Samahang Manggagawa ng Permex (SMP) vs Secretary of Labor, National Labor

Federation (NFL), Permex

Mendoza, J.
Facts:

January 15, 1991: certification election was conducted among employees of

respondent Permex.
o Options: 1) National Federation Union, 2) No Union
o Result: No Union won
March 11, 1991: after the certification election, some employees of Permex
formed a labor organization known as the Samahang Manggagawa sa Permex
(SMP) which they registered with the DOLE.
August 16, 1991: SMP wrote the company requesting recognition as the sole and
exclusive bargaining representative.
October 19, 1991: Permex Producer recognized SMP and, on December 1,
entered into a collective bargaining agreement with it.
December 9-10, 1991: CBA was ratified by the majority of the rank and file
employees of Permex.
December 13, 1991: CBA was certified by the DOLE.
February 25, 1992: respondent NFL filed a petition for certification election but
this was dismissed by the Med-Arbiter.
NFL appealed to the Secretary of Labor who set aside the Med-Arbiter decision.
A certification election was conducted among the rank and file employees at the
Permex with the following options: 1) NFL, 2) SMP, 3) No Union.
SMP brought this petition for review on certiorari.
o SMPs argument: Permex has already voluntarily recognized SMP as the
sole collective bargaining agent. Therefore, SMP is the sole collective
bargaining agent for the rank and file employees and the CBA is valid.
Also, of the 763 qualified employee, 479 joined SMP (63%). Furthermore,
542 employee (71%) ratified the CBA. such support by the majority of the
employees justifies its finding that the CBA made by it is valid and binding

Issue: Whether the employer can declare a union as the exclusive representative for
the purposes of collective bargaining. No.
Ratio:
Permex should not have given its voluntary recognition to SMP when the latter asked
for recognition as exclusive collective bargaining agent of the employees of the
company in August 1991. The company did not have the power to declare the union the
exclusive representative of the workers for the purpose of collective bargaining.
By virtue of Executive Order No. 111, which became effective on March 4, 1987, the
direct certification previously allowed under the Labor Code had been discontinued as a

method of selecting the exclusive bargaining agents of the workers. Certification

election is the most effective and the most democratic way of determining which labor
organization can truly represent the working force in the appropriate bargaining unit of a
company.
The court also held that it is not enough that a union has the support of the majority of
the employees. It is equally important that everyone in the bargaining unit be given the
opportunity to express himself. A certification election should have been held.