Labor Dispute

SAN MIGUEL CORPORATION EMPLOYEES UNION-PTGWO, DANIEL S.L. BORBON II, HERMINIA REYES,
MARCELA PURIFICACION, ET AL., petitioners,

vs.

HON. JESUS G. BERSAMIRA, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 166, RTC, PASIG, and
SAN MIGUEL CORPORATION, respondents.

186 SCRA 496 | G.R. No. 87700

June 13, 1990

Ponente: Melencio-Herrera, J.

NATURE OF CASE

Writ of Certiorari

BRIEF

Before the Court is an appeal from the Decision of RTC Branch 166 of Pasig where the petitioners’ plea is
that the Writ of Preliminary Injunction was issued without or in excess of jurisdiction and with grave
abuse of discretion, a labor dispute being involved.

FACTS

San Miguel Corporation entered into contracts for merchandising services with Lipercon and D’Rite
companies, both independent contractors duly licensed by DOLE, to maintain its competitive position,
and in keeping with the imperatives of efficiency, business expansion and diversity of operation. In the
contracts, it was expressly agreed that the workers employed by the contractors were not to be deemed
employees or agents of San Miguel. Thus, no employer-employee relationship.
Later on, San Miguel executed a CBA which specifically provides that “temporary, probationary, or
contract employees and workers are excluded from the bargaining unit and therefore, outside the scope
of this Agreement.”

The Union, petitioner, advised San Miguel that some of the workers of Lipercon and D’Rite had signed
up for union membership and sought regularization. The Union alleged that some the workers have
been continuously working for San Miguel for a period ranging from 6 months to 15 years, and that the
nature of their work is neither casual nor seasonal.

Strikes were held and a series of pickets were held for the reason that the Union failed to receive any
favourable response from San Miguel. Thereafter, San Miguel filed a complaint for Injunction and
Damages before the RTC of Pasig to enjoin the Union to prevent the peaceful and normal operations of
the former. The Union filed a Motion to Dismiss but was subsequently denied by the RTC reasoning that
the absence of employer-employee relationship negates the existence of labor dispute. Thus, the RTC
issued Orders enjoining the Union from commiting acts that disrupt the operations of San Miguel.

ISSUE/s of the CASE

Whether or not there is a labor dispute between San Miguel and the Union?

ACTION OF THE COURT

SC: The decision of the RTC is SET ASIDE.

COURT RATIONALE ON THE ABOVE CASE

A labor dispute includes any controvery or matter concerning terms and conditions of employment or
the association or representation of persons in negotiating, fixing, maintaining, changing, or arranging
the terms and conditions or employment, regardless of whether the disputants stand in the proximate
relation of employer and employee.

What the Union seeks is to regularize the status of the employees contracted by Liparcon and D’Rite and
that they be absorbed into the working unit of San Miguel. In this wise, the matter dwells on the
working relationship between the said employees and San Miguel. Terms, tenure and conditions of their
employment and the arrangement of those terms are thus involved bringing the matter within the
purview of a labor dispute. Further, the Union also seeks to represent the workers, who have signed for
union membership, for the purpose of collecting bargaining. Obvious then is that representation and
association, for the purpose of negotiating the conditions of employment are also involved. In fact, the
injunction sought by San Miguel was precisely also to prevent such representation. Again, the matter of
representation falls squarely within the ambit of a labor dispute.

As the case is indisputably linked with a labor dispute, jurisdiction belongs to labor tribunals.

SUPREME COURT RULING

WHEREFORE, the Writ of Certiorari is GRANTED. The Orders of the Regional Trial Court of Pasig is SET
ASIDE.
St. Martin Funeral Home vs. NLRC

ST. MARTIN FUNERAL HOME, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and
BIENVENIDO ARICAYOS, respondents.

G.R. No. 130866

September 16, 1998

REGALADO, J.:

FACTS:

Private respondent alleges that he started working as Operations Manager of petitioner St. Martin
Funeral Home on February 6, 1995. However, there was no contract of employment executed between
him and petitioner nor was his name included in the semi-monthly payroll. On January 22, 1996, he was
dismissed from his employment for allegedly misappropriating P38,000.00. Petitioner on the other hand
claims that private respondent was not its employee but only the uncle of Amelita Malabed, the owner
of petitioner St.Martin’s Funeral Home and in January 1996, the mother of Amelita passed away, so the
latter took over the management of the business.

Amelita made some changes in the business operation and private respondent and his wife were no
longer allowed to participate in the management thereof. As a consequence, the latter filed a complaint
charging that petitioner had illegally terminated his employment. The labor arbiter rendered a decision
in favor of petitioner declaring that no employer-employee relationship existed between the parties and
therefore his office had no jurisdiction over the case.

ISSUE: WON the decision of the NLRC are appealable to the Court of Appeals.

RULING:
The Court is of the considered opinion that ever since appeals from the NLRC to the SC were eliminated,
the legislative intendment was that the special civil action for certiorari was and still is the proper
vehicle for judicial review of decisions of the NLRC. The use of the word appeal in relation thereto
and in the instances we have noted could have been a lapsus plumae because appeals by certiorari and
the original action for certiorari are both modes of judicial review addressed to the appellate courts. The
important distinction between them, however, and with which the Court is particularly concerned here
is that the special civil action for certiorari is within the concurrent original jurisdiction of this Court and
the Court of Appeals; whereas to indulge in the assumption that appeals by certiorari to the SC are
allowed would not subserve, but would subvert, the intention of the Congress as expressed in the
sponsorship speech on Senate Bill No. 1495.

Therefore, all references in the amended Section 9 of B.P No. 129 to supposed appeals from the NLRC to
the Supreme Court are interpreted and hereby declared to mean and refer to petitions for certiorari
under Rule65. Consequently, all such petitions should henceforth be initially filed in the Court of Appeals
in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief
desired.
A. ST. LUKE’S MEDICAL CENTER, INC. VS. TORRES,

G.R. No. 99395 June 29, 1993

FACTS:

Private respondent SLMCEA-AFW brought to the attention of petitioner via a letter dated July 4, 1990
that the 1987-1990 was about to expire, and manifested in the process that private respondent wanted
to renew the CBA. This development triggered round-table talks on which occasions petitioner
proposed, among other items, a maximum across-the-board monthly salary increase of P375.00 per
employee, to which proposal private respondent demanded a P1,500.00 hike or 50% increase based on
the latest salary rate of each employee, whichever is higher.

A deadlock on issues, especially that bearing on across-the-board monthly and meal allowances
followed and to pre-empt the impending strike as voted upon by a majority of private respondent's
membership, petitioner lodged the petition below. The Secretary of Labor immediately assumed
jurisdiction and the parties submitted their respective pleadings.

On January 28, 1991, public respondent Secretary of Labor issued the Order now under challenge. Said
Order contained a disposition on both the economic and non-economic issues raised in the petition.
One of the rulings in the order is the granting of the retroactive effect to the enforceability of the CBA.

Petitioner argues that the Order of January 28, 1991 is violative of Article 253-A of the Labor Code,
particularly its provisions on retroactivity. Said Article pertinently provides:

xxx xxx xxx

Any agreement on such other provisions of the collective bargaining agreement entered into within six
(6) months from the date of expiry of the term of such other provisions as fixed in the collective
bargaining agreement, shall retroact to the day immediately following such date. If any such agreement
is entered into beyond six months, the parties shall agree on the duration of retroactivity thereof. In
case of a deadlock in the renegotiation of the collective bargaining agreement, the parties may exercise
their rights under this Code.

Petitioner argues that in granting retroactive effect to the enforceability of the CBA, public respondent
committed an act contrary to the above provision of law, pointing out that the old CBA expired on July
30, 1990 and the questioned order was issued on January 28, 1991. Petitioner theorizes that following
Article 13 of the Civil Code which provides that there are 30 days in one month, the questioned Order of
January 28, 1991 was issued beyond the six-month period, graphically shown thus:

July 30, 1990 Expiration

July 31 = 1 day
August 1-31, 1990 = 31 days

September 1-30, 1990 = 30 days

October 1-31, 1990 = 31 days

November 1-30, 1990 = 30 days

December 1-31, 1990 = 31 days

January 1-28, 1991 = 28 days

—————————

TOTAL = 182 days

(6 months and 2 days)

Private respondent agrees with the Labor Secretary's view that Article 253-A of the Labor Code does not
apply to arbitral awards such as those involved in the instant case. According to private respondent,
Article 253-A of the Labor Code is clear and plain on its face as referring only to collective bargaining
agreements entered into by management and the certified exclusive bargaining agent of all rank-and-file
employees therein within six (6) months from the expiry of the old CBA.

ISSUE: Whether or not the CBA should be given retroactive effect.

HELD: The effectivity of the Order of January 28, 1991, must retroact to the date of the expiration of the
previous CBA, contrary to the position of petitioner. Under the circumstances of the case, Article 253-A
cannot be property applied to herein case. As correctly stated by public respondent in his assailed Order
of April 12, 1991 dismissing petitioner's Motion for Reconsideration —

Anent the alleged lack of basis for the retroactivity provisions awarded, we would stress that the
provision of law invoked by the Hospital, Article 253-A of the Labor Code, speak of agreements by and
between the parties, and not arbitral awards . . .

Therefore, in the absence of a specific provision of law prohibiting retroactivity of the effectivity of
arbitral awards issued by the Secretary of Labor pursuant to Article 263 (g) of the Labor Code, such as
herein involved, public respondent is deemed vested with plenary and discretionary powers to
determine the effectivity thereof.
G.R. No. 80485 November 11, 1988

PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, petitioner,

vs.

DIRECTOR PURA FERRER-CALLEJA, RASIDALI C. ABDULLAH, ENFORCEMENT UNIT NCR ARBITRATION

BRANCH, REYNALDO SANTOS, ET AL., respondents.

The Government Corporate Counsel for petitioner.

The Solicitor General for public respondent.

P.B. Iyog & Associates Law Office for private respondents.

GANCAYCO, J.:

The center of controversy in this petition is whether or not the Bureau of Labor Relations has jurisdiction
over the case involving the validity and refund of check-off assessments made by a labor union against
the salaries of union members through the petitioner-employer. The other issue is whether or not
petitioner has been afforded due process.

The 388 private respondents are employees of petitioner who are members of the PNCC Tollways
Employees and Workers Union. The union, through its Executive Board, adopted on October 22, 1983
Executive Committee Resolution No. 001-83 providing for the affiliation of the union with the Central
Luzon Labor Congress. The union also engaged the services of Atty. Emmanuel Clave as labor advocate,
negotiator and adviser, with a compensation of 10% on any arbitration award, settlement, collective
bargaining agreement (CBA) negotiation gains, plus expenses in the performance of his responsibilities.
The said resolution provided that the advocate's fees due Atty. Clave, in any form, shall be subject to
"check-off" arrangement with the petitioner.
Subsequently, the union adopted Executive Board Resolution No. 012-S-84 making the affiliation regular
and the retainer of Atty. Clave as official.

The union passed Resolution No. 15-S-84 providing that each union member and all other rank and file
employees of petitioner's Tollways Division shall be assessed the sum of 10% of all monetary benefits
that may be due them as a result of collective bargaining, arbitration, and other forms of representation,
and that the sums assessed shall be collected by the union by means of the check-off arrangement with
petitioner and shall be paid to Atty. Clave, in accordance with the retainer agreement between Atty.
Clave and the union. Resolution No. 15-S-84 was subsequently modified which only affected the amount
of negotiation fees payable to Atty. Clave, from 10% down to 5%

After the promulgation of Resolution No. 15-S-84, the Acting President of the union issued a
Memorandum dated June 2, 1984, directing all union members to comply with said resolution and to
execute check-off authorization. The private respondents alleged that they did not comply with the
directive respondents of the Acting President, but the union officers stated that 167 employees
accomplished the authorization forms and sent them to the personnel department of petitioner.

Petitioner, relying on Resolution No. 001-83, Resolution No. 15-S-84, Resolution No. 1-S-84, the letter
dated January 4, 1984 by David Clave, and the letter dated October 1, 1983 by Cipriano Mangubat, CLCC
President, through the then Head of the Tollways Division, advanced the total amount of P120,000.00 to
Atty. Clave, as follows:

(1) P100,000.00 in August of 1984; and

(2) P20,000.00 in February of 1985.

Petitioner, pursuant to Resolution No. 001-83, Resolution No. 15-S-84, General Membership Resolution
No. 1-S-84, as well as the submitted individual check-off authorizations, deducted P20.00 monthly from
the salaries of its employees subject of said resolutions, effective March, 1985. The deduction was
increased to P30.00 monthly per employee, effective April, 1985. Petitioner was not able to check-off
said amounts against all of its rank and file employees for the Tollways Division.
On April 17, 1985, petitioner turned over the total sum of Sixty Thousand Pesos (P60,000.00) to Atty.
Clave coming from the check-off special assessments. On September 30, 1985, petitioner turned over to
said lawyer the sum of Ten Thousand Pesos (P10,000.00) also out of the check-off special assessments.

Petitioner stopped the said deductions effective April, 1986, at which time it had allegedly collected a
total amount of One Hundred Fifty-Five Thousand Eight Hundred Pesos (P1,55800.00) as assessment
fees.

On July 11, 1985, the 388 private respondents, members of the then CDCP Union, now PNCC Employees
and Workers Union, filed a petition with the National Capital Region Director of the Department of
Labor and Employment (DOLE) against their own union officers and the petitioner. The petition asked
for the following reliefs:

(1) The issuance of a temporary restraining order enjoining petitioner, as their employer, from
further collecting special assessments from the salaries of the union members;

(2) The issuance of an order requiring the petitioner-employer to deposit with the Regional Office
of DOLE all sums of money in its possession collected from employees pursuant to said assessment;

(3) A declaration that the Resolution No. 15-S-84 of the Executive Board of the Union is null and
void;

(4) The issuance of an order permanently enjoining the petitioner-employer from making
deductions from the employees' salaries by authority of Resolution No. 15-S-84; and

(5) The issuance of an order directing the petitioner-employer and/or the union officers to return
the amounts already deducted from their salaries pursuant to Resolution No. 15-S84.

The petition was certified to the Med-Arbiter for hearing and resolution. The summons supposedly sent
to the petitioner by the BLR was not served on responsible officials of petitioner. The records show that
the first summons was served by a private messengerial company; the second summons was served on
Armando Ancheta, a personnel assistant, on August 5, 1985; then upon Francisco Gabis, Jr., liaison
officer, on August 14, 1985; and finally on Mary Fernandez, a clerk, on September 9, 1985. Petitioner
was not able to file any pleading in the hearings of the case, and was unable to present its side.

On September 18, 1985, Atty. Clave moved to intervene and filed his position paper with the Med-
Arbiter. On October 14, 1985, public respondent Med-Arbiter issued an Order, which declared
Resolution No. 15-S-84 null and void and of no effect, ordered petitioner to stop collecting special
assessments against the salaries of union members and other rank and file employees of petitioner, and
ordered petitioner and the union, jointly and severally, to return to the employees concerned the
amounts deducted from their salaries pursuant to Resolution No. 15-S84. Atty. Clave filed an appeal
with the BLR on November 15, 1985. On June 30, 1986, the then Director of the Bureau of Labor
Relations (BLR), Cresencio B. Trajano, dismissed the appeal and affirmed the order of the

Med-Arbiter.

Public respondent BLR Director Pura Ferrer-Calleja issued a writ of execution on November 5, 1986,
directing the Enforcement Unit of the NCR Branch to collect from petitioner-employer and/or the CDCP
Union the sum of P257,400.00, the total amount of deductions made against the salaries of the
employees, or to satisfy said amount from the movable or immovable properties of the petitioner
and/or union which are not exempt from execution.

On December 29, 1986, petitioner filed an Urgent Motion for Reconsideration and to Quash Writ of
Execution on the ground that it was denied due process because it was never notified of the
proceedings and it had no opportunity to be heard. In an Order dated September 19, 1987, the Director
of the BLR denied the motion for reconsideration.

The Director of BLR issued an alias writ of execution dated October 13, 1987. Notice of this writ was
received by the petitioner on October 26, 1987 and subsequently the Enforcement Unit of the NCR
Arbitration Branch garnished the bank deposits of petitioner with the Philippine National Bank (PNB),
Buendia Avenue Branch and the Far East Bank and Trust Company, Shaw Boulevard Branch.

The responsible officials of petitioner who could have known of the case have left or were retired from
the petitioner after the EDSA Revolution of February, 1986. The new management of the petitioner was
never informed of this pending case, until petitioner received the first writ of execution. This case was
referred to the Office of the Government Corporate Counsel only on November 6, 1987.
Petitioner now questions the said orders of public respondents, as issued without jurisdiction, or in
excess of their jurisdiction and/or committed with grave abuse of discretion, because—

(1) There was a denial of petitioner's right to due process of law;

(2) The jurisdiction of the Med-Arbiter and the BLR covers only disputes between and among the
union, its officers and members, and that the BLR has no jurisdiction over matters where an interested
party, like the petitioner-employer herein, is involved;

(3) The petitioner-employer has no obligation to guarantee that the agent of private respondents,
namely the union acting through its officers, will faithfully comply with its obligation to its members;

(4) The 167 workers who submitted individual written authorizations for check-off are now
estopped from seeking a reimbursement from the petitioner;

(5) Petitioner has a just claim amounting to P190,000.00 against the union for advocate's fees paid
to Atty. Clave; and

(6) The amount of P257,400.00 stated in the Writ of Execution and the alias writ is not based on
evidence presented, and consequently, the public respondents acted with grave abuse of discretion in
granting that amount. The petitioner's records show that the amounts checked-off add up to only
P155,800.00.

On November 23, 1987, this Court issued a temporary restraining order, enjoining the public
respondents from enforcing all the assailed orders, writs of executions and notices of garnishment in
BLR Case No. A-11-282-85 (NCR-LRD-M-7-275- 85). 1

On the issue of jurisdiction, the Court finds that respondent Director has jurisdiction over the
controversy. Under Article 241 of the Labor Code, the Bureau of Labor Relations has jurisdiction over
cases of reported violations thereof and to mete the appropriate penalty in disputes between and
among the union, its officers and members. The petition was for violation of said article which provides
that "(n)o special assessment or other extra-ordinary fees may be levied upon the members of a labor
organization unless authorized by a written resolution of a majority of all the members at a general
membership meeting duly called for the purpose. ..." 2

The principal relief sought in the case was for the nullification of Union Resolution No. 15-S-84. The
inclusion of petitioner as a co-respondent and the monetary claim against it is only incidental or ancillary
to the principal relief and is a consequence of petitioner having acted as a collection agent of the
respondent union officers. The action, therefore, is not essentially a money claim for underpayment of
wages that would fall under the jurisdiction of the labor arbiter. 3

The next issue is whether or not petitioner was afforded due process. The original claim of private
respondents was filed with the DOLE on July 11, 1985. Records of the BLR disclose that summons were
served upon minor employees of the petitioner, the last being on September 9, 1985. There followed
those abnormal times, the snap elections and the chaotic situation of the national elections culminating
in the EDSA Revolution of 1986. We can take judicial notice that the political upheaval of 1986 affected
the petitioner as a government-controlled corporation. There was a change of management. The
defective service of summons prevented the pending case from being brought to the attention of
petitioner's Legal Department. The eloquent non-appearance of petitioner in all the hearings
establishing a money claim against it is an indication of lack of sufficient notice regarding the case. It
came to know of the case only when the judgment against it was being executed.

Notice to enable the other party to be heard and to present evidence is not a mere technicality or a
trivial matter in any administrative or judicial proceedings. The service of summons is a very vital and
indispensable ingredient of due process.

In this case, the service of summons upon the minor subordinates of petitioner's Tollways Division is not
valid and binding. Under Section 15, Rule 14 of the Rules of Court, service of summons upon public
corporations must be made on its executive head or on such officer or officers as the law or the court
may direct. Under Section 13 of the same Rule, service upon a private corporation may be made on the
president, manager, secretary, cashier, agent or any of its directors.

The contention of public respondent is that petitioner had due notice and that technical rules are not
binding in proceedings under the Labor Code. 4 However, under Sections 4 and 5 of Rule IV of the
Revised Rules of the NLRC, service of such summons must be made as follows:
Section 4. Service of notices and resolutions. Notice of summons and copies of orders, resolutions
or decisions shall be served personally by the bailiff or duly authorized public officer or by registered
mail on the parties to the case; Provided, that where a party is represented by counsel or authorized
representative, service shall be made on the latter ... (Emphasis supplied.)

and

Section 5. Proof and completeness of service. The return is prima facie proof of the facts indicated
therein Service by registered mails is complete upon receipt by the addressee or his agents. (Emphasis
supplied.)

To determine the scope or meaning of such authorized representative or agents of parties on whom
summon served, the provisions of the Rules of Court should apply in a suppletory character. 5

Public respondents argue that as petitioner filed a motion for reconsideration of the order of
respondent calling for the issuance of the writ of execution there was no denial of the opportunity to be
heard. However, said motion was denied without even considering the merit of the same but on the
technical ground that it was filed out of time. Accordingly thereby petitioner was denied due process.

Petitioner should be afforded its day in court. It must be given the opportunity to prove its contention
that what was actually collected as check-off assessments from union members is only P155,800.00 and
not P257,400.00 as assessed by public respondents. Its advance payments to the labor advocate must
also be considered.

In sum, the Court holds that petitioner was not duly notified of the pending case because of defective
service of summons. It was derived of its right to be heard and to present evidence which are essential
ingredients of due process of law.

WHEREFORE AND BY REASON OF THE FOREGOING, the restraining order issued by this Court in favor of
petitioner is made permanent, and all the assailed orders of October 14, 1985, June 30, 1986, November
5, 1986, September 12, 1987 and October 13, 1987, writs of execution and notices of garnishment in
BLR Case No. A-11-282-85 (NCR-LRD-M-7-275-85) against petitioner only are SET ASIDE for being null
and void. This decision is immediately executory.
ABS-CBN SUPERVISORS EMPLOYEES UNION MEMBERS v. ABS-CBN BROADCASTING CORP.G.R. No.
106518, March 11, 1999

Facts:

The ABS-CBN Supervisor’s Union, represented by the Union Officers and ABS-CBNBroadcasting
Corporation signed and concluded a collective bargaining agreement with a check-off of 10% of the sum
total of all the salary increases and signing bonuses granted to the Supervisors.However, the Union
members filed a complaint with the Bureau of Labor Relations against its UnionOfficers and ABS-CBN
Broadcasting alleging that the check off provision is illegal because it was never submitted for
consideration and approval to “all the members at a general membership meeting called for the
purpose”, and prayed for its suspension. The Union Officers and ABS-CBN prayed for the dismissal of the
complaint for lack of merit, arguing that the check-off provision is in accordance with the law asmajority
of the Union members individually executed a written authorization giving the Union officers and ABS-
CBN a blanket authority to deduct subject amount.The Med-Arbiter issued an order declaring the check-
off provision illegal and ordered for therefund of an amount advance by ABS-CBN as part of the 10%
sum total of CBA benefits and to stop fromfurther making advances and deductions from the union
members’ salaries. On appeal, DOLE

Undersecretary Laguesma affirmed in toto the Order of the Med-Arbiter. However, after filing of a
Motionfor Reconsideration, Undersecretary Laguesma reversed itself and ordered that its first decision
be setaside and dismissed the complaint for lack of merit.

Issue:

Is the special assessment of 10% of the sum total of CBA benefits illegal?

Law Applicable: Art. 241 (g), (n) and (o), and Art. 222 (b) of the Labor Code

Art. 241. Rights and conditions of membership in a labor organization

– The following are the rights and conditions of membership in a labor organization: xxx xxx xxx (g) No
officer, agent, or member of a labor organization shall collect any fees,dues or other contributions in its
behalf to make any disbursement of its money or funds unless he is duly authorized pursuant to its
constitution and by-laws. xxx xxx xxx (n) No special assessment or other extraordinary fees may be
levied uponmembers of a labor organization unless authorized by a written resolution of amajority of all
the members of a general membership meeting duly called for the purpose. The secretary of the
organization shall record the minutes of themeeting including the list of all members present, the votes
cast, the purpose of the special assessment or fees and the recipient of such assessment or fees.The
record shall be attested to by the president.(o) Other than for mandatory activities under the Code, no
special assessments,attorney’s fees, negotiation fees or any other extraordinary fees may be checked off
from any amount due to an employee without anindividual written authorizationduly signed by the
employee. The authorization should specifically state the amount, purpose and beneficiary of the
deductions. Art. 222. Appearances and Fees – xxx xxx xxx (b) No attorney’s fees, negotiationfees or
similar charges of any kind arising from collective bargaining negotiations or conclusion of the collective
agreement shall be imposed on any individual member of the contracting union: Provided, however,
that attorney’s fees may becharged against union fundsin an amount to be agreed upon by the parties.
Any contract, agreement or arrangement of any sort to the contrary shall be null and void.

Ruling: The 10% special assessment authorized in the Collective Bargaining Agreement is valid.

For an order imposing a special assessment for Union’s incidental expenses, attorney’s fees and
representation expenses to be valid, 3 requisites must be complied with namely: (1) authorization by a
written resolution of the majority of all the members at the general membership meeting duly called for
the purpose; (2) secretary’s record of the minutes of the meeting; and (3) individual written
authorization for check-off duly signed by the employee concerned. Based on the records of the case,
these requisites have been complied with by the Union. A general meeting was held wherein the
members agreed that a 10% special assessment from the total economic package due to every member
would be checked-off for negotiation, other miscellaneous expenses and attorney’s fees. The minutes
of the said meeting were recorded by the Union’s Secretary, Ma. Carminda Muñoz and noted by its
President, Herbert Rivera and that 85 of its members executed individual authorizations for check-off.
Since all of the requisites are present, the validity of the 10% special assessment should be upheld.

Opinion:

A check-off is a process of deducting a percentage from a Union member’s wages for the payment of
union dues and fees to be considered as funds of the Union. This policy is to ensure that the Union has
ample amount of funds to continue its operation and to provide better services to its members.
However, the law provides for its limitations and certain requisites must be complied with for the valid
imposition of check offs. These requisites are:1. Authorization by a written resolution of the majority of
all the members at a general membership meeting duly called for the purpose;2.

Secretary’s record of the minutes of the meeting; and

3. Individual written authorization for check-off duly signed by the employee concerned.Failure on the
part of the Union to meet these requirements would render such imposition illegalwhich would be
tantamount to a deprivation to an employee of his basic living wage. Any deductionsalready made must
be reimbursed back to its members.
Benjamin Vidoriano Vs Elizalde Rope Workers union GR No. L-25246 September 12 1974

FACTS: Benjamin victoriano a member of iglesia ni cristo had been in the employ of the Elizalde Rope
factory Inc since 1958. Her was a member of elizalde rope workers union which had with the company a
CBA containing a closed shop provision which reads as follow “Membership union shall be required as a
condition of employment for all permanent employees worker covered by this agreement.” RA 3350
was enacted introducing an amendment to paragraph (4) subsection (a) of section 4 of RA 875 as follows
“ but such agreement shall not cover members of any religious sect which prohibit affiliation of their
member in any such 0labor organization” Benjamin victoriano presents his resignation to appellant
union thereupon the union wrote a formal letter to separate the appellee from the service in view of the
fact that he was resigning from the union as member of the company notified the apellee and his
counsel that unless the appellee could achieve a satisfactory arrangement with the union the company
would be constrained to dismiss him from the service . this prompted appellee to file an action for
injunction to enjoin the company and the union from dismissing apallee.

ISSUE: WON RA 3350 is unconstitutional

HELD: the constitution provision only prohibits legislation for the support of any religious tenets or the
modes of worship of any sect, thus forestalling compulsion by law of the acceptance of any creed or the
chosen form of religion within limits of utmost amplitude. RA 3350 does not require as a qualification on
condition in joining any lawful association membership in any particular religion on in any religious sect
neither does the act requires affiliation with a religious sect that prohibits its member from joining a
labor union as a condition on qualification for withdrawing from labor union RA 3350 only exempts
member with such religious affililiation from the required to do a positive act – to exercise the right to
join or to resign from the union. He is exempted from form the coverage of any closed shop agreement
that a labor union may have entered into. Therefore RA 3350 is never an illegal evasion of constitutional
provision or prohibition to accomplish a desired result which is lawful in itself by vering or following a
legal way to do it.
SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION (SSSEA), DIONISION T. BAYLON, RAMON
MODESTO, JUANITO MADURA, REUBEN ZAMORA, VIRGILIO DE ALDAY, SERGIO ARANETA, PLACIDO
AGUSTIN, VIRGILIO MAGPAYO, petitioner,

vs.

THE COURT OF APPEALS, SOCIAL SECURITY SYSTEM (SSS), HON. CEZAR C. PERALEJO, RTC, BRANCH 98,
QUEZON CITY, respondents.

G.R. No. 85279

July 28, 1989

Facts:

On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon City a complaint for damages
with a prayer for a writ of preliminary injunction against petitioners, alleging that on June 9, 1987, the
officers and members of SSSEA staged an illegal strike and baricaded the entrances to the SSS Building,
preventing non-striking employees from reporting for work and SSS members from transacting business
with the SSS; that the strike was reported to the Public Sector Labor - Management Council, which
ordered the strikers to return to work; that the strikers refused to return to work; and that the SSS
suffered damages as a result of the strike. The complaint prayed that a writ of preliminary injunction be
issued to enjoin the strike and that the strikers be ordered to return to work; that the defendants
(petitioners herein) be ordered to pay damages; and that the strike be declared illegal.

It appears that the SSSEA went on strike after the SSS failed to act on the union's demands, which
included: implementation of the provisions of the old SSS-SSSEA collective bargaining agreement (CBA)
on check-off of union dues; payment of accrued overtime pay, night differential pay and holiday pay;
conversion of temporary or contractual employees with six (6) months or more of service into regular
and permanent employees and their entitlement to the same salaries, allowances and benefits given to
other regular employees of the SSS; and payment of the children's allowance of P30.00, and after the
SSS deducted certain amounts from the salaries of the employees and allegedly committed acts of
discrimination and unfair labor practices.

Issue:
Whether or not employees of the Social Security System (SSS) have the right to strike.

Held:

The 1987 Constitution, in the Article on Social Justice and Human Rights, provides that the State "shall
guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law" [Art. XIII, Sec. 31].

Resort to the intent of the framers of the organic law becomes helpful in understanding the meaning of
these provisions. A reading of the proceedings of the Constitutional Commission that drafted the 1987
Constitution would show that in recognizing the right of government employees to organize, the
commissioners intended to limit the right to the formation of unions or associations only, without
including the right to strike.

Considering that under the 1987 Constitution "the civil service embraces all branches, subdivisions,
instrumentalities, and agencies of the Government, including government-owned or controlled
corporations with original charters" [Art. IX(B), Sec. .2(l) see also Sec. 1 of E.O. No. 180 where the
employees in the civil service are denominated as "government employees"] and that the SSS is one
such government-controlled corporation with an original charter, having been created under R.A. No.
1161, its employees are part of the civil service [NASECO v. NLRC, G.R. Nos. 69870 & 70295, November
24,1988] and are covered by the Civil Service Commission's memorandum prohibiting strikes. This being
the case, the strike staged by the employees of the SSS was illegal.
G.R. No. 79025. December 29, 1989.

BENGUET ELECTRIC COOPERATIVE, INC., petitioner, vs. HON. PURA FERRER-CALLEJA, Director of the
Bureau of Labor Relations, and BENECO EMPLOYEES LABOR UNION, respondents.

Facts:

Beneco Worker's Labor Union-Association of Democratic Labor Organizations (BWLU- ADLO) filed a
petition for direct certification as the sole and exclusive bargaining representative of all the rank and file
employees of Benguet Electric Cooperative, Inc. (BENECO) alleging that BENECO has in its employ 214
rank and file employees; that 198 or 92.5% of these employees have supported the filing of the petition;
that no certification election has been conducted for the last 12 months; that there is no existing
collective bargaining representative of the rank and file employees sought to represented by BWLU-
ADLO; and, that there is no collective bargaining agreement in the cooperative.

An opposition to the petition was filed by the Beneco Employees Labor Union (BELU) contending that it
was certified as the sole and exclusive bargaining representative of the subject workers pursuant to an
order issued by the med-arbiter; that pending resolution by the NLRC are two cases it filed against
BENECO involving bargaining deadlock and unfair labor practice; and, that the pendency of these cases
bars any representation question.

BENECO, on the other hand, filed a motion to dismiss the petition claiming that it is a non-profit electric
cooperative engaged in providing electric services to its members and patron-consumers; and, that the
employees sought to be represented by BWLU-ADLO are not eligible to form, join or assist labor
organizations of their own choosing because they are members and joint owners of the cooperative.

The med-arbiter issued an order giving due course to the petition for certification election. However, the
med-arbiter limited the election among the rank and file employees of BENECO who are non-members
thereof and without any involvement in the actual ownership of the cooperative. The med-arbiter found
that there are 37 employees who are not members and without any involvement in the actual
ownership of the cooperative.

BELU and BENECO appealed but the same was dismissed for lack of merit. So BENECO filed with the SC a
petition for certiorari which the SC dismissed for lack of merit in a minute resolution dated April 1986.

The ordered certification election was held in October 1986. Prior to the conduct thereof BENECO's
counsel verbally manifested that "the cooperative is protesting that employees who are members-
consumers are being allowed to vote when they are not eligible to be members of any labor union for
purposes of collective bargaining; much less, to vote in this certification election." BENECO submitted a
certification showing that only 4 employees are not members of BENECO and insisted that only these
employees are eligible to vote in the certification election. Canvass of the votes showed that BELU
garnered 49 of the 83 "valid" votes cast.
Thereafter BENECO formalized its verbal manifestation by filing a Protest. The med-arbiter dismissed the
protest. BLR director Calleja affirmed the med-arbiter's order and certified BELU as the sole and
exclusive bargaining agent of all the rank and file employees of BENECO.

Issue: W/N employees of a cooperative are qualified to form or join a labor organization for purposes of
collective bargaining. NO

Ratio:

Under Article 256 LC, to have a valid certification 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 workers in the unit." BENECO asserts that the
certification election held was null and void since members-employees who are not eligible to form and
join a labor union for purposes of collective bargaining were allowed to vote therein.

The issue has already been resolved and clarified in the case of Cooperative Rural Bank of Davao City,
Inc. vs. Ferrer Calleja, et al. and reiterated in the cases of Batangas-Electric Cooperative Labor Union v.
Young, et al. and San Jose City Electric Service Cooperative, Inc. v. Ministry of Labor and Employment, et
al. wherein the Court had stated that the right to collective bargaining is not available to an employee of
a cooperative who at the same time is a member and co-owner thereof. With respect, however, to
employees who are neither members nor co-owners of the cooperative they are entitled to exercise the
rights to self-organization, collective bargaining and negotiation as mandated by the Constitution and
applicable statutes.

Calleja argues that to deny the members of petitioner cooperative the right to form, assist or join a labor
union of their own choice for purposes of collective bargaining would amount to a patent violation of
their right to self-organization.

The above contention is untenable. Contrary to respondents' claim, the fact that the members-
employees of BENECO do not participate in the actual management of the cooperative does not make
them eligible to form, assist or join a labor organization for the purpose of collective bargaining with
petitioner. The Court's ruling in the Davao City case that members of cooperative cannot join a labor
union for purposes of collective bargaining was based on the fact that as members of the cooperative
they are co-owners thereof. As such, they cannot invoke the right to collective bargaining for "certainly
an owner cannot bargain with himself or his co-owners." It is the fact of ownership of the cooperative,
and not involvement in the management thereof, which disqualifies a member from joining any labor
organization within the cooperative. Thus, irrespective of the degree of their participation in the actual
management of the cooperative, all members thereof cannot form, assist or join a labor organization for
the purpose of collective bargaining.

Respondent union further claims that if nominal ownership in a cooperative is "enough to take away the
constitutional protections afforded to labor, then there would be no hindrance for employers to grant,
on a scheme of generous profit sharing, stock bonuses to their employees and thereafter claim that
since their employees are stockholders, albeit in a minimal and involuntary manner, they are now also
co-owners and thus disqualified to form unions."

The above contention is based on the erroneous presumption that membership in a cooperative is the
same as ownership of stocks in ordinary corporations. While cooperatives may exercise some of the
rights and privileges given to ordinary corporations provided under existing laws, such cooperatives
enjoy other privileges not granted to the latter. Similarly, members of cooperatives have rights and
obligations different from those of stockholders of ordinary corporations. It was precisely because of the
special nature of cooperatives, that the Court held in the Davao City case that members-employees
thereof cannot form or join a labor union for purposes of collective bargaining. The Court held that:

A cooperative is by its nature different from an ordinary business concern being run either by persons,
partnerships, or corporations. Its owners and/or members are the ones who run and operate the
business while the others are its employees. As above stated, irrespective of the number of shares
owned by each member they are entitled to cast one vote each in deciding upon the affairs of the
cooperative. An employee therefore of such a cooperative who is a member and co-owner thereof
cannot invoke the right to collective bargaining for certainly an owner cannot bargain with himself or his
co-owners.

Article 256 of the Labor Code provides, among others, that:

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 workers in the unit.

In this case it cannot be determined whether or not respondent union was duly elected by the eligible
voters of the bargaining unit since even employees who are ineligible to join a labor union within the
cooperative because of their membership therein were allowed to vote in the certification election.
Considering the foregoing, the Court finds that respondent director committed grave abuse of discretion
in certifying respondent union as the sole and exclusive bargaining representative of the rank and file
employees of petitioner cooperative.
[G.R. No. 108855. February 28, 1996]

METROLAB INDUSTRIES, INC., petitioner, vs. HONORABLE MA. NIEVES ROLDAN-CONFESOR, in her
capacity as Secretary of the Department of Labor and Employment and METRO DRUG CORPORATION
EMPLOYEES ASSOCIATION-FEDERATION OF FREE WORKERS, respondents.

SYLLABUS

1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF ADMINISTRATIVE AGENCIES; RULE; CASE AT BAR. -
We reaffirm the doctrine that considering their expertise in their respective fields, factual findings of
administrative agencies supported by substantial evidence are accorded great respect and binds this
Court. The Secretary of Labor ruled, thus: x x x Any act committed during the pendency of the dispute
that tends to give rise to further contentious issues or increase the tensions between the parties should
be considered an act of exacerbation. One must look at the act itself, not on speculative reactions. A
misplaced recourse is not needed to prove that a dispute has been exacerbated. For instance, the Union
could not be expected to file another notice of strike. For this would depart from its theory of the case
that the layoff is subsumed under the instant dispute, for which a notice of strike had already been filed.
On the other hand, to expect violent reactions, unruly behavior, and any other chaotic or drastic action
from the Union is to expect it to commit acts disruptive of public order or acts that may be illegal. Under
a regime of laws, legal remedies take the place of violent ones. x xx Protest against the subject layoffs
need not be in the form of violent action or any other drastic measure. In the instant case the Union
registered their dissent by swiftly filing a motion for a cease and desist order. Contrary to petitioners
allegations, the Union strongly condemned the layoffs and threatened mass action if the Secretary of
Labor fails to timely intervene: x x x 3. This unilateral action of management is a blatant violation of the
injunction of this Office against committing acts which would exacerbate the dispute. Unless such act is
enjoined the Union will be compelled to resort to its legal right to mass actions and concerted activities
to protest and stop the said management action. This mass layoff is clearly one which would result in a
very serious dispute unless this Office swiftly intervenes. x x x Metrolab and the Union were still in the
process of resolving their CBA deadlock when petitioner implemented the subject layoffs. As a result,
motions and oppositions were filed diverting the parties attention, delaying resolution of the bargaining
deadlock and postponing the signing of their new CBA, thereby aggravating the whole conflict.

2. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; EXERCISE OF MANAGEMENT

PREROGATIVES; NOT ABSOLUTE; SUBJECT TO EXCEPTIONS IMPOSED BY LAW. - This Court recognizes the
exercise of management prerogatives and often declines to interfere with the legitimate business
decisions of the employer. However, this privilege is not absolute but subject to limitations imposed by
law. In PAL vs. NLRC, (225 SCRA 301 [1993]), we issued this reminder: ... the exercise of management
prerogatives was never considered boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]), it was
held that managements prerogatives must be without abuse of discretion ...All this points to the
conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed by
limi(ations found in law, a collective bargaining agreement, or the general principles of fair play and
justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]).

3. ID.; ID.; ID.; ID.; ID.; CASE AT BAR AN EXCEPTION. - The case at bench constitutes one of the
exceptions. The Secretary of Labor is expressly given the power under the Labor Code to assume
jurisdiction and resolve labor disputes involving industries indispensable to national interest. The
disputed injunction is subsumed under this special grant of authority. Art. 263 (g) of the Labor Code
specifically provides that: x x x (g) When, in his opinion, there exists a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same to the
Commission for compulsory arbitration. Such assumption or certification shall have the effect of
automatically enjoining the intended or impending strike or lockout as specified in the assumption or
certification order. If one has already taken place at the time of assumption or certification, all striking
or locked out employees shall immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing before the strike or
lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law
enforcement agencies to ensure compliance with this provision as well as with such orders as he may
issue to enforce the same. . . . That Metrolabs business is of national interest is not disputed. Metrolab is
one of the leading manufacturers and suppliers of medical and pharmaceutical products to the country.
Metrolabs management prerogatives, therefore, are not being unjustly curtailed but duly balanced with
and tempered by the limitations set by law, taking into account its special character and the particular
circumstances in the case at bench.

4. ID.; LABOR RELATIONS; INELIGIBILITY OF MANAGERIAL EMPLOYEES TO JOIN, FORM AND ASSIST ANY
LABOR ORGANIZATION; PROHIBITION EXTENDED TO CONFIDENTIAL EMPLOYEES. - Although Article 245
of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial
employees, jurisprudence has extended this prohibition to confidential employees or those who by
reason of their positions or nature of work are required to assist or act in a fiduciary manner to
managerial employees and hence, are likewise privy to sensitive and highly confidential records.

5. ID.; ID.; EXCLUSION OF CONFIDENTIAL EMPLOYEES FROM THE RANK AND FILE BARGAINING UNIT;
NOT TANTAMOUNT TO DISCRIMINATION. - Confidential employees cannot be classified as rank and file.
As previously discussed, the nature of employment of confidential employees is quite distinct from the
rank and file, thus, warranting a separate category. Excluding confidential employees from the rank and
file bargaining unit, therefore, is not tantamount to discrimination.

APPEARANCES OF COUNSEL

Bautista Picazo Buyco Tan & Fider for petitioner.

The Solicitor General for public respondent.

Perfecto V. Fernandez, Jose P. Fernandez & Cristobal P. Fernandez for Metro Drug Corporation.

DECISION

KAPUNAN, J.:

This is a petition for certiorari under Rule 65 of the Revised Rules of Court seeking the annulment of the
Resolution and Omnibus Resolution of the Secretary of Labor and Employment dated 14 April 1992 and
25 January 1993, respectively, in OS-AJ-04491-11 (NCMB-NCR-NS-08-595-9 1; NCMB-NCR-NS-09-678-91)
on grounds that these were issued with grave abuse of discretion and in excess of jurisdiction.

Private respondent Metro Drug Corporation Employees Association-Federation of Free Workers

(hereinafter referred to as the Union) is a labor organization representing the rank and file employees of
petitioner Metrolab Industries, Inc. (hereinafter referred to as Metrolab/MII) and also of Metro Drug,
Inc.

On 31 December 1990, the Collective Bargaining Agreement (CBA) between Metrolab and the Union
expired. The negotiations for a new CBA, however, ended in a deadlock.
Consequently, on 23 August 1991, the Union filed a notice of strike against Metrolab and Metro Drug
Inc. The parties failed to settle their dispute despite the conciliation efforts of the National Conciliation
and Mediation Board.

To contain the escalating dispute, the then Secretary of Labor and Employment, Ruben D. Torres, issued
an assumption order dated 20 September 1991, the dispositive portion of which reads, thus:

WHEREFORE, PREMISES CONSIDERED, and pursuant to Article 263 (g) of the Labor Code, as amended,
this Office hereby assumes jurisdiction over the entire labor dispute at Metro Drug, Inc. - Metro Drug
Distribution Division and Metrolab Industries Inc.

Accordingly, any strike or lockout is hereby strictly enjoined. The Companies and the Metro Drug Corp.
Employees Association - FFW are likewise directed to cease and desist from committing any and all acts
that might exacerbate the situation.

Finally, the parties are directed to submit their position papers and evidence on the aforequoted
deadlocked issues to this office within twenty (20) days from receipt hereof.

SO ORDERED.[1] (Italics ours.)

On 27 December 1991, then Labor Secretary Torres issued an order resolving all the disputed items in
the CBA and ordered the parties involved to execute a new CBA.

Thereafter, the Union filed a motion for reconsideration.

On 27 January 1992, during the pendency of the abovementioned motion for reconsideration, Metrolab
laid off 94 of its rank and file employees.
On the same date, the Union filed a motion for a cease and desist order to enjoin Metrolab from
implementing the mass layoff, alleging that such act violated the prohibition against committing acts
that would exacerbate the dispute as specifically directed in the assumption order.[2]

On the other hand, Metrolab contended that the layoff was temporary and in the exercise of its
management prerogative. It maintained that the company would suffer a yearly gross revenue loss of
approximately sixty-six (66) million pesos due to the withdrawal of its principals in the Toll and Contract
Manufacturing Department. Metrolab further asserted that with the automation of the manufacture of
its product Eskinol, the number of workers required its production is significantly reduced.[3]

Thereafter, on various dates, Metrolab recalled some of the laid off workers on a temporary basis due to
availability of work in the production lines.

On 14 April 1992, Acting Labor Secretary Nieves Confesor issued a resolution declaring the layoff of
Metrolabs 94 rank and file workers illegal and ordered their reinstatement with full backwages. The
dispositive portion reads as follows:

WHEREFORE, the Unions motion for reconsideration is granted in part, and our order of 28 December
1991 is affirmed subject to the modifications in allowances and in the close shop provision. The layoff of
the 94 employees at MII is hereby declared illegal for the failure of the latter to comply with our
injunction against committing any act which may exacerbate the dispute and with the 30-day notice
requirement. Accordingly, MII is hereby ordered to reinstate the 94 employees, except those who have
already been recalled, to their former positions or substantially equivalent, positions with full backwages
from the date they were illegally laid off on 27 January 1992 until actually reinstated without loss of
seniority rights and other benefits. Issues relative to the CBA agreed upon by the parties and not
embodied in our earlier order are hereby ordered adopted for incorporation in the CBA. Further, the
dispositions and directives contained in all previous orders and resolutions relative to the instant
dispute, insofar as not inconsistent herein, are reiterated. Finally, the parties are enjoined to cease and
desist from committing any act which may tend to circumvent this resolution.

SO RESOLVED.[4]
On 6 March 1992, Metrolab filed a Partial Motion for Reconsideration alleging that the layoff did not
aggravate the dispute since no untoward incident occurred as a result thereof. It, likewise, filed a motion
for clarification regarding the constitution of the bargaining unit covered by the CBA.

On 29 June 1992, after exhaustive negotiations, the parties entered into a new CBA. The execution,
however, was without prejudice to the outcome of the issues raised in the reconsideration and
clarification motions submitted for decision to the Secretary of Labor.[5]

Pending the resolution of the aforestated motions, on 2 October 1992, Metrolab laid off 73 of its
employees on grounds of redundancy due to lack of work which the Union again promptly opposed on 5
October 1992.

On 15 October 1992, Labor Secretary Confesor again issued a cease and desist order. Metrolab moved
for a reconsideration.[6]

On 25 January 1993, Labor Secretary Confesor issued the assailed Omnibus Resolution containing the
following orders:

xxx xxx xxx.

1. MIIs motion for partial reconsideration of our 14 April 1992 resolution specifically that portion thereof
assailing our ruling that the layoff of the 94 employees is illegal, is hereby denied. MII is hereby ordered
to pay such employees their full backwages computed from the time of actual layoff to the time of
actual recall;

2. For the parties to incorporate in their respective collective bargaining agreements the clarifications
herein contained; and

3. MIIs motion for reconsideration with respect to the consequences of the second wave of layoff
affecting 73 employees, to the extent of assailing our ruling that such layoff tended to exacerbate the
dispute, is hereby denied. But inasmuch as the legality of the layoff was not submitted for our resolution
and no evidence had been adduced upon which a categorical finding thereon can be based, the same is
hereby referred to the NLRC for its appropriate action.

Finally, all prohibitory injunctions issued as a result of our assumption of jurisdiction over this dispute
are hereby lifted.

SO RESOLVED.[7]

Labor Secretary Confesor also ruled that executive secretaries are excluded from the closed-shop
provision of the CBA, not from the bargaining unit.

On 4 February 1993, the Union filed a motion for execution. Metrolab opposed. Hence, the present
petition for certiorari with application for issuance of a Temporary Restraining Order.

On 4 March 1993, we issued a Temporary Restraining Order enjoining the Secretary of Labor from
enforcing and implementing the assailed Resolution and Omnibus Resolution dated 14 April 1992 and 25
January 1993, respectively.

In its petition, Metrolab assigns the following errors:

THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT COMMITTED GRAVE ABUSE
OF DISCRETION AND EXCEEDED HER JURISDICTION IN DECLARING THE TEMPORARY LAYOFF ILLEGAL
AND ORDERING THE REINSTATEMENT AND PAYMENT OF BACKWAGES TO THE AFFECTED EMPLOYEES.*

B
THE PUBLIC RESPONDENT HON. SECRETARY OF LABOR AND EMPLOYMENT GRAVELY ABUSED HER
DISCRETION IN INCLUDING EXECUTIVE SECRETARIES AS PART OF THE BARGAINING UNIT OF RANK AND
FILE EMPLOYEES.[8]

Anent the first issue, we are asked to determine whether or not public respondent Labor Secretary
committed grave abuse of discretion and exceeded her jurisdiction in declaring the subject layoffs
instituted by Metrolab illegal on grounds that these unilateral actions aggravated the conflict between
Metrolab and the Union who were, then, locked in a stalemate in CBA negotiations.

Metrolab argues that the Labor Secretarys order enjoining the parties from committing any act that
might exacerbate the dispute is overly broad, sweeping and vague and should not be used to curtail the
employers right to manage his business and ensure its viability.

We cannot give credence to Metrolabs contention.

This Court recognizes the exercise of management prerogatives and often declines to interfere with the
legitimate business decisions of the employer. However, this privilege is not absolute but subject to
limitations imposed by law.[9]

In PAL v. NLRC,[10] we issued this reminder:

xxx xxx xxx

. . .the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs. Medina (
177 SCRA 565 [1989]), it was held that managements prerogatives must be without abuse of
discretion....

xxx xxx xxx

All this points to the conclusion that the exercise of managerial prerogatives is not unlimited. It is
circumscribed by limitations found in law, a collective bargaining agreement, or the general principles of
fair play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]). . . . (Italics ours.)

xxx xxx xxx.

The case at bench constitutes one of the exceptions. The Secretary of Labor is expressly given the power
under the Labor Code to assume jurisdiction and resolve labor disputes involving industries
indispensable to national interest. The disputed injunction is subsumed under this special grant of
authority. Art. 263 (g) of the Labor Code specifically provides that:

xxx xxx xxx

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory
arbitration. Such assumption or certification shall have the effect of automatically enjoining the
intended or impending strike or lockout as specified in the assumption or certification order. If one has
already taken place at the time of assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of
Labor and Employment or the Commission may seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with such orders as he may issue to enforce the same. .
. (Italics ours.)

xxx xxx xxx.

That Metrolabs business is of national interest is not disputed. Metrolab is one of the leading
manufacturers and suppliers of medical and pharmaceutical products to the country.

Metro labs management prerogatives, therefore, are not being unjustly curtailed but duly balanced with
and tempered by the limitations set by law, taking into account its special character and the particular
circumstances in the case at bench.
As aptly declared by public respondent Secretary of Labor in its assailed resolution:

xxx xxx xxx.

MII is right to the extent that as a rule, we may not interfere with the legitimate exercise of
management prerogatives such as layoffs. But it may nevertheless be appropriate to mention here that
one of the substantive evils which Article 263 (g) of the Labor Code seeks to curb is the exacerbation of a
labor dispute to the further detriment of the national interest. When a labor dispute has in fact occurred
and a general injunction has been issued restraining the commission of disruptive acts, management
prerogatives must always be exercised consistently with the statutory objective.[11]

xxx xxx xxx.

Metrolab insists that the subject layoffs did not exacerbate their dispute with the Union since no
untoward incident occurred after the layoffs were implemented. There were no work disruptions or
stoppages and no mass actions were threatened or undertaken. Instead, petitioner asserts, the affected
employees calmly accepted their fate as this was a matter which they had been previously advised
would be inevitable.[12]

After a judicious review of the record, we find no compelling reason to overturn the findings of the
Secretary of Labor.

We reaffirm the doctrine that considering their expertise in their respective fields, factual findings of
administrative agencies supported by substantial evidence are accorded great respect and binds this
Court.[13]

The Secretary of Labor ruled, thus:

xxx xxx xxx.

Any act committed during the pendency of the dispute that tends to give rise to further contentious
issues or increase the tensions between the parties should be considered an act of exacerbation. One
must look at the act itself, not on speculative reactions. A misplaced recourse is not needed to prove
that a dispute has been exacerbated. For instance, the Union could not be expected to file another
notice of strike. For this would depart from its theory of the case that the layoff is subsumed under the
instant dispute, for which a notice of strike had already been filed. On the other hand, to expect violent
reactions, unruly behavior, and any other chaotic or drastic action from the Union is to expect it to
commit acts disruptive of public order or acts that may be illegal. Under a regime of laws, legal remedies
take the place of violent ones.[14]

xxx xxx xxx.

Protest against the subject layoffs need not be in the form of violent action or any other drastic
measure. In the instant case the Union registered their dissent by swiftly filing a motion for a cease and
desist order. Contrary to petitioners allegations, the Union strongly condemned the layoffs and
threatened mass action if the Secretary of Labor fails to timely intervene:

xxx xxx xxx.

3. This unilateral action of management is a blatant violation of the injunction of this Office against
committing acts which would exacerbate the dispute. Unless such act is enjoined the Union will be
compelled to resort to its legal right to mass actions and concerted activities to protest and stop the said
management action. This mass layoff is clearly one which would result in a very serious labor dispute
unless this Office swiftly intervenes.[15]

xxx xxx xxx.

Metrolab and the Union were still in the process of resolving their CBA deadlock when petitioner
implemented the subject layoffs. As a result, motions and oppositions were filed diverting the parties
attention, delaying resolution of the bargaining deadlock and postponing the signing of their new CBA,
thereby aggravating the whole conflict.
We, likewise, find untenable Metrolabs contention that the layoff of the 94 rank-and-file employees was
temporary, despite the recall of some of the laid off workers.

If Metrolab intended the layoff of the 94 workers to be temporary, it should have plainly stated so in the
notices it sent to the affected employees and the Department of Labor and Employment. Consider the
tenor of the pertinent portions of the layoff notice to the affected employees:

xxx xxx xxx.

Dahil sa mga bagay na ito, napilitan ang ating kumpanya na magsagawa ng lay-off ng mga empleyado sa
Rank & File dahil nabawasan ang trabaho at puwesto para sa kanila. Marami sa atin ang kasama sa lay-
off dahil wala nang trabaho para sa kanila. Mahirap tanggapin ang mga bagay na ito subalit kailangan
nating gawin dahil hindi kaya ng kumpanya ang magbayad ng suweldo kung ang empleyado ay walang
trabaho. Kung tayo ay patuloy na magbabayad ng suweldo, mas hihina ang ating kumpanya at mas
marami ang maaring maapektuhan.

Sa pagpapatupad ng lay-off susundin natin ang LAST IN-FIRST OUT policy. Ang mga empleyadong may
pinakamaikling serbisyo sa kumpanya ang unang maaapektuhan. Ito ay batay na rin sa nakasaad sa ating
CBA na ang mga huling pumasok sa kumpanya ang unang masasama sa lay-off kapag nagkaroon ng
ganitong mga kalagayan.

Ang mga empleyado na kasama sa lay-off ay nakalista sa sulat na ito. Ang umpisa ng lay-off ay sa Lunes,
Enero 27. Hindi na muna sila papasok sa kumpanya. Makukuha nila ang suweldo nila sa Enero 30, 1992.

Hindi po natin matitiyak kung gaano katagal ang lay-off ngunit ang aming tingin ay matatagalan bago
magkaroon ng dagdag na trabaho. Dahil dito, sinimulan na namin ang isang Redundancy Program sa
mga supervisors. Nabawasan ang mga puwesto para sa kanila, kaya sila ay mawawalan ng trabaho at
bibigyan na ng redundancy pay.[16] (Italics ours.)

xxx xxx xxx.

We agree with the ruling of the Secretary of Labor, thus:

xxx xxx xxx.

. . .MII insists that the layoff in question is temporary not permanent. It then cites International
Hardware, Inc. vs. NLRC, 176 SCRA 256, in which the Supreme Court held that the 30-day notice required
under Article 283 of the Labor Code need not be complied with if the employer has no intention to
permanently severe (sic) the employment relationship.

We are not convinced by this argument. International Hardware involves a case where there had been a
reduction of workload. Precisely to avoid laying off the employees, the employer therein opted to give
them work on a rotating basis. Though on a limited scale, work was available. This was the Supreme
Courts basis for holding that there was no intention to permanently severe (sic) the employment
relationship.

Here, there is no circumstance at all from which we can infer an intention from MII not to sever the
employment relationship permanently. If there was such an intention, MII could have made it very clear
in the notices of layoff. But as it were, the notices are couched in a language so uncertain that the only
conclusion possible is the permanent termination, not the continuation, of the employment
relationship.

MII also seeks to excuse itself from compliance with the 30-day notice with a tautology. While insisting
that there is really no best time to announce a bad news, (sic) it also claims that it broke the bad news
only on 27 January 1992 because had it complied with the 30-day notice, it could have broken the bad
news on 02 January 1992, the first working day of the year. If there is really no best time to announce a
bad news (sic), it wouldnt have mattered if the same was announced at the first working day of the year.
That way, MII could have at least complied with the requirement of the law.[17]

The second issue raised by petitioner merits our consideration.

In the assailed Omnibus Resolution, Labor Secretary Confesor clarified the CBA provisions on closed-
shop and the scope of the bargaining unit in this wise:
xxx xxx xxx.

Appropriateness of the bargaining unit.

xxx xxx xxx.

Exclusions. In our 14 April 1992 resolution, we ruled on the issue of exclusion as follows:

These aside, we reconsider our denial of the modifications which the Union proposes to introduce on
the close shop provision. While we note that the provision as presently worded has served the
relationship of the parties well under previous CBAs, the shift in constitutional policy toward expanding
the right of all workers to self-organization should now be formally recognized by the parties, subject to
the following exclusions only:

1. Managerial employees; and

2. The executive secretaries of the President, Executive Vice-President, Vice-President, Vice President for
Sales, Personnel Manager, and Director for Corporate Planning who may have access to vital labor
relations information or who may otherwise act in a confidential capacity to persons who determine or
formulate management policies.

The provisions of Article I (b) and Attachment I of the 1988-1990 CBA shall thus be modified consistently
with the foregoing.

Article I (b) of the 1988-1990 CBA provides:

b)Close Shop. - All Qualified Employees must join the Association immediately upon regularization as a
condition for continued employment. This provision shall not apply to: (i) managerial employees who
are excluded from the scope of the bargaining unit; (ii) the auditors and executive secretaries of senior
executive officers, such as, the President, Executive Vice-President, Vice-President for Finance, Head of
Legal, Vice-President for Sales, who are excluded from membership in the Association; and (iii) those
employees who are referred to in Attachment I hereof, subject, however, to the application of the
provision of Article II, par. (b) hereof. Consequently, the above-specified employees are not required to
join the Association as a condition for their continued employment.

On the other hand, Attachment I provides:

Exclusion from the Scope of the Close Shop Provision

The following positions in the Bargaining Unit are not covered by the Close Shop provision of the CBA
(Article I, par. b):

1. Executive Secretaries of Vice-Presidents, or equivalent positions.

2. Executive Secretary of the Personnel Manager, or equivalent positions.

3. Executive Secretary of the Director for Corporate Planning, or equivalent positions.

4. Some personnel in the Personnel Department, EDP Staff at Head Office, Payroll Staff at Head Office,
Accounting Department at Head Office, and Budget Staff, who because of the nature of their duties and
responsibilities need not join the Association as a condition for their employment.

5. Newly-hired secretaries of Branch Managers and Regional Managers.

Both MDD and MII read the exclusion of managerial employees and executive secretaries in our 14 April
1992 resolution as exclusion from the bargaining unit. They point out that managerial employees are
lumped under one classification with executive secretaries, so that since the former are excluded from
the bargaining unit, so must the latter be likewise excluded.
This reading is obviously contrary to the intent of our 14 April 1992 resolution. By recognizing the
expanded scope of the right to self-organization, our intent was to delimit the types of employees
excluded from the close shop provision, not from the bargaining unit, to executive secretaries only.
Otherwise, the conversion of the exclusionary provision to one that refers to the bargaining unit from
one that merely refers to the close shop provision would effectively curtail all the organizational rights
of executive secretaries.

The exclusion of managerial employees, in accordance with law, must therefore still carry the qualifying
phrase from the bargaining unit in Article I (b)(i) of the 1988-1990 CBA. In the same manner, the
exclusion of executive secretaries should be read together with the qualifying phrase are excluded from
membership in the Association of the same Article and with the heading of Attachment I. The latter
refers to Exclusions from Scope of Close Shop Provision and provides that [t]he following positions in
Bargaining Unit are not covered by the close shop provision of the CBA.

The issue of exclusion has different dimension in the case of MII. In an earlier motion for clarification,
MII points out that it has done away with the positions of Executive Vice-President, Vice-President for
Sales, and Director for Corporate Planning. Thus, the foregoing group of exclusions is no longer
appropriate in its present organizational structure. Nevertheless, there remain MII officer positions for
which there may be executive secretaries. These include the General Manager and members of the
Management Committee, specifically i) the Quality Assurance Manager; ii) the Product Development
Manager; iii) the Finance Director; iv) the Management System Manager; v) the Human Resources
Manager; vi) the Marketing Director; vii) the Engineering Manager; viii) the Materials Manager; and ix)
the Production Manager.

xxx xxx xxx

The basis for the questioned exclusions, it should be noted, is no other than the previous CBA between
MII and the Union. If MII had undergone an organizational restructuring since then, this is a fact to
which we have never been made privy. In any event, had this been otherwise the result would have
been the same. To repeat, we limited the exclusions to recognize the expanded scope of the right to
self-organization as embodied in the Constitution.[18]
Metrolab, however, maintains that executive secretaries of the General Manager and the executive
secretaries of the Quality Assurance Manager, Product Development Manager, Finance Director,
Management System Manager, Human Resources Manager, Marketing Director, Engineering Manager,
Materials Manager and Production Manager, who are all members of the companys Management
Committee should not only be exempted from the closed-shop provision but should be excluded from
membership in the bargaining unit of the rank and file employees as well on grounds that their
executive secretaries are confidential employees, having access to vital labor information.[19]

We concur with Metrolab.

Although Article 245 of the Labor Code[20] limits the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence has extended this prohibition to confidential
employees or those who by reason of their positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly
confidential records.

The rationale behind the exclusion of confidential employees from the bargaining unit of the rank and
file employees and their disqualification to join any labor organization was succinctly discussed in Philips
Industrial Development v. NLRC:[21]

xxx xxx xxx.

On the main issue raised before Us, it is quite obvious that respondent NLRC committed grave abuse of
discretion in reversing the decision of the Executive Labor Arbiter and in decreeing that PIDIs Service
Engineers, Sales Force, division secretaries, all Staff of General Management, Personnel and Industrial
Relations Department, Secretaries of Audit, EDP and Financial Systems are included within the rank and
file bargaining unit.

In the first place, all these employees, with the exception of the service engineers and the sales force
personnel, are confidential employees. Their classification as such is not seriously disputed by PEO-FFW;
the five (5) previous CBAs between PIDI and PEO-FFW explicitly considered them as confidential
employees. By the very nature of their functions, they assist and act in a confidential capacity to, or have
access to confidential matters of, persons who exercise managerial functions in the field of labor
relations. As such, the rationale behind the ineligibility of managerial employees to form, assist or join a
labor union equally applies to them.

In Bulletin Publishing Co., Inc. vs. Hon. Augusto Sanchez, this Court elaborated on this rationale, thus:

x x x The rationale for this inhibition has been stated to be, because if these managerial employees
would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the
Union in view of evident conflict of interests. The Union can also become company-dominated with the
presence of managerial employees in Union membership.

In Golden Farms, Inc. vs. Ferrer-Calleja, this Court explicitly made this rationale applicable to confidential
employees:

This rationale holds true also for confidential employees such as accounting personnel, radio and
telegraph operators, who having access to confidential information, may become the source of undue
advantage. Said employee(s) may act as a spy or spies of either party to a collective bargaining
agreement. This is specially true in the present case where the petitioning Union is already the
bargaining agent of the rank-and-file employees in the establishment. To allow the confidential
employees to join the existing Union of the rank-and-file would be in violation of the terms of the
Collective Bargaining Agreement wherein this kind of employees by the nature of their
functions/positions are expressly excluded.

xxx xxx xxx.

Similarly, in National Association of Trade Union - Republic Planters Bank Supervisors Chapter v.
Torres[22] we declared:

xxx xxx xxx.

. . . As regards the other claim of respondent Bank that Branch Managers/OICs, Cashiers and Controllers
are confidential employees, having control, custody and/ or access to confidential matters, e.g., the
branchs cash position, statements of financial condition, vault combination, cash codes for telegraphic
transfers, demand drafts and other negotiable instruments, pursuant to Sec. 1166.4 of the Central Bank
Manual regarding joint custody, this claim is not even disputed by petitioner. A confidential employee is
one entrusted with confidence on delicate matters, or with the custody, handling, or care and
protection of the employers property. While Art. 245 of the Labor Code singles out managerial
employees as ineligible to join, assist or form any labor organization, under the doctrine of necessary,
implication, confidential employees are similarly disqualified. . . .

xxx xxx xxx.

. . .(I)n the collective bargaining process, managerial employees are supposed to be on the side of the
employer, to act as its representatives, and to see to it that its interest are well protected. The employer
is not assured of such protection if these employees themselves are union members. Collective
bargaining in such a situation can become one-sided. It is the same reason that impelled this Court to
consider the position of confidential employees as included in the disqualification found in Art. 245 as if
the disqualification of confidential employees were written in the provision. If confidential employees
could unionize in order to bargain for advantages for themselves, then they could be governed by their
own motives rather than the interest of the employers. Moreover, unionization of confidential
employees for the purpose of collective bargaining would mean the extension of the law to persons or
individuals who are supposed to act in the interest of the employers. It is not farfetched that in the
course of collective bargaining, they might jeopardize that interest which they are duty-bound to
protect. . . .

xxx xxx xxx.

And in the latest case of Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confesor,[23] we ruled
that:

xxx xxx xxx.

Upon the other hand, legal secretaries are neither managers nor supervisors. Their work is basically
routinary and clerical. However, they should be differentiated from rank-and-file employees because
they are tasked with, among others, the typing of legal documents, memoranda and correspondence,
the keeping of records and files, the giving of and receiving notices, and such other duties as required by
the legal personnel of the corporation. Legal secretaries therefore fall under the category of confidential
employees. . . .

xxx xxx xxx.

We thus hold that public respondent acted with grave abuse of discretion in not excluding the four
foremen and legal secretary from the bargaining unit composed of rank-and-file employees.

xxx xxx xxx.

In the case at bench, the Union does not disagree with petitioner that the executive secretaries are
confidential employees. It however, makes the following contentions:

xxx xxx xxx.

There would be no danger of company domination of the Union since the confidential employees would
not be members of and would not participate in the decision making processes of the Union.

Neither would there be a danger of espionage since the confidential employees would not have any
conflict of interest, not being members of the Union. In any case, there is always the danger that any
employee would leak management secrets to the Union out of sympathy for his fellow rank and filer
even if he were not a member of the union nor the bargaining unit.

Confidential employees are rank and file employees and they, like all the other rank and file employees,
should be granted the benefits of the Collective Bargaining Agreement. There is no valid basis for
discriminating against them. The mandate of the Constitution and the Labor Code, primarily of
protection to Labor, compels such conclusion.[24]

xxx xxx xxx.

The Unions assurances fail to convince. The dangers sought to be prevented, particularly the threat of
conflict of interest and espionage, are not eliminated by non-membership of Metrolabs executive
secretaries or confidential employees in the Union. Forming part of the bargaining unit, the executive
secretaries stand to benefit from any agreement executed between the Union and Metrolab. Such a
scenario, thus, gives rise to a potential conflict between personal interests and their duty as confidential
employees to act for and in behalf of Metrolab. They do not have to be union members to affect or
influence either side.

Finally, confidential employees cannot be classified as rank and file. As previously discussed, the nature
of employment of confidential employees is quite distinct from the rank and file, thus, warranting a
separate category. Excluding confidential employees from the rank and file bargaining unit, therefore, is
not tantamount to discrimination.

WHEREFORE, premises considered, the petition is partially GRANTED. The resolutions of public
respondent Secretary of Labor dated 14 April 1992 and 25 January 1993 are hereby MODIFIED to the
extent that executive secretaries of petitioner Metrolabs General Manager and the executive secretaries
of the members of its Management Committee are excluded from the bargaining unit of petitioners rank
and file employees.

SO ORDERED.
San Miguel Corp. Supervisors and Exempt Union v. Laguesma

G.R. No. 110399 | August 15, 1997

Petitioners: San Miguel Corporation Supervisors And Exempt Union & Ernesto L. Ponce (President)

Respondent: Hon. Bienvenido E. Laguesma (DOLE Undersecretary), Hon. Danilo L. Reynante (Med-
Arbiter) & San Miguel Corporation

Ponente: J. Romero

Summary: SMC Supervisors and Exempt Union filed before DOLE a Petition for Certification Election
among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao,
San Fernando and Otis. Med-Arbiter Reynante then ordered their conduct of certification as one
bargaining unit. But San Miguel appealed with DOLE contending that (1) the 3 separate plants should
not be grouped into one bargaining unit, and (2) supervisory levels 3 and 4 (S3 & S4) should be excluded
because these positions are confidential in nature. After 2 Motion for Reconsiderations, Undersecretary
Laguesma applied Philips Industrial Development, Inc. v. NLRC which declared confidential employees
ineligible from forming or joining a labor union. He ordered S3, S4 and the so-called exempt employees
to be excluded from those participating in the certification election, and directed the conduct of
separate certification elections in each of the 3 plants.

The SC held that S3, S4 and the exempt employees do not fall within the term “confidential employees”
who may be prohibited from joining a union. To be a confidential employee, 2 criteria must be met: he
(1) assists or acts in a confidential capacity, (2) to persons who formulate, determine, and effectuate
management policies in the field of labor relations. In other words, he must have necessary access to
confidential information with respect to his employer’s labor relations policies. In the case at bar, S3, S4
and the exempt employees handle confidential information which relate to product formulation,
product standards and product specification which concerns the employer’s internal business operations
and not to the field of labor relations. Moreover, SC held that the employees of the 3 plants constitute
an appropriate single bargaining unit for they have community or mutuality of interest, performing work
of the same nature and receiving the same wages and compensation although belonging to 3 different
plants of the Magnolia Poultry Division of San Miguel.

FACTS:
• San Miguel Corporation Supervisors and Exempt Union (SMC Union) filed before DOLE a Petition
for Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry
Products Plants of Cabuyao (Laguna), San Fernando (Pampanga) and Otis (Pandacan, Manila).

o Med-Arbiter Reynante issued an Order ordering their conduct of certification as one bargaining
unit.

• Appeal: San Miguel Corp. then filed with the DOLE a Notice of Appeal pointing out Med-Arbiter’s
error in grouping together all 3 separate plants into one bargaining unit, and in including supervisory
levels 3 and 4 whose positions are confidential in nature.

o Undersecretary Laguesma: granted. Ordered the remand of the case to the Med-Arbiter for
determination of the true classification of each of the employees sought to be included in the
appropriate bargaining unit.

• 1st MR: SMC Union filed a MR.

o Undersecretary Laguesma: granted. Directed the conduct of separate certification elections

among the supervisors ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each
of the 3 plants.

• 2nd MR: San Miguel Corp. filed a MR.

o Undersecretary Laguesma: granted.

o Applied Philips Industrial Development, Inc. v. NLRC Confidential employees, like managerial
employees, are not allowed to form, join or assist a labor union for purposes of collective bargaining.

o Applying in the case at bar, S3 and S4 and the so-called exempt employees are admittedly
confidential employees and therefore they are not allowed to form, join or assist a labor union for
purposes of collective bargaining. Thus, S3, S4 and the so-called exempt employees are excluded from
those who could participate in the certification election.

• Hence this petition.

ISSUE 1: WON S3, S4 and the exempt employees of the company are considered confidential employees,
hence ineligible from joining a union. – NO. [MAIN]

RATIO:

• S3, S4 and the exempt employees are NOT vested with the powers and prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, layoff, recall, discharge or dismiss
employees.
o They are therefore not qualified to be classified as managerial employees who under Art. 245 of
the Labor Code, are not eligible to join, assist or form any labor organization.

o Under the same Article, they are not allowed membership in a labor organization of the rank-
and-file employees BUT may join, assist or form separate labor organizations of their own.

• The only question is whether they are confidential employees or not.

• Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons
who formulate, determine, and effectuate management policies in the field of labor relations.

o The 2 criteria are cumulative, and both must be met. The confidential relationship must exist
between the employees and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations.

o Thus, to determine WON a confidential employee, the question is: WON he has necessary
access to confidential information with respect to his employer’s relations policies. Access to
information which is regarded by the employer to be confidential from the business standpoint such as
financial information or technical trade secrets will not render an employee a confidential employee.

• Rationale for exclusion from bargaining unit: These employees become aware of management
policies relating to labor relations in the normal course of their duties. Therefore, they should not be
placed in a position involving a potential conflict of interests.

o If these managerial employees would belong to or be affiliated with a Union, the latter might
not be assured of their loyalty to the Union in view of evident conflict of interest. The Union can also
become company-dominated with the presence of managerial employees in Union membership.

• In the case at bar, S3, S4 and the exempt employees handle confidential data or documents
which relate to product formulation, product standards and product specification (e.g. decision to
discontinue/temporarily stop shift operations oversee the quality control function at the processing
lines in the storage of chicken, maintenance of sanitation and hygiene throughout the plant) which by
no means relate to “labor relations”.

o The information they handle are properly classifiable as technical and internal business
operations data which has no relevance to negotiations and settlement of grievances wherein the
interests of a union and the management are invariably adversarial. Thus, they are not confidential
employees and may appropriately form a bargaining unit for purposes of collective bargaining.

SUB-ISSUE: If they are not confidential employees, do the employees of the 3 plants constitute an
appropriate single bargaining unit. – YES.

RATIO:
• The employees in the instant case have “community or mutuality of interest”. which is the
standard in determining the proper constituency of a collective bargaining unit.

o They all belong to the Magnolia Poultry Division of San Miguel Corporation. Although they
belong to 3 different plants, they perform work of the same nature, receive the same wages and
compensation, and most importantly, share a common stake in concerted activities. The fact that the 3
plants are located in 3 different places is immaterial.

• Moreover, separate bargaining units in the 3 different plants of the division will fragmentize the
employees of the said division, thus greatly diminishing their bargaining leverage. This will clearly
frustrate the provisions of the Labor Code and the mandate of the Constitution.

DECISION: WHEREFORE, the the assailed Order or Undersecretary Laguesma is hereby SET ASIDE and the
Order of the Med-Arbiter is REINSTATED under which a certification election among the supervisors
(level 1 to 4) and exempt employees of the San Miguel Corporation Magnolia Poultry Products Plants of
Cabuyao, San Fernando, and Otis as one bargaining unit is ordered conducted.
G.R. No. 121084 February 19, 1997

TOYOTA MOTOR PHILIPPINES CORPORATION , petitioner,

vs.

TOYOTA MOTOR PHILIPPINES CORPORATION LABOR UNION AND THE SECRETARY OF LABOR AND
EMPLOYMENT, respondents.

KAPUNAN, J.:

On November 26, 1992, the Toyota Motor Philippines Corporation Labor Union (TMPCLU) filed a
petition for certification election with the Department of Labor, National Capital Region, for all rank-
and-file employees of the Toyota Motor Corporation.1

In response, petitioner filed a Position Paper on February 23, 1993 seeking the denial of the issuance of
an Order directing the holding of a certification election on two grounds: first, that the respondent
union, being "in the process of registration" had no legal personality to file the same as it was not a
legitimate labor organization as of the date of the filing of the petition; and second, that the union was
composed of both rank-and-file and supervisory employees in violation of law.2 Attached to the position
paper was a list of union members and their respective job classifications, indicating that many of the
signatories to the petition for certification election occupied supervisory positions and were not in fact
rank-and-file employees.3

The Med-Arbiter, Paterno D. Adap, dismissed respondent union's petition for certification election for
lack of merit. In his March 8, 1993 Order, the Med-Arbiter found that the labor organization's
membership was composed of supervisory and rank-and-file employees in violation of Article 245 of the
Labor Code,4 and that at the time of the filing of its petition, respondent union had not even acquired
legal personality yet.5

On appeal, the Office of the Secretary of Labor, in a Resolution6 dated November 9, 1993 signed by
Undersecretary Bienvenido E. Laguesma, set aside the Med-Arbiter's Order of March 3, 1993, and
directed the holding of a certification election among the regular rank.-and-file employees of Toyota
Motor Corporation. In setting aside the questioned Order, the Office of the Secretary contended that:

Contrary to the allegation of herein respondent-appellee, petitioner-appellant was already a legitimate

labor organization at the time of the filing of the petition on 26 November 1992. Records show that on
24 November 1992 or two (2) days before the filing of the said petition, it was issued a certificate of
registration.

We also agree with petitioner-appellant that the Med-Arbiter should have not dismissed the petition for
certification election based on the ground that the proposed bargaining unit is a mixture of supervisory
and rank-and-file employees, hence, violative of Article 245 of the Labor Code as amended.

A perusal of the petition and the other documents submitted by petitioner-appellant will readily show
that what the former really seeks to represent are the regular rank-and-file employees in the company
numbering about 1,800 more or less, a unit which is obviously appropriate for bargaining purposes. This
being the case, the mere allegation of respondent-appellee that there are about 42 supervisoy
employees in the proposed bargaining unit should have not caused the dismissal of the instant petition.
Said issue could very well be taken cared of during the pre-election conference where
inclusion/exclusion proceedings will be conducted to determine the list of eligible voters.7

Not satisfied with the decision of the Office of the Secretary of Labor, petitioner filed a Motion for
Reconsideration of the Resolution of March 3, 1993, reiterating its claim that as of the date of filing of
petition for certification election, respondent TMPCLU had not yet acquired the status of a legitimate
labor organization as required by the Labor Code, and that the proposed bargaining unit was
inappropriate.

Acting on petitioner's motion for reconsideration, the public respondent, on July 13, 1994 set aside its
earlier resolution and remanded the case to the Med-Arbiter concluding that the issues raised by
petitioner both on appeal and in its motion for reconsideration were factual issues requiring further
hearing and production of evidence.8 The Order stated

We carefully re-examined the records vis-a-vis the arguments raised by the movant, and we note that
movant correctly pointed out that petitioner submitted a copy of its certificate of registration for the
first time on appeal and that in its petition, petitioner alleges that it is an independent organization
which is in the process of registration." Movant strongly argues that the foregoing only confirms what it
has been pointing out all along, that at the time the petition was filed petitioner is (sic) not yet the
holder of a registration certificate; that what was actually issued on 24 November 1992 or two (2) days
before the filing of the petition was an official receipt of payment for the application fee; and, that the
date appearing in the Registration certificate which is November 24, 1992 is not the date when
petitioner was actually registered, but the date when the registration certificate was prepared by the
processor. Movant also ratiocinates that if indeed petitioner has been in possession of the registration
certificate at the time this petition was filed on November 26, 1992, it would have attached the same to
the petition.

The foregoing issues are factual ones, the resolution of which is crucial to the petition. For if indeed it is
true that at the time of filing of the petition, the said registration certificate has not been approved yet,
then, petitioner lacks the legal personality to file the petition and the dismissal order is proper. Sadly,
we can not resolve the said questions by merely perusing the records. Further hearing and introduction
of evidence are required. Thus, there is a need to remand the case to the Med-Arbiter solely for the
purpose.

WHEREFORE, the motion is hereby granted and our Resolution is hereby set aside. Let the case be
remanded to the Med-Arbiter for the purpose aforestated.

SO ORDERED.9

Pursuant to the Order, quoted above, Med-Arbiter Brigida C. Fodrigon submitted her findings on
September 28, 1994, stating the following: 10

[T]he controvertible fact is that petitioner could not have been issued its Certificate of Registration on
November 24, 1992 when it applied for registration only on November 23, 1992 as shown by the official
receipt of payment of filing fee. As Enrique Nalus, Chief LEG, this office, would attest in his letter dated
September 8, 1994 addressed to Mr. Porfirio T. Reyes, Industrial Relations Officer of respondent
company, in response to a query posed by the latter, "It is unlikely that an application for registration is
approved on the date that it is filed or the day thereafter as the processing course has to pass thought
routing, screening, and assignment, evaluation, review and initialing, and approval/disapproval
procedure, among others, so that a 30-day period is provided for under the Labor Code for this purpose,
let alone opposition thereto by interested parties which must be also given due course.
Another evidence which petitioner presented. . . is the "Union Registration 1992 Logbook of IRD". . . and
the entry date November 25, 1992 as allegedly the date of the release of the registration certificate. . .
On the other hand, respondent company presented . . . a certified true copy of an entry on page 265 of
the Union Registration Logbook showing the pertinent facts about petitioner but which do not show the
petitioner's registration was issued on or before November 26, 1992. 11

Further citing other pieces of evidence presented before her, the Med-Arbiter concluded that
respondent TMPCLU could not have "acquire[d] legal personality at the time of the filing of (its)
petition." 12

On April 20, 1996, the public respondent issued a new Resolution, "directing the conduct of a
certification election among the regular rank-and-file employees of the Toyota Motor Philippines
Corporation. 13 Petitioner's motion for reconsideration was denied by public respondent in his Order
dated July 14, 1995.14

Hence, this special civil action for certiorari under Rule 65 of the Revised Rules of Court, where
petitioner contends that "the Secretary of Labor and Employment committed grave abuse of discretion
amounting to lack or excess of jurisdiction in reversing, contrary to law and facts the findings of the
Med-Arbiters to the effect that: 1) the inclusion of the prohibited mix of rank-and file and supervisory
employees in the roster of members and officers of the union cannot be cured by a simple inclusion-
exclusion proceeding; and that 2) the respondent union had no legal standing at the time of the filing of
its petition for certification election. 15

We grant the petition.

The purpose of every certification election is to determine the exclusive representative of employees in
an appropriate bargaining unit for the purpose of collective bargaining. A certification election for the
collective bargaining process is one of the fairest and most effective ways of determining which labor
organization can truly represent the working force. 16 In determining the labor organization which
represents the interests of the workforce, those interests must be, as far as reasonably possible,
homogeneous, so as to genuinely reach the concerns of the individual members of a labor organization.
According to Rothenberg, 17 an appropriate bargaining unit is a group of employees of a given
employer, composed of all or less than the entire body of employees, which the collective interests of all
the employees, consistent with equity to the employer indicate to be best suited to serve reciprocal
rights and duties of the parties under the collective bargaining provisions of law. In Belyca Corporation v.
Ferrer Calleja, 18 we defined the bargaining unit as "the legal collectivity for collective bargaining
purposes whose members have substantially mutual bargaining interests in terms and conditions of
employment as will assure to all employees their collective bargaining rights." This in mind, the Labor
Code has made it a clear statutory policy to prevent supervisory employees from joining labor
organizations consisting of rank-and-file employees as the concerns which involve members of either
group are normally disparate and contradictory. Article 245 provides:

Art. 245Ineligibility of managerial employees to join any labor organization; right of supervisory
employees. — Managerial Employees are not eligible to join, assist or form any labor organization.
Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their own.

Clearly, based on this provision, a labor organization composed of both rank-and-file and supervisory
employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor
organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory
employees cannot possess any of the rights of a legitimate labor organization, including the right to file a
petition for certification election for the purpose of collective bargaining. It becomes necessary,
therefore, anterior to the granting of an order allowing a certification election, to inquire into the
composition of any labor organization whenever the status of the labor organization is challenged on
the basis of Article 245 of the Labor Code.

It is the petitioner's contention that forty-two (42) of the respondent union's members, including three
of its officers, occupy supervisory positions 19 In its position paper dated February 22, 1993, petitioner
identified fourteen (14) union members occupying the position of Junior Group Chief 11 20 and twenty-
seven (27) members in level five positions. Their respective job-descriptions are quoted below:

LEVEL 4 (JUNIOR GROUP CHIEF II) — He is responsible for all operators and assigned stations, prepares
production reports related to daily production output. He oversees smooth flow of production, quality
of production, availability of manpower, parts and equipments. He also coordinates with other sections
in the Production Department.
LEVEL 5 — He is responsible for overseeing initial production of new models, prepares and monitors
construction schedules for new models, identifies manpower requirements for production, facilities and
equipment, and lay-out processes. He also oversees other sections in the production process (e.g.
assembly, welding, painting)." (Annex "V" of Respondent TMP's Position Paper; which is the Job
Description for an Engineer holding Level 5 position in the Production Engineering Section of the
Production Planning and Control Department).

While there may be a genuine divergence of opinion as to whether or not union members occupying
Level 4 positions are supervisory employees, it is fairly obvious, from a reading of the Labor Code's
definition of the term that those occupying Level 5 positions are unquestionably supervisory employees.
Supervisory employees, as defined above, are those who, in the interest of the employer, effectively
recommend managerial actions if the exercise of such authority is not merely routinary or clerical in
nature but require the use of independent judgment. 21 Under the job description for level five
employees, such personnel — all engineers — having a number of personnel under them, not only
oversee production of new models but also determine manpower requirements, thereby influencing
important hiring decisions at the highest levels. This determination is neither routine nor clerical but
involves the independent assessment of factors affecting production, which in turn affect decisions to
hire or transfer workers. The use of independent judgment in making the decision to hire, fire or
transfer in the identification of manpower requirements would be greatly impaired if the employee's
loyalties are torn between the interests of the union and the interests of management. A supervisory
employee occupying a level five position would therefore find it difficult to objectively identify the exact
manpower requirements dictated by production demands.

This is precisely what the Labor Code, in requiring separate unions among rank-and-file employees on
one hand, and supervisory employees on the other, seeks to avoid. The rationale behind the Code's
exclusion of supervisors from unions of rank-and-file employees is that such employees, while in the
performance of supervisory functions, become the alter ego of management in the making and the
implementing of key decisions at the sub-managerial level. Certainly, it would be difficult to find unity or
mutuality of interests in a bargaining unit consisting of a mixture of rank-and-file and supervisory
employees. And this is so because the fundamental test of a bargaining unit's acceptability is whether or
not such a unit will best advance to all employees within the unit the proper exercise of their collective
bargaining rights. 22 The Code itself has recognized this, in preventing supervisory employees from
joining unions of rank-and-file employees.

In the case at bar, as respondent union's membership list contains the names of at least twenty-seven
(27) supervisory employees in Level Five positions. the union could not, prior to purging itself of its
supervisory employee members, attain the status of a legitimate labor organization. Not being one, it
cannot possess the requisite personality to file a petition for certification election.
The foregoing discussion, therefore, renders entirely irrelevant, the technical issue raised as to whether
or not respondent union was in possession of the status of a legitimate labor organization at the time of
filing, when, as petitioner vigorously claims, the former was still at the stage of processing of its
application for recognition as a legitimate labor organization. The union's composition being in violation
of the Labor Code's Prohibition of unions composed of supervisory and rank-and-file employees, it could
not possess the requisite personality to file for recognition as a legitimate labor organization. In any
case, the factual issue, albeit ignored by the public respondent's assailed Resolution, was adequately
threshed out in the Med-Arbiter's September 28, 1994 Order

The holding of a certification election is based on clear statutory policy which cannot be circumvented.
23 Its rules, strictly construed by this Court, are designed to eliminate fraud and manipulation. As we
emphasized in Progressive Development Corporation v. Secretary, Department of Labor and
Employment, 24 the Court's conclusion should not be interpreted as impairing any union's right to be
certified as the employees' bargaining agent in the petitioner's establishment. Workers of an
appropriate bargaining unit must be allowed to freely express their choice in an election where
everything is open to sound judgment and the possibility for fraud and misrepresentation is absent. 25

WHEREFORE, the petition is GRANTED. The assailed Resolution dated April 20, 1995 and Order dated
July 14, 1995 of respondent Secretary of Labor are hereby SET ASIDE. The Order dated September 28,
1994 of the Med-Arbiter is REINSTATED.

SO ORDERED.
SAMAHAN NG MGA MANGGAGAWA SA BANDOLINO-LMLC vs NLRC

G.R. No. 125195, 17 July 1997

Facts:

• Petitioners are former employees of private respondent Bandolino Shoe Corporation and
members of petitioner union, Samahan ng Manggagawa sa Bandolino-LMLC. Private respondents
German Alcantara, Aida Alcantara, and Mimi Alcantara are the owners and officers of Bandolino Shoe
Corporation.

• Petitioners Marcial Franco, Johnny Florencio, and Romeo Reyes were directed to take a two-
week leave because of a strike at the Shoemart, Bandolino's biggest customer.

• Apparently, the strike adversely affected private respondents' business. Petitioners were told by
management that, should the circumstances improve, they would be recalled to work after two weeks.

• Petitioner Marcial Franco and his wife were called to the personnel manager's office and told
that Ligaya Franco had been dismissed.

• Marcial Franco pleaded with German Alcantara not to terminate his wife from employment, but
his entreaties were rejected, allegedly because of his refusal to divulge the names of the organizers and
members of the petitioner union. Three other relatives, namely Emma Brozo, Adoracion Brozo, and
Aurea Bonon, were subsequently dismissed.

• The other petitioners were likewise informed by the personnel manager of the termination of
their employment and asked to turn in their identification cards.

• The petitioners tried to return to work after two weeks on but they were refused entry into the
company premises. The management refused to allow them to return to work allegedly to prevent any
untoward incident between the petitioner union and the Bandolino Shoes Independent Labor Union.
• Petitioners filed a notice of strike. A conciliation conference was held but it was unsuccessful.
Although petitioners did not strike, they stage a picket for one hour each on two successive Saturdays to
protest their dismissal. Petitioners filed a complaint for illegal dismissal, unfair labor practice,
underpayment, overtime pay, and holiday pay.

• At the initial conference, the labor arbiter issued a return to work order to the private
respondents based on the private respondents' claim that they had not dismissed petitioners. But
petitioners were not allowed to work by private respondents.

• The Labor Arbiter decided the case in favor of petitioners. He found that petitioners had been
illegally dismissed because of their union activities and that private respondents had committed unfair
labor practice. Although private respondents claimed to have merely placed petitioners on "rotation"
because of the Shoermart strike, the labor arbiter found that even after the end of the strike, petitioners
were still not allowed to return to work. Referring to private respondents' position paper, the labor
arbiter found that private respondents had imposed illegal conditions on petitioners reinstatement by
requiring them to forego their intended strike, withdraw their petition for certification election, and
instead recognize the existing union. On the basis and noting that during the hearings private
respondents' counsel subjected the petitioners to a barrage of questioning regarding their union
activities, the labor arbiter concluded that private respondents were guilty of unfair labor practice for
having restrained the petitioners' exercise of the right to self-organization

Issue:

Whether or not there was an unfair labor practice. YES!

Held:

• Even disregarding evidence of the illegal conditions imposed by private respondents for
petitioners' return to work, there was substantial evidence remaining in the record to sustain the labor
arbiter's decision that private respondents were guilty of ULP. There was evidence to the effect that
Marcial Franco had been asked to disclose the names of the members of the union and that the
management had shown interest in the unionizing activities of the petitioners. This evidence has
remained unchallenged. What is more, it appears that only alleged members of the petitioner union
were put on "rotation". The labor arbiter's observation during the hearing that the private respondents
had shown hostility towards petitioners for their union activities is a determination of fact which is
based on the totality of private respondents' conduct, indicating anti-union bias. Nor is it disputed that
private respondents opposed petitioners' petition for certification election when this matter should be
the sole concern of the workers. Private respondents' interest belies their claim that they were not
aware of petitioners' organizational and union activities prior to the union's registration. An employer
may be guilty of ULP in interfering with the right to self-organization even before the union has been
registered.

• We therefore proceed to petitioners' prayer for monetary awards. Petitioners do not dispute
the NLRC's finding that, except for Jaime Sibug, the rest of petitioners are piece-rate workers.
Consequently, all petitioners are entitled to minimum wage and 13th-month pay, but only Jaime Sibug is
entitled to an additional award of holiday pay. All of the petitioners are entitled to salary differentials, as
found by the labor arbiter, and to 13th-month pay, as ruled by the NLRC. Pursuant to Art. 279 of the
Labor Code, as amended by Republic Act No. 6715, and our ruling in Bustamante v. National Labor
Relations Commission, the petitioners are entitled to full backwages from the time their compensation
was withheld up to the time of their actual reinstatement or, where reinstatement is no longer possible,
to full backwages up to the time of finality of this decision.
Case Digest: COLEGIO DE SAN JUAN DE LETRAN vs. ASSOCIATION OF EMPLOYEES AND FACULTIES OF
LETRAN and ELEONOR AMBAS

G.R. No. 141471. September 18, 2000

Facts:

During the renegotiation of the respondent unions Collective Bargaining Agreement with the petitioner,
Eleonor Ambas emerged as the newly elected President of the union. Ambas wanted to continue the
renegotiation of the CBA but petitioner, through Fr. Edwin Lao, claimed that the CBA was already
prepared for signing by the parties. However, the union members rejected the said CBA. Thereafter,
petitioner accused the union officers of bargaining in bad faith before the NLRC. The Labor Arbiter
decided in favor of the petitioner. This decision was reversed on appeal with the NLRC.

The parties later agreed to disregard the unsigned CBA and to start negotiation on new five-year CBA.
During the pendency of approval of proposals, Ambas was informed that her work schedule was being
changed. Ambas protested and requested management to submit the issue to a grievance machinery
under the old CBA.

After the petitioner’s inaction on the CBA, the union filed a notice to strike. After meeting with the
NCMB to discuss the ground rules for renegotiation, Ambas received a letter dismissing her for alleged
insubordination. The petitioner then ceased negotiations when it received news that another labor
organization had filed a petition for certification.

The union finally struck, but the Secretary of Labor and Employment ordered them to return to work
and for petitioner to accept them back. The Secretary of Labor and Employment later rendered
judgement that the petitioner had been guilty of unfair labor practice. The Court of Appeals affirmed the
findings of the former.

Issue(s):

1. Whether petitioner is guilty of unfair labor practice by refusing to bargain with the union when
it unilaterally suspended the ongoing negotiations for a new CBA; and
2. Whether the termination of the union president amounts to an interference of the employees’
right to self-organization.

Held:

The Supreme Court found the petition unmeritorious.

1. The petitioner’s failure to act upon the submitted CBA proposal within the ten-day period
exemplified in Article 250 of the Labor Code is a clear violation of the governing procedure of collective
bargaining. As the Court has held in Kiok Loy vs. NLRC, the company’s refusal to make counter-proposal
to the union’s proposed CBA is an indication of bad faith. Moreover, the succeeding events are obvious
signs that the petitioner had merely been employing delaying tactics to the passage of the proposed
CBA. Moreover, in order to allow the employer to validly suspend the bargaining process, there must be
a valid petition for certification election raising a legitimate representation issue. Hence, the mere filing
of a petition for certification election does not ipso facto justify the suspension of negotiation by the
employer.

2. The factual backdrop of the termination of Ambas led the Court to no other conclusion that she
was dismissed in order to strip the union of a leader who would fight for the right of her co-workers in
the bargaining table. While the Court recognizes the right of the employer to terminate the services of
an employee for a just or authorized cause, nevertheless, the dismissal of employees must be made
within the parameters of aw and pursuant to the tenets of equity and fair play. Even assuming
arguendo that Ambas was guilty of insubordination, such disobedience was not a valid ground to
terminate her employment. When the exercise of the management to discipline its employees tends to
interfere with the employees’ right to self-organization, it amounts to union-busting and is therefore a
prohibited act.