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[G.R. No. 128845. June 1, 2000] INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS ISAE!, petitioner, vs. HON. LEONARDO A.

"UISU#$ING %n &%' ()*)(%+, )' +&e Se(-e+)-, o. L)/o- )n0 E1*2o,1en+3 HON. CRESENCIANO $. TRAJANO %n &%' ()*)(%+, )' +&e A(+%n4 Se(-e+)-, o. L)/o)n0 E1*2o,1en+3 DR. $RIAN #ACCAULE5 %n &%' ()*)(%+, )' +&e Su*e-%n+en0en+ o. In+e-n)+%on)2 S(&oo26#)n%2)3 )n0 INTERNATIONAL SCHOOL, INC., respondents. DECISION 7A8UNAN, J.9 Receiving salaries less than their counterparts hired abroad, the local-hires of private respondent School, mostly Filipinos, cry discrimination. We agree. That the local-hires are paid more than their colleagues in other schools is, of course, beside the point. The point is that employees should be given equal pay for wor of equal value. That is a principle long honored in this !urisdiction. That is a principle that rests on fundamental notions of !ustice. That is the principle we uphold today. "rivate respondent #nternational School, #nc. $the School, for short%, pursuant to "residential &ecree '(), is a domestic educational institution established primarily for dependents of foreign diplomatic personnel and other temporary residents. *+, To enable the School to continue carrying out its educational program and improve its standard of instruction, Section )$c% of the same decree authori-es the School to employ its own teaching and management personnel selected by it either locally or abroad, from "hilippine or other nationalities, such personnel being e.empt from otherwise applicable laws and regulations attending their employment, e.cept laws that have been or will be enacted for the protection of employees. /ccordingly, the School hires both foreign and local teachers as members of its faculty, classifying the same into two0 $+% foreign-hires and $)% local-hires. The School employs four tests to determine whether a faculty member should be classified as a foreign-hire or a local hire0 a.....What is one1s domicile2 b.....Where is one1s home economy2 c.....To which country does one owe economic allegiance2 d.....Was the individual hired abroad specifically to wor in the School and was the School responsible for bringing that individual to the "hilippines2*), Should the answer to any of these queries point to the "hilippines, the faculty member is classified as a local hire3 otherwise, he or she is deemed a foreign-hire. The School grants foreign-hires certain benefits not accorded local-hires. These include housing, transportation, shipping costs, ta.es, and home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five percent $)45% more than local-hires. The School !ustifies the difference on two 6significant economic disadvantages6 foreign-hires have to endure, namely0 $a% the 6dislocation factor6 and $b% limited tenure. The School e.plains0 / foreign-hire would necessarily have to uproot himself from his home country, leave his family and friends, and ta e the ris of deviating from a promising career path-all for the purpose of pursuing his profession as an educator, but this time in a foreign land. The new foreign hire is faced with economic realities0 decent abode for oneself and7or for one1s family, effective means of transportation, allowance for the education of one1s children, adequate insurance against illness and death, and of course the primary benefit of a basic salary7retirement compensation. 8ecause of a limited tenure, the foreign hire is confronted again with the same economic reality after his term0 that he will eventually and inevitably return to his home country where he will have to confront the uncertainty of obtaining suitable employment after a long period in a foreign land. The compensation scheme is simply the School1s adaptive measure to remain competitive on an international level in terms of attracting competent professionals in the field of international education. *(,

When negotiations for a new collective bargaining agreement were held on 9une +::4, petitioner #nternational School /lliance of ;ducators, 6a legitimate labor union and the collective bargaining representative of all faculty members6 *<, of the School, contested the difference in salary rates between foreign and local-hires. This issue, as well as the question of whether foreign-hires should be included in the appropriate bargaining unit, eventually caused a deadloc between the parties. =n September ', +::4, petitioner filed a notice of stri e. The failure of the >ational ?onciliation and @ediation 8oard to bring the parties to a compromise prompted the &epartment of Aabor and ;mployment $&=A;% to assume !urisdiction over the dispute. =n 9une +B, +::C, the &=A; /cting Secretary, ?rescenciano 8. Tra!ano, issued an =rder resolving the parity and representation issues in favor of the School. Then &=A; Secretary Aeonardo /. Duisumbing subsequently denied petitioner1s motion for reconsideration in an =rder dated @arch +:, +::'. "etitioner now see s relief in this ?ourt. "etitioner claims that the point-of-hire classification employed by the School is discriminatory to Filipinos and that the grant of higher salaries to foreign-hires constitutes racial discrimination. The School disputes these claims and gives a brea down of its faculty members, numbering (E in all, with nationalities other than Filipino, who have been hired locally and classified as local hires. *4,The /cting Secretary of Aabor found that these non-Filipino local-hires received the same benefits as the Filipino local-hires0 The compensation pac age given to local-hires has been shown to apply to all, regardless of race. Truth to tell, there are foreigners who have been hired locally and who are paid equally as Filipino local hires. *C, The /cting Secretary upheld the point-of-hire classification for the distinction in salary rates0 The principle 6equal pay for equal wor 6 does not find application in the present case. The international character of the School requires the hiring of foreign personnel to deal with different nationalities and different cultures, among the student population. We also ta e cogni-ance of the e.istence of a system of salaries and benefits accorded to foreign hired personnel which system is universally recogni-ed. We agree that certain amenities have to be provided to these people in order to entice them to render their services in the "hilippines and in the process remain competitive in the international mar et. Furthermore, we too note of the fact that foreign hires have limited contract of employment unli e the local hires who en!oy security of tenure. To apply parity therefore, in wages and other benefits would also require parity in other terms and conditions of employment which include the employment contract. / perusal of the parties1 +::)-+::4 ?8/ points us to the conditions and provisions for salary and professional compensation wherein the parties agree as follows0 /ll members of the bargaining unit shall be compensated only in accordance with /ppendi. ? hereof provided that the Superintendent of the School has the discretion to recruit and hire e.patriate teachers from abroad, under terms and conditions that are consistent with accepted international practice. /ppendi. ? of said ?8/ further provides0 The new salary schedule is deemed at equity with the =verseas Recruited Staff $=SRS% salary schedule. The )45 differential is reflective of the agreed value of system displacement and contracted status of the =SRS as differentiated from the tenured status of Aocally Recruited Staff $ARS%. To our mind, these provisions demonstrate the parties1 recognition of the difference in the status of two types of employees, hence, the difference in their salaries. The Fnion cannot also invo e the equal protection clause to !ustify its claim of parity. #t is an established principle of constitutional law that the guarantee of equal protection of the laws is not violated by legislation or private covenants based on reasonable classification. / classification is reasonable if it is based on substantial distinctions and apply to all members of the same class. Gerily, there is a substantial distinction between foreign hires and local hires, the

former en!oying only a limited tenure, having no amenities of their own in the "hilippines and have to be given a good compensation pac age in order to attract them to !oin the teaching faculty of the School. *', We cannot agree. That public policy abhors inequality and discrimination is beyond contention. =ur ?onstitution and laws reflect the policy against these evils. The ?onstitution*E, in the /rticle on Social 9ustice and Human Rights e.horts ?ongress to 6give highest priority to the enactment of measures that protect and enhance the right of all people to human dignity, reduce social, economic, and political inequalities.6 The very broad /rticle +: of the ?ivil ?ode requires every person, 6in the e.ercise of his rights and in the performance of his duties, *to, act with !ustice, give everyone his due, and observe honesty and good faith.6 #nternational law, which springs from general principles of law, *:, li ewise proscribes discrimination. Ieneral principles of law include principles of equity,*+B, i.e., the general principles of fairness and !ustice, based on the test of what is reasonable. *++, The Fniversal &eclaration of Human Rights,*+), the #nternational ?ovenant on ;conomic, Social, and ?ultural Rights, *+(, the #nternational ?onvention on the ;limination of /ll Forms of Racial &iscrimination,*+<, the ?onvention against &iscrimination in ;ducation,*+4, the ?onvention $>o. +++% ?oncerning &iscrimination in Respect of ;mployment and =ccupation *+C, - all embody the general principle against discrimination, the very antithesis of fairness and !ustice. The "hilippines, through its ?onstitution, has incorporated this principle as part of its national laws. #n the wor place, where the relations between capital and labor are often s ewed in favor of capital, inequality and discrimination by the employer are all the more reprehensible. The ?onstitution*+', specifically provides that labor is entitled to 6humane conditions of wor .6 These conditions are not restricted to the physical wor place - the factory, the office or the field - but include as well the manner by which employers treat their employees. The ?onstitution*+E, also directs the State to promote 6equality of employment opportunities for all.6 Similarly, the Aabor ?ode *+:, provides that the State shall 6ensure equal wor opportunities regardless of se., race or creed.6 #t would be an affront to both the spirit and letter of these provisions if the State, in spite of its primordial obligation to promote and ensure equal employment opportunities, closes its eyes to unequal and discriminatory terms and conditions of employment. *)B, &iscrimination, particularly in terms of wages, is frowned upon by the Aabor ?ode. /rticle +(4, for e.ample, prohibits and penali-es *)+, the payment of lesser compensation to a female employee as against a male employee for wor of equal value. /rticle )<E declares it an unfair labor practice for an employer to discriminate in regard to wages in order to encourage or discourage membership in any labor organi-ation. >otably, the #nternational ?ovenant on ;conomic, Social, and ?ultural Rights, supra, in /rticle ' thereof, provides0 The States "arties to the present ?ovenant recogni-e the right of everyone to the en!oyment of !ust and favourable conditions of wor , which ensure, in particular0 a.....Remuneration which provides all wor ers, as a minimum, with0 i.....Fair wages and equal remuneration for wor of equal value without distinction of any ind, in particular women being guaranteed conditions of wor not inferior to those en!oyed by men, with equal pay for equal wor 3 . . .. The foregoing provisions impregnably institutionali-e in this !urisdiction the long honored legal truism of 6equal pay for equal wor .6 "ersons who wor with substantially equal qualifications, s ill, effort and responsibility, under similar conditions, should be paid similar salaries.*)), This rule applies to the School, its 6international character6 notwithstanding. The School contends that petitioner has not adduced evidence that local-hires perform wor equal to that of foreign-hires. *)(, The ?ourt finds this argument a little cavalier. #f an employer accords employees the same position and ran , the presumption is that these employees perform equal wor . This presumption is borne by logic and human e.perience. #f the employer pays one employee less than the rest, it is not for that employee to e.plain why he receives less or why the others receive more. That would be adding insult to in!ury. The employer has discriminated against that employee3 it is for the employer to e.plain why the employee is treated unfairly.

The employer in this case has failed to discharge this burden. There is no evidence here that foreign-hires perform )45 more efficiently or effectively than the local-hires. 8oth groups have similar functions and responsibilities, which they perform under similar wor ing conditions. The School cannot invo e the need to entice foreign-hires to leave their domicile to rationali-e the distinction in salary rates without violating the principle of equal wor for equal pay. 6Salary6 is defined in 8lac 1s Aaw &ictionary $4th ed.% as 6a reward or recompense .o- 'e-:%(e' *e-.o-1e0.6 Similarly, the "hilippine Aegal ;ncyclopedia states that 6salary6 is the 6*c,onsideration paid at regular intervals .o- +&e -en0e-%n4 o. 'e-:%(e'.6 #n Songco v. National Labor Relations Commission,*)<, we said that0 6salary6 means a recompense or consideration made to a person for his pains or industry in another man1s business. Whether it be derived from 6salarium,6 or more fancifully from 6sal,6 the pay of the Roman soldier, it carries with it the fundamental idea of compensation .o- 'e-:%(e' -en0e-e0. $;mphasis supplied.% While we recogni-e the need of the School to attract foreign-hires, salaries should not be used as an enticement to the pre!udice of localhires. The local-hires perform the same services as foreign-hires and they ought to be paid the same salaries as the latter. For the same reason, the 6dislocation factor6 and the foreign-hires1 limited tenure also cannot serve as valid bases for the distinction in salary rates. The dislocation factor and limited tenure affecting foreign-hires are adequately compensated by certain benefits accorded them which are not en!oyed by local-hires, such as housing, transportation, shipping costs, ta.es and home leave travel allowances. The ?onstitution en!oins the State to 6protect the rights of wor ers and promote their welfare,6 *)4, 6to afford labor full protection.6*)C, The State, therefore, has the right and duty to regulate the relations between labor and capital. *)', These relations are not merely contractual but are so impressed with public interest that labor contracts, collective bargaining agreements included, must yield to the common good. *)E, Should such contracts contain stipulations that are contrary to public policy, courts will not hesitate to stri e down these stipulations. #n this case, we find the point-of-hire classification employed by respondent School to !ustify the distinction in the salary rates of foreignhires and local hires to be an invalid classification. There is no reasonable distinction between the services rendered by foreign-hires and local-hires. The practice of the School of according higher salaries to foreign-hires contravenes public policy and, certainly, does not deserve the sympathy of this ?ourt. We agree, however, that foreign-hires do not belong to the same bargaining unit as the local-hires. / bargaining unit is 6a group of employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with equity to the employer indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.6*):, The factors in determining the appropriate collective bargaining unit are $+% the will of the employees $Ilobe &octrine%3 $)% affinity and unity of the employees1 interest, such as substantial similarity of wor and duties, or similarity of compensation and wor ing conditions $Substantial @utual #nterests Rule%3 $(% prior collective bargaining history3 and $<% similarity of employment status.*(B, The basic test of an asserted bargaining unit1s acceptability is whether or not it is fundamentally the combination which will best assure to all employees the e.ercise of their collective bargaining rights. *(+, #t does not appear that foreign-hires have indicated their intention to be grouped together with local-hires for purposes of collective bargaining. The collective bargaining history in the School also shows that these groups were always treated separately. Foreign-hires have limited tenure3 local-hires en!oy security of tenure. /lthough foreign-hires perform similar functions under the same wor ing conditions as the local-hires, foreign-hires are accorded certain benefits not granted to local-hires. These benefits, such as housing, transportation, shipping costs, ta.es, and home leave travel allowance, are reasonably related to their status as foreign-hires, and !ustify the e.clusion of the former from the latter. To include foreign-hires in a bargaining unit with local-hires would not assure either group the e.ercise of their respective collective bargaining rights. ;HEREFORE, the petition is I#G;> &F; ?=FRS;. The petition is hereby IR/>T;& #> "/RT. The =rders of the Secretary of Aabor and ;mployment dated 9une +B, +::C and @arch +:, +::', are hereby R;G;RS;& and S;T /S#&; insofar as they uphold the practice of respondent School of according foreign-hires higher salaries than local-hires. SO ORDERED. Puno, and Pardo, JJ., concur. Davide, Jr., C.J., (Chairman), on official leave.

Ynares Santiago, J., on leave. G.R. No. <<=>5 No:e1/e- 2>, 1>88 $EL5CA COR8ORATION, petitioner, vs. DIR. 8URA FERRER CALLEJA, LA$OR RELATIONS, #ANILA, #INISTR5 OF LA$OR AND E#8LO5#ENT3 #ED6AR$ITER, RODOLFO S. #ILADO, #INISTR5 OF LA$OR AND E#8LO5#ENT, REGIONAL OFFICE NO. 10 AND ASSOCIATED LA$OR UNION ALU6TUC8!, #INDANAO REGIONAL OFFICE, CAGA5AN DE ORO CIT5,respondents. Soriano and !rana La" #$$ices $or %etitioner. &he Solicitor 'eneral $or %ublic res%ondent. (rancisco D. !las $or res%ondent !ssociated Labor )nions &)CP.

8ARAS, J.: This is a petition for certiorari and prohibition with preliminary in!unction see ing to annul or to set aside the resolution of the 8ureau of Aabor Relations dated >ovember )<, +:EC and denying the appeal, and the 8ureau1s resolution dated 9anuary +(, +:E' denying petitioner1s motion for reconsideration. The dispositive portion of the questioned resolution dated >ovember )<, +:EC $Rollo, p. <% reads as follows0 WH;R;F=R;, in view of all the foregoing considerations, the =rder is affirmed and the appeal therefrom denied. Aet, therefore, the pertinent records of the case be remanded to the office of origin for the immediate conduct of the certification election. The dispositive portion of the resolution dated 9anuary +(, +:E' $Rollo, p. :)% reads, as follows0 WH;R;F=R;, the @otion for Reconsideration filed by respondent 8elyca ?orporation $Aivestoc /gro-&ivision% is hereby dismissed for lac of merit and the 8ureau1s Resolution dated )< >ovember +:EC is affirmed. /ccordingly, let the records of this case be immediately forwarded to the =ffice of origin for the holding of the certification elections. >o further motion shall hereafter be entertained. The antecedents of the case are as follows0 =n 9une (, +:EC, private respondent /ssociated Aabor Fnion $/AF%-TF?", a legitimate labor organi-ation duly registered with the @inistry of Aabor and ;mployment under Registration ?ertificate >o. 'E(-#", filed with the Regional =ffice >o. +B, @inistry of Aabor and ;mployment at ?agayan de =ro ?ity, a petition for direct certification as the sole and e.clusive bargaining agent of all the ran and file employees7wor ers of 8elyca ?orporation $Aivestoc and /gro-&ivision%, a duly organi-ed, registered and e.isting corporation engaged in the business of poultry raising, piggery and planting of agricultural crops such as corn, coffee and various vegetables, employing appro.imately )B4 ran and file employees7wor ers, the collective bargaining unit sought in the petition, or in case of doubt of the union1s ma!ority representation, for the issuance of an order authori-ing the immediate holding of a certification election $Rollo, p. +E%. /lthough the case was scheduled for hearing at least three times, no amicable settlement was reached by the parties. &uring the scheduled hearing of 9uly (+, +:EC they, however, agreed to submit simultaneously their respective position papers on or before /ugust ++, +:EC $rollo. p. C)%. "etitioner /AF-TF?", private respondent herein, in its petition and position paper alleged, among others, $+% that there is no e.isting collective bargaining agreement between the respondent employer, petitioner herein, and any other e.isting legitimate labor unions3 $)% that there had neither been a certification election conducted in the proposed bargaining unit within the last twelve $+)% months prior to the filing of the petition nor a contending union requesting for certification as the. sole and e.clusive bargaining representative in the proposed bargaining unit3 $(% that more than a ma!ority of respondent employer1s ran -and-file employees7wor ers in the proposed bargaining unit or one hundred thirty-eight $+(E% as of the date of the filing of the petition, have signed membership with the /AF-TF?" and have e.pressed their written consent and authori-ation to the filing of the petition3 $<% that in response to petitioner union1s two letters to the proprietor7

Ieneral @anager of respondent employer, dated /pril )+, +:EC and @ay E, + :EC, requesting for direct recognition as the sole and e.clusive bargaining agent of the ran -and-file wor ers, respondent employer has loc ed out ++: of its ran -and-file employees in the said bargaining unit and had dismissed earlier the local union president, vice-president and three other active members of the local unions for which an unfair labor practice case was filed by petitioner union against respondent employer last 9uly ), +:EC before the >AR? in ?agayan de =ro ?ity $Rollo, pp. +E3 )C(%.*+re,,an-./0"1 Respondent employer, on the other hand, alleged in its position paper, among others, $+% that due to the nature of its business, very few of its employees are permanent, the overwhelming ma!ority of which are seasonal and casual and regular employees3 $)% that of the total +(E ran -and-file employees who authori-ed, signed and supported the filing of the petition $a% +< were no longer wor ing as of 9une (, +:EC $b% < resigned after 9une, +:EC $c% C withdrew their membership from petitioner union $d% 4 were retrenched on 9une )(, +:EC $e% +) were dismissed due to malicious insubordination and destruction of property and $f% +BB simply abandoned their wor or stopped wor ing3 $(% that the +)E incumbent employees or wor ers of the livestoc section were merely transferred from the agricultural section as replacement for those who have either been dismissed, retrenched or resigned3 and $<% that the statutory requirement for holding a certification election has not been complied with by the union $Rollo, p. )C%. The Aabor /rbiter granted the certification election sought for by petitioner union in his order dated /ugust +E, +:EC $Rollo, p. C)%. =n February <, +:E', respondent employer 8elyca ?orporation, appealed the order of the Aabor /rbiter to the 8ureau of Aabor Relations in @anila $Rollo, p. C'% which denied the appeal $Rollo, p. EB% and the motion for reconsideration $Rollo, p. :)%. Thus, the instant petition received in this ?ourt by mail on February )B, +:E' $Rollo, p. (%. #n the resolution of @arch <, +:E', the Second &ivision of this ?ourt required respondent Fnion to comment on the petition and issued a temporary restraining order $,Rollo, p. :4%. Respondent union filed its comment on @arch (B, +:E' $Rollo, p. +:B%3 public respondents filed its comment on /pril E, +:E' $Rollo, p. )+E%. =n @ay <, +:E', the ?ourt resolved to give due course to the petition and to require the parties to submit their respective memoranda within twenty $)B% days from notice $Rollo, p. ))4%. The =ffice of the Solicitor Ieneral manifested on 9une ++, +:E' that it is adopting the comment for public respondents as its memorandum $Rollo, p. ))C%3 memorandum for respondent /AF was filed on 9une (B, +:E' $Rollo, p. )(+%3 and memorandum for petitioner, on 9uly (B, +:E' $Rollo, p. <(4%. The issues raised in this petition are0 # WH;TH;R =R >=T TH; "R="=S;& 8/RI/#>#>I F>#T #S /> /""R="R#/T; 8/RI/#>#>I F>#T. ## WH;TH;R =R >=T TH; ST/TFT=RJ R;DF#R;@;>T =F (B5 $>=W )B5% =F TH; ;@"A=J;;S #> TH; "R="=S;& 8/RI/#>#>I F>#T, /SK#>I F=R / ?;RT#F#?/T#=> ;A;?T#=> H/& 8;;> STR#?TAJ ?=@"A#;& W#TH. #n the instant case, respondent /AF see s direct certification as the sole and e.clusive bargaining agent of all the ran -and-file wor ers of the livestoc and agro division of petitioner 8;AJ?/ ?orporation $Rollo, p. )()%, engaged in piggery, poultry raising and the planting of agricultural crops such as corn, coffee and various vegetables $Rollo, p. )C%. 8ut petitioner contends that the bargaining unit must include all the wor ers in its integrated business concerns ranging from piggery, poultry, to supermarts and cinemas so as not to split an otherwise single bargaining unit into fragmented bargaining units $Rollo, p. <(4%. *+re,,an-./0"1 The Aabor ?ode does not specifically define what constitutes an appropriate collective bargaining unit. /rticle )4C of the ?ode provides0 /rt. )4C. 23clusive bargaining re%resentative.LThe labor organi-ation designated or selected by the ma!ority of the employees in an appropriate collective bargaining unit shall be e.clusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employee shall have the right at any time to present grievances to their employer.

/ccording to Rothenberg, a proper bargaining unit maybe said to be a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interests of all the employees, consistent with equity to the employer, indicate to be best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of the law $Rothenberg in Aabor Relations, p. <E)%. This ?ourt has already ta en cogni-ance of the crucial issue of determining the proper constituency of a collective bargaining unit. /mong the factors considered in &emocratic Aabor /ssociation v. ?ebu Stevedoring ?o. #nc. $+B( "hil ++B( *+:4E,% are0 6$+% will of employees $Ilove &octrine%3 $)% affinity and unity of employee1s interest, such as substantial similarity of wor and duties or similarity of compensation and wor ing conditions3 $(% prior collective bargaining history3 and $<% employment status, such as temporary, seasonal and probationary employees6. Fnder the circumstances of that case, the ?ourt stressed the importance of the fourth factor and sustained the trial court1s conclusion that two separate bargaining units should be formed in dealing with respondent company, one consisting of regular and permanent employees and another consisting of casual laborers or stevedores. =therwise stated, temporary employees should be treated separately from permanent employees. 8ut more importantly, this ?ourt laid down the test of proper grouping, which is community and mutuality of interest. Thus, in a later case, $/lhambra ?igar and ?igarette @anufacturing ?o. et al. v. /lhambra ;mployees1 /ssociation +B' "hil. )E *+:CB,% where the employment status was not at issue but the nature of wor of the employees concerned3 the ?ourt stressed the importance of the second factor otherwise nown as the substantial-mutual-interest test and found no reason to disturb the finding of the lower ?ourt that the employees in the administrative, sales and dispensary departments perform wor which has nothing to do with production and maintenance, unli e those in the raw leaf, cigar, cigarette and pac ing and engineering and garage departments and therefore community of interest which !ustifies the format or e.istence as a separate appropriate collective bargaining unit. Still later in PL!SL) v. C4R et al. $++B "hil. +EB *+:CB,% where the employment status of the employees concerned was again challenged, the ?ourt reiterating the rulings, both in Democratic Labor !ssociation v. Cebu Stevedoring Co. 4nc. su%ra and !lhambra Cigar and Cigarette Co. et al. v. !lhambra 2m%lo5ees6 !ssociation $su%ra% held that among the factors to be considered are0 employment status of the employees to be affected, that is the positions and categories of wor to which they belong, and the unity of employees1 interest such as substantial similarity of wor and duties. #n any event, whether importance is focused on the employment status or the mutuality of interest of the employees concerned 6the basic test of an asserted bargaining unit1s acceptability is whether or not it is fundamentally the combination which will best assure to all employees the e.ercise of their collective bargaining rights $&emocratic Aabor /ssociation v. ?ebu Stevedoring ?o. #nc. su%ra% Hence, still later following the substantial-mutual interest test, the ?ourt ruled that there is a substantial difference between the wor performed by musicians and that of other persons who participate in the production of a film which suffice to show that they constitute a proper bargaining unit. $AG> "ictures, #nc. v. "hilippine @usicians Iuild, + S?R/ +() *+:C+,%. ?oming bac to the case at bar, it is beyond question that the employees of the livestoc and agro division of petitioner corporation perform wor entirely different from those performed by employees in the supermarts and cinema. /mong others, the noted difference are0 their wor ing conditions, hours of wor , rates of pay, including the categories of their positions and employment status. /s stated by petitioner corporation in its position paper, due to the nature of the business in which its livestoc -agro division is engaged very few of its employees in the division are permanent, the overwhelming ma!ority of which are seasonal and casual and not regular employees $Rollo, p. )C%. &efinitely, they have very little in common with the employees of the supermarts and cinemas. To lump all the employees of petitioner in its integrated business concerns cannot result in an efficacious bargaining unit comprised of constituents en!oying a community or mutuality of interest. Fndeniably, the ran and file employees of the livestoc -agro division fully constitute a bargaining unit that satisfies both requirements of classification according to employment status and of the substantial similarity of wor and duties which will ultimately assure its members the e.ercise of their collective bargaining rights. ## #t is undisputed that petitioner 8;AJ?/ ?orporation $Aivestoc and /gro &ivision% employs more or less two hundred five $)B4% ran -andfile employees and wor ers. #t has no e.isting duly certified collective bargaining agreement with any legitimate labor organi-ation. There has not been any certification election conducted in the proposed bargaining unit within the last twelve $+)% months prior to the filing of the petition for direct certification and7or certification election with the @inistry of Aabor and ;mployment, and there is no contending union requesting for certification as the sole and e.clusive bargaining representative in the proposed bargaining unit. The records show that on the filing of the petition for certification and7or certification election on 9une (, +:EC3 +)< employees or wor ers which are more than a ma!ority of the ran -and-file employees or wor ers in the proposed bargaining unit had signed membership with respondent /AF-TF?" and had e.pressed their written consent and authori-ation to the filing of the petition. Thus, the Aabor /rbiter

ordered the certification election on /ugust +E, +:EC on a finding that (B5 of the statutory requirement under /rt. )4E of the Aabor ?ode has been met. 8ut, petitioner corporation contends that after 9une (, +:EC four $<% employees resigned3 si. $C% subsequently withdrew their membership3 five $4% were retrenched3 twelve $+)% were dismissed for illegally and unlawfully barricading the entrance to petitioner1s farm3 and one hundred $+BB% simply abandoned their wor . "etitioner1s claim was however belied by the @emorandum of its personnel officer to the ++: employees dated 9uly )E, +:EC showing that the employees were on stri e, which was confirmed by the finding of the 8ureau of Aabor Relations to the effect that they went on stri e on 9uly )<, +:EC $Rollo, p. <+:%. ;arlier the local union president, Warrencio @aputi3 the Gice-president, Iilbert Redoblado and three other active members of the union ?armen Saguing, Roberto Romolo and #luminada 8onio were dismissed and a complaint for unfair labor practice, illegal dismissal etc. was filed by the Fnion in their behalf on 9uly ), +:EC before the >AR? of ?agayan de =ro ?ity $Rollo, p. <+4%.*+re,,an-./0"1 The complaint was amended on /ugust )B, +:EC for respondent Fnion to represent Warrencio @aputi and +(' others against petitioner corporation and 8ello ?asanova "resident and Ieneral @anager for unfair labor practice, illegal dismissal, illegal loc out, etc. $Rollo, p. <+C%. Fnder /rt. )4' of the Aabor ?ode once the statutory requirement is met, the &irector of Aabor Relations has no choice but to call a certification election $/tlas Free Wor ers Fnion /FWF "SSAF Aocal v. >oriel, +B< S?R/ 4C4 *+:E+,3 Gismico #ndustrial Wor ers /ssociation $G#W/% v. >oriel, +(+ S?R/ 4C: *+:E<,% #t becomes in the language of the >ew Aabor ?ode 6@andatory for the 8ureau to conduct a certification election for the purpose of determining the representative of the employees in the appropriate bargaining unit and certify the winner as the e.clusive bargaining representative of all employees in the unit.6 $Federacion =brera de la #ndustria Tabaquera y =tros Traba!adores de Filipinas v. >oriel, ') S?R/ )< *+:'C,3 Kapisanan >g @ga @anggagawa v. >oriel, '' S?R/ <+< *+:'',%3 more so when there is no e.isting collective bargaining agreement. $Samahang @anggagawa >g "acific @ills, #nc. v. >oriel, +(< S?R/ +4) *+:E4,%3 and there has not been a certification election in the company for the past three years $"AF@ Federation of #ndustrial and /grarian Wor ers v. >oriel, ++: S?R/ ):: *+:E),% as in the instant case. #t is significant to note that +)< employees out of the )B4 employees of the 8elyca ?orporation have e.pressed their written consent to the certification election or more than a ma!ority of the ran and file employees and wor ers3 much more than the required (B5 and over and above the present requirement of )B5 by ;.ecutive =rder >o. +++ issued on &ecember )<, +:EB and applicable only to unorgani-ed establishments under /rt. )4', of the Aabor ?ode, to which the 8;AJ?/ ?orporation belong $/ss. Trade Fnions $/TF% v. Tra!ano, I.R. >o. '4()+, 9une )B, +:EE%.% @ore than that, any doubt cast on the authenticity of signatures to the petition for holding a certification election cannot be a bar to its being granted $Filipino @etals ?orp. v. =ple +B' S?R/ )++ *+:E+,%. ;ven doubts as to the required (B5 being met warrant holding of the certification election $"AF@ Federation of #ndustrial and /grarian Wor ers v. >oriel, ++: S?R/ ):: *+:E),%. #n fact, once the required percentage requirement has been reached, the employees1 withdrawal from union membership ta ing place after the filing of the petition for certification election will not affect said petition. =n the contrary, the presumption arises that the withdrawal was not free but was procured through duress, coercion or for a valuable consideration $Aa Suerte ?igar and ?igarette Factory v. &irector of the 8ureau of Aabor Relations, +)( S?R/ C': *+:E(,%. Hence, the subsequent disaffiliation of the si. $C% employees from the union will not be counted against or deducted from the previous number who had signed up for certification elections Gismico #ndustrial Wor ers /ssociation $G#W/% v. >oriel +(+ S?R/ 4C: *+:E<,%. *+re,,an-./0"1 Similarly, until a decision, final in character, has been issued declaring the stri e illegal and the mass dismissal or retrenchment valid, the stri ers cannot be denied participation in the certification election notwithstanding, the vigorous condemnation of the stri e and the fact that the pic eting were attended by violence. Fnder the foregoing circumstances, it does not necessarily follow that the stri ers in question are no longer entitled to participate in the certification election on the theory that they have automatically lost their !obs. $8arrera v. ?#R, +B' S?R/ 4:C *+:E+,%. For obvious reasons, the duty of the employer to bargain collectively is nullified if the purpose of the dismissal of the union members is to defeat the union in the consent requirement for certification election. $Samahang @anggagawa >g Gia @are v. >oriel, :E S?R/ 4B' *+:EB,%. /s stressed by this ?ourt, the holding of a certification election is a statutory policy that should not be circumvented. $Ieorge and "eter Aines #nc. v. /ssociated Aabor Fnions $/AF%, +(< S?R/ E) *+:EC,%. Finally, as a general rule, a certification election is the sole concern of the wor ers. The only e.ception is where the employer has to file a petition for certification election pursuant to /rt. )4: of the Aabor ?ode because the latter was requested to bargain collectively. 8ut thereafter the role of the employer in the certification process ceases. The employer becomes merely a bystander $Trade Fnion of the "hil. and /llied Services $TF"/S% v. Tra!ano, +)B S?R/ C< *+:E(,%. There is no showing that the instant case falls under the above mentioned e.ception. However, it will be noted that petitioner corporation from the outset has actively participated and consistently ta en the position of adversary in the petition for direct certification as the sole and e.clusive bargaining representative and7or certification election filed by respondent /ssociated Aabor Fnions $/AF%-TF?" to the e.tent of filing this petition for certiorari in this ?ourt. ?onsidering that a petition for certification election is not a litigation but a mere investigation of a non-adversary character to determining the bargaining unit to represent the employees $AG> "ictures, #nc. v. "hilippine @usicians Iuild, su%ra3 8ula ena Restaurant M ?aterer v. ?ourt of #ndustrial Relations, <4 S?R/ EE *+:'),3 Ieorge "eter Aines, #nc. v. /ssociated Aabor Fnion, +(< S?R/ E) *+:EC,3 Tanduay &istillery Aabor Fnion v. >AR?, +<: S?R/ <'B *+:E',%, and its only purpose is to give the employees true representation in their collective bargaining with an employer $?onfederation of ?iti-ens Aabor Fnions ??AF v.

>oriel, ++C S?R/ C:< *+:E),%, there appears to be no reason for the employer1s ob!ection to the formation of sub!ect union, much less for the filing of the petition for a certification election. "R;@#S;S ?=>S#&;R;&, $a% the petition is &#S@#SS;& for lac of merit $b% resolution of the 8ureau of Aabor Relations dated >ov. )<, +:EC is /FF#R@;&3 and the temporary restraining order issued by the ?ourt on @arch <, +:E' is A#FT;& permanently. S= =R&;R;&. 7elencio 8errera (Chair%erson), Padilla, Sarmiento and Regalado, JJ., concur. SAN #IGUEL COR8ORATION E#8LO5EES UNION68TG;O, -e*-e'en+e0 /, %+' 8-e'%0en+ RA5#UNDO HI8OLITO, JR., petitioner, vs. HON. #A. NIE?ES D. CONFESOR, Se(-e+)-, o. L)/o-, De*+. o. L)/o- @ E1*2o,1en+, SAN #IGUEL COR8ORATION, #AGNOLIA COR8ORATION Fo-1e-2,, #)4no2%) 82)n+! )n0 SAN #IGUEL FOODS, INC. Fo-1e-2,, $6#e4 82)n+!, respondents. +. A/8=R />& S=?#/A A;I#SA/T#=>3 A/8=R ?=&;3 ?=AA;?T#G; 8/RI/#>#>I /IR;;@;>T3 T;R@ =F R;"R;S;>T/T#=> /S";?T F#N;& T= F#G; J;/RS3 /AA =TH;R /S";?TS, THR;; J;/RS. - /rticle )4(-/ is a new provision. This was incorporated by Section )+ of Republic /ct >o. C'+4 $the Herrera-Geloso Aaw% which too effect on @arch )+, +:E:. This new provision states that the ?8/ has a term of five $4% years instead of three years, before the amendment of the law as far as the representation aspect is concerned. /ll other provisions of the ?8/ shall be negotiated not later than three $(% years after its e.ecution. The Orepresentation aspectP refers to the identity and ma!ority status of the union that negotiated the ?8/ as the e.clusive bargaining representative of the appropriate bargaining unit concerned. O/ll other provisionsP simply refers to the rest of the ?8/, economic as well as non-economic provisions, e.cept representation. ). ST/TFT=RJ ?=>STRF?T#=>3 ?=FRT @FST /S?;RT/#> A;I#SA/T#G; #>T;>T.L #t is a cardinal principle of statutory construction that the ?ourt must ascertain the legislative intent for the purpose of giving effect to any statute. The history of the times and state of the things e.isting when the act was framed or adopted must be followed and the conditions of the things at the time of the enactment of the law should be considered to determine the legislative intent. (. #&.3 #&.3 /RT#?A; )4(-/ =F TH; A/8=R ?=&;, ?=>STRF;&.L The framers of the law wanted to maintain industrial peace and stability by having both management and labor wor harmoniously together without any disturbance. Thus, no outside union can enter the establishment within five $4% years and challenge the status of the incumbent union as the e.clusive bargaining agent. Ai ewise, the terms and conditions of employment $economic and non-economic% can not be questioned by the employers or employees during the period of effectivity of the ?8/. The ?8/ is a contract between the parties and the parties must respect the terms and conditions of the agreement. >otably, the framers of the law did not give a fi.ed term as to the effectivity of the terms and conditions of employment. #t can be gleaned from their discussions that it was left to the parties to fi. the period. <. A/8=R />& S=?#/A A;I#SA/T#=>3 A/8=R ?=&;3 ?=AA;?T#G; 8/RI/#>#>I /IR;;@;>T3 T;R@ =F >=>R;"R;S;>T/T#=> "R=G#S#=> #S THR;; J;/RS.L The issue as to the term of non-representation provisions of the ?8/ need not belabored especially when we ta e note of the @emorandum of the Secretary of Aabor dated February )<, +::< which was mentioned in the Resolution of Fndersecretary 8ienvenido Aaguesma on 9anuary +C, +::4 in the certification election case involving the S@? employees. #n said memorandum, the Secretary of Aabor had occasion to clarify the term of the renegotiated terms of the ?8/ vis-a-vis the term of the bargaining agent, to wit0 /s a matter of policy the parties are encourages $sic% to enter into a renegotiated ?8/ with a term which would coincide $sic% with the aforesaid five $4% year term of the bargaining representative. #n the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a term of three $(% years or one which does not coincide with the said 4-year term, and said agreement is ratified by ma!ority of the members in the bargaining unit, the sub!ect contract is valid and legal and therefore, binds the contracting parties. The same will however not adversely affect the right of another union to challenge the ma!ority status of the incumbent bargaining agent within si.ty $CB% days before the lapse of the original five $4% year term of the ?8/. Thus, we do not find any grave abuse of discretion on the part of the Secretary of Aabor in ruling that the effectivity of the renegotiated terms of the ?8/ shall be for three $(% years. 4. #&.3 #&.3 ;@"A=J@;>T3 TR/>SF=R@/T#=> =F ?=@"/>#;S, @/>/I;@;>T "R;R=I/T#G; />& 8FS#>;SS 9F&I@;>T.L Fndeniably the transformation of the companies was a management prerogative and business !udgment which the courts can not loo into unless it is contrary to law, public policy or morals. >either can we impute any bad faith on the part of S@? so as to !ustify the application of the doctrine of piercing the corporate veil. C. #&.3 #&.3 ?=AA;?T#G; 8/RI/#>#>I /IR;;@;>T3 =";R/T#>I &#G#S#=>S =F TH; ?=@"/>J WH#?H 8;?/@; S;"/R/T; />& &#ST#>?T >= A=>I;R 8;A=>I T= / S#>IA; 8/RI/#>#>I F>#T.L ;ver mindful of the employeesQ interests, management has assured the concerned employees that they will be absorbed by the new corporations without loss of tenure and retaining their present pay and benefits according to the e.isting ?8/s. They were advised that upon the e.piration of the ?8/s, new agreements will be negotiated between the management of the new corporations and the bargaining representatives of the employees concerned. #ndubitably, therefore, @agnolia and S@F# became distinct entities with separate !uridical personalities. Thus, they can not belong to a single bargaining unit as held in the case of &iatagon Aabor Federation Aocal ++B of the FAIW" v. =ple. "etitioner-

unionQs attempt to include the employees of @agnolia and S@F# in the S@? bargaining unit so as to have a bigger mass base of employees has, therefore, no more valid ground. '. #&.3 #&.3 #&.3 T;ST #> &;T;R@#>#>I /""R="R#/T; 8/RI/#>#>I F>#T.L We reiterate what we have e.plained in the case of Fniversity of the "hilippines v. Ferrer-?alle!a that0 *T,here are various factors which must be satisfied and considered in determining the proper constituency of a bargaining unit. >o one particular factor is itself decisive of the determination. The weight accorded to any particular factor varies in accordance with the particular question or questions that may arise in a given case. What are these factors2 Rothenberg mentions a good number, but the most pertinent to our case are0 $+% will of the employees $Ilobe &octrine%3 $)% affinity and unit of employeesQ interest, such as substantial similarity of wor and duties, or similarity of compensation and wor ing conditions3 $(% prior collective bargaining history3 and $<% employment status, such as temporary, seasonal and probationary employees. E. #&.3 #&.3 #&.3 #&.3 ?/S; /T 8/R.L #n determining an appropriate bargaining unit, the test of grouping is mutuality or commonality of interests. The employees sought to be represented by the collective bargaining agent must have substantial mutual interests in terms of employment and wor ing conditions as evinced by the type of wor they performed. ?onsidering the spin-offs, the companies would consequently have their respective and distinctive concerns in terms of the nature of wor , wages, hours of wor and other conditions of employment. #nterests of employees in the different companies perforce differ. S@? is engaged in the business of beer manufacturing. @agnolia is involved in the manufacturing and processing of dairy products while S@F# is involved in the production of feeds and the processing of chic en. The nature of their products and scales of business may require different s ills which must necessarily be commensurated by different compensation pac ages. The different companies may have different volumes of wor and different wor ing conditions. For such reason, the employees of the different companies see the need to group themselves together and organi-e themselves into distinctive and different groups. #t would then be best to have separate bargaining units for the different companies where the employees can bargain separately according to their needs and according to their own wor ing conditions.

DECISION 7A8UNAN, J.9 This is a petition for certiorari assailing the =rder of the Secretary of Aabor rendered on February +4, +::( involving a labor dispute at San @iguel ?orporation. The facts are as follows0 =n 9une )E, +::B, petitioner-union San @iguel ?orporation ;mployees Fnion - "TIW= entered into a ?ollective 8argaining /greement $?8/% with private respondent San @iguel ?orporation $S@?% to ta e effect upon the e.piration of the previous ?8/ or on 9une (B, +:E:. This ?8/ provided, among others, that0 /RT#?A; N#G &FR/T#=> =F /IR;;@;>T S;?T#=> +. This /greement which shall be binding upon the parties hereto and their respective successors-in-interest, shall become effective and shall remain in force and effect until 9une (B, +::). S;?. ). #n accordance with /rticle )4(-/ of the Aabor ?ode as amended, the term of this /greement insofar as the representation aspect is concerned, shall be for five $4% years from 9uly +, +:E: to 9une (B, +::<. Hence, the freedom period for purposes of such representation shall be si.ty $CB% days prior to 9une (B, +::<. S;?. (. Si.ty $CB% days prior to 9une (B, +::) either party may initiate negotiations of all provisions of this /greement, e.cept insofar as the representation aspect is concerned. #f no agreement is reached in such negotiations, this /greement shall nevertheless remain in force up to the time a subsequent agreement is reached by the parties .*+, #n eeping with their vision and long term strategy for business e.pansion, S@? management informed its employees in a letter dated /ugust +(, +::+*),that the company which was composed of four operating divisions namely0 $+% 8eer, $)% "ac aging, $(% Feeds and Aivestoc s, $<% @agnolia and /gri-business would undergo a restructuring. *(,

;ffective =ctober +, +::+, @agnolia and Feeds and Aivestoc &ivision were spun-off and became two separate and distinct corporations0 @agnolia ?orporation $@agnolia% and San @iguel Foods, #nc. $S@F#%. >otwithstanding the spin-offs, the ?8/ remained in force and effect. /fter 9une (B, +::), the ?8/ was renegotiated in accordance with the terms of the ?8/ and /rticle )4(-/ of the Aabor ?ode. >egotiations started sometime in 9uly, +::) with the two parties submitting their respective proposals and counterproposals. &uring the negotiations, the petitioner-union insisted that the bargaining unit of S@? should still include the employees of the spunoff corporations0 @agnolia and S@F#3 and that the renegotiated terms of the ?8/ shall be effective only for the remaining period of two years or until 9une (B, +::<. S@?, on the other hand, contended that the members7employees who had moved to @agnolia and S@F#, automatically ceased to be part of the bargaining unit at the S@?. Furthermore, the ?8/ should be effective for three years in accordance with /rt. )4(-/ of the Aabor ?ode. Fnable to agree on these issues with respect to the bargaining unit and duration of the ?8/, petitioner-union declared a deadloc on September ):, +::B. =n =ctober ), +::), a >otice of Stri e was filed against S@?. #n order to avert a stri e, S@? requested the >ational ?onciliation and @ediation 8oard $>?@8% to conduct preventive mediation. >o settlement was arrived at despite several meetings held between the parties. =n >ovember (, +::), a stri e vote was conducted which resulted in a Oyes voteP in favor of a stri e. =n >ovember <, +::), private respondents S@?, @agnolia and S@F# filed a petition with the Secretary of Aabor praying that the latter assume !urisdiction over the labor dispute in a vital industry. /s prayed for, the Secretary of Aabor assumed !urisdiction over the labor dispute on >ovember +B, +::).*<, Several conciliation meetings were held but still no agreement7settlement was arrived at by both parties. /fter the parties submitted their respective position papers, the Secretary of Aabor issued the assailed =rder on February +4, +::( directing, among others, that the renegotiated terms of the ?8/ shall be effective for the period of three $(% years from 9une (B, +::)3 and that such ?8/ shall cover only the employees of S@? and not of @agnolia and S@F#. &issatisfied, petitioner-union now comes to this ?ourt questioning this =rder of the Secretary of Aabor. Subsequently, on @arch (B, +::4,*4, petitioner-union filed a @otion for #ssuance of a Temporary Restraining =rder or Writ of "reliminary #n!unction to en!oin the holding of the certification elections in the different companies, maintaining that the employees of @agnolia and S@F# fall within the bargaining unit of S@?. =n @arch ):, +::4, the ?ourt issued a resolution granting the temporary restraining order prayed for. *C, @eanwhile, an urgent motion for leave to intervene *',in the case was filed by the Samahan ng @alayang @anggagawa-San @iguel ?orporation-Federation of Free Wor ers $S@@-S@?-FFW% through its authori-ed representiative, ;lmer S. /rmando, alleging that it is one of the contending parties adversely effected by the temporary restraining order. The #ntervenor cited the case of Daniel S.L. 9orbon v. 8on. 9ienvenido 9. Laguesma ,*E, I.R. >o. +B+'CC, @arch 4, +::(, where the ?ourt recogni-ed the separation of the employees of @agnolia from the S@? bargaining unit. #t then prayed for the lifting of the temporary restraining order. Ai ewise, ;fren ?arreon, /cting "resident of the S@?;F-"TIW=, filed a petition for the withdrawal7dismissal of the petition considering that the temporary restraining order !eopardi-ed the employeesQ right to conclude a new ?8/. /t the same time, he challenged the legal personality of @r. Raymundo Hipolito, 9r. to represent the Fnion as its president when the latter was already officially dismissed from the company on =ctober <, +::<. /midst all these pleadings, the following primordial issues arise0 +% Whether or not the duration of the renegotiated terms of the ?8/ is to be effective for three years or for only two years3 and )% Whether or not the bargaining unit of S@? includes also the employees of @agnolia and S@F#. "etitioner-union contends that the duration for the non-representation provisions of the ?8/ should be coterminous with the term of the bargaining agency which in effect shall be for the remaining two years of the current ?8/, citing a previous decision of the Secretary of Aabor on &ecember +<, +::) in the matter of the labor dispute at "hilippine Refining ?ompany. *:, However, the Secretary of Aabor, in her questioned =rder of February +4, +::( ruled that the renegotiated terms of the ?8/ at S@? should run for a period of three $(% years. We agree with the Secretary of Aabor.

"ertinent to the first issue is /rt. )4(-/ of the Aabor ?ode as amended which reads0 /RT. )4(-/. &erms o$ a Collective 9argaining !greement. : /ny ?ollective 8argaining /greement that the parties may enter into shall, insofar as the representation aspect is concerned, be for a term of five $4% years. >o petition questioning the ma!ority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the &epartment of Aabor and ;mployment outside of the si.ty-day period immediately before the date of e.piry of such five year term of the ?ollective 8argaining /greement. /ll other provisions of the ?ollective 8argaining /greement shall be renegotiated not later than three $(% years after its e.ecution. /ny agreement on such other provisions of the ?ollective 8argaining /greement entered into within si. $C% months from the date of e.piry of the term of such other provisions as fi.ed in such ?ollective 8argaining /greement, shall retroact to the day immediately following such date. #f any such agreement is entered into beyond si. months, the parties shall agree on the duration of retroactivity thereof. #n case of a deadloc in the renegotiation of the collective bargaining agreement, the parties may e.ercise their rights under this ?ode. $underlining supplied.% /rticle )4(-/ is a new provision. This was incorporated by Section )+ of Republic /ct >o. C'+4 $the Herrera-Geloso Aaw% which too effect on @arch )+, +:E:. This new provision states that the ?8/ has a term of five $4% years instead of three years, before the amendment of the law as far as the representation aspect is concerned. /ll other provisions of the ?8/ shall be negotiated not later than three $(% years after its e.ecution. The Orepresentation aspectP refers to the identity and ma!ority status of the union that negotiated the ?8/ as the e.clusive bargaining representative of the appropriate bargaining unit concerned. O/ll other provisionsP simply refers to the rest of the ?8/, economic as well as non-economic provisions, e.cept representation. *+B, /s the Secretary of Aabor herself observed in the instant case, the law is clear and definite on the duration of the ?8/ insofar as the representation aspect is concerned, but is quite ambiguous with the terms of the other provisions of the ?8/. #t is a cardinal principle of statutory construction that the ?ourt must ascertain the legislative intent for the purpose of giving effect to any statute. The history of the times and state of the things e.isting when the act was framed or adopted must be followed and the conditions of the things at the time of the enactment of the law should be considered to determine the legislative intent. *++, We loo into the discussions leading to the passage of the law0 TH; ?H/#R@/> $R;". G;A/S?=%0 . . . the ?8/, insofar as the economic provisions are concerned . . . TH; ?H/#R@/> $S;>. H;RR;R/%0 @a.imum of three years2 TH; ?H/#R@/> $S;>. G;A=S=%0 @a.imum of three years. TH; ?H/#R@/> $S;>. H;RR;R/%0 "resent practice2 TH; ?H/#R@/> $R;". G;A=S=%0 #n other words, after three years puwede nang magnegotiate in that ?8/ for the remaining two years. TH; ?H/#R@/> $R;". H;RR;R/%0 Jou can negotiate for one year, two years or three years but assuming three years which, # thin , thatQs the li elihood. . . . TH; ?H/#R@/> $R;". G;A=S=%0 Jes. TH; ?H/#R@/> $S;>. H;RR;R/%0 Three years, the new union, assuming there will be a change of agent, at least he has one year to administer and to ad!ust, to develop rapport with the management. Jan ang importante. Jou now, for us na nagne-negotiate, and ha-ard talaga sa negotiation, when we negotiate with somebody na hindi natin ilala, then, we are governed by our biases na ito ay destroyer ng Aabor3 ang mga employer, ito bayaran o lang ito o ay na. RJan ang nangyayari, but let us give that allowance for one year to let them now. /ctually, ang thrust natin ay industrial peace, and there can be no industrial peace if you encourage union to fight each other. RJan ang problema.Q*+), ... ... ...

H=>. #S#&R=0 @adali iyan, asi these two periods that are mentioned in the ?8/ seem to provide some doubts later on in the implementation. Sabi asi rito, insofar as representation issue is concerned, seven years ang lifetime . . . H=>. ?H/#R@/> H;RR;R/0 Five years. H=>. #S#&R=0 Five years, all the others three years. H=>. ?H/#R@/> H;RR;R/0 >o. /ng three years duon sa terms and conditions, not later than three years . H=>. #S#&R=0 >ot later than three years, so within three years you have to ma e a new ?8/. H=>. ?H/#R@/> H;RR;R/0 Jes.

H=>. #S#&R=0 That is again for purposes of renewing the terms, three years na naman iyan L then, seven years . . . H=>. ?H/#R@/> H;RR;R/0 >ot later than three years. H=>. #S#&R=0 /ssuming that they usually follow the period L three years nang three years, but under this law with respect to representation L five years, ano2 >ow, after three years, nag aroon ng bagong terms, tapos na iyong term, renewed na iyong terms, ang arapatan noon sa representation issue mayroon pang two years left. H=>. ?H/#R@/> H;RR;R/0 =ne year na lang because si. years nang lahat, three plus three. H=> #S#&R=0 Hindi, two years pa rin ang natitira, eh. Three years pa lang ang natatapos. So, another ?8/ was formed and this ?8/ mayroon na naman siyang bagong five years with respect to representation issue. H=>. ?H/#R@/> H;RR;R/0 Hindi. Hindi na. Ianito iyan. #yong terms and conditions for three years. H=>. #S#&R=0 Jes. H=>. ?H/#R@/> H;RR;R/0 =n the third year you can start negotiating to change the terms and conditions . H=>. #S#&R=0 Jes. H=>. ?H/#R@/> H;RR;R/0 /ssuming you will follow the practice . . . H=>. #S#&R=0 =o. H=>. ?H/#R@/> H;RR;R/0 8ut on the fifth year, ang representation status now can be questioned, so ba a puwedeng mag aroon ng certification election. #f the incumbent union loses, then the new union administers the contract for one year to give him time to now his counterpart L the employer, before he can negotiate for a new term. #yan ang advantage. H=>. #S#&R=0 Kasi, when the ?8/ has only a three-year lifetime with respect to the terms and conditions and then, so you have to renew that in three years L you renew for another three years, mayroon na naman another five years iyong ano . . . H=>. />#/I0 Hindi, ang natitira duon sa representation two years na lang. H=>. ?H/#R@/> H;RR;R/0 Two years na lang sa representation. H=>. />#/I0 So that if they changed the union, iyong last year. . . . H=>. ?H/#R@/> H;RR;R/0 #yon lang, that you have to administer the contract. Then, voluntary arbitration na ayo and then mayroon a nang probisyon Oretroact on the date of the e.piry dateP. "agnatalo and incumbent unyon, mag-aassume and new union, administer the contract. /s far as the term ang condition, for one year, and that will give him time and the employer to now each other. H=>. 9/8/R0 8oy, let us be realistic. # thin if a new union wins a certification election, it would not want to administer a ?8/ which has not been negotiated by the union itself. H=>. ?H/#R@/> H;RR;R/0 That is not true, Hon. This is true because what is happening now in the country is that the term ng contract natin, duon din mage-e.pire ang representation. #yon and nangyari. That is where you have the gulo. Ianoon and nangyari. So, ang nangyari diyan, pag-mayroon certification election, e.pire ang contract, ano ang usual issue - company union. # can you $sic% give you more what the incumbent union is giving. So ang mangyayari diyan, pag-negotiate mo hardline na agad. H=>. ?H/#R@/> G;A=S=0 @on, for four years2 H=>. #S#&R=0 /ng tingin o lang dito, iyong distinction between the terms and the representation aspect L why do we have to distinguish between three and five2 WhatQs wrong with having a uniform e.piration period2 H=>. ?H/#R@/> H;RR;R/0 Five years. H=>. #S#&R=0 "uro three years. H=>. ?H/#R@/> H;RR;R/0 That is what we are trying to avoid because ang reality diyan, @art, pagpaso mo sa umpanya, mag-ne-negotiate a ng si. months, thatQs the average, aabot pa minsan ng one year. "ag atapos ng negotiation mo, signing ayo. There will be an allowed period of one year. Third year na, uumpisahan naman ang organi-ations, papaso na ang ibang unyon because the reality in Trade Fnion committee, they organi-e, we organi-e. So, actually, you have only industrial peace for one year, effective industrial peace. That is what we are trying to change. =therwise, we will continue to discourage the investors and the union will never grow because every other year it has to use its money for the certification election. /ng grabe pang practice diyan, mag-a-advance ang federation for three years union dues para panggastos lang sa certification election. That is what we are trying to avoid. H=>. 9/8/R0 /lthough there are unions which really get advances.

H=>. ?H/#R@/> H;RR;R/0 "ag nag-survey tayo sa mga unyon, ganoon ang mangyayari. /nd # thin our responsibility here is to create a legal framewor to promote industrial peace and to develop responsible and fair labor movement . H=>. ?H/#R@/> G;A=S=0 #n other words, the longer the period of the effectivity . . . ... H=>. ?H/#R@/> G;A=S=. $continuing% . . in other words, the longer the period of effectivity of the ?8/, the better for industrial peace. H=>. ?H/#R@/> H;RR;R/0 representation status. H=>. ?H/#R@/> G;A=S=0 =nly on L H=>. ?H/#R@/> H;RR;R/0 L the representations. H=>. ?H/#R@/> G;A=S=0 8ut on the economic issues. H=>. ?H/#R@/> H;RR;R/0 Jou have to review that. The parties will have to review that. H=>. ?H/#R@/> G;A=S=0 /t least on second year. H=>. ?H/#R@/> H;RR;R/0 >ot later than ( years ang aramihan ng mga, mag-negotiate when the company is L $interrupted% *+(, ... From the aforesaid discussions, the legislators were more inclined to have the period of effectivity for three $(% years insofar as the economic as well as non-economic provisions are concerned, e.cept representation. =bviously, the framers of the law wanted to maintain industrial peace and stability by having both management and labor wor harmoniously together without any disturbance. Thus, no outside union can enter the establishment within five $4% years and challenge the status of the incumbent union as the e.clusive bargaining agent. Ai ewise, the terms and conditions of employment $economic and noneconomic% can not be questioned by the employers or employees during the period of effectivity of the ?8/. The ?8/ is a contract between the parties and the parties must respect the terms and conditions of the agreement. *+<, >otably, the framers of the law did not give a fi.ed term as to the effectivity of the terms and conditions of employment. #t can be gleaned from their discussions that it was left to the parties to fi. the period. #n the instant case, it is not difficult to determine the period of effectivity for the non-representation provisions of the ?8/. Ta ing it from the history of their ?8/s, S@? intended to have the terms of the ?8/ effective for three $(% years rec oned from the e.piration of the old or previous ?8/ which was on 9une (B, +:E:, as it provides0 S;?T#=> +. This /greement which shall be binding upon the parties hereto and their respective successors-in-interest, shall become effective and shall remain in force and effect until 9une (B, +::). The argument that the "R? case is applicable is indeed misplaced. We quote with favor the =rder of the Secretary of Aabor in the light of S@?Qs peculiar situation as compared with "R?Qs company situation. #t is true that in the "hilippine Refining ?ompany case $=S-/9-BB(+-:+ $sic%, Aabor &ispute at "hilippine Refining ?ompany%, we ruled that the term of the renegotiated provisions of the ?8/ should coincide with the remaining term of the agency. #n doing so, we placed premium on the fact that "R? has only two $)% unions and no other union had yet e.ecuted a renewed term of ( years. >onetheless, in ruling for a shortened term, we were guided by our considered perception that the said term would improve, rather than ruin, the general welfare of both the wor ers and the company. #t is equally true that once the economic provisions of the ?8/ e.pire, the residual representative status of the union is effective for only ) more years. However, if circumstances warrant that the contract duration which it is soliciting from the company for the benefit of the wor ers, shall be a little bit longer than its lifespan, then this =ffice cannot stand in the way of a more ideal situation. We must not lose sight of the fact that the primordial purpose of a collective contract is to promote industrial harmony and stability in the terms and conditions of employment. To our mind, this ob!ective cannot be achieved without giving due consideration to the peculiarities and unique characteristics of the employer. #n the case at bar, there is no dispute that the mother corporation $S@?% spun-off two of its divisions and thereby gave birth to two $)% other entities now nown as @agnolia ?orporation and San @iguel Foods, #nc. #n order to effect a smooth transition, the companies concerned continued to recogni-e the e.isting unions as the bargaining agents of their respective bargaining units. #n the meantime, the other unions in these companies eventually concluded their ?8/ negotiations on the remaining term and all of them agreed on a (-year cycle. >otably, the following ?8/s were forged incorporating a term of (-years on the renegotiated provisions, to wit0 +. S@? ). S@F daily-paid employees union $#8@% monthly-paid employees and daily-paid employees at the ?abuyao "lant.

There is a direct lin between the voluntary recognition by the company of the continuing representative status of the unions after the aforementioned spin-offs and the stand of the company for a (-year renegotiated cycle when the economic provisions of the e.isting ?8/s e.pired, i.e., to maintain stability and avoid confusion when the umbilical cord of the two divisions were severed from their parent. These two cannot be considered independently of each other for they were intended to reinforce one another. "recisely, the company conceded to face the same union notwithstanding the spin-offs in order to preserve industrial peace during the infancy of the two corporations. #f the union would insist on a shorter renegotiated term, then all the advantages gained by both parties in this regard, would have gone to naught. With this in mind, this office feels that it will betray its mandate should we order the parties to e.ecute a )-year renegotiated term for then chaos and confusion, rather than tranquility, would be the order of the day. Worse, there is a strong li elihood that such a ruling might spawn discontent and possible mass actions against the company coming from the other unions who had already agreed to a (-year renegotiated terms. #f this happens, the purpose of this =fficeQs intervention into the partiesQ controversy would have been defeated. *+4, The issue as to the term of the non-representation provisions of the ?8/ need not belabored especially when we ta e note of the @emorandum of the Secretary of Aabor dated February )<, +::< which was mentioned in the Resolution of Fndersecretary 8ienvenido Aaguesma on 9anuary +C, +::4 in the certification election case involving the S@? employees. *+C, #n said memorandum, the Secretary of Aabor had occasion to clarify the term of the renegotiated terms of the ?8/ vis a vis the term of the bargaining agent, to wit0 /s a matter of policy the parties are encourages $sic% to enter into a renegotiated ?8/ with a term which would coincidde $sic% with the aforesaid five $4% year term of the bargaining representative. #n the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a term of three $(% years or one which does not coincide with the said 4-year term, and said agreement is ratified by ma!ority of the members in the bargaining unit, the sub!ect contract is valid and legal and therefore, binds the contracting parties. The same will however not adversely affect the right of another union to challenge the ma!ority status of the incumbent bargaining agent within si.ty $CB% days before the lapse of the original five $4% year term of the ?8/. Thus, we do not find any grave abuse of discretion on the part of the Secretary of Aabor in ruling that the effectivity of the renegotiated terms of the ?8/ shall be for three $(% years. With respect to the second issue, there is, li ewise, no merit in petitioner-unionQs assertion that the employees of @agnolia and S@F# should still be considered part of the bargaining unit of S@?. @agnolia and S@F# were spun-off to operate as distinct companies on =ctober +, +::+. @anagement saw the need for these transformations in eeping with its vision and long term strategy as it e.plained in its letter addressed to the employees dated /ugust +(, +::+0 . . . /s early as +:EC, we announced the decentrali-ation program and spo e of the need for structures that can react fast to competition, a changing environment, shorter product life cycles and shifts in consumer preference. We further stated in the +:E' /nnual Report to Stoc holders that San @iguelQs businesses will be more autonomous and self sufficient so as to better acquire and master new technologies, cope with a labor force with different e.pertises and e.pectations, and master and satisfy the changing needs of our customers and end-consumers. /s subsidiaries, @agnolia and FA& will gain better industry focus and fle.ibility, greater awareness of operating results, and speedier, more responsive decision ma ing. ... We only have to loo at the e.perience of ?oca-?ola 8ottlers "hilippines, #nc., since this company was organi-ed about ten years ago, to see the benefits that arise from restructuring a division of San @iguel into a more competitive organi-ation. /s a stand-alone enterprise, ??8"# engineered a dramatic turnaround and has sustained its sales and mar et share leadership ever since. We are confident that history will repeat itself, and the transformation of @agnolia and FA& will be successful as that of ??8"#. *+', Fndeniably, the transformation of the companies was a management prerogative and business !udgment which the courts can not loo into unless it is contrary to law, public policy or morals. >either can we impute any bad faith on the part of S@? so as to !ustify the application of the doctrine of piercing the corporate veil. *+E, ;ver mindful of the employeesQ interests, management has assured the concerned employees that they will be absorbed by the new corporations without loss of tenure and retaining their present pay and benefits according to the e.isting ?8/s. *+:, They were advised that upon the e.piration of the ?8/s, new agreements will be negotiated between the management of the new corporations and the bargaining representatives of the employees concerned. /s a result of the spin-offs0 +. ;ach of the companies are run by, supervised and controlled by different management teams including separate human resource7personnel managers.

). ;ach ?ompany enforces its own administrative and operational rules and policies and are not dependent on each other in their operations. (. ;ach entity maintains separate financial statements and are audited separately from each other. *)B, #ndubitably, therefore, @agnolia and S@F# became distinct entities with separate !uridical personalities. Thus, they can not belong to a single bargaining unit as held in the case ofDiatagon Labor (ederation Local //; o$ the )L'<P v. #%le .*)+, We elucidate0 The fact that their businesses are related and that the )(C employees of Ieorgia "acific #nternational ?orporation were originally employees of Aianga 8ay Aogging ?o., #nc. is not a !ustification for disregarding their separate personalities. Hence, the )(C employees, who are now attached to Ieorgia "acific #nternational ?orporation, should not be allowed to vote in the certification election at the Aianga 8ay Aogging ?o., #nc. They should vote at a separate certification election to determine the collective bargaining representative of the employees of Ieorgia "acific #nternational ?orporation. "etitioner-unionQs attempt to include the employees of @agnolia and S@F# in the S@? bargaining unit so as to have a bigger mass base of employees has, therefore, no more valid ground. @oreover, in determining an appropriate bargaining unit, the test of grouping is mutuality or commonality of interests. The employees sought to be represented by the collective bargaining agent must have substantial mutual interests in terms of employment and wor ing conditions as evinced by the type of wor they performed. *)), ?onsidering the spin-offs, the companies would consequently have their respective and distinctive concerns in terms of the nature of wor , wages, hours of wor and other conditions of employment. #nterests of employees in the different companies perforce differ. S@? is engaged in the business of beer manufacturing. @agnolia is involved in the manufacturing and processing of dairy products *)(, while S@F# is involved in the production of feeds and the processing of chic en. *)<, The nature of their products and scales of business may require different s ills which must necessarily be commensurated by different compensation pac ages. The different companies may have different volumes of wor and different wor ing conditions. For such reason, the employees of the different companies see the need to group themselves together and organi-e themselves into distinctive and different groups. #t would then be best to have separate bargaining units for the different companies where the employees can bargain separately according to their needs and according to their own wor ing conditions. We reiterate what we have e.plained in the case of )niversit5 o$ the Phili%%ines v. (errer Calle=a*)4, that0 *T,here are various factors which must be satisfied and considered in determining the proper constituency of a bargaining unit. >o one particular factor is itself decisive of the determination. The weight accorded to any particular factor varies in accordance with the particular question or questions that may arise in a given case. What are these factors2 Rothenberg mentions a good number, but the most pertinent to our case are0 $+% will of the employees $Ilobe &octrine%3 $)% affinity and unit of employeesQ interest, such as substantial similarity of wor and duties, or similarity of compensation and wor ing conditions3 $(% prior collective bargaining history3 and $<% employment status, such as temporary, seasonal and probationary employees . .. ... /n enlightening appraisal of the problem of defining an appropriate bargaining unit is given in the +Bth /nnual Report of the >ational Aabor Relations 8oard wherein it is emphasi-ed that the factors which said board may consider and weigh in fi.ing appropriate units are0 the history, e.tent and type of organi-ation of employees3 the history of their collective bargaining3 the history, e.tent and type of organi-ation of employees in other plants of the same employer, or other employers in the same industry3 the s ill wages, wor , and wor ing conditions of the employees3 the desires of the employees3 the eligibility of the employees for membership in the union or unions involved3 and the relationship between the unit or units proposed and the employerQs organi-ation, management, and operation . .. . . #n said report, it is li ewise emphasi-ed that the basic test in determining the appropriate bargaining unit is that a unit, to be appropriate, must affect a grouping of employees who have substantial, mutual interests in wages, hours, wor ing conditions and other sub!ects of collective bargaining $citing Smith on Aabor Aaws, (+C-(+'3 Francisco, Aabor Aaws, +C)% . .. Finally, we ta e note of the fact that the separate interests of the employees of @agnolia and S@F# from those of S@? has been recogni-ed in the case of Daniel 9orbon v. Laguesma.*)C, We quote0 ;ven assuming in gratia argumenti that at the time of the election they were regular employees of San @iguel, nonetheless, these wor ers are no longer connected with San @iguel ?orporation in any manner because @agnolia has ceased to be a division of San @iguel ?orporation and has been formed into a separate corporation with a personality of its own $p. (B4, Rollo%. This development, which was brought to our attention by private respondents, necessarily renders moot and academic any further discourse on the propriety of the elections which petitioners impugn via the present recourse $p. (+:, Rollo%. #n view of all the foregoing, we do not find any grave abuse of discretion on the part of the Secretary of Aabor in rendering the assailed =rder.

;HEREFORE, the petition is &#S@#SS;& for lac of merit. The Temporary Restraining =rder issued on @arch ):, +::4 is lifted. SO ORDERED. 9ellosillo, >itug, and 8ermosisima, Jr., JJ., concur. Padilla, J. (Chairman), too no part, in view of stoc investments in S@?.

G.R. No. 100485 Se*+e1/e- 21, 1>>4 SAN #IGUEL COR8ORATION, petitioner, vs. THE HONORA$LE $IEN?ENIDO E. LAGUES#A )n0 NORTH LUAON #AGNOLIA SALES LA$OR UNION6 INDE8ENDENT, respondents. Siguion Re5na, 7ontecillo ? #ngsia@o $or %etitioner. 2.N.!. CruA ? !ssociates $or %rivate res%ondent.

8UNO, J.: "etitioner San @iguel ?orporation $S@?% prays that the Resolution dated @arch +:, +::+ and the =rder dated /pril +), +::+ of public respondent Fndersecretary 8ienvenido ;. Aaguesma declaring respondent union as the sole and e.clusive bargaining agent of all the @agnolia sales personnel in northern Au-on be set aside for having been issued in e.cess of !urisdiction and7or with grave abuse of discretion. =n 9une <, +::B, the >orth Au-on @agnolia Sales Aabor Fnion $respondent union for brevity% filed with the &epartment of Aabor a petition for certification election among all the regular sales personnel of @agnolia &airy "roducts in the >orth Au-on Sales /rea. 1 "etitioner opposed the petition and questioned the appropriateness of the bargaining unit sought to be represented by respondent union. #t claimed that its bargaining history in its sales offices, plants and warehouses is to have a se%arate bargaining unit $or each sales o$$ice . The petition was heard on >ovember :, +::B with petitioner being represented by /tty. /lvin ?. 8atalla of the Siguion Reyna law office. /tty. 8atalla withdrew petitioner1s opposition to a certification election and agreed to consider all the sales o$$ices in northern LuAon as one bargaining unit . /t the pre-election conference, the parties agreed inter alia, on the date, time and place of the consent election. Respondent union won the election held on >ovember )<, +::B. #n an =rder dated &ecember (, +::B, 2 @ediator-/rbiter 8enalfre 9. Ialang certified respondent union as the sole and e.clusive bargaining agent for all the regular sales personnel in all the sales offices of @agnolia &airy "roducts in the >orth Au-on Sales /rea. "etitioner appealed to the Secretary of Aabor. #t claimed that /tty. 8atalla was only authori-ed to agree to the holding of certification elections sub!ect to the following conditions0 $+% there would only be one general election3 $)% in this general election, the individual sales offices shall still comprise separate bargaining units. = #n a Resolution dated @arch +:, +::+, 4 public respondent, by authority of the Secretary of Aabor, denied S@?1s appeal and affirmed the =rder of the @ed- /rbiter. Hence this petition for certiorari. "etitioner claims that0 TH; H=>=R/8A; F>&;RS;?R;T/RJ A/IF;S@/ /?T;& W#TH IR/G; /8FS; =F &#S?R;T#=> WH;> H; #I>=R;& />& T=T/AAJ &#SR;I/R&;& ";T#T#=>;R1S G/A#& />& 9FST#F#/8A; IR=F>&S WHJ TH; ;RR=R @/&; #> I==& F/#TH 8J ";T#T#=>;R1S ?=F>S;A 8; ?=RR;?T;&, />& #>ST;/& RFA;&0

/ TH/T "R#G/T; R;S"=>&;>T #S 6TH; S=A; />& ;N?AFS#G; 8/RI/#>#>I /I;>T F=R /AA TH; R;IFA/R S/A;S =FF#?;S =F @/I>=A#/ &/#RJ "R=&F?TS, >=RTH AFS=> S/A;S /R;/6, ?=@"A;T;AJ #I>=R#>I TH; ;ST/8A#SH;& 8/RI/#>#>I H#ST=RJ =F ";T#T#=>;R S@?. 8 TH/T ";T#T#=>;R #S ;ST="";& FR=@ DF;ST#=>#>I TH; 6/IR;;@;>T6 ;>T;R;& #>T= /T TH; H;/R#>I => : >=G;@8;R +::B, #> ?=>TR/G;>T#=> =F TH; ;ST/8A#SH;& F/?TS =F TH; ?/S; />& TH; /""A#?/8A; A/W => TH; @/TT;R. We find no merit in the petition. The issues for resolution are0 $+% whether or not respondent union represents an appropriate bargaining unit, and $)% whether or not petitioner is bound by its lawyer1s act of agreeing to consider the sales personnel in the north Au-on sales area as one bargaining unit. "etitioner claims that in issuing the impugned =rders, public respondent disregarded its collective bargaining history which is to have a se%arate bargaining unit $or each sales o$$ice . #t insists that its prior collective bargaining history is the most %ersuasive criterion in determining the appropriateness of the collective bargaining unit. There is no merit in the contention. / bargaining unit is a 6group of employees of a given employer, comprised of all or less than all of the entire body of employees, consistent with equity to the employer, indicate to be the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.6 5 The fundamental factors in determining the appropriate collective bargaining unit are0 $+% the will of the employees $Ilobe &octrine%3 B $)% affinity and unity of the employees1 interest, such as substantial similarity of wor and duties, or similarity of compensation and wor ing conditions $Substantial @utual #nterests Rule%3 $(% prior collective bargaining history3 and $<% similarity of employment status. < ?ontrary to petitioner1s assertion, this ?ourt has categorically ruled that the e.istence of a prior collective bargaining history is neither decisive nor conclusive in the determination of what constitutes an appropriate bargaining unit. 8 #ndeed, the test of grouping is mutualit5 or commonalit5 o$ interests. The employees sought to be represented by the collective bargaining agent must have substantial mutual interests in terms of employment and wor ing conditions as evinced by the type of wor they perform. #n the case at bench, respondent union sought to represent the sales personnel in the various @agnolia sales offices in northern Au-on. There is similarity of employment status for only the regular sales personnel in the north Au-on area are covered. They have the same duties and responsibilities and substantially similar compensation and wor ing conditions. The commonality of interest among he sales personnel in the north Au-on sales area cannot be gainsaid. #n fact, in the certification election held on >ovember )<, +::B, the employees concerned accepted respondent union as their e.clusive bargaining agent. ?learly, they have e.pressed their desire to be one. "etitioner cannot insist that each of the sales office of @agnolia should constitute only one bargaining unit. What greatly militates against this position is the meager number o$ sales %ersonnel in each o$ the 7agnolia sales o$$ice in northern LuAon . ;ven the bargaining unit sought to be represented by respondent union in the entire north Au-on sales area consists only of appro.imately $i$t5 $ive $44% em%lo5ees. > Surely, it would not be for the best interest of these employees if they would further be fractionali-ed. The adage 6there is strength in number6 is the very rationale underlying the formation of a labor union. /nent the second issue, petitioner claims that /tty. 8atalla was merely a substitute lawyer for /tty. ?hristine =na, who got stranded in Aegaspi ?ity. /tty. 8atalla was allegedly unfamiliar with the collective bargaining history of its establishment. "etitioner claims it should not be bound by the mista e committed by its substitute lawyer. We are not persuaded. /s discussed earlier, the collective bargaining history of a company is not decisive of what should comprise the collective bargaining unit. #nsofar as the alleged 6mista e6 of the substitute lawyer is concerned, we find that this mista e was the direct result of the negligence of petitioner1s lawyers. #t will be noted that /tty. =na was under the supervision of two $)% other lawyers, /ttys. 9acinto de la Rosa, 9r. and Ieorge ?. >ograles. There is nothing in the records to show that these two $)% counsels were li ewise

unavailable at that time. #nstead of deferring the hearing, petitioner1s counsels chose to proceed therewith. #ndeed, prudence dictates that, in such case, the lawyers allegedly actively involved in S@?1s labor case should have adequately and sufficiently briefed the substitute lawyer with respect to the matters involved in the case and the specific limits of his authority. Fnfortunately, this was not done in this case. The negligence of its lawyers binds petitioner. /s held by this ?ourt in the case of >illa Rhecar 9us v. De la CruA0 10 . . . /s a general rule, a client is bound by the mista es of his counsel. =nly when the application of the general rule would result in serious in=ustice should an e.ception thereto be called for. #n the case at bench, petitioner insists that each of the sales offices in northern Au-on should be considered as a separate bargaining unit for negotiations would be more e.peditious. "etitioner obviously chooses to follow the path of least resistance. #t is not, however, the convenience of the employer that constitutes the determinative factor in forming an appropriate bargaining unit. ;qually, if not more important, is the interest of the employees. #n choosing and crafting an appropriate bargaining unit, e.treme care should be ta en to prevent an employer from having any undue advantage over the employees1 bargaining representative. =ur wor ers are wea enough and it is not our social policy to further debilitate their bargaining representative. #n sum, we find that no arbitrariness or grave abuse of discretion can be attributed to public respondents certification of respondent union as the sole and e.clusive bargaining agent of all the regular @agnolia sales personnel of the north Au-on sales area. WH;R;F=R;, premises considered, the challenged Resolution and =rder of public respondent are hereby /FF#R@;& in toto, there being no showing of grave abuse of discretion or lac of !urisdiction. S= =R&;R;&. Narvasa, C.J., Regalado and 7endoAa, JJ., concur. Padilla, J., too@ no %art.

[G.R. No. 110=>>. Au4u'+ 15, 1>><]

SAN #IGUEL COR8ORATION SU8ER?ISORS AND ECE#8T UNION AND ERNESTO L. 8ONCE, 8-e'%0en+, petitioners, vs. HONARA$LE $IEN?ENIDO E. LAGUES#A IN HIS CA8ACIT5 AS UNDERSECRETAR5 OF LA$OR AND E#8LO5#ENT, HONORA$LE DANILO L. RE5NANTE IN HIS CA8ACIT5 AS #ED6AR$ITER AND SAN #IGUEL COR8ORATION, respondents. DECISION RO#ERO, J.9 This is a "etition for Certiorari with "rayer for the #ssuance of "reliminary #n!unction see ing to reverse and set aside the =rder of public respondent, Fndersecretary of the &epartment of Aabor and ;mployment, 8ienvenido ;. Aaguesma, dated @arch ++, +::(, in ?ase >o. =S @/ /-)-'B-:+*+, entitled O#n Re0 "etition for ?ertification ;lection /mong the Supervisory and ;.empt ;mployees of the San @iguel ?orporation @agnolia "oultry "lants of ?abuyao, San Fernando and =tis, San @iguel ?orporation Supervisors and ;.empt Fnion, "etitioner.P The =rder e.cluded the employees under supervisory levels ( and < and the so-called e.empt employees from the proposed bargaining unit and ruled out their participation in the certification election. The antecedent facts are undisputed0 =n =ctober 4, +::B, petitioner union filed before the &epartment of Aabor and ;mployment $&=A;% a "etition for &istrict ?ertification or ?ertification ;lection among the supervisors and e.empt employees of the S@? @agnolia "oultry "roducts "lants of ?abuyao, San Fernando and =tis. =n &ecember +:, +::B, @ed-/rbiter &anilo A. Reynante issued an =rder ordering the conduct of certification among the supervisors and e.empt employees of the S@? @agnolia "oultry "roducts "lants of ?abuyao, San Fernando and =tis as one bargaining unit.

=n 9anuary +E, +::+, respondent San @iguel ?orporation filed a >otice of /ppeal with @emorandum on /ppeal, pointing out, among others, the @ed-/rbiterQs error in grouping together all three $(% separate plants, =tis, ?abuyao and San Fernando, into one bargaining unit, and in including supervisory levels ( and above whose positions are confidential in nature. =n 9uly )(, +::+, the public respondent, Fndersecretary Aaguesma, granted respondent companyQs /ppeal and ordered the remand of the case to the @ed-/rbiter of origin for determination of the true classification of each of the employees sought to be included in the appropriate bargaining unit. Fpon petitioner-unionQs motion dated /ugust ', +::+, Fndersecretary Aaguesma granted the reconsideration prayed for on September (, +::+ and directed the conduct of separate certification elections among the supervisors ran ed as supervisory levels + to < $S+ to S<% and the e.empt employees in each of the three plants at ?abuyao, San Fernando and =tis. =n September )+, +::+, respondent company, San @iguel ?orporation filed a @otion for Reconsideration with @otion to suspend proceedings. =n @arch ++, +::(, an =rder was issued by the public respondent granting the @otion, citing the doctrine enunciated in "hilips #ndustrial &evelopment, #nc. v. >AR?*), case. Said =rder reads in part0 O. . . ?onfidential employees, li e managerial employees, are not allowed to form, !oin or assist a labor union for purposes of collective bargaining. #n this case, S( and S< and the so-called e.empt employees are admittedly confidential employees and therefore, they are not allowed to form, !oin or assist a labor union for purposes of collective bargaining following the above courtQs ruling. ?onsequently, they are not allowed to participate in the certification election. WH;R;F=R;, the motion is hereby granted and the &ecision of this =ffice dated B( September +::+ is hereby modified to the e.tent that employees under supervisory levels ( and < $S( and S<% and the so-called e.empt employees are not allowed to !oin the proposed bargaining unit and are therefore e.cluded from those who could participate in the certification election.P *(, Hence this petition. For resolution in this case are the following issues0 +. Whether Supervisory employees ( and < and the e.empt employees of the company are considered confidential employees, hence ineligible from !oining a union. ). #f they are not confidential employees, do the employees of the three plants constitute an appropriate single bargaining unit. =n the first issue, this ?ourt rules that said employees do not fall within the term Oconfidential employeesP who may be prohibited from !oining a union. There is no question that the said employees, supervisors and the e.empt employees, are not vested with the powers and prerogatives to lay down and e.ecute management policies and7or to hire, transfer, suspend, layoff, recall, discharge or dismiss employees. They are, therefore, not qualified to be classified as managerial employees who, under /rticle )<4 *<, of the Aabor ?ode, are not eligible to !oin, assist or form any labor organi-ation. #n the very same provision, they are not allowed membership in a labor organi-ation of the ran -and-file employees but may !oin, assist or form separate labor organi-ations of their own. The only question that need be addressed is whether these employees are properly classified as confidential employees or not. ?onfidential employees are those who $+% assist or act in a confidential capacity, $)% to persons who formulate, determine, and effectuate management policies in the field of labor relations. *4, The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee T that is, the confidential relationship must e.ist between the employees and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. *C, The e.clusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal ob!ective sought to be accomplished by the Oconfidential employee rule.P &he broad rationale behind this rule is that em%lo5ees should not be %laced in a %osition involving a %otential con$lict o$ interests. *', O@anagement 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 companyQs position with regard to contract negotiations, the disposition of grievances, or other labor relations matters.P *E, There have been ample precedents in this regard, thus in 8ulletin "ublishing ?ompany v. Hon. /ugusto Sanche-,*:, the ?ourt held that Oif these managerial employees would belong to or be affiliated with a Fnion, the latter might not be assured of their loyalty to the Fnion in view of evident conflict of interest. The Fnion can also become company-dominated with the presence of managerial employees in Fnion membership.P The same rationale was applied to confidential employees in OIolden Farms, #nc. v. Ferrer-?alle!aP*+B,and in the more recent case of O"hilips #ndustrial &evelopment, #nc. v. >AR?P*++, 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 e.ercise managerial functions in the field of labor relations. Therefore, the rationale behind the ineligibility of managerial employees to form, assist or !oin a labor union was held equally applicable to them.*+), /n important element of the Oconfidential employee ruleP is the employeeQs need to use labor relations information. Thus, in determining the confidentiality of certain employees, a ey questions frequently considered is the employeesQ necessary access to confidential labor relations information.*+(, #t is the contention of respondent corporation that Supervisory employees ( and < and the e.empt employees come within the meaning of the term Oconfidential employeesP primarily because they answered in the affirmative when as ed O&o you handle confidential data or documents2P in the "osition Duestionnaires submitted by the Fnion. *+<, #n 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 Olabor relations.P*+4, Iranting arguendo that an employee has access to confidential labor relations information but such is merely incidental to his duties and nowledge thereof is not necessary in the performance of such duties, said access does not render the employee a confidential employee.*+C, O#f access to confidential labor relations information is to be a factor in the determination of an employeeQs confidential status, such information must relate to the employerQs 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 nowledge 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 e.cluded from the bargaining unit representing employees of the union or association.P*+', O/ccess to information which is regarded by the employer to be confidential from the business standpoint, such as financial information*+E, or technical trade secrets, will not render an employee a confidential employee.P *+:, Herein listed are the functions of supervisors ( and higher0 +. To underta e decisions to discontinue7temporarily stop shift operations when situations require. ). To effectively oversee the quality control function at the processing lines in the storage of chic en and other products. (. To administer efficient system of evaluation of products in the outlets. <. To be directly responsible for the recall, holding and re!ection of direct manufacturing materials. 4. To recommend and initiate actions in the maintenance of sanitation and hygiene throughout the plant. *)B, #t 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 employerQs internal business operations. /s held in Westinghouse ;lectric ?orporation v. >ational Aabor Relations 8oard ,*)+, Oan employee may not be e.cluded from appropriate bargaining unit merely because he has access to confidential information concerning employerQs internal business operations and which is not related to the field of labor relations.P #t must be borne in mind that Section ( of /rticle N### of the +:E' ?onstitution mandates the State to guarantee to OallP wor ers the right to self-organi-ation. Hence, confidential employees who may be e.cluded 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. *)), #n the case at bar, supervisors ( and above may not be considered confidential employees merely because they handle Oconfidential dataP 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 ?ourt rules that they may appropriately form a bargaining unit for purposes of collective bargaining. Furthermore, even assuming that they are confidential employees, !urisprudence has established that there is no legal prohibition against confidential employees who are not performing managerial functions to form and !oin a union. *)(, #n this connection, the issue of whether the employees of San @iguel ?orporation @agnolia "oultry "roducts "lants of ?abuyao, San Fernando, and =tis constitute a single bargaining unit needs to be threshed out. #t is the contention of the petitioner union that the creation of three $(% separate bargaining units, one each for ?abuyao =tis and San Fernando as ruled by the respondent Fndersecretary, is contrary to the one-company, one-union policy. #t adds that Supervisors level + to < and e.empt employees of the three plants have a similarity or a community of interests. This ?ourt finds the contention of the petitioner meritorious. /n appropriate bargaining unit may be defined as Oa 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.P *)<,

/ unit to be appropriate must effect a grouping of employees who have substantial, mutual interests in wages, hours, wor ing conditions and other sub!ects of collective bargaining. *)4, #t is readily seen that the employees in the instant case have Ocommunity or mutuality of interest,P which is the standard in determining the proper constituency of a collective bargaining unit. *)C, #t is undisputed that they all belong to the @agnolia "oultry &ivision of San @iguel ?orporation. This means that, although they belong to three different plants, they perform wor of the same nature, receive the same wages and compensation, and most importantly, share a common sta e in concerted activities. #n light of these considerations, the Solicitor Ieneral has opined that separate bargaining units in the three different plants of the division will fragmenti-e the employees of the said division, thus greatly diminishing their bargaining leverage. /ny 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 ma e up for the slac caused by the bargaining unit engaged in the concerted activity. This situation will clearly frustrate the provisions of the Aabor ?ode and the @andate of the ?onstitution.*)', The fact that the three plants are located in three different places, namely, in ?abuyao, Aaguna, in =tis, "andacan, @etro @anila, and in San Fernando, "ampanga is immaterial. Ieographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed as demonstrated in F" v. ?alle!a-Ferrer where all non-academic ran and file employees of the Fniversity of the "hilippines in&iliman, Due-on ?ity, "adre Faura, @anila, Aos 8aUos, Aaguna and the Gisayas 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. >either are there regional differences that are li ely to impede the operations of a single bargaining representative. ;HEREFORE, the assailed =rder of @arch ++, +::( is hereby S;T /S#&; and the =rder of the @ed-/rbiter on &ecember +:, +::B is R;#>ST/T;& under which a certification election among the supervisors $level + to <% and e.empt employees of the San @iguel ?orporation @agnolia "oultry "roducts "lants of ?abuyao, San Fernando, and =tis as one bargaining unit is ordered conducted. SO ORDERED. Regalado, (Chairman), Puno, 7endoAa, and &orres, Jr., JJ., concur. G.R. No. >B18> Ju2, 14, 1>>2 UNI?ERSIT5 OF THE 8HILI88INES, petitioner, vs. HON. 8URA FERRER6CALLEJA, D%-e(+o- o. +&e $u-e)u o. L)/o- Re2)+%on', De*)-+1en+ o. L)/o- )n0 E1*2o,1en+, )n0 THE ALL U.8. ;OR7ERSD UNION, -e*-e'en+e0 /, %+' 8-e'%0en+, Ro')-%o 0e2 Ro')-%o, respondent.

NAR?ASA, C.J.: #n this special civil action of certiorari the Fniversity of the "hilippines see s the nullification of the =rder dated =ctober (B, +::B of &irector "ura Ferrer-?alle!a of the 8ureau of Aabor Relations holding that 6professors, associate professors and assistant professors $of the Fniversity of the "hilippines% are . . ran -and-file employees . . 36 consequently, they should, together with the so-called non-academic, non-teaching, and all other employees of the Fniversity, be represented by only one labor organi-ation. 1 The Fniversity is !oined in this underta ing by the Solicitor Ieneral who 6has ta en a position not contrary to that of petitioner and, in fact, has manifested . . that he is not opposing the petition . . .6 2 The case = was initiated in the 8ureau of Aabor Relations by a petition filed on @arch ), +::B by a registered labor union, the 6=rgani-ation of >on-/cademic "ersonnel of F"6 $=>/"F"%. 4 ?laiming to have a membership of (,)(C members L comprising more than ((5 of the :,C+' persons constituting the non-academic personnel of F"-&iliman, Aos 8aUos, @anila, and Gisayas, it sought the holding of a certification election among all said non-academic employees of the Fniversity of the "hilippines. /t a conference thereafter held on @arch )), +::B in the 8ureau, the Fniversity stated that it had no ob!ection to the election. =n /pril +E, +::B, another registered labor union, the 6/ll F" Wor ers1 Fnion,6 5 filed a comment, as intervenor in the certification election proceeding. /lleging that its membership covers both academic and non-academic personnel, and that it aims to unite all F" ran -and-file employees in one union, it declared its assent to the holding of the election provided the appropriate organi-ational unit was first clearly defined. #t observed in this connection that the Research, ;.tension and "rofessional Staff $R;"S%, who are academic non-teaching personnel, should not be deemed part of the organi-ational unit.

For its part, the Fniversity, through its Ieneral ?ounsel, B made of record its view that there should be two $)% unions0 one for academic, the other for non-academic or administrative, personnel considering the dichotomy of interests, conditions and rules governing these employee groups. &irector ?alle!a ruled on the matter on /ugust ', +::B. < She declared that 6the appropriate organi-ational unit . . should embrace all the regular ran -and-file employees, teaching and non-teaching, of the Fniversity of the "hilippines, including all its branches6 and that there was no sufficient evidence 6to !ustify the grouping of the non-academic or administrative personnel into an organi-ation unit apart and distinct from that of the academic or teaching personnel.6 &irector ?alle!a adverted to Section : of ;.ecutive =rder >o. +EB, viA.0 Sec. :. The appropriate organi-ational unit shall be the employer unit consisting of ran -and-file employees, unless circumstances otherwise require. and Section +, Rule #G of the Rules #mplementing said ;= +EB $as amended by S;?. ), Resolution of "ublic Sector Aabor @anagement ?ouncil dated @ay +<, +:E:, viA.0 ... ... ... For purposes of registration, an appropriate organi-ational unit may refer to0 ... ... ... d. State universities or colleges, government-owned or controlled corporations with original charters. She went on to say that the general intent of ;= +EB was 6not to fragmenti-e the employer unit, as 6can be gleaned from the definition of the term 6accredited employees1 organi-ation,6 which refers to0 . . a registered organi-ation of the ran -and-file employees as defined in these rules recogni-ed to negotiate for the employees in an organi-ational unit headed by an officer with sufficient authority to bind the agency, such as . . . . . . state colleges and universities. The &irector thus commanded that a certification election be 6conducted among ran -and-file employees, teaching and non-teaching6 in all four autonomous campuses of the F", and that management appear and bring copies of the corresponding payrolls for 9anuary, 9une, and 9uly, +::B at the 6usual pre-election conference . . .6 /t the pre-election conference held on @arch )), +::B at the Aabor =rgani-ational &ivision of the &=A;, 8 the Fniversity sought further clarification of the coverage of the term, 6ran -and-file6 personnel, asserting that not every employee could properly be embraced within both teaching and non-teaching categories since there are those whose positions are in truth managerial and policy-determining, and hence, e.cluded by law. /t a subsequent hearing $on =ctober <, +::B%, the Fniversity filed a @anifestation see ing the e.clusion from the organi-ational unit of those employees holding supervisory positions among non-academic personnel, and those in teaching staff with the ran of /ssistant "rofessor or higher, submitting the following as grounds therefor0 +% ?ertain 6high-level employees6 with policy-ma ing, managerial, or confidential functions, are ineligible to !oin ran -and-file employee organi-ations under Section (, ;= +EB0 Sec. (. High-level employees whose functions are normally considered as policy-ma ing or managerial or whose duties are of a highly confidential nature shall not be eligible to !oin the organi-ation of ran -and file government employees3 )% #n the Fniversity hierarchy, not all teaching and non-teaching personnel belong the ran -and file0 !ust as there are those occupying managerial positions within the non-teaching roster, there is also a dichotomy between various levels of the teaching or academic staff3 (% /mong the non-teaching employees composed of /dministrative Staff and Research personnel, only those holding positions below Irade +E should be regarded as ran -and-file, considering that those holding higher grade positions, li e ?hiefs of Sections, perform supervisory functions including that of effectively recommending termination of appointments or initiating appointments and promotions3 and

<% >ot all teaching personnel may be deemed included in the term, 6ran -and-file36 only those holding appointments at the instructor level may be so considered, because those holding appointments from /ssistant "rofessor to /ssociate "rofessor to full "rofessor ta e part, as members of the Fniversity ?ouncil, a policy-ma ing body, in the initiation of policies and rules with respect to faculty tenure and promotion. > The =>/"F" quite categorically made of record its position3 that it was not opposing the Fniversity1s proferred classification of ran -and file employees. =n the other hand, the 6/ll F" Wor ers1 Fnion6 opposed the Fniversity1s view, in a "osition "aper presented by it under date of =ctober +E, +::B. &irector ?alle!a subsequently promulgated an =rder dated =ctober (B, +::B, resolving the 6sole issue6 of 6whether or not professors, associate professors and assistant professors are included in the definition of high-level employee$s%6 in light of Rule #, Section $+% of the #mplementing Iuidelines of ;.ecutive =rder >o. +EB, defining 6high level employee6 as follows0 +. High Aevel ;mployee L is one whose functions are normally considered policy determining, managerial or one whose duties are highly confidential in nature. / managerial function refers to the e.ercise of powers such as0 +. To effectively recommend such managerial actions3 ). To formulate or e.ecute management policies and decisions3 or (. To hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees. The &irector ad!udged that said teachers are ran -and-file employees 6qualified to !oin unions and vote in certification elections.6 /ccording to her L / careful perusal of the Fniversity ?ode . . shows that the policy-ma ing powers of the ?ouncil are limited to academic matters, namely, prescribing courses of study and rules of discipline, fi.ing student admission and graduation requirements, recommending to the 8oard of Regents the conferment of degrees, and disciplinary power over students. The policy-determining functions contemplated in the definition of a high-level employee pertain to managerial, e.ecutive, or organi-ation policies, such as hiring, firing, and disciplining of employees, salaries, teaching7wor ing hours, other monetary and non-monetary benefits, and other terms and conditions of employment. They are the usual issues in collective bargaining negotiations so that whoever wields these powers would be placed in a situation of conflicting interests if he were allowed to !oin the union of ran -and-file employees. The Fniversity seasonably moved for reconsideration, see ing to ma e the following points, to wit0 +% F" professors do 6wield the most potent managerial powers0 the power to rule on tenure, on the creation of new programs and new !obs, and conversely, the abolition of old programs and the attendant re-assignment of employees. )% To say that the ?ouncil is 6limited to $acting on% academic matters6 is error, since academic decisions 6are the most important decisions made in a Fniversity . . $being, as it were% the heart, the core of the Fniversity as a wor place. (% ?onsidering that the law regards as a 6high level6 employee, one who performs either policy-determining, managerial, or confidential functions, the &irector erred in applying only the 6managerial functions6 test, ignoring the 6policy-determining functions6 test. <% The &irector1s interpretation of the law would lead to absurd results, e.g.0 6an administrative officer of the ?ollege of Aaw is a high level employee, while a full "rofessor who has published several treatises and who has distinguished himself in argument before the Supreme ?ourt is a mere ran -and-file employee. / dormitory manager is classified as a high level employee, while a full "rofessor or "olitical Science with a "h. &. and several Honorary doctorates is classified as ran -and-file.6 10 The motion for reconsideration was denied by &irector ?alle!a, by =rder dated >ovember )B, +::B. The Fniversity would now have this ?ourt declare void the &irector1s =rder of =ctober (B, +::B as well as that of >ovember )B, +::B. 11 / temporary restraining order was issued by the ?ourt, by Resolution dated &ecember 4, +::B conformably to the Fniversity1s application therefor. Two issues arise from these undisputed facts. =ne is whether or not professors, associate professors and assistant professors are 6highlevel employees6 6whose functions are normally considered policy determining, managerial or . . highly confidential in nature.6 The other is whether or not, they, and other employees performing academic functions, 12 should comprise a collective bargaining unit distinct and

different from that consisting of the non-academic employees of the Fniversity, 1= considering the dichotomy of interests, conditions and rules e.isting between them. /s regards the first issue, the ?ourt is satisfied that it has been correctly resolved by the respondent &irector of 8ureau Relations. #n light of ;.ecutive =rder >o. +EB and its implementing rules, as well as the Fniversity1s charter and relevant regulations, the professors, associate professors and assistant professors $hereafter simply referred to as professors% cannot be considered as e.ercising such managerial or highly confidential functions as would !ustify their being categori-ed as 6high-level employees6 of the institution. The /cademic "ersonnel ?ommittees, through which the professors supposedly e.ercise managerial functions, were constituted 6in order to foster greater involvement of the faculty and other academic personnel in appointments, promotions, and other personnel matters that directly affect them.6 14 /cademic "ersonnel ?ommittees at the departmental and college levels were organi-ed 6consistent with, and demonstrative of the very idea of consulting the faculty and other academic personnel on matters directly affecting them6 and to allow 6fle.ibility in the determination of guidelines peculiar to a particular department or college.6 15 "ersonnel actions affecting the faculty and other academic personnel should, however, 6be considered under uniform guidelines and consistent with the Resolution of the 8oard $of Regents% adopted during its 'E:th @eeting $++-)C-C:% creating the Fniversity /cademic "ersonnel 8oard.6 1B Thus, the &epartmental /cademic "ersonnel ?ommittee is given the function of 6assist$ing% in the review of the recommendations initiated by the &epartment ?hairman with regard to recruitment, selection, performance evaluation, tenure and staff development, in accordance with the general guidelines formulated by the Fniversity /cademic "ersonnel 8oard and the implementing details laid down by the ?ollege /cademic "ersonnel ?ommittee36 1< while the ?ollege /cademic "ersonnel ?ommittee is entrusted with the following functions0 18 +. /ssist the &ean in setting up the details for the implementation of policies, rules, standards or general guidelines as formulated by the Fniversity /cademic "ersonnel 8oard3 ). Review the recommendation submitted by the &/"?s with regard to recruitment, selection, performance evaluation, tenure, staff development, and promotion of the faculty and other academic personnel of the ?ollege3 (. ;stablish departmental priorities in the allocation of available funds for promotion3 <. /ct on cases of disagreement between the ?hairman and the members of the &/"? particularly on personnel matters covered by this =rder3 4. /ct on complaints and7or protests against personnel actions made by the &epartment ?hairman and7or the &/"?. The Fniversity /cademic "ersonnel 8oard, on the other hand, performs the following functions0 1> +. /ssist the ?hancellor in the review of the recommendations of the ?/"?1S. ). /ct on cases of disagreement between the &ean and the ?/"?. (. Formulate policies, rules, and standards with respect to the selection, compensation, and promotion of members of the academic staff. <. /ssist the ?hancellor in the review of recommendations on academic promotions and on other matters affecting faculty status and welfare. From the foregoing, it is evident that it is the Fniversity /cademic "ersonnel ?ommittee, composed of deans, the assistant for academic affairs and the chief of personnel, which formulates the policies, rules and standards respecting selection, compensation and promotion of members of the academic staff. The departmental and college academic personnel committees1 functions are purely recommendatory in nature, sub!ect to review and evaluation by the Fniversity /cademic "ersonnel 8oard. #n (ran@lin 9a@er Com%an5 o$ the Phili%%ines vs. &ra=ano, 20 this ?ourt reiterated the principle laid down in National 7erchandising Cor%. vs. Court o$ 4ndustrial Relations , 21 that the power to recommend, in order to qualify an employee as a supervisor or managerial employee 6must not only be e$$ective but the e.ercise of such authority should not be merely of a routinary or clerical nature but should require the use of inde%endent =udgment.6 Where such recommendatory powers, as in the case at bar, are sub!ect to evaluation, review and final action by the department heads and other higher e.ecutives of the company, the same, although present, are not effective and not an e.ercise of independent !udgment as required by law. Significantly, the personnel actions that may be recommended by the departmental and college academic personnel committees must conform with the general guidelines drawn up by the university personnel academic committee. This being the case, the members of the

departmental and college academic personnel committees are not unli e the chiefs of divisions and sections of the >ational Waterwor s and Sewerage /uthority whom this ?ourt considered as ran -and-file employees in National <ater"or@s ? Se"erage !uthorit5 vs. N<S! Consolidated )nions, 22 because 6given ready policies to e.ecute and standard practices to observe for their e.ecution, . . . they have little freedom of action, as their main function is merely to carry out the company1s orders, plans and policies.6 The power or prerogative pertaining to a high-level employee 6to effectively recommend such managerial actions, to formulate or e.ecute management policies or decisions and7or to hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees6 2= is e.ercised to a certain degree by the university academic personnel board7committees and ultimately by the 8oard of Regents in accordance with Section C of the Fniversity ?harter, 24 thus0 $e% To appoint, on the recommendation of the "resident of the Fniversity, professors, instructors, lecturers and other employees of the Fniversity3 to fi. their compensation, hours of service, and such other duties and conditions as it may deem proper3 to grant them in its discretion leave of absence under such regulations as it may promulgate, any other provision of law to the contrary notwithstanding, and to remove them for cause after investigation and hearing shall have been had. /nother factor that militates against petitioner1s espousal of managerial employment status for all its professors through membership in the departmental and college academic personnel committees is that not all professors are members thereof. @embership and the number of members in the committees are provided as follows0 25 Sec. ). 7embershi% in Committees. L @embership in committees may be made either through appointment, election, or by some other means as may be determined by the faculty and other academic personnel of a particular department or college. Sec. (. Number o$ 7embers. L #n addition to the ?hairman, in the case of a department, and the &ean in the case of a college, there shall be such number of members representing the faculty and academic personnel as will afford a fairly representative, deliberative and manageable group that can handle evaluation of personnel actions. >either can membership in the Fniversity ?ouncil elevate the professors to the status of high-level employees. Section C $f% and : of the F" ?harter respectively provide0 2B Sec. C. The 8oard of Regents shall have the following powers and duties . . . 3 ... ... ... $f% To approve the courses of study and rules of discipline drawn up by the Fniversity ?ouncil as hereinafter provided3 . .. Sec. :. There shall be a Fniversity ?ouncil consisting of the "resident of the Fniversity and of all instructors in the university holding the ran of professor, associate professor, or assistant professor. The ?ouncil shall have the power to prescribe the courses of study and rules of discipline, sub=ect to the a%%roval o$ the 9oard o$ Regents. #t shall fi. the requirements for admission to any college of the university, as well as for graduation and the receiving of a degree. The ?ouncil alone shall have the power to recommend students or others to be recipients of degrees. Through its president or committees, it shall have disciplinary power over the students "ithin the limits %rescribed b5 the rules o$ disci%line a%%roved b5 the 9oard o$ Regents. The powers and duties of the "resident of the Fniversity, in addition to those specifically provided in this /ct shall be those usually pertaining to the office of president of a university. #t is readily apparent that the policy-determining functions of the Fniversity ?ouncil are sub!ect to review, evaluation and final approval by the 8oard of Regents. The ?ouncil1s power of discipline is li ewise circumscribed by the limits imposed by the 8oard of Regents. What has been said about the recommendatory powers of the departmental and college academic personnel committees applies with equal force to the alleged policy-determining functions of the Fniversity ?ouncil. ;ven assuming arguendo that F" professors discharge policy-determining functions through the Fniversity ?ouncil, still such e.ercise would not qualify them as high-level employees within the conte.t of ;.=. +EB. /s correctly observed by private respondent, 6;.ecutive =rder >o. +EB is a law concerning public sector unionism. #t must therefore be construed within that conte.t. Within that conte.t, the Fniversity of the "hilippines represents the government as an employer. 1"olicy-determining1 refers to policy-determination in university mattes that affect those same matters that may be the sub!ect of negotiation between public sector management and labor. The reason why 1policy-determining1 has been laid down as a test in segregating ran -and-file from management is to ensure that those who lay down

policies in areas that are still negotiable in public sector collective bargaining do not themselves become part of those employees who see to change these policies for their collective welfare.6 2< The policy-determining functions of the Fniversity ?ouncil refer to academic matters, i.e. those governing the relationship between the Fniversity and its students, and not the Fniversity as an employer and the professors as employees. #t is thus evident that no conflict of interest results in the professors being members of the Fniversity ?ouncil and being classified as ran -and-file employees. 8e that as it may, does it follow, as public respondent would propose, that all ran -and-file employees of the university are to be organi-ed into a single collective bargaining unit2 / 6bargaining unit6 has been 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 the best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law. 28 =ur labor laws do not however provide the criteria for determining the proper collective bargaining unit. Section +) of the old law, Republic /ct >o. E'4 otherwise nown as the #ndustrial "eace /ct, simply reads as follows0 2> Sec. +). 23clusive Collective 9argaining Re%resentation $or Labor #rganiAations . L The labor organi-ation designated or selected for the purpose of collective bargaining by the ma!ority of the employees in an appropriate collective bargaining unit shall be the e.clusive representative of all the employees in such unit for the purpose of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment3 Provided, That any individual employee or group of employees shall have the right at any time to present grievances to their employer. /lthough said Section +) of the #ndustrial "eace /ct was subsequently incorporated into the Aabor ?ode with minor changes, no guidelines were included in said ?ode for determination of an appropriate bargaining unit in a given case. =0 Thus, apart from the single descriptive word 6appropriate,6 no specific guide for determining the proper collective bargaining unit can be found in the statutes. ;ven ;.ecutive =rder >o. +EB already adverted to is not much help. /ll it says, in its Section :, is that 6$t%he appropriate organi-ational unit shall be the employer unit consisting of ran -and-file employees, unless circumstances otherwise require.6 ?ase law fortunately furnishes some guidelines. When first confronted with the tas of determining the proper collective bargaining unit in a particular controversy, the ?ourt had perforce to rely on /merican !urisprudence. #n Democratic Labor !ssociation vs. Cebu Stevedoring Com%an5, 4nc., decided on February )E, +:4E, =1 the ?ourt observed that 6the issue of how to determine the proper collective bargaining unit and what unit would be appropriate to be the collective bargaining agency6 . . . 6is novel in this !urisdiction3 however, /merican precedents on the matter abound . . $to which resort may be had% considering that our present @agna ?arta has been patterned after the /merican law on the sub!ect.6 Said the ?ourt0 . . . Fnder these precedents, there are various factors which must be satisfied and considered in determining the proper constituency of a bargaining unit. >o one particular factor is itself decisive of the determination. The weight accorded to any particular factor varies in accordance with the particular question or questions that may arise in a given case. What are these factors2 Rothenberg mentions a good number, but the most pertinent to our case are0 $+% will of the employees $Ilobe &octrine%3 $)% affinity and unit of employees1 interest, such as substantial similarity of wor and duties, or similarity of compensation and wor ing conditions3 $(% prior collective bargaining history3 and $<% employment status, such as temporary, seasonal probationary employees. . . . ... ... ... /n enlightening appraisal of the problem of defining an appropriate bargaining unit is given in the +Bth /nnual Report of the >ational Aabor Relations 8oard wherein it is emphasi-ed that the factors which said board may consider and weigh in fi.ing appropriate units are0 the history, e.tent and type of organi-ation of employees3 the history of their collective bargaining3 the history, e.tent and type of organi-ation of employees in other plants of the same employer, or other employers in the same industry3 the s ill, wages, wor , and wor ing conditions of the employees3 the desires of the employees3 the eligibility of the employees for membership in the union or unions involved3 and the relationship between the unit or units proposed and the employer1s organi-ation, management, and operation. . . . . . #n said report, it is li ewise emphasi-ed that the basic test in determining the appropriate bargaining unit is that a unit, to be appropriate, must affect a grouping of employees who have substantial, mutual interests in wages, hours, wor ing conditions and other sub!ects of collective bargaining $citing Smith on Aabor Aaws, (+C-(+'3 Francisco, Aabor Aaws, +C)%. . . .

The ?ourt further e.plained that 6$t%he test of the grouping is community or mutuality of interests. /nd this is so because 1the basic test of an asserted bargaining unit1s acceptability is whether or not it is fundamentally the combination which will best assure to all employees the e.ercise of their collective bargaining rights1 $Rothenberg on Aabor Relations, <:B%.6 Hence, in that case, the ?ourt upheld the trial court1s conclusion that two separate bargaining units should be formed, one consisting of regular and permanent employees and another consisting of casual laborers or stevedores. Since then, the Bcommunit5 or mutualit5 o$ interestsB test has provided the standard in determining the proper constituency of a collective bargaining unit. #n !lhambra Cigar ? Cigarette 7anu$acturing Com%an5, et al. vs. !lhambra 2m%lo5ees6 !ssociation (P!(L)), +B' "hil. )(, the ?ourt, noting that the employees in the administrative, sales and dispensary departments of a cigar and cigarette manufacturing firm perform wor which have nothing to do with production and maintenance, unli e those in the raw lead $malalasi%, cigar, cigarette, pac ing $precintera% and engineering and garage departments, authori-ed the formation of the former set of employees into a separate collective bargaining unit. The ruling in the Democratic Labor !ssociation case, su%ra, was reiterated inPhili%%ine Land !ir Sea Labor )nit vs. Court o$ 4ndustrial Relations, ++B "hil. +'C, where casual employees were barred from !oining the union of the permanent and regular employees. /pplying the same 6community or mutuality of interests6 test, but resulting in the formation of only one collective bargaining units is the case of National !ssociation o$ (ree &rade )nions vs. 7ainit Lumber Develo%ment Com%an5 <or@ers )nion )nited Lumber and 'eneral <or@ers o$ the Phils., I.R. >o. ':4)C, &ecember )+, +::B, +:) S?R/ 4:E. #n said case, the ?ourt ordered the formation of a single bargaining unit consisting of the Sawmill &ivision in 8utuan ?ity and the Aogging &ivision in Sapanta Galley, Kitcharao, /gusan >orte of the @ainit Aumber &evelopment ?ompany. The ?ourt reasoned0 ?ertainly, there is a mutuality of interest among the employees of the Sawmill &ivision and the Aogging &ivision. Their functions mesh with one another. =ne group needs the other in the same way that the company needs them both. There may be difference as to the nature of their individual assignments but the distinctions are not enough to warrant the formation of a separate bargaining unit. #n the case at bar, the Fniversity employees may, as already suggested, quite easily be categori-ed into two general classes0 one, the group composed of employees whose functions are non-academic, i.e., !anitors, messengers, typists, cler s, receptionists, carpenters, electricians, grounds- eepers, chauffeurs, mechanics, plumbers3 =2 and t"o, the group made up of those performing academic functions, i.e., full professors, associate professors, assistant professors, instructors L who may be !udges or government e.ecutives L and research, e.tension and professorial staff. == >ot much reflection is needed to perceive that the community or mutuality of interests which !ustifies the formation of a single collective bargaining unit is wanting between the academic and non-academic personnel of the university. #t would seem obvious that teachers would find very little in common with the Fniversity cler s and other non-academic employees as regards responsibilities and functions, wor ing conditions, compensation rates, social life and interests, s ills and intellectual pursuits, cultural activities, etc. =n the contrary, the dichotomy of interests, the dissimilarity in the nature of the wor and duties as well as in the compensation and wor ing conditions of the academic and non-academic personnel dictate the separation of these two categories of employees for purposes of collective bargaining. The formation of two separate bargaining units, the first consisting of the ran -and-file non-academic personnel, and the second, of the ran -and-file academic employees, is the set-up that will best assure to all the employees the e.ercise of their collective bargaining rights. These special circumstances, i.e., the dichotomy of interests and concerns as well as the dissimilarity in the nature and conditions of wor , wages and compensation between the academic and non-academic personnel, bring the case at bar within the e.ception contemplated in Section : of ;.ecutive =rder >o. +EB. #t was grave abuse of discretion on the part of the Aabor Relations &irector to have ruled otherwise, ignoring plain and patent realities. WH;R;F=R;, the assailed =rder of =ctober (B, +::B is hereby /FF#R@;& in so far as it declares the professors, associate professors and assistant professors of the Fniversity of the "hilippines as ran -and-file employees. The =rder of /ugust ', +::B is @=&#F#;& in the sense that the non-academic ran -and-file employees of the Fniversity of the "hilippines shall constitute a bargaining unit to the e.clusion of the academic employees of the institution Li.e., full professors, associate professors, assistant professors, instructors, and the research, e.tension and professorial staff, who may, if so minded, organi-e themselves into a separate collective bargaining unit3 and that, therefore, only said non-academic ran -and-file personnel of the Fniversity of the "hilippines in &iliman, @anila, Aos 8aUos and the Gisayas are to participate in the certification election. S= =R&;R;&. Padilla, Regalado and Nocon, JJ., concur. Paras, J., Retired. G.R. No. L62822= Au4u'+ =0, 1>B8

#ECHANICAL DE8ART#ENT LA$OR UNION SA 8HILI88INE NATIONAL RAIL;A5S, petitioner, vs. COURT OF INDUSTRIAL RELATIONS )n0 SA#AHAN NG #GA #ANGGAGA;A SA CALOOCAN SHO8S, respondents. Sisenando >illaluA $or %etitioner. 'regorio 2. (a=ardo $or res%ondent Samahan ng mga 7anggaga"a sa Caloocan Sho%s. RE5ES, J.$.L., J.: "etition by the 6@echanical &epartment Aabor Fnion sa ">R6 for a review of an order of the ?ourt of #ndustrial Relations, in its ?ase >o. +<'4-@?, directing the holding of a plebiscite election to determine whether the employees at the ?aloocan Shops desire the respondent union, 6Samahan ng mga @anggagawa sa ?aloocan Shops6, to be separated from the @echanical &epartment Aabor Fnion, with a view to the former being recogni-ed as a separate bargaining unit. The case began on +( February +:C4 by a petition of the respondent 6Samahan ng mga @anggagawa, etc.6 calling attention to the fact that there were three unions in the ?aloocan shops of the "hilippine >ational Railways0 the 6Samahan6, the 6Kapisanan ng @anggagawa sa @anila Railroad ?ompany6, and the @echanical &epartment Aabor Fnion3 that no certification election had been held in the last +) months in the ?aloocan shops3 that both the 6Samahan6 and the @echanical &epartment Aabor Fnion had submitted different labor demands upon the management for which reason a certification election was needed to determine the proper collective bargaining agency for the ?aloocan shop wor ers. The petition was opposed by the management as well as by the @echanical &epartment Aabor Fnion, the latter averring that it had been previously certified in two cases as sole and e.clusive bargaining agent of the employees and laborers of the ">R1S mechanical department, and had negotiated two bargaining agreements with management in +:C+ and +:C(3 that before the e.piration of the latter, a renewal thereof had been negotiated and the contract remained to be signed3 that the 6Samahan6 had been organi-ed only in )+ 9anuary +:C43 that the ?aloocan shops unit was not established nor separated from the @echanical &epartment unit3 that the 6Samahan6 is composed mainly of supervisors who had filed a pending case to be declared non-supervisors3 and that the purpose of the petition was to disturb the present smooth wor ing labor management relations. 8y an order of +E /ugust +:C', 9udge /rsenio @artine-, after receiving the evidence, made the following findings0. /+"%hC/.DEt The ?ourt, after a cursory e.amination of the evidence presented made the following findings0 That petitioner union is composed of wor ers e.clusively at the ?aloocan shops of the "hilippine >ational Railways charged with the maintenance of rolling stoc s for repairs3 ma!or repairs of locomotive, engines, etc. are done in the ?aloocan shops while minor ones in the @anila sheds3 wor ers in the ?aloocan shops do not leave their station unli e @anila shop wor ers who go out along the routes and lines for repairs3 wor ers both in the ?aloocan shops and @anila sheds are e.posed to ha-ards occasioned by the nature of their wor 3 that with respect to wages and salaries of employees, categories under the 9ob ?lassification and ;valuation "lan of the company apply to all wor ers both in the ?aloocan Shops and @anila sheds3 administration over employees, members of petitioner union as well as oppositor is under the /dministrative &ivision of the company3 that from the very nature of their wor , members of petitioner union and other wor ers of the @echanical &epartment have been under the coverage of the current collective bargaining agreement which was a result of a certification by this ?ourt of the @echanical &epartment Aabor union, first in +:CB and later in +:C(. Subsequently, when the latter contract e.pired, negotiations for its renewal were had and at the time of the filing of this petition was already consummated, the only act remaining to be done was to affi. the signatures of the parties thereto3 that during the pendency of this petition, on 9une +<, +:C4, the aforesaid collective bargaining agreement was signed between the "hilippine >ational Railways and the @echanical &epartment Aabor Fnion sa "hilippine >ational Railways $@anila Railroad ?ompany%. The main issue involved herein is0 Whether or not a new unit should be established, the ?aloocan shops, separate and distinct from the rest of the wor ers under the @echanical &epartment now represented by the @echanical &epartment Aabor Fnion. The ?aloocan Shops, all located at ?aloocan ?ity have (CB wor ers more or less. #t is part and parcel of the whole @echanical &epartment of the "hilippine >ational Railways. The department is composed of four main divisions or units, namely0 =perations, @anila /rea and Aines3 Aocomotive ?rew3 @otor ?ar ?rew3 and the Shops Rolling Stoc s @aintenance. $;.hibits 6&6 and 6&-+6%. The Aocomotive crew and @otor ?ar ?rew, though part of the @echanical &epartment, is a separate unit, and is represented by the Fnion de @aquinistas, Fogoneros J @otormen. The wor ers under the other two main units of the departments are represented by the @echanical &epartment Aabor Fnion. The wor ers of the Shops Rolling Stoc s @aintenance &ivision or the ?aloocan Shops now see to be separated from the rest of the wor ers of the department and to be represented by the 6Samahan >g @ga @anggagawa sa ?aloocan Shops.6 .

There is certainly a community of interest among the wor ers of the ?aloocan Shops. They are grouped in one place. They wor under one or same wor ing condition, same wor ing time or schedule and are e.posed to same occupational ris . Though evidence on record shows that wor ers at the ?aloocan Shops perform the same nature of wor as their counterparts in the @anila Shed, the difference lies in the fact that wor ers at the ?aloocan Shops perform ma!or repairs of locomotives, rolling stoc s, engines, etc., while those in the @anila Shed, wor s on minor repairs. Heavy equipment and machineries are found in the ?aloocan Shops. The trial !udge then reviewed the collective bargaining history of the "hilippine >ational Railways, as follows0 /+"%hC/.DEt =n several similar instances, this ?ourt allowed the establishment of new and separate bargaining unit in one company, even in one department of the same company, despite the e.istence of the same facts and circumstances as obtaining in the case at bar. The history of the collective bargaining in the @anila Railroad ?ompany, now the "hilippine >ational Railways shows that originally, there was only one bargaining unit in the company, represented by the Kapisanan >g @anggagawa sa @RR. Fnder ?ase >o. )('-@?, this ?ourt ordered the establishment of two additional units, the engine crew and the train crew to be represented by the Fnion de @aquinistas, Fogoneros, /yudante J @otormen and Fnion de ;mpleados de Trenes, respectively. Then in +:C+, under ?ases >os. <:+-@?, <:<-@? and 4B'-@? three new separate units were established, namely, the yard crew unit, station employees unit and engineering department employees unit, respectively, after the employees concerned voted in a plebiscite conducted by the court for the separation from e.isting bargaining units in the company. Then again, under ?ase >o. 'C(-@?, a new unit, composed of the @echanical &epartment employees, was established to be represented by the @echanical &epartment Aabor Fnion. #ncidentally, the first attempt of the employees of the @echanical &epartment to be separated as a unit was dismissed by this ?ourt of ?ase >o. <EE-@?. #n the case of the yard crew, station employees and the ;ngineering &epartment employees, the Supreme ?ourt sustained the order of this ?ourt in giving the employees concerned the right to vote and decide whether or not they desire to be separate units $See I.R. >os. A-+C):)-:<, A-+C(B: and A-+C(+'-+E, >ovember, +:C4%. #n view of its findings and the history of 6union representation6 in the railway company, indicating that bargaining units had been formed through separation of new units from e.isting ones whenever plebiscites had shown the wor ers1 desire to have their own representatives, and relying on the 6Ilobe doctrine6 $Ilobe @achine M Stamping ?o., ( >AR8 ):<% applied in &emocratic Aabor Fnion vs. ?ebu Stevedoring ?o., A-+B()+, )E February +:4E, 9udge @artine- held that the employees in the ?aloocan Shops should be given a chance to vote on whether their group should be separated from that represented by the @echanical &epartment Aabor Fnion, and ordered a plebiscite held for the purpose. The ruling was sustained by the ?ourt en bancF wherefore, the @echanical &epartment Aabor Fnion appealed to this ?ourt questioning the applicability under the circumstances of the 6Ilobe doctrine6 of considering the will of the employees in determining what union should represent them. Technically, this appeal is premature, since the result of the ordered plebiscite among the wor ers of the ?aloocan shops may be adverse to the formation of a separate unit, in which event, as stated in the appealed order, all questions raised in this case would be rendered moot and academic. /pparently, however, the appellant @echanical &epartment Aabor Fnion ta es it for granted that the plebiscite would favor separation. We find no grave abuse of discretion in the issuance of the ruling under appeal as would !ustify our interfering with it. Republic /ct >o. E'4 has primarily entrusted the prosecution of its policies to the ?ourt of #ndustrial Relations, and, in view of its intimate nowledge concerning the facts and circumstances surrounding the cases brought before it, this ?ourt has repeatedly upheld the e.ercise of discretion of the ?ourt of #ndustrial Relations in matters concerning the representation of employee groups $@anila "aper @ills ;mployees M Wor ers1 /ssociation vs. ?.#.R. +B< "hil. +B3 8enguet ?onsolidated vs. 8obo Aumber 9ac /ssociation, +B( "hil. ++4B%. /ppellant contends that the application of the 6Ilobe doctrine6 is not warranted because the wor ers of the ?aloocan shops do not require different s ills from the rest of the wor ers in the @echanical &epartment of the Railway ?ompany. This question is primarily one of facts. The #ndustrial ?ourt has found that there is a basic difference, in that those in the ?aloocan shops not only have a community of interest and wor ing conditions but perform ma!or repairs of railway rolling stoc , using heavy equipment and machineries found in said shops, while the others only perform minor repairs. #t is easy to understand, therefore, that the wor ers in the ?aloocan shops require special s ill in the use of heavy equipment and machinery sufficient to set them apart from the rest of the wor ers. #n addition, the record shows that the collective bargaining agreements negotiated by the appellant union have been in e.istence for more than two $)% years3 hence, such agreements can not constitute a bar to the determination, by proper elections, of a new bargaining representative $"A&T ;mployees1 Fnion vs. "hilippine Aong &istance Telephone ?o., 4+ =ff. Ia-., <4+:%.

/s to the charge that some of the members of the appellee, 6Samahan >g @anggagawa6, are actually supervisors, it appears that the question of the status of such members is still pending final decision3 hence, it would not constitute a legal obstacle to the holding of the plebiscite. /t any rate, the appellant may later question whether the votes of those ultimately declared to be supervisors should be counted. Whether or not the agreement negotiated by the appellant union with the employer, during the pendency of the original petition in the ?ourt of #ndustrial Relations, should be considered valid and binding on the wor ers of the ?aloocan shops is a question that should be first passed upon by the #ndustrial ?ourt. #> G#;W =F TH; F=R;I=#>I, the order appealed from is affirmed, with costs against appellant @echanical &epartment Aabor Fnion sa "hilippine >ational Railways. Conce%cion, C.J., DiAon, 7a@alintal, Galdivar, SancheA, Castro, !ngeles and (ernando, JJ., concur. /+"%hC/.DEt N!&4#N!L !SS#C4!&4#N #( (R22 &R!D2 )N4#NS (N!(&)), P2&4&4#N2R, >S. 7!4N4& L)792R D2>2L#P72N& C#7P!NY <#RH2RS )N4#N )N4&2D L)792R !ND '2N2R!L <#RH2RS #( &82 P84L4PP4N2S (7!LD2C#<) )L'<P), R2SP#ND2N&S. D2C4S4#N 8ARAS, J.9 This is a petition for certiorari to annul and set aside the resolutionV of the public respondent 8ureau of Aabor Relations dated 9anuary ):, +:E' in 8AR ?ase >o. /-4-::-E4 entitled0 #> R;0 "etition for &irect ?ertification or ?ertification ;lection, @ainit Aumber &evelopment ?ompany Wor ers Fnion-Fnited Aumber and Ieneral Wor ers of the "hilippines $@/A&;?=WF-FAIW"%, petitionerappellee vs. @ainit Aumber and &evelopment ?ompany, #nc. $@/A&;?=%, respondent3 >ational /ssociation of Free Trade Fnions $>/FTF%, compulsory intervenor-appellant, affirming the =rder of the @ed /rbiter dated September )<, +:EC and denying petitioner1s motion for reconsideration. The facts are as follows0 =n 9anuary )E, +:E4, private respondent @ainit Aumber &evelopment ?ompany Wor ers Fnion-Fnited Aumber and Ieneral Wor ers of the "hilippines, @/A&;?=WF-FAIW" $FAIW", for short%, a legitimate labor organi-ation duly registered with the @inistry of Aabor and ;mployment under Registry >o. ):<<-#", filed with Regional =ffice >o. +B, @inistry of Aabor and ;mployment at ?agayan de =ro ?ity, a petition for certification election to determine the sole and e.clusive collective bargaining representative among the ran and file wor ers7employees of @ainit Aumber &evelopment ?ompany #nc. $@/A&;?=%, a duly organi-ed, registered and e.isting corporation engaged in the business of logging and saw-mill operations employing appro.imately +(C ran and file employees7wor ers $Rollo, p. ++3 "etition3 /nne. 6/6%. The case was scheduled for hearing two $)% times. &uring the first scheduled hearing on February )B, +:E4, the counsel for compulsory intervenor $now petitioner%, >ational /ssociation of Free Trade Fnion $>/FTF% requested for postponement on the ground that he was leaving for abroad. &uring the scheduled hearing of @arch +(, +:E4, they, however, agreed to submit simultaneously their respective position papers within twenty $)B% days $Rollo, p. +'3 "etition3 /nne. 6&6%. "etitioner FAIW", private respondent herein, in its petition and position paper alleged, among others0 $+% that there was no certification election conducted within +) months prior to the filing of the petition3 $)% that the petition was filed within the CB day freedom period, i.e., ?8/ e.pired on February )E, +:E43 $(% that the petition is supported by the signatures of +B+ ran and file employees out of a total of )B+ employees of the employer or more than thirty percent $(B5% than that required by law $Rollo, p. +(3 "etition3 /nne. 686%. =n /pril ++, +:E4, the @ed-/rbiter granted the petition for certification election. =n /pril )C, +:E4, >/FTF appealed the decision of the @ed-/rbiter on the ground that @/A&;?= was composed of two $)% bargaining units, the Sawmill &ivision and the Aogging &ivision, but both the petition and decision treated these separate and distinct units only as one $Rollo, p. )B3 "etition3 /nne. 6;6%. =n /pril )E, +:EC, the 8ureau of Aabor Relations affirmed the decision $Rollo, p. )C3 "etition3 /nne. 696%. Thus, a certification election was held on separate dates at the employer1s sawmill division and logging area respectively. #n said election @/A&;?=WF-FAIW" garnered a total vote of +<C while >/FTF garnered a total of ) votes $Rollo, p. <)3 "etition3 /nne. 6B6%. =n 9uly )C, +:EC, >/FTF filed an election protest alleging massive vote buying accompanied with grave and serious threat, force and intimidation on the lives of )4 applicants as stated in a 9oint /ffidavit attached thereto $Rollo, p. )E3 "etition3 /nne.es 6K6, 6K-(6%. @/A&;?= filed its @anifestation on /ugust (, +:EC, which corroborated petitioner1s stand. /ttached to the said @anifestation was a !oint affidavit e.ecuted by thirty five $(4% of its employees7wor ers $Rollo, p. ((3 "etition3 /nne.es 6A6, 6A-+6%.

=n September (, +:EC, private respondent filed its position paper $Rollo, p. (C3 "etition3 /nne. 6@6%. =nSeptember E, +:EC, petitioner filed its opposition to private respondent1s position paper $Rollo, p. (:3 "etition3 /nne. 6>6%. =n September )<, +:EC, the @ed-/rbiter dismissed the election protest $Rollo, p. <)3 "etition3 /nne. 6=6%. =n =ctober +B, +:EC, petitioner >/FTF appealed the order of the @ed-/rbiter to the 8ureau of Aabor Relations in @anila $Rollo, p. <C% which denied the appeal $Rollo, p. <E% and the two motions for reconsideration $Rollo, pp. 4+, 44%. Hence, this petition. The issues raised in this petition are0 # WH;TH;R =R >=T #T W/S R#IHT F=R TH; @;&-/R8#T;R T= ?H/>I; TH; ;@"A=J;R FR=@ TW= S;"/R/T; 8/RI/#>#>I F>#TS T= =>AJ =>;. ## WH;TH;R =R >=T TH;R; W/S @/SS#G; G=T; 8FJ#>I />& S;R#=FS THR;/T T= A#F; T= 9FST#FJ #>G/A#&/T#>I TH; R;SFAT =F TH; ;A;?T#=>. ### WH;TH;R =R >=T /> ;A;?T#=> "R=T;ST #> / ?;RT#F#?/T#=> ;A;?T#=> ?/> 8; I#G;> &F; ?=FRS; ;G;> #F >=T ;>T;R;& #> TH; @#>FT;S =F TH; ;A;?T#=>. #n the case at bar, petitioner alleges that the employer @/A&;?= was composed of two bargaining units, the Sawmill &ivision in 8utuan ?ity and the Aogging &ivision, in Sapanta Galley, Kitcharao, /gusan >orte, about EB ilometers distant from each other and in fact, had then two separate ?8/1s, one for the Sawmill &ivision and another for the Aogging &ivision, both the petition and decision referred only to one bargaining unit3 that from +:': to +:E4, the @inistry of Aabor and ;mployment recogni-ed the e.istence of two $)% separate bargaining units at @/A&;?=, one for its Aogging &ivision and another for its Sawmill &ivision. Significantly, out of two hundred and one $)B+% employees of @/A&;?=, one hundred seventy five $+'4% consented and supported the petition for certification election, thereby confirming their desire for one bargaining representative $Rollo, p. +B<%. @oreover, while the e.istence of bargaining history is a factor that may be rec oned with in determining the appropriate bargaining unit, the same is not decisive or conclusive. =ther factors must be considered. The test of grouping is community or mutuality of interests. This is so because 6the basic test of an asserted bargaining unit1s acceptability is whether or not it is fundamentally the combination which will best assure to all employees the e.ercise of their collective bargaining rights.6 $&emocratic Aabor /ssociation v. ?ebu Stevedoring ?ompany, #nc., et al., +B( "hil. ++B( *+:4E,. ?ertainly, there is a mutuality of interest among the employees of the Sawmill &ivision and the Aogging &ivision. Their functions mesh with one another. =ne group needs the other in the same way that the company needs them both. There may be difference as to the nature of their individual assignments but the distinctions are not enough to warrant the formation of a separate bargaining unit. Secondly, the issue had been raised earlier by petitioner. The respondent 8ureau of Aabor Relations had already ruled on the same in its decision dated /pril )E, +:EC affirming the @ed-/rbiter1s =rder dated /pril ++, +:E4 which granted the petition for ?ertification ;lection. >/FTF did not elevate the /pril )E, +:EC decision to this ?ourt. =n the contrary, it participated in the questioned election and later it did not raise the issue in its election protest $Rollo, p. )+B%. Hence, the principle of res !udicata applies. #t was settled as early as +:4C that Othe rule which forbids the reopening of a matter once !udicially determined by competent authority applies as well to the !udicial and quasi-!udicial acts of public, e.ecutive or administrative officers and boards acting within their !urisdiction as to the !udgments of courts having general !udicial powers . . . $8.F. Ioodrich "hilippines, #nc. v. Wor men1s ?ompensation ?ommission and Aeandro @. ?astro, +4: S?R/ (44 *+:EE,%. With regards to the second and third issues raised by petitioner, the public respondent 8ureau of Aabor Relations in its order dated September )<, +:EC found the following, to wit0 6/fter a careful perusal of the records of this case and after considering, adducing and weighing all the pleadings, arguments, etc. and the circumstances attendant to the instant case, this =ffice is of the opinion that the grounds relied upon by the protestant >/FTF in its protest

are bereft of any merit, hence, this =ffice finds no cogent reason to order the invalidation or annulment of the certification election under protest or the holding of a run-off election thereat between no union and the protestee, @/A&;?=WF-FAIW". #ndeed, the minutes of said certification elections conducted both at the sawmill and logging departments on /ugust +4 and )+, +:EC respectively, of the respondent7employer showed that there was no protest on massive vote buying accompanied with grave and serious threats, force and intimidation raised by any of the parties who were ably represented in said elections. "aragraph ), Section :, Rule C of the Rules and Regulations implementing the Aabor ?ode of the "hilippines $now Section (, Rule G#, 8oo 4 of the =mnibus Rules #mplementing the Aabor ?ode% provides that protests not so raised and contained in the minutes of the proceedings are deemed waived. /llegations of vote buying, grave and serious threats, force and intimidation are questions of fact which should be contained in the minutes of said proceedings. There is no clear and convincing proof presented by the protestant in support of its contention, hence, we have no other alternative than to uphold the election results.6 #n the case of "hilippine /irlines ;mployeesQ /ssociation $"/A;/% v. Hon. "ura Ferrer-?alle!a, et al., +C) S?R/ <)4 *+:EE,%, this ?ourt held that factual findings of the 8ureau of Aabor Relations which are supported by substantial evidence are binding on this ?ourt and must be respected. 8RE#ISES CONSIDERED, the resolution of public respondent 8ureau of Aabor Relations dated 9anuary ):, +:E'is hereby /FF#R@;&. SO ORDERED. 7elencio 8errera, (Chairman), Padilla, Sarmiento, and Regalado, JJ., concur. P84L4PP4N2 L!ND !4R S2! L!9#R )N4#N (PL!SL)), P2&4&4#N2R >S. C#)R& #( 4ND)S&R4!L R2L!&4#NS, 2& !L., R2SP#ND2N&S. D2C4S4#N GUTIERREA DA?ID, J.9 This is a petition to review on certiorari an order of the ?ourt of #ndustrial Relations in ?ase >o. (E @?-?ebu certifying the /llied Wor ers1 /ssociation of the "hilippines, San ?arlos ?hapter, as the sole collective bargaining representative of the employees of the San ?arlos @illing ?o., #nc. The record shows that in said ?ase >o. (E @?-?ebu the #ndustrial ?ourt on @ay )4, +:4C ordered the holding of a certification election to determine which of the two contending labor unions therein, herein petitioner "hilippine Aand-/ir-Sea Aabor Fnion $"A/SAF% or respondent /llied Wor ers1 /ssociation of the "hilippines $/W/%, shall be the sole collective bargaining agent of the employees of the San ?arlos @illing ?o. The pertinent portions of the court1s order read as follows0 6?onsidering the history of bargaining relations in this case where there has only beeta one bargaining unit, and for purposes of effectuating the policies of the /ct, the same should be maintained. #n other words, the a%%ro%riate bargaining unit is the 2m%lo5er unit com%osed o$ I;J em%lo5ees including some J;; %iece "or@ (%a@iao) "or@ers and stevedores a%%earing in the 2m%lo5er6s %a5rolls during the milling and o$$ season minus the alleged laborers and operators of farm tractors who are hired and paid by the sugarcane planters. $#talics supplied.% 6/ll the foregoing considered, the ?ourt hereby directs the &epartment of Aabor to conduct a certification election in the premises of the San ?arlos @illing ?ompany, Atd. at San ?arlos, >egros =ccidental for the purpose of determining, under e.isting rules and regulations on the matter, which of the two $)% contending labor unions herein, the "A/SAF or the /W/ shall be the sole collective bargaining agent in accordance with the provisions of the /ct. The ;mployer is hereby ordered to submit a list o$ em%lo5ees a%%earing in its %a5roll during milling season $or the 5ear /KLL to the De%artment o$ Labor "hich, together "ith the 623hibit M Court6 no" %art o$ the records o$ this case shall be used as the list o$ eligible voters minus employees who are performing functions of supervisors and security guards who are e.cluded from participating in said election. $#talics supplied.% 6S= =R&;R;&.6 "rior to the holding of the election, respondent /W/ filed an urgent motion to e.clude +<< employees from participating in the election. The motion, however, was denied, the #ndustrial ?ourt holding that the wor ers sought to be e.cluded were eligible to vote since they were actual employees of good standing of the respondent company during the milling season of +:44 and were included in the company1s payroll as of that date.

=n September )+, +:4C, the certification election was held in the premises of the San ?arlos @illing ?o., "A/SAF receiving EE votes while /W/ garnered +<:, with (:B ballets recorded as challenged, )<) of them by the petitioner "A/SAF and ,+<E by the respondent awa. Within ') ahours after the closing of the election, as required by the Rules for ?ertification ;lection, awa filed with the #ndustrial ?ourt a petition contesting the election on the ground of the ineligibility of the voters who cast the +<E ballots it challenged. Said respondent awa also alleged that the )<) ballots challenged by "A/SAF were cast by legitimate employees of the company, as they were the votes of 6piece wor $pa iao% wor ers and stevedores appearing in the employer1s payroll during the milling and off-season6 of +:44. "A/SAF, on the other hand, in an urgent motion filed on =ctober <, +:4C, questioned the validity of the )<) ballots cast by the stevedores and piece wor ers. The motion was opposed by awa on the ground that as a protest of the election it was filed late. The #ndustrial ?ourt, however, considered the same as an answer to awa1s petition, and on September <, +:4', after hearing the arguments of the parties, ordered that all the (:B challenged ballots be opened and canvassed and the corresponding votes added to those already credited to the contending labor unions. "A/SAF moved for reconsideration of the order but the motion was denied and pursuant to said order the challenged ballots were opened. /fter the canvass, +<E votes challenged by awa were counted in favor of "A/SAF. =f the )<) votes challenged by "A/SAF, ( were counted in its favor, ))E credited in favor of awa, and ++ declared either for no union or spoiled ballots. /dding the votes to the results of the certification election, the final count showed that respondent /W/ garnered a total of ('' votes as against )(: for "A/SAF. /ccordingly, said respondent was certified by the #ndustrial ?ourt in its order dated @arch +), +:4E as the sole collective bargaining agent of the employees of the San ?arlos @illing ?o. /s its motion for reconsideration of the order was denied by the court en bancLwith 9udge Feliciano Tabigne dissentingLthe petitioner "A/SAF filed the present petition for review, contending that the #ndustrial ?ourt erred in not e.cluding the )<) votes challenged by it from the total number of votes credited to respondent /W/. We find petitioner1s contention to be meritorious. #n the order of @ay )4, +:4C authori-ing the certification election, the trial !udge of the #ndustrial ?ourt directed that the 6list of employees appearing in its payroll during milling season for the year +:44 V V V together with the ;.hibit 1N-?ourt1 now part of the records of this case shall be used as the list of eligible voters minus employees who are performing functions of supervisors, and security guards who are e.cluded from participating in said election.6 #t being undisputed that the challenged votes were cast by casual employees consisting of stevedores and piece wor ers whoLas stated by 9udge Tabigne in his dissentL 6were not included in the list of employees appearing in the payroll of the company during the milling season for the year +:44 nor did they appear in the ;.hibit 1N-?ourt1 which formed portion of the list of personnel allowed to vote in said certification election6, the said challenged votes should have been e.cluded. ?iting the declaration of the #ndustrial ?ourt that the appropriate bargaining unit is the employer1s unit composed of CB) employees, including the piece wor ers and stevedores whose votes were challenged by "A/SAF, the respondent /W/ argues that the challenged votes were cast by employees eligible to vote. #t will be noted, however, that these employees whose votes were challenged were hired on temporary or casual basis and had wor of a different nature from those of the laborers permitted to vote in the certification election. #n the case of &emocratic Aabor Fnion vs. ?ebu Stevedoring ?o., #nc., et al. $I.R. >o. A-+B()+, February )E, +:4E% this ?ourt had occasion to rule that in the determination of the proper constituency of a collective bargaining unit, certain factors must be considered, among them, the employment status of the employees to be affected, that is to say, the positions and categories of wor to which they belong, and the unity of employees1 interest such as substantial similarity of wor and duties. The most efficacious bargaining unit is one which is comprised of constituents en!oying a community or mutuality of interest. /nd this is so because the basic test of a bargaining unit1s acceptability is whether it will best assure to all employees the e.ercise of their collective bargaining rights. $ See also /lhambra ?igar M ?igarette @anufacturing ?o. vs. /lhambra ;mployees1 /ssociation, +B' "hil., )(.% #t appearing that the )<) stevedores and piece wor ers, whose votes have been challenged, were employed on a casual or day to day basis and have no reasonable basis for continued or renewed employment for any appreciable substantial timeLnot to mention the nature of wor they performLthey cannot be considered to have such mutuality of interest as to !ustify their inclusion in a bargaining unit composed of permanent or regular employees. There is nothing to the contention that the order complained of is merely complementary to the order of the #ndustrial ?ourt dated September <, +:4', which has become final and e.ecutory the same not having been appealed. #t will be observed that the said order of September <, +:4' merely ordered the opening and canvassing of the challenged ballots. /ny appeal ta en from said order would therefore have been premature. &isregarding the votes cast by the stevedores and piece wor ers which were counted in favor of the respondent /W/, the final results of the certification election show that the petitioner "A/SAF garnered a ma!ority of the votes cast by eligible voters. ?onsequently, said petitioner should be certified as the sole collective bargaining representative of the employees of the San ?arlos @illing ?o.

Wherefore, the order complained of is reversed and the petitioner "A/SAF is hereby certified as the collective bargaining agent of the employees of the San ?arlos @illing ?ompany. Without costs. Paras, C.J., 9engAon, 9autista !ngelo, Labrador, Conce%cion, Re5es, J.9.L., 9arrera, Paredes , and DiAon, JJ., concur. #rder reversed.

G.R. No. L6444>= @ L6444>4 De(e1/e- =, 1>80 DIATAGON LA$OR FEDERATION LOCAL 110 OF THE ULG;8, petitioner, vs. HON. $LAS F. O8LE, Se(-e+)-, o. L)/o-, CAR#ELO C. NORIEL, D%-e(+o- o. L)/o- Re2)+%on', #INDANAO ASSOCIATION OF TRADE UNIONS #ATU! LIANGA $A5 LOGGING CO., INC. )n0 GEORGIA 8ACIFIC INTERNATIONAL COR8ORATION, respondents.

A"UINO, J.: The issue in this case, which involves a +:'4 certification election, is whether two companies should be regarded as a single collective bargaining unit. The factual bac ground is as follows0 +. Aianga 8ay Aogging ?o., #nc. is a domestic corporation which was organi-ed in +:4<. #t has offices in &iatagon Aianga, Surigao del Sur and Filipinas Aife 8ldg., /yala /venue, @a ati, @etro @anila. #t is engaged in logging and manufacturing plywood $p. +:4, Rollo%. ). Ieorgia "acific #nternational ?orporation is a &elaware corporation licensed to do business in the "hilippines on @arch (+, +:C'. #t has an office at Aianga. #t employs around <BB wor ers $pp. +B', ++<-+)(, +E4-C, Rollo%. (. The &iatagon Aabor Federation Aocal ++B of FAIW" $Fnited Aumber and Ieneral Wor ers of the "hilippines% had a collective bargaining agreement with the Aianga 8ay logging ?o., #nc. which was due to e.pire on @arch (+, +:'4. =n February (, +:'4, or before the e.piration of that ?8/, a rival union, the @indanao /ssociation of Trade Fnions, filed with the 8ureau of Aabor Relations a petition for the holding of a certification election at Aianga 8ay Aogging ?o., #nc., 8AR ?ase >o. B(::. The union assumed that Aianga 8ay Aogging ?o., #nc. had appro.imately :BB employees $pp. (+-(), Rollo%. <. 8efore that petition could be acted upon, the &iatagon Aabor Federation was able to negotiate on @arch +', +:'4 with Ieorgia "acific #nternational ?orporation a ?8/ for a term of three years e.piring on 7arch N/, /KOP $p. (44, Rollo%. That ?8/ was certified by the 8ureau of Aabor Relations on 9uly +B, +:'4 $p. +)<, Rollo%. 4. /t this !uncture, it should be stressed that the said ?8/ included JNI em%lo5ees wor ing at the veneer plant and electrical department of Ieorgia "acific #nternational ?orporation in Aianga. Those )(C employees were formerly employees of Aianga 8ay Aogging ?o., #nc. /fter Jul5, /KOQ, they were trans$erred to Ieorgia "acific #nternational ?orporation and became employees of the latter $p. +(+, Rollo%. C. That transfer is not clearly brought out in the pleadings of the parties. The obscuration of that fact is one reason for the delay in the disposition of this case because if the consequences of that transfer are not ta en into account, the case remains unclear and controversial. 8y reason of that transfer, the employees of Aianga 8ay Aogging ?o., lnc. were reduced to C4( $p. E', Rollo%. Ieorgia "acific #nternational ?orporation has around <BB employees. The &iatagon Aabor Federation claims to have ()E members among the employees of Ieorgia "acific #nternational ?orporation $pp. ++<-+)(, Rollo%. '. /nother fact that should be underscored is that, in spite of the transfer, the )(C employees continued to use in +:'4 the pay envelopes and #dentification cards of their former employer, Aianga 8ay Aogging ?o., #nc. That confusing circumstance spawned the controversy in this case because the @indanao /ssociation of Trade Fnions and the &irector of Aabor Relations used that circumstance to support their conclusion that the )(C employees should still be regarded as employees of Aianga 8ay Aogging ?o., #nc. and not of Ieorgia "acific #nternational ?orporation or that the two companies should be regarded as only one bargaining unit. E. #t is the contention of the @indanao /ssociation of Trade Fnions that the said ?8/ was negotiated between Ieorgia "acific #nternational ?orporation and the &iatagon Aabor Federation in order to frustrate the petition for certification election at Aianga 8ay Aogging ?o., #nc. which, as above stated, was filed by the @indanao /ssociation of Trade Fnions on February (,+:'4 $p. )<E, Rollo%.

:. "ursuant to the order of the @ed-/rbiter dated @ay +<, +:'4 in 8AR ?ase >o. B(::, a certification election was held in the premises of Aianga 8ay Aogging ?o., #nc. at &iatagon on 9uly )B, +:'4. The &iatagon Aabor Federation won the election with ):B votes as against ))' votes for the @indanao /ssociation of Trade Fnions $p. C4, Rollo%. The @indanao /ssociation of Trade Fnions wanted the aforementioned )(C employees of Ieorgia "acific #nternational ?orporation to ta e part in the election because they were using the pay envelopes and #dentification cards of Aianga 8ay Aogging ?o., #nc. but they were not allowed to vote because they were not included in the payrolls of Aianga Aogging ?o., #nc. $p. '), Rollo%. +B. The @indanao /ssociation of Trade Fnions filed an election protest dated 9uly )(, +:'4 on the ground, inter alia, that around four hundred wor ers were disenfranchised because of the inaccuracy of the official voting lists $p. '<, Rollo% . ++. 8ecause the @indanao /ssociation of Trade Fnions was confronted by the undeniable fact that the said )(C employees were already included in the ?8/ entered into between Ieorgia "acific international ?orporation and &iatagon Aabor Federation on 7arch /O, /KOL, the, @indanao /ssociation of Trade Fnions resorted to the e.pedient of filing on /ugust +, +:'4 with the 8ureau of Aabor Relations a petition for the decerti$ication of the aforementioned ?8/ $8AR ?ase >o. B:E+3 pp. +(4-(', Rollo%. That petition was dismissed by the @ed-/rbiter in his order of February <, +:'C on The ground that it was a reiteration of the election protest of the same union in 8#R ?ase >o. B(:: $p. +<4, Rollo%. +). #n the meantime, or on September E, +:'4, the @ed-/rbiter dismissed the election protest of the @indanao /ssociation of Trade Fnions and certified the &iatagon Aabor Federation as the e.clusive bargaining agent of the employees of Aianga 8ay Aogging ?o., #nc. $p. E:, Rollo%. +(. From that order, the @indanao /ssociation of Trade Fnions appealed on September +4, +:'4 to the &irector of Aabor Relations. #ts appeal was based on the fact that the oft-mentioned )(C employees were not allowed to vote at the certification election since the @ed/rbiter regarded them as employees of Ieorgia "acific #nternational ?orporation, having been included in its payrolls, although they still used the pay enveloped and #dentification cards of Aianga 8ay Aogging ?o., #nc. $pp. :+-+B+, Rollo%. +<. The @indanao /ssociation of Trade Fnions adopted another remedy in its unrelenting effort to attain its ob!ective of becoming the collective bargaining agent of the wor ers of the two companies alleged to have a common management and represented by the said lawyers. #t filed with the 8ureau of Aabor Relations on =ctober +B, +:'4 a petition for a certification election in Ieorgia "acific #nternational ?orporation $its prior petition was for the decerti$ication of the listing ?8/%. #t alleged that there had not been any certification election in that corporation $8AR ?ase >o. )B((3 pp. +B'-+BE, Rollo%. +4. That petition was dismissed by the @ed-/rbiter in his order of &ecember )), +:'4 but, upon appeal, the &irector of Aabor Relations called the attention of the parties to his order in 8AR ?ase >o. B(:: $p. +CC, Rollo%. #n that petition, the @indanao /ssociation of Trade Fnions assumed that the )(C employees were employees of Ieorgia "acific #nternational ?orporation. +C, /bout three wee s later, or on =ctober ):, +:+4, the @indanao /ssociation of Trade Fnions scored a notable victory The &irector of Aabor Relations issued on that date in 8AR ?ase >o. B(:: an order reversing the order of the @ed-/rbiter and sustaining the appeal of the @indanao /ssociation of Trade Fnions. The &irector held that the aforementioned )(C employees should be allowed to vote in the certification election at Aianga 8ay Aogging ?o., #nc. because they used the company1s pay envelopes and #dentification cards. The &irector ignored the fact that those )(C employees were included in the payrolls of Ieorgia "acific #nternational ?orporation and were already covered by the e.isting ?8/. The &irector ordered the holding of a new certification election at Aianga 8ay Aogging ?o., #nc. wherein the )(C employees would be allowed to vote $pp. +)'-:, Rollo%. +'. The &iatagon Aabor Federation filed a motion for the reconsideration of that order $p. +(B, Rollo%. Aianga 8ay Aogging ?o., #nc. filed a manifestation dated >ovember +', +:'4 categorically alleging that the )(C wor ers were not its employees but employees of Ieorgia "acific #nternational ?orporation $pp. +++-+(, Rollo%. +E. The &irector denied the motion in his order of &ecember +', +:'4, wherein it was intimated that the 8ureau1s Aabor =rgani-ation &ivision would thresh out, at the pre-election conference whether the said )(C employees should be allowed to ta e part in the election $pp +<C-', Rollo% +:. The &iatagon labor federation appealed to the Secretary of Aabor but he refused to rule on the appeal and, instead, referred it to the &irector of Aabor relations. The &irector in his order of @arch +4, +:'C dismissed the appeal. He ruled that Aianga 8ay Aogging ?o., #nc. and Ieorgia "acific #nternational ?orporation have a common interest and that the )(C employees should be regarded as employees of Aianga 8ay Aogging ?o., #nc. The &irector held that the transfer of the )(C employees to Ieorgia "acific #nternational ?orporation was designed to pre!udice the @indanao /ssociation of Trade Fnions and to favor &iatagon Aabor Federation, and that such an eventuality should not be tolerated $pp. +4(-+4', Rollo%.

)B. /gain, the &iatagon Aabor Federation appealed to the Secretary of Aabor from the &irector1s order of @arch +4, +:'C and again the Secretary referred the appeal to the &irector who, treating the appeal as another motion for reconsideration, denied it in his resolution of /pril ):, +:'C in 8AR ?ase >o. B(:: $p. +C<, Rollo%. )+. The &iatagon Aabor Federation moved for the clarification of the resolution of /pril )', +:'C in 8AR ?ase >o. )B(( wherein the &irector impliedly allowed one certification election for the employees of the two companies. #t wanted to now whether there should be two bargaining units and whether the )(C employees should be allowed to vote twice. Ieorgia "acific #nternational ?orporation filed its own motion for reconsideration $pp. +C'-+'(, Rollo%. )). The &irector in his order of @ay ):, +:'C in 8AR ?ases >os. B(:: and )B(( $a consolidation of the two certification cases% ruled that the two companies should be treated as one bargaining unit because they have a common interest and that the )(C employees should be allowed to vote $pp. +'<-C, Rollo%. )(. From the order of @ay ):, +:'C, the &iatagon Aabor Federation appealed to the Secretary of Aabor but the appeal was referred to the &irector of Aabor Relations to be regarded as a motion for reconsideration $p. )+:, Rollo%. /s was to be e.pected, the &irector denied the appeal or motion for reconsideration in his order of /ugust +E, +:'C. He held that there e3isted no distinction bet"een the em%lo5ees o$ the t"o com%anies and. conseRuentl5, the5 should belong to onl5 one bargaining unit $p. ))+, Rollo%. )<. =n September :, +:'C, the &iatagon Aabor Federation filed this certiorari case wherein it prayed for the annulment of the aforementioned orders of the &irector of Aabor Relations. The two companies were impleaded as respondents. They adopted the stand of the petitioner. =n September +C, +:'C, this ?ourt issued a restraining order to en!oin the holding of a new certification election. )4. 8ut before ?hat restraining order was issued, or on September +), +:'C, a Sunday, a certification election was held among the employees of the two companies. The &iatagon Aabor Federation opposed the holding of the election. There were KQQ eligible voters. The @indanao /ssociation of Trade Fnions obtained QLI votes. The &iatagon Aabor Federation obtained C( votes. =nly LLL voters too part in the election. #t turned out that the election was transferred by the &irector of Aabor Relations to Se%tember /L, /KOI $p. ))<, Rollo%. The protest of the &iatagon Aabor Federation against that election was not acted upon by the &irector of Aabor Relations in view of the pendency of this case $p. (<', Rollo%. The issues are $a% whether the &irector of Aabor Relations gravely abused his discretion in treating the employees of the two companies as one bargaining unit and $b% whether the Secretary of Aabor gravely abused his discretion in not entertaining the appeals of the petitioner from the orders of the &irector of Aabor Relations. We hold that the director of Aabor Relations acted with grave abuse of discretion in treating the two companies as a single bargaining unit. That ruling is arbitrary and untenable because the two companies are indubitably distinct entities with separate !uridical personalities. The fact that their businesses are related and that the )(C employees of Ieorgia "acific #nternational ?orporation were originally employees of Aianga 8ay Aogging ?o., #nc. is not a !ustification for disregarding their separate personalities. Hence, the )(C employees, who are now attached to Ieorgia "acific #nternational ?orporation, should not be allowed to vote in the certification election at the Aianga 8ay Aogging ?o., #nc. They should vote at a separate certification election to determine the collective bargaining representative of the employees of Ieorgia "acific #nternational ?orporation. However, at this late hour, or after the lapse of more than five years, the result of the +:'4 certification election should not be implemented. / new certification election should be held at Aianga 8ay Aogging ?o., #nc. but the )(C employees should not be allowed to vote in that election. With respect to the refusal of the Secretary of Aabor $now @inister of Aabor and ;mployment% to entertain appeals from the orders of the &irector of Aabor Relations, that norm of conduct is based on the rule laid down by the Secretary himself in Rule G $?ertification ?ases and #ntra-Fnion ?onflicts of 8oo Five *Aabor Relations,% of the Rules and Regulations #mplementing the Aabor ?ode dated February +C, +:'C, which Rule G provides0 S;?T#=> +B. Decision o$ the 9ureau is $inal and ina%%ealable. L The 8ureau shall have twenty $)B% wor ing days from receipt of the records of the case within which to decide the appeal $from the @ed-/rbiter%. The decision of the 8ureau in all cases shall be final and inappealable. $sic% That rule is in consonance with the policy of insuring speedy labor !ustice. #t is noteworthy that pursuant to that policy "residential &ecree >o. +(:+, which too effect on @ay ):, +:'E, eliminated appeals to the Secretary of Aabor from the decisions of the >ational Aabor Relations commission.

Rule ### $Representation #ssues, #nterventions, /ffiliations and &isaffiliations% of the Rules #mplementing "residential &ecree >o. +(:+, which rules too effect on September +4, +:'E, reaffirms the above-quoted section +B of Rule Five in the following provisions which also recogni-e this ?ourt1s power to review the orders of the &irector of Aabor Relations0 S;?. E. &ecision of the 8ureau &irector. L Final and #nappeatable. L The &irector of Aabor Relations shall have twenty $)B% wor ing days from receipt of the records of the case within which to decide cases on appeal from the @ed/rbiters in the Regional =ffices. The decision of the &irector, as representative of the @inister of labor, shall in all cases be final and inappealable. $sic% S;?. :. Petition $or certiorari Prohibition etc. to the Su%reme Court. L The filing with the Supreme ?ourt of a petition for certiorari or prohibition shall not stay the e.ecution of the order of the 8ureau unless otherwise ordered by the Supreme ?ourt. @oreover, under article ))C of the Aabor ?ode, the 8ureau of Aabor Relations and the labor relations divisions in the regional offices of the &epartment of Aabor have 6original and e.clusive authority to act, at their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor-management relations in all wor places6. =n the other hand, the petitioner and the two companies cite section (, Rule NG### of the Rules of "rocedure of the 8ureau of Aabor Relations dated September +(, +:'4 which provide that 6decisions of the 8ureau of Aabor Relations may be appealed to the Secretary of Aabor whose decisions shall be final and unappealable6. ;vidently, that rule was abrogated by the +:'C and +:'E implementing rules quoted above. WH;R;F=R;, the orders of the &irector of Aabor Relations holding that the employees of Aianga 8ay Aogging ?o., #nc. and Ieorgia "acific #nternational ?orporation should be treated as one bargaining unit are reversed and set aside. / new certification election should be held at Aianga 8ay Aogging ?o., #nc. The )(C employees of Ieorgia "acific #nternational ?orporation should not be allowed to vote in that election. >o costs. S= =R&;R;&. 9arredo (Chairman), Conce%cion, Jr., !bad Santos and De Castro, JJ., concur. D2L! S!LL2 )N4>2RS4&Y, P2&4&4#N2R, >S. D2L! S!LL2 )N4>2RS4&Y 27PL#Y22S !SS#C4!&4#N (DLS)2!) !ND 9)2N!>2N&)R! 7!'S!L4N, R2SP#ND2N&S. S'.R. No. //;;OJT D2L! S!LL2 )N4>2RS4&Y 27PL#Y22S !SS#C4!&4#N N!&4#N!L (2D2R!&4#N #( &2!C82RS !ND 27PL#Y22S )N4#N (DLS)2! N!(&2)), P2&4&4#N2R, >S. D2L! S!LL2 )N4>2RS4&Y !ND 9)2N!>2N&)R! 7!'S!L4N, R2SP#ND2N&S. D2C4S4#N $UENA, J.9 Filed with this ?ourt are two petitions for certiorari,*+, the first petition with preliminary in!unction and7or temporary restraining order, *), assailing the decision of voluntary arbitrator 8uenaventura @agsalin, dated 9anuary +:, +::(, as having been rendered with grave abuse of discretion amounting to lac or e.cess of !urisdiction. These two petitions have been consolidated inasmuch as the factual antecedents, parties involved and issues raised therein are interrelated. *(, The facts are not disputed and, as summari-ed by the voluntary arbitrator, are as follows. =n &ecember +:EC, &ela Salle Fniversity $hereinafter referred to as F>#G;RS#TJ% and &ela Salle Fniversity ;mployees /ssociation - >ational Federation of Teachers and ;mployees Fnion $&ASF;/->/FT;F%, which is composed of regular non-academic ran and file employees, *<, $hereinafter referred to as F>#=>% entered into a collective bargaining agreement with a life span of three $(% years, that is, from &ecember )(, +:EC to &ecember )), +:E:.*4, &uring the freedom period, or CB days before the e.piration of the said collective bargaining agreement, the Fnion initiated negotiations with the Fniversity for a new collective bargaining agreement *C, which, however, turned out to be unsuccessful, hence, the Fnion filed a >otice of Stri e with the >ational ?onciliation and @ediation 8oard, >ational ?apital Region. *', /fter several conciliationmediation meetings, five $4% out of the eleven $++% issues raised in the >otice of Stri e were resolved by the parties. / partial collective

bargaining agreement was thereafter e.ecuted by the parties. *E, =n @arch +E, +::+, the parties entered into a Submission /greement, identifying the remaining si. $C% unresolved issues for arbitration, namely0 6$+% scope of the bargaining unit, $)% union security clause, $(% security of tenure, $<% salary increases for the third and fourth years *this should properly read second and third years, *:, of the collective bargaining agreement, $4% indefinite union leave, reduction of the union presidentQs wor load, special leave, and finally, $C% duration of the agreement.6*+B, The parties appointed 8uenaventura @agsalin as voluntary arbitrator. *++, =n 9anuary +:, +::(, the voluntary arbitrator rendered the assailed decision.*+), #n the said decision, the voluntary arbitrator, on the first issue involving the scope of the bargaining unit, ruled that 6Wthe ?omputer =perators assigned at the ?S? *?omputer Services ?enter,, !ust li e any other ?omputer =perators in other units, *should be, included as members of the bargaining unit,6*+(, after finding that 6*e,vidently, the ?omputer =perators are presently doing clerical and routinary wor and had nothing to do with *the, setting of management policies for the Fniversity, as *may be, gleaned from the duties and responsibilities attached to the position and embodied in the ?S? *?omputer Services ?enter, brochure. They may have, as argued by the Fniversity, access to vital information regarding the FniversityQs operations but they are not necessarily confidential.6 *+<, Regarding the discipline officers, the voluntary arbitrator 6Wbelieves that this type of employees belong $sic% to the ran -and-file on the basis of the nature of their !ob.6*+4, With respect to the employees of the ?ollege of St. 8enilde, the voluntary arbitrator found that the ?ollege of St. 8enilde has a personality separate and distinct from the Fniversity and thus, held 6Wthat the employees therein are outside the bargaining unit of the FniversityQs ran -and-file employees.6*+C, =n the second issue regarding the propriety of the inclusion of a union shop clause in the collective bargaining agreement, in addition to the e.isting maintenance of membership clause, the voluntary arbitrator opined that a union shop clause 6Wis not a restriction on the employeeQs right of $sic% freedom of association but rather a valid form of union security while the ?8/ is in force and in accordance with the ?onstitutional policy to promote unionism and collective bargaining and negotiations. The parties therefore should incorporate such union shop clause in their ?8/.6*+', =n the third issue with respect to the use of the 6last-in-first-out6 method in case of retrenchment and transfer to other schools or units, the voluntary arbitrator upheld the 6Welementary right and prerogative of the management of the Fniversity to select and7or choose its employees, a right equally recogni-ed by the ?onstitution and the law. The employer, in the e.ercise of this right, can adopt valid and equitable grounds as basis for lay-off or separation, li e performance, qualifications, competence, etc. Similarly, the right to transfer or reassign an employee is an employerQs e.clusive right and prerogative.6 *+E, Regarding the fourth issue concerning salary increases for the second and third years of the collective bargaining agreement, the voluntary arbitrator opined that the 6Wproposed budget of the Fniversity for SJ +::)-:( could not sufficiently cope up with the demand for increases by the Fnion. ... .... With the present financial condition of the Fniversity, it cannot now be required to grant another round of increases through collective bargaining without e.hausting its coffers for other legitimate needs of the Fniversity as an institution,6 *+:, thus, he ruled that 6Wthe Fniversity can no longer be required to grant a second round of increase for the school years under consideration and charge the same to the incremental proceeds.6*)B, =n the fifth issue as to the FnionQs demand for a reduction of the wor load of the union president, special leave benefits and indefinite union leave with pay, the voluntary arbitrator re!ected the same, ruling that unionism 6Wis no valid reason for the reduction of the wor load of its "resident,6*)+, and that there is 6Wno sufficient !ustification to grant an indefinite leave.6 *)), Finding that the Fnion and the Faculty /ssociation are not similarly situated, technically and professionally, *)(, and that 6*w,hile professional growth is highly encouraged on the part of the ran -and-file employees, this educational advancement would not serve in the same degree as demanded of the faculty members,6*)<,the voluntary arbitrator denied the FnionQs demand for special leave benefits. =n the last issue regarding the duration of the collective bargaining agreement, the voluntary arbitrator ruled that 6Wwhen the parties forged their ?8/ and signed it on +: >ovember +::B, where a provision on duration was e.plicitly included, the same became a binding agreement between them. >otwithstanding the Submission /greement, thereby reopening this issue for resolution, this Goluntary /rbitrator is constrained to respect the original intention of the parties, the same being not contrary to law, morals or public policy.6 *)4, /s to the economic aspect of the collective bargaining agreement, the voluntary arbitrator opined that the 6Weconomic provisions of the ?8/ shall be re-opened after the third year in compliance with the mandate of the Aabor ?ode, as amended.6 *)C,

Subsequently, both parties filed their respective motions for reconsideration which, however, were not entertained by the voluntary arbitrator 6pursuant to e.isting rules and !urisprudence governing voluntary arbitration cases.6 *)', =n @arch 4, +::(, the Fniversity filed with the Second &ivision of this ?ourt, a petition for certiorari with temporary restraining order and7or preliminary in!unction assailing the decision of the voluntary arbitrator, as having been rendered 6in e.cess of !urisdiction and7or with grave abuse of discretion.6*)E, Subsequently, on @ay )<, +::(, the Fnion also filed a petition for certiorari with the First &ivision.*):, Without giving due course to the petition pending before each division, the First and Second &ivisions separately resolved to require the respondents in each petition, including the Solicitor Ieneral on behalf of the voluntary arbitrator, to file their respective ?omments. *(B,Fpon motion by the Solicitor Ieneral dated 9uly ):, +::(, both petitions were consolidated and transferred to the Second &ivision. *(+, #n his consolidated ?omment*(), filed on September :, +::( on behalf of voluntary arbitrator 8uenaventura ?. @agsalin, the Solicitor Ieneral agreed with the voluntary arbitratorQs assailed decision on all points e.cept that involving the employees of the ?ollege of St. 8enilde. /ccording to the Solicitor Ieneral, the employees of the ?ollege of St. 8enilde should have been included in the bargaining unit of the ran -and-file employees of the Fniversity.*((, The Solicitor Ieneral came to this conclusion after finding 6Wsufficient evidence to !ustify the FnionQs proposal to consider the Fniversity and the ?S8 *?ollege of St. 8enilde, as only one entity because the latter is but a mere integral part of the Fniversity,6 to wit0*(<, 6+. =ne of the duties and responsibilities of the ?S8Qs &irector of /cademic Services is to coordinate with the FniversityQs &irector of /dmissions regarding the admission of freshmen, shiftees and transferees $/nne. 6(6 of the FniversityQs Reply%3 6). Some of the duties and responsibilities of the ?S8Qs /dministrative =fficer are as follows0 R/. ... ... .... R<. Recommends and implements personnel policies and guidelines $in accordance with the Staff @anual% as well as pertinent e.isting general policies of the university as a whole. .... R+). ?onducts and establishes liaison with all the offices concerned at the @ain ?ampus as well $sic% with other government agencies on all administrative-related matters. ... R8. ... ... ... R'. Handles processing, canvassing and direct purchasing of all requisitions worth more than "+B,BBB or less. ?oordinates and canvasses with the @ain ?ampus all requisitions worth more than "+B,BBB. ... R?. ... ... ... R'. "lans and coordinates with the Security and Safety ?ommittee at the @ain ?ampus the development of a security and safety program during times of emergency or occurrence of fire or other natural calamities. ... $/nne. 6<6 of the FniversityQs Reply%.Q 6(. The significant role which the Fniversity assumes in the admission of students at the ?S8 is revealed in the following provisions of the ?S8Qs 8ulletin for /rts and 8usiness Studies &epartment for the schoolyear +::)-+::(, thus0 R?onsidered in the process of admission for a $sic% high school graduate applicants are the following criteria0 results of &ASF ?ollege ;ntrance ;.amination .... R/dmission requirements for transferees are0 ... and an acceptable score in the &ASF admission test. ... RShiftees from &ASF who are still eligible to enroll may be admitted in accordance with the &ASF policy on shifting. ?onsidering that there sometimes e.ist e.ceptional cases where a very difficult but temporary situation renders a &ASF student falling under this category a last chance to be re-admitted provided he meets the cut-off scores required in the qualifying e.amination administered by the university. ... RHe may not be remiss in his study obligations nor incur any violation whatsoever, as such will be ta en by the Fniversity to be an

indication of his loss of initiative to pursue further studies at &ASF. #n sch $sic% a case, he renders himself ineligible to continue studying at &ASF. &ASF thus reserves the right to the discontinuance of the studies of any enrolee whose presence is inimical to the ob!ectives of the ?S87&ASF. ... @i-so R/s a college within the university, the ?ollege of St. 8enilde subscribes to the &e Aa Salle @ission.6 $/nne.es 6?-+,6 6?-),6 and 6?-(6 of the FnionQs ?onsolidated Reply and Re!oinder%Q 6<. The academic programs offered at the ?S8 are li ewise presented in the FniversityQs Fndergraduate "rospectus for schoolyear +::)+::( $/nne. 6&6 of the FnionQs ?onsolidated Reply and Re!oinder%. 64. The Aeave Form Request $/nne. 6F6 of the FnionQs "osition "aper% at the ?S8 requires prior permission from the Fniversity anent leaves of ?S8 employees, to wit0 R/> ;@"A=J;; WH= I=;S => A;/G; W#TH=FT "R#=R ";R@#SS#=> FR=@ TH; F>#G;RS#TJ =R WH= =G;R;NT;>&S TH; ";R#=& =F H#S /""R=G;& A;/G; W#TH=FT S;?FR#>I /FTH=R#TJ FR=@ TH; F>#G;RS#TJ, =R WH= R;FFS; T= 8; R;?/AA;& FR=@ /> /""R=G;& A;/G; SH/AA 8; ?=>S#&;R;& /8S;>T W#TH=FT A;/G; />& SH/AA 8; SF89;?T T= &#S?#"A#>/RJ /?T#=>.Q 6C. The Fniversity officials themselves claimed during the +::B Fniversity /thletic /ssociation of the "hilippines $F//"% meet that the ?S8 athletes represented the Fniversity since the latter and the ?S8 comprise only one entity.6 =n February :, +::<, this ?ourt resolved to give due course to these consolidated petitions and to require the parties to submit their respective memoranda.*(4, #n its memorandum filed on /pril )E, +::<,*(C, pursuant to the above-stated Resolution,*(', the Fniversity raised the following issues for the consideration of the ?ourt0*(E, #. 6WH;TH;R =R >=T IR/G; /8FS; =F &#S?R;T#=> W/S ?=@@#TT;& 8J TH; G=AF>T/RJ /R8#TR/T=R WH;> H; #>?AF&;&, W#TH#> TH; 8/RI/#>#>I F>#T ?=@"R#S#>I TH; F>#G;RS#TJQS R/>K-/>&-F#A; ;@"A=J;;S, TH; ?=@"FT;R =";R/T=RS /SS#I>;& /T TH; F>#G;RS#TJQS ?=@"FT;R S;RG#?;S ?;>T;R />& TH; F>#G;RS#TJQS &#S?#"A#>; =FF#?;RS, />& WH;> H; ;N?AF&;& TH; ?=AA;I; =F S/#>T 8;>#A&; ;@"A=J;;S FR=@ TH; S/#& 8/RI/#>#>I F>#T. ##. 6WH;TH;R =R >=T IR/G; /8FS; =F &#S?R;T#=> W/S ?=@@#TT;& 8J TH; G=AF>T/RJ /R8#TR/T=R WH;> H; F"H;A& TH; F>#=>QS &;@/>& F=R TH; #>?AFS#=> =F / F>#=> SH=" ?A/FS; #> TH; "/RT#;SQ ?=AA;?T#G; 8/RI/#>#>I /IR;;@;>T. ###. 6WH;TH;R =R >=T IR/G; /8FS; =F &#S?R;T#=> W/S ?=@@#TT;& 8J TH; G=AF>T/RJ /R8#TR/T=R WH;> H; &;>#;& TH; F>#=>QS "R="=S/A F=R TH; 6A/ST-#>-F#RST-=FT6 @;TH=& =F A/J-=FF #> ?/S;S =F R;TR;>?H@;>T. Sc #G. 6WH;TH;R =R >=T IR/G; /8FS; =F &#S?R;T#=> W/S ?=@@#TT;& 8J TH; G=AF>T/RJ /R8#TR/T=R WH;> H; RFA;& TH/T TH; F>#G;RS#TJ ?/> >= A=>I;R 8; R;DF#R;& T= IR/>T / S;?=>& R=F>& =F W/I; #>?R;/S;S F=R TH; S?H==A J;/RS +::+-:) />& +::)-:( />& ?H/RI; TH; S/@; T= TH; #>?R;@;>T/A "R=?;;&S. G. 6WH;TH;R =R >=T IR/G; /8FS; =F &#S?R;T#=> W/S ?=@@#TT;& 8J TH; G=AF>T/RJ /R8#TR/T=R WH;> H; &;>#;&

TH; F>#=>QS "R="=S/AS => TH; &;A=/&#>I =F TH; F>#=> "R;S#&;>T, #@"R=G;& A;/G; 8;>;F#TS />& #>&;F#>#T; F>#=> A;/G; W#TH "/J.6 The Fnion, on the other hand, raised the following issues, in its memorandum, *(:, filed pursuant to Supreme ?ourt Resolution dated February :, +::<,*<B, to wit3 that the voluntary arbitrator committed grave abuse of discretion in0 6$+% F/#A#>I />&7=R R;FFS#>I T= "#;R?; TH; G;#A =F ?=R"=R/T; F#?T#=> =F TH; ?=AA;I; =F ST. 8;>#A&;&ASF &;S"#T; TH; "R;S;>?; =F SFFF#?#;>T 8/S#S T= &= S= />& #> F#>&#>I TH/T TH; ;@"A=J;;S TH;R;/T /R; =FTS#&; =F TH; 8/RI/#>#>I F>#T =F TH; &ASFQS R/>K-/>&-F#A; ;@"A=J;;S. H; /AS= ;RR;& #> H#S #>T;R"R;T/T#=> =F TH; /""A#?/T#=> =F TH; &=?TR#>;3 6$)% &;>J#>I TH; ";T#T#=>;RQS "R="=S/A F=R TH; RA/ST-#> F#RST-=FTQ @;TH=& =F A/J-=FF #> ?/S; =F R;TR;>?H@;>T />& #> F"H=A&#>I TH; /AA;I;& @/>/I;@;>T "R;R=I/T#G; T= S;A;?T />& ?H==S; #TS ;@"A=J;;S &#SR;I/R&#>I TH; 8/S#? T;>;TS =F S=?#/A 9FST#?; />& ;DF#TJ F"=> WH#?H TH#S "R="=S/A W/S F=F>&;&3 6$(% F#>&#>I TH/T TH; @FAT#S;?T=R/A ?=@@#TT;; #> TH; R;S"=>&;>T F>#G;RS#TJ #S TH; A;I#T#@/T; IR=F" WH#?H &;T;R@#>;S />& S?RFT#>#S;S />>F/A S/A/RJ #>?R;/S;S />& FR#>I; 8;>;F#TS =F TH; ;@"A=J;;S3 6$<% H=A&#>I TH/T TH; 'B5 SH/R; #> TH; #>?R;@;>T/A TF#T#=> "R=?;;&S #S TH; =>AJ S=FR?; =F S/A/RJ #>?R;/S;S />& FR#>I; 8;>;F#TS =F TH; ;@"A=J;;S3 6$4% F/#A#>I7R;FFS#>I7&#SR;I/R&#>I T= ?=>S#&;R TH; R;S"=>&;>T F>#G;RS#TJQS F#>/>?#/A ST/T;@;>TS F/?TF/AAJ T= &;T;R@#>; TH; F=R@;RQS ?/"/8#A#TJ T= IR/>T TH; "R="=S;& S/A/RJ #>?R;/S;S =G;R />& /8=G; TH; 'B5 SH/R; #> TH; #>?R;@;>T/A TF#T#=> "R=?;;&S />& #> I#G#>I W;#IHT />& ?=>S#&;R/T#=> T= TH; R;S"=>&;>T F>#G;RS#TJQS "R="=S;& 8F&I;T WH#?H #S @;R;AJ /> ;ST#@/T;. 6$C% F/#A#>I T= ;DF/T; TH; "=S#T#=> />& R;S"=>S#8#A#T#;S =F TH; F>#=> "R;S#&;>T W#TH TH=S; =F TH; "R;S#&;>T =F TH; F/?FATJ /SS=?#/T#=> WH#?H #S >=T ;G;> / A;I#T#@/T; A/8=R =RI/>#S/T#=> />& #> S";?FA/T#>I TH/T TH; "R;S#&;>T =F TH; F/?FATJ /SS=?#/T#=> SFFF;RS / ?=RR;S"=>&#>I R;&F?T#=> #> S/A/RJ => TH; /??=F>T =F TH; R;&F?T#=> =F H#S W=RKA=/&3 #> F/#A#>I T= /""R;?#/T; TH; ;DF/A R#IHTS =F TH; @;@8;RS =F TH; F>#=> />& =F TH; F/?FATJ F=R "R=F;SS#=>/A /&G/>?;@;>T /S W;AA /S TH; &;S#R/8A; ;FF;?TS =F TH; #>ST#TFT#=>/A#S/T#=> =F TH; S";?#/A A;/G; />& W=RKA=/& R;&F?T#=> 8;>;F#TS.6*<+, The question which now confronts us is whether or not the voluntary arbitrator committed grave abuse of discretion in rendering the assailed decision, particularly, in resolving the following issues0 $+% whether the computer operators assigned at the FniversityQs ?omputer Services ?enter and the FniversityQs discipline officers may be considered as confidential employees and should therefore be e.cluded from the bargaining unit which is composed of ran and file employees of the Fniversity, and whether the employees of the ?ollege of St. 8enilde should also be included in the same bargaining unit3 $)% whether a union shop clause should be included in the partiesQ collective bargaining agreement, in addition to the e.isting maintenance of membership clause3 $(% whether the denial of the FnionQs proposed 6lastin-first-out6 method of laying-off employees, is proper3 $<% whether the ruling that on the basis of the FniversityQs proposed budget, the Fniversity can no longer be required to grant a second round of wage increases for the school years +::+-:) and +::)-:( and charge the same to the incremental proceeds, is correct3 $4% whether the denial of the FnionQs proposals on the deloading of the union president, improved leave benefits and indefinite union leave with pay, is proper3 $C% whether the finding that the multi-sectoral committee in the Fniversity is the legitimate group which determines and scrutini-es the annual salary increases and fringe benefits of the employees of the Fniversity, is correct3 and $'% whether the ruling that the 'B5 share in the incremental tuition proceeds is the only source of salary increases and fringe benefits of the employees, is proper. >ow, before proceeding to the discussion and resolution of the issues raised in the pending petitions, certain preliminary matters call for disposition. /s we reiterated in the case of Caltex Refinery Employees Association (CREA) vs. Jose S. rillantes, *<), the following are the well-settled rules in a petition for certiorari involving labor cases. 6First, the factual findings of quasi-!udicial agencies $such as the &epartment of Aabor and ;mployment%, when supported by substantial evidence, are binding on this ?ourt and entitled to great respect, considering the e.pertise of these agencies in their respective fields. #t is well-established that findings of these administrative agencies are generally accorded not only respect but even finality. *<(, 6Second, substantial evidence in labor cases is such amount of relevant evidence which a reasonable mind will accept as adequate to !ustify a conclusion.*<<,

6&hird, in !lores vs. "ational #abor Relations Commission,*<4, we e.plained the role and function of Rule C4 as an e.traordinary remedy0 6#t should be noted, in the first place, that the instant petition is a special civil action for certiorari under Rule C4 of the Revised Rules of ?ourt. /n e.traordinary remedy, its use is available only and restrictively in truly e.ceptional cases L those wherein the action of an inferior court, board or officer performing !udicial or quasi-!udicial acts is challenged for being wholly void on grounds of !urisdiction. The sole office of the writ of certiorari is the correction of errors of !urisdiction including the commission of grave abuse of discretion amounting to lac or e.cess of !urisdiction. #t does not include correction of public respondent >AR?1s evaluation of the evidence and factual findings based thereon, which are generally accorded not only great respect but even finality. 6>o question of !urisdiction whatsoever is being raised and7or pleaded in the case at bench. #nstead, what is being sought is a !udicial reevaluation of the adequacy or inadequacy of the evidence on record, which is certainly beyond the province of the e.traordinary writ of certiorari. Such demand is impermissible for it would involve this ?ourt in determining what evidence is entitled to belief and the weight to be assigned it. A' Ee &):e -e%+e-)+e0 (oun+2e'' +%1e', Fu0%(%)2 -e:%eE /, +&%' Cou-+ %n 2)/o- ()'e' 0oe' no+ 4o 'o .)- )' +o e:)2u)+e +&e 'u..%(%en(, o. +&e e:%0en(e u*on E&%(& +&e *-o*e- 2)/o- o..%(e- o- o..%(e /)'e0 &%' o- %+' 0e+e-1%n)+%on /u+ %' 2%1%+e0 on2, +o %''ue' o. Fu-%'0%(+%on o- 4-):e )/u'e o. 0%'(-e+%on )1oun+%n4 +o 2)(G o. Fu-%'0%(+%on. 6 $emphasis supplied%. With the foregoing rules in mind, we shall now proceed to discuss the merit of these consolidated petitions. We affirm in part and modify in part. =n the first issue involving the classification of the computer operators assigned at the FniversityQs ?omputer Services ?enter and discipline officers, the Fniversity argues that they are confidential employees and that the Fnion has already recogni-ed the confidential nature of their functions when the latter agreed in the partiesQ +:EC collective bargaining agreement to e.clude the said employees from the bargaining unit of ran -and-file employees. /s far as the said computer operators are concerned, the Fniversity contends that 6W the parties have already previously agreed to e.clude all positions in the FniversityQs ?omputer Services ?enter $?S?%, which include the positions of computer operators, from the collective bargaining unit. ... ....6 *<C, The Fniversity further contends that 6Wthe nature of the wor done by these ?omputer =perators is enough !ustification for their e.clusion from the coverage of the bargaining unit of the FniversityQs ran -and-file employees. ... ....6*<',/ccording to the Fniversity, the ?omputer Services ?enter, where these computer operators wor , 6Wprocesses data that are needed by management for strategic planning and evaluation of systems. #t also houses the FniversityQs confidential records and information *e.g. student records, faculty records, faculty and staff payroll data, and budget allocation and e.penditure related data, which are contained in computer files and computer-generated reports. ... .... @oreover, the ?omputer =perators are in fact the repository of the FniversityQs confidential information and data, including those involving and7or pertinent to labor relations. ... ....6*<E, /s to the discipline officers, the Fniversity maintains that 6Wthey are li ewise e.cluded from the bargaining unit of the ran -and-file employees under the partiesQ +:EC ?8/. The &iscipline =fficers are clearly alter egos of management as they perform tas s which are inherent in management *e.g. enforce discipline, act as peace officers, secure peace and safety of the students inside the campus, conduct investigations on violations of Fniversity regulations, or of e.isting criminal laws, committed within the Fniversity or by Fniversity employees, ... ....6*<:, The Fniversity also alleges that 6the &iscipline =fficers are privy to highly confidential information ordinarily accessible only to management.6*4B, @ani -s With regard to the employees of the ?ollege of St. 8enilde, the Fnion, supported by the Solicitor Ieneral at this point, asserts that the veil of corporate fiction should be pierced, thus, according to the Fnion, the Fniversity and the ?ollege of St. 8enilde should be considered as only one entity because the latter is but a mere integral part of the Fniversity. *4+, The FniversityQs arguments on the first issue fail to impress us. The ?ourt agrees with the Solicitor Ieneral that the e.press e.clusion of the computer operators and discipline officers from the bargaining unit of ran -and-file employees in the +:EC collective bargaining agreement does not bar any re-negotiation for the future inclusion of the said employees in the bargaining unit. &uring the freedom period, the parties may not only renew the e.isting collective bargaining agreement but may also propose and discuss modifications or amendments thereto. With regard to the alleged confidential nature of the said employeesQ functions, after a careful consideration of the pleadings filed before this ?ourt, we rule that the said computer operators and discipline officers are not confidential employees. /s

carefully e.amined by the Solicitor Ieneral, the service record of a computer operator reveals that his duties are basically clerical and nonconfidential in nature.*4), /s to the discipline officers, we agree with the voluntary arbitrator that based on the nature of their duties, they are not confidential employees and should therefore be included in the bargaining unit of ran -and-file employees. The ?ourt also affirms the findings of the voluntary arbitrator that the employees of the ?ollege of St. 8enilde should be e.cluded from the bargaining unit of the ran -and-file employees of &ela Salle Fniversity, because the two educational institutions have their own separate !uridical personality and no sufficient evidence was shown to !ustify the piercing of the veil of corporate fiction. *4(, =n the second issue involving the inclusion of a union shop clause in addition to the e.isting maintenance of membership clause in the collective bargaining agreement, the Fniversity avers that 6Wit is in the spirit of the e.ercise of the constitutional right to self-organi-ation that every individual should be able to freely choose whether to become a member of the Fnion or not. The right to !oin a labor organi-ation should carry with it the corollary right not to !oin the same. This position of the Fniversity is but in due recognition of the individualQs free will and capability for !udgment.6*4<, The Fniversity assails the FnionQs demand for a union shop clause as 6Wdefinitely un!ust and amounts to oppression. @oreover, such a demand is repugnant to democratic principles and the constitutionally guaranteed freedom of individuals to !oin or not to !oin an association as well as their right to security of tenure, particularly, on the part of present employees.6*44, The Fnion, on the other hand, counters that the Aabor ?ode, as amended, recogni-es the validity of a union shop agreement in /rticle )<E thereof which reads0 6/RT. )<E. Fnfair labor practices of employers. T ... ... ...

$e% To discriminate in regard to hire or tenure of employment or any term or condition of employment in order to encourage or discourage membership in any labor organi-ation. No+&%n4 %n +&%' Co0e o- %n )n, o+&e- 2)E '&)22 *-e:en+ +&e *)-+%e' .-o1 -eHu%-%n4 1e1/e-'&%* %n ) -e(o4n%Ie0 (o22e(+%:e /)-4)%n%n4 )4en+ )' ) (on0%+%on .o- e1*2o,1en+, eJ(e*+ o. +&o'e e1*2o,ee' E&o )-e )2-e)0, 1e1/e-' o. )no+&e- un%on )+ +&e +%1e o. +&e '%4n%n4 o. +&e (o22e(+%:e /)-4)%n%n4 )4-ee1en+. ... ....6 $emphasis supplied% We affirm the ruling of the voluntary arbitrator for the inclusion of a union shop provision in addition to the e.isting maintenance of membership clause in the collective bargaining agreement. /s the Solicitor Ieneral asserted in his consolidated ?omment, the FniversityQs reliance on the case of $ictoriano vs. Eli%alde Rope &or'ers( )nion*4C, is clearly misplaced. #n that case, we ruled that 6Wthe right to !oin a union includes the right to abstain from !oining any union. ... .... The right to refrain from !oining labor organi-ations recogni-ed by Section ( of the #ndustrial "eace /ct is, however, limited. The legal protection granted to such right to refrain from !oining is withdrawn by operation of law, where a labor union and an employer have agreed on a closed shop, by virtue of which the employer may employ only members of the collective bargaining union, and the employees must continue to be members of the union for the duration of the contract in order to eep their !obs. ... ....6*4', =n the third issue regarding the FnionQs proposal for the use of the 6last-in-first-out6 method in case of lay-off, termination due to retrenchment and transfer of employees, the Fnion relies on social !ustice and equity to support its proposition, and submits that the FniversityQs prerogative to select and7or choose the employees it will hire is limited, either by law or agreement, especially where the e.ercise of this prerogative might result in the loss of employment. *4E, The Fnion further insists that its proposal is 6Win eeping with the avowed State policy R$q% To ensure the participation of wor ers in decision and policy-ma ing processes affecting their rights, duties and welfareQ $/rt. )++, Aabor ?ode, as amended%.6 *4:, =n the other hand, the Fniversity asserts its management prerogative and counters that 6*w,hile it is recogni-ed that this right of employees and wor ers to Rparticipate in policy and decision-ma ing processes affecting their rights and benefits as may be provided by lawQ has been enshrined in the ?onstitution $/rticle ###,*should be /rticle N###,, Section (, par. )%, said participation, however, does not automatically entitle the Fnion to dictate as to how an employer should choose the employees to be affected by a retrenchment program. The employer still retains the prerogative to determine the reasonable basis for selecting such employees.6 *CB, We agree with the voluntary arbitrator that as an e.ercise of management prerogative, the Fniversity has the right to adopt valid and

equitable grounds as basis for terminating or transferring employees. /s we ruled in the case of Autobus &or'ers* )nion (A&)) and Ricardo Escanlar vs. "ational #abor Relations Commission ,*C+, 6*a, valid e.ercise of management prerogative is one which, among others, covers0 wor assignment, wor ing methods, time, supervision of wor ers, +-)n'.e- o. e1*2o,ee', wor supervision, and the discipline, 0%'1%'')2and recall of wor ers. EJ(e*+ )' *-o:%0e0 .o-, o- 2%1%+e0 /, '*e(%)2 2)E', )n e1*2o,e- %' .-ee +o -e4u2)+e, )((o-0%n4 +o &%' oEn 0%'(-e+%on )n0 Fu041en+, )22 )'*e(+' o. e1*2o,1en+. 6 $emphasis supplied% =n the fourth issue involving the voluntary arbitratorQs ruling that on the basis of the FniversityQs proposed budget, the Fniversity can no longer be required to grant a second round of wage increases for the school years +::+-:) and +::)-:( and charge the same to the incremental proceeds, we find that the voluntary arbitrator committed grave abuse of discretion amounting to lac or e.cess of !urisdiction. /s we ruled in the case of Caltex Refinery Employees Association (CREA) vs. Jose S. rillantes ,*C), 6... .... *w,e believe that the standard proof of a company1s financial standing is its financial statements duly audited by independent and credible e.ternal auditors.6*C(, Financial statements audited by independent e.ternal auditors constitute the normal method of proof of profit and loss performance of a company.*C<, The financial capability of a company cannot be based on its proposed budget because a proposed budget does not reflect the true financial condition of a company, unli e audited financial statements, and more importantly, the use of a proposed budget as proof of a companyQs financial condition would be susceptible to abuse by scheming employers who might be merely feigning dire financial condition in their business ventures in order to avoid granting salary increases and fringe benefits to their employees. =n the fifth issue involving the FnionQs proposals on the deloading of the union president, improved leave benefits and indefinite union leave with pay, we agree with the voluntary arbitratorQs re!ection of the said demands, there being no !ustifiable reason for the granting of the same. =n the si.th issue regarding the finding that the multi-sectoral committee in the Fniversity is the legitimate group which determines and scrutini-es the annual salary increases and fringe benefits of the employees of the Fniversity, the ?ourt finds that the voluntary arbitrator did not gravely abuse his discretion on this matter. From our reading of the assailed decision, it appears that during the partiesQ negotiations for a new collective bargaining agreement, the Fnion demanded for a )45 and <B5 salary increase for the second and third years, respectively, of the collective bargaining agreement. *C4, The FniversityQs counter-proposal was for a +B5 increase for the third year. *CC, /fter the meeting of the multi-sectoral committee on budget, which is composed of students, parents, faculty, administration and union, the Fniversity granted across-the-board salary increases of ++.(5 and +:5 for the second and third years, respectively. *C', While the voluntary arbitrator found that the said committee 6Wdecided to grant the said increases based on the FniversityQs viability which were e.clusively sourced from the tuition fees. ... ....,6 no finding was made as to the basis of the committeeQs decision. 8e that as it may, assuming for the sa e of argument that the said committee is the group responsible for determining wage increases and fringe benefits, as ruled by the voluntary arbitrator, the committeeQs determination must still be based on duly audited financial statements following our ruling on the fourth issue. =n the seventh and last issue involving the ruling that the 'B5 share in the incremental tuition proceeds is the only source of salary increases and fringe benefits of the employees, the ?ourt deems that any determination of this alleged error is unnecessary and irrelevant, in view of our rulings on the fourth and preceding issues and there being no evidence presented before the voluntary arbitrator that the Fniversity held incremental tuition fee proceeds from which any wage increase or fringe benefit may be satisfied. ;HEREFORE, premises considered, the petitions in these consolidated cases, I.R. >o. +B:BB) and I.R. >o. ++BB') are partially GRANTED. The assailed decision dated 9anuary +:, +::( of voluntary arbitrator 8uenaventura @agsalin is hereby AFFIR#ED with the modification that the issue on salary increases for the second and third years of the collective bargaining agreement be RE#ANDED to the voluntary arbitrator for definite resolution within one month from the finality of this &ecision, on the basis of the e.ternally audited financial statements of the Fniversity already submitted by the Fnion before the voluntary arbitrator and forming part of the records. SO ORDERED. 9ellosillo, (Chairman), 7endoAa, Uuisumbing, and De Leon, Jr., JJ., concur.

;?=>=@#? STR#K;S

G.R. No. L64<58

#), =0, 1>5=

CALTEC [8HIL.] INC., petitioner, vs. 8HILI88INE LA$OR ORGANIAATIONS, CALTEC CHA8TER, respondent. Ross, Sel%h, Carrascoso ? Janda $or %etitioner. 9altaAar 7. >illanueva $or res%ondent. 8ARAS, C.J., J.9 #n the course of the proceedings in ?ase >o. ++)-v of the ?ourt of #ndustria Relations, involving an industrial dispute between the "hilippine Aabor =rgani-ations, ?alte. ?hapter, hereinafter referred to as the Fnion, and ?alte., $"hilippines%, #nc., hereinafter referred to as the ?ompany, that court issued an order on 9anuary ), +:<E containing the following directive0 The laborers involve in this cases, pending the final determination of same, are en!oined not to stage stri e or wal out from their employment without authority from and without first submitting their grievances to the court. The respondent companies are li ewise en!oined not to lay off, dismiss, discharge or admit any employees or laborers in their employments during the pendency of these cases without beforehand notifying and obtaining the authority of the court. The controversial points involved in the petitions will be heard separately by this court at the opportune time. =n February +( and +4, +:4B, the Fnion presented certain demands on the ?ompany which became the sub!ect of negotiations between the parties. =n @arch +, +:4B, a stri e was declared by the Fnion, a matter which the ?ompany submitted to the ?ourt of #ndustrial Relations in ?ase >o. ++)-G $+B%. /fter hearing, the ?ourt of #ndustrial Relations, thru "residing 9udge /rsenio ?. Roldan rendered a decision dated 9uly (+, +:4B, holding as follows0 +. The prohibition in declaring a stri e during the determination of the dispute, issued in a pending case before the ?ourt, refers to stri e over the same or similar demands or dispute or matters directly connected with them in the pending case only, and a stri e thus declared while there is such order, is a violation of this in!unction and, therefore, illegal3 ). "rohibition not to declare stri e during the determination of the dispute in a pending case before the ?ourt does not prohibit a stri e for new demands3 (. The stri e declared by the member of the petitioning union, wor ers of the respondent company, on @arch +, +:4B, was not a violation of the order given by the ?ourt of #ndustrial Relations on 9anuary ), +:<E3 <. The stri e declared by the members of the petitioning union, wor ers of the respondent company, on march +, +:4B, was illegal, not only because the purpose was trivial, un!ust or unreasonable but because there was no good purpose at all. 4. The company did not dismiss the laborers ?oncha, Silva, /lgo-o and "un-al as they abandoned they wor , and, therefore, the official of the management can not be held in contempt of ?ourt3 and C. /s this stri e was illegal, the ?ompany is authori-e to dismiss those responsible therefor, and may rehire such of the stri ing employees and laborers and7or new labor force as in its direction it may see fit. The Fnion filed a motion for reconsideration. Fnder date of 9anuary (+, +:4+, the ?ourt of #ndustrial Relations in banc issued a resolution reserving the decision of 9udge Roldan insofar as it declared the stri e illegal and insofar as it authori-ed the ?ompany to discharge the wor ers responsible for the stri e. This resolution was by a three-to-two vote. =n @arch )B, +:4+, the ?ompany filed an urgent petition followed on the ne.t day by an urgent amended petition, praying that the motion for reconsideration filed against the decision dated 9uly (+, +:4B, of 9udge Roldan, be denied, because said decision had become final and unappealable on /ugust +', +:4B, in view of the fact that, although the motion for reconsideration was filed by the Fnion of the Aast day of the reglementary period, no company thereof was serve upon the adverse party and no proof of service was shown. the amended urgent petition was denied by the ?ourt of #ndustrial Relations in banc in its ignominious order of /pril )B, +:4+. the certiorari, praying the !udgment be rendered0

$a% reversing and setting aside the resolution of the ?ourt of #ndustrial Relations modifying the decision of 9uly (B, +:4B, the latter having become final and unappealable3 $b% but should this court be of the opinion that the decision had not become final and unappealable, petitioner prays that this Honorable ?ourt render !udgment reversing the setting aside the decision of 9uly (+, +:4B, and affirming the said decision. The contention of the company that the decision of the Trial 9udge of 9uly (+, +:4B had become final and unappealable, is without merit. /ssuming that copy of the motion for reconsideration filed by the Fnion was not served upon the ?ompany, or if it was serve no proof of service was presented, the ?ourt of #ndustrial Relations could entertain said motion for reconsideration as an application by an interested party of the reopening of a question involved in a decision under section +' of ?ommonwealth /ct >o. +B(, as amended. $Ioseco vs. ?ourt of #ndustrial Relations, CE "hil. <<<% There is neither merit in the company1s contention that the stri e stage by the Fnion on @arch +, +:4B was in violation of the directive of the ?ourt of #ndustrial Relation of 9anuary ), +:<E, hereinabove quoted. From the very decision of 9uly (+, +:4B, it is clear that the stri e was motivated by new demands or matters not connected with or similar to the demands or disputes involved in this case in which the ordered of 9anuary ), +:<E were issued, and therefore could not have been, as correctly held by 9udge Roldan, violative of the directive against tries. The important question that arises is whether the stri e held on @arch +, +:4B, was illegal. =n this we agree with the resolution of the ?ourt of #ndustrial Relations in banc. #t is noteworthy that on February +(, +:4B, the Fnion set a letter to the company, containing fourteen demands reffering to wage differentials, retirement and insurance benefits, free medical treatment and hospitali-ation with pay, ?hristmas bonus, bonus to drivers, vacation and the sic leave, overtime pay, reinstatement of certain employees, gratuity to pre-war employees and bac pay during the 9apanese occupation. #t appears also that in the second letter of February +4, +:4B, the Fnion gave the manager of the ?ompany forty-eight hours to decide on the demands, with the admonition that the Fnion would declared a stri e. The resolution of the ?ourt of #ndustrial Relations in banc of 9anuary (+, +:4+ found that 6among the factors that motivated the declaration of the stri e was the failure of the respondent to meet the petitioner1s demands.6 These demands, if granted, would certainly tend to improve the conditions of the laborers and employees affected, and cannot be said to trival, much less illegal. 8ut whether the same are unreasonable or un!ust as a matter to be decided after proper consideration. #f said demands cannot be granted for being un!ust or unreasonable, the only consequence, in the appropriate words of the ?ourt of #ndustrial Relations in banc, should 6be their re!ection and not the punishment of the wor ers who presented them.6 To ma e the legality or illegality of stri es dependent solely on whether the demands of laborers may or may not be granted, is in effect to outlaw altogether an effective means of securing better wor ing conditions. Wherefore the decision of the ?ourt of #ndustrial Relations now under review is hereby affirmed, with costs against the petitioner. So ordered. (eria, Pablo, 9engAon, &uason, Jugo and 9autista !ngelo, JJ., concur.