21.

SECOND DIVISION

[G.R. No. 107792. March 2, 1998.]

SAMAHANG MANGGAGAWA SA PERMEX (SMP-PIILU-TUCP), petitioners, vs. THE SECRETARY OF LABOR,

NATIONAL FEDERATION OF LABOR, PERMEX PRODUCER AND EXPORTER CORPORATION, respondents.

Ricardo S. Baban for petitioner.

The Solicitor General for public respondent.

Castillo & Castillo Law Offices for NFL.

Cesar M. Jimenez for Permex Producer, etc.

SYNOPSIS

On January 15, 1991, a certification election was conducted among the employees of respondent Permex Producer and Exporter
Corporation (Permex). The "No Union" won. Petitioner union wrote the respondent company requesting recognition as the sole and
exclusive bargaining representative of employees at the Permex. Permex recognized petitioner and later entered into a collective
bargaining agreement with it. The CBA was ratified by the majority of the rank and file employees of Permex. It was certified by the
DOLE. TSAHIa

On February 25, 1992, respondent NFL filed a petition for certification election, but it was dismissed by the med-arbiter. On appeal,
the order of the med-arbiter was set aside by the Secretary of Labor who ordered a certification election to be conducted among the
rank and file employees at the Permex.

Petitioner moved for a reconsideration but its motion was denied. Hence, this petition.

Permex should not have given its voluntary recognition to petitioner when the latter asked Permex for recognition as exclusive
collective bargaining agent of the employees of the company. The company did not have the power to declare the union the
exclusive representative of the workers for the purpose of collective bargaining.

Besides, the recognition given to the union came barely ten months after the employees had voted "no union" in the certification
election conducted in the company. There can be no determination of a bargaining representative within a year of the proclamation
of the results of the certification election. The petitioner entered into a CBA with Permex when its status as exclusive bargaining
agent of the employees had not been established yet. THADEI

SYLLABUS

1. LABOR LAW; LABOR RELATIONS; CERTIFICATION ELECTION; A COMPANY DOES NOT HAVE THE POWER TO DECLARE A UNION AS
EXCLUSIVE REPRESENTATIVE OF THE WORKERS FOR PURPOSE OF COLLECTIVE BARGAINING. — The case of Ilaw ng Buklod ng
Manggagawa v. Ferrer-Calleja, cited by the Solicitor General in his comment filed in behalf of the NLRC, is particularly apropos.
There, the union also requested voluntary recognition by the company. Instead of granting the request, the company petitioned for a
certification election. The union moved to dismiss on the ground that it did not ask the company to bargain collectively with it. As its
motion was denied, the union brought the matter to this Court. In sustaining the company's stand, this Court ruled: . . . Ordinarily,
in an unorganized establishment like the Calasiao Beer Region, it is the union that files, a petition for a certification election if there
is no certified bargaining agent for the workers in the establishment. If a union asks the employer to voluntarily recognize it as the
bargaining agent of the employees, as the petitioner did, it in effect asks the employer to certify it as the bargaining representative
of the employees — A CERTIFICATION WHICH THE EMPLOYER HAS NO AUTHORITY TO GIVE, for it is the employees' prerogative (not
the employer's) to determine whether they want a union to represent them, and, if so, which one it should be. In accordance with
this ruling, Permex Producer should not have given its voluntary recognition to SMP-PIILU-TUCP when the latter asked for recognition
as exclusive collective bargaining agent of the employees of the company. The company did not have the power to declare the union
the exclusive representative of the workers for the purpose of collective bargaining. HaAISC

2. ID.; ID.; THERE CAN BE NO DETERMINATION OF A BARGAINING REPRESENTATIVE WITHIN A YEAR OF THE PROCLAMATION OF
THE RESULTS OF THE CERTIFICATION ELECTION. — Petitioner argues that of the 763 qualified employees of Permex Producer, 479
supported its application for registration with the DOLE and that when petitioner signed the CBA with the company, the CBA was
ratified by 542 employees. Petitioner contends that such support by the majority of the employees justifies its finding that the CBA
made by it is valid and binding. But it is not enough that a union has the support of the majority of the employees. It is equally
important that everyone in the bargaining unit be given the opportunity to express himself. This is especially so because, in this
case, the recognition given to the union came barely ten (10) months after the employees had voted "no union" in the certification
election conducted in the company. As pointed out by respondent Secretary of Labor in his decision, there can be no determination
of a bargaining representative within a year of the proclamation of the results of the certification election. Here the results, which
showed that 61% of the employees voted for "no union," were certified only on February 25, 1991 but on December 1, 1991 Permex
Producer already recognized the union and entered into a CBA with it.

DECISION

MENDOZA, J p:

This is a petition for review on certiorari of the decision, dated October 8, 1992 and order dated November 12, 1992, of
Undersecretary of Labor and Employment Bienvenido Laguesma, ordering a certification election to be conducted among the
employees of respondent company.
The facts of the case are as follows. On January 15, 1991, a certification election was conducted among employees of respondent
Permex Producer and Exporter Corporation (hereafter referred to as Permex Producer). The results of the elections were as follows:

National Federation of Labor (NFL) 235

No Union 466

Spoiled ballots 18

Marked ballots 9

Challenged ballots 7
However, some employees of Permex Producer formed a labor organization known as the Samahang Manggagawa sa Permex (SMP)
which they registered with the Department of Labor and Employment on March 11, 1991. The union later affiliated with the Philippine
Integrated Industries Labor Union (PIILU). cdasia

On August 16, 1991, Samahang Manggagawa sa Permex-Philippine Integrated Industries Labor Union (SMP-PIILU), wrote the
respondent company requesting recognition as the sole and exclusive bargaining representative of employees at the Permex
Producer. On October 19, 1991 Permex Producer recognized SMP-PIILU and, on December 1, entered into a collective bargaining
agreement with it. The CBA was ratified between December 9 and 10, 1991 by the majority of the rank and file employees of Permex
Producer. On December 13, 1991, it was certified by the DOLE.

On February 25, 1992, respondent NFL filed a petition for certification election, but it was dismissed by Med-Arbiter Edgar B
Gongalos in an order dated August 20, 1992. Respondent NFL then appealed the order to the Secretary of Labor and Employment.
On October 8, 1992, the Secretary of Labor, through Undersecretary Bienvenido Laguesma, set aside the order of the Med-Arbiter
and ordered a certification election to be conducted among the rank and file employees at the Permex Producer, with the following
choices:

1. National Federation of Labor

2. Samahang Manggagawa sa Permex

3. No union

Petitioner moved for a reconsideration but its motion was denied in an order dated November 12, 1992. Hence, this petition.

Two arguments are put forth in support of the petition. First, it is contended that petitioner has been recognized by the majority of
the employees at Permex Producer as their sole collective bargaining agent. Petitioner argues that when a group of employees
constituting themselves into an organization and claiming to represent a majority of the work force requests the employer to bargain
collectively, the employer may do one of two things. First, if the employer is satisfied with the employees' claim the employer may
voluntarily recognize the union by merely bargaining collectively with it. The formal written confirmation is ordinarily stated in the
collective bargaining agreement. Second, if on the other hand, the employer refuses to recognize the union voluntarily, it may
petition the Bureau of Labor Relations to conduct a certification election. If the employer does not submit a petition for certification
election, the union claiming to represent the employees may submit the petition so that it may be directly certified as the employees'
representative or a certification election may be held.

The case of Ilaw at Buklod ng Manggagawa v. Ferrer-Calleja, 1 cited by the Solicitor General in his comment filed in behalf of the
NLRC, is particularly apropos. There, the union also requested voluntary recognition by the company. Instead of granting the
request, the company petitioned for a certification election. The union moved to dismiss on the ground that it did not ask the
company to bargain collectively with it. As its motion was denied, the union brought the matter to this Court. In sustaining the
company's stand, this Court ruled:

. . . Ordinarily, in an unorganized establishment like the Calasiao Beer Region, it is the union that files a petition
for a certification election if there is no certified bargaining agent for the workers in the establishment If a union
asks the employer to voluntarily recognize it as the bargaining agent of the employees, as the petitioner did, it in
effect asks the employer to certify it as the bargaining representative of the employees — A CERTIFICATION
WHICH THE EMPLOYER HAS NO AUTHORITY TO GIVE, for it is the employees' prerogative (not the employer's) to
determine whether they want a union to represent them, and, if so, which one it should be. (emphasis supplied)

In accordance with this ruling, Permex Producer should not have given its voluntary recognition to SMP-PIILU-TUCP when the latter
asked for recognition as exclusive collective bargaining agent of the employees of the company. The company did not have the
power to declare the union the exclusive representative of the workers for the purpose of collective bargaining.

Indeed, petitioner's contention runs counter to the trend towards the holding of certification election. By virtue of Executive Order
No. 111, which became effective on March 4, 1987, the direct certification previously allowed under the Labor Code had been
discontinued as a method of selecting the exclusive bargaining agents of the workers. 2 Certification election is the most effective
and the most democratic way of determining which labor organization can truly represent the working force in the appropriate
bargaining unit of a company. 3

Petitioner argues that of the 763 qualified employees of Permex Producer, 479 supported its application for registration with the
DOLE and that when petitioner signed the CBA with the company, the CBA was ratified by 542 employees. Petitioner contends that
such support by the majority of the employees justifies its finding that the CBA made by it is valid and binding. dctai

But it is not enough that a union has the support of the majority of the employees. It is equally important that everyone in the
bargaining unit be given the opportunity to express himself. 4

This is especially so because, in this case, the recognition given to the union came barely ten (10) months after the employees had
voted "no union" in the certification election conducted in the company. As pointed out by respondent Secretary of Labor in his
decision, there can be no determination of a bargaining representative within a year of the proclamation of the results of the
certification election. 5 Here the results, which showed that 61% of the employees voted for "no union," were certified only on
February 25, 1991 but on December 1, 1991 Permex Producer already recognized the union and entered into a CBA with it.

There is something dubious about the fact that just ten (10) months after the employees had voted that they did not want any union
to represent them, they would be expressing support for petitioner. The doubt is compounded by the fact that in sworn affidavits
some employees claimed that they had either been coerced or misled into signing a document which turned out to be in support of
petitioner as its collective bargaining agent. Although there were retractions, we agree with the Solicitor General that retractions of
statements by employees adverse to a company (or its favored union) are oftentimes tainted with coercion and intimidation. For how
could one explain the seeming flip-flopping of position taken by the employees? The figures claimed by petitioner to have been given
to it in support cannot readily be accepted as true.
Second. Petitioner invokes the contract-bar rule. They contend that under Arts. 253, 253-A and 256 of the Labor Code and Book V,
Rule 5, § 3 of its Implementing Rules and Regulations, a petition for certification election or motion for intervention may be
entertained only within 60 days prior to the date of expiration of an existing collective bargaining agreement. The purpose of the rule
is to ensure stability in the relationships of the workers and the management by preventing frequent modifications of any collective
bargaining agreement earlier entered into by them in good faith and for the stipulated original period. Excepted from the contract-
bar rule are certain types of contracts which do not foster industrial stability, such as contracts where the identity of the
representative is in doubt. Any stability derived from such contracts must be subordinated to the employees' freedom of choice
because it does not establish the kind of industrial peace contemplated by the law. 6 Such situation obtains in this case. The
petitioner entered into a CBA with Permex Producer when its status as exclusive bargaining agent of the employees had not been
established yet. prLL

WHEREFORE, the challenged decision and order of the respondent Secretary of Labor are AFFIRMED.

SO ORDERED.

Regalado, Melo, Puno and Martinez, JJ ., concur.

||| (Samahang Manggagawa sa Permex v. Secretary of Labor, G.R. No. 107792, [March 2, 1998], 350 PHIL 342-349)

22. SECOND DIVISION

[G.R. No. 85750. September 28, 1990.]

INTERNATIONAL CATHOLIC MIGRATION COMMISSION, petitioner, vs. HON. PURA CALLEJA IN HER
CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS AND TRADE UNIONS OF THE
PHILIPPINES AND ALLIED SERVICES (TUPAS) WFTU, respondents.

[G.R. No. 89331. September 28, 1990.]

KAPISANAN NG MANGGAGAWA AT TAC SA IRRI - ORGANIZED LABOR ASSOCIATION IN LINE

INDUSTRIES AND AGRICULTURE, petitioner, vs. SECRETARY OF LABOR AND EMPLOYMENT AND
INTERNATIONAL RICE RESEARCH INSTITUTE, INC., respondents.

Araullo, Zambrano, Gruba, Chua Law Firm for petitioner in 85750.

Dominguez, Armamento, Cabana & Associates for petitioner in G.R. No. 89331.

Jimenez & Associates for IRRI.

Alfredo L. Bentulan for private respondent in 85750.

DECISION

MELENCIO-HERRERA, J p:

Consolidated on 11 December 1989, these two cases involve the validity of the claim of immunity by the International Catholic
Migration Commission (ICMC) and the International Rice Research Institute, Inc. (IRRI) from the application of Philippine labor laws.

I
Facts and Issues
A. G.R. No. 85750 — the International Catholic Migration Commission (ICMC) Case.

As an aftermath of the Vietnam War, the plight of Vietnamese refugees fleeing from South Vietnam's communist rule confronted the
international community.

In response to this crisis, on 23 February 1981, an Agreement was forged between the Philippine Government and the United
Nations High Commissioner for Refugees whereby an operating center for processing Indo-Chinese refugees for eventual
resettlement to other countries was to be established in Bataan (Annex "A," Rollo, pp. 22-32).

ICMC was one of those accredited by the Philippine Government to operate the refugee processing center in Morong, Bataan. It was
incorporated in New York, USA, at the request of the Holy See, as a non-profit agency involved in international humanitarian and
voluntary work. It is duly registered with the United Nations Economic and Social Council (ECOSOC) and enjoys Consultative Status,
Category II. As an international organization rendering voluntary and humanitarian services in the Philippines, its activities are
parallel to those of the International Committee for Migration (ICM) and the International Committee of the Red Cross (ICRC) [DOLE
Records of BLR Case No. A-2-62-87, ICMC v. Calleja, Vol. I].

On 14 July 1986, Trade Unions of the Philippines and Allied Services (TUPAS) filed with the then Ministry of Labor and Employment a
Petition for Certification Election among the rank and file members employed by ICMC. The latter opposed the petition on the ground
that it is an international organization registered with the United Nations and, hence, enjoys diplomatic immunity.

On 5 February 1987, Med-Arbiter Anastacio L. Bactin sustained ICMC and dismissed the petition for lack of jurisdiction.

On appeal by TUPAS, Director Pura Calleja of the Bureau of Labor Relations (BLR), reversed the Med-Arbiter's Decision and ordered
the immediate conduct of a certification election. At that time, ICMC's request for recognition as a specialized agency was still
pending with the Department of Foreign Affairs (DEFORAF).
Subsequently, however, on 15 July 1988, the Philippine Government, through the DEFORAF, granted ICMC the status of a specialized
agency with corresponding diplomatic privileges and immunities, as evidenced by a Memorandum of Agreement between the
Government and ICMC (Annex "E", Petition, Rollo, pp. 41-43), infra.

ICMC then sought the immediate dismissal of the TUPAS Petition for Certification Election invoking the immunity expressly granted
but the same was denied by respondent BLR Director who, again, ordered the immediate conduct of a pre-election conference.
ICMC's two Motions for Reconsideration were denied despite an opinion rendered by DEFORAF on 17 October 1988 that said BLR
Order violated ICMC's diplomatic immunity.

Thus, on 24 November 1988, ICMC filed the present Petition for Certiorari with Preliminary Injunction assailing the BLR Order.

On 28 November 1988, the Court issued a Temporary Restraining Order enjoining the holding of the certification election.

On 10 January 1989, the DEFORAF, through its Legal Adviser, retired Justice Jorge C. Coquia of the Court of Appeals, filed a Motion
for Intervention alleging that, as the highest executive department with the competence and authority to act on matters involving
diplomatic immunity and privileges, and tasked with the conduct of Philippine diplomatic and consular relations with foreign
governments and UN organizations, it has a legal interest in the outcome of this case.

Over the opposition of the Solicitor General, the Court allowed DEFORAF intervention.

On 12 July 1989, the Second Division gave due course to the ICMC Petition and required the submittal of memoranda by the parties,
which has been complied with.

As initially stated, the issue is whether or not the grant of diplomatic privileges and immunities to ICMC extends to immunity from
the application of Philippine labor laws.

ICMC sustains the affirmative of the proposition citing (1) its Memorandum of Agreement with the Philippine Government giving it
the status of a specialized agency, (infra); (2) the Convention on the Privileges and Immunities of Specialized Agencies, adopted by
the UN General Assembly on 21 November 1947 and concurred in by the Philippine Senate through Resolution No. 91 on 17 May
1949 (the Philippine Instrument of Ratification was signed by the President on 30 August 1949 and deposited with the UN on 20
March 1950) infra; and (3) Article II, Section 2 of the 1987 Constitution, which declares that the Philippines adopts the generally
accepted principles of international law as part of the law of the land.

Intervenor DEFORAF upholds ICMC's claim of diplomatic immunity and seeks an affirmance of the DEFORAF determination that the
BLR Order for a certification election among the ICMC employees is violative of the diplomatic immunity of said organization.

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

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

Before a Decision could be rendered in the ICMC Case, the Third Division, on 11 December 1989, resolved to consolidate G.R. No.
89331 pending before it with G.R. No.85750, the lower-numbered case pending with the Second Division, upon manifestation by the
Solicitor General that both cases involve similar issues.

The facts disclose that on 9 December 1959, the Philippine Government and the Ford and Rockefeller Foundations signed a
Memorandum of Understanding establishing the International Rice Research Institute (IRRI) at Los Baños, Laguna. It was intended
to be an autonomous, philanthropic, tax-free non-profit, non-stock organization designed to carry out the principal objective of
conducting "basic research on the rice plant, on all phases of rice production, management, distribution and utilization with a view to
attaining nutritive and economic advantage or benefit for the people of Asia and other major rice-growing areas through
improvement in quality and quantity of rice."

Initially, IRRI was organized and registered with the Securities and Exchange Commission as a private corporation subject to all laws
and regulations. However, by virtue of Pres. Decree No. 1620, promulgated on 19 April 1979, IRRI was granted the status,
prerogatives, privileges and immunities of an international organization.

The Organized Labor Association in Line Industries and Agriculture (OLALIA), is a legitimate labor organization with an existing local
union, the Kapisanan ng Manggagawa at TAC sa IRRI (Kapisanan, for short) in respondent IRRI.

On 20 April 1987, the Kapisanan filed a Petition for Direct Certification Election with Region IV, Regional Office of the Department of
Labor and Employment (DOLE).

IRRI opposed the petition invoking Pres. Decree No. 1620 conferring upon it the status of an international organization and granting
it immunity from all civil, criminal and administrative proceedings under Philippine laws.

On 7 July 1987, Med-Arbiter Leonardo M. Garcia, upheld the opposition on the basis of Pres. Decree No. 1620 and dismissed the
Petition for Direct Certification.

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

On appeal, the Secretary of Labor, in a Resolution of 5 July 1989, set aside the BLR Director's Order, dismissed the Petition for
Certification Election, and held that the grant of specialized agency status by the Philippine Government to the IRRI bars DOLE from
assuming and exercising jurisdiction over IRRI. Said Resolution reads in part as follows:

"Presidential Decree No. 1620 which grants to the IRRI the status, prerogatives, privileges and immunities of an
international organization is clear and explicit. It provides in categorical terms that:

"Art. 3 — The Institute shall enjoy immunity from any penal, civil and administrative proceedings, except insofar
as immunity has been expressly waived by the Director-General of the Institution or his authorized
representative.

"Verily, unless and until the Institute expressly waives its immunity, no summons, subpoena, orders, decisions or
proceedings ordered by any court or administrative or quasi-judicial agency are enforceable as against the
Institute. In the case at bar there was no such waiver made by the Director-General of the Institute. Indeed, the
Institute, at the very first opportunity already vehemently questioned the jurisdiction of this Department by filing
an ex-parte motion to dismiss the case."
Hence, the present Petition for Certiorari filed by Kapisanan alleging grave abuse of discretion by respondent Secretary of Labor in
upholding IRRI's diplomatic immunity.

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

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

The Court is now asked to rule upon whether or not the Secretary of Labor committed grave abuse of discretion in dismissing the
Petition for Certification Election filed by Kapisanan.

Kapisanan contends that Article 3 of Pres. Decree No. 1620 granting IRRI the status, privileges, prerogatives and immunities of an
international organization, invoked by the Secretary of Labor, is unconstitutional in so far as it deprives the Filipino workers of their
fundamental and constitutional right to form trade unions for the purpose of collective bargaining as enshrined in the 1987
Constitution. prLL

A procedural issue is also raised. Kapisanan faults respondent Secretary of Labor for entertaining IRRI's appeal from the Order of the
Director of the Bureau of Labor Relations directing the holding of a certification election. Kapisanan contends that pursuant to
Sections 7, 8, 9 and 10 of Rule V 2 of the Omnibus Rules Implementing the Labor Code, the Order of the BLR Director had become
final and unappealable and that, therefore, the Secretary of Labor had no more jurisdiction over the said appeal.

On the other hand, in entertaining the appeal, the Secretary of Labor relied on Section 25 of Rep. Act. No. 6715, which took effect on
21 March 1989, providing for the direct filing of appeal from the Med-Arbiter to the Office of the Secretary of Labor and Employment
instead of to the Director of the Bureau of Labor Relations in cases involving certification election orders.

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

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

"Article III, Section 4. The specialized agencies, their property and assets, wherever located and by whomsoever
held, shall enjoy immunity from every form of legal process except insofar as in any particular case they have
expressly waived their immunity. It is however, understood that no waiver of immunity shall extend to any
measure of execution."

Sec. 5. — The premises of the specialized agencies shall be inviolable. The property and assets of the specialized
agencies, wherever located and by whomsoever held shall be immune from search, requisition, confiscation,
expropriation and any other form of interference, whether by executive, administrative, judicial or legislative
action." (Emphasis ours).

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

"Article 3. Immunity from Legal Process. — The Institute shall enjoy immunity from any penal, civil and
administrative proceedings, except insofar as that immunity has been expressly waived by the Director-General
of the Institute or his authorized representatives."

Thus it is that the DEFORAF, through its Legal Adviser, sustained ICMC's invocation of immunity when in a Memorandum, dated 17
October 1988, it expressed the view that "the Order of the Director of the Bureau of Labor Relations dated 21 September 1988 for
the conduct of Certification Election within ICMC violates the diplomatic immunity of the organization." Similarly, in respect of IRRI,
the DEFORAF speaking through The Acting Secretary of Foreign Affairs, Jose D. Ingles, in a letter, dated 17 June 1987, to the
Secretary of Labor, maintained that "IRRI enjoys immunity from the jurisdiction of DOLE in this particular instance."

The foregoing opinions constitute a categorical recognition by the Executive Branch of the Government that ICMC and IRRI enjoy
immunities accorded to international organizations, which determination has been held to be a political question conclusive upon the
Courts in order not to embarrass a political department of Government.

"It is a recognized principle of international law and under our system of separation of powers that diplomatic
immunity is essentially a political question and courts should refuse to look beyond a determination by the
executive branch of the government, and where the plea of diplomatic immunity is recognized and affirmed by
the executive branch of the government as in the case at bar, it is then the duty of courts to accept the claim of
immunity upon appropriate suggestion by the principal law officer of the government . . . or other officer acting
under his direction. Hence, in adherence to the settled principle that courts may not so exercise their jurisdiction
. . . as to embarrass the executive arm of the government in conducting foreign relations, it is accepted doctrine
that in such cases the judicial department of (this) government follows the action of the political branch and will
not embarrass the latter by assuming an antagonistic jurisdiction." 3

A brief look into the nature of international organizations and specialized agencies is in order. The term "international organization" is
generally used to describe an organization set up by agreement between two or more states. 4 Under contemporary international
law, such organizations are endowed with some degree of international legal personality 5 such that they are capable of exercising
specific rights, duties and powers. 6 They are organized mainly as a means for conducting general international business in which
the member states have an interest. 7 The United Nations, for instance, is an international organization dedicated to the propagation
of world peace.

"Specialized agencies" are international organizations having functions in particular fields. The term appears in Articles
57 8 and 63 9 of the Charter of the United Nations:
"The Charter, while it invests the United Nations with the general task of promoting progress and international
cooperation in economic, social, health, cultural, educational and related matters, contemplates that these tasks
will be mainly fulfilled not by organs of the United Nations itself but by autonomous international organizations
established by inter-governmental agreements outside the United Nations. There are now many such
international agencies having functions in many different fields, e.g. in posts, telecommunications, railways,
canals, rivers, sea transport, civil aviation, meteorology, atomic energy, finance, trade, education and culture,
 health and refugees. Some are virtually world-wide in their membership, some are regional or otherwise limited
in their membership. The Charter provides that those agencies which have 'wide international responsibilities' are
to be brought into relationship with the United Nations by agreements entered into between them and the
Economic and Social Council, are then to be known as 'specialized agencies.'" 10

The rapid growth of international organizations under contemporary international law has paved the way for the development of the
concept of international immunities.

"It is now usual for the constitutions of international organizations to contain provisions conferring certain
immunities on the organizations themselves, representatives of their member states and persons acting on
behalf of the organizations. A series of conventions, agreements and protocols defining the immunities of various
international organizations in relation to their members generally are now widely in force; . . ." 11

There are basically three propositions underlying the grant of international immunities to international organizations. These
principles, contained in the ILO Memorandum are stated thus: 1) international institutions should have a status which protects them
against control or interference by any one government in the performance of functions for the effective discharge of which they are
responsible to democratically constituted international bodies in which all the nations concerned are represented; 2) no country
should derive any national financial advantage by levying fiscal charges on common international funds; and 3) the international
organization should, as a collectivity of States members, be accorded the facilities for the conduct of its official business customarily
extended to each other by its individual member States. 12 The theory behind all three propositions is said to be essentially
institutional in character. "It is not concerned with the status, dignity or privileges of individuals, but with the elements of functional
independence necessary to free international institutions from national control and to enable them to discharge their responsibilities
impartially on behalf of all their members." 13 The raison d'etre for these immunities is the assurance of unimpeded performance of
their functions by the agencies concerned.

The grant of immunity from local jurisdiction to ICMC and IRRI is clearly necessitated by their international character and respective
purposes. The objective is to avoid the danger of partiality and interference by the host country in their internal workings. The
exercise of jurisdiction by the Department of Labor in these instances would defeat the very purpose of immunity, which is to shield
the affairs of international organizations, in accordance with international practice, from political pressure or control by the host
country to the prejudice a member States of the organization, and to ensure the unhampered performance of their functions.

ICMC's and IRRI's immunity from local jurisdiction by no means deprives labor of its basic rights, which are guarantee by Article II,
Section 18, 14 Article III, Section 8, 15 and Article XIII, Section 3 (supra), of the 1987 Constitution; and implemented by Articles
243 and 246 of the Labor Code, 16 relied on by the BLR Director and by Kapisanan.

For, ICMC employees are not without recourse whenever there are disputes to be settled. Section 31 of the Convention on the
Privileges and Immunities of the Specialized Agencies of the United Nations 17 provides that "each specialized agency shall make
provision for appropriate modes of settlement of: (a) disputes arising out of contracts or other disputes of private character to which
the specialized agency is a party." Moreover, pursuant to Article IV of the Memorandum of Agreement between ICMC and the
Philippine Government, whenever there is any abuse of privilege by ICMC, the Government is free to withdraw the privileges and
immunities accorded. Thus:

"Article IV. Cooperation with Government Authorities. — 1. The Commission shall cooperate at all times with the
appropriate authorities of the Government to ensure the observance of Philippine laws, rules and regulations,
facilitate the proper administration of justice and prevent the occurrences of any abuse of the privileges and
immunities granted its officials and alien employees in Article III of this Agreement to the Commission.

"2. In the event that the Government determines that there has been an abuse of the privileges and immunities
granted under this Agreement, consultations shall be held between the Government and the Commission to
determine whether any such abuse has occurred and, if so, the Government shall withdraw the privileges and
immunities granted the Commission and its officials."

Neither are the employees of IRRI without remedy in case of dispute with management as, in fact, there had been organized a forum
for better management-employee relationship as evidenced by the formation of the Council of IRRI Employees and Management
(CIEM) wherein "both management and employees were and still are represented for purposes of maintaining mutual and beneficial
cooperation between IRRI and its employees." The existence of this Union factually and tellingly belies the argument that Pres.
Decree No. 1620, which grants to IRRI the status, privileges and Immunities of an international organization, deprives its employees
of the right to self-organization. LexLib

The immunity granted being "from every form of legal process except in so far as in any particular case they have expressly waived
their immunity," it is inaccurate to state that a certification election is beyond the scope of that immunity for the reason that it is not
a suit against ICMC. A certification election cannot be viewed as an independent or isolated process. It could trigger off a series of
events in the collective bargaining process together with related incidents and/or concerted activities, which could inevitably involve
ICMC in the "legal process," which includes "any penal, civil and administrative proceedings." The eventuality of Court litigation is
neither remote and from which international organizations are precisely shielded to safeguard them from the disruption of their
functions. Clauses on jurisdictional immunity are said to be standard provisions in the constitutions of international organizations.
"The immunity covers the organization concerned, its property and its assets. It is equally applicable to proceedings in personam and
proceedings in rem." 18

We take note of a Manifestation, dated 28 September 1989, in the ICMC Case (p. 161, Rollo), wherein TUPAS calls attention to the
case entitled "International Catholic Migration Commission v. NLRC, et als., (G.R. No. 72222, 30 January 1989, 169 SCRA 606), and
claims that, having taken cognizance of that dispute (on the issue of payment of salary for the unexpired portion of a six-month
probationary employment), the Court is now estopped from passing upon the question of DOLE jurisdiction over ICMC.

We find no merit to said submission. Not only did the facts of said controversy occur between 1983-1985, or before the grant to
ICMC on 15 July 1988 of the status of a specialized agency with corresponding immunities, but also because ICMC in that case did
not invoke its immunity and, therefore, may be deemed to have waived it, assuming that during that period (1983-1985) it was
tacitly recognized as enjoying such immunity.

Anent the procedural issue raised in the IRRI Case, suffice it to state that the Decision of the BLR Director, dated 15 February 1989,
had not become final because of a Motion for Reconsideration filed by IRRI. Said Motion was acted upon only on 30 March 1989
when Rep. Act No. 6715, which provides for direct appeals from the Orders of the Med-Arbiter to the Secretary of Labor in
certification election cases either from the order or the results of the election itself, was already in effect, specifically since 21 March
1989. Hence, no grave abuse of discretion may be imputed to respondent Secretary of Labor in his assumption of appellate
jurisdiction, contrary to Kapisanan's allegations. The pertinent portion of that law provides:

"Article 259. — Any party to an election may appeal the order or results of the election as determined by the
Med-Arbiter directly to the Secretary of Labor and Employment on the ground that the rules and regulations or
parts thereof established by the Secretary of Labor and Employment for the conduct of the election have been
violated. Such appeal shall be decided within 15 calendar days" (Emphasis ours).
En passant, the Court is gratified to note that the heretofore antagonistic positions assumed by two departments of the executive
branch of government have been rectified and the resultant embarrassment to the Philippine Government in the eyes of the
international community now, hopefully, effaced.

WHEREFORE, in G.R. No. 85750 (the ICMC Case), the Petition is GRANTED, the Order of the Bureau of Labor Relations for
certification election is SET ASIDE, and the Temporary Restraining Order earlier issued is made PERMANENT.

In G.R. No. 89331 (the IRRI Case), the Petition is Dismissed, no grave abuse of discretion having been committed by the Secretary
of Labor and Employment in dismissing the Petition for Certification Election.

No pronouncement as to costs.

SO ORDERED.

Padilla, Sarmiento and Regalado, JJ., concur.

Paras, J., is on leave.

||| (International Catholic Migration Commission v. Calleja, G.R. No. 85750, 89331, [September 28, 1990], 268 PHIL 134-153)

23. SECOND DIVISION

[G.R. No. 97020. June 8, 1992.]

CALIFORNIA MANUFACTURING CORPORATION, petitioner, vs. THE HONORABLE UNDERSECRETARY OF

LABOR BIENVENIDO E. LAGUESMA ABD FEDERATION OF FREE WORKERS (FFW), CALIFORNIA MFG.
CORP. SUPERVISORS UNION CHAPTER (CALMASUCO), respondents.

V.E. del Rosario & Associates for petitioner.

Ferdinand E. Laguna for private respondent.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; CERTIFICATION ELECTION; NOT APPLICABLE TO ESTABLISHMENTS
WHERE THERE EXISTS A CERTIFIED BARGAINING AGENT. — The Court has already categorically ruled that Article 257 of the Labor
Code is applicable to unorganized labor organizations and not to establishments where there exists a certified bargaining agent which
had previously entered into a collective bargaining agreement with the management (Associated Labor Unions [ALU] v. Calleja, G.R.
No. 85085, November 6, 1989, 179 SCRA 127). Otherwise stated, the establishment concerned must have no certified bargaining
agent (Associated Labor Unions [ALU] v. Calleja, G.R. No. 82260, July 19, 1989, 175 SCRA 490). In the instant case, it is beyond
cavil that the supervisors of CMC which constitute a bargaining unit separate and distinct from that of the rank-and-file, have no
such agent, thus they correctly filed a petition for certification election thru union FFW-CALMASUCO, likewise indubitably a legitimate
labor organization.

2. ID.; ID.; ID.; TWENTY-FIVE PERCENT (25%) SUBSCRIPTION REQUIREMENT; IMMATERIAL THERETO; REASONS THEREFOR. —
CMC's insistence on the 25% subscription requirement, is clearly immaterial. The same has been expressly deleted by Section 24
of Republic Act No. 6715 and is presently prescribed only in organized establishments, that is, those with existing bargaining agents.
Compliance with the said requirement need not even be established with absolute certainty. The Court has consistently ruled that
"even conceding that the statutory requirement of 30% (now 25%) of the labor force asking for a certification election had not been
strictly complied with, the Director (now the Med-Arbiter) is still empowered to order that it be held precisely for the purpose of
ascertaining which of the contending labor organizations shall be the exclusive collective bargaining agent (Atlas Free Workers Union
(AFWU-PSSLU Local v. Noriel, G.R. No. L-51905, May 26, 1981, 104 SCRA 565). The requirement then is relevant only when it
becomes mandatory to conduct a certification election. In all other instances, the discretion, according to the rulings of this Tribunal,
ought to be ordinarily exercised in favor of a petition for certification (National Mines and Allied Workers Union (NAMAWU-
UIL) v. Luna, et al., G.R. No. L-46722, June 15, 1978, 83 SCRA 607).

3. ID.; ID.; ID.; AS A GENERAL RULE, AN EMPLOYER HAS NO STANDING TO QUESTION THEREOF; EXCEPTION. — CMC, as employer
has no standing to question a certification election (Asian Design and Manufacturing Corporation v. Calleja, et al., G.R. No. 77415,
June 29, 1989, 174 SCRA 477). Such is the sole concern of the workers. The only exception is where the employer has to file the
petition for certification election pursuant to Article 259 (now 258) of the Labor Code because it was requested to bargain
collectively. Thereafter, the role of the employer in the certification process ceases. The employer becomes merely a by-stander. Oft-
quoted is the pronouncement of the Court on management interference in certification elections, thus: "On matters that should be
the exclusive concern of labor, the choice of a collective bargaining representative, the employer is definitely an intruder. His
participation, to say the least, deserves no encouragement. This Court should be the last agency to lend support to such an attempt
at interference with purely internal affair of labor." (Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano, G.R. No.
L-61153,, January 17, 1983, 120 SCRA 64 citing Consolidated Farms, Inc. v. Noriel, G.R. No. L-47752, July 31, 1978, 84 SCRA 469,
473).

DECISION

PARAS, J p:

This is a petition for review on certiorari with prayer for preliminary injunction and/or temporary restraining order seeking to annul
and set aside the (a) resolution * of the Department of Labor and Employment dated October 16, 1990 in OS-A-10-283-90 (NCR-
OD-M-90-05-095) entitled "In Re: Petition for Certification Election Among the Supervisors of California Manufacturing Corporation,
Federation of Free Workers (FFW) California Mfg. Corp. Supervisors Union Chapter (CALMASUCO), petitioner-appellee, California
Manufacturing Corporation, employer-appellant" which denied herein petitioner's appeal and affirmed the order of Med-Arbiter
Arsenia Q. Ocampo dated August 22, 1990 directing the conduct of a certification election among the supervisory employees of
California Manufacturing Corporation, and (b) the Order **of the same Department denying petitioner's motion for reconsideration.

As culled from the records, the following facts appear undisputed:

On May 24, 1990, a petition for certification election among the supervisors of California Manufacturing Corporation (CMC for brevity)
was filed by the Federation of Free Workers (FFW) — California Manufacturing Corporation Supervisors Union Chapter (CALMASUCO),
alleging inter alia, that it is a duly registered federation with registry certificate no. 1952-TTT-IP, while FFW-CALMASUCO Chapter is
a duly registered chapter with registry certificate no. 1-AFBI-038 issued on May 21, 1990 (Annex "A", Rollo, p. 63); that the
employer CMC employs one hundred fifty (150) supervisors; that there is no recognized supervisors union existing in the company;
that the petition is filed in accordance with Article 257 of the Labor Code, as amended by Republic Act No. 6715; and that the
petition is nevertheless supported by a substantial number of signatures of the employees concerned (Annexes "E" and "F", Ibid., pp.
28-29). LLjur

In its answer, CMC, now petitioner herein, alleged among others, that the petition for the holding of a certification election should be
denied as it is not supported by the required twenty-five percent (25%) of all its supervisors and that a big number of the supposed
signatories to the petition are not actually supervisors as they have no subordinates to supervise, nor do they have the powers and
functions which under the law would classify them as supervisors (Annex "D", Ibid., p. 25).

On July 24, 1990, FFW-CALMASUCO filed its reply maintaining that under the law, when there is no existing unit yet in a particular
bargaining unit at the time a petition for certification election is filed, the 25% rule on the signatories does not apply; that the
"organized establishment" contemplated by law does not refer to a "company"per se but rather refers to a "bargaining unit" which
may be of different classifications in a single company; that CMC has at least two (2) different bargaining units, namely, the
supervisory (unorganized) and the rank-and-file (organized); that the signatories to the petition have been performing supervisory
functions; that since it is CMC which promoted them to the positions of supervisors, it is already estopped from claiming that they
are not supervisors; that the said supervisors were excluded from the coverage of the collective bargaining agreement of its rank-
and-file employees; and that the contested signatories are indeed supervisors as shown in the "CMC Master List of Employees" of
January 2, 1990 and the CMS Publication (Annex "G", Ibid., p. 30).

On August 22, 1990, the Med-Arbiter issued an order, the decretal portion of which reads:

"WHEREFORE, premises considered, it is hereby ordered that a certification election be conducted among the
supervisory employees of California Manufacturing Corporation within twenty (20) days from receipt hereof with
the usual pre-election conference of the parties to thresh out the mechanics of the election. The payroll of the
company three (3) months prior to the filing of the petition shall be used as the basis in determining the list of
eligible voters.

'The choices are:

'1. Federation of Free Workers (FFW) — California Manufacturing Corporation Supervisors

Union Chapter (CALMASUCO); and

'2. No union.'

"SO ORDERED." (Annex "H", Ibid., p. 33)

CMC thereafter appealed to the Department of Labor and Employment which, however, affirmed the above order in its assailed
resolution dated October 16, 1990 (Annex "B", Ibid., p. 18). CMC's subsequent motion for reconsideration was also denied in its
order dated November 17, 1990 (Annex "A", Ibid., p. 15), hence, his petition.prcd

The issues are presented by CMC in this wise:

"a) whether or not the term "unorganized establishment" in Article 257 of the Labor Code refers to a bargaining
unit or a business establishment;

"b) whether or not non-supervisors can participate in a supervisor's certification election; and

"c) whether or not the two (2) different and separate plants of herein petitioner in Parañaque and Las Piñas can
be treated as a single bargaining unit."

The petition must be denied.

The Court has already categorically ruled that Article 257 of the Labor Code is applicable to unorganized labor organizations and not
to establishments where there exists a certified bargaining agent which had previously entered into a collective bargaining
agreement with the management (Associated Labor Unions [ALU] v. Calleja, G.R. No. 85085, November 6, 1989, 179 SCRA 127)
(Underscoring supplied). Otherwise stated, the establishment concerned must have no certified bargaining agent (Associated Labor
Unions [ALU] v. Calleja, G.R. No. 82260, July 19, 1989, 175 SCRA 490). In the instant case, it is beyond cavil that the supervisors of
CMC which constitute a bargaining unit separate and distinct from that of the rank-and-file, have no such agent, thus they correctly
filed a petition for certification election thru union FFW-CALMASUCO, likewise indubitably a legitimate labor organization. CMC's
insistence on the 25% subscription requirement, is clearly immaterial. The same has been expressly deleted by Section 24
of Republic Act No. 6715 and is presently prescribed only in organized establishments, that is, those with existing bargaining agents.
Compliance with the said requirement need not even be established with absolute certainty. The Court has consistently ruled that
"even conceding that the statutory requirement of 30% (now 25%) of the labor force asking for a certification election had not been
strictly complied with, the Director (now the Med-Arbiter) is still empowered to order that it be held precisely for the purpose of
ascertaining which of the contending labor organizations shall be the exclusive collective bargaining agent (Atlas Free Workers Union
(AFWU)-PSSLU Local v. Noriel, G.R. No. L-51905, May 26, 1981, 104 SCRA 565). The requirement then is relevant only when it
becomesmandatory to conduct a certification election. In all other instances, the discretion, according to the rulings of this Tribunal,
ought to be ordinarily exercised in favor of a petition for certification (National Mines and Allied Workers Union (NAMAWU-UIF) v.
Luna, et al., G.R. No. L-46722, June 15, 1978, 83 SCRA 607).

In any event, CMC as employer has no standing to question a certification election (Asian Design and Manufacturing Corporation v.
Calleja, et al., G.R. No. 77415, June 29, 1989, 174 SCRA 477). Such is the sole concern of the workers. The only exception is where
the employer has to file the petition for certification election pursuant toArticle 259 (now 258) of the Labor Code because it was
requested to bargain collectively. Thereafter, the role of the employer in the certification process ceases. The employer becomes
merely a by-stander. Oft-quoted is the pronouncement of the Court on management interference in certification elections, thus:

"On matters that should be the exclusive concern of labor, the choice of a collective bargaining representative,
the employer is definitely an intruder. His participation, to say the least, deserves no encouragement. This Court
should be the last agency to lend support to such an attempt at interference with purely internal affair of labor."
(Trade Unions of the Philippines and Allied Services (TUPAS) v. Trajano, G.R. No. L-61153, January 17, 1983,
120 SCRA 64 citing Consolidated Farms, Inc. v. Noriel, G.R. No. L-47752. July 31, 1978, 84 SCRA 469, 473).
PREMISES CONSIDERED, the petition is DISMISSED for utter lack of merit.

SO ORDERED.

Narvasa, C.J., Padilla and Regalado, JJ., concur.

Nocon, J., is on leave.

||| (California Manufacturing Corp. v. Laguesma, G.R. No. 97020, [June 8, 1992], 285 PHIL 169-174)

24. FIRST DIVISION

[G.R. No. 75810. September 9, 1991.]

KAISAHAN NG MANGGAGAWANG PILIPINO (KAMPIL-KATIPUNAN), petitioner, vs. HON. CRESENCIANO

B. TRAJANO, in his capacity as Director, Bureau of Labor Relations, and VIRON GARMENTS MFG., CO.,
INC., respondents.

Esteban M. Mendoza for petitioner.

SYLLABUS

LABOR AND SOCIAL LEGISLATION; LABOR CODE AND ITS IMPLEMENTING RULE; CERTIFICATION ELECTION; ORDER BARRING
HOLDING THEREOF A GRAVE ABUSE OF DISCRETION WHERE THE PROSCRIPTIONS TO CERTIFICATION ELECTION ENUMERATED
UNDER THE LAW ARE INEXISTENT AND/OR TOOK PLACE AFTER INITIATION OF CERTIFICATION ELECTION CASE. — The stark,
incontrovertible fact is that from February 27, 1981 — when NAFLU was proclaimed the exclusive bargaining representative of all
VIRON employees — to April 11, 1985 — when KAMPIL filed its petition for certification election or a period of more than four (4)
years, no collective bargaining agreement was ever executed, and no deadlock ever arose from negotiations between NAFLU and
VIRON resulting in conciliation proceedings or the filing of a valid strike notice. The respondents advert to a strike declared by NAFLU
on October 26, 1986 for refusal of VIRON to bargain and for violation of terms and conditions of employment, which was settled by
the parties' agreement, and to another strike staged on December 6, 1986 in connection with a claim of violation of said agreement,
a dispute which has since been certified for compulsory arbitration by the Secretary of Labor & Employment. Obviously, however,
these activities took placeafter the initiation of the certification election case by KAMPIL, and it was grave abuse of discretion to have
regarded them as precluding the holding of the certification election thus prayed for.

RESOLUTION

NARVASA, J p:

The propriety of holding a certification election is the issue in the special civil action of certiorari at bar.

By virtue of a Resolution of the Bureau of Labor Relations dated February 27, 1981, the National Federation of Labor Unions (NAFLU)
was declared the exclusive bargaining representative of all rank-and-file employees of Viron Garments Manufacturing Co., Inc.
(VIRON). llcd

More than four years thereafter, or on April 11, 1985, another union, the Kaisahan ng Manggagawang Pilipino (KAMPIL-Katipunan)
filed with the Bureau of Labor Relations a petition for certification election among the employees of VIRON. The petition allegedly
counted with the support of more than thirty percent (30%) of the workers at VIRON.

NAFLU opposed the petition, as might be expected. The Med-Arbiter however ordered, on June 14, 1985, that a certification election
be held at VIRON as prayed for, after ascertaining that KAMPIL had complied with all the requirements of law and that since the
certification of NAFLU as sole bargaining representative in 1981, no collective bargaining agreement had been executed between it
and VIRON.

NAFLU appealed. It contended that at the time the petition for certification election was filed on April 11, 1985, it was in process of
collective bargaining with VIRON; that there was in fact a deadlock in the negotiations which had prompted it to file a notice of
strike; and that these circumstances constituted a bar to the petition for election in accordance with Section 3, Rule V, Book V of the
Omnibus Rules Implementing the Labor Code, 1 reading as follows: Cdpr

"SEC. 3. When to file. — In the absence of a collective bargaining agreement submitted in accordance with
Article 231 of the Code, a petition for certification election may be filed at any time. However, no certification
election may be held within one year from the date of issuance of declaration of a final certification election
result. Neither may a representation question be entertained if, before the filing of a petition for certification
election, a bargaining deadlock to which an incumbent or certified bargaining agent is a party had been
submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.

If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a
petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior
to the expiry date of such agreement."

Finding merit in a NAFLU's appeal, the Director of Labor Relations rendered a Resolution on April 30, 1986 setting aside the Med-
Arbiter's Order of June 14, 1985 and dismissing KAMPIL's petition for certification election. This disposition is justified in the
Resolution as follows.

". . . While it may be true that the one year period (mentioned in Section 3 above quoted) has long run its
course since intervenor NAFLU was certified on February 27, 1981, it could not be said, however, that NAFLU
slept on its right to bargain collectively with the employer. If a closer look was made on the history of labor-
 management relations in the company, it could be readily seen that the delay in the negotiations for and
conclusion of a collective agreement — the object of the one-year period could be attributed first, on the
exhaustion of all legal remedies in the representation question twice initiated in the company before the filing of
the present petition and second, to management who had been resisting the representations of NAFLU in
collective bargaining.

The one-year period therefore, should not be applied literally to the present dispute, especially considering that
intervenor had to undergo a strike to bring management to the negotiation table. . . ."

KAMPIL moved for reconsideration, and when this was denied, instituted in this Court the present certiorari action.

It is evident that the prohibition imposed by law on the holding of a certification election "within one year from the date of issuance
of declaration of a final certification election result" — in this case, from February 27, 1981, the date of the Resolution declaring
NAFLU the exclusive bargaining representative of rank-and-file workers of VIRON — can have no application to the case at bar. That
one-year period — known as the "certification year" during which the certified union is required to negotiate with the employer, and
certification election is prohibited 2 — has long since expired.

Thus the question for resolution is whether or not KAMPIL's petition for certification election is barred because, before its filing, a
bargaining deadlock between VIRON and NAFLU, as the incumbent bargaining agent, had been submitted to conciliation or
arbitration or had become the subject of a valid notice of strike or lockout, in accordance with Section 3, Rule V, Book V of the
Omnibus Rules above quoted.

Again it seems fairly certain that prior to the filing of the petition for election in this case, there was no such "bargaining deadlock . .
. (which) had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout." To be
sure, there are in the record assertions by NAFLU that its attempts to bring VIRON to the negotiation table had been unsuccessful
because of the latter's recalcitrance, and unfulfilled promises to bargain collectively; 3 but there is no proof that it had taken any
action to legally coerce VIRON to comply with its statutory duty to bargain collectively. It could have charged VIRON with unfair labor
practice; but it did not. It could have gone on a legitimate strike in protest against VIRON's refusal to bargain collectively and compel
it to do so; but it did not. There are assertions by NAFLU, too, that its attempts to bargain collectively had been delayed by
continuing challenges to the resolution pronouncing it the sole bargaining representative in VIRON; but there is no adequate
substantiation thereof, or of how it did in fact prevent initiation of the bargaining process between it and VIRON. LibLex

The stark, incontrovertible fact is that from February 27, 1981 — when NAFLU was proclaimed the exclusive bargaining
representative of all VIRON employees — to April 11, 1985 — when KAMPIL filed its petition for certification election or a period of
more than four (4) years, no collective bargaining agreement was ever executed, and no deadlock ever arose from negotiations
between NAFLU and VIRON resulting in conciliation proceedings or the filing of a valid strike notice.

The respondents advert to a strike declared by NAFLU on October 26, 1986 for refusal of VIRON to bargain and for violation of terms
and conditions of employment, which was settled by the parties' agreement, and to another strike staged on December 6, 1986 in
connection with a claim of violation of said agreement, a dispute which has since been certified for compulsory arbitration by the
Secretary of Labor & Employment. 4 Obviously, however, these activities took place after the initiation of the certification election
case by KAMPIL, and it was grave abuse of discretion to have regarded them as precluding the holding of the certification election
thus prayed for.

WHEREFORE, it being apparent that none of the proscriptions to certification election set out in the law exists in the case at bar, and
it was in the premises grave abuse of discretion to have ruled otherwise, the contested Resolution of the respondent Director of the
Bureau of Labor Relations dated April 30, 1986 in BLR Case No. A-7-139-85 (BZEO-CE-04-004-85) is NULLIFIED AND SET ASIDE.
Costs against private respondent.

SO ORDERED.

Cruz, Griño-Aquino and Medialdea, JJ., concur.

||| (Kaisahan ng Manggagawang Pilipino v. Trajano, G.R. No. 75810 (Resolution), [September 9, 1991], 278 PHIL 458-463)

25. FIRST DIVISION

[G.R. No. 118915. February 4, 1997.]

CAPITOL MEDICAL CENTER ALLIANCE OF CONCERNED EMPLOYEES-UNIFIED FILIPINO SERVICE

WORKERS, (CMC-ACE-UFSW), petitioners, vs. HON. BIENVENIDO E. LAGUESMA, Undersecretary of the
Department of Labor and Employment; CAPITOL MEDICAL CENTER EMPLOYEES ASSOCIATION-
ALLIANCE OF FILIPINO WORKERS AND CAPITOL MEDICAL CENTER INCORPORATED AND DRA.
THELMA CLEMENTE, President, respondents.

Bayani G. Diwa for petitioner.

Edgar R. Martir for private respondent.

SYLLABUS

1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; GRAVE ABUSE OF DISCRETION; NOT COMMITTED IN CASE AT BAR. —
The pivotal issue in this case is whether or not public respondent committed grave abuse of discretion in dismissing the petition for
certification election, and in directing the hospital to negotiate a collective bargaining agreement with the respondent union. While it
is true that in the case at bench, one year had lapsed since the time of declaration of a final certification result, and that there is no
collective bargaining deadlock, public respondent did not commit grave abuse of discretion when it ruled in respondent union's favor
since the delay in the forging of the CBA could not be attributed to the fault of the latter. A scrutiny of the records will further reveal
that after respondent union was certified as the bargaining agent of CMC, it invited the employer hospital to the bargaining table by
submitting its economic proposal for a CBA. However, CMC refused to negotiate with respondent union and instead challenged the
latter's legal personality through a petition for cancellation of the certificate of registration which eventually reached this Court. The
decision affirming the legal status of respondent union should have left CMC with no other recourse but to bargain collectively; but
still it did not. Respondent union was left with no other recourse but to file a notice of strike against CMC for unfair labor practice
with the National Conciliation and Mediation Board. If the law proscribes the conduct of a certification election when there is a
bargaining deadlock submitted to conciliation or arbitration, with more reason should it not be conducted if despite attempts to bring
an employer to the negotiation table by the certified bargaining agent, there was "no reasonable effort in good faith" on the
employer to bargain collectively. Thus. Section 3, Rule V, Book V of the Implementing Rules should be interpreted liberally so as to
include a circumstance e.g. where a CBA could not be concluded due to the failure of one party to willingly perform its duty to
bargain collectively. The order for the hospital to bargain is based on its failure to bargain collectively with respondent union.

DECISION

HERMOSISIMA, JR., J p:

This petition for certiorari and prohibition seeks to reverse and set aside the Order dated November 18, 1994 of public respondent
Bienvenido E. Laguesma, Undersecretary of the Department of Labor and Employment, in Case No. OS-A-136-94 1 which dismissed
the petition for certification election filed by petitioner for lack of merit and further directed private respondent hospital to negotiate
a collective bargaining agreement with respondent union, Capitol Medical Center Employees Association-Alliance of Filipino Workers.

The antecedent facts are undisputed.

On February 17, 1992, Med-Arbiter Rasidali C. Abdullah issued an Order which granted respondent union's petition for certification
election among the rank-and-file employees of the Capitol Medical Center. 2 Respondent CMC appealed the Order to the Office of the
Secretary by questioning the legal status of respondent union's affiliation with the Alliance of Filipino Workers (AFW). To correct any
supposed infirmity in its legal status, respondent union registered itself independently and withdrew the petition which had earlier
been granted. Thereafter, it filed another petition for certification election.

On May 29, 1992, Med-Arbiter Manases T. Cruz issued an order granting the petition for certification election. 3 Respondent CMC
again appealed to the Office of the Secretary which affirmed 4 the Order of the Med-Arbiter granting the certification election.

On December 9, 1992, elections were finally held with respondent union garnering 204 votes, 168 in favor of no union and 8 spoiled
ballots out of a total of 380 votes cast. Thereafter, on January 4, 1993, Med-Arbiter Cruz issued an Order certifying respondent union
as the sole and exclusive bargaining representative of the rank and file employees at CMC. 5

Unsatisfied with the outcome of the elections, respondent CMC again appealed to the Office of the Secretary of Labor which appeal
was denied on February 26, 1993. 6A subsequent motion for reconsideration filed by respondent CMC was likewise denied on March
23, 1993. 7

Respondent CMC's basic contention was the supposed pendency of its petition for cancellation of respondent union's certificate of
registration in Case No. NCR-OD-M-92211-028. In the said case, Med-Arbiter Paterno Adap issued an Order dated February 4, 1993
which declared respondent union's certificate of registration as null and void. 8 However, this order was reversed on appeal by the
Officer-in-Charge of the Bureau of Labor Relations in her Order issued on April 13, 1993. The said Order dismissed the motion for
cancellation of the certificate of registration of respondent union and declared that it was not only a bona fide affiliate or local of a
federation (AFW), but a duly registered union as well. Subsequently, this case reached this Court in Capitol Medical Center, Inc. v.
Hon. Perlita Velasco, G.R. No. 110718, where we issued a Resolution dated December 13, 1993, dismissing the petition of CMC for
failure to sufficiently show that public respondent committed grave abuse of discretion. 9 The motion for reconsideration filed by
CMC was likewise denied in our Resolution dated February 2, 1994. 10 Thereafter, on March 23, 1994, we issued an entry of
judgment certifying that the Resolution dated December 13, 1993 has become final and executory. 11

Respondent union, after being declared as the certified bargaining agent of the rank-and-file employees of respondent CMC by Med-
Arbiter Cruz, presented economic proposals for the negotiation of a collective bargaining agreement (CBA). However, respondent
CMC contended that CBA negotiations should be suspended in view of the Order issued on February 4, 1993 by Med-Arbiter Adap
declaring the registration of respondent union as null and void. In spite of the refusal of respondent CMC, respondent union still
persisted in its demand for CBA negotiations, claiming that it has already been declared as the sole and exclusive bargaining agent of
the rank-and-file employees of the hospital.

Due to respondent CMC's refusal to bargain collectively, respondent union filed a notice of strike on March 1, 1993. After complying
with the other legal requirements, respondent union staged a strike on April 15, 1993. On April 16, 1993, the Secretary of Labor
assumed jurisdiction over the case and issued an order certifying the same to the National Labor Relations Commission for
compulsory arbitration where the said case is still pending. 12

It is at this juncture that petitioner union, on March 24, 1994, filed a petition for certification election among the regular rank-and-
file employees of the Capitol Medical Center Inc. It alleged in its petition that: 1) three hundred thirty one (331) out of the four
hundred (400) total rank-and-file employees of respondent CMC signed a petition to conduct a certification election; and 2) that the
said employees are withdrawing their authorization for the said union to represent them as they have joined and formed the union
Capitol Medical Center Alliance of Concerned Employees (CMC-ACE). They also alleged that a certification election can now be
conducted as more that 12 months have lapsed since the last certification election was held. Moreover, no certification election was
conducted during the twelve (12) months prior to the petition, and no collective bargaining agreement has as yet been concluded
between respondent union and respondent CMC despite the lapse of twelve months from the time the said union was voted as the
collective bargaining representative. aisadc

On April 12, 1994, respondent union opposed the petition and moved for its dismissal. It contended that it is the certified bargaining
agent of the rank-and-file employees of the Hospital, which was confirmed by the Secretary of Labor and Employment and by this
Court. It also alleged that it was not remiss in asserting its right as the certified bargaining agent for it continuously demanded the
negotiation of a CBA with the hospital despite the latter's avoidance to bargain collectively. Respondent union was even constrained
to strike on April 15, 1993, where the Secretary of Labor intervened and certified the dispute for compulsory arbitration.
Furthermore, it alleged that majority of the signatories who supported the petition were managerial and confidential employees and
not members of the rank-and-file, and that there was no valid disaffiliation of its members, contrary to petitioner's allegations.

Petitioner, in its rejoinder, claimed that there is no legal impediment to the conduct of a certification election as more than twelve
(12) months had lapsed since respondent union was certified as the exclusive bargaining agent and no CBA was as yet concluded. It
also claimed that the other issues raised could only be resolved by conducting another certification election.

In its surrejoinder, respondent union alleged that the petition to conduct a certification election was improper, immoral and in
manifest disregard of the decisions rendered by the Secretary of Labor and by this Court. It claimed that CMC employed "legal
obstructionism's" in order to let twelve months pass without a CBA having been concluded between them so as to pave the way for
the entry of petitioner union.
On May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for certification election among the rank and
file employees. 13 It ruled that the issue was the majority status of respondent union. Since no certification election was held within
one year from the date of issuance of a final certification election result and there was no bargaining deadlock between respondent
union and the employees that had been submitted to conciliation or had become the subject of a valid notice of strike or lock out,
there is no bar to the holding of a certification election. 14

Respondent union appealed from the said Order, alleging that the Med-Arbiter erred in granting the petition for certification election
and in holding that this case falls under Section 3, Rule V, Book V of the Rules Implementing the Labor Code. 15 It also prayed that
the said provision must not be applied strictly in view of the facts in this case.

Petitioner union did not file any opposition to the appeal.

On November 18, 1994, public respondent rendered a Resolution granting the appeal. 16 He ratiocinated that while the petition was
indeed filed after the lapse of one year from the time of declaration of a final certification result, and that no bargaining deadlock had
been submitted for conciliation or arbitration, respondent union was not remiss on its right to enter into a CBA for it was the CMC
which refused to bargain collectively. 17

CMC and petitioner union separately filed motions for reconsideration of the said Order.

CMC contended that in certification election proceedings, the employer cannot be ordered to bargain collectively with a union since
the only issue involved is the determination of the bargaining agent of the employees.

Petitioner union claimed that to completely disregard the will of the 331 rank-and-file employees for a certification election would
result in the denial of their substantial rights and interests. Moreover, it contended that public respondent's "indictment" that
petitioner "capitalize (sic) on the ensuing delay which was caused by the Hospital, . . ." was unsupported by the facts and the
records.

On January 11, 1995, public respondent issued a Resolution which denied the two motions for reconsideration, hence this
petition. 18

The pivotal issue in this case is whether or not public respondent committed grave abuse of discretion in dismissing the petition for
certification election, and in directing the hospital to negotiate a collective bargaining agreement with the said respondent union.

Petitioner alleges that public respondent Undersecretary Laguesma denied it due process when it ruled against the holding of a
certification election. It further claims that the denial of due process can be gleaned from the manner by which the assailed
resolution was written, i.e., instead of the correct name of the mother federation UNIFIED, it was referred to as UNITED; and that
the respondent union's name CMCEA-AFW was referred to as CMCEA-AFLO. Petitioner maintains that such errors indicate that the
assailed resolution was prepared with "indecent haste."

We do not subscribe to petitioner's contention.

The errors pointed to by petitioner can be classified as mere typographical errors which cannot materially alter the substance and
merit of the assailed resolution.

Petitioner cannot merely anchor its position on the aforementioned erroneous' names just to attain a reversal of the questioned
resolution. As correctly observed by the Solicitor General, petitioner is merely "nit-picking, vainly trying to make a monumental issue
out of a negligible error of the public respondent." 19

Petitioner also assails public respondents' findings that the former "capitalize (sic) on the ensuing delay which was caused by the
hospital and which resulted in the non-conclusion of a CBA within the certification year." 20 It further argues that the denial of its
motion for a fair hearing was a clear case of a denial of its right to due process.

Such contention of petitioner deserves scant consideration.

A perusal of the record shows that petitioner failed to file its opposition to oppose the grounds for respondent union's appeal.

It was given an opportunity to be heard but lost it when it refused to file an appellee's memorandum.

Petitioner insists that the circumstances prescribed in Section 3, Rule V, Book V of the Rules Implementing the Labor Code where a
certification election should be conducted, viz: (1) that one year had lapsed since the issuance of a final certification result; and (2)
that there is no bargaining deadlock to which the incumbent or certified bargaining agent is a party has been submitted to
conciliation or arbitration, or had become the subject of a valid notice of strike or lockout, are present in this case. It further claims
that since there is no evidence on record that there exists a CBA deadlock, the law allowing the conduct of a certification election
after twelve months must be given effect in the interest of the right of the workers to freely choose their sole and exclusive
bargaining agent.

While it is true that, in the case at bench, one year had lapsed since the time of declaration of a final certification result, and that
there is no collective bargaining deadlock, public respondent did not commit grave abuse of discretion when it ruled in respondent
union's favor since the delay in the forging of the CBA could not be attributed to the fault of the latter.

A scrutiny of the records will further reveal that after respondent union was certified as the bargaining agent of CMC, it invited the
employer hospital to the bargaining table by submitting its economic proposal for a CBA. However, CMC refused to negotiate with
respondent union and instead challenged the latter's legal personality through a petition for cancellation of the certificate of
registration which eventually reached this Court. The decision affirming the legal status of respondent union should have left CMC
with no other recourse but to bargain collectively, but still it did not. Respondent union was left with no other recourse but to file a
notice of strike against CMC for unfair labor practice with the National Conciliation and Mediation Board. This eventually led to a
strike on April 15, 1993.

Petitioner union on the other hand, after this Court issued an entry of judgment on March 23, 1994, filed the subject petition for
certification election on March 24, 1994, claiming that twelve months had lapsed since the last certification election.

Was there a bargaining deadlock between CMC and respondent union, before the filing of petitioner of a petition for certification
election, which had been submitted to conciliation or had become the subject of a valid notice of strike or lockout?

In the case of Divine Word University of Tacloban v. Secretary of Labor and Employment, 21 we had the occasion to define what a
deadlock is, viz:

"A 'deadlock' is . . . the counteraction of things producing entire stoppage; . . . There is a deadlock when there is
a complete blocking or stoppage resulting from the action of equal and opposed forces . . . The word is
synonymous with the word impasse, which . . . 'presupposes reasonable effort at good faith bargaining which,
despite noble intentions, does not conclude in agreement between the parties.'"

Although there is no "deadlock" in its strict sense as there is no "counteraction" of forces present in this case nor "reasonable effort
at good faith bargaining," such can be attributed to CMC's fault as the bargaining proposals of respondent union were never
answered by CMC. In fact, what happened in this case is worse than a bargaining deadlock for CMC employed all legal means to
block the certification of respondent union as the bargaining agent of the rank-and-file; and use it as its leverage for its failure to
bargain with respondent union. Thus, we can only conclude that CMC was unwilling to negotiate and reach an agreement with
respondent union. CMC has not at any instance shown willingness to discuss the economic proposals given by respondent union. 22

As correctly ratiocinated by public respondent, to wit:

"For herein petitioner to capitalize on the ensuing delay which was caused by the hospital and which resulted in
the non-conclusion of a CBA within the certification year, would be to negate and render a mockery of the
proceedings undertaken before this Department and to put an unjustified premium on the failure of the
respondent hospital to perform its duty to bargain collectively as mandated in Article 252 of the Labor Code, as
amended, which states."

"Article 252. Meaning of duty to bargain collectively. — the duty to bargain collectively means the
performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for
the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and
conditions of employment including proposals for adjusting any grievance or questions arising under
such agreement and executing a contract incorporating such agreements if requested by either party
but such duty does not compel any party to agree to a proposal or to make any concession."

The duly certified bargaining agent, CMCEA-AFW, should not be made to further bear
the brunt flowing from the respondent hospital's reluctance and thinly disguised refusal to
bargain." 23

If the law proscribes the conduct of a certification election when there is a bargaining deadlock submitted to conciliation or
arbitration, with more reason should it not be conducted if, despite attempts to bring an employer to the negotiation table by the
certified bargaining agent, there was "no reasonable effort in good faith" on the employer to bargain collectively.

In the case of Kaisahan ng Manggagawang Pilipino vs. Trajano, 201 SCRA 453 (1991), penned by Chief Justice Andres R. Narvasa,
the factual milieu of which is similar to this case, this Court allowed the holding of a certification election and ruled that the one year
period known as the "certification year" has long since expired. We also ruled, that:

". . . prior to the filing of the petition for election in this case, there was no such 'bargaining deadlock . . .
(which) had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or
lockout.' To be sure, there are in the record assertions by NAFLU that its attempts to bring VIRON to the
negotiation table had been unsuccessful because of the latter's recalcitrance, and unfulfilled promises to bargain
collectively; but there is no proof that it had taken any action to legally coerce VIRON to comply with its
statutory duty to bargain collectively. It could have charged VIRON with unfair labor practice; but it did not. It
could have gone on a legitimate strike in protest against VIRON's refusal to bargain collectively and compel it to
do so; but it did not. There are assertions by NAFLU, too, that its attempts to bargain collectively had been
delayed by continuing challenges to the resolution pronouncing it the sole bargaining representative in
VIRON; but there is no adequate substantiation thereof, or of how it did in fact prevent initiation of the
bargaining process between it and VIRON." 24

Although the statements pertinent to this case are merely obiter, still the fact remains that in the Kaisahan case, NAFLU was
counselled by this Court on the steps that it should have undertaken to protect its interest, but which it failed to do so.

This is what is strikingly different between the Kaisahan case and the case at bench for in the latter case, there was proof that the
certified bargaining agent, respondent union, had taken an action to legally coerce the employer to comply with its statutory duty to
bargain collectively, i.e., charging the employer with unfair labor practice and conducting a strike in protest against the employer's
refusal to bargain. 25 It is only just and equitable that the circumstances in this case should be considered as similar in nature to a
"bargaining deadlock" when no certification election could be held. This is also to make sure that no floodgates will be opened for the
circumvention of the law by unscrupulous employers to prevent any certified bargaining agent from negotiating a CBA. Thus, Section
3, Rule V, Book V of the Implement Rules should be interpreted liberally so as to include a circumstance, e.g. where a CBA could not
be concluded due to the failure of one party to willingly perform its duty to bargain collectively.

The order for the hospital to bargain is based on its failure to bargain collectively with respondent union.

WHEREFORE, the Resolution dated November 18, 1994 of public respondent Laguesma is AFFIRMED and the instant petition is
hereby DISMISSED.

SO ORDERED

Padilla, Bellosillo, Vitug and Kapunan, JJ., concur.

||| (Capitol Medical Center Alliance of Concerned Employees-UFSW v. Laguesma, G.R. No. 118915, [February 4, 1997], 335 PHIL
170-181)

26. SECOND DIVISION

[G.R. No. L-45528. February 10, 1982.]

EASTLAND MANUFACTURING, CO. INC., petitioner, vs. HON. CARMELO C. NORIEL, and PHILIPPINE
SOCIAL SECURITY LABOR UNIONS-PSSLU Fed.-(TUCP) (PSSLU Eastland LOCAL), respondents.

Presbitero J. Velasco, Jr. for petitioner.

Benito P. Fabie for private respondents.

SYNOPSIS
The Director of the Bureau of Labor Relations ordered the holding of a certification election upon petition of 30% of the members of
respondent labor union. Petitioner disputes the validity of this resolution claiming that of the 273 people in its employ, only 173 were
members of the respondent labor union, 43 of whom had less than 6 months service and 6 who had left their employment. It
invoked the provision in the Labor Code particularly Art. 267 (c) of P.D. 442 which provides that for purposes of membership in a
labor anion, employment for at least one year, whether continuous or broken, is necessary.

The Supreme Court dismissed the petition ruling that despite the challenged votes there was still more than 30% of the employees
whose votes could be counted; that the one year period required for membership in a labor union is not a limitation to the right of all
those in a collective bargaining unit to cast their vote; that management should maintain a strictly hands-off policy in the holding of
a certification election, a purely internal affair of labor so that the constitutional mandate that the "State shall assure the rights of
workers to self organization, collective bargaining, security of tenure and just and humane conditions of work" be rightfully observed.
Petition dismissed for lack of merit.

SYLLABUS

1. CONSTITUTIONAL LAW; PROTECTION TO LABOR; CERTIFICATION ELECTION; DETERMINATION OF LABOR; ORGANIZATION TO

REPRESENT THE WORKING FORCE; 30%s REQUIREMENT. — Even if there were less than 30% of the employees asking for a
certification election, that of itself would not be a bar to respondent Director ordering such an election provided, of course, there is
no abuse of discretion. So it was explicitly declared in Philippine Association of Free Labor Unions v. Bureau of Labor Relations, L-
42115, Jan. 27, 1976: "Petitioner's contention to the effect that the 30% requirement should be satisfied suffers from an even
graver flow. It fails to distinguish between the right of a labor organization to be able to persuade 30% of the labor force to petition
for a certification election, in which case respondent Bureau is left with no choice but to order it, and the power of such governmental
agency precisely entrusted with the implementation of the collective bargaining process to determine, considering the likelihood that
there may be several unions within a bargaining unit to order such an election precisely for the purpose of ascertaining, which of
them shall be the exclusive collective bargaining representative

2. ID.; ID.; ID.; ALL WORKERS OF A COLLECTIVE BARGAINING UNIT TO BE GIVEN THE OPPORTUNITY TO PARTICIPATE IN A
CERTIFICATION ELECTION. — For purposes of membership in any labor union, the one year period is required. That is one thing.
Who can vote in a certification election is another. The plain language of the law certainly is controlling. All employees can
participate. The provision of the law is not a limitation to the right of all those in a collective bargaining unit to cast their vote. A
recent decision, Confederation of Citizens Labor Unions v. Noriel, L-46933, June 30, 1980, speaks to that effect. Thus: "From United
Employees Union of Gelmart Industries v. Noriel, a 1975 decision, it has been the consistent ruling of this Court that for the integrity
of the collective bargaining process to be maintained and thus manifest steadfast adherence to the concept of industrial democracy,
all the workers of a collective bargaining unit should be given the opportunity to participate in a certification election. The latest
decision in point, promulgated barely a year ago, is United Lumber and General Workers v. Noriel. This Court has resolutely set its
face against any attempt that may frustrate the above statutory policy.

3. ID.; ID.; ID.; CERTIFICATION ELECTION, A DEVICE TO MAKE KNOWN WHO SHALL REPRESENT THE EMPLOYEES. — The Supreme
Court in Federation of the United Workers Organization v. Court of Industrial Relations L-37392, December 19, 1973, categorically
stated: "The slightest doubt cannot therefore 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."

4. ID.; ID.; ID.; MANAGEMENT NOT TO INTERFERE WITH CERTIFICATION ELECTION, A PURELY INTERNAL AFFAIR OF LABOR. — On
a matter that should be the exclusive concern of labor, the choice of a collective bargaining representative, the employer is definitely
an intruder. His participation, to say the least, deserves no encouragement. This court should be the last agency to lend support to
such an attempt at interference with a purely internal affair of labor. So it was made clear in a recent decision, Monark International,
Inc. v. Noriel, in these words: "There is another infirmity from which the petition suffers. It was filed by the employer, the adversary
in the collective bargaining process. Precisely, the institution of collective bargaining is designed to assure that the other party, labor,
is free to choose its representative. To resolve any doubt on the matter, a certification election, to repeat, is the most appropriate
means of ascertaining its will."

5. ID.; ID.; ID.; ID.; EXCEPTION; CONTRACT BAR RULE. — It is true that there may be circumstances where the interest of the
employer calls for its being heard on the matter. An obvious instance is where it invokes the obstacle interposed by the contract-bar
rule. This case certainly does not fall within the exception. Sound policy dictates that as much as possible, management is to
maintain a strictly hands-off policy. For if it does not, it may lend itself to the legitimate suspension that it is partial to one of the
contending unions. That is repugnant to the concept of collective bargaining. That is against the letter and spirit of welfare legislation
intended to protect labor and to promote social justice. The judiciary then should be the last to look with tolerance at such efforts of
an employer to take part in the process leading to the free and untrammeled choice of the exclusive bargaining representative of the
workers. (Consolidated Farms, Inc. v. Noriel, L-47752, July 31, 1978).

DECISION

FERNANDO, J p:

This petition for certiorari raised novel issues at the time of its filing resulting in granting the plea for restraining order. 1 Petitioner-
employer was able then to allege with a certain degree of plausibility contentions which could cast doubt on the validity of the
resolution of respondent Carmelo C. Noriel, Director of the Bureau of Labor Relations, ordering a certification election. In the light of
the applicable decisions rendered thereafter, the dismissal of the petition is indicated. The challenged order, the Court cannot set
aside.

It is not disputed that petitioner had 275 people in its labor force of whom 175 were members of respondent labor union. They
signed a petition for the holding of a certification election. That fact in itself would more than justify the granting of such a plea, the
30% mandatory requirement being met. It was alleged, however, that there were 43 employees with less than six months service
and 6 who had left their employment. Even then there would still be more than 30% of the employees whose votes certainly should
be counted. Petitioner-employer was adamant. It invoked a provision in the Labor Code. 2 That is the basic issue raised in this
petition. The other is whether a certification election could be conducted without the restructuring of labor organizations as likewise
provided in the Labor Code. This issue need not be given any further thought as until now such restructuring has not taken place.

As noted at the outset, this petition calls for dismissal.

1. At the time of the issuance of the restraining order, it had been previously held that even if there were less than 30% of the
employees asking for a certification election, that of itself would not be a bar to respondent Director ordering such an election
provided, of course, there is no abuse of discretion. So it was explicitly declared in Philippine Association of Free Labor Unions v.
Bureau of Labor Relations: 3 "Petitioner's contention to the effect that the 30% requirement should be satisfied suffers from an even
graver flaw. It fails to distinguish between the right of a labor organization to be able to persuade 30% of the labor force to petition
for a certification election, in which case respondent Bureau is left with no choice but to order it, and the power of such governmental
agency precisely entrusted with the implementation of the collective bargaining process to determine, considering the likelihood that
there may be several unions within a bargaining unit to order such an election precisely for the purpose of ascertaining, which of
them shall be the exclusive collective bargaining representative. The decision of respondent Bureau of April 14, 1975 was intended
for that purpose. That was why not only petitioner but also the Philippine Federation of Labor, the National Labor Union, the National
Federation of Labor Unions and the Samahan ng mga Manggagawa at Kawani sa AG&P were included in the list of labor unions that
could be voted on. To reiterate a thought already expressed, what could be more appropriate than such a procedure if the goal
desired is to enable labor to determine which of the competing organizations should represent it for the purpose of a collective
bargaining contract?" 4 Such a doctrine is now firmly entrenched in the law. 5

2. There was, however, the remaining question of whether or not the reliance of respondent Noriel under Article 257 on the
requirement of the law of 30% of all the employees suffices. As noted earlier, for purposes of membership in any labor union, the
one year period is required. That is one thing. Who can vote in a certification election is another. The plain language of the law
certainly is controlling. All employees can participate. The later article is, therefore, lacking in any relevance. It is not a limitation to
the right of all those in a collective bargaining unit to cast their vote. A recent decision, Confederation of Citizens Labor Unions v.
Noriel 6 speaks to that effect. Thus: "From United Employees Union of Gelmart Industries v. Noriel, a 1975 decision, it has been the
consistent ruling of this Court that for the integrity of the collective bargaining process to be maintained and thus manifest steadfast
adherence to the concept of industrial democracy, all the workers of a collective bargaining unit should be given the opportunity to
participate in a certification election. The latest decision in point, promulgated barely a year ago, is United Lumber and General
Workers v. Noriel. This Court has resolutely set its face against any attempt that may frustrate the above statutory policy. The
success of this petition would, therefore, be an unwarranted departure from a principle that has been firmly embedded in our
jurisprudence. We are not inclined to take that step." 7 It is only worth recalling that even under the Industrial Peace Act 8 that was
the ruling consistently followed. This Court in Federation of the United Workers Organization v. Court of Industrial
Relations 9 categorically stated: "The slightest doubt cannot therefore 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." 10

3. It is equally well settled by this time that the petition was filed by a party, the employer, whose interest in certification election
hardly rises above the minimal, the only possible exception thus far recognized being the contract-bar rule. The decision in
Consolidated Farms, Inc. v. Noriel 11 explains why: "The record of this proceeding leaves no doubt that all the while the party that
offered the most obdurate resistance to the holding of a certification election is management, petitioner Consolidated Farms, Inc., II.
That circumstance of itself militated against the success of this petition. On a matter that should be the exclusive concern of labor,
the choice of a collective bargaining representative, the employer is definitely an intruder. His participation, to say the least,
deserves no encouragement. This Court should be the last agency to lend support to such an attempt at interference with a purely
internal affair of labor. So it was made clear in a recent decision, Monark International, Inc. v. Noriel, in these words: 'There is
another infirmity from which the petition suffers. It was filed by the employer, the adversary in the collective bargaining process.
Precisely, the institution of collective bargaining is designed to assure that the other party, labor, is free to choose its representative.
To resolve any doubt on the matter, a certification election, to repeat, is the most appropriate means of ascertaining its will. It is true
that there may be circumstances where the interest of the employer calls for its being heard on the matter. An obvious instance is
where it invokes the obstacle interposed by the contract-bar rule. This case certainly does not fall within the exception. Sound policy
dictates that as much as possible, management is to maintain a strictly hands-off policy. For if it does not, it may lend itself to the
legitimate suspension that it is partial to one of the contending unions. That is repugnant to the concept of collective bargaining. That
is against the letter and spirit of welfare legislation intended to protect labor and to promote social justice. The judiciary then should
be the last to look with tolerance at such efforts of an employer to take part in the process leading to the free and untrammeled
choice of the exclusive bargaining representative of the workers.'" 12 Hopefully, with a reiteration of this ruling, counsel for
management will be well-advised to accord the utmost scrutiny to any claim that there would be a violation of the rights of his client
if a certification election were conducted. What calls for priority is this constitutional mandate: "The State shall assure the rights of
workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work." 13

WHEREFORE, the petition is dismissed for lack of merit. The restraining order is hereby lifted. This decision is immediately executory,
and the certification election can take place forthwith. LibLex

Barredo, Aquino, Abad Santos, De Castro, Ericta and Escolin, JJ., concur.

Concepcion, Jr., J., took no part.

||| (Eastland Manufacturing, Co. Inc. v. Noriel, G.R. No. L-45528, [February 10, 1982])

27. SECOND DIVISION

[G.R. No. 159553. December 10, 2007.]

YOKOHAMA TIRE PHILIPPINES, INC., petitioner, vs. YOKOHAMA EMPLOYEES UNION, respondent.

DECISION

QUISUMBING, J p:

In this appeal, petitioner Yokohama Tire Philippines, Inc. (hereafter Yokohama, for brevity) assails the Decision 1 dated April 9, 2003
of the Court of Appeals in CA-G.R. SP No. 74273 and its Resolution 2 dated August 15, 2003, denying the motion for reconsideration.

The antecedent facts are as follows:

On October 7, 1999, respondent Yokohama Employees Union (Union) filed a petition for certification election among the rank-and-file
employees of Yokohama. Upon appeal from the Med-Arbiter's order dismissing the petition, the Secretary of the Department of Labor
and Employment (DOLE) ordered an election with (1) "Yokohama Employees' Union" and (2) "No Union" as choices. 3 The election
held on November 23, 2001 yielded the following result:

YOKOHAMA EMPLOYEES UNION - 131

NO UNION - 117
SPOILED - 2
—————
250
VOTES CHALLENGED BY [YOKOHAMA] - 78
VOTES CHALLENGED BY [UNION] - 73
—————
TOTAL CHALLENGED VOTES - 151
TOTAL VOTES CAST - 401 4
Yokohama challenged 78 votes cast by dismissed employees. On the other hand, the Union challenged 68 votes cast by newly
regularized rank-and-file employees and another five (5) votes by alleged supervisor-trainees. Yokohama formalized its protest and
raised as an issue the eligibility to vote of the 78 dismissed employees, 5 while the Union submitted only a handwritten
manifestation during the election.

On January 21, 2002, the Med-Arbiter resolved the parties' protests, decreeing as follows:

WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered as follows:

xxx xxx xxx

2.The appreciation of the votes of the sixty-five (65) dismissed employees who contested
their dismissal before the National Labor Relations Commission shall be suspended
until the final disposition of their complaint for illegal dismissal. . . . TcDIaA

3.The votes of the sixty-eight (68) so-called "newly-regularized" rank-and-file employees

shall be appreciated in the final tabulation.

xxx xxx xxx

SO ORDERED. 6 (Emphasis supplied.)

On May 22, 2002, the DOLE Acting Secretary disposed of the appeals as follows:

WHEREFORE, the partial appeal of [Yokohama] is DENIED and the appeal of [the union] is PARTIALLY
GRANTED. Thus, the Order of the Med-Arbiter dated 21 January 2002 is hereby MODIFIED as follows:

xxx xxx xxx

2.The votes of dismissed employees who contested their dismissal before the National Labor
Relations Commission (NLRC) shall be appreciated in the final tabulation of the certification
election results.

3.The votes of the sixty-eight (68) newly regularized rank-and-file employees shall be
excluded.

xxx xxx xxx

SO RESOLVED. 7 (Emphasis supplied.)

The Court of Appeals affirmed in toto the decision of the DOLE Acting Secretary. 8 The appellate court held that the 78 employees
who contested their dismissal were entitled to vote under Article 212 (f) 9 of the Labor Code and Section 2, Rule XII 10 of the rules
implementing Book V of the Labor Code. However, it disallowed the votes of the 68 newly regularized employees since they were not
included in the voters' list submitted during the July 12, 2001 pre-election conference. The appellate court also noted that
Yokohama's insistence on their inclusion lends suspicion that it wanted to create a company union, and ruled that Yokohama had no
right to intervene in the certification election. Finally, it ruled that the union's handwritten manifestation during the election was
substantial compliance with the rule on protest.

Yokohama appealed.

On September 15, 2003, we issued a temporary restraining order against the implementation of the May 22, 2002 Decision of the
DOLE Acting Secretary and the October 15, 2002 Resolution of the DOLE Secretary, denying Yokohama's motion for
reconsideration. 11

In a manifestation with motion to annul the DOLE Secretary's entry of judgment filed with this Court on October 16, 2003, Yokohama
attached a Resolution 12 dated April 25, 2003 of the Med-Arbiter. The resolution denied Yokohama's motion to suspend proceedings
and cited the decision of the Court of Appeals. The resolution also certified that the Union obtained a majority of 208 votes in the
certification election while "No Union" obtained 121 votes. Yokohama also attached an entry of judgment13 issued by the DOLE
stating that the April 25, 2003 Resolution of the Med-Arbiter was affirmed by the DOLE Secretary's Office on July 29, 2003 and
became final on September 29, 2003. CcaASE

In a subsequent manifestation/motion with erratum filed on October 21, 2003, Yokohama deleted an allegation in its October 16,
2003 manifestation which was included "through inadvertence and clerical mishap." Said allegation reads:

xxx xxx xxx

. . . Notably, the Resolution dated 29 July 2003 which affirmed the Resolution dated 25 April 2003 is
still not final and executory considering the timely filing of a motion for its reconsideration on 15
August 2003 which until now has yet to be resolved. 14

In this appeal, petitioner raises the following issues:

I.

WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN DISALLOWING THE APPRECIATION OF THE
VOTES OF SIXTY-EIGHT REGULAR RANK-AND-FILE.

II.

WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE [DOLE SECRETARY'S]
DECLARATION THAT [THE UNION'S] MANIFESTATION ON THE DAY OF THE CERTIFICATION ELECTION WAS
SUFFICIENT COMPLIANCE WITH THE RULE ON FORMALIZATION OF PROTESTS.
 III.

WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN ALLOWING THE APPRECIATION OF VOTES OF
ALL OF ITS EMPLOYEES WHO WERE PREVIOUSLY DISMISSED FOR SERIOUS MISCONDUCT AND ABANDONMENT
OF WORK WHICH ARE CAUSES UNRELATED TO THE CERTIFICATION ELECTION. 15

We shall first resolve the last assigned issue: Was it proper to appreciate the votes of the dismissed employees?

Petitioner argues that "the Court of Appeals erred in ruling that the votes of the dismissed employees should be appreciated."
Petitioner posits that "employees who have quit or have been dismissed for just cause prior to the date of the certification election
are excluded from participating in the certification election." Petitioner had questioned the eligibility to vote of the 78 dismissed
employees.

Respondent counters that Section 2, Rule XII 16 of the rules implementing Book V of the Labor Code allows a dismissed employee to
vote in the certification election if the case contesting the dismissal is still pending.

Section 2, Rule XII, the rule in force during the November 23, 2001 certification election clearly, unequivocally and unambiguously
allows dismissed employees to vote during the certification election if the case they filed contesting their dismissal is still pending at
the time of the election. 17

Here, the votes of employees with illegal dismissal cases were challenged by petitioner although their cases were still pending at the
time of the certification election on November 23, 2001. These cases were filed on June 27, 2001 18 and the appeal of the Labor
Arbiter's February 28, 2003 Decision was resolved by the NLRC only on August 29, 2003. 19

Even the new rule 20 has explicitly stated that without a final judgment declaring the legality of dismissal, dismissed employees are
eligible or qualified voters. Thus,

RULE IX
CONDUCT OF CERTIFICATION ELECTION

Section 5.Qualification of voters; inclusion-exclusion. — . . . An employee who has been dismissed from work but
has contested the legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance of the
order for the conduct of a certification election shall be considered a qualified voter, unless his/her dismissal was
declared valid in a final judgment at the time of the conduct of the certification election.

xxx xxx xxx

Thus, we find no reversible error on the part of the DOLE Acting Secretary and the Court of Appeals in ordering the appreciation of
the votes of the dismissed employees.

Finally, we need not resolve the other issues for being moot. The 68 votes of the newly regularized rank-and-file employees, even if
counted in favor of "No Union," will not materially alter the result. There would still be 208 votes in favor of respondent and
189 21 votes in favor of "No Union."

We also note that the certification election is already a fait accompli, and clearly petitioner's rank-and-file employees had chosen
respondent as their bargaining representative.

WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated April 9, 2003 of the Court of Appeals in CA-G.R.
SP No. 74273 and the Resolution dated August 15, 2003 are AFFIRMED. The temporary restraining order issued on September 15,
2003 is hereby DISSOLVED. No pronouncement as to costs. cITaCS

SO ORDERED.

Carpio, Carpio-Morales, Tinga and Velasco, Jr., JJ., concur.

||| (Yokohama Tire Philippines, Inc. v. Yokohama Employees Union, G.R. No. 159553, [December 10, 2007], 564 PHIL 513-520)

28. 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.

Apuzen Alforque & Lao Law Office for petitioner.

Dominguez Paderna Ibabao & Tan Law Offices Co. for private respondent.

SYNOPSIS

Petitioner union was chosen the bargaining agent of the rank-and-file employees of private respondent at a certification election held
on August 20, 1989. However, protests were filed by private respondent and three other union against the results of the certification
election. The other three unions claimed that the election was conducted despite the pendency of the appeals denying the motion for
intervention. On the other hand, the private respondent alleged, among others, that the certification election was marred by massive
fraud and irregularities and that 54% of its rank-and-file workers were not able to vote, resulting in a failure of election. On the other
hand, petitioner contended that the private respondent had no legal personality to file an appeal because it was not a party to the
election but was only a bystander and the only instance wherein it may actively participate is when it files a petition for certification
election. Subsequently, the med-arbiter, upon order of the Acting Secretary of Labor, conducted an investigation and found private
respondent's allegations of massive disfranchisement of employees and irregularities in the conduct of the election to be true. The
Department of Labor and Employment dismissed the election protests and upheld the certification election ruling that the choice of
the exclusive bargaining representative is the sole concern of the workers. However, on motion of private respondent and upon
written complaint of the workers protesting the conduct of the election, the Secretary of Labor reversed his resolution and ordered
the holding of a new certification election. Hence, this petition. ICAcTa
In affirming the questioned order of the Secretary of Labor, the Supreme Court held that it is not improper for private respondent to
show interest in the conduct of the election. 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 not in seeing to it that the certification election is clean, peaceful,
orderly and credible. The Court also held that a certification election can be invalidated upon a showing of employees'
disfranchisement, lack of secrecy in the voting and bribery such as in the present case. The workers' right to self-organization would
be rendered nugatory if the right to choose their collective bargaining representative were denied. In case of doubt as to the result of
the certification election, the doubt should be resolved in favor of the holding of a certification election.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATIONS; LABOR RELATIONS; CERTIFICATION ELECTION; EMPLOYER PROHIBITED FROM
INTERFERING IN THE CONDUCT THEREOF IN ORDER TO INFLUENCE ITS OUTCOME. — It is not 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. HDATSI

2. ID.; ID.; ID.; WORKERS DISFRANCHISED IN THE CASE AT BAR. — 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. As this Court stressed in LVN Pictures, Inc. v. Phil.
Musicians Guild (1 SCRA 132 [1961]), 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.

3. ID.; ID.; ID.; INVALIDATED UPON SHOWING OF EMPLOYEES DISFRANCHISEMENT, LACK OF SECRECY IN THE VOTING AND
BRIBERY. — In one case this Court invalidated a certification election upon a showing of disfranchisement, lack of secrecy in the
voting and bribery. 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. In case of doubt, the doubt should be resolved in favor of the holding of a
certification election. AHTICD

4. CIVIL LAW; ACTIONS; LACHES; EMPLOYEES IN CASE AT BAR DID NOT SLEEP ON THIS THEIR RIGHTS. — 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. As the Solicitor General says in his Comment, these affidavits and manifestoes, which were
attached as Annexes "A" to "CC" and Annexes "DD" to "DD-33" to private respondent's Supplemental Petition of September 5, 1989
— just 16 days after the August 20, 1989 election. It is not true therefore that the employees slept on their rights.

5. REMEDIAL LAW; EVIDENCE; TECHNICAL RULES OF EVIDENCE NOT BINDING IN LABOR CASES. — 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. cTDaEH

6. ID.; ID.; LETTERS OF WORKERS IN CASE AT BAR SUFFICIENTLY PROVED IRREGULARITIES OF THE CERTIFICATION ELECTION. —
The allegation that the letters did not contain evidence of intelligent acts does not have merit. The earlier letters 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.

DECISION

MENDOZA, J p:

Petitioner NFL (National Federation of Labor) was chosen the bargaining agent of rank-and-file employees of the Hijo Plantation Inc.
(HPI) in Mandaum, Tagum, Davao del Norte at a certification election held on August 20, 1989. Protests filed by the company and
three other unions against the results of the election were denied by the Department of Labor and Employment in its resolution
dated February 14, 1991 but, on motion of the company (HPI), the DOLE reconsidered its resolution and ordered another
certification election to be held. The DOLE subsequently denied petitioner NFL's motion for reconsideration. LLphil

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
company's claim that 54% of the rank-and-file workers were not able to vote in the certification election.

In his Report and Recommendation, dated February 9, 1990, Pura stated:

1. A majority of the rank-and-file workers had been disfranchised in the election of August 20, 1989 because of confusion caused by
the announcement of the company that the election had been postponed in view of the appeals of ULGWP and Hijo Labor Union
(HLU) from the order denying their motions for intervention. In addition, the election was held on a Sunday which was 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 HPI's appeal, adopting as its own the
documentary evidence presented by the company, showing fraud in the election of August 20, 1989. On the other hand, petitioner
NFL reiterated its contention that management had no legal personality to file an appeal because it was not a party to the election
but was only a bystander which did not even extend assistance in the election. Petitioner denied that private respondent HPI was not
represented in the pre-election conference, because the truth was that a certain Bartolo was present on behalf of the management
and he in fact furnished the DOLE copies of the list of employees, and posted in the company premises notices of the certification
election.

Petitioner NFL insisted that more than majority of the workers voted in the election. It claimed that out of 1,692 qualified voters,
1,012 actually voted and only 680 failed to cast their vote. It charged management with resorting to all kinds of manipulation to
frustrate the election and make the "Non Union" win.

In a resolution dated February 14, 1991, the DOLE upheld the August 20, 1989 certification election. With respect to claim that
election could not be held in view of the pendency of the appeals of the ULGWP and Hijo Labor Union from the order of the Med-
Arbiter denying their motions for intervention, the DOLE said: 1

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

The same is true with the motion for intervention of ULGWP. The latter withdrew as a party to the election on
September 1988 and its motion to withdraw was granted by the Med-Arbiter on October motion for intervention
filed before the conduct of a second balloting where the choices has already been pre-determined.

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

The DOLE gave no weight to the report of the Med-Arbiter that the certification election was marred by massive fraud and
irregularities. Although affidavits were submitted showing that the election was held outside the company premises and private
vehicles were used as makeshift precincts, the DOLE found that this was because respondent company did not allow the use of its
premises for the purpose of holding the election, company guards were allegedly instructed not to allow parties, voters and DOLE
representation officers to enter the company premises, and notice was posted on the door of the company that the election had been
postponed.
Nor was weight given to the findings of the Med-Arbiter that a majority of the rank-and-file workers had been disfranchised in the
August 20, 1989 election and that the secrecy of the ballot had been violated, first, because the NFL was not given notice of the
investigation nor the chance to present its evidence to dispute this finding and, second, the Med Arbiter's report was not supported
by the minutes of the proceedings nor by any record of the interviews of the 315 workers. Moreover, it was pointed out that the
report did not state the names of the persons investigated, the questions asked and the answers given. The DOLE held that the
report was "totally baseless."

The resolution of February 14, 1991 concluded with a reiteration of the rule that the choice of the exclusive bargaining representative
is the sole concern of the workers. It said: "If indeed there were irregularities committed during the election, the contending unions
should have been the first to complain considering that they are the ones which have interest that should be protected." 2

Accordingly, the Labor Secretary denied the petition to annul the election filed by the ULGWP, TRUST-KILUSAN, HLU and the HPI and
instead certified petitioner NFL as the sole and exclusive bargaining representative of the rank-and-file employees of private
respondent HPI.

However, on motion of HPI, the Secretary of Labor, on August 29, 1991, reversed his resolution of February 14, 1991. Petitioner NFL
filed a motion for reconsideration but its motion was denied in an order, dated December 26, 1991. Petitioner's second motion for
reconsideration was likewise denied in another order dated February 17, 1992. Hence, this petition.

First. Petitioner contends that certification election is the sole concern of the employees and the employer is a mere bystander. The
only instance wherein the employer may actively participate is when it files a petition for certification election under Art. 258 of the
Labor Code because it is requested to bargain collectively. Petitioner says that this is not the case here and so the DOLE should not
have given due course to private respondent's petition for annulment of the results of the certification election.

In his resolution of August 29, 1991, the Secretary of Labor said he was reversing his earlier resolution because "workers of Hijo
Plantation, Inc. have deluged this Office with their letter-appeal, either made singly or collectively expressing their wish to have a
new certification election conducted" and that as a result "the firm position we held regarding the integrity of the electoral exercise
had been somewhat eroded by this recent declaration of the workers, now speaking in their sovereign capacity."

It is clear from this, that what the DOLE Secretary considered in reversing its earlier rulings was not the petition of the employer but
the letter-appeals that the employees sent to his office denouncing the irregularities committed during the August 20, 1989
certification election. The petition of private respondent was simply the occasion for the employees to voice their protests against the
election. Private respondent HPI attached to its Supplemental Appeal filed on September 5, 1989 the affidavits and appeals of more
or less 784 employees who claimed that they had been disfranchised, as a result of which they were not able to cast their votes at
the August 20, 1989 election. It was the protests of employees which moved the DOLE to reconsider its previous resolution of
February 14, 1991, upholding the election. LLphil

Nor is it improper for private respondent to show interest in the conduct of the election. Private respondent is the employer. The
manner in which the election was held could make the difference between industrial strife and industrial harmony in the company.
What an employer is prohibited from doing is to interfere with the conduct of the certification election for the purpose of influencing
its outcome. But certainly an employer has an abiding interest in seeing to it that the election is clean, peaceful, orderly and credible.

Second. The petitioner argues that any protest concerning the election should be registered and entered into the minutes of the
election proceedings before it can be considered. In addition, the protest should be formalized by filing it within five (5) days.
Petitioner avers that these requirements are condition precedents in the filing of an appeal. Without these requisites the appeal
cannot prosper. It cites the following provisions of Book V, Rule VI of the Implementing Rules and Regulations of the Labor Code:

SEC. 3. Representation officer may rule on any on-the-spot 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 in front 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 in front 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 respondent's Supplemental Petition of September 5, 1989 — just 16 days after the August 20, 1989 election. It is not true
therefore that the employees slept on their rights.

As to the claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates because they were prepared by private
respondent HPI and employees were merely asked to sign them, suffice it to say that this is plain speculation which petitioner has
not proven by competent evidence.

As to the letters not being verified, suffice it to say that technical rules of evidence are not binding in labor cases.

The allegation that the letters did not contain evidence of intelligent acts does not have merit. The earlier letters 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. LLphil

Regalado, Melo, Puno and Martinez, JJ ., concur.

||| (National Federation of Labor v. Secretary of Labor, G.R. No. 104556, [March 19, 1998], 351 PHIL 94-103)

29. THIRD DIVISION

[G.R. No. 97622. October 19, 1994.]

CATALINO ALGIRE and OTHER OFFICERS OF UNIVERSAL ROBINA TEXTILE MONTHLY SALARIED
EMPLOYEES UNION (URTMSEU), petitioners, vs.REGALADO DE MESA, et al., and HON. SECRETARY OF
LABOR, respondents.

DECISION

ROMERO, J p:

This petition for certiorari seeks to nullify and set aside the decision dated January 31, 1991 of the Secretary of
Labor which reversed on appeal the Order dated December 20, 1990 issued by Med-arbiter Rolando S. de la Cruz
declaring petitioners as the duly-elected officers of the Universal Robina Textile Monthly Salaried Employees Union
(URTMSEU) as well as the Order dated March 5, 1991 denying petitioner Catalino Algire's motion for
reconsideration. LexLib
The case arose out of the election of the rightful officers to represent the union in the Collective Bargaining
Agreement (CBA) with the management of Universal Robina Textile at its plant in Km. 50, Bo. San Cristobal, Calamba,
Laguna.
Universal Robina Textile Monthly Salaried Employees Union, (URTMSEU), through private respondent Regalado
de Mesa, filed on September 4, 1990 a petition for the holding of an election of union officers with the Arbitration Branch
of the Department of Labor and Employment (DOLE). Acting thereon, DOLE's med-arbiter Rolando S. de la Cruz issued an
Order dated October 19, 1990 directing that such an election be held.
In the pre-election conference, it was agreed that the election by secret ballot be conducted on November 15,
1990 between petitioners (Catalino Algire, et al.) and private respondents (Regalado de Mesa, et al.) under the
supervision of DOLE through its duly appointed representation officer.
The official ballot contained the following pertinent instructions:
"Nais kong pakatawan sa grupo ni:
LINO ALGIRE REGALADO
and DE MESA
his officers and his officers
1. Mark check (/) or cross (x) inside the box specified above who among the two contending
parties you desire to be represented for the purpose of collective bargaining.
2. This is a secret ballot. Don't write any other markings." 1
 The results of the election were as follows:
Lino Algire group — 133
Regalado de Mesa group — 133
Spoiled — 6
——
Total votes cast 272
On November 19, 1990, Catalino Algire filed a Petition and/or Motion (RO 400-9009-AU-002), which DOLE's
Med-Arbitration unit treated as a protest, to the effect that one of the ballots wherein one voter placed two checks inside
the box opposite the phrase "Lino Algire and his officers," hereinafter referred to as the "questioned ballot," should not
have been declared spoiled, as the same was a valid vote in their favor. The group argued that the two checks made even
clearer the intention of the voter to exercise his political franchise in favor of Algire's group. Cdpr
During the scheduled hearing thereof, both parties agreed to open the envelope containing the spoiled ballots
and it was found out that, indeed, one ballot contained two (2) checks in the box opposite petitioner Algire's name and
his officers.
On December 20, 1990, med-arbiter de la Cruz issued an Order declaring the questioned ballot valid, thereby
counting the same in Algire's favor and accordingly certified petitioner's group as the union's elected officers. 2
Regalado de Mesa, et al. appealed from the decision of the med-arbiter to the Secretary of Labor in Case No.
OS-A-1-37-91 (R0 400-9009-AU-002). On January 31, 1991, the latter's office granted the appeal and reversed the
aforesaid Order. In its stead, it entered a new one ordering "the calling of another election of officers of the Universal
Robina Textile Monthly Salaried Employees Union (URTMSEU), with the same choices as in the election of 15 November,
1990, after the usual pre-election conference." 3
Director Maximo B. Lim of the Industrial Relations Division, Regional Office No. IV of the DOLE set the hearing
for another pre-election conference on March 22, 1991, reset to April 2, 1991, and finally reset to April 5, 1991.
Catalino Algire's group filed a motion for reconsideration of the Order. It was denied for lack of merit and the
decision sought to be reconsidered was sustained.
Algire, et al. filed this petition on the following issues:
"(1) the Secretary of Labor erred in applying Sections 1 and 8 (6), Rule VI, Book V of the Rules
and Regulations implementing the Labor Code to the herein case, considering that the case is an intra-
union activity, which act constitutes a grave abuse in the exercise of authority amounting to lack of
jurisdiction.
(2) the assailed decision and order are not supported by law and evidence."
with an ex-parte motion for issuance of a temporary restraining order, alleging that the assailed decision of the office of
the Secretary of Labor as public respondent is by nature immediately executory and the holding of an election at any time
after April 5, 1991, would render the petition moot and academic unless restrained by this Court.
On April 5, 1991, we issued a temporary restraining order enjoining the holding of another election of union
officers pursuant to the January 31, 1991 decision. 4
There is no merit in the petition.
The contention of the petitioner is that a representation officer (referring to a person duly authorized to conduct
and supervise certification elections in accordance with Rule VI of the Implementing Rules and Regulations of the Labor
Code) can validly rule only on on-the-spot questions arising from the conduct of the elections, but the determination of
the validity of the questioned ballot is not within his competence. Therefore, any ruling made by the representation officer
concerning the validity of the ballot is deemed an absolute nullity because — such is the allegation — it was done without
or in excess of his functions amounting to lack of jurisdiction. llcd
To resolve the issue of union representation at the Universal Robina Textile plant, what was agreed to be held at
the company's premises and which became the root of this controversy, was a consent election, not a certification
election.
It is unmistakable that the election held on November 15, 1990 was a consent election and not a certification
election. It was an agreed one, the purpose being merely to determine the issue of majority representation of all the
workers in the appropriate collective bargaining unit. It is a separate and distinct process and has nothing to do with the
import and effort of a certification election. 5
The ruling of DOLE's representative in that election that the questioned ballot is spoiled is not based on any legal
provision or rule justifying or requiring such action by such officer but simply in pursuance of the intent of the parties,
expressed in the written instructions contained in the ballot, which is to prohibit unauthorized markings thereon other
than a check or a cross, obviously intended to identify the votes in order to preserve the sanctity of the ballot, which is in
fact the objective of the contending parties.
If indeed petitioner's group had any opposition to the representation officer's ruling that the questioned ballot
was spoiled, it should have done so seasonably during the canvass of votes. Its failure or inaction to assail such ballot's
validity shall be deemed a waiver of any defect or irregularity arising from said election. Moreover, petitioners even
question at this stage the clear instruction to mark a check or cross opposite the name of the candidate's group, arguing
that such instruction was not clear, as two checks "may be interpreted that a voter may vote for Lino Algire but not with
(sic) his officers or vice-versa," 6notwithstanding the fact that a pre-election conference had already been held where no
such question was raised.
In any event, the choice by the majority of employees of the union officers that should best represent them in
the forthcoming collective bargaining negotiations should be achieved through the democratic process of an election, the
proper forum where the true will of the majority may not be circumvented but clearly defined. The workers must be
allowed to freely express their choice once and for all in a determination where everything is open to their sound
judgment and the possibility of fraud and misrepresentation is minimized, if not eliminated, without any unnecessary
delay and/or maneuvering. cdrep
WHEREFORE, the petition is DENIED and the challenged decision is hereby AFFIRMED.
SO ORDERED.
Bidin, Melo and Vitug, JJ., concur.
Feliciano, J., is on leave.
||| (Algire v. De Mesa, G.R. No. 97622, [October 19, 1994], 307 PHIL 668-673)
 30. SECOND DIVISION

[G.R. No. 174040-41. September 22, 2010.]

INSULAR HOTEL EMPLOYEES UNION-NFL, petitioner, vs. WATERFRONT INSULAR HOTEL

DAVAO, respondent.

DECISION

PERALTA, J p:

Before this Court is a petition for review on certiorari, 1 under Rule 45 of the Rules of Court, seeking to set aside the
Decision 2 dated October 11, 2005, and the Resolution 3 dated July 13, 2006 of the Court of Appeals (CA) in consolidated labor
cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP No. 83657. Said Decision reversed the Decision 4 dated the April 5,
2004 of the Accredited Voluntary Arbitrator Rosalina L. Montejo (AVA Montejo). aTcSID
The facts of the case, as culled from the records, are as follows:
On November 6, 2000, respondent Waterfront Insular Hotel Davao (respondent) sent the Department of Labor and
Employment (DOLE), Region XI, Davao City, a Notice of Suspension of Operations 5 notifying the same that it will suspend its
operations for a period of six months due to severe and serious business losses. In said notice, respondent assured the DOLE
that if the company could not resume its operations within the six-month period, the company would pay the affected employees
all the benefits legally due to them.
During the period of the suspension, Domy R. Rojas (Rojas), the President of Davao Insular Hotel Free Employees
Union (DIHFEU-NFL), the recognized labor organization in Waterfront Davao, sent respondent a number of letters asking
management to reconsider its decision.
In a letter 6 dated November 8, 2000, Rojas intimated that the members of the Union were determined to keep their
jobs and that they believed they too had to help respondent, thus:
xxx xxx xxx

Sir, we are determined to keep our jobs and push the Hotel up from sinking. We believe that we have to help in
this (sic) critical times. Initially, we intend to suspend the re-negotiations of our CBA. We could talk further on
possible adjustments on economic benefits, the details of which we are hoping to discuss with you or any of your
emissaries. . . . 7

In another letter 8 dated November 10, 2000, Rojas reiterated the Union's desire to help respondent, to wit:
We would like to thank you for giving us the opportunity to meet [with] your representatives in order for us to
air our sentiments and extend our helping hands for a possible reconsideration of the company's decision.

The talks have enabled us to initially come up with a suggestion of solving the high cost on payroll.

We propose that 25 years and above be paid their due retirement benefits and put their length of service to zero
without loss of status of employment with a minimum hiring rate.

Thru this scheme, the company would be able to save a substantial amount and reduce greatly the payroll costs
without affecting the finance of the families of the employees because they will still have a job from where they
could get their income. CIAacS

Moreover, we are also open to a possible reduction of some economic benefits as our gesture of sincere desire to
help.

We are looking forward to a more fruitful round of talks in order to save the hotel. 9

In another letter 10 dated November 20, 2000, Rojas sent respondent more proposals as a form of the Union's gesture
of their intention to help the company, thus:
1) Suspension of [the] CBA for ten years, No strike no lock-out shall be enforced.

2) Pay all the employees their benefits due, and put the length of service to zero with a minimum hiring rate.
Payment of benefits may be on a staggered basis or as available.

3) Night premium and holiday pays shall be according to law. Overtime hours rendered shall be offsetted as
practiced.

4) Reduce the sick leaves and vacation leaves to 15 days/15days.

5) Emergency leave and birthday off are hereby waived.

6) Duty meal allowance is fixed at P30.00 only. No more midnight snacks and double meal allowance. The cook
drinks be stopped as practiced.

7) We will shoulder 50% of the group health insurance and family medical allowance be reduced to 1,500.00
instead of 3,000.00.

8) The practice of bringing home our uniforms for laundry be continued.

9) Fixed manning shall be implemented, the rest of manpower requirements maybe sourced thru WAP and casual
hiring. Manpower for fixed manning shall be 145 rank-and-file union members.

10) Union will cooperate fully on strict implementation of house rules in order to attain desired productivity and
discipline. The union will not tolerate problem members.

11) The union in its desire to be of utmost service would adopt multi-tasking for the hotel to be more
competitive.
 It is understood that with the suspension of the CBA renegotiations, the same existing CBA shall be adopted and
that all provisions therein shall remain enforced except for those mentioned in this proposal.

These proposals shall automatically supersede the affected provisions of the CBA. 11

In a handwritten letter 12 dated November 25, 2000, Rojas once again appealed to respondent for it to consider their
proposals and to re-open the hotel. In said letter, Rojas stated that manpower for fixed manning shall be one hundred (100)
rank-and-file Union members instead of the one hundred forty-five (145) originally proposed. ScaCEH
Finally, sometime in January 2001, DIHFEU-NFL, through Rojas, submitted to respondent a Manifesto 13 concretizing
their earlier proposals.
After series of negotiations, respondent and DIHFEU-NFL, represented by its President, Rojas, and Vice-Presidents,
Exequiel J. Varela Jr. and Avelino C. Bation, Jr., signed a Memorandum of Agreement 14 (MOA) wherein respondent agreed to
re-open the hotel subject to certain concessions offered by DIHFEU-NFL in its Manifesto.
Accordingly, respondent downsized its manpower structure to 100 rank-and-file employees as set forth in the terms of
the MOA. Moreover, as agreed upon in the MOA, a new pay scale was also prepared by respondent.
The retained employees individually signed a "Reconfirmation of Employment" 15 which embodied the new terms and
conditions of their continued employment. Each employee was assisted by Rojas who also signed the document.
On June 15, 2001, respondent resumed its business operations.
On August 22, 2002, Darius Joves (Joves) and Debbie Planas, claiming to be local officers of the National Federation of
Labor (NFL), filed a Notice of Mediation 16before the National Conciliation and Mediation Board (NCMB), Region XI, Davao City.
In said Notice, it was stated that the Union involved was "DARIUS JOVES/DEBBIE PLANAS ET AL., National Federation of Labor."
The issue raised in said Notice was the "Diminution of wages and other benefits through unlawful Memorandum of Agreement."
On August 29, 2002, the NCMB called Joves and respondent to a conference to explore the possibility of settling the
conflict. In the said conference, respondent and petitioner Insular Hotel Employees Union-NFL (IHEU-NFL), represented by
Joves, signed a Submission Agreement 17 wherein they chose AVA Alfredo C. Olvida (AVA Olvida) to act as voluntary arbitrator.
Submitted for the resolution of AVA Olvida was the determination of whether or not there was a diminution of wages and other
benefits through an unlawful MOA. In support of his authority to file the complaint, Joves, assisted by Atty. Danilo Cullo (Cullo),
presented several Special Powers of Attorney (SPA) which were, however, undated and unnotarized.
On September 2, 2002, respondent filed with the NCMB a Manifestation with Motion for a Second Preliminary
Conference, 18 raising the following grounds:
1) The persons who filed the instant complaint in the name of the Insular Hotel Employees Union-NFL have no
authority to represent the Union;

2) The individuals who executed the special powers of attorney in favor of the person who filed the instant
complaint have no standing to cause the filing of the instant complaint; and

3) The existence of an intra-union dispute renders the filing of the instant case premature. 19

On September 16, 2002, a second preliminary conference was conducted in the NCMB, where Cullo denied any
existence of an intra-union dispute among the members of the union. Cullo, however, confirmed that the case was filed not by
the IHEU-NFL but by the NFL. When asked to present his authority from NFL, Cullo admitted that the case was, in fact, filed by
individual employees named in the SPAs. The hearing officer directed both parties to elevate the aforementioned issues to AVA
Olvida. 20 ACIESH
The case was docketed as Case No. AC-220-RB-11-09-022-02 and referred to AVA Olvida. Respondent again raised its
objections, specifically arguing that the persons who signed the complaint were not the authorized representatives of the Union
indicated in the Submission Agreement nor were they parties to the MOA. AVA Olvida directed respondent to file a formal motion
to withdraw its submission to voluntary arbitration.
On October 16, 2002, respondent filed its Motion to Withdraw. 21 Cullo then filed an Opposition 22 where the same
was captioned:
NATIONAL FEDERATION OF LABOR
And 79 Individual Employees, Union Members,

Complainants,

-versus-

Waterfront Insular Hotel Davao,

Respondent.

In said Opposition, Cullo reiterated that the complainants were not representing IHEU-NFL, to wit:

xxx xxx xxx

2. Respondent must have been lost when it said that the individuals who executed the SPA have no standing to
represent the union nor to assail the validity of Memorandum of Agreement (MOA). What is correct is
that the individual complainants are not representing the union but filing the complaint through
their appointed attorneys-in-fact to assert their individual rights as workers who are entitled to the
benefits granted by law and stipulated in the collective bargaining agreement. 23

On November 11, 2002, AVA Olvida issued a Resolution 24 denying respondent's Motion to Withdraw. On December
16, 2002, respondent filed a Motion for Reconsideration 25 where it stressed that the Submission Agreement was void because
the Union did not consent thereto. Respondent pointed out that the Union had not issued any resolution duly authorizing the
individual employees or NFL to file the notice of mediation with the NCMB.
Cullo filed a Comment/Opposition 26 to respondent's Motion for Reconsideration. Again, Cullo admitted that the case
was not initiated by the IHEU-NFL, to wit:
The case was initiated by complainants by filling up Revised Form No. 1 of the NCMB duly furnishing respondent,
copy of which is hereto attached as Annex "A" for reference and consideration of the Honorable Voluntary
Arbitrator. There is no mention there of Insular Hotel Employees Union, but only National Federation of Labor
(NFL). The one appearing at the Submission Agreement was only a matter of filling up the blanks particularly on
the question there of Union; which was filled up with Insular Hotel Employees Union-NFL. There is nothing there
that indicates that it is a complainant as the case is initiated by the individual workers and National Federation of
 Labor, not by the local union. The local union was not included as party-complainant considering that it was a
party to the assailed MOA. 27

On March 18, 2003, AVA Olvida issued a Resolution 28 denying respondent's Motion for Reconsideration. He, however,
ruled that respondent was correct when it raised its objection to NFL as proper party-complainant, thus: AEHCDa
Anent to the real complainant in this instant voluntary arbitration case, the respondent is correct when it raised
objection to the National Federation of Labor (NFL) and as proper party-complainants.

The proper party-complainant is INSULAR HOTEL EMPLOYEES UNION-NFL, the recognized and incumbent
bargaining agent of the rank-and-file employees of the respondent hotel. In the submission agreement of the
parties dated August 29, 2002, the party complainant written is INSULAR HOTEL EMPLOYEES UNION-NFL and
not the NATIONAL FEDERATION OF LABOR and 79 other members.

However, since the NFL is the mother federation of the local union, and signatory to the existing CBA, it can
represent the union, the officers, the members or union and officers or members, as the case may be, in all
stages of proceedings in courts or administrative bodies provided that the issue of the case will involve labor-
management relationship like in the case at bar.

The dispositive portion of the March 18, 2003 Resolution of AVA Olvida reads:
WHEREFORE, premises considered, the motion for reconsideration filed by respondent is DENIED. The resolution
dated November 11, 2002 is modified in so far as the party-complainant is concerned; thus, instead of "National
Federation of Labor and 79 individual employees, union members," shall be "Insular Hotel Employees Union-NFL
et al., as stated in the joint submission agreement dated August 29, 2002. Respondent is directed to comply with
the decision of this Arbitrator dated November 11, 2002,

No further motion of the same nature shall be entertained. 29

On May 9, 2003, respondent filed its Position Paper Ad Cautelam, 30 where it declared, among others, that the same
was without prejudice to its earlier objections against the jurisdiction of the NCMB and AVA Olvida and the standing of the
persons who filed the notice of mediation.
Cullo, now using the caption "Insular Hotel Employees Union-NFL, Complainant," filed a Comment 31 dated June 5,
2003. On June 23, 2003, respondent filed its Reply. 32
Later, respondent filed a Motion for Inhibition 33 alleging AVA Olvida's bias and prejudice towards the cause of the
employees. In an Order 34 dated July 25, 2003, AVA Olvida voluntarily inhibited himself out of "delicadeza" and ordered the
remand of the case to the NCMB.
On August 12, 2003, the NCMB issued a Notice requiring the parties to appear before the conciliator for the selection of
a new voluntary arbitrator.
In a letter 35 dated August 19, 2003 addressed to the NCMB, respondent reiterated its position that the individual
union members have no standing to file the notice of mediation before the NCMB. Respondent stressed that the complaint
should have been filed by the Union. cEaDTA
On September 12, 2003, the NCMB sent both parties a Notice 36 asking them to appear before it for the selection of
the new voluntary arbitrator. Respondent, however, maintained its stand that the NCMB had no jurisdiction over the case.
Consequently, at the instance of Cullo, the NCMB approved ex parte the selection of AVA Montejo as the new voluntary
arbitrator.
On April 5, 2004, AVA Montejo rendered a Decision 37 ruling in favor of Cullo, the dispositive portion of which reads:
WHEREOF, in view of the all the foregoing, judgment is hereby rendered:

1. Declaring the Memorandum of Agreement in question as invalid as it is contrary to law and public policy;

2. Declaring that there is a diminution of the wages and other benefits of the Union members and officers under
the said invalid MOA.

3. Ordering respondent management to immediately reinstate the workers wage rates and other benefits that
they were receiving and enjoying before the signing of the invalid MOA;

4. Ordering the management respondent to pay attorney's fees in an amount equivalent to ten percent (10%) of
whatever total amount that the workers union may receive representing individual wage differentials.

As to the other claims of the Union regarding diminution of other benefits, this accredited voluntary arbitrator is
of the opinion that she has no authority to entertain, particularly as to the computation thereof.

SO ORDERED. 38

Both parties appealed the Decision of AVA Montejo to the CA. Cullo only assailed the Decision in so far as it did not
categorically order respondent to pay the covered workers their differentials in wages reckoned from the effectivity of the MOA
up to the actual reinstatement of the reduced wages and benefits. Cullos' petition was docketed as CA-G.R. SP No. 83831.
Respondent, for its part, questioned among others the jurisdiction of the NCMB. Respondent maintained that the MOA it had
entered into with the officers of the Union was valid. Respondent's petition was docketed as CA-G.R. SP No. 83657. Both cases
were consolidated by the CA. STDEcA
On October 11, 2005, the CA rendered a Decision 39 ruling in favor of respondent, the dispositive portion of which
reads:
WHEREFORE, premises considered, the petition for review in CA-G.R. SP No. 83657 is hereby GRANTED, while
the petition in CA-G.R. SP No. 83831 is DENIED. Consequently, the assailed Decision dated April 5, 2004
rendered by AVA Rosalina L. Montejo is hereby REVERSED and a new one entered declaring the Memorandum of
Agreement dated May 8, 2001 VALID and ENFORCEABLE. Parties are DIRECTED to comply with the terms and
conditions thereof.

SO ORDERED. 40

Aggrieved, Cullo filed a Motion for Reconsideration, which was, however, denied by the CA in a Resolution 41 dated July
13, 2006.
Hence, herein petition, with Cullo raising the following issues for this Court's resolution, to wit:

I.
 WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN FINDING THAT
THE ACCREDITED VOLUNTARY ARBITRATOR HAS NO JURISDICTION OVER THE CASE SIMPLY BECAUSE THE
NOTICE OF MEDIATION DOES NOT MENTION THE NAME OF THE LOCAL UNION BUT ONLY THE AFFILIATE
FEDERATION THEREBY DISREGARDING THE SUBMISSION AGREEMENT DULY SIGNED BY THE PARTIES AND
THEIR LEGAL COUNSELS THAT MENTIONS THE NAME OF THE LOCAL UNION.

II.

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR BY DISREGARDING
THE PROVISIONS OF THE CBA SIMPLY BECAUSE IT BELIEVED THE UNPROVEN ALLEGATIONS OF RESPONDENT
HOTEL THAT IT WAS SUFFERING FROM FINANCIAL CRISIS.

III.

THE HONORABLE COURT OF APPEALS MUST HAVE SERIOUSLY ERRED IN CONCLUDING THAT ARTICLE 100 OF
THE LABOR CODE APPLIES ONLY TO BENEFITS ENJOYED PRIOR TO THE ADOPTION OF THE LABOR CODE
WHICH, IN EFFECT, ALLOWS THE DIMINUTION OF THE BENEFITS ENJOYED BY EMPLOYEES FROM ITS ADOPTION
HENCEFORTH. 42

The petition is not meritorious.

Anent the first error raised, Cullo argues that the CA erred when it overlooked the fact that before the case was
submitted to voluntary arbitration, the parties signed a Submission Agreement which mentioned the name of the local union and
not only NFL. Cullo, thus, contends that the CA committed error when it ruled that the voluntary arbitrator had no jurisdiction
over the case simply because the Notice of Mediation did not state the name of the local union thereby disregarding the
Submission Agreement which states the names of local union as Insular Hotel Employees Union-NFL. 43 HEDSIc
In its Memorandum, 44 respondent maintains its position that the NCMB and Voluntary Arbitrators had no jurisdiction
over the complaint. Respondent, however, now also contends that IHEU-NFL is a non-entity since it is DIHFEU-NFL which is
considered by the DOLE as the only registered union in Waterfront Davao.45 Respondent argues that the Submission Agreement
does not name the local union DIHFEU-NFL and that it had timely withdrawn its consent to arbitrate by filing a motion to
withdraw.
A review of the development of the case shows that there has been much confusion as to the identity of the party which
filed the case against respondent. In the Notice of Mediation 46 filed before the NCMB, it stated that the union involved was
"DARIUS JOVES/DEBBIE PLANAS ET AL., National Federation of Labor." In the Submission Agreement, 47 however, it stated
that the union involved was "INSULAR HOTEL EMPLOYEES UNION-NFL."
Furthermore, a perusal of the records would reveal that after signing the Submission Agreement, respondent
persistently questioned the authority and standing of the individual employees to file the complaint. Cullo then clarified in
subsequent documents captioned as "National Federation of Labor and 79 Individual Employees, Union Members, Complainants"
that the individual complainants are not representing the union, but filing the complaint through their appointed attorneys-in-
fact. 48 AVA Olvida, however, in a Resolution dated March 18, 2003, agreed with respondent that the proper party-complainant
should be INSULAR HOTEL EMPLOYEES UNION-NFL, to wit:
. . . In the submission agreement of the parties dated August 29, 2002, the party complainant written is
INSULAR HOTEL EMPLOYEES UNION-NFL and not the NATIONAL FEDERATION OF LABOR and 79 other
members. 49

The dispositive portion of the Resolution dated March 18, 2003 of AVA Olvida reads:
WHEREFORE, premises considered, the motion for reconsideration filed by respondent is DENIED. The resolution
dated November 11, 2002, is modified in so far as the party complainant is concerned, thus, instead of "National
Federation of Labor and 79 individual employees, union members," shall be "Insular Hotel Employees Union-NFL
et al., as stated in the joint submission agreement dated August 29, 2002. Respondent is directed to comply with
the decision of this Arbitrator dated November 11, 2002. 50

After the March 18, 2003 Resolution of AVA Olvida, Cullo adopted "Insular Hotel Employees Union-NFL et
al., Complainant" as the caption in all his subsequent pleadings. Respondent, however, was still adamant that neither Cullo nor
the individual employees had authority to file the case in behalf of the Union.
While it is undisputed that a submission agreement was signed by respondent and "IHEU-NFL," then represented by
Joves and Cullo, this Court finds that there are two circumstances which affect its validity: first, the Notice of Mediation was filed
by a party who had no authority to do so; second, that respondent had persistently voiced out its objection questioning the
authority of Joves, Cullo and the individual members of the Union to file the complaint before the NCMB.
Procedurally, the first step to submit a case for mediation is to file a notice of preventive mediation with the NCMB. It is
only after this step that a submission agreement may be entered into by the parties concerned.
Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice of preventive mediation, to
wit: TDcAIH
Who may file a notice or declare a strike or lockout or request preventive mediation. —

Any certified or duly recognized bargaining representative may file a notice or declare a strike or
request for preventive mediation in cases of bargaining deadlocks and unfair labor practices. The
employer may file a notice or declare a lockout or request for preventive mediation in the same cases. In the
absence of a certified or duly recognized bargaining representative, any legitimate labor organization in the
establishment may file a notice, request preventive mediation or declare a strike, but only on grounds of unfair
labor practice.

From the foregoing, it is clear that only a certified or duly recognized bargaining agent may file a notice or request for
preventive mediation. It is curious that even Cullo himself admitted, in a number of pleadings, that the case was filed not by the
Union but by individual members thereof. Clearly, therefore, the NCMB had no jurisdiction to entertain the notice filed before it.
Even though respondent signed a Submission Agreement, it had, however, immediately manifested its desire to
withdraw from the proceedings after it became apparent that the Union had no part in the complaint. As a matter of fact, only
four days had lapsed after the signing of the Submission Agreement when respondent called the attention of AVA Olvida in a
"Manifestation with Motion for a Second Preliminary Conference" 51 that the persons who filed the instant complaint in the name
of Insular Hotel Employees Union-NFL had no authority to represent the Union. Respondent cannot be estopped in raising the
jurisdictional issue, because it is basic that the issue of jurisdiction may be raised at any stage of the proceedings, even on
appeal, and is not lost by waiver or by estoppel.
In Figueroa v. People, 52 this Court explained that estoppel is the exception rather than the rule, to wit:
 Applying the said doctrine to the instant case, the petitioner is in no way estopped by laches in assailing the
jurisdiction of the RTC, considering that he raised the lack thereof in his appeal before the appellate court. At
that time, no considerable period had yet elapsed for laches to attach. True, delay alone, though unreasonable,
will not sustain the defense of "estoppel by laches" unless it further appears that the party, knowing his rights,
has not sought to enforce them until the condition of the party pleading laches has in good faith become so
changed that he cannot be restored to his former state, if the rights be then enforced, due to loss of evidence,
change of title, intervention of equities, and other causes. In applying the principle of estoppel by laches in the
exceptional case of Sibonghanoy, the Court therein considered the patent and revolting inequity and unfairness
of having the judgment creditors go up their Calvary once more after more or less 15 years. The same, however,
does not obtain in the instant case.

We note at this point that estoppel, being in the nature of a forfeiture, is not favored by law. It is to be applied
rarely — only from necessity, and only in extraordinary circumstances. The doctrine must be applied with great
care and the equity must be strong in its favor. When misapplied, the doctrine of estoppel may be a most
effective weapon for the accomplishment of injustice. . . . (Italics supplied.) 53

The question to be resolved then is, do the individual members of the Union have the requisite standing to question the
MOA before the NCMB? On this note,Tabigue v. International Copra Export Corporation (INTERCO) 54 is instructive:
Respecting petitioners' thesis that unsettled grievances should be referred to voluntary arbitration as called for in
the CBA, the same does not lie. The pertinent portion of the CBA reads: TcDAHS

In case of any dispute arising from the interpretation or implementation of this Agreement or any
matter affecting the relations of Labor and Management, theUNION and the COMPANY agree to exhaust
all possibilities of conciliation through the grievance machinery. The committee shall resolve all
problems submitted to it within fifteen (15) days after the problems ha[ve] been discussed by the
members. If the dispute or grievance cannot be settled by the Committee, or if the committee failed to
act on the matter within the period of fifteen (15) days herein stipulated, the UNION and the COMPANY
agree to submit the issue to Voluntary Arbitration. Selection of the arbitrator shall be made within seven
(7) days from the date of notification by the aggrieved party. The Arbitrator shall be selected by lottery
from four (4) qualified individuals nominated by in equal numbers by both parties taken from the list of
Arbitrators prepared by the National Conciliation and Mediation Board (NCMB). If the Company and
the Union representatives within ten (10) days fail to agree on the Arbitrator, the NCMB shall name the
Arbitrator. The decision of the Arbitrator shall be final and binding upon the parties. However, the
Arbitrator shall not have the authority to change any provisions of the Agreement. The cost of
arbitration shall be borne equally by the parties.

Petitioners have not, however, been duly authorized to represent the union. Apropos is this Court's
pronouncement in Atlas Farms, Inc. v. National Labor Relations Commission, viz.:

. . . Pursuant to Article 260 of the Labor Code, the parties to a CBA shall name or designate their
respective representatives to the grievance machinery and if the grievance is unsettled in that level, it
shall automatically be referred to the voluntary arbitrators designated in advance by parties to a CBA.
Consequently, only disputes involving the union and the company shall be referred to the
grievance machinery or voluntary arbitrators. (Emphasis and underscoring supplied.) 55 HEDCAS

If the individual members of the Union have no authority to file the case, does the federation to which the local union is
affiliated have the standing to do so? On this note, Coastal Subic Bay Terminal, Inc. v. Department of Labor and
Employment 56 is enlightening, thus:
. . . A local union does not owe its existence to the federation with which it is affiliated. It is a separate and
distinct voluntary association owing its creation to the will of its members. Mere affiliation does not divest
the local union of its own personality, neither does it give the mother federation the license to act
independently of the local union. It only gives rise to a contract of agency, where the former acts in
representation of the latter. Hence, local unions are considered principals while the federation is deemed to be
merely their agent. . . . 57

Based on the foregoing, this Court agrees with approval with the disquisition of the CA when it ruled that NFL had no
authority to file the complaint in behalf of the individual employees, to wit:
Anent the first issue, We hold that the voluntary arbitrator had no jurisdiction over the case. Waterfront contents
that the Notice of Mediation does not mention the name of the Union but merely referred to the National
Federation of Labor (NFL) with which the Union is affiliated. In the subsequent pleadings, NFL's legal counsel
even confirmed that the case was not filed by the union but by NFL and the individual employees named in the
SPAs which were not even dated nor notarized.

Even granting that petitioner Union was affiliated with NFL, still the relationship between that of the local union
and the labor federation or national union with which the former was affiliated is generally understood to be that
of agency, where the local is the principal and the federation the agency. Being merely an agent of the local
union, NFL should have presented its authority to file the Notice of Mediation. While We commend NFL's
zealousness in protecting the rights of lowly workers, We cannot, however, allow it to go beyond what it is
empowered to do.

As provided under the NCMB Manual of Procedures, only a certified or duly recognized bargaining representative
and an employer may file a notice of mediation, declare a strike or lockout or request preventive mediation. The
Collective Bargaining Agreement (CBA), on the other, recognizes that DIHFEU-NFL is the exclusive bargaining
representative of all permanent employees. The inclusion of the word "NFL" after the name of the local union
merely stresses that the local union is NFL's affiliate. It does not, however, mean that the local union cannot
stand on its own. The local union owes its creation and continued existence to the will of its members and not to
the federation to which it belongs. The spring cannot rise higher than its source, so to speak. 58

In its Memorandum, respondent contends that IHEU-NFL is a non-entity and that DIHFEU-NFL is the only recognized
bargaining unit in their establishment. While the resolution of the said argument is already moot and academic given the
discussion above, this Court shall address the same nevertheless.
While the November 16, 2006 Certification 59 of the DOLE clearly states that "IHEU-NFL" is not a registered labor
organization, this Court finds that respondent is estopped from questioning the same as it did not raise the said issue in the
proceedings before the NCMB and the Voluntary Arbitrators. A perusal of the records reveals that the main theory posed by
respondent was whether or not the individual employees had the authority to file the complaint notwithstanding the apparent
non-participation of the union. Respondent never put in issue the fact that DIHFEU-NFL was not the same as IHEU-NFL.
Consequently, it is already too late in the day to assert the same. HCDAac
Anent the second issue raised by Cullo, the same is again without merit.
 Cullo contends that respondent was not really suffering from serious losses as found by the CA. Cullo anchors his
position on the denial by the Wage Board of respondent's petition for exemption from Wage Order No. RTWPB-X1-08 on the
ground that it is a distressed establishment. 60 In said denial, the Board ruled:
A careful analysis of applicant's audited financial statements showed that during the period ending December 31,
1999, it registered retained earnings amounting to P8,661,260.00. Applicant's interim financial statements
for the quarter ending June 30, 2000 cannot be considered, as the same was not audited. Accordingly,
this Board finds that applicant is not qualified for exemption as a distressed establishment pursuant to the
aforecited criteria. 61

In its Decision, the CA held that upholding the validity of the MOA would mean the continuance of the hotel's operation
and financial viability, to wit:
. . . We cannot close Our eyes to the impending financial distress that an employer may suffer should the terms
of employment under the said CBA continue.

If indeed We are to tilt the balance of justice to labor, then We would be inclined to favor for the nonce petitioner
Waterfront. To uphold the validity of the MOA would mean the continuance of the hotel's operation and financial
viability. Otherwise, the eventual permanent closure of the hotel would only result to prejudice of the employees,
as a consequence thereof, will necessarily lose their jobs. 62

In its petition before the CA, respondent submitted its audited financial statements 63 which show that for the years
1998, 1999, until September 30, 2000, its total operating losses amounted to P48,409,385.00. Based on the foregoing, the CA
was not without basis when it declared that respondent was suffering from impending financial distress. While the Wage Board
denied respondent's petition for exemption, this Court notes that the denial was partly due to the fact that the June 2000
financial statements then submitted by respondent were not audited. Cullo did not question nor discredit the accuracy and
authenticity of respondent's audited financial statements. This Court, therefore, has no reason to question the veracity of the
contents thereof. Moreover, it bears to point out that respondent's audited financial statements covering the years 2001 to 2005
show that it still continues to suffer losses. 64
Finally, anent the last issue raised by Cullo, the same is without merit.
Cullo argues that the CA must have erred in concluding that Article 100 of the Labor Code applies only to benefits
already enjoyed at the time of the promulgation of the Labor Code.
Article 100 of the Labor Code provides:
PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF BENEFITS — Nothing in this Book shall be construed
to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of the
promulgation of this Code.

On this note, Apex Mining Company, Inc. v. NLRC 65 is instructive, to wit:

Clearly, the prohibition against elimination or diminution of benefits set out in Article 100 of the Labor Code is
specifically concerned with benefits already enjoyed at the time of the promulgation of the Labor Code. Article
100 does not, in other words, purport to apply to situations arising after the promulgation date of the Labor Code
. . . . 66

Even assuming arguendo that Article 100 applies to the case at bar, this Court agrees with respondent that the same
does not prohibit a union from offering and agreeing to reduce wages and benefits of the employees. In Rivera v.
Espiritu, 67 this Court ruled that the right to free collective bargaining, after all, includes the right to suspend it, thus:
A CBA is "a contract executed upon request of either the employer or the exclusive bargaining representative
incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms
and conditions of employment, including proposals for adjusting any grievances or questions arising under such
agreement." The primary purpose of a CBA is the stabilization of labor-management relations in order to create a
climate of a sound and stable industrial peace. In construing a CBA, the courts must be practical and realistic and
give due consideration to the context in which it is negotiated and the purpose which it is intended to serve.

The assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations
undertaken in the light of the severe financial situation faced by the employer, with the peculiar and
unique intention of not merely promoting industrial peace at PAL, but preventing the latter's
closure. We find no conflict between said agreement and Article 253-A of the Labor Code. Article 253-A has a
two-fold purpose. One is to promote industrial stability and predictability. Inasmuch as the agreement sought to
promote industrial peace at PAL during its rehabilitation, said agreement satisfies the first purpose of Article 253-
A. The other is to assign specific timetables wherein negotiations become a matter of right and requirement.
Nothing in Article 253-A, prohibits the parties from waiving or suspending the mandatory timetables and
agreeing on the remedies to enforce the same. EICScD

In the instant case, it was PALEA, as the exclusive bargaining agent of PAL's ground employees, that voluntarily
entered into the CBA with PAL. It was also PALEA that voluntarily opted for the 10-year suspension of the CBA.
Either case was the union's exercise of its right to collective bargaining. The right to free collective
bargaining, after all, includes the right to suspend it. 68

Lastly, this Court is not unmindful of the fact that DIHFEU-NFL's Constitution and By-Laws specifically provides that "the
results of the collective bargaining negotiations shall be subject to ratification and approval by majority vote of the Union
members at a meeting convened, or by plebiscite held for such special purpose." 69 Accordingly, it is undisputed that the MOA
was not subject to ratification by the general membership of the Union. The question to be resolved then is, does the non-
ratification of the MOA in accordance with the Union's constitution prove fatal to the validity thereof?
It must be remembered that after the MOA was signed, the members of the Union individually signed contracts
denominated as "Reconfirmation of Employment." 70 Cullo did not dispute the fact that of the 87 members of the Union, who
signed and accepted the "Reconfirmation of Employment," 71 are the respondent employees in the case at bar. Moreover, it
bears to stress that all the employees were assisted by Rojas, DIHFEU-NFL's president, who even co-signed each contract.
Stipulated in each Reconfirmation of Employment were the new salary and benefits scheme. In addition, it bears to
stress that specific provisions of the new contract also made reference to the MOA. Thus, the individual members of the union
cannot feign knowledge of the execution of the MOA. Each contract was freely entered into and there is no indication that the
same was attended by fraud, misrepresentation or duress. To this Court's mind, the signing of the individual "Reconfirmation of
Employment" should, therefore, be deemed an implied ratification by the Union members of the MOA.
In Planters Products, Inc. v. NLRC, 71 this Court refrained from declaring a CBA invalid notwithstanding that the same
was not ratified in view of the fact that the employees had enjoyed benefits under it, thus:
 Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the Implementing Rules, the parties to a
collective [bargaining] agreement are required to furnish copies of the appropriate Regional Office with
accompanying proof of ratification by the majority of all the workers in a bargaining unit. This was not done in
the case at bar. But we do not declare the 1984-1987 CBA invalid or void considering that the employees have
enjoyed benefits from it. They cannot receive benefits under provisions favorable to them and later insist that
the CBA is void simply because other provisions turn out not to the liking of certain employees. . . . . Moreover,
the two CBAs prior to the 1984-1987 CBA were not also formally ratified, yet the employees are basing their
present claims on these CBAs. It is iniquitous to receive benefits from a CBA and later on disclaim its
validity. 72

Applied to the case at bar, while the terms of the MOA undoubtedly reduced the salaries and certain benefits previously
enjoyed by the members of the Union, it cannot escape this Court's attention that it was the execution of the MOA which paved
the way for the re-opening of the hotel, notwithstanding its financial distress. More importantly, the execution of the MOA
allowed respondents to keep their jobs. It would certainly be iniquitous for the members of the Union to sign new contracts
prompting the re-opening of the hotel only to later on renege on their agreement on the fact of the non-ratification of the MOA.
In addition, it bears to point out that Rojas did not act unilaterally when he negotiated with respondent's management.
The Constitution and By-Laws of DIHFEU-NFL clearly provide that the president is authorized to represent the union on all
occasions and in all matters in which representation of the union may be agreed or required. 73 Furthermore, Rojas was
properly authorized under a Board of Directors Resolution 74 to negotiate with respondent, the pertinent portions of which read:
SECRETARY's CERTIFICATE

I, MA. SOCORRO LISETTE B. IBARRA, . . ., do hereby certify that, at a meeting of the Board of Directors of the
DIHFEU-NFL, on 28 Feb. 2001 with a quorum duly constituted, the following resolutions were unanimously
approved:

RESOLVED, as it is hereby resolved that the Manifesto dated 25 Feb. 2001 be approved ratified and
adopted; ScaATD

RESOLVED, FURTHER, that Mr. Domy R. Rojas, the president of the DIHFEU-NFL, be hereby
authorized to negotiate with Waterfront Insular Hotel Davao and to work for the latter's
acceptance of the proposals contained in DIHFEU-NFL Manifesto; and

RESOLVED, FINALLY, that Mr. Domy R. Rojas is hereby authorized to sign any and all
documents to implement, and carry into effect, his foregoing authority. 75

Withal, while the scales of justice usually tilt in favor of labor, the peculiar circumstances herein prevent this Court from
applying the same in the instant petition. Even if our laws endeavor to give life to the constitutional policy on social justice and
on the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also
recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play. 76
WHEREFORE, premises considered, the petition is DENIED. The Decision dated October 11, 2005, and the Resolution
dated July 13, 2006 of the Court of Appeals in consolidated labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP No.
83657, are AFFIRMED.
SO ORDERED.

Carpio, Velasco, Jr., * Bersamin ** and Abad, JJ., concur.

||| (Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, G.R. No. 174040-41, [September 22, 2010], 645 PHIL
387-420)

31. SECOND DIVISION

[G.R. No. L-45824. June 19, 1985.]

VOLKSCHEL LABOR UNION, petitioner, vs. BUREAU OF LABOR RELATIONS, ASSOCIATED LABOR UNION FOR
METAL WORKERS, DMG, INC., PEOPLE'S CAR, INC., KARBAYAN, INC., and RTC TRADING, INC., respondents.

Ignacio P. Lacsina for petitioner.

William D. Dichoso for respondent DMG, Inc.
Abraham B. Drapiza for private respondent.

DECISION

CUEVAS, J p:

Petition for certiorari to review the Resolutions dated January 25, 1977 and March 14, 1977 of the Bureau of Labor Relations. LLphil

On April 25, 1977, however, a Supplemental Petition was filed seeking the issuance of —

(1) A preliminary mandatory injunction commanding respondents to return to petitioner the union dues amounting to about
P55,000.00 lawfully pertaining to it but illegally levied upon, collected and handed over by respondent Bureau, acting through the
NLRC sheriff, to respondent Associated Labor Union for Metalworkers, with the collusion of respondents DMG, Inc., Karbayan, Inc.
and RTC Machineries, Inc.;

(2) A preliminary restraining order prohibiting respondents from making further delivery to respondent Associated Labor Union for
Metalworkers of Union dues collected or to be collected through check-off from the wages of petitioner's members by respondents,
DMG, Inc., Karbayan, Inc., RTC Machineries, Inc., and People's Car, Inc., under or by virtue of the questioned writ of execution
issued by respondent Bureau, dated April 4, 1977.

Petitioner was once affiliated with the Associated Labor Union for Metal Workers (ALUMETAL for short). On August 1, 1975, both
unions, using the name Volkschel Labor Union Associated Labor Union for Metal Workers, jointly entered into a collective bargaining
agreement with respondent companies. One of the subjects dealt with is the payment of union dues which is provided for in Section
3, Article I, of the CBA, which reads:

"Section 3. CHECK-OFF. — The COMPANY agrees to make payroll deductions not oftener than twice a month of
UNION membership dues and such special assessments fees or fines as may be duly authorized by the UNION,
provided that the same is covered by the individual check-off authorization of the UNION members. All said
deductions shall be promptly transmitted within five (5) days by the COMPANY to the UNION Treasurer. The
COMPANY shall prepare two (2) checks. One (1) check will be under the name of the local union as their local
fund including local special assessment funds and the other check will be for the ALU Regional Office regarding
the remittance of the UNION dues deduction."

On March 10, 1976, a majority of petitioner's members decided to disaffiliate from respondent federation in order to operate on its
own as an independent labor group pursuant to Article 241 (formerly Article 240) of the Labor Code of the Philippines, the pertinent
portion of which reads: LexLib

"Incumbent affiliates of existing federations or national unions may disaffiliate only for the purpose of joining a
federation or national union in the industry or region in which it properly belongs or for the purpose of operating
as an independent labor group."

Accordingly, a resolution was adopted and signed by petitioner's members revoking their check-off authorization in favor of
ALUMETAL and notices thereof were served on ALUMETAL and respondent companies.

Confronted with the predicament of whether or not to continue deducting from employees' wages and remitting union dues to
respondent ALUMETAL which wrote respondent companies advising them to continue deducting union dues and remitting them to
said federation, respondent companies sought the legal opinion of the respondent Bureau as regards the controversy between the
two unions. On November 11, 1976, Med-Arbiter George A. Eduvalla of respondent Bureau rendered a Resolution which in effect
found the disaffiliation legal but at the same time gave the opinion that petitioner's members should continue paying their dues to
ALUMETAL in the concept of agency fees. 1

From the said Resolution of the Med-Arbiter both petitioner and respondent ALUMETAL appealed to the Director of respondent
Bureau. Petitioner contended that the Med-Arbiter's opinion to the effect that petitioner's members remained obligated to pay dues
to respondent ALUMETAL was inconsistent with the dispositive finding that petitioner's disaffiliation from ALUMETAL was valid.
ALUMETAL, on the other hand, assailed the Resolution in question asserting that the disaffiliation should have been declared contrary
to law.

On January 25, 1977, respondent Bureau, through its Acting Director, Francisco L. Estrella, REVERSED the Med-Arbiter's Resolution,
and declared that the Bureau recognized "the continued affiliation of Volkschel Labor Union with the Associated Labor Union for Metal
Workers." 2

Petitioner appealed the Acting Director's Resolution to the Secretary of Labor (now Minister of Labor and Employment) who, treating
the appeal as a Motion for Reconsideration, referred the same back to respondent Bureau. On March 14, 1977, the Bureau denied
the appeal for lack of merit.

Hence, the instant petition.

Meanwhile, on April 4, 1977, on motion of ALUMETAL, the then Acting Secretary of Labor, Amado Gat Inciong, issued a writ of
execution commanding the Sheriff of the National Labor Relations Commission "to enforce and execute the order of January 25,
1977, which has become final and executory. 3 Pursuant thereto, the NLRC Sheriff enforced and implemented the Order of January
25, 1977, as a result of which respondent companies turned over and handed to respondent federation the union dues and other
assessments in accordance with the check-off provision of the CBA. prLL

From the pleadings filed and arguments of counsel, the following issues present themselves for this Court's resolution.

I
Is petitioner union's disaffiliation from respondent federation valid?.
II
Do respondent companies have the right to effect union dues collections despite revocation by the
employees of the check-off authorization? and
III
Is respondent federation entitled to union dues payments from petitioner union's members
notwithstanding their disaffiliation from said federation?
We resolve the first issue in the affirmative.

The right of a local union to disaffiliate from its mother union is well-settled. In previous cases, it has been repeatedly held that a
local union, being a separate and voluntary association, is free to serve the interest of all its members including the freedom to
disaffiliate when circumstances warrant. 4 This right is consistent with the Constitutional guarantee of freedom of association (Article
IV, Section 7, Philippine Constitution). LLphil

Petitioner contends that the disaffiliation was not due to any opportunists motives on its part. Rather it was prompted by the
federation's deliberate and habitual dereliction of duties as mother federation towards petitioner union. Employees' grievances were
allegedly left unattended to by respondent federation to the detriment of the employees' rights and interests.

In reversing the Med-Arbiter's resolution, respondent Bureau declared: the Department of Labor is set on a task to restructure the
labor movement to the end that the workers will unite themselves along industry lines. Carried to its complete fruition, only one
union for every industry will remain to bargain collectively for the workers. The clear policy therefore even now is to conjoin workers
and worker groups, not to dismember them. 5 This policy is commendable. However, we must not lose sight of the constitutional
mandate of protecting labor and the workers' right to self-organization. In the implementation and interpretation of the provisions of
the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration.
In the case at bar, it would go against the spirit of the labor law to restrict petitioner's right to self-organization due to the existence
of the CBA. We agree with the Med-Arbiter's opinion that "A disaffiliation does not disturb the enforceability and administration of a
collective agreement; it does not occasion a change of administrators of the contract nor even an amendment of the provisions
thereof." 6 But nowhere in the record does it appear that the contract entered into by the petitioner and ALUMETAL prohibits the
withdrawal of the former from the latter.
This now brings us to the second issue. Under Section 3, Article I, of the CBA, the obligation of the respondent companies to deduct
and remit dues to ALUMETAL is conditioned on the individual check-off authorization of petitioner's members. In other words,
ALUMETAL is entitled to receive the dues from respondent companies as long as petitioner union is affiliated with it and respondent
companies are authorized by their employees (members of petitioner union) to deduct union dues. Without said affiliation, the
employer has no link to the mother union. The obligation of an employee to pay union dues is coterminous with his affiliation or
membership. "The employees' check-off authorization, even if declared irrevocable, is good only as long as they remain members of
the union concerned." 7 A contract between an employer and the parent organization as bargaining agent for the employees is
terminated by the disaffiliation of the local of which the employees are members. 8Respondent companies therefore were wrong in
continuing the check-off in favor of respondent federation since they were duly notified of the disaffiliation and of petitioner's
members having already rescinded their check-off authorization. cdll

With the view we take on those two issues, we find no necessity in dwelling further on the last issue. Suffice it to state that
respondent federation is not entitled to union dues payments from petitioner's members. "A local union which has validly withdrawn
from its affiliation with the parent association and which continues to represent the employees of an employer is entitled to the
check-off dues under a collective bargaining contract." 9

WHEREFORE, the Resolutions of the Bureau of Labor Relations of January 25, 1977 and March 14, 1977 are REVERSED and SET
ASIDE. Respondent ALUMETAL is ordered to return to petitioner union all the union dues enforced and collected through the NLRC
Sheriff by virtue of the writ of execution dated April 4, 1977 issued by respondent Bureau. llcd

No costs.

SO ORDERED.

Makasiar, Aquino, Concepcion, Jr., Abad Santos and Escolin, JJ., concur.

||| (Volkschel Labor Union v. Bureau of Labor Relations, G.R. No. L-45824, [June 19, 1985], 221 PHIL 423-430)

32. SECOND DIVISION

[G.R. No. 127374. January 31, 2002.]

PHILIPPINE SKYLANDERS, INC., MARILES C. ROMULO and FRANCISCO DAKILA, petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER EMERSON TUMANON, PHILIPPINE
ASSOCIATION OF FREE LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and SERAFIN
AYROSO, respondents.

[G.R. No. 127431. January 31, 2002.]

PHILIPPINE SKYLANDERS AND WORKERS ASSOCIATION-NCW, MACARIO CABANIAS, PEPITO

RODILLAS, SHARON CASTILLO, DANILO CARBONEL, MANUEL EDA, ROLANDO FELIX, JOCELYN
FRONDA, RICARDO LUMBA, JOSEPH MARISOL, NERISA MORTEL, TEOFILO QUIRONG, LEONARDO
REYES, MANUEL CADIENTE and HERMINIA RIOSA, petitioners, vs. PHILIPPINE ASSOCIATION OF FREE
LABOR UNIONS (PAFLU) SEPTEMBER (now UNIFIED PAFLU) and NATIONAL LABOR RELATIONS
COMMISSION, SECOND DIVISION, respondents.

Albano Garcia & Diaz Law Offices for petitioner PSI.

Jemelio L. Villones for petitioners in G.R. No. 127431.

Gerardo S. Dilig & Cris Allan Zafra and Valdez Medialdea Caraos collaborating counsels for private respondents.

SYNOPSIS

The Philippine Skylanders Employees Association (PSEA), a local labor union affiliated with the Philippine Association of
Free Labor Unions (PAFLU) September, won in the certification election conducted among the rank and file employees of
Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders Employees Association — WATU (PSEA-WATU)
immediately protested the result of the election before the Secretary of Labor. Several months later, pending settlement of the
controversy, PSEA sent PAFLU a notice of disaffiliation. PSEA subsequently affiliated itself with the National Congress of Workers
(NCW), changed its name to Philippine Skylanders Employees Association-National Congress of Workers (PSEA-NCW). PSEA-
NCW entered into a collective bargaining agreement with PSI which was immediately registered with the Department of Labor
and Employment. Meanwhile, PAFLU filed a complaint for unfair labor practice against PSI for the latter's refusal to bargain
collectively against its workers and for its recognition of PSEA-NCW. Thereafter, the Labor Arbiter declared PSEA's disaffiliation
from PAFLU invalid and held PSI, PSEA-PAFLU and their respective officers guilty of unfair labor practice. On appeal to the NLRC,
the latter upheld the decision of the Labor Arbiter. These present petitions for certiorari were filed by PSI and PSEA-NCW
together with their respective officers pleading for a reversal of the NLRC's decision.
The Supreme Court ruled that the pendency of an election protest involving both the mother federation and the local
union did not constitute a bar to a valid disaffiliation. There is nothing shown in the records nor is it claimed by PAFLU that the
local union was expressly forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid
breakaway. The local unions remain the basic units of association, free to serve their own interests subject to the restraints
imposed by the constitution and by-laws of the national federation, and free also to renounce the affiliation upon the terms laid
down in the agreement which brought such affiliation into existence.

SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; BUREAU OF LABOR RELATIONS; HAS JURISDICTION TO ACT ON AN INTER-
UNION CONFLICT. — The issue of disaffiliation is an inter-union conflict the jurisdiction of which properly lies with the Bureau of
Labor Relations (BLR) and not with the Labor Arbiter.

2. ID.; ID.; LABOR ORGANIZATIONS; LOCAL UNION; HAS RIGHT TO DISAFFILIATE FROM MOTHER FEDERATION. — The right of a
local union to disaffiliate from its mother federation is not a novel thesis unillumined by case law. In the landmark case of Liberty
Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc. we upheld the right of local unions to separate from their mother federation
on the ground that as separate and voluntary associations, local unions do not owe their creation and existence to the national
federation to which they are affiliated but, instead, to the will of their members.

3. ID.; ID.; ID.; ID.; SOLE ESSENCE OF AFFILIATION IS TO INCREASE, BY COLLECTIVE ACTION, COMMON BARGAINING POWER OF
LOCAL UNIONS. — The sole essence of affiliation is to increase, by collective action, the common bargaining power of local unions for
the effective enhancement and protection of their interests. Admittedly, there are times when without succor and support local
unions may find it hard, unaided by other support groups, to secure justice for themselves.

4. ID.; ID.; ID.; ID.; PENDENCY OF ELECTION PROTEST INVOLVING BOTH MOTHER FEDERATION AND LOCAL UNION DOES NOT BAR
VALID DISAFFILIATION; CASE AT BAR. — There is nothing shown in the records nor is it claimed by PAFLU that the local union was
expressly forbidden to disaffiliate from the federation nor were there any conditions imposed for a valid breakaway. As such, the
pendency of an election protest involving both the mother federation and the local union did not constitute a bar to a valid
disaffiliation. Neither was it disputed by PAFLU that 111 signatories out of the 120 members of the local union; or an equivalent of
92.5% of the total union membership supported the claim of disaffiliation and had in fact disauthorized PAFLU from instituting any
complaint in their behalf. Surely, this is not a case where one (1) or two (2) members of the local union decided to disaffiliate from
the mother federation, but it is a case where almost all local union members decided to disaffiliate.

5. ID.; ID.; UNFAIR LABOR PRACTICE; COMPLAINT FOR UNFAIR LABOR PRACTICE FILED BY PARTY WITH NO LEGAL PERSONALITY
SHOULD BE DISMISSED; CASE AT BAR. — The mere act of disaffiliation did not divest PSEA of its own personality; neither did it give
PAFLU the license to act independently of the local union. Recreant to its mission, PAFLU cannot simply ignore the demands of the
local chapter and decide for its welfare. PAFLU might have forgotten that as an agent it could only act in representation of and in
accordance with the interests of the local union. The complaint then for unfair labor practice lodged by PAFLU against PSI, PSEA and
their respective officers, having been filed by a party which has no legal personality to institute the complaint, should have been
dismissed at the first instance for failure to state a cause of action. SAcaDE

6. ID.; ID.; LABOR ORGANIZATIONS; LOCAL UNION; IN WEIGHING CLAIMS OF LOCAL UNION AS AGAINST THOSE OF NATIONAL
FEDERATION, THOSE OF FORMER MUST BE PREFERRED. — Policy considerations dictate that in weighing the claims of a local union
as against those of a national federation, those of the former must be preferred. Parenthetically though, the desires of the mother
federation to protect its locals are not altogether to be shunned. It will however be to err greatly against the Constitution if the
desires of the federation would be favored over those of its members. That, at any rate, is the policy of the law. For if it were
otherwise, instead of protection, there would be disregard and neglect of the lowly workingmen.

DECISION

BELLOSILLO, J p:

This is a petition for certiorari 1 seeking to set aside the 31 July 1996 Decision 2 of the National Labor Relations Commission
affirming the 30 June 1995 Decision of the Labor Arbiter holding petitioners Philippine Skylanders, Inc., Mariles C. Romulo 3 and
Francisco Dakila as well as the elected officers of the Philippine Skylanders Employees and Workers Association-PAFLU 4 guilty of
unfair labor practice and ordering them to pay private respondent Philippine Association of Free Labor Union (PAFLU)
September 5 P150,000.00 as damages. Petitioners likewise seek the reversal of the 31 October 1996 Resolution of the NLRC denying
their Motion for Reconsideration.

In November 1993 the Philippine Skylanders Employees Association (PSEA), a local labor union affiliated with the Philippine
Association of Free Labor Unions (PAFLU) September (PAFLU), won in the certification election conducted among the rank and file
employees of Philippine Skylanders, Inc. (PSI). Its rival union, Philippine Skylanders Employees Association-WATU (PSEA-WATU)
immediately protested the result of the election before the Secretary of Labor.

Several months later, pending settlement of the controversy, PSEA sent PAFLU a notice of disaffiliation citing as reason PAFLU's
supposed deliberate and habitual dereliction of duty toward its members. Attached to the notice was a copy of the resolution adopted
and signed by the officers and members of PSEA authorizing their local union to disaffiliate from its mother federation.

PSEA subsequently affiliated itself with the National Congress of Workers (NCW), changed its name to Philippine Skylanders
Employees Association — National Congress of Workers (PSEA-NCW), and to maintain continuity within the organization, allowed the
former officers of PSEA-PAFLU to continue occupying their positions as elected officers in the newly-forged PSEA-NCW.

On 17 March 1994 PSEA-NCW entered into a collective bargaining agreement with PSI which was immediately registered with the
Department of Labor and Employment.

Meanwhile, apparently oblivious to PSEA's shift of allegiance, PAFLU Secretary General Serafin Ayroso wrote Mariles C. Romulo
requesting a copy of PSI's audited financial statement. Ayroso explained that with the dismissal of PSEA-WATU's election protest the
time was ripe for the parties to enter into a collective bargaining agreement.

On 30 July 1994 PSI through its personnel manager Francisco Dakila denied the request citing as reason PSEA's disaffiliation from
PAFLU and its subsequent affiliation with NCW.

Agitated by PSI's recognition of PSEA-NCW, PAFLU through Serafin Ayroso filed a complaint for unfair labor practice against PSI, its
president Mariles Romulo and personnel manager Francisco Dakila. PAFLU alleged that aside from PSI's refusal to bargain collectively
with its workers, the company through its president and personnel manager, was also liable for interfering with its employees' union
activities. 6

Two (2) days later or on 6 October 1994 Ayroso filed another complaint in behalf of PAFLU for unfair labor practice against Francisco
Dakila. Through Ayroso PAFLU claimed that Dakila was present in PSEA's organizational meeting thereby confirming his illicit
participation in union activities. Ayroso added that the members of the local union had unwittingly fallen into the manipulative
machinations of PSI and were lured into endorsing a collective bargaining agreement which was detrimental to their interests. 7 The
two (2) complaints were thereafter consolidated.
On 1 February 1995 PAFLU amended its complaint by including the elected officers of PSEA-PAFLU as additional party respondents.
PAFLU averred that the local officers of PSEA-PAFLU, namely Macario Cabanias, Pepito Rodillas, Sharon Castillo, Danilo Carbonel,
Manuel Eda, Rolando Felix, Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol, Nerisa Mortel, Teofilo Quirong, Leonardo Reyes, Manuel
Cadiente, and Herminia Riosa, were equally guilty of unfair labor practice since they brazenly allowed themselves to be manipulated
and influenced by petitioner Francisco Dakila. 8

PSI, its president Mariles C. Romulo, and its personnel manager Dakila moved for the dismissal of the complaint on the ground that
the issue of disaffiliation was an inter-union conflict which lay beyond the jurisdiction of the Labor Arbiter. On the other hand, PSEA-
NCW took the cudgels for its officers who were being sued in their capacities as former officers of PSEA-PAFLU and asserted that
since PSEA was no longer affiliated with PAFLU, Ayroso or PAFLU for that matter had no personality to file the instant complaint. In
support of this assertion, PSEA-NCW submitted in evidence a Katunayan signed by 111 out of 120 rank and file employees of PSI
disauthorizing Ayroso or PAFLU from instituting any action in their behalf. 9

In a Decision rendered on 30 June 1995 the Labor Arbiter declared PSEA's disaffiliation from PAFLU invalid and held PSI, PSEA-PAFLU
and their respective officers guilty of unfair labor practice. The Decision explained that despite PSEA-PAFLU's status as the sole and
exclusive bargaining agent of PSI's rank and file employees, the company knowingly sanctioned and confederated with Dakila in
actively assisting a rival union. This, according to the Labor Arbiter, was a classic case of interference for which PSI could be held
responsible. As PSEA-NCW's personality was not accorded recognition, its collective bargaining agreement with PSI was struck down
for being invalid. Ayroso's legal personality to file the complaint was sustained on the ratiocination that under the Labor Code no
petition questioning the majority status of the incumbent bargaining agent shall be entertained outside of the sixty (60)-day period
immediately before the expiry date of such five (5)-year term of the collective bargaining agreement that the parties may enter into.
Accordingly, judgment was rendered ordering PSI, PSEA-PAFLU and their officers to pay PAFLU P150,000.00 in damages. 10

PSI, PSEA and their respective officers appealed to the National Labor Relations Commission (NLRC). But the NLRC upheld the
Decision of the Labor Arbiter and conjectured that since an election protest questioning PSEA-PAFLU's certification as the sole and
exclusive bargaining agent was pending resolution before the Secretary of Labor, PSEA could not validly separate from PAFLU, join
another national federation and subsequently enter into a collective bargaining agreement with its employer-company. 11

Petitioners separately moved for reconsideration but both motions were denied. Hence, these petitions for certiorari filed by PSI and
PSEA-NCW together with their respective officers pleading for a reversal of the NLRC's Decision which they claimed to have been
rendered in excess of jurisdiction. In due time, both petitions were consolidated.

In these petitions, petitioner PSEA together with its officers argued that by virtue of their disaffiliation PAFLU as a mere agent had no
authority to represent them before any proceedings. They further asserted that being an independent labor union PSEA may freely
serve the interest of all its members and readily disaffiliate from its mother federation when circumstances so warrant. This right,
they averred, was consistent with the constitutional guarantee of freedom of association. 12

For their part, petitioners PSI, Romulo and Dakila alleged that their decision to bargain collectively with PSEA-NCW was actuated, to
a large extent, by PAFLU's behavior. Having heard no objections or protestations from PAFLU relative to PSEA's disaffiliation, they
reckoned that PSEA's subsequent association with NSW was done bona fide. 13

The Solicitor General filed a Manifestation in Lieu of Comment recommending that both petitions be granted. In his Manifestation, the
Solicitor General argued against the Labor Arbiter's assumption of jurisdiction citing the following as reasons: first, there was no
employer-employee relationship between complainant Ayroso and PSI over which the Labor Arbiter could rightfully assert his
jurisdiction; second, since the case involved a dispute between PAFLU as mother federation and PSEA as local union, the controversy
fell within the jurisdiction of the Bureau of Labor Relations; and lastly, the relationship of principal-agent between PAFLU and PSEA
had been severed by the local union through the lawful exercise of its right of disaffiliation. 14

Stripped of non-essentials, the fundamental issue tapers down to the legitimacy of PSEA's disaffiliation. To be more precise, may
PSEA, which is an independent and separate local union, validly disaffiliate from PAFLU pending the settlement of an election protest
questioning its status as the sole and exclusive bargaining agent of PSI's rank and file employees? DHacTC

At the outset, let it be noted that the issue of disaffiliation is an inter-union conflict the jurisdiction of which properly lies with the
Bureau of Labor Relations (BLR) and not with the Labor Arbiter. 15 Nonetheless, with due recognition of this fact, we deem it proper
to settle the controversy at this instance since to remand the case to the BLR would only mean intolerable delay for the parties.

The right of a local union to disaffiliate from its mother federation is not a novel thesis unillumined by case law. In the landmark case
of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc. 16 we upheld the right of local unions to separate from their
mother federation on the ground that as separate and voluntary associations, local unions do not owe their creation and existence to
the national federation to which they are affiliated but, instead, to the will of their members. The sole essence of affiliation is to
increase, by collective action, the common bargaining power of local unions for the effective enhancement and protection of their
interests. Admittedly, there are times when without succor and support local unions may find it hard, unaided by other support
groups, to secure justice for themselves.

Yet the local unions remain the basic units of association, free to serve their own interests subject to the restraints imposed by the
constitution and by-laws of the national federation, and free also to renounce the affiliation upon the terms laid down in the
agreement which brought such affiliation into existence.

Such dictum has been punctiliously followed since then. 17

Upon an application of the aforecited principle to the issue at hand, the impropriety of the questioned Decisions becomes clearly
apparent. There is nothing shown in the records nor is it claimed by PAFLU that the local union was expressly forbidden to disaffiliate
from the federation nor were there any conditions imposed for a valid breakaway. As such, the pendency of an election protest
involving both the mother federation and the local union did not constitute a bar to a valid disaffiliation. Neither was it disputed by
PAFLU that 111 signatories out of the 120 members of the local union, or an equivalent of 92.5% of the total union membership
supported the claim of disaffiliation and had in fact disauthorized PAFLU from instituting any complaint in their behalf. Surely, this is
not a case where one (1) or two (2) members of the local union decided to disaffiliate from the mother federation, but it is a case
where almost all local union members decided to disaffiliate.

It was entirely reasonable then for PSI to enter into a collective bargaining agreement with PSEA-NCW. As PSEA had validly severed
itself from PAFLU, there would be no restrictions which could validly hinder it from subsequently affiliating with NCW and entering
into a collective bargaining agreement in behalf of its members.

There is a further consideration that likewise argues for the granting of the petitions. It stands unchallenged that PAFLU instituted
the complaint for unfair labor practice against the wishes of workers whose interests it was supposedly protecting. The mere act of
disaffiliation did not divest PSEA of its own personality; neither did it give PAFLU the license to act independently of the local union.
Recreant to its mission, PAFLU cannot simply ignore the demands of the local chapter and decide for its welfare. PAFLU might have
forgotten that as an agent it could only act in representation of and in accordance with the interests of the local union. The complaint
then for unfair labor practice lodged by PAFLU against PSI, PSEA and their respective officers, having been filed by a party which has
no legal personality to institute the complaint, should have been dismissed at the first instance for failure to state a cause of action.
Policy considerations dictate that in weighing the claims of a local union as against those of a national federation, those of the former
must be preferred. Parenthetically though, the desires of the mother federation to protect its locals are not altogether to be shunned.
It will however be to err greatly against the Constitution if the desires of the federation would be favored over those of its members.
That, at any rate, is the policy of the law. For if it were otherwise, instead of protection, there would be disregard and neglect of the
lowly workingmen.

WHEREFORE, the petitions of Philippine Skylanders, Inc. and of Philippine Skylanders and Workers Association-NCW, together with
their respective officers, are GRANTED. The Decision of the National Labor Relations Commission of 31 July 1996 affirming the
Decision of the Labor Arbiter of 30 June 1995 holding petitioners Philippine Skylanders and Workers Association-NCW, Philippine
Skylanders, Inc. and their respective officers, guilty of unfair labor practice and ordering them to pay damages to private respondent
Philippine Association of Free Labor Unions (PAFLU) September (now UNIFIED PAFLU) as well as the Resolution of 31 October 1996
denying reconsideration is REVERSED and SET ASIDE. No costs.

SO ORDERED.

Mendoza, Quisumbing, Buena and De Leon, Jr., JJ., concur.

||| (Philippine Skylanders, Inc. v. National Labor Relations Commission, G.R. No. 127374, 127431, [January 31, 2002], 426 PHIL 35-
45)

33. FIRST DIVISION

[G.R. No. L-41955. December 29, 1977.]

ELISCO-ELIROL LABOR UNION (NAFLU) and its OFFICERS AND MEMBERS OF THE BOARD OF
DIRECTORS, petitioners, vs. CARMELO NORIEL, in his capacity as Director of the Bureau of Labor
Relations, ELIZALDE STEEL CONSOLIDATED, INC. and NATIONAL FEDERATION OF LABOR UNIONS
(NAFLU), respondents.

Villaluz, Villaluz & Villaluz, Padilla Law Offices and Rizalindo V. Diaz for petitioners.

Acting Solicitor General Hugo E. Gutierrez, Jr., Assistant Solicitor Reynato S. Puno and Solicitor Ramon A.
Barcelona respondent Director.

Rolando M. Olalia for respondent Union (NAFLU).

DECISION

TEEHANKEE, J p:

The Court sets aside respondent director's appealed resolution and rules in accordance with the prevailing law and settled
jurisprudence that the petitioner union consisting of the members employees of respondent corporation is the principal party to the
collective bargaining agreement (rather than the respondent mother union which is merely its agent) and is therefore entitled to be
recognized as the sole and exclusive bargaining representative entitled to administer and enforce the collective bargaining
agreement with the employer corporation.

The undisputed antecedent facts which gave rise to the present petition are stated in the petition as follows:

"2. That sometime on February 1974, petitioner-Elisco Elirol Labor Union (NAFLU), negotiated and executed a
collective bargaining agreement with respondent-Elizalde Steel Consolidated, Inc. 1

"3. That upon verification by individual petitioners at the Registration division, Bureau of Labor Relations,
Department of Labor, the Elisco-Elirol Labor Union (NAFLU), the contracting party in said collective bargaining
agreement, was not then registered and therefore not entitled to the benefits and privileges embodied in said
collective bargaining agreement; thus on March 3, 1975, the members of petitioner-appellant union in a general
membership meeting decided in a resolution to register their union to protect and preserve the integrity and
inviolability of the collective bargaining agreement between the Elisco-Elirol Labor Union (NAFLU) and the
Elizalde Steel Consolidated, Inc.

"4. That said resolution of the members of petitioner-appellant union was passed upon by the officers and
members of the Board of Directors on May 20, 1975, at a special meeting called for the purpose, resolution No.
6, s. 1975 was approved requesting the Acting Directors, Registration Division, Bureau of Labor Relations, to
register the union Elisco-Elirol Labor Union (NAFLU).

"5. That by virtue of resolution No. 6, Petitioner-appellant union applied for registration with the Bureau of Labor
Relations, hence on May 28, 1975, Certificate of Registration No. 8511-IP was issued by said Office.

"6. That with the issuance of the certificate of registration petitioner-appellant acquired a personality separate
and distinct from any other labor union.

"7. That steps were taken by petitioner-appellant to enforce the collective bargaining agreement as the principal
party to the same representing the workers covered by such agreement immediately after the issuance of the
certificate of registration.

"8. That on June 10, 1975, at a special meeting called for the purpose, the general membership of petitioner
union decided that their mother union, the National Federation of Labor Unions, can no longer safeguard the
rights of its members insofar as working conditions and other terms of employment are concerned and that the
interest and welfare of petitioner can be served best if it will stay independent and disaffiliated from said mother
 union, hence, the general membership adopted a resolution to disaffiliate from the National Federation of Labor
Unions.

"9. That on June 11, 1975, petitioner, acting through its President Hilario Riza informed respondents of said
disaffiliation by means of a letter, and subsequently requested respondents to recognize petitioner as the sole
and exclusive bargaining representative of the employees thereof.

"10. That respondent without any justifiable reason refused and continues to refuse to recognize petitioner as the
sole and exclusive bargaining representative of its employees, and, now actually dismissed the petitioner union's
officers and board members. 2 In this connection, a complaint for unfair labor practice was filed by petitioners
against respondent for the latter's refusal to bargain collectively with petitioner, which complaint is presently
docketed as Case No. LR-R04-6-1662.

"11. That by virtue of said refusal of respondent company to recognize petitioner as the sole and exclusive
bargaining representative of the employees, petitioners filed a petition before the Bureau of Labor Relations,
Department of Labor on July 2, 1975, with Case No. LR-861 against respondent Elizalde Steel Consolidated, Inc.
and the National Federation of Labor Unions be ordered to stop from presenting itself as the collective bargaining
agent and pursuant thereto, a writ of preliminary mandatory and prohibitory injunction be issued.

"12. That on August 19, 1975. the Bureau of Labor Relations, through Med-Arbiter Reynaldo B. Carta, before
whom the case was heard, issued an Order dismissing the petition for lack of merit."

On appeal to respondent Director of the Bureau of Labor Relations, said respondent issued his Resolution of October 30, 1975
affirming the dismissal of petitioner-union's petition as follows:

"On February, 1974 the members of the petitioner union who were then yet affiliated with the National
Association of Free Labor Union negotiated and executed with the respondent company a collective bargaining
agreement with expiry date in November, 1976.

"On May 28, 1975, after the same members, by valid resolution of the Board of directors and approved by the
general membership, have formed themselves into anindependent organization and applied for registration as a
union, a certificate of registration was issued by the Department of Labor. And on June 10, 1975 again by
avalid resolution the same members disaffiliated with the NAFLU.

"The issue for resolution is —

"Which of the two unions should be recognized as the sole and exclusive bargaining representative of the
employees and ultimately recognized to administer and supervise the enforcement of the collective bargaining
agreement.

"Petitioner-union contends that it having the necessary interest and being the real party must be the sole union
to be recognized and given authority to bargain with the company.

"Setting aside jurisprudence and the collective bargaining agreement of the parties, the appellant is correct. For
to grant to the former mother union (NAFLU) the authority to administer and enforce their collective bargaining
agreement without presumably any members in the bargaining unit is quite absurd. But to transfer also the
authority to the newly formed union although the members of the same were the same members who composed
then the local chapter of the mother union is also in violation of the CBA particularly article IV which is the union
security clause, wherein it is a condition for a continued employment in the company to maintain membership in
the Union. Theoretically therefore, when the employees disaffiliated from the mother union and formed
themselves into a new union, their status as employees was also terminated. As such they could not therefore
absolutely and legally claim that they still comprise the majority of the bargaining unit.

"Secondly, to vest, upon the new union the authority to bargain is in violation of the whole CBA, under the
theory that when the mother union (NAFLU) entered and executed the same in its separate and distinct
personality aside from the people composing the same. In fine, the CBA then was executed by and between the
company and the (NAFLU) with the latter as an entity having its own capacity and personality different from the
members composing the same.

"Lastly, to preserve and avoid unstability and disorder in the labor movement as correctly ruled by the med-
arbiter, the status quo should be preserved, there being no compelling reason to alter the same." 3

Hence, the petition at bar. We find the petition to be clearly meritorious and reverse the appealed resolution. LexLib

I. Respondent director correctly perceived in his Resolution that "to grant to the former mother union (NAFLU) the authority to
administer and enforce their collective bargaining agreement without presumably any members in the bargaining unit is quite
absurd" but fell unto the grave error of holding that "when the employees disaffiliated from the mother union and formed themselves
into a new union, their status as employees was also terminated."

His error was in not perceiving that the employees and members of the local union did not form a new union but merely registered
the local union as was their right. Petitioner Elisco-Elirol Labor Union-NAFLU, consisting of employees and members of the local union
was the principal party to the agreement. NAFLU as the mother union" in participating in the execution of the bargaining agreement
with respondent company acted merely as agent of the local union, which remained the basic unit of the association existing
principally and freely to serve the common interest of all its members, including the freedom to disaffiliate when the circumstances
so warranted as in the present case.

2. Contrary to respondent director's misimpression, our jurisprudence fully supports petitioner's stand. In Liberty Cotton Mills
Workers Union vs. Liberty Cotton Mills, Inc. 4 , the Court expressly cited and affirmed the basic principle that "(T)he locals are
separate and distinct units primarily designed to secure and maintain an equality of bargaining power between the employer and
their employee-members in the economic struggle for the fruits of the joint productive effort of labor and capital; and the association
of the locals into the national union (as PAFLU) was in furtherance of the same end. These associations are consensual entities
capable of entering into such legal relations with their members. The essential purpose was the affiliation of the local unions into a
common enterprise to increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet
the locals remained the basic units of association, free to serve their own and the common interest of all, subject to the restraints
imposed by the Constitution and By-Laws of the Association, and free also to renounce the affiliation for mutual welfare upon the
terms laid down in the agreement which brought it into existence."

Corollarily, the "substitutionary" doctrine likewise fully supports petitioner's stand. Petitioner union to whom the employees owe their
allegiance has from the beginning expressly avowed that it "does not intend to change and/or amend the provisions of the present
collective bargaining agreement but only to be given the chance to enforce the same since there is a shift of allegiance in the
majority of the employees at respondent company." As was stressed by the Court in Benguet Consolidated Inc. vs. BCI Employees &
Workers Union-PAFLU 5 —

". . . This principle, formulated by the NLRB as its initial compromise solution to the problem facing it when there
occurs a shift in employees' union allegiance after the execution of a bargaining contract with their employer,
merely states that even during the effectivity of a collective bargaining agreement executed between employer
and employees thru their agent, the employees can change said agent but the contract continues to bind them
up to its expiration date. They may bargain however for the shortening of said expiration date.

"In formulating the 'substitutionary' doctrine, the only consideration involved as the employees' interestin the
existing bargaining agreement. The agent's interest never entered the picture. In fact, the justification for said
doctrine was:

'. . . that the majority of the employees, as an entity under the statute, is the true party in
interest to the contract, holding rights through the agency of the union representative. Thus, any
exclusive interest claimed by the agent is defeasible at the will of the principal.'"

3. It need only be mentioned finally that the Secretary of Labor in his decision of April 23, 1976 and order of January 10, 1977
denying reconsideration in the sister unfair labor practice case and ordering respondent corporation to immediately lift the
suspension and reinstate the complainant officers and board members of petitioner union 6 has likewise adhered to the foregoing
basic principles and settled jurisprudence in contrast to respondent director (as well as therein respondent NLRC which similarly
adhered to the archaic and illogical view that the officers and board members of petitioner local union committed an "act of
disloyalty" in disaffiliating from the mother union when practically all its members had so voted to disaffiliate and the mother union
[as mere agent] no longer had any local union or members to represent), ruling that (G)ranting arguendo that the disaffiliation from
the NAFLU is a legal cause for expulsion and dismissal, it could not detract from the fact that only 13 individual complainants out of
almost 700 members who disaffiliated, were singled out for expulsion and recommended for dismissal. The actuation of NAFLU
conclusively constitute discrimination. Since the suspension of the complainants was effected at the instance of NAFLU, it should be
held liable to the payment of back wages."

The Presidential Assistant for Legal Affairs Ronaldo B. Zamora has likewise dismissed as untenable in a similar case respondents'
views that "such maintenance of membership" clause be distorted as intended for the security of the union rather than the security
of tenure for the workers", ruling that "(W)hat is paramount, as it is expressly and explicitly emphasized in an exacting language
under the New Constitution, is the security of tenure of the workers, not the security of the union. To impress, therefore, such
'maintenance of membership' — which is intended for the security of the union rather than the security of tenure of the workers — as
a bar to employees' changing their affiliation is not only to infringe on the constitutional right of freedom of association, but also to
trample upon the constitutional right of workers to security of tenure and to render meaningless whatever 'adequate social services'
the State may establish or maintain in the field of employment 'to guarantee the enjoyment by the people of a decent standard of
living.'" 7

It is expected that with this decision, any suspension or lay-off of the complainants officers and board members or employees of
petitioner union arising from the respondents' misconception of the clearly applicable principles and jurisprudence upholding the
primacy of the employees and their freely chosen local union as the true party in interest to the collective bargaining agreement will
be forthwith rectified and set aside. cdrep

ACCORDINGLY, the petition is granted and the appealed resolution is set aside and petitioner local union is declared to be the sole
and exclusive bargaining representative of the employees of respondent corporation entitled to administer and enforce any subsisting
collective bargaining agreement with said employer corporation. This decision shall be immediately executory upon its promulgation.

Makasiar, Muñoz Palma, Fernandez and Guerrero, JJ., concur.

Martin, J., took no part.

||| (Elisco-Elirol Labor Union v. Noriel, G.R. No. L-41955, [December 29, 1977], 170 PHIL 702-710)

34. THIRD DIVISION

[G.R. No. 113856. September 7, 1998.]

SAMAHANG MANGGAGAWA SA TOP FORM MANUFACTURING — UNITED WORKERS OF THE

PHILIPPINES (SMTFM-UWP), its officers and members,petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, HON. JOSE G. DE VERA and TOP FORM MANUFACTURING PHIL., INC., respondents.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR RELATIONS; COLLECTIVE BARGAINING AGREEMENT; WHERE A
PROPOSAL RAISED BY A CONTRACTING PARTY DOES NOT FIND PRINT IN THE COLLECTIVE BARGAINING AGREEMENT, IT IS NOT A
PART THEREOF AND THE PROPONENT HAS NO CLAIM WHATSOEVER TO ITS IMPLEMENTATION; CASE AT BAR. — The CBA is the law
between the contracting parties — the collective bargaining representative and the employer-company. Compliance with a CBA is
mandated by the expressed policy to give protection to labor. In the same vein, CBA provisions should be "construed liberally rather
than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the
context in which it is negotiated and purpose which it is intended to serve." This is founded on the dictum that a CBA is not an
ordinary contract but one impressed with public interest. It goes without saying, however, that only provisions embodied in the CBA
should be so interpreted and complied with. Where a proposal raised by a contracting party does not find print in the CBA, it is not a
part thereof and the proponent has no claim whatsoever to its implementation.

2. ID.; ID.; ID.; ID.; EXECUTION OF COLLECTIVE BARGAINING AGREEMENT IS PROOF OF GOOD FAITH BARGAINING; CASE AT BAR.
— With the execution of the CBA, bad faith bargaining can no longer be imputed upon any of the parties thereto. All provisions in the
CBA are supposed to have been jointly and voluntarily incorporated therein by the parties. This is not a case where private
respondent exhibited an indifferent attitude towards collective bargaining because the negotiations were not the unilateral activity of
petitioner union. The CBA is proof enough that private respondent exerted "reasonable effort at good faith bargaining."

3. ID.; ID.; ID.; WAGE DISTORTION; IS A QUESTION OF FACT THAT IS WITHIN THE JURISDICTION OF THE QUASI-JUDICIAL
TRIBUNALS; CASE AT BAR. — The issue of whether or not a wage distortion exists is a question of fact that is within the jurisdiction
of the quasi-judicial tribunals below. Factual findings of administrative agencies are accorded respect and even finality in this Court if
they are supported by substantial evidence. Thus, in Metropolitan Bank and Trust Company, Inc. v. NLRC, the Court said: "The issue
of whether or not a wage distortion exists as a consequence of the grant of a wage increase to certain employees, we agree, is, by
and large, a question of fact the determination of which is the statutory function of the NLRC. Judicial review of labor cases, we may
add, does not go beyond the evaluation of the sufficiency of the evidence upon which the labor officials' findings rest. As such, the
factual findings of the NLRC are generally accorded not only respect but also finality provided that its decisions are supported by
substantial evidence and devoid of any taint of unfairness or arbitrariness. When, however, the members of the same labor tribunal
are not in accord on those aspects of a case, as in this case, this Court is well cautioned not to be as so conscious in passing upon
the sufficiency of the evidence, let alone the conclusions derived therefrom. Unlike in above-cited case where the Decision of the
NLRC was not unanimous, the NLRC Decision in this case which was penned by the dissenter in that case, Presiding Commissioner
Edna Bonto-Perez, unanimously ruled that no wage distortions marred private respondent's implementation of the wage
orders. TADaCH

DECISION

ROMERO, J p:

The issue in this petition for certiorari is whether or not an employer committed an unfair labor practice by bargaining in bad faith
and discriminating against its employees. The charge arose from the employer's refusal to grant across-the-board increases to its
employees in implementing Wage Orders Nos. 01 and 02 of the Regional Tripartite Wages and Productivity Board of the National
Capital Region (RTWPB-NCR). Such refusal was aggravated by the fact that prior to the issuance of said wage orders, the employer
allegedly promised at the collective bargaining conferences to implement any government-mandated wage increases on an across-
the-board basis. prLL

Petitioner Samahang Manggagawa sa Top Form Manufacturing — United Workers of the Philippines (SMTFM) was the certified
collective bargaining representative of all regular rank and file employees of private respondent Top Form Manufacturing Philippines,
Inc. At the collective bargaining negotiation held at the Milky Way Restaurant in Makati, Metro Manila on February 27, 1990, the
parties agreed to discuss unresolved economic issues. According to the minutes of the meeting, Article VII of the collective
bargaining agreement was discussed. The following appear in said Minutes:

"ARTICLE VII. Wages

Section 1. Defer —

Section 2. Status quo

Section 3. Union proposed that any future wage increase given by the government should be implemented by
the company across-the-board or non-conditional.

Management requested the union to retain this provision since their sincerity was already proven when the
P25.00 wage increase was granted across-the-board. The union acknowledges management's sincerity but they
are worried that in case there is a new set of management, they can just show their CBA. The union decided to
defer this provision." 1

In their joint affidavit dated January 30, 1992, 2 union members Salve L. Barnes, Eulisa Mendoza, Lourdes Barbero and Concesa
Ibañez affirmed that at the subsequent collective bargaining negotiations, the union insisted on the incorporation in the collective
bargaining agreement (CBA) of the union proposal on "automatic across-the-board wage increase." They added that:

"11. On the strength of the representation of the negotiating panel of the company and the above
undertaking/promise made by its negotiating panel, our union agreed to drop said proposal relying on the
undertakings made by the officials of the company who negotiated with us, namely, Mr. William Reynolds, Mr.
Samuel Wong and Mrs. Remedios Felizardo. Also, in the past years, the company has granted to us government
mandated wage increases on across-the-board basis." LexLib

On October 15, 1990, the RTWPB-NCR issued Wage Order No. 01 granting an increase of P17.00 per day in the salary of workers.
This was followed by Wage Order No. 02 dated December 20, 1990 providing for a P12.00 daily increase in salary.

As expected, the union requested the implementation of said wage orders. However, they demanded that the increase be on an
across-the-board basis. Private respondent refused to accede to that demand. Instead, it implemented a scheme of increases
purportedly to avoid wage distortion. Thus, private respondent granted the P17.00 increase under Wage Order No. 01 to
workers/employees receiving salary of P125.00 per day and below. The P12.00 increase mandated by Wage Order No. 02 was
granted to those receiving the salary of P140.00 per day and below. For employees receiving salary higher than P125.00 or P140.00
per day, private respondent granted an escalated increase ranging from P6.99 to P14.30 and from P6.00 to P10.00, respectively. 3

On October 24, 1991, the union, through its legal counsel, wrote private respondent a letter demanding that it should "fulfill its
pledge of sincerity to the union by granting an across-the-board wage increases (sic) to all employees under the wage orders." The
union reiterated that it had agreed to "retain the old provision of CBA" on the strength of private respondent's "promise and
assurance" of an across-the-board salary increase should the government mandate salary increases. 4 Several conferences between
the parties notwithstanding, private respondent adamantly maintained its position on the salary increases it had granted that were
purportedly designed to avoid wage distortion.

Consequently, the union filed a complaint with the NCR NLRC alleging that private respondent's act of "reneging on its
undertaking/promise clearly constitutes an act of unfair labor practice through bargaining in bad faith." It charged private respondent
with acts of unfair labor practices or violation of Article 247 of the Labor Code, as amended, specifically "bargaining in bad faith," and
prayed that it be awarded actual, moral and exemplary damages. 5 In its position paper, the union added that it was charging
private respondent with "violation of Article 100 of the Labor Code." 6

Private respondent, on the other hand, contended that in implementing Wage Orders Nos. 01 and 02, it had avoided "the existence
of a wage distortion" that would arise from such implementation. It emphasized that only "after a reasonable length of time from the
implementation" of the wage orders "that the union surprisingly raised the question that the company should have implemented said
wage orders on an across-the-board basis." It asserted that there was no agreement to the effect that future wage increases
mandated by the government should be implemented on an across-the-board basis. Otherwise, that agreement would have been
incorporated and expressly stipulated in the CBA. It quoted the provision of the CBA that reflects the parties' intention to "fully set
forth" therein all their agreements that had been arrived at after negotiations that gave the parties "unlimited right and opportunity
to make demands and proposals with respect to any subject or matter not removed by law from the area of collective bargaining."
The same CBA provided that during its effectivity, the parties "each voluntarily and unqualifiedly waives the right, and each agrees
that the other shall not be obligated, to bargain collectively, with respect to any subject or matter not specifically referred to or
covered by this Agreement, even though such subject or matter may not have been within the knowledge or contemplation of either
or both of the parties at the time they negotiated or signed this Agreement." 7

On March 11, 1992, Labor Arbiter Jose G. de Vera rendered a decision dismissing the complaint for lack of merit. 8 He considered
two main issues in the case: (a) whether or not respondents are guilty of unfair labor practice, and (b) whether or not the
respondents are liable to implement Wage Orders Nos. 01 and 02 on an across-the-board basis. Finding no basis to rule in the
affirmative on both issues, he explained as follows:

"The charge of bargaining in bad faith that the complainant union attributes to the respondents is bereft of any
certitude inasmuch as based on the complainant union's own admission, the latter vacillated on its own proposal
to adopt an across-the-board stand or future wage increases. In fact, the union acknowledges the management's
sincerity when the latter allegedly implemented Republic Act 6727 on an across-the-board basis. That such union
proposal was not adopted in the existing CBA was due to the fact that it was the union itself which decided for its
deferment. It is, therefore, misleading to claim that the management undertook/promised to implement future
wage increases on an across-the-board basis when as the evidence shows it was the union who asked for the
deferment of its own proposal to that effect. cdtai

The alleged discrimination in the implementation of the subject wage orders does not inspire belief at all where
the wage orders themselves do not allow the grant of wage increases on an across-the-board basis. That there
were employees who were granted the full extent of the increase authorized and some others who received less
and still others who did not receive any increase at all, would not ripen into what the complainants termed as
discrimination. That the implementation of the subject wage orders resulted into an uneven implementation of
wage increases is justified under the law to prevent any wage distortion. What the respondents did under the
circumstances in order to deter an eventual wage distortion without any arbitral proceedings is certainly
commendable.

The alleged violation of Article 100 of the Labor Code, as amended, as well as Article XVII, Section 7 of the
existing CBA as herein earlier quoted is likewise found by this Branch to have no basis in fact and in law. No
benefits or privileges previously enjoyed by the employees were withdrawn as a result of the implementation of
the subject order. Likewise, the alleged company practice of implementing wage increases declared by the
government on an across-the-board basis has not been duly established by the complainants' evidence. The
complainants asserted that the company implemented Republic Act No. 6727 which granted a wage increase of
P25.00 effective July 1, 1989 on an across-the-board basis. Granting that the same is true, such isolated single
act that respondents adopted would definitely not ripen into a company practice. It has been said that 'a sparrow
or two returning to Capistrano does not a summer make.'

Finally, on the second issue of whether or not the employees of the respondents are entitled to an across-the-
board wage increase pursuant to Wage Orders Nos. 01 and 02, in the face of the above discussion as well as our
finding that the respondents correctly applied the law on wage increases, this Branch rules in the negative. prLL

Likewise, for want of factual basis and under the circumstances where our findings above are adverse to the
complainants, their prayer for moral and exemplary damages and attorney's fees may not be granted."

Not satisfied, petitioner appealed to the NLRC that, in turn, promulgated the assailed Resolution of April 29, 1993 9 dismissing the
appeal for lack of merit. Still dissatisfied, petitioner sought reconsideration which, however, was denied by the NLRC in the
Resolution dated January 17, 1994. Hence, the instant petition for certiorari contending that:

-A-

THE PUBLIC RESPONDENTS GROSSLY ERRED IN NOT DECLARING THE PRIVATE RESPONDENTS GUILTY OF ACTS
OF UNFAIR LABOR PRACTICES WHEN, OBVIOUSLY, THE LATTER HAS BARGAINED IN BAD FAITH WITH THE
UNION AND HAS VIOLATED THE CBA WHICH IT EXECUTED WITH THE HEREIN PETITIONER UNION.

-B-

THE PUBLIC RESPONDENTS SERIOUSLY ERRED IN NOT DECLARING THE PRIVATE RESPONDENTS GUILTY OF
ACTS OF DISCRIMINATION IN THE IMPLEMENTATION OF NCR WAGE ORDER NOS. 01 AND 02.

-C-

THE PUBLIC RESPONDENTS SERIOUSLY ERRED IN NOT FINDING THE PRIVATE RESPONDENTS GUILTY OF
HAVING VIOLATED SECTION 4, ARTICLE XVII OF THE EXISTING CBA.

-D-

THE PUBLIC RESPONDENTS GRAVELY ERRED IN NOT DECLARING THE PRIVATE RESPONDENTS GUILTY OF
HAVING VIOLATED ARTICLE 100 OF THE LABOR CODE OF THE PHILIPPINES, AS AMENDED.

-E-

ASSUMING, WITHOUT ADMITTING THAT THE PUBLIC RESPONDENTS HAVE CORRECTLY RULED THAT THE
PRIVATE RESPONDENTS ARE GUILTY OF ACTS OF UNFAIR LABOR PRACTICES, THEY COMMITTED SERIOUS
ERROR IN NOT FINDING THAT THERE IS A SIGNIFICANT DISTORTION IN THE WAGE STRUCTURE OF THE
RESPONDENT COMPANY.

-F-

THE PUBLIC RESPONDENTS ERRED IN NOT AWARDING TO THE PETITIONERS HEREIN ACTUAL, MORAL, AND
EXEMPLARY DAMAGES AND ATTORNEY'S FEES. LibLex

As the Court sees it, the pivotal issues in this petition can be reduced into two, to wit: (a) whether or not private respondent
committed an unfair labor practice in its refusal to grant across-the-board wage increases in implementing Wage Orders Nos. 01 and
02, and (b) whether or not there was a significant wage distortion of the wage structure in private respondent as a result of the
manner by which said wage orders were implemented.

With respect to the first issue, petitioner union anchors its arguments on the alleged commitment of private respondent to grant an
automatic across-the-board wage increase in the event that a statutory or legislated wage increase is promulgated. It cites as basis
therefor, the aforequoted portion of the Minutes of the collective bargaining negotiation on February 27, 1990 regarding wages,
arguing additionally that said Minutes forms part of the entire agreement between the parties.

The basic premise of this argument is definitely untenable. To start with, if there was indeed a promise or undertaking on the part of
private respondent to obligate itself to grant an automatic across-the-board wage increase, petitioner union should have requested
or demanded that such "promise or undertaking" be incorporated in the CBA. After all, petitioner union has the means under the law
to compel private respondent to incorporate this specific economic proposal in the CBA. It could have invoked Article 252 of the
Labor Code defining "duty to bargain," thus, the duty includes "executing a contract incorporating such agreements if requested by
either party." Petitioner union's assertion that it had insisted on the incorporation of the same proposal may have a factual basis
considering the allegations in the aforementioned joint affidavit of its members. However, Article 252 also states that the duty to
bargain "does not compel any party to agree to a proposal or make any concession." Thus, petitioner union may not validly claim
that the proposal embodied in the Minutes of the negotiation forms part of the CBA that it finally entered into with private
respondent.

The CBA is the law between the contracting parties 10 — the collective bargaining representative and the employer-company.
Compliance with a CBA is mandated by the expressed policy to give protection to labor. 11 In the same vein, CBA provisions should
be "construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it,
giving due consideration to the context in which it is negotiated and purpose which it is intended to serve." 12 This is founded on the
dictum that a CBA is not an ordinary contract but one impressed with public interest. 13 It goes without saying, however, that only
provisions embodied in the CBA should be so interpreted and complied with. Where a proposal raised by a contracting party does not
find print in the CBA, 14 it is not a part thereof and the proponent has no claim whatsoever to its implementation.

Hence, petitioner union's contention that the Minutes of the collective bargaining negotiation meeting forms part of the entire
agreement is pointless. The Minutes reflects the proceedings and discussions undertaken in the process of bargaining for worker
benefits in the same way that the minutes of court proceedings show what transpired therein. 15 At the negotiations, it is but
natural for both management and labor to adopt positions or make demands and offer proposals and counter-proposals. However,
nothing is considered final until the parties have reached an agreement. In fact, one of management's usual negotiation strategies is
to ". . . agree tentatively as you go along with the understanding that nothing is binding until the entire agreement is reached." 16 If
indeed private respondent promised to continue with the practice of granting across-the-board salary increases ordered by the
government, such promise could only be demandable in law if incorporated in the CBA. LLjur

Moreover, by making such promise, private respondent may not be considered in bad faith or at the very least, resorting to the
scheme of feigning to undertake the negotiation proceedings through empty promises. As earlier stated, petitioner union had, under
the law, the right and the opportunity to insist on the foreseeablefulfillment of the private respondent's promise by demanding its
incorporation in the CBA. Because the proposal was never embodied in the CBA, the promise has remained just that, a promise, the
implementation of which cannot be validly demanded under the law.

Petitioner's reliance on this Court's pronouncements 17 in Kiok Loy v. NLRC 18 is, therefore, misplaced. In that case, the employer
refused to bargain with the collective bargaining representative, ignoring all notices for negotiations and requests for counter
proposals that the union had to resort to conciliation proceedings. In that case, the Court opined that "(a) Company's refusal to
make counter-proposal, if considered in relation to the entire bargaining process, may indicate bad faith and this is specially true
where the Union's request for a counter-proposal is left unanswered." Considering the facts of that case, the Court concluded that
the company was "unwilling to negotiate and reach an agreement with the Union." 19

In the case at bench, however, petitioner union does not deny that discussion on its proposal that all government-mandated salary
increases should be on an across-the-board basis was "deferred," purportedly because it relied upon the "undertaking" of the
negotiating panel of private respondent. 20 Neither does petitioner union deny the fact that "there is no provision of the 1990 CBA
containing a stipulation that the company will grant across-the-board to its employees the mandated wage increase." They simply
assert that private respondent committed "acts of unfair labor practices by virtue of its contractual commitment made during the
collective bargaining process." 21 The mere fact, however, that the proposal in question was not included in the CBA indicates that
no contractual commitment thereon was ever made by private respondent as no agreement had been arrived at by the parties.
Thus:

"Obviously the purpose of collective bargaining is the reaching of an agreement resulting in a contract binding on
the parties; but the failure to reach an agreement after negotiations continued for a reasonable period does not
establish a lack of good faith. The statutes invite and contemplate a collective bargaining contract, but they do
not compel one. The duty to bargain does not include the obligation to reach an agreement. . . ." 22

With the execution of the CBA, bad faith bargaining can no longer be imputed upon any of the parties thereto. All provisions in the
CBA are supposed to have been jointly and voluntarily incorporated therein by the parties. This is not a case where private
respondent exhibited an indifferent attitude towards collective bargaining because the negotiations were not the unilateral activity of
petitioner union. The CBA is proof enough that private respondent exerted "reasonable effort at good faith bargaining." 23

Indeed, the adamant insistence on a bargaining position to the point where the negotiations reach an impasse does not establish bad
faith. Neither can bad faith be inferred from a party's insistence on the inclusion of a particular substantive provision unless it
concerns trivial matters or is obviously intolerable. 24

"The question as to what are mandatory and what are merely permissive subjects of collective bargaining is of
significance on the right of a party to insist on his position to the point of stalemate. A party may refuse to enter
into a collective bargaining contract unless it includes a desired provision as to a matter which is a mandatory
subject of collective bargaining; but a refusal to contract unless the agreement covers a matter which is not a
mandatory subject is in substance a refusal to bargain about matters which are mandatory subjects of collective
bargaining; and it is no answer to the charge of refusal to bargain in good faith that the insistence on the
disputed clause was not the sole cause of the failure to agree or that agreement was not reached with respect to
other disputed clauses." 25

On account of the importance of the economic issue proposed by petitioner union, it could have refused to bargain and to enter into
a CBA with private respondent. On the other hand, private respondent's firm stand against the proposal did not mean that it was
bargaining in bad faith. It had the right "to insist on (its) position to the point of stalemate." On the part of petitioner union, the
importance of its proposal dawned on it only after the wage orders were issued after the CBA had been entered into. Indeed, from
the facts of this case, the charge of bad faith bargaining on the part of private respondent was nothing but a belated reaction to the
implementation of the wage orders that private respondent made in accordance with law. In other words, petitioner union harbored
the notion that its members and the other employees could have had a better deal in terms of wage increases had it relentlessly
pursued the incorporation in the CBA of its proposal. The inevitable conclusion is that private respondent did not commit the unfair
labor practices of bargaining in bad faith and discriminating against its employees for implementing the wage orders pursuant to law.

The Court likewise finds unmeritorious petitioner union's contention that by its failure to grant across-the-board wage increases,
private respondent violated the provisions of Section 5, Article VII of the existing CBA 26 as well as Article 100 of the Labor Code.
The CBA provision states:

"Section 5. The COMPANY agrees to comply with all the applicable provisions of the Labor Code of the
Philippines, as amended, and all other laws, decrees, orders, instructions, jurisprudence, rules and regulations
affecting labor." Cdpr
 Article 100 of the Labor Code on prohibition against elimination or diminution of benefits provides that "(n)othing in this Book
shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of
promulgation of this Code."
We agree with the Labor Arbiter and the NLRC that no benefits or privileges previously enjoyed by petitioner union and the other
employees were withdrawn as a result of the manner by which private respondent implemented the wage orders. Granted that
private respondent had granted an across-the-board increase pursuant toRepublic Act No. 6727, that single instance may not be
considered an established company practice. Petitioner union's argument in this regard is actually tied up with its claim that the
implementation of Wage Orders Nos. 01 and 02 by private respondent resulted in wage distortion.

The issue of whether or not a wage distortion exists is a question of fact 27 that is within the jurisdiction of the quasi-judicial
tribunals below. Factual findings of administrative agencies are accorded respect and even finality in this Court if they are supported
by substantial evidence. 28 Thus, in Metropolitan Bank and Trust Company, Inc. v. NLRC , the Court said:

"The issue of whether or not a wage distortion exists as a consequence of the grant of a wage increase to certain
employees, we agree, is, by and large, a question of fact the determination of which is the statutory function of
the NLRC. Judicial review of labor cases, we may add, does not go beyond the evaluation of the sufficiency of the
evidence upon which the labor officials' findings rest. As such, the factual findings of the NLRC are generally
accorded not only respect but also finality provided that its decisions are supported by substantial evidence and
devoid of any taint of unfairness or arbitrariness. When, however, the members of the same labor tribunal are
not in accord on those aspects of a case, as in this case, this Court is well cautioned not to be as so conscious in
passing upon the sufficiency of the evidence, let alone the conclusions derived therefrom." 29

Unlike in above-cited case where the Decision of the NLRC was not unanimous, the NLRC Decision in this case which was penned by
the dissenter in that case, Presiding Commissioner Edna Bonto-Perez, unanimously ruled that no wage distortions marred private
respondent's implementation of the wage orders. The NLRC said:

"On the issue of wage distortion, we are satisfied that there was a meaningful implementation of Wage Orders
Nos. 01 and 02. This debunks the claim that there was wage distortion as could be shown by the itemized wages
implementation quoted above. It should be noted that this itemization has not been successfully traversed by the
appellants. . . ." 30

The NLRC then quoted the labor arbiter's ruling on wage distortion.
We find no reason to depart from the conclusions of both the labor arbiter and the NLRC. It is apropos to note, moreover, that
petitioner's contention on the issue of wage distortion and the resulting allegation of discrimination against the private respondent's
employees are anchored on its dubious position that private respondent' s promise to grant an across-the-board increase in
government-mandated salary benefits reflected in the Minutes of the negotiation is an enforceable part of the CBA.

In the resolution of labor cases, this Court has always been guided by the State policy enshrined in the Constitution that the rights of
workers and the promotion of their welfare shall be protected. 31 The Court is likewise guided by the goal of attaining industrial
peace by the proper application of the law. It cannot favor one party, be it labor or management, in arriving at a just solution to a
controversy if the party has no valid support to its claims. It is not within this Court's power to rule beyond the ambit of the law. cdll

WHEREFORE, the instant petition for certiorari is hereby DISMISSED and the questioned Resolutions of the NLRC AFFIRMED. No
costs.

SO ORDERED.

Narvasa, C .J ., Kapunan and Purisima, JJ ., concur.

||| (Samahang Manggagawa sa Top Form Manufacturing v. National Labor Relations Commission, G.R. No. 113856, [September 7,
1998], 356 PHIL 480-497)

35. SECOND DIVISION

[G.R. No. 160828. August 9, 2010.]

PICOP RESOURCES, INCORPORATED (PRI), petitioner, vs. ANACLETO L. TAÑECA, GEREMIAS S. TATO,
JAIME N. CAMPOS, MARTINIANO A. MAGAYON, JOSEPH B. BALGOA, MANUEL G. ABUCAY, MOISES M.
ALBARAN, MARGARITO G. ALICANTE, JERRY ROMEO T. AVILA, LORENZO D. CANON, RAUL P. DUERO,
DANILO Y. ILAN, MANUEL M. MATURAN, JR., LUISITO R. POPERA, CLEMENTINO C. QUIMAN, ROBERTO
Q. SILOT, CHARLITO D. SINDAY, REMBERT B. SUZON ALLAN J. TRIMIDAL, and NAMAPRI-
SPFL, respondents.

DECISION

PERALTA, J p:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal of the
Decision 1 dated July 25, 2003 and Resolution 2 dated October 23, 2003 of the Court of Appeals in CA-G.R. SP No. 71760,
setting aside the Resolutions dated October 8, 2001 3 and April 29, 2002 4 of the National Labor Relations Commission in NLRC
CA No. M-006309-2001 and reinstating the Decision 5 dated March 16, 2001 of the Labor Arbiter.
The facts, as culled from the records, are as follows:
On February 13, 2001, respondents Anacleto Tañeca, Loreto Uriarte, Joseph Balgoa, Jaime Campos, Geremias Tato,
Martiniano Magayon, Manuel Abucay and fourteen (14) others filed a Complaint for unfair labor practice, illegal dismissal and
money claims against petitioner PICOP Resources, Incorporated (PRI), Wilfredo Fuentes (in his capacity as PRI's Vice
President/Resident Manager), Atty. Romero Boniel (in his capacity as PRI's Manager of Legal/Labor), Southern Philippines
Federation of Labor (SPFL), Atty. Wilbur T. Fuentes (in his capacity as Secretary General of SPFL), Pascasio Trugillo (in his
capacity as Local President of Nagkahiusang Mamumuo sa PICOP Resources, Inc.-SPFL [NAMAPRI-SPFL]) and Atty. Proculo
Fuentes, Jr. 6 (in his capacity as National President of SPFL).
Respondents were regular rank-and-file employees of PRI and bona fide members of Nagkahiusang Mamumuo sa PRI
Southern Philippines Federation of Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the rank-and-file
employees of petitioner PRI. HSCATc
PRI has a collective bargaining agreement (CBA) with NAMAPRI-SPFL for a period of five (5) years from May 22, 1995
until May 22, 2000.
The CBA contained the following union security provisions:
"Article II — Union Security and Check-Off

Section 6. Maintenance of membership. —

6.1 All employees within the appropriate bargaining unit who are members of the UNION at the time
of the signing of this AGREEMENT shall, as a condition of continued employment by the COMPANY,
maintain their membership in the UNION in good standing during the effectivity of this AGREEMENT.

6.2 Any employee who may hereinafter be employed to occupy a position covered by the bargaining unit shall
be advised by the COMPANY that they are required to file an application for membership with the UNION within
thirty (30) days from the date his appointment shall have been made regular.

6.3 The COMPANY, upon the written request of the UNION and after compliance with the
requirements of the New Labor Code, shall give notice of termination of services of any employee
who shall fail to fulfill the condition provided in Section 6.1 and 6.2 of this Article, but it assumes no
obligation to discharge any employee if it has reasonable grounds to believe either that membership in the
UNION was not available to the employee on the same terms and conditions generally applicable to other
members, or that membership was denied or terminated for reasons other than voluntary resignation or non-
payment of regular union dues. Separation under the Section is understood to be for cause, consequently, the
dismissed employee is not entitled to separation benefits provided under the New Labor Code and in this
AGREEMENT." 7

On May 16, 2000, Atty. Proculo P. Fuentes (Atty. Fuentes) sent a letter to the management of PRI demanding the
termination of employees who allegedly campaigned for, supported and signed the Petition for Certification Election of the
Federation of Free Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL considered said act of campaigning for
and signing the petition for certification election of FFW as an act of disloyalty and a valid basis for termination for a cause in
accordance with its Constitution and By-Laws, and the terms and conditions of the CBA, specifically Article II, Sections 6.1 and
6.2 on Union Security Clause.
In a letter dated May 23, 2000, Mr. Pascasio Trugillo requested the management of PRI to investigate those union
members who signed the Petition for Certification Election of FFW during the existence of their CBA. NAMAPRI-SPFL, likewise,
furnished PRI with machine copy of the authorization letters dated March 19, 20 and 21, 2000, which contained the names and
signatures of employees.
Acting on the May 16 and May 23, 2000 letters of the NAMAPRI-SPFL, Atty. Romero A. Boniel issued a memorandum
addressed to the concerned employees to explain in writing within 72 hours why their employment should not be terminated due
to acts of disloyalty as alleged by their Union. EcHTDI
Within the period from May 26 to June 2, 2000, a number of employees who were served "explanation memorandum"
submitted their explanation, while some did not.
In a letter dated June 2, 2000, Atty. Boniel endorsed the explanation letters of the employees to Atty. Fuentes for
evaluation and final disposition in accordance with the CBA.
After evaluation, in a letter dated July 12, 2000, Atty. Fuentes advised the management of PRI that the Union found the
member's explanations to be unsatisfactory. He reiterated the demand for termination, but only of 46 member-employees,
including respondents.
On October 16, 2000, PRI served notices of termination for causes to the 31 out of the 46 employees whom NAMAPRIL-
SPFL sought to be terminated on the ground of "acts of disloyalty" committed against it when respondents allegedly supported
and signed the Petition for Certification Election of FFW before the "freedom period" during the effectivity of the CBA. A Notice
dated October 21, 2000 was also served on the Department of Labor and Employment Office (DOLE), Caraga Region.
Respondents then accused PRI of Unfair Labor Practice punishable under Article 248 (a), (b), (c), (d) and (e) of the
Labor Code, while Atty. Fuentes and Wilbur T. Fuentes and Pascasio Trujillo were accused of violating Article 248 (a) and (b) of
the Labor Code.
Respondents alleged that none of them ever withdrew their membership from NAMAPRI-SPFL or submitted to PRI any
union dues and check-off disauthorizations against NAMAPRI-SPFL. They claimed that they continue to remain on record as bona
fide members of NAMAPRI-SPFL. They pointed out that a patent manifestation of one's disloyalty would have been the explicit
resignation or withdrawal of membership from the Union accompanied by an advice to management to discontinue union dues
and check-off deductions. They insisted that mere affixation of signature on such authorization to file a petition for certification
election was not per se an act of disloyalty. They claimed that while it may be true that they signed the said authorization before
the start of the freedom period, the petition of FFW was only filed with the DOLE on May 18, 2000, or 58 days after the start of
the freedom period.
Respondents maintained that their acts of signing the authorization signifying support to the filing of a Petition for
Certification Election of FFW was merely prompted by their desire to have a certification election among the rank-and-file
employees of PRI with hopes of a CBA negotiation in due time; and not to cause the downfall of NAMAPRI-SPFL. ADSTCI
Furthermore, respondents contended that there was lack of procedural due process. Both the letter dated May 16, 2000
of Atty. Fuentes and the follow-up letter dated May 23, 2000 of Trujillo addressed to PRI did not mention their names.
Respondents stressed that NAMAPRI-SPFL merely requested PRI to investigate union members who supported the Petition for
Certification Election of FFW. Respondents claimed that they should have been summoned individually, confronted with the
accusation and investigated accordingly and from where the Union may base its findings of disloyalty and, thereafter,
recommend to management the termination for causes.
Respondents, likewise, argued that at the time NAMAPRI-SPFL demanded their termination, it was no longer the
bargaining representative of the rank-and-file workers of PRI, because the CBA had already expired on May 22, 2000. Hence,
there could be no justification in PRI's act of dismissing respondents due to acts of disloyalty.
Respondents asserted that the act of PRI, Wilfredo Fuentes and Atty. Boniel in giving in to the wishes of the Union in
discharging them on the ground of disloyalty to the Union amounted to interference with, restraint or coercion of respondents'
exercise of their right to self-organization. The act indirectly required petitioners to support and maintain their membership with
NAMAPRI-SPFL as a condition for their continued employment. The acts of NAMAPRI-SPFL, Atty. Fuentes and Trujillo amounted
to actual restraint and coercion of the petitioners in the exercise of their rights to self-organization and constituted acts of unfair
labor practice.
In a Decision 8 dated March 16, 2001, the Labor Arbiter declared the respondents' dismissal to be illegal and ordered
PRI to reinstate respondents to their former or equivalent positions without loss of seniority rights and to jointly and solidarily
pay their backwages. The dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby entered:

1. Declaring complainants' dismissal illegal; and

2. Ordering respondents Picop Resources Inc. (PRI) and NAMAPRI-SPFL to reinstate complainants to their former
or equivalent positions without loss of seniority rights and to jointly and solidarily pay their backwages in the
total amount of P420,339.30 as shown in the said Annex "A" plus damages in the amount of P10,000.00 each, or
a total of P210,000.00 and attorney's fees equivalent to 10% of the total monetary award.

SO ORDERED. 9 ESCDHA

PRI and NAMAPRI-SPFL appealed to the National Labor Relations Commission (NLRC), which reversed the decision of
the Labor Arbiter; thus, declaring the dismissal of respondents from employment as legal.
Respondents filed a motion for reconsideration, but it was denied on April 29, 2001 for lack of merit.
Unsatisfied, respondents filed a petition for certiorari under Rule 65 before the Court of Appeals and sought the
nullification of the Resolution of the NLRC dated October 8, 2001 which reversed the Decision dated March 16, 2001 of Labor
Arbiter and the Resolution dated April 29, 2002, which denied respondent's motion for reconsideration.
On July 25, 2003, the Court of Appeals reversed and set aside the assailed Resolutions of the NLRC and reinstated the
Decision dated March 16, 2001 of the Labor Arbiter.
Thus, before this Court, PRI, as petitioner, raised the following issues:
I

WHETHER AN EXISTING COLLECTIVELY (sic) BARGAINING AGREEMENT (CBA) CAN BE GIVEN ITS FULL FORCE
AND EFFECT IN ALL ITS TERMS AND CONDITION INCLUDING ITS UNION SECURITY CLAUSE, EVEN BEYOND THE
5-YEAR PERIOD WHEN NO NEW CBA HAS YET BEEN ENTERED INTO.

II

WHETHER OR NOT AN HONEST ERROR IN THE INTERPRETATION AND/OR CONCLUSION OF LAW FALL WITHIN
THE AMBIT OF THE EXTRAORDINARY REMEDY OF CERTIORARI UNDER RULE 65, REVISED RULES OF COURT. 10

We will first delve on the technical issue raised.

PRI perceived a patent error in the mode of appeal elected by respondents for the purpose of assailing the decision of
the NLRC. It claimed that assuming that the NLRC erred in its judgment on the legal issues, its error, if any, is not tantamount
to abuse of discretion falling within the ambit of Rule 65.
Petitioner is mistaken. ESCDHA
The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition for Certiorari has been settled as
early as in our decision in St. Martin Funeral Home v. National Labor Relations Commission. 11 This Court held that the proper
vehicle for such review was a Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and that this action should
be filed in the Court of Appeals in strict observance of the doctrine of the hierarchy of courts. 12 Moreover, it is already settled
that under Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902[10] (An Act Expanding the Jurisdiction
of the Court of Appeals, amending for the purpose of Section Nine of Batas Pambansa Blg. 129 as amended, known as
the Judiciary Reorganization Act of 1980), the Court of Appeals — pursuant to the exercise of its original jurisdiction over
Petitions for Certiorari — is specifically given the power to pass upon the evidence, if and when necessary, to resolve factual
issues. 13
We now come to the main issue of whether there was just cause to terminate the employment of respondents.
PRI argued that the dismissal of the respondents was valid and legal. It claimed to have acted in good faith at the
instance of the incumbent union pursuant to the Union Security Clause of the CBA.
Citing Article 253 of the Labor Code, 14 PRI contends that as parties to the CBA, they are enjoined to keep the status
quo and continue in full force and effect the terms and conditions of the existing CBA during the 60-day period and/or until a
new agreement is reached by the parties.
Petitioner's argument is untenable.
"Union security" is a generic term, which is applied to and comprehends "closed shop," "union shop," "maintenance of
membership," or any other form of agreement which imposes upon employees the obligation to acquire or retain union
membership as a condition affecting employment. There is union shop when all new regular employees are required to join the
union within a certain period as a condition for their continued employment. There is maintenance of membership shop when
employees, who are union members as of the effective date of the agreement, or who thereafter become members, must
maintain union membership as a condition for continued employment until they are promoted or transferred out of the
bargaining unit, or the agreement is terminated. A closed shop, on the other hand, may be defined as an enterprise in which, by
agreement between the employer and his employees or their representatives, no person may be employed in any or certain
agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member
in good standing of a union entirely comprised of or of which the employees in interest are a part. 15
However, in terminating the employment of an employee by enforcing the union security clause, the employer needs to
determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the
union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the
employee from the union. These requisites constitute just cause for terminating an employee based on the union security
provision of the CBA. 16
As to the first requisite, there is no question that the CBA between PRI and respondents included a union security
clause, specifically, a maintenance of membership as stipulated in Sections 6 of Article II, Union Security and Check-Off.
Following the same provision, PRI, upon written request from the Union, can indeed terminate the employment of the employee
who failed to maintain its good standing as a union member.
Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) occasions demanded from PRI, in their letters dated
May 16 and 23, 2000, to terminate the employment of respondents due to their acts of disloyalty to the Union.
 However, as to the third requisite, we find that there is no sufficient evidence to support the decision of PRI to
terminate the employment of the respondents.
PRI alleged that respondents were terminated from employment based on the alleged acts of disloyalty they committed
when they signed an authorization for the Federation of Free Workers (FFW) to file a Petition for Certification Election among all
rank-and-file employees of PRI. It contends that the acts of respondents are a violation of the Union Security Clause, as
provided in their Collective Bargaining Agreement. HSCATc
We are unconvinced.
We are in consonance with the Court of Appeals when it held that the mere signing of the authorization in support of
the Petition for Certification Election of FFW on March 19, 20 and 21, or before the "freedom period," is not sufficient ground to
terminate the employment of respondents inasmuch as the petition itself was actually filed during the freedom period. Nothing in
the records would show that respondents failed to maintain their membership in good standing in the Union. Respondents did
not resign or withdraw their membership from the Union to which they belong. Respondents continued to pay their union dues
and never joined the FFW.
Significantly, petitioner's act of dismissing respondents stemmed from the latter's act of signing an authorization letter
to file a petition for certification election as they signed it outside the freedom period. However, we are constrained to believe
that an "authorization letter to file a petition for certification election" is different from an actual "Petition for Certification
Election." Likewise, as per records, it was clear that the actual Petition for Certification Election of FFW was filed only on May 18,
2000. 17 Thus, it was within the ambit of the freedom period which commenced from March 21, 2000 until May 21, 2000.
Strictly speaking, what is prohibited is the filing of a petition for certification election outside the 60-day freedom period. 18 This
is not the situation in this case. If at all, the signing of the authorization to file a certification election was merely preparatory to
the filing of the petition for certification election, or an exercise of respondents' right to self-organization.
Moreover, PRI anchored their decision to terminate respondents' employment on Article 253 of the Labor Code which
states that "it shall be the duty of both parties to keep the status quo and to continue in full force and effect the
terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached
by the parties." It claimed that they are still bound by the Union Security Clause of the CBA even after the expiration of the
CBA; hence, the need to terminate the employment of respondents.
Petitioner's reliance on Article 253 is misplaced.
The provision of Article 256 of the Labor Code is particularly enlightening. It reads:
Article 256. Representation issue in organized establishments. — In organized establishments, when a verified
petition questioning the majority status of the incumbent bargaining agent is filed before the Department of
Labor and Employment within the sixty-day period before the expiration of a collective bargaining agreement,
the Med-Arbiter shall automatically order an election by secret ballot when the verified petition is supported by
the written consent of at least twenty-five percent (25%) of all the employees in the bargaining unit to ascertain
the will of the employees in the appropriate bargaining unit. To have a valid election, at least a majority of all
eligible voters in the unit must have cast their votes. The labor union receiving the majority of the valid votes
cast shall be certified as the exclusive bargaining agent of all the workers in the unit. When an election which
provides for three or more choices results in no choice receiving a majority of the valid votes cast, a run-off
election shall be conducted between the labor unions receiving the two highest number of votes: Provided, That
the total number of votes for all contending unions is at least fifty per cent (50%) of the number of votes cast.

At the expiration of the freedom period, the employer shall continue to recognize the majority status
of the incumbent bargaining agent where no petition for certification election is filed. 19 HTCIcE

Applying the same provision, it can be said that while it is incumbent for the employer to continue to recognize the
majority status of the incumbent bargaining agent even after the expiration of the freedom period, they could only do so when
no petition for certification election was filed. The reason is, with a pending petition for certification, any such agreement entered
into by management with a labor organization is fraught with the risk that such a labor union may not be chosen thereafter as
the collective bargaining representative. 20 The provision for status quo is conditioned on the fact that no certification election
was filed during the freedom period. Any other view would render nugatory the clear statutory policy to favor certification
election as the means of ascertaining the true expression of the will of the workers as to which labor organization would
represent them. 21
In the instant case, four (4) petitions were filed as early as May 12, 2000. In fact, a petition for certification election
was already ordered by the Med-Arbiter of DOLE Caraga Region on August 23, 2000. 22 Therefore, following Article 256, at the
expiration of the freedom period, PRI's obligation to recognize NAMAPRI-SPFL as the incumbent bargaining agent does not hold
true when petitions for certification election were filed, as in this case.
Moreover, the last sentence of Article 253 which provides for automatic renewal pertains only to the economic
provisions of the CBA, and does not include representational aspect of the CBA. An existing CBA cannot constitute a bar to a
filing of a petition for certification election. When there is a representational issue, the status quo provision in so far as the need
to await the creation of a new agreement will not apply. Otherwise, it will create an absurd situation where the union members
will be forced to maintain membership by virtue of the union security clause existing under the CBA and, thereafter, support
another union when filing a petition for certification election. If we apply it, there will always be an issue of disloyalty whenever
the employees exercise their right to self-organization. The holding of a certification election is a statutory policy that should not
be circumvented, 23 or compromised.
Time and again, we have ruled that we adhere to the policy of enhancing the welfare of the workers. Their freedom to
choose who should be their bargaining representative is of paramount importance. The fact that there already exists a
bargaining representative in the unit concerned is of no moment as long as the petition for certification election was filed within
the freedom period. What is imperative is that by such a petition for certification election the employees are given the
opportunity to make known of who shall have the right to represent them thereafter. Not only some, but all of them should have
the right to do so. What is equally important is that everyone be given a democratic space in the bargaining unit concerned. 24
We will emphasize anew that the power to dismiss is a normal prerogative of the employer. This, however, is not
without limitations. The employer is bound to exercise caution in terminating the services of his employees especially so when it
is made upon the request of a labor union pursuant to the Collective Bargaining Agreement. Dismissals must not be arbitrary
and capricious. Due process must be observed in dismissing an employee, because it affects not only his position but also his
means of livelihood. Employers should, therefore, respect and protect the rights of their employees, which include the right to
labor. 25 EcHTCD
An employee who is illegally dismissed is entitled to the twin reliefs of full backwages and reinstatement. If
reinstatement is not viable, separation pay is awarded to the employee. In awarding separation pay to an illegally dismissed
employee, in lieu of reinstatement, the amount to be awarded shall be equivalent to one month salary for every year of service.
Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and
other benefits, or their monetary equivalent, computed from the time their actual compensation was withheld from them up to
the time of their actual reinstatement. But if reinstatement is no longer possible, the backwages shall be computed from the
 time of their illegal termination up to the finality of the decision. Moreover, respondents, having been compelled to litigate in
order to seek redress for their illegal dismissal, are entitled to the award of attorney's fees equivalent to 10% of the total
monetary award. 26
WHEREFORE, the petition is DENIED. The Decision dated July 25, 2003 and the Resolution dated October 23, 2003 of
the Court of Appeals in CA-G.R. SP No. 71760, which set aside the Resolutions dated October 8, 2001 and April 29, 2002 of the
National Labor Relations Commission in NLRC CA No. M-006309-2001, areAFFIRMED accordingly. Respondents are hereby
awarded full backwages and other allowances, without qualifications and diminutions, computed from the time they were
illegally dismissed up to the time they are actually reinstated. Let this case be remanded to the Labor Arbiter for proper
computation of the full backwages due respondents, in accordance with Article 279 of the Labor Code, as expeditiously as
possible.
SO ORDERED.
Carpio, Nachura, Abad and Mendoza, JJ., concur.
||| (PICOP Resources, Inc. v. Tañeca, G.R. No. 160828, [August 9, 2010], 641 PHIL 175-194)

36. FIRST DIVISION

[G.R. No. 124224. March 17, 2000.]

NEW PACIFIC TIMBER & SUPPLY COMPANY, CO., INC., petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, MUSIB M. BUAT, LEON G. GONZAGA, JR., ET AL., NATIONAL FEDERATION OF LABOR,
MARIANO AKILIT and 350 OTHERS, respondents.

Siguion-Reyna Montecillo & Ongsiako for petitioner.

The Solicitor General for public respondent.

SYNOPSIS

Executive Labor Arbiter Hakim S. Abdulwahid in an order granted monetary benefits consisting of wage increases, housing
allowances, bonuses, etc. to the regular rank-and-file employees of petitioner company. Petitioner company complied; and the
corresponding quitclaims were executed. The case was considered closed following the manifestation of respondent National
Federation of Labor (NFL) that it will no longer appeal the October 18, 1993 Order of Labor Arbiter Villena. However, notwithstanding
such manifestation, a "Petition for Relief'' was filed in behalf of 186 of the private respondents "Mariano J. Akilit and 350 others" on
May 12, 1994. In their petition, they claimed that they were wrongfully excluded from enjoying the benefits under the CBA since the
agreement with NFL and petitioner Company limited the CBA's implementation to only the 142 rank-and-file employees enumerated
therein. They claimed that NFL's misrepresentations had precluded them from appealing their exclusion. Treating the petition for
relief as an appeal, the National Labor Relations Commission (NLRC) entertained the same. Thereafter, said Commission issued a
resolution declaring that the 186 excluded employees "form part and parcel of the then existing rank-and-file bargaining unit" and
were, therefore, entitled to the benefits under the CBA. Petitioner Company filed a motion for reconsideration but was denied for lack
of merit. Hence, the present petition. Petitioner argued that the private respondents are not entitled to the benefits under the CBA
because employees hired after the term of a CBA are not parties to the agreement, and, therefore, may not claim benefits
thereunder, even if they subsequently become members of the bargaining unit. As for the term of the CBA, petitioner maintains that
Article 253 of the Labor Code refers to the continuation in full force and effect of the previous CBA's terms and conditions. By
necessity, it could not possibly refer to terms and conditions which, as expressly stipulated, ceased to have force and effect. TAEDcS

The Supreme Court dismissed the petition for lack of merit. According to the Court, Article 253 of the Labor Code clearly provides
that until a new Collective Bargaining Agreement has been executed by and between the parties, they are duty-bound to keep
the status quo and to continue in full force and effect the terms and conditions of the existing agreement. The law does not provide
for any exception nor qualification as to which of the economic provisions of the existing agreement are to retain force and effect;
therefore, it must be understood as encompassing all the terms and conditions in the said agreement. The Court also ruled that the
benefits under the CBA in the instant case should be extended to those employees who only became such after the year 1984. To
exclude them would constitute undue discrimination and deprive them of monetary benefits they would otherwise be entitled to
under a new collective bargaining contract to which they would have been parties. Since in this particular case, no new agreement
had been entered into after the CBA's stipulated term, it is only fair and just that the employees hired thereafter be included in the
existing CBA.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; NO GRAVE ABUSE OF DISCRETION ON THE PART OF THE NATIONAL
LABOR RELATIONS COMMISSION WHEN IT ENTERTAINED THE PETITION FOR RELIEF AND TREATED IT AS AN APPEAL EVEN IF IT
WAS FILED BEYOND THE REGLEMENTARY PERIOD FOR FILING AN APPEAL; THE FACTS AND CIRCUMSTANCES OF THE PRESENT
CASE WARRANTS LIBERALITY IN THE APPLICATION OF TECHNICAL RULES AND PROCEDURE. — We find no grave abuse of discretion
on the part of the NLRC, when it entertained the petition for relief filed by the private respondents and treated it as an appeal, even
if it was filed beyond the reglementary period for filing an appeal. Ordinarily, once a judgment has become final and executory, it can
no longer be disturbed, altered or modified. However, a careful scrutiny of the facts and circumstances of the instant case warrants
liberality in the application of technical rules and procedure. It would be a greater injustice to deprive the concerned employees of
the monetary benefits rightly due them because of a circumstance over which they had no control. As stated above, private
respondents, in their petition for relief, claimed that they were wrongfully excluded from the list of those entitled to the CBA benefits
by their union, NFL, without their knowledge; and, because they were under the impression that they were ably represented, they
were not able to appeal their case on time. The Supreme Court has allowed appeals from decisions of the labor arbiter to the NLRC,
even if filed beyond the reglementary period, in the interest of justice. Moreover, under Article 218 (c) of the Labor Code, the NLRC
may, in the exercise of its appellate powers, "correct, amend or waive any error, defect or irregularity whether in substance or in
form." Further, Article 221 of the same provides that: "In any proceeding before the Commission or any of the Labor Arbiters, the
rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the
Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case
speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. . . . "

2. ID.; ID.; THE COLLECTIVE BARGAINING AGREEMENT REMAINS IN FULL FORCE AND EFFECT EVEN BEYOND THE STIPULATED
TERM IN THE ABSENCE OF A NEW AGREEMENT; ARTICLE 253 OF THE LABOR CODE DOES NOT PROVIDE FOR ANY EXCEPTION NOR
QUALIFICATION TO WHICH OF THE ECONOMIC PROVISIONS OF THE EXISTING AGREEMENT ARE TO RETAIN FORCE AND EFFECT,
THEREFORE, IT MUST BE UNDERSTOOD AS ENCOMPASSING ALL THE TERMS AND CONDITIONS OF SAID AGREEMENT. — It is clear
from the above provision of law that until a new Collective Bargaining Agreement has been executed by and between the parties,
they are duty-bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing
agreement. The law does not provide for any exception nor qualification as to which of the economic provisions of the existing
agreement are to retain force and effect; therefore, it must be understood as encompassing all the terms and conditions in the said
agreement. In the case at bar, no new agreement was entered into by and between petitioner Company and NFL pending appeal of
the decision in NLRC Case No. RAB-IX-0334-82; nor were any of the economic provisions and/or terms and conditions pertaining to
monetary benefits in the existing agreement modified or altered. Therefore, the existing CBA in its entirety, continues to have legal
effect. In a recent case, the Court had occasion to rule that Articles 253 and 253-A mandate the parties to keep the status quo and
to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period prior to the
expiration of the old CBA and/or until a new agreement is reached by the parties. Consequently, the automatic renewal clause
provided for by the law, which is deemed incorporated in all CBA's, provides the reason why the new CBA can only be given a
prospective effect.

3. ID.; ID.; ID.; ID.; TO RULE OTHERWISE WOULD CREATE A SITUATION THAT RUNS CONTRARY TO THE VERY INTENT AND
PURPOSE OF ARTICLES 253 AND 252-A OF THE LABOR CODE. — To rule otherwise, i.e., that the economic provisions of the existing
CBA in the instant case ceased to have force and effect in the year 1984, would be to create a gap during which no agreement would
govern, from the time the old contract expired to the time a new agreement shall have been entered into. For if, as contended by the
petitioner, the economic provisions of the existing CBA were to have no legal effect, what agreement as to wage increases and other
monetary benefits would govern at all? None, it would seem, if we are to follow the logic of petitioner Company. Consequently, the
employees from the year 1985 onwards would be deprived of a substantial amount of monetary benefits which they could have
enjoyed had the terms and conditions of the CBA remained in force and effect. Such a situation runs contrary to the very intent and
purpose of Articles 253 and 253-A of the Labor Code.

4. ID.; ID.; ID.; ID.; BENEFITS OF THE COLLECTIVE BARGAINING AGREEMENT SHOULD ALSO BE EXTENDED TO THOSE EMPLOYEES
WHO ONLY BECAME SUCH AFTER THE AGREEMENT WAS ENTERED INTO; TO DEPRIVE THEM WOULD CONSTITUTE UNDUE
DISCRIMINATION AND DEPRIVE THEM OF MONETARY BENEFITS THEY WOULD OTHERWISE BE ENTITLED TO UNDER A NEW
COLLECTIVE BARGAINING CONTRACT TO WHICH THEY WOULD HAVE BEEN PARTIES. — Petitioner Company insists that the rank-
and-file employees hired after the term of the CBA inspite of their subsequent membership in the bargaining unit, are not parties to
the agreement, and certainly may not claim the benefits thereunder. We do not agree. In a long line of cases, this Court has held
that when a collective bargaining contract is entered into by the union representing the employees and the employer, even the non-
member employees are entitled to the benefits of the contract. To accord its benefits only to members of the union without any valid
reason would constitute undue discrimination against nonmembers. It is even conceded, that a laborer can claim benefits from a CBA
entered into between the company and the union of which he is a member at the time of the conclusion of the agreement, after he
has resigned from said union. In the same vein, the benefits under the CBA in the instant case should be extended to those
employees who only became such after the year 1984. To exclude them would constitute undue discrimination and deprive them of
monetary benefits they would otherwise be entitled to under a new collective bargaining contract to which they would have been
parties. Since in this particular case, no new agreement had been entered into after the CBA's stipulated term, it is only fair and just
that the employees hired thereafter be included in the existing CBA. This is in consonance with our ruling that the terms and
conditions of a collective bargaining agreement continue to have force and effect beyond the stipulated term when no new
agreement is executed by and between the parties to avoid or prevent the situation where no collective bargaining agreement at
all would govern between the employer company and its employees. AcEIHC

DECISION

KAPUNAN, J p:

May the term of a Collective Bargaining Agreement (CBA) as to its economic provisions be extended beyond the term expressly
stipulated therein, and, in the absence of a new CBA, even beyond the three-year period provided by law? Are employees hired after
the stipulated term of a CBA entitled to the benefits provided thereunder?

These are the issues at the heart of the instant petition for certiorari with prayer for the issuance of preliminary injunction and/or
temporary restraining order filed by petitioner New Pacific Timber & Supply Company, Incorporated against the National Labor
Relations Commission (NLRC), et al. and the National Federation of Labor, et al. cdasia

The antecedent facts, as found by the NLRC, are as follows:

The National Federation of Labor (NFL, for brevity) was certified as the sole and exclusive bargaining representative of all the regular
rank-and-file employees of New Pacific Timber & Supply Co., Inc. (hereinafter referred to as petitioner Company). 1 As such, NFL
started to negotiate for better terms and conditions of employment for the employees in the bargaining unit which it represented.
However, the same was allegedly met with stiff resistance by petitioner Company, so that the former was prompted to file a
complaint for unfair labor practice (ULP) against the latter on the ground of refusal to bargain collectively. 2

On March 31, 1987, then Executive Labor Arbiter Hakim S. Abdulwahid issued an order declaring (a) herein petitioner Company
guilty of ULP; and (b) the CBA proposals submitted by the NFL as the CBA between the regular rank-and-file employees in the
bargaining unit and petitioner Company. 3

Petitioner Company appealed the above order to the NLRC. On November 15, 1989, the NLRC rendered a decision dismissing the
appeal for lack of merit. A motion for reconsideration thereof was, likewise, denied in a Resolution, dated November 12, 1990. 4

Unsatisfied, petitioner Company filed a petition for certiorari with this Court. But the Court dismissed said petition in a Resolution,
dated January 21, 1991. 5

Thereafter, the records of the case were remanded to the arbitration branch of origin for the execution of Labor Arbiter Abdulwahid’s
Order, dated March 31, 1987, granting monetary benefits consisting of wage increases, housing allowances, bonuses, etc. to the
regular rank-and-file employees. Following a series of conferences to thresh out the details of computation, Labor Arbiter Reynaldo
S. Villena issued an Order, dated October 18, 1993, directing petitioner Company to pay the 142 employees entitled to the aforesaid
benefits the respective amounts due them under the CBA. Petitioner Company complied; and, the corresponding quitclaims were
executed. The case was considered closed following NFL's manifestation that it will no longer appeal the October 18, 1993 Order of
Labor Arbiter Villena. 6

However, notwithstanding such manifestation, a "Petition for Relief" was filed in behalf of 186 of the private respondents "Mariano J.
Akilit and 350 others” on May 12, 1994. In their petition, they claimed that they were wrongfully excluded from enjoying the benefits
under the CBA since the agreement with NFL and petitioner Company limited the CBA's implementation to only the 142 rank-and-file
employees enumerated. They claimed that NFL's misrepresentations had precluded them from appealing their exclusion. 7

Treating the petition for relief as an appeal, the NLRC entertained the same. On August 4, 1994, said commission issued a
resolution 8 declaring that the 186 excluded employees "form part and parcel of the then existing rank-and-file bargaining unit" and
were, therefore, entitled to the benefits under the CBA. The NLRC held, thus:

WHEREFORE, the appeal is hereby granted and the Order of the Labor arbiter dated October 18, 1993 is
hereby Set Aside and Vacated. In lieu hereof, a new Order is hereby issued directing respondent New Pacific
Timber & Supply Co., Inc. to pay all its regular rank-and-file workers their wage differentials and other benefits
arising from the decreed CBA as explained above, within ten (10) days from receipt of this order.

SO ORDERED. 9

Petitioner Company filed a motion for reconsideration of the aforequoted resolution.

Meanwhile, four separate groups of the private respondents, including the original 186 who had filed the "Petition for Relief” filed
individual money claims, docketed as NLRC Cases Nos. M-001991-94 to M-001994-94, before the Arbitration Branch of the NLRC,
Cagayan de Oro City. However, Labor Arbiter Villena dismissed these cases in Orders, dated March 11, 1994; April 13, 1994; March
9, 1994, and, May 10, 1994. The employees appealed the respective dismissals of their complaints to the NLRC. The latter
consolidated these appeals with the aforementioned motion for reconsideration filed by petitioner Company.

On February 29, 1996, the NLRC issued a resolution, the dispositive portion of which reads as follows:

WHEREFORE, the instant petition for reconsideration of respondent is Denied for lack of merit and the Resolution
of this Commission dated August 4, 1994 Sustained.The separate orders of the Labor Arbiter dated March 11,
1994, April 13, 1994, March 9, 1994 and May 10, 1994, respectively, in NLRC Cases Nos. M-001991-94 to M-
001994-94 are Set Aside and Vacated for lack of legal bases. prLL

Conformably, respondent New Pacific Timber and Supply Co., Inc. is hereby directed to pay individual
complainants their CBA benefits in the aggregate amount of P13,559,510.37, the detailed computation thereof is
contained in Annex "A" which forms an integral part of this resolution, plus ten (10%) percent thereof as
Attorney's fees.

SO ORDERED. 10

Hence, the instant petition wherein petitioner Company raises the following issues:

THE PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN ALLOWING THE "PETITION FOR
RELIEF" TO PROSPER.

II

THE PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN RULING THAT PRIVATE
RESPONDENTS MARIANO AKILIT AND 350 OTHERS ARE ENTITLED TO BENEFITS UNDER THE COLLECTIVE
BARGAINING AGREEMENT IN SPITE OF THE FACT THAT THEY WERE NOT EMPLOYED BY THE PETITIONER MUCH
LESS WERE THEY MEMBERS OF THE BARGAINING UNIT DURING THE TERM OF THE CBA.

III

PUBLIC RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION IN MAKING FACTUAL FINDINGS
WITHOUT BASIS.

IV

THE DISPOSITIVE PORTIONS OF THE ASSAILED RESOLUTIONS ARE DEFECTIVE AND/OR REVEAL THE GRAVE
ABUSE OF DISCRETION COMMITTED BY PUBLIC RESPONDENT. 11

Petitioner Company contends that a "Petition for Relief" is not the proper mode of seeking a review of a decision rendered by the
arbitration branch of the NLRC. 12According to the petitioner, nowhere in the Labor Code or in the NLRC Rules of Procedure is there
such a pleading. Rather, the remedy of a party aggrieved by an unfavorable ruling of the labor arbiter is to appeal said judgment to
the NLRC. 13

Petitioner asseverates that even assuming that the NLRC correctly treated the petition for relief as an appeal, still, it should not have
allowed the same to prosper, because the petition was filed several months after the ten-day reglementary period for filing an appeal
had expired; and, therefore, it failed to comply with the requirements of an appeal under the Labor Code and the NLRC Rules of
Procedure.

Petitioner Company further contends that in filing separate complaints and/or money claims at the arbitration level in spite of their
pending petition for relief and in spite of the final order, dated October 18, 1993, in NLRC Case No. RAB-IX-0334-82, the private
respondents were in fact forum-shopping, an act which is proscribed as trifling with the courts and abusing their practices.

Anent the second issue, petitioner argues that the private respondents are not entitled to the benefits under the CBA because
employees hired after the term of a CBA are not parties to the agreement, and therefore, may not claim benefits thereunder, even if
they subsequently become members of the bargaining unit.

As for the term of the CBA, petitioner maintains that Article 253 of the Labor Code refers to the continuation in full force and effect of
the previous CBA's terms and conditions. By necessity, it could not possibly refer to terms and conditions which, as expressly
stipulated, ceased to have force and effect. 14

According to petitioner, the provision on wage increase in the 1981 to 1984 CBA between petitioner Company and NFL provided for
yearly wage increases. Logically, these provisions ended in the year 1984 — the last year that the economic provisions of the CBA
were, pursuant to contract and law, effective. Petitioner claims that there is no contractual basis for the grant of CBA benefits such
as wage increases in 1985 and subsequent years, since the CBA stipulates only the increases for the years 1981 to 1984.

Moreover, petitioner alleges that it was through no fault of theirs that no new CBA was entered pending appeal of the decision in
NLRC Case No. RAB-IX-0334-82.
Finally, petitioner Company claims that it was never given the opportunity to submit a counter-computation of the benefits
supposedly due the private respondents. Instead, the NLRC allegedly relied on the self-serving computations of private respondents.

Petitioner's contentions are untenable.

We find no grave abuse of discretion on the part of the NLRC, when it entertained the petition for relief filed by the private
respondents and treated it as an appeal, even if it was filed beyond the reglementary period for filing an appeal. Ordinarily, once a
judgment has become final and executory, it can no longer be disturbed, altered or modified. However, a careful scrutiny of the facts
and circumstances of the instant case warrants liberality in the application of technical rules and procedure. It would be a greater
injustice to deprive the concerned employees of the monetary benefits rightly due them because of a circumstance over which they
had no control. As stated above, private respondents, in their petition for relief, claimed that they were wrongfully excluded from the
list of those entitled to the CBA benefits by their union, NFL, without their knowledge; and, because they were under the impression
that they were ably represented, they were not able to appeal their case on time. cdtai

The Supreme Court has allowed appeals from decisions of the labor arbiter to the NLRC, even if filed beyond the reglementary
period, in the interest of justice. 15Moreover, under Article 218 (c) of the Labor Code, the NLRC may, in the exercise of its appellate
powers, "correct, amend or waive any error, defect or irregularity whether in substance or in form." Further, Article 221 of the same
provides that: "In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of
law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and the
Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without
regard to technicalities of law or procedure, all in the interest of due process. . . ." 16

Anent the issue of whether or not the term of an existing CBA, particularly as to its economic provisions, can be extended beyond the
period stipulated therein, and even beyond the three-year period prescribed by law, in the absence of a new agreement, Article 253
of the Labor Code explicitly provides:

ARTICLE 253. Duty to bargain collectively when there exists a collective bargaining agreement. — When there is
a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall
terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to
terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of
both parties to keep the status quo and to continue in full force and effect the terms and conditions of the
existing agreement during the 60-day period and/or until a new agreement is reached by the parties.(Italics
supplied.)

It is clear from the above provision of law that until a new Collective Bargaining Agreement has been executed by and between the
parties, they are duty-bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing
agreement. The law does not provide for any exception nor qualification as to which of the economic provisions of the existing
agreement are to retain force and effect; therefore, it must be understood as encompassing all the terms and conditions in the said
agreement.

In the case at bar, no new agreement was entered into by and between petitioner Company and NFL pending appeal of the decision
in NLRC Case No. RAB-IX-0334-82; nor were any of the economic provisions and/or terms and conditions pertaining to monetary
benefits in the existing agreement modified or altered. Therefore, the existing CBA in its entirety, continues to have legal effect.

In a recent case, the Court had occasion to rule that Articles 253 and 253-A 17 mandate the parties to keep the status quo and to
continue in full force and effect the terms and conditions of the existing agreement during the 60-day period prior to the expiration
of the old CBA and/or until a new agreement is reached by the parties. Consequently, the automatic renewal clause provided for by
the law, which is deemed incorporated in all CBA's, provides the reason why the new CBA can only be given a prospective effect. 18

In the case of Lopez Sugar Corporation vs. Federation of Free Workers, et al., 19 this Court reiterated the rule that although a CBA
has expired, it continues to have legal effects as between the parties until a new CBA has been entered into. It is the duty of both
parties to the CBA to keep the status quo, and to continue in full force and effect the terms and conditions of the existing agreement
during the 60-day period and/or until a new agreement is reached by the parties. 20

To rule otherwise, i.e., that the economic provisions of the existing CBA in the instant case ceased to have force and effect in the
year 1984, would be to create a gap during which no agreement would govern, from the time the old contract expired to the time a
new agreement shall have been entered into. For if, as contended by the petitioner, the economic provisions of the existing CBA
were to have no legal effect, what agreement as to wage increases and other monetary benefits would govern at all? None, it would
seem, if we are to follow the logic of petitioner Company. Consequently, the employees from the year 1985 onwards would be
deprived of a substantial amount of monetary benefits which they could have enjoyed had the terms and conditions of the CBA
remained in force and effect. Such a situation runs contrary to the very intent and purpose of Articles 253 and 253-A of the Labor
Code which is to curb labor unrest and to promote industrial peace, as can be gleaned from the discussions of the legislators leading
to the passage of said laws, thus:

HON. CHAIRMAN HERRERA:

Pag nag-survey tayo sa mga unyon, ganoon ang mangyayari. And I think our responsibility here is to create a
legal framework to promote industrial peace and to develop responsible and fair labor movement.

HON. CHAIRMAN VELOSO:

In other words, the longer the period of the effectivity. . . .

xxx xxx xxx

HON. CHAIRMAN VELOSO:

(continuing). . . . in other words, the longer the period of effectivity of the CBA, the better for industrial
peace. cdtai

xxx xxx xxx. 21

Having established that the CBA between petitioner Company and NFL remained in full force and effect even beyond the stipulated
term, in the absence of a new agreement; and, therefore, that the economic provisions such as wage increases continued to have
legal effect, we are now faced with the question of who are entitled to the benefits provided thereunder.

Petitioner Company insists that the rank-and-file employees hired after the term of the CBA in spite of their subsequent membership
in the bargaining unit, are not parties to the agreement, and certainly may not claim the benefits thereunder.

We do not agree. In a long line of cases, this Court has held that when a collective bargaining contract is entered into by the union
representing the employees and the employer, even the non-member employees are entitled to the benefits of the contract. To
accord its benefits only to members of the union without any valid reason would constitute undue discrimination against
nonmembers. 22 It is even conceded, that a laborer can claim benefits from a CBA entered into between the company and the union
of which he is a member at the time of the conclusion of the agreement, after he has resigned from said union. 23

In the same vein, the benefits under the CBA in the instant case should be extended to those employees who only became such after
the year 1984. To exclude them would constitute undue discrimination and deprive them of monetary benefits they would otherwise
be entitled to under a new collective bargaining contract to which they would have been parties. Since in this particular case, no new
agreement had been entered into after the CBA's stipulated term, it is only fair and just that the employees hired thereafter be
included in the existing CBA. This is in consonance with our ruling that the terms and conditions of a collective bargaining agreement
continue to have force and effect even beyond the stipulated term when no new agreement is executed by and between the parties
to avoid or prevent the situation where no collective bargaining agreement at all would govern between the employer company and
its employees.

Anent the other issues raised by petitioner Company, the Court finds that these pertain to questions of fact that have already been
passed upon by the NLRC. It is axiomatic that, the factual findings of the National Labor Relations Commission, which have acquired
expertise because its jurisdiction is confined to specific matters, are accorded respect and finality by the Supreme Court, when these
are supported by substantial evidence. A perusal of the assailed resolution reveals that the same was reached on the basis of the
required quantum of evidence. LLphil

WHEREFORE, in view of the foregoing, the instant petition for certiorari is hereby DISMISSED for lack of merit.

SO ORDERED.

||| (New Pacific Timber & Supply Co., Inc. v. National Labor Relations Commission, G.R. No. 124224, [March 17, 2000], 385 PHIL
93-108)

37. SECOND DIVISION

[G.R. No. L-54334. January 22, 1986.]

KIOK LOY, doing business under the name and style SWEDEN ICE CREAM
PLANT, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG
KILUSAN NG PAGGAWA (KILUSAN), respondents.

Ablan and Associates for petitioner.

Abdulcadir T. Ibrahim for private respondent.

DECISION

CUEVAS, J p:

Petition for CERTIORARI to annul the decision 1 of the National Labor Relations Commission (NLRC) dated July 20, 1979 which found
petitioner Sweden Ice Cream guilty of unfair labor practice for unjustified refusal to bargain, in violation of par. (g) of Article 249 2 of
the New Labor Code,3 and declared the draft proposal of the Union for a collective bargaining agreement as the governing collective
bargaining agreement between the employees and the management. cdrep

The pertinent background facts are as follows:

In a certification election held on October 3, 1978, the Pambansang Kilusan ng Paggawa (Union for short), a legitimate labor
federation, won and was subsequently certified in a resolution dated November 29, 1978 by the Bureau of Labor Relations as the
sole and exclusive bargaining agent of the rank-and-file employees of Sweden Ice Cream Plant (Company for short). The Company's
motion for reconsideration of the said resolution was denied on January 25, 1978.

Thereafter, and more specifically on December 7, 1978, the Union furnished 4 the Company with two copies of its proposed
collective bargaining agreement. At the same time, it requested the Company for its counter proposals, Eliciting no response to the
aforesaid request, the Union again wrote the Company reiterating its request for collective bargaining negotiations and for the
Company to furnish them with its counter proposals. Both requests were ignored and remained unacted upon by the Company.

Left with no other alternative in its attempt to bring the Company to the bargaining table, the Union, on February 14, 1979, filed a
"Notice of Strike", with the Bureau of Labor Relations (BLR) on ground of unresolved economic issues in collective bargaining. 5

Conciliation proceedings then followed during the thirty-day statutory cooling-off period. But all attempts towards an amicable
settlement failed, prompting the Bureau of Labor Relations to certify the case to the National Labor Relations Commission (NLRC) for
compulsory arbitration pursuant to Presidential Decree No. 823, as amended. The labor arbiter, Andres Fidelino, to whom the case
was assigned, set the initial hearing for April 29, 1979. For failure however, of the parties to submit their respective position papers
as required, the said hearing was cancelled and reset to another date. Meanwhile, the Union submitted its position paper. The
Company did not, and instead requested for a resetting which was granted. The Company was directed anew to submit its financial
statements for the years 1976, 1977, and 1978.

The case was further reset to May 11, 1979 due to the withdrawal of the Company's counsel of record, Atty. Rodolfo dela Cruz. On
May 24, 1978, Atty. Fortunato Panganiban formally entered his appearance as counsel for the Company only to request for another
postponement allegedly for the purpose of acquainting himself with the case. Meanwhile, the Company submitted its position paper
on May 28, 1979.

When the case was called for hearing on June 4, 1979 as scheduled, the Company's representative, Mr. Ching, who was supposed to
be examined, failed to appear. Atty. Panganiban then requested for another postponement which the labor arbiter denied. He also
ruled that the Company has waived its right to present further evidence and, therefore, considered the case submitted for resolution.

On July 18, 1979, labor arbiter Andres Fidelino submitted its report to the National Labor Relations Commission. On July 20, 1979,
the National Labor Relations Commission rendered its decision, the dispositive portion of which reads as follows: LLjur
 "WHEREFORE, the respondent Sweden Ice Cream is hereby declared guilty of unjustified refusal to bargain, in
violation of Section (g) Article 248 (now Article 249), of P.D. 442, as amended. Further, the draft proposal for a
collective bargaining agreement (Exh."E") hereto attached and made an integral part of this decision, sent by the
Union (Private respondent) to the respondent (petitioner herein) and which is hereby found to be reasonable
under the premises, is hereby declared to be the collective agreement which should govern the relationship
between the parties herein.

SO ORDERED." (Words in parenthesis supplied)

Petitioner now comes before Us assailing the aforesaid decision contending that the National Labor Relations Commission acted
without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in rendering the challenged
decision. On August 4, 1980, this Court dismissed the petition for lack of merit. Upon motion of the petitioner, however, the
Resolution of dismissal was reconsidered and the petition was given due course in a Resolution dated April 1, 1981.

Petitioner Company now maintains that its right to procedural due process has been violated when it was precluded from presenting
further evidence in support of its stand and when its request for further postponement was denied. Petitioner further contends that
the National Labor Relations Commission's finding of unfair labor practice for refusal to bargain is not supported by law and the
evidence considering that it was only on May 24. 1979 when the Union furnished them with a copy of the proposed Collective
Bargaining Agreement and it was only then that they came to know of the Union's demands; and finally, that the Collective
Bargaining Agreement approved and adopted by the National Labor Relations Commission is unreasonable and lacks legal basis.

The petition lacks merit. Consequently, its dismissal is in order.

Collective bargaining which is defined as negotiations towards a collective agreement, 6 is one of the democratic frameworks under
the New Labor Code,designed to stabilize the relation between labor and management and to create a climate of sound and stable
industrial peace. It is a mutual responsibility of the employer and the Union and is characterized as a legal obligation. So much so
that Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to refuse "to meet and convene
promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all
other terms and conditions of employment including proposals for adjusting any grievance or question arising under such an
agreement and executing a contract incorporating such agreement, if requested by either party."

While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate contract
negotiation. 7 The mechanics of collective bargaining is set in motion only when the following jurisdictional preconditions are
present, namely, (1) possession of the status of majority representation of the employees' representative in accordance with any of
the means of selection or designation provided for by the Labor Code; (2) proof of majority representation; and (3) a demand to
bargain under Article 251, par. (a) of the New Labor Code . . . all of which preconditions are undisputedly present in the instant case.

From the over-all conduct of petitioner company in relation to the task of negotiation, there can be no doubt that the Union has a
valid cause to complain against its (Company's) attitude, the totality of which is indicative of the latter's disregard of, and failure to
live up to, what is enjoined by the Labor Code — to bargain in good faith. Cdpr

We are in total conformity with respondent NLRC's pronouncement that petitioner Company is GUILTY of unfair labor practice. It has
been indubitably established that (1) respondent Union was a duly certified bargaining agent; (2) it made a definite request to
bargain, accompanied with a copy of the proposed Collective Bargaining Agreement, to the Company not only once but twice which
were left unanswered and unacted upon; and (3) the Company made no counter proposal whatsoever all of which conclusively
indicate lack of a sincere desire to negotiate. 8 A Company's refusal to make counter proposal if considered in relation to the entire
bargaining process, may indicate bad faith and this is specially true where the Union's request for a counter proposal is left
unanswered. 9 Even during the period of compulsory arbitration before the NLRC, petitioner Company's approach and attitude —
stalling the negotiation by a series of postponements, non-appearance at the hearing conducted, and undue delay in submitting its
financial statements, lead to no other conclusion except that it is unwilling to negotiate and reach an agreement with the Union.
Petitioner has not at any instance, evinced good faith or willingness to discuss freely and fully the claims and demands set forth by
the Union much less justify its opposition thereto. 10

The case at bar is not a case of first impression, for in the Herald Delivery Carriers Union (PAFLU) vs. Herald Publications 11 the rule
had been laid down that "unfair labor practice is committed when it is shown that the respondent employer, after having been served
with a written bargaining proposal by the petitioning Union, did not even bother to submit an answer or reply to the said proposal.
This doctrine was reiterated anew in Bradman vs. Court of Industrial Relations 12 wherein it was further ruled that "while the law
does not compel the parties to reach an agreement, it does contemplate that both parties will approach the negotiation with an open
mind and make a reasonable effort to reach a common ground of agreement".

As a last-ditch attempt to effect a reversal of the decision sought to be reviewed, petitioner capitalizes on the issue of due process
claiming, that it was denied the right to be heard and present its side when the Labor Arbiter denied the Company's motion for
further postponement.

Petitioner's aforesaid submittal failed to impress Us. Considering the various postponements granted in its behalf, the claimed denial
of due process appeared totally bereft of any legal and factual support. As herein earlier stated, petitioner had not even honored
respondent Union with any reply to the latter's successive letters, all geared towards bringing the Company to the bargaining table.
It did not even bother to furnish or serve the Union with its counter proposal despite persistent requests made therefor. Certainly,
the moves and overall behavior of petitioner-company were in total derogation of the policy enshrined in the New Labor Code which
is aimed towards expediting settlement of economic disputes. Hence, this Court is not prepared to affix its imprimatur to such an
illegal scheme and dubious maneuvers.

Neither are WE persuaded by petitioner-company's stand that the Collective Bargaining Agreement which was approved and adopted
by the NLRC is a total nullity for it lacks the company's consent, much less its argument that once the Collective Bargaining
Agreement is implemented, the Company will face the prospect of closing down because it has to pay a staggering amount of
economic benefits to the Union that will equal if not exceed its capital. Such a stand and the evidence in support thereof should have
been presented before the Labor Arbiter which is the proper forum for the purpose.

We agree with the pronouncement that it is not obligatory upon either side of a labor controversy to precipitately accept or agree to
the proposals of the other. But an erring party should not be tolerated and allowed with impunity to resort to schemes feigning
negotiations by going through empty gestures. 13 More so, as in the instant case, where the intervention of the National Labor
Relations Commission was properly sought for after conciliation efforts undertaken by the BLR failed. The instant case being a
certified one, it must be resolved by the NLRC pursuant to the mandate of P.D. 873, as amended, which authorizes the said body to
determine the reasonableness of the terms and conditions of employment embodied in any Collective Bargaining Agreement. To that
extent, utmost deference to its findings of reasonableness of any Collective Bargaining Agreement as the governing agreement by
the employees and management must be accorded due respect by this Court.

WHEREFORE, the instant petition is DISMISSED. The temporary restraining order issued on August 27, 1980, is LIFTED and SET
ASIDE.
No pronouncement as to costs.

SO ORDERED.

Concepcion Jr., Abad Santos, Escolin and Alampay, JJ., concur.

||| (Kiok Loy v. National Labor Relations Commission, G.R. No. L-54334, [January 22, 1986], 225 PHIL 138-147)

38. THIRD DIVISION

[G.R. No. 91915. September 11, 1992.]

DIVINE WORD UNIVERSITY OF TACLOBAN, petitioner, vs. SECRETARY OF LABOR AND EMPLOYMENT and
DIVINE WORD UNIVERSITY EMPLOYEES UNION-ALU, respondents.

Generosa R. Jacinto for petitioner.

Joji L. Barrios for private respondent.

DECISION

ROMERO, J p:

Assailed in this petition for certiorari for being violative of the "constitutional right of employees to self-organization which includes
the right to form, join or assist labor organizations of their own choosing for purposes of collective bargaining," 1 are the Orders of
May 23, 1989 and January 17, 1990 issued by then Secretary of Labor and Employment Franklin H. Drilon and Acting Secretary of
Labor and Employment Dionisio D. de la Serna, respectively. cdrep

Culled from the records are the following facts which led to the filing of the instant petition:

On September 6, 1984, Med-Arbiter Bienvenido C. Elorcha certified the Divine Word University Employees Union (DWUEU) as the
sole and exclusive bargaining agent of the Divine Word University (University for brevity). On March 7, 1985, DWUEU submitted its
collective bargaining proposals. On March 26, 1985, the University replied and requested a preliminary conference to be held on May
28, 1985. However, two days before the scheduled conference or on May 26, 1985, DWUEU's resigned vice-president Mr. Brigido
Urminita (or Urmeneta) wrote a letter addressed to the University unilaterally withdrawing the CBA proposals. Consequently, the
preliminary conference was cancelled. 2

After almost three years, or on March 11, 1988, DWUEU, which had by then affiliated with the Associated Labor Union, 3 requested a
conference with the University for the purpose of continuing the collective bargaining negotiations. 4 Not having heard from the
University, DWUEU-ALU sent a follow-up letter on March 23, 1988 reiterating its request for a conference and warning the University
against committing acts of interference through its various meetings with both the academic and non-academic employees regarding
their union affiliation and activities. Despite the letter, the University persisted in maintaining silence.

On April 25, 1988, DWUEU-ALU filed with the National Conciliation and Mediation Board of the Department of Labor and Employment
a notice of strike on the grounds of bargaining deadlock and unfair labor practice acts, specifically, refusal to bargain, discrimination
and coercion on (sic) employees. 5 The conferences which were held after the filing of the notice of strike led to the conclusion of an
agreement between the University and DWUEU-ALU on May 10, 1888 with the following terms: cdphil

"1. Union will submit their (sic) CBA proposals on Friday, May 13, 1988 for whatever action management will
take.

2. Union and management agrees (sic) to sit down and determine (sic) the number of employees that will
represent their bargaining unit.

3. Conciliation proceedings is (sic) temporarily suspended until the parties inform this office of further
development.

4. The issues of discrimination: re Ms. Colinayo and Ms. Cinco Flores is settled.

5. Issue (sic) on coercion and refusal to bargain shall be subject of continuing dialogue.

6. Atty. Jacinto shall be given 10 days notice in the next conciliation meeting." 6

However, it turned out that an hour before the May 10, 1988 agreement was concluded, the University had filed a petition for
certification election with the Region VIII office of the Department of Labor and Employment. 7

On the other hand, on May 19, 1988, DWUEU-ALU, consonant with the agreement, submitted its collective bargaining proposals.
These were ignored by the University. Thereafter, through the National Conciliation and Mediation Board (NCMB) of Region VIII,
marathon conciliation conferences were conducted but to no avail. Hence, on August 25, 1988, then Secretary of Labor Franklin M.
Drilon, exercising his powers under Art. 263(g) of the Labor Code, issued an Order assuming jurisdiction over the labor dispute and
directing all striking workers to report back to work within twenty-four (24) hours and the management to accept them back under
the same terms and conditions prevailing prior to the work stoppage. The Secretary also designated the NCMB to hear the case and
to submit its report thereon. 8

On the same day, Med-Arbiter Rodolfo S. Milado, acting on the University's petition for certification election, issued an Order
directing the conduct of a certification election to be participated in by DWUEU-ALU and "no union," after he found the petition to be
"well-supported in fact and in law." 9
Said Order prompted the DWUEU-ALU to file with the Secretary of Labor an urgent motion seeking to enjoin Milado from further
acting on the matter of the certification election. On September 20, 1988, the Labor Secretary granted said motion and directed
Milado to hold in abeyance any and all certification election proceedings at the University pending the resolution of the labor
dispute. 10 The Labor Secretary's Order, predicated on his extraordinary powers under Art. 263 (g) of the Labor Code, conformed
with this Court s Resolution of October 29, 1987 in the Bulletin Today cases (G.R. Nos. 79276 and 79883) where the issue of strong
disagreement among the parties on the question of representation was deemed subsumed in the labor dispute certified for
compulsory arbitration. The Secretary added:

"Underscoring the necessity to conform with this settled doctrine is the fact that the dispute over which this
Office assumed jurisdiction arose from the alleged continued refusal by the University to negotiate a CBA with
the Union despite the latter's certification as exclusive bargaining agent in 1984. Necessarily related thereto is
the representativity issue raised by the University in its certification election petition. The resolution of these
issues in one proceeding is, in the words of the Supreme Court, 'meet and proper in view of the very special
circumstances obtaining in this case, and will prevent split jurisdiction and that multiplicity of proceedings which
the law abhors' (24 December 1987 [should be December 17, 1987] resolution of the Supreme Court in the
Bulletin Today cases, supra). Cdpr

Moreover, to allow a certification election to proceed at this point in time might further rupture the already
strained labor-management relations pervading at the University. The assumption order issued by this Office
merely served as a temporary bond to hold together such a fragile relationship. More importantly, the projected
election hastily decreed would preempt the proper resolution of the issues raised and pursued so zealously by
the employees that prompted them to stage their strike." 11

The NCMB of Region VIII conducted hearings on the case from October 17-18, 1988. On October 26, 1988, the Divine Word
University Independent Faculty and Employees Union (DWUIFEU), which was registered earlier that day, filed a motion for
intervention alleging that it had "at least 20% of the rank and file employees" of the University. 12

Exercising once again his extraordinary powers under Art. 263(g) of the Labor Code, the Secretary consolidated "the entire labor
dispute including all incidents arising therefrom, or necessarily related thereto" in his Order of May 23, 1989 13 and the following
cases were "subsumed or consolidated to the labor dispute": the petition for certification election docketed as MED-ARB-Case No. 5-
04-88, the DWUEU's complaint docketed as NLRC Case No. 8-0321-88, and the University's complaint docketed as NLRC Case No. 8-
0323-88. Thus, in said Order of May 23, 1989, the Secretary of Labor resolved these issues: "(1) whether there was refusal to
bargain and an impasse in bargaining; (2) whether the complaints for unfair labor practices against each other filed by both parties,
including the legality of the strike with the NLRC, which later on was subsumed by the assumption Order, are with merits; and, (3)
whether or not the certification election can be passed upon by this Office."

On the first issue, the Secretary of Labor said:

"It is a matter of record that when the Union filed its Notice of Strike (Exh. A) two of the issues it raised were
bargaining deadlock and refusal to bargain. It is also worth mentioning that the CBA proposals by the Union were
submitted on March 7, 1985 (Exh. 9) after Med-Arbiter Bienvenido Elorcha issued a certification election Order
dated September 6, 1984 (Exh. 4). An examination of the CBA proposals submitted by the Union of the
University showed there was (sic) some negotiations that has (sic) taken place as indicated on the handwritten
notations made in the CBA proposal (Exh. F). The said proposals include among others, union scope, union
recognition, union security, union rights, job security, practices and privileges, terms and conditions of work,
leave of absence, hours of work, compensation salary and wages, workers' rights and safety, workers' education,
retirement longevity pay, strike and lockouts and grievance machinery.

The said CBA proposals were indorsed by DWU President to Atty. Generosa R. Jacinto, Divine Word University
legal counsel together with a copy of the Union CBA proposals. The submission of the CBA proposals and the
reply letter of the DWU counsel, dated March 26, 1985 to the Union indicated that the CBA negotiations process
was set into motion. DWU's counsel even suggested that the preliminary conference between the union and the
university be scheduled on 28 May 1985 at 2:30 P.M. which unfortunately did not take place due to the alleged
withdrawal of the CBA proposals.

Undeniably, the Union and the DWU have not been able to conclude a CBA since its certification on 6 September
1984 by then Med-Arbiter Bienvenido Elorcha. But the non-conclusion of a CBA within one year, as in this case,
does not automatically authorize the holding of a certification election when it appears that a bargaining deadlock
issue has been submitted to conciliation by the certified bargaining agent. The records show that the Notice of
Strike was filed by the Union on 25 April 1988, citing bargaining deadlock as one of the grounds (Annex '1'),
while the Petition for Certification Election was filed by the DWU on 10 May 1988. The filing of the notice of strike
was precipitated by the University's act of not replying to the Union's letters of March 11 and March 23, 1988.

This being the case, Section 3, Rule V, Book V of the Rules Implementing the Labor Code applies and we
quote: LibLex

'Sec. 3. When to file. In the absence of a collective bargaining agreement submitted in

accordance with Article 231 of the Code, a petition for certification election may be filed at any time.
However, no certification election may be held within one year from the date of issuance of declaration
of a final certification election result. Neither may a representation question be entertained it (sic)
before the filing of a petition for certification election, a bargaining deadlock to which an incumbent or
certified bargaining agent is a party has been submitted to conciliation or arbitration or had become the
subject of a valid notice of strike or lockout.'

Clearly, a bargaining deadlock exists and as a matter of fact this is being conciliated by the National Conciliation
and Mediation Board at the time the University filed its Petition for Certification Election on 10 May 1988. In fact
the deadlock remained unresolved and was in fact mutually agreed upon to be conciliated further by the NCMB
as per items 1 and 5 of the 'Agreement' (Exhibit 'L').

The aforequoted rule clearly barred the Med-Arbiter from further entertaining the petition for certification
election. Furthermore, the various communications sent to the University by the Union prior to the filing of the
notice of strike was enough opportunity for the former to raise the issue of representation if it really casts doubt
to the majority status of the Union. More importantly, if DWU indeed doubted the status of the union, how come
it entered into an agreement with the latter on May 10, 1988. Apparently, the move to file the petition on the
same day was an afterthought on the part of the University which this Office considers as fatal." 14

The same Order dismissed not only the case filed by DWUEU-ALU for unfair labor practice on the ground of the union's failure to
prove the commission of the unfair labor practice acts specifically complained of (NLRC Case No. 8-0321-88) but also the complaint
filed by the University for unfair labor practices and illegal strike for "obvious lack of merit brought about by its utter failure to submit
evidence" (NLRC Case No. 8-0323-88).
Citing the Bulletin Today cases, the said Order pronounced as untenable the University's claim that the assumption Order earlier
issued by the Office of the Secretary of Labor merely held in abeyance the holding of a certification election and that the
representation issue was not deemed consolidated by virtue of the said assumption Order. Accordingly, the Order has this dispositive
portion:

"WHEREFORE, ALL THE FOREGOING PREMISES CONSIDERED, the Divine Word University of Tacloban and the
Divine Word University Employees Union are hereby directed to enter into a collective bargaining agreement by
adopting the Union's CBA proposals sent to the DWU President on 19 May 1988 (Exhibit '6'). DWU is hereby
warned that any unwarranted delay in the execution of the collective bargaining agreement will be construed as
an unfair labor practice act. Moreover, the petition for certification election filed by the University is hereby
dismissed for lack of merit and the Order of Med-Arbiter Rodolfo Milado set aside. Likewise, NLRC CASES Nos. 8-
0321-88 and 8-0323 filed by the Union and the DWU, respectively, are hereby dismissed for lack of merit.

SO ORDERED." 15

The University filed a motion for the reconsideration of said Order. It was opposed by the DWUEU-ALU. However, since on May 5,
1989 the DWUEU-ALU had filed a second notice of strike charging the University with violation of the return-to-work order of the
Secretary of Labor and unfair labor practices such as dismissal of union officers, coercion of employees and illegal suspension, 16 the
Office of the Secretary called for a series of conciliation and mediation conferences between the parties. At the July 5, 1989
conference, the University agreed to submit its proposals on how to settle amicably the labor dispute on or before July 17, 1989.

On said date, however, the University failed to appear. Instead, its representative phoned in a request for the resetting of the
conference purportedly because its Board of Directors had failed to muster a quorum. Hence, after so informing ALU's Eastern
Visayas Vice-President, the conference was rescheduled for July 19, 1989. The University once again failed to appear. LLjur

In view of the University's intransigence, the DWUEU-ALU pursued its second notice of strike on November 24, 1989. Four days later,
the University filed with the Office of the Secretary of Labor a motion praying that said Office assume jurisdiction over the dispute or
certify the same to the NLRC for compulsory arbitration on the ground that the strike affected not only the University but also its
other academic and non-academic employees, the students and their parents. On December 4, 1989, the Office of the Secretary of
Labor received a Resolution passed by the students of the University urging said Office's assumption of jurisdiction over the labor
dispute and the earliest resolution of the case.

Consequently, on December 29, 1989, Secretary Drilon issued an Order reiterating the August 28, 1988 Order which assumed
jurisdiction over the labor dispute. He ordered all striking workers to return to work within 24 hours and the University to accept
them back under the same terms and conditions of employment; deemed the issues raised in the May 5, 1989 notice of strike as
"subsumed in this case"; ordered the Director of Regional Office No. VIII to hear the issues raised in said notice of strike and to
submit his findings and recommendations within ten days from submission of the case by the parties, and enjoined the parties to
cease and desist from any act that may "aggravate the employer-employee relationship."

On January 17, 1990, Acting Secretary of Labor Dionisio L. de la Serna, "dismissed" for lack of merit the University's motion for
reconsideration and affirmed the Order of May 23, 1989. He noted the fact that the March 7, 1985 collective bargaining proposals of
the DWUEU had not been validly withdrawn as the union's Vice-President had resigned and the withdrawal was signed only by three
of the eight members of the Executive Board of said union. Granting that the withdrawal was valid, the Acting Secretary believed
that it did not "exculpate the University from the duty to bargain with the Union" because the collective bargaining processes had
been "set in motion from the time the CBA proposals was (sic) received by the University until the impasse took place on account of
its failure to reply to the Union's letters pursuing its CBA Proposals dated March 11 and 23, 1988."

On the University's assertion that no negotiations took place insofar as the March 7, 1985 collective bargaining proposals are
concerned, the Acting Secretary found that:

". . . The records indicate otherwise. Conciliation meetings were conducted precisely to discuss the CBA
proposals the Union submitted to the University on March 7, 1985. As a matter of fact, the University admitted
the existence of the deadlock when a provision was incorporated in the agreement it signed on May 10, 1988
with the Union which reads:

'a. That on the matter of Bargaining Deadlock —

1. Union will submit their (renewed) CBA proposals on Friday May 13, 1988 for whatever action
management will take.

2. Union and Management agree to sit down and determine the number of employees that will
represent (constitute) their bargaining unit;

xxx xxx xxx'

On account of the deadlock regarding the March 7, 1985 CBA proposals, it was agreed that the Union submit a
renewed CBA proposal which it did on May 19, 1988. The records indicate that no response was made by the
University. The uncooperative posture of the University to respond and continue with the negotiations could very
well be explained when one (1) hour prior to the start of the conciliation on May 10, 1988, the University filed a
Petition for Certification with (sic) Regional Office. The surreptitious filing of the petition and at the same time
cunningly entering into an agreement which required the Union to submit a renewed CBA proposal, is patently
negotiating in bad faith. The University should have candidly and timely raised the issue of representation, if it
believed that such issue was valid, not by entering into an agreement. The May 10, 1988 Agreement only served
to falsely heighten the expectations of the Union and this Office that a mutually acceptable settlement of the
dispute was in the offing. This Office cannot tolerate such actuations by the University." 17

The Acting Secretary then concluded that for reneging on the agreement of May 10, 1988 and for its "reluctance and subscription to
legal delay," the University should be "declared in default." He also maintained that since under the circumstances the University
cannot claim deprivation of due process, the Office of the Secretary of Labor may rightfully impose the Union's May 19, 1988
collective bargaining agreement proposals motu proprio. On the University's contention that the motion for intervention of the DWU-
IFEU was not resolved, the Acting Secretary ruled that said motion was in effect denied when the petition for certification election
filed by the University was dismissed in the Order of May 23, 1989. cdrep

Hence, the University had recourse to instant petition.

In its petition for certiorari and prohibition with preliminary injunction filed on February 9, 1990, the University raises as grounds
therefor the following:

"A. Respondent Secretary committed grave and patent abuse of discretion amounting to lack of jurisdiction in
issuing his order dated 17 January 1990 finally denying petitioner's motion for reconsideration in the face of the
order dated 29 December 1989 and subsequent acts of DOLE official subsuming the second notice of strike with
the first notice of strike.
 B. In the absence of a certified CBA and there having been no certification election held in petitioner unit for
more than five (5) years, a certification election is mandatory.

C. Respondent Secretary committed grave and patent abuse of discretion in issuing his orders dated 23 May
1989 and 17 January 1990 disregarding evidence on record, provisions of law and established jurisprudence.

D. Petitioner was denied due process." 18

Citing the dispositive portion of the December 29, 1989 Order of the Secretary of Labor which states that the issues raised in the
May 5, 1989 notice of strike "are ordered subsumed in this case" and elaborating on the meaning of the word "subsume," i.e., "to
include within a larger class, group, order, etc.," 19 the petitioner University argues that the Secretary of Labor "cannot resolve
petitioner's and (intervenor) DWU-IFEU's motions for reconsideration (in the NS. 1) of the Order dated 23 May 1989 until the
proceedings in the subsumed NS. 2 are terminated." It opines that since the Regional Director is an extension of the Secretary of
Labor, the latter should have waited for the recommendation of the former on the issues in notices of strike nos. 1 and 2 before the
he issued the Order of January 17, 1990.

We agree with the Acting Secretary of Labor's observation that the action for intervention had in effect been denied by the dismissal
of the petition for certification election in the May 23, 1989 Order. The sub silencio treatment of the motion for intervention in said
Order does not mean that the motion was overlooked. It only means, as shown by the findings of facts in the same Order, that there
was no necessity for the holding of a certification election wherein the DWU-IFEU could participate. In this regard, petitioner's undue
interest in the resolution of the DWU-IFEU's motion for intervention becomes significant since a certification election is the sole
concern of employees except where the employer itself has to file a petition for certification election. But once an employer has filed
said petition, as the petitioner did in this case, its active role ceases and it becomes a mere bystander. Any uncalled-for concern on
the part of the employer may give rise to the suspicion that it is batting for a company union. 20

Petitioner's contention that the Acting Secretary of Labor should have deferred the issuance of the Order of January 17, 1990 until
after his receipt of the Regional Director's recommendation on the notices of strike is, under the circumstances, untenable. Ideally, a
single decision or order should settle all controversies resulting from a labor dispute. This is in consonance with the principle of
avoiding multiplicity of suits. However, the exigencies of a case may also demand that some matters be threshed out and resolved
ahead of the others. Any contrary interpretation of the Secretary of Labor's powers under Art. 263(g) of the Labor Code on this
matter would only result in confusion and delay in the resolution of the manageable aspects of the labor dispute. llcd

In this case, resolution of the motion for reconsideration at the earliest possible time was urgently needed to set at rest the issues
regarding the first notice of strike, the certification election and the unfair labor practice cases filed by the University and the
DWUEU-ALU. The nature of the business of the University demanded immediate and effective action on the part of the respondent
public officials. Otherwise, not only the contending parties in the dispute would be adversely affected but more importantly, the
studentry and their parents. It should be emphasized that on January 17, 1990, the second notice of strike could not have been
resolved as yet considering that at that time, Regional Director Teddy S. Cabeltes was still conducting the conference between the
parties in pursuance of the directive in the Order of December 19, 1989. The Secretary, or for that matter, the Acting Secretary,
could not have intended the efforts of the Regional Director to be inutile or fruitless. Thus, when he set aside the issues raised in the
second notice of strike, the Acting Secretary was acting in accordance with the exigencies of the circumstances of the case. Hardly
can it be said to be an abuse of his discretion.

On the issue of whether or not a certification election should have been ordered by the Secretary of Labor, pertinent are the
following respective provisions of the Labor Code and Rule V, Book V of the Implementing Rules and Regulations of the same Code:

"ART. 258. When an employer may file petition. — When requested to bargain collectively, an employer may
petition the Bureau for an election. If there is no existing certified collective bargaining agreement in the unit,
the Bureau shall, after hearing, order a certification election.

All certification cases shall be decided within twenty (20) working days.

The Bureau shall conduct a certification election within twenty (20) days in accordance with the rules and
regulations prescribed by the Secretary of Labor.

Sec. 3. When to file. — In the absence of a collective bargaining agreement duly registered in accordance with
Article 231 of the Code, a petition for certification election may be filed at any time. However, no certification
election may be held within one year from the date of issuance of a final certification election result. Neither may
a representation question be entertained if, before the filing of a petition for certification election, a bargaining
deadlock to which an incumbent or certified bargaining agent is a party had been submitted to conciliation or
arbitration or had become the subject of valid notice of strike or lockout. (Emphasis supplied)

If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a
petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior
to the expiry date of such agreement."

These provisions make it plain that in the absence of a collective bargaining agreement, an employer who is requested to bargain
collectively may file a petition for certification election any time except upon a clear showing that one of these two instances exists:
(a) the petition is filed within one year from the date of issuance of a final certification election result or (b) when a bargaining
deadlock had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.

While there is no question that the petition for certification election was filed by the herein petitioner after almost four years from the
time of the certification election and, therefore, there is no question as to the timeliness of the petition, the problem appears to lie in
the fact that the Secretary of Labor had found that a bargaining deadlock exists. llcd

A "deadlock" is defined as the "counteraction of things producing entire stoppage: a state of inaction or of neutralization caused by
the opposition of persons or of factions (as in government or a voting body): standstill." 21 There is a deadlock when there is a
"complete blocking or stoppage resulting from the action of equal and opposed forces; as, the deadlock of a jury or
legislature." 22 The word is synonymous with the word impasse 23 which, within the meaning of the American federal labor laws,
"presupposes reasonable effort at good faith bargaining which, despite noble intentions, does not conclude in agreement between the
parties." 24

A thorough study of the records reveals that there was no "reasonable effort at good faith bargaining" specially on the part of the
University. Its indifferent attitude towards collective bargaining inevitably resulted in the failure of the parties to arrive at an
agreement. As it was evident that unilateral moves were being undertaken only by the DWUEU-ALU, there was no "counteraction" of
forces or an impasse to speak of. While collective bargaining should be initiated by the union, there is a corresponding responsibility
on the part of the employer to respond in some manner to such acts. This is clear from the provisions of the Labor Code Art. 250(a)
of which states:
 "ART. 250. Procedure in collective bargaining. — The following procedures shall be observed in collective
bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a
statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from
receipt of such notice.

(b) Should differences arise on the basis of such notice and reply, either party may request for a conference
which shall begin not later than ten (10) calendar days from the date of request.

(c) If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own
initiative and immediately call the parties to conciliation meetings. The Board shall have the power to issue
subpoenas requiring the attendance of the parties to such meetings. It shall be the duty of the parties to
participate fully and promptly in the conciliation meetings the Board may call;

(d) During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may
disrupt or impede the early settlement of the disputes; and prLL

(e) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to
a voluntary arbitrator."

Considering the procedure outlined above, the Court cannot help but notice that the DWUEU was not entirely blameless in the matter
of the delay in the bargaining process. While it is true that as early as March 7, 1985, said union had submitted its collective
bargaining proposals and that, its subsequent withdrawal by the DWUEU Vice-President being unauthorized and therefore ineffective,
the same proposals could be considered as subsisting, the fact remains that said union remained passive for three years. The records
do not show that during this three-year period, it exerted any effort to pursue collective bargaining as a means of attaining better
terms of employment.

It was only after its affiliation with the ALU that the same union, through the ALU Director for Operations, requested an "initial
conference" for the purpose of collective bargaining. 25 That the DWUEU abandoned its collective bargaining proposals prior to its
affiliation with ALU is further confirmed by the fact that in the aforequoted May 10, 1988 agreement with the University, said Union
bound itself to submit a new set of proposals on May 13, 1988. Under the circumstances, the agreement of May 10, 1988 may as
well be considered the written notice to bargain referred to in the aforequoted Art. 250(a) of the Labor Code, which thereby set into
motion the machinery for collective bargaining, as in fact, on May 19, 1988, DWUEU-ALU submitted its collective bargaining
proposals.

Be that as it may, the Court is not inclined to rule that there has been a deadlock or an impasse in the collective bargaining process.
As the Court earlier observed, there has not been a "reasonable effort at good faith bargaining" on the part of the University. While
DWUEU-ALU was opening all possible avenues for the conclusion of an agreement, the record is replete with evidence on the
University's reluctance and thinly disguised refusal to bargain with the duly certified bargaining agent, such that the inescapable
conclusion is that the University evidently had no intention of bargaining with it. Thus, while the Court recognizes that technically,
the University has the right to file the petition for certification election as there was no bargaining deadlock to speak of, to grant its
prayer that the herein assailed Orders be annulled would put an unjustified premium on bad faith bargaining.

Bad faith on the part of the University is further exemplified by the fact that an hour before the start of the May 10, 1988
conference, it surreptitiously filed the petition for certification election. And yet during said conference, it committed itself to "sit
down" with the Union. Obviously, the University tried to preempt the conference which would have legally foreclosed its right to file
the petition for certification election. In so doing, the University failed to act in accordance with Art. 252 of the Labor Code which
defines the meaning of the duty to bargain collectively as "the performance of a mutual obligation to meet and convene promptly
and expeditiously in good faith." Moreover, by filing the petition for certification election while agreeing to confer with the DWUEU-
ALU, the University violated the mandate of Art. 19 of the Civil Code that "(e)very person must, in the exercise of his rights and in
the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith."

Moreover, the University's unscrupulous attitude towards the DWUEU-ALU is also betrayed by its belated questioning of the status of
the said union. The communications between them afforded the University ample opportunity to raise the issue of representation if
indeed it was doubtful of the DWUEU-ALU's status as a majority union, but it failed to do so. On the other hand, in the agreement of
May 10, 1988, the University even agreed "to sit down and determine the number of employees that will represent their bargaining
unit." This clearly indicates that the University recognized the DWUEU-ALU as the bargaining representative of the employees and is,
therefore, estopped from questioning the majority status of the said union. prLL

Hence, petitioner's contention that the DWUEU-ALU's proposals may not be unilaterally imposed on it on the ground that a collective
bargaining agreement is a contract wherein the consent of both parties is indispensable is devoid of merit. A similar argument had
already been disregarded in the case of Kiok Loy v. NLRC, 26 where we upheld the order of the NLRC declaring the union's draft CBA
proposal as the collective agreement which should govern the relationship between the parties. Kiok Loy v. NLRC is applicable in the
instant case considering that the facts therein have also been indubitably established in this case. These factors are: (a) the union is
the duly certified bargaining agent; (b) it made a definite request to bargain and submitted its collective bargaining proposals, and
(c) the University made no counter proposal whatsoever. As we said in Kiok Loy, "[a] company's refusal to make counter proposal if
considered in relation to the entire bargaining process, may indicate bad faith and this is especially true where the Union's request
for a counter proposal is left unanswered." 27 Moreover, the Court added in the same case that "it is not obligatory upon either side
of a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should not be tolerated and
allowed with impunity to resort to schemes feigning negotiations by going through empty gestures." 28

That being the case, the petitioner may not validly assert that its consent should be a primordial consideration in the bargaining
process. By its acts, no less than its inaction which bespeak its insincerity, it has forfeited whatever rights it could have asserted as
an employer. We, therefore, find it superfluous to discuss the two other contentions in its petition.

WHEREFORE, the instant petition is hereby DISMISSED for lack of merit. This decision is immediately executory. Costs against the
petitioner.

SO ORDERED.

Bidin, Davide, Jr. and Melo, JJ ., concur.

Gutierrez, Jr., J ., is on leave.

||| (Divine Word University of Tacloban v. Secretary of Labor and Employment, G.R. No. 91915, [September 11, 1992], 288 PHIL
667-688)
 39. SECOND DIVISION

[G.R. No. 146728. February 11, 2004.]

GENERAL MILLING CORPORATION, petitioner, vs. HON. COURT OF APPEALS, GENERAL MILLING
CORPORATION INDEPENDENT LABOR UNION (GMC-ILU), and RITO MANGUBAT, respondents.

DECISION

QUISUMBING, J p:

Before us is a petition for certiorari assailing the decision 1 dated July 19, 2000, of the Court of Appeals in CA-G.R. SP No. 50383,
which earlier reversed the decision 2dated January 30, 1998 of the National Labor Relations Commission (NLRC) in NLRC Case No. V-
0112-94.

The antecedent facts are as follows:

In its two plants located at Cebu City and Lapu-Lapu City, petitioner General Milling Corporation (GMC) employed 190 workers. They
were all members of private respondent General Milling Corporation Independent Labor Union (union, for brevity), a duly certified
bargaining agent.

On April 28, 1989, GMC and the union concluded a collective bargaining agreement (CBA) which included the issue of representation
effective for a term of three years. The CBA was effective for three years retroactive to December 1, 1988. Hence, it would expire on
November 30, 1991. SIcEHC

On November 29, 1991, a day before the expiration of the CBA, the union sent GMC a proposed CBA, with a request that a counter-
proposal be submitted within ten (10) days.

As early as October 1991, however, GMC had received collective and individual letters from workers who stated that they had
withdrawn from their union membership, on grounds of religious affiliation and personal differences. Believing that the union no
longer had standing to negotiate a CBA, GMC did not send any counter-proposal.

On December 16, 1991, GMC wrote a letter to the union's officers, Rito Mangubat and Victor Lastimoso. The letter stated that it felt
there was no basis to negotiate with a union which no longer existed, but that management was nonetheless always willing to
dialogue with them on matters of common concern and was open to suggestions on how the company may improve its
operations. aDHScI

In answer, the union officers wrote a letter dated December 19, 1991 disclaiming any massive disaffiliation or resignation from the
union and submitted a manifesto, signed by its members, stating that they had not withdrawn from the union.

On January 13, 1992, GMC dismissed Marcia Tumbiga, a union member, on the ground of incompetence. The union protested and
requested GMC to submit the matter to the grievance procedure provided in the CBA. GMC, however, advised the union to "refer to
our letter dated December 16, 1991." 3

Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC, Arbitration Division, Cebu City. The complaint alleged
unfair labor practice on the part of GMC for: (1) refusal to bargain collectively; (2) interference with the right to self-organization;
and (3) discrimination. The labor arbiter dismissed the case with the recommendation that a petition for certification election be held
to determine if the union still enjoyed the support of the workers.

The union appealed to the NLRC.

On January 30, 1998, the NLRC set aside the labor arbiter's decision. Citing Article 253-A of the Labor Code, as amended by Rep. Act
No. 6715, 4 which fixed the terms of a collective bargaining agreement, the NLRC ordered GMC to abide by the CBA draft that the
union proposed for a period of two (2) years beginning December 1, 1991,: the date when the original CBA ended, to November 30,
1993. The NLRC also ordered GMC to pay the attorney's fees. 5

In its decision, the NLRC pointed out that upon the effectivity of Rep. Act No. 6715, the duration of a CBA, insofar as the
representation aspect is concerned, is five (5) years which, in the case of GMC-Independent Labor Union was from December 1,
1988 to November 30, 1993. All other provisions of the CBA are to be renegotiated not later than three (3) years after its execution.
Thus, the NLRC held that respondent union remained as the exclusive bargaining agent with the right to renegotiate the economic
provisions of the CBA. Consequently, it was unfair labor practice for GMC not to enter into negotiation with the union.

The NLRC likewise held that the individual letters of withdrawal from the union submitted by 13 of its members from February to
June 1993 confirmed the pressure exerted by GMC on its employees to resign from the union. Thus, the NLRC also found GMC guilty
of unfair labor practice for interfering with the right of its employees to self-organization.

With respect to the union's claim of discrimination, the NLRC found the claim unsupported by substantial evidence.

On GMC's motion for reconsideration, the NLRC set aside its decision of January 30, 1998, through a resolution dated October 6,
1998. It found GMC's doubts as to the status of the union justified and the allegation of coercion exerted by GMC on the union's
members to resign unfounded. Hence, the union filed a petition for certioraribefore the Court of Appeals. For failure of the union to
attach the required copies of pleadings and other documents and material portions of the record to support the allegations in its
petition, the CA dismissed the petition on February 9, 1999. The same petition was subsequently filed by the union, this time with
the necessary documents. In its resolution dated April 26, 1999, the appellate court treated the refiled petition as a motion for
reconsideration and gave the petition due course.

On July 19, 2000, the appellate court rendered a decision the dispositive portion of which reads:

WHEREFORE, the petition is hereby GRANTED. The NLRC Resolution of October 6, 1998 is hereby SET ASIDE,
and its decision of January 30, 1998 is, except with respect to the award of attorney's fees which is hereby
deleted, REINSTATED. 6

A motion for reconsideration was seasonably filed by GMC, but in a resolution dated October 26, 2000, the CA denied it for lack of
merit.

Hence, the instant petition for certiorari alleging that:

 I

THE COURT OF APPEALS DECISION VIOLATED THE CONSTITUTIONAL RULE THAT NO DECISION SHALL BE
RENDERED BY ANY COURT WITHOUT EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE FACTS AND THE
LAW ON WHICH IT IS BASED. ETHIDa

II

THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN REVERSING THE DECISION OF THE
NATIONAL LABOR RELATIONS COMMISSION IN THE ABSENCE OF ANY FINDING OF SUBSTANTIAL ERROR OR
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION.

III

THE COURT OF APPEALS COMMITTED SERIOUS ERROR IN NOT APPRECIATING THAT THE NLRC HAS NO
JURISDICTION TO DETERMINE THE TERMS AND CONDITIONS OF A COLLECTIVE BARGAINING AGREEMENT. 7

Thus, in the instant case, the principal issue for our determination is whether or not the Court of Appeals acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in (1) finding GMC guilty of unfair labor practice for violating the duty to bargain
collectively and/or interfering with the right of its employees to self-organization, and (2) imposing upon GMC the draft CBA
proposed by the union for two years to begin from the expiration of the original CBA.

On the first issue, Article 253-A of the Labor Code, as amended by Rep. Act No. 6715, states:

ART. 253-A. Terms of a collective bargaining agreement. — Any Collective Bargaining Agreement that the parties
may enter into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No
petition questioning the majority status of the incumbent bargaining agent shall be entertained and no
certification election shall be conducted by the Department of Labor and Employment outside of the sixty-day
period immediately before the date of expiry of such five year term of the Collective Bargaining Agreement. All
other provisions of the Collective Bargaining Agreement shall be renegotiated not later than three (3) years after
its execution. . . .

The law mandates that the representation provision of a CBA should last for five-years. The relation between labor and management
should be undisturbed until the last 60 days of the fifth year. Hence, it is indisputable that when the union requested for a
renegotiation of the economic terms of the CBA on November 29, 1991, it was still the certified collective bargaining agent of the
workers, because it was seeking said renegotiation within five (5) years from the date of effectivity of the CBA on December 1, 1988.
The union's proposal was also submitted within the prescribed 3-year period from the date of effectivity of the CBA, albeit just before
the last day of said period. It was obvious that GMC had no valid reason to refuse to negotiate in good faith with the union. For
refusing to send a counter-proposal to the union and to bargain anew on the economic terms of the CBA, the company committed an
unfair labor practice under Article 248 of the Labor Code, which provides that:

ART. 248. Unfair labor practices of employers. — It shall be unlawful for an employer to commit any of the
following unfair labor practice:

(g) To violate the duty to bargain collectively as prescribed by this Code;

Article 252 of the Labor Code elucidates the meaning of the phrase "duty to bargain collectively," thus:

ART. 252. Meaning of duty to bargain collectively. — The duty to bargain collectively means the performance of a
mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating
an agreement. . . .

We have held that the crucial question whether or not a party has met his statutory duty to bargain in good faith typically turns on
the facts of the individual case. 8There is no per se test of good faith in bargaining. 9 Good faith or bad faith is an inference to be
drawn from the facts. 10 The effect of an employer's or a union's actions individually is not the test of good-faith bargaining, but the
impact of all such occasions or actions, considered as a whole. 11

Under Article 252 abovecited, both parties are required to perform their mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement. The union lived up to this obligation when it presented
proposals for a new CBA to GMC within three (3) years from the effectivity of the original CBA. But GMC failed in its duty under
Article 252. What it did was to devise a flimsy excuse, by questioning the existence of the union and the status of its membership to
prevent any negotiation.

It bears stressing that the procedure in collective bargaining prescribed by the Code is mandatory because of the basic interest of the
state in ensuring lasting industrial peace. Thus:

ART. 250. Procedure in collective bargaining. — The following procedures shall be observed in collective
bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a
statements of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days
from receipt of such notice. (Emphasis supplied.)

GMC's failure to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in bargaining
with the union. Its excuse that it felt the union no longer represented the workers, was mainly dilatory as it turned out to be utterly
baseless. IDSaTE

We hold that GMC's refusal to make a counter-proposal to the union's proposal for CBA negotiation is an indication of its bad faith.
Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the
duty to bargain collectively. 12

Failing to comply with the mandatory obligation to submit a reply to the union's proposals, GMC violated its duty to bargain
collectively, making it liable for unfair labor practice. Perforce, the Court of Appeals did not commit grave abuse of discretion
amounting to lack or excess of jurisdiction in finding that GMC is, under the circumstances, guilty of unfair labor practice.

Did GMC interfere with the employees' right to self-organization? The CA found that the letters between February to June 1993 by 13
union members signifying their resignation from the union clearly indicated that GMC exerted pressure on its employees. The records
show that GMC presented these letters to prove that the union no longer enjoyed the support of the workers. The fact that the
resignations of the union members occurred during the pendency of the case before the labor arbiter shows GMC's desperate
attempts to cast doubt on the legitimate status of the union. We agree with the CA's conclusion that the ill-timed letters of
resignation from the union members indicate that GMC had interfered with the right of its employees to self-organization. Thus, we
hold that the appellate court did not commit grave abuse of discretion in finding GMC guilty of unfair labor practice for interfering
with the right of its employees to self-organization.

Finally, did the CA gravely abuse its discretion when it imposed on GMC the draft CBA proposed by the union for two years
commencing from the expiration of the original CBA?

The Code provides:

ART. 253. Duty to bargain collectively when there exists a collective bargaining agreement — It shall be the duty
of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the
existing agreement during the 60-day period [prior to its expiration date] and/or until a new agreement is
reached by the parties. (Emphasis supplied.)

The provision mandates the parties to keep the status quo while they are still in the process of working out their respective proposal
and counter proposal. The general rule is that when a CBA already exists, its provision shall continue to govern the relationship
between the parties, until a new one is agreed upon. The rule necessarily presupposes that all other things are equal. That is, that
neither party is guilty of bad faith. However, when one of the parties abuses this grace period by purposely delaying the bargaining
process, a departure from the general rule is warranted.

In Kiok Loy vs. NLRC, 13 we found that petitioner therein, Sweden Ice Cream Plant, refused to submit any counter proposal to the
CBA proposed by its employees' certified bargaining agent. We ruled that the former had thereby lost its right to bargain the terms
and conditions of the CBA. Thus, we did not hesitate to impose on the erring company the CBA proposed by its employees' union —
lock, stock and barrel. Our findings in Kiok Loy are similar to the facts in the present case, to wit:

. . . petitioner Company's approach and attitude — stalling the negotiation by a series of postponements, non-
appearance at the hearing conducted, and undue delay in submitting its financial statements, lead to no other
conclusion except that it is unwilling to negotiate and reach an agreement with the Union. Petitioner has not at
any instance, evinced good faith or willingness to discuss freely and fully the claims and demands set forth by
the Union much less justify its objection thereto. 14

Likewise, in Divine Word University of Tacloban vs. Secretary of Labor and Employment, 15 petitioner therein, Divine Word
University of Tacloban, refused to perform its duty to bargain collectively. Thus, we upheld the unilateral imposition on the university
of the CBA proposed by the Divine Word University Employees Union. We said further:

That being the said case, the petitioner may not validly assert that its consent should be a primordial
consideration in the bargaining process. By its acts, no less than its action which bespeak its insincerity, it has
forfeited whatever rights it could have asserted as an employer. 16

Applying the principle in the foregoing cases to the instant case, it would be unfair to the union and its members if the terms and
conditions contained in the old CBA would continue to be imposed on GMC's employees for the remaining two (2) years of the. CBA's
duration. We are not inclined to gratify GMC with an extended term of the old CBA after it resorted to delaying tactics to prevent
negotiations. Since it was GMC which violated the duty to bargain collectively, based on Kiok Loy and Divine Word University of
Tacloban, it had lost its statutory right to negotiate or renegotiate the terms and conditions of the draft CBA proposed by the union.

We carefully note, however, that as strictly distinguished from the facts of this case, there was no pre-existing CBA between the
parties in Kiok Loy and Divine Word University of Tacloban. Nonetheless, we deem it proper to apply in this case the rationale of the
doctrine in the said two cases. To rule otherwise would be to allow GMC to have its cake and eat it too.

Under ordinary circumstances, it is not obligatory upon either side of a labor controversy to precipitately accept or agree to the
proposals of the other. But an erring party should not be allowed to resort with impunity to schemes feigning negotiations by going
through empty gestures. 17 Thus, by imposing on GMC the provisions of the draft CBA proposed by the union, in our view, the
interests of equity and fair play were properly served and both parties regained equal footing, which was lost when GMC thwarted
the negotiations for new economic terms of the CBA. IScaAE

The findings of fact by the CA, affirming those of the NLRC as to the reasonableness of the draft CBA proposed by the union should
not be disturbed since they are supported by substantial evidence. On this score, we see no cogent reason to rule otherwise. Hence,
we hold that the Court of Appeals did not commit grave abuse of discretion amounting to lack or excess of jurisdiction when it
imposed on GMC, after it had committed unfair labor practice, the draft CBA proposed by the union for the remaining two (2) years
of the duration of the original CBA. Fairness, equity, and social justice are best served in this case by sustaining the appellate court's
decision on this issue.

WHEREFORE, the petition is DISMISSED and the assailed decision dated July 19, 2000, and the resolution dated October 26, 2000,
of the Court of Appeals in CA-G.R. SP No. 50383, are AFFIRMED. Costs against petitioner.

SO ORDERED.

Puno, Austria-Martinez, Callejo, Sr. and Tinga, JJ., concur.

||| (General Milling Corp. v. Court of Appeals, G.R. No. 146728, [February 11, 2004], 467 PHIL 125-138)

40. THIRD DIVISION

[G.R. No. 113907. February 28, 2000.]

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG-UWP), ITS PRESIDENT

BEDA MAGDALENA VILLANUEVA, MARIO DAGANIO, DONATO GUERRERO, BELLA P. SANCHEZ, ELENA
TOBIS, RHODA TAMAYO, LIWAYWAY MALLILIN, ELOISA SANTOS, DOMINADOR REBULLO, JOSE
IRLAND, TEOFILA QUEJADA, VICENTE SAMONTINA, FELICITAS DURIAN, ANTONIO POLDO, ANGELINA
TUGNA, SALVADOR PENALOSA, LUZVIMINDA TUBIG, ILUMINADA RIVERA, ROMULO SUMILANG,
NENITA BARBELONIA, LEVI BASILIA, RICARDO PALAGA, MERCY ROBLES, LEODEGARIO GARIN,
DOMINGO ECLARINAL, MELCHOR GALLARDO, MARCELO GARIN, ROSALINA BAUTISTA, MARY ANN
TALIGATOS, ALEJANDRO SANTOS, ANTONIO FRAGA, LUZ GAPULTOS, MAGDALENA URSUA, EUGENIO
ORDAN, LIGAYA MANALO, PEPITO DELA PAZ, PERLITA DIMAQUIAT, MYRNA VASQUEZ, FLORENTINA
SAMPAGA, ARACELI FRAGA, MAXIMINA FAUSTINO, MARINA TAN, OLIGARIO LOMO, PRECILA
EUSEBIO, SUSAN ABOGANO, CAROLINA MANINANG, GINA GLIFONIA, OSCAR SOTTO, CELEDONA
MALIGAYA, EFREN VELASQUEZ, DELIA ANOVER, JOSEPHINE TALIMORO, MAGDALENA TABOR,
NARCISA SARMIENTO, SUSAN MACASIEB, FELICIDAD SISON, PRICELA CARTA, MILA MACAHILIG,
CORAZON NUNALA, VISITACION ELAMBRE, ELIZABETH INOFRE, VIOLETA BARTE, LUZVIMINDA
VILLOSA, NORMA SALVADOR, ELIZABETH BOGATE, MERLYN BALBOA, EUFRECINA SARMIENTO,
SIMPLICIA BORLEO, MATERNIDAD DAVID, LAILA JOP, POTENCIANA CULALA, LUCIVITA NAVARRO,
ROLANDO BOTIN, AMELITA MAGALONA, AGNES CENA, NOLI BARTOLAY, DANTE AQUINO, HERMINIA
RILLON, CANDIDA APARIJADO, LYDIA JIMENEZ, ELIZABETH ANOCHE, ALDA MURO, TERESA
VILLANUEVA, TERESITA RECUENCO, ELIZA SERRANO, ESTELLA POLINAR, GERTRUDES NUNEZ, FELIPE
BADIOLA, ROSLYN FERNANDEZ, OSCAR PAGUTA, NATIVIDAD BALIWAS, ELIZABETH BARCIBAL,
CYNTHIA ESTELLER, TEODORA SANTOS, ALICIA PILAR, MILA PATENO, GLORIA CATRIZ, MILA
MACAHILIG, ADELAIDA DE LEON, ROSENDO EDILO, ARSENIA ESPIRITU, NUMERIANO CABRERA,
CONCEPCION ARRIOLA, PAULINA DIMAPASOK, ANGELA SANGCO, PRESILA ARIAS, ZENAIDA NUNES,
EDITHA IGNACIO, ROSA GUIRON, TERESITA CANETA, ALICIA ARRO, TEOFILO RUWETAS, CARLING
AGCAOILI, ROSA NOLASCO, GERLIE PALALON, CLAUDIO DIRAS, LETICIA ALBOS, AURORA ALUBOG,
LOLITA ACALEN, GREGORIO ALIVIO, GUILLERMO ANICETA, ANGELIE ANDRADA, SUSAN ANGELES,
ISABELITA AURIN, MANUELA AVELINA, CARLING AGCAOLI, TERESITA ALANO, LOLITA AURIN,
EMMABETH ARCIAGA, CRESENCIA ACUNA, LUZVIMINDA ABINES, FLORENCIA ADALID, OLIVIA
AGUSTIN, EVANGELINE ALCORAN, ROSALINA ALFERES, LORNA AMANTE, FLORENTINA AMBITO,
JULIETA AMANONCO, CARMEN AMARILLO, JOSEFINA AMBAGAN, ZENAIDA ANAYA, MARIA ANGLO,
EDITHA ANTAZO, MARY JANE ANTE, ANDREA AQUINO, ROWENA ARABIT, MARIETA ARAGON,
REBECCA ARCENA, LYDIA ARCIDO, FERNANDO ARENAS, GREGORIO ARGUELLES, EDITHA ARRIOLA,
EMMA ATIENZA, TEODY ATIENZA, ELIZABETH AUSTRIA, DIOSA AZARES, SOLIDA AZAINA, MILAGROS
BUAG, MARIA BANADERA, EDNALYN BRAGA, OFELIA BITANGA, FREDISMINDA BUGUIS, VIOLETA
BALLESTEROS, ROSARIO BALLADJAY, BETTY BORIO, ROMANA BAUTISTA, SUSARA BRAVO, LILIA
BAHINGTING, ENIETA BADOZA, DAMIANA BANGCORE, HERMINIA BARIL, PETRONA BARRIOS,
MILAGROS BARRAMEDA, PERLA BAUTISTA, CLARITA BAUTISTA, ROSALINA BAUTISTA, ADELINA
BELGA, CONSOLACION BENAS, MARIA BEREZO, MERCEDES BEREBER, VIOLETA BISCOCHO, ERNESTO
BRIONES, ALVINA BROSOTO, AGUSTINA BUNYI, CARMEN BUGNOT, ERLINDA BUENAFLOR, LITA
BAQUIN, CONSEJO BABOL, CRISANTA BACOLOD, CELIA DE BACTAT, MAZIMA BAGA, ELENA BALADAD,
ROSARIO BALADJAY, AMALIA BALAGTAS, ANITA BALAGTAS, MARIA BALAKIT, RUFINA BALATAN,
REBECCA BALDERAMA, AMELIA BALLESTER, BELEN BARQUIO, BERNANDITA BASILIDES, HELEN BATO,
HELEN BAUTISTA, ROMANA BAUTISTA, ALMEDA BAYTA, AVELINA BELAYON, NORMA DE BELEN,
THELMA DE BELEN, JOCELYN BELTRAN, ELENA BENITEZ, VIRGINIA BERNARDINO, MERLINA
BINUYAG, LINA BINUYA, BLESILDA BISNAR, SHIRLEY BOLIVAR, CRESENTACION MEDLO, JOCELYN
BONIFACIO, AMELIA BORBE, AMALIA BOROMEO, ZENAIDA BRAVO, RODRIGO BEULDA, TERESITA
MENDEZ, ELENA CAMAN, LALIANE CANDELARIA, MARRY CARUJANO, REVELINA CORANES, MARITESS
CABRERA, JUSTINA CLAZADA, APOLONIA DELA CRUZ, VICTORIA CRUZ, JOSEFINA DELA CRUZ,
MARITESS CATANGHAL, EDNA CRUZ, LUCIA DE CASTRO, JOSIE CARIASO, OFELIA CERVANTES,
MEDITA CORTADO, AMALIA CASAJEROS, LUCINA CASTILIO, EMMA CARPIO, ANACORITA CABALES,
YOLANDA CAMO, MILA CAMAZUELA, ANITA CANTO, ESTELA CANCERAN, FEMENClA CANCIO, CYNTHIA
CAPALAD, MERLE CASTILLO, JESUSA CASTRO, CECILIA CASTILLO, SILVERITA CASTRODES, VIVIAN
CELLANO, NORMA CELINO, TERESITA CELSO, GLORIA COLINA, EFIPANIA CONSTANTINO, SALVACION
CONSULTA, MEDITA CORTADO, AIDA CRUZ, MARISSA DELA CRUZ, EDITO CORCILLES, JELYNE CRUZ,
ROSA CORPOS, ROSITA CUGONA, ELSIE CABELLES, EMMA CADUT, VICTORIA CALANZA, BARBARA
CALATA, IMELDA CALDERON, CRISTINA CALIDGUID, EMMALINDA CAMALON, MARIA CAMERINO,
CARMENCITA CAMPO, CONNIE CANEZO, LOURDES CAPANANG, MA. MILAGROS CAPILI, MYRNA T.
CAPIRAL, FLOR SAMPAGA, SUSAN B. CARINO, ROSARIO CARIZON, VIRGINIA DEL CARMEN, EMMA
CARPIO, PRESCILA CARTA, FE CASERO, LUZ DE CASTRO, ANNA CATARONGAN, JOSEFINA CASTISIMO,
JOY MANALO, EMMIE CAWALING, JOVITA CARA, MARINA CERBITO, MARY CAREJANO, ESTELA R.
CHAVEZ, CONCEPCION PARAJA, GINA CLAUDIO, FLORDELIZA CORALES, EDITO CORCIELER, ROSA C.
CORROS, AMELIA CRUZ, JELYNE CRUZ, WILFREDO DELA CRUZ, REINA CUEVAS, MARILOU DEJECES,
JOSEPHINE DESACULA, EDITHA DEE, EDITHA DIAZ, VIRGIE DOMONDON, CELSA DOROPAW, VIOLETA
DUMELINA, MARIBEL DIMATATAC, ELBERTO DAGANIO, LETECIA DAGOHOY, DINDO DALUZ, ANGELITA
DANTES, GLORIA DAYO, LUCIA DE CASTRO, CARLITA DE GUZMAN, CARMEN DELA CRUZ, MERCY DE
LEON, MARY DELOS REYES, MARIETA DEPILO, MATILDE DIBLAS, JULIETA DIMAYUGA, TEODORA
DIMAYUGA, YOLANDA DOMDOM, LUCITA DONATO, NELMA DORADO, RITA DORADO, SUSAN DUNTON,
HERMINIA SAN ESTEBAN, AMALI EUGENIO, OLIVIA EUSOYA, ERNESTO ESCOBIN, EVELYN ESCUREL,
LYDIA ESCOBIN, VICENTE E. ELOIDA, ELENA EGAR, GLORIA ERENO, NORMA ESPIRIDION, ARSENIA
ESPIRITU, AURORA ESTACIO, DEMETRIA ESTONELO, MILAGROS FONSEGA, LYDIA FLORENTINO,
JULIA FARABIER, TRINIDAD FATALLA, IMELDA FLORES, JESSINA FRANCO, MA. CRISTINA FRIJAS,
ESPECTACION FERRER, BERDENA FLORES, LEONILA FRANCISCO, BERNARDA FAUSTINO, DOLORES
FACUNDO, CRESTITA FAMILARAN, EMELITA FIGUERAS, MA. VIRGINIA FLORENDO, AURORA
FRANCISCO, MA JESUSA FRANCISCO, NENITA FUENTES, MARILOU GOLINGAN, JUANITA GUERRERO,
LYDIA GUEVARRA, SOCORRO GONZAGA, PATRICIA GOMEO, ROSALINDA GALAPIN, CARMELITA
GALVEZ, TERESA GLE, SONIA GONZALES, PRIMITA GOMEZ, THERESA GALUA, JOSEFINA GELUA,
BRENDA GONZAGA, FLORA GALLARDO, LUCINDA GRACILLA, VICTORIA GOZUM, NENITA GAMAO,
EDNA GARCIA, DANILO GARCIA, ROSARIO GIRAY, ARACELI GOMEZ, JOEMARIE GONZAGA, NELIA
GONZAGA, MARY GRANCE GOZON, CARMEN GONZALES, MERLITA GREGORIO, HERMINIA GONZALES,
CARLITA DE GUZMAN, MODESTA GABRENTINA, EDITHA GADDI, SALVACIO GALIAS, MERLINDA
GALIDO, MELINDA GAMIT, JULIETA GARCIA, EMELITA GAVINO, CHARITO GILLIA, GENERA GONEDA,
CRESTITA GONZALES, HERMINIA GONZALES, FRANCISCA GUILING, JULIAN HERNANDEZ, GLECERIA
HERRADURA, SUSANA HIPOLITO, NERISSA HAZ, SUSAN HERNAEZ, APOLONIA ISON, SUSAN IBARRA,
LUDIVINA IGNACIO, CHOLITA INFANTE, JULIETA ITURRIOS, ANITA IBO, MIRASOL INGALLA, JULIO
JARDINIANO, MERLITA JULAO, JULIETA JULIAN, MARIBETH DE JOSE, JOSEPHINE JENER, IMELDA
JATAP, JULIETA JAVIER, SALOME JAVIER, VICTORIA JAVIER, SALVACION JOMOLO, EDNA JARNE,
LYDIA JIMENEZ, TERESITA DE JUAN, MARILYN LUARCA, ROSITA LOSITO, ROSALINA LUMAYAG,
LORNA LARGA, CRESTETA DE LEON, ZENAIDA LEGASPI, ADELAIDA LEON, IMELDA DE LEON, MELITINA
LUMABI, LYDIA LUMABI, ASUNCION LUMACANG, REGINA LAPIADRIO, MELANIA LUBUGUAN,
EVANGELINE LACAP, PELAGIA LACSI, LORNA LAGUI, VIRGIE LAITAN, VIRGINIA LEE, CRESTELITA DE
LEON, FELICISIMA LEONERO, DIOSA LOPE, ANGELITA LOPEZ, TERESITA LORICA, JUANITA
MENDIETA, JUANITA MARANQUEZ, JANET MALIFERO, INAS MORADOS, MELANIE MANING, LUCENA
MABANGLO, CLARITA MEJIA, IRENE MENDOZA, LILIA MORTA, VIRGINIA MARAY, CHARITO
MASINAHON, FILMA MALAYA, LILIA MORTA, VIRGINIA MARAY, CHARITO MASINAHON, FILMA
MALAYA, LILIA MORTA, ROSITA MATIBAG, LORENZA MLINA, SABINA DEL MUNDO, EDITHA MUYCO,
NARCISA MABEZA, MA. FE MACATANGAY, CONCEPCION MAGDARAOG, IMELDA MAHIYA, ELSA
MALLARI, LIGAYA MANAHAN, SOLEDA MANLAPAS, VIRGINIA MAPA, JOSEI MARCOS, LIBRADA
MARQUEZ, VIRGINIA MAZA, JULIANITA MENDIETA, EDILBERTA MENDOZA, IRENE MERCADO, HELEN
MEROY, CRISTINA MEJARES, CECILIA MILLET, EMELITA MINON, JOSEPHINE MIRANA, PERLITA
MIRANO, EVANGELINE MISBAL, ELEANOR MORALES, TERESITA MORILLA, LYDIA NUDO, MYRIAM
NAVAL, CAROLINA NOLIA, ALICIA NUNEZ, MAGDALENA NAGUIDA, ELSA NICOL, LILIA NACIONALES,
MA. LIZA MABO, REMEDIOS NIEVES, MARGARITA NUYLAN, TERESITA NIEVES, PORFERIA NARAG,
RHODORA NUCASA, CORAZON OCRAY, LILIA OLIMPO, VERONA OVERENCIA, FERMIN OSENA,
FLORENCIA OLIVAROS, SOLEDAD OBEAS, NARISSA OLIVEROS, PELAGIA ORTEGA, SUSAN ORTEGA,
CRISTINA PRENCIPE, PURITA PENGSON, REBECCA PACERAN, EDNA PARINA, MARIETA PINAT,
EPIFANIA PAJERLAN, ROSALINA PASIBE, CECILIA DELA PAZ, LORETA PENA, APOLONIA PALCONIT,
FRANCISCO PAGUIO, LYDIA PAMINTAHON, ELSIE PACALDO, TERESITA PADILLA, MYRNA PINEDA,
MERCIDITA PEREZ, NOVENA PORLUCAS, TERESITA PODPOD, ADORACION PORNOBI, ALICIA PERILLO,
HELEN JOY PENDAL, LOURDES PACHECO, LUZVIMINDA PAGALA, LORETA PAGAPULAN, FRANCISCO
PAGUIO, PRISCO PALACA, FLORA PAMINTUAN, NOEMI PARISALES, JOSEPHINE PATRICIO, CRISTINA
PE BENITO, ANGELA PECO, ANGELITA PENA, ESTER PENONES, NORMA PEREZ, MAURA
PERSEVERANCIA, MARINA PETILLA, JOSIE PIA, ZULVILITA PIODO, REBECCA PACERAN, CLARITA
POLICARPIO, MAXIMO POTENTO, PORFIRIO POTENTO, FLORDELIZA PUMARAS, FERNANDO QUEVEDO,
JULIANA QUINDOZA, CHARITO QUIROZ, CARMELITA ROSINO, RODELIA RAYONDOYON, FLORENCIA
RAGOS, REBECCA ROSALES, ROSALYN RIVERO, FRANCISCO RUIZ, FRANCIA ROSERO, EMELY RUBIO,
EDILBERTO RUIO, JUANA RUBY, RAQUEL REYES, MERCY ROBLES, ESTELA RELANO, ROSITA REYES,
NIMFA RENDON, EPIFANIO RAMIRO, MURIEL REALCO, BERNARDITA RED, LEONITA RODIL, BENITA
REBOLA, DELMA REGALARIO, LENY REDILLAS, JULIETA DELA ROSA, FELICITAS DELA ROSA, SUSAN
RAFALLO, ELENA RONDINA, NORMA RACELIS, JOSEPHINE RAGEL, ESPERANZA RAMIREZ,
LUZVIMINDA RANADA, CRISTINA RAPINSAN, JOCELYN RED, ORLANDO REYES, TERESITA REYES,
ANGELITA ROBERTO, DELIA ROCHA, EDLTRUDES ROMERO, MELECIA ROSALES, ZENAIDA ROTAO,
BELEN RUBIS, FE RUEDA, SYLVIA SONGCAYAWON, CRISTINA SANANO, NERCISA SARMIENTO, HELEN
SIBAL, ESTELITA SANTOS, NORMA SILVESTRE, DARLITA SINGSON, EUFROCINA SARMIENTO, MYRNA
SAMSON, EMERLINA SADIA, LORNA SALAZAR, AVELINA SALVADOR, NACIFORA SALAZAR, TITA SEUS,
MARIFE SANTOS, GRACIA SARMIENTO, ANGELITA SUMANGIL, ELIZABETH SICAT, MA. VICTORIA
SIDELA, ANALITA SALVADOR, MARITES SANTOS, VIRGINIA SANTOS, THELMA SARONG, NILDA
SAYAT, FANCITA SEGUNDO, FYNAIDA SAGUI, EDITHA SALAZAR, EDNA SALZAR, EMMA SALENDARIO,
SOLEDAD SAMSON, EDNA SAN DIEGO. TERESITA SAN GABRIEL, GERTRUDES SAN JOSE, EGLECERIA
SANCHEZ, ESTRELLA SANCHEZ, CECILIA DELOS SANTOS, LUISA SEGOVIA, JOCELYN SENDING, ELENA
SONGALIA, FELICITAS SORIANO, OFELIA TIBAYAN, AIDA TIRNIDA, MONICA TIBAYAN, CRISTETA
TAMBARAN, GLORIA TACDA, NENVINA, FELINA TEVES, ANTONINA DELA TORRE, MAXIMA TANILON,
NENA TABAT, ZOSIMA TOLOSA, MARITA TENOSO, IMELDA TANIO, LUZ TANIO, EVANGELINE TAYO,
JOSEFINA TINGTING, ARSENIA TISOY, MAGDALENA TRAJANO, JOSEFINA UBALDE, GINA UMALI,
IRMA VALENZUELA, FELY VALDEZ, PAULINA VALEZ, ROSELITA VALLENTE, LOURDES VELASCO, AIDA
VILLA, FRANCISCA VILLARITO, ZENAIDA VISMONTE, DELIA VILLAMIEL, NENITA VASQUEZ, JOCELYN
VILLASIS, FERMARGARITA VARGAS, CELIA VALLE, MILA CONCEPCION VIRAY, DOMINGA VALDEZ,
LUZVIMINDA VOCINA, MADELINE VIVERO, RUFINA VELASCO, AUREA VIDALEON, GLORIA DEL VALLE,
THELMA VALLOYAS, CYNTHIA DELA VEGA, ADELA VILLAGOMEZ, TERESITA VINLUAN, EUFEMIA VITAN,
GLORIA VILLAFLORES, EDORACION VALDEZ, ANGELITA VALDEZ, ILUMINADA VALENCI, MYRNA
VASQUEZ, EVELYN VEJERAMO, TEODORA VELASQUEZ, EDAN VILLANUEVA, PURITA VILLASENOR,
SALVADOR WILSON, EMELINA YU, ADELFA YU, ANA ABRIGUE, VIRGINIA ADOBAS, VICTORIA
ANTIPUESTO, MERCEDITA CASTILLO, JOCELYN CASTRO, CREMENIA DELA CRUZ, JOSEPHINE
IGNACIO, MELITA ILILANGOS, LIGAYA LUMAYAT, DELIA LUMBES, ROSITA LIBRADO, DELIA
LAGRAMADA, GEMMA MAGPANTAY, EMILY MENDOZA, FIDELA PANGANIBAN, LEONOR RIZALDO,
ILUMINDA RIVERA, DIVINA SAMBAYAN, ELMERITA SOLAYAO, NANCY SAMALA, JOSIE SUMARAN,
LUZVIMINDA ABINES, ALMA ACOL, ROBERTO ADRIATICO, GLORIA AGUINALDO, ROSARIO ALEYO,
CRISTETA ALEJANDRO, LILIA ALMOGUERA, CARMEN AMARILLO, TRINIDAD ARDANIEL, CERINA
AVENTAJADO, ZENAIDA AVAYA, LOLITA ARABIS, MARIA ARSENIA, SOFIA AGUINALDO, SALVE ABAD,
JOSEFINA AMBANGAN EMILIA AQUINO, JOSEFINA AQUINO, JULIANA AUSAN, AMERCIANA ACOSTA,
CONCEPCION ALEROZA, DIANA ADOVOS, FELY ADVINCULA, SEOMINTA ARIAS, NORMA AMISTOSO,
PRESENTACION ALONOS, EMMA ATIENZA, LEONIDA AQUINO, ANITA ARILLON, ADELAIDA ARELLANO,
NORMA AMISTOSO, JOSEPHINE ARCEDE, SEMIONITA EMIONITA ARIAS, JOSEFINA BANTUG, LOLITA
BARTE, HERMINIA BASCO, MARGARITA BOTARDO, RUFINO BUGNOT, LOLITA BUSTILLO, ISABEL
BALAKIT, ROSARIO BARRERO, TESSIE BALBOS, NORMA BENISANO, GUILLERMA BRUGES,
BERNADETTE BARTOLOME, SHIRLEY BELMONTE, MERONA BELZA, AZUCENA BERNALES, JOSE BASCO,
NIMPHA BANTOG, BENILDA BUBAN, REGINA BUBAN, SALOME BARRAMEDA, IRENE BISCO, FELICITAS
BAUTISTA, VIOLETA BURA, LINA BINUYA, BIBIANA BAARDE, ELSA BAES, ANASTACIA BELONZO,
SONIA BENOYO, ELIZABETH BACUNGAN, PATRICIA BARRAMEDA, ERLINDA BARCELONA, EMMA
BANICO, APOLONIA BUNAO, LUCITA BOLEA, PACIFICA BARCELONA, EDITHA BASIJAN, RENITA
BADAMA, ELENA BALADAD, CRESENCIA BAJO, BERNADITA BASILID, MELINDA BEATO, YOLANDA
BATANES, EDITHA BORILLA, ANITA BAS, ELSA CALIPUNDAN, MARIA CAMERINO, VIRGINIA
CAMPOSANO, MILAGROS CAPILI, CARINA CARINO, EUFEMIA CASIHAN, NENITA CASTRO, FLORENCIA
CASUBUAN, GIRLIE CENTENO, MARIANITA CHIQUITO, IMELDA DELA CRUZ, TEODOSIA CONG,
TEOFILA CARACOL, TERESITA CANTA, IRENEA CUNANAN, JULITA CANDILOSAS, VIOLETA CIERES,
MILAGROS DELA CRUZ, FLOREPES CAPULONG, CARMENCITA CAMPO, MARILYN CARILLO, RUTH DELA
CRUZ, RITA CIJAS, LYDIA CASTOR, VIRGIE CALUBAD, EMELITA CABERA, CRISTETA CRUZ, ERLINDA
COGADAS, IMELDA CALDERON, SUSIE LUZ CEZAR, ESTELA CHAVEZ, NORMA CABRERA, ELDA
DAGATAN, LEONISA DIMACUNA, ERNA DUGTONG, FLORDELISA DIGMA, VIRGILIO DADIOS, LOLITA
DAGTA, ADELAIDA DORADO, CELSA DATUMANONG, VIRGINIA DOCTOLERO, EDNA SAN DIEGO,
JULIETA DANG, JULIETA DORANTINAO, LOLITA DAGANO, JUDITH DIAZ, MARIA ENICANE, MARITA
ESCARDE, ENRIMITA ESMAYOR, ROSARIO EPIRITU, REMEDIOS EMBOLTORIO, IRENE ESTUITA,
TERESITA ERESE, ERMELINDA ELEZO, MARIA ESTAREJA, MERLITA ESGUERRA, YOLANDA FELICITAS,
FRUTO FRANCIA, MARTHA FRUTO, LILIA FLORES, SALVACION FORTALESA, JUDITH FAJARDO,
SUSANA FERNANDO, EDWIN FRANCISCO, NENITA GREGORY, ROSA CAMILO, MARIVIC GERRARDO,
CHARITA GOREMBALEM, NORMA GRANDE, DOLORES GUTIERREZ, CHARLIE GARCIA, LUZ GALVEZ,
ADELAIDA GAMILLA, LUZ GAPULTOS, ERLINDA GARCIA, HELEN GARCIA, ERLINDA GAUDIA,
FRANCISCA GUILING, MINTA HERRERA, ASUNCION HONOA, JUAN HERNANDEZ, LUCERIA ANNA MAE
HERNANDEZ, JULIANA HERNANDEZ, EDITHA IGNACIO, ANITA INOCENCIO, EULALIA INSORIO,
ESTELITA IRLANDA, MILAGROS IGNACIO, LINDA JABONILLO, ADELIMA JAEL, ROWENA JARABJO,
ROBERT JAVILINAR, CLARITA JOSE, CARMENCITA JUNDEZ, SOFIA LALUCIS, GLORIA LABITORIA,
ANGELITA LODES, ERLINDA LATOGA, EVELYN LEGASPI, ROMEO LIMCHOCO, JESUS LARA, ESTRELLA
DE LUNA, LORETA LAREZA, JOSEPHINE ALSCO, MERCY DE LEON, CONSOLACION LIBAO, MARILYN
LIWAG, TERESITA LIZAZO, LILIA MACAPAGAL, SALVACION MACAREZA, AMALIA MADO, TERESITA
MADRIAGA, JOVITA MAGNAYE, JEAN MALABAD, FRANCISCA MENDOZA, NELCITA MANGANTANG,
TERESITA NELLA, GENEROZA MERCADO, CRISTETA MOJANA, BERNARDA MONGADO, LYDIA MIRANDA,
ELISA MADRILEJOS, LOIDA MAGSINO, AMELIA MALTO, JULITA MAHIBA, MYRNA MAYORES, LUISA
MARAIG, FLORENCIA MARAIG, EMMA MONZON, IMELDA MAGDANGAN, VICTORIA MARTIN, NOEMI
MANGUILLO, BASILIZA MEDINA, VICTORIO MERCADO, ESTELA MAYPA, EMILIA MENDOZA, LINA
MAGPANTAY, FELICIANA MANLOLO, ELENA MANACOP, WILMA MORENO, JUANA MENDOZA, EVELYN
 DEL MUNDO, ROSIE MATUTINA, MATILDE MANALO, TERESITA MENDEZ, FELIPINA MAGONCIA, MARIA
MANZANO, LIGAYA MANALO, LETICIA MARCHA, MARINA MANDIGMA, LETICIA MANDASOC,
PRESCILLA MARTINEZ, JULIA MENDOZA, PACITA MAGALLANES, ANGELINA MARJES, SHIRLEY
MELIGRITO, IRENE MERCADO, ELISA MAATUBANG, MARCELINA NICOLAS, AGUSTINA NICOLAS, ROSA
NOLASCO, WILMA NILAYE, VIOLETA ORACION, ANGELA OSTAYA, JUANITA OSAYOS, MAGDALENA
OCAMPO, MARDIANA OCTA, ROSELA OPAO, LIBRADA OCAMPO, YOLANDA OLIVER, MARCIA ORLANDA,
PAGDUNAN, RITA PABILONA, MYRA PALACA, BETHLEHEM PALINES, GINA PALIGAR, NORMA
PALIGAR, DELMA PEREZ, CLAUDIA PRADO, JULIE PUTONG, LUDIVINA PAGSALINGAN, MERLYN
PANALIGAN, VIOLETA PANAMBITAN, NOREN PAR, ERLINDA PARAGAS, MILA PARINO, REBECCA
PENAFLOR, IMELDA PENAMORA, JERMICILLIN PERALTA, REBECCA PIAPES, EDITHA PILAR,
MAROBETH PILLADO, DIOSCORO PIMENTEL, AURORA LAS PINAS, EVANGELINA PINON, MA. NITA
PONDOC, MA. MERCEDES PODPOD, ANGELITO PANDEZ, LIGAYA PIGTAIN, LEONILA QUIAMBAO,
ELENA QUINO, MARITESS QUIJANO, CHOLITA REBUENO, LOLITA REYES, JOCELYN RAMOS, ROSITA
RAMIREZ, ELINORA RAMOS, ISABEL RAMOS, ANNABELLE RESURRECCION, EMMA REYES, ALILY
ROXAS, MARY GRACE DELOS REYES, JOCELYN DEL ROSARIO, JOSEFINA RABUSA, ANGELITA
ROTAIRO, SAMCETA ROSETA, EDERLINA RUIZ, ZENAIDA ROSARIO, BENITA REBOLA, ROSITA
REVILLA, ROSITA SANTOS, ROWENA SALAZAR, EMILYN SARMIENTO, ANA SENIS, ELOISA SANTOS,
NARCISA SONGLIAD, ELMA SONGALIA, AMPARA SABIO, JESSIE SANCHEZ, VIVIAN SAMILO, GLORIA
SUMALINOG, ROSALINA DELOS SANTOS, MARIETA SOMBRERO, HELEN SERRETARIO, TEODORO
SULIT, BELLA SONGUINES, LINDA SARANTAN, ESTELLA SALABAR, MILAGROS SISON, GLORIA
TALIDAGA, CECILIA TEODORO, ROMILLA TUAZON, AMELITA TABULAO, MACARIA TORRES, LUTGARDA
TUSI, ESTELLA TORREJOS, VICTORIA TAN, MERLITA DELA VEGA, WEVINA ORENCIA, REMEDIOS
BALECHA, TERESITA TIBAR, LACHICA LEONORA, JULITA YBUT, JOSEFINA ZABALA, WINNIE
ZALDARIAGA, BENHUR ANTENERO, MARCELINA ANTENERO, ANTONINA ALAPAN, EDITHA ANTOZO,
ROWENA ARABIT, ANDRA AQUINO, TERESITA ANGULO, MARIA ANGLO, MYRNA ALBOS, ELENITA
AUSTRIA, ANNA ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, REMEDIOS BOLECHE,
MACARIA BARRIOS, THELMA BELEN, ESTELLA BARRETTO, JOCELYN CHAVEZ, VIRGINIA CAPISTRANO,
BENEDICTA CINCO, YOLLY CATPANG, REINA CUEVAS, VICTORIA CALANZA, FE CASERO, ROBERTA
CATALBAS, LOURDES CAPANANG, CLEMENCIA CRUZ, JOCELYN COSTO, MERCEDITA CASTILLO, EDITHA
DEE, LUCITA DONATO, NORMA ESPIRIDION, LORETA FERNANDEZ, AURORA FRANCISCO, VILMA
FAJARDO, MODESTA GABRENTINA, TERESITA GABRIEL, SALVACION GAMBOA, JOSEPHINE IGNACIO,
SUSAN IBARRA, ESPERANZA JABSON, OSCAR JAMBARO, ROSANNA JARDIN, CORAZON JALOCON,
ZENAIDA LEGASPI, DELLA LAGRAMADA, ROSITA LIBRANDO, LIGAYA LUMAYOT, DELIA LUMBIS,
LEONORA LANCHICA, RELAGIA LACSI, JOSEFINA LUMBO, VIOLETA DE LUNA, EVELYN MADRID,
TERESITA MORILLA, GEMMA MAGPANTAY, EMILY MENDOZA, IRENEA MEDINA, NARCISA MABEZA,
ROSANNA MEDINA, DELIA MARTINEZ, ROSARIO MAG-ISA, EDITHA MENDOZA, EDILBERTA MENDOZA,
FIDELA PANGANIBAN, OFELIA PANGANIBAN, AZUCENA POSTGO, LOURDES PACHECO, LILIA PADILLA,
MARISSA PEREZ, FLORDELIZA PUMARES, LUZ REYES, NORMA RACELIS, LEONOR RIZALDO, JOSIE
SUMASAR, NANCY SAMALA, EMERLITA SOLAYAO, MERCEDITA SAMANIEGO BLANDINA SIMBULAN,
JOCELYN SENDING, LUISITA TABERRERO, TERESITA TIBAR, ESTERLINA VALDEZ, GLORIA VEJERANO,
ILUMINADA VALENCIA, MERLITA DELA VEGA, VIRGIE LAITAN, JULIET VILLARAMA, LUISISTA
OCAMPO, NARIO ANDRES, ANSELMA TULFO, GLORIA MATEO, FLANIA MENDOZA, CONNIE CANGO,
EDITHA SALAZAR, MYRNA DELOS SANTOS, TERESITA SERGIO, CHARITO GILLA, FLORENTINA
HERNAEZ BERNARDINO VIRGINIA, AMPO ANACORITA, SYLVIA POSADAS, ESTRELLA ESPIRITU,
CONCORDIA LUZURIAGA, MARINA CERBITO, EMMA REYES, NOEMI PENISALES, CLARITA
POLICARPIO, BELEN BANGUIO, HERMINIA ADVINCULA, LILIA MORTA, REGINA LAPIDARIO, LORNA
LARGA, TERESITA VINLUAN, MARITA TENOSO, NILDS SAYAT, THELMA SARONG, DELMA REGALIS,
SUSAN RAFAULO, ELENA RONDINA, MYRNA PIENDA, VIOLETA DUMELINA, FLORENCIA ADALID,
FILMA MELAYA, ERLINDA DE BAUTISTA, MATILDE DE BLAS, DOLORES FACUNDO, REBECCA LEDAMA,
MA FE MACATANGAY, EMELITA MINON, NORMA PAGUIO, ELIZA VASQUEZ, GLORIA VILLARINO, MA.
JESUS FRANCISCO, TERESITA GURPIDO, LIGAYA MANALO, FE PINEDA, MIRIAM OCMAR, LUISA
SEGOVIA, TEODY ATIENZA, SOLEDA AZCURE, CARMEN DELA CRUZ, DMETRIA ESTONELO, MA.
FLORIDA LOAZNO, IMELDA MAHIYA, EDILBERTA MENDOZA, SYLVIA POSADAS, SUSANA ORTEGA,
JOSEPHINE D. TALIMORO, TERESITA LORECA, ARSENIA TISOY, LIGAYA MANALO, TERESITA GURPIO,
FE PINEDA, and MARIA JESUS FRANCISCO, petitioners, vs. HON. CRESENCIO J. RAMOS, NATIONAL
LABOR RELATIONS COMMISSION, M. GREENFIELD (B), INC., SAUL TAWIL, CARLOS T. JAVELOSA,
RENATO C. PUANGCO, WINCEL LIGOT, MARCIANO HALOG, GODOFREDO PACENO, SR., GERVACIO
CASILLANO, LORENZO ITAOC, ATTY. GODOFREDO PACENO, JR., MARGARITO CABRERA, GAUDENCIO
RACHO, SANTIAGO IBAÑEZ, AND RODRIGO AGUILING, respondents.

Potenciano A. Flores, Jr. for petitioners.

The Solicitor General for public respondent.

Gonzales Batiller Bilog & Associates for respondents C. Javelosa and R. Caoleng.

Angara Abello Concepcion Regala & Cruz for respondents Company & its Officers.

SYNOPSIS

Pursuant to a union security clause in the CBA between petitioner local union, affiliated with ULGWP, and respondent M. Greenfield
(B), Inc., the dismissal of several union officers and employees was sought after being expelled from the federation. The company
either suspended and terminated petitioners without any prior administrative investigation. Strikes were thereafter held
characterized with violence but attributable to both management and the employees. In the unfair labor practice case challenging
their dismissal, the Labor Arbiter rendered judgment finding the termination valid and that the act of disaffiliation and declaration of
autonomy constitutes disloyalty. This was affirmed on appeal by the NLRC, First Division. A commissioner from the Third Division was
designated when one commissioner from the First Division retired and the other inhibited himself from sitting on the case. Petitioners
moved for reconsideration, but was denied, hence, the elevation of this case to this Court.

The Supreme Court held that the territorial jurisdiction of a Commissioner sitting in a division in the NLRC does not confer exclusive
jurisdiction to each division but are merely designed for administrative efficiency. Article 312 of the Labor Code enumerating the
powers of the NLRC does not prohibit the temporary designation of commissioners from other divisions whenever the required
concurrence is not met. TIDcEH

Dismissal of employees under the union security clause is authorized by law, but employees must be afforded their fundamental
rights to due process.

A local union has the right, at any time, to disaffiliate from a mother union or federation in accordance with its constitutional
guarantee of freedom of association and the same cannot be considered disloyalty.

The filing of a complaint for illegal dismissal is inconsistent with abandonment.

An employee dismissed without the 30-day notice requirement is entitled to the benefits laid down in Serrano vs. NLRC.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; NATIONAL LABOR RELATIONS COMMISSION; TWO (2) COMMISSIONERS IN
EVERY DIVISION REQUIRED TO ARRIVE AT A JUDGMENT OR RESOLUTION; CHAIRMAN MAY DESIGNATE ADDITIONAL
COMMISSIONER FROM OTHER DIVISION WHEN REQUIRED CONCURRENCE IS NOT MET; CASE AT BAR. — Petitioners' argument is
misplaced. Article 213 of the Labor Code in enumerating the powers of the Chairman of the National Labor Relations Commission
provides that: "The concurrence of two (2) Commissioners of a division shall be necessary for the pronouncement of a judgment or
resolution. Whenever the required membership in a division is not complete and the concurrence of two (2) commissioners to arrive
at a judgment or resolution cannot be obtained, the Chairman shall designate such number of additional Commissioners from the
other divisions as may be necessary." It must be remembered that during the pendency of the case in the First Division of the NLRC,
one of the three commissioners, Commissioner Romeo Putong, retired, leaving Chairman Bartolome Carale and Commissioner
Vicente Veloso III. Subsequently, Commissioner Veloso inhibited himself from the case because the counsel for the petitioners was
his former classmate in law school. The First Division was thus left with only one commissioner. Since the law requires the
concurrence of two commissioners to arrive at a judgment or resolution, the Commissioner was constrained to temporarily designate
a commissioner from another division to complete the First Division. There is nothing irregular at all in such a temporary designation
for the law empowers the Chairman to make temporary assignments whenever the required concurrence is not met. The law does
not say that a commissioner from the first division cannot be temporarily assigned to the second or third division to fill the gap or
vice versa. The territorial divisions do not confer exclusive jurisdiction to each division and are merely designed for administrative
efficiency.

2. ID.; ID.; LABOR RELATIONS; COLLECTIVE BARGAINING AGREEMENT; UNION SECURITY CLAUSE; CANNOT OVERRIDE ONE'S
RIGHT TO DUE PROCESS. — Although this Court has ruled that union security clauses embodied in the collective bargaining
agreement may be validly enforced and that dismissals pursuant thereto may likewise be valid, this does not erode the fundamental
requirement of due process. The reason behind the enforcement of union security clauses which is the sanctity and inviolability of
contracts cannot override one's right to due process.

3. ID.; ID.; ID.; ID.; ID.; ID.; CASE AT BAR. — In the case under scrutiny, petitioner union officers were expelled by the federation
for allegedly committing acts of disloyalty and/or inimical to the interest of ULGWP and in violation of its Constitution and By-laws.
Upon demand of the federation, the company terminated the petitioners without conducting a separate and independent
investigation. Respondent company did not inquire into the cause of the expulsion and whether or not the federation had sufficient
grounds to effect the same. Relying merely upon the federation's allegations, respondent company terminated petitioners from
employment when a separate inquiry could have revealed if the federation had acted arbitrarily and capriciously in expelling the
union officers. Respondent company's allegation that petitioners were accorded due process is belied by the termination letters
received by the petitioners which state that the dismissal shall be immediately effective.

4. ID.; ID.; ID.; ID.; ID.; EMPLOYEE ENTITLED TO BE PROTECTED NOT ONLY FROM ARBITRARY ACTION OF COMPANY BUT ALSO
FROM HIS OWN UNION. — As held in the aforecited case of Cariño, "the right of an employee to be informed of the charges against
him and to reasonable opportunity to present his side in a controversy with either the company or his own union is not wiped away
by a union security clause or a union shop clause in a collective bargaining agreement. An employee is entitled to be protected not
only from a company which disregards his rights but also from his own union the leadership of which could yield to the temptation of
swift and arbitrary expulsion from membership and mere dismissal from his job."

5. ID.; ID.; ID.; COLLECTIVE BARGAINING AGREEMENT; UNION SECURITY CLAUSE; ENFORCEMENT AUTHORIZED BY LAW;
REQUISITE. — While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union
security clause of the collective bargaining agreement upon the recommendation by the union, this dismissal should not be done
hastily and summarily thereby eroding the employees' right to due process, self-organization and security of tenure. The
enforcement of union security clauses is authorized by law provided such enforcement is not characterized by arbitrariness, and
always with due process. Even on the assumption that the federation had valid grounds to expel the union officers, due process
requires that these union officers be accorded a separate hearing by respondent company.

6. ID.; ID.; ID.; EMPLOYER MAY BE LIABLE FOR PAYMENT OF BACKWAGES IN EFFECTING DISMISSAL OF EMPLOYEES AT INSTANCE
OF FEDERATION. — In the case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc., the Court held the company liable
for the payment of backwages for having acted in bad faith in effecting the dismissal of the employees. Thus, notwithstanding the
fact that the dismissal was at the instance of the federation and that it undertook to hold the company free from any liability
resulting from such a dismissal, the company may still be held liable if it was remiss in its duty to accord the would-be dismissed
employees their right to be heard on the matter.

7. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF NATIONAL LABOR RELATIONS COMMISSION, GENERALLY ENTITLED TO
GREAT RESPECT AND GENERALLY BINDING ON THIS COURT; EXCEPTION. — It is well-settled that findings of facts of the NLRC are
entitled to great respect and are generally binding on this Court, but it is equally well-settled that the Court will not uphold erroneous
conclusions of the NLRC as when the Court finds insufficient or insubstantial evidence on record to support those factual findings. The
same holds true when it is perceived that far too much is concluded, inferred or deduced from the bare or incomplete facts appearing
of record.

8. LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR RELATIONS; LOCAL UNION HAS RIGHT TO DISAFFILIATE FROM
MOTHER UNION OR DECLARE ITS AUTONOMY. — A local union has the right to disaffiliate from its mother union or declare its
autonomy. A local union, being a separate and voluntary association, is free to serve the interests of all its members including the
freedom to disaffiliate or declare its autonomy from the federation to which it belongs when circumstances warrant, in accordance
with the constitutional guarantee of freedom of association. Thus, a local union which has affiliated itself with a federation is free to
sever such affiliation anytime and such disaffiliation cannot be considered disloyalty. In the absence of specific provisions in the
federation's constitution prohibiting disaffiliation or the declaration of autonomy of a local union, a local may dissociate with its
parent union.

9. ID.; ID.; ID.; STRIKE; NOT ILLEGAL WHERE TERMINATION DISPUTE WAS INITIALLY AN INTRA-UNION CONFLICT. — On the
submission that the strike was illegal for being grounded on a non-strikeable issue, that is, the intra-union conflict between the
federation and the local union, it bears reiterating that when respondent company dismissed the union officers, the issue was
transformed into a termination dispute and brought respondent company into the picture. Petitioners believed in good faith that in
dismissing them upon request by the federation, respondent company was guilty of unfair labor practice in that it violated the
petitioner's right to self-organization. The strike was staged to protest respondent company's act of dismissing the union officers.
Even if the allegations of unfair labor practice are subsequently found out to be untrue, the presumption of legality of the strike
prevails.

10. ID.; ID.; ID.; COLLECTIVE BARGAINING AGREEMENT; NO STRIKE, NO LOCK-OUT PROVISION; CAN BE INVOKED ONLY WHEN
STRIKE IS ECONOMIC IN NATURE. — A no strike, no lock out provision can only be invoked when the strike is economic in
nature, i.e., to force wage or other concessions from the employer which he is not required by law to grant. Such a provision cannot
be used to assail the legality of a strike which is grounded on unfair labor practice, as was the honest belief of herein petitioners.
Again, whether or not there was indeed unfair labor practice does not affect the strike. TICaEc

11. ID.; ID.; TERMINATION OF EMPLOYMENT; ABANDONMENT; REQUISITES. — However, jurisprudence holds that for abandonment
of work to exist, it is essential (1) that the employee must have failed to report for work or must have been absent without valid or
justifiable reason; and (2) that there must have been a clear intention to sever the employer-employee relationship manifested by
some overt acts. Deliberate and unjustified refusal on the part of the employee to go back to his work post and resume his
employment must be established. Absence must be accompanied by overt acts unerringly pointing to the fact that the employee
simply does not want to work anymore. And the burden of proof to show that there was unjustified refusal to go back to work rests
on the employer.

12. ID.; ID.; ID.; ID.; FILING OF COMPLAINT FOR ILLEGAL DISMISSAL, INCONSISTENT WITH ALLEGATION THEREOF. — An
employee who took steps to protest his lay-off cannot be said to have abandoned his work. The filing of a complaint for illegal
dismissal is inconsistent with the allegation of abandonment. In the case under consideration the petitioners did, in fact, file a
complaint when they were refused reinstatement by respondent company.

13. ID.; ID.; ID.; DISMISSAL OF EMPLOYEE IN ACCORDANCE WITH UNION SECURITY AGREEMENT, NOT AN UNFAIR LABOR
PRACTICE. — The dismissal of an employee by the company pursuant to a labor union's demand in accordance with a union security
agreement does not constitute unfair labor practice.

14. ID.; ID.; ID.; DISMISSAL; COMPANY OFFICIALS, NOT PERSONALLY LIABLE FOR DAMAGES ON ACCOUNT OF EMPLOYEES'
DISMISSAL. — Lastly, the Court is of the opinion, and so holds, that respondent company officials cannot be held personally liable for
damages on account of the employees' dismissal because the employer corporation has a personality separate and distinct from its
officers who merely acted as its agents.

15. ID.; ID.; ID.; EMPLOYEE DISMISSED WITHOUT PRIOR NOTICE, ENTITLED TO BACKWAGES. — In Ruben Serrano vs. NLRC and
Isetann Department Store (G.R. No. 117040, January 27, 2000), the Court ruled that an employee who is dismissed, whether or not
for just or authorized cause but without prior notice of his termination, is entitled to full backwages from the time he was terminated
until the decision in his case becomes final, when the dismissal was for cause; and in case the dismissal was without just or valid
cause, the backwages shall be computed from the time of his dismissal until his actual reinstatement. In the case at bar, where the
requirement of notice and hearing was not complied with, the aforecited doctrine laid down in theSerrano case applies. aDcHIC

DECISION

PURISIMA, J p:

At bar is a Petition for Certiorari under Rule 65 of the Revised Rules of Court to annul the decision of the National Labor Relations
Commission in an unfair labor practice case instituted by a local union against its employer company and the officers of its national
federation.

The petitioner, Malayang Samahan ng mga Manggagawa sa M. Greenfield, Inc., (B) (MSMG), hereinafter referred to as the "local
union," is an affiliate of the private respondent, United Lumber and General Workers of the Philippines (ULGWP), referred to as the
"federation." The collective bargaining agreement MSMG and M Greenfield, Inc. names the parties as follows: LLpr

"This agreement made and entered into by and between:

M. GREENFIELD, INC. (B) a corporation duly organized in accordance with the laws of the Republic of
the Philippines with office address at Km. 14, Merville Road, Parañaque, Metro Manila, represented in
this act by its General Manager, Mr. Carlos T. Javelosa, hereinafter referred to as the Company;

-and-

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (B) (MSMG)/UNITED LUMBER AND

GENERAL WORKERS OF THE PHILIPPINES (ULGWP), a legitimate labor organization with address at
Suite 404, Trinity Building, T.M. Kalaw Street, Manila, represented in this act by a Negotiating
Committee headed by its National President, Mr. Godofredo Paceno, Sr. referred to in this Agreement as
the UNION." 1

The CBA includes, among others, the following pertinent provisions:

Article II-Union Security

SECTION 1. Coverage and Scope. — All employees who are covered by this Agreement and presently members
of the UNION shall remain members of the UNION for the duration of this Agreement as a condition precedent to
continued employment with the COMPANY.

xxx xxx xxx

xxx xxx xxx

SECTION 4. Dismissal. — Any such employee mentioned in Section 2 hereof, who fails to maintain his
membership in the UNION for non-payment of UNION dues, for resignation and for violation of Union's
Constitution and By-Laws and any new employee as defined in Section 2 of this Article shall upon written notice
of such failure to join or to maintain membership in the UNION and upon written recommendation to the
COMPANY by the UNION, be dismissed from the employment by the COMPANY; provided, however, that the
UNION shall hold the COMPANY free and blameless from any and all liabilities that may arise should the
dismissed employee question, in any manner, his dismissal; provided, further that the matter of the employee's
 dismissal under this Article may be submitted as a grievance under Article XIII and, provided, finally, that no
such written recommendation shall be made upon the COMPANY nor shall COMPANY be compelled to act upon
any such recommendation within the period of sixty (60) days prior to the expiry date of this Agreement
conformably to law." dctai

Article IX

SECTION 4. Program Fund. — The Company shall provide the amount of P10,000.00 a month for a continuing
labor education program which shall be remitted to the Federation . . . ." 2

On September 12, 1986, a local union election was held under the auspices of the ULGWP wherein the herein petitioner, Beda
Magdalena Villanueva, and the other union officers were proclaimed as winners. Minutes of said election were duly filed with the
Bureau of Labor Relations on September 29, 1986. LLphil

On March 21, 1987, a Petition for Impeachment was filed with the national federation ULGWP by the defeated candidates in the
aforementioned election.

On June 16, 1987, the federation conducted an audit of the local union-funds. The investigation did not yield any unfavorable result
and the local union officers were cleared of the charges of anomaly in the custody, handling and disposition of the union funds.

The 14 defeated candidates filed a Petition for Impeachment/Expulsion of the local union officers with the DOLE NCR on November 5,
1987, docketed as NCR-OD-M-11-780-87. However, the same was dismissed on March 2, 1988, by Med-Arbiter Renato Parungo for
failure to substantiate the charges and to present evidence in support of the allegations. Cdpr

On April 17, 1988, the local union held a general membership meeting at the Caruncho Complex in Pasig. Several union members
failed to attend the meeting, prompting the Executive Board to create a committee tasked to investigate the non-attendance of
several union members in the said assembly, pursuant to Sections 4 and 5, Article V of the Constitution and By-Laws of the union,
which read:

"SEKSYON 4. Ang mga kinukusang hindi pagdalo o hindi paglahok sa lahat ng hakbangin ng unyon ng sinumang
kasapi o pinuno ay maaaring maging sanhi ng pagtitiwalag o pagpapataw ng multa ng hindi hihigit sa P50.00 sa
bawat araw na nagkulang.

SEKSYON 5. Ang sinumang dadalo na aalis ng hindi pa natatapos ang pulong ay ituturing na pagliban at
maparusahan ito ng alinsunod sa Article V, Seksyong 4 ng Saligang Batas na ito. Sino mang kasapi o pisyales na
mahuli ang dating sa takdang oras ng di lalampas sa isang oras ay magmumulta ng P25.00 at babawasin sa
sahod sa pamamagitan ng salary deduction at higit sa isang oras ng pagdating ng huli ay ituturing na pagliban. 3

On June 27, 1988, the local union wrote respondent a letter requesting it to deduct the union fines from the wages/salaries of those
union members who failed to attend the general membership meeting. A portion of the said letter:

"xxx xxx xxx

In connection with Section 4, Article II of our existing Collective Bargaining Agreement, please deduct the
amount of P50.00 from each of the union members named in said annexes on the payroll of July 2-8, 1988 as
fine for their failure to attend said general membership meeting." 4

In a Memorandum dated July 3, 1988, the Secretary General of the national federation, Godofredo Paceño, Jr. disapproved the
resolution of the local union imposing the P50.00 fine. The union officers protested such action by the Federation in a Reply dated
July 4, 1988.

On July 11, 1988, the Federation wrote respondent company a letter advising the latter not to deduct the fifty-peso fine from the
salaries of the union members requesting that:

" . . . any and all future representations by MSMG affecting a number of members be first cleared from the
federation before corresponding action by the Company." 5

The following day, respondent company sent a reply to petitioner union's request in a letter, stating that it cannot deduct fines from
the employees' salary without going against certain laws. The company suggested that the union refer the matter to the proper
government office for resolution in order to avoid placing the company in the middle of the issue. dctai

The imposition of P50.00 fine became the subject of bitter disagreement between the Federation and the local union culminating in
the latter's declaration of general autonomy from the former through Resolution No. 10 passed by the local executive board and
ratified by the general membership on July 16, 1988.

In retaliation, the national federation asked respondent company to stop the remittance of the local union's share in the education
funds effective August 1988. This was objected to by the local union which demanded that the education fund be remitted to it in
full.

The company was thus constrained to file a Complaint for Interpleader with a Petition for Declaratory Relief with the Med-Arbitration
Branch of the Department of Labor and Employment, docketed as Case No. OD-M-8-435-88. This was resolved on October 28, 1988,
by Med-Arbiter Anastacio Bactin in an Order, disposing thus:

"WHEREFORE, premises considered, it is hereby ordered:

1. That the United Lumber and General Workers of the Philippines (ULGWP) through its local union officers shall
administer the collective bargaining agreement (CBA).

2. That petitioner company shall remit the P10,000.00 monthly labor education program fund to the ULGWP
subject to the condition that it shall use the said amount for its intended purpose.

3. That the Treasurer of the MSMG shall be authorized to collect from the 356 union members the amount of
P50.00 as penalty for their failure to attend the general membership assembly on April 17, 1988.

However, if the MSMG Officers could present the individual written authorizations of the 356 union members,
then the company is obliged to deduct from the salaries of the 356 union members the P50.00 fine." 6

On appeal, Director Pura-Ferrer Calleja issued a Resolution dated February 7, 1989, which modified in part the earlier disposition, to
wit:

"WHEREFORE, premises considered, the appealed portion is hereby modified to the extent that the company
should remit the amount of five thousand pesos (P5,000.00) of the P10,000.00 monthly labor education program
fund to ULGWP and the other P5,000.00 to MSMG, both unions to use the same for its intended purpose." 7
Meanwhile, on September 2, 1988, several local unions (Top Form, M. Greenfield, Grosby, Triumph International, General Milling,
and Vander Hons chapters) filed a Petition for Audit and Examination of the federation and education funds of ULGWP which was
granted by Med-Arbiter Rasidali Abdullah on December 25, 1988 in an Order which directed the audit and examination of the books
of account of ULGWP.

On September 30, 1988, the officials of ULGWP called a Special National Executive Board Meeting at Nasipit, Agusan del Norte where
a Resolution was passed placing the MSMG under trusteeship and appointing respondent Cesar Clarete as administrator.

On October 27, 1988, the said administrator wrote the respondent company informing the latter of its designation of a certain
Alfredo Kalingking as local union president and "disauthorizing" the incumbent union officers from representing the employees. This
action by the national federation was protested by the petitioners in a letter to respondent company dated November 11,
1988. 1cdrep

On November 13, 1988, the petitioner union officers received identical letters from the administrator requiring them to explain within
72 hours why they should not be removed from their office and expelled from union membership.

On November 26, 1988, petitioners replied:

(a) Questioning the validity of the alleged National Executive Board Resolution placing their union under
trusteeship;

(b) Justifying the action of their union in declaring a general autonomy from ULGWP due to the latter's inability
to give proper educational, organizational and legal services to its affiliates and the pendency of the audit of the
federation funds;

(c) Advising that their union did not commit any act of disloyalty as it has remained an affiliate of ULGWP;

(d) Giving ULGWP a period of five (5) days to cease and desist from further committing acts of coercion,
intimidation and harassment. 8

However, as early as November 21, 1988, the officers were expelled from the ULGWP. The termination letter read:

"Effective today, November 21, 1988, you are hereby expelled from UNITED LUMBER AND GENERAL WORKERS
OF THE PHILIPPINES (ULGWP) for committing acts of disloyalty and/or acts inimical to the interest and violative
to the Constitution and by-laws of your federation.

You failed and/or refused to offer an explanation inspite of the time granted to you.

Since you are no longer a member of good standing, ULGWP is constrained to recommend for your termination
from your employment, and provided in Article II, Section 4, known as UNION SECURITY, in the Collective
Bargaining Agreement." 9

On the same day, the federation advised respondent company of the expulsion of the 30 union officers and demanded their
separation from employment pursuant to the Union Security Clause in their collective bargaining agreement. This demand was
reiterated twice, through letters dated February 21 and March 4, 1989, respectively, to respondent company. cdtai

Thereafter, the Federation filed a Notice of Strike with the National Conciliation and Mediation Board to compel the company to effect
the immediate termination of the expelled union officers.

On March 7, 1989, under the pressure of a threatened strike, respondent company terminated the 30 union officers from
employment, serving them identical copies of the termination letter reproduced below:

We received a demand letter dated 21 November 1988 from the United Lumber and General Workers of the
Philippines (ULGWP) demanding for your dismissal from employment pursuant to the provisions of Article II,
Section 4 of the existing Collective Bargaining Agreement (CBA). In the said demand letter, ULGWP informed us
that as of November 21, 1988, you were expelled from the said federation "for committing acts of disloyalty
and/or inimical to the interest of ULGWP and violative to its Constitution and By-laws particularly Article V,
Section 6, 9, and 12, Article XIII, Section 8." LexLib

In subsequent letters dated 21 February and 4 March 1989, the ULGWP reiterated its demand for your dismissal,
pointing out that notwithstanding your expulsion from the federation, you have continued in your employment
with the company in violation of Sec. 1 and 4 of Article II of our CBA, and of existing provisions of law.

In view thereof, we are left with no alternative but to comply with the provisions of the Union Security Clause of
our CBA. Accordingly, we hereby serve notice upon you that we are dismissing you from your employment with
M. Greenfield, Inc., pursuant to Sections 1 and 4 Article II of the CBA effective immediately." 1 0

On that same day, the expelled union officers assigned in the first shift were physically or bodily brought out of the company
premises by the company's security guards. Likewise, those assigned to the second shift were not allowed to report for work. This
provoked some of the members of the local union to demonstrate their protest for the dismissal of the said union officers. Some
union members left their work posts and walked out of the company premises. cdasia

On the other hand, the Federation, having achieved its objective, withdrew the Notice of Strike filed with the NCMB.

On March 8, 1989, the petitioners filed a Notice of Strike with the NCMB, DOLE, Manila, docketed as Case No. NCMB-NCR-NS-03-
216-89, alleging the following grounds for the strike:

(a) Discrimination

(b) Interference in union activities

(c) Mass dismissal of union officers and shop stewards

(d) Threats, coercion and intimidation

(e) Union busting

The following day, March 9, 1989, a strike vote referendum was conducted and out of 2,103 union members who cast their votes,
2,086 members voted to declare a strike.

On March 10, 1989, the thirty (30) dismissed union officers filed an urgent petition, docketed as Case No. NCMB-NCR-NS-03-216-89,
with the Office of the Secretary of the Department of Labor and Employment praying for the suspension of the effects of their
termination from employment. However, the petition was dismissed by then Secretary Franklin Drilon on April 11, 1989, the
pertinent portion of which stated as follows: LLjur
 "At this point in time, it is clear that the dispute at M. Greenfield is purely an intra-union matter. No mass lay-off
is evident as the terminations have been limited to those allegedly leading the secessionist group leaving MSMG-
ULGWP to form a union under the KMU. . . .

xxx xxx xxx

WHEREFORE, finding no sufficient jurisdiction to warrant the exercise of our extraordinary authority under Article
277 (b) of the Labor Code, as amended, the instant Petition is hereby DISMISSED for lack of merit.

SO ORDERED." 11

On March 13 and 14, 1989, a total of 78 union shop stewards were placed under preventive suspension by respondent company.
This prompted the union members to again stage a walk-out and resulted in the official declaration of strike at around 3:30 in the
afternoon of March 14, 1989. The strike was attended with violence, force and intimidation on both sides resulting to physical injuries
to several employees, both striking and non-striking, and damage to company properties. cdll

The employees who participated in the strike and allegedly figured in the violent incident were placed under preventive suspension
by respondent company. The company also sent return to-work notices to the home addresses of the striking employees thrice
successively, on March 27, April 8 and April 31, 1989, respectively. However, respondent company admitted that only 261
employees were eventually accepted back to work. Those who did not respond to the return-to-work notice were sent termination
letters dated May 17, 1989, reproduced below: llcd

M. Greenfield Inc., (B)

Km. 14, Merville Rd., Parañaque, M.M.

May 17, 1989

xxx xxx xxx

On March 14, 1989, without justifiable cause and without due notice, you left your work assignment at the
prejudice of the Company's operations. On March 27, April 11, and April 21, 1989, we sent you notices to report
to the Company. Inspite of your receipt of said notices, we have not heard from you up to this date.

Accordingly, for your failure to report, it is construed that you have effectively abandoned your employment and
the Company is, therefore, constrained to dismiss you for said cause

Very truly yours,

M. GREENFIELDS, INC., (B)

By:

WENZEL STEPHEN LIGOT

Asst HRD Manager" 12

On August 7, 1989, the petitioners filed a verified complaint with the Arbitration Branch, National Capital Region, DOLE, Manila,
docketed as Case No. NCR -00-09-04199-89, charging private respondents of unfair labor practice which consists of union busting,
illegal dismissal, illegal suspension, interference in union activities, discrimination, threats, intimidation, coercion, violence, and
oppression. prcd

After the filing of the complaint, the lease contracts on the respondent company's office and factory at Merville Subdivision,
Parañaque expired and were not renewed. Upon demand of the owners of the premises, the company was compelled to vacate its
office and factory.

Thereafter, the company transferred its administration and account/client servicing department at AFP-RSBS Industrial Park in
Taguig, Metro Manila. For failure to find a suitable place in Metro Manila for relocation of its factory and manufacturing operations,
the company was constrained to move the said departments to Tacloban, Leyte. Hence, on April 16, 1990, respondent company
accordingly notified its employees of a temporary shutdown in operations. Employees who were interested in relocating to Tacloban
were advised to enlist on or before April 23, 1990. prLL

The complaint for unfair labor practice was assigned to Labor Arbiter Manuel Asuncion but was thereafter reassigned to Labor Arbiter
Cresencio Ramos when respondents moved to inhibit him from acting on the case.

On December 15, 1992, finding the termination to be valid in compliance with the union security clause of the collective bargaining
agreement, Labor Arbiter Cresencio Ramos dismissed the complaint.

Petitioners then appealed to the NLRC. During its pendency, Commissioner Romeo Putong retired from the service, leaving only two
commissioners, Commissioner Vicente Veloso III and Hon. Chairman Bartolome Carale in the First Division. When Commissioner
Veloso inhibited himself from the case, Commissioner Joaquin Tanodra of the Third Division was temporarily designated to sit in the
First Division for the proper disposition of the case. prLL

The First Division affirmed the Labor Arbiter's disposition. With the denial of their motion for reconsideration on January 28, 1994,
petitioners elevated the case to this Court, attributing grave abuse of discretion to public respondent NLRC in:

I. UPHOLDING THE DISMISSAL OF THE UNION OFFICERS BY RESPONDENT COMPANY AS VALID;

II. HOLDING THAT THE STRIKE STAGED BY THE PETITIONERS AS ILLEGAL;

III. HOLDING THAT THE PETITIONER EMPLOYEES WERE DEEMED TO HAVE ABANDONED THEIR WORK AND
HENCE, VALIDLY DISMISSED BY RESPONDENT COMPANY; AND

IV. NOT FINDING RESPONDENT COMPANY AND RESPONDENT FEDERATION OFFICERS GUILTY OF ACTS OF
UNFAIR LABOR PRACTICE.

Notwithstanding the several issues raised by the petitioners and respondents in the voluminous pleadings presented before the NLRC
and this Court, they revolve around and proceed from the issue of whether or not respondent company was justified in dismissing
petitioner employees merely upon the labor federation's demand for the enforcement of the union security clause embodied in their
collective bargaining agreement. prLL

Before delving into the main issue, the procedural flaw pointed out by the petitioners should first be resolved.
Petitioners contend that the decision rendered by the First Division of the NLRC is not valid because Commissioner Tanodra, who is
from the Third Division, did not have any lawful authority to sit, much less write the ponencia, on a case pending before the First
Division. It is claimed that a commissioner from one division of the NLRC cannot be assigned or temporarily designated to another
division because each division is assigned a particular territorial jurisdiction. Thus, the decision rendered did not have any legal effect
at all for being irregularly issued. cdphil

Petitioners' argument is misplaced. Article 213 of the Labor Code in enumerating the powers of the Chairman of the National Labor
Relations Commission provides that:

"The concurrence of two (2) Commissioners of a division shall be necessary for the pronouncement of a
judgment or resolution. Whenever the required membership in a division is not complete and the concurrence of
two (2) commissioners to arrive at a judgment or resolution cannot be obtained, the Chairman shall designate
such number of additional Commissioners from the other divisions as may be necessary."

It must be remembered that during the pendency of the case in the First Division of the NLRC, one of the three commissioners,
Commissioner Romeo Putong, retired, leaving Chairman Bartolome Carale and Commissioner Vicente Veloso III. Subsequently,
Commissioner Veloso inhibited himself from the case because the counsel for the petitioners was his former classmate in law school.
The First Division was thus left with only one commissioner. Since the law requires the concurrence of two commissioners to arrive at
a judgment or resolution, the Commission was constrained to temporarily designate a commissioner from another division to
complete the First Division. There is nothing irregular at all in such a temporary designation for the law empowers the Chairman to
make temporary assignments whenever the required concurrence is not met. The law does not say that a commissioner from the
first division cannot be temporarily assigned to the second or third division to fill the gap or vice versa. The territorial divisions do not
confer exclusive jurisdiction to each division and are merely designed for administrative efficiency. cdll

Going into the merits of the case, the court finds that the Complaint for unfair labor practice filed by the petitioners against
respondent company which charges union busting, illegal dismissal, illegal suspension, interference in union activities, discrimination,
threats, intimidation, coercion, violence, and oppression actually proceeds from one main issue which is the termination of several
employees by respondent company upon the demand of the labor federation pursuant to the union security clause embodied in their
collective bargaining agreement. prLL

Petitioners contend that their dismissal from work was effected in an arbitrary, hasty, capricious and illegal manner because it was
undertaken by the. respondent company without any prior administrative investigation; that, had respondent company conducted
prior independent investigation it would have found that their expulsion from the union was unlawful similarly for lack of prior
administrative investigation; that the federation cannot recommend the dismissal of the union officers because it was not a principal
party to the collective bargaining agreement between the company and the union; that public respondents acted with grave abuse of
discretion when they declared petitioners' dismissals as valid and the union strike as illegal and in not declaring that respondents
were guilty of unfair labor practice. cdasia

Private respondents, on the other hand, maintain that the thirty dismissed employees who were former officers of the federation
have no cause of action against the company, the termination of their employment having been made upon the demand of the
federation pursuant to the union security clause of the CBA; the expelled officers of the local union were accorded due process of law
prior to their expulsion from their federation; that the strike conducted by the petitioners was illegal for noncompliance with the
requirements; that the employees who participated in the illegal strike and in the commission of violence thereof were validly
terminated from work; that petitioners were deemed to have abandoned their employment when they did not respond to the three
return-to-work notices sent to them; that petitioner labor union has no legal personality to file and prosecute the case for and on
behalf of the individual employees as the right to do so is personal to the latter; and that, the officers of respondent company cannot
be liable because as mere corporate officers, they acted within the scope of their authority. cdrep

Public respondent, through the Labor Arbiter, ruled that the dismissed union officers were validly and legally terminated because the
dismissal was effected in compliance with the union security clause of the CBA which is the law between the parties. And this was
affirmed by the Commission on appeal. Moreover, the Labor Arbiter declared that notwithstanding the lack of a prior administrative
investigation by respondent company, under the union security clause provision in the CBA, the company cannot look into the
legality or illegality of the recommendation to dismiss by the union and the obligation to dismiss is ministerial on the part of the
company. 13

This ruling of the NLRC is erroneous. Although this Court has ruled that union security clauses embodied in the collective bargaining
agreement may be validly enforced and that dismissals pursuant thereto may likewise be valid, this does not erode the fundamental
requirement of due process. The reason behind the enforcement of union security clauses which is the sanctity and inviolability of
contracts 14 cannot override one's right to due process.

In the case of Cariño vs. National Labor Relations Commission, 15 this Court pronounced that while the company, under a
maintenance of membership provision of the collective bargaining agreement, is bound to dismiss any employee expelled by the
union for disloyalty upon its written request, this undertaking should not be done hastily and summarily. The company acts in bad
faith in dismissing a worker without giving him the benefit of a hearing.prcd

"The power to dismiss is a normal prerogative of the employer. However, this is not without limitation. The
employer is bound to exercise caution in terminating the services of his employees especially so when it is made
upon the request of a labor union pursuant to the Collective Bargaining Agreement, . . . . Dismissals must not be
arbitrary and capricious. Due process must be observed in dismissing an employee because it affects not only his
position but also his means of livelihood. Employers should respect and protect the rights of their employees,
which include the right to labor."

In the case under scrutiny, petitioner union officers were expelled by the federation for allegedly committing acts of disloyalty and/or
inimical to the interest of ULGWP and in violation of its Constitution and By-laws. Upon demand of the federation, the company
terminated the petitioners without conducting a separate and independent investigation. Respondent company did not inquire into
the cause of the expulsion and whether or not the federation had sufficient grounds to effect the same. Relying merely upon the
federation's allegations, respondent company terminated petitioners from employment when a separate inquiry could have revealed
if the federation had acted arbitrarily and capriciously in expelling the union officers. Respondent company's allegation that
petitioners were accorded due process is belied by the termination letters received by the petitioners which state that the dismissal
shall be immediately effective. cdtai

As held in the aforecited case of Cariño, "the right of an employee to be informed of the charges against him and to reasonable
opportunity to present his side in a controversy with either the company or his own union is not wiped away by a union security
clause or a union shop clause in a collective bargaining agreement. An employee is entitled to be protected not only from a company
which disregards his rights but also from his own union the leadership of which could yield to the temptation of swift and arbitrary
expulsion from membership and mere dismissal from his job."

While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union security clause of
the collective bargaining agreement upon the recommendation by the union, this dismissal should not be done hastily and summarily
thereby eroding the employees' right to due process, self-organization and security of tenure. The enforcement of union security
clauses is authorized by law provided such enforcement is not characterized by arbitrariness, and always with due process. 16 Even
on the assumption that the federation had valid grounds to expel the union officers, due process requires that these union officers be
accorded a separate hearing by respondent company. LLjur

In its decision, public respondent declared that if complainants (herein petitioners) have any recourse in law, their right of action is
against the federation and not against the company or its officers, relying on the findings of the Labor Secretary that the issue of
expulsion of petitioner union intra-union matter.

Again, such a contention is untenable. While its is true that the issue of expulsion of the local union officers is originally between the
local union and the federation, hence, intra-union in character, the issue was later on converted into a termination dispute when the
company dismissed the petitioners from work without the benefit of a separate notice and hearing. As a matter of fact, the records
reveal that the termination was effective on the same day that the termination notice was served on the petitioners. cdtai

In the case of Liberty Cotton Mills Workers Union vs. Liberty Cotton Mills, Inc., 17 the Court held the company liable for payment of
backwages for having acted in bad faith in effecting the dismissal of the employees.

". . . Bad faith on the part of the respondent company may be gleaned from the fact that the petitioner workers
were dismissed hastily and summarily. At best, it was guilty of a tortious act, for which it must assume solidary
liability, since it apparently chose to summarily dismiss the workers at the union's instance secure in the union's
contractual undertaking that the union would hold it 'free from any liability' arising from such dismissal."

Thus, notwithstanding the fact that the dismissal was at the instance of the federation and that it undertook to hold the company
free from any liability resulting from such a dismissal, the company may still be held liable if it was remiss in its duty to accord the
would-be dismissed employees their right to be heard on the matter.

Anent petitioners contention that the federation was not a principal party to the collective bargaining agreement between the
company and the union, suffice it to say that the matter was already ruled upon in the Interpleader case filed by respondent
company. Med-Arbiter Anastacio Bactin thus ruled:

After a careful examination of the facts and evidences presented by the parties, this Officer hereby renders its
decision as follows:

1.) It appears on record that in the Collective Bargaining Agreement (CBA) which took effect on July 1, 1986, the
contracting parties are M. Greenfield, Inc. (B) and Malayang Samahan ng Mga Manggagawa sa M. Greenfield,
Inc. (B) (MSMG)/United Lumber and General Workers of the Philippines (ULGWP). However, MSMG was not yet a
registered labor organization at the time of the signing of the CBA. Hence, the union referred to in the CBA is the
ULGWP." 18

Likewise on appeal, Director Pura Ferrer-Calleja put the issue to rest as follows:

It is undisputed that ULGWP is the certified sole and exclusive collective bargaining agent of all the regular rank-
and-file workers of the company, M. Greenfield, Inc. (pages 31-32 of the records).

It has been established also that the company and ULGWP signed a 3-year collective bargaining agreement
effective July 1, 1986 up to June 30, 1989. 19

Although the issue of whether or not the federation had reasonable grounds to expel the petitioner union officers is properly within
the original and exclusive jurisdiction of the Bureau of Labor Relations, being an intra-union conflict, this Court deems it justifiable
that such issue be nonetheless ruled upon, as the Labor Arbiter did, for to remand the same to the Bureau of Labor Relations would
be to intolerably delay the case. cdtai

The Labor Arbiter found that petitioner union officers were justifiably expelled from the federation for committing acts of disloyalty
when it "undertook to disaffiliate from the federation by charging ULGWP with failure to provide any legal, educational or
organizational support to the local. . . . and declared autonomy, wherein they prohibit the federation from interfering in any internal
and external affairs of the local union." 20

It is well-settled that findings of facts of the NLRC are entitled to great respect and are generally binding on this Court, but it is
equally well-settled that the Court will not uphold erroneous conclusions of the NLRC as when the Court finds insufficient or
insubstantial evidence on record to support those factual findings. The same holds true when it is perceived that far too much is
concluded, inferred or deduced from the bare or incomplete facts appearing of record. 21

In its decision, the Labor Arbiter declared that the act of disaffiliation and declaration of autonomy by the local union was part of its
"plan to take over the respondent federation." This is purely conjecture and speculation on the part of public respondent, totally
unsupported by the evidence. LLpr

A local union has the right to disaffiliate from its mother union or declare its autonomy. A local union, being a separate and voluntary
association, is free to serve the interests of all its members including the freedom to disaffiliate or declare its autonomy from the
federation which it belongs when circumstances warrant, in accordance with the constitutional guarantee of freedom of
association. 22

The purpose of affiliation by a local union with a mother union or a federation

". . . is to increase by collective action the bargaining power in respect of the terms and conditions of labor. Yet
the locals remained the basic units of association, free to serve their own and the common interest of all, subject
to the restraints imposed by the Constitution and By-Laws of the Association, and free also to renounce the
affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence." 23

Thus, a local union which has affiliated itself with a federation is free to sever such affiliation anytime and such disaffiliation cannot
be considered disloyalty. In the absence of specific provisions in the federation's constitution prohibiting disaffiliation or the
declaration of autonomy of a local union, a local may dissociate with its parent union. 24

The evidence on hand does not show that there is such a provision in ULGWP's constitution. Respondents' reliance upon Article V,
Section 6, of the federation's constitution is not right because said section, in fact, bolsters the petitioner union's claim of its right to
declare autonomy:

SECTION 6. The autonomy of a local union affiliated with ULGWP shall be respected insofar as it pertains to its
internal affairs, except as provided elsewhere in this Constitution.

There is no disloyalty to speak of, neither is there any violation of the federation's constitution because there is nothing in the
said constitution which specifically prohibits disaffiliation or declaration of autonomy. Hence, there cannot be any valid dismissal
because Article II, Section 4 of the union security clause in the CBA limits the dismissal to only three (3) grounds, to wit: failure
to maintain membership in the union (1) for non-payment of union dues, (2) for resignation; and (3) for violation of the union's
Constitution and By-Laws. prcd
To support the finding of disloyalty, the Labor Arbiter gave weight to the fact that on February 26, 1989, the petitioners declared as
vacant all the responsible positions of ULGWP, filled these vacancies through an election and filed a petition for the registration of
UWP as a national federation. It should be pointed out, however, that these occurred after the federation had already expelled the
union officers. The expulsion was effective November 21, 1988. Therefore, the act of establishing a different federation, entirely
separate from the federation which expelled them, is but a normal retaliatory reaction to their expulsion.

With regard to the issue of the legality or illegality of the strike, the Labor Arbiter held that the strike was illegal for the following
reasons: (1) it was based on an intra-union dispute which cannot properly be the subject of a strike, the right to strike being limited
to cases of bargaining deadlocks and unfair labor practice (2) it was made in violation of the "no strike, no lock-out" clause in the
CBA, and (3) it was attended with violence, force and intimidation upon the persons of the company officials, other employees
reporting for work and third persons having legitimate business with the company, resulting to serious physical injuries to several
employees and damage to company property.

On the submission that the strike was illegal for being grounded on a non-strikeable issue, that is, the intra-union conflict between
the federation and the local union, it bears reiterating that when respondent company dismissed the union officers, the issue was
transformed into a termination dispute and brought respondent company into the picture. Petitioners believed in good faith that in
dismissing them upon request by the federation, respondent company was guilty of unfair labor practice in that it violated the
petitioner's right to self-organization. The strike was staged to protest respondent company's act of dismissing the union officers.
Even if the allegations of unfair labor practice are subsequently found out to be untrue, the presumption of legality of the strike
prevails. 25

Another reason why the Labor Arbiter declared the strike illegal is due to the existence of a no strike no lockout provision in the CBA.
Again, such a ruling is erroneous. A no strike, no lock out provision can only be invoked when the strike is economic in nature, i.e. to
force wage or other concessions from the employer which he is not required by law to grant. 26 Such a provision cannot be used to
assail the legality of a strike which is grounded on unfair labor practice, as was the honest belief of herein petitioners. Again, whether
or not there was indeed unfair labor practice does not affect the strike. prLL

On the allegation of violence committed in the course of the strike, it must be remembered that the Labor Arbiter and the
Commission found that "the parties are agreed that there were violent incidents . . . resulting to injuries to both sides, the union and
management." 27 The evidence on record show that the violence cannot be attributed to the striking employees alone for the
company itself employed hired men to pacify the strikers. With violence committed on both sides, the management and the
employees, such violence cannot be a ground for declaring the strike as illegal. Cdpr

With respect to the dismissal of individual petitioners, the Labor Arbiter declared that their refusal to heed respondent's recall to
work notice is a clear indication that they were no longer interested in continuing their employment and is deemed abandonment. It
is admitted that three return-to-work notices were sent by respondent company to the striking employees on March 27, April 11, and
April 21, 1989 and that 261 employees who responded to the notice were admitted back to work.

However, jurisprudence holds that for abandonment of work to exist, it is essential (1) that the employee must have failed to report
for work or must have been absent without valid or justifiable reason; and (2) that there must have been a clear intention to sever
the employer-employee relationship manifested by some overt acts. 28 Deliberate and unjustified refusal on the part of the
employee to go back to his work post and resume his employment must be established. Absence must be accompanied by overt acts
unerringly pointing to the fact that the employee simply does not want to work anymore. 29 And the burden of proof to show that
there was unjustified refusal to go back to work rests on the employer.

In the present case, respondents failed to prove that there was a clear intention on the part of the striking employees to sever their
employer-employee relationship. Although admittedly the company sent three return to work notices to them, it has not been
substantially proven that these notices were actually sent and received by the employees. As a matter of fact, some employees deny
that they ever received such notices. Others alleged that they were refused entry to the company premises by the security guards
and were advised to secure a clearance from ULGWP and to sign a waiver. Some employees who responded to the notice were
allegedly told to wait for further notice from respondent company as there was lack of work.

Furthermore, this Court has ruled that an employee who took steps to protest his lay-off cannot be said to have abandoned his
work. 30 The filing of a complaint for illegal dismissal is inconsistent with the allegation of abandonment. In the case under
consideration, the petitioners did, in fact, file a complaint when they were refused reinstatement by respondent company.

Anent public respondents finding that there was no unfair labor practice on the part of respondent company and federation officers,
the Court sustains the same. As earlier discussed, union security clauses in collective bargaining agreements, if freely and voluntarily
entered into, are valid and binding. Corollarily, dismissals pursuant to union security clauses are valid and legal subject only to the
requirement of due process, that is, notice and hearing prior to dismissal. Thus, the dismissal of an employee by the company
pursuant to a labor union's demand in accordance with a union security agreement does not constitute unfair labor practice. 31

However, the dismissal was invalidated in this case because of respondent company's failure to accord petitioners with due process,
that is, notice and hearing prior to their termination. Also, said dismissal was invalidated because the reason relied upon by
respondent Federation was not valid. Nonetheless, the dismissal still does not constitute unfair labor practice.

Lastly, the Court is of the opinion, and so holds, that respondent company officials cannot be held personally liable for damages on
account of the employees' dismissal because the employer corporation has a personality separate and distinct from its officers who
merely acted as its agents.

It has come to the attention of this Court that the 30-day prior notice requirement for the dismissal of employees has been
repeatedly violated and the sanction imposed for such violation enunciated in Wenphil Corporation vs. NLRC 32 has become an
ineffective deterrent. Thus, the Court recently promulgated a decision to reinforce and make more effective the requirement of notice
and hearing, a procedure that must be observed before termination of employment can be legally effected.

In Ruben Serrano vs. NLRC and Isetann Department Store. (G.R. No. 117040 January 27, 2000), the Court ruled that an employee
who is dismissed, whether or not for just or authorized cause but without prior notice of his termination, is entitled to full backwages
from the time he was terminated until the decision in his case becomes final, when the dismissal was for cause, and in case the
dismissal was without just or valid cause, the backwages shall be computed from the time of his dismissal until his actual
reinstatement. In the case at bar, where the requirement of notice and hearing was not complied with, the aforecited doctrine laid
down in the Serrano case applies.

WHEREFORE, the Petition is GRANTED; the decision of the National Labor Relations Commission in Case No. NCR-00-09-04199-89 is
REVERSED and SET ASIDE; and the respondent company is hereby ordered to immediately reinstate the petitioners to their
respective positions. Should reinstatement be not feasible, respondent company shall pay separation pay of one month salary for
every year of service. Since petitioners were terminated without the requisite written notice at least 30 days prior to their
termination, following the recent ruling in the case of Ruben Serrano vs. National Labor Relations Commission and Isetann
Department Store, the respondent company is hereby ordered to pay full backwages to petitioner-employees while the Federation is
also ordered to pay full backwages to petitioner-union officers who were dismissed upon its instigation. Since the dismissal of
petitioners was without cause, backwages shall be computed from the time the herein petitioner employees and union officers were
dismissed until their actual reinstatement. Should reinstatement be not feasible, their backwages shall be computed from the time
petitioners were terminated until the finality of this decision. Costs against the respondent company. LLjur

SO ORDERED.

Gonzaga-Reyes, J., concur.

Melo, J., concurs in the result.

Vitug and Panganiban, JJ., reiterate their separate opinion in Serrano vs. NLRC (G.R. 117040, 27 Jan. 2000)

||| (Malayang Samahan Ng Mga Manggagawa Sa M. Greenfield v. Ramos, G.R. No. 113907, [February 28, 2000], 383 PHIL 329-374)

THIRD DIVISION

[G.R. No. 113907. April 20, 2001.]

MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M. GREENFIELD (MSMG-UWP), ITS PRESIDENT

BEDA MAGDALENA VILLANUEVA, MARIO DAGANIO, DONATO GUERRERO, BELLA P. SANCHEZ, ELENA
TOBIS, RHODA TAMAYO, LIWAYWAY MALLILIN, ELOISA SANTOS, DOMINADOR REBULLO, JOSE
IRLAND, TEOFILA QUEJADA, VICENTE SAMONTINA, FELICITAS DURIAN, ANTONIO POLDO, ANGELINA
TUGNA, SALVADOR PENALOSA, LUZVIMINDA TUBIG, ILUMINADA RIVERA, ROMULO SUMILANG,
NENITA BARBELONIA, LEVI BASILIA, RICARDO PALAGA, MERCY ROBLES, LEODEGARIO GARIN,
DOMINGO ECLARINAL, MELCHOR GALLARDO, MARCELO GARIN, ROSALINA BAUTISTA, MARY ANN
TALIGATOS, ALEJANDRO SANTOS, ANTONIO FRAGA, LUZ GAPULTOS, MAGDALENA URSUA, EUGENIO
ORDAN, LIGAYA MANALO, PEPITO DELA PAZ, PERLITA DIMAQUIAT, MYRNA VASQUEZ, FLORENTINA
SAMPAGA, ARACELI FRAGA, MAXIMINA FAUSTINO, MARINA TAN, OLIGARIO LOMO, PRECILA
EUSEBIO, SUSAN ABOGANO, CAROLINA MANINANG, GINA GLIFONIA, OSCAR SOTTO, CELEDONA
MALIGAYA, EFREN VELASQUEZ, DELIA ANOVER, JOSEPHINE TALIMORO, MAGDALENA TABOR,
NARCISA SARMIENTO, SUSAN MACASIEB, FELICIDAD SISON, PRICELA CARTA, MILA MACAHILIG,
CORAZON NUNALA, VISITACION ELAMBRE, ELIZABETH INOFRE, VIOLETA BARTE, LUZVIMINDA
VILLOSA, NORMA SALVADOR, ELIZABETH BOGATE, MERLYN BALBOA, EUFRECINA SARMIENTO,
SIMPLICIA BORLEO, MATERNIDAD DAVID, LAILA JOP, POTENCIANA CULALA, LUCIVITA NAVARRO,
ROLANDO BOTIN, AMELITA MAGALONA, AGNES CENA, NOLI BARTOLAY, DANTE AQUINO, HERMINIA
RILLON, CANDIDA APARIJADO, LYDIA JIMENEZ, ELIZABETH ANOCHE, ALDA MURO, TERESA
VILLANUEVA, TERESITA RECUENCO, ELIZA SERRANO, ESTELLA POLINAR, GERTRUDES NUNEZ, FELIPE
BADIOLA, ROSLYN FERNANDEZ, OSCAR PAGUTA, NATIVIDAD BALIWAS, ELIZABETH BARCIBAL,
CYNTHIA ESTELLER, TEODORA SANTOS, ALICIA PILAR, MILA PATENO, GLORIA CATRIZ, MILA
MACAHILIG, ADELAIDA DE LEON, ROSENDO EDILO, ARSENIA ESPIRITU, NUMERIANO CABRERA,
CONCEPCION ARRIOLA, PAULINA DIMAPASOK, ANGELA SANGCO, PRESILA ARIAS, ZENAIDA NUNES,
EDITHA IGNACIO, ROSA GUIRON, TERESITA CANETA, ALICIA ARRO, TEOFILO RUWETAS, CARLING
AGCAOILI, ROSA NOLASCO, GERLIE PALALON, CLAUDIO DIRAS, LETICIA ALBOS, AURORA ALUBOG,
LOLITA ACALEN, GREGORIO ALIVIO, GUILLERMO ANICETA, ANGELIE ANDRADA, SUSAN ANGELES,
ISABELITA AURIN, MANUELA AVELINA, CARLING AGCAOILI, TERESITA ALANO, LOLITA AURIN,
EMMABETH ARCIAGA, CRESENCIA ACUNA, LUZVIMINDA ABINES, FLORENCIA ADALID, OLIVIA
AGUSTIN, EVANGELINE ALCORAN, ROSALINA ALFERES, LORNA AMANTE, FLORENTINA AMBITO,
JULIETA AMANONCO, CARMEN AMARILLO, JOSEFINA AMBAGAN, ZENAIDA ANAYA, MARIA ANGLO,
EDITHA ANTA ZO, MARY JANE ANTE, ANDREA AQUINO, ROWENA ARABIT, MARIETA ARAGON,
REBECCA ARCENA, LYDIA ARCIDO, FERNANDO ARENAS, GREGORIO ARGUELLES, EDITHA ARRIOLA,
EMMA ATIENZA, EMMA ATIENZA, TEODY ATIENZA, ELIZABETH AUSTRIA, DIOSA AZARES, SOLIDA
AZAINA, MILAGROS BUAG, MARIA BANADERA, EDNALYN BRAGA, OFELIA BITANGA, FREDISMINDA
BUGUIS, VIOLETA BALLESTEROS, ROSARIO BALLADJAY, BETTY BORIO, ROMANA BAUTISTA, SUSARA
BRAVO, LILIA BAHINGTING, ENIETA BALDOZA, DAMIANA BANGCORE, HERMINIA BARIL, PETRONA
BARRIOS, MILAGROS BARRAMEDA, PERLA BAUTISTA, CLARITA BAUTISTA, ROSALINA BAUTISTA,
ADELINA BELGA, CONSOLACION BENAS, MARIA BEREZO, MERCEDES BEREBER, VIOLETA BISCOCHO,
ERNESTO BRIONES, ALVINA BROSOTO, AGUSTINA BUNYI, CARMEN BUGNOT, ERLINDA BUENAFLOR,
LITA BAQUIN, CONSEJO BABOL, CRISANTA BACOLOD, CELIA DE BACTAT, MAZIMA BAGA, ELENA
BALADAD, ROSARIO BALADJAY, AMALIA BALAGTAS, ANITA BALAGTAS, MARIA BALAKIT, RUFINA
BALATAN, REBECCA BALDERAMA, AMELIA BALLESTER, BELEN BARQUIO, BERNANDITA BASILIDES,
HELEN BATO, HELEN BAUTISTA, ROMANA BAUTISTA, ALMEDA BAYTA, AVELINA BELAYON, NORMA DE
BELEN, THELMA DE BELEN, JOCELYN BELTRAN, ELENA BENITEZ, VIRGINIA BERNARDINO, MERLINA
BINUYAG, LINA BINUYA, BLESILDA BISNAR, SHIRLEY BOLIVAR, CRESENTACION MEDLO, JOCELYN
BONIFACIO, AMELIA BORBE, AMALIA BOROMEO, ZENAIDA BRAVO, RODRIGO BEULDA, TERESITA
MENDEZ, ELENA CAMAN, LALIANE CANDELARIA, MARRY CARUJANO, REVELINA CORANES, MARITESS
CABRERA, JUSTINA CLAZADA, APOLONIA DELA CRUZ, VICTORIA CRUZ, JOSEFINA DELA CRUZ,
MARITESS CATANGHAL, EDNA CRUZ, LUCIA DE CASTRO, JOSIE CARIASO, OFELIA CERVANTES,
MEDITA CORTADO, AMALIA CASAJEROS, LUCINA CASTILIO, EMMA CARPIO, ANACORITA CABALES,
YOLANDA CAMO, MILA CAMAZUELA, ANITA CANTO, ESTELA CANCERAN, FEMENCIA CANCIO, CYNTHIA
CAPALAD, MERLE CASTILLO, JESUSA CASTRO, CECILIA CASTILLO, SILVERITA CASTRODES, VIVIAN
CELLANO, NORMA CELINO, TERESITA CELSO, GLORIA COLINA, EFIPANIA CONSTANTINO, SALVACION
CONSULTA, MEDITA CORTADO, AIDA CRUZ, MARISSA DELA CRUZ, EDITO CORCILLES, JELYNE CRUZ,
ROSA CORPOS, ROSITA CUGONA, ELSE CABELLES, EMMA CADUT, VICTORIA CALANZA, BARBARA
CALATA, IMELDA CALDERON, CRISTINA CALIDGUID, EMMALINDA CAMALON, MARIA CAMERINO,
CARMENCITA CAMPO, CONNIE CANEZO, LOURDES CAPANANG, MA. MILAGROS CAPILI, MYRNA T.
CAPIRAL, FLOR SAMPAGA, SUSAN B. CARINO, ROSARIO CARIZON, VIRGINIA DEL CARMEN, EMMA
CARPIO, PRESCILA CARTA, FE CASERO, LUZ DE CASTRO, ANNA CATARONGAN, JOSEFINA CASTISIMO,
JOY MANALO, EMMIE CAWALING, JOVITA CARA, MARINA CERBITO, MARY CAREJANO, ESTELA R.
CHAVEZ, CONCEPCION PARAJA, GINA CLAUDIO, FLORDELIZA CORALES, EDITO CORCIELER, ROSA C.
CORROS, AMELIA CRUZ, JELYNE CRUZ, WILFREDO DELA CRUZ, REINA CUEVAS, MARILOU DEJECES,
JOSEPHINE DESACULA, EDITHA DEE, EDITHA DIAZ, VIRGE DOMONDON, CELSA DOROPAW, VIOLETA
DUMELINA, MARIBEL DIMATATAC, ELBERTO DAGANIO, LETECIA DAGOHOY, DINDO DALUZ, ANGELITA
DANTES, GLORIA DAYO, LUCIA DE CASTRO, CARLITA DE GUZMAN, CARMEN DELA CRUZ, MERCY DE
LEON, MARY DELOS REYES, MARIETA DEPILO, MATILDE DIBLAS, JULETA DIMAYUGA, TEODORA
DIMAYUGA, YOLANDA DOMDOM, LUCITA DONATO, NELMA DORADO, RITA DORADO, SUSAN DUNTON,
HERMINIA SAN ESTEBAN, AMALI EUGENIO, OLIVIA EUSOYA, ERNESTO ESCOBIN, EVELYN ESCUREL,
LYDIA ESCOBIN, VICENTE E. ELOIDA, ELENA EGAR, GLORIA ERENO, NORMA ESPIRIDION, ARSENIA
ESPIRITU, AURORA ESTACIO, DEMETRIA ESTONELO, MILAGROS FONSEGA, LYDIA FLORENTINO,
JULIA FARABIER, TRINIDAD FATALLA, IMELDA FLORES, JESSINA FRANCO, MA. CRISTINA FRIJAS,
ESPECTACION FERRER, BERDENA FLORES, LEONILA FRANCISCO, BERNARDA FAUSTINO, DOLORES
FACUNDO, CRESTITA FAMILARAN, EMELITA FIGUERAS, MA. VIRGINIA FLORENDO, AURORA
FRANCISCO, MA. JESUSA FRANCISCO, NENITA FUENTES, MARILOU GOLINGAN, JUANITA GUERRERO,
LYDIA GUEVARRA, SOCCORRO GONZAGA. PATRICIA GOMEO, ROSALINDA GALAPIN, CARMELITA
GALVEZ, TERESA GLE, SONIA GONZALES, PRIMITA GOMEZ, THERESA GALUA, JOSEFINA GELUA,
BRENDA GONZAGA, FLORA GALLARDO, LUCINDA GRACILLA, VICTORIA GOZUM, NENITA GAMAO,
EDNA GARCIA, DANILO GARCIA, ROSARIO GIRAY, ARACELI GOMEZ, JOEMARIE GONZAGA, NELIA
GONZAGA, MARY GRACE GOZON, CARMEN GONZALES, MERLITA GREGORIO, HERMINIA GONZALES,
CARLITA DE GUZMAN, MODESTA GABRENTINA, EDITHA GADDI, SALVACIO GALIAS, MERLINDA
GALIDO, MELINDA GAMIT, JULIETA GARCIA, EMELITA GAVINO, CHARITO GILLIA, GENERA GONEDA,
CRESTITA GONZALES, HERMINIA GONZALES, FRANCISCA GUILING, JULIAN HERNANDEZ, GLECERIA
HERRADURA, SUSANA HIPOLITO, NERISSA HAZ, SUSAN HERNAEZ, APOLONIA ISON, SUSAN IBARRA,
LUDIVINA IGNACIO, CHOLITA INFANTE, JULETA ITURRIOS, ANITA IBO, MIRASOL INGALLA, JULIO
JARDINIANO, MERLITA JULAO, JULIETA JULIAN, MARIBETH DE JOSE, JOSEPHINE JENER, IMELDA
JATAP, JULIETA JAVIER, SALOME JAVIER, VICTORIA JAVIER, SALVACION JOMOLO, EDNA JARNE,
LYDIA JIMENEZ, TERESITA DE JUAN, MARILYN LUARCA, ROSITA LOSITO, ROSALINA LUMAYAG,
LORNA LARGA, CRESTETA DE LEON, ZENAIDA LEGASPI, ADELAIDA LEON, IMELDA DE LEON, MELITINA
LUMABI, LYDIA LUMABI, ASUNCION LUMACANG, REGINA LAPIADRIO, MELANIA LUBUGUAN,
EVANGELINE LACAP, PELAGIA LACSI, LORNA LAGUI, VIRGIE LAITAN, VIRGINIA LEE, CRESTELITA DE
LEON, FELICISIMA LEONERO, DIOSA LOPE, ANGELITA LOPEZ, TERESITA LORICA, JUANITA
MENDIETA, JUANITA MARANQUEZ, JANET MALIFERO, INAS MORADOS, MELANE MANING, LUCENA
MABANGLO, CLARITA MEJIA, IRENE MENDOZA, LILIA MORTA, VIRGINIA MARAY, CHARITO
MASINAHON, FILMA MALAYA, LILIA MORTA, VIRGINIA MARAY, CHARITO MASINAHON, FILMA
MALAYA, LILIA MORTA, ROSITA MATIBAG, LORENZA MLINA, SABINA DEL MUNDO, EDITHA MUYCO,
NARCISA MABEZA, MA. FE MACATANGAY, CONCEPCION MAGDARAOG, IMELDA MAHIYA, ELSA
MALLARI, LIGAYA MANAHAN, SOLEDA MANLAPAS, VIRGINIA MAPA, JOSEI MARCOS, LIBRADA
MARQUEZ, VIRGINIA MAZA, JULLANITA MENDETA, EDILBERTA MENDOZA, IRENE MERCADO, HELEN
MEROY, CRISTINA MEJARES, CECILIA MILLET, EMELITA MINON, JOSEPHINE MIRANA, PERLITA
MIRANO, EVANGELINE MISBAL, ELEANOR MORALES, TERESITA MORILLA, LYDIA NUDO, MYRNA
NAVAL, CAROLINA NOLIA, ALICIA NUNEZ, MAGDALENA NAGUIDA, ELSA NICOL, LILIA NACIONALES,
MA. LIZA MABO, REMEDIOS NIEVES, MARGARITA NUYLAN, TERESITA NIEVES, PORFERIA NARAG,
RHODORA NUCASA, CORAZON OCRAY, LILIA OLIMPO, VERONA OVERENCIA, FERMIN OSENA,
FLORENCIA OLIVAROS, SOLEDAD OBEAS, NARISSA OLIVEROS, PELAGIA ORTEGA, SUSAN ORTEGA,
CRISTINA PRENCIPE, PURITA PENGSON, REBECCA PACERAN, EDNA PARINA, MARIETA PINAT,
EPIFANIA PAJERLAN, ROSALINA PASIBE, CECILIA DELA PAZ, LORETA PENA, APOLONIA PALCONIT,
FRANCISCO PAGUIO, LYDIA PAMINTAHON, ELSIE PACALDO, TERESITA PADILLA, MYRNA PINEDA,
MERCEDITA PEREZ, NOVENA PORLUCAS, TERESITA PODPOD, ADORACION PORNOBI, ALICIA
PERILLO, HELEN JOY PENDAL, LOURDES PACHECO, LUZVIMINDA PAGALA, LORETA PAGAPULAN,
FRANCISCO PAGUIO, PRISCO PALACA, FLORA PAMINTUAN, NOEMI PARISALES, JOSEPHINE
PATRICIO, CRISTINA PE BENITO, ANGELA PECO, ANGELITA PENA, ESTER PENONES, NORMA PEREZ,
MAURA PERSEVERANCIA, MARINA PETILLA, JOSE PIA, ZULVILITA PIODO, REBECCA PACERAN,
CLARITA POLICARPIO, MAXIMO POTENTO, PORFIRIO POTENTO, FLORDELIZA PUMARAS, FERNANDO
QUEVEDO, JULIANA QUINDOZA, CHARITO QUIROZ, CARMELITA ROSINO, RODELIA RAYONDOYON,
FLORENCIA RAGOS, REBECCA ROSALES, ROSALYN RIVERO, FRANCISCO RUIZ, FRANCIA ROSERO,
EMELY RUBIO, EDILBERTO RUIO, JUANA RUBY, RAQUEL REYES, MERCY ROBLES, ESTELA RELANO,
ROSITA REYES NIMFA RENDON, EPIFANIO RAMIRO, MURIEL REALCO, BERNARDITA RED, LEONITA
RODIL, BENITA REBOLA, DELMA REGALARIO, LENY REDILLAS, JULIETA DELA ROSA, FELICITAS DELA
ROSA, SUSAN RAFALLO, ELENA RONDINA, NORMA RACELIS, JOSEPHINE RAGEL, ESPERANZA
RAMIREZ, LUZVIMINDA RANADA, CRISTINA RAPINSAN, JOCELYN RED, ORLANDO REYES, TERESITA
REYES, ANGELITA ROBERTO, DELIA ROCHA, EDILTRUDES ROMERO, MELECIA ROSALES, ZENAIDA
ROTAO, BELEN RUBIS, FE RUEDA, SYLVIA SONGCAYAWON, CRISTINA SANANO, NERCISA
SARMIENTO, HELEN SIBAL, ESTELITA SANTOS, NORMA SILVESTRE, DARLITA SINGSON, EUFROCINA
SARMIENTO, MYRNA SAMSON, EMERLINA SADIA, LORNA SALAZAR, AVELINA SALVADOR, NACIFORA
SALAZAR, TITA SEUS, MARIFE SANTOS, GRACIA SARMIENTO, ANGELITA SUMANGIL, ELIZABETH
SICAT, MA. VICTORIA SIDELA, ANALITA SALVADOR, MARITES SANTOS, VIRGINIA SANTOS, THELMA
SARONG, NILDA SAYAT, FANCITA SEGUNDO, FYNAIDA SAGUI, EDITHA SALAZAR, EDNA SALZAR,
EMMA SALENDARIO, SOLEDAD SAMSON, EDNA SAN DIEGO, TERESITA SAN GABRIEL, GERTRUDES SAN
JOSE, EGLECERIA SANCHEZ, ESTRELLA SANCHEZ, CECILIA DELOS SANTOS, LUISA SEGOVIA, JOCELYN
SENDING ELENA SONGALIA, FELICITAS SORIANO, OFELIA TIBAYAN, AIDA TIRNIDA, MONICA
TIBAYAN, CRISTETA TAMBARAN, GLORIA TACDA, NENVINA, FELINA TEVES, ANTONINA DELA TORRE,
MAXIMA TANILON, NENA TABAT, ZOSIMA TOLOSA, MARITA TENOSO, IMELDA TANIO, LUZ TANIO,
EVANGELINE TAYO, JOSEFINA TINGTING, ARSENIA TISOY, ARSENIA MAGDALENA TRAJANO,
JOSEFINA UBALDE, GINA UMALI, IRMA VALENZUELA, FELY VALDEZ, PAULINA VALEZ, ROSELITA
VALLENTE, LOURDES VELASCO, AIDA VILLA, FRANCISCA VILLARITO, ZENAIDA VISMONTE, DELIA
VILLAMIEL, NENITA VASQUEZ, JOCELYN VILLASIS, FERMARGARITA VARGAS, CELIA VALLE, MILA
CONCEPCION VIRAY, DOMINGA VALDEZ, LUZVIMINDA VOCINA, MADELINE VIVERO, RUFINA
VELASCO, AUREA VIDALEON, GLORIA DEL VALLE, THELMA VALLOYAS, CYNTHIA DELA VEGA, ADELA
VILLAGOMEZ, TERESITA VINLUAN, EUFEMIA VITAN, GLORIA VILLAFLORES, EDORACION VALDEZ,
ANGELITA VALDEZ, ILUMINADA VALENCI, MYRNA VASQUEZ, EVELYN VEJERAMO, TEODORA
VELASQUEZ, EDAN VILLANUEVA, PURITA VILLASENOR, SALVADOR WILSON, EMELINA YU, ADELFA
YU, ANA ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, MERCEDITA CASTILLO, JOCELYN
CASTRO, CREMENIA DELA CRUZ, JOSEPHINE IGNACIO, MELITA ILILANGOS, LIGAYA LUMAYAT, DELIA
LUMBES, ROSITA LIBRADO, DELIA LAGRAMADA, GEMMA MAGPANTAY, EMILY MENDOZA, FIDELA
PANGANIBAN, LEONOR RIZALDO, ILUMINDA RIVERA, DIVINA SAMBAYAN, ELMERITA SOLAYAO,
NANCY SAMALA, JOSIE SUMARAN, LUZVIMINDA ABINES, ALMA ACOL, ROBERTO ADRIATICO, GLORIA
AGUINALDO, ROSARIO ALEYO, CRISTETA ALEJANDRO, LILIA ALMOGUERA, CARMEN AMARILLO,
TRINIDAD ARDANIEL, CERINA AVENTAJADO, ZENAIDA AVAYA, LOLITA ARABIS, MARIA ARSENIA,
SOFIA AGUINALDO, SALVE ABAD, JOSEFINA AMBANGAN EMILIA AQUINO, JOSEFINA AQUINO,
JULIANA AUSAN, AMERCIANA ACOSTA, CONCEPCION ALEROZA, DIANA ADOVOS, FELY ADVINCULA,
SEOMINTA ARIAS, JOSEPHINE ARCEDE, NORMA AMISTOSO, PRESENTACION ALONOS, EMMA
ATIENZA, LEONIDA AQUINO, ANITA ARILLON, ADELAIDA ARELLANO, NORMA AMISTOSO, JOSEPHINE
ARCEDE, SEMIONITA ARIAS, JOSEFINA BANTUG, LOLITA BARTE, HERMINIA BASCO, MARGARITA
BOTARDO, RUFINO BUGNOT, LOLITA BUSTILLO, ISABEL BALAKIT, ROSARIO BARRERO, TESSIE
BALBOS, NORMA BENISANO, GUILLERMA BRUGES, BERNADETTE BARTOLOME, SHIRLEY BELMONTE,
MERONA BELZA, AZUCENA BERNALES, JOSE BASCO, NIMPHA BANTOG, BENILDA BUBAN, REGINA
BUBAN, SALOME BARRAMEDA, IRENE BISCO, FELICITAS BAUTISTA, VIOLETA BURA, LINA BINUYA,
BIBIANA BAARDE, ELSA BAES, ANASTACIA BELONZO, SONIA BENOYO, ELIZABETH BACUNGAN,
PATRICIA BARRAMEDA, ERLINDA BARCELONA, EMMA BANICO, APOLONIA BUNAO, LUCITA BOLEA,
PACIFICA BARCELONA, EDITHA BASIJAN, RENITA BADAMA, ELENA BALADAD, CRESENCIA BAJO,
BERNADITA BASILID, MELINDA BEATO, YOLANDA BATANES, EDITHA BORILLA, ANITA BAS, ELSA
CALIPUNDAN, MARIA CAMERINO, VIRGINIA CAMPOSANO, MILAGROS CAPILI, CARINA CARINO,
EUFEMIA CASIHAN, NENITA CASTRO, FLORENCIA CASUBUAN, GIRLIE CENTENO, MARIANITA
CHIQUITO, IMELDA DELA CRUZ, TEODOSIA CONG, TEOFILA CARACOL, TERESITA CANTA, IRENEA
CUNANAN, JULITA CANDILOSAS, VIOLETA CIERES, MILAGROS DELA CRUZ, FLOREPES CAPULONG,
CARMENCITA CAMPO, MARILYN CARILLO, RUTH DELA CRUZ, RITA CIJAS, LYDIA CASTOR, VIRGIE
CALUBAD, EMELITA CABERA, CRISTETA CRUZ, ERLINDA COGADAS, IMELDA CALDERON, SUSIE LUZ
CEZAR, ESTELA CHAVEZ, NORMA CABRERA, ELDA DAGATAN, LEONISA DIMACUNA, ERNA DUGTONG,
FLORDELISA DIGMA, VIRGILIO DADIOS, LOLITA DAGTA, ADELAIDA DORADO, CELSA DATUMANONG,
VIRGINIA DOCTOLERO, EDNA SAN DIEGO, JULIETA DANG, JULIETA DORANTINAO, LOLITA DAGANO,
JUDITH DIAZ, MARIA ENICANE, MARITA ESCARDE, ENRIMITA ESMAYOR, ROSARIO EPIRITU,
REMEDIOS EMBOLTORIO, IRENE ESTUITA, TERESITA ERESE, ERMELINDA ELEZO, MARIA ESTAREJA,
MERLITA ESQUERRA, YOLANDA FELICITAS, FRUTO FRANCIA, MARTHA FRUTO, LILIA FLORES,
SALVACION FORTALESA, JUDITH FAJARDO, SUSANA FERNANDO, EDWIN FRANCISCO, NENITA
GREGORY, ROSA CAMILO, MARIVIC GERRARDO, CHARITA GOREMBALEM, NORMA GRANDE, DOLORES
GUTIERREZ, CHARLIE GARCIA, LUZ GALVEZ, ADELAIDA GAMILLA, LUZ GAPULTOS, ERLINDA GARCIA,
HELEN GARCIA, ERLINDA GAUDIA, FRANCISCA GUILING, MINTA HERRERA, ASUNCION HONOA, JUAN
HERNANDEZ, LUCERIA ANNA MAE HERNANDEZ, JULIANA HERNANDEZ, EDITHA IGNACIO, ANITA
INOCENCIO, EULALIA INSORIO, ESTELITA IRLANDA, MILAGROS IGNACIO, LINDA JABONILLO,
ADELIMA JAEL, ROWENA JARABJO, ROBERT JAVILINAR, CLARITA JOSE, CARMENCITA JUNDEZ, SOFIA
LALUCIS, GLORIA LABITORIA, ANGELITA LODES, ERLINDA LATOGA, EVELYN LEGASPI, ROMEO
LIMCHOCO, JESUS LARA, ESTRELLA DE LUNA, LORETA LAREZA, JOSEPHINE ALSCO, MERCY DE LEON,
CONSOLACION LIBAO, MARILYN LIWAG, TERESITA LIZAZO, LILIA MACAPAGAL, SALVACION
MACAREZA, AMALIA MADO, TERESITA MADRIAGA, JOVITA MAGNAYE, JEAN MALABAD, FRANCISCA
MENDOZA, NELCITA MANGANTANG, TERESITA NELLA, GENEROZA MERCADO, CRISTETA MOJANA,
BERNARDA MONGADO, LYDIA MIRANDA, ELISA MADRILEJOS, LOIDA MAGSINO, AMELIA MALTO,
JULITA MAHIBA, MYRNA MAYORES, LUISA MARAIG, FLORENCIA MARAIG, EMMA MONZON, IMELDA
MAGDANGAN, VICTORIA MARTIN, NOEMI MANGUILLO, BASILIZA MEDINA, VICTORIO MERCADO,
ESTELA MAYPA, EMILIA MENDOZA, LINA MAGPANTAY, FELICIANA MANLOLO, ELENA MANACOP,
WILMA MORENO, JUANA MENDOZA, EVELYN DEL MUNDO, ROSIE MATUTINA, MATILDE MANALO,
TERESITA MENDEZ, FELIPINA MAGONCIA, MARIA MANZANO, LIGAYA MANALO, LETICIA MARCHA,
MARINA MANDIGMA, LETICIA MANDASOC, PRESCILLA MARTINEZ, JULIA MENDOZA, PACITA
MAGALLANES, ANGELINA MARJES, SHIRLEY MELIGRITO, IRENE MERCADO, ELISA MAATUBANG,
MARCELINA NICOLAS, AGUSTINA NICOLAS, ROSA NOLASCO, WILMA NILAYE, VIOLETA ORACION,
ANGELA OSTAYA, JUANITA OSAYOS, MAGDALENA OCAMPO, MARDIANA OCTA, ROSELA OPAO,
LIBRADA OCAMPO, YOLANDA OLIVER, MARCIA ORLANDA, PAGDUNAN, RITA PABILONA, MYRA
PALACA, BETHLEHEM PALINES, GINA PALIGAR, NORMA PALIGAR, DELMA PEREZ, CLAUDIA PRADO,
JULIE PUTONG, LUDIVINA PAGSALINGAN, MERLYN PANALIGAN, VIOLETA PANAMBITAN, NOREN PAR,
ERLINDA PARAGAS, MILA PARINO, REBECCA PENAFLOR, IMELDA PENAMORA, JERMICILLIN PERALTA,
REBECCA PIAPES, EDITHA PILAR, MAROBETH PILLADO, DIOSCORO PIMENTEL, AURORA LAS PINAS,
EVANGELINA PINON, MA. NITA PONDOC, MA. MERCEDES PODPOD, ANGELITO PANDEZ, LIGAYA
PIGTAIN, LEONILA QUIAMBAO, ELENA QUINO, MARITESS QUIJANO, CHOLITA REBUENO, LOLITA
REYES, JOCELYN RAMOS, ROSITA RAMIREZ, ELINORA RAMOS, ISABEL RAMOS, ANNABELLE
RESURRECCION, EMMA REYES, ALILY ROXAS, MARY GRACE DELOS REYES, JOCELYN DEL ROSARIO,
JOSEFINA RABUSA, ANGELITA ROTAIRO, SAMCETA ROSETA, EDERLINA RUIZ, ZENAIDA ROSARIO,
BENITA REBOLA, ROSITA REVILLA, ROSITA SANTOS, ROWENA SALAZAR, EMILYN SARMIENTO, ANA
SENIS, ELOISA SANTOS, NARCISA SONGLIAD, ELMA SONGALIA, AMPARA SABIO, JESSIE SANCHEZ,
VIVIAN SAMILO, GLORIA SUMALINOG, ROSALINA DELOS SANTOS, MARIETA SOMBRERO, HELEN
SERRETARIO, TEODORO SULIT, BELLA SONGUINES, LINDA SARANTAN, ESTELLA SALABAR, MILAGROS
SISON, GLORIA TALIDAGA, CECILIA TEODORO, ROMILLA TUAZON, AMELITA TABULAO, MACARIA
TORRES, LUTGARDA TUSI, ESTELLA TORREJOS, VICTORIA TAN, MERLITA DELA VEGA, WEVINA
ORENCIA, REMEDIOS BALECHA, TERESITA TIBAR, LACHICA LEONORA, JULITA YBUT, JOSEFINA
ZABALA, WINNIE ZALDARIAGA, BENHUR ANTENERO, MARCELINA ANTENERO, ANTONINA ALAPAN,
EDITHA ANTOZO, ROWENA ARABIT, ANDRA AQUINO, TERESITA ANGULO, MARIA ANGLO, MYRNA
ALBOS, ELENITA AUSTRIA, ANNA ABRIGUE, VIRGINIA ADOBAS, VICTORIA ANTIPUESTO, REMEDIOS
BOLECHE, MACARIA BARRIOS, THELMA BELEN, ESTELLA BARRETTO, JOCELYN CHAVEZ, VIRGINIA
CAPISTRANO, BENEDICTA CINCO, YOLLY CATPANG, REINA CUEVAS, VICTORIA CALANZA, FE CASERO,
ROBERTA CATALBAS, LOURDES CAPANANG, CLEMENCIA CRUZ, JOCELYN COSTO, MERCEDITA
CASTILLO, EDITHA DEE, LUCITA DONATO, NORMA ESPIRIDION, LORETA FERNANDEZ, AURORA
FRANCISCO, VILMA FAJARDO, MODESTA GABRENTINA, TERESITA GABRIEL, SALVACION GAMBOA,
JOSEPHINE IGNACIO, SUSAN IBARRA, ESPERANZA JABSON, OSCAR JAMBARO, ROSANNA JARDIN,
CORAZON JALOCON, ZENAIDA LEGASPI, DELLA LAGRAMADA, ROSITA LIBRANDO, LIGAYA LUMAYOT,
DELIA LUMBIS, LEONORA LANCHICA, RELAGIA LACSI, JOSEFINA LUMBO, VIOLETA DE LUNA, EVELYN
MADRID, TERESITA MORILLA, GEMMA MAGPANTAY, EMILY MENDOZA, IRENEA MEDINA, NARCISA
MABEZA, ROSANNA MEDINA, DELIA MARTINEZ, ROSARIO MAG-ISA, EDITHA MENDOZA, EDILBERTA
MENDOZA, FIDELA PANGANIBAN, OFELIA PANGANIBAN, AZUCENA POSTGO, LOURDES PACHECO,
LILIA PADILLA, MARISSA PEREZ, FLORDELIZA PUMARES, LUZ REYES, NORMA RACELIS, LEONOR
RIZALDO, JOSIE SUMASAR, NANCY SAMALA, EMERLITA SOLAYAO, MERCEDITA SAMANIEGO,
BLANDINA SIMBULAN, JOCELYN SENDING, LUISITA TABERRERO, TERESITA TIBAR, ESTERLINA
VALDEZ, GLORIA VEJERANO, ILUMINADA VALENCIA, MERLITA DELA VEGA, VIRGIE LAITAN, JULIET
VILLARAMA, LUISISTA OCAMPO, NARIO ANDRES, ANSELMA TULFO, GLORIA MATEO, FLANIA
MENDOZA, CONNIE CANGO, EDITHA SALAZAR, MYRNA SANTOS, TERESITA SERGIO, CHARITO GILLA,
FLORENTINA HERNAEZ, BERNARDINO VIRGINIA, AMPO ANACORITA, SYLVIA POSADAS, ESTRELLA
ESPIRITU, CONCORDIA LUZURIAGA, MARINA CERBITO, EMMA REYES, NOEMI PENISALES, CLARITA
POLICARPIO, BELEN BANGUIO, HERMINIA ADVINCULA, LILIA MORTA, REGINA LAPIDARIO, LORNA
LARGA, TERESITA VINLUAN, MARITA TENOSO, NILDS SAYAT, THELMA SARONG, DELMA REGALIS,
SUSAN RAFAULO, ELENA RONDINA, MYRNA PIENDA, VIOLETA DUMELINA, FLORENCIA ADALID,
FILMA MELAYA, ERLINDA DE BAUTISTA, MATILDE DE BLAS, DOLORES FACUNDO, REBECCA LEDAMA,
MA. FE MACATANGAY, EMELITA MINON, NORMA PAGUIO, ELIZA VASQUEZ, GLORIA VILLARINO, MA.
JESUS FRANCISCO, TERESITA GURPIDO, LIGAYA MANALO, FE PINEDA, MIRIAM OCMAR, LUISA
SEGOVIA, TEODY ATIENZA, SOLEDA AZCURE, CARMEN DELA CRUZ, DEMETRIA ESTONELO, MA.
 FLORIDA LOAZNO, IMELDA MAHIYA, EDILBERTA MENDOZA, SYLVIA POSADAS, SUSANA ORTEGA,
JOSEPHINE D. TALIMORO, TERESITA LORECA, ARSENIA TISOY, LIGAYA MANALO, TERESITA GURPIO,
FE PINEDA, and MARIA

JESUS FRANCISCO, petitioners, vs. HON. CRESENCIO J. RAMOS, NATIONAL LABOR RELATIONS
COMMISSION, M. GREENFIELD (B), INC., SAUL TAWIL, CARLOS T. JAVELOSA, RENATO C. PUANGCO,
WINCEL LIGOT, MARCIANO HALOG, GODOFREDO PACENO, SR., GERVACIO CASILLANO, LORENZO
ITAOC, ATTY. GODOFREDO PACENO, JR., MARGARITO CABRERA, GAUDENCIO RACHO, SANTIAGO
IBANEZ, AND RODRIGO AGUILING, respondents.

RESOLUTION

GONZAGA-REYES, J p:

Before us is petitioners' motion for partial reconsideration of our decision dated February 28, 2000, 1 the dispositive portion of which
reads: 2

"WHEREFORE, the petition is GRANTED; the decision of the National Labor Relations Commission in Case No.
NCR-00-09-04199-89 is REVERSED and SET ASIDE; and the respondent company is hereby ordered to
immediately reinstate the petitioners to their respective positions. Should reinstatement be not feasible,
respondent company shall pay separation pay of one month salary for every year of service. Since petitioners
were terminated without the requisite written notice at least 30 days prior to their termination, following the
recent ruling in the case of Ruben Serrano vs. National Labor Relations Commission and Isetann Department
Store, the respondent company is hereby ordered to pay full backwages to petitioner-employees while the
Federation is also ordered to pay full backwages to petitioner-union officers who were dismissed upon its
instigation. Since the dismissal of petitioners was without cause, backwages shall be computed from the time the
herein petitioner employees and union officers were dismissed until their actual reinstatement. Should
reinstatement be not feasible, their backwages shall be computed from the time petitioners were terminated until
the finality of this decision. Costs against the respondent company.

SO ORDERED."

Petitioners allege that this Court committed patent and palpable error in holding that "the respondent company officials cannot be
held personally liable for damages on account of employees' dismissal because the employer corporation has a personality separate
and distinct from its officers who merely acted as its agents" whereas the records clearly established that respondent company
officers Saul Tawil, Carlos T. Javelosa and Renato C. Puangco have caused the hasty, arbitrary and unlawful dismissal of petitioners
from work; that as top officials of the respondent company who handed down the decision dismissing the petitioners, they are
responsible for acts of unfair labor practice; that these respondent corporate officers should not be considered as mere agents of the
company but the wrongdoers. Petitioners further contend that while the case was pending before the public respondents, the
respondent company, in the early part of February 1990, began removing its machineries and equipment from its plant located at
Merville Park, Parañaque and began diverting jobs intended for the regular employees to its sub-contractor/satellite branches; 3 that
the respondent company officials are also the officers and incorporators of these satellite companies as shown in their articles of
incorporation and the general information sheet. They added that during their ocular inspection of the plant site of the respondent
company, they found that the same is being used by other unnamed business entities also engaged in the manufacture of garments.
Petitioners further claim that the respondent company no longer operates its plant site as M. Greenfield thus it will be very difficult
for them to fully enforce and implement the court's decision. In their subsequent motion filed on the same day, petitioners also pray
for the (A) inclusion of the names of employees listed in Annex "D" of the petition which they inadvertently omitted in the caption of
the case, to wit: (1) Amores, Imelda (2) Andres, Josefina (3) Aragon, Felicidad (4) Arias, Genevive (5) Arroyo, Salvacion (6) Arceo,
Elizabeth (7) Añonuevo, Monica (8) Abellada, Josefina (9) Advincula, Harmelina (10) Ajayo, Rosario (11) Alilay, Marilyn (12) Almario,
Anliza (13) Almario, Angelita (14) Almazan, Marilou (15) Almonte, Rosalina (16) Alvaran, Marites (17) Alvarez, Edna (18) Ampo,
Anacorita (19) Aquino, Leonisa (20) Bactat, Celia (21) Carpio, Azucena G. (22) Cruz, Amelia (23) Glifonia, Eugenia (24) Escurel,
Evelyn F. (25) Hilario, Bonifacio G. (26) Payuan, Adoracion (27) Perez, Mercedita (28) Rempis, Zenaida (29) Rosario, Margie del (30)
Salvador, Norma (31) Sambayanan, Olivia (32) Tiaga, Aida (33) Torbela, Maria (34) Trono, Nenevina (35) Varona, Asuncion (36)
Vasquez, Elisa M. (37) Villanueva, Milagros (38) Villapondo, Eva C. (39) Villon, Adeliza T.; (B) correction of their own typographical
errors of the names of employees appearing in the caption, which should be as follows: Manuela Avelin, Belen Barquio, Lita Buquid,
Violeta C. Ciervo, Marilou Dejocos, Maximina Faustino, Primitiva Gomez, Myrna Palaca, Mercedita Perez, Rebecca Poceran, Amorlita
Rotairo, Emma Saludario, Tita Senis, Salvacion Wilson, 4 Anita Ahillon, Gregoria Arguelles, Tessie Balbis, Betty Borja, Rodrigo Buella,
Celsa Doropan, Maria Enicame, Josephine Lasco, Julita Maniba, Juanita Osuyos, Juana Overencio, Azucena Postigo, Cristina Rapinan,
Roselyn Rivero, Edeltrudes Romero, Rodelia Royandoyon, Fausta Segundo, Teodora Sulit, Elena Tebis, Paulina Valdez, 5 Susan
Abogona, Diana Adovas, Carmen Rosimo Basco, Macaria Barrion, Maria Fe Berezo, Matilde de Blas, Rufina Bugnot, Aurora Bravo,
Jovita Cera, Precila Carta, Amalia Eugenio, Milagros Fonseca, Jose Irlanda, Rowena Jarabejo, Regina Lapidario, Josie Marcos, Shirley
Melegrito, Noemi Menguillo, Teresita Nierves, Ricardo Paloga, Florenia Ragos, Leonila Rodil, Emma Saludario, Narcisa Songuad, Josie
Sumarsar, Evangeline Tayco; 6 (C) inclusion of other employees similarly situated whose names were not included in Annex "D" or in
the caption of the case, to wit: (1) Dionisa Aban, (2) Alicia Aragon, (3) Vicky Francia, (4) Nelita F. Gelongos, (5) Erlinda San Juan,
(6) Erlinda Baby Patungan Manalo, (7) Jenette Patungan, 7 (8) Blandina Simbahan, 8 (9) Asuncion Varona, 9 (10) Josefina Andres,
(11) Teresita Arales, (12) Alice Artikulo, (13) Esther Cometa, (14) Eliza Cabiting, (15) Erlinda Dalut, (16) Edna Fernandez, (17)
Emily Inocencio, (18) Esperanza Jalocon, (19) Imelda Jarabe, (20) Mercedes Pabadora, (21) Venerado Pastoral, (22) Cristina Perlas,
(23) Margie del Rosario. 10

In their Comment, the Solicitor General interposes no objection to petitioners' prayer for the inclusion of omitted and similarly
situated employees and the correction of employees' names in the caption of the case.

On the other hand, private respondent company officials Carlos Javelosa and Remedios Caoleng, in their Comment, state that
considering that petitioners admitted having knowledge of the fact that private respondent officers are also holding key positions in
the alleged satellite companies, they should have presented the pertinent evidence with the public respondents; thus it is too late for
petitioners to require this Court to admit and evaluate evidence not presented during the trial; that the supposed proof of satellite
companies hardly constitute newly discovered evidence. Respondent officials interpose no objection to the inclusion of employees
inadvertently excluded in the caption of the case but object to the inclusion of employees who were allegedly similarly situated for
the reason that these employees had not been parties to the case, hence should not be granted any relief from the court.
Respondent company failed to file its comment. 11

Petitioners' contention that respondent company officials should be made personally liable for damages on account of petitioners'
dismissal is not impressed with merit. A corporation is a juridical entity with legal personality separate and distinct from those acting
for and in its behalf and, in general from the people comprising it. 12 The rule is that obligations incurred by the corporation, acting
through its directors, officers and employees, are its sole liabilities. 13 True, solidary liabilities may at times be incurred but only
when exceptional circumstances warrant such as, generally, in the following cases:14

1. When directors and trustees or, in appropriate cases, the officers of a corporation — aTIAES

(a) Vote for or assent to patently unlawful acts of the corporation;

(b) act in bad faith or with gross negligence in directing the corporate affairs;

(c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and
other persons. 15

(2) When a director or officer has consented to the issuance of watered stocks or who, having knowledge
thereof, did not forthwith file with the corporate secretary his written objection thereto. 16

(3) When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and
solidarily liable with the Corporation. 17

(4) When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate
action. 18

In labor cases, particularly, the Court has held corporate directors and officers solidarily liable with the corporation for the
termination of employment of corporate employees done with malice or in bad faith. 19 Bad faith or negligence is a question of fact
and is evidentiary. 20 It has been held that bad faith does not connote bad judgment or negligence; it imports a dishonest purpose
or some moral obliquity and conscious doing of wrong; it means breach of a known duty thru some motive or interest or ill will; it
partakes of the nature of fraud. 21

In the instant case, there is nothing substantial on record to show that respondent officers acted in patent bad faith or were guilty of
gross negligence in terminating the services of petitioners so as to warrant personal liability. As held in Sunio vs. NLRC, 22

"We now come to the personal liability of petitioner, Sunio, who was made jointly and severally responsible with
petitioner company and CIPI for the payment of the backwages of private respondents. This is reversible error.
The Assistant Regional Director's Decision failed to disclose the reason why he was made personally liable.
Respondents, however, alleged as grounds thereof, his being the owner of one half (1/2) interest of said
corporation, and his alleged arbitrary dismissal of private respondents.

Petitioner Sunio was impleaded in the Complaint in his capacity as General Manager of petitioner corporation.
There appears to be no evidence on record that he acted maliciously or in bad faith in terminating the services of
private respondents. His act, therefore, was within the scope of his authority and was a corporate act.

It is basic that a corporation is invested by law with a personality separate and distinct from those of the persons
composing it as well as from that of any other legal entity to which it may be related. Mere ownership by a single
stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself
sufficient ground for disregarding the separate corporate personality. Petitioner Sunio, therefore, should nor have
been made personally answerable for the payment of private respondents' back salaries."

Petitioners' claim that the jobs intended for the respondent company's regular employees were diverted to its satellite companies
where the respondent company officers are holding key positions is not substantiated and was raised for the first time in
consideration. Even assuming that the respondent company officials are also officers and incorporators of the satellite companies,
such circumstance does not in itself amount to fraud. The documents attached to petitioners' motion for reconsideration show that
these satellite companies 23 were established prior to the filing of petitioners' complaint against private respondents with the
Department of Labor and Employment on September 6, 1989 and that these corporations have different sets of incorporators aside
from the respondent officers and are holding their principal offices at different locations. Substantial identity of incorporators
between respondent company and these satellite companies does not necessarily imply fraud. 24 In such a case, respondent
company's corporate personality remains inviolable. 25

Although there were earlier decisions of this Court in labor cases where corporate officers were held to be personally liable for the
payment of wages and other money claims to its employees, we find those rulings inapplicable to this case. In La Campana Coffee
Factory, Inc. vs. Kaisahan ng Manggagawa sa La Campana (KKM), 26 La Campana Coffee Factory, Inc. and La Campana Gaugau
Packing were substantially owned by the same person. They had one office, one management, and a single payroll for both
businesses. The laborers of the gaugau factory and the coffee factory were also interchangeable, i.e., the workers in one factory
worked also in the other factory.

In Claparols vs. Court of Industrial Relations, 27 the Claparol Steel and Nail Plant which was ordered to pay its workers backwages,
ceased operations on June 30, 1957 and was succeeded on the next day, July 1, 1957 by the Claparols Steel Corporation. Both
corporations were substantially owned and controlled by the same person and there was no break or cessation in operations.
Moreover, all the assets of the steel and nail pant were transferred to the new corporation.

Notably, in the above-mentioned cases, a new corporation was created, owned by the same family, engaged in the same business
and operating in the same compound, a situation which is not obtaining in the instant case.

In AC Ransom Labor Union-CCLU vs. NLRC, 28 the Court ruled that under the Minimum Wage Law, the responsible officer of an
employer corporation can be held personally liable for non-payment of backwages for "if the policy of the law were otherwise, the
corporation employer would have devious ways for evading of back wages." This Court said:

"In the instant case, it would appear that RANSOM, in 1969, foreseeing the possibility or probability of payment
of backwages to the 22 strikers, organized ROSARIO to replace RANSOM, with the latter to be eventually phased
out if the 22 strikers win their case. RANSOM actually ceased operations on May 1, 1973, after the December 19,
1972 Decision of the Court of Industrial Relations was promulgated against RANSOM."

Clearly, the situation in AC Ransom does not obtain in this case, where the alleged satellite companies were established even prior to
the filing of petitioners' complaint with the Department of Labor.

Petitioners' prayer for the inclusion of employees listed in Annex "D" whose names were admittedly inadvertently excluded in the
caption of the case and for the correction of typographical errors of the employees' names appearing in the caption, is well taken and
is hereby granted. However, petitioners' prayer for the inclusion of other employees allegedly similarly situated but whose names
were not included either in Annex "D" or in the caption of the case must be denied. A judgment cannot bind persons who are not
parties to the action. 29 It is elementary that strangers to a case are not bound by the judgment rendered by the court and such
judgment is not available as an adjudication either against or in favor of such other person. 30Petitioners failed to explain why these
employees allegedly similarly situated were not included in the submitted list filed before us. Such inclusion would be tantamount to
a substantial amendment which cannot be allowed at this late stage of the proceedings as it will definitely work to the prejudice and
disadvantage of the private respondents. 31

WHEREFORE, petitioners' motion for reconsideration is partially granted so as to include the names of employees listed in Annex "D"
which petitioners inadvertently omitted in the caption of this case, to wit: (1) Amores, Imelda (2) Andres, Josefina (3)Aragon,
Felicidad (4) Arias, Genevive (5) Arroyo, Salvacion (6) Arceo, Elizabeth (7) Añonuevo, Monica (8) Abellada, Josefina (9) Advincula,
Harmelina (10) Ajayo, Rosario (11) Alilay, Marilyn (12) Almario, Anliza (13) Almario, Angelita (14) Almazan, Marilou (15) Almonte,
Rosalina (16) Alvaran, Marites (17) Alvarez, Edna (18) Ampo, Anacorita (19) Aquino, Leonisa (20) Bactat, Celia (21) Carpio, Azucena
G. (22) Cruz, Amelia (23) Glifonia, Eugenia (24) Escurel, Evelyn F. (25) Hilario, Bonifacio G. (26) Payuan, Adoracion (27) Perez,
Mercedita (28) Rempis, Zenaida (29) Rosario, Margie deL (30) Salvador, Norma (31) Sambayanan, Olivia (32) Tiaga, Aida (33)
Torbela, Maria (34) Trono, Nenevina (35) Varona, Asuncion (36) Vasquez, Elisa M. (37) Villanueva, Milagros (38) Villapondo, Eva C.
(39) Villon, Adeliza T.; and to correct the typographical errors of the names of employees appearing in the caption, as follows:
Manuela Avelin, Belen Barquio, Lita Buquid, Violeta C. Ciervo, Marilou Dejocos, Maximina Faustino, Primitiva Gomez, Myrna Palacaz
Mercedita Perez, Rebecca Poceran, Amorlita Rotairo, Emma Saludario, Tita Senis, Salvacion Wilson, Anita Ahillon. Gregoria Arguelles,
Tessie Balbis, Betty Borja, Rodrigo Buella, Celsa Doropan, Maria Enicame, Josephine Lasco, Julita Maniba, Juanita Osuyos, Juana
Overencio, Azucena Postigo, Cristina Rapinan, Roselyn Rivero, Edeltrudes Romero, Rodelia Royandoyon, Fausta Segundo, Teodora
Sulit, Elena Tebis, Paulina Valdez, Susan Abogona, Diana Adovas, Carmen Rosimo Basco, Macaria Barrion, Maria Fe Berezo, Matilde
de Blas, Rufina Bugnot, Aurora Bravo, Jovita Cera, Precila Carta, Amalia Eugenio, Milagros Fonseca, Jose Irlanda, Rowena Jarabejo,
Regina Lapidario, Josie Marcos, Shirley Melegrito, Noemi Menguillo, Teresita Nierves, Ricardo Paloga, Florenia Ragos, Leonila Rodil,
Emma Saludario, Narcisa Songuad, Josie Sumarsar, Evangeline Tayco.

SO ORDERED.

Melo and Sandoval-Gutierrez, JJ., concur.

Vitug and Panganiban, J., reiterate their separate opinion in Serrano v. NLRC, GR 117040, January, 2000.

||| (Malayang Samahan ng mga Manggawa sa M. Greenfield v. Ramos, G.R. No. 113907 (Resolution), [April 20, 2001], 409 PHIL 61-
88)