, SUSAN ABOGANO, CAROLINA MANINANG, GINA GLIFONIA, OSCAR SOTTO, CELEDONA
MALIGAYA, EFREN VELASQUEZ, DELIA ANOVER, JOSEPHINE TALIMORO, MAGDALENA TABOR, NARCISA SARMIENTO, SUSAN
MACASIEB, FELICIDAD SISON, PRICELA CARTA, MILA MACAHILIG, CORAZON NUNALA, VISITACION ELAMBRE, ELIZABETH
INOFRE, VIOLETA BARTE, LUZVIMINDA VILLOSA, NORMA SALVADOR, ELIZABETH BOGATE, MERLYN BALBOA, EUFRECINA
SARMIENTO, SIMPLICIA SIMPLICIA BORLEO, MATERNIDAD DAVID, LAILA JOP, POTENCIANA CULALA, LUCIVITA NAVARRO,
ROLANDO BOTIN, AMELITA MAGALONA, AGNES CENA, NOLI BARTOLAY, DANTE AQUINO, HERMINIA RILLON, CANDIDA
APARIJADO, LYDIA JIMENEZ, ELIZABETH ANOCHE, ALDA MURO, TERESA VILLANUEVA, TERESITA RECUENCO, ELIZA SERRANO,
ESTELLA POLINAR, GERTRUDES NUNEZ, FELIPE BADIOLA, ROSLYN FERNANDEZ, OSCAR PAGUTA, NATIVIDAD BALIWAS,
ELIZABETH BARCIBAL, CYNTHIA ESTELLER, TEODORA SANTOS, ALICIA PILAR, MILA PATENO, GLORIA CATRIZ, MILA
MACAHILIG, ADELAIDA DE LEON, ROSENDO EDILO, ARSENIA ESPIRITU, NUMERIANO CABRERA, CONCEPSION ARRIOLA,
PAULINA DIMAPASOK, ANGELA SANGCO, PRESILA ARIAS, ZENAIDA NUNES, EDITHA IGNACIO, ROSA GUIRON, TERESITA
CANETA, ALICIA ARRO, TEOFILO RUWETAS, CARLING AGCAOILI, ROSA NOLASCO, GERLIE PALALON, CLAUDIO DIRAS,
LETICIA ALBOS, AURORA ALUBOG, LOLITA ACALEN, GREGORIO ALIVIO, GUILLERMO ANICETA, ANGELIE ANDRADA, SUSAN
ANGELES, ISABELITA AURIN, MANUELA AVELINA, CARLING AGCAOILI, TERESITA ALANO, LOLITA AURIN, EMMABETH
ARCIAGA, CRESENCIA ACUNA, LUZVIMINDA ABINES, FLORENCIA ADALID, OLIVIA AGUSTIN, EVANGELINE ALCORAN,
ROSALINA ALFERES, LORNA AMANTE, FLORENTINA AMBITO, JULIETA AMANONCO, CARMEN AMARILLO, JOSEFINA
AMBAGAN, ZENAIDA ANAYA, MARIA ANGLO, EDITHA ANTA ZO, MARY JANE ANTE, ANDREA AQUINO, ROWENA ARABIT,
MARIETA ARAGON, REBECCA ARCENA, LYDIA ARCIDO, FERNANDO ARENAS, GREGORIO ARGUELLES, EDITHA ARRIOLA,
EMMA ATIENZA, EMMA ATIENZA, TEODY ATIENZA, ELIZABETH AUSTRIA, DIOSA AZARES, SOLIDA AZAINA, MILAGROS BUAG,
MARIA BANADERA, EDNALYN BRAGA, OFELIA BITANGA, FREDISMINDA BUGUIS, VIOLETA BALLESTEROS, ROSARIO
BALLADJAY, BETTY BORIO, ROMANA BAUTISTA, SUSARA BRAVO, LILIA BAHINGTING, ENIETA BALDOZA, DAMIANA
BANGCORE, HERMINIA BARIL, PETRONA BARRIOS, MILAGROS BARRAMEDA, PERLA BAUTISTA, CLARITA BAUTISTA, ROSALINA
BAUTISTA, ADELINA BELGA, CONSOLACION BENAS, MARIA BEREZO, MERCEDES BEREBER, VIOLETA BISCOCHO, ERNESTO
BRIONES, ALVINA BROSOTO, AGUSTINA BUNYI, CARMEN BUGNOT, ERLINDA BUENAFLOR, LITA BAQUIN, CONSEJO BABOL,
CRISANTA BACOLOD, CELIA DE BACTAT, MAZIMA BAGA, ELENA BALADAD, ROSARIO BALADJAY, AMALIA BALAGTAS,
ANITA BALAGTAS, MARIA BALAKIT, RUFINA BALATAN, REBECCA BALDERAMA, AMELIA BALLESTER, BELEN BARQUIO,
BERNANDITA BASILIDES, HELEN BATO, HELEN BAUTISTA, ROMANA BAUTISTA, ALMEDA BAYTA, AVELINA BELAYON, NORMA
DE BELEN, THELMA DE BELEN, JOCELYN BELTRAN, ELENA BENITEZ, VIRGINIA BERNARDINO, MERLINA BINUYAG, LINA BINUYA,
BLESILDA BISNAR, SHIRLEY BOLIVAR, CRESENTACION MEDLO, JOCELYN BONIFACIO, AMELIA BORBE, AMALIA BOROMEO,
ZENAIDA BRAVO, RODRIGO BEULDA, TERESITA MENDEZ, ELENA CAMAN, LALIANE CANDELARIA, MARRY CARUJANO,
REVELINA CORANES, MARITESS CABRERA, JUSTINA CLAZADA, APOLONIA DELA CRUZ, VICTORIA CRUZ, JOSEFINA DELA
CRUZ, MARITESS CATANGHAL, EDNA CRUZ, LUCIA DE CASTRO, JOSIE CARIASO, OFELIA CERVANTES, MEDITA CORTADO,
AMALIA CASAJEROS, LUCINA CASTILIO, EMMA CARPIO, ANACORITA CABALES, YOLANDA CAMO, MILA CAMAZUELA,
ANITA CANTO, ESTELA CANCERAN, FEMENCIA CANCIO, CYNTHIA CAPALAD, MERLE CASTILLO, JESUSA CASTRO, CECILIA
207
CASTILLO, SILVERITA CASTRODES, VIVIAN CELLANO, NORMA CELINO, TERESITA CELSO, GLORIA COLINA, EFIPANIA
CONSTANTINO, SALVACION CONSULTA, MEDITA CORTADO, AIDA CRUZ, MARISSA DELA CRUZ, EDITO CORCILLES, JELYNE
CRUZ, ROSA CORPOS, ROSITA CUGONA, ELSIE CABELLES, EMMA CADUT, VICTORIA CALANZA, BARBARA CALATA, IMELDA
CALDERON, CRISTINA CALIDGUID, EMMALINDA CAMALON, MARIA CAMERINO, CARMENCITA CAMPO, CONNIE CANEZO,
LOURDES CAPANANG, MA. MILAGROS CAPILI, MYRNA T. CAPIRAL, FLOR SAMPAGA, SUSAN B. CARINO, ROSARIO
CARIZON, VIRGINIA DEL CARMEN, EMMA CARPIO, PRESCILA CARTA, FE CASERO, LUZ DE CASTRO, ANNA CATARONGAN,
JOSEFINA CASTISIMO, JOY MANALO, EMMIE CAWALING, JOVITA CARA, MARINA CERBITO, MARY CAREJANO, ESTELA R.
CHAVEZ, CONCEPCION PARAJA, GINA CLAUDIO, FLORDELIZA CORALES, EDITO CORCIELER, ROSA C. CORROS, AMELIA
CRUZ, JELYNE CRUZ, WILFREDO DELA CRUZ, REINA CUEVAS, MARILOU DEJECES, JOSEPHINE DESACULA, EDITHA DEE, EDITHA
DIAZ, VIRGIE DOMONDON, CELSA DOROPAW, VIOLETA DUMELINA, MARIBEL DIMATATAC, ELBERTO DAGANIO, LETECIA
DAGOHOY, DINDO DALUZ, ANGELITA DANTES, GLORIA DAYO, LUCIA DE CASTRO, CARLITA DE GUZMAN, CARMEN DELA
CRUZ, MERCY DE LEON, MARY DELOS REYES, MARIETA DEPILO, MATILDE DIBLAS, JULIETA DIMAYUGA, TEODORA
DIMAYUGA, YOLANDA DOMDOM, LUCITA DONATO, NELMA DORADO, RITA DORADO, SUSAN DUNTON, HERMINIA SAN
ESTEBAN, AMALI EUGENIO, OLIVIA EUSOYA, ERNESTO ESCOBIN, EVELYN ESCUREL, LYDIA ESCOBIN, VICENTE E. ELOIDA.
ELENA EGAR, GLORIA ERENO, NORMA ESPIRIDION, ARSENIA ESPIRITU, AURORA ESTACIO, DEMETRIA ESTONELO, MILAGROS
FONSEGA, LYDIA FLORENTINO, JULIA FARABIER, TRINIDAD FATALLA, IMELDA FLORES, JESSINA FRANCO, MA. CRISTINA
FRIJAS, ESPECTACION FERRER, BERDENA FLORES, LEONILA FRANCISCO, BERNARDA FAUSTINO, DOLORES FACUNDO,
CRETITA FAMILARAN, EMELITA FIGUERAS, MA. VIRGINIA FLORENDO, AURORA FRANCISCO, MA. JESUSA FRANCISCO,
NENITA FUENTES, MARILOU GOLINGAN, JUANITA GUERRERO, LYDIA GUEVARRA, SOCORRO GONZAGA, PATRICIA GOMEO,
ROSALINDA GALAPIN, CARMELITA GALVEZ, TERESA GLE, SONIA GONZALES, PRIMITA GOMEZ, THERESA GALUA, JOSEFINA
GELUA, BRENDA GONZAGA, FLORA GALLARDO, LUCINDA GRACILLA, VICTORIA GOZUM, NENITA GAMAO, EDNA GARCIA,
DANILO GARCIA, ROSARIO GIRAY, ARACELI GOMEZ, JOEMARIE GONZAGA, NELIA GONZAGA, MARY GRANCE GOZON,
CARMEN GONZALES, MERLITA GREGORIO, HERMINIA GONZALES, CARLITA DE GUZMAN, MODESTA GABRENTINA, EDITHA
GADDI, SALVACIO GALIAS, MERLINDA GALIDO, MELINDA GAMIT, JULIETA GARCIA, EMELITA GAVINO, CHARITO GILLIA,
GENERA GONEDA, CRESTITA GONZALES, FRANCISCA GUILING, JULIAN HERNANDEZ, HERRADURA, SUSANA HIPOLITO,
NERISSA HAZ, SUSAN HERNAEZ, APOLONIA ISON, SUSAN IBARRA, LUDIVINA IGNACIO, CHOLITA INFANTE, JULIETA ITURRIOS,
ANITA IBO, MIRASOL INGALLA, JULIO JARDINIANO, MERLITA JULAO, JULIETA JULIAN, MARIBETH DE JOSE, JOSEPHINE JENER,
IMELDA JATAP, JULIETA JAVIER, SALOME JAVIER, VICTORIA JAVIER, SALVACION JOMOLO, EDNA JARNE, LYDIA JIMENEZ,
TERESITA DE JUAN, MARILYN LUARCA, ROSITA LOSITO, ROSALINA LUMAYAG, LORNA LARGA, CRESTETA DE LEON, ZENAIDA
LEGASPI, ADELAIDA LEON, IMELDA DE LEON, MELITINA LUMABI, LYDIA LUMABI, ASUNCION LUMACANG, REGINA
LAPIADRIO, MELANIA LUBUGUAN, EVANGELINE LACAP, PELAGIA LACSI, LORNA LAGUI, VIRGIE LAITAN, VIRGINIA LEE,
CRESTELITA DE LEON, FELICISIMA LEONERO, DIOSA LOPE, ANGELITA LOPEZ, TERESITA LORICA, JUANITA MENDIETA, JUANITA
MARANQUEZ, JANET MALIFERO, INAS MORADOS, MELANIE MANING, LUCENA MABANGLO, CLARITA MEJIA, IRENE
MENDOZA, LILIA MORTA, VIGINIA MARAY, CHARITO MASINAHON, FILMA MALAYA, LILIA MORTA, VIRGINIA MARAY,
CHARITO MASINAHON, FILMA MALAYA, LILIA MORTA, ROSITA MATIBAG, LORENZA MLINA, SABINA DEL MUNDO, EDITHA
MUYCO, NARCISA MABEZA, MA. FE MACATANGAY, CONCEPCION MAGDARAOG, IMELDA MAHIYA, ELSA MALLARI,
LIGAYA MANAHAN, SOLEDA MANLAPAS, VIRGINIA MAPA, JOSEI MARCOS, LIBRADA MARQUEZ, VIRGINIA MAZA, JULIANITA
MENDIETA, EDILBERTA MENDOZA, IRENE MERCADO, HELEN MEROY, CRISTINA MEJARES, CECILIA MILLET, EMELITA MINON,
JOSEPHINE MIRANA, PERLITA MIRANO, EVANGELINE MISBAL, ELEANOR MORALES, TERESITA MORILLA, LYDIA NUDO, MYRIAM
NAVAL, CAROLINA NOLIA, ALICIA NUNEZ, MAGDALENA NAGUIDA, ELSA NICOL, LILIA NACIONALES, MA. LIZA MABO,
REMEDIOS NIEVES, MARGARITA NUYLAN, TERESITA NIEVES, PORFERIA NARAG, RHODORA NUCASA, CORAZON OCRAY,
LILIA OLIMPO, VERONA OVERENCIA, FERMIN OSENA, FLORENCIA OLIVAROS, SOLEDAD OBEAS, NARISSA OLIVEROS,
PELAGIA ORTEGA, SUSAN ORTEGA, CRISTINA PRENCIPE, PURITA PENGSON, REBECCA PACERAN, EDNA PARINA, MARIETA
PINAT, EPIFANIA PAJERLAN, ROSALINA PASIBE, CECILIA DELA PAZ, LORETA PENA, APOLONIA PALCONIT, FRANCISCO
PAGUIO, LYDIA PAMINTAHON, ELSIE PACALDO, TERESITA PADILLA, MYRNA PINEDA, MERCEIDTA PEREZ, NOVENA
PORLUCAS, TERESITA PODPOD, ADORACION PORNOBI, ALICIA PERILLO, HELEN JOY PENDAL, LOURDES PACHECO,
LUZVIMINDA PAGALA, LORETA PAGAPULAN, FRANCISCO PAGUIO, PRISCO PALACA, FLORA PAMINTUAN, NOEMI
PARISALES, JOSEPHINE PATRICIO, CRISTINA PE BENITO, ANGELA PECO, ANGELITA PENA, ESTER PENONES, NORMA PEREZ,
MAURA PERSEVERANCIA, MARINA PETILLA, JOSIE PIA, ZULVILITA PIODO, REBECCA PACERAN, CLARITA POLICARPIO,
MAXIMO POTENTO, PORFIRIO POTENTO, FLORDELIZA PUMARAS, FERNANDO QUEVEDO, JULIANA QUINDOZA, CHARITO
QUIROZ, CARMELITA ROSINO, RODELIA RAYONDOYON, FLORENCIA RAGOS, REBECCA ROSALES, ROSALYN RIVERO,
FRANCISCO RUIZ, FRANCIA ROSERO, EMELY RUBIO, EDILBERTO RUIO, JUANA RUBY, RAQUEL REYES, MERCY ROBLES, ESTELA
RELANO, ROSITA REYES NIMFA RENDON, EPIFANIO RAMIRO, MURIEL REALCO, BERNARDITA RED, LEONITA RODIL, BENITA
REBOLA, DELMA REGALARIO, LENY REDILLAS, JULIETA DELA ROSA, FELICITAS DELA ROSA, SUSAN RAFALLO, ELENA
RONDINA, NORMA RACELIS, JOSEPHINE RAGEL, ESPERANZA RAMIREZ, LUZVIMINDA RANADA, CRISTINA RAPINSAN,
JOCELYN RED, ORLANDO REYES, TERESITA REYES, ANGELITA ROBERTO, DELIA ROCHA, EDLTRUDES ROMERO, MELECIA
ROSALES, ZENAIDA ROTAO, BELEN RUBIS, FE RUEDA, SYLVIA SONGCAYAWON, CRISTINA SANANO, NERCISA SARMIENTO,
HELEN SIBAL, ESTELITA SANTOS, NORMA SILVESTRE, DARLITA SINGSON, EUFROCINA SARMIENTO, MYRNA SAMSON,
EMERLINA SADIA, LORNA SALAZAR, AVELINA SALVADOR, NACIFORA SALAZAR, TITA SEUS, MARIFE SANTOS, GRACIA
SARMIENTO, ANGELITA SUMANGIL, ELIZABETH SICAT, MA. VICTORIA SIDELA, ANALITA SALVADOR, MARITES SANTOS,
VIRGINIA SANTOS, THELMA SARONG, NILDA SAYAT, FANCITA SEGUNDO, FYNAIDA SAGUI, EDITHA SALAZAR, EDNA SALZAR,
EMMA SALENDARIO, SOLEDAD SAMSON, EDNA SAN DIEGO, TERESITA SAN GABRIEL, GERTRUDES SAN JOSE, EGLECERIA
OSANCHEZ, ESTRELLA SANCHEZ, CECILIA DELOS SANTOS, LUISA SEGOVIA, JOCELYN SENDING, ELENA SONGALIA, FELICITAS
SORIANO, OFELIA TIBAYAN, AIDA TIRNIDA, MONICA TIBAYAN, CRISTETA TAMBARAN, GLORIA TACDA, NENVINA, FELINA
TEVES, ANTONINA DELA TORRE, MAXIMA TANILON, NENA TABAT, ZOSIMA TOLOSA, MARITA TENOSO, IMELDA TANIO, LUZ
TANIO, EVANGELINE TAYO, JOSEFINA TINGTING, ARSENIA TISOY, MAGDALENA TRAJANO, JOSEFINA UBALDE, GINA UMALI,
208
IRMA VALENZUELA, FELY VALDEZ, PAULINA VALEZ, ROSELITA VALLENTE, LOURDES VELASCO, AIDA VILLA, FRANCISCA
VILLARITO, ZENAIDA VISMONTE, DELIA VILLAMIEL, NENITA VASQUEZ, JOCELYN VILLASIS, FERMARGARITA VARGAS, CELIA
VALLE, MILA CONCEPCION VIRAY, DOMINGA VALDEZ, LUZVIMINDA VOCINA, MADELINE VIVERO, RUFINA VELASCO,
AUREA VIDALEON, GLORIA DEL VALLE, THELMA VALLOYAS, CYNTHIA DELA VEGA, ADELA VILLAGOMEZ, TERESITA VINLUAN,
EUFEMIA VITAN, GLORIA VILLAFLORES, EDORACION VALDEZ, ANGELITA VALDEZ, ILUMINADA VALENCI, MYRNA VASQUEZ,
EVELNYN VEJERAMO, TEODORA VELASQUEZ, EDAN VILLANUEVA, PURITA VILLASENOR, SALVADOR WILSON, EMELINA YU,
ADELFA YU, ANA ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, MERCEDITA CASTILLO, JOCELYN CASTRO,
CREMENIA DELA CRUZ, JOSEPHINE IGNACIO, MELITA ILILANGOS, LIGAYA LUMAYAT, DELIA LUMBES, ROSITA LIBRADO, DELIA
LAGRAMADA, GEMMA MAGPANTAY, EMILY MENDOZA, FIDELA PANGANIBAN, LEONOR RIZALDO, ILUMINDA RIVERA,
DIVINA SAMBAYAN, ELMERITA SOLAYAO, NANCY SAMALA, JOSIE SUMARAN, LUZVIMINDA ABINES, ALMA ACOL, ROBERTO
ADRIATICO, GLORIA AGUINALDO, ROSARIO ALEYO, CRISTETA ALEJANDRO, LILIA ALMOGUERA, CARMEN AMARILLO,
TRINIDAD ARDANIEL, CERINA AVENTAJADO, ZENAIDA AVAYA, LOLITA ARABIS, MARIA ARSENIA, SOFIA AGUINALDO, SALVE
ABAD, JOSEFINA AMBANGAN EMILIA AQUINO, JOSEFINA AQUINO, JULIANA AUSAN, AMERCIANA ACOSTA, CONCEPCION
ALEROZA, DIANA ADOVOS, FELY ADVINCULA, SEOMINTA ARIAS, JOSEPHINE ARCEDE, NORMA AMISTOSO, PRESENTACION
ALONOS, EMMA ATIENZA, LEONIDA AQUINO, ANITA ARILLON, ADELAIDA ARELLANO, NORMA AMISTOSO, JOSEPHINE
ARCEDE, SEMIONITA ARIAS, JOSEFINA BANTUG, LOLITA BARTE, HERMINIA BASCO, MARGARITA BOTARDO, RUFINO BUGNOT,
LOLITA BUSTILLO, ISABEL BALAKIT, ROSARIO BARRERO, TESSIE BALBOS, NORMA BENISANO, GUILLERMA BRUGES, BERNADETTE
BARTOLOME, SHIRLEY BELMONTE, MERONA BELZA, AZUCENA BERNALES, JOSE BASCO, NIMPHA BANTOG, BENILDA BUBAN,
REGINA BUBAN, SALOME BARRAMEDA, IRENE BISCO, FELICITAS BAUTISTA, VIOLETA BURA, LINA BINUYA, BIBIANA BAARDE,
ELSA BAES, ANASTACIA BELONZO, SONIA BENOYO, ELIZABETH BACUNGAN, PATRICIA BARRAMEDA, ERLINDA BARCELONA,
EMMA BANICO, APOLONIA BUNAO, LUCITA BOLEA, PACIFICA BARCELONA, EDITHA BASIJAN, RENITA BADAMA, ELENA
BALADAD, CRESENCIA BAJO, BERNADITA BASILID, MELINDA BEATO, YOLANDA BATANES, EDITHA BORILLA, ANITA BAS, ELSA
CALIPUNDAN, MARIA CAMERINO,VIRGINIA CAMPOSANO, MILAGROS CAPILI, CARINA CARINO, EUFEMIA CASIHAN,
NENITA CASTRO, FLORENCIA CASUBUAN, GIRLIE CENTENO, MARIANITA CHIQUITO, IMELDA DELA CRUZ, TEODOSIA GONG,
TEOFILA CARACOL, TERESITA CANTA, IRENEA CUNANAN, JULITA CANDILOSAS, VIOLETA CIERES, MILAGROS DELA CRUZ,
FLOREPES CAPULONG, CARMENCITA CAMPO, MARILYN CARILLO, RUTH DELA CRUZ, RITA CIJAS, LYDIA CASTOR, VIRGIE
CALUBAD, EMELITA CABERA, CRISTETA CRUZ, ERLINDA COGADAS, IMELDA CALDERON, SUSIE LUZ CEZAR, ESTELA CHAVEZ,
NORMA CABRERA, ELDA DAGATAN, LEONISA DIMACUNA, ERNA DUGTONG, FLORDELISA DIGMA, VIRGILIO DADIOS,
LOLITA DAGTA, ADELAIDA DORADO, CELSA DATUMANONG, VIRGINIA DOCTOLERO, EDNA SAN DIEGO, JULIETA DANG,
JULIETA DORANTINAO, LOLITA DAGANO, JUDITH DIAZ, MARIA ENICANE, MARITA ESCARDE, ENRIMITA ESMAYOR, ROSARIO
EPIRITU, REMEDIOS EMBOLTORIO, IRENE ESTUITA, TERESITA ERESE, ERMELINDA ELEZO, MARIA ESTAREJA, MERLITA ESQUERRA,
YOLANDA FELICITAS, FRUTO FRANCIA, MARTHA FRUTO, LILIA FLORES, SALVACION FORTALESA, JUDITH FAJARDO, SUSANA
FERNANDO, EDWIN FRANCISCO, NENITA GREGORY, ROSA CAMILO, MARIVIC GERRARDO, CHARITA GOREMBALEM,
NORMA GRANDE, DOLORES GUTIERREZ, CHARLIE GARCIA, LUZ GALVEZ, ADELAIDA GAMILLA, LUZ GAPULTOS, ERLINDA
GARCIA, HELEN GARCIA, ERLINDA GAUDIA, FRANCISCA GUILING, MINTA HERRERA, ASUNCION HONOA, JUAN
HERNANDEZ, LUCERIA ANNA MAE HERNANDEZ, JULIANA HERNANDEZ, EDITHA IGNACIO, ANITA INOCENCIO, EULALIA
INSORIO, ESTELITA IRLANDA, MILAGROS IGNACIO, LINDA JABONILLO, ADELIMA JAEL, ROWENA JARABJO, ROBERT
JAVILINAR, CLARITA JOSE, CARMENCITA JUNDEZ, SOFIA LALUCIS, GLORIA LABITORIA, ANGELITA LODES, ERLINDA LATOGA,
EVELYN LEGASPI, ROMEO LIMCHOCO, JESUS LARA, ESTRELLA DE LUNA, LORETA LAREZA, JOSEPHINE ALSCO, MERCY DE
LEON, CONSOLACION LIBAO, MARILYN LIWAG, TERESITA LIZAZO, LILIA MACAPAGAL, SALVACION MACAREZA, AMALIA
MADO, TERESITA MADRIAGA, JOVITA MAGNAYE, JEAN MALABAD, FRANCISCA MENDOZA, NELCITA MANGANTANG,
TERESITA NELLA, GENEROZA MERCADO, CRISTETA MOJANA, BERNARDA MONGADO, LYDIA MIRANDA, ELISA MADRILEJOS,
LOIDA MAGSINO, AMELIA MALTO, JULITA MAHIBA, MYRNA MAYORES, LUISA MARAIG, FLORENCIA MARAIG, EMMA
MONZON, IMELDA MAGDANGAN, VICTORIA MARTIN, NOEMI MANGUILLO, BASILIZA MEDINA, VICTORIO MERCADO,
ESTELA MAYPA, EMILIA MENDOZA, LINA MAGPANTAY, FELICIANA MANLOLO, ELENA MANACOP, WILMA MORENO, JUANA
MENDOZA, EVELYN DEL MUNDO, ROSIE MATUTINA, MATILDE MANALO, TERESITA MENDEZ, FELIPINA MAGONCIA, MARIA
MANZANO, LIGAYA MANALO, LETICIA MARCHA, MARINA MANDIGMA, LETICIA MANDASOC, PRESCILLA MARTINEZ, JULIA
MENDOZA, PACITA MAGALLANES, ANGELINA MARJES, SHIRLEY MELIGRITO, IRENE MERCADO, ELISA MAATUBANG,
MARCELINA NICOLAS, AGUSTINA NICOLAS, ROSA NOLASCO, WILMA NILAYE, VIOLETA ORACION, ANGELA OSTAYA,
JUANITA OSAYOS, MAGDALENA OCAMPO, MARDIANA OCTA, ROSELA OPAO, LIBRADA OCAMPO, YOLANDA OLIVER,
MARCIA ORLANDA, PAGDUNAN, RITA PABILONA, MYRA PALACA, BETHLEHEM PALINES, GINA PALIGAR, NORMA PALIGAR,
DELMA PEREZ, CLAUDIA PRADO, JULIE PUTONG, LUDIVINA PAGSALINGAN, MERLYN PANALIGAN, VIOLETA PANAMBITAN,
NOREN PAR, ERLINDA PARAGAS, MILA PARINO, REBECCA PENAFLOR, IMELDA PENAMORA, JERMICILLIN PERALTA,
REBECCA PIAPES, EDITHA PILAR, MAROBETH PILLADO, DIOSCORO PIMENTEL, AURORA LAS PINAS, EVANGELINA PINON,
MA. NITA PONDOC, MA. MERCEDES PODPOD, ANGELITO PANDEZ, LIGAYA PIGTAIN, LEONILA QUIAMBAO, ELENA QUINO,
MARITESS QUIJANO, CHOLITA REBUENO, LOLITA REYES, JOCELYN RAMOS, ROSITA RAMIREZ, ELINORA RAMOS, ISABEL
RAMOS, ANNABELLE RESURRECCION, EMMA REYES, ALILY ROXAS, MARY GRACE DELOS REYES, JOCELYN DEL ROSARIO,
JOSEFINA RABUSA, ANGELITA ROTAIRO, SAMCETA ROSETA, EDERLINA RUIZ, ZENAIDA ROSARIO, BENITA REBOLA, ROSITA
REVILLA, ROSITA SANTOS, ROWENA SALAZAR, EMILYN SARMIENTO, ANA SENIS, ELOISA SANTOS, NARCISA SONGLIAD, ELMA
SONGALIA, AMPARA SABIO, JESSIE SANCHEZ, VIVIAN SAMILO, GLORIA SUMALINOG, ROSALINA DELOS SANTOS, MARIETA
SOMBRERO, HELEN SERRETARIO, TEODORO SULIT, BELLA SONGUINES, LINDA SARANTAN, ESTELLA SALABAR, MILAGROS
SISON, GLORIA TALIDAGA, CECILIA TEODORO, ROMILLA TUAZON, AMELITA TABULAO, MACARIA TORRES, LUTGARDA TUSI,
ESTELLA TORREJOS, VICTORIA TAN, MERLITA DELA VEGA, WEVINA ORENCIA, REMEDIOS BALECHA, TERESITA TIBAR,
LACHICA LEONORA, JULITA YBUT, JOSEFINA ZABALA, WINNIE ZALDARIAGA, BENHUR ANTENERO, MARCELINA ANTENERO,
ANTONINA ALAPAN, EDITHA ANTOZO, ROWENA ARABIT, ANDRA AQUINO, TERESITA ANGULO, MARIA ANGLO, MYRNA
ALBOS, ELENITA AUSTRIA, ANNA ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, REMEDIOS BOLECHE, MACARIA
209
BARRIOS, THELMA BELEN, ESTELLA BARRETTO, JOCELYN CHAVEZ, VIRGINIA CAPISTRANO, BENEDICTA CINCO, YOLLY
CATPANG, REINA CUEVAS, VICTORIA CALANZA, FE CASERO, ROBERTA CATALBAS, LOURDES CAPANANG, CLEMENCIA
CRUZ, JOCELYN COSTO, MERCEDITA CASTILLO, EDITHA DEE, LUCITA DONATO NORMA ESPIRIDION, LORETA FERNANDEZ,
AURORA FRANCISCO, VILMA FAJARDO, MODESTA GABRENTINA, TERESITA GABRIEL, SALVACION GAMBOA, JOSEPHINE
IGNACIO, SUSAN IBARRA, ESPERANZA JABSON, OSCAR JAMBARO, ROSANNA JARDIN, CORAZON JALOCON, ZENAIDA
LEGASPI, DELLA LAGRAMADA, ROSITA LIBRANDO, LIGAYA LUMAYOT, DELIA LUMBIS, LEONORA LANCHICA, RELAGIA LACSI,
JOSEFINA LUMBO, VIOLETA DE LUNA, EVELYN MADRID, TERESITA MORILLA, GEMMA MAGPANTAY, EMILY MENDOZA, IRENEA
MEDINA, NARCISA MABEZA, ROSANNA MEDINA, DELIA MARTINEZ, ROSARIO MAG-ISA, EDITHA MENDOZA, EDILBERTA
MENDOZA, FIDELA PANGANIBAN, OFELIA PANGANIBAN, AZUCENA POSTGO, LOURDES PACHECO, LILIA PADILLA, MARISSA
PEREZ, FLORDELIZA PUMARES, LUZ REYES, NORMA RACELIS, LEONOR RIZALDO, JOSIE SUMASAR, NANCY SAMALA, EMERLITA
SOLAYAO, MERCEDITA SAMANIEGO, BLANDINA SIMBULAN, JOCELYN SENDING, LUISITA TABERRERO, TERESITA TIBAR,
ESTERLINA VALDEZ, GLORIA VEJERANO, ILUMINADA VALENCIA, MERLITA DELA VEGA, VIRGIE LAITAN, JULIET VILLARAMA,
LUISISTA OCAMPO, NARIO ANDRES, ANSELMA TULFO, GLORIA MATEO, FLANIA MENDOZA, CONNIE CANGO, EDITHA
SALAZAR, MYRNA DELOS SANTOS, TERESITA SERGIO, CHARITO GILLA, FLORENTINA HERNAEZ, BERNARDINO VIRGINIA, AMPO
ANACORITA, SYLVIA POASADAS, ESTRELLA ESPIRITU, CONCORDIA LUZURIAGA, MARINA CERBITO, EMMA REYES, NOEMI
PENISALES, CLARITA POLICARPIO, BELEN BANGUIO, HERMINIA ADVINCULA, LILIA MORTA, REGINA LAPIDARIO, LORNA
LARGA, TERESITA VINLUAN, MARITA TENOSO, NILDS SAYAT, THELMA SARONG, DELMA REGALIS, SUSAN RAFAULO, ELENA
RONDINA, MYRNA PIENDA, VIOLETA DUMELINA, FLORENCIA ADALID, FILMA MELAYA, ERLINDA DE BAUTISTA, MATILDE DE
BLAS, DOLORES FACUNDO, REBECCA LEDAMA, MA. FE MACATANGAY, EMELITA MINON, NORMA PAGUIO, ELIZA
VASQUEZ, GLORIA VILLARINO, MA. JESUS FRANCISCO, TERESITA GURPIDO, LIGAYA MANALO, FE PINEDA, MIRIAM OCMAR,
LUISA SEGOVIA, TEODY ATIENZA, SOLEDA AZCURE, CARMEN DELA CRUZ, DMETRIA ESTONELO, MA. FLORIDA LOAZNO,
IMELDA MAHIYA, EDILBERTA MENDOZA, SYLVIA POSADAS, SUSANA ORTEGA, JOSEPHINE D. TALIMORO, TERESITA LORECA,
ARSENIA TISOY, LIGAYA MANALO, TERESITA GURPIO, FE PINEDA, and MARIA JESUS FRANCISCO, petitioners,
vs.
HON. CRESENCIO J. RAMOS, NATIONAL LABOR RELATIONS COMMISSION, M. GREENFIELD (B), INC., SAUL TAWIL, CARLOS T.
JAVELOSA, RENATO C. PUANGCO, WINCEL LIGOT, MARCIANO HALOG, GODOFREDO PACENO, SR., GERVACIO
CASILLANO, LORENZO ITAOC, ATTY. GODOFREDO PACENO, JR., MARGARITO CABRERA, GAUDENCIO RACHO, SANTIAGO
IBANEZ, AND RODRIGO AGUILING, respondents.
PURISIMA, J.:
At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court to annul the decision of the National Labor
Relations Commission in an unfair labor practice case instituted by a local union against its employer company and the
officers of its national federation.
The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc., (B) (MSMG), hereinafter referred to as
the "local union", is an affiliate of the private respondent, United Lumber and General Workers of the Philippines (ULGWP),
referred to as the "federation". The collective bargaining agreement between MSMG and M. Greenfield, Inc., names the
parties as follows:
This agreement made and entered into by and between:
M. GREENFIELD, INC. (B) a corporation duly organized in accordance with the laws of the Republic of the Philippines with
office address at Km. 14, Merville Road, Parañaque, Metro Manila, represented in this act by its General manager, Mr.
Carlos T. Javelosa, hereinafter referred to as the Company;
-and-
MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (B) (MSMG)/UNITED LUMBER AND GENERAL
WORKERS OF THE PHILIPPINES (ULGWP), a legitimate labor organization with address at Suite 404, Trinity Building, T. M.
Kalaw Street, Manila, represented in this act by a Negotiating Committee headed by its National President, Mr.
Godofredo Paceno, Sr., referred to in this Agreement as the UNION.1
The CBA includes, among others, the following pertinent provisions:
Art. II-Union Security
Sec. 1. Coverage and Scope. All employees who are covered by this Agreement and presently members of the UNION
shall remain members of the UNION for the duration of this Agreement as a condition precedent to continued
employment with the COMPANY.
xxx xxx xxx

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Sec. 4. Dismissal. Any such employee mentioned in Section 2 hereof, who fails to maintain his membership in the UNION
for non-payment of UNION dues, for resignation and for violation of UNION's Constitution and By-Laws and any new
employee as defined in Section 2 of this Article shall upon written notice of such failure to join or to maintain membership
in the UNION and upon written recommendation to the COMPANY by the UNION, be dismissed from the employment by
the COMPANY; provided, however, that the UNION shall hold the COMPANY free and blameless from any and all
liabilities that may arise should the dismissed employee question, in any manner, his dismissal; provided, further that the
matter of the employee's dismissal under this Article may be submitted as a grievance under Article XIII and, provided,
finally, that no such written recommendation shall be made upon the COMPANY nor shall COMPANY be compelled to
act upon any such recommendation within the period of sixty (60) days prior to the expiry date of this Agreement
conformably to law.
Art. IX
Sec. 4. Program Fund — The Company shall provide the amount of P10,000.00 a month for a continuing labor education
program which shall be remitted to the Federation . . .2
On September 12, 1986, a local union election was held under the auspices of the ULGWP wherein the herein petitioner,
Beda Magdalena Villanueva, and the other union officers were proclaimed as winners. Minutes of the said election were
duly filed with the Bureau of Labor Relations on September 29, 1986.
On March 21, 1987, a Petition for Impeachment was filed with the national federation ULGWP by the defeated
candidates in the aforementioned election.
On June 16, 1987, the federation conducted an audit of the local union funds. The investigation did not yield any
unfavorable result and the local union officers were cleared of the charges of anomaly in the custody, handling and
disposition of the union funds.1âwphi1.nêt
The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the local union officers with the DOLE NCR on
November 5, 1987, docketed as NCR-OD-M-11-780-87. However, the same was dismissed on March 2, 1988, by Med-
Arbiter Renato Parungo for failure to substantiate the charges and to present evidence in support of the allegations.
On April 17, 1988, the local union held a general membership meeting at the Caruncho Complex in Pasig. Several union
members failed to attend the meeting, prompting the Executive Board to create a committee tasked to investigate the
non-attendance of several union members in the said assembly, pursuant to Sections 4 and 5, Article V of the
Constitution and By-Laws of the union, which read:
Seksyon 4. Ang mga kinukusang hindi pagdalo o hindi paglahok sa lahat ng hakbangin ng unyon ng sinumang kasapi o
pinuno ay maaaring maging sanhi ng pagtitiwalag o pagpapataw ng multa ng hindi hihigit sa P50.00 sa bawat araw na
nagkulang.
Seksyon 5. Ang sinumang dadalo na aalis ng hindi pa natatapos ang pulong ay ituturing na pagliban at maparusahan
itong alinsunod sa Article V, Seksyong 4 ng Saligang Batas na ito. Sino mang kasapi o pisyales na mahuli and dating sa
takdang oras ng di lalampas sa isang oras ay magmumulta ng P25.00 at babawasin sa sahod sa pamamagitan ng
salary deduction at higit sa isang oras ng pagdating ng huli ay ituturing na pagliban.3
On June 27, 1988, the local union wrote respondent company a letter requesting it to deduct the union fines from the
wages/salaries of those union members who failed to attend the general membership meeting. A portion of the said
letter stated:
xxx xxx xxx
In connection with Section 4 Article II of our existing Collective Bargaining Agreement, please deduct the amount of
P50.00 from each of the union members named in said annexes on the payroll of July 2-8, 1988 as fine for their failure to
attend said general membership meeting.4
In a Memorandum dated July 3, 1988, the Secretary General of the national federation, Godofredo Paceño, Jr.
disapproved the resolution of the local union imposing the P50.00 fine. The union officers protested such action by the
Federation in a Reply dated July 4, 1988.
On July 11, 1988, the Federation wrote respondent company a letter advising the latter not to deduct the fifty-peso fine
from the salaries of the union members requesting that:
. . . any and all future representations by MSMG affecting a number of members be first cleared from the federation
before corresponding action by the Company.5
211
The following day, respondent company sent a reply to petitioner union's request in a letter, stating that it cannot deduct
fines from the employees' salary without going against certain laws. The company suggested that the union refer the
matter to the proper government office for resolution in order to avoid placing the company in the middle of the issue.
The imposition of P50.00 fine became the subject of bitter disagreement between the Federation and the local union
culminating in the latter's declaration of general autonomy from the former through Resolution No. 10 passed by the
local executive board and ratified by the general membership on July 16, 1988.
In retaliation, the national federation asked respondent company to stop the remittance of the local union's share in the
education funds effective August 1988. This was objected to by the local union which demanded that the education
fund be remitted to it in full.
The company was thus constrained to file a Complaint for Interpleader with a Petition for Declaratory Relief with the
Med-Arbitration Branch of the Department of Labor and Employment, docketed as Case No. OD-M-8-435-88. This was
resolved on October 28, 1988, by Med-Arbiter Anastacio Bactin in an Order, disposing thus:
WHEREFORE, premises considered, it is hereby ordered:
1. That the United Lumber and General Workers of the Philippines (ULGWP) through its local union officers shall administer
the collective bargaining agreement (CBA).
2. That petitioner company shall remit the P10,000.00 monthly labor education program fund to the ULGWP subject to
the condition that it shall use the said amount for its intended purpose.
3. That the Treasurer of the MSMG shall be authorized to collect from the 356 union members the amount of P50.00 as
penalty for their failure to attend the general membership assembly on April 17, 1988.
However, if the MSMG Officers could present the individual written authorizations of the 356 union members, then the
company is obliged to deduct from the salaries of the 356 union members the P50.00 fine.6
On appeal, Director Pura-Ferrer Calleja issued a Resolution dated February 7, 1989, which modified in part the earlier
disposition, to wit:
WHEREFORE, premises considered, the appealed portion is hereby modified to the extent that the company should remit
the amount of five thousand pesos (P5,000.00) of the P10,000.00 monthly labor education program fund to ULGWP and
the other P5,000.00 to MSMG, both unions to use the same for its intended purpose.7
Meanwhile, on September 2, 1988, several local unions (Top Form, M. Greenfield, Grosby, Triumph International, General
Milling, and Vander Hons chapters) filed a Petition for Audit and Examination of the federation and education funds of
ULGWP which was granted by Med-Arbiter Rasidali Abdullah on December 25, 1988 in an Order which directed the
audit and examination of the books of account of ULGWP.
On September 30, 1988, the officials of ULGWP called a Special National Executive Board Meeting at Nasipit, Agusan del
Norte where a Resolution was passed placing the MSMG under trusteeship and appointing respondent Cesar Clarete as
administrator.
On October 27, 1988, the said administrator wrote the respondent company informing the latter of its designation of a
certain Alfredo Kalingking as local union president and "disauthorizing" the incumbent union officers from representing
the employees. This action by the national federation was protested by the petitioners in a letter to respondent
company dated November 11, 1988.
On November 13, 1988, the petitioner union officers received identical letters from the administrator requiring them to
explain within 72 hours why they should not be removed from their office and expelled from union membership.
On November 26, 1988, petitioners replied:
(a) Questioning the validity of the alleged National Executive Board Resolution placing their union under trusteeship;
(b) Justifying the action of their union in declaring a general autonomy from ULGWP due to the latter's inability to give
proper educational, organizational and legal services to its affiliates and the pendency of the audit of the federation
funds;
(c) Advising that their union did not commit any act of disloyalty as it has remained an affiliate of ULGWP;
212
(d) Giving ULGWP a period of five (5) days to cease and desist from further committing acts of coercion, intimidation
and harassment.8
However, as early as November 21, 1988, the officers were expelled from the ULGWP. The termination letter read:
Effective today, November 21, 1988, you are hereby expelled from UNITED LUMBER AND GENERAL WORKERS OF THE
PHILIPPINES (ULGWP) for committing acts of disloyalty and/or acts inimical to the interest and violative to the Constitution
and by-laws of your federation.
You failed and/or refused to offer an explanation inspite of the time granted to you.
Since you are no longer a member of good standing, ULGWP is constrained to recommend for your termination from
your employment, and provided in Article II Section 4, known as UNION SECURITY, in the Collective Bargaining
agreement.9
On the same day, the federation advised respondent company of the expulsion of the 30 union officers and demanded
their separation from employment pursuant to the Union Security Clause in their collective bargaining agreement. This
demand was reiterated twice, through letters dated February 21 and March 4, 1989, respectively, to respondent
company.
Thereafter, the Federation filed a Notice of Strike with the National Conciliation and Mediation Board to compel the
company to effect the immediate termination of the expelled union officers.
On March 7, 1989, under the pressure of a threatened strike, respondent company terminated the 30 union officers from
employment, serving them identical copies of the termination letter reproduced below:
We received a demand letter dated 21 November 1988 from the United Lumber and General Workers of the Philippines
(ULGWP) demanding for your dismissal from employment pursuant to the provisions of Article II, Section 4 of the existing
Collective Bargaining Agreement (CBA). In the said demand letter, ULGWP informed us that as of November 21, 1988,
you were expelled from the said federation "for committing acts of disloyalty and/or acts inimical to the interest of
ULGWP and violative to its Constitution and By-laws particularly Article V, Section 6, 9, and 12, Article XIII, Section 8.
In subsequent letters dated 21 February and 4 March 1989, the ULGWP reiterated its demand for your dismissal, pointing
out that notwithstanding your expulsion from the federation, you have continued in your employment with the company
in violation of Sec. 1 and 4 of Article II of our CBA, and of existing provisions of law.
In view thereof, we are left with no alternative but to comply with the provisions of the Union Security Clause of our CBA.
Accordingly, we hereby serve notice upon you that we are dismissing you from your employment with M. Greenfield,
Inc., pursuant to Sections 1 and 4, Article II of the CBA effective immediately.10
On that same day, the expelled union officers assigned in the first shift were physically or bodily brought out of the
company premises by the company's security guards. Likewise, those assigned to the second shift were not allowed to
report for work. This provoked some of the members of the local union to demonstrate their protest for the dismissal of the
said union officers. Some union members left their work posts and walked out of the company premises.
On the other hand, the Federation, having achieved its objective, withdrew the Notice of Strike filed with the NCMB.
On March 8, 1989, the petitioners filed a Notice of Strike with the NCMB, DOLE, Manila, docketed as Case No. NCMB-
NCR-NS-03-216-89, alleging the following grounds for the strike:
(a) Discrimination
(b) Interference in union activities
(c) Mass dismissal of union officers and shop stewards
(d) Threats, coercion and intimidation
(e) Union busting
The following day, March 9, 1989, a strike vote referendum was conducted and out of 2, 103 union members who cast
their votes, 2,086 members voted to declare a strike.
On March 10, 1989, the thirty (30) dismissed union officers filed an urgent petition, docketed as Case No. NCMB-NCR-NS-
03-216-89, with the Office of the Secretary of the Department of Labor and Employment praying for the suspension of the
213
effects of their termination from employment. However, the petition was dismissed by then Secretary Franklin Drilon on
April 11, 1989, the pertinent portion of which stated as follows:
At this point in time, it is clear that the dispute at M. Greenfield is purely an intra-union matter. No mass lay-off is evident
as the terminations have been limited to those allegedly leading the secessionist group leaving MSMG-ULGWP to form a
union under the KMU. . . .
xxx xxx xxx
WHEREFORE, finding no sufficient jurisdiction to warrant the exercise of our extraordinary authority under Article 277 (b) of
the Labor Code, as amended, the instant Petition is hereby DISMISSED for lack of merit.
SO ORDERED.11
On March 13 and 14, 1989, a total of 78 union shop stewards were placed under preventive suspension by respondent
company. This prompted the union members to again stage a walk-out and resulted in the official declaration of strike
at around 3:30 in the afternoon of March 14, 1989. The strike was attended with violence, force and intimidation on both
sides resulting to physical injuries to several employees, both striking and non-striking, and damage to company
properties.
The employees who participated in the strike and allegedly figured in the violent incident were placed under preventive
suspension by respondent company. The company also sent return-to-work notices to the home addresses of the striking
employees thrice successively, on March 27, April 8 and April 31, 1989, respectively. However, respondent company
admitted that only 261 employees were eventually accepted back to work. Those who did not respond to the return-to-
work notice were sent termination letters dated May 17, 1989, reproduced below:
M. Greenfield Inc., (B)
Km. 14, Merville Rd., Parañaque, M.M.
May 17, 1989
xxx xxx xxx
On March 14, 1989, without justifiable cause and without due notice, you left your work assignment at the prejudice of
the Company's operations. On March 27, April 11, and April 21, 1989, we sent you notices to report to the Company.
Inspite of your receipt of said notices, we have not heard from you up to this date.
Accordingly, for your failure to report, it is construed that you have effectively abandoned your employment and the
Company is, therefore, constrained to dismiss you for said cause.
Very truly yours,
M. GREENFIELD, INC., (B)
By:
WENZEL STEPHEN LIGOT
Asst. HRD Manager12
On August 7, 1989, the petitioners filed a verified complaint with the Arbitration Branch, National Capital Region, DOLE,
Manila, docketed as Case No. NCR-00-09-04199-89, charging private respondents of unfair labor practice which consists
of union busting, illegal dismissal, illegal suspension, interference in union activities, discrimination, threats, intimidation,
coercion, violence, and oppression.
After the filing of the complaint, the lease contracts on the respondent company's office and factory at Merville
Subdivision, Parañaque expired and were not renewed. Upon demand of the owners of the premises, the company was
compelled to vacate its office and factory.
Thereafter, the company transferred its administration and account/client servicing department at AFP-RSBS Industrial
Park in Taguig, Metro Manila. For failure to find a suitable place in Metro Manila for relocation of its factory and
manufacturing operations, the company was constrained to move the said departments to Tacloban, Leyte. Hence, on
April 16, 1990, respondent company accordingly notified its employees of a temporary shutdown in operations.
Employees who were interested in relocating to Tacloban were advised to enlist on or before April 23, 1990.
214
The complaint for unfair labor practice was assigned to Labor Arbiter Manuel Asuncion but was thereafter reassigned to
Labor Arbiter Cresencio Ramos when respondents moved to inhibit him from acting on the case.
On December 15, 1992, finding the termination to be valid in compliance with the union security clause of the collective
bargaining agreement, Labor Arbiter Cresencio Ramos dismissed the complaint.
Petitioners then appealed to the NLRC. During its pendency, Commissioner Romeo Putong retired from the service,
leaving only two commissioners, Commissioner Vicente Veloso III and Hon. Chairman Bartolome Carale in the First
Division. When Commissioner Veloso inhibited himself from the case, Commissioner Joaquin Tanodra of the Third Division
was temporarily designated to sit in the First Division for the proper disposition of the case.
The First Division affirmed the Labor Arbiter's disposition. With the denial of their motion for reconsideration on January 28,
1994, petitioners elevated the case to this Court, attributing grave abuse of discretion to public respondent NLRC in:
I. UPHOLDING THE DISMISSAL OF THE UNION OFFICERS BY RESPONDENT COMPANY AS VALID;
II. HOLDING THAT THE STRIKE STAGED BY THE PETITIONERS AS ILLEGAL;
III. HOLDING THAT THE PETITIONER EMPLOYEES WERE DEEMED TO HAVE ABANDONED THEIR WORK AND HENCE, VALIDLY
DISMISSED BY RESPONDENT COMPANY; AND
IV. NOT FINDING RESPONDENT COMPANY AND RESPONDENT FEDERATION OFFICERS GUILTY OF ACTS OF UNFAIR LABOR
PRACTICE.
Notwithstanding the several issues raised by the petitioners and respondents in the voluminous pleadings presented
before the NLRC and this Court, they revolve around and proceed from the issue of whether or not respondent
company was justified in dismissing petitioner employees merely upon the labor federation's demand for the
enforcement of the union security clause embodied in their collective bargaining agreement.
Before delving into the main issue, the procedural flaw pointed out by the petitioners should first be resolved.
Petitioners contend that the decision rendered by the First Division of the NLRC is not valid because Commissioner
Tanodra, who is from the Third Division, did not have any lawful authority to sit, much less write theponencia, on a case
pending before the First Division. It is claimed that a commissioner from one division of the NLRC cannot be assigned or
temporarily designated to another division because each division is assigned a particular territorial jurisdiction. Thus, the
decision rendered did not have any legal effect at all for being irregularly issued.
Petitioners' argument is misplaced. Article 213 of the Labor Code in enumerating the powers of the Chairman of the
National Labor Relations Commission provides that:
The concurrence of two (2) Commissioners of a division shall be necessary for the pronouncement of a judgment or
resolution. Whenever the required membership in a division is not complete and the concurrence of two (2)
commissioners to arrive at a judgment or resolution cannot be obtained, the Chairman shall designate such number of
additional Commissioners from the other divisions as may be necessary.
It must be remembered that during the pendency of the case in the First Division of the NLRC, one of the three
commissioners, Commissioner Romeo Putong, retired, leaving Chairman Bartolome Carale and Commissioner Vicente
Veloso III. Subsequently, Commissioner Veloso inhibited himself from the case because the counsel for the petitioners was
his former classmate in law school. The First Division was thus left with only one commissioner. Since the law requires the
concurrence of two commissioners to arrive at a judgment or resolution, the Commission was constrained to temporarily
designate a commissioner from another division to complete the First Division. There is nothing irregular at all in such a
temporary designation for the law empowers the Chairman to make temporary assignments whenever the required
concurrence is not met. The law does not say that a commissioner from the first division cannot be temporarily assigned
to the second or third division to fill the gap or vice versa. The territorial divisions do not confer exclusive jurisdiction to
each division and are merely designed for administrative efficiency.
Going into the merits of the case, the court finds that the Complaint for unfair labor practice filed by the petitioners
against respondent company which charges union busting, illegal dismissal, illegal suspension, interference in union
activities, discrimination, threats, intimidation, coercion, violence, and oppression actually proceeds from one main issue
which is the termination of several employees by respondent company upon the demand of the labor federation
pursuant to the union security clause embodied in their collective bargaining agreement.
Petitioners contend that their dismissal from work was effected in an arbitrary, hasty, capricious and illegal manner
because it was undertaken by the respondent company without any prior administrative investigation; that, had
respondent company conducted prior independent investigation it would have found that their expulsion from the
215
union was unlawful similarly for lack of prior administrative investigation; that the federation cannot recommend the
dismissal of the union officers because it was not a principal party to the collective bargaining agreement between the
company and the union; that public respondents acted with grave abuse of discretion when they declared petitioners'
dismissals as valid and the union strike as illegal and in not declaring that respondents were guilty of unfair labor practice.
Private respondents, on the other hand, maintain that the thirty dismissed employees who were former officers of the
federation have no cause of action against the company, the termination of their employment having been made
upon the demand of the federation pursuant to the union security clause of the CBA; the expelled officers of the local
union were accorded due process of law prior to their expulsion from their federation; that the strike conducted by the
petitioners was illegal for noncompliance with the requirements; that the employees who participated in the illegal strike
and in the commission of violence thereof were validly terminated from work; that petitioners were deemed to have
abandoned their employment when they did not respond to the three return to work notices sent to them; that
petitioner labor union has no legal personality to file and prosecute the case for and on behalf of the individual
employees as the right to do so is personal to the latter; and that, the officers of respondent company cannot be liable
because as mere corporate officers, they acted within the scope of their authority.
Public respondent, through the Labor Arbiter, ruled that the dismissed union officers were validly and legally terminated
because the dismissal was effected in compliance with the union security clause of the CBA which is the law between
the parties. And this was affirmed by the Commission on appeal. Moreover, the Labor Arbiter declared that
notwithstanding the lack of a prior administrative investigation by respondent company, under the union security clause
provision in the CBA, the company cannot look into the legality or illegality of the recommendation to dismiss by the
union nd the obligation to dismiss is ministerial on the part of the company.13
This ruling of the NLRC is erroneous. Although this Court has ruled that union security clauses embodied in the collective
bargaining agreement may be validly enforced and that dismissals pursuant thereto may likewise be valid, this does not
erode the fundamental requirement of due process. The reason behind the enforcement of union security clauses which
is the sanctity and inviolability of contracts14 cannot override one's right to due process.
In the case of Cariño vs. National Labor Relations Commission,15 this Court pronounced that while the company, under
a maintenance of membership provision of the collective bargaining agreement, is bound to dismiss any employee
expelled by the union for disloyalty upon its written request, this undertaking should not be done hastily and summarily.
The company acts in bad faith in dismissing a worker without giving him the benefit of a hearing.
The power to dismiss is a normal prerogative of the employer. However, this is not without limitation. The employer is
bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of
a labor union pursuant to the Collective Bargaining Agreement, . . . Dismissals must not be arbitrary and capricious. Due
process must be observed in dismissing an employee because it affects not only his position but also his means of
livelihood. Employers should respect and protect the rights of their employees, which include the right to labor.
In the case under scrutiny, petitioner union officers were expelled by the federation for allegedly committing acts of
disloyalty and/or inimical to the interest of ULGWP and in violation of its Constitution and By-laws. Upon demand of the
federation, the company terminated the petitioners without conducting a separate and independent investigation.
Respondent company did not inquire into the cause of the expulsion and whether or not the federation had sufficient
grounds to effect the same. Relying merely upon the federation's allegations, respondent company terminated
petitioners from employment when a separate inquiry could have revealed if the federation had acted arbitrarily and
capriciously in expelling the union officers. Respondent company's allegation that petitioners were accorded due
process is belied by the termination letters received by the petitioners which state that the dismissal shall be immediately
effective.
As held in the aforecited case of Cariño, "the right of an employee to be informed of the charges against him and to
reasonable opportunity to present his side in a controversy with either the company or his own union is not wiped away
by a union security clause or a union shop clause in a collective bargaining agreement. An employee is entitled to be
protected not only from a company which disregards his rights but also from his own union the leadership of which could
yield to the temptation of swift and arbitrary expulsion from membership and mere dismissal from his job.
While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union
security clause of the collective bargaining agreement upon the recommendation by the union, this dismissal should not
be done hastily and summarily thereby eroding the employees' right to due process, self-organization and security of
tenure. The enforcement of union security clauses is authorized by law provided such enforcement is not characterized
by arbitrariness, and always with due process.16 Even on the assumption that the federation had valid grounds to expel
the union officers, due process requires that these union officers be accorded a separate hearing by respondent
company.
216
In its decision, public respondent also declared that if complainants (herein petitioners) have any recourse in law, their
right of action is against the federation and not against the company or its officers, relying on the findings of the Labor
Secretary that the issue of expulsion of petitioner union officers by the federation is a purely intra-union matter.
Again, such a contention is untenable. While it is true that the issue of expulsion of the local union officers is originally
between the local union and the federation, hence, intra-union in character, the issue was later on converted into a
termination dispute when the company dismissed the petitioners from work without the benefit of a separate notice and
hearing. As a matter of fact, the records reveal that the termination was effective on the same day that the termination
notice was served on the petitioners.
In the case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc.17, the Court held the company liable for the
payment of backwages for having acted in bad faith in effecting the dismissal of the employees.
. . . Bad faith on the part of the respondent company may be gleaned from the fact that the petitioner workers were
dismissed hastily and summarily. At best, it was guilty of a tortious act, for which it must assume solidary liability, since it
apparently chose to summarily dismiss the workers at the union's instance secure in the union's contractual undertaking
that the union would hold it "free from any liability" arising from such dismissal.
Thus, notwithstanding the fact that the dismissal was at the instance of the federation and that it undertook to hold the
company free from any liability resulting from such a dismissal, the company may still be held liable if it was remiss in its
duty to accord the would-be dismissed employees their right to be heard on the matter.
Anent petitioners contention that the federation was not a principal party to the collective bargaining agreement
between the company and the union, suffice it to say that the matter was already ruled upon in the Interpleader case
filed by respondent company. Med-Arbiter Anastacio Bactin thus ruled:
After a careful examination of the facts and evidences presented by the parties, this Officer hereby renders its decision
as follows:
1.) It appears on record that in Collective Bargaining Agreement (CBA) which took effect on July 1, 1986, the
contracting parties are M. Greenfield, Inc. (B) and Malayang Samahan ng Mga Manggagawa sa M. Greenfield, Inc. (B)
(MSMG)/United Lumber and General Workers of the Philippines (ULGWP). However, MSMG was not yet registered labor
organization at the time of the signing of the CBA. Hence, the union referred to in the CBA is the ULGWP.18
Likewise on appeal, Director Pura Ferrer-Calleja put the issue to rest as follows:
It is undisputed that ULGWP is the certified sole and exclusive collective bargaining agent of all the regular rank-and-file
workers of the company, M. Greenfield, Inc. (pages 31-32 of the records).
It has been established also that the company and ULGWP signed a 3-year collective bargaining agreement effective
July 1, 1986 up to June 30, 1989.19
Although the issue of whether or not the federation had reasonable grounds to expel the petitioner union officers is
properly within the original and exclusive jurisdiction of the Bureau of Labor Relations, being an intra-union conflict, this
Court deems it justifiable that such issue be nonetheless ruled upon, as the Labor Arbiter did, for to remand the same to
the Bureau of Labor Relations would be to intolerably delay the case.
The Labor Arbiter found that petitioner union officers were justifiably expelled from the federation for committing acts of
disloyalty when it "undertook to disaffiliate from the federation by charging ULGWP with failure to provide any legal,
educational or organizational support to the local. . . . and declared autonomy, wherein they prohibit the federation
from interfering in any internal and external affairs of the local union."20
It is well-settled that findings of facts of the NLRC are entitled to great respect and are generally binding on this Court,
but it is equally well-settled that the Court will not uphold erroneous conclusions of the NLRC as when the Court finds
insufficient or insubstantial evidence on record to support those factual findings. The same holds true when it is perceived
that far too much is concluded, inferred or deduced from the bare or incomplete facts appearing of record.21
In its decision, the Labor Arbiter declared that the act of disaffiliation and declaration of autonomy by the local union
was part of its "plan to take over the respondent federation." This is purely conjecture and speculation on the part of
public respondent, totally unsupported by the evidence.
A local union has the right to disaffiliate from its mother union or declare its autonomy. A local union, being a separate
and voluntary association, is free to serve the interests of all its members including the freedom to disaffiliate or declare
its autonomy from the federation to which it belongs when circumstances warrant, in accordance with the constitutional
guarantee of freedom of association.22
217
The purpose of affiliation by a local union with a mother union or a federation.
. . . is to increase by collective action the bargaining power in respect of the terms and conditions of labor. Yet the locals
remained the basic units of association, free to serve their own and the common interest of all, subject to the restraints
imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare
upon the terms laid down in the agreement which brought it into existence.23
Thus, a local union which has affiliated itself with a federation is free to sever such affiliation anytime and such
disaffiliation cannot be considered disloyalty. In the absence of specific provisions in the federation's constitution
prohibiting disaffiliation or the declaration of autonomy of a local union, a local may dissociate with its parent union.24
The evidence on hand does not show that there is such a provision in ULGWP's constitution. Respondents' reliance upon
Article V, Section 6, of the federation's constitution is not right because said section, in fact, bolsters the petitioner union's
claim of its right to declare autonomy:
Sec. 6. The autonomy of a local union affiliated with ULGWP shall be respected insofar as it pertains to its internal affairs,
except as provided elsewhere in this Constitution.
There is no disloyalty to speak of, neither is there any violation of the federation's constitution because there is nothing in
the said constitution which specifically prohibits disaffiliation or declaration of autonomy. Hence, there cannot be any
valid dismissal because Article II, Section 4 of the union security clause in the CBA limits the dismissal to only three (3)
grounds, to wit: failure to maintain membership in the union (1) for non-payment of union dues, (2) for resignation; and
(3) for violation of the union's Constitution and By-Laws.
To support the finding of disloyalty, the Labor Arbiter gave weight to the fact that on February 26, 1989, the petitioners
declared as vacant all the responsible positions of ULGWP, filled these vacancies through an election and filed a petition
for the registration of UWP as a national federation. It should be pointed out, however, that these occurred after the
federation had already expelled the union officers. The expulsion was effective November 21, 1988. Therefore, the act of
establishing a different federation, entirely separate from the federation which expelled them, is but a normal retaliatory
reaction to their expulsion.
With regard to the issue of the legality or illegality of the strike, the Labor Arbiter held that the strike was illegal for the
following reasons: (1) it was based on an intra-union dispute which cannot properly be the subject of a strike, the right to
strike being limited to cases of bargaining deadlocks and unfair labor practice (2) it was made in violation of the "no
strike, no lock-out" clause in the CBA, and (3) it was attended with violence, force and intimidation upon the persons of
the company officials, other employees reporting for work and third persons having legitimate business with the
company, resulting to serious physical injuries to several employees and damage to company property.
On the submission that the strike was illegal for being grounded on a non-strikeable issue, that is, the intra-union conflict
between the federation and the local union, it bears reiterating that when respondent company dismissed the union
officers, the issue was transformed into a termination dispute and brought respondent company into the picture.
Petitioners believed in good faith that in dismissing them upon request by the federation, respondent company was
guilty of unfair labor practice in that it violated the petitioner's right to self-organization. The strike was staged to protest
respondent company's act of dismissing the union officers. Even if the allegations of unfair labor practice are
subsequently found out to be untrue, the presumption of legality of the strike prevails.25
Another reason why the Labor Arbiter declared the strike illegal is due to the existence of a no strike no lockout provision
in the CBA. Again, such a ruling is erroneous. A no strike, no lock out provision can only be invoked when the strike is
economic in nature, i.e. to force wage or other concessions from the employer which he is not required by law to
grant.26 Such a provision cannot be used to assail the legality of a strike which is grounded on unfair labor practice, as
was the honest belief of herein petitioners. Again, whether or not there was indeed unfair labor practice does not affect
the strike.
On the allegation of violence committed in the course of the strike, it must be remembered that the Labor Arbiter and
the Commission found that "the parties are agreed that there were violent incidents . . . resulting to injuries to both sides,
the union and management."27 The evidence on record show that the violence cannot be attributed to the striking
employees alone for the company itself employed hired men to pacify the strikers. With violence committed on both
sides, the management and the employees, such violence cannot be a ground for declaring the strike as illegal.
With respect to the dismissal of individual petitioners, the Labor Arbiter declared that their refusal to heed respondent's
recall to work notice is a clear indication that they were no longer interested in continuing their employment and is
deemed abandonment. It is admitted that three return to work notices were sent by respondent company to the striking
employees on March 27, April 11, and April 21, 1989 and that 261 employees who responded to the notice were
admitted back to work.
218
However, jurisprudence holds that for abandonment of work to exist, it is essential (1) that the employee must have failed
to report for work or must have been absent without valid or justifiable reason; and (2) that there must have been a clear
intention to sever the employer-employee relationship manifested by some overt acts.28Deliberate and unjustified
refusal on the part of the employee to go back to his work post amd resume his employment must be established.
Absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to
work anymore.29 And the burden of proof to show that there was unjustified refusal to go back to work rests on the
employer.
In the present case, respondents failed to prove that there was a clear intention on the part of the striking employees to
sever their employer-employee relationship. Although admittedly the company sent three return to work notices to them,
it has not been substantially proven that these notices were actually sent and received by the employees. As a matter of
fact, some employees deny that they ever received such notices. Others alleged that they were refused entry to the
company premises by the security guards and were advised to secure a clearance from ULGWP and to sign a waiver.
Some employees who responded to the notice were allegedly told to wait for further notice from respondent company
as there was lack of work.
Furthermore, this Court has ruled that an employee who took steps to protest his lay-off cannot be said to have
abandoned his work.30 The filing of a complaint for illegal dismissal is inconsistent with the allegation of abandonment. In
the case under consideration, the petitioners did, in fact, file a complaint when they were refused reinstatement by
respondent company.
Anent public respondent's finding that there was no unfair labor practice on the part of respondent company and
federation officers, the Court sustains the same. As earlier discussed, union security clauses in collective bargaining
agreements, if freely and voluntarily entered into, are valid and binding. Corollary, dismissals pursuant to union security
clauses are valid and legal subject only to the requirement of due process, that is, notice and hearing prior to dismissal.
Thus, the dismissal of an employee by the company pursuant to a labor union's demand in accordance with a union
security agreement does not constitute unfair labor practice.31
However, the dismissal was invalidated in this case because of respondent company's failure to accord petitioners with
due process, that is, notice and hearing prior to their termination. Also, said dismissal was invalidated because the reason
relied upon by respondent Federation was not valid. Nonetheless, the dismissal still does not constitute unfair labor
practice.
Lastly, the Court is of the opinion, and so holds, that respondent company officials cannot be held personally liable for
damages on account of the employees' dismissal because the employer corporation has a personality separate and
distinct from its officers who merely acted as its agents.
It has come to the attention of this Court that the 30-day prior notice requirement for the dismissal of employees has
been repeatedly violated and the sanction imposed for such violation enunciated in Wenphil Corporation vs.NLRC32
has become an ineffective deterrent. Thus, the Court recently promulgated a decision to reinforce and make more
effective the requirement of notice and hearing, a procedure that must be observed before termination of employment
can be legally effected.
In Ruben Serrano vs. NLRC and Isetann Department Store (G.R. No. 117040, January 27, 2000), the Court ruled that an
employee who is dismissed, whether or not for just or authorized cause but without prior notice of his termination, is
entitled to full backwages from the time he was terminated until the decision in his case becomes final, when the
dismissal was for cause; and in case the dismissal was without just or valid cause, the backwages shall be computed
from the time of his dismissal until his actual reinstatement. In the case at bar, where the requirement of notice and
hearing was not complied with, the aforecited doctrine laid down in the Serrano case applies.
WHEREFORE, the Petition is GRANTED; the decision of the National Labor Relations Commission in Case No. NCR-00-09-
04199-89 is REVERSED and SET ASIDE; and the respondent company is hereby ordered to immediately reinstate the
petitioners to their respective positions. Should reinstatement be not feasible, respondent company shall pay separation
pay of one month salary for every year of service. Since petitioners were terminated without the requisite written notice
at least 30 days prior to their termination, following the recent ruling in the case of Ruben Serrano vs. National Labor
Relations Commission and Isetann Department Store, the respondent company is hereby ordered to pay full backwages
to petitioner-employees while the Federation is also ordered to pay full backwages to petitioner-union officers who were
dismissed upon its instigation. Since the dismissal of petitioners was without cause, backwages shall be computed from
the time the herein petitioner employees and union officers were dismissed until their actual reinstatement. Should
reinstatement be not feasible, their backwages shall be computed from the time petitioners were terminated until the
finality of this decision. Costs against the respondent company.
SO ORDERED.
219

PICOP Petition Challenges Ruling on Managerial Employee Status

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PICOP Petition Challenges Ruling on Managerial Employee Status

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1

[G. R. No.101738. April 12, 2000]

DE LEON, JR., J.: Miso

The facts of the case are the following:

Hence, this petition.

PICOP anchors its petition on two (2) grounds, to wit: Maniks

THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF LABOR AND

TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA BREWERY,

G.R. No. 162025

CARPIO MORALES, J.,

VILLARAMA, JR., JJ.

ASIA BREWERY, INC.,

VILLARAMA, JR., J.:

The facts are:

6. Confidential and Executive Secretaries

7. Personnel, Accounting and Marketing Staff

10. Security and Fire Brigade Personnel

11. Monthly Employees

12. Purchasing and Quality Control Staff[6] [EMPHASIS SUPPLIED.]

On appeal, the CA reversed the Voluntary Arbitrator, ruling that:

The petition is anchored on the following grounds:

Mr. Melito K. Tan

Mr. Melito K. Tan

Mr. Melito K. Tan

Mr. Melito K. Tan

8. Elmido, Ma. Rebecca S.

10. Mane, Edna A.

Mr. William Tan

Mr. Julius Palmares

Mr. Julius Palmares

Mr. Julius Palmares

Mr. Julius Palmares

1. Mapola, Ma. Esraliza T.

Mr. Ernesto Ang

Mr. Ernesto Ang

Mr. Faustino Tetonche

Mr. Faustino Tetonche

Mr. Faustino Tetonche

Mr. Faustino Tetonche

Mr. Tsoi Wah Tung

2. Cervantes, Ma. Sherley Y.

Mr. Tsoi Wah Tung

3. Diongco, Ma. Teresa M.

Mr. Tsoi Wah Tung

Mr. Tsoi Wah Tung

Mr. Tsoi Wah Tung

Mr. Tsoi Wah Tung

1. Magbag, Ma. Corazon C.

Mr. Manuel Yu Liat

Ms. Regina Mirasol

Mr. Clemente Wong

Mr. Jorge Villarosa

Mr. Roger Giron

Mr. Venancio Alconaba

1. Alvarez, Ma. Luningning L.

Ms. Susan Bella

Mr. Chen Tsai Tyan

Mr. Noel Fernandez

4. Castillo, Ma. Riza R.

Mr. Tsai Chen Chih

Mr. Robert Bautista

G.R. No. 78755 July 19, 1989

GOLDEN FARMS, INC., petitioner,