G.R. No.

96566 January 6, 1992

ATLAS LITHOGRAPHIC SERVICES, INC., petitioner,
vs.
UNDERSECRETARY BIENVENIDO E. LAGUESMA (Department of Labor and Employment) and ATLAS
LITHOGRAPHIC SERVICES, INC. SUPERVISORY, ADMINISTRATIVE, PERSONNEL, PRODUCTION,
ACCOUNTING AND CONFIDENTIAL EMPLOYEES ASSOCIATION-KAISAHAN NG MANGGAWANG
PILIPINO (KAMPIL-KATIPUNAN), respondents.
Romero, Lagman, Valdecantos & Arreza Law Offices for petitioner.
Esteban M. Mendoza for private respondent.
Eligibility for membership:
GUTIERREZ, JR., J.:p
This is a petition for certiorari under Rule 65 of the Rules of Court seeking the modification of the Order dated 14
December 1990 and the Resolution dated 21 November 1990 issued by the public respondents.
The antecedent facts of the case as gathered from the records are as follows:
On July 16, 1990, the supervisory, administrative personnel, production, accounting and confidential
employees of the petitioner Atlas Lithographic Services, Inc. (ALSI) affiliated with private respondent
Kaisahan ng Manggagawang Pilipino, a national labor organization. Shortly thereafter, private respondent
Kampil-Katipunan filed on behalf of the "supervisors" union a petition for certification election so that it
could be the sole and exclusive bargaining agent of the supervisory employees.
The petitioners opposed the private respondent's petition claiming that under Article 245 of the Labor bode the
private respondent cannot represent the supervisory employees for collective bargaining purposeless
because the private respondent also represents the rank-and-file employees' union.
On September 18, 1990, the Med-Arbiter issued an order in favor of the private respondent, the dispositive
portion of which provides: APPROVED CERTIFICATION ELECTION
1. KAMPIL (KATIPUNAN);
2. No union.
SO ORDERED. (Rollo, pp. 39-40)
The petitioners, as expected, appealed for the reversal of the above order. The public respondent, however,
issued a resolution affirming the Med-Arbiter's order.
The petitioners, in turn, filed a motion for reconsideration but the same was denied. Hence, this petition for
certiorari.
Issue:
The sole issue to be resolved in this case is whether or not, under Article 245 of the Labor Code, a local union of
supervisory employees may be allowed to affiliate with a national federation of labor organizations of rankand-file employees and which national federation actively represents its affiliates in collective bargaining
negotiations with the same employer of the supervisors and in the implementation of resulting collective
bargaining agreements.
HELD: NO
The petitioner argues that KAMPIL-KATIPUNAN already represents its rank-and-file employees and, therefore,
to allow the supervisors of those employees to affiliate with the private respondent is tantamount to allowing the
circumvention of the principle of the separation of unions under Article 245 of the Labor Code.
It further argues that the intent of the law is to prevent a single labor organization from representing different
classes of employees with conflicting interests.
The public respondent, on the other hand, contends that despite affiliation with a national federation, the local
union does not lose its personality which is separate, and distinct from the national federation. It cites as its legal
basis the case of Adamson & Adamson, Inc. v. CIR (127 SCRA 268 [1984]).

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In the light of the factual background of this case, We are constrained to hold that the supervisory employees of
petitioner firm may not, under the law, form a supervisors union, separate and distinct from the existing
bargaining unit (BEU), composed of the rank-and-file employees of the Bulletin Publishing Corporation. It is
evident that most of the private respondents are considered managerial employees. Also, it is distinctly stated in
Section 11, Rule II, of the Omnibus Rules Implementing the Labor Code, that supervisory unions are presently
no longer recognized nor allowed to exist and operate as such. (pp. 633, 634)
In Section 11, Rule II, Book V of the Omnibus Rules implementing Pres. Decree No. 442, the supervisory unions
existing since the effectivity of the New Code in January 1, 1975 ceased to operate as such and the members
who did not qualify as managerial employees under this definition in Article 212 (k) therein became eligible to
form, to join or assist a rank-and-file union.
A revision of the Labor Code undertaken by the bicameral Congress brought about the enactment of Rep. Act
No. 6715 in March 1989 in which employees were reclassified into three groups, namely: (1) the managerial
employees; (2) supervisors; and (3) the rank and file employees. Under the present law, the category of
supervisory employees is once again recognized. Hence, Art. 212 (m) states:
(m) . . . 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. . . .
We agree with the petitioner's contention that a conflict of interest may arise in the areas of discipline, collective
bargaining and strikes.
Members of the supervisory union might refuse to carry out disciplinary measures against their co-member rankand-file employees.
In the area of bargaining, their interests cannot be considered identical. The needs of one are different from
those of the other. Moreover, in the event of a strike, the national federation might influence the supervisors'
union to conduct a sympathy strike on the sole basis of affiliation.
More important, the factual issues in the Adamson case are different from the present case. First, the rank-andfile employees in the Adamson case are not directly under the supervisors who comprise the supervisors' union.
In the case at bar, the rank-and file employees are directly under the supervisors organized by one and the
same federation.
The Court construes Article 245 to mean that, as in Section 3 of the Industrial Peace Act, supervisors shall not
be given an occasion to bargain together with the rank-and-file against the interests of the employer regarding
terms and conditions of work
Second, the national union in the Adamson case did not actively represent its local chapters. In the present
case, the local union is actively represented by the national federation. In fact, it was the national federation, the
KAMPIL-KATIPUNAN, which initially filed a petition for certification in behalf of the respondent union.
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.
The petitioner further contends that the term labor organization includes a federation considering that Art. 212 (g)
mentions "any union or association of employees."
The intent of the law is clear especially where, as in the case at bar, the supervisors will be co-mingling with
those employees whom they directly supervise in their own bargaining unit.
Technicalities should not be allowed to stand in the way of equitably and completely resolving the rights and
obligations of the parties. (Rapid Manpower Consultants, Inc. v. NLRC, 190 SCRA 747 [1990]) What should be
paramount is the intent behind the law, not its literal construction. Where one interpretation would result in
mischievous consequences while another would bring about equity, justice, and the promotion of labor peace,
there can be no doubt as to what interpretation shall prevail.
Finally, the respondent contends that the law prohibits the employer from interfering with the employees' right to
self-organization.
There is no question about this intendment of the law. There is, however, in the present case, no violation of
such a guarantee to the employee.
Supervisors are not prohibited from forming their own union. What the law prohibits is their membership in a
labor organization of rank-and-file employees (Art. 245, Labor Code) or their joining a national federation of rankand-file employees that includes the very local union which they are not allowed to directly join.

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In a motion dated November 15, 1991 it appears that the petitioner has knuckled under to the respondents'
pressures and agreed to let the national federation KAMPIL-KATIPUNAN represent its supervisors in negotiating
a collective bargaining agreement. Against the advise of its own counsel and on the basis of alleged "industrial
peace", the petitioner expressed a loss of interest in pursuing this action. The petitioner is, of course, free to
grant whatever concessions it wishes to give to its employees unilaterally or through negotiations but we cannot
allow the resulting validation of an erroneous ruling and policy of the Department of Labor and Employment
(DOLE) to remain on the basis of the petitioner's loss of interest. The December 14, 1990 order and the
November 21, 1990 resolution of DOLE are contrary to law and must be declared as such.
WHEREFORE, the petition is hereby GRANTED. The private respondent is disqualified from affiliating
with a national federation of labor organizations which includes the petitioner's rank-and-file employees.
SO ORDERED.
Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.
=
G.R. No. 162355
August 14, 2009
STA. LUCIA EAST COMMERCIAL CORPORATION, Petitioner,
vs.
HON. SECRETARY OF LABOR AND EMPLOYMENT and STA. LUCIA EAST COMMERCIAL CORPORATION
WORKERS ASSOCIATION (CLUP LOCAL CHAPTER), Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review.
The Facts
The Secretary narrated the facts as follows:
On 27 February 2001, Confederated Labor Union of the Philippines (CLUP), in behalf of its chartered local,
instituted a petition for certification election among the regular rank-and-file employees of Sta. Lucia East
Commercial Corporation and its Affiliates, docketed as Case No. RO400-0202-RU-007. The affiliate companies
included in the petition were SLE Commercial, SLE Department Store, SLE Cinema, Robsan East Trading,
Bowling Center, Planet Toys, Home Gallery and Essentials.
On 21 August 2001, Med-Arbiter Bactin ordered the dismissal of the petition due to inappropriateness of the
bargaining unit.
In the meantime, on 10 October 2001, [CLUP-SLECC and its Affiliates Workers Union] reorganized itself and reregistered as CLUP-Sta. Lucia East Commercial Corporation Workers Association (herein appellant CLUPSLECCWA), limiting its membership to the rank-and-file employees of Sta. Lucia East Commercial Corporation.
It was issued Certificate of Creation of a Local Chapter No. RO400-0110-CC-004.
On the same date, [CLUP-SLECCWA] filed the instant petition. It alleged that [SLECC] employs about 115
employees and that more than 20% of employees belonging to the rank-and-file category are its members.
[CLUP-SLECCWA] claimed that no certification election has been held among them within the last 12 months
prior to the filing of the petition, and while there is another union registered with DOLE-Regional Office No. IV on
22 June 2001 covering the same employees, namely [SMSLEC], it has not been recognized as the exclusive
bargaining agent of [SLECCs] employees.
On 22 November 2001, SLECC filed a motion to dismiss the petition. It averred that it has voluntarily recognized
[SMSLEC] on 20 July 2001 as the exclusive bargaining agent of its regular rank-and-file employees, and that
collective bargaining negotiations already commenced between them. SLECC argued that the petition should be
dismissed for violating the one year and negotiation bar rules under pars. (c) and (d), Section 11, Rule XI, Book
V of the Omnibus Rules Implementing the Labor Code.
On 29 November 2001, a CBA between [SMSLEC] and [SLECC] was ratified by its rank-and-file employees and
registered with DOLE-Regional Office No. IV on 9 January 2002.
In the meantime, on 19 December 2001, [CLUP-SLECCWA] filed its Opposition and Comment to [SLECCS]
Motion to Dismiss. It assailed the validity of the voluntary recognition of [SMSLEC] by [SLECC] and their

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consequent negotiations and execution of a CBA. According to [CLUP-SLECCWA], the same were tainted with
malice, collusion and conspiracy involving some officials of the Regional Office. Appellant contended that Chief
LEO Raymundo Agravante, DOLE Regional Office No. IV, Labor Relations Division should have not approved
and recorded the voluntary recognition of [SMSLEC] by [SLECC] because it violated one of the major
requirements for voluntary recognition, i.e., non-existence of another labor organization in the same bargaining
unit. It pointed out that the time of the voluntary recognition on 20 July 2001, appellants registration as [CLUPSLECC and its Affiliates Workers Union], which covers the same group of employees covered by Samahang
Manggagawa sa Sta. Lucia East Commercial, was existing and has neither been cancelled or abandoned.
[CLUP-SLECCWA] also accused Med-Arbiter Bactin of malice, collusion and conspiracy with appellee company
when he dismissed the petition for certification election filed by [SMSLEC] for being moot and academic because
of its voluntary recognition, when he was fully aware of the pendency of [CLUP-SLECCWAs] earlier petition for
certification election.
Subsequent pleadings filed by [CLUP-SLECCWA] and [SLECC] reiterated their respective positions on the
validity and invalidity of the voluntary recognition. On 29 July 2002, Med-Arbiter Bactin issued the assailed
Order.4
The Med-Arbiters Ruling
In his Order dated 29 July 2002, Med-Arbiter Anastacio L. Bactin dismissed CLUP-SLECCWAs petition for direct
certification on the ground of contract bar rule.
The Ruling of the Secretary of Labor and Employment
In her Decision promulgated on 27 December 2002, the Secretary found merit in CLUP-SLECCWAs appeal.
The Secretary held that the subsequent negotiations and registration of a CBA executed by SLECC with
SMSLEC could not bar CLUP-SLECCWAs petition. CLUP-SLECC and its Affiliates Workers Union constituted a
registered labor organization at the time of SLECCs voluntary recognition of SMSLEC. The dispositive portion of
the
The Ruling of the Appellate Court
The appellate court affirmed the ruling of the Secretary and quoted extensively from the Secretarys decision.
The appellate court agreed with the Secretarys finding that the workers sought to be represented by CLUPSLECC and its Affiliates Workers Union included the same workers in the bargaining unit represented by
SMSLEC. SMSLEC was not the only legitimate labor organization operating in the subject bargaining unit at the
time of SMSLECs voluntary recognition on 20 July 2001. Thus, SMSLECs voluntary recognition was void and
could not bar CLUP-SLECCWAs petition for certification election.
The Issue
SLECC raised only one issue in its petition. SLECC asserted that the appellate court commited a reversible error
when it affirmed the Secretarys finding that SLECCs voluntary recognition of SMSLEC was done while a
legitimate labor organization was in existence in the bargaining unit.
The Ruling of the Court
The petition has no merit. We see no reason to overturn the rulings of the Secretary and of the appellate court.
Legitimate Labor Organization
Article 212(g) of the Labor Code defines a labor organization as "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." Upon compliance with all the documentary requirements, the Regional Office or
Bureau shall issue in favor of the applicant labor organization a certificate indicating that it is included in the
roster of legitimate labor organizations.6 Any applicant labor organization 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.7
Bargaining Unit
The concepts of a union and of a legitimate labor organization are different from, but related to, the concept of a
bargaining unit. We explained the concept of a bargaining unit in San Miguel Corporation v. Laguesma,8 where
we stated that:

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A bargaining unit is a "group of employees of a given employer, comprised of all or less than all of the entire
body of employees, consistent with equity to the employer, indicated to be the best suited to serve the reciprocal
rights and duties of the parties under the collective bargaining provisions of the law."
The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of the
employees (Globe Doctrine); (2) affinity and unity of the employees interest, such as substantial similarity of
work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3)
prior collective bargaining history; and (4) similarity of employment status.
Contrary to petitioners assertion, this Court has categorically ruled that the existence of a prior collective
bargaining history is neither decisive nor conclusive in the determination of what constitutes an appropriate
bargaining unit.
However, employees in two corporations cannot be treated as a single bargaining unit even if the businesses of
the two corporations are related.9
A Legitimate Labor Organization Representing An Inappropriate Bargaining Unit CLUP-SLECC and its Affiliates
Workers Unions initial problem was that they constituted a legitimate labor organization representing a nonappropriate bargaining unit. However, CLUP-SLECC and its Affiliates Workers Union subsequently re-registered
as CLUP-SLECCWA, limiting its members to the rank-and-file of SLECC. SLECC cannot ignore that CLUPSLECC and its Affiliates Workers Union was a legitimate labor organization at the time of SLECCs voluntary
recognition of SMSLEC. SLECC and SMSLEC cannot, by themselves, decide whether CLUP-SLECC and its
Affiliates Workers Union represented an appropriate bargaining unit.1avvphi1
The inclusion in the union of disqualified employees is not among the grounds for cancellation of
registration, unless such inclusion is due to misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) to (c) of Article 239 of the Labor Code.10 Thus, CLUP-SLECC
and its Affiliates Workers Union, having been validly issued a certificate of registration, should be considered
as having acquired juridical personality which may not be attacked collaterally. The proper procedure for
SLECC is to file a petition for cancellation of certificate of registration11 of CLUP-SLECC and its Affiliates
Workers Union and not to immediately commence voluntary recognition proceedings with SMSLEC.
SLECCs Voluntary Recognition of SMSLEC
The employer may voluntarily recognize the representation status of a union in unorganized establishments.12
SLECC was not an unorganized establishment when it voluntarily recognized SMSLEC as its exclusive
bargaining representative on 20 July 2001. CLUP-SLECC and its Affiliates Workers Union filed a petition for
certification election on 27 February 2001 and this petition remained pending as of 20 July 2001. Thus, SLECCs
voluntary recognition of SMSLEC on 20 July 2001, the subsequent negotiations and resulting registration of a
CBA executed by SLECC and SMSLEC are void and cannot bar CLUP-SLECCWAs present petition for
certification election.
Employers Participation in a Petition for Certification Election
We find it strange that the employer itself, SLECC, filed a motion to oppose CLUP-SLECCWAs petition for
certification election. In petitions for certification election, the employer is a mere bystander and cannot oppose
the petition or appeal the Med-Arbiters decision. The exception to this rule, which happens when the employer
is requested to bargain collectively, is not present in the case before us.13
WHEREFORE, we DENY the petition. We AFFIRM the Decision promulgated on 14 August 2003 as well as the
Resolution promulgated on 24 February 2004 of the Court of Appeals in CA-G.R. SP No. 77015.
SO ORDERED.

G.R. No. 176249

November 27, 2009
FVC LABOR UNION-PHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (FVCLUPTGWO), Petitioner,
vs.
SAMA-SAMANG NAGKAKAISANG MANGGAGAWA SA FVC-SOLIDARITY OF INDEPENDENT AND
GENERAL LABOR ORGANIZATIONS (SANAMA-FVC-SIGLO), Respondent.
DECISION
BRION, J.:
We pass upon the petition for review on certiorari under Rule 45 of the Rules of Court1 filed by FVC Labor
UnionPhilippine Transport and General Workers Organization (FVCLU-PTGWO) to challenge the Court of

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Appeals (CA) decision of July 25, 20062 and its resolution rendered on January 15, 20073 in C.A. G.R. SP No.
83292.4
THE ANTECEDENTS
The facts are undisputed and are summarized below.
On December 22, 1997, the petitioner FVCLU-PTGWO the recognized bargaining agent of the rank-and-file
employees of the FVC Philippines, Incorporated (company) signed a five-year collective bargaining agreement
(CBA) with the company. The five-year CBA period was from February 1, 1998 to January 30, 2003.5 At the end
of the 3rd year of the five-year term and pursuant to the CBA, FVCLU-PTGWO and the company entered into
the renegotiation of the CBA and modified, among other provisions, the CBAs duration. Article XXV, Section 2 of
the renegotiated CBA provides that "this re-negotiation agreement shall take effect beginning February 1, 2001
and until May 31, 2003" thus extending the original five-year period of the CBA by four (4) months.
On January 21, 2003, nine (9) days before the January 30, 2003 expiration of the originally-agreed five-year
CBA term (and four [4] months and nine [9] days away from the expiration of the amended CBA period), the
respondent Sama-Samang Nagkakaisang Manggagawa sa FVC-Solidarity of Independent and General Labor
Organizations (SANAMA-SIGLO) filed before the Department of Labor and Employment (DOLE) a petition for
certification election for the same rank-and-file unit covered by the FVCLU-PTGWO CBA. FVCLU-PTGWO
moved to dismiss the petition on the ground that the certification election petition was filed outside the freedom
period or outside of the sixty (60) days before the expiration of the CBA on May 31, 2003.
Action on the Petition and Related Incidents
On June 17, 2003, Med-Arbiter Arturo V. Cosuco dismissed the petition on the ground that it was filed outside
the 60-day period counted from the May 31, 2003 expiry date of the amended CBA.6 SANAMA-SIGLO appealed
the Med-Arbiters Order to the DOLE Secretary, contending that the filing of the petition on January 21, 2003
was within 60-days from the January 30, 2003 expiration of the original CBA term.
DOLE Secretary Patricia A. Sto. Tomas sustained SANAMA-SIGLOs position, thereby setting aside the decision
of the Med-Arbiter.7 She ordered the conduct of a certification election in the company. FVCLU-PTGWO moved
for the reconsideration of the Secretarys decision.
On November 6, 2003, DOLE Acting Secretary Manuel G. Imson granted the motion; he set aside the August 6,
2003 DOLE decision and dismissed the petition as the Med-Arbiters Order of June 17, 2003 did.8 The Acting
Secretary held that the amended CBA (which extended the representation aspect of the original CBA by four [4]
months) had been ratified by members of the bargaining unit some of whom later organized themselves as
SANAMA-SIGLO, the certification election applicant. Since these SANAMA-SIGLO members fully accepted and
in fact received the benefits arising from the amendments, the Acting Secretary rationalized that they also
accepted the extended term of the CBA and cannot now file a petition for certification election based on the
original CBA expiration date.
SANAMA-SIGLO moved for the reconsideration of the Acting Secretarys Order, but Secretary Sto. Tomas
denied the motion in her Order of January 30, 2004.9
SANAMA-SIGLO sought relief from the CA through a petition for certiorari under Rule 65 of the Rules of Court
based on the grave abuse of discretion the Labor Secretary committed when she reversed her earlier decision
calling for a certification election. SANAMA-SIGLO pointed out that the Secretarys new ruling is patently
contrary to the express provision of the law and established jurisprudence.
THE CA DECISION
The CA found SANAMA-SIGLOs petition meritorious on the basis of the applicable law10 and the rules,11 as
interpreted in the congressional debates. It set aside the challenged DOLE Secretary decisions and reinstated
her earlier ruling calling for a certification election. The appellate court declared:
It is clear from the foregoing that while the parties may renegotiate the other provisions (economic and noneconomic) of the CBA, this should not affect the five-year representation aspect of the original CBA. If the
duration of the renegotiated agreement does not coincide with but rather exceeds the original five-year term, the
same will not adversely affect the right of another union to challenge the majority status of the incumbent
bargaining agent within sixty (60) days before the lapse of the original five (5) year term of the CBA. In the event
a new union wins in the certification election, such union is required to honor and administer the renegotiated
CBA throughout the excess period.
FVCLU-PTGWO moved to reconsider the CA decision but the CA denied the motion in its resolution of January
15, 2007.12 With this denial, FVCLU-PTGWO now comes before us to challenge the CA rulings.13 It argues that
in light of the peculiar attendant circumstances of the case, the CA erred in strictly applying Section 11 (11b),
Rule XI, Book V of the Omnibus Rules Implementing the Labor Code, as amended by Department Order No. 9,
s. 1997.14
Apparently, the "peculiar circumstances" the FVCLU-PTGWO referred to relate to the economic and other
provisions of the February 1, 1998 to January 30, 2003 CBA that it renegotiated with the company. The
renegotiated CBA changed the CBAs remaining term from February 1, 2001 to May 31, 2003. To FVCLUPTGWO, this extension of the CBA term also changed the unions exclusive bargaining representation status
and effectively moved the reckoning point of the 60-day freedom period from January 30, 2003 to May 30, 2003.

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FVCLU-PTGWO thus moved to dismiss the petition for certification election filed on January 21, 2003 (9 days
before the expiry date on January 30, 2003 of the original CBA) by SANAMA-SIGLO on the ground that the
petition was filed outside the authorized 60-day freedom period.
It also submits in its petition that the SANAMA-SIGLO is estopped from questioning the extension of the CBA
term under the amendments because its members are the very same ones who approved the amendments,
including the expiration date of the CBA, and who benefited from these amendments.
Lastly, FVCLU-PTGWO posits that the representation petition had been rendered moot by a new CBA it entered
into with the company covering the period June 1, 2003 to May 31, 2008.151avvphi1
Required to comment by the Court16 and to show cause for its failure to comply,17 SANAMA-SIGLO manifested
on October 10, 2007 that: since the promulgation of the CA decision on July 25, 2006 or three years after the
petition for certification election was filed, the local leaders of SANAMA-SIGLO had stopped reporting to the
federation office or attending meetings of the council of local leaders; the SANAMA-SIGLO counsel, who is also
the SIGLO national president, is no longer in the position to pursue the present case because the local union
and its leadership, who are principals of SIGLO, had given up and abandoned their desire to contest the
representative status of FVCLU-PTGWO; and a new CBA had already been signed by FVCLU-PTGWO and the
company.18 Under these circumstances, SANAMA-SIGLO contends that pursuing the case has become futile,
and accordingly simply adopted the CA decision of July 25, 2006 as its position; its counsel likewise asked to be
relieved from filing a comment in the case. We granted the request for relief and dispensed with the filing of a
comment.19
THE COURTS RULING
While SANAMA-SIGLO has manifested its abandonment of its challenge to the exclusive bargaining
representation status of FVCLU-PTGWO, we deem it necessary in the exercise of our discretion to resolve the
question of law raised since this exclusive representation status issue will inevitably recur in the future as
workplace parties avail of opportunities to prolong workplace harmony by extending the term of CBAs already in
place.20
The legal question before us centers on the effect of the amended or extended term of the CBA on the exclusive
representation status of the collective bargaining agent and the right of another union to ask for certification as
exclusive bargaining agent. The question arises because the law allows a challenge to the exclusive
representation status of a collective bargaining agent through the filing of a certification election petition only
within 60 days from the expiration of the five-year CBA.
Article 253-A of the Labor Code covers this situation and it provides:
Terms of a collective bargaining agreement. Any Collective Bargaining Agreement that the parties may enter
into, shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition
questioning the majority status of the incumbent bargaining agent shall be entertained and no certification
election shall be conducted by the Department of Labor and Employment outside of the sixty day period
immediately before the date of expiry of such five-year term of the Collective Bargaining Agreement. All other
provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after its
execution.
Any agreement on such other provisions of the Collective Bargaining Agreement entered into within six (6)
months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining
Agreement, shall retroact to the day immediately following such date. If any such agreement is entered into
beyond six months, the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the
renegotiation of the collective bargaining agreement, the parties may exercise their rights under this Code.
This Labor Code provision is implemented through Book V, Rule VIII of the Rules Implementing the Labor
Code21 which states:
Sec. 14. Denial of the petition; grounds. The Med-Arbiter may dismiss the petition on any of the following
grounds:
xxxx
(b) the petition was filed before or after the freedom period of a duly registered collective bargaining agreement;
provided that the sixty-day period based on the original collective bargaining agreement shall not be affected by
any amendment, extension or renewal of the collective bargaining agreement (underscoring supplied).
xxxx
The root of the controversy can be traced to a misunderstanding of the interaction between a unions exclusive
bargaining representation status in a CBA and the term or effective period of the CBA.
FVCLU-PTGWO has taken the view that its exclusive representation status should fully be in step with the term
of the CBA and that this status can be challenged only within 60 days before the expiration of this term. Thus,
when the term of the CBA was extended, its exclusive bargaining status was similarly extended so that the
freedom period for the filing of a petition for certification election should be counted back from the expiration of
the amended CBA term.

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We hold this FVCLU-PTGWO position to be correct, but only with respect to the original five-year term of the
CBA which, by law, is also the effective period of the unions exclusive bargaining representation status. While
the parties may agree to extend the CBAs original five-year term together with all other CBA provisions, any
such amendment or term in excess of five years will not carry with it a change in the unions exclusive collective
bargaining status. By express provision of the above-quoted Article 253-A, the exclusive bargaining status
cannot go beyond five years and the representation status is a legal matter not for the workplace parties to
agree upon. In other words, despite an agreement for a CBA with a life of more than five years, either as an
original provision or by amendment, the bargaining unions exclusive bargaining status is effective only for five
years and can be challenged within sixty (60) days prior to the expiration of the CBAs first five years. As we said
in San Miguel Corp. Employees UnionPTGWO, et al. v. Confesor, San Miguel Corp., Magnolia Corp. and San
Miguel Foods, Inc.,22 where we cited the Memorandum of the Secretary of Labor and Employment dated
February 24, 1994:
In the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a term of
three (3) years or one which does not coincide with the said five-year term and said agreement is ratified by
majority of the members in the bargaining unit, the subject contract is valid and legal and therefore, binds the
contracting parties. The same will however not adversely affect the right of another union to challenge the
majority status of the incumbent bargaining agent within sixty (60) days before the lapse of the original five (5)
year term of the CBA.
In the present case, the CBA was originally signed for a period of five years, i.e., from February 1, 1998 to
January 30, 2003, with a provision for the renegotiation of the CBAs other provisions at the end of the 3rd year
of the five-year CBA term. Thus, prior to January 30, 2001 the workplace parties sat down for renegotiation but
instead of confining themselves to the economic and non-economic CBA provisions, also extended the life of the
CBA for another four months, i.e., from the original expiry date on January 30, 2003 to May 30, 2003.
As discussed above, this negotiated extension of the CBA term has no legal effect on the FVCLU-PTGWOs
exclusive bargaining representation status which remained effective only for five years ending on the original
expiry date of January 30, 2003. Thus, sixty days prior to this date, or starting December 2, 2002, SANAMASIGLO could properly file a petition for certification election. Its petition, filed on January 21, 2003 or nine (9)
days before the expiration of the CBA and of FVCLU-PTGWOs exclusive bargaining status, was seasonably
filed.
We thus find no error in the appellate courts ruling reinstating the DOLE order for the conduct of a certification
election. If this ruling cannot now be given effect, the only reason is SANAMA-SIGLOs own desistance; we
cannot disregard its manifestation that the members of SANAMA themselves are no longer interested in
contesting the exclusive collective bargaining agent status of FVCLU-PTGWO. This recognition is fully in accord
with the Labor Codes intent to foster industrial peace and harmony in the workplace.
WHEREFORE, premises considered, we AFFIRM the correctness of the challenged Decision and Resolution of
the Court of Appeals and accordingly DISMISS the petition, but nevertheless DECLARE that no certification
election, pursuant to the underlying petition for certification election filed with the Department of Labor and
Employment, can be enforced as this petition has effectively been abandoned.
SO ORDERED.
Case Digest: Lepanto Ceramics v. Lepanto Ceramics Employees
G.R. No. 180866 : March 2, 2010
LEPANTO CERAMICS, INC., Petitioner, v. LEPANTO CERAMICS EMPLOYEES ASSOCIATION,
Respondent.
PEREZ,J.:
FACTS:
Respondent Lepanto Ceramics Employees Association (respondent Association) is a legitimate labor
organization duly registered with the Department of Labor and Employment. It is the sole and exclusive
bargaining agent in the establishment of petitioner. In December 1998, petitioner gave a P3,000.00 bonus to its
employees, members of the respondent Association. Subsequently,in September 1999, petitioner and

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respondent Association entered into a Collective Bargaining Agreement (CBA) which provides for, among others,
the grant of a Christmas gift package/bonus to the members of the respondent Association.
The Christmas bonus was one of the enumerated existing benefit, practice of traditional rights which shall remain
in full force and effect. In the succeeding years, 1999, 2000 and 2001, the bonus was not in cash.Instead,
petitioner gave each of the members of respondent Association Tile Redemption Certificates equivalent to
P3,000.00.The bonus for the year 2002 is the root of the present dispute.Petitioner gave a year-end cash benefit
of Six Hundred Pesos (P600.00) and offered a cash advance to interested employees equivalent to one (1)
month salary payable in one year.The respondent Association objected to the P600.00 cash benefit and argued
that this was in violation of the CBA it executed with the petitioner. The parties failed to amicably settle the
dispute.The respondent Association filed a Notice of Strike with the National Conciliation Mediation Board.The
efforts to conciliate failed.
The case was then referred to the Voluntary Arbitrator for resolution where the Complaint was docketed as Case
No. LAG-PM-12-095-02.The Voluntary Arbitrator rendered a Decision declaring that petitioner is bound to grant
each of its workers a Christmas bonus of P3,000.00 for the reason that the bonus was given prior to the
effectivity of the CBA between the parties and that the financial losses of the company is not a sufficient reason
to exempt it from granting the same.It stressed that the CBA is a binding contract and constitutes the law
between the parties.The Voluntary Arbitrator further expounded that since the employees had already been
given P600.00 cash bonus, the same should be deducted from the claimed amount of P3,000.00, thus leaving a
balance of P2,400.00. Petitioner elevated the case to the Court of Appeals which affirmed toto the decision of the
Voluntary Arbitrator.
ISSUE: Whether or not the petitioner is obliged to give the members of the respondent Association a Christmas
bonus.
HELD: Court of Appeals decision is affirmed.
LABOR LAW
By definition, a bonus is a gratuity or act of liberality of the giver. It is something given in addition to what is
ordinarily received by or strictly due the recipient. A bonus is granted and paid to an employee for his industry
and loyalty which contributed to the success of the employer's business and made possible the realization of
profits.A bonus is also granted by an enlightened employer to spur the employee to greater efforts for the
success of the business and realization of bigger profits.Generally, a bonus is not a demandable and
enforceable obligation. For a bonus to be enforceable, it must have been promised by the employer and
expressly agreed upon by the parties. Given that the bonus in this case is integrated in the CBA, the same
partakes the nature of a demandable obligation.Verily, by virtue of its incorporation in the CBA, the Christmas
bonus due to respondent Association has become more than just an act of generosity on the part of the
petitioner but a contractual obligation it has undertaken.
A CBA refers to a negotiated contract between a legitimate labor organization and the employer, concerning
wages, hours of work and all other terms and conditions of employment in a bargaining unit.As in all other
contracts, the parties to a CBA may establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided these are not contrary to law, morals, good customs, public order or public policy. It is a
familiar and fundamental doctrine in labor law that the CBA is the law between the parties and they are obliged
to comply with its provisions.This principle stands strong and true in the case at bar. A reading of the provision of
the CBA reveals that the same provides for the giving of a Christmas gift package/bonus without qualification.
Terse and clear, the said provision did not state that the Christmas package shall be made to depend on the
petitioner's financial standing. The records are also bereft of any showing that the petitioner made it clear during
CBA negotiations that the bonus was dependent on any condition. Indeed, if the petitioner and respondent
Association intended that the P3,000.00 bonus would be dependent on the company's earnings, such intention
should have been expressed in the CBA.
All given, business losses are a feeble ground for petitioner to repudiate its obligation under the CBA. The rule is
settled that any benefit and supplement being enjoyed by the employees cannot be reduced, diminished,
discontinued or eliminated by the employer. The principle of non-diminution of benefits is founded on the
constitutional mandate to protect the rights of workers and to promote their welfare and to afford labor full
protection. Hence, absent any proof that petitioners consent was vitiated by fraud, mistake or duress, it is
presumed that it entered into the CBA voluntarily and had full knowledge of the contents thereof and was aware
of its commitments under the contract.

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