#11.

FIRST DIVISION

[G.R. No. 128845. June 1, 2000]

INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), petitioner,

vs.

HON. LEONARDO A. QUISUMBING in his capacity as the Secretary of Labor and

Employment; HON. CRESENCIANO B. TRAJANO in his capacity as the Acting Secretary
of Labor and Employment; DR. BRIAN MACCAULEY in his capacity as the
Superintendent of International School-Manila; and INTERNATIONAL SCHOOL,
INC., respondents.

DECISION

KAPUNAN, J.:

Receiving salaries less than their counterparts hired abroad, the local-hires of private
respondent School, mostly Filipinos, cry discrimination. We agree. That the local-hires are paid
more than their colleagues in other schools is, of course, beside the point. The point is that
employees should be given equal pay for work of equal value. That is a principle long honored
in this jurisdiction. That is a principle that rests on fundamental notions of justice. That is the
principle we uphold today.

Private respondent International School, Inc. (the School, for short), pursuant to Presidential
Decree 732, is a domestic educational institution established primarily for dependents of
foreign diplomatic personnel and other temporary residents. [1] To enable the School to
continue carrying out its educational program and improve its standard of instruction, Section
2(c) of the same decree authorizes the School to

employ its own teaching and management personnel selected by it either locally
or abroad, from Philippine or other nationalities, such personnel being exempt
from otherwise applicable laws and regulations attending their employment,
except laws that have been or will be enacted for the protection of employees.

Accordingly, the School hires both foreign and local teachers as members of its faculty,
classifying the same into two: (1) foreign-hires and (2) local-hires. The School employs four
tests to determine whether a faculty member should be classified as a foreign-hire or a local
hire:

a.....What is one's domicile?

b.....Where is one's home economy?

c.....To which country does one owe economic allegiance?

d.....Was the individual hired abroad specifically to work in the School and was
the School responsible for bringing that individual to the Philippines?[2]

Should the answer to any of these queries point to the Philippines, the faculty member is
classified as a local hire; otherwise, he or she is deemed a foreign-hire.
The School grants foreign-hires certain benefits not accorded local-hires. These include
housing, transportation, shipping costs, taxes, and home leave travel allowance. Foreign-hires
are also paid a salary rate twenty-five percent (25%) more than local-hires. The School justifies
the difference on two "significant economic disadvantages" foreign-hires have to endure,
namely: (a) the "dislocation factor" and (b) limited tenure. The School explains:

A foreign-hire would necessarily have to uproot himself from his home country,
leave his family and friends, and take the risk of deviating from a promising
career path-all for the purpose of pursuing his profession as an educator, but this
time in a foreign land. The new foreign hire is faced with economic realities:
decent abode for oneself and/or for one's family, effective means of
transportation, allowance for the education of one's children, adequate insurance
against illness and death, and of course the primary benefit of a basic
salary/retirement compensation.

Because of a limited tenure, the foreign hire is confronted again with the same
economic reality after his term: that he will eventually and inevitably return to his
home country where he will have to confront the uncertainty of obtaining suitable
employment after a long period in a foreign land.

The compensation scheme is simply the School's adaptive measure to remain

competitive on an international level in terms of attracting competent
professionals in the field of international education.[3]

When negotiations for a new collective bargaining agreement were held on June 1995,
petitioner International School Alliance of Educators, "a legitimate labor union and the
collective bargaining representative of all faculty members"[4] of the School, contested the
difference in salary rates between foreign and local-hires. This issue, as well as the question of
whether foreign-hires should be included in the appropriate bargaining unit, eventually caused
a deadlock between the parties.

On September 7, 1995, petitioner filed a notice of strike. The failure of the National Conciliation
and Mediation Board to bring the parties to a compromise prompted the Department of Labor
and Employment (DOLE) to assume jurisdiction over the dispute. On June 10, 1996, the DOLE
Acting Secretary, Crescenciano B. Trajano, issued an Order resolving the parity and
representation issues in favor of the School. Then DOLE Secretary Leonardo A. Quisumbing
subsequently denied petitioner's motion for reconsideration in an Order dated March 19, 1997.
Petitioner now seeks relief in this Court.

Petitioner claims that the point-of-hire classification employed by the School is discriminatory
to Filipinos and that the grant of higher salaries to foreign-hires constitutes racial
discrimination.

The School disputes these claims and gives a breakdown of its faculty members, numbering
38 in all, with nationalities other than Filipino, who have been hired locally and classified as
local hires.[5]The Acting Secretary of Labor found that these non-Filipino local-hires received
the same benefits as the Filipino local-hires:

The compensation package given to local-hires has been shown to apply to all, regardless of
race. Truth to tell, there are foreigners who have been hired locally and who are paid equally
as Filipino local hires.[6]

The Acting Secretary upheld the point-of-hire classification for the distinction in salary rates:
 The principle "equal pay for equal work" does not find application in the present
case. The international character of the School requires the hiring of foreign
personnel to deal with different nationalities and different cultures, among the
student population.

We also take cognizance of the existence of a system of salaries and benefits

accorded to foreign hired personnel which system is universally recognized. We
agree that certain amenities have to be provided to these people in order to
entice them to render their services in the Philippines and in the process remain
competitive in the international market.

Furthermore, we took note of the fact that foreign hires have limited contract of
employment unlike the local hires who enjoy security of tenure. To apply parity
therefore, in wages and other benefits would also require parity in other terms
and conditions of employment which include the employment contract.

A perusal of the parties' 1992-1995 CBA points us to the conditions and

provisions for salary and professional compensation wherein the parties agree as
follows:

All members of the bargaining unit shall be compensated only in

accordance with Appendix C hereof provided that the
Superintendent of the School has the discretion to recruit and hire
expatriate teachers from abroad, under terms and conditions that
are consistent with accepted international practice.

Appendix C of said CBA further provides:

The new salary schedule is deemed at equity with the Overseas

Recruited Staff (OSRS) salary schedule. The 25% differential is
reflective of the agreed value of system displacement and
contracted status of the OSRS as differentiated from the tenured
status of Locally Recruited Staff (LRS).

To our mind, these provisions demonstrate the parties' recognition of the

difference in the status of two types of employees, hence, the difference in their
salaries.

The Union cannot also invoke the equal protection clause to justify its claim of
parity. It is an established principle of constitutional law that the guarantee of
equal protection of the laws is not violated by legislation or private covenants
based on reasonable classification. A classification is reasonable if it is based on
substantial distinctions and apply to all members of the same class. Verily, there
is a substantial distinction between foreign hires and local hires, the former
enjoying only a limited tenure, having no amenities of their own in the Philippines
and have to be given a good compensation package in order to attract them to
join the teaching faculty of the School.[7]

We cannot agree.

That public policy abhors inequality and discrimination is beyond contention. Our Constitution
and laws reflect the policy against these evils. The Constitution [8] in the Article on Social
Justice and Human Rights exhorts Congress to "give highest priority to the enactment of
measures that protect and enhance the right of all people to human dignity, reduce social,
economic, and political inequalities." The very broad Article 19 of the Civil Code requires every
person, "in the exercise of his rights and in the performance of his duties, [to] act with justice,
give everyone his due, and observe honesty and good faith."

International law, which springs from general principles of law, [9] likewise proscribes
discrimination. General principles of law include principles of equity, [10] i.e., the general
principles of fairness and justice, based on the test of what is reasonable.[11] The Universal
Declaration of Human Rights,[12] the International Covenant on Economic, Social, and Cultural
Rights,[13] the International Convention on the Elimination of All Forms of Racial
Discrimination,[14] the Convention against Discrimination in Education,[15] the Convention (No.
111) Concerning Discrimination in Respect of Employment and Occupation [16] - all embody the
general principle against discrimination, the very antithesis of fairness and justice. The
Philippines, through its Constitution, has incorporated this principle as part of its national laws.

In the workplace, where the relations between capital and labor are often skewed in favor of
capital, inequality and discrimination by the employer are all the more reprehensible.

The Constitution[17] specifically provides that labor is entitled to "humane conditions of work."
These conditions are not restricted to the physical workplace - the factory, the office or the field
- but include as well the manner by which employers treat their employees.

The Constitution[18] also directs the State to promote "equality of employment opportunities for
all." Similarly, the Labor Code[19] provides that the State shall "ensure equal work opportunities
regardless of sex, race or creed." It would be an affront to both the spirit and letter of these
provisions if the State, in spite of its primordial obligation to promote and ensure equal
employment opportunities, closes its eyes to unequal and discriminatory terms and conditions
of employment.[20]

Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135,
for example, prohibits and penalizes[21]the payment of lesser compensation to a female
employee as against a male employee for work of equal value. Article 248 declares it an unfair
labor practice for an employer to discriminate in regard to wages in order to encourage or
discourage membership in any labor organization.

Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in Article
7 thereof, provides:

The States Parties to the present Covenant recognize the right of everyone to the
enjoyment of just and favourable conditions of work, which ensure, in particular:

a.....Remuneration which provides all workers, as a minimum, with:

i.....Fair wages and equal remuneration for work of equal value

without distinction of any kind, in particular women being
guaranteed conditions of work not inferior to those enjoyed by men,
with equal pay for equal work;

x x x.

The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal
truism of "equal pay for equal work." Persons who work with substantially equal qualifications,
skill, effort and responsibility, under similar conditions, should be paid similar salaries. [22] This
rule applies to the School, its "international character" notwithstanding.
The School contends that petitioner has not adduced evidence that local-hires perform work
equal to that of foreign-hires.[23] The Court finds this argument a little cavalier. If an employer
accords employees the same position and rank, the presumption is that these employees
perform equal work. This presumption is borne by logic and human experience. If the employer
pays one employee less than the rest, it is not for that employee to explain why he receives
less or why the others receive more. That would be adding insult to injury. The employer has
discriminated against that employee; it is for the employer to explain why the employee is
treated unfairly.

The employer in this case has failed to discharge this burden. There is no evidence here that
foreign-hires perform 25% more efficiently or effectively than the local-hires. Both groups have
similar functions and responsibilities, which they perform under similar working conditions.

The School cannot invoke the need to entice foreign-hires to leave their domicile to rationalize
the distinction in salary rates without violating the principle of equal work for equal pay.

"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or recompense for
services performed." Similarly, the Philippine Legal Encyclopedia states that "salary" is the
"[c]onsideration paid at regular intervals for the rendering of services." In Songco v. National
Labor Relations Commission,[24] we said that:

"salary" means a recompense or consideration made to a person for his pains or

industry in another man's business. Whether it be derived from "salarium," or
more fancifully from "sal," the pay of the Roman soldier, it carries with it the
fundamental idea of compensation for services rendered. (Emphasis supplied.)

While we recognize the need of the School to attract foreign-hires, salaries should not be used
as an enticement to the prejudice of local-hires. The local-hires perform the same services as
foreign-hires and they ought to be paid the same salaries as the latter. For the same reason,
the "dislocation factor" and the foreign-hires' limited tenure also cannot serve as valid bases for
the distinction in salary rates. The dislocation factor and limited tenure affecting foreign-hires
are adequately compensated by certain benefits accorded them which are not enjoyed by
local-hires, such as housing, transportation, shipping costs, taxes and home leave travel
allowances.

The Constitution enjoins the State to "protect the rights of workers and promote their
welfare,"[25] "to afford labor full protection."[26]The State, therefore, has the right and duty to
regulate the relations between labor and capital.[27] These relations are not merely contractual
but are so impressed with public interest that labor contracts, collective bargaining agreements
included, must yield to the common good.[28] Should such contracts contain stipulations that
are contrary to public policy, courts will not hesitate to strike down these stipulations.

In this case, we find the point-of-hire classification employed by respondent School to justify
the distinction in the salary rates of foreign-hires and local hires to be an invalid classification.
There is no reasonable distinction between the services rendered by foreign-hires and local-
hires. The practice of the School of according higher salaries to foreign-hires contravenes
public policy and, certainly, does not deserve the sympathy of this Court.

We agree, however, that foreign-hires do not belong to the same bargaining unit as the local-
hires.

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 indicate to be the
best suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law."[29] The 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.[30]The basic test of an asserted
bargaining unit's acceptability is whether or not it is fundamentally the combination which will
best assure to all employees the exercise of their collective bargaining rights. [31]

It does not appear that foreign-hires have indicated their intention to be grouped together with
local-hires for purposes of collective bargaining. The collective bargaining history in the School
also shows that these groups were always treated separately. Foreign-hires have limited
tenure; local-hires enjoy security of tenure. Although foreign-hires perform similar functions
under the same working conditions as the local-hires, foreign-hires are accorded certain
benefits not granted to local-hires. These benefits, such as housing, transportation, shipping
costs, taxes, and home leave travel allowance, are reasonably related to their status as
foreign-hires, and justify the exclusion of the former from the latter. To include foreign-hires in
a bargaining unit with local-hires would not assure either group the exercise of their respective
collective bargaining rights.

WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN
PART. The Orders of the Secretary of Labor and Employment dated June 10, 1996 and March
19, 1997, are hereby REVERSED and SET ASIDE insofar as they uphold the practice of
respondent School of according foreign-hires higher salaries than local-hires.

SO ORDERED.

Puno, and Pardo, JJ., concur.

Davide, Jr., C.J., (Chairman), on official leave.

Ynares-Santiago, J., on leave.

#12

Republic of the Philippines

SUPREME COURT

FIRST DIVISION

G.R. No. 151326 November 23, 2005

ST. JAMES SCHOOL OF QUEZON CITY, Petitioner,

vs.
SAMAHANG MANGGAGAWA SA ST. JAMES SCHOOL OF QUEZON CITY, Respondent.

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review1 assailing the 5 September 2001 Decision and 3
January 2002 Resolution of the Court of Appeals2 in CA-G.R. SP No. 60197. The Court of
Appeals sustained the Decision of the Department of Labor and Employment ("DOLE")
directing the opening of the challenged ballots cast during the certification election.

The Antecedent Facts

The Samahang Manggagawa sa St. James School of Quezon City ("Samahang

Manggagawa") filed a petition for certification election to determine the collective bargaining
representative of the motor pool, construction and transportation employees of St. James
School of Quezon City ("St. James"). On 26 June 1999, the certification election was held at
the DOLE office in Intramuros, Manila. There were 149 eligible voters and 84 voters cast their
votes. St. James filed a certification election protest challenging the 84 votes. St. James
alleged that it had 179 rank and file employees, none of whom voted in the certification
election. St. James argued that those who voted were not its regular employees but
construction workers of an independent contractor, Architect Conrado Bacoy ("Architect
Bacoy").

In an Order dated 6 January 2000,3 Med-Arbiter Tomas F. Falconitin ("Med-Arbiter Falconitin")

ruled that at the time of the certification election, the 84 voters were no longer working at St.
James. Med-Arbiter Falconitin supported his ruling using the roster of rank and file employees
submitted by St. James, which did not include the names of the 84 voters. Med-Arbiter
Falconitin also ruled that since the construction projects have ceased, some of the workers
were no longer entitled to vote in the certification election. Finally, Med-Arbiter Falconitin ruled
that even if the 84 workers were to be included in the 179 rank and file employees of St.
James, the total number of voters would be 263. Thus, the 84 votes cast would not be
sufficient to constitute a majority of all eligible voters to have a valid certification election. The
dispositive portion of the Order reads:

WHEREFORE, premises considered, the certification election protest is hereby given due
course.

Accordingly, judgment is hereby rendered, declaring the certification election for the rank and
file employees of respondent/protestant St. James School of Quezon City conducted on June
26, 1999, a failure; and null and void ab initio.

SO ORDERED.4
Samahang Manggagawa appealed to the Secretary of Labor. In its Decision 5 dated 5 May
2000, the DOLE6reversed the ruling of Med-Arbiter Falconitin. The DOLE ruled that Samahang
Manggagawa seeks to represent the non-academic personnel or the rank and file employees
from the motor pool, construction and transportation departments, and not all the rank and file
employees of St. James. According to the DOLE, Med-Arbiter Falconitin erred in including all
the rank and file employees of St. James, whether teaching or non-teaching personnel, in the
computation of the total number of employees. The DOLE ruled that the list submitted by St.
James contained only the administrative, teaching and office personnel of the school. The
dispositive portion of the Decision reads:

WHEREFORE, the appeal is hereby GRANTED and the order dated 06 January 2000 of the
Med-Arbiter is REVERSED and SET ASIDE. In lieu thereof, an order is hereby issued directing
the Election Officer, Lilibeth Cagara, DOLE-National Capital Region to open and canvass the
84 challenged ballots within ten (10) days from receipt hereof, subject to usual notice and
representation by the parties and thereafter to issue the corresponding certification of the
results.

SO DECIDED.7

St. James filed a motion for reconsideration. The DOLE 8 denied the motion in its 19 June 2000
Resolution.9 St. James filed a special civil action before the Court of Appeals.

In a Decision10 dated 5 September 2001, the Court of Appeals dismissed the petition and ruled
that the DOLE did not commit grave abuse of discretion in reversing the ruling of Med-Arbiter
Falconitin. In its 3 January 2002 Resolution,11 the Court of Appeals denied St. James’ motion
for reconsideration.

Hence, the petition before this Court.

The Issues

St. James questions the validity of the formation of the labor union and the validity of the
certification election.12

The Ruling of the Court

The petition has no merit.

The Validity of the Formation of the Labor Union

St. James argues that majority of the members of Samahang Manggagawa are not its
employees but employees of Architect Bacoy, an independent contractor.

St. James may no longer question the validity of the formation of the labor union.

The records13 show that prior to the holding of the certification election, St. James filed a
petition for cancellation of Samahang Manggagawa’s union registration. Among the grounds
cited in the petition was the lack of employer-employee relationship between St. James and
Samahang Manggagawa’s members. The Med-Arbiter recommended the cancellation of the
union registration. DOLE Regional Director IV Romeo Young ("Director Young") adopted the
Med-Arbiter’s recommendation and cancelled Samahang Manggagawa’s union registration.
Samahang Manggagawa filed an appeal before the Bureau of Labor Relations ("BLR"). In its
Decision14 dated 22 January 1998, the BLR15 reversed Director Young’s Decision. In its
Resolution16 of 12 February 1998, the BLR denied St. James’ motion for reconsideration. St.
James filed a special civil action before the Court of Appeals. The case was docketed as CA-
G.R. SP No. 50918. In its 9 February 2001 Decision,17 the Court of Appeals dismissed St.
James’ petition and affirmed the BLR’s Decision. The Court of Appeals ruled that the
construction workers are actually St. James’ regular employees in its motor pool, construction
and transportation departments. The Court of Appeals also ruled that Architect Bacoy is a
labor-only contractor and thus an agent of St. James, which is the real employer.

St. James filed a petition for certiorari before this Court. The case was docketed as G.R. No.
149648. In a Resolution dated 10 October 2001, this Court denied the petition for St. James’
error in the choice or mode of appeal.18 The Court’s 10 October 2001 Resolution closed any
issue on the validity of the formation of the labor union.

The Validity of the Certification Election

Section 13, Rule XII, Book V of the Omnibus Rules Implementing the Labor Code ("Omnibus
Rules") provides:

Section 13. Proclamation and certification of results by election officer; when proper. – Upon
completion of the canvass there being a valid election, the election officer shall proclaim and
certify as winner the union which obtained a majority of the valid votes cast under any of the
following conditions:

a) No protest had been filed or, even if one was filed, the same was not perfected within the
five-day period for perfection of the protest;

b) No challenge of eligibility issue was raised or even if one was raised, the resolution of the
same will not materially change the result.

For this purpose, the election officer shall immediately issue the corresponding certification,
copy furnished all parties, which shall form part of the records of the case. The winning union
shall have the rights, privileges and obligations of a duly certified collective bargaining
representative from the time the certification is issued. The proclamation and certification so
issued shall not be appealable.

According to St. James, the certification election was conducted without quorum. St. James
alleges that it has 179 rank and file employees in its Quezon City Campus. When the
certification election was held, none of these qualified rank and file employees cast their votes
because they were all on duty in the school premises. The 84 voters who cast their votes are
employees of Architect Bacoy. St. James also alleges that it has 570 rank and file employees
in all its campuses. Even if the 84 voters are its employees, the votes do not constitute a
majority vote of its rank and file employees because the quorum should be based on its 570
rank and file employees.

We cannot sustain the argument.

St. James has five campuses – the Philamlife and Scout Alcaraz, Quezon City campuses
which are pre-schools; the Parañaque City and Calamba, Laguna campuses which offer
elementary, secondary and college education; and the Tandang Sora, Quezon City campus
which offers elementary and secondary education.19

The members of Samahang Manggagawa are employees in the Tandang Sora campus. Under
its constitution and by-laws, Samahang Manggagawa seeks to represent the motor pool,
construction and transportation employees of the Tandang Sora campus. 20 Thus, the
computation of the quorum should be based on the rank and file motor pool, construction and
transportation employees of the Tandang Sora campus and not on all the employees in St.
James’ five campuses.

Section 2, Rule XII, Book V of the Omnibus Rules provides:

Section 2. Qualification of voters; inclusion-exclusion proceedings. – All employees who are
members of the appropriate bargaining unit sought to be represented by the petitioner at the
time of the certification or consent election shall be qualified to vote. A dismissed employee
whose dismissal is being contested in a pending case shall be allowed to vote in the election.

In case of disagreement over the voters’ list or over the eligibility of voters, all contested voters
shall be allowed to vote. However, their votes shall be segregated and sealed in individual
envelopes in accordance with Section 9 of these Rules.

The motor pool, construction and transportation employees of the Tandang Sora campus had
149 qualified voters at the time of the certification election. Hence, the 149 qualified voters
should be used to determine the existence of a quorum. Since a majority or 84 out of the 149
qualified voters cast their votes, a quorum existed in the certification election.

St. James further alleges that the names of the 84 voters are not on the list of its rank and file
employees. On this score, we sustain the factual finding of the DOLE that the list submitted by
St. James consists of its administrative, teaching and office personnel. These administrative,
teaching and office personnel are not members of Samahang Manggagawa. They do not
belong to the bargaining unit that Samahang Manggagawa seeks to represent. Hence, the list
submitted by St. James may not be used as basis to determine the members of Samahang
Manggagawa.

WHEREFORE, we DENY the petition. We AFFIRM the 5 September 2001 Decision and the 3
January 2002 Resolution of the Court of Appeals in CA-G.R. SP No. 60197.

SO ORDERED.
#13.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 77395 November 29, 1988

BELYCA CORPORATION, petitioner,

vs.
DIR. PURA FERRER CALLEJA, LABOR RELATIONS, MANILA, MINISTRY OF LABOR
AND EMPLOYMENT; MED-ARBITER, RODOLFO S. MILADO, MINISTRY OF LABOR AND
EMPLOYMENT, REGIONAL OFFICE NO. 10 AND ASSOCIATED LABOR UNION (ALU-
TUCP), MINDANAO REGIONAL OFFICE, CAGAYAN DE ORO CITY, respondents.

Soriano and Arana Law Offices for petitioner.

The Solicitor General for public respondent.

Francisco D. Alas for respondent Associated Labor Unions-TUCP.

PARAS, J.:

This is a petition for certiorari and prohibition with preliminary injunction seeking to annul or to
set aside the resolution of the Bureau of Labor Relations dated November 24, 1986 and
denying the appeal, and the Bureau's resolution dated January 13, 1987 denying petitioner's
motion for reconsideration.

The dispositive portion of the questioned resolution dated November 24, 1986 (Rollo, p. 4)
reads as follows:

WHEREFORE, in view of all the foregoing considerations, the Order is affirmed

and the appeal therefrom denied.

Let, therefore, the pertinent records of the case be remanded to the office of
origin for the immediate conduct of the certification election.

The dispositive portion of the resolution dated January 13, 1987 (Rollo, p. 92) reads, as
follows:

WHEREFORE, the Motion for Reconsideration filed by respondent Belyca

Corporation (Livestock Agro-Division) is hereby dismissed for lack of merit and
the Bureau's Resolution dated 24 November 1986 is affirmed. Accordingly, let
the records of this case be immediately forwarded to the Office of origin for the
holding of the certification elections.

No further motion shall hereafter be entertained.

The antecedents of the case are as follows:

On June 3, 1986, private respondent Associated Labor Union (ALU)-TUCP, a legitimate labor
organization duly registered with the Ministry of Labor and Employment under Registration
Certificate No. 783-IP, filed with the Regional Office No. 10, Ministry of Labor and Employment
at Cagayan de Oro City, a petition for direct certification as the sole and exclusive bargaining
agent of all the rank and file employees/workers of Belyca Corporation (Livestock and Agro-
Division), a duly organized, registered and existing corporation engaged in the business of
poultry raising, piggery and planting of agricultural crops such as corn, coffee and various
vegetables, employing approximately 205 rank and file employees/workers, the collective
bargaining unit sought in the petition, or in case of doubt of the union's majority representation,
for the issuance of an order authorizing the immediate holding of a certification election (Rollo,
p. 18). Although the case was scheduled for hearing at least three times, no amicable
settlement was reached by the parties. During the scheduled hearing of July 31, 1986 they,
however, agreed to submit simultaneously their respective position papers on or before August
11, 1986 (rollo. p. 62).

Petitioner ALU-TUCP, private respondent herein, in its petition and position paper alleged,
among others, (1) that there is no existing collective bargaining agreement between the
respondent employer, petitioner herein, and any other existing legitimate labor unions; (2) that
there had neither been a certification election conducted in the proposed bargaining unit within
the last twelve (12) months prior to the filing of the petition nor a contending union requesting
for certification as the. sole and exclusive bargaining representative in the proposed bargaining
unit; (3) that more than a majority of respondent employer's rank-and-file employees/workers in
the proposed bargaining unit or one hundred thirty-eight (138) as of the date of the filing of the
petition, have signed membership with the ALU-TUCP and have expressed their written
consent and authorization to the filing of the petition; (4) that in response to petitioner union's
two letters to the proprietor/ General Manager of respondent employer, dated April 21, 1986
and May 8, 1 986, requesting for direct recognition as the sole and exclusive bargaining agent
of the rank-and-file workers, respondent employer has locked out 119 of its rank-and-file
employees in the said bargaining unit and had dismissed earlier the local union president, vice-
president and three other active members of the local unions for which an unfair labor practice
case was filed by petitioner union against respondent employer last July 2, 1986 before the
NLRC in Cagayan de Oro City (Rollo, pp. 18; 263).<äre||anº•1àw>

Respondent employer, on the other hand, alleged in its position paper, among others, (1) that
due to the nature of its business, very few of its employees are permanent, the overwhelming
majority of which are seasonal and casual and regular employees; (2) that of the total 138
rank-and-file employees who authorized, signed and supported the filing of the petition (a) 14
were no longer working as of June 3, 1986 (b) 4 resigned after June, 1986 (c) 6 withdrew their
membership from petitioner union (d) 5 were retrenched on June 23, 1986 (e) 12 were
dismissed due to malicious insubordination and destruction of property and (f) 100 simply
abandoned their work or stopped working; (3) that the 128 incumbent employees or workers of
the livestock section were merely transferred from the agricultural section as replacement for
those who have either been dismissed, retrenched or resigned; and (4) that the statutory
requirement for holding a certification election has not been complied with by the union (Rollo,
p. 26).

The Labor Arbiter granted the certification election sought for by petitioner union in his order
dated August 18, 1986 (Rollo, p. 62).

On February 4, 1987, respondent employer Belyca Corporation, appealed the order of the
Labor Arbiter to the Bureau of Labor Relations in Manila (Rollo, p. 67) which denied the appeal
(Rollo, p. 80) and the motion for reconsideration (Rollo, p. 92). Thus, the instant petition
received in this Court by mail on February 20, 1987 (Rollo, p. 3).

In the resolution of March 4, 1987, the Second Division of this Court required respondent
Union to comment on the petition and issued a temporary restraining order (,Rollo, p. 95).

Respondent union filed its comment on March 30, 1987 (Rollo, p. 190); public respondents
filed its comment on April 8, 1987 (Rollo, p. 218).
On May 4, 1987, the Court resolved to give due course to the petition and to require the parties
to submit their respective memoranda within twenty (20) days from notice (Rollo, p. 225).

The Office of the Solicitor General manifested on June 11, 1987 that it is adopting the
comment for public respondents as its memorandum (Rollo, p. 226); memorandum for
respondent ALU was filed on June 30, 1987 (Rollo, p. 231); and memorandum for petitioner,
on July 30, 1987 (Rollo, p. 435).

The issues raised in this petition are:

WHETHER OR NOT THE PROPOSED BARGAINING UNIT IS AN

APPROPRIATE BARGAINING UNIT.

II

WHETHER OR NOT THE STATUTORY REQUIREMENT OF 30% (NOW 20%)

OF THE EMPLOYEES IN THE PROPOSED BARGAINING UNIT, ASKING FOR
A CERTIFICATION ELECTION HAD BEEN STRICTLY COMPLIED WITH.

In the instant case, respondent ALU seeks direct certification as the sole and exclusive
bargaining agent of all the rank-and-file workers of the livestock and agro division of petitioner
BELYCA Corporation (Rollo, p. 232), engaged in piggery, poultry raising and the planting of
agricultural crops such as corn, coffee and various vegetables (Rollo, p. 26). But petitioner
contends that the bargaining unit must include all the workers in its integrated business
concerns ranging from piggery, poultry, to supermarts and cinemas so as not to split an
otherwise single bargaining unit into fragmented bargaining units (Rollo, p.
435).<äre||anº•1àw>

The Labor Code does not specifically define what constitutes an appropriate collective
bargaining unit. Article 256 of the Code provides:

Art. 256. Exclusive bargaining representative.—The labor

organization designated or selected by the majority of the
employees in an appropriate collective bargaining unit shall be
exclusive representative of the employees in such unit for the
purpose of collective bargaining. However, an individual employee
or group of employee shall have the right at any time to present
grievances to their employer.

According to Rothenberg, a proper bargaining unit maybe said to be a group of employees of a

given employer, comprised of all or less than all of the entire body of employees, which the
collective interests of all the employees, consistent with equity to the employer, indicate to be
best suited to serve reciprocal rights and duties of the parties under the collective bargaining
provisions of the law (Rothenberg in Labor Relations, p. 482).

This Court has already taken cognizance of the crucial issue of determining the proper
constituency of a collective bargaining unit.

Among the factors considered in Democratic Labor Association v. Cebu Stevedoring Co. Inc.
(103 Phil 1103 [1958]) are: "(1) will of employees (Glove Doctrine); (2) affinity and unity of
employee's interest, such as substantial similarity of work and duties or similarity of
compensation and working conditions; (3) prior collective bargaining history; and (4)
employment status, such as temporary, seasonal and probationary employees".
Under the circumstances of that case, the Court stressed the importance of the fourth factor
and sustained the trial court's conclusion that two separate bargaining units should be formed
in dealing with respondent company, one consisting of regular and permanent employees and
another consisting of casual laborers or stevedores. Otherwise stated, temporary employees
should be treated separately from permanent employees. But more importantly, this Court laid
down the test of proper grouping, which is community and mutuality of interest.

Thus, in a later case, (Alhambra Cigar and Cigarette Manufacturing Co. et al. v. Alhambra
Employees' Association 107 Phil. 28 [1960]) where the employment status was not at issue but
the nature of work of the employees concerned; the Court stressed the importance of the
second factor otherwise known as the substantial-mutual-interest test and found no reason to
disturb the finding of the lower Court that the employees in the administrative, sales and
dispensary departments perform work which has nothing to do with production and
maintenance, unlike those in the raw leaf, cigar, cigarette and packing and engineering and
garage departments and therefore community of interest which justifies the format or existence
as a separate appropriate collective bargaining unit.

Still later in PLASLU v. CIR et al. (110 Phil. 180 [1960]) where the employment status of the
employees concerned was again challenged, the Court reiterating the rulings, both
in Democratic Labor Association v. Cebu Stevedoring Co. Inc. supra and Alhambra Cigar and
Cigarette Co. et al. v. Alhambra Employees' Association (supra) held that among the factors to
be considered are: employment status of the employees to be affected, that is the positions
and categories of work to which they belong, and the unity of employees' interest such as
substantial similarity of work and duties.

In any event, whether importance is focused on the employment status or the mutuality of
interest of the employees concerned "the basic test of an asserted bargaining unit's
acceptability is whether or not it is fundamentally the combination which will best assure to all
employees the exercise of their collective bargaining rights (Democratic Labor Association v.
Cebu Stevedoring Co. Inc. supra)

Hence, still later following the substantial-mutual interest test, the Court ruled that there is a
substantial difference between the work performed by musicians and that of other persons who
participate in the production of a film which suffice to show that they constitute a proper
bargaining unit. (LVN Pictures, Inc. v. Philippine Musicians Guild, 1 SCRA 132 [1961]).

Coming back to the case at bar, it is beyond question that the employees of the livestock and
agro division of petitioner corporation perform work entirely different from those performed by
employees in the supermarts and cinema. Among others, the noted difference are: their
working conditions, hours of work, rates of pay, including the categories of their positions and
employment status. As stated by petitioner corporation in its position paper, due to the nature
of the business in which its livestock-agro division is engaged very few of its employees in the
division are permanent, the overwhelming majority of which are seasonal and casual and not
regular employees (Rollo, p. 26). Definitely, they have very little in common with the
employees of the supermarts and cinemas. To lump all the employees of petitioner in its
integrated business concerns cannot result in an efficacious bargaining unit comprised of
constituents enjoying a community or mutuality of interest. Undeniably, the rank and file
employees of the livestock-agro division fully constitute a bargaining unit that satisfies both
requirements of classification according to employment status and of the substantial similarity
of work and duties which will ultimately assure its members the exercise of their collective
bargaining rights.

II

It is undisputed that petitioner BELYCA Corporation (Livestock and Agro Division) employs
more or less two hundred five (205) rank-and-file employees and workers. It has no existing
duly certified collective bargaining agreement with any legitimate labor organization. There has
not been any certification election conducted in the proposed bargaining unit within the last
twelve (12) months prior to the filing of the petition for direct certification and/or certification
election with the Ministry of Labor and Employment, and there is no contending union
requesting for certification as the sole and exclusive bargaining representative in the proposed
bargaining unit.

The records show that on the filing of the petition for certification and/or certification election on
June 3, 1986; 124 employees or workers which are more than a majority of the rank-and-file
employees or workers in the proposed bargaining unit had signed membership with
respondent ALU-TUCP and had expressed their written consent and authorization to the filing
of the petition. Thus, the Labor Arbiter ordered the certification election on August 18, 1986 on
a finding that 30% of the statutory requirement under Art. 258 of the Labor Code has been
met.

But, petitioner corporation contends that after June 3, 1986 four (4) employees resigned; six
(6) subsequently withdrew their membership; five (5) were retrenched; twelve (12) were
dismissed for illegally and unlawfully barricading the entrance to petitioner's farm; and one
hundred (100) simply abandoned their work.

Petitioner's claim was however belied by the Memorandum of its personnel officer to the 119
employees dated July 28, 1986 showing that the employees were on strike, which was
confirmed by the finding of the Bureau of Labor Relations to the effect that they went on strike
on July 24, 1986 (Rollo, p. 419). Earlier the local union president, Warrencio Maputi; the Vice-
president, Gilbert Redoblado and three other active members of the union Carmen Saguing,
Roberto Romolo and Iluminada Bonio were dismissed and a complaint for unfair labor practice,
illegal dismissal etc. was filed by the Union in their behalf on July 2, 1986 before the NLRC of
Cagayan de Oro City (Rollo, p. 415).<äre||anº•1àw> The complaint was amended on August
20, 1986 for respondent Union to represent Warrencio Maputi and 137 others against
petitioner corporation and Bello Casanova President and General Manager for unfair labor
practice, illegal dismissal, illegal lockout, etc. (Rollo, p. 416).

Under Art. 257 of the Labor Code once the statutory requirement is met, the Director of Labor
Relations has no choice but to call a certification election (Atlas Free Workers Union AFWU
PSSLU Local v. Noriel, 104 SCRA 565 [1981]; Vismico Industrial Workers Association (VIWA)
v. Noriel, 131 SCRA 569 [1984]) It becomes in the language of the New Labor Code
"Mandatory for the Bureau to conduct a certification election for the purpose of determining the
representative of the employees in the appropriate bargaining unit and certify the winner as the
exclusive bargaining representative of all employees in the unit." (Federacion Obrera de la
Industria Tabaquera y Otros Trabajadores de Filipinas v. Noriel, 72 SCRA 24 [1976];
Kapisanan Ng Mga Manggagawa v. Noriel, 77 SCRA 414 [1977]); more so when there is no
existing collective bargaining agreement. (Samahang Manggagawa Ng Pacific Mills, Inc. v.
Noriel, 134 SCRA 152 [1985]); and there has not been a certification election in the company
for the past three years (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119
SCRA 299 [1982]) as in the instant case.

It is significant to note that 124 employees out of the 205 employees of the Belyca Corporation
have expressed their written consent to the certification election or more than a majority of the
rank and file employees and workers; much more than the required 30% and over and above
the present requirement of 20% by Executive Order No. 111 issued on December 24, 1980
and applicable only to unorganized establishments under Art. 257, of the Labor Code, to which
the BELYCA Corporation belong (Ass. Trade Unions (ATU) v. Trajano, G.R. No. 75321, June
20, 1988).) More than that, any doubt cast on the authenticity of signatures to the petition for
holding a certification election cannot be a bar to its being granted (Filipino Metals Corp. v.
Ople 107 SCRA 211 [1981]). Even doubts as to the required 30% being met warrant holding of
the certification election (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 119
SCRA 299 [1982]). In fact, once the required percentage requirement has been reached, the
employees' withdrawal from union membership taking place after the filing of the petition for
certification election will not affect said petition. On the contrary, the presumption arises that
the withdrawal was not free but was procured through duress, coercion or for a valuable
consideration (La Suerte Cigar and Cigarette Factory v. Director of the Bureau of Labor
Relations, 123 SCRA 679 [1983]). Hence, the subsequent disaffiliation of the six (6)
employees from the union will not be counted against or deducted from the previous number
who had signed up for certification elections Vismico Industrial Workers Association (VIWA) v.
Noriel 131 SCRA 569 [1984]).<äre||anº•1àw> Similarly, until a decision, final in character, has
been issued declaring the strike illegal and the mass dismissal or retrenchment valid, the
strikers cannot be denied participation in the certification election notwithstanding, the vigorous
condemnation of the strike and the fact that the picketing were attended by violence. Under the
foregoing circumstances, it does not necessarily follow that the strikers in question are no
longer entitled to participate in the certification election on the theory that they have
automatically lost their jobs. (Barrera v. CIR, 107 SCRA 596 [1981]). For obvious reasons, the
duty of the employer to bargain collectively is nullified if the purpose of the dismissal of the
union members is to defeat the union in the consent requirement for certification election.
(Samahang Manggagawa Ng Via Mare v. Noriel, 98 SCRA 507 [1980]). As stressed by this
Court, the holding of a certification election is a statutory policy that should not be
circumvented. (George and Peter Lines Inc. v. Associated Labor Unions (ALU), 134 SCRA 82
[1986]).

Finally, as a general rule, a certification election is the sole concern of the workers. The only
exception is where the employer has to file a petition for certification election pursuant to Art.
259 of the Labor Code because the latter was requested to bargain collectively. But thereafter
the role of the employer in the certification process ceases. The employer becomes merely a
bystander (Trade Union of the Phil. and Allied Services (TUPAS) v. Trajano, 120 SCRA 64
[1983]).

There is no showing that the instant case falls under the above mentioned exception.
However, it will be noted that petitioner corporation from the outset has actively participated
and consistently taken the position of adversary in the petition for direct certification as the sole
and exclusive bargaining representative and/or certification election filed by respondent
Associated Labor Unions (ALU)-TUCP to the extent of filing this petition for certiorari in this
Court. Considering that a petition for certification election is not a litigation but a mere
investigation of a non-adversary character to determining the bargaining unit to represent the
employees (LVN Pictures, Inc. v. Philippine Musicians Guild, supra; Bulakena Restaurant &
Caterer v. Court of Industrial Relations, 45 SCRA 88 [1972]; George Peter Lines, Inc. v.
Associated Labor Union, 134 SCRA 82 [1986]; Tanduay Distillery Labor Union v. NLRC, 149
SCRA 470 [1987]), and its only purpose is to give the employees true representation in their
collective bargaining with an employer (Confederation of Citizens Labor Unions CCLU v.
Noriel, 116 SCRA 694 [1982]), there appears to be no reason for the employer's objection to
the formation of subject union, much less for the filing of the petition for a certification election.

PREMISES CONSIDERED, (a) the petition is DISMISSED for lack of merit (b) resolution of the
Bureau of Labor Relations dated Nov. 24, 1986 is AFFIRMED; and the temporary restraining
order issued by the Court on March 4, 1987 is LIFTED permanently.

SO ORDERED.

Melencio-Herrera (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.

#14.
THIRD DIVISION
[G.R. No. 156292. January 11, 2005]

ME-SHURN CORPORATION AND SAMMY CHOU, petitioners,

vs.
ME-SHURN WORKERS UNION-FSM AND ROSALINACRUZ, respondents.

DECISION
PANGANIBAN, J.:

To justify the closure of a business and the termination of the services of the concerned
employees, the law requires the employer to prove that it suffered substantial actual losses.
The cessation of a companys operations shortly after the organization of a labor union, as well
as the resumption of business barely a month after, gives credence to the employees claim
that the closure was meant to discourage union membership and to interfere in union activities.
These acts constitute unfair labor practices.

The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to annul
the November 29, 2002 Decision[2] of the Court of Appeals (CA) in CA-GR SP No. 69675, the
decretal portion of which reads:
UPON THE VIEW WE TAKE OF THIS CASE, THUS, the judgment must be, as it hereby is, AFFIRMED, and
the present petition DISMISSED for lack of merit. Costs shall be taxed against petitioners.[3]

The affirmed November 29, 2001 Decision[4]of the National Labor Relations Commission
(NLRC), Third Division, disposed as follows:
WHEREFORE, the decision appealed from is hereby SET ASIDE, and respondent Me-Shurn Corp. is
hereby ordered to pay the complainants who appeared in the proceedings conducted by the Labor
Arbiter their full backwages from the date their wages were withheld from them to the date of the
finality of this decision.[5]

The Facts

On June 7, 1998, the regular rank and file employees of Me-Shurn Corporation organized
Me-Shurn Workers Union-FSM, an affiliate of the February Six Movement
(FSM).[6] Respondent union had a pending application for registration with the Bureau of Labor
Relations (BLR) through a letter dated June 11, 1998.[7]
Ten days later, or on June 17, 1998, petitioner corporation started placing on forced leave
all the rank and file employees who were members of the unions bargaining unit.[8]
On June 23, 1998, respondent union filed a Petition for Certification Election with the Med-
Arbitration Unit of the Department of Labor and Employment (DOLE), Regional Office No. 3.[9]
 Instead of filing an answer to the Petition, the corporation filed on July 27, 1998, a
comment stating that it would temporarily lay off employees and cease operations, on account
of its alleged inability to meet the export quota required by the Board of Investment. [10]
While the Petition was pending, 184 union members allegedly submitted a
retraction/withdrawal thereof on July 14, 1998. As a consequence, the med-arbiter dismissed
the Petition. On May 7, 1999, Department of Labor and Employment (DOLE) Undersecretary
Rosalinda Dimapilis-Baldoz granted the unions appeal and ordered the holding of a
certification election among the rank and file employees of the corporation.[11]
Meanwhile, on August 4, 1998, respondent union filed a Notice of Strike against petitioner
corporation on the ground of unfair labor practice (illegal lockout and union busting). This
matter was docketed as Case No. NCMB-RO3-BEZ-NZ-08-42-98.[12]
On August 31, 1998, Chou Fang Kuen (alias Sammy Chou, the other petitioner herein)
and Raquel Lamayra (the Filipino administrative manager of the corporation) imposed a
precondition for the resumption of operation and the rehiring of laid off workers. He allegedly
required the remaining union officers to sign an Agreement containing a guarantee that upon
their return to work, no union or labor organization would be organized. Instead, the union
officers were to serve as mediators between labor and management. [13] After the signing of the
Agreement, the operations of the corporation resumed in September 1998.[14]
On November 5, 1998, the union reorganized and elected a new set of officers.
Respondent Rosalina Cruz was elected president.[15]Thereafter, it filed two Complaints
docketed as NLRC Case Nos. RAB-III-11-9586-98 and RAB-III-09-0322-99. These cases were
consolidated and assigned to Labor Arbiter Henry Isorena for compulsory arbitration.
Respondents charged petitioner corporation with unfair labor practice, illegal dismissal,
underpayment of wages and deficiency in separation pay, for which they prayed for damages
and attorneys fees.
The corporation countered that because of economic reversals, it was compelled to close
and cease its operations to prevent serious business losses; that under Article 283 of the
Labor Code, it had the right to do so; that in August 1998, it had paid its 342 laid off employees
separation pay and benefits in the total amount of P1,682,863.88; and that by virtue of these
payments, the cases had already become moot and academic. It also averred that its
resumption of operations in September 1998 had been announced and posted at the Bataan
Export Processing Zone, and that some of the former employees had reapplied.
Petitioner corporation questioned the legality of the representation of respondent union.
Allegedly, it was not the latter, but the Me-Shurn Independent Employees Union -- with
Christopher Malit as president -- that was recognized as the existing exclusive bargaining
agent of the rank and file employees and as the one that had concluded a Collective
Bargaining Agreement (CBA) with the corporation on May 19, 1999.[16] Hence, the corporation
asserted that Undersecretary Dimapilis-Baldozs Decision ordering the holding of a certification
election had become moot and academic.
On the other hand, respondents contested the legality of the formation of the Me-Shurn
Independent Employees Union and petitioners recognition of it as the exclusive bargaining
agent of the employees. Respondents argued that the pendency of the representation issue
before the DOLE had barred the alleged recognition of the aforementioned union.
Labor Arbiter Isorena dismissed the Complaints for lack of merit. He ruled that (1) actual
and expected losses justified the closure of petitioner corporation and its dismissal of its
employees; (2) the voluntary acceptance of separation pay by the workers precluded them
from questioning the validity of their dismissal; and (3) the claim for separation pay lacked
factual basis.[17]
On appeal, the NLRC reversed the Decision of Labor Arbiter Isorena. Finding petitioners
guilty of unfair labor practice, the Commission ruled that the closure of the corporation shortly
after respondent union had been organized, as well as the dismissal of the employees, had
been effected under false pretenses. The true reason therefor was allegedly to bar the
formation of the union. Accordingly, the NLRC held that the illegally dismissed employees were
entitled to back wages.[18]
After the denial of their Motion for Reconsideration,[19] petitioners elevated the cases to the
CA via a Petition for Certiorari under Rule 65.[20] They maintained that the NLRC had
committed grave abuse of discretion and serious errors of fact and law in reversing the
Decision of the labor arbiter and in finding that the corporations cessation of operations in
August 1998 had been tainted with unfair labor practice.
Petitioners added that respondent unions personality to represent the affected employees
had already been repudiated by the workers themselves in the certification election conducted
by the DOLE. Pursuant to the Decision of Undersecretary Dimapilis-Baldoz in Case No. RO3
00 9806 RU 001, a certification election was held on September 7, 2000, at the premises of
petitioner corporation under the supervision of the DOLE. The election had the following
results:
Me Shurn Workers Union-FSM 1

No Union 135

Spoiled 2

Challenged 52

Total Votes Cast 190[21]

Ruling of the Court of Appeals

The CA dismissed the Petition because of the failure of petitioners to submit sufficient
proof of business losses. It found that they had wanted merely to abort or frustrate the
formation of respondent union. The burden of proving that the dismissal of the employees was
for a valid or authorized cause rested on the employer.
The appellate court further affirmed the unions legal personality to represent the
employees. It held that (1) registration was not a prerequisite to the right of a labor
organization to litigate; and (2) the cases may be treated as representative suits, with
respondent union acting for the benefit of all its members.
Hence, this Petition.[22]

Issues

In their Supplemental Memorandum, petitioners submit the following issues for our
consideration:
 (1) Whether the dismissal of the employees of petitioner Meshurn Corporation is for
an authorized cause, and
(2) Whether respondents can maintain a suit against petitioners.[23]

The Courts Ruling

The Petition lacks merit.

First Issue:
Validity of the Dismissal

The reason invoked by petitioners to justify the cessation of corporate operations was
alleged business losses. Yet, other than generally referring to the financial crisis in 1998 and to
their supposed difficulty in obtaining an export quota, interestingly, they never presented any
report on the financial operations of the corporation during the period before its shutdown.
Neither did they submit any credible evidence to substantiate their allegation of business
losses.
Basic is the rule in termination cases that the employer bears the burden of showing that
the dismissal was for a just or authorized cause. Otherwise, the dismissal is deemed
unjustified. Apropos this responsibility, petitioner corporation should have presented clear and
convincing evidence[24] of imminent economic or business reversals as a form of affirmative
defense in the proceedings before the labor arbiter or, under justifiable circumstances, even on
appeal with the NLRC.
However, as previously stated, in all the proceedings before the two quasi-judicial bodies
and even before the CA, no evidence was submitted to show the corporations alleged
business losses. It is only now that petitioners have belatedly submitted the corporations
income tax returns from 1996 to 1999 as proof of alleged continued losses during those years.
Again, elementary is the principle barring a party from introducing fresh defenses and facts
at the appellate stage.[25] This Court has ruled that matters regarding the financial condition of
a company -- those that justify the closing of its business and show the losses in its operations
-- are questions of fact that must be proven below.[26] Petitioners must bear the consequence
of their neglect. Indeed, their unexplained failure to present convincing evidence of losses at
the early stages of the case clearly belies the credibility of their present claim.[27]
Obviously, on the basis of the evidence -- or the lack thereof -- the appellate court cannot
be faulted for ruling that the NLRC did not gravely abuse its discretion in finding that the
closure of petitioner corporation was not due to alleged financial losses.
At any rate, even if we admit these additional pieces of evidence, the circumstances
surrounding the cessation of operations of the corporation reveal the doubtful character of its
supposed financial reason.
First, the claim of petitioners that they were compelled to close down the company to
prevent further losses is belied by their resumption of operations barely a month after the
corporation supposedly folded up.
Moreover, petitioners attribute their loss mainly to their failure to obtain an export quota
from the Garments and Textile Export Board (GTEB). Yet, as pointed out by respondents, the
corporation resumed its business without first obtaining an export quota from the GTEB.
Besides, these export quotas pertain only to business with companies in the United States and
do not preclude the corporation from exporting its products to other countries. In other words,
the business that petitioner corporation engaged in did not depend entirely on exports to the
United States.
If it were true that these export quotas constituted the determining and immediate cause of
the closure of the corporation, then why did it reopen for business barely a month after the
alleged cessation of its operations?
Second, the Statements of Income and Deficit for the years 1996 and 1997 show that at
the beginning of 1996, the corporation had a deficit of P2,474,505. Yet, the closure was
effected only after more than a year from such year-end deficit; that is, in the middle of 1998,
shortly after the formation of the union.
On the other hand, the Statement of Income and Deficit for the year 1998 does not reflect
the extent of the losses that petitioner corporation allegedly suffered in the months prior to its
closure in July/August 1998. This document is not an adequate and competent proof of the
alleged losses, considering that it resumed operations in the succeeding month of September.
Upon careful study of the evidence, it is clear that the corporation was more profitable in
1997 than in 1996. By the end of 1997, it had a net income of P1,816,397.
If petitioners were seriously desirous of averting losses, why did the corporation not close
in 1996 or earlier, when it began incurring deficits? They have not satisfactorily explained why
the workers dismissal was effected only after the formation of respondent union in September
1998.
We also take note of the allegation that after several years of attempting to organize a
union, the employees finally succeeded on June 7, 1998. Ten days later, without any valid
notice, all of them were placed on forced leave, allegedly because of lack of quota.
All these considerations give credence to their claim that the closure of the corporation
was a mere subterfuge, a systematic approach intended to dampen the enthusiasm of the
union members.[28]
Third, as a condition for the rehiring of the employees, the union officers were made to
sign an agreement that they would not form any union upon their return to work. This move
was contrary to law.
Fourth, notwithstanding the Petition for Certification Election filed by respondents and
despite knowledge of the pendency thereof, petitioners recognized a newly formed union and
hastily signed with it an alleged Collective Bargaining Agreement. Their preference for the new
union was at the expense of respondent union. Moncada Bijon Factory v. CIR[29] held that an
employer could be held guilty of discrimination, even if the preferred union was not company-
dominated.
Fifth, petitioners were not able to prove their allegation that some of the employees
contracts had expired even before the cessation of operations. We find this claim inconsistent
with their position that all 342 employees of the corporation were paid their separation pay plus
accrued benefits in August 1998.
Sixth, proper written notices of the closure were not sent to the DOLE and the employees
at least one month before the effectivity date of the termination, as required under the Labor
Code. Notice to the DOLE is mandatory to enable the proper authorities to ascertain whether
the closure and/or dismissals were being done in good faith and not just as a pretext for
evading compliance with the employers just obligations to the affected employees. [30] This
requirement is intended to protect the workers right to security of tenure. The absence of such
requirement taints the dismissal.
All these factors strongly give credence to the contention of respondents that the real
reason behind the shutdown of the corporation was the formation of their union. Note that, to
constitute an unfair labor practice, the dismissal need not entirely and exclusively be motivated
by the unions activities or affiliations. It is enough that the discrimination was a contributing
factor.[31] If the basic inspiration for the act of the employer is derived from the affiliation or
activities of the union, the formers assignment of another reason, no matter how seemingly
valid, is unavailing.[32]
Concededly, the determination to cease operations is a management prerogative that the
State does not usually interfere in. Indeed, no business can be required to continue operating
at a loss, simply to maintain the workers in employment. That would be a taking of property
without due process of law. But where it is manifest that the closure is motivated not by a
desire to avoid further losses, but to discourage the workers from organizing themselves into a
union for more effective negotiations with management, the State is bound to intervene.[33]

Second Issue:
Legal Personality of Respondent Union

Neither are we prepared to believe petitioners argument that respondent union was not
legitimate. It should be pointed out that on June 29, 1998, it filed a Petition for Certification
Election. While this Petition was initially dismissed by the med-arbiter on the basis of a
supposed retraction, note that the appeal was granted and that Undersecretary Dimapilis-
Baldoz ordered the holding of a certification election.
The DOLE would not have entertained the Petition if the union were not a legitimate labor
organization within the meaning of the Labor Code. Under this Code, in an unorganized
establishment, only a legitimate union may file a petition for certification election. [34] Hence,
while it is not clear from the record whether respondent union is a legitimate organization, we
are not readily inclined to believe otherwise, especially in the light of the pro-labor policies
enshrined in the Constitution and the Labor Code.[35]
Verily, the union has the requisite personality to sue in its own name in order to challenge
the unfair labor practice committed by petitioners against it and its members. [36] It would be an
unwarranted impairment of the right to self-organization through formation of labor
associations if thereafter such collective entities would be barred from instituting action in their
representative capacity.[37]
Finally, in view of the discriminatory acts committed by petitioners against respondent
union prior to the holding of the certification election on September 27, 2000 -- acts that
included their immediate grant of exclusive recognition to another union as a bargaining agent
despite the pending Petition for certification election -- the results of that election cannot be
said to constitute a repudiation by the affected employees of the unions right to represent them
in the present case.
WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED. Costs
against the petitioners.
SO ORDERED.
Sandoval-Gutierrez, Corona, Carpio-Morales, and Garcia, JJ., concur.
#15.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 82260 July 19, 1989

ASSOCIATED LABOR UNIONS (ALU), petitioner,

vs.
HON. PURA FERRER-CALLEJA, DIRECTOR, BUREAU OF LABOR RELATIONS,
DEPARTMENT OF LABOR AND EMPLOYMENT AND NATIONAL FEDERATION OF
LABOR (NFL), respondents.

GANCAYCO, J.:

This is a petition for the issuance of the extraordinary remedy of certiorari for the reversal of
the Decision 1 of the Director of Bureau of Labor Relations ordering the holding of a
certification election among the workers of Soriano Fruits Corporation.

The antecedent facts of the case are as follows:

Petitioner Associated Labor Unions, ALU for brevity, had a collective bargaining agreement
with the employer Soriano Fruits Corporation which expired on September 30,1987. Prior to
the said date, or on June 22, 1987, petitioner and the employer signed a collective bargaining
agreement which was to take effect on September 1, 1987 and was to remain so until August
31, 1990. The said collective bargaining agreement was unanimously approved and ratified by
the members of the bargaining unit.

However, on August 10, 1987, private respondent National Federation of Labor (NFL), filed a
petition for certification election questioning the majority status of the incumbent union,
pursuant to Executive Order 111 and its Implementing Rules, there being more than majority of
its members who have expressed doubts on the sincerity of the incumbent union. 2 Acting on
the said petition the Med-Arbiter scheduled a hearing on August 21, 1987 to determine the
majority status of herein petitioner but the NFL representative failed to appear despite due
notice. Consequently, the hearing was reset to September 8, 1987 to give NFL an opportunity
to substantiate its claim but again, the NFL was not represented. Thereafter, the parties were
asked to submit their position papers. To bolster its claim, ALU submitted several petitions
signed by members of the bargaining unit to dismiss any petition filed by any union which
seeks to question the majority status of the incumbent union. The signatories to the petition
also reaffirmed its loyalty to ALU.

On October 2, 1987, the Med-Arbiter promulgated an Order 3 dismissing the petition for
certification election on the ground of failure to prosecute. An appeal to the Bureau of Labor
Relations however, proved fruitful. On December 22, 1987 the respondent Director of the
Bureau of Labor Relations held that the Med-Arbiter erred in dismissing the petition for
certification election. The dispositive portion of the decision reads thus:

WHEREFORE in view of the foregoing, the appeal of petitioner, National

Federation of Labor is hereby given due course and the Order of the Med-Arbiter
is set aside. Let, therefore a certification election proceed at Soriano Fruits
 Corporation, after a pre-election conference to thresh out the list of eligible
voters, with the following choices:

1. National Federation of Labor (NFL);

2. Associated Labor Unions (ALU).

SO ORDERED. 4

ALU sought a reconsideration of the above-cited decision but to no avail. Hence, the instant
petition for certiorari.

Petitioner alleges that in granting the petition for certification election, the respondent Director
acted with grave abuse of discretion amounting to lack or in excess of jurisdiction in that:

I. THE HONORABLE DIRECTOR MISSED THE LEGAL INTENT OF ARTICLE

257 AS AMENDED BY EXECUTIVE ORDER 111.

II. THE HONORABLE DIRECTOR ERRED IN CLAIMING THAT THE PETITION

IS SUPPORTED BY MORE THAN TWENTY (20%) OF THE RANK AND FILE.

III. THE RATIFICATION OF THE CONCLUDED COLLECTIVE BARGAINING

AGREEMENT RENDERS THE CERTIFICATION ELECTION MOOT AND
ACADEMIC.

This Court finds the petition bereft of merit.

Petitioner hinges its claim on Art. 257 of the Labor Code which provides:

Art. 257. Petitions in unorganized establishments. In any establishment where

there is no certified bargaining agent, the petition for certification election filed by
a legitimate labor organization shall be supported by the written consent of at
least twenty (20%) percent of all the employees in the bargaining unit. Upon
receipt and verification of such petition, the Med-Arbiter shall automatically order
the conduct of a certification election.

But this provision finds no application in the case at bar primarily because it applies to
unorganized establishments. For the said provision to apply, the establishment concerned
must have no certified bargaining agent. This is not the case in the present petition where
there was a collective bargaining agreement entered into by the management of the Soriano
Fruits Corporation and ALU, the petitioner, which was then the bargaining agent. This Court
however, finds that it is Article 256 as amended by Executive Order 111 which must be
considered in the resolution of the present petition. The said article states:

Article 256. 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 sixty (60) 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. (Emphasis supplied)

A review of the records of this case would confirm the fact that the petition for certification
election filed by NFL on August 10, 1987 was well within the prescribed sixty (60) day freedom
period.

Petitioner however maintains that the respondent Director misconstrued the legal intent behind
the above- cited provision and that it should not have been given a literal interpretation.
Petitioner insists further that the light of the members of the bargaining unit to choose which
union should represent them is not an absolute one since a prior hearing must be had to
ascertain the veracity of the allegations contained in the petition.

This argument is untenable.

The provision of Article 256 which provides that the Med-Arbiter shall automatically order an
election is clear and leaves no room for further interpretation. The mere filing of a petition for
certification election within the freedom period is sufficient basis for the respondent Director to
order the holding of a certification election. The fact that NFL did not appear during the
hearings set by the Med-Arbiter is of no moment. As the Solicitor General correctly pointed out,
there is no prohibition on the conduct of hearings by the Med-Arbiter on the competing stands
of the unions. Neither does the law require the same to be held whereby the absence or
presence therefrom of any union representative would affect the petition for certification
election. In fact, it is the denial of the petition for certification election grounded solely on the
absence of NFL in the scheduled hearings which is frowned upon by the law. This is consistent
with the principle in labor legislation that "certification proceedings is not a litigation in the
sense in which the term is ordinarily understood, but an investigation of non-adversary and fact
finding character. As such, it is not bound by technical rules of evidence." 5

Petitioner suggests that to grant the petition for certification election would "open the
floodgates to unbridled and scrupulous (sic) petitions whose only objective is to prejudice the
industrial peace and stability existing in the Company." 6 This Court believes however that the
workers' choice regarding their representative who inevitably reflects and works for their
common interest is of paramount importance. This policy was lengthily explained in the
concurring opinion of then Chief Justice Fernando in the case of Confederation of Citizens
Labor Unions (CCLU) vs. National Labor Relations Commission 7 where he categorically
stated that "the slightest doubt therefore cannot be entertained that what possesses
significance in a petition for certification is that through such a device the employees are given
the opportunity to make known who shall have the right to represent them. What is equally
important is that not only some but all of them should have the right to do so." 8

Petitioner next contends that the respondent Director erred in relying upon the claim of the
respondent Union that the petition for certification election is supported by more than twenty
percent (20%) of the rank and file considering that the said petition merely contained the lone
signature of the NFL representative.

This averment is likewise unmeritorious.

Petitioner bases its argument again on Article 257 which prescribes the twenty percent (20%)
requirement. But it must be reiterated that the said requirement applies only to unorganized
establishments. It is Article 256 instead which must be applied. A perusal of the said Article
would confirm the falsity of the claim of petitioner. Nowhere in the said provision does it require
the written consent of twenty percent (20%) of the employees in the bargaining unit. Hence,
the issue of whether or not the petition for certification election is supported by twenty percent
(20%) of the bargaining unit concerned is immaterial to the case at bar. What is essential is
that the petition was filed during the sixty-day freedom period.

The petition to dismiss the petition for certification elections 9 filed by NFL and signed by some
224 employees signifying their satisfaction with the services of the incumbent union should not
be given any weight at all. The possibility that the workers were merely coerced to sign the
petition such that they did so for fear of reprisal from the members of ALU is not remote.
However, this does not discount the possibility that the workers voluntarily signed the said
petition. Whatever reason the workers may have had for signing the same may be ascertained
once a certification election is held. It is in this democratic process that the workers are given
the opportunity to freely choose, by secret ballot, who they want to represent them. In this
manner, the workers are free of any undue pressure which either competing union may exert
upon them.

Finally, the petitioner assails the decision of the respondent Director on the ground that "the
ratification of the collective bargaining agreement renders the certification election moot and
academic." 10

This contention finds no basis in law.

The petitioner was obviously referring to the contract-bar rule where the law prohibits the
holding of certification elections during the lifetime of the collective bargaining agreement. Said
agreement was hastily and prematurely entered into apparently in an attempt to avoid the
holding of a certification election. The records show that the old collective bargaining
agreement of the petitioner with Soriano Fruits Corporation was to expire on August 31, 1987.
However, three (3) months and eight (8) days before its expiry date, or on June 22, 1987, the
petitioner renewed the same with the consent and collaboration of management. The renewed
agreement was then ratified by the members of the bargaining unit and was thereafter sent to
the Bureau of Labor Relations for certification. In the meantime, on August 10, 1987 (21 days
before the expiration of the old collective bargaining agreement on August 31, 1987) a petition
for certification election was filed by respondent union, NFL. From the foregoing facts, it is
quite obvious that the renewed agreement cannot constitute a bar to the instant petition for
certification election for the very reason that the same was not yet in existence when the
petition for certification election was filed on August 10, 1987 inasmuch as the same was to
take effect only on September 1, 1987, after the old agreement expires on August 31, 1987.

In the case of Associated Trade Unions-ATU vs. Noriel, 11 this Court held that "it is indubitably
clear from the facts heretofore unfolded that management and petitioner herein proceeded with
such indecent haste in renewing their CBA way ahead of the sixty-day freedom period in their
obvious desire to frustrate the will of the rank and file employees in selecting their bargaining
representative. To countenance the actuation of the company and the petitioner herein would
be violative of the employees constitutional right to self-organization. 12

The Solicitor General, in his comment, brought the attention of this Court to the fact that
petitioner had violated the provisions of Article 254 13 when it renewed the collective bargaining
agreement before the commencement of the sixty-day freedom period. This Court does not
subscribe to this view. What the aforecited rule prohibits is the modification and alteration of
the present collective bargaining agreement during its lifetime. In the present case, the
alterations and modifications were to take effect only on September 1, 1987, i.e., after the
expiration of the old agreement. It must be noted that the new agreement did not suspend the
old one. Neither did it terminate nor modify the same. Petitioner therefore did not commit any
violation of Article 254 of the Labor Code, contrary to the allegations of the Solicitor General.

However, it is apparent that certiorari does not lie in the instant petition for this Court does not
see any substantial reason to withhold the primordial right of workers to select their bargaining
representative.

WHEREFORE, premises considered, the instant petition is DISMISSED for lack of merit. The
temporary restraining order issued by resolution of this Court of July 11, 1988 is hereby lifted
and declared to be of no force and effect. The decision is immediately executory. No costs.

SO ORDERED.

Narvasa, Cruz, Grino-Aquino and Medialdea, JJ., concur.

#16.

SECOND DIVISION
[G.R. No. 104556. March 19, 1998]
NATIONAL FEDERATION OF LABOR (NFL), Petitioner,
vs.
THE SECRETARY OF LABOR OF THE REPUBLIC OF THE PHILIPPINES AND HIJO
PLANTATION INC. (HPI), Respondents.

DECISION
MENDOZA, J.:

Petitioner NFL (National Federation of Labor) was chosen the bargaining agent of rank-
and-file employees of the Hijo Plantation Inc. (HPI) in Mandaum, Tagum, Davao del Norte at a
certification election held on August 20, 1989. Protests filed by the company and three other
unions against the results of the election were denied by the Department of Labor and
Employment in its resolution dated February 14, 1991 but, on motion of the company (HPI),
the DOLE reconsidered its resolution and ordered another certification election to be held. The
DOLE subsequently denied petitioner NFLs motion for reconsideration.
The present petition is for certiorari to set aside orders of the Secretary of Labor and
Employment dated August 29, 1991, December 26, 1991 and February 17, 1992, ordering the
holding of a new certification election to be conducted in place of the one held on August 20,
1989 and, for this purpose, reversing its earlier resolution dated February 14, 1991 dismissing
the election protests of private respondent and the unions.
The facts of the case are as follows:
On November 12, 1988, a certification election was conducted among the rank-and-file
employees of the Hijo Plantation, Inc. resulting in the choice of no union. However, on July 3,
1989, on allegations that the company intervened in the election, the Director of the Bureau of
Labor Relations nullified the results of the certification election and ordered a new one to be
held.
The new election was held on August 20, 1989 under the supervision of the DOLE
Regional Office in Davao City with the following results:

Total Votes cast --------------------------- 1,012

Associated Trade Unions (ATU) ------- 39

TRUST KILUSAN ----------------------- 5

National Federation of Labor (NFL)---- 876

Southern Philippines Federation

of Labor ------------------------------------ 4

SANDIGAN ------------------------------- 6

UFW ---------------------------------------- 15

No Union ----------------------------------- 55

Invalid -------------------------------------- 13
 The Trust Union Society and Trade Workers-KILUSAN (TRUST-Kilusan), the United
Lumber and General Workers of the Philippines (ULGWP), the Hijo Labor Union and the Hijo
Plantation, Inc. sought the nullification of the results of the certification election on the ground
that it was conducted despite the pendency of the appeals filed by Hijo Labor Union and
ULGWP from the order, dated August 17, 1989, of the Med-Arbiter denying their motion for
intervention. On the other hand, HPI claimed that it was not informed or properly represented
at the pre-election conference. It alleged that, if it was represented at all in the pre-election
conference, its representative acted beyond his authority and without its knowledge. Private
respondent also alleged that the certification election was marred by massive fraud and
irregularities and that out of 1,692 eligible voters, 913, representing 54% of the rank-and-file
workers of private respondent, were not able to vote, resulting in a failure of election.
On January 10, 1990, Acting Labor Secretary Dionisio dela Serna directed the Med-
Arbiter, Phibun D. Pura, to investigate the companys claim that 54% of the rank-and-file
workers were not able to vote in the certification election.
In his Report and Recommendation, dated February 9, 1990, Pura stated:
1. A majority of the rank-and-file workers had been disfranchised in the election of August
20, 1989 because of confusion caused by the announcement of the company that the election
had been postponed in view of the appeals of ULGWP and Hijo Labor Union (HLU) from the
order denying their motions for intervention. In addition, the election was held on a Sunday
which was a non-working day in the company.
2. There were irregularities committed in the conduct of the election. It was possible that
some people could have voted for those who did not show up. The election was conducted in
an open and hot area. The secrecy of the ballot had been violated. Management
representatives were not around to identify the workers.
3. The total number of votes cast, as duly certified by the representation officer, did not
tally with the 41-page listings submitted to the Med-Arbitration Unit. The list contained 1,008
names which were checked or encircled (indicating that they had voted) and 784 which were
not, (indicating that they did not vote), or a total of 1,792, but according to the representation
officer the total votes cast in the election was 1,012.
Med-Arbiter Pura reported that he interviewed eleven employees who claimed that they
were not able to vote and who were surprised to know that their names had been checked to
indicate that they had voted.
But NFL wrote a letter to Labor Secretary Ruben Torres complaining that it had not been
informed of the investigation conducted by Med-Arbiter Pura and so was not heard on its
evidence. For this reason, the Med-Arbiter was directed by the Labor Secretary to hear
interested parties.
The Med-Arbiter therefore summoned the unions. TRUST-Kilusan reiterated its petition for
the annulment of the results of the certification election. Hijo Labor Union manifested that it
was joining private respondent HPIs appeal, adopting as its own the documentary evidence
presented by the company, showing fraud in the election of August 20, 1989. On the other
hand, petitioner NFL reiterated its contention that management had no legal personality to file
an appeal because it was not a party to the election but was only a bystander which did not
even extend assistance in the election. Petitioner denied that private respondent HPI was not
represented in the pre-election conference, because the truth was that a certain Bartolo was
present on behalf of the management and he in fact furnished the DOLE copies of the list of
employees, and posted in the company premises notices of the certification election.
Petitioner NFL insisted that more than majority of the workers voted in the election. It
claimed that out of 1,692 qualified voters, 1,012 actually voted and only 680 failed to cast their
vote. It charged management with resorting to all kinds of manipulation to frustrate the election
and make the Non Union win.
In a resolution dated February 14, 1991, the DOLE upheld the August 20, 1989
certification election. With respect to claim that election could not be held in view of the
pendency of the appeals of the ULGWP and Hijo Labor Union from the order of the Med-
Arbiter denying their motions for intervention, the DOLE said: [1]

. . . even before the conduct of the certification election on 12 November 1988 which was
nullified, Hijo Labor Union filed a motion for interventions. The same was however, denied for
being filed unseasonably, and as a result it was not included as one of the choices in the said
election. After it has been so disqualified thru an order which has become final and executory,
ALU filed a second motion for intervention when a second balloting was ordered
conducted. Clearly, said second motion is proforma and intended to delay the
proceedings. Being so, its appeal from the order of denial did not stay the election and the
Med-Arbiter was correct and did not violate any rule when he proceeded with the election even
with the appeal. In fact, the Med-Arbiter need not rule on the motion as it has already been
disposed of with finality.

The same is true with the motion for intervention of ULGWP. The latter withdrew as a party to
the election on September 1988 and its motion to withdraw was granted by the Med-Arbiter on
October 27, 1988. After such withdrawal, it cannot revive its lost personality as a party to the
present case through the mere expedience of a motion for intervention filed before the conduct
of a second balloting where the choices has already been pre-determined.

Let it be stressed that ULGWP and HLU were disqualified to participate in the election through
valid orders that have become final and executory even before the first certification election
was conducted. Consequently, they may not be allowed to disrupt the proceeding through the
filing of nuisance motions. Much less are they possessed of the legal standing to question the
results of the second election considering that they are not parties thereto.

The DOLE gave no weight to the report of the Med-Arbiter that the certification election
was marred by massive fraud and irregularities. Although affidavits were submitted showing
that the election was held outside the company premises and private vehicles were used as
makeshift precincts, the DOLE found that this was because respondent company did not allow
the use of its premises for the purpose of holding the election, company guards were allegedly
instructed not to allow parties, voters and DOLE representation officers to enter the company
premises, and notice was posted on the door of the company that the election had been
postponed.
Nor was weight given to the findings of the Med-Arbiter that a majority of the rank-and-file
workers had been disfranchised in the August 20, 1989 election and that the secrecy of the
ballot had been violated, first, because the NFL was not given notice of the investigation nor
the chance to present its evidence to dispute this finding and, second, the Med Arbiters report
was not supported by the minutes of the proceedings nor by any record of the interviews of the
315 workers. Moreover, it was pointed out that the report did not state the names of the
persons investigated, the questions asked and the answers given. The DOLE held that the
report was totally baseless.
The resolution of February 14, 1991 concluded with a reiteration of the rule that the choice
of the exclusive bargaining representative is the sole concern of the workers. It said: If indeed
there were irregularities committed during the election, the contending unions should have
been the first to complain considering that they are the ones which have interest that should be
protected.[2]
Accordingly, the Labor Secretary denied the petition to annul the election filed by the
ULGWP, TRUST-KILUSAN, HLU and the HPI and instead certified petitioner NFL as the sole
and exclusive bargaining representative of the rank-and-file employees of private respondent
HPI.
However, on motion of HPI, the Secretary of Labor, on August 29, 1991, reversed his
resolution of February 14, 1991. Petitioner NFL filed a motion for reconsideration but its motion
was denied in an order, dated December 26, 1991. Petitioners second motion for
reconsideration was likewise denied in another order dated February 17, 1992. Hence, this
petition.
First. Petitioner contends that certification election is the sole concern of the employees
and the employer is a mere bystander. The only instance wherein the employer may actively
participate is when it files a petition for certification election under Art. 258 of the Labor Code
because it is requested to bargain collectively. Petitioner says that this is not the case here and
so the DOLE should not have given due course to private respondents petition for annulment
of the results of the certification election.
In his resolution of August 29, 1991, the Secretary of Labor said he was reversing his
earlier resolution because workers of Hijo Plantation, Inc. have deluged this Office with their
letter-appeal, either made singly or collectively expressing their wish to have a new certification
election conducted and that as a result the firm position we held regarding the integrity of the
electoral exercise had been somewhat eroded by this recent declaration of the workers, now
speaking in their sovereign capacity.
It is clear from this, that what the DOLE Secretary considered in reversing its earlier rulings
was not the petition of the employer but the letter-appeals that the employees sent to his office
denouncing the irregularities committed during the August 20, 1989 certification election. The
petition of private respondent was simply the occasion for the employees to voice their protests
against the election. Private respondent HPI attached to its Supplemental Appeal filed on
September 5, 1989 the affidavits and appeals of more or less 784 employees who claimed that
they had been disfranchised, as a result of which they were not able to cast their votes at the
August 20, 1989 election. It was the protests of employees which moved the DOLE to
reconsider its previous resolution of February 14, 1991, upholding the election.
Nor is it improper for private respondent to show interest in the conduct of the
election. Private respondent is the employer. The manner in which the election was held could
make the difference between industrial strife and industrial harmony in the company. What an
employer is prohibited from doing is to interfere with the conduct of the certification election for
the purpose of influencing its outcome. But certainly an employer has an abiding interest in
seeing to it that the election is clean, peaceful, orderly and credible.
Second. The petitioner argues that any protest concerning the election should be
registered and entered into the minutes of the election proceedings before it can be
considered. In addition, the protest should be formalized by filing it within five (5) days.
Petitioner avers that these requirements are condition precedents in the filing of an appeal.
Without these requisites the appeal cannot prosper. It cites the following provisions of Book V,
Rule VI of the Implementing Rules and Regulations of the Labor Code:

SECTION 3. Representation officer may rule on any on-the-spot questions. - The

Representation officer may rule on any on-the-spot question arising from the conduct of the
election. The interested party may however, file a protest with the representation officer before
the close of the proceedings.

Protests not so raised are deemed waived. Such protests shall be contained in the minutes of
the proceedings.

SEC. 4. Protest to be decided in twenty (20) working days. - Where the protest is formalized
before the med-arbiter within five (5) days after the close of the election proceedings, the med-
arbiter shall decide the same within twenty (20) working days from the date of its
formalization. If not formalized within the prescribed period, the protest shall be deemed
dropped. The decision may be appealed to the Bureau in the same manner and on the same
grounds as provided under Rule V.

In this case, petitioner maintains that private respondent did not make any protest
regarding the alleged irregularities (e.g., massive disfranchisement of employees) during the
election.Hence, the appeal and motions for reconsideration of private respondent HPI should
have been dismissed summarily.
The complaint in this case was that a number of employees were not able to cast their
votes because they were not properly notified of the date. They could not therefore have filed
their protests within five (5) days. At all events, the Solicitor General states, that the protests
were not filed within five (5) days, is a mere technicality which should not be allowed to prevail
over the workers welfare.[3] As this Court stressed in LVN Pictures, Inc. v. Phil. Musicians
Guild,[4] it is essential that the employees must be accorded an opportunity to freely and
intelligently determine which labor organization shall act in their behalf. The workers in this
case were denied this opportunity. Not only were a substantial number of them disfranchised,
there were, in addition, allegations of fraud and other irregularities which put in question the
integrity of the election. Workers wrote letters and made complaints protesting the conduct of
the election. The Report of Med-Arbiter Pura who investigated these allegations found the
allegations of fraud and irregularities to be true.
In one case this Court invalidated a certification election upon a showing of
disfranchisement, lack of secrecy in the voting and bribery. [5] We hold the same in this
case. The workers right to self-organization as enshrined in both the Constitution and Labor
Code would be rendered nugatory if their right to choose their collective bargaining
representative were denied.Indeed, the policy of the Labor Code favors the holding of a
certification election as the most conclusive way of choosing the labor organization to
represent workers in a collective bargaining unit.[6] In case of doubt, the doubt should be
resolved in favor of the holding of a certification election.
Third. Petitioner claims that the contending unions, namely, the Association of Trade Union
(ATU), the Union of Filipino Workers (UFW), as well as the representation officers of the DOLE
affirmed the regularity of the conduct of the election and they are now estopped from
questioning the election.
In its comment, ATU-TUCP states,

. . . The representative of the Association of Trade Unions really attest to the fact that we
cannot really identify all the voters who voted on that election except some workers who were
our supporters in the absence of Hijo Plantation representatives. We also attest that the polling
precinct were not conducive to secrecy of the voters since it was conducted outside of the
Company premises. The precincts were (sic) the election was held were located in a
passenger waiting shed infront of the canteen across the road; on the yellow pick-up; at the
back of a car; a waiting shed near the Guard House and a waiting shed infront of the Guard
House across the road. Herein private respondents also observed during the election that
there were voters who dictated some voters the phrase number 3 to those who were casting
their votes and those who were about to vote. Number 3 refers to the National Federation of
Labor in the official ballot.

ATU-TUCP explains that it did not file any protest because it expected workers who had
been aggrieved by the conduct of the election would file their protest since it was in their
interests that they do so.
Fourth. Petitioner points out that the letter-appeals were written almost two years after the
election and they bear the same dates (May 7 and June 14, 1991); they are not verified; they
do not contain details or evidence of intelligent acts; and they do not explain why the writers
failed to vote. Petitioner contends that the letter-appeals were obtained through duress by the
company.
We find the allegations to be without merit. The record shows that as early as August 22
and 30, 1989, employees already wrote letters/affidavits/manifestoes alleging irregularities in
the elections and disfranchisement of workers.[7] As the Solicitor General says in his
Comment,[8] these affidavits and manifestoes, which were attached as Annexes A to CC and
Annexes DD to DD-33 to private respondents Supplemental Petition of September 5, 1989 just
16 days after the August 20, 1989 election. It is not true therefore that the employees slept on
their rights.
As to the claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates
because they were prepared by private respondent HPI and employees were merely asked to
sign them, suffice it to say that this is plain speculation which petitioner has not proven by
competent evidence.
As to the letters not being verified, suffice it to say that technical rules of evidence are not
binding in labor cases.
The allegation that the letters did not contain evidence of intelligent acts does not have
merit. The earlier letters[9] of the workers already gave details of what they had witnessed
during the election, namely the open balloting (with no secrecy), and the use of NFL vehicles
for polling precincts. These letters sufficiently give an idea of the irregularities of the
certification election. Similarly, the letters containing the signatures of those who were not able
to vote are sufficient. They indicate that the writers were not able to vote because they thought
the election had been postponed, especially given the fact that the two unions had pending
appeals at the time from orders denying them the right to intervene in the election.
WHEREFORE, the petition for certiorari is DISMISSED and the questioned orders of the
Secretary of Labor and Employment are AFFIRMED.
SO ORDERED.
Regalado,(Chairman), Melo, Puno, and Martinez, JJ, concur.
#17.

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 Med-Arbiter should,
pursuant to Article 257 of the Labor Code and Section 11, Rule XI of DOLE Department Order
No. 09, automatically order the conduct of a certification election.
By Order of January 28, 1998, [8] DOLE Med-Arbiter Anastacio Bactin ordered the holding
of a certification election among the rank-and-file employees of THIGCI in this wise,
quoted verbatim:

We evaluated carefully this instant petition and we are of the opinion that it is complete in
form and substance. In addition thereto, the accompanying documents show that indeed
petitioner union is a legitimate labor federation and its local/chapter was duly reported
to this Office as one of its affiliate local/chapter. Its due reporting through the submission
of all the requirements for registration of a local/chapter is a clear showing that it was
already included in the roster of legitimate labor organizations in this Office pursuant to
Department Order No. 9 Series of 1997 with all the legal right and personality to institute
this instant petition. Pursuant therefore to the provisions of Article 257 of the Labor Code, as
amended, and its Implementing Rules as amended by Department Order No. 9, since the
respondents establishment is unorganized, the holding of a certification election is
mandatory for it was clearly established that petitioner is a legitimate labor
organization. Giving due course to this petition is therefore proper and
appropriate. (Emphasis supplied)
[9]

Passing on THIGCIs allegation that some of the union members are supervisory, resigned
and AWOL employees or employees of a separate and distinct corporation, the Med-Arbiter
held that the same should be properly raised in the exclusion-inclusion proceedings at the pre-
election conference. As for the allegation that some of the signatures were secured through
fraudulent and deceitful means, he held that it should be coursed through an independent
petition for cancellation of union registration which is within the jurisdiction of the DOLE
Regional Director. In any event, the Med-Arbiter held that THIGCI failed to submit the job
descriptions of the questioned employees and other supporting documents to bolster
its claim that they are disqualified from joining THEU.
THIGCI appealed to the Office of the DOLE Secretary which, by Resolution of June 4,
1998, set aside the said Med-Arbiters Order and accordingly dismissed the petition for
certification election on the ground that there is a clear absence of community or mutuality of
interests, it finding that THEU sought to represent two separate bargaining units (supervisory
employees and rank-and-file employees) as well as employees of two separate and distinct
corporate entities.
Upon Motion for Reconsideration by THEU, DOLE Undersecretary Rosalinda Dimalipis-
Baldoz, by authority of the DOLE Secretary, issued DOLE Resolution of November 12,
1998[10]setting aside the June 4, 1998 Resolution dismissing the petition for certification
election. In the November 12, 1998 Resolution, Undersecretary Dimapilis-Baldoz held that
since THEU is a local chapter, the twenty percent (20%) membership requirement is not
necessary for it to acquire legitimate status, hence, the alleged retraction and withdrawal of
support by 45 of the 70 remaining rank-and-file members . . . cannot negate the legitimacy it
has already acquired before the petition; that rather than disregard the legitimate status
already conferred on THEU by the Bureau of Labor Relations, the names of alleged
disqualified supervisory employees and employees of the Country Club, Inc., a separate and
distinct corporation, should simply be removed from the THEUs roster of membership; and that
regarding the participation of alleged resigned and AWOL employees and those whose
signatures are illegible, the issue can be resolved during the inclusion-exclusion proceedings
at the pre-election stage.
The records of the case were thus ordered remanded to the Office of the Med-Arbiter for
the conduct of certification election.
THIGCIs Motion for Reconsideration of the November 12, 1998 Resolution having been
denied by the DOLE Undersecretary by Resolution of December 29, 1998,[11] it filed a petition
for certiorari before this Court which, by Resolution of April 14, 1999, [12] referred it to the Court
of Appeals in line with its pronouncement in National Federation of Labor (NFL) v. Hon.
Bienvenido E. Laguesma, et al.,[13] and in strict observance of the hierarchy of courts, as
emphasized in the case of St. Martin Funeral Home v. National Labor Relations Commission.[14]
By Decision of February 15, 2000,[15] the Court of Appeals denied THIGCIs Petition for
Certiorari and affirmed the DOLE Resolution dated November 12, 1998. It held that while a
petition for certification election is an exception to the innocent bystander rule, hence, the
employer may pray for the dismissal of such petition on the basis of lack of mutuality of
interests of the members of the union as well as lack of employer-employee relationship
following this Courts ruling in Toyota Motor Philippines Corporation v. Toyota Motor Philippines
Corporation Labor Union et al[16] and Dunlop Slazenger [Phils.] v. Hon. Secretary of Labor and
Employment et al,[17] petitioner failed to adduce substantial evidence to support its
allegations.
Hence, the present petition for certiorari, raising the following

ISSUES/ASSIGNMENT OF ERRORS:

THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE

RESOLUTION DATED 12 NOVEMER 1998 HOLDING THAT SUPERVISORY
EMPLOYEES AND NON-EMPLOYEES 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 vice-versa.
Citing Toyota[19] which held that a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all, and the subsequent case of Progressive
Development Corp. Pizza Hut v. Ledesma[20] which held that:

The Labor Code requires that in organized and unorganized establishments, a petition for
certification election must be filed by a legitimate labor organization. The acquisition of
rights by any union or labor organization, particularly the right to file a petition for
certification election, first and foremost, 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, (Underscoring
[21]

and emphasis supplied),

petitioner contends that, quoting Toyota, [i]t becomes necessary . . ., anterior to the
granting of an order allowing a certification election, to inquire into the composition of any labor
organization whenever the status of the labor organization is challenged on the basis of Article
245 of the Labor Code.[22]
Continuing, petitioner argues that without resolving the status of THEU, the DOLE
Undersecretary conveniently deferred the resolution on the serious infirmity in the membership
of [THEU] and ordered the holding of the certification election which is frowned upon as the
following ruling of this Court shows:

We also do not agree with the ruling of the respondent Secretary of Labor that the infirmity
in the membership of the respondent union can be remedied in the pre-election
conference thru the exclusion-inclusion proceedings wherein those employees who are
occupying rank-and-file positions will be excluded from the list of eligible voters. Public
respondent gravely misappreciated the basic antipathy between the interest of supervisors
and the interest of rank-and-file employees. Due to the irreconcilability of their interest we
held in Toyota Motor Philippines v. Toyota Motors Philippines Corporation Labor Union,
viz:

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-and-file employees should
in every possible instance be determined by secret ballot rather than by administrative or
quasi-judicial inquiry. Such representation and certification election cases are not to be taken
as contentious litigations for suits but as mere investigations of a non-adversary, fact-finding
character as to which of the competing unions represents the genuine choice of the workers
to be their sole and exclusive collective bargaining representative with their employer. [23]

As for the lack of mutuality of interest argument of petitioner, it, at all events, does not lie
given, as found by the court a quo, its failure to present substantial evidence that the assailed
employees are actually occupying supervisory positions.
While petitioner submitted a list of its employees with their corresponding job titles and
ranks,[24] there is nothing mentioned about the supervisors respective duties, powers and
prerogatives that would show that they can effectively recommend managerial actions which
require the use of independent judgment.[25]
As this Court put it in Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor:[26]

Designation should be reconciled with the actual job description of subject employees x x x
The mere fact that an employee is designated manager does not necessarily make him
one. Otherwise, there would be an absurd situation where one can be given the title just to be
deprived of the right to be a member of a union. In the case of National Steel Corporation vs.
Laguesma (G. R. No. 103743, January 29, 1996), it was stressed that:

What is essential is the nature of the employees function and not the nomenclature or
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 pre-election conference.
SO ORDERED.
#18.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-44350 November 25, 1976

U.E. AUTOMOTIVE EMPLOYEES AND WORKERS UNION-TRADE UNIONS OF THE

PHILIPPINES AND ALLIED SERVICES, petitioners,
vs.
CARMELO C. NORIEL, PHILIPPINE FEDERATION OF LABOR, AND U. E. AUTOMOTIVE
MANUFACTURING CO., INC., respondents.

Tupaz & Associates for petitioners.

Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor General Reynato S. Puno and Trial
Attorney Joselito B. Floro for respondent Carmelo C. Noriel.

Alejandro C. Villaviza for respondent Phil. Federation of Labor.

Poblador, Nazareno, Azada, Tomacruz & Paredes for respondent Company.

FERNANDO, J.:

It is a notable feature of our Constitution that freedom of association is explicitly ordained; 1 it is

not merely derivative, peripheral or penumbral, as is the case in the United States. 2 It can
trace its origin to the Malolos Constitution. 3 More specifically, where it concerns the expanded
rights of labor under the present Charter, it is categorically made an obligation of the State to
assure full enjoyment "of workers to self-organization [and] collective bargaining." 4 It would be
to show less than full respect to the above mandates of the fundamental law, considering that
petitioner union obtained the requisite majority at a fair and honest election, if it would not be
recognized as the sole bargaining agent. The objection by respondent Director finds no
support in the wording of the law. To sustain it, however, even on the assumption that it has
merit, just because when petitioner asked for a certification election, there was lacking the
three-day period under the Industrial Peace Act then in force 5 for it to be entitled to the rights
and privileges of a labor organization, would be to accord priority to form over substance.
Moreover, it was not denied that respondent Director of Labor Relations on January 2, 1975
certified that it was petitioner which should be "the sole and exclusive bargaining
representative of all rank and file employees and workers of the U.E. Automotive
Manufacturing, Inc." 6 He had no choice as the voting was 59 in favor of petitioner and 52 for
private respondent Union. It would appear evident, therefore, that in the light of the
constitutional provisions set forth above and with the present Labor Code, the challenged order
of February 24, 1975 setting aside such certification and ordering the holding of a new election
did amount to a grave abuse of discretion. That was to run counter to what the law
commands. 7

The facts are undisputed. The comment submitted by respondent Director Carmelo C. Noriel,
through Acting Solicitor General Hugo E. Gutierrez, Jr. and Assistant Solicitor General
Reynato S. Puno, 8 made it clear. There was, on August 15, 1974, a petition for certification
election with the National Labor Relations Commission filed by petitioner. Thereafter, on
August 26, 1974, private respondent Philippine Federation of Labor submitted a motion for
intervention. Three conferences between such labor organizations resulted in an agreement to
hold a consent election actually conducted on September 19, 1974 among the rank and file
workers of respondent management firm. Petitioner obtained fifty-nine votes, with respondent
union having only fifty-two votes in such consent election. There was, on September 19, 1974,
a motion by petitioner to issue an order of certification duly granted on January 2, 1975 by
respondent Director who did certify petitioner as the sole land exclusive collective bargaining
representative of such rank and file employees of respondent firm. There was, however, a
motion for reconsideration which was granted notwithstanding opposition by the union on
January 22, 1975, setting aside the previous order certifying petitioner as the sole bargaining
representative. It is such an order sustaining a motion for reconsideration that resulted in this
petition. 9

The submission of respondent Director to sustain the validity of his order in the comment
submitted on his behalf follows: "Petitioner union is not a legitimate labor organization. Section
2(f) of, Republic Act Number 875 defines a legitimate labor organization as any labor
organization registered by the Department of Labor. Petitioner union is not duly registered with
the Department of Labor. The records of the Labor Registration Division of the Bureau of Labor
Relations, Department of Labor show that the application for registration of petitioner union
was filed therein on July 19, 1974. Petitioner union filed a petition for certification on August
15, 1974 or merely after a period of twenty-seven (27) days. Section 23(b) of Republic Act
Number 875 explicitly provides, thus: 'Any labor organization, association or union of workers
duly organized for the material, intellectual and moral well-being of the members shall acquire
legal personality and be entitled to all the rights and privileges within thirty days of filing with
the Office of the Secretary of Labor notice of its due application 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 (emphasis supplied).' It is clear therefore that the
petition for certification election was filed before the expiration of the period of thirty (30) days.
It is futile therefore for the petitioner to claim that it has already legal personality and is entitled
to all the rights and privileges granted by law to legitimate labor organizations by virtue of
Section 23(b) of Republic Act Number 875." 10 As noted at the outset, such an argument rests
on an infirm and shaky foundation. It definitely runs counter to what this Court has held and
continues to hold in a number of cases in accordance with the constitutional freedom of
association, more specifically, where labor is concerned, to the fundamental rights of self-
organization. Hence the merit in the present petition.

1. There is pertinent to this excerpt from a recent decision, Federacion Obrera de la Industria
Tabaquera v. Noriel: 11"Clearly, what is at stake is the constitutional right to freedom of
association on the part of employees. Petitioner labor union was in the past apparently able to
enlist the allegiance of the working force in the Anglo-American Tobacco Corporation.
Thereafter, a number of such individuals joined private respondent labor union. That is a
matter clearly left to their sole uncontrolled judgment. There is this excerpt from Pan American
World Airways, Inc. v. Pan American Employees Association: 'There is both a constitutional
and statutory recognition that laborers have the right to form unions to take care of their
interests vis-a-vis their employees. Their freedom to form organizations would be rendered
nugatory if they could not choose their own leaders to speak on their behalf and to bargain for
them.' It cannot be otherwise, for the freedom to choose which labor organization to join is an
aspect of the constitutional mandate of protection to labor. Prior to the Industrial Peace Act,
there was a statute setting forth the guideline for the registration of labor unions. As implied
in Manila Hotel Co. v. Court of Industrial Relations, it was enacted pursuant to what is ordained
in the Constitution. Thus in Umali v. Lovina, it was held that mandamus lies to compel the
registration of a labor organization. There is this apt summary of what is signified in Philippine
Land-Air-Sea Labor Union v. Court of Industrial Relations, 'to allow a labor union to organize
itself and acquire a personality distinct and separate from its members and to serve as an
instrumentality to conclude collective bargaining agreements * * *.' It is no coincidence that in
the first decision of this Court citing the Industrial Peace Act, Pambujan United Mine Workers
v. Samar Mining Company, the role of a labor union as the agency for the expression of the
collective will affecting its members both present and prospective, was stressed. That statute
certainly was much more emphatic as to the vital aspect of such a right as expressly set forth
in the policy of the law. What is more, there is in such enactment this categorical provision on
the right of employees 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 of
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. The new
Labor Code is equally explicit on the matter. Thus: 'The State shall assure the rights of workers
of self-organization, collective bargaining, security of tenure and just and humane conditions of
work.'" 12

2. The matter received further elaboration in the Federacion Obrera decision in these words: "It
is thus of the very essence of the regime of industrial democracy sought to be attained through
the collective bargaining process that there be no obstacle to the freedom Identified with the
exercise of the right to self-organization. Labor is to be represented by a union that can
express its collective will. In the event, and this is usually the case, that there is more than one
such group fighting for that privilege, a certification election must be conducted. That is the
teaching of a recent decision under the new Labor Code, United Employees Union of Gelmart
Industries v. Noriel. There is this relevant except: 'The institution of collective bargaining is, to
recall Cox, a prime manifestation of industrial democracy at work. The two parties to the
relationship, labor and management, make their own rules by coming to terms. That is to
govern themselves in matters that really count. As labor, however, is composed of a number of
individuals, it is indispensable that they be represented by a labor organization of their choice.
Thus may be discerned how crucial is a certification election. So our decisions from the earliest
case of PLDT Employees Union v. PLDT Co. Free Telephone Workers Union to the latest,
Philippine Communications, Electronics & Electricity Workers' Federation (PCWF) v. Court of
Industrial Relations, have made clear.' An even later pronouncement in Philippine Association
of Free Labor Unions v. Bureau of Labor Relations, speaks similarly: 'Petitioner thus appears
to be woefully lacking in awareness of the significance of a certification election for the
collective bargaining process. It is the fairest and most effective way of determining which
labor organization can truly represent the working force. It is a fundamental postulate that the
will of the majority, if given expression in an honest election with freedom on the part of the
voters to make their choice, is controlling. No better device can assure the institution of
industrial democracy with the two parties to a business enterprise, management and labor,
establishing a regime of self-rule.' " 13

3. Deference to the above principles so often reiterated in a host of decisions ought to have
exerted a compelling force on respondent Director of Labor Relations. As a matter of fact, that
appeared to be the case. He did certify on January 2, 1975 that petitioner should be "the sole
and exclusive collective bargaining representative of all rank-and-file employees and workers
of the UE Automotive Manufacturing, Inc." 14 The voting, having been 59 in favor of petitioner
and 52 for private respondent Union, had to be respected. Had he stood firm, there would have
been no occasion for the certiorari petition. He did, however, have a change of mind. On
February 24, 1975, he set aside such certification. In his comment, earlier referred to, he would
predicate this turnabout on the Union lacking the three-day period before filing the petition for
certification under the appropriate provision of the Industrial Peace Act then in force. That
could be an explanation, but certainly not a justification. It would amount, to use a phrase
favored by Justice Cardozo, to a stultification of a constitutional right.

4. The excuse offered for the action taken lacks any persuasive force. It may even be looked
upon as insubstantial, not to say flimsy. The law is quite clear; the expression is within thirty
days, not after thirty days. Even if meritorious, however, it can be disregarded under the
maxim de minimis non curat lex. 15 Then, too, the weakness of such a pretext is made
apparent by the well-settled principle in the Philippines that where it concerns the weight to be
accorded to the wishes of the majority as expressed in an election conducted fairly and
honestly, certain provisions that may be considered mandatory before the voting takes place
becomes thereafter merely directory in order that the wishes of the electorate prevail. 16 The
indefensible character of the order of February 24, 1975 setting aside the previous order
certifying to petitioner as the exclusive bargaining representative becomes truly apparent.
5. Nor is the different outcome called for just because at the time of the challenged order, there
was as yet no registration of petitioner Union. If at all, that is a circumstance far from flattering
as far as the Bureau of Labor Relations is concerned. It must be remembered that as admitted
in the comment of respondent Director, the application for registration was filed on July 19,
1974. The challenged order was issued seven months later. There is no allegation that such
application suffered from any infirmity. Moreover, if such were the case, the attention of
petitioner should have been called so that it could be corrected. Only thus may the right to
association be accorded full respect. As far back as Umali v. Lovina, 17 a 1950 decision, it was
held by this Court that under appropriate circumstances, mandamus lies to compel registration.
There is, in addition, a letter signed by a certain Jesus C. Cuenca, who Identified himself as
the Acting Registrar of Labor Organizations, stating that this

Office "has taken due note of your letter of July 25, 1974 informing us that this union has been
accepted by the Federation as local chapter No. 580." 18 When it is taken into consideration
that the Bureau of Labor Relations itself had allowed another labor union not registered but
affiliated with the same Federation to be entitled to the rights of a duly certified labor
organization, there would appear clearly an element of arbitrariness in the actuation of
respondent Director. 19 It is likewise impressed with a character of a denial of equal protection.
Lastly, this Court, in Nationalists Party v. Bautista, 20 where one of the defenses raised is lack
of capacity of petitioner as a juridical person entitled to institute proceedings, after holding that
it was entitled to the remedy of prohibition sought, allowed it either to amend its petition so as
to substitute a juridical person, or to show that it is entitled to institute such proceeding. So it
should be in this Case. In the absence of any fatal defect to the application for registration,
there is no justification for withholding it from petitioner to enable it to exercise fully its
constitutional right to freedom of association. In the alternative, the petition could very well be
considered as having been filed by the parent labor federation. What is decisive is that the
members of petitioner Union did exercise their fundamental right to self-organization and did
win in a fair and honest election.

WHEREFORE, the writ of prohibition is granted, the challenged order of February 24, 1975
setting aside the certification is nullified and declared void, and the previous order of January
2, 1975 certifying to petitioner Union as the "sole and exclusive collective bargaining
representative of all rank and file employees and workers of the U.E. Automotive
Manufacturing Company, Inc.," declared valid and binding. Whatever other rights petitioner
Union may have under the present Labor Code should likewise be accorded recognition by
respondent Director of the Bureau of Labor Relations. This decision is immediately executory.
No costs.

Barredo, Antonio, Aquino and Concepcion, Jr., JJ., concur.

#19.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G. R. No. L-53406 December 14, 1981

NATIONAL UNION OF BANK EMPLOYEES, petitioner,

vs.
THE HONORABLE MINISTER OF LABOR, THE HONORABLE DEPUTY MINISTER OF
LABOR, THE HONORABLE DIRECTOR OF THE BUREAU OF LABOR RELATIONS,
PRODUCERS BANK OF THE PHILIPPINES, respondents.

MAKASIAR, J.:

This is a petition for mandamus filed by petitioner Union to compel public respondents to
conduct a certification election among the rank and file employees of the respondent employer
in Case No. LRD-M-8-360-79 or in the alternative, to require the respondent Minister of Labor
or his Deputy to act on private respondent's "Appeal" and on petitioner's "Motion to Dismiss
with Motion to Execute."

It appears that on August 17, 1979, petitioner Union filed a petition to be directly certified as
collective bargaining agent of the rank and file employees of private respondent corporation
(Annex "A"; p. 26, rec.).

On September 7, 1979, the date of the hearing, private respondent was required to submit on
October 5, 1979 a payroll of employees as of July 31, 1979. On the same date, in a
handwritten manifestation, respondent employer through counsel, agreed that as soon as the
registration certificate of the local union was issued by the Ministry of Labor and that it was
shown that the local union represents the majority of the rank and file, the Bank would
recognize the said union and would negotiate accordingly (Annex "B" p. 27, rec.).

On October 5, 1979, the above said registration certificate of the local union [Certificate No.
9352-LC, issued by the Ministry of Labor] was secured. On October 15, 1979, petitioner filed a
Manifestation and Urgent Motion to Decide and submitted a copy of the Registration Certificate
of the local union and union membership application of 183 members out of more or less 259
rank and file employees of employer Bank, authorizing the National Union of Bank Employees
(NUBE) [herein petitioner] to represent them "as their sole and exclusive collective bargaining
agent in all matters relating to salary rates, hours of work and other terms and conditions of
employment in the Producers Bank of the Philippines" (p. 38, rec.). Nonetheless, respondent
corporation failed to submit the required payroll and the list of rank and file workers based on
said payroll.

On October 18, 1979, Med-Arbiter Climaco G. Plagata issued an order directing the holding of
a certification election, the dispositive portion of which reads:

WHEREFORE, premises considered, a certification election is hereby ordered

held, conducted, and supervised by representation officers of this office within 20
days from receipt hereof. The same representation officers shall conduct pre-
election conferences in order to thresh out the mechanics and other minor details
of this election including the inclusion and exclusion proceedings to determine
 the qualified electors in this election. The choice shall be either YES, for
Petitioner, or No, for NO UNION DESIRED.

SO ORDERED (Annex "C", pp. 28-29, rec.).

On October 19, 1979, respondent corporation filed a motion to suspend further proceedings in
view of an allegedly prejudicial issue consisting of a pending proceeding for cancellation of the
registration of petitioning union for allegedly engaging in prohibited and unlawful activities in
violation of the laws (Annex "D" pp. 30-32, rec.).

On October 23, 1979, by agreement of the parties, respondent then Deputy Minister of Labor
Amado Inciong, acting for the Minister of Labor, assumed jurisdiction over the certification
election case and the application for clearance to terminate the services of thirteen (13) union
officers by private respondent corporation. Thus, an order was issued on the same date which
reads:

On October 23, 1979 the parties entered into an agreement that the Office of the
Ministry of Labor shall assume jurisdiction over the following disputes under P.D.
No. 823 in the interest of speedy labor justice and industrial peace:

1. certification election case; and

2. application for clearance to terminate thirteen (13) employees

with preventive suspension.

(Agreement, October 23, 1979).

Accordingly, the Deputy Minister deputized Atty. Luna C. Piezas, Chief of the
Med- Arbiter Section, National Capital Region, to conduct summary
investigations for the purpose of determining the definition of the appropriate
bargaining unit sought to be represented by the petitioning union as wen as
compliance with the 30% mandatory written consent in support of the petition
under the bargaining unit as shall have been defined.

On the application for clearance to terminate with preventive suspension, this

Office deems it necessary, for the mutual protection of each party's interest and
to assure continuance of the exercise of their respective rights within legal limits,
to lift the imposition of preventive suspension on the subject employees. The
lifting of the preventive suspension shall include Messrs. Castro and Sumibcay
who are presently on leave of absence with pay in pursuance of the agreement
reached at the level of the Regional Director. Further, should the two (2)
employees' leave credits be exhausted, they are to go on leave without pay, but
this shall not be construed as done in pursuance of the preventive suspension.

Finally, the lifting of the preventive suspension shall be without prejudice to the
continuance of the hearing on the application for clearance involving the thirteen
(13) employees the determination of the merits of which shall be disposed of at
the Regional level (Annex "E", pp. 33-34, rec.).

Hence, Med-Arbiter Luna Piezas conducted hearings but withdrew, in view of the alleged utter
disrespect for authority, gross bad faith, malicious refusal to appreciate effective, prompt and
honest service and resorting in malicious and deliberate lying in dealing with Ministry of Labor
officials by a certain Mr. Jun Umali, spokesman of the Producers' Bank Employees
Association. The case was then transferred to Med-Arbiter Alberto Abis on November 7, 1979
(Annex " F ", p. 35, rec.).
During the hearing on November 9, 1979, respondent Bank failed to submit a list of rank and
file employees proposed to be excluded from the bargaining unit. Respondent Bank's counsel
however, in a verbal manifestation pressed for the exclusion of the following personnel from
the bargaining unit:

1. Secretaries;

2. Staff of Personnel Department;

3. Drivers;

4. Telephone Operators;

5. Accounting Department;

6. Credit Investigators;

7. Collectors;

8. Messengers;

9. Auditing Department Personnel;

10. Signature Verifiers;

11. Legal Department Personnel;

12. Loan Security Custodians; and

13. Trust Department Personnel.

On November 19, 1979, Med-Arbiter Alberto Abis Jr. ordered the holding of certification
election among the rank and file employees but sustained the stand of respondent company as
to the exclusion of certain employees. Thus, the pertinent portion of said order reads:

After a careful perusal of the records, evaluation of the evidence on hand and
consideration of the positions taken by the parties, we find and so hold that
Petitioner-Union has substantially complied with the mandatory and jurisdictional
requirement of 30% subscription of all the employees in the bargaining unit as
prescribed by Section 2, Rule 5, Book V of the Rules and Regulations
Implementing the Labor Code. Submission by the Petitioner during the hearing of
copies of the application and membership forms of its members wherein they
have duly authorized Petitioner 'as their sole and exclusive collective bargaining
agent constitutes substantial compliance of the mandatory and jurisdictional 30%
subscription requirement, it appearing from the records that out of the 264 total
rank and file employees, 188 are union members who have so authorized
Petitioner to represent.

With respect to respondent bank's motion to suspend the proceedings in the

instant case pending resolution of the cancellation proceedings now pending in
the Bureau of Labor Relations, we find that the same is not tenable in the
absence of a restraining order.

In consideration of the agreement of the parties, it is hereby ordered that the

scope or coverage of the appropriate bargaining unit should include the Head
Office of the Producers Bank of the Philippines and all its branch offices and shall
comprise of an the regular rank and file employees of the bank. Excluded are all
 managerial and supervisory employees, probationary, contractual and casual
employees and security guards. It is further ordered that by virtue and in
consonance with industry practice as revealed by the CBAs of 18 banks
submitted by Petitioner-Union, the following positions should likewise be
excluded from the bargaining unit; Secretaries of bank officials; employees of the
Personnel Department; EXCEPT Manuel Sumibcay Primi Zamora and Carmelita
Sy; employees of the Accounting Department; employees of the Legal
Department employees of the Trust Department, credit investigators, telephone
operators, and loan security custodians. Signature verifiers, drivers, messengers
and other non-confidential employees included in the bank's list of proposed
exclusions should be allowed to vote, but the votes should be segregated as
challenged. In case a doubt arises as to whether or not the position held by an
employee is confidential in nature, the employee should be allowed to vote, but
his vote should be segregated as challenged .

WHEREFORE, in the light of the foregoing considerations, it is hereby ordered

that a certification election be conducted among the regular rank and file
employees of the Producers Bank of the Philippines (the appropriate bargaining
unit of which is defined above) after the usual pre-election conference called to
formulate the list of qualified voters and discuss the mechanics of the election.

It is further ordered that the election in the bank's branches outside the Metro
Manila area be conducted by the appropriate Regional Offices of the Ministry of
Labor having jurisdiction over them.

SO ORDERED (pp. 5-7, Annex "G"; pp. 41-43, rec.; emphasis supplied).

On November 29, 1979, petitioner filed a partial appeal to the Director of Bureau of Labor
Relations questioning the exclusions made by Med-Arbiter Abis of those employees who are
not among those expressly enumerated under the law to be excluded. It vigorously urged the
inclusion of the rest of the employees which is allegedly the usual practice in the banking
industry. It likewise urged the holding of a certification election allowing all those excluded by
Med-Arbiter Abis to vote but segregating their votes as challenged in the meantime. Hence, it
averred:

It is in the position of the petitioner that notwithstanding the statements above

that the petition for certification should be held immediately by allowing all those
not excluded from Arbiter Abis' order to vote without prejudice to a final decision
on the matters subject of these appeal. Which we also submit that in order to
expedite the proceedings these exclusions should also be allowed to vote even
pending resolution of the appeal but segregating them for further consideration
(pp. 3-4, Annex "H"; p. 46- 47, rec.).

On December 4, 1979, respondent bank likewise appealed from the aforesaid November 19,
1979 order of Med-Arbiter Alberto Abis, Jr. to the Minister of Labor on the following grounds:

(1) that the act of Med-Arbiter Abis in issuing the abovesaid Order is ultra vires,
full and complete jurisdiction over the questioned petition being vested in the
office of the Minister of Labor and hence the only adjudicative body empowered
to resolve the petition;

(2) that the fact that petitioner's Union registration was subject of cancellation
proceedings with the Bureau of Labor Relations rendered the issuance of the
abovequestioned Order directing the holding of a certification election premature;
and
 (3) that the bargaining unit was not appropriately defined [Annex " I " pp. 49-57,
rec.].

On December 7, 1979, the entire records of the case were allegedly elevated as an appealed
case by Regional Director Francisco L. Estrella to the Director of the Bureau of Labor
Relations and was docketed thereat as appealed case No. A-1599-79.

On January 21, 1980, the Union of Producers Bank Employees Chapter-NATU filed a motion
to intervene in the said petition for certification election alleging among other things that it has
also some signed up members in the respondent Bank and consequently has an interest in the
petition for certification election filed by petitioner as it will directly affect their rights as to who
will represent the employees in the collective bargaining negotiations (Annex "P"; pp. 100-101,
rec.).

On January 24, 1980, the Bureau of Labor Relations Director Carmelo C. Noriel rendered a
decision affirming the Med-Arbiter's order with certain modifications, the pertinent portion of
which reads:

Preliminarily, the issue of jurisdiction is being raised by respondent bank but we

need not be drawn into nor tarry in this issue but instead proceed to consider the
merits of the case. Suffice it rather to say that the appealed order was signed by
the med-arbiter a quo and the records of the case were elevated on appeal to
this Bureau by the Regional Director of the National Capital Region. Besides
respondent should not unduly press the jurisdictional issue. Such question does
not lead nor contribute to the resolution of the real pressing issue—the
certification election issue. What is at stake here is the right of the employees to
organize and be represented for collective bargaining purposes by a union at the
respondent bank where none existed up to the present time. On this
consideration alone, respondent's vigorous objection alleging want of jurisdiction
cracks from tangency of the issue.

xxx xxx xxx

The matter of defining the bargaining unit, that is to say the appropriateness
thereof, usually presents for determination three questions to wit, the general
type of the bargaining unit or whether it should be an industrial unit embracing an
the employees in a broad class or a craft unit that is confined to a small
specialized group within a broad class, the scope of the bargaining unit or
whether it would embrace all employees in a given class at only one plant or at
several plants of an employer, and the specific composition of the bargaining
unit, that is, whether or not the unit should include employees of different
occupational groups, like clerks, inspectors, technical employees, etc. On these
questions, we are not without legal guidelines. The law and the Rules are clear.
The petition for certification election, whether filed by a legitimate labor
organization or by an employer case, shall contain inter alia, the description of
the bargaining unit which shall be the employer unit unless circumstances
otherwise require. Thus, the policy under the Labor Code on the matter of fixing
the bargaining unit is to favor larger units and this is sought to be implemented
on a two-tiered basis. On the lower tier, the law mandates the employer unit as
the normal unit of organization at the company level, thus discouraging if not
stopping fragmentation into small craft or occupational units as what prevailed
prior to the Labor Code. But the Code envisions further consolidation into larger
bargaining units. Thus, on the higher tier, the law mandates the eventual
restructuring of the labor movement along the "one union, one industry" basis.
There should therefore be no doubt as to the law and policy on the fixing of the
appropriate bargaining unit which is generally the employer unit. Applying this
rule to the instant case, the appropriate bargaining unit should embrace all the
regular rank and file employees at the head as well as branch offices of
respondent bank. Of course, the exception to this employer unit rule is when
circumstances otherwise require. But such is not at issue here, respondent not
having adduced circumstances that would justify a contrary composition of the
bargaining unit.

Respondent however insists on the definition of the appropriate bargaining unit

upon the question of whether or not to exclude admittedly regular rank and file
employees which it considers confidential, managerial and technical. This
question, it should be pointed out, does not enter the matter of defining the
bargaining unit. The definition of the appropriate unit refers to the grouping or
more precisely, the legal collectivity of eligible employees for purposes of
collective bargaining. The presumption is that these employees are entitled to the
rights to self-organization and collective bargaining, otherwise they would not be,
in the first place be considered at all in the determination of the appropriate
bargaining unit.

The question therefore of excluding certain rank and file employees for being
allegedly confidential, managerial or technical does not simply involve a definition
of the bargaining unit but rather raises the fundamental issue of coverage under
or eligibility for the exercise of the workers' rights to self-organization and
collective bargaining. On this score, the law on coverage and exclusion on the
matter should by now be very clear. Article 244 of the Labor Code states that all
persons employed in commercial, industrial and agricultural enterprises,
including religious, charitable, medical or educational institutions operating for
profit shall have the right to self-organization and to form, join, or assist labor
organizations for purposes of collective bargaining. Articles 245 and 246 (ibid)
provide that security guards and managerial employees are not eligible to form,
assist or join any labor organization. As defined by the Code, a managerial
employee is one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees, or to effectively recommend such
managerial actions. All employees not falling within this definition are considered
rank and file employees for purposes of self-organization and collective
bargaining.

It is in the light of the foregoing provisions of law that the challenged order, in so
far as it excludes all managerial and supervisory employees, secretaries of bank
officials, credit investigators, telephone operators, loan security custodians,
employees in the accounting, auditing, legal, trust and personnel departments
respectively, should be modified for being either superfluous, discriminatory or
simply contrary to law. The express exclusion of managerial employees in the
Order is superfluous for the same is already provided for by law and is presumed
when the bargaining unit was defined as comprising all the regular rank and file
employees of the bank. It is also anomalous and discriminatory when it excluded
employees of the personnel department but included specific individuals like
Manuel Simibcay Primi Zamora and Carmelita Sy. Exclusion as managerial
employee is not based on the personality of the occupant but rather on the
nature and function of the position. The exclusion of the other positions is
likewise contrary to law, there being no clear showing that they are managerial
employees. The mere fact of being a supervisor or a confidential employee does
not exclude him from coverage. He must strictly come within the category of a
managerial employee as defined by the Code. The Constitution assures to all
workers such rights to self-organization and collective bargaining. Exclusions,
being the exception and being in derogation of such constitutional mandate,
should be construed in strictissimi juris.
Furthermore, to uphold the order of exclusion would be to allow the emasculation
of the workers' right to self-organization and to collective bargaining, statutory
rights which have received constitutional recognition when they were enshrined
in the 1973 Constitution. Indeed, the further rulings that 'other non-confidential
employees included in the bank's list of proposed exclusion be allowed to vote
but the votes should be segregated as challenged and that in case of doubt as to
whether or not the position held by an employee is confidential in nature, the
employee should be allowed to vote but his vote should be segregated as
challenged' both complete the said order's self-nullifying effects.

At the most and indeed as a policy, exclusion of confidential employees from the
bargaining unit is a matter for negotiation and agreement of the parties. Thus, the
parties may agree in the CBA, to exclude certain highly confidential positions
from the bargaining unit. Absent such agreement, coverage must be observed. In
any event, any negotiation and agreement can come after the representation
issue is resolved and this is just the situation in the instant case.

In fine, the appropriate bargaining unit shall include a regular rank and file
employees of the respondent including the positions excluded in the challenged
order dated 19 November 1979, with the exception of the secretaries to the Bank
President, Executive Vice-President, Senior Vice President and other Vice-
Presidents as agreed upon by the parties during the hearings.

Respondent vehemently interposes also the pendency of cancellation

proceedings against petitioner as a prejudicial issue which should suspend the
petition for certification election.

We cannot fully concur with this contention Unless there is an order of

cancellation which is final the union's certificate of registration remains and its
legal personality intact. It is entitled to the rights and privileges accorded by law,
including the right to represent its members and employees in a bargaining unit
for collective bargaining purposes including participation in a representation
proceeding. This is especially true where the grounds for the cancellation of its
union certificate do not appear indubitable.

The rights of workers to self-organization finds general and specific constitutional

guarantees. Section 7, Article IV of the Philippine Constitution provides that the
right to form associations or societies purposes not contrary to law shall not be
abridged. This right more pronounced in the case of labor. Section 9, Article II
(ibid) specifically declares that the State shall assure the rights of workers to self-
organization ,collective bargaining, security of tenure and just and humane
conditions of work. Such constitutional guarantees should not be lightly taken
much less easily nullified. A healthy respect for the freedom of association
demands that acts imputable to officers or members be not easily visited with
capital punishments against the association itself.

On the 30% consent requirement, respondent contends that the bargaining unit
is not appropriately defined 'hence, the med-arbiter's finding that there was
compliance with the 30% 'jurisdictional requirement is patently erroneous. To this
we must disagree. As earlier stated, the definition of the appropriate bargaining
unit does not call for an actual head count or Identification of the particular
employees belonging thereto. That is done in the pre-election conference. It is
sufficient that the bargaining unit is defined such that the employees who are part
thereof may be readily ascertained for purposes of exclusions and inclusions
during the pre-election conference when the list of eligible voters are determined.
 In this regard, respondent does not really seriously question the 264 total number
of employees except for the alleged exclusion which should reduce the number
thus allegedly affecting the sufficiency of the supporting signatures submitted.
We have already ruled against the exclusions as violative of the constitutional
guarantee of workers' right to self-organization. Consequently, since 188 of the
264 employees subscribed to the petition, which constitutes 70% of the total
employees in bargaining unit, the 30% consent requirement has been more than
sufficiently complied with. In any case, even if we grant the alleged exclusions
totalling about 45, the same will not give any refuge to respondent's position. For
assuming momentarily that the exclusions are valid, the same will not fatally
affect the 30% consent compliance.

Finally, lest it be so easily forgotten, a certification election is but an

administration device for determining the true choice of the employees in the
appropriate bargaining unit as to their bargainer representative. Unnecessary
obstacles should not therefore be thrown on its way. Rather, the parties should
take their case, if they have, directly to the real and ultimate arbiter on the matter,
the employees sought to be represented in the bargaining unit.

WHEREFORE, in the light of the foregoing considerations, the Order dated 19

November 1979 calling for a certification election is hereby affirmed with the
modification that the same shall be conducted among all the regular rank and file
employees of the respondent bank at its head and branch offices, including those
excluded in said Order, except only the positions of secretary to the Bank
President, Executive Vice-President and other Vice-Presidents which agreed to
be excluded from the bargaining unit by the parties during the hearings. The
choice shall be between the petitioner and no union.

Let the certification election be conducted within twenty (20) days from receipt
hereof. The pre-election conference shall be immediately called to thresh out the
mechanics of the election. The list of qualified voters shall be based on the July
1979 payroll of the company.

SO ORDERED (pp. 5-9, Annex "J" pp. 63-67, rec.; emphasis supplied).

On February 11, 1980, petitioner received an undated and unverified appeal of the respondent
bank to the Minister of Labor questioning the decision of Bureau of Labor Relations Director
Carmelo C. Noriel which appeal alleged that:

I. THE QUESTIONED ORDER IS NULL AND VOID FOR HAVING BEEN

ISSUED WITHOUT OR IN EXCESS OF JURISDICTION SINCE —

(i) It is this Honorable Office, not the BLR, that has jurisdiction over the parties'
appeals from the Order of Med-Arbiter Alberto A. Abis, Jr.

II. ASSUMING, AD ARGUENDO, THAT THE BLR HAS JURISDICTION, THE

APPEALED ORDER IS NONETHELESS NULL AND VOID, THE BLR HAVING
GRAVELY ABUSED ITS DISCRETION IN NOT FINDING THAT THE ORDER,
DATED NOVEMBER 19, 1979, OF MED-ARBITER ABIS IS NULL AND VOID
FOR HAVING BEEN ISSUED WITHOUT AUTHORITY/JURISDICTION
CONSIDERING THAT —

(i) Full and complete jurisdiction over this petition is vested in this
Office, which, under P.D. 823, as amended, and by agreement of
the parties, is the adjudicative body solely and exclusively
empowered to resolve this petition.
 (ii) The fact that petitioner's Union registration is now the subject of
cancellation proceedings before the BLR renders the issuance of
an Order directing the holding of a certification election premature;
and

(iii) The bargaining unit is not appropriately defined; hence, the

BLR'S and before it, the Med-Arbiter's finding that there was
compliance with the 30% jurisdictional requirement is completely
without basis and, therefore, grossly erroneous.

III. THE MOTION FOR INTERVENTION FILED BY INTERVENOR UNION OF

PRODUCERS BANK EMPLOYEE'S CHAPTER-NATU WHICH THE BLR, FOR
UNKNOWN REASON(S), FAILED TO RESOLVE, RENDERS IMPERATIVE THE
REDETERMINATION OF WHETHER OR NOT THE MANDATORY 30%
JURISDICTIONAL REQUIREMENT HAS BEEN MET. (Pp. 2-3, Annex "K", pp.
69-70, rec.).

On February 21, 1980, petitioner union filed a manifestation on respondent's undated and
unverified appeal (Annex "L"; pp. 91-94, rec.).

On the same date, petitioner filed a motion to dismiss with motion to execute (Annex " M " pp.
95-96, rec.).

On March 3, 1980, petitioner filed an urgent motion to resolve respondent's appeal together
with pertitioner's motion to dismiss and motion for execution ( Annex "N"; pp. 97-98, rec.).

On March 14, 1980, petitioner received a copy of a letter endorsement dated March 7, 1980
which reads:

Respectfully referred to the Honorable Minister of Labor, the herein attached

Motion to Execute and Manifestation to Dismiss with Motion to Execute and
Manifestation on Respondent's undated and unverified Appeal dated Feb. 21,
1980 and February 20, 1980 respectively, for appropriate action.

In a memorandum dated 9 November 1979, the Deputy Minister of Labor

completely inhibited himself in this case (p. 169, rec.).

Public respondent Director Carmelo C. Noriel did not proceed to hold the certification election,
neither did the Minister of Labor act on the appeal of private respondent and on petitioner's
motion to dismiss with motion to execute.

Hence, petitioner filed the instant petition on March 19, 1980.

On May 2, 1980, private respondent Bank filed its comments (pp. 111-122, rec.).

On June 25, 1980, public respondents filed their comment (pp. 131-142, rec.).

On August 16, 1980, petitioner filed its memorandum (pp. 155-169, rec.).

On September 2, 1980, private respondent Bank filed its memorandum (pp. 179-197, rec.).

On October 1, 1980, public respondents filed a manifestation in lieu of memorandum

alleging inter alia that:

1. The instant petition for mandamus seeks to compel the respondent Minister of
Labor to act on respondent Producers Bank's Appeal and on petitioner's motion
 to execute the decision of respondent Director of Labor Relations dated January
24, 1980, directing the holding of a certification election in said bank;

2. The said petition, however, is now moot and academic because:

(a) Respondent Minister of Labor had already acted on the said

appeal in his decision dated April 11, 1980 the dispositive portion of
which is as follows:

Wherefore, respondent Bank's Appeal is hereby dismissed and the

validity of the Decision of January 24, 1980, herein adopted is
hereby recognized. No motion for reconsideration of this Order
shall be entertained.

(b) Petitioner may now file, if it so desires, with respondent Director

of Labor Relations, a motion for the execution of his decision so
that the certification election can be held at respondent bank;

WHEREFORE, it is respectfully prayed that the instant petition be dismissed for

being moot and academic (pp. 201-202, rec.; emphasis supplied).

On October 10, 1980, petitioner filed a "Manifestation Re: Decision of the Minister of Labor"
alleging among other things that.

xxx xxx xxx

2. Petitioner had not received any copy of such April 11, 1980 decision of the
Minister of Labor mentioned by the Honorable Solicitor General. In fact, the
Comment of the public respondents dated June 11, 1980 signed by Assistant
Solicitor General Octavio R. Ramirez and Trial Attorney Elihu A. Ybañez made
no mention of the same in the private respondent's memorandum of September
2, 1980" (p. 204, rec.).

On October 28, 1980, petitioner filed a comment on manifestation of the Honorable Solicitor
General dated 30 September 1980 and motion alleging therein that despite inquiries made, no
official copy of the alleged April 11, 1980 decision of the Minister of Labor mentioned in the
manifestation of the Solicitor General has been furnished the petitioner. Hence, it prayed that
the Minister of Labor be requested to submit to this Court a certified copy of the aforesaid April
11, 1986 decision of the Minister of Labor.

On October 30, 1980, petitioner filed a manifestation and comment stating that:

1. On October 29, 1980, it received a copy of the decision of the Honorable

Minister of Labor in Case No. NCR-LRD-8-360-79 as may be seen from Annex
"A".

2. The decision is dated October 23, 1980 and not April 11, 1980 as stated in the
Manifestation in Lieu of Memorandum of the Office of the Honorable Solicitor
General, dated 30 September 1980.

3. Petitioner respectfully request an explanation from the public respondents on

this apparent discrepancy which has in fact misled even this Honorable Court (p.
21 1, rec.).

On November 11, 1980, private respondent Bank filed a manifestation/motion stating that the
aforementioned April 11, 1980 decision of the Minister of Labor is non- existent, as in fact the
Minister of Labor issued an order affirming the decision of BLR Director Noriel only on October
23, 1980.

xxx xxx xxx

3. Notwithstanding the issuance of the October 23, 1980 Order by the Minister of
Labor, the Bank respectfully submits that this petition for mandamus, initiated by
petitioner on March 19, 1980 and given due course by this Honorable Court
should not be dismissed. The petitioner herein prays from this Honorable Court
that public respondents be ordered to conduct the certification election as
ordered by Med-Arbiter Plagata, Abis and BLR Director Noriel among the rank-
and-file employees ... of the Bank. Alternatively, the petitioner prays that the
Minister of Labor or his Deputy be required "to act forthwith" on the appeal filed
by petitioner herein As could be gleaned clearly from the allegations and prayer
in this petition for mandamus, the petitioner primarily seeks the holding of a
certification election Only secondarily is it asking this Court to command the
Minister of Labor or his Deputy to resolve the appeal filed by the Bank.

4. The affirmance by the Minister of the disputed order of BLR Director Noriel
thus renders moot and academic only the secondary or alternative prayer of the
Union in this mandamus case. What still remains for resolution by this Honorable
Courts the issue squarely put before it on the propriety or impropriety of holding a
certification election. This issue has been traversed by the petitioner and the
Bank in their respective memoranda filed with this Court, with the Bank stressing
that a certification election would be improper because, among others, the
petitioning Union violated the strike ban, there is a pending case for cancellation
of its registration certificate, and applications for clearance to dismiss the Union's
striking members are pending approval by the BLR Director.

5. A dismissal of this petition for mandamus would unduly delay the resolution of
the issue of whether a certification election should be held or not.

IN VIEW OF THE FOREGOING, it is respectfully moved that this Honorable Court rule on the
issue of whether or not a certification election should be held under circumstances obtaining in
the present case (pp. 214-216, rec.; emphasis supplied).

On November 24, 1980, public respondents filed a reply to the manifestation and comment of
petitioner explaining the discrepancy of the two dates—October 23, 1980, the actual date of
the order of the Minister of Labor affirming the decision of the BLR Director and April 11, 1980,
the date mentioned by the Solicitor General as the alleged date of the aforesaid order of the
Minister of Labor. Thus, the pertinent portion of the letter of Director Noriel to the Solicitor
General likewise explaining the apparent discrepancy of the aforesaid dates reads:

It should likewise invite your attention to the date of the Order which is October
23, 1980 and not April 11, 1980 as indicated in the "Manifestation in Lieu of
Memorandum" dated September 30, 1980 of the Solicitor General filed with the
Supreme Court. The April 11, 1980 date must have been based on a draft order
which was inadvertently included in the records of the case that was forwarded to
your office. We wish to point out, however, that the dispositive portion as quoted
in the Manifestation is exactly the same as that in the Order eventually signed
and released by the Labor Minister on October 23, 1980 (p. 220, rec.).

Public respondents further averred that "(I)n any event, whether the order is dated April 11,
1980 or October 23, 1980 will not matter since both 'orders' dismissed the appeal of the
respondent Bank, upon which dismissal the Manifestation in Lieu of Memorandum dated
September 30, 1980, of public respondents, was based." Public respondents thus reiterated
their prayer that the instant petition be dismissed for being allegedly moot and academic (pp.
219-222, rec.).

On December 5, 1980, petitioner filed a comment to manifestation/motion of counsel for

private respondent alleging inter alia that "... should the Honorable Court be minded to resolve
the issue raised in the Manifestation/Motion of private respondent-i.e.-whether the alleged
strike ban violation is a bar to a certification election, it will be noted that the matter of whether
there has been a 'violation' of the strike ban or not is still to be heard by the Regional Director
through Labor Arbiter Crescencio Trajano after this Honorable Court dismissed G.R. No. L-
52026 on the matter of jurisdiction competence of the Regional Director to hear the question
raised therein. To the present, although, the Regional Director has commenced to act on the
case, there is no decision on whether the strike ban has been violated by the petitioner union."
Petitioner union vigorously asserted that while private respondent Bank has a pending petition
for cancellation of the registration certificate of herein petitioner union, it is still premature for
private respondent Bank to claim that the petitioner union has violated the strike ban. Petitioner
then alleged that "(T)here is also no proof or decision that acts indulged in by the petitioner and
its members amounted to a strike and even assuming arguendo that such act (which was the
holding of a meeting for 30 minutes before office time in the morning) constitutes a 'strike' and
further that such act violates the strike ban. It has been held through Honorable Justice
Antonio P. Barredo in Petrophil. vs. Malayang Manggagawa sa ESSO (75 SCRA 73) that only
the leaders and members who participated in the illegal activity are held responsible. If this
were so, then the rest of the members who are innocent are still entitled to the benefits of
collective bargaining. There is thus no need to delay the holding of a certification election on
the alleged ground that there is a pending action of the respondent company against the
petitioner union for 'violation of the strike ban' " (pp. 226-227, rec.).

It is likewise pointed out by petitioner union that even if it would be ultimately confirmed that
indeed petitioner union has violated the strike ban, cancellation of the registration certificate of
petitioner union is not the only disciplinary action or sanction provided for under the law but
other penalties may be imposed and not necessarily cancellation of its registration certificate.

On January 12, 1981, pursuant to the resolution of this Court dated December 4, 1980,
petitioner union filed its rejoinder which reiterated the stand of the Solicitor General that the
present case has become moot and academic by virtue of the decision of the Minister of Labor
affirming the decision of the BLR Director which ordered a certification election (p. 230, rec.).

It is quite obvious from the facts set forth above that the question of jurisdiction vigorously
asserted by herein private respondent Bank has become moot and academic.

What therefore remains for this Court to resolve is the issue as to whether or not a certification
election should be held under the circumstances obtaining in the present case. Is it proper to
order a certification election despite the pendency of the petition to cancel herein petitioner
union's certificate of registration?

The Court rules in the affirmative. The pendency of the petition for cancellation of the
registration certificate of herein petitioner union is not a bar to the holding of a certification
election. The pendency of the petition for cancellation of the registration certificate of petitioner
union founded on the alleged illegal strikes staged by the leaders and members of the
intervenor union and petitioner union should not suspend the holding of a certification election,
because there is no order directing such cancellation (cf. Dairy Queen Products Company of
the Philippines, Inc. vs. Court of Industrial Relations, et al. No. L-35009, Aug. 31, 1977). In said
Dairy Queen case, one of the issues raised was whether the lower court erred and
concomitantly committed grave abuse of discretion in disregarding the fact that therein
respondent union's permit and license have been cancelled by the then Department of Labor
and therefore could not be certified as the sole and exclusive bargaining representative of the
rank and file employees of therein petitioner company.
While the rationale of the decision was principally rested on the subsequent rescission of the
decision ordering the cancellation of the registration certificate of the respondent union,
thereby restoring its legal personality and an the rights and privileges accorded by law to a
legitimate organization, this Court likewise declared: "There is no showing, however, that when
the respondent court issued the order dated December 8, 1971, certifying the Dairy Queen
Employees Association CCLU as the sole and exclusive bargaining representative of all
regular rank and file employees of the Dairy Queen Products Company of the Philippines, Inc.,
for purposes of collective bargaining with respect to wages, rates of pay, hours of work and
other terms and conditions for appointment, the order of cancellation of the registration
certificate of the Dairy Queen Employees Association-CC-1,U had become final" 78 SCRA
444-445. supra, emphasis supplied).

It may be worthy to note also that the petition for cancellation of petitioner union's registration
certificate based on the alleged illegal strikes staged on October 12, 1979 and later November
5-7, 1979 was evidently intended to delay the early disposition of the case for certification
election considering that the same was apparently filed only after the October 18,
1979 Order of Med-Arbiter Plagata which directed the holding of a certification election.

Aside from the fact that the petition for cancellation of the registration certificate of petitioner
union has not yet been finally resolved, there is another fact that militates against the stand of
private respondent Bank, the liberal approach observed by this Court as to matters of
certification election. In a recent case, Atlas Free Workers Union (AFWU)-PSSLU Local vs.
Hon. Carmelo C. Noriel, et al. (No. 51005, May 26, 1981), "[T]he Court resolves to grant the
petition (for mandamus) in line with the liberal approach consistently adhered to by this Court
in matters of certification election. The whole democratic process is geared towards the
determination of representation, not only in government but in other sectors as well, by
election. Thus, the Court has declared its commitment to the view that a certification election is
crucial to the institution of collective bargaining, for it gives substance to the principle of
majority rule as one ' of the basic concepts of a democratic policy" (National Mines and Allied
Workers Union vs. Luna, 83 SCRA 610).

Likewise, Scout Ramon V. Albano Memorial College vs. Noriel, et al. (L-48347, Oct. 3, 1978,
85 SCRA 494, 497, 498), this Court citing a long catena of cases ruled:

... The institution of collective bargaining is, to recall Cox, a prime manifestation
of industrial democracy at work. The two parties to the relationship, labor and
management, make their own rules by coming to terms. That is to govern
themselves in matters that really count. As labor, however, is composed of a
number of individuals, it is indispensable that they be represented by a labor
organization of their choice. Thus may be discerned how crucial is a certification
election. So our decisions from the earliest case of PLDT Employees Union v.
PLDT Co. Free Telephone Workers Union to the latest, Philippine
Communications, Electronics & Electricity Workers' Federation (PCWF) v. Court
of Industrial Relations, had made clear. The same principle was again given
expression in language equally emphatic in the subsequent case of Philippine
Association of Free Labor Unions v. Bureau of Labor Relations: 'Petitioner thus
appears to be woefully lacking in awareness of the significance of a certification
election for the collective bargaining process. It is the fairest and most effective
way of determining which labor organization can truly represent the working
force. It is a fundamental postulate that the will of the majority, if given expression
in an honest election with freedom on the part of the voters to make their choice,
is controlling. No better device can assure the institution of industrial democracy
with the two parties to a business enterprise, management and labor,
establishing a regime of self-rule.' That is to accord respect to the policy of the
Labor Code, indisputably partial to the holding of a certification election so as to
arrive in a manner definitive and certain concerning the choice of the labor
 organization to represent the workers in a collective bargaining unit (emphasis
supplied).

It is true that under Section 8, Rule II, Book V of the Labor Code, cancellation of registration
certificate may be imposed on the following instances:

(a) Violation of Articles 234, 238, 239 and 240 of the Code;

(b) Failure to comply with Article 237 of the Code;

(c) Violation of any of the provisions of Article 242 of the Code; and

(d) Any violation of the provisions of this Book.

The aforementioned provisions should be read in relation to Article 273, Chapter IV, Title VIII
which explicitly provides:

Art. 273. Penalties. — (a) Violation of any provision of this Title shall be punished
by a fine of One Thousand Pesos [P l, 000.00] to Ten Thousand Pesos [P 10,
000.00] and/or imprisonment of one (1) year to five (5) years.

(b) Any person violating any provision of this Title shall be dealt with in
accordance with General Order No. 2-A and General Order No. 49.

(c) Violation of this Title by any legitimate labor organization shall be grounds for
disciplinary action including, but not limited to, the cancellation of its registration
permit.

xxxxxxxxx

(emphasis supplied).

From the aforequoted provisions, We are likewise convinced that as it can be gleaned from
said provisions, cancellation of the registration certificate is not the only resultant penalty in
case of any violation of the Labor Code.

Certainly, the penalty imposable should be commensurate to the nature or gravity of the Legal
activities conducted and to the number of members and leaders of the union staging the illegal
strike.

As aptly ruled by respondent Bureau of Labor Relations Director Noriel: "The rights of workers
to self-organization finds general and specific constitutional guarantees. Section 7, Article IV of
the Philippine Constitution provides that the right to form associations or societies for purposes
not contrary to law shall not be abridged. This right is more pronounced in the case of labor.
Section 9, Article II (ibid) specifically declares that the State shall assure the rights of workers
to self-organization, collective bargaining, security of tenure and just and humane conditions of
work. Such constitutional guarantees should not be lightly taken much less easily nullified. A
healthy respect for the freedom of association demands that acts imputable to officers or
members be not easily visited with capital punishments against the association itself" (p. 8,
Annex "J"; p. 66, rec.).

WHEREFORE, THE WRIT OF mandamus PRAYED FOR IS GRANTED AND RESPONDENT

BLR DIRECTOR NORIEL HEREBY ORDERED TO CALL AND DIRECT THE IMMEDIATE
HOLDING OF A CERTIFICATION ELECTION. NO COSTS.

SO ORDERED.
#20.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-32853 September 25, 1981

JUAN S. BARRERA, (doing business under the firm and trade name, MACHINERY AND
STEEL PRODUCTS ENGINEERING MASPE petitioner,
vs.
THE HONORABLE COURT OF INDUSTRIAL RELATIONS, Philippine Associated Workers
Union (PAWO) and MASPE WORKERS' UNION, respondents.

FERNANDO C.J.:

It was the absence of any definite ruling at the time this petition was filed on the question of
whether or not a pending certification election proceeding may be dismissed or held in
abeyance, there being such a motion on the part of the employer Juan S. Barrera, doing
business under the firm and trade name of Machinery and Steel Products Engineering MASPE
alleging an unfair labor practice against one of the contending parties, private respondent
MASPE Workers Union, the other being private respondent Philippine Associated Workers
Union, that led this Court to give it due course. The unfair labor practice imputed to such labor
union consisted of failure to bargain collectively, aggravated by an illegal strike. Respondent
Court of Industrial Relations denied such a motion to dismiss, stating that the grounds therein
alleged "appear not to be indubitable A motion for reconsideration having proved futile, this
petition was filed.

Subsequently, to be precise, in 1973, in the case of B. F. Goodrich Philippines, Inc. vs.

Goodrich (Marikina Factory) Confidential and Salaried Employees Union-NATU. 1 such a
question was given an answer by this Court, one adverse to the claim of petitioner. This
petition, therefore, must be dismissed.

The case for petitioner was put most vigorously in the exhaustive and scholarly brief of its
counsel, Manuel M. Crudo To quote from its pertinent portion: "On September 22, 1970 the
petitioner Barrera filed a motion to dismiss or hold case in abeyance, in CIR Case No. 2759-
MC. In said motion, we called attention to the admission of MASPE Workers Union as
intervenor in the case. We stated that the intervenor union, its officers and members had
committed various acts of unfair labor practice and were on illegal strike punctuated by force,
violence and intimidation. We called attention to our formal charge of unfair labor
practice against the intervenor union. We called attention to the fact that in the charge of unfair
labor practice among the reliefs prayed for were to declare respondents therein collectively
and individually guilty of unfair labor practice; to declare the strike, and other concerted actions
resorted to in pursuance of said unfair labor practice illegal to declare the MASPE Workers
Union as consequently having lost all rights and privileges accorded by law to a legitimate
labor union; and to declare all individual respondents therein and others as having lost their
employment status by virtue of the illegality of the strike staged by them. We then pointed out
that unless the case for unfair labor practice against MASPE Workers Union, its officers and
members is decided the status of that union and its members who are respondents would
be uncertain (i.e., in relation to the requested certification election and the outcome thereof). * *
* Unfortunately, the respondent Honorable Court of Industrial Relations denied our motion to
dismiss or hold case in abeyance. * * * ." 2It remains only to be added that subsequently the
Court of Industrial Relations en banc denied a motion for reconsideration, failing "to find
sufficient justification to alter or to modify the aforesaid Order." 3

To repeat, the petition cannot prosper.

1. As set forth in the B. F. Goodrich Philippines, Inc. decision: "There is novelty in the specific
question raised, as to whether or not a certification election may be stayed at the instance of
the employer, pending the determination of an unfair labor practice case filed by it against
certain employees affiliated with respondent-unions. That is a matter of which this Court has
not had an opportunity to speak on previously. What is settled law, dating from the case
of Standard Cigarette Workers' Union v. Court of Industrial Relations, decided in 1957, is that if
it were a labor organization objecting to the participation in a certification election of a company
dominated union, as a result of which a complaint for an unfair labor practice case against the
employer was filed, the status of the latter union must be first cleared in such a proceeding
before such voting could take place." 4

2. This is the more relevant excerpt: "The unique situation before us, however, is exactly the
reverse. It is management that would have an unfair labor practice case filed by it for illegal
strike engaged in by some of its employees concluded, before it would agree to the holding of
a certification election. That is the stand of petitioner. It does not carry conviction. The reason
that justifies the postponement of a certification election pending an inquiry, as to the bona
fides of a labor union, precisely calls for a different conclusion. If under the circumstances
disclosed, management is allowed to have its way, the result might be to dilute or fritter away
the strength of an organization bent on a more zealous defense of labor's prerogatives. The
difficulties and obstacles that must be then hurdled would not be lost on the rest of the
personnel who had not as yet made up their minds one way or the other. This is not to say that
management is to be precluded from filing an unfair labor practice case. It is merely to stress
that such a suit should not be allowed to lend itself as a means, whether intended or not, to
prevent a truly free expression of the will of the labor group as to the organization that will
represent it. It is not only the loss of time involved, in itself not likely to enhance the prospect of
respondent-unions, but also the fear engendered in the mind of an ordinary employee that
management has many weapons in its arsenal to bring the full force of its undeniable power
against those of its employees dissatisfied with things as they are. There is no valid reason
then for the postponement sought. This is one instance that calls for the application of the
maxim, lex dilationes semper exhorret. Moreover, is there not in the posture taken by petitioner
a contravention of what is expressly set forth in the Industrial Peace Act, which speaks of the
labor organizations 'designated or selected for the purpose of collective bargaining by the
majority of the employees in an appropriate collective bargaining unit [be the exclusive]
representative of all the employees in such unit for the purpose of collective bargaining.' The
law clearly contemplates all the employees, not only some of them. As much as possible then,
there is to be no unwarranted reduction in the number of those taking part in a certification
election, even under the guise that in the meanwhile, which may take some time, some of
those who are employees could possibly lose such status, by virtue of a pending unfair labor
practice case." 5

3. Even on the assumption that the vigorous condenmation of the strike and the picketing were
attended by violence, it does not automatically follow that thereby the strikers in question are
no longer entitled to participate in the certification election for having automatically lost their
jobs. So it was made clear in another B.F. Goodrich decision: 6 What was set forth in the facts
as found by respondent Judge Salvador would indicate that it was during the picketing,
certainly not peaceful, that the imputed acts of violence did occur. It cannot be ignored,
however, that there were injuries on both sides because management did not, understandably,
play a passive role confronted as it was with the unruly disruptive tactics of labor. This is not,
by any means, to condone activities of such character, irrespective of the parties responsible.
It is merely to explain what cannot be justified. Nonetheless, did the acts in question call for an
automatic finding of illegality? Again, the order issued on February 4, 1972 appeared to be
oblivious of a 1971 decision of this Court, Shell Oil Workers' Union v. Shell Company of the
Philippines, Ltd. There it was clearly held: 'A strike otherwise valid, if violent in character, may
be placed beyond the pale. Care is to be taken, however, especially where an unfair labor
practice is involved, to avoid stamping it with illegality just because it is tainted by such acts.
To avoid rendering illusory the recognition of the right to strike, responsibility in such a case
should be individual and not collective. A different conclusion would be called for, of course, if
the existence of force while the strike lasts is pervasive and widespread, consistently and
deliberately resorted to as a matter of policy. It could be reasonably concluded then that even if
justified as to ends, it becomes illegal because of the means employed.' It must be pointed out
likewise that the facts as there found would seem to indicate a greater degree of violence.
Thus: 'Respondent Court must have been unduly impressed by the evidence submitted by the
Shell Company to the effect that the strike was marred by acts of force, intimidation and
violence on the evening of June 14 and twice in the mornings of June 15 and 16, 1967 in
Manila. Attention was likewise called to the fact that even on the following day, with police
officials stationed at the strike bound area, molotov bombs did explode and the streets were
obstructed witlh wooden planks containing protruding nails. Moreover, in the branches of the
Shell Company in Iloilo City as well as in Bacolod, on dates unspecified, physical injuries
appeared to have been inflicted on management personnel. Respondent Court in the appealed
decision did penalize with loss of employment the ten individuals responsible for such acts.
Nor is it to be lost sight of that before the certification on June 27, 1967, one month had
elapsed during which the Union was on strike. Except on those few days specified then, the
Shell Company could not allege that the strike was conducted in a manner other than peaceful
Under the circumstances, it would be going too far to consider that it thereby became illegal.'
Then, mention was made of a decision in Insular Life Assurance Co., Ltd. Employees'
Association vs. Insular Life Assurance Co., Ltd. [where] there is the recognition by this Court,
speaking through Justice Castro, of picketing as such being "inherently explosive." It is thus
clear that not every form of violence suffices to affix the seal of illegality on a strike or to cause
the loss of employment by the guilty party. " 7

WHEREFORE, this petition is dismissed and the appealed order affirmed. No costs.

Aquino, Guerrero, Abad Santos and De Castro, JJ., concur.

Barredo, J., is on leave.

Concepcion Jr., J., is on leave.