LABOR STANDARDS PRELIM

INTRODUCTION
A. Definitions
Labor Law an area of law that deals with the rights of employers, employees and
labor organization.
Labor Standards minimum requirements prescribed by existing laws, rules and
regulations and other issuances relating to wages, living allowances and other
employee monetary and welfare benefits, occupational health and safety and other
standards designed to improve conditions of work.
Labor Relations the relations between management and labor, especially with
respect to the maintenance of agreements.
Welfare Legislation

B. Justification/Basis/Ultimate goal of Labor Legislation

C. 7 Cardinal Rights of Workers

it shall guarantee the rights of all workers to self-organization

collective bargaining and negotiations
and peaceful concerted activities
including the right to strike in accordance with the law
they shall be entitled to security of tenure
humane conditions of work and a living wage
they shall also participate in policy and decision making processes
affecting their rights and benefits as may be provided by law

D. Management Prerogative: Rule/Exception

Under the doctrine of management prerogative, every employer has the
inherent right to regulate, according to his own discretion and judgment, all aspects
of employment, including hiring, work assignments, working methods, the time,
place and manner of work, work supervision, transfer of employees, lay-off of
workers, and discipline, dismissal, and recall of employees. The only limitations to
the exercise of this prerogative are those imposed by labor laws and the principles
of equity and substantial justice.

FIRST DIVISION
[G.R. No. 151379. January 14, 2005]
UNIVERSITY OF IMMACULATE, CONCEPCION, INC., vs. THE HONORABLE
SECRETARY OF LABOR, THE UIC TEACHING AND NON-TEACHING PERSONNEL AND
EMPLOYEES UNION, LELIAN CONCON, MARY ANN DE RAMOS, JOVITA MAMBURAM,
ANGELINA ABADILLA, MELANIE DE LA ROSA, ZENAIDA CANOY, ALMA VILLACARLOS,
JOSIE BOSTON, PAULINA PALMA GIL, GEMMA GALOPE, LEAH CRUZA, DELFA
DIAPUEZ
DECISION
AZCUNA, J.:
This is a petition for review of a decision of the Court of Appeals and the
resolution denying reconsideration thereof. The principal issue to be resolved in this
recourse is whether or not the Secretary of Labor, after assuming jurisdiction over a
labor dispute involving an employer and the certified bargaining agent of a group of
employees in the workplace, may legally order said employer to reinstate employees
terminated by the employer even if those terminated employees are not part of the
bargaining unit.
This case stemmed from the collective bargaining negotiations between
petitioner University of Immaculate Concepcion, Inc. (UNIVERSITY) and respondent
The UIC Teaching and Non-Teaching Personnel and Employees Union (UNION). The
UNION, as the certified bargaining agent of all rank and file employees of the
UNIVERSITY, submitted its collective bargaining proposals to the latter on February
16, 1994. However, one item was left unresolved and this was the inclusion or
exclusion of the following positions in the scope of the bargaining unit:
a. Secretaries
b. Registrars
c. Accounting Personnel
d. Guidance Counselors [1]
This matter was submitted for voluntary arbitration. On November 8, 1994,
the panel of voluntary arbitrators rendered a decision, the dispositive portion of
which states:
WHEREFORE, premises considered, the Panel hereby resolves to exclude
the above-mentioned secretaries, registrars, chief of the accounting department,
cashiers and guidance counselors from the coverage of the bargaining unit. The
accounting clerks and the accounting staff member are hereby ordered included in
the bargaining unit.[2]
The UNION moved for the reconsideration of the above decision. Pending,
however, the resolution of its motion, on December 9, 1994, it filed a notice of
strike with the National Conciliation and Mediation Board (NCMB) of Davao City, on
the grounds of bargaining deadlock and unfair labor practice. During the thirty (30)
day cooling-off period, two union members were dismissed by petitioner.
Consequently, the UNION went on strike on January 20, 1995.
On January 23, 1995, the then Secretary of Labor, Ma. Nieves R. Confessor,
issued an Order assuming jurisdiction over the labor dispute. The dispositive portion
of the said Order states:
WHEREFORE, ABOVE PREMISES CONSIDERED, and pursuant to Article 263
(g) of the Labor Code, as amended, this Office hereby assumes jurisdiction over the
entire labor dispute at the University of the Immaculate Concepcion College.
Accordingly, all workers are directed to return to work within twenty-four (24) hours
upon receipt of this Order and for Management to accept them back under the same
terms and conditions prevailing prior to the strike.
Parties are further directed to cease and desist from committing any or all
acts that might exacerbate the situation.

Finally, the parties are hereby directed to submit their respective position
papers within ten (10) days from receipt hereof.
SO ORDERED.[3]
On February 8, 1995, the panel of voluntary arbitrators denied the motion
for reconsideration filed by the UNION. The UNIVERSITY then furnished copies of
the panels denial of the motion for reconsideration and the Decision dated
November 8, 1995 to the individual respondents herein:
1. Lelian Concon Grade School Guidance Counselor
2. Mary Ann de Ramos High School Guidance Counselor
3. Jovita Mamburam Secretary to [the] Vice President for Academic Affairs/
Dean of College
4. Angelina Abadilla Secretary to [the] Vice President for Academic Affairs/
Dean of College
5. Melanie de la Rosa Secretary to [the] Dean of [the] College of
Pharmacy/ Academic Affairs/ Dean of College
6. Zenaida Canoy Secretary to [the] Vice President for Academic Affairs/
Dean of College
7. Alma Villacarlos Guidance Counselor (College)
8. Josie Boston Grade School Psychometrician
9. Paulina Palma Gil Cashier
10. Gemma Galope High School Registrar
11. Leah Cruza Guidance Counselor (College)
12. Delfa Diapuez High School Psychometrician [4]
Thereafter, the UNIVERSITY gave the abovementioned individual
respondents two choices: to resign from the UNION and remain employed as
confidential employees or resign from their confidential positions and remain
members of the UNION. The UNIVERSITY relayed to these employees that they
could not remain as confidential employees and at the same time as members or
officers of the Union. However, the individual respondents remained steadfast in
their claim that they could still retain their confidential positions while being
members or officers of the Union. Hence, on February 21, 1995, the UNIVERSITY
sent notices of termination to the individual respondents.
On March 10, 1995, the UNION filed another notice of strike, this time
citing as a reason the UNIVERSITYs termination of the individual respondents. The
UNION alleged that the UNIVERSITYs act of terminating the individual respondents
is in violation of the Order of the Secretary of Labor dated January 23, 1995.
On March 28, 1995, the Secretary of Labor issued another Order reiterating the
directives contained in the January 23, 1995 Order. The Secretary also stated
therein that the effects of the termination from employment of these individual
respondents be suspended pending the determination of the legality thereof. Hence,
the UNIVERSITY was directed to reinstate the individual respondents under the
same terms and conditions prevailing prior to the labor dispute.
The UNIVERSITY, thereafter, moved to reconsider the aforesaid Order on
March 28, 1995. It argued that the Secretarys Order directing the reinstatement of
the individual respondents would render nugatory the decision of the panel of
voluntary arbitrators to exclude them from the collective bargaining unit. The
UNIVERSITYs motion was denied by the Secretary in an Order dated June 16, 1995,
wherein the Secretary declared that the decision of the panel of voluntary
arbitrators to exclude the individual respondents from the collective bargaining unit
did not authorize the UNIVERSITY to terminate their employment. The UNIVERSITY
filed a second motion for reconsideration, which was again denied in an Order dated
July 19, 1995. Undeterred, the UNIVERSITY filed a third motion for reconsideration.
In the Order dated August 18, 1995, then Acting Secretary Jose S. Brilliantes denied
the third motion for reconsideration, but modified the two previous Orders by
adding:

xxx

Anent the Unions Motion, we find that superseding circumstances would

not warrant the physical reinstatement of the twelve (12) terminated employees.
Hence, they are hereby ordered placed under payroll reinstatement until the validity
of their termination is finally resolved.[5]
xxx
Still unsatisfied with the Order of the Secretary of Labor, the UNIVERSITY
filed a petition for certiorari with this Court on September 15, 1995. However, its
petition was referred to the Court of Appeals, following the ruling in St. Martin
Funeral Homes v. Court of Appeals. [6]
On October 8, 2001, the Court of Appeals promulgated its Decision,
affirming the questioned Orders of the Secretary of Labor. The dispositive portion of
the Decision states:
WHEREFORE, the instant petition is DISMISSED for lack of merit.[7]
The UNIVERSITY then moved for the reconsideration of the
abovementioned Decision,[8] but on January 10, 2002, the Court of Appeals denied
the motion on the ground that no new matters were raised therein that would
warrant a reconsideration.[9]
Hence, this petition.
The UNIVERSITY assigns the following error:
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING
THE ORDERS OF THE SECRETARY OF LABOR THAT SUSPENDED THE EFFECTS OF
THE TERMINATION OF TWELVE EMPLOYEES WHO WERE NOT PART OF THE
BARGAINING UNIT INVOLVED IN A LABOR DISPUTE OVER WHICH THE SECRETARY
OF LABOR ASSUMED JURISDICTION.[10]
The Court of Appeals relied upon the doctrine in St. Scholasticas College v.
Torres.[11] In the case therein, this Court, citing International Pharmaceuticals
Incorporated v. the Secretary of Labor,[12] declared that:
x x x [T]he Secretary was explicitly granted by Article 263(g) of the Labor Code the
authority to assume jurisdiction over a labor dispute causing or likely to cause a
strike or lockout in an industry indispensable to the national interest, and decide the
same accordingly. Necessarily, the authority to assume jurisdiction over the said
labor dispute must include and extend to all questions and controversies arising
therefrom, including cases over which the Labor Arbiter has exclusive jurisdiction.
The UNIVERSITY contends that the Secretary cannot take cognizance of an
issue involving employees who are not part of the bargaining unit. It insists that
since the individual respondents had already been excluded from the bargaining unit
by a final and executory order by the panel of voluntary arbitrators, then they
cannot be covered by the Secretarys assumption order.
This Court finds no merit in the UNIVERSITYs contention. In Metrolab
Industries, Inc. v. Roldan-Confessor,[13] this Court declared that it recognizes the
exercise of management prerogatives and it often declines to interfere with the
legitimate business decisions of the employer. This is in keeping with the general
principle embodied in Article XIII, Section 3 of the Constitution, [14] which is further
echoed in Article 211 of the Labor Code. [15] However, as expressed in PAL v.
National Labor Relations Commission,[16] this privilege is not absolute, but subject to
exceptions. One of these exceptions is when the Secretary of Labor assumes
jurisdiction over labor disputes involving industries indispensable to the national
interest under Article 263(g) of the Labor Code. This provision states:
(g) When, in his opinion, there exists a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to the national interest, the
Secretary of Labor and Employment may assume jurisdiction over the dispute and
decide it or certify the same to the Commission for compulsory arbitration. Such
assumption or certification shall have the effect of automatically enjoining the
intended or impending strike or lockout as specified in the assumption or

certification order. If one has already taken place at the time of assumption or
certification, all striking or locked out employees shall immediately return to work
and the employer shall immediately resume operations and readmit all workers
under the same terms and conditions prevailing before the strike or lockout. x x x
When the Secretary of Labor ordered the UNIVERSITY to suspend the
effect of the termination of the individual respondents, the Secretary did not exceed
her jurisdiction, nor did the Secretary gravely abuse the same. It must be pointed
out that one of the substantive evils which Article 263(g) of the Labor Code seeks to
curb is the exacerbation of a labor dispute to the further detriment of the national
interest. In her Order dated March 28, 1995, the Secretary of Labor rightly held:
It is well to remind both parties herein that the main reason or rationale for
the exercise of the Secretary of Labor and Employments power under Article 263(g)
of the Labor Code, as amended, is the maintenance and upholding of the status quo
while the dispute is being adjudicated. Hence, the directive to the parties to refrain
from performing acts that will exacerbate the situation is intended to ensure that
the dispute does not get out of hand, thereby negating the direct intervention of
this office.
The Universitys act of suspending and terminating union members and the
Unions act of filing another Notice of Strike after this Office has assumed jurisdiction
are certainly in conflict with the status quo ante. By any standards[,] these acts will
not in any way help in the early resolution of the labor dispute. It is clear that the
actions of both parties merely served to complicate and aggravate the already
strained labor-management relations.[17]
Indeed, it is clear that the act of the UNIVERSITY of dismissing the
individual respondents from their employment became the impetus for the UNION
to declare a second notice of strike. It is not a question anymore of whether or not
the terminated employees, the individual respondents herein, are part of the
bargaining unit. Any act committed during the pendency of the dispute that tends to
give rise to further contentious issues or increase the tensions between the parties
should be considered an act of exacerbation and should not be allowed.
With respect to the Secretarys Order allowing payroll reinstatement instead
of actual reinstatement for the individual respondents herein, an amendment to the
previous Orders issued by her office, the same is usually not allowed. Article 263(g)
of the Labor Code aforementioned states that all workers must immediately return
to work and all employers must readmit all of them under the same terms and
conditions prevailing before the strike or lockout. The phrase under the same terms
and conditions makes it clear that the norm is actual reinstatement. This is
consistent with the idea that any work stoppage or slowdown in that particular
industry can be detrimental to the national interest.
In ordering payroll reinstatement in lieu of actual reinstatement, then
Acting Secretary of Labor Jose S. Brillantes said:
Anent the Unions Motion, we find that superseding circumstances would not warrant
the physical reinstatement of the twelve (12) terminated employees. Hence, they
are hereby ordered placed under payroll reinstatement until the validity of their
termination is finally resolved.[18]
As an exception to the rule, payroll reinstatement must rest on special
circumstances that render actual reinstatement impracticable or otherwise not
conducive to attaining the purposes of the law.[19]
The superseding circumstances mentioned by the Acting Secretary of Labor no
doubt refer to the final decision of the panel of arbitrators as to the confidential
nature of the positions of the twelve private respondents, thereby rendering their
actual and physical reinstatement impracticable and more likely to exacerbate the
situation. The payroll reinstatement in lieu of actual reinstatement ordered in these
cases, therefore, appears justified as an exception to the rule until the validity of
their termination is finally resolved. This Court sees no grave abuse of discretion on

the part of the Acting Secretary of Labor in ordering the same. Furthermore, the
issue has not been raised by any party in this case.
WHEREFORE, the Decision of the Court of Appeals dated October 8, 2001
and its Resolution dated January 10, 2002 in CA-G.R. SP No. 61693 are AFFIRMED.
No costs.
SO ORDERED.
E. Balancing of Interest
The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce their mutual compliance therewith
to foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the
right of enterprises to reasonable returns on investments, and to expansion and
growth.
STATE POLICIES
A.

Voluntary/Democratic Method of dispute settlement

Republic of the Philippines
Supreme Court
Manila
THIRD DIVISION
ESTATE OF NELSON R. DULAY, represented by his wife
MERRIDY JANE P. DULAY,
Petitioner,

G.R. No. 172642

Present:
PERALTA, J., Acting Chairperson,*
ABAD,
VILLARAMA, JR.,**
MENDOZA, and
PERLAS-BERNABE, JJ.

- versus

ABOITIZ JEBSEN MARITIME, INC. and GENERAL

CHARTERERS, INC.,
Respondents.

Promulgated:
June 13, 2012

x-----------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of
Court seeking to reverse and set aside the Decision [1] and Resolution[2] dated July
11, 2005 and April 18, 2006 of the Court of Appeals (CA) in CA-G.R. SP No. 76489.
The factual and procedural antecedents of the case, as summarized by the CA, are
as follows:

Nelson R. Dulay (Nelson, for brevity) was employed by [herein respondent] General
Charterers Inc. (GCI), a subsidiary of co-petitioner [herein co-respondent] Aboitiz
Jebsen Maritime Inc. since 1986. He initially worked as an ordinary seaman and
later as bosun on a contractual basis. From September 3, 1999 up to July 19, 2000,
Nelson was detailed in petitioners vessel, the MV Kickapoo Belle.
On August 13, 2000, or 25 days after the completion of his employment contract,
Nelson died due to acute renal failure secondary to septicemia. At the time of his
death, Nelson was a bona fide member of the Associated Marine Officers and
Seamans Union of the Philippines (AMOSUP), GCIs collective bargaining agent.
Nelsons widow, Merridy Jane, thereafter claimed for death benefits through the
grievance procedure of the Collective Bargaining Agreement (CBA) between
AMOSUP and GCI. However, on January 29, 2001, the grievance procedure was
declared deadlocked as petitioners refused to grant the benefits sought by the
widow.
On March 5, 2001, Merridy Jane filed a complaint with the NLRC Sub-Regional
Arbitration Board in General Santos City against GCI for death and medical benefits
and damages.
On March 8, 2001, Joven Mar, Nelsons brother, received P20,000.00 from
[respondents] pursuant to article 20(A)2 of the CBA and signed a Certification
acknowledging receipt of the amount and releasing AMOSUP from further liability.
Merridy Jane contended that she is entitled to the aggregate sum of Ninety
Thousand Dollars ($90,000.00) pursuant to [A]rticle 20 (A)1 of the CBA x x x
xxxx
Merridy Jane averred that the P20,000.00 already received by Joven Mar should be
considered advance payment of the total claim of US$90,000.[00].
[Herein respondents], on the other hand, asserted that the NLRC had no jurisdiction
over the action on account of the absence of employer-employee relationship
between GCI and Nelson at the time of the latters death. Nelson also had no claims
against petitioners for sick leave allowance/medical benefit by reason of the
completion of his contract with GCI. They further alleged that private respondent is
not entitled to death benefits because petitioners are only liable for such in case of
death of the seafarer during the term of his contract pursuant to the POEA contract
and the cause of his death is not work-related. Petitioners admitted liability only
with respect to article 20(A)2 [of the CBA]. x x x
xxxx
However, as petitioners stressed, the same was already discharged.
The Labor Arbiter ruled in favor of private respondent. It took cognizance of the
case by virtue of Article 217 (a), paragraph 6 of the Labor Code and the existence of
a reasonable causal connection between the employer-employee relationship and
the claim asserted. It ordered the petitioner to pay P4,621,300.00, the equivalent of
US$90,000.00 less P20,000.00, at the time of judgment x x x
xxxx
The Labor Arbiter also ruled that the proximate cause of Nelsons death was not
work-related.

On appeal, [the NLRC] affirmed the Labor Arbiters decision as to the grant of death
benefits under the CBA but reversed the latters ruling as to the proximate cause of
Nelsons death.[3]
Herein respondents then filed a special civil action for certiorari with the CA
contending that the NLRC committed grave abuse of discretion in affirming the
jurisdiction of the NLRC over the case; in ruling that a different provision of the CBA
covers the death claim; in reversing the findings of the Labor Arbiter that the cause
of death is not work-related; and, in setting aside the release and quitclaim
executed by the attorney-in-fact and not considering the P20,000.00 already
received by Merridy Jane through her attorney-in-fact.
On July 11, 2005, the CA promulgated its assailed Decision, the dispositive portion
of which reads as follows:
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED and the case
is REFERRED to the National Conciliation and Mediation Board for the designation of
the Voluntary Arbitrator or the constitution of a panel of Voluntary Arbitrators for
the appropriate resolution of the issue on the matter of the applicable CBA
provision.
SO ORDERED.[4]
The CA ruled that while the suit filed by Merridy Jane is a money claim, the same
basically involves the interpretation and application of the provisions in the subject
CBA. As such, jurisdiction belongs to the voluntary arbitrator and not the labor
arbiter.
Petitioner filed a Motion for Reconsideration but the CA denied it in its Resolution of
April 18, 2006.
Hence, the instant petition raising the sole issue of whether or not the CA
committed error in ruling that the Labor Arbiter has no jurisdiction over the case.
Petitioner contends that Section 10 of Republic Act (R.A.) 8042, otherwise known as
the Migrant Workers and Overseas Filipinos Act of 1995, vests jurisdiction on the
appropriate branches of the NLRC to entertain disputes regarding the interpretation
of a collective bargaining agreement involving migrant or overseas Filipino workers.
Petitioner argues that the abovementioned Section amended Article 217 (c) of the
Labor Code which, in turn, confers jurisdiction upon voluntary arbitrators over
interpretation or implementation of collective bargaining agreements and
interpretation or enforcement of company personnel policies.
The pertinent provisions of Section 10 of R.A. 8042 provide as follows:
SEC. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the
Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the
original and exclusive jurisdiction to hear and decide, within ninety (90) calendar
days after filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for

overseas deployment including claims for actual, moral, exemplary and other forms
of damages.
Article 217(c) of the Labor Code, on the other hand, states that:
xxxx
(c) Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company
personnel policies shall be disposed by the Labor Arbiter by referring the same to
the grievance machinery and voluntary arbitration as may be provided in said
agreements.
On their part, respondents insist that in the present case, Article 217, paragraph (c)
as well as Article 261 of the Labor Code remain to be the governing provisions of
law with respect to unresolved grievances arising from the interpretation and
implementation of collective bargaining agreements. Under these provisions of law,
jurisdiction remains with voluntary arbitrators.
Article 261 of the Labor Code reads, thus:
ARTICLE 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary
Arbitrators. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have
original and exclusive jurisdiction to hear and decide all unresolved grievances
arising from the interpretation or implementation of the Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company
personnel policies referred to in the immediately preceding article. Accordingly,
violations of a Collective Bargaining Agreement, except those which are gross in
character, shall no longer be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. For purposes of this article,
gross violations of Collective Bargaining Agreement shall mean flagrant and/or
malicious refusal to comply with the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional Directors of the Department
of Labor and Employment shall not entertain disputes, grievances or matters under
the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of
Voluntary Arbitrators and shall immediately dispose and refer the same to the
Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining
Agreement.
The petition is without merit.
It is true that R.A. 8042 is a special law governing overseas Filipino workers.
However, a careful reading of this special law would readily show that there is no
specific provision thereunder which provides for jurisdiction over disputes or
unresolved grievances regarding the interpretation or implementation of a
CBA. Section 10 of R.A. 8042, which is cited by petitioner, simply speaks, in general,
of claims arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for
actual, moral, exemplary and other forms of damages. On the other hand, Articles
217(c) and 261 of the Labor Code are very specific in stating that voluntary
arbitrators have jurisdiction over cases arising from the interpretation or
implementation of collective bargaining agreements. Stated differently, the instant
case involves a situation where the special statute (R.A. 8042) refers to a subject in
general, which the general statute (Labor Code) treats in particular.[5] In the present

case, the basic issue raised by Merridy Jane in her complaint filed with the NLRC is:
which provision of the subject CBA applies insofar as death benefits due to the heirs
of Nelson are concerned. The Court agrees with the CA in holding that this issue
clearly involves the interpretation or implementation of the said CBA. Thus, the
specific or special provisions of the Labor Code govern.
In any case, the Court agrees with petitioner's contention that the CBA is the law or
contract between the parties. Article 13.1 of the CBA entered into by and between
respondent GCI and AMOSUP, the union to which petitioner belongs, provides as
follows:
The Company and the Union agree that in case of dispute or conflict in the
interpretation or application of any of the provisions of this Agreement, or
enforcement of Company policies, the same shall be settled through
negotiation, conciliation or voluntary arbitration. The Company and the Union
further agree that they will use their best endeavor to ensure that any dispute will
be discussed, resolved and settled amicably by the parties hereof within ninety (90)
days from the date of filing of the dispute or conflict and in case of failure to settle
thereof any of the parties retain their freedom to take appropriate action.
[6]
(Emphasis supplied)
From the foregoing, it is clear that the parties, in the first place, really intended to
bring to conciliation or voluntary arbitration any dispute or conflict in the
interpretation or application of the provisions of their CBA. It is settled that when
the parties have validly agreed on a procedure for resolving grievances and to
submit a dispute to voluntary arbitration then that procedure should be strictly
observed.[7]
It may not be amiss to point out that the abovequoted provisions of the CBA are in
consonance with Rule VII, Section 7 of the present Omnibus Rules and Regulations
Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as amended
by Republic Act No. 10022, which states that [f]or OFWs with collective bargaining
agreements, the case shall be submitted for voluntary arbitration in accordance with
Articles 261 and 262 of the Labor Code. The Court notes that the said Omnibus
Rules and Regulations were promulgated by the Department of Labor and
Employment (DOLE) and the Department of Foreign Affairs (DFA) and that these
departments were mandated to consult with the Senate Committee on Labor and
Employment and the House of Representatives Committee on Overseas Workers
Affairs.
In the same manner, Section 29 of the prevailing Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on Board Ocean Going Vessels,
promulgated by the Philippine Overseas Employment Administration (POEA),
provides as follows:
Section 29. Dispute Settlement Procedures. In cases of claims and disputes
arising from this employment, the parties covered by a collective
bargaining agreement shall submit the claim or dispute to the original and
exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators. If
the parties are not covered by a collective bargaining agreement, the parties may at
their option submit the claim or dispute to either the original and exclusive
jurisdiction of the National Labor Relations Commission (NLRC), pursuant to
Republic Act (RA) 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995 or to the original and exclusive jurisdiction of the voluntary

arbitrator or panel of arbitrators. If there is no provision as to the voluntary

arbitrators to be appointed by the parties, the same shall be appointed from the
accredited voluntary arbitrators of the National Conciliation and Mediation Board of
the Department of Labor and Employment.

F.

It is clear from the above that the interpretation of the DOLE, in consultation with
their counterparts in the respective committees of the Senate and the House of
Representatives, as well as the DFA and the POEA is that with respect to disputes
involving claims of Filipino seafarers wherein the parties are covered by a collective
bargaining agreement, the dispute or claim should be submitted to the jurisdiction
of a voluntary arbitrator or panel of arbitrators. It is only in the absence of a
collective bargaining agreement that parties may opt to submit the dispute to either
the NLRC or to voluntary arbitration. It is elementary that rules and regulations
issued by administrative bodies to interpret the law which they are entrusted to
enforce, have the force of law, and are entitled to great respect. [8] Such rules and
regulations partake of the nature of a statute and are just as binding as if they have
been written in the statute itself.[9] In the instant case, the Court finds no cogent
reason to depart from this rule.
The above interpretation of the DOLE, DFA and POEA is also in consonance with the
policy of the state to promote voluntary arbitration as a mode of settling labor
disputes.[10]
No less than the Philippine Constitution provides, under the third paragraph, Section
3, Article XIII, thereof that [t]he State shall promote the principle of shared
responsibility between workers and employers and the preferential use of voluntary
modes in settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
Consistent with this constitutional provision, Article 211 of the Labor Code provides
the declared policy of the State [t]o promote and emphasize the primacy of free
collective bargaining and negotiations, including voluntary arbitration, mediation
and conciliation, as modes of settling labor or industrial disputes.
On the basis of the foregoing, the Court finds no error in the ruling of the CA that
the voluntary arbitrator has jurisdiction over the instant case.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 76489 dated July 11, 2005 and April 18, 2006,
respectively, are AFFIRMED.
SO ORDERED.
B.
C.
D.
E.

Trade Unionism/Trade Union Activities

Workers Enlightenment
Adequate Machinery for Expeditious Dispute Settlement
Industrial/Peace

in

Decision

and

Policy

Making

Processes

RIGHT TO SELF-ORGANIZATION
A.

The Philippine Overseas Employment Administration (POEA) shall exercise original

and exclusive jurisdiction to hear and decide disciplinary action on cases, which are
administrative in character, involving or arising out of violations of recruitment laws,
rules and regulations involving employers, principals, contracting partners and
Filipino seafarers. (Emphasis supplied)

Workers Participation
affecting Rights

Basis of Self-Organization
ILO Convention No. 87
PART I. FREEDOM OF ASSOCIATION
Article 1
Each Member of the International Labour Organisation for which
this Convention is in force undertakes to give effect to the following
provisions.

Article 2
Workers and employers, without distinction whatsoever, shall have the
right to establish and, subject only to the rules of the organisation concerned, to
join organisations of their own choosing without previous authorisation.
Article 3
1. Workers' and employers' organisations shall have the right to draw up
their constitutions and rules, to elect their representatives in full freedom, to
organise their administration and activities and to formulate their programmes.
2. The public authorities shall refrain from any interference which would
restrict this right or impede the lawful exercise thereof.
Article 4
Workers' and employers' organisations shall not be liable to be dissolved or
suspended by administrative authority.
Article 5
Workers' and employers' organisations shall have the right to establish and
join federations and confederations and any such organisation, federation or
confederation shall have the right to affiliate with international organisations of
workers and employers.
Article 6
The provisions of Articles 2, 3 and 4 hereof apply to federations and
confederations of workers' and employers' organisations.
Article 7
The acquisition of legal personality by workers' and employers'
organisations, federations and confederations shall not be made subject to
conditions of such a character as to restrict the application of the provisions of
Articles 2, 3 and 4 hereof.
Article 8
1. In exercising the rights provided for in this Convention workers and
employers and their respective organisations, like other persons or organised
collectivities, shall respect the law of the land.
2. The law of the land shall not be such as to impair, nor shall it be so
applied as to impair, the guarantees provided for in this Convention.
Article 9
1. The extent to which the guarantees provided for in this Convention shall
apply to the armed forces and the police shall be determined by national laws or
regulations.
2. In accordance with the principle set forth in paragraph 8 of Article 19 of
the Constitution of the International Labour Organisation the ratification of this
Convention by any Member shall not be deemed to affect any existing law, award,

custom or agreement in virtue of which members of the armed forces or the police
enjoy any right guaranteed by this Convention.
Article 10
In this Convention the term organisation means any organisation of
workers or of employers for furthering and defending the interests of workers or of
employers.
PART II. PROTECTION OF THE RIGHT TO ORGANISE
Article 11
Each Member of the International Labour Organisation for which this
Convention is in force undertakes to take all necessary and appropriate measures to
ensure that workers and employers may exercise freely the right to organise.

ILO Convention No. 98

Article 1
1. Workers shall enjoy adequate protection against acts of anti-union
discrimination in respect of their employment.
2. Such protection shall apply more particularly in respect of acts
calculated to-(a) make the employment of a worker subject to the condition that he shall
not join a union or shall relinquish trade union membership;
(b) cause the dismissal of or otherwise prejudice a worker by reason of
union membership or because of participation in union activities outside working
hours or, with the consent of the employer, within working hours.
Article 2
1. Workers' and employers' organisations shall enjoy adequate protection
against any acts of interference by each other or each other's agents or members in
their establishment, functioning or administration.
2. In particular, acts which are designed to promote the establishment of
workers' organisations under the domination of employers or employers'
organisations, or to support workers' organisations by financial or other means, with
the object of placing such organisations under the control of employers or
employers' organisations, shall be deemed to constitute acts of interference within
the meaning of this Article.
Article 3
Machinery appropriate to national conditions shall be established, where
necessary, for the purpose of ensuring respect for the right to organise as defined in
the preceding Articles.
Article 4
Measures appropriate to national conditions shall be taken, where
necessary, to encourage and promote the full development and utilisation of
machinery for voluntary negotiation between employers or employers' organisations
and workers' organisations, with a view to the regulation of terms and conditions of
employment by means of collective agreements.
Article 5
1. The extent to which the guarantees provided for in this Convention shall
apply to the armed forces and the police shall be determined by national laws or
regulations.
2. In accordance with the principle set forth in paragraph 8 of Article 19 of
the Constitution of the International Labour Organisation the ratification of this
Convention by any Member shall not be deemed to affect any existing law, award,
custom or agreement in virtue of which members of the armed forces or the police
enjoy any right guaranteed by this Convention.
Article 6

This Convention does not deal with the position of public servants engaged
in the administration of the State, nor shall it be construed as prejudicing their
rights or status in any way.
Article 7
The formal ratifications of this Convention shall be communicated to the
Director-General of the International Labour Office for registration.
Article 8
1. This Convention shall be binding only upon those Members of the
International Labour Organisation whose ratifications have been registered with the
Director-General.
2. It shall come into force twelve months after the date on which the
ratifications of two Members have been registered with the Director-General.
3. Thereafter, this Convention shall come into force for any Member twelve
months after the date on which its ratification has been registered.
Article 9
1. Declarations communicated to the Director-General of the International
Labour Office in accordance with paragraph 2 of Article 35 of the Constitution of the
International Labour Organisation shall indicate -(a) the territories in respect of which the Member concerned undertakes
that the provisions of the Convention shall be applied without modification;
(b) the territories in respect of which it undertakes that the provisions of
the Convention shall be applied subject to modifications, together with details of the
said modifications;
(c) the territories in respect of which the Convention is inapplicable and in
such cases the grounds on which it is inapplicable;
(d) the territories in respect of which it reserves its decision pending
further consideration of the position.
2. The undertakings referred to in subparagraphs (a) and (b) of paragraph
1 of this Article shall be deemed to be an integral part of the ratification and shall
have the force of ratification.
3. Any Member may at any time by a subsequent declaration cancel in
whole or in part any reservation made in its original declaration in virtue of
subparagraph (b), (c) or (d) of paragraph 1 of this Article.
4. Any Member may, at any time at which the Convention is subject to
denunciation in accordance with the provisions of Article 11, communicate to the
Director-General a declaration modifying in any other respect the terms of any
former declaration and stating the present position in respect of such territories as it
may specify.
Article 10
1. Declarations communicated to the Director-General of the International
Labour Office in accordance with paragraph 4 or 5 of Article 35 of the Constitution of
the International Labour Organisation shall indicate whether the provisions of the
Convention will be applied in the territory concerned without modification or subject
to modifications; when the declaration indicates that the provisions of the
Convention will be applied subject to modifications, it shall give details of the said
modifications.
2. The Member, Members or international authority concerned may at any
time by a subsequent declaration renounce in whole or in part the right to have
recourse to any modification indicated in any former declaration.
3. The Member, Members or international authority concerned may, at any
time at which this Convention is subject to denunciation in accordance with the
provisions of Article 11, communicate to the Director-General a declaration
modifying in any other respect the terms of any former declaration and stating the
present position in respect of the application of the Convention.
Article 11

1. A Member which has ratified this Convention may denounce it after the
expiration of ten years from the date on which the Convention first comes into
force, by an act communicated to the Director-General of the International Labour
Office for registration. Such denunciation shall not take effect until one year after
the date on which it is registered.
2. Each Member which has ratified this Convention and which does not,
within the year following the expiration of the period of ten years mentioned in the
preceding paragraph, exercise the right of denunciation provided for in this Article,
will be bound for another period of ten years and, thereafter, may denounce this
Convention at the expiration of each period of ten years under the terms provided
for in this Article.
Article 12
1. The Director-General of the International Labour Office shall notify all
Members of the International Labour Organisation of the registration of all
ratifications, declarations and denunciations communicated to him by the Members
of the Organisation.
2. When notifying the Members of the Organisation of the registration of
the second ratification communicated to him, the Director-General shall draw the
attention of the Members of the Organisation to the date upon which the Convention
will come into force.
Article 13
The Director-General of the International Labour Office shall communicate
to the Secretary-General of the United Nations for registration in accordance with
Article 102 of the Charter of the United Nations full particulars of all ratifications,
declarations and acts of denunciation registered by him in accordance with the
provisions of the preceding articles.
Article 14
At such times as it may consider necessary the Governing Body of the
International Labour Office shall present to the General Conference a report on the
working of this Convention and shall examine the desirability of placing on the
agenda of the Conference the question of its revision in whole or in part.
Article 15
1. Should the Conference adopt a new Convention revising this Convention
in whole or in part, then, unless the new Convention otherwise provides,
(a) the ratification by a Member of the new revising Convention shall ipso
jure involve the immediate denunciation of this Convention, notwithstanding the
provisions of Article 11 above, if and when the new revising Convention shall have
come into force;
(b) as from the date when the new revising Convention comes into force,
this Convention shall cease to be open to ratification by the Members.
2. This Convention shall in any case remain in force in its actual form and
content for those Members which have ratified it but have not ratified the revising
Convention.
Article 16
The English and French versions of the text of this Convention are equally
authoritative.

US Law
NLRC Act (Wagner Act)
Wagner Act, officially National Labor Relations Act (1935), single
most-important piece of labour legislation enacted in the United States in the 20th
century. Its main purpose was to establish the legal right of most workers (notably

excepting agricultural and domestic workers) to organize or join labour unions and
to bargain collectively with their employers.
Sponsored by Democratic Sen. Robert F. Wagner of New York, the Wagner
Act established the federal government as the regulator and ultimate arbiter
of labour relations. It set up a permanent three-member (later fivemember) National Labor Relations Board (NLRB) with the power to hear and resolve
labour disputes through quasi-judicial proceedings. Specifically, the NLRB was
empowered to decide, when petitioned by employees, if an appropriate bargaining
unit of employees existed for collective bargaining; to conduct secret-ballot
elections in which the employees in a business or industry could decide whether to
be represented by labour unions; and to prevent or correct unfair labour practices
by employers (later also by unions). The act prohibited employers from engaging in
such unfair labour practices as setting up a company union and firing or otherwise
discriminating against workers who organized or joined unions. The act also barred
employers from refusing to bargain with any such union that had been certified by
the NLRB as being the choice of a majority of employees. Fiercely opposed by
Republicans and big business, the Wagner Act was challenged in court as a violation
of the freedom of contract of employers and employees and as an unconstitutional
intrusion by the federal government in industries that were not directly engaged
in interstate commerce, which Congress was empowered to regulate under
the commerce clause (Article I, section 8). The U.S. Supreme Courteventually
upheld (54) the constitutionality of the Wagner Act in National Labor Relations
Board v.Jones & Laughlin Steel Corp. (1937).
The Wagner Act was significantly weakened by the Taft-Hartley Act of
1947, passed by a Republican-controlled Congress over the veto of Democratic
Pres. Harry S. Truman. The Taft-Hartley Act prohibited the closed shop (an
arrangement that makes union membership a condition of employment), allowed
states to prohibit the agency shop (an arrangement that requires employees who
are not union members to pay fees to a union to cover the costs of its bargaining on
their behalf), narrowed the definition of unfair labour practices, and specified unfair
union practices, among other provisions. Following adoption of the Taft-Hartley Act,
a number of states enacted so-called right to work laws, which banned both
closed and agency shops. The Wagner Act was further amended by the LandrumGriffin Act (1959), which banned secondary boycotts and limited the right to picket.
-

US Labor Management Relations Act of 1947 (Taft-Harley Act)

TaftHartley Act, formally LaborManagement Relations Act, (1947),

in U.S. history, lawenacted over the veto of Pres. Harry S. Trumanamending
much of the pro-union Wagner Act of 1935. A variety of factors, including the fear of
Communist infiltration of labour unions, the tremendous growth in both membership
and power of unions, and a series of large-scale strikes, contributed to an anti-union
climate in the United States after World War II. Republican majorities in both houses
of Congressthe first since 1930sought to remedy the union abuses seen as
permitted under the Wagner Act.
The LaborManagement Relations Act of 1947, sponsored by Sen. Robert
A. Taft (Ohio) and Rep. Fred A. Hartley, Jr. (New Jersey), while preserving the rights
of labour to organize and to bargain collectively, additionally guaranteed employees
the right not to join unions (outlawing the closed shop); permitted union shops only
where state law allowed and where a majority of workers voted for them; required
unions to give 60 days advance notification of a strike; authorized 80-day federal
injunctions when a strike threatened to imperil national health or safety; narrowed
the definition of unfair labour practices; specified unfair union practices; restricted
union political contributions; and required union officers to deny under oath any
Communist affiliations.

The LandrumGriffin Act of 1959 set further union restrictions, barring

secondary boycotts and limiting the right to picket.
Philippine Sources
a. 1987 Constitution
ARTICLE II.
SECTION 18. The State affirms labor as a primary social economic
force. It shall protect the rights of workers and promote their welfare.
ARTICLE III.
SECTION 4. No law shall be passed abridging the freedom of
speech, of expression, or of the press, or the right of the people peaceably to
assemble and petition the government for redress of grievances.
SECTION 8. 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.
ARTICLE XIII.
SECTION 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and equality of
employment opportunities for all.
ARTICLE IX.
SECTION 2. 5) The right to self-organization shall not be denied to
government employees.
1935 Constitution
ARTICLE III.
SECTION 1. (6) The right to form associations or societies for
purposes not contrary to law shall not be abridged.
(8) No law shall be passed abridging the freedom of speech, or of
the press, or the right of the people peaceably to assemble and petition the
Government for redress of grievances
1935 Constitution
ARTICLE IV.
SEC. 7. The right to form associations or societies for purposes
not contrary to law shall not be abridged.
SEC. 9. No law shall be passed abridging the freedom of speech,
or of the press, or the right of the people peaceably to assemble and
petition the Government for redress of grievances.
SECOND DIVISION
[G.R. No. 116066. January 24, 2000]
NUEVA ECIJA I ELECTRIC COOPERATIVE, INC., (NEECO I) EMPLOYEES
ASSOCIATION, PRESIDENT RODOLFO JIMENEZ, and members, REYNALDO
FAJARDO, ERNESTO MARIN, EVER GUEVARRA, PETRONILO BAGUISA,
VICTORINO CARILLO, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, NUEVA ECIJA I ELECTRIC COOPERATIVE, INC., (NEECO I)
and PATRICIO DELA PEA, respondents. Juri-ssc
DECISION
QUISUMBING, J.:
Petitioners assail the decision [1] of the National Labor Relations Commission
in NLRC RAB-III-03-2673-92, which modified the ruling of the Labor Arbiter, by
deleting the award of moral and exemplary damages, as well as attorneys fees and
costs of litigation.
The facts, as found a quo, are as follows:

Petitioners Reynaldo Fajardo, Ernesto Marin, Ever Guevarra, Petronilo Baguisa,

Victorino Carillo, and Erdie Javate were permanent employees of respondent Nueva
Ecija I Electric Cooperative (NEECO I). They were members of petitioner NEECO I
Employees Association, a labor organization established for the mutual aid and
protection of its members. Petitioner Rodolfo Jimenez was the president of the
association.
Respondent NEECO I is an electric cooperative under the general
supervision and control of the National Electrification Administration (NEA). The
management of NEECO I is vested on the Board of Directors. Respondent Patricio
dela Pea was NEECOs general manager on detail from NEA.
On February 7, 1987, the Board of Directors adopted Policy No. 3-33,
which set the guidelines for NEECO Is retirement benefits. On October 28, 1987, all
regular employees were ordered by NEECO I to accomplish Form 87, which were
applications for either retirement, resignation, or separation from service.
On October 5, 1991 and February 28, 1992, the applications of Petronilo
Baguisa and Ever Guevarra, respectively, were approved. They were paid the
appropriate separation pay.
These successive events, followed by the promotion of certain union
officers to supervisory rank, caused apprehension in the labor association. They
were considered as harassment threatening the union members, and circumventing
the employees security of tenure. On February 29, 1992, to strengthen and
neutralize managements arbitrary moves, the union held a "snap election" of
officers.[2] Reynaldo Fajardo was elected Treasurer, while Evaristo Guevarra,
Victorino Carillo and Ernesto Marin were elected Public Relations Officers for Jaen,
Gapan A and Gapan B, respectively.
On March 3, 1992, petitioner labor association passed a resolution
withdrawing the applications for retirement of all its members, thus:
"Upon popular request of all members and officers of the association their
manifestation of willingness to retire on optional basis is hereby WITHDRAWN by the
ASSOCIATION for and in behalf of all its members, EXCEPT those who are willing to
avail their retirement benefits with all their hearts and mind. To avoid what had
happened to EVARISTO GUEVARRA. The union officers and its members, claimed
their right to be protected under the security of tenure clause under the Labor Code
of the Philippines. No employee shall be retired without his/her consent or approval
of the union.
On motion and duly seconded. Approved unanimously. Let copies of the
resolution be furnished NEECO I PS/AGM Patricio S. dela Pea, for his information
and appropriate action."[3] M-isjuris
On March 4, March 17, and April 7, 1992, petitioners Ernesto Marin,
Reynaldo Fajardo and Victorino Carillo were compulsorily retired by management.
They received their separation pay under protest on March 16, March 18, and April
15, 1992, respectively.
On August 21, 1991, Erdie Javate was terminated from employment
allegedly due to misappropriation of funds and dishonesty. He was not paid
separation or retirement benefits.
On March 29, 1992, petitioners and Erdie Javate instituted a complaint for
illegal dismissal and damages with the NLRC Regional Arbitration Branch in San
Fernando. They alleged they were purposely singled out for retirement from a listing
of employees who were made to submit retirement forms, even if they were not on
top of the list because they were union officers, past officers or active members of
the association. Further, petitioners claimed that their acceptance of the money
offered by NEECO I did not constitute estoppel nor waiver, since their acceptances
were with vehement objections and without prejudice to all their rights resulting
from an illegal dismissal.

process.

Additionally, Javate averred he was framed up and dismissed without due

On December 21, 1992, the labor arbiter decided the case as follows:
"WHEREFORE, in view of all the foregoing considerations, judgment is hereby
rendered, as follows:
1. Declaring respondents NEECO I and PS/AGM Engr. Patricio dela Pea
guilty of illegal dismissal and unfair labor practice act, as charged;
2. Ordering respondents to reinstate individual complainants Reynaldo
Fajardo, Ernesto Marin, Ever Guevarra, Petronilo Baguisa, Victorino Carillo, and
Erdie Javate of their former positions under the same terms and conditions of work
obtaining at the time of dismissal, without loss of seniority rights and other
privileges, either physically or in the payroll, at the option of the respondents, with
payment of full backwages, including all benefits and privileges that they should
have received if they were not illegally dismissed, computed as follows:
1. Reynaldo Fajardoa.) Backwages as of Dec. 31, 1992 P 36,306.55
b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1988 2,000.00
Total P 41,056.55
2. Ernesto Marin a.) Backwages as of Dec. 31, 1992 P 37,783.60
b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1988 2,000.00
Total P 42,533.60
3. Ever Guevarra a.) Backwages as of Dec. 31, 1992 P 37,783.60
b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1988 2,000.00
Total P 42,533.60
4. Petronilo Baguisa a.) Backwages as of Dec. 31, 1992 P 56,675.40
b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1988 2,000.00
Total P 61,425.40
5. Victorino Carillo a.) Backwages as of Dec. 31, 1992 P 32,162.78
b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1988 2,000.00
Total P 36, 912.78

6. Erdie Javate a.) Backwages as of Dec. 31, 1992 P 15,680.00

b.) Bonus 1,000.00
c.) Medical Allowance 1,000.00
d.) Clothing Allowance 750.00
e.) Hospitalization allowance since 1999 2,000.00
Total P 20,430.00
GRAND TOTAL P244,891.93
3. Ordering respondents to pay complainants moral damages in the
amount of P30,000.00 each or in the total amount of P180,000.00 and exemplary
damages in the amount of P120,000.00;
4. Ordering respondents to pay complainants their attorneys fees
equivalent to ten (10%) percent of their monetary claims in the sum
of P54,489.20; Acctmis
5. Ordering respondents to pay complainants their cost of litigation in the
amount of P30,000.00
SO ORDERED."[4]
Thereafter, herein private respondents elevated the case to respondent
NLRC. They filed their appeal on December 28, 1992, and posted a surety bond on
January 5, 1993, in the amount of two hundred forty-four thousand, eight hundred
ninety one pesos and ninety three centavos (P244,891.93). But herein petitioners
filed an omnibus motion to dismiss on the ground of late appeal, claiming that
insufficient bond was filed by NEECO I only on January 5, 1993. The bond excluded
the award of moral and exemplary damages, attorneys fees and costs of litigation.
Respondent NLRC denied the motion and instead gave due course to the appeal. On
July 16, 1993, the NLRC modified the decision, as follows:
"WHEREFORE, premises considered, the appealed Decision is modified by
deleting the awards of moral and exemplary damages, attorneys fees and cost of
litigation. The amounts of retirement benefits received by the individual
complainants are to be applied to the backwages that may be due to the herein
complainants. All other dispositions stand.
SO ORDERED."[5]
Meanwhile, on March 16, 1993, petitioners were reinstated by NEECO I
pending appeal.
On April 22, 1993, Erdie Javate withdrew his complaint and opted to
receive his retirement benefits amounting to forty-two thousand, one hundred
fourteen pesos and nine centavos (P42,114.09).
Herein petitioners filed a motion for reconsideration, which the NLRC
denied on August 31, 1993. Likewise, herein private respondents filed a motion for
reconsideration but the same was also denied on September 28, 1993.
Petitioners are now before us, via this special civil action under Rule 65 of
the Revised Rules of Court, raising three issues:
"I. WHETHER OR NOT THE APPEAL TAKEN BY THE RESPONDENT NEECO I
FROM THE DECISION OF NLRC-RAB-III DOLE TO NLRC THIRD DIVISION, MANILA,
WAS NOT PERFECTED WITHIN THE TEN (10) CALENDAR DAYS REGLEMENTARY
PERIOD; HENCE THE APPEAL SHOULD NOT BE GIVEN DUE COURSE; Misact
II. WHETHER OR NOT PUBLIC RESPONDENT NLRC ACTED WITHOUT OR IN
EXCESS OF JURISDICTION WHEN IT RESOLVED TO DELETE EN TOTO MORAL
DAMAGES, EXEMPLARY DAMAGES, ATTORNEYS FEES AND COSTS OF LITIGATION.
FACTUAL BASIS OF WHICH WERE ASCERTAINED BY THE HONORABLE LABOR
ARBITER BELOW;
III. WHETHER OR NOT THE ORDER TO APPLY AND DEDUCT RECEIVABLE
BACKWAGES FROM RECEIVED BENEFITS MAY BE REASONABLE BUT UNREALISTIC
AND ARBITRARY."

Petitioners contend that although respondent NEECO I filed its appeal on

December 28, 1992, such appeal was not completed for failure to file the necessary
supersedeas bond, during the period prescribed by law, or until January 4, 1993.
Hence, no appeal was perfected.
Indisputable is the legal doctrine that the appeal of a decision involving a monetary
award in labor cases may be perfected "only upon the posting of a cash or surety
bond."[6]
The Labor Code, as amended by Republic Act No. 6715, clearly provides:
"Art. 223. Appeal - Decisions, awards or orders of the Labor Arbiter are
final and executory unless appealed to the Commission by any or both parties within
ten (10) calendar days from receipt of such decisions, awards, or orders. . .
xxx
In case of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety bond issued
by a reputable bonding company duly accredited by the Commission in the amount
equivalent to the monetary award in the judgment appealed from.
xxx
Also, the perfection of an appeal within the reglementary period and in the
manner prescribed by law is jurisdictional, and noncompliance with such legal
requirement is fatal and effectively renders the judgment final and executory.
[7]
Sdjad
However, in a number of cases, [8] this Court relaxed the rule to resolve
controversies on the merits,[9] specifically, when there are special meritorious
circumstances and issues.[10] We relaxed the requirement of posting a supersedeas
bond for the perfection of an appeal, when there was substantial compliance with
the rule, so that on balance, we made technical considerations to give way to equity
and justice.[11]
In the case before us, the decision of the labor arbiter was issued on
December 21, 1992. Private respondents filed their appeal on December 28, 1992,
barely seven days from receipt thereof. The bonding company issued the bond
dated January 4, 1993, the last day for filing an appeal. However, it was forwarded
to respondent NLRC only on the following day, January 5, 1993. Considering these
circumstances and the holiday season, we find it equitable to ease the rules and
consider that there was substantial compliance with the requirements of the law.
As to the amount of bond, we note that there had been changes in the
Rules promulgated by the NLRC. Previously the computation of the cash or surety
bond to be posted by an employer who wishes to appeal contained in the original
rules was "exclusive of moral and exemplary damages and attorneys fees." [12] It was
later deleted sometime in 1991 and 1992, then restored on November 20, 1993. [13]
It may be noted that while respondent NLRC in its Resolution No. 11-01-91
dated November 7, 1991 deleted the phrase "exclusive of moral and exemplary
damages as well as attorneys fees" in the determination of the amount of the bond,
it provided a safeguard against the imposition of excessive bonds providing "(T)he
Commission may, in meritorious cases and upon Motion of the Appellant, reduce the
amount of the bond."[14] Sppedsc
In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, we ruled:
"In the case at bar, the backwages and thirteenth month pay awarded to petitioner
amounted only to P270,000.00, but the moral and exemplary damages, plus 10%
attorneys fees, totalledP2,497,000.00. In other words, the moral and exemplary
damages and attorneys fees are almost ten (10) times greater than the basic
monetary judgment. Private respondents posted a supersedeas bond
of P270,000.00, obviously, on the honest belief that the amount was sufficient. At
the very least, therefore, there was substantial compliance with the requirement of
appeal bond. For to rule otherwise would negate the interest of justice and deviate

from the mandate of the Labor Code that the rules of procedure should be liberally
construed, . . .
xxx
Since private respondents filed a bond which they honestly believed
sufficient for purposes of their appeal, respondent NLRC should have called their
attention that the bond was inadequate, which it did not." [15]
The unreasonable and excessive amount of bond would be oppressive and unjust
and would have the effect of depriving a party of his right to appeal. Besides,
private respondents stress that the petitioners were paid their retirement
benefits[16] and that the cooperative has sufficient assets from which the other
claims for damages and attorneys fees may be obtained.
We come next to the issue of the propriety of the award of moral and
exemplary damages.
To warrant an award of moral damages, it must be shown that the
dismissal of the employee was attended to by bad faith, or constituted an act
oppressive to labor, or was done in a manner contrary to morals, good customs or
public policy.[17] The Labor Arbiter ruled that there was unfair labor practice:
"As a backdrop, complainants alleged, and this is supported by
documentary evidence, that on 7 February 1987, the then NEECO I Board of
Directors adopted their own Policy No. 3-33 under Resolution No. 47, series of 1987
requiring all employees to avail of the retirement benefits. All regular employees,
including the complainants were ordered to file their application for
retirement/resignation and/or separation from the service under NEECO I Form 87.
All NEECO I employees have no choice but to manifest their willingness to
retire. Ca-lrsc
However, the complainants pointed out that the approval of the employees
application for retirement was not done in succession according to the list, but
according to the choice of the respondents, and for which, complainants were
singled out from the list because they were union officers, past officers and active
members of the complainant Association."[18]
xxx
"Clearly, therefore, complainants have established the fact that they were
illegally dismissed by the respondents and their illegal dismissal was even tainted
with unfair labor practice act. ..."[19]
Unfair labor practices violate the constitutional rights of workers and
employees to self-organization, are inimical to the legitimate interests of both labor
and management, including their right to bargain collectively and otherwise deal
with each other in an atmosphere of freedom and mutual respect; and disrupt
industrial peace and hinder the promotion of healthy and stable labor-management
relations.[20] As the conscience of the government, it is the Courts sworn duty to
ensure that none trifles with labor rights.[21]
For this reason, we find it proper in this case to impose moral and
exemplary damages on private respondent. However, the damages awarded by the
labor arbiter, to our mind, are excessive. In determining the amount of damages
recoverable, the business, social and financial position of the offended parties and
the business and financial position of the offender are taken into account. [22] It is our
view that herein private respondents had not fully acted in good faith. However, we
are cognizant that a cooperative promotes the welfare of its own members. The
economic benefits filter to the cooperative members. Either equally or
proportionally, they are distributed among members in correlation with the
resources of the association utilized. Cooperatives help promote economic
democracy and support community development. Under these circumstances, we
deem it proper to reduce moral damages to only P10,000.00 payable by private
respondent NEECO I to each individual petitioner. We also deem it sufficient for
private respondent NEECO I to pay each individual petitioner P5,000.00 to answer

for exemplary damages, based on the provisions of Articles 2229 and 2232 of the
Civil Code.[23] Scc-alr
Having been illegally dismissed, individual petitioners are entitled to
reinstatement from the time they were illegally dismissed, until they were
reinstated on March 16, 1993. For that period they are likewise entitled to
backwages minus the amount petitioners were forced to receive as "retirement"
pay.[24] It must be noted that the backwages computed by the labor arbiter covered
only until December 22, 1992 but did not include backwages from January 1, 1993
to March 15, 1993,[25] which should now be computed and included for payment. In
the event that the amount of "retirement" pay received by an individual petitioner
exceeds the amount of his backwages, then the excess should be deemed as
advances of salary which should be refundable until fully repaid by him.
WHEREFORE, the petition is PARTIALLY GRANTED. The assailed decision of
the NLRC is AFFIRMED with MODIFICATION. Private respondent Nueva Ecija 1
Electric Cooperative is hereby ORDERED through its executive officers:
1. to pay individual petitioners their full backwages from the time they
were illegally dismissed until the date of their reinstatement on March 13, 1992,
minus the amount they received as "retirement" pay. In the event that the
computed backwages of a concerned petitioner is less than the amount of so-called
"retirement" pay already received, the difference should be treated as advances
refundable from his salary until fully repaid;
2. to pay moral and exemplary damages in the amount of ten thousand
(P10,000.00) pesos and five thousand (P5,000.00) pesos, respectively, to each of
the petitioners who were illegally terminated and/or compulsorily retired;
3. to pay ten (10%) of the total amount due to petitioners as attorneys
fees; and
4. to pay the cost of suits.
Respondent NLRC is ORDERED to RECOMPUTE the total monetary benefits
awarded and due to the employees concerned in accordance with the decision and
to submit its compliance thereon within thirty (30) days from notice of this decision,
with copies furnished to the parties.
SO ORDERED.
b.

Labor Code

"Art. 249. Unfair labor practices of employers. It shall be unlawful for an

employer to commit any of the following unfair labor practices:
"(a) To interfere with, restrain or coerce employees in the exercise of their
right to self-organization;
"(b) To require as a condition for employment that a person or an
employee shall not join a labor organization or shall withdraw from one to which he
belongs;
"(c) To contract out services or functions being performed by union
members when such will interfere with, restrain or coerce employees in the exercise
of their right to self-organization;
"(d) To initiate, dominate, assist or otherwise interfere with the formation
or administration of any labor organization, including the giving of financial or other
support to it or its organizers or officers;
"(e) To discriminate in regard to hire or tenure of employment or any term
or condition of employment in order to encourage or discourage membership in any
labor organization. Nothing in this Code or in any other law shall prevent the parties
from requiring membership in a recognized collective bargaining agent as a
condition for employment, except of those employees who are already members of
another union at the time of the signing of the collective bargaining agreement.

Employees belonging to an appropriate collective bargaining unit who are not

members of the recognized collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other fees paid by members of the
recognized collective bargaining agent, if such non-union members accept the
benefits under the collective agreement: Provided, That the individual authorization
required under Article 242, paragraph (o) of this Code shall not apply to nonmembers of the recognized collective bargaining agent;
"(f) To dismiss, discharge, or otherwise prejudice or discriminate against
an employee for having given or being about to give testimony under this Code;
"(g) To violate the duty to bargain collectively as prescribed by this Code;
"(h) To pay negotiation or attorney's fees to the union or its officers or
agents as part of the settlement of any issue in collective bargaining or any other
dispute; or
"(i) To violate a collective bargaining agreement.
"The provisions of the preceding paragraph notwithstanding, only the
officers and agents of corporations, associations or partnerships who have actually
participated in, authorized or ratified unfair labor practices shall be held criminally
liable."
Sec. 7. Article 250 of the Labor Code, as amended, is further amended by deleting
paragraph (f) and renumbering paragraph (g) thereof as paragraph (f), as follows:
"Art. 250. Unfair labor practices of labor organizations. It shall be unlawful for a
labor organization, its officers, agents or representatives to commit any of the
following unfair labor practices:
"(a) To restrain or coerce employees in the exercise of their right to selforganization: Provided, That the labor organization shall have the right to prescribe
its own rules with respect to the acquisition or retention of membership;
"(b) To cause or attempt to cause an employer to discriminate against an
employee, including discrimination against an employee with respect to whom
membership in such organization has been denied or terminated on any ground
other than the usual terms and conditions under which membership or continuation
of membership is made available to other members;
"(c) To violate the duty, or refuse to bargain collectively with the employer,
provided that it is the representative of the employees;
"(d) To cause or attempt to cause an employer to pay or deliver or agree
to pay or deliver any money or other things of value, in the nature of an exaction,
for services which are not performed or not to be performed, including the demand
for a fee for union negotiations;
"(e) To ask for or accept negotiation or attorney's fees from employers as
part of the settlement of any issue in collective bargaining or any other dispute; or
"(f) To violate a collective bargaining agreement.
"The provisions of the preceding paragraph notwithstanding, only the
officers, members of governing boards, representatives or agents or members of
labor associations or organizations who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable."
c.

Pre Labor Code

COMMONWEALTH ACT NO. 103

AN ACT TO AFFORD PROTECTION OF LABOR BY CREATING A COURT OF

INDUSTRIAL RELATIONS EMPOWERED TO FIX MINIMUM WAGES FOR LABORERS
AND MAXIMUM RENTALS TO BE PAID BY TENANTS, AND TO ENFORCE COMPULSORY
ARBITRATION BETWEEN EMPLOYEES OR LANDLORDS, AND EMPLOYEES OR
TENANTS, RESPECTIVELY; AND BY PRESCRIBING PENALTIES FOR THE VIOLATION
OF ITS ORDERS
CHAPTER I
Organization of the Court
SECTION 1. The Judge: his appointment, qualifications, compensation,
tenure. There is hereby created a Court of Industrial Relations, which shall have
jurisdiction over the entire Philippines, to consider, investigate, decide, and settle
any question, matter, controversy or dispute arising between, and/or affecting,
employers and employees or laborers, and landlords and tenants or farm-laborers,
and regulate the relations between them, subject to, and in accordance with, the
provisions of this Act. The Court shall keep a record of all its proceedings and shall
be presided over by-a Judge to be appointed by the President of the Philippines with
the consent of the Commission on Appointments of the National Assembly. The
Judge of the Court shall hold office during good behavior until he reaches the age of
seventy years,-or becomes incapacitated to discharge the duties of his office His
qualifications shall be the same as those provided in the Constitution for members
of the Supreme Court and he shall receive an annual compensation of ten thousand
pesos and shall be entitled to traveling expenses and per diems when performing
official duties outside of the City of Manila. The Department of Justice shall have
executive supervision over the Court.
SECTION 2. The oath of the judge. Before entering upon the discharge
of the duties of his office, the Judge of the Court shall take and subscribe an oath of
office before an official authorized by law to administer oaths, wherein he shall
declare, in addition to the matters prescribed in Section 23 of the Administrative
Code and in the Constitution of the Philippines, that he shall faithfully and
impartially perform the duties of his office, and that, except in the discharge of his
duties, he will not disclose to any person any evidence or other matter brought
before the Court.
SECTION 3. The Clerk of the Court; other personnel. The judge of the
Court shall appoint and fix the compensation of the Clerk of the Court, and of such
other subject, employees, and technical staff as may be necessary, subject to the
Civil Service Laws, and subject to the approval of the Secretary of Justice: Provided,
however, That the maximum yearly salary of the Clerk of the Court shall be five
thousand pesos.
CHAPTER II
Powers and Duties of the Court
SECTION 4. Strikes and lockouts. The Court shall take cognizance for
purposes of prevention, arbitration, decision and settlement, of any industrial or
agricultural dispute causing or likely to cause a strike or lockout, arising from
differences as regards wages, shares or compensation, hours of labor or conditions
of tenancy or employment, between employers and employees or laborers and
between landlords and tenants or farm-laborers, provided that the number of
employees, laborers or tenants or farm-laborers involved exceeds thirty, and such
industrial or agricultural dispute is submitted to the Court by the Secretary of Labor,
or by any or both of the parties to the controversy and certified by the Secretary of
Labor as existing and proper to be dealt with by the Court for the sake of public
interest. In all such cases, the Secretary of Labor or the party or parties submitting
the disputes, shall clearly and specifically state in writing the questions to be
decided. Upon the submission of such a controversy or question by the Secretary of
Labor, his intervention therein as authorized by law, shall cease.

The Court shall, before hearing the dispute and in the course of such hearing,
endeavor to reconcile the parties and induce them to settle the dispute by amicable
agreement. If any agreement as to the whole or any part of the dispute is arrived at
by the parties, a memorandum of its terms shall be made in writing, signed and
acknowledged by the parties thereto before the Judge of the Court or any official
acting in his behalf and authorized to administer oaths or acknowledgments, or,
before a notary public. The memorandum shall be filed in the office of the Clerk of
the Court, and, unless otherwise ordered by the Court, shall, as between the parties
to the agreement, have the same effect, and be deemed to be, a decision or award.
SECTION 5. Minimum wage and maximum "canon" or rental. Whenever
conditions in a given industry or in a given locality so warrant, and in the interest of
public welfare and for the promotion of industrial peace and progress, the President
of the Philippines shall direct the Court of Industrial Relations to investigate and
study all pertinent facts related to the industry concerned or to the industries in a
designated locality, with a view to determining the necessity and fairness of fixing
and adopting for such industry or locality a minimum wage or share of laborers or
tenants, or a maximum "canon" or rental to be paid by the "inquilinos" or tenants or
lessees to landowners.
In order to determine the necessity and fairness of adopting such
measures, and in order to arrive at a proper, just, and reasonable minimum wage or
share or maximum "canon" or rental, the Court shall make a careful examination of
the amount of capital invested in the industry or industries concerned, insurance
and transportation, market prices, benefits or gains derived or losses suffered or
expected, wages and shares as well as other income of laborers and tenants,
minimum cost of living and labor conditions in general, and such other factors and
circumstances as may, in its opinion, be necessary to fairly and adequately
accomplish the purpose of the investigation.
After such an examination, and after the Court is satisfied of the necessity and
fairness of fixing and adopting a minimum wage or share or maximum "canon" or
rental for such locality or industry, it shall tentatively fix such minimum wage or
share or maximum "canon" or rental as would give the workingmen a just
compensation for their labor and an adequate income to meet the essential
necessities of civilized life, and at the same time allow the capital a fair return on its
investment.
When determining a minimum wage or share for laborers and tenants
engaged in a given industry, the Court may, in its discretion, taking into account the
conditions prevailing in the different localities where such industry is carried on, fix
different minimum wages or shares, according to localities or fix different minimum
wages or shares according to the industries existing in that locality.
A minimum wage or share shall be determined and fixed for laborers
working by the hours, day or month, or by piecework, and for tenants sharing in the
crop or paid measurement unit. Unless otherwise expressly provided in the order
fixing a minimum wage, a minimum wage in industrial or manufacturing enterprises
shall be understood to be fixed on the basis of eight hours daily labor, and
employees and laborers working in excess of such number of hours shall be entitled
to a proportionate increase in their wages.
The Court may, by so specifically providing in its order fixing a minimum
wage, exclude apprentices from the provisions thereof, but the number of such
apprentices in an industrial firm or labor establishment shall not exceed twenty per
centum of the total number of laborers employed therein.
Insofar as possible, and when deemed necessary to better carry out the provisions
of this Act, the Court may classify or group the laborers according to the kind and
importance of the work and the amount or degree of skill, training, experience and
knowledge required and shall fix for each class or group a minimum wage or
compensation. In like manner, it may classify or group the tenants or lessees

according to the kind of work they perform, the terms of the contract with the
landowners and the productivity of the lands or the maximum "canon" or rental to
be paid to the landowners.
After such minimum wage or share or maximum "canon" or rental has
been tentatively fixed by the Court, the Court shall order the publication of such
tentative decision in three successive issues of two newspapers of general
circulation in the locality or localities affected, one published in English and another
in Spanish. All parties not agreeing to such tentative decision may, within forty-five
days after the first publication, submit to the Court their written objections. With
due consideration to such objections, and after the expiration of the period given to
question such tentative decision, the Court shall adopt a final minimum wage or
share or maximum "canon" or rental, which shall, with the approval of the President
of the Philippines, be binding upon everyone concerned and shall have the force and
effect of law thirty days after the approval by the President duly promulgated in an
executive Proclamation.
CHAPTER III
Incidental Powers of the Court and Manner of Conducting Investigations
SECTION 6. The power to issue subpoena, etc. The Judge of the Court
shall have the power to administer oaths in matters connected with the business of
the Court; summon the parties to a controversy before the Court, issue subpoena,
require the attendance and testimony of witnesses and the production of such
books, papers, contracts, records, statements of accounts, agreements and
statements as may be material to a just determination of the matter under
investigation, take testimony in any investigation or hearing conducted in pursuance
of the provisions of this Act, and delegate all such powers to any board or person
who shall act in behalf of the Court. Any contempt of the orders of the Court in this
regard shall be punished as in other cases of contempt of Courts of First Instance.
SECTION 7. Where hearings may be held; and how. The Court shall
have power to conduct hearing in any place for the determination of a question,
matter or controversy within its jurisdiction, proceed to hear and determine the
dispute in the absence of any party thereto who has been summoned or served with
notice to appear, conduct its proceedings or any part thereof in public or in private;
adjourn its hearings or any part thereof in public or in private; adjourn its hearings
to any time and place, refer any technical matter or matters of account to an expert
and to accept his report as evidence, direct parties to be joined or stricked out from
the proceedings, correct, amend or waive any error, defect or irregularity, whether
in substance or in form; extend any prescribed time; give all such directions as it
may deem necessary or expedient in the determination of the dispute before it; and
dismiss any master or part of any matter, or refrain from hearing further or from
determining the dispute or part thereof, where it is trivial or where further
proceedings by the Court are not necessary or desirable.
SECTION 8. Assessors. Employers and employees or laborers and
landlords and tenants or farm-laborers directly concerned with any matter under or
to be submitted to the consideration of the Court may petition for the appointment
of assessors, and the Court, when satisfied of the interest of the petitioners in the
controversy, may appoint at any stage of the proceedings assessors not exceeding
three for the employer or landlords, and an equal number of assessors for the
employees, laborers or tenants, from the lists of candidates to be submitted by the
parties concerned. The assessors will serve without compensation or allowance
whatsoever.
SECTION 9. Boards of inquiry. Whenever necessary in his opinion, the
President of the Philippines may appoint boards of inquiry in different localities to
assist the Court in the performance of its duties under the provisions of Section five
hereof. A local board of inquiry shall be composed of the following members: not
more than six from among a list of nominees to be submitted by employers or

landlords, an equal number from a list submitted by the employees, laborers,

tenants or farm-laborers, and not more than three experts in sociology, welfare
work,
labor
problems
or
industrial
and
agricultural
economics
and
administration: Provided, That if within fifteen days after requesting them to do so,
the parties concerned fail to submit the list of nominees above mentioned, the
President may appoint in their stead such persons as in his judgment may represent
the parties failing to submit such nominees. The chairman of the board shall be
designated by the President from among the experts. The majority of the board
shall constitute a quorum to do business, and the affirmative vote of the majority of
all the members present shall be necessary to the approval of any proposition. The
members of the board shall receive no compensation but they shall be paid their
traveling expenses. The boards of inquiry shall be charged with the duty of
investigating and determining the facts in any given case, and their report and
decision shall be deemed as only advisory.
SECTION 10. Reference to public officials. For the sake of expediency
and depending on the nature and extent of the facts and questions involved, the
Court may refer any industrial or agricultural dispute, or any matter under
consideration or advisement by the Court under the provisions of section four hereof
to a local board of inquiry, a provincial fiscal, a justice of the peace or any public
official in any part of the Philippines for investigation, report, and recommendation,
and may delegate to such board or public official such powers and functions as the
said Court of Industrial Relations may deem necessary; but such delegation shall
not affect the exercise by the Court itself of any of its powers of functions. When
delegation is made to a public official as above provided, he may, in his discretion,
appoint an equal number of assessors, not exceeding three, from each of the lists
submitted by the employers or landlords and by the employees, laborers, tenants,
or farm-laborers, respectively, interested in the matter referred to him for
investigation. The assessors thus appointed shall serve without compensation or
allowance whatsoever. The Court may take into account or set aside the
recommendation of any such board or public official in deciding the dispute and
making its decision, award or order.
SECTION 11. Court authorized to seek help from other officers.-The Court
shall have the power to require the services of any Government official or employee,
to help it, without additional compensation, in the performance of its duties.
SECTION 12. Power of inspection. The Judge or any person authorized
by him in writing may at any time during working hours, enter any labor
establishment, building, place or premises in the performance of the duties of the
Court, and may inspect and view any work, material, implement, machinery,
appliances or any object therein.
CHAPTER IV
Award and Appeals
SECTION 13. Character of the award. In making an award, order or
decision, under the provisions of section four of this Act, the Court shall not be
restricted to the specific relief claimed or demands made by the parties to the
industrial or agricultural dispute, but may include in the award, order or decision
any matter or determination which may be deemed necessary or expedient for the
purpose of settling the dispute or of preventing further industrial or agricultural
disputes.
SECTION 14. Finality of award. At the expiration of ten days from the
date of the award, order or decision, in cases brought under the provisions of
section four hereof, judgment shall be entered in accordance therewith, unless
during said ten days an aggrieved party shall appeal therefrom to the Supreme
Court of the Philippines by writ of certiorari as hereinafter provided. The Supreme
Court in its discretion, may, in any case involving a question of law, upon petition of
the party aggrieved by the decision of the Court of Industrial Relations and under

rules and conditions that it may prescribe, require bycertiorari that said case be
certified to it for review and determination.
SECTION 15. Decision of Supreme Court. Upon the final determination
and decision by the Supreme Court of the questions or issues raised in the appeal,
the Clerk of the Supreme Court shall immediately transmit to the Clerk of the Court
of Industrial Relations a certified copy of the decision or judgment. Five days after
receipt of said certified decision or judgment by the Clerk of the Court of Industrial
Relations it shall immediately become conclusive, final and executory.
If exceptions to an award, order or decision of the Court are finally sustained,
judgment shall be entered setting aside the award, order or decision, in whole or in
part, but in such case the parties may agree upon a judgment to be entered
disposing of the subject matter of the controversy, which shall have the same force
and effect as judgment entered, an award, order or decision.
SECTION 16. Preference given to labor cases. The Supreme Court shall
hear cases arising out of, and brought under, the provisions of this Act in preference
to all other cases, and decide them as soon as practicable.
SECTION 17. Limit of effectiveness of award. An award, order or
decision of the Court shall be valid and effective during the time herein specified. In
the absence of such specification, any party or both parties to a controversy may
terminate the effectiveness of an award, order or decision after three years have
elapsed from the date of said award, order or decision by giving notice to that effect
to the Court: Provided, however, That at any time during the effectiveness of an
award, order or decision, the Court may, on application of an interested party, and
after due hearing, alter, modify in whole or in part, or set aside any such award,
order or decision, or reopen any question involved therein.
SECTION 18. Interpretation of award. Whenever a doubt shall arise as
to the meaning or interpretation of an award, order or decision of the Court of
Industrial Relations, any interested party may petition the Court to determine such
meaning or interpretation and the Court, upon receiving such petition, shall set a
date for the hearing of the case and shall dispose of the same as soon as
practicable.
CHAPTER V
General Provisions
SECTION 19. Implied condition in every contract of employment. In
every contract of employment or tenancy, whether verbal or written, it is an implied
condition that when any dispute between the employer or landlord and the
employee, tenant or laborer has been submitted to the Court of Industrial Relations
for settlement or arbitration, pursuant to the provisions of this Act, and pending
award or decision by it, the employee, tenant or laborer shall not strike or walk out
of his employment when so enjoined by the Court after hearing and when public
interest so requires, and if he has already done so, that he shall forthwith return to
it, upon order of the Court, which shall be issued only after hearing when public
interest so requires or when the dispute cannot, in its opinion, be promptly decided
or settled; and if the employees, tenants or laborers fail to return to work, the Court
may authorize the employer or landlord to accept other employees, tenants or
laborers. A condition shall further be implied that while such dispute is pending in
the Court, the employer or landlord shall refrain from accepting other employees,
tenants or laborers, unless with the express authority of the Court, and shall permit
the continuation in the service of his employees, tenants or laborers under the last
terms and conditions existing before the dispute arose: Provided, That within fifteen
days after the declaration of the strike, employers will not be allowed to engage the
services of strike breakers. A violation by the employer or landlord or by the
employee, tenant or laborer of such an order or the implied contractual condition
set forth in this section shall constitute contempt of the Court, and shall be
punishable as in all other cases of contempt of a Court of First Instance.

SECTION 20. Rules of court. The Court of Industrial Relations shall

adopt its rules of procedure and shall have such other powers as generally pertain
to a court of justice:Provided, however, That in the hearing, investigation and
determination of any question or controversy and in exercising any duties and
powers under this Act, the Court shall act according to justice and equity and
substantial merits of the case, without regard to technicalities or legal forms and
shall not be bound by any technical rules of legal evidence but may inform its mind
in such manner as it may deem just and equitable.
SECTION 21. Unlawful for employer to discharge employee under certain
conditions. It shall be unlawful for any employer to discharge or to threaten to
discharge, or in any other manner discriminate against, any laborer or employee
because such person has testified or is about to testify, or because such employer
believes that he may testify in any investigation, proceeding or public hearing
conducted by the Court or any board of inquiry.
SECTION 22. Unlawful agreements. Any agreement intended to avoid
the provisions of this Act shall be void.
CHAPTER VI
Damages and Penalties
SECTION 23.
Civil liability. Non-compliance with any of the terms
of the agreement of the parties as provided for in this Act, or, of the award, order or
decision, after it has become final, conclusive and executory, may subject the
offending party to liability for damages to be recovered in an ordinary civil action.
SECTION 24.
Criminal liability. Any violation of the provisions of
this Act, or, of any order, award or decision of the Court of Industrial Relations, shall
be punished with a fine not exceeding one thousand pesos or imprisonment not
exceeding one month, or both in the discretion of the Court. Any person who shall
induce or cause somebody to violate any provision of this Act or of any order, award
or decision of the Court shall be punished with a fine not exceeding two thousand
pesos or imprisonment not exceeding one year or both in the discretion of the
Court.
CHAPTER VII
Special Provisions
SECTION 25. Appropriation. The sum of forty-five thousand pesos or so
much thereof as may be necessary, is hereby appropriated out of the
unappropriated funds in the Philippine Treasury, for salaries, per diems, traveling
expenses purchase of materials and equipments and other necessary sundry
expenses that may be incurred in the carrying out of the provisions of this Act up to
the last day of December of nineteen hundred and thirty-seven. The expenses for
the succeeding years shall be provided for in the current appropriations for such
years.
SECTION 26. Partial invalidity. If for any reason, any section or
provision of this Act shall be questioned in any Court, and shall be held to be
unconstitutional or invalid, no other section or provision of this Act shall be affected
thereby.
SECTION 27. This Act shall take effect upon its approval.
Republic Act No. 875
June 17, 1953
AN ACT TO PROMOTE INDUSTRIAL PEACE AND FOR OTHER PURPOSES
(REPEALED BY PRESIDENTIAL DECREE NO. 442)
SECTION 1. Declaration of Policy. - It is the policy this Act:
(a) To eliminate the causes of industrial unrest by encouraging and
protecting the exercise by employees of their right to self-organization for the
purpose of collective bargaining and for the promotion of their moral, social, and
economic well-being.

(b) To promote sound stable industrial peace and the advancement of the
general welfare, health and safety and the best interests of employers and
employees by the settlement of issues respecting terms and conditions of
employment through the process of collective bargaining between employers and
representatives of their employees.
(c) To advance the settlement of issues between employers and employees
through collective bargaining by making available full and adequate governmental
facilities for conciliation and mediation to aid and encourage employers and
representatives of their employees in reaching and maintaining agreements
concerning terms and conditions of employment and in making all reasonable efforts
to settle their differences by mutual agreement; and
(d) To avoid or minimize differences which arise between the parties to
collective bargaining by prescribing certain rules to be followed in the negotiation
and administration of collective bargaining agreements and by requiring the
inclusion in any such agreement of provisions for adequate notice of any proposed
changes in the terms of such agreements, for the final adjustment of grievances or
questions regarding the application or interpretation of such agreements and other
provisions designated to prevent the subsequent arising of such controversies.
Section 2. Definitions. - As used in this Act (a) "Court" means the Court of Industrial Relations established by
Commonwealth Act Numbered One hundred and three, as amended, unless another
Court shall be specified.
(b) "Service" means the Conciliation Service of the Department of Labor.
(c) The term "employer" includes any person acting in the interest of an
employer, directly or indirectly but shall not include any labor organization
(otherwise than when acting as an employer) or anyone acting in the capacity of
officer or agent of such labor organization.
(d) The term "employee" shall include any employee and shall not be
limited to the employee of a particular employer unless the Act explicitly states
otherwise and shall include any individual whose work has ceased as a consequence
of, or in connection with, any current labor dispute or because of any unfair labor
practice and who has not obtained any other substantially equivalent and regular
employment.
(e) "Labor organization" means any union or association of employees
which exists, in whole or in part, for the purpose of collective bargaining or of
dealing with employers concerning terms and conditions of employment.
(f) "Legitimate labor organization" means any labor organization registered
by the Department of Labor, and includes any branch or local thereof.
(g) The term "company union" means a labor organization the formation or
administration of which has been assisted by any Act defined in Section four as an
unfair labor practice.
(h) "Representative" includes a legitimate labor organization or any officer
or agent of such organization, whether or not employed by the employer or
employees whom he represents.
(i) The term "unfair labor practice" means any unfair labor practice listed in
section four.
(j) The term "labor dispute" includes any controversy concerning terms,
tenure or conditions of employment, or concerning the association or representation
of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms
or conditions of employment, regardless of whether the disputants stand in the
proximate relation of employer and employee.
(k) "Supervisor" means any person having authority in the interest of an
employer, to hire, transfer, suspend, lay-off, recall, discharge, assign, recommend,
or discipline other employees, or responsibly to direct them, and to adjust their
grievances, or effectively to recommend such acts if, in connection with the

foregoing, the exercise of such authority is not of a merely routinary or clerical

nature but requires the use of independent judgment.
(l) "Strike" means any temporary stoppage of work by the concerted action
of employees as a result of an industrial dispute.
(m) "Lockout" means the temporary refusal of any employer to furnish work as a
result of an industrial dispute.
Section 3. Employees' Right to Self-Organization. - Employees shall have the right
to self-organization and to form, join or assist labor organizations of their own
choosing for the purpose collective bargaining through representatives of their own
choosing and to engage in concerted activities for the purpose of collective
bargaining and other mutual aid or protection. Individuals employed as supervisors
shall not be eligible for membership in a labor organization of employees under their
supervision but may form separate organizations of their own.
Section 4. Unfair Labor Practices. (a) It shall be unfair labor practice for an employer:
(1) To interfere with, restrain or coerce employees in the exercise of their
rights guaranteed in section three;
(2) To require as a condition of employment that a person or an employee
shall not join a labor organization or shall withdraw from one to which he belongs;
(3) To initiate, dominate, assist in or interfere with the formation or
administration of any labor organization or to contribute financial or other support
to it;
(4) To discriminate in regard to hire or tenure of employment of any term
or condition of employment to encourage or discourage membership in any labor
organization: Provided, That nothing in this Act or in any other Act or statute of the
Republic of the Philippines shall preclude an employer from making an agreement
with a labor organization to require as a condition of employment membership
therein, if such labor organization is the representative of the employees as
provided in section twelve;
(5) To dismiss, discharge, or otherwise prejudice or discriminate against an
employee for having filed charges or for having given or being about to give
testimony under this Act;
(6) To refuse to bargain collectively with the representatives of his
employees subject to the provisions of section thirteen and fourteen.
(b) It shall be unfair labor practice for organization or its agents:
(1) To restrain or coerce employees in the exercise of their rights under
section three, provided that this paragraph shall not impair the right of a labor
organization to prescribe its own rules with respect to the acquisition or retention of
membership therein;
(2) To cause or attempt to cause an employer to discriminate against an
employee in violation of subsection (a) (4) or to discriminate against an employee
with respect to whom membership in such organization has been denied or
terminated on some ground other than the usual terms and conditions under which
membership or continuation of membership is made available to other members.
(3) To refuse to bargain collectively with the employer, provided it is the
representative of the employees subject to the provisions of sections thirteen and
fourteen.
(4) To cause or attempt to cause an employer to pay or deliver or agree to
pay or deliver any money or other thing of value, in the nature of an exaction, for
services which are not performed or not to be performed.
Section 5. Unfair Labor Practice Cases. -

(a) The Court shall have jurisdiction over the prevention of unfair labor
practices and is empowered to prevent any person from engaging in any unfair
labor practice. This power shall be exclusive and shall not be affected by any other
means of adjustment or prevention that has been or may be established by an
agreement, code, law or otherwise.
(b) That Court shall observe the following procedure without resort to
mediation and conciliation as provided in section four of Commonwealth Act
Numbered One hundred and three, as amended, to any pre-trial procedure.
Whenever it is charged by an offended party or his representative that any person
has engaged or is engaging in any such unfair labor practice, the Court or any
agency or agent designated by the Court must investigate such charge and shall
have the power to issue and cause to be served upon such person a complaint
stating the charges in that respect and containing a notice of hearing before the
Court or a member thereof, or before a designated Hearing Examiner at the time
and place fixed therein not less than five nor more than ten days after serving the
said complaint. The person complained of shall have the right to file an answer to
the complaint and to appear in person or otherwise (but if the Court shall so
request, the appearance shall be personal) and give testimony at the place and time
fixed in the complaint. In the discretion of the Court, a member thereof or a Hearing
Examiner, any other person may be allowed to be intervene in the said proceeding
and to present testimony. In such proceeding, the rules of evidence prevailing in
courts of law or equity shall not be controlling and it is the spirit and intention of
this Act that the Court and its members and Hearing Examiners shall use every and
all reasonable means to ascertain the facts in each case speedily and objectively
and without regard to technicalities of law or procedure. In rendering its decisions,
the Court shall not be bound solely by the evidence presented during the hearing
but may avail itself of all other means such as (but not limited to) ocular inspections
and questioning of well-informed persons which results must be made a part of the
record. In the proceeding before the Court or a Hearing Examiner thereof, the
parties shall not be required to be represented by legal counsel and it shall be the
duty and obligation of the Court or Hearing Examiner to examine and cross-examine
witnesses on behalf of the parties and to assist in the orderly presentation of the
evidence.
(c) The testimony taken by the Court or such member of the Court or the
Hearing Examiner shall be reduced to writing and filed with the Court. If, after
investigation, the Court shall be of the opinion that any person named in the
complaint has engaged in or engaging in any unfair labor practice, then the Court
shall state its findings of fact and shall issue and cause to be served on such person
an order requiring such person to cease and desist from such unfair labor practice
and take such affirmative action as will effectuate the policies of this Act, including
(but not limited to) reinstatement of employees with or without back-pay and
including rights of the employees prior to dismissal including seniority. Such order
may further require such person to post the Court's order and findings in a place
available to all the employees and to make reports from time to time showing the
extent to which the Court's order has been complied with. If after investigation the
Court shall be of the opinion that no person named in the complaint has engaged in
or is engaging in any such unfair labor practice, then the Court shall state its
findings of fact and shall issue an order dismissing the said complaint. If the
complaining party withdraws its complaint, the Court shall dismiss the case.
(d) The Court shall decide all incidental motions raised in any unfair labor
practice cases within fifteen days from submission of the same. All other matters
relative to such disputes including the main case shall be decided within thirty days
after the submission of the case. This provision shall be considered as mandatory in
character.

(e) The Court or any judge thereof shall have all the inherent power of a
Court of Justice provided in Rule One hundred and twenty-four of the rules of court
as well as the power to punish direct and indirect contempts as provided in Rule
sixty-four of the Rules of Court, under the same procedure and penalties provided
therein. Any violation of any order or decision of the Court shall constitute contempt
of court.
Section 6. Unfair Labor Practice Cases - Appeals. - Any person aggrieved by any
order of the Court may appeal to the Supreme Court of the Philippines within ten
days after the issuing of the Court's order but this appeal shall not stay the order of
the Court and the person or persons named in the Court order shall meanwhile obey
said order. The findings of the Court with respect to questions of fact if supported by
substantial evidence on the record shall be conclusive. The appeal to the Supreme
Court shall be limited to questions of law only.
Section 7. Fixing Working Conditions by Court Order. - In order to prevent undue
restriction of free enterprise for capital and labor and to encourage the truly
democratic method of regulating the relations between the employer and employee
by means of an agreement freely entered into in collective bargaining, no court of
the Philippines shall have the power to set wages, rates of pay, hours of
employment, or conditions of employment except as in this Act is otherwise
provided and except as is provided in Republic Act Numbered Six Hundred two and
Commonwealth Act Numbered Four hundred forty-four as to hours of works.
Section 8. Private Contracts Contravening Employee Rights. - Every undertaking or
promise hereafter made, whether written or oral, express or implied, constituting or
contained in any contract or agreement of hiring or employment between any
individual firm, company, association or corporation and any employee or
prospective employee of the same shall be null and void if thereby (a) Either party to such contract or agreement undertakes or promises not
to join, become or remain a member of any labor organization or of any employer
organization; or
(b) Either party to such contract or agreement undertakes or promises that
he will withdraw from an employment relation in the event that he joins, becomes
or remains a member of any labor organization or of any employer organization.
(c) Either party undertakes or promises to permit the commission of any of
the unfair labor practices defined in section four hereof.
Section 9. Injunctions in Labor Disputes. (a) No Court, Commission or Board of the Philippines shall have
jurisdiction, except as provided in section ten of this Act, to issue any restraining
order, temporary or permanent injunction in any case involving or growing out of
labor dispute to prohibit any person or persons participating or interested in such
dispute from doing, whether singly or in concert, any of the following acts:
(1) Ceasing or refusing to perform any work or to remain in any relation of
employment;
(2) Becoming or remaining a member of any labor organization or of any
employee organization regardless of any undertaking or promise as is described in
section eight of this Act;
(3) Paying or giving to, or withholding from, any person participating or
interested in such labor dispute, any strike or unemployment benefits or insurance,
or moneys or things of value;
(4) By all lawful means aiding any person participating or interested in any
labor dispute who is being proceeded against in, or is prosecuting any action or suit
in any court of the Philippines;

(5) Giving publicity to the existence of, or the facts involved in any labor
dispute, whether by advertising, speaking, patrolling, or by any method not
involving fraud or violence;
(6) Assembling peaceably to act or to organize to act in promotion of their
interests in a labor dispute;
(7) Advising or notifying any person of an intention to do any of the acts
heretofore specified;
(8) Agreeing with other persons to do or not to do any of the acts
heretofore specified; and
(9) Advising, urging, or otherwise causing or inducing without fraud or
violence, the acts heretofore specified, regardless of any such undertaking or
promise as is described in section eight of this Act.
(b) No court of the Philippines shall have jurisdiction to issue a restraining
order or temporary or permanent injunction upon the ground that any of the
persons participating or interested in a labor dispute constitute or are engaged in an
unlawful combination or conspiracy because of the doing in concert of the acts
enumerated in paragraph (a) above.
(c) No officer or member of any association or organization, and no
association or organization participating or interested in a labor dispute shall be held
responsible or liable for the unlawful acts of individual officers, members, or agents,
except upon proof of actual participation in, or actual authorization of such acts or
of ratifying of such acts after actual knowledge thereof.
(d) No court of the Philippines shall have jurisdiction to issue a temporary
or permanent injunction in any case involving or growing out of a labor dispute, as
herein defined except after hearing the testimony of witnesses in open court (with
opportunity for cross-examination) in support of the allegations of a complaint made
under oath, and testimony in opposition thereto, if offered, and except after finding
of fact by the Court, to the effect:
(1) That unlawful acts have been threatened and will be committed unless
restrained, or have been committed and will be continued unless restrained, but no
injunction or temporary restraining order shall be issued on account of any threat or
unlawful act excepting against the person or persons, association, or organization
making the threat or committing the unlawful act or actually authorizing or ratifying
the same after actual knowledge thereof;
(2) That substantial and irreparable injury to complainant's property will
follow;
(3) That as to each item of relief granted greater injury will be inflicted
upon complainant by the denial of relief that will be inflicted upon defendants by the
granting of relief;
(4) That complaint has no adequate remedy at law; and
(5) That the public officers charged with the duty to protect complainant's
property are unable or unwilling to furnish adequate protection.
Such hearing shall be held after due and personal notice thereof has been given, in
such manner as the Court shall direct, to all known persons against whom relief is
sought, and also to the chief of those public officials of the province or city within
which the unlawful acts have been threatened or committed charged with the duty
to protect complainant's property: Provided, however, That if a complainant shall
also allege that, unless a temporary restraining order shall be issued without notice,
a substantial and irreparable injury to complainant's property will be unavoidable,
such a temporary restraining order may be issued upon testimony under oath,
sufficient, if sustained, to justify the court in issuing a temporary injunction upon
hearing after notice. Such a temporary restraining order shall be effective for no
longer than fifty days and shall become void at the expiration of said five days. No
temporary restraining order or temporary injunction shall be issued except on
condition that complainant shall first file an undertaking with adequate security in

an amount to be fixed by the Court sufficient to recompense those enjoined for any
loss, expense, or damage caused by the improvident or erroneous issuance of such
order or injunction, including all reasonable costs, (together with a reasonable
attorney's fee) and expense of defense against the order or against the granting of
any injunctive relief sought in the same proceeding and subsequently denied by the
Court.
The undertaking herein mentioned shall be understood to signify an
agreement entered into by the complainant and the surety upon which a decree
may be rendered in the same suit or proceeding against said complainant and
surety, upon a hearing to assess damages of which hearing complainant and surety
shall have reasonable notice, the said complainant and surety submitting
themselves to the jurisdiction of the court for that purpose. But nothing herein
contained shall deprive any party having a claim or cause of action under or upon
such undertaking from electing to pursue his ordinary remedy by suit at law or in
equity.
(e) No restraining order or injunctive relief shall be granted to any
complainant who has failed to comply with any obligation imposed by law which is
involved in the labor dispute in question, or who has failed to make every
reasonable effort to settle such dispute by negotiation or with the aid of any
available governmental machinery of mediation or by voluntary arbitration.
(f) No restraining order or temporary or permanent injunction shall be
granted in a case involving or growing out of a labor dispute, except on the basis of
findings of fact made and filed by the court in the record of the case prior to the
issuance of such restraining order or injunction; and every restraining order or
injunction granted in a case involving or growing out of a labor dispute shall include
only a prohibition of such specific act or acts as may be expressly complained of in
the bill of complaint or petition filed in such case and as shall be expressly included
in said findings of fact made and filed by the court as provided herein:
(1) A case shall be held to involve or to grow out of a labor dispute when
the case involves persons who are engaged in the same industry, trade, craft, or
occupation; or have direct or indirect interests therein; or who are employees of the
same employer; or who are members of the same or an affiliated organization of
employers or employees; whether such dispute is (i) between one or more
employees or association of employers and one or more employees or association of
employees; (ii) between one or more employers or association of employers and
one or more employees or association of employers; or (iii) between one or more
employees or association of employees and one or more employees or association of
employees; or when the case involves any conflicting or competing interests in
"labor dispute" (as hereinbefore defined) of "persons participating or interested"
therein (as hereinafter defined).
(2) A person or association shall be held to be a person participating or
interested in a labor dispute if relief is sought against him or it, and if he or it is
engaged in the same industry, trade, craft, or occupation in which such dispute
occurs, or has a direct or indirect interest therein, or is a member, officer, or agent
of any association composed in whole or in part of employers engaged in such
industry, trade, craft, or occupation.
Section 10. Labor Disputes in Industries Indispensable to the National Interest. When in the opinion of the President of the Philippines there exists a labor dispute in
an industry indispensable to the national interest and when such labor dispute is
certified by the President to the Court of Industrial Relations, said Court may cause
to be issued a restraining order forbidding the employees to strike or the employer
to lockout the employees, pending an investigation by the Court, and if no other
solution to the dispute is found, the Court may issue an order fixing the terms and
conditions of employment.

Section 11. Prohibition Against Strikes in the Government. - The terms and
conditions of employment in the Government, including any political subdivision or
instrumentality thereof, are governed by law and it is declared to be the policy of
this Act that employees therein shall not strike for the purpose of securing changes
or modification in their terms and conditions of employment. Such employees may
belong to any labor organization which does not impose the obligation to strike or to
join in strike: Provided, however, That this section shall apply only to employees
employed in governmental functions and not to those employed in proprietary
functions of the Government including but not limited to government corporations.
Section 12. Exclusive Collective Bargaining Representation of Labor Organizations. (a) 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.
(b) Whenever a question arises concerning the representation of
employees, the Court may investigate such controversy and certify to the parties in
writing the name of the labor organization that has been designated or selected for
the appropriate bargaining unit. In any such investigation, the Court shall provide
for a speedy and appropriate hearing upon due notice and if there is any reasonable
doubt as to whom the employees have chosen as their representative for purposes
of collective bargaining, the Court shall order a secret ballot election to be
conducted by the Department of Labor, to ascertain who is the freely chosen
representative of the employees, under such rules and regulations as the Court may
prescribe, at which balloting representatives of the contending parties shall have the
right to attend as inspectors. Such a balloting shall be known as a "certification
election" and the Court shall not order certifications in the same unit more often
than once in twelve months. The organization receiving the majority of votes cast in
such election shall be certified as the exclusive bargaining representative of such
employees.
(c) In an instance where a petition is filed by at least ten per cent of the
employees in the appropriate unit requesting an election, it shall be mandatory on
the Court to order an election for the purpose of determining the representative of
the employees for the appropriate bargaining unit.
(d) When requested to bargain collectively, an employer may petition the
Court for an election if there has been no certification election held during the
twelve months prior to the date of the request of the employees, and if the
employer has reasonable doubt as to the bargaining representative of the
employees in the appropriate unit.
(e) The Department of Labor shall conduct a certification election within 30
days of the date the Court makes the request and in accordance with the rules and
regulations prescribed by the Court. The Department of Labor shall transmit the
results of the election to the Court for its determination within seven days of the
certification election.
(f) A labor organization which has been a contending party in the election
may appeal the results of the certification election to the Court if it alleges any of
the rules and regulations established by the Court for the conduct of the election
have been violated.

Section 13. Duty to Bargain Collectively. - In the absence of an agreement or other

voluntary arrangement providing for a more expeditious manner of collective
bargaining, it shall be the duty of an employer and the representative of his
employees to bargain collectively in accordance with the provisions of this Act. Such
duty to bargain collectively means the performance of the mutual obligation to meet
and confer promptly and expeditiously and in good faith, for the purpose of
negotiating an agreement with respect to wages, hours, and/or other terms and
conditions of employment, and of executing a written contract incorporating such
agreement if requested by either party, or for the purpose of adjusting any
grievances or question arising under such agreement, but such duty does not
compel any party to agree to a proposal or to make concession.
Where there is in effect a collective bargaining agreement, the duty to
bargain collectively shall also mean that neither party shall terminate or modify
such agreement, unless it has served a written notice upon the other party of the
proposed termination or modification at least thirty days prior to the expiration date
of the agreement, or in the absence of an express provision concerning the period
of validity of such agreement prior to the time it is intended to have such
termination or modification take effect. It shall be the duty of both parties, without
resorting to a strike or lockout, to continue in full force and effect all the terms and
conditions of the existing agreement during the said period of thirty days.
Section 14. Procedure of Collective Bargaining. (a) Whenever a party desires to negotiate an agreement, it shall serve a
written notice upon the other party, with a statement of its proposals. The other
party shall make a reply thereto not later than ten days from receipt of such
proposals.
(b) In case differences shall arise on the basis of such proposals and reply,
either party may request a conference which shall begin not later than ten days
from the making of such request. Both parties shall endeavor in such conference to
settle the dispute amicably and expeditiously.
(c) If the dispute is not settled by conference and the Conciliation Service
of the Department of Labor intervenes in the dispute, it shall be the duty of each
party to participate fully and promptly in such meetings and conferences as the
Service may undertake.
(d) Before an employer may lockout his employees or the employees may
strike, either party as the case may be, must file with the Conciliation Service thirty
days prior thereto a notice of their intention to strike or lockout the employees.
Such notice shall be in a form to be prescribed by the Chief of the Conciliation
Service.
Section 15. Violation of Duty to Bargain Collectively. - It shall be unlawful for any
employer to refuse to bargain collectively with the representative of his employees,
or to declare a lockout without having first bargained collectively with the
representative of his employees, in accordance with the provisions of this Act. Any
employee whose work has stopped as a consequence of such lockout shall be
entitled to back-pay.
The refusal of a labor organization to bargain collectively with an employer
or the declaration of a strike by such organization without having first bargained
collectively with an employer pursuant to this Act, shall be sufficient cause for the
Court of Industrial Relations to deny to said union all rights and privileges under this
Act. Any employee who participates in such strike shall lose his status as an
employee for the purposes of this Act.
The declaration of a strike by a labor organization or a lockout by an
employer where no previous notice of a desire to negotiate an agreement has been

served upon the other party as provided in Section 14, shall be deemed prima facie
evidence of a violation of the duty to bargain collectively.
Section 16. Administration of Agreement and Handling of Grievances. - The parties
to collective bargaining shall endeavor to include in their agreement provisions to
insure mutual observance of the terms and stipulations of the agreement and to
establish machinery for the adjustment of grievances, including any question that
may arise from the application or interpretation of the agreement or from day-today relationships in the establishment.
Section 17. Rights and Conditions of Membership in Labor Organizations. - It is
hereby declared to be the public policy of the Philippines to encourage the following
internal labor organization procedures. A minimum of ten percent of the members
of a labor organization may report an alleged violation of these procedures in their
labor organization to the Court. If the Court finds, upon investigation, evidence to
substantiate the alleged violation and that efforts to correct the alleged violation
through the procedures provided by the labor organization's constitution or by-laws
have been exhausted, the Court shall dispose of the complaint as in "unfair labor
practice" cases.
(a) Arbitrary or excessive initiation fees shall not be required of the
members of a legitimate labor organization nor shall arbitrary, excessive or
oppressive fines and forfeitures be imposed.
(b) The members shall be entitled to full and detailed reports from their
officers and representatives of all financial transactions as provided in the
constitution and by-laws of the organization.
(c) They shall also have the right to elect officers by secret ballot at
intervals of not more than two years and to determine and vote upon the question
of striking or not striking or upon any other question of major policy affecting the
entire membership of the organization.
(d) No labor organization shall knowingly admit as member or continue in
membership therein any individual who belongs to any subversive organization or
who is engaged directly or indirectly in any subversive activity or movement.
(e) No person who has been convicted of a crime involving moral turpitude
shall be eligible for election to any office in a legitimate labor organization or for
appointment to any position involving the collection, custody, management, control,
or disbursement of its funds, and any such person shall be disqualified from
continuing to hold any office or such position in the organization.
Within sixty days of the election of the officers of a legitimate labor organization,
the secretary or other responsible officer thereof shall furnish the Secretary of Labor
with a list of the newly-elected officers and the appointive officers or agents of the
organization who are entrusted within the collection, custody, management, control
or disbursement of its funds. Any change in such list shall be reported within this
period.
(f) No officer, agent or member of a legitimate labor organization shall
collect any fees, dues, or other contributions in behalf of the organization or make
any disbursement of its money or funds unless he is provided with the necessary
authority pursuant to its constitution or by-laws.
(g) Every payment of fees, dues, or other contributions by a member shall
be evidenced by a receipt signed by the officer or agent making the collection and
entered upon the record of the organization to be kept and maintained for that
purpose.
(h) The funds of the organization shall not be applied for any purpose or
object other than those expressly stated in its constitution or by-laws or those
expressly authorized by a resolution of the majority of the members.

(i) Every expenditure of the funds of the organization shall be evidenced by

a receipt from the person to whom the payment was made, which shall state the
date, place and purpose of such payment. Such receipts shall form part of the
financial records of the organization.
(j) The officers of a legitimate labor organization shall not be paid any
other compensation, in addition to the salaries and expenses for their positions
which shall be specifically provided for in its constitution or by-laws, except in
pursuance of a resolution approved in a meeting by a majority vote.
(k) The treasurer of a legitimate labor organization and every officer
thereof who is responsible for the accounts of such organization or for the collection,
disbursement, custody or control of the funds, moneys and other properties of the
organization, shall render to the organization and to its members at the times
specified hereunder, a true and correct account of all moneys received and paid by
him since he assumed office or since the last date on which he rendered such
account and of the balance remaining in his hands at the time of rendering such
account, and of all bonds, securities, and other properties of the organization
entrusted to his custody or under his control. The rendering of such account shall be
made (1) at least once a year within thirty days of the close of its fiscal year;
(2) at such other times as may be required by a resolution of the majority
of the members of the organization; and
(3) upon vacating his office.
The account shall be verified by affidavit and copy thereof shall be furnished the
Secretary of Labor. The organization shall cause such account to be audited by a
qualified person.
(l) The books of accounts and other records of the financial activities of a
legitimate labor organization shall be open to inspection by any officer or member
thereof.
Section 18. Conciliation Service. - There shall be appointed, in addition to the
existing personnel of the Conciliation Service of the Department of Labor, such
number of conciliators, examiners, and other assistants as may be necessary to
carry out the purposes of this section and as may hereafter be provided in this Act
or may hereafter be provided by law.
It shall be the duty of the Service, in order to prevent or minimize labor
disputes, to assist parties to labor disputes in settling such disputes through
conciliation and mediation.
The Service may proffer its services in any labor dispute in any industry
either upon its own motion or upon the request of one or more of the parties to the
dispute.
If the Service is not able to bring the parties to agreement by conciliation within a
reasonable time, it shall seek to induce the parties voluntarily to seek other means
of settling the dispute without resort to strike, lockout, or other coercion, including
submission to the employees in the bargaining unit of the employer's last offer of
settlement for approval or rejection in a secret ballot.
Section 19. Compilation of Collective Bargaining Agreements. - For the information
and guidance of all interested representatives of employers and legitimate labor
organizations, the Conciliation Service in the Department of Labor shall maintain a
file of all available collective bargaining agreements and other available agreements
settling or adjusting industrial disputes, and of copies of the orders, awards, and
decisions of the Court of Industrial Relations and the Supreme Court in cases of
industrial disputes. Such file shall be open to inspection under appropriate
conditions prescribed by the Secretary of Labor, except that no specific information
submitted in confidence shall be disclosed.

Section 20. Labor-Management Conferences. - The President of the Philippines may,

from time to time, upon his own motion or upon recommendation of the Secretary
of Labor, call a national conference of representatives of employers and of labor
organizations for the consideration and adoption of voluntary codes of principle in
regard to labor-management relations designed to prevent or minimize industrial
disputes particularly those affecting the general welfare.
The Secretary of Labor is also authorized to call from time to time a
conference of representatives of employers and labor organizations in any industry
or region for the same purpose.
In recommending a national labor-management conference or in calling an
industrial or regional labor-management conference, the Secretary of Labor is
directed to act in consultation with representatives of employers and labor
organizations concerned.
The purpose of this section is to establish a positive philosophy in the
governmental approach to the problem of industrial relations that will lend the
whole force of its influence in encouraging the development of sound economic and
social practices, and, at the same time, to recognize that real industrial peace can
not be achieved by compulsion of law. Sound and stable industrial relations must
rest, in keeping with the spirit of our democratic institutions, on an essentially
voluntary basis.
Section 21. Advisory Labor-Management Council. - There is hereby established in
the Department of Labor an advisory Labor-Management Council which shall be
composed of a member representing the public, who shall act as chairman, and an
equal number of representatives selected from among persons outstanding in the
field of management and of representatives selected from among persons
outstanding in the filed of labor.
It shall be the duty of the Council, at the request of the Secretary of Labor,
to advise in the avoidance of industrial disputes and the manner in which
medication and voluntary adjustment of such disputes shall be administered.
Section 22. Study of Industrial Relations. - The Secretary of Labor shall have power
and it shall be his duty to inquire into (a) The existing relations between employer and employees in the
Philippines;
(b) the growth of associations of employees and the effect of such
associations upon employer-employee relationships;
(c) the extent and results of the methods of collective bargaining in the
determination of terms and conditions of employment;
(d) the methods which have been tried by employers and associations of
employees for maintaining mutually satisfactory relations;
(e) desirable industrial practices which have been developed through
collective bargaining and other voluntary arrangements;
(f) the possible ways of increasing the usefulness and efficiency of
collective bargaining for settling differences;
(g) the possibilities for the adoption of practical and effective methods of
labor-management cooperation; and
(h) any other aspect of employer-employee relationship which relates to
the promotion of harmony and understanding between the parties.
The Secretary of Labor shall also inquire into the causes of industrial unrest and
take all necessary means within his power as may be prescribed by law to alleviate
the same, and shall from time to time recommend the enactment of such remedial
legislation as in his judgment may be desirable for the maintenance and promotion
of industrial peace.

Section 23. Registration of Labor Organizations. (a) There shall be in the Department of Labor a Registrar of Labor
Organizations (hereinafter referred to as the Registrar).
It shall be the duty of the Register to act as the representative of the Secretary of
Labor in any proceeding under this Act upon any question of the association or
representation of employees, to keep and maintain a registry of legitimate labor
organizations and of their branches of locals, and to perform such other functions as
the Secretary of Labor may prescribe.
(b) Any labor organization, association or union of workers duly organized
for the material, intellectual and moral well-being of its members shall acquire legal
personality and be entitled to all the rights and privileges granted by law to
legitimate labor organizations within thirty days of filing with the office of the
Secretary of Labor notice of its due organization and existence and the following
documents, together with the amount of five pesos as registration fee, except as
provided in paragraph "d" of this section:
(1) A copy of the constitution and by-laws of the organization together with
a list of all officers of the association, their addresses and the address of the
principal office of the organization;
(2) A sworn statement of all officers of the said organization, association or
union to the effect that they are not members of the Communist Party and that they
are not members of any organizations which teaches the overthrow of the
Government by force or by any illegal or unconstitutional method; and
(3) If the applicant organization has been in existence for one or more
years, a copy of its last annual financial report.
(c) If in the opinion of the Department of Labor the applicant organization
does not appear to meet the requirements of this Act for registration, the
Department shall, after ten days' notice to the applicant organization, association or
union, and within thirty days of receipt of the above-mentioned documents, hold a
public hearing in the province in which the principal office of the applicant is located
at which the applicant organization shall have the right to be represented by
attorney and to cross-examine witnesses; and such hearing shall be concluded and
a decision announced by the Department within thirty days after the announcement
of said hearing; and if after due hearing the Department rules against registration of
the applicant, it shall be required that the Department of Labor state specifically
what data the applicant has failed to submit as a prerequisite of registration. If the
applicant is still denied, it thereafter shall have the right within sixty days of formal
denial of registration to appeal to the Court of Appeals, which shall render a decision
within thirty days, or to the Supreme Court.
(d) The registration and permit of a legitimate labor organization shall be
cancelled by the Department of Labor, if the Department has reason to believe that
the labor organization no longer meets one or more of the requirements of
paragraph (b) above; or fails to file with the Department of Labor either its financial
report within sixty days of the end of its fiscal year or the names of its new officers
along with their non-subversive affidavits as outlined in paragraph (b) above within
sixty days of their election; however, the Department of Labor shall not order the
cancellation of the registration and permit without due notice and hearing, as
provided under paragraph (c) above, and the affected labor organization shall have
the same right of appeal to the courts as previously provided.
The Department of Labor shall automatically cancel or refuse registration and permit
to the labor organization or the unit of a labor organization finally declared under
sections five and six of this Act to be a company union as defined by this Act. The
restoration or granting of registration and permit shall take place only after the
labor organization petitions the Court and the Court declares (1) that full remedial

action has been taken and (2) sufficient time has elapsed to counteract the unfair
labor practice which resulted in the company union status.
(e) Provisions of Commonwealth Act Numbered Two hundred and thirteen
providing for registration, licensing, and cancellation of registration of organizations,
associations or unions of labor, as qualified and expanded by the preceding
paragraphs of this Act, are hereby amended.
Section 24. Rights of Labor Organizations. - A legitimate labor organization shall
have the right (a) To act as the representative of its members for the purpose of collective
bargaining, pursuant to section three of this Act;
(b) To be certified as the exclusive representative of the employees in a
collective bargaining unit, as provided in section twelve (a);
(c) To own property, real or personal, for the use and benefit of such labor
organization and of its members; and
(d) To bring and defend actions in its registered name relating to such
property.
No suit, action or other proceeding shall be maintainable in any court against a
labor organization or any officer or member thereof for any act done by or on behalf
of such organization in furtherance of an industrial dispute to which it is a party, on
the ground only that such act induces some other person to break a contract of
employment or that it is in restraint of trade or interferes with the trade, business or
employment of some other person or with the right of some other person to dispose
of his capital or labor.
Section 25. Penalties. - Any person who violates the provisions of section three of
this Act shall be punished by a fine of not less that one hundred pesos nor more
than one thousand pesos, or by imprisonment of not less than one month nor more
than one year, or by both such fine and imprisonment, in the discretion of the Court.
Any other violation of this Act which is declared unlawful shall be punished
by a fine of not less than fifty pesos nor more than five hundred pesos for each
offense.
Section 26. Appropriations. - The sum of two hundred thousand pesos is hereby
appropriated for the fiscal year nineteen hundred and fifty-four to carry out the
purposes of this Act and the same amount is hereby authorized for appropriation in
succeeding years.
Section 27. Transitory Provision. - All cases pending before the Court of Industrial
Relations at the time of passage of this Act shall be processed by the Court
according to Commonwealth Act Numbered One hundred three, as amended by the
Commonwealth Acts Numbered Two hundred fifty-four, Three hundred fifty-five and
Five hundred fifty-nine but the judges of the Court shall call both parties to the
dispute and make every attempt to help them reach a just and speedy solution by
mutual agreement.
Section 28. Declaration of Invalidity. - If any provision of this Act, or the application
thereof to any person or circumstance, shall be held invalid, the remainder of this
Act, or the application of such provision to persons or circumstances other than
those as to which it is held invalid, shall not be affected thereby.
Section 29. Prior Inconsistent Laws. - All acts or parts of acts inconsistent with the
provisions of this Act are hereby repealed.
Section 30. Date of Effectivity. - This Act shall take effect on its approval.

Approved: June 17, 1953

B.

Extent and Scope of Right

Art. 246. Non-abridgment of right to self-organization. It shall be unlawful for

any person to restrain, coerce, discriminate against or unduly interfere with
employees and workers in their exercise of the right to self-organization. Such right
shall include the right to form, join, or assist labor organizations for the purpose of
collective bargaining through representatives of their own choosing and to engage in
lawful concerted activities for the same purpose for their mutual aid and protection,
subject to the provisions of Article 264 of this Code. (As amended by Batas
Pambansa Bilang 70, May 1, 1980)
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 84433 June 2, 1992
ALEXANDER REYES, ALBERTO M. NERA, EDGARDO M. GECA, and 138
others, petitioners,
vs.
CRESENCIANO B. TRAJANO, as Officer-in-Charge, Bureau of Labor
Relations, Med. Arbiter PATERNO ADAP, and TRI-UNION EMPLOYEES
UNION, et al., respondent.
NARVASA, C.J.:
The officer-in-charge of the Bureau of Labor Relations (Hon. Cresenciano
Trajano) sustained the denial by the Med Arbiter of the right to vote of one hundred
forty-one (141) members of the "Iglesia ni Kristo" (INK), all employed in the same
company, at a certification election at which two (2) labor organizations were
contesting the right to be the exclusive representative of the employees in the
bargaining unit. That denial is assailed as having been done with grave abuse of
discretion in the special civil action of certiorari at bar, commenced by the INK
members adversely affected thereby.
The certification election was authorized to be conducted by the Bureau of
Labor Relations among the employees of Tri-Union Industries Corporation on
October 20, 1987. The competing unions were Tri-Union Employees UnionOrganized Labor Association in Line Industries and Agriculture (TUEU-OLALIA), and
Trade Union of the Philippines and Allied Services (TUPAS). Of the 348 workers
initially deemed to be qualified voters, only 240 actually took part in the election,
conducted under the provision of the Bureau of Labor Relations. Among the 240
employees who cast their votes were 141 members of the INK.
The ballots provided for three (3) choices. They provided for votes to be
cast, of course, for either of the two (2) contending labor organizations, (a) TUPAS
and (b) TUEU-OLALIA; and, conformably with established rule and practice, 1 for (c)
a third choice: "NO UNION."
The final tally of the votes showed the following results:
TUPAS 1
TUEU-OLALIA 95
NO UNION 1
SPOILED 1
CHALLENGED 141

The challenged votes were those cast by the 141 INK members. They were
segregated and excluded from the final count in virtue of an agreement between the
competing unions, reached at the pre-election conference, that the INK members
should not be allowed to vote "because they are not members of any union and
refused to participate in the previous certification elections."
The INK employees promptly made known their protest to the exclusion of
their votes. They filed f a petition to cancel the election alleging that it "was not fair"
and the result thereof did "not reflect the true sentiments of the majority of the
employees." TUEU-OLALIA opposed the petition. It contended that the petitioners
"do not have legal personality to protest the results of the election," because "they
are not members of either contending unit, but . . . of the INK" which prohibits its
followers, on religious grounds, from joining or forming any labor
organization . . . ."
The Med-Arbiter saw no merit in the INK employees 1 petition. By Order
dated December 21, 1987, he certified the TUEU-OLALIA as the sole and exclusive
bargaining agent of the rank-and-file employees. In that Order he decided the fact
that "religious belief was (being) utilized to render meaningless the rights of the
non-members of the Iglesia ni Kristo to exercise the rights to be represented by a
labor organization as the bargaining agent," and declared the petitioners as "not
possessed of any legal personality to institute this present cause of action" since
they were not parties to the petition for certification election.
The petitioners brought the matter up on appeal to the Bureau of Labor
Relations. There they argued that the Med-Arbiter had "practically disenfranchised
petitioners who had an overwhelming majority," and "the TUEU-OLALIA certified
union cannot be legally said to have been the result of a valid election where at
least fifty-one percent of all eligible voters in the appropriate bargaining unit shall
have cast their votes." Assistant Labor Secretary Cresenciano B. Trajano, then
Officer-in-Charge of the Bureau of Labor Relations, denied the appeal in his Decision
of July 22, 1988. He opined that the petitioners are "bereft of legal personality to
protest their alleged disenfrachisement" since they "are not constituted into a duly
organized labor union, hence, not one of the unions which vied for certification as
sole and exclusive bargaining representative." He also pointed out that the
petitioners "did not participate in previous certification elections in the company for
the reason that their religious beliefs do not allow them to form, join or assist labor
organizations."
It is this Decision of July 22, 1988 that the petitioners would have this
Court annul and set aside in the present special civil action of certiorari.
The Solicitor General having expressed concurrence with the position taken
by the petitioners, public respondent NLRC was consequently required to file, and
did thereafter file, its own comment on the petition. In that comment it insists that
"if the workers who are members of the Iglesia ni Kristo in the exercise of their
religious belief opted not to join any labor organization as a consequence of which
they themselves can not have a bargaining representative, then the right to be
representative by a bargaining agent should not be denied to other members of the
bargaining unit."
Guaranteed to all employees or workers is the "right to self-organization
and to form, join, or assist labor organizations of their own choosing for purposes of
collective bargaining." This is made plain by no less than three provisions of the
Labor Code of the Philippines. 2 Article 243 of the Code provides as follows: 3
ART. 243. Coverage and employees right to self-organization. All persons
employed in commercial, industrial and agricultural enterprises and in religious,
charitable, medical, or educational institutions whether operating for profit or not,
shall have the right to self-organization and to form, join, or assist labor
organizations of their own choosing for purposes or collective bargaining.Ambulant,
intermittent and itinerant workers, self-employed people, rural workers and those

without any definite employers may form labor organizations for their mutual aid
and protection.
Article 248 (a) declares it to be an unfair labor practice for an employer,
among others, to "interfere with, restrain or coerce employees in the exercise of
their right to self-organization." Similarly, Article 249 (a) makes it an unfair labor
practice for a labor organization to "restrain or coerce employees in the exercise of
their rights to self-organization . . . "
The same legal proposition is set out in the Omnibus Rules Implementing
the Labor Code, as amended, as might be expected Section 1, Rule II (Registration
of Unions), Book V (Labor Relations) of the Omnibus Rules provides as follows; 4
Sec. 1. Who may join unions; exception. All persons employed in
commercial, industrial and agricultural enterprises, including employees of
government corporations established under the Corporation Code as well as
employees of religious, medical or educational institutions, whether operating for
profit or not, except managerial employees, shall have the right to self-organization
and to form, join or assist labor organizations for purposes of collective
bargaining. Ambulant, intermittent and without any definite employers people, rural
workers and those without any definite employers may form labor organizations for
their mutual aid and protection.
xxx xxx xxx
The right of self-organization includes the right to organize or affiliate with
a labor union or determine which of two or more unions in an establishment to join,
and to engage in concerted activities with co-workers for purposes of collective
bargaining through representatives of their own choosing, or for their mutual aid
and protection, i.e., the protection, promotion, or enhancement of their rights and
interests. 5
Logically, the right NOT to join, affiliate with, or assist any union, and
to disaffiliate or resign from a labor organization, is subsumed in the right to join,
affiliate with, or assist any union, and to maintain membership therein. The right to
form or join a labor organization necessarily includes the right to refuse or refrain
from exercising said right. It is self-evident that just as no one should be denied the
exercise of a right granted by law, so also, no one should be compelled to exercise
such a conferred right. The fact that a person has opted to acquire membership in a
labor union does not preclude his subsequently opting to renounce such
membership. 6
As early as 1974 this Court had occasion to expatiate on these self-evident
propositions in Victoriano v. Elizalde Rope Workers' Union, et al., 7 viz.:
. . .What the Constitution and Industrial Peace Act recognize and guarantee is the
"right" to form or join associations. 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 being
prevented by law; 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; 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 vs. 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. vs. PHILAME [KG] Employees Union, et
al., L-19912, January 20, 1965, 13 SCRA 120, 123, quoting Rothenberg, Labor
Relations). Inasmuch as what both the Constitution and the Industrial Peace Act
have recognized, the 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.
The right to refuse to join or be represented by any labor organization is
recognized not only by law but also in the rules drawn up for implementation
thereof. The original Rules on Certification promulgated by the defunct Court of
Industrial Relations required that the ballots to be used at a certification election to
determine which of two or more competing labor unions would represent the
employees in the appropriate bargaining unit should contain, aside from the names
of each union, an alternative choice of the employee voting, to the effect that he
desires not to which of two or more competing labor unions would represent the
employees in the appropriate bargaining unit should contain, aside from the names
of each union, an alternative choice of the employee voting, to the effect that he
desires not to be represented by any union. 8 And where only one union was
involved, the ballots were required to state the question "Do you desire to be
represented by said union?" as regards which the employees voting would mark
an appropriate square, one indicating the answer, "Yes" the other, "No."
To be sure, the present implementing rules no longer explicitly impose the
requirement that the ballots at a certification election include a choice for "NO
UNION" Section 8 (rule VI, Book V of the Omnibus Rules) entitled"Marketing and
canvassing of votes," pertinently provides that:
. . . (a) The voter must write a cross (X) or a check (/) in the square opposite the
union of his choice. If only one union is involved, the voter shall make his cross or
check in the square indicating "YES" or "NO."
xxx xxx xxx
Withal, neither the quoted provision nor any other in the Omnibus
Implementing Rules expressly bars the inclusion of the choice of "NO UNION" in the
ballots. Indeed it is doubtful if the employee's alternative right NOT to form, join or
assist any labor organization or withdraw or resign from one may be validly
eliminated and he be consequently coerced to vote for one or another of the
competing unions and be represented by one of them. Besides, the statement in the
quoted provision that "(i)f only one union is involved, the voter shall make his cross
or check in the square indicating "YES" or "NO," is quite clear acknowledgment of
the alternative possibility that the "NO" votes may outnumber the "YES" votes
indicating that the majority of the employees in the company do not wish to be
represented by any union in which case, no union can represent the employees in
collective bargaining. And whether the prevailing "NO" votes are inspired by
considerations of religious belief or discipline or not is beside the point, and may not
be inquired into at all.
The purpose of a certification election is precisely the ascertainment of the
wishes of the majority of the employees in the appropriate bargaining unit: to be or
not to be represented by a labor organization, and in the affirmative case, by which
particular labor organization. If the results of the election should disclose that the
majority of the workers do not wish to be represented by any union, then their
wishes must be respected, and no union may properly be certified as the exclusive
representative of the workers in the bargaining unit in dealing with the employer
regarding wages, hours and other terms and conditions of employment. The
minority employees who wish to have a union represent them in collective
bargaining can do nothing but wait for another suitable occasion to petition for a
certification election and hope that the results will be different. They may not and
should not be permitted, however, to impose their will on the majority who do not
desire to have a union certified as the exclusive workers' benefit in the bargaining
unit upon the plea that they, the minority workers, are being denied the right of
self-organization and collective bargaining. As repeatedly stated, the right of selforganization embraces not only the right to form, join or assist labor organizations,
but the concomitant, converse right NOT to form, join or assist any labor union.

That the INK employees, as employees in the same bargaining unit in the
true sense of the term, do have the right of self-organization, is also in truth beyond
question, as well as the fact that when they voted that the employees in their
bargaining unit should be represented by "NO UNION," they were simply exercising
that right of self-organization, albeit in its negative aspect.
The respondents' argument that the petitioners are disqualified to vote
because they "are not constituted into a duly organized labor union" "but
members of the INK which prohibits its followers, on religious grounds, from joining
or forming any labor organization" and "hence, not one of the unions which vied
for certification as sole and exclusive bargaining representative," is specious.
Neither law, administrative rule nor jurisprudence requires that only employees
affiliated with any labor organization may take part in a certification election. On the
contrary, the plainly discernible intendment of the law is to grant the right to vote to
all bona fide employees in the bargaining unit, whether they are members of a labor
organization or not. As held in Airtime Specialists, Inc. v. Ferrer-Calleja: 9
In a certification election all rank-and-file employees in the appropriate
bargaining unit are entitled to vote. This principle is clearly stated in Art. 255 of the
Labor Code which states that the "labor organization designated or selected by the
majority of the employees in an appropriate bargaining unit shall be the exclusive
representative of the employees in such unit for the purpose of collective
bargaining." Collective bargaining covers all aspects of the employment relation and
the resultant CBA negotiated by the certified union binds all employees in the
bargaining unit. Hence, all rank-and-file employees, probationary or permanent,
have a substantial interest in the selection of the bargaining representative. The
Code makes no distinction as to their employment for certification election. The law
refers to "all" the employees in the bargaining unit. All they need to be eligible to
support the petition is to belong to the "bargaining unit".
Neither does the contention that petitioners should be denied the right to
vote because they "did not participate in previous certification elections in the
company for the reason that their religious beliefs do not allow them to form, join or
assist labor organizations," persuade acceptance. No law, administrative rule or
precedent prescribes forfeiture of the right to vote by reason of neglect to exercise
the right in past certification elections. In denying the petitioners' right to vote upon
these egregiously fallacious grounds, the public respondents exercised their
discretion whimsically, capriciously and oppressively and gravely abused the same.
WHEREFORE, the petition for certiorari is GRANTED; the Decision of the
then Officer-in-Charge of the Bureau of Labor Relations dated December 21, 1987
(affirming the Order of the Med-Arbiter dated July 22, 1988) is ANNULLED and SET
ASIDE; and the petitioners are DECLARED to have legally exercised their right to
vote, and their ballots should be canvassed and, if validly and properly made out,
counted and tallied for the choices written therein. Costs against private
respondents.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 82914 June 20, 1988
KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS Local Chapter No.
1027), petitioner,
vs.
THE HONORABLE BLR DIRECTOR PURA FERRER CALLEJA, MEAT AND
CANNING DIVISION UNIVERSAL ROBINA CORPORATION and MEAT AND

CANNING DIVISION NEW EMPLOYEES AND WORKERS UNITED LABOR

ORGANIZATION, respondents.
Alar, Comia, Manalo and Associates for petitioner.
Danilo Bolos for respondent Robina Corporation.
RESOLUTION
GRIO-AQUINO, J.:
The petitioner, Kapatiran sa Meat and Canning Division TUPAS Local
Chapter No. 1027) hereinafter referred to as "TUPAS," seeks a review of the
resolution dated January 27, 1988 (Annex D) of public respondent Pura FerrerCalleja, Director of the Bureau of Labor Relations, dismissing its appeal from the
Order dated November 17, 1987 (Annex C) of the Med-Arbiter Rasidali C. Abdullah
ordering a certification election to be conducted among the regular daily paid rank
and file employees/workers of Universal Robina Corporation-Meat and Canning
Division to determine which of the contending unions:
a) Kapatiran sa Meat and Canning Division TUPAS Local Chapter No. 1027
(or "TUPAS" for brevity);
b) Meat and Canning Division New Employees and Workers United Labor
Organization (or "NEW ULO" for brevity);
c) No union.
shall be the bargaining unit of the daily wage rank and file employees in the Meat
and Canning Division of the company.
From 1984 to 1987 TUPAS was the sole and exclusive collective bargaining
representative of the workers in the Meat and Canning Division of the Universal
Robina Corporation, with a 3-year collective bargaining agreement (CBA) which was
to expire on November 15, 1987.
Within the freedom period of 60 days prior to the expiration of its CBA,
TUPAS filed an amended notice of strike on September 28, 1987 as a means of
pressuring the company to extend, renew, or negotiate a new CBA with it.
On October 8, 1987, the NEW ULO, composed mostly of workers belonging to the
IGLESIA NI KRISTO sect, registered as a labor union.
On October 12, 1987, the TUPAS staged a strike. ROBINA obtained an
injunction against the strike, resulting in an agreement to return to work and for the
parties to negotiate a new CBA.
The next day, October 13, 1987, NEW ULO, claiming that it has "the
majority of the daily wage rank and file employees numbering 191," filed a petition
for a certification election at the Bureau of Labor Relations (Annex A).
TUPAS moved to dismiss the petition for being defective in form and that the
members of the NEW ULO were mostly members of the Iglesia ni Kristo sect which
three (3) years previous refused to affiliate with any labor union. It also accused the
company of using the NEW ULO to defeat TUPAS' bargaining rights (Annex B).
On November 17, 1987, the Med-Arbiter ordered the holding of a
certification election within 20 days (Annex C).
TUPAS appealed to the Bureau of Labor Relations BLR. In the meantime, it
was able to negotiate a new 3-year CBA with ROBINA, which was signed on
December 3, 1987 and to expire on November 15, 1990.
On January 27, 1988, respondent BLR Director Calleja dismissed the
appeal (Annex D).
TUPAS' motion for reconsideration (Annex E) was denied on March 17,
1988 (Annex F). On April 30, 1988, it filed this petition alleging that the public
respondent acted in excess of her jurisdiction and with grave abuse of discretion in
affirming the Med-Arbiter's order for a certification election.
After deliberating on the petition and the documents annexed thereto, We
find no merit in the Petition. The public respondent did not err in dismissing the
petitioner's appeal in BLR Case No. A-12-389-87. This Court's decision inVictoriano

vs. Elizalde Rope Workers' Union, 59 SCRA 54, upholding the right of members of
the IGLESIA NI KRISTO sect not to join a labor union for being contrary to their
religious beliefs, does not bar the members of that sect from forming their own
union. The public respondent correctly observed that the "recognition of the tenets
of the sect ... should not infringe on the basic right of self-organization granted by
the constitution to workers, regardless of religious affiliation."
The fact that TUPAS was able to negotiate a new CBA with ROBINA within
the 60-day freedom period of the existing CBA, does not foreclose the right of the
rival union, NEW ULO, to challenge TUPAS' claim to majority status, by filing a
timely petition for certification election on October 13, 1987 before TUPAS' old CBA
expired on November 15, 1987 and before it signed a new CBA with the company
on December 3, 1987. As pointed out by Med-Arbiter Abdullah, a "certification
election is the best forum in ascertaining the majority status of the contending
unions wherein the workers themselves can freely choose their bargaining
representative thru secret ballot." Since it has not been shown that this order is
tainted with unfairness, this Court will not thwart the holding of a certification
election (Associated Trade Unions [ATU] vs. Noriel, 88 SCRA 96).
WHEREFORE, the petition for certiorari is denied, with costs against the
petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-16275
February 23, 1961
PAN AMERICAN WORLD AIRWAYS SYSTEM (PHILIPPINES), petitioner,
vs.
PAN AMERICAN EMPLOYEES ASSOCIATION, respondent.
Ross, Selph and Carrascoso for petitioner.
Jose Espinas for respondent.
REYES, J.B.L., J.:
Appeal by certiorari from the decision of the Court of Industrial Relations in
Case No. 1055-V dated October 10, 1959, and its resolution en banc denying the
motion for reconsideration filed by the petitioner herein.
The dispositive portion of the appealed decision reads: .
WHEREFORE, the Court orders the Chief of the Examining Division or his
representative to compute the overtime compensation due the aforesaid fourteen
(14) aircraft mechanic and the two employees from the Communication Department
based on the time sheet of said employees from February 23 1952 up to and
including July 15, 1958 and to submit his report within 30 days for further
disposition by the Court; and the company shall show to the Court Examiner such
time sheets an other documents that may be necessary in the aforesaid
computation; and two (2) representatives for the company and two (2)
representatives for the union shall be chosen to help the Court Examiner in said
computation.
The company is also ordered to permanently adopt the straight 8-hour shift
inclusive of meal period which is mutually beneficial to the parties.
SO ORDERED.
In this appeal, petitioner advances five proposition which, briefly, are as
follows: (1) the Industrial Court has no jurisdiction to order the payment of
overtime compensation, it being a mere monetary claim cognizable by regular
courts; (2) the finding that the one-hour meal period should be considered overtime
work (deducting 15 minutes as time allotted for eating) is not supported by

substantial evidence; (3) the court below had no authority to delegate its judicial
functions by ordering the Chief of the Examining Division or his representative to
compute the overtime pay; (4) the finding that there was no agreement to withdraw
Case No. 1055-V in consideration of the wage increases in the Collective Bargaining
Contract (Exh. "A") is not supported by substantial evidence; and (5) the court
below had no authority to order the company to adopt a straight 8-hour
shift inclusive of meal period.
On the issue of jurisdiction over claims for overtime pay, we have since
definitely ruled in a recent decisions that the Industrial Court may properly take
cognizance of such cases if, at the time of the petition, the complainants were still in
the service of the employer, or, having been separated from such service, should
ask for reinstatement; otherwise, such claims should be brought before the regular
courts (NASSCO v. CIR, et al., L-13888, April 29, 1960; FRISCO v. CIR, et al., L13806, May 23, 1960; Board of Liquidators, et al. vs. CIR, et al., L-15485, May 23,
1960; Sta. Cecilia, Sawmills Co. vs. CIR, L-14254 & L-14255, May 27, 1960; Ajax
International Corp. v. Seguritan, L-16038, October 25, 1960; Sampaguita Pictures,
Inc., et al. vs. CIR, L-16404, October 25, 1960). Since, in the instant case there is
no question that the employees claiming overtime compensation were still in the
service of the company when the case was filed, the jurisdiction of the Court of
Industrial Relations cannot be assailed. In fact, since it is not pretended that,
thereafter, the complainants were discharged or otherwise terminated their
relationship with the company for any reason, all of said complainants could still be
with the company up to the present.
Petitioner herein claims that the one-hour meal period should not be
considered as overtime work (after deducting 15 minutes), because the evidence
showed that complainants could rest completely, and were not in any manner under
the control of the company during that period. The court below found, on the
contrary, that during the so called meal period, the mechanics were required to
stand by for emergency work; that if they happened not to be available when called,
they were reprimanded by the leadman; that as in fact it happened on many
occasions, the mechanics had been called from their meals or told to hurry
Employees Association up eating to perform work during this period. Far from being
unsupported by substantial evidence, the record clearly confirms the above factual
findings of the Industrial Court.
Similarly, this Court is satisfied with the finding that there was no
agreement to withdraw Case No. 1055-V in consideration of the wage increases
obtained by the, union and set forth in the Collective Bargaining Agreement Exhibit
"A". As reasoned out by the court below, such alleged agreement would have been
incorporated in the contract if it existed. The fact that the union filed a motion to
dismiss without prejudice, after the Collective Bargaining Contract had been signed,
did not necessarily mean that it had agreed to withdraw the case in consideration of
the wage increases. The motion itself (Annex "B", Petition for Certiorari) was
expressly based on an understanding that the company would "formulate a schedule
of work which shall be in consonance with C. A. 444". All in all, there is substantial
evidence in the record to support the finding of the court below that no such
agreement was made.
It is next contended that in ordering the Chief of the Examining Division or
his representative to compute the compensation due, the Industrial Court unduly
delegated its judicial functions and thereby rendered an incomplete decision. We do
not believe so. Computation of the overtime pay involves a mechanical function, at
most. And the report would still have to be submitted to the Industrial Court for its
approval, by the very terms of the order itself. That there was no specification of the
amount of overtime pay in the decision did not make it incomplete, since this matter
would necessarily be made clear enough in the implementation of the decision (see
Malate Taxicab & Garage, Inc. vs. CIR, et al., L-8718, May 11, 1956).

The Industrial Court's order for permanent adoption of a straight 8-hour shift
including the meal period was but a consequence of its finding that the meal hour
was not one of complete rest, but was actually a work hour, since for its duration,
the laborers had to be on ready call. Of course, if the Company practices in this
regard should be modified to afford the mechanics a real rest during that hour (f.
ex., by installing an entirely different emergency crew, or any similar arrangement),
then the modification of this part of the decision may be sought from the Court
below. As things now stand, we see no warrant for altering the decision.
The judgment appealed from is affirmed. Costs against appellant.

C.

Covered Employees

1987 Constitution
ARTICLE III. Section 8. 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.
ARTICLE XIII. Section 3. The State shall afford full protection to labor, local
and overseas, organized and unorganized, and promote full employment
and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the right to
strike in accordance with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by
law.
The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce their mutual compliance therewith
to foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the
right of enterprises to reasonable returns to investments, and to expansion and
growth.
1.

Rule:

Art. 249. Unfair labor practices of labor organizations. It shall be unfair labor
practice for a labor organization, its officers, agents or representatives:
To restrain or coerce employees in the exercise of their right to selforganization. However, a labor organization shall have the right to prescribe its own
rules with respect to the acquisition or retention of membership;
To cause or attempt to cause an employer to discriminate against an
employee, including discrimination against an employee with respect to whom
membership in such organization has been denied or to terminate an employee on
any ground other than the usual terms and conditions under which membership or
continuation of membership is made available to other members;
To violate the duty, or refuse to bargain collectively with the employer,
provided it is the representative of the employees;

To cause or attempt to cause an employer to pay or deliver or agree to pay

or deliver any money or other things of value, in the nature of an exaction, for
services which are not performed or not to be performed, including the demand for
fee for union negotiations;
To ask for or accept negotiation or attorneys fees from employers as part
of the settlement of any issue in collective bargaining or any other dispute; or
To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the
officers, members of governing boards, representatives or agents or members of
labor associations or organizations who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable. (As amended by Batas
Pambansa Bilang 130, August 21, 1981).
BOOK V. RULE II. 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 applicant's principal
office 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.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 76273
July 31, 1987
FEU-DR. NICANOR REYES MEDICAL FOUNDATION, INC., petitioner,
vs.
HON. CRESENCIANO TRAJANO and RICARDO C. CASTRO, FAR EASTERN
UNIVERSITY DR. NICANOR REYES MEDICAL FOUNDATION, INC. ALLIANCE
OF FILIPINO WORKERS (AFW), respondents.
PARAS, J.:
This is a petition for certiorari seeking to annul and set aside the decision
of the respondent Director which affirmed the Order of the Med-Arbiter in the
petition for certification election (NCR-LRD-N-2-050-86) filed by private respondent,
thus ordering the holding of a certification election among the rank and file
employees of the herein petitioner.
The facts of the case are as follows:
The petitioner, Far Eastern University-Dr. Nicanor Reyes Memorial
Foundation, Inc., has a work force of about 350 rank and file employees, majority of
whom are members of private respondent Alliance of Filipino Workers.
On February 13, 1986, private respondent filed a Petition for Consent
and/or Certification Election with The Ministry of Labor and Employment. The
petitioner opposed the petition on the ground that a similar petition involving the
same issues and the same parties is pending resolution before the Supreme Court,
docketed as G.R. No. L-49771.
In its position paper, private respondent admitted: that as early as May 10,
1976, private respondent filed a similar petition for certification election with the
Ministry of Labor and Employment but the petition was denied by the MED Arbiter
and the Secretary of Labor on appeal, on the ground that the petitioner was a nonstock, non-profit medical institution, therefore, its employees may not form, join, or
organize a union pursuant to Article 244 of the Labor Code; that private respondent

filed a petition for certiorari with the Supreme Court (docketed as G.R. No. L-49771)
assailing the constitutionality of Article 244 of the Labor Code; that pending
resolution of the aforesaid petition, or on May 1, 1980, Batas Pambansa Bilang 70
was enacted amending Article 244 of the Labor Code, thus granting even employees
of non-stock, non-profit institutions the right to form, join and organize labor unions
of their choice; and that in the exercise of such right, private respondent filed
another petition for certification election with the Ministry of Labor and Employment
(NCR-LRD-N-2-050-86).
On April 17, 1986, the Med Arbiter issued an Order granting the petition,
declaring that a certification election be conducted to determine the exclusive
bargaining representative of all the rank and file employees of the petitioner (p. 4,
Rollo).
Respondent Director affirmed said Order on appeal. In dismissing the
appeal, however, respondent Director said that:
... respondent's (petitioner herein, reliance on the petition with the Supreme Court
involving as it does the provisions of Article 244 of the Labor Code vis-a-vis the
character of the hospital, which has been alleged as a non-profit medical
foundation, has been rendered moot and academic by virtue of the amendatory BP
#70, which allows employees of non-profit medical institutions to unionize.
Whatever doubt there may be on the right of the workers in a medical
institution has been laid to rest by BP#70.
WHEREFORE, premises considered, the present appeal is hereby dismissed
for lack of merit and the Order of the Med-Arbiter dated 17 April 1986 affirmed. ...
(p. 19, Rollo)
Hence, this petition, raising the issue of whether or not respondent Director
gravely abused his discretion in granting the petition for certification election,
despite the pendency of a similar petition before the Supreme Court (G.R. No.
49771) which involves the same parties for the same cause.
The Petition is devoid of merit.
At the time private respondent filed its petition for certification election on February
13, 1986, Article 244 of the Labor Code was already amended by Batas Pambansa
Bilang 70, to wit:
Art. 244. Coverage and employees' right to self-organization. All persons
employed
in
commercial,
industrial
and
charitable,
medical
or
educational institutions whether operating for profit or not, shall have the right to
self-organizations of their own choosing for purposes of collective bargaining.
Ambulant intermittent and itinerant workers, self-employed people, rural workers
and those without any definite employers may form labor organizations for the
purpose of enhancing and defending their interests and for their mutual aid and
protection. (underscoring supplied).
Under the aforequoted provision, there is no doubt that rank and file
employees of non-profit medical institutions (as herein petitioner) are now
permitted to form, organize or join labor unions of their choice for purposes of
collective bargaining. Since private respondent had complied with the requisites
provided by law for calling a certification election (p. 15, Rollo), it was incumbent
upon respondent Director to conduct such certification election to ascertain the
bargaining representative of petitioner's employees (Samahang Manggagawa Ng
Pacific Mills, Inc. vs. Noriel, 134 SCRA 152).
As held in Quimpo v. Dela Victoria, 46 SCRA 139, in order that the
pendency of another action between the same parties for the same cause may be
availed of as a ground to dismiss a case, there must be, between the action under
consideration and the other action: (1) Identity of parties, or at least such as
representing the same interest in both actions; (2) Identity of rights asserted and
relief prayed for, the relief being founded on the same facts; and (3) the Identity on
the two preceding particulars should be such that any judgment which may be

rendered on the other action wig, regardless of which party is successful, amount
to res judicata in the action under consideration.1avvphi1
In the instant case, any judgment which may be rendered in the petition
for certiorari pending before the Supreme Court (G. R. No. L-49771) wig not
constitute res judicata in the petition for certification election under consideration,
for while in the former, private respondent questioned the constitutionality of Article
244 of the Labor Code before its amendment, in the latter, private respondent
invokes the same article as already amended.
Petitioner, however, has pointed out that respondent Director should not
have arrogated upon himself the power to declare the aforesaid petition for
certiorari (G.R. No. L-49771) moot and academic, as the same is sub-judiceand only
the Supreme Court can decide the matter. The Director cannot be faulted for he had
to make a decision.
WHEREFORE, this petition is DISMISSED, and the decision appealed from is
hereby AFFIRMED.
SO ORDERED.
2.

Government Corporate Employees

Sec. 7. Article 250 of the Labor Code, as amended, is further amended by

deleting paragraph (f) and renumbering paragraph (g) thereof as
paragraph (f), as follows:
"Art. 250. Unfair labor practices of labor organizations. It shall be
unlawful for a labor organization, its officers, agents or representatives to
commit any of the following unfair labor practices: chanrobles virtual law
library
"(a) To restrain or coerce employees in the exercise of their right
to self-organization: Provided, That the labor organization shall have the
right to prescribe its own rules with respect to the acquisition or retention
of membership;
"(b) To cause or attempt to cause an employer to discriminate
against an employee, including discrimination against an employee with
respect to whom membership in such organization has been denied or
terminated on any ground other than the usual terms and conditions under
which membership or continuation of membership is made available to
other members;
"(c) To violate the duty, or refuse to bargain collectively with the
employer, provided that it is the representative of the employees;
"(d) To cause or attempt to cause an employer to pay or deliver or
agree to pay or deliver any money or other things of value, in the nature of
an exaction, for services which are not performed or not to be performed,
including the demand for a fee for union negotiations;
"(e) To ask for or accept negotiation or attorney's fees from
employers as part of the settlement of any issue in collective bargaining or
any other dispute; or
"(f) To violate a collective bargaining agreement.
"The provisions of the preceding paragraph notwithstanding, only
the officers, members of governing boards, representatives or agents or
members of labor associations or organizations who have actually
participated in, authorized or ratified unfair labor practices shall be held
criminally liable."
EXECUTIVE ORDER NO. 180 June 1, 1987

PROVIDING GUIDELINES FOR THE EXERCISE OF THE RIGHT TO ORGANIZE OF

GOVERNMENT EMPLOYEES, CREATING A PUBLIC SECTOR LABOR-MANAGEMENT
COUNCIL, AND FOR OTHER PURPOSES
In accordance with the provisions of the 1987 Constitution, I, CORAZON C.
AQUINO, President of the Philippines, do hereby order:
I. Coverage
Sec. 1. This Executive Order applies to all employees of all branches,
subdivisions, instrumentalities, and agencies, of the Government, including
government-owned or controlled corporations with original charters. For this
purpose, employees, covered by this Executive Order shall be referred to as
"government employees".
Sec. 2. All government employees can form, join or assist employees'
organizations of their own choosing for the furtherance and protection of their
interests. They can also form, in conjunction with appropriate government
authorities, labor-management committees, works councils and other forms of
workers' participation schemes to achieve the same objectives.
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.
Sec. 4. The Executive Order shall not apply to the members of the Armed
Forces of the Philippines, including police officers, policemen, firemen and jail
guards.
II. Protection of the Right to Organize
Sec. 5. Government employees shall not be discriminated against in
respect of their employment by reason of their membership in employees'
organizations or participation in the normal activities of their organization. Their
employment shall not be subject to the condition that they shall not join or shall
relinquish their membership in the employees' organizations.
Sec. 6. Government authorities shall not interfere in the establishment,
functioning or administration of government employees' organizations through acts
designed to place such organizations under the control of government authority.
III. Registration of Employees' Organization
Sec. 7. Government employees' organizations shall register with the Civil
Service Commission and the Department of Labor and Employment. The application
shall be filed with the Bureau of Labor Relations of the Department which shall
process the same in accordance with the provisions of the Labor Code of the
Philippines, as amended. Applications may also be filed with the Regional Offices of
the Department of Labor and Employment which shall immediately transmit the said
applications to the Bureau of Labor Relations within three (3) days from receipt
thereof.
Sec. 8. Upon approval of the application, a registration certificate be issued
to the organization recognizing it as a legitimate employees' organization with the
right to represent its members and undertake activities to further and defend its
interest. The corresponding certificates of registration shall be jointly approved by
the Chairman of the Civil Service Commission and Secretary of Labor and
Employment.
IV. Sole and Exclusive Employees' Representatives
Sec. 9. The appropriate organizational unit shall be the employers unit
consisting of rank-and-file employees unless circumstances otherwise require.

Sec. 10. The duly registered employees' organization having the support of
the majority of the employees in the appropriate organizational unit shall be
designated as the sole and exclusive representative of the employees.
Sec. 11. A duly registered employees' organization shall be accorded
voluntary recognition upon a showing that no other employees' organization is
registered or is seeking registration, based on records of the Bureau of Labor
Relations, and that the said organizations has the majority support of the rank-andfile employees in the organizational unit.
Sec. 12. Where there are two or more duly registered employees'
organizations in the appropriate organizational unit, the Bureau of Labor Relations
shall, upon petition, order the conduct of a certification election and shall certify the
winner as the exclusive representative of the rank-and-file employees in said
organization unit.
D. Terms and Conditions of Employment in Government Services
Sec. 13. Terms and conditions of employment or improvements thereof,
except those that are fixed by law, may be the subject of negotiations between duly
recognized employees' organizations and appropriate government authorities.
VI. Peaceful Concerted Activities and Strikes
Sec. 14. The Civil Service laws and rules governing concerted activities and
strikes in the government service shall be observed, subject to any legislation that
may be enacted by Congress.
VII. Public Sector Labor-Management Council
Sec. 15. A Public Sector Labor Management Council, hereinafter referred to
as the Council, is hereby constituted to be composed of the following:
1) Chairman, Civil Service Commission Chairman
2) Secretary, Department of Labor and Employment Vice Chairman
3) Secretary, Department of Finance Member
4) Secretary, Department of Justice Member
5) Secretary, Department of Budget and Management Member
The Council shall implement and administer the provisions of this Executive
Order. For this purpose, the Council shall promulgate the necessary rules and
regulations to implement this Executive Order.
VIII. Settlement of Disputes
Sec. 16. The Civil Service and labor laws and procedures, whenever
applicable, shall be followed in the resolution of complaints, grievances and cases
involving government employees. In case any dispute remains unresolved after
exhausting all the available remedies under existing laws and procedures, the
parties may jointly refer the dispute to the Council, for appropriate action.
IX. Effectivity
Sec. 17. This Executive Order shall take effect immediately.
Done in the City of Manila, this 1st day of June, in the year of Our Lord,
nineteen hundred and eighty-seven.
3.

Supervisory Employees

BOOK V. RULE I. SECTION 1

(x) "Certification Election" means the process of determining, through secret

ballot, the sole and exclusive bargaining agent of the employees in an appropriate
bargaining unit, for purposes of collective bargaining.cralaw
(h) "Local Union" means any labor organization operating at the enterprise
level.crala
(n) "Labor or Industrial Dispute" includes any controversy or matter concerning
terms or conditions of employment or the association or representation of persons
in negotiating the fixing, maintaining, changing or arranging of terms and conditions
of employment regardless of whether or not the disputants stand in the proximate
relationship of employers and employees.

FIRST DIVISION
[G.R. No. 121084. February 19, 1997]
TOYOTA MOTOR PHILIPPINES CORPORATION, petitioner, vs. TOYOTA
MOTOR PHILIPPINES CORPORATION LABOR UNION AND THE SECRETARY
OF LABOR AND EMPLOYMENT, respondents.
DECISION
KAPUNAN, J.:
On November 26, 1992, the Toyota Motor Philippines Corporation Labor
Union (TMPCLU) filed a petition for certification election with the Department of
Labor, National Capital Region, for all rank-and-file employees of the Toyota Motor
Corporation.[1]
In response, petitioner filed a Position Paper on February 23, 1993 seeking
the denial of the issuance of an Order directing the holding of a certification election
on two grounds: first, that the respondent union, being "in the process of
registration" had no legal personality to file the same as it was not a legitimate
labor organization as of the date of the filing of the petition; and second, that the
union was composed of both rank-and-file and supervisory employees in violation of
law.[2] Attached to the position paper was a list of union members and their
respective job classifications, indicating that many of the signatories to the petition
for certification election occupied supervisory positions and were not in fact rankand-file employees.[3]
The Med-Arbiter, Paterno D. Adap, dismissed respondent union's petition
for certification election for lack of merit. In his March 8, 1993 Order, the MedArbiter found that the labor organization's membership was composed of
supervisory and rank-and-file employees in violation of Article 245 of the Labor
Code,[4] and that at the time of the filing of its petition, respondent union had not
even acquired legal personality yet.[5]
On appeal, the Office of the Secretary of Labor, in a Resolution [6] dated
November 9, 1993 signed by Undersecretary Bienvenido E. Laguesma, set aside the
Med-Arbiter's Order of March 3, 1993, and directed the holding of a certification
election among the regular rank-and-file employees of Toyota Motor Corporation. In
setting aside the questioned Order, the Office of the Secretary contended that:
Contrary to the allegation of herein respondent-appellee, petitioner-appellant was
already a legitimate labor organization at the time of the filing of the petition on 26
November 1992. Records show that on 24 November 1992 or two (2) days before
the filing of the said petition, it was issued a certificate of registration.
We also agree with petitioner-appellant that the Med-Arbiter should have
not dismissed the petition for certification election based on the ground that the

proposed bargaining unit is a mixture of supervisory and rank-and-file employees,

hence, violative of Article 245 of the Labor Code as amended.
A perusal of the petition and the other documents submitted by petitionerappellant will readily show that what the former really seeks to represent are the
regular rank-and-file employees in the company numbering about 1,800 more or
less, a unit which is obviously appropriate for bargaining purposes. This being the
case, the mere allegation of respondent-appellee that there are about 42
supervisory employees in the proposed bargaining unit should have not caused the
dismissal of the instant petition. Said issue could very well be taken cared of during
the pre-election conference where inclusion/exclusion proceedings will be conducted
to determine the list of eligible voters.[7]
Not satisfied with the decision of the Office of the Secretary of Labor,
petitioner filed a Motion for Reconsideration of the Resolution of March 3, 1993,
reiterating its claim that as of the date of filing of petition for certification election,
respondent TMPCLU had not yet acquired the status of a legitimate labor
organization as required by the Labor Code, and that the proposed bargaining unit
was inappropriate.
Acting on petitioner's motion for reconsideration, the public respondent, on
July 13, 1994 set aside its earlier resolution and remanded the case to the MedArbiter concluding that the issues raised by petitioner both on appeal and in its
motion for reconsideration were factual issues requiring further hearing and
production of evidence.[8] The Order stated:
We carefully re-examined the records vis-a-vis the arguments raised by the
movant, and we note that movant correctly pointed out that petitioner submitted a
copy of its certificate of registration for the first time on appeal and that in its
petition, petitioner alleges that it is an independent organization which is in the
process of registration." Movant strongly argues that the foregoing only confirms
what it has been pointing out all along, that at the time the petition was filed
petitioner is (sic) not yet the holder of a registration certificate; that what was
actually issued on 24 November 1992 or two (2) days before the filing of the
petition was an official receipt of payment for the application fee; and, that the date
appearing in the Registration certificate which is November 24, 1992 is not the date
when petitioner was actually registered, but the date when the registration
certificate was prepared by the processor. Movant also ratiocinates that if indeed
petitioner has been in possession of the registration certificate at the time this
petition was filed on November 26, 1992, it would have attached the same to the
petition.
The foregoing issues are factual ones, the resolution of which is crucial to
the petition. For if indeed it is true that at the time of filing of the petition, the said
registration certificate has not been approved yet, then, petitioner lacks the legal
personality to file the petition and the dismissal order is proper. Sadly, we can not
resolve the said questions by merely perusing the records. Further hearing and
introduction of evidence are required. Thus, there is a need to remand the case to
the Med-Arbiter solely for the purpose.
WHEREFORE, the motion is hereby granted and our Resolution is hereby
set aside. Let the case be remanded to the Med-Arbiter for the purpose aforestated.
SO ORDERED.[9]
Pursuant to the Order, quoted above, Med-Arbiter Brigida C. Fodrigon
submitted her findings on September 28, 1994, stating the following: [10]
[T]he controvertible fact is that petitioner could not have been issued its
Certificate of Registration on November 24, 1992 when it applied for registration
only on November 23, 1992 as shown by the official receipt of payment of filing fee.
As Enrique Nalus, Chief LEO, this office, would attest in his letter dated September
8, 1994 addressed to Mr. Porfirio T. Reyes, Industrial Relations Officer of Respondent
company, in response to a query posed by the latter, "It is unlikely that an

application for registration is approved on the date that it is filed or the day
thereafter as the processing course has to pass thought routing, screening, and
assignment, evaluation, review and initialing, and approval/disapproval procedure,
among others, so that a 30-day period is provided for under the Labor Code for this
purpose, let alone opposition thereto by interested parties which must be also given
due course."
Another evidence which petitioner presented . . . is the "Union Registration
1992 Logbook of IRD" . . . and the entry date November 25, 1992 as allegedly the
date of the release of the registration certificate . . . On the other hand, respondent
company presented . . . a certified true copy of an entry on page 265 of the Union
Registration Logbook showing the pertinent facts about petitioner but which do not
show the petitioner's registration was issued on or before November 26, 1992. [11]
Further citing other pieces of evidence presented before her, the Med-Arbiter
concluded that respondent TMPCLU could not have "acquire[d] legal personality at
the time of the filing of (its) petition."[12]
On April 20, 1996, the public respondent issued a new Resolution, "directing the
conduct of a certification election among the regular rank-and-file employees of the
Toyota Motor Philippines Corporation. [13] Petitioner's motion for reconsideration was
denied by public respondent in his Order dated July 14, 1995. [14]
Hence, this special civil action for certiorari under Rule 65 of the Revised
Rules of Court, where petitioner contends that "the Secretary of Labor and
Employment committed grave abuse of discretion amounting to lack or excess of
jurisdiction in reversing, contrary to law and facts the findings of the Med-Arbiters to
the effect that: 1) the inclusion of the prohibited mix of rank-and file and
supervisory employees in the roster of members and officers of the union cannot be
cured by a simple inclusion-exclusion proceeding; and that 2) the respondent union
had no legal standing at the time of the filing of its petition for certification election.
[15]

We grant the petition.

The purpose of every certification election is to determine the exclusive
representative of employees in an appropriate bargaining unit for the purpose of
collective bargaining. A certification election for the collective bargaining process is
one of the fairest and most effective ways of determining which labor organization
can truly represent the working force. [16] In determining the labor organization
which represents the interests of the workforce, those interests must be, as far as
reasonably possible, homogeneous, so as to genuinely reach the concerns of the
individual members of a labor organization.
According to Rothenberg,[17] an appropriate bargaining unit is a group of
employees of a given employer, composed of all or less than the entire body of
employees, which the collective interests of all the employees, consistent with
equity to the employer indicate to be best suited to serve reciprocal rights and
duties of the parties under the collective bargaining provisions of law. In Belyca
Corporation v. Ferrer Calleja,[18] we defined the bargaining unit as "the legal
collectivity for collective bargaining purposes whose members have substantially
mutual bargaining interests in terms and conditions of employment as will assure to
all employees their collective bargaining rights." This in mind, the Labor Code has
made it a clear statutory policy to prevent supervisory employees from joining labor
organizations consisting of rank-and-file employees as the concerns which involve
members of either group are normally disparate and contradictory. Article 245
provides:
ART. 245 Ineligibility of managerial employees to join any labor
organization; right of supervisory employees. -- Managerial Employees are not
eligible to join, assist or form any labor organization. Supervisory employees shall
not be eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their own.

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.
It is the petitioner's contention that forty-two (42) of the respondent
union's members, including three of its officers, occupy supervisory positions. [19] In
its position paper dated February 22, 1993, petitioner identified fourteen (14) union
members occupying the position of Junior Group Chief II [20] and twenty-seven (27)
members in level five positions. Their respective job-descriptions are quoted below:
LEVEL 4 (JUNIOR GROUP CHIEF II) He is responsible for all operators and
assigned stations, prepares production reports related to daily production output.
He oversees smooth flow of production, quality of production, availability of
manpower, parts and equipments. He also coordinates with other sections in the
Production Department.
LEVEL 5 He is responsible for overseeing initial production of new models,
prepares and monitors construction schedules for new models, identifies manpower
requirements for production, facilities and equipment, and lay-out processes. He
also oversees other sections in the production process (e.g. assembly, welding,
painting)." (Annex "V" of Respondent TMP's Position Paper, which is the Job
Description for an Engineer holding Level 5 position in the Production Engineering
Section of the Production Planning and Control Department).
While there may be a genuine divergence of opinion as to whether or not
union members occupying Level 4 positions are supervisory employees, it is fairly
obvious, from a reading of the Labor Code's definition of the term that those
occupying Level 5 positions are unquestionably supervisory employees. Supervisory
employees, as defined above, are those who, in the interest of the employer,
effectively recommend managerial actions if the exercise of such authority is not
merely routinary or clerical in nature but require the use of independent judgment.
[21]
Under the job description for level five employees, such personnel all engineers
having a number of personnel under them, not only oversee production of new
models but also determine manpower requirements, thereby influencing important
hiring decisions at the highest levels. This determination is neither routine nor
clerical but involves the independent assessment of factors affecting production,
which in turn affect decisions to hire or transfer workers. The use of independent
judgment in making the decision to hire, fire or transfer in the identification of
manpower requirements would be greatly impaired if the employee's loyalties are
torn between the interests of the union and the interests of management. A
supervisory employee occupying a level five position would therefore find it difficult
to objectively identify the exact manpower requirements dictated by production
demands.
This is precisely what the Labor Code, in requiring separate unions among
rank-and-file employees on one hand, and supervisory employees on the other,
seeks to avoid. The rationale behind the Code's exclusion of supervisors from unions
of rank-and-file employees is that such employees, while in the performance of
supervisory functions, become the alter ego of management in the making and the
implementing of key decisions at the sub-managerial level. Certainly, it would be
difficult to find unity or mutuality of interests in a bargaining unit consisting of a
mixture of rank-and-file and supervisory employees. And this is so because the
fundamental test of a bargaining unit's acceptability is whether or not such a unit
will best advance to all employees within the unit the proper exercise of their

collective bargaining rights.[22] The Code itself has recognized this, in preventing
supervisory employees from joining unions of rank-and-file employees.
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.
The foregoing discussion, therefore, renders entirely irrelevant, the
technical issue raised as to whether or not respondent union was in possession of
the status of a legitimate labor organization at the time of filing, when, as petitioner
vigorously claims, the former was still at the stage of processing of its application
for recognition as a legitimate labor organization. The union's composition being in
violation of the Labor Code's prohibition of unions composed of supervisory and
rank-and-file employees, it could not possess the requisite personality to file for
recognition as a legitimate labor organization. In any case, the factual issue, albeit
ignored by the public respondent's assailed Resolution, was adequately threshed out
in the Med-Arbiter's September 28, 1994 Order.
The holding of a certification election is based on clear statutory policy
which cannot be circumvented.[23] Its rules, strictly construed by this Court, are
designed to eliminate fraud and manipulation. As we emphasized in Progressive
Development Corporation v. Secretary, Department of Labor and Employment,
[24]
the Court's conclusion should not be interpreted as impairing any union's right to
be certified as the employees' bargaining agent in the petitioner's establishment.
Workers of an appropriate bargaining unit must be allowed to freely express their
choice in an election where everything is open to sound judgment and the possibility
for fraud and misrepresentation is absent.[25]
WHEREFORE, the petition is GRANTED. The assailed Resolution dated
April 20, 1995 and Order dated July 14, 1995 of respondent Secretary of Labor are
hereby SET ASIDE. The Order dated September 28, 1994 of the Med-Arbiter is
REINSTATED.
SO ORDERED.
THIRD DIVISION
[G.R. No. 142000. January 22, 2003]
TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB
INCORPORATED, petitioner, vs. TAGAYTAY HIGHLANDS EMPLOYEES
UNION-PGTWO,respondent.
DECISION
CARPIO-MORALES, J.:
Before this Court on certiorari under Rule 45 is the petition of the Tagaytay
Highlands International Golf Club Incorporated (THIGCI) assailing the February 15,
2002 decision of the Court of Appeals denying its petition to annul the Department
of Labor and Employment (DOLE) Resolutions of November 12, 1998 and December
29, 1998.
On October 16, 1997, the Tagaytay Highlands Employees Union
(THEU)Philippine Transport and General Workers Organization (PTGWO), Local
Chapter No. 776, a legitimate labor organization said to represent majority of the
rank-and-file employees of THIGCI, filed a petition for certification election before
the DOLE Mediation-Arbitration Unit, Regional Branch No. IV.
THIGCI, in its Comment[1] filed on November 27, 1997, opposed THEUs
petition for certification election on the ground that the list of union members
submitted by it was defective and fatally flawed as it included the names and
signatures of supervisors, resigned, terminated and absent without leave (AWOL)
employees, as well as employees of The Country Club, Inc., a corporation distinct

and separate from THIGCI; and that out of the 192 signatories to the petition, only
71 were actual rank-and-file employees of THIGCI.
THIGCI thus submitted a list of the names of its 71 actual rank-and-file
employees which it annexed[2] to its Comment to the petition for certification
election. And it therein incorporated the following tabulation [3] showing the number
of signatories to said petition whose membership in the union was being questioned
as disqualified and the reasons for disqualification:
# of Signatures 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 MedArbiter should, pursuant to Article 257 of the Labor Code and Section 11, Rule XI of
DOLE Department Order No. 09, automatically order the conduct of a certification
election.
By Order of January 28, 1998, [8] DOLE Med-Arbiter Anastacio Bactin ordered the
holding of a certification election among the rank-and-file employees of THIGCI in
this wise, quotedverbatim:
We evaluated carefully this instant petition and we are of the opinion that it
is complete in form and substance. In addition thereto, the accompanying
documents show that indeed petitioner union is a legitimate labor
federation and its local/chapter was duly reported to this Office as one of
its affiliate local/chapter. Its due reporting through the submission of all the
requirements for registration of a local/chapter is a clear showing that it was already
included in the roster of legitimate labor organizations in this Office pursuant to
Department Order No. 9 Series of 1997 with all the legal right and personality to
institute this instant petition. Pursuant therefore to the provisions of Article 257 of
the Labor Code, as amended, and its Implementing Rules as amended by
Department Order No. 9, since the respondents establishment is unorganized, the
holding of a certification election is mandatory for it was clearly established that
petitioner is a legitimate labor organization. Giving due course to 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 MedArbiter 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 COULD SIMPLY 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 viceversa.
Citing Toyota[19] which held that a labor organization composed of both
rank-and-file and supervisory employees is no labor organization at all, and the
subsequent case of Progressive Development Corp. Pizza Hut v. Ledesma [20] which
held that:
The Labor Code requires that in organized and unorganized establishments,
a petition for certification election must be filed by a legitimate labor
organization. The acquisition of rights by any union or labor organization,
particularly the right to file a petition for certification election, first and foremost,
depends on whether or not the labor organization has attained the status of a
legitimate labor organization.
In the case before us, the Med-Arbiter summarily disregarded the
petitioners prayer that the former look into the legitimacy of the respondent Union
by a sweeping declaration that the union was in the possession of a charter
certificate so that for all intents and purposes, Sumasaklaw sa Manggagawa sa Pizza
Hut (was) a legitimate organization,[21] (Underscoring and emphasis supplied),
petitioner contends that, quoting Toyota, [i]t becomes necessary . . ., anterior to
the granting of an order allowing a certification election, to inquire into the
composition of any labor organization whenever the status of the labor organization
is challenged on the basis of Article 245 of the Labor Code.[22]
Continuing, petitioner argues that without resolving the status of THEU, the
DOLE Undersecretary conveniently deferred the resolution on the serious infirmity in
the membership of [THEU] and ordered the holding of the certification election
which is frowned upon as the following ruling of this Court shows:
We also do not agree with the ruling of the respondent Secretary of Labor that the
infirmity in the membership of the respondent union can be remedied in the preelection conference thru the exclusion-inclusion proceedings wherein those
employees who are occupying rank-and-file positions will be excluded from the list
of eligible voters. Public respondent gravely misappreciated the basic antipathy
between the interest of supervisors and the interest of rank-and-file employees. Due
to the irreconcilability of their interest we held in Toyota Motor Philippines v. Toyota
Motors Philippines Corporation Labor Union, viz:
xxx

Clearly, based on this provision [Article 245], a labor organization

composed of both rank-and-file and supervisory employees is no labor organization
at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not
being one, an organization which carries a mixture of rank-and-file and supervisory
employees cannot posses any of the rights of a legitimate labor organization,
including the right to file a petition for certification election for the purpose of
collective bargaining. It becomes necessary, therefore, anterior to the granting of
an order allowing a certification election, to inquire into the composition of any
labor organization whenever the status of the labor organization is challenged on
the basis of Article 245 of the Labor Code. (Emphasis by petitioner) (Dunlop
Slazenger
(Phils.),
v.
Secretary
of
Labor,
300
SCRA
120
[1998]; Underscoring and emphasis supplied by petitioner.)
The petition fails. After a certificate of registration is issued to a union, its
legal personality cannot be subject to collateral attack. It may be questioned only in
an independent petition for cancellation in accordance with Section 5 of Rule V, Book
IV of the Rules to Implement the Labor Code (Implementing Rules) which section
reads:
Sec. 5. Effect of registration. The labor organization or workers association
shall be deemed registered and vested with legal personality on the date of issuance
of its certificate of registration. Such legal personality cannot thereafter be subject
to collateral attack, but may be questioned only in an independent petition
for cancellation in accordance with these Rules. (Emphasis supplied)
The grounds for cancellation of union registration are provided for under
Article 239 of the Labor Code, as follows:
Art. 239. Grounds for cancellation of union registration. The following shall
constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the
adoption or ratification of the constitution and by-laws or amendments thereto, the
minutes of ratification, and the list of members who took part in the ratification;
(b) Failure to submit the documents mentioned in the preceding paragraph
within thirty (30) days from adoption or ratification of the constitution and by-laws
or amendments thereto;
(c) Misrepresentation, false statements or fraud in connection with
the election of officers, minutes of the election of officers, the list of voters, or
failure to subject these documents together with the list of the newly
elected/appointed officers and their postal addresses within thirty (30) days from
election;
(d) Failure to submit the annual financial report to the Bureau within thirty
(30) days after the losing of every fiscal year and misrepresentation, false entries or
fraud in the preparation of the financial report itself;
(e) Acting as a labor contractor or engaging in the cabo system, or
otherwise engaging in any activity prohibited by law;
(f) Entering into collective bargaining agreements which provide terms and
conditions of employment below minimum standards established by law;
(g) Asking for or accepting attorneys fees or negotiation fees from
employers;
(h) Other than for mandatory activities under this Code, checking off
special assessments or any other fees without duly signed individual written
authorizations of the members;
(i) Failure to submit list of individual members to the Bureau once a year or
whenever required by the Bureau; and
(j) Failure to comply with the requirements under Articles 237 and 238, (Emphasis
supplied), while the procedure for cancellation of registration is provided for in Rule
VIII, Book V of the Implementing Rules.

The inclusion in a union of disqualified employees is not among the

grounds for cancellation, unless such inclusion is due to misrepresentation, false
statement or fraud under the circumstances enumerated in Sections (a) and
(c) of Article 239 of above-quoted Article 239 of the Labor Code.
THEU, having been validly issued a certificate of registration, should be
considered to have already acquired juridical personality which may not be assailed
collaterally.
As for petitioners allegation that some of the signatures in the petition for
certification election were obtained through fraud, false statement and
misrepresentation, the proper procedure is, as reflected above, for it to file a
petition for cancellation of the certificate of registration, and not to intervene in a
petition for certification election.
Regarding the alleged withdrawal of union members from participating in
the certification election, this Courts following ruling is instructive:
[T]he best forum for determining whether there were indeed retractions from some
of the laborers is in the certification election itself wherein the workers can freely
express their choice in a secret ballot.Suffice it to say that the will of the rank-andfile 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 title given to the job which determines whether the employee
has rank-and-file or managerial status or whether he is a supervisory
employee. (Emphasis supplied).[27]
WHEREFORE, the petition is hereby DENIED. Let the records of the case be
remanded to the office of origin, the Mediation-Arbitration Unit, Regional Branch No.
IV, for the immediate conduct of a certification election subject to the usual preelection conference.
SO ORDERED.
4.

Aliens

Art. 275. Tripartism and tripartite conferences.

Tripartism in labor relations is hereby declared a State policy. Towards this
end, workers and employers shall, as far as practicable, be represented in decision
and policy-making bodies of the government.

The Secretary of Labor and Employment or his duly authorized

representatives may, from time to time, call a national, regional, or industrial
tripartite conference of representatives of government, workers and employers for
the consideration and adoption of voluntary codes of principles designed to promote
industrial peace based on social justice or to align labor movement relations with
established priorities in economic and social development. In calling such
conference, the Secretary of Labor and Employment may consult with accredited
representatives of workers and employers. (As amended by Section 32, Republic Act
No. 6715, March 21, 1989)
Art. 276. Government employees. The terms and conditions of employment of all
government employees, including employees of government-owned and controlled
corporations, shall be governed by the Civil Service Law, rules and regulations. Their
salaries shall be standardized by the National Assembly as provided for in the New
Constitution. However, there shall be no reduction of existing wages, benefits and
other terms and conditions of employment being enjoyed by them at the time of the
adoption of this Code.
5.

Security Guards

EXECUTIVE ORDER NO. 111 December 24, 1986

AMENDING CERTAIN PROVISIONS OF THE LABOR CODE OF THE PHILIPPINES, AS
AMENDED
WHEREAS, the welfare of the workers is primary concern of the
government;
WHEREAS, it is necessary to amend or repeal provisions of laws, that
repress the rights of workers and of their trade unions;
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do
hereby order:
Sec. 1. Articles 60 and 61 of the Labor Code of the Philippines are hereby amended
to read as follows:
"Art. 60. Employment of apprentices. Only employers in the highly
technical industries may employ apprentices and only in apprenticeable occupations
approved by the Minister of Labor and Employment."
"Art. 61. Contents of apprenticeship agreements. Apprenticeship
agreements, including wage rates of apprentices, shall conform to the rules issued
by the Minister of Labor and Employment. The period of apprenticeship shall not
exceed six months. Apprenticeship agreements providing for wage rates below the
legal minimum wage, which in no case shall start below 75 per cent of the
applicable minimum wage, may entered into only in accordance with apprenticeship
programs duly approved by the Minister of Labor and Employment. The Ministry
shall develop standard model programs of apprenticeship."
Sec. 2. Article 128 (b) of the Labor Code of the Philippines is hereby further
amended to read as follows:
"(b) The provisions of Article 217 of this Code to the contrary
notwithstanding and in cases where the relationship of employer-employee still
exists, the Minister of Labor and Employment or his duly authorized representatives
shall have the power to order and administer, after due notice and hearing,
compliance with the labor standards provisions of this Code and other labor
legislation based on the findings of labor regulation officers or industrial safety
engineers made in the course of inspection, and to issue writs of execution to the
appropriate authority for the enforcement of their order, except in cases where the
employer contests the findings of the labor regulation officer and raises issues which

cannot be resolved without considering evidentiary matters that are not verifiable in
the normal course of inspection."
Sec. 3. Paragraph (c) of Article 211 of the Labor Code of the Philippines is hereby
amended to read as follows:
"(c) to foster the free and voluntary organization of a strong and united
labor movement;"
Sec. 4. Paragraph (c) of Article 234 of the Labor Code of the Philippines is hereby
further amended to read as follows:
"(c) The names of all its members comprising at least 20 percent of all the
employees in the bargaining unit where it seeks to operates;"
Sec. 5. The provisions of Article 258 and the second paragraphs of Article 239 and
241 of the Labor Code of the Philippines relating to the restructuring of the labor
movement along one-union-one industry policy, are hereby repealed.
Sec. 6. Article 245 of the Labor Code of the Philippines is hereby amended to read
as follows:
"Art. 245. Right of Employees in the public service. Employees of
government corporations established under the Corporation Code shall have the
right to organize and to bargain collectively with their respective employees. All
other employees in the civil service shall have the right to form associations for
purposes not contrary to law."
Sec. 7. Articles 257 and 258 of the Labor Code of the Philippines are hereby
amended to read as follows:
"Art. 257. Representation issues 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 six-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 run-off election shall be conducted between the choices receiving the choices
receiving the two highest number of votes."
"Art. 258. Petitions in unorganized establishments. In any establishments
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
a least twenty (20%) per cent 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."
Sec. 8. Paragraph (c) and (f) of Article 264 of the Labor Code of the Philippines are
hereby further amended to read as follows:
"(c) In cases of bargaining deadlocks, the duly certified or recognized
bargaining agent may file a notice of strike or the employer may file a notice of
lockout with the Ministry at least 30 days before the intended date thereof. In cases
of unfair labor practice, the period of notice shall be 15 days and in the absence of a
duly certified or recognized bargaining agent, the notice of strike may be filed by a
any legitimate labor organization in behalf of its members. However, in case of
dismissal from employment of union officers duly elected in accordance with the

union constitution and by-laws, which may constitute a union busting where the
existence of the union is threatened, the 15-day cooling-off period shall not apply
and the union may take action immediately."
"(f) A decision to declare a strike must be approved by a majority of the
total union membership in the bargaining unit concerned, obtained by secret ballot
in meeting or referenda called for that purpose. A decision to declare a lockout must
be approved by a majority of the board of directors of the corporation or association
or the partners in a partnership, obtained by secret ballot in a meeting called for
that purpose. The decision shall be valid for the duration of the dispute based on
substantially the same grounds considered when the strike or lockout vote was
taken. The Ministry may, at its own initiative or upon the request of any affected
party, supervise the conduct of the secret balloting. In every case, the union or the
employer shall furnish the Ministry the results of the voting at least seven days
before the intended strike or lockout, subject to the cooling-off period herein
provided."
Sec. 9. Paragraph (d) of Article 265 of the Labor Code of the Philippines is hereby
further amended to read as follows:
"(d) No public official or employee, including officers and personnel of the
New Armed Forces of the Philippines or the Integrated National Police, or armed
person, shall bring in, introduce or escort in any manner any individual who seeks to
replace strikers in entering or leaving the premises of a strike area, or work in place
of the strikers. The police force shall keep out of the picket lines unless actual
violence or other criminal acts occur therein: Provided, That nothing herein shall be
interpreted to prevent any public officer from taking any measure necessary to
maintain peace and order, protect life and property, and/or enforce the law and legal
orders."
Sec. 10. The Ministry of Labor and Employment shall cause the renumbering of the
affected provisions of the Labor Code of the Philippines, amended.
Sec. 11. The Ministry of Labor and Employment shall promulgate the necessary
rules and regulations to implement the provisions of this Executive Order.
Sec. 12. Letter of Instructions No. 1458 date May 1, 1985 is hereby repealed insofar
as it allows management to replace striking workers who defy return-to work
orders. All other laws, orders, issuances, rules and regulations or parts thereof
inconsistent with this Executive Order are hereby repealed or modified accordingly.
Sec. 13. This Executive Order shall take effect fifteen (15) days after its publication
in the Official Gazette.
DONE in the City of Manila, this 24th day of December in the year of Our
Lord, nineteen hundred and eighty-six.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 91902
May 20, 1991
MANILA ELECTRIC COMPANY, petitioner,
vs.
THE HON. SECRETARY OF LABOR AND EMPLOYMENT, STAFF AND

TECHNICAL EMPLOYEES ASSOCIATION OF MERALCO, and FIRST LINE

ASSOCIATION OF MERALCO SUPERVISORY EMPLOYEES,respondents.
MEDIALDEA, J.:
This petition seeks to review the Resolution of respondent Secretary of
Labor and Employment Franklin M. Drilon dated November 3, 1989 which affirmed
an Order of Med-Arbiter Renato P. Parungo (Case No. NCR-O-D-M-1-70), directing
the holding of a certification election among certain employees of petitioner Manila
Electric Company (hereafter "MERALCO") as well as the Order dated January 16,
1990 which denied the Motion for Reconsideration of MERALCO.
The facts are as follows:
On November 22, 1988, the Staff and Technical Employees Association of
MERALCO (hereafter "STEAM-PCWF") a labor organization of staff and technical
employees of MERALCO, filed a petition for certification election, seeking to
represent regular employees of MERALCO who are: (a) non-managerial employees
with Pay Grades VII and above; (b) non-managerial employees in the Patrol
Division, Treasury Security Services Section, Secretaries who are automatically
removed from the bargaining unit; and (c) employees within the rank and file unit
who are automatically disqualified from becoming union members of any
organization within the same bargaining unit.
Among others, the petition alleged that "while there exists a dulyorganized union for rank and file employees in Pay Grade I-VI, which is the
MERALCO Employees and Worker's Association (MEWA) which holds a valid CBA for
the rank and file employees, 1 there is no other labor organization except STEAMPCWF claiming to represent the MERALCO employees.
The petition was premised on the exclusion/disqualification of certain
MERALCO employees pursuant to Art. I, Secs. 2 and 3 of the existing MEWA CBA as
follows:
ARTICLE I SCOPE
xxx
xxx
xxx
Sec. 2. Excluded from the appropriate bargaining unit and therefore
outside the scope of this Agreement are:
(a) Employees in Patrol Division;
(b) Employees in Treasury Security Services Section;
(c) Managerial Employees; and
(d) Secretaries.
Any member of the Union who may now or hereafter be assigned or
transferred to Patrol Division or Treasury Security Services Section, or becomes
Managerial Employee or a Secretary, shall be considered automatically removed
from the bargaining unit and excluded from the coverage of this agreement. He
shall thereby likewise be deemed automatically to have ceased to be member of the
union, and shall desist from further engaging in union activity of any kind.
Sec. 3. Regular rank-and-file employees in the organization elements
herein below listed shall be covered within the bargaining unit, but shall be
automatically disqualified from becoming union members:
1. Office of the Corporate Secretary
2. Corporate Staff Services Department
3. Managerial Payroll Office
4. Legal Service Department
5. Labor Relations Division
6. Personnel Administration Division
7. Manpower Planning & Research Division
8. Computer Services Department
9. Financial Planning & Control Department

10. Treasury Department, except Cash Section

11. General Accounting Section
xxx
xxx
xxx
(p. 19, Rollo)
MERALCO moved for the dismissal of the petition on the following grounds:
I
The employees sought to be represented by petitioner are either 1)
managerial who are prohibited by law from forming or joining supervisory union; 2)
security services personnel who are prohibited from joining or assisting the rankand-file union; 3) secretaries who do not consent to the petitioner's representation
and whom petitioner can not represent; and 4) rank-and-file employees represented
by the certified or duly recognized bargaining representative of the only rank-andfile bargaining unit in the company, the Meralco Employees Workers Association
(MEWA), in accordance with the existing Collective Bargaining Agreement with the
latter.
II
The petition for certification election will disturb the administration of the
existing Collective Bargaining Agreement in violation of Art. 232 of the Labor Code.
III
The petition itself shows that it is not supported by the written consent of
at least twenty percent (20%) of the alleged 2,500 employees sought to be
represented. (Resolution, Sec. of Labor, pp. 223-224, Rollo)
Before Med-Arbiter R. Parungo, MERALCO contended that employees from
Pay Grades VII and above are classified as managerial employees who, under the
law, are prohibited from forming, joining or assisting a labor organization of the
rank and file. As regards those in the Patrol Division and Treasury Security Service
Section, MERALCO maintains that since these employees are tasked with providing
security to the company, they are not eligible to join the rank and file bargaining
unit, pursuant to Sec. 2(c), Rule V, Book V of the then Implementing Rules and
Regulations of the Labor Code (1988) which reads as follows:
Sec. 2. Who may file petition. The employer or any legitimate labor
organization may file the petition.
The petition, when filed by a legitimate labor organization, shall contain,
among others:
xxx
xxx
xxx
(c) description of the bargaining unit which shall be the employer unit
unless circumstances otherwise require, and provided, further: that the appropriate
bargaining unit of the rank and file employees shall not include security guards (As
amended by Sec. 6, Implementing Rules of EO 111)
xxx
xxx
xxx
(p. 111, Labor Code, 1988 Ed.)
As regards those rank and file employees enumerated in Sec. 3, Art. I,
MERALCO contends that since they are already beneficiaries of the MEWA-CBA, they
may not be treated as a separate and distinct appropriate bargaining unit.
MERALCO raised the same argument with respect to employees sought to be
represented by STEAM-PCWF, claiming that these were already covered by the
MEWA-CBA.
On March 15, 1989, the Med-Arbiter ruled that having been excluded from
the existing Collective Bargaining Agreement for rank and file employees, these
employees have the right to form a union of their own, except those employees
performing managerial functions. With respect to those employees who had
resented their alleged involuntary membership in the existing CBA, the Med-Arbiter
stated that the holding of a certification election would allow them to fully translate
their sentiment on the matter, and thus directed the holding of a certification
election. The dispositive portion of the Resolution provides as follows:

WHEREFORE, premises considered, a certification election is hereby

ordered conducted among the regular rank-and-file employees of MERALCO to wit:
1. Non-managerial employees with Pay Grades VII and above;
2. Non-managerial employees of Patrol Division, Treasury Security Services Section
and Secretaries; and
3. Employees prohibited from actively participating as members of the union.
within 20 days from receipt hereof, subject to the usual pre-election conference with
the following choices:
1. Staff and Technical, Employees Association of MERALCO (STEAM-PCWF);
2. No Union.
SO ORDERED. (p. 222, Rollo)
On April 4, 1989, MERALCO appealed, contending that "until such time that
a judicial finding is made to the effect that they are not managerial employee,
STEAM-PCWF cannot represent employees from Pay Grades VII and above,
additionally reiterating the same reasons they had advanced for disqualifying
respondent STEAM-PCWF.
On April 7, 1989, MEWA filed an appeal-in-intervention, submitting as
follows:
A. The Order of the Med-Arbiter is null and void for being in violation of Article 245
of the Labor Code;
B. The Order of the Med-Arbiter violates Article 232 of the Labor Code; and
C. The Order is invalid because the bargaining unit it delineated is not an
appropriated (sic) bargaining unit.
On May 4, 1989, STEAM-PCWF opposed the appeal-in-intervention.
With the enactment of RA 6715 and the rules and regulations implementing
the same, STEAM-PCWF renounced its representation of the employees in Patrol
Division, Treasury Security Services Section and rank-and-file employees in Pay
Grades I-VI.
On September 13, 1989, the First Line Association of Meralco
Supervisory Employees. (hereafter FLAMES) filed a similar petition (NCR-OD-M-9731-89) seeking to represent those employees with Pay Grades VII to XIV, since
"there is no other supervisory union at MERALCO." (p. 266,Rollo). The petition was
consolidated with that of STEAM-PCWF.
On November 3, 1989, the Secretary of Labor affirmed with modification,
the assailed order of the Med-Arbiter, disposing as follows:
WHEREFORE, premises considered, the Order appealed from is hereby affirmed but
modified as far as the employees covered by Section 3, Article I of the exist CBA in
the Company are concerned. Said employees shall remain in the unit of the rankand-file already existing and may exercise their right to self organization as above
enunciated.
Further, the First Line Association of Meralco Supervisory Employees
(FLAMES) is included as among the choices in the certification election.
Let, therefore, the pertinent records of the case be immediately forwarded to the
Office of origin for the conduct of the certification election.
SO ORDERED. (p. 7, Rollo)
MERALCO's motion for reconsideration was denied on January 16, 1990.
On February 9, 1990, MERALCO filed this petition, premised on the
following ground:
RESPONDENT SECRETARY ACTED WITH GRAVE ABUSE OF DISCRETION
AND/OR IN EXCESS OF JURISDICTION AMOUNTING TO LACK OF JURISDICTION IN
RULING THAT:
I. ANOTHER RANK-AND-FILE BARGAINING UNIT CAN BE ESTABLISHED
INDEPENDENT, DISTINCT AND SEPARATE FROM THE EXISTING RANK-AND-FILE
BARGAINING UNIT.

II. THE EMPLOYEES FROM PAY GRADES VII AND ABOVE ARE RANK-ANDFILE EMPLOYEES.
III. THE SECURITY GUARDS OR PERSONNEL MAY BE LUMPED TOGETHER
WITH THE RANK-AND-FILE UNION AND/OR THE SUPERVISORY UNION. (p. 8, Rollo)
On February 26, 1990, We issued a temporary restraining order (TRO)
against the implementation of the disputed resolution.
In its petition, MERALCO has relented and recognized respondents STEAM-PCWF
and FLAMES' desired representation of supervisory employees from Grades VII up.
However, it believes that all that the Secretary of Labor has to do is to establish a
demarcation line between supervisory and managerial rank, and not to classify
outright the group of employees represented by STEAM-PCWF and FLAMES as rank
and file employees.
In questioning the Secretary of Labor's directive allowing security guards
(Treasury/Patrol Services Section) to be represented by respondents, MERALCO
contends that this contravenes the provisions of the recently passed RA 6715 and
its implementing rules (specifically par. 2, Sec. 1, Rule II, Book V) which disqualifies
supervisory employees and security guards from membership in a labor
organization of the rank and file (p. 11, Rollo).
The Secretary of Labor's Resolution was obviously premised on the
provisions of Art. 212, then par. (k), of the 1988 Labor Code defining "managerial"
and "rank and file" employees, the law then in force when the complaint was filed.
At the time, only two groups of employees were recognized, the managerial and
rank and file. This explains the absence of evidence on job descriptions on who
would be classified managerial employees. It is perhaps also for this reason why the
Secretary of Labor limited his classification of the Meralco employees belonging to
Pay Grades VII and up, to only two groups, the managerial and rank and file.
However, pursuant to the Department of Labor's goal of strenghthening the
constitutional right of workers to self-organization, RA 6715 was subsequently
passed which reorganized the employee-ranks by including a third group, or the
supervisory employees, and laying down the distinction between supervisory
employees and those of managerial ranks in Art. 212, renumbered par. [m],
depending on whether the employee concerned has the power to lay down and
execute management policies, in the case of managerial employees, or merely to
recommend them, in case of supervisory employees.
In this petition, MERALCO has admitted that the employees belonging to
Pay Grades VII and up are supervisory (p. 10, Rollo). The records also show that
STEAM-PCWF had "renounced its representation of the employees in Patrol Division,
Treasury Security Service Section and rank and file employees in Pay Grades I-VI"
(p. 6, Rollo); while FLAMES, on the other hand, had limited its representation to
employees belonging to Pay Grades VII-XIV,generally accepted as supervisory
employees, as follows:
It must be emphasized that private respondent First Line Association of
Meralco Supervisory Employees seeks to represent only the Supervisory Employees
with Pay Grades VII to XIV.
Supervisory Employees with Pay Grades VII to XIV are not managerial
employees. In fact the petition itself of petitioner Manila Electric Company on page
9, paragraph 3 of the petition stated as follows, to wit:
There was no need for petitioner to prove that these employees are not
rank-and-file. As adverted to above, the private respondents admit that these are
not the rank-and-file but the supervisory employees, whom they seek to represent.
What needs to be established is the rank where supervisory ends and managerial
begins.
and First Line Association of Meralco Supervisory Employees herein states
that Pay Grades VII to XIV are not managerial employees. In fact, although
employees with Pay Grade XV carry the Rank of Department Managers, these

employees only enjoys (sic) the Rank Manager but their recommendatory powers
are subject to evaluation, review and final action by the department heads and
other higher executives of the company. (FLAMES' Memorandum, p. 305, Rollo)
Based on the foregoing, it is clear that the employees from Pay Grades VII and up
have been recognized and accepted as supervisory. On the other hand, those
employees who have been automatically disqualified have been directed by the
Secretary of Labor to remain in the existing labor organization for the rank and file,
(the condition in the CBA deemed as not having been written into the contract, as
unduly restrictive of an employee's exercise of the right to self-organization). We
shall discuss the rights of the excluded employees (or those covered by Sec. 2, Art.
I, MEWA-CBA later.
Anent the instant petition therefore, STEAM-PCWF, and FLAMES would
therefore represent supervisory employees only. In this regard, the authority given
by the Secretary of Labor for the establishment of two labor organizations for the
rank and file will have to be disregarded since We hereby uphold certification
elections only for supervisory employees from Pay Grade VII and up, with STEAMPCWF and FLAMES as choices.
As to the alleged failure of the Secretary of Labor to establish a
demarcation line for purposes of segregating the supervisory from the managerial
employees, the required parameter is really not necessary since the law itself, Art.
212-m, (as amended by Sec. 4 of RA 6715) has already laid down the
corresponding guidelines:
Art. 212. Definitions. . . .
(m) "Managerial employee" is one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory
employees are those who, in the interest of the employer, effectively recommend
such managerial actions if the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment. All employees not
falling within any of the above definitions are considered rank-and-file employees for
purposes of to Book.
In his resolution, the Secretary of Labor further elaborated:
. . . Thus, the determinative factor in classifying an employee as managerial,
supervisory or rank-and-file is the nature of the work of the employee concerned.
In National Waterworks and Sewerage Authority vs. National Waterworks and
Sewerage Authority Consolidated Unions (11 SCRA 766) the Supreme Court had the
occasion to come out with an enlightening dissertation of the nature of the work of
a managerial employees as follows:
. . . that the employee's primary duty consists of the management of the
establishment or of a customarily recognized department or subdivision thereof,
that he customarily and regularly directs the work of other employees therein, that
he has the authority to hire or discharge other employees or that his suggestions
and recommendations as to the hiring and discharging and or to the advancement
and promotion or any other change of status of other employees are given
particular weight, that he customarily and regularly exercises discretionary powers .
. . (56 CJS, pp. 666-668. (p. 226, Rollo)
We shall now discuss the rights of the security guards to self-organize.
MERALCO has questioned the legality of allowing them to join either the rank and
file or the supervisory union, claiming that this is a violation of par. 2, Sec. 1, Rule
II, Book V of the Implementing Rules of RA 6715, which states as follows:
Sec 1. Who may join unions. . . .
xxx
xxx
xxx
Supervisory employees and security guards shall not be eligible for
membership in a labor organization of the rank-and-file employees but may join,
assist or form separate labor organizations of their own; . . .

xxx
xxx
xxx
(emphasis ours)
Paragraph 2, Sec. 1, Rule II, Book V, is similar to Sec. 2 (c), Rule V, also of
Book V of the implementing rules of RA 6715:
Rule V.
REPRESENTATION CASES AND
INTERNAL-UNION CONFLICTS
Sec. 1. . . .
Sec. 2. Who may file.Any legitimate labor organization or the employer, when
requested to bargain collectively, may file the petition.
The petition, when filed by a legitimate labor-organization shall contain, among
others:
(a) . . .
(b) . . .
(c) description of the bargaining unit which shall be the employer unit
unless circumstances otherwise require; and provided further, that the appropriate
bargaining unit of the rank-and-file employees shall not include supervisory
employees and/or security guards;
xxx
xxx
xxx
(emphasis ours)
Both rules, barring security guards from joining a rank and file
organization, appear to have been carried over from the old rules which
implemented then Art. 245 of the Labor Code, and which provided thus:
Art. 245. Ineligibility of security personnel to join any labor organization.
Security guards and other personnel employed for the protection and security of the
person, properties and premises of the employer shall not be eligible for
membership in any labor organization.
On December 24, 1986, Pres. Corazon C. Aquino issued E.O. No. 111
which eliminated the above-cited provision on the disqualification of security guards.
What was retained was the disqualification of managerial employees, renumbered
as Art. 245 (previously Art. 246), as follows:
Art. 245. Ineligibility of managerial employees to joint any labor
organization.Managerial employees are not eligible to join, assist or form any
labor organization.
With the elimination, security guards were thus free to join a rank and file
organization.
On March 2, 1989, the present Congress passed RA 6715. 2 Section 18
thereof amended Art. 245, to read as follows:
Art. 245. Ineligibility of managerial employees to join any labor
organization; right of supervisory employees.Managerial employees are not
eligible to join, assist or form any labor organization. Supervisory employees shall
not be eligible for membership in a labor organization of the rank-and-file
employees but may join, assist, or form separate labor organizations of their own.
(emphasis ours)
As will be noted, the second sentence of Art. 245 embodies an amendment
disqualifying supervisory employees from membership in a labor organization of the
rank-and-file employees. It does not include security guards in the disqualification.
The implementing rules of RA 6715, therefore, insofar as they disqualify security
guards from joining a rank and file organization are null and void, for being not
germane to the object and purposes of EO 111 and RA 6715 upon which such rules
purportedly derive statutory moorings. In Shell Philippines, Inc. vs. Central Bank,
G.R. No. 51353, June 27, 1988, 162 SCRA 628, We stated:
The rule-making power must be confined to details for regulating the mode
or proceeding to carry into effect the law as it has been enacted. The power cannot
be extended to amending or expanding the statutory requirements or to embrace

matters not covered by the statute. Rules that subvert the statute cannot be
sanctioned. (citing University of Sto. Tomas vs. Board of Tax Appeals, 93 Phil. 376).
While therefore under the old rules, security guards were barred from joining a
labor organization of the rank and file, under RA 6715, they may now freely join a
labor organization of the rank and file or that of the supervisory union, depending
on their rank. By accommodating supervisory employees, the Secretary of Labor
must likewise apply the provisions of RA 6715 to security guards by favorably
allowing them free access to a labor organization, whether rank and file or
supervisory, in recognition of their constitutional right to self-organization.
We are aware however of possible consequences in the implementation of
the law in allowing security personnel to join labor unions within the company they
serve. The law is apt to produce divided loyalties in the faithful performance of their
duties. Economic reasons would present the employees concerned with the
temptation to subordinate their duties to the allegiance they owe the union of which
they are members, aware as they are that it is usually union action that obtains for
them increased pecuniary benefits.
Thus, in the event of a strike declared by their union, security personnel
may neglect or outrightly abandon their duties, such as protection of property of
their employer and the persons of its officials and employees, the control of access
to the employer's premises, and the maintenance of order in the event of
emergencies and untoward incidents.
It is hoped that the corresponding amendatory and/or suppletory laws be
passed by Congress to avoid possible conflict of interest in security
personnel.1wphi1
ACCORDINGLY, the petition is hereby DISMISSED. We AFFIRM with modification the
Resolution of the Secretary of Labor dated November 3, 1989 upholding an
employee's right to self-organization. A certification election is hereby ordered
conducted among supervisory employees of MERALCO, belonging to Pay Grades VII
and above, using as guideliness an employee's power to either recommend or
execute management policies, pursuant to Art. 212 (m), of the Labor Code, as
amended by Sec. 4 of RA 6715, with respondents STEAM-PCWF and FLAMES as
choices.
Employees of the Patrol Division, Treasury Security Services Section and
Secretaries may freely join either the labor organization of the rank and file or that
of the supervisory union depending on their employee rank. Disqualified employees
covered by Sec. 3, Art. I of the MEWA-CBA, shall remain with the existing labor
organization of the rank and file, pursuant to the Secretary of Labor's directive:
By the parties' own agreement, they find the bargaining unit, which includes the
positions enumerated in Section 3, Article I of their CBA, appropriate for purposes of
collective bargaining. The composition of the bargaining unit should be left to the
agreement of the parties, and unless there are legal infirmities in such agreement,
this Office will not substitute its judgment for that of the parties. Consistent with the
story of collective bargaining in the company, the membership of said group of
employees in the existing rank-and-file unit should continue, for it will enhance
stability in that unit already well establish. However, we cannot approve of the
condition set in Section 3, Article I of the CBA that the employees covered are
automatically disqualified from becoming union members. The condition unduly
restricts the exercise of the right to self organization by the employees in question.
It is contrary to law and public policy and, therefore, should be considered to have
not been written into the contract. Accordingly, the option to join or not to join the
union should be left entirely to the employees themselves. (p. 229, Rollo)
The Temporary Restraining Order (TRO) issued on February 26, 1990 is
hereby LIFTED. Costs against petitioner.
SO ORDERED.

D.

Excluded Employees
1.

Managerial Employees
Republic of the Philippines
Congress of the Philippines
Metro Manila
Thirteenth Congress
Third Special Session

Begun and held in Metro Manila, on Monday, the nineteenth day of February, two
thousand seven.
Republic Act No. 9481
AN ACT STRENGTHENING THE WORKERS' CONSTITUTIONAL RIGHT TO SELFORGANIZATION, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 442,
AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES
Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:
SECTION 1. Article 234 of Presidential Decree No. 442, as amended,
otherwise known as the Labor Code of the Philippines, is hereby further amended to
read as follows:
"ART. 234. Requirements of Registration. - A federation, national union or industry
or trade union center or an independent union 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 based on the following
requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers
who participated in such meetings;
(c) In case the applicant is an independent union, the names of all its members
comprising at least twenty percent (20%) of all the employees in the bargaining
unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its
annual financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification, and the list of the members who participated in it."
SEC. 2. A new provision is hereby inserted into the Labor Code as Article
234-A to read as follows:

"ART. 234-A. Chartering and Creation of a Local Chapter. - A duly registered

federation or national union may directly create a local chapter by issuing a charter
certificate indicating the establishment of the local chapter. The chapter shall
acquire legal personality only for purposes of filing a petition for certification
election from the date it was issued a charter certificate.
The chapter shall be entitled to all other rights and privileges of a legitimate labor
organization only upon the submission of the following documents in addition to its
charter certificate:
(a) The names of the chapter's officers, their addresses, and the principal office of
the chapter; and
(b) The chapter's constitution and by-laws: Provided, That where the chapter's
constitution and by-laws are the same as that of the federation or the national
union, this fact shall be indicated accordingly.
The additional supporting requirements shall be certified under oath by the
secretary or treasurer of the chapter and attested by its president."
SEC. 3. Article 238 of the Labor Code is hereby amended to read as
follows:
"ART. 238. Cancellation of Registration. - The certificate of registration of any
legitimate labor organization, whether national or local, may be cancelled by the
Bureau, after due hearing, only on the grounds specified in Article 239 hereof."
SEC. 4. A new provision is hereby inserted into the Labor Code as Article
238-A t o read as follows:
"ART. 238-A. Effect of a Petition for Cancellation of Registration. - A petition for
cancellation of union registration shall not suspend the proceedings for certification
election nor shall it prevent the filing of a petition for certification election.
In case of cancellation, nothing herein shall restrict the right of the union to seek
just and equitable remedies in the appropriate courts."
SEC. 5. Article 239 of the Labor Code is amended to read as follows:
"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."
SEC. 6. A new provision, Article 239-A is inserted into the Labor Code to
read as follows:
"ART. 239-A. Voluntary Cancellation of Registration. - The registration of a
legitimate labor organization may be cancelled by the organization itself. Provided,
That at least two-thirds of its general membership votes, in a meeting duly called
for that purpose to dissolve the organization: Provided, further, That an application
to cancel registration is thereafter submitted by the board of the organization,
attested to by the president thereof."
SEC. 7. A new provision, Article 242-A is hereby inserted into the Labor
Code to read as follows:
"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 bylaws within thirty (30) days from adoption or ratification of the constitution and bylam 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."
SEC. 8. Article 245 of the Labor Code is hereby amended to read as
follows:
"ART. 245. Ineligibility of Managerial Employees to Join any Labor Organization;
Right of Supervisory Employees. - Managerial employees are not eligible to join,
assist or form any labor organization. Supervisory employees shall not be eligible
for membership in the collective bargaining unit of the rank-and-file employees but
may join, assist or form separate collective bargaining units and/or legitimate labor
organizations of their own. The rank and file union and the supervisors' union
operating within the same establishment may join the same federation or national
union."
SEC. 9. A new provision, Article 245-A is inserted into the Labor Code to
read as follows:
"ART. 245-A. Effect of Inclusion as Members of Employees Outside the Bargaining
Unit. - The inclusion as union members of employees outside the bargaining unit
shall not be a ground for the cancellation of the registration of the union. Said
employees are automatically deemed removed from the list of membership of said
union."
SEC. 10. Article 256 of the Labor Code is hereby amended to read as
follows:
"ART. 256. Representation Issue in Organized Establishments. - In organized
establishments, when a verified petition questioning the majority status of the
incumbent bargaining agent is filed by any legitimate labor organization including a
national union or federation which has already issued a charter certificate to its local
chapter participating in the certification election or a local chapter which has been
issued a charter certificate by the national union or federation before the
Department of Labor and Employment within the sixty (60)-day period before the
expiration of the collective bargaining agreement, the Med-Arbiter shall
automatically order an election by secret ballot when the verified petition is
supported by the written consent of at least twenty-five percent (25%) of all the
employees in the bargaining unit 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 run-off
election shall be conducted between the labor unions receiving the two highest
number of votes: Provided, That the total number of votes for all contending unions
is at least fifty percent (50%) of the number of votes cast. In cases where the
petition was filed by a national union or federation, it shall not be required to
disclose the names of the local chapter's officers and members.
At the expiration of the freedom period, the employer shall continue to recognize
the majority status of the incumbent bargaining agent where no petition for
certification election is filed."
SEC. 11. Article 257 of the Labor Code is hereby amended to read as
follows:
"ART. 257. Petitions in Unorganized Establishments. - In any establishment where
there is no certified bargaining agent, a certification election shall automatically be
conducted by the Med-Arbiter upon the filing of a petition by any legitimate labor
organization, including a national union or federation which has already issued a

charter certificate to its 1ocal/chapter participating in the certification election or a

local/chapter which has been issued a charter certificate by the national union or
federation. In cases where the petition was filed by a national union or federation, it
shall not be required to disclose the names of the local chapter's officers and
members."
SEC. 12. A new provision, Article 258-A is hereby inserted into the Labor
Code to read as follows:
"ART. 258-A. Employer as Bystander. - In all cases, whether the petition for
certification election is filed by an employer or a legitimate labor organization, the
employer shall not be considered a party thereto with a concomitant right to oppose
a petition for certification election. The employer's participation in such proceedings
shall be limited to: (1) being notified or informed of petitions of such nature; and
(2) submitting the list of employees during the pre-election conference should the
Med-Arbiter act favorably on the petition."
SEC. 13. Separability Clause. - If any part, section or provision of this Act
shall be held invalid or unconstitutional, the other provisions shall not be affected
thereby.
SEC. 14. Repealing Clause. - Presidential Decree No. 442, as amended,
otherwise known as the Labor Code of the Philippines, and all other acts, laws,
presidential issuances, rules and regulations are hereby repealed, modified or
amended accordingly.
SEC. 15. Effectivity Clause. - This Act shall take effect fifteen (15) days
after its publication in the Official Gazette or in at least two newspapers of general
circulation.
Approved,
JOSE DE VENECIA JR.
MANNY VILLAR
Speaker of the House of Representatives
President of the Senate
This Act which is a consolidation of Senate Bill No. 2466 and House Bill No. 1351
was finally passed by the Senate and the House of Representatives on February 20,
2007.
ROBERTO P. NAZARENO
OSCAR G. YABES
Secretary General
Secretary of Senate
House of Representatives
Approved:
GLORIA MACAPAGAL-ARROYO
President of the Philippines

Lapsed into law on MAY 25, 2007

Without the signature of the President,
In accordance with Article VI,
Section 27 (1) of the Constitution

THIRD DIVISION
[G.R. No. 113638. November 16, 1999]
A. D. GOTHONG MANUFACTURING CORPORATION EMPLOYEES UNIONALU, petitioner, vs. HON. NIEVES CONFESOR, SECRETARY, DEPARTMENT OF
LABOR AND EMPLOYMENT and A. D. GOTHONG MANUFACTURING
CORPORATION, Subangdaku, Mandaue City, respondents.
DECISION

GONZAGA_REYES, J.:
Petitioner A. D. Gothong Manufacturing Corporation Employees Union-ALU
seeks to reverse and set aside the decision of the Secretary of Labor promulgated
on September 30, 1993 affirming in totothe Resolution of Mediator-Arbiter, Achilles
V. Manit declaring Romulo Plaza and Paul Michael Yap as rank- and-file employees of
A. D. Gothong Manufacturing Corporation.
On May 12, 1993, petitioner A. D. Gothong Manufacturing Corporation
Employees Union-ALU (Union) filed a petition for certification election in its bid to
represent the unorganized regular rank-and-file employees of respondent A. D.
Gothong Manufacturing Corporation (Company) excluding its office staff and
personnel. Respondent Company opposed the petition as it excluded office
personnel who are rank and file employees. In the inclusion-exclusion proceedings,
the parties agreed to the inclusion of Romulo Plaza and Paul Michael Yap in the list
of eligible voters on condition that their votes are considered challenged on the
ground that they were supervisory employees.
The certification election was conducted as scheduled and yielded the
following results:
YES - - - - - - - - - - - - - - - 20
NO - - - - - - - - - - - - - - - - 19
Spoiled - - - - - - - - - - - - - - 0
Challenged - - -- - - - - - - - _2
Total votes cast - - - - - - - -41
Both Plaza and Yap argued that they are rank-and-file employees. Plaza
claimed that he was a mere salesman based in Cebu, and Yap argued that he is a
mere expediter whose job includes the facilitation of the processing of the bills of
lading of all intended company shipments.
Petitioner Union maintains that both Plaza and Yap are supervisors who are
disqualified to join the proposed bargaining unit for rank-and-file employees. In
support of its position paper, the petitioner Union submitted the following:
1. Joint affidavit of Ricardo Caete, et al. which alleges that Michael Yap is a
supervisory employee of A. D. Gothong Manufacturing Corporation and can
effectively recommend for their suspension/dismissal.
2. Affidavit of Pedro Diez which alleges that the affiant is a supervisor in
the production department of A. D. Gothong Manufacturing Corporation; that the
affiant knows the challenged voters because they are also supervisory employees of
the same corporation; that the challenged voters used to attend the quarterly
meeting of the staff employees of A. D. Gothong Manufacturing Corporation;
3. Photocopy of the memorandum dated January 4, 1991 regarding the
compulsory attendance of department heads/supervisors to the regular quarterly
meeting of all regular workers of A. D. Gothong Manufacturing Corporation on
January 13, 1991. Appearing therein are the names ROMULO PLAZA and MICHAEL
YAP;
4. A not-so-legible photocopy of a memorandum dated March 1, 1989
wherein the name ROMY PLAZA is mentioned as the acting OIC of GT Marketing in
Davao; and
5. Photocopy of the minutes of the regular quarterly staff meeting on
August 13, 1989 at Mandaue City wherein Michael Yap is mentioned as a shipping
assistant and a newly hired member of the staff.[1]
The Med-Arbiter declared that the challenged voters Yap and Plaza are
rank-and-file employees.
Petitioner Union appealed to the Secretary of Labor insisting that Yap and
Plaza are supervisor and manager respectively of the corporation and are prohibited
from joining the proposed bargaining unit of rank-and-file employees. In an attempt
to controvert the arguments of petitioner, respondent Company stressed that Pacita

Gothong is the companys corporate secretary and not Baby L. Siador, who signed
the minutes of the meeting submitted in evidence. Respondent also argued that
Romulo Plaza could not qualify as a manager of the Davao Branch the opening of
which branch never materialized.
Respondent Secretary of Labor affirmed the finding of the MedArbiter. Motion for Reconsideration of the above resolution having been denied,
petitioner Union appeals to this Court by petition for review on certiorari alleging the
following grounds:
I. THAT THE SECRETARY OF LABOR AND EMPLOYMENT CLEARLY
COMMITTED MISAPPREHENSION OF FACTS/EVIDENCE AND IF IT WERE NOT FOR
SUCH MISAPPREHENSION IT WOULD HAVE ARRIVED AT DIFFERENT CONCLUSION
FAVORABLE TO PETITIONER.
II. THAT THE SECRETARY OF LABOR AND EMPLOYMENT ACTED WITH
GRAVE ABUSE OF DISCRETION AND CONTRARY TO LAW IN AFFIRMING IN TOTO
THE DECISION OF HONORABLE ACHILLES V. MANIT, DEPARTMENT OF LABOR AND
EMPLOYMENT, REGIONAL OFFICE No. 7, CEBU CITY IN DENYING PETITIONERS
MOTION FOR RECONSIDERATION.[2]
We find no merit in the instant petition.
The Labor Code recognizes two (2) principal groups of employees, namely,
the managerial and the rank and file groups. Article 212 (m) of the Code provides:
(m) Managerial employee is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees. Supervisory employees are those
who, in the interest of the employer, effectively recommend such managerial actions
if the exercise of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment. All employees not falling within any of
the above definitions are considered rank-and-file employees for purposes of this
Book.
Under Rule I, Section 2 (c), Book III of the Implementing Rules of the
Labor Code, to be a member of managerial staff, the following elements must
concur or co-exist, to wit: (1) that his primary duty consists of the performance of
work directly related to management policies; (2) that he customarily and regularly
exercises discretion and independent judgment in the performance of his functions;
(3) that he regularly and directly assists in the management of the establishment;
and (4) that he does not devote more than twenty percent of his time to work other
than those described above.
In the case of Franklin Baker Company of the Philippines vs. Trajano [3], this
Court stated:
The test of supervisory or managerial status depends on whether a person
possess authority to act in the interest of his employer in the matter specified in
Article 212 (k) of the Labor Code and Section 1 (m) of its Implementing Rules and
whether such authority is not merely routinary or clerical in nature, but requires the
use of independent judgment. Thus, where such recommendatory powers as in the
case at bar, are subject to evaluation, review and final action by the department
heads and other higher executives of the company, the same, although present, are
not exercise of independent judgment as required by law.[4]
It has also been established that in the determination of whether or not
certain employees are managerial employees, this Court accords due respect and
therefore sustains the findings of fact made by quasi-judicial agencies which are
supported by substantial evidence considering their expertise in their respective
fields.[5]
The petition has failed to show reversible error in the findings of the MedArbiter and the Secretary of the Department of Labor.
In ruling against petitioner Union, the Med-Arbiter ruled that the petitioner Union
failed to present concrete and substantial evidence to establish the fact that

challenged voters are either managerial or supervising employees; the Med-Arbiter

evaluated the evidence as follows:
The said joint affidavit of Ricardo Caete, et al. and that of Pedro Diez
merely tagged the challenged voters as supervisors, but nothing is mentioned about
their respective duties, powers and prerogatives as employees which would have
indicated that they are indeed supervisory employees. There is no statement about
an instance where the challenged voters effectively recommended such managerial
action which required the use of independent judgment.
The aforementioned documents have not been properly identified which
renders them inadmissible in evidence. But, granting that they are the exact replica
of a genuine and authentic original copy, there is nothing in them which specifically
and precisely tells that the challenged voters can exercise the powers and
prerogatives to effectively recommended such managerial actions which require the
use of independent judgment.[6]
In upholding the above findings, the respondent Secretary of Labor
rationalized:
Based on the foregoing, Romulo Plaza and Paul Michael Yap can not qualify
as managerial and supervisory employees, respectively, because there is nothing in
the documentary evidence offered by herein petitioner-appellant showing that they
are actually conferred or actually exercising the said managerial/supervisory
attributes.
In the case of Romulo Plaza, we note that indeed there is nothing in the
minutes of the staff meeting held on 05 March 1993, particularly on the report of
the Sales Department, indicating that said appellee had been exercising managerial
prerogatives by hiring workers and issuing a check for the payment of rentals of a
warehouse, relative to the company branch in Davao City. The imputation on the
exercise of the said prerogative is misleading if not malicious because a plain
reading of that portion of the report shows in clear and simple language that one
who made the said hiring and payment was no other than Mr. John Chua, the Sales
Manager. The only instance when the name of Romy Plaza was mentioned in the
said report was in reference to his designation as an OIC of the Davao City Branch
while all the aspect of the creation of the said branch is awaiting final approval by
the Company president and general manager (p. 197, last paragraph, records). The
setting up of said branch however, did not materialize, as evidenced by the
certification issued by the Revenue District Office and Office of the Mayor in Davao
City (pp. 198-199, records).
Likewise, evidence pinpointing that Paul Michael Yap is a supervisory
employee is altogether lacking. The fact that he was designated as shipping
assistant/expediter is of no moment, because titles or nomenclatures attached to
the position is not controlling.
Finally, the job descriptions extant on records vividly exhibit no trace of the
performance of managerial or supervisory functions (pp. 124-126, records). [7]
In this petition, petitioner Union claims that the documentary evidence was
misapprehended by public respondent. Petitioner Union reiterates that: (1) in
minutes of the staff meeting of respondent Company on August 13, 1989, duly
signed by the President Albino Gothong and attested by Jose F. Loseo presiding
officer/VP and Gertrudo Lao, Assistant General Manager, Paul Michael Yap was listed
as one of the staff; (2) in the regular quarterly meeting on January 4, 1991, the
names of Yap and Plaza are listed under the heading Department Heads/Supervisors
duly signed by President/General Manager Albino Gothong and Asst. General
Manager Gertrudo Lao; and (3) in the staff meeting of March 5, 1993, Plaza was
assigned as officer-in-charge of the companys branch in Davao.
We find no cogent reason to disturb the finding of the Med-Arbiter and the
Secretary of Labor that the copies of the minutes presented in evidence do not
prove that Yap and Plaza were managerial or supervisory employees. We have

examined the documentary evidence, and nowhere is there a statement therein

about any instance where the challenged voters effectively recommended any
managerial action which would require the use of independent judgment. The last
piece of evidence was not discussed by the Med-Arbiter; however a perusal thereof
would show that while one J. Chua of the Sales Department reported that Romy
Plaza was in Davao right now acting as OIC, the same document states that the
Davao operations still had to be finalized. On the other hand, the claim of
respondent Company that Plaza is the head of the Davao branch is belied by the
certification of the City Treasurer of Davao and of the Bureau of Internal Revenue of
Mandaue City that the plan to open a branch in Davao City did not materialize. [8]
The reliance of petitioner on the affidavit of Jose Loseo, Personnel Manager,
that Plaza and Yap were hired by him as department head and supervisor of the
respondent Company cannot be sustained in light of the affidavit of said Loseo
dated September 28, 1993, attesting that he was forced to sign the earlier
memorandum on the job assignment of Yap and Plaza. This affidavit is sought to be
discarded by respondent Company for being perjurious and ill-motivated.
[9]
Petitioner Union however reiterates that Loseos affidavit is corroborated by the
other public documents indicating that Plaza and Yap are not rank-and-file
employees.[10]
The issue raised herein is basically one of fact: whether in the light of the
evidence submitted by both parties, Plaza and Yap are managerial employees or
rank-and-file employees.
This Court is not a trier of facts. As earlier stated, it is not the function of
this Court to examine and evaluate the probative value of all evidence presented to
the concerned tribunal which formed the basis of its impugned decision or
resolution. Following established precedents, it is inappropriate to review that
factual findings of the Med-Arbiter regarding the issue whether Romulo Plaza and
Paul Michael Yap are or are not rank-and-file employees considering that these are
matters within their technical expertise. [11] They are binding on this Court as we are
satisfied that they are supported by substantial evidence, and we find no capricious
exercise of judgment warranting reversal by certiorari.
WHEREFORE, the petition is denied for lack of merit.
No pronouncement as to costs.
SO ORDERED.
2.

Confidential Employees
THIRD DIVISION

[G.R. No. 96663. August 10, 1999]

[G.R. No. 103300. August 10, 1999]

PEPSI COLA PRODUCTS PHILIPPINES, petitioner, vs. OFFICE OF THE

SECRETARY DEPARTMENT OF LABOR AND HON. CELENIO N. DAING,
in his capacity as Med-Arbiter Labor Regional Office No. X, Cagayan
de Oro City, CAGAYAN DE ORO PEPSI COLA SUPERVISORS UNION
(UOEF), respondents.
DECISION
PURISIMA, J.:
These are petitions for certiorari relating to three (3) cases filed with the MedArbiter, to wit: MED ARB ROX Case No. R100-9101-RU-002 for Certification Election
filed by Pepsi Cola Supervisors Union-UOEF (Union), MED ARB Case No. R10009102-RU-008, Re: Petition to Set Aside, Cancel and/ or Revoke the Charter
Affiliation of the Union, and MED-ARB ROX Case No. R1000-9104-RU-012, for
Cancellation of Registration Certificate No. 11492-LC in favor of the Union.

G. R. No. 96663

The facts that matter can be culled as follows:

Sometime in June 1990, the Pepsi-Cola Employees Organization-UOEF (Union)
filed a petition for certification election with the Med-Arbiter seeking to be the
exclusive bargaining agent of supervisors of Pepsi-Cola Philippines, Inc. (PEPSI).
On July 12, 1990, the Med-Arbiter granted the Petition, with the explicit
statement that it was an affiliate of Union de Obreros Estivadores de Filipinas
(federation) together with two (2) rank and file unions, Pepsi-Cola Labor Unity
(PCLU) and Pepsi-Cola Employees Union of the Philippines (PEUP).
On July 23, 1990, PEPSI filed with the Bureau of Labor Relations a petition to
Set Aside, Cancel and/or Revoke Charter Affiliation of the Union, entitled PCPPI v.
PCEU-UOEF and docketed as Case No. 725-90, on the grounds that (a) the
members of the Union were managers and (b) a supervisors union can not affiliate
with a federation whose members include the rank and file union of the same
company.
On August 29,1990, PEPSI presented a motion to re-open the case since it was
not furnished with a copy of the Petition for Certification Election.

PEPSI - COLA PRODUCTS PHILIPPINES, INC., petitioner, vs. HONORABLE

SECRETARY OF LABOR, MED - ARBITER NAPOLEON V. FERNANDO &
PEPSI - COLA SUPERVISORY EMPLOYEES ORGANIZATION UOEF, respondents.

On September 4, 1990, PEPSI submitted its position paper to the BLR in Case
No. 725-90.
On September 21, 1990, PEPSI received summons to appear at the pre-trial
conference set on September 25, 1990 but which the hearing officer rescheduled on
October 21, 1990.

On October 12, 1990, PEPSI filed a Notice of Appeal and Memorandum of

Appeal with the Secretary of Labor, questioning the setting of the certification
election on the said date and five (5) days after.It also presented an urgent ExParte Motion to Suspend the Certification Election, which motion was granted on
October 18, 1990.
On November 12, 1990, the Secretary of Labor denied the appeal and Motion
for Reconsideration. Even as the Petition to Cancel, Revoke and Suspend Union
Charter Certificate was pending before the BLR, PEPSI found its way to this
Court via the present petition for certiorari.
On February 6, 1991, the Court granted the prayer for temporary restraining
order and/or preliminary injunction.
The pivot of inquiry here is: whether or not a supervisors union can affiliate
with the same Federation of which two (2) rank and file unions are likewise
members, without violating Article 245 of the Labor Code (PD 442), as amended, by
Republic Act 6715, which provides:
Art. 245. Ineligibility of managerial employees to join any labor organization; right
of supervisory employees.- Managerial employees are not eligible to join, assist or
form any labor organization.Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees but may join,
assist or form separate labor organizations of their own.
In its Comment dated March 19, 1991, the Federation argued that:
The pertinent portion of Article 245 of the Labor Code states 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 organization of their
own.
This provision of law does not prohibit a local union composed of supervisory
employees from being affiliated to a federation which has local unions with rankand-file members as affiliates.
xxx xxx xxx
xxx the Petition to Cancel, Revoke or Set Aside the Charter Certificate of the private
respondent is anchored on the alleged ground that certain managerial employees
are included as members thereof. The grounds for the cancellation of the
registration certificate of a labor organization are provided in Section 7 of Rule II,
Book V of the Omnibus Rules Implementing the Labor Code, and the inclusion of
managerial employees is not one of the grounds. xxx (in this case, the private
respondent herein) remains to be a legitimate labor organization.[1]
On April 8, 1991, the Secretary of Labor and Employment, through the Office
of the Solicitor General, sent in a Comment, alleging inter alia, that:
xxx under Article 259 of the New Labor Code, only orders of the Med-Arbiter can be
appealed through the Secretary of Labor and only on the ground that the rules and

regulations for the conduct of the certification election have been violated. The
Order of the Representation Officer is interlocutory and not appealable. xxx
xxx until and unless there is a final order cancelling its certificate of registration or
charter certificate, a labor organization remains to be a legitimate labor organization
entitled to exercise all the rights and duties accorded to it by the Labor Code
including the right to be certified as a bargaining representative. xxx
xxx Public respondent cannot be deemed to have committed grave abuse of
discretion with respect to an issue that was never presented before it for
resolution. xxx
Article 245 of the New Labor Code does not preclude the supervisors union and the
rank-and-file union from being affiliated with the same federation.
xxx xxx xxx
A federation of local union is not the labor organization referred to in Article 245 but
only becomes entitled to all the rights enjoyed by the labor organization (at the
company level) when it has complied with the registration requirements found in
Articles 234 and 237. Hence, what is prohibited by Article 245 is membership of
supervisory employees in a labor union (at the company level) of the rank and
file. xxx
xxx In other words, the affiliation of the supervisory employees union with the same
federation with which the rank and file employees union is affiliated did not make
the supervisory employees members of the rank and file employees union and vice
versa.[2] xxx
PEPSI, in its Reply dated May 7, 1991, asserted:
It is our humble contention that a final determination of the Petition to Set-Aside,
Cancel, Revoke Charter Union Affiliation should first be disposed of before granting
the Petition for the Conduct of Certification Election. To allow the conduct of the
certification election to proceed would make any decision arrived at by the Bureau
of Labor Relations useless inasmuch as the same would necessarily be rendered
moot and academic.[3]
On June 7, 1991, petitioner again filed a Supplemental Reply stressing:
It is likewise stressed that officials of both the PCLU and PEUP are top ranking
officers of UOEF, the federation of supervisors union, to wit:
POSITION IN RANK AND FILE POSITION IN FEDERATION
UNION
1. Rogelio de la Cruz PCLU -President General Vice President
2. Felix Gatela PEUP - President General Treasurer
3. Carlito Epino PCLU Board Member Educational Research
Director

xxx xxx xxx

The respondent supervisory union could do indirectly what it could not do directly as
the simple expedient of affiliating with UOEF would negate the manifest intent and
letter of the law that supervisory employees can only join, assist or form separate
labor organizations of their own and cannot be eligible for membership in a labor
organization of the rank and file employees.[4]

What are assailed in this case is Med-Arbiter Order dated May 23, 1991 and
the Decision and Order of the Secretary of Labor and Employment, dated October 4,
1991 and December 12, 1991, respectively.
The decretal portion of the Med-Arbiter Order under attack, reads:
WHEREFORE, premises considered, an order is hereby issued:

On August 6, 1991, the Secretary of Labor and Employment filed a Rejoinder,

claiming thus:

1. Dismissing MED ARB ROX CASE NO. R1000-919104-RU-012 and R1000-9102RU-008 for lack of merit; and

xxx an employer has no legal standing to question the validity of a certification

election.

2. Ordering the conduct of a Certification Election to be participated by and among

the supervisory workers of the respondent company, Pepsi-Cola Products
Philippines, Inc. at its plant at Tin-ao, Cagayan de Oro City, including all the satellite
warehouse within the territorial coverage and control of the Cagayan de Oro PepsiCola Plant. The choices are as follows:

xxx For this reason, the Supreme Court has consistently held that, as a rule, a
certification election is the sole and exclusive concern of the employees and that the
employer is definitely an intruder or a mere bystander (Consolidated Farms vs.
Noriel, L-47752, July 31, 1978, 84 SCRA 469; Filipino Metals Corporation vs. Ople,
L- 43861, September 4, 1981, 107 SCRA 211; Trade Unions of the Philippines and
Allied Services (TUPAS) vs. Trajano No. L-61153, January 17, 1983, 120 SCRA 64].
xxx xxx xxx
In Adamson & Adamson, Inc. vs. CIR No. L-35120, January 31, 1984, 127 SCRA
268, the Supreme Court (then dealing with the interpretation of Section 3 of the
Industrial Peace Act, from which Section 245 of the Labor Code was derived)
grappled with the issue in the case at bar. It held that,
There is nothing in the provisions of the Industrial Peace Act which provides that a
duly registered local union affiliating with a national union or federation loses its
legal personality, or its independence.

1. Cagayan de Oro Pepsi-Cola Supervisors Union (U.O.E.P.)

2. No union
The parties are directed to attend a pre-election conference on June 10, 1991, 2:30
p.m. at the Regional Office to determine the qualification of the voters and to thresh
out the mechanics of the election.Respondent/employer is directed to submit five
(5) copies of the names of the rank and file workers taken from the payroll on
October 1-31, 1991, alphabetically arranged (sic) indicating their names and
positions and dates of employment and to bring the aforementioned payroll during
the pre-election conference for verification purposes.[6] xxx
The supervisory employees of the Union are:
POSITION

xxx xxx xxx

1. Felipe Valdehueza Route Manager
However, there is absolutely nothing in the Labor Code that prohibits a federation
from representing or exercising influence over its affiliates. On the contrary, this is
precisely the reason why federations are formed and are allowed by law to exist. [5]
On November 8, 1991, the Union also filed a Rejoinder.
On December 9, 1991, the Court resolved to DISMISS the case for failure to
sufficiently show that the questioned judgment is tainted with grave abuse of
discretion.
In a Resolution dated March 2, 1992, the Second Division of the Court resolved
to grant the motion for reconsideration interposed on January 28, 1992.

2. Gerberto Vertudazo C & C Manager

3. Paul Mendoza Sales Service Department Manager
4. Gilberto Emano, Jr. Route Manager
5. Jaime Huliganga Chief Checker
6. Elias Edgama, Sr. Accounting Manager
7. Romanico Ramos Route Manager

G.R. No. 103300

8. Raul Yacapin Route Manager

9. Jovenal Albaque Route Manager

At the outset, it must be stressed that on September 1, 1992, there was a

Resolution of the Union withdrawing from the Federation, to wit:

10. Fulvio Narciso Route Manager

11. Apolinario Opiniano Route Manager
12. Alfredo Panas Route Manager
13. Simplicio Nelie Route Manager
14. Arthur Rodriguez Route Manager
15. Marco Ilano Warehouse Operations Manager and
16. Deodoro Ramos Maintenance Manager
On June 6, 1991, PEPSI appealed the said Order to the Secretary of Labor and
Employment on the ground of grave abuse of discretion, docketed as Case No. OSA-232-91.

BE IT RESOLVED, as it is hereby RESOLVED, that this UNION WITHDRAW, as it

hereby WITHDRAWS its affiliation from the Union de Obreros Estivadores de
Filipinas, and at the same time, give our thanks to the said federation for its help
and guidance rendered to this Union in the past.[9]
The issue in G.R. No. 96663, whether or not the supervisors union can be
affiliated with a Federation with two (2) rank and file unions directly under the
supervision of the former, has thus become moot and academic in view of the
Unions withdrawal from the federation.
In a long line of cases (Narciso Nakpil, et. al., vs. Hon. Crisanto Aragon, et.
al.,, G. R. No. L - 24087, January 22, 1980, 95 SCRA 85; Toribio v. Bidin, et. al.,
G.R. No. L-37960, February 28, 1980, 96 SCRA 361; Gumaua v. Espino, G.R. No. L36188 - 37586 February 29, 1980, 96 SCRA 402), the Court dismissed the petition
for being moot and academic. In the case of F. C. Fisher v. Yangco Steamship Co.,
March 31, 1915, the Court held:
It is unnecessary, however to indulge in academic discussion of a moot
question. xxx

On October 4, 1991, the Secretary modified the appealed decision, ruling thus:
WHEREFORE, the Order of the Med-Arbiter dated 23 May 1991 is hereby modified to
the effect that MED ARB ROX Case No. R1000-9104-RU-012 and R1000-9102-RU008 are hereby referred to the Office of the Regional Director which has jurisdiction
over these cases. The call for certification election among the supervisory workers
of the Pepsi-Cola Products Philippines, Inc. at its plant at Tin-ao, Cagayan de Oro
City is hereby sustained.[7]
On October 19, 1991, PEPSI presented a motion for reconsideration of the
aforesaid Order but the same was denied on December 12, 1991.
Meanwhile, the BLR issued Registration Certificate No. 11492-LC in favor of the
Union. Dissatisfied therewith, PEPSI brought the instant petition for certiorari,
contending that:
PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION IN
RULING THAT PRIVATE RESPONDENTS OFFICERS AND MEMBERS ARE NOT
MANAGERIAL EMPLOYEES;
PRIVATE RESPONDENT IS PROHIBITED FROM AFFILIATING ITSELF WITH A
FEDERATION ALREADY AFFILIATED WITH THE RANK AND FILE UNION;
PUBLIC RESPONDENT COMMITTED GRAVE OF (SIC) ABUSE OF DISCRETION
IN RULING THAT THE INSTITUTION OF A PETITION FOR CANCELLATION OF
UNION REGISTRATION DOES NOT CONSTITUTE A PREJUDICIAL QUESTION
TO A PETITION CERTIFICATION ELECTION.[8]
The petitions must fail for want of merit.

xxx The action would have been dismissed at any time on a showing of the facts as
they were . The question left for the court was a moot one. Its Resolution would
have been useless. Its judgment would have been impossible of execution xxx.
However, in the case of University of San
Appeals, et al., the court resolved the case, ruling
academic, a statement of the governing principle
dismissal for the guidance not only of the
situated. xxx[10]

Agustin, Inc., et al. vs. Court of

that even if a case were moot and
is appropriate in the resolution of
parties but of others similarly

In Atlas Lithographic Services, Inc. v. Laguesma, 205 SCRA 12, [1992]

decided by the Third Division with J. Gutierrez, Jr., as ponente and JJ. Feliciano,
Bidin, Romero and now Chief Justice Davide, Jr., as members it was ratiocinated:
xxx xxx xxx
Thus, if the intent of the law is to avoid a situation where supervisors would merge
with the rank-and-file or where the supervisors labor organization would represent
conflicting interests, then a local supervisors union should not be allowed to affiliate
with the national federation of union of rank-and-file employees where that
federation actively participates in union activity in the company.
xxx xxx xxx
The prohibition against a supervisors union joining a local union of rank and file is
replete with jurisprudence. The Court emphasizes that 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. The intent of the law is clear especially where, as in this case at bar, the
supervisors will be co-mingling with those employees whom they directly supervise
in their own bargaining unit.
Anent the issue of whether or not the Petition to cancel/revoke registration is a
prejudicial question to the petition for certification election, the following ruling in
the case of Association of the Court of Appeals Employees (ACAE) vs. Hon. Pura
Ferrer-Calleja, in her capacity as Director, Bureau of Labor Relations et. Al., 203
ACRA 597, 598, [1991], is in point, to wit:
xxx It is a well-settled rule that a certification proceedings is not a litigation in the
sense that the term is ordinarily understood, but an investigation of a nonadversarial and fact finding character. (Associated Labor Unions (ALU) v. FerrerCalleja, 179 SCRA 127 [1989]; Philippine Telegraph and Telephone Corporation v.
NLRC, 183 SCRA 451 [1990]. Thus, the technical rules of evidence do not apply if
the decision to grant it proceeds from an examination of the sufficiency of the
petition as well as a careful look into the arguments contained in the position papers
and other documents.
At any rate, the Court applies the established rule correctly followed by the public
respondent that an order to hold a certification election is proper despite the
pendency of the petition for cancellation of the registration certificate of the
respondent union. The rationale for this is that at the time the respondent union
filed its petition, it still had the legal personality to perform such act absent an order
directing the cancellation.
xxx xxx xxx
As regards the issue of whether or not confidential employees can join the
labor union of the rank and file, what was held in the case of National Association of
Trade Unions (NATU) - Republic Planters Bank Supervisors Chapter vs. Hon. R. D.
Torres, et. al., G.R. No. 93468, December 29, 1994, applies to this case. Citing
Bulletin Publishing Corporation vs. Sanchez, 144 SCRA 628,635, Golden Farms vs.
NLRC, 175 SCRA 471, and Pier 8 Arrastre and Stevedoring Services, Inc. vs. Hon.
Nieves Roldan-Confessor et al., G.R. No. 110854, February 14, 1995, the Court
ruled:
xxx A confidential employee is one entrusted with confidence on delicate matters, or
with the custody, handling, or care and protection of the employers property. While
Art. 245 of the Labor Code singles out managerial employee as ineligible to join,
assist or form any labor organization, under the doctrine of necessary implication,
confidential employees are similarly disqualified. This doctrine states that what is
implied in a statute is as much a part thereof as that which is expressed, as
elucidated in several case; the latest of which is Chua v. Civil Service Commission
where we said:
No statute can be enacted that can provide all the details involved in its
application. There is always an omission that may not meet a particular
situation. What is thought, at the time of the enactment, to be an all embracing
legislation maybe inadequate to provide for the unfolding events of the future. Socalled gaps in the law develop as the law is enforced. One of the rules of statutory
construction used to fill in the gap is the doctrine of necessary implication xxx,
Every statute is understood, by implication, to contain all such provisions as may be

necessary to effectuate its object and purpose, or to make effective rights, powers,
privileges or jurisdiction which it grants, including all such collateral and subsidiary
consequences as may be fairly and logically inferred from its terms. Ex necessitate
legis xxx
In applying the doctrine of necessary implication, we took into consideration the
rationale behind the disqualification of managerial employees expressed in Bulletin
Publishing Corporation v. Sanchez, thus xxx if these managerial employees would
belong to or be affiliated with a Union, the latter might not be assured of their
loyalty to the Union in view of evident conflict of interests. The Union can also
become company dominated with the presence of managerial employees in Union
membership. Stated differently, in the collective bargaining process, managerial
employees are supposed to be on the side of the employer, to act as its
representatives, and to see to it that its interest are well protected. The employer is
not assured of such protection if these employees themselves are union
members. Collective bargaining in such a situation can become one-sided. It is the
same reason that impelled this Court to consider the position of confidential
employees as included in the disqualification found in Art. 245 as if the
disqualification of confidential employees were written in the provision. If
confidential employees could unionize in order to bargain for advantages for
themselves, then they could be governed by their own motives rather than the
interest of the employers. Moreover, unionization of confidential employees for the
purpose of collective bargaining would mean the extension of the law to persons or
individuals who are supposed to act in the interest of the employers. It is not
farfetched that in the course of collective bargaining, they might jeopardize that
interest which they are duty bound to protect. Along the same line of reasoning we
held in Golden Farms, Inc. vs. Ferrer-Calleja reiterated in Philips Industrial
Development, Inc., NLRC, that confidential employees such as accounting
personnel, radio and telegraph operators who, having access to confidential
information, may become the source of undue advantage. Said employee(s) may
act as spy or spies of either party to a collective bargaining agreement.
The Court finds merit in the submission of the OSG that Route Managers, Chief
Checkers and Warehouse Operations Managers are supervisors while Credit &
Collection Managers and Accounting Managers are highly confidential
employees. Designation should be reconciled with the actual job description of
subject employees. A careful scrutiny of their job description indicates that they
dont lay down company policies. Theirs is not a final determination of the company
policies since they have to report to their respective superior. 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 v. Laguesma, G. R. No. 103743, January 29,1996, it was stressed that:
What is essential is the nature of the employees function and not the nomenclature
or title given to the job which determines whether the employee has rank and file or
managerial status, or whether he is a supervisory employee.
WHEREFORE, the petitions under consideration are DISMISSED but subject
Decision, dated October 4, 1991, of the Secretary of Labor and Employment is
MODIFIED in that Credit and Collection Managers and Accounting Managers are
highly confidential employees not eligible for membership in a supervisors union. No
pronouncement as to costs.

SO ORDERED.

Article I of the CBA defined the scope of the bargaining unit, as follows:
THIRD DIVISION

TUNAY NA PAGKAKAISA NG MANGGAGAWA

SA ASIABREWERY,
Petitioner,

G.R. No. 162025

Present:
CARPIO MORALES,
Chairperson,
BRION,
BERSAMIN,
ABAD,* and
VILLARAMA, JR.,

- versus -

ASIA BREWERY, INC.,

Respondent.

Promulgated:

August 3, 2010
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
VILLARAMA, JR., J.:

For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the 1997
Rules of Civil Procedure, as amended, assailing the Decision [1] dated November 22,
2002 and Resolution[2] dated January 28, 2004 rendered by the Court of Appeals
(CA) in CA-G.R. SP No. 55578, granting the petition of respondent company and
reversing the Voluntary Arbitrators Decision[3] dated October 14, 1999.

The facts are:

Section
1. Recognition. The
COMPANY
recognizes
the UNION as the sole and exclusive bargaining representative of
all the regular rank-and-file daily paid employees within the scope
of the appropriate bargaining unit with respect to rates of pay,
hours
of
work
and
other
terms
and
conditions
of
employment. The UNION shall not represent or accept for
membership employees outside the scope of the bargaining
unit herein defined.
Section 2. Bargaining Unit. The bargaining unit shall be
comprised of all regular rank-and-file daily-paid employees of the
COMPANY. However, the following jobs/positions as herein defined
shall be excluded from the bargaining unit, to wit:
1. Managers
2. Assistant Managers
3. Section Heads
4. Supervisors
5. Superintendents
6. Confidential and Executive Secretaries
7. Personnel, Accounting and Marketing Staff
8. Communications Personnel
9. Probationary Employees
10. Security and Fire Brigade Personnel
11. Monthly Employees
12. Purchasing
and
Quality
Control
Staff[6] [EMPHASIS SUPPLIED.]

Subsequently, a dispute arose when ABIs management stopped deducting union

dues from eighty-one (81) employees, believing that their membership in BLMAINDEPENDENT violated the CBA. Eighteen (18) of these affected employees are QA
Sampling Inspectors/Inspectresses and Machine Gauge Technician who formed part
of the Quality Control Staff. Twenty (20) checkers are assigned at the Materials

Respondent Asia Brewery, Inc. (ABI) is engaged in the manufacture, sale and
distribution of beer, shandy, bottled water and glass products. ABI entered into a
Collective Bargaining Agreement (CBA), [4] effective for five (5) years from August 1,

Department of the Administration Division, Full Goods Department of the Brewery

Division and Packaging Division. The rest are secretaries/clerks directly under their
respective division managers.[7]

1997 to July 31, 2002, with Bisig at Lakas ng mga Manggagawa sa AsiaIndependent (BLMA-INDEPENDENT), the exclusive bargaining representative of ABIs
rank-and-file employees. On October 3, 2000, ABI and BLMA-INDEPENDENT signed
a renegotiated CBA effective from August 1, 2000 to 31 July 2003.[5]

BLMA-INDEPENDENT claimed that ABIs actions restrained the employees right to

self-organization and brought the matter to the grievance machinery. As the parties
failed to amicably settle the controversy, BLMA-INDEPENDENT lodged a complaint
before the National Conciliation and Mediation Board (NCMB). The parties eventually

agreed to submit the case for arbitration to resolve the issue of [w]hether or not

BLMA-INDEPENDENT filed a motion for reconsideration. In the meantime, a

there is restraint to employees in the exercise of their right to self-organization.

certification election was held on August 10, 2002 wherein petitioner Tunay na

[8]

Pagkakaisa ng Manggagawa sa Asia (TPMA) won. As the incumbent bargaining

In his Decision, Voluntary Arbitrator Bienvenido Devera sustained the BLMA-

representative of ABIs rank-and-file employees claiming interest in the outcome of

INDEPENDENT after finding that the records submitted by ABI showed that the

the case, petitioner filed with the CA an omnibus motion for reconsideration of the

positions of the subject employees qualify under the rank-and-file category because

decision and intervention, with attached petition signed by the union officers.

their functions are merely routinary and clerical. He noted that the positions

[11]

Both motions were denied by the CA.[12]

occupied by the checkers and secretaries/clerks in the different divisions are not
managerial or supervisory, as evident from the duties and responsibilities assigned

The petition is anchored on the following grounds:

to them. With respect to QA Sampling Inspectors/Inspectresses and Machine Gauge

(1)

Technician, he ruled that ABI failed to establish with sufficient clarity their basic

THE COURT OF APPEALS ERRED IN RULING THAT THE 81

EMPLOYEES ARE EXCLUDED FROM AND ARE NOT ELIGIBLE FOR
INCLUSION IN THE BARGAINING UNIT AS DEFINED IN SECTION
2, ARTICLE 1 OF THE CBA[;]

functions as to consider them Quality Control Staff who were excluded from the
coverage of the CBA. Accordingly, the subject employees were declared eligible for
inclusion within the bargaining unit represented by BLMA-INDEPENDENT.[9]

(2)
THE COURT OF APPEALS ERRED IN HOLDING THAT THE 81
EMPLOYEES CANNOT VALIDLY BECOME UNION MEMBERS, THAT
THEIR MEMBERSHIP IS VIOLATIVE OF THE CBA AND THAT THEY
SHOULD DISAFFILIATE FROM RESPONDENT;

On appeal, the CA reversed the Voluntary Arbitrator, ruling that:

WHEREFORE, foregoing premises considered, the
questioned decision of the Honorable Voluntary Arbitrator
Bienvenido De Vera is hereby REVERSED and SET ASIDE, and A
NEW ONE ENTERED DECLARING THAT:

(3)
THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT
PETITIONER (NOW PRIVATE RESPONDENT) HAS NOT COMMITTED
ANY ACT THAT RESTRAINED OR TENDED TO RESTRAIN ITS
EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO SELFORGANIZATION.[13]

a) the 81 employees are excluded from and are

not eligible for inclusion in the bargaining
unit as defined in Section 2, Article I of the
CBA;
b) the 81 employees cannot validly become
members of respondent and/or if already
members, that their membership is violative
of the CBA and that they should disaffiliate
from respondent; and
c) petitioner has not committed any act that
restrained or tended to restrain its
employees in the exercise of their right to
self-organization.

Although Article 245 of the Labor Code limits the ineligibility to join, form and assist
any labor organization to managerial employees, jurisprudence has extended this
prohibition to confidential employees or those who by reason of their positions or
nature of work are required to assist or act in a fiduciary manner to managerial
employees and hence, are likewise privy to sensitive and highly confidential records.
[14]

Confidential employees are thus excluded from the rank-and-file bargaining

NO COSTS.

unit. The rationale for their separate category and disqualification to join any labor

SO ORDERED.[10]

organization is similar to the inhibition for managerial employees because if allowed

to be affiliated with a Union, the latter might not be assured of their loyalty in view

of evident conflict of interests and the Union can also become companydenominated with the presence of managerial employees in the Union membership.
[15]

Having access to confidential information, confidential employees may also

become the source of undue advantage. Said employees may act as a spy or spies
of either party to a collective bargaining agreement.[16]

In Philips Industrial Development, Inc. v. NLRC,[17] this Court held that petitioners
division secretaries, all Staff of General Management, Personnel and Industrial
Relations Department, Secretaries of Audit, EDP and Financial Systems are
confidential employees not included within the rank-and-file bargaining unit.
[18]

Earlier, in Pier 8 Arrastre & Stevedoring Services, Inc. v. Roldan-Confesor,[19] we

declared that legal secretaries who are tasked with, among others, the typing of
legal documents, memoranda and correspondence, the keeping of records and files,
the giving of and receiving notices, and such other duties as required by the legal
personnel of the corporation, fall under the category of confidential employees and
hence excluded from the bargaining unit composed of rank-and-file employees. [20]

Also considered having access to vital labor information are the executive
secretaries of the General Manager and the executive secretaries of the Quality
Assurance Manager, Product Development Manager, Finance Director, Management
System Manager, Human Resources Manager, Marketing Director, Engineering
Manager, Materials Manager and Production Manager.[21]

In the present case, the CBA expressly excluded Confidential and Executive
Secretaries from the rank-and-file bargaining unit, for which reason ABI seeks their
disaffiliation from petitioner. Petitioner, however, maintains that except for Daisy
Laloon, Evelyn Mabilangan and Lennie Saguan who had been promoted to monthly
paid positions, the following secretaries/clerks are deemed included among the
rank-and-file employees of ABI:[22]
NAME

DEPARTMENT

IMMEDIATE SUPERIOR

Transportation
Transportation
Transportation

Mr. Melito K. Tan

Mr. Melito K. Tan
Mr. Melito K. Tan

1. Abalos, Andrea A.
2. Algire, Juvy L.
3. Anouevo, Shirley P.
4. Aviso, Rosita S.
5. Barachina, Pauline C.
6. Briones, Catalina P.
7. Caralipio, Juanita P.
8. Elmido, Ma. Rebecca S.
9. Giron, Laura P.
10. Mane, Edna A.

Materials
Materials
Materials
Materials
Materials
Materials
Materials
Materials
Materials
Materials

Mr. Andres
Mr. Andres
Mr. Andres
Mr. Andres
Mr. Andres
Mr. Andres
Mr. Andres
Mr. Andres
Mr. Andres
Mr. Andres

1. Laloon, Daisy S.

Brewhouse

Mr. William Tan

1.
2.
3.
4.

Arabit, Myrna F.
Burgos, Adelaida D.
Menil, Emmanuel S.
Nevalga, Marcelo G.

Bottling Production
Bottling Production
Bottling Production
Bottling Production

Mr. Julius
Mr. Julius
Mr. Julius
Mr. Julius

1. Mapola, Ma. Esraliza T.

2. Velez, Carmelito A.

Bottling Maintenance
Bottling Maintenance

Mr. Ernesto Ang

Mr. Ernesto Ang

1.
2.
3.
4.

Bordamonte, Rhumela D.
Deauna, Edna R.
Punongbayan, Marylou F.
Saguan, Lennie Y.

Bottled
Bottled
Bottled
Bottled

Mr. Faustino
Mr. Faustino
Mr. Faustino
Mr. Faustino

Tetonch
Tetonch
Tetonch
Tetonch

1.
2.
3.
4.
5.
6.

Alcoran, Simeon A.
Cervantes, Ma. Sherley Y.
Diongco, Ma. Teresa M.
Mabilangan, Evelyn M.
Rivera, Aurora M.
Salandanan, Nancy G.

Full
Full
Full
Full
Full
Full

Mr. Tsoi
Mr. Tsoi
Mr. Tsoi
Mr. Tsoi
Mr. Tsoi
Mr. Tsoi

Tung
Tung
Tung
Tung
Tung
Tung

Transportation

Mr. Melito K. Tan

G.
G.
G.
G.
G.
G.
G.
G.
G.
G.

Co
Co
Co
Co
Co
Co
Co
Co
Co
Co

xxxx
C2 BREWERY DIVISION

Water
Water
Water
Water

Goods
Goods
Goods
Goods
Goods
Goods

Palmares
Palmares
Palmares
Palmares

Wah
Wah
Wah
Wah
Wah
Wah

1. Magbag, Ma. Corazon C.

Tank Farm/
Cella Services

Mr. Manuel Yu Liat

1. Capiroso, Francisca A.

Quality Assurance

Ms. Regina Mirasol

1.
2.
3.
4.

Engineering
Electrical
Civil Works
Utilities

Mr. Clemente Wong

Mr. Jorge Villarosa
Mr. Roger Giron
Mr. Venancio Alcona

Alconaba, Elvira C.
Bustillo, Bernardita E.
Catindig, Ruel A.
Sison, Claudia B.

xxxx

C1 ADMIN DIVISION
1. Angeles, Cristina C.

2. Barraquio, Carina P.
3. Cabalo, Marivic B.
4. Fameronag, Leodigario C.

C3 PACKAGING DIVISION

1. Alvarez, Ma. Luningning L.

2. Caiza, Alma A.
3. Cantalejo, Aida S.
4. Castillo, Ma. Riza R.
5. Lamadrid, Susana C.
6. Mendoza, Jennifer L.

GP
GP
GP
GP
GP
GP

Administration
Technical
Engineering
Production
Production
Technical

Ms. Susan Bella

Mr. Chen Tsai Tyan confidential employees being quality control staff entrusted with the handling and
Mr. Noel Fernandez custody of company properties and sensitive information.
Mr. Tsai Chen Chih
Mr. Robert Bautista
Mr. Mel Oa
Again, the job descriptions of these checkers assigned in the storeroom section of
the Materials Department, finishing section of the Packaging Department, and the

As can be gleaned from the above listing, it is rather curious that there would be

decorating and glass sections of the Production Department plainly showed that

several secretaries/clerks for just one (1) department/division performing tasks

they perform routine and mechanical tasks preparatory to the delivery of the

which are mostly routine and clerical. Respondent insisted they fall under the

finished products.[24] While it may be argued that quality control extends to post-

Confidential and Executive Secretaries expressly excluded by the CBA from the

production phase -- proper packaging of the finished products -- no evidence was

rank-and-file bargaining unit.However, perusal of the job descriptions of these

presented by the respondent to prove that these daily-paid checkers actually form

secretaries/clerks reveals that their assigned duties and responsibilities involve

part of the companys Quality Control Staff who as such were exposed to sensitive,

routine activities of recording and monitoring, and other paper works for their

vital and confidential information about [companys] products or have knowledge of

respective departments while secretarial tasks such as receiving telephone calls and

mixtures of the products, their defects, and even their formulas which are

filing of office correspondence appear to have been commonly imposed as additional

considered trade secrets. Such allegations of respondent must be supported by

duties.

evidence.[25]

[23]

Respondent

failed

to

indicate

who

among

these

numerous

secretaries/clerks have access to confidential data relating to management policies

that could give rise to potential conflict of interest with their Union membership.

Consequently, we hold that the twenty (20) checkers may not be

Clearly, the rationale under our previous rulings for the exclusion of executive

considered confidential employees under the category of Quality Control Staff who

secretaries ordivision secretaries would have little or no significance considering the

were expressly excluded from the CBA of the rank-and-file bargaining unit.

lack

of

or

very

limited

access

to

confidential

information

of

these

secretaries/clerks. It is not even farfetched that the job category may exist only on
paper since they are all daily-paid workers. Quite understandably, petitioner had
earlier expressed the view that the positions were just being reclassified as these
employees actually discharged routine functions.

Confidential employees are defined as those who (1) assist or act in a confidential
capacity, (2) to persons who formulate, determine, and effectuate management
policies in the field of labor relations. The two (2) criteria are cumulative, and both
must be met if an employee is to be considered a confidential employee that is, the
confidential relationship must exist between the employee and his supervisor, and the

We thus hold that the secretaries/clerks, numbering about forty (40), are rank-and-

supervisor must handle the prescribed responsibilities relating to labor relations. The

file employees and not confidential employees.

exclusion from bargaining units of employees who, in the normal course of their
duties, become aware of management policies relating to labor relations is a principal

With respect to the Sampling Inspectors/Inspectresses and the Gauge Machine

objective sought to be accomplished by the confidential employee rule. [26] There is no

Technician, there seems no dispute that they form part of the Quality Control Staff

showing in this case that the secretaries/clerks and checkers assisted or acted in a

who, under the express terms of the CBA, fall under a distinct category. But we

confidential capacity to managerial employees and obtained confidential information

disagree with respondents contention that the twenty (20) checkers are similarly

relating to labor relations policies. And even assuming that they had exposure to

internal business operations of the company, respondent claimed, this is not per
se ground for their exclusion in the bargaining unit of the daily-paid rank-and-file
employees.[27]

Republic
SUPREME
Baguio City

of

the

Philippines
COURT

THIRD DIVISION

Not being confidential employees, the secretaries/clerks and checkers are not
disqualified from membership in the Union of respondents rank-and-file employees.
Petitioner argues that respondents act of unilaterally stopping the deduction of
union dues from these employees constitutes unfair labor practice as it restrained
the workers exercise of their right to self-organization, as provided in Article 248 (a)

G.R. No. 161933

April 22, 2008

STANDARD CHARTERED BANK EMPLOYEES UNION (SCBEUNUBE), petitioner,

vs.
STANDARD CHARTERED BANK and ANNEMARIE DURBIN, in her capacity as
Chief Executive Officer, Philippines, Standard Chartered Bank, respondents.

of the Labor Code.

DECISION
Unfair labor practice refers to acts that violate the workers right to organize. The

AUSTRIA-MARTINEZ, J.:

prohibited acts are related to the workers right to self organization and to the
observance of a CBA. For a charge of unfair labor practice to prosper, it must be
shown that ABI was motivated by ill will, bad faith, or fraud, or was oppressive to
labor, or done in a manner contrary to morals, good customs, or public policy, and,
of course, that social humiliation, wounded feelings or grave anxiety resulted x x
x[28] from ABIs act in discontinuing the union dues deduction from those employees
it believed were excluded by the CBA. Considering that the herein dispute arose
from a simple disagreement in the interpretation of the CBA provision on excluded
employees from the bargaining unit, respondent cannot be said to have committed
unfair labor practice that restrained its employees in the exercise of their right to
self-organization, nor have thereby demonstrated an anti-union stance.

WHEREFORE, the

petition

is GRANTED. The

Decision

dated November

22,

2002 and Resolution dated January 28, 2004 of the Court of Appeals in CA-G.R. SP
No.

55578

are

hereby REVERSED

and

SET

secretaries/clerks of respondent company are

ASIDE. The

checkers

and

hereby declared rank-and-file

employees who are eligible to join theUnion of the rank-and-file employees.

For resolution is an appeal by certiorari filed by petitioner under Rule 45 of the Rules
of Court, assailing the Decision 1 dated October 9, 2002 and Resolution 2 dated
January 26, 2004 issued by the Court of Appeals (CA), dismissing their petition and
affirming the Secretary of Labor and Employment's Orders dated May 31, 2001 and
August 30, 2001.
Petitioner and the Standard Chartered Bank (Bank) began negotiating for a new
Collective Bargaining Agreement (CBA) in May 2000 as their 1998-2000 CBA
already expired. Due to a deadlock in the negotiations, petitioner filed a Notice of
Strike prompting the Secretary of Labor and Employment to assume jurisdiction
over the labor dispute.
On May 31, 2001, Secretary Patricia A. Sto. Tomas of the Department of Labor and
Employment (DOLE) issued an Order with the following dispositive portion:
WHEREFORE, PREMISES CONSIDERED, the Standard Chartered Bank and
the Standard Chartered Bank Employees Union are directed to execute
their collective bargaining agreement effective 01 April 2001 until 30 March
2003 incorporating therein the foregoing dispositions and the agreements
they reached in the course of negotiations and conciliation. All other
submitted issues that were not passed upon are dismissed.
The charge of unfair labor practice for bargaining in bad faith and the claim
for damages relating thereto are hereby dismissed for lack of merit.

No costs.
SO ORDERED.

Finally, the charge of unfair labor practice for gross violation of the
economic provisions of the CBA is hereby dismissed for want of jurisdiction.

SO ORDERED.3
Both petitioner and the Bank filed their respective motions for reconsideration,
which were denied by the Secretary per Order dated August 30, 2001. 4

1. Chief Executive, Philippine Branches

2. Deputy Chief Executive/Head, Corporate Banking Group
3. Head, Finance

Petitioner sought recourse with the CA via a petition for certiorari, and in the
assailed Decision dated October 9, 20025 and Resolution dated January 26,
2004,6 the CA dismissed their petition and affirmed the Secretary's Orders.
Hence, herein petition based on the following grounds:
I.
THE COURT A QUO ERRED IN DECIDING THAT THERE WAS NO BASIS FOR
REVISING THE SCOPE OF EXCLUSIONS FROM THE APPROPRIATE
BARGAINING UNIT UNDER THE CBA.
II.
THE COURT A QUO ERRED IN DECIDING THAT A ONE-MONTH OR LESS
TEMPORARY OCCUPATION OF A POSITION (ACTING CAPACITY) DOES NOT
MERIT ADJUSTMENT IN REMUNERATION. 7
The resolution of this case has been overtaken by the execution of the parties'
2003-2005 CBA. While this would render the case moot and academic,
nevertheless, the likelihood that the same issues will come up in the parties' future
CBA negotiations is not far-fetched, thus compelling its resolution. Courts will decide
a question otherwise moot if it is capable of repetition yet evading review.[8]
The CBA provisions in dispute are the exclusion of certain employees from the
appropriate bargaining unit and the adjustment of remuneration for employees
serving in an acting capacity for one month.
In their proposal, petitioner sought the exclusion of only the following employees
from the appropriate bargaining unit all managers who are vested with the right
to hire and fire employees, confidential employees, those with access to labor
relations materials, Chief Cashiers, Assistant Cashiers, personnel of the Telex
Department and one Human Resources (HR) staff.9
In the previous 1998-2000 CBA,10 the excluded employees are as follows:
A. All covenanted and assistant officers (now called National Officers)
B. One confidential secretary of each of the:

4. Head, Human Resources

5. Manager, Cebu
6. Manager, Iloilo
7. Covenanted Officers provided said positions shall be filled by
new recruits.
C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and Iloilo, and
in any other branch that the BANK may establish in the country.
D. Personnel of the Telex Department
E. All Security Guards
F. Probationary employees, without prejudice to Article 277 (c) of the Labor
Code, as amended by R.A. 6715, casuals or emergency employees; and
G. One (1) HR Staff11
The Secretary, however, maintained the previous exclusions because petitioner
failed to show that the employees sought to be removed from the list qualify for
exclusion.12
With regard to the remuneration of employees working in an acting capacity, it was
petitioner's position that additional pay should be given to an employee who has
been serving in a temporary/acting capacity for one week. The Secretary likewise
rejected petitioner's proposal and instead, allowed additional pay for those who had
been working in such capacity for one month. The Secretary agreed with the Bank's
position that a restrictive provision would curtail management's prerogative, and at
the same time, recognized that employees should not be made to work in an acting
capacity for long periods of time without adequate compensation.
The Secretary's disposition of the issues raised by petitioner were affirmed by the
CA.13 The Court sustains the CA.

Whether or not the employees sought to be excluded from the appropriate

bargaining unit are confidential employees is a question of fact, which is not a
proper issue in a petition for review under Rule 45 of the Rules of Court. 14 This holds
more true in the present case in which petitioner failed to controvert with evidence
the findings of the Secretary and the CA.
The disqualification of managerial and confidential employees from joining a
bargaining unit for rank and file employees is already well-entrenched in
jurisprudence. While Article 245 of the Labor Code limits the ineligibility to join,
form and assist any labor organization to managerial employees, jurisprudence has
extended this prohibition to confidential employees or those who by reason of their
positions or nature of work are required to assist or act in a fiduciary manner to
managerial employees and hence, are likewise privy to sensitive and highly
confidential records.15
In this case, the question that needs to be answered is whether the Bank's Chief
Cashiers and Assistant Cashiers, personnel of the Telex Department and HR staff are
confidential employees, such that they should be excluded.
As regards the qualification of bank cashiers as confidential employees, National
Association of Trade Unions (NATU) Republic Planters Bank Supervisors Chapter
v. Torres16 declared that they are confidential employees having control, custody
and/or access to confidential matters, e.g., the branch's cash position, statements
of financial condition, vault combination, cash codes for telegraphic transfers,
demand drafts and other negotiable instruments, pursuant to Sec. 1166.4 of the
Central Bank Manual regarding joint custody, and therefore, disqualified from joining
or assisting a union; or joining, assisting or forming any other labor organization. 17
Golden Farms, Inc. v. Ferrer-Calleja 18 meanwhile stated that "confidential
employees such as accounting personnel, radio and telegraph operators who,
having access to confidential information, may become the source of undue
advantage. Said employee(s) may act as spy or spies of either party to a collective
bargaining agreement."19
Finally, in Philips Industrial Development, Inc. v. National Labor Relations
Commission,20 the Court designatedpersonnel staff, in which human resources
staff may be qualified, as confidential employees because by the very nature of their
functions, they assist and act in a confidential capacity to, or have access to
confidential matters of, persons who exercise managerial functions in the field of
labor relations.
Petitioner insists that the foregoing employees are not confidential employees;
however, it failed to buttress its claim. Aside from its generalized arguments, and
despite the Secretary's finding that there was no evidence to support it, petitioner
still failed to substantiate its claim. Petitioner did not even bother to state the
nature of the duties and functions of these employees, depriving the Court of any

basis on which it may be concluded that they are indeed confidential employees. As
aptly stated by the CA:
While We agree that petitioner's proposed revision is in accordance with
the law, this does not necessarily mean that the list of exclusions
enumerated in the 1998-2000 CBA is contrary to law. As found by public
respondent, petitioner failed to show that the employees sought to
be removed from the list of exclusions are actually rank and file
employees who are not managerial or confidential in status and
should, accordingly, be included in the appropriate bargaining unit.
Absent any proof that Chief Cashiers and Assistant Cashiers,
personnel of the Telex department and one (1) HR Staff have
mutuality of interest with the other rank and file employees, then
they are rightfully excluded from the appropriate bargaining unit. x
x x21(Emphasis supplied)
Petitioner cannot simply rely on jurisprudence without explaining how and why it
should apply to this case. Allegations must be supported by evidence. In this case,
there is barely any at all.
There is likewise no reason for the Court to disturb the conclusion of the Secretary
and the CA that the additional remuneration should be given to employees placed in
an acting capacity for one month. The CA correctly stated:
Likewise, We uphold the public respondent's Order that no employee
should be temporarily placed in a position (acting capacity) for more than
one month without the corresponding adjustment in the salary. Such order
of the public respondent is not in violation of the "equal pay for equal
work" principle, considering that after one (1) month, the employee
performing the job in an acting capacity will be entitled to salary
corresponding to such position.
xxxx
In arriving at its Order, the public respondent took all the relevant evidence
into account and weighed both parties arguments extensively. Thus, public
respondent concluded that a restrictive provision with respect to employees
being placed in an acting capacity may curtail management's valid exercise
of its prerogative. At the same time, it recognized that employees should
not be made to perform work in an acting capacity for extended periods of
time without being adequately compensated. x x x22
Thus, the Court reiterates the doctrine that:

[T]he office of a petition for review on certiorari under Rule 45 of the Rules
of Court requires that it shall raise only questions of law. The factual
findings by quasi-judicial agencies, such as the Department of Labor and
Employment, when supported by substantial evidence, are entitled to great
respect in view of their expertise in their respective fields. Judicial review
of labor cases does not go so far as to evaluate the sufficiency of evidence
on which the labor official's findings rest. It is not our function to assess
and evaluate all over again the evidence, testimonial and documentary,
adduced by the parties to an appeal, particularly where the findings of both
the trial court (here, the DOLE Secretary) and the appellate court on the
matter coincide, as in this case at bar. The Rule limits that function of the
Court to the review or revision of errors of law and not to a second analysis
of the evidence. x x x Thus, absent any showing of whimsical or capricious
exercise of judgment, and unless lack of any basis for the conclusions
made by the appellate court be amply demonstrated, we may not disturb
such factual findings.23
WHEREFORE, the petition is DENIED.
SO ORDERED.

Edmundo G. Manlapao for private respondent.

REGALADO, J.:p
In this special civil action for certiorari, petitioner Central Negros Electric
Cooperative, Inc. (CENECO) seeks to annul the order 1 issued by then Acting
Secretary of Labor Bienvenido E. Laguesma on June 6, 1990, declaring the
projected certification election unnecessary and directing petitioner CENECO to
continue recognizing private respondent CENECO Union of Rational Employees
(CURE) as the sole and exclusive bargaining representative of all the rank-and-file
employees of petitioner's electric cooperative for purposes of collective bargaining.
It appears from the records that on August 15, 1987, CENECO entered into a
collective bargaining agreement with CURE, a labor union representing its rank-andfile employees, providing for a term of three years retroactive to April 1, 1987 and
extending up to March 31, 1990. On December 28, 1989, CURE wrote CENECO
proposing that negotiations be conducted for a new collective bargaining agreement
(CBA).
On January 18, 1990, CENECO denied CURE's request on the ground that, under
applicable decisions of the Supreme Court, employees who at the same time are
members of an electric cooperative are not entitled to form or join a union. 2

3.

Workers and Members of Cooperatives

Republic of the Philippines
SUPREME COURT
Manila

Prior to the submission of the proposal for CBA renegotiation, CURE members, in a
general assembly held on December 9, 1989, approved Resolution No. 35 whereby
it was agreed that 'tall union members shall withdraw, retract, or recall the union
members' membership from Central Negros Electric Cooperative, Inc. in order to
avail (of) the full benefits under the existing Collective Bargaining Agreement
entered into by and between CENECO and CURE, and the supposed benefits that
our union may avail (of) under the renewed CBA. 3 This was ratified by 259 of the
362 union members. CENECO and the Department of Labor and Employment,
Bacolod District, were furnished copies of this resolution.

SECOND DIVISION
G.R. No. 94045 September 13, 1991
CENTRAL NEGROS ELECTRIC COOPERATIVE, INC. (CENECO), petitioner,
vs.
HONORABLE SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT, and
CENECO UNION OF RATIONAL EMPLOYEES (CURE), respondents.
Enrique S. Tabino for petitioner.

However, the withdrawal from membership was denied by CENECO on February 27,
1990 under Resolution No. 90 "for the reason that the basis of withdrawal is not
among the grounds covered by Board Resolution No. 5023, dated November 22,
1989 and that said request is contrary to Board Resolution No. 5033 dated
December 13, 1989, ..." 4
By reason of CENECO's refusal to renegotiate a new CBA, CURE filed a petition for
direct recognition or for certification election, supported by 282 or 72% of the 388
rank-and-file employees in the bargaining unit of CENECO.

CENECO filed a motion to dismiss on the ground that there are legal constraints to
the filing of the certification election, citing the ruling laid down by this Court
in Batangas I Electric Cooperative Labor Union vs. Romeo A. Young, 5 (BATANGAS
case) to the effect that "employees who at the same time are members of an
electric cooperative are not entitled to form or join unions for purposes of collective
bargaining agreement, for certainly an owner cannot bargain with himself or his coowners."

3. The Secretary of Labor, as well as the Med-Arbiter, has no

jurisdiction over the issue of the withdrawal from membership
which is vested in the National Electrification Administration (NEA)
which has direct control and supervision over the operations of
electric cooperatives; and
4. Assuming that the Secretary has jurisdiction, CURE failed to
exhaust administrative remedies by not referring the matter of
membership withdrawal to the NEA.

Med-Arbiter Felizardo T. Serapio issued an order, 6 granting the petition for

certification election which, in effect, was a denial of CENECO's motion to dismiss,
and directing the holding of a certification election between CURE and No Union.

The petition is destitute of merit; certiorari will not lie.

CENECO appealed to the Department of Labor and Employment which issued the
questioned order modifying the aforestated order of the med-arbiter by directly
certifying CURE as the exclusive bargaining representative of the rank-and-file
employees of CURE.

We first rule on the alleged procedural infirmities affecting the instant case. CENECO
avers that the med-arbiter has no jurisdiction to rule on the issue of withdrawal
from membership of its employees in the cooperative which, it claims, is properly
vested in the NEA which has control and supervision over all electric cooperatives.

Hence, this petition.

From a perusal of petitioner's motion to dismiss filed with the med-arbiter, it

becomes readily apparent that the sole basis for petitioner's motion is the illegality
of the employees' membership in respondent union despite the fact that they
allegedly are still members of the cooperative. Petitioner itself adopted the aforesaid
argument in seeking the dismissal of the petition for certification election filed with
the med-arbiter, and the finding made by the latter was merely in answer to the
arguments advanced by petitioner. Hence, petitioner is deemed to have submitted
the issue of membership withdrawal from the cooperative to the jurisdiction of the
med-arbiter and it is now estopped from questioning that same jurisdiction which it
invoked in its motion to dismiss after obtaining an adverse ruling thereon.

Petitioner CENECO argues that respondent Secretary committed a grave abuse of

discretion in not applying to the present case the doctrine enunciated in the
BATANGAS case that employees of an electric cooperative who at the same time are
members of the electric cooperative are prohibited from forming or joining labor
unions for purposes of a collective bargaining agreement. While CENECO recognizes
the employees' right to self-organization, it avers that this is not absolute. Thus, it
opines that employees of an electric cooperative who at the same time are members
thereof are not allowed to form or join labor unions for purposes of collective
bargaining. However, petitioner does not hesitate to admit that the prohibition does
not extend to employees of an electric cooperative who are not members of the
cooperative.
The issue, therefore, actually involves a determination of whether or not the
employees of CENECO who withdrew their membership from the cooperative are
entitled to form or join CURE for purposes of the negotiations for a collective
bargaining agreement proposed by the latter.
As culled from the records, it is the submission of CENECO that the withdrawal from
membership in the cooperative and, as a consequence, the employees' acquisition
of membership in the union cannot be allowed for the following reasons:

Under Article 256 of the Labor Code, to have a valid certification election at least a
majority of all eligible voters in the unit must have cast their votes. It is apparent
that incidental to the power of the med-arbiter to hear and decide representation
cases is the power to determine who the eligible voters are. In so doing, it is
axiomatic that the med-arbiter should determine the legality of the employees'
membership in the union. In the case at bar, it obviously becomes necessary to
consider first the propriety of the employees' membership withdrawal from the
cooperative before a certification election can be had.

1. It was made as a subterfuge or to subvert the ruling in the

BATANGAS case:

Lastly, it is petitioner herein who is actually questioning the propriety of the

withdrawal of its members from the cooperative. Petitioner could have brought the
matter before the NEA if it wanted to and. if such remedy had really been available,
and there is nothing to prevent it from doing so. It would be absurd to fault the
employees for the neglect or laxity of petitioner in protecting its own interests.

2. To allow the withdrawal of the members of CENECO from the

cooperative without justifiable reason would greatly affect the
objectives and goals of petitioner as an electric cooperative;

The argument of CENECO that the withdrawal was merely to subvert the ruling of
this Court in the BATANGAS case is without merit. The case referred to merely
declared that employees who are at the same time members of the cooperative

cannot join labor unions for purposes of collective bargaining. However, nowhere in
said case is it stated that member-employees are prohibited from withdrawing their
membership in the cooperative in order to join a labor union.

bargaining agent of the workers. This amendment affirms the superiority of the
certification election over the direct certification which is no longer available now
under the change in said provision. 8

As discussed by the Solicitor General, Article I, Section 9 of the Articles of

Incorporation and By- Laws of CENECO provides that "any member may withdraw
from membership upon compliance with such uniform terms and conditions as the
Board may prescribe." The same section provides that upon withdrawal, the
member is merely required to surrender his membership certificate and he is to be
refunded his membership fee less any obligation that he has with the cooperative.
There appears to be no other condition or requirement imposed upon a withdrawing
member. Hence, there is no just cause for petitioner's denial of the withdrawal from
membership of its employees who are also members of the union. 7

We have said that where a union has filed a petition for certification election, the
mere fact that no opposition is made does not warrant a direct certification. 9 In said
case which has similar features to that at bar, wherein the respondent Minister
directly certified the union, we held that:

The alleged board resolutions relied upon by petitioner in denying the withdrawal of
the members concerned were never presented nor their contents disclosed either
before the med-arbiter or the Secretary of Labor if only to prove the ratiocination
for said denial. Furthermore, CENECO never averred non-compliance with the terms
and conditions for withdrawal, if any. It appears that the Articles of Incorporation of
CENECO do not provide any ground for withdrawal from membership which
accordingly gives rise to the presumption that the same may be done at any time
and for whatever reason. In addition, membership in the cooperative is on a
voluntary basis. Hence, withdrawal therefrom cannot be restricted unnecessarily.
The right to join an organization necessarily includes the equivalent right not to join
the same.
The right of the employees to self-organization is a compelling reason why their
withdrawal from the cooperative must be allowed. As pointed out by CURE, the
resignation of the member- employees is an expression of their preference for union
membership over that of membership in the cooperative. The avowed policy of the
State to afford fall protection to labor and to promote the primacy of free collective
bargaining mandates that the employees' right to form and join unions for purposes
of collective bargaining be accorded the highest consideration.
Membership in an electric cooperative which merely vests in the member a right to
vote during the annual meeting becomes too trivial and insubstantial vis-a-vis the
primordial and more important constitutional right of an employee to join a union of
his choice. Besides, the 390 employees of CENECO, some of whom have never been
members of the cooperative, represent a very small percentage of the cooperative's
total membership of 44,000. It is inconceivable how the withdrawal of a negligible
number of members could adversely affect the business concerns and operations of
CENECO.
We rule, however, that the direct certification ordered by respondent Secretary is
not proper. By virtue of Executive Order No. 111, which became effective on March
4, 1987, the direct certification originally allowed under Article 257 of the Labor
Code has apparently been discontinued as a method of selecting the exclusive

... As pointed out by petitioner in its petition, what the respondent

Minister achieved in rendering the assailed orders was to make a
mockery of the procedure provided under the law for
representation cases because: ... (c) By directly certifying a Union
without sufficient proof of majority representation, he has in effect
arrogated unto himself the right, vested naturally in the
employee's to choose their collective bargaining representative.
(d) He has in effect imposed upon the petitioner the obligation to
negotiate with a union whose majority representation is under
serious question. This is highly irregular because while the Union
enjoys the blessing of the Minister, it does not enjoy the blessing
of the employees. Petitioner is therefore under threat of being
held liable for refusing to negotiate with a union whose right to
bargaining status has not been legally established.
While there may be some factual variances, the rationale therein is applicable to the
present case in the sense that it is not alone sufficient that a union has the support
of the majority. What is equally important is that everyone be given a democratic
space in the bargaining unit concerned. The most effective way of determining
which labor organization can truly represent the working force is by certification
election. 10
WHEREFORE, the questioned order for the direct certification of respondent CURE as
the bargaining representative of the employees of petitioner CENECO is hereby
ANNULLED and SET ASIDE. The med-arbiter is hereby ordered to conduct a
certification election among the rank-and- file employees of CENECO with CURE and
No Union as the choices therein.

4.

Employees of International Organizations

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 85750 September 28, 1990

INTERNATIONAL CATHOLIC IMMIGRATION COMMISSION, petitioner

vs
HON. PURA CALLEJA IN HER CAPACITY AS DIRECTOR OF THE BUREAU OF
LABOR RELATIONS AND TRADE UNIONS OF THE PHILIPPINES AND ALLIED
SERVICES (TUPAS) WFTU respondents.
G.R. No. 89331 September 28, 1990
KAPISANAN NG MANGGAGAWA AT TAC SA IRRI-ORGANIZED LABOR
ASSOCIATION IN LINE INDUSTRIES AND AGRICULTURE, petitioner,
vs
SECRETARY OF LABOR AND EMPLOYMENT AND INTERNATIONAL RICE
RESEARCH INSTITUTE, INC.,respondents.

MELENCIO-HERRERA, J.:
Consolidated on 11 December 1989, these two cases involve the validity of the
claim of immunity by the International Catholic Migration Commission (ICMC) and
the International Rice Research Institute, Inc. (IRRI) from the application of
Philippine labor laws.
I
Facts and Issues
A. G.R. No. 85750 the International Catholic Migration Commission
(ICMC) Case.
As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from
South Vietnam's communist rule confronted the international community.

In response to this crisis, on 23 February 1981, an Agreement was forged between

the Philippine Government and the United Nations High Commissioner for Refugees
whereby an operating center for processing Indo-Chinese refugees for eventual
resettlement to other countries was to be established in Bataan (Annex "A", Rollo,
pp. 22-32).
ICMC was one of those accredited by the Philippine Government to operate the
refugee processing center in Morong, Bataan. It was incorporated in New York, USA,
at the request of the Holy See, as a non-profit agency involved in international
humanitarian and voluntary work. It is duly registered with the United Nations
Economic and Social Council (ECOSOC) and enjoys Consultative Status, Category II.
As an international organization rendering voluntary and humanitarian services in
the Philippines, its activities are parallel to those of the International Committee for
Migration (ICM) and the International Committee of the Red Cross (ICRC) [DOLE
Records of BLR Case No. A-2-62-87, ICMC v. Calleja, Vol. 1].
On 14 July 1986, Trade Unions of the Philippines and Allied Services (TUPAS) filed
with the then Ministry of Labor and Employment a Petition for Certification Election
among the rank and file members employed by ICMC The latter opposed the
petition on the ground that it is an international organization registered with the
United Nations and, hence, enjoys diplomatic immunity.
On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed
the petition for lack of jurisdiction.
On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR),
reversed the Med-Arbiter's Decision and ordered the immediate conduct of a
certification election. At that time, ICMC's request for recognition as a specialized
agency was still pending with the Department of Foreign Affairs (DEFORAF).
Subsequently, however, on 15 July 1988, the Philippine Government, through the
DEFORAF, granted ICMC the status of a specialized agency with corresponding
diplomatic privileges and immunities, as evidenced by a Memorandum of Agreement
between the Government and ICMC (Annex "E", Petition, Rollo, pp. 41-43), infra.
ICMC then sought the immediate dismissal of the TUPAS Petition for Certification
Election invoking the immunity expressly granted but the same was denied by
respondent BLR Director who, again, ordered the immediate conduct of a preelection conference. ICMC's two Motions for Reconsideration were denied despite an
opinion rendered by DEFORAF on 17 October 1988 that said BLR Order violated
ICMC's diplomatic immunity.
Thus, on 24 November 1988, ICMC filed the present Petition for Certiorari with
Preliminary Injunction assailing the BLR Order.

On 28 November 1988, the Court issued a Temporary Restraining Order enjoining

the holding of the certification election.
On 10 January 1989, the DEFORAF, through its Legal Adviser, retired Justice Jorge
C. Coquia of the Court of Appeals, filed a Motion for Intervention alleging that, as
the highest executive department with the competence and authority to act on
matters involving diplomatic immunity and privileges, and tasked with the conduct
of Philippine diplomatic and consular relations with foreign governments and UN
organizations, it has a legal interest in the outcome of this case.
Over the opposition of the Solicitor General, the Court allowed DEFORAF
intervention.
On 12 July 1989, the Second Division gave due course to the ICMC Petition and
required the submittal of memoranda by the parties, which has been complied with.
As initially stated, the issue is whether or not the grant of diplomatic privileges and
immunites to ICMC extends to immunity from the application of Philippine labor
laws.
ICMC sustains the affirmative of the proposition citing (1) its Memorandum of
Agreement with the Philippine Government giving it the status of a specialized
agency, (infra); (2) the Convention on the Privileges and Immunities of Specialized
Agencies, adopted by the UN General Assembly on 21 November 1947 and
concurred in by the Philippine Senate through Resolution No. 91 on 17 May 1949
(the Philippine Instrument of Ratification was signed by the President on 30 August
1949 and deposited with the UN on 20 March 1950) infra; and (3) Article II, Section
2 of the 1987 Constitution, which declares that the Philippines adopts the generally
accepted principles of international law as part of the law of the land.
Intervenor DEFORAF upholds ICMC'S claim of diplomatic immunity and seeks an
affirmance of the DEFORAF determination that the BLR Order for a certification
election among the ICMC employees is violative of the diplomatic immunity of said
organization.

Before a Decision could be rendered in the ICMC Case, the Third Division, on 11
December 1989, resolved to consolidate G.R. No. 89331 pending before it with G.R.
No. 85750, the lower-numbered case pending with the Second Division, upon
manifestation by the Solicitor General that both cases involve similar issues.
The facts disclose that on 9 December 1959, the Philippine Government and the
Ford and Rockefeller Foundations signed a Memorandum of Understanding
establishing the International Rice Research Institute (IRRI) at Los Baos, Laguna.
It was intended to be an autonomous, philanthropic, tax-free, non-profit, non-stock
organization designed to carry out the principal objective of conducting "basic
research on the rice plant, on all phases of rice production, management,
distribution and utilization with a view to attaining nutritive and economic advantage
or benefit for the people of Asia and other major rice-growing areas through
improvement in quality and quantity of rice."
Initially, IRRI was organized and registered with the Securities and Exchange
Commission as a private corporation subject to all laws and regulations. However,
by virtue of Pres. Decree No. 1620, promulgated on 19 April 1979, IRRI was
granted the status, prerogatives, privileges and immunities of an international
organization.
The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a
legitimate labor organization with an existing local union, the Kapisanan ng
Manggagawa at TAC sa IRRI (Kapisanan, for short) in respondent IRRI.
On 20 April 1987, the Kapisanan filed a Petition for Direct Certification Election with
Region IV, Regional Office of the Department of Labor and Employment (DOLE).
IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the
status of an international organization and granting it immunity from all civil,
criminal and administrative proceedings under Philippine laws.
On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on the basis
of Pres. Decree No. 1620 and dismissed the Petition for Direct Certification.

Respondent BLR Director, on the other hand, with whom the Solicitor General
agrees, cites State policy and Philippine labor laws to justify its assailed Order,
particularly, Article II, Section 18 and Article III, Section 8 of the 1987
Constitution, infra; and Articles 243 and 246 of the Labor Code, as amended, ibid.
In addition, she contends that a certification election is not a litigation but a mere
investigation of a non-adversary, fact-finding character. It is not a suit against ICMC
its property, funds or assets, but is the sole concern of the workers themselves.

On appeal, the BLR Director, who is the public respondent in the ICMC Case, set
aside the Med-Arbiter's Order and authorized the calling of a certification election
among the rank-and-file employees of IRRI. Said Director relied on Article 243 of
the Labor Code, as amended, infra and Article XIII, Section 3 of the 1987
Constitution, 1and held that "the immunities and privileges granted to IRRI do not
include exemption from coverage of our Labor Laws." Reconsideration sought by
IRRI was denied.

B. G.R. No. 89331 (The International Rice Research Institute [IRRI] Case).

On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR
Director's Order, dismissed the Petition for Certification Election, and held that the
grant of specialized agency status by the Philippine Government to the IRRI bars

DOLE from assuming and exercising jurisdiction over IRRI Said Resolution reads in
part as follows:
Presidential Decree No. 1620 which grants to the IRRI the status,
prerogatives, privileges and immunities of an international
organization is clear and explicit. It provides in categorical terms
that:
Art. 3 The Institute shall enjoy immunity from any penal, civil
and administrative proceedings, except insofar as immunity has
been expressly waived by the Director-General of the Institution
or his authorized representative.
Verily, unless and until the Institute expressly waives its immunity,
no summons, subpoena, orders, decisions or proceedings ordered
by any court or administrative or quasi-judicial agency are
enforceable as against the Institute. In the case at bar there was
no such waiver made by the Director-General of the Institute.
Indeed, the Institute, at the very first opportunity already
vehemently questioned the jurisdiction of this Department by
filing an ex-parte motion to dismiss the case.

invoked by the Secretary of Labor, is unconstitutional in so far as it deprives the

Filipino workers of their fundamental and constitutional right to form trade unions
for the purpose of collective bargaining as enshrined in the 1987 Constitution.
A procedural issue is also raised. Kapisanan faults respondent Secretary of Labor for
entertaining IRRI'S appeal from the Order of the Director of the Bureau of Labor
Relations directing the holding of a certification election. Kapisanan contends that
pursuant to Sections 7, 8, 9 and 10 of Rule V 2 of the Omnibus Rules Implementing
the Labor Code, the Order of the BLR Director had become final and unappeable and
that, therefore, the Secretary of Labor had no more jurisdiction over the said
appeal.
On the other hand, in entertaining the appeal, the Secretary of Labor relied on
Section 25 of Rep. Act. No. 6715, which took effect on 21 March 1989, providing for
the direct filing of appeal from the Med-Arbiter to the Office of the Secretary of
Labor and Employment instead of to the Director of the Bureau of Labor Relations in
cases involving certification election orders.
III
Findings in Both Cases.

Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of
discretion by respondent Secretary of Labor in upholding IRRI's diplomatic
immunity.

There can be no question that diplomatic immunity has, in fact, been granted ICMC
and IRRI.

The Third Division, to which the case was originally assigned, required the
respondents to comment on the petition. In a Manifestation filed on 4 August 1990,
the Secretary of Labor declared that it was "not adopting as his own" the decision of
the BLR Director in the ICMC Case as well as the Comment of the Solicitor General
sustaining said Director. The last pleading was filed by IRRI on 14 August 1990.

Article II of the Memorandum of Agreement between the Philippine Government and

ICMC provides that ICMC shall have a status "similar to that of a specialized
agency." Article III, Sections 4 and 5 of the Convention on the Privileges and
Immunities of Specialized Agencies, adopted by the UN General Assembly on 21
November 1947 and concurred in by the Philippine Senate through Resolution No.
19 on 17 May 1949, explicitly provides:

Instead of a Comment, the Solicitor General filed a Manifestation and Motion

praying that he be excused from filing a comment "it appearing that in the earlier
case of International Catholic Migration Commission v. Hon. Pura Calleja, G.R. No.
85750. the Office of the Solicitor General had sustained the stand of Director Calleja
on the very same issue now before it, which position has been superseded by
respondent Secretary of Labor in G.R. No. 89331," the present case. The Court
acceded to the Solicitor General's prayer.

Art. III, Section 4. The specialized agencies, their property and

assets, wherever located and by whomsoever held, shall enjoy
immunity from every form of legal process except insofar as in
any particular case they have expressly waived their immunity. It
is, however, understood that no waiver of immunity shall extend
to any measure of execution.

The Court is now asked to rule upon whether or not the Secretary of Labor
committed grave abuse of discretion in dismissing the Petition for Certification
Election filed by Kapisanan.
Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI the
status, privileges, prerogatives and immunities of an international organization,

Sec. 5. The premises of the specialized agencies shall be

inviolable. The property and assets of the specialized agencies,
wherever located and by whomsoever held shall be immune from
search, requisition, confiscation, expropriation and any other form
of interference, whether by executive, administrative, judicial or
legislative action. (Emphasis supplied).

IRRI is similarly situated, Pres. Decree No. 1620, Article 3, is explicit in its grant of
immunity, thus:

United Nations, for instance, is an international organization dedicated to the

propagation of world peace.

Art. 3. Immunity from Legal Process. The Institute shall enjoy

immunity from any penal, civil and administrative proceedings,
except insofar as that immunity has been expressly waived by the
Director-General of the Institute or his authorized representatives.

"Specialized agencies" are international organizations having functions in particular

fields. The term appears in Articles 57 8 and 63 9 of the Charter of the United
Nations:

Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC'S invocation
of immunity when in a Memorandum, dated 17 October 1988, it expressed the view
that "the Order of the Director of the Bureau of Labor Relations dated 21 September
1988 for the conduct of Certification Election within ICMC violates the diplomatic
immunity of the organization." Similarly, in respect of IRRI, the DEFORAF speaking
through The Acting Secretary of Foreign Affairs, Jose D. Ingles, in a letter, dated 17
June 1987, to the Secretary of Labor, maintained that "IRRI enjoys immunity from
the jurisdiction of DOLE in this particular instance."
The foregoing opinions constitute a categorical recognition by the Executive Branch
of the Government that ICMC and IRRI enjoy immunities accorded to international
organizations, which determination has been held to be a political question
conclusive upon the Courts in order not to embarrass a political department of
Government.
It is a recognized principle of international law and under our
system of separation of powers that diplomatic immunity is
essentially a political question and courts should refuse to look
beyond a determination by the executive branch of the
government, and where the plea of diplomatic immunity is
recognized and affirmed by the executive branch of the
government as in the case at bar, it is then the duty of the courts
to accept the claim of immunity upon appropriate suggestion by
the principal law officer of the government . . . or other officer
acting under his direction. Hence, in adherence to the settled
principle that courts may not so exercise their jurisdiction . . . as
to embarrass the executive arm of the government in conducting
foreign relations, it is accepted doctrine that in such cases the
judicial department of (this) government follows the action of the
political branch and will not embarrass the latter by assuming an
antagonistic jurisdiction. 3
A brief look into the nature of international organizations and specialized agencies is
in order. The term "international organization" is generally used to describe an
organization set up by agreement between two or more states. 4 Under
contemporary international law, such organizations are endowed with some degree
of international legal personality 5 such that they are capable of exercising specific
rights, duties and powers. 6 They are organized mainly as a means for conducting
general international business in which the member states have an interest. 7 The

The Charter, while it invests the United Nations with the general
task of promoting progress and international cooperation in
economic, social, health, cultural, educational and related matters,
contemplates that these tasks will be mainly fulfilled not by organs
of the United Nations itself but by autonomous international
organizations established by inter-governmental agreements
outside the United Nations. There are now many such
international agencies having functions in many different fields,
e.g. in posts, telecommunications, railways, canals, rivers, sea
transport, civil aviation, meteorology, atomic energy, finance,
trade, education and culture, health and refugees. Some are
virtually world-wide in their membership, some are regional or
otherwise limited in their membership. The Charter provides that
those agencies which have "wide international responsibilities" are
to be brought into relationship with the United Nations by
agreements entered into between them and the Economic and
Social Council, are then to be known as "specialized agencies." 10
The rapid growth of international organizations under contemporary international
law has paved the way for the development of the concept of international
immunities.
It is now usual for the constitutions of international organizations
to contain provisions conferring certain immunities on the
organizations themselves, representatives of their member states
and persons acting on behalf of the organizations. A series of
conventions, agreements and protocols defining the immunities of
various international organizations in relation to their members
generally are now widely in force; . . . 11
There are basically three propositions underlying the grant of international
immunities to international organizations. These principles, contained in the ILO
Memorandum are stated thus: 1) international institutions should have a status
which protects them against control or interference by any one government in the
performance of functions for the effective discharge of which they are responsible to
democratically constituted international bodies in which all the nations concerned
are represented; 2) no country should derive any national financial advantage by
levying fiscal charges on common international funds; and 3) the international
organization should, as a collectivity of States members, be accorded the facilities
for the conduct of its official business customarily extended to each other by its

individual member States. 12 The theory behind all three propositions is said to be
essentially institutional in character. "It is not concerned with the status, dignity or
privileges of individuals, but with the elements of functional independence
necessary to free international institutions from national control and to enable them
to discharge their responsibilities impartially on behalf of all their
members. 13 The raison d'etre for these immunities is the assurance of unimpeded
performance of their functions by the agencies concerned.
The grant of immunity from local jurisdiction to ICMC and IRRI is clearly
necessitated by their international character and respective purposes. The objective
is to avoid the danger of partiality and interference by the host country in their
internal workings. The exercise of jurisdiction by the Department of Labor in these
instances would defeat the very purpose of immunity, which is to shield the affairs
of international organizations, in accordance with international practice, from
political pressure or control by the host country to the prejudice of member States
of the organization, and to ensure the unhampered performance of their functions.
ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its
basic rights, which are guaranteed by Article II, Section 18, 14 Article III, Section
8, 15 and Article XIII, Section 3 (supra), of the 1987 Constitution; and implemented
by Articles 243 and 246 of the Labor Code, 16 relied on by the BLR Director and by
Kapisanan.
For, ICMC employees are not without recourse whenever there are disputes to be
settled. Section 31 of the Convention on the Privileges and Immunities of the
Specialized Agencies of the United Nations 17 provides that "each specialized agency
shall make provision for appropriate modes of settlement of: (a) disputes arising out
of contracts or other disputes of private character to which the specialized agency is
a party." Moreover, pursuant to Article IV of the Memorandum of Agreement
between ICMC the the Philippine Government, whenever there is any abuse of
privilege by ICMC, the Government is free to withdraw the privileges and immunities
accorded. Thus:
Art. IV. Cooperation with Government Authorities. 1. The
Commission shall cooperate at all times with the appropriate
authorities of the Government to ensure the observance of
Philippine laws, rules and regulations, facilitate the proper
administration of justice and prevent the occurrences of any abuse
of the privileges and immunities granted its officials and alien
employees in Article III of this Agreement to the Commission.
2. In the event that the Government determines that there has
been an abuse of the privileges and immunities granted under this
Agreement, consultations shall be held between the Government
and the Commission to determine whether any such abuse has
occurred and, if so, the Government shall withdraw the privileges
and immunities granted the Commission and its officials.

Neither are the employees of IRRI without remedy in case of dispute with
management as, in fact, there had been organized a forum for better managementemployee relationship as evidenced by the formation of the Council of IRRI
Employees and Management (CIEM) wherein "both management and employees
were and still are represented for purposes of maintaining mutual and beneficial
cooperation between IRRI and its employees." The existence of this Union factually
and tellingly belies the argument that Pres. Decree No. 1620, which grants to IRRI
the status, privileges and immunities of an international organization, deprives its
employees of the right to self-organization.
The immunity granted being "from every form of legal process except in so far as in
any particular case they have expressly waived their immunity," it is inaccurate to
state that a certification election is beyond the scope of that immunity for the
reason that it is not a suit against ICMC. A certification election cannot be viewed as
an independent or isolated process. It could tugger off a series of events in the
collective bargaining process together with related incidents and/or concerted
activities, which could inevitably involve ICMC in the "legal process," which includes
"any penal, civil and administrative proceedings." The eventuality of Court litigation
is neither remote and from which international organizations are precisely shielded
to safeguard them from the disruption of their functions. Clauses on jurisdictional
immunity are said to be standard provisions in the constitutions of international
Organizations. "The immunity covers the organization concerned, its property and
its assets. It is equally applicable to proceedings in personam and proceedings in
rem." 18
We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p.
161, Rollo), wherein TUPAS calls attention to the case entitled "International
Catholic Migration Commission v. NLRC, et als., (G.R. No. 72222, 30 January 1989,
169 SCRA 606), and claims that, having taken cognizance of that dispute (on the
issue of payment of salary for the unexpired portion of a six-month probationary
employment), the Court is now estopped from passing upon the question of DOLE
jurisdiction petition over ICMC.
We find no merit to said submission. Not only did the facts of said controversy occur
between 1983-1985, or before the grant to ICMC on 15 July 1988 of the status of a
specialized agency with corresponding immunities, but also because ICMC in that
case did not invoke its immunity and, therefore, may be deemed to have waived it,
assuming that during that period (1983-1985) it was tacitly recognized as enjoying
such immunity.
Anent the procedural issue raised in the IRRI Case, suffice it to state that the
Decision of the BLR Director, dated 15 February 1989, had not become final because
of a Motion for Reconsideration filed by IRRI Said Motion was acted upon only on 30
March 1989 when Rep. Act No. 6715, which provides for direct appeals from the
Orders of the Med-Arbiter to the Secretary of Labor in certification election cases
either from the order or the results of the election itself, was already in effect,
specifically since 21 March 1989. Hence, no grave abuse of discretion may be

imputed to respondent Secretary of Labor in his assumption of appellate

jurisdiction, contrary to Kapisanan's allegations. The pertinent portion of that law
provides:
Art. 259. Any party to an election may appeal the order or
results of the election as determined by the Med-Arbiter directly to
the Secretary of Labor and Employment on the ground that the
rules and regulations or parts thereof established by the Secretary
of Labor and Employment for the conduct of the election have
been violated. Such appeal shall be decided within 15 calendar
days (Emphasis supplied).
En passant, the Court is gratified to note that the heretofore antagonistic positions
assumed by two departments of the executive branch of government have been
rectified and the resultant embarrassment to the Philippine Government in the eyes
of the international community now, hopefully, effaced.
WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the
Order of the Bureau of Labor Relations for certification election is SET ASIDE, and
the Temporary Restraining Order earlier issued is made PERMANENT.
In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of
discretion having been committed by the Secretary of Labor and Employment in
dismissing the Petition for Certification Election.

SO ORDERED.

The Company opposed the petition mainly on the ground that the union members
are actually not employees but are independent contractors as evidenced by the
collection agency agreement which they signed.
The respondent Med-Arbiter, finding that there exists an employer-employee
relationship between the union members and the Company, granted the petition for
certification election. On appeal, Secretary of Labor Franklin M. Drilon affirmed it.
The motion for reconsideration of the Secretary's resolution was denied. Hence, this
petition in which the Company alleges that public respondents acted in excess of
jurisdiction and/or committed grave abuse of discretion in that:
a) the Department of Labor and Employment (DOLE) has no jurisdiction
over the case since the existence of employer-employee relationship is at
issue;

c) the public respondents patently erred in finding that there exists an

employer-employee relationship;

Non-employees
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 91307

January 24, 1991

SINGER SEWING MACHINE COMPANY, petitioner

vs.
HON. FRANKLIN M. DRILON, MED-ARBITER FELIX B. CHAGUILE, JR., and
SINGER MACHINE COLLECTORS UNION-BAGUIO (SIMACUB), respondents.

GUTIERREZ, JR., J.:

On February 15, 1989, the respondent union filed a petition for direct certification
as the sole and exclusive bargaining agent of all collectors of the Singer Sewing
Machine Company, Baguio City branch (hereinafter referred to as "the Company").

b) the right of petitioner to due process was denied when the evidence of
the union members' being commission agents was disregarded by the
Labor Secretary;

No pronouncement as to costs.

5.

This is a petition for certiorari assailing the order of Med-Arbiter Designate Felix B.
Chaguile, Jr., the resolution of then Labor Secretary Franklin M. Drilon affirming said
order on appeal and the order denying the motion for reconsideration in the case
entitled "In Re: Petition for Direct Certification as the Sole and Exclusive Collective
Bargaining Agent of Collectors of Singer Sewing Machine Company-Singer Machine
Collectors Union-Baguio (SIMACUB)" docketed as OS-MA-A-7-119-89 (IRD Case No.
02-89 MED).

d) the public respondents whimsically disregarded the well-settled rule that

commission agents are not employees but are independent contractors.
The respondents, on the other hand, insist that the provisions of the Collection
Agency Agreement belie the Company's position that the union members are
independent contractors. To prove that union members are employees, it is asserted
that they "perform the most desirable and necessary activities for the continuous
and effective operations of the business of the petitioner Company" (citing Article
280 of the Labor Code). They add that the termination of the agreement by the
petitioner pending the resolution of the case before the DOLE "only shows the
weakness of petitioner's stand" and was "for the purpose of frustrating the
constitutionally mandated rights of the members of private respondent union to selforganization and collective organization." They also contend that under Section 8,
Rule 8, Book No. III of the Omnibus Rules Implementing the Labor Code, which
defines job-contracting, they cannot legally qualify as independent contractors who
must be free from control of the alleged employer, who carry independent

businesses and who have substantial capital or investment in the form of

equipment, tools, and the like necessary in the conduct of the business.

work. After a careful analysis of the contents of the agreement, we rule in favor of
the petitioner.

The present case mainly calls for the application of the control test, which if not
satisfied, would lead us to conclude that no employer-employee relationship exists.
Hence, if the union members are not employees, no right to organize for purposes
of bargaining, nor to be certified as such bargaining agent can ever be recognized.
The following elements are generally considered in the determination of the
employer-employee relationship; "(1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power
to control the employee's conduct although the latter is the most important
element" (Mafinco Trading Corporation v. Ople, 70 SCRA 139 [1976]; Development
Bank of the Philippines v. National Labor Relations Commission, 175 SCRA 537
[1989]; Rosario Brothers, Inc. v. Ople, 131 SCRA 72 [1984]; Broadway Motors Inc.
v. NLRC, 156 SCRA 522 [1987]; Brotherhood Labor Unity Movement in the
Philippines v. Zamora, 147 SCRA 49 [1986]).

The requirement that collection agents utilize only receipt forms and report forms
issued by the Company and that reports shall be submitted at least once a week is
not necessarily an indication of control over the means by which the job of collection
is to be performed. The agreement itself specifically explains that receipt forms shall
be used for the purpose of avoiding a co-mingling of personal funds of the agent
with the money collected on behalf of the Company. Likewise, the use of standard
report forms as well as the regular time within which to submit a report of collection
are intended to facilitate order in office procedures. Even if the report requirements
are to be called control measures, any control is only with respect to the end result
of the collection since the requirements regulate the things to be done after the
performance of the collection job or the rendition of the service.

The Collection Agency Agreement defines the relationship between the Company
and each of the union members who signed a contract. The petitioner relies on the
following stipulations in the agreements: (a) a collector is designated as a collecting
agent" who is to be considered at all times as an independent contractor and not
employee of the Company; (b) collection of all payments on installment accounts
are to be made monthly or oftener; (c) an agent is paid his compensation for
service in the form of a commission of 6% of all collections made and turned over
plus a bonus on said collections; (d) an agent is required to post a cash bond of
three thousand pesos (P3,000.00) to assure the faithful performance and
observance of the terms and conditions under the agreement; (e) he is subject to
all the terms and conditions in the agreement; (f) the agreement is effective for one
year from the date of its execution and renewable on a yearly basis; and (g) his
services shall be terminated in case of failure to satisfy the minimum monthly
collection performance required, failure to post a cash bond, or cancellation of the
agreement at the instance of either party unless the agent has a pending obligation
or indebtedness in favor of the Company.
Meanwhile, the respondents rely on other features to strengthen their position that
the collectors are employees. They quote paragraph 2 which states that an agent
shall utilize only receipt forms authorized and issued by the Company. They also
note paragraph 3 which states that an agent has to submit and deliver at least once
a week or as often as required a report of all collections made using report forms
furnished by the Company. Paragraph 4 on the monthly collection quota required by
the Company is deemed by respondents as a control measure over the means by
which an agent is to perform his services.

The monthly collection quota is a normal requirement found in similar contractual

agreements and is so stipulated to encourage a collecting agent to report at least
the minimum amount of proceeds. In fact, paragraph 5, section b gives a bonus,
aside from the regular commission every time the quota is reached. As a
requirement for the fulfillment of the contract, it is subject to agreement by both
parties. Hence, if the other contracting party does not accede to it, he can choose
not to sign it. From the records, it is clear that the Company and each collecting
agent intended that the former take control only over the amount of collection,
which is a result of the job performed.
The respondents' contention that the union members are employees of the
Company is based on selected provisions of the Agreement but ignores the following
circumstances which respondents never refuted either in the trial proceedings
before the labor officials nor in its pleadings filed before this Court.
1. The collection agents are not required to observe office hours or report
to Singer's office everyday except, naturally and necessarily, for the
purpose of remitting their collections.
2. The collection agents do not have to devote their time exclusively for
SINGER. There is no prohibition on the part of the collection agents from
working elsewhere. Nor are these agents required to account for their time
and submit a record of their activity.
3. The manner and method of effecting collections are left solely to the
discretion of the collection agents without any interference on the part of
Singer.

The nature of the relationship between a company and its collecting agents depends
on the circumstances of each particular relationship. Not all collecting agents are
employees and neither are all collecting agents independent contractors. The
collectors could fall under either category depending on the facts of each case.

4. The collection agents shoulder their transportation expenses incurred in

the collections of the accounts assigned to them.

The Agreement confirms the status of the collecting agent in this case as an
independent contractor not only because he is explicitly described as such but also
because the provisions permit him to perform collection services for the company
without being subject to the control of the latter except only as to the result of his

5. The collection agents are paid strictly on commission basis. The amounts
paid to them are based solely on the amounts of collection each of them
make. They do not receive any commission if they do not effect any
collection even if they put a lot of effort in collecting. They are paid
commission on the basis of actual collections.

6. The commissions earned by the collection agents are directly deducted

by them from the amount of collections they are able to effect. The net
amount is what is then remitted to Singer." (Rollo, pp. 7-8)
If indeed the union members are controlled as to the manner by which they are
supposed to perform their collections, they should have explicitly said so in detail by
specifically denying each of the facts asserted by the petitioner. As there seems to
be no objections on the part of the respondents, the Court finds that they miserably
failed to defend their position.
A thorough examination of the facts of the case leads us to the conclusion that the
existence of an employer-employee relationship between the Company and the
collection agents cannot be sustained.
The plain language of the agreement reveals that the designation as collection
agent does not create an employment relationship and that the applicant is to be
considered at all times as an independent contractor. This is consistent with the first
rule of interpretation that the literal meaning of the stipulations in the contract
controls (Article 1370, Civil Code; La Suerte Cigar and Cigarette Factory v. Director
of Bureau of Labor, Relations, 123 SCRA 679 [1983]). No such words as "to hire and
employ" are present. Moreover, the agreement did not fix an amount for wages nor
the required working hours. Compensation is earned only on the basis of the
tangible results produced, i.e., total collections made (Sarra v. Agarrado, 166 SCRA
625 [1988]). In Investment Planning Corp. of the Philippines v. Social Security
System, 21 SCRA 924 [1967] which involved commission agents, this Court had the
occasion to rule, thus:
We are convinced from the facts that the work of petitioner's agents or
registered representatives more nearly approximates that of an
independent contractor than that of an employee. The latter is paid for the
labor he performs, that is, for the acts of which such labor consists the
former is paid for the result thereof . . . .
xxx

xxx

xxx

Even if an agent of petitioner should devote all of his time and effort trying
to sell its investment plans he would not necessarily be entitled to
compensation therefor. His right to compensation depends upon and is
measured by the tangible results he produces."
Moreover, the collection agent does his work "more or less at his own pleasure"
without a regular daily time frame imposed on him (Investment Planning
Corporation of the Philippines v. Social Security System, supra; See alsoSocial
Security System v. Court of Appeals, 30 SCRA 210 [1969]).
The grounds specified in the contract for termination of the relationship do not
support the view that control exists "for the causes of termination thus specified
have no relation to the means and methods of work that are ordinarily required of
or imposed upon employees." (Investment Planning Corp. of the Phil. v. Social
Security System, supra)

The last and most important element of the control test is not satisfied by the terms
and conditions of the contracts. There is nothing in the agreement which implies
control by the Company not only over the end to be achieved but also over the
means and methods in achieving the end (LVN Pictures, Inc. v. Philippine Musicians
Guild, 1 SCRA 132 [1961]).
The Court finds the contention of the respondents that the union members are
employees under Article 280 of the Labor Code to have no basis. The definition that
regular employees are those who perform activities which are desirable and
necessary for the business of the employer is not determinative in this case. Any
agreement may provide that one party shall render services for and in behalf of
another for a consideration (no matter how necessary for the latter's business) even
without being hired as an employee. This is precisely true in the case of an
independent contractorship as well as in an agency agreement. The Court agrees
with the petitioner's argument that Article 280 is not the yardstick for determining
the existence of an employment relationship because it merely distinguishes
between two kinds of employees, i.e., regular employees and casual employees, for
purposes of determining the right of an employee to certain benefits, to join or form
a union, or to security of tenure. Article 280 does not apply where the existence of
an employment relationship is in dispute.
Even Section 8, Rule 8, Book III of the Omnibus Rules Implementing the Labor Code
does not apply to this case.1wphi1Respondents assert that the said provision on
job contracting requires that for one to be considered an independent contractor, he
must have "substantial capital or investment in the form of tools, equipment,
machineries, work premises, and other materials which are necessary in the
conduct of his business." There is no showing that a collection agent needs tools
and machineries. Moreover, the provision must be viewed in relation to Article 106
of the Labor Code which provides:
Art. 106. Contractor or subcontractor. Whenever an employer enters
into a contract with another person for the performance of the former's
work, the employees of the contractor and of the latter's subcontractor, if
any, shall be paid in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of
his employees in accordance with this Code, the employer shall be jointly
and severally liable with his contractor or subcontractor to such employees
to the extent of the work performed under the contract, in the same
manner and extent that he is liable to employees directly employed by him.
xxx

xxx

xxx

There is "labor-only" contracting where the person supplying workers to an

employer does not have substantial capital or investment in the form of
tools, equipment, machineries, work premises, among others, and the
workers recruited and placed by such persons are performing activities
which are directly related to the principal business of such employer. In
such cases, the person or intermediary shall be considered merely as an
agent of the employer who shall be responsible to the workers in the same
manner and extent as if the latter were directly employed by him." (p. 20)

It can readily be seen that Section 8, Rule 8, Book Ill and Article 106 are relevant in
determining whether the employer is solidarily liable to the employees of an alleged
contractor and/or sub-contractor for unpaid wages in case it is proven that there is
a job-contracting situation.
The assumption of jurisdiction by the DOLE over the case is justified as the case
was brought on appeal by the petitioner itself which prayed for the reversal of the
Order of the Med-Arbiter on the ground that the union members are not its
employees. Hence, the petitioner submitted itself as well as the issue of existence of
an employment relationship to the jurisdiction of the DOLE which was faced with a
dispute on an application for certification election.
The Court finds that since private respondents are not employees of the Company,
they are not entitled to the constitutional right to join or form a labor organization
for purposes of collective bargaining. Accordingly, there is no constitutional and
legal basis for their "union" to be granted their petition for direct certification. This
Court made this pronouncement in La Suerte Cigar and Cigarette Factory v. Director
of Bureau of Labor Relations, supra:
. . . The question of whether employer-employee relationship exists is a
primordial consideration before extending labor benefits under the
workmen's compensation, social security, medicare, termination pay and
labor relations law. It is important in the determination of who shall be
included in a proposed bargaining unit because, it is the sine qua non, the
fundamental and essential condition that a bargaining unit be composed of
employees. Failure to establish this juridical relationship between the union
members and the employer affects the legality of the union itself. It means
the ineligibility of the union members to present a petition for certification
election as well as to vote therein . . . . (At p. 689)
WHEREFORE, the Order dated June 14,1989 of Med-Arbiter Designate Felix B.
Chaguile, Jr., the Resolution and Order of Secretary Franklin M. Drilon dated
November 2, 1989 and December 14, 1989, respectively are hereby REVERSED and
SET ASIDE. The petition for certification election is ordered dismissed and the
temporary restraining order issued by the Court on December 21, 1989 is made
permanent.
SO ORDERED.
E.

Party Protected
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. L-30241 June 30, 1972

MACTAN WORKERS UNION and TOMAS FERRER, as President

thereof, plaintiffs-appellees,
vs.
DON RAMON ABOITIZ, President, Cebu Shipyard & Engineering Works, Inc.;
EDDIE LIM, as Treasurer; JESUS DIAGO, Superintendent of the aforesaid
corporation; WILFREDO VIRAY, as Resident Manager of the Shipyard &
Engineering Works, Inc.; and the CEBU SHIPYARD & ENGINEERING WORKS,
INC., defendants-appellees; ASSOCIATION LABOR UNION, intervenorappellant.

FERNANDO, J.:p
The dispute in this appealed decision from the Court of First Instance of Cebu on
questions of law is between plaintiff Mactan Workers Union 1 and intervenor
Associated Labor Union. The former in its complaint on behalf of seventy-two of its
members working in defendant corporation, Cebu Shipyard and Engineering Works,
Inc. 2 did file a money claim in the amount of P4,035.82 representing the second
installment of a profit-sharing agreement under a collective bargaining contract
entered into between such business firm and intervenor labor union as the exclusive
collective bargaining representative of its workers. The plaintiff was successful both
in the City Court of Lapulapu where such complaint was first started as well as in
the Court of First Instance of Cebu. It is from the decision of the latter court,
rendered on February 22, 1968, that this appeal was interposed by intervenor
Associated Labor Union. It must have been an awareness on appellant's part that on
the substantive aspect, the claim of plaintiff to what was due its members under
such collective bargaining agreement was meritorious that led it to rely on alleged
procedural obstacles for the reversal sought. Intervenor, however, has not thereby
dented the judgment. As will be more fully explained, there are no applicable
procedural doctrines that stand in the way of plaintiff's suit. We affirm.
The facts are not in dispute. According to the decision: "From the evidence
presented it appears that the defendant Cebu Shipyard & Engineering Works, Inc. in
Lapulapu City is employing laborers and employees belonging to two rival labor
unions. Seventy-two of these employees or laborers whose names appear in the
complaint are affiliated with the Mactan Workers Union while the rest are members
of the intervenor Associated Labor Union. On November 28, 1964, the defendant
Cebu Shipyard & Engineering Works, Inc. and the Associated Labor Union entered
into a 'Collective Bargaining Agreement' ... the pertinent part of which, Article XIII
thereof, [reads thus]: '... The [Company] agrees to give a profit-sharing bonus to its
employees and laborers to be taken from ten per cent (10%) of its net profits or net
income derived from the direct operation of its shipyard and shop in Lapulapu City
and after deducting the income tax and the bonus annually given to its General
Manager and the Superintendent and the members of the Board of Directors and
Secretary of the Corporation, to be payable in two (2) installments, the first
installment being payable in March and the second installment in June, each year

out of the profits in agreement. In the computation of said ten per cent (10%) to
[be] distributed as a bonus among the employees and laborers of the [Company] in
proportion to their salaries or wages, only the income derived by the [Company]
from the direct operation of its shipyard and shop in Lapulapu City, as stated hereinabove-commencing from the earnings during the year 1964, shall be included. Said
profit-sharing bonus shall be paid by the [Company] to [Associated Labor Union] to
be delivered by the latter to the employees and laborers concerned and it shall be
the duty of the Associated Labor Union to furnish and deliver to the [Company] the
corresponding receipts duly signed by the laborers and employees entitled to
receive the profit-sharing bonus within a period of sixty (60) days from the date of
receipt by [it] from the [Company] of the profit-sharing bonus. If a laborer or
employee of the [Company] does not want to accept the profit-sharing bonus which
the said employee or laborer is entitled under this Agreement, it shall be the duty of
the [Associated Labor Union] to return the money received by [it] as profit-sharing
bonus to the [Company] within a period of sixty (60) days from the receipt by the
[Union] from the [Company] of the said profit-sharing bonus.'" 3 The decision went
on to state: "In compliance with the said collective bargaining agreement, in March,
1965 the defendant Cebu Shipyard & Engineering Works, Inc. delivered to the ALU
for distribution to the laborers or employees working with the defendant corporation
to the profit-sharing bonus corresponding to the first installment for the year 1965.
Again in June 1965 the defendant corporation delivered to the Associated Labor
Union the profit-sharing bonus corresponding to the second installment for 1965.
The members of the Mactan Workers Union failed to receive their shares in the
second installment of bonus because they did not like to go to the office of the ALU
to collect their shares. In accordance with the terms of the collective bargaining
after 60 days, the uncollected shares of the plaintiff union members was returned
by the ALU to the defendant corporation. At the same time the defendant
corporation was advised by the ALU not to deliver the said amount to the members
of the Mactan Workers Union unless ordered by the Court, otherwise the ALU will
take such step to protect the interest of its members ... . Because this warning
given by the intervenor union the defendant corporation did not pay to the plaintiffs
the sum of P4,035.82 which was returned by the Associated Labor Union, but
instead, deposited the said amount with the Labor Administrator. For the recovery of
this amount this case was filed with the lower court." 4
The dispositive portion of such decision follows: "[Wherefore], judgment is hereby
rendered ordering the defendants to deliver to the Associated Labor Union the sum
of P4,035.82 for distribution to the employees of the defendant corporation who are
members of the Mactan Workers Union; and ordering the intervenor Associated
Labor Union, immediately after receipt of the said amount, to pay the members of
the Mactan Workers Union their corresponding shares in the profit-sharing bonus for
the second installments for the year 1965." 5
It is from such a decision that an appeal was taken by intervenor Associated Labor
Union. As is quite apparent on the face of such judgment, the lower court did
nothing except to require literal compliance with the terms of a collective bargaining
contract. Nor, as will be hereafter discussed, has any weakness thereof been

demonstrated on the procedural questions raised by appellant. To repeat, we have

to affirm.
1. The terms and conditions of a collective bargaining contract constitute the law
between the parties. Those who are entitled to its benefits can invoke its provisions.
In the event that an obligation therein imposed is not fulfilled, the aggrieved party
has the right to go to court for redress. 6 Nor does it suffice as a defense that the
claim is made on behalf of non-members of intervenor Associated Labor Union, for it
is a well-settled doctrine that the benefits of a collective bargaining agreement
extend to the laborers and employees in the collective bargaining unit, including
those who do not belong to the chosen bargaining labor organization. 7 Any other
view would be a discrimination on which the law frowns. It is appropriate that such
should be the case. As was held in United Restauror's Employees and Labor Union
v. Torres, 8 this Court speaking through Justice Sanchez, "the right to be the
exclusive representative of all the employees in an appropriate collective bargaining
unit is vested in the labor union 'designated or selected' for such purpose 'by the
majority of the employees' in the unit concerned." 9 If it were otherwise, the highly
salutory purpose and objective of the collective bargaining scheme to enable labor
to secure better terms in employment condition as well as rates of pay would be
frustrated insofar as non-members are concerned, deprived as they are of
participation in whatever advantages could thereby be gained. The labor union that
gets the majority vote as the exclusive bargaining representative does not act for its
members alone. It represents all the employees in such a bargaining unit. It is not
to be indulged in any attempt on its part to disregard the rights of non-members.
Yet that is what intervenor labor union was guilty of, resulting in the complaint filed
on behalf of the laborers, who were in the ranks of plaintiff Mactan Labor Union.
The outcome was not at all unexpected. The right being clear all that had to be
done was to see to its enforcement. Nor did the lower court in the decision now on
appeal, require anything else other than that set forth in the collective bargaining
agreement. All that was done was to have the covenants therein contained as to the
profit-sharing scheme carried out and respected. It would be next to impossible for
intervenor Associated Labor Union to point to any feature thereof that could not in
any wise be objected to as repugnant to the provisions of the collective bargaining
contract. Certainly the lower court, as did the City Court of Lapu-lapu, restricted
itself to compelling the parties to abide by what was agreed upon. How then can the
appealed decision be impugned?
2. Intervenor Associated Labor Union, laboring under such a predicament had
perforce to rely on what it considered procedural lapses. It would assail the alleged
lack of a cause of action, of jurisdiction of the City Court of Lapulapu and of
personality of the Mactan Workers Union to represent its members. There is no
merit to such an approach. The highly sophisticated line of argument followed in its
brief as appellant does not carry a persuasive ring. What is apparent is that
intervenor was hard put to prop up what was inherently a weak, not to say an
indefensible, stand. The impression given is that of a litigant clutching at straws.

How can the allegation of a lack of a cause of action be taken seriously when
precisely there was a right violated on the part of the members of plaintiff Mactan
Workers Union, a grievance that called for redress? The assignment of error that the
City Court of Lapulapu was bereft of jurisdiction is singularly unpersuasive. The
amount claimed by plaintiff Mactan Workers Union on behalf of its members was
P4,035.82 and if the damages and attorney's fees be added, the total sum was less
than P10,000.00. Section 88 of the Judiciary Act in providing for the original
jurisdiction of city courts in civil cases provides: "In all civil actions, including those
mentioned in Rules fifty-nine and sixty-two (now Rules 57 and 60) of the Rules of
Court, arising in his municipality or city, and not exclusively cognizable by the Court
of First Instance, the municipal judge and the judge of a city court shall have
exclusive original jurisdiction where the value of the subject matter or amount of
the demand does not exceed ten thousand pesos, exclusive of interests and
costs." 10 It is true that if an element of unfair labor practice may be discerned in a
suit for the enforcement of a collective bargaining contract, then the matter is solely
cognizable by the Court of Industrial Relations. 11 It is equally true that as of the
date the lower court decision was rendered, the question of such enforcement had
been held to be for the regular courts to pass upon. 12 Counsel for intervenor
Associated Labor Union was precisely the petitioner in one of the decisions of this
Court, Seno v . Mendoza, 13 where such a doctrine was reiterated. In the language
of Justice Makalintal, the ponente: "As the issue involved in the instant case,
although arising from a labor dispute, does not refer to one affecting an industry
which is indispensable to the national interest and certified by the President to the
Industrial Court, nor to minimum wage under the Minimum Wage Law, nor to hours
of employment under the Eight-Hour Labor Law, nor to an unfair labor practice, but
seeks the enforcement of a provision of the collective bargaining agreement, ...,
jurisdiction pertains to the ordinary courts and not to the Industrial Court." 14 There
was only a half-hearted attempt, if it could be called that, to lend credence to the
third error assigned, namely that plaintiff Mactan Workers Union could not file the
suit on behalf of its members. That is evident by intervenor Associated Labor Union
devoting only half a page in its brief to such an assertion. It is easy to see why it
should be thus. On its face, it certainly appeared to be oblivious of how far a labor
union can go, or is expected to, in the defense of the rights of its rank and file.
There was an element of surprise, considering that such a contention came from a
labor organization, which under normal condition should be the last to lay itself
open to a charge that it is not averse to denigrating the effectiveness of labor
unions.

3. This brings us to one last point. It is quite understandable that labor unions in
their campaign for membership, for acquiring ascendancy in any shop, plant, or
industry would do what lies in their power to put down competing groups. The
struggle is likely to be marked with bitterness, no quarter being given or expected
on the part of either side. Nevertheless, it is not to be forgotten that what is entitled
to constitutional protection is labor, or more specifically the working men and
women, not labor organizations. The latter are merely the instrumentalities through
which their welfare may be promoted and fostered. That is the raison d'etre of labor
unions. The utmost care should be taken then, lest in displaying an unyielding,
intransigent attitude on behalf of their members, injustice be committed against
opposing labor organizations. In the final analysis, they alone are not the sole
victims, but the labor movement itself, which may well be the recipient of a crippling
blow. Moreover, while it is equally understandable that their counsel would take
advantage of every legal doctrine deemed applicable or conjure up any defense that
could serve their cause, still, as officers of the court, there should be an awareness
that resort to such a technique does result in clogged dockets, without the least
justification especially so if there be insistence on flimsy and insubstantial
contentions just to give some semblance of plausibility to their pleadings. Certainly,
technical virtuosity, or what passes for it, is no substitute for an earnest and sincere
desire to assure that there be justice according to law. That is a creed to which all
members of the legal profession, labor lawyers not excluded, should do their best to
live by.
WHEREFORE, the decision of the lower court of February 22, 1968 is affirmed. Costs
against Associated Labor Union.