#1 G.R. No.

178296 January 12, 2011

THE HERITAGE HOTEL MANILA, acting through its owner, GRAND PLAZA HOTEL CORPORATION,Petitioner,
vs.
NATIONAL UNION OF WORKERS IN THE HOTEL, RESTAURANT AND ALLIED INDUSTRIES-HERITAGE HOTEL MANILA
SUPERVISORS CHAPTER (NUWHRAIN-HHMSC), Respondent.
D E C I S I O N
NACHURA, J.:
Before the Court is a petition for review on certiorari of the Decision
1
of the Court of Appeals (CA) dated May 30,
2005 and Resolution dated June 4, 2007. The assailed Decision affirmed the dismissal of a petition for cancellation of
union registration filed by petitioner, Grand Plaza Hotel Corporation, owner of Heritage Hotel Manila, against
respondent, National Union of Workers in the Hotel, Restaurant and Allied Industries-Heritage Hotel Manila
Supervisors Chapter (NUWHRAIN-HHMSC), a labor organization of the supervisory employees of Heritage Hotel
Manila.
The case stemmed from the following antecedents:
On October 11, 1995, respondent filed with the Department of Labor and Employment-National Capital Region
(DOLE-NCR) a petition for certification election.
2
The Med-Arbiter granted the petition on February 14, 1996 and
ordered the holding of a certification election.
3
On appeal, the DOLE Secretary, in a Resolution dated August 15,
1996, affirmed the Med-Arbiters order and remanded the case to the Med-Arbiter for the holding of a preelection
conference on February 26, 1997. Petitioner filed a motion for reconsideration, but it was denied on September 23,
1996.
The preelection conference was not held as initially scheduled; it was held a year later, or on February 20, 1998.
Petitioner moved to archive or to dismiss the petition due to alleged repeated non-appearance of respondent. The
latter agreed to suspend proceedings until further notice. The preelection conference resumed on January 29, 2000.
Subsequently, petitioner discovered that respondent had failed to submit to the Bureau of Labor Relations (BLR) its
annual financial report for several years and the list of its members since it filed its registration papers in 1995.
Consequently, on May 19, 2000, petitioner filed a Petition for Cancellation of Registration of respondent, on the
ground of the non-submission of the said documents. Petitioner prayed that respondents Certificate of Creation of
Local/Chapter be cancelled and its name be deleted from the list of legitimate labor organizations. It further
requested the suspension of the certification election proceedings.
4

On June 1, 2000, petitioner reiterated its request by filing a Motion to Dismiss or Suspend the [Certification Election]
Proceedings,
5
arguing that the dismissal or suspension of the proceedings is warranted, considering that the
legitimacy of respondent is seriously being challenged in the petition for cancellation of registration. Petitioner
maintained that the resolution of the issue of whether respondent is a legitimate labor organization is crucial to the
issue of whether it may exercise rights of a legitimate labor organization, which include the right to be certified as
the bargaining agent of the covered employees.
Nevertheless, the certification election pushed through on June 23, 2000. Respondent emerged as the winner.
6

On June 28, 2000, petitioner filed a Protest with Motion to Defer Certification of Election Results and
Winner,
7
stating that the certification election held on June 23, 2000 was an exercise in futility because, once
respondents registration is cancelled, it would no longer be entitled to be certified as the exclusive bargaining agent
of the supervisory employees. Petitioner also claimed that some of respondents members were not qualified to join
the union because they were either confidential employees or managerial employees. It then prayed that the
certification of the election results and winner be deferred until the petition for cancellation shall have been
resolved, and that respondents members who held confidential or managerial positions be excluded from the
supervisors bargaining unit.
Meanwhile, respondent filed its Answer
8
to the petition for the cancellation of its registration. It averred that the
petition was filed primarily to delay the conduct of the certification election, the respondents certification as the
exclusive bargaining representative of the supervisory employees, and the commencement of bargaining
negotiations. Respondent prayed for the dismissal of the petition for the following reasons: (a) petitioner is
estopped from questioning respondents status as a legitimate labor organization as it had already recognized
respondent as such during the preelection conferences; (b) petitioner is not the party-in-interest, as the union
members are the ones who would be disadvantaged by the non-submission of financial reports; (c) it has already
complied with the reportorial requirements, having submitted its financial statements for 1996, 1997, 1998, and
1999, its updated list of officers, and its list of members for the years 1995, 1996, 1997, 1998, and 1999; (d) the
petition is already moot and academic, considering that the certification election had already been held, and the
members had manifested their will to be represented by respondent.
Citing National Union of Bank Employees v. Minister of Labor, et al.
9
and Samahan ng Manggagawa sa Pacific Plastic
v. Hon. Laguesma,
10
the Med-Arbiter held that the pendency of a petition for cancellation of registration is not a bar
to the holding of a certification election. Thus, in an Order
11
dated January 26, 2001, the Med-Arbiter dismissed
petitioners protest, and certified respondent as the sole and exclusive bargaining agent of all supervisory
employees.
Petitioner subsequently appealed the said Order to the DOLE Secretary.
12
The appeal was later dismissed by DOLE
Secretary Patricia A. Sto. Tomas (DOLE Secretary Sto. Tomas) in the Resolution of August 21, 2002.
13
Petitioner
moved for reconsideration, but the motion was also denied.
14

In the meantime, Regional Director Alex E. Maraan (Regional Director Maraan) of DOLE-NCR finally resolved the
petition for cancellation of registration. While finding that respondent had indeed failed to file financial reports and
the list of its members for several years, he, nonetheless, denied the petition, ratiocinating that freedom of
association and the employees right to self-organization are more substantive considerations. He took into account
the fact that respondent won the certification election and that it had already been certified as the exclusive
bargaining agent of the supervisory employees. In view of the foregoing, Regional Director Maraanwhile
emphasizing that the non-compliance with the law is not viewed with favorconsidered the belated submission of
the annual financial reports and the list of members as sufficient compliance thereof and considered them as having
been submitted on time. The dispositive portion of the decision
15
dated December 29, 2001 reads:
WHEREFORE, premises considered, the instant petition to delist the National Union of Workers in the Hotel,
Restaurant and Allied Industries-Heritage Hotel Manila Supervisors Chapter from the roll of legitimate labor
organizations is hereby DENIED.
SO ORDERED.
16

Aggrieved, petitioner appealed the decision to the BLR.
17
BLR Director Hans Leo Cacdac inhibited himself from the
case because he had been a former counsel of respondent.
In view of Director Cacdacs inhibition, DOLE Secretary Sto. Tomas took cognizance of the appeal. In a
resolution
18
dated February 21, 2003, she dismissed the appeal, holding that the constitutionally guaranteed
freedom of association and right of workers to self-organization outweighed respondents noncompliance with the
statutory requirements to maintain its status as a legitimate labor organization.
Petitioner filed a motion for reconsideration,
19
but the motion was likewise denied in a resolution
20
dated May 30,
2003. DOLE Secretary Sto. Tomas admitted that it was the BLR which had jurisdiction over the appeal, but she
pointed out that the BLR Director had voluntarily inhibited himself from the case because he used to appear as
counsel for respondent. In order to maintain the integrity of the decision and of the BLR, she therefore accepted the
motion to inhibit and took cognizance of the appeal.
Petitioner filed a petition for certiorari with the CA, raising the issue of whether the DOLE Secretary acted with grave
abuse of discretion in taking cognizance of the appeal and affirming the dismissal of its petition for cancellation of
respondents registration.
In a Decision dated May 30, 2005, the CA denied the petition. The CA opined that the DOLE Secretary may legally
assume jurisdiction over an appeal from the decision of the Regional Director in the event that the Director of the
BLR inhibits himself from the case. According to the CA, in the absence of the BLR Director, there is no person more
competent to resolve the appeal than the DOLE Secretary. The CA brushed aside the allegation of bias and partiality
on the part of the DOLE Secretary, considering that such allegation was not supported by any evidence.
The CA also found that the DOLE Secretary did not commit grave abuse of discretion when she affirmed the
dismissal of the petition for cancellation of respondents registration as a labor organization. Echoing the DOLE
Secretary, the CA held that the requirements of registration of labor organizations are an exercise of the overriding
police power of the State, designed for the protection of workers against potential abuse by the union that recruits
them. These requirements, the CA opined, should not be exploited to work against the workers constitutionally
protected right to self-organization.
Petitioner filed a motion for reconsideration, invoking this Courts ruling in Abbott Labs. Phils., Inc. v. Abbott Labs.
Employees Union,
21
which categorically declared that the DOLE Secretary has no authority to review the decision of
the Regional Director in a petition for cancellation of union registration, and Section 4,
22
Rule VIII, Book V of the
Omnibus Rules Implementing the Labor Code.
In its Resolution
23
dated June 4, 2007, the CA denied petitioners motion, stating that the BLR Directors inhibition
from the case was a peculiarity not present in the Abbott case, and that such inhibition justified the assumption of
jurisdiction by the DOLE Secretary.
In this petition, petitioner argues that:
I.
The Court of Appeals seriously erred in ruling that the Labor Secretary properly assumed jurisdiction over
Petitioners appeal of the Regional Directors Decision in the Cancellation Petition x x x.
A. Jurisdiction is conferred only by law. The Labor Secretary had no jurisdiction to review the decision of the
Regional Director in a petition for cancellation. Such jurisdiction is conferred by law to the BLR.
B. The unilateral inhibition by the BLR Director cannot justify the Labor Secretarys exercise of jurisdiction over the
Appeal.
C. The Labor Secretarys assumption of jurisdiction over the Appeal without notice violated Petitioners right to due
process.
II.
The Court of Appeals gravely erred in affirming the dismissal of the Cancellation Petition despite the mandatory and
unequivocal provisions of the Labor Code and its Implementing Rules.
24

The petition has no merit.
Jurisdiction to review the decision of the Regional Director lies with the BLR. This is clearly provided in the
Implementing Rules of the Labor Code and enunciated by the Court in Abbott. But as pointed out by the CA, the
present case involves a peculiar circumstance that was not present or covered by the ruling in Abbott. In this case,
the BLR Director inhibited himself from the case because he was a former counsel of respondent. Who, then, shall
resolve the case in his place?
In Abbott, the appeal from the Regional Directors decision was directly filed with the Office of the DOLE Secretary,
and we ruled that the latter has no appellate jurisdiction. In the instant case, the appeal was filed by petitioner with
the BLR, which, undisputedly, acquired jurisdiction over the case. Once jurisdiction is acquired by the court, it
remains with it until the full termination of the case.
25

Thus, jurisdiction remained with the BLR despite the BLR Directors inhibition. When the DOLE Secretary resolved
the appeal, she merely stepped into the shoes of the BLR Director and performed a function that the latter could not
himself perform. She did so pursuant to her power of supervision and control over the BLR.
26

Expounding on the extent of the power of control, the Court, in Araneta, et al. v. Hon. M. Gatmaitan, et
al.,
27
pronounced that, if a certain power or authority is vested by law upon the Department Secretary, then such
power or authority may be exercised directly by the President, who exercises supervision and control over the
departments. This principle was incorporated in the Administrative Code of 1987, which defines "supervision and
control" as including the authority to act directly whenever a specific function is entrusted by law or regulation to a
subordinate.
28
Applying the foregoing to the present case, it is clear that the DOLE Secretary, as the person
exercising the power of supervision and control over the BLR, has the authority to directly exercise the quasi-judicial
function entrusted by law to the BLR Director.
It is true that the power of control and supervision does not give the Department Secretary unbridled authority to
take over the functions of his or her subordinate.

Such authority is subject to certain guidelines which are stated in
Book IV, Chapter 8, Section 39(1)(a) of the Administrative Code of 1987.
29
However, in the present case, the DOLE
Secretarys act of taking over the function of the BLR Director was warranted and necessitated by the latters
inhibition from the case and the objective to "maintain the integrity of the decision, as well as the Bureau itself."
30

Petitioner insists that the BLR Directors subordinates should have resolved the appeal, citing the provision under
the Administrative Code of 1987 which states, "in case of the absence or disability of the head of a bureau or office,
his duties shall be performed by the assistant head."
31
The provision clearly does not apply considering that the BLR
Director was neither absent nor suffering from any disability; he remained as head of the BLR. Thus, to dispel any
suspicion of bias, the DOLE Secretary opted to resolve the appeal herself.
Petitioner was not denied the right to due process when it was not notified in advance of the BLR Directors
inhibition and the DOLE Secretarys assumption of the case. Well-settled is the rule that the essence of due process
is simply an opportunity to be heard, or, as applied to administrative proceedings, an opportunity to explain ones
side or an opportunity to seek a reconsideration of the action or ruling complained of.
32
Petitioner had the
opportunity to question the BLR Directors inhibition and the DOLE Secretarys taking cognizance of the case when it
filed a motion for reconsideration of the latters decision. It would be well to state that a critical component of due
process is a hearing before an impartial and disinterested tribunal, for all the elements of due process, like notice
and hearing, would be meaningless if the ultimate decision would come from a partial and biased judge.
33
It was
precisely to ensure a fair trial that moved the BLR Director to inhibit himself from the case and the DOLE Secretary
to take over his function.
Petitioner also insists that respondents registration as a legitimate labor union should be cancelled. Petitioner posits
that once it is determined that a ground enumerated in Article 239 of the Labor Code is present, cancellation of
registration should follow; it becomes the ministerial duty of the Regional Director to cancel the registration of the
labor organization, hence, the use of the word "shall." Petitioner points out that the Regional Director has admitted
in its decision that respondent failed to submit the required documents for a number of years; therefore,
cancellation of its registration should have followed as a matter of course.
We are not persuaded.
Articles 238 and 239 of the Labor Code read:
ART. 238. CANCELLATION OF REGISTRATION; APPEAL
The certificate of registration of any legitimate labor organization, whether national or local, shall be canceled by the
Bureau if it has reason to believe, after due hearing, that the said labor organization no longer meets one or more of
the requirements herein prescribed.
34

ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION.
The following shall constitute grounds for cancellation of union registration:
x x x x
(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of every fiscal
year and misrepresentation, false entries or fraud in the preparation of the financial report itself;
x x x x
(i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau.
35

These provisions give the Regional Director ample discretion in dealing with a petition for cancellation of a unions
registration, particularly, determining whether the union still meets the requirements prescribed by law. It is
sufficient to give the Regional Director license to treat the late filing of required documents as sufficient compliance
with the requirements of the law. After all, the law requires the labor organization to submit the annual financial
report and list of members in order to verify if it is still viable and financially sustainable as an organization so as to
protect the employer and employees from fraudulent or fly-by-night unions. With the submission of the required
documents by respondent, the purpose of the law has been achieved, though belatedly.
We cannot ascribe abuse of discretion to the Regional Director and the DOLE Secretary in denying the petition for
cancellation of respondents registration. The union members and, in fact, all the employees belonging to the
appropriate bargaining unit should not be deprived of a bargaining agent, merely because of the negligence of the
union officers who were responsible for the submission of the documents to the BLR.
Labor authorities should, indeed, act with circumspection in treating petitions for cancellation of union registration,
lest they be accused of interfering with union activities. In resolving the petition, consideration must be taken of the
fundamental rights guaranteed by Article XIII, Section 3 of the Constitution, i.e., the rights of all workers to self-
organization, collective bargaining and negotiations, and peaceful concerted activities. Labor authorities should bear
in mind that registration confers upon a union the status of legitimacy and the concomitant right and privileges
granted by law to a legitimate labor organization, particularly the right to participate in or ask for certification
election in a bargaining unit.
36
Thus, the cancellation of a certificate of registration is the equivalent of snuffing out
the life of a labor organization. For without such registration, it loses - as a rule - its rights under the Labor Code.
37

It is worth mentioning that the Labor Codes provisions on cancellation of union registration and on reportorial
requirements have been recently amended by Republic Act (R.A.) No. 9481, An Act Strengthening the Workers
Constitutional Right to Self-Organization, Amending for the Purpose Presidential Decree No. 442, As Amended,
Otherwise Known as the Labor Code of the Philippines, which lapsed into law on May 25, 2007 and became effective
on June 14, 2007. The amendment sought to strengthen the workers right to self-organization and enhance the
Philippines compliance with its international obligations as embodied in the International Labour Organization (ILO)
Convention No. 87,
38
pertaining to the non-dissolution of workers organizations by administrative authority.
39
Thus,
R.A. No. 9481 amended Article 239 to read:
ART. 239. Grounds for Cancellation of Union Registration.The following may constitute grounds for cancellation of
union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution
and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the
ratification;
(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election
of officers, and the list of voters;
(c) Voluntary dissolution by the members.
R.A. No. 9481 also inserted in the Labor Code Article 242-A, which provides:
ART. 242-A. Reportorial Requirements.The following are documents required to be submitted to the Bureau by
the legitimate labor organization concerned:
(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of members who
took part in the ratification of the constitution and by-laws within thirty (30) days from adoption or ratification of
the constitution and by-laws or amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from election;
(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and
(d) Its list of members at least once a year or whenever required by the Bureau.
Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall
subject the erring officers or members to suspension, expulsion from membership, or any appropriate penalty.
ILO Convention No. 87, which we have ratified in 1953, provides that "workers and employers organizations shall
not be liable to be dissolved or suspended by administrative authority." The ILO has expressed the opinion that the
cancellation of union registration by the registrar of labor unions, which in our case is the BLR, is tantamount to
dissolution of the organization by administrative authority when such measure would give rise to the loss of legal
personality of the union or loss of advantages necessary for it to carry out its activities, which is true in our
jurisdiction. Although the ILO has allowed such measure to be taken, provided that judicial safeguards are in place,
i.e., the right to appeal to a judicial body, it has nonetheless reminded its members that dissolution of a union, and
cancellation of registration for that matter, involve serious consequences for occupational representation. It has,
therefore, deemed it preferable if such actions were to be taken only as a last resort and after exhausting other
possibilities with less serious effects on the organization.
40

The aforesaid amendments and the ILOs opinion on this matter serve to fortify our ruling in this case. We therefore
quote with approval the DOLE Secretarys rationale for denying the petition, thus:
It is undisputed that appellee failed to submit its annual financial reports and list of individual members in
accordance with Article 239 of the Labor Code. However, the existence of this ground should not necessarily lead to
the cancellation of union registration. Article 239 recognizes the regulatory authority of the State to exact
compliance with reporting requirements. Yet there is more at stake in this case than merely monitoring union
activities and requiring periodic documentation thereof.
The more substantive considerations involve the constitutionally guaranteed freedom of association and right of
workers to self-organization. Also involved is the public policy to promote free trade unionism and collective
bargaining as instruments of industrial peace and democracy.1avvphi1 An overly stringent interpretation of the
statute governing cancellation of union registration without regard to surrounding circumstances cannot be allowed.
Otherwise, it would lead to an unconstitutional application of the statute and emasculation of public policy
objectives. Worse, it can render nugatory the protection to labor and social justice clauses that pervades the
Constitution and the Labor Code.
Moreover, submission of the required documents is the duty of the officers of the union. It would be unreasonable
for this Office to order the cancellation of the union and penalize the entire union membership on the basis of the
negligence of its officers. In National Union of Bank Employees vs. Minister of Labor, L-53406, 14 December 1981,
110 SCRA 296, the Supreme Court ruled:
As aptly ruled by respondent Bureau of Labor Relations Director Noriel: "The rights of workers to self-organization
finds general and specific constitutional guarantees. x x x Such constitutional guarantees should not be lightly taken
much less nullified. A healthy respect for the freedom of association demands that acts imputable to officers or
members be not easily visited with capital punishments against the association itself."
At any rate, we note that on 19 May 2000, appellee had submitted its financial statement for the years 1996-1999.
With this submission, appellee has substantially complied with its duty to submit its financial report for the said
period. To rule differently would be to preclude the union, after having failed to meet its periodic obligations
promptly, from taking appropriate measures to correct its omissions. For the record, we do not view with favor
appellees late submission. Punctuality on the part of the union and its officers could have prevented this petition.
41

WHEREFORE, premises considered, the Court of Appeals Decision dated May 30, 2005 and Resolution dated June 4,
2007 are AFFIRMED.
SO ORDERED.
#2 G.R. No. 167141 March 13, 2009
SAMAHAN NG MGA MANGGAGAWA SA SAMMA-LAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI NG ALYANSA
(SAMMA-LIKHA), Petitioner,
vs.
SAMMA CORPORATION, Respondent.
D E C I S I O N
This is a petition for review on certiorari
1
of the August 31, 2004 decision
2
and February 15, 2005 resolution
3
of the
Court of Appeals (CA) in CA-G.R. SP No. 77156.
Petitioner Samahan ng mga Manggagawa sa Samma Lakas sa Industriya ng Kapatirang Haligi ng Alyansa (SAMMA-
LIKHA) filed a petition for certification election on July 24, 2001 in the Department of Labor and Employment (DOLE),
Regional Office IV.
4
It claimed that: (1) it was a local chapter of the LIKHA Federation, a legitimate labor organization
registered with the DOLE; (2) it sought to represent all the rank-and-file employees of respondent Samma
Corporation; (3) there was no other legitimate labor organization representing these rank-and-file employees; (4)
respondent was not a party to any collective bargaining agreement and (5) no certification or consent election had
been conducted within the employer unit for the last 12 months prior to the filing of the petition.
Respondent moved for the dismissal of the petition arguing that (1) LIKHA Federation failed to establish its legal
personality; (2) petitioner failed to prove its existence as a local chapter; (3) it failed to attach the certificate of non-
forum shopping and (4) it had a prohibited mixture of supervisory and rank-and-file employees.
5

In an order dated November 12, 2002, med-arbiter Arturo V. Cosuco ordered the dismissal of the petition on the
following grounds: (1) lack of legal personality for failure to attach the certificate of registration purporting to show
its legal personality; (2) prohibited mixture of rank-and-file and supervisory employees and (3) failure to submit a
certificate of non-forum shopping.
6

Petitioner moved for reconsideration on November 29, 2001. The Regional Director of DOLE Regional Office IV
forwarded the case to the Secretary of Labor. Meanwhile, on December 14, 2002, respondent filed a petition for
cancellation of petitioners union registration in the DOLE Regional Office IV.
7

On January 17, 2003, Acting Secretary Manuel G. Imson, treating the motion for reconsideration as an appeal,
rendered a decision reversing the order of the med-arbiter. He ruled that the legal personality of a union cannot be
collaterally attacked but may only be questioned in an independent petition for cancellation of registration. Thus, he
directed the holding of a certification election among the rank-and-file employees of respondent, subject to the
usual pre-election conference and inclusion-exclusion proceedings.
8

On January 23, 2003 or six days after the issuance of said decision, respondent filed its comment on the motion for
reconsideration of petitioner, asserting that the order of the med-arbiter could only be reviewed by way of appeal
and not by a motion for reconsideration pursuant to Department Order (D.O.) No. 9, series of 1997.
9

On February 6, 2003, respondent filed its motion for reconsideration of the January 17, 2003 decision. In a
resolution dated April 3, 2003, Secretary Patricia A. Sto. Tomas denied the motion.
10

Meanwhile, on April 14, 2003, Crispin D. Dannug, Jr., Officer-in-Charge/Regional Director of DOLE Regional Office IV,
issued a resolution revoking the charter certificate of petitioner as local chapter of LIKHA Federation on the ground
of prohibited mixture of supervisory and rank-and-file employees and non-compliance with the attestation clause
under paragraph 2 of Article 235 of the Labor Code.
11
On May 6, 2003, petitioner moved for the reconsideration of
this resolution.
12

Respondent filed a petition for certiorari
13
in the CA assailing the January 17, 2003 decision and April 3, 2003
resolution of the Secretary of Labor. In a decision dated August 31, 2004, the CA reversed the same.
14
It denied
reconsideration in a resolution dated February 15, 2005. It held that Administrative Circular No. 04-94 which
required the filing of a certificate of non-forum shopping applied to petitions for certification election. It also ruled
that the Secretary of Labor erred in granting the appeal despite the lack of proof of service on respondent. Lastly, it
found that petitioner had no legal standing to file the petition for certification election because its members were a
mixture of supervisory and rank-and-file employees.
15

Hence, this petition.
The issues for our resolution are the following: (1) whether a certificate for non-forum shopping is required in a
petition for certification election; (2) whether petitioners motion for reconsideration which was treated as an
appeal by the Secretary of Labor should not have been given due course for failure to attach proof of service on
respondent and (3) whether petitioner had the legal personality to file the petition for certification election.
Requirement of Certificate
Of Non-Forum Shopping
Is Not Required in a Petition
For Certification Election
In ruling against petitioner, the CA declared that under Administrative Circular No. 04-94,
16
a certificate of non-
forum shopping was required in a petition for certification election. The circular states:
The complaint and other initiatory pleadings referred to and subject of this Circular are the original civil complaint,
counterclaim, cross-claim, third (fourth, etc.) party complaint, or complaint-in-intervention, petition, or
applicationwherein a party asserts his claim for relief. (Emphasis supplied)
According to the CA, a petition for certification election asserts a claim, i.e., the conduct of a certification election.
As a result, it is covered by the circular.
17

We disagree.
The requirement for a certificate of non-forum shopping refers to complaints, counter-claims, cross-claims, petitions
or applications where contending parties litigate their respective positions regarding the claim for relief of the
complainant, claimant, petitioner or applicant. A certification proceeding, even though initiated by a "petition," is
not a litigation but an investigation of a non-adversarial and fact-finding character.
18

Such proceedings are not predicated upon an allegation of misconduct requiring relief, but, rather, are merely of
an inquisitorial nature. The Board's functions are not judicial in nature, but are merely of an investigative character.
The object of the proceedings is not the decision of any alleged commission of wrongs nor asserted deprivation of
rights but is merely the determination of proper bargaining units and the ascertainment of the will and choice of the
employees in respect of the selection of a bargaining representative. The determination of the proceedings does not
entail the entry of remedial orders to redress rights, but culminates solely in an official designation of bargaining
units and an affirmation of the employees' expressed choice of bargaining agent.
19
(Emphasis supplied)
In Pena v. Aparicio,
20
we ruled against the necessity of attaching a certification against forum shopping to a
disbarment complaint. We looked into the rationale of the requirement and concluded that the evil sought to be
avoided is not present in disbarment proceedings.
*The+ rationale for the requirement of a certification against forum shopping is to apprise the Court of the
pendency of another action or claim involving the same issues in another court, tribunal or quasi-judicial agency,
and thereby precisely avoid the forum shopping situation. Filing multiple petitions or complaints constitutes abuse
of court processes, which tends to degrade the administration of justice, wreaks havoc upon orderly judicial
procedure, and adds to the congestion of the heavily burdened dockets of the courts. Furthermore, the rule
proscribing forum shopping seeks to promote candor and transparency among lawyers and their clients in the
pursuit of their cases before the courts to promote the orderly administration of justice, prevent undue
inconvenience upon the other party, and save the precious time of the courts. It also aims to prevent the
embarrassing situation of two or more courts or agencies rendering conflicting resolutions or decisions upon the
same issue.
It is in this light that we take a further look at the necessity of attaching a certification against forum shopping to a
disbarment complaint. It would seem that the scenario sought to be avoided, i.e., the filing of multiple suits and
the possibility of conflicting decisions, rarely happens in disbarment complaints considering that said proceedings
are either "taken by the Supreme Court motu proprio, or by the Integrated Bar of the Philippines (IBP) upon the
verified complaint of any person." Thus, if the complainant in a disbarment case fails to attach a certification against
forum shopping, the pendency of another disciplinary action against the same respondent may still be ascertained
with ease.
21
(Emphasis supplied)
The same situation holds true for a petition for certification election. Under the omnibus rules implementing the
Labor Code as amended by D.O. No. 9,
22
it is supposed to be filed in the Regional Office which has jurisdiction over
the principal office of the employer or where the bargaining unit is principally situated.
23
The rules further provide
that where two or more petitions involving the same bargaining unit are filed in one Regional Office, the same shall
be automatically consolidated.
24
Hence, the filing of multiple suits and the possibility of conflicting decisions will
rarely happen in this proceeding and, if it does, will be easy to discover.
Notably, under the Labor Code and the rules pertaining to the form of the petition for certification election, there is
no requirement for a certificate of non-forum shopping either in D.O. No. 9, series of 1997 or in D.O. No. 40-03,
series of 2003 which replaced the former.
25

Considering the nature of a petition for certification election and the rules governing it, we therefore hold that the
requirement for a certificate of non-forum shopping is inapplicable to such a petition.
Treatment of Motion for Reconsideration as an Appeal
The CA ruled that petitioners motion for reconsideration, which was treated as an appeal by the Secretary of Labor,
should not have been given due course for lack of proof of service in accordance with the implementing rules as
amended by D.O. No. 9:
Section 12. Appeal; finality of decision. The decision of the Med-Arbiter may be appealed to the Secretary for any
violation of these Rules. Interloculory orders issued by the Med-Arbiter prior to the grant or denial of the petition,
including order granting motions for intervention issued after an order calling for a certification election, shall not be
appealable. However, any issue arising therefrom may be raised in the appeal on the decision granting or denying
the petition.
The appeal shall be under oath and shall consist of a memorandum of appeal specifically stating the grounds relied
upon by the appellant with the supporting arguments and evidence. The appeal shall be deemed not filed unless
accompanied by proof of service thereof to appellee.
26
(Emphasis supplied)
In accepting the appeal, the Secretary of Labor stated:
*Petitioners+ motion for reconsideration of the Med-Arbiters Order dated November 12, 2002 was verified under
oath by *petitioners+ president Gil Dispabiladeras before Notary Public Wilfredo A. Ruiz on 29 November 2002, and
recorded in the Notarial Register under Document No. 186, Page No. 38, Book V, series of 2002. On page 7 of the
said motion also appears the notation "copy of respondent to be delivered personally with the name and signature
of one Rosita Simon, 11/29/02." The motion contained the grounds and arguments relied upon by [petitioner] for
the reversal of the assailed Order. Hence, the motion for reconsideration has complied with the formal requisites of
an appeal.
The signature of Rosita Simon appearing on the last page of the motion can be considered as compliance with the
required proof of service upon respondent. Rosita Simons employment status was a matter that should have been
raised earlier by [respondent]. But [respondent] did not question the same and slept on its right to oppose or
comment on *petitioners+ motion for reconsideration. It cannot claim that it was unaware of the filing of the
appeal by [petitioner], because a copy of the indorsement of the entire records of the petition to the Office of the
Secretary "in view of the memorandum of appeal filed by Mr. Jesus B. Villamor" was served upon the employer and
legal counsels Atty. Ismael De Guzman and Atty. Anatolio Sabillo at the Samma Corporation Office, Main Avenue,
PEZA, Rosario, Cavite on December 5, 2002.
27
(Emphasis supplied)
The motion for reconsideration was properly treated as an appeal because it substantially complied with the formal
requisites of the latter. The lack of proof of service was not fatal as respondent had actually received a copy of the
motion. Consequently, it had the opportunity to oppose the same. Under these circumstances, we find that the
demands of substantial justice and due process were satisfied.
We stress that rules of procedure are interpreted liberally to secure a just, speedy and inexpensive disposition of
every action. They should not be applied if their application serves no useful purpose or hinders the just and speedy
disposition of cases. Specifically, technical rules and objections should not hamper the holding of a certification
election wherein employees are to select their bargaining representative. A contrary rule will defeat the declared
policy of the State1avvphi1.zw+
to promote the free and responsible exercise of the right to self-organization through the establishment of
asimplified mechanism for the speedy registration of labor organizations and workers associations,determination
of representation status, and resolution of intra and inter-union disputes.
28
xxx (Emphasis supplied)
Legal Personality of Petitioner
Petitioner argues that the erroneous inclusion of one supervisory employee in the union of rank-and-file employees
was not a ground to impugn its legitimacy as a legitimate labor organization which had the right to file a petition for
certification election.
We agree.
LIKHA was granted legal personality as a federation under certificate of registration no. 92-1015-032-11638-FED-LC.
Subsequently, petitioner as its local chapter was issued its charter certificate no. 2-01.
29
With certificates of
registration issued in their favor, they are clothed with legal personality as legitimate labor organizations:
Section 5. Effect of registration. The labor organization or workers association shall be deemed registered and
vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot
thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation in
accordance with these Rules.
30

- 0 -
Section 3. Acquisition of legal personality by local chapter. - A local/chapter constituted in accordance with Section 1
of this Rule shall acquire legal personality from the date of filing of the complete documents enumerated therein.
Upon compliance with all the documentary requirements, the Regional Office or Bureau of Labor Relations shall
issue in favor of the local/chapter a certificate indicating that it is included in the roster of legitimate labor
organizations.
31

Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an
independent petition for cancellation of certificate of registration.
32
Unless petitioners union registration is
cancelled in independent proceedings, it shall continue to have all the rights of a legitimate labor organization,
including the right to petition for certification election.
Furthermore, the grounds for dismissal of a petition for certification election based on the lack of legal personality of
a labor organization are the following: (a) petitioner is not listed by the Regional Office or the Bureau of Labor
Relations in its registry of legitimate labor organizations or (b) its legal personality has been revoked or cancelled
with finality in accordance with the rules.
33

As mentioned, respondent filed a petition for cancellation of the registration of petitioner on December 14, 2002. In
a resolution dated April 14, 2003, petitioners charter certificate was revoked by the DOLE. But on May 6, 2003,
petitioner moved for the reconsideration of this resolution. Neither of the parties alleged that this resolution
revoking petitioners charter certificate had attained finality. However, in this petition, petitioner prayed that its
charter certificate be "reinstated in the roster of active legitimate labor [organizations]."
34
This cannot be granted
here. To repeat, the proceedings on a petition for cancellation of registration are independent of those of a petition
for certification election. This case originated from the latter. If it is shown that petitioners legal personality had
already been revoked or cancelled with finality in accordance with the rules, then it is no longer a legitimate labor
organization with the right to petition for a certification election.
A Final Note
Respondent, as employer, had been the one opposing the holding of a certification election among its rank-and-file
employees. This should not be the case. We have already declared that, in certification elections, the employer is a
bystander; it has no right or material interest to assail the certification election.
35

[This] Court notes that it is petitioner, the employer, which has offered the most tenacious resistance to the holding
of a certification election among its monthly-paid rank-and-file employees. This must not be so, for the choice of a
collective bargaining agent is the sole concern of the employees. The only exception to this rule is where the
employer has to file the petition for certification election pursuant to Article 258 of the Labor Code because it was
requested to bargain collectively, which exception finds no application in the case before us. Its role in a certification
election has aptly been described in Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano, as that of
a mere bystander. It has no legal standing in a certification election as it cannot oppose the petition or appeal the
Med-Arbiter's orders related thereto. . .
36

WHEREFORE, the petition is hereby GRANTED. Let the records of the case be remanded to the office of origin, the
Regional Office IV of the Department of Labor and Employment, for determination of the status of petitioners legal
personality. If petitioner is still a legitimate labor organization, then said office shall conduct a certification election
subject to the usual pre-election conference.
SO ORDERED.
#3 G.R. No. 157117 November 20, 2006
COASTAL SUBIC BAY TERMINAL, INC., Petitioner,
vs.
DEPARTMENT OF LABOR and EMPLOYMENT OFFICE OF THE SECRETARY, COASTAL SUBIC BAY TERMINAL, INC.
SUPERVISORY UNION-APSOTEU, and COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-
TUCP, Respondents.
D E C I S I O N
QUISUMBING, J.:
For review on certiorari is the Court of Appeals Decision
1
dated August 31, 2001, in CA-G.R. SP No. 54128 and the
Resolution
2
dated February 5, 2003, denying petitioners motion for reconsideration. The Court of Appeals had
affirmed the Decision
3
dated March 15, 1999 of the Secretary of the Department of Labor and Employment (DOLE)
reversing the Mediator Arbiters dismissal of private respondents petitions for certification election.
The facts are as follows:
On July 8, 1998, private respondents Coastal Subic Bay Terminal, Inc. Rank-and-File Union (CSBTI-RFU) and Coastal
Subic Bay Terminal, Inc. Supervisory Union (CSBTI-SU) filed separate petitions for certification election before Med-
Arbiter Eladio de Jesus of the Regional Office No. III. The rank-and-file union insists that it is a legitimate labor
organization having been issued a charter certificate by the Associated Labor Union (ALU), and the supervisory union
by the Associated Professional, Supervisory, Office and Technical Employees Union (APSOTEU). Private respondents
also alleged that the establishment in which they sought to operate was unorganized.
Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions for certification election alleging that the
rank-and-file union and supervisory union were not legitimate labor organizations, and that the proposed bargaining
units were not particularly described.
Without ruling on the legitimacy of the respondent unions, the Med-Arbiter dismissed, without prejudice to refiling,
both petitions which had been consolidated. The Med-Arbiter held that the ALU and APSOTEU are one and the same
federation having a common set of officers. Thus, the supervisory and the rank-and-file unions were in effect
affiliated with only one federation.
4

The Med-Arbiter ruled as follows:
Viewed in the light of all the foregoing, this Office finds the simultaneous filing of the instant petitions to be invalid
and unwarranted. Consequently, this Office has no recourse but to dismiss both petitions without prejudice to the
refiling of either.
WHEREFORE, PREMISES CONSIDERED, let the instant petitions be, as they are hereby DISMISSED.
SO ORDERED.
5

Both parties appealed to the Secretary of Labor and Employment, who reversed the decision of the Med-Arbiter.
The Secretary thru Undersecretary R. Baldoz, ruled that CSBTI-SU and CSBTI-RFU have separate legal personalities to
file their separate petitions for certification election. The Secretary held that APSOTEU is a legitimate labor
organization because it was properly registered pursuant to the 1989 Revised Rules and Regulations implementing
Republic Act No. 6715, the rule applicable at the time of its registration. It further ruled that ALU and APSOTEU are
separate and distinct labor unions having separate certificates of registration from the DOLE. They also have
different sets of locals. The Secretary declared CSBTI-RFU and CSBTI-SU as legitimate labor organizations having
been chartered respectively by ALU and APSOTEU after submitting all the requirements with the Bureau of Labor
Relations (BLR). Accordingly, the Secretary ordered the holding of separate certification election, viz:
WHEREFORE, the decision of the Med-Arbiter, Regional Office No. III is hereby REVERSED. Let separate certification
elections be conducted immediately among the appropriate employees of CSBTI, after the usual pre-election
conference, with the following choices:
I. For all rank and file employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP; and
2. NO UNION.
II. For all supervisory employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES UNION-APSOTEU; and
2. NO UNION.
The latest payroll of the employer, including its payrolls for the last three months immediately preceding the
issuance of this decision, shall be the basis for determining the qualified list of voters.
SO DECIDED.
6

The motion for reconsideration was also denied.
7

On appeal, the Court of Appeals affirmed the decision of the Secretary.
8
It held that there was no grave abuse of
discretion on the part of the Secretary; its findings are supported by evidence on record; and thus should be
accorded with respect and finality.
9

The motion for reconsideration was likewise denied.
10
Hence, the instant petition by the company anchored on the
following grounds:
I
THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON THE "1989 REVISED RULES AND REGULATIONS
IMPLEMENTING RA 6715" AS BASIS TO RECOGNIZE PRIVATE RESPONDENT APSOTEUS REGISTRATION BY THE DOLE
REGIONAL DIRECTOR.
II
THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED PUBLIC RESPONDENTS APPLICATION OF THE
PRINCIPLE OF STARE DECISIS TO HASTILY DISPOSE OF THE LEGAL PERSONALITY ISSUE OF APSOTEU.
III
THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN ACCORD WITH LAW AND JURISPRUDENCE WHEN IT
AFFIRMED PUBLIC RESPONDENTS APPLICATION OF THE "UNION AUTONOMY" THEORY.
IV
IN AFFIRMING PUBLIC RESPONDENTS FINDING THAT PRIVATE RESPONDENTS ARE "SEPARATE FEDERATIONS," THE
HONORABLE COURT OF APPEALS:
(1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING NATURE OF A MED-ARBITERS FACTUAL FINDINGS; AND
(2) DISREGARDED EVIDENCE ON RECORD OF "ILLEGAL COMMINGLING."
11

Plainly, the issues are (1) Can the supervisory and the rank-and-file unions file separate petitions for certification
election?; (2) Was the Secretarys decision based on stare decisis correct?; and (3) Were private respondents
engaged in commingling?
The issue on the status of the supervisory union CSBTI-SU depends on the status of APSOTEU, its mother federation.
Petitioner argues that APSOTEU improperly secured its registration from the DOLE Regional Director and not from
the BLR; that it is the BLR that is authorized to process applications and issue certificates of registration in
accordance with our ruling in Phil. Association of Free Labor Unions v. Secretary of Labor;
12
that the certificates of
registration issued by the DOLE Regional Director pursuant to the rules are questionable, and possibly even void ab
initio for being ultra vires; and that the Court of Appeals erred when it ruled that the law applicable at the time of
APSOTEUs registration was the 1989 Revised Implementing Rules and Regulations of Rep. Act No. 6715.
Petitioner insists that APSOTEU lacks legal personality, and its chartered affiliate CSBTI-SU cannot attain the status of
a legitimate labor organization to file a petition for certification election. It relies on Villar v. Inciong,
13
where we held
therein that Amigo Employees Union was not a duly registered independent union absent any record of its
registration with the Bureau.
Pertinent is Article 235
14
of the Labor Code which provides that applications for registration shall be acted upon by
the Bureau. "Bureau" as defined under the Labor Code means the BLR and/or the Labor Relations Division in the
Regional Offices of the Department of Labor.
15
Further, Section 2, Rule II, Book V of the 1989 Revised Implementing
Rules of the Labor Code (Implementing Rules) provides that:
Section 2. Where to file application; procedure Any national labor organization or labor federation or local union
may file an application for registration with the Bureau or the Regional Office where the applicants principal offices
is located. The Bureau or the Regional Office shall immediately process and approve or deny the application. In case
of approval, the Bureau or the Regional Office shall issue the registration certificate within thirty (30) calendar days
from receipt of the application, together with all the requirements for registration as hereinafter provided.
16

The Implementing Rules specifically Section 1, Rule III of Book V, as amended by Department Order No. 9, thus:
SECTION 1. Where to file applications. The application for registration of any federation, national or industry
union or trade union center shall be filed with the Bureau. Where the application is filed with the Regional Office,
the same shall be immediately forwarded to the Bureau within forty-eight (48) hours from filing thereof, together
with all the documents supporting the registration.
The applications for registration of an independent union shall be filed with and acted upon by the Regional Office
where the applicants principal office is located .
x x x x
The DOLE issued Department Order No. 40-03, which took effect on March 15, 2003, further amending Book V of
the above implementing rules. The new implementing rules explicitly provide that applications for registration of
labor organizations shall be filed either with the Regional Office or with the BLR.
17

Even after the amendments, the rules did not divest the Regional Office and the BLR of their jurisdiction over
applications for registration by labor organizations. The amendments to the implementing rules merely specified
that when the application was filed with the Regional Office, the application would be acted upon by the BLR.
The records in this case showed that APSOTEU was registered on March 1, 1991. Accordingly, the law applicable at
that time was Section 2, Rule II, Book V of the Implementing Rules, and not Department Order No. 9 which took
effect only on June 21, 1997. Thus, considering further that APSOTEUs principal office is located in Diliman, Quezon
City, and its registration was filed with the NCR Regional Office, the certificate of registration is valid.
The petitioner misapplied Villar v. Inciong.
18
In said case, there was no record in the BLR that Amigo Employees
Union was registered.
19

Did the Court of Appeals err in its application of stare decisis when it upheld the Secretarys ruling that APSOTEU is a
legitimate labor organization and its personality cannot be assailed unless in an independent action for cancellation
of registration certificate?
20

We think not.
Section 5, Rule V, Book V of the Implementing Rules states:
Section 5. Effect of registration The labor organization or workers association shall be deemed registered and
vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot
thereafter be subject to collateral attack, but maybe questioned only in an independent petition for cancellation in
accordance with these Rules.
21

Thus, APSOTEU is a legitimate labor organization and has authority to issue charter to its affiliates.
22
It may issue a
local charter certificate to CSBTI-SU and correspondingly, CSBTI-SU is legitimate.
Are ALU, a rank-and-file union and APSOTEU, a supervisory union one and the same because of the commonalities
between them? Are they commingled?
The petitioner contends that applying by analogy, the doctrine of piercing the veil of corporate fiction, APSOTEU and
ALU are the same federation. Private respondents disagree.
First, as earlier discoursed, once a labor union attains the status of a legitimate labor organization, it continues as
such until its certificate of registration is cancelled or revoked in an independent action for cancellation.
23
In
addition, the legal personality of a labor organization cannot be collaterally attacked.
24
Thus, when the personality of
the labor organization is questioned in the same manner the veil of corporate fiction is pierced, the action partakes
the nature of a collateral attack. Hence, in the absence of any independent action for cancellation of registration
against either APSOTEU or ALU, and unless and until their registrations are cancelled, each continues to possess a
separate legal personality. The CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct and separate
federations, despite the commonalities of APSOTEU and ALU.
Under the rules implementing the Labor Code, a chartered local union acquires legal personality through the charter
certificate issued by a duly registered federation or national union, and reported to the Regional Office in
accordance with the rules implementing the Labor Code.
25
A local union does not owe its existence to the federation
with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its
members. Mere affiliation does not divest the local union of its own personality, neither does it give the mother
federation the license to act independently of the local union. It only gives rise to a contract of agency, where the
former acts in representation of the latter.
26
Hence, local unions are considered principals while the federation is
deemed to be merely their agent.
27
As such principals, the unions are entitled to exercise the rights and privileges of
a legitimate labor organization, including the right to seek certification as the sole and exclusive bargaining agent in
the appropriate employer unit.1wphi1
A word of caution though, under Article 245 of the Labor Code,
28
supervisory employees are not eligible for
membership in a labor union of rank-and-file employees. The supervisory employees are allowed to form their own
union but they are not allowed to join the rank-and-file union because of potential conflicts of interest.
29
Further, to
avoid a situation where supervisors would merge with the rank-and-file or where the supervisors labor union would
represent conflicting interests, a local supervisors union should not be allowed to affiliate with the national
federation of unions of rank-and-file employees where that federation actively participates in the union activity
within the company.
30
Thus, the limitation is not confined to a case of supervisors wanting to join a rank-and-file
union. The prohibition extends to a supervisors local union applying for membership in a national federation the
members of which include local unions of rank-and-file employees.
31
In De La Salle University Medical Center and
College of Medicine v. Laguesma, we reiterated the rule that for the prohibition to apply, it is not enough that the
supervisory union and the rank-and-file union are affiliated with a single federation. In addition, the supervisors
must have direct authority over the rank-and-file employees.
32

In the instant case, the national federations that exist as separate entities to which the rank-and-file and supervisory
unions are separately affiliated with, do have a common set of officers. In addition, APSOTEU, the supervisory
federation, actively participates in the CSBTI-SU while ALU, the rank-and-file federation, actively participates in the
CSBTI-RFU, giving occasion to possible conflicts of interest among the common officers of the federation of rank-
and-file and the federation of supervisory unions. For as long as they are affiliated with the APSOTEU and ALU, the
supervisory and rank-and-file unions both do not meet the criteria to attain the status of legitimate labor
organizations, and thus could not separately petition for certification elections.1wphi1
The purpose of affiliation of the local unions into a common enterprise is to increase the collective bargaining power
in respect of the terms and conditions of labor.
33
When there is commingling of officers of a rank-and-file union with
a supervisory union, the constitutional policy on labor is circumvented. Labor organizations should ensure the
freedom of employees to organize themselves for the purpose of leveling the bargaining process but also to ensure
the freedom of workingmen and to keep open the corridor of opportunity to enable them to do it for themselves.
WHEREFORE, the petition is GRANTED. The Court of Appeals Decision dated August 31, 2001, in CA-G.R. SP No.
54128 and the Resolution dated February 5, 2003 are SET ASIDE. The decision of the Med-Arbiter is
herebyAFFIRMED.
SO ORDERED.
#4 G.R. No. 102084 August 12, 1998
DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE, petitioner,
vs.
HON. BIENVENIDO E. LAGUESMA, Undersecretary of Labor and Employment; ROLANDO S. DE LA CRUZ, Med-
Arbiter Regional Office No. IV, DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE
SUPERVISORY UNION-FEDERATION OF FREE WORKERS, respondents.

MENDOZA, J.:
Petitioner De La Salle University Medical Center and College of Medicine (DLSUMCCM) is a hospital and medical
school at Dasmarias, Cavite. Private respondent Federation of Free Workers-De La Salle University Medical Center
and College of Medicine Supervisory Union Chapter (FFW-DLSUMCCMSUC), on the other hand, is a labor
organization composed of the supervisory employees of petitioner DLSUMCCM.
On April 17, 1991, the Federation of Free Workers (FFW), a national federation of labor unions, issued a certificate
to private respondent FFW-DLSUMCCMSUC recognizing it as a local chapter. On the same day, it filed on behalf of
private respondent FFW-DLSUMCCMSUC a petition for certification election among the supervisory employees of
petitioner DLSUMCCM. Its petition was opposed by petitioner DLSUMCCM on the grounds that several employees
who signed the petition for certification election were managerial employees and that the FFW-DLSUMCCMSUC was
composed of both supervisory and rank-and-file employees in the company.
1

In its reply dated May 29, 1991, private respondent FFW-DLSUMCCMSUC denied petitioner's allegations. It
contended that
2. Herein petition seeks for the holding of a certification election among the supervisory employees of herein
respondent. It does not intend to include managerial employees.
xxx xxx xxx
6. It is not true that supervisory employees are joining the rank-and-file employees' union. While it is true that both
regular rank-and-file employees and supervisory employees of herein respondent have affiliated with FFW, yet there
are two separate unions organized by FFW. The supervisory employees have a separate charter certificate issued by
FFW.
2

On July 5, 1991, respondent Rolando S. de la Cruz, med-arbiter of the Department of Labor and Employment
Regional Office No. IV, issued an order granting respondent union's petition for certification election. He said;
. . . [petitioner] . . . claims that based on the job descriptions which will be presented at the hearing, the covered
employees who are considered managers occupy the positions of purchasing officers, personnel officers, property
officers, cashiers, heads of various sections and the like.
[Petitioner] also argues that assuming that some of the employees concerned are not managerial but mere
supervisory employees, the Federation of Free Workers (FFW) cannot extend a charter certificate to this group of
employees without violating the express provision of Article 245 which provides that "supervisory employees shall
not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own" because the FFW had similarly issued a charter certificate to its rank-and-
file employees.
xxx xxx xxx
In its position paper, [petitioner] stated that most, if not all, of the employees listed in . . . the petition are
considered managerial employees, thereby admitting that it has supervisory employees who are undoubtedly
qualified to join or form a labor organization of their own. The record likewise shows that [petitioner] promised to
present the job descriptions of the concerned employees during the hearing but failed to do so. Thus, this office has
no basis in determining at this point in time who among them are considered managerial or supervisory employees.
At any rate, there is now no question that [petitioner] has in its employ supervisory employees who are qualified to
join or form a labor union. Consequently, this office is left with no alternative but to order the holding of
certification election pursuant to Article 257 of the Labor Code, as amended, which mandates the holding of
certification election if a petition is filed by a legitimate labor organization involving an unorganized establishment,
as in the case of herein respondent.
As to the allegation of [petitioner] that the act of the supervisory employees in affiliating with FFW to whom the
rank-and-file employees are also affiliated is violative of Article 245 of the Labor Code, suffice it to state that the two
groups are considered separate bargaining units and local chapters of FFW. They are, for all intents and purposes,
separate with each other and their affiliation with FFW would not make them members of the same labor union.
This must be the case because it is settled that the locals are considered the basic unit or principal with the labor
federation assuming the role of an agent. The mere fact, therefore, that they are represented by or under the same
agent is of no moment. They are still considered separate with each other.
3

On July 30, 1991, petitioner DLSUMCCM appealed to the Secretary of Labor and Employment, citing substantially
the same arguments it had raised before the med-arbiter. However, its appeal was dismissed. In his resolution,
dated August 30, 1991, respondent Undersecretary of Labor and Employment Bienvenido E. Laguesma found the
evidence presented by petitioner DLSUMCCM concerning the alleged managerial status of several employees to be
insufficient. He also held that, following the ruling of this Court in Adamson & Adamson, Inc. v. CIR,
4
unions formed
independently by supervisory and rank-and-file employees of a company may legally affiliate with the same national
federation.
Petitioner moved for a reconsideration but its motion was denied. In his order dated September 19, 1991,
respondent Laguesma stated:
We reviewed the records once more, and find that the issues and arguments adduced by movant have been
squarely passed upon in the Resolution sought to be reconsidered. Accordingly, we find no legal justification to alter,
much less set aside, the aforesaid resolution. Perforce, the motion for reconsideration must fail.
WHEREFORE, the instant motion for reconsideration is hereby denied for lack of merit and the resolution of this
office dated 30 August 1991 STANDS.
No further motions of a similar nature shall hereinafter be entertained.
5

Hence, this petition for certiorari.
Petitioner DLSUMCCM contends that respondent Laguesma gravely abused his discretion. While it does not
anymore insist that several of those who joined the petition for certification election are holding managerial
positions in the company, petitioner nonetheless pursues the question whether unions formed independently by
supervisory and rank-and-file employees of a company may validly affiliate with the same national federation. With
respect to this question, it argues:
THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E. LAGUESMA, UNDERSECRETARY OF LABOR AND
EMPLOYMENT, IN A CAPRICIOUS, ARBITRARY AND WHIMSICAL EXERCISE OF POWER ERRED AND COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO ACTING WITHOUT OR IN EXCESS OF JURISDICTION WHEN HE DENIED
THE PETITIONER'S APPEAL AND ORDERED THE HOLDING OF A CERTIFICATION ELECTION AMONG THE MEMBERS OF
THE SUPERVISORY UNION EMPLOYED IN PETITIONER'S COMPANY DESPITE THE FACT THAT SAID SUPERVISORY
UNION WAS AFFILIATED WITH THE FEDERATION OF FREE WORKERS TO WHICH THE RANK-AND-FILE EMPLOYEES OF
THE SAME COMPANY ARE LIKEWISE AFFILIATED, CONTRARY TO THE EXPRESS PROVISIONS OF ARTICLE 245 OF THE
LABOR CODE, AS AMENDED.
6

The contention has no merit.
Supervisory employees have the right to self-organization as do other classes of employees save only managerial
ones. The Constitution states that "the right of the people, including those employed in the public and private
sectors, to form unions, associations or societies for purposes not contrary to law, shall not be abridged."
7
As we
recently held in United Pepsi-Cola Supervisory Union v. Loguesma,
8
the framers of the Constitution intended, by this
provision, to restore the right of supervisory employees to self-organization which had been withdrawn from them
during the period of martial law. Thus:
Commissioner Lerum sought to amend the draft of what was later to become Art. 111, 8 of the present
Constitution:
xxx xxx xxx
MR. LERUM. . . . Also, we have unions of supervisory employees and of security guards. But what is tragic about this
is that after the 1973 Constitution was approved and in spite of an express recognition of the right to organize in
P.D. No. 442, known as the Labor Code, the right of government workers, supervisory employees and security
guards to form unions was abolished.
xxx xxx xxx
We are afraid that without any corresponding provision covering the private sector, the security guards, the
supervisory employees . . . will still be excluded and that is the purpose of this amendment.
xxx xxx xxx
In sum, Lerum's proposal to amend Art. III, 8 of the draft Constitution by including labor unions in the guarantee of
organizational right should be taken in the context of statements that his aim was the removal of the statutory ban
against security guards and supervisory employees joining labor organizations. The approval by the Constitutional
Commission of his proposal can only mean, therefore, that the Commission intended the absolute right to organize
of government workers, supervisory employees, and security guards to be constitutionally guaranteed.
9

Conformably with the constitutional mandate, Art. 245 of the Labor Code now provides for the right of supervisory
employees to self-organization, subject to the limitation that they cannot join an organization of rank-and-file
employees:
Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees
but may join, assist or form separate labor organizations of their own.
The reason for the segregation of supervisory and rank-and-file employees of a company with respect to the
exercise of the right to self-organization is the difference in their interests. Supervisory employees are more closely
identified with the employer than with the rank-and-file employees. If supervisory and rank-and-file employees in a
company are allowed to form a single union, the conflicting interests of these groups impair their relationship and
adversely affect discipline, collective bargaining and strikes.
10
These consequences can obtain not only in cases
where supervisory and rank-and-file employees in the same company belong to a single union but also where unions
formed independently by supervisory and rank-and-file employees of a company are allowed to affiliate with the
same national federation. Consequently, this Court has held in Atlas Lithographic Services Inc. v. Laguesma
11
that
To avoid a situation where supervisors would merge with the rank-and-file or where the supervisors' labor
organization would represent conflicting interests, then a local supervisors' union should not be allowed to affiliate
with a national federation of unions of rank-and-file employees where that federation actively participates in union
activities in the company.
As we explained in that case, however, such a situation would obtain only where two conditions concur: First, the
rank-and-file employees are directly under the authority of supervisory employees.
12
Second, the national
federation is actively involved in union activities in the company.
13
Indeed, it is the presence of these two conditions
which distinguished Atlas Lithographic Services, Inc. v. Laguesma from Adamson & Adamson, Inc. v. CIR
14
where a
different conclusion was reached.
The affiliation of two local unions in a company with the same national federation is not by itself a negation of their
independence since in relation to the employer, the local unions are considered as the principals, while the
federation is deemed to be merely their agent. This conclusion is in accord with the policy that any limitation on the
exercise by employees of the right to self-organization guaranteed in the Constitution must be construed strictly.
Workers should be allowed the practice of this freedom to the extent recognized in the fundamental law. As held
in Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.:
15

The locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power
between the employer and their employee members in the economic struggle for the fruits of the joint productive
effort of labor and capital; and the association of locals into the national union . . . was in furtherance of the same
end. These associations are consensual entities capable of entering into such legal relations with their members. The
essential purpose was the affiliation of the local unions into a common enterprise to increase by collective action the
common bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of
association, free to serve their own and the common interest of all, . . . and free also to renounce the affiliation for
mutual welfare upon the terms laid down in the agreement which brought it to existence.
16

The questions in this case, therefore, are whether the rank-and-file employees of petitioner DLSUMCCM who
compose a labor union are directly under the supervisory employees whose own union is affiliated with the same
national federation (Federation of Free Workers) and whether such national federation is actively involved in union
activities in the company so as to make the two unions in the same company, in reality, just one union.
Although private respondent FFW-DLSUMCCMSUC and another union composed of rank-and-file employees of
petitioner DLSUMCCM are indeed affiliated with the same national federation, the FFW, petitioner DLSUMCCM has
not presented any evidence showing that the rank-and-file employees composing the other union are directly under
the authority of the supervisory employees. As held in Adamson & Adamson, Inc. v. CIR,
17
the fact that the two
groups of workers are employed by the same company and the fact that they are affiliated with a common national
federation are not sufficient to justify the conclusion that their organizations are actually just one. Their immediate
professional relationship must be established. To borrow the language of Adamson & Adamson, Inc. v. CIR:
18

We find without merit the contention of petitioner that if affiliation will be allowed, only one union will in fact
represent both supervisors and rank-and-file employees of the petitioner; that there would be an indirect affiliation
of supervisors and rank-and-file employees with one labor organization; that there would be a merging of the two
bargaining units; and that the respondent union will lose its independence because it becomes an alter ego of the
federation.
19

Mention has already been made of the fact that the petition for certification election in this case was filed by the
FFW on behalf of the local union. This circumstance, while showing active involvement by the FFW in union activities
at the company, is by itself insufficient to justify a finding of violation of Art. 245 since there is no proof that the
supervisors who compose the local union have direct authority over the rank-and-file employees composing the
other local union which is also affiliated with the FFW. This fact differentiates the case from Atlas Lithographic
Services. Inc. v. Laguesma,
20
in which, in addition to the fact that the petition for certification election had been filed
by the national federation, it was shown that the rank-and-file employees were directly under the supervisors
organized by the same federation.
It follows that respondent labor officials did not gravely abuse their discretion.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
#5
G.R. No. 169717 March 16, 2011
SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR
EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS JERRY VICTORIO-Union President,Petitioner,
vs.
CHARTER CHEMICAL and COATING CORPORATION, Respondent.
D E C I S I O N
DEL CASTILLO, J.:
The right to file a petition for certification election is accorded to a labor organization provided that it complies with
the requirements of law for proper registration. The inclusion of supervisory employees in a labor organization
seeking to represent the bargaining unit of rank-and-file employees does not divest it of its status as a legitimate
labor organization. We apply these principles to this case.
This Petition for Review on Certiorari seeks to reverse and set aside the Court of Appeals March 15, 2005
Decision
1
in CA-G.R. SP No. 58203, which annulled and set aside the January 13, 2000 Decision
2
of the Department of
Labor and Employment (DOLE) in OS-A-6-53-99 (NCR-OD-M-9902-019) and the September 16, 2005
Resolution
3
denying petitioner unions motion for reconsideration.
Factual Antecedents
On February 19, 1999, Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for
Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-
file employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation Arbitration
Unit of the DOLE, National Capital Region.
On April 14, 1999, respondent company filed an Answer with Motion to Dismiss
4
on the ground that petitioner union
is not a legitimate labor organization because of (1) failure to comply with the documentation requirements set by
law, and (2) the inclusion of supervisory employees within petitioner union.
5

Med-Arbiters Ruling
On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a Decision
6
dismissing the petition for certification
election. The Med-Arbiter ruled that petitioner union is not a legitimate labor organization because the Charter
Certificate, "Sama-samang Pahayag ng Pagsapi at Authorization," and "Listahan ng mga Dumalo sa Pangkalahatang
Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas" were not executed under oath and certified by the
union secretary and attested to by the union president as required by Section 235 of the Labor Code
7
in relation to
Section 1, Rule VI of Department Order (D.O.) No. 9, series of 1997. The union registration was, thus, fatally
defective.
The Med-Arbiter further held that the list of membership of petitioner union consisted of 12 batchman, mill
operator and leadman who performed supervisory functions. Under Article 245 of the Labor Code, said supervisory
employees are prohibited from joining petitioner union which seeks to represent the rank-and-file employees of
respondent company.
As a result, not being a legitimate labor organization, petitioner union has no right to file a petition for certification
election for the purpose of collective bargaining.
Department of Labor and Employments Ruling
On July 16, 1999, the DOLE initially issued a Decision
8
in favor of respondent company dismissing petitioner unions
appeal on the ground that the latters petition for certification election was filed out of time. Although the DOLE
ruled, contrary to the findings of the Med-Arbiter, that the charter certificate need not be verified and that there
was no independent evidence presented to establish respondent companys claim that some members of petitioner
union were holding supervisory positions, the DOLE sustained the dismissal of the petition for certification after it
took judicial notice that another union, i.e., Pinag-isang Lakas Manggagawa sa Charter Chemical and Coating
Corporation, previously filed a petition for certification election on January 16, 1998. The Decision granting the said
petition became final and executory on September 16, 1998 and was remanded for immediate implementation.
Under Section 7, Rule XI of D.O. No. 9, series of 1997, a motion for intervention involving a certification election in
an unorganized establishment should be filed prior to the finality of the decision calling for a certification election.
Considering that petitioner union filed its petition only on February 14, 1999, the same was filed out of time.
On motion for reconsideration, however, the DOLE reversed its earlier ruling. In its January 13, 2000 Decision, the
DOLE found that a review of the records indicates that no certification election was previously conducted in
respondent company. On the contrary, the prior certification election filed by Pinag-isang Lakas Manggagawa sa
Charter Chemical and Coating Corporation was, likewise, denied by the Med-Arbiter and, on appeal, was dismissed
by the DOLE for being filed out of time. Hence, there was no obstacle to the grant of petitioner unions petition for
certification election, viz:
WHEREFORE, the motion for reconsideration is hereby GRANTED and the decision of this Office dated 16 July 1999
is MODIFIED to allow the certification election among the regular rank-and-file employees of Charter Chemical and
Coating Corporation with the following choices:
1. Samahang Manggagawa sa Charter Chemical-Solidarity of Unions in the Philippines for Empowerment and Reform
(SMCC-SUPER); and
2. No Union.
Let the records of this case be remanded to the Regional Office of origin for the immediate conduct of a certification
election, subject to the usual pre-election conference.
SO DECIDED.
9

Court of Appeals Ruling
On March 15, 2005, the CA promulgated the assailed Decision, viz:
WHEREFORE, the petition is hereby GRANTED. The assailed Decision and Resolution dated January 13, 2000 and
February 17, 2000 are hereby [ANNULLED] and SET ASIDE.
SO ORDERED.
10

In nullifying the decision of the DOLE, the appellate court gave credence to the findings of the Med-Arbiter that
petitioner union failed to comply with the documentation requirements under the Labor Code. It, likewise, upheld
the Med-Arbiters finding that petitioner union consisted of both rank-and-file and supervisory employees.
Moreover, the CA held that the issues as to the legitimacy of petitioner union may be attacked collaterally in a
petition for certification election and the infirmity in the membership of petitioner union cannot be remedied
through the exclusion-inclusion proceedings in a pre-election conference pursuant to the ruling in Toyota Motor
Philippines v. Toyota Motor Philippines Corporation Labor Union.
11
Thus, considering that petitioner union is not a
legitimate labor organization, it has no legal right to file a petition for certification election.
Issues
I
Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of
jurisdiction in granting the respondent *companys+ petition for certiorari (CA G.R. No. SP No. 58203) in spite of the
fact that the issues subject of the respondent company*s+ petition was already settled with finality and barred from
being re-litigated.
II
Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of
jurisdiction in holding that the alleged mixture of rank-and-file and supervisory employee*s+ of petitioner *unions+
membership is *a+ ground for the cancellation of petitioner *unions+ legal personality and dismissal of *the+ petition
for certification election.
III
Whether x x x the Honorable Court of Appeals committed grave abuse of discretion tantamount to lack of
jurisdiction in holding that the alleged failure to certify under oath the local charter certificate issued by its mother
federation and list of the union membership attending the organizational meeting [is a ground] for the cancellation
of petitioner *unions+ legal personality as a labor organization and for the dismissal of the petition for certification
election.
12

Petitioner Unions Arguments
Petitioner union claims that the litigation of the issue as to its legal personality to file the subject petition for
certification election is barred by the July 16, 1999 Decision of the DOLE. In this decision, the DOLE ruled that
petitioner union complied with all the documentation requirements and that there was no independent evidence
presented to prove an illegal mixture of supervisory and rank-and-file employees in petitioner union. After the
promulgation of this Decision, respondent company did not move for reconsideration, thus, this issue must be
deemed settled.
Petitioner union further argues that the lack of verification of its charter certificate and the alleged illegal
composition of its membership are not grounds for the dismissal of a petition for certification election under Section
11, Rule XI of D.O. No. 9, series of 1997, as amended, nor are they grounds for the cancellation of a unions
registration under Section 3, Rule VIII of said issuance. It contends that what is required to be certified under oath by
the local unions secretary or treasurer and attested to by the local unions president are limited to the unions
constitution and by-laws, statement of the set of officers, and the books of accounts.
Finally, the legal personality of petitioner union cannot be collaterally attacked but may be questioned only in an
independent petition for cancellation pursuant to Section 5, Rule V, Book IV of the Rules to Implement the Labor
Code and the doctrine enunciated in Tagaytay Highlands International Golf Club Incoprorated v. Tagaytay Highlands
Empoyees Union-PTGWO.
13

Respondent Companys Arguments
Respondent company asserts that it cannot be precluded from challenging the July 16, 1999 Decision of the DOLE.
The said decision did not attain finality because the DOLE subsequently reversed its earlier ruling and, from this
decision, respondent company timely filed its motion for reconsideration.
On the issue of lack of verification of the charter certificate, respondent company notes that Article 235 of the Labor
Code and Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of 1997,
expressly requires that the charter certificate be certified under oath.
It also contends that petitioner union is not a legitimate labor organization because its composition is a mixture of
supervisory and rank-and-file employees in violation of Article 245 of the Labor Code. Respondent company
maintains that the ruling in Toyota Motor Philippines vs. Toyota Motor Philippines Labor Union
14
continues to be
good case law. Thus, the illegal composition of petitioner union nullifies its legal personality to file the subject
petition for certification election and its legal personality may be collaterally attacked in the proceedings for a
petition for certification election as was done here.
Our Ruling
The petition is meritorious.
The issue as to the legal personality of petitioner union is not barred by the July 16, 1999 Decision of the DOLE.
A review of the records indicates that the issue as to petitioner unions legal personality has been timely and
consistently raised by respondent company before the Med-Arbiter, DOLE, CA and now this Court. In its July 16,
1999 Decision, the DOLE found that petitioner union complied with the documentation requirements of the Labor
Code and that the evidence was insufficient to establish that there was an illegal mixture of supervisory and rank-
and-file employees in its membership. Nonetheless, the petition for certification election was dismissed on the
ground that another union had previously filed a petition for certification election seeking to represent the same
bargaining unit in respondent company.
Upon motion for reconsideration by petitioner union on January 13, 2000, the DOLE reversed its previous ruling. It
upheld the right of petitioner union to file the subject petition for certification election because its previous decision
was based on a mistaken appreciation of facts.
15
From this adverse decision, respondent company timely moved for
reconsideration by reiterating its previous arguments before the Med-Arbiter that petitioner union has no legal
personality to file the subject petition for certification election.
The July 16, 1999 Decision of the DOLE, therefore, never attained finality because the parties timely moved for
reconsideration. The issue then as to the legal personality of petitioner union to file the certification election was
properly raised before the DOLE, the appellate court and now this Court.
The charter certificate need not be certified under oath by the local unions secretary or treasurer and attested to by
its president.
Preliminarily, we must note that Congress enacted Republic Act (R.A.) No. 9481
16
which took effect on June 14,
2007.
17
This law introduced substantial amendments to the Labor Code. However, since the operative facts in this
case occurred in 1999, we shall decide the issues under the pertinent legal provisions then in force (i.e., R.A. No.
6715,
18
amending Book V of the Labor Code, and the rules and regulations
19
implementing R.A. No. 6715, as
amended by D.O. No. 9,
20

series of 1997) pursuant to our ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc.
21

In the main, the CA ruled that petitioner union failed to comply with the requisite documents for registration under
Article 235 of the Labor Code and its implementing rules. It agreed with the Med-Arbiter that the Charter Certificate,
Sama-samang Pahayag ng Pagsapi at Authorization, and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga
Sumang-ayon at Nagratipika sa Saligang Batas were not executed under oath. Thus, petitioner union cannot be
accorded the status of a legitimate labor organization.
We disagree.
The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as amended by D.O. No. 9, series of
1997, provides:
Section 1. Chartering and creation of a local chapter A duly registered federation or national union may directly
create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following:
(a) A charter certificate issued by the federation or national union indicating the creation or establishment of the
local/chapter;
(b) The names of the local/chapters officers, their addresses, and the principal office of the local/chapter; and
(c) The local/chapters constitution and by-laws provided that where the local/chapters constitution and by-laws
[are] the same as [those] of the federation or national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the
local/chapter and attested to by its President.
As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang Batas are not among the documents that
need to be submitted to the Regional Office or Bureau of Labor Relations in order to register a labor organization. As
to the charter certificate, the above-quoted rule indicates that it should be executed under oath. Petitioner union
concedes and the records confirm that its charter certificate was not executed under oath. However, in San Miguel
Corporation (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel Corporation
Monthlies Rank-and-File Union-FFW (MPPP-SMPP-SMAMRFU-FFW),
22
which was decided under the auspices of D.O.
No. 9, Series of 1997, we ruled
In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996), the Court ruled that it was not
necessary for the charter certificate to be certified and attested by the local/chapter officers. Id. While this ruling
was based on the interpretation of the previous Implementing Rules provisions which were supplanted by the
1997 amendments, we believe that the same doctrine obtains in this case. Considering that the charter certificate
is prepared and issued by the national union and not the local/chapter, it does not make sense to have the
local/chapters officers x x x certify or attest to a document which they had no hand in the preparation
of.
23
(Emphasis supplied)
In accordance with this ruling, petitioner unions charter certificate need not be executed under oath. Consequently,
it validly acquired the status of a legitimate labor organization upon submission of (1) its charter certificate,
24
(2) the
names of its officers, their addresses, and its principal office,
25
and (3) its constitution and by-laws
26
the last two
requirements having been executed under oath by the proper union officials as borne out by the records.
The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as a
legitimate labor organization.
The CA found that petitioner union has for its membership both rank-and-file and supervisory employees. However,
petitioner union sought to represent the bargaining unit consisting of rank-and-file employees. Under Article
245
27
of the Labor Code, supervisory employees are not eligible for membership in a labor organization of rank-and-
file employees. Thus, the appellate court ruled that petitioner union cannot be considered a legitimate labor
organization pursuant to Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor
Union
28
(hereinafter Toyota).
Preliminarily, we note that petitioner union questions the factual findings of the Med-Arbiter, as upheld by the
appellate court, that 12 of its members, consisting of batchman, mill operator and leadman, are supervisory
employees. However, petitioner union failed to present any rebuttal evidence in the proceedings below after
respondent company submitted in evidence the job descriptions
29
of the aforesaid employees. The job descriptions
indicate that the aforesaid employees exercise recommendatory managerial actions which are not merely routinary
but require the use of independent judgment, hence, falling within the definition of supervisory employees under
Article 212(m)
30
of the Labor Code. For this reason, we are constrained to agree with the Med-Arbiter, as upheld by
the appellate court, that petitioner union consisted of both rank-and-file and supervisory employees.
Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union does not divest it of its status
as a legitimate labor organization. The appellate courts reliance on Toyota is misplaced in view of this Courts
subsequent ruling in Republic v. Kawashima Textile Mfg., Philippines, Inc.
31
(hereinafter Kawashima). In Kawashima,
we explained at length how and why the Toyota doctrine no longer holds sway under the altered state of the law
and rules applicable to this case, viz:
R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition [on the co-mingling of
supervisory and rank-and-file employees] would bring about on the legitimacy of a labor organization.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) which supplied the
deficiency by introducing the following amendment to Rule II (Registration of Unions):
"Sec. 1. Who may join unions. - x x x Supervisory employees and security guards shall not be eligible for
membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own; Provided, that those supervisory employees who are included in an existing rank-and-
file bargaining unit, upon the effectivity of Republic Act No. 6715, shall remain in that unit x x x. (Emphasis supplied)
and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz:
"Sec. 1. Where to file. - A petition for certification election may be filed with the Regional Office which has
jurisdiction over the principal office of the employer. The petition shall be in writing and under oath.
Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested to bargain collectively,
may file the petition.
The petition, when filed by a legitimate labor organization, shall contain, among others:
x x x x
(c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require;
and provided further, that the appropriate bargaining unit of the rank-and-file employees shall not include
supervisory employees and/or security guards. (Emphasis supplied)
By that provision, any questioned mingling will prevent an otherwise legitimate and duly registered labor
organization from exercising its right to file a petition for certification election.
Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the Court, citing Article 245 of the
Labor Code, as amended by R.A. No. 6715, held:
"Clearly, based on this provision, a labor organization composed of both rank-and-file and supervisory employees is
no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an
organization which carries a mixture of rank-and-file and supervisory employees cannot possess any of the rights
of a legitimate labor organization, including the right to file a petition for certification election for the purpose of
collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification
election, to inquire into the composition of any labor organization whenever the status of the labor organization
is challenged on the basis of Article 245 of the Labor Code.
x x x x
In the case at bar, as respondent union's membership list contains the names of at least twenty-seven (27)
supervisory employees in Level Five positions, the union could not, prior to purging itself of its supervisory employee
members, attain the status of a legitimate labor organization. Not being one, it cannot possess the requisite
personality to file a petition for certification election." (Emphasis supplied)
In Dunlop, in which the labor organization that filed a petition for certification election was one for supervisory
employees, but in which the membership included rank-and-file employees, the Court reiterated that such labor
organization had no legal right to file a certification election to represent a bargaining unit composed of supervisors
for as long as it counted rank-and-file employees among its members.
It should be emphasized that the petitions for certification election involved in Toyota and Dunlop were filed on
November 26, 1992 and September 15, 1995, respectively; hence, the 1989 Rules was applied in both cases.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by Department Order No. 9,
series of 1997 (1997 Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989 Amended
Omnibus Rules that the petition for certification election indicate that the bargaining unit of rank-and-file
employees has not been mingled with supervisory employees was removed. Instead, what the 1997 Amended
Omnibus Rules requires is a plain description of the bargaining unit, thus:
Rule XI
Certification Elections
x x x x
Sec. 4. Forms and contents of petition. - The petition shall be in writing and under oath and shall contain, among
others, the following: x x x (c) The description of the bargaining unit.
In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of the 1997 Amended Omnibus
Rules, although the specific provision involved therein was only Sec. 1, Rule VI, to wit:
"Section. 1. Chartering and creation of a local/chapter.- A duly registered federation or national union may directly
create a local/chapter by submitting to the Regional Office or to the Bureau two (2) copies of the following: a) a
charter certificate issued by the federation or national union indicating the creation or establishment of the
local/chapter; (b) the names of the local/chapter's officers, their addresses, and the principal office of the
local/chapter; and (c) the local/ chapter's constitution and by-laws; provided that where the local/chapter's
constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated
accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary or the Treasurer of the
local/chapter and attested to by its President."
which does not require that, for its creation and registration, a local or chapter submit a list of its members.
Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees Union-PGTWO in which the
core issue was whether mingling affects the legitimacy of a labor organization and its right to file a petition for
certification election. This time, given the altered legal milieu, the Court abandoned the view
in Toyota andDunlop and reverted to its pronouncement in Lopez that while there is a prohibition against the
mingling of supervisory and rank-and-file employees in one labor organization, the Labor Code does not provide for
the effects thereof. Thus, the Court held that after a labor organization has been registered, it may exercise all the
rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file
employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its
registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article
239 of the Labor Code.
In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products Plants-San Miguel
Packaging Products-San Miguel Corp. Monthlies Rank-and-File Union-FFW, the Court explained that since the 1997
Amended Omnibus Rules does not require a local or chapter to provide a list of its members, it would be improper
for the DOLE to deny recognition to said local or chapter on account of any question pertaining to its individual
members.
More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which involved a petition for
cancellation of union registration filed by the employer in 1999 against a rank-and-file labor organization on the
ground of mixed membership: the Court therein reiterated its ruling in Tagaytay Highlands that the inclusion in a
union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to
misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of Article
239 of the Labor Code.
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as interpreted by the Court
in Tagaytay Highlands, San Miguel and Air Philippines, had already set the tone for it. Toyota and Dunlopno longer
hold sway in the present altered state of the law and the rules.
32
[Underline supplied]
The applicable law and rules in the instant case are the same as those in Kawashima because the present petition
for certification election was filed in 1999 when D.O. No. 9, series of 1997, was still in effect.
Hence,Kawashima applies with equal force here. As a result, petitioner union was not divested of its status as a
legitimate labor organization even if some of its members were supervisory employees; it had the right to file the
subject petition for certification election.
The legal personality of petitioner union cannot be collaterally attacked by respondent company in the certification
election proceedings.
Petitioner union correctly argues that its legal personality cannot be collaterally attacked in the certification election
proceedings. As we explained in Kawashima:
Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification
election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which
organization will represent the employees in their collective bargaining with the employer. The choice of their
representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it
cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it; not even a
mere allegation that some employees participating in a petition for certification election are actually managerial
employees will lend an employer legal personality to block the certification election. The employer's only right in the
proceeding is to be notified or informed thereof.
The amendments to the Labor Code and its implementing rules have buttressed that policy even more.
33

WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision and September 16, 2005 Resolution of the
Court of Appeals in CA-G.R. SP No. 58203 are REVERSED and SET ASIDE. The January 13, 2000 Decision of the
Department of Labor and Employment in OS-A-6-53-99 (NCR-OD-M-9902-019) is REINSTATED.
No pronouncement as to costs.
SO ORDERED.
#6 G.R. No. 142000 January 22, 2003
TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED, petitioner,
vs.
TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO, respondent.
CARPIO-MORALES, J.:
Before this Court on certiorari under Rule 45 is the petition of the Tagaytay Highlands International Golf Club
Incorporated (THIGCI) assailing the February 15, 2002 decision of the Court of Appeals denying its petition to annul
the Department of Labor and Employment (DOLE) Resolutions of November 12, 1998 and December 29, 1998.
On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)Philippine Transport and General Workers
Organization (PTGWO), Local Chapter No. 776, a legitimate labor organization said to represent majority of the rank-
and-file employees of THIGCI, filed a petition for certification election before the DOLE Mediation-Arbitration Unit,
Regional Branch No. IV.
THIGCI, in its Comment
1
filed on November 27, 1997, opposed THEUs petition for certification election on the
ground that the list of union members submitted by it was defective and fatally flawed as it included the names and
signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as employees
of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192 signatories to the
petition, only 71 were actual rank-and-file employees of THIGCI.
THIGCI thus submitted a list of the names of its 71 actual rank-and-file employees which it annexed
2
to its Comment
to the petition for certification election. And it therein incorporated the following tabulation
3
showing the number
of signatories to said petition whose membership in the union was being questioned as disqualified and the reasons
for disqualification:
# of Signatures Reasons for Disqualification
13 Supervisors of THIGCI
6 Resigned employees of THIGCI
2 AWOL employees of THIGCI
53 Rank-and-file employees of The Country Club at Tagaytay Highlands, Inc.
14 Supervisors of The Country Club at Tagaytay Highlands, Inc.
6 Resigned employees of The Country Club at Tagaytay Highlands, Inc.
3 Terminated employees of The Country Club at Tagaytay Highlands, Inc.
1 AWOL employees of The Country Club at Tagaytay Highlands, Inc.
4 Signatures that cannot be deciphered
16 Names in list that were erased
2 Names with first names only
THIGCI also alleged that some of the signatures in the list of union members were secured through fraudulent and
deceitful means, and submitted copies of the handwritten denial and withdrawal of some of its employees from
participating in the petition.
4
Replying to THIGCIs Comment, THEU asserted that it had complied with all the
requirements for valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE
Department Order No. 9, series of 1997,
5
on account of which it was duly granted a Certification of Affiliation by
DOLE on October 10, 1997;
6
and that Section 5, Rule V of said Department Order provides that the legitimacy of its
registration cannot be subject to collateral attack, and for as long as there is no final order of cancellation, it
continues to enjoy the rights accorded to a legitimate organization.
THEU thus concluded in its Reply
7
that under the circumstances, the Med-Arbiter should, pursuant to Article 257 of
the Labor Code and Section 11, Rule XI of DOLE Department Order No. 09, automatically order the conduct of a
certification election.
By Order of January 28, 1998,
8
DOLE Med-Arbiter Anastacio Bactin ordered the holding of a certification election
among the rank-and-file employees of THIGCI in this wise, quoted verbatim:
We evaluated carefully this instant petition and we are of the opinion that it is complete in form and substance. In
addition thereto, the accompanying documents show that indeed petitioner union is a legitimate labor federation
and its local/chapter was duly reported to this Office as one of its affiliate local/chapter. Its due reporting through
the submission of all the requirements for registration of a local/chapter is a clear showing that it was already
included in the roster of legitimate labor organizations in this Office pursuant to Department Order No. 9 Series of
1997 with all the legal right and personality to institute this instant petition. Pursuant therefore to the provisions of
Article 257 of the Labor Code, as amended, and its Implementing Rules as amended by Department Order No. 9,
since the respondents establishment is unorganized, the holding of a certification election is mandatory for it was
clearly established that petitioner is a legitimate labor organization. Giving due course to this petition is therefore
proper and appropriate.
9
(Emphasis supplied)
Passing on THIGCIs allegation that some of the union members are supervisory, resigned and AWOL employees or
employees of a separate and distinct corporation, the Med-Arbiter held that the same should be properly raised in
the exclusion-inclusion proceedings at the pre-election conference. As for the allegation that some of the signatures
were secured through fraudulent and deceitful means, he held that it should be coursed through an independent
petition for cancellation of union registration which is within the jurisdiction of the DOLE Regional Director. In any
event, the Med-Arbiter held that THIGCI failed to submit the job descriptions of the questioned employees and
other supporting documents to bolster its claim that they are disqualified from joining THEU.
THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4, 1998, set aside the said Med-
Arbiters Order and accordingly dismissed the petition for certification election on the ground that there is a "clear
absence of community or mutuality of interests," it finding that THEU sought to represent two separate bargaining
units (supervisory employees and rank-and-file employees) as well as employees of two separate and distinct
corporate entities.
Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-Baldoz, by authority of the
DOLE Secretary, issued DOLE Resolution of November 12, 1998
10
setting aside the June 4, 1998 Resolution
dismissing the petition for certification election. In the November 12, 1998 Resolution, Undersecretary Dimapilis-
Baldoz held that since THEU is a local chapter, the twenty percent (20%) membership requirement is not necessary
for it to acquire legitimate status, hence, "the alleged retraction and withdrawal of support by 45 of the 70
remaining rank-and-file members . . . cannot negate the legitimacy it has already acquired before the petition;" that
rather than disregard the legitimate status already conferred on THEU by the Bureau of Labor Relations, the names
of alleged disqualified supervisory employees and employees of the Country Club, Inc., a separate and distinct
corporation, should simply be removed from the THEUs roster of membership; and that regarding the participation
of alleged resigned and AWOL employees and those whose signatures are illegible, the issue can be resolved during
the inclusion-exclusion proceedings at the pre-election stage.
The records of the case were thus ordered remanded to the Office of the Med-Arbiter for the conduct of
certification election.
THIGCIs Motion for Reconsideration of the November 12, 1998 Resolution having been denied by the DOLE
Undersecretary by Resolution of December 29, 1998,
11
it filed a petition for certiorari before this Court which, by
Resolution of April 14, 1999,
12
referred it to the Court of Appeals in line with its pronouncement in National
Federation of Labor (NFL) v. Hon. Bienvenido E. Laguesma, et al.,
13
and in strict observance of the hierarchy of
courts, as emphasized in the case of St. Martin Funeral Home v. National Labor Relations Commission.
14

By Decision of February 15, 2000,
15
the Court of Appeals denied THIGCIs Petition for Certiorari and affirmed the
DOLE Resolution dated November 12, 1998. It held that while a petition for certification election is an exception to
the innocent bystander rule, hence, the employer may pray for the dismissal of such petition on the basis of lack of
mutuality of interests of the members of the union as well as lack of employer-employee relationship following this
Courts ruling in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union et
al.
16
and Dunlop Slazenger [Phils.] v. Hon. Secretary of Labor and Employment et al,
17
petitioner failed to adduce
substantial evidence to support its allegations.
Hence, the present petition for certiorari, raising the following
"ISSUES/ASSIGNMENT OF ERRORS:
THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMER 1998 HOLDING
THAT SUPERVISORY EMPLOYEES AND NON-EMPLOYEES COULDSIMPLY BE REMOVED FROM APPELLEES ROSTER OF
RANK-AND-FILE MEMBERSHIP INSTEAD OF RESOLVING THE LEGITIMACY OF RESPONDENT UNIONS STATUS
THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE RESOLUTION DATED 12 NOVEMBER 1998 HOLDING
THAT THE DISQUALIFIED EMPLOYEES STATUS COULD READILY BE RESOLVED DURING THE INCLUSION AND
EXCLUSION PROCEEDINGS
THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING THAT THE ALLEGATIONS OF PETITIONER HAD BEEN
DULY PROVEN BY FAILURE OF RESPONDENT UNION TO DENY THE SAME AND BY THE SHEER WEIGHT OF EVIDENCE
INTRODUCED BY PETITIONER AND CONTAINED IN THE RECORDS OF THE CASE"
18

The statutory authority for the exclusion of supervisory employees in a rank-and-file union, and vice-versa, is Article
245 of the Labor Code, to wit:
Article 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees.
Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not
be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own.
While above-quoted Article 245 expressly prohibits supervisory employees from joining a rank-and-file union, it does
not provide what would be the effect if a rank-and-file union counts supervisory employees among its members, or
vice-versa.
Citing Toyota
19
which held that "a labor organization composed of both rank-and-file and supervisory employees is
no labor organization at all," and the subsequent case of Progressive Development Corp. Pizza Hut v.
Ledesma
20
which held that:
"The Labor Code requires that in organized and unorganized establishments, a petition for certification election
must be filed by a legitimate labor organization. The acquisition of rights by any union or labor organization,
particularly the right to file a petition for certification election, first and foremost, dependson whether or not the
labor organization has attained the status of a legitimate labor organization.
In the case before us, the Med-Arbiter summarily disregarded the petitioners prayer that the former look into the
legitimacy of the respondent Union by a sweeping declaration that the union was in the possession of a charter
certificate so that for all intents and purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a legitimate
organization,"
21
(Underscoring and emphasis supplied),
petitioner contends that, quoting Toyota, "[i]t becomes necessary . . ., anterior to the granting of an order allowing a
certification election, to inquire into the composition of any labor organization whenever the status of the labor
organization is challenged on the basis of Article 245 of the Labor Code."
22

Continuing, petitioner argues that without resolving the status of THEU, the DOLE Undersecretary "conveniently
deferred the resolution on the serious infirmity in the membership of [THEU] and ordered the holding of the
certification election" which is frowned upon as the following ruling of this Court shows:
We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity in the membership of
the respondent union can be remedied in "the pre-election conference thru the exclusion-inclusion proceedings
wherein those employees who are occupying rank-and-file positions will be excluded from the list of eligible voters."
Public respondent gravely misappreciated the basic antipathy between the interest of supervisors and the interest
of rank-and-file employees. Due to the irreconcilability of their interest we held in Toyota Motor Philippines v.
Toyota Motors Philippines Corporation Labor Union, viz:
x x x
"Clearly, based on this provision [Article 245], a labor organization composed of both rank-and-file and supervisory
employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not
being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot posses any of
the rights of a legitimate labor organization, including the right to file a petition for certification election for the
purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a
certification election, to inquire into the composition of any labor organization whenever the status of the labor
organization is challenged on the basis of Article 245 of the Labor Code." (Emphasis by petitioner) (Dunlop Slazenger
(Phils.), v. Secretary of Labor, 300 SCRA 120 [1998]; Underscoring and emphasis supplied by petitioner.)
The petition fails. After a certificate of registration is issued to a union, its legal personality cannot be subject to
collateral attack. It may be questioned only in an independent petition for cancellation in accordance with Section 5
of Rule V, Book IV of the "Rules to Implement the Labor Code" (Implementing Rules) which section reads:
Sec. 5. Effect of registration. The labor organization or workers association shall be deemed registered and vested
with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot
thereafter be subject to collateral attack, but may be questioned only in an independent petition for
cancellation in accordance with these Rules. (Emphasis supplied)
The grounds for cancellation of union registration are provided for under Article 239 of the Labor Code, as follows:
Art. 239. Grounds for cancellation of union registration. The following shall constitute grounds for cancellation of
union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution
and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the
ratification;
(b) Failure to submit the documents mentioned in the preceding paragraph within thirty (30) days from adoption or
ratification of the constitution and by-laws or amendments thereto;
(c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election
of officers, the list of voters, or failure to subject these documents together with the list of the newly
elected/appointed officers and their postal addresses within thirty (30) days from election;
(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the losing of every fiscal
year and misrepresentation, false entries or fraud in the preparation of the financial report itself;
(e) Acting as a labor contractor or engaging in the "cabo" system, or otherwise engaging in any activity prohibited by
law;
(f) Entering into collective bargaining agreements which provide terms and conditions of employment below
minimum standards established by law;
(g) Asking for or accepting attorneys fees or negotiation fees from employers;
(h) Other than for mandatory activities under this Code, checking off special assessments or any other fees without
duly signed individual written authorizations of the members;
(i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau; and
(j) Failure to comply with the requirements under Articles 237 and 238, (Emphasis supplied),
while the procedure for cancellation of registration is provided for in Rule VIII, Book V of the Implementing Rules.
The inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is
due to misrepresentation, false statement or fraud under the circumstances enumerated in Sections (a) and (c) of
Article 239 of above-quoted Article 239 of the Labor Code.
THEU, having been validly issued a certificate of registration, should be considered to have already acquired juridical
personality which may not be assailed collaterally.
As for petitioners allegation that some of the signatures in the petition for certification election were obtained
through fraud, false statement and misrepresentation, the proper procedure is, as reflected above, for it to file a
petition for cancellation of the certificate of registration, and not to intervene in a petition for certification election.
Regarding the alleged withdrawal of union members from participating in the certification election, this Courts
following ruling is instructive:
"*T+he best forum for determining whether there were indeed retractions from some of the laborers is in
thecertification election itself wherein the workers can freely express their choice in a secret ballot. Suffice it to say
that the will of the rank-and-file employees should in every possible instance be determined by secret ballot rather
than by administrative or quasi-judicial inquiry. Such representation and certification election cases are not to be
taken as contentious litigations for suits but as mere investigations of a non-adversary, fact-finding character as to
which of the competing unions represents the genuine choice of the workers to be their sole and exclusive collective
bargaining representative with their employer."
23

As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie given, as found by the
court a quo, its failure to present substantial evidence that the assailed employees are actually occupying
supervisory positions.
While petitioner submitted a list of its employees with their corresponding job titles and ranks,
24
there is nothing
mentioned about the supervisors respective duties, powers and prerogatives that would show that they can
effectively recommend managerial actions which require the use of independent judgment.
25

As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor:
26

Designation should be reconciled with the actual job description of subject employees x x x The mere fact that an
employee is designated manager does not necessarily make him one. Otherwise, there would be an absurd situation
where one can be given the title just to be deprived of the right to be a member of a union. In the case of National
Steel Corporation vs. Laguesma (G. R. No. 103743, January 29, 1996), it was stressed that:
What is essential is the nature of the employees function and not the nomenclature or titlegiven to the job which
determines whether the employee has rank-and-file or managerial status or whether he is a supervisory employee.
(Emphasis supplied).
27

WHEREFORE, the petition is hereby DENIED. Let the records of the case be remanded to the office of origin, the
Mediation-Arbitration Unit, Regional Branch No. IV, for the immediate conduct of a certification election subject to
the usual pre-election conference.
SO ORDERED.
#7 G.R. No. 115949 March 16, 2000
EVANGELINE J. GABRIEL, TERESITA C. LUALHATI, EVELYN SIA, RODOLFO EUGENIO, ISAGANI MAKISIG, and
DEMETRIO SALAS, petitioners,
vs.
THE HONORABLE SECRETARY OF LABOR AND EMPLOYMENT and SIMEON SARMIENTO, JESUS CARLOS MARTINEZ
III, ALBERT NAPIAL, MARVIN ALMACIN, ROGELIO MATEO, GLENN SIAPNO, EMILIANO CUETO, SALOME ATIENZA,
NORMA V. GO, JUDITH DUDANG, MONINA DIZON, EUSEBIO ROMERO, ISAGANI MORALES, ELISEO
BUENAVENTURA, CLEMENTE AGCAMARAN, CARMELITA NOLASCO, JOVITA FERI, LULU ACOSTA, CAROL LAZARO,
NIDA ARRIZA, ROMAN BERNARDO, DOMINGO B. MACALDO, EUGENE PIDLAOAN, MA. SOCORRO T. ANGOB,
JOSEPHINE ALVAREZ, LOURDES FERRER, JACQUILINE BAQUIRAN, GRACIA R. ESCUADRO, KRISTINA HERNANDEZ,
LOURDES IBEAS, MACARIO GARCIA, BILLY TECSON, ALEX RECTO III, LEBRUDO, JOSE RICAFORTE, RODOLFO
MORADA, TERESA AMADO, ROSITA TRINIDAD, JEANETTE ONG, VICTORINO LAS-AY, RANIEL DAYAO OSCAR
SANTOS, CRISTINA SALAVER, VICTORIA ARINO, A.H. SAJO, MICHAEL BIETE, RED RP, GLORIA JUAT, ETHELINDA
CASILAN, FAMER DIPASUPIL, MA. HIDELISA POMER, MA. CHARLOTTE TAWATAO, GRACE REYES, ERNIE COLINA,
ZENAIDA MENDOZA, PAULITA ADORABLE, BERNARDO MADUMBA, NESTOR NAVARRO, EASTER YAP, ALMA LIM,
FELISA YU, TIMOTEO GANASTRA, REVELITA CARTAJENAS, ANGELITO CABUAL, ROBERTA TAN, DOMINADOR TAPO,
GRACE LIM GADIANE JEMIE, CHRISTHDY DAUD, BENEDICTO ACOSTA, JESUSA ACOSTA, MA. AVELINA ARYAP,
EVELYN BENITEZ, ESTERITA CHU, EVANGELINE CHU, BETTY CINCO, RICARDO CONNEJO, MANULITO EVALO,
FRANCIS LEONIDA, GREGORIO NOBLEZA, RODOLFO RIVERAL, ELSA SIA, CLARA SUGBO, EDGARDO TABAO,
MANUEL VELOSO, MARLYN YU, ABSALON BUENA, WILFREDO PUERTO, FLORENTINA PINGOL, MARILOU DAR, FE
MORALES, MALEN BELLO, LORENA TAMAYO, CESAR LIM, PAUL BALTAZAR, ALFREDO GAYAGAS, DUMAGUETE
EMPLOYEES, CEBU EMPLOYEES, OZAMIZ EMPLOYEES, TACLOBAN EMPLOYEES AND ALL OTHER SOLID BANK UNION
MEMBERS, respondents.
QUISUMBING, J.:
Before us is a special civil action for certiorari seeking to reverse partially the Order
1
of public respondent dated June
3, 1994, in Case No. OS-MA-A-8-170-92, which ruled that the workers through their union should be made to
shoulder the expenses incurred for the professional services of a lawyer in connection with the collective bargaining
negotiations and that the reimbursement for the deductions from the workers should be charged to the union's
general fund or account.
The records show the following factual antecedents:
Petitioners comprise the Executive Board of the SolidBank Union, the duly recognized collective bargaining agent for
the rank and file employees of Solid Bank Corporation. Private respondents are members of said union.
Sometime in October 1991, the union's Executive Board decided to retain anew the service of Atty. Ignacio P.
Lacsina (now deceased) as union counsel in connection with the negotiations for a new Collective Bargaining
Agreement (CBA). Accordingly, on October 19, 1991, the board called a general membership meeting for the
purpose. At the said meeting, the majority of all union members approved and signed a resolution confirming the
decision of the executive board to engage the services of Atty. Lacsina as union counsel.
As approved, the resolution provided that ten percent (10%) of the total economic benefits that may be secured
through the negotiations be given to Atty. Lacsina as attorney's fees. It also contained an authorization for SolidBank
Corporation to check-off said attorney's fees from the first lump sum payment of benefits to the employees under
the new CBA and to turn over said amount to Atty. Lacsina and/or his duly authorized representative.
2

The new CBA was signed on February 21, 1992. The bank then, on request of the union, made payroll deductions for
attorney's fees from the CBA benefits paid to the union members in accordance with the abovementioned
resolution.
On October 2, 1992, private respondents instituted a complaint against the petitioners and the union counsel before
the Department of Labor and Employment (DOLE) for illegal deduction of attorney's fees as well as for quantification
of the benefits in the 1992 CBA.
3
Petitioners, in response, moved for the dismissal of the complaint citing litis
pendentia, forum shopping and failure to state a cause of action as their grounds.
4

On April 22, 1993, Med-Arbiter Paterno Adap of the DOLE-NCR issued the following Order:
WHEREFORE, premises considered, the Respondents Union Officers and Counsel are hereby directed to immediately
return or refund to the Complainants the illegally deducted amount of attorney's fees from the package of benefits
due herein complainants under the aforesaid new CBA.
Furthermore, Complainants are directed to pay five percent (5%) of the total amount to be refunded or returned by
the Respondent Union Officers and Counsel to them in favor of Atty. Armando D. Morales, as attorney's fees, in
accordance with Section II, Rule VIII of Book II (sic) of the Omnibus Rules Implementing the Labor Code.
5

On appeal, the Secretary of Labor rendered a Resolution
6
dated December 27, 1993, stating:
WHEREFORE, the appeal of respondents Evangeline Gabriel, et. al., is hereby partially granted and the Order of the
Med-Arbiter dated 22 April 1993 is hereby modified as follows: (1) that the ordered refund shall be limited to those
union members who have not signified their conformity to the check-off of attorney's fees; and (2) the directive on
the payment of 5% attorney's fees should be deleted for lack of basis.
SO ORDERED.
7

On Motion for Reconsideration, public respondent affirmed the said Order with modification that the union's
counsel be dropped as a party litigant and that the workers through their union should be made to shoulder the
expenses incurred for the attorney's services. Accordingly, the reimbursement should be charged to the union's
general fund/account.
8

Hence, the present petition seeking to partially annul the above-cited order of the public respondent for being
allegedly tainted with grave abuse of discretion amounting to lack of jurisdiction.
The sole issue for consideration is, did the public respondent act with grave abuse of discretion in issuing the
challenged order?
Petitioners argue that the General Membership Resolution authorizing the bank to check-off attorney's fee from the
first lump sum payment of the legal benefits to the employees under the new CBA satisfies the legal requirements
for such assessment.
9
Private respondents, on the other hand, claim that the check-off provision in question is illegal
because it was never submitted for approval at a general membership meeting called for the purpose and that it
failed to meet the formalities mandated by the Labor Code.
10

In check-off, the employer, on agreement with the Union, or on prior authorization from employees, deducts union
dues or agency fees from the latter's wages and remits them directly to the union.
11
It assures continuous funding;
for the labor organization. As this Court has acknowledged, the system of check-off is primarily for the benefit of the
union and only indirectly for the individual employees.
12

The pertinent legal provisions on check-offs are found in Article 222 (b) and Article 241 (o) of the Labor Code.
Art. 222 (b) states:
No attorney's fees, negotiation fees or similar charges of any kind arising from any collective bargaining negotiations
or conclusions of the collective agreement shall be imposed on any individual member of the contracting
union: Provided, however, that attorney's fees may be charged against unions funds in an amount to be agreed upon
by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void. (Emphasis
ours)
Art. 241 (o) provides:
Other than for mandatory activities under the Code, no special assessment, attorney's fees, negotiation fees or any
other extraordinary fees may be checked off from any amount due to an employee without an individual written
authorization duly signed by the employee. The authorization should specifically state the amount, purpose and
beneficiary of the deduction. (Emphasis ours).
Art. 241 has three (3) requisites for the validity of the special assessment for union's incidental expenses, attorney's
fees and representation expenses. These are: 1) authorization by a written resolution of the majority of all the
members at the general membership meeting called for the purpose; (2) secretary's record of the minutes of the
meeting; and (3) individual written authorization for check off duly signed by the employees concerned.
Clearly, attorney's fees may not be deducted or checked off from any amount due to an employee without his
written consent.
After a thorough review of the records, we find that the General Membership Resolution of October 19, 1991 of the
SolidBank Union did not satisfy the requirements laid down by law and jurisprudence for the validity of the ten
percent (10%) special assessment for union's incidental expenses, attorney's fees and representation expenses.
There were no individual written check off authorizations by the employees concerned and so the assessment
cannot be legally deducted by their employer.
Even as early as February 1990, in the case of Palacol vs. Ferrer-Calleja
13
we said that the express consent of
employees is required, and this consent must be obtained in accordance with the steps outlined by law, which must
be followed to the letter. No shortcuts are allowed. In Stellar Industrial Services, Inc. vs. NLRC
14
we reiterated that a
written individual authorization duly signed by the employee concerned is a condition sine qua non for such
deduction.
These pronouncements are also in accord with the recent ruling of this Court in the case of ABS-CBN Supervisors
Employees Union Members vs. ABS-CBN Broadcasting Corporation, et. al.,
15
which provides:
Premises studiedly considered, we are of the irresistible conclusion and, so find that the ruling in BPIEU-ALU vs.
NLRC that (1) the prohibition against attorney's fees in Article 222, paragraph (b) of the Labor Code applies only
when the payment of attorney's fees is effected through forced contributions from the workers; and (2) that no
deduction must be take from the workers who did not sign the check-off authorization, applies to the case under
consideration. (Emphasis ours.)
We likewise ruled in Bank of the Philippine Islands Employees Union-Association Labor Union (BPIEU-ALU) vs.
NLRC,
16

. . . the afore-cited provision (Article 222 (b) of the Labor Code) as prohibiting the payment of attorney's fees only
when it is effected through forced contributions from workers from their own funds as distinguished from the union
funds. The purpose of the provision is to prevent imposition on the workers of the duty to individually contribute
their respective shares in the fee to be paid the attorney for his services on behalf of the union in its negotiations
with management. The obligation to pay the attorney's fees belongs to the union and cannot be shunted to the
workers as their direct responsibility. Neither the lawyer nor the union itself may require the individual worker to
assume the obligation to pay attorney's fees from their own pockets. So categorical is this intent that the law makes
it clear that any agreement to the contrary shall be null and void ab initio. (Emphasis ours.)1wphi1
From all the foregoing, we are of the considered view that public respondent did not act with grave abuse of
discretion in ruling that the workers through their union should be made to shoulder the expenses incurred for the
services of a lawyer. And accordingly the reimbursement should be charged to the union's general fund or account.
No deduction can be made from the salaries of the concerned employees other than those mandated by law.
WHEREFORE, the petition is DENIED. The assailed Order dated June 3, 1994, of respondent Secretary of Labor signed
by Undersecretary Bienvenido E. Laguesma is AFFIRMED. No pronouncement as to costs.1wphi1.nt
SO ORDERED.
#8 G.R. No. 85333 February 26, 1990
CARMELITO L. PALACOL, ET AL., petitioners,
vs.
PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, MANILA CCBPI SALES FORCE UNION, and COCA-
COLA BOTTLERS (PHILIPPINES), INC., respondents.
Wellington B. Lachica for petitioners.
Adolpho M. Guerzon for respondent Union.

GANCAYCO, J.:
Can a special assessment be validly deducted by a labor union from the lump-sum pay of its members, granted
under a collective bargaining agreement (CBA), notwithstanding a subsequent disauthorization of the same by a
majority of the union members? This is the main issue for resolution in the instant petition for certiorari.
As gleaned from the records of the case, the pertinent facts are as follows:
On October 12, 1987, the respondent Manila CCBPI Sales Force Union (hereinafter referred to as the Union), as the
collective bargaining agent of all regular salesmen, regular helpers, and relief helpers of the Manila Plant and Metro
Manila Sales Office of the respondent Coca-Cola Bottlers (Philippines), Inc. (hereinafter referred to as the Company)
concluded a new collective bargaining agreement with the latter.
1
Among the compensation benefits granted to the
employees was a general salary increase to be given in lump sum including recomputation of actual commissions
earned based on the new rates of increase.
On the same day, the president of the Union submitted to the Company the ratification by the union members of
the new CBA and authorization for the Company to deduct union dues equivalent to P10.00 every payday or P20.00
every month and, in addition, 10% by way of special assessment, from the CBA lump-sum pay granted to the union
members. The last one among the aforementioned is the subject of the instant petition.
As embodied in the Board Resolution of the Union dated September 29, 1987, the purpose of the special assessment
sought to be levied is "to put up a cooperative and credit union; purchase vehicles and other items needed for the
benefit of the officers and the general membership; and for the payment for services rendered by union officers,
consultants and others."
2
There was also an additional proviso stating that the "matter of allocation ... shall be at
the discretion of our incumbent Union President."
This "Authorization and CBA Ratification" was obtained by the Union through a secret referendum held in separate
local membership meetings on various dates.
3
The total membership of the Union was about 800. Of this number,
672 members originally authorized the 10% special assessment, while 173 opposed the same.
4

Subsequently however, one hundred seventy (170) members of the Union submitted documents to the Company
stating that although they have ratified the new CBA, they are withdrawing or disauthorizing the deduction of any
amount from their CBA lump sum. Later, 185 other union members submitted similar documents expressing the
same intent. These members, numbering 355 in all (170 + 185), added to the original oppositors of 173, turned the
tide in favor of disauthorization for the special assessment, with a total of 528 objectors and a remainder of 272
supporters.
5

On account of the above-mentioned disauthorization, the Company, being in a quandary as to whom to remit the
payment of the questioned amount, filed an action for interpleader with the Bureau of Labor Relations in order to
resolve the conflicting claims of the parties concerned. Petitioners, who are regular rank-and-file employees of the
Company and bona fide members of the Union, filed a motion/complaint for intervention therein in two groups of
161 and 94, respectively. They claimed to be among those union members who either did not sign any individual
written authorization, or having signed one, subsequently withdrew or retracted their signatures therefrom.
Petitioners assailed the 10% special assessment as a violation of Article 241(o) in relation to Article 222(b) of the
Labor Code. Article 222(b) provides as follows:
ART. 222. Appearances and Fees.
xxx xxx xxx
(b) No attorney's fees, negotiation fees or similar charges of any kind arising from any collective bargaining
negotiations or conclusion of the collective agreement shall be imposed on any individual member of the
contracting union; Provided, however, that attorney's fees may be charged against union funds in an amount to be
agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and
void.
On the other hand, Article 241(o) mandates that:
ART. 241. Rights and conditions of membership in a labor organization.
xxx xxx xxx
(o) Other than for mandatory activities under the Code, no special assessments, attorney's fees, negotiation fees or
any other extraordinary fees may be checked off from any amount due to an employee without an individual written
authorization duly signed by the employee. The authorization should specifically state the amount, purpose and
beneficiary of the deduction;
As authority for their contention, petitioners cited Galvadores v. Trajano,
6
wherein it was ruled that no check-offs
from any amount due employees may be effected without individual written authorizations duly signed by the
employees specifically stating the amount, purpose, and beneficiary of the deduction.
In its answer, the Union countered that the deductions not only have the popular indorsement and approval of the
general membership, but likewise complied with the legal requirements of Article 241 (n) and (o) of the Labor Code
in that the board resolution of the Union imposing the questioned special assessment had been duly approved in a
general membership meeting and that the collection of a special fund for labor education and research is mandated.
Article 241(n) of the Labor Code states that
ART. 241. Rights and conditions of membership in a labor organization.
xxx xxx xxx
(n) No special assessment or other extraordinary fees may be levied upon the members of a labor organization
unless authorized by a written resolution of a majority of all the members at a general membership meeting duly
called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of
all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such
assessments or fees. The record shall be attested to by the president;
Med-Arbiter Manases T. Cruz ruled in favor of petitioners in an order dated February 15, 1988 whereby he directed
the Company to remit the amount it had kept in trust directly to the rank-and-file personnel without delay.
On appeal to the Bureau of Labor Relations, however, the order of the Med-Arbiter was reversed and set aside by
the respondent-Director in a resolution dated August 19, 1988 upholding the claim of the Union that the special
assessment is authorized under Article 241 (n) of the Labor Code, and that the Union has complied with the
requirements therein.
Hence, the instant petition.
Petitioners allege that the respondent-Director committed a grave abuse of discretion amounting to lack or excess
of jurisdiction when she held Article 241 (n) of the Labor Code to be the applicable provision instead of Article
222(b) in relation to Article 241(o) of the same law.
According to petitioners, a cursory examination and comparison of the two provisions of Article 241 reveals that
paragraph (n) cannot prevail over paragraph (o). The reason advanced is that a special assessment is not a matter of
major policy affecting the entire union membership but is one which concerns the individual rights of union
members.
Petitioners further assert that assuming arguendo that Article 241(n) should prevail over paragraph (o), the Union
has nevertheless failed to comply with the procedure to legitimize the questioned special assessment by: (1)
presenting mere minutes of local membership meetings instead of a written resolution; (2) failing to call a general
membership meeting; (3) having the minutes of three (3) local membership meetings recorded by a union director,
and not by the union secretary as required; (4) failing to have the list of members present included in the minutes of
the meetings; and (5) failing to present a record of the votes cast.
7
Petitioners concluded their argument by
citingGalvadores.
After a careful review of the records of this case, We are convinced that the deduction of the 10% special
assessment by the Union was not made in accordance with the requirements provided by law.
Petitioners are correct in citing the ruling of this Court in Galvadores which is applicable to the instant case. The
principle "that employees are protected by law from unwarranted practices that diminish their compensation
without their known edge and consent"
8
is in accord with the constitutional principle of the State affording full
protection to labor.
9

The respondent-Union brushed aside the defects pointed out by petitioners in the manner of compliance with the
legal requirements as "insignificant technicalities." On the contrary, the failure of the Union to comply strictly with
the requirements set out by the law invalidates the questioned special assessment. Substantial compliance is not
enough in view of the fact that the special assessment will diminish the compensation of the union members. Their
express consent is required, and this consent must be obtained in accordance with the steps outlined by law, which
must be followed to the letter. No shortcuts are allowed.
The applicable provisions are clear. The Union itself admits that both paragraphs (n) and (o) of Article 241 apply.
Paragraph (n) refers to "levy" while paragraph (o) refers to "check-off" of a special assessment. Both provisions must
be complied with. Under paragraph (n), the Union must submit to the Company a written resolution of a majority of
all the members at a general membership meeting duly called for the purpose. In addition, the secretary of the
organization must record the minutes of the meeting which, in turn, must include, among others, the list of all the
members present as well as the votes cast.
As earlier outlined by petitioners, the Union obviously failed to comply with the requirements of paragraph (n). It
held local membership meetings on separate occasions, on different dates and at various venues, contrary to the
express requirement that there must be a general membership meeting. The contention of the Union that "the local
membership meetings are precisely the very general meetings required by law"
10
is untenable because the law
would not have specified a general membership meeting had the legislative intent been to allow local meetings in
lieu of the latter.
It submitted only minutes of the local membership meetings when what is required is a written resolution adopted
at the general meeting. Worse still, the minutes of three of those local meetings held were recorded by a union
director and not by the union secretary. The minutes submitted to the Company contained no list of the members
present and no record of the votes cast. Since it is quite evident that the Union did not comply with the law at every
turn, the only conclusion that may be made therefrom is that there was no valid levy of the special assessment
pursuant to paragraph (n) of Article 241 of the Labor Code.
Paragraph (o) on the other hand requires an individual written authorization duly signed by every employee in order
that a special assessment may be validly checked-off. Even assuming that the special assessment was validly levied
pursuant to paragraph (n), and granting that individual written authorizations were obtained by the Union,
nevertheless there can be no valid check-off considering that the majority of the union members had already
withdrawn their individual authorizations. A withdrawal of individual authorizations is equivalent to no authorization
at all. Hence, the ruling in Galvadores that "no check-offs from any amounts due employees may be effected
without an individual written authorization signed by the employees ... " is applicable.
The Union points out, however, that said disauthorizations are not valid for being collective in form, as they are
"mere bunches of randomly procured signatures, under loose sheets of paper."
11
The contention deserves no merit
for the simple reason that the documents containing the disauthorizations have the signatures of the union
members. The Court finds these retractions to be valid. There is nothing in the law which requires that the
disauthorization must be in individual form.
Moreover, it is well-settled that "all doubts in the implementation and interpretation of the provisions of the Labor
Code ... shall be resolved in favor of labor."
12
And as previously stated, labor in this case refers to the union
members, as employees of the Company. Their mere desire to establish a separate bargaining unit, albeit unproven,
cannot be construed against them in relation to the legality of the questioned special assessment. On the contrary,
the same may even be taken to reflect their dissatisfaction with their bargaining representative, the respondent-
Union, as shown by the circumstances of the instant petition, and with good reason.
The Med-Arbiter correctly ruled in his Order that:
The mandate of the majority rank and file have (sic) to be respected considering they are the ones directly affected
and the realities of the high standards of survival nowadays. To ignore the mandate of the rank and file would enure
to destabilizing industrial peace and harmony within the rank and file and the employer's fold, which we cannot
countenance.
Moreover, it will be recalled that precisely union dues are collected from the union members to be spent for the
purposes alluded to by respondent. There is no reason shown that the regular union dues being now implemented is
not sufficient for the alleged expenses. Furthermore, the rank and file have spoken in withdrawing their consent to
the special assessment, believing that their regular union dues are adequate for the purposes stated by the
respondent. Thus, the rank and file having spoken and, as we have earlier mentioned, their sentiments should be
respected.
Of the stated purposes of the special assessment, as embodied in the board resolution of the Union, only the
collection of a special fund for labor and education research is mandated, as correctly pointed out by the Union. The
two other purposes, namely, the purchase of vehicles and other items for the benefit of the union officers and the
general membership, and the payment of services rendered by union officers, consultants and others, should be
supported by the regular union dues, there being no showing that the latter are not sufficient to cover the same.
The last stated purpose is contended by petitioners to fall under the coverage of Article 222 (b) of the Labor Code.
The contention is impressed with merit. Article 222 (b) prohibits attorney's fees, negotiations fees and similar
charges arising out of the conclusion of a collective bargaining agreement from being imposed on any individual
union member. The collection of the special assessment partly for the payment for services rendered by union
officers, consultants and others may not be in the category of "attorney's fees or negotiations fees." But there is no
question that it is an exaction which falls within the category of a "similar charge," and, therefore, within the
coverage of the prohibition in the aforementioned article. There is an additional proviso giving the Union President
unlimited discretion to allocate the proceeds of the special assessment. Such a proviso may open the door to abuse
by the officers of the Union considering that the total amount of the special assessment is quite considerable
P1,027,694.33 collected from those union members who originally authorized the deduction, and P1,267,863.39
from those who did not authorize the same, or subsequently retracted their authorizations.
13
The former amount
had already been remitted to the Union, while the latter is being held in trust by the Company.
The Court, therefore, stakes down the questioned special assessment for being a violation of Article 241, paragraphs
(n) and (o), and Article 222 (b) of the Labor Code.
WHEREFORE, the instant petition is hereby GRANTED. The Order of the Director of the Bureau of Labor Relations
dated August 19, 1988 is hereby REVERSED and SET ASIDE, while the order of the Med-Arbiter dated February 17,
1988 is reinstated, and the respondent Coca-Cola Bottlers (Philippines), Inc. is hereby ordered to immediately remit
the amount of P1,267,863.39 to the respective union members from whom the said amount was withheld. No
pronouncement as to costs. This decision is immediately executory.
SO ORDERED.
#9 G.R. No. L-43495-99 January 20, 1990
TROPICAL HUT EMPLOYEES' UNION-CGW, JOSE ENCINAS, JOSE LUIS TRIBINO, FELIPE DURAN, MANUEL MANGYAO,
MAMERTO CAHUCOM, NEMESIO BARRO, TEODULFO CAPAGNGAN, VICTORINO ABORRO, VIDAL MANTOS,
DALMACIO DALDE, LUCIO PIASAN, CANUTO LABADAN, TERESO ROMERDE, CONRADO ENGALAN, SALVADOR
NERVA, BERNARDO ENGALAN, BONIFACIO CAGATIN, BENEDICTO VALDEZ, EUSEBIO SUPILANAS, ALFREDO
HAMAYAN, ASUERO BONITO, GAVINO DEL CAMPO, ZACARIAS DAMING, PRUDENCIO LADION, FULGENCIO
BERSALUNA, ALBERTO PERALES, ROMEO MAGRAMO, GODOFREDO CAMINOS, GILDARDO DUMAS, JORGE
SALDIVAR, GENARO MADRIO, SEGUNDINO KUIZON, LUIS SANDOVAL, NESTOR JAPAY, ROGELIO CUIZON, RENATO
ANTIPADO, GREGORIO CUEVO, MARTIN BALAZUELA, CONSTANCIO CHU, CRISPIN TUBLE, FLORENCIO CHIU,
FABIAN CAHUCOM, EMILIANO VILLAMOR, RESTITUTO HANDAYAN, VICTORINO ESPEDILLA, NOEL CHUA,
ARMANDO ALCORANO, ELEUTERIO TAGUIK, SAMSON CRUDA, DANILO CASTRO, CENON VALLENAS, DANILO
CAWALING, SIMPLICIO GALLEROS, PERFECTO CUIZON, PROCESO LAUROS, ANICETO BAYLON, EDISON ANDRES,
REYNALDO BAGOHIN, IRENEO SUPANGAN, RODRIGO CAGATIN, TEODORO ORENCIO, ARMANDO LUAYON, JAIME
NERVA, NARCISO CUIZON, ALFREDO DEL ROSARIO, EDUARDO LORENZO, PEDRO ARANGO, VICENTE SUPANGAN,
JACINTO BANAL AND BONIFACIO PUERTO, petitioners,
vs.
TROPICAL HUT FOOD MARKET, INC., ESTELITA J. QUE, ARTURO DILAG, MARCELINO LONTOK JR., NATIONAL
ASSOCIATION OF TRADE UNIONS (NATU), NATIONAL LABOR RELATIONS COMMISSION (NLRC), HON. DIEGO P.
ATIENZA, GERONIMO Q. QUADRA, FEDERICO C. BORROMEO, AND HON. BLAS F. OPLE, respondents.
Pacifico C. Rosal for petitioners.
Marcelino Lontok, Jr. for private respondents.
Dizon, Vitug & Fajardo Law Office for Tropical Hut Food Market, Inc. and Que.

MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 seeking to set aside the decisions of the public respondents Secretary of
Labor and National Labor Relations Commission which reversed the Arbitrators rulings in favor of petitioners herein.
The following factual background of this case appears from the record:
On January 2, 1968, the rank and file workers of the Tropical Hut Food Market Incorporated, referred to herein as
respondent company, organized a local union called the Tropical Hut Employees Union, known for short as the
THEU, elected their officers, adopted their constitution and by-laws and immediately sought affiliation with the
National Association of Trade Unions (NATU). On January 3, 1968, the NATU accepted the THEU application for
affiliation. Following such affiliation with NATU, Registration Certificate No. 5544-IP was issued by the Department
of Labor in the name of the Tropical Hut Employees Union NATU. It appears, however, that NATU itself as a labor
federation, was not registered with the Department of Labor.
After several negotiations were conducted between THEU-NATU, represented by its local president and the national
officers of the NATU, particularly Ignacio Lacsina, President, Pacifico Rosal, Executive Vice-President and Marcelino
Lontok, Jr., Vice President, and respondent Tropical Hut Food Market, Incorporated, thru its President and General
Manager, Cesar Azcona, Sr., a Collective Bargaining Agreement was concluded between the parties on April 1, 1968,
the term of which expired on March 31, 1971. Said agreement' contained these clear and unequivocal terms:
This Agreement made and entered into this __________ day of ___________, 1968, by and between:
The Tropical Hut Food Market, Inc., a corporation duly organized and existing under and by virtue of the laws of the
Republic of the Philippines, with principal office at Quezon City, represented in this Act by its President, Cesar B.
Azcona (hereinafter referred to as the Company)
and
The Tropical Hut Employees Union NATU, a legitimate labor organization duly organized and existing in
accordance with the laws of the Republic of the Philippines, and affiliated with the National Association of Trade
Unions, with offices at San Luis Terraces, Ermita, Manila, and represented in this Act by its undersigned officers
(hereinafter referred to as the UNION)
Witnesseth:
xxx xxx xxx
Article I
Coverage and Effectivity
Sec. 1. The COMPANY recognizes the UNION as the sole and exclusive collective bargaining agent for all its workers
and employees in all matters concerning wages, hours of work, and other terms and conditions of employment.
xxx xxx xxx
Article III
Union Membership and Union Check-off
Sec. 1 . . . Employees who are already members of the UNION at the time of the signing of this Agreement or who
become so thereafter shall be required to maintain their membership therein as a condition of continued
employment.
xxx xxx xxx
Sec. 3Any employee who is expelled from the UNION for joining another federation or forming another union, or
who fails or refuses to maintain his membership therein as required, . . . shall, upon written request of the UNION be
discharged by the COMPANY. (Rollo, pp. 667-670)
And attached to the Agreement as Appendix "A" is a check-off Authorization Form, the terms of which are as
follows:
We, the undersigned, hereby designate the NATIONAL Association of Trade Unions, of which the TROPICAL HUT
EMPLOYEES UNION is an affiliate as sole collective bargaining agent in all matters relating to salary rates, hours of
work and other terms and conditions of employment in the Tropical Hut Food Market, Inc. and we hereby authorize
the said company to deduct the amount ofFour (P 4.00) Pesos each every month as our monthly dues and to deliver
the amount to the Treasurer of the Union or his duly authorized representatives. (Rollo, pp. 680-684)
On May 21, 1971, respondent company and THEU-NATU entered into a new Collective Bargaining Agreement which
ended on March 31, 1974. This new CBA incorporated the previous union-shop security clause and the attached
check-off authorization form.
Sometime in July, 1973, Arturo Dilag, incumbent President of THEU-NATU, was appointed by the respondent
company as Assistant Unit Manager. On July 24, 1973, he wrote the general membership of his union that for reason
of his present position, he was resigning as President of the THEU-NATU effective that date. As a consequence
thereof, his Vice-President, Jose Encinas, assumed and discharged the duties of the presidency of the THEU-NATU.
On December 19,1973, NATU received a letter dated December 15, 1973, jointly signed by the incumbent officers of
the local union informing the NATU that THEU was disaffiliating from the NATU federation. On December 20, 1973,
the Secretary of the THEU, Nemesio Barro, made an announcement in an open letter to the general membership of
the THEU, concerning the latter's disaffiliation from the NATU and its affiliation with the Confederation of General
Workers (CGW). The letter was passed around among the members of the THEU-NATU, to which around one
hundred and thirty-seven (137) signatures appeared as having given their consent to and acknowledgment of the
decision to disaffiliate the THEU from the NATU.
On January 1, 1974, the general membership of the so-called THEU-CGW held its annual election of officers, with
Jose Encinas elected as President. On January 3, 1974, Encinas, in his capacity as THEU-CGW President, informed the
respondent company of the result of the elections. On January 9, 1974, Pacifico Rosal, President of the
Confederation of General Workers (CGW), wrote a letter in behalf of complainant THEU-CGW to the respondent
company demanding the remittance of the union dues collected by the Tropical Hut Food Mart, Incorporated to the
THEU-CGW, but this was refused by the respondent company.
On January 11, 1974, the NATU thru its Vice-President Marcelino Lontok, Jr., wrote Vidal Mantos, requiring the latter
to assume immediately the position of President of the THEU-NATU in place of Jose Encinas, but the position was
declined by Mantos. On the same day, Lontok, Jr., informed Encinas in a letter, concerning the request made by the
NATU federation to the respondent company to dismiss him (Encinas) in view of his violation of Section 3 of Article
III of the Collective Bargaining Agreement. Encinas was also advised in the letter that NATU was returning the letter
of disaffiliation on the ground that:
1. Under the restructuring program NOT of the Bureau of Labor but of the Philippine National Trade Union Center in
conjunction with the NATU and other established national labor centers, retail clerks and employees such as our
members in the Tropical Hut pertain to Industry II which by consensus, has been assigned already to the jurisdiction
of the NATU;
2. The right to disaffiliate belongs to the union membership who on the basis of verified reports received by
have not even been consulted by you regarding the matter;
3. Assuming that the disaffiliation decision was properly reached; your letter nevertheless is unacceptable in view of
Article V, Section 1, of the NATU Constitution which provides that "withdrawal from the organization shall he valid
provided three (3) months notice of intention to withdraw is served upon the National Executive Council." (p.
281, Rollo)
In view of NATU's request, the respondent company, on the same day, which was January 11, 1974, suspended
Encinas pending the application for clearance with the Department of Labor to dismiss him. On January 12, 1974,
members of the THEU-CGW passed a resolution protesting the suspension of Encinas and reiterated their ratification
and approval of their union's disaffiliation from NATU and their affiliation with the Confederation of General
Workers (CGW). It was Encinas' suspension that caused the filing of NLRC Case No. LR-2511 on January 11, 1974
against private respondents herein, charging them of unfair labor practice.
On January 15,1974, upon the request of NATU, respondent company applied for clearance with the Secretary of
Labor to dismiss the other officers and members of THEU-CGW. The company also suspended them effective that
day. NLRC Case No. LR-2521 was filed by THEU-CGW and individual complainants against private respondents for
unfair labor practices.
On January 19, 1974, Lontok, acting as temporary chairman, presided over the election of officers of the remaining
THEU-NATU in an emergency meeting pending the holding of a special election to be called at a later date. In the
alleged election, Arturo Dilag was elected acting THEU-NATU President together with the other union officers. On
February 14, 1974, these temporary officers were considered as having been elected as regular officers for the year
1974.
On January 30, 1974, petitioner THEU-CGW wrote a letter to Juan Ponce Enrile, Secretary of National Defense,
complaining of the unfair labor practices committed by respondent company against its members and requesting
assistance on the matter. The aforementioned letter contained the signatures of one hundred forty-three (143)
members.
On February 24,1974, the secretary of THEU-NATU, notified the entire rank and file employees of the company that
they will be given forty-eight (48) hours upon receipt of the notice within which to answer and affirm their
membership with THEU-NATU. When the petitioner employees failed to reply, Arturo Dilag advised them thru
letters dated February 26, March 2 and 5, 1974, that the THEU-NATU shall enforce the union security clause set
forth in the CBA, and that he had requested respondent company to dismiss them.
Respondent company, thereafter, wrote the petitioner employees demanding the latter's comment on Dilag's
charges before action was taken thereon. However, no comment or reply was received from petitioners. In view of
this, Estelita Que, President/General Manager of respondent company, upon Dilag's request, suspended twenty four
(24) workers on March 5, 1974, another thirty seven (37) on March 8, 1974 and two (2) more on March 11, 1974,
pending approval by the Secretary of Labor of the application for their dismissal.
As a consequence thereof, NLRC Case Nos. LR-2971, LR-3015 and an unnumbered case were filed by petitioners
against Tropical Hut Food Market, Incorporated, Estelita Que, Hernando Sarmiento and Arturo Dilag.
It is significant to note that the joint letter petition signed by sixty-seven (67) employees was filed with the Secretary
of Labor, the NLRC Chairman and Director of Labor Relations to cancel the words NATU after the name of Tropical
Hut Employee Union under Registration Certificate No. 5544 IP. Another letter signed by one hundred forty-six (146)
members of THEU-CGW was sent to the President of the Philippines informing him of the unfair labor practices
committed by private respondents against THEU-CGW members.
After hearing the parties in NLRC Cases Nos. 2511 and 2521 jointly filed with the Labor Arbiter, Arbitrator Daniel
Lucas issued an order dated March 21, 1974, holding that the issues raised by the parties became moot and
academic with the issuance of NLRC Order dated February 25, 1974 in NLRC Case No. LR-2670, which directed the
holding of a certification election among the rank and file workers of the respondent company between the THEU-
NATU and THEU-CGW. He also ordered: a) the reinstatement of all complainants; b) for the respondent company to
cease and desist from committing further acts of dismissals without previous order from the NLRC and for the
complainant Tropical Hut Employees UNION-CGW to file representation cases on a case to case basis during the
freedom period provided for by the existing CBA between the parties (pp. 91-93, Rollo).
With regard to NLRC Case Nos. LR-2971, LR-3015, and the unnumbered case, Arbitrator Cleto T. Villatuya rendered a
decision dated October 14, 1974, the dispositive portion of which states:
Premises considered, a DECISION is hereby rendered ordering respondent company to reinstate immediately the
sixty three (63) complainants to their former positions with back wages from the time they were illegally suspended
up to their actual reinstatement without loss of seniority and other employment rights and privileges, and ordering
the respondents to desist from further committing acts of unfair labor practice. The respondent company's
application for clearance filed with the Secretary of Labor to terminate the subject complainants' services effective
March 20 and 23, 1974, should be denied.
SO ORDERED. (pp. 147-148, Rollo)
From the orders rendered above by Abitrator Daniel Lucas in NLRC Cases No. LR-2511 and LR-2521 and by Arbitrator
Cleto Villatuya in NLRC Cases Nos. LR-2971, LR-3015, and the unnumbered case, all parties thereto, namely,
petitioners herein, respondent company, NATU and Dilag appealed to the National Labor Relations Commission.
In a decision rendered on August 1, 1975, the National Labor Relations Commission found the private respondents'
appeals meritorious, and stated, inter alia:
WHEREFORE, in view of the foregoing premises, the Order of Arbitrator Lucas in NLRC CASE NOS. LR-2511, 2521 and
the decision of Arbitrator Villatuya in NLRC CASE NOS. LR-2971, 3015 and the unnumbered Case are hereby
REVERSED. Accordingly, the individual complainants are deemed to have lost their status as employees of the
respondent company. However, considering that the individual complainants are not presumed to be familiar with
nor to have anticipated the legal mesh they would find themselves in, after their "disaffiliation" from National
Association of Trade Unions and the THEU-NATU, much less the legal consequences of the said action which we
presume they have taken in all good faith; considering, further, that the thrust of the new orientation in labor
relations is not towards the punishment of acts violative of contractual relations but rather towards fair adjustments
of the resulting complications; and considering, finally, the consequent economic hardships that would be visited on
the individual complainants, if the law were to be strictly enforced against them, this Commission is constrained to
be magnanimous in this instant, notwithstanding its obligation to give full force and effect to the majesty of the law,
and hereby orders the respondent company, under pain of being cited for contempt for failure to do so, to give the
individual complainants a second chance by reemploying them upon their voluntary reaffirmation of membership
and loyalty to the Tropical Hut Employees Union-NATU and the National Association of Trade Unions in the event it
hires additional personnel.
SO ORDERED. (pp. 312-313, Rollo)
The petitioner employees appealed the decision of the respondent National Labor Relations Commission to the
Secretary of Labor. On February 23, 1976, the Secretary of Labor rendered a decision affirming the findings of the
Commission, which provided inter alia:
We find, after a careful review of the record, no sufficient justification to alter the decision appealed from except
that portion of the dispositive part which states:
. . . this Commission . . . hereby orders respondent company under pain of being cited for contempt for failure to do
so, to give the individual complainants a second chance by reemploying them upon their voluntary reaffirmation of
membership and loyalty to the Tropical Hut Employees UNION-NATU and the National Association of Trade Union in
the event it hires additional personnel.
Compliance by respondent of the above undertaking is not immediately feasible considering that the same is based
on an uncertain event, i.e., reemployment of individual complainants "in the event that management hires
additional personnel," after they shall have reaffirmed their loyalty to THEU-NATU, which is unlikely.
In lieu of the foregoing, and to give complainants positive relief pursuant to Section 9, Implementing Instruction No.
1. dated November 9, 1972, respondent is hereby ordered to grant to all the individual complainants financial
assistance equivalent to one (1) month salary for every year of service.
WHEREFORE, with the modification as above indicated, the Decision of the National Labor Relations Commission is
hereby affirmed.
SO ORDERED.(pp. 317-318, Rollo)
From the various pleadings filed and arguments adduced by petitioners and respondents, the following issues
appear to be those presented for resolution in this petition to wit: 1) whether or not the petitioners failed to
exhaust administrative remedies when they immediately elevated the case to this Court without an appeal having
been made to the Office of the President; 2) whether or not the disaffiliation of the local union from the national
federation was valid; and 3) whether or not the dismissal of petitioner employees resulting from their unions
disaffiliation for the mother federation was illegal and constituted unfair labor practice on the part of respondent
company and federation.
We find the petition highly meritorious.
The applicable law then is the Labor Code, PD 442, as amended by PD 643 on January 21, 1975, which states:
Art. 222. Appeal . . .
xxx xxx xxx
Decisions of the Secretary of Labor may be appealed to the President of the Philippines subject to such conditions or
limitations as the President may direct. (Emphasis ours)
The remedy of appeal from the Secretary of Labor to the Office of the President is not a mandatory requirement
before resort to courts can be had, but an optional relief provided by law to parties seeking expeditious disposition
of their labor disputes. Failure to avail of such relief shall not in any way served as an impediment to judicial
intervention. And where the issue is lack of power or arbitrary or improvident exercise thereof, decisions of the
Secretary of Labor may be questioned in a certiorari proceeding without prior appeal to the President (Arrastre
Security Association TUPAS v. Ople, No. L-45344, February 20, 1984, 127 SCRA 580). Since the instant petition
raises the same issue of grave abuse of discretion of the Secretary of Labor amounting to lack of or in excess of
jurisdiction in deciding the controversy, this Court can properly take cognizance of and resolve the issues raised
herein.
This brings Us to the question of the legality of the dismissal meted to petitioner employees. In the celebrated case
of Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, L-33187, September 4, 1975, 66 SCRA 512, We held
that the validity of the dismissals pursuant to the union security clause in the collective bargaining agreement hinges
on the validity of the disaffiliation of the local union from the federation.
The right of a local union to disaffiliate from its mother federation is well-settled. A local union, being a separate and
voluntary association, is free to serve the interest of all its members including the freedom to disaffiliate when
circumstances warrant. This right is consistent with the constitutional guarantee of freedom of association
(Volkschel Labor Union v. Bureau of Labor Relations, No. L-45824, June 19, 1985, 137 SCRA 42).
All employees enjoy the right to self organization and to form and join labor organizations of their own choosing for
the purpose of collective bargaining and to engage in concerted activities for their mutual aid or protection. This is a
fundamental right of labor that derives its existence from the Constitution. In interpreting the protection to labor
and social justice provisions of the Constitution and the labor laws or rules or regulations, We have always adopted
the liberal approach which favors the exercise of labor rights.
Relevant on this point is the basic principle We have repeatedly in affirmed in many rulings:
. . . The locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining
power between the employer and their employee-members in the economic struggle for the fruits of the joint
productive effort of labor and capital; and the association of the locals into the national union (PAFLU) was in
furtherance of the same end. These associations are consensual entities capable of entering into such legal relations
with their member. The essential purpose was the affiliation of the local unions into a common enterprise to
increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet the
locals remained the basic units of association, free to serve their own and the common interest of all, subject to the
restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for
mutual welfare upon the terms laid down in the agreement which brought it into existence. (Adamson & Adamson,
Inc. v. CIR, No. L-35120, January 31, 1984, 127 SCRA 268; Elisco-Elirol Labor Union (NAFLU) v. Noriel, No. L-41955,
December 29, 1977, 80 SCRA 681; Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., supra).
The inclusion of the word NATU after the name of the local union THEU in the registration with the Department of
Labor is merely to stress that the THEU is NATU's affiliate at the time of the registration. It does not mean that the
said local union cannot stand on its own. Neither can it be interpreted to mean that it cannot pursue its own
interests independently of the federation. A local union owes its creation and continued existence to the will of its
members and not to the federation to which it belongs.
When the local union withdrew from the old federation to join a new federation, it was merely exercising its primary
right to labor organization for the effective enhancement and protection of common interests. In the absence of
enforceable provisions in the federation's constitution preventing disaffiliation of a local union a local may sever its
relationship with its parent (People's Industrial and Commercial Employees and Workers Organization (FFW) v.
People's Industrial and Commercial Corporation, No. 37687, March 15, 1982, 112 SCRA 440).
There is nothing in the constitution of the NATU or in the constitution of the THEU-NATU that the THEU was
expressly forbidden to disaffiliate from the federation (pp. 62, 281, Rollo), The alleged non-compliance of the local
union with the provision in the NATU Constitution requiring the service of three months notice of intention to
withdraw did not produce the effect of nullifying the disaffiliation for the following grounds: firstly, NATU was not
even a legitimate labor organization, it appearing that it was not registered at that time with the Department of
Labor, and therefore did not possess and acquire, in the first place, the legal personality to enforce its constitution
and laws, much less the right and privilege under the Labor Code to organize and affiliate chapters or locals within
its group, and secondly, the act of non-compliance with the procedure on withdrawal is premised on purely
technical grounds which cannot rise above the fundamental right of self-organization.
Respondent Secretary of Labor, in affirming the decision of the respondent Commission, concluded that the
supposed decision to disaffiliate was not the subject of a free and open discussion and decision on the part of the
THEU-NATU general membership (p. 305, Rollo). This, however, is contradicted by the evidence on record.
Moreover, We are inclined to believe Arbitrator Villatuya's findings to the contrary, as follows:
. . . . However, the complainants refute this allegation by submitting the following: a) Letter dated December 20,
1.973 signed by 142 members (Exhs. "B to B-5") resolution dated January 12, 1974, signed by 140 members (Exhs. "H
to H-6") letter dated February 26, 1974 to the Department of Labor signed by 165 members (Exhs. "I to I-10"); d)
letter dated January 30, 1974 to the Secretary of the National Defense signed by 144 members (Exhs. "0 to 0-5")
and; e) letter dated March 6, 1974 signed by 146 members addressed to the President of the Philippines (Exhs. "HH
to HH-5"), to show that in several instances, the members of the THEU-NATU have acknowledged their disaffiliation
from NATU. The letters of the complainants also indicate that an overwhelming majority have freely and voluntarily
signed their union's disaffiliation from NATU, otherwise, if there was really deception employed in securing their
signatures as claimed by NATU/ Dilag, it could not be possible to get their signatures in five different documents. (p.
144, Rollo)
We are aware of the time-honored doctrine that the findings of the NLRC and the Secretary of Labor are binding on
this Court if supported by substantial evidence. However, in the same way that the findings of facts unsupported by
substantial and credible evidence do not bind this Court, neither will We uphold erroneous conclusions of the NLRC
and the Secretary of Labor when We find that the latter committed grave abuse of discretion in reversing the
decision of the labor arbiter (San Miguel Corporation v. NLRC, L-50321, March 13, 1984, 128 SCRA 180). In the
instant case, the factual findings of the arbitrator were correct against that of public respondents.
Further, there is no merit in the contention of the respondents that the act of disaffiliation violated the union
security clause of the CBA and that their dismissal as a consequence thereof is valid. A perusal of the collective
bargaining agreements shows that the THEU-NATU, and not the NATU federation, was recognized as the sole and
exclusive collective bargaining agent for all its workers and employees in all matters concerning wages, hours of
work and other terms and conditions of employment (pp. 667-706, Rollo). Although NATU was designated as the
sole bargaining agent in the check-off authorization form attached to the CBA, this simply means it was acting only
for and in behalf of its affiliate. The NATU possessed the status of an agent while the local union remained the basic
principal union which entered into contract with the respondent company. When the THEU disaffiliated from its
mother federation, the former did not lose its legal personality as the bargaining union under the CBA. Moreover,
the union security clause embodied in the agreements cannot be used to justify the dismissals meted to petitioners
since it is not applicable to the circumstances obtaining in this case. The CBA imposes dismissal only in case an
employee is expelled from the union for joining another federation or for forming another union or who fails or
refuses to maintain membership therein. The case at bar does not involve the withdrawal of merely some
employees from the union but of the whole THEU itself from its federation. Clearly, since there is no violation of the
union security provision in the CBA, there was no sufficient ground to terminate the employment of petitioners.
Public respondents considered the existence of Arturo Dilag's group as the remaining true and valid union. We,
however, are inclined to agree instead with the Arbitrator's findings when he declared:
. . . . Much more, the so-called THEU-NATU under Dilag's group which assumes to be the original THEU-NATU has a
very doubtful and questionable existence not to mention that the alleged president is performing supervisory
functions and not qualified to be a bona fide member of the rank and file union. (p. 146, Rollo)
Records show that Arturo Dilag had resigned in the past as President of THEU-NATU because of his promotion to a
managerial or supervisory position as Assistant Unit Manager of respondent Company. Petitioner Jose Encinas
replaced Dilag as President and continued to hold such position at the time of the disaffiliation of the union from the
federation. It is therefore improper and contrary to law for Dilag to reassume the leadership of the remaining group
which was alleged to be the true union since he belonged to the managerial personnel who could not be expected
to work for the betterment of the rank and file employees. Besides, managers and supervisors are prohibited from
joining a rank and file union (Binalbagan Isabela Sugar Co., Inc. (BISCOM) v. Philippine Association of Free Labor
Unions (PAFLU), et al., L-18782, August 29, 1963, 8 SCRA 700). Correspondingly, if a manager or supervisor organizes
or joins a rank and file union, he will be required to resign therefrom (Magalit, et al. v. Court of Industrial Relations,
et al., L-20448, May 25, 1965,14 SCRA 72).
Public respondents further submit that several employees who disaffiliate their union from the NATU subsequently
retracted and reaffirmed their membership with the THEU-NATU. In the decision which was affirmed by respondent
Secretary of Labor, the respondent Commission stated that:
. . . out of the alleged one hundred and seventy-one (171) members of the THEU-CGW whose signatures appeared in
the "Analysis of Various Documents Signed by Majority Members of the THEU-CGW, (Annex "T", Complainants),
which incidentally was relied upon by Arbitrator Villatuya in holding that complainant THEU-CGW commanded the
majority of employees in respondent company, ninety-three (93) of the alleged signatories reaffirmed their
membership with the THEU-NATU and renounced whatever connection they may have had with other labor unions,
(meaning the complainant THEU-CGW) either through resolution or membership application forms they have
unwittingly signed." (p. 306, Rollo)
Granting arguendo, that the fact of retraction is true, the evidence on record shows that the letters of retraction
were executed on various dates beginning January 11, 1974 to March 8, 1974 (pp. 278-280, Rollo). This shows that
the retractions were made more or less after the suspension pending dismissal on January 11, 1974 of Jose Encinas,
formerly THEU-NATU President, who became THEU-CGW President, and the suspension pending their dismissal of
the other elected officers and members of the THEU-CGW on January 15, 1974. It is also clear that some of the
retractions occurred after the suspension of the first set of workers numbering about twenty-four (24) on March 5,
1974. There is no use in saying that the retractions obliterated the act of disaffiliation as there are doubts that they
were freely and voluntarily done especially during such time when their own union officers and co-workers were
already suspended pending their dismissal.
Finally, with regard to the process by which the workers were suspended or dismissed, this Court finds that it was
hastily and summarily done without the necessary due process. The respondent company sent a letter to petitioners
herein, advising them of NATU/Dilag's recommendation of their dismissal and at the same time giving them forty-
eight (48) hours within which to comment (p. 637, Rollo). When petitioners failed to do so, respondent company
immediately suspended them and thereafter effected their dismissal. This is certainly not in fulfillment of the
mandate of due process, which is to afford the employee to be dismissed an opportunity to be heard.
The prerogative of the employer to dismiss or lay-off an employee should be done without abuse of discretion or
arbitrainess, for what is at stake is not only the employee's name or position but also his means of livelihood. Thus,
the discharge of an employee from his employment is null and void where the employee was not formally
investigated and given the opportunity to refute the alleged findings made by the company (De Leon v. NLRC, L-
52056, October 30, 1980, 100 SCRA 691). Likewise, an employer can be adjudged guilty of unfair labor practice for
having dismissed its employees in line with a closed shop provision if they were not given a proper hearing
(Binalbagan-Isabela Sugar Co., Inc.,(BISCOM) v. Philippine Association of Free Labor Unions (PAFLU) et al., L-18782,
August 29, 1963, 8 SCRA 700).
In view of the fact that the dispute revolved around the mother federation and its local, with the company
suspending and dismissing the workers at the instance of the mother federation then, the company's liability should
be limited to the immediate reinstatement of the workers. And since their dismissals were effected without previous
hearing and at the instance of NATU, this federation should be held liable to the petitioners for the payment of their
backwages, as what We have ruled in the Liberty Cotton Mills Case (supra).
ACCORDINGLY, the petition is hereby GRANTED and the assailed decision of respondent Secretary of Labor is
REVERSED and SET ASIDE, and the respondent company is hereby ordered to immediately reinstate all the petitioner
employees within thirty (30) days from notice of this decision. If reinstatement is no longer feasible, the respondent
company is ordered to pay petitioners separation pay equivalent to one (1) month pay for every year of service. The
respondent NATU federation is directed to pay petitioners the amount of three (3) years backwages without
deduction or qualification. This decision shall be immediately executory upon promulgation and notice to the
parties.
SO ORDERED.
#10 G.R. No. L-50283-84 April 20, 1983
DOLORES VILLAR, ROMEO PEQUITO, DIONISIO RAMOS, BENIGNO MAMARALDO, ORLANDO ACOSTA, RECITACION
BERNUS, ANSELMA ANDAN, ROLANDO DE GUZMAN and RITA LLAGAS, petitioners,
vs.
THE HON. AMADO G. INCIONG, as Deputy Minister of the Ministry of Labor, AMIGO MANUFACTURING
INCORPORATED and PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU), respondents.
Aniceto Haber for petitioners.
Roberto T. Neri for respondents.

GUERRERO, J.:
Petition for review by certiorari to set aside the Order dated February 15, 1979 of respondent Deputy Minister
Amado G. Inciong affirming the Decision of the OIC of Regional Office No. 4 dated October 14, 1978 which jointly
resolved RO4-Case No. T-IV-3549-T and RO4-Case No. RD 4-4088-77-T.
The facts are as follows:
Petitioners were members of the Amigo Employees Union-PAFLU, a duly registered labor organization which, at the
time of the present dispute, was the existing bargaining agent of the employees in private respondent Amigo
Manufacturing, Inc. (hereinafter referred to as Company). The Company and the Amigo Employees Union-PAFLU had
a collective bargaining agreement governing their labor relations, which agreement was then about to expire on
February 28, 1977. Within the last sixty (60) days of the CBA, events transpired giving rise to the present dispute.
On January 5, 1977, upon written authority of at least 30% of the employees in the company, including the
petitioners, the Federation of Unions of Rizal (hereinafter referred to as FUR) filed a petition for certification election
with the Med-Arbiter's Office, Regional Office No. 4 of the Ministry of Labor and Employment. The petition was,
however, opposed by the Philippine Association of Free Labor Unions (hereinafter referred to as PAFLU) with whom,
as stated earlier, the Amigo Employees Union was at that time affiliated. PAFLU's opposition cited the "Code of
Ethics" governing inter-federation disputes among and between members of the Trade Unions Congress of the
Philippines (hereinafter referred to as TUCP). Consequently, the Med-Arbiter indorsed the case to TUCP for
appropriate action but before any such action could be taken thereon, the petitioners disauthorized FUR from
continuing the petition for certification election for which reason FUR withdrew the petition.
On February 7, 1977, the same employees who had signed the petition filed by FUR signed a joint resolution
reading in toto as follows:
Sama-Samang Kapasiyahan
1. TUMIWALAG bilang kasaping Unyon ng Philippine Association of Free Labor Unions (PAFLU) at kaalinsabay nito,
inaalisan namin ang PAFLU ng kapangyarihan na katawanin kami sa anumang pakikipagkasundo (CBA) sa
Pangasiwaan ng aming pinapasukan at kung sila man ay nagkasundo o magkakasundo sa kabila ng pagtitiwalag na
ito, ang nasabing kasunduan ay hindi namin pinagtitibay at tahasang aming itinatakwil/tinatanggihan;
2. BINABAWI namin ang aming pahintulot sa Federation of Unions of Rizal (FUR) na katawanin kami sa Petition for
Certification Election (RO4-MED Case No. 743-77) at/o sa sama-samang pakikipagkasundo sa aming patrons;
3. PANATILIHIN na nagsasarili (independent) ang aming samahan, AMIGO EMPLOYEES' UNION, alinsunod sa Artikulo
240 ng Labor Code;
4. MAGHAIN KAAGAD ang aming Unyong nagsasarili, sa pamumuno ng aming pangsamantalang Opisyal na
kinatawan, si Ginang DOLORES VILLAR, ng Petition for Certification Election sa Department of Labor, para kilalanin
ang aming Unyong nagsasarili bilang Tanging kinatawan ng mga manggagawa sa sama-samang pakikipagkasundo
(CBA);
5. BIGYAN ng kopya nito ang bawa't kinauukulan at ang mga kapasiyahang ito ay magkakabisa sa oras na matanggap
ng mga kinauukulan ang kani-kanilang sipi nito.
1

Immediately thereafter or on February 9, 1977, petitioner Dolores Villar, representing herself to be the authorized
representative of the Amigo Employees Union, filed a petition for certification election in the Company before
Regional Office No. 4, with the Amigo Employees Union as the petitioner. The Amigo Employees Union-PAFLU
intervened and moved for the dismissal of the petition for certification election filed by Dolores Villar, citing as
grounds therefor, viz: (a) the petition lacked the mandatory requisite of at least 30% of the employees in the
bargaining unit; (2) Dolores Villar had no legal personality to sign the petition since she was not an officer of the
union nor is there factual or legal basis for her claim that she was the authorized representative of the local union;
(3) there was a pending case for the same subject matter filed by the same individuals; (4) the petition was barred
by the new CBA concluded on February 15, 1977; (5) there was no valid disaffiliation from PAFLU; and (6) the
supporting signatures were procured through false pretenses.
Finding that the petition involved the same parties and causes of action as the case previously indorsed to the TUCP,
the Med-Arbiter dismiss the petition filed by herein petitioner Villar, which dismissal is still pending appeal before
the Bureau of Labor Relations.
In the meantime, on February 14, 1977, the Amigo Employees Union- PAFLU called a special meeting of its general
membership. A Resolution was thereby unanimously approved which called for the investigation by the PAFLU
national president, pursuant to the constitution and by-laws of the Federation, of all of the petitioners and one
Felipe Manlapao, for "continuously maligning, libelling and slandering not only the incumbent officers but even the
union itself and the federation;" spreading 'false propaganda' that the union officers were 'merely appointees of the
management', and for causing divisiveness in the union.
Pursuant to the Resolution approved by the Amigo Employees Union- PAFLU, the PAFLU, through its national
President, formed a Trial Committee to investigate the local union's charges against the petitioners for acts of
disloyalty inimical to the interest of the local union, as well as directing the Trial Committee to subpoena the
complainants (Amigo Employees Union-PAFLU) and the respondents (herein petitioners) for investigation, to
conduct the said investigation and to submit its findings and recommendations for appropriate action.
And on the same date of February 15, 1977, the Amigo Employees Union- PAFLU and the Company concluded a new
CBA which, besides granting additional benefits to the workers, also reincorporated the same provisions of the
existing CBA, including the union security clause reading, to wit:
ARTICLE III
UNION SECURITY WITH RESPECT TO PRESENT MEMBERS
All members of the UNION as of the signing of this Agreement shall remain members thereof in good standing.
Therefore, any members who shall resign, be expelled, or shall in any manner cease to be a member of the UNION,
shall be dismissed from his employment upon written request of the UNION to the Company.
2

Subsequently, petitioners were summoned to appear before the PAFLU Trial Committee for the aforestated
investigation of the charges filed against them by the Amigo Employees Union-PAFLU. Petitioners, however, did not
attend but requested for a "Bill of Particulars" of the charges, which charges were stated by the Chairman of the
committee as follows:
1. Disaffiliating from PAFLU and affiliating with the Federation of Unions of Rizal (FUR).
2. Filling petition for certification election with the Bureau of Labor Relations and docketed as Case No. R04-MED-
830-77 and authorizing a certain Dolores Villar as your authorized representative without the official sanction of the
mother Federation- PAFLU.
3. Maligning, libelling and slandering the incumbent officers of the union as well as of the PAFLU Federation.
4. By spreading false propaganda among members of the Amigo Employees Union-PAFLU that the incumbent union
officers are 'merely appointees' of the management.
5. By sowing divisiveness instead of togetherness among members of the Amigo Employees Union-PAFLU.
6. By conduct unbecoming as members of the Amigo Employees Union- PAFLU which is highly prejudicial to the
union as well as to the PAFLU Federation.
All these charges were formalized in a resolution of the incumbent officers of the Amigo Employees Union-PAFLU
dated February 14, 1977.
3

Not recognizing PAFLU's jurisdiction over their case, petitioners again refused to participate in the investigation
rescheduled and conducted on March 9, 1979. Instead, petitioners merely appeared to file their Answer to the
charges and moved for a dismissal.
Petitioners contend in their Answer that neither the disaffiliation of the Amigo Employees Union from PAFLU nor the
act of filing the petition for certification election constitute disloyalty as these are in the exercise of their
constitutional right to self-organization. They further contended that PAFLU was without jurisdiction to investigate
their case since the charges, being intra-union problems within the Amigo Employees Union-PAFLU, should be
conducted pursuant to the provisions of Article XI, Sections 2, 3, 4 and 5 of the local union's constitution and by-
laws.
The complainants, all of whom were the then incumbent officers of the Amigo Employees Union-PAFLU, however,
appeared and adduced their evidence supporting the charges against herein petitioners.
Based on the findings and recommendations of the PAFLU trial committee, the PAFLU President, on March 15, 1977,
rendered a decision finding the petitioners guilty of the charges and disposing in the last paragraph thereof, to wit,
Excepting Felipe Manlapao, the expulsion from the AMIGO EMPLOYEES UNION of all the other nine (9) respondents,
Dionisio Ramos, Recitation Bernus, Dolores Villar, Romeo Dequito, Rolando de Guzman, Anselma Andan, Rita Llagas,
Benigno Mamaradlo and Orlando Acosta is hereby ordered, and as a consequence the Management of the
employer, AMIGO MANUFACTURING, INC. is hereby requested to terminate them from their employment in
conformity with the security clause in the collective bargaining agreement. Further, the Trial Committee is directed
to investigate Felipe Manlapao when he shall have reported back for duty.
4

Petitioners appealed the Decision to the PAFLU, citing the same grounds as before, and in addition thereto, argued
that the PAFLU decision cannot legally invoke a CBA which was unratified, not certified, and entered into without
authority from the union general membership, in asking the Company to terminate them from their employment.
The appeal was, likewise, denied by PAFLU in a Resolution dated March 28, 1977.
After denying petitioner's appeal, PAFLU on March 28, 1977 sent a letter to the Company stating, to wit,
We are furnishing you a copy of our Resolution on the Appeal of the respondent in Administrative Case No. 2, Series
of 1977, Amigo Employees Union-PAFLU vs. Dionisio Ramos, et al.
In view of the denial of their appeal and the Decision of March 15, 1977 having become final and executory we
would appreciate full cooperation on your part by implementing the provision of our CBA on security clause by
terminating the respondents concerned from their employment.
5

This was followed by another letter from PAFLU to the Company dated April 25, 1977, reiterating the demand to
terminate the employment of the petitioners pursuant to the security clause of the CBA, with a statement absolving
the Company from any liability or damage that may arise from petitioner's termination.
Acting on PAFLU's demand, the Company informed PAFLU that it will first secure the necessary clearances to
terminate petitioners. By letter dated April 28, 1977, PAFLU requested the Company to put petitioners under
preventive suspension pending the application for said clearances to terminate the petitioners, upon a declaration
that petitioners' continued stay within the work premises will "result in the threat to the life and limb of the other
employees of the company."
6

Hence, on April 29, 1977, the Company filed the request for clearance to terminate the petitioners before the
Department of Labor, Regional Office No. 4. The application, docketed as RO4-Case No. 7-IV-3549-T, stated as cause
therefor, "Demand by the Union Pursuant to the Union Security Clause," and further, as effectivity date,
"Termination-upon issuance of clearance; Suspension-upon receipt of notice of workers concerned."
7
Petitioners
were then informed by memorandum dated April 29, 1977 that the Company has applied for clearance to terminate
them upon demand of PAFLU, and that each of them were placed under preventive suspension pending the
resolution of the said applications. The security guard was, likewise, notified to refuse petitioners entry into the
work premises.
8

In an earlier development, on April 25, 1977, or five days before petitioners were placed under preventive
suspension, they filed a complaint with application for preliminary injunction before the same Regional Office No. 4,
docketed as RO4-Case No. RD-4-4088-77-T, praying that after due notice and hearing, "(1) A preliminary injunction
be issued forthwith to restrain the respondents from doing the act herein complained of, namely: the dismissal of
the individual complainants from their employment; (2) After due hearing on the merits of the case, an Order be
entered denying and/or setting aside the Decision dated March 15, 1977 and the Resolution dated March 28, 1977,
issued by respondent Onofre P. Guevara, National President of respondent PAFLU; (3) The Appeal of the individual
complainants to the General Membership of the complainant AMIGO EMPLOYEES UNION, dated March 22, 1977,
pursuant to Sections 2, 3, 4 & 5, Article XI in relation of Section 1, Article XII of the Union Constitution and By-Laws,
be given due course; and (4) Thereafter, the said preliminary injunction be made permanent, with costs, and with
such further orders/reliefs that are just and equitable in the premises."
9

In these two cases filed before the Regional Office No. 4, the parties adopted their previous positions when they
were still arguing before the PAFLU trial committee.
On October 14, 1977, Vicente Leogardo, Jr., Officer-in-Charge of Regional Office No. 4, rendered a decision jointly
resolving said two cases, the dispositive portion of which states, to wit,
IN VIEW OF THE FOREGOING, judgment is hereby rendered granting the application of the Amigo Manufacturing,
Inc., for clearance to terminate the employment of Dolores D. Villar, Dionisio Ramos, Benigno Mamaraldo, Orlando
Acosta, Recitacion Bernus, Anselma Andan, Rolando de Guzman, and Rita Llagas. The application of oppositors,
under RO4-Case No. RD-4-4088-77, for a preliminary injunction to restrain the Amigo Manufacturing, Inc. from
terminating their employment and from placing them under preventive suspension, is hereby DISMISSED.
10

Not satisfied with the decision, petitioners appealed to the Office of the Secretary of Labor. By Order dated February
15, 1979, the respondent Amado G. Inciong, Deputy Minister of Labor, dismissed their appeal for lack of merit.
11

Hence, the instant petition for review, raising the following issues:
A. Is it not error in both constitutional and statutory law by the respondent Minister when he affirmed the decision
of the RO4-Officer-in-Charge allowing the preventive suspension and subsequent dismissal of petitioners by reason
of the exercise of their right to freedom of association?
B. Is it not error in law by the respondent Minister when he upheld the decision of the RO4 OIC which sustained the
availment of the respondent PAFLU's constitution over that of the local union constitution in the settlement of intra-
union dispute?
C. Is it not error in law amounting to grave abuse of discretion by the Minister in affirming the conclusion made by
the RO4 OIC, upholding the legal applicability of the security clause of a CBA over alleged offenses committed earlier
than its conclusion, and within the 60-day freedom period of an old CBA?
12

The main thrust of the petition is the alleged illegality of the dismiss of the petitioners by private respondent
Company upon demand of PAFLU which invoked the security clause of the collective bargaining agreement between
the Company and the local union, Amigo Employees Union-PAFLU. Petitioners contend that the respondent Deputy
Minister acted in grave abuse of discretion when he affirmed the decision granting the clearance to terminate the
petitioners and dismissed petitioners' complaint, and in support thereof, allege that their constitutional right to self-
organization had been impaired. Petitioner's contention lacks merit.
It is true that disaffiliation from a labor union is not open to legal objection. It is implicit in the freedom of
association ordained by the Constitution.
13
But this Court has laid down the ruling that a closed shop is a valid form
of union security, and such provision in a collective bargaining agreement is not a restriction of the right of freedom
of association guaranteed by the Constitution.
14

In the case at bar, it appears as an undisputed fact that on February 15, 1977, the Company and the Amigo
Employees Union-PAFLU entered into a Collective Bargaining Agreement with a union security clause provided for in
Article XII thereof which is a reiteration of the same clause in the old CBA. The quoted stipulation for closed-shop is
clear and unequivocal and it leaves no room for doubt that the employer is bound, under the collective bargaining
agreement, to dismiss the employees, herein petitioners, for non- union membership. Petitioners became non-
union members upon their expulsion from the general membership of the Amigo Employees Union-PAFLU on March
15, 1977 pursuant to the Decision of the PAFLU national president.
We reject petitioners' theory that their expulsion was not valid upon the grounds adverted to earlier in this Decision.
That PAFLU had the authority to investigate petitioners on the charges filed by their co-employees in the local union
and after finding them guilty as charged, to expel them from the roll of membership of the Amigo Employees Union-
PAFLU is clear under the constitution of the PAFLU to which the local union was affiliated. And pursuant to the
security clause of the new CBA, reiterating the same clause in the old CBA, PAFLU was justified in applying said
security clause. We find no abuse of discretion on the part of the OIC of Regional Office No. 4 in upholding the
validity of the expulsion and on the part of the respondent Deputy Minister of Labor in sustaining the same. We
agree with the OIC's decision, pertinent portion of which reads:
Stripped of non-essentials, the basic and fundamental issue in this case tapers down to the determination of
WHETHER OR NOT PAFLU HAD THE AUTHORITY TO INVESTIGATE OPPOSITORS AND, THEREAFTER, EXPEL THEM
FROM THE ROLL OF MEMBERSHIP OF THE AMIGO EMPLOYEES UNION-PAFLU.
Recognized and salutary is the principle that when a labor union affiliates with a mother union, it becomes bound by
the laws and regulations of the parent organization. Thus, the Honorable Secretary of Labor, in the case of Amador
Bolivar, et al. vs. PAFLU, et al., NLRC Case No. LR-133 & MC-476, promulgated on December 3, 1973, declared-
When a labor union affiliates with a parent organization or mother union, or accepts a charter from a superior body,
it becomes subject to the laws of the superior body under whose authority the local union functions. The
constitution, by-laws and rules of the parent body, together with the charter it issues pursuant thereto to the
subordinate union, constitute an enforceable contract between the parent body and the subordinate union, and
between the members of the subordinate union inter se. (Citing Labor Unions, Dangel and Shriber, pp. 279-280).
It is undisputable that oppositors were members of the Amigo Employees Union at the time that said union affiliated
with PAFLU; hence, under the afore-quoted principle, oppositors are bound by the laws and regulations of PAFLU.
Likewise, it is undeniable that in the investigation of the charges against them, oppositors were accorded 'due
process', because in this jurisdiction, the doctrine is deeply entrenched that the term 'due process' simply means
that the parties were given the opportunity to be heard. In the instant case, ample and unmistakable evidence exists
to show that the oppositors were afforded the opportunity to present their evidence, but they themselves disdained
or spurned the said opportunity given to them.
PAFLU, therefore, correctly and legally acted when, pursuant to its Constitution and By-Laws, it conducted and
proceeded with the investigation of the charges against the oppositors and found them guilty of acts prejudicial and
inimical to the interests of the Amigo Employees Union- PAFLU, to wit: that of falsely and maliciously slandering the
officers of the union; spreading false propaganda among the members of the Amigo Employees Union-PAFLU; calling
the incumbent officers as mere appointees and robots of management; calling the union company-dominated or
assisted union; committing acts unbecoming of the members of the union and destructive of the union and its
members.
Inherent in every labor union, or any organization for that matter, is the right of self-preservation. When members
of a labor union, therefore, sow the seeds of dissension and strife within the union; when they seek the
disintegration and destruction of the very union to which they belong, they thereby forfeit their rights to remain as
members of the union which they seek to destroy. Prudence and equity, as well as the dictates of law and justice,
therefore, compelling mandate the adoption by the labor union of such corrective and remedial measures in
keeping with its laws and regulations, for its preservation and continued existence; lest by its folly and inaction, the
labor union crumble and fall.
Correctly and legally, therefore, the PAFLU acted when, after proper investigation and finding of guilt, it decided to
remove the oppositors from the list of members of the Amigo Employees Union-PAFLU, and thereafter,
recommended to the Amigo Manufacturing, Inc.; the termination of the employment of the oppositors.
15

We see no reason to disturb the same.
The contention of petitioners that the charges against them being intra-union problems, should have been
investigated in accordance with the constitution and by-laws of the Amigo Employees Union-PAFLU and not of the
PAFLU, is not impressed with merit. It is true that under the Implementing Rules and Regulations of the Labor Code,
in case of intra-union disputes, redress must first be sought within the organization itself in accordance with its
constitution and by-laws. However, it has been held that this requirement is not absolute but yields to exception
under varying circumstances. Thus, in Kapisanan ng mga Manggagawa sa MRR vs. Hernandez, 20 SCRA 109, We
held:
In the case at bar, noteworthy is the fact that the complaint was filed against the union and its incumbent officers,
some of whom were members of the board of directors. The constitution and by-laws of the union provide that
charges for any violations thereof shall be filed before the said board. But as explained by the lower court, if the
complainants had done so the board of directors would in effect be acting as respondent investigator and judge at
the same time. To follow the procedure indicated would be a farce under the circumstances, where exhaustion of
remedies within the union itself would practically amount to a denial of justice or would be illusory or vain, it will
not be insisted upon, particularly where property rights of the members are involved, as a condition to the right to
invoke the aid of a court.
The facts of the instant petition stand on all fours with the aforecited case that the principle therein enunciated
applies here as well. In the case at bar, the petitioners were charged by the officers of the Amigo Employees Union-
PAFLU themselves who were also members of the Board of Directors of the Amigo Employees Union-PAFLU. Thus,
were the petitioners to be charged and investigated according to the local union's constitution, they would have
been tried by a trial committee of three (3) elected from among the members of the Board who are themselves the
accusers. (Section 2, Article 11, Constitution of the Local Union). Petitioners would be in a far worse position had this
procedure been followed. Nonetheless, petitioners admit in their petition that two (2) of the six (6) charges, i.e.
disaffiliation and filing a petition for certification election, are not intra-union matters and, therefore, are cognizable
by PAFLU.
Petitioners insist that their disaffiliation from PAFLU and filing a petition for certification election are not acts of
disloyalty but an exercise of their right to self-organization. They contend that these acts were done within the 60-
day freedom period when questions of representation may freely be raised. Under the peculiar facts of the case, We
find petitioners' insistence untenable.
In the first place, had petitioners merely disaffiliated from the. Amigo Employees Union-PAFLU, there could be no
legal objections thereto for it was their right to do so. But what petitioners did by the very clear terms of their
"Sama-Samang Kapasiyahan" was to disaffiliate the Amigo Employees Union-PAFLU from PAFLU, an act which they
could not have done with any effective consequence because they constituted the minority in the Amigo Employees
Union-PAFLU.
Extant from the records is the fact that petitioners numbering ten (10), were among the ninety-six (96) who signed
the "Sama-Samang Kapasiyahan" whereas there are two hundred thirty four (234) union members in the Amigo
Employees Union-PAFLU. Hence, petitioners constituted a small minority for which reason they could not have
successfully disaffiliated the local union from PAFLU. Since only 96 wanted disaffiliation, it can be inferred that the
majority wanted the union to remain an affiliate of PAFLU and this is not denied or disputed by petitioners. The
action of the majority must, therefore, prevail over that of the minority members.
16

Neither is there merit to petitioners' contention that they had the right to present representation issues within the
60-day freedom period. It is true, as contended by petitioners, that under Article 257 of the Labor Code and Section
3, Rule 2, Book 2 of its Implementing Rules, questions of exclusive bargaining representation are entertainable
within the sixty (60) days prior to the expiry date of an existing CBA, and that they did file a petition for certification
election within that period. But the petition was filed in the name of the Amigo Employees Union which had not
disaffiliated from PAFLU, the mother union. Petitioners being a mere minority of the local union may not bind the
majority members of the local union.
Moreover, the Amigo Employees Union, as an independent union, is not duly registered as such with the Bureau of
Labor Relations. The appealed decision of OIC Leogardo of Regional Office No. 4 states as a fact that there is no
record in the Bureau of Labor Relations that the Amigo Employees Union (Independent) is registered, and this is not
disputed by petitioners, notwithstanding their allegation that the Amigo Employees Union is a duly registered labor
organization bearing Ministry of Labor Registration Certification No. 5290-IP dated March 27, 1967. But the
independent union organized after the "Sama-Samang Kapasiyahan" executed February 7, 1977 could not have been
registered earlier, much less March 27, 1967 under Registration Certificate No. 5290-IP. As such unregistered union,
it acquires no legal personality and is not entitled to the rights and privileges granted by law to legitimate labor
organizations upon issuance of the certificate of registration. Article 234 of the New Labor Code specifically
provides:
Art. 234. Requirements of Registration.Any applicant labor organization, association, or group of unions or
workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate
labor organizations upon issuance of the certificate of registration. ....
In Phil. Association of Free Labor Unions vs. Sec. of Labor, 27 SCRA 40, We had occasion to interpret Section 23 of
R.A. No. 875 (Industrial Peace Act) requiring of labor unions registration by the Department of Labor in order to
qualify as "legitimate labor organization," and We said:
The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails the freedom of assembly and
association guaranteed in the Bill of Rights is devoid of factual basis. The registration prescribed in paragraph (b) of
said section
17
is not a limitation to the right of assembly or association, which may be exercised with or without said
registration. The latter is merely a condition sine qua non for the acquisition of legal personality by labor
organizations, associations or unions and the possession of the 'rights and privileges granted by law to legitimate
labor organizations.' The Constitution does not guarantee these rights and privileges, much less said personality,
which are mere statutory creations, for the possession and exercise of which registration is required to protect both
labor and the public against abuses, fraud, or impostors who pose as organizers, although not truly accredited
agents of the union they purport to represent. Such requirement is a valid exercise of the police power, because the
activities in which labor organizations, associations and union or workers are engaged affect public interest, which
should be protected.
Simply put, the Amigo Employees Union (Independent) Which petitioners claim to represent, not being a legitimate
labor organization, may not validly present representation issues. Therefore, the act of petitioners cannot be
considered a legitimate exercise of their right to self-organization. Hence, We affirm and reiterate the rationale
explained in Phil Association of Free Labor Unions vs. Sec. of Labor case, supra, in order to protect legitimate labor
and at the same time maintain discipline and responsibility within its ranks.
The contention of petitioners that the new CBA concluded between Amigo Employees Union-PAFLU and the
Company on February 15, 1977 containing the union security clause cannot be invoked as against the petitioners for
offenses committed earlier than its conclusion, deserves scant consideration. We find it to be the fact that the union
security clause provided in the new CBA merely reproduced the union security clause provided in the old CBA about
to expire. And since petitioners were expelled from Amigo Employees Union-PAFLU on March 28, 1982 upon denial
of their Motion for Reconsideration of the decision expelling them, the CBA of February 15, 1977 was already
applicable to their case. The "closed-shop provision" in the CBA provides:
All members of the UNION as of the signing of this Agreement shall remain members thereof in good standing.
Therefore, any members who shall resign, be expelled, or shall in any manner cease to be a member of the UNION,
shall be dismissed from his employment upon written request of the UNION to the Company. (Art. III)
A closed-shop is a valid form of union security, and a provision therefor in a collective bargaining agreement is not a
restriction of the right of freedom of association guaranteed by the Constitution. (Manalang, et al. vs. Artex
Development Co., Inc., et al., L-20432, October 30, 1967, 21 SCRA 561). Where in a closed-shop agreement it is
stipulated that union members who cease to be in good standing shall immediately be dismissed, such dismissal
does not constitute an unfair labor practice exclusively cognizable by the Court of Industrial Relations. (Seno vs.
Mendoza, 21 SCRA 1124).
Finally, We reject petitioners' contention that respondent Minister committed error in law amounting to grave
abuse of discretion when he affirmed the conclusion made by the RO4 OIC, upholding the legal applicability of the
security clause of a CBA over alleged offenses committed earlier than its conclusion and within the 60-day freedom
period of an old CBA. In the first place, as We stated earlier, the security clause of the new CBA is a reproduction or
reiteration of the same clause in the old CBA. While petitioners were charged for alleged commission of acts of
disloyalty inimical to the interests of the Amigo Employees Union-PAFLU in the Resolution of February 14, 1977 of
the Amigo Employees Union- PAFLU and on February 15, 1977 PAFLU and the Company entered into and concluded
a new collective bargaining agreement, petitioners may not escape the effects of the security clause under either
the old CBA or the new CBA by claiming that the old CBA had expired and that the new CBA cannot be given
retroactive enforcement. To do so would be to create a gap during which no agreement would govern, from the
time the old contract expired to the time a new agreement shall have been entered into with the union. As this
Court said in Seno vs. Mendoza, 21 SCRA 1124, "without any agreement to govern the relations between labor and
management in the interim, the situation would well be productive of confusion and result in breaches of the law by
either party. "
The case of Seno vs. Mendoza, 21 SCRA 1124 mentioned previously needs further citation of the facts and the
opinion of the Court, speaking through Justice Makalintal who later became Chief Justice, and We quote:
It appears that petitioners other than Januario T. Seno who is their counsel, were members of the United Seamen's
Union of the Philippines. Pursuant to a letter-request of the Union stating that they 'had ceased to be members in
good standing' and citing a closed shop clause in its bargaining agreement with respondent Carlos A. Go Thong &
Co., the latter dismissed said petitioners. Through counsel, petitioners requested that they be reinstated to their
former positions and paid their backwages, otherwise they would picket respondents' offices and vessels. The
request was denied on the ground that the dismissal was unavoidable under the terms of the collective bargaining
agreement. ...
We, therefore, hold and rule that petitioners, although entitled to disaffiliate from their union and form a new
organization of their own, must, however, suffer the consequences of their separation from the union under the
security clause of the CBA.
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Order appealed from affirming the joint decision of the OIC of
Regional Office No. 4 in RO4-Case No. T-IV-3549-T and RO4 Case No. RD-4-4088-77-T granting clearance to
terminate petitioners as well as dismissing their complaint with application for preliminary injunction, is hereby
AFFIRMED. No costs.
SO ORDERED.
#11 G.R. No. L-45824 June 19, 1985
VOLKSCHEL LABOR UNION, petitioner,
vs.
BUREAU OF LABOR RELATIONS, ASSOCIATED LABOR UNION FOR METAL, WORKERS, DMG, INC., PEOPLE'S CAR,
INC., KARBAYAN INC., and RTC TRADING, INC., respondents.
Ignacio P. Lacsina for petitioner.
William D. Dichoso for respondent DMG, Inc.
Abraham B. Drapiza for private respondent.

CUEVAS, J.:
Petition for certiorari to review the Resolutions dated January 25, 1977 and March 14, 1977 of the Bureau of Labor
Relations.
On April 25. 1977, however, a Supplemental Petition was filed seeking the issuance of
(1) A preliminary mandatory injunction commanding respondents to return to petitioner the union dues amounting
to about P55,000.00 lawfully pertaining to it but illegally levied upon, collected and handed over by respondent
Bureau, acting through the NLRC sheriff, to respondent Associated Labor Union for Metal workers, with the collusion
of respondents DMG, Inc., Karbayan, Inc. and RTC Machineries, Inc.;
(2) A preliminary restraining order prohibiting respondents from making further delivery to respondent Associated
Labor Union for Metal workers of Union dues collected or to be collected through check-off from the wages of
petitioner's members by respondents, DMG, Inc., Karbayan, Inc., RTC Machineries, Inc., and People's Car, Inc., under
or by virtue of the questioned writ of execution issued by respondent Bureau, dated April 4, 1977.
Petitioner was once affiliated with the Associated Labor Union for Metal Workers (ALUMETAL for short). On August
1, 1975, both unions, using the name Volkschel Labor Union Associated Labor Union for Metal Workers, jointly
entered into a collective bargaining agreement with respondent companies. One of the subjects dealt with is the
payment of union dues which is provided for in Section 3, Article 1, of the CBA, which reads:
Section 3. CHECK-OFF. The COMPANY agrees to make payroll deductions not softener than twice a month of
UNION membership dues and such special assessments fees or fines as may be duly authorized by the UNION,
provided that the same is covered by the individual check-off authorization of the UNION members. All said
deductions shall be promptly transmitted within five (5) days by the COMPANY to the UNION Treasurer. The
COMPANY shall prepare two (2) checks. One (1) check will be under the name of the local union as their local fund
including local special assessment funds and the other check will be for the ALU Regional Office regarding the
remittance of the UNION dues deduction.
On March 10, 1976, a majority of petitioner's members decided to disaffiliate from respondent federation in order
to operate on its own as an independent labor group pursuant to Article 241 (formerly Article 240) of the Labor
Code of the Philippines, the pertinent portion of which reads:
Incumbent affiliates of existing federations or national unions may disaffiliate only for the purpose of joining a
federation or national union in the industry or region in which it properly belongs or for the purpose of operating as
an independent labor group.
Accordingly, a resolution was adopted and signed by petitioner's members revoking their check-off authorization in
favor of ALUMETAL and notices thereof were served on ALUMETAL and respondent companies.
Confronted with the predicament of whether or not to continue deducting from employees' wages and remitting
union dues to respondent, ALUMETAL which wrote respondent companies advising them to continue deducting
union dues and remitting them to said federation, respondent companies sought the legal opinion of the
respondent Bureau as regards the controversy between the two unions. On November 11, 1976, Med-Arbiter
George A. Eduvalla of respondent Bureau rendered a Resolution which in effect found the disaffiliation legal but at
the same time gave the opinion that, petitioner's members should continue paying their dues to ALUMETAL in the
concept of agency fees.
1

From the said Resolution, of the Med-Arbiter both petitioner and respondent ALUMETAL appealed to the Director of
respondent Bureau. Petitioner' contended that the Med-Arbiter's opinion to the effect that petitioner's members
remained obligated to pay dues to respondent ALUMETAL was inconsistent with the dispositive finding that
petitioner's disaffiliation from ALUMETAL was valid. ALUMETAL, on the other hand, assailed the Resolution in
question asserting that the disaffiliation should have been declared contrary to law.
On January 25, 1977, respondent Bureau, through its Acting Director, Francisco L. Estrella, REVERSED the Med-
Arbiter's Resolution., and declared that the Bureau recognized "the continued affiliation of Volkschel Labor Union
with the Associated Labor Union for Metal Workers."
2

Petitioner appealed the Acting Director's Resolution to the Secretary of Labor know Minister of Labor and
Employment) who, treating the appeal as a Motion for Reconsideration referred the same back to respondent
Bureau On March 14, 1977, the Bureau denied the appeal for lack of merit.
Hence, the instant petition.
Meanwhile, on April 4, 1977, on motion of ALUMETAL, the then Acting Secretary of Labor, Amado Gat Inciong,
issued a of execution commanding the Sheriff of the National Labor Relations Commission to enforce and execute
the order of January 25, 1977, which has become final and executory.
3
Pursuant thereto, the NLRC Sheriff enforced
and implemented the Order of January 25, 1977, as a result of which respondent companies turned over and
handed to respondent federation the union dues and other assessments in accordance with the check-off provision
of the CBA,
From the pleadings filed and arguments of counsel, the following issues present themselves for this Court's
resolution.
I
Is petitioner union's disaffiliation from respondent federation valid?
II
Do respondent companies have the right to effect union dues collections despite revocation by the employees of the
check-off authorization? and
III
Is respondent federation entitled to union dues payments from petitioner union's members notwithstanding their
disaffiliation from said federation?
We resolve the first issue in the affirmative.
The right of a local union to disaffiliate from its mother union is well-settled. In previous cases, it has been
repeatedly held that a local union, being a separate and voluntary association, is free to serve the interest of all its
members including the freedom to disaffiliate when circumstances warrant.
4
This right is consistent with the
Constitutional guarantee of freedom of association (Article IV, Section 7, Philippine Constitution).
Petitioner contends that the disaffiliation was not due to any opportunists motives on its part. Rather it was
prompted by the federation's deliberate and habitual dereliction of duties as mother federation towards petitioner
union. Employees' grievances were allegedly left unattended to by respondent federation to the detriment of the
employees' rights and interests.
In reversing the Med-Arbiter's resolution, respondent Bureau declared: the Department of Labor is set on a task to
restructure the labor movement to the end that the workers will unite themselves along industry lines. Carried to its
complete fruition, only one union for every industry will remain to bargain collectively for the workers. The clear
policy therefore even now is to conjoin workers and worker groups, not to dismember them.
5
This policy is
commendable. However, we must not lose sight of the constitutional mandate of protecting labor and the workers'
right to self-organization. In the implementation and interpretation of the provisions of the Labor Code and its
implementing regulations, the workingman's welfare should be the primordial and paramount consideration. In the
case at bar, it would go against the spirit of the labor law to restrict petitioner's right to self-organization due to the
existence of the CBA. We agree with the Med-Arbiter's opinion that "A disaffiliation does not disturb the
enforceability and administration of a collective agreement; it does not occasion a change of administrators of the
contract nor even an amendment of the provisions thereof."
6
But nowhere in the record does it appear that the
contract entered into by the petitioner and ALUMETAL prohibits the withdrawal of the former from the latter.
This now brings us to the second issue. Under Section 3, Article I, of the CBA, the obligation of the respondent
companies to deduct and remit dues to ALUMETAL is conditioned on the individual check-off authorization of
petitioner's members, In other words, ALUMETAL is entitled to receive the dues from respondent companies as long
as petitioner union is affiliated with it and respondent companies are authorized by their employees (members of
petitioner union) to deduct union dues. Without said affiliation, the employer has no link to the mother union. The
obligation of an employee to pay union dues is coterminous with his affiliation or membership. "The employees'
check-off authorization, even if declared irrevocable, is good only as long as they remain members of the union
concerned."
7
A contract between an employer and the parent organization as bargaining agent for the employees is
terminated by the disaffiliation of the local of which the employees are members.
8
Respondent companies
therefore were wrong in continuing the check-off in favor of respondent federation since they were duly notified of
the disaffiliation and of petitioner's members having already rescinded their check-off authorization.
With the view we take on those two issues, we find no necessity in dwelling further on the last issue. Suffice it to
state that respondent federation is not entitled to union dues payments from petitioner's members. "A local union
which has validly withdrawn from its affiliation with the parent association and which continues to represent the
employees of an employer is entitled to the check-off dues under a collective bargaining contract."
9

WHEREFORE, the Resolutions of the Bureau of Labor Relations of January 25, 1977 and March 14, 1977 are
REVERSED and SET ASIDE. Respondent ALUMETAL is ordered to return to petitioner union all the union dues
enforced and collected through the NLRC Sheriff by virtue of the writ of execution dated April 4, 1977 issued by
respondent Bureau.
No costs.
SO ORDERED.
#12 G.R. No. 87266-69 July 30, 1990
ASSOCIATED WORKERS UNION-PTGWO, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISION (EN BANC), METRO PORT SERVICE, INC., MARINA PORT SERVICES,
INC., ADRIANO S. YUMUL and 10 OTHER INDIVIDUAL RESPONDENTS REPRESENTED BY ATTY. EPIFANIO
JACOSALEM, respondents.
G.R. Nos. 91223-26 JULY 30, 1990
MANILA PORT SERVICES, INC., petitioner,
vs.
HON. ARTHUR G. AMANSEC AND ADRIANO YUMUL, PABLITO REANDELAR, MACARIO DE LUNA, JR., ADAN
MENDOAZA, SMITH CARLOTA, EMERECIANO VERGARA, ROMEO ABACAN, LEONARDO ROMULO, ELINO JOSE, and
CATINDIANO CALAUAG (COLLECTIVELY CALLED AWUM), respondents.
D.T. Dagum, Jr. and P.T. De Quiroz for petitioner in G.R. Nos. 87266-69.
Ramon N. Nalipay, Jr. for petitioner in G.R. Nos. 91223-26.
Cruz, Durian, Agabin, Atienza, Alday & Tuason for respondent MPSI.
Udarbe & Jacosalem for private respondents in G.R. Nos. 91223-26.

FELICIANO, J.:
These cases have been usually difficult for the Court, not because the issues posed are in themselves intellectually
demanding, but because of problems generated by the procedure adopted by the parties in coming before this
Court. The incidents subject of these cases spawned multiple cases and petitions before the National Labor Relations
Commission ("NLRC"). After the NLRC rendered a consolidated decision, the parties, in turn, filed multiple
separate certiorari petitions to the Court on a staggered and piecemeal basis. This situation resulted in a number
of discrete discussions of issues actually inter-related, since the Court, at any one time, could only see a small part of
the whole picture and decide only on the basis of what it could see. In what follows, we have tried to put the whole
picture together and to render comprehensive and substantial justice to all the parties.
On 26 October 1984, petitioner Associated Workers Union ("AWU")PTGWO, the then bargaining representative of
the dockworkers at South Harbor, Port Area, Manila, filed a Notice of Strike against respondent Metro Port Service,
Inc. ("Metro"), the then arrastre contractor in the South Harbor, on the issues, among others, of unfilled vacancies
and union busting. This was docketed as NLRC Case No. NCR-NS-10-288-84.
On 3 April 1985, the abovementioned case was certified in an Order by the then Minister of Labor and Employment
to the NLRC for compulsory arbitration; the Order also forbade the holding of strikes or lock-outs.
1
The case was
docketed as Certified NLRC Case No. 0403-85. In the latter case, one of the demands raised by AWU was that Metro
terminate the employment of respondents Adriano Yumul and ten (10) others (individual respondents), for having
organized, on 26 October 1984, the Associated Workers Union in Metroport ("AWUM") among the rank-and-file
employees of Metro, ostensibly as a local or chapter of AWU. AWU had earlier expelled individual respondents from
membership in AUW for disloyalty and, pursuant to the closed-shop provision of the existing AWU-Metro collective
bargaining agreement ("CBA"), sought the termination of their employment.
Metro initially resisted AWU's request to terminate the employment of individual respondents, contending that the
termination would be premature as individual respondents had not been afforded due process, and that the
termination would be violative of the status quo agreement in NLRC Case No. NCR-NS-10-288-84.
2
Metro, however,
eventually relented and suspended individual respondents after AWUdespite the express prohibition in the Order
dated 3 April 1985staged a strike against it. On 18 April 1985, Metro executed a Compromise Agreement
("Agreement") with AWU to end the strike, item No. 2 of which stipulated:
At the instance of the union, [Metro] agrees to preventively suspend [individual respondents] effective
immediately.
3

The Agreement was attested to by then Deputy Labor Minister Carmelo Noriel.
As a result of Metro's implementation of the Agreement, individual respondents on 30 April 1985 filed a complaint
against Metro, docketed as NLRC Case No. NCR-4-1372-85. Metro in that case filed in turn a third-party complaint
against AWU and its officers.
Metro in April 1985 also filed a complaint for illegal strike with damages against AWU and its officers, docketed as
NLRC Case No. NCR-4-1341-85. On 21 June 1985, Labor Arbiter Ceferina Diosana in an Order directed Metro
provisionally to reinstate individual respondents pending resolution of the issues raised therein, with which Order
Metro complied.
On 15 July 1985, AWU filed a petition for injunction against Metro, docketed as NLRC Injunction Case No. 993,
praying for issuance of a temporary restraining order stopping the implementation of the Order of provisional
reinstatement, and for Metro's compliance with the Agreement providing for the suspension of individual
respondents. On 1 August 1985, the NLRC in an En Banc Resolution directed Metro to comply with the Agreement,
and Metro complied and re-suspended individual respondents. Individual respondents' petition before the NLRC for
preliminary mandatory injunction on 30 August 1985, praying "that pursuant to the Implementing Rules of Batas
Pambansa Blg. 130, [Metro] be ordered to pay their salaries and allowances from and after their initial preventive
suspension of thirty (30) days and until their actual reinstatement," was not acted upon.
All the above-mentioned cases, to wit: (a) Certified NLRC Case No. 0403-85 (NCR No. NS-10-288-84); (b) NLRC Case
No. NCR-4-1341-85; (c) NLRC Case No. NCR-4-1372-85; and (d) NLRC Injunction Case No. 993, were ordered
consolidated before the NLRC en banc.
On 4 September 1986, the NLRC rendered a consolidated Decision. In Certified NLRC Case No. 0403-85, the NLRC
ruled that: (a) respondent Metro cannot be compelled to fill up vacancies with AWU's recommendees; (b)
respondent Metro cannot be held liable for union busting, the issue of the medically impaired workers having
become moot and academic; and (c) the compulsory retirement of AWUs members who have reached the age of 60
years is a valid exercise of management prerogative.
In NLRC Case No. NCR-4-1372-85, the NLRC, finding that AWU was a national union, and that individual respondents
have the right to organize themselves into a local chapter thereof, the formation of which was a protected activity
and could not be considered as disloyalty, held the suspension or dismissal of individual respondents as illegal and,
in relation to NLRC Injuction Case No. 993, ordered their reinstatement with backwages, to be paid solidarily by
AWU and respondent Metro.
In NLRC Case No. NCR-4-1341-85, the NLRC found the strike staged by AWU not illegal, holding that AWU was of the
belief, although erroneously, that it could validly stage a strike during the pendency of its motion for reconsideration
of the Minister's Order dated 3 April 1985 enjoining a strike or lockout.
Both AWU and Metro filed separate motions for reconsideration of the consolidated Decision.
Meanwhile, on 21 July 1986, petitioner Marina Port Services, Inc. ("Marina"), by virtue of a Special Permit issued by
the Philippine Ports Authority, started operations as the arrastre operator at the Manila South Harbor vice Metro.
On November 1986, individual respondents in a Motion/Manifestation prayed that Marina be included as party-
respondent.
On 27 July 1987, the NLRC in a Resolution denied AWU's and Metro's motions for reconsideration of the
consolidated Decision dated 4 September 1986, but (acting on individual respondents' Motion/Manifestation) with
the modification limiting Metro's liability for backwages to wages accruing up to July 20, 1986 and
orderingMarina to reinstate individual respondents with backwages and allowances starting from 21 July 1986.
Marina complied with the Resolution by reinstating individual respondents through its payroll retroactive to 21 July
1986.
AWU thereafter in G.R. Nos. 87266-69 filed with the Court a Petition for certiorari on 14 March 1989 praying for the
reversal of the decision of the NLRC in NLRC Case No. NCR-NS-10-288-84 and NLRC Injunction Case No. 993 (praying
principally for reversal of the order holding that respondent Metro could not be compelled to fill up vacancies with
AWUs recommendees) and in NLRC Case No. NCR-4-1372-85 (praying chiefly for reversal of the order reinstating the
eleven [11] private respondents to their former positions with backwages payable solidarily by AWU and respondent
Metro). These cases (G.R. Nos. 87266-69) were assigned to the Third Division of the Court.
Marina, meantime, had gone to the Court on certiorari on 14 June 1988 in G.R. Nos. 81256-59 entitled "Marina Port
Services, Inc. v. National Labor Relations Commission, Metro Port Service, Inc, Associated Workers Union["AWU"-
PTGWO], and Associated Workers Union in Metro Port [AWUM]" protesting, on grounds of alleged denial of due
process, its inclusion by the NLRC as a party in NLRC Case No. NCR-4-1372-85 and its being required to reinstate
individual respondents with backwages. In dismissing these cases (G.R. Nos. 81256-59) on 3 August 1988, the Court
held that:
. . . [t]he decision to include Marina in the questioned [NLRC Resolution dated 17 July 1987] is based on Par. "7" of
the Special Permit granted to Marina which states that "Labor and personnel of previous operator, except those
positions of trust and confidence, shall be absorbed by the grantee." Besides, the petitioner was able to file not only
a Motion for Reconsideration of the Questioned Resolution but also a Motion to Set Aside Motion/Manifestation
and Remarks on the Comment of Metro Port. The lack of due process at the beginning, if any, was cured by the
above motions that the petitioner was able to file.
4

On 13 April 1988, Metro in G.R. No. 82705 (entitled "Metro Port Services, Inc. v. National Labor Relations
Commission, Associated Workers Union-PTGWO, Marina Port Services, Inc., and Adriano Yumul [and 10 others]")
went to this court again and assailed the NLRC ruling in NLRC Case No. NCR-4-1372-85 and NLRC Injunction Case No.
993. Metro claimed that it should not have been held solidary liable with AWU because it had merely suspended
individual respondents pursuant to the Agreement dated 18 April 1985 it had executed with AWU and, later, had
merely obeyed the Resolution of the NLRC dated 1 August 1985 ordering Metro to re-suspend individual
respondents. In similarly dismissing Metro's petition, the Court in G.R. No. 82705, held:
. . . Considering that the petitioner was a party to the compromise agreement with AWU which provided that "at the
instance of the union, the company agrees to preventively suspend Adriano S. Yumul and eleven associates effective
immediately" and accordingly suspended the private respondents despite the suspension being contrary to law, the
petitioner should be made solidarity liable with AWU for the backwages and allowances that the private
respondents may have been entitled to during their suspension. The petitioner's liability, however, should not
extend to the time that respondent NLRC ordered it to re-suspend the private respondents.
5
(Emphasis supplied)
Judgment was entered in G.R. Nos. 81256-59 and G.R. No. 82705 on 23 September 1988 and 4 July 1989,
respectively, and the cases were remanded to the Labor Arbiter of origin for execution.
On 18 September 1989, the Labor Arbiter issued a writ of execution against Marina to reinstate individual
respondents and to pay them the amount of P154,357.00 representing salary adjustments. Marina moved to quash
the writ of execution questioning the award of P154,357.00, but without success. Marina thereafter appealed to the
NLRC assailing the Labor Arbiter's refusal to quash the writ of execution.
On 23 November 1989, Marina received an Order from the Executive Labor Arbiter dated 15 November 1989,
requiring the release of any garnished deposit from its bank, holding that no seasonable appeal from the 7
November 1989 Order denying Marina's motion to quash had been taken. Marina filed a Manifestation dated 23
November 1989, arguing that it had filed an appeal with the NLRC within the 10-day reglementary period.
On 6 December 1989, the Executive Labor Arbiter issued a writ of execution requiring Marina: (a) to reinstate
individual respondents and to pay them the amount of P154,357.00 representing salary adjustments; and (b) to
implement and honor the legality of the organization and registration of AWUM as the local chapter of AWU. Marina
then once more went to the Court in G.R. Nos. 91223-26 and filed a Petition for certiorari to invalidate the writ of
execution, pleading that: (a) execution had been ordered without due regard for its right of appeal from the Labor
Arbiter's Order; and (b) execution would result in its being made to pay more than what is called for by the ruling of
the Court in G.R. No. 82705, where the Court affirmed the NLRC ruling that Marina "should be made solidarily liable
with AWU for the backwages and allowances that the private respondents may have been entitled to during their
suspension [although liability] should not extend to the time that respondent NLRC ordered it to re-suspend the
private respondents." These cases (G.R. Nos. 91223-26) were assigned to the First Division of the Court. On 20
December 1989, a temporary restraining order was issued by the First Division of the Court to enjoin the
implementation of the Executive Labor Arbiter's Order of 6 December 1989.
On 16 April 1990, G.R. Nos. 91223-26 were consolidated with G.R. Nos. 87266-69.
I
1. Deliberating on the instant Petition for Certiorari, the Court in G.R. Nos. 87266-69 considers that petitioner AWU
has failed to show grave abuse of discretion or any act without or in excess of jurisdiction on the part of the NLRC in
Certified NLRC Case No. 0403-85 (NCR No. NS-10-288-84). The NLRC was correct there in holding that respondent
Metro cannot be compelled to fill up vacancies with AWU's recommendees, as the CBA between AWU and
respondent Metro granted the latter the right to "fill or not to fill-up vacancies"; that the issue of the medically
impaired employees had already been raised in another Notice of Strike filed by AWU against respondent Metro on
16 September 1985, and both parties had agreed to abide by the recommendation and decision of an examining
physician selected by them; and that the existing CBA grants respondent Metro the right to compulsorily retire any
member of AWU who had reached 60 years of age, which right has been exercised by Metro.
2. The NLRC, however, misappreciated the relevant facts in NLRC Case No. NCR-4-1372-85 and NLRC Injunction Case
No. 993. While it is true that AWUM as a local union, being an entity separate and distinct from AWU, is free to
serve the interest of all its members and enjoys the freedom to disaffiliate, such right to disaffiliate may be
exercised, and is thus considered a protected labor activity, only when warranted by circumstances. Generally, a
labor union may disaffiliate from the mother union to form a local or independent union only during the 60-day
freedom period immediately preceding the expiration of the CBA.
6
Even before the onset of the freedom period
(and despite the closed-shop provision in the CBA between the mother union and management) disaffiliation may
still be carried out, but such disaffiliation must be effected by a majority of the members in the bargaining unit.
7
This
happens when there is a substantial shift in allegiance on the part of the majority of the members of the union. In
such a case, however, the CBA continues to bind the members of the new or disaffiliated and independent union up
to the CBA's expiration date.
8

The record does not show that individual respondents had disaffiliated during the freedom period. The record does,
however, show that only eleven (11) members of AWU (individual respondents) had decided to disaffiliate from
AWU and form AWUM. Respondent Metro had about 4,000 employees, and around 2,000 of these were members
of AWU
9
It is evident that individual respondents had failed to muster the necessary majority in order to justify their
disaffiliation. (In fact, it was only on 5 December 1985 that individual respondents were finally able to register an
independent union called Metroport Workers Union [MWU].
10
Even then, in the absence of allegation by AWUM
[MWU] of the exact number of its members, the Court presumes that only twenty percent [20%] of the employees
of Metro had joined MWU)
11
Thus, in the referendum held on 7 January 1985 at the PTGWO compound (where
representatives of the Ministry of Labor and Employment were present) to determine whether individual
respondents should be expelled from AWU, 1,229 members (out of 1,695 members present) voted for expulsion of
individual respondents.
12

The individual respondents here have failed to present proof of their allegation that the 1,695 members of AWU
were not employees of respondent Metro alone; the Court therefore presumes that those who voted for their
expulsion were bona fide employees of respondent Metro. Moreover, individual respondents failed to allege that
their expulsion for disloyalty violated AWU's constitution and by-laws.
13
In sum, the attempted disaffiliation of the
eleven (11) private respondents from the petitioner mother union and the effort to organize either a new local of
the mother union or an entirely new and separate union, did not, under the circumstances of this case, constitute
protected activities of the eleven (11) individual respondents.
II
In view of the conclusion reached above in G.R. Nos. 87266-69, i.e., that AWU was justified in expelling from its
membership the eleven (11) individual respondents, the question now arises: how and to what extent does such
conclusion affect the liability of Metro, and Marina (as successor-employer)? It will be recalled that the Resolutions
of this Court in G.R. Nos. 81256-59 and 82705 dismissing the Petitions for certiorari of both Metro and Marina
assailing the NLRC consolidated Decision of 4 September 1986 insofar as their (Metro's and Marina's) liability for
reinstatement and backwages of the individual respondents thereunder is concerned, became final and judgment
entered therein, sometime ago.
1. So far as concerns AWU's liability under the NLRC consolidated Decision, it should in the first place be pointed out
that the Court did not make any pronouncement either in G.R. Nos. 81256-59 or in G.R. No. 82705 concerning
AWU's liability. In G.R. No. 82705, the Court merely acted on the issue raised by petitioner Metro: that Metro should
not be liable at all for reinstatement and backwages considering that Metro was only pressed into suspending
individual respondents because of AWUs threat to strike. In dismissing Metro's Petition, the Court in G.R. No. 82705
in effect merely held that Metro, whatever the liability of AWU might be in respect of the expulsion of individual
respondents, could not escape liability by throwing all responsibility upon AWU; and that Metro could not validly
plead that it was under duress when it executed the Agreement with AWU providing for, among other things, the
preventive suspension of individual respondents.
The Court is, of course, aware that AWU was a party-respondent in both G.R. Nos. 81256-59 and 82705, and that
AWU had in fact filed a Comment in both G.R. Nos. 81256-59 and 82705. Nonetheless, the Court did not either in
G.R. Nos. 82156-59 or in G.R. No. 82705 in fact make a determination of the legality of AWU's expulsion of individual
respondents from its membership. The Court in G.R. No. 82705 held only that the liability of Metro was solidary in
nature, i.e., solidary with AWU, whatever AWU's liability might be; and it may be well to recall thatsolidary liability is
different from secondary liability. In G.R. Nos. 81256-59, the Court simply held that Marina was properly impleaded
in the underlying cases and could not be absolved from responsibility for reinstatement and backwages upon the
ground of denial of due process.
2. Thus, so far as concerns the liability of Metro and Marina for reinstatement with backwages of individual
respondents under the consolidated NLRC Decision, the pre-eminent fact is that the Court's Resolutions in G.R. Nos.
81256-59 and 82705 dismissing their Petitions are already final. The liabilities of Metro and Marina for
reinstatement and backwages under the consolidated NLRC Decision have become fixed and definite, with the
modification decreed by the Court in G.R. No. 82705 in so far as backwages were concerned. Thus, the conclusion
we today have reached in G.R. Nos. 87266-69 cannot benefit Metro and Marina and will not dissolve their already
fixed and definite liabilities.
3. Turning to the question of the backwages due to the eleven (11) individual respondents, three (3) different time
periods are relevant here and must be distinguished from one another:
First Period: From 18 April 1985 to 21 June 1985: the Compromise Agreement between Metro and AWU to end the
strike, in which Metro agreed to preventively suspend the eleven (11) individual respondents, was effected on 18
April 1985 and implemented immediately. The Labor Arbiter on 21 June 1985 ordered Metro to reinstate
provisionally the eleven (11) individual respondents and Metro complied.
Second Period: From 1 August 1985 up to 27 July 1987: the NLRC, pursuant to the urging of AWU, ordered Metro to
re-suspend the individual respondents on 1 August 1985 and Metro again complied with this Order. Approximately
two (2) years later, on 27 July 1987, NLRC ordered Metro/Marina to reinstate the individual respondents and Marina
complied by reinstating the individual respondents on the payroll, i.e., paying their salaries although they were not
allowed to work on their jobs.
Third Period: From 28 July 1987 to 18 September 1989: on 18 September 1989, the Labor Arbiter issued the
questioned writ of execution ordering, among other things, Marina to reinstate formally the individual respondents.
Under the consolidated NLRC Decision, Metro/Marina are liable for the backwages accruing during the First and
Third Periods above indicated. In respect of the Second Period, however, the Court in G.R. No. 82705, as already
pointed out earlier, held that Metro/Marina should not be held liable for backwages accruing during that period.
Strictly speaking, in view of our conclusion above that AWU was justified in expelling individual respondents from its
membership, neither AWU nor Metro/Marina would be liable to individual respondents for the backwages accruing
during this Second Period.
4. In the interest of substantial and expeditious justice, however, we believe that the backwages accruing during the
Second Period should be paid and shared by AWU and by Metro Marina, on a 50-50 basis. We here establish this
equitable allocation of ultimate responsibility in order to forestall further litigation between AWU and
Metro/Marina and individual respondents in respect of claims and countering claims for payment or reimbursement
or contribution and to put a definite end to this prolonged and costly confrontation among the several parties.
The equitable considerations which impel us to hold AWU liable for one-half () of the backwages during the Second
Period include:
(a) the fact that Metro had been reluctant to comply with the demand of AWU to terminate the services of
individual respondents and had wanted to give the latter procedural due process, but gave in to the demands of
AWU;
(b) that AWU had pressed Metro very hard and indeed went on strike against Metro when Metro refused simply to
terminate the services of the individual respondents;
(c) that AWU, instead of waiting for final judicial determination of the legality of its expulsion of individual
respondents, chose to importune the NLRC to issue the order requiring the re-suspension of the individual
respondents on 1 August 1985, with which order Metro eventually complied.
5. Turning to Metro/Marina we note that, apart from the finality of the Court's Resolutions in G.R. Nos. 81256-59
and 82705, there is independent basis for holding Metro/Marina responsible for reinstatement with backwages
accruing throughout the three (3) periods above indicated. The equitable considerations which lead us to hold
Metro/Marina responsible for one-half () of the backwages accruing during the above Second Period relate to the
failure of Metro to accord individual respondents procedural due process by giving them reasonable opportunity to
explain their side before suspending or dismissing them. Such dismissal was accordingly in violation of the Labor
Code.
14
Notwithstanding AWU's closed-shop clause in the CBA, Metro was bound to conduct its own inquiry to
determine the existence of substantial basis for terminating the employment of individual respondents.
15
That
AWU, disregarding the Minister of Labor and Employment's express order, had threatened to go on strike, and
indeed actually went on strike, if Metro had continued with the services of individual respondents, did not relieve
Metro from the duty to accord procedural due process to individual respondents.
16

6. The portion of the Writ of Execution issued by the Executive Labor Arbiter requiring Marina to pay salary
differentials in the total amount of P154,357.00 accruing during the period from 20 July 1986 up to October 1989,
should be modified to conform with the above legal and equitable allocation of liability for the backwages which had
accrued during the three (3) Periods above mentioned during which the individual respondents were suspended.
The salary differentials, as we understands it, refer to increases in the prevailing wages accruing partly during the
Second Period and partly during the Third Period as above indicated. In other words, the salary differentials accruing
from 20 July 1986 up to 27 July 1987 should be borne on a 50-50 basis by AWU on the one hand and Metro/Marina
on the other. The salary differentials accruing from 28 July 1987 up to 18 September 1989 shall be borne exclusively
by Marina.
7. The portion of the Writ of Execution issued by the Executive Labor Arbiter which requires Marina to recognize the
legality of the organization and registration of AWUM (now MWU) as a local chapter of AWU, is inconsistent with
the conclusions we have set forth in Part I above, and must be deleted. What was in fact eventually established by
individual respondents was a separate, independent union called Metro Port Workers Union (MWU) which was not
entitled, during the time periods here relevant, to recognition as the bargaining unit in CBA negotiations.
ACCORDINGLY, the Court Resolved:
In G.R. Nos. 87266-69:
(a) to DISMISS the Petition for Certiorari in respect of Certified NLRC Case No. 0403-855 (NCR-NS-10-288-84) for lack
of merit; and
(b) to GRANT partially the Petition for Certiorari in respect of NLRC Case No. NCR-4-1372-85 and NLRC Injunction
Case No. 993. The consolidated Decision of the NLRC dated 4 September 1986 ordering AWU and Marina to pay
solidarily the backwages of individual respondents, as well as the NLRC Resolution of 27 July 1987 denying AWUs
and Metro's Motions for Reconsideration, are hereby MODIFIED so as to require AWU and Metro/Marina to pay, on
a 50-50 basis, to individual respondents the backwages which accrued during the Second Period, i.e., from 1 August
1985 up to 27 July 1987.
In G.R. Nos. 91223-26:
to GRANT partially the Petition. The Order of the Executive Labor Arbiter dated 6 December 1989 is hereby
MODIFIED so as (a) to require AWU and Metro/Marina on a 50-50 basis to pay the salary differentials accruing
during the period from 20 July 1986 up to 27 July 1987, and Marina alone to pay the salary differentials accruing
from 28 July 1987 up to 31 October 1989, and so as (b) to delete the portion requiring Marina to recognize AWU.
(MWU) as the local chapter of AWU. The Temporary Restraining Order issued by the Court on 20 December 1989 is
hereby LIFTED so as to permit enforcement of the Order of the Executive Labor Arbiter as herein modified.
No pronouncement as to costs.
SO ORDERED.
#13 G.R. No. 75321 June 20, 1988
ASSOCIATED TRADE UNIONS (ATU), petitioner,
vs.
HON. CRESENCIO B. TRAJANO, in his capacity as Director of the Bureau of Labor Relations, MOLE, BALIWAG
TRANSIT, INC. and TRADE UNIONS OF THE PHILIPPINES AND ALLIED SERVICES (TUPAS)-WFTU, respondents.
Puerto, Nunez & Associates for petitioner.
Tupaz and Associates for respondent Union.
Jose C. Espinas collaborating counsel for private respondent.
Agapito S. Mendoza for respondent Baliwag Transit, Inc.
The Solicitor General for public respondent.

CRUZ .J,:
The resolution of this case has been simplified because it has been, in Justice Vicente Abad Santos's felicitous
phrase, "overtaken by events."
This case arose when on March 25, 1986, the private respondent union (TUPAS) filed with the Malolos labor office of
the MOLE a petition for certification election at the Baliwag Transit, Inc. among its rank-and-file workers.1 Despite
opposition from the herein petitioner, Associated Trade Unions (ATU), the petition was granted by the med-arbiter
on May 14, 1986, and a certification election was ordered "to determine the exclusive bargaining agent (of the
workers) for purposes of collective bargaining with respect to (their) terms and conditions of employment." 2 On
appeal, this order was sustained by the respondent Director of Labor Relations in his order dated June 20, 1986,
which he affirmed in his order of July 17, 1986, denying the motion for reconsideration. 3 ATU then came to this
Court claiming that the said orders are tainted with grave abuse of discretion and so should be reversed. On August
20, 1986, we issued a temporary restraining order that has maintained the status quo among the parties. 4
In support of its petition, ATU claims that the private respondent's petition for certification election is defective
because (1) at the time it was filed, it did not contain the signatures of 30% of the workers, to signify their consent
to the certification election; and (2) it was not allowed under the contract-bar rule because a new collective
bargaining agreement had been entered into by ATU with the company on April 1, 1986. 5
TUPAS for its part, supported by the Solicitor General, contends that the 30% consent requirement has been
substantially complied with, the workers' signatures having been subsequently submitted and admitted. As for the
contract-bar rule, its position is that the collective bargaining agreement, besides being vitiated by certain
procedural defects, was concluded by ATU with the management only on April 1, 1986 after the filing of the petition
for certification election on March 25, 1986. 6
This initial sparring was followed by a spirited exchange of views among the parties which insofar as the first issue is
concerned has become at best only academic now. The reason is that the 30% consent required under then Section
258 of the Labor Code is no longer in force owing to the amendment of this section by Executive Order No. 111,
which became effective on March 4, 1987.
As revised by the said executive order, the pertinent articles of the Labor Code now read as follows:
Art. 256. Representation issue in organized establishments. In organized establishments, when a petition
questioning the majority status of the incumbent bargaining agent is filed before the Ministry within the sixty-day
period before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an
election by secret ballot to ascertain the will of the employees in the appropriate bargaining unit. To have a valid
election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the
majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit.
When an election which provides for three or more choices results in no choice receiving a majority of the valid
votes cast, a runoff election shall be conducted between the choices receiving the two highest number of votes.
Art. 257. Petitions in unorganized establishments. In any establishment where there is no certified bargaining
agent, the petition for certification election filed by a legitimate labor organization shall be supported by the written
consent of at least twenty (20%) percent of all the employees in the bargaining unit. Upon receipt and verification of
such petition, the Med-Arbiter shall automatically order the conduct of a certification election.
The applicable provision in the case at bar is Article 256 because Baliwag transit, Inc. is an organized establishment.
Under this provision, the petition for certification election need no longer carry the signatures of the 30% of the
workers consenting to such petition as originally required under Article 258. The present rule provides that as long
as the petition contains the matters 7 required in Section 2, Rule 5, Book V of the Implementing Rules and
Regulations, as amended by Section 6, Implementing Rules of E.O. No. 111, the med-arbiter "shall automatically
order" an election by secret ballot "to ascertain the will of the employees in the appropriate bargaining unit." The
consent requirement is now applied only to unorganized establishments under Article 257, and at that, significantly,
has been reduced to only 20%.
The petition must also fail on the second issue which is based on the contract-bar rule under Section 3, Rule 5, Book
V of the Implementing Rules and Regulations. This rule simply provides that a petition for certification election or a
motion for intervention can only be entertained within sixty days prior to the expiry date of an existing collective
bargaining agreement. Otherwise put, the rule prohibits the filing of a petition for certification election during the
existence of a collective bargaining agreement except within the freedom period, as it is called, when the said
agreement is about to expire. The purpose, obviously, is to ensure stability in the relationships of the workers and
the management by preventing frequent modifications of any collective bargaining agreement earlier entered into
by them in good faith and for the stipulated original period.
ATU insists that its collective bargaining agreement concluded by it with Baliwag Transit, Inc, on April 1, 1986, should
bar the certification election sought by TUPAS as this would disturb the said new agreement. Moreover, the
agreement had been ratified on April 3, 1986, by a majority of the workers and is plainly beneficial to them because
of the many generous concessions made by the management. 8
Besides pointing out that its petition for certification election was filed within the freedom period and five days
before the new collective bargaining agreement was concluded by ATU with Baliwag Transit, Inc. TUPAS contends
that the said agreement suffers from certain fatal procedural flaws. Specifically, the CBA was not posted for at least
five days in two conspicuous places in the establishment before ratification, to enable the workers to clearly inform
themselves of its provisions. Moreover, the CBA submitted to the MOLE did not carry the sworn statement of the
union secretary, attested by the union president, that the CBA had been duly posted and ratified, as required by
Section 1, Rule 9, Book V of the Implementing Rules and Regulations. These requirements being mandatory, non-
compliance therewith rendered the said CBA ineffective. 9
The Court will not rule on the merits and/or defects of the new CBA and shall only consider the fact that it was
entered into at a time when the petition for certification election had already been filed by TUPAS and was then
pending resolution. The said CBA cannot be deemed permanent, precluding the commencement of negotiations by
another union with the management. In the meantime however, so as not to deprive the workers of the benefits of
the said agreement, it shall be recognized and given effect on a temporary basis, subject to the results of the
certification election. The agreement may be continued in force if ATU is certified as the exclusive bargaining
representative of the workers or may be rejected and replaced in the event that TUPAS emerges as the winner.
This ruling is consistent with our earlier decisions on interim arrangements of this kind where we declared:
... we are not unmindful that the supplemental collective bargaining contract, entered into in the meanwhile
between management and respondent Union contains provisions beneficial to labor. So as not to prejudice the
workers involved, it must be made clear that until the conclusion of a new collective bargaining contract entered
into by it and whatever labor organization may be chosen after the certification election, the existing labor contract
as thus supplemented should be left undisturbed. Its terms call for strict compliance. This mode of assuring that the
cause of labor suffers no injury from the struggle between contending labor organization follows the doctrine
announced in the recent case of Vassar Industries Employees v. Estrella (L-46562, March 31, 1978). To quote from
the opinion. "In the meanwhile, if as contended by private respondent labor union the interim collective bargaining
agreement which it engineered and entered into on September 26, 1977 has, much more favorable terms for the
workers of private respondent Vassar Industries, then it should continue in full force and effect until the appropriate
bargaining representative is chosen and negotiations for a new collective bargaining agreement thereafter
concluded." 10
It remains for the Court to reiterate that the certification election is the most democratic forum for the articulation
by the workers of their choice of the union that shall act on their behalf in the negotiation of a collective bargaining
agreement with their employer. Exercising their suffrage through the medium of the secret ballot, they can select
the exclusive bargaining representative that, emboldened by their confidence and strengthened by their support
shall fight for their rights at the conference table. That is how union solidarity is achieved and union power is
increased in the free society. Hence, rather than being inhibited and delayed, the certification election should be
given every encouragement under the law, that the will of the workers may be discovered and, through their freely
chosen representatives, pursued and realized.
WHEREFORE, the petition is DENIED. The temporary restraining order of August 20, 1986, is LIFTED. Cost against the
petitioner.
SO ORDERED.
#14 G.R. No. 76673 June 22, 1988
PHILIPPINE AIRLINES EMPLOYEES' ASSOCIATION (PALEA), petitioner,
vs.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, PHILIPPINE AIRLINES NON-MANAGERIAL
EMPLOYEES ASSOCIATION (PANOMEA-FUR), and PHILIPPINE AIRLINES, INC.,respondents.
Juanito R. Carlos, Jr. for private respondent PANOMEA-FUR.
Cenon S. Cervantes, Jr. for respondent PAL.

GRIO-AQUINO, J.:
Petitioner in this special civil action for certiorari and prohibition, alleges grave abuse of discretion on the part of the
Bureau of Labor Relations in issuing the following orders:
1. NCR Med-Arbiter Edgardo dela Cruz' Resolution dated January 13, 1981;
2. BLR Resolution dated November 27,1981 signed by OIC Romeo Young;
3. BLR Order signed by Director Cresenciano Trajano dated April 4, 1986;
4. BLR Order signed by Director Cresenciano Trajano dated June 26, 1986; and
5. BLR Order dated October 29, 1986 signed by Director Pura Ferrer-Calleja in BLR Case No. A-034-81 (NCR-LRD-M-9-
361-80).
Petitioner prays for the issuance of a restraining order enjoining the respondent BLR Director from proceeding with
the certification election in BLR Case No. 034-81 (NCR-LRD-M-9-361-80) and moves to dismiss the petition for
certification election filed by Philippine Airlines Non-Managerial Employees Association (PANOMEA-FUR).
The records show that prior to the effectivity of the Labor Code on November 1, 1974, there were four collective
bargaining agents in the Philippine Airlines, Inc., namely: 1) the Airline Pilots Association of the Philippine (ALPAP),
representing pilots; 2) Flight Attendants and Flight Stewards Association of the Philippines, (FASAP), representing
flight attendants and stewards; 3) Philippine Airlines Supervisors' Association (PALSA), representing ground
supervisory personnel, and 4) petitioner (PALEA) representing ground rank-and-file personnel.
Pursuant to Section II, Rule II of the Labor Code, in relation to Articles 212(k) and 246, Labor Code as amended, the
continued existence of PALSA was rejected, because a supervisory union could not organize as a labor unit separate
from that of the rank-and-file organization. In anticipation of PALSA's dissolution, the Philippine Airlines Personnel
Association (PALPA-Legayada) filed on November 19, 1974 a petition for certification election under BLR Case No.
0013. In this case, the BLR Director ruled on November 24,1975 that "all employees with the positions of division
heads or above shall be considered "managerial employees" and ineligible to vote, and all others shall be declared
rank and file."
On April 27,1977, a certification election was held among: (1) PALPA, (2) PALEA, and (3) No Union. PALEA, as the
winner in that election, was certified by the BLR as the exclusive bargaining agent of all the rank-and-file employee
of the Philippine Airlines, Inc.
PALEA and PAL signed a 3-year collective bargaining agreement effective October 1, 1976 up to September 30, 1979.
Its life was, by agreement of the parties, extended up to September 30, 1980.
Before the expiration of the agreement in September, 1980, the respondent Philippine Airlines Non-Managerial
Employees' Association (PANOMEA-FUR) filed a petition for certification election among the "administrative,
supervisory, licensed mechanics, technical and confidential employees" of PAL, alleging inter alia that "there is no
other union existing in the proposed bargaining unit nor is there a certified collective bargaining agreement which
may be a bar to the petition." PALEA, which had an existing collective bargaining agreement with the Management,
was not mentioned in the petition, nor notified of the filing of the same. Although PAL had filed its position paper in
the said certification election case, the Med-Arbiter issued a resolution on January 13, 1981, granting the petition for
a certification election among the administrative, supervisory, licensed mechanics, technical and confidential
employees of PAL with the following as the contending parties: P (1) PANOMEA-FUR and (2) No Union.
Upon learning of the Med-Arbiters resolution. PALEA appealed to the BLR Director on February 9, 1981 as a
compulsory intervenor. The BLR Officer-in-charge affirmed on November 27, 1981 the Med-Arbiter's resolution
calling for a certification election. PALEA and PAL filed separate motions for reconsideration of the BLR resolution.
Meanwhile, PAL and PALEA concluded a collective bargaining agreement on May 19, 1981, with a three-year life
span from October 1, 1980 to September 30, 1983. It was renewed for another three-year period expiring on
September 30, 1986.
While PAL and PALEA's motions for reconsideration were pending resolution by the BLR Director, the licensed
mechanics whom PANOMEA-FUR sought to represent, filed their own petition for certification election on October
16, 1984 under the name of PAL Licensed/Amalgamated Federation of Labor of the Philippines (PALMA-AFL).
PAL and PLEA separately filed an answer/opposition to the petition of PALMA-AFL. PALEA argued that it was the
exclusive bargaining agent of the rank-and-file employees of PAL, including the members of PALMA-AFL who are
also embraced within the CBA that was concluded between PAL and PALEA.
On October 11, 1985, the BLR Director dismissed the petition of the licensed mechanics only (PALMA-AFL), excluding
the administrative, supervisory, technical and confidential employees. He ruled that the existing law did not allow
the creation of a separate bargaining unit for the licensed mechanics at PAL, because they were considered
members of the existing rank-and-file unit represented for collective bargaining purposes by PALEA.
However, on April 4, 1986, the BLR Director ordered the holding of a certification election among the administrative,
supervisory, licensed mechanics, technical and confidential employees of PAL and denied PAL's and PALEA's motions
for reconsideration of the BLR's November 27, 1981 decision.
In his Order of June 26, 1986, BLR Director Cresciano Trajano denied PAL's and PALEA's motions for reconsideration.
However, finding it necessary to conduct pre-election conferences to delineate the proper composition of the
proposed bargaining unit, the BLR on August 15, 1986 temporarily restrained the holding of the certification
election. On October 29, 1986, BLR Director Calleja lifted the restraining order and directed the holding of the said
election.
Hence, this petition for certiorari by PALEA, alleging that the BLR Director erred:
1. in ordering a certification election among PAL's administrative, supervisory, licensed mechanics, technical and
confidential employees as a separate bargaining unit distinct from the rank-and-file employees, in violation of
specific provisions of the Labor Code as amended, particularly Article 256 thereof; and
2. in not dismissing the petition for certification election filed by respondent PANOMEA-FUR (NCR-LRD-M-9-361-80)
for having been rendered moot and academic by supervening factors.
Petitioner claims that PALEA is the exclusive bargaining representative of all rank-and-file PAL employees, and that
PANOMEA seeks to dismember or fragmentize the already existing unit so that another one may be created.
Furthermore, petitioner argues that PANOMEA's petition for a certification election is fatally defective, as it is not
supported by the signatures of at least 30% of the bargaining unit composed of 7,000 rank-and-file employees (only
369 signatures were allegedly obtained), contrary to law and national policy.
We are not persuaded that the public respondent gravely abused her discretion in issuing the assailed orders.
The rule is that factual findings of the Bureau of Labor Relations which are supported by substantial evidence are
binding on this Court and must be respected (Asian Design and Manufacturing Corp. vs. Deputy Minister of Labor,
142 SCRA 79). The Bureau of Labor Relations found that the present CBA between PALEA and PAL covers only the
rank and file employees but not the licensed mechanics, administrative, supervisory, technical and confidential
employees of PAL. The petition failed to prove that PANOMEA's petition lacked the support of 30% of the
employees.
Employees have a constitutional right to choose their own bargaining representative. The holding of a certification
election is a statutory policy that should not be circumvented (George and Peter Lines, Inc. vs. Association of Labor
Unions [ALU], 134 SCRA 92).
Whenever there is doubt as to whether a particular union represents the majority of the rank-and-file employees, in
the absence of a legal impediment, the holding of a certification election is the most democratic method of
determining the employees' choice of their bargaining representative. It is the appropriate means whereby
controversies and disputes on representation may be laid to rest, by the unequivocal vote of the employees
themselves. In lifting the restraining order which her predecessor had issued, and ordering that the certification
election proceed, respondent Ferrer-Calleja opened the door for the employees to express their choice.
WHEREFORE, the petition is dismissed for lack of merit.
SO ORDERED.
#15 G.R. No. L-14656 November 29, 1960
PHILIPPINE LAND-AIR-SEA LABOR UNION (PLASLU), petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, ET AL., respondents.
Emilio Lumontad for petitioner.
Simeon S. Andres for respondent CIR.
Severino, Ferrer, Revira and Benigno for respondent AWA.
Hilado and Hilado for respondent San Carlos Milling Co.
GUTIERREZ DAVID, J.:
This is a petition to review on certiorari an order of the Court of Industrial Relations in Case No. 38 MC-Cebu
certifying the Allied Workers' Association of the Philippines, San Carlos Chapter, as the sole collective bargaining
representative of the employees of the San Carlos Milling Co., Inc.
The record shows that in said Case No. 38 MC-Cebu the Industrial Court on May 25, 1956 ordered the holding of a
certification election to determine which of the two contending labor unions therein, herein petitioner Philippine
Land-Air-Sea Labor Union (PLASLU)or respondent Allied Workers' Association of the Philippines (AWA), shall be the
sole collective bargaining agent to the employees of the San Carlos Milling Co. The pertinent portions of the court's
order read as follows:
Considering the history of bargaining relations in this case where there has only been one bargaining unit, and for
purposes of effectuating the policies of the Act, the same should be maintained. In other words, the appropriate
bargaining unit is the Employer unit composed of 602 employees including some 200 piece work (pakiao) workers
and stevedores appearing in the Employer's payrolls during the milling and off the season minus the alleged laborers
and operators of farm tractors who are hired and paid by the sugar cane planters. (Emphasis supplied.)
All the foregoing considered, the Court hereby directs the Department of Labor to conduct a certification election in
the premises of the San Carlos Milling Company, Ltd. at San Carlos, Negros Occidental for the purpose of
determining, under existing rules and regulations on the matter, which of the two (2) contending labor unions
herein, the PLASLU or the AWA shall be the sole collective bargaining agent in accordance with the provisions of the
Act. The Employer is hereby ordered to submit a list of employees appearing in its payroll during milling season for
the year 1955 to the Department of Labor which, together with the "Exhibit X-Court" 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 excluded from participating in said election. (Emphasis supplied.)
SO ORDERED.
Prior to the holding of the election, respondent AWA filed an urgent motion to exclude 144 employees from
participating in the election. The motion, however, was denied, the Industrial Court holding that the workers sought
to be excluded were eligible to vote since they were actual employees of good standing of the respondent company
during the milling season of 1955 and were included in the company's payroll as of that date.
On September 21, 1956, the certification election was held in the premises of the San Carlos Milling Co., PLASLU
receiving 88 votes while AWA garnered 149, with 390 ballots recorded as challenged, 242 of them by the petitioner
PLASLU and 148 by the respondent AWA filed with the Industrial Court a petition contesting the election on the
ground of the ineligibility of the voters cast the 148 ballots is challenged by PLASLU were cast by legitimate
employee of the company, as they were the votes of "piece work (pakiao) workers and stevedores appearing in the
employer's payroll during the milling and off-season" of 1955. PLSLU, on the other hand, in an urgent motion filed
on October 4, 1956, questioned the validity of the 242 ballots cast by stevedores and piece workers. The motion was
opposed by AWA on the ground that as a protest of the election it was filed late. The Industrial Court, however,
considered the same as an answer to AWA'S petition, and on September 4, 1957, after hearing the arguments of the
parties, ordered that all the 390 challenged ballots were opened. After the canvass, 148 votes challenged by
AWA were counted in favor of PLASLU. Of the 242 votes challenged by PLASLU, 3 were counted in its favor, 228
credited in favor of AWA, and 11 declared either for no union or spoiled ballots. Adding the votes to the results of
the certification election, the final count showed that respondent AWA garnered a total of 377 votes as against 239
for PLASLU. Accordingly, said respondent was certified by the Industrial Court in its order dated March 12, 1958 as
the sole collective bargaining agent of the employees of the San Carlos Milling Co. As its motion for reconsideration
of the order was denied by the court en banc with Judge Feliciano Tabigne dissenting -- the petitioner PLASLU
filed the present petition for review, contending that Industrial Court erred in not excluding the 242 votes
challenged by it from the total number of votes credited to respondent AWA.
We find petitioner's contention to be meritorious.
In order of May 25, 1956 authorizing the certification election, the trial judge of the Industrial Court directed the "list
of employees appearing in its payroll during milling season for the year 1955 ... together with the Exhibit "X-Court"
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 excluded from participating in said election." It being
undisputed that the challenged votes were cast by casual employees consisting of stevedores and piece workers
who as stated by Judge Tabigne in his dissent "were not included in the list of employees appearing in the
payroll of the company during the milling season for the year 1955 nor did they appear in the Exhibit "X-Court"
which formed portion of the list of personnel allowed to vote in this certification election", the said challenged votes
should have been excluded. Citing that the appropriate bargaining unit is the employer's unit composed of 602
employees, including the piece workers and stevedores whose votes were challenged by PLASLU, the respondent
AWA argues that the challenged votes were cast by employees eligible to vote. It will be noted, however, that these
employees whose votes were challenged were hired on temporary or casual basis and had work of a different
nature from those of the laborers permitted to vote in the certification election. In the case of Democratic Labor
Union vs. Cebu Stevedoring Co., Inc., et al. (G.R. No. L-10321, February 28, 1958) this Court 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
work to which they belong, and the unity of the employees' interest. And this is so because the basic test of a
bargaining unit's acceptability is whether it will best assure to all employees is whether it will be assure to all
employees the exercise of their collective bargaining rights. (See also Alhambra Cigar & Cigarette Manufacturing Co.
vs. Alhambra Employee's Association, 107 Phil., 23.) It appearing that the 242 stevedores and piece workers, whose
votes have been challenged, were employed on casual or day to day basis and have no reasonable basis for
continued or renewed employment for any appreciable substantial time not to mention the nature of work they
perform they cannot be considered to have such mutuality of interest as to justify 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
Industrial Court dated September 4, 1957, which has become final and executory the same not having been
appealed. It will be observed that the said order of September 4, 1957, merely ordered the opening and canvassing
of the challenged ballots. Any appeal taken from said order would therefore have been premature.
Disregarding the votes cast by stevedores and piece workers which were counted in favor of the respondent AWA,
the final results of the certification election show that the petitioner PLASLU garnered a majority of the votes cast by
eligible voters. Consequently, said petitioner should be certified as the sole collective bargaining representative of
the employees of the San Carlos Milling Co.
Wherefore, the order complained of is reversed and the petitioner PLASLU is hereby certified as the collective
bargaining agent of the employees of the San Carlos Milling Company. Without costs.
#16 G.R. No. 96189 July 14, 1992
UNIVERSITY OF THE PHILIPPINES, petitioner,
vs.
HON. PURA FERRER-CALLEJA, Director of the Bureau of Labor Relations, Department of Labor and Employment,
and THE ALL U.P. WORKERS' UNION, represented by its President, Rosario del Rosario,respondent.

NARVASA, C.J.:
In this special civil action of certiorari the University of the Philippines seeks the nullification of the Order dated
October 30, 1990 of Director Pura Ferrer-Calleja of the Bureau of Labor Relations holding that "professors, associate
professors and assistant professors (of the University of the Philippines) are . . rank-and-file employees . . ;"
consequently, they should, together with the so-called non-academic, non-teaching, and all other employees of the
University, be represented by only one labor organization.
1
The University is joined in this undertaking by the
Solicitor General who "has taken a position not contrary to that of petitioner and, in fact, has manifested . . that he
is not opposing the petition . . ."
2

The case
3
was initiated in the Bureau of Labor Relations by a petition filed on March 2, 1990 by a registered labor
union, the "Organization of Non-Academic Personnel of UP" (ONAPUP).
4
Claiming to have a membership of 3,236
members comprising more than 33% of the 9,617 persons constituting the non-academic personnel of UP-
Diliman, Los Baos, Manila, and Visayas, it sought the holding of a certification election among all said non-academic
employees of the University of the Philippines. At a conference thereafter held on March 22, 1990 in the Bureau, the
University stated that it had no objection to the election.
On April 18, 1990, another registered labor union, the "All UP Workers' Union,"
5
filed a comment, as intervenor in
the certification election proceeding. Alleging that its membership covers both academic and non-academic
personnel, and that it aims to unite all UP rank-and-file employees in one union, it declared its assent to the holding
of the election provided the appropriate organizational unit was first clearly defined. It observed in this connection
that the Research, Extension and Professional Staff (REPS), who are academic non-teaching personnel, should not be
deemed part of the organizational unit.
For its part, the University, through its General Counsel,
6
made of record its view that there should be two (2)
unions: one for academic, the other for non-academic or administrative, personnel considering the dichotomy of
interests, conditions and rules governing these employee groups.
Director Calleja ruled on the matter on August 7, 1990.
7
She declared that "the appropriate organizational unit . .
should embrace all the regular rank-and-file employees, teaching and non-teaching, of the University of the
Philippines, including all its branches" and that there was no sufficient evidence "to justify the grouping of the non-
academic or administrative personnel into an organization unit apart and distinct from that of the academic or
teaching personnel." Director Calleja adverted to Section 9 of Executive Order No. 180, viz.:
Sec. 9. The appropriate organizational unit shall be the employer unit consisting of rank-and-file employees, unless
circumstances otherwise require.
and Section 1, Rule IV of the Rules Implementing said EO 180 (as amended by SEC. 2, Resolution of Public Sector
Labor Management Council dated May 14, 1989, viz.:
xxx xxx xxx
For purposes of registration, an appropriate organizational unit may refer to:
xxx xxx xxx
d. State universities or colleges, government-owned or controlled corporations with original charters.
She went on to say that the general intent of EO 180 was "not to fragmentize the employer unit, as "can be gleaned
from the definition of the term "accredited employees' organization," which refers to:
. . a registered organization of the rank-and-file employees as defined in these rules recognized to negotiate for the
employees in an organizational unit headed by an officer with sufficient authority to bind the agency, such as . . . . . .
state colleges and universities.
The Director thus commanded that a certification election be "conducted among rank-and-file employees, teaching
and non-teaching" in all four autonomous campuses of the UP, and that management appear and bring copies of the
corresponding payrolls for January, June, and July, 1990 at the "usual pre-election conference . . ."
At the pre-election conference held on March 22, 1990 at the Labor Organizational Division of the DOLE, 8 the
University sought further clarification of the coverage of the term, "rank-and-file" 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, excluded by law.
At a subsequent hearing (on October 4, 1990), the University filed a Manifestation seeking the exclusion from the
organizational unit of those employees holding supervisory positions among non-academic personnel, and those in
teaching staff with the rank of Assistant Professor or higher, submitting the following as grounds therefor:
1) Certain "high-level employees" with policy-making, managerial, or confidential functions, are ineligible to join
rank-and-file employee organizations under Section 3, EO 180:
Sec. 3. High-level employees whose functions are normally considered as policy-making or managerial or whose
duties are of a highly confidential nature shall not be eligible to join the organization of rank-and file government
employees;
2) In the University hierarchy, not all teaching and non-teaching personnel belong the rank-and file: just 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 staff;
3) Among the non-teaching employees composed of Administrative Staff and Research personnel, only those
holding positions below Grade 18 should be regarded as rank-and-file, considering that those holding higher grade
positions, like Chiefs of Sections, perform supervisory functions including that of effectively recommending
termination of appointments or initiating appointments and promotions; and
4) Not all teaching personnel may be deemed included in the term, "rank-and-file;" only those holding appointments
at the instructor level may be so considered, because those holding appointments from Assistant Professor to
Associate Professor to full Professor take part, as members of the University Council, a policy-making body, in the
initiation of policies and rules with respect to faculty tenure and promotion.
9

The ONAPUP quite categorically made of record its position; that it was not opposing the University's proferred
classification of rank-and file employees. On the other hand, the "All UP Workers' Union" opposed the University's
view, in a Position Paper presented by it under date of October 18, 1990.
Director Calleja subsequently promulgated an Order dated October 30, 1990, resolving the "sole issue" of "whether
or not professors, associate professors and assistant professors are included in the definition of high-level
employee(s)" in light of Rule I, Section (1) of the Implementing Guidelines of Executive Order No. 180, defining "high
level employee" as follows:
1. High Level Employee is one whose functions are normally considered policy determining, managerial or one
whose duties are highly confidential in nature. A managerial function refers to the exercise of powers such as:
1. To effectively recommend such managerial actions;
2. To formulate or execute management policies and decisions; or
3. To hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline employees.
The Director adjudged that said teachers are rank-and-file employees "qualified to join unions and vote in
certification elections." According to her
A careful perusal of the University Code . . shows that the policy-making powers of the Council are limited to
academic matters, namely, prescribing courses of study and rules of discipline, fixing student admission and
graduation requirements, recommending to the Board 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, executive, or organization policies, such as hiring, firing, and disciplining of employees,
salaries, teaching/working 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 join the union of rank-and-file
employees.
The University seasonably moved for reconsideration, seeking to make the following points, to wit:
1) UP professors do "wield the most potent managerial powers: the power to rule on tenure, on the creation of new
programs and new jobs, and conversely, the abolition of old programs and the attendant re-assignment of
employees.
2) To say that the Council is "limited to (acting on) academic matters" is error, since academic decisions "are the
most important decisions made in a University . . (being, as it were) the heart, the core of the University as a
workplace.
3) Considering that the law regards as a "high level" employee, one who performs either policy-determining,
managerial, or confidential functions, the Director erred in applying only the "managerial functions" test, ignoring
the "policy-determining functions" test.
4) The Director's interpretation of the law would lead to absurd results, e.g.: "an administrative officer of the College
of Law is a high level employee, while a full Professor who has published several treatises and who has distinguished
himself in argument before the Supreme Court is a mere rank-and-file employee. A dormitory manager is classified
as a high level employee, while a full Professor or Political Science with a Ph. D. and several Honorary doctorates is
classified as rank-and-file."
10

The motion for reconsideration was denied by Director Calleja, by Order dated November 20, 1990.
The University would now have this Court declare void the Director's Order of October 30, 1990 as well as that of
November 20, 1990.
11
A temporary restraining order was issued by the Court, by Resolution dated December 5,
1990 conformably to the University's application therefor.
Two issues arise from these undisputed facts. One is whether or not professors, associate professors and assistant
professors are "high-level employees" "whose functions are normally considered policy determining, managerial or .
. highly confidential in nature." 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 University,
13
considering the dichotomy of interests, conditions and rules existing
between them.
As regards the first issue, the Court is satisfied that it has been correctly resolved by the respondent Director of
Bureau Relations. In light of Executive Order No. 180 and its implementing rules, as well as the University's charter
and relevant regulations, the professors, associate professors and assistant professors (hereafter simply referred to
as professors) cannot be considered as exercising such managerial or highly confidential functions as would justify
their being categorized as "high-level employees" of the institution.
The Academic Personnel Committees, through which the professors supposedly exercise managerial functions, were
constituted "in order to foster greater involvement of the faculty and other academic personnel in appointments,
promotions, and other personnel matters that directly affect them."
14
Academic Personnel Committees at the
departmental and college levels were organized "consistent with, and demonstrative of the very idea of consulting
the faculty and other academic personnel on matters directly affecting them" and to allow "flexibility in the
determination of guidelines peculiar to a particular department or college."
15

Personnel actions affecting the faculty and other academic personnel should, however, "be considered under
uniform guidelines and consistent with the Resolution of the Board (of Regents) adopted during its 789th Meeting
(11-26-69) creating the University Academic Personnel Board."
16
Thus, the Departmental Academic Personnel
Committee is given the function of "assist(ing) in the review of the recommendations initiated by the Department
Chairman with regard to recruitment, selection, performance evaluation, tenure and staff development, in
accordance with the general guidelines formulated by the University Academic Personnel Board and the
implementing details laid down by the College Academic Personnel Committee;"
17
while the College Academic
Personnel Committee is entrusted with the following functions:
18

1. Assist the Dean in setting up the details for the implementation of policies, rules, standards or general guidelines
as formulated by the University Academic Personnel Board;
2. Review the recommendation submitted by the DAPCs with regard to recruitment, selection, performance
evaluation, tenure, staff development, and promotion of the faculty and other academic personnel of the College;
3. Establish departmental priorities in the allocation of available funds for promotion;
4. Act on cases of disagreement between the Chairman and the members of the DAPC particularly on personnel
matters covered by this Order;
5. Act on complaints and/or protests against personnel actions made by the Department Chairman and/or the DAPC.
The University Academic Personnel Board, on the other hand, performs the following functions:
19

1. Assist the Chancellor in the review of the recommendations of the CAPC'S.
2. Act on cases of disagreement between the Dean and the CAPC.
3. Formulate policies, rules, and standards with respect to the selection, compensation, and promotion of members
of the academic staff.
4. Assist the Chancellor 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 University Academic Personnel Committee, 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 committees' functions are purely recommendatory in nature, subject to review and evaluation
by the University Academic Personnel Board. In Franklin Baker Company of the Philippines vs. Trajano,
20
this Court
reiterated the principle laid down in National Merchandising Corp. vs. Court of Industrial Relations,
21
that the power
to recommend, in order to qualify an employee as a supervisor or managerial employee "must not only
be effective but the exercise of such authority should not be merely of a routinary or clerical nature but should
require the use of independent judgment." Where such recommendatory powers, as in the case at bar, are subject
to evaluation, review and final action by the department heads and other higher executives of the company, the
same, although present, are not effective and not an exercise of independent judgment as required by law.
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 unlike
the chiefs of divisions and sections of the National Waterworks and Sewerage Authority whom this Court considered
as rank-and-file employees in National Waterworks & Sewerage Authority vs. NWSA Consolidated Unions,
22
because
"given ready policies to execute and standard practices to observe for their execution, . . . they have little freedom
of action, as their main function is merely to carry out the company's orders, plans and policies."
The power or prerogative pertaining to a high-level employee "to effectively recommend such managerial actions, to
formulate or execute management policies or decisions and/or to hire, transfer, suspend, lay-off, recall, dismiss,
assign or discipline employees"
23
is exercised to a certain degree by the university academic personnel
board/committees and ultimately by the Board of Regents in accordance with Section 6 of the University
Charter,
24
thus:
(e) To appoint, on the recommendation of the President of the University, professors, instructors, lecturers and
other employees of the University; to fix their compensation, hours of service, and such other duties and conditions
as it may deem proper; 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.
Another factor that militates against petitioner's 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. Membership and the number of members in the committees are provided as follows:
25

Sec. 2. Membership in Committees. Membership 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. 3. Number of Members. In addition to the Chairman, in the case of a department, and the Dean 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.
Neither can membership in the University Council elevate the professors to the status of high-level employees.
Section 6 (f) and 9 of the UP Charter respectively provide:
26

Sec. 6. The Board of Regents shall have the following powers and duties . . . ;
xxx xxx xxx
(f) To approve the courses of study and rules of discipline drawn up by the University Council as hereinafter
provided; . . .
Sec. 9. There shall be a University Council consisting of the President of the University and of all instructors in the
university holding the rank of professor, associate professor, or assistant professor. The Council shall have the power
to prescribe the courses of study and rules of discipline, subject to the approval of the Board of Regents. It shall fix
the requirements for admission to any college of the university, as well as for graduation and the receiving of a
degree. The Council 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 within the limits prescribed
by the rules of discipline approved by the Board of Regents. The powers and duties of the President of the University,
in addition to those specifically provided in this Act shall be those usually pertaining to the office of president of a
university.
It is readily apparent that the policy-determining functions of the University Council are subject to review,
evaluation and final approval by the Board of Regents. The Council's power of discipline is likewise circumscribed by
the limits imposed by the Board 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 University Council.
Even assuming arguendo that UP professors discharge policy-determining functions through the University Council,
still such exercise would not qualify them as high-level employees within the context of E.O. 180. As correctly
observed by private respondent, "Executive Order No. 180 is a law concerning public sector unionism. It must
therefore be construed within that context. Within that context, the University of the Philippines represents the
government as an employer. 'Policy-determining' refers to policy-determination in university mattes that affect
those same matters that may be the subject of negotiation between public sector management and labor. The
reason why 'policy-determining' has been laid down as a test in segregating rank-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 seek to change these policies for their collective welfare."
27

The policy-determining functions of the University Council refer to academic matters, i.e. those governing the
relationship between the University and its students, and not the University as an employer and the professors as
employees. It is thus evident that no conflict of interest results in the professors being members of the University
Council and being classified as rank-and-file employees.
Be that as it may, does it follow, as public respondent would propose, that all rank-and-file employees of the
university are to be organized into a single collective bargaining unit?
A "bargaining unit" 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

Our labor laws do not however provide the criteria for determining the proper collective bargaining unit. Section 12
of the old law, Republic Act No. 875 otherwise known as the Industrial Peace Act, simply reads as follows:
29

Sec. 12. Exclusive Collective Bargaining Representation for Labor Organizations. The labor organization designated
or selected for the purpose of collective bargaining by the majority of the employees in an appropriate collective
bargaining unit shall be the exclusive 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 employment; Provided,
That any individual employee or group of employees shall have the right at any time to present grievances to their
employer.
Although said Section 12 of the Industrial Peace Act was subsequently incorporated into the Labor Code with minor
changes, no guidelines were included in said Code for determination of an appropriate bargaining unit in a given
case.
30
Thus, apart from the single descriptive word "appropriate," no specific guide for determining the proper
collective bargaining unit can be found in the statutes.
Even Executive Order No. 180 already adverted to is not much help. All it says, in its Section 9, is that "(t)he
appropriate organizational unit shall be the employer unit consisting of rank-and-file employees, unless
circumstances otherwise require." Case law fortunately furnishes some guidelines.
When first confronted with the task of determining the proper collective bargaining unit in a particular controversy,
the Court had perforce to rely on American jurisprudence. In Democratic Labor Association vs. Cebu Stevedoring
Company, Inc., decided on February 28, 1958,
31
the Court observed that "the issue of how to determine the proper
collective bargaining unit and what unit would be appropriate to be the collective bargaining
agency" . . . "is novel in this jurisdiction; however, American precedents on the matter abound . . (to which resort
may be had) considering that our present Magna Carta has been patterned after the American law on the subject."
Said the Court:
. . . Under these precedents, there are various factors which must be satisfied and considered in determining the
proper constituency of a bargaining unit. No 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 factors? Rothenberg mentions a good number, but the most pertinent to our case are:
(1) will of the employees (Globe Doctrine); (2) affinity and unit of employees' interest, such as substantial similarity
of work and duties, or similarity of compensation and working conditions; (3) prior collective bargaining history; and
(4) employment status, such as temporary, seasonal probationary employees. . . .
xxx xxx xxx
An enlightening appraisal of the problem of defining an appropriate bargaining unit is given in the 10th Annual
Report of the National Labor Relations Board wherein it is emphasized that the factors which said board may
consider and weigh in fixing appropriate units are: the history, extent and type of organization of employees; the
history of their collective bargaining; the history, extent and type of organization of employees in other plants of the
same employer, or other employers in the same industry; the skill, wages, work, and working conditions of the
employees; the desires of the employees; the eligibility of the employees for membership in the union or unions
involved; and the relationship between the unit or units proposed and the employer's organization, management,
and operation. . . .
. . In said report, it is likewise emphasized 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,
working conditions and other subjects of collective bargaining (citing Smith on Labor Laws, 316-317; Francisco, Labor
Laws, 162). . . .
The Court further explained that "(t)he test of the grouping is community or mutuality of interests. And this is so
because 'the basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective bargaining rights' (Rothenberg on
Labor Relations, 490)." Hence, in that case, the Court upheld the trial court's 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 "community or mutuality of interests" test has provided the standard in determining the proper
constituency of a collective bargaining unit. In Alhambra Cigar & Cigarette Manufacturing Company, et al. vs.
Alhambra Employees' Association (PAFLU), 107 Phil. 23, the Court, noting that the employees in the administrative,
sales and dispensary departments of a cigar and cigarette manufacturing firm perform work which have nothing to
do with production and maintenance, unlike those in the raw lead (malalasi), cigar, cigarette, packing (precintera)
and engineering and garage departments, authorized the formation of the former set of employees into a separate
collective bargaining unit. The ruling in the Democratic Labor Association case,supra, was reiterated in Philippine
Land-Air-Sea Labor Unit vs. Court of Industrial Relations, 110 Phil. 176, where casual employees were barred from
joining the union of the permanent and regular employees.
Applying the same "community or mutuality of interests" test, but resulting in the formation of only one collective
bargaining units is the case of National Association of Free Trade Unions vs. Mainit Lumber Development Company
Workers Union-United Lumber and General Workers of the Phils., G.R. No. 79526, December 21, 1990, 192 SCRA 598.
In said case, the Court ordered the formation of a single bargaining unit consisting of the Sawmill Division in Butuan
City and the Logging Division in Zapanta Valley, Kitcharao, Agusan Norte of the Mainit Lumber Development
Company. The Court reasoned:
Certainly, there is a mutuality of interest among the employees of the Sawmill Division and the Logging Division.
Their functions mesh with one another. One 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.
In the case at bar, the University employees may, as already suggested, quite easily be categorized into two general
classes: one, the group composed of employees whose functions are non-academic, i.e., janitors, messengers,
typists, clerks, receptionists, carpenters, electricians, grounds-keepers, chauffeurs, mechanics, plumbers;
32
and two,
the group made up of those performing academic functions, i.e., full professors, associate professors, assistant
professors, instructors who may be judges or government executives and research, extension and professorial
staff.
33
Not much reflection is needed to perceive that the community or mutuality of interests which justifies the
formation of a single collective bargaining unit is wanting between the academic and non-academic personnel of the
university. It would seem obvious that teachers would find very little in common with the University clerks and other
non-academic employees as regards responsibilities and functions, working conditions, compensation rates, social
life and interests, skills and intellectual pursuits, cultural activities, etc. On the contrary, the dichotomy of interests,
the dissimilarity in the nature of the work and duties as well as in the compensation and working 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 rank-and-file non-
academic personnel, and the second, of the rank-and-file academic employees, is the set-up that will best assure to
all the employees the exercise 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 work, wages and compensation
between the academic and non-academic personnel, bring the case at bar within the exception contemplated in
Section 9 of Executive Order No. 180. It was grave abuse of discretion on the part of the Labor Relations Director to
have ruled otherwise, ignoring plain and patent realities.
WHEREFORE, the assailed Order of October 30, 1990 is hereby AFFIRMED in so far as it declares the professors,
associate professors and assistant professors of the University of the Philippines as rank-and-file employees. The
Order of August 7, 1990 is MODIFIED in the sense that the non-academic rank-and-file employees of the University
of the Philippines shall constitute a bargaining unit to the exclusion of the academic employees of the institution
i.e., full professors, associate professors, assistant professors, instructors, and the research, extension and
professorial staff, who may, if so minded, organize themselves into a separate collective bargaining unit; and that,
therefore, only said non-academic rank-and-file personnel of the University of the Philippines in Diliman, Manila, Los
Baos and the Visayas are to participate in the certification election.
SO ORDERED.
#17 G.R. No. 85343 June 28, 1989
PHILTRANCO SERVICE ENTERPRISES, petitioner,
vs.
BUREAU OF LABOR RELATIONS and KAPISANAN NG MGA KAWANI, ASSISTANT, MANGGAGAWA AT
KONPIDENSIYAL SA PHILTRANCO, respondents.
Bengzon, Zarraga, Narciso, Cudala, Pecson & Bengson for petitioner.
Lily S. Dayaon for KASAMA KO .

GUTIERREZ, JR., J.:
In this petition for certiorari, the petitioner assails the order of the Bureau of Labor Relations (BLR) dated September
5, 1988. The dispositive portion of the order reads:
WHEREFORE, premises considered, the Order of the Med-Arbiter dated 4 April 1988 is hereby set aside and vacated
and a new one entered ordering the conduct of a certification election among regular rank-and-file professional,
technical, administrative and confidential employees of respondent company, with the following choices:
1. Kapisanan ng mga Kawani, Assistant Manggagawa at Konpidensyal sa Philtranco (KASAMA KO)
2. No Union.
Let, therefore the records of the case be remanded to the Office of origin for the immediate conduct of the election.
SO ORDERED. (Rollo, p. 33)
The antecedent facts are as follows:
Petitioner Philtranco Service Enterprises, Inc. is a land transportation company engaged in the business of carrying
passengers and freight. The company employees included field workers consisting of drivers, conductors, coach
drivers, coach stewards and mechanics and office employees like clerks, cashiers, programmers, telephone
operators, etc.
On February 15, 1988, the Kapisanan ng mga Kawani, Assistant, Manggagawa at Konpidensyal sa Philtranco
(KASAMA KO), a registered labor organization filed a petition for certification election with the Department of Labor
and Employment, alleging among others that:
xxx xxx xxx
3. Petitioner desires to represent all professional, technical, administrative, and confidential employees personnel of
respondent at its establishments in Luzon, Visayas and Mindanao for purposes of collective bargaining;
4. The aforementioned employees were always expressly excluded from participating in the certification election
conducted among the rank and file employees (drivers, conductors, coach drivers, coach stewards, and mechanics)
of respondent and are excluded from the bargaining unit covered by the CBA between respondent and its rank and
file employees. In addition, there exist substantial differences in the terms and conditions of employment between
the above-mentioned employees, hence, the former are covered by another appropriate bargaining unit which is
separate and distinct from that of the rank and file employees of respondent and; which has been recognized by the
Bureau of Labor Relations and upheld by the Honorable Supreme Court. Attached hereto as Annex 'A' and Annex 'B'
are copies of the decision of the BLR and the Supreme Court in support thereof;
xxx xxx xxx
6. The petition is supported by the signatures of more than twenty percent (20%) of all covered employees as
provided for by law and which shall be presented during the initial hearing;
xxx xxx xxx
8. There has been no Consent Election or Certification Election held and conducted by this Honorable Office for the
past three (3) years prior to the filing of this petition in the bargaining unit petitioner sought to represent, the last
Certification Election having been held last November 27, 1984. Attached hereto as Annex "C" is a copy of the Order
issued by this Honorable Office relative to the result of the last certification election. (Rollo, pp. 4-5)
On February 24, 1988, the National Mines and Allied Workers Union (NAMAWU-MIF) filed a motion for intervention
alleging that it is the bargaining agent of the workers at Philtranco and as such it has a substantial interest in the
outcome of the petition.
On February 26, 1988, Arbiter Paterno Adap called the parties to a hearing. Philtranco and NAMAWU were ordered
to submit their respective position papers and KASAMA KO was given the opportunity to submit a reply.
On April 4, 1988, a resolution was rendered with the following dispositive portion:
WHEREFORE, in the light of the foregoing premises, this petition is, as it is hereby ordered DISMISSED. If there are
still individual members of the herein petitioner eligible to join a labor organization, it is hereby directed that all
should be included/incorporated in the existing bargaining unit.
Parties are further directed/enjoined to device a mechanism for the implementation of the matter herein treated.
(Rollo, pp. 29-30)
KASAMA KO appealed to the Bureau of Labor Relations (BLR) On September 5, 1988 the BLR reversed the resolution
of the Med-Arbiter. A motion for reconsideration was denied in an order dated October 10, 1988.
As prayed for by the petitioner, a temporary restraining order was issued by this Court on November 7, 1988
restraining the BLR from enforcing and/or carrying out the decision dated September 5, 1988 and the order dated
October 10, 1988.
The Labor Code recognizes two (2) principal groups of employees, namely, the managerial and the rank and file
groups. Thus, Art. 212 (k) of the Code provides:
xxx xxx xxx
(k) Managerial employee' is one who is vested with powers or prerogatives to lay down and execute management
policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively
recommend such managerial actions. All employees not falling within this definition are considered rank and file
employees for purposes of this Book.
In implementation of the aforequoted provision of the law, Section 11 of Rule II, Book V of the Omnibus Rules
implementing the Labor Code did away with existing supervisors' unions classifying the members either as
managerial or rank and file employees depending on the work they perform. If they discharge managerial functions,
supervisors are prohibited from forming or joining any labor organization. If they do not perform managerial work,
they may join the rank and file union and if none exists, they may form one such rank and file organization. This rule
was emphasized in the case of Bulletin Publishing Corp. v. Sanchez, (144 SCRA 628 [1986]).
It, therefore, follows that the members of the KASAMA KO who are professional, technical, administrative and
confidential personnel of PHILTRANCO performing managerial functions are not qualified to join, much less form a
union. This rationalizes the exclusion of managers and confidential employees exercising managerial functions from
the ambit of the collective bargaining unit. As correctly observed by Med-Arbiter Adap:
... managerial and confidential employees were expressly excluded within the operational ambit of the bargaining
unit for the simple reason that under the law, managers are disqualified to be members of a labor organization.
On the other hand, confidential workers were not included because either they were performing managerial
functions and/or their duties and responsibilities were considered or may be categorized as part and parcel of
management as the primary reason for their exclusion in the bargaining unit. The other categorized employees were
likewise not included because parties have agreed on the fact that the aforementioned group of workers are not
qualified to join a labor organization at the time the agreement was executed and that they were classified as
outside the parameter of the bargaining unit. (Rollo, pp. 28-29)
The respondents, on the other hand, aver that the members of the respondent union are rank and file employees
qualified to form a union. In fact their status as rank and file employees was allegedly recognized by this Court in the
case of Pantranco South Express, Inc. v. NAMAWU, (G.R. No. 67475, July 30, 1984).
The reliance on the Pantranco South Express, Inc. case is misplaced. The petition filed by Pantranco South Express
Inc. simply asked for a ruling that certain employees were performing managerial functions. We denied the petition
for lack of merit in a minute resolution. There was absolutely no discussion on the recognition of another separate
rank and file union in addition to the existing bargaining unit.
There is no conflict. The employees of Philtranco have been appraised and their functions evaluated. Managers by
any name may not join the rank and file union. On the other hand, those who are rank and file workers may join the
existing bargaining unit instead of organizing another bargaining unit and compelling the employer to deal with it.
We are constrained to disallow the formation of another union. There is no dispute that there exists a labor union in
the company, herein intervenor, the NAMAWU-MIF which is the collective bargaining agent of the rank and file
employees in PHILTRANCO.
Article 2 of the Collective Bargaining Agreement between PHILTRANCO and NAMAWU-MIF under the sub-title
Appropriate Bargaining Unit provides:
Section 1 -The appropriate bargaining unit covered by this agreement consists of all regular rank- and file employees
of the company. Managerial, confidential, casuals, temporary, probationary and contractual employees as well as
trainees, apprentices, security personnel and foreman are excluded from the bargaining unit and therefore, not
covered by this AGREEMENT. The job description outside the bargaining unit are enumerated in the list hereto
attached as Annex '1' and made an integral part hereof (Emphasis supplied; Rollo, p. 27)
We see no need for the formation of another union in PHILTRANCO. The qualified members of the KASAMA KO may
join the NAMAWU-MIF if they want to be union members, and to be consistent with the one-union, one-company
policy of the Department of Labor and Employment, and the laws it enforces. As held in the case of General Rubber
and Footwear Corp. v. Bureau of Labor Relations (155 SCRA 283 [1987]):
... It has been the policy of the Bureau to encourage the formation of an employer unit 'unless circumstances
otherwise require. The proliferation of unions in an employer unit is discouraged as a matter of policy unless there
are compelling reasons which would deny a certain class of employees the right to self-organization for purposes of
collective bargaining. This case does not fall squarely within the exception. (Emphasis supplied).
There are no compelling reasons in this case such as a denial to the KASAMA KO group of the right to join the
certified bargaining unit or substantial distinctions warranting the recognition of a separate group of rank and file
workers. Precisely, NAMAWU-MIF intervened to make it clear it has no objections to qualified rank and file workers
joining its union.
It is natural in almost all fairly sized companies to have groups of workers discharging different functions. No
company could possibly have all employees performing exactly the same work. Variety of tasks is to be expected. It
would not be in the interest of sound labor-management relations if each group of employees assigned to a
specialized function or section would decide to break away from their fellow-workers and form their own separate
bargaining unit. We cannot allow one unit for typists and clerks, one unit for accountants, another unit for
messengers and drivers, and so on in needless profusion. Where shall the line be drawn? The questioned decision of
the public respondent can only lead to confusion, discord and labor strife.
The respondents state that this case is an exception to the general rule considering that substantial differences exist
between the office employees or professional, technical, administrative and confidential employees vis-a-vis the
field workers or drivers, conductors and mechanics of the petitioner. Against this contention, we find that the
"substantial differences" in the terms and conditions of employment between the private respondent's members
and the rest of the company's rank and file employees are more imagined than real. We agree with the petitioner
that the differences alleged are not substantial or significant enough to merit the formation of another union.
PHILTRANCO is a large bus company engaged in the business of carrying passengers and freight, servicing Luzon,
Visayas and Mindanao. Certainly there is a commonality of interest among filing clerks, dispatchers, drivers, typists,
and field men. They are all interested in the progress of their company and in each worker sharing in the fruits of
their endeavors equitably and generously. Their functions mesh with one another. One group needs the other in the
same way that the company needs them all. The drivers, mechanics and conductors are necessary for the company
but technical, administrative and office personnel are also needed and equally important for the smooth operation
of the business. There may be differences as to the nature of their individual assignments but the distinctions are
not enough to warrant the formation of separate unions. The private respondent has not even shown that a
separate bargaining unit would be beneficial to the employees concerned. Office employees also belong to the rank
and file. There is an existing employer wide unit in the company represented by NAMAWU-MIF. And as earlier
stated, the fact that NAMAWU-MIF moved to intervene in the petition for certification election filed by KASAMA KO
negates the allegations that "substantial differences" exist between the employees concerned. We find a
commonality of interest among them. There are no compelling reasons for the formation of another union.
We quote with favor Med-Arbiter Adap's rationale, to wit:
... It is against the policy of the Department of Labor to dismember the already wide existing bargaining unit because
of its well established goal towards a single employer wide unit which is more to the broader and greater benefit of
the employees working force.
The philosophy is to avoid fragmentation of the bargaining unit so as to strengthen the employees bargaining power
with the management. To do otherwise, would be contrary, inimical and repugnant to the objectives of a strong and
dynamic unionism. Let there be a unified whole rather than a divisive one, let them speak as one in a clear resonant
voice unmarred by dissension towards progressive unionism. (Rollo, p. 29)
WHEREFORE, the decision of the Bureau of Labor Relations, dated September 5, 1988 and the Order dated October
10, 1988 are hereby SET ASIDE. The resolution of the Med-Arbiter dated April 4, 1988 is REINSTATED. The restraining
order issued by the Court on November 7, 1988 is made permanent.
SO ORDERED.
#18 [G.R. No. 81883. September 23, 1992.]

KNITJOY MANUFACTURING, INC., Petitioner, v. PURA FERRER-CALLEJA, Director of Bureau of Labor Relations, and
KNITJOY MONTHLY EMPLOYEES UNION, Respondents.

[G.R. No. 82111. September 23, 1992.]

CONFEDERATION OF FILIPINO WORKERS (CFW), Petitioner, v. DIRECTOR PURA FERRER-CALLEJA and KNITJOY
MONTHLY EMPLOYEES UNION (KMEU), Respondents.

V.E. Del Rosario & Associates for petitioner in G.R. No. 81883.

Rogelio R. Udarbe for petitioner in G.R. No. 82111.

Banzuela, Flores, Miralles, Raneses, Sy, Taquio and Associates for Private Respondent.


SYLLABUS


1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR RELATIONS; ONE COMPANY-ONE UNION POLICY;
EXCEPTION. The suggested bias of the Labor Code in favor of the one company-one union policy, anchored on the
greater mutual benefits which the parties could derive, especially in the case of employees whose bargaining
strength could undeniably be enhanced by their unity and solidarity but diminished by their disunity, division and
dissension, is not without exceptions. The present Article 245 of the Labor Code expressly allows supervisory
employees who are not performing managerial functions to join, assist or form their separate union but bars them
from membership in a labor organization of the rank-and-file employees. Even Section 2(c), Rule V, Book V of the
Implementing Rules and Regulations of the Labor Code, which seeks to implement the policy, also recognizes
exceptions. The usual exception, of course, is where the employer unit has to give way to the other units like the
craft unit, plant unit, or a subdivision thereof, the recognition of these exceptions takes into account the policy to
assure employees of the fullest freedom in exercising their rights. Otherwise stated, the one company-one union
policy must yield to the right of the employees to form unions or associations for purposes not contrary to law, to
self-organization and to enter into collective bargaining negotiations, among others, which the Constitution
guarantees.

2. CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT TO FROM UNION OR ASSOCIATIONS; SCOPE. The right to form a
union or association or to self-organization comprehends two (2) broad notions, to wit: (a) the liberty or freedom,
i.e., the absence of restraint which guarantees that the employee may act for himself without being prevented by
law, and (b) the power, by virtue of which an employee may, as he pleases, join or refrain from joining an
association. (Victoriano v. Elizalde Rope Workers Union, 59 SCRA 54).

3. LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR RELATIONS; ONE COMPANY-ONE UNION POLICY; NOT
APPLICABLE WHERE EXISTING UNION COVERED ONLY ONE CLASS OF EMPLOYEES; CASE AT BAR. in the bargaining
history of KNITJOY, the CBA has been consistently limited to the regular rank-and-file employees paid on a daily or
piece-rate basis. On the other hand, the rank-and-file employees paid on a monthly basis were never included within
its scope. Respondent KMEUs membership is limited to the latter class of employees, KMEU does not seek to
dislodge CFW as the exclusive bargaining representative for the former. The records further disclose that in the
certification solicited by TUPAS and during the elections which followed thereafter, resulting in the certification of
CFW as the exclusive bargaining representative, the monthly-paid employees were expressly excluded. Thus, the
negotiations between CFW and KNITJOY following such a certification could only logically refer to the rank-and-file
employees paid on a daily or piece-rate basis. Clearly therefore, KNITJOY and CFW recognize that insofar as the
monthly-paid employees are concerned, the latters constituting a separate bargaining unit with the appropriate
union as sole bargaining representative, can neither be prevented nor avoided without infringing on these
employees rights to form a union and to enter into collective bargaining negotiations. Stated differently, KNITJOY
and CFW recognize the fact that the existing bargaining unit in the former is not and has never been the
employer unit. Given this historical and factual setting, KMEU had the unquestioned and undisputed right to seek
certification as the exclusive bargaining representative for the monthly-paid rank-and-file employees; both KNITJOY
and CFW cannot block the same on the basis of this Courts declaration in Bulletin Publishing Corp. v. Hon. Sanchez
15 and General Rubber and Footwear Corp. v. Bureau of Labor Relations (155 SCRA 283 [1987]) regarding the one-
company-one union concept.

4. ID.; ID.; ID.; CERTIFICATION ELECTION; RESULTS THEREOF CONFINED ONLY TO THE GROUP IT REPRESENTS; CBA
ENTERED DOES NOT BAR HOLDING OF ANOTHER CERTIFICATION ELECTION FOR THE OTHER GROUP; CASE AT BAR.
Considering that (a) the TUPAS solicited certification election was strictly confined to the rank-and-file employees
who are paid on a daily or piece-rate basis, (b) the results of the election must also necessarily confine the certified
unions representation to the group it represents and (c) the issue of the plight of the monthly-paid employees was
still pending, KNITJOY and CFW clearly acted with palpable bad faith and malice in including within the scope of the
new CBA these monthly-paid employees. Thus was effected a conspiracy to defeat and suppress the right of the
KMEU and its members to bargain collectively and negotiate for themselves, to impose upon the latter a contract
the negotiation for which they were not even given notice of, consulted or allowed to participate in, and to oust
from the BLR the pending appeal on the certification issue. In the latter case, KNITJOY and CFW are guilty of
contumacious conduct. It goes without saying then that the new CBA cannot validly include in its scope or coverage
the monthly-paid rank-and-file employees of KNITJOY. It does not bar the holding of a certification election to
determine their sole bargaining agent, and the negotiation for and the execution of a subsequent CBA between
KNITJOY and the eventual winner in said election (Section 4, Rule V, Book V of the Rules Implementing the Labor
Code).


D E C I S I O N


DAVIDE, JR., J.:


These petitions have a common origin and raise identical issues. They were ordered consolidated on 23 November
1988.

In G.R. No. 81883, the 1 December 1987 Decision of respondent Director of the Bureau of Labor Relations in BLR
Case No. A-10-315-87, which reversed the Order of Med-Arbiter-Designate Rolando S. dela Cruz dated 4 September
1987 and ordered the holding of a certification election among the regular rank-and-file monthly-paid employees of
Knitjoy Manufacturing, Inc. (KNITJOY), is assailed by the latter.

The Med-Arbiters order dismissed the petition of private respondent Knitjoy Monthly Employees Union (KMEU) for
such certification election and directed the parties "to work out (sic) towards the formation of a single union in the
company."cralaw virtua1aw library

The antecedent material operative facts in these petitions are as follows:chanrob1es virtual 1aw library

Petitioner KNITJOY had a collective bargaining agreement (CBA) with the Federation of Filipino Workers (FFW). The
bargaining unit covered only the regular rank-and-file employees of KNITJOY paid on a daily or piece-rate basis. It did
not include regular rank-and-file office and production employees paid on a monthly basis. The CBA expired on 15
June 1987. Prior to its expiration, the FFW was split into two (2) factions the Johnny Tan and the Aranzamendez
factions. The latter eventually became the Confederation of Filipino Workers (CFW), herein petitioner in G.R. No.
82111.

Also prior to the expiration of the CBA, the Trade Union of the Philippines and Allied Services (TUPAS) filed a petition
for the holding of a certification election among KNITJOYs regular rank-and-file employees paid on a daily and piece-
rate basis. Excluded were the regular rank-and-file employees paid on a monthly basis. In the certification election
conducted on 10 June 1987, CFW emerged as the winner; thereafter, negotiations for a new CBA between CFW and
KNITJOY commenced.chanroblesvirtualawlibrary

On 24 June 1987, during the pendency of the said negotiations, private respondent KMEU filed a petition for
certification election among KNITJOYs regular rank-and-file monthly-paid employees with Regional Office No. IV of
the Department of Labor and Employment (DOLE) which docketed the same as R-04-OD-M-6-75-87. The Knitjoy
Monthly Employees Association and Confederation of Citizens Labor Union (KMEA-CCLU), another union existing in
the said company, and petitioner CFW intervened therein.

The petition was dismissed in the Order of 4 September 1987 of Med-Arbiter Rolando S. de la Cruz, the dispositive
portion of which reads:jgc:chanrobles.com.ph

"WHEREFORE, premises considered, the petition is hereby Dismissed, but the parties are instructed to work out (sic)
towards the formation of a single union in the company." 1

KMEU filed a motion to reconsider this order, which was treated as an appeal by the Bureau of Labor Relations
(BLR).

On 1 December 1987, public respondent Pura Ferrer-Calleja. Director of the BLR, handed down a Decision 2
reversing the order of Med-Arbiter de la Cruz. The dispositive portion of the Decision reads:jgc:chanrobles.com.ph

"WHEREFORE, premises considered, the Appeal of Knitjoy Monthly Employees is hereby granted subject to the
exclusion of the monthly paid employees who are deemed managerial.

Let, therefore, the certification election proceed without delay, with the following as choices:chanrob1es virtual 1aw
library

1. Knitjoy Monthly Employees Union (KMEU); and

2. No Union.

The companys latest payroll shall be the basis in determining the list of eligible voters.

SO ORDERED."cralaw virtua1aw library

Respondent Director brushed aside KNITJOYs arguments that the monthly-paid employees have the same working
incentives as their counterparts, the daily-paid workers; that the existing collective bargaining agent (CFW) is willing
to include the monthly-paid employees, and that out of the 212 monthly-paid employees, 116 qualify as managerial
employees while the rest who are holding confidential or technical positions should likewise be excluded. In finding
for KMEU, said Director declared that:jgc:chanrobles.com.ph

"As pointed out by the Supreme Court in the similar case of General Rubber and Footwear Corporation v. Bureau of
Labor Relations, Et Al., G.R. No. 74262, it is perhaps unusual for management to have to deal with two (2) collective
bargaining unions but there is no one to blame except management for creating the situation it is in. From the
beginning of the existence of the CBA, management had sought to indiscriminately suppress the members of the
petitioners right (sic) to self-organization. Respondents argument that the incumbent collective bargaining agent is
willing to accommodate herein petitioner is of no moment since the option now rests upon the petitioner as to
whether or not they desire to join the existing collective bargaining agent or remain as separate (sic) union." 3

KNITJOY and CFW separately moved to reconsider the said decision alleging, as principal underpinning therefor, the
conclusion and signing between them, allegedly on 27 November 1987 before the rendition of the challenged
decision of a CBA which includes in its coverage the monthly-paid rank-and-file employees. It is averred that said
CBA has rendered the case moot and academic; moreover, to remove the monthly-paid employees from their
present bargaining unit would lead to the fragmentation thereof, contrary to existing labor policies favoring larger
units.chanrobles virtual lawlibrary

In her Decision of 8 February 1988, respondent Director denied for lack of merit the motion for reconsideration on
the principal ground that although the monthly-paid rank-and-file employees were allegedly included within the
scope of the new CBA, they are not barred from forming a separate bargaining unit considering that: (a) since the
petition for certification election was filed as early as 24 June 1987, there already existed a pending. representation
issue when KNITJOY and CFW commenced negotiations for a new CBA; nevertheless, KMEU was not brought into
the said negotiations and was therefore not a privy to the CBA; (b) members of KMEU did not participate in the
ratification of the CBA; contrary to KNITJOY s claim that the same was unanimously ratified by the members of the
bargaining unit, the CBA failed to mention even one monthly-paid employee who participated in the ratification
process, and (c) while it is true that the policy of the DOLE is to favor a one company-one union scenario which finds
basis in Section 2, Rule V, Book V of the Rules Implementing the Labor Code, there are, nonetheless, some
exceptions thereto, as where the bargaining history requires the formation of another bargaining unit. Besides, such
a policy must yield to an employees Constitutional right to form unions which includes the freedom to join a union
of ones choice. 4

The new CBA, which KMEU claims to have been signed on 12 December 1987, and not on 27 November 1987 as
both KNITJOY and CFW boldly assert, defines the bargaining unit covered as follows:jgc:chanrobles.com.ph

"SECTION 2. The bargaining unit covered by this Agreement consists of all regular and permanent rank-and-file
employees of the COMPANY employed in its production plants and paid on a daily or piece-rate basis and regular,
rank-and-file monthly paid office employees, excluding managerial, supervisory, casual, temporary and probationary
employees, and security guards." 5

Unfazed by their defeat before the BLR, KNITJOY and CFW separately filed the instant petitions. The former imputes
upon respondent Director grave abuse of discretion in holding that (a) the scope of the bargaining unit agreed upon
in the new CBA does not bind KMEU because it is not a party thereto, (b) the acceptance by all the members of
KMEU of all benefits of the CBA did not constitute an overt act of ratification and (c) the CBA was concluded on 12
December 1987 and not on 27 November 1987. It further contends that respondent Director contumaciously
violated the one company-one union policy of the Labor Code and disregarded the ruling of this Court in Bulletin
Publishing Corp. v. Hon. Sanchez, 6 reiterated in part in General Rubber and Footwear Corp. v. Bureau of Labor
Relations. 7 Upon the other hand, CFW contends that respondent Director committed grave abuse of discretion in
(a) allowing the creation of a unit separate from the existing bargaining unit defined in the new CBA thus abetting
the proliferation of unions, (b) disregarding the CBA provisions which consider the CFW as the sole and exclusive
bargaining agent of all rank-and-file employees and (c) excluding CFW from the choices of unions to be voted upon.
8

On 24 August 1988, 9 this Court gave due course to the petition in G.R. No. 81883 after both the public and private
respondents filed their separate comments and the petitioner filed its consolidated reply thereto. 10

On 23 November 1988, G.R. No. 82111 was consolidated with G.R. No. 81883 and the petitioner in the former was
ordered to file a consolidated reply to the separate comments of both respondents. 11

The principal issues raised in these petitions are:chanrob1es virtual 1aw library

1. Whether or not petitioner KNITJOYs monthly-paid regular rank-and-file employees can constitute an appropriate
bargaining unit separate and distinct from the existing unit composed of daily or piece-rate paid regular rank-and-
file employees, and

2. Whether or not the inclusion in the coverage of the new CBA between KNITJOY and CFW of the monthly-paid
rank-and-file employees bars the holding of a certification election among the said monthly paid employees.

We decide for the respondents.

1. The suggested bias of the Labor Code in favor of the one company-one union policy, anchored on the greater
mutual benefits which the parties could derive, especially in the case of employees whose bargaining strength could
undeniably be enhanced by their unity and solidarity but diminished by their disunity, division and dissension, is not
without exceptions.

The present Article 245 of the Labor Code expressly allows supervisory employees who are not performing
managerial functions to join, assist or form their separate union but bars them from membership in a labor
organization of the rank-and-file employees. It reads:jgc:chanrobles.com.ph

"ARTICLE 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees.
Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not
be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form
separate labor organizations of their own."cralaw virtua1aw library

This provision obviously allows more than one union in a company.

Even Section 2(c), Rule V, Book V of the Implementing Rules and Regulations of the Labor Code, which seeks to
implement the policy, also recognizes exceptions. It reads:chanrobles virtual lawlibrary

"SECTION 2. Who may file. Any legitimate labor organization or the employer, when requested to bargain
collectively, may file the petition.

The petition, when filed by a legitimate labor organization shall contain, among others:chanrob1es virtual 1aw
library
x x x


(c) description of the bargaining unit which shall be the employer unit unless circumstances otherwise require; . . . ."
(Emphasis supplied)

The usual exception, of course, is where the employer unit has to give way to the other units like the craft unit, plant
unit, or a subdivision thereof, the recognition of these exceptions takes into account the policy to assure employees
of the fullest freedom in exercising their rights. 12 Otherwise stated, the one company-one union policy must yield
to the right of the employees to form unions or associations for purposes not contrary to law, to self-organization
and to enter into collective bargaining negotiations, among others, which the Constitution guarantees. 13

The right to form a union or association or to self-organization comprehends two (2) broad notions, to wit: (a) the
liberty or freedom, i.e., the absence of restraint which guarantees that the employee may act for himself without
being prevented by law, and (b) the power, by virtue of which an employee may, as he pleases, join or refrain from
joining an association. In Victoriano v. Elizalde Rope Workers Union, 14 this Court stated:jgc:chanrobles.com.ph

". . . Notwithstanding the different theories propounded by the different schools of jurisprudence regarding the
nature and contents of a right, it can be safely said that whatever theory one subscribes to, a right comprehends at
least two broad notions, namely: first, liberty or freedom, i.e., the absence of legal restraint, whereby an employee
may act for himself without being prevented by law; and second, power, whereby an employee may, as he pleases,
join or refrain from joining an association. It is, therefore, the employee who should decide for himself whether he
should join or not an association, and should he choose to join, he himself makes up his mind as to which association
he would join; and even after he has joined, he still retains the liberty and the power to leave and cancel his
membership with said organization at any time [Pagkakaisa Samahang Manggagawa ng San Miguel Brewery v.
Enriquez, Et Al., 108 Phil., 1010, 1019]. It is clear, therefore, that the right to join a union includes the right to abstain
from joining any union [Abo, Et. Al. v. PHILAME (KG) Employees Union, Et Al., L-19912, January 30, 1965, 13 SCRA
120, 123, quoting Rothenberg, Labor Relations]. Inasmuch as what both the Constitution and the Industrial Peace
Act have recognized, and guaranteed to the employee, is the right to join associations of his choice, it would be
absurd to say that the law also imposes, in the same breath, upon the employee the duty to join associations. The
law does not enjoin an employee to sign up with any association."cralaw virtua1aw library

Furthermore, it is not denied that in the bargaining history of KNITJOY, the CBA has been consistently limited to the
regular rank-and-file employees paid on a daily or piece-rate basis. On the other hand, the rank-and-file employees
paid on a monthly basis were never included within its scope. Respondent KMEUs membership is limited to the
latter class of employees, KMEU does not seek to dislodge CFW as the exclusive bargaining representative for the
former. The records further disclose that in the certification solicited by TUPAS and during the elections which
followed thereafter, resulting in the certification of CFW as the exclusive bargaining representative, the monthly-
paid employees were expressly excluded. Thus, the negotiations between CFW and KNITJOY following such a
certification could only logically refer to the rank-and-file employees paid on a daily or piece-rate basis. Clearly
therefore, KNITJOY and CFW recognize that insofar as the monthly-paid employees are concerned, the latters
constituting a separate bargaining unit with the appropriate union as sole bargaining representative, can neither be
prevented nor avoided without infringing on these employees rights to form a union and to enter into collective
bargaining negotiations. Stated differently, KNITJOY and CFW recognize the fact that the existing bargaining unit in
the former is not and has never been the employer unit. Given this historical and factual setting, KMEU had the
unquestioned and undisputed right to seek certification as the exclusive bargaining representative for the monthly-
paid rank-and-file employees; both KNITJOY and CFW cannot block the same on the basis of this Courts declaration
in Bulletin Publishing Corp. v. Hon. Sanchez 15 and General Rubber and Footwear Corp. v. Bureau of Labor Relations
16 regarding the one company-one union concept. Petitioners have obviously misread these cases. In the first, We
stated that" [t]he crux of the dispute . . . is whether or not supervisors in petitioner company therein may, for
purposes of collective bargaining, form a union separate and distinct from the existing union organized by the rank-
and-file employees of the same company," 17 and ruled that the members of the Bulletin Supervisory Union, wholly
composed of supervisors, are not qualified to form a union of their own under the law and rules then existing,
considering that" [a] perusal of the job descriptions corresponding to the private respondents as outlined in the
petition, clearly reveals the private respondents to be managers, purchasing officers, personnel officers, property
officers, supervisors, cashiers, heads of various sections and the like. The nature of their duties gives rise to the
irresistible conclusion that most of the herein private respondents are performing managerial functions;" 18 hence,
under Article 246 19 of the Labor Code, they cannot form, join and assist labor organizations. It should be stressed
that the statement therein that supervisors "who do not assume any managerial function may join or assist an
existing rank-and-file union or if none exists, to join or assist in the formation of such rank-and-file organization" 20
is no longer legally feasible under existing laws. As earlier noted, the present Article 245 of the Labor Code allows
supervisory employees who are not exercising managerial functions to join, assist or form separate labor
organizations of their own but prohibits them from joining a labor organization composed of the rank-and-file
employees.chanrobles lawlibrary : rednad

The second case on the other hand, demolishes the stand of KNITJOY and CFW for, as correctly contended by the
respondents, it in fact recognizes an exception to the one company-one union concept. Thus:jgc:chanrobles.com.ph

"Perhaps it is unusual for the petitioner to have to deal with two (2) collective bargaining unions but there is no one
to blame except petitioner itself for creating the situation it is in. From the beginning of the existence in 1963 of a
bargaining unit for the employees up to the present, petitioner had sought to indiscriminately suppress the
members of the private respondents right (sic) to self-organization provided for by law. Petitioner, in justification of
its action, maintained that the exclusion of the members of the private respondent from the bargaining union of the
rank-and-file or from forming their own union was agreed upon by petitioner corporation with the previous
bargaining representatives . . . Such posture has no leg to stand on. It has not been shown that private respondent
was privy to this agreement. And even if it were so, it can never bind subsequent federations and unions particularly
private respondent-union because it is a curtailment of the right to self-organization guaranteed by the labor laws.
However, to prevent any difficulty and to avoid confusion to all concerned and, more importantly, to fulfill the policy
of the New Labor Code as well as to be consistent with Our ruling in the Bulletin case, supra, the monthly-paid rank-
and-file employees should be allowed to join the union of the daily-paid-rank-and-file employees of petitioner so
that they can also avail of the CBA benefits or to form their own rank-and-file union, without prejudice to the
certification election that has been ordered." 21 (Emphasis supplied)

2. Regardless of the date when the new CBA was executed - whether on 27 November 1987 as contended by
KNITJOY and CFW or 12 December 1967 as claimed by the respondents the fact remains that it was executed
before the resolution of KMEUs petition for certification election among the monthly paid employees became final.
This Court, however, sustains the respondents claim for indeed if it was executed by the parties on 27 November
1987, both KNITJOY and CFW would have immediately filed the appropriate pleading with the BLR informing it of
such execution and moving for the dismissal of the appeal on the ground that it has been rendered moot and
academic. Moreover, public respondents finding on this point is supported by substantial evidence,
thus:jgc:chanrobles.com.ph

"The parties could not have signed the said CBA on 27 November 1987, contrary to their allegation, because from
4:00 - 10:00 p.m. on the same day, 27 November 1987, the parties still attended a conciliation conference before
Assistant Director Maximo L. Lim of the NCR (see Annex "F" of respondents Supplemental Motion for
Reconsideration) and agreed in principle on nine (9) items or provisions to be included in said CBA. Said minutes do
not state that these nine items are the remaining unresolved issues in the negotiation of the CBA." 22 It was only in
their motion for the reconsideration of public respondents decision of 1 December 1987 that the existence of the
new CBA was made known.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

Considering that (a) the TUPAS solicited certification election was strictly confined to the rank-and-file employees
who are paid on a daily or piece-rate basis, (b) the results of the election must also necessarily confine the certified
unions representation to the group it represents and (c) the issue of the plight of the monthly-paid employees was
still pending, KNITJOY and CFW clearly acted with palpable bad faith and malice in including within the scope of the
new CBA these monthly-paid employees. Thus was effected a conspiracy to defeat and suppress the right of the
KMEU and its members to bargain collectively and negotiate for themselves, to impose upon the latter a contract
the negotiation for which they were not even given notice of, consulted or allowed to participate in, and to oust
from the BLR the pending appeal on the certification issue. In the latter case, KNITJOY and CFW are guilty of
contumacious conduct. It goes without saying then that the new CBA cannot validly include in its scope or coverage
the monthly-paid rank-and-file employees of KNITJOY. It does not bar the holding of a certification election to
determine their sole bargaining agent, and the negotiation for and the execution of a subsequent CBA between
KNITJOY and the eventual winner in said election. Section 4, Rule V, Book V of the Rules Implementing the Labor
Code expressly provides:jgc:chanrobles.com.ph

"SECTION 4. Effects of early agreements. The representation case shall not, however, be adversely affected by a
collective bargaining agreement registered before or during the last 60 days of a subsisting agreement or during the
pendency of the representation case." (Emphasis supplied)

The public respondent then committed no abuse of discretion ordering a certification election among the monthly-
paid rank-and-file employees, except managerial employees, of KNITJOY. The choice however, should not be, as
correctly contended by CFW, limited to merely (a) KMEU and (b) no union. The records disclose that the intervenors
in the petition for certification are the KMEA-CCLU and CFW. They should be included as among the choices in the
certification election.cralawnad

WHEREFORE, the instant petitions are DISMISSED. However, the challenged decision of public respondent of 1
December 1987 is modified to include in the choices for the certification election petitioner Confederation of Filipino
Workers (CFW) and the Knitjoy Monthly Employees Association and Confederation of Citizens Labor Unions (KMEU-
CCLU).

Costs against petitioners.

SO ORDERED.

#19 G.R. Nos. 113204-05 September 16, 1996
BARBIZON PHILIPPINES, INC., petitioner,
vs.
NAGKAKAISANG SUPERVISOR NG BARBIZON PHILIPPINES, INC. NAFLU AND THE HON. UNDERSECRETARY OF
LABOR BIENVENIDO E. LAGUESMA, respondents.

KAPUNAN, J.:
This is a petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court to set aside and annul the
decision and orders of the public respondent dated 11 February 1993, 4 March 1993, 16 June 1993 and 25
November 1993, respectively.
The facts which gave rise to the present petition are as follows:
On 27 June 1988, petitioner (formerly the Philippine Lingerie Corporation) filed a petition for certification election
among its rank-and-file employees (docketed as NCR-OD-M-6-349-88). As a consequence thereof, two (2) unions
sought recognition, namely: PHILIPPINE LINGERIE WORKERS UNION-ALAB and BUKLOD NG MANGGAGAWA NG
PHILIPPINE LINGERIE CORPORATION.
In one of the pre-election conferences, PHILIPPINE LINGERIE WORKERS UNION-ALAB moved for the exclusion of a
number of employees who were allegedly holding supervisory positions.
Only 28 July 1988, Med-Arbiter Rasidali C. Abdullah issued an order denying the motion of PHILIPPINE LINGERIE
CORPORATION WORKERS UNION-ALAB for lack of merit. Said order was appealed to the Bureau of Labor Relations
(BLR) which issued an Order on 16 November 1988, the dispositive portion of which declares:
WHEREFORE, premises considered, the Order dated 28 July 1988 is hereby affirmed. Accordingly, to ensure fairness
to all the parties and in order to hasten the proceedings, let the election be conducted under the supervision of the
Labor Organization Division, this Office, which is hereby directed to immediately set this case for pre-election
conference.
SO ORDERED.
1

PHILIPPINE LINGERIE WORKERS UNION-ALAB filed two (2) separate motions for reconsideration of the above order
which were consolidated and treated in an Order dated 22 December 1988, the decretal portion of which reads:
WHEREFORE, premises considered, the twin motions for reconsideration are hereby deemed denied for lack of
merit. Accordingly, let the pre-election conference preparatory to the certification election proceed without further
delay.
No further motion of similar nature shall be hereafter entertained.
SO ORDERED.
2

No further appeal of the above-quoted order was interposed, thus it became final and executory.
On 3 May 1989, a certification election was conducted with the votes of "supervisors and confidential" employees
being challenged. Thus, the certification election showed the following results:
1. Philippine Lingerie Workers Union-ALAB 318 votes
2. Buklod Ng Manggagawa Ng Philippine
Lingerie Corporation 412 votes
3 No Union 17 votes
4. Challenged Supervisors/Confidential
Employees 99 votes

TOTAL VALID VOTES CAST 855 votes
SPOILED BALLOTS 12 votes
PHILIPPINE LINGERIE WORKERS UNION-ALAB filed an election protest which was later formalized on 25 May 1989. In
the meantime, on 9 May 1989, BUKLOD moved for the opening of the challenged ballots.
On 20 July 1989, the BLR, through its director Pura Ferrer-Calleja, issued an Order, the dispositive portion of which
reads:
WHEREFORE, premises considered, the protest and challenged (sic) of the Alyansang Likha Ng Mga Anak Ng Bayan
(ALAB) are hereby denied for lack of merit.
Accordingly, let the challenged votes of the supervisors and confidential employees be opened in the presence of
the parties under the supervision of the Labor Organization Division (LOD) on 26 July 1989 at 9:00 A.M., Bureau of
Labor Relations.
SO ORDERED.
3

With the above-quoted order, the challenged votes were opened on 3 August 1989 and the results were as follows:
Philippine Lingerie Workers Union-ALAB 4 votes
Buklod Ng Manggagawa Ng Phil. Lingerie
Corp. 84 votes
No Union 6 votes
Spoiled 5 votes
TOTAL VOTES CAST 99 votes
PHILIPPINE LINGERIE WORKERS UNION-ALAB filed a motion for reconsideration of the BLR's Order of 20 July 1989
which, however, was denied in an Order dated 22 August 1989, the pertinent portion of which states:
xxx xxx xxx
This time movant should now be convinced that the alleged supervisory and confidential employees are more rank-
and-file employees.
As early as Resolution dated 16 November 1988, the Bureau had already ruled that the alleged supervisors are not
managerial employees (rec. p. 154, First Folder). On motion for reconsideration the Bureau affirmed the
aforementioned Resolution in its Order dated 22 December 1988 (rec. p. 302. First Folder). And on 20 July 1989,
when R.A. 6715 was already in full force and effect, the Bureau in resolving the protest of ALAB declared that the job
descriptions of the alleged supervisors and confidential employees do not in any way suggest that they are indeed
supervisors or managerial employees (rec. p. 39, Second Folder).
xxx xxx xxx
WHEREFORE, the motion for reconsideration is hereby denied and the Buklod Ng Manggagawa Ng Philippine
Lingerie Corporation (now, Barbizon Philippines, Inc.) is hereby certified as the sole and exclusive bargaining
representative of all the regular rank-and-file employees of Barbizon Philippines, Inc. (formerly Philippine Lingerie
Corporation).
The management of Barbizon Philippines, Inc. is hereby directed to immediately start negotiating for a collective
bargaining agreement (CBA) with the said union.
No further motion of any nature shall hereinafter be entertained by this Office.
SO ORDERED.
4

Not satisfied with the aforequoted order, PHILIPPINE LINGERIE WORKERS UNION-ALAB appealed to the Secretary of
Labor but on 26 September 1989, the same was withdrawn and a motion to dismiss appeal with prejudice was filed
by the same union. There being no more obstacle to collective bargaining, petitioner negotiated with BUKLOD as the
sole and exclusive bargaining representative.
A Collective Bargaining Agreement (CBA) was signed by petitioner and BUKLOD which was effective for five (5) years
or until 18 November 1994.
5

While the CBA was still in force, several employees organized themselves into the Nagkakaisang Supervisors Ng
Barbizon Philippines, Inc. (NSBPI) and the 0Nagkakaisang Excluded Monthly Paid Employees Ng Barbizon,
Philippines, Inc. (NEMPEBPI) allegedly because they were excluded from the coverage of the existing CBA between
petitioner and BUKLOD.
Two (2) separate petitions for certification election were filed by NSBPI and NEMPEBPI. The petition of the former
was raffled to Med-Arbiter Renato D. Parungo and the latter to Med-Arbiter Paterno D. Adap. Both cases were
dismissed
6

NSBPI appealed to the Office of the Secretary of Labor. On 29 December 1992, public respondent Undersecretary
Bienvenido Laguesma denied the same for lack of merit. NSBPI moved for reconsideration on 15 January 1993.
On 11 February 1993, the Office of the Secretary of Labor, through public respondent rendered the questioned
Decision, the dispositive portion of which reads:
WHEREFORE the Motion for Reconsideration of Nagkakaisang Superbisor ng Barbizon Philippines, Inc. (NSBPI) and
the appeal of Nagkakaisang Excluded Monthly Paid Employees ng Barbizon Philippines, Inc. (NEMPEBPI) are hereby
granted and the Orders of this Office and the Med-Arbiter dated 29 December 1992 and 01 September 1992,
respectively, are hereby SET ASIDE.
Accordingly, a new Order is hereby entered in the above-captioned cases directing the conduct of certification
election among the subject employees excluded from the coverage of the bargaining unit of the existing CBA of rank
and file employees aforestated, not otherwise excluded/disqualified by law. The choices are as follows:
1. Nagkakaisang Superbisor ng Barbizon Philippines, Inc. (NSBPI)
2. Nagkakaisang Excluded Monthly Paid Employees ng Barbizon Philippines, Inc. (NEMPEBPI); and,
3. No Union.
Let, therefore, the entire records of these consolidated cases be forwarded to the Regional Office of origin for the
immediate conduct of certification election, subject to the usual pre-election conference.
SO ORDERED.
7

Petitioner filed a motion for reconsideration but the same was denied
8
A second motion for reconsideration was
filed by petitioner but it was likewise denied, this time, with finality.
9
Undaunted, petitioner filed a third motion for
reconsideration which was also denied for lack of merit.
10

Hence, this petition wherein the following issues were raised:
A
THE RESPONDENT "SUPERVISORS" LOCAL UNION CANNOT FORM A SUPERVISORS UNION, WHEN THEIR MEMBERS
ARE INCOMPATIBLY "RANK-AND-FILE EMPLOYEES"; MUCH LESS, CAN IT SEEK REPRESENTATION STATUS FOR
SUPERVISORS, WHEN THE EMPLOYEES THEY WANT TO REPRESENT FOR COLLECTIVE BARGAINING PURPOSES
BELONG IN THE "APPROPRIATE BARGAINING UNIT" OF RANK-AND-FILE EMPLOYEES ON THE "EMPLOYER WIDE
UNIT", WHICH ALREADY HAS A CERTIFIED BARGAINING AGENT: BUKLOD NG MANGGAGAWA NG PHILIPPINE
LINGERIE CORPORATION.
B
WORSE, SINCE THE MEMBERS OF THE RESPONDENT LOCAL UNION BELONG TO THE APPROPRIATE BARGAINING
UNIT OF RANK-AND-FILE EMPLOYEES, THE EXISTING COLLECTIVE BARGAINING AGREEMENT WHICH COVERS THEM,
IS (A) "BAR" TO ITS CERTIFICATION ELECTION PETITION
11

Barbizon Philippines, Inc. alleges that this petition only assails the resolution of the public respondent regarding
NSBPI and does not include the NEMPEBPI, the union of the excluded monthly paid employees because the separate
motion for reconsideration it filed in connection with the latter has not yet been resolved by the NLRC.
On 8 February 1994, this Court issued a temporary restraining order, enjoining the Bureau of Labor Relations from
setting the pre-election conference in Case No. OS-MA-A-215-92-93 entitled "In Re: Petition for Certification Election
among the Supervisory Employees of Barbizon Philippines, Inc., Nagkakaisang Supervisor Ng Barbizon Philippines,
Inc. OBRERO" and from conducting further proceedings in the aforesaid cases.
12

During the pendency of the petition, the CBA expired. However, no other agreement between the parties was made
known to this Court, thus, in accordance with Article XX of the CBA, it continues to be in force and shall govern the
relations between the parties thereto.
13

We find no merit in the petition.
Petitioner maintains its stance that the petition for certification election filed by the Nagkakaisang Supervisor ng
Barbizon Philippines, Inc. NAFLU (NSBPI) must necessarily fail because the employees designated as "supervisors"
cannot legally form a supervisors' union by virtue of the BLR's final decision dated 22 August 1989 declaring the
abovementioned employees mere rank and file workers. Being part of the rank and file, petitioner avers that said
employees belong to the "employer wide unit," which is the appropriate bargaining unit of all its rank and file
employees and which is represented by the Buklod ng Manggagawa ng Philippine Lingerie Corporation (BUKLOD) as
the sole certified bargaining agent.
Petitioner further asserts that the Undersecretary of Labor committed grave abuse of discretion in granting NSBPI's
petition for certification election as this was tantamount to an unjustifiable reversal of the BLR's final ruling that the
subject employees are not supervisory employees, but merely rank and file, due to the nature of their duties and
functions.
Petitioner's reasoning is flawed, proceeding as it does from the wrong premise. Petitioner obstinately believes that
NSBPI's petition for certification election was granted because the employees carrying the appellation "supervisor"
were deemed supervisory employees. The status of the subject employees, however, is not the issue in the case at
bar. Their status as "supervisors" is not in dispute. The aforestated decision of the BLR dated 22 August 1989 has
settled with finality that said employees are merely rank and file and this fact has been accepted by the petitioning
union NSBPI.
14
NSBPI's petition for certification election was granted because the subject employees, including
petitioner's monthly paid employees, were expressly excluded from the bargaining unit and from the coverage of
the CBA executed between petitioner and BUKLOD, as clearly stated therein.
15
This is the real reason behind the
certification election in question. Unfortunately, this was not successfully debunked by petitioner, which chose to
focus, albeit erroneously, on the status of the subject employees.
The exclusion of petitioner's "supervisors" from the bargaining unit of the rank-and-file employees indiscriminately
curtailed the right to these employees to self-organization and representation for purposes of collective bargaining,
a right explicitly mandated by our labor laws
16
and "accorded the highest consideration."
17
In the recent case
of Golden Farms, Inc. v. Secretary of Labor,
18
we aptly declared:
In the case at bench, the evidence established that the monthly paid rank-and-file employees of petitioner primarily
perform administrative or clerical work. In contradistinction, the petitioner's daily paid rank-and-file employees
mainly work in the cultivation of bananas in the fields. It is crystal clear the monthly paid rank-and-file employees of
petitioner have very little in common with its daily paid rank-and file employees in terms of duties and obligations,
working conditions, salary rates, and skills. To be sure, the said monthly paid rank-and-file employees have even been
excluded from the bargaining unit of the daily paid rank-and-file employees. This dissimilarity of interests warrants
the formation of a separate and distinct bargaining unit for the monthly paid rank-and-file employees of the
petitioner. To rule otherwise would deny this distinct class of employees the right to self-organization for purposes of
collective bargaining. Without the shield of an organization, it will also expose them to the exploitations of
management. . . . (Emphasis ours)
In the case at bar, BUKLOD cannot successfully act as the bargaining agent of and duly represent petitioner's
"supervisor" employees since the latter were expressly excluded from the appropriate bargaining unit.
Petitioner's reliance on the case of Pagkakaisa ng mga Manggagawa sa Triumph Int'l.-United Lumber and General
Workers of the Phils. v. Ferrer-Calleja
19
is misplaced. The aforecited case upholds the "one union-one company"
policy, thus:
Once again, we enunciate that the proliferation of unions in an employer unit is discouraged as a matter of
policy unless compelling reasons exist which deny a certain and distinct class of employees the right to self-
organization for purpose of collective bargaining. (See General Rubber & Footwear Corporation v. Bureau of Labor
Relations, 155 SCRA 283 [1987].)
20
(Emphasis ours.)
As clearly indicated in the aforequoted decision, the "one union one company" rule is not without exception. The
exclusion of the subject employees from the rank-and-file bargaining unit and the CBA is indefinitely a "compelling
reason" for it completely deprived them of the chance to bargain collectively with petitioner and are thus left with
no recourse but to group themselves into a separate and distinct bargaining unit and form their own organization.
The rationale behind the exception to the aforementioned policy is further elucidated in Knitjoy Manufacturing,
Inc. v. Ferrer-Calleja:
21

1. The suggested bias of the Labor Code in favor of the one company-one union policy, anchored on the greater
mutual benefits which the parties could derive, especially in the case of employees whose bargaining strength could
undeniably be enhanced by their unity and solidarity but diminished by their disunity, division and dissension, is not
without exceptions.
xxx xxx xxx
The usual exception, of course, is where the employer unit has to give way to the other units like the craft unit, plant
unit, or a subdivision thereof; the recognition of these exceptions takes into accountant the policy to assure
employees of the fullest freedom in exercising their rights. Otherwise stated, the one company-one union policy
must yield to the right of the employees to form unions or associations for purposes not contrary to law, to self-
organization and to enter into collective bargaining negotiations, among others, which the Constitution guarantees.
(Emphasis ours.)
The receipt by petitioner's "supervisor" employees of certain benefits under the CBA between BUKLOD and
petitioner is not sufficient to deny the petition for certification election filed by the labor organization formed by the
excluded employees. It is not equivalent to and does not compensate for the denial of the right of the excluded
employees to self-organization and collective bargaining. We concur with the findings of the Undersecretary of
Labor, thus:
It is not disputed that the members of both petitioning unions NSBPI and NEMPEBPI are excluded from the coverage
of the existing CBA entered into between the respondent BPI and Buklod ng mga Manggagawa ng Barbizons
Philippines, Inc. (BUKLOD) (pp. 84-85, folder II, records). Thus, respondent BPI being privy to the said exclusion has
to accept the inescapable consequences of its act of depriving the excluded employees of their right to self-
organization for the purpose of collective bargaining. We find immaterial and irrelevant the allegation of hereby
respondent BPI to the effect that the benefit being enjoyed by the rank and file employees covered by the existing
CBA are extended/accorded to the excluded employees. Indeed, what is crucial and of paramount consideration is
the fact that the excluded rank and file employees are afforded the right to bargain collectively.
The Supreme Court in the cases of General Rubber and Footwear Corporation vs. Bureau of Labor Relations, et al.,
G.R. No. 74262, October 29, 1987; and Manila Bay Spinning Mills, J and P Coats, Manila Bay, Inc. vs. Hon. Pura
Ferrer-Calleja, G.R. No. 80910, August 1, 1988, ruled that the employees excluded from the coverage of the
CBA, who not being excluded by law, have the right to bargain collectively. Further, the Supreme Court aptly stated
that:
The allegation that some benefits under the existing CBA were extended to the monthly paid employees, even if true
will not preclude them from entering into a CBA of their own. Neither is the inconvenience that may befall petitioner
for having to administer two CBAs an excuse for depriving the monthly paid employees of their constitutionally
guaranteed right to collective bargaining. (Emphasis supplied.)
22

The petition for certification election cannot likewise be deterred by the "contract-bar rule,"
23
which finds no
application in the present case. The petitioning union NSBPI is not questioning the majority status of Buklod as the
incumbent bargaining agent of petitioner's rank and file employees. The petition for certification election is
addressed to a separate bargaining unit the excluded employees of petitioner. We agree with the ruling of the
Undersecretary of Labor, thus:
Certainly, one who has been instrumental in the denial of a right otherwise enjoyable by a rank and file, as in
membership in its appropriate bargaining unit, cannot now say that he ought to be included in the existing
bargaining unit of the rank and file just because that "rank and file" employee is now seeking representation for
himself as well as those who like him were specifically excluded from the coverage of the CBA. A rank and file
employee, irrespective of his job designation and in whatever form his wages are paid has the unbridled right to the
exercise of self-organization. This right cannot, like a chattel, be compromised in the bargaining table so as to
deprive him of the same in violation of the constitutional mandate. In this wise, the claim as to the applicability of
the contract bar doctrine could have not gained ground. A contract bar applies in a situation where the petition is
directed towards one and the same bargaining unit. This does not appear to be so in the case considering the built-
in-limitation in the CBA excluding the workers sought to be represented by herein petitioner from its coverage, albeit,
their being admittedly rank and file employees. On the same line of reasoning, neither would the substantial mutual
interest test hold. So too, is the claim against union turncoatism. In the latter case, the emergence thereof is
farfetched considering the defined boundaries of the bargaining units concerned. Let it be stressed, that the
certification election as ordered would only affect those rank and file employees who are excluded from the coverage
of the existing CBA. Those who are already represented in the existing collective bargaining agreement may rest
secured in the bargaining unit that considers them as members of its family.
24
(Emphasis ours.)
The right to self organization and collective bargaining is an integral part of the protection to labor provision
embodied in our Constitution, the essence of which is aptly expressed in Tropical Hut Employees' Union-CGW
v.Tropical Hut Food Market, Inc.:
25

All employees enjoy the right to self-organization and to form and join labor organizations of their own choosing for
the purpose of collective bargaining and to engage in concerted activities for their mutual aid or protection. This is a
fundamental right of labor that derives its existence from the Constitution. In interpreting the protection to labor
and social justice provisions of the Constitution and the labor laws or rules or regulations, we have always adopted
the liberal approach which favors the exercise of labor rights.
Finally, we take this opportunity to reiterate the standing rule that a certification election is the sole concern of the
workers, hence, an employer lacks the personality to dispute the same. In Golden Farms, Inc. v. Secretary of
Labor,
26
we held:
Finally, we note that it was petitioner company that filed the motion to dismiss the petition for election. The general
rule is that an employer has no standing to question a certification election since this is the sole concern of the
workers. Law and policy demand that employers take a strict, hands-off stance in certification elections. The
bargaining representative of employees should be chosen free from any extraneous influence of management. A
labor bargaining representative, to be effective, must owe its loyalty to the employees alone and to no other.
WHEREFORE, premises considered, the petition for certiorari is DISMISSED and the Temporary Restraining Order
issued on 8 February 1994 is hereby LIFTED.
SO ORDERED.
#20 G.R. No. 111262 September 19, 1996
SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, represented by its President RAYMUNDO HIPOLITO,
JR., petitioner,
vs.
HON. MA. NIEVES D. CONFESOR, Secretary of Labor, Dept. of Labor & Employment, SAN MIGUEL CORPORATION,
MAGNOLIA CORPORATION (Formerly, Magnolia Plant) and SAN MIGUEL FOODS, INC. (Formerly, B-Meg
Plant), respondents.

KAPUNAN, J.:
This is a petition for certiorari assailing the Order of the Secretary of Labor rendered on February 15, 1993 involving
a labor dispute at San Miguel Corporation.
The facts are as follows:
On June 28, 1990, petitioner-union San Miguel Corporation Employees Union PTGWO entered into a Collective
Bargaining Agreement (CBA) with private respondent San Miguel Corporation (SMC) to take effect upon the
expiration of the previous CBA or on June 30, 1989.
This CBA provided, among others, that:
ARTICLE XIV
DURATION OF AGREEMENT
Sec. 1. This Agreement 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 June 30, 1992.
Sec. 2. In accordance with Article 253-A of the Labor Code as amended, the term of this Agreement insofar as the
representation aspect is concerned, shall be for five (5) years from July 1, 1989 to June 30, 1994. Hence, the freedom
period for purposes of such representation shall be sixty (60) days prior to June 30, 1994.
Sec. 3. Sixty (60) days prior to June 30, 1992 either party may initiate negotiations of all provisions of this Agreement,
except insofar as the representation aspect is concerned. If no agreement is reached in such negotiations, this
Agreement shall nevertheless remain in force up to the time a subsequent agreement is reached by the parties.
1

In keeping with their vision and long term strategy for business expansion, SMC management informed its
employees in a letter dated August 13, 1991
2
that the company which was composed of four operating divisions
namely: (1) Beer, (2) Packaging, (3) Feeds and Livestocks, (4) Magnolia and Agri-business would undergo a
restructuring.
3

Effective October 1, 1991, Magnolia and Feeds and Livestock Division were spun-off and became two separate and
distinct corporations: Magnolia Corporation (Magnolia) and San Miguel Foods, Inc. (SMFI). Notwithstanding the spin-
offs, the CBA remained in force and effect.
After June 30, 1992, the CBA was renegotiated in accordance with the terms of the CBA and Article 253-A of the
Labor Code. Negotiations started sometime in July, 1992 with the two parties submitting their respective proposals
and counterproposals.
During the negotiations, the petitioner-union insisted that the bargaining unit of SMC should still include the
employees of the spun-off corporations: Magnolia and SMFI; and that the renegotiated terms of the CBA shall be
effective only for the remaining period of two years or until June 30, 1994.
SMC, on the other hand, contended that the members/employees who had moved to Magnolia and SMFI,
automatically ceased to be part of the bargaining unit at the SMC. Furthermore, the CBA should be effective for
three years in accordance with Art. 253-A of the Labor Code.
Unable to agree on these issues with respect to the bargaining unit and duration of the CBA, petitioner-union
declared a deadlock on September 29, 1990.
On October 2, 1992, a Notice of Strike was filed against SMC.
In order to avert a strike, SMC requested the National Conciliation and Mediation Board (NCMB) to conduct
preventive mediation. No settlement was arrived at despite several meetings held between the parties.
On November 3, 1992, a strike vote was conducted which resulted in a "yes vote" in favor of a strike.
On November 4, 1992, private respondents SMC, Magnolia and SMFI filed a petition with the Secretary of Labor
praying that the latter assume jurisdiction over the labor dispute in a vital industry.
As prayed for, the Secretary of Labor assumed jurisdiction over the labor dispute on November 10, 1992.
4
Several
conciliation meetings were held but still no agreement/settlement was arrived at by both parties.
After the parties submitted their respective position papers, the Secretary of Labor issued the assailed Order on
February 15, 1993 directing, among others, that the renegotiated terms of the CBA shall be effective for the period
of three (3) years from June 30, 1992; and that such CBA shall cover only the employees of SMC and not of Magnolia
and SMFI.
Dissatisfied, petitioner-union now comes to this Court questioning this Order of the Secretary of Labor.
Subsequently, on March 30, 1995,
5
petitioner-union filed a Motion for Issuance of a Temporary Restraining Order or
Writ of Preliminary Injunction to enjoin the holding of the certification elections in the different companies,
maintaining that the employees of Magnolia and SMFI fall within the bargaining unit of SMC.
On March 29, 1995, the Court issued a resolution granting the temporary restraining order prayed for.
6

Meanwhile, an urgent motion for leave to intervene
7
in the case was filed by the Samahan ng Malayang
Manggagawa-San Miguel Corporation-Federation of Free Workers (SMM-SMC-FFW) through its authorized
representative, Elmer S. Armando, alleging that it is one of the contending parties adversely affected by the
temporary restraining order.
The Intervenor cited the case of Daniel S.L. Borbon v. Hon. Bienvenido B. Laguesma,
8
G.R. No. 101766, March 5,
1993, where the Court recognized the separation of the employees of Magnolia from the SMC bargaining unit. It
then prayed for the lifting of the temporary restraining order.
Likewise, Efren Carreon, Acting President of the SMCEU-PTGWO, filed a petition for the withdrawal/dismissal of the
petition considering that the temporary restraining order jeopardized the employees' right to conclude a new CBA.
At the same time, he challenged the legal personality of Mr. Raymundo Hipolito, Jr. to represent the Union as its
president when the latter was already officially dismissed from the company on October 4, 1994.
Amidst all these pleadings, the following primordial issues arise:
1) Whether or not the duration of the renegotiated terms of the CBA is to be effective for three years of for only two
years; and
2) Whether or not the bargaining unit of SMC includes also the employees of the Magnolia and SMFI.
Petitioner-union contends that the duration for the non-representation provisions of the CBA should be
coterminous with the term of the bargaining agency which in effect shall be for the remaining two years of the
current CBA, citing a previous decision of the Secretary of Labor on December 14, 1992 in the matter of the labor
dispute at Philippine Refining Company.
However, the Secretary of Labor, in her questioned Order of February 15, 1993 ruled that the renegotiated terms of
the CBA at SMC should run for a period of three (3) years.
We agree with the Secretary of Labor.
Pertinent to the first issue is Art. 253-A of the Labor Code as amended which reads:
Art. 253-A. Terms of a Collective Bargaining Agreement. Any Collective Bargaining Agreement that the parties
may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition
questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election
shall be conducted by the Department of Labor and Employment outside of the sixty-day period immediately before
the date of expiry of such five year term of the Collective Bargaining Agreement. All other provisions of the Collective
Bargaining Agreement shall be renegotiated not later than three (3) years after its execution. Any agreement on
such other provisions of the Collective Bargaining Agreement entered into within six (6) months from the date of
expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement, shall retroact to the day
immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree
on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the collective bargaining
agreement, the parties may exercise their rights under this Code. (Emphasis supplied.)
Article 253-A is a new provision. This was incorporated by Section 21 of Republic Act No. 6715 (the Herrera-Veloso
Law) which took effect on March 21, 1989. This new provision states that the CBA has a term of five (5) years instead
of three years, before the amendment of the law as far as the representation aspect is concerned. All other
provisions of the CBA shall be negotiated not later than three (3) years after its execution. The "representation
aspect" refers to the identity and majority status of the union that negotiated the CBA as the exclusive bargaining
representative of the appropriate bargaining unit concerned. "All other provisions" simply refers to the rest of the
CBA, economic as well as non-economic provisions, except representation.
10

As the Secretary of Labor herself observed in the instant case, the law is clear and definite on the duration of the
CBA insofar as the representation aspect is concerned, but is quite ambiguous with the terms of the other provisions
of the CBA. It is a cardinal principle of statutory construction that the Court must ascertain the legislative intent for
the purpose of giving effect to any statute. The history of the times and state of the things existing 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.
11
We look into the discussions leading to the passage of the law:
THE CHAIRMAN (REP. VELASCO): . . .the CBA, insofar as the economic provisions are concerned. . .
THE CHAIRMAN (SEN. HERRERA): Maximum of three years?
THE CHAIRMAN (SEN. VELOSO): Maximum of three years.
THE CHAIRMAN (SEN. HERRERA): Present practice?
THE CHAIRMAN (REP. VELOSO): In other words, after three years pwede nang magnegotiate in the CBA for the
remaining two years.
THE CHAIRMAN (REP. HERRERA): You can negotiate for one year, two years or three years but assuming three years
which, I think, that's the likelihood. . .
THE CHAIRMAN (REP. VELOSO): Yes.
THE CHAIRMAN (SEN. HERRERA): Three years, the new union, assuming there will be a change of agent, at least he
has one year to administer and to adjust, to develop rapport with the management. Yan ang importante.
You know, for us na nagne-negotiate, ang hazard talaga sa negotiation, when we negotiate with somebody na hindi
natin kilala, then, we are governed by our biases na ito ay destroyer ng Labor; ang mga employer, ito bayaran ko
lang ito okay na.
'Yan ang nangyayari, but let us give that allowance for the one year to let them know.
Actually, ang thrust natin ay industrial peace, and there can be no industrial peace if you encourage union to fight
each other. 'Yan ang problema.
12

xxx xxx xxx
HON. ISIDRO: Madali iyan, kasi these two periods that are mentioned in the CBA seem to provide some doubts later
on in the implementation. Sabi kasi rito, insofar as representation issue is concerned, seven years and lifetime. . .
HON. CHAIRMAN HERRERA: Five years.
HON. ISIDRO: Five years, all the others three years.
HON. CHAIRMAN HERRERA: No. Ang three years duon sa terms and conditions, not later than three years.
HON. ISIDRO: Not later than three years, so within three years you have to make a new CBA.
HON. CHAIRMAN HERRERA: Yes.
HON. ISIDRO: That is again for purposes of renewing the terms, three years na naman iyan then, seven years. . .
HON. CHAIRMAN HERRERA: Not later than three years.
HON. ISIDRO: Assuming that they usually follow the period three years nang three years, but under this law with
respect to representation five years, ano? Now, after three years, nagkaroon ng bagong terms, tapos na iyong
term, renewed na iyong terms, ang karapatan noon sa representation issue mayroon pang two years left.
HON. CHAIRMAN HERRERA: One year na lang because six years nang lahat, three plus three.
HON. ISIDRO: Hindi, two years pa rin ang natitira, eh. Three years pa lang ang natatapos. So, another CBA was
formed and this CBA mayroon na naman siyang bagong five years with respect to representation issue.
HON. CHAIRMAN HERRERA: Hindi. Hindi na. Ganito iyan. Iyong terms and conditions for three years.
HON. ISIDRO: Yes.
HON. CHAIRMAN HERRERA: One the third year you can start negotiating to change the terms and conditions.
HON. ISIDRO: Yes.
HON. CHAIRMAN HERRERA: Assuming you will follow the practice . . .
HON. ISIDRO: Oo.
HON. CHAIRMAN HERRERA: But on the fifth year, ang representation status now can be questioned, so baka
puwedeng magkaroon ng certification election. If the incumbent union loses, then the new union administers the
contract for one year to give him time to know his counterpart the employer, before he can negotiate for a new
term. Iyan ang advantage.
HON. ISIDRO: Kasi, when the CBA has only a three-year lifetime with respect to the terms and conditions and then,
so you have to renew that in three years you renew for another three years, mayroon na naman another five
years iyong ano . . .
HON. ANIAG: Hindi, ang natitira duon sa representation two years na lang.
HON. CHAIRMAN HERRERA: Two years na lang sa representation.
HON. ANIAG: So that if they changed the union, iyong last year . . .
HON. CHAIRMAN HERRERA: Iyon lang, that you have to administer the contract. Then, voluntary arbitration na kayo
and then mayroon ka nang probisyon "retroact on the date of the expiry date". Pagnatalo ang incumbent unyon,
mag-aassume ang new union, administer the contract. As far as the term and condition, for one year, and that will
give him time and the employer to know each other.
HON. JABAR: Boy, let us be realistic. I think if a new union wins a certification election, it would not want to
administer a CBA which has not been negotiated by the union itself.
HON. CHAIRMAN HERRERA: 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-expire ang representation. Iyon ang nangyari. That is where you have the
gulo. Ganoon ang nangyari. So, ang nangyari diyan, pag-mayroon certification election, expire ang contract, ano ang
usual issue company union. I can you (sic) give you more what the incumbent union is giving. So ang mangyayari
diyan, pag-negotiate mo hardline na agad.
HON. CHAIRMAN VELOSO : Mon, for four years?
HON. ISIDRO: Ang tingin ko lang dito, iyong distinction between the terms and the representation aspect why do
we have to distinguish between three and five? What's wrong with having a uniform expiration period?
HON. CHAIRMAN HERRERA: Five years.
HON. ISIDRO: Puro three years.
HON. CHAIRMAN HERRERA: That is what we are trying to avoid because ang reality diyan, Mart, pagpasok mo sa
kumpanya, mag-ne-negotiate ka ng six months, that's the average, aabot pa minsan ng one year. Pagktapos ng
negotiation mo, signing kayo. There will be an allowed period of one year. Third year na, uumpisahan naman ang
organizations, papasok na ang ibang unyon because the reality in Trade Union committee, they organize, we
organize. So, actually, you have only industrial peace for one year, effective industrial peace. That is what we are
trying to change. Otherwise, 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. Ang 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.
HON. JABAR: Although there are unions which really get advances.
HON. CHAIRMAN HERRERA: Pag nag-survey tayo sa mga unyon, ganoon ang mangyayari. And I think our
responsibility here is to create a legal framework to promote industrial peace and to develop responsible and fair
labor movement.
HON. CHAIRMAN VELOSO: In other words, the longer the period of the effectivity . . .
xxx xxx xxx
HON CHAIRMAN VELOSO. (continuing) . . . in other words, the longer the period of effectivity of the CBA, the better
for industrial peace.
HON. CHAIRMAN HERRERA: representation status.
HON. CHAIRMAN VELOSO: Only on
HON. CHAIRMAN HERRERA: the representations.
HON. CHAIRMAN VELOSO: But on the economic issues.
HON. CHAIRMAN HERRERA: You have to review that. The parties will have to review that.
HON. CHAIRMAN VELOSO: At least on second year.
HON. CHAIRMAN HERRERA: Not later than 3 years, ang karamihan ng mga mag-negotiate when the companyis
(interrupted)
13

From the aforesaid discussions, the legislators were more inclined to have the period of effectivity for three (3) years
insofar as the economic as well as non-economic provisions are concerned, except representation.
Obviously, the framers of the law wanted to maintain industrial peace and stability by having both management and
labor work harmoniously together without any disturbance. Thus, no outside union can enter the establishment
within five (5) years and challenge the status of the incumbent union as the exclusive bargaining agent. Likewise, 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 CBA. The CBA is a contract between the parties and the parties
must respect the terms and conditions of the agreement.
14
Notably, the framers of the law did not give a fixed term
as to the effectivity of the terms and conditions of employment. It can be gleaned from their discussions that it was
left to the parties to fix the period.
In the instant case, it is not difficult to determine the period of effectivity for the non-representation provisions of
the CBA. Taking it from the history of their CBAs, SMC intended to have the terms of the CBA effective for three (3)
years reckoned from the expiration of the old or previous CBA which was on June 30, 1989, as it provides:
Sec. 1. This Agreement 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 June 30, 1992.
The argument that the PRC case is applicable is indeed misplaced. We quote with favor the Order of the Secretary of
Labor in the light of SMC's peculiar situation as compared with PRC's company situation.
It is true that in the Philippine Refining Company case (OS-AJ-0031-91) (sic), Labor Dispute at Philippine Refining
Company), we ruled that the term of the renegotiated provisions of the CBA should coincide with the remaining
term of the agency. In doing so, we placed premium on the fact that PRC has only two (2) unions and no other union
had yet executed a renewed term of 3 years. Nonetheless, 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 workers
and the company. It is equally true that once the economic provisions of the CBA expire, the residual representative
status of the union is effective for only 2 more years. However, if circumstances warrant that the contract duration
which it is soliciting from the company for the benefit of the workers, shall be a little bit longer than its lifespan, then
this Office 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 objective cannot be achieved without giving due consideration to the peculiarities
and unique characteristics of the employer. In the case at bar, there is no dispute that the mother corporation (SMC)
spun-off two of its divisions and thereby gave birth to two (2) other entities now known as Magnolia Corporation
and San Miguel Foods, Inc. In order to effect a smooth transition, the companies concerned continued to recognize
the existing unions as the bargaining agents of their respective bargaining units. In the meantime, the other unions
in these companies eventually concluded their CBA negotiations on the remaining term and all of them agreed on a
3-year cycle. Notably, the following CBAs were forged incorporating a term of 3-years on the renegotiated
provisions, to wit:
1. SMC daily-paid employees union (IBM)
2. SMFI monthly-paid employees and daily-paid employees at the Cabuyao Plant.
There is a direct link 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 3-year renegotiated cycle when
the economic provisions of the existing CBAs expired, i.e., the 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. Precisely, 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.
If 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 execute a 2-year renegotiated term for then chaos and confusion, rather than tranquillity, would be
the order of the day. Worse, there is a strong likelihood 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 3-year renegotiated terms.
If this happens, the purpose of this Office's intervention into the parties' controversy would have been defeated.
15

The issue as to the term of the non-representation provisions of the CBA need not belabored especially when we
take note of the Memorandum of the Secretary of Labor dated February 24, 1994 which was mentioned in the
Resolution of Undersecretary Bienvenido Laguesma on January 16, 1995 in the certification election case involving
the SMC employees.
16
In said memorandum, the Secretary of Labor had occasion to clarify the term of the
renegotiated terms of the CBA vis-a-vis the term of the bargaining agent, to wit:
As a matter of policy the parties are encourages (sic) to enter into a renegotiated CBA with a term which would
coincide (sic) with the aforesaid five (5) year term of the bargaining representative.
In the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a term of
three (3) years or one which does not coincide with the said 5-year term, and said agreement is ratified by majority
of the members in the bargaining unit, the subject 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 majority status of the
incumbent bargaining agent within sixty (60) days before the lapse of the original five (5) year term of the CBA.
Thus, we do not find any grave abuse of discretion on the part of the Secretary of Labor in ruling that the effectivity
of the renegotiated terms of the CBA shall be for three (3) years.
With respect to the second issue, there is, likewise, no merit in petitioner-union's assertion that the employees of
Magnolia and SMFI should still be considered part of the bargaining unit of SMC.
Magnolia and SMFI were spun-off to operate as distinct companies on October 1, 1991. Management saw the need
for these transformations in keeping with its vision and long term strategy as it explained in its letter addressed to
the employees dated August 13, 1991:
. . . As early as 1986, we announced the decentralization program and spoke 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 1987 Annual Report to Stockholders that San Miguel's businesses will be more autonomous and
self sufficient so as to better acquire and master new technologies, cope with a labor force with different expertises
and expectations, and master and satisfy the changing needs of our customers and end-consumers. As subsidiaries,
Magnolia and FLD will gain better industry focus and flexibility, greater awareness of operating results, and speedier,
more responsive decision making.
xxx xxx xxx
We only have to look at the experience of Coca-Cola Bottlers Philippines, Inc., since this company was organized
about ten years ago, to see the benefits that arise from restructuring a division of San Miguel into a more
competitive organization. As a stand-alone enterprise, CCBPI engineered a dramatic turnaround and has sustained
its sales and market share leadership ever since.
We are confident that history will repeat itself, and the transformation of Magnolia and FLD will be successful as
that of CCBPI.
17

Undeniably, the transformation of the companies was a management prerogative and business judgment which the
courts can not look into unless it is contrary to law, public policy or morals. Neither can we impute any bad faith on
the part of SMC so as to justify the application of the doctrine of piercing the corporate veil.
18
Ever mindful of the
employees' 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 existing
CBAs.
19
They were advised that upon the expiration of the CBAs, new agreements will be negotiated between the
management of the new corporations and the bargaining representatives of the employees concerned. As a result of
the spin-offs:
1. Each of the companies are run by, supervised and controlled by different management teams including separate
human resource/personnel managers.
2. Each Company enforces its own administrative and operational rules and policies and are not dependent on each
other in their operations.
3. Each entity maintains separate financial statements and are audited separately from each other.
20

Indubitably, therefore, Magnolia and SMFI became distinct entities with separate juridical personalities. Thus, they
can not belong to a single bargaining unit as held in the case of Diatagon Labor Federation Local 110 of the ULGWP
v. Ople.
21
We elucidate:
The fact that their businesses are related and that the 236 employees of the Georgia Pacific International
Corporation were originally employees of Lianga Bay Logging Co., Inc. is not a justification for disregarding their
separate personalities. Hence, the 236 employees, who are now attached to Georgia Pacific International
Corporation, should not be allowed to vote in the certification election at the Lianga Bay Logging Co., Inc. They
should vote at a separate certification election to determine the collective bargaining representative of the
employees of Georgia Pacific International Corporation.
Petition-union's attempt to include the employees of Magnolia and SMFI in the SMC bargaining unit so as to have a
bigger mass base of employees has, therefore, no more valid ground.
Moreover, 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 working conditions as evinced by the type of work they
performed.
22
Considering the spin-offs, the companies would consequently have their respective and distinctive
concerns in terms of the nature of work, wages, hours of work and other conditions of employment. Interests of
employees in the different companies perforce differ. SMC is engaged in the business of the beer manufacturing.
Magnolia is involved in the manufacturing and processing of diary products
23
while SMFI is involved in the
production of feeds and the processing of chicken.
24
The nature of their products and scales of business may require
different skills which must necessarily be commensurated by different compensation packages. The different
companies may have different volumes of work and different working conditions. For such reason, the employees of
the different companies see the need to group themselves together and organize themselves into distinctive and
different groups. It 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 working conditions.
We reiterate what we have explained in the case of University of the Philippines v. Ferrer-Calleja
25
that:
[T]here are various factors which must be satisfied and considered in determining the proper constituency of a
bargaining unit. No 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 factors? Rothenberg mentions a good number, but the most pertinent to our case are: (1) will of the
employees (Globe Doctrine); (2) affinity and unit of employees' interest, such as substantial similarity of work and
duties, or similarity of compensation and working conditions; (3) prior collective bargaining history; and (4)
employment status, such as temporary, seasonal and probationary employees. . . .
xxx xxx xxx
An enlightening appraisal of the problem of defining an appropriate bargaining unit is given in the 10th Annual
Report of the National Labor Relations Board wherein it is emphasized that the factors which said board may
consider and weigh in fixing appropriate units are: the history, extent and type of organization of employees; the
history of their collective bargaining; the history, extent and type of organization of employees in other plants of the
same employer, or other employers in the same industry; the skill, wages, work, and working conditions of the
employees; the desires of the employees; the eligibility of the employees for membership in the union or unions
involved; and the relationship between the unit or units proposed and the employer's organization, management,
and operation . . .
. . . In said report, it is likewise emphasized 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, working conditions and other subjects of collective bargaining (citing Smith on Labor Laws, 316-317;
Francisco, Labor Laws, 162). . .
Finally, we take note of the fact that the separate interests of the employees of Magnolia and SMFI from those of
SMC has been recognized in the case of Daniel Borbon v. Laguesma.
26
We quote:
Even assuming in gratia argumenti that at the time of the election they were regular employees of San Miguel,
nonetheless, these workers are no longer connected with San Miguel Corporation in any manner because Magnolia
has ceased to be a division of San Miguel Corporation and has been formed into a separate corporation with a
personality of its own (p. 305, 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 recourse (p. 319, Rollo).
In view of all the foregoing, we do not find any grave abuse of discretion on the part of the Secretary of Labor in
rendering the assailed Order.
WHEREFORE, the petition is DISMISSED for lack of merit. The Temporary Restraining Order issued on March 29, 1995
is lifted.
SO ORDERED.
#21 G.R. No. 104556 March 19, 1998
NATIONAL FEDERATION OF LABOR (NFL), petitioner,
vs.
THE SECRETARY OF LABOR OF THE REPUBLIC OF THE PHILIPPINES AND HIJO PLANTATION INC., (HPI), respondents.

MENDOZA, J.:
Petitioner NFL (National Federation of Labor) was chosen the bargaining agent of rank-and-file employees of the
Hijo Plantation Inc. (HPI) in Mandaum, Tagum, Davao del Norte at a certification election held on August 20, 1989.
Protests filed by the company and three other unions against the results of the election were denied by the
Department of Labor and Employment in its resolution dated February 14, 1991 but, on motion of the company
(HPI), the DOLE reconsidered its resolution and ordered another certification election to be held. The DOLE
subsequently denied petitioner NFL's motion for reconsideration.
The present petition is for certiorari to set aside orders of the Secretary of Labor and Employment dated August 29,
1991, December 26, 1991 and February 17, 1992, ordering the holding of a new certification election to be
conducted in place of the one held on August 20, 1989 and, for this purpose, reversing its earlier resolution dated
February 14, 1991 dismissing the election protests of private respondent and the unions.
The facts of the case are as follows:
On November 12, 1988, a certification election was conducted among the rank-and-file employees of the Hijo
Plantation, Inc. resulting in the choice of "no union." However, on July 3, 1989, on allegations that the company
intervened in the election, the Director of the Bureau of Labor Relations nullified the results of the certification
election and ordered a new one to be held.
The new election was held on August 20, 1989 under the supervision of the DOLE Regional Office in Davao City with
the following results:
Total Votes cast 1,012
Associated Trade Unions (ATU) 39
RUST KILUSAN 5
National Federation of Labor (NFL) 876
Southern Philippines Federation of Labor 4
SANDIGAN 6
UFW 15
No Union 55
Invalid 13
The Trust Union Society and Trade Workers-KILUSAN (TRUST-Kilusan), the United Lumber and General Workers of
the Philippines (ULGWP), the Hijo Labor Union and the Hijo Plantation, Inc. sought the nullification of the results of
the certification election on the ground that it was conducted despite the pendency of the appeals filed by Hijo
Labor Union and ULGWP from the order, dated August 17, 1989, of the Med-Arbiter denying their motion for
intervention. On the other hand, HPI claimed that it was not informed or properly represented at the pre-election
conference. It alleged that, if it was represented at all in the pre-election conference, its representative acted
beyond his authority and without its knowledge. Private respondent also alleged that the certification election was
marred by massive fraud and irregularities and that out of 1,692 eligible voters, 913, representing 54% of the rank-
and-file workers of private respondent, were not able to vote, resulting in a failure of election.
On January 10, 1990, Acting Labor Secretary Dionisio dela Serna directed the Med-Arbiter, Phibun D. Pura, to
investigate the company's claim that 54% of the rank-and-file workers were not able to vote in the certification
election.
In his Report and Recommendation, dated February 9, 1990, Pura stated:
1. A majority of the rank-and-file workers had been disfranchised in the election of August 20, 1989 because of
confusion caused by the announcement of the company that the election had been postponed in view of the
appeals of ULGWP and Hijo Labor Union (HLU) from the order denying their motions for intervention. In addition,
the election was held on a Sunday which was non-working day in the company.
2. There were irregularities committed in the conduct of the election. It was possible that some people could have
voted for those who did not show up. The election was conducted in an open and hot area. The secrecy of the ballot
had been violated. Management representatives were not around to identify the workers.
3. The total number of votes cast, as duly certified by the representation officer, did not tally with the 41-page
listings submitted to the Med-Arbitration Unit. The list contained 1,008 names which were checked or encircled
(indicating that they had voted) and 784 which were not, (indicating that they did not vote), or a total of 1,792. but
according to the representation officer the total votes cast in the election was 1,012.
Med-Arbiter Pura reported that he interviewed eleven employees who claimed that they were not able to vote and
who were surprised to know that their names had been checked to indicate that they had voted.
But NFL wrote a letter to Labor Secretary Ruben Torres complaining that it had not been informed of the
investigation conducted by Med-Arbiter Pura and so was not heard on its evidence. For this reason, the Med-Arbiter
was directed by the Labor Secretary to hear interested parties.
The Med-Arbiter therefore summoned the unions. TRUST-Kilusan reiterated its petition for the annulment of the
results of the certification election. Hijo Labor Union manifested that it was joining private respondent HPI's appeal,
adopting as its own the documentary evidence presented by the company, showing fraud in the election of August
20, 1989. On the other hand, petitioner NFL reiterated its contention that management had no legal personality to
file an appeal because it was not a party to the election but was only a bystander which did not even extend
assistance in the election. Petitioner denied that private respondent HPI was not represented in the pre-election
conference, because the truth was that a certain Bartolo was present on behalf of the management and he in fact
furnished the DOLE copies of the list of employees, and posted in the company premises notices of the certification
election.
Petitioner NFL insisted that more than majority of the workers voted in the election. It claimed that out of 1,692
qualified voters, 1,012 actually voted and only 680 failed to cast their vote. It charged management with resorting to
all kinds of manipulation to frustrate the election and make the "Non Union" win.
In a resolution dated February 14, 1991, the DOLE upheld the August 20, 1989 certification election. With respect to
claim that election could not be held in view of the pendency of the appeals of the ULGWP and Hijo Labor Union
from the order of the Med-Arbiter denying their motions for intervention, the DOLE said: 1
. . . even before the conduct of the certification election on 12 November 1988 which was nullified, Hijo Labor Union
filed a motion for interventions. The same was however, denied for being filed unseasonably, and as a result it was
not included as one of the choices in the said election. After it has been so disqualified thru an order which has
become final and executory, ALU filed a second motion for intervention when a second balloting was ordered
conducted. Clearly, said second motion is proforma and intended to delay the proceedings. Being so, its appeal from
the order of denial did not stay the election and the Med-Arbiter was correct and did not violate any rule when he
proceeded with the election even with the appeal. In fact, the Med-Arbiter need not rule on the motion as it has
already been disposed of with finality.
The same is true with the motion for intervention of ULGWP. The latter withdrew as a party to the election on
September 1988 and its motion to withdraw was granted by the Med-Arbiter on October motion for intervention
filed before the conduct of a second balloting where the choices has already been pre-determined.
Let it be stressed that ULGWP and HLU were disqualified to participate in the election through valid orders that have
become final and executory even before the first certification election was conducted. Consequently, they may not
be allowed to disrupt the proceeding through the filing of nuisance motions. Much less are they possessed of the
legal standing to question the results of the second election considering that they are not parties thereto.
The DOLE gave no weight to the report of the Med-Arbiter that the certification election was marred by massive
fraud and irregularities. Although affidavits were submitted showing that the election was held outside the company
premises and private vehicles were used as makeshift precincts, the DOLE found that this was because respondent
company did not allow the use of its premises for the purpose of holding the election, company guards were
allegedly instructed not to allow parties, voters and DOLE representation officers to enter the company premises,
and notice was posted on the door of the company that the election had been postponed.
Nor was weight given to the findings of the Med-Arbiter that a majority of the rank-and-file workers had been
disfranchised in the August 20, 1989 election and that the secrecy of the ballot had been violated, first, because the
NFL was not given notice of the investigation nor the chance to present its evidence to dispute this finding and,
second, the Med Arbiter's report was not supported by the minutes of the proceedings nor by any record of the
interviews of the 315 workers. Moreover, it was pointed out that the report did not state the names of the persons
investigated, the questions asked and the answers given. The DOLE held that the report was "totally baseless."
The resolution of February 14, 1991 concluded with a reiteration of the rule that the choice of the exclusive
bargaining representative is the sole concern of the workers. It said: "If indeed there were irregularities committed
during the election, the contending unions should have been the first to complain considering that they are the ones
which have interest that should be protected." 2
Accordingly, the Labor Secretary denied the petition to annul the election filed by the ULGWP, TRUST-KILUSAN, HLU
and the HPI and instead certified petitioner NFL as the sole and exclusive bargaining representative of the rank-and-
file employees of private respondent HPI.
However, on motion of HPI, the Secretary of Labor, on August 29, 1991, reversed his resolution of February 14,
1991. Petitioner NFL filed a motion for reconsideration but its motion was denied in an order, dated December 26,
1991. Petitioner's second motion for reconsideration was likewise denied in another order dated February 17, 1992.
Hence, this petition.
First. Petitioner contends that certification election is the sole concern of the employees and the employer is a mere
bystander. The only instance wherein the employer may actively participate is when it files a petition for
certification election under Art. 258 of the Labor Code because it is requested to bargain collectively. Petitioner says
that this is not the case here and so the DOLE should not have given due course to private respondent's petition for
annulment of the results of the certification election.
In his resolution of August 29, 1991, the Secretary of Labor said he was reversing his earlier resolution because
"workers of Hijo Plantation, Inc. have deluged this Office with their letter-appeal, either made singly or collectively
expressing their wish to have a new certification election conducted" and that as a result "the firm position we held
regarding the integrity of the electoral exercise had been somewhat eroded by this recent declaration of the
workers, now speaking in their sovereign capacity."
It is clear from this, that what the DOLE Secretary considered in reversing its earlier rulings was not the petition of
the employer but the letter-appeals that the employees sent to his office denouncing the irregularities committed
during the August 20, 1989 certification election. The petition of private respondent was simply the occasion for the
employees to voice their protests against the election. Private respondent HPI attached to its Supplemental Appeal
filed on September 5, 1989 the affidavits and appeals of more or less 784 employees who claimed that they had
been disfranchised, as a result of which they were not able to cast their votes at the August 20, 1989 election. It was
the protests of employees which moved the DOLE to reconsider its previous resolution of February 14, 1991,
upholding the election.
Nor is it improper for private respondent to show interest in the conduct of the election. Private respondent is the
employer. The manner in which the election was held could make the difference between industrial strife and
industrial harmony in the company. What an employer is prohibited from doing is to interfere with the conduct of
the certification election for the purpose of influencing its outcome. But certainly an employer has an abiding
interest in seeing to it that the election is clean, peaceful, orderly and credible.
Second. The petitioner argues that any protest concerning the election should be registered and entered into the
minutes of the election proceedings before it can be considered. In addition, the protest should be formalized by
filing it within five (5) days. Petitioner avers that these requirements are condition precedents in the filing of an
appeal. Without these requisites the appeal cannot prosper. It cites the following provisions of Book V, Rule VI of the
Implementing Rules and Regulations of the Labor Code:
Sec. 3. Representation officer may rule on any on-the-spot question. The Representation officer may rule on any
on-the-spot question arising from the conduct of the election. The interested party may however, file a protest with
the representation officer before the close of the proceedings.
Protests not so raised are deemed waived. Such protests shall be contained in the minutes of the proceedings.
Sec. 4. Protest to be decided in twenty (20) working days. Where the protest is formalized before the med-arbiter
within five (5) days after the close of the election proceedings, the med-arbiter shall decide the same within twenty
(20) working days from the date of its formalization. If not formalized within the prescribed period, the protest shall
be deemed dropped. The decision may be appealed to the Bureau in the same manner and on the same grounds as
provided under Rule V.
In this case, petitioner maintains that private respondent did not make any protest regarding the alleged
irregularities (e.g., massive disfranchisement of employees) during the election. Hence, the appeal and motions for
reconsideration of private respondent HPI should have been dismissed summarily.
The complaint in this case was that a number of employees were not able to cast their votes because they were not
properly notified of the date. They could not therefore have filed their protests within five (5) days. At all events, the
Solicitor General states, that the protests were not filed within five (5) days, is a mere technicality which should not
be allowed to prevail over the workers' welfare. 3 As this Court stressed in LVN Pictures, Inc. v. Phil. Musicians
Guild, 4 it is essential that the employees must be accorded an opportunity to freely and intelligently determine
which labor organization shall act in their behalf. The workers in this case were denied this opportunity. Not only
were a substantial number of them disfranchised, there were, in addition, allegations of fraud and other
irregularities which put in question the integrity of the election. Workers wrote letters and made complaints
protesting the conduct of the election. The Report of Med-Arbiter Pura who investigated these allegations found the
allegations of fraud and irregularities to be true.
In one case this Court invalidated a certification election upon a showing of disfranchisement, lack of secrecy in the
voting and bribery. 5 We hold the same in this case. The workers' right to self-organization as enshrined in both the
Constitution and Labor Code would be rendered nugatory if their right to choose their collective bargaining
representative were denied. Indeed, the policy of the Labor Code favors the holding of a certification election as the
most conclusive way of choosing the labor organization to represent workers in a collective bargaining unit. 6 In case
of doubt, the doubt should be resolved in favor of the holding of a certification election.
Third. Petitioner claims that the contending unions, namely, the Association of Trade Union (ATU), the Union of
Filipino Workers (UFW), as well as the representation officers of the DOLE affirmed the regularity of the conduct of
the election and they are now estopped from questioning the election.
In its comment, ATU-TUCP states,
. . . The representative of the Association of Trade Unions really attest to the fact that we cannot really identify all
the voters who voted on that election except some workers who were our supporters in the absence of Hijo
Plantation representatives. We also attest that the polling precinct were not conducive to secrecy of the voters since
it was conducted outside of the Company premises. The precincts were (sic) the election was held were located in a
passenger waiting shed infront of the canteen across the road; on the yellow pick-up; at the back of a car; a waiting
shed near the Guard House and a waiting shed infront of the Guard House across the road. Herein private
respondents also observed during the election that there were voters who dictated some voters the phrase
"number 3" to those who were casting their votes and those who were about to vote. Number 3 refers to the
National Federation of Labor in the official ballot.
ATU-TUCP explains that it did not file any protest because it expected workers who had been aggrieved by the
conduct of the election would file their protest since it was in their interests that they do so.
Fourth. Petitioner points out that the letter-appeals were written almost two years after the election and they bear
the same dates (May 7 and June 14, 1991); they are not verified; they do not contain details or evidence of
intelligent acts; and they do not explain why the writers failed to vote. Petitioner contends that the letter-appeals
were obtained through duress by the company.
We find the allegations to be without merit. The records shows that as early as August 22 and 30, 1989, employees
already wrote letters/affidavits/
manifestoes alleging irregularities in the elections and disfranchisement of workers. 7 As the Solicitor General says in
his Comment, 8 these affidavits and manifestoes, which were attached as Annexes "A" to "CC" and Annexes "DD" to
"DD-33" to private respondent's Supplemental Petition of September 5, 1989 just 16 days after the August 20,
1989 election. It is not true therefore that the employees slept on their rights.
As to the claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates because they were
prepared by private respondent HPI and employees were merely asked to sign them, suffice it to say that this is
plain speculation which petitioner has not proven by competent evidence.
As to the letters not being verified, suffice it to say that technical rules of evidence are not binding in labor cases.
The allegation that the letters did not contain evidence of intelligent acts does not have merit. The earlier letters 9of
the workers already gave details of what they had witnessed during the election, namely the open balloting (with no
secrecy), and the use of NFL vehicles for polling precinct. These letters sufficiently give an idea of the irregularities of
the certification election. Similarly, the letters containing the signatures of those who were not able to vote are
sufficient. They indicate that the writers were not able to vote because they thought the election had been
postponed, especially given the fact that the two unions had pending appeals at the time from orders denying them
the right to intervene in the election.
WHEREFORE, the petition for certiorari is DISMISSED and the questioned orders of the Secretary of Labor and
Employment are AFFIRMED.
SO ORDERED.
#22 G.R. No. L-11321 November 28, 1958
RIO GRANDE RUBBER ESTATE COMPANY INC., plaintiff-appellant,
vs.
BOARD OF LIQUIDATORS, ET AL., defendants-appellees.
Arcega and Arcega for appellant.
Government Corporate Counsel Ambrosio Padilla and Augusto Kalaw for appellees.
BAUTISTA ANGELO, J.:
Plaintiff is a corporation organized under the laws of the Philippines, its assets consisting of a rubber plantation grown
on two parcels of land situated at Kabacan, Cotabato. Shortly after it was organized, the corporation contracted an
obligation of P93,928.56 with the Agricultural & Industrial Bank. In October, 1943, the stockholders sold their entire
stockholding to Ohta Development Co., a Japanese corporation, for the sum of P370,000.00, of which the amount of
P93,928.56 was applied to the payment of its indebtedness to the Agricultural & Industrial Bank and the balance of
P276,071.44 was distributed among its stockholders and applied to other expenses of the corporation.
Following the transfer of the entire stock of plaintiff corporation, the Ohta Development Co. took possession of and
operated the rubber plantation belonging to it which continued during the Japanese occupation until the liberation of
Cotabato in June, 1945, when the United States Army, through its Alien Property Custodian, took over the custody of
the plantation. By virtue of Vesting Order No. P-3 issued by the United States Army on January 7, 1946, the Alien
Property Custodian took over the stock and assets of the Ohta Development Co., which included the assets of the Rio
Grande Rubber Estate Co., Inc. The control and ownership of this corporation were later transferred to the Republic of
the Philippines in accordance with the Philippine Property Act of 1946 (Act of Congress of the United states of July 3,
1946) and Republic Act No. 8. The Rio Grande Rubber Estate Co., Inc., together with other enemy-owned corporations
was abolished by Executive Order No. 372 promulgated by the President of the Philippines on November 24, 1950
pursuant to the powers vested in him by Republic Act No. 422, although it was continued as a body corporate for a
period of three years for the purpose of prosecuting and depending suits by or against it and of enabling the Board of
Liquidators, which was created to exercise the powers, functions and duties of its Board of Directors, to settle and
close its affairs. And on June 20, 1952, Republic Act No. 763 was approved establishing the Mindanao Institute of
Technology to which the two parcels of land formerly belonging to the Rio Grande Rubber Estate Co., Inc. were
transferred for the purposes mentioned therein.
After their efforts to secure the return of their shareholding in the Rio Grande Rubber Estate Co., Inc. proved futile, its
former stockholders commenced the present action on June 17, 1953 in the Court of First Instance of Cotabato in the
name of the corporation against the Board of Liquidators in its capacity as the Board of Directors of the National Abaca
& Other Fibers Corporation (NAFCO) and the Mindanao Institute of Technology seeking the recovery of the possession
and ownership of the two parcels of land which were originally owned by plaintiff corporation and which were later
transferred to the Mindanao Institute of Technology under Republic Act No. 763. The complaint is founded on the
claim that the certificates of title of the two parcels of land are still in the name of the plaintiff corporation and as such
should be returned to its possession, and that Section 11 of Republic Act No. 763 transferring them to the Mindanao
Institute of Technology is unconstitutional. Forthwith, plaintiff also filed an ex parte petition for the appointment of a
receiver, and after an ex parte hearing, the court appointed the Kawilihan Corporation upon the filing of a bond of
P50,000.00.
On July 31, 1953, defendants filed a motion to dismiss based on the following grounds: (1) the court has no jurisdiction
over the Mindanao Institute of Technology; (2) the action is not authorized by the governing body of plaintiff
corporation and so it has no legal capacity to sue; and (3) the complaint states no cause of action. Simultaneously,
defendants likewise filed a petition to discharge the receiver on the ground that its appointment was procured
without sufficient cause. The petition to discharge was granted upon defendants' filing a bond in the amount of
P60,000.00, but the motion to dismiss was set for hearing to give the parties an opportunity to present evidence. At
the hearing, however, only defendants appeared who thereupon presented their evidence. Thereafter, the court
issued on May 25, 1954, an order sustaining the motion and dismissing the complaint on the ground that plaintiff does
not have the character and representation which it claims to possess, whereupon plaintiff took the present appeal.
It appears that in October, 1943, the stockholders of plaintiff corporation sold their entire stockholding as well as its
assets to Ohta Development Co., a Japanese corporation, for the sum of P370,000.00, of which the amount of
P93,928.56 was applied to the payment of plaintiff's indebtedness to the Agricultural & Industrial Bank and the
balance of P276,071.44 was distributed among the stockholders and applied to other expenses of the corporation. It is
for this reason that the lower court made in its order of dismissal the conclusion that these stockholders "could not
validly organize themselves into a board to act for the corporation inasmuch as they could no longer claim as
stockholders because they already sold and dispose of all their stockholdings to the Ohta Development Co." We find
this conclusion to be correct unless it be shown, which is not the case, that said stockholders required their
stockholdings before the institution of the present action.
It is true that there is an intimation on the part of plaintiff that the sale of its stockholding in favor of Ohta
Development Co. was made thru force, duress and intimidation, but that was a mere claim which has not been
proven. And even if the same were true, that will not ipso facto have the effect of reverting the ownership of the stock
to its original owner before any judicial declaration to that effect, for under the law, a contract where consent is
vitiated by mistake, violence or intimidation, is not void ab initio but is merely voidable (Article 1330, New Civil Code).
More than that, under the law, a contract entered into under those circumstances is binding upon the parties unless
annulled by proper action in court. And the contract is even susceptible of ratification (Article 1390, Idem.)
1
For these
reasons, we find correct the following finding of the lower court: "Assumingarguendo that the sale was forced upon
the vendors, nevertheless there is no judicial declaration that the transaction was null and void due to the alleged
force and intimidation in securing the consent of the stockholders. So far, the sale still stands valid until such time
when the same is declared null and void by the Courts. A mere allegation on their part that the sale was consummated
thru intimidation will not ipso facto revert to them the ownership of those stocks without any judicial declaration."
Indeed, plaintiff's claim that the sale is inexistent or void ab initio cannot be sustained, it appearing that out of its
consideration of P370,000.00 plaintiff applied the amount of P93,928.56 to pay its prewar indebtedness to the
Agricultural & Industrial Bank and distributed the balance of P276,071.44 among its stockholders. This is a clear
indication that the sale, even if vitiated, is merely voidable and as such cannot have revertible effects unless proper
action is brought for its annulment. As this Court has aptly said:
Had the plaintiff desired to set aside the contracts of conveyance made by his father, he should have instituted a
special action for that purpose. (Arts. 1300 to 1314, Civil Code.) He can not have said documents annulled in a
subsidiary action. . . . One who desires to recover lands as the owner from another upon the theory that the deeds
held by the other are null and void must first ask that such alleged fraudulent deeds be set aside. (Llacer vs. Muoz de
Bustillo and Achaval, 12 Phil., 328, 334).
We have taken note of plaintiff's claim that the original stockholders should now be considered as the owners of their
respective stock for the reason that they were able to secure from the corporation new certificates of stock and that
these certificates were duly approved by the Securities and Exchange Commission. And on the strength of this claim,
plaintiff now contends that the original stockholders have now the requisite power and authority to act in behalf of
the corporation, including the institution of the present action. The least we can say with regard to these new
certificates is that the same were secured thru misrepresentation and as such cannot be considered valid under
Republic Act No. 62. Thus, it appears that these certificates were obtained upon the claim that the original ones were
lost or destroyed during the last war and that inspite of diligent efforts to locate them they could not be found, which
certainly is not true upon the view we take of the case. Evidently, the Securities and Exchange Commission was led
into approving those certificates in view of this misrepresentation.
Premises considered, we find correct the conclusion of the lower court "that the plaintiff does not have the character
and representation which it claims to possess", and hence it does not have the necessary authority to bring ng the
present action.
Wherefore, the order appealed from is affirmed, with costs against plaintiff.
#23 [G.R. No. L-14656. November 29, 1960.]

PHILIPPINE LAND-AIR-SEA LABOR UNION (PLASLU), Petitioner, v. COURT OF INDUSTRIAL
RELATIONS, ET AL., Respondents.

Emilio Lumontad for Petitioner.

Simeon S. Andres for respondent CIR.

Severino, Ferrer, Revira & Benigno for respondent AWA.

Hilado & Hilado for respondent San Carlos Milling Co.


SYLLABUS


LABOR LAWS; BARGAINING AGREEMENT; BASIC TEST OF A BARGAINING UNITS ACCEPTABILITY. The
most efficacious bargaining unit is one which is compromised of constituents enjoying a community or
mutuality of interest. This is so because the basic test of bargaining units acceptability is whether it will be
best secure to all employees the exercise of their collective bargaining rights. Hence, piece workers
employed on casual or day to day basis who do not have reasonable basis for continued or renewed
employment for any appreciable time, cannot be considered to have such mutuality of interest as to justify
their inclusion in a bargaining unit composed of permanent or regular employees.


D E C I S I O N


GUTIERREZ DAVID, J.:


This is a petition to review on certiorari an order of the Court of Industrial Relations in Case No. 38 MC-Cebu
certifying the Allied Workers Association of the Philippines, San Carlos Chapter, as the sole collective
bargaining representative of the employees of the San Carlos Milling Co., Inc.

The record shows that in Case No. 38 MC-Cebu the Industrial Court on May 25, 1956 ordered the holding of
certification election to determine which of the two contending labor unions therein, herein petitioner
Philippine Land-Air-Sea Labor Union (PLASLU) or respondent Allied Workers Association of the Philippines
(AWA), shall be the sole collective bargaining agent of the employees of the San Carlos Milling Co. The
pertinent portions of the courts order read as follows:jgc:chanrobles. com.ph

"Considering the history of bargaining relations in this case where there has only been one bargaining unit,
and for purposes of effectuating the policies of the Act, the same should be maintained. In other words, the
appropriate bargaining unit is the Employer unit composed of 602 employees including some 200 piece work
(pakiao) workers and stevedores appearing in the Employers payrolls during the milling and off season
minus the alleged laborers and operators of farm tractors who are hired and paid by the sugar cane
planters. (Italics supplied.)

"All the foregoing considered, the Court hereby directs the Department of Labor to conduct a certification
election in the premises of the San Carlos Milling Company, Ltd. at San Carlos Negros Occidental for the
purpose of determining, under existing rules and regulations on the matter, which of the two (2) contending
labor unions herein, the PLASLU or the AWA shall be the sole collective bargaining agent in accordance with
the provisions of the Act. The Employer is hereby ordered to submit a list of employees appearing in its
payroll during the milling season for the year 1955 to the Department of Labor which, together with the
Exhibit X-Court 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 excluded from
participating in said election. (Italics supplied.)

"SO ORDERED."cralaw virtua1aw library

Prior to the holding of the election, respondent AWA filed an urgent motion to exclude 144 employees from
participating in the election. The motion, however, was denied, the Industrial Court holding that the workers
sought to be excluded were eligible to vote since they were actual employees of good standing of the
respondent company during the milling season of 1955 and were included in the companys payroll as of
that date.

On September 21, 1956, the certification election was held in the premises of the San Carlos Milling Co.,
PLASLU receiving 88 votes while AWA garnered 149, with 390 ballots recorded as challenged, 242 of them
by the petitioner PLASLU and 142 by the respondent AWA. Within 72 hours after the closing of the election,
as required by the Rules for Certification Election, AWA filed with the Industrial Court a petition contesting
the election on the ground of the ineligibility of the voters who cast the 148 ballots it challenged. Said
respondent AWA also alleged that the 242 ballots challenged by PLASLU were cast by legitimate employees
of the company, as they were the votes of "piece work (pakiao) workers and stevedores appearing in the
employers payroll during the milling and off-season" of 1955. PLASLU, on the other hand, in an urgent
motion filed on October 4, 1956, questioned the validity of the 242 ballots cast by the stevedores and piece
workers. The motion was opposed by AWA on the ground that as a protest of the election it was filed late.
The Industrial Court, however, considered the same as an answer to AWAs petition, and on September 4,
1957, after hearing the arguments of the parties, ordered that all the 390 challenged ballots be opened and
canvassed and the corresponding votes added to those already credited to the contending labor unions.
PLASLU moved for reconsideration of the order but the motion was denied and pursuant to said order the
challenged ballots were opened. After the canvass, 148 votes challenged by AWA were counted in favor of
PLASLU. Of the 242 votes challenged by PLASLU, 3 were counted in its favor, 228 credited in favor of AWA,
and 11 declared either for no union or spoiled ballots. Adding the votes to the results of the certification
election, the final count showed that the respondent AWA garnered a total of 377 votes on against 239 for
PLASLU. Accordingly, said respondent was certified by the Industrial Court in its order dated March 12, 1958
as the sole collective bargaining agent of the employees of the San Carlos Milling Co. As its motion for
reconsideration of the order was denied by the court en banc with Judge Feliciano Tabigne dissenting
the petitioner PLASLU filed the present petition for review, contending that the Industrial Court erred in not
excluding the 242 votes challenged by it from the total number of votes credited to respondent AWA.

We find petitioners contention to be meritorious.

In the order of May 25, 1956 authorizing the certification election, the trial judge of the Industrial Court
directed that the "list of employees appearing in its payroll during milling season for the year 1955 . . .
together with the Exhibit X-Court 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 excluded
from participating in said election." It being disputed that the challenged votes were cast by casual
employees consisting of stevedores and piece workers who as stated by Judge Tabigne in his dissent
"were not included in the list of employees appearing in the payroll of the company during the milling
season for the year 1955 nor did they appear in the Exhibit X-Court which formed portion of the list of
personnel allowed to vote in said certification election", the said challenged votes should have been
excluded. Citing the declaration of the Industrial Court that the appropriate bargaining unit is the employers
unit composed of 602 employees, including the piece workers and stevedores whose votes were challenged
by PLASLU, the respondent AWA argues that the challenged votes were cast by employees eligible to vote.
It will be noted, however, that these employees whose votes were challenged were hired on temporary or
casual basis and had work of a different nature from those of the laborers permitted to vote in the
certification election. In the case of Democratic Labor Union v. Cebu Stevedoring Co., Inc., Et. Al. (G.R. No.
L-10321, February 28, 1958) this Court 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 work to
which they belong, and the unity of employees interest such as substantial similarity of work and duties.
The most efficacious bargaining unit is one which is comprised of constituents enjoying a community or
mutuality of interest. And this is so because the basic test of a bargaining units acceptability is whether it
will be best assure to all employees the exercise of their collective bargaining rights. (See also Alhambra
Cigar & Cigarette Manufacturing Co. v. Alhambra Employees Association, 107 Phil., 23.) It appearing that
the 242 stevedores and piece workers, 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 time not to mention the nature of work they perform they cannot be considered to have
such mutuality of interest as to justify 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
Industrial Court dated September 4, 1957, which has become final and executory the same not having been
appealed. It will be observed that the said order of September 4, 1957 merely ordered the opening and
canvassing of the challenged ballots. Any appeal taken from said order would therefore have been
premature.

Disregarding the votes cast by the stevedores and piece workers which were counted in favor of the
respondent AWA, the final results of the certification election show that the petitioner PLASLU garnered a
majority of the votes cast by eligible voters. Consequently, said petitioner should be certified as the sole
collective bargaining representative of the employees of the San Carlos Milling Co.

Wherefore, the order complained of is reversed and the petitioner PLASLU is hereby certified as the
collective bargaining agent of the employees of the San Carlos Milling Company. Without costs.

#24 [G.R. No. L-28223. August 30, 1968.]

MECHANICAL DEPARTMENT LABOR UNION SA PHILIPPINE NATIONAL RAILWAYS, Petitioner, v.
COURT OF INDUSTRIAL RELATIONS, and SAMAHAN NG MGA MANGGAGAWA SA CALOOCAN
SHOPS, Respondents.

Sisenando Villaluz for Petitioner.

Gregorio E. Fajardo for respondent Samahan ng mga Mangagawa sa Caloocan Shops.


SYLLABUS


1. LABOR AND SOCIAL LEGISLATION; INDUSTRIAL PEACE ACT; LABOR UNION; FORMATION AND
SEPARATION OF BARGAINING UNIT; APPLICATION OF GLOBE DOCTRINE IS PREMATURE. Under the
"Globe doctrine" (Globe Machine & Stamping Co., 3 NLRB 294) applied in Democratic Labor Union v. Cebu
Stevedoring Co., L-10321, 28 February 1958, bargaining units may be formed through separation of new
units from existing ones whenever plebiscites had shown the workers desire to have their own
representatives. In the case at bar, the appeal of the Mechanical Department Labor Union, questioning the
applicability under the circumstances of the Globe doctrine of considering the will of the employees in
determining what union should represent them, is premature, since the result of the ordered plebiscite
among the workers of the Caloocan Shops (who desire to form a new bargaining unit) may be adverse to
the formation of a separate unit, in which event, all questions raised in this case would be rendered moot
and academic.

2. ID.; ID.; ID.; ID.; ESTABLISHMENT OF NEW AND SEPARATE BARGAINING UNIT IN ONE DEPARTMENT OF
THE SAME COMPANY. Appellant contends that the application of the "Globe doctrine" is not warranted
because the workers of the Caloocan Shops (one of the four main divisions or units of the Mechanical
Department of the PNR) do not require different skills from the rest of the workers in the Mechanical
Department of the Railway Company. This question is primarily one of fact. The Industrial Court has found
that there is a basic difference, in that those in the Caloocan shops not only have a community of interest
and working conditions but perform major repairs of railway rolling stock, using heavy equipment and
machineries found in said ships, while the others only perform minor repairs. It is easy to understand,
therefore, that the workers in the Caloocan shops require special skill in the use of heavy equipment and
machinery sufficient to set them apart from the rest of the workers. In addition, the record shows that the
collective bargaining agreements negotiated by the appellant union have been in existence for more than
two (2) years; hence, such agreements can not constitute a bar to the determination, by proper elections, of
a new bargaining representative.

3. ID.; ID.; COURT OF INDUSTRIAL RELATIONS; COURT OF INDUSTRIAL RELATIONS HAS DISCRETION IN
MATTERS CONCERNING THE DETERMINATION OF REPRESENTATION OF EMPLOYEE GROUPS; REASON
THEREFOR. Republic Act No. 875 has primarily entrusted the prosecution of its policies to the Court of
Industrial Relations, and, in view of its intimate knowledge concerning the facts and circumstances
surrounding the cases brought before it, this Court has repeatedly upheld the exercise of discretion of the
Court of Industrial Relations in matters concerning the representation of employee groups.


D E C I S I O N


REYES, J.B.L., J.:


Petition by the "Mechanical Department Labor Union sa PNR" for a review of an order of the Court of
Industrial Relations, in its Case No 1475-MC, directing the holding of a plebiscite election to determine
whether the employees at the Caloocan Shops desire the respondent union, "Samahan ng Manggagawa sa
Caloocan Shops", to be separated from the Mechanical Department Labor Union, with a view to the former
being recognized as a separate bargaining unit.

The case began on 13 February 1965 by a petition of the respondent "Samahan ng Manggagawa, etc."
calling attention to the fact that there were three unions in the Caloocan shops of the Philippine National
Railways: the "Samahan", the "Kapisanan ng Manggagawa sa Manila Railroad Company", and the
Mechanical Department Labor Union; that no certification election had been held in the last 12 months in the
Caloocan shops; that both the "Samahan" and the Mechanical Department Labor Union 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 Caloocan shop workers.

The petition was opposed by the management as well as by the Mechanical Department Labor Union, the
latter averring that it had been previously certified in two cases as sole and exclusive bargaining agent of
the employees and laborers of the PNRs mechanical department, and had negotiated two bargaining
agreements with management in 1961 and 1963; that before the expiration of the latter, a renewal thereof
had been negotiated and the contract remained to be signed; that the "Samahan" had been organized only
in 21 January 1965; that the Caloocan shops unit was not established nor separated from the Mechanical
Department unit; that the "Samahan" is composed mainly of supervisors who had filed a pending case to be
declared non- supervisors; and that the purpose of the petition was to disturb the present smooth working
labor management relations.

By an order of 18 August 1967, Judge Arsenio Martinez, after receiving the evidence, made the following
findings:jgc:chanrobles. com.ph

"The Court, after a cursory examination of the evidence presented made the following findings: That
petitioner union is composed of workers exclusively at the Caloocan shops of the Philippine National
Railways charged with the maintenance of rolling stocks for repairs; major repairs of locomotive, engines,
etc. are done in the Caloocan shops while minor ones in the Manila sheds; workers in the Caloocan shops do
not leave their station unlike Manila shop workers who go out along the routes and lines for repairs; workers
both in the Caloocan shops and Manila sheds are exposed to hazards occasioned by the nature of their work;
that with respect to wages and salaries of employees, categories under the Job Classification and Evaluation
Plan of the company apply to all workers both in the Caloocan shops and Manila sheds; administration over
employees, members of petitioner union as well as oppositor is under the Administrative Division of the
company; that from the very nature of their work, members of petitioner union and other workers of the
Mechanical Department have been under the coverage of the current collective bargaining agreement which
was a result of a certification by this Court of the Mechanical Department Labor union, first in 1960 and later
in 1963. Subsequently, when a latter contract expired, 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 affix the
signatures of the parties thereto; that during the pendency of this petition, on June 14, 1965, the aforesaid
collective bargaining agreement was signed between the Philippine National Railways and the Mechanical
Department Labor Union sa Philippine National Railways (Manila Railroad Company).

The main issue involved herein is: Whether or not a new unit should be established, the Caloocan shops,
separate and distinct from the rest of the workers under the Mechanical Department now represented by the
Mechanical Department Labor Union.

The Caloocan Shops, all located at Caloocan City have 360 workers more or less. It is part and parcel of the
whole Mechanical Department of the Philippine National Railways. The department is composed of four main
divisions or units, namely: Operations, Manila Area and Lines; Locomotive Crew; Motor Car Crew; and the
Shops Rolling Stocks Maintenance. (Exhibits "D" and "D-1").

The Locomotive Crew and Motor Car Crew, though part of the Mechanical Department, is a separate unit,
and is represented by the Union de Maquinistas, Fogoneros Y Motormen. The workers under the other two
main units of the departments are represented by the Mechanical Department Labor Union. The workers of
the Shops Rolling Stocks Maintenance Division or the Caloocan Shops now seek to be separated from the
rest of the workers of the department and to be represented by the "Samahan Ng Manggawa sa Caloocan
Shops."cralaw virtua1aw li brary

There is certainly a community of interest among the workers of the Caloocan Shops. They are grouped in
one place. They work under one or same working condition, same working time or schedule and are exposed
to same occupational risk.

Though evidence on record shows that workers at the Caloocan Shops perform the same nature of work as
their counterparts in the Manila Shed, the difference lies in the fact that workers at the Caloocan Shops
perform major repairs of locomotives, rolling stocks, engines, etc., while those in the Manila Shed, works on
minor repairs. Heavy equipment and machineries are found in the Caloocan Shops."cralaw virtua1aw li brary

The trial judge then reviewed the collective bargaining history of the Philippine National Railways, as
follows:jgc:chanrobles. com.ph

"On several similar instances, this Court allowed the establishment of new and separate bargaining units in
one company, even in one department of the same company, despite the existence of the same facts and
circumstances as obtaining in the case at bar.

The history of the collective bargaining in the Manila Railroad Company, now the Philippine National Railways
shows that originally, there was only one bargaining unit in the company, represented by the Kapisanan Ng
Manggagawa sa MRR. Under Case No. 237-MC, this Court ordered the establishment of two additional units,
the engine crew and the train crew to be represented by the Union de Maquinistas, Fogoneros, Ayudante Y
Motormen and Union de Empleados de Trenes respectively. Then in 1961, under Cases Nos. 491-MC, 494-
MC and 507-MC 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 existing bargaining units in the company. Then
again, under Case No. 763-MC, a new unit, composed of the Mechanical Department employees, was
established to be represented by the Mechanical Department Labor Union. Incidentally, the first attempt of
the employees of the Mechanical Department to be separated as a unit was dismissed by this Court in Case
No. 488-MC.

In the case of the yard crew, station employees and the Engineering Department employees, the Supreme
Court sustained the order of this Court in giving the employees concerned the right to vote and decide
whether or not they desire to be separate units (See G.R. No. L-16292-94, L-16309 and L-16317-18,
November, 1965)."cralaw vi rtua1aw l ibrary

In view of its findings and the history of union representation in the railway company, indicating that
bargaining units had been formed through separation of new units from existing ones whenever plebiscites
had shown the workers desire to have their own representatives, and relying on the "Globe doctrine" (Globe
Machine & Stamping Co., 3 NLRB 294) applied in Democratic Labor Union v. Cebu Stevedoring Co., L-10321,
28 February 1958, Judge Martinez held that the employees in the Caloocan Shops should be given a chance
to vote on whether their group should be separated from that represented by the Mechanical Department
Labor Union, and ordered a plebiscite held for the purpose. The ruling was sustained by the Court en banc;
wherefore, the Mechanical Department Labor Union, appealed to this Court, questioning the applicability
under the circumstances of the "Globe doctrine" 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 workers of the
Caloocan 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. Apparently,
however, the appellant Mechanical Department Labor Union takes 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 justify our
interfering with it. Republic Act No. 875 has primarily entrusted the prosecution of its policies to the Court of
Industrial Relations, and, in view of its intimate knowledge concerning the facts and circumstances
surrounding the cases brought before it, this Court has repeatedly upheld the exercise of discretion of the
Court of Industrial Relations in matters concerning the representation of employee groups (Manila Paper
Mills Employees & Workers Association v. C.I.R., 104 Phil. 10; Benguet Consolidated v. Bobok Lumber Jack
Association, 103 Phil. 1150).

Appellant contends that the application of the "Globe doctrine" is not warranted because the workers of the
Caloocan shops do not require different skills from the rest of the workers in the Mechanical Department of
the Railway Company. This question is primarily one of fact. The industrial Court has found that there is a
basic difference, in that those in the Caloocan shops not only have a community of interest and working
conditions but perform major repairs of railway rolling stock, using heavy equipment and machineries found
in said shops, while the others only perform minor repairs. It is easy to understand, therefore, that the
workers in the Caloocan shops require special skill in the use of heavy equipment and machinery sufficient
to set them apart from the rest of the workers. In addition, the record shows that the collective bargaining
agreements negotiated by the appellant union have been in existence for more than two (2) years; hence,
such agreements can not constitute a bar to the determination, by proper elections, of a new bargaining
representative (PLDT Employees Union v. Philippine Long Distance Telephone Co., 51 Off. Gaz., 4519).

As to the charge that some of the members of the appellee, "Samahan Ng Manggagawa", are actually
supervisors, it appears that the question of the status of such members is still pending final decision; hence,
it would not constitute a legal obstacle to the holding of the plebiscite. At 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 Court of Industrial Relations, should be considered valid and binding on the
workers of the Caloocan shops is a question that should be first passed upon by the Industrial Court.