THIRD DIVISION

[G.R. No. 131235. November 16, 1999]

UST FACULTY UNION (USTFU), GIL Y. GAMILLA, CORAZON QUI, NORMA CALAGUAS, IRMA POTENCIANO, LUZ DE GUZMAN, REMEDIOS GARCIA, RENE ARNEJO, EDITHA OCAMPO, CESAR REYES, CELSO NIERRA, GLICERIA BALDRES, MA. LOURDES MEDINA, HIDELITA GABO, MAFEL YSRAEL, LAURA ABARA, NATIVIDAD SANTOS, FERDINAND LIMOS, CARMELITA ESPINA, ZENAIDA FAMORCA, PHILIP AGUINALDO, BENEDICTA ALAVA and LEONCIO CASAL, petitioners vs. Dir. BENEDICTO ERNESTO R. BITONIO JR. of the Bureau of Labor Relations, Med-Arbiter TOMAS F. FALCONITIN of The National Capital Region, Department of Labor and Employment (DOLE), EDUARDO J. MARIO JR., MA. MELVYN ALAMIS, NORMA COLLANTES, URBANO ALABAGIA, RONALDO ASUNCION, ZENAIDA BURGOS, ANTHONY CURA, FULVIO M. GUERRERO, MYRNA HILARIO, TERESITA MEER, FERNANDO PEDROSA, NILDA REDOBLADO, RENE SISON, EVELYN TIROL and ROSIE ALCANTARA, respondents. DECISION PANGANIBAN, J.:

There is a right way to do the right thing at the right time for the right reasons,[1] and in the present case, in the right forum by the right parties. While grievances against union leaders constitute legitimate complaints deserving appropriate redress, action thereon should be made in the proper forum at the proper time and after observance of proper procedures. Similarly, the election of union officers should be conducted in accordance with the provisions of the unions constitution and bylaws, as well as the Philippine Constitution and the Labor Code. Specifically, while all legitimate faculty members of the University of Santo Tomas (UST) belonging to a collective bargaining unit may take part in a duly convened certification election, only bona fide members of the UST Faculty Union (USTFU) may participate and vote in a legally called election for union officers. Mob hysteria, however well-intentioned, is not a substitute for the rule of law.

The Case

The Petition for Certiorari before us assails the August 15, 1997 Resolution[2] of Director Benedicto Ernesto R. Bitonio Jr. of the Bureau of Labor Relations (BLR) in BLR Case No. A-8-49-97, which affirmed the February 11, 1997 Decision of Med-Arbiter Tomas F. Falconitin. The med-arbiters Decision disposed as follows: WHEREFORE, premises considered, judgment is hereby rendered declaring the election of USTFU officers conducted on October 4, 1996 and its election results as null and void ab initio.

Accordingly, respondents Gil Gamilla, et al are hereby ordered to cease and desist from acting and performing the duties and functions of the legitimate officers of [the] University of Santo Tomas Faculty Union (USTFU) pursuant to [the] unions constitution and by-laws (CBL). The Temporary Restraining Order (TRO ) issued by this Office on December 11, 1996 in connection with the instant petition, is hereby made and declared permanent.[3] Likewise challenged is the October 30, 1997 Resolution[4]of Director Bitonio, which denied petitioners Motion for Reconsideration.

the general assembly was called to elect USTFUs next set of officers. Through the notice, the members were also informed of the constitution of a Committee on Elections (COMELEC) to oversee the elections. (Annex B, petition) On 01 October 1996, some of herein appellants filed a separate petition with the Med-Arbiter, DOLE-NCR, directed against herein appellees and the members of the COMELEC. Docketed as Case No. NCR-OD-M-9610001, the petition alleged that the COMELEC was not constituted in accordance with USTFUs constitution and by-laws (CBL) and that no rules had been issued to govern the conduct of the 05 October 1996 election. On 02 October 1996, the secretary general of UST, upon the request of the various UST faculty club presidents (See paragraph VI, Respondents Comment and Motion to Dismiss), issued notices allowing all faculty members to hold a convocation on 04 October 1996 (See Annex C Petition; Annexes 4 to 10, Appeal). Denominated as [a] general faculty assembly, the convocation was supposed to discuss the state of the unratified UST-USTFU CBA and status and election of USTFU officers (Annex 11, Appeal) On 04 October 1996, the med-arbiter in Case No. NCROD-M-9610-001 issued a temporary restraining order against herein appellees enjoining them from conducting the election scheduled on 05 October 1996. Also on 04 October 1996, and as earlier announced by the UST secretary general, the general faculty assembly was held as scheduled. The general assembly was attended by members of the USTFU and, as admitted by

The Facts

The factual antecedents of the case are summarized in the assailed Resolution as follows: Petitioners-appellees [herein Private Respondents] Marino, et. al. (appellees) are duly elected officers of the UST Faculty Union (USTFU). The union has a subsisting five-year Collective Bargaining Agreement with its employer, the University of Santo Tomas (UST). The CBA was registered with the Industrial Relations Division, DOLE-NCR, on 20 February 1995. It is set to expire on 31 May 1998. On 21 September 1996, appellee Collantes, in her capacity as Secretary General of USTFU, posted a notice addressed to all USTFU members announcing a general assembly to be held on 05 October 1996. Among others,

the appellants, also by 'non-USTFU members [who] are members in good standing of the UST Academic Community Collective Bargaining Unit' (See paragraph XI, Respondents Comment and Motion to Dismiss). On this occasion, appellants were elected as USTFUs new set of officers by acclamation and clapping of hands (See paragraphs 40 to 50, Annex '12', Appeal). The election of the appellants came about upon a motion of one Atty. Lopez, admittedly not a member of USTFU, that the USTFU CBL and 'the rules of the election be suspended and that the election be held [on] that day' (See --paragraph 39, Idem.) On 11 October 1996, appellees filed the instant petition seeking injunctive reliefs and the nullification of the results of the 04 October 1996 election. Appellees alleged that the holding of the same violated the temporary restraining order issued in Case No. NCROD-M-9610-001. Accusing appellants of usurpation, appellees characterized the election as spurious for being violative of USTFUs CBL, specifically because the general assembly resulting in the election of appellants was not called by the Board of Officers of the USTFU; there was no compliance with the ten-day notice rule required by Section 1, Article VIII of the CBL; the supposed elections were conducted without a COMELEC being constituted by the Board of Officers in accordance with Section 1, Article IX of the CBL; the elections were not by secret balloting as required by Section 1, Article V and Section 6, Article IX of the CBL, and, the general assembly was convened by faculty members some of whom were not members of USTFU, so much so that non-USTFU members were allowed to vote in violation of Section 1, Article V of the CBL.

On 24 October 1996, appellees filed another urgent exparte motion for a temporary restraining order, this time alleging that appellants had served the former a notice to vacate the union office. For their part, appellants moved to dismiss the original petition and the subsequent motion on jurisdictional grounds. Both the petition and the motion were captioned to be for Prohibition, Injunction with Prayer for Preliminary Injunction and Temporary Restraining Order. According to the appellants, the med-arbiter has no jurisdiction over petitions for prohibition, 'including the ancillary remedies of restraining order and/or preliminary injunction, which are merely incidental to the main petition for PROHIBITION' (Paragraph XVIII3, Respondents Comment and Motion to Dismiss). Appellants also averred that they now constituted the new set of union officers having been elected in accordance with law after the term of office of appellees had expired. They further maintained that appellees scheduling of the 5 October 1996 elections was illegal because no rules and regulations governing the elections were promulgated as required by USTFUs CBL and that one of the members of the COMELEC was not a registered member of USTFU. Appellants likewise noted that the elections called by the appellees should have been postponed to allow the promulgation of rules and regulations and to 'insure a free, clean, honest and orderly elections and to afford at the same time the greater majority of the general membership to participate' (See paragraph V, Idem). Finally, appellants contended that the holding of the general faculty assembly on 04 October 1996 was under the control of the Council of College/Faculty Club Presidents in cooperation with the USTFU Reformist Alliance and that they received the Temporary Restraining Order issued in

Case No. NCR-OD-M-9610-001 only on 07 October 1996 and were not aware of the same on 04 October 1996. On 03 December 1996, appellants and UST allegedly entered into another CBA covering the period from 01 June 1996 to 31 May 2001 (Annex 11, appellants Rejoinder to the Reply and Opposition). Consequently, appellees again moved for the issuance of a temporary restraining order to prevent appellants from making further representations that [they] had entered into a new agreement with UST. Appellees also reiterated their earlier stand that appellants were usurping the formers duties and functions and should be stopped from continuing such acts. On 11 December 1996, over appellants insistence that the issue of jurisdiction should first be resolved, the med-arbiter issued a temporary restraining order directing the respondents to cease and desist from performing any and all acts pertaining to the duties and functions of the officers and directors of USTFU. In the meantime, appellants claimed that the new CBA was purportedly ratified by an overwhelming majority of USTs academic community on 12 December 1996 (Annexes 1 to 10, Idem). For this reason, appellants moved for the dismissal of what it denominated as appellees petition for prohibition on the ground that this had become moot and academic.[5] Petitioners appealed the med-arbiters Decision to the labor secretary,[6] who transmitted the records of the case to the Bureau of Labor Relations which, under Department Order No. 9, was authorized to resolve

appeals of intra-union cases, consistent with the last paragraph of Article 241 of the Labor Code.[7]

The Assailed Ruling

Agreeing with the med-arbiter that the USTFU officers purported election held on October 4, 1994 was void for having been conducted in violation of the unions Constitution and Bylaws (CBL), Public Respondent Bitonio rejected petitioners contention that it was a legitimate exercise of their right to selforganization. He ruled that the CBL, which constituted the covenant between the union and its members, could not be suspended during the October 4, 1996 general assembly of all faculty members, since that assembly had not been convened or authorized by the USTFU. Director Bitonio likewise held that the October 4, 1996 election could not be legitimized by the recognition of the newly elected set of officers by UST or by the alleged ratification of the new CBA by the general membership of the USTFU. Ruled Respondent Bitonio: "This submission is flawed. The issue at hand is not collective bargaining representation but union leadership, a matter that should concern only the members of USTFU. As pointed out by the appellees, the privilege of determining who the union officers will be belongs exclusively to the members of the union. Said privilege is exercised in an election proceeding in accordance with the union's CBL and applicable law.

To accept appellants' claim to legitimacy on the foregoing grounds is to invest in appellants the position, duties, responsibilities, rights and privileges of USTFU officers without the benefit of a lawful electoral exercise as defined in USTFU's CBL and Article 241(c) of the Labor Code. Not to mention the fact that labor laws prohibit the employer from interfering with the employees in the latter' exercise of their right to selforganization. To allow appellants to become USTFU officers on the strength of management's recognition of them is to concede to the employer the power of determining who should be USTFU's leaders. This is a clear case of interference in the exercise by USTFU members of their right to self-organization.[8] Hence, this Petition.[9]

Faculty Assembly is valid pursuant to the constitutional right of the Collective Bargaining Unit to engage in peaceful concerted activities for the purpose of ousting the corrupt regime of the private respondents[.] (3) Whether the overwhelming ratification of the Collective Bargaining Agreement executed by the petitioners in behalf of the USTFU with the University of Santo Tomas has rendered moot and academic the issue as to the validity of the suspension of the Constitution and By-Laws and the elections of October 4, 1996 in the General Faculty Assembly[.]

The Courts Ruling

The Issues

The main issue in this case is whether the public respondent committed grave abuse of discretion in refusing to recognize the officers elected during the October 4, 1996 general assembly. Specifically, petitioners in their Memorandum urge the Court to resolve the following questions:[10] (1) Whether the Collective Bargaining Unit of all the faculty members in that General Faculty Assembly had the right in that General Faculty Assembly to suspend the provisions of the Constitution and By-Laws of the USTFU regarding the elections of officers of the union[.] (2) Whether the suspension of the provisions of the Constitution and By-Laws of the USTFU in that General

The petition is not meritorious. Petitioners fail to convince this Court that Director Bitonio gravely abused his discretion in affirming the med-arbiter and in refusing to recognize the binding effect of the October 4, 1996 general assembly called by the UST administration.

First Issue: Right to Self-Organization and Union Membership

At the outset, the Court stresses that National Federation of Labor (NFL) v. Laguesma[11] has held that challenges against rulings of the labor secretary and those acting on his behalf, like the director of labor relations, shall be acted upon by the Court of Appeals, which has concurrent jurisdiction with this Court over petitions for certiorari. However, inasmuch as the memoranda in the instant case have been filed prior to

the promulgation and finality of our Decision in NFL, we deem it proper to resolve the present controversy directly, instead of remanding it to the Court of Appeals. Having disposed of the foregoing procedural matter, we now tackle the issues in the present case seriatim. Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor Code. Employees have the right to form, join or assist labor organizations for the purpose of collective bargaining or for their mutual aid and protection.[12] Whether employed for a definite period or not, any employee shall be considered as such, beginning on his first day of service, for purposes of membership in a labor union.[13] Corollary to this right is the prerogative not to join, affiliate with or assist a labor union.[14] Therefore, to become a union member, an employee must, as a rule, not only signify the intent to become one, but also take some positive steps to realize that intent. The procedure for union membership is usually embodied in the unions constitution and bylaws.[15] An employee who becomes a union member acquires the rights and the concomitant obligations that go with this new status and becomes bound by the unions rules and regulations. When a man joins a labor union (or almost any other democratically controlled group), necessarily a portion of his individual freedom is surrendered for the benefit of all members. He accepts the will of the majority of the members in order that he may derive the advantages to be gained from the concerted action of all. Just as the enactments of the legislature bind all of us, to the constitution and by-laws of the union (unless contrary

to good morals or public policy, or otherwise illegal), which are duly enacted through democratic processes, bind all of the members. If a member of a union dislikes the provisions of the by-laws, he may seek to have them amended or may withdraw from the union; otherwise, he must abide by them. It is not the function of courts to decide the wisdom or propriety of legitimate by-laws of a trade union. On joining a labor union, the constitution and by-laws become a part of the members contract of membership under which he agrees to become bound by the constitution and governing rules of the union so far as it is not inconsistent with controlling principles of law. The constitution and by-laws of an unincorporated trade union express the terms of a contract, which define the privileges and rights secured to, and duties assumed by, those who have become members. The agreement of a member on joining a union to abide by its laws and comply with the will of the lawfully constituted majority does not require a member to submit to the determination of the union any question involving his personal rights.[16] Petitioners claim that the numerous anomalies allegedly committed by the private respondents during the latters incumbency impelled the October 4, 1996 election of the new set of USTFU officers. They assert that such exercise was pursuant to their right to selforganization. Petitioners frustration over the performance of private respondents, as well as their fears of a fraudulent election to be held under the latters supervision, could not justify the method they chose to

impose their will on the union. Director Bitonio aptly elucidated:[17] The constitutional right to self-organization is better understood in the context of ILO Convention No. 87 (Freedom of Association and Protection of Right to Organize), to which the Philippines is signatory. Article 3 of the Convention provides that workers organizations shall have the right to draw up their constitution and rules and to elect their representatives in full freedom, free from any interference from public authorities. The freedom conferred by the provision is expansive; the responsibility imposed on union members to respect the constitution and rules they themselves draw up equally so. The point to be stressed is that the unions CBL is the fundamental law that governs the relationship between and among the members of the union. It is where the rights, duties and obligations, powers, functions and authority of the officers as well as the members are defined. It is the organic law that determines the validity of acts done by any officer or member of the union. Without respect for the CBL, a union as a democratic institution degenerates into nothing more than a group of individuals governed by mob rule.

employees in the appropriate bargaining unit, for purposes of collective bargaining.[18] Specifically, the purpose of a certification election is to ascertain whether or not a majority of the employees wish to be represented by a labor organization and, in the affirmative case, by which particular labor organization.[19] In a certification election, all employees belonging to the appropriate bargaining unit can vote.[20] Therefore, a union member who likewise belongs to the appropriate bargaining unit is entitled to vote in said election. However, the reverse is not always true; an employee belonging to the appropriate bargaining unit but who is not a member of the union cannot vote in the union election, unless otherwise authorized by the constitution and bylaws of the union. Verily, union affairs and elections cannot be decided in a non-union activity. In both elections, there are procedures to be followed. Thus, the October 4, 1996 election cannot properly be called a union election, because the procedure laid down in the USTFUs CBL for the election of officers was not followed. It could not have been a certification election either, because representation was not the issue, and the proper procedure for such election was not followed. The participation of nonunion members in the election aggravated its irregularity.

Union Election vs. Certification Election

A union election is held pursuant to the unions constitution and bylaws, and the right to vote in it is enjoyed only by union members. A union election should be distinguished from a certification election, which is the process of determining, through secret ballot, the sole and exclusive bargaining agent of the

Second Issue: USTFUs Constitution and ByLaws Violated

The importance of a unions constitution and bylaws cannot be overemphasized. They embody a covenant

between a union and its members and constitute the fundamental law governing the members rights and obligations.[21] As such, the unions constitution and bylaws should be upheld, as long as they are not contrary to law, good morals or public policy. We agree with the finding of Director Bitonio and Med-Arbiter Falconitin that the October 4, 1996 election was tainted with irregularities because of the following reasons. First, the October 4, 1996 assembly was not called by the USTFU. It was merely a convocation of faculty clubs, as indicated in the memorandum sent to all faculty members by Fr. Rodel Aligan, OP, the secretary general of the University of Santo Tomas.[22] It was not convened in accordance with the provision on general membership meetings as found in the USTFUs CBL, which reads: ARTICLE VIII-MEETINGS OF THE UNION Section 1. The Union shall hold regular general membership meetings at least once every three (3) months. Notices of the meeting shall be sent out by the Secretary-General at least ten (10) days prior to such meetings by posting in conspicuous places, preferably inside Company premises, said notices. The date, time and place for the meetings shall be determined by the Board of Officers.[23] Unquestionably, the assembly was not a union meeting. It was in fact a gathering that was called and participated in by management and non-union members. By no legal fiat was such assembly

transformed into a union activity by the participation of some union members. Second, there was no commission on elections to oversee the election, as mandated by Sections 1 and 2 of Article IX of the USTFUs CBL, which provide: ARTICLE IX - UNION ELECTION Section 1. There shall be a Committee on Election (COMELEC) to be created by the Board of Officers at least thirty (30) days before any regular or special election. The functions of the COMELEC include the following: a) Adopt and promulgate rules and regulations that will ensure a free, clean, honest and orderly election, whether regular or special; Pass upon qualifications of candidates; Rule on any question or protest regarding the conduct of the election subject to the procedure that may be promulgated by the Board of Officers; and Proclaim duly elected officers.

b) c)

d)

Section 2. The COMELEC shall be composed of a chairman and two members all of whom shall be appointed by the Board of Officers. xxx xxx xxx[24]

Third, the purported election was not done by secret balloting, in violation of Section 6, Article IX of the

USTFUs CBL, as well as Article 241 (c) of the Labor Code. The foregoing infirmities considered, we cannot attribute grave abuse of discretion to Director Bitonios finding and conclusion. In Rodriguez v. Director, Bureau of Labor Relations,[25] we invalidated the local union elections held at the wrong date without prior notice to members and conducted without regard for duly prescribed ground rules. We held that the proceedings were rendered void by the lack of due process -- undue haste, lack of adequate safeguards to ensure integrity of the voting, and the absence of the notice of the dates of balloting.

Third Issue: Suspension of USTFUs CBL

Petitioners contend that the October 4, 1996 assembly suspended the unions CBL. They aver that the suspension and the election that followed were in accordance with their constituent and residual powers as members of the collective bargaining unit to choose their representatives for purposes of collective bargaining. Again they cite the numerous anomalies allegedly committed by the private respondents as USTFU officers. This argument does not persuade. First, as has been discussed, the general faculty assembly was not the proper forum to conduct the election of USTFU officers. Not all who attended the assembly were members of the union; some, apparently, were even disqualified from becoming union members, since they represented management. Thus, Director Bitonio correctly observed:

Further, appellants cannot be heard to say that the CBL was effectively suspended during the 04 October 1996 general assembly. A union CBL is a covenant between the union and its members and among members (Johnson and Johnson Labor Union-FFW, et al. v. Director of Labor Relations, 170 SCRA 469). Where ILO Convention No. 87 speaks of a unions full freedom to draw up its constitution and rules, it includes freedom from interference by persons who are not members of the union. The democratic principle that governance is a matter for the governed to decide upon applies to the labor movement which, by law and constitutional mandate, must be assiduously insulated against intrusions coming from both the employer and complete strangers if the 'protection to labor clause' of the constitution is to be guaranteed. By appellants own evidence, the general faculty assembly of 04 October 1996 was not a meeting of USTFU. It was attended by members and non-members alike, and therefore was not a forum appropriate for transacting union matters. The person who moved for the suspension of USTFUs CBL was not a member of USTFU. Allowing a non-union member to initiate the suspension of a unions CBL, and non-union members to participate in a union election on the premise that the unions CBL had been suspended in the meantime, is incompatible with the freedom of association and protection of the right to organize. If there are members of the so-called academic community collective bargaining unit who are not USTFU members but who would nevertheless want to have a hand in USTFUs affairs, the appropriate procedure would have been for them to become members of USTFU first. The procedure for membership is very clearly spelled out in Article IV of USTFUs CBL. Having become members, they could

then draw guidance from Ang Malayang Manggagawa Ng Ang Tibay v. Ang Tibay, 103 Phil. 669. Therein the Supreme Court held that if a member of the union dislikes the provisions of the by-laws he may seek to have them amended or may withdraw from the union; otherwise he must abide by them. Under Article XVII of USTFUs CBL, there is also a specific provision for constitutional amendments. What is clear therefore is that USTFUs CBL provides for orderly procedures and remedies which appellants could have easily availed [themselves] of instead of resorting to an exercise of their so-called residual power'.[26] Second, the grievances of the petitioners could have been brought up and resolved in accordance with the procedure laid down by the unions CBL[27]and by the Labor Code.[28] They contend that their sense of desperation and helplessness led to the October 4, 1996 election. However, we cannot agree with the method they used to rectify years of inaction on their part and thereby ease bottled-up frustrations, as such method was in total disregard of the USTFUs CBL and of due process. The end never justifies the means. We agree with the solicitor generals observation that the act of suspending the constitution when the questioned election was held is an implied admission that the election held on that date [October 4, 1996] could not be considered valid under the existing USTFU constitution xxx.[29] The ratification of the new CBA executed between the petitioners and the University of Santo Tomas management did not validate the void October 4, 1996 election. Ratified were the terms of the new CBA, not theissue of union leadership -- a matter that should be decided only by union members in the proper

forum at the proper time and after observance of proper procedures.

Epilogue

In dismissing this Petition, we are not passing upon the merits of the mismanagement allegations imputed by the petitioners to the private respondents; these are not at issue in the present case. Petitioners can bring their grievances and resolve their differences with private respondents in timely and appropriate proceedings. Courts will not tolerate the unfair treatment of union members by their own leaders. When the latter abuse and violate the rights of the former, they shall be dealt with accordingly in the proper forum after the observance of due process. WHEREFORE, the Petition is hereby DISMISSED and the assailed Resolutions AFFIRMED. Costs against petitioners. SO ORDERED. Melo, (Chairman), Reyes, JJ., concur. Vitug, Purisima, and Gonzaga-

THIRD DIVISION

G.R. No. 100898 July 5, 1993 ALEX FERRER, RAFAEL FERRER HENRY DIAZ, DOMINGO BANCOLITA, GIL DE GUZMAN, and FEDERATION OF DEMOCRATIC LABOR UNIONS,

(FEDLU), petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), HUI KAM CHANG (In his capacity as General Manager of Occidental Foundry Corporation), OCCIDENTAL FOUNDRY CORPORATION, MACEDONIO S. VELASCO (In his capacity as representative of the Federation of Free Workers), GENARO CAPITLE, JESUS TUMAGAN, ERNESTO BARROGA, PEDRO LLENA, GODOFREDO PACHECO, MARCELINO CASTILLO, GEORGE IGNAS, PIO DOMINGO, and JAIME BAYNADO, respondents. Genrosa P. Jacinto and Raymundo D. Mallilin for private respondents.

denying the motion for the reconsideration of said decision (NLRC NCR Case No. 00-10-04855-89). Petitioners were regular and permanent employees of the Occidental Foundry Corporation (OFC) in Malanday, Valenzuela, Metro Manila which was under the management of Hui Kam Chang. As piece workers, petitioners' earnings ranged from P110 to P140 a day. They had been in the employ of OFC for about ten years at the time of their dismissal in 1989 (p. 38, Rollo). On January 5, 1989, the Samahang Manggagawa ng Occidental Foundry Corporation-FFW (SAMAHAN) and the OFC entered into a collective bargaining agreement (CBA) which would be effective for the three-year period between October 1, 1988 and September 30, 1991 (Memorandum for OFC and Hui Kam Chang, p. 6, Rollo; p. 551). Article II thereof provides for a union security clause thus: Sec. 1 The company agrees that all permanent and regular factory workers in the company who are members in good standing of the union or who thereafter may become members, shall as a condition of continued employment, maintain their membership in the union in good standing for the duration of the agreement. xxx xxx xxx Sec. 3 The parties agree that failure to retain membership in good standing with the UNION shall be ground for the operation of paragraph 1 hereof and the

MELO, J.: The petition for certiorari before us seeks to annul and set aside: (a) the decision dated June 20, 1991 of the Second Division of the National Labor Relations Commission (NLRC) (Penned by Commissioner Rustico L. Diokno and concurred in by Presiding Commissioner Edna Bonto-Perez and Commissioner Domingo H. Zapanta) which affirmed in toto the decision of April 5, 1990 of Labor Arbiter Eduardo J. Carpio dismissing the complaint for illegal dismissal and unfair labor practice on the ground that both the company and the union merely complied with the collective bargaining agreement provision sanctioning the termination of any employee who fails to retain membership in good standing with the union; and (b) the NLRC resolution

dismissal by the company of the aforesaid employee upon written request by the union. The aforesaid request shall be accompanied by a verified carbon original of the Board of (sic) Resolution by the UNION signed by at least a majority of its officers/directors. (p. 562, Rollo.) On May 6, 1989, petitioner Alex Ferrer and the SAMAHAN, filed in the Department of Labor and Employment (DOLE), a complaint for the expulsion from SAMAHAN of the following officers: Genaro Capitle (president), Jesus Tumagan (vice-president), Godofredo Pacheco (auditor), and Marcelino Pacheco (board member) (Case No. NCR-00-M-89-11-01). The complaint was founded on said officers' alleged inattentiveness to the economic demands of the workers. However, on September 4, 1989, petitioners Diaz and Alex Ferrer withdrew the petition (p. 590, Rollo). On September 10, 1989, petitioners conducted a special election of officers of the SAMAHAN (pp. 205 & 583,Rollo). Said election was, however, later questioned by the FFW. Nonetheless, the elected set of officers tried to dissuade the OFC from remitting union dues to the officers led by Capitle who were allied with the FFW. Later, however, Romulo Erlano, one of the officers elected at the special election, manifested to the DOLE that he was no longer objecting to the remittance of union dues to the officers led by Capitle. Petitioners' move to stage a strike based on economic demands was also later disowned by members of the SAMAHAN. The intraunion squabble came to a head when, on September 11, 1989, a resolution expelling petitioners

from the SAMAHAN was issued by the aforesaid union officials headed by Capitle, together with board members George Ignas, Pio Domingo, and Jaime Baynado (pp. 286 & 599, Rollo). The following day, Capitle sent OFC the following letter:

Mr. Hui Kam Chang General Manager Malanday, Valenzuela Metro Manila Dear Mr. Chang: In compliance with Article II, Sec. 3 of the Union Security Clause as enunciated in our Collective Bargaining Agreement, I would like you to dismiss the following

employees on the ground of failure to retain membership in good standing: 1. Alex Ferrer 2. Gil de Guzman 3. Henry Diaz 4. Domingo Bancolita 5. Rafael Ferrer, Jr. Attached herewith is the verified carbon original of the Board Resolution of the union signed by the majority of its officers/directors. Thank you very much. V e r y t r u l y y o u r (p. 66, Rollo.) ( S g d . ) G E N A R O C A P I T L E P r e s i d e n t

Although petitioners received this letter weeks after its date, it appears that on that same date, they had learned about their dismissal from employment as shown by the letter also dated September 13, 1989 which they sent the Federation of Democratic Labor Unions (FEDLU). They volunteered therein to be admitted as members of the FEDLU and requested that they be represented ("katawanin") by said federation before the DOLE in the complaint which they intended to file against the union (SAMAHAN), the FFW and the company for illegal dismissal, reinstatement, and other benefits in accordance with law (p. 74, Rollo). Thereafter, on various dates, petitioners sent individual letters to Hui Kam Chang professing innocence of the charges levelled against them by the SAMAHAN and the FFW and pleading that they be reinstated (pp. 6973,Rollo). Their letters appear to have elicited no response. Thus, contending that their dismissal was without cause and in utter disregard of their right to due process of law, petitioners, through the FEDLU, filed a complaint for illegal dismissal and unfair labor practice before the NLRC against Hui Kam Chang, OFC, Macedonio S. Velasco (as representative of the FFW) the FFW, and the SAMAHAN officers headed by Capitle (p. 75, Rollo). In due course, after the case was ventilated through position papers and other documents, the labor arbiter rendered a decision dismissing petitioners' complaint (pp. 79-89, Rollo). He found that in dismissing petitioners, OFC was "merely complying with the

mandatory provisions of the CBA the law between it and the union." He added: To register compliance with the said covenant, all that is necessary is a written request of the union requesting dismissal of the employees who have failed to retain membership in good standing with the union. The matter or question, therefore of determining why and how did complainants fail to retain membership in good standing is not for the company to inquire via formal investigation. By having the request of the union, a legal presumption that the request was born out of a formal inquiry by the union that subject employees failed to exist. This means generally that where a valid closed shop or similar agreement is in force with respect to a particular bargaining unit as in the case a quo, the employer shall refuse to employ any person unless he is a member of the majority union and the employer shall dismiss employees who fail to retain their membership in the majority union. This must be deemed a just cause recognized by law and jurisprudence. The effect is discrimination to encourage membership in other unions. (pp. 8687, Rollo.) Hence, the labor arbiter concluded, the dismissal of petitioners was an exercise of legitimate management prerogative which cannot be considered as an unfair labor practice. On whether the SAMAHAN and the FFW could be held liable for illegal dismissal and unfair labor

practice, the arbiter opined that since there was no employer-employee relationship between petitioners and respondent unions, the complaint against the latter has no factual and legal bases, because petitioners "should not have confused expulsion from membership in the union as one and the same incident to their subsequent employment termination." Consequently, petitioners appealed to the NLRC on the grounds that there was prima facie evidence of abuse of discretion on the part of the labor arbiter and that he committed serious errors in his findings of facts. On June 20, 1991, the NLRC rendered the herein questioned decision affirming in toto the decision of the arbiter. Petitioners motion for the reconsideration of the NLRC decision having been denied, they resorted to the instant petition for certiorari which presents the issue of wether or not respondent Commision gravely abused its discretion in affirming the decision of the labor arbiter which is allegedly in defiance of the elementary principles of procedural due process as the petitioners were summarily dismissed from employment without an investigation having been conducted by the OFC on the veracity of the allegation of the SAMAHAN-FFW that they violated the CBA. A CBA is the law between the company and the union and compliance therewith is mandated by the express policy to give protection to labor. Said policy should be given paramount consideration unless otherwise provided for by law (Meycauayan College vs. Drilon, 185 SCRA 50 [1990]. A CBA provision for a closed shop is a valid form of union security and it is not a restriction on the right or freedom of association guaranteed by the

Constitution (Lirag Textile Mill, Inc. vs. Blanco, 109 SCRA 87 [1981]. However, in the implementation of the provisions of the CBA, both parties thereto should see to it that no right is violated or impaired. In the case at bar, while it is true that the CBA between OFC and the SAMAHAN provided for the dismissal of employees who have not maintained their membership in the union, the manner in which the dismissal was enforced left much to be desired in terms of respect for the right of petitioners to procedural due process. In the first place, the union has a specific provision for the permanent or temporary "expulsion" of its erring members in its constitution and by-laws ("saligang batas at alituntunin"). Under the heading membership and removal ("pag-aanib at pagtitiwalag"), it states: Sec. 4. Ang sinumang kasapi ay maaring itwalag (sic) ng Samahan pangsamantala o tuluyan sa pamamagitan (sic) ng tatlo't ikaapat () na bahagi ng dami ng bilang ng Pamunuang Tagapagpaganap. Pagkaraan lamang sa pandinig sa kanyang kaso. Batay sa sumusunod: (a) Sinumang gumawa ng mga bagay bagay na labag at lihis sa patakaran ng Samahan. (b) Sinumang gumawa ng mga bagay na maaaring ikabuwag ng Samahan.

(c) Hindi paghuhulog ng butaw sa loob ng tatlong buwan na walang sakit o Doctor's Certificate. (d) Hindi pagbibigay ng abuloy na itinatadhana ng Samahan. (e) Sinumang kasapi na natanggal sa kapisanan at gustong, sumapi uli ay magpapanibago ng bilang, mula sa taon ng kanyang pagsapi uli sa Samahan. (Emphasis supplied; Ibid., p. 177). No hearing ("pandinig") was ever conducted by the SAMAHAN to look into petitioners' explanation of their moves to oust the union leadership under Capitle, or their subsequent affiliation with FEDLU. While it is true that petitioners' actions might have precipitated divisiveness and, later, showed disloyalty to the union, still, the SAMAHAN should have observed its own constitution and by-laws by giving petitioners an opportunity to air their side and explain their moves. If, after an investigation the petitioners were found to have violated union rules, then and only then should they be subjected to proper disciplinary measures. Here lies the distinction between the facts of this case and that of Cario vs. NLRC (185 SCRA 177 [1990]) upon which the Solicitor General heavily relies in supporting the stand of petitioners. In Cario, the erring union official was given the chance to answer the complaints against him before an investigating committee created for that purpose. On the other, hand, herein petitioners were not given even one opportunity to explain their side in the controversy. This procedural

lapse should not have been overlooked considering the union security provision of the CBA. What aggravated the situation in this case is the fact that OFC itself took for granted that the SAMAHAN had actually conducted an inquiry and considered the CBA provision for the closed shop as self-operating that, upon receipt of a notice that some members of the SAMAHAN had failed to maintain their membership in good standing in accordance with the CBA, it summarily dismissed petitioners. To make matters worse, the labor arbiter and the NLRC shared the same view in holding that "(t)he matter or question, therefore, of determining why and how did complainants fail to retain membership in good standing is not for the company to inquire via formal investigation" (pp. 87 & 135, Rollo). In this regard, the following words of my learned brother, Mr. Justice Feliciano, in the Resolution in Cario are apt: 4. Turning now to the involvement of the Company in the dismissal of petitioner Cario, we note that the Company upon being formally advised in writing of the expulsion of petitioner Cario from the Union, in turn simply issued a termination letter to Cario, the termination being made effective the very next day. We believe that the Company should have given petitioner Cario an opportunity to explain his side of the controversy with the Union. Notwithstanding the Union's Security Clause in the CBA, the Company should have reasonably satisfied itself by its own inquiry that the Union had not been merely acting arbitrarily and

capriciously in impeaching and expelling petitioner Cario . . . xxx xxx xxx 5. We conclude that the Company had failed to accord to petitioner Cario the latter's right to procedural due process. The right of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the Company or his own Union, is not wiped away by a Union Security Clause or a Union Shop Clause in a CBA. An employee is entitled to be protected not only from a company which disregards his rights but also from his own Union the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and hence dismissal from his job. (pp. 186 & 189.) The need for a company investigation is founded on the consistent ruling of this Court that the twin requirements of notice and hearing which are essential elements of due process must be met in employmenttermination cases. The employee concerned must be notified of the employer's intent to dismiss him and of the reason or reasons for the proposed dismissal. The hearing affords the employee an opportunity to answer the charge or charges against him and to defend himself therefrom before dismissal is effected (Kwikway Engineering Works vs. NLRC, 195 SCRA 526 [1991]; Salaw vs. NLRC, 202 SCRA 7 [1991]). Observance to the letter of company rules on investigation of an employee

about to be dismissed is not mandatory. It is enough that there is due notice and hearing before a decision to dismiss is made (Mendoza vs. NLRC, 195 SCRA 606 (1991]). But even if no hearing is conducted, the requirement of due process would have been met where a chance to explain a party's side of the controversy had been accorded him (Philippine Airlines, Inc. vs. NLRC, 198 SCRA 748 [1991]). If an employee may be considered illegally dismissed because he was not accorded fair investigation (Hellenic Philippine Shipping vs. Siete, 195 SCRA 179 (1991]), the more reason there is to strike down as an inexcusable and disdainful rejection of due process a situation where there is no investigation at all (See: Colegio del Sto. Nio vs. NLRC, 197 SCRA 611 [1991]; Artex Development Co., Inc. vs. NLRC, 187 SCRA 611 [1990]). The need for the observance of an employee's right to procedural due process in termination cases cannot be overemphasized. After all, one's employment, profession, trade, or calling is a "property right" and the wrongful interference therewith gives rise to an actionable wrong (Callanta vs. Carnation Philippines, Inc., 145 SCRA 268 (1986]). Verily, a man's right to his labor is property within the meaning of constitutional guarantees which he cannot be deprived of without due process (Batangas Laguna Tayabas Bus Co. vs. Court of Appeals, 71 SCRA 470 [1976]). While the law recognizes the right of an employer to dismiss employees in warranted cases, it frowns upon arbitrariness as when employees are not accorded due process (Tan, Jr. vs. NLRC, 183 SCRA 651 [1990]). Thus, the prerogatives of the OFC to dismiss petitioners should not have been whimsically done for it unduly exposed itself to a charge of unfair labor practice for

dismissing petitioners in line with the closed shop provision of the CBA, without a proper hearing (Tropical Hut Employees' Union-CGW vs. Tropical Hut Food Market, Inc., 181 SCRA 173 [1990]; citing BinalbaganIsabela Sugar Co., Inc. (BISCOM) vs. Philippine Association of Free Labor Unions (PAFLU), 8 SCRA 700 [1983]). Neither can the manner of dismissal be considered within the ambit of managerial prerogatives, for while termination of employment is traditionally considered a management prerogative, it is not an absolute prerogative subject as it is to limitations founded in law, the CBA, or general principles of fair play and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]). Under Rule XIV, Sections 2, 5, and 6 of the rules implementing Batas Pambansa Blg. 130, the OFC and the SAMAHAN should solidarity indemnify petitioners for the violation of their right to procedural due process (Great Pacific Life Assurance Corporation vs. NLRC, 187 SCRA 694[1990], citing Wenphil vs. NLRC, 170 SCRA 69 [1989], Cario vs. NLRC, supra). However, such penalty may be imposed only where the termination of employment is justified and not when the dismissal is illegal as in this case where the damages are in the form of back wages. As earlier discussed, petitioners' alleged act of sowing disunity among the members of the SAMAHAN could have been ventilated and threshed out through a grievance procedure within the union itself. But resort to such procedure was not pursued. What actually happened in this case was that some members, including petitioners, tried to unseat the SAMAHAN leadership headed by Capitle due to the latter's alleged inattention to petitioners' demands for the

implementation of the P25-wage increase which took effect on July 1, 1989. The intraunion controversy was such that petitioners even requested the FFW to intervene to facilitate the enforcement of the said wage increase (Petition, p. 54; p. 55, Rollo). Petitioners sought the help of the FEDLU only after they had learned of the termination of their employment upon the recommendation of Capitle. Their alleged application with federations other than the FFW (Labor Arbiter's Decision, pp. 4-5; pp. 82-83, Rollo) can hardly be considered as disloyalty to the SAMAHAN, nor may the filing of such applications denote that petitioners failed to maintain in good standing their membership in the SAMAHAN. The SAMAHAN is a different entity from FFW, the federation to which it belonged. Neither may it, be inferred that petitioners sought disaffiliation from the FFW for petitioners had not formed a union distinct from that of the SAMAHAN. Parenthetically, the right of a local union to disaffiliate from a federation in the absence of any provision in the federation's constitution preventing disaffiliation of a local union is legal (People's Industrial and Commercial Employees and Worker's Org. (FFW) vs. People's Industrial and Commercial Corp., 112 SCRA 440 (1982]). Such right is consistent with the constitutional guarantee of freedom of association (Tropical Hut Employees Union-CGW vs. Tropical Hut Food Market, Inc., 181 SCRA 173 [1990]). Hence, while petitioners' act of holding a special election to oust Capitle, et al. may be considered as an act of sowing disunity among the SAMAHAN members, and, perhaps, disloyalty to the union officials, which could have been dealt with by the union as a disciplinary matter, it certainly cannot be considered as constituting disloyalty to the union. Faced with a SAMAHAN

leadership which they had tried to remove as officials, it was but a natural act of self-preservation that petitioners fled to the arms of the FEDLU after the union and the OFC had tried to terminate their employment. Petitioners should not be made accountable for such an act. With the passage of Republic Act No. 6715 which took effect on March 21, 1989, Article 279 of the Labor Code was amended to read as follows: Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. and as implemented by Section 3, Rule 8 of the 1990 New Rules of Procedure of the National Labor Relations Commission, it would seem that the Mercury Drug Rule (Mercury Drug Co., Inc. vs. Court of Industrial Relations, 56 SCRA 694 [1974]) which limited the award of back wages of illegally dismissed workers to three (3) years "without deduction or qualification" to obviate the need for further proceedings in the course of execution, is no longer applicable.

A legally dismissed employee may now be paid his back wages, allowances, and other benefits for the entire period he was out of work subject to the rule enunciated before the Mercury Drug Rule, which is that the employer may, however, deduct any amount which the employee may have earned during the period of his illegal termination (East Asiatic Company, Ltd. vs. Court of Industrial Relations, 40 SCRA 521 [1971]). Computation of full back wages and presentation of proof as to income earned elsewhere by the illegally dismissed employee after his termination and before actual reinstatement should be ventilated in the execution proceedings before the Labor Arbiter concordant with Section 3, Rule 8 of the 1990 new Rules of Procedure of the National Labor Relations Commission. Inasmuch as we have ascertained in the text of this discourse that the OFC whimsically dismissed petitioners without proper hearing and has thus opened OFC to a charge of unfair labor practice, it ineluctably follows that petitioners can receive their back wages computed from the moment their compensation was withheld after their dismissal in 1989 up to the date of actual reinstatement. In such a scenario, the award of back wages can extend beyond the 3-year period fixed by the Mercury Drug Rule depending, of course, on when the employer will reinstate the employees. It may appear that Article 279 of the Labor Code, as amended by Republic Act No. 6715, has made the employer bear a heavier burden than that pronounced in the Mercury Drug Rule, but perhaps Republic Act No. 6715 was enacted precisely for the employer to realize that the employee must be immediately restored to his former position, and to impress the idea that immediate

reinstatement is tantamount to a cost-saving measure in terms of overhead expense plus incremental productivity to the company which lies in the hands of the employer. WHEREFORE, the decision appealed from is hereby SET ASIDE and private respondents are hereby ordered to reinstate petitioners to their former or equivalent positions without loss of seniority rights and with full back wages, inclusive of allowances and other benefits or their monetary equivalent, pursuant to Article 279 of the Labor Code, as amended by Republic Act No. 6715. SO ORDERED. Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur. FIRST DIVISION G.R. No. 85333 February 26, 1990 CARMELITO L. PALACOL, ET AL., petitioners, vs. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, MANILA CCBPI SALES FORCE UNION, and COCA-COLA BOTTLERS (PHILIPPINES), INC., respondents. Wellington B. Lachica for petitioners. Adolpho M. Guerzon for respondent Union.

Can a special assessment be validly deducted by a labor union from the lump-sum pay of its members, granted under a collective bargaining agreement (CBA), notwithstanding a subsequent disauthorization of the same by a majority of the union members? This is the main issue for resolution in the instant petition for certiorari. As gleaned from the records of the case, the pertinent facts are as follows: On October 12, 1987, the respondent Manila CCBPI Sales Force Union (hereinafter referred to as the Union), as the collective bargaining agent of all regular salesmen, regular helpers, and relief helpers of the Manila Plant and Metro Manila Sales Office of the respondent Coca-Cola Bottlers (Philippines), Inc. (hereinafter referred to as the Company) concluded a new collective bargaining agreement with the latter. 1 Among the compensation benefits granted to the employees was a general salary increase to be given in lump sum including recomputation of actual commissions earned based on the new rates of increase. On the same day, the president of the Union submitted to the Company the ratification by the union members of the new CBA and authorization for the Company to deduct union dues equivalent to P10.00 every payday or P20.00 every month and, in addition, 10% by way of special assessment, from the CBA lump-sum pay granted to the union members. The last one among the aforementioned is the subject of the instant petition. As embodied in the Board Resolution of the Union dated September 29, 1987, the purpose of the special

GANCAYCO, J.:

assessment sought to be levied is "to put up a cooperative and credit union; purchase vehicles and other items needed for the benefit of the officers and the general membership; and for the payment for services rendered by union officers, consultants and others." 2 There was also an additional proviso stating that the "matter of allocation ... shall be at the discretion of our incumbent Union President." This "Authorization and CBA Ratification" was obtained by the Union through a secret referendum held in separate local membership meetings on various dates. 3 The total membership of the Union was about 800. Of this number, 672 members originally authorized the 10% special assessment, while 173 opposed the same. 4 Subsequently however, one hundred seventy (170) members of the Union submitted documents to the Company stating that although they have ratified the new CBA, they are withdrawing or disauthorizing the deduction of any amount from their CBA lump sum. Later, 185 other union members submitted similar documents expressing the same intent. These members, numbering 355 in all (170 + 185), added to the original oppositors of 173, turned the tide in favor of disauthorization for the special assessment, with a total of 528 objectors and a remainder of 272 supporters. 5 On account of the above-mentioned disauthorization, the Company, being in a quandary as to whom to remit the payment of the questioned amount, filed an action for interpleader with the Bureau of Labor Relations in order to resolve the conflicting claims of the parties concerned. Petitioners, who are regular rank-and-file

employees of the Company and bona fide members of the Union, filed a motion/complaint for intervention therein in two groups of 161 and 94, respectively. They claimed to be among those union members who either did not sign any individual written authorization, or having signed one, subsequently withdrew or retracted their signatures therefrom. Petitioners assailed the 10% special assessment as a violation of Article 241(o) in relation to Article 222(b) of the Labor Code. Article 222(b) provides as follows: ART. 222. Appearances and Fees. xxx xxx xxx (b) No attorney's fees, negotiation fees or similar charges of any kind arising from any collective bargaining negotiations or conclusion of the collective agreement shall be imposed on any individual member of the contracting union; Provided, however, that attorney's fees may be charged against union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void. On the other hand, Article 241(o) mandates that:

ART. 241. Rights and conditions of membership in a labor organization. xxx xxx xxx (o) Other than for mandatory activities under the Code, no special assessments, attorney's fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization duly signed by the employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction; As authority for their contention, petitioners cited Galvadores v. Trajano, 6 wherein it was ruled that no check-offs from any amount due employees may be effected without individual written authorizations duly signed by the employees specifically stating the amount, purpose, and beneficiary of the deduction. In its answer, the Union countered that the deductions not only have the popular indorsement and approval of the general membership, but likewise complied with the legal requirements of Article 241 (n) and (o) of the Labor Code in that the board resolution of the Union imposing the questioned special assessment had been duly approved in a general membership meeting and that the

collection of a special fund for labor education and research is mandated. Article 241(n) of the Labor Code states that ART. 241. Rights and conditions of membership in a labor organization. xxx xxx xxx (n) No special assessment or other extraordinary fees may be levied upon the members of a labor organization unless authorized by a written resolution of a majority of all the members at a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessments or fees. The record shall be attested to by the president; Med-Arbiter Manases T. Cruz ruled in favor of petitioners in an order dated February 15, 1988 whereby he directed the Company to remit the amount it had kept in trust directly to the rank-and-file personnel without delay. On appeal to the Bureau of Labor Relations, however, the order of the Med-Arbiter was reversed and set aside by the respondent-Director in a resolution dated August 19, 1988 upholding the claim of the Union that the special assessment is authorized under Article 241 (n) of

the Labor Code, and that the Union has complied with the requirements therein. Hence, the instant petition. Petitioners allege that the respondent-Director committed a grave abuse of discretion amounting to lack or excess of jurisdiction when she held Article 241 (n) of the Labor Code to be the applicable provision instead of Article 222(b) in relation to Article 241(o) of the same law. According to petitioners, a cursory examination and comparison of the two provisions of Article 241 reveals that paragraph (n) cannot prevail over paragraph (o). The reason advanced is that a special assessment is not a matter of major policy affecting the entire union membership but is one which concerns the individual rights of union members. Petitioners further assert that assuming arguendo that Article 241(n) should prevail over paragraph (o), the Union has nevertheless failed to comply with the procedure to legitimize the questioned special assessment by: (1) presenting mere minutes of local membership meetings instead of a written resolution; (2) failing to call a general membership meeting; (3) having the minutes of three (3) local membership meetings recorded by a union director, and not by the union secretary as required; (4) failing to have the list of members present included in the minutes of the meetings; and (5) failing to present a record of the votes cast. 7 Petitioners concluded their argument by citing Galvadores.

After a careful review of the records of this case, We are convinced that the deduction of the 10% special assessment by the Union was not made in accordance with the requirements provided by law. Petitioners are correct in citing the ruling of this Court in Galvadores which is applicable to the instant case. The principle "that employees are protected by law from unwarranted practices that diminish their compensation without their known edge and consent" 8 is in accord with the constitutional principle of the State affording full protection to labor. 9 The respondent-Union brushed aside the defects pointed out by petitioners in the manner of compliance with the legal requirements as "insignificant technicalities." On the contrary, the failure of the Union to comply strictly with the requirements set out by the law invalidates the questioned special assessment. Substantial compliance is not enough in view of the fact that the special assessment will diminish the compensation of the union members. Their express consent is required, and this consent must be obtained in accordance with the steps outlined by law, which must be followed to the letter. No shortcuts are allowed. The applicable provisions are clear. The Union itself admits that both paragraphs (n) and (o) of Article 241 apply. Paragraph (n) refers to "levy" while paragraph (o) refers to "check-off" of a special assessment. Both provisions must be complied with. Under paragraph (n), the Union must submit to the Company a written resolution of a majority of all the members at a general membership meeting duly called for the purpose. In addition, the secretary of the organization must record

the minutes of the meeting which, in turn, must include, among others, the list of all the members present as well as the votes cast. As earlier outlined by petitioners, the Union obviously failed to comply with the requirements of paragraph (n). It held local membership meetings on separate occasions, on different dates and at various venues, contrary to the express requirement that there must be a general membership meeting. The contention of the Union that "the local membership meetings are precisely the very general meetings required by law" 10 is untenable because the law would not have specified a general membership meeting had the legislative intent been to allow local meetings in lieu of the latter. It submitted only minutes of the local membership meetings when what is required is a written resolution adopted at the general meeting. Worse still, the minutes of three of those local meetings held were recorded by a union director and not by the union secretary. The minutes submitted to the Company contained no list of the members present and no record of the votes cast. Since it is quite evident that the Union did not comply with the law at every turn, the only conclusion that may be made therefrom is that there was no valid levy of the special assessment pursuant to paragraph (n) of Article 241 of the Labor Code. Paragraph (o) on the other hand requires an individual written authorization duly signed by every employee in order that a special assessment may be validly checkedoff. Even assuming that the special assessment was validly levied pursuant to paragraph (n), and granting that individual written authorizations were obtained by

the Union, nevertheless there can be no valid check-off considering that the majority of the union members had already withdrawn their individual authorizations. A withdrawal of individual authorizations is equivalent to no authorization at all. Hence, the ruling in Galvadores that "no check-offs from any amounts due employees may be effected without an individual written authorization signed by the employees ... " is applicable. The Union points out, however, that said disauthorizations are not valid for being collective in form, as they are "mere bunches of randomly procured signatures, under loose sheets of paper." 11 The contention deserves no merit for the simple reason that the documents containing the disauthorizations have the signatures of the union members. The Court finds these retractions to be valid. There is nothing in the law which requires that the disauthorization must be in individual form. Moreover, it is well-settled that "all doubts in the implementation and interpretation of the provisions of the Labor Code ... shall be resolved in favor of labor." 12 And as previously stated, labor in this case refers to the union members, as employees of the Company. Their mere desire to establish a separate bargaining unit, albeit unproven, cannot be construed against them in relation to the legality of the questioned special assessment. On the contrary, the same may even be taken to reflect their dissatisfaction with their bargaining representative, the respondent-Union, as shown by the circumstances of the instant petition, and with good reason. The Med-Arbiter correctly ruled in his Order that:

The mandate of the majority rank and file have (sic) to be respected considering they are the ones directly affected and the realities of the high standards of survival nowadays. To ignore the mandate of the rank and file would enure to destabilizing industrial peace and harmony within the rank and file and the employer's fold, which we cannot countenance. Moreover, it will be recalled that precisely union dues are collected from the union members to be spent for the purposes alluded to by respondent. There is no reason shown that the regular union dues being now implemented is not sufficient for the alleged expenses. Furthermore, the rank and file have spoken in withdrawing their consent to the special assessment, believing that their regular union dues are adequate for the purposes stated by the respondent. Thus, the rank and file having spoken and, as we have earlier mentioned, their sentiments should be respected. Of the stated purposes of the special assessment, as embodied in the board resolution of the Union, only the collection of a special fund for labor and education research is mandated, as correctly pointed out by the Union. The two other purposes, namely, the purchase of vehicles and other items for the benefit of the union officers and the general membership, and the payment of services rendered by union officers, consultants and others, should be supported by the regular union dues, there being no showing that the latter are not sufficient to cover the same.

The last stated purpose is contended by petitioners to fall under the coverage of Article 222 (b) of the Labor Code. The contention is impressed with merit. Article 222 (b) prohibits attorney's fees, negotiations fees and similar charges arising out of the conclusion of a collective bargaining agreement from being imposed on any individual union member. The collection of the special assessment partly for the payment for services rendered by union officers, consultants and others may not be in the category of "attorney's fees or negotiations fees." But there is no question that it is an exaction which falls within the category of a "similar charge," and, therefore, within the coverage of the prohibition in the aforementioned article. There is an additional proviso giving the Union President unlimited discretion to allocate the proceeds of the special assessment. Such a proviso may open the door to abuse by the officers of the Union considering that the total amount of the special assessment is quite considerable P1,027,694.33 collected from those union members who originally authorized the deduction, and P1,267,863.39 from those who did not authorize the same, or subsequently retracted their authorizations. 13 The former amount had already been remitted to the Union, while the latter is being held in trust by the Company. The Court, therefore, stakes down the questioned special assessment for being a violation of Article 241, paragraphs (n) and (o), and Article 222 (b) of the Labor Code. WHEREFORE, the instant petition is hereby GRANTED. The Order of the Director of the Bureau of Labor Relations dated August 19, 1988 is hereby REVERSED and SET ASIDE, while the order of the Med-Arbiter dated February 17, 1988 is reinstated, and the

respondent Coca-Cola Bottlers (Philippines), Inc. is hereby ordered to immediately remit the amount of P1,267,863.39 to the respective union members from whom the said amount was withheld. No pronouncement as to costs. This decision is immediately executory. SO ORDERED. Narvasa, Grio-Aquino and Medialdea, JJ., concur. Cruz, J., took no part.

affiliate. In representation of SAMANA BAY, ANGLO entered and concluded a Collective Bargaining Agreement (CBA) with Manila Bay Spinning Mills and J.P. Coats Manila Bay, Inc. (hereinafter referred to as the corporations) on November 1, 1991. On December 4, 1993, the Executive Committee of SAMANA BAY decided to disaffiliate from ANGLO in view of the latter's dereliction of its duty to promote and advance the welfare of SAMANA BAY and the alleged cases of corruption involving the federation officers. Said disaffiliation was unanimously confirmed by the members of SAMANA BAY. On April 4, 1994, a petition to stop remittance of federation dues to ANGLO was filed by SAMANA BAY with the Bureau of Labor Relations on the ground that the corporations, despite having been furnished copies of the union resolution relating to said disaffiliation, refused to honor the same. ANGLO counteracted by unseating all officers and board members of SAMANA BAY and appointing, in their stead, a new set of officers who were duly recognized by the corporations. In its position paper, ANGLO contended that the disaffiliation was void considering that a collective bargaining agreement is still existing and the freedom period has not yet set in. The Med-Arbiter resolved that the disaffiliation was void but upheld the illegality of the ouster officers of SAMANA BAY. Both parties filed their respective appeals with the Department of Labor and Employment. In a resolution dated September 23, 1994, herein public respondent modified the order and ruled in favor of respondent union, disposing as follows: "WHEREFORE, the appeal of respondent ANGLO is hereby denied for lack of merit while the appeal of

[G.R. No. 118562. July 5, 1996]

ALLIANCE OF NATIONALIST AND GENUINE LABOR ORGANIZATION (ANGLO-KMU), petitioner, vs. SAMAHAN NG MGA MANGAGAWANG NAGKAKAISA SA MANILA BAY SPINNING MILLS AT J.P. COATS (SAMANA BAY), GILBERT SUNGAYANN, FERNANDO MELARPIS, ET. AL,respondents. RESOLUTION FRANCISCO, J.: Petitioner Alliance of Nationalist and Genuine Labor Organization (ANGLO for brevity) is a duly registered labor organization while respondent union Samahan Ng Mga Mangagawang Nagkakaisa sa Manila Bay Spinning Mills and J.P. Coats (SAMANA BAY for brevity) is its

petitioners is hereby granted. Accordingly, the order of the Med-Arbiter is modified by: 1) declaring the disaffiliation of petitioner union from respondent ANGLO as valid; 2) directing respondent Manila Bay Spinning Mills, Inc. and J.P. Coats to stop remitting to ANGLO federation dues and instead to remit the whole amount of union dues to the treasurer of petitioner union; and 3) enjoining ANGLO-KMU from interfering in the affairs of petitioner union. SO ORDERED."[1] ANGLO filed a motion for reconsideration but the same was denied for lack of merit. Hence, this petition for certiorari under Rule 65. The petition calls upon us to resolve two issues, to wit: 1) whether the disaffiliation was valid; and 2) whether petitioner can validly oust individual private respondents from their positions. We rule for the respondents. For clarity, we shall first consider the respecting the validity of the disaffiliation. issue

Anent the first ground, we reiterate the rule that all employees enjoy the right to self-organization and to form and join labor organizations of their own choosing for the purpose of collective bargaining. This is a fundamental right of labor and derives its existence from the Constitution. In interpreting the protection to labor and social justice provisions of the Constitution and the labor laws, rules or regulations, we have always adopted the liberal approach which favors the exercise of labor rights.[2] This Court is not ready to bend this principle to yield to a mere procedural defect, to wit: failure to observe certain procedural requirements for a valid disaffiliation. Non-compliance with the procedure on disaffiliation, being premised on purely technical grounds cannot rise above the fundamental right of selforganization.[3] We quote, with approval, the findings of herein public respondent, that: "x x x the resolution of the general membership ratifying the disaffiliation action initiated by the Board, substantially satisfies the procedural requirements for disaffiliation. No doubt was raised on the support of the majority of the union members on the decision to disaffiliate."[4] This, to our mind, is clearly supported by the evidence. ANGLO's alleged acts inimical to the interests of respondent union have not been sufficiently rebutted. It is clear under the facts that respondent union's members have unanimously decided to disaffiliate from the mother federation and ANGLO has

Petitioner ANGLO wants to impress on us that the disaffiliation was invalid for two reasons, namely: that the procedural requirements for a valid disaffiliation were not followed; and that it was made in violation of P.D. 1391.

nothing to offer in dispute other than the law prohibiting the disaffiliation outside the freedom period. In the same wise, We find no ground for ruling against the validity of the disaffiliation in the light of recent jurisprudential rules. Although P.D. 1391 provides: "Item No. 6. No petition for certification election, for intervention and disaffiliation shall be entertained or given due course except within the 60-day freedom period immediately preceding the expiration of a collective bargaining agreement," said law is definitely not without exceptions. Settled is the rule that a local union has the right to disaffiliate from its mother union when circumstances warrant.[5] Generally, a labor union may disaffiliate from the mother union to form a local or independent union only during the 60-day freedom period immediately preceding the expiration of the CBA. However, even before the onset of the freedom period, disaffiliation may be carried out when there is a shift of allegiance on the part of the majority of the members of the union.[6] Coming now to the second issue, ANGLO contends that individual private respondents were validly ousted as they have ceased to be officers of the incumbent union (ANGLO-KMU) at the time of disaffiliation. In order to fill the vacuum, it was deemed proper to appoint the individual replacements so as not to put in disarray the organizational structure and to prevent chaos and confusion among the general membership and within the company.

The contention is bereft of merit. A local labor union is a separate and distinct unit primarily designed to secure and maintain an equality of bargaining power between the employer and their employee-members. 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.[7] The mere act of 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[8] where the former acts in representation of the latter. By SAMANA BAY's disaffiliation from ANGLO, the vinculum that previously bound the two entities was completely severed. ANGLO was divested of any and all power to act in representation of SAMANA BAY. Thus, any act performed by ANGLO affecting the interests and affairs of SAMANA BAY, including the ouster of herein individual private respondents, is rendered without force and effect. WHEREFORE, premises considered, the petition is hereby DISMISSED. SO ORDERED. Narvasa, C.J., (Chairman), Melo, and Panganiban, JJ., concur. SECOND DIVISION [G. R. No.101738. April 12, 2000] PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner, vs. HON. BIENVENIDO E. Davide, Jr.,

LAGUESMA, Undersecretary of Labor and Employment, HON. HENRY PABEL, Director of the Department of Labor and Employment Regional Office No. XI and/or the Representation Officer of the Industrial Relations Division who will act for and in his behalf, PCOP- BISLIG SUPERVISORY AND TECHNICAL STAFF EMPLOYEES UNION, ASSOCIATED LABOR UNION and FEDERATION OF FREE WORKERS, respondents. DECISION DE LEON, JR., J.: Miso Before us is a petition for certiorari seeking to annul the Resolution[1] and the Order[2] dated April 17, 1991 and August 7, 1991, respectively, of public respondent Bienvenido E. Laguesma, acting then as Undersecretary, now the Secretary, of the Department of Labor and Employment (DOLE), which reversed the Order dated March 27, 1990[3] of Med-Arbiter Phibun D. Pura declaring that supervisors and section heads of petitioner under its new organizational structure are managerial employees and should be excluded from the list of voters for the purpose of a certification election among supervisory and technical staff employees of petitioner.[4] The facts of the case are the following: Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the manufacture of paper and timber products, with principal place of operations at Tabon, Bislig, Surigao del Sur. It has over 9,000[5] employees, 944[6] of whom are supervisory and

technical staff employees. More or less 487 of these supervisory and technical staff employees are signatory members of the private respondent PICOP-Bislig Supervisory and Technical Staff Employees Union (PBSTSEU).[7] On August 9, 1989. PBSTSEU instituted a Petition[8] for Certification Election to determine the sole and exclusive bargaining agent of the supervisory and technical staff employees of PICOP for collective bargaining agreement (CBA) purposes. In a Notice[9] dated August 10, 1989, the initial hearing of the petition was set on August 18, 1989 but it was reset to August 25, 1989, at the instance of PICOP, as it requested a fifteen (15) day period within which to file its comments and/or position paper. But PICOP failed to file any comment or position paper. Meanwhile, private respondents Federation of Free Workers (FFW) and Associated Labor Union (ALU) filed their respective petitions for intervention. On September 14, 1989, Med-Arbiter Arturo L. Gamolo issued an Order[10] granting the petitions for interventions of the FFW and ALU. Another Order[11] issued on the same day set the holding of a certification election among PICOP's supervisory and technical staff employees in Tabon, Bislig, Surigao del Sur, with four (4) choices, namely: (1) PBSTSEU; (2) FFW; (3) ALU; and (4) no union. Nex old On September 21, 1989, PICOP appealed[12] the Order which set the holding of the certification election contending that the Med-Arbiter committed grave abuse of discretion in deciding the case without giving PICOP

the opportunity to file its comments/answer, and that PBSTSEU had no personality to file the petition for certification election. After PBSTSEU filed its Comments[13] to petitioner's appeal, the Secretary of the Labor[14] issued a Resolution[15] dated November 17, 1989 which upheld the Med-Arbiter's Order dated September 17, 1989, with modification allowing the supervising and staff employees in Cebu, Davao and Iligan City to participate in the certification election. During the pre-election conference on January 18, 1990, PICOP questioned and objected to the inclusion of some section heads and supervisors in the list of voters whose positions it averred were reclassified as managerial employees in the light of the reorganization effected by it.[16] Under the Revised Organizational Structure of the PICOP, the company was divided into four (4) main business groups, namely: Paper Products Business, Timber Products Business, Forest Resource Business and Support Services Business. A vicepresident or assistant vice-president heads each of these business groups. A division manager heads the divisions comprising each business group. A department manager heads the departments comprising each division. Section heads and supervisors, now called section managers and unit managers, head the sections and independent units, respectively, comprising each department.[17] PICOP advanced the view that considering the alleged present authority of these section managers and unit managers to hire and fire, they are classified as managerial employees, and hence, ineligible to form or join any labor organization.[18] Mani kx

Following the submission by the parties of their respective position papers[19] and evidence[20] on this issue, Med-Arbiter Phibun D. Pura issued an Order[21] dated March 27, 1990, holding that supervisors and section heads of the petitioner are managerial employees and therefore excluded from the list of voters for purposes of certification election. PBSTSEU appealed[22] the Order of the Med-Arbiter to the Office of the Secretary, DOLE. ALU likewise appealed.[23] PICOP submitted evidence militating against the appeal.[24] Public respondent Bienvenido E. Laguesma, acting as the then Undersecretary of Labor, issued the assailed Order[25] dated April 17, 1991 setting aside the Order dated March 27, 1990 of the MedArbiter and declaring that the subject supervisors and section heads are supervisory employees eligible to vote in the certification election. PICOP sought[26] reconsideration of the Order dated April 7, 1991. However, public respondent in his Order[27] dated August 7, 1991 denied PICOP's motion for reconsideration. Hence, this petition. PICOP anchors its petition on two (2) grounds, to wit: Maniks I. THE PUBLIC RESPONDENT HONORABLE BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF LABOR AND EMPLOYMENT, IN A CAPRICIOUS,

ARBITRARY AND WHIMSICAL EXERCISE OF POWER ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION, TANTAMOUNT TO ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE DENIED YOUR PETITIONER'S PLEA TO PRESENT ADDITIONAL EVIDENCE TO PROVE THAT SOME OF ITS MANAGERIAL EMPLOYEES ARE DISQUALIFIED FROM JOINING OR FORMING A UNION REPRESENTED BY CO-RESPONDENT PBSTSEU, IN VIEW OF A SUPERVENING EVENT BROUGHT ABOUT BY THE CHANGES IN THE ORGANIZATIONAL STRUCTURE OF YOUR PETITIONER WHICH WAS FULLY IMPLEMENTED IN JANUARY 1991 AFTER THE CASE WAS ELEVATED ON APPEAL AND SUBMITTED FOR DECISION. II. THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA, ALSO ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION, TANTAMOUNT TO ARBITRARILY ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE TOTALLY DISREGARDED THE DOCUMENTARY EVIDENCE SO FAR SUBMITTED BY YOUR PETITIONER AND RELIED MAINLY ON THE UNSUBSTANTIATED CLAIM AND MERE ALLEGATIONS OF PRIVATE RESPONDENT, PBSTSEU, THAT THE REORGANIZATION OF YOUR PETITIONER

WAS A SHAM AND CALCULATED MERELY TO FRUSTRATE THE UNIONIZATION OF YOUR PETITIONER'S SUPERVISORY PERSONNEL; AND SOLELY ON THIS BASIS, DENIED YOUR PETITIONER'S URGENT MOTION FOR RECONSIDERATION.[28] Manikan PICOP's main thesis is that the positions Section Heads and Supervisors, who have been designated as Section Managers and Unit Managers, as the case may be, were converted to managerial employees under the decentralization and reorganization program it implemented in 1989. Being managerial employees, with alleged authority to hire and fire employees, they are ineligible for union membership under Article 245[29] of the Labor Code. Furthermore, PICOP contends that no malice should be imputed against it for implementing its decentralization program only after the petition for certification election was filed inasmuch as the same is a valid exercise of its management prerogative, and that said program has long been in the drawing boards of the company, which was realized only in 1989 and fully implemented in 1991. PICOP emphatically stresses that it could not have conceptualized the decentralization program only for the purpose of "thwarting the right of the concerned employees to self-organization." The petition, not being meritorious, must fail and the same should be as it is hereby dismissed. First. In United Pepsi-Co/a Supervisory Union (UPSU) v. Laguesma,[30] we had occasion to elucidate on the term "managerial employees." Managerial employees are ranked as Top Managers, Middle Managers and First

Line Managers. Top and Middle Managers have the authority to devise, implement and control strategic and operational policies while the task of First-Line Managers is simply to ensure that such policies are carried out by the rank-and- file employees of an organization. Under this distinction, "managerial employees" therefore fall in two (2) categories, namely, the "managers" per se composed of Top and Middle Managers, and the "supervisors" composed of First-Line Managers.[31] Thus, the mere fact that an employee is designated manager" does not ipso facto make him one. Designation should be reconciled with the actual job description of the employee,[32] for it is the job description that determines the nature of employment.[33] Oldmis o In the petition before us, a thorough dissection of the job description[34] of the concerned supervisory employees and section heads indisputably show that they are not actually managerial but only supervisory employees since they do not lay down company policies. PICOP's contention that the subject section heads and unit managers exercise the authority to hire and fire[35] is ambiguous and quite misleading for the reason that any authority they exercise is not supreme but merely advisory in character. Theirs is not a final determination of the company policies inasmuch as any action taken by them on matters relative to hiring, promotion, transfer, suspension and termination of employees is still subject to confirmation and approval by their respective superior.[36] Thus, where such power, which is in effect recommendatory in character, is subject to evaluation, review and final action by the department heads and other higher executives of the company, the same, although present, is not effective

and not an exercise of independent judgment as required by law.[37] Second. No denial of due process can be ascribed to public respondent Undersecretary Laguesma for the latter's denial to allow PICOP to present additional evidence on the implementation of its program inasmuch as in the appeal before the said public respondent, PICOP even then had already submitted voluminous supporting documents.[38] The record of the case is replete with position papers and exhibits that dealt with the main thesis it relied upon. What the law prohibits is the lack of opportunity to be heard.[39] PICOP has long harped on its contentions and these were dealt upon and resolved in detail by public respondent Laguesma. We see no reason or justification to deviate from his assailed resolutions for the reason that law and jurisprudence aptly support them. Finally, considering all the foregoing, the fact that PICOP voiced out its objection to the holding of certification election, despite numerous opportunities to ventilate the same, only after respondent Undersecretary of Labor affirmed the holding thereof, simply bolstered the public respondents' conclusion that PICOP raised the issue merely to prevent and thwart the concerned section heads and supervisory employees from exercising a right granted them by law. Needless to stress, no obstacle must be placed to the holding of certification elections, for it is a statutory policy that should not be circumvented.[40] WHEREFORE, the petition is hereby DISMISSED, and the Resolution and Order of public respondent Bienvenido E. Laguesma dated April 17, 1991 and

August 17, 1991, respectively, finding the subject supervisors and section heads as supervisory employees eligible to vote in the certification election are AFFIRMED. Costs against petitioner. SO ORDERED. Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur. SECOND DIVISION G.R. No. 116194. February 2, 2000 SUGBUANON RURAL BANK, INC., Petitioner, v. HON. UNDERSECRETARY BIENVENIDO E. LAGUESMA, DEPARTMENT OF LABOR AND EMPLOYMENT, MEDARBITER ACHILLES MANIT, DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL OFFICE NO. 7, CEBU CITY, AND SUGBUANON RURAL BANK, INC. - ASSOCIATION OF PROFESSIONAL, SUPERVISORY, OFFICE, AND TECHNICAL EMPLOYEES UNIONTRADE UNIONS CONGRESS OF THE PHILIPPINES,Respondents. DECISION QUISUMBING, J.: In this special civil action for certiorari and prohibition, petitioner seeks the annulment of the April 27, 1994 Resolution of the Department of Labor and Employment, affirming the order of the Med-Arbiter, dated December 9, 1993, which denied petitioner's motion to dismiss respondent union's petition for certification election.

Petitioner Sugbuanon Rural Bank, Inc., (SRBI, for brevity) is a duly-registered banking institution with principal office in Cebu City and a branch in Mandaue City. Private respondent SRBI-Association of Professional, Supervisory, Office, and Technical Employees Union (APSOTEU) is a legitimate labor organization affiliated with the Trade Unions Congress of the Philippines (TUCP). On October 8, 1993, the DOLE Regional Office in Cebu City granted Certificate of Registration No. R0700-9310UR-0064 to APSOTEU- TUCP, hereafter referred to as the union. On October 26, 1993, the union filed a petition for certification election of the supervisory employees of SRBI. It alleged, among others, that: (1) APSOTEU-TUCP was a labor organization duly-registered with the Labor Department; (2) SRBI employed 5 or more supervisory employees; (3) a majority of these employees supported the petition; (4) there was no existing collective bargaining agreement (CBA) between any union and SRBI; and (5) no certification election had been held in SRBI during the past 12 months prior to the petition. On October 28, 1993, the Med-Arbiter gave due course to the petition. The pre-certification election conference between SRBI and APSOTEU- TUCP was set for November 15, 1993. On November 12, 1993, SRBI filed a motion to dismiss the union's petition. It sought to prevent the holding of a certification election on two grounds: First, that the members of APSOTEU-TUCP were in fact managerial or confidential employees. Thus, following the doctrine

in Philips Industrial Development Corporation v. National Labor Relations Commission,[1] they were disqualified from forming,ining, or assisting any labor organization. Petitioner attached theb descriptions of the employees concerned to its motion. Second, the Association of Labor Unions-Trade Unions Congress of the Philippines or ALU-TUCP was representing the union. Since ALUTUCP also sought to represent the rank-and-file employees of SRBI, there was a violation of the principle of separation of unions enunciated in Atlas Lithographic Services, Inc. v. Laguesma.[2] The union filed its opposition to the motion to dismiss on December 1, 1993. It argued that its members were not managerial employees but merely supervisory employees. The members attached their affidavits describing the nature of their respective duties. The union pointed out that Article 245 of the Labor Code expressly allowed supervisory employees to form,in, or assist their own unions. On December 9, 1993, the Med-Arbiter denied petitioner's motion to dismiss. He scheduled the inclusion-exclusion proceedings in preparation for the certification election on December 16, 1993. SRBI appealed the Med-Arbiter's decision to the Secretary of Labor and Employment. The appeal was denied for lack of merit. The certification election was ordered. On June 16, 1994, the Med-Arbiter scheduled the holding of the certification election for June 29, 1994. His order identified the following SRBI personnel as the voting supervisory employees in the election: the

Cashier of the Main office, the Cashier of the Mandaue Branch, the Accountant of the Mandaue Branch, and the Acting Chief of the Loans Department. On June 17, 1994, SRBI filed with the Med-Arbiter an urgent motion to suspend proceedings The Med-Arbiter denied the same on June 21, 1994. SRBI then filed a motion for reconsideration. Two days later, the MedArbiter cancelled the certification election scheduled for June 29, 1994 in order to address the motion for reconsideration. The Med-Arbiter later denied petitioner's motion for reconsideration. SRBI appealed the order of denial to the DOLE Secretary on December 16, 1993. On December 22, 1993, petitioner proceeded to file a petition with the DOLE Regional Office seeking the cancellation of the respondent union's registration. It averred that the APSOTEU-TUCP members were actually managerial employees who were prohibited by law fromining or organizing unions. On April 22, 1994, respondent DOLE Undersecretary denied SRBI's appeal for lack of merit. He ruled that APSOTEU- TUCP was a legitimate labor organization. As such, it was fully entitled to all the rights and privileges granted by law to a legitimate labor organization, including the right to file a petition for certification election. He also held that until and unless a final order is issued canceling APSOTEU- TUCP's registration certificate, it had the legal right to represent its members for collective bargaining purposes. Furthermore, the question of whether the APSOTEUTUCP members should be considered as managerial or

confidential employees should not be addressed in the proceedings involving a petition for certification election but best threshed out in other appropriate proceedings. On May 25, 1994, SRBI moved for reconsideration of the Undersecretary's decision which was denied on July 7, 1994. The Med- Arbiter scheduled the holding of certification elections on August 12, 1994. Hence the instant petition grounded on the following assignments of error: I RESPONDENT UNDERSECRETARY LAGUESMA ACTED WITH GRAVE ABUSE OF DISCRETION AND PALPABLY ERRED: A. IN HOLDING THAT ART. 257 OF THE LABOR CODE REQUIRES THE MED-ARBITER TO CONDUCT A CERTIFICATION ELECTION IN ANY UNORGANIZED ESTABLISHMENT EVEN WHEN THE PETITIONING UNION DOES NOT POSSESS THE QUALIFICATION FOR AN APPROPRIATE BARGAINING AGENT; AND B. IN REFUSING TO ASSUME JURISDICTION OVER THE PETITIONER'S APPEAL AND TO DISMISS THE RESPONDENT UNION'S PETITION FOR CERTIFICATION ELECTION. II RESPONDENT UNDERSECRETARY LAGUESMA ACTED WITH GRAVE ABUSE OF DISCRETION AND PALPABLY

ERRED IN DENYING THE PETITIONER'S APPEAL DESPITE THE FACT THAT: A. THE ALLEGED MEMBERS OF RESPONDENT UNION ARE MANAGERIAL EMPLOYEES WHO ARE LEGALLY DISQUALIFIED FROM JOINING ANY LABOR ORGANIZATION. B. AT THE VERY LEAST, THE ALLEGED MEMBERS OF RESPONDENT UNION ARE OCCUPYING HIGHLY CONFIDENTIAL POSITIONS IN PETITIONER AND, THUS, THE LEGAL DISQUALIFICATION OF MANAGERIAL EMPLOYEES EQUALLY APPLY TO THEM. III IN ANY EVENT, THE CONCLUSIONS REACHED IN THE SUBJECT RESOLUTIONS ARE CONTRARY TO LAW AND ARE DIAMETRICALLY OPPOSED TO RESPONDENT UNION'S RECORDED ADMISSIONS AND REPRESENTATIONS. Considering petitioner's assigned errors, we find two core issues for immediate resolution: (1) Whether or not the members of the respondent union are managerial employees and/or highly-placed confidential employees, hence prohibited by law fromining labor organizations and engaging in union activities? (2) Whether or not the Med-Arbiter may validly order the holding of a certification election upon the filing of a petition for certification election by a registered union, despite the petitioners appeal pending before the DOLE

Secretary against the issuance of the unions registration? The other issues based on the assigned errors could be resolved easily after the core issues are settled. Respecting the first issue, Article 212 (m) of the Labor Code defines the terms "managerial employee" and "supervisory employees" as follows: "Art. 212. Definitionsxxx (m) 'Managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies and/or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book (Italic supplied)." Petitioner submitted detailedb descriptions to support its contention that the union members are managerial employees and/or confidential employees proscribed from engaging in labor activities.3 Petitioner vehemently argues that the functions and responsibilities of the employees involved constitute the "very core of the bank's business, lending of money to clients and borrowers, evaluating their capacity to pay, approving

the loan and its amount, scheduling the terms of repayment, and endorsing delinquent accounts to counsel for collection."4 Hence, they must be deemed managerial employees. Petitioner cites Tabacalera Insurance Co. v. National Labor Relations Commission,[5] and Panday v. National Labor Relations Commission,6 to sustain its submission. In Tabacalera, we sustained the classification of a credit and collection supervisor by management as a managerial/supervisory personnel. But in that case, the credit and collection supervisor "had the power to recommend the hiring and appointment of his subordinates, as well as the power to recommend any promotion and/or increase."7 For this reason he was deemed to be a managerial employee. In the present case, however, petitioner failed to show that the employees in question were vested with similar powers. At best they only had recommendatory powers subject to evaluation, review, and final decision by the bank's management. Theb description forms submitted by petitioner clearly show that the union members in question may not transfer, suspend, lay-off, recall, discharge, assign, or discipline employees. Moreover, the forms also do not show that the Cashiers, Accountants, and Acting Chiefs of the loans Department formulate and execute management policies which are normally expected of management officers. Petitioner's reliance on Panday is equally misplaced. There, we held that a branch accountant is a managerial employee because the said employee had managerial powers, similar to the supervisor in Tabacalera. Their powers included recommending the hiring and appointment of his subordinates, as the power to recommend any promotion and/or increase.8crlwvirtualibrry

Here, we find that that the Cashiers, Accountant, and Acting Chief of the Loans Department of the petitioner did not possess managerial powers and duties. We are, therefore, constrained to conclude that they are not managerial employees. Now may the said bank personnel be deemed confidential employees? Confidential employees are those who (1) assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate management policies [specifically in the field of labor relations].9 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 superior officer; and that officer must handle the prescribed responsibilities relating to labor relations.10crlwvirtualibrry Article 245 of the Labor Code11 does not directly, prohibit confidential employees from engaging in union activities. However, under the doctrine of necessary implication, the disqualification of managerial employees equally applies to confidential employees.12The confidential-employee rule justifies exclusion of confidential employees because in the normal course of their duties they become aware of management policies relating to labor relations.13 It must be stressed, however, that when the employee does not have access to confidential labor relations information, there is no legal prohibition against confidential employees from forming, assisting, orining a union.14crlwvirtualibrry Petitioner contends that it has only 5 officers running its day-to-day affairs. They assist in confidential capacities

and have complete access to the bank's confidential data. They form the core of the bank's management team. Petitioner explains that: "...Specifically: (1) the Head or the Loans Department initially approves the loan applications before they are passed on to the Board for confirmation. As such, no loan application is even considered by the Board and approved by petitioner without his stamp of approval based upon his interview of the applicant and determination of his (applicant's) credit standing and financial capacity. The same holds true with respect to renewals or restructuring of loan accounts. He himself determines what account should be collected, whether extrajudicially or judicially, and settles the problem or complaints of borrowers regarding their accounts; "(2) the Cashier is one of the approving officers and authorized signatories of petitioner. He approves the opening of accounts, withdrawals and encashment, and acceptance of check deposits, He deals with other banks and, in the absence of the regular Manager, manages the entire office or branch and approves disbursements of funds for expenses; and "(3) the Accountant, who heads the Accounting Department, is also one of the authorized signatories of petitioner and, in the absence of the Manager or Cashier, acts as substitute approving officer and assumes the management of the entire office. She handles the financial reports and reviews the debit/credit tickets submitted by the other departments."15crlwvirtualibrry

Petitioner's explanation, however, does not state who among the employees has access to information specifically relating to its labor relations policies. Even Cashier Patricia Maluya, who serves as the secretary of the bank's Board of Directors may not be so classified. True, the board of directors is responsible for corporate policies, the exercise of corporate powers, and the general management of the business and affairs of the corporation. As secretary of the bank's governing body, Patricia Maluya serves the bank's management, but could not be deemed to have access to confidential information specifically relating to SRBI's labor relations policies, absent a clear showing on this matter. Thus, while petitioner's explanation confirms the regular duties of the concerned employees, it shows nothing about any duties specifically connected to labor relations. As to the second issue. One of the rights of a legitimate labor organization under Article 242(b) of the Labor Code is the right to be certified as the exclusive representative of all employees in an appropriate bargaining unit for purposes of collective bargaining. Having complied with the requirements of Art. 234, it is our view that respondent union is a legitimate labor union. Article 257 of the Labor Code mandates that a certification election shall automatically be conducted by the Med-Arbiter upon the filing of a petition by a legitimate labor organization.16 Nothing is said therein that prohibits such automatic conduct of the certification election if the management appeals on the issue of the validity of the union's registration. On this score, petitioner's appeal was correctly dismissed. Petitioner argues that giving due course to respondent union's petition for certification election would violate

the separation of unions doctrine.17 Note that the petition was filed by APSOTEU- TUCP, a legitimate labor organization. It was not, filed by ALU. Nor was it filed by TUCP, which is a national labor federation of with which respondent union is affiliated. Petitioner says that respondent union is a mere alter ego of ALU. The records show nothing to this effect. What the records instead reveal is that respondent union was initially assisted by ALU during its preliminary stages of organization. A local union maintains its separate personality despite affiliation with a larger national federation.18 Petitioner alleges that ALU seeks to represent both respondent union and the rank-and-file union. Again, we find nothing in the records to support this bare assertion. The law frowns on a union where the membership is composed of both supervisors and rank-and-file employees, for fear that conflicts of interest may arise in the areas of discipline, collective bargaining, and strikes.19 However, in the present case, none of the members of the respondent union came from the rankand-file employees of the bank. Taking into account the circumstances in this case, it is our view that respondent Undersecretary committed no reversible error nor grave abuse of discretion when he found the order of the Med-Arbiter scheduling a certification election in order. The list of employees eligible to vote in said certification election was also found in order, for none was specifically disqualified from membership. WHEREFORE, the instant petition is hereby DISMISSED. No pronouncement as to costs.

SO ORDERED. Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.

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. The antecedent facts are undisputed: On October 5, 1990, petitioner union filed before the Department of Labor and Employment (DOLE) a Petition for District Certification or 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 among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis as one bargaining unit. On January 18, 1991, respondent San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing out, among others, the MedArbiters error in grouping together all three (3) separate plants, Otis, Cabuyao and San Fernando, into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature. On July 23, 1991, the public respondent, Undersecretary Laguesma, granted respondent companys Appeal and ordered the remand of the case to the Med-Arbiter of origin for determination of the true classification of each of the employees sought to be included in the appropriate bargaining unit. Upon petitioner-unions motion dated August 7, 1991, Undersecretary Laguesma granted the

[G.R. No. 110399. August 15, 1997]

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION AND ERNESTO L. PONCE, President, petitioners, vs. HONARABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY OF LABOR AND EMPLOYMENT, HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS MEDARBITER AND SAN MIGUEL CORPORATION, respondents. DECISION 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, dated March 11, 1993, in Case No. OS MA A-2-70-91[1] entitled In Re: Petition for Certification Election Among the Supervisory and Exempt Employees of the San Miguel Corporation Magnolia Poultry Plants of Cabuyao, San Fernando and Otis, San Miguel Corporation Supervisors and Exempt Union, Petitioner. The Order excluded the employees

reconsideration prayed for on September 3, 1991 and 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 at Cabuyao, San Fernando and Otis. On September 21, 1991, respondent company, San Miguel Corporation filed a Motion for Reconsideration with Motion to suspend proceedings. On March 11, 1993, an Order was issued by the public respondent granting the Motion, citing the doctrine enunciated in Philips Industrial Development, Inc. v. NLRC[2] case. Said Order reads in part: x x x Confidential employees, like managerial employees, are not allowed to form, join or assist a labor union for purposes of collective bargaining. In this case, S3 and S4 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 courts ruling. Consequently, they are not allowed to participate in the certification election. WHEREFORE, the motion is hereby granted and the Decision of this Office dated 03 September 1991 is hereby modified to the extent that employees under supervisory levels 3 and 4 (S3 and S4) and the so-called exempt employees are not allowed to join the proposed bargaining unit and are therefore excluded from those who could participate in the certification election.[3] Hence this petition.

For resolution in this case are the following 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. If they are not confidential employees, do the employees of the three plants constitute an appropriate single bargaining unit. On the first issue, this Court rules that said employees do not fall within the term confidential employees who may be prohibited from joining a union. There is no question that the said employees, supervisors and the exempt employees, are not vested with the powers and prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss employees. They are, therefore, not qualified to be classified as managerial employees who, under Article 245[4] of the Labor Code, are not eligible to join, assist or form any labor organization. In the very same provision, they are not allowed membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. The only question that need be addressed is whether these employees are properly classified as confidential employees or not. 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.[5]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

employees and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations.[6] 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. The broad rationale behind this rule is that employees should not be placed in a position involving a potential conflict of interests.[7]Management should not be required to handle labor relations matters through employees who are represented by the union with the company is required to deal and who in the normal performance of their duties may obtain advance information of the companys position with regard to contract negotiations, the disposition of grievances, or other labor relations matters.[8] There have been ample precedents in this regard, thus in Bulletin Publishing Company v. Hon. Augusto Sanchez,[9] the Court held that if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interest. The Union can also become company-dominated with the presence of managerial employees in Union membership. The same rationale was applied to confidential employees in Golden Farms, Inc. v. Ferrer-Calleja[10] and in the more recent case of Philips Industrial Development, Inc. v. NLRC[11] which held that confidential employees, by the very nature of their functions, assist and act in a confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. Therefore, the rationale behind the ineligibility of managerial employees to form,

assist or join a labor union was held equally applicable to them.[12] An important element of the confidential employee rule is the employees need to use labor relations information. Thus, in determining the confidentiality of certain employees, a key questions frequently considered is the employees necessary access to confidential labor relations information.[13] It is the contention of respondent corporation that Supervisory employees 3 and 4 and the exempt employees come within the meaning of the term confidential employees primarily because they answered in the affirmative when asked Do you handle confidential data or documents? in the Position Questionnaires submitted by the Union.[14] In the same questionnaire, however, it was also stated that the confidential information handled by questioned employees relate to product formulation, product standards and product specification which by no means relate to labor relations.[15] Granting arguendo that an employee has access to confidential labor relations information but such is merely incidental to his duties and knowledge thereof is not necessary in the performance of such duties, said access does not render the employee a confidential employee.[16] If access to confidential labor relations information is to be a factor in the determination of an employees confidential status, such information must relate to the employers labor relations policies. Thus, an employee of a labor union, or of a management association, must have access to confidential labor information with respect to his employer, the union, or the association, to be regarded a confidential employee, and knowledge of labor relations information pertaining

to the companies with which the union deals, or which the association represents, will not clause an employee to be excluded from the bargaining unit representing employees of the union or association.[17] Access to information which is regarded by the employer to be confidential from the business standpoint, such as financial information[18] or technical trade secrets, will not render an employee a confidential employee.[19] Herein listed are the functions of supervisors 3 and higher: 1. To undertake decisions to discontinue/temporarily stop shift operations when situations require. 2. To effectively oversee the quality control function at the processing lines in the storage of chicken and other products. 3. To administer efficient system of evaluation of products in the outlets. 4. To be directly responsible for the recall, holding and rejection of direct manufacturing materials. 5. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant.[20] It is evident that whatever confidential data the questioned employees may handle will have to relate to their functions. From the foregoing functions, it can be gleaned that the confidential information said employees have access to concern the employers internal business operations. As held in Westinghouse Electric Corporation v. National Labor Relations Board,[21] an employee may not be excluded from appropriate

bargaining unit merely because he has access to confidential information concerning employers internal business operations and which is not related to the field of labor relations. It must be borne in mind that Section 3 of Article XIII of the 1987 Constitution mandates the State to guarantee to all workers the right to selforganization. Hence, confidential employees who may be excluded from bargaining unit must be strictly defined so as not to needlessly deprive many employees of their right bargain collectively through representatives of their choosing.[22] 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 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.[23] In this connection, the issue of whether the employees of San Miguel Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis

constitute a single bargaining unit needs to be threshed out. 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 onecompany, 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.[24] 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.[25] It is readily seen that the employees in the instant case have community or mutuality of interest, which is the standard in determining the proper constituency of a collective bargaining unit.[26]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.

In light of these considerations, the Solicitor General has opined that separate bargaining units in the three different plants of the division will fragmentize the employees of the said division, thus greatly diminishing their bargaining leverage. Any concerted activity held against the private respondent for a labor grievance in one bargaining unit will, in all probability, not create much impact on the operations of the private respondent. The two other plants still in operation can well step up their production and make up for the slack caused by the bargaining unit engaged in the concerted activity. This situation will clearly frustrate the provisions of the Labor Code and the Mandate of the Constitution.[27] The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is immaterial. Geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed as demonstrated in UP v. Calleja-Ferrer where all nonacademic rank and file employees of the University of the Philippines inDiliman, Quezon City, Padre Faura, Manila, Los Baos, Laguna and the Visayas were allowed to participate in a certification election. We rule that the distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede the operations of a single bargaining representative. WHEREFORE, the assailed Order of March 11, 1993 is hereby SET ASIDE and the Order of the MedArbiter on December 19, 1990 is REINSTATED under which a certification election among the supervisors (level 1 to 4) and exempt employees of the San Miguel

Corporation Magnolia Poultry Products Plants of Cabuyao, San Fernando, and Otis as one bargaining unit is ordered conducted. SO ORDERED. Regalado, (Chairman), Puno, Mendoza, and Torres, Jr., JJ., concur. EN BANC

This petition seeks to review the Resolution of respondent Secretary of Labor and Employment Franklin M. Drilon dated November 3, 1989 which affirmed an Order of Med-Arbiter Renato P. Parungo (Case No. NCR-O-D-M-1-70), directing the holding of a certification election among certain employees of petitioner Manila Electric Company (hereafter "MERALCO") as well as the Order dated January 16, 1990 which denied the Motion for Reconsideration of MERALCO. The facts are as follows:

G.R. No. 91902 May 20, 1991 MANILA ELECTRIC COMPANY, petitioner, vs. THE HON. SECRETARY OF LABOR AND EMPLOYMENT, STAFF AND TECHNICAL EMPLOYEES ASSOCIATION OF MERALCO, and FIRST LINE ASSOCIATION OF MERALCO SUPERVISORY EMPLOYEES,respondents. Rolando R. Arbues, Atilano S. Guevarra, Jr. and Gil S. San Diego for petitioner. The Solicitor General for public respondent. Felipe Gojar for STEAM-PCWF. Wakay & Wakay Legal Services for First Line Association of Meralco Supervisory Employees.

On November 22, 1988, the Staff and Technical Employees Association of MERALCO (hereafter "STEAMPCWF") a labor organization of staff and technical employees of MERALCO, filed a petition for certification election, seeking to represent regular employees of MERALCO who are: (a) non-managerial employees with Pay Grades VII and above; (b) non-managerial employees in the Patrol Division, Treasury Security Services Section, Secretaries who are automatically removed from the bargaining unit; and (c) employees within the rank and file unit who are automatically disqualified from becoming union members of any organization within the same bargaining unit. Among others, the petition alleged that "while there exists a duly-organized union for rank and file employees in Pay Grade I-VI, which is the MERALCO Employees and Worker's Association (MEWA) which holds a valid CBA for the rank and file employees, 1 there is no other labor organization except STEAM-PCWF claiming to represent the MERALCO employees.

MEDIALDEA, J.:p

The petition was premised on the exclusion/disqualification of certain MERALCO employees pursuant to Art. I, Secs. 2 and 3 of the existing MEWA CBA as follows: ARTICLE I SCOPE xxx xxx xxx Sec. 2. Excluded from the appropriate bargaining unit and therefore outside the scope of this Agreement are: (a) Employees in Patrol Division;

and shall desist from further engaging in union activity of any kind. Sec. 3. Regular rank-and-file employees in the organization elements herein below listed shall be covered within the bargaining unit, but shall be automatically disqualified from becoming union members: 1. Office of the Corporate Secretary 2. Corporate Staff Services Department 3. Managerial Payroll Office 4. Legal Service Department

(b) Employees in Treasury Security Services Section; (c) Managerial Employees; and (d) Secretaries. Any member of the Union who may now or hereafter be assigned or transferred to Patrol Division or Treasury Security Services Section, or becomes Managerial Employee or a Secretary, shall be considered automatically removed from the bargaining unit and excluded from the coverage of this agreement. He shall thereby likewise be deemed automatically to have ceased to be member of the union,

5. Labor Relations Division 6. Personnel Administration Division 7. Manpower Planning & Research Division 8. Computer Services Department 9. Financial Planning & Control Department 10. Treasury Department, except Cash Section 11. General Accounting Section xxx xxx xxx

(p. 19, Rollo) MERALCO moved for the dismissal of the petition on the following grounds: I The employees sought to be represented by petitioner are either 1) managerial who are prohibited by law from forming or joining supervisory union; 2) security services personnel who are prohibited from joining or assisting the rank-and-file union; 3) secretaries who do not consent to the petitioner's representation and whom petitioner can not represent; and 4) rankand-file employees represented by the certified or duly recognized bargaining representative of the only rank-and-file bargaining unit in the company, the Meralco Employees Workers Association (MEWA), in accordance with the existing Collective Bargaining Agreement with the latter. II The petition for certification election will disturb the administration of the existing Collective Bargaining Agreement in violation of Art. 232 of the Labor Code. III

The petition itself shows that it is not supported by the written consent of at least twenty percent (20%) of the alleged 2,500 employees sought to be represented. (Resolution, Sec. of Labor, pp. 223224, Rollo) Before Med-Arbiter R. Parungo, MERALCO contended that employees from Pay Grades VII and above are classified as managerial employees who, under the law, are prohibited from forming, joining or assisting a labor organization of the rank and file. As regards those in the Patrol Division and Treasury Security Service Section, MERALCO maintains that since these employees are tasked with providing security to the company, they are not eligible to join the rank and file bargaining unit, pursuant to Sec. 2(c), Rule V, Book V of the then Implementing Rules and Regulations of the Labor Code (1988) which reads as follows: Sec. 2. Who may file petition. The employer or any legitimate labor organization may file the petition. The petition, when filed by a legitimate labor organization, shall contain, among others: xxx xxx xxx (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 security guards (As amended by Sec. 6, Implementing Rules of EO 111) xxx xxx xxx (p. 111, Labor Code, 1988 Ed.) As regards those rank and file employees enumerated in Sec. 3, Art. I, MERALCO contends that since they are already beneficiaries of the MEWA-CBA, they may not be treated as a separate and distinct appropriate bargaining unit. MERALCO raised the same argument with respect to employees sought to be represented by STEAM-PCWF, claiming that these were already covered by the MEWACBA. On March 15, 1989, the Med-Arbiter ruled that having been excluded from the existing Collective Bargaining Agreement for rank and file employees, these employees have the right to form a union of their own, except those employees performing managerial functions. With respect to those employees who had resented their alleged involuntary membership in the existing CBA, the Med-Arbiter stated that the holding of a certification election would allow them to fully translate their sentiment on the matter, and thus directed the holding of a certification election. The dispositive portion of the Resolution provides as follows: WHEREFORE, premises considered, a certification election is hereby ordered

conducted among the regular rank-and-file employees of MERALCO to wit: 1. Non-managerial employees with Pay Grades VII and above; 2. Non-managerial employees of Patrol Division, Treasury Security Services Section and Secretaries; and 3. Employees prohibited from actively participating as members of the union. within 20 days from receipt hereof, subject to the usual pre-election conference with the following choices: 1. Staff and Technical, Employees Association of MERALCO (STEAM-PCWF); 2. No Union. SO ORDERED. (p. 222, Rollo) On April 4, 1989, MERALCO appealed, contending that "until such time that a judicial finding is made to the effect that they are not managerial employee, STEAMPCWF cannot represent employees from Pay Grades VII and above, additionally reiterating the same reasons they had advanced for disqualifying respondent STEAMPCWF. On April 7, 1989, MEWA filed an appeal-in-intervention, submitting as follows:

A. The Order of the Med-Arbiter is null and void for being in violation of Article 245 of the Labor Code; B. The Order of the Med-Arbiter violates Article 232 of the Labor Code; and C. The Order is invalid because the bargaining unit it delineated is not an appropriated (sic) bargaining unit. On May 4, 1989, STEAM-PCWF opposed the appeal-inintervention. With the enactment of RA 6715 and the rules and regulations implementing the same, STEAM-PCWF renounced its representation of the employees in Patrol Division, Treasury Security Services Section and rankand-file employees in Pay Grades I-VI. On September 13, 1989, the First Line Association of Meralco Supervisory Employees. (hereafter FLAMES) filed a similar petition (NCR-OD-M-9-731-89) seeking to represent those employees with Pay Grades VII to XIV, since "there is no other supervisory union at MERALCO." (p. 266,Rollo). The petition was consolidated with that of STEAM-PCWF. On November 3, 1989, the Secretary of Labor affirmed with modification, the assailed order of the Med-Arbiter, disposing as follows:

WHEREFORE, premises considered, the Order appealed from is hereby affirmed but modified as far as the employees covered by Section 3, Article I of the exist CBA in the Company are concerned. Said employees shall remain in the unit of the rank-and-file already existing and may exercise their right to self organization as above enunciated. Further, the First Line Association of Meralco Supervisory Employees (FLAMES) is included as among the choices in the certification election. Let, therefore, the pertinent records of the case be immediately forwarded to the Office of origin for the conduct of the certification election. SO ORDERED. (p. 7, Rollo) MERALCO's motion for reconsideration was denied on January 16, 1990. On February 9, 1990, MERALCO filed this petition, premised on the following ground: RESPONDENT SECRETARY ACTED WITH GRAVE ABUSE OF DISCRETION AND/OR IN EXCESS OF JURISDICTION AMOUNTING TO LACK OF JURISDICTION IN RULING THAT:

I. ANOTHER RANK-AND-FILE BARGAINING UNIT CAN BE ESTABLISHED INDEPENDENT, DISTINCT AND SEPARATE FROM THE EXISTING RANK-AND-FILE BARGAINING UNIT. II. THE EMPLOYEES FROM PAY GRADES VII AND ABOVE ARE RANK-AND-FILE EMPLOYEES. III. THE SECURITY GUARDS OR PERSONNEL MAY BE LUMPED TOGETHER WITH THE RANK-AND-FILE UNION AND/OR THE SUPERVISORY UNION. (p. 8, Rollo) On February 26, 1990, We issued a temporary restraining order (TRO) against the implementation of the disputed resolution. In its petition, MERALCO has relented and recognized respondents STEAM-PCWF and FLAMES' desired representation of supervisory employees from Grades VII up. However, it believes that all that the Secretary of Labor has to do is to establish a demarcation line between supervisory and managerial rank, and not to classify outright the group of employees represented by STEAM-PCWF and FLAMES as rank and file employees. In questioning the Secretary of Labor's directive allowing security guards (Treasury/Patrol Services Section) to be represented by respondents, MERALCO contends that this contravenes the provisions of the recently passed RA 6715 and its implementing rules (specifically par. 2, Sec. 1, Rule II, Book V) which disqualifies supervisory

employees and security guards from membership in a labor organization of the rank and file (p. 11, Rollo). The Secretary of Labor's Resolution was obviously premised on the provisions of Art. 212, then par. (k), of the 1988 Labor Code defining "managerial" and "rank and file" employees, the law then in force when the complaint was filed. At the time, only two groups of employees were recognized, the managerial and rank and file. This explains the absence of evidence on job descriptions on who would be classified managerial employees. It is perhaps also for this reason why the Secretary of Labor limited his classification of the Meralco employees belonging to Pay Grades VII and up, to only two groups, the managerial and rank and file. However, pursuant to the Department of Labor's goal of strenghthening the constitutional right of workers to self-organization, RA 6715 was subsequently passed which reorganized the employee-ranks by including a third group, or the supervisory employees, and laying down the distinction between supervisory employees and those of managerial ranks in Art. 212, renumbered par. [m], depending on whether the employee concerned has the power to lay down and execute management policies, in the case of managerial employees, or merely to recommend them, in case of supervisory employees. In this petition, MERALCO has admitted that the employees belonging to Pay Grades VII and up are supervisory (p. 10, Rollo). The records also show that STEAM-PCWF had "renounced its representation of the employees in Patrol Division, Treasury Security Service Section and rank and file employees in Pay Grades I-VI" (p. 6, Rollo); while FLAMES, on the other hand,

had limited its representation to employees belonging to Pay Grades VII-XIV,generally accepted as supervisory employees, as follows: It must be emphasized that private respondent First Line Association of Meralco Supervisory Employees seeks to represent only the Supervisory Employees with Pay Grades VII to XIV. Supervisory Employees with Pay Grades VII to XIV are not managerial employees. In fact the petition itself of petitioner Manila Electric Company on page 9, paragraph 3 of the petition stated as follows, to wit: There was no need for petitioner to prove that these employees are not rank-andfile. As adverted to above, the private respondents admit that these are not the rankand-file but the supervisory employees, whom they seek to represent. What needs to be established is the rank where supervisory ends and managerial begins. and First Line Association of Meralco Supervisory Employees herein states that Pay Grades VII to XIV are not managerial employees. In fact, although employees with Pay Grade XV carry the Rank of Department Managers, these employees

only enjoys (sic) the Rank Manager but their recommendatory powers are subject to evaluation, review and final action by the department heads and other higher executives of the company. (FLAMES' Memorandum, p. 305, Rollo) Based on the foregoing, it is clear that the employees from Pay Grades VII and up have been recognized and accepted as supervisory. On the other hand, those employees who have been automatically disqualified have been directed by the Secretary of Labor to remain in the existing labor organization for the rank and file, (the condition in the CBA deemed as not having been written into the contract, as unduly restrictive of an employee's exercise of the right to self-organization). We shall discuss the rights of the excluded employees (or those covered by Sec. 2, Art. I, MEWA-CBA later. Anent the instant petition therefore, STEAM-PCWF, and FLAMES would therefore represent supervisory employees only. In this regard, the authority given by the Secretary of Labor for the establishment of two labor organizations for the rank and file will have to be disregarded since We hereby uphold certification elections only for supervisory employees from Pay Grade VII and up, with STEAM-PCWF and FLAMES as choices. As to the alleged failure of the Secretary of Labor to establish a demarcation line for purposes of segregating the supervisory from the managerial employees, the required parameter is really not necessary since the law itself, Art. 212-m, (as amended by Sec. 4 of RA 6715) has already laid down the corresponding guidelines:

Art. 212. Definitions. . . . (m) "Managerial employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of to Book. In his resolution, the Secretary of Labor further elaborated: . . . Thus, the determinative factor in classifying an employee as managerial, supervisory or rank-and-file is the nature of the work of the employee concerned. In National Waterworks and Sewerage Authority vs. National Waterworks and Sewerage Authority Consolidated Unions (11 SCRA 766) the Supreme Court had the occasion to come out with an enlightening dissertation of the nature of the work of a managerial employees as follows:

. . . that the employee's primary duty consists of the management of the establishment or of a customarily recognized department or subdivision thereof, that he customarily and regularly directs the work of other employees therein, that he has the authority to hire or discharge other employees or that his suggestions and recommendations as to the hiring and discharging and or to the advancement and promotion or any other change of status of other employees are given particular weight, that he customarily and regularly exercises discretionary powers . . . (56 CJS, pp. 666668. (p. 226, Rollo) We shall now discuss the rights of the security guards to self-organize. MERALCO has questioned the legality of allowing them to join either the rank and file or the supervisory union, claiming that this is a violation of par. 2, Sec. 1, Rule II, Book V of the Implementing Rules of RA 6715, which states as follows: Sec 1. Who may join unions. . . . xxx xxx xxx

Supervisory employees and security guards 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; . .. xxx xxx xxx

(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; xxx xxx xxx

(emphasis ours) Paragraph 2, Sec. 1, Rule II, Book V, is similar to Sec. 2 (c), Rule V, also of Book V of the implementing rules of RA 6715: Rule V. REPRESENTATION CASES AND INTERNAL-UNION CONFLICTS Sec. 1. . . . 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: (a) . . . (b) . . .

(emphasis ours) Both rules, barring security guards from joining a rank and file organization, appear to have been carried over from the old rules which implemented then Art. 245 of the Labor Code, and which provided thus: Art. 245. Ineligibility of security personnel to join any labor organization.Security guards and other personnel employed for the protection and security of the person, properties and premises of the employer shall not be eligible for membership in any labor organization. On December 24, 1986, Pres. Corazon C. Aquino issued E.O. No. 111 which eliminated the above-cited provision on the disqualification of security guards. What was retained was the disqualification of managerial employees, renumbered as Art. 245 (previously Art. 246), as follows: Art. 245. Ineligibility of managerial employees to joint any labor organization.

Managerial employees are not eligible to join, assist or form any labor organization. With the elimination, security guards were thus free to join a rank and file organization. On March 2, 1989, the present Congress passed RA 6715. 2 Section 18 thereof amended Art. 245, to read as follows: Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. Managerial employees are not eligible to join, assist or form any labor organization.Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist, or form separate labor organizations of their own. (emphasis ours) As will be noted, the second sentence of Art. 245 embodies an amendment disqualifying supervisory employeesfrom membership in a labor organization of the rank-and-file employees. It does not include security guards in the disqualification. The implementing rules of RA 6715, therefore, insofar as they disqualify security guards from joining a rank and file organization are null and void, for being not germane to the object and purposes of EO 111 and RA 6715 upon which such rules purportedly derive statutory moorings. In Shell Philippines, Inc. vs. Central Bank, G.R. No. 51353, June 27, 1988, 162 SCRA 628, We stated:

The rule-making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it has been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. Rules that subvert the statute cannot be sanctioned. (citing University of Sto. Tomas vs. Board of Tax Appeals, 93 Phil. 376). While therefore under the old rules, security guards were barred from joining a labor organization of the rank and file, under RA 6715, they may now freely join a labor organization of the rank and file or that of the supervisory union, depending on their rank. By accommodating supervisory employees, the Secretary of Labor must likewise apply the provisions of RA 6715 to security guards by favorably allowing them free access to a labor organization, whether rank and file or supervisory, in recognition of their constitutional right to self-organization. We are aware however of possible consequences in the implementation of the law in allowing security personnel to join labor unions within the company they serve. The law is apt to produce divided loyalties in the faithful performance of their duties. Economic reasons would present the employees concerned with the temptation to subordinate their duties to the allegiance they owe the union of which they are members, aware as they are that it is usually union action that obtains for them increased pecuniary benefits.

Thus, in the event of a strike declared by their union, security personnel may neglect or outrightly abandon their duties, such as protection of property of their employer and the persons of its officials and employees, the control of access to the employer's premises, and the maintenance of order in the event of emergencies and untoward incidents. It is hoped that the corresponding amendatory and/or suppletory laws be passed by Congress to avoid possible conflict of interest in security personnel. ACCORDINGLY, the petition is hereby DISMISSED. We AFFIRM with modification the Resolution of the Secretary of Labor dated November 3, 1989 upholding an employee's right to self-organization. A certification election is hereby ordered conducted among supervisory employees of MERALCO, belonging to Pay Grades VII and above, using as guideliness an employee's power to either recommend or execute management policies, pursuant to Art. 212 (m), of the Labor Code, as amended by Sec. 4 of RA 6715, with respondents STEAM-PCWF and FLAMES as choices. Employees of the Patrol Division, Treasury Security Services Section and Secretaries may freely join either the labor organization of the rank and file or that of the supervisory union depending on their employee rank. Disqualified employees covered by Sec. 3, Art. I of the MEWA-CBA, shall remain with the existing labor organization of the rank and file, pursuant to the Secretary of Labor's directive: By the parties' own agreement, they find the bargaining unit, which includes the

positions enumerated in Section 3, Article I of their CBA, appropriate for purposes of collective bargaining. The composition of the bargaining unit should be left to the agreement of the parties, and unless there are legal infirmities in such agreement, this Office will not substitute its judgment for that of the parties. Consistent with the story of collective bargaining in the company, the membership of said group of employees in the existing rank-and-file unit should continue, for it will enhance stability in that unit already well establish. However, we cannot approve of the condition set in Section 3, Article I of the CBA that the employees covered are automatically disqualified from becoming union members. The condition unduly restricts the exercise of the right to self organization by the employees in question. It is contrary to law and public policy and, therefore, should be considered to have not been written into the contract. Accordingly, the option to join or not to join the union should be left entirely to the employees themselves. (p. 229, Rollo) The Temporary Restraining Order (TRO) issued on February 26, 1990 is hereby LIFTED. Costs against petitioner. SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,

Sarmiento, Grio-Aquino, Regalado and Davide, Jr., JJ., concur. THIRD DIVISION

G.R. No. 89070 May 18, 1992 BENGUET ELECTRlC COOPERATIVE, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, PETER COSALAN and BOARD OF DIRECTORS OF BENGUET ELECTRIC COOPERATIVE, INC., * respondents. Raymundo W. Celino for respondent Peter Cosalan. Reenan Orate for respondent Board of Directors of BENECO.

advances received by officers and employees of petitioner Beneco in the amount of P129,618.48 had been virtually written off in the books of Beneco. In the Audit Memorandum, the COA directed petitioner Beneco to secure the approval of the National Electrification Administration ("NEA") before writing off or condoning those cash advances, and recommended the adoption of remedial measures. On 12 November 1982, COA issued another Memorandum Audit Memorandum No. 2 addressed to respondent Peter Cosalan, inviting attention to the fact that the audit of per diems and allowances received by officials and members of the Board of Directors of Beneco showed substantial inconsistencies with the directives of the NEA. The Audit Memorandum once again directed the taking of immediate action in conformity with existing NEA regulations. On 19 May 1983, petitioner Beneco received the COA Audit Report on the financial status and operations of Beneco for the eight (8) month period ended 30 September 1982. This Audit Report noted and enumerated irregularities in the utilization of funds amounting to P37 Million released by NEA to Beneco, and recommended that appropriate remedial action be taken. Having been made aware of the serious financial condition of Beneco and what appeared to be mismanagement, respondent Cosalan initiated implementation of the remedial measures recommended by the COA. The respondent members of the Board of Beneco reacted by adopting a series of resolutions

FELICIANO, J.: Private respondent Peter Cosalan was the General Manager of Petitioner Benguet Electric Cooperative, Inc. ("Beneco"), having been elected as such by the Board of Directors of Beneco, with the approval of the National Electrification Administrator, Mr. Pedro Dumol, effective 16 October 1982. On 3 November 1982, respondent Cosalan received Audit Memorandum No. 1 issued by the Commission on Audit ("COA"). This Memorandum noted that cash

during the period from 23 June to 24 July 1984. These Board Resolutions abolished the housing allowance of respondent Cosalan; reduced his salary and his representation and commutable allowances; directed him to hold in abeyance all pending personnel disciplinary actions; and struck his name out as a principal signatory to transactions of petitioner Beneco. During the period from 28 July to 25 September 1984, the respondent Beneco Board members adopted another series of resolutions which resulted in the ouster of respondent Cosalan as General Manager of Beneco and his exclusion from performance of his regular duties as such, as well as the withholding of his salary and allowances. These resolutions were as follows: 1. Resolution No. 91-4 dated 28 July 1984: . . . that the services of Peter M. Cosalan as General Manager of BENECO is terminated upon approval of the National Electrification Administration; 2. Resolution No. 151-84 dated September 15, 1984; . . . that Peter M. Cosalan is hereby suspended from his position as General Manager of the Benguet Electric Cooperative, Inc. (BENECO) effective as of the start of the office hours on September 24,

1984, until a final decision has been reached by the NEA on his dismissal; . . . that GM Cosalan's suspension from office shall remain in full force and effect until such suspension is sooner lifted, revoked or rescinded by the Board of Directors; that all monies due him are withheld until cleared; 3. Resolution No. 176-84 dated September 25, 1984; . . . that Resolution No. 15184, dated September 15, 1984 stands as preventive suspension for GM Peter M. Cosalan. 1 Respondent Cosalan nevertheless continued to work as General Manager of Beneco, in the belief that he could be suspended or removed only by duly authorized officials of NEA, in accordance with provisions of P.D. No, 269, as amended by P.D. No. 1645 (the statute creating the NEA, providing for its capitalization, powers and functions and organization), the loan agreement between NEA and petitioner Beneco 2 and the NEA Memorandum of 2 July 1980. 3 Accordingly, on 5 October and 10 November 1984, respondent Cosalan requested petitioner Beneco to release the compensation due him. Beneco, acting through respondent Board

members, denied the written request of respondent Cosalan. Respondent Cosalan then filed a complaint with the National Labor Relations Commission ("NLRC") on 5 December 1984 against respondent members of the Beneco Board, challenging the legality of the Board resolutions which ordered his suspension and termination from the service and demanding payment of his salaries and allowances. On 18 February 1985, Cosalan amended his complaint to implead petitioner Beneco and respondent Board members, the latter in their respective dual capacities as Directors and as private individuals. In the course of the proceedings before the Labor Arbiter, Cosalan filed a motion for reinstatement which, although opposed by petitioner Beneco, was granted on 23 October 1987 by Labor Arbiter Amado T. Adquilen. Petitioner Beneco complied with the Labor Arbiter's order on 28 October 1987 through Resolution No. 1090. On 5 April 1988, the Labor Arbiter rendered a decision (a) confirming Cosalan's reinstatement; (b) ordering payment to Cosalan of his backwages and allowances by petitioner Beneco and respondent Board members, jointly and severally, for a period of three (3) years without deduction or qualification, amounting to P344,000.00; and (3) ordering the individual Board members to pay, jointly and severally, to Cosalan moral damages of P50,000.00 plus attorney's fees of ten percent (10%) of the wages and allowances awarded him.

Respondent Board members appealed to the NLRC, and there filed a Memorandum on Appeal. Petitioner Beneco did not appeal, but moved to dismiss the appeal filed by respondent Board members and for execution of judgment. By this time, petitioner Beneco had a new set of directors. In a decision dated 21 November 1988, public respondent NLRC modified the award rendered by the Labor Arbiter by declaring that petitioner Beneco alone, and not respondent Board members, was liable for respondent Cosalan's backwages and allowances, and by ruling that there was no legal basis for the award of moral damages and attorney's fees made by the Labor Arbiter. Beneco, through its new set of directors, moved for reconsideration of the NLRC decision, but without success. In the present Petition for Certiorari, Beneco's principal contentions are two-fold: first, that the NLRC had acted with grave abuse of discretion in accepting and giving due course to respondent Board members' appeal although such appeal had been filed out of time; and second, that the NLRC had acted with grave abuse of discretion amounting to lack of jurisdiction in holding petitioner alone liable for payment of the backwages and allowances due to Cosalan and releasing respondent Board members from liability therefor. We consider that petitioner's first contention is meritorious. There is no dispute about the fact that the respondent Beneco Board members received the decision of the labor Arbiter on 21 April 1988.

Accordingly, and because 1 May 1988 was a legal holiday, they had only up to 2 May 1988 within which to perfect their appeal by filing their memorandum on appeal. It is also not disputed that the respondent Board members' memorandum on appeal was posted by registered mail on 3 May 1988 and received by the NLRC the following day. 4 Clearly, the memorandum on appeal was filed out of time. Respondent Board members, however, insist that their Memorandum on Appeal was filed on time because it was delivered for mailing on 1 May 1988 to the Garcia Communications Company, a licensed private letter carrier. The Board members in effect contend that the date of delivery to Garcia Communications was the date of filing of their appeal memorandum. Respondent Board member's contention runs counter to the established rule that transmission through a private carrier or letter-forwarder instead of the Philippine Post Office is not a recognized mode of filing pleadings. 5The established rule is that the date of delivery of pleadings to a private letter-forwarding agency is not to be considered as the date of filing thereof in court, and that in such cases, the date of actual receipt by the court, and not the date of delivery to the private carrier, is deemed the date of filing of that pleading. 6 There, was, therefore, no reason grounded upon substantial justice and the prevention of serious miscarriage of justice that might have justified the NLRC in disregarding the ten-day reglementary period for perfection of an appeal by the respondent Board members. Accordingly, the applicable rule was that the

ten-day reglementary period to perfect an appeal is mandatory and jurisdictional in nature, that failure to file an appeal within the reglementary period renders the assailed decision final and executory and no longer subject to review. 7 The respondent Board members had thus lost their right to appeal from the decision of the Labor Arbiter and the NLRC should have forthwith dismissed their appeal memorandum. There is another and more compelling reason why the respondent Board members' appeal should have been dismissed forthwith: that appeal was quite bereft of merit. Both the Labor Arbiter and the NLRC had found that the indefinite suspension and termination of services imposed by the respondent Board members upon petitioner Cosalan was illegal. That illegality flowed, firstly, from the fact that the suspension of Cosalan was continued long after expiration of the period of thirty (30) days, which is the maximum period of preventive suspension that could be lawfully imposed under Section 4, Rule XIV of the Omnibus Rules Implementing the Labor Code. Secondly, Cosalan had been deprived of procedural due process by the respondent Board members. He was never informed of the charges raised against him and was given no opportunity to meet those charges and present his side of whatever dispute existed; he was kept totally in the dark as to the reason or reasons why he had been suspended and effectively dismissed from the service of Beneco Thirdly, respondent Board members failed to adduce any cause which could reasonably be regarded as lawful cause for the suspension and dismissal of respondent Cosalan from his position as General Manager of Beneco. Cosalan was, in other words, denied due process both procedural and substantive. Fourthly, respondent Board members failed to obtain the prior

approval of the NEA of their suspension now dismissal of Cosalan, which prior approval was required, inter alia, under the subsisting loan agreement between the NEA and Beneco. The requisite NEA approval was subsequently sought by the respondent Board members; no NEA approval was granted. In reversing the decision of the Labor Arbiter declaring petitioner Beneco and respondent Board members solidarily liable for the salary, allowances, damages and attorney's fees awarded to respondent Cosalan, the NLRC said: . . . A perusal of the records show that the members of the Board never acted in their individual capacities. They were acting as a Board passing resolutions affecting their general manager. If these resolutions and resultant acts transgressed the law, to then BENECO for which the Board was acting in behalf should bear responsibility. The records do not disclose that the individual Board members were motivated by malice or bad faith, rather, it reveals an intramural power play gone awry and misapprehension of its own rules and regulations. For this reason, the decision holding the individual board members jointly and severally liable with BENECO for Cosalan's backwages is untenable. The same goes for the award of damages which does not have the proverbial leg to stand on.

The Labor Arbiter below should have heeded his own observation in his decision Respondent BENECO as an artificial person could not have, by itself, done anything to prevent it. But because the former have acted while in office and in the course of their official functions as directors of BENECO, . . . Thus, the decision of the Labor Arbiter should be modified conformably with all the foregoing holding BENECO solely liable for backwages and releasing the appellant board members from any individual liabilities. 8(Emphasis supplied) The applicable general rule is clear enough. The Board members and officers of a corporation who purport to act for and in behalf of the corporation, keep within the lawful scope of their authority in so acting, and act in good faith, do not become liable, whether civilly or otherwise, for the consequences of their acts, Those acts, when they are such a nature and are done under such circumstances, are properly attributed to the corporation alone and no personal liability is incurred by such officers and Board members. 9 The major difficulty with the conclusion reached by the NLRC is that the NLRC clearly overlooked or disregarded the circumstances under which respondent Board members had in fact acted in the instant case. As noted

earlier, the respondent Board members responded to the efforts of Cosalan to take seriously and implement the Audit Memoranda issued by the COA explicitly addressed to the petitioner Beneco, first by stripping Cosalan of the privileges and perquisites attached to his position as General Manager, then by suspending indefinitely and finally dismissing Cosalan from such position. As also noted earlier, respondent Board members offered no suggestion at all of any just or lawful cause that could sustain the suspension and dismissal of Cosalan. They obviously wanted to get rid of Cosalan and so acted, in the words of the NLRC itself, "with indecent haste" in removing him from his position and denying him substantive and procedural due process. Thus, the record showed strong indications that respondent Board members had illegally suspended and dismissed Cosalan precisely because he was trying to remedy the financial irregularities and violations of NEA regulations which the COA had brought to the attention of Beneco. The conclusion reached by the NLRC that "the records do not disclose that the individual Board members were motivated by malice or bad faith" flew in the face of the evidence of record. At the very least, a strong presumption had arisen, which it was incumbent upon respondent Board members to disprove, that they had acted in reprisal against respondent Cosalan and in an effort to suppress knowledge about and remedial measures against the financial irregularities the COA Audits had unearthed. That burden respondent Board members did not discharge. The Solicitor General has urged that respondent Board members may be held liable for damages under the foregoing circumstance under Section 31 of the Corporation Code which reads as follows:

Sec. 31. Liability of directors, trustees or officers. Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors or trustees shall be jointly liable and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons . . . (Emphasis supplied) We agree with the Solicitor General, firstly, that Section 31 of the Corporation Code is applicable in respect of Beneco and other electric cooperatives similarly situated. Section 4 of the Corporation Code renders the provisions of that Code applicable in a supplementary manner to all corporations, including those with special or individual charters so long as those provisions are not inconsistent with such charters. We find no provision in P.D. No. 269, as amended, that would exclude expressly or by necessary implication the applicability of Section 31 of the Corporation Code in respect of members of the boards of directors of electric cooperatives. Indeed, P.D. No. 269 expressly describes these cooperatives as "corporations:" Sec. 15. Organization and Purpose. Cooperative non-stock, non-profit membership corporations may be organized, and electric cooperative corporations heretofore formed or registered under the Philippine nonAgricultural Co-operative Act may as

hereinafter provided be converted, under this Decree for the purpose of supplying, and of promoting and encouraging-the fullest use of, service on an area coverage basis at the lowest cost consistent with sound economy and the prudent management of the business of such corporations. 10(Emphasis supplied) We agree with the Solicitor General, secondly, that respondent Board members were guilty of "gross negligence or bad faith in directing the affairs of the corporation" in enacting the series of resolutions noted earlier indefinitely suspending and dismissing respondent Cosalan from the position of General Manager of Beneco. Respondent Board members, in doing so, acted belong the scope of their authority as such Board members. The dismissal of an officer or employee in bad faith, without lawful cause and without procedural due process, is an act that iscontra legem. It cannot be supposed that members of boards of directors derive any authority to violate the express mandates of law or the clear legal rights of their officers and employees by simply purporting to act for the corporation they control. We believe and so hold, further, that not only are Beneco and respondent Board members properly held solidarily liable for the awards made by the Labor Arbiter, but also that petitioner Beneco which was controlled by and which could act only through respondent Board members, has a right to be reimbursed for any amounts that Beneco may be compelled to pay to respondent Cosalan. Such right of reimbursement is essential if the innocent members of Beneco are not to be penalized for the acts of respondent

Board members which were both done in bad faith and ultra vires. The liability-generating acts here are the personal and individual acts of respondent Board members, and are not properly attributed to Beneco itself. WHEREFORE, the Petition for Certiorari is GIVEN DUE COURSE, the comment filed by respondent Board members is TREATED as their answer, and the decision of the National Labor Relations Commission dated 21 November 1988 in NLRC Case No. RAB-1-0313-84 is hereby SET ASIDE and the decision dated 5 April 1988 of Labor Arbiter Amado T. Adquilen hereby REINSTATED in toto. In addition, respondent Board members are hereby ORDERED to reimburse petitioner Beneco any amounts that it may be compelled to pay to respondent Cosalan by virtue of the decision of Labor Arbiter Amado T. Adquilen. No pronouncement as to costs. SO ORDERED. Gutierrez, Jr., Bidin, Davide, Jr. and Romero, JJ., concur. FIRST DIVISION G.R. No. 82914 June 20, 1988 KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS Local Chapter No. 1027), petitioner, vs. THE HONORABLE BLR DIRECTOR PURA FERRER CALLEJA, MEAT AND CANNING DIVISION UNIVERSAL ROBINA CORPORATION and MEAT AND CANNING DIVISION NEW EMPLOYEES AND

WORKERS UNITED LABOR ORGANIZATION, respondents. Alar, Comia, Manalo and Associates for petitioner. Danilo Bolos for respondent Robina Corporation. RESOLUTION

shall be the bargaining unit of the daily wage rank and file employees in the Meat and Canning Division of the company. From 1984 to 1987 TUPAS was the sole and exclusive collective bargaining representative of the workers in the Meat and Canning Division of the Universal Robina Corporation, with a 3-year collective bargaining agreement (CBA) which was to expire on November 15, 1987. Within the freedom period of 60 days prior to the expiration of its CBA, TUPAS filed an amended notice of strike on September 28, 1987 as a means of pressuring the company to extend, renew, or negotiate a new CBA with it. On October 8, 1987, the NEW ULO, composed mostly of workers belonging to the IGLESIA NI KRISTO sect, registered as a labor union. On October 12, 1987, the TUPAS staged a strike. ROBINA obtained an injunction against the strike, resulting in an agreement to return to work and for the parties to negotiate a new CBA. The next day, October 13, 1987, NEW ULO, claiming that it has "the majority of the daily wage rank and file employees numbering 191," filed a petition for a certification election at the Bureau of Labor Relations (Annex A). TUPAS moved to dismiss the petition for being defective in form and that the members of the NEW ULO were mostly members of the Iglesia ni Kristo sect which three

GRIO-AQUINO, J.: The petitioner, Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. 1027) hereinafter referred to as "TUPAS," seeks a review of the resolution dated January 27, 1988 (Annex D) of public respondent Pura Ferrer-Calleja, Director of the Bureau of Labor Relations, dismissing its appeal from the Order dated November 17, 1987 (Annex C) of the Med-Arbiter Rasidali C. Abdullah ordering a certification election to be conducted among the regular daily paid rank and file employees/workers of Universal Robina CorporationMeat and Canning Division to determine which of the contending unions: a) Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. 1027 (or "TUPAS" for brevity); b) Meat and Canning Division New Employees and Workers United Labor Organization (or "NEW ULO" for brevity); c) No union.

(3) years previous refused to affiliate with any labor union. It also accused the company of using the NEW ULO to defeat TUPAS' bargaining rights (Annex B). On November 17, 1987, the Med-Arbiter ordered the holding of a certification election within 20 days (Annex C). TUPAS appealed to the Bureau of Labor Relations BLR. In the meantime, it was able to negotiate a new 3-year CBA with ROBINA, which was signed on December 3, 1987 and to expire on November 15, 1990. On January 27, 1988, respondent BLR Director Calleja dismissed the appeal (Annex D). TUPAS' motion for reconsideration (Annex E) was denied on March 17, 1988 (Annex F). On April 30, 1988, it filed this petition alleging that the public respondent acted in excess of her jurisdiction and with grave abuse of discretion in affirming the Med-Arbiter's order for a certification election. After deliberating on the petition and the documents annexed thereto, We find no merit in the Petition. The public respondent did not err in dismissing the petitioner's appeal in BLR Case No. A-12-389-87. This Court's decision inVictoriano vs. Elizalde Rope Workers' Union, 59 SCRA 54, upholding the right of members of the IGLESIA NI KRISTO sect not to join a labor union for being contrary to their religious beliefs, does not bar the members of that sect from forming their own union. The public respondent correctly observed that the "recognition of the tenets of the sect ... should not infringe on the basic right of self-organization granted

by the constitution to workers, regardless of religious affiliation." The fact that TUPAS was able to negotiate a new CBA with ROBINA within the 60-day freedom period of the existing CBA, does not foreclose the right of the rival union, NEW ULO, to challenge TUPAS' claim to majority status, by filing a timely petition for certification election on October 13, 1987 before TUPAS' old CBA expired on November 15, 1987 and before it signed a new CBA with the company on December 3, 1987. As pointed out by Med-Arbiter Abdullah, a "certification election is the best forum in ascertaining the majority status of the contending unions wherein the workers themselves can freely choose their bargaining representative thru secret ballot." Since it has not been shown that this order is tainted with unfairness, this Court will not thwart the holding of a certification election (Associated Trade Unions [ATU] vs. Noriel, 88 SCRA 96). WHEREFORE, the petition for certiorari is denied, with costs against the petitioner. SO ORDERED. Narvasa, Cruz, Gancayco and Medialdea, JJ., concur. FIRST DIVISION

G.R. No. 80887 September 30, 1994 BLISS DEVELOPMENT CORPORATION EMPLOYEES UNION (BDCEU)-SENTRO NG DEMOKRATIKONG

MANGGAGAWA (SDM), petitioner, vs. HON. PURA FERRER CALLEJA and BLISS DEVELOPMENT CORPORATION, respondents. Capulong, Magpantay, Ladrido, Canilao and Malabanan for private respondent.

corporation. Therefore, BDC is subject to Civil Service law, rules and regulations. The pertinent portion of said Order reads: It may not be amised (sic) to further state that the Supreme Court in its Decision in the case of National Housing Corporation versus Benjamin Juco and the National Labor Relations Commission G-R 63313 promulgated on January 17, 1985 has pronounced that: There should no longer be any question at this time that employees of government owned or controlled corporations are governed by the Civil Service Rules and Regulations. Corollary to the issue of whether or not employees of BDC may form or join labor organizations therefore is the issue of whether or not BDC is a government owned corporation. The pertinent law on the matter is P.D. No. 2029 which provides that: Section 2 Definition A government-owned or controlled corporation is a stock or non-stock corporation whether performing government or

KAPUNAN, J.: The focal issue in the case at bench is whether or not Bliss Development Corporation (BDC) is a governmentowned controlled corporation subject to Civil Service Laws, rules and regulations. Corollary to this issue is the question of whether or not petitioner is covered by Executive Order No. 180 and must register under Section 7 thereof as a precondition for filing a petition for certification election. The antecedents of the case are: On October 10, 1986, petitioner, a duly registered labor union, filed with the Department of Labor, National Capital Region, a petition for certification election of private respondent Bliss Development Corporation (BDC). Based on the position papers submitted by the parties, Med-Arbiter Napoleon V. Fernando, in an order dated January 26, 1987, dismissed the petition for lack of jurisdiction stating that the majority of BDC's stocks is owned by the Human Settlement Development Corporation (HSDC), a wholly-owned government

proprietary functions, which is directly chartered by special law or if organized under the general corporation law is owned or controlled by the government or subsidiary corporation, to the extent of at least a majority of its outstanding capital stock or of its outstanding voting stock. In the case at bar, it is not disputed that majority of the stocks of BDC are owned by Human Settlement Development Corporation, a wholly government owned corporation, hence, this Office cannot, but otherwise conclude that Bliss Development Corporation is a government owned corporation whose employees are governed not by the Labor Code but by the Civil Service law, rules, and regulations. Its employees therefore, are prohibited to join or form labor organization. Further, this Office is without authority to entertain the present petition for obvious lack of jurisdiction. Indeed, Opinion No. 94, series of 1985, the Minister of Justice has declared: In determining whether a corporation created under the Corporation Code is government owned or

controlled or not, this ministry has consistently applied the ownership testwhereby a corporation will be deemed owned by the government if the majority of its voting stocks are owned by the government. It appearing that Human Settlement Development Corporation (HSDC), which is a wholly-owned government corporation, owns a majority of the stocks of Bliss Development Corporation (BDC), our conclusion is that BDC is a governmentowned corporation subject to the coverage of the Civil Service law, rules and regulations as pronounced by the Supreme Court in the case of NHA versus Juco. 1 Petitioner then filed an appeal with the Bureau of Labor Relations. In the meantime, or on June 1, 1987 Executive Order No. 180 was issued the then President Corazon C. Aquino extending to government employees the right to organize and bargain collectively. Sections 1 and 7 of said Order provide: Sec. 1. This Executive Order applies to all employees of all branches, subdivisions, instrumentalities, and agencies of the government, including government-owned or controlled corporations with original charters. . . . (Emphasis supplied)

Sec. 7. Government employees' organizations shall register with the Civil Service Commission and the Department of Labor and Employment. The application shall be filed with the Bureau of Labor Relations of the Department which shall process the same in accordance with the provisions of the Labor Code of the Philippines, as amended. Applications may also be filed with the Regional Offices of the Department of Labor and Employment which shall immediately transmit the said applications to the Bureau of Labor Relations within three (3) days from receipt hereof. On August 7, 1987, Director Pura Ferrer-Calleja of the Bureau of Labor Relations issued an Order dismissing the appeal. Said Order is reproduced hereunder: For disposition is an appeal of the Bliss Development Corporation Employees Union Sentro ng Demokratikong Manggagawa (BDCEU-SDM) from the Order of the Med-Arbiter dismissing its petition for direct certification/certification election dated January 26, 1987. On January 26, 1987, the Med-Arbiter issued an Order dismissing the petition filed by BDCEU-SDM. He ruled that the Bliss Development Corporation which is under the then Ministry of Human Settlement, is a government Corporation where the workers are prohibited from

organizing and joining labor unions. The Med-Arbiter cited Opinion No. 94 series of 1985, of the Minister of Justice which is hereunder quoted as follows: In determining whether a corporation created under the Corporation Code is government-owned or a controlled or not, this Ministry has consistently applied the ownership test whereby a corporation will be deemed owned by the government if all or a majority of its stocks are owned by the government, and it will be deemed controlled by the government, if the majority of its voting stocks are owned by the government. It appearing that HSDC, which is a wholly-owned government corporation, owns a majority of the stocks of BDC, our conclusion is that BDC is a governmentowned corporation subject to the coverage of the Civil Service Law and rules as pronounced by the Supreme Court in the case of NHA vs. Juco.

But circumstances have changed. With the issuance of Executive Order No. 180 dated June 1, 1987, government employees are now given the right to organize and bargain collectively. This, therefore, renders academic the order subject of the appeal. xxx xxx xxx Consequently, this Bureau hereby enjoins the Petitioner to register in accordance with the aforecited provision. Meantime, the petition is dismissed without prejudice to its refiling after petitioner is granted registration to avoid legal complications. WHEREFORE, in view of the foregoing, the case is hereby dismissed without prejudice. SO ORDERED.
2

II THE DIRECTOR GRAVELY ABUSED HER DISCRETION WHEN SHE INSISTED ON ENFORCING AN OPINION OF THE MINISTER OF JUSTICE WHICH RESPONDENT BDC ITSELF HAS CONSISTENTLY IGNORED AND CONTINUES TO IGNORE AND WHICH THE ENTIRE GOVERNMENT DOES NOT CARE TO ENFORCE. 3 In a resolution dated May 29, 1989 the Court gave due course to the petition and required the parties to file their respective memoranda which was complied with. The Solicitor General begged leave to be relieved from filing a comment on the petition and a memorandum, averring that he could not sustain the position of respondent Director. The petition is impressed with merit. Section 1 of Executive Order No. 180 expressly limits its application to only government-owned or controlled corporations with original charters. Hence, public respondent's order dated August 7, 1987 requiring petitioner to register in accordance with Section 7 of executive Order No. 180 is without legal basis. Without categorically saying so, public respondent sustained the Med-Arbiter's invocation of the case of National Housing Corporation v. Juco, 4 which rules that the inclusion of "government-owned or controlled corporations" within the embrace of the civil service shows a deliberate effort of the framers of the 1973

Taking exception to the Director's Order, petitioner brought the instant petition to annul the same on the following grounds: I THE DIRECTOR GRAVELY ABUSED HER DISCRETION AMOUNTING TO LACK OF JURISDICTION WHEN SHE ORDERED PETITIONER TO REGISTER UNDER SECTION 7 OF EXECUTIVE ORDER NO. 180 WHICH DOES NOT COVER PETITIONER;

Constitution to plug an earlier loophole which allowed government-owned or controlled corporations to avoid the full consequences of the all encompassing coverage of the civil service system. In said case, we stressed that: Section 1 of Article XII-B, Constitution uses the word "every" to modify the phrase "government-owned or controlled corporation." Every means each one of a group, without exception. It means all possible and all, taken one by one. Of course, our decision in this case refers to a corporation created as a government-owned or controlled entity. . . . . 5 However, our ruling in NHC v. Juco 6 case, which was decided under the 1973 Constitution, lost its applicability with the advent of the 1987 Constitution. Thus, in National Service Corporation v. NLRC, 7 we held that: . . . (I)n the matter of coverage by the civil service of government-owned or controlled corporations, the 1987 Constitution starkly varies from the 1973 Constitution, upon which National Housing Corporation vs. Juco is based. Under the 1973 Constitution, it was provided that: The civil service embraces every branch, agency, subdivision, and instrumentality of the

Government, including every government-owned or controlled corporation. . . . [Constitution, 1973, Art. II-B, Sec. I(1)] On the other hand, the 1987 Constitution provides that: The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charter. (Emphasis supplied) [Constitution (1987), Art. IXB, Sec. 2(1). Thus the situations sought to be avoided by the 1973 Constitution and expressed by the Court in theNational Housing Corporation case in the following manner The infirmity of the respondents' position lies in its permitting a circumvention or emasculation of Section 1, Article XII-B of the Constitution. It would be possible for a regulate ministry of government to

create a host of subsidiary corporations under the Corporation Code funded by a willing legislature. A government-owned corporation could create several subsidiary corporations. These subsidiary corporations would enjoy the best of two worlds. Their officials and employees would be privileged individuals, free from the strict accountability required by the Civil Service Decree and the regulations of the Commission on Audit. Their incomes would not be subject to the competitive restrains of the open market nor to the terms and conditions of civil service employment. Conceivably, all government-owned or controlled corporations could be created, no longer by special charters, but through incorporations under the general law. The Constitutional amendment including such corporations in the embrace of the civil service would cease to have application. Certainly, such a situation cannot be allowed to exist. [134 SCRA 182-183]

appear relegated to relative insignificance by the 1987 Constitutional provision that the Civil Service embraces governmentowned or controlled corporations with original charter; and, therefore, by clear implication, the Civil Service does not include government-owned or controlled corporations which are organized as subsidiaries of government-owned or controlled corporations under the general corporation law. 8 A corporation is created by operation of law. It acquires a judicial personality either by special law or a general law. The general law under which a private corporation may be formed or organized is the Corporation Code, the requirements of which must be complied with by those wishing to incorporate. Only upon such compliance will the corporation come into being and acquire a juridical personality, thus giving rise to is right to exist and act as a legal entity. On the other hand, a government corporation is normally created by special law, referred to often as a charter. 9 BDC is a government-owned corporation created under the Corporation Law. It is without a charter, governed by the Labor Code and not by the Civil Service Law hence, Executive Order No. 180 does not apply to it. Consequently, public respondent committed grave abuse of discretion in ordering petition to register under Section 7, of Executive Order No. 180 as a precondition for filing a petition for certification election.

WHEREFORE, the instant petition is hereby GRANTED. The order of public respondent dated August 7, 1987 is SET ASIDE and the Director of Labor Relations is hereby directed to give due course of petitioner's application for certification election. SO ORDERED. Cruz, Davide, Jr., Bellosillo and Quiason, JJ., concur. EN BANC

[G.R. No. 124540. November 14, 1997]

While we recognize and appreciate the toil and hardship of our public schoolteachers in fulfilling the states responsibility of educating our children, and realize their inadequately addressed plight as compared to other professionals, we have the equal task of promoting the larger public interest which withholds from them and other similarly situated government workers the right to engage in mass actions resulting in work stoppages for any purpose. Although the Constitution vests in them the right to organize, to assemble peaceably and to petition the government for a redress of grievances, there is no like express provision granting them the right to strike. Rather, the constitutional grant of the right to strike is restrained by the proviso that its exercise shall be done in accordance with law.

MERLINDA JACINTO, ADELINA AGUSTIN, SUSAN AGUSTIN, EVELYN ATIENZA, NIDA BALANE, ANICIA CARLOS, CELEDONIA CARLOS, LIWANAG CASTILLO, JOSEFINA DE GUZMAN, MINERVA GARCIA, MARIA GATDULA, ALICIA GUNDA, AURORA LOPEZ, CARMENCITA MANANSALA, ERLINDA MARTINEZ, LOLITA NAVARRETE, GUADALUPE PANERGO, MARIA PULGA, PAZ SERRA and VIRGINIA ZAMORA, petitioners, vs.HON. COURT OF APPEALS; THE CIVIL SERVICE COMMISSION; and THE SECRETARY OF EDUCATION, CULTURE AND SPORTS,respondents. DECISION PANGANIBAN, J.:

The Case Before us is a petition for review under Rule 45 of the Rules of Court seeking to set aside the November 27, 1995 Decision[1] of the Court of Appeals[2] in CA-G.R. SP No. 37596, which found no grave abuse of discretion on the part of the Civil Service Commission (CSC) in issuing its resolutions[3] disposing of the separate appeals and motions for reconsideration of herein petitioners. The dispositive portions of most of the CSC resolutions, with the exception of the name of the appellant concerned, uniformly read: WHEREFORE, foregoing premises considered, the Commission hereby resolves to find Susan Agustin guilty of Conduct Prejudicial to the Best Interest of the Service. She is meted out the penalty of six (6) months

suspension without pay. Agustin is now automatically reinstated in the service without payment of back salaries.[4] As regards Petitioner Merlinda Jacinto, the decretal portion of the resolution pertaining to her case reads: WHEREFORE, foregoing premises considered, the Commission hereby resolves to find Merlinda Jacinto guilty of Violation of Reasonable Office Rules and Regulations. She is hereby meted out the penalty of reprimand. She is automatically reinstated in the service without payment of back salaries.[5] In a Resolution[6] dated March 29, 1996, Respondent Court of Appeals denied the petitioners motion for reconsideration.

TO: ALL PUBLIC SCHOOL TEACHERS AND OTHER DECS PERSONNEL SUBJECT: RETURN TO WORK ORDER Under Civil service law and rules, strikes, unauthorized mass leaves and other forms of mass actions by civil servants which disrupt public services are strictly prohibited. Those of you who are engaged in the above-mentioned prohibited acts are therefore ordered, in the interest of public service, to return to work within 24 hours from your walkout otherwise dismissal proceedings shall be instituted against you. (Underscoring supplied). The directive was ignored by petitioners. Consequently, on separate dates, Secretary Cario issued formal charges and preventive suspension orders against them. They were administratively charged with gross misconduct; gross neglect of duty, etc. for joining unauthorized mass actions; ignoring report-to-work directives; unjustified abandonment of teaching posts; non-observance of Civil Service law, rules and regulations; non-compliance with reasonable office rules and regulations; and incurring unauthorized absences without leave, etc. An investigation committee was then created by Sec. Cario to look into the matter. However, during the investigation, petitioners did not file their answers or controvert the charges against them. As a consequence, Sec. Cario, in his decisions found them guilty as charged and imposed the penalty of dismissal, except with respect to petitioners Merlinda Jacinto and Adelina Agustin who were meted only six (6) months suspension.

The Facts The following are the antecedents of the case as narrated by the Court of Appeals, which we find substantiated by the records: Petitioners are public school teachers from various schools in Metropolitan Manila. Between the period September 17 to 21, 1990, they incurred unauthorized absences in connection with the mass actions then staged; and on September 17, 1990, DECS Secretary Isidro Cario immediately issued a return-to-work order worded as follows:

The decisions were appealed to the Merit Systems Protection Board (MSPB) which dismissed the appeals for lack of merit and then to the Civil Service Commission which set aside the Orders of the MSPB in the contested resolutions. The Civil Service Commission, in separate resolutions, found the petitioners (except Merlinda Jacinto) guilty of Conduct Prejudicial to the Best Interest of the Service; imposed upon them the penalty of six (6) months suspension without pay; and automatically reinstated them to the service without payment of back salaries x x x. In the case of Petitioner Merlinda Jacinto, the CSC found her guilty of Violation of Reasonable Office Rules and Regulations; imposed upon her the penalty of reprimand; and automatically reinstated her in the service without payment of back salaries x x x. Acting on the motions for reconsideration, the CSC rendered the assailed resolutions denying the motions for lack of merit.[7] Petitioners initially questioned the CSC resolutions directly before this Court in petitions docketed as G.R. Nos. 118252 to 118271. In accordance with Revised Administrative Circular 1-95, we referred them to the Court of Appeals. Respondent Court found that the petitioners absented themselves from their classes in furtherance of or in connection with the mass action for the purpose of pressuring the government to grant their demands. Citing the resolution of this Court in MPSTA vs. Laguio[8] that the mass actions staged by the public schoolteachers from September 17 to September 19, 1990, were to all intents and purposes a strike, it denied the petition, since the right to strike did not

extend to civil service employees. In the case of Merlinda Jacinto, Respondent Court found no error on the part of the CSC in finding her guilty of violation of reasonable office rules and regulations. Neither did it find the petitioners entitled to backwages for the period of their preventive suspension, as they were not exonerated of the charges against them. Hence, this petition.[9]

Issues Petitioners raise the following grounds for their appeal: I. The Respondent Court of Appeals committed grave abuse of discretion when it upheld the resolutions of the Civil Service Commission that penalized all the petitioners whose only offense (except Jacinto) was to exercise their constitutional right peaceably to assemble and petition the government for redress of grievances. II. The Respondent Court of Appeals committed grave abuse of discretion when it upheld the resolutions of the Civil Service Commission that penalized Petitioner Jacinto for an alleged offense which has no basis whatsoever thereby violating her right to security of tenure. III. The Respondent Court of Appeals committed grave abuse of discretion when it upheld the resolutions of the Civil Service Commission that denied petitioners their right to backwages covering the period when they were illegally not allowed to teach.[10]

Preliminarily, we note that the remedy resorted to by petitioners is a petition for review under Rule 45 of the Rules of Court which, however, allows only questions of law.[11] Jurisprudence has extended this remedy to questions of fact in exceptional cases.[12] Where the issues raised involve lack of jurisdiction or grave abuse of discretion as in this case, the Rules provide for a different remedy -- Rule 65. In the interest of substantial justice, however, we hereby decide to deal with this petition as one filed under Rule 45, as denominated in its prefatory paragraph, and treat the grave abuse of discretion on the part of Respondent Court of Appeals as allegations of reversible errors.

pronouncements defending and promoting the peoples exercise of these rights. As early as the onset of this century, this Court, in U.S. vs. Apurado,[17] already upheld the right to assembly and petition and even went as far as to acknowledge: It is rather to be expected that more or less disorder will mark the public assembly of the people to protest against grievances whether real or imaginary, because on such occasions feeling is always wrought to a high pitch of excitement, and the greater the grievance and the more intense the feeling, the less perfect, as a rule, will be the disciplinary control of the leaders over their irresponsible followers. But if the prosecution be permitted to seize upon every instance of such disorderly conduct by individual members of a crowd as an excuse to characterize the assembly as a seditious and tumultuous rising against the authorities, then the right to assemble and to petition for redress of grievances would become a delusion and a snare and the attempt to exercise it on the most righteous occasion and in the most peaceable manner would expose all those who took part therein to the severest and most unmerited punishment, if the purposes which they sought to attain did not happen to be pleasing to the prosecuting authorities. If instances of disorderly conduct occur on such occasions, the guilty individuals should be sought out and punished therefor, but the utmost discretion must be exercised in drawing the line between disorderly and seditious conduct and between an essentially peaceable assembly and a tumultuous uprising.[18] Primicias vs. Fugoso[19] further sustained the supremacy of the freedoms of speech and of assembly over comfort and convenience in the use of streets or

The Courts Ruling The petition, which fails to convince us, merits only dismissal.

First Issue: Improper Exercise of the Right to Peaceful Assembly and to Petition for a Redress of Grievances There is no question as to the petitioners rights to peaceful assembly to petition the government for a redress of grievances and, for that matter, to organize or form associations for purposes not contrary to law, as well as to engage in peaceful concerted activities. These rights are guaranteed by no less than the Constitution, particularly Sections 4[13] and 8[14] of the Bill of Rights, Section 2(5)[15] of Article IX, and Section 3[16] of Article XIII. Jurisprudence abounds with hallowed

parks. Although the Court opined that the exercise of the rights of free speech and of peaceful assembly to petition the government for redress of grievances is not absolute for it may be so regulated that it shall not be injurious to the equal enjoyment of others having equal rights, nor injurious to the rights of the community or society, regulation was limited to the mayors reasonable discretion in issuing a permit to determine or specify only the streets or public places to be used for the purpose and to provide adequate and proper policing to minimize the risk of disorder. Quoting Justice Brandeis in his concurring opinion in Whitney vs. California, the Court said:[20] Fear of serious injury cannot alone justify suppression of free speech and assembly. x x x To justify suppression of free speech there must be reasonable ground to fear that serious evil will result if free speech is practiced. There must be reasonable ground to believe that the danger apprehended is imminent. There must be reasonable ground to believe that the evil to be prevented is a serious one x x x. xxx x xx xxx

permit. In that case, retired Justice J.B.L. Reyes, on behalf of the Anti-Bases Coalition, sought a permit from the mayor of Manila to hold a march and a rally starting from Luneta, proceeding through Roxas Boulevard to the gates of the U.S. Embassy, to be attended by local and foreign participants to the International Conference for General Disarmament, World Peace and the Removal of All Foreign Military Bases. The Manila mayor denied them the permit due to police intelligence reports which strongly militate against the advisability of issuing such permit at this time and at the place applied for. In reversing the mayor, this Court stated that to justify limitations on freedom of assembly, there must be proof of sufficient weight to satisfy the clear and present danger[22] test. Thereafter, the Court proceeded to summarize the rules on assembly and petition,[23] making the clear-and-present danger rule the standard for refusing or modifying the grant of a permit. But it stressed that the presumption must be to incline the weight of the scales of justice on the side of such rights [of free speech and peaceable assembly], enjoying as they do precedence and primacy. Philippine Blooming Mills Employees Organization vs. Philippine Blooming Mills Co., Inc.,[24] which was promulgated after the proclamation of martial law, further underscored the supremacy of these basic constitutional rights, this time over property rights. Speaking through Mr. Justice Makasiar, the Court explained: x x x the primacy of human rights -- freedom of expression, of peaceful assembly and of petition for redress of grievances -- over property rights has been sustained. Emphatic reiteration of this basic tenet as a coveted boon -- at once the shield and armor of the

x x x The fact that speech is likely to result in some violence or in destruction of property is not enough to justify its suppression. There must be the probability of serious injury to the state. x x x This limitation was strictly applied in Reyes vs. Bagatsing,[21] in which the Court [was] called upon to protect the exercise of the cognate rights to free speech and peaceful assembly, arising from the denial of a

dignity and worth of the human personality, the allconsuming ideal of our enlightened civilization -becomes [o]ur duty, if freedom and social justice have any meaning at all for him who toils so that capital can produce economic goods that can generate happiness for all. To regard the demonstration against police officers, not against the employer, as evidence of bad faith in collective bargaining and hence a violation of the collective bargaining agreement and a cause for the dismissal from employment of the demonstrating employees, stretches unduly the compass of the collective bargaining agreement, is a potent means of inhibiting speech and therefore inflicts a moral as well as mortal wound on the constitutional guarantees of free expression, of peaceful assembly and of petition.[25] Specifically, the right of civil servants to organize themselves was positively recognized in Association of Court of Appeals Employees (ACAE) vs. FerrerCalleja.[26] But, as in the exercise of the rights of free expression and of assembly, there are standards for allowable limitations such as the legitimacy of the purposes of the association,[27] the overriding considerations of national security and the preservation of democratic institutions.[28] As regards the right to strike, the Constitution itself qualifies its exercise with the proviso in accordance with law. This is a clear manifestation that the state may, by law, regulate the use of this right, or even deny certain sectors such right. Executive Order 180[29] which provides guidelines for the exercise of the right of government workers to organize, for instance, implicitly endorsed an earlier CSC circular which enjoins under pain of administrative sanctions, all government officers and employees from staging strikes,

demonstrations, mass leaves, walkouts and other forms of mass action which will result in temporary stoppage or disruption of public service,[30] by stating that the Civil Service law and rules governing concerted activities and strikes in the government service shall be observed.[31] It is also settled in jurisprudence that, in general, workers in the public sector do not enjoy the right to strike. Alliance of Government Workers vs. Minister of Labor and Employment[32]rationalized the proscription thus: The general rule in the past and up to the present is that the terms and conditions of employment in the Government, including any political subdivision or instrumentality thereof are governed by law. x x x. Since the terms and conditions of government employment are fixed by law, government workers cannot use the same weapons employed by the workers in the private sector to secure concessions from their employers. The principle behind labor unionism in private industry is that industrial peace cannot be secured through compulsion by law. Relations between private employers and their employees rest on an essentially voluntary basis. Subject to the minimum requirements of wage laws and other labor and welfare legislation, the terms and conditions of employment in the unionized private sector are settled through the process of collective bargaining. In government employment, however, it is the legislature and, where properly given delegated power, the administrative heads of government which fix the terms and conditions of employment. And this is effected through statutes or administrative circulars, rules, and regulations, not through collective bargaining agreements.[33]

After delving into the intent of the framers of the Constitution, the Court affirmed the above rule in Social Security System Employees Association (SSSEA) vs. Court of Appeals[34] and explained: Government employees may, therefore, through their unions or associations, either petition the Congress for the betterment of the terms and conditions of employment which are within the ambit of legislation or negotiate with the appropriate government agencies for the improvement of those which are not fixed by law. If there be any unresolved grievances, the dispute may be referred to the Public Sector Labor-Management Council for appropriate action. But employees in the civil service may not resort to strikes, walkouts and other temporary work stoppages, like workers in the private sector, to pressure the Government to accede to their demands. As now provided under Sec. 4, Rule III of the Rules and Regulations to Govern the Exercise of the Right of Government Employees to Self-Organization, which took effect after the instant dispute arose, [t]he terms and conditions of employment in the government, including any political subdivision or instrumentality thereof and government-owned and controlled corporations with original charters are governed by law and employees therein shall not strike for the purpose of securing changes [thereto].[35] We now come to the case before us. Petitioners, who are public schoolteachers and thus government employees, do not seek to establish that they have a right to strike. Rather, they tenaciously insist that their absences during certain dates in September 1990 were a valid exercise of their constitutional right to engage in peaceful assembly to petition the government for a redress of grievances. They claim that their gathering

was not a strike; therefore, their participation therein did not constitute any offense. MPSTA vs. [36] [37] Laguio and ACT vs. Cario, in which this Court declared that these mass actions were to all intents and purposes a strike; they constituted a concerted and unauthorized stoppage of, or absence from, work which it was the teachers duty to perform, undertaken for essentially economic reasons, should not principally resolve the present case, as the underlying facts are allegedly not identical. Strike, as defined by law, means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.[38] A labor dispute includes any controversy or matter concerning terms and conditions of employment; or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employers and employees.[39] With these premises, we now evaluate the circumstances of the instant petition. It cannot be denied that the mass action or assembly staged by the petitioners resulted in the nonholding of classes in several public schools during the corresponding period. Petitioners do not dispute that the grievances for which they sought redress concerned the alleged failure of public authorities -- essentially, their employers -- to fully and justly implement certain laws and measures intended to benefit them materially, such as: 1. Immediate release of P680 million Secondary Education Fund (SEF) fringe benefits of teachers under Section 17 of Republic Act 6758.

2. Clothing allowance at P500 to P1,000 per teachers [sic] under the General Appropriations Act of 1990 3. DMB Circular 904 4. Increase in minimum wage to P5,000 for teachers.[40] And probably to clothe their action with permissible character,[41] they also raised national issues such as the removal of the U.S. bases and the repudiation of foreign debt. In Balingasan vs. Court of Appeals,[42] however, this Court said that the fact that the conventional term strike was not used by the participants to describe their common course of action was insignificant, since the substance of the situation, and not its appearance, was deemed controlling.[43] Moreover, the petitioners here, except Merlinda Jacinto, were not penalized for the exercise of their right to assemble peacefully and to petition the government for a redress of grievances. Rather, the Civil Service Commission found them guilty of conduct prejudicial to the best interest of the service for having absented themselves without proper authority, from their schools during regular school days, in order to participate in the mass protest, their absence ineluctably resulting in the non-holding of classes and in the deprivation of students of education, for which they were responsible. Had petitioners availed themselves of their free time -- recess, after classes, weekends or holidays -- to dramatize their grievances and to dialogue with the proper authorities within the bounds of law, no one -- not the DECS, the CSC or even this Court -- could have held them liable for the valid exercise of their constitutionally guaranteed rights. As it was, the temporary stoppage of classes resulting from their activity necessarily disrupted public

services, the very evil sought to be forestalled by the prohibition against strikes by government workers. Their act by its nature was enjoined by the Civil Service law, rules and regulations, for which they must, therefore, be made answerable.

Second Issue: Violation by Petitioner Jacinto of Reasonable Office Rules and Regulations Petitioner Jacinto, for her part, pleads for exoneration. She asks the Court to reexamine and give due weight to the certification[44] issued by her school principal that she met her class on September 20, 1990 but failed to sign in the attendance logbook. Stated elsewise, Jacinto wants us to scrutinize firsthand a document already ruled upon by the Civil Service Commission and the Court of Appeals to be of doubtful credibility. Time and again, we have held that findings of administrative agencies, which have acquired expertise because their jurisdiction is confined to specific matters, are accorded not only respect but even finality[45] particularly when affirmed by the appellate tribunal. It is not a function of this Court to examine and evaluate the probative value of the evidence proffered in the concerned forum, which formed the basis of the latters impugned decision, resolution or order,[46] absent a clear showing of arbitrariness and want of any rational basis therefor.[47] In the instant case, we find no sufficient reason to reverse the findings of the CSC. In any event, as observed by the Commission, said certification, dated December 19, 1990, was belatedly submitted by Petitioner Jacinto only with her motion for

reconsideration of the CSC resolution promulgated September 21, 1993; thus it was correctly rejected as a newly discovered evidence. Additionally, the Commission explained: x x x such certification contradicts the allegation that she filed an application for leave. If she was really present on September 20, 1990, there would have been no need for her to file an application for leave. Apparently, this is a vain effort to present documents of doubtful credibility just to have Jacinto exonerated of the charges against her.[48] The futility of the tactics of Petitioner Jacinto to evade culpability is further exemplified by her contradictory assertions. In a sworn explanation submitted to Secretary Cario, she claimed that she left the school premises on the day in question, because she was emotionally and mentally depressed, and went to see a physician.[49] In her motion for reconsideration before the CSC, she submitted the above certification to the effect that she was not absent. Now, in assailing the Commissions decision to reprimand her for violation of reasonable office rules and regulations in not filing an application for leave of absence, she invokes Sec. 15, Rule XVI of the Civil Service rules, which provides: Sec. 15. Applications for vacation leave of absence for one full day or more shall be submitted on the prescribed form for action by the proper chief of agency in advance, whenever possible, of the effective date of such leave. She contends that the filing of an application for vacation leave need not always be in advance of the

effective date thereof.[50] Clearly, her present stance is diametric to her illness justification before the DECS. In the latter case, it is Section 16 of said rules that is pertinent: Sec. 16. All applications for sick leaves of absence for one full day or more shall be on the prescribed form and shall be filed immediately upon the employees return from such leave. Notice of absence, however, should be sent to the immediate supervisor and/or to the office head. x x x The regulation requires (1) the filing of the application for sick leave on the prescribed form immediately upon the employees return from such leave and (2) a notice of absence to be sent to the immediate supervisor and/or office head. But the Commission found that the records are bereft of any showing that Jacinto asked permission from school authorities to go out of school premises and seek medical attention outside nor did she file an application for sick leave x x x.[51] Hence, its conclusion that petitioner violated reasonable office rules and regulations. The totality of the evidence on record sustains the findings and conclusions of the Commission, as affirmed by the Court of Appeals. We have no reason to reverse them. The Civil Service rules clearly provide that violation of reasonable office rules and regulations, on first offense, carries the penalty of reprimand.[52]

Third Issue: No Right to Backwages

Petitioners anchor their claim for backwages on the supposed illegality of (1) their preventive suspension upon the filing of the charges against them and (2) the immediate execution of the DECS Secretarys decisions ordering their dismissal. The charges against petitioners consisted of the following: (1) grave misconduct; (2) gross neglect of duty; (3) gross violation of Civil Service law, rules and regulations and reasonable office regulations; (4) refusal to perform official duty; (5) gross insubordination; (6) conduct prejudicial to the best interest of the service; and (7) absence without approved leave. These were based on their alleged unauthorized participation in the mass actions in September 1990, disregard of report-towork directives, unjustified abandonment of teaching posts, unauthorized absences without leave, and other similar violations reported to the DECS Secretary by their respective school supervisors.[53] We find that the charges filed against petitioners warranted their preventive suspension from the service, as provided under Section 51, Chapter 7 (on Discipline) of the Administrative Code, which reads: Sec. 51. Preventive Suspension. -- The proper disciplining authority may preventively suspend any subordinate officer or employee under his authority pending an investigation, if the charge against such officer or employee involves dishonesty, oppression or grave misconduct, or neglect in the performance of duty, or if there are reasons to believe that the respondent is guilty of charges which would warrant his removal from the service.

The petitioners alleged lapses, initially found substantiated by the DECS, qualify as grave misconduct or neglect in the performance of duty under the above rule. Thus, former Education Secretary Cario had the legal authority to suspend them pending further investigation. The Secretarys immediate execution of his decisions imposing the penalty of dismissal finds legal basis in Sec. 47 (2) of the Civil Service law[54] which provides: Sec. 47. Disciplinary Jurisdiction. -- x x x. (2) The Secretaries and heads of agencies and instrumentalities, provinces, cities and municipalities shall have jurisdiction to investigate and decide matters involving disciplinary action against officers and employees under their jurisdiction. Their decisions shall be final in case the penalty imposed is suspension for not more than thirty days or fine in an amount not exceeding thirty days salary. In case the decision rendered by a bureau or office head is appealable to the Commission, the same may be initially appealed to the department and finally to the Commission and pending appeal, the same shall be executory except when the penalty is removal, in which case the same shall be executory only after confirmation by the Secretary concerned. As can be gleaned from the above, the department secretarys decision confirming the removal of an officer or employee under his jurisdiction is executory in character, i.e. such decision may be immediately executed even pending further remedy, such as an appeal,[55] by the dismissed officer or employee. In the case at bar, it was already the final judgments of

Secretary Cario which were forthwith carried out. The aforequoted statutory provision rules out the alleged illegality of the actions of the DECS Secretary. In any event, the rule is settled that backwages may be granted only to those who have been illegally dismissed and thenceforth ordered reinstated, or to those acquitted of the charge against them.[56] Even a pardoned convicted employee is not automatically entitled to backpay. Monsanto vs. Factoran Jr.[57] established the general rule that -- while pardon has been commonly regarded as eliminating the existence of guilt so that in the eyes of the law the offender is as innocent as though he never committed the offense -- such exoneration does not operate for all purposes. It does not erase the fact of the commission of the offense and the conviction therefor. It frees the convict from all penalties and legal disabilities and restores to him all his civil rights; but unless expressly grounded on the persons innocence, it does not ipso facto restore him to public office necessarily relinquished or forfeited by reason of the conviction. Pardon does not generally result in automatic reinstatement because the offender has to apply for reappointment; neither is he entitled to backpay.[58] Thus, in Sabello vs. DECS,[59] although we reinstated the petitioner-pardonee to his previous position in the interest of justice and equity, we did not grant him backwages since he was lawfully separated from the government service upon his conviction for an offense. We reiterated that the right to backwages was afforded only to those who were illegally dismissed but thereafter ordered reinstated, or to those otherwise acquitted of the charge against them.

Again, in City Mayor of Zamboanga vs. Court of Appeals,[60] we said that back salaries may be ordered paid to an officer or employee only if he is exonerated of the charge against him and his suspension or dismissal is found and declared to be illegal. Hence, in Garcia vs. Chairman, Commission on Audit,[61] we said that if the pardon is based on the innocence of the individual, it affirms this innocence and makes him a new man and as innocent as if he had not been found guilty of the offense charged.[62] In that case, Garcia was found administratively liable for dishonesty. He was, however, acquitted by the trial court of the complaint for qualified theft based on the very same acts. The acquittal was founded not on lack of proof beyond reasonable doubt but on the fact that he did not commit the offense imputed to him. This Court said that after having been declared innocent of the criminal complaint, which had the same basis as the administrative charge, for all legal purposes the petitioner should not be considered to have left his office, so that he was entitled to all the rights and privileges that accrued to him by virtue of the office held, including backwages. He was restored to his office ipso facto upon the issuance of the clemency. The grant of backwages was justified to afford relief to [the] petitioner who [was] innocent from the start and to make reparation for what he [had] suffered as a result of his unjust dismissal from the service.[63] However, in Balingasan, finding that petitioners therein indeed participated in the unlawful mass actions for which they were similarly meted suspension, the Court opined that they were not completely exonerated of the charges against them. They were denied back salaries because they had given ground for their suspension. This means that being found liable for a lesser offense is not equivalent to exoneration from the

original complaint against the concerned public officer or employee. Balingasan referred to the earlier case of Yacia vs. City of Baguio,[64] in which this Court denied the claim of an employee for backwages for the period during which he was not allowed to work because of the execution of the CSC decision dismissing him for dishonesty, even though, on appeal, his penalty was reduced to a fine equivalent to six months pay. Based on the above premises, petitioners demand for backwages cannot be granted, for they had given cause for their suspension -- their unjustified abandonment of classes to the prejudice of their students. Although they were eventually found guilty only of conduct prejudicial to the best interest of the service, and not grave misconduct or other offense warranting their dismissal from the service, they were not fully innocent of the charges against them. We find the case of Petitioner Jacinto different, however. The Civil Service Commission found her culpable only of violation of reasonable office rules and regulations, for not having asked permission from school authorities to leave the school premises and seek medical attention and for not filing an application for sick leave for approval by the school authorities. There was no proof that she joined the mass actions which caused prejudice to the school system. In Balingasan, this Court, after finding that Rodolfo Mariano was not involved in the mass actions but was absent because he attended the wake and burial of his grandmother in Ilocos Sur without however the benefit of an approved leave of absence, held that [t]o deny petitioner Mariano his back wages during his suspension would be tantamount to punishing him after his exoneration from the charges which caused his dismissal from the service, i.e. participation in the

unlawful mass actions. Therefore, in line with Balingasan, we likewise grant back salaries to Petitioner Jacinto who did not join the illegal activity. WHEREFORE, in view of the foregoing, the petition is hereby DENIED and the assailed Decision of the Court of Appeals is hereby AFFIRMED with the modification that Petitioner Merlinda Jacinto is granted backwages, without deduction or qualification, from the time she was suspended until her actual reinstatement, the total of which, consistent with prevailing jurisprudence,[65]should not exceed five years. SO ORDERED. Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, and Francisco, JJ., concur. Narvasa, C.J., on official leave. THIRD DIVISION

G.R. No. 85915 January 17, 1990 PAGKAKAISA NG MGA MANGGAGAWA SA TRIUMPH INTERNATIONAL-UNITED LUMBER AND GENERAL WORKERS OF THE PHILIPPINES (PMTIULGWF), petitioner, vs. PURA FERRER-CALLEJA, DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND THE CONFEDERATION OF FILIPINO WORKERS (CFW), PROGRESSIVE EMPLOYEES UNION (PEUTIPI), respondents. Godofredo R. Paceo, Jr., for petitioner.

Sycip, Salazar, Hernandez & Gatmaitan for Triumph International Phils. Inc. Rogelio R. Udarbe for private respondents.

as intervenor, filed its opposition to the petition oil February 18, 1988. On April 13, 1988, the Labor Arbiter issued an order granting the petition for certification election and directing the holding of a certification election to determine the sole and exclusive bargaining representative of all monthly-paid administrative, technical, confidential and supervisory employees of Triumph International. On appeal, the public respondent on August 24, 1988 affirmed the Labor Arbiter's order with certain modifications as follows: WHEREFORE, premises considered, the order appealed from is hereby affirmed subject to the modification in that the subject employees sought to be represented by the petitioner union are given the option whether to join the existing bargaining unit composed of daily paid rank-and-file employees. If they opt to join, the pertinent provision of the existing CBA should be amended so as to include them in its coverage. (Rollo, p. 19) On September 5, 1988, Triumph International filed a motion for reconsideration which was denied by the public respondent in a resolution dated October 28, 1988. The sole issue presented by the petitioner in the instant case is whether or not the public respondent gravely abused its discretion in ordering the immediate holding

GUTIERREZ, JR., J.: Once again we uphold the existing law which encourages one union, one company policy in this petition forcertiorari with prayer for preliminary injunction, The petitioner assails the resolutions of the public respondent dated August 24, 1988 and October 28, 1988 both ordering the holding of a certification election among certain monthly-paid employees of Triumph International Philippines, Inc. (Triumph International for brevity). The petitioner is the recognized collective bargaining agent of the rank-and-file employees of Triumph International with which the latter has a valid and existing collective bargaining agreement effective up to September 24, 1989. On November 25, 1987, a petition for certification election was filed by the respondent union with the Department of Labor and Employment. On January 30, 1988, a motion to dismiss the petition for certification election was filed by Triumph International on the grounds that the respondent union cannot lawfully represent managerial employees and that the petition cannot prosper by virtue of the contract-bar rule. On the same grounds, the petitioner,

of a certification election among the workers sought to be represented by the respondent union. The petitioner argues that the members of respondent union and managerial employees who are expressly excluded from joining, assisting or forming any labor organization under Art. 245 of the Labor Code. In the determination of whether or not the members of respondent union are managerial employees, we accord due respect and, therefore, sustain the findings of fact made by the public respondent pursuant to the timehonored rule that findings of fact of quasi-judicial agencies like the Bureau of Labor Relations which are supported by substantial evidence are binding on us and entitled to great respect considering their expertise in their respective fields. (see Phil. Airlines Employees Asso. (PALEA) v. Ferrer-Calleja, 162 SCRA 426 [1988]; Producers Bank of the Philippines v. National Labor Relations Commission, G.R. No. 76001, September 5, 1988; Salvador Lacorte v. Hon. Amado G. Inciong, et al., G.R. No. 52034, September 27, 1988: Johnson and Johnson Labor Union-FFW et al. v. Director cf. Labor Relations, G.R. No. 76427, February 21, 1989; Teofila Arica, et al. v. National Labor Relations Commission, et al., G.R. No. 78210, February 28, 1989; A.M. Oreta & Co. Inc. v. National Labor Relations Commission, G.R. No. 74004, August 10, 1989). According to the MedArbiter, while the functions, and we may add, the titles of the personnel sought to be organized appear on paper to involve an apparent exercise of managerial authority, the fact remains that none of them discharge said functions. The petitioner has failed to show reversible error insofar as this finding is concerned.

In ruling that the members of respondent union are rank and file and not managerial employees, the public respondent made the following findings: . . . (1) They do not have the power to lay down and execute management policies as they are given ready policies merely to execute and standard practices to observe; 2) they do not have the power to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees but only to recommend for such actions as the power rests upon the personnel manager; and 3) they do not have the power to effectively recommend any managerial actions as their recommendations have to pass through the department manager for review, the personnel manager for attestation and general manager/president for final actions. . . . (At pp. 17-18, Rollo) The petitioner further argues that while it has recognized those signatories and employees occupying the positions of Assistant Manager, Section Chief, Head Supervisor and Supervisor as managerial employees under the existing collective bargaining agreement, in the event that they are declared as rank-and-file employees in the present case they are not precluded from joining and they should join the petitioner. We find the aforesaid contention of the petitioner meritorious in the absence of a showing that there are compelling reasons such as the denial of the right to join the petitioner which is the certified bargaining unit to the members of respondent union or that there are

substantial distinctions warranting the recognition of a separate group of rank-and-file employees even as there is an existing bargaining agent for rank and file employees. In the case of Philtranco Service Enterprises v. Bureau of Labor Relations, et. al., G.R. No. 85343 promulgated on June 28, 1989, we stated that: The Labor Code recognizes two (2) principal groups of employees, namely, the managerial and the rank and file groups. Thus, Art. 212 (k) of the Code provides: xxx xxx xxx (k) "Managerial employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial action. All employees not falling within this definition are considered rank and file employees for purposes of this Book. In implementation of the aforequoted provision of the law, Section II of Rule 11, Book V of the Omnibus Rules implementing the Labor Code did away with existing supervisory unions classifying the members either as managerial or rank and file employees depending on the work they perform. If

they discharge managerial functions, supervisors are prohibited from forming or joining any labor organization. If they do not perform managerial work, they may join the rank and file union and if none exists, they may form one such rank and file organization. This rule was emphasized in the case ofBulletin Publishing Corp. v. Sanchez, (144 SCRA 628 [1986]). We have explicitly explained in the case of Franklin Barker Company of the Philippines v. Trajano, 157 SCRA 416 [1988] that: The test of "supervisory" or "managerial status" depends on whether, a person possesses authority to act in the interest of his employer in the matter specified in Article 212 (K) of the Labor Code and Section 1 (m) of its Implementing Rules and whether such authority is not merely routinary or clerical in nature, but requires the use of independent judgment. Thus, where such recommendatory powers as in the case at bar, are subject to evaluation, review and final action by the department heads and other higher executives of the company, the same, although present, are not effective and not an exercise of independent judgment as required by law (National Warehousing Corp., v. CIR, 7 SCRA 602-603 [1963]). The public respondent, in its factual findings, found that the supervisory employees sought to be represented

by the respondent union are not involved in policymaking and their recommendatory powers are not even instantly effective since the same are still subject to review by at least three managerial heads (department manager, personnel manager and general manager) before final action can be taken. Hence, it is evidently settled that the said employees do not possess a managerial status. The fact that their work designations are either managers or supervisors is of no moment considering that it is the nature of their functions and not the said nomenclatures or titles of their jobs which determines their statuses (see Engineering Equipment, Inc. v. National Labor Relations Commission, 133 SCRA 752 [1984] citing National Waterworks and Sewerage Authority v. NWSA Consolidated Unions, 11 SCRA 766 [1964]). Under the old Industrial Peace Act (Republic Act No. 875), the term "supervisors" had the following definition, to wit: Sec. 2. Definitions As used in this Act. xxx xxx xxx (k) "'Supervisor" means any person having authority in the interest of an employer, to hire, transfer, suspend, lay-off, recall, discharge, assign, recommend, or discipline, other employees, or responsibly to direct them, and to adjust their grievances, or effectively to recommend such acts if, in connection with the foregoing, the exercise of such authority is not of a merely routinary or clerical nature

but requires the use of independent judgment. Section 3 of the same Act further provides that the supervisors as defined above shall not be eligible for membership in a labor organization of employees under their supervision but may form separate organizations of their own. With the enactment of the Labor Code (Presidential Decree No. 442 as amended,), the term "supervisor" was replaced by "managerial employee." Book V, Art. 212, subparagraph (k) of said Code reads: (k) "Managerial Employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions. All employees not falling within this definition are considered rank and file employees for purposes of this Book. Art. 245 of the aforementioned Code prohibits managerial employees from joining, assisting or forming any labor organization. Hence, employees who had then formed supervisory unions were classified either as managerial or rank-and-file depending on their functions in their respective work assignments. (Bulletin Publishing Corp. v. Sanchez, supra.) The recent amendments to the Labor Code contain separate definitions for managerial and supervisory

employees. Section 4 of Republic Act No. 6715 states that: Section 4, Article 212 of the Labor Code of the Philippines, as amended, is further amended to read as follows: xxx xxx xxx (m) "Managerial Employee" is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such management actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank and file employees for purposes of this Book. Section 18 of the same Act retains the provision on the ineligibility of managerial employees to join any labor organization. However, the right of supervisory employees to form their own union is revived under the said section which states, in part, to wit: . . . 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. Thus, the right of supervisory employees to organize under the Industrial Peace Act is once more recognized under the present amendments to the Labor Code. (see Adamson & Adamson Inc., v. The Court of Industrial Relations, 127 SCRA 268 [1984]). In the absence of any grave abuse of discretion on the part of the public respondent as to the status of the members of the respondent union, we adopt its findings that the employees sought to be represented by the respondent union are rank-and-file employees. There is no evidence in the records which sufficiently distinguishes and clearly separates the group of employees sought to be represented by the private respondents into managerial and supervisory on one hand or supervisory and rank-and-file on the other. The respondents' pleadings do not show the distinctions in functions and responsibilities which differentiate the managers from the supervisors and sets apart the rankand-file from either the managerial or supervisory groups. As a matter of fact, the formation of a supervisor's union was never before the Labor Arbiter and the Bureau of Labor Relations and neither is the issue before us. We, therefore, abide by the public respondent's factual findings in the absence of a showing of grave abuse of discretion. In the case at bar, there is no dispute that the petitioner is the exclusive bargaining representative of the rankand-file employees of Triumph International. A careful examination of the records of this case reveals no evidence that rules out the commonality of interests

among the rank-and-file members of the petitioner and the herein declared rank-and-file employees who are members of the respondent union. Instead of forming another bargaining unit, the law requires them to be members of the existing one. The ends of unionism are better served if all the rank-and-file employees with substantially the same interests and who invoke their right to self-organization are part of a single unit so that they can deal with their employer with just one and yet potent voice. The employees' bargaining power with management is strengthened thereby. Hence, the circumstances of this case impel us to disallow the holding of a certification election among the workers sought to be represented by the respondent union for want of proof that the right of said workers to selforganization is being suppressed. Once again we enunciate that the proliferation of unions in an employer unit is discouraged as a matter of policy unless compelling reasons exist which deny a certain and distinct class of employees the right to selforganization for purposes of collective bargaining. (see General Rubber & Footwear Corporation v. Bureau of Labor Relations, 155 SCRA 283 [1987]). Anent the correlative issue of whether or not the contract-bar rule applies to the present case, Rule V, Section 3, Book V of the Implementing Rules and Regulations of the Labor Code is written in plain and simple terms. It provides in effect that if a collective bargaining agreement validly exists, a petition for certification election can only be entertained within sixty (60) days prior to the expiry date of said agreement. Respondent union's petition for certification election was filed on November 25, 1987. At the time of the filing of the said petition, a valid and existing CBA was present

between petitioner and Triumph International. The CBA was effective up to September 24, 1989. There is no doubt that the respondent union's CBA constituted a bar to the holding of the certification election as petitioned by the respondent union with public respondent. (see Associated Trade Unions [ATU] v. Trajano, 162 SCRA 318 [1988], Federation of Democratic Trade Union v. Pambansang Kilusan ng Paggawa, 156 SCRA 482 [1987]); Tanduay Distillery Labor Union v. National Labor Relations Commission, 149 SCRA 470 [1987]). The members of the respondent union should wait for the proper time. The CBA in this case expired on September 24, 1989. If a new CBA with the same provisions as the old one has been executed, its terms should be amended so as to conform to the tenor of this decision. WHEREFORE, in view of the foregoing, the assailed resolutions of the public respondent dated August 24, 1988 and October 28, 1988 are hereby SET ASIDE. The restraining order dated January 11, 1989 issued by the Court is made permanent. SO ORDERED. Fernan, C.J., Bidin and Corts, JJ., concur. Feliciano, J., took no part. THIRD DIVISION

[G.R. No. 142000. January 22, 2003]

TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED, petitioner, vs. TAGAYTAY HIGHLANDS EMPLOYEES UNIONPGTWO,respondent. DECISION CARPIO-MORALES, J.: Before this Court on certiorari under Rule 45 is the petition of the Tagaytay Highlands International Golf Club Incorporated (THIGCI) assailing the February 15, 2002 decision of the Court of Appeals denying its petition to annul the Department of Labor and Employment (DOLE) Resolutions of November 12, 1998 and December 29, 1998. On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)Philippine Transport and General Workers Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said to represent majority of the rank-and-file employees of THIGCI, filed a petition for certification election before the DOLE Mediation-Arbitration Unit, Regional Branch No. IV. THIGCI, in its Comment[1] filed on November 27, 1997, opposed THEUs petition for certification election on the ground that the list of union members submitted by it was defective and fatally flawed as it included the names and signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as employees of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192 signatories to the petition, only 71 were actual rank-and-file employees of THIGCI.

THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees which it annexed[2] to its Comment to the petition for certification election. And it therein incorporated the following tabulation[3] showing the number of signatories to said petition whose membership in the union was being questioned as disqualified and the reasons for disqualification: # of Signatures 13 6 2 53 Reasons for Disqualification Supervisors of THIGCI Resigned employees of THIGCI AWOL employees of THIGCI Rank-and-file employees of The Country Club at Tagaytay Highlands, Inc. Supervisors of The Country Club at Tagaytay Highlands, Inc. Resigned employees of The Country Club at

14

Tagaytay Highlands, Inc. 3 Terminated employees of The Country Club at Tagaytay Highlands, Inc. AWOL employees of The Country Club at Tagaytay Highlands, Inc. Signatures that cannot be deciphered Names in list that were erased Names with first names only

Department Order provides that the legitimacy of its registration cannot be subject to collateral attack, and for as long as there is no final order of cancellation, it continues to enjoy the rights accorded to a legitimate organization. THEU thus concluded in its Reply[7] that under the circumstances, the Med-Arbiter should, pursuant to Article 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09, automatically order the conduct of a certification election. By Order of January 28, 1998, [8] DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election among the rank-and-file employees of THIGCI in this wise, quotedverbatim: We evaluated carefully this instant petition and we are of the opinion that it is complete in form and substance. In addition thereto, the accompanying documents show that indeed petitioner union is a legitimate labor federation and its local/chapter was duly reported to this Office as one of its affiliate local/chapter. Its due reporting through the submission of all the requirements for registration of a local/chapter is a clear showing that it was already included in the roster of legitimate labor organizations in this Office pursuant to Department Order No. 9 Series of 1997 with all the legal right and personality to institute this instant petition. Pursuant therefore to the provisions of Article 257 of the Labor Code, as amended, and its Implementing Rules as amended by Department Order No. 9, since the respondents establishment is unorganized, the holding of a certification election is mandatory for it was clearly established that petitioner is a legitimate labor organization. Giving due course to

4 16 2

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.[4] Replying to THIGCIs Comment, THEU asserted that it had complied with all the requirements for valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE Department Order No. 9, series of 1997,[5] on account of which it was duly granted a Certification of Affiliation by DOLE on October 10, 1997;[6] and that Section 5, Rule V of said

this petition is therefore proper and appropriate.[9] (Emphasis supplied) Passing on THIGCIs allegation that some of the union members are supervisory, resigned and AWOL employees or employees of a separate and distinct corporation, the Med-Arbiter held that the same should be properly raised in the exclusion-inclusion proceedings at the pre-election conference. As for the allegation that some of the signatures were secured through fraudulent and deceitful means, he held that it should be coursed through an independent petition for cancellation of union registration which is within the jurisdiction of the DOLE Regional Director. In any event, the Med-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. Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-Baldoz, by authority of the DOLE Secretary, issued DOLE Resolution of November 12, 1998[10]setting aside the June 4, 1998 Resolution dismissing the petition for certification election. In the November 12, 1998 Resolution, Undersecretary Dimapilis-Baldoz held that

since THEU is a local chapter, the twenty percent (20%) membership requirement is not necessary for it to acquire legitimate status, hence, the alleged retraction and withdrawal of support by 45 of the 70 remaining rank-and-file members . . . cannot negate the legitimacy it has already acquired before the petition; that rather than disregard the legitimate status already conferred on THEU by the Bureau of Labor Relations, the names of alleged disqualified supervisory employees and employees of the Country Club, Inc., a separate and distinct corporation, should simply be removed from the 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. The records of the case were thus ordered remanded to the Office of the Med-Arbiter for the conduct of certification election. THIGCIs Motion for Reconsideration of the November 12, 1998 Resolution having been denied by the DOLE Undersecretary by Resolution of December 29, 1998,[11] it filed a petition for certiorari before this Court which, by Resolution of April 14, 1999,[12] referred it to the Court of Appeals in line with its pronouncement in National Federation of Labor (NFL) v. Hon. Bienvenido E. Laguesma, et al.,[13] and in strict observance of the hierarchy of courts, as emphasized in the case of St. Martin Funeral Home v. National Labor Relations Commission.[14] By Decision of February 15, 2000,[15] the Court of Appeals denied THIGCIs Petition for Certiorari and affirmed the DOLE Resolution dated November 12, 1998. It held that while a petition for

certification election is an exception to the innocent bystander rule, hence, the employer may pray for the dismissal of such petition on the basis of lack of mutuality of interests of the members of the union as well as lack of employer-employee relationship following this Courts ruling in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union et al[16]and Dunlop Slazenger [Phils.] v. Hon. Secretary of Labor and Employment et al,[17] petitioner failed to adduce substantial evidence to support its allegations. Hence, the present petition for certiorari, raising the following ISSUES/ASSIGNMENT OF ERRORS: THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMER 1998 HOLDING THAT SUPERVISORY EMPLOYEES AND NON-EMPLOYEES COULDSIMPLY BE REMOVED FROM APPELLEES ROSTER OF RANK-AND-FILE MEMBERSHIP INSTEAD OF RESOLVING THE LEGITIMACY OF RESPONDENT UNIONS STATUS THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMBER 1998 HOLDING THAT THE DISQUALIFIED EMPLOYEES STATUS COULD READILY BE RESOLVED DURING THE INCLUSION AND EXCLUSION PROCEEDINGS THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THAT THE ALLEGATIONS OF PETITIONER HAD BEEN DULY PROVEN BY FAILURE OF RESPONDENT UNION TO DENY THE SAME AND BY

THE SHEER WEIGHT OF EVIDENCE INTRODUCED BY PETITIONER AND CONTAINED IN THE RECORDS OF THE CASE[18] The statutory authority for the exclusion of supervisory employees in a rank-and-file union, and vice-versa, is Article 245 of the Labor Code, to wit: Article 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. While above-quoted Article 245 expressly prohibits supervisory employees from joining a rank-and-file union, it does not provide what would be the effect if a rank-and-file union counts supervisory employees among its members, or vice-versa. Citing Toyota[19] 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. Ledesma[20] 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] (Underscoring and emphasis supplied), petitioner contends that, quoting Toyota, [i]t becomes necessary . . ., anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code.[22] Continuing, petitioner argues that without resolving the status of THEU, the DOLE Undersecretary conveniently deferred the resolution on the serious infirmity in the membership of [THEU] and ordered the holding of the certification election which is frowned upon as the following ruling of this Court shows: We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of the respondent union can be remedied in the preelection conference thru the exclusion-inclusion proceedings wherein those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters. Public respondent gravely misappreciated the basic antipathy between the interest of supervisors and the interest of rank-and-file employees. Due to the irreconcilability of their interest

we held in Toyota Motor Philippines v. Toyota Motors Philippines Corporation Labor Union, viz: x x x Clearly, based on this provision [Article 245], a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot posses any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code. (Emphasis by petitioner) (Dunlop Slazenger (Phils.), v. Secretary of Labor, 300 SCRA 120 [1998]; Underscoring and emphasis supplied by petitioner.) The petition fails. After a certificate of registration is issued to a union, its legal personality cannot be subject to collateral attack. It may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book IV of the Rules to Implement the Labor Code (Implementing Rules) which section reads: Sec. 5. Effect of registration. The labor organization or workers association shall be deemed registered and vested with legal personality on the date of issuance of

its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in accordance with these Rules. (Emphasis supplied) The grounds for cancellation of union registration are provided for under Article 239 of the Labor Code, as follows: Art. 239. Grounds for cancellation of union registration. The following shall constitute grounds for cancellation of union registration: (a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification; (b) Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or ratification of the constitution and by-laws or amendments thereto; (c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to subject these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election; (d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the losing of every

fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself; (e) Acting as a labor contractor or engaging in the cabo system, or otherwise engaging in any activity prohibited by law; (f) Entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law; (g) Asking for or accepting attorneys fees or negotiation fees from employers; (h) Other than for mandatory activities under this Code, checking off special assessments or any other fees without duly signed individual written authorizations of the members; (i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau; and (j) Failure to comply with the requirements under Articles 237 and 238, (Emphasis supplied), while the procedure for cancellation of registration is provided for in Rule VIII, Book V of the Implementing Rules. The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article 239 of above-quoted Article 239 of the Labor Code.

THEU, having been validly issued a certificate of registration, should be considered to have already acquired juridical personality which may not be assailed collaterally. As for 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: [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 nonadversary, 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 Philippines, Inc. v. Secretary of Labor:[26] Products

Designation should be reconciled with the actual job description of subject employees x x x The mere fact that an employee is designated manager does not necessarily make him one. Otherwise, there would be an absurd situation where one can be given the title just to be deprived of the right to be a member of a union. In the case of National Steel Corporation vs. Laguesma (G. R. No. 103743, January 29, 1996), it was stressed that: What is essential is the nature of the 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. (Emphasis supplied).[27] WHEREFORE, the petition is hereby DENIED. Let the records of the case be remanded to the office of origin, the Mediation-Arbitration Unit, Regional Branch No. IV, for the immediate conduct of a certification election subject to the usual pre-election conference. SO ORDERED.

Puno, (Chairman), Panganiban, Gutierrez and Corona, JJ., concur. SECOND DIVISION

Sandoval-

starting salaries of future employees, resulting from the changes made in the job grades and structures, which was unilaterally implemented by the Bank retroactive to January 1, 1993. The program in question was announced by the Bank on January 18, 1993. In a letter dated January 20, 1993,[2] the Union, through its President, Peter Paul Gamelo, reiterated its previous verbal objections to the Banks unilateral decision to devise and put into effect the said program because it allegedly was in violation of the existing collective bargaining agreement (CBA) between the parties and thus constituted unfair labor practice. The Union demanded the suspension of the implementation of the JEP and proposed that the same be instead taken up or included in their upcoming CBA negotiations. The Bank replied in a letter dated January 25, 1993[3] that the JEP was issued in compliance with its obligation under the CBA, apparently referring to Article III, Section 18 thereof which provides that: Within the lifetime of this Agreement the BANK shall conduct a job evaluation of employee positions. The implementation timetable of the said exercise shall be furnished the UNION by the BANK within two (2) months from the signing of this Agreement. This prompted the Union to undertake concerted activities to protest the implementation of the JEP, such as whistle blowing during office hours starting on March 15, 1993 up to the 23rd day, and writing to clients of the Bank allegedly to inform them of the real situation then obtaining and of an imminent disastrous showdown between the Bank and the Union.

[G.R. No. 125038. November 6, 1997]

THE

HONGKONG AND SHANGHAI BANKING CORPORATION EMPLOYEES UNION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION AND THE HONGKONG AND SHANGHAI BANKING CORPORATION, LTD., respondents. DECISION

REGALADO, J.: In an Order dated November 27, 1995,[1] respondent National Labor Relations Commission (NLRC) reversed and set aside the order issued by Labor Arbiter Felipe T. Garduque II which dismissed and remanded for further proceedings the case for unfair labor practice filed by private respondent Hongkong and Shanghai Banking Corporation, Ltd. (the Bank) against petitioner Hongkong and Shanghai Banking Corporation Employees Union (the Union), the recognized bargaining representative of the Banks regular rank and file employees. This petition for certiorariimpugns the aforesaid Order of respondent commission. The case at bar arose from the issuance of a nonexecutive job evaluation program (JEP) lowering the

The Union engaged in said activities despite the fact that as early as February 11, 1993,[4] it had already initiated the renegotiation of the non-representational provisions of the CBA by submitting their proposal to the Bank, to which the latter submitted a reply. As a matter of fact, negotiations on the CBA commenced on March 5, 1993 and continued through March 24, 1993 when the Bank was forced to declare a recess to last for as long as the Union kept up with its concerted activities. The Union refused to concede to the demand of the Bank unless the latter agreed to suspend the implementation of the JEP. Instead of acquiescing thereto, the Bank filed on April 5, 1993[5] with the Arbitration Branch of the NLRC a complaint for unfair labor practice against the Union allegedly for engaging in the contrived activities against the ongoing CBA negotiations between the Bank and the Union in an attempt to unduly coerce and pressure the Bank into agreeing to the Unions demand for the suspension of the implementation of the JEP. It averred that such concerted activities, despite the ongoing CBA negotiations, constitute unfair labor practice (ULP) and a violation of the Unions duty to bargain collectively under Articles 249 (c) and 252 of the Labor Code. The Union filed a Motion to Dismiss[6] on the ground that the complaint states no cause of action. It alleged that its united activities were actually being waged to protest the Banks arbitrary imposition of a job evaluation program and its unjustifiable refusal to suspend the implementation thereof. It further claimed that the unilateral implementation of the JEP was in violation of Article I, Section 3 of the CBA which prohibits a diminution of existing rights, privileges and benefits already granted and enjoyed by the employees. To be sure, so the Union contended, the

object of the Bank in downgrading existing CBA salary scales, despite its sanctimonious claim that the reduced rates will apply only to future employees, is to torpedo the salary structure built by the Union through three long decades of periodic hard bargaining with the Bank and to thereafter replace the relatively higher-paid unionized employees with cheap newly hired personnel. In light of these circumstances, the Union insists that the right to engage in these concerted activities is protected under Article 246 of the Labor Code regarding non-abridgment of the right to selforganization and, hence, is not actionable in law. In its Opposition,[7] the Bank stated that the Union was actually challenging merely that portion of the JEP providing for a lower rate of salaries for future employees. Contrary to the Unions allegations in its motion to dismiss that the JEP had resulted in diminution of existing rights, privileges and benefits, the program has actually granted salary increases to, and in fact is already being availed of by, the rank and file staff. The Unions objections are premised on the erroneous belief that the salary rates for future employees is a matter which must be subject of collective bargaining negotiation. The Bank believes that the implementation of the JEP and the resultant lowering of the starting salaries of future employees, as long as there is no diminution of existing benefits and privileges being accorded to existing rank and file staff, is entirely a management prerogative. In an Order dated July 29, 1993,[8] the labor arbiter dismissed the complaint with prejudice and ordered the parties to continue with the collective bargaining negotiations, there having been no showing that the Union acted with criminal intent in refusing to comply with its duty to bargain but was motivated by the

refusal of management to suspend the implementation of its job evaluation program, and that it is not evident that the concerted activities caused damage to the Bank. It concluded that, at any rate, the Bank is not left without recourse, in case more aggressive and serious acts be committed in the future by the Union, since it could institute a petition to declare illegal such acts which may constitute a strike or picketing. On appeal, respondent NLRC declared that based on the facts obtaining in this case, it becomes necessary to resolve whether or not the Unions objections to the implementation of the JEP are valid and, if it is without basis, whether or not the concerted activities conducted by the Union constitute unfair labor practice. It held that the labor arbiter exceeded his authority when he ordered the parties to return to the bargaining table and continue with CBA negotiations, considering that his jurisdiction is limited only to labor disputes arising from those cases provided for under Article 217 of the Labor Code, and that the labor arbiters participation in this instance only begins when the appropriate complaint for unfair labor practice due to a partys refusal to bargain collectively is filed. Consequently, the case was ordered remanded to the arbitration branch of origin for further proceedings in accordance with the guidelines provided for therein. Hence, this petition. The Union asserts that respondent NLRC committed grave abuse of discretion in failing to decide that it is not guilty of unfair labor practice considering that the concerted activities were actually directed against the implementation of the JEP and not at the ongoing CBA negotiations since the same were launched even before the start of negotiations. Hence, it cannot be deemed to

have engaged in bad-faith bargaining. It claims that respondent NLRC gravely erred in remanding the case for further proceedings to determine whether the objections raised by the Union against the implementation of the JEP are valid or not, for the simple reason that such is not the issue involved in the complaint for ULP filed by the Bank but rather whether the Union is guilty of bargaining in bad faith in violation of the Labor Code. It is likewise averred that Labor Arbiter Garduque cannot be considered to have exceeded his authority in ordering the parties to proceed with the CBA negotiations because it was precisely a complaint for ULP which the Bank filed against the Union. We find no merit in the petition. The main issue involved in the present case is whether or not the labor arbiter correctly ordered the dismissal with prejudice of the complaint for unfair labor practice on the bases merely of the Complaint, the Motion to Dismiss as well as the Opposition thereto, filed by the parties. We agree with respondent NLRC that there are several questions that need to be threshed out before there can be an intelligent and complete determination of the propriety of the charges made by the Bank against the Union. A perusal of the allegations and arguments raised by the parties in the Motion to Dismiss and the Opposition thereto will readily reveal that there are several issues that must preliminarily be resolved and which will require the presentation of evidence other than the bare allegations in the pleadings which have been filed, in order to ascertain the propriety or impropriety of the ULP charge against the Union. Foremost among the issues requiring resolution are:

1. Whether or not the unilateral implementation of the JEP constitutes a violation of the CBA provisions requiring the Bank to furnish the Union with the job evaluation implementation timetable within two months from the signing of the CBA on July 30, 1990,[9] and prohibiting the diminution of existing rights, privileges and benefits already granted and enjoyed by the employees;[10] 2. Whether or not the concerted acts committed by the Union were done with just cause and in good faith in the lawful exercise of their alleged right under Article 246 of the Labor Code on non-abridgment of the right to self-organization; and 3. Whether or not the fixing of salaries of future employees pursuant to a job evaluation program is an exclusive management prerogative or should be subject of collective bargaining negotiation. It does not fare petitioner any better that it had, wittingly or unwittingly, alleged in its Consolidated Reply[11] that the concerted actions began on January 22, 1993 even before the commencement of CBA negotiations which started in March, 1993. Apparently that was an attempt on the part of the Union to rectify the incriminating pronouncement of the labor arbiter in his questioned order to the effect that the challenged activities occurred from March 15 to 23, 1993 during the CBA negotiations. This seemingly conflicting factual allegations are crucial in resolving the issue of whether or not the concerted activities were committed in violation of the Unions duty to bargain collectively and would therefore constitute unfair labor practice. Likewise, the labor arbiter, in finding that the Union was not motivated by any criminal intent in resorting to said concerted activities, merely gave a sweeping

statement without bothering to explain the factual and evidentiary bases therefor. The declaration that there was no damage caused to the Bank by reason of such Union activities remains unsubstantiated. Nowhere is there any showing in the labor arbiters order of dismissal from which it can be fairly inferred that such a statement is supported by even a preponderance of evidence. What purportedly is an adjudication on the merits is in truth and in fact a short discourse devoid of evidentiary value but very liberal with generalities and hasty conclusions. The fact that there is an alternative remedy available to the Bank, as the labor arbiter would suggest, will not justify an otherwise erroneous order. It bears emphasizing that by the very nature of an unfair labor practice, it is not only a violation of the civil rights of both labor and management but is also a criminal offense against the State which is subject to prosecution and punishment.[12] Essentially, a complaint for unfair labor practice is no ordinary labor dispute and therefore requires a more thorough analysis, evaluation and appreciation of the factual and legal issues involved. One further point. The need for a more than cursory disposition on the unfair labor practice issue is made doubly exigent in view of the Banks allegation in its Comment[13] that a strike has been launched by the Union specifically to protest the implementation of the JEP. Although the strike incident is not an issue in this case, this supervening event bespeaks the worsening situation between the parties that calls for a more circumspect assessment of the actual issues herein involved. Necessarily, a determination of the validity of the Banks unilateral implementation of the JEP or the

Unions act of engaging in concerted activities involves an appraisal of their motives. In cases of this nature, motivations are seldom expressly avowed, and avowals are not always candid. There must thus be a measure of reliance on the administrative agency. It was incumbent upon the labor arbiter, in the first instance, to weigh such expressed motives in determining the effect of an otherwise equivocal act. The Labor Code does not undertake the impossible task of specifying in precise and unmistakable language each incident which constitutes an unfair labor practice. Rather, it leaves to the court the work of applying the laws general prohibitory language in light of infinite combinations of events which may be charged as violative of its terms.[14] It has been held that the crucial question whether or not a party has met his statutory duty to bargain in good faith typically turns on the facts of the individual case. There is no per se test of good faith in bargaining. Good faith or bad faith is an inference to be drawn from the facts. To some degree, the question of good faith may be a question of credibility. The effect of an employers or a unions actions individually is not the test of good-faith bargaining, but the impact of all such occasions or actions, considered as a whole, and the inferences fairly drawn therefrom collectively may offer a basis for the finding of the NLRC.[15] This, the court or the quasi-judicial agency concerned can do only after it has made a comprehensive review of the allegations made in the pleadings filed and the evidence presented in support thereof by the parties, but definitely not where, as in the present case, the accusation of unfair labor practice was negated and subsequently discharged on a mere motion to dismiss.

It is a well-settled rule that labor laws do not authorize interference with the employers judgment in the conduct of his business. The Labor Code and its implementing rules do not vest in the labor arbiters nor in the different divisions of the NLRC nor in the courts managerial authority.[16] The hiring, firing, transfer, demotion, and promotion of employees has been traditionally identified as a management prerogative subject to limitations found in the law, a collective bargaining agreement, or in general principles of fair play and justice. This is a function associated with the employers inherent right to control and manage effectively its enterprise. Even as the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.[17] Accordingly, this Court, in a number of cases, has recognized and affirmed the prerogative of management to implement a job evaluation program or a reorganization for as long as it is not contrary to law, morals or public policy. Thus, in Batongbacal vs. Associated Bank, et al.,[18] involving the dismissal of an assistant vicepresident for refusing to tender his courtesy resignation which the bank required in line with its reorganization plan, the Court held, among others, that it is not prepared to preempt the employers prerogative to grant salary increases to its employees by virtue of the implementation of the reorganization plan which thereby caused a distortion in salaries, notwithstanding that there is a semblance of discrimination in this aspect of the banks organizational setup.

In the case of National Sugar Refineries Corporation vs. National Labor Relations Commission, et al.,[19] the petitioner implemented a job evaluation program affecting all employees, from rank and file to department heads. The JEP was designed to rationalize the duties and functions of all positions, reestablish levels of responsibility, and reorganize both wage and operational structures. Jobs were ranked according to effort, responsibility, training and working conditions and relative worth of the job. As a result, all positions were re-evaluated, and all employees were granted salary adjustments and increases in benefits commensurate to their actual duties and functions. With the JEP, the supervisory employees, who were members of the respondent Union therein and were formerly treated in the same manner as rank and file employees, were considered no longer entitled to overtime, rest day and holiday pay but their basic salaries increased by 50%. The respondents therein sued for recovery of those benefits. In upholding managements prerogative implement the JEP, the Court held therein that: to

judgment of the employer in the conduct of its business. Such management prerogative may be availed of without fear of any liability so long as it is exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of employees under special laws or valid agreement and are not exercised in a malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite. Just recently, this Court had the occasion to reiterate and uphold the established and unequivocal right of an employer to implement a reorganization in the valid exercise of its management prerogative, thus: Being a regular employee, petitioner is of the view that she had already acquired a vested right to the position of Executive Secretary, together with its corresponding grade, rank and salary, which cannot be impaired by the 1991 reorganization of CENECO. x x x

In the case at bar, private respondent union has miserably failed to convince this Court that the petitioner acted in bad faith in implementing the JE Program. There is no showing that the JE Program was intended to circumvent the law and deprive the members of respondent union of the benefits they used to receive. x x x It is the prerogative of management to regulate, according to its discretion and judgment, all aspects of employment. This flows from the established rule that labor law does not authorize the substitution of the

In Aurelio vs. National Labor Relations Commission, et al., we upheld the power of the board of directors of a corporation to implement a reorganization, including the abolition of various positions, as implied or incidental to its power to conduct the regular business affairs of the corporation. In recognition of the right of management to conduct its own business affairs in achieving its purpose, we declared that management is at liberty, absent any malice on its part, to abolish positions which it deems no longer necessary.

This Court, absent any finding of bad faith on the part of management, will not deny it the right to such initiative simply to protect the person holding that office. In other words, where there is nothing that would indicate that an employees position was abolished to ease him out of employment, the deletion of that position should be accepted as a valid exercise of management prerogative. x x x

If the purpose of a reorganization is to be achieved, changes in positions and ranking of employees should be expected. To insist on ones old position and ranking after a reorganization would render such endeavor ineffectual. Here, to compel private respondents to give petitioner her old ranking would deprive them of their right to adopt changes in the cooperatives personnel structure as proposed by the Steering Committee. x x x

No ill will can be ascribed to private respondents as all the positions specified in the old plantilla were abolished and all other employees were given new appointments. In short, petitioner was not singled out. She was not the only employee affected by the reorganization. The reorganization was fair to petitioner, if not to all of the employees of CENECO. It should be remembered that petitioners new appointment was made as a result of valid organizational changes. A thorough review of both the indispensable and the unessential positions was undertaken by a committee, specifically formed for this purpose, before the Board of Directors abolished all the positions. Based on the qualifications and aptitude of petitioner, the committee and, subsequently, private respondents, deemed it best to appoint petitioner as Secretary of the Engineering Department. We cannot meddle in such a decision lest we interfere with the private respondents right to independently control and manage their operations absent any unfair or inequitable acts.

x x x As we have held, security of tenure, while constitutionally guaranteed, cannot be used to deprive an employer of its prerogatives under the law. Even if the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives.[20] Notwithstanding the relevance of the foregoing disquisition, considering however the factual antecedents in this case, or the lack of a complete presentation thereof, we are constrained to refrain from ruling outright in favor of the Bank. While it would appear that remanding the case would mean a further delay in its disposition, we are not inclined to sacrifice equity and justice for procedural technicalities or expediency. The order dismissing the complaint for ULP with prejudice, to say the least, leaves much to be desired. Anent the question on whether or not the labor arbiter has jurisdiction to order the parties to return to and continue with the collective bargaining negotiations, there is a commentary to the effect that, as one of the reliefs which may be granted in ULP cases, the Court may, in addition to the usual cease and desist orders,

issue an affirmative order to the employer to bargain with the bargaining agent, as the exclusive representative of its employees, with respect to the rate of pay, hours of work, and other conditions of employment.[21] On this aspect, respondent NLRC stands to be reversed. Nevertheless, its directive on this point is deemed vacated and ineffectual by our decision to remand the case for further proceedings. WHEREFORE, subject to the foregoing observation, the challenged disposition of respondent National Labor Relations Commission is hereby AFFIRMED. SO ORDERED. Puno, and Mendoza, JJ., concur. SECOND DIVISION LORNA DISING PUNZAL, Petitioner, G.R. Nos. Present: 170384-85

DECISION CARPIO MORALES, J.: Petitioner, Lorna Dising Punzal, had been

working for respondent, ETSI Technologies, Inc. (ETSI), for 12 years prior to the termination of her services on November 26, 2001 on which date she was holding the position of Department Secretary. On October 30, 2001, petitioner sent an

electronic mail (e-mail) message to her officemates announcing the holding of a Halloween party that was to be held in the office the following day. The e-mail message read verbatim:

- versus -

QUISUMBING, J., Chairperson, CARPIO, Dear ETSI-JMT Colleagues, CARPIO MORALES, TINGA, and Good day! VELASCO, JR., JJ. As you all know, tomorrow is the day before HALLOWEEN. And many of our kids will go around TRICK OR TREATING. We will be dressing them up March in costumes of all sorts, from cute to outrageous, from wild to scary. What we want to have is a similar activity here in the office. So we invite you to participate in this effort. You can also

ETSI TECHNOLOGIES, INC., Promulgated: WERNER GEISERT, and CARMELO D. REMUDARO, Respondents. 9, 2007 x------------------------------------- - - - - - -x

dress your kids up in funny costumes. Also the kids will then go around the office Trick or Treating. So, we ask you to prepare your Treats, like candies, biscuits, cookies, etc., (Cash is also welcome for parents like me . . . he he he) Why are we doing this? Well, we just want the kids to have a good time. Kung gusto ninyo, mag-costume din kayo. Alright! See you tomorrow morning, [October 31, 2001].[1] (Underscoring supplied)

Sorry for the mail that I sent you, unfortunately the SVP of ETSI Technologies, Inc. did not agree to our idea to bring our children in the office for the TRICK or TREATING. He was so unfairpara bang palagi siyang iniisahan sa trabahobakit most of the parents na mag-joined ang anak ay naka-VL naman. Anyway, solohin na lang niya bukas ang office. Anyway, to those parents who would like to bring their Kids in Megamall there will be Trick or Treating at Mc Donalds Megamall Bldg. A at 10:00 AM tomorrow and lets not spoil the fun for our kids.[2] (Underscoring supplied)

Petitioners

immediate

superior,

respondent

Carmelo Remudaro (Remudaro), who was one of those to whom the e-mail message was sent, advised petitioner to first secure the approval of the Senior Vice President, respondent Werner Geisert (Geisert), for the holding of the party in the office. Petitioner soon learned that Geisert did not approve of the plan to hold a party in the office. She thereupon sent also on October 30, 2001 another e-mail message to her officemates, reading verbatim:

Remudaro and Arnold Z. David (David), the Assistant Vice President of Human Resources/TQM of ETSI, later informed petitioner, by letter of November 13, 2001, that Geisert got a copy of her e-mail message and that he required her to explain in writing within 48 hours why she . . . should not be given disciplinary action for committing Article IV, No. 5 & 8 Improper conduct or acts of discourtesy or disrespect and Making malicious statements concerning Company Officer, whereby such offenses may be subject to suspension to termination

depending upon the gravity of the offense/s as specified in our ETSIs Code of Conduct and Discipline.[3] (Emphasis in the original)

complaint[7] for illegal dismissal against ETSI, Geisert, and Remudaro. By Order of November 26, 2002, the Labor Arbiter

Petitioner

replied

by

letter

of November

14,

dismissed petitioners complaint, finding that she was legally dismissed for serious misconduct, and that she was afforded due process.[8] On petitioners appeal, the NLRC, by

2001 that she had no malicious intention in sending the second e-mail message and that she never expected such kind of words can be called as acts of discourtesy or disrespect. [4] On November 19, 2001, Geisert and Remudaro conferred with petitioner to give her a chance to explain her side.[5] David explanation and Remudaro not subsequently acceptable effective immediately, sent and for

Resolution[9] dated October 27, 2003, found that while she was indeed guilty of misconduct, the penalty of dismissal was disproportionate to her infraction.[10] The NLRC thus ordered that petitioner was entitled to reinstatement which, however, was no longer feasible due to strained relations. The NLRC thus ordered that petitioner be awarded separation pay equivalent to one month pay for every year of service, a period of at least six months to be considered one whole year.[11] Noting that petitioner was not entirely faultless, the NLRC denied her prayer for backwages[12] as well as her prayer for exemplary and moral damages and attorneys fees in the absence of the legal conditions justifying their award.[13]

petitioner a letter on November 26, 2001, finding her terminating her services,

committing Article IV, No[s]. 5 & 8, Improper conduct or act of discourtesy or disrespect and making malicious statements concerning company officer.[6] On February 11, 2002, petitioner filed before the National Labor Relations Commission (NLRC) a

Both parties filed their respective motions for reconsideration[14] which the NLRC denied.[15] Both parties thereupon filed their respective petitions for certiorari[16] with the Court of Appeals. In the petition of petitioner, docketed as CA-G.R. SP No. 83296, she questioned the denial of her prayer for backwages.[17] Upon the other hand, in the petition of respondent ETSI, et al., docketed as CA-G.R. SP No. 83205, they questioned the finding of illegal dismissal, the grant of separation pay, and the imputation of liability to Geisert and Remudaro.[18] In her comment to the petition of ETSI, et al. in CA-G.R. SP No. 83205, petitioner raised the issue of due process, alleging that her employer did not inform her of her right to be with assisted by counsel during the and conference Remudaro.[19] By Decision[20] of May 13, 2005, the Court of Appeals, which priorly consolidated the petitions of both parties, held that petitioners dismissal was in order:[21] The gravity of Punzals infraction is borne by the fact that her e-mail message respondents Geisert

to the workers of ETSI tended to cast scorn and disrespect toward a senior vice president of the company. The message itself resounds of subversion and undermines the authority and credibility of management. xxxx Also, this message was not a mere expression of dissatisfaction privately made by one person to another, but was circulated to everyone in the work area. The message was sent close at the heels of SVP Geiserts disapproval of Punzals plan to hold a Halloween affair in the office, because the said event would disrupt the operations and peace and order in the office. Punzal therefore displayed a tendency to act without managements approval, and even against managements will, as she invited her co-workers to join a trick or treating activity at another venue during office hours. The message also comes across as an encouragement to ignore SVP Geiserts authority, and portrayed him as unworthy of respect because of his unpopular personality. This is in clear violation of Article IV, Section 5 of the companys Code of Conduct and Discipline, which clearly imposes the penalty of suspension to dismissal, depending upon the gravity of

the offense in cases where an employee displays improper conduct or acts of discourtesy or disrespect to fellow employees, visitors, guests, clients, at any time. The imposition of the penalty of dismissal is proper, because of the gravity of Punzals misconduct, as earlier pointed out, and considering that: (1) Punzals statements were discourteous and disrespectful not only to a mere co-employee, but to a high ranking executive official of the company; (2) Punzals statements tended to ridicule and undermine the credibility and authority of SVP Geisert, and even encouraged disobedience to the said officer; (3) Punzals message was sent to a great number of employees of ETSI, which tended to sow dissent and disrespect to management among a great number of employees of ETSI; (4) Punzals message could not have been made in good faith, because the message itself used language that placed SVP Geisert in ridicule and portrayed him as

an object of scorn, betraying the senders bad faith. Given these circumstances, the fact that Punzals infraction occurred only once should be largely insignificant. The gravity and publicity of the offense as well as its adverse impact in the workplace is more than sufficient to place the same in the level of a serious misconduct.[22] (Underscoring supplied)

Contrary to petitioners contention, the Court of Appeals also found that due process was observed in her dismissal.[23] The Court of Appeals thus reinstated the Labor Arbiters Order. Thus it disposed: WHEREFORE, premises considered, the petition filed by Lorna Dising Punzal in CA-G.R. SP No. 83296 is hereby DISMISSED, while the petition filed by ETSI, Werner Geisert and Carmelo D. Remudaro is hereby GRANTED. The assailed Resolutions, dated October 27, 2003 and January 28, 2004, of the respondent National Labor Relations Commission are hereby SET ASIDE. In lieu thereof, the Decision of Labor Arbiter Joel S. Lustria, dated November 26, 2002,

dismissing the complaint filed by Lorna Dising Punzal is hereby REINSTATED. SO ORDERED.[24] (Underscoring supplied)

faith and constituted a grave violation of the companys code of discipline.[28] In Philippines Today, Inc. v. NLRC,[29] this Court, passing on the attitude or respect that an employee is expected to observe towards an employer, held: Alegres choice of words and way of expression betray his allegation that the memorandum was simply an opportunity to open the eyes of (Petitioner) Belmonte to the work environment in petitioners newspaper with the end in view of persuading (her) to take a hand at improving said environment. Apprising his employer (or top-level management) of his frustrations in his job and differences with his immediate superior is certainly not done in an abrasive, offensive, and disrespectful manner. A cordial or, at the very least, civil attitude, according due deference to ones superiors, is still observed, especially among high-ranking management officers. The Court takes judicial notice of the Filipino values of pakikisama and paggalang which are not only prevalent among members of a family and community but within organizations as well, including work sites. An employee is expected to extend due respect to management, the employer being the proverbial hen that lays the golden egg, so to speak. An aggrieved

Hence, petitioners present Petition for Review on Certiorari,[25] faulting the appellate court to have erred . . . WHEN IT RULED THAT PETITIONERS STATEMENT WAS DISCOURTEOUS AND DISRESPECTFUL CONSTITUTING GROSS DISRESPECT AND SERIOUS MISCONDUCT; . . . WHEN IT FOUND THAT DUE PROCESS WAS ACCORDED THE PETITIONER; . . . WHEN IT FAILED TO AWARD THE PETITIONER HER RIGHT TO REINSTATEMENT AND BACKWAGES.[26]

Petitioner posits that her second e-mail message was merely an exercise of her right to freedom of expression without any malice on her part.[27] On the other hand, ETSI, et al. maintain that petitioners second e-mail message was tainted with bad

employee who wants to unburden himself of his disappointments and frustrations in his job or relations with his immediate superior would normally approach said superior directly or otherwise ask some other officer possibly to mediate and discuss the problem with the end in view of settling their differences without causing ferocious conflicts. No matter how [much] the employee dislikes the employer professionally, and even if he is in a confrontational disposition, he cannot afford to be disrespectful and dare to talk with an unguarded tongue and/or with a bileful pen.[30] (Underscoring supplied)

join a trick or treating activity at another venue during office hours[33] (10:00 AM), October 31, 2001 being a Wednesday and there is no showing that it was declared a holiday, encouraging them to ignore Geiserts authority. Additionally, petitioner sent the e-mail message in reaction to Geiserts decision which he had all the right to make. That it has been a tradition in ETSI to celebrate occasions such as Christmas, birthdays, Halloween, and others[34] does not remove Geiserts prerogative to approve or disapprove plans to hold such celebrations in office premises and during company time. It is settled that x x x it is the prerogative of management to regulate, according to its discretion and judgment, all aspects of employment. This flows from the established rule that labor law does not authorize the substitution of the judgment of the employer in the conduct of its business. Such management prerogative may be availed of without fear of any liability so long as it is exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of employees under special laws or valid agreement and are not exercised in a

A scrutiny of petitioners second e-mail message shows that her remarks were not merely an expression of her opinion about Geiserts decision; they were directed against Geisert himself, viz: He was so unfair . . . para bang palagi siyang iniisahan sa trabaho. . . Anyway, solohin na lang niya bukas ang office. (Emphasis supplied)[31] As the Court of Appeals noted, petitioner, in her closing statement Anyway, to those parents who would like to bring their Kids in Megamall there will be Trick or Treating at Mc Donalds x x x tomorrow and lets not spoil the fun for our kids[32] even invited her co-workers to

malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite.[35] (Underscoring supplied)

the message x x x resounds of subversion and undermines the authority that and credibility displayed of a management[37] and petitioner

tendency to act without managements approval, and In the case at bar, the disapproval of the plan to hold the Halloween party on October 31, 2001 may not be considered to have been actuated by bad faith. As the Labor Arbiter noted: It may not be ignored that holding a trick or treat party in the office premises of respondent ETSI would certainly affect the operations of the office, since children will be freely roaming around the office premises, things may get misplaced and the noise in the office will simply be too hard to ignore. Contrary to complainants position, it is immaterial if the parents of the children who will participate in the trick or treat will be on vacation leave, since it is the work of the employees who will not be on leave and who will be working on that day which will be disrupted, possibly resulting in the disruption of the operations of the company.[36] (Underscoring supplied) Moreover, in circulating the second e-mail message, petitioner violated Articles III (8) and IV (5) of ETSIs Code of Conduct on making false or malicious statements concerning the Company, its officers and employees or its products and services[39] and improper conduct or acts of discourtesy or disrespect to fellow employees, visitors, guests, clients, at any time.[40] Petitioner invokes Samson v. National Labor even against managements will are well taken.[38]

Relations Commission[41] where this Court held that the dismissal of the therein petitioner was too harsh a penalty for uttering Si EDT [Epitacio D. Titong, the General Manager and President of the employer], bullshit yan, sabihin mo kay EDT yan and sabihin mo kay EDT, bullshit yan, while making the dirty finger gesture, and warning that the forthcoming national sales conference of the company would be a very bloody

Given the reasonableness of Geiserts decision that provoked petitioner to send the second e-mail message, the observations of the Court of Appeals that

one.

Petitioners misconduct committed

reliance was not

on Samson is related with the

bar, while petitioner did not address her e-mail message to Geisert, she circulated it knowing or at least, with reason to know that it would reach him. As ETSI notes, [t]hat [petitioner] circulated this e -mail message with the knowledge that it would reach the eyes of management may be reasonably concluded given that the first e-mail message reached her immediate supervisors attention.[48] Finally, in Samson, this Court found that the lack of urgency on the part of the respondent company in taking any disciplinary action against [the employee] negates the its charge that the 14 latters days misbehavior petitioner constituted serious misconduct.[49] In the case at bar, management acted after circulated the quoted e-mail message.[50] Petitioner asks that her 12 years of service to ETSI during which, so she claims, she committed no other offense be taken as a mitigating circumstance.[51] This Court has held, however, that the longer an employee stays in the service of the company, the greater is his responsibility for knowledge and compliance with the norms of conduct and the code of discipline in the company.[52]

misplaced. First, in that case, this Court found that the employees work as the offensive remarks were verbally made during an informal Christmas gathering of the employees, an occasion where tongues are more often than not loosened by liquor or other alcoholic beverages[42] and it is to be expected x x x that employees freely express their grievances and gripes against their employers.[43] In petitioners case, her assailed conduct was related to her work. It reflects an unwillingness to comply with reasonable management directives. While in Samson, Samson was held to be merely expressing his dissatisfaction over a management decision,[44] in this case, as earlier shown, petitioners offensive remarks were directed against Geisert. Additionally, in Samson, this Court found that unlike penalty in Autobus for uttering Workers insulting uttered the Union (AWU) to v. the NLRC[45] where dismissal was held to be an appropriate remarks insulting supervisor,[46] Samson words

against EDT in the latters absence.[47] In the case at

In fine, petitioner, having been dismissed for just cause, is neither entitled to reinstatement nor to backwages. Petitioners contention that she was denied due process is well-taken however, as the records do not show that she was informed of her right to be represented by counsel during the conference with Geisert and Remudaro. The protestations of ETSI, et al. that the right to be informed of the right to counsel does not apply to investigations before administrative bodies and that law and jurisprudence merely give the employee the option to secure the services of counsel in a hearing or conference[53] fall in light of the clear provision of Article 277 (b) of the Labor Code that the employer xxx shall afford [the worker whose employment is sought to be terminated] ample opportunity to be heard and to defend himself with the assistance of his representatives if he so desiresin accordance with company rules and regulations pursuant to guidelines set by the Department of Labor and Employment,

and this Courts explicit pronouncement that [a]mple opportunity connotes every kind of assistance that management must accord the employee to enable him to prepare adequately for his defense including legal representation.[54] Following Agabon, Relations et al. v. National Labor

Commission,[55] the

violation

of petitioners statutory due process right entitles her to an award of nominal damage, which this Court fixes at P30,000.[56]

WHEREFORE, part GRANTED. The

the

petition

is in decision

questioned

is AFFIRMED with the MODIFICATION that respondent ETSI Technologies, Inc. is ordered to pay petitioner, Lorna Punzal, nominal damages in the amount of P30,000. SO ORDERED.

THIRD DIVISION

[G.R. No. 113907. April 20, 2001]

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG-UWP), ITS PRESIDENT BEDA MAGDALENA VILLANUEVA, MARIO DAGANIO, DONATO GUERRERO, BELLA P. SANCHEZ, ELENA TOBIS, RHODA TAMAYO, LIWAYWAY MALLILIN, ELOISA SANTOS, DOMINADOR REBULLO, JOSE IRLAND, TEOFILA QUEJADA, VICENTE SAMONTINA, FELICITAS DURIAN, ANTONIO POLDO, ANGELINA TUGNA, SALVADOR PENALOSA, LUZVIMINDA TUBIG, ILUMINADA RIVERA, ROMULO SUMILANG, NENITA BARBELONIA, LEVI BASILIA, RICARDO PALAGA, MERCY ROBLES, LEODEGARIO GARIN, DOMINGO ECLARINAL, MELCHOR GALLARDO, MARCELO GARIN, ROSALINA BAUTISTA, MARY ANN TALIGATOS, ALEJANDRO SANTOS, ANTONIO FRAGA, LUZ GAPULTOS, MAGDALENA URSUA, EUGENIO ORDAN, LIGAYA MANALO, PEPITO DELA PAZ, PERLITA DIMAQUIAT, MYRNA VASQUEZ, FLORENTINA SAMPAGA, ARACELI FRAGA, MAXIMINA FAUSTINO, MARINA TAN, OLIGARIO LOMO, PRECILA EUSEBIO, SUSAN ABOGANO, CAROLINA MANINANG, GINA GLIFONIA, OSCAR SOTTO, CELEDONA MALIGAYA, EFREN VELASQUEZ, DELIA ANOVER, JOSEPHINE TALIMORO,

MAGDALENA TABOR, NARCISA SARMIENTO, SUSAN MACASIEB, FELICIDAD SISON, PRICELA CARTA, MILA MACAHILIG, CORAZON NUNALA, VISITACION ELAMBRE, ELIZABETH INOFRE, VIOLETA BARTE, LUZVIMINDA VILLOSA, NORMA SALVADOR, ELIZABETH BOGATE, MERLYN BALBOA, EUFRECINA SARMIENTO, SIMPLICIA BORLEO, MATERNIDAD DAVID, LAILA JOP, POTENCIANA CULALA, LUCIVITA NAVARRO, ROLANDO BOTIN, AMELITA MAGALONA, AGNES CENA, NOLI BARTOLAY, DANTE AQUINO, HERMINIA RILLON, CANDIDA APARIJADO, LYDIA JIMENEZ, ELIZABETH ANOCHE, ALDA MURO, TERESA VILLANUEVA, TERESITA RECUENCO, ELIZA SERRANO, ESTELLA POLINAR, GERTRUDES NUNEZ, FELIPE BADIOLA, ROSLYN FERNANDEZ, OSCAR PAGUTA, NATIVIDAD BALIWAS, ELIZABETH BARCIBAL, CYNTHIA ESTELLER, TEODORA SANTOS, ALICIA PILAR, MILA PATENO, GLORIA CATRIZ, MILA MACAHILIG, ADELAIDA DE LEON, ROSENDO EDILO, ARSENIA ESPIRITU, NUMERIANO CABRERA, CONCEPSION ARRIOLA, PAULINA DIMAPASOK, ANGELA SANGCO, PRESILA ARIAS, ZENAIDA NUNES, EDITHA IGNACIO, ROSA GUIRON, TERESITA CANETA, ALICIA ARRO, TEOFILO RUWETAS, CARLING AGCAOILI, ROSA NOLASCO, GERLIE PALALON, CLAUDIO DIRAS, LETICIA ALBOS, AURORA ALUBOG, LOLITA ACALEN, GREGORIO ALIVIO, GUILLERMO ANICETA, ANGELIE ANDRADA, SUSAN ANGELES, ISABELITA AURIN, MANUELA AVELINA, CARLING AGCAOILI, TERESITA ALANO,

LOLITA AURIN, EMMABETH ARCIAGA, CRESENCIA ACUNA, LUZVMINDA ABINES, FLORENCIA ADALID, OLIVIA AGUSTIN, EVANGELINE ALCORAN, ROSALINA ALFERES, LORNA AMANTE, FLORENTINA AMBITO, JULIETA AMANONCO, CARMEN AMARILLO, JOSEFINA AMBAGAN, ZENAIDA ANAYA, MARIA ANGLO, EDITHA ANTA ZO, MARY JANE ANTE, ANDREA AQUINO, ROWENA ARABIT, MARIETA ARAGON, REBECCA ARCENA, LYDIA ARCIDO, FERNANDO ARENAS, GREGORIO ARGUELLES, EDITHA ARRIOLA, EMMA ATIENZA, EMMA ATIENZA, TEODY ATIENZA, ELIZABETH AUSTRIA, DIOSA AZARES, SOLIDA AZAINA, MILAGROS BUAG, MARIA BANADERA, EDNALYN BRAGA, OFELIA BITANGA, FREDISMINDA BUGUIS, VIOLETA BALLESTEROS, ROSARIO BALLADJAY, BETTY BORIO, ROMANA BAUTISTA, SUSARA BRAVO, LILIA BAHINGTING, ENIETA BALDOZA, DAMIANA BANGCORE, HERMINIA BARIL, PETRONA BARRIOS, MILAGROS BARRAMEDA, PERLA BAUTISTA, CLARITA BAUTISTA, ROSALINA BAUTISTA, ADELINA BELGA, CONSOLACION BENAS, MARIA BEREZO, MERCEDES BEREBER, VIOLETA BISCOCHO, ERNESTO BRIONES, ALVINA BROSOTO, AGUSTINA BUNYI, CARMEN BUGNOT, ERLINDA BUENAFLOR, LITA BAQUIN, CONSEJO BABOL, CRISANTA BACOLOD, CELIA DE BACTAT, MAZIMA BAGA, ELENA BALADAD, ROSARIO BALADJAY, AMALIA BALAGTAS, ANITA BALAGTAS, MARIA BALAKIT, RUFINA BALATAN, REBECCA BALDERAMA, AMELIA BALLESTER, BELEN BARQUIO, BERNANDITA BASILIDES, HELEN

BATO, HELEN BAUTISTA, ROMANA BAUTISTA, ALMEDA BAYTA, AVELINA BELAYON, NORMA DE BELEN, THELMA DE BELEN, JOCELYN BELTRAN, ELENA BENITEZ, VIRGINIA BERNARDINO, MERLINA BINUYAG, LINA BINUYA, BLESILDA BISNAR, SHIRLEY BOLIVAR, CRESENTACION MEDLO, JOCELYN BONIFACIO, AMELIA BORBE, AMALIA BOROMEO, ZENAIDA BRAVO, RODRIGO BEULDA, TERESITA MENDEZ, ELENA CAMAN, LALIANE CANDELARIA, MARRY CARUJANO, REVELINA CORANES, MARITESS CABRERA, JUSTINA CLAZADA, APOLONIA DELA CRUZ, VICTORIA CRUZ, JOSEFINA DELA CRUZ, MARITESS CATANGHAL, EDNA CRUZ, LUCIA DE CASTRO, JOSIE CARIASO, OFELIA CERVANTES, MEDITA CORTADO, AMALIA CASAJEROS, LUCINA CASTILIO, EMMA CARPIO, ANACORITA CABALES, YOLANDA CAMO, MILA CAMAZUELA, ANITA CANTO, ESTELA CANCERAN, FEMENCIA CANCIO, CYNTHIA CAPALAD, MERLE CASTILLO, JESUSA CASTRO, CECILIA CASTILLO, SILVERITA CASTRODES, VIVIAN CELLANO, NORMA CELINO, TERESITA CELSO, GLORIA COLINA, EFIPANIA CONSTANTINO, SALVACION CONSULTA, MEDITA CORTADO, AIDA CRUZ, MARISSA DELA CRUZ, EDITO CORCILLES, JELYNE CRUZ, ROSA CORPOS, ROSITA CUGONA, ELSIE CABELLES, EMMA CADUT, VICTORIA CALANZA, BARBARA CALATA, IMELDA CALDERON, CRISTINA CALIDGUID, EMMALINDA CAMALON, MARIA CAMERINO, CARMENCITA CAMPO, CONNIE CANEZO, LOURDES CAPANANG, MA. MILAGROS CAPILI, MYRNA T. CAPIRAL, FLOR

SAMPAGA, SUSAN B. CARINO, ROSARIO CARIZON, VIRGINIA DEL CARMEN, EMMA CARPIO, PRESCILA CARTA, FE CASERO, LUZ DE CASTRO, ANNA CATARONGAN, JOSEFINA CASTISIMO, JOY MANALO, EMMIE CAWALING, JOVITA CARA, MARINA CERBITO, MARY CAREJANO, ESTELA R. CHAVEZ, CONCEPCION PARAJA, GINA CLAUDIO, FLORDELIZA CORALES, EDITO CORCIELER, ROSA C. CORROS, AMELIA CRUZ, JELYNE CRUZ, WILFREDO DELA CRUZ, REINA CUEVAS, MARILOU DEJECES, JOSEPHINE DESACULA, EDITHA DEE, EDITHA DIAZ, VIRGIE DOMONDON, CELSA DOROPAW, VIOLETA DUMELINA, MARIBEL DIMATATAC, ELBERTO DAGANIO, LETECIA DAGOHOY, DINDO DALUZ, ANGELITA DANTES, GLORIA DAYO, LUCIA DE CASTRO, CARLITA DE GUZMAN, CARMEN DELA CRUZ, MERCY DE LEON, MARY DELOS REYES, MARIETA DEPILO, MATILDE DIBLAS, JULIETA DIMAYUGA, TEODORA DIMAYUGA, YOLANDA DOMDOM, LUCITA DONATO, NELMA DORADO, RITA DORADO, SUSAN DUNTON, HERMINIA SAN ESTEBAN, AMALI EUGENIO, OLIVIA EUSOYA, ERNESTO ESCOBIN, EVELYN ESCUREL, LYDIA ESCOBIN, VICENTE E. ELOIDA, ELENA EGAR, GLORIA ERENO, NORMA ESPIRIDION, ARSENIA ESPIRITU, AURORA ESTACIO, DEMETRIA ESTONELO, MILAGROS FONSEGA, LYDIA FLORENTINO, JULIA FARABIER, TRINIDAD FATALLA, IMELDA FLORES, JESSINA FRANCO, MA. CRISTINA FRIJAS, ESPECTACION FERRER, BERDENA FLORES, LEONILA FRANCISCO, BERNARDA FAUSTINO, DOLORES FACUNDO,

CRESTITA FAMILARAN, EMELITA FIGUERAS, MA. VIRGINIA FLORENDO, AURORA FRANCISCO, MA. JESUSA FRANCISCO, NENITA FUENTES, MARILOU GOLINGAN, JUANITA GUERRERO, LYDIA GUEVARRA, SOCORRO GONZAGA, PATRICIA GOMEO, ROSALINDA GALAPIN, CARMELITA GALVEZ, TERESA GLE, SONIA GONZALES, PRIMITA GOMEZ, THERESA GALUA, JOSEFINA GELUA, BRENDA GONZAGA, FLORA GALLARDO, LUCINDA GRACILLA, VICTORIA GOZUM, NENITA GAMAO, EDNA GARCIA, DANILO GARCIA, ROSARIO GIRAY, ARACELI GOMEZ, JOEMARIE GONZAGA, NELIA GONZAGA, MARY GRANCE GOZON, CARMEN GONZALES, MERLITA GREGORIO, HERMINIA GONZALES, CARLITA DE GUZMAN, MODESTA GABRENTINA, EDITHA GADDI, SALVACIO GALIAS, MERLINDA GALIDO, MELINDA GAMIT, JULIETA GARCIA, EMELITA GAVINO, CHARITO GILLIA, GENERA GONEDA, CRESTITA GONZALES, HERMINIA GONZALES, FRANCISCA GUILING, JULIAN HERNANDEZ, GLECERIA HERRADURA, SUSANA HIPOLITO, NERISSA HAZ, SUSAN HERNAEZ, APOLONIA ISON, SUSAN IBARRA, LUDIVINA IGNACIO, CHOLITA INFANTE, JULIETA ITURRIOS, ANITA IBO, MIRASOL INGALLA, JULIO JARDINIANO, MERLITA JULAO, JULIETA JULIAN, MARIBETH DE JOSE, JOSEPHINE JENER, IMELDA JATAP, JULIETA JAVIER, SALOME JAVIER, VICTORIA JAVIER, SALVACION JOMOLO, EDNA JARNE, LYDIA JIMENEZ, TERESITA DE JUAN, MARILYN LUARCA, ROSITA LOSITO, ROSALINA LUMAYAG, LORNA LARGA, CRESTETA DE

LEON, ZENAIDA LEGASPI, ADELAIDA LEON, IMELDA DE LEON, MELITINA LUMABI, LYDIA LUMABI, ASUNCION LUMACANG, REGINA LAPIADRIO, MELANIA LUBUGUAN, EVANGELINE LACAP, PELAGIA LACSI, LORNA LAGUI, VIRGIE LAITAN, VIRGINIA LEE, CRESTELITA DE LEON, FELICISIMA LEONERO, DIOSA LOPE, ANGELITA LOPEZ, TERESITA LORICA, JUANITA MENDIETA, JUANITA MARANQUEZ, JANET MALIFERO, INAS MORADOS, MELANIE MANING, LUCENA MABANGLO, CLARITA MEJIA, IRENE MENDOZA, LILIA MORTA, VIGINIA MARAY, CHARITO MASINAHON, FILMA MALAYA, LILIA MORTA, VIRGINIA MARAY, CHARITO MASINAHON, FILMA MALAYA, LILIA MORTA, ROSITA MATIBAG, LORENZA MLINA, SABINA DEL MUNDO, EDITHA MUYCO, NARCISA MABEZA, MA. FE MACATANGAY, CONCEPCION MAGDARAOG, IMELDA MAHIYA, ELSA MALLARI, LIGAYA MANAHAN, SOLEDA MANLAPAS, VIRGINIA MAPA, JOSEI MARCOS, LIBRADA MARQUEZ, VIRGINIA MAZA, JULIANITA MENDIETA, EDILBERTA MENDOZA, IRENE MERCADO, HELEN MEROY, CRISTINA MEJARES, CECILIA MILLET, EMELITA MINON, JOSEPHINE MIRANA, PERLITA MIRANO, EVANGELINE MISBAL, ELEANOR MORALES, TERESITA MORILLA, LYDIA NUDO, MYRIAM NAVAL, CAROLINA NOLIA, ALICIA NUNEZ, MAGDALENA NAGUIDA, ELSA NICOL, LILIA NACIONALES, MA. LIZA MABO, REMEDIOS NIEVES, MARGARITA NUYLAN, TERESITA NIEVES, PORFERIA NARAG, RHODORA NUCASA, CORAZON OCRAY, LILIA OLIMPO, VERONA OVERENCIA,

FERMIN OSENA, FLORENCIA OLIVAROS, SOLEDAD OBEAS, NARISSA OLIVEROS, PELAGIA ORTEGA, SUSAN ORTEGA, CRISTINA PRENCIPE, PURITA PENGSON, REBECCA PACERAN, EDNA PARINA, MARIETA PINAT, EPIFANIA PAJERLAN, ROSALINA PASIBE, CECILIA DELA PAZ, LORETA PENA, APOLONIA PALCONIT, FRANCISCO PAGUIO, LYDIA PAMINTAHON, ELSIE PACALDO, TERESITA PADILLA, MYRNA PINEDA, MERCEIDTA PEREZ, NOVENA PORLUCAS, TERESITA PODPOD, ADORACION PORNOBI, ALICIA PERILLO, HELEN JOY PENDAL, LOURDES PACHECO, LUZVIMINDA PAGALA, LORETA PAGAPULAN, FRANCISCO PAGUIO, PRISCO PALACA, FLORA PAMINTUAN, NOEMI PARISALES, JOSEPHINE PATRICIO, CRISTINA PE BENITO, ANGELA PECO, ANGELITA PENA, ESTER PENONES, NORMA PEREZ, MAURA PERSEVERANCIA, MARINA PETILLA, JOSIE PIA, ZULVILITA PIODO, REBECCA PACERAN, CLARITA POLICARPIO, MAXIMO POTENTO, PORFIRIO POTENTO, FLORDELIZA PUMARAS, FERNANDO QUEVEDO, JULIANA QUINDOZA, CHARITO QUIROZ, CARMELITA ROSINO, RODELIA RAYONDOYON, FLORENCIA RAGOS, REBECCA ROSALES, ROSALYN RIVERO, FRANCISCO RUIZ, FRANCIA ROSERO, EMELY RUBIO, EDILBERTO RUIO, JUANA RUBY, RAQUEL REYES, MERCY ROBLES, ESTELA RELANO, ROSITA REYES NIMFA RENDON, EPIFANIO RAMIRO, MURIEL REALCO, BERNARDITA RED, LEONITA RODIL, BENITA REBOLA, DELMA REGALARIO, LENY REDILLAS, JULIETA DELA ROSA, FELICITAS DELA ROSA, SUSAN RAFALLO, ELENA

RONDINA, NORMA RACELIS, JOSEPHINE RAGEL, ESPERANZA RAMIREZ, LUZVIMINDA RANADA, CRISTINA RAPINSAN, JOCELYN RED, ORLANDO REYES, TERESITA REYES, ANGELITA ROBERTO, DELIA ROCHA, EDLTRUDES ROMERO, MELECIA ROSALES, ZENAIDA ROTAO, BELEN RUBIS, FE RUEDA, SYLVIA SONGCAYAWON, CRISTINA SANANO, NERCISA SARMIENTO, HELEN SIBAL, ESTELITA SANTOS, NORMA SILVESTRE, DARLITA SINGSON, EUFROCINA SARMIENTO, MYRNA SAMSON, EMERLINA SADIA, LORNA SALAZAR, AVELINA SALVADOR, NACIFORA SALAZAR, TITA SEUS, MARIFE SANTOS, GRACIA SARMIENTO, ANGELITA SUMANGIL, ELIZABETH SICAT, MA. VICTORIA SIDELA, ANALITA SALVADOR, MARITES SANTOS, VIRGINIA SANTOS, THELMA SARONG, NILDA SAYAT, FANCITA SEGUNDO, FYNAIDA SAGUI, EDITHA SALAZAR, EDNA SALZAR, EMMA SALENDARIO, SOLEDAD SAMSON, EDNA SAN DIEGO, TERESITA SAN GABRIEL, GERTRUDES SAN JOSE, EGLECERIA OSANCHEZ, ESTRELLA SANCHEZ, CECILIA DELOS SANTOS, LUISA SEGOVIA, JOCELYN SENDING ELENA SONGALIA, FELICITAS SORIANO, OFELIA TIBAYAN, AIDA TIRNIDA, MONICA TIBAYAN, CRISTETA TAMBARAN, GLORIA TACDA, NENVINA, FELINA TEVES, ANTONINA DELA TORRE, MAXIMA TANILON, NENA TABAT, ZOSIMA TOLOSA, MARITA TENOSO, IMELDA TANIO, LUZ TANIO, EVANGELINE TAYO, JOSEFINA TINGTING, ARSENIA TISOY, MAGDALENA TRAJANO, JOSEFINA UBALDE, GINA UMALI, IRMA VALENZUELA, FELY VALDEZ, PAULINA VALEZ, ROSELITA

VALLENTE, LOURDES VELASCO, AIDA VILLA, FRANCISCA VILLARITO, ZENAIDA VISMONTE, DELIA VILLAMIEL, NENITA VASQUEZ, JOCELYN VILLASIS, FERMARGARITA VARGAS, CELIA VALLE, MILA CONCEPCION VIRAY, DOMINGA VALDEZ, LUZVIMINDA VOCINA, MADELINE VIVERO, RUFINA VELASCO, AUREA VIDALEON, GLORIA DEL VALLE, THELMA VALLOYAS, CYNTHIA DELA VEGA, ADELA VILLAGOMEZ, TERESITA VINLUAN, EUFEMIA VITAN, GLORIA VILLAFLORES, EDORACION VALDEZ, ANGELITA VALDEZ, ILUMINADA VALENCI, MYRNA VASQUEZ, EVELYN VEJERAMO, TEODORA VELASQUEZ, EDAN VILLANUEVA, PURITA VILLASENOR, SALVADOR WILSON, EMELINA YU, ADELFA YU, ANA ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, MERCEDITA CASTILLO, JOCELYN CASTRO, CREMENIA DELA CRUZ, JOSEPHINE IGNACIO, MELITA ILILANGOS, LIGAYA LUMAYAT, DELIA LUMBES, ROSITA LIBRADO, DELIA LAGRAMADA, GEMMA MAGPANTAY, EMILY MENDOZA, FIDELA PANGANIBAN, LEONOR RIZALDO, ILUMINDA RIVERA, DIVINA SAMBAYAN, ELMERITA SOLAYAO, NANCY SAMALA, JOSIE SUMARAN, LUZVIMINDA ABINES, ALMA ACOL, ROBERTO ADRIATICO, GLORIA AGUINALDO, ROSARIO ALEYO, CRISTETA ALEJANDRO, LILIA ALMOGUERA, CARMEN AMARILLO, TRINIDAD ARDANIEL, CERINA AVENTAJADO, ZENAIDA AVAYA, LOLITA ARABIS, MARIA ARSENIA, SOFIA AGUINALDO, SALVE ABAD, JOSEFINA AMBANGAN EMILIA AQUINO, JOSEFINA AQUINO, JULIANA AUSAN, AMERCIANA

ACOSTA, CONCEPCION ALEROZA, DIANA ADOVOS, FELY ADVINCULA, SEOMINTA ARIAS, JOSEPHINE ARCEDE, NORMA AMISTOSO, PRESENTACION ALONOS, EMMA ATIENZA, LEONIDA AQUINO, ANITA ARILLON, ADELAIDA ARELLANO, NORMA AMISTOSO, JOSEPHINE ARCEDE, SEMIONITA ARIAS, JOSEFINA BANTUG, LOLITA BARTE, HERMINIA BASCO, MARGARITA BOTARDO, RUFINO BUGNOT, LOLITA BUSTILLO, ISABEL BALAKIT, ROSARIO BARRERO, TESSIE BALBOS, NORMA BENISANO, GUILLERMA BRUGES, BERNADETTE BARTOLOME, SHIRLEY BELMONTE, MERONA BELZA, AZUCENA BERNALES, JOSE BASCO, NIMPHA BANTOG, BENILDA BUBAN, REGINA BUBAN, SALOME BARRAMEDA, IRENE BISCO, FELICITAS BAUTISTA, VIOLETA BURA, LINA BINUYA, BIBIANA BAARDE, ELSA BAES, ANASTACIA BELONZO, SONIA BENOYO, ELIZABETH BACUNGAN, PATRICIA BARRAMEDA, ERLINDA BARCELONA, EMMA BANICO, APOLONIA BUNAO, LUCITA BOLEA, PACIFICA BARCELONA, EDITHA BASIJAN, RENITA BADAMA, ELENA BALADAD, CRESENCIA BAJO, BERNADITA BASILID, MELINDA BEATO, YOLANDA BATANES, EDITHA BORILLA, ANITA BAS, ELSA CALIPUNDAN, MARIA CAMERINO, VIRGINIA CAMPOSANO, MILAGROS CAPILI, CARINA CARINO, EUFEMIA CASIHAN, NENITA CASTRO, FLORENCIA CASUBUAN, GIRLIE CENTENO, MARIANITA CHIQUITO, IMELDA DELA CRUZ, TEODOSIA CONG, TEOFILA CARACOL, TERESITA CANTA, IRENEA CUNANAN, JULITA CANDILOSAS, VIOLETA

CIERES, MILAGROS DELA CRUZ, FLOREPES CAPULONG, CARMENCITA CAMPO, MARILYN CARILLO, RUTH DELA CRUZ, RITA CIJAS, LYDIA CASTOR, VIRGIE CALUBAD, EMELITA CABERA, CRISTETA CRUZ, ERLINDA COGADAS, IMELDA CALDERON, SUSIE LUZ CEZAR, ESTELA CHAVEZ, NORMA CABRERA, ELDA DAGATAN, LEONISA DIMACUNA, ERNA DUGTONG, FLORDELISA DIGMA, VIRGILIO DADIOS, LOLITA DAGTA, ADELAIDA DORADO, CELSA DATUMANONG, VIRGINIA DOCTOLERO, EDNA SAN DIEGO, JULIETA DANG, JULIETA DORANTINAO, LOLITA DAGANO, JUDITH DIAZ, MARIA ENICANE, MARITA ESCARDE, ENRIMITA ESMAYOR, ROSARIO EPIRITU, REMEDIOS EMBOLTORIO, IRENE ESTUITA, TERESITA ERESE, ERMELINDA ELEZO, MARIA ESTAREJA, MERLITA ESQUERRA, YOLANDA FELICITAS, FRUTO FRANCIA, MARTHA FRUTO, LILIA FLORES, SALVACION FORTALESA, JUDITH FAJARDO, SUSANA FERNANDO, EDWIN FRANCISCO, NENITA GREGORY, ROSA CAMILO, MARIVIC GERRARDO, CHARITA GOREMBALEM, NORMA GRANDE, DOLORES GUTIERREZ, CHARLIE GARCIA, LUZ GALVEZ, ADELAIDA GAMILLA, LUZ GAPULTOS, ERLINDA GARCIA, HELEN GARCIA, ERLINDA GAUDIA, FRANCISCA GUILING, MINTA HERRERA, ASUNCION HONOA, JUAN HERNANDEZ, LUCERIA ANNA MAE HERNANDEZ, JULIANA HERNANDEZ, EDITHA IGNACIO, ANITA INOCENCIO, EULALIA INSORIO, ESTELITA IRLANDA, MILAGROS IGNACIO, LINDA JABONILLO, ADELIMA JAEL, ROWENA JARABJO, ROBERT JAVILINAR, CLARITA JOSE, CARMENCITA

JUNDEZ, SOFIA LALUCIS, GLORIA LABITORIA, ANGELITA LODES, ERLINDA LATOGA, EVELYN LEGASPI, ROMEO LIMCHOCO, JESUS LARA, ESTRELLA DE LUNA, LORETA LAREZA, JOSEPHINE ALSCO, MERCY DE LEON, CONSOLACION LIBAO, MARILYN LIWAG, TERESITA LIZAZO, LILIA MACAPAGAL, SALVACION MACAREZA, AMALIA MADO, TERESITA MADRIAGA, JOVITA MAGNAYE, JEAN MALABAD, FRANCISCA MENDOZA, NELCITA MANGANTANG, TERESITA NELLA, GENEROZA MERCADO, CRISTETA MOJANA, BERNARDA MONGADO, LYDIA MIRANDA, ELISA MADRILEJOS, LOIDA MAGSINO, AMELIA MALTO, JULITA MAHIBA, MYRNA MAYORES, LUISA MARAIG, FLORENCIA MARAIG, EMMA MONZON, IMELDA MAGDANGAN, VICTORIA MARTIN, NOEMI MANGUILLO, BASILIZA MEDINA, VICTORIO MERCADO, ESTELA MAYPA, EMILIA MENDOZA, LINA MAGPANTAY, FELICIANA MANLOLO, ELENA MANACOP, WILMA MORENO, JUANA MENDOZA, EVELYN DEL MUNDO, ROSIE MATUTINA, MATILDE MANALO, TERESITA MENDEZ, FELIPINA MAGONCIA, MARIA MANZANO, LIGAYA MANALO, LETICIA MARCHA, MARINA MANDIGMA, LETICIA MANDASOC, PRESCILLA MARTINEZ, JULIA MENDOZA, PACITA MAGALLANES, ANGELINA MARJES, SHIRLEY MELIGRITO, IRENE MERCADO, ELISA MAATUBANG, MARCELINA NICOLAS, AGUSTINA NICOLAS, ROSA NOLASCO, WILMA NILAYE, VIOLETA ORACION, ANGELA OSTAYA, JUANITA OSAYOS, MAGDALENA OCAMPO, MARDIANA OCTA, ROSELA OPAO,

LIBRADA OCAMPO, YOLANDA OLIVER, MARCIA ORLANDA, PAGDUNAN, RITA PABILONA, MYRA PALACA, BETHLEHEM PALINES, GINA PALIGAR, NORMA PALIGAR, DELMA PEREZ, CLAUDIA PRADO, JULIE PUTONG, LUDIVINA PAGSALINGAN, MERLYN PANALIGAN, VIOLETA PANAMBITAN, NOREN PAR, ERLINDA PARAGAS, MILA PARINO, REBECCA PENAFLOR, IMELDA PENAMORA, JERMICILLIN PERALTA, REBECCA PIAPES, EDITHA PILAR, MAROBETH PILLADO, DIOSCORO PIMENTEL, AURORA LAS PINAS, EVANGELINA PINON, MA. NITA PONDOC, MA. MERCEDES PODPOD, ANGELITO PANDEZ, LIGAYA PIGTAIN, LEONILA QUIAMBAO, ELENA QUINO, MARITESS QUIJANO, CHOLITA REBUENO, LOLITA REYES, JOCELYN RAMOS, ROSITA RAMIREZ, ELINORA RAMOS, ISABEL RAMOS, ANNABELLE RESURRECCION, EMMA REYES, ALILY ROXAS, MARY GRACE DELOS REYES, JOCELYN DEL ROSARIO, JOSEFINA RABUSA, ANGELITA ROTAIRO, SAMCETA ROSETA, EDERLINA RUIZ, ZENAIDA ROSARIO, BENITA REBOLA, ROSITA REVILLA, ROSITA SANTOS, ROWENA SALAZAR, EMILYN SARMIENTO, ANA SENIS, ELOISA SANTOS, NARCISA SONGLIAD, ELMA SONGALIA, AMPARA SABIO, JESSIE SANCHEZ, VIVIAN SAMILO, GLORIA SUMALINOG, ROSALINA DELOS SANTOS, MARIETA SOMBRERO, HELEN SERRETARIO, TEODORO SULIT, BELLA SONGUINES, LINDA SARANTAN, ESTELLA SALABAR, MILAGROS SISON, GLORIA TALIDAGA, CECILIA TEODORO, ROMILLA TUAZON, AMELITA TABULAO, MACARIA TORRES, LUTGARDA TUSI,

ESTELLA TORREJOS, VICTORIA TAN, MERLITA DELA VEGA, WEVINA ORENCIA, REMEDIOS BALECHA, TERESITA TIBAR, LACHICA LEONORA, JULITA YBUT, JOSEFINA ZABALA, WINNIE ZALDARIAGA, BENHUR ANTENERO, MARCELINA ANTENERO, ANTONINA ALAPAN, EDITHA ANTOZO, ROWENA ARABIT, ANDRA AQUINO, TERESITA ANGULO, MARIA ANGLO, MYRNA ALBOS, ELENITA AUSTRIA, ANNA ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, REMEDIOS BOLECHE, MACARIA BARRIOS, THELMA BELEN, ESTELLA BARRETTO, JOCELYN CHAVEZ, VIRGINIA CAPISTRANO, BENEDICTA CINCO, YOLLY CATPANG, REINA CUEVAS, VICTORIA CALANZA, FE CASERO, ROBERTA CATALBAS, LOURDES CAPANANG, CLEMENCIA CRUZ, JOCELYN COSTO, MERCEDITA CASTILLO, EDITHA DEE, LUCITA DONATO, NORMA ESPIRIDION, LORETA FERNANDEZ, AURORA FRANCISCO, VILMA FAJARDO, MODESTA GABRENTINA, TERESITA GABRIEL, SALVACION GAMBOA, JOSEPHINE IGNACIO, SUSAN IBARRA, ESPERANZA JABSON, OSCAR JAMBARO, ROSANNA JARDIN, CORAZON JALOCON, ZENAIDA LEGASPI, DELLA LAGRAMADA, ROSITA LIBRANDO, LIGAYA LUMAYOT, DELIA LUMBIS, LEONORA LANCHICA, RELAGIA LACSI, JOSEFINA LUMBO, VIOLETA DE LUNA, EVELYN MADRID, TERESITA MORILLA, GEMMA MAGPANTAY, EMILY MENDOZA, IRENEA MEDINA, NARCISA MABEZA, ROSANNA MEDINA, DELIA MARTINEZ, ROSARIO MAG-ISA, EDITHA MENDOZA, EDILBERTA MENDOZA, FIDELA PANGANIBAN,

OFELIA PANGANIBAN, AZUCENA POSTGO, LOURDES PACHECO, LILIA PADILLA, MARISSA PEREZ, FLORDELIZA PUMARES, LUZ REYES, NORMA RACELIS, LEONOR RIZALDO, JOSIE SUMASAR, NANCY SAMALA, EMERLITA SOLAYAO, MERCEDITA SAMANIEGO, BLANDINA SIMBULAN, JOCELYN SENDING, LUISITA TABERRERO, TERESITA TIBAR, ESTERLINA VALDEZ, GLORIA VEJERANO, ILUMINADA VALENCIA, MERLITA DELA VEGA, VIRGIE LAITAN, JULIET VILLARAMA, LUISISTA OCAMPO, NARIO ANDRES, ANSELMA TULFO, GLORIA MATEO, FLANIA MENDOZA, CONNIE CANGO, EDITHA SALAZAR, MYRNA DELOS SANTOS, TERESITA SERGIO, CHARITO GILLA, FLORENTINA HERNAEZ, BERNARDINO VIRGINIA, AMPO ANACORITA, SYLVIA POASADAS, ESTRELLA ESPIRITU, CONCORDIA LUZURIAGA, MARINA CERBITO, EMMA REYES, NOEMI PENISALES, CLARITA POLICARPIO, BELEN BANGUIO, HERMINIA ADVINCULA, LILIA MORTA, REGINA LAPIDARIO, LORNA LARGA, TERESITA VINLUAN, MARITA TENOSO, NILDS SAYAT, THELMA SARONG, DELMA REGALIS, SUSAN RAFAULO, ELENA RONDINA, MYRNA PIENDA, VIOLETA DUMELINA, FLORENCIA ADALID, FILMA MELAYA, ERLINDA DE BAUTISTA, MATILDE DE BLAS, DOLORES FACUNDO, REBECCA LEDAMA, MA. FE MACATANGAY, EMELITA MINON, NORMA PAGUIO, ELIZA VASQUEZ, GLORIA VILLARINO, MA. JESUS FRANCISCO, TERESITA GURPIDO, LIGAYA MANALO, FE PINEDA, MIRIAM OCMAR, LUISA SEGOVIA, TEODY ATIENZA, SOLEDA AZCURE, CARMEN

DELA CRUZ, DMETRIA ESTONELO, MA. FLORIDA LOAZNO, IMELDA MAHIYA, EDILBERTA MENDOZA, SYLVIA POSADAS, SUSANA ORTEGA, JOSEPHINE D. TALIMORO, TERESITA LORECA, ARSENIA TISOY, LIGAYA MANALO, TERESITA GURPIO, FE PINEDA, and MARIA JESUS FRANCISCO, petitioners, vs. HON. CRESENCIO J. RAMOS, NATIONAL LABOR RELATIONS COMMISSION, M. GREENFIELD (B), INC., SAUL TAWIL, CARLOS T. JAVELOSA, RENATO C. PUANGCO, WINCEL LIGOT, MARCIANO HALOG, GODOFREDO PACENO, SR., GERVACIO CASILLANO, LORENZO ITAOC, ATTY. GODOFREDO PACENO, JR., MARGARITO CABRERA, GAUDENCIO RACHO, SANTIAGO IBANEZ, AND RODRIGO AGUILING,respondents. RESOLUTION GONZAGA-REYES, J.: Before us is petitioners motion for partial reconsideration of our decision dated February 28, 2000,[1] the dispositive portion of which reads:[2] WHEREFORE, the petition is GRANTED; the decision of the National Labor Relations Commission in Case No. NCR-00-09-04199-89 is REVERSED and SET ASIDE; and the respondent company is hereby ordered to immediately reinstate the petitioners to their respective positions. Should reinstatement be not feasible, respondent company shall pay separation pay of one month salary for every year of service. Since petitioners were terminated without the requisite written notice at least 30 days prior to their termination, following the

recent ruling in the case of Ruben Serrano vs. National Labor Relations Commission and Isetann Department Store, the respondent company is hereby ordered to pay full backwages to petitioner-employees while the Federation is also ordered to pay full backwages to petitioner-union officers who were dismissed upon its instigation. Since the dismissal of petitioners was without cause, backwages shall be computed from the time the herein petitioner employees and union officers were dismissed until their actual reinstatement. Should reinstatement be not feasible, their backwages shall be computed from the time petitioners were terminated until the finality of this decision. Costs against the respondent company. SO ORDERED. Petitioners allege that this Court committed patent and palpable error in holding that the respondent company officials cannot be held personally liable for damages on account of employees dismissal because the employer corporation has a personality separate and distinct from its officers who merely acted as its agents whereas the records clearly established that respondent company officers Saul Tawil, Carlos T. Javelosa and Renato C. Puangco have caused the hasty, arbitrary and unlawful dismissal of petitioners from work; that as top officials of the respondent company who handed down the decision dismissing the petitioners, they are responsible for acts of unfair labor practice; that these respondent corporate officers should not be considered as mere agents of the company but the wrongdoers. Petitioners further contend that while the case was pending before the public respondents, the respondent company, in the early part of February 1990, began removing its machineries and equipment

from its plant located at Merville Park, Paranaque and began diverting jobs intended for the regular employees to its sub-contractor/satellite branches;[3] that the respondent company officials are also the officers and incorporators of these satellite companies as shown in their articles of incorporation and the general information sheet. They added that during their ocular inspection of the plant site of the respondent company, they found that the same is being used by other unnamed business entities also engaged in the manufacture of garments. Petitioners further claim that the respondent company no longer operates its plant site as M. Greenfield thus it will be very difficult for them to fully enforce and implement the courts decision. In their subsequent motion filed on the same day, petitioners also pray for the (A) inclusion of the names of employees listed in Annex D of the petition which they inadvertently omitted in the caption of the case, to wit: (1) Amores, Imelda (2) Andres, Josefina (3)Aragon, Felicidad (4) Arias, Genevive (5) Arroyo, Salvacion (6) Arceo, Elizabeth (7) Anonuevo, Monica (8) Abellada, Josefina (9) Advincula, Harmelina (10) Ajayo, Rosario (11) Alilay, Marilyn (12) Almario, Anliza (13) Almario, Angelita (14) Almazan, Marilou (15) Almonte, Rosalina (16) Alvaran, Marites (17) Alvarez, Edna (18) Ampo, Anacorita (19) Aquino, Leonisa (20) Bactat, Celia (21) Carpio, Azucena G. (22) Cruz, Amelia (23) Glifonia, Eugenia (24) Escurel, Evelyn F. (25) Hilario, Bonifacio G. (26) Payuan, Adoracion (27) Perez, Mercedita (28) Rempis, Zenaida (29) Rosario, Margie deL (30) Salvador, Norma (31) Sambayanan, Olivia (32) Tiaga, Aida (33) Torbela, Maria (34) Trono, Nenevina (35) Varona, Asuncion (36) Vasquez, Elisa M. (37) Villanueva, Milagros (38) Villapondo, Eva C. (39) Villon, Adeliza T.; (B) correction of their own typographical errors of the names of employees appearing in the caption, which

should be as follows: Manuela Avelin, Belen Barquio, Lita Buquid, Violeta C. Ciervo, Marilou Dejocos, Maximina Faustino, Primitiva Gomez, Myrna Palaca, Mercedita Perez, Rebecca Poceran, Amorlita Rotairo, Emma Saludario, Tita Senis, Salvacion Wilson,[4] Anita Ahillon, Gregoria Arguelles, Tessie Balbis, Betty Borja, Rodrigo Buella, Celsa Doropan, Maria Enicame, Josephine Lasco, Julita Maniba, Juanita Osuyos, Juana Overencio, Azucena Postigo, Cristina Rapinan, Roselyn Rivero, Edeltrudes Romero, Rodelia Royandoyon, Fausta Segundo, Teodora Sulit, Elena Tebis, Paulina Valdez,[5] Susan Abogona, Diana Adovas, Carmen Rosimo Basco, Macaria Barrion, Maria Fe Berezo, Matilde de Blas, Rufina Bugnot, Aurora Bravo, Jovita Cera, Precila Carta, Amalia Eugenio, Milagros Fonseca, Jose Irlanda, Rowena Jarabejo, Regina Lapidario, Josie Marcos, Shirley Melegrito, Noemi Menguillo, Teresita Nierves, Ricardo Paloga, Florenia Ragos, Leonila Rodil, Emma Saludario, Narcisa Songuad, Josie Sumarsar, Evangeline Tayco;[6] (C) inclusion of other employees similarly situated whose names were not included in Annex D or in the caption of the case, to wit: (1) Dionisa Aban, (2) Alicia Aragon, (3) Vicky Francia, (4) Nelita F. Gelongos, (5) Erlinda San Juan, (6) Erlinda Baby Patungan Manalo, (7) Jenette Patungan,[7] (8) Blandina Simbahan,[8] (9) Asuncion Varona,[9] (10) Josefina Andres, (11) Teresita Arales, (12) Alice Artikulo, (13) Esther Cometa, (14) Eliza Cabiting, (15) Erlinda Dalut, (16) Edna Fernandez, (17) Emily Inocencio, (18) Esperanza Jalocon, (19) Imelda Jarabe, (20) Mercedes Pabadora, (21) Venerado Pastoral, (22) Cristina Perlas, (23) Margie del Rosario.[10] In their Comment, the Solicitor General interposes no objection to petitioners prayer for the inclusion of omitted and similarly situated employees and the

correction of employees names in the caption of the case. On the other hand, private respondent company officials Carlos Javelosa and Remedios Caoleng, in their Comment, state that considering that petitioners admitted having knowledge of the fact that private respondent officers are also holding key positions in the alleged satellite companies, they should have presented the pertinent evidence with the public respondents; thus it is too late for petitioners to require this Court to admit and evaluate evidence not presented during the trial; that the supposed proof of satellite companies hardly constitute newly discovered evidence. Respondent officials interpose no objection to the inclusion of employees inadvertently excluded in the caption of the case but object to the inclusion of employees who were allegedly similarly situated for the reason that these employees had not been parties to the case, hence should not be granted any relief from the court. Respondent company failed to file its comment.[11] Petitioners contention that respondent company officials should be made personally liable for damages on account of petitioners dismissal is not impressed with merit. A corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and, in general from the people comprising it.[12] The rule is that obligations incurred by the corporation, acting through its directors, officers and employees, are its sole liabilities.[13] True, solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as, generally, in the following cases:[14]

1. When directors and trustees or, appropriate cases, the officers of corporation

in a

(a) Vote for or assent to patently unlawful acts of the corporation; (b) act in bad faith or with gross negligence in directing the corporate affairs; (c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other persons.[15] (2) When a director or officer has consented to the issuance of watered stocks or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto.[16] (3) When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the Corporation.[17] (4) When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action.[18] In labor cases, particularly, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of corporate employees done with malice or in bad faith.[19] Bad faith or negligence is a question of fact and is evidentiary.[20] It has been held that bad faith does not connote bad judgement or negligence; it imports a dishonest purpose or some moral obliquity and

conscious doing of wrong; it means breach of a known duty thru some motive or interest or ill will; it partakes of the nature of fraud.[21] In the instant case, there is nothing substantial on record to show that respondent officers acted in patent bad faith or were guilty of gross negligence in terminating the services of petitioners so as to warrant personal liability. As held in Sunio vs. NLRC,[22] We now come to the personal liability of petitioner, Sunio, who was made jointly and severally responsible with petitioner company and CIPI for the payment of the backwages of private respondents. This is reversible error. The Assistant Regional Directors Decision failed to disclose the reason why he was made personally liable. Respondents, however, alleged as grounds thereof, his being the owner of one half (1/2) interest of said corporation, and his alleged arbitrary dismissal of private respondents. Petitioner Sunio was impleaded in the Complaint in his capacity as General Manager of petitioner corporation. There appears to be no evidence on record that he acted maliciously or in bad faith in terminating the services of private respondents. His act, therefore, was within the scope of his authority and was a corporate act. It is basic that a corporation is invested by law with a personality separate and distinct from those of the persons composing it as well as from that of any other legal entity to which it may be related. Mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate

corporate personality. Petitioner Sunio, therefore, should nor have been made personally answerable for the payment of private respondents back salaries. Petitioners claim that the jobs intended for the respondent companys regular employees were diverted to its satellite companies where the respondent company officers are holding key positions is not substantiated and was raised for the first time in this motion for reconsideration. Even assuming that the respondent company officials are also officers and incorporators of the satellite companies, such circumstance does not in itself amount to fraud. The documents attached to petitioners motion for reconsideration show that these satellite companies[23] were established prior to the filing of petitioners complaint against private respondents with the Department of Labor and Employment on September 6, 1989 and that these corporations have different sets of incorporators aside from the respondent officers and are holding their principal offices at different locations. Substantial identity of incorporators between respondent company and these satellite companies does not necessarily imply fraud.[24] In such a case, respondent companys corporate personality remains inviolable.[25] Although there were earlier decisions of this Court in labor cases where corporate officers were held to be personally liable for the payment of wages and other money claims to its employees, we find those rulings inapplicable to this case. In La Campana Coffee Factory, Inc. vs. Kaisahan ng Manggagawa sa La Campana (KKM),[26] La Campana Coffee Factory, Inc. and La Campana Gaugau Packing were substantially owned by the same person. They had one office, one management, and a single payroll for both

businesses. The laborers of the gaugau factory and the coffee factory were also interchangeable, i.e., the workers in one factory worked also in the other factory. In Claparols vs. Court of Industrial Relations,[27] the Claparol Steel and Nail Plant which was ordered to pay its workers backwages, ceased operations on June 30, 1957 and was succeeded on the next day, July 1, 1957 by the Claparols Steel Corporation. Both corporations were substantially owned and controlled by the same person and there was no break or cessation in operations. Moreover, all the assets of the steel and nail plant were transferred to the new corporation. Notably, in the above-mentioned cases, a new corporation was created, owned by the same family, engaged in the same business and operating in the same compound, a situation which is not obtaining in the instant case. In AC Ransom Labor Union-CCLU vs. NLRC,[28] the Court ruled that under the Minimum Wage Law, the responsible officer of an employer corporation can be held personally liable for non-payment of backwages for if the policy of the law were otherwise, the corporation employer would have devious ways for evading of back wages. This Court said: In the instant case, it would appear that RANSOM, in 1969, foreseeing the possibility or probability of payment of backwages to the 22 strikers, organized ROSARIO to replace RANSOM, with the latter to be eventually phased out if the 22 strikers win their case. RANSOM actually ceased operations on May 1, 1973, after the December 19, 1972 Decision of the Court of Industrial Relations was promulgated against RANSOM.

Clearly, the situation in AC Ransom does not obtain in this case, where the alleged satellite companies were established even prior to the filing of petitioners complaint with the Department of Labor. Petitioners prayer for the inclusion of employees listed in Annex D whose names were admittedly inadvertently excluded in the caption of the case and for the correction of typographical errors of the employees names appearing in the caption, is well taken and is hereby granted. However, petitioners prayer for the inclusion of other employees allegedly similarly situated but whose names were not included either in Annex D or in the caption of the case must be denied. A judgment cannot bind persons who are not parties to the action.[29] It is elementary that strangers to a case are not bound by the judgment rendered by the court and such judgment is not available as an adjudication either against or in favor of such other person.[30] Petitioners failed to explain why these employees allegedly similarly situated were not included in the submitted list filed before us. Such inclusion would be tantamount to a substantial amendment which cannot be allowed at this late stage of the proceedings as it will definitely work to the prejudice and disadvantage of the private respondents.[31] WHEREFORE, petitioners motion for reconsideration is partially granted so as to include the names of employees listed in Annex D which petitioners inadvertently omitted in the caption of this case, to wit: (1) Amores, Imelda (2) Andres, Josefina (3) Aragon, Felicidad (4) Arias, Genevive (5) Arroyo, Salvacion (6) Arceo, Elizabeth (7) Anonuevo, Monica (8) Abellada, Josefina (9) Advincula, Harmelina (10) Ajayo, Rosario (11) Alilay, Marilyn (12) Almario, Anliza (13) Almario, Angelita (14) Almazan, Marilou (15) Almonte,

Rosalina (16) Alvaran, Marites (17) Alvarez, Edna (18) Ampo, Anacorita (19) Aquino, Leonisa (20) Bactat, Celia (21) Carpio, Azucena G. (22) Cruz, Amelia (23) Glifonia, Eugenia (24) Escurel, Evelyn F. (25) Hilario, Bonifacio G. (26) Payuan, Adoracion (27) Perez, Mercedita (28) Rempis, Zenaida (29) Rosario, Margie del (30) Salvador, Norma (31) Sambayanan, Olivia (32) Tiaga, Aida (33) Torbela, Maria (34) Trono, Nenevina (35) Varona, Asuncion (36) Vasquez, Elisa M. (37) Villanueva, Milagros (38) Villapondo, Eva C. (39) Villon, Adeliza T.; and to correct the typographical errors of the names of employees appearing in the caption, as follows: Manuela Avelin, Belen Barquio, Lita Buquid, Violeta C. Ciervo, Marilou Dejocos, Maximina Faustino, Primitiva Gomez, Myrna Palaca, Mercedita Perez, Rebecca Poceran, Amorlita Rotairo, Emma Saludario, Tita Senis, Salvacion Wilson, Anita Ahillon, Gregoria Arguelles, Tessie Balbis, Betty Borja, Rodrigo Buella, Celsa Doropan, Maria Enicame, Josephine Lasco, Julita Maniba, Juanita Osuyos, Juana Overencio, Azucena Postigo, Cristina Rapinan, Roselyn Rivero, Edeltrudes Romero, Rodelia Royandoyon, Fausta Segundo, Teodora Sulit, Elena Tebis, Paulina Valdez, Susan Abogona, Diana Adovas, Carmen Rosimo Basco, Macaria Barrion, Maria Fe Berezo, Matilde de Blas, Rufina Bugnot, Aurora Bravo, Jovita Cera, Precila Carta, Amalia Eugenio, Milagros Fonseca, Jose Irlanda, Rowena Jarabejo, Regina Lapidario, Josie Marcos, Shirley Melegrito, Noemi Menguillo, Teresita Nierves, Ricardo Paloga, Florenia Ragos, Leonila Rodil, Emma Saludario, Narcisa Songuad, Josie Sumarsar, Evangeline Tayco. SO ORDERED. Melo JJ., concur. (Chairman), and Sandoval-Gutierrez,

Vitug, J., reiterates his separate opinion in Serrano v. NLRC (G.R. No. 117040, of Jan. 2000) Panganiban, J., reiterates his separate opinion in Serrano v. NLRC, G.R. No. 117040, 27 Jan. 2000. FIRST DIVISION

[G.R. No. 141471. September 18, 2000]

COLEGIO DE SAN JUAN DE LETRAN, petitioner, vs. ASSOCIATION OF EMPLOYEES AND FACULTY OF LETRAN and ELEONOR AMBAS,respondents. DECISION KAPUNAN, J.: This is a petition for review on certiorari seeking the reversal of the Decision of the Court of Appeals, promulgated on 9 August 1999, dismissing the petition filed by Colegio de San Juan de Letran (hereinafter, "petitioner") and affirming the Order of the Secretary of Labor, dated December 2, 1996, finding the petitioner guilty of unfair labor practice on two (2) counts. The facts, as found by the Secretary of Labor and affirmed by the Court of Appeals, are as follows: "On December 1992, Salvador Abtria, then President of respondent union, Association of Employees and Faculty of Letran, initiated the renegotiation of its Collective Bargaining Agreement with petitioner Colegio de San

Juan de Letran for the last two (2) years of the CBA's five (5) year lifetime from 1989-1994. On the same year, the union elected a new set of officers wherein private respondent Eleanor Ambas emerged as the newly elected President (Secretary of Labor and Employment's Order dated December 2, 1996, p. 12). Ambas wanted to continue the renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already prepared for signing by the parties. The parties submitted the disputed CBA to a referendum by the union members, who eventually rejected the said CBA (Ibid, p. 2). Petitioner accused the union officers of bargaining in bad faith before the National Labor Relations Commission (NLRC). Labor Arbiter Edgardo M. Madriaga decided in favor of petitioner. However, the Labor Arbiter's decision was reversed on appeal before the NLRC (Ibid, p. 2). On January 1996, the union notified the National Conciliation and Mediation Board (NCMB) of its intention to strike on the grounds (sic) of petitioner's: non-compliance with the NLRC (1) order to delete the name of Atty. Federico Leynes as the union's legal counsel; and (2) refusal to bargain (Ibid, p. 1). On January 18, 1996, the parties agreed to disregard the unsigned CBA and to start negotiation on a new fiveyear CBA starting 1994-1999. On February 7, 1996, the union submitted its proposals to petitioner, which notified the union six days later or on February 13, 1996 that the same had been submitted to its Board of Trustees. In the meantime, Ambas was informed

through a letter dated February 15, 1996 from her superior that her work schedule was being changed from Monday to Friday to Tuesday to Saturday. Ambas protested and requested management to submit the issue to a grievance machinery under the old CBA (Ibid, p. 2-3). Due to petitioner's inaction, the union filed a notice of strike on March 13, 1996. The parties met on March 27, 1996 before the NCMB to discuss the ground rules for the negotiation. On March 29, 1996, the union received petitioner's letter dismissing Ambas for alleged insubordination. Hence, the union amended its notice of strike to include Ambas' dismissal. (Ibid, p. 23). On April 20, 1996, both parties again discussed the ground rules for the CBA renegotiation. However, petitioner stopped the negotiations after it purportedly received information that a new group of employees had filed a petition for certification election (Ibid, p. 3). On June 18, 1996, the union finally struck. On July 2, 1996, public respondent the Secretary of Labor and Employment assumed jurisdiction and ordered all striking employees including the union president to return to work and for petitioner to accept them back under the same terms and conditions before the actual strike. Petitioner readmitted the striking members except Ambas. The parties then submitted their pleadings including their position papers which were filed on July 17, 1996 ( Ibid, pp. 2-3). On December 2, 1996, public respondent issued an order declaring petitioner guilty of unfair labor practice

on two counts and directing the reinstatement of private respondent Ambas with backwages. Petitioner filed a motion for reconsideration which was denied in an Order dated May 29, 1997 (Petition, pp. 8-9)."[1] Having been denied its motion for reconsideration, petitioner sought a review of the order of the Secretary of Labor and Employment before the Court of Appeals. The appellate court dismissed the petition and affirmed the findings of the Secretary of Labor and Employment. The dispositive portion of the decision of the Court of Appeals sets forth: WHEREFORE, foregoing premises considered, this Petition is DISMISSED, for being without merit in fact and in law. With cost to petitioner. SO ORDERED.[2] Hence, petitioner comes to this Court for redress. Petitioner ascribes the following errors to the Court of Appeals: I THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION IN AFFIRMING THE RULING OF THE SECRETARY OF LABOR AND EMPLOYMENT WHICH DECLARES PETITIONER LETRAN GUILTY OF REFUSAL TO BARGAIN (UNFAIR LABOR PRACTICE) FOR SUSPENDING THE COLLECTIVE BARGAINING NEGOTIATIONS WITH RESPONDENT AEFL, DESPITE

THE FACT THAT THE SUSPENSION OF THE NEGOTIATIONS WAS BROUGHT ABOUT BY THE FILING OF A PETITION FOR CERTIFICATION ELECTION BY A RIVAL UNION WHO CLAIMED TO COMMAND THE MAJORITY OF THE EMPLOYEES WITHIN THE BARGAINING UNIT. II THE HONORABLE COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF DISCRETION IN AFFIRMING THE RULING OF THE SECRETARY OF LABOR AND EMPLOYMENT WHICH DECLARES PETITIONER LETRAN GUILTY OF UNFAIR LABOR PRACTICE FOR DISMISSING RESPONDENT AMBAS, DESPITE THE FACT THAT HER DISMISSAL WAS CAUSED BY HER INSUBORDINATE ATTITUDE, SPECIFICALLY, HER REFUSAL TO FOLLOW THE PRESCRIBED WORK SCHEDULE.[3] The twin questions of law before this Court are the following: (1) whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when it unilaterally suspended the ongoing negotiations for a new Collective Bargaining Agreement (CBA) upon mere information that a petition for certification has been filed by another legitimate labor organization? (2) whether the termination of the union president amounts to an interference of the employees' right to self-organization? The petition is without merit. After a thorough review of the records of the case, this Court finds that petitioner has not shown any compelling reason sufficient to overturn the ruling of the Court of Appeals affirming the findings of the Secretary

of Labor and Employment. It is axiomatic that the findings of fact of the Court of Appeals are conclusive and binding on the Supreme Court and will not be reviewed or disturbed on appeal. In this case, the petitioner failed to show any extraordinary circumstance justifying a departure from this established doctrine. As regards the first issue, Article 252 of the Labor Code defines the meaning of the phrase "duty to bargain collectively," as follows: Art. 252. Meaning of duty to bargain collectively. - The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession. Noteworthy in the above definition is the requirement on both parties of the performance of the mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement. Undoubtedly, respondent Association of Employees and Faculty of Letran (AEFL) (hereinafter, "union") lived up to this requisite when it presented its proposals for the CBA to petitioner on February 7, 1996. On the other hand, petitioner devised ways and means in order to prevent the negotiation. Petitioner's utter lack of interest in bargaining with the union is obvious in its failure to make a timely reply

to the proposals presented by the latter. More than a month after the proposals were submitted by the union, petitioner still had not made any counter-proposals. This inaction on the part of petitioner prompted the union to file its second notice of strike on March 13, 1996.Petitioner could only offer a feeble explanation that the Board of Trustees had not yet convened to discuss the matter as its excuse for failing to file its reply. This is a clear violation of Article 250 of the Labor Code governing the procedure in collective bargaining, to wit: Art. 250. Procedure in collective bargaining. - The following procedures shall be observed in collective bargaining: (a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice.[4] xxx As we have held in the case of Kiok Loy vs. NLRC,[5] the company's refusal to make counter-proposal to the union's proposed CBA is an indication of its bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively.[6] In the case at bar, petitioner's actuation show a lack of sincere desire to negotiate rendering it guilty of unfair labor practice. Moreover, the series of events that transpired after the filing of the first notice of strike in January 1996 show petitioner's resort to delaying tactics to ensure

that negotiation would not push through. Thus, on February 15, 1996, or barely a few days after the union proposals for the new CBA were submitted, the union president was informed by her superior that her work schedule was being changed from Mondays to Fridays to Tuesdays to Saturdays. A request from the union president that the issue be submitted to a grievance machinery was subsequently denied. Thereafter, the petitioner and the union met on March 27, 1996 to discuss the ground rules for negotiation. However, just two days later, or on March 29, 1996, petitioner dismissed the union president for alleged insubordination. In its final attempt to thwart the bargaining process, petitioner suspended the negotiation on the ground that it allegedly received information that a new group of employees called the Association of Concerned Employees of Colegio (ACEC) had filed a petition for certification election. Clearly, petitioner tried to evade its duty to bargain collectively. Petitioner, however, argues that since it has already submitted the union's proposals to the Board of Trustees and that a series of conferences had already been undertaken to discuss the ground rules for negotiation such should already be considered as acts indicative of its intention to bargain. As pointed out earlier, the evidence on record belie the assertions of petitioner. Petitioner, likewise, claims that the suspension of negotiation was proper since by the filing of the petition for certification election the issue on majority representation of the employees has arose. According to petitioner, the authority of the union to negotiate on behalf of the employees was challenged when a rival union filed a petition for certification election. Citing the case of Lakas Ng Manggagawang Makabayan v. Marcelo

Enterprises,[7] petitioner asserts that in view of the pendency of the petition for certification election, it had no duty to bargain collectively with the union. We disagree. In order to allow the employer to validly suspend the bargaining process there must be a valid petition for certification election raising a legitimate representation issue. Hence, the mere filing of a petition for certification election does not ipso facto justify the suspension of negotiation by the employer. The petition must first comply with the provisions of the Labor Code and its Implementing Rules. Foremost is that a petition for certification election must be filed during the sixtyday freedom period. The "Contract Bar Rule" under Section 3, Rule XI, Book V, of the Omnibus Rules Implementing the Labor Code, provides that: " . If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to the expiry date of such agreement." The rule is based on Article 232,[8] in relation to Articles 253, 253-A and 256 of the Labor Code. No petition for certification election for any representation issue may be filed after the lapse of the sixty-day freedom period. The old CBA is extended until a new one is signed. The rule is that despite the lapse of the formal effectivity of the CBA the law still considers the same as continuing in force and effect until a new CBA shall have been validly executed.[9] Hence, the contract bar rule still [10] applies. The purpose is to ensure stability in the relationship of the workers and the company by preventing frequent modifications of any CBA earlier entered into by them in good faith and for the stipulated original period.[11]

In the case at bar, the lifetime of the previous CBA was from 1989-1994. The petition for certification election by ACEC, allegedly a legitimate labor organization, was filed with the Department of Labor and Employment (DOLE) only on May 26, 1996. Clearly, the petition was filed outside the sixty-day freedom period. Hence, the filing thereof was barred by the existence of a valid and existing collective bargaining agreement. Consequently, there is no legitimate representation issue and, as such, the filing of the petition for certification election did not constitute a bar to the ongoing negotiation. Reliance, therefore, by petitioner of the ruling in Lakas Ng Manggagawang Makabayan v. Marcelo Enterprises[12] is misplaced since that case involved a legitimate representation issue which is not present in the case at bar. Significantly, the same petition for certification election was dismissed by the Secretary of Labor on October 25, 1996. The dismissal was upheld by this Court in a Resolution, dated April 21, 1997.[13] In view of the above, there is no doubt that petitioner is guilty of unfair labor practice by its stern refusal to bargain in good faith with respondent union. Concerning the issue on the validity of the termination of the union president, we hold that the dismissal was effected in violation of the employees' right to self-organization. To justify the dismissal, petitioner asserts that the union president was terminated for cause, allegedly for insubordination for her failure to comply with the new working schedule assigned to her, and pursuant to its managerial prerogative to discipline and/or dismiss its employees. While we recognize the right of the employer to terminate the services of an employee for a just or

authorized cause, nevertheless, the dismissal of employees must be made within the parameters of law and pursuant to the tenets of equity and fair play.[14] The employer's right to terminate the services of an employee for just or authorized cause must be exercised in good faith.[15] More importantly, it must not amount to interfering with, restraining or coercing employees in the exercise of their right to self-organization because it would amount to, as in this case, unlawful labor practice under Article 248 of the Labor Code. The factual backdrop of the termination of Ms. Ambas leads us to no other conclusion that she was dismissed in order to strip the union of a leader who would fight for the right of her co-workers at the bargaining table. Ms. Ambas, at the time of her dismissal, had been working for the petitioner for ten (10) years already. In fact, she was a recipient of a loyalty award. Moreover, for the past ten (10) years her working schedule was from Monday to Friday. However, things began to change when she was elected as union president and when she started negotiating for a new CBA. Thus, it was when she was the union president and during the period of tense and difficult negotiations when her work schedule was altered from Mondays to Fridays to Tuesdays to Saturdays. When she did not budge, although her schedule was changed, she was outrightly dismissed for alleged insubordination.[16] We quote with approval the following findings of the Secretary of Labor on this matter, to wit: "Assuming arguendo that Ms. Ambas was guilty, such disobedience was not, however, a valid ground to teminate her employment. The disputed management action was directly connected with Ms. Ambas' determination to change the complexion of the CBA. As

a matter of fact, Ms. Ambas' unflinching position in faithfully and truthfully carrying out her duties and responsibilities to her Union and its members in getting a fair share of the fruits of their collective endeavors was the proximate cause for her dismissal, the charge of insubordination being merely a ploy to give a color of legality to the contemplated management action to dismiss her. Thus, the dismissal of Ms. Ambas was heavily tainted with and evidently done in bad faith. Manifestly, it was designed to interfere with the members' right to self-organization. Admittedly, management has the prerogative to discipline its employees for insubordination. But when the exercise of such management right tends to interfere with the employees' right to self-organization, it amounts to union-busting and is therefore a prohibited act. The dismissal of Ms. Ambas was clearly designed to frustrate the Union in its desire to forge a new CBA with the College that is reflective of the true wishes and aspirations of the Union members. Her dismissal was merely a subterfuge to get rid of her, which smacks of a pre-conceived plan to oust her from the premises of the College. It has the effect of busting the Union, stripping it of its strong-willed leadership. When management refused to treat the charge of insubordination as a grievance within the scope of the Grievance Machinery, the action of the College in finally dismissing her from the service became arbitrary, capricious and whimsical, and therefore violated Ms. Ambas' right to due process."[17] In this regard, we find no cogent reason to disturb the findings of the Court of Appeals affirming the findings of the Secretary of Labor and Employment. The right to self-organization of employees must not be

interfered with by the employer on the pretext of exercising management prerogative of disciplining its employees. In this case, the totality of conduct of the employer shows an evident attempt to restrain the employees from fully exercising their rights under the law. This cannot be done under the Labor Code. WHEREFORE, premises considered, the petition is DENIED for lack of merit. SO ORDERED. Davide, Jr., C.J., (Chairman), JJ., concur. Ynares-Santiago, J., on leave. Puno, and Pardo,