excess of jurisdiction BENECO filed the instant petition for
Benguet Electric Cooperative v. Ferrer-Calleja 180 SCRA
740
Facts:
Beneco Worker's Labor Union (BWLU) 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).
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.
BENECO, on the other hand, filed a motion to dismiss the
petition claiming that the employees sought to be represented
by BWLU 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
petitioner who are non- members thereof and without any
involvement in the actual ownership of the cooperative.
After the ordered certification election was held, BENECO filed
a Protest on the same grounds it stated on its motion to
dismiss. The med-arbiter dismissed the protest after finding,
among others, that the issue as to whether or not member-
consumers who are employees of BENECO could form, assist
or join a labor union has already been answered in the
affirmative by the Supreme Court in one case. This was later
on affirmed by the BLR. Alleging that the BLR director
committed grave abuse of discretion amounting to lack or
certiorari.
Issue:
Whether or not respondent director committed grave abuse of
discretion in certifying respondent BELU as the sole and
exclusive bargaining representative of the rank and file
employees of BENECO?
Petitioner’s arguments:
Under Article 256 of the Labor Code to have a valid
certification election, "at least a majority of all eligible voters in
the unit must have cast their votes. 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 was null and
void since members-employees of petitioner cooperative who
are not eligible to form and join a labor union for purposes of
collective bargaining were allowed to vote therein.
Respondent’s arguments:
Respondent director and private respondent BELU on the
other hand submit that members of a cooperative who are
also rank and file employees are eligible to form, assist or join
a labor union.
Ruling:
The issue of whether or not employees of a cooperative are
qualified to form or join a labor organization for purposes of
collective bargaining 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 subsequent cases
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
1987 Constitution and applicable statutes.
Moreover, the fact that the members-employees of petitioner
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.
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 . . .
[Italics supplied.]
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.
REPUBLIC v. ASIAPRO COOPERATIVE
FACTS.
Asiapro, as a cooperative, is composed of owners-members.
Its primary objectives are to provide savings and credit
facilities and to develop other livelihood services for its
owners-members. In the discharge of the aforesaid primary
objectives, respondent cooperative entered into several
Service Contracts with Stanfilco. The owners-members do not
receive compensation or wages from the respondent
cooperative. Instead, they receive a share in the service
surplus which Asiapro earns from different areas of trade it
engages in, such as the income derived from the said Service
Contracts with Stanfilco.
In order to enjoy the benefits under the Social Security Law of
1997, the owners-members of Asiapro in Stanfilco requested
the services of the latter to register them with SSS as self-
employed and to remit their contributions as such. Petitioner
SSS sent a letter to respondent cooperative informing the
latter that based on the Service Contracts it executed with
Stanfilco, Asiapro is actually a manpower contractor supplying
employees to Stanfilco and so, it is an employer of its owners-
members working with Stanfilco. Thus, Asiapro should register
itself with petitioner SSS as an employer and make the
corresponding report and remittance of premium contributions.
Despite letters received, respondent cooperative continuously
ignored the demand of petitioner SSS. Respondent
cooperative alleges that its owners-members own the
cooperative, thus, no employer-employee relationship can
arise between them.
ISSUE. WON an employer-employee relationship exists
between Stanfilco and its owner-members.
HELD.
YES. an owner-member of a cooperative can be an employee
of the latter and an employer-employee relationship can exist
between them. a cooperative acquires juridical personality
upon its registration with the Cooperative Development
Authority. It has its Board of Directors, which directs and
supervises its business; meaning, its Board of Directors is the
one in charge in the conduct and management of its affairs.
With that, a cooperative can be likened to a corporation with a
personality separate and distinct from its owners-members.
It is true that the Service Contracts executed between the
respondent cooperative and Stanfilco expressly provide that
there shall be no employer-employee relationship between the
respondent cooperative and its owners-members. However,
the existence of an employer-employee relationship
cannot be negated by expressly repudiating it in a
contract, when the terms and surrounding circumstances
show otherwise. The employment status of a person is
defined and prescribed by law and not by what the parties
say it should be.
It is settled that the contracting parties may establish such
stipulations, clauses, terms and conditions as they want, and
their agreement would have the force of law between them.
However, the agreed terms and conditions must not be
contrary to law, morals, customs, public policy or public
order. The Service Contract provision in question must be
struck down for being contrary to law and public policy since it
is apparently being used by the respondent cooperative
merely to circumvent the compulsory coverage of its
employees, who are also its owners-members, by the Social
Security Law.
The four elements in determining the existence of an
employer-employee relationship are all present in this
case.
First. It is expressly provided in the Service Contracts that it is
the respondent cooperative which has the exclusive discretion
in the selection and engagement of the owners-members as
well as its team leaders who will be assigned at Stanfilco.
Second. the weekly stipends or the so-called shares in the
service surplus given by the respondent cooperative to its
owners-members were in reality wages, as the same were
equivalent to an amount not lower than that prescribed by
existing labor laws, rules and regulations, including the wage
order applicable to the area and industry, they are also given
to the owners-members as compensation in rendering
services to respondent cooperative’s client, Stanfilco.
Third. it is the respondent cooperative which has the power to
investigate, discipline and remove the owners-members and
its team leaders who were rendering services at Stanfilco.
Fourth and most importantly, it is the respondent cooperative
which has the sole control over the manner and means of
performing the services under the Service Contracts with
Stanfilco as well as the means and methods of work. All these
clearly prove that, indeed, there is an employer-employee
relationship between the respondent cooperative and its
owners-members.
Sim vs. NLRC, 534 SCRA 515 [2007]
Golden Farms vs. Sec. of Labor, 234 SCRA 517
Sugbuanon Rural Bank vs. NLRC, 324 SCRA 425 [2000]
FACTS: Sugbuanon Rural Bank employed some 5
supervisory employees. APSOLTEU-TUCP,
a legitimate labor organization, then filed a petition for
certification election of the said supervisory employees. The
bank opposed the petition on the ground that the supervisory
employees were actually managerial/confidential employees.
In addition, the union was represented in the petition by ALU-
TUCP, and since according to the Bank the latter also sought
to represent the rank and file members, granting the petition
would violate the principle of separation of unions.
ISSUE: Should the petition for certification election be granted,
or denied?
HELD: It should be granted. For one, the supervisory
employees cannot be considered managerial or confidential
employees. While the nature of the employees’ work
(evaluating borrowers’ capacity to pay, approving loans,
scheduling terms of repayment of the latter, and
endorsing delinquent accounts to legal counsel for collection)
indeed constituted the core of the bank’s business , their
functions did not fall within the definition of either a managerial
employee (lay down and execute management policies related
to labor relations) or a confidential employee (they did not act
in a confidential capacity to persons who formulate and
execute management policies related to labor relations).
Secondly, granting the petition would not be violative of the
separation of union doctrine. The petition for certification
election was filed by APSOTEU-TUCP,
a legitimate labor organization. True, it was assisted to some
extent by ALU and the national federation TUCP. However,
APSOTEU-TUCP had separate legal personality from ALU
and TUCP, under the principle that a local union maintains its
separate legal personality despite affiliation with a national
federation.
De la Salle Univ. vs. DLSU-Employees Assn., 330 SCRA
363 [2000]
Doctrine: The express exclusion of computer operators and
discipline officers from the bargaining unit of rank-and-file
employees in the 1986 CBA does not bar any renegotiation for
the future inclusion of said employees. During the freedom
period, parties may not only renew the existing CBA but may
also propose and discuss modifications or amendments
thereto.
Note: Only 1st and 2nd issues are pertinent to our current
topic, but I included the other issues in case Atty. Javier asks.
Facts:
1. DLSU and the DLSU Employees Association (Union), which
is composed of regular non-academic rank-and-file employees,
entered into a Collective Bargaining Agreement with a life
span of 3 years (from Dec. 23, 1986 to Dec. 22, 1989).
2. During the freedom period (i.e., 60 days before the
expiration of the CBA), negotiations with the University for a
new CBA were unsuccessful.
3. The Union filed a NOtice of Strike with the National
Conciliation and Mediatio Board, NCR, but after several
 meetings, 5 out of the 11 issues raised in the Notice of Strike file employees, since CSB has a personality separate
were resolved by the parties. A partial CBA was executed. and distinct from DLSU,

4. The remaining 6 unresolved issues were namely (a) scope

of the bargaining unit, (b) union security clause, (c) security of
tenure, (d) salary increases for the 2nd and 3rd years of the 2nd issue – union shop
CBA, (e) indefinite union leave, reduction of the union clause the parties should
president's workload, special leave, and (f) duration of the incorporate such clause in
agreement. These were submitted for arbitration, with their CBA, because such
Buenaventura Magsalin appointed by the parties as voluntary clause is not a restriction
arbitrator. on the employee's right of
freedom of association but
5. Magsalin’s assailed decision is as follows: rather a valid form of union
security while the CBA is
in force and in accordance
1st issue – scope of with the constitutional
bargaining unit the Computer assigned policy to promote unionism
at the Computer Services and collective bargaining
Center, just like any other and negotiations.
Computer Operators in
other units, should be 3rd issue – use of the
included as members of “last-in first-out” method of the University has the
the bargaining unit, after retrenchment and transfer management prerogative
finding that the to other schools or units to select and/or choose its
employees, thus it can
adopt valid and equitable
grounds as basis for lay-
off or separation, e.g.
Computer Operators are doing clerical and routinary performance,
work and had nothing to do with setting management qualifications,
policies for the University. competence, etc.
the discipline officers belong to the rank-and-file on
the basis of the nature of their job. 4th issue – salary
the employees of the College of St. Benilde are increases for the 2nd and the proposed budget for
outside the bargaining unit of the University's rank-and- 3rd years of the CBA the school year 1992-1993
could not sufficiently cop
 with the demand for
increases by the Union.
Thus, the University can
no longer be required to
grant a 2nd round of
increase.
5th issue – reduction of
workload of union rejected by Magsalin,
president, special leave unionism is no valid
benefits and indefinite reason for the reduction of
union leave with pay the workload of the
President, there is no
sufficient justification to
grant an indefinite leave.
6th issue –
when the parties forged
the CBA and
duration of the CBA
signed it on Nov. 19, 1990,
where a provision on
duration was explicitly
included, the same
became binding between
the parties.
6. After both parties' Motions for Reconsiderations were not
entertained by Magsalin, DLSU filed with the 2nd Division of
the SC a Petition for Certiorari with TRO and/or Preliminary
Injunction, assailing Magsalin's decision as having been
rendered in excess of jurisdiction and/or with grave abuse of
discretion. The Union also filed a Petition for Certiorari with the
1st division of the SC. Both Petitions were consolidated.
7. The Solicitor General, in behalf of Magsalin, agreed with the
voluntary arbitrator's decision on all points except with regard
to the CSB employees, who the SolGen believed should have
been included in the bargaining unit, given that there is
sufficient evidence to justify the Union's proposal to consider
DLSU and CSB as only one entity, because CSB is but a mere
integral part of DLSU. The SolGen came to this conclusion
upon a perusal of the duties of CSB’s Director of Academic
Services (e.g., to coordinate with DLSU's Director of
Admissions regarding the admission of freshmen, shiftees,
and transferees) and Administrative Officer (e.g., to
recommend and implement personnel policies in accordance
with the general policies of DLSU as a whole, to conduct and
establish liaison with all DLSU Main Campus offices, etc.).
Issues:
1. W/N the computer operators and the discipline officers
may be considered as confidential employees and should
therefore be excluded from the bargaining unit (which is
composed of rank-and-file employees)
2. W/N CSB employees should be included in the
bargaining unit
3. W/N a union shop clause should be included in the parties'
CBA in addition to the existing maintenance of membership
clause
4. W/N the denial of the Union's proposed "last-in-first-out"
method of laying-off employees is proper
5. W/N the ruling on salary increases is correct
6. W/N the denial of the Union's proposals on the reduction of
workload of its president, improved leave benefits, and
indefinite union leave with pay is proper
Held/Ratio:
1. Computer operators and discipline officers are not
confidential employees and should be included in the
bargaining unit of rank-and-file employees.
DLSU argues that the parties have already previously
agreed to exclude computer operators and discipline officers
from the bargaining unit. The Supreme Court held that the
express exclusion of computer operators and discipline
officers from the bargaining unit of rank-and-file employees in
the 1986 CBA does not bar any renegotiation for the future
inclusion of said employees. During the freedom period,
parties may not only renew the existing CBA but may also
propose and discuss modifications or amendments thereto.
Contrary to DLSU's position, the computer operators and
discipline officers are not confidential employees. The service
record of a computer operator reveals that his duties are
clerical and non-confidential in nature. The nature of the job of
discipline officers also reveal that they are not confidential
employees. Thus, computer operators and discipline officers
should be included in the bargaining unit of rank-and-file
employees.
2. The CSB employees should be excluded from the
bargaining unit of the rank-and-file employees of DLSU,
because DLSU and CSB have their own separate juridical
personality.
No sufficient evidence was shown to justify the piercing of
the veil of corporate fiction.
3. Yes, a union shop clause should be included in the parties’
CBA.
The right to join a union includes the right to abstain from
joining any union. However, the right to refrain from joining
labor organizations is limited. The legal protection granted to
the right to refrain from joining is withdrawn by operation of
law where a labor union and an employer have agreed on a
closed shop, by virtue of which the employer may employ only
members of the collective bargaining union, and the
employees must continue to be members of the union for the
duration of the contract in order to keep their jobs.
4. As an exercise of management prerogative, DLSU has
the right to adopt valid and equitable grounds as basis for
terminating of transferring employees.
A valid exercise of management prerogative is on which,
among others, covers: work assignment, working methods,
time, supervision of workers, transfer of employees, work
supervision, and the discipline, dismissal, and real of workers.
Except as provided for or limited by special laws, an employer
is free to regulate, according to his own discretion and
judgment, all aspects of employment.
5. The voluntary arbitrator committed GADALEJ in using
DLSU’s proposed budget to deny salary increases.
 The standard proof of a company's financial standing is its
financial statements duly audited by independent and credible
external auditors. The financial capability of a company cannot
be based on its proposed budget because a proposed budget
does not reflect the true financial condition of a company and
the use of such proposed budget as proof of a company's
financial condition would be susceptible to abuse by scheming
employers who migt be merely feigning dire financial
conditions in their business ventures in order to avoid granting
salary increases and fringe benefits to employees.
6. The denial of the Union's proposals on the reduction of
workload of its president, improved leave benefits, and
indefinite union leave with pay is proper.
There is no justifiable reason for the granting of the same.
San Miguel Cor. Supervisory and Exempt Employees
Union vs. Laguesma, 277 SCRA 370
Facts:
1. The Northern Luzon Magnolia Sales Labor Union-
Independent declared its intention to be the sole bargaining
unit of all regular employees of Magnolia Dairy Products in the
Northern Luzon Sales area by filing a Petition for Certification
Election before the DOLE.
2. This was opposed by the lawyer of San Miguel saying that
historically, each sales office was represented by one
bargaining unit. However, a substitute lawyer agreed to
consider all sales offices in the sales area as one bargaining
unit.
3. Mediator-Arbiter Benalfre Galang, after the agreed date,
time, and place of the election, certified the union as the sole
and exclusive bargaining agent for the subject employees.
4. San Miguel opposed this anchoring their opposition on the
historical arguments.
Issue/Held
W/N the history of the separate bargaining units of each sales
offices be conclusive as what constitutes an appropriate
bargaining unit.
The court held that it is not. First, it defined a bargaining unit
as a “group of employees of a given employer, comprised of
all or less than all of the entire body of employees, consistent
with equity to the employer, indicate to be the best suited to
serve the reciprocal rights and duties of the parties under the
collective bargaining provisions of the law.”
The factors to determine the appropriate bargaining unit are:
a: the will of the employees (Globe doctrine)
b: affinity and unity of the employees interest, such as
substantial
similarity of work and duties, or similarity of compensation and
working conditions (Substantial Mutual Interests Rule)
c: prior collective bargaining history; and
d: similarity of employment status.
The history is neither conclusive nor decisive in deciding the
proper bargaining unit. Rather, it is the mutuality or
commonality of interests. Here, all employees in the Northern
Luzon Sales area have common experiences in compensation
and working conditions.
The argument that each sales office militates against the
purposes of collective bargaining. Each sales office have
roughly 55 employees. This goes against the adage “strength
in numbers.”
German Agency for Technical Cooperation (GTZ) vs. CA,
GR No. 152318, 16 April 2009
Philips Industrial Development vs. NLRC, (supra.) 210
SCRA 339