Labor Review Digests 1

1/15 NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED INDUSTRIES- MANILA PAVILION HOTEL CHAPTER vs. SECRETARY OF LABOR AND EMPLOYMENT, BUREAU OF LABOR RELATIONS, HOLIDAY INN MANILA PAVILION HOTEL LABOR UNION AND ACESITE PHILIPPINES HOTEL CORPORATION FACTS: A certification election was conducted on June 16, 2006 among the rank-and-file employees of respondent Holiday Inn Manila Pavilion Hotel (the Hotel) with the following results: EMPLOYEES IN VOTERS LIST = 353 TOTAL VOTES CAST = 346 NUWHRAIN-MPHC = 151 HIMPHLU = 169 NO UNION = 1 SPOILED = 3 SEGREGATED = 22 In view of the significant number of segregated votes, contending unions, petitioner, NUHWHRAIN-MPHC, and respondent Holiday Inn Manila Pavillion Hotel Labor Union (HIMPHLU), referred the case back to Med-Arbiter to decide which among those votes would be opened and tallied. 11 votes were initially segregated because they were cast by dismissed employees, albeit the legality of their dismissal was still pending before the Court of Appeals. Six other votes were segregated because the employees who cast them were already occupying supervisory positions at the time of the election. Still five other votes were segregated on the ground that they were cast by probationary employees and, pursuant to the existing Collective Bargaining Agreement (CBA), such employees cannot vote. It bears noting early on, however, that the vote of one Jose Gatbonton (Gatbonton), a probationary employee, was counted. Med-Arbiter Calabocal ruled for the opening of 17 out of the 22 segregated votes, specially those cast by the 11 dismissed employees and those cast by the six supposedly supervisory employees of the Hotel. Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment (SOLE), arguing that the votes of the probationary employees should have been opened considering that probationary employee Gatbontons vote was tallied. And petitioner averred that respondent HIMPHLU, which garnered 169 votes, should not be immediately certified as the bargaining agent, as the opening of the 17 segregated ballots would push the number of valid votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 votes which HIMPHLU garnered would be one vote short of the majority which would then become 169. Secretary affirmed the decision of the med-arbiter. In fine, the SOLE concluded that the certification of HIMPHLU as the exclusive bargaining agent was proper. ISSUES: (1) Whether employees on probationary status at the time of the certification elections should be allowed to vote. (2) Whether HIMPHLU was able to obtain the required majority for it to be certified as the exclusive bargaining agent. HELD: 1. On the first issue, the Court rules in the affirmative.

The inclusion of Gatbontons vote was proper not because it was not questioned but because probationary employees have the right to vote in a certification election. The votes of the six other probationary employees should thus also have been counted. As Airtime Specialists, Inc. v. Ferrer-Calleja holds: In a certification election, all rank and file employees in the appropriate bargaining unit, whether probationary or permanent are entitled to vote. This principle is clearly stated in Art. 255 of the Labor Code which states that the labor organization designated or selected by the majority of the employees in an appropriate bargaining unit shall be the exclusive representative of the employees in such unit for purposes of collective bargaining. Collective bargaining covers all aspects of the employment relation and the resultant CBA negotiated by the certified union binds all employees in the bargaining unit. Hence, all rank and file employees, probationary or permanent, have a substantial interest in the selection of the bargaining representative. The Code makes no distinction as to their employment status as basis for eligibility in supporting the petition for certification election. The law refers to all the employees in the bargaining unit. All they need to be eligible to support the petition is to belong to the bargaining unit. (Emphasis supplied) For purposes of this section (Rule II, Sec. 2 of Department Order No. 40-03, series of 2003), any employee, whether employed for a definite period or not, shall beginning on the first day of his/her service, be eligible for membership in any labor organization. All other workers, including ambulant, intermittent and other workers, the self-employed, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection and other legitimate purposes except collective bargaining. (Emphasis supplied) The provision in the CBA disqualifying probationary employees from voting cannot override the Constitutionally-protected right of workers to self-organization, as well as the provisions of the Labor Code and its Implementing Rules on certification elections and jurisprudence thereon. A law is read into, and forms part of, a contract. Provisions in a contract are valid only if they are not contrary to law, morals, good customs, public order or public policy. 2. As to whether HIMPHLU should be certified as the exclusive bargaining agent, the Court rules in the negative. It is well-settled that under the so-called double majority rule, for there to be a valid certification election, majority of the bargaining unit must have voted AND the winning union must have garnered majority of the valid votes cast. Prescinding from the Courts ruling that all the probationary employees votes should be deemed valid votes while that of the supervisory employees should be excluded, it follows that the number of valid votes cast would increase from 321 to 337. Under Art. 256 of the Labor Code, the union obtaining the majority of the valid votes cast by the eligible voters shall be certified as the sole and exclusive bargaining agent of all the workers in the appropriate bargaining unit. This majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170. HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not able to obtain a majority vote. The position of both the SOLE and the appellate court that the opening of the 17 segregated ballots will not materially affect the outcome of the certification election as for, so they contend, even if such member were all in favor of

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petitioner, still, HIMPHLU would win, is thus untenable. It bears reiteration that the true importance of ascertaining the number of valid votes cast is for it to serve as basis for computing the required majority, and not just to determine which union won the elections. The opening of the segregated but valid votes has thus become material. To be sure, the conduct of a certification election has a twofold objective: to determine the appropriate bargaining unit and to ascertain the majority representation of the bargaining representative, if the employees desire to be represented at all by anyone. It is not simply the determination of who between two or more contending unions won, but whether it effectively ascertains the will of the members of the bargaining unit as to whether they want to be represented and which union they want to represent them. Having declared that no choice in the certification election conducted obtained the required majority, it follows that a runoff election must be held to determine which between HIMPHLU and petitioner should represent the rank-and-file employees. PETITION GRANTED. (estella)

San Miguel Corporation Employees Union Phil. Transport & General Workers Organization (SMCEUPTGWO) v. San Miguel Packaging Products Employees Union Pambansang Diwa ng Manggagawang Pilipino (SMPPEU-PDMP) GR 171153, 12 Sept 2007 Chico-Nazario, J. Short Version: SMCEU-PTGWO challenges the legitimacy of SMPPEU-PDMP, a charter of PDMP, as a labor organization. The Court held that PDMP cannot create a charter because it is merely a trade union center. Trade union centers are not given by the Labor Code or any statute the power to create locals or charters therefore, SMPPEU-PDMP must comply with the strict requirements provided for in Art. 234, LC. Nature: Review on Certiorari under Rule 45 of the Revised Rules of Court, assailing CA decision affirming the decision of the petitioner Bureau of Labor Relations (BLR) of DOLE which upheld the Certificate of Registration of respondent SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION PAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEUPDMP); and its resolution denying petitioners MR Characters in the case -Petitioner(s): SMCEU-PTGWO is the incumbent bargaining agent for the bargaining unit comprised of the regular monthlypaid rank and file employees of the three divisions of San Miguel Corporation (SMC), namely, the San Miguel Corporate Staff Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San Miguel Packaging Products (SMPP), in all offices and plants of SMC, including the Metal Closure and Lithography Plant in Laguna. It had been the certified bargaining agent for 20 years (1987 to 1997). -Respondent(s): SMPPEU-PDMP is registered as a chapter PDMP. Facts

2/15

PDMP issued a charter certificate to respondent on 15 June 1999. In compliance with registration requirements, respondent submitted the requisite documents to the BLR for the purpose of acquiring legal personality. Upon submission of its charter certificate and other documents, respondent was issued Certificate of Creation of Local or Chapter by the BLR on 6 July 1999. Respondent filed with the Med-Arbiter of the DOLE Regional Officer in NCR (DOLE-NCR), three separate petitions for certification election to represent SMPP, SMCSU, and SMBP. All three petitions were dismissed, on the ground that the separate petitions fragmented a single bargaining unit. 17 August 1999: petitioner filed with the DOLE-NCR a petition seeking the cancellation of respondent's registration and its dropping from the rolls of legitimate labor organizations, accusing respondent of committing fraud and falsification, and noncompliance with registration requirements in obtaining its certificate of registration.

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It alleged that respondent violated Articles 239 (a), (b) and (c) and 234 (c) of the Labor Code. Moreover, petitioner claimed that PDMP is not a legitimate labor organization, but a trade union center, hence, it cannot directly create a local or chapter. 14 July 2000: DOLE-NCR Regional Director Maximo B. Lim issued an Order dismissing the allegations. He further ruled that respondent is allowed to directly create a local or chapter. However, he found that respondent did not comply with the 20% membership requirement and, thus, ordered the cancellation of its certificate of registration and removal from the rolls of legitimate labor organizations. Respondent appealed to the BLR who granted the petition. The BLR ruled that as a chartered local union, respondent is not required to submit the number of employees and names of all its members comprising at least 20% of the employees in the bargaining unit where it seeks to operate. Thus, the revocation of its registration based on non-compliance with the 20% membership requirement does not have any basis in the rules. The BLR also held that although PDMP is considered as a trade union center, it is a holder of a Registration Certificate issued by the BLR on 14 February 1991, which bestowed upon it the status of a legitimate labor organization with all the rights and privileges to act as representative of its members for purposes of collective bargaining agreement. On this basis, PDMP can charter or create a local, in accordance with the provisions of Department Order No. 9. BLR denied petitioners appeal. CA affirmed BLR decision holding that Department Order No. 9 provides that a registered federation or national union may directly create a local by submitting to the BLR copies of the charter certificate, the local's constitution and by-laws, the principal office address of the local, and the names of its officers and their addresses. Upon complying with the documentary requirements, the local shall be issued a certificate and included in the roster of legitimate labor organizations. Thus there is no need for SMPPEU to show a membership of 20% of the employees of the bargaining unit in order to be recognized as a legitimate labor union. o

Issue: WON respondent is a legitimate labor organization even if it failed to comply with the 20% requirement as provided in Art. 234, LC. NO. Dispositive: Petition GRANTED. CA REVERSED AND SET ASIDE. Ruling A legitimate labor organization is defined as "any labor organization duly registered with the DOLE, and includes any branch or local thereof." Why does the Labor Code demand strict compliance with the requirements on registration? o Registration requirements are intended to afford a measure of protection to

unsuspecting employees who may be lured into joining unscrupulous or fly-by-night unions whose sole purpose is to control union funds or use the labor organization for illegitimate ends. o A legitimate labor organization is entitled to specific rights under the Labor Code, 21 and are involved in activities directly affecting matters of public interest. Legitimate labor organizations have exclusive rights under the law which cannot be exercised by nonlegitimate unions, one of which is the right to be certified as the exclusive representative of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining. o 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. Records show that respondent was chartered by PDMP. Article 234, LC provides that an independent labor organization acquires legitimacy only upon its registration with the BLR. However, the creation of a branch, local or chapter is treated differently. o In Progressive Development Corporation v. Secretary, Department of Labor and Employment, the Court declared that when an unregistered union becomes a branch, local or chapter, some of the aforementioned requirements for registration are no longer necessary or compulsory. Whereas an applicant for registration of an independent union is mandated to submit, among other things, the number of employees and names of all its members comprising at least 20% of the employees in the bargaining unit where it seeks to operate, as provided under Article 234 and Sec. 2, Rule III, Book V of the Implementing Rules, the same is no longer required of a branch, local or chapter. The intent of the law in imposing less requirements in the case of a branch or local of a registered federation or national union is to encourage the affiliation of a local union with a federation or national union in order to increase the local union's bargaining powers respecting terms and conditions of labor. Petitioners argue that PDMP is not a legitimate labor organization, thus cannot form a charter. The Court held that the personality of a labor organization cannot be attacked collaterally. It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules.

Heres the twist: PDMP is a trade union center, THEREFORE IT CANNOT CREATE LOCALS OR CHARTERS. Trade union center was never mentioned in the

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Labor Code. It first appeared only in the Implementing Rules of Department Order No. 9 which defined a trade union center as any group of registered national unions or federations organized for the mutual aid and protection of its members; for assisting such members in collective bargaining; or for participating in the formulation of social and employment policies, standards, and programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of the Implementing Rules. While a "national union" or "federation" is a labor organization with at least ten locals or chapters or affiliates, each of which must be a duly certified or recognized collective bargaining agent, a trade union center, on the other hand, is composed of a group of registered national unions or federations. o The Implementing Rules, as amended by Department Order No. 9, provide that only "a duly registered federation or national union" may directly create a local or chapter. DO 9 defines a "chartered local" as a labor organization in the private sector operating at the enterprise level that acquired legal personality through a charter certificate, issued by a duly registered federation or national union and reported to the Regional Office in accordance with Rule III, Section 2-E of these Rules (Sec. 1 (i), Rule 1, Book V of the Implementing Rules, as amended by DO No. 9) RA 9481 or "An Act Strengthening the Workers' Constitutional Right to Self-Organization, Amending for the Purpose Presidential Decree No. 442, As Amended, Otherwise Known as the Labor Code of the Philippines" lapsed into law on 25 May 2007 and became effective on 14 June 2007. This law further amends the Labor Code provisions on Labor Relations, including trade union centers in Art. 234. However, it still makes no mention that such organizations can create a local or a charter. [Expressio unius est exclusio alterius, the expression of one thing is the exclusion of another. Expressium facit cessare tacitum. What is expressed puts an end to what is implied. Casus omissus pro omisso habendus est. A person, object or thing omitted must have been omitted intentionally. ] o Therefore, since under the pertinent status and applicable implementing rules, the power granted to labor organizations to directly create a chapter or local through chartering is given to a federation or national union, then a trade union center is without authority to charter directly. o WHY? To prevent circumvention of labor union requirements. As a legitimate labor organization is entitled to specific rights under the Labor Code and involved in activities directly affecting public interest, it is necessary that the law afford utmost protection to the parties affected. (lori)

3/15 G.R. No. 177024 October 30, 2009 THE HERITAGE HOTEL MANILA (OWNED AND OPERATED BY GRAND PLAZA HOTEL CORPORATION) Petitioner, vs. PINAG-ISANG GALING AT LAKAS NG MGA MANGGAGAWA SA HERITAGE MANILA (PIGLASHERITAGE), Respondent. ABAD, J.: This case is about a companys objections to the registration of its rank and file union for non-compliance with the requirements of its registration. FACTS: Sometime in 2000, certain rank and file employees of petitioner Heritage Hotel Manila (petitioner company) formed the "Heritage Hotel Employees Union" (the HHE union). The Department of Labor and Employment-National Capital Region (DOLE-NCR) later issued a certificate of registration to this union. Subsequently, the HHE union filed a petition for certification election that petitioner company opposed. The company alleged that the HHE union misrepresented itself to be an independent union, when it was, in truth, a local chapter of the National Union of Workers in Hotel and Restaurant and Allied Industries (NUWHRAIN). The company claimed that the HHE union intentionally omitted disclosure of its affiliation with NUWHRAIN because the companys supervisors union was already affiliated with it. Thus, the company also filed a petition for the cancellation of the HHE unions registration certificate. Med-Arbiter granted the HHE unions petition for certification election. Petitioner company appealed the decision to the Secretary of Labor but the latter denied the appeal and petitioners motion for reconsideration. On October 12, 2001 the Court of Appeals issued a writ of injunction against the holding of the HHE unions certification election, effective until the petition for cancellation of that unions registration shall have been resolved with finality. The decision of the Court of Appeals became final when the HHE union withdrew the petition for review that it filed with SC. On December 10, 2003 certain rank and file employees of petitioner company formed another union, the respondent Pinag-Isang Galing at Lakas ng mga Manggagawa sa Heritage Manila (the PIGLAS union). This union applied for registration with the DOLE-NCR and got its registration certificate on February 9, 2004. Two months later, the members of the first

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union, the HHE union, adopted a resolution for its dissolution. The HHE union then filed a petition for cancellation of its union registration. On September 4, 2004 respondent PIGLAS union filed a petition for certification election that petitioner company also opposed, alleging that the new unions officers and members were also those who comprised the old union. According to the company, the employees involved formed the PIGLAS union to circumvent the Court of Appeals injunction against the holding of the certification election sought by the former union. Despite the companys opposition, however, the Med-Arbiter granted the petition for certification election. On December 6, 2004 petitioner company filed a petition to cancel the union registration of respondent PIGLAS union. According to the company, the union violated the policy against dual unionism and showed that the new union was merely an alter ego of the old. ISSUE: Whether or not previous membership with HHE (alleged "dual unionism") is a ground for cancelling a unions registration. HELD: No. The fact that some of respondent PIGLAS unions members were also members of the old rank and file union, the HHE union, is not a ground for cancelling the new unions registration. The right of any person to join an organization also includes the right to leave that organization and join another one. Besides, HHE union is dead. It had ceased to exist and its certificate of registration had already been cancelled. Thus, petitioners arguments on this point may also be now regarded as moot and academic. (bonna) 4/15 EAGLE RIDGE GOLF & COUNTRY CLUB vs. COURT OF APPEALS and EAGLE RIDGE EMPLOYEES UNION (EREU) FACTS: Petitioner Eagle Ridge is a corporation engaged in the business of maintaining golf courses. It had, at the end of CY 2005, around 112 rank-and-file employees. The instant case is an off-shot of the desire of a number of these employees to organize themselves as a legitimate labor union and their employers opposition to their aspiration. Petitioner had 112 rank-and-file employees. On 06 December 2005, at least 20%1 organized themselves into an independent labor union. After being issued a registration certificate, it filed a petition for certification election (CE). Petitioner opposed it, followed by the filing of a petition for cancellation of the registration certificate. It claimed that EREU declared in its application for registration that it had 30 members when the minutes of its organizational meeting only showed 26. However, only 25 signed the certification that ratified the constitution and by-laws while 26 signed the document, thereby making one signature a forgery. Also, petitioner contended that 5 employees wanted to withdraw from the union, executing affidavits2 claiming that (1) the meeting was a drinking spree, (2) they didnt know the documents they signed were for the organization of a union, and (3) they wish to withdraw from it. This withdrawal reduces the membership to 20 to 21 (below minimum). Eagle Ridges petition ascribed misrepresentation, false statement, or fraud to EREU in connection with the adoption of its constitution and by-laws, the numerical composition of the Union, and the election of its officers. Conversely, the union presented duly accomplished membership forms of 4 additional members dated 08 December 2005.3 ISSUE: Whether or not EREU misrepresented, gave false statements and committed fraud in the adoption of its constitution and bylaws, the numerical composition of the union and the election of officers for the application for registration. RULING: NO. It had 30 members when it applied for registration on 19 December 2005. It has sufficiently explained that the discrepancy4 was due to the 4 additional members. Admission of new members is neither prohibited by law nor was it

1 20% of 112 is 22.4 2 Dated 15 February 2006. 3 NOTE: It also presented two sama-samang sinumpaang salaysay and the union
legal counsels sworn statement attesting to the orderly and properly proceedings of the organizational meeting. 4 between those who attended the meeting and the total members

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concealed in its application. Art 234(b) required submission of the minutes and list of participants while par (c) merely required the list of all members. Any seeming infirmity in the application and admission of membership, especially in independent unions, must be viewed in favor of valid membership.5 The 26-25 difference is merely a typographical error and an insignificant mistake. The affidavits of retraction of 6 6 were not presented in the hearing and are, therefore, hearsay while those affidavits presented by the union were duly re-affirmed in the hearing by the affiants. The employees withdrawal from a labor union made before filing of the petition for CE is presumed voluntary, while withdrawal after is considered involuntary. Hence, withdrawal from a union after filing the Petition for CE does not affect it. The retraction did not retroact to the time of the application for registration or even to the organizational meeting. Prior to their withdrawal, they were bona fide union members. They also never disputed affixing their signatures. Well settled is that where the company seeks the cancellation of a unions registration during the pendency of a petition for certification election, the same grounds invoked to cancel should not be used to bar the certification election. This is because a CE is the most appropriate procedure for the desired goal of ascertaining which of the competing organizations should represent the employees for the purpose of collective bargaining. (berna)

5/15 G.R. No. 169717

March 16, 2011

SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS JERRY VICTORIO-Union President vs. CHARTER CHEMICAL and COATING CORPORATION Facts: Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation Arbitration Unit of the DOLE, National Capital Region. On April 14, 1999, respondent company opposed on the ground that petitioner union is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by law, and (2) the inclusion of supervisory employees within petitioner union.5 The Med-Arbiter ruled that petitioner union is not a legitimate labor organization because the Charter Certificate were not executed under oath and certified by the union secretary and attested to by the union president as required by Section 235 of the Labor Code7 in relation to Section 1, Rule VI of Department Order (D.O.) No. 9, series of 1997. The union registration was, thus, fatally defective. The Med-Arbiter further held that the list of membership of petitioner union consisted of 12 batchman, mill operator and leadman who performed supervisory functions. As a result, not being a legitimate labor organization, petitioner union has no right to file a petition for certification election for the purpose of collective bargaining. Petitioner union argues that the lack of verification of its charter certificate and the alleged illegal composition of its membership are not grounds for the dismissal of a petition for certification election under Section 11, Rule XI of D.O. No. 9, series of 1997, as amended, nor are they grounds for the cancellation of a unions registration under Section 3, Rule VIII of said issuance. It contends that what is required to be certified under oath by the local unions secretary or treasurer and attested to by the local unions president are limited to the unions constitution and by-laws, statement of the set of officers, and the books of accounts. Petitioner further assets that the legal personality of petitioner union cannot be collaterally attacked but may be questioned only in an independent petition for cancellation pursuant to Section 5, Rule V, Book IV of the Rules to Implement the Labor Code Respondent contends that petitioner union is not a legitimate labor organization because its composition is a mixture of supervisory and rank-and-file employees in violation of Article 245 of the Labor Code. Respondent company maintains that

5 It was alleged by petitioner that the applications for membership did not comply with
(what petitioner called) sine qua non requirements in the constitution and by-laws. 6 Facts stated 5 but the ruling stated 6 members.

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the ruling in Toyota Motor Philippines vs. Toyota Motor Philippines Labor Union14 continues to be good case law. Thus, the illegal composition of petitioner union nullifies its legal personality to file the subject petition for certification election and its legal personality may be collaterally attacked in the proceedings for a petition for certification election as was done here. Issue: 1. 2. WON The charter certificate need to be certified under oath by the local unions secretary or treasurer and attested to by its president. WON The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a legitimate labor organization. .WON the legal personality of petitioner union cannot be collaterally attacked by respondent company in the certification election proceedings.

be submitted to the Regional Office or Bureau of Labor Relations in order to register a labor organization. As to the charter certificate, the above-quoted rule indicates that it should be executed under oath. Petitioner union concedes and the records confirm that its charter certificate was not executed under oath. However, in San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996), the Court ruled that it was not necessary for the charter certificate to be certified and attested by the local/chapter officers. Id. While this ruling was based on the interpretation of the previous Implementing Rules provisions which were supplanted by the 1997 amendments, we believe that the same doctrine obtains in this case. Considering that the charter certificate is prepared and issued by the national union and not the local/chapter, it does not make sense to have the local/chapters officers x x x certify or attest to a document which they had no hand in the preparation of.23 In accordance with this ruling, petitioner unions charter certificate need not be executed under oath. Consequently, it validly acquired the status of a legitimate labor organization upon submission of (1) its charter certificate,24 (2) the names of its officers, their addresses, and its principal office,25 and (3) its constitution and by-laws26 the last two requirements having been executed under oath by the proper union officials as borne out by the records. 2. The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a legitimate labor organization.

3.

Held: 1. The charter certificate need to be certified under oath by the local unions secretary or treasurer and attested to by its president.

The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of 1997, provides: Section 1. Chartering and creation of a local chapter A duly registered federation or national union may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following: (a) A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter; (b) The names of the local/chapters officers, their addresses, and the principal office of the local/chapter; and (c) The local/chapters constitution and by-laws provided that where the local/chapters constitution and by-laws [are] the same as [those] of the federation or national union, this fact shall be indicated accordingly. All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President. As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas are not among the documents that need to

The CA found that petitioner union has for its membership both rank-and-file and supervisory employees. However, petitioner union sought to represent the bargaining unit consisting of rank-and-file employees. Under Article 24527 of the Labor Code, supervisory employees are not eligible for membership in a labor organization of rank-and-file employees. Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union does not divest it of its status as a legitimate labor organization. In Kawashima, we explained at length how and why the Toyota doctrine no longer holds sway under the altered state of the law and rules applicable to this case, viz: R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition [on the co-mingling of supervisory and rank-and-file employees] would bring about on the legitimacy of a labor organization. It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) which supplied the deficiency by introducing the following amendment to Rule II (Registration of Unions): "Sec. 1. Who may join unions. - x x x Supervisory employees and security guards shall not be eligible for membership

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in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own; Provided, that those supervisory employees who are included in an existing rank-and-file bargaining unit, upon the effectivity of Republic Act No. 6715, shall remain in that unit x x x. (Emphasis supplied) and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz: "Sec. 1. Where to file. - A petition for certification election may be filed with the Regional Office which has jurisdiction over the principal office of the employer. The petition shall be in writing and under oath. Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested to bargain collectively, may file the petition. The petition, when filed by a legitimate labor organization, shall contain, among others: (c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require; and provided further, that the appropriate bargaining unit of the rank-and-file employees shall not include supervisory employees and/or security guards. (Emphasis supplied) By that provision, any questioned mingling will prevent an otherwise legitimate and duly registered labor organization from exercising its right to file a petition for certification election. Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the Court, citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held: "Clearly, based on this provision, 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 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. In the case at bar, as respondent union's membership list contains the names of at least twenty-seven (27) supervisory employees in Level Five positions, the union could not, prior to purging itself of its supervisory employee members, attain the status of a legitimate labor organization. Not being one, it cannot possess the requisite personality to file a petition for certification election."

In Dunlop, in which the labor organization that filed a petition for certification election was one for supervisory employees, but in which the membership included rank-and-file employees, the Court reiterated that such labor organization had no legal right to file a certification election to represent a bargaining unit composed of supervisors for as long as it counted rank-and-file employees among its members. It should be emphasized that the petitions for certification election involved in Toyota and Dunlop were filed on November 26, 1992 and September 15, 1995, respectively; hence, the 1989 Rules was applied in both cases. Specifically, the requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules that the petition for certification election indicate that the bargaining unit of rank-and-file employees has not been mingled with supervisory employees was removed. Instead, what the 1997 Amended Omnibus Rules requires is a plain description of the bargaining unit, thus: Rule XI Certification Elections Sec. 4. Forms and contents of petition. - The petition shall be in writing and under oath and shall contain, among others, the following: x x x (c) The description of the bargaining unit. In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of the 1997 Amended Omnibus Rules, although the specific provision involved therein was only Sec. 1, Rule VI, to wit: "Section. 1. Chartering and creation of a local/chapter.- A duly registered federation or national union may directly create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following: a) a charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter; (b) the names of the local/chapter's officers, their addresses, and the principal office of the local/chapter; and (c) the local/ chapter's constitution and by-laws; provided that where the local/chapter's constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated accordingly. All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested to by its President." which does not require that, for its creation and registration, a local or chapter submit a list of its members. Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees Union-PGTWO in which the core issue was whether mingling affects the legitimacy of a labor organization and its right to file a petition for certification election. This time, given the altered legal milieu, the Court abandoned the view in Toyota and Dunlop and reverted to its pronouncement in Lopez that while there is a prohibition

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against the mingling of supervisory and rank-and-file employees in one labor organization, the Labor Code does not provide for the effects thereof. Thus, the Court held that after a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code. In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-and-File UnionFFW, the Court explained that since the 1997 Amended Omnibus Rules does not require a local or chapter to provide a list of its members, it would be improper for the DOLE to deny recognition to said local or chapter on account of any question pertaining to its individual members. More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which involved a petition for cancellation of union registration filed by the employer in 1999 against a rankand-file labor organization on the ground of mixed membership: the Court therein reiterated its ruling in Tagaytay Highlands that 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 the Labor Code. All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines, had already set the tone for it. Toyota and Dunlop no longer hold sway in the present altered state of the law and the rules.32 [Underline supplied] The applicable law and rules in the instant case are the same as those in Kawashima because the present petition for certification election was filed in 1999 when D.O. No. 9, series of 1997, was still in effect. Hence, Kawashima applies with equal force here. As a result, petitioner union was not divested of its status as a legitimate labor organization even if some of its members were supervisory employees; it had the right to file the subject petition for certification election. 3. The legal personality of petitioner union cannot be collaterally attacked by respondent company in the certification election proceedings. Petitioner union correctly argues that its legal personality cannot be collaterally attacked in the certification election proceedings. As we explained in Kawashima: Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which organization will represent the employees in their collective

bargaining with the employer. The choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it; not even a mere allegation that some employees participating in a petition for certification election are actually managerial employees will lend an employer legal personality to block the certification election. The employer's only right in the proceeding is to be notified or informed thereof. (angel)

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Ruling: No. Whether YEU committed fraud and misrepresentation in failing to remove signatures of some employees from the list of employees who supported YEUs application for registration and whether YEU conducted an election of its officers are questions of fact. YTPI, being the one which filed the petition for the revocation of YEUs registration, had the burden of proving that YEU committed fraud and misrepresentation. The CA already ruled that YTPI failed to prove that YEU committed fraud and misrepresentation.

6/15 Yokohama Tire Phils. Vs. Yokohama Employees Union G.R. No. 163532, March 10, 2010 Facts: Yokohama Employees Union (YEU) is the labor organization of the rank-and-file employees of Yokohama Tire Philippines, Inc. (YTPI). YEU was registered as a legitimate labor labor union on 10 September 1999. YEU filed before the Regional Office a petition for certification election. YTPI filed a petition in the Regional Office for the revocation of YEUs registration alleging fraud and misrepresentation. YTPI alleged that YEU violated Article 239(a) of the Labor Code: (1) YEU fraudulently included the signature of a certain Ronald O. Pineda (Pineda) in the organizational documents; (2) Pineda was not aware of any election of union officers; (3) YEU fraudulently obtained the employees signatures by making them believe that they were signing a petition for a 125% increase in the minimum wage, not a petition for registration; (4) the employees did not belong to a single bargaining unit; and (5) YEU fraudulently stated in its organizational meeting minutes that its second vice president was Bernard David, not Bernardo David. YTPIs petition was granted and YEU appealed to the BLR, which reversed the decision. The BLR found that (1) Pineda did not approach any officer of YEU to have his signature removed from the organizational documents; (2) Pinedas affidavit that no election of officers took place was unreliable and inconsistent with his earlier written statement; (3) the affidavit of a certain Rachelle Gonzales (Gonzales) that no election of officers took place was unreliable and inconsistent with her earlier resignation letter; (4) the affidavit of a certain Arthur Calma (Calma) did not state that no election of officers took place; (5) at least 82 other members of YEU did not question the legality of YEUs organization; and (6) 50 YEU members executed a SamaSamang Pahayagwhich alleged that they have indeed attended a meeting for the purpose of organizing and ratifying their Union By Laws and that the employees did not question the legality of YEUs organization. The BLR also held that although the Sama-Samang Pahayag did not specifically mention that an election took place during the organizational meeting, it may be possible that the same was conducted and that any infirmity in the election of union officers may be remedied under the last paragraph of Article 241 of the Labor Code and under Rule XIV of DOLE Department Order No. 9. YTPI filed for a motion for reconsideration before the BLR, which was denied. Then a petition for certiorari under Rule 65 was filed in the CA, the same was denied, as well as the motion for reconsideration. Issue: Did YEU commit fraud and misrepresentation?

Factual findings of the CA and other lower tribunals are binding on the Court. A petition for review on certiorari under Rule 45 of the Rules of Court should include only questions of law questions of fact are not reviewable. A question of law exists when the doubt centers on what the law is on a certain set of facts, while a question of fact exists when the doubt centers on the truth or falsity of the alleged facts. There is a question of law if the issue raised is capable of being resolved without need of reviewing the probative value of the evidence. Once the issue invites a review of the evidence, the question is one of fact. The cancellation of union registration at the employers instance, while permitted, must be approached with caution and strict scrutiny in order that the right to belong to a legitimate labor organization and to enjoy the privileges appurtenant to such membership will not be denied to the employees. As the applicant for cancellation, the petitioner naturally had the burden to present proof sufficient to warrant the cancellation. The petitioner was thus expected to satisfactorily establish that YEU committed misrepresentations, false statements or fraud in connection with the election of its officers, or with the minutes of the election of officers, or in the list of votes, as expressly required in Art. 239, (c), Labor Code. But, as the respondent BLR Director has found and determined, and We fully agree with him, the petitioner simply failed to discharge its burden. The charge that a labor organization committed fraud and misrepresentation in securing its registration is a serious charge and deserves close scrutiny. It is serious because once such charge is proved, the labor union acquires none of the rights accorded to registered organizations. Consequently, charges of this nature should be clearly established by evidence and the surrounding circumstances. Petition denied. (estella)

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7/15 CATHAY PACIFIC STEEL CORPORATION, BENJAMIN CHUA JR., VIRGILIO AGERO, and LEONARDO VISORRO, JR. vs. HON. COURT OF APPEALS, CAPASCO UNION OF SUPERVISORY EMPLOYEES (CUSE) and ENRIQUE TAMONDONG III G.R. No. 164561. August 30, 2006. FACTS: Private respondent Tomondong was the Assistant to the Personnel Manager of Petitioner CAPASCO. He was promoted to the position of Personnel/Administrative Officer, and later to that of Personnel Superintendent. The supervisory personnel of CAPASCO launched a move to organize a union among their ranks, later known as private respondent CUSE. Tamondong actively involved himself in the formation of the union and was even elected as one of its officers after its creation. CAPASCO sent a memo to Tamondong requiring him to explain and to discontinue from his union activities, with a warning that a continuance thereof shall adversely affect his employment in the company. Tamondong ignored said warning and made a reply letter invoking his right as a supervisory employee to join and organize a labor union. Thereafter CAPASCO terminated the employment of Tamondong on the ground of loss of trust and confidence, citing his union activities as acts constituting serious disloyalty to the company. Tamondong challenged his dismissal for being illegal and as an act involving unfair labor practice Though he admitted his active role in the formation of a union composed of supervisory personnel in the company, he claimed that such was not a valid ground to terminate his employment because it was a legitimate exercise of his constitutionally guaranteed right to self-organization. CAPASCO contended that Tamondong's position as Personnel Superintendent and the functions actually performed by him in the company makes him a managerial employee, thus, under the law he was prohibited from joining a union as well as from being elected as one of its officers. The LA ruled in favor of Tamondong. On appeal, the NLRC modified the ruling by dismissing the complaints for ULP and Illegal dismissal and also the award for damages but ordered the payment of backwages to Tamondong. On petition, the CA granted the nullification of the decision of the NLRC. Hence, this present Petition for Certiorari. ISSUE: WON the CA committed grave abuse of discretion in finding petitioner guilty of illegal dismissal and ULP? RULING: No. Where the issue or question involves or affects the wisdom or legal soundness of the decision, and not the jurisdiction of the court to render said decision, the same is beyond the province of a petition for certiorari. In any event, granting arguendo, that the present petition is proper, still it is

dismissible. The Court of Appeals cannot be said to have acted with grave abuse of discretion amounting to lack or excess of jurisdiction in annulling the Decision of the NLRC because the findings of the Court of Appeals that private respondent Tamondong was indeed a supervisory employee and not a managerial employee, thus, eligible to join or participate in the union activities of private respondent CUSE, were supported by evidence on record. Tamondong may have possessed enormous powers and was performing important functions that goes with the position of Personnel Superintendent, nevertheless, there was no clear showing that he is at liberty, by using his own discretion and disposition, to lay down and execute major business and operational policies for and in behalf of CAPASCO. (lori)

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employees, are not allowed to form, join or assist a labor union for purposes of collective bargaining. In this case, S3 and S4 Supervisors and the so-called exempt employees are admittedly confidential employees and therefore, they are not allowed to form, join or assist a labor union for purposes of collective bargaining following the above court's ruling. Consequently, they are not allowed to participate in the certification election. ISSUES: 1. Whether Supervisory employees 3 and 4 and the exempt employees of the company are considered confidential employees, hence ineligible from joining a union. 2 Do the employees of the three plants constitute an appropriate single bargaining unit. HELD: 1. No. Confidential employees are 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 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. In determining the confidentiality of certain employees, a key question frequently considered is the employee's necessary access to confidential labor relations information. Herein listed are the functions of supervisors 3 and higher: a) b) San Miguel Corporation appealed, pointing out the MedArbiter's error in grouping together all three (3) separate plants into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature. Laguesma directed the conduct of separate certification elections among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants. San Miguel Corporation filed a Motion for Reconsideration with Motion to suspend proceedings. An Order was issued by Laguesma granting the Motion, citing the doctrine enunciated in Philips Industrial Development, Inc. v. NLRC case. Said Order reads in part: . . . Confidential employees, like managerial To undertake decisions to discontinue/temporarily stop shift operations when situations require. To effectively oversee the quality control function at the processing lines in the storage of chicken and other products. To administer efficient system of evaluation of products in the outlets. To be directly responsible for the recall, holding and rejection of direct manufacturing materials. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant.

8/15 G.R. No. 110399 August 15, 1997 SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE, President, petitioners, vs. HONORABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MED-ARBITER AND SAN MIGUEL CORPORATION, respondents. ROMERO, J.: This is a Petition for Certiorari with Prayer for the Issuance of Preliminary Injunction seeking to reverse and set aside the order of public respondent, Undersecretary of the Department of Labor and Employment, Bienvenido E. Laguesma, the order excluding the employees under supervisory levels 3 and 4 and the so-called exempt employees from the proposed bargaining unit and ruled out their participation in the certification election. FACTS: On October 5, 1990, petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis. On December 19, 1990, Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification election among the supervisors and exempt employees of Cabuyao, San Fernando and Otis as one bargaining unit.

c)

d)

e)

In the case at bar, supervisors 3 and above may not be considered confidential employees merely because they handle "confidential data" as such must first be strictly classified as pertaining to labor relations for them to fall under said restrictions. The information they handle are properly classifiable as technical and internal business operations data

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which, to our mind, has no relevance to negotiations and settlement of grievances wherein the interests of a union and the management are invariably adversarial. Since the employees are not classifiable under the confidential type, this Court rules that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they are confidential employees, jurisprudence has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union. 2. Yes. It is the contention of the petitioner union that the creation of three (3) separate bargaining units, one each for Cabuyao, Otis and San Fernando as ruled by the respondent Undersecretary, is contrary to the one-company, one-union policy. It adds that Supervisors level 1 to 4 and exempt employees of the three plants have a similarity or a community of interests. This Court finds the contention of the petitioner meritorious. An appropriate bargaining unit may be defined as "a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law." 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. It is readily seen that the employees in the instant case have "community or mutuality of interests," which is the standard in determining the proper constituency of a collective bargaining unit. It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities. (bonna)

9/15 STANDARD CHARTERED BANK EMPLOYEES UNION (SCBEU-NUBE) vs. STANDARD CHARTERED BANK and ANNEMARIE DURBIN, in her capacity as Chief Executive Officer, Philippines, Standard Chartered Bank G.R. No. 161933 April 22, 2008 Petitioner and the Standard Chartered Bank (Bank) began negotiating for a new Collective Bargaining Agreement (CBA) in May 2000 as their 1998-2000 CBA already expired. Due to a deadlock in the negotiations, petitioner filed a Notice of Strike prompting the Secretary of Labor and Employment to assume jurisdiction over the labor dispute. The CBA provisions in dispute are the exclusion of certain employees from the appropriate bargaining unit and the adjustment of remuneration for employees serving in an acting capacity for one month. In their proposal, petitioner sought the exclusion of only the following employees from the appropriate bargaining unit all managers who are vested with the right to hire and fire employees, confidential employees, those with access to labor relations materials, Chief Cashiers, Assistant Cashiers, personnel of the Telex Department and one Human Resources (HR) staff. In the previous 1998-2000 CBA,10 the excluded employees are as follows: A. All covenanted and assistant officers (now called National Officers) B. One confidential secretary of each of the: 1. Chief Executive, Philippine Branches 2. Deputy Chief Executive/Head, Corporate Banking Group 3. Head, Finance 4. Head, Human Resources 5. Manager, Cebu 6. Manager, Iloilo 7. Covenanted Officers provided said positions shall be filled by new recruits. C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo, and in any other branch that the BANK may establish in the country. D. Personnel of the Telex Department E. All Security Guards F. Probationary employees, without prejudice to Article 277 (c) of the Labor Code, as amended by R.A. 6715, casuals or emergency employees; and G. One (1) HR Staff ISSUE:

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Whether or not the Bank's Chief Cashiers and Assistant Cashiers, personnel of the Telex Department and HR staff are confidential employees, such that they should be excluded. Whether or not additional remuneration should be given to employees placed in an acting capacity for one month. HELD: NO. Petitioner insists that the foregoing employees are not confidential employees; however, it failed to buttress its claim. Aside from its generalized arguments and despite the Secretary's finding that there was no evidence to support it, petitioner still failed to substantiate its claim. Petitioner did not even bother to state the nature of the duties and functions of these employees, depriving the Court of any basis on which it may be concluded that they are indeed confidential employees. As aptly stated by the CA: While We agree that petitioner's proposed revision is in accordance with the law, this does not necessarily mean that the list of exclusions enumerated in the 1998-2000 CBA is contrary to law. As found by public respondent, petitioner failed to show that the employees sought to be removed from the list of exclusions are actually rank and file employees who are not managerial or confidential in status and should, accordingly, be included in the appropriate bargaining unit. Absent any proof that Chief Cashiers and Assistant Cashiers, personnel of the Telex department and one (1) HR Staff have mutuality of interest with the other rank and file employees, then they are rightfully excluded from the appropriate bargaining unit. x x x21(Emphasis supplied) Petitioner cannot simply rely on jurisprudence without explaining how and why it should apply to this case. Allegations must be supported by evidence. In this case, there is barely any at all. YES. There is likewise no reason for the Court to disturb the conclusion of the Secretary and the CA that the additional remuneration should be given to employees placed in an acting capacity for one month. The Secretary agreed with the Bank's position that a restrictive provision would curtail management's prerogative, and at the same time, recognized that employees should not be made to work in an acting capacity for long periods of time without adequate compensation. (berna) 10/15 G.R. No. 157117 November 20, 2006

COASTAL SUBIC BAY TERMINAL, INC., vs. 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, Facts: 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 rankand-file union and supervisory union were not legitimate labor organizations, and that the proposed bargaining units were not particularly described. 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. The Secretary 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. 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. Accordingly, the Secretary ordered the holding of separate certification election. Issue: 1. WON supervisory and the rank-and-file unions can file separate petitions for certification election? 2. WON ALU, a rank-and-file union and APSOTEU, a supervisory union one and the same because of the commonalities between them? Are they commingled? Held: 1. Section 5, Rule V, Book V of the Implementing Rules states: Section 5. Effect of registration The labor organization or workers association shall be deemed registered and vested

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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, CSBTISU is legitimate. 2. 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 CSBTIRFU 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 rankand-file union are affiliated with a single federation. In addition, the supervisors must have direct authority over the rank-andfile 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-andfile 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. 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. (angel)

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10. Security and Fire Brigade Personnel 11. Monthly Employees 12. Purchasing and Quality Control Staff 11/15 G.R. No. 162025 August 3, 2010 Subsequently, a dispute arose when ABIs management stopped deducting union dues from eighty-one (81) employees, believing that their membership in BLMAINDEPENDENT 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. 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. In his Decision, Voluntary Arbitrator sustained the BLMAINDEPENDENT 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. On appeal, the CA reversed the Voluntary Arbitrator, ruling 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. 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. Both motions were denied by the CA.

TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA BREWERY, Petitioner, vs. ASIA BREWERY, INC., Respondent. Facts: 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) 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 BLMAINDEPENDENT signed a renegotiated CBA effective from August 1, 2000 to 31 July 2003. Article I of the CBA defined the scope of the bargaining unit, as follows: 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

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Issues: 1. Whether or not the workers were confidential employees. 2. Whether or not the company committed unfair labor practice by restraining its employees in the exercise of their right to selforganization. Held; 1. No. Respondent failed to indicate who among the numerous employees have access to confidential data relating to management policies that could give rise to potential conflict of interest with their Union membership. 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. 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. 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. 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 dailypaid rank-and-file employees. 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 selforganization, as provided in Article 248 (a) of the Labor Code. 2. No. 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 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" 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 selforganization, nor have thereby demonstrated an anti-union stance. WHEREFORE, the petition is GRANTED. (estella)

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from the bargaining unit, as their access to confidential information may become the source of undue advantage. [29] However, such fact does not apply to the position of Payroll Master and the whole gamut of employees who, as perceived by petitioner, has access to salary and compensation data. The CA correctly held that the position of Payroll Master does not involve dealing with confidential labor relations information in the course of the performance of his functions. Since the nature of his work does not pertain to company rules and regulations and confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit. Corollarily, although Article 245[30] 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.[31] 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 companydenominated with the presence of managerial employees in the union membership.[32] Having access to confidential information, 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.[33] In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel Assistant belong to the category of confidential employees and, hence, are excluded from the bargaining unit, considering their respective positions and job descriptions. As Human Resource Assistant,[34] the scope of ones work necessarily involves labor relations, recruitment and selection of employees, access to employees' personal files and compensation package, and human resource management. As regards a Personnel Assistant,[35] one's work includes the recording of minutes for management during collective bargaining negotiations, assistance to management during grievance meetings and administrative investigations, and securing legal advice for labor issues from the petitioners team of lawyers, and implementation of company programs. Therefore, in the discharge of their functions, both gain access to vital labor relations information which outrightly disqualifies them from union membership. (lori)

12/15 San Miguel Foods v. SMC Supervisors & Exempt Union 1 Aug 2011 Facts: In a previous case, it was ruled that even if they handle confidential data regarding technical & internal business operations, supervisory employees 3 & 4 & the exempt employees of petitioner are not to be considered confidential employees, because the same do not pertain to labor relations, particularly, negotiation & settlement of grievances. Consequently, they were allowed to form an appropriate bargaining unit for the purpose of collective bargaining. On the date of the election, petitioner questioned the eligibility to vote by some of its employees on the grounds that some of the employees do not belong to the bargaining unit w/c respondent seeks to represent or that there exists no Ee-Er relationship w/ petitioner. It was argued that certain employees should not be allowed to vote as they are confidential employees. After elections, the Med-Arbiter declared respondent as the exclusive bargaining agent of the supervisors & the exempt employees of petitioner. The CA modified the Resolution & held that those holding the positions of Human Resource Assistant & Personnel Assistant are excluded from the bargaining unit. Issue: Whether the CA erred in not excluding the position of Payroll Master in the definition of confidential employee as to exclude said position & all other positions w/ access to salary & compensation data from the bargaining unit Held: No. A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or care and protection of the employers property.[28] Confidential employees, such as accounting personnel, should be excluded

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respondent cannot represent the supervisory employees for collective bargaining purposeless because the private respondent also represents the rank-and-file employees' union and it will tantamount to allowing the circumvention of the principle of the separation of unions. It further argues that the intent of the law is to prevent a single labor organization from representing different classes of employees with conflicting interests. The Med-Arbiter issued an order in favor of the union. The petitioners appealed.Leguesma issued a resolution affirming the Med-Arbiter's order. The petitioners, in turn, filed a motion for reconsideration but the same was denied. Hence, this petition for certiorari.

13/15 G.R. No. 96566 January 6, 1992 ATLAS LITHOGRAPHIC SERVICES, INC., petitioner, vs. UNDERSECRETARY BIENVENIDO E. LAGUESMA (Department of Labor and Employment) and ATLAS LITHOGRAPHIC SERVICES, INC. SUPERVISORY, ADMINISTRATIVE, PERSONNEL, PRODUCTION, ACCOUNTING AND CONFIDENTIAL EMPLOYEES ASSOCIATION-KAISAHAN NG MANGGAWANG PILIPINO (KAMPIL-KATIPUNAN), respondents. GUTIERREZ, JR., J.: This is a petition for certiorari under Rule 65 of the Rules of Court seeking the modification of the Order and the Resolution issued by the public respondents. FACTS: On July 16, 1990, the supervisory, administrative personnel, production, accounting and confidential employees of the petitioner Atlas Lithographic Services, Inc. (ALSI) affiliated with private respondent Kaisahan ng Manggagawang Pilipino, a national labor organization. The local union adopted the name Atlas Lithographic Services, Inc. Supervisory, Administrative, Personnel, Production, Accounting and Confidential Employees Association or ALSI-SAPPACEA-KAMPIL (supervisors union). Shortly thereafter, private respondent Kampil-Katipunan filed on behalf of the "supervisors" union a petition for certification election so that it could be the sole and exclusive bargaining agent of the supervisory employees. The petitioners opposed the private respondent's petition claiming that under Article 245 of the Labor bode the private

ISSUE: Whether or not, under Article 245 of the Labor Code, a local union of supervisory employees may be allowed to affiliate with a national federation of labor organizations of rank-and-file employees. HELD: No. A revision of the Labor Code undertaken by the bicameral Congress brought about the enactment of Rep. Act No. 6715 in March 1989 in which employees were reclassified into three groups, namely: (1) the managerial employees; (2) supervisors; and (3) the rank and file employees. Under the present law, the category of supervisory employees is once again recognized. Hence, Art. 212 (m) states: (m) . . . 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. . . . The rationale for the amendment is the government's recognition of the right of supervisors to organize with the qualification that they shall not join or assist in the organization of rank-and-file employees. The functions of supervisors, being recommendatory in nature, are more identified with the interests of the employer. The performance of those functions may, thus, run counter to the interests of the rank-and-file. This intent of the law is made clear in the deliberations of the legislators on then Senate Bill 530 now enacted as Rep. Act No. 6715. The definition of managerial employees was limited to those having authority to hire and fire while those who only

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recommend effectively the hiring or firing or transfers of personnel would be considered as closer to rank-and-file employees. The exclusion, therefore, of middle level executives from the category of managers brought about a third classification, the supervisory employees. These supervisory employees are allowed to form their own union but they are not allowed to join the rank-and-file union because of conflict of interest. Thus, if the intent of the law is to avoid a situation where supervisors would merge with the rank and-file or where the supervisors' labor organization would represent conflicting interests, then a local supervisors' union should not be allowed to affiliate with the national federation of union of rank-and-file employees where that federation actively participates in union activity in the company. (bonna)

certification election among the supervisory employees of herein respondent. It does not intend to include managerial employees. xxx xxx xxx 6. It is not true that supervisory employees are joining the rank-and-file employees' union. While it is true that both regular rankand-file employees and supervisory employees of herein respondent have affiliated with FFW, yet there are two separate unions organized by FFW. The supervisory employees have a separate charter certificate issued by FFW. On July 5, 1991, respondent Rolando S. de la Cruz, medarbiter of the Department of Labor and Employment Regional Office No. IV, issued an order granting respondent union's petition for certification election. He said; . . . [petitioner] . . . claims that based on the job descriptions which will be presented at the hearing, the covered employees who are considered managers occupy the positions of purchasing officers, personnel officers, property officers, cashiers, heads of various sections and the like. [Petitioner] also argues that assuming that some of the employees concerned are not managerial but mere supervisory employees, the Federation of Free Workers (FFW) cannot extend a charter certificate to this group of employees without violating the express provision of Article 245 which provides that "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" because the FFW had similarly issued a charter certificate to its rank-and-file employees. In its position paper, [petitioner] stated that most, if not all, of the employees listed in . . . the petition are considered managerial employees, thereby admitting that it has supervisory employees who are undoubtedly qualified to join or form a labor organization of their own. The record likewise shows that [petitioner] promised to present the job descriptions of the concerned employees during the hearing but failed to do so. ISSUE: Whether or not the rank-and-file employees of petitioner DLSUMCCM who compose a labor union are directly under the supervisory employees whose own union is affiliated with the same national federation (Federation of Free Workers) and whether such national federation is actively involved in union

14/15 DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE vs.HON. BIENVENIDO E. LAGUESMA, Undersecretary of Labor and Employment; ROLANDO S. DE LA CRUZ, Med-Arbiter Regional Office No. IV, DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE SUPERVISORY UNIONFEDERATION OF FREE WORKERS G.R. No. 102084 August 12, 1998

FACTS: Petitioner De La Salle University Medical Center and College of Medicine (DLSUMCCM) is a hospital and medical school at Dasmarias, Cavite. Private respondent Federation of Free Workers-De La Salle University Medical Center and College of Medicine Supervisory Union Chapter (FFW-DLSUMCCMSUC), on the other hand, is a labor organization composed of the supervisory employees of petitioner DLSUMCCM. On April 17, 1991, the Federation of Free Workers (FFW), a national federation of labor unions, issued a certificate to private respondent FFW-DLSUMCCMSUC recognizing it as a local chapter. On the same day, it filed on behalf of private respondent FFW-DLSUMCCMSUC a petition for certification election among the supervisory employees of petitioner DLSUMCCM. Its petition was opposed by petitioner DLSUMCCM on the grounds that several employees who signed the petition for certification election were managerial employees and that the FFW-DLSUMCCMSUC was composed of both supervisory and rank-and-file employees in the company. In its reply dated May 29, 1991, private respondent FFWDLSUMCCMSUC denied petitioner's allegations. It contended that 2. Herein petition seeks for the holding of a

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activities in the company so as to make the two unions in the same company, in reality, just one union. HELD: NO. Although private respondent FFW-DLSUMCCMSUC and another union composed of rank-and-file employees of petitioner DLSUMCCM are indeed affiliated with the same national federation, the FFW, petitioner DLSUMCCM has not presented any evidence showing that the rank-and-file employees composing the other union are directly under the authority of the supervisory employees. As held in Adamson & Adamson, Inc. v. CIR, 17 the fact that the two groups of workers are employed by the same company and the fact that they are affiliated with a common national federation are not sufficient to justify the conclusion that their organizations are actually just one. Their immediate professional relationship must be established. To borrow the language of Adamson & Adamson, Inc. v. CIR: 18 We find without merit the contention of petitioner that if affiliation will be allowed, only one union will in fact represent both supervisors and rank-and-file employees of the petitioner; that there would be an indirect affiliation of supervisors and rank-and-file employees with one labor organization; that there would be a merging of the two bargaining units; and that the respondent union will lose its independence because it becomes an alter ego of the federation. 19 Mention has already been made of the fact that the petition for certification election in this case was filed by the FFW on behalf of the local union. This circumstance, while showing active involvement by the FFW in union activities at the company, is by itself insufficient to justify a finding of violation of Art. 245 since there is no proof that the supervisors who compose the local union have direct authority over the rankand-file employees composing the other local union which is also affiliated with the FFW. This fact differentiates the case from Atlas Lithographic Services. Inc. v. Laguesma, 20 in which, in addition to the fact that the petition for certification election had been filed by the national federation, it was shown that the rank-and-file employees were directly under the supervisors organized by the same federation. (berna)

15/15 G.R. No. 142000 January 22, 2003 TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED, petitioner, vs. TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO, respondent. Facts: 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. THEU opposed the 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 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. However, 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

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legitimate organization. DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election among the rank-and-file employees of THIGCI. The Med-Arbiter held that the allegation that some of the union members are supervisory, resigned and AWOL employees or employees of a separate and distinct corporation 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, Med-Arbiter 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-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-Arbiters 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. 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 THEUs 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. Issue: WON unions legal personality can be subject to collateral attack after a certificate of registration is issued Held: 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 petitioners 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 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." 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. The grounds for cancellation of union registration are provided for under Article 239 of the Labor Code. 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 abovequoted 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 petitioners 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 Courts following ruling is instructive:

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"[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 quasijudicial 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. 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: designation should be reconciled with the actual job description of subject employees 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 employees 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. (angel)

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