FIRST DIVISION Superintendent.
Sometime in June 1996, the supervisory personnel
[G.R. No. 164561. August 30, 2006.]
CATHAY PACIFIC STEEL CORPORATION, BENJAMIN CHUA
JR., VIRGILIO AGERO, and LEONARDO VISORRO, JR.,
petitioners, vs. HON. COURT OF APPEALS, CAPASCO UNION
OF SUPERVISORY EMPLOYEES (CUSE) and ENRIQUE
TAMONDONG III, respondents.
DECISION
CHICO-NAZARIO, J p:
This is a special civil action for Certiorari under Rule 65 of the Rules
of Court seeking to annul and set aside, on the ground of grave
abuse of discretion amounting to lack or excess of jurisdiction, (1)
the Decision 1 of the Court of Appeals in CA-G.R. SP No. 57179
dated 28 October 2003 which annulled the Decision 2 of the
National Labor Relations Commission (NLRC) in NLRC Case No.
017822-99 dated 25 August 1999, thereby, reinstating the Decision
3 of Acting Executive Labor Arbiter Pedro C. Ramos dated 7 August
1998; and (2) the Resolution 4 of the same court, dated 3 June
2004, which denied the petitioners' Motion for Reconsideration.
Herein petitioners are Cathay Pacific Steel Corporation (CAPASCO),
a domestic corporation engaged in the business of manufacturing
steel products; Benjamin Chua, Jr. (now deceased), the former
CAPASCO President; Virgilio Agerro, CAPASCO's Vice-President; and
Leonardo Visorro, Jr., CAPASCO's Administrative-Personnel Manager.
Herein private respondents are Enrique Tamondong III, the
Personnel Superintendent of CAPASCO who was previously assigned
at the petitioners' Cainta Plant, and CAPASCO Union of Supervisory
Employees (CUSE), a duly registered union of CAPASCO.
The facts of the case are as follows:
Four former employees of CAPASCO originally filed this labor case
before the NLRC, namely: Fidel Lacambra, Armando Dayson,
Reynaldo Vacalares, and Enrique Tamondong III. However, in the
course of the proceedings, Fidel Lacambra 5 and Armando Dayson
6 executed a Release and Quitclaim, thus, waiving and abandoning
any and all claims that they may have against petitioner CAPASCO.
On 3 November 1999, Reynaldo Vacalares also signed a Quitclaim/
Release/Waiver. 7 Hence, this Petition shall focus solely on issues
affecting private respondent Tamondong.
Petitioner CAPASCO, hired private respondent Tamondong as
Assistant to the Personnel Manager for its Cainta Plant on 16
February 1990. Thereafter, he was promoted to the position of
Personnel/Administrative Officer, and later to that of Personnel
of CAPASCO launched a move to organize a union among their
ranks, later known as private respondent CUSE. Private respondent
Tamondong actively involved himself in the formation of the union
and was even elected as one of its officers after its creation.
Consequently, petitioner CAPASCO sent a memo 8 dated 3 February
1997, to private respondent Tamondong requiring him to explain
and to discontinue from his union activities, with a warning that a
continuance thereof shall adversely affect his employment in the
company. Private respondent Tamondong ignored said warning and
made a reply letter 9 on 5 February 1997, invoking his right as a
supervisory employee to join and organize a labor union. In view of
that, on 6 February 1997, petitioner CAPASCO through a memo 10
terminated the employment of private respondent Tamondong on
the ground of loss of trust and confidence, citing his union activities
as acts constituting serious disloyalty to the company.
Private respondent Tamondong challenged his dismissal for being
illegal and as an act involving unfair labor practice by filing a
Complaint for Illegal Dismissal and Unfair Labor Practice before the
NLRC, Regional Arbitration Branch IV. According to him, there was
no just cause for his dismissal and it was anchored solely on his
involvement and active participation in the organization of the
union of supervisory personnel in CAPASCO. Though private
respondent Tamondong admitted his active role in the formation of
a union composed of supervisory personnel in the company, he
claimed that such was not a valid ground to terminate his
employment because it was a legitimate exercise of his
constitutionally guaranteed right to self-organization.
In contrast, petitioner CAPASCO contended that by virtue of private
respondent Tamondong's position as Personnel Superintendent and
the functions actually performed by him in the company, he was
considered as a managerial employee, thus, under the law he was
prohibited from joining a union as well as from being elected as one
of its officers. Accordingly, petitioners maintained their argument
that the dismissal of private respondent Tamondong was perfectly
valid based on loss of trust and confidence because of the latter's
active participation in the affairs of the union.
On 7 August 1998, Acting Executive Labor Arbiter Pedro C. Ramos
rendered a Decision in favor of private respondent Tamondong,
decreeing as follows:
WHEREFORE, premises considered, judgment is hereby rendered
finding [petitioner CAPASCO] guilty of unfair labor practice and
illegal dismissal. Concomitantly, [petitioner CAPASCO] is hereby
ordered:
1. To cease and desist from further committing acts of unfair labor
practice, as charged;
2. To reinstate [private respondent Tamondong] to his former
position without loss of seniority rights and other privileges and his
full backwages inclusive of allowances, and to his other benefits or
their monetary equivalent, computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement, and herein partially computed as follows:
a) P167,076.00 — backwages from February 7, 1997 to August 7,
1998;
b) P18,564.00 — 13th month pay for 1997 and 1998;
c) P4,284.00 — Holiday pay for 12 days;
d) P3,570.00 — Service Incentive Leave for 1997 and 1998.
—————
P193,494.00 — Total partial backwages and benefits. 11
Aggrieved, petitioners appealed the afore-quoted Decision to the
NLRC. On 25 August 1999, the NLRC rendered its Decision
modifying the Decision of the Acting Executive Labor Arbiter Pedro
C. Ramos, thus:
WHEREFORE, premises all considered, the decision appealed from is
hereby MODIFIED:
a) Dismissing the Complaint for Illegal Dismissal filed by [private
respondent Tamondong] for utter lack of merit;
b) Dismissing the Complaint for Unfair Labor Practice for lack of
factual basis;
c) Deleting the awards to [private respondent Tamondong] of
backwages, moral and exemplary damages, and attorney's fees;
d) Affirming the awards to [private respondent Tamondong],
representing 13th month pay for 1997 and 1998, holiday pay for 12
days, and service incentive leave for 1997 totaling P26,418.00; and
e) Ordering the payment of backwages to [private respondent
Tamondong] reckoned from 16 September 1998 up to the date of
this Decision. 12
Pe t i t i o n e r s f i l e d a M o t i o n f o r C l a r i f i c a t i o n a n d Pa r t i a l
Reconsideration, while, private respondent Tamondong filed a
Motion for Reconsideration of the said NLRC Decision, but the NLRC
affirmed its original Decision in its Resolution 13 dated 25
November 1999.
Dissatisfied with the above-mentioned Decision of the NLRC, private
respondents Tamondong and CUSE filed a Petition for Certiorari
under Rule 65 of the Rules of Court before the Court of Appeals,
alleging grave abuse of discretion on the part of the NLRC. Then,
the Court of Appeals in its Decision dated 28 October 2003, granted
the said Petition. The dispositive of which states that:
WHEREFORE, premises considered, the instant Petition for
Certiorari is GRANTED and the herein assailed Decision dated
August 25, 1999 of the NLRC, Third Division is ANNULLED and SET
ASIDE. Accordingly, the Decision dated August 7, 1998 of NLRC,
RAB IV Acting Executive Labor Arbiter Pedro C. Ramos, insofar as
[private respondent Tamondong] is concerned is hereby
REINSTATED. 14
Consequently, petitioners filed a Motion for Reconsideration of the
aforesaid Decision of the Court of Appeals. Nonetheless, the Court
of Appeals denied the said Motion for Reconsideration for want of
convincing and compelling reason to warrant a reversal of its
judgment.
Hence, this present Petition for Certiorari under Rule 65 of the 1997
Rules of Civil Procedure.
In the Memorandum 15 filed by petitioners, they aver that private
respondent Tamondong as Personnel Superintendent of CAPASCO
was performing functions of a managerial employee because he
was the one laying down major management policies on personnel
relations such as: issuing memos on company rules and
regulations, imposing disciplinary sanctions such as warnings and
suspensions, and executing the same with full power and
discretion. They claim that no further approval or review is
necessary for private respondent Tamondong to execute these
functions, and the notations "NOTED BY" of petitioner Agerro, the
Vice-President of petitioner CAPASCO, on the aforesaid memos are
nothing but mere notice that petitioner Agerro was aware of such
company actions performed by private respondent Tamondong.
Additionally, private respondent Tamondong was not only a
managerial employee but also a confidential employee having
knowledge of confidential information involving company policies on
personnel relations. Hence, the Court of Appeals acted with grave
abuse of discretion amounting to lack or excess of jurisdiction when
it held that private respondent Tamondong was not a managerial
employee but a mere supervisory employee, therefore, making him
eligible to participate in the union activities of private respondent
CUSE.
Petitioners further argue that they are not guilty of illegal dismissal
and unfair labor practice because private respondent Tamondong
was validly dismissed and the reason for preventing him to join a
labor union was the nature of his position and functions as
Personnel Superintendent, which position was incompatible and in
conflict with his union activities. Consequently, it was grave abuse
of discretion on the part of the Court of Appeals to rule that
petitioner CAPASCO was guilty of illegal dismissal and unfair labor
practice.
Lastly, petitioners maintain that the Court of Appeals gravely
abused its discretion when it reinstated the Decision of Executive
Labor Arbiter Pedro C. Ramos holding CAPASCO liable for
backwages, 13th month pay, service incentive leave, moral
damages, exemplary damages, and attorney's fees.
On the other hand, private respondents, assert that the assailed
Decision being a final disposition of the Court of Appeals is
appealable to this Court by a Petition for Review on Certiorari under
Rule 45 of the Rules of Court and not under Rule 65 thereof. They
also claim that petitioners new ground that private respondent
Tamondong was a confidential employee of CAPASCO, thus,
prohibited from participating in union activities, is not a valid
ground to be raised in this Petition for Certiorari seeking the
reversal of the assailed Decision and Resolution of the Court of
Appeals.
Now, given the foregoing arguments raise by both parties, the
threshold issue that must first be resolved is whether or not the
Petition for Certiorari under Rule 65 of the 1997 Rules of Civil
Procedure is the proper remedy for the petitioners, to warrant the
reversal of the Decision and Resolution of the Court of Appeals
dated 28 October 2003 and 3 June 2004, respectively.
The petition must fail.
The special civil action for Certiorari is intended for the correction of
errors of jurisdiction only or grave abuse of discretion amounting to
lack or excess of jurisdiction. Its principal office is only to keep the
inferior court within the parameters of its jurisdiction or to prevent
it from committing such a grave abuse of discretion amounting to
lack or excess of jurisdiction. 16
The essential requisites for a Petition for Certiorari under Rule 65
are: (1) the writ is directed against a tribunal, a board, or an officer
exercising judicial or quasi-judicial function; (2) such tribunal,
board, or officer has acted without or in excess of jurisdiction, or
with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal or any plain, speedy, and
adequate remedy in the ordinary course of law. 17 Excess of
jurisdiction as distinguished from absence of jurisdiction means that
an act, though within the general power of a tribunal, board or
officer is not authorized, and invalid with respect to the particular
proceeding, because the conditions which alone authorize the
exercise of the general power in respect of it are wanting. 18
Without jurisdiction means lack or want of legal power, right or
authority to hear and determine a cause or causes, considered
either in general or with reference to a particular matter. It means
lack of power to exercise authority. 19 Grave abuse of discretion
implies such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction or, in other words, where the
power is exercised in an arbitrary manner by reason of passion,
prejudice, or personal hostility, and it must be so patent or gross as
to amount to an evasion of a positive duty or to a virtual refusal to
perform the duty enjoined or to act at all in contemplation of law.
20
In the case before this Court, petitioners fail to meet the third
requisite for the proper invocation of Petition for Certiorari under
Rule 65, to wit: that there is no appeal or any plain, speedy, and
adequate remedy in the ordinary course of law. They simply alleged
that the Court of Appeals gravely abuse its discretion which amount
to lack or excess of jurisdiction in rendering the assailed Decision
and Resolution. They did not bother to explain why an appeal
cannot possibly cure the errors committed by the appellate court. It
must be noted that the questioned Decision of the Court of Appeals
was already a disposition on the merits; this Court has no
remaining issues to resolve, hence, the proper remedy available to
the petitioners is to file Petition for Review under Rule 45 not under
Rule 65.
Additionally, the general rule is that a writ of certiorari will not issue
where the remedy of appeal is available to the aggrieved party. The
remedies of appeal in the ordinary course of law and that of
certiorari under Rule 65 of the Revised Rules of Court are mutually
exclusive and not alternative or cumulative. 21 Time and again this
Court reminded members of the bench and bar that the special civil
action of Certiorari cannot be used as a substitute for a lost appeal
22 where the latter remedy is available. Such a remedy will not be
a cure for failure to timely file a Petition for Review on Certiorari
under Rule 45. Nor can it be availed of as a substitute for the lost
remedy of an ordinary appeal, especially if such loss or lapse was
occasioned by one's own negligence or error in the choice of
remedies. 23
In the case at bar, petitioners received on 9 June 2004 the
Resolution of the Court of Appeals dated 3 June 2004 denying their
Motion for Reconsideration. Upon receipt of the said Resolution,
they had 15 days or until 24 June 2004 within which to file an
appeal by way of Petition for Review under Rule 45, but instead of
doing so, they just allowed the 15 day period to lapse, and then on
the 61st day from receipt of the Resolution denying their Motion for
Reconsideration, they filed this Petition for Certiorari under Rule 65
alleging grave abuse of discretion on the part of the appellate court.
Admittedly, this Court, in accordance with the liberal spirit
pervading the Rules of Court and in the interest of justice, has the
discretion to treat a Petition for Certiorari as a Petition for Review
on Certiorari under Rule 45, especially if filed within the
reglementary period for filing a Petition for Review. 24 However, in
the present case, this Court finds no compelling reason to justify a
liberal application of the rules, as this Court did in the case of
Delsan Transport Lines, Inc. v. Court of Appeals. 25 In the said
case, this Court treated the Petition for Certiorari filed by the
petitioner therein as having been filed under Rule 45 because said
Petition was filed within the 15-day reglementary period for filing a
Petition for Review on Certiorari. Petitioner's counsel therein
received the Court of Appeals Resolution denying their Motion for
Reconsideration on 26 October 1993 and filed the Petition for
Certiorari on 8 November 1993, which was within the 15-day
reglementary period for filing a Petition for Review on Certiorari. It
cannot therefore be claimed that the Petition was used, as a
substitute for appeal after that remedy has been lost through the
fault of the petitioner. 26 Conversely, such was not the situation in
the present case. Hence, this Court finds no reason to justify a
liberal application of the rules.
Accordingly, where the issue or question involves or affects the
wisdom or legal soundness of the decision, and not the jurisdiction
of the court to render said decision, the same is beyond the
province of a petition for certiorari. 27 It is obvious in this case that
the arguments raised by the petitioners delved into the wisdom or
legal soundness of the Decision of the Court of Appeals, therefore,
the proper remedy is a Petition for Review on Certiorari under Rule
45. Consequently, it is incumbent upon this Court to dismiss this
Petition.
In any event, granting arguendo, that the present petition is proper,
still it is dismissible. The Court of Appeals cannot be said to have
acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in annulling the Decision of the NLRC because the
findings of the Court of Appeals that private respondent Tamondong
was indeed a supervisory employee and not a managerial
employee, thus, eligible to join or participate in the union activities
of private respondent CUSE, were supported by evidence on record.
In the Decision of the Court of Appeals dated 28 October 2003, it
made reference to the Memorandum 28 dated 12 September 1996,
which required private respondent Tamondong to observe fixed
daily working hours from 8:00 am to 12:00 noon and from 1:00 pm
to 5:00 pm. This imposition upon private respondent Tamondong,
according to the Court of Appeals, is very uncharacteristic of a
managerial employee. To support such a conclusion, the Court of
Appeals cited the case of Engineering Equipment, Inc. v. NLRC 29
where this Court held that one of the essential characteristics 30 of
an employee holding a managerial rank is that he is not
subjected to the rigid observance of regular office hours or
maximum hours of work.
Moreover, the Court of Appeals also held that upon careful
examination of the documents submitted before it, it found out
that:
[Private respondent] Tamondong may have possessed enormous
powers and was performing important functions that goes with the
position of Personnel Superintendent, nevertheless, there was no
clear showing that he is at liberty, by using his own discretion and
disposition, to lay down and execute major business and
operational policies for and in behalf of CAPASCO. [Petitioner]
CAPASCO miserably failed to establish that [private respondent]
Tamondong was authorized to act in the interest of the company
using his independent judgment. . . . . Withal, [private respondent]
Tamondong may have been exercising certain important powers,
such as control and supervision over erring rank-and-file
employees, however, . . . he does not possess the power to hire,
transfer, terminate, or discipline erring employees of the company.
At the most, the record merely showed that [private respondent]
Tamondong informed and warned rank-and-file employees with
respect to their violations of CAPASCO's rules and regulations. . . . .
[Also, the functions performed by private respondent such as]
issuance of warning 31 to employees with irregular attendance and
unauthorized leave of absences and requiring employees to explain
regarding charges of abandonment of work, are normally SP No. 57179, which annulled the Decision of the NLRC in NLRC
performed by a mere supervisor, and not by a manager. 32 Case No. 017822-99 dated 25 August 1999, thereby, reinstating
the Decision of Acting Executive Labor Arbiter Pedro C. Ramos
Accordingly, Article 212(m) of the Labor Code, as amended, dated 7 August 1998, is hereby AFFIRMED. With costs against
differentiates supervisory employees from managerial employees, petitioners.
to wit: supervisory employees are those who, in the interest of the SO ORDERED.
employer, effectively recommend such managerial actions, if the Panganiban, C.J., Ynares-Santiago, Austria-Martinez and Callejo,
exercise of such authority is not merely routinary or clerical in Sr., JJ., concur.
nature but requires the use of independent judgment; whereas,
managerial employees are those who are vested with powers or
prerogatives to lay down and execute management policies and/or
hire, transfer, suspend, lay off, recall, discharge, assign or discipline
employees. Thus, from the foregoing provision of the Labor Code, it
can be clearly inferred that private respondent Tamondong was just
a supervisory employee. Private respondent Tamondong did not
perform any of the functions of a managerial employee as stated in
the definition given to it by the Code. Hence, the Labor Code 33
provisions regarding disqualification of a managerial employee from
joining, assisting or forming any labor organization does not apply
to herein private respondent Tamondong. Being a supervisory
employee of CAPASCO, he cannot be prohibited from joining or
participating in the union activities of private respondent CUSE, and
in making such a conclusion, the Court of Appeals did not act
whimsically, capriciously or in a despotic manner, rather, it was
guided by the evidence submitted before it. Thus, given the
foregoing findings of the Court of Appeals that private respondent is
a supervisory employee, it is indeed an unfair labor practice 34 on
the part of petitioner CAPASCO to dismiss him on account of his
union activities, thereby curtailing his constitutionally guaranteed
right to self-organization. 35
With regard to the allegation that private respondent Tamondong
was not only a managerial employee but also a confidential
employee, the same cannot be validly raised in this Petition for
Certiorari. It is settled that an issue which was not raised in the
trial court cannot be raised for the first time on appeal. This
principle applies to a special civil action for certiorari under Rule 65.
36 In addition, petitioners failed to adduced evidence which will
prove that, indeed, private respondent was also a confidential
employee.
WHEREFORE, premises considered, the instant Petition is
DISMISSED. The Decision and Resolution of the Court of Appeals
dated 28 October 2003 and 3 June 2004, respectively, in CA-G.R.
 SECOND DIVISION
[G.R. No. 110399. August 15, 1997.]
SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT
UNION AND ERNESTO L. PONCE, President, petitioners, vs.
HONORABLE BIENVENIDO E. LAGUESMA IN HIS CAPACITY
AS UNDERSECRETARY OF LABOR AND EMPLOYMENT,
HONORABLE DANILO L. REYNANTE IN HIS CAPACITY AS
MED-ARBITER AND SAN MIGUEL CORPORATION,
respondents.
Benigno I. Vivar, Jr. for petitioners.
Siguion Reyna Montecillo & Ongsiako for private respondent.
SYNOPSIS
This is a Petition for Certiorari with prayer for the issuance of
preliminary injunction filed by petitioner San Miguel Corporation
Supervisors and Exempt Union seeking to reverse and set aside the
Order of public respondent Undersecretary of the Department of
Labor and Employment Bienvenido Laguesma excluding the
employees under supervisory levels 3 and 4 and the so-called
exempt employees from the proposed bargaining unit and ruled out
their participation in the certification election. The questioned
order declared that Supervisory 3 and 4 and the so-called
exempt employees are confidential employees and therefore
they are not allowed to form, join or assist a labor union for
purposes of collective bargaining. Consequently, they are not
allowed to participate in the certification election. In the
instant case, petitioners posed the issue of whether or not
supervisory employees 3 and 4 and the exempt employees
fall under the category of "confidential employees" and if
not, do the employees of the three plants constitute one
single bargaining unit.
The Supreme Court ruled that petitioner employees do not fall
within the term confidential employees who may be prohibited from
joining the union. In the case at bar, supervisors 3 and above may
not be considered confidential employees merely because
they handle confidential data. They must first be strictly
classified as pertaining to labor relations for them to fall
under said restrictions. Clearly, the informations they handle are
properly classifiable as technical and internal business operation
data which has no relevance to negotiations and settlement of
grievances wherein the interests of a union and the management
are invariably adversarial. Furthermore, even assuming that they
are confidential employees, jurisprudence has established
that there is no legal prohibition against confidential
employees who are not performing managerial function to
form and join a union. Anent the issue of employees of the three
plants constitute one single bargaining unit, the Court has held that
petitioner's contention is meritorious. It is readily seen that 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 agreement. The fact that
three plants are located in different places is immaterial.
Geographical location can be completely disregarded if the
communal or mutual interests of the employees are not
sacrificed. Accordingly, the Court set aside the assailed order and
the order of the Med-Arbiter is reinstated.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR
RELATIONS; CONFIDENTIAL EMPLOYEES, DEFINED. — 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. The two criteria
are cumulative, and both must be met if an employee is to be
considered a confidential employee — that is, the confidential
relationship must exist between the employee and his supervisor,
and the supervisor must handle the prescribed responsibilities
relating to labor relations. SDTaHc
2. ID.; ID.; ID.; "CONFIDENTIAL EMPLOYEE RULE"; CONSTRUED. —
The exclusion from bargaining units of employees who, in the
normal course of their duties, become aware of management
policies relating to labor relations is a principal objective sought to
be accomplished by the "confidential employee rule." The broad
rationale behind this rule is that employees should not be placed in
a position involving a potential conflict of interests. "Management
should not be required to handle labor relations matters through
employees who are represented by the union with which the
company is required to deal and who in the normal performance of
their duties may obtain advance information of the company's
position with regard to contract negotiations, the disposition of
grievances, or other labor relations matters." An important element
of the "confidential employee rule" is the employee's need to use
labor relations information. Thus, in determining the confidentiality
of certain employees, a key question frequently considered is the
employees' necessary access to confidential labor relations
information. "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." As held in Westinghouse
Electric Corporation v. National Labor Relations Board, [(CA6) 398
P2d 669 (1968)] "an employee may not be excluded from
appropriate bargaining unit merely because he has access to
confidential information concerning employer's internal business
operations and which is not related to the field of labor relations." It
must be borne in mind that Section 3 of Article XIII of the 1987
Constitution mandates the State to guarantee to "all" workers the
right to self-organization. Hence, confidential employees who may
be excluded from bargaining unit must be strictly defined so as not
to needlessly deprive many employees of their right to bargain
collectively through representatives of their choosing.
3. ID.; ID.; ID.; LABOR ORGANIZATION; INELIGIBILITY OF
MANAGERIAL EMPLOYEES TO JOIN THEREOF; NOT APPLICABLE IN
CASE AT BAR. — There is no question that the employees of San
Miguel Corporation Magnolia Poultry Products Plants of Cabuyao,
San Fernando and Otis, supervisors and 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. They are, therefore, not
qualified to be classified as managerial employees who, under
Article 245 of the Labor Code, are not eligible to join, assist or form
any labor organization. In the very same provision, 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.
4. ID.; ID.; ID.; APPROPRIATE BARGAINING UNIT; DEFINED. — An
appropriate bargaining unit may be defined as "a group of
employees of a given employer, comprised of all or less than all of
the entire body of employees, which the collective interest of all the
employees, consistent with equity to the employer, indicate to be
best suited to serve the reciprocal rights and duties of the parties
under the collective bargaining provisions of the law."
5. ID.; ID.; ID.; ID.; STANDARD IN DETERMINING PROPER
CONSTITUENCY THEREOF; PRESENT IN CASE AT BAR. — A unit to
be appropriate must effect a grouping of employees who have
substantial, mutual interests in wages, hours, working conditions
and other subjects of collective bargaining. It is readily seen that
the employees in the instant case have "community or mutuality of
interests," which is the standard in determining the proper
constituency of a collective bargaining unit. It is undisputed that
they all belong to the Magnolia Poultry Division of San Miguel
Corporation. This means that, although they belong to three
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 three plants
are located in three different places, namely, in Cabuyao, Laguna,
in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is
immaterial. Geographical location can be completely disregarded if
the communal or mutual interests of the employees are not
sacrificed. The distance among the three plants is not productive of
insurmountable difficulties in the administration of union affairs.
Neither are there regional differences that are likely to impede the
operations of a single bargaining representative.
DECISION
ROMERO, J p:
This is a Petition for Certiorari with Prayer for the Issuance of
Preliminary Injunction seeking to reverse and set aside the Order of
public respondent, Undersecretary of the Department of Labor and
Employment, Bienvenido E. Laguesma, dated March 11, 1993, in
Case No. OS MA A-2-70-91 1 entitled "In Re: Petition for
Certification Election Among the Supervisory and Exempt
Employees of the San Miguel Corporation Magnolia Poultry Products
Plants of Cabuyao, San Fernando and Otis, San Miguel Corporation
Supervisors and Exempt Union, Petitioner." The Order excluded the
employees under supervisory levels 3 and 4 and the so-called
exempt employees from the proposed bargaining unit and ruled out
their participation in the certification election. LexLib
The antecedent facts are undisputed:
On October 5, 1990, petitioner union filed before the
Department of Labor and Employment (DOLE) a Petition for
Direct Certification or Certification Election among the
supervisors and exempt employees of the SMC Magnolia
Poultry Products Plants of Cabuyao, San Fernando and Otis.
On December 19, 1990, Med-Arbiter Danilo L. Reynante issued
an Order ordering the conduct of certification election
among the supervisors and exempt employees of the SMC
Magnolia Poultry Products Plants of Cabuyao, San Fernando and
Otis as one bargaining unit.
On January 18, 1991, respondent San Miguel Corporation filed a
Notice of Appeal with Memorandum on Appeal, pointing out,
among others, the Med-Arbiter's error in grouping together
all three (3) separate plants, Otis, Cabuyao and San
Fernando, into one bargaining unit, and in including
supervisory levels 3 and above whose positions are
confidential in nature.
On July 23, 1991, the public respondent, Undersecretary
Laguesma, granted respondent company's Appeal and ordered the
remand of the case to the Med-Arbiter of origin for
determination of the true classification of each of the
employees sought to be included in the appropriate
bargaining unit.
Upon petitioner-union's motion dated August 7, 1991,
Undersecretary Laguesma granted the reconsideration prayed for
on September 3, 1991 and 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 three plants at Cabuyao, San
Fernando and Otis.
On September 21, 1991, respondent company, San Miguel
Corporation filed a Motion for Reconsideration with Motion to
suspend proceedings.
On March 11, 1993, an Order was issued by the public respondent
granting the Motion, citing the doctrine enunciated in Philips
Industrial Development, Inc. v. NLRC 2 case. Said Order reads in
part:
". . . Confidential employees, like managerial employees, are not
allowed to form, join or assist a labor union for purposes of
collective bargaining.
In this case, S3 and S4 Supervisors 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 following the
above court's ruling. Consequently, they are not allowed to
participate in the certification election.
WHEREFORE, the Motion is hereby granted and the Decision of this
Office dated 03 September 1991 is hereby modified to the extent
that employees under supervisory levels 3 and 4 (S3 and S4) and
the so-called exempt employees are not allowed to join the
proposed bargaining unit and are therefore excluded from those
who could participate in the certification election." 3
Hence this petition.
For resolution in this case are the following issues:
1. Whether Supervisory employees 3 and 4 and the exempt
employees of the company are considered confidential employees,
hence ineligible from joining a union.
2. If they are not confidential employees, do the employees of the
three plants constitute an appropriate single bargaining unit.
On the first issue, this Court rules that said employees do not
fall within the term "confidential employees" who may be
prohibited from joining a union.
There is no question that the said employees, supervisors 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. They are, therefore, not qualified to be
classified as managerial employees who, under Article 245 4 of the
Labor Code, are not eligible to join, assist or form any labor
organization. In the very same provision, 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 that need be addressed is whether these
employees are properly classified as 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. 5 The two criteria are cumulative, and both
must be met if an employee is to be considered a confidential
employee — that is, the confidential relationship must exist
between the employee and his supervisor, and the supervisor must
handle the prescribed responsibilities relating to labor relations. 6
The exclusion from bargaining units of employees who, in the
normal course of their duties, become aware of management
policies relating to labor relations is a principal objective sought to
be accomplished by the "confidential employee rule." The broad
rationale behind this rule is that employees should not be placed in
a position involving a potential conflict of interests. 7 "Management
should not be required to handle labor relations matters through
employees who are represented by the union with which the
company is required to deal and who in the normal performance of
their duties may obtain advance information of the company's
position with regard to contract negotiations, the disposition of
grievances, or other labor relations matters." 8
There have been ample precedents in this regard, thus in Bulletin
Publishing Company v. Hon. Augusto Sanchez, 9 the Court held
that "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." The same rationale was applied to confidential
employees in "Golden Farms, Inc. v. Ferrer-Calleja" 10 and in the
more recent case of "Philips Industrial Development, Inc. v. NLRC "
11 which held that confidential employees, by the very nature of
their functions, assist and act in a confidential capacity to, or have
access to confidential matters of, person who exercise managerial
functions in the field of labor relations. Therefore, the rationale
behind the ineligibility of managerial employees to form, assist or
join a labor union was held equally applicable to them. 12
An important element of the "confidential employee rule" is
the employee's need to use labor relations information. Thus,
in determining the confidentiality of certain employees, a key
question frequently considered is the employees' necessary access
to confidential labor relations information. 13
It is the contention of respondent corporation that
Supervisory employees 3 and 4 and the exempt employees
come within the meaning of the term "confidential
employees" primarily because they answered in the
affirmative when asked "Do you handle confidential data or
documents?" in the Position Questionnaires submitted by the
Union. 14 In the same questionnaire, however, it was also stated
that the confidential information handled by questioned employees
relate to product formulation, product standards and
product specification which by no means relate to "labor
relations." 15
Granting arguendo that an employee has access to confidential
labor relations information but such is merely incidental to his
duties and knowledge thereof is not necessary in the
performance of such duties, said access does not render the
employee a confidential employee. 16 "If access to confidential
labor relations information is to be a factor in the determination of
an employee's confidential status, such information must relate to
the employer's labor relations policies. Thus, an employee of a
labor union, or of a management association, must have access to
confidential labor relations information with respect to his employer,
the union, or the association, to be regarded a confidential
employee, and knowledge of labor relations information pertaining
to the companies with which the union deals, or which the
association represents, will not cause an employee to be excluded
from the bargaining unit representing employees of the union or
association." 17 "Access to information which is regarded by
the employer to be confidential from the business
standpoint, such as financial information 18 or technical
trade secrets, will not render an employee a confidential
employee." 19
Herein listed are the functions of supervisors 3 and higher:
1. To undertake decisions to discontinue/temporarily stop shift
operations when situations require.
2. To effectively oversee the quality control function at the
processing lines in the storage of chicken and other products.
3. To administer efficient system of evaluation of products in the
outlets.
4. To be directly responsible for the recall, holding and rejection of
direct manufacturing materials.
5. To recommend and initiate actions in the maintenance of
sanitation and hygiene throughout the plant. 20
It is evident that whatever confidential data the questioned
employees may handle will have to relate to their functions. From
the foregoing functions, it can be gleaned that the confidential
information said employees have access to concern the
employer's internal business operations. As held in
Westinghouse Electric Corporation v. National Labor Relations
Board, 21 "an employee may not be excluded from
appropriate bargaining unit merely because he has access to
confidential information concerning employer's internal
business operations and which is not related to the field of
labor relations." cdrep
It must be borne in mind that Section 3 of Article XIII of the 1987
Constitution mandates the State to guarantee to "all" workers the
right to self-organization. Hence, confidential employees who
may be excluded from bargaining unit must be strictly
defined so as not to needlessly deprive many employees of
their right to bargain collectively through representatives of
their choosing. 22
In the case at bar, supervisors 3 and above may not be
considered confidential employees merely because they
handle "confidential data" as such must first be strictly
classified as pertaining to labor relations for them to fall
under said restrictions. The information they handle are properly
classifiable as technical and internal business operations data
which, to our mind, has no relevance to negotiations and
settlement of grievances wherein the interests of a union
and the management are invariably adversarial. Since the
employees are not classifiable under the confidential type, this
Court rules that they may appropriately form a bargaining unit
for purposes of collective bargaining. Furthermore, even
assuming that they are confidential employees,
jurisprudence has established that there is no legal
prohibition against confidential employees who are not
performing managerial functions to form and join a union.
23
In this connection, the issue of whether the employees of San
Miguel Corporation Magnolia Poultry Products Plants of Cabuyao,
San Fernando, and Otis constitute a single bargaining unit needs to
be threshed out.
It is the contention of the petitioner union that the creation
of three (3) separate bargaining units, one each for Cabuyao,
Otis and San Fernando as ruled by the respondent Undersecretary,
is contrary to the one-company, one-union policy. It adds that
Supervisors level 1 to 4 and exempt employees of the three plants
have a similarity or a community of interests.
This Court finds the contention of the petitioner meritorious.
An appropriate bargaining unit may be defined as "a group
of employees of a given employer, comprised of all or less
than all of the entire body of employees, which the collective
interest of all the employees, consistent with equity to the
employer, indicate to be best suited to serve the reciprocal
rights and duties of the parties under the collective
bargaining provisions of the law." 24
A unit to be appropriate must effect a grouping of employees who
have substantial, mutual interests in wages, hours, working
conditions and other subjects of collective bargaining. 25
It is readily seen that the employees in the instant case have
"community or mutuality of interests," which is the standard
in determining the proper constituency of a collective
bargaining unit. 26 It is undisputed that they all belong to the
Magnolia Poultry Division of San Miguel Corporation. This
means that, although they belong to three 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.
In light of these considerations, the Solicitor General has opined
that separate bargaining units in the three different plants of
the division will fragmentize the employees of the said
division, thus greatly diminishing their bargaining leverage.
Any concerted activity held against the private respondent for a
labor grievance in one bargaining unit will, in all probability, not
create much impact on the operations of the private respondent.
The two other plants still in operation can well step up their
production and make up for the slack caused by the bargaining unit
engaged in the concerted activity. This situation will clearly
frustrate the provisions of the Labor Code and the mandate of the
Constitution. 27
The fact that the three plants are located in three different places,
namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and
in San Fernando, Pampanga is immaterial. Geographical location
can be completely disregarded if the communal or mutual
interests of the employees are not sacrificed as demonstrated
in UP v. Calleja-Ferrer where all non-academic rank and file
employees of the University of the Philippines in Diliman, Quezon
City, Padre Faura, Manila, Los Baños, Laguna and the Visayas were
allowed to participate in a certification election. We rule that the
distance among the three plants is not productive of
insurmountable difficulties in the administration of union
affairs. Neither are there regional differences that are likely
to impede the operations of a single bargaining
representative.
WHEREFORE, the assailed Order of March 11, 1993 is hereby SET
ASIDE and the Order of the Med-Arbiter on December 19, 1990 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.
cdphil
SO ORDERED.
Regalado, Puno, Mendoza and Torres, Jr., JJ ., concur.

 THIRD DIVISION
[G.R. No. 161933. April 22, 2008.]
STANDARD CHARTERED BANK EMPLOYEES UNION (SCBEU-
NUBE), petitioner, vs. STANDARD CHARTERED BANK and
ANNEMARIE DURBIN, in her capacity as Chief Executive
Officer, Philippines, Standard Chartered Bank, respondents.
DECISION
AUSTRIA-MARTINEZ, J p:
For resolution is an appeal by certiorari filed by petitioner under
Rule 45 of the Rules of Court, assailing the Decision 1 dated
October 9, 2002 and Resolution 2 dated January 26, 2004 issued
by the Court of Appeals (CA), dismissing their petition and affirming
the Secretary of Labor and Employment's Orders dated May 31,
2001 and August 30, 2001.
Petitioner and the Standard Chartered Bank (Bank) began
negotiating for a new Collective Bargaining Agreement
(CBA) in May 2000 as their 1998-2000 CBA already expired. Due
to a deadlock in the negotiations, petitioner filed a Notice of
Strike prompting the Secretary of Labor and Employment to
assume jurisdiction over the labor dispute.
On May 31, 2001, Secretary Patricia A. Sto. Tomas of the
Department of Labor and Employment (DOLE) issued an Order with
the following dispositive portion:
WHEREFORE, PREMISES CONSIDERED, the Standard Chartered
Bank and the Standard Chartered Bank Employees Union are
directed to execute their collective bargaining agreement
effective 01 April 2001 until 30 March 2003 incorporating therein
the foregoing dispositions and the agreements they reached
in the course of negotiations and conciliation. All other
submitted issues that were not passed upon are dismissed.
The charge of unfair labor practice for bargaining in bad faith
and the claim for damages relating thereto are hereby
dismissed for lack of merit.
Finally, the charge of unfair labor practice for gross violation
of the economic provisions of the CBA is hereby dismissed
for want of jurisdiction.
SO ORDERED. 3
Both petitioner and the Bank filed their respective motions for
reconsideration, which were denied by the Secretary per Order
dated August 30, 2001. 4
Petitioner sought recourse with the CA via a petition for certiorari,
and in the assailed Decision dated October 9, 2002 5 and
Resolution dated January 26, 2004, 6 the CA dismissed their
petition and affirmed the Secretary's Orders.
Hence, herein petition based on the following grounds:
I.
THE COURT A QUO ERRED IN DECIDING THAT THERE WAS NO
BASIS FOR REVISING THE SCOPE OF EXCLUSIONS FROM THE
APPROPRIATE BARGAINING UNIT UNDER THE CBA.
II.
THE COURT A QUO ERRED IN DECIDING THAT A ONE-MONTH OR
LESS TEMPORARY OCCUPATION OF A POSITION (ACTING
CAPACITY) DOES NOT MERIT ADJUSTMENT IN REMUNERATION. 7
The resolution of this case has been overtaken by the
execution of the parties' 2003-2005 CBA. While this would
render the case moot and academic, nevertheless, the
likelihood that the same issues will come up in the parties'
future CBA negotiations is not far-fetched, thus compelling
its resolution. Courts will decide a question otherwise moot if it is
capable of repetition yet evading review. 8
The CBA provisions in dispute are the exclusion of certain
employees from the appropriate bargaining unit and the adjustment
of remuneration for employees serving in an acting capacity for one
month.
In their proposal, petitioner sought the exclusion of only the
following employees from the appropriate bargaining unit — all
managers who are vested with the right to hire and fire employees,
confidential employees, those with access to labor relations
materials, Chief Cashiers, Assistant Cashiers, personnel of the Telex
Department and one Human Resources (HR) staff. 9
In the previous 1998-2000 CBA, 10 the excluded employees
are as follows:
A. All covenanted and assistant officers (now called National
Officers)
B. One confidential secretary of each of the:
1. Chief Executive, Philippine Branches
2. Deputy Chief Executive/Head, Corporate Banking Group
3. Head, Finance
4. Head, Human Resources
5. Manager, Cebu
6. Manager, Iloilo
7. Covenanted Officers provided said positions shall be filled by new
recruits.
C. The Chief Cashiers and Assistant Cashiers in Manila, Cebu and
Iloilo, and in any other branch that the BANK may establish in the
country.
D. Personnel of the Telex Department
E. All Security Guards
F. Probationary employees, without prejudice to Article 277 (c) of
the Labor Code, as amended by R.A. 6715, casuals or emergency
employees; and
G. One (1) HR Staff 11
The Secretary, however, maintained the previous exclusions
because petitioner failed to show that the employees sought
to be removed from the list qualify for exclusion. 12
With regard to the remuneration of employees working in an acting
capacity, it was petitioner's position that additional pay should be
given to an employee who has been serving in a temporary/acting
capacity for one week. The Secretary likewise rejected petitioner's
proposal and instead, allowed additional pay for those who had
been working in such capacity for one month. The Secretary agreed
with the Bank's position that a restrictive provision would curtail
management's prerogative, and at the same time, recognized that
employees should not be made to work in an acting capacity for
long periods of time without adequate compensation.
The Secretary's disposition of the issues raised by petitioner were
affirmed by the CA. 13 The Court sustains the CA.
Whether or not the employees sought to be excluded from the
appropriate bargaining unit are confidential employees is a question
of fact, which is not a proper issue in a petition for review under
Rule 45 of the Rules of Court. 14 This holds more true in the
present case in which petitioner failed to controvert with evidence
the findings of the Secretary and the CA.
The disqualification of managerial and confidential employees from
joining a bargaining unit for rank and file employees is already well-
entrenched in jurisprudence. While 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. 15
In this case, the question that needs to be answered is whether the
Bank's Chief Cashiers and Assistant Cashiers, personnel of the Telex
Department and HR staff are confidential employees, such that they
should be excluded.
As regards the qualification of bank cashiers as confidential
employees, National Association of Trade Unions (NATU) — Republic
Planters Bank Supervisors Chapter v. Torres 16 declared that they
are confidential employees having control, custody and/or access to
confidential matters, e.g., the branch's 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, and therefore, disqualified from joining or assisting a
union; or joining, assisting or forming any other labor organization.
17
Golden Farms, Inc. v. Ferrer-Calleja 18 meanwhile stated that
"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 spy or spies of either party to a collective
bargaining agreement". 19
Finally, in Philips Industrial Development, Inc. v. National Labor
Relations Commission, 20 the Court designated personnel staff,
in which human resources staff may be qualified, as confidential
employees because 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.
Petitioner insists that the foregoing employees are not confidential
employees; however, it failed to buttress its claim. Aside from its
generalized arguments, and despite the Secretary's finding that
there was no evidence to support it, petitioner still failed to
substantiate its claim. Petitioner did not even bother to state the
nature of the duties and functions of these employees, depriving
the Court of any basis on which it may be concluded that they are
indeed confidential employees. As aptly stated by the CA:
While We agree that petitioner's proposed revision is in accordance
with the law, this does not necessarily mean that the list of
exclusions enumerated in the 1998-2000 CBA is contrary to law. As
found by public respondent, petitioner failed to show that the
employees sought to be removed from the list of exclusions are
actually rank and file employees who are not managerial or
confidential in status and should, accordingly, be included in the
appropriate bargaining unit.
Absent any proof that Chief Cashiers and Assistant Cashiers, Secretary) and the appellate court on the matter coincide, as in this
personnel of the Telex department and one (1) HR Staff have case at bar. The Rule limits that function of the Court to the review
mutuality of interest with the other rank and file employees, then or revision of errors of law and not to a second analysis of the
they are rightfully excluded from the appropriate bargaining unit. . . evidence. . . . Thus, absent any showing of whimsical or capricious
. 21 (Emphasis supplied) exercise of judgment, and unless lack of any basis for the
Petitioner cannot simply rely on jurisprudence without explaining conclusions made by the appellate court be amply demonstrated,
how and why it should apply to this case. Allegations must be we may not disturb such factual findings. 23
supported by evidence. In this case, there is barely any at all. WHEREFORE, the petition is DENIED.
There is likewise no reason for the Court to disturb the conclusion SO ORDERED.
of the Secretary and the CA that the additional remuneration Ynares-Santiago, Chico-Nazario, Nachura and Reyes, JJ., concur.
should be given to employees placed in an acting capacity for one
month. The CA correctly stated:
Likewise, We uphold the public respondent's Order that no
employee should be temporarily placed in a position (acting
capacity) for more than one month without the corresponding
adjustment in the salary. Such order of the public respondent is not
in violation of the "equal pay for equal work" principle, considering
that after one (1) month, the employee performing the job in an
acting capacity will be entitled to salary corresponding to such
position.

xxx xxx xxx

In arriving at its Order, the public respondent took all the relevant
evidence into account and weighed both parties arguments
extensively. Thus, public respondent concluded that a restrictive
provision with respect to employees being placed in an acting
capacity may curtail management's valid exercise of its prerogative.
At the same time, it recognized that employees should not be made
to perform work in an acting capacity for extended periods of time
without being adequately compensated. . . . 22
Thus, the Court reiterates the doctrine that:
[T]he office of a petition for review on certiorari under Rule 45 of
the Rules of Court requires that it shall raise only questions of law.
The factual findings by quasi-judicial agencies, such as the
Department of Labor and Employment, when supported by
substantial evidence, are entitled to great respect in view of their
expertise in their respective fields. Judicial review of labor cases
does not go so far as to evaluate the sufficiency of evidence on
which the labor official's findings rest. It is not our function to
assess and evaluate all over again the evidence, testimonial and
documentary, adduced by the parties to an appeal, particularly
where the findings of both the trial court (here, the DOLE
 THIRD DIVISION
[G.R. No. 157117. November 20, 2006.]
COASTAL SUBIC BAY TERMINAL, INC., petitioner, vs.
DEPARTMENT OF LABOR and EMPLOYMENT — OFFICE OF THE
SECRETARY, COASTAL SUBIC BAY TERMINAL, INC.
SUPERVISORY UNION-APSOTEU, and COASTAL SUBIC BAY
TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP,
respondents.
DECISION
QUISUMBING, J p:
For review on certiorari is the Court of Appeals' Decision 1 dated
August 31, 2001, in CA-G.R. SP No. 54128 and the Resolution 2
dated February 5, 2003, denying petitioner's motion for
reconsideration. The Court of Appeals had affirmed the Decision 3
dated March 15, 1999 of the Secretary of the Department of Labor
and Employment (DOLE) reversing the Mediator Arbiter's dismissal
of private respondents' petitions for certification election.
The facts are as follows:
On July 8, 1998, private respondents Coastal Subic Bay Terminal,
Inc. Rank-and-File Union (CSBTI-RFU) and Coastal Subic Bay
Terminal, Inc. Supervisory Union (CSBTI-SU) filed separate
petitions for certification election before Med-Arbiter Eladio
de Jesus of the Regional Office No. III. The rank-and-file union
insists that it is a legitimate labor organization having been issued a
charter certificate by the Associated Labor Union (ALU), and the
supervisory union by the Associated Professional, Supervisory,
Office and Technical Employees Union (APSOTEU). Private
respondents also alleged that the establishment in which
they sought to operate was unorganized.
Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both
petitions for certification election alleging that the rank-and-
file union and supervisory union were not legitimate labor
organizations, and that the proposed bargaining units were
not particularly described.
Without ruling on the legitimacy of the respondent unions, the Med-
Arbiter dismissed, without prejudice to refiling, both petitions which
had been consolidated. The Med-Arbiter held that the ALU and
APSOTEU are one and the same federation having a common
set of officers. Thus, the supervisory and the rank-and-file
unions were in effect affiliated with only one federation. 4
The Med-Arbiter ruled as follows:
Viewed in the light of all the foregoing, this Office finds the
simultaneous filing of the instant petitions to be invalid and
unwarranted. Consequently, this Office has no recourse but to
dismiss both petitions without prejudice to the refiling of either.
cEDaTS
WHEREFORE, PREMISES CONSIDERED, let the instant petitions be,
as they are hereby DISMISSED.
SO ORDERED. 5
Both parties appealed to the Secretary of Labor and
Employment, who reversed the decision of the Med-Arbiter.
The Secretary thru Undersecretary R. Baldoz, ruled that CSBTI-
SU and CSBTI-RFU have separate legal personalities to file
their separate petitions for certification election. The
Secretary held that APSOTEU is a legitimate labor organization
because it was properly registered pursuant to the 1989 Revised
Rules and Regulations implementing Republic Act No. 6715, the
rule applicable at the time of its registration. It further ruled that
ALU and APSOTEU are separate and distinct labor unions having
separate certificates of registration from the DOLE. They also have
different sets of locals. The Secretary declared CSBTI-RFU and
CSBTI-SU as legitimate labor organizations having been chartered
respectively by ALU and APSOTEU after submitting all the
requirements with the Bureau of Labor Relations (BLR).
Accordingly, the Secretary ordered the holding of separate
certification election, viz:
WHEREFORE, the decision of the Med-Arbiter, Regional Office No.
III is hereby REVERSED. Let separate certification elections be
conducted immediately among the appropriate employees of
CSBTI, after the usual pre-election conference, with the following
choices:
I. For all rank and file employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-
ALU-TUCP; and
2. NO UNION.
II. For all supervisory employees of CSBTI:
1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES
UNION-APSOTEU; and
2. NO UNION.
The latest payroll of the employer, including its payrolls for the last
three months immediately preceding the issuance of this decision,
shall be the basis for determining the qualified list of voters.
SO DECIDED. 6
The motion for reconsideration was also denied. 7
On appeal, the Court of Appeals affirmed the decision of the
Secretary. 8 It held that there was no grave abuse of discretion on
the part of the Secretary; its findings are supported by evidence on
record; and thus should be accorded with respect and finality. 9
The motion for reconsideration was likewise denied. 10 Hence, the
instant petition by the company anchored on the following grounds:
I chartered affiliate CSBTI-SU cannot attain the status of a legitimate
THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON THE
"1989 REVISED RULES AND REGULATIONS IMPLEMENTING RA
6715" AS BASIS TO RECOGNIZE PRIVATE RESPONDENT APSOTEU'S
REGISTRATION BY THE DOLE REGIONAL DIRECTOR. CaDSHE
II
THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED
PUBLIC RESPONDENT'S APPLICATION OF THE PRINCIPLE OF STARE
DECISIS TO HASTILY DISPOSE OF THE LEGAL PERSONALITY ISSUE
OF APSOTEU.
III
THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN ACCORD
WITH LAW AND JURISPRUDENCE WHEN IT AFFIRMED PUBLIC
RESPONDENT'S APPLICATION OF THE "UNION AUTONOMY"
THEORY.
IV
IN AFFIRMING PUBLIC RESPONDENT'S FINDING THAT PRIVATE
RESPONDENTS ARE "SEPARATE FEDERATIONS," THE HONORABLE
COURT OF APPEALS:
(1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING
NATURE OF A MED-ARBITER'S FACTUAL FINDINGS; AND
(2) DISREGARDED EVIDENCE ON RECORD OF "ILLEGAL
COMMINGLING." 11
Plainly, the issues are (1) Can the supervisory and the rank-
and-file unions file separate petitions for certification
election?; (2) Was the Secretary's decision based on stare decisis
correct?; and (3) Were private respondents engaged in
commingling?
The issue on the status of the supervisory union CSBTI-SU depends
on the status of APSOTEU, its mother federation.
Petitioner argues that APSOTEU improperly secured its registration
from the DOLE Regional Director and not from the BLR; that it is
the BLR that is authorized to process applications and issue
certificates of registration in accordance with our ruling in Phil.
Association of Free Labor Unions v. Secretary of Labor; 12 that the
certificates of registration issued by the DOLE Regional Director
pursuant to the rules are questionable, and possibly even void ab
initio for being ultra vires; and that the Court of Appeals erred
when it ruled that the law applicable at the time of APSOTEU's
registration was the 1989 Revised Implementing Rules and
Regulations of Rep. Act No. 6715.
Petitioner insists that APSOTEU lacks legal personality, and its
labor organization to file a petition for certification election. It relies
on Villar v. Inciong, 13 where we held therein that Amigo
Employees Union was not a duly registered independent union
absent any record of its registration with the Bureau.
Pertinent is Article 235 14 of the Labor Code which provides that
applications for registration shall be acted upon by the Bureau.
"Bureau" as defined under the Labor Code means the BLR and/or
the Labor Relations Division in the Regional Offices of the
Department of Labor. 15 Further, Section 2, Rule II, Book V of the
1989 Revised Implementing Rules of the Labor Code (Implementing
Rules) provides that:
Section 2. Where to file application; procedure — Any national labor
organization or labor federation or local union may file an
application for registration with the Bureau or the Regional Office
where the applicant's principal offices is located. The Bureau or the
Regional Office shall immediately process and approve or deny the
application. In case of approval, the Bureau or the Regional Office
shall issue the registration certificate within thirty (30) calendar
days from receipt of the application, together with all the
requirements for registration as hereinafter provided. 16
The Implementing Rules specifically Section 1, Rule III of Book V,
as amended by Department Order No. 9, thus:
SECTION 1. Where to file applications. — The application for
registration of any federation, national or industry union or trade
union center shall be filed with the Bureau. Where the application is
filed with the Regional Office, the same shall be immediately
forwarded to the Bureau within forty-eight (48) hours from filing
thereof, together with all the documents supporting the
registration. SDAcaT
The applications for registration of an independent union shall be
filed with and acted upon by the Regional Office where the
applicant's principal office is located . . . .
xxx xxx xxx
The DOLE issued Department Order No. 40-03, which took effect on
March 15, 2003, further amending Book V of the above
implementing rules. The new implementing rules explicitly provide
that applications for registration of labor organizations shall be filed
either with the Regional Office or with the BLR. 17
Even after the amendments, the rules did not divest the Regional
Office and the BLR of their jurisdiction over applications for
registration by labor organizations. The amendments to the
implementing rules merely specified that when the application was
filed with the Regional Office, the application would be acted upon
by the BLR.
The records in this case showed that APSOTEU was registered on
March 1, 1991. Accordingly, the law applicable at that time was
Section 2, Rule II, Book V of the Implementing Rules, and not
Department Order No. 9 which took effect only on June 21, 1997.
Thus, considering further that APSOTEU's principal office is located
in Diliman, Quezon City, and its registration was filed with the NCR
Regional Office, the certificate of registration is valid.
The petitioner misapplied Villar v. Inciong. 18 In said case, there
was no record in the BLR that Amigo Employees Union was
registered. 19
Did the Court of Appeals err in its application of stare decisis when
it upheld the Secretary's ruling that APSOTEU is a legitimate labor
organization and its personality cannot be assailed unless in an
independent action for cancellation of registration certificate? 20
We think not.
Section 5, Rule V, Book V of the Implementing Rules states:
Section 5. Effect of registration — The labor organization or
workers' association shall be deemed registered and vested with
legal personality on the date of issuance of its certificate of
registration. Such legal personality cannot thereafter be subject to
collateral attack, but maybe questioned only in an independent
petition for cancellation in accordance with these Rules. 21
Thus, APSOTEU is a legitimate labor organization and has authority
to issue charter to its affiliates. 22 It may issue a local charter
certificate to CSBTI-SU and correspondingly, CSBTI-SU is
legitimate.
Are ALU, a rank-and-file union and APSOTEU, a supervisory union
one and the same because of the commonalities between them?
Are they commingled?
The petitioner contends that applying by analogy, the doctrine of
piercing the veil of corporate fiction, APSOTEU and ALU are the
same federation. Private respondents disagree. EIcSDC
First, as earlier discoursed, once a labor union attains the status of
a legitimate labor organization, it continues as such until its
certificate of registration is cancelled or revoked in an independent
action for cancellation. 23 In addition, the legal personality of a
labor organization cannot be collaterally attacked. 24 Thus, when
the personality of the labor organization is questioned in the same
manner the veil of corporate fiction is pierced, the action partakes
the nature of a collateral attack. Hence, in the absence of any
independent action for cancellation of registration against either
APSOTEU or ALU, and unless and until their registrations are
cancelled, each continues to possess a separate legal personality.
The CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct
and separate federations, despite the commonalities of APSOTEU
and ALU.
Under the rules implementing the Labor Code, a chartered local
union acquires legal personality through the charter certificate
issued by a duly registered federation or national union, and
reported to the Regional Office in accordance with the rules
implementing the Labor Code. 25 A local union does not owe its
existence to the federation with which it is affiliated. It is a separate
and distinct voluntary association owing its creation to the will of its
members. Mere affiliation does not divest the local union of its own
personality, neither does it give the mother federation the license to
act independently of the local union. It only gives rise to a contract
of agency, where the former acts in representation of the latter. 26
Hence, local unions are considered principals while the federation is
deemed to be merely their agent. 27 As such principals, the unions
are entitled to exercise the rights and privileges of a legitimate
labor organization, including the right to seek certification as the
sole and exclusive bargaining agent in the appropriate employer
unit.
A word of caution though, under Article 245 of the Labor Code, 28
supervisory employees are not eligible for membership in a labor
union of rank-and-file employees. The supervisory employees are
allowed to form their own union but they are not allowed to join the
rank-and-file union because of potential conflicts of interest. 29
Further, to avoid a situation where supervisors would merge with
the rank-and-file or where the supervisors' labor union would
represent conflicting interests, a local supervisors' union should not
be allowed to affiliate with the national federation of unions of rank-
and-file employees where that federation actively participates in the
union activity within the company. 30 Thus, the limitation is not
confined to a case of supervisors wanting to join a rank-and-file
union. The prohibition extends to a supervisors' local union applying
for membership in a national federation the members of which
include local unions of rank-and-file employees. 31 In De La Salle
University Medical Center and College of Medicine v. Laguesma, we
reiterated the rule that for the prohibition to apply, it is not enough
that the supervisory union and the rank-and-file union are affiliated
with a single federation. In addition, the supervisors must have
direct authority over the rank-and-file employees. 32
In the instant case, the national federations that exist as separate
entities to which the rank-and-file and supervisory unions are
separately affiliated with, do have a common set of officers. In
addition, APSOTEU, the supervisory federation, actively participates
in the CSBTI-SU while ALU, the rank-and-file federation, actively
participates in the CSBTI-RFU, giving occasion to possible conflicts
of interest among the common officers of the federation of rank-
and-file and the federation of supervisory unions. For as long as
they are affiliated with the APSOTEU and ALU, the supervisory and
rank-and-file unions both do not meet the criteria to attain the
status of legitimate labor organizations, and thus could not
separately petition for certification elections.
The purpose of affiliation of the local unions into a common
enterprise is to increase the collective bargaining power in respect
of the terms and conditions of labor. 33 When there is commingling
of officers of a rank-and-file union with a supervisory union, the
constitutional policy on labor is circumvented. Labor organizations
should ensure the freedom of employees to organize themselves for
the purpose of leveling the bargaining process but also to ensure
the freedom of workingmen and to keep open the corridor of
opportunity to enable them to do it for themselves. EIAScH
WHEREFORE, the petition is GRANTED. The Court of Appeals'
Decision dated August 31, 2001, in CA-G.R. SP No. 54128 and the
Resolution dated February 5, 2003 are SET ASIDE. The decision of
the Med-Arbiter is hereby AFFIRMED. SO ORDERED. 

 THIRD DIVISION
[G.R. No. 162025. August 3, 2010.]
TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA
BREWERY, petitioner, vs. ASIA BREWERY, INC., respondent.
DECISION
VILLARAMA, JR., J p:
For resolution is an appeal by certiorari filed by petitioner under
Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing
the Decision 1 dated November 22, 2002 and Resolution 2 dated
January 28, 2004 rendered by the Court of Appeals (CA) in CA-G.R.
SP No. 55578, granting the petition of respondent company and
reversing the Voluntary Arbitrator's Decision 3 dated October 14,
1999.
The facts are:
Respondent Asia Brewery, Inc. (ABI) is engaged in the
manufacture, sale and distribution of beer, shandy, bottled water
and glass products. ABI entered into a Collective Bargaining
Agreement (CBA), 4 effective for five (5) years from August 1,
1997 to July 31, 2002, with Bisig at Lakas ng mga Manggagawa sa
Asia-Independent (BLMA-INDEPENDENT), the exclusive bargaining
representative of ABI's rank-and-file employees. On October 3,
2000, ABI and BLMA-INDEPENDENT signed a renegotiated CBA
effective from August 1, 2000 to 31 July 2003. 5
Article I of the CBA defined the scope of the bargaining unit, as
follows:
Section 1. Recognition. — The COMPANY recognizes the UNION as
the sole and exclusive bargaining representative of all the regular
rank-and-file daily paid employees within the scope of the
appropriate bargaining unit with respect to rates of pay, hours of
work and other terms and conditions of employment. The UNION
shall not represent or accept for membership employees
outside the scope of the bargaining unit herein defined.
Section 2. Bargaining Unit. — The bargaining unit shall be
comprised of all regular rank-and-file daily-paid employees of the
COMPANY. However, the following jobs/positions as herein defined
shall be excluded from the bargaining unit, to wit: ADCIca
1. Managers
2. Assistant Managers
3. Section Heads
4. Supervisors
5. Superintendents
6. Confidential and Executive Secretaries
7. Personnel, Accounting and Marketing Staff
8. Communications Personnel
9. Probationary Employees
10. Security and Fire Brigade Personnel
11. Monthly Employees
12. Purchasing and Quality Control Staff 6 [EMPHASIS SUPPLIED.]
Subsequently, a dispute arose when ABI's management stopped
deducting union dues from eighty-one (81) employees, believing
that their membership in BLMA-INDEPENDENT violated the CBA.
Eighteen (18) of these affected employees are QA Sampling
Inspectors/Inspectresses and Machine Gauge Technician who
formed part of the Quality Control Staff. Twenty (20) checkers are
assigned at the Materials Department of the Administration
Division, Full Goods Department of the Brewery Division and
Packaging Division. The rest are secretaries/clerks directly under
their respective division managers. 7
BLMA-INDEPENDENT claimed that ABI's actions restrained the
employees' right to self-organization and brought the matter to the
grievance machinery. As the parties failed to amicably settle the
controversy, BLMA-INDEPENDENT lodged a complaint before the
National Conciliation and Mediation Board (NCMB). The parties
eventually agreed to submit the case for arbitration to resolve the
issue of "[w]hether or not there is restraint to employees in the
exercise of their right to self-organization." 8
In his Decision, Voluntary Arbitrator Bienvenido Devera sustained
the BLMA-INDEPENDENT after finding that the records submitted by
ABI showed that the positions of the subject employees qualify
under the rank-and-file category because their functions are merely
routinary and clerical. He noted that the positions occupied by the
checkers and secretaries/clerks in the different divisions are not
managerial or supervisory, as evident from the duties and
responsibilities assigned to them. With respect to QA Sampling
Inspectors/Inspectresses and Machine Gauge Technician, he ruled
that ABI failed to establish with sufficient clarity their basic
functions as to consider them Quality Control Staff who were
excluded from the coverage of the CBA. Accordingly, the subject
employees were declared eligible for inclusion within the bargaining
unit represented by BLMA-INDEPENDENT. 9
On appeal, the CA reversed the Voluntary Arbitrator, ruling that:
WHEREFORE, foregoing premises considered, the questioned
decision of the Honorable Voluntary Arbitrator Bienvenido De Vera
is hereby REVERSED and SET ASIDE, and A NEW ONE ENTERED
DECLARING THAT: DHEACI
a) the 81 employees are excluded from and are not eligible for
inclusion in the bargaining unit as defined in Section 2, Article I of
the CBA;
b) the 81 employees cannot validly become members of respondent
and/or if already members, that their membership is violative of
the CBA and that they should disaffiliate from respondent; and
c) petitioner has not committed any act that restrained or tended to
restrain its employees in the exercise of their right to self-
organization.
NO COSTS.
SO ORDERED. 10
BLMA-INDEPENDENT filed a motion for reconsideration. In the
meantime, a certification election was held on August 10, 2002
wherein petitioner Tunay na Pagkakaisa ng Manggagawa sa Asia
(TPMA) won. As the incumbent bargaining representative of ABI's
rank-and-file employees claiming interest in the outcome of the
case, petitioner filed with the CA an omnibus motion for
reconsideration of the decision and intervention, with attached
petition signed by the union officers. 11 Both motions were denied
by the CA. 12
The petition is anchored on the following grounds:
(1)
THE COURT OF APPEALS ERRED IN RULING THAT THE 81
EMPLOYEES ARE EXCLUDED FROM AND ARE NOT ELIGIBLE FOR
INCLUSION IN THE BARGAINING UNIT AS DEFINED IN SECTION 2,
ARTICLE 1 OF THE CBA[;]
(2)
THE COURT OF APPEALS ERRED IN HOLDING THAT THE 81
EMPLOYEES CANNOT VALIDLY BECOME UNION MEMBERS, THAT
THEIR MEMBERSHIP IS VIOLATIVE OF THE CBA AND THAT THEY
SHOULD DISAFFILIATE FROM RESPONDENT;
(3)
THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT
PETITIONER (NOW PRIVATE RESPONDENT) HAS NOT COMMITTED
ANY ACT THAT RESTRAINED OR TENDED TO RESTRAIN ITS
EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO SELF-
ORGANIZATION. 13
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. 14 Confidential employees are thus
excluded from the rank-and-file bargaining unit. The rationale for
their separate category and disqualification to join any labor
organization is similar to the inhibition for managerial employees
because if allowed to be affiliated with a Union, the latter might not
be assured of their loyalty in view of evident conflict of interests
and the Union can also become company-denominated with the
presence of managerial employees in the Union membership. 15
Having access to confidential information, confidential employees
may also become the source of undue advantage. Said employees
may act as a spy or spies of either party to a collective bargaining
agreement. 16 AHDcCT
In Philips Industrial Development, Inc. v. NLRC, 17 this Court held
that petitioner's "division secretaries, all Staff of General
Management, Personnel and Industrial Relations Department,
Secretaries of Audit, EDP and Financial Systems" are confidential
employees not included within the rank-and-file bargaining unit. 18
Earlier, in Pier 8 Arrastre & Stevedoring Services, Inc. v. Roldan-
Confesor, 19 we declared that legal secretaries who 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, fall under the category of
confidential employees and hence excluded from the bargaining
unit composed of rank-and-file employees. 20
Also considered having access to "vital labor information" are the
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. 21
In the present case, the CBA expressly excluded "Confidential and
Executive Secretaries" from the rank-and-file bargaining unit, for
which reason ABI seeks their disaffiliation from petitioner.
Petitioner, however, maintains that except for Daisy Laloon, Evelyn
Mabilangan and Lennie Saguan who had been promoted to monthly
paid positions, the following secretaries/clerks are deemed included
among the rank-and-file employees of ABI: 22
NAME Mr. Andres G. Co
DEPARTMENT 6.
IMMEDIATE SUPERIOR Briones, Catalina P.
Materials
C1 ADMIN DIVISION Mr. Andres G. Co
7.
Caralipio, Juanita P.
1. Materials
Angeles, Cristina C. Mr. Andres G. Co
Transportation 8.
Mr. Melito K. Tan Elmido, Ma. Rebecca S.
2. Materials
Barraquio, Carina P. Mr. Andres G. Co
Transportation 9.
Mr. Melito K. Tan Giron, Laura P.
3. Materials
Cabalo, Marivic B. Mr. Andres G. Co
Transportation 10.
Mr. Melito K. Tan Mane, Edna A.
4. Materials
Fameronag, Leodigario C. Mr. Andres G. Co
Transportation xxx xxx xxx
Mr. Melito K. Tan
1. C2 BREWERY DIVISION
Abalos, Andrea A.
Materials
Mr. Andres G. Co 1.
2. Laloon, Daisy S.
Algire, Juvy L. Brewhouse
Materials Mr. William Tan
Mr. Andres G. Co
3.
Anoñuevo, Shirley P.
Materials
Mr. Andres G. Co 1.
4. Arabit, Myrna F.
Aviso, Rosita S. Bottling Production
Materials Mr. Julius Palmares
Mr. Andres G. Co 2.
5. Burgos, Adelaida D.
Barachina, Pauline C. Bottling Production
Materials Mr. Julius Palmares
3.
Menil, Emmanuel S.
Bottling Production 1.
Mr. Julius Palmares Alcoran, Simeon A.
4. Full Goods
Nevalga, Marcelo G. Mr. Tsoi Wah Tung
Bottling Production 2.
Mr. Julius Palmares ACaDTH Cervantes, Ma. Sherley Y.
Full Goods
Mr. Tsoi Wah Tung
3.
Diongco, Ma. Teresa M.
1. Full Goods
Mapola, Ma. Esraliza T. Mr. Tsoi Wah Tung
Bottling Maintenance 4.
Mr. Ernesto Ang Mabilangan, Evelyn M.
2. Full Goods
Velez, Carmelito A. Mr. Tsoi Wah Tung
Bottling Maintenance 5.
Mr. Ernesto Ang Rivera, Aurora M.
Full Goods
Mr. Tsoi Wah Tung
6.
Salandanan, Nancy G.
1. Full Goods
Bordamonte, Rhumela D. Mr. Tsoi Wah Tung
Bottled Water
Mr. Faustino Tetonche
2.
Deauna, Edna R.
Bottled Water 1.
Mr. Faustino Tetonche Magbag, Ma. Corazon C.
3. Tank Farm/
Punongbayan, Marylou F. Mr. Manuel Yu Liat
Bottled Water
Mr. Faustino Tetonche
4. Cella Services
Saguan, Lennie Y.
Bottled Water 1.
Mr. Faustino Tetonche Capiroso, Francisca A.
Quality Assurance
Ms. Regina Mirasol
 Castillo, Ma. Riza R.
GP Production
Mr. Tsai Chen Chih
5.
1. Lamadrid, Susana C.
Alconaba, Elvira C. GP Production
Engineering Mr. Robert Bautista
Mr. Clemente Wong 6.
2. Mendoza, Jennifer L.
Bustillo, Bernardita E. GP Technical
Electrical Mr. Mel Oña
Mr. Jorge Villarosa As can be gleaned from the above listing, it is rather curious that
3. there would be several secretaries/clerks for just one (1)
Catindig, Ruel A. department/division performing tasks which are mostly routine and
Civil Works clerical. Respondent insisted they fall under the "Confidential and
Mr. Roger Giron Executive Secretaries" expressly excluded by the CBA from the
4. rank-and-file bargaining unit. However, perusal of the job
Sison, Claudia B. descriptions of these secretaries/clerks reveals that their assigned
Utilities duties and responsibilities involve routine activities of recording and
Mr. Venancio Alconaba monitoring, and other paper works for their respective departments
xxx xxx xxx while secretarial tasks such as receiving telephone calls and filing of
office correspondence appear to have been commonly imposed as
C3 PACKAGING DIVISION additional duties. 23 Respondent failed to indicate who among
these numerous secretaries/clerks have access to confidential data
relating to management policies that could give rise to potential
conflict of interest with their Union membership. Clearly, the
rationale under our previous rulings for the exclusion of executive
secretaries or division secretaries would have little or no
significance considering the lack of or very limited access to
1. confidential information of these secretaries/clerks. It is not even
Alvarez, Ma. Luningning L. farfetched that the job category may exist only on paper since they
GP Administration are all daily-paid workers. Quite understandably, petitioner had
Ms. Susan Bella earlier expressed the view that the positions were just being
2. "reclassified" as these employees actually discharged routine
Cañiza, Alma A. functions. ASTIED
GP Technical We thus hold that the secretaries/clerks, numbering about forty
Mr. Chen Tsai Tyan (40), are rank-and-file employees and not confidential employees.
3. With respect to the Sampling Inspectors/Inspectresses and the
Cantalejo, Aida S. Gauge Machine Technician, there seems no dispute that they form
GP Engineering part of the Quality Control Staff who, under the express terms of
Mr. Noel Fernandez the CBA, fall under a distinct category. But we disagree with
4. respondent's contention that the twenty (20) checkers are similarly
confidential employees being "quality control staff" entrusted with
the handling and custody of company properties and sensitive
information.
Again, the job descriptions of these checkers assigned in the
storeroom section of the Materials Department, finishing section of
the Packaging Department, and the decorating and glass sections of
the Production Department plainly showed that they perform
routine and mechanical tasks preparatory to the delivery of the
finished products. 24 While it may be argued that quality control
extends to post-production phase — proper packaging of the
finished products — no evidence was presented by the respondent
to prove that these daily-paid checkers actually form part of the
company's Quality Control Staff who as such "were exposed to
sensitive, vital and confidential information about [company's]
products" or "have knowledge of mixtures of the products, their
defects, and even their formulas" which are considered 'trade
secrets'. Such allegations of respondent must be supported by
evidence. 25
Consequently, we hold that the twenty (20) checkers may not be
considered confidential employees under the category of Quality
Control Staff who were expressly excluded from the CBA of the
rank-and-file bargaining unit.
Confidential employees are defined as 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.
The two (2) criteria are cumulative, and both must be met if an
employee is to be considered a confidential employee — that is, the
confidential relationship must exist between the employee and his
supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations. The exclusion from
bargaining units of employees who, in the normal course of their
duties, become aware of management policies relating to labor
relations is a principal objective sought to be accomplished by the
"confidential employee rule." 26 There is no showing in this case
that the secretaries/clerks and checkers assisted or acted in a
confidential capacity to managerial employees and obtained
confidential information relating to labor relations policies. And
even assuming that they had exposure to internal business
operations of the company, respondent claimed, this is not per se
ground for their exclusion in the bargaining unit of the daily-paid
rank-and-file employees. 27
Not being confidential employees, the secretaries/clerks and
checkers are not disqualified from membership in the Union of
respondent's rank-and-file employees. Petitioner argues that
respondent's act of unilaterally stopping the deduction of union
dues from these employees constitutes unfair labor practice as it
"restrained" the workers' exercise of their right to self-organization,
as provided in Article 248 (a) of the Labor Code. AEcTaS
Unfair labor practice refers to "acts that violate the workers' right to
organize." The prohibited acts are related to the workers' right to
self organization and to the observance of a CBA. For a charge of
unfair labor practice to prosper, it must be shown that ABI was
motivated by ill will, "bad faith, or fraud, or was oppressive to labor,
or done in a manner contrary to morals, good customs, or public
policy, and, of course, that social humiliation, wounded feelings or
grave anxiety resulted . . ." 28 from ABI's act in discontinuing the
union dues deduction from those employees it believed were
excluded by the CBA. Considering that the herein dispute arose
from a simple disagreement in the interpretation of the CBA
provision on excluded employees from the bargaining unit,
respondent cannot be said to have committed unfair labor practice
that restrained its employees in the exercise of their right to self-
organization, nor have thereby demonstrated an anti-union stance.
WHEREFORE, the petition is GRANTED. The Decision dated
November 22, 2002 and Resolution dated January 28, 2004 of the
Court of Appeals in CA-G.R. SP No. 55578 are hereby REVERSED
and SET ASIDE. The checkers and secretaries/clerks of
respondent company are hereby declared rank-and-file employees
who are eligible to join the Union of the rank-and-file employees.
No costs.
SO ORDERED.
Carpio Morales, Brion, Bersamin and Abad, * JJ., concur.


 THIRD DIVISION
SAN MIGUEL FOODS, INCORPORATED v. SAN MIGUEL
CORPORATION SUPERVISORS and EXEMPT UNION,
Respondent.
G.R. No. 146206
DECISION
PERALTA, J.:
The issues in the present case, relating to the inclusion of
employees in supervisor levels 3 and 4 and the exempt employees
in the proposed bargaining unit, thereby allowing their participation
in the certification election; the application of the community or
mutuality of interests test; and the determination of the employees
who belong to the category of confidential employees, are not
novel.
In G.R. No. 110399, entitled San Miguel Corporation Supervisors
and Exempt Union v. Laguesma,[1] the Court held that even if they
handle confidential data regarding technical and internal business
operations, supervisory employees 3 and 4 and the exempt
employees of petitioner San Miguel Foods, Inc. (SMFI) are not to be
considered confidential employees, because the same do not
pertain to labor relations, particularly, negotiation and settlement of
grievances. Consequently, they were allowed to form an
appropriate bargaining unit for the purpose of collective bargaining.
The Court also declared that the employees belonging to the three
different plants of San Miguel Corporation Magnolia Poultry Products
Plants in Cabuyao, San Fernando, and Otis, having community or
mutuality of interests, constitute a single bargaining unit. They
perform work of the same nature, receive the same wages and
compensation, and most importantly, share a common stake in
concerted activities. It was immaterial that the three plants have
different locations as they did not impede the operations of a single
bargaining representative.[2]
Pursuant to the Court's decision in G.R. No. 110399, the
Department of Labor and Employment National Capital Region
(DOLE-NCR) conducted pre-election conferences.[3] However, there
was a discrepancy in the list of eligible voters, i.e., petitioner
submitted a list of 23 employees for the San Fernando plant and 33
for the Cabuyao plant, while respondent listed 60 and 82,
respectively.[4]
On August 31, 1998, Med-Arbiter Agatha Ann L. Daquigan issued
an Order[5] directing Election Officer Cynthia Tolentino to proceed
with the conduct of certification election in accordance with Section
2, Rule XII of Department Order No. 9.
On September 30, 1998, a certification election was conducted and
it yielded the following results,[6] thus:
Cabuyao San Fernando Total
Plant Plant
Yes 23 23 46
No 0 0 0
Spoiled 2 0 2
Segregated 41 35 76
Total Votes
Cast 66 58 124
On the date of the election, September 30, 1998, petitioner filed
the Omnibus Objections and Challenge to Voters,[7] questioning the
eligibility to vote by some of its employees on the grounds that
some employees do not belong to the bargaining unit which
respondent seeks to represent or that there is no existence of
employer-employee relationship with petitioner. Specifically, it
argued that certain employees should not be allowed to vote as
they are: (1) confidential employees; (2) employees assigned to
the live chicken operations, which are not covered by the
bargaining unit; (3) employees whose job grade is level 4, but are
performing managerial work and scheduled to be promoted; (4)
employees who belong to the Barrio Ugong plant; (5) non-SMFI
employees; and (6) employees who are members of other unions.
On October 21, 1998, the Med-Arbiter issued an Order directing
respondent to submit proof showing that the employees in the
submitted list are covered by the original petition for certification
election and belong to the bargaining unit it seeks to represent and,
likewise, directing petitioner to substantiate the allegations
contained in its Omnibus Objections and Challenge to Voters.[8]
In compliance thereto, respondent averred that (1) the bargaining
unit contemplated in the original petition is the Poultry Division of
San Miguel Corporation, now known as San Miguel Foods, Inc.; (2)
it covered the operations in Calamba, Laguna, Cavite, and Batangas
and its home base is either in Cabuyao, Laguna or San Fernando,
Pampanga; and (3) it submitted individual and separate
declarations of the employees whose votes were challenged in the
election.[9]
Adding the results to the number of votes canvassed during the
September 30, 1998 certification election, the final tally showed
that: number of eligible voters 149; number of valid votes cast
121; number of spoiled ballots - 3; total number of votes cast 124,
with 118 (i.e., 46 + 72 = 118 ) Yes votes and 3 No votes.[10]
The Med-Arbiter issued the Resolution[11] dated February 17, 1999
directing the parties to appear before the Election Officer of the
Labor Relations Division on March 9, 1999, 10:00 a.m., for the
opening of the segregated ballots. Thereafter, on April 12, 1999,
the segregated ballots were opened, showing that out of the 76
segregated
votes, 72 were cast for Yes and 3 for No, with one spoiled ballot.[12]
Based on the results, the Med-Arbiter issued the Order[13] dated
April 13, 1999, stating that since the Yes vote received 97% of the
valid votes cast, respondent is certified to be the exclusive
bargaining agent of the supervisors and exempt employees of
petitioner's Magnolia Poultry Products Plants in Cabuyao, San
Fernando, and Otis.
On appeal, the then Acting DOLE Undersecretary, in the
Resolution[14] dated July 30, 1999, in OS-A-2-70-91 (NCR-OD-
M-9010-017), affirmed the Order dated April 13, 1999, with
modification that George C. Matias, Alma Maria M. Lozano,
Joannabel T. Delos Reyes, and Marilyn G. Pajaron be excluded from
the bargaining unit which respondent seeks to represent. She
opined that the challenged voters should be excluded from the
bargaining unit, because Matias and Lozano are members of
Magnolia Poultry Processing Plants Monthly Employees Union, while
Delos Reyes and Pajaron are employees of San Miguel Corporation,
which is a separate and distinct entity from petitioner.
Petitioners Partial Motion for Reconsideration[15] dated August 14,
1999 was denied by the then Acting DOLE Undersecretary in the
Order[16] dated August 27, 1999.
In the Decision[17] dated April 28, 2000, in CA-G.R. SP No. 55510,
entitled San Miguel Foods, Inc. v. The Honorable Office of the
Secretary of Labor, Bureau of Labor Relations, and San Miguel
Corporation Supervisors and Exempt Union, the Court of Appeals
(CA) affirmed with modification the Resolution dated July 30, 1999
of the DOLE Undersecretary, stating that those holding the
positions of Human Resource Assistant and Personnel Assistant are
excluded from the bargaining unit.
Petitioners Motion for Partial Reconsideration[18] dated May 23,
2000 was denied by the CA in the Resolution[19] dated November
28, 2000.
Hence, petitioner filed this present petition raising the following
issues:
I.
WHETHER THE COURT OF APPEALS DEPARTED FROM
JURISPRUDENCE WHEN IT EXPANDED THE SCOPE OF THE
BARGAINING UNIT DEFINED BY THIS COURT'S RULING IN G.R. NO.
110399.
II.
WHETHER THE COURT OF APPEALS DEPARTED FROM
JURISPRUDENCE - SPECIFICALLY, THIS COURT'S DEFINITION OF A
CONFIDENTIAL EMPLOYEE - WHEN IT RULED FOR THE INCLUSION
OF THE PAYROLL MASTER POSITION IN THE BARGAINING UNIT.
III.
WHETHER THIS PETITION IS A REHASH OR A RESURRECTION OF
THE ISSUES RAISED IN G.R. NO. 110399, AS ARGUED BY PRIVATE
RESPONDENT.
Petitioner contends that with the Court's ruling in G.R. No.
110399[20] identifying the specific employees who can participate in
the certification election, i.e., the supervisors (levels 1 to 4) and
exempt employees of San Miguel Poultry Products Plants in
Cabuyao, San Fernando, and Otis, the CA erred in expanding the
scope of the bargaining unit so as to include employees who do not
belong to or who are not based in its Cabuyao or San Fernando
plants. It also alleges that the employees of the Cabuyao, San
Fernando, and Otis plants of petitioners predecessor, San Miguel
Corporation, as stated in G.R. No. 110399, were engaged in
dressed chicken processing, i.e., handling and packaging of chicken
meat, while the new bargaining unit, as defined by the CA in the
present case, includes employees engaged in live chicken
operations, i.e., those who breed chicks and grow chickens.
Respondent counters that petitioners proposed exclusion of certain
employees from the bargaining unit was a rehashed issue which
was already settled in G.R. No. 110399. It maintains that the issue
of union membership coverage should no longer be raised as a
certification election already took place on September 30, 1998,
wherein respondent won with 97% votes.
Petitioners contentions are erroneous. In G.R. No. 110399, the
Court explained that the employees of San Miguel Corporation
Magnolia Poultry Products Plants of Cabuyao, San Fernando, and
Otis constitute a single bargaining unit, which is not contrary to the
one-company, one-union policy. An appropriate bargaining unit is
defined as a group of employees of a given employer, comprised of
all or less than all of the entire body of employees, which the
collective interest of all the employees, consistent with equity to the
employer, indicate to be best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining provisions
of the law.[21]
In National Association of Free Trade Unions v. Mainit Lumber
Development Company Workers Union United Lumber and General
Workers of the Phils,[22] the Court, taking into account the
community or mutuality of interests test, ordered the formation of
a single bargaining unit consisting of the Sawmill Division in Butuan
City and the Logging Division in Zapanta Valley, Kitcharao, Agusan
[Del] Norte of the Mainit Lumber Development Company. It held
that while the existence of a bargaining history is a factor that may
be reckoned with in determining the appropriate bargaining unit,
the same is not decisive or conclusive. Other factors must be
considered. The test of grouping is community or mutuality of
interest. This is so because the basic test of an asserted bargaining
units acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of
their collective bargaining rights.[23] Certainly, there is a mutuality
of interest among the employees of the Sawmill Division and the
Logging Division. Their functions mesh with one another. One group
needs the other in the same way that the company needs them
both. There may be differences as to the nature of their individual
assignments, but the distinctions are not enough to warrant the
formation of a separate bargaining unit.[24]
Thus, applying the ruling to the present case, the Court affirms the
finding of the CA that there should be only one bargaining unit for
the employees in Cabuyao, San Fernando, and Otis[25] of Magnolia
Poultry Products Plant involved in dressed chicken processing and
Magnolia Poultry Farms engaged in live chicken operations. Certain
factors, such as specific line of work, working conditions, location of
work, mode of compensation, and other relevant conditions do not
affect or impede their commonality of interest. Although they seem
separate and distinct from each other, the specific tasks of each
division are actually interrelated and there exists mutuality of
interests which warrants the formation of a single bargaining unit.
Petitioner asserts that the CA erred in not excluding the position of
Payroll Master in the definition of a confidential employee and,
thus, prays that the said position and all other positions with access
to salary and compensation data be excluded from the bargaining
unit.
This argument must fail. Confidential employees are defined as
those who (1) assist or act in a confidential capacity, in regard (2)
to persons who formulate, determine, and effectuate management
policies in the field of labor relations.[26] The two criteria are
cumulative, and both must be met if an employee is to be
considered a confidential employee - that is, the confidential
relationship must exist between the employee and his supervisor,
and the supervisor must handle the prescribed responsibilities
relating to labor relations. The exclusion from bargaining units of
employees who, in the normal course of their duties, become aware
of management policies relating to labor relations is a principal
objective sought to be accomplished by the confidential employee
rule.[27]
A confidential employee is one entrusted with confidence on
delicate, or with the custody, handling or care and protection of the
employers property.[28] Confidential employees, such as accounting
personnel, should be excluded from the bargaining unit, as their
access to confidential information may become the source of undue
advantage.[29] However, such fact does not apply to the position of
Payroll Master and the whole gamut of employees who, as
perceived by petitioner, has access to salary and compensation
data. The CA correctly held that the position of Payroll Master does
not involve dealing with confidential labor relations information in
the course of the performance of his functions. Since the nature of
his work does not pertain to company rules and regulations and
confidential labor relations, it follows that he cannot be excluded
from the subject bargaining unit.
Corollarily, although Article 245[30] 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.[31] Confidential employees are thus
excluded from the rank-and-file bargaining unit. The rationale for
their separate category and disqualification to join any labor
organization is similar to the inhibition for managerial employees,
because if allowed to be affiliated with a union, the latter might not
be assured of their loyalty in view of evident conflict of interests
and the union can also become company-denominated with the
presence of managerial employees in the union membership.[32]
Having access to confidential information, confidential employees
may also become the source of undue advantage. Said employees
may act as a spy or spies of either party to a collective bargaining
agreement.[33]
In this regard, the CA correctly ruled that the positions of Human
Resource Assistant and Personnel Assistant belong to the category
of confidential employees and, hence, are excluded from the
bargaining unit, considering their respective positions and job
descriptions. As Human Resource Assistant,[34] the scope of ones
work necessarily involves labor relations, recruitment and selection
of employees, access to employees' personal files and
compensation package, and human resource management. As
regards a Personnel Assistant,[35] one's work includes the recording
of minutes for management during collective bargaining
negotiations, assistance to management during grievance meetings
and administrative investigations, and securing legal advice for
labor issues from the petitioners team of lawyers, and
implementation of company programs. Therefore, in the discharge
of their functions, both gain access to vital labor relations
information which outrightly disqualifies them from union
membership.
The proceedings for certification election are quasi-judicial in nature
and, therefore, decisions rendered in such proceedings can attain
finality.[36] Applying the doctrine of res judicata, the issue in the
present case pertaining to the coverage of the employees who
would constitute the bargaining unit is now a foregone conclusion.
It bears stressing that a certification election is the sole concern of
the workers; hence, an employer lacks the personality to dispute
the same. The general rule is that an employer has no standing to
question the process of certification election, since this is the sole
concern of the workers.[37] Law and policy demand that employers
take a strict, hands-off stance in certification elections. The
bargaining representative of employees should be chosen free from
any extraneous influence of management. A labor bargaining
representative, to be effective, must owe its loyalty to the
employees alone and to no other.[38] The only exception is where
the employer itself has to file the petition pursuant to Article 258[39]
of the Labor Code because of a request to bargain collectively.[40]
With the foregoing disquisition, the Court writes finis to the issues
raised so as to forestall future suits of similar nature.
WHEREFORE, the petition is DENIED. The Decision dated April 28,
2000 and Resolution dated November 28, 2000 of the Court of
Appeals, in CA-G.R. SP No. 55510, which affirmed with modification
the Resolutions dated July 30, 1999 and August 27, 1999 of the
Secretary of Labor, are AFFIRMED.
SO ORDERED.

 FIRST DIVISION
[G.R. No. 172132. July 23, 2014.]
THE HERITAGE HOTEL MANILA, ACTING THROUGH ITS
OWNER, GRAND PLAZA HOTEL CORPORATION, petitioner, vs.
SECRETARY OF LABOR AND EMPLOYMENT; MED-ARBITER
TOMAS F. FALCONITIN; and NATIONAL UNION OF WORKERS
IN THE HOTEL, RESTAURANT and ALLIED INDUSTRIES-
HERITAGE HOTEL MANILA SUPERVISORS CHAPTER
(NUWHRAIN-HHMSC), respondents.
DECISION
BERSAMIN, J p:
Although case law has repeatedly held that the employer was but a
bystander in respect of the conduct of the certification election to
decide the labor organization to represent the employees in the
bargaining unit, and that the pendency of the cancellation of union
registration brought against the labor organization applying for the
certification election should not prevent the conduct of the
certification election, this review has to look again at the seemingly
never-ending quest of the petitioner employer to stop the conduct
of the certification election on the ground of the pendency of
proceedings to cancel the labor organization's registration it had
initiated on the ground that the membership of the labor
organization was a mixture of managerial and supervisory
employees with the rank-and-file employees.
Under review at the instance of the employer is the decision
promulgated on December 13, 2005, 1 whereby the Court of
Appeals (CA) dismissed its petition for certiorari to assail the
resolutions of respondent Secretary of Labor and Employment
sanctioning the conduct of the certification election initiated by
respondent labor organization. 2
Antecedents
On October 11, 1995, respondent National Union of Workers in
Hotel Restaurant and Allied Industries-Heritage Hotel Manila
Supervisors Chapter (NUWHRAIN-HHMSC) filed a petition for
certification election, 3 seeking to represent all the supervisory
employees of Heritage Hotel Manila. The petitioner filed its
opposition, but the opposition was deemed denied on February 14,
1996 when Med-Arbiter Napoleon V. Fernando issued his order for
the conduct of the certification election.
The petitioner appealed the order of Med-Arbiter Fernando, but the
appeal was also denied. A pre-election conference was then
scheduled. On February 20, 1998, however, the pre-election
conference was suspended until further notice because of the
repeated non-appearance of NUWHRAIN-HHMSC. 4 SEcAIC
On January 29, 2000, NUWHRAIN-HHMSC moved for the conduct of
the pre-election conference. The petitioner primarily filed its
comment on the list of employees submitted by NUWHRAIN-
HHMSC, and simultaneously sought the exclusion of some from the
list of employees for occupying either confidential or managerial
positions. 5 The petitioner filed a motion to dismiss on April 17,
2000, 6 raising the prolonged lack of interest of NUWHRAIN-
HHMSC to pursue its petition for certification election.
On May 12, 2000, the petitioner filed a petition for the cancellation
of NUWHRAIN-HHMSC's registration as a labor union for failing to
submit its annual financial reports and an updated list of members
as required by Article 238 and Article 239 of the Labor Code,
docketed as Case No. NCR-OD-0005-004-IRD entitled The Heritage
Hotel Manila, acting through its owner, Grand Plaza Hotel
Corporation v. National Union of Workers in the Hotel, Restaurant
and Allied Industries-Heritage Hotel Manila Supervisors Chapter
(NUWHRAIN-HHSMC). 7 It filed another motion on June 1, 2000 to
seek either the dismissal or the suspension of the proceedings on
the basis of its pending petition for the cancellation of union
registration. 8
The following day, however, the Department of Labor and
Employment (DOLE) issued a notice scheduling the certification
elections on June 23, 2000. 9
Dissatisfied, the petitioner commenced in the CA on June 14, 2000
a special civil action for certiorari, 10 alleging that the DOLE
gravely abused its discretion in not suspending the certification
election proceedings. On June 23, 2000, the CA dismissed the
petition for certiorari for non-exhaustion of administrative
remedies. 11
The certification election proceeded as scheduled, and NUWHRAIN-
HHMSC obtained the majority vote of the bargaining unit. 12 The
petitioner filed a protest (with motion to defer the certification of
the election results and the winner), 13 insisting on the illegitimacy
of NUWHRAIN-HHMSC.
Ruling of the Med-Arbiter
On January 26, 2001, Med-Arbiter Tomas F. Falconitin issued an
order, 14 ruling that the petition for the cancellation of union
registration was not a bar to the holding of the certification
election, and disposing thusly: aTCAcI
WHEREFORE, premises considered, respondent employer/
protestant's protest with motion to defer certification of results and
winner is hereby dismissed for lack of merit.
Accordingly, this Office hereby certify pursuant to the rules that
petitioner/protestee, National Union of Workers in Hotels,
Restaurants and Allied Industries-Heritage Hotel Manila Supervisory
Chapter (NUWHRAIN-HHSMC) is the sole and exclusive bargaining
agent of all supervisory employees of the Heritage Hotel Manila
acting through its owner, Grand Plaza Hotel Corporation for
purposes of collective bargaining with respect to wages, and hours
of work and other terms and conditions of employment.
SO ORDERED.
The petitioner timely appealed to the DOLE Secretary claiming that:
(a) the membership of NUWHRAIN-HHMSC consisted of managerial,
confidential, and rank-and-file employees; (b) NUWHRAIN-HHMSC
failed to comply with the reportorial requirements; and (c) Med-
Arbiter Falconitin simply brushed aside serious questions on the
illegitimacy of NUWHRAIN-HHMSC. 15 It contended that a labor
union of mixed membership of supervisory and rank-and-file
employees had no legal right to petition for the certification election
pursuant to the pronouncements in Toyota Motor Philippines
Corporation v. Toyota Motor Philippines Corporation Labor Union 16
(Toyota Motor) and Dunlop Slazenger (Phils.) v. Secretary of Labor
and Employment 17 (Dunlop Slazenger).
Ruling of the DOLE Secretary
On August 21, 2002, then DOLE Secretary Patricia A. Sto. Tomas
issued a resolution denying the appeal, 18 and affirming the order
of Med-Arbiter Falconitin, viz.:
WHEREFORE, the appeal is DENIED. The order of the Med-Arbiter
dated 26 January 2001 is hereby AFFIRMED.
SO RESOLVED.
DOLE Secretary Sto. Tomas observed that the petitioner's reliance
on Toyota Motor and Dunlop Slazenger was misplaced because both
rulings were already overturned by SPI Technologies, Inc. v.
Department of Labor and Employment, 19 to the effect that once a
union acquired a legitimate status as a labor organization, it
continued as such until its certificate of registration was cancelled
or revoked in an independent action for cancellation.
The petitioner moved for reconsideration.
In denying the motion on October 21, 2002, the DOLE Secretary
declared that the mixture or co-mingling of employees in a union
was not a ground for dismissing a petition for the certification
election under Section 11, par. II, Rule XI of Department Order No.
9; that the appropriate remedy was to exclude the ineligible
employees from the bargaining unit during the inclusion-exclusion
proceedings; 20 that the dismissal of the petition for the
certification election based on the legitimacy of the petitioning
union would be inappropriate because it would effectively allow a
collateral attack against the union's legal personality; and that a
collateral attack against the personality of the labor organization
was prohibited under Section 5, Rule V of Department Order No. 9,
Series of 1997. 21
Upon denial of its motion for reconsideration, the petitioner
elevated the matter to the CA by petition for certiorari. 22
Ruling of the CA
On December 13, 2005, 23 the CA dismissed the petition for
certiorari, giving its following disquisition:
The petition for certiorari filed by the petitioner is, in essence, a
continuation of the debate on the relevance of the Toyota Motor,
Dunlop Slazenger and Progressive Development cases to the issues
raised.
Toyota Motor and Dunlop Slazenger are anchored on the provisions
of Article 245 of the Labor Code which prohibit managerial
employees from joining any labor union and permit supervisory
employees to form a separate union of their own. The language
naturally suggests that a labor organization cannot carry a mixture
of supervisory and rank-and-file employees. Thus, courts have held
that a union cannot become a legitimate labor union if it shelters
under its wing both types of employees. But there are elements of
an elliptical reasoning in the holding of these two cases that a
petition for certification election may not prosper until the
composition of the union is settled therein. Toyota Motor, in
particular, makes the blanket statement that a supervisory union
has no right to file a certification election for as long as it counts
rank-and-file employees among its ranks. More than four years
after Dunlop Slazenger, the Court clarified in Tagaytay Highlands
International Golf Club, Inc. vs. Tagaytay Highlands Employees
Union-PTGWO that while Article 245 prohibits supervisory
employees from joining a rank-and-file union, it does not provide
what the effect is if a rank-and-file union takes in supervisory
employees as members, or vice versa. Toyota Motor and Dunlop
Slazenger jump into an unnecessary conclusion when they foster
the notion that Article 245 carries with it the authorization to
inquire collaterally into the issue wherever it rears its ugly head.
Tagaytay Highlands proclaims, in the light of Department Order 9,
that after a certificate of registration is issued to a union, its legal
personality cannot be subject to a collateral attack. It may be
questioned only in an independent petition for cancellation. In fine,
Toyota and Dunlop Slazenger are a spent force. Since Tagaytay
Highlands was handed down after these two cases, it constitutes
the latest expression of the will of the Supreme Court and
supersedes or overturns previous rulings inconsistent with it. From
this perspective, it is needless to discuss whether SPI Technologies
as a mere resolution of the Court may prevail over a full-blown
decision that Toyota Motor or Dunlop Slazenger was. The ruling in
SPI Technologies has been echoed in Tagaytay Highlands, for which
reason it is with Tagaytay Highlands, not SPI Technologies, that the
petitioner must joust. EHCDSI
The fact that the cancellation proceeding has not yet been resolved
makes it obvious that the legal personality of the respondent union
is still very much in force. The DOLE has thus every reason to
proceed with the certification election and commits no grave abuse
of discretion in allowing it to prosper because the right to be
certified as collective bargaining agent is one of the legitimate
privileges of a registered union. It is for the petitioner to expedite
the cancellation case if it wants to put an end to the certification
case, but it cannot place the issue of the union's legitimacy in the
certification case, for that would be tantamount to making the
collateral attack the DOLE has staunchly argued to be
impermissible.
The reference made by the petitioner to another Progressive
Development case that it would be more prudent for the DOLE to
suspend the certification case until the issue of the legality of the
registration is resolved, has also been satisfactorily answered.
Section 11, Rule XI of Department Order 9 provides for the grounds
for the dismissal of a petition for certification election, and the
pendency of a petition for cancellation of union registration is not
one of them. Like Toyota Motor and Dunlop Slazenger, the second
Progressive case came before Department Order 9.
IN VIEW OF THE FOREGOING, the disputed resolutions of the
Secretary of Labor and Employment are AFFIRMED, and the petition
is DISMISSED.
SO ORDERED.
The petitioner sought reconsideration, 24 but its motion was
denied.
Issues
Hence, this appeal, with the petitioner insisting that:
I
THE COURT OF APPEALS ERRED IN RULING THAT TAGAYTAY
HIGHLANDS APPLIES TO THE CASE AT BAR
II
[THE HONORABLE COURT OF APPEALS] SERIOUSLY ERRED WHEN
IT DISREGARDED PROGRESSIVE DEVELOPMENT CORPORATION —
PIZZA HUT V. LAGUESMA WHICH HELD THAT IT WOULD BE MORE
PRUDENT TO SUSPEND THE CERTIFICATION CASE UNTIL THE
ISSUE OF THE LEGALITY OF THE REGISTRATION OF THE UNION IS
FINALLY RESOLVED
III
BECAUSE OF THE PASSAGE OF TIME, RESPONDENT UNION NO
LONGER POSSESSES THE MAJORITY STATUS SUCH THAT A NEW
CERTIFICATION ELECTION IS IN ORDER 25
The petitioner maintains that the ruling in Tagaytay Highlands
International Golf Club, Inc. v. Tagaytay Highlands Employees
Union-PTGWO 26 (Tagaytay Highlands) was inapplicable because it
involved the co-mingling of supervisory and rank-and-file
employees in one labor organization, while the issue here related to
the mixture of membership between two employee groups — one
vested with the right to self-organization (i.e., the rank-and-file and
supervisory employees), and the other deprived of such right (i.e.,
managerial and confidential employees); that suspension of the
certification election was appropriate because a finding of "illegal
mixture" of membership during a petition for the cancellation of
union registration determined whether or not the union had met the
20% representation requirement under Article 234 (c) of the Labor
Code; 27 and that in holding that mixed membership was not a
ground for canceling the union registration, except when such was
done through misrepresentation, false representation or fraud
under the circumstances enumerated in Article 239 (a) and (c) of
the Labor Code, the CA completely ignored the 20% requirement
under Article 234 (c) of the Labor Code.
The petitioner posits that the grounds for dismissing a petition for
the certification election under Section 11, Rule XI of Department
Order No. 9, Series of 1997, were not exclusive because the other
grounds available under the Rules of Court could be invoked; that
in Progressive Development Corporation v. Secretary, Department
of Labor and Employment, 28 the Court ruled that prudence could
justify the suspension of the certification election proceedings until
the issue of the legality of the union registration could be finally
resolved; that the non-submission of the annual financial
statements and the list of members in the period from 1996 to
1999 constituted a serious challenge to NUWHRAIN-HHMSC's right
to file its petition for the certification election; and that from the
time of the conduct of the certification election on June 23, 2000,
the composition of NUWHRAIN-HHMSC had substantially changed,
thereby necessitating another certification election to determine the
true will of the bargaining unit.
In short, should the petition for the cancellation of union
registration based on mixed membership of supervisors and
managers in a labor union, and the non-submission of reportorial
requirements to the DOLE justify the suspension of the proceedings
for the certification elections or even the denial of the petition for
the certification election?
Ruling
We deny the petition for review on certiorari.
Basic in the realm of labor union rights is that the certification
election is the sole concern of the workers, 29 and the employer is
deemed an intruder as far as the certification election is concerned.
30 Thus, the petitioner lacked the legal personality to assail the
proceedings for the certification election, 31 and should stand aside
as a mere bystander who could not oppose the petition, or even
appeal the Med-Arbiter's orders relative to the conduct of the
certification election. 32 As the Court has explained in Republic v.
Kawashima Textile Mfg., Philippines, Inc. 33 (Kawashima):
Except when it is requested to bargain collectively, an employer is a
mere bystander to any petition for certification election; such
proceeding is non-adversarial and merely investigative, for the
purpose thereof is to determine which organization will represent
the employees in their collective bargaining with the employer. The
choice of their representative is the exclusive concern of the
employees; the employer cannot have any partisan interest
therein; it cannot interfere with, much less oppose, the process by
filing a motion to dismiss or an appeal from it; not even a mere
allegation that some employees participating in a petition for
certification election are actually managerial employees will lend an
employer legal personality to block the certification election. The
employer's only right in the proceeding is to be notified or informed
thereof.
The petitioner's meddling in the conduct of the certification election
among its employees unduly gave rise to the suspicion that it
intended to establish a company union. 34 For that reason, the
challenges it posed against the certification election proceedings
were rightly denied.
Under the long established rule, too, the filing of the petition for the
cancellation of NUWHRAIN-HHMSC's registration should not bar the
conduct of the certification election. 35 In that respect, only a final
order for the cancellation of the registration would have prevented
NUWHRAIN-HHMSC from continuing to enjoy all the rights
conferred on it as a legitimate labor union, including the right to the
petition for the certification election. 36 This rule is now enshrined
in Article 238-A of the Labor Code, as amended by Republic Act No.
9481, 37 which reads:
Article 238-A. Effect of a Petition for Cancellation of Registration. —
A petition for cancellation of union registration shall not suspend
the proceedings for certification election nor shall it prevent the
filing of a petition for certification election.
xxx xxx xxx
Still, the petitioner assails the failure of NUWHRAIN-HHMSC to
submit its periodic financial reports and updated list of its members
pursuant to Article 238 and Article 239 of the Labor Code. It
contends that the serious challenges against the legitimacy of
NUWHRAIN-HHMSC as a union raised in the petition for the
cancellation of union registration should have cautioned the Med-
Arbiter against conducting the certification election.
The petitioner does not convince us.
In The Heritage Hotel Manila v. National Union of Workers in the
Hotel, Restaurant and Allied Industries-Heritage Hotel Manila
Supervisors Chapter (NUWHRAIN-HHMSC), 38 the Court declared
that the dismissal of the petition for the cancellation of the
registration of NUWHRAIN-HHMSC was proper when viewed against
the primordial right of the workers to self-organization, collective
bargaining negotiations and peaceful concerted actions, viz.:
xxx xxx xxx
[Articles 238 and 239 of the Labor Code] give the Regional Director
ample discretion in dealing with a petition for cancellation of a
union's registration, particularly, determining whether the union still
meets the requirements prescribed by law. It is sufficient to give
the Regional Director license to treat the late filing of required
documents as sufficient compliance with the requirements of the
law. After all, the law requires the labor organization to submit the
annual financial report and list of members in order to verify if it is
still viable and financially sustainable as an organization so as to
protect the employer and employees from fraudulent or fly-by-night
unions. With the submission of the required documents by
respondent, the purpose of the law has been achieved, though
belatedly.
We cannot ascribe abuse of discretion to the Regional Director and
the DOLE Secretary in denying the petition for cancellation of
respondent's registration. The union members and, in fact, all the
employees belonging to the appropriate bargaining unit should not
be deprived of a bargaining agent, merely because of the
negligence of the union officers who were responsible for the
submission of the documents to the BLR.
Labor authorities should, indeed, act with circumspection in treating
petitions for cancellation of union registration, lest they be accused
of interfering with union activities. In resolving the petition,
consideration must be taken of the fundamental rights guaranteed
by Article XIII, Section 3 of the Constitution, i.e., the rights of all
workers to self-organization, collective bargaining and negotiations,
and peaceful concerted activities. Labor authorities should bear in
mind that registration confers upon a union the status of legitimacy
and the concomitant right and privileges granted by law to a
legitimate labor organization, particularly the right to participate in
or ask for certification election in a bargaining unit. Thus, the
cancellation of a certificate of registration is the equivalent of
snuffing out the life of a labor organization. For without such
registration, it loses — as a rule — its rights under the Labor Code.
It is worth mentioning that the Labor Code's provisions on
cancellation of union registration and on reportorial requirements
have been recently amended by Republic Act (R.A.) No. 9481, An
Act Strengthening the Workers' Constitutional Right to Self-
Organization, Amending for the Purpose Presidential Decree No.
442, As Amended Otherwise Known as the Labor Code of the
Philippines, which lapsed into law on May 25, 2007 and became
effective on June 14, 2007. The amendment sought to strengthen
the workers' right to self-organization and enhance the Philippines'
compliance with its international obligations as embodied in the
International Labor Organization (ILO) Convention No. 87,
pertaining to the non-dissolution of workers' organizations by
administrative authority. Thus, R.A. No. 9481 amended Article 239
to read:
ART. 239. Grounds for Cancellation of Union Registration. — The
following may constitute grounds for cancellation of union
registration:
(a) Misrepresentation, false statement or fraud in connection with
the adoption or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with
the election of officers, minutes of the election of officers, and the
list of voters;
(c) Voluntary dissolution by the members.
R.A. No. 9481 also inserted in the Labor Code Article 242-A, which
provides:
ART. 242-A. Reportorial Requirements. — The following are
documents required to be submitted to the Bureau by the
legitimate labor organization concerned:
(a) Its constitution and by-laws, or amendments thereto, the
minutes of ratification, and the list of members who took part in the
ratification of the constitution and by-laws within thirty (30) days
from adoption or ratification of the constitution and by-laws or
amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of
voters within thirty (30) days from election;
(c) Its annual financial report within thirty (30) days after the close
of every fiscal year; and
(d) Its list of members at least once a year or whenever required
by the Bureau. EaDATc
Failure to comply with the above requirements shall not be a
ground for cancellation of union registration but shall subject the
erring officers or members to suspension, expulsion from
membership, or any appropriate penalty.
xxx xxx xxx
The ruling thereby wrote, finis to the challenge being posed by the
petitioner against the illegitimacy of NUWHRAIN-HHMSC.
The remaining issue to be resolved is which among Toyota Motor,
Dunlop Slazenger and Tagaytay Highlands applied in resolving the
dispute arising from the mixed membership in NUWHRAIN-HHMSC.
This is not a novel matter. In Kawashima, 39 we have reconciled
our rulings in Toyota Motor, Dunlop Slazenger and Tagaytay
Highlands by emphasizing on the laws prevailing at the time of
filing of the petition for the certification election.
Toyota Motor and Dunlop Slazenger involved petitions for
certification election filed on November 26, 1992 and September
15, 1995, respectively. In both cases, we applied the Rules and
Regulations Implementing R.A. No. 6715 (also known as the 1989
Amended Omnibus Rules), the prevailing rule then.
The 1989 Amended Omnibus Rules was amended on June 21, 1997
by Department Order No. 9, Series of 1997. Among the
amendments was the removal of the requirement of indicating in
the petition for the certification election that there was no co-
mingling of rank-and-file and supervisory employees in the
membership of the labor union. This was the prevailing rule when
the Court promulgated Tagaytay Highlands, declaring therein that
mixed membership should have no bearing on the legitimacy of a
registered labor organization, unless the co-mingling was due to
misrepresentation, false statement or fraud as provided in Article
239 of the Labor Code. 40
Presently, then, the mixed membership does not result in the
illegitimacy of the registered labor union unless the same was done
through misrepresentation, false statement or fraud according to
Article 239 of the Labor Code. In Air Philippines Corporation v.
Bureau of Labor Relations, 41 we categorically explained that —
Clearly, then, for the purpose of de-certifying a union, it is not
enough to establish that the rank-and-file union includes ineligible
employees in its membership. Pursuant to Article 239 (a) and (c) of
the Labor Code,it must be shown that there was misrepresentation,
false statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments thereto,
the minutes of ratification, or in connection with the election of
officers, minutes of the election of officers, the list of voters, or
failure to submit these documents together with the list of the
newly elected-appointed officers and their postal addresses to the
BLR.
We note that NUWHRAIN-HHMSC filed its petition for the
certification election on October 11, 1995. Conformably with
Kawashima, the applicable law was the 1989 Amended Omnibus
Rules, and the prevailing rule was the pronouncement in Toyota
Motor and Dunlop Slazenger to the effect that a labor union of
mixed membership was not possessed with the requisite
personality to file a petition for the certification election.
Nonetheless, we still rule in favor of NUWHRAIN-HHMSC. We
expound.
In both Toyota Motorand Dunlop Slazenger, the Court was
convinced that the concerned labor unions were comprised by
mixed rank-and-file and supervisory employees. In Toyota Motor,
the employer submitted the job descriptions of the concerned
employees to prove that there were supervisors in the petitioning
union for rank-and-file employees. In Dunlop Slazenger, the Court
observed that the labor union of supervisors included employees
occupying positions that apparently belonged to the rank-and-file.
In both Toyota Motor and Dunlop Slazenger, the employers were
able to adduce substantial evidence to prove the existence of the
mixed membership. Based on the records herein, however, the
petitioner failed in that respect. To recall, it raised the issue of the
mixed membership in its comment on the list of members
submitted by NUWHRAIN-HHMSC, and in its protest. In the
comment, it merely identified the positions that were either
confidential or managerial, but did not present any supporting
evidence to prove or explain the identification. In the protest, it
only enumerated the positions that were allegedly confidential and
managerial, and identified two employees that belonged to the
rank-and-file, but did not offer any description to show that the
positions belonged to different employee groups.
Worth reiterating is that the actual functions of an employee, not
his job designation, determined whether the employee occupied a
managerial, supervisory or rank-and-file position. 42 As to
confidential employees who were excluded from the right to self-
organization, they must (1) assist or act in a confidential capacity,
in regard (2) to persons who formulated, determined, and
effectuated management policies in the field of labor relations. 43
In that regard, mere allegations sans substance would not be
enough, most especially because the constitutional right of workers
to self-organization would be compromised.
At any rate, the members of NUWHRAIN-HHSMC had already
spoken, and elected it as the bargaining agent. As between the
rigid application of Toyota Motors and Dunlop Slazenger, and the
right of the workers to self-organization, we prefer the latter. For
us, the choice is clear and settled. "What is important is that there
is an unmistakeable intent of the members of [the] union to
exercise their right to organize. We cannot impose rigorous
restraints on such right if we are to give meaning to the protection
to labor and social justice clauses of the Constitution." 44
WHEREFORE, the Court DENIES the petition for review on
certiorari; AFFIRMS the decision promulgated on December 13,
2005 by the Court of Appeals; and ORDERS the petitioner to pay
the costs of suit.
SO ORDERED.
 EN BANC
[G.R. No. 164301. October 11, 2011.]
BANK OF THE PHILIPPINE ISLANDS, petitioner, vs. BPI
EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF
UNIONS IN BPI UNIBANK, respondent.
RESOLUTION
LEONARDO-DE CASTRO, J p:
In the present incident, petitioner Bank of the Philippine Islands
(BPI) moves for reconsideration 1 of our Decision dated August 10,
2010, holding that former employees of the Far East Bank and Trust
Company (FEBTC) "absorbed" by BPI pursuant to the two banks'
merger in 2000 were covered by the Union Shop Clause in the then
existing collective bargaining agreement (CBA) 2 of BPI with
respondent BPI Employees Union-Davao Chapter-Federation of
Unions in BPI Unibank (the Union).
To recall, the Union Shop Clause involved in this long standing
controversy provided, thus:
ARTICLE II
xxx xxx xxx
Section 2. Union Shop. — New employees falling within the
bargaining unit as defined in Article I of this Agreement, who may
hereafter be regularly employed by the Bank shall, within thirty
(30) days after they become regular employees, join the Union as a
condition of their continued employment. It is understood that
membership in good standing in the Union is a condition of their
continued employment with the Bank. 3 (Emphases supplied.)
The bone of contention between the parties was whether or not the
"absorbed" FEBTC employees fell within the definition of "new
employees" under the Union Shop Clause, such that they may be
required to join respondent union and if they fail to do so, the
Union may request BPI to terminate their employment, as the
Union in fact did in the present case. Needless to state, BPI refused
to accede to the Union's request. Although BPI won the initial battle
at the Voluntary Arbitrator level, BPI's position was rejected by the
Court of Appeals which ruled that the Voluntary Arbitrator's
interpretation of the Union Shop Clause was at war with the spirit
and rationale why the Labor Code allows the existence of such
provision. On review with this Court, we upheld the appellate
court's ruling and disposed of the case as follows:
WHEREFORE, the petition is hereby DENIED, and the Decision
dated September 30, 2003 of the Court of Appeals is AFFIRMED,
subject to the thirty (30) day notice requirement imposed herein.
Former FEBTC employees who opt not to become union members
but who qualify for retirement shall receive their retirement
benefits in accordance with law, the applicable retirement plan, or
the CBA, as the case may be. 4
Notwithstanding our affirmation of the applicability of the Union
Shop Clause to former FEBTC employees, for reasons already
extensively discussed in the August 10, 2010 Decision, even now
BPI continues to protest the inclusion of said employees in the
Union Shop Clause. cTADCH
In seeking the reversal of our August 10, 2010 Decision, petitioner
insists that the parties to the CBA clearly intended to limit the
application of the Union Shop Clause only to new employees who
were hired as non-regular employees but later attained regular
status at some point after hiring. FEBTC employees cannot be
considered new employees as BPI merely stepped into the shoes of
FEBTC as an employer purely as a consequence of the merger. 5
Petitioner likewise relies heavily on the dissenting opinions of our
respected colleagues, Associate Justices Antonio T. Carpio and
Arturo D. Brion. From both dissenting opinions, petitioner derives
its contention that "the situation of absorbed employees can be
likened to old employees of BPI, insofar as their full tenure with
FEBTC was recognized by BPI and their salaries were maintained
and safeguarded from diminution" but such absorbed employees
"cannot and should not be treated in exactly the same way as old
BPI employees for there are substantial differences between them."
6 Although petitioner admits that there are similarities between
absorbed and new employees, they insist there are marked
differences between them as well. Thus, adopting Justice Brion's
stance, petitioner contends that the absorbed FEBTC employees
should be considered "a sui generis group of employees whose
classification will not be duplicated until BPI has another merger
where it would be the surviving corporation." 7 Apparently
borrowing from Justice Carpio, petitioner propounds that the Union
Shop Clause should be strictly construed since it purportedly
curtails the right of the absorbed employees to abstain from joining
labor organizations. 8
Pursuant to our directive, the Union filed its Comment 9 on the
Motion for Reconsideration. In opposition to petitioner's arguments,
the Union, in turn, adverts to our discussion in the August 10, 2010
Decision regarding the voluntary nature of the merger between BPI
and FEBTC, the lack of an express stipulation in the Articles of
Merger regarding the transfer of employment contracts to the
surviving corporation, and the consensual nature of employment
contracts as valid bases for the conclusion that former FEBTC
employees should be deemed new employees. 10 The Union
argues that the creation of employment relations between
former FEBTC employees and BPI (i.e., BPI's selection and
engagement of former FEBTC employees, its payment of their
wages, power of dismissal and of control over the employees'
conduct) occurred after the merger, or to be more precise, after the
Securities and Exchange Commission's (SEC) approval of the
merger. 11 The Union likewise points out that BPI failed to offer
any counterargument to the Court's reasoning that:
The rationale for upholding the validity of union shop clauses in a
CBA, even if they impinge upon the individual employee's right or
freedom of association, is not to protect the union for the union's
sake. Laws and jurisprudence promote unionism and afford certain
protections to the certified bargaining agent in a unionized
company because a strong and effective union presumably benefits
all employees in the bargaining unit since such a union would be in
a better position to demand improved benefits and conditions of
work from the employer. . . . .
. . . Nonetheless, settled jurisprudence has already swung the
balance in favor of unionism, in recognition that ultimately the
individual employee will be benefited by that policy. In the
hierarchy of constitutional values, this Court has repeatedly held
that the right to abstain from joining a labor organization is
subordinate to the policy of encouraging unionism as an instrument
of social justice. 12
While most of the arguments offered by BPI have already been
thoroughly addressed in the August 10, 2010 Decision, we find that
a qualification of our ruling is in order only with respect to the
interpretation of the provisions of the Articles of Merger and its
implications on the former FEBTC employees' security of tenure.
Taking a second look on this point, we have come to agree with
Justice Brion's view that it is more in keeping with the dictates of
social justice and the State policy of according full protection to
labor to deem employment contracts as automatically assumed by
the surviving corporation in a merger, even in the absence of an
express stipulation in the articles of merger or the merger plan. In
his dissenting opinion, Justice Brion reasoned that: aDECHI
To my mind, due consideration of Section 80 of the Corporation
Code, the constitutionally declared policies on work, labor and
employment, and the specific FEBTC-BPI situation — i.e., a merger
with complete "body and soul" transfer of all that FEBTC embodied
and possessed and where both participating banks were willing
(albeit by deed, not by their written agreement) to provide for the
affected human resources by recognizing continuity of employment
— should point this Court to a declaration that in a complete
merger situation where there is total takeover by one corporation
over another and there is silence in the merger agreement on what
the fate of the human resource complement shall be, the latter
should not be left in legal limbo and should be properly provided
for, by compelling the surviving entity to absorb these employees.
This is what Section 80 of the Corporation Code commands, as the
surviving corporation has the legal obligation to assume all the
obligations and liabilities of the merged constituent corporation.
Not to be forgotten is that the affected employees managed,
operated and worked on the transferred assets and properties as
their means of livelihood; they constituted a basic component of
their corporation during its existence. In a merger and consolidation
situation, they cannot be treated without consideration of the
applicable constitutional declarations and directives, or, worse, be
simply disregarded. If they are so treated, it is up to this Court to
read and interpret the law so that they are treated in accordance
with the legal requirements of mergers and consolidation, read in
light of the social justice, economic and social provisions of our
Constitution. Hence, there is a need for the surviving corporation to
take responsibility for the affected employees and to absorb them
into its workforce where no appropriate provision for the merged
corporation's human resources component is made in the Merger
Plan. 13
By upholding the automatic assumption of the non-surviving
corporation's existing employment contracts by the surviving
corporation in a merger, the Court strengthens judicial protection of
the right to security of tenure of employees affected by a merger
and avoids confusion regarding the status of their various benefits
which were among the chief objections of our dissenting colleagues.
However, nothing in this Resolution shall impair the right of an
employer to terminate the employment of the absorbed employees
for a lawful or authorized cause or the right of such an employee to
resign, retire or otherwise sever his employment, whether before or
after the merger, subject to existing contractual obligations. In this
manner, Justice Brion's theory of automatic assumption may be
reconciled with the majority's concerns with the successor
employer's prerogative to choose its employees and the prohibition
against involuntary servitude.
Notwithstanding this concession, we find no reason to reverse our
previous pronouncement that the absorbed FEBTC employees are
covered by the Union Shop Clause.
Even in our August 10, 2010 Decision, we already observed that
the legal fiction in the law on mergers (that the surviving
corporation continues the corporate existence of the non-surviving
corporation) is mainly a tool to adjudicate the rights and obligations
between and among the merged corporations and the persons that
deal with them. 14 Such a legal fiction cannot be unduly extended
to an interpretation of a Union Shop Clause so as to defeat its
purpose under labor law. Hence, we stated in the Decision that:
In any event, it is of no moment that the former FEBTC employees
retained the regular status that they possessed while working for
their former employer upon their absorption by petitioner. This fact
would not remove them from the scope of the phrase "new
employees" as contemplated in the Union Shop Clause of the CBA,
contrary to petitioner's insistence that the term "new employees"
only refers to those who are initially hired as non-regular
employees for possible regular employment.
The Union Shop Clause in the CBA simply states that "new
employees" who during the effectivity of the CBA "may be regularly
employed" by the Bank must join the union within thirty (30) days
from their regularization. There is nothing in the said clause that
limits its application to only new employees who possess non-
regular status, meaning probationary status, at the start of their
employment. Petitioner likewise failed to point to any provision in
the CBA expressly excluding from the Union Shop Clause new
employees who are "absorbed" as regular employees from the
beginning of their employment. What is indubitable from the Union
Shop Clause is that upon the effectivity of the CBA, petitioner's new
regular employees (regardless of the manner by which they
became employees of BPI) are required to join the Union as a
condition of their continued employment. 15 cACDaH
Although by virtue of the merger BPI steps into the shoes of FEBTC
as a successor employer as if the former had been the employer of
the latter's employees from the beginning it must be emphasized
that, in reality, the legal consequences of the merger only occur at
a specific date, i.e., upon its effectivity which is the date of approval
of the merger by the SEC. Thus, we observed in the Decision that
BPI and FEBTC stipulated in the Articles of Merger that they will
both continue their respective business operations until the SEC
issues the certificate of merger and in the event no such certificate
is issued, they shall hold each other blameless for the non-
consummation of the merger. 16 We likewise previously noted that
BPI made its assignments of the former FEBTC employees effective
on April 10, 2000, or after the SEC approved the merger. 17 In
other words, the obligation of BPI to pay the salaries and benefits
of the former FEBTC employees and its right of discipline and
control over them only arose with the effectivity of the merger.
Concomitantly, the obligation of former FEBTC employees to render
service to BPI and their right to receive benefits from the latter also
arose upon the effectivity of the merger. What is material is that all
of these legal consequences of the merger took place during the life
of an existing and valid CBA between BPI and the Union wherein
they have mutually consented to include a Union Shop Clause.
From the plain, ordinary meaning of the terms of the Union Shop
Clause, it covers employees who (a) enter the employ of BPI during
the term of the CBA; (b) are part of the bargaining unit (defined in
the CBA as comprised of BPI's rank and file employees); and (c)
become regular employees without distinguishing as to the manner
they acquire their regular status. Consequently, the number of such
employees may adversely affect the majority status of the Union
and even its existence itself, as already amply explained in the
Decision.
Indeed, there are differences between (a) new employees who are
hired as probationary or temporary but later regularized, and (b)
new employees who, by virtue of a merger, are absorbed from
another company as regular and permanent from the beginning of
their employment with the surviving corporation. It bears
reiterating here that these differences are too insubstantial to
warrant the exclusion of the absorbed employees from the
application of the Union Shop Clause. In the Decision, we noted
that:
Verily, we agree with the Court of Appeals that there are no
substantial differences between a newly hired non-regular
employee who was regularized weeks or months after his hiring and
a new employee who was absorbed from another bank as a regular
employee pursuant to a merger, for purposes of applying the Union
Shop Clause. Both employees were hired/employed only after the
CBA was signed. At the time they are being required to join the
Union, they are both already regular rank and file employees of
BPI. They belong to the same bargaining unit being represented by
the Union. They both enjoy benefits that the Union was able to
secure for them under the CBA. When they both entered the
employ of BPI, the CBA and the Union Shop Clause therein were
already in effect and neither of them had the opportunity to
express their preference for unionism or not. We see no cogent
reason why the Union Shop Clause should not be applied equally to
these two types of new employees, for they are undeniably
similarly situated. 18
Again, it is worthwhile to highlight that a contrary interpretation of
the Union Shop Clause would dilute its efficacy and put the certified
union that is supposedly being protected thereby at the mercy of
management. For if the former FEBTC employees had no say in the
merger of its former employer with another bank, as petitioner BPI
repeatedly decries on their behalf, the Union likewise could not
prevent BPI from proceeding with the merger which undisputedly
affected the number of employees in the bargaining unit that the
Union represents and may negatively impact on the Union's
majority status. In this instance, we should be guided by the
principle that courts must place a practical and realistic construction
upon a CBA, giving due consideration to the context in which it is
negotiated and purpose which it is intended to serve. 19
We now come to the question: Does our affirmance of our ruling
that former FEBTC employees absorbed by BPI are covered by the
Union Shop Clause violate their right to security of tenure which we
expressly upheld in this Resolution? We answer in the negative.
AaITCS
In Rance v. National Labor Relations Commission, 20 we held that:
It is the policy of the state to assure the right of workers to
"security of tenure" (Article XIII, Sec. 3 of the New Constitution,
Section 9, Article II of the 1973 Constitution). The guarantee is an
act of social justice. When a person has no property, his job may
possibly be his only possession or means of livelihood. Therefore,
he should be protected against any arbitrary deprivation of his job.
Article 280 of the Labor Code has construed security of tenure as
meaning that "the employer shall not terminate the services
of an employee except for a just cause or when authorized
by" the Code. . . . (Emphasis supplied.)
We have also previously held that the fundamental guarantee of
security of tenure and due process dictates that no worker shall be
dismissed except for a just and authorized cause provided by law
and after due process is observed. 21 Even as we now recognize
the right to continuous, unbroken employment of workers who are
absorbed into a new company pursuant to a merger, it is but logical
that their employment may be terminated for any causes provided
for under the law or in jurisprudence without violating their right to
security of tenure. As Justice Carpio discussed in his dissenting
opinion, it is well-settled that termination of employment by virtue
of a union security clause embodied in a CBA is recognized in our
jurisdiction. 22 In Del Monte Philippines, Inc. v. Saldivar, 23 we
explained the rationale for this policy in this wise:
Article 279 of the Labor Code ordains that "in cases of regular
employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by [Title I,
Book Six of the Labor Code]." Admittedly, the enforcement of a
closed-shop or union security provision in the CBA as a
ground for termination finds no extension within any of the
provisions under Title I, Book Six of the Labor Code.Yet
jurisprudence has consistently recognized, thus: "It is State
policy to promote unionism to enable workers to negotiate with
m a n a g e m e n t o n a n e ve n p l ay i n g f i e l d a n d w i t h m o r e
persuasiveness than if they were to individually and separately
bargain with the employer. For this reason, the law has allowed
stipulations for 'union shop' and 'closed shop' as means of
encouraging workers to join and support the union of their choice in
the protection of their rights and interests vis-a-vis the employer."
24 (Emphasis supplied.)
Although it is accepted that non-compliance with a union security
clause is a valid ground for an employee's dismissal, jurisprudence
dictates that such a dismissal must still be done in accordance with
due process. This much we decreed in General Milling Corporation
v. Casio, 25 to wit:
The Court reiterated in Malayang Samahan ng mga Manggagawa sa
M. Greenfield v. Ramos that:
While respondent company may validly dismiss the employees
expelled by the union for disloyalty under the union security clause
of the collective bargaining agreement upon the recommendation
by the union, this dismissal should not be done hastily and
summarily thereby eroding the employees' right to due process,
self-organization and security of tenure. The enforcement of union
security clauses is authorized by law provided such enforcement
is not characterized by arbitrariness, and always with due
process. Even on the assumption that the federation had valid
grounds to expel the union officers, due process requires that these
union officers be accorded a separate hearing by respondent to join the respondent, said employees shall be accorded full
company. procedural due process before their employment may be
The twin requirements of notice and hearing constitute the terminated.
essential elements of procedural due process. The law requires the SO ORDERED.
employer to furnish the employee sought to be dismissed with two
written notices before termination of employment can be legally
effected: (1) a written notice apprising the employee of the
particular acts or omissions for which his dismissal is sought in
order to afford him an opportunity to be heard and to defend
himself with the assistance of counsel, if he desires, and (2) a
subsequent notice informing the employee of the employer's
decision to dismiss him. This procedure is mandatory and its
absence taints the dismissal with illegality.
Irrefragably, GMC cannot dispense with the requirements of
notice and hearing before dismissing Casio, et al. even when
said dismissal is pursuant to the closed shop provision in the
CBA. The rights of an employee to be informed of the charges
against him and to reasonable opportunity to present his side in a
controversy with either the company or his own union are not
wiped away by a union security clause or a union shop clause in a
collective bargaining agreement. . . . 26 (Emphases supplied.)
EScaIT
In light of the foregoing, we find it appropriate to state that, apart
from the fresh thirty (30)-day period from notice of finality of the
Decision given to the affected FEBTC employees to join the Union
before the latter can request petitioner to terminate the former's
employment, petitioner must still accord said employees the twin
requirements of notice and hearing on the possibility that they may
have other justifications for not joining the Union. Similar to our
August 10, 2010 Decision, we reiterate that our ruling presupposes
there has been no material change in the situation of the parties in
the interim.
WHEREFORE, the Motion for Reconsideration is DENIED. The
Decision dated August 10, 2010 is AFFIRMED, subject to the
qualifications that:
(a) Petitioner is deemed to have assumed the employment
contracts of the Far East Bank and Trust Company (FEBTC)
employees upon effectivity of the merger without break in the
continuity of their employment, even without express
stipulation in the Articles of Merger; and
(b) Aside from the thirty (30) days, counted from notice of finality
of the August 10, 2010 Decision, given to former FEBTC employees
 FIRST DIVISION
GENERAL MILLING CORPORATION v. ERNESTO CASIO,
ROLANDO IGOT, MARIO FAMADOR, NELSON LIM,
FELICISIMO BOOC, PROCOPIO OBREGON, JR., and ANTONIO
ANINIPOK
G.R. No. 149552
DECISION
LEONARDO-DE CASTRO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court seeking the reversal of the Decision[1] dated March 30,
2001 and Resolution[2] dated July 18, 2001 of the Court of Appeals
in CA-G.R. SP No. 40280, setting aside the Voluntary Arbitration
Award[3] dated August 16, 1995 of the National Conciliation and
Mediation Board (NCMB), Cebu City, in VA Case No. AC
389-01-01-95. Voluntary Arbitrator Alice K. Canonoy-Morada
(Canonoy-Morada) dismissed the Complaint filed by respondents
Ernesto Casio, Rolando Igot, Mario Famador, Nelson Lim, Felicisimo
Booc, Procopio Obregon, Jr. and Antonio Aninipok (Casio, et al.)
against petitioner General Milling Corporation (GMC) for unfair labor
practice, illegal suspension, illegal dismissal, and payment of moral
and exemplary damages.
The labor union Ilaw at Buklod ng Mangagawa (IBM)-Local 31
Chapter (Local 31) was the sole and exclusive bargaining agent of
the rank and file employees of GMC in Lapu-Lapu City. On
November 30, 1991, IBM-Local 31, through its officers and board
members, namely, respondents Virgilio Pino,[4] Paulino Cabreros,
Ma. Luna P. Jumaoas, Dominador Booc, Bartolome Auman, Remegio
Cabantan, Fidel Valle, Loreto Gonzaga, Edilberto Mendoza and
Antonio Panilag (Pino, et al.), entered into a Collective Bargaining
Agreement (CBA) with GMC. The effectivity of the said CBA was
retroactive to August 1, 1991.[5]
The CBA contained the following union security provisions:
Section 3. MAINTENANCE OF MEMBERSHIP All employees/workers
employed by the Company with the exception of those who are
specifically excluded by law and by the terms of this Agreement
must be members in good standing of the Union within thirty (30)
days upon the signing of this agreement and shall maintain such
membership in good standing thereof as a condition of their
employment or continued employment.
Section 6. The Company, upon written request of the Union, shall
terminate the services of any employee/worker who fails to fulfill
the conditions set forth in Sections 3 and 4 thereof, subject
however, to the provisions of the Labor Laws of the Philippines and
their Implementing Rules and Regulations. The Union shall absolve
the Company from any and all liabilities, pecuniary or otherwise,
and responsibilities to any employee or worker who is dismissed or
terminated in pursuant thereof.[6]
Casio, et al. were regular employees of GMC with daily earnings
ranging from P173.75 to P201.50, and length of service varying
from eight to 25 years.[7] Casio was elected IBM-Local 31 President
for a three-year term in June 1991, while his co-respondents were
union shop stewards.
In a letter[8] dated February 24, 1992, Rodolfo Gabiana (Gabiana),
the IBM Regional Director for Visayas and Mindanao, furnished
Casio, et al. with copies of the Affidavits of GMC employees Basilio
Inoc and Juan Potot, charging Casio, et al. with acts inimical to the
interest of the union. Through the same letter, Gabiana gave Casio,
et al. three days from receipt thereof within which to file their
answers or counter-affidavits. However, Casio, et al. refused to
acknowledge receipt of Gabianas letter.
Subsequently, on February 29, 1992, Pino, et al., as officers and
members of the IBM-Local 31, issued a Resolution[9] expelling
Casio, et al. from the union. Pertinent portions of the Resolution are
reproduced below:
Whereas, Felicisimo Booc, Rolando Igot, Procopio Obregon, Jr.,
Antonio Aninipok, Mario Famador, Nelson Lim and Ernesto Casio,
through Ernesto Casio have refused to acknowledge receipt of the
letter-complaint dated February 24, 1992, requiring them to file
their answer[s] or counter-affidavits as against the charge of acts
inimical to the interest of the union and that in view of such refusal
to acknowledge receipt, a copy of said letter complaint was dropped
or left in front of E. Casio;
Whereas, the three (3)[-]day period given to file their answer or
counter-affidavit have already lapsed prompting the union Board to
investigate the charge ex parte;
Whereas, after such ex parte investigation the said charge has been
more than adequately substantiated by the affidavits/witnesses and
documentary exhibits presented.
NOW, THEREFORE, RESOLVED as it is hereby RESOLVED, that
Ernesto Casio, Felicisimo Booc, Rolando Igot, Procopio Obregon, Jr.,
Antonio Aninipok, Mario Famador and Nelson Lim be expelled as
union member[s] of good standing effectively immediately.
RESOLVED FURTHER, to furnish copy of this Resolution to the GMC
Management for their information and guidance with the
recommendation as it is hereby recommended to dismiss the
above-named employees from work.
Gabiana then wrote a letter[10] dated March 10, 1992, addressed to
Eduardo Cabahug (Cabahug), GMC Vice-President for Engineering
and Plant Administration, informing the company of the expulsion
of Casio, et al. from the union pursuant to the Resolution dated
February 29, 1992 of IBM-Local 31 officers and board members.
Gabiana likewise requested that Casio, et al. be immediately
dismissed from their work for the interest of industrial peace in the
plant.
Gabiana followed-up with another letter[11] dated March 19, 1992,
inquiring from Cabahug why Casio, et al. were still employed with
GMC despite the request of IBM-Local 31 that Casio, et al. be
immediately dismissed from service pursuant to the closed shop
provision in the existing CBA. Gabiana reiterated the demand of
IBM-Local 31 that GMC dismiss Casio, et al., with the warning that
failure of GMC to do so would constitute gross violation of the
existing CBA and constrain the union to file a case for unfair labor
practice against GMC.
Pressured by the threatened filing of a suit for unfair labor practice,
GMC acceded to Gabianas request to terminate the employment of
Casio, et al. GMC issued a Memorandum dated March 24, 1992
terminating the employment of Casio, et al. effective April 24, 1992
and placing the latter under preventive suspension for the
meantime.
On March 27, 1992, Casio, et al., in the name of IBM-Local 31, filed
a Notice of Strike with the NCMB-Regional Office No. VII (NCMB-
RO). Casio, et al. alleged as bases for the strike the illegal dismissal
of union officers and members, discrimination, coercion, and union
busting. The NCMB-RO held conciliation proceedings, but no
settlement was reached among the parties.[12]
Casio, et al. next sought recourse from the National Labor Relations
Commission (NLRC) Regional Arbitration Branch VII by filing on
August 3, 1992 a Complaint against GMC and Pino, et al. for unfair
labor practice, particularly, the termination of legitimate union
officers, illegal suspension, illegal dismissal, and moral and
exemplary damages. Their Complaint was docketed as NLRC Case
No. RAB-VII-08-0639-92.[13]
Finding that NLRC Case No. RAB-VII-08-0639-92 did not undergo
voluntary arbitration, the Labor Arbiter dismissed the case for lack
of jurisdiction, but endorsed the same to the NCMB-RO. Prior to
undergoing voluntary arbitration before the NCMB-RO, however, the
parties agreed to first submit the case to the grievance machinery
of IBM-Local 31. On September 7, 1994, Casio, et al. filed their
Complaint with Pino, the Acting President of IBM-Local 31. Pino
acknowledged receipt of the Complaint and assured Casio, et al.
that they would be seasonably notified of whatever decision and/or
action the Board may have in the instant case.[14] When the IBM-
Local 31 Board failed to hold grievance proceedings on the
Complaint of Casio, et al., NCMB Voluntary Arbitrator Canonoy-
Morada assumed jurisdiction over the same. The Complaint was
docketed as VA Case No. AC 389-01-01-95.
Based on the Position Papers and other documents submitted by
the parties,[15] Voluntary Arbitrator Canonoy-Morada rendered on
August 16, 1995 a Voluntary Arbitration Award dismissing the
Complaint in VA Case No. AC 389-01-01-95 for lack of merit, but
granting separation pay and attorneys fees to Casio, et al. The
Voluntary Arbitration Award presented the following findings: (1)
the termination by GMC of the employment of Casio, et al. was in
valid compliance with the closed shop provision in the CBA; (2)
GMC had no competence to determine the good standing of a union
member; (3) Casio, et al. waived their right to due process when
they refused to receive Gabianas letter dated February 24, 1992,
which required them to submit their answer to the charges against
them; (4) the preventive suspension of Casio, et al. by GMC was an
act of self-defense; and (5) the IBM-Local 31 Resolution dated
February 29, 1992 expelling Casio, et al. as union members, also
automatically ousted them as union officers.[16] The dispositive
portion of the Voluntary Arbitration Award reads:
WHEREFORE, above premises considered, this case filed by [Casio,
et al.] is hereby ordered DISMISSED for lack of merit.
Since the dismissal is not for a cause detrimental to the interest of
the company, respondent General Milling Corporation is,
nonetheless, ordered to pay separation pay to all [Casio, et al.]
within seven (7) calendar days upon receipt of this order at the rate
of one-half month per year of service reckoned from the time of
their employment until the date of their separation on March 24,
1992, thus:
Employee Date Hired Rate/Month Service Total
(1/2 mo/yr
of service)
Casio April 24/74 P2,636.29 x 18 years = P47,453.22
Igot May 1980 P2,472.75 x 12 years = P29,673.00
Famador Feb. 1977 P2,498.92 x 15 years = P37,483.80
Lim Aug. 1975 P2,466.21 x 17 years = P41,925.57
Booc Aug. 1978 P2,498.92 x 14 years = P34,984.88
Obregon May 1984 P2,273.23 x 08 years = P18,185.84
Aninipok Sept. 1967 P2,616.01 x 25 years = P65,400.25
The attorneys fees for [Casio, et al.s] counsel shall be ten percent
(10%) of the total amount due them; and shall be shared
proportionately by all of the same [Casio, et al.].
All other claims are hereby denied.[17]
Dissatisfied with the Voluntary Arbitration Award, Casio, et al. went
to the Court of Appeals by way of a Petition for Certiorari under
Rule 65 of the Rules of Court to have said Award set aside.
The Court of Appeals granted the writ of certiorari and set aside the
Voluntary Arbitration Award. The appellate court ruled that while
the dismissal of Casio, et al., was made by GMC pursuant to a valid
closed shop provision under the CBA, the company, however, failed
to observe the elementary rules of due process in implementing the
said dismissal. Consequently, Casio, et al. were entitled to
reinstatement with backwages from the time of their dismissal up
to the time of their reinstatement. Nevertheless, the Court of
Appeals did not hold GMC liable to Casio, et al. for moral and
exemplary damages and attorneys fees, there being no showing
that their dismissal was attended by bad faith or malice, or that the
dismissal was effected in a wanton, oppressive, or malevolent
manner, given that GMC merely accommodated the request of IBM-
Local 31. The appellate court, instead, made Pino, et al. liable to
Casio, et al., for moral and exemplary damages and attorneys fees,
since it was on the basis of the imputations and actuations of Pino,
et al. that Casio, et al. were illegally dismissed from employment.
The Court of Appeals thus decreed:
WHEREFORE, the assailed award is hereby SET ASIDE, and private
respondent General Milling Corporation is hereby ordered to
reinstate [Casio, et al.] to their former positions without loss of
seniority rights, and to pay their full backwages, solidarily with
[Pino, et al.]. Further, [Pino, et al.] are ordered to indemnify each
of [Casio, et al.] in the form of moral and exemplary damages in
the amounts of P50,000.00 and P30,000.00, respectively, and to
pay attorneys fees.[18]
The Motion for Reconsideration of GMC was denied by the Court of
Appeals in the Resolution dated July 18, 2001.
Hence, GMC filed the instant Petition for Review, arguing that:
I
THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF
JURISDICTION WHEN IT SET ASIDE THE AWARD OF THE
VOLUNTARY ARBITRATOR, AND IN AWARDING REINSTATEMENT
AND FULL BACKWAGES TO [Casio, et al.].
II
THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE
O F D I S C R E T I O N A M O U N T I N G TO L A C K O R E XC E SS O F
JURISDICTION WHEN IT SAID THAT PETITIONER GMC FAILED TO
ACCORD DUE PROCESS TO [Casio, et al.].
III
THE HONORABLE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF
JURISDICTION WHEN IT DID NOT ABSOLVE PETITIONER GMC OF
ANY LIABILITY AND INSTEAD RULED THAT IT WAS SOLIDARILY
LIABLE WITH THE UNION OFFICERS FOR THE PAYMENT OF FULL
BACKWAGES TO [Casio, et al.].
At this point, we take note that Pino, et al. did not appeal from the
decision of the Court of Appeals.
GMC avers that in reviewing and reversing the findings of the
Voluntary Arbitrator, the Court of Appeals departed from the
principle of conclusiveness of the trial judges findings. GMC also
claims that the findings of the Voluntary Arbitrator as to the legality
of the termination from employment of Casio, et al. are well
supported by evidence. GMC further insists that before IBP-Local 31
expelled Casio, et al. from the union and requested GMC to dismiss
Casio, et al. from service pursuant to the closed shop provision in
the CBA, IBP-Local 31 already accorded Casio, et al. due process,
only that Casio, et al. refused to avail themselves of such
opportunity. GMC additionally maintains that Casio, et al. were
expelled by IBP-Local 31 for acts inimical to the interest of the
union, and GMC had no authority to inquire into or rule on which
employee-member is or is not loyal to the union, this being an
internal affair of the union. Thus, GMC had to rely on the
presumption that Pino, et al. regularly performed their duties and
functions as IBP-Local 31 officers and board members, when the
latter investigated and ruled on the charges against Casio, et al.[19]
GMC finally asserts that Pino, et al., the IBP-Local 31 officers and
board members who resolved to expel Casio, et al. from the union,
and not GMC, should be held liable for the reinstatement of and
payment of full backwages to Casio, et al. for the company had
acted in good faith and merely complied with the closed shop
provision in the CBA.
On the other hand, Casio, et al. counters that GMC failed to identify
the specific pieces of evidence supporting the findings of the
Voluntary Arbitrator. Casio, et al. contends that to accord them due
process, GMC itself, as the employer, should have held proceedings
distinct and separate from those conducted by IBM-Local 31. GMC
cannot justify its failure to conduct its own inquiry using the
argument that such proceedings would constitute an intrusion by
the company into the internal affairs of the union. The claim of GMC
that it had acted in good faith when it dismissed Casio, et al. from
service in accordance with the closed shop provision of the CBA is
inconsistent with the failure of the company to accord the dismissed
employees their right to due process.
In general, in a petition for review on certiorari as a mode of appeal
under Rule 45 of the Rules of Court, the petitioner can raise only
questions of law - the Supreme Court is not the proper venue to
consider a factual issue as it is not a trier of facts. A departure
from the general rule may be warranted where the findings of fact
of the Court of Appeals are contrary to the findings and conclusions
of the trial court [or quasi-judicial agency, as the case may be], or
when the same is unsupported by the evidence on record.[20]
Whether Casio, et al. were illegally dismissed without any valid
reason is a question of fact better left to quasi-judicial agencies to
determine. In this case, the Voluntary Arbitrator was convinced that
Casio, et al. were legally dismissed; while the Court of Appeals
believed the opposite, because even though the dismissal of Casio,
et al. was made by GMC pursuant to a valid closed shop provision
in the CBA, the company still failed to observe the elementary rules
of due process. The Court is therefore constrained to take a second
look at the evidence on record considering that the factual findings
of the Voluntary Arbitrator and the Court of Appeals are
contradictory.
There are two aspects which characterize the concept of due
process under the Labor Code: one is substantive whether the
termination of employment was based on the provision of the Labor
Code or in accordance with the prevailing jurisprudence; the other
is procedural the manner in which the dismissal was effected.[21]
After a thorough review of the records, the Court agrees with the
Court of Appeals. The dismissal of Casio, et al. was indeed illegal,
having been done without just cause and the observance of
procedural due process.
In Alabang Country Club, Inc. v. National Labor Relations
Commission,[22] the Court laid down the grounds for which an
employee may be validly terminated, thus:
Under the Labor Code, an employee may be validly terminated on
the following grounds: (1) just causes under Art. 282; (2)
authorized causes under Art. 283; (3) termination due to disease
under Art. 284, and (4) termination by the employee or resignation
under Art. 285.
Another cause for termination is dismissal from employment due to
the enforcement of the union security clause in the CBA. x x x.
(Emphasis ours.)
Union security is a generic term, which is applied to and
comprehends closed shop, union shop, maintenance of
membership, or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as
a condition affecting employment. There is union shop when all new
regular employees are required to join the union within a certain
period as a condition for their continued employment. There is
maintenance of membership shop when employees, who are union
members as of the effective date of the agreement, or who
thereafter become members, must maintain union membership as
a condition for continued employment until they are promoted or
transferred out of the bargaining unit or the agreement is
terminated. A closed shop, on the other hand, may be defined as
an enterprise in which, by agreement between the employer and
his employees or their representatives, no person may be employed
in any or certain agreed departments of the enterprise unless he or
she is, becomes, and, for the duration of the agreement, remains a
member in good standing of a union entirely comprised of or of
which the employees in interest are a part.[23]
Union security clauses are recognized and explicitly allowed under
Article 248(e) of the Labor Code, which provides that:
Art. 248. Unfair Labor Practices of Employers. x x x
xxxx
(e) To discriminate in regard to wages, hours of work, and other
terms and conditions of employment in order to encourage or
discourage membership in any labor organization. Nothing in this
Code or in any other law shall stop the parties from requiring
membership in a recognized collective bargaining agent as a
condition for employment, except those employees who are already
members of another union at the time of the signing of the
collective bargaining agreement. (Emphasis supplied.)
It is State policy to promote unionism to enable workers to
negotiate with management on an even playing field and with more
persuasiveness than if they were to individually and separately
bargain with the employer. For this reason, the law has allowed
stipulations for union shop and closed shop as means of
encouraging workers to join and support the union of their choice in
the protection of their rights and interest vis--vis the employer.[24]
Moreover, a stipulation in the CBA authorizing the dismissal of
employees are of equal import as the statutory provisions on
dismissal under the Labor Code, since a CBA is the law between the
company and the union and compliance therewith is mandated by
the express policy to give protection to labor.[25]
In terminating the employment of an employee by enforcing the
union security clause, the employer needs only to determine and
prove that: (1) the union security clause is applicable; (2) the
union is requesting for the enforcement of the union security
provision in the CBA; and (3) there is sufficient evidence to support
the decision of the union to expel the employee from the union.
These requisites constitute just cause for terminating an employee
based on the union security provision of the CBA.[26]
There is no question that in the present case, the CBA between
GMC and IBM-Local 31 included a maintenance of membership and
closed shop clause as can be gleaned from Sections 3 and 6 of
Article II. IBM-Local 31, by written request, can ask GMC to
terminate the employment of the employee/worker who failed to
maintain its good standing as a union member.
It is similarly undisputed that IBM-Local 31, through Gabiana, the
IBM Regional Director for Visayas and Mindanao, twice requested
GMC, in the letters dated March 10 and 19, 1992, to terminate the
employment of Casio, et al. as a necessary consequence of their
expulsion from the union.
It is the third requisite that there is sufficient evidence to support
the decision of IBM-Local 31 to expel Casio, et al. which appears to
be lacking in this case.
The full text of the individual but identical termination letters,[27]
served by GMC on Casio, et al., is very revealing. They read:
To: [Employees Name]
From: Legal Counsel
Subject: Dismissal Upon Union Request Thru
CBA Closed Shop Provision
The company is in receipt of two letters dated March 10, 1992 and
March 19, 1992 respectively from the union at the Mill in Lapulapu
demanding the termination of your employment pursuant to the
closed shop provision of our existing Collective Bargaining
Agreement. It appears from the attached resolutions that you
have been expelled from union membership and has thus
ceased to become a member in good standing. The resolutions
are signed by the same officers who executed and signed our
existing CBA, copies of the letters and resolutions are enclosed
hereto for your reference.
The CBA in Article II provides the following:
Section 3. MAINTENANCE OF MEMBERSHIP All employees/workers
employed by the Company with the exception of those who are
specifically excluded by law and by the terms of this Agreement
must be members in good standing of the Union within thirty (30)
days upon the signing of this agreement and shall maintain such
membership in good standing thereof as a condition of their
employment or continued employment.
Section 6. The Company, upon written request of the Union, shall
terminate the services of any employee/worker who fails to fulfill
the conditions set forth in Sections 3 and 4 thereof, subject
however, to the provisions of the Labor Laws of the Philippines and
their Implementing Rules and Regulations. The Union shall absolve
the Company from any and all liabilities, pecuniary or otherwise,
and responsibilities to any employee or worker who is dismissed or
terminated in pursuant thereof.
The provisions of the CBA are clear enough. The termination of
employment on the basis of the closed shop provision of the CBA is
well recognized in law and in jurisprudence.
There is no valid ground to refuse to terminate. On the other hand
as pointed out in the unions strongly demanding letter dated March
19, 1992, the company could be sued for unfair labor
practice. While we would have wanted not to accommodate
the unions request, we are left with no other option. The
terms of the CBA should be respected. To refuse to enforce the CBA
would result in the breakdown of industrial peace and the end of
harmonious relations between the union and management. The
company would face the collective anger and enmity of its
employees who are union members.
In the light of the unions very insistent demand, verbal and in
writing and to avoid the union accusation of coddling you, and
considering the explicitly mandatory language of the closed shop
provision of the CBA, the company is constrained to terminate your
employment, to give you ample time to look and find another
employment, and/or exert efforts to become again a member of
good standing of your union, effective April 24, 1992.
In the meantime, to prevent serious danger to the life and property
of the company and of its employees, we are placing you under
preventive suspension beginning today.
It is apparent from the aforequoted letter that GMC terminated the
employment of Casio, et al. relying upon the Resolution dated
February 29, 1992 of Pino, et al. expelling Casio, et al. from IBM-
Local 31; Gabianas Letters dated March 10 and 19, 1992
demanding that GMC terminate the employment of Casio, et al. on
the basis of the closed shop clause in the CBA; and the threat of
being sued by IBM-Local 31 for unfair labor practice. The letter
made no mention at all of the evidence supporting the decision of
IBM-Local 31 to expel Casio, et al. from the union. GMC never
alleged nor attempted to prove that the company actually looked
into the evidence of IBM-Local 31 for expelling Casio, et al. and
made a determination on the sufficiency thereof. Without such a
determination, GMC cannot claim that it had terminated the
employment of Casio, et al. for just cause.
The failure of GMC to make a determination of the sufficiency of
evidence supporting the decision of IBM-Local 31 to expel Casio, et
al. is a direct consequence of the non-observance by GMC of
procedural due process in the dismissal of employees.
As a defense, GMC contends that as an employer, its only duty was
to ascertain that IBM-Local 31 accorded Casio, et al. due process;
and, it is the finding of the company that IBM-Local 31 did give
Casio, et al. the opportunity to answer the charges against them,
but they refused to avail themselves of such opportunity.
This argument is without basis.
The Court has stressed time and again that allegations must be
proven by sufficient evidence because mere allegation is definitely
not evidence.[28] Once more, in Great Southern Maritime Services
Corporation. v. Acua,[29] the Court declared:
Time and again we have ruled that in illegal dismissal cases like the
present one, the onus of proving that the employee was not
dismissed or if dismissed, that the dismissal was not illegal, rests
on the employer and failure to discharge the same would mean that
the dismissal is not justified and therefore illegal. Thus, petitioners
must not only rely on the weakness of respondents evidence but
must stand on the merits of their own defense. A party alleging a
critical fact must support his allegation with substantial evidence for
any decision based on unsubstantiated allegation cannot stand as it
will offend due process. x x x. (Emphasis supplied.)
The records of this case are absolutely bereft of any supporting
evidence to substantiate the bare allegation of GMC that Casio, et
al. were accorded due process by IBM-Local 31. There is nothing on
record that would indicate that IBM-Local 31 actually notified Casio,
et al. of the charges against them or that they were given the
chance to explain their side. All that was stated in the IBM-Local 31
Resolution dated February 29, 1992, expelling Casio, et al. from the
union, was that a copy of the said letter complaint [dated February
24, 1992] was dropped or left in front of E. Casio.[30] It was not
established that said letter-complaint charging Casio, et al. with
acts inimical to the interest of the union was properly served upon
Casio, that Casio willfully refused to accept the said letter-notice, or
that Casio had the authority to receive the same letter-notice on
behalf of the other employees similarly accused. Its worthy to note
that Casio, et al. were expelled only five days after the issuance of
the letter-complaint against them. The Court cannot find proof on
record when the three-day period, within which Casio, et al. was
supposed to file their answer or counter-affidavits, started to run
and had expired. The Court is likewise unconvinced that the said
three-day period was sufficient for Casio, et al. to prepare their
defenses and evidence to refute the serious charges against them.
Contrary to the position of GMC, the acts of Pino, et al. as officers
and board members of IBM-Local 31, in expelling Casio, et al. from
the union, do not enjoy the presumption of regularity in the
performance of official duties, because the presumption applies
only to public officers from the highest to the lowest in the service
of the Government, departments, bureaus, offices, and/or its
political subdivisions.[31]
More importantly, in Liberty Cotton Mills Workers Union v. Liberty
Cotton Mills, Inc.,[32] the Court issued the following reminder to
employers:
The power to dismiss is a normal prerogative of the employer.
However, this is not without limitations. The employer is bound to
exercise caution in terminating the services of his employees
especially so when it is made upon the request of a labor union
pursuant to the Collective Bargaining Agreement. x x x. Dismissals
must not be arbitrary and capricious. Due process must be
observed in dismissing an employee because it affects not only his
position but also his means of livelihood. Employers should
therefore respect and protect the rights of their employees, which
include the right to labor. x x x.
The Court reiterated in Malayang Samahan ng mga Manggagawa sa
M. Greenfield v. Ramos[33] that:
While respondent company may validly dismiss the employees
expelled by the union for disloyalty under the union security clause
of the collective bargaining agreement upon the recommendation
by the union, this dismissal should not be done hastily and
summarily thereby eroding the employees right to due process,
self-organization and security of tenure. The enforcement of union
security clauses is authorized by law provided such enforcement
is not characterized by arbitrariness, and always with due
process. Even on the assumption that the federation had valid
grounds to expel the union officers, due process requires that
these union officers be accorded a separate hearing by
respondent company. (Emphases supplied.)
The twin requirements of notice and hearing constitute the
essential elements of procedural due process. The law requires the
employer to furnish the employee sought to be dismissed with two
written notices before termination of employment can be legally
effected: (1) a written notice apprising the employee of the
particular acts or omissions for which his dismissal is sought in
order to afford him an opportunity to be heard and to defend
himself with the assistance of counsel, if he desires, and (2) a
subsequent notice informing the employee of the employers
decision to dismiss him. This procedure is mandatory and its
absence taints the dismissal with illegality.[34]
Irrefragably, GMC cannot dispense with the requirements of notice
and hearing before dismissing Casio, et al. even when said
dismissal is pursuant to the closed shop provision in the CBA. The
rights of an employee to be informed of the charges against him
and to reasonable opportunity to present his side in a controversy
with either the company or his own union are not wiped away by a
union security clause or a union shop clause in a collective
bargaining agreement. An employee is entitled to be protected not
only from a company which disregards his rights but also from his
own union the leadership of which could yield to the temptation of
swift and arbitrary expulsion from membership and hence dismissal
from his job.[35]
In the case at bar, Casio, et al. did not receive any other
communication from GMC, except the written notice of termination
dated March 24, 1992. GMC, by its own admission, did not conduct
a separate and independent investigation to determine the
sufficiency of the evidence supporting the expulsion of Casio, et al.
by IBP-Local 31. It straight away acceded to the demand of IBP-
Local 31 to dismiss Casio, et al.
The very same circumstances took place in Liberty Cotton Mills,
wherein the Court held that the employer-company acted in bad
faith in dismissing its workers without giving said workers an
opportunity to present their side in the controversy with their
union, thus:
While respondent company, under the Maintenance of Membership
provision of the Collective Bargaining Agreement, is bound to
dismiss any employee expelled by PAFLU for disloyalty, upon its
written request, this undertaking should not be done hastily and
summarily. The company acted in bad faith in dismissing
petitioner workers without giving them the benefit of a
hearing. It did not even bother to inquire from the workers
concerned and from PAFLU itself about the cause of the
expulsion of the petitioner workers. Instead, the company
immediately dismissed the workers on May 30, 1964 after its
receipt of the request of PAFLU on May 29, 1964 in a span of only
one day stating that it had no alternative but to comply with its
obligation under the Security Agreement in the Collective
Bargaining Agreement, thereby disregarding the right of the
workers to due process, self-organization and security of tenure.[36]
(Emphasis ours.)
In sum, the Court finds that GMC illegally dismissed Casio, et al.
because not only did GMC fail to make a determination of the
sufficiency of evidence to support the decision of IBM-Local 31 to
expel Casio, et al., but also to accord the expelled union members
procedural due process, i.e., notice and hearing, prior to the
termination of their employment
Consequently, GMC cannot insist that it has no liability for the
payment of backwages and damages to Casio, et al., and that the
liability for such payment should fall only upon Pino, et al., as the
IBP-Local 31 officers and board members who expelled Casio, et al.
GMC completely missed the point that the expulsion of Casio, et al.
by IBP-Local 31 and the termination of employment of the same
employees by GMC, although related, are two separate and distinct
acts. Despite a closed shop provision in the CBA and the expulsion
of Casio, et al. from IBP-Local 31, law and jurisprudence imposes
upon GMC the obligation to accord Casio, et al. substantive and
procedural due process before complying with the demand of IBP-
Local 31 to dismiss the expelled union members from service. The
failure of GMC to carry out this obligation makes it liable for illegal
dismissal of Casio, et al.
computed from the time their actual compensation was withheld
from them up to the time of their actual reinstatement but if
reinstatement is no longer possible, the backwages shall be
computed from the time of their illegal termination up to the finality
of the decision. Thus, Casio, et al. are entitled to backwages and
separation pay considering that reinstatement is no longer possible
because the positions they previously occupied are no longer
existing, as declared by GMC.[38]
Casio, et al., having been compelled to litigate in order to seek
redress for their illegal dismissal, are entitled to the award of
attorneys fees equivalent to 10% of the total monetary award.[39]
WHEREFORE, the instant petition is hereby DENIED. The assailed
decision of the Court of Appeals dated March 30, 2001 in CA-G.R.
SP No. 40280 is AFFIRMED.
SO ORDERED.


In Malayang Samahan ng mga Manggagawa sa M. Greenfield,[37]

the Court held that notwithstanding the fact that the dismissal was
at the instance of the federation and that the federation undertook
to hold the company free from any liability resulting from the
dismissal of several employees, the company may still be held
liable if it was remiss in its duty to accord the would-be dismissed
employees their right to be heard on the matter.

An employee who is illegally dismissed is entitled to the twin reliefs

of full backwages and reinstatement. If reinstatement is not viable,
separation pay is awarded to the employee. In awarding separation
pay to an illegally dismissed employee, in lieu of reinstatement, the
amount to be awarded shall be equivalent to one month salary for
every year of service. Under Republic Act No. 6715, employees who
are illegally dismissed are entitled to full backwages, inclusive of
allowances and other benefits or their monetary equivalent,
 SECOND DIVISION
[G.R. No. 160828. August 9, 2010.]
PICOP RESOURCES, INCORPORATED (PRI), petitioner, vs.
ANACLETO L. TAÑECA, GEREMIAS S. TATO, JAIME N.
CAMPOS, MARTINIANO A. MAGAYON, JOSEPH B. BALGOA,
MANUEL G. ABUCAY, MOISES M. ALBARAN, MARGARITO G.
ALICANTE, JERRY ROMEO T. AVILA, LORENZO D. CANON,
RAUL P. DUERO, DANILO Y. ILAN, MANUEL M. MATURAN, JR.,
LUISITO R. POPERA, CLEMENTINO C. QUIMAN, ROBERTO Q.
SILOT, CHARLITO D. SINDAY, REMBERT B. SUZON ALLAN J.
TRIMIDAL, and NAMAPRI-SPFL, respondents.
DECISION
PERALTA, J p:
This is a Petition for Review on Certiorari under Rule 45 of the Rules
of Court seeking the reversal of the Decision 1 dated July 25, 2003
and Resolution 2 dated October 23, 2003 of the Court of Appeals in
CA-G.R. SP No. 71760, setting aside the Resolutions dated October
8, 2001 3 and April 29, 2002 4 of the National Labor Relations
Commission in NLRC CA No. M-006309-2001 and reinstating the
Decision 5 dated March 16, 2001 of the Labor Arbiter.
The facts, as culled from the records, are as follows:
On February 13, 2001, respondents Anacleto Tañeca, Loreto
Uriarte, Joseph Balgoa, Jaime Campos, Geremias Tato, Martiniano
Magayon, Manuel Abucay and fourteen (14) others filed a
Complaint for unfair labor practice, illegal dismissal and money
claims against petitioner PICOP Resources, Incorporated (PRI),
Wilfredo Fuentes (in his capacity as PRI's Vice President/Resident
Manager), Atty. Romero Boniel (in his capacity as PRI's Manager of
Legal/Labor), Southern Philippines Federation of Labor (SPFL), Atty.
Wilbur T. Fuentes (in his capacity as Secretary General of SPFL),
Pascasio Trugillo (in his capacity as Local President of Nagkahiusang
Mamumuo sa PICOP Resources, Inc.-SPFL [NAMAPRI-SPFL]) and
Atty. Proculo Fuentes, Jr. 6 (in his capacity as National President of
SPFL).
Respondents were regular rank-and-file employees of PRI and bona
fide members of Nagkahiusang Mamumuo sa PRI Southern
Philippines Federation of Labor (NAMAPRI-SPFL), which is the
collective bargaining agent for the rank-and-file employees of
petitioner PRI. HSCATc
PRI has a collective bargaining agreement (CBA) with NAMAPRI-
SPFL for a period of five (5) years from May 22, 1995 until May 22,
2000.
The CBA contained the following union security provisions:
"Article II — Union Security and Check-Off
Section 6. Maintenance of membership. —
6.1 All employees within the appropriate bargaining unit who are
members of the UNION at the time of the signing of this
AGREEMENT shall, as a condition of continued employment by the
COMPANY, maintain their membership in the UNION in good
standing during the effectivity of this AGREEMENT.
6.2 Any employee who may hereinafter be employed to occupy a
position covered by the bargaining unit shall be advised by the
COMPANY that they are required to file an application for
membership with the UNION within thirty (30) days from the date
his appointment shall have been made regular.
6.3 The COMPANY, upon the written request of the UNION
and after compliance with the requirements of the New
Labor Code, shall give notice of termination of services of
any employee who shall fail to fulfill the condition provided
in Section 6.1 and 6.2 of this Article, but it assumes no
obligation to discharge any employee if it has reasonable grounds
to believe either that membership in the UNION was not available
to the employee on the same terms and conditions generally
applicable to other members, or that membership was denied or
terminated for reasons other than voluntary resignation or non-
payment of regular union dues. Separation under the Section is
understood to be for cause, consequently, the dismissed employee
is not entitled to separation benefits provided under the New Labor
Code and in this AGREEMENT." 7
On May 16, 2000, Atty. Proculo P. Fuentes (Atty. Fuentes) sent a
letter to the management of PRI demanding the termination of
employees who allegedly campaigned for, supported and signed the
Petition for Certification Election of the Federation of Free Workers
Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL
considered said act of campaigning for and signing the petition for
certification election of FFW as an act of disloyalty and a valid basis
for termination for a cause in accordance with its Constitution and
By-Laws, and the terms and conditions of the CBA, specifically
Article II, Sections 6.1 and 6.2 on Union Security Clause.
In a letter dated May 23, 2000, Mr. Pascasio Trugillo requested the
management of PRI to investigate those union members who
signed the Petition for Certification Election of FFW during the
existence of their CBA. NAMAPRI-SPFL, likewise, furnished PRI with
machine copy of the authorization letters dated March 19, 20 and
21, 2000, which contained the names and signatures of employees.
Acting on the May 16 and May 23, 2000 letters of the NAMAPRI-
SPFL, Atty. Romero A. Boniel issued a memorandum addressed to
the concerned employees to explain in writing within 72 hours why
their employment should not be terminated due to acts of disloyalty
as alleged by their Union. EcHTDI
Within the period from May 26 to June 2, 2000, a number of
employees who were served "explanation memorandum" submitted
their explanation, while some did not.
In a letter dated June 2, 2000, Atty. Boniel endorsed the
explanation letters of the employees to Atty. Fuentes for evaluation
and final disposition in accordance with the CBA.
After evaluation, in a letter dated July 12, 2000, Atty. Fuentes
advised the management of PRI that the Union found the member's
explanations to be unsatisfactory. He reiterated the demand for
termination, but only of 46 member-employees, including
respondents.
On October 16, 2000, PRI served notices of termination for causes
to the 31 out of the 46 employees whom NAMAPRIL-SPFL sought to
be terminated on the ground of "acts of disloyalty" committed
against it when respondents allegedly supported and signed the
Petition for Certification Election of FFW before the "freedom
period" during the effectivity of the CBA. A Notice dated October
21, 2000 was also served on the Department of Labor and
Employment Office (DOLE), Caraga Region.
Respondents then accused PRI of Unfair Labor Practice punishable
under Article 248 (a), (b), (c), (d) and (e) of the Labor Code,while
Atty. Fuentes and Wilbur T. Fuentes and Pascasio Trujillo were
accused of violating Article 248 (a) and (b) of the Labor Code.
Respondents alleged that none of them ever withdrew their
membership from NAMAPRI-SPFL or submitted to PRI any union
dues and check-off disauthorizations against NAMAPRI-SPFL. They
claimed that they continue to remain on record as bona fide
members of NAMAPRI-SPFL. They pointed out that a patent
manifestation of one's disloyalty would have been the explicit
resignation or withdrawal of membership from the Union
accompanied by an advice to management to discontinue union
dues and check-off deductions. They insisted that mere affixation of
signature on such authorization to file a petition for certification
election was not per se an act of disloyalty. They claimed that while
it may be true that they signed the said authorization before the
start of the freedom period, the petition of FFW was only filed with
the DOLE on May 18, 2000, or 58 days after the start of the
freedom period.
Respondents maintained that their acts of signing the authorization
signifying support to the filing of a Petition for Certification Election
of FFW was merely prompted by their desire to have a certification
election among the rank-and-file employees of PRI with hopes of a
CBA negotiation in due time; and not to cause the downfall of
NAMAPRI-SPFL. ADSTCI
Furthermore, respondents contended that there was lack of
procedural due process. Both the letter dated May 16, 2000 of Atty.
Fuentes and the follow-up letter dated May 23, 2000 of Trujillo
addressed to PRI did not mention their names. Respondents
stressed that NAMAPRI-SPFL merely requested PRI to investigate
union members who supported the Petition for Certification Election
of FFW. Respondents claimed that they should have been
summoned individually, confronted with the accusation and
investigated accordingly and from where the Union may base its
findings of disloyalty and, thereafter, recommend to management
the termination for causes.
Respondents, likewise, argued that at the time NAMAPRI-SPFL
demanded their termination, it was no longer the bargaining
representative of the rank-and-file workers of PRI, because the CBA
had already expired on May 22, 2000. Hence, there could be no
justification in PRI's act of dismissing respondents due to acts of
disloyalty.
Respondents asserted that the act of PRI, Wilfredo Fuentes and
Atty. Boniel in giving in to the wishes of the Union in discharging
them on the ground of disloyalty to the Union amounted to
interference with, restraint or coercion of respondents' exercise of
their right to self-organization. The act indirectly required
petitioners to support and maintain their membership with
NAMAPRI-SPFL as a condition for their continued employment. The
acts of NAMAPRI-SPFL, Atty. Fuentes and Trujillo amounted to
actual restraint and coercion of the petitioners in the exercise of
their rights to self-organization and constituted acts of unfair labor
practice.
In a Decision 8 dated March 16, 2001, the Labor Arbiter declared
the respondents' dismissal to be illegal and ordered PRI to reinstate
respondents to their former or equivalent positions without loss of
seniority rights and to jointly and solidarily pay their backwages.
The dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby entered:
1. Declaring complainants' dismissal illegal; and
2. Ordering respondents Picop Resources Inc. (PRI) and NAMAPRI-
SPFL to reinstate complainants to their former or equivalent
positions without loss of seniority rights and to jointly and solidarily
pay their backwages in the total amount of P420,339.30 as shown
in the said Annex "A" plus damages in the amount of P10,000.00
each, or a total of P210,000.00 and attorney's fees equivalent to
10% of the total monetary award.
SO ORDERED. 9 ESCDHA
PRI and NAMAPRI-SPFL appealed to the National Labor Relations
Commission (NLRC), which reversed the decision of the Labor
Arbiter; thus, declaring the dismissal of respondents from
employment as legal.
Respondents filed a motion for reconsideration, but it was denied
on April 29, 2001 for lack of merit.
Unsatisfied, respondents filed a petition for certiorari under Rule 65
before the Court of Appeals and sought the nullification of the
Resolution of the NLRC dated October 8, 2001 which reversed the
Decision dated March 16, 2001 of Labor Arbiter and the Resolution
dated April 29, 2002, which denied respondent's motion for
reconsideration.
On July 25, 2003, the Court of Appeals reversed and set aside the
assailed Resolutions of the NLRC and reinstated the Decision dated
March 16, 2001 of the Labor Arbiter.
Thus, before this Court, PRI, as petitioner, raised the following
issues:
I during the 60-day period and/or until a new agreement is reached
WHETHER AN EXISTING COLLECTIVELY (sic) BARGAINING
AGREEMENT (CBA) CAN BE GIVEN ITS FULL FORCE AND EFFECT IN
ALL ITS TERMS AND CONDITION INCLUDING ITS UNION SECURITY
CLAUSE, EVEN BEYOND THE 5-YEAR PERIOD WHEN NO NEW CBA
HAS YET BEEN ENTERED INTO.
II
WHETHER OR NOT AN HONEST ERROR IN THE INTERPRETATION
AND/OR CONCLUSION OF LAW FALL WITHIN THE AMBIT OF THE
EXTRAORDINARY REMEDY OF CERTIORARI UNDER RULE 65,
REVISED RULES OF COURT. 10
We will first delve on the technical issue raised.
PRI perceived a patent error in the mode of appeal elected by
respondents for the purpose of assailing the decision of the NLRC.
It claimed that assuming that the NLRC erred in its judgment on
the legal issues, its error, if any, is not tantamount to abuse of
discretion falling within the ambit of Rule 65.
Petitioner is mistaken. ESCDHA
The power of the Court of Appeals to review NLRC decisions via
Rule 65 or Petition for Certiorari has been settled as early as in our
decision in St. Martin Funeral Home v. National Labor Relations
Commission. 11 This Court held that the proper vehicle for such
review was a Special Civil Action for Certiorari under Rule 65 of the
Rules of Court, and that this action should be filed in the Court of
Appeals in strict observance of the doctrine of the hierarchy of
courts. 12 Moreover, it is already settled that under Section 9 of
Batas Pambansa Blg. 129, as amended by Republic Act No.
7902[10] (An Act Expanding the Jurisdiction of the Court of
Appeals, amending for the purpose of Section Nine of Batas
Pambansa Blg. 129 as amended, known as the Judiciary
Reorganization Act of 1980), the Court of Appeals — pursuant to
the exercise of its original jurisdiction over Petitions for Certiorari —
is specifically given the power to pass upon the evidence, if and
when necessary, to resolve factual issues. 13
We now come to the main issue of whether there was just cause to
terminate the employment of respondents.
PRI argued that the dismissal of the respondents was valid and
legal. It claimed to have acted in good faith at the instance of the
incumbent union pursuant to the Union Security Clause of the CBA.
Citing Article 253 of the Labor Code,14 PRI contends that as parties
to the CBA, they are enjoined to keep the status quo and continue
in full force and effect the terms and conditions of the existing CBA
by the parties.
Petitioner's argument is untenable.
"Union security" is a generic term, which is applied to and
comprehends "closed shop," "union shop," "maintenance of
membership," or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as
a condition affecting employment. There is union shop when all new
regular employees are required to join the union within a certain
period as a condition for their continued employment. There is
maintenance of membership shop when employees, who are union
members as of the effective date of the agreement, or who
thereafter become members, must maintain union membership as
a condition for continued employment until they are promoted or
transferred out of the bargaining unit, or the agreement is
terminated. A closed shop, on the other hand, may be defined as
an enterprise in which, by agreement between the employer and
his employees or their representatives, no person may be employed
in any or certain agreed departments of the enterprise unless he or
she is, becomes, and, for the duration of the agreement, remains a
member in good standing of a union entirely comprised of or of
which the employees in interest are a part. 15
However, in terminating the employment of an employee by
enforcing the union security clause, the employer needs to
determine and prove that: (1) the union security clause is
applicable; (2) the union is requesting for the enforcement of the
union security provision in the CBA; and (3) there is sufficient
evidence to support the decision of the union to expel the employee
from the union. These requisites constitute just cause for
terminating an employee based on the union security provision of
the CBA. 16
As to the first requisite, there is no question that the CBA between
PRI and respondents included a union security clause, specifically, a
maintenance of membership as stipulated in Sections 6 of Article II,
Union Security and Check-Off. Following the same provision, PRI,
upon written request from the Union, can indeed terminate the
employment of the employee who failed to maintain its good
standing as a union member.
Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2)
occasions demanded from PRI, in their letters dated May 16 and
23, 2000, to terminate the employment of respondents due to their
acts of disloyalty to the Union.
However, as to the third requisite, we find that there is no sufficient
evidence to support the decision of PRI to terminate the
employment of the respondents.
PRI alleged that respondents were terminated from employment
based on the alleged acts of disloyalty they committed when they
signed an authorization for the Federation of Free Workers (FFW) to
file a Petition for Certification Election among all rank-and-file
employees of PRI. It contends that the acts of respondents are a
violation of the Union Security Clause, as provided in their
Collective Bargaining Agreement. HSCATc
We are unconvinced.
We are in consonance with the Court of Appeals when it held that
the mere signing of the authorization in support of the Petition for
Certification Election of FFW on March 19, 20 and 21, or before the
"freedom period," is not sufficient ground to terminate the
employment of respondents inasmuch as the petition itself was
actually filed during the freedom period. Nothing in the records
would show that respondents failed to maintain their membership
in good standing in the Union. Respondents did not resign or
withdraw their membership from the Union to which they belong.
Respondents continued to pay their union dues and never joined
the FFW.
Significantly, petitioner's act of dismissing respondents stemmed
from the latter's act of signing an authorization letter to file a
petition for certification election as they signed it outside the
freedom period. However, we are constrained to believe that an
"authorization letter to file a petition for certification election" is
different from an actual "Petition for Certification Election."
Likewise, as per records, it was clear that the actual Petition for
Certification Election of FFW was filed only on May 18, 2000. 17
Thus, it was within the ambit of the freedom period which
commenced from March 21, 2000 until May 21, 2000. Strictly
speaking, what is prohibited is the filing of a petition for
certification election outside the 60-day freedom period. 18 This is
not the situation in this case. If at all, the signing of the
authorization to file a certification election was merely preparatory
to the filing of the petition for certification election, or an exercise
of respondents' right to self-organization.
Moreover, PRI anchored their decision to terminate respondents'
employment on Article 253 of the Labor Code which states that "it
shall be the duty of both parties to keep the status quo and to
continue in full force and effect the terms and conditions of the
existing agreement during the 60-day period and/or until a new
agreement is reached by the parties." It claimed that they are still
bound by the Union Security Clause of the CBA even after the
expiration of the CBA; hence, the need to terminate the
employment of respondents.
Petitioner's reliance on Article 253 is misplaced.
The provision of Article 256 of the Labor Code is particularly
enlightening. It reads:
Article 256. Representation issue in organized establishments. —
In organized establishments, when a verified petition questioning
the majority status of the incumbent bargaining agent is filed
before the Department of Labor and Employment within the sixty-
day period before the expiration of a collective bargaining
agreement, the Med-Arbiter shall automatically order an election by
secret ballot when the verified petition is supported by the written
consent of at least twenty-five percent (25%) of all the employees
in the bargaining unit to ascertain the will of the employees in the
appropriate bargaining unit. To have a valid election, at least a
majority of all eligible voters in the unit must have cast their votes.
The labor union receiving the majority of the valid votes cast shall
be certified as the exclusive bargaining agent of all the workers in
the unit. When an election which provides for three or more choices
results in no choice receiving a majority of the valid votes cast, a
run-off election shall be conducted between the labor unions
receiving the two highest number of votes: Provided, That the total
number of votes for all contending unions is at least fifty per cent
(50%) of the number of votes cast.
At the expiration of the freedom period, the employer shall continue
to recognize the majority status of the incumbent bargaining agent
where no petition for certification election is filed. 19 HTCIcE
Applying the same provision, it can be said that while it is
incumbent for the employer to continue to recognize the majority
status of the incumbent bargaining agent even after the expiration
of the freedom period, they could only do so when no petition for
certification election was filed. The reason is, with a pending
petition for certification, any such agreement entered into by
management with a labor organization is fraught with the risk that
such a labor union may not be chosen thereafter as the collective
bargaining representative. 20 The provision for status quo is
conditioned on the fact that no certification election was filed during
the freedom period. Any other view would render nugatory the
clear statutory policy to favor certification election as the means of
ascertaining the true expression of the will of the workers as to
which labor organization would represent them. 21
In the instant case, four (4) petitions were filed as early as May 12,
2000. In fact, a petition for certification election was already
ordered by the Med-Arbiter of DOLE Caraga Region on August 23,
2000. 22 Therefore, following Article 256, at the expiration of the
freedom period, PRI's obligation to recognize NAMAPRI-SPFL as the
incumbent bargaining agent does not hold true when petitions for
certification election were filed, as in this case.
Moreover, the last sentence of Article 253 which provides for
automatic renewal pertains only to the economic provisions of the
CBA, and does not include representational aspect of the CBA. An
existing CBA cannot constitute a bar to a filing of a petition for
certification election. When there is a representational issue, the
status quo provision in so far as the need to await the creation of a
new agreement will not apply. Otherwise, it will create an absurd
situation where the union members will be forced to maintain
membership by virtue of the union security clause existing under
the CBA and, thereafter, support another union when filing a
petition for certification election. If we apply it, there will always be
an issue of disloyalty whenever the employees exercise their right
to self-organization. The holding of a certification election is a
statutory policy that should not be circumvented, 23 or
compromised.
Time and again, we have ruled that we adhere to the policy of
enhancing the welfare of the workers. Their freedom to choose who
should be their bargaining representative is of paramount
importance. The fact that there already exists a bargaining
representative in the unit concerned is of no moment as long as the
petition for certification election was filed within the freedom
period. What is imperative is that by such a petition for certification
election the employees are given the opportunity to make known of
who shall have the right to represent them thereafter. Not only
some, but all of them should have the right to do so. What is
equally important is that everyone be given a democratic space in
the bargaining unit concerned. 24
We will emphasize anew that the power to dismiss is a normal
prerogative of the employer. This, however, is not without
limitations. The employer is bound to exercise caution in
terminating the services of his employees especially so when it is
made upon the request of a labor union pursuant to the Collective
Bargaining Agreement. Dismissals must not be arbitrary and
capricious. Due process must be observed in dismissing an
employee, because it affects not only his position but also his
means of livelihood. Employers should, therefore, respect and
protect the rights of their employees, which include the right to
labor. 25 EcHTCD
An employee who is illegally dismissed is entitled to the twin reliefs
of full backwages and reinstatement. If reinstatement is not viable,
separation pay is awarded to the employee. In awarding separation
pay to an illegally dismissed employee, in lieu of reinstatement, the
amount to be awarded shall be equivalent to one month salary for
every year of service. Under Republic Act No. 6715, employees who
are illegally dismissed are entitled to full backwages, inclusive of
allowances and other benefits, or their monetary equivalent,
computed from the time their actual compensation was withheld
from them up to the time of their actual reinstatement. But if
reinstatement is no longer possible, the backwages shall be
computed from the time of their illegal termination up to the finality
of the decision. Moreover, respondents, having been compelled to
litigate in order to seek redress for their illegal dismissal, are
entitled to the award of attorney's fees equivalent to 10% of the
total monetary award. 26
WHEREFORE, the petition is DENIED. The Decision dated July 25,
2003 and the Resolution dated October 23, 2003 of the Court of
Appeals in CA-G.R. SP No. 71760, which set aside the Resolutions
dated October 8, 2001 and April 29, 2002 of the National Labor
Relations Commission in NLRC CA No. M-006309-2001, are
AFFIRMED accordingly. Respondents are hereby awarded full
backwages and other allowances, without qualifications and
diminutions, computed from the time they were illegally dismissed
up to the time they are actually reinstated. Let this case be
remanded to the Labor Arbiter for proper computation of the full
backwages due respondents, in accordance with Article 279 of the
Labor Code,as expeditiously as possible.
SO ORDERED.
Carpio, Nachura, Abad and Mendoza, JJ., concur.
||| (PICOP Resources, Inc. v. Tañeca, G.R. No. 160828, [August 9,
2010], 641 PHIL 175-194)

 EN BANC
[G.R. No. L-25246. September 12, 1974.]
BENJAMIN VICTORIANO, plaintiff-appellee, vs. ELIZALDE
ROPE WORKERS' UNION and ELIZALDE ROPE FACTORY, INC.,
defendants, ELIZALDE ROPE WORKERS' UNION, defendant-
appellant.
Salonga, Ordoñez, Yap, Sicat & Associates for plaintiff-
appellee.
Cipriano Cid & Associates for defendant-appellant.
DECISION
ZALDIVAR, J p:
Appeal to this Court on purely questions of law from the decision of
the Court of First Instance of Manila in its Civil Case No. 58894.
The undisputed facts that spawned the instant case follow:
Benjamin Victoriano (hereinafter referred to as Appellee), a
member of the religious sect known as the "Iglesia ni Cristo", had
been in the employ of the Elizalde Rope Factory, Inc. (hereinafter
referred to as Company) since 1958. As such employee, he was a
member of the Elizalde Rope Workers' Union (hereinafter referred
to as Union) which had with the Company a collective bargaining
agreement containing a closed shop provision which reads as
follows:
"Membership in the Union shall be required as a condition of
employment for all permanent employees workers covered by this
Agreement."
The collective bargaining agreement expired on March 3, 1964 but
was renewed the following day, March 4, 1964.
Under Section 4(a), paragraph 4, of Republic Act No. 875, prior to
its amendment by Republic Act No. 3350, the employer was not
precluded "from making an agreement with a labor organization to
require as a condition of employment membership therein, if such
labor organization is the representative of the employees." On June
18, 1961, however, Republic Act No. 3350 was enacted, introducing
an amendment to paragraph (4) subsection (a) of section 4 of
Republic Act No. 875, as follows: . . . "but such agreement shall not
cover members of any religious sects which prohibit affiliation of
their members in any such labor organization".
Being a member of a religious sect that prohibits the affiliation of
its members with any labor organization, Appellee presented his
resignation to appellant Union in 1962, and when no action was
taken thereon, he reiterated his resignation on September 3, 1974.
Thereupon, the Union wrote a formal letter to the Company asking
the latter to separate Appellee from the service in view of the fact
that he was resigning from the Union as a member. The
management of the Company in turn notified Appellee 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, docketed as Civil Case No. 58894 in the Court
of First Instance of Manila to enjoin the Company and the Union
from dismissing Appellee. 1 In its answer, the Union invoked the
"union security clause" of the collective bargaining agreement;
assailed the constitutionality of Republic Act No. 3350; and
contended that the Court had no jurisdiction over the case,
pursuant to Republic Act No. 875, Sections 24 and 9 (d) and (e). 2
Upon the facts agreed upon by the parties during the pre-trial
conference, the Court a quo rendered its decision on August 26,
1965, the dispositive portion of which reads:
"IN VIEW OF THE FOREGOING, judgment is rendered enjoining the
defendant Elizalde Rope Factory, Inc. from dismissing the plaintiff
from his present employment and sentencing the defendant Elizalde
Rope Workers' Union to pay the plaintiff P500 for attorney's fees
and the costs of this action." 3
From this decision, the Union appealed directly to this Court on
purely questions of law, assigning the following errors:
"I. That the lower court erred when it did not rule that Republic Act
No. 3350 is unconstitutional.
"II. That the lower court erred when it sentenced appellant herein
to pay plaintiff the sum of P500 as attorney's fees and the cost
thereof."
In support of the alleged unconstitutionality of Republic Act No.
3350, the Union contented, firstly, that the Act infringes on the
fundamental right to form lawful associations; that "the very
phraseology of said Republic Act 3350, that membership in a labor
organization is banned to all those belonging to such religious sect
prohibiting affiliation with any labor organization" 4 , "prohibits all
the members of a given religious sect from joining any labor union
if such sect prohibits affiliations of their members thereto" 5 ; and,
consequently, deprives said members of their constitutional right to
form or join lawful associations or organizations guaranteed by the
Bill of Rights, and thus becomes obnoxious to Article III, Section 1
(6) of the 1935 Constitution. 6
Secondly, the Union contended that Republic Act No. 3350 is
unconstitutional for impairing the obligation of contracts in that,
while the Union is obliged to comply with its collective bargaining
agreement containing a "closed shop provision," the Act relieves
the employer from its reciprocal obligation of cooperating in the
maintenance of union membership as a condition of employment;
and that said Act, furthermore, impairs the Union's rights as it
deprives the union of dues from members who, under the Act, are
relieved from the obligation to continue as such members. 7
Thirdly, the Union contended that Republic Act No. 3350
discriminatorily favors those religious sects which ban their
members from joining labor unions, in violation of Article III,
Section 1 (7) of the 1935 Constitution; and while said Act unduly
protects certain religious sects, it leaves no rights or protection to
labor organizations. 8
Fourthly, Republic Act No. 3350, asserted the Union, violates the
constitutional provision that "no religious test shall be required for
the exercise of a civil right," in that the laborer's exercise of his civil
right to join associations for purposes not contrary to law has to be
determined under the Act by his affiliation with a religious sect;
that conversely, if a worker has to sever his religious connection
with a sect that prohibits membership in a labor organization in
order to be able to join a labor organization, said Act would violate
religious freedom. 9
Fifthly, the Union contended that Republic Act No. 3350, violates
the "equal protection of laws" clause of the Constitution, it being a
discriminatory legislation, inasmuch as by exempting from the
operation of closed shop agreement the members of the "Iglesia ni
Cristo", it has granted said members undue advantages over their
fellow workers, for while the Act exempts them from union
obligation and liability, it nevertheless entitles them at the same
time to the enjoyment of all concessions, benefits and other
emoluments that the union might secure from the employer. 10
Sixthly, the Union contended that Republic Act No. 3350 violates
the constitutional provision regarding the promotion of social
justice. 11
Appellant Union, furthermore, asserted that a "closed shop
provision" in a collective bargaining agreement cannot be
considered violative of religious freedom, as to call for the
amendment introduced by Republic Act No. 3350; 12 and that
unless Republic Act No. 3350 is declared unconstitutional, trade
unionism in this country would be wiped out as employers would
prefer to hire or employ members of the Iglesia ni Cristo in order to
do away with labor organizations. 13
Appellee, assailing appellant's arguments, contended that Republic
Act No. 3350 does not violate the right to form lawful associations,
for the right to join associations includes the right not to join or to
resign from a labor organization, if one's conscience does not allow
his membership therein, and the Act has given substance to such
right by prohibiting the compulsion of workers to join labor
organizations; 14 that said Act does not impair the obligation of
contracts for said law formed part of, and was incorporated into,
the terms of the closed shop agreement; 15 that the Act does not
violate the establishment of religion clause or separation of Church
and State, for Congress, in enacting said law, merely
accommodated the religious needs of those workers whose religion
prohibits its members from joining labor unions, and balanced the
collective rights of organized labor with the constitutional right of
an individual to freely exercise his chosen religion; that the
constitutional right to the free exercise of one's religion has primacy
and preference over union security measures which are merely
contractual 16 ; that said Act does not violate the constitutional
provision of equal protection, for the classification of workers under
the Act depending on their religious tenets is based on substantial
distinction, is germane to the purpose of the law, and applies to all
the members of a given class; 17 that said Act, finally, does not
violate the social justice policy of the Constitution, for said Act was
enacted precisely to equalize employment opportunities for all
citizens in the midst of the diversities of their religious beliefs. 18
I. Before We proceed to the discussion of the first assigned error, it
is necessary to premise that there are some thoroughly established
principles which must be followed in all cases where questions of
constitutionality as obtains in the instant case are involved. All
presumptions are indulged in favor of constitutionality; one who
attacks a statute, alleging unconstitutionality must prove its
invalidity beyond a reasonable doubt; that a law may work hardship
does not render it unconstitutional; that if any reasonable basis
may be conceived which supports the statute, it will be upheld, and
the challenger must negate all possible bases; that the courts are
not concerned with the wisdom, justice, policy, or expediency of a
statute; and that a liberal interpretation of the constitution in favor
of the constitutionality of legislation should be adopted. 19
1. Appellant Union's contention that Republic Act No. 3350 prohibits
and bans the members of such religious sects that forbid affiliation
of their members with labor unions from joining labor unions
appears nowhere in the wording of Republic Act No. 3350; neither
can the same be deduced by necessary implication therefrom. It is
not surprising, therefore, that appellant, having thus misread the
Act, committed the error of contending that said Act is obnoxious to
the constitutional provision on freedom of association.
Both the Constitution and Republic Act No. 875 recognize freedom
of association. Section 1 (6) of Article III of the Constitution of
1935, as well as Section 7 of Article n of the Constitution of 1973,
provide that the right to form associations or societies for purposes
not contrary to law shall not be abridged. Section 3 of Republic Act
No. 875 provides that employees shall have the right to self-
organization and to form, join or assist labor organizations of their
own choosing for the purpose of collective bargaining and to
engage in concerted activities for the purpose of collective
bargaining and other mutual aid or protection. What the
Constitution and the Industrial Peace Act recognize and guarantee
is the "right" to form or join associations. Notwithstanding the
different theories propounded by the different schools of
jurisprudence regarding the nature and contents of a "right", it can
be safely said that whatever theory one subscribes to, a right
comprehends at least two broad notions, namely: first, liberty or
freedom, i e., the absence of legal restraint, whereby an employee
may act for himself without being prevented by law; and second,
power, whereby an employee may, as he pleases, join or refrain
from joining an association. It is, therefore, the employee who
should decide for himself whether he should join or not an
association; and should he choose to join, he himself makes up his
mind as to which association he would join; and even after he has
joined, he still retains the liberty and the power to leave and cancel
his membership with said organization at any time. 20 It is clear,
therefore, that the right to join a union includes the right to abstain
from joining any union. 21 Inasmuch as what both the Constitution
and the Industrial Peace Act have recognized, and guaranteed to
the employee, is the "right" to join associations of his choice, it
would be absurd to say that the law also imposes, in the same
breath, upon the employee the duty to join associations. The law
does not enjoin an employee to sign up with any association.
The right to refrain from joining labor organizations recognized by
Section 3 of the Industrial Peace Act is, however, limited. The legal
protection granted to such 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. Thus Section 4
(a) (4) of the Industrial Peace Act, before its amendment by
Republic Act No. 3350, provides that although it would be an unfair
labor practice for an employer "to discriminate in regard to hire or
tenure of employment or any term or condition of employment to
encourage or discourage membership in any labor organization" the
employer is, however, not precluded "from making an agreement
with a labor organization to require as a condition of employment
membership therein, if such labor organization is the representative
of the employees". By virtue, therefore, of a closed shop
agreement, before the enactment of Republic Act No. 3350, if any
person, regardless of his religious beliefs, wishes to be employed or
to keep his employment, he must become a member of the
collective bargaining union. Hence, the right of said employee not
to join the labor union is curtailed and withdrawn.
To that all embracing coverage of the closed shop arrangement,
Republic Act No. 3350 introduced an exception, when it added to
Section 4 (a) (4) of the Industrial Peace Act the following proviso:
"but such agreement shall not cover members of any religious sects
which prohibit affiliation of their members in any such labor
organization". Republic Act No. 3350 merely excludes ipso jure
from the application and coverage of the closed shop agreement
the employees belonging to any religious sects which prohibit
affiliation of their members with any labor organization. What the
exception provides, therefore, is that members of said religious
sects cannot be compelled or coerced to join labor unions even
when said unions have closed shop agreements with the
employers; that in spite of any closed shop agreement, members of
said religious sects cannot be refused employment or dismissed
from their jobs on the sole ground that they are not members of
the collective bargaining union. It is clear, therefore, that the
assailed Act, far from infringing the constitutional provision on
freedom of association, upholds and reinforces it. It does not
prohibit the members of said religious sects from affiliating with
labor unions. It still leaves to said members the liberty and the
power to affiliate, or not to affiliate, with labor unions. If,
notwithstanding their religious beliefs, the members of said
religious sects prefer to sign up with the labor union, they can do
so. If in deference and fealty to their religious faith, they refuse to
sign up, they can do so; the law does not coerce them to join;
neither does the law prohibit them from joining; and neither may
the employer or labor union compel them to join. Republic Act No.
3350, therefore, does not violate the constitutional provision on
freedom of association.
2. Appellant Union also contends that the Act is unconstitutional for
impairing the obligation of its contract, specifically, the "union
security clause" embodied in its Collective Bargaining Agreement
with the Company, by virtue of which "membership in the union
was required as a condition for employment for all permanent
employees workers". This agreement was already in existence at
the time Republic Act No. 3350 was enacted of June 18, 1961, and
it cannot, therefore, be deemed to have been incorporated into the
agreement. But by reason of this amendment, Appellee, as well as
others similarly situated, could no longer be dismissed from his job
even if he should cease to be a member, or disaffiliate from the
Union, and the Company could continue employing him
notwithstanding his disaffiliation from the Union. The Act, therefore,
introduced a change into the express terms of the union security
clause; the Company was partly absolved by law from the
contractual obligation it had with the Union of employing only Union
members in permanent positions. It cannot be denied, therefore,
that there was indeed an impairment of said union security clause.
According to Black, any statute which introduces a change into the
express terms of the contract, or its legal construction, or its
validity, or its discharge, or the remedy for its enforcement, impairs
the contract. The extent of the change is not material. It is not a
question of degree or manner or cause, but of encroaching in any
respect on its obligation or dispensing with any part of its force.
There is an impairment of the contract if either party is absolved by
law from its performance. 22 Impairment has also been predicated
on laws which, without destroying contracts, derogate from
substantial contractual rights. 23
It should not be overlooked, however, that the prohibition to impair
the obligation of contracts is not absolute and unqualified. The
prohibition is general, affording a broad outline and requiring
construction to fill in the details. The prohibition is not to be read
with literal exactness like a mathematical formula, for it prohibits
unreasonable impairment only. 24 In spite of the constitutional
prohibition, the State continues to possess authority to safeguard
the vital interests of its people. Legislation appropriate to
safeguarding said interests may modify or abrogate contracts
already in effect. 25 For not only are existing laws read into
contracts in order to fix the obligations as between the parties, but
the reservation of essential attributes of sovereign power is also
read into contracts as a postulate of the legal order. All contracts
made with reference to any matter that is subject to regulation
under the police power must be understood as made in reference to
the possible exercise of that power. 26 Otherwise, important and
valuable reforms may be precluded by the simple device of entering
into contracts for the purpose of doing that which otherwise may be
prohibited. The policy of protecting contracts against impairment
presupposes the maintenance of a government by virtue of which
contractual relations are worthwhile — a government which retains
adequate authority to secure the peace and good order of society.
The contract clause of the Constitution must, therefore, be not only
in harmony with, but also in subordination to, in appropriate
instances, the reserved power of the state to safeguard the vital
interests of the people. It follows that not all legislations, which
have the effect of impairing a contract, are obnoxious to the
constitutional prohibition as to impairment, and a statute passed in
the legitimate exercise of police power, although it incidentally
destroys existing contract rights, must be upheld by the courts.
This has special application to contracts regulating relations
between capital and labor which are not merely contractual, and
said labor contracts, for being impressed with public interest, must
yield to the common good. 27
In several occasions this Court declared that the prohibition against
impairing the obligations of contracts has no application to statutes
relating to public subjects within the domain of the general
legislative powers of the state involving public welfare. 28 Thus,
this Court also held that the Blue Sunday Law was not an
infringement of the obligation of a contract that required the
employer to furnish work on Sundays to his employees, the law
having been enacted to secure the well-being and happiness of the
laboring class, and being, furthermore, a legitimate exercise of the
police power. 29
In order to determine whether legislation unconstitutionally impairs
contract obligations, no unchanging yardstick, applicable at all
times and under all circumstances, by which the validity of each
statute may be measured or determined, has been fashioned, but
every case must be determined upon its own circumstances.
Legislation impairing the obligation of contracts can be sustained
when it is enacted for the promotion of the general good of the
people, and when the means adopted to secure that end are
reasonable. Both the end sought and the means adopted must be
legitimate, i.e., within the scope of the reserved power of the state
construed in harmony with the constitutional limitation of that
power. 30
What then was the purpose sought to be achieved by Republic Act
No. 3350? Its purpose was to insure freedom of belief and religion,
and to promote the general welfare by preventing discrimination
against those members of religious sects which prohibit their
members from joining labor unions, confirming thereby their
natural, statutory and constitutional right to work, the fruits of
which work are usually the only means whereby they can maintain
their own life and the life of their dependents. It cannot be gainsaid
that said purpose is legitimate.
The questioned Act also provides protection to members of said
religious sects against two aggregates of group strength from which
the individual needs protection. The individual employee, at various
times in his working life, is confronted by two aggregates of power
— collective labor, directed by a union, and collective capital,
directed by management. The union, an institution developed to
organize labor into a collective force and thus protect the individual
employee from the power of collective capital, is, paradoxically,
both the champion of employee rights, and a new source of their
frustration. Moreover, when the Union interacts with management,
it produces yet a third aggregate of group strength from which the
individual also needs protection — the collective bargaining
relationship. 31
The aforementioned purpose of the amendatory law is clearly seen
in the Explanatory Note to House Bill No. 5859, which later became
Republic Act No. 3350, as follows:
"It would be unthinkable indeed to refuse employing a person who,
on account of his religious beliefs and convictions, cannot accept
membership in a labor organization although he possesses all the
qualifications for the job. This is tantamount to punishing such
person for believing in a doctrine he has a right under the law to
believe in. The law would not allow discrimination to flourish to the
detriment of those whose religion discards membership in any labor
organization, Likewise, the law would not commend the deprivation
of their right to work and pursue a modest means of livelihood,
without in any manner violating their religious faith and/or belief."
32
It cannot be denied, furthermore, that the means adopted by the
Act to achieve that purpose — exempting the members of said
religious sects from coverage of union security agreements — is
reasonable.
It may not be amiss to point out here that the free exercise of
religious profession or belief is superior to contract rights. In case
of conflict, the latter must, therefore, yield to the former. The
Supreme Court of the United States has also declared on several
occasions that the rights in the First Amendment, which include
freedom of religion, enjoy a preferred position in the constitutional
system. 33 Religious freedom, although not unlimited, is a
fundamental personal right and liberty, 34 and has a preferred
position in the hierarchy of values. Contractual rights, therefore,
must yield to freedom of religion. It is only where unavoidably
necessary to prevent an immediate and grave danger to the
security and welfare of the community that infringement of
religious freedom may be justified, and only to the smallest extent
necessary to avoid the danger.
3. In further support of its contention that Republic Act No. 3350 is
unconstitutional, appellant Union averred that said Act
discriminates in favor of members of said religious sects in violation
of Section 1(7) of Article III of the 1935 Constitution, and which is
now Section 8 of Article 8 of the 1973 Constitution, which provides:
"No law shall be made respecting an establishment of religion, or
prohibiting the free exercise thereof, and the free exercise and
enjoyment of religious profession and worship, without.
discrimination and preference, shall forever be allowed. No religious
test shall be required for the exercise of civil or political rights."
The constitutional provision not 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 practice of any form of worship, 35 but also assures the free
exercise of one's chosen form of religion within limits of utmost
amplitude. It has been said that the religion clauses of the
Constitution are all designed to protect the broadest possible liberty
of conscience, to allow each man to believe as his conscience
directs, to profess his beliefs, and to live as he believes he ought to
live, consistent with the liberty of others and with the common
good. 36 Any legislation whose effect or purpose is to impede the
observance of one or all religions, or to discriminate invidiously
between the religions, is invalid, even though the burden may be
characterized as being only indirect. 37 But if the stage regulates
conduct by enacting, within its power, a general law which has for
its purpose and effect to advance the state's secular goals, the
statute is valid despite its indirect burden on religious observance,
unless the state can accomplish its purpose without imposing such
burden. 38
In Aglipay v. Ruiz 39 , this Court had occasion to state that the
government should not be precluded from pursuing valid objectives
secular ID character even if the incidental result would be favorable
to a religion or sect. It has likewise been held that the statute, in
order to withstand the strictures of constitutional prohibition, must
have a secular legislative purpose and a primary effect that neither
advances nor inhibits religion. 40 Assessed by these criteria,
Republic Act No. 3350 cannot be said to violate the constitutional
inhibition of the "no-establishment" (of religion) clause of the
Constitution.
The purpose of Republic Act No. 3350 is secular, worldly, and
temporal, not spiritual or religious or holy and eternal. It was
intended to serve the secular purpose of advancing the
constitutional right to the free exercise of religion, by averting that
certain persons be refused work, or be dismissed from work, or be
dispossessed of their right to work and of being impeded to pursue
a modest means of livelihood, by reason of union security
agreements. To help its citizens to find gainful employment
whereby they can make a living to support themselves and their
families is a valid objective of the state. In fact, the state is
enjoined, in the 1935 Constitution, to afford protection to labor, and
regulate the relations between labor and capital and industry. 41
More so now in the 1973 Constitution where it is mandated that
"the State shall afford protection to labor, promote full employment
and equality in employment, ensure equal work opportunities
regardless of sex, race or creed and regulate the relation between
workers and employers." 42
The primary effects of the exemption from closed shop agreements
in favor of members of religious sects that prohibit their members
from affiliating with a labor organization, is the protection of said
employees against the aggregate force of the collective bargaining
agreement, and relieving certain citizens of a burden on their
religious beliefs; and by eliminating to a certain extent economic
insecurity due to unemployment, which is a serious menace to the
health, morals, and welfare of the people of the State, the Act also
promotes the well-being of society. It is our view that the
exemption from the effects of closed shop agreement does not
directly advance, or diminish, the interests of any particular
religion. Although the exemption may benefit those who are
members of religious sects that prohibit their members from joining
labor unions, the benefit upon the religious sects is merely
incidental and indirect. The "establishment clause" (of religion)
does not ban regulation on conduct whose reason or effect merely
happens to coincide or harmonize with the tenets of some or all
religions. 43 The free exercise clause of the Constitution has been
interpreted to require that religious exercise be preferentially aided.
44
We believe that in enacting Republic Act No. 3350, Congress acted
consistently with the spirit of the constitutional provision. It acted
merely to relieve the exercise of religion, by certain persons, of a
burden that is imposed by union security agreements. It was
Congress itself that imposed that burden when it enacted the
Industrial Peace Act (Republic Act 875), and, certainly, Congress, if
it so deems advisable, could take away the same burden. It is
certain that not every conscience can be accommodated by all the
laws of the land; but when general laws conflict with scrupples of
conscience, exemptions ought to be granted unless some
"compelling state interest" intervenes. 45 In the instant case, We
see no such compelling state interest to withhold exemption.
Appellant bewails that while Republic Act No. 3350 protects
members of certain religious sects, it leaves no right to, and is
silent as to the protection of, labor organizations. The purpose of
Republic Act No. 3350 was not to grant rights to labor unions. The
rights of labor unions are amply provided for in Republic Act No.
875 and the new Labor Code. As to the lamented silence of the Act
regarding the rights and protection of labor unions, suffice it to say,
first, that the validity of a statute is determined by its provisions,
not by its silence 46 ; and, second, the fact that the law may work
hardship does not render it unconstitutional. 47
It would not be amiss to state, regarding this matter, that to
compel persons to join and remain members of a union to keep
their jobs in violation of their religious scrupples, would hurt, rather
than help, labor unions. Congress has seen it fit to exempt religious
objectors lest their resistance spread to other workers, for religious
objections have contagious potentialities more than political and
philosophic objections.
Furthermore, let it be noted that coerced unity and loyalty even to
the country, and a fortiori to a labor union - assuming that such
unity and loyalty can be attained through coercion — is not a goal
that is constitutionally obtainable at the expense of religious liberty.
48 A desirable end cannot be promoted by prohibited means.
4. Appellants' fourth contention, that Republic Act No. 3350 violates
the constitutional prohibition against requiring a religious test for
the exercise of a civil right or a political right, is not well taken. The
Act does not require as a qualification, or condition, for joining any
lawful association membership in any particular religion or in any
religious sect; neither does the Act require affiliation with a
religious sect that prohibits Its members from joining a labor union
as a condition or qualification for withdrawing from a labor union.
Joining or withdrawing from a labor union requires a positive act.
Republic Act No. 3350 only exempts members with such religious
affiliation from the coverage of closed shop agreements. So, under
this Act, a religious objector is not required to do a positive act —
to exercise the right to join or to resign from the union. He is
exempted ipso jure without need of any positive act on his part. A
conscientious religious objector need not perform a positive act or
exercise the right of resigning from the labor union — he is
exempted from the coverage of any closed shop agreement that a
labor union may have entered into. How then can there be a
religious test required for the exercise of a right when no right need
be exercised?
We have said that it was within the police power of the State to
enact Republic Act No. 3350, and that its purpose was legal and in
consonance with the Constitution. It is never an illegal evasion of a
constitutional provision or prohibition to accomplish a desired
result, which is lawful in itself, by discovering or following a legal
way to do it. 49
5. Appellant avers as its fifth ground that Republic Act No. 3350 is a
discriminatory legislation, inasmuch as it grants to the members of
certain religious sects undue advantages over other workers, thus
violating Section 1 of Article III of the 1935 Constitution which
forbids the denial to any person of the equal protection of the laws.
50
The guaranty of equal protection of the laws is not a guaranty of
equality in the application of the laws upon all citizens of the state.
It is not, therefore, a requirement, in order to avoid the
constitutional prohibition against inequality, that every man,
woman and child should be affected alike by a statute. Equality of
operation of statutes does not mean indiscriminate operation on
persons merely as such, but on persons according to the
circumstances surrounding them. It guarantees equality, not
identity of rights. The Constitution does not require that things
which are different in fact be treated in law as though they were
the same. The equal protection clause does not forbid
discrimination as to things that are different. 51 It does not
prohibit legislation which is limited either in the object to which it is
directed or by the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows
classification. Classification in law, as in the other departments of
knowledge or practice, is the grouping of things in speculation or
practice because they agree with one another in certain particulars.
A law is not invalid because of simple inequality. 52 The very idea
of classification is that of inequality, so that it goes without saying
that the mere fact of inequality in no manner determines the
matter of constitutionality. 53 All that is required of a valid
classification is that it be reasonable, which means that the
classification should be based on substantial distinctions which
make for real differences; that it must be germane to the purpose
of the law; that it must not be limited to existing conditions only;
and that it must apply equally to each member of the class. 54
This Court has held that the standard is satisfied if the
classification or distinction is based on a reasonable
foundation or rational basis and is not palpably arbitrary. 55
In the exercise of its power to make classifications for the purpose
of enacting laws over matters within its jurisdiction, the state is
recognized as enjoying a wide range of discretion. 56 It is not
necessary that the classification be based on scientific or marked
differences of things or in their relation. 57 Neither is it necessary
that the classification be made with mathematical nicety. 58 Hence
legislative classification may in many cases properly rest on narrow
distinctions, 59 for the equal protection guaranty does not
preclude the legislature from recognizing degrees of evil or
harm, and legislation is addressed to evils as they may
appear.
We believe that Republic Act No. 3350 satisfies the aforementioned
requirements. The Act classifies employees and workers, as to the
effect and coverage of union shop security agreements, into those
who by reason of their religious beliefs and convictions cannot sign
up with a labor union, and those whose religion does not prohibit
membership in labor unions. The classification rests on real or
substantial, not merely imaginary or whimsical, distinctions. There
is such real distinction in the beliefs, feelings and sentiments of
employees. Employees do not believe in the same religious faith
and different religions differ in their dogmas and canons. Religious
beliefs, manifestations and practices, though they are found in all
places, and in all times, take so many varied forms as to be almost
beyond imagination. There are many views that comprise the broad
spectrum of religious beliefs among the people. There are diverse
manners in which beliefs, equally paramount in the lives of their
possessors, may be articulated. Today the country is far more
heterogenous in religion than before, differences in religion do
exist, and these differences are important and should not be
ignored.
Even from the psychological point of view, the classification is
based on real and important differences. Religious beliefs are not
mere beliefs, mere ideas existing only in the mind, for they carry
with them practical consequences and are the motives of certain
rules of human conduct and the justification of certain acts. 60
Religious sentiment makes a man view things and events in their
relation to his God. It gives to human life its distinctive-character,
its tone, its happiness, or unhappiness, its enjoyment or
irksomeness. Usually, a strong and passionate desire is involved in
a religious belief. To certain persons, no single factor of their
experience is more important to them than their religion, or their
not having any religion. Because of differences in religious belief
and sentiments, a very poor person may consider himself better
than the rich, and the man who even lacks the necessities of life
may be more cheerful than the one who has all possible luxuries.
Due to their religious beliefs people, like the martyrs, became
resigned to the inevitable and accepted cheerfully even the most
painful and excruciating pains. Because of differences in religious
beliefs, the world has witnessed turmoil, civil strife, persecution,
hatred, bloodshed and war, generated to a large extent by
members of sects who were intolerant of other religious beliefs. The
classification, introduced by Republic Act No. 3350, therefore, rests
on substantial distinctions.
The classification introduced by said Act is also germane to its
purpose. The purpose of the law is precisely to avoid those who
cannot, because of their religious belief, join labor unions, from
being deprived of their right to work and from being dismissed from
their work because of union shop security agreements.
Republic Act No. 3350, furthermore, is not limited in its application
to conditions existing at the time of its enactment. The law does
not provide that it is to be effective for a certain period of time
only. It is intended to apply for all times as long as the conditions to
which the law is applicable exist. As long as there are closed shop
agreements between an employer and a labor union, and there are
employees who are prohibited by their religion from affiliating with
labor unions, their exemption from the coverage of said
agreements continues.
Finally, the Act applies equally to all members of said religious
sects; this is evident from its provision.
The fact that the law grants a privilege to members of said religious
sects cannot by itself render the Act unconstitutional, for as We
have adverted to, the Act only restores to them their freedom of
association which closed shop agreements have taken away, and
puts them in the same plane as the other workers who are not
prohibited by their religion from joining labor unions. The
circumstance, that the other employees, because they are
differently situated, are not granted the same privilege, does not
render the law unconstitutional, for every classification allowed by
the Constitution by its nature involves inequality.
The mere fact that the legislative classification may result in actual
inequality is not violative of the right to equal protection, for every
classification of persons or things for regulation by law produces
inequality in some degree, but the law is not thereby rendered
invalid. A classification otherwise reasonable does not offend the
constitution simply because in practice it results in some inequality.
61 Anent this matter, it has been said that whenever it is apparent
from the scope of the law that its object is for the benefit of the
public and the means by which the benefit is to be obtained are of
public character, the law will be upheld even though incidental
advantage may occur to individuals beyond those enjoyed by the
general public. 62
6. Appellant's further contention that Republic Act No. 3350 violates
the constitutional provision on social justice is also baseless. Social
justice is intended to promote the welfare of all the people. 63
Republic Act No. 3350 promotes that welfare insofar as it looks
after the welfare of those who, because of their religious belief,
cannot join labor unions; the Act prevents their being deprived of
work and of the means of livelihood. In determining whether any
particular measure is for public advantage, it is not necessary that
the entire state be directly benefited — it is sufficient that a portion
of the state be benefited thereby.
Social justice also means the adoption by the Government of
measures calculated to insure economic stability of all component
elements of society, through the maintenance of a proper economic
and social equilibrium in the inter-relations of the members of the
community. 64 Republic Act No. 3350 insures economic stability to
the members of a religious sect, like the Iglesia ni Cristo, who are
also component elements of society, for it insures security in their
employment, notwithstanding their failure to join a labor union
having a closed shop agreement with the employer. The Act also
advances the proper economic and social equilibrium between labor
unions and employees who cannot join labor unions, for it exempts
the latter from the compelling necessity of joining labor unions that
have closed shop agreements, and equalizes, in so far as
opportunity to work is concerned, those whose religion prohibits
membership in labor unions with those whose religion does not
prohibit said membership. Social justice does not imply social
equality, because social inequality will always exist as long as social
relations depend on personal or subjective proclivities. Social
justice does not require legal equality because legal equality, being
a relative term, is necessarily premised on differentiations based on
personal or natural conditions. 65 Social justice guarantees equality
of opportunity 66 , and this is precisely what Republic Act No. 3350
proposes to accomplish — it gives laborers, irrespective of their
religious scrupples, equal opportunity for work.
7. As its last ground, appellant contends that the amendment
introduced by Republic Act No. 3350 is not called for - in other
words, the Act is not proper, necessary or desirable. Anent this
matter, it has been held that a statute which is not necessary is
not, for that reason, unconstitutional; that in determining the
constitutional validity of legislation, the courts are unconcerned
with issues as to the necessity for the enactment of the legislation
in question. 67 Courts do inquire into the wisdom of laws. 68
Moreover, legislatures, being chosen by the people, are presumed
to understand and correctly appreciate the needs of the people, and
it may change the laws accordingly. 69 The fear is entertained by
appellant that unless the Act is declared unconstitutional,
employers will prefer employing members of religious sects that
prohibit their members from joining labor unions, and thus be a
fatal blow to unionism. We do not agree. The threat to unionism will
depend on the number of employees who are members of the
religious sects that control the demands of the labor market. But
there is really no occasion now to go further and anticipate
problems We cannot judge with the material now before Us. At any
rate, the validity of a statute is to be determined from its general
purpose and its efficacy to accomplish the end desired, not from its
effects on a particular case. 70 The essential basis for the exercise
of power, and not a mere incidental result arising from its exertion,
is the criterion by which the validity of a statute is to be measured.
71
II. We now pass on the second assignment of error, in support of
which the Union argued that the decision of the trial court ordering
the Union to pay P500 for attorney's fees directly contravenes
Section 24 of Republic Act No. 875, for the instant action involves
an industrial dispute wherein the Union was a party, and said Union
merely acted in the exercise of its rights under the union shop
provision of its existing collective bargaining contract with the
Company; that said order also contravenes Article 2208 of the Civil
Code; that, furthermore, Appellee was never actually dismissed by
the defendant Company and did not therefore suffer any damage at
all. 72
In refuting appellant Union's arguments, Appellee claimed that in
the instant case there was really no industrial dispute involved in
the attempt to compel Appellee to maintain its membership in the
union under pain of dismissal, and that the Union, by its act,
inflicted intentional harm on Appellee; that since Appellee was
compelled to institute an action to protect his right to work,
appellant could legally be ordered to pay attorney's fees under
Articles 1704 and 2208 of the Civil Code.73
The second paragraph of Section 24 of Republic Act No. 875 which
is relied upon by appellant provides that:
"No suit, action or other proceedings shall be maintainable in any
court against a labor organization or any officer or member thereof
for any act done by or on behalf of such organization in furtherance
of an industrial dispute to which it is a party, on the ground only
that such act induces some other person to break a contract of
employment or that it is in restraint of trade or interferes with the
trade, business or employment of some other person or with the
right of some other person to dispose of his capital or
labor." (Emphasis supplied)
That there was a labor dispute in the instant case cannot be
'disputed for appellant sought the discharge of respondent by virtue
of the closed shop agreement and under Section 2 (j) of Republic
Act No. 875 a question involving tenure of employment is included
in the term "labor dispute". 74 The discharge or the act of seeking
it is the labor dispute itself. It being the labor dispute itself, that
very same act of the Union in asking the employer to dismiss
Appellee cannot be "an act done . . . in furtherance of an industrial
dispute". The mere fact that appellant is a labor union does not
necessarily mean that all its acts are in furtherance of an industrial
dispute. 75 Appellant Union, therefore, cannot invoke in its favor
Section 24 of Republic Act No. 875. This case is not intertwined
with any unfair labor practice case existing at the time when
Appellee filed his complaint before the lower court.
Neither does Article 2208 of the Civil Code, invoked by the Union,
serve as its shield. The article provides that attorney's fees and
expenses of litigation may be awarded "when the defendant's act or
omission has compelled the plaintiff . . . to incur expenses to
protect his interest"; and "in any other case where the court deems
it just and equitable that attorney's fees and expenses of litigation
should be recovered". In the instant case, it cannot be gainsaid that
appellant Union's act in demanding Appellee's dismissal caused
Appellee to incur expenses to prevent his being dismissed from his
job. Costs according to Section 1, Rule 142, of the Rules of Court,
shall be allowed as a matter of course to the prevailing party.
WHEREFORE, the instant appeal is dismissed, and the decision,
dated August 26, 1965, of the Court of First Instance of Manila, in
its Civil Case No. 58894, appealed from is affirmed, with costs
against appellant Union.
It is so ordered.
Makalintal, C .J ., Castro, Teehankee, Barredo, Makasiar, Antonio,
Esguerra, Muñoz Palma and Aquino, JJ ., concur.
Fernandez, J ., did not take part because he was co-author, when
he was a Senator, of Rep. Act No. 3350.
Separate Opinions
FERNANDO, J ., concurring:
The decision arrived at unanimously by this Court that Republic Act
No. 3350 is free from the constitutional infirmities imputed to it was
demonstrated in a manner well-nigh conclusive in the learned,
scholarly, and comprehensive opinion so typical of the efforts of the
ponente, Justice Zaldivar. Like the rest of my brethren, I concur
fully. Considering moreover, the detailed attention paid to each and
every objection raised as to its validity and the clarity and
persuasiveness with which it was shown to be devoid of support in
authoritative doctrines, it would appear that the last word has been
written on this particular subject. Nonetheless, I deem it proper to
submit this brief expression of my views on the transcendent
character of religious freedom 1 and its primacy even as against
the claims of protection to labor, 2 also one of the fundamental
principles of the Constitution.
1. Religious freedom is identified with the liberty every individual
possesses to worship or not a Supreme Being, and if a devotee of
any sect, to act in accordance with its creed. Thus is
constitutionally safeguarded, according to Justice Laurel, that
"profession of faith to an active power that binds and elevates man
to his Creator . . ." 3 The choice of what a man wishes to believe in
is his and his alone. That is a domain left untouched, where
intrusion is not allowed, a citadel to which the law is denied entry,
whatever be his thoughts or hopes. In that sphere, what he wills
reigns supreme. The doctrine to which he pays fealty may for some
be unsupported by evidence, devoid of rational foundation. No
matter. There is no requirement as to its conformity to what has
found acceptance. It suffices that for him such a concept holds
undisputed sway. That is a recognition of man's freedom. That for
him is one of the ways of self-realization. It would be to disregard
the dignity that attaches to every human being to deprive him of
such an attribute. The "fixed star on our constitutional
constellation," to borrow the felicitous phrase of Justice Jackson, is
that no official, not excluding the highest, has it in his power to
prescribe what shall be orthodox in matters of conscience — or to
mundane affairs, for that matter.
Gerona v. Secretary of Education 4 speaks similarly. In the
language of its ponente, Justice Montemayor: "The realm of belief
and creed is infinite and limitless bounded only by one's
imagination and thought. So is the freedom of belief, including
religious belief, limitless and without bounds. One may believe in
most anything, however strange, bizarre and unreasonable the
same may appear to others, even heretical when weighed in the
scales of orthodoxy or doctrinal standards." 5 There was this
qualification though: "But between the freedom of belief and the
exercise of said belief, there is quite a stretch of road to travel. If
the exercise of said religious belief clashes with the established
institutions of society and with the law, then the former must yield
and give way to the latter. The Government steps in and either
restrains said exercise or even prosecutes the one exercising it." 6
It was on that basis that the daily compulsory flag ceremony in
accordance with a statute 7 was found free from the constitutional
objection on the part of a religious sect, the Jehovah's Witnesses,
whose members alleged that their participation would be offensive
to their religious beliefs. In a case not dissimilar, West Virginia
State Board of Education v. Barnette, 8 the American Supreme
Court reached a contrary conclusion. Justice Jackson's eloquent
opinion is, for this writer, highly persuasive. Thus: "The case is
made difficult not because the principles of its decision are obscure
but because the flag involved is our own. Nevertheless, we apply 3. There is, however, the question of whether such an exception
the limitations of the Constitution with no fear that freedom to be possesses an implication that lessens the effectiveness of state
intellectually and spiritually diverse or even contrary will efforts to protect labor, likewise, as noted, constitutionally ordained.
disintegrate the social organization. To believe that patriotism will Such a view, on the surface, may not be lacking in plausibility, but
not flourish if patriotic ceremonies are voluntary and spontaneous upon closer analysis, it cannot stand scrutiny. Thought must be
instead of a compulsory routine is to make an unflattering estimate given to the freedom of association, likewise an aspect of
of the appeal of our institutions to free minds. We can have intellectual liberty. For the late Professor Howe, a constitutionalist
intellectual individualism and the rich cultural diversities that we and in his lifetime the biographer of the great Holmes, it even
owe to exceptional minds only at the price of occasional eccentricity partakes of the political theory of pluralistic sovereignty. So great is
and abnormal attitudes. When they are so harmless to others or to the respect for the autonomy accorded voluntary societies. 11 Such
the State as those we deal with here, the price is not too great. But a right implies at the very least that one can determine for himself
freedom to differ is not limited to things that do not matter much. whether or not he should join or refrain from joining a labor
That would be a mere shadow of freedom. The test of its substance organization, an institutional device for promoting the welfare of
is the right to differ as to things that touch the heart of the existing the working man. A closed shop, on the other hand, is inherently
order." 9 coercive. That is why, as is unmistakably reflected in our decisions,
There is moreover this ringing affirmation by Chief Justice Hughes the latest of which is Guijarno v. Court of Industrial Relations, 12 it
of the primacy of religious freedom in the forum of conscience even is far from being a favorite of the law. For a statutory provision
as against the command of the State itself: "Much has been said of then to further curtail its operation, is precisely to follow the
the paramount duty to the state, a duty to be recognized, it is dictates of sound public policy.
urged, even though it conflicts with convictions of duty to God. The exhaustive and well-researched opinion of Justice Zaldivar thus
Undoubtedly that duty to the state exists within the domain of is in the mainstream of constitutional tradition. That, for me, is the
power, for government may enforce obedience to laws regardless of channel to follow.
scruples. When one's belief collides with the power of the state, the ||| (Victoriano v. Elizalde Rope Workers' Union, G.R. No. L-25246,
latter is supreme within its sphere and submission or punishment [September 12, 1974], 158 PHIL 60-99)

follows. But, in the forum of conscience, duty to a moral power
higher than the state has always been maintained. The reservation
of that supreme obligation, as a matter of principle, would
unquestionably be made by many of our conscientious and law-
abiding citizens. The essence of religion is belief in a relation to God
involving duties superior to those arising from any human relation."
10 The American Chief Justice spoke in dissent, it is true, but with
him in agreement were three of the foremost jurists who ever sat in
that Tribunal, Justices Holmes, Brandeis, and Stone.
2. As I view Justice Zaldivar's opinion in that light, my concurrence,
as set forth earlier, is wholehearted and entire. With such a cardinal
postulate as the basis of our polity, it has a message that cannot be
misread. Thus is intoned with a reverberating clang, to paraphrase
Cardozo, a fundamental principle that drowns all weaker sounds.
The labored effort to cast doubt on the validity of the statutory
provision in question is far from persuasive. It is attended by
futility. It is not for this Court, as I conceive of the judicial function,
to restrict the scope of a preferred freedom.
 FIRST DIVISION
G.R. No. 82914 June 20, 1988
KAPATIRAN SA MEAT AND CANNING DIVISION (TUPAS Local
Chapter No. 1027), petitioner,
vs.
THE HONORABLE BLR DIRECTOR PURA FERRER CALLEJA,
MEAT AND CANNING DIVISION UNIVERSAL ROBINA
CORPORATION and MEAT AND CANNING DIVISION NEW
EMPLOYEES AND WORKERS UNITED LABOR ORGANIZATION,
respondents.
Alar, Comia, Manalo and Associates for petitioner.
Danilo Bolos for respondent Robina Corporation.
RESOLUTION
GRIÑO-AQUINO, J.:
The petitioner, Kapatiran sa Meat and Canning Division TUPAS Local
Chapter No. 1027) hereinafter referred to as "TUPAS," seeks a
review of the resolution dated January 27, 1988 (Annex D) of public
respondent Pura Ferrer-Calleja, Director of the Bureau of Labor
Relations, dismissing its appeal from the Order dated November 17,
1987 (Annex C) of the Med-Arbiter Rasidali C. Abdullah ordering a
certification election to be conducted among the regular daily paid
rank and file employees/workers of Universal Robina Corporation-
Meat and Canning Division to determine which of the contending
unions:
a) Kapatiran sa Meat and Canning Division TUPAS Local Chapter No.
1027 (or "TUPAS" for brevity);
b) Meat and Canning Division New Employees and Workers United
Labor Organization (or "NEW ULO" for brevity);
c) No union.
shall be the bargaining unit of the daily wage rank and file
employees in the Meat and Canning Division of the company.
From 1984 to 1987 TUPAS was the sole and exclusive collective
bargaining representative of the workers in the Meat and Canning
Division of the Universal Robina Corporation, with a 3-year
collective bargaining agreement (CBA) which was to expire on
November 15, 1987.
Within the freedom period of 60 days prior to the expiration of its
CBA, TUPAS filed an amended notice of strike on September 28,
1987 as a means of pressuring the company to extend, renew, or
negotiate a new CBA with it.
On October 8, 1987, the NEW ULO, composed mostly of workers
belonging to the IGLESIA NI KRISTO sect, registered as a labor
union.
On October 12, 1987, the TUPAS staged a strike. ROBINA obtained
an injunction against the strike, resulting in an agreement to return
to work and for the parties to negotiate a new CBA.
The next day, October 13, 1987, NEW ULO, claiming that it has "the
majority of the daily wage rank and file employees numbering 191,"
filed a petition for a certification election at the Bureau of Labor
Relations (Annex A).
TUPAS moved to dismiss the petition for being defective in form
and that the members of the NEW ULO were mostly members of
the Iglesia ni Kristo sect which three (3) years previous refused to
affiliate with any labor union. It also accused the company of using
the NEW ULO to defeat TUPAS' bargaining rights (Annex B).
On November 17, 1987, the Med-Arbiter ordered the holding of a
certification election within 20 days (Annex C).
TUPAS appealed to the Bureau of Labor Relations BLR. In the
meantime, it was able to negotiate a new 3-year CBA with ROBINA,
which was signed on December 3, 1987 and to expire on November
15, 1990.
On January 27, 1988, respondent BLR Director Calleja dismissed
the appeal (Annex D).
TUPAS' motion for reconsideration (Annex E) was denied on March
17, 1988 (Annex F). On April 30, 1988, it filed this petition alleging
that the public respondent acted in excess of her jurisdiction and
with grave abuse of discretion in affirming the Med-Arbiter's order
for a certification election.
After deliberating on the petition and the documents annexed
thereto, We find no merit in the Petition. The public respondent did
not err in dismissing the petitioner's appeal in BLR Case No.
A-12-389-87. This Court's decision in Victoriano vs. Elizalde Rope
Workers' Union, 59 SCRA 54, upholding the right of members of the
IGLESIA NI KRISTO sect not to join a labor union for being contrary
to their religious beliefs, does not bar the members of that sect
from forming their own union. The public respondent correctly
observed that the "recognition of the tenets of the sect ... should
not infringe on the basic right of self-organization granted by the
constitution to workers, regardless of religious affiliation."
The fact that TUPAS was able to negotiate a new CBA with ROBINA
within the 60-day freedom period of the existing CBA, does not
foreclose the right of the rival union, NEW ULO, to challenge TUPAS'
claim to majority status, by filing a timely petition for certification
election on October 13, 1987 before TUPAS' old CBA expired on
November 15, 1987 and before it signed a new CBA with the
company on December 3, 1987. As pointed out by Med-Arbiter
Abdullah, a "certification election is the best forum in ascertaining
the majority status of the contending unions wherein the workers
themselves can freely choose their bargaining representative thru
secret ballot." Since it has not been shown that this order is tainted
with unfairness, this Court will not thwart the holding of a
certification election (Associated Trade Unions [ATU] vs. Noriel, 88
SCRA 96).
WHEREFORE, the petition for certiorari is denied, with costs against
the petitioner.
SO ORDERED.

 THIRD DIVISION
G.R. No. 96566 January 6, 1992
ATLAS LITHOGRAPHIC SERVICES, INC., petitioner,
vs.
UNDERSECRETARY BIENVENIDO E. LAGUESMA (Department
of Labor and Employment) and ATLAS LITHOGRAPHIC
SERVICES, INC. SUPERVISORY, ADMINISTRATIVE,
PERSONNEL, PRODUCTION, ACCOUNTING AND
CONFIDENTIAL EMPLOYEES ASSOCIATION-KAISAHAN NG
MANGGAWANG PILIPINO (KAMPIL-KATIPUNAN),
respondents.
Romero, Lagman, Valdecantos & Arreza Law Offices for
petitioner.
Esteban M. Mendoza for private respondent.
GUTIERREZ, JR., J.:p
This is a petition for certiorari under Rule 65 of the Rules of Court
seeking the modification of the Order dated 14 December 1990 and
the Resolution dated 21 November 1990 issued by the public
respondents.
The antecedent facts of the case as gathered from the records are
as follows:
On July 16, 1990, the supervisory, administrative personnel,
production, accounting and confidential employees of the petitioner
Atlas Lithographic Services, Inc. (ALSI) affiliated with private
respondent Kaisahan ng Manggagawang Pilipino, a national labor
organization. The local union adopted the name Atlas Lithographic
Services, Inc. Supervisory, Administrative, Personnel, Production,
Accounting and Confidential Employees Association or ALSI-
SAPPACEA-KAMPIL in short and which we shall hereafter refer to as
the "supervisors" union.
Shortly thereafter, private respondent Kampil-Katipunan filed on
behalf of the "supervisors" union a petition for certification election
so that it could be the sole and exclusive bargaining agent of the
supervisory employees.
The petitioners opposed the private respondent's petition claiming
that under Article 245 of the Labor bode the private respondent
cannot represent the supervisory employees for collective
bargaining purposeless because the private respondent also
represents the rank-and-file employees' union.
On September 18, 1990, the Med-Arbiter issued an order in favor of
the private respondent, the dispositive portion of which provides:
WHEREFORE, premises considered, a certification election among
the supervisory employees belonging to the Administrative,
Personnel, Production, Accounting Departments as well as
confidential employees performing supervisory functions of Atlas
Lithographic Services, Incorporated is hereby ordered conducted
within 20 days from receipt hereof, subject to usual pre-election
conference, with the following choices:
1. KAMPIL (KATIPUNAN);
2. No union.
SO ORDERED. (Rollo, pp. 39-40)
The petitioners, as expected, appealed for the reversal of the above
order. The public respondent, however, issued a resolution affirming
the Med-Arbiter's order.
The petitioners, in turn, filed a motion for reconsideration but the
same was denied. Hence, this petition for certiorari.
The sole issue to be resolved in this case is whether or not, under
Article 245 of the Labor Code, a local union of supervisory
employees may be allowed to affiliate with a national federation of
labor organizations of rank-and-file employees and which national
federation actively represents its affiliates in collective bargaining
negotiations with the same employer of the supervisors and in the
implementation of resulting collective bargaining agreements.
The petitioner argues that KAMPIL-KATIPUNAN already represents
its rank-and-file employees and, therefore, to allow the supervisors
of those employees to affiliate with the private respondent is
tantamount to allowing the circumvention of the principle of the
separation of unions under Article 245 of the Labor Code.
It further argues that the intent of the law is to prevent a single
labor organization from representing different classes of employees
with conflicting interests.
The public respondent, on the other hand, contends that despite
affiliation with a national federation, the local union does not lose
its personality which is separate, and distinct from the national
federation. It cites as its legal basis the case of Adamson &
Adamson, Inc. v. CIR (127 SCRA 268 [1984]).
It maintains that Rep. Act No. 6715 contemplates the principle laid
down by this Court in the Adamson case interpreting Section 3 of
Rep. Act No. 875 (the Industrial Peace Act) on the right of a
supervisor's union to affiliate. The private respondent asserts that
the legislature must have noted the Adamson ruling then prevailing
when it conceived the reinstatement in the present Labor Code of a
similar provision on the right of supervisors to organize.
Under the Industrial Peace Act of 1953, employees were classified
into three groups, namely: (1) managerial employees; (2)
supervisors; and (3) rank-and file employees. Supervisors, who
were considered employees in relation to their employer could join
a union but not a union of rank-and-file employees.
With the enactment in 1974 of the Labor Code (Pres Decree No.
442), employees were classified into managerial and rank-and-file
employees. Neither the category of supervisors nor their right to
organize under the old statute were recognized. So that, in Bulletin
Publishing Corporation v. Sanchez (144 SCRA 628 [1986]), the
Court interpreted the superseding labor law to have removed from
supervisors the right to unionize among themselves. The Court
ruled:
In the light of the factual background of this case, We are
constrained to hold that the supervisory employees of petitioner
firm may not, under the law, form a supervisors union, separate
and distinct from the existing bargaining unit (BEU), composed of
the rank-and-file employees of the Bulletin Publishing Corporation.
It is evident that most of the private respondents are considered
managerial employees. Also, it is distinctly stated in Section 11,
Rule II, of the Omnibus Rules Implementing the Labor Code, that
supervisory unions are presently no longer recognized nor allowed
to exist and operate as such. (pp. 633, 634)
In Section 11, Rule II, Book V of the Omnibus Rules implementing
Pres. Decree No. 442, the supervisory unions existing since the
effectivity of the New Code in January 1, 1975 ceased to operate as
such and the members who did not qualify as managerial
employees under this definition in Article 212 (k) therein became
eligible to form, to join or assist a rank-and-file union.
A revision of the Labor Code undertaken by the bicameral Congress
brought about the enactment of Rep. Act No. 6715 in March 1989
in which employees were reclassified into three groups, namely: (1)
the managerial employees; (2) supervisors; and (3) the rank and
file employees. Under the present law, the category of supervisory
employees is once again recognized. Hence, Art. 212 (m) states:
(m) . . . Supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial actions if the
exercise of such authority is not merely routinary or clerical in
nature but requires the use of independent judgment. . . .
The rationale for the amendment is the government's recognition of
the right of supervisors to organize with the qualification that they
shall not join or assist in the organization of rank-and-file
employees. The reason behind the Industrial Peace Act provision on
the same subject matter has been adopted in the present statute.
The interests of supervisors on the one hand, and the rank-and-file
employees on the other, are separate and distinct. The functions of
supervisors, being recommendatory in nature, are more identified
with the interests of the employer. The performance of those
functions may, thus, run counter to the interests of the rank-and-
file.
This intent of the law is made clear in the deliberations of the
legislators on then Senate Bill 530 now enacted as Rep. Act No.
6715.
The definition of managerial employees was limited to those having
authority to hire and fire while those who only recommend
effectively the hiring or firing or transfers of personnel would be
considered as closer to rank-and-file employees. The exclusion,
therefore, of middle level executives from the category of managers
brought about a third classification, the supervisory employees.
These supervisory employees are allowed to form their own union
but they are not allowed to join the rank-and-file union because of
conflict of interest (Journal of the Senate, First Regular Session,
1987, 1988, Volume 3,
p. 2245).
In terms of classification, however, while they are more closely
identified with the rank-and-file they are still not allowed to join the
union of rank-and-file employees. To quote the Senate Journal:
In reply to Sen. Guingona's query whether "supervisors" are
included in the term "employee", Sen. Herrera stated that while
they are considered as rank-and-file employees, they cannot join
the union and they would have to form their own supervisors' union
pursuant to Rep. Act 875. (supra, p. 2288)
The peculiar role of supervisors is such that while they are not
managers, when they recommend action implementing
management policy or ask for the discipline or dismissal of
subordinates, they identify with the interests of the employer and
may act contrary to the interests of the rank-and-file.
We agree with the petitioner's contention that a conflict of interest
may arise in the areas of discipline, collective bargaining and
strikes.
Members of the supervisory union might refuse to carry out
disciplinary measures against their co-member rank-and-file
employees.
In the area of bargaining, their interests cannot be considered
identical. The needs of one are different from those of the other.
Moreover, in the event of a strike, the national federation might
influence the supervisors' union to conduct a sympathy strike on
the sole basis of affiliation.
More important, the factual issues in the Adamson case are
different from the present case. First, the rank-and-file employees
in the Adamson case are not directly under the supervisors who
comprise the supervisors' union. In the case at bar, the rank-and
file employees are directly under the supervisors organized by one
and the same federation.
The contemplation of the law in Sec. 3 of the Industrial Peace Act is
to prohibit supervisors from joining a labor organization of
employees under their supervision. Sec. 3 of the Industrial Peace
Act provides:
Sec. 3 — Employees' Right to Self Organization. Employees shall
have the right to self-organization and to form, join or assist labor
organizations of their own choosing for the purpose of collective
bargaining through representatives of their own choosing and to
engage in concerted activities for the purpose of collective
bargaining and other mutual aid or protection. Individuals
employed as supervisors shall not be eligible for membership in a
labor organization of employees under their supervision but may
form separate organizations of their own (Emphasis supplied).
This was not the consideration in the Adamson case because as
mentioned earlier, the rank-and-file employees in the Adamson case
were not under the supervision of the supervisors involved.
Meanwhile, Article 245 of the Labor Code as amended by Rep. Act
No. 6715 provides:
Art. 245. Ineligibility of managerial employees to join any labor
organization: right of supervisory employees. — Managerial
employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees
but may join, assist or form separate labor organizations of their
own.
The Court construes Article 245 to mean that, as in Section 3 of the
Industrial Peace Act, supervisors shall not be given an occasion to
bargain together with the rank-and-file against the interests of the
employer regarding terms and conditions of work
Second, the national union in the Adamson case did not actively
represent its local chapters. In the present case, the local union is
actively represented by the national federation. In fact, it was the
national federation, the KAMPIL-KATIPUNAN, which initially filed a
petition for certification in behalf of the respondent union.
Thus, if the intent of the law is to avoid a situation where
supervisors would merge with the rank and-file or where the
supervisors' labor organization would represent conflicting
interests, then a local supervisors' union should not be allowed to
affiliate with the national federation of union of rank-and-file
employees where that federation actively participates in union
activity in the company.
The petitioner further contends that the term labor organization
includes a federation considering that Art. 212 (g) mentions "any
union or association of employees."
The respondent, however, argues that the phrase refers to a local
union only in which case, the prohibition in Art. 245 is inapplicable
to the case at bar.
The prohibition against a supervisors' union joining a local union of
rank-and-file is replete with jurisprudence. The Court emphasizes
that the limitation is not confined to a case of supervisors wanting
to join a rank-and-file local union. The prohibition extends to a
supervisors' local union applying for membership in a national
federation the members of which include local unions of rank-and-
file employees. The intent of the law is clear especially where, as in
the case at bar, the supervisors will be co-mingling with those
employees whom they directly supervise in their own bargaining
unit.
Technicalities should not be allowed to stand in the way of equitably
and completely resolving the rights and obligations of the parties.
(Rapid Manpower Consultants, Inc. v. NLRC, 190 SCRA 747 [1990])
What should be paramount is the intent behind the law, not its
literal construction. Where one interpretation would result in
mischievous consequences while another would bring about equity,
justice, and the promotion of labor peace, there can be no doubt as
to what interpretation shall prevail.
Finally, the respondent contends that the law prohibits the
employer from interfering with the employees' right to self-
organization.
There is no question about this intendment of the law. There is,
however, in the present case, no violation of such a guarantee to
the employee. Supervisors are not prohibited from forming their
own union. What the law prohibits is their membership in a labor
organization of rank-and-file employees (Art. 245, Labor Code) or
their joining a national federation of rank-and-file employees that
includes the very local union which they are not allowed to directly
join.
In a motion dated November 15, 1991 it appears that the petitioner
has knuckled under to the respondents' pressures and agreed to let
the national federation KAMPIL-KATIPUNAN represent its
supervisors in negotiating a collective bargaining agreement.
Against the advise of its own counsel and on the basis of alleged
"industrial peace", the petitioner expressed a loss of interest in
pursuing this action. The petitioner is, of course, free to grant
whatever concessions it wishes to give to its employees unilaterally
or through negotiations but we cannot allow the resulting validation
of an erroneous ruling and policy of the Department of Labor and
Employment (DOLE) to remain on the basis of the petitioner's loss
of interest. The December 14, 1990 order and the November 21,
1990 resolution of DOLE are contrary to law and must be declared
as such.
WHEREFORE, the petition is hereby GRANTED. The private
respondent is disqualified from affiliating with a national federation
of labor organizations which includes the petitioner's rank-and-file
employees.
SO ORDERED.
Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.

 [G.R. No. 102084. August 12, 1998]
DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE
OF MEDICINE, petitioner, vs. HON. BIENVENIDO E.
LAGUESMA, Undersecretary of Labor and Employment;
ROLANDO S. DE LA CRUZ, Med-Arbiter Regional Office No.
IV, DE LA SALLE UNIVERSITY MEDICAL CENTER AND
COLLEGE OF MEDICINE SUPERVISORY UNION-FEDERATION
OF FREE WORKERS, respondents.
DECISION
MENDOZA, J.:
Petitioner De La Salle University Medical Center and College of
Medicine (DLSUMCCM) is a hospital and medical school at
Dasmarias, Cavite. Private respondent Federation of Free
WorkersDe La Salle University Medical Center and College of
Medicine Supervisory Union Chapter (FFW-DLSUMCCMSUC), on the
other hand, is a labor organization composed of the supervisory
employees of petitioner DLSUMCCM.
On April 17, 1991, the Federation of Free Workers (FFW), a national
federation of labor unions, issued a certificate to private respondent
FFW-DLSUMCCMSUC recognizing it as a local chapter. On the same
day, it filed on behalf of private respondent FFW-DLSUMCCMSUC a
petition for certification election among the supervisory employees
of petitioner DLSUMCCM. Its petition was opposed by petitioner
DLSUMCCM on the grounds that several employees who signed the
petition for certification election were managerial employees and
that the FFW-DLSUMCCMSUC was composed of both supervisory
and rank-and-file employees in the company.[1]
In its reply dated May 22, 1991, private respondent FFW-
DLSUMCCMSUC denied petitioners allegations. It contended that
2. Herein petition seeks for the holding of a certification election
among the supervisory employees of herein respondent. It does not
intend to include managerial employees.
....
6. It is not true that supervisory employees are joining the rank-
and-file employees union. While it is true that both regular rank-
and-file employees and supervisory employees of herein
respondent have affiliated with FFW, yet there are two separate
unions organized by FFW. The supervisory employees have a
separate charter certificate issued by FFW.[2]
On July 5, 1991, respondent Rolando S. de la Cruz, med-arbiter of
the Department of Labor and Employment Regional Office No. IV,
issued an order granting respondent unions petition for certification
election. He said:
. . . . [petitioner] . . . claims that based on the job descriptions
which will be presented at the hearing, the covered employees who
are considered managers occupy the positions of purchasing
officers, personnel officers, property officers, cashiers, heads of
various sections and the like.
[Petitioner] also argues that assuming that some of the employees
concerned are not managerial but mere supervisory employees, the
Federation of Free Workers (FFW) cannot extend a charter
certificate to this group of employees without violating the express
provision of Article 245 which provides that 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 because the FFW had similarly issued a
charter certificate to its rank-and-file employees.
....
In its position paper, [petitioner] stated that most, if not all, of the
employees listed in . . . the petition are considered managerial
employees, thereby admitting that it has supervisory employees
who are undoubtedly qualified to join or form a labor organization
of their own. The record likewise shows that [petitioner] promised
to present the job descriptions of the concerned employees during
the hearing but failed to do so. Thus, this office has no basis in
determining at this point in time who among them are considered
managerial or supervisory employees. At any rate, there is now no
question that [petitioner] has in its employ supervisory employees
who are qualified to join or form a labor union. Consequently, this
office is left with no alternative but to order the holding of
certification election pursuant to Article 257 of the Labor Code, as
amended, which mandates the holding of certification election if a
petition is filed by a legitimate labor organization involving an
unorganized establishment, as in the case of herein respondent.
As to the allegation of [petitioner] that the act of the supervisory
employees in affiliating with FFW to whom the rank-and-file
employees are also affiliated is violative of Article 245 of the Labor
Code, suffice it to state that the two groups are considered
separate bargaining units and local chapters of FFW. They are, for
all intents and purposes, separate with each other and their
affiliation with FFW would not make them members of the same
labor union. This must be the case because it is settled that the
locals are considered the basic unit or principal with the labor
federation assuming the role of an agent. The mere fact, therefore,
that they are represented by or under the same agent is of no
moment. They are still considered separate with each other.[3]
On July 30, 1991, petitioner DLSUMCCM appealed to the Secretary
of Labor and Employment, citing substantially the same arguments
it had raised before the med-arbiter. However, its appeal was
dismissed. In his resolution, dated August 30, 1991, respondent
Undersecretary of Labor and Employment Bienvenido E. Laguesma
found the evidence presented by petitioner DLSUMCCM concerning
the alleged managerial status of several employees to be
insufficient. He also held that, following the ruling of this Court in
Adamson & Adamson, Inc. v. CIR,[4] unions formed independently
by supervisory and rank-and-file employees of a company may
legally affiliate with the same national federation.
Petitioner moved for a reconsideration but its motion was denied. In
his order dated September 19, 1991, respondent Laguesma stated:
We reviewed the records once more, and find that the issues and
arguments adduced by movant have been squarely passed upon in
the Resolution sought to be reconsidered. Accordingly, we find no
legal justification to alter, much less set aside, the aforesaid
resolution. Perforce, the motion for reconsideration must fail.
WHEREFORE, the instant motion for reconsideration is hereby
denied for lack of merit and the resolution of this office dated 30
August 1991 STANDS.
No further motions of a similar nature shall hereinafter be
entertained.[5]
Hence, this petition for certiorari.
Petitioner DLSUMCCM contends that respondent Laguesma gravely
abused his discretion. While it does not anymore insist that several
of those who joined the petition for certification election are holding
managerial positions in the company, petitioner nonetheless
pursues the question whether unions formed independently by
supervisory and rank-and-file employees of a company may validly
affiliate with the same national federation. With respect to this
question, it argues:
THE PUBLIC RESPONDENT, HONORABLE BIENVENIDO E.
LAGUESMA, UNDERSECRETARY OF LABOR AND EMPLOYMENT, IN A
CAPRICIOUS, ARBITRARY AND WHIMSICAL EXERCISE OF POWER
ERRED AND COMMITTED GRAVE ABUSE OF DISCRETION
A M O U N T I N G TO A C T I N G W I T H O U T O R I N E X C E S S O F
JURISDICTION WHEN HE DENIED THE PETITIONERS APPEAL AND
ORDERED THE HOLDING OF A CERTIFICATION ELECTION AMONG
THE MEMBERS OF THE SUPERVISORY UNION EMPLOYED IN
PETITIONERS COMPANY DESPITE THE FACT THAT SAID
SUPERVISORY UNION WAS AFFILIATED WITH THE FEDERATION OF
FREE WORKERS TO WHICH THE RANK-AND-FILE EMPLOYEES OF
THE SAME COMPANY ARE LIKEWISE AFFILIATED, CONTRARY TO
THE EXPRESS PROVISIONS OF ARTICLE 245 OF THE LABOR CODE,
AS AMENDED.[6]
The contention has no merit.
Supervisory employees have the right to self-organization as do
other classes of employees save only managerial ones. The
Constitution states that the right of the people, including those
employed in the public and private sectors, to form unions,
associations or societies for purposes not contrary to law, shall not
be abridged.[7] As we recently held in UnitedPepsi-Cola Supervisory
Union v. Laguesma,[8] the framers of the Constitution intended, by
this provision, to restore the right of supervisory employees to self-
organization which had been withdrawn from them during the
period of martial law. Thus:
Commissioner Lerum sought to amend the draft of what was later
to become Art. III, 8 of the present Constitution:
....
MR. LERUM. . . . Also, we have unions of supervisory employees
and of security guards. But what is tragic about this is that after the
1973 Constitution was approved and in spite of an express
recognition of the right to organize in P.D. No. 442, known as the
Labor Code, the right of government workers, supervisory
employees and security guards to form unions was abolished.
....
We are afraid that without any corresponding provision covering the
private sector, the security guards, the supervisory employees ...
will still be excluded and that is the purpose of this amendment.
....
In sum, Lerums proposal to amend Art. III, 8 of the draft
Constitution by including labor unions in the guarantee of
organizational right should be taken in the context of statements
that his aim was the removal of the statutory ban against security
guards and supervisory employees joining labor organizations. The
approval by the Constitutional Commission of his proposal can only
mean, therefore, that the Commission intended the absolute right
to organize of government workers, supervisory employees, and
security guards to be constitutionally guaranteed.[9]
Conformably with the constitutional mandate, Art. 245 of the Labor
Code now provides for the right of supervisory employees to self-
organization, subject to the limitation that they cannot join an
organization of rank-and-file employees:
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.
The reason for the segregation of supervisory and rank-and-file
employees of a company with respect to the exercise of the right to
self-organization is the difference in their interests. Supervisory
employees are more closely identified with the employer than with
the rank-and-file employees. If supervisory and rank-and-file
employees in a company are allowed to form a single union, the
conflicting interests of these groups impair their relationship and
adversely affect discipline, collective bargaining, and strikes.[10]
These consequences can obtain not only in cases where supervisory
and rank-and-file employees in the same company belong to a
single union but also where unions formed independently by
supervisory and rank-andfile employees of a company are allowed
to affiliate with the same national federation. Consequently, this
Court has held in Atlas Lithographic Services Inc. v. Laguesma[11]
that -
To avoid a situation where supervisors would merge with the rank-
and-file or where the supervisors labor organization would
represent conflicting interests, then a local supervisors union should
not be allowed to affiliate with a national federation of unions of
rank-and-file employees where that federation actively participates
in union activities in the company.
As we explained in that case, however, such a situation would
obtain only where two conditions concur: First, the rank-and-file
employees are directly under the authority of supervisory
employees.[12] Second, the national federation is actively involved
in union activities in the company.[13] Indeed, it is the presence of
these two conditions which distinguished Atlas Lithographic
Services, Inc. v. Laguesma from Adamson & Adamson, Inc. v.
CIR[14] where a different conclusion was reached.
The affiliation of two local unions in a company with the same
national federation is not by itself a negation of their independence
since in relation to the employer, the local unions are considered as
the principals, while the federation is deemed to be merely their
agent. This conclusion is in accord with the policy that any
limitation on the exercise by employees of the right to self-
organization guaranteed in the Constitution must be construed
strictly. Workers should be allowed the practice of this freedom to
the extent recognized in the fundamental law. As held in Liberty
Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.:[15]
The locals are separate and distinct units primarily designed to
secure and maintain an equality of bargaining power between the
employer and their employee members in the economic struggle for
the fruits of the joint productive effort of labor and capital; and the
association of locals into the national unionwas in furtherance of the
same end. These associations are consensual entities capable of
entering into such legal relations with their members. The essential
purpose was the affiliation of the local unions into a common
enterprise to increase by collective action the common bargaining
power in respect of the terms and conditions of labor. Yet the locals
remained the basic units of association, free to serve their own and
the common interest of all, and free also to renounce the affiliation
for mutual welfare upon the terms laid down in the agreement
which brought it to existence.[16]
The questions in this case, therefore, are whether the rank-and-file
employees of petitioner DLSUMCCM who compose a labor union are
directly under the supervisory employees whose own union is
affiliated with the same national federation (Federation of Free
Workers) and whether such national federation is actively involved
in union activities in the company so as to make the two unions in
the same company, in reality, just one union.
Although private respondent FFW-DLSUMCCMSUC and another
union composed of rank-and-file employees of petitioner
DLSUMCCM are indeed affiliated with the same national federation,
the FFW, petitioner DLSUMCCM has not presented any evidence
showing that the rank-and-file employees composing the other
union are directly under the authority of the supervisory
employees. As held in Adamson & Adamson, Inc. v. CIR,[17] the fact
that the two groups of workers are employed by the same company
and the fact that they are affiliated with a common national
federation are not sufficient to justify the conclusion that their
organizations are actually just one. Their immediate professional
relationship must be established. To borrow the language of
Adamson & Adamson, Inc. v. CIR:[18]
We find without merit the contention of petitioner that if affiliation
will be allowed, only one union will in fact represent both
supervisors and rank-and-file employees of the petitioner; that
there would be an indirect affiliation of supervisors and rank-andfile
employees with one labor organization; that there would be a
merging of the two bargaining units; and that the respondent union
will lose its independence because it becomes an alter ego of the
federation.[19]
Mention has already been made of the fact that the petition for
certification election in this case was filed by the FFW on behalf of
the local union. This circumstance, while showing active
involvement by the FFW in union activities at the company, is by
itself insufficient to justify a finding of violation of Art. 245 since
there is no proof that the supervisors who compose the local union
have direct authority over the rank-and-file employees composing
the other local union which is also affiliated with the FFW. This fact
differentiates the case from Atlas Lithographic Services, Inc. v.
Laguesma,[20] in which, in addition to the fact that the petition for
certification election had been filed by the national federation, it
was shown that the rank-and-file employees were directly under
the supervisors organized by the same federation.
It follows that respondent labor officials did not gravely abuse their
discretion.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
Regalado (Chairman), Melo, and Martinez, JJ., concur.
Puno- no part.

 THIRD DIVISION
[G.R. No. 142000. January 22, 2003.]
TAGAYTAY HIGHLAND'S INTERNATIONAL GOLF CLUB
INCORPORATED, petitioner, vs. TAGAYTAY HIGHLANDS
EMPLOYEES UNION-PGTWO, respondent.
Cayetano Sebastian Dado & Cruz for petitioner.
Romeo C. Lagman for private respondent.
SYNOPSIS
The Tagaytay Highlands Employees Union (THEU), a legitimate
labor organization representing majority of the rank-and-file
employees of petitioner, filed a petition for certification election
before the Department of Labor and Employment (DOLE)
Mediation-Arbitration Unit, Regional Branch No. IV. Petitioner
opposed the petition on the ground that the list of union members
submitted by it was defective and fatally flawed as it included the
names and signatures of supervisors, resigned, terminated and
absent without leave (AWOL) employees, as well as employees of
The Country Club, Inc., a corporation distinct and separate from
petitioner; and that out of the 192 signatories to the petition, only
71 were actual rank-and-file employees of petitioner. Despite
petitioner's opposition, the DOLE Med-Arbiter ordered the holding of
a certification election among the rank-and-file employees of
petitioner. The latter appealed to the Office of the DOLE Secretary
which set aside the said Med-Arbiter's Order and accordingly
dismissed the petition for certification election on the ground that
there is a "clear absence of community or mutuality of interests,"
finding that the union sought to represent two separate bargaining
units (supervisory employees and rank-and-file employees) as well
as employees of two separate and distinct corporate entities. Upon
motion for reconsideration by the union, DOLE Undersecretary
Rosalinda Dimalipis-Baldoz, by authority of the DOLE Secretary,
issued a Resolution setting aside the June 4, 1998 Resolution
dismissing the petition for certification election. Records of the case
were ordered remanded to the Office of the Med-Arbiter for the
conduct of certification election. Petitioner's motion for
reconsideration having been denied, it filed a petition for certiorari
before the Supreme Court. The Court, however, referred the
petition to the Court of Appeals. The appellate court denied
petitioner's petition and affirmed the DOLE Resolution. The
appellate court ruled that petitioner failed to adduce substantial
evidence to support its allegations. Hence. the present petition for
certiorari. HaTSDA
The Supreme Court denied the petition. The inclusion in a union of
disqualified employees is not among the grounds for cancellation,
unless such inclusion is due to misrepresentation, false statement
or fraud under the circumstances enumerated in Sections (a) and
(c) of Article 239 of the Labor Code. The union, having been validly
issued a certificate of registration, should be considered to have
already acquired juridical personality which may not be assailed
collaterally. As for petitioner's allegation that some of the
signatures in the petition for certification election were obtained
through fraud, false statement and misrepresentation, the proper
procedure is for petitioner to file a petition for cancellation of the
certificate of registration, and not to intervene in a petition for
certification election. As for the lack of mutuality of interest,
petitioner's argument does not lie given its failure to present
substantial evidence that the assailed employees are actually
occupying supervisory positions. While petitioner submitted a list of
its employees with their corresponding job titles and ranks, there is
nothing mentioned about the supervisors' respective duties, powers
and prerogatives that would show that they can effectively
recommend managerial actions which require the use of
independent judgment.
SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR ORGANIZATIONS;
GROUNDS FOR CANCELLATION OF UNION REGISTRATION; THE
INCLUSION IN A UNION OF DISQUALIFIED EMPLOYEES IS NOT A
GROUND FOR CANCELLATION UNLESS SUCH INCLUSION IS DUE
TO MISREPRESENTATION, FALSE STATEMENT OR FRAUD UNDER
THE CIRCUMSTANCES ENUMERATED IN SECTIONS (a) AND (c) OF
ARTICLE 239 OF THE LABOR CODE. — After a certificate of
registration is issued to a union, its legal personality cannot be
subject to collateral attack. It may be questioned only in an
independent petition for cancellation in accordance with Section 5
of Rule V, Book IV of the "Rules to Implement the Labor Code." The
grounds for cancellation of union registration are provided for under
Article 239 of the Labor Code. The inclusion in a union of
disqualified employees is not among the grounds for cancellation,
unless such inclusion is due to misrepresentation, false statement
or fraud under the circumstances enumerated in Sections (a) and
(c) of Article 139 of above-quoted Article 239 of the Labor Code.
THEU, having been validly issued a certificate of registration, should
be considered to have already acquired juridical personality which
may not be assailed collaterally. As for petitioner's allegation that
some of the signatures in the petition for certification election were
obtained through fraud, false statement and misrepresentation, the
proper procedure is, as reflected above, for it to file a petition for
cancellation of the certificate of registration, and not to intervene in
a petition for certification election.
2. ID.; ID.; ID.; LACK OF MUTUALITY OF INTEREST ARGUMENT OF
PETITIONER WILL NOT LIE IN CASE AT BAR; NO SUBSTANTIAL
EVIDENCE THAT THE ASSAILED EMPLOYEES ARE ACTUALLY
OCCUPYING SUPERVISORY POSITIONS. — As for the lack of
mutuality of interest argument of petitioner, it, at all events, does
not lie given, as found by the court a quo, its failure to present
substantial evidence that the assailed employees are actually
occupying supervisory positions. While petitioner submitted a list of
its employees with their corresponding job titles and ranks, there is
nothing mentioned about the supervisors' respective duties, powers
and prerogatives that would show that they can effectively
recommend managerial actions which require the use of
independent judgment. As this Court put it in Pepsi-Cola Products
Philippines, Inc. v. Secretary of Labor: Designation should be
reconciled with the actual job description of subject employees . . .
The mere fact that an employee is designated manager does not
necessarily make him one. Otherwise, there would be an absurd
situation where one can be given the title just to be deprived of the
right to be a member of a union. In the case of National Steel
Corporation vs. Laguesma (G.R. No. 103743, January 29, 1996), it
was stressed that: What is essential is the nature of the employee's
function and not the nomenclature or title given to the job which
determines whether the employee has rank-and-file or managerial
status or whether he is a supervisory employee. TaCIDS
DECISION
CARPIO MORALES, J p:
Before this Court on certiorari under Rule 45 is the petition of the
Tagaytay Highlands International Golf Club Incorporated (THIGCI)
assailing the February 15, 2002 decision of the Court of Appeals
denying its petition to annul the Department of Labor and
Employment (DOLE) Resolutions of November 12, 1998 and
December 29, 1998.
On October 16, 1997, the Tagaytay Highlands Employees Union
(THEU) — Philippine Transport and General Workers Organization
(PTGWO), Local Chapter No. 776, a legitimate labor organization
said to represent majority of the rank-and-file employees of
THIGCI, filed a petition for certification election before the DOLE
Mediation-Arbitration Unit, Regional Branch No. IV.
THIGCI, in its Comment 1 filed on November 27, 1997, opposed
THEU's petition for certification election on the ground that the list
of union members submitted by it was defective and fatally flawed
as it included the names and signatures of supervisors, resigned,
terminated and absent without leave (AWOL) employees, as well as
employees of The Country Club, Inc., a corporation distinct and
separate from THIGCI; and that out of the 192 signatories to the
petition, only 71 were actual rank-and-file employees of THIGCI.
THIGCI thus submitted a list of the names of its 71 actual rank-
and-file employees which it annexed 2 to its Comment to the
petition for certification election. And it therein incorporated the
following tabulation 3 showing the number of signatories to said
petition whose membership in the union was being questioned as
disqualified and the reasons for disqualification:
# of
Reasons for Disqualification
Signatures
13
Supervisors of THIGCI
6
Resigned employees of THIGCI
2
AWOL employees of THIGCI
53
Rank-and-file employees of The Country Club at
Tagaytay Highlands, Inc.
14
Supervisors of The Country Club at Tagaytay
Highlands, Inc.
6
Resigned employees of The Country Club at
Tagaytay Highlands, Inc.
3
Terminated employees of The Country Club at
Tagaytay Highlands, Inc.
1 amended, and its Implementing Rules as amended by Department
AWOL employees of The Country Club at
Tagaytay Highlands, Inc.
4 due course to this petition is therefore proper and appropriate. 9
Signatures that cannot be deciphered
16
Names in list that were erased
2 separate and distinct corporation, the Med-Arbiter held that the
Names with first names only
THIGCI also alleged that some of the signatures in the list of union
members were secured through fraudulent and deceitful means,
and submitted copies of the handwritten denial and withdrawal of
some of its employees from participating in the petition. 4
Replying to THIGCI's Comment, THEU asserted that it had complied
with all the requirements for valid affiliation and inclusion in the
roster of legitimate labor organizations pursuant to DOLE
Department Order No. 9, series of 1997, 5 on account of which it
was duly granted a Certification of Affiliation by DOLE on October
10, 1997; 6 and that Section 5, Rule V of said Department Order
provides that the legitimacy of its registration cannot be subject to
collateral attack, and for as long as there is no final order of
cancellation, it continues to enjoy the rights accorded to a
legitimate organization.
THEU thus concluded in its Reply 7 that under the circumstances,
the Med-Arbiter should, pursuant to Article 257 of the Labor Code
and Section 11, Rule XI of DOLE Department Order No. 09,
automatically order the conduct of a certification election.
By Order of January 28, 1998, 8 DOLE Med-Arbiter Anastacio Bactin
ordered the holding of a certification election among the rank-and-
file employees of THIGCI in this wise, quoted verbatim:
We evaluated carefully this instant petition and we are of the
opinion that it is complete in form and substance. In addition
thereto, the accompanying documents show that indeed petitioner
union is a legitimate labor federation and its local/chapter was duly
reported to this Office as one of its affiliate local/chapter. Its due
reporting through the submission of all the requirements for
registration of a local/chapter is a clear showing that it was already
included in the roster of legitimate labor organizations in this Office
pursuant to Department Order No. 9 Series of 1997 with all the
legal right and personality to institute this instant petition. Pursuant
therefore to the provisions of Article 257 of the Labor Code, as
Order No. 9, since the respondent's establishment is unorganized,
the holding of a certification election is mandatory for it was clearly
established that petitioner is a legitimate labor organization. Giving
(Italics supplied)
Passing on THIGCI's allegation that some of the union members are
supervisory, resigned and AWOL employees or employees of a
same should be properly raised in the exclusion-inclusion
proceedings at the pre-election conference. As for the allegation
that some of the signatures were secured through fraudulent and
deceitful means, he held that it should be coursed through an
independent petition for cancellation of union registration which is
within the jurisdiction of the DOLE Regional Director. In any event,
the Med-Arbiter held that THIGCI failed to submit the job
descriptions of the questioned employees and other supporting
documents to bolster its claim that they are disqualified from
joining THEU.
THIGCI appealed to the Office of the DOLE Secretary which, by
Resolution of June 4, 1998, set aside the said Med-Arbiter's Order
and accordingly dismissed the petition for certification election on
the ground that there is a "clear absence of community or
mutuality of interests," it finding that THEU sought to represent two
separate bargaining units (supervisory employees and rank-and-file
employees) as well as employees of two separate and distinct
corporate entities.
Upon Motion for Reconsideration by THEU, DOLE Undersecretary
Rosalinda Dimalipis-Baldoz, by authority of the DOLE Secretary,
issued DOLE Resolution of November 12, 1998 10 setting aside the
June 4, 1998 Resolution dismissing the petition for certification
election. In the November 12, 1998 Resolution, Undersecretary
Dimapilis-Baldoz held that since THEU is a local chapter, the twenty
percent (20%) membership requirement is not necessary for it to
acquire legitimate status, hence, "the alleged retraction and
withdrawal of support by 45 of the 70 remaining rank-and-file
members . . . cannot negate the legitimacy it has already acquired
before the petition;" that rather than disregard the legitimate
status already conferred on THEU by the Bureau of Labor Relations,
the names of alleged disqualified supervisory employees and
employees of the Country Club, Inc., a separate and distinct
corporation, should simply be removed from the THEU's roster of
membership; and that regarding the participation of alleged
resigned and AWOL employees and those whose signatures are
illegible, the issue can be resolved during the inclusion-exclusion
proceedings at the pre-election stage.
The records of the case were thus ordered remanded to the Office
of the Med-Arbiter for the conduct of certification election.
THIGCI's Motion for Reconsideration of the November 12, 1998
Resolution having been denied by the DOLE Undersecretary by
Resolution of December 29, 1998, 11 it filed a petition for certiorari
before this Court which, by Resolution of April 14, 1999, 12
referred it to the Court of Appeals in line with its pronouncement in
National Federation of Labor (NFL) v. Hon. Bienvenido E. Laguesma,
et al., 13 and in strict observance of the hierarchy of courts, as
emphasized in the case of St. Martin Funeral Home v. National
Labor Relations Commission. 14
By Decision of February 15, 2000, 15 the Court of Appeals denied
THIGCI's Petition for Certiorari and affirmed the DOLE Resolution
dated November 12, 1998. It held that while a petition for
certification election is an exception to the innocent bystander rule,
hence, the employer may pray for the dismissal of such petition on
the basis of lack of mutuality of interests of the members of the
union as well as lack of employer-employee relationship following
this Court's ruling in Toyota Motor Philippines Corporation v. Toyota
Motor Philippines Corporation Labor Union et al. 16 and Dunlop
Slazenger [Phils.] v. Hon. Secretary of Labor and Employment et
al., 17 petitioner failed to adduce substantial evidence to support
its allegations.
Hence, the present petition for certiorari, raising the following
"ISSUES/ASSIGNMENT OF ERRORS:
THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE
RESOLUTION DATED 12 NOVEMBER 1998 HOLDING THAT
SUPERVISORY EMPLOYEES AND NON-EMPLOYEES COULD SIMPLY
BE REMOVED FROM APPELLEES ROSTER OF RANK-AND-FILE
MEMBERSHIP INSTEAD OF RESOLVING THE LEGITIMACY OF
RESPONDENT UNION'S STATUS
THE COURT OF APPEALS GRIEVOUSLY ERRED IN AFFIRMING THE
RESOLUTION DATED 12 NOVEMBER 1998 HOLDING THAT THE
DISQUALIFIED EMPLOYEES' STATUS COULD READILY BE RESOLVED
DURING THE INCLUSION AND EXCLUSION PROCEEDINGS
THE COURT OF APPEALS GRIEVOUSLY ERRED IN NOT HOLDING
THAT THE ALLEGATIONS OF PETITIONER HAD BEEN DULY PROVEN
BY FAILURE OF RESPONDENT UNION TO DENY THE SAME AND BY
THE SHEER WEIGHT OF EVIDENCE INTRODUCED BY PETITIONER
AND CONTAINED IN THE RECORDS OF THE CASE" 18 "
The statutory authority for the exclusion of supervisory employees
in a rank-and-file union, and vice-versa, is Article 245 of the Labor
Code, to wit:
Article 245. Ineligibility of managerial employees to join any labor
organization; right of supervisory employees. — Managerial
employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees
but may join, assist or form separate labor organizations of their
own.
While above-quoted Article 245 expressly prohibits supervisory
employees from joining a rank-and-file union, it does not provide
what would be the effect if a rank-and-file union counts supervisory
employees among its members, or vice-versa.
Citing Toyota 19 which held that "a labor organization composed of
both rank-and-file and supervisory employees is no labor
organization at all," and the subsequent case of Progressive
Development Corp. — Pizza Hut v. Ledesma 20 which held that:
"The Labor Code requires that in organized and unorganized
establishments, a petition for certification election must be filed by
a legitimate labor organization. The acquisition of rights by any
union or labor organization, particularly the right to file a petition
for certification election, first and foremost, depends on whether or
not the labor organization has attained the status of a legitimate
labor organization.
In the case before us, the Med-Arbiter summarily disregarded the
petitioner's prayer that the former look into the legitimacy of the
respondent Union by a sweeping declaration that the union was in
the possession of a charter certificate so that 'for all intents and
purposes, Sumasaklaw sa Manggagawa sa Pizza Hut (was) a
legitimacy organization, "' 21 (italics supplied),
petitioner contends that, quoting Toyota, "[i]t becomes
necessary . . ., anterior to the granting of an order allowing a
certification election, to inquire into the composition of any labor
organization whenever the status of the labor organization is
challenged on the basis of Article 245 of the Labor Code." 22
Continuing, petitioner argues that without resolving the status of
THEU, the DOLE Undersecretary "conveniently deferred the
resolution on the serious infirmity in the membership of [THEU] and
ordered the holding of the certification election" which is frowned
upon as the following ruling of this Court shows:
We also do not agree with the ruling of the respondent Secretary of
Labor that the infirmity in the membership of the respondent union
can be remedied in "the pre-election conference thru the exclusion-
inclusion proceedings wherein those employees who are occupying
rank-and-file positions will be excluded from the list of eligible
voters." Public respondent gravely misappreciated the basic
antipathy between the interest of supervisors and the interest of
rank-and-file employees. Due to the irreconcilability of their interest
we held in Toyota Motor Philippines v. Toyota Motors Philippines
Corporation Labor Union, viz:
'xxx xxx xxx
"Clearly, based on this provision Article 245, a labor organization
composed of both rank-and-file and supervisor employees is no
labor organization at all. It cannot, for any guise or purpose, be a
legitimate labor organization. Not being one, an organization which
carries a mixture of rank-and-file and supervisory employees
cannot posses any of the rights of a legitimate labor organization,
including the right to file a petition for certification election for the
purpose of collective bargaining. It becomes necessary, therefore,
anterior to the granting of an order allowing a certification election,
to inquire into the composition of any labor organization whenever
the status of the labor organization is challenged on the basis of
Article 245 of the Labor Code." (Italics by petitioner) (Dunlop
Slazenger (Phils.), v. Secretary of Labor, 300 SCRA 120 [1998];
(italics supplied by petitioner.)
The petition fails. After a certificate of registration is issued to a
union, its legal personality cannot be subject to collateral attack. It
may be questioned only in an independent petition for cancellation
in accordance with Section 5 of Rule V, Book IV of the "Rules to
Implement the Labor Code" (Implementing Rules) which section
reads:
Sec. 5. Effect of registration. The labor organization or workers'
association shall be deemed registered and vested with legal
personality on the date of issuance of its certificate of registration.
Such legal personality cannot thereafter be subject to collateral
attack, but may be questioned only in an independent petition for
cancellation in accordance with these Rules. (Italics supplied)
The grounds for cancellation of union registration are provided for
under Article 239 of the Labor Code, as follows:
Art. 239. Grounds for cancellation of union registration. The
following shall constitute grounds for cancellation of union
registration:
(a) Misrepresentation, false statement or fraud in connection with
the adoption or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification;
(b) Failure to submit the documents mentioned in the preceding
paragraph within thirty (30) days from adoption or ratification of
the constitution and by-laws or amendments thereto;
(c) Misrepresentation, false statements or fraud in connection with
the election of officers, minutes of the election of officers, the list of
voters, or failure to subject these documents together with the list
of the newly elected/appointed officers and their postal addresses
within thirty (30) days from election;
(d) Failure to submit the annual financial report to the Bureau
within thirty (30) days after the losing of every fiscal year and
misrepresentation, false entries or fraud in the preparation of the
financial report itself;
(e) Acting as a labor contractor or engaging in the "cabo" system,
or otherwise engaging in any activity prohibited by law;
(f) Entering into collective bargaining agreements which provide
terms and conditions of employment below minimum standards
established by law;
(g) Asking for or accepting attorney's fees or negotiation fees from
employers;
(h) Other than for mandatory activities under this Code, checking
off special assessments or any other fees without duly signed
individual written authorizations of the members;
(i) Failure to submit list of individual members to the Bureau once a
year or whenever required by the Bureau; and
(j) Failure to comply with the requirements under Articles 237 and
238, (Italics supplied),
while the procedure for cancellation of registration is provided for in
Rule VIII, Book V of the Implementing Rules.
The inclusion in a union of disqualified employees is not among the
grounds for cancellation, unless such inclusion is due to
misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) and (c) of Article 239 of
above-quoted Article 239 of the Labor Code.
THEU, having been validly issued a certificate of registration, should What is essential is the nature of the employee's function and not
be considered to have already acquired juridical personality which the nomenclature or title given to the job which determines
may not be assailed collaterally. whether the employee has rank-and-file or managerial status or
As for petitioner's allegation that some of the signatures in the whether he is a supervisory employee. (Italics supplied).
petition for certification election were obtained through fraud, false WHEREFORE, the petition is hereby DENIED. Let the records of the
statement and misrepresentation, the proper procedure is, as case be remanded to the office of origin, the Mediation-Arbitration
reflected above, for it to file a petition for cancellation of the Unit, Regional Branch No. IV, for the immediate conduct of a
certificate of registration, and not to intervene in a petition for certification election subject to the usual pre-election conference.
certification election. SO ORDERED.
Regarding the alleged withdrawal of union members from Puno, Panganiban, Sandoval-Gutierrez and Corona, JJ., concur.
participating in the certification election, this Court's following ||| (Tagaytay Highlands International Golf Club Inc. v. Tagaytay
ruling is instructive: Highlands Employees Union-PGTWO, G.R. No. 142000, [January 22,
"'[T]he best forum for determining whether there were indeed 2003], 443 PHIL 841-855)
retractions from some of the laborers is in the certification election
itself wherein the workers can freely express their choice in a secret
ballot. Suffice it to say that the will of the rank-and-file employees
should in every possible instance be determined by secret ballot
rather than by administrative or quasi-judicial inquiry. Such
representation and certification election cases are not to be taken
as contentious litigations for suits but as mere investigations of a
non-adversary, fact-finding character as to which of the competing
unions represents the genuine choice of the workers to be their sole
and exclusive collective bargaining representative with their
employer." 23
As for the lack of mutuality of interest argument of petitioner, it, at
all events, does not lie given, as found by the court a quo, its
failure to present substantial evidence that the assailed employees
are actually occupying supervisory positions.
While petitioner submitted a list of its employees with their
corresponding job titles and ranks, 24 there is nothing mentioned
about the supervisors' respective duties, powers and prerogatives
that would show that they can effectively recommend managerial
actions which require the use of independent judgment. 25
As this Court put it in Pepsi-Cola Products Philippines, Inc. v.
Secretary of Labor: 26
Designation should be reconciled with the actual job description of
subject employees . . . The mere fact that an employee is
designated manager does not necessarily make him one.
Otherwise, there would be an absurd situation where one can be
given the title just to be deprived of the right to be a member of a
union. In the case of National Steel Corporation vs. Laguesma (G.
R. No. 103743, January 29, 1996), it was stressed that: