1. [G.R. No.
No. 157086, February 18, 2013] workers under them, assess and evaluate their performance, make regular reports and
LEPANTO CONSOLIDATED MINING COMPANY, Petitioner, v. THE LEPANTO CAPATAZ
UNION,Respondents.
DECISION
BERSAMIN, J.:
Capatazes are not rank-and-file employees because they perform supervisory functions for
the management; hence, they may form their own union that is separate and distinct from
the labor organization of rank-and-file employees.
The Case
Lepanto Consolidated Mining Company (Lepanto) assails the Resolution promulgated on
December 18, 2002,1 whereby the Court of Appeals (CA) dismissed its petition
for certiorari on the ground of its failure to first file a motion for reconsideration against
the decision rendered by the Secretary of the Department of Labor and Employment
(DOLE); and the resolution promulgated on January 31, 2003,2whereby the CA denied
Lepanto’s motion for reconsideration.
Antecedents
As a domestic corporation authorized to engage in large-scale mining, Lepanto operated
several mining claims in Mankayan, Benguet. On May 27, 1998, respondent Lepanto
Capataz Union (Union), a labor organization duly registered with DOLE, filed a petition for
consent election with the Industrial Relations Division of the Cordillera Regional Office
(CAR) of DOLE, thereby proposing to represent 139 capatazes of Lepanto.3
In due course, Lepanto opposed the petition,4 contending that the Union was in reality
seeking a certification election, not a consent election, and would be thereby competing
with the Lepanto Employees Union (LEU), the current collective bargaining agent. Lepanto
pointed out that the capatazes were already members of LEU, the exclusive representative
of all rank-and-file employees of its Mine Division.
On May 2, 2000, Med-Arbiter Michaela A. Lontoc of DOLE-CAR issued a ruling to the effect
that the capatazes could form a separate bargaining unit due to their not being rank-and-
file employees,5viz:
xxxx
We agree with petitioner that its members perform a function totally different from the
rank-and-file employees. The word capataz is defined in Webster’s Third International
Dictionary, 1986 as “a boss”, “foreman” and “an overseer”. The employer did not dispute
during the hearing that the capatazes indeed take charge of the implementation of the
job orders by supervising and instructing the miners, mackers and other rank-and-file
recommends (sic) new systems and procedure of work, as well as guidelines for the
discipline of employees. As testified to by petitioner’s president, the capatazes are
neither rank-and-file nor supervisory and, more or less, fall in the middle of their rank. In
this respect, we can see that indeed the capatazes differ from the rank-and-file and can
by themselves constitute a separate bargaining unit.
While it is claimed by the employer that historically, the capatazes have been considered
among the rank-and-file and that it is only now that they seek a separate bargaining unit
such history of affiliation with the rank-and-file association of LEU cannot totally prevent
the capatazes from disaffiliating and organizing themselves separately. The constitutional
right of every worker to self-organization essentially gives him the freedom to join or not
to join an organization of his own choosing.
The fact that petitioner seeks to represent a separate bargaining unit from the rank-and-
file employees represented by the LEU renders the contract bar rule inapplicable. While
the collective bargaining agreement existing between the LEU and the employer covering
the latter’s rank-and-file employee covers likewise the capatazes, it was testified to and
undisputed by the employer that the capatazes did not anymore participate in the
renegotiation and ratification of the new CBA upon expiration of their old one on 16
November 1998. Their nonparticipation was apparently due to their formation of the new
bargaining unit. Thus, while the instant petition was filed on 27 May 1998, prior to the
freedom period, in the interest of justice and in consonance with the constitutional right of
workers to self-organization, the petition can be deemed to have been filed at the time the
60-day freedom period set in. After all, the petition was still pending and unresolved
during this period.
WHEREFORE, the petition is hereby granted and a certification election among the capataz
employees of the Lepanto Consolidated Mining Company is hereby ordered conducted,
subject to the usual pre-election and inclusion/exclusion proceedings, with the following
choices:
1. Lepanto Capataz Union; and
2. No Union.
The employer is directed to submit to this office within ten (10) days from receipt hereof a
copy of the certified list of its capataz employees and the payroll covering the said
bargaining unit for the last three (3) months prior to the issuance hereof.
SO DECIDED. 6
Lepanto appealed to the DOLE Secretary.7
On July 12, 2000, then DOLE Undersecretary Rosalinda Dimapilis-Baldoz (Baldoz), acting by
authority of the DOLE Secretary, affirmed the ruling of Med-Arbiter Lontoc,8 pertinently
stating as follows:
1
xxxx
The bargaining unit sought to be represented by the appellee are the capataz employees
of the appellant. There is no other labor organization of capatazes within the employer
unit except herein appellant. Thus, appellant is an unorganized establishment in so far as
the bargaining unit of capatazes is concerned. In accordance with the last paragraph of
Section 11, Rule XI, Department Order No. 9 which provides that “in a petition filed by a
legitimate labor organization involving an unorganized establishment, the Med-Arbiter
shall, pursuant to Article 257 of the Code, automatically order the conduct of certification
election after determining that the petition has complied with all requirements under
Section 1, 2 and 4 of the same rules and that none of the grounds for dismissal thereof
exists”, the order for the conduct of a certification election is proper.
Finally, as to the issue of whether the Med-Arbiter exhibited ignorance of the law when
she directed the conduct of a certification election when appellee prays for the conduct of
a consent election, let it be stressed that appellee seeks to be recognized as the sole and
exclusive bargaining representative of all capataz employees of appellant. There are two
modes by which this can be achieved, one is by voluntary recognition and two, by consent
or certification election. Voluntary recognition under Rule X, Department Order No. 9 is a
mode whereby the employer voluntarily recognizes the union as the bargaining
representative of all the members in the bargaining unit sought to be represented.
Consent and certification election under Rules XI and XII of Department Order No. 9 is a
mode whereby the members of the bargaining unit decide whether they want a bargaining
representative and if so, who they want it to be. The difference between a consent
election and a certification election is that the conduct of a consent election is agreed
upon by the parties to the petition while the conduct of a certification election is ordered
by the Med-Arbiter. In this case, the appellant withdrew its consent and opposed the
conduct of the election. Therefore, the petition necessarily becomes one of a petition for
certification election and the Med-Arbiter was correct in granting the same.9
xxxx
In the ensuing certification election held on November 28, 2000, the Union garnered 109
of the 111 total valid votes cast.10
On the day of the certification election, however, Lepanto presented an
opposition/protest.11 Hence, on February 8, 2001, a hearing was held on Lepanto’s
opposition/protest. Although the parties were required in that hearing to submit their
respective position papers, Lepanto later opted not to submit its position paper,12 and
contended that the issues identified during the hearing did not pose any legal issue to be
addressed in a position paper.13
On April 26, 2001, Med-Arbiter Florence Marie A. Gacad-Ulep of DOLE-CAR rendered a
decision certifying the Union as the sole and exclusive bargaining agent of all capatazes of
Lepanto.14
On May 18, 2001, Lepanto appealed the decision of Med-Arbiter Gacad-Ulep to the DOLE
Secretary.
By her Resolution dated September 17, 2002,15 DOLE Secretary Patricia A. Sto. Tomas
affirmed the decision dated April 26, 2001, holding and disposing thus:
Appellant accused Med-Arbiter Ulep of grave abuse of discretion amounting to lack of
jurisdiction based on her failure to resolve appellant’s motion to modify order to submit
position papers and on rendering judgment on the basis only of appellee’s position paper.
We deny.
Section 5, Rule XXV of Department Order No. 9, otherwise known as the New Rules
Implementing Book V of the Labor Code, states that “in all proceedings at all levels,
incidental motions shall not be given due course, but shall remain as part of the records
for whatever they may be worth when the case is decided on the merits”.
Further, the motion to modify order to submit position papers filed by appellant is without
merit. Appellant claimed that the issues over which Med-Arbiter Ulep directed the
submission of position papers were: (1) failure to challenge properly; (2) failure (especially
of LEU) to participate actively in the proceedings before the decision calling for the
conduct of certification election; and (3) validity of earlier arguments. According to
appellant, the first issue was for appellee LCU to reply to in its position paper, the second
issue was for the LEU and the third issue for appellant company to explain in their
respective position paper. It was the position of appellant company that unless the parties
filed their position paper on each of their respective issues, the other parties cannot
discuss the issues they did not raise in the same position papers and have to await receipt
of the others’ position paper for their appropriate reply.
Section 9, Rule XI of Department Order No. 9, which is applied with equal force in the
disposition of protests on the conduct of election, states that “the Med-Arbiter shall in the
same hearing direct all concerned parties, including the employer, to simultaneously
submit their respective position papers within a non-extendible period of ten days”. The
issues as recorded in the minutes of 28 February 2001 hearing before the Med-Arbiter are
clear. The parties, including appellant company were required to submit their respective
positions on whether there was proper challenge of the voters, whether LEU failed to
participate in the proceedings, if so, whether it should be allowed to participate at this
belated stage and whether the arguments raised during the pre-election conferences and
in the protests are valid. The parties, including appellant company were apprised of these
issues and they agreed thereto. The minutes of the hearing even contained the statement
that “no order will issue” and that “the parties are informed accordingly”. If there is any
matter that had to be clarified, appellant should have clarified the same during the said
hearing and refused to file its position paper simultaneously with LCU and LEU. It appears
that appellant did not do so and acquiesced to the filing of its position paper within fifteen
days from the date of said hearing.
Neither is there merit in appellant’s contention that the Med-Arbiter resolved the protest
based solely on appellee LCU’s position paper. Not only did the Med-Arbiter discuss the
demerits of appellant’s motion to modify order to submit position papers but likewise the
2
demerits of its protest. We do not, however, agree with the Med-Arbiter that the protest
should be dismissed due to appellant’s failure to challenge the individual voters during the
election. We take note of the minutes of the pre-election conference on 10 November
2000, thus:
“It was also agreed upon (by union and management’s legal officer) that all those listed
will be allowed to vote during the certification election subject to challenge by
management on ground that none of them belongs to the bargaining unit”. (Underscoring
supplied)
It is therefore, not correct to say that there was no proper challenge made by appellant
company. The challenge was already manifested during the pre-election conference,
specifying that all listed voters were being challenged because they do not belong to the
bargaining unit of capatazes. Likewise, the formal protest filed by appellant company on
the day of the election showed its protest to the conduct of the election on the grounds
that (1) none of the names submitted and included (with pay bracket 8 and 9) to vote
qualifies as capataz under the five-point characterization made in 02 May 2000 decision
calling for the conduct of certification election; (2) the characterization made in the 02
May 2000 decision pertains to shift bosses who constitutes another union, the Lepanto
Local Staff Union; and (3) the names listed in the voters’ list are members of another
union, the Lepanto Employees Union. This constitutes proper challenge to the eligibility of
all the voters named in the list which includes all those who cast their votes. The election
officer should have not canvassed the ballots and allowed the Med-Arbiter to first
determine their eligibility.
Notwithstanding the premature canvass of the votes, we note that appellant company
failed to support its grounds for challenge with sufficient evidence for us to determine the
validity of its claim. No job description of the challenged voters was submitted by
appellant from which we can verify whether the said voters are indeed disqualified from
the alleged five-point characterization made in the 02 May 2000 decision, either before
the Med-Arbiter or on appeal. Neither was the job description of the shift bosses whom
appellant company claims pertain to the alleged five-point characterization submitted for
our perusal. The challenge must perforce fail for lack of evidence.
As to the alleged membership of appellee LCU’s member with another union LEU, the
issue has been resolved in the 02 May 2000 decision of Med-Arbiter Lontoc which we
affirmed on 12 July 2000.
WHEREFORE, the appeal is hereby DENIED for lack of merit and the decision of the Med-
Arbiter dated 26 April 2001, certifying Lepanto Capataz Union as the sole and exclusive
bargaining agent of all capataz workers of Lepanto Consolidated Mining Company,
is AFFIRMED.
SO RESOLVED.16
Ruling of the CA
Still dissatisfied with the result, but without first filing a motion for reconsideration,
Lepanto challenged in the CA the foregoing decision of the DOLE Secretary through a
petition for certiorari.
On December 18, 2002, the CA dismissed Lepanto’s petition for certiorari, stating in its first
assailed resolution:
Considering that the petitioner failed to file a prior motion for reconsideration of the
Decision of the public respondent before instituting the present petition as mandated by
Section 1 of Rule 65 of the 1997 Rules of Civil Procedure, as amended, the instant “Petition
for Certiorari Under Rule 65 with Prayer for Temporary Restraining Order and Injunction” is
hereby DISMISSED.
Well-settled is the rule that the “filing of a petition for certiorari under Rule 65 without first
moving for reconsideration of the assailed resolution generally warrants the petition’s
outright dismissal. As we consistently held in numerous cases, a motion for reconsideration
by a concerned party is indispensable for it affords the NLRC an opportunity to rectify
errors or mistakes it might have committed before resort to the courts can be had.
It is settled that certiorari will lie only if there is no appeal or any other plain, speedy and
adequate remedy in the ordinary course of law against acts of public respondents. Here,
the plain and adequate remedy expressly provided by law was a motion for reconsideration
of the impugned resolution, based on palpable or patent errors, to be made under oath and
filed within ten (10) days from receipt of the questioned resolution of the NLRC, a
procedure which is jurisdictional. Further, it should be stressed that without a motion for
reconsideration seasonably filed within the ten-day reglementary period, the questioned
order, resolution or decision of NLRC, becomes final and executory after ten (10) calendar
days from receipt thereof.” (Association of Trade Unions (ATU), Rodolfo Monteclaro and
Edgar Juesan v. Hon. Commissioners Oscar N. Abella, Musib N. Buat, Leon Gonzaga, Jr.,
Algon Engineering Construction Corp., Alex Gonzales and Editha Yap. 323 SCRA 50).
SO ORDERED.17
Lepanto moved to reconsider the dismissal, but the CA denied its motion for
reconsideration through the second assailed resolution.18
Issues
Hence, this appeal by Lepanto based on the following errors, namely:
I
THE COURT OF APPEALS ERRED IN SUMMARILY DISMISSING THE PETITION FOR
CERTIORARI ON THE GROUND THAT NO PRIOR MOTION FOR RECONSIDERATION WAS
3
FILED. THE DECISION OF THE SECRETARY BEING FINAL AND EXECUTORY, A MOTION FOR
RECONSIDERATION WAS NOT AN AVAILABLE REMEDY FOR PETITIONER.
II
ON THE MERITS, THE SECRETARY OF LABOR ACTED WITHOUT OR IN EXCESS OF
JURISDICTION, [O]R WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS
OF JURISDICTION IN ISSUNG THE DECISION DATED SEPTEMBER 17, 2002, WHEN SHE
DELIBERATELY IGNORED THE FACTS AND RULED IN FAVOR OF THE RESPONDENT UNION,
DESPITE HER OWN FINDING THAT THERE HAD BEEN A PREMATURE CANVASS OF VOTES. 19
Lepanto argues that a motion for reconsideration was not an available remedy due to the
decision of the DOLE Secretary being already classified as final and executory under
Section 15, Rule XI, Book V of Omnibus Rules Implementing the Labor Code, as amended
by Department Order No. 9, series of 1997;20 that the Union’s petition for consent election
was really a certification election; that the Union failed to give a definite description of the
bargaining unit sought to be represented; and that the capatazes should be considered as
rank-and-file employees.
The issues to be resolved are, firstly, whether a motion for reconsideration was a pre-
requisite in the filing of its petition for certiorari; and, secondly, whether
the capatazes could form their own union independently of the rank-and-file employees.
Ruling
The petition for review has no merit.
I.
The filing of the motion for reconsideration
is a pre-requisite to the filing of a petition for
certiorari to assail the decision of the DOLE Secretary
We hold to be untenable and not well taken Lepanto’s submissions that: (1) a motion for
reconsideration was not an available remedy from the decision of the DOLE Secretary
because of Section 15, Rule XI, Book V of the Omnibus Rules Implementing the Labor Code,
as amended; and (2) the ruling in National Federation of Labor v. Laguesma21 (recognizing
the remedy of certiorari against the decision of the DOLE Secretary to be filed initially in
the CA) actually affirms its position that an immediate recourse to the CA on certiorari is
proper even without the prior filing of a motion for reconsideration.
To start with, the requirement of the timely filing of a motion for reconsideration as a
precondition to the filing of a petition for certiorari accords with the principle of
exhausting administrative remedies as a means to afford every opportunity to the
respondent agency to resolve the matter and correct itself if need be.22
And, secondly, the ruling in National Federation of Labor v. Laguesma reiterates St.
Martin’s Funeral Home v. National Labor Relations Commission,23 where the Court has
pronounced that the special civil action of certiorari is the appropriate remedy from the
decision of the National Labor Relations Commission (NLRC) in view of the lack of any
appellate remedy provided by the Labor Code to a party aggrieved by the decision of the
NLRC. Accordingly, any decision, resolution or ruling of the DOLE Secretary from which
the Labor Code affords no remedy to the aggrieved party may be reviewed through a
petition for certiorari initiated only in the CA in deference to the principle of the hierarchy
of courts.
Yet, it is also significant to note that National Federation of Labor v. Laguesma also
reaffirmed the dictum issued in St. Martin’s Funeral Homes v. National Labor Relations
Commission to the effect that “the remedy of the aggrieved party is to timely file a motion
for reconsideration as a precondition for any further or subsequent remedy, and then
seasonably avail of the special civil action of certiorari under Rule 65 x x x.”24
Indeed, the Court has consistently stressed the importance of the seasonable filing of a
motion for reconsideration prior to filing the certiorari petition. In SMC Quarry 2 Workers
Union-February Six Movement (FSM) Local Chapter No. 1564 v. Titan Megabags Industrial
Corporation25 and Manila Pearl Corporation v. Manila Pearl Independent Workers
Union,26 the Court has even warned that a failure to file the motion for reconsideration
would be fatal to the cause of the petitioner.27 Due to its extraordinary nature as a
remedy, certiorari is to be availed of only when there is no appeal, or any plain, speedy or
adequate remedy in the ordinary course of law.28 There is no question that a motion for
reconsideration timely filed by Lepanto was an adequate remedy in the ordinary course of
law in view of the possibility of the Secretary of Justice reconsidering her disposition of the
matter, thereby according the relief Lepanto was seeking.
Under the circumstances, Lepanto’s failure to timely file a motion for reconsideration prior
to filing its petition for certiorari in the CA rendered the September 17, 2002 resolution of
the DOLE Secretary beyond challenge.
II.
Capatazes are not rank-and-file employees;
hence, they could form their own union
Anent the second issue, we note that Med-Arbiter Lontoc found in her Decision issued on
May 2, 2000 that the capatazes were performing functions totally different from those
performed by the rank-and-file employees, and that the capatazes were “supervising and
instructing the miners, mackers and other rank-and-file workers under them, assess[ing]
and evaluat[ing] their performance, mak[ing] regular reports and recommend[ing] new
systems and procedure of work, as well as guidelines for the discipline of
employees.”29 Hence, Med-Arbiter Lontoc concluded, the capatazes “differ[ed] from the
rank-and-file and [could] by themselves constitute a separate bargaining unit.”30
Agreeing with Med-Arbiter Lontoc’s findings, then DOLE Undersecretary Baldoz, acting by
authority of the DOLE Secretary, observed in the resolution dated July 12, 2000, thus:31
4
The bargaining unit sought to be represented by the appellee are the capataz employees
of the appellant. There is no other labor organization of capatazes within the employer SO ORDERED.
unit except herein appellant. Thus, appellant is an unorganized establishment in so far as
the bargaining unit of capatazes is concerned. In accordance with the last paragraph of
Section 11, Rule XI, Department Order No. 9 which provides that “in a petition filed by a
legitimate labor organization involving an unorganized establishment, the Med-Arbiter 2.
shall, pursuant to Article 257 of the Code, automatically order the conduct of certification
election after determining that the petition has complied with all requirements under G.R. No. 172132, July 23, 2014
Section 1, 2 and 4 of the same rules and that none of the grounds for dismissal thereof
exists”, the order for the conduct of a certification election is proper.32 THE HERITAGE HOTEL MANILA, ACTING THROUGH ITS OWNER, GRAND PLAZA HOTEL
CORPORATION, Petitioner, v. SECRETARY OF LABOR AND EMPLOYMENT; MED-ARBITER
TOMAS F. FALCONITIN; AND NATIONAL UNION OF WORKERS IN THE HOTEL,
We cannot undo the affirmance by the DOLE Secretary of the correct findings of her RESTAURANT AND ALLIED INDUSTRIES–HERITAGE HOTEL MANILA SUPERVISORS
subordinates in the DOLE, an office that was undeniably possessed of the requisite CHAPTER (NUWHRAIN-HHMSC), Respondents.
expertise on the matter in issue. In dealing with the matter, her subordinates in the DOLE
fairly and objectively resolved whether the Union could lawfully seek to be the exclusive DECISION
representative of the bargaining unit of capatazes in the company. Their factual findings,
BERSAMIN, J.:
being supported by substantial evidence, are hereby accorded great respect and finality.
Such findings cannot be made the subject of our judicial review by petition under Rule 45
Although case law has repeatedly held that the employer was but a bystander in respect of
of the Rules of Court, because:
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
x x x [T]he office of a petition for review on certiorari under Rule 45 of the Rules of Court
registration brought against the labor organization applying for the certification election
requires that it shall raise only questions of law. The factual findings by quasi-judicial
should not prevent the conduct of the certification election, this review has to look again
agencies, such as the Department of Labor and Employment, when supported by
at the seemingly never-ending quest of the petitioner employer to stop the conduct of the
substantial evidence, are entitled to great respect in view of their expertise in their
certification election on the ground of the pendency of proceedings to cancel the labor
respective field. Judicial review of labor cases does not go far as to evaluate the sufficiency
organization’s registration it had initiated on the ground that the membership of the labor
of evidence on which the labor official’s findings rest. It is not our function to assess and
organization was a mixture of managerial and supervisory employees with the rank-and-
evaluate all over again the evidence, testimonial and documentary, adduced by the parties
file employees.
to an appeal, particularly where the findings of both the trial court (here, the DOLE
Secretary) and the appellate court on the matter coincide, as in this case at bar. The Rule
Under review at the instance of the employer is the decision promulgated on December
limits that function of the Court to review or revision of errors of law and not to a second
13, 2005,1whereby the Court of Appeals (CA) dismissed its petition for certiorari to assail
analysis of the evidence. Here, petitioners would have us re-calibrate all over again the
the resolutions of respondent Secretary of Labor and Employment sanctioning the
factual basis and the probative value of the pieces of evidence submitted by the Company
conduct of the certification election initiated by respondent labor organization.
to the DOLE, contrary to the provisions of Rule 45. Thus, absent any showing of whimsical
or capricious exercise of judgment, and unless lack of any basis for the conclusions made
Antecedents
by the appellate court may be amply demonstrated, we may not disturb such factual
findings.33
On October 11, 1995, respondent National Union of Workers in Hotel Restaurant and
Allied Industries-Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC) filed a
In any event, we affirm that capatazes or foremen are not rank-and-file employees
petition for certification election,3 seeking to represent all the supervisory employees of
because they are an extension of the management, and as such they may influence the
Heritage Hotel Manila. The petitioner filed its opposition, but the opposition was deemed
rank-and-file workers under them to engage in slowdowns or similar activities detrimental
denied on February 14, 1996 when Med-Arbiter Napoleon V. Fernando issued his order for
to the policies, interests or business objectives of the employers.34
the conduct of the certification election.
WHEREFORE, the Court DENIES the petition for review for lack of merit, and AFFIRMS the
The petitioner appealed the order of Med-Arbiter Fernando, but the appeal was also
resolutions the Court of Appeals promulgated on December 18, 2002 and January 31,
denied. A pre-election conference was then scheduled. On February 20, 1998, however,
2003.
the pre-election conference was suspended until further notice because of the repeated
non-appearance of NUWHRAIN-HHMSC.
Petitioner to pay the costs of suit.
5
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, 2000,6raising 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.
The following day, however, the Department of Labor and Employment (DOLE) issued a
notice scheduling the certification elections on June 23, 2000.
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.
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:
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 Union16(Toyota Motor) and Dunlop Slazenger
(Phils.) v. Secretary of Labor and Employment17(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.
Upon denial of its motion for reconsideration, the petitioner elevated the matter to the CA
by petition for certiorari.
Ruling of the CA
6

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.
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
ORDER25chanrobleslaw
The petitioner maintains that the ruling in Tagaytay Highlands International Golf Club Inc
v. Tagaytay Highlands Employees Union-PTGWO26 (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-
7
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.30Thus, 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.
xxxx
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:
xxxx
[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
8
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.
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.
xxxx
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.40cralawlawlibrary
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—
9
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 Motor and 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.” 44cralawlawlibrary
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
3.
LEGEND INTERNATIONAL RESORTS LIMITED, G.R. No. 169754
Petitioner,- versus -
KILUSANG MANGGAGAWA NG LEGENDA (KML-
INDEPENDENT),Respondent. February 23, 2011
x-------------------------------------------------------------------
x
D E C I S I O N DEL CASTILLO, J.:
This Petition for Review on Certiorari assails the September 18, 2003 Decision of the Court
of Appeals in CA-G.R. SP No. 72848 which found no grave abuse of discretion on the part
of the Office of the Secretary of the Department of Labor and Employment (DOLE) which
ruled in favor of Kilusang Manggagawa ng Legenda (KML). Also assailed is the September
14, 2005 Resolution denying petitioners motion for reconsideration.
Factual Antecedents
On June 6, 2001, KML filed with the Med-Arbitration Unit of the DOLE, San Fernando,
Pampanga, a Petition for Certification Election[1] docketed as Case No. RO300-0106-RU-
001.KML alleged that it is a legitimate labor organization of the rank and file employees of
Legend International Resorts Limited (LEGEND). KML claimed that it was issued its
Certificate of Registration No. RO300-0105-UR-002 by the DOLE on May 18, 2001.
LEGEND moved to dismiss[2] the petition alleging that KML is not a legitimate labor
organization because its membership is a mixture of rank and file and supervisory
employees in violation of Article 245 of the Labor Code. LEGEND also claimed that KML
committed acts of fraud and misrepresentation when it made it appear that certain
employees attended its general membership meeting on April 5, 2001 when in reality
10
some of them were either at work; have already resigned as of March 2001; or were
abroad.
In its Comment,[3] KML argued that even if 41 of its members are indeed supervisory
employees and therefore excluded from its membership, the certification election could
still proceed because the required number of the total rank and file employees necessary
for certification purposes is still sustained. KML also claimed that its legitimacy as a labor
union could not be collaterally attacked in the certification election proceedings but only
through a separate and independent action for cancellation of union registration. Finally,
as to the alleged acts of misrepresentation, KML asserted that LEGEND failed to
substantiate its claim.
Ruling of the Med-Arbiter
On September 20, 2001, the Med-Arbiter[4] rendered judgment[5] dismissing for lack of
merit the petition for certification election. The Med-Arbiter found that indeed there were
several supervisory employees in KMLs membership. Since Article 245 of the Labor Code
expressly prohibits supervisory employees from joining the union of rank and file
employees, the Med-Arbiter concluded that KML is not a legitimate labor
organization. KML was also found to have fraudulently procured its registration certificate
by misrepresenting that 70 employees were among those who attended its organizational
meeting on April 5, 2001 when in fact they were either at work or elsewhere.
KML thus appealed to the Office of the Secretary of the DOLE.
Ruling of the Office of the Secretary of DOLE
On May 22, 2002, the Office of the Secretary of DOLE rendered its Decision[6] granting
KMLs appeal thereby reversing and setting aside the Med-Arbiters Decision. The Office of
the Secretary of DOLE held that KMLs legitimacy as a union could not be collaterally
attacked, citing Section 5,[7] Rule V of Department Order No. 9, series of 1997.
The Office of the Secretary of DOLE also opined that Article 245 of the Labor Code merely
provides for the prohibition on managerial employees to form or join a union and the
ineligibility of supervisors to join the union of the rank and file employees and vice versa. It
declared that any violation of the provision of Article 245 does not ipso facto render the
existence of the labor organization illegal. Moreover, it held that Section 11, paragraph II
of Rule XI which provides for the grounds for dismissal of a petition for certification
election does not include mixed membership in one union.
The dispositive portion of the Office of the Secretary of DOLEs Decision reads:
WHEREFORE, the appeal is hereby GRANTED and the order of the Med-Arbiter dated 20
September 2001 is REVERSED and SET ASIDE.
Accordingly, let the entire record of the case be remanded to the regional office of origin
for the immediate conduct of the certification election, subject to the usual pre-election
conference, among the rank and file employees of LEGEND INTERNATIONAL RESORTS
LIMITED with the following choices:
1. KILUSANG MANGGAGAWA NG LEGENDA (KML-INDEPENDENT); and
2. NO UNION.
Pursuant to Rule XI, Section II.1 of D.O. No. 9, the employer is hereby directed to submit to
the office of origin, within ten days from receipt of the decision, the certified list of
employees in the bargaining unit for the last three (3) months prior to the issuance of this
decision.
SO DECIDED.[8]
LEGEND filed its Motion for Reconsideration[9] reiterating its earlier arguments. It also
alleged that on August 24, 2001, it filed a Petition[10] for Cancellation of Union Registration
of KML docketed as Case No. RO300-0108-CP-001 which was granted[11] by the DOLE
Regional Office No. III of San Fernando, Pampanga in its Decision[12] dated November 7,
2001.
In a Resolution[13] dated August 20, 2002, the Office of the Secretary of DOLE denied
LEGENDs motion for reconsideration. It opined that Section 11, paragraph II(a), Rule XI of
Department Order No. 9 requires a final order of cancellation before a petition for
certification election may be dismissed on the ground of lack of legal personality. Besides,
it noted that the November 7, 2001 Decision of DOLE Regional Office No. III of San
Fernando, Pampanga in Case No. RO300-0108-CP-001 was reversed by the Bureau of Labor
Relations in a Decision dated March 26, 2002.
Ruling of the Court of Appeals
Undeterred, LEGEND filed a Petition for Certiorari[14] with the Court of Appeals docketed as
CA-G.R. SP No. 72848. LEGEND alleged that the Office of the Secretary of DOLE gravely
abused its discretion in reversing and setting aside the Decision of the Med-Arbiter despite
substantial and overwhelming evidence against KML.
For its part, KML alleged that the Decision dated March 26, 2002 of the Bureau of Labor
Relations in Case No. RO300-0108-CP-001 denying LEGENDs petition for cancellation and
upholding KMLs legitimacy as a labor organization has already become final and executory,
entry of judgment having been made on August 21, 2002.[15]
The Office of the Secretary of DOLE also filed its Comment[16] asserting that KMLs
legitimacy cannot be attacked collaterally. Finally, the Office of the Secretary of DOLE
stressed that LEGEND has no legal personality to participate in the certification election
proceedings.
On September 18, 2003, the Court of Appeals rendered its Decision[17] finding no grave
abuse of discretion on the part of the Office of the Secretary of DOLE. The appellate court
held that the issue on the legitimacy of KML as a labor organization has already been
settled with finality in Case No. RO300-0108-CP-001. The March 26, 2002 Decision of the
11
Bureau of Labor Relations upholding the legitimacy of KML as a labor organization had
long become final and executory for failure of LEGEND to appeal the same. Thus, having
already been settled that KML is a legitimate labor organization, the latter could properly
file a petition for certification election. There was nothing left for the Office of the
Secretary of DOLE to do but to order the holding of such certification election.
The dispositive portion of the Decision reads:
WHEREFORE, in view of the foregoing, and finding that no grave abuse of discretion
amounting to lack or excess of jurisdiction has been committed by the Department of
Labor and Employment, the assailed May 22, 2002 Decision and August 20, 2002
Resolution in Case No. RO300-106-RU-001 are UPHELD and AFFIRMED. The instant petition
is DENIED due course and, accordingly, DISMISSED for lack of merit.[18]
LEGEND filed a Motion for Reconsideration[19] alleging, among others, that it has appealed
to the Court of Appeals the March 26, 2002 Decision in Case No. RO300-0108-CP-001
denying its petition for cancellation and that it is still pending resolution.
On September 14, 2005, the appellate court denied LEGENDs motion for reconsideration.
Hence, this Petition for Review on Certiorari raising the lone assignment of error, viz:
WHETHER X X X THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN
THE APPLICATION OF LAW IN DENYING THE PETITIONERS PETITION FOR CERTIORARI.[20]
Petitioners Arguments
LEGEND submits that the Court of Appeals grievously erred in ruling that the March 26,
2002 Decision denying its Petition for Cancellation of KMLs registration has already
become final and executory. It asserts that it has seasonably filed a Petition
for Certiorari[21] before the CA docketed as CA-G.R. SP No. 72659 assailing said Decision. In
fact, on June 30, 2005, the Court of Appeals granted the petition, reversed the March 26,
2002 Decision of the Bureau of Labor Relations and reinstated the November 7, 2001
Decision of the DOLE Regional Office III ordering the cancellation of KMLs registration.
Finally, LEGEND posits that the cancellation of KMLs certificate of registration should
retroact to the time of its issuance.[22] It thus claims that the petition for certification
election and all of KMLs activities should be nullified because it has no legal personality to
file the same, much less demand collective bargaining with LEGEND.[23]
LEGEND thus prays that the September 20, 2001 Decision of the Med-Arbiter dismissing
KMLs petition for certification election be reinstated.[24]
Respondents Arguments
In its Comment filed before this Court dated March 21, 2006, KML insists that the Decision
of the Bureau of Labor Relations upholding its legitimacy as a labor organization has
already attained finality[25] hence there was no more hindrance to the holding of a
certification election.Moreover, it claims that the instant petition has become moot
because the certification election sought to be prevented had already been conducted.
Our Ruling
The petition is partly meritorious.
LEGEND has timely appealed the March 26, 2002 Decision of the Bureau of Labor
Relations to the Court of Appeals.
We cannot understand why the Court of Appeals totally disregarded LEGENDs allegation in
its Motion for Reconsideration that the March 26, 2002 Decision of the Bureau of Labor
Relations has not yet attained finality considering that it has timely appealed the same to
the Court of Appeals and which at that time is still pending resolution. The Court of
Appeals never bothered to look into this allegation and instead dismissed outright
LEGENDs motion for reconsideration. By doing so, the Court of Appeals in effect
maintained its earlier ruling that the March 26, 2002 Decision of the Bureau of Labor
Relations upholding the legitimacy of KML as a labor organization has long become final
and executory for failure of LEGEND to appeal the same.
This is inaccurate. Records show that (in the cancellation of registration case) LEGEND has
timely filed on September 6, 2002 a petition for certiorari[26] before the Court of Appeals
which was docketed as CA-G.R. SP No. 72659 assailing the March 26, 2002 Decision of the
Bureau of Labor Relations. In fact, KML received a copy of said petition on September 10,
2002[27] and has filed its Comment thereto on December 2, 2002.[28] Thus, we find it quite
interesting for KML to claim in its Comment (in the certification petition case) before this
Court dated March 21, 2006[29] that the Bureau of Labor Relations Decision in the petition
for cancellation case has already attained finality. Even in its Memorandum[30] dated
March 13, 2007 filed before us, KML is still insisting that the Bureau of Labor Relations
Decision has become final and executory.
Our perusal of the records shows that on June 30, 2005, the Court of Appeals rendered its
Decision[31] in CA-G.R. SP No. 72659 reversing the March 26, 2002 Decision of the Bureau
of Labor Relations and reinstating the November 7, 2001 Decision of the Med-Arbiter
which canceled the certificate of registration of KML.[32] On September 30, 2005, KMLs
motion for reconsideration was denied for lack of merit.[33] On November 25, 2005, KML
filed its Petition for Review on Certiorari[34] before this Court which was docketed as G.R.
No. 169972.However, the same was denied in a Resolution[35] dated February 13, 2006 for
having been filed out of time. KML moved for reconsideration but it was denied with
finality in a Resolution[36] dated June 7, 2006. Thereafter, the said Decision canceling the
certificate of registration of KML as a labor organization became final and executory and
entry of judgment was made on July 18, 2006.[37]
The cancellation of KMLs certificate of registration should not retroact to the time of its
issuance.
12

Notwithstanding the finality of the Decision canceling the certificate of registration of KML,
we cannot subscribe to LEGENDs proposition that the cancellation of KMLs certificate of
registration should retroact to the time of its issuance. LEGEND claims that KMLs petition
for certification election filed during the pendency of the petition for cancellation and its
demand to enter into collective bargaining agreement with LEGEND should be dismissed
due to KMLs lack of legal personality.
This issue is not new or novel. In Pepsi-Cola Products Philippines, Inc. v. Secretary of
Labor,[38] we already ruled that:
Anent the issue of whether or not the Petition to cancel/revoke registration is a prejudicial
question to the petition for certification election, the following ruling in the case
of Association of the Court of Appeals Employees (ACAE) v. Hon. Pura Ferrer-Calleja, x x x is
in point, to wit:
x x x It is well-settled rule that a certification proceedings is not a litigation in the sense
that the term is ordinarily understood, but an investigation of a non-adversarial and fact
finding character. (Associated Labor Unions (ALU) v. Ferrer-Calleja, 179 SCRA 127
[1989]; Philippine Telegraph and Telephone Corporation v. NLRC, 183 SCRA 451
[1990]. Thus, the technical rules of evidence do not apply if the decision to grant it
proceeds from an examination of the sufficiency of the petition as well as a careful look
into the arguments contained in the position papers and other documents.
At any rate, the Court applies the established rule correctly followed by the public
respondent that an order to hold a certification election is properdespite the pendency
of the petition for cancellation of the registration certificate of the respondent
union. The rationale for this is that at the time the respondent union filed its petition, it
still had the legal personality to perform such act absent an order directing the
cancellation.[39] (Emphasis supplied.)
In Capitol Medical Center, Inc. v. Hon. Trajano,[40] we also held that the pendency of a
petition for cancellation of union registration does not preclude collective
bargaining.[41] Citing the Secretary of Labor, we held viz:
That there is a pending cancellation proceedings against the respondent Union is not a
bar to set in motion the mechanics of collective bargaining. If a certification election may
still be ordered despite the pendency of a petition to cancel the unions registration
certificate x x x more so should the collective bargaining process continue despite its
pendency. [42] (Emphasis supplied.)
In Association of Court of Appeals Employees v. Ferrer-Calleja,[43] this Court was tasked to
resolve the issue of whether the certification proceedings should be suspended pending
[the petitioners] petition for the cancellation of union registration of the UCECA[44].[45] The
Court resolved the issue in the negative holding that an order to hold a certification
election is proper despite the pendency of the petition for cancellation of the
registration certificate of the respondent union. The rationale for this is that at the time
the respondent union filed its petition, it still had the legal personality to perform such act
absent an order directing a cancellation.[46] We reiterated this view in Samahan ng
Manggagawa sa Pacific Plastic v. Hon. Laguesma[47] where we declared that a certification
election can be conducted despite pendency of a petition to cancel the union
registration certificate. For the fact is that at the time the respondent union filed its
petition for certification, it still had the legal personality to perform such act absent an
order directing its cancellation.[48]
Based on the foregoing jurisprudence, it is clear that a certification election may be
conducted during the pendency of the cancellation proceedings. This is because at the
time the petition for certification was filed, the petitioning union is presumed to possess
the legal personality to file the same. There is therefore no basis for LEGENDs assertion
that the cancellation of KMLs certificate of registration should retroact to the time of its
issuance or that it effectively nullified all of KMLs activities, including its filing of the
petition for certification election and its demand to collectively bargain.
The legitimacy of the legal personality of KML cannot be collaterally attacked in a
petition for certification election.
We agree with the ruling of the Office of the Secretary of DOLE that the legitimacy of the
legal personality of KML cannot be collaterally attacked in a petition for certification
election proceeding. This is in consonance with our ruling in Laguna Autoparts
Manufacturing Corporation v. Office of the Secretary, Department of Labor and
Employment[49] that such legal personality may not be subject to a collateral attack but
only through a separate action instituted particularly for the purpose of assailing it.[50] We
further held therein that:
This is categorically prescribed by Section 5, Rule V of the Implementing Rules of Book V,
which states as follows:
SEC. 5.[51] 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.
Hence, to raise the issue of the respondent unions legal personality is not proper in this
case. The pronouncement of the Labor Relations Division Chief, that the respondent union
acquired a legal personality x x x cannot be challenged in a petition for certification
election.
The discussion of the Secretary of Labor and Employment on this point is also enlightening,
thus:
13
. . . Section 5, Rule V of D.O. 9 is instructive on the matter. It provides that the legal
personality of a union cannot be the subject of collateral attack in a petition for
certification election, but may be questioned only in an independent petition for
cancellation of union registration. This has been the rule since NUBE v. Minister of Labor,
110 SCRA 274 (1981). What applies in this case is the principle that once a union acquires a
legitimate status as a labor organization, it continues as such until its certificate of
registration is cancelled or revoked in an independent action for cancellation.
Equally important is Section 11, Paragraph II, Rule IX of D.O. 9, which provides for the
dismissal of a petition for certification election based on the lack of legal personality of a
labor organization only in the following instances: (1) appellant is not listed by the
Regional Office or the BLR in its registry of legitimate labor organizations; or (2) appellants
legal personality has been revoked or cancelled with finality. Since appellant is listed in the
registry of legitimate labor organizations, and its legitimacy has not been revoked or
cancelled with finality, the granting of its petition for certification election is proper. [52]
[T]he legal personality of a legitimate labor organization x x x cannot be subject to a
collateral attack. The law is very clear on this matter. x x x The Implementing Rules
stipulate that a labor organization shall be deemed registered and vested with legal
personality on the date of issuance of its certificate of registration. Once a certificate of
registration is issued to a union, its legal personality cannot be subject to a collateral
attack. In may be questioned only in an independent petition for cancellation in
accordance with Section 5 of Rule V, Book V of the Implementing Rules.[53]
WHEREFORE, in view of the foregoing, the petition is PARTLY GRANTED. The Decision of
the Court of Appeals dated September 18, 2003 in CA-G.R. SP No. 72848 insofar as it
affirms the May 22, 2002 Decision and August 20, 2002 Resolution of the Office of the
Secretary of Department of Labor and Employment is AFFIRMED. The Decision of the
Court of Appeals insofar as it declares that the March 26, 2002 Decision of the Bureau of
Labor Relations in Case No. RO300-0108-CP-001 upholding that the legitimacy of KML as a
labor organization has long become final and executory for failure of LEGEND to appeal the
same, is REVERSED and SET ASIDE.
SO ORDERED.
4.
G.R. No.169745 July 18, 2014
REPUBLIC OF THE PHILIPPINES, represented by the HONORABLE SECRETARY OF LABOR
AND EMPLOYMENT (DOLE), Petitioner, vs. NAMBOKU PEAK, INC., Respondent.
x-----------------------x
G.R. No.170091
PHIL-JAPAN WORKERS UNIONSOLIDARITY OF UNIONS IN THE PIDLIPPINES FOR
EMPOWERMENT AND REFORMS (P JWU-SUPER), MEDARBITER CLARISSA G.
BELTRANLERIOS and SECRETARY PATRICIA A. STO. TOMAS OF THE DEPARTMENT OF
LABOR AND EMPLOYMENT, Petitioners, vs.PHIL-JAPAN INDUSTRIAL MANUFACTURING
CORPORATION, Respondent.
DECISION
DEL CASTILLO, J.:
The court or tribunal exercising quasi-judicial functions is bereft of any right or personality
to question the decision of an appellate court reversing its decision.1
These consolidated Petitions for Review on Certiorari2 assail the Decisions of the Court of
Appeals (CA)issued in two separate petitions, but involving the same issue of whether
Section 17, Rule VIII of Department Order No. 40-03 is unconstitutional. The first is the
Decision3 dated March 18, 2005 in CA-G.R. SP No. 80603, which granted the Petition for
Certiorari4 filed by herein respondent Namboku Peak, Inc. (Namboku) challenging the
October 22, 2003 letter-resolution5 of Secretary of Labor and Employment Patricia A. Sto.
Tomas. Said letter-resolution affirmedthe Med-Arbiter’s Order6 dated June 17, 2003
denying Namboku’s motion to defer the conduct of certification election pending
resolution of its appeal.
The second is the Decision7 dated January 19, 2005 in CA-G.R. SP. No. 80106, which
granted the Petition for Certiorari8 filed by hereinrespondent PhilJapan Industrial
Manufacturing Corporation (Phil-Japan) seeking to declare Section 17, Rule VIII of
Department Order No. 40-03 unconstitutional for unduly depriving it of its right to appeal
the August 25, 2003 Decision9 of the MedArbiter. Said Decision of the Med-Arbiter, in
turn, granted the Petition 10 of PhilJapan Workers Union-Solidarity of Unionsin the
Philippines for Empowerment and Reforms (PJWU-SUPER) seeking to determine the
exclusive bargaining representative in Phil-Japan and ordered the conduct of certification
election.
Factual Antecedents
The facts, insofar as G.R. No. 169745 is concerned and as culled from the records, are as
follows:
Namboku is a domestic corporation engaged in the business of providing manpower
services to variousclients, mainly airline companies. On April 28, 2003, the Philippine
Aircraft Loaders and Cargo Employees AssociationSolidarity of Unions in the Philippines for
Empowerment and Reforms (PALCEA-SUPER) filed a Petition11 for direct certification
election before the Med-Arbiter seeking to represent the rank-and-file employees of
Namboku assigned at the Cargo and Loading Station of the Philippine Airlines (PAL) in
Ninoy Aquino International Airport. In support of its Petition, PALCEA-SUPER alleged that it
is a local chapter affiliate of Solidarity of Unions in the Philippines for Empowerment and
Reforms; that its members are composed of regular rank-and-file employees of Namboku
assigned at said Cargo and Loading Station of PAL; that out of the 155 regular rank-and-file
14
employees of Namboku, 122 or 78% are its members; and, that Namboku is an
unorganized establishment.
Namboku opposed the Petition12 on the ground of inappropriateness. It claimed that the
members of the PALCEA-SUPER are project employees. Hence, they cannot represent its
regular rank-and-file employees. It emphasized that their individual ProjectEmployee
Contract clearly provides that their employment is for a fixed period of time and
dependent upon its Services Agreement13 with PAL. However, PALCEA-SUPER
misrepresented the status of its members by claimingthat they are regular employees of
Namboku.
On June 17, 2003, the Med-Arbiter issued an Order14 holding that the members of
PALCEA-SUPER are regular employees of Namboku. She explained that while Namboku
informed them at the time of their engagement that their employment is for a fixed period
of time, it did not, however, apprise them that the same is for a specific activity, nor was
the completion or termination made known to them at the time oftheir engagement. Also,
asopposed to the nature of its business, the tasks for which Namboku engaged their
services do not appear to be separate and independent activities with pre-determined
duration or completion. The Med-Arbiter thus granted the Petition and ordered the
conduct of certification election. The dispositive portion of the Order reads:
WHEREFORE, premises considered, certification election is hereby ordered among the
regular rank and file employees of NAMBOK[U] PEAK, INC., subject to pre-election
conference, with the following choices:
1. Philippine Aircraft Loaders and Cargo Employees Association – Solidarity of Unions in
the Philippines for Empowerment and Reforms (PALCEA-SUPER); and
2. No Union.
Accordingly, Employer and Petitioner are hereby directed to submit within ten (10) days
from receipt hereof, the certified list of employees in the bargaining unit, or where
necessary, the payrolls covering the members of the bargaining unit for the last three
months prior to this issuance.
SO ORDERED.15
Namboku appealed16 the Med-Arbiter’s Order to the Secretary of the Labor, maintaining
that the members of PALCEA-SUPER are mere project employees. It insisted that the
combination of project and regular employees would render a bargaining unit
inappropriate for lack of substantial-mutual interest.
In the meantime, on July 29, 2003, Namboku received a summons setting the pre-election
conference on July 31, 2003 and stating that the Order granting the conduct of a
certification election in an unorganized establishment is not appealable.17
Whereupon, Namboku filed a Manifestation and Motion,18 as well as a Supplemental
Motion and Manifestation,19 seeking to suspend the conduct of certification election
pending resolution of its appeal. It contended that Section 17,20 Rule VIII of Department
Order No. 40-03 prohibiting the filing of an appeal from an order granting the conduct of a
certification election in an unorganized establishment is unconstitutional because it runs
counter to Article 25921 of the Labor Code.
In a letter-resolution 22dated October 22, 2003, however, the Secretary of Labor denied
the appeal and affirmed the Med-Arbiter’s June 17, 2003 Order. In rejecting Namboku’s
contention that Section 17, Rule VIII of Department Order No. 40-03 is unconstitutional,
the Secretary of Labor ratiocinated that unless said Department Order is declared by a
competent court as unconstitutional, her office would treat the same as valid.
Undeterred, Namboku filed before the CA a Petition for Certiorari,23 which was docketed
as CA-G.R. SP No. 80630. Namboku imputed grave abuse of discretion on the part of the
Secretary ofLabor in (i) not resolving the issue of appropriateness and (ii) rejecting its
appeal based on an invalid provision of Department Order 40-03.
With regard to G.R. No. 170091, an examination ofthe records reveals the following facts:
Phil-Japan is a domestic corporation engaged in manufacturing mufflers, chassis and other
car accessories for local and international markets. On June 6, 2003, PJWU-SUPER filed
before the Med-Arbiter a Petition24 seeking to determine the sole and exclusive
bargaining representative of rank-and-file employees in Phil-Japan. PJWU-SUPER alleged
that it is a legitimate labor organization; that out of the 100 rank-and-file employeesof
Phil-Japan, 69 or 69% are members of PJWU-SUPER; that Phil-Japan is an unorganized
establishment; and, that there has been no certification election conducted during the last
12 months prior to the filing of its Petition.
Phil-Japan opposed the Petition,25 claiming that the members of PJWUSUPER are not its
employees. It alleged that the listed members of PJWUSUPER have either resigned,
finished their contracts, orare employees of its job contractors CMC Management and
PEPC Management Services. Itthus prayed for the dismissal of the Petition or, inthe
alternative, suspension of the proceedings pending determination of the existence of
employer-employee relationship.
On August 25, 2003, the Med-Arbiter rendered a Decision26 ordering the conduct of
certification election. It held, among others, that the documents submitted are not
sufficient to resolve the issue of the existence of employeremployee
relationship.Considering, however, that Section 15,Rule VIII of the Rules Implementing
Book V ofthe Labor Code prohibits the suspension of proceedings based on the pendency
of such issue, she allowed the employees to vote. Their votes, however, shall be
segregated, and the determination of whether the number of such segregated ballots is
material to the outcome of the election shall be made after the conduct of the election.
The dispositive portion of the Decision reads:
WHEREFORE, premises considered, this petition for certification election is hereby
GRANTED. Certification election is hereby ordered conducted among the regular rank-and-
file workers of Phil-Japan Ind. Mfg. Corporation with the following choices:
15
1. Phil-Japan Workers Union-Solidarityof Unions in the Philippines for Empowerment and
Reforms (PJWU-SUPER); and
2. No Union.
Accordingly, Employer and Petitioner are hereby directed to submit within ten (10) days
from receipt hereof, the certified list of employees in the bargaining unit, or where
necessary, the payrolls covering the members of the bargaining unit for the last three
months prior to this issuance.
SO ORDERED.27
Aggrieved, Phil-Japan appealed28 the Decision of the Med-Arbiter to the Office of the
Secretary of Labor asserting that the Med-Arbiter gravely abused her discretion in not
resolving the issue ofwhether employer-employee relationship existed between the
parties.
In a hearing held on October 7, 2003, Hearing Officer Lourdes T. Ching informed Phil-Japan
that its appeal will not be acted upon pursuant to Section 17, Rule VIII of Department
Order No. 40-03and that the certification election will proceed accordingly.
Undaunted, Phil-Japan filed before the CA a Petition for Certiorari,29 which was docketed
asCA-G.R. SP No. 80106. Phil-Japan ascribedgrave abuse of discretion on the part of the
Med-Arbiter in refusing torule on the existence of employer-employee relationship despite
the presence of sufficient evidence on the matter. It also claimed thatthe Secretary of
Labor gravely abused her discretion in refusing to act on its appeal despite the existence of
such right. As to the Secretary of Labor’s reliance on Section 17, Rule VIII of Department
Order No. 40-03, PhilJapan asserted that the samecannot overturn the clear provision of
Article 259 of the Labor Code.
Rulings of the Court of Appeals
On March 18, 2005, the CA issued its Decision30 in CA-G.R. SP No. 80603 (now subject of
G.R. No. 169745)granting Namboku’s Petition and reversing the October 22, 2003 letter-
resolution of the Secretary of Labor. It sustained Namboku’s position that the members of
PALCEA-SUPER are project employees and, hence, they are not similarly situated with the
company’s regular rank-and-file employees. The CA also nullified Section 17, Rule VIII of
Department Order No. 40-03 for being in conflict with Article 259 of the Labor Code.
The Secretary of Labor filed a Motion for Reconsideration.31 This prompted Namboku to
file a Motion to Expunge32 on the ground that the Secretary of Labor is a mere
nominalparty who has no legal standing to participate or prosecute the case. It argued that
the Secretary of Labor should have refrained from filing the said Motion for
Reconsideration and should havemaintained the cold neutrality of an impartial judge.
On September 15, 2005, the CA issued a Resolution33 denying the Secretary of Labor’s
Motion for Reconsideration on the ground, among others, that she is merely a nominal
party to the case and has no personal interest therein.
Anent CA-G.R. No. 80106 (now subject of G.R.170091), the CA, in its January 19, 2005
Decision,34 reversed and set aside the ruling of the Med-Arbiter. It likewise agreed with
Phil-Japan that before extending labor benefits, the determination of whether
anemployer-employee relationship exists is a primordial consideration. And based on the
documents submitted, the CA was convinced that out of the 69 members of PJWU-SUPER,
67 were not employees of Phil-Japan.
The CA further declared that for being violative of Article 259 of the Labor Code, Section
17, Rule VIII of Department Order No. 40-03 has no legal force and effect.
PJWU-SUPER and DOLE filed separate Motions for Reconsideration.35 On September 12,
2005, the CA issued a Resolution36 denying both motions and upholding its January 19,
2005 Decision.
Issues
On November 3, 2005, the Secretary of Labor filed before this Court a Petition for Review
on Certiorari docketed as G.R. No. 170091 assailing the January 19, 2005 Decision in CA-
G.R. SP No. 80106. She avers that:
THE COURT OF APPEALS ERRED IN DECLARING AS OF NO LEGAL FORCE AND EFFECT
SECTION 17, RULE VIII OFD.O. 40-03.37
Then on November 11, 2005,the Secretary of Laborfiled another Petition for Review on
Certiorari docketed as G.R. No. 169745 challenging the March 18, 2005 Decision in CA-G.R.
SP No. 80603. She anchors her Petition on the following issues:
I.
WHETHER X X X THE COURT OF APPEALS COMMITTED GRAVE ERROR IN DECLARING
SECTION 17, RULE VIII OF DEPARTMENT ORDER NO. 40-03 NULL AND VOID FOR BEING IN
CONFLICT WITH ARTICLE 259 OF THE LABOR CODE, AS AMENDED.
II.
WHETHER PROJECT EMPLOYEES MAY BE INCLUDED IN THE PETITION FOR CERTIFICATION
ELECTION INVOLVING REGULAR EMPLOYEES.38
Since both Petitions seek to uphold the validity of Section 17, Rule VIII of Department
Order No. 40-03, this Court ordered their consolidation.39
Secretary of Labor’s Arguments
The Secretary of Labor insists that Section 17, Rule VIII of Department Order No. 40-03 is in
harmony with Article 259 of the Labor Code for it does not deny the aggrieved party in an
unorganized establishment the right to appeal. It merely defers the exercise of such
rightuntil after the certification election shall have been conducted. In the meantime, the
16
aggrieved party may raise any issue arising therefrom as a protest. Such rule, according to
the Secretary of Labor, is in consonance with the policy of the State toencourage the
workers to organize and with the mandate ofthe Med-Arbiter to automatically conduct a
certification election.
The Secretary of Labor likewise argues that Article 259 applies only when there is a
violation of the rules and regulations in the conduct of the certification election. It does
not cover the order ofthe Med-Arbiter granting the conduct of certification election.
Moreover, the appeal contemplated under Article 259 must be filed by a party to the
certification election proceedings, to which the employer, Namboku, is a mere stranger.
The Secretary of Labor further contends that the combination of regular rank-and-file
employees and project employees in a certified bargaining unit does not pose any legal
obstacle.
Namboku’s Arguments
In opposing the Petition, Namboku questions the locus standi of the Secretary of Labor,
insisting that she is merely a nominal party in the Petitions for Certiorari filed with the CA.
Namboku strongly stresses that as a quasi-judicial officer, the Secretary of Labor should
detach herself from cases where her decision is appealed to a higher court for review.
Besides,her office never participated or defended the validity of Section 17 beforethe CA.
It was only after the CA rendered its Decision nullifying the subject provision of
Department Order No. 40-03 that the Secretary of Labor took an active stance to defend
the validity thereof.
With respect to the substantive aspect, Namboku remains steadfast in its position that
Section 17, Rule VIII of Department Order No. 40-03 is unconstitutional for it unduly
restricts the statutory right of the management to appeal the decision of the Med-Arbiter
to the Secretary of Labor in an unorganized establishment. It created a distinction that
does not appear in Article 259 of the Labor Code that it seeks to implement.
Namboku likewise echoes the ruling of the CA that there exists a statutory difference
between regular and project employees.1âwphi1 Theyhave divergent duties,
responsibilities, and status and duration of employment. They do not receive the same
benefits. Hence, they cannot unite into a homogenous or appropriate bargaining unit.
Phil-Japan’s Arguments
In defending the Decision of the CA, Phil-Japan argues that Section 17, Rule VIII of
Department Order No. 40-03 restricting the statutory right of the employer to appeal will
not stand judicial scrutiny. It stresses that the authority of the Med-Arbiter to determine
the existence of an employer-employee relationship and the right of a party to appeal the
former’s decision thereon to the Secretary of Labor are already settled. Phil-Japan insists
that under Article 259 of the Labor Code the remedy of appeal isavailable to any party for
the purpose of assailing the disposition of the Med-Arbiter allowing the conduct of
certification election without any distinction whether the establishment concerned is
organized or unorganized.
Our Ruling
The Petitions are denied. The Secretary of Labor isnot the real party-ininterest vested with
personality to file the present petitions. A real party-in-interest is the party who stands to
bebenefited or injured by the judgment in the suit, or the party entitled to the avails of the
suit.40 As thus defined, the real parties-in-interest in these cases would have been
PALCEA-SUPER and PJWU-SUPER. It would have been their duty to appear and defend the
ruling of the Secretary of Labor for they are the ones who were interested that the same
be sustained. Of course, they had the option not to pursue the case beforea higher court,
as what they did in these cases. As to the Secretary of Labor, she was impleaded in the
Petitions for Certiorari filed before the CA as a nominal party because one of the issues
involved therein was whether she committed an error of jurisdiction. But that does not
make her a real party-in-interest or vests her withauthority to appeal the Decisions of the
CA in case it reverses her ruling. Under Section 1,41 Rule 45 of the Rules of Court, only real
parties-in-interest who participated in the litigation of the case before the CA canavail of
an appeal by certiorari. In Judge Santiago v. Court of Appeals,42 Judge Pedro T. Santiago
rejected the amicablesettlement submitted by the parties in an expropriation proceeding
pending before his sala for being manifestly iniquitous to the government. When the CA
reversed his decision, Judge Santiago, apparently motivated by his sincere desire to
protect the government, filed a petition before this Court seeking the reinstatement of his
ruling. In denying his petition, this Court ruled that:
x x x Section 1 of Rule 45 allows a party to appeal by certiorari from a judgment of the
Court of Appeals by filing withthis Court a petition for review on certiorari. But petitioner
judge was not a party either in the expropriation proceedings or in the certiorari
proceeding in the Court of Appeals. His being named as respondent in the Court of Appeals
was merely to comply with the rule that in original petitions for certiorari, the court or the
judge, in his capacity as such, should be named as party respondent because the question
in such a proceeding is the jurisdiction of the court itself. (See Mayol v. Blanco, 61 Phil. 547
[1935], cited in Commentson the Rules of Court, Moran, Vol. II, 1979 ed., p. 471). "In
special proceedings, the judge whose order is under attack is merely a nominal party;
wherefore, a judge in his official capacity, should not be made to appear as a party seeking
reversal of a decision that is unfavorable to the action taken by him. A decent regard for
the judicial hierarchy bars a judge from suing against the adverse opinion of a higher court,
x x x." (Alcasid v. Samson, 102 Phil. 735, 740 [1957]).43
A similar ruling was arrived at in Government Service Insurance System v. The Hon. Court
of Appeals (8th Div.).44 In that case, upon petition of GSIS, the Securities and Exchange
Commission (SEC) issued a cease and desist order restraining the use of proxies during the
scheduled annual stockholders’ meeting of Manila Electric Company.When the private
respondents therein filed a petition for certiorari and prohibition, the CA invalidated the
SEC’s cease and desist order. Uncomfortable with the CA’s ruling, SEC appealed to this
Court. In denying SEC’s appeal, this Court ratiocinated as follows:
x x x Under Section 1 of Rule45, which governs appeals by certiorari, the right to file the
appeal is restricted to "a party," meaning that only the real parties-ininterest who litigated
the petition for certiorari before the Court of Appeals are entitled to appeal the same
17
under Rule 45. The SEC and its two officers may have been designated as respondents in
the petition for certiorari filed with the Court of Appeals, but under Section 5 ofRule 65
they are not entitled to be classified as real parties-in-interest. Under the provision, the
judge, court, quasijudicial agency, tribunal, corporation, board, officer or person to whom
grave abuse of discretion is imputed (the SEC and its two officers in this case) are
denominated only as public respondents.The provision further states that "public
respondents shall not appear in or file an answer or comment to the petition or any
pleading therein." Justice Regalado explains:
[R]ule 65 involves an original special civil action specifically directed against the person,
court, agency or party a quo which had committed not only a mistake of judgment but an
error of jurisdiction, hence should be made public respondents in that action brought to
nullify their invalidacts. It shall, however be the duty of the party litigant, whether in an
appeal under Rule 45 or in a special civil action in Rule65, to defend in his behalf and the
party whose adjudication is assailed, as he is the one interested in sustaining the
correctness of the disposition or the validity of the proceedings.45
It does not escape the attention of this Court that G.R. No. 170091 was cleverly captioned
as "Phil-Japan Workers Union Solidarity of Unions in the Philippines for Empowerment and
Reforms (PJWU-SUPER), Med-Arbiter Clarissa G. Beltran-Lerios and Secretary Patricia
Sto.Tomas of the Department of Labor and Employment, petitioners, versus Court of
Appeals46 and Phil-Japan Industrial Manufacturing Corporation." But the same was
actually filed by the Secretary of Labor all by herself. The body of the Petition does not
include PJWU-SUPER as one of the parties. Neither did its agent or representative sign the
verification and certification against forum-shopping. In other words, PJWUSUPER had no
participation in the preparation and filing of the Petition in G.R. No. 170091.
Another reason that heavily militates against entertaining these Petitions is that the
Secretary of Laborshould have remained impartial and detached from the cases she has
decided even if the same are appealed to a higher court for review.
In Pleyto v. PNP-Criminal Investigation & Detection Group,47 the Ombudsman ordered the
dismissal of Salvador A. Pleyto from the service. When Pleyto filed a Petition for Review
questioning his dismissal before the CA, the Ombudsman intervened. The Ombudsman
argued that as a competent disciplining body, it has the right "to defend its own findings of
factand law relative to the imposition of its decisions and ensure that its judgments
inadministrative disciplinary cases [are] upheld by the appellate court."48 Further, as "the
agency which rendered the assailed Decision, it is bestequipped with the knowledgeof the
facts, laws and circumstances that led to the finding of guilt against petitioner."49 The CA
allowed the Ombudsman to intervene and admitted the latter’s Comment and
Memorandum.
In ruling that the CA erred in allowing the Ombudsman to actively participate in the case,
this Court declared that:
It is a well-known doctrine that a judge should detach himself from cases where his
decision is appealed toa higher court for review. The raison d'etrefor such doctrine is the
fact that a judgeis not an active combatant in such proceeding and must leave the
opposing parties to contend their individual positions and the appellate court to decide
the issues without his active participation. When a judge actively participates in the appeal
of his judgment, he, in a way, ceases to be judicial and has become adversarial instead.
The court or the quasi-judicial agency must be detached and impartial, not only when
hearing and resolving the case before it, but even when its judgment is brought on appeal
before a higher court. The judge of a court or the officer of a quasi-judicial agency must
keep in mind thathe is an adjudicator who must settle the controversies between parties
in accordance with the evidence and the applicable laws, regulations, and/or
jurisprudence. His judgment should already clearly and completely state his findings of fact
and law. There must be no more need for him to justify further his judgment when it is
appealed before appellate courts. When the court judge orthe quasi-judicial officer
intervenes as a party in the appealed case, he inevitably forsakes his detachment and
impartiality, and his interest in the case becomes personal since his objective now is no
longer only to settle the controversy between the original parties (which he had already
accomplished by rendering his judgment), but more significantly, to refute the appellant’s
assignment of errors, defend his judgment, and prevent it from being overturned on
appeal.50
But the Secretary of Labor next contends that with the nullification of Department Order
No. 40-03, she has now become a party adversely affected by the CA ruling. In support of
her contention, the Secretary of Labor poses the question: who may now appeal the
Decisionsof the CA to the Supreme Court? Certainly, neither Namboku nor Phil-Japan
would appeala favorable decision.
The National Appellate Board v. P/Insp. Mamauag51 provides the complete answer. Thus:
However, the government party that can appeal is not the disciplining authority or tribunal
which previously heard the case and imposed the penalty of demotion or dismissal from
the service. The government party appealing must be one that is prosecuting the
administrative case against the respondent. Otherwise, an anomalous situation will result
where the disciplining authority or tribunal hearing the case, instead of being impartial and
detached, becomes an active participant in prosecuting the respondent. Thus, in Mathay,
Jr. v. Court of Appeals, decided after Dacoycoy, the Court declared:
To be sure, when the resolutions of the Civil Service Commission were brought before the
Court of Appeals, the Civil Service Commission was included only as a nominal party. As a
quasi-judicial body, the Civil Service Commission can be likened to a judge who should
"detach himself from cases where his decision is appealed to a higher court for review."
In instituting G.R. No. 126354, the Civil Service Commission dangerously departed from its
role as adjudicator and became an advocate. Its mandated function is to "hear and decide
administrative cases instituted by or brought before it directly or on appeal, including
contested appointments and to review decisions and actions of its offices and agencies,"
not to litigate.52
Here, both cases emanated from the petitions for certification election filed with the Med-
Arbiter and subsequently appealed to the Secretary of Labor. She had occasion to hear the
18
parties’ respective contentions and rule thereon. As the officer who rendered the decision
now subject of these cases, the Secretary of Labor should have remained impartial and
detached from the time the cases reached her until the same were being scrutinized on
appeal.53
True, the issue of whether Section 17, Rule VIII ofDepartment Order No. 40-03 is
unconstitutional is a matter of great concern and deserves everyone’s attention. But this
Court cannot pass upon and resolve the same in these Petitions. Otherwise, it will
countenance the objectionable actions of the Secretary of Labor and run afoul of the
abovecited settled decisions. WHEREFORE, for the foregoing reasons, the Petitions in G.R.
Nos. 169745 and 170091 are DENIED.
SO ORDERED.
5.
REPUBLIC OF THE PHILIPPINES, represented by Department of Labor and
Employment (DOLE), Petitioner, - versus - KAWASHIMA TEXTILE MFG.,
PHILIPPINES, INC., Respondent. July 23, 2008
x----------------------------------------------------------x
G.R. No. 160352
The Republic of the Philippines assails by way of Petition for Review on Certiorari under
Rule 45 of the Rules of Court, the December 13, 2002 Decision[1] of the Court of Appeals
(CA), which reversed the August 18, 2000 Decision[2] of the Department of Labor and
Employment (DOLE), and reinstated the May 17, 2000 Order[3] of Med-
Arbiter Anastacio L. Bactin, dismissing the petition of Kawashima Free Workers Union-
PTGWO Local Chapter No. 803 (KFWU) for the conduct of a certification election in
Kawashima Textile Mfg. Phils., Inc. (respondent); and the October 7, 2003 CA
Resolution[4] which denied the motion for reconsideration.
The relevant facts are of record.
On January 24, 2000, KFWU filed with DOLE Regional Office No. IV, a Petition for
Certification Election to be conducted in the bargaining unit composed of 145 rank-and-file
employees of respondent.[5] Attached to its petition are a Certificate of Creation of
Local/Chapter[6] issued on January 19, 2000 by DOLE Regional Office No. IV, stating that it
[KFWU] submitted to said office a Charter Certificate issued to it by the national federation
Phil. Transport & General Workers Organization (PTGWO), and a Report of Creation of
Local/Chapter.[7]
Respondent filed a Motion to Dismiss[8] the petition on the ground that KFWU did not
acquire any legal personality because its membership of mixed rank-and-file and
supervisory employees violated Article 245 of the Labor Code, and its failure to submit its
books of account contravened the ruling of the Court in Progressive Development
Corporation v. Secretary, Department of Labor and Employment.[9]
In an Order dated May 17, 2000, Med-Arbiter Bactin found KFWUs legal personality
defective and dismissed its petition for certification election, thus:
We scrutinize the facts and evidences presented by the parties and arrived at a decision
that at least two (2) members of [KFWU], namely: Dany I. Fernandez and Jesus R. Quinto,
Jr. are supervisory employees, having a number of personnel under them. Being
supervisory employees, they are prohibited under Article 245 of the Labor Code, as
amended, to join the union of the rank and file employees. Dany I. Fernandez and Jesus
R. Quinto, Jr., Chief Engineers of the Maintenance and Manufacturing Department,
respectively, act as foremen to the line engineers, mechanics and other non-skilled
workers and responsible [for] the preparation and organization of maintenance shop
fabrication and schedules, inventory and control of materials and supplies and tasked to
implement training plans on line engineers and evaluate the performance of their
subordinates. The above-stated actual functions of Dany I. Fernandez and Jesus R. Quinto,
Jr. are clear manifestation that they are supervisory employees.
xxxx
Since petitioners members are mixture of rank and file and supervisory employees,
petitioner union, at this point [in] time, has not attained the status of a legitimate labor
organization. Petitioner should first exclude the supervisory employees from it
membership before it can attain the status of a legitimate labor organization. The above
judgment is supported by the decision of the Supreme Court in the Toyota Case[10] wherein
the High Tribunal ruled:
As respondent unions membership list contains the names of at least twenty seven (27)
supervisory employees in Level Five Positions, the union could not prior to purging itself of
its supervisory employee members, attain the status of a legitimate labor organization.
Not being one, it cannot possess the requisite personality to file a petition for certification
election. (Underscoring omitted.)
xxxx
Furthermore, the commingling of rank and file and supervisory employees in one (1)
bargaining unit cannot be cured in the exclusion-inclusion proceedings [at] the pre-
election conference. The above ruling is supported by the Decision of the Supreme Court
in Dunlop Slazenger (Phils.), Inc. vs. Honorable Secretary of Labor and Employment, et al.,
G.R. No. 131248 dated December 11, 1998[11] x x x.
xxxx
WHEREFORE, premises considered, the petition for certification election is hereby
dismissed for lack of requisite legal status of petitioner to file this instant petition.
SO ORDERED.[12] (Emphasis supplied)
19
On the basis of the aforecited decision, respondent filed with DOLE Regional Office No. IV
a Petition for Cancellation of Charter/Union Registration of KFWU,[13] the final outcome of
which, unfortunately, cannot be ascertained from the records.
Meanwhile, KFWU appealed[14] to the DOLE which issued a Decision on August 18, 2000,
the dispositive portion of which reads:
WHEREFORE, the appeal is GRANTED. The Order dated 17 May 2000 of the Med-Arbiter is
REVERSED and SET ASIDE. Accordingly, let the entire records of the case be remanded to
the office of origin for the immediate conduct of certification election, subject to the usual
pre-election conference, among the rank-and-file employees of Kawashima Textile
Manufacturing Philippines, Inc. with the following choices:
1. Kawashima Free Workers Union-PTGWO Local Chapter No. 803; and
2. No union.
Pursuant to Rule XI, Section 11.1 of the New Implementing Rules, the employer is hereby
directed to submit to the office of origin the certified list of current employees in the
bargaining unit for the last three months prior to the issuance of this decision.
SO DECIDED.[15]
The DOLE held that Med-Arbiter Bactin's reliance on the decisions of the Court in Toyota
Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor
Union[16] and Dunlop Slazenger, Inc. v. Secretary of Labor and Employment[17] was
misplaced, for while Article 245 declares supervisory employees ineligible for membership
in a labor organization for rank-and-file employees, the provision did not state the effect
of such prohibited membership on the legitimacy of the labor organization and its right to
file for certification election. Neither was such mixed membership a ground for
cancellation of its registration. Section 11, Paragraph II, Rule XI of Department Order No. 9
provides for the dismissal of a petition for certification election based on lack of legal
personality of a labor organization only on the following grounds: (1) [KFWU] is not listed
by the Regional Office or the Bureau of Labor Relations in its registry of legitimate labor
organizations; or (2) [KFWU's] legal personality has been revoked or canceled with
finality.[18] The DOLE noted that neither ground existed; on the contrary, KFWU's legal
personality was well-established, for it held a certificate of creation and had been listed in
the registry of legitimate labor organizations.
As to the failure of KFWU to file its books of account, the DOLE held that such omission
was not a ground for revocation of union registration or dismissal of petition for
certification election, for under Section 1, Rule VI of Department Order No. 9, a local or
chapter like KFWU was no longer required to file its books of account.[19]
Respondent filed a Motion for Reconsideration[20] but the DOLE denied the same in
its September 28, 2000 Resolution.[21]
However, on appeal by respondent, the CA rendered the December 13, 2002 Decision
assailed herein, reversing the August 18, 2000 DOLE Decision, thus:
Since respondent union clearly consists of both rank and file and supervisory employees,
it cannot qualify as a legitimate labor organization imbued with the requisite personality
to file a petition for certification election. This infirmity in union membership cannot be
corrected in the inclusion-exclusion proceedings during the pre-election conference.
Finally, contrary to the pronouncement of public respondent, the application of the
doctrine enunciated in Toyota Motor Philippines Corporation vs. Toyota Motor Philippines
Corporation Labor Union was not construed in a way that effectively denies the
fundamental right of respondent union to organize and seek bargaining representation
x x x.
For ignoring jurisprudential precepts on the matter, the Court finds that the
Undersecretary of Labor, acting under the authority of the Secretary of Labor, acted with
grave abuse of discretion amounting to lack or excess of jurisdiction.
WHEREFORE, premises considered, the Petition is hereby GRANTED. The Decision dated 18
August 2000 of the Undersecretary of Labor, acting under the authority of the Secretary, is
hereby REVERSED and SET ASIDE. The Order dated 17 May 2000 of the Med-Arbiter
dismissing the petition for certification election filed by Kawashima Free Workers Union-
PTGWO Local Chapter No. 803 is REINSTATED.
SO ORDERED.[22] (Emphasis supplied)
KFWU filed a Motion for Reconsideration[23] but the CA denied it.
The Republic of the Philippines (petitioner) filed the present petition to seek closure on
two issues:
First, whether a mixed membership of rank-and-file and supervisory employees in a union
is a ground for the dismissal of a petition for certification election in view of the
amendment brought about by D.O. 9, series of 1997, which deleted the phraseology in the
old rule that [t]he appropriate bargaining unit of the rank-and-file employee shall not
include the supervisory employees and/or security guards; and
Second, whether the legitimacy of a duly registered labor organization can be collaterally
attacked in a petition for a certification election through a motion to dismiss filed by an
employer such as Kawashima Textile Manufacturing Phils., Inc.[24]
The petition is imbued with merit.
The key to the closure that petitioner seeks could have been Republic Act (R.A.) No.
9481.[25]Sections 8 and 9 thereof provide:
Section 8. Article 245 of the Labor Code is hereby amended to read as follows:
"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 the
20
collective bargaining unit of the rank-and-file employees but may join, assist or form
separate collective bargaining units and/or legitimate labor organizations of their own. The
rank and file union and the supervisors' union operating within the same establishment
may join the same federation or national union."
Section 9. A new provision, Article 245-A is inserted into the Labor Code to read as follows:
"Art. 245-A. Effect of Inclusion as Members of Employees Outside the Bargaining Unit. -
The inclusion as union members of employees outside the bargaining unit shall not be a
ground for the cancellation of the registration of the union. Said employees are
automatically deemed removed from the list of membership of said
union."(Emphasis supplied)
Moreover, under Section 4, a pending petition for cancellation of registration
will not hinder a legitimate labor organization from initiating a certification election, viz:
Sec. 4. A new provision is hereby inserted into the Labor Code as Article 238-A to read as
follows:
"Art. 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.
In case of cancellation, nothing herein shall restrict the right of the union to seek just and
equitable remedies in the appropriate courts." (Emphasis supplied)
Furthermore, under Section 12 of R.A. No. 9481, employers have no personality to
interfere with or thwart a petition for certification election filed by a legitimate labor
organization, to wit:
Sec. 12. A new provision, Article 258-A is hereby inserted into the Labor Code to read as
follows:
"Art. 258-A. Employer as Bystander. - In all cases, whether the petition for certification
election is filed by an employer or a legitimate labor organization, the employer shall not
be considered a party thereto with a concomitant right to oppose a petition for
certification election. The employer's participation in such proceedings shall be limited
to: (1) being notified or informed of petitions of such nature; and (2) submitting the list
of employees during the pre-election conference should the Med-Arbiter act favorably
on the petition." (Emphasis supplied)
However, R.A. No. 9481 took effect only on June 14, 2007;[26] hence, it applies only to
labor representation cases filed on or after said date.[27] As the petition for certification
election subject matter of the present petition was filed by KFWU on January 24,
2000,[28] R.A. No. 9481 cannot apply to it. There may have been curative labor
legislations[29] that were given retrospective effect,[30] but not the aforecited provisions of
R.A. No. 9481, for otherwise, substantive rights and interests already vested would be
impaired in the process.[31]
Instead, the law and rules in force at the time of the filing by KFWU of the petition for
certification election on January 24, 2000 are R.A. No. 6715,[32] amending Book V of
Presidential Decree (P.D.) No. 442 (Labor Code),[33] as amended, and the Rules and
Regulations Implementing R.A. No. 6715,[34] as amended by Department Order No. 9,
series of 1997.[35]
It is within the parameters of R.A. No. 6715 and the Implementing Rules that the Court will
now resolve the two issues raised by petitioner.
If there is one constant precept in our labor laws be it Commonwealth Act No. 213
(1936),[36]R.A. No. 875 (1953),[37] P.D. No. 442 (1974), Executive Order (E.O.) No. 111
(1986)[38] or R.A. No. 6715 (1989) - it is that only a legitimate labor organization may
exercise the right to be certified as the exclusive representative of all the employees in an
appropriate collective bargaining unit for purposes of collective bargaining.[39] What has
varied over the years has been the degree of enforcement of this precept, as reflected in
the shifting scope of administrative and judicial scrutiny of the composition of a labor
organization before it is allowed to exercise the right of representation.
One area of contention has been the composition of the membership of a labor
organization, specifically whether there is a mingling of supervisory and rank-and-file
employees and how such questioned mingling affects its legitimacy.
It was in R.A. No. 875, under Section 3, that such questioned mingling was first
prohibited,[40] to wit:
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)
Nothing in R.A. No. 875, however, tells of how the questioned mingling can affect the
legitimacy of the labor organization. Under Section 15, the only instance when a labor
organization loses its legitimacy is when it violates its duty to bargain collectively; but
there is no word on whether such mingling would also result in loss of legitimacy. Thus,
when the issue of whether the membership of two supervisory employees impairs the
legitimacy of a rank-and-file labor organization came before the Court En Banc in Lopez v.
Chronicle Publication Employees Association,[41] the majority pronounced:
It may be observed that nothing is said of the effect of such ineligibility upon the union
itself or on the status of the other qualified members thereof should such prohibition be
disregarded. Considering that the law is specific where it intends to divest a legitimate
labor union of any of the rights and privileges granted to it by law, the absence of any
provision on the effect of the disqualification of one of its organizers upon the legality of
the union, may be construed to confine the effect of such ineligibility only upon the
membership of the supervisor. In other words, the invalidity of membership of one of
21
the organizers does not make the union illegal, where the requirements of the law for
the organization thereof are, nevertheless, satisfied and met.[42] (Emphasis supplied)
Then the Labor Code was enacted in 1974 without reproducing Sec. 3 of R.A. No. 875. The
provision in the Labor Code closest to Sec. 3 is Article 290,[43] which is deafeningly silent on
the prohibition against supervisory employees mingling with rank-and-file employees in
one labor organization. Even the Omnibus Rules Implementing Book V of the Labor
Code[44] (Omnibus Rules) merely provides in Section 11, Rule II, thus:
Sec. 11. Supervisory unions and unions of security guards to cease operation. All existing
supervisory unions and unions of security guards shall, upon the effectivity of the Code,
cease to operate as such and their registration certificates shall be deemed automatically
cancelled. However, existing collective agreements with such unions, the life of which
extends beyond the date of effectivity of the Code shall be respected until their expiry
date insofar as the economic benefits granted therein are concerned.
Members of supervisory unions who do not fall within the definition of managerial
employees shall become eligible to join or assist the rank and file organization. The
determination of who are managerial employees and who are not shall be the subject of
negotiation between representatives of supervisory union and the employer. If no
agreement s reached between the parties, either or both of them ma bring the issue to the
nearest Regional Office for determination. (Emphasis supplied)
The obvious repeal of the last clause of Sec. 3, R.A. No. 875 prompted the Court to declare
in Bulletin v. Sanchez[45] that supervisory employees who do not fall under the category of
managerial employees may join or assist in the formation of a labor organization for rank-
and-file employees, but they may not form their own labor organization.
While amending certain provisions of Book V of the Labor Code, E.O. No. 111 and its
implementing rules[46] continued to recognize the right of supervisory employees, who do
not fall under the category of managerial employees, to join a rank-and-file labor
organization.[47]
Effective 1989, R.A. No. 6715 restored the prohibition against the questioned mingling in
one labor organization, viz:
Sec. 18. Article 245 of the same Code, as amended, is hereby further amended to read as
follows
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. (Emphasis supplied)
Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying the exact effect
any violation of the prohibition would bring about on the legitimacy of a labor
organization.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus
Rules) which supplied the deficiency by introducing the following amendment to Rule II
(Registration of Unions):
Sec. 1. Who may join unions. x x x Supervisory employees and security guards 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; Provided, that those
supervisory employees who are included in an existing rank-and-file bargaining unit, upon
the effectivity of Republic Act No. 6715, shall remain in that unit x x x. (Emphasis supplied)
and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz:
Sec. 1. Where to file. A petition for certification election may be filed with the Regional
Office which has jurisdiction over the principal office of the employer. The petition shall be
in writing and under oath.
Sec. 2. Who may file. Any legitimate labor organization or the employer, when requested
to bargain collectively, may file the petition.
The petition, when filed by a legitimate labor organization, shall contain, among others:
xxxx
(c) description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require; and provided further, that the appropriate bargaining
unit of the rank-and-file employees shall not include supervisory employees and/or
security guards. (Emphasis supplied)
By that provision, any questioned mingling will prevent an otherwise legitimate and duly
registered labor organization from exercising its right to file a petition for certification
election.
Thus, when the issue of the effect of mingling was brought to the fore in Toyota,[48] the
Court, citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held:
Clearly, based on this provision, a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It cannot, for any guise or purpose,
be a legitimate labor organization. Not being one, an organization which carries a mixture
of rank-and-file and supervisory employees cannot possess any of the rights of a
legitimate labor organization, including the right to file a petition for certification
election for the purpose of collective bargaining. It becomes necessary,
therefore, anterior to the granting of an order allowing a certification election, to inquire
into the composition of any labor organization whenever the status of the labor
organization is challenged on the basis of Article 245 of the Labor Code.
xxxx
In the case at bar, as respondent union's membership list contains the names of at least
twenty-seven (27) supervisory employees in Level Five positions, the union could not, prior
to purging itself of its supervisory employee members, attain the status of a legitimate
22
labor organization. Not being one, it cannot possess the requisite personality to file a
petition for certification election.[49] (Emphasis supplied)
In Dunlop,[50] in which the labor organization that filed a petition for certification election
was one for supervisory employees, but in which the membership included rank-and-file
employees, the Court reiterated that such labor organization had no legal right to file a
certification election to represent a bargaining unit composed of supervisors for as long as
it counted rank-and-file employees among its members.[51]
It should be emphasized that the petitions for certification election involved
in Toyota and Dunlop were filed on November 26, 1992 and September 15, 1995,
respectively; hence, the 1989 Rules was applied in both cases.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by
Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the
requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules - that the petition for
certification election indicate that the bargaining unit of rank-and-file employees has not
been mingled with supervisory employees - was removed. Instead, what the 1997
Amended Omnibus Rules requires is a plain description of the bargaining unit, thus:
Rule XI
Certification Elections
xxxx
Sec. 4. Forms and contents of petition. - The petition shall be in writing and under oath and
shall contain, among others, the following: x x x (c) The description of the bargaining
unit.[52]
In Pagpalain Haulers, Inc. v. Trajano,[53] the Court had occasion to uphold the validity of
the 1997 Amended Omnibus Rules, although the specific provision involved therein was
only Sec. 1, Rule VI, to wit:
Sec. 1. Chartering and creation of a local/chapter.- A duly registered federation or national
union may directly create a local/chapter by submitting to the Regional Office or to the
Bureau two (2) copies of the following: a) a charter certificate issued by the federation or
national union indicating the creation or establishment of the local/chapter; (b) the names
of the local/chapters officers, their addresses, and the principal office of the local/chapter;
and (c) the local/ chapters constitution and by-laws; provided that where the
local/chapters constitution and by-laws is the same as that of the federation or national
union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary or
the Treasurer of the local/chapter and attested to by its President.
which does not require that, for its creation and registration, a local or chapter submit a
list of its members.
Then came Tagaytay Highlands Intl. Golf Club, Inc. v. Tagaytay Highlands Employees
Union-PGTWO[54] in which the core issue was whether mingling affects the legitimacy of a
labor organization and its right to file a petition for certification election. This time, given
the altered legal milieu, the Court abandoned the view in Toyota and Dunlop and reverted
to its pronouncement in Lopez that while there is a prohibition against the mingling of
supervisory and rank-and-file employees in one labor organization, the Labor Code does
not provide for the effects thereof.[55] Thus, the Court held that after a labor organization
has been registered, it may exercise all the rights and privileges of a legitimate labor
organization. Any mingling between supervisory and rank-and-file employees in its
membership cannot affect its legitimacy for that is not among the grounds for cancellation
of its registration, unless such mingling was brought about by misrepresentation, false
statement or fraud under Article 239 of the Labor Code.[56]
In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products
Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-and-File Union-
FFW,[57] the Court explained that since the 1997 Amended Omnibus Rules does not require
a local or chapter to provide a list of its members, it would be improper for the DOLE to
deny recognition to said local or chapter on account of any question pertaining to its
individual members.[58]
More to the point is Air Philippines Corporation v. Bureau of Labor Relations,[59] which
involved a petition for cancellation of union registration filed by the employer in 1999
against a rank-and-file labor organization on the ground of mixed membership: [60] the
Court therein reiterated its ruling in Tagaytay Highlands that 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.[61]
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as
interpreted by the Court in Tagaytay Highlands, San Miguel and Air
Philippines, had already set the tone for it. Toyota and Dunlop no longer hold sway in the
present altered state of the law and the rules.
Consequently, the Court reverses the ruling of the CA and reinstates that of the DOLE
granting the petition for certification election of KFWU.
Now to the second issue of whether an employer like respondent may collaterally attack
the legitimacy of a labor organization by filing a motion to dismiss the latters petition for
certification election.
Except when it is requested to bargain collectively,[62] 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.[63] 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;[64] 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.[65] The employer's
only
right in the proceeding is to be notified or informed thereof.[66]
23
The amendments to the Labor Code and its implementing rules have buttressed that policy
even more.
WHEREFORE, the petition is GRANTED. The December 13, 2002 Decision and October 7,
2003 Resolution of the Court of Appeals and the May 17, 2000 Order of Med-
Arbiter Anastacio L. Bactin are REVERSED and SET ASIDE, while the August 18, 2000
Decision and September 28, 2000 Resolution of the Department of Labor and Employment
are REINSTATED.
No costs.
SO ORDERED.
6.
G.R. No. 179146 July 23, 2013
HOLY CHILD CATHOLIC SCHOOL, Petitioner, vs. HON. PATRICIA STO. TOMAS, in her
official capacity as Secretary of the Department of Labor and Employment, and PINAG-
ISANG TINIG AT LAKAS NG ANAKPAWIS – HOLY CHILD CATHOLIC SCHOOL TEACHERS AND
EMPLOYEES LABOR UNION (HCCS-TELU-PIGLAS), Respondents.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the Rules of Civil
Procedure are the April 18, 2007 Decision1 and July 31, 2007 Resolution2 of the Court of
Appeals in CA-G.R. SP No. 76175, which affirmed the December 27, 2002 Decision3 and
February 13, 2003 Resolution4 of the Secretary of the Department of Labor and
Employment (SOLE) that set aside the August 10, 2002 Decision5 of the Med-Arbiter
denying private respondent’s petition for certification election.
The factual antecedents are as follows:
On May 31, 2002, a petition for certification election was filed by private respondent
Pinag-Isang Tinig at Lakas ng Anakpawis – Holy Child Catholic School Teachers and
Employees Labor Union (HCCS-TELUPIGLAS), alleging that: PIGLAS is a legitimate labor
organization duly registered with the Department of Labor and Employment (DOLE)
representing HCCS-TELU-PIGLAS; HCCS is a private educational institution duly registered
and operating under Philippine laws; there are approximately one hundred twenty (120)
teachers and employees comprising the proposed appropriate bargaining unit; and HCCS is
unorganized, there is no collective bargaining agreement or a duly certified bargaining
agent or a labor organization certified as the sole and exclusive bargaining agent of the
proposed bargaining unit within one year prior to the filing of the petition. 6 Among the
documents attached to the petition were the certificate of affiliation with Pinag-Isang Tinig
at Lakas ng Anakpawis Kristiyanong Alyansa ng Makabayang Obrero (PIGLAS-KAMAO)
issued by the Bureau of Labor Relations (BLR), charter certificate issued by PIGLASKAMAO,
and certificate of registration of HCCS-TELU as a legitimate labor organization issued by the
DOLE.7
In its Comment8 and Position Paper,9 petitioner HCCS consistently noted that it is a
parochial school with a total of 156 employees as of June 28, 2002, broken down as
follows: ninety-eight (98) teaching personnel, twenty-five (25) non-teaching academic
employees, and thirty-three (33) non-teaching non-academic workers. It averred that of
the employees who signed to support the petition, fourteen (14) already resigned and six
(6) signed twice. Petitioner raised that members of private respondent do not belong to
the same class; it is not only a mixture of managerial, supervisory, and rank-and-file
employees – as three (3) are vice-principals, one (1) is a department head/supervisor, and
eleven (11) are coordinators – but also a combination of teaching and non-teaching
personnel – as twenty-seven (27) are non-teaching personnel. It insisted that, for not being
in accord with Article 24510 of the Labor Code, private respondent is an illegitimate labor
organization lacking in personality to file a petition for certification election, as held in
Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor
Union;11 and an inappropriate bargaining unit for want of community or mutuality of
interest, as ruled in Dunlop Slazenger (Phils.), Inc. v. Secretary of Labor and
Employment12 and De La Salle University Medical Center and College of Medicine v.
Laguesma.13
Private respondent, however, countered that petitioner failed to substantiate its claim
that some of the employees included in the petition for certification election holds
managerial and supervisory positions.14 Assuming it to be true, it argued that Section 11
(II),15 Rule XI of DOLE Department Order (D.O.) No. 9, Series of 1997, provided for specific
instances in which a petition filed by a legitimate organization shall be dismissed by the
Med-Arbiter and that "mixture of employees" is not one of those enumerated. Private
respondent pointed out that questions pertaining to qualifications of employees may be
threshed out in the inclusion-exclusion proceedings prior to the conduct of the
certification election, pursuant to Section 2,16 Rule XII of D.O. No. 9. Lastly, similar to the
ruling in In Re: Globe Machine and Stamping Company,17 it contended that the will of
petitioner’s employees should be respected as they had manifested their desire to be
represented by only one bargaining unit. To back up the formation of a single employer
unit, private respondent asserted that even if the teachers may receive additional pay for
an advisory class and for holding additional loads, petitioner’s academic and non-academic
personnel have similar working conditions. It cited Laguna College v. Court of Industrial
Relations,18 as well as the case of a union in West Negros College in Bacolod City, which
allegedly represented both academic and non-academic employees.
On August 10, 2002, Med-Arbiter Agatha Ann L. Daquigan denied the petition for
certification election on the ground that the unit which private respondent sought to
represent is inappropriate. She resolved:
A certification election proceeding directly involves two (2) issues namely: (a) the proper
composition and constituency of the bargaining unit; and (b) the validity of majority
representation claims. It is therefore incumbent upon the Med-Arbiter to rule on the
appropriateness of the bargaining unit once its composition and constituency is
questioned.
24
Section 1 (q), Rule I, Book V of the Omnibus Rules defines a "bargaining unit" as a group of
employees sharing mutual interests within a given employer unit comprised of all or less
than all of the entire body of employees in the employer unit or any specific occupational
or geographical grouping within such employer unit. This definition has provided the
"community or mutuality of interest" test as the standard in determining the constituency
of a collective bargaining unit. This is so because the basic test of an asserted bargaining
unit’s acceptability is whether or not it is fundamentally the combination which will best
assure to all employees the exercise of their collective bargaining rights. The application of
this test may either result in the formation of an employer unit or in the fragmentation of
an employer unit.
Corollary, private respondent can continue to exist as a legitimate labor organization with
the combined teaching and non-teaching personnel in its membership and representing
both classes of employees in separate bargaining negotiations and agreements.
WHEREFORE, the Decision of the Med-Arbiter dated 10 August 2002 is hereby REVERSED
and SET ASIDE. In lieu thereof, a new order is hereby issued directing the conduct of two
certification elections, one among the non-teaching personnel of Holy Child Catholic
School, and the other, among the teaching personnel of the same school, subject to the
usual pre-election conferences and inclusion-exclusion proceedings, with the following
choices:

In the case at bar, the employees of petitioner, may, as already suggested, quite easily be A. Certification Election Among Petitioner’s Teaching Personnel:
categorized into (2) general classes: one, the teaching staff; and two, the non-teaching-
staff. Not much reflection is needed to perceive that the community or mutuality of 1. Holy Child Catholic School Teachers and Employees Labor Union; and
interest is wanting between the teaching and the non-teaching staff. It would seem
obvious that the teaching staff would find very little in common with the non-teaching 2. No Union.
staff as regards responsibilities and function, working conditions, compensation rates,
social life and interests, skills and intellectual pursuits, etc. These are plain and patent B. Certification Election Among Petitioner’s Non-Teaching Personnel:
realities which cannot be ignored. These dictate the separation of these two categories of
1. Holy Child Catholic School Teachers and Employees Labor Union; and
employees for purposes of collective bargaining. (University of the Philippines vs. Ferrer-
Calleja, 211 SCRA 451)19
2. No Union.
Private respondent appealed before the SOLE, who, on December 27, 2002, ruled against
Petitioner is hereby directed to submit to the Regional Office of origin within ten (10) days
the dismissal of the petition and directed the conduct of two separate certification
from receipt of this Decision, a certified separate list of its teaching and non-teaching
elections for the teaching and the non-teaching personnel, thus:
personnel or when necessary a separate copy of their payroll for the last three (3) months
prior to the issuance of this Decision.20
We agree with the Med-Arbiter that there are differences in the nature of work, hours and
conditions of work and salary determination between the teaching and non-teaching
Petitioner filed a motion for reconsideration21 which, per Resolution dated February 13,
personnel of petitioner. These differences were pointed out by petitioner in its position
2003, was denied. Consequently, petitioner filed before the CA a Petition for Certiorari
paper. We do not, however, agree with the Med-Arbiter that these differences are
with Prayer for Temporary Restraining Order and Preliminary Injunction.22 The CA resolved
substantial enough to warrant the dismissal of the petition. First, as pointed out by private
to defer action on the prayer for TRO pending the filing of private respondent’s
respondent, "inappropriateness of the bargaining unit sought to be represented is not a
Comment.23 Later, private respondent and petitioner filed their Comment24 and
ground for the dismissal of the petition." In fact, in the cited case of University of the
Reply,25respectively.
Philippines v. Ferrer-Calleja, supra, the Supreme Court did not order the dismissal of the
petition but ordered the conduct of a certification election, limiting the same among the On July 23, 2003, petitioner filed a motion for immediate issuance of a TRO, alleging that
non-academic personnel of the University of the Philippines. Hon. Helen F. Dacanay of the Industrial Relations Division of the DOLE was set to
implement the SOLE Decision when it received a summons and was directed to submit a
It will be recalled that in the U.P. case, there were two contending unions, the
certified list of teaching and non-teaching personnel for the last three months prior to the
Organization of Non-Academic Personnel of U.P. (ONAPUP) and All U.P. Workers Union
issuance of the assailed Decision.26 Acting thereon, on August 5, 2003, the CA issued the
composed of both academic and nonacademic personnel of U.P. ONAPUP sought the
TRO and ordered private respondent to show cause why the writ of preliminary injunction
conduct of certification election among the rank-and-file non-academic personnel only
should not be granted.27 Subsequently, a Manifestation and Motion28 was filed by private
while the all U.P. Workers Union sought the conduct of certification election among all of
respondent, stating that it repleads by reference the arguments raised in its Comment and
U.P.’s rank-and-file employees covering academic and nonacademic personnel. While the
that it prays for the immediate lifting of the TRO and the denial of the preliminary
Supreme Court ordered a separate bargaining unit for the U.P. academic personnel, the
injunction. The CA, however, denied the manifestation and motion on November 21,
Court, however, did not order them to organize a separate labor organization among
200329 and, upon motion of petitioner,30 granted the preliminary injunction on April 21,
themselves. The All U.P. Workers Union was not directed to divest itself of its academic
2005.31 Thereafter, both parties filed their respective Memorandum.32
personnel members and in fact, we take administrative notice that the All U.P. Workers
Union continue to exist with a combined membership of U.P. academic and non-academic
personnel although separate bargaining agreements is sought for the two bargaining units.
25
On April 18, 2007, the CA eventually dismissed the petition. As to the purported
commingling of managerial, supervisory, and rank-and-file employees in private
respondent’s membership, it held that the Toyota ruling is inapplicable because the vice-
principals, department head, and coordinators are neither supervisory nor managerial
employees. It reasoned:
x x x While it may be true that they wield power over other subordinate employees of the
petitioner, it must be stressed, however, that their functions are not confined with policy-
determining such as hiring, firing, and disciplining of employees, salaries, teaching/working
hours, other monetary and non-monetary benefits, and other terms and conditions of
employment. Further, while they may formulate policies or guidelines, nonetheless, such is
merely recommendatory in nature, and still subject to review and evaluation by the higher
executives, i.e., the principals or executive officers of the petitioner. It cannot also be
denied that in institutions like the petitioner, company policies have already been pre-
formulated by the higher executives and all that the mentioned employees have to do is
carry out these company policies and standards. Such being the case, it is crystal clear that
there is no improper commingling of members in the private respondent union as to
preclude its petition for certification of (sic) election.33
Anent the alleged mixture of teaching and non-teaching personnel, the CA agreed with
petitioner that the nature of the former’s work does not coincide with that of the latter.
Nevertheless, it ruled that the SOLE did not commit grave abuse of discretion in not
dismissing the petition for certification election, since it directed the conduct of two
separate certification elections based on Our ruling in University of the Philippines v.
Ferrer-Calleja.34
A motion for reconsideration35 was filed by petitioner, but the CA denied the
same;36 hence, this petition assigning the alleged errors as follows:
I.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE RULING IN THE CASE
OF TOYOTA MOTOR PHILIPPINES CORPORATION VS. TOYOTA MOTOR PHILIPPINES
CORPORATION LABOR UNION (268 SCRA 573) DOES NOT APPLY IN THE CASE AT BAR
DESPITE THE [COMMINGLING] OF BOTH SUPERVISORY OR MANAGERIAL AND RANK-AND-
FILE EMPLOYEES IN THE RESPONDENT UNION;
II
THE HONORABLE COURT OF APPEALS ERRED IN ITS CONFLICTING RULING ALLOWING THE
CONDUCT OF CERTIFICATION ELECTION BY UPHOLDING THAT THE RESPONDENT UNION
REPRESENTED A BARGAINING UNIT DESPITE ITS OWN FINDINGS THAT THERE IS NO
MUTUALITY OF INTEREST BETWEEN THE MEMBERS OF RESPONDENT UNION APPLYING
THE TEST LAID DOWN IN THE CASE OF UNIVERSITY OF THE PHILIPPINES VS. FERRER-
CALLEJA (211 SCRA 451).37
We deny.
Petitioner claims that the CA contradicted the very definition of managerial and
supervisory employees under existing law and jurisprudence when it did not classify the
vice-principals, department head, and coordinators as managerial or supervisory
employees merely because the policies and guidelines they formulate are still subject to
the review and evaluation of the principal or executive officers of petitioner. It points out
that the duties of the vice-principals, department head, and coordinators include the
evaluation and assessment of the effectiveness and capability of the teachers under them;
that such evaluation and assessment is independently made without the participation of
the higher Administration of petitioner; that the fact that their recommendation
undergoes the approval of the higher Administration does not take away the independent
nature of their judgment; and that it would be difficult for the vice-principals, department
head, and coordinators to objectively assess and evaluate the performances of teachers
under them if they would be allowed to be members of the same labor union.
On the other hand, aside from reiterating its previous submissions, private respondent
cites Sections 9 and 1238of Republic Act (R.A.) No. 9481 to buttress its contention that
petitioner has no standing to oppose the petition for certification election. On the basis of
the statutory provisions, it reasons that an employer is not a party-in-interest in a
certification election; thus, petitioner does not have the requisite right to protect even by
way of restraining order or injunction.
First off, We cannot agree with private respondent’s invocation of R.A. No. 9481. Said law
took effect only on June 14, 2007; hence, its applicability is limited to labor representation
cases filed on or after said date.39 Instead, the law and rules in force at the time private
respondent filed its petition for certification election on May 31, 2002 are R.A. No. 6715,
which amended Book V of Presidential Decree (P.D.) No. 442 (the Labor Code), as
amended, and the Rules and Regulations Implementing R.A. No. 6715, as amended by D.O.
No. 9, which was dated May 1, 1997 but took effect on June 21, 1997.40
However, note must be taken that even without the express provision of Section 12 of RA
No. 9481, the "Bystander Rule" is already well entrenched in this jurisdiction. It has been
consistently held in a number of cases that a certification election is the sole concern of
the workers, except when the employer itself has to file the petition pursuant to Article
259 of the Labor Code, as amended, but even after such filing its role in the certification
process ceases and becomes merely a bystander.41 The employer clearly lacks the
personality to dispute the election and has no right to interfere at all therein. 42 This is so
since any uncalled-for concern on the part of the employer may give rise to the suspicion
that it is batting for a company union.43 Indeed, the demand of the law and policy for an
employer to take a strict, hands-off stance in certification elections is based on the
rationale that the employees’ bargaining representative should be chosen free from any
extraneous influence of the management; that, to be effective, the bargaining
representative must owe its loyalty to the employees alone and to no other.44
Now, going back to petitioner’s contention, the issue of whether a petition for certification
election is dismissible on the ground that the labor organization’s membership allegedly
consists of supervisory and rank-and-file employees is actually not a novel one. In the 2008
case of Republic v. Kawashima Textile Mfg., Philippines, Inc.,45wherein the employer-
company moved to dismiss the petition for certification election on the ground inter alia
that the union membership is a mixture of rank-and-file and supervisory employees, this
26
Court had conscientiously discussed the applicability of Toyota and Dunlop in the context
of R.A. No. 6715 and D.O. No. 9, viz.:
It was in R.A. No. 875, under Section 3, that such questioned mingling was first prohibited,
to wit:
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)
Nothing in R.A. No. 875, however, tells of how the questioned mingling can affect the
legitimacy of the labor organization. Under Section 15, the only instance when a labor
organization loses its legitimacy is when it violates its duty to bargain collectively; but
there is no word on whether such mingling would also result in loss of legitimacy. Thus,
when the issue of whether the membership of two supervisory employees impairs the
legitimacy of a rank-and-file labor organization came before the Court En Banc in Lopez v.
Chronicle Publication Employees Association, the majority pronounced:
It may be observed that nothing is said of the effect of such ineligibility upon the union
itself or on the status of the other qualified members thereof should such prohibition be
disregarded. Considering that the law is specific where it intends to divest a legitimate
labor union of any of the rights and privileges granted to it by law, the absence of any
provision on the effect of the disqualification of one of its organizers upon the legality of
the union, may be construed to confine the effect of such ineligibility only upon the
membership of the supervisor. In other words, the invalidity of membership of one of the
organizers does not make the union illegal, where the requirements of the law for the
organization thereof are, nevertheless, satisfied and met. (Emphasis supplied)
Then the Labor Code was enacted in 1974 without reproducing Sec. 3 of R.A. No. 875. The
provision in the Labor Code closest to Sec. 3 is Article 290, which is deafeningly silent on
the prohibition against supervisory employees mingling with rank-and-file employees in
one labor organization. Even the Omnibus Rules Implementing Book V of the Labor Code
(Omnibus Rules) merely provides in Section 11, Rule II, thus:
Sec. 11. Supervisory unions and unions of security guards to cease operation. - All existing
supervisory unions and unions of security guards shall, upon the effectivity of the Code,
cease to operate as such and their registration certificates shall be deemed automatically
cancelled. However, existing collective agreements with such unions, the life of which
extends beyond the date of effectivity of the Code shall be respected until their expiry
date insofar as the economic benefits granted therein are concerned.
Members of supervisory unions who do not fall within the definition of managerial
employees shall become eligible to join or assist the rank and file organization. The
determination of who are managerial employees and who are not shall be the subject of
negotiation between representatives of supervisory union and the employer. If no
agreement s reached between the parties, either or both of them may bring the issue to
the nearest Regional Office for determination. (Emphasis supplied)
The obvious repeal of the last clause of Sec. 3, R.A. No. 875 prompted the Court to declare
in Bulletin v. Sanchez that supervisory employees who do not fall under the category of
managerial employees may join or assist in the formation of a labor organization for rank-
and-file employees, but they may not form their own labor organization.
While amending certain provisions of Book V of the Labor Code, E.O. No. 111 and its
implementing rules continued to recognize the right of supervisory employees, who do not
fall under the category of managerial employees, to join a rank- and-file labor
organization.
Effective 1989, R.A. No. 6715 restored the prohibition against the questioned mingling in
one labor organization, viz.:
Sec. 18. Article 245 of the same Code, as amended, is hereby further amended to read as
follows:
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 (Emphasis supplied)
Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying the exact effect any
violation of the prohibition would bring about on the legitimacy of a labor organization.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus
Rules) which supplied the deficiency by introducing the following amendment to Rule II
(Registration of Unions):
Sec. 1. Who may join unions. - x x x Supervisory employees and security guards 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; Provided, that those
supervisory employees who are included in an existing rank-and-file bargaining unit, upon
the effectivity of Republic Act No. 6715, shall remain in that unit x x x. (Emphasis supplied)
and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz.;
Sec. 1. Where to file. - A petition for certification election may be filed with the Regional
Office which has jurisdiction over the principal office of the employer. The petition shall be
in writing and under oath.
Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested
to bargain collectively, may file the petition.
The petition, when filed by a legitimate labor organization, shall contain, among others:
27
xxxx
(c) description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require; and provided further, that the appropriate bargaining
unit of the rank-and-file employees shall not include supervisory employees and/or
security guards. (Emphasis supplied)
By that provision, any questioned mingling will prevent an otherwise legitimate and duly
registered labor organization from exercising its right to file a petition for certification
election.
Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the Court,
citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held:
Clearly, based on this provision, a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It cannot, for any guise or purpose,
be a legitimate labor organization. Not being one, an organization which carries a mixture
of rank-and-file and supervisory employees cannot possess any of the rights of a legitimate
labor organization, including the right to file a petition for certification election for the
purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting
of an order allowing a certification election, to inquire into the composition of any labor
organization whenever the status of the labor organization is challenged on the basis of
Article 245 of the Labor Code.
xxxx
In the case at bar, as respondent union's membership list contains the names of at least
twenty-seven (27) supervisory employees in Level Five positions, the union could not, prior
to purging itself of its supervisory employee members, attain the status of a legitimate
labor organization. Not being one, it cannot possess the requisite personality to file a
petition for certification election. (Emphasis supplied)
In Dunlop, in which the labor organization that filed a petition for certification election was
one for supervisory employees, but in which the membership included rank-and-file
employees, the Court reiterated that such labor organization had no legal right to file a
certification election to represent a bargaining unit composed of supervisors for as long as
it counted rank-and-file employees among its members.
It should be emphasized that the petitions for certification election involved in Toyota and
Dunlop were filed on November 26, 1992 and September 15, 1995, respectively; hence,
the 1989 Rules was applied in both cases.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by
Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the
requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules - that the petition for
certification election indicate that the bargaining unit of rank-and-file employees has not
been mingled with supervisory employees - was removed. Instead, what the 1997
Amended Omnibus Rules requires is a plain description of the bargaining unit, thus:
Rule XI
Certification Elections
xxxx
Sec. 4. Forms and contents of petition. - The petition shall be in writing and under oath and
shall contain, among others, the following: x x x (c) The description of the bargaining unit."
In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of the
1997 Amended Omnibus Rules, although the specific provision involved therein was only
Sec. 1, Rule VI, to wit:
Sec. 1. Chartering and creation of a local/chapter.- A duly registered federation or national
union may directly create a local/chapter by submitting to the Regional Office or to the
Bureau two (2) copies of the following: a) a charter certificate issued by the federation or
national union indicating the creation or establishment of the local/chapter; (b) the names
of the local/chapter's officers, their addresses, and the principal office of the local/chapter;
and (c) the local/ chapter's constitution and by-laws; provided that where the
local/chapter's constitution and by-laws is the same as that of the federation or national
union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary or
the Treasurer of the local/chapter and attested to by its President.
which does not require that, for its creation and registration, a local or chapter submit a
list of its members.
Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees
Union-PTGWO in which the core issue was whether mingling affects the legitimacy of a
labor organization and its right to file a petition for certification election. This time, given
the altered legal milieu, the Court abandoned the view in Toyota and Dunlop and reverted
to its pronouncement in Lopez that while there is a prohibition against the mingling of
supervisory and rank-and-file employees in one labor organization, the Labor Code does
not provide for the effects thereof. Thus, the Court held that after a labor organization has
been registered, it may exercise all the rights and privileges of a legitimate labor
organization. Any mingling between supervisory and rank-and-file employees in its
membership cannot affect its legitimacy for that is not among the grounds for cancellation
of its registration, unless such mingling was brought about by misrepresentation, false
statement or fraud under Article 239 of the Labor Code.
In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products
Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-and-File Union-
FFW, the Court explained that since the 1997 Amended Omnibus Rules does not require a
local or chapter to provide a list of its members, it would be improper for the DOLE to deny
recognition to said local or chapter on account of any question pertaining to its individual
members.
More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which
involved a petition for cancellation of union registration filed by the employer in 1999
28
against a rank-and-file labor organization on the ground of mixed membership: the Court
therein reiterated its ruling in Tagaytay Highlands that 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.
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as
interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines, had
already set the tone for it. Toyota and Dunlop no longer hold sway in the present altered
state of the law and the rules.46
When a similar issue confronted this Court close to three years later, the above ruling was
substantially quoted in Samahang Manggagawa sa Charter Chemical Solidarity of Unions in
the Philippines for Empowerment and Reforms (SMCC-Super) v. Charter Chemical and
Coating Corporation.47 In unequivocal terms, We reiterated that the alleged inclusionof
supervisory employees in a labor organization seeking to represent the bargaining unit of
rank-and-file employees does not divest it of its status as a legitimate labor organization.48
Indeed, Toyota and Dunlop no longer hold true under the law and rules governing the
instant case. The petitions for certification election involved in Toyota and Dunlop were
filed on November 26, 1992 and September 15, 1995, respectively; hence, the 1989 Rules
and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus Rules) was applied.
In contrast, D.O. No. 9 is applicable in the petition for certification election of private
respondent as it was filed on May 31, 2002.
Following the doctrine laid down in Kawashima and SMCC-Super, it must be stressed that
petitioner cannot collaterally attack the legitimacy of private respondent by praying for the
dismissal of the petition for certification election:
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 amendments to the Labor Code and its implementing rules have buttressed that policy
even more.49
Further, the determination of whether union membership comprises managerial and/or
supervisory employees is a factual issue that is best left for resolution in the inclusion-
exclusion proceedings, which has not yet happened in this case so still premature to pass
upon. We could only emphasize the rule that factual findings of labor officials, who are
deemed to have acquired expertise in matters within their jurisdiction, are generally
accorded not only with respect but even finality by the courts when supported by
substantial evidence.50 Also, the jurisdiction of this Court in cases brought before it from
the CA via Rule 45 is generally limited to reviewing errors of law or jurisdiction. The
findings of fact of the CA are conclusive and binding. Except in certain recognized
instances,51We do not entertain factual issues as it is not Our function to analyze or weigh
evidence all over again; the evaluation of facts is best left to the lower courts and
administrative agencies/quasi-judicial bodies which are better equipped for the task.52
Turning now to the second and last issue, petitioner argues that, in view of the improper
mixture of teaching and non-teaching personnel in private respondent due to the absence
of mutuality of interest among its members, the petition for certification election should
have been dismissed on the ground that private respondent is not qualified to file such
petition for its failure to qualify as a legitimate labor organization, the basic qualification of
which is the representation of an appropriate bargaining unit.
We disagree.
The concepts of a union and of a legitimate labor organization are different from, but
related to, the concept of a bargaining unit:
Article 212(g) of the Labor Code defines a labor organization as "any union or association
of employees which exists in whole or in part for the purpose of collective bargaining or of
dealing with employers concerning terms and conditions of employment." Upon
compliance with all the documentary requirements, the Regional Office or Bureau shall
issue in favor of the applicant labor organization a certificate indicating that it is included
in the roster of legitimate labor organizations. Any applicant labor organization shall
acquire legal personality and shall be entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the certificate of registration.53
In case of alleged inclusion of disqualified employees in a union, the proper procedure for
an employer like petitioner is to directly file a petition for cancellation of the union’s
certificate of registration due to misrepresentation, false statement or fraud under the
circumstances enumerated in Article 239 of the Labor Code, as amended.54 To reiterate,
private respondent, having been validly issued a certificate of registration, should be
considered as having acquired juridical personality which may not be attacked collaterally.
On the other hand, a bargaining unit has been 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 interests of all the employees, consistent with equity to the employer, indicated
to be best suited to serve reciprocal rights and duties of the parties under the collective
bargaining provisions of the law."55 In determining the proper collective bargaining unit
and what unit would be appropriate to be the collective bargaining agency, the Court, in
the seminal case of Democratic Labor Association v. Cebu Stevedoring Company,
Inc.,56 mentioned several factors that should be considered, to wit: (1) will of employees
(Globe Doctrine); (2) affinity and unity of employees' interest, such as substantial similarity
of work and duties, or similarity of compensation and working conditions; (3) prior
collective bargaining history; and (4) employment status, such as temporary, seasonal and
probationary employees. We stressed, however, that the test of the grouping is
community or mutuality of interest, because "the basic test of an asserted bargaining
29
unit's acceptability is whether or not it is fundamentally the combination which will best
assure to all employees the exercise of their collective bargaining rights."57
As the SOLE correctly observed, petitioner failed to comprehend the full import of Our
ruling in U.P. It suffices to quote with approval the apt disposition of the SOLE when she
denied petitioner’s motion for reconsideration:
Petitioner likewise claimed that we erred in interpreting the decision of the Supreme Court
in U.P. v. Ferrer-Calleja, supra. According to petitioner, the Supreme Court stated that the
non-academic rank-andfile employees of the University of the Philippines shall constitute a
bargaining unit to the exclusion of the academic employees of the institution. Hence,
petitioner argues, it sought the creation of separate bargaining units, namely: (1)
petitioner’s teaching personnel to the exclusion of non-teaching personnel; and (2)
petitioner’s non-teaching personnel to the exclusion of teaching personnel.
Petitioner appears to have confused the concepts of membership in a bargaining unit and
membership in a union. In emphasizing the phrase "to the exclusion of academic
employees" stated in U.P. v. Ferrer-Calleja, petitioner believed that the petitioning union
could not admit academic employees of the university to its membership. But such was
not the intention of the Supreme Court.
A bargaining unit is a group of employees sought to be represented by a petitioning union.
Such employees need not be members of a union seeking the conduct of a certification
election. A union certified as an exclusive bargaining agent represents not only its
members but also other employees who are not union members. As pointed out in our
assailed Decision, there were two contending unions in the U.P. case, namely, the
Organization of Non-Academic Personnel of U.P. (ONAPUP) and the All U.P. Worker’s
Union composed of both U.P. academic and non-academic personnel. ONAPUP sought the
conduct of a certification election among the rank-and-file non-academic personnel only,
while the All U.P. Workers Union intended to cover all U.P. rank-and-file employees,
involving both academic and non-academic personnel.
The Supreme Court ordered the "non-academic rank-and-file employees of U.P. to
constitute a bargaining unit to the exclusion of the academic employees of the institution",
but did not order them to organize a separate labor organization. In the U.P. case, the
Supreme Court did not dismiss the petition and affirmed the order for the conduct of a
certification election among the non-academic personnel of U.P., without prejudice to the
right of the academic personnel to constitute a separate bargaining unit for themselves
and for the All U.P. Workers Union to institute a petition for certification election.
In the same manner, the teaching and non-teaching personnel of petitioner school must
form separate bargaining units.1âwphi1 Thus, the order for the conduct of two separate
certification elections, one involving teaching personnel and the other involving non-
teaching personnel. It should be stressed that in the subject petition, private respondent
union sought the conduct of a certification election among all the rank-and-file personnel
of petitioner school. Since the decision of the Supreme Court in the U.P. case prohibits us
from commingling teaching and non-teaching personnel in one bargaining unit, they have
to be separated into two separate bargaining units with two separate certification
elections to determine whether the employees in the respective bargaining units desired
to be represented by private respondent. In the U.P. case, only one certification election
among the non-academic personnel was ordered, because ONAPUP sought to represent
that bargaining unit only. No petition for certification election among the academic
personnel was instituted by All U.P. Workers Union in the said case; thus, no certification
election pertaining to its intended bargaining unit was ordered by the Court.58
Indeed, the purpose of a certification election is precisely to ascertain the majority of the
employees’ choice of an appropriate bargaining unit – to be or not to be represented by a
labor organization and, if in the affirmative case, by which one. 59
At this point, it is not amiss to stress once more that, as a rule, only questions of law may
be raised in a Rule 45 petition. In Montoya v. Transmed Manila Corporation,60 the Court
discussed the particular parameters of a Rule 45 appeal from the CA’s Rule 65 decision on
a labor case, as follows:
x x x In a Rule 45 review, we consider the correctness of the assailed CA decision, in
contrast with the review for jurisdictional error that we undertake under Rule 65.
Furthermore, Rule 45 limits us to the review of questions of law raised against the assailed
CA decision. In ruling for legal correctness, we have to view the CA decision in the same
context that the petition for certiorari it ruled upon was presented to it; we have to
examine the CA decision from the prism of whether it correctly determined the presence
or absence of grave abuse of discretion in the NLRC decision before it, not on the basis of
whether the NLRC decision on the merits of the case was correct. In other words, we have
to be keenly aware that the CA undertook a Rule 65 review, not a review on appeal, of the
NLRC decision challenged before it. This is the approach that should be basic in a Rule 45
review of a CA ruling in a labor case. In question form, the question to ask is: Did the CA
correctly determine whether the NLRC committed grave abuse of discretion in ruling on
the case?61
Our review is, therefore, limited to the determination of whether the CA correctly resolved
the presence or absence of grave abuse of discretion in the decision of the SOLE, not on
the basis of whether the latter's decision on the merits of the case was strictly correct.
Whether the CA committed grave abuse of discretion is not what is ruled upon but
whether it correctly determined the existence or want of grave abuse of discretion on the
part of the SOLE.
WHEREFORE, the pet1t1on is DENIED. The April 18, 2007 Decision and July 31, 2007,
Resolution of the Court of Appeals in CA-G.R. SP No. 76175, which affirmed the December
27, 2002 Decision of the Secretary of the Department of Labor and Employment that set
aside the
August 10, 2002 Decision of the Med-Arbiter denying private respondent's petition for
certification election are hereby AFFIRMED.
SO ORDERED.
30
7.
G.R. No. 193798
COCA-COLA BOTTLERS PHILIPPINES, INC., Petitioner,
vs.
ILOCOS PROFESSIONAL AND TECHNICAL EMPLOYESS UNION (IPTEU), Respondent.
DECISION
PERALTA, J.:
This petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure (Rules) seeks to reverse and set aside the March 17, 2010 Decision1 and
September 16, 2010 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 104043,
which affirmed the May 6, 2008 Resolution3 of the Secretary of Labor and
Employment (SOLE) dismissing petitioner's appeal that assailed the Decision (On the
Challenged Voters )4 and Proclamation of the Winner,5 both dated October 22, 2007, of
the Mediator-Arbiter.
Petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a domestic corporation duly
organized and operating under the Philippine laws. It is primarily engaged in the beverage
business, which includes the manufacture of carbonated soft drinks. On the other hand,
respondent Ilocos Professional and Technical Employees Union (IPTEU) is a registered
independent labor organization with address at CCBPI Ilocos Plant in Barangay Catuguing,
San Nicolas, Ilocos Norte.
On July 9, 2007, IPTEU filed a verified Petition6 for certification election seeking to
represent a bargaining unit consisting of approximately twenty-two (22) rank-and-file
professional and technical employees of CCBPI Ilocos Norte Plant. CCBPI prayed for the
denial and dismissal of the petition, arguing that the Sales Logistics Coordinator and
Maintenance Foreman are supervisory employees, while the eight (8) Financial Analysts,
five (5) Quality Assurance Specialists, Maintenance Manager Secretary, Trade Promotions
and Merchandising Assistant (TPMA), Trade Asset Controller and Maintenance Coordinator
(TACMC), Sales Information Analyst (SIA), Sales Logistics Assistant, Product Supply
Coordinator, Buyer, Inventory Planner, and Inventory Analyst are confidential
employees;7 hence, ineligible for inclusion as members of IPTEU. It also sought to cancel
and revoke the registration of IPTEU for failure to comply with the twenty percent (20%)
membership requirement based on all the supposed employees in the bargaining unit it
seeks to operate.
A preliminary hearing of the petition was scheduled and held on July 19, 2007. The
possibility of voluntary recognition or consent election was not acceded to by CCBPI.
Convinced that the union members are rank-and-file employees and not occupying
positions that are supervisory or confidential in nature, Mediator-Arbiter Florence Marie A.
Gacad-Ulep granted IPTEU’S petition. The dispositive portion of the August 23, 2007
Decision8 ordered:
WHEREFORE, premises considered, the Petition is GRANTED. The bargaining unit shall be
all the rank-and-file Exempt (Professional and Technical) Workers of CCBPI who are now
excluded from the existing bargaining units of the Coca-Cola Bottlers Philippines, Inc. –
Ilocos Plant. The choices in the election shall be:
ILOCOS PROFESSIONAL AND TECHNICAL
[EMPLOYEES] UNION (IPTEU)
No Union
The Labor Relations Division of this office is hereby directed to conduct the Pre-election
Conference(s) within the periods set by law. The CCBPI is hereby ordered to submit, not
later than the date of the first pre-election conference, its Certified List of Exempt
(Professional and Technical) rankand- file workers, or in its absence, the employee payrolls
from May to June 2007. In case Management fails or refuses to submit the same, the
Union’s list shall be allowed, as provided for under the Rules.
SO ORDERED.9
On September 3, 2007, CCBPI filed an appeal before the SOLE.10 The Mediator-Arbiter
acknowledged having received the Memorandum of Appeal but informed that, pursuant
to the Implementing Rules and Regulations of the Labor Code, as amended, "[the] order
granting the conduct of a certification election in an unorganized establishment shall
not be subject to appeal. Any issue arising therefrom may be raised by means of protest on
the conduct and results of the certification election."11 On September 5, 2007, CCBPI then
filed an Urgent Motion to Suspend Proceedings,12 alleging that the notice issued by the
Assistant Regional Director for the conduct of pre-election conference is premature since
the decision of the Mediator-Arbiter is not yet final and executory and that the Mediator-
Arbiter already lost jurisdiction over the case with the filing of an appeal. Two days after,
CCBPI filed a Manifestation,13 stating that its participation in the pre-election conference,
certification election, and other proceedings is not a waiver, withdrawal or abandonment
of the pending appeal and motion to suspend proceedings.
In the Pre-election Conference held on September 10, 2007, CCBPI and IPTEU mutually
agreed to conduct the certification election on September 21, 2007. On election day, only
sixteen (16) of the twenty-two (22) employees in the IPTEU list voted. However, no votes
were canvassed. CCBPI filed and registered a Protest14 questioning the conduct and
mechanics of the election and a Challenge to Votes15 on the ground that the voters are
supervisory and confidential employees.
By agreement, the parties met on September 26, 2007 for the opening and counting of the
challenged votes. On said date, CCBPI filed a motion for inhibition, which the Mediator-
Arbiter verbally denied on the grounds that it was not verified and would cause undue
delay on the proceedings as there are no other Mediators-Arbiters in the Region. The
parties were informed that their agreement to have the ballots opened could not bind the
Mediator-Arbiter. Instead, they were directed to submit additional evidence that would
aid in the resolution of the challenged votes.
31
On October 22, 2007, the Mediator-Arbiter denied CCBPI’s challenge to the 16 votes. She
found that the voters are rank-and-file employees holding positions that are not
confidential in nature, and who are not, or used to be, members of Ilocos Monthlies Union
(IMU) due to the reclassification of their positions by CCBPI and have been excluded from
the CBA entered into by IMU and CCBPI from 1997 to 2005. Consequently, the challenged
votes were opened and canvassed. After garnering 14 out of the 16 votes cast, IPTEU was
proclaimed as the sole and exclusive bargaining agent of the rank-and-file exempt workers
in CCBPI Ilocos Norte Plant.
CCBPI elevated the case to the SOLE, raising the following grounds:
1. The Honorable public [appellee] erred in disregarding the fact that there is already an
existing bargaining representative of the rank-andfile professional and technical
employees at the Ilocos Plant of appellant, namely, the Ilocos Monthlies Union (IMU) [to]
which the sixteen (16) challenged voters should be members as long as they are not
disqualified by law [for] being confidential employees.
2. The Honorable public appellee erred in denying the challenge to the sixteen (16) actual
voters, and subsequently declaring that private appellee is the sole and exclusive
[bargaining] agent of the rank-andfile exempt employees.
3. The Honorable public appellee erred in disregarding the fact that there is a pending
earlier appeal filed by appellant with the Honorable Secretary of Labor, and so the
Regional Office No. 1 of the Department of Labor and Employment lost jurisdiction over
the case including the certification election conducted by the Election Officer.
4. The Honorable public appellee erred in disregarding the fact that there is a pending
Motion to Suspend Proceedings filed by appellant with the Department of Labor and
Employment, Regional Office No. 1, San Fernando City, La Union[,] due to the pendency of
its appeal with the Honorable Secretary of Labor, and the same is not yet resolved.
5. The Honorable public appellee erred in disregarding the fact that there is a need to
suspend the conduct of election and other proceedings to await for the final result of the
earlier appeal made by herein appellant.
6. The Honorable public appellee erred in not declaring the certification election on
September 21, 2007 null and void.16
On May 6, 2008, the appeal of CCBPI was denied. The SOLE held that, as shown by the
certification of the IMU President and the CBAs forged between CCBPI and IMU from 1997
to 2007, the 22 employees sought to be represented by IPTEU are not part of IMU and are
excluded from its CBA coverage; that even if the 16 challenged voters may have access to
information which are confidential from the business standpoint, the exercise of their right
to self-organization could not be defeated because their common functions do not show
that there exist a confidential relationship within the realm of labor relations; and that the
order granting the certification election and sustaining its validity despite the pendency of
appeal and motion to suspend is proper in view of Section 17, Rule VIII of Department
Order No. 40, Series of 2003, which states that the order granting the conduct of a
certification election in an unorganized establishment is not subject to appeal and that any
issue arising therefrom may be raised by means of protest on the conduct and results of
the certification election.
Confronted with an adverse ruling, CCBPI filed before the CA a petition for certiorari with
prayer for temporary restraining order and writ of preliminary injunction.17 It reiterated
that:
a. There is already an existing and incumbent sole and exclusive bargaining agent in the
bargaining unit which respondent IPTEU seeks to represent, namely, the Ilocos Monthlies
Union (IMU). The bargaining unit which IPTEU seeks to represent is rank-and-file
professional and technical employees which the incumbent union, the IMU, presently
represents.
b. Respondent IPTEU never sought to represent the alleged rank-and-file Exempt
employees because it is clearly indicated in its petition for certification election that it
seeks to represent rank-and-file professional and technical employees only. Its
Constitution and bylaws includes solely and only professional and technical employees of
CCBPI-ILOCOS PLANT to its membership, and nothing more.
c. The sixteen (16) voters are not eligible for Union membership because they are
confidential employees occupying confidential positions.
d. The bargaining unit is organized due to the presence of the IMU, the sole and exclusive
bargaining unit of the rank-and-file professional and technical employees at the Ilocos
Plant of petitioner, and so the appeal of the earlier decision of the respondent Med-
Arbiter dated August 23, 2007 is in order, proper, valid and should have been given due
course in accordance with Sec. 17, Rule [VIII] of the Rules Implementing Book V of the
Labor Code.
e. The earlier appeal x x x together with the motion for suspension of the proceedings x x x
filed by petitioner on September 5, 2007 remain unresolved to date, and there is a need to
await for their final resolution before any further action including the certification election
could validly proceed.18
On March 17, 2010, the Court of Appeals denied the petition. CCBPI filed a motion for
reconsideration,19 which was also denied in the September 16, 2010 Resolution; hence,
this petition.
CCBPI contends that the CA Decision and Resolution are based on misapprehension of
facts relative to the proceedings before the Mediator- Arbiter and that its pronouncement
consists of inferences which are manifestly mistaken and without factual/legal basis. It is
argued that a petition for certiorari was filed before the CA because the orders of the SOLE
and Mediator-Arbiter were issued in patent disregard of established facts and existing
jurisprudence, thus, tainted with grave abuse of discretion
–
1) In considering respondent IPTEU as the sole and exclusive bargaining agent of the
purported rank-and-file exempt employees in the Ilocos Plant; 2) In not declaring the
32
certification election held on September 21, 2007 improper and void; 3) In disregarding
the fact that the Ilocos Monthlies Union (IMU) is the existing sole bargaining agent of the
rank-and-[file] professional and technical employees at the Ilocos Plant, to which the
sixteen (16) challenged voters should be members, if allowed by law[;] and 4) [In] ruling
that the concerned employees should not be prohibited by joining any union. 20
The petition is unmeritorious.
As proven by the certification of the IMU President as well as the CBAs executed between
IMU and CCBPI, the 22 employees sought to be represented by IPTEU are not IMU
members and are not included in the CBAs due to reclassification of their positions. If
these documents were false, the IMU should have manifested its vigorous
opposition.1âwphi1 In fact, the Mediator-Arbiter noted:
The most tenacious resistance to the granting of the Petition as well as the holding of the
CE has been Management. On the other hand, the existing unions at CCBPI, especially the
IMU of which most of the IPTEU members were once part (until they were considered
outside the ambit of its existing bargaining unit) never once opposed the Petition and the
Certification election, whether verbally or in written Opposition.
Between Management and IMU, it is the latter which has more to lose, as the creation of a
separate bargaining unit would reduce the scope of IMU’s bargaining unit. Yet through all
these proceedings, we take note of the substantial moral support that has been extended
to the Petitioner by the other Unions of CCBPI, so much so that, until objected to by
Management, they were even willing to be present during the Certification Election of 21
September 2007.21
As to whether the 16 voters sought to be excluded from the appropriate bargaining unit
are confidential employees,22 such query is a question of fact, which is not a proper issue
in a petition for review under Rule 45 of the Rules.23 This holds more true in the present
case in view of the consistent findings of the Mediator-Arbiter, the SOLE, and the CA.
We reiterate 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 Secretary) and the appellate court on the matter coincide, as in this case at bar. The
Rule limits that function of the Court to the review or revision of errors of law and not to a
second analysis of the evidence. x x x Thus, absent any showing of whimsical or capricious
exercise of judgment, and unless lack of any basis for the conclusions made by the
appellate court be amply demonstrated, we may not disturb such factual findings.24
The determination of factual issues is vested in the Mediator-Arbiter and the Department
of Labor and Employment. Pursuant to the doctrine of primary jurisdiction, the Court
should refrain from resolving such controversies unless the case falls under recognized and
well-established exceptions. The doctrine of primary jurisdiction does not warrant a court
to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is
initially lodged with an administrative body of special competence.25
In this case, organizational charts, detailed job descriptions, and training programs were
presented by CCBPI before the Mediator-Arbiter, the SOLE, and the CA. Despite these, the
Mediator-Arbiter ruled that employees who encounter or handle trade secrets and
financial information are not automatically classified as confidential employees. It was
admitted that the subject employees encounter and handle financial as well as physical
production data and other information which are considered vital and important from the
business operations’ standpoint. Nevertheless, it was opined that such information is not
the kind of information that is relevant to collective bargaining negotiations and
settlement of grievances as would classify them as confidential employees. The SOLE,
which the CA affirmed, likewise held that the questioned voters do not have access to
confidential labor relations information.
We defer to the findings of fact of the Mediator-Arbiter, the SOLE, and the CA. Certainly,
access to vital labor information is the imperative consideration. An employee must assist
or act in a confidential capacity and obtain confidential information relating to labor
relations policies. Exposure to internal business operations of the company is not per se a
ground for the exclusion in the bargaining unit.26
The Court sees no need to belabor the effects of the unresolved notice of appeal and
motion to suspend proceedings filed by CCBPI in September 2007. Suffice it to say that the
substantial merits of the issues raised in said pleadings are the same as what were already
brought to and passed upon by the Mediator-Arbiter, the SOLE, and the CA.
WHEREFORE, premises considered, the petition is DENIED. The March 17, 2010 Decision
and September 16, 2010 Resolution of the Court of Appeals in CA-G.R. SP No. 104043,
which affirmed the May 6, 2008 Resolution of the Secretary of Labor and Employment,
dismissing petitioner's appeal that assailed the Decision (On the Challenged Voters) and
Proclamation of the Winner, both dated October 22, 2007, of the Mediator-Arbiter, are
hereby AFFIRMED.
SO ORDERED.
33
8.
G.R. No. 196276 June 4, 2014
TAKATA (PHILIPPINES) CORPORATION, Petitioner,
vs.
BUREAU OF LABOR RELATIONS and SAMAHANG LAKAS MANGGAGAWA NG TAKATA
(SALAMAT), Respondents.
DECISION
PERALTA, J.:
Before us is a petition for review on certiorari filed by petitioner TAKATA Philippines
Corporation assailing the Decision1 dated December 22, 2010 and the Resolution2 dated
March 28, 2011 of the Court of Appeals in CA-G.R. SP No. 112406.
On July 7, 2009, petitioner filed with the Department of Labor and Employment (DOLE)
Regional Office a Petition3for Cancellation of the Certificate of Union Registration of
Respondent Samahang Lakas Manggagawa ng Takata (SALAMA1) on the ground that the
latter is guilty of misrepresentation, false statement and fraud with respect to the number
of those who participated in the organizational meeting, the adoption and ratification of
its Constitution and By-Laws, and in the election of its officers. It contended that in the
May 1, 2009 organizational meeting of respondent, only 68 attendees signed the
attendance sheet, and which number comprised only 17% of the total number of the 396
regular rank- and-file employees which respondent sought to represent, and hence,
respondent failed to comply with the 20% minimum membership requirement. Petitioner
insisted that the document "Pangalan ng mga Kasapi ng Unyon" bore no signatures of the
alleged 119 union members; and that employees were not given sufficient information on
the documents they signed; that the document "Sama-Samang Pahayag ng Pagsapi" was
not submitted at the time of the filing of respondent's application for union registration;
that the 119 union members were actually only 117; and, that the total number of
petitioner's employees as of May 1, 2009 was 470, and not 396 as respondent claimed.4
Respondent denied the charge and claimed that the 119 union members were more than
the 20% requirement for union registration. The document "Sama-Samang Pahayag ng
Pagsapi sa Unyon" which it presented in its petition for certification election5 supported
their claim of 119 members. Respondent also contended that petitioner was estopped
from assailing its legal personality as it agreed to a certification election and actively
participated in the pre-election conference of the certification election
proceedings.6 Respondent argued that the union members were informed of the contents
of the documents they signed and that the 68 attendees to the organizational meeting
constituted more than 50% of the total union membership, hence, a quo rumexisted for
the conduct of the said meeting.7
On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez, Sr., issued a
Decision8 granting the petition for cancellation of respondent's certificate of registration,
the dispositive portion of which reads:
WHEREFORE, from the foregoing considerations, the petition is hereby GRANTED.
Accordingly, the respondent Union Certificate of Registration No. RO400A-2009-05-01-UR-
LAG, dated May 19, 2009 is hereby REVOCKED (sic) and /or CANCELLED pursuant to
paragraph (a) & (b), Section 3, Rule XIV of Department Order No. 40-03 and the Samahang
Lakas ng Manggagawa ng TAKATA (SALAMAT) is hereby delisted from the roll of legitimate
labor organization of this office.9
In revoking respondent's certificate of registration, the Regional Director found that the 68
employees who attended the organizational meeting was obviously less than 20% of the
total number of 396 regular rank-and-file employees which respondent sought to
represent, hence, short of the union registration requirement; that the attendance sheet
which contained the signatures and names of the union members totalling to 68
contradicted the list of names stated in the document denominated as "Pangalan ng mga
Kasaping Unyon." The document "Sama-Samang Pahayag ng Pagsapi" was not attached to
the application for registration as it was only submitted in the petition for certification
election filed by respondent at a later date. The Regional Director also found that the
proceedings in the cancellation of registration and certification elections are two different
and entirely separate and independent proceedings which were not dependent on each
other.
Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP) Paralegal
Officer, Domingo P. Mole, filed a Notice and Memorandum of Appeal10 with the Bureau of
Labor Relations (BLR). However, on September 28,2009, respondent, through its counsels,
Attys.
Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal Memorandum with
Formal Entry of Appearance11 to the Office of the DOLE Secretary, which the latter
eventually referred to the BLR. Petitioner filed an Opposition to the Appeals12 praying for
their dismissal on the ground of forum shopping as respondent filed two separate appeals
in two separate venues; and for failing to avail of the correct remedy within the period;
and that the certificate of registration was tainted with fraud, misrepresentation and
falsification.
In its Answer,13 respondent claimed that there was no forum shopping as BMP's Paralegal
Officer was no longer authorized to file an appeal on behalf of respondent as the latter's
link with BMP was already terminated and only the Union President was authorized to file
the appeal; and that it complied with Department Order No. 40-03.
On December 9, 2009, after considering respondent's Appeal Memorandum with Formal
Entry of Appearance and petitioner's Answer, the BLR rendered its Decision14 reversing the
Order of the Regional Director, the decretal portion of which reads:
WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional Director Ricardo S.
Martinez, Sr., dated 27 August 2009, is hereby REVERSEDand SET ASIDE.
Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT) shall remain in the
roster of labor organizations.15
34
In reversing, the BLR found that petitioner failed to prove that respondent deliberately and
maliciously misrepresented the number of rank-and-file employees. It pointed out
petitioner's basis for the alleged noncompliance with the minimum membership
requirement for registration was the attendance of 68 members to the May 1, 2009
organizational meeting supposedly comprising only 17% of the total 396 regular rank-and-
file employees. However, the BLR found that the list of employees who participated in the
organizational meeting was a separate and distinct requirement from the list of the names
of members comprising at least 20% of the employees in the bargaining unit; and that
there was no requirement for signatures opposite the names of the union members; and
there was no evidence showing that the employees assailed their inclusion in the list of
union members.
Petitioner filed a motion for reconsideration, which was denied by the BLR in a
Resolution16 dated January 8, 2010.
Undaunted, petitioner went to the CA via a petition for certiorari under Rule 65.
After the submission of the parties' respective pleadings, the case was submitted for
decision.
On December 22, 2010, the CA rendered its assailed decision which denied the petition
and affirmed the decision of the BLR. Petitioner's motion for reconsideration was denied in
a Resolution dated March 29, 2011.
Hence this petition for review filed by petitioner raising the following issues, to wit:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR IN
AFFIRMING THE DECISION OF PUBLIC RESPONDENT BLR AND NOT FINDING ANY
VIOLATION BY SAMAHANG LAKAS MANGGAGAWA SA TAKATA (SALAMAT) OF THE RULE
ON FORUM SHOPPING IN THE FILING OF TWO VERIFIED APPEALS FOR AND ITS BEHALF.
BOTH OF THE APPEALS SHOULD HAVE BEEN DISMISSED OUTRIGHT BY PUBLIC
RESPONDENT BLR, ON GROUND OF FORUM SHOPPING.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE
APPLICATION FOR REGISTRATION OF SAMAHANG LAKAS MANGGAGAWA SA TAKATA
(SALAMAT) WAS COMPLIANT WITH THE LAW. CONSIDERING THE CIRCUMSTANCES
OBTAINING IN THE REGISTRATION OF SALAMAT, IT IS CLEAR THAT THE SAME IS TAINTED
WITH FRAUD, MISREPRESENTATION AND FALSIFICATION. SALAMAT DID NOT POSSESS THE
REQUIREDNUMBER OF MEMBERS AT THE TIME OF FILING OF ITS APPLICATION FOR
REGISTRATION, HENCE, IT SHOULD BE HELD GUILTY OF MISREPRESENTATION, AND FALSE
STATEMENTS AND FRAUD IN CONNECTION THEREWITH.17
Anent the first issue, petitioner contends that respondent had filed two separate appeals
with two different representations at two different venues, in violation of the rule on
multiplicity of suits and forum shopping, and instead of dismissing both appeals, the
appeal erroneously filed before the Labor Secretary was the one held validly filed,
entertained and even granted; that it is not within the discretion of BLR to choose which
between the two appeals should be entertained, as it is the fact of the filing of the two
appeals that is being prohibited and not who among the representatives therein possessed
the authority.
We are not persuaded.
We find no error committed by the CA in finding that respondent committed no forum
shopping. As the CA correctly concluded, to wit:
It is undisputed that BMP Paralegal Officer Domingo P. Mole was no longer authorized to
file an appeal on behalf of union SALAMAT and that BMP was duly informed that its
services was already terminated. SALAMAT even submitted before the BLR its "Resolusyon
Blg. 01-2009" terminating the services of BMP and revoking the representation of Mr.
Domingo Mole in any of the pending cases being handled by him on behalf of the union.
So, considering that BMP Paralegal Officer Domingo P. Mole was no longer authorized to
file an appeal when it filed the Notice and Memorandum of Appeal to DOLE Regional
Office No. IV-A, the same can no longer be treated as an appeal filed by union SALAMAT.
Hence, there is no forum shopping to speak of in this case as only the Appeal
Memorandum with Formal Entry of Appearance filed by Atty. Napoleon C. Banzuela, Jr.
and Atty. Jehn Louie W. Velandrez is sanctioned by SALAMAT.18
Since Mole's appeal filed with the BLR was not specifically authorized by respondent, such
appeal is considered to have not been filed at all. It has been held that "if a complaint is
filed for and in behalf of the plaintiff who is not authorized to do so, the complaint is not
deemed filed.
An unauthorized complaint does not produce any legal effect."19
Respondent through its authorized representative filed its Appeal Memorandum with
Formal Entry of Appearance before the Labor Secretary, and not with the BLR. As the
appeal emanated from the petition for cancellation of certificate of registration filed with
the Regional Office, the decision canceling the registration is appealable to the BLR, and
not with the Labor Secretary. However, since the Labor Secretary motu propio referred the
appeal with the BLR, the latter can now act on it. Considering that Mole's appeal with the
BLR was not deemed filed, respondent’s appeal, through Banzuela and Associates, which
the Labor Secretary referred to the BLR was the only existing appeal with the BLR for
resolution. There is, therefore, no merit to petitioner's claim that BLR chose the appeal of
Banzuela and Associates over Mole's appeal.
The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees
Union20 cited by petitioner is not at all applicable in this case as the issue therein is the
authority of the Labor Secretary to review the decision of the Bureau of Labor Relations
rendered in the exercise of its appellate jurisdiction over decision of the Regional Director
in cases involving cancellations of certificate of registration of labor unions. We found no
grave abuse of discretion committed by the Secretary of Labor in not acting on therein
petitioner's appeal. The decision of the Bureau of Labor Relations on cases brought before
it on appeal from the Regional Director are final and executory. Hence, the remedy of the
aggrieved party is to seasonably avail of the special civil action of certiorari under Rule 65
and the Rules of Court. In this case, after the Labor Secretary motu propio referred
respondent's appeal filed with it to the BLR which rendered its decision reversing the
35
Regional Director, petitioner went directly to the CA via a petition for certiorari under Rule
65.
As to the second issue, petitioner seeks the cancellation of respondent's registration on
grounds offraud and misrepresentation bearing on the minimum requirement of the law
as to its membership, considering the big disparity in numbers, between the organizational
meeting and the list of members, and so misleading the BLR that it obtained the minimum
required number of employees for purposes of organization and registration.
We find no merit in the arguments.
Art. 234 of the Labor Code provides:
ART. 234. Requirements of Registration. - A federation, national union or industry or trade
union center or an independent union shall acquire legal personality and shall be entitled
to the rights and privileges granted by law to legitimate labor organizations upon issuance
of the certificate of registration based on the following requirements:
(a) Fifty pesos (P50.00)registration fee;
(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers who
participated in such meetings;
(c) In case the applicant is an independent union, the names of all its members comprising
at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to
operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual
financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification, and the list of the members who participated in it."
And after the issuance of the certificate of registration, the labor organization's
registration could be assailed directly through cancellation of registration proceedings in
accordance with Articles 238 and 239 of the Labor Code. And the cancellation of union
certificate of registration and the grounds thereof are as follows:
ART. 238. Cancellation of Registration. - The certificate of registration of any legitimate
labor organization, whether national or local, may be cancelled by the Bureau, after due
hearing, only on the grounds specified in Article 239 hereof.
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.
Petitioner's charge that respondent committed misrepresentation and fraud in securing its
certificate of registration is a serious charge and must be carefully evaluated. Allegations
thereof should be compounded with supporting circumstances and evidence. 21 We find no
evidence on record to support petitioner's accusation.
Petitioner's allegation of misrepresentation and fraud is based on its claim that during the
organizational meeting on May 1, 2009, only 68 employees attended, while respondent
claimed that it has 119 members as shown in the document denominated as "Pangalan ng
mga Kasapi ng Unyon;" hence, respondent misrepresented on the 20% requirement of the
law as to its membership.
We do not agree.
It does not appear in Article 234 (b) of the Labor Code that the attendees in the
organizational meeting must comprise 20% of the employees in the bargaining unit. In
fact, even the Implementing Rules and Regulations of the Labor Code does not so provide.
It is only under Article 234 (c) that requires the names of all its members comprising at
least twenty percent (20%) of all the employees in the bargaining unit where it seeks to
operate. Clearly, the 20% minimum requirement pertains to the employees’ membership
in the union and not to the list of workers who participated in the organizational meeting.
Indeed, Article 234 (b) and (c) provide for separate requirements, which must be
submitted for the union's registration, and which respondent did submit. Here, the total
number of employees in the bargaining unit was 396, and 20% of which was about 79.
Respondent submitted a document entitled "Pangalan ng Mga Kasapi ng Unyon" showing
the names of 119 employees as union members, thus respondent sufficiently complied
even beyond the 20% minimum membership requirement. Respondent also submitted the
attendance sheet of the organizational meeting which contained the names and signatures
of the 68 union members who attended the meeting. Considering that there are 119 union
members which are more than 20% of all the employees of the bargaining unit, and since
the law does not provide for the required number of members to attend the
organizational meeting, the 68 attendees which comprised at least the majority of the 119
union members would already constitute a quorum for the meeting to proceed and to
validly ratify the Constitution and By-laws of the union. There is, therefore, no basis for
petitioner to contend that grounds exist for the cancellation of respondent's union
registration. For fraud and misrepresentation to be grounds for cancellation of union
registration under Article 239 of the Labor Code, the nature of the fraud and
misrepresentation must be grave and compelling enough to vitiate the consent of a
majority of union members.22
Petitioner's claim that the alleged union members signed documents without adequate
information is not persuasive. The one who alleges a fact has the burden of proving it and
a mere allegation is not evidence.23 In fact, we note that not one of those listed in the
document denominated as "Pangalan ng Mga Kasaping Unyon" had come forward to deny
their membership with respondent. Notably, it had not been rebutted that the same union
36
members had signed the document entitled "Sama-Samang Pahayag ng Pagsapi," thus,
strengtheningtheir desire to be members of the respondent union.
Petitioner claims that in the list of members, there was an employee whose name
appeared twice and another employee who was merely a project employee. Such could
not be considered a misrepresentation in the absence of showing that respondent
deliberately did so for the purpose of increasing their union membership. In fact, even if
those two names were not included in the list of union members, there would still be 117
members which was still more than 20% of the 396 rank-and-file employees.
As to petitioner's argument that the total number of its employees as of May 1, 2009 was
470, and not396 as respondent claimed, still the 117 union members comprised more than
the 20% membership requirement for respondent's registration.
In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and
Employment,24 we said:
For the purpose of de-certifying a union such as respondent, 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, the 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.
The bare fact that two signatures appeared twice on the list of those who participated in
the organizational meeting would not, to our mind, provide a valid reason to cancel
respondent’s certificate of registration. The cancellation of a union’s registration doubtless
has an impairing dimension on the right of labor to self-organization. For fraud and
misrepresentation to be grounds for cancellation of union registration under the Labor
Code, the nature of the fraud and misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of union members.1âwphi1
In this case, we agree with the BLR and the CA that respondent could not have possibly
committed misrepresentation, fraud, or false statements. The alleged failure of
respondent to indicate with mathematical precision the total number of employees in the
bargaining unit is of no moment, especially as it was able to comply with the 20%
minimum membership requirement. Even if the total number of rank-and-file employees
of petitioner is 528, while respondent declared that it should only be 455, it still cannot be
denied that the latter would have more than complied with the registration requirement. 25
WHEREFORE, premises considered, the petition for review is DENIED. The Decision dated
December 22, 2010 and the Resolution dated March 28, 2011 of the Court of Appeals, in
CA-G.R. SP No. 112406, are AFFIRMED.
SO ORDERED.
9.
G.R. No. 211145, October 14, 2015
SAMAHAN NG MANGGAGAWA SA HANJIN SHIPYARD REP. BY ITS PRESIDENT, ALFIE
ALIPIO, Petitioner, v. BUREAU OF LABOR RELATIONS, HANJIN HEAVY INDUSTRIES AND
CONSTRUCTION CO., LTD. (HHIC-PHIL.), Respondents.
DECISION
MENDOZA, J.:
The right to self-organization is not limited to unionism. Workers may also form or join an
association for mutual aid and protection and for other legitimate purposes.
This is a petition for review on certiorari seeking to reverse and set aside the July 4, 2013
Decision1and the January 28, 2014 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP
No. 123397, which reversed the November 28, 2011 Resolution3 of the Bureau of Labor
Relations (BLR) and reinstated the April 20, 2010 Decision4 of the Department of Labor and
Employment (DOLE) Regional Director, cancelling the registration of Samahan ng
Manggagawa sa Hanjin Shipyard (Samahan) as a worker's association under Article 243
(now Article 249) of the Labor Code.
The Facts
On February 16, 2010, Samahan, through its authorized representative, Alfie F. Alipio, filed
an application for registration5 of its name "Samahan ng Mga Manggagawa sa Hanjin
Shipyard" with the DOLE. Attached to the application were the list of names of the
association's officers and members, signatures of the attendees of the February 7, 2010
meeting, copies of their Constitution and By-laws. The application stated that the
association had a total of 120 members.
On February 26, 2010, the DOLE Regional Office No. 3, City of San Fernando, Pampanga
(DOLE-Pampanga), issued the corresponding certificate of registration6 in favor of
Samahan.
On March 15, 2010, respondent Hanjin Heavy Industries and Construction Co., Ltd.
Philippines (Hanjin), with offices at Greenbeach 1, Renondo Peninsula, Sitio Agustin,
Barangay Cawag, Subic Bay Freeport Zone, filed a petition7 with DOLE-Pampanga praying
for the cancellation of registration of Samahan's association on the ground that its
members did not fall under any of the types of workers enumerated in the second
sentence of Article 243 (now 249).
Hanjin opined that only ambulant, intermittent, itinerant, rural workers, self-employed,
and those without definite employers may form a workers' association. It further posited
that one third (1/3) of the members of the association had definite employers and the
continued existence and registration of the association would prejudice the company's
goodwill.
37

On March 18, 2010, Hanjin filed a supplemental petition,8 adding the alternative ground
that Samahan committed a misrepresentation in connection with the list of members
and/or voters who took part in the ratification of their constitution and by-laws in its
application for registration. Hanjin claimed that Samahan made it appear that its members
were all qualified to become members of the workers' association.
On March 26, 2010, DOLE-Pampanga called for a conference, wherein Samahan requested
for a 10-day period to file a responsive pleading. No pleading, however, was submitted.
Instead, Samahan filed a motion to dismiss on April 14, 2010.9
The Ruling of the DOLE Regional Director
On April 20, 2010, DOLE Regional Director Ernesto Bihis ruled in favor of Hanjin. He found
that the preamble, as stated in the Constitution and By-Laws of Samahan, was an
admission on its part that all of its members were employees of Hanjin, to wit:
KAMI, ang mga Manggagawa sa HANJIN Shipyard (SAMAHAN) ay naglalayong na isulong
ang pagpapabuti ng kondisyon sa paggawa at katiyakan sa hanapbuhay sa pamamagitan
ng patuloy na pagpapaunlad ng kasanayan ng para sa mga kasapi nito. Naniniwala na sa
pamamagitan ng aming mga angking lakas, kaalaman at kasanayan ay anting
maitataguyod at makapag-aambag sa kaunlaran ng isang lipunan. Na mararating at
makakamit ang antas ng pagkilala, pagdakila at pagpapahalaga sa mga tulad naming
mga manggagawa.
x x x10
The same claim was made by Samahan in its motion to dismiss, but it failed to adduce
evidence that the remaining 63 members were also employees of Hanjin. Its admission
bolstered Hanjin's claim that Samahan committed misrepresentation in its application for
registration as it made an express representation that all of its members were employees
of the former. Having a definite employer, these 57 members should have formed a labor
union for collective bargaining.11 The dispositive portion of the decision of the Dole
Regional Director, reads:
WHEREFORE, premises considered, the petition is hereby GRANTED. Consequently, the
Certificate of Registration as Legitimate Workers Association (LWA) issued to the
SAMAHAN NG MGA MANGGAGAWA SA HANJIN SHIPYARD (SAMAHAN) with Registration
Numbers R0300-1002-WA-009 dated February 26, 2010 is hereby CANCELLED, and said
association is dropped from the roster of labor organizations of this Office.
SO DECIDED.12
The Ruling of the Bureau of Labor Relations
Aggrieved, Samahan filed an appeal13 before the BLR, arguing that Hanjin had no right to
petition for the cancellation of its registration. Samahan pointed out that the words
"Hanjin Shipyard," as used in its application for registration, referred to a workplace and
not as employer or company. It explained that when a shipyard was put up in Subic,
Zambales, it became known as Hanjin Shipyard. Further, the remaining 63 members signed
the Sama-Samang Pagpapatunay which stated that they were either working or had
worked at Hanjin. Thus, the alleged misrepresentation committed by Samahan had no leg
to stand on.14
In its Comment to the Appeal,15 Hanjin averred that it was a party-in-interest. It reiterated
that Samahan committed misrepresentation in its application for registration before DOLE
Pampanga. While Samahan insisted that the remaining 63 members were either working,
or had at least worked in Hanjin, only 10 attested to such fact, thus, leaving its 53
members without any workplace to claim.
On September 6, 2010, the BLR granted Samahan's appeal and reversed the ruling of the
Regional Director. It stated that the law clearly afforded the right to self-organization to all
workers including those without definite employers.16 As an expression of the right to self-
organization, industrial, commercial and self-employed workers could form a workers'
association if they so desired but subject to the limitation that it was only for mutual aid
and protection.17 Nowhere could it be found that to form a workers' association was
prohibited or that the exercise of a workers' right to self-organization was limited to
collective bargaining.18
The BLR was of the opinion that there was no misrepresentation on the part of Samahan.
The phrase, "KAMI, ang mga Manggagawa sa Hanjin Shipyard" if translated, would be:
"We, the workers at Hanjin Shipyard." The use of the preposition "at" instead of "of "
would indicate that "Hanjin Shipyard" was intended to describe a place.19 Should Hanjin
feel that the use of its name had affected the goodwill of the company, the remedy was
not to seek the cancellation of the association's registration. At most, the use by Samahan
of the name "Hanjin Shipyard" would only warrant a change in the name of the
association.20 Thus, the dispositive portion of the BLR decision reads:
WHEREFORE, the appeal is hereby GRANTED. The Order of DOLE Region III Director
Ernesto C. Bihis dated 20 April 2010 is REVERSED and SET ASIDE.
Accordingly, Samahan ng mga Manggagawa sa Hanjin Shipyard shall remain in the roster of
legitimate workers' association.21
On October 14, 2010, Hanjin filed its motion for reconsideration.22
In its Resolution,23 dated November 28, 2011, the BLR affirmed its September 6, 2010
Decision, but directed Samahan to remove the words "Hanjin Shipyard" from its name. The
BLR explained that the Labor Code had no provision on the use of trade or business name
in the naming of a worker's association, such matters being governed by the Corporation
Code. According to the BLR, the most equitable relief that would strike a balance between
the contending interests of Samahan and Hanjin was to direct Samahan to drop the name
"Hanjin Shipyard" without delisting it from the roster of legitimate labor organizations.
The fallo reads:
WHEREFORE, premises considered, our Decision dated 6 September 2010 is hereby
AFFIRMED with a DIRECTIVE for SAMAHAN to remove "HANJIN SHIPYARD" from its name.
38
SO RESOLVED.24
Unsatisfied, Samahan filed a petition for certiorari25 under Rule 65 before the CA, docketed
as CA-G.R. SP No. 123397.
In its March 21, 2012 Resolution,26 the CA dismissed the petition because of Samahan's
failure to file a motion for reconsideration of the assailed November 28, 2011 Resolution.
On April 17, 2012, Samahan filed its motion for reconsideration27 and on July 18, 2012,
Hanjin filed its comment28 to oppose the same. On October 22, 2012, the CA issued a
resolution granting Samahan's motion for reconsideration and reinstating the petition.
Hanjin was directed to file a comment five (5) days from receipt of notice.29
On December 12, 2012, Hanjin filed its comment on the petition,30 arguing that to require
Samahan to change its name was not tantamount to interfering with the workers' right to
self-organization.31Thus, it prayed, among others, for the dismissal of the petition for
Samahan's failure to file the required motion for reconsideration.32
On January 17, 2013, Samahan filed its reply.33
On March 22, 2013, Hanjin filed its memorandum.34
The Ruling of the Court of Appeals
On July 4, 2013, the CA rendered its decision, holding that the registration of Samahan as a
legitimate workers' association was contrary to the provisions of Article 243 of the Labor
Code.35 It stressed that only 57 out of the 120 members were actually working in Hanjin
while the phrase in the preamble of Samahan's Constitution and By-laws, "KAMI, ang mga
Manggagawa sa Hanjin Shipyard" created an impression that all its members were
employees of HHIC. Such unqualified manifestation which was used in its application for
registration, was a clear proof of misrepresentation which warranted the cancellation of
Samahan's registration.
It also stated that the members of Samahan could not register it as a legitimate worker's
association because the place where Hanjin's industry was located was not a rural area.
Neither was there any evidence to show that the members of the association were
ambulant, intermittent or itinerant workers.36
At any rate, the CA was of the view that dropping the words "Hanjin Shipyard" from the
association name would not prejudice or impair its right to self-organization because it
could adopt other appropriate names. The dispositive portion reads:
WHEREFORE, the petition is DISMISSED and the BLR's directive, ordering that the words
"Hanjin Shipyard" be removed from petitioner association's name, is AFFIRMED. The
Decision dated April 20, 2010 of the DOLE Regional Director in Case No. R0300-1003-CP-
001, which ordered the cancellation of petitioner association's registration is REINSTATED.
SO ORDERED.37
Hence, this petition, raising the following
ISSUES
I. THE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT SAMAHAN CANNOT
FORM A WORKERS' ASSOCIATION OF EMPLOYEES IN HANJIN AND INSTEAD SHOULD
HAVE FORMED A UNION, HENCE THEIR REGISTRATION AS A WORKERS' ASSOCIATION
SHOULD BE CANCELLED.
II. THE COURT OF APPEALS SERIOUSLY ERRED IN ORDERING THE REMOVAL/DELETION OF
THE WORD "HANJIN" IN THE NAME OF THE UNION BY REASON OF THE COMPANY'S
PROPERTY RIGHT OVER THE COMPANY NAME "HANJIN."38
Samahan argues that the right to form a workers' association is not exclusive to
intermittent, ambulant and itinerant workers. While the Labor Code allows the workers
"to form, join or assist labor organizations of their own choosing" for the purpose of
collective bargaining, it does not prohibit them from forming a labor organization simply
for purposes of mutual aid and protection. All members of Samahan have one common
place of work, Hanjin Shipyard. Thus, there is no reason why they cannot use "Hanjin
Shipyard" in their name.39
Hanjin counters that Samahan failed to adduce sufficient basis that all its members were
employees of Hanjin or its legitimate contractors, and that the use of the name "Hanjin
Shipyard" would create an impression that all its members were employess of HHIC.40
Samahan reiterates its stand that workers with a definite employer can organize any
association for purposes of mutual aid and protection. Inherent in the workers' right to
self-organization is its right to name its own organization. Samahan referred "Hanjin
Shipyard" as their common place of work. Therefore, they may adopt the same in their
association's name.41
The Court's Ruling
The petition is partly meritorious.
Right to self-organization includes right to form a union, workers' association and labor
management councils
More often than not, the right to self-organization connotes unionism. Workers, however,
can also form and join a workers' association as well as labor-management councils (LMC).
Expressed in the highest law of the land is the right of all workers to self-organization.
Section 3, Article XIII of the 1987 Constitution states:
39
Section 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for
all. It shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law. xxx
[Emphasis Supplied]
And Section 8, Article III of the 1987 Constitution also states:
Section 8. 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.
In relation thereto, Article 3 of the Labor Code provides:
Article 3. Declaration of basic policy. The State shall afford protection to labor, promote
full employment, ensure equal work opportunities regardless of sex, race or creed and
regulate the relations between workers and employers. The State shall assure the rights
of workers to self-organization, collective bargaining, security of tenure, and just and
humane conditions of work.
[Emphasis Supplied]
As Article 246 (now 252) of the Labor Code provides, the right to self-organization includes
the right to form, join or assist labor organizations for the purpose of collective bargaining
through representatives of their own choosing and to engage in lawful concerted activities
for the same purpose for their mutual aid and protection. This is in line with the policy of
the State to foster the free and voluntary organization of a strong and united labor
movement as well as to make sure that workers participate in policy and decision-making
processes affecting their rights, duties and welfare.42
The right to form a union or association or to self-organization comprehends two notions,
to wit: (a) the liberty or freedom, that is, the absence of restraint which guarantees that
the employee may act for himself without being prevented by law; and (b) the power, by
virtue of which an employee may, as he pleases, join or refrain from joining an
association.43
In view of the revered right of every worker to self-organization, the law expressly allows
and even encourages the formation of labor organizations. A labor organization is defined
as "any union or association of employees which exists in whole or in part for the purpose
of collective bargaining or of dealing with employers concerning terms and conditions of
employment."44 A labor organization has two broad rights: (1) to bargain collectively and
(2) to deal with the employer concerning terms and conditions of employment. To bargain
collectively is a right given to a union once it registers itself with the DOLE. Dealing with
the employer, on the other hand, is a generic description of interaction between employer
and employees concerning grievances, wages, work hours and other terms and conditions
of employment, even if the employees' group is not registered with the DOLE.45
A union refers to any labor organization in the private sector organized for collective
bargaining and for other legitimate purpose,46 while a workers' association is an
organization of workers formed for the mutual aid and protection of its members or for
any legitimate purpose other than collective bargaining.47
Many associations or groups of employees, or even combinations of only several persons,
may qualify as a labor organization yet fall short of constituting a labor union. While every
labor union is a labor organization, not every labor organization is a labor union. The
difference is one of organization, composition and operation. 48
Collective bargaining is just one of the forms of employee participation. Despite so much
interest in and the promotion of collective bargaining, it is incorrect to say that it is the
device and no other, which secures industrial democracy. It is equally misleading to say
that collective bargaining is the end-goal of employee representation. Rather, the real aim
is employee participation in whatever form it may appear, bargaining or no bargaining,
union or no union.49 Any labor organization which may or may not be a union may deal
with the employer. This explains why a workers' association or organization does not
always have to be a labor union and why employer-employee collective interactions are
not always collective bargaining.50
To further strengthen employee participation, Article 255 (now 261)51 of the Labor Code
mandates that workers shall have the right to participate in policy and decision-making
processes of the establishment where they are employed insofar as said processes will
directly affect their rights, benefits and welfare. For this purpose, workers and employers
may form LMCs.
A cursory reading of the law demonstrates that a common element between unionism and
the formation of LMCs is the existence of an employer-employee relationship. Where
neither party is an employer nor an employee of the other, no duty to bargain collectively
would exist.52 In the same manner, expressed in Article 255 (now 261) is the requirement
that such workers be employed in the establishment before they can participate in policy
and decision making processes.
In contrast, the existence of employer-employee relationship is not mandatory in the
formation of workers' association. What the law simply requires is that the members of
the workers' association, at the very least, share the same interest. The very definition of a
workers' association speaks of "mutual aid and protection."
Right to choose whether to form or join a union or workers' association belongs to workers
themselves
In the case at bench, the Court cannot sanction the opinion of the CA that Samahan should
have formed a union for purposes of collective bargaining instead of a workers' association
because the choice belonged to it. The right to form or join a labor organization necessarily
includes the right to refuse or refrain from exercising the said right. It is self-evident that
just as no one should be denied the exercise of a right granted by law, so also, no one
should be compelled to exercise such a conferred right.53 Also inherent in the right to self-
40
organization is the right to choose whether to form a union for purposes of collective
bargaining or a workers' association for purposes of providing mutual aid and protection.
The right to self-organization, however, is subject to certain limitations as provided by law.
For instance, the Labor Code specifically disallows managerial employees from joining,
assisting or forming any labor union. Meanwhile, supervisory employees, while eligible for
membership in labor organizations, are proscribed from joining the collective bargaining
unit of the rank and file employees.54 Even government employees have the right to self-
organization. It is not, however, regarded as existing or available for purposes of collective
bargaining, but simply for the furtherance and protection of their interests.55
Hanjin posits that the members of Samahan have definite employers, hence, they should
have formed a union instead of a workers' association. The Court disagrees. There is no
provision in the Labor Code that states that employees with definite employers may form,
join or assist unions only.
The Court cannot subscribe either to Hanjin's position that Samahan's members cannot
form the association because they are not covered by the second sentence of Article 243
(now 249), to wit:
Article 243. Coverage and employees' right to self-organization. All persons employed in
commercial, industrial and agricultural enterprises and in religious, charitable, medical, or
educational institutions, whether operating for profit or not, shall have the right to self-
organization and to form, join, or assist labor organizations of their own choosing for
purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without any definite employers may form
labor organizations for their mutual aid and protection. (As amended by Batas Pambansa
Bilang 70, May 1, 1980)
[Emphasis Supplied]
Further, Article 243 should be read together with Rule 2 of Department Order (D.O.) No.
40-03, Series of 2003, which provides:
RULE II
COVERAGE OF THE RIGHT TO SELF-ORGANIZATION
Section 1. Policy. - It is the policy of the State to promote the free and responsible exercise
of the right to self-organization through the establishment of a simplified mechanism for
the speedy registration of labor unions and workers associations, determination of
representation status and resolution of inter/intra-union and other related labor relations
disputes. Only legitimate or registered labor unions shall have the right to represent their
members for collective bargaining and other purposes. Workers' associations shall have
the right to represent their members for purposes other than collective bargaining.
Section 2. Who may join labor unions and workers' associations. - All persons employed in
commercial, industrial and agricultural enterprises, including employees of government
owned or controlled corporations without original charters established under the
Corporation Code, as well as employees of religious, charitable, medical or educational
institutions whether operating for profit or not, shall have the right to self-organization
and to form, join or assist labor unions for purposes of collective bargaining: provided,
however, that supervisory employees shall not be eligible for membership in a labor union
of the rank-and-file employees but may form, join or assist separate labor unions of their
own. Managerial employees shall not be eligible to form, join or assist any labor unions for
purposes of collective bargaining. Alien employees with valid working permits issued by
the Department may exercise the right to self-organization and join or assist labor unions
for purposes of collective bargaining if they are nationals of a country which grants the
same or similar rights to Filipino workers, as certified by the Department of Foreign Affairs.
For purposes of this section, any employee, whether employed for a definite period or not,
shall beginning on the first day of his/her service, be eligible for membership in any labor
organization.
All other workers, including ambulant, intermittent and other workers, the self-employed,
rural workers and those without any definite employers may form labor organizations for
their mutual aid and protection and other legitimate purposes except collective
bargaining.
[Emphases Supplied]
Clearly, there is nothing in the foregoing implementing rules which provides that workers,
with definite employers, cannot form or join a workers' association for mutual aid and
protection. Section 2 thereof even broadens the coverage of workers who can form or join
a workers' association. Thus, the Court agrees with Samahan's argument that the right to
form a workers' association is not exclusive to ambulant, intermittent and itinerant
workers. The option to form or join a union or a workers' association lies with the workers
themselves, and whether they have definite employers or not.
No misrepresentation on the part of Samahan to warrant cancellation of registration
In this case, Samahan's registration was cancelled not because its members were
prohibited from forming a workers' association but because they allegedly committed
misrepresentation for using the phrase, "KAMI, ang mga Manggagawa sa HAN JIN
Shipyard."
Misrepresentation, as a ground for the cancellation of registration of a labor organization,
is committed "in connection with the adoption, or ratification of the constitution and by-
laws or amendments thereto, the minutes of ratification, the list of members who took
part in the ratification of the constitution and by-laws or amendments thereto, and those
in connection with the election of officers, minutes of the election of officers, and the list
of voters, xxx."56
In Takata Corporation v. Bureau of Relations,57 the DOLE Regional Director granted the
petition for the cancellation of certificate of registration of Samahang Lakas Manggagawa
sa Takata (Salamat) after finding that the employees who attended the organizational
41
meeting fell short of the 20% union registration requirement. The BLR, however, reversed
the ruling of the DOLE Regional Director, stating that petitioner Takata Corporation
(Takata) failed to prove deliberate and malicious misrepresentation on the part of
respondent Salamat. Although Takata claimed that in the list of members, there was an
employee whose name appeared twice and another was merely a project employee, such
facts were not considered misrepresentations in the absence of showing that the
respondent deliberately did so for the purpose of increasing their union membership. The
Court ruled in favor of Salamat.
In S.S. Ventures International v. S.S. Ventures Labor Union,58 the petition for cancellation of
certificate of registration was denied. The Court wrote:
If the union's application is infected by falsification and like serious irregularities,
especially those appearing on the face of the application and its attachments, a union
should be denied recognition as a legitimate labor organization. Prescinding from these
considerations, the issuance to the Union of Certificate of Registration No. RO300-00-02-
UR-0003 necessarily implies that its application for registration and the supporting
documents thereof are prima facie free from any vitiating irregularities. Another factor
which militates against the veracity of the allegations in the Sinumpaang Petisyon is the
lack of particularities on how, when and where respondent union perpetrated the
alleged fraud on each member. Such details are crucial for in the proceedings for
cancellation of union registration on the ground of fraud or misrepresentation, what
needs to be established is that the specific act or omission of the union deprived the
complaining employees-members of their right to choose.
[Emphases Supplied]
Based on the foregoing, the Court concludes that misrepresentation, to be a ground for
the cancellation of the certificate of registration, must be done maliciously and
deliberately. Further, the mistakes appearing in the application or attachments must be
grave or refer to significant matters. The details as to how the alleged fraud was
committed must also be indubitably shown.
The records of this case reveal no deliberate or malicious intent to commit
misrepresentation on the part of Samahan. The use of such words "KAMI, ang mga
Manggagawa sa HANJIN Shipyard" in the preamble of the constitution and by-laws did not
constitute misrepresentation so as to warrant the cancellation of Samahan's certificate of
registration. Hanjin failed to indicate how this phrase constitutes a malicious and
deliberate misrepresentation. Neither was there any showing that the alleged
misrepresentation was serious in character. Misrepresentation is a devious charge that
cannot simply be entertained by mere surmises and conjectures.
Even granting arguendo that Samahan's members misrepresented themselves as
employees or workers of Hanjin, said misrepresentation does not relate to the adoption or
ratification of its constitution and by-laws or to the election of its officers.
Removal of the word "Hanjin Shipyard" from the association's name, however, does not
infringe on Samahan's right to self-organization
Nevertheless, the Court agrees with the BLR that "Hanjin Shipyard" must be removed in
the name of the association. A legitimate workers' association refers to an association of
workers organized for mutual aid and protection of its members or for any legitimate
purpose other than collective bargaining registered with the DOLE.59 Having been granted
a certificate of registration, Samahan's association is now recognized by law as a legitimate
workers' association.
According to Samahan, inherent in the workers' right to self-organization is its right to
name its own organization. It seems to equate the dropping of words "Hanjin Shipyard"
from its name as a restraint in its exercise of the right to self-organization. Hanjin, on the
other hand, invokes that "Hanjin Shipyard" is a registered trade name and, thus, it is within
their right to prohibit its use.
As there is no provision under our labor laws which speak of the use of name by a workers'
association, the Court refers to the Corporation Code, which governs the names of juridical
persons. Section 18 thereof provides:
No corporate name may be allowed by the Securities and Exchange Commission if the
proposed name is identical or deceptively or confusingly similar to that of any existing
corporation or to any other name already protected by law or is patently deceptive,
confusing or contrary to existing laws. When a change in the corporate name is approved,
the Commission shall issue an amended certificate of incorporation under the amended
name.
[Emphases Supplied]
The policy underlying the prohibition in Section 18 against the registration of a corporate
name which is "identical or deceptively or confusingly similar" to that of any existing
corporation or which is "patently deceptive" or "patently confusing" or "contrary to
existing laws," is the avoidance of fraud upon the public which would have occasion to
deal with the entity concerned, the evasion of legal obligations and duties, and the
reduction of difficulties of administration and supervision over corporations.60
For the same reason, it would be misleading for the members of Samahan to use "Hanjin
Shipyard" in its name as it could give the wrong impression that all of its members are
employed by Hanjin.
Further, Section 9, Rule IV of D.O. No. 40-03, Series of 2003 explicitly states:
The change of name of a labor organization shall not affect its legal personality. All the
rights and obligations of a labor organization under its old name shall continue to be
exercised by the labor organization under its new name.
Thus, in the directive of the BLR removing the words "Hanjin Shipyard," no abridgement of
Samahan's right to self-organization was committed.
WHEREFORE, the petition is PARTIALLY GRANTED. The July 4, 2013 Decision and the
January 28, 2014 Resolution of the Court of Appeals are hereby REVERSED and SET ASIDE.
The September 6, 2010 Resolution of the Bureau of Labor Relations, as modified by its
42
November 28, 2011 Resolution, is REINSTATED.
SO ORDERED.
10.
SAN MIGUEL FOODS, INCORPORATED, Petitioner,
-versus-
SAN MIGUEL CORPORATION SUPERVISORS and EXEMPT UNION,Respondent.
G.R. No. 146206 August 1, 2011
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.
43
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 Masterin the
definition of a confidential employee and, thus, prays that the said position and all other
44
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.
11.
SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE
PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS JERRY
VICTORIO Union President, Petitioner,
- versus -
CHARTER CHEMICAL ANDCOATING CORPORATION, Respondent.
G.R. No. 169717 March 16, 2011
x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The right to file a petition for certification election is accorded to a labor organization
provided that it complies with the requirements of law for proper registration. The
45
inclusion of supervisory employees in a labor organization seeking to represent the
bargaining unit of rank-and-file employees does not divest it of its status as a legitimate
labor organization. We apply these principles to this case.
This Petition for Review on Certiorari seeks to reverse and set aside the Court of Appeals
March 15, 2005 Decision[1] in CA-G.R. SP No. 58203, which annulled and set aside the
January 13, 2000 Decision[2] of the Department of Labor and Employment (DOLE) in OS-A-
6-53-99 (NCR-OD-M-9902-019) and the September 16, 2005 Resolution[3] denying
petitioner unions motion for reconsideration.
Factual Antecedents
On February 19, 1999, Samahang Manggagawa sa Charter Chemical Solidarity of Unions in
the Philippines for Empowerment and Reforms (petitioner union) filed a petition for
certification election among the regular rank-and-file employees of Charter Chemical and
Coating Corporation (respondent company) with the Mediation Arbitration Unit of the
DOLE, National Capital Region.
On April 14, 1999, respondent company filed an Answer with Motion to Dismiss[4] on the
ground that petitioner union is not a legitimate labor organization because of (1) failure to
comply with the documentation requirements set by law, and (2) the inclusion of
supervisory employees within petitioner union.[5]
Med-Arbiters Ruling
On April 30, 1999, Med-Arbiter Tomas F. Falconitin issued a Decision[6] dismissing the
petition for certification election. The Med-Arbiter ruled that petitioner union is not a
legitimate labor organization because the Charter Certificate, Sama-samang Pahayag ng
Pagsapi at Authorization, and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga
Sumang-ayon at Nagratipika sa Saligang Batas were not executed under oath and
certified by the union secretary and attested to by the union president as required by
Section 235 of the Labor Code[7]in relation to Section 1, Rule VI of Department Order (D.O.)
No. 9, series of 1997. The union registration was, thus, fatally defective.
The Med-Arbiter further held that the list of membership of petitioner union consisted of
12 batchman, mill operator and leadman who performed supervisory functions. Under
Article 245 of the Labor Code, said supervisory employees are prohibited from joining
petitioner union which seeks to represent the rank-and-file employees of respondent
company.
As a result, not being a legitimate labor organization, petitioner union has no right to file a
petition for certification election for the purpose of collective bargaining.
Department of Labor and Employments Ruling
On July 16, 1999, the DOLE initially issued a Decision[8] in favor of respondent company
dismissing petitioner unions appeal on the ground that the latters petition for certification
election was filed out of time. Although the DOLE ruled, contrary to the findings of the
Med-Arbiter, that the charter certificate need not be verified and that there was no
independent evidence presented to establish respondent companys claim that some
members of petitioner union were holding supervisory positions, the DOLE sustained the
dismissal of the petition for certification after it took judicial notice that another
union, i.e., Pinag-isang LakasManggagawa sa Charter Chemical and Coating Corporation,
previously filed a petition for certification election on January 16, 1998. The Decision
granting the said petition became final and executory on September 16, 1998 and was
remanded for immediate implementation. Under Section 7, Rule XI of D.O. No. 9, series of
1997, a motion for intervention involving a certification election in an unorganized
establishment should be filed prior to the finality of the decision calling for a certification
election. Considering that petitioner union filed its petition only on February 14, 1999, the
same was filed out of time.
On motion for reconsideration, however, the DOLE reversed its earlier ruling. In its January
13, 2000 Decision, the DOLE found that a review of the records indicates that no
certification election was previously conducted in respondent company. On the contrary,
the prior certification election filed by Pinag-isang Lakas Manggagawa sa Charter
Chemical and Coating Corporation was, likewise, denied by the Med-Arbiter and, on
appeal, was dismissed by the DOLE for being filed out of time. Hence, there was no
obstacle to the grant of petitioner unions petition for certification election, viz:
WHEREFORE, the motion for reconsideration is hereby GRANTED and the decision of this
Office dated 16 July 1999 is MODIFIED to allow the certification election among the
regular rank-and-file employees of Charter Chemical and Coating Corporation with the
following choices:
1. Samahang Manggagawa sa Charter Chemical-Solidarity of Unions in the
Philippines for Empowerment and Reform (SMCC-SUPER); and
2. No Union.
Let the records of this case be remanded to the Regional Office of origin for the immediate
conduct of a certification election, subject to the usual pre-election conference.
SO DECIDED.[9]
Court of Appeals Ruling
On March 15, 2005, the CA promulgated the assailed Decision, viz:
WHEREFORE, the petition is hereby GRANTED. The assailed Decision and Resolution dated
January 13, 2000 and February 17, 2000 are hereby [ANNULLED] and SET ASIDE.
SO ORDERED.[10]
In nullifying the decision of the DOLE, the appellate court gave credence to the findings of
the Med-Arbiter that petitioner union failed to comply with the documentation
requirements under the Labor Code. It, likewise, upheld the Med-Arbiters finding that
46
petitioner union consisted of both rank-and-file and supervisory employees. Moreover, the
CA held that the issues as to the legitimacy of petitioner union may be attacked collaterally
in a petition for certification election and the infirmity in the membership of petitioner
union cannot be remedied through the exclusion-inclusion proceedings in a pre-election
conference pursuant to the ruling in Toyota Motor Philippines v. Toyota Motor Philippines
Corporation Labor Union.[11] Thus, considering that petitioner union is not a legitimate
labor organization, it has no legal right to file a petition for certification election.
Issues
I
Whether x x x the Honorable Court of Appeals committed grave abuse of discretion
tantamount to lack of jurisdiction in granting the respondent [companys] petition
for certiorari (CA G.R. No. SP No. 58203) in spite of the fact that the issues subject of the
respondent company[s] petition was already settled with finality and barred from being re-
litigated.
II
Whether x x x the Honorable Court of Appeals committed grave abuse of discretion
tantamount to lack of jurisdiction in holding that the alleged mixture of rank-and-file and
supervisory employee[s] of petitioner [unions] membership is [a] ground for the
cancellation of petitioner [unions] legal personality and dismissal of [the] petition for
certification election.
III
Whether x x x the Honorable Court of Appeals committed grave abuse of discretion
tantamount to lack of jurisdiction in holding that the alleged failure to certify under oath
the local charter certificate issued by its mother federation and list of the union
membership attending the organizational meeting [is a ground] for the cancellation of
petitioner [unions] legal personality as a labor organization and for the dismissal of the
petition for certification election.[12]
Petitioner Unions Arguments
Petitioner union claims that the litigation of the issue as to its legal personality to file the
subject petition for certification election is barred by the July 16, 1999 Decision of the
DOLE. In this decision, the DOLE ruled that petitioner union complied with all the
documentation requirements and that there was no independent evidence presented to
prove an illegal mixture of supervisory and rank-and-file employees in petitioner union.
After the promulgation of this Decision, respondent company did not move for
reconsideration, thus, this issue must be deemed settled.
Petitioner union further argues that the lack of verification of its charter certificate and the
alleged illegal composition of its membership are not grounds for the dismissal of a
petition for certification election under Section 11, Rule XI of D.O. No. 9, series of 1997, as
amended, nor are they grounds for the cancellation of a unions registration under Section
3, Rule VIII of said issuance. It contends that what is required to be certified under oath by
the local unions secretary or treasurer and attested to by the local unions president are
limited to the unions constitution and by-laws, statement of the set of officers, and the
books of accounts.
Finally, the legal personality of petitioner union cannot be collaterally attacked but may be
questioned only in an independent petition for cancellation pursuant to Section 5, Rule V,
Book IV of the Rules to Implement the Labor Code and the doctrine enunciated
in Tagaytay Highlands International Golf Club Incoprorated v. Tagaytay Highlands
Empoyees Union-PTGWO.[13]
Respondent Companys Arguments
Respondent company asserts that it cannot be precluded from challenging the July 16,
1999 Decision of the DOLE. The said decision did not attain finality because the DOLE
subsequently reversed its earlier ruling and, from this decision, respondent company
timely filed its motion for reconsideration.
On the issue of lack of verification of the charter certificate, respondent company notes
that Article 235 of the Labor Code and Section 1, Rule VI of the Implementing Rules of
Book V, as amended by D.O. No. 9, series of 1997, expressly requires that the charter
certificate be certified under oath.
It also contends that petitioner union is not a legitimate labor organization because its
composition is a mixture of supervisory and rank-and-file employees in violation of Article
245 of the Labor Code. Respondent company maintains that the ruling in Toyota Motor
Philippines vs. Toyota Motor Philippines Labor Union[14] continues to be good case law.
Thus, the illegal composition of petitioner union nullifies its legal personality to file the
subject petition for certification election and its legal personality may be collaterally
attacked in the proceedings for a petition for certification election as was done here.
Our Ruling
The petition is meritorious.
The issue as to the legal personality of petitioner union is not barred by the July 16, 1999
Decision of the DOLE.
A review of the records indicates that the issue as to petitioner unions legal personality
has been timely and consistently raised by respondent company before the Med-Arbiter,
DOLE, CA and now this Court. In its July 16, 1999 Decision, the DOLE found that petitioner
union complied with the documentation requirements of the Labor Code and that the
evidence was insufficient to establish that there was an illegal mixture of supervisory and
rank-and-file employees in its membership. Nonetheless, the petition for certification
election was dismissed on the ground that another union had previously filed a petition for
certification election seeking to represent the same bargaining unit in respondent
company.
47
Upon motion for reconsideration by petitioner union on January 13, 2000, the DOLE
reversed its previous ruling. It upheld the right of petitioner union to file the subject
petition for certification election because its previous decision was based on a mistaken
appreciation of facts.[15] From this adverse decision, respondent company timely moved
for reconsideration by reiterating its previous arguments before the Med-Arbiter that
petitioner union has no legal personality to file the subject petition for certification
election.
The July 16, 1999 Decision of the DOLE, therefore, never attained finality because the
parties timely moved for reconsideration. The issue then as to the legal personality of
petitioner union to file the certification election was properly raised before the DOLE, the
appellate court and now this Court.
The charter certificate need not be certified under oath by the local unions secretary or
treasurer and attested to by its president.
Preliminarily, we must note that Congress enacted Republic Act (R.A.) No. 9481[16]which
took effect on June 14, 2007.[17] This law introduced substantial amendments to the Labor
Code. However, since the operative facts in this case occurred in 1999, we shall decide the
issues under the pertinent legal provisions then in force (i.e., R.A. No. 6715,[18] amending
Book V of the Labor Code, and the rules and regulations[19] implementing R.A. No. 6715, as
amended by D.O. No. 9,[20]
series of 1997) pursuant to our ruling in Republic v. Kawashima Textile Mfg., Philippines,
Inc.[21]
In the main, the CA ruled that petitioner union failed to comply with the requisite
documents for registration under Article 235 of the Labor Code and its implementing rules.
It agreed with the Med-Arbiter that the Charter Certificate, Sama-samang Pahayag ng
Pagsapi at Authorization, and Listahan ng mga Dumalo sa Pangkalahatang Pulong at mga
Sumang-ayon at Nagratipika sa Saligang Batas were not executed under oath. Thus,
petitioner union cannot be accorded the status of a legitimate labor organization.
We disagree.
The then prevailing Section 1, Rule VI of the Implementing Rules of Book V, as amended by
D.O. No. 9, series of 1997, provides:
Section 1. Chartering and creation of a local chapter A duly registered federation or
national union may directly create a local/chapter by submitting to the Regional Office or
to the Bureau two (2) copies of the following:
(a) A charter certificate issued by the federation or national union indicating the creation
or establishment of the local/chapter;
(b) The names of the local/chapters officers, their addresses, and the principal office of the
local/chapter; and
(c) The local/chapters constitution and by-laws provided that where the local/chapters
constitution and by-laws [are] the same as [those] of the federation or national union, this
fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary or
the Treasurer of the local/chapter and attested to by its President.
As readily seen, the Sama-samang Pahayag ng Pagsapi at Authorization and Listahan ng
mga Dumalo sa Pangkalahatang Pulong at mga Sumang-ayon at Nagratipika sa Saligang
Batas are not among the documents that need to be submitted to the Regional Office or
Bureau of Labor Relations in order to register a labor organization. As to the charter
certificate, the above-quoted rule indicates that it should be executed under oath.
Petitioner union concedes and the records confirm that its charter certificate was not
executed under oath. However, in San Miguel Corporation (Mandaue Packaging Products
Plants) v. Mandaue Packing Products Plants-San Miguel Corporation Monthlies Rank-and-
File Union-FFW (MPPP-SMPP-SMAMRFU-FFW),[22] which was decided under the auspices
of D.O. No. 9, Series of 1997, we ruled
In San Miguel Foods-Cebu B-Meg Feed Plant v. Hon. Laguesma, 331 Phil. 356 (1996), the
Court ruled that it was not necessary for the charter certificate to be certified and attested
by the local/chapter officers. Id. While this ruling was based on the interpretation of the
previous Implementing Rules provisions which were supplanted by the 1997
amendments, we believe that the same doctrine obtains in this case. Considering that the
charter certificate is prepared and issued by the national union and not the
local/chapter, it does not make sense to have the local/chapters officers x x x certify or
attest to a document which they had no hand in the preparation of.[23] (Emphasis
supplied)
In accordance with this ruling, petitioner unions charter certificate need not be executed
under oath. Consequently, it validly acquired the status of a legitimate labor organization
upon submission of (1) its charter certificate,[24] (2) the names of its officers, their
addresses, and its principal office,[25] and (3) its constitution and by-laws[26] the last two
requirements having been executed under oath by the proper union officials as borne out
by the records.
The mixture of rank-and-file and supervisory employees in petitioner union does not nullify
its legal personality as a legitimate labor organization.
The CA found that petitioner union has for its membership both rank-and-file and
supervisory employees. However, petitioner union sought to represent the bargaining unit
consisting of rank-and-file employees. Under Article 245[27] of the Labor Code, supervisory
employees are not eligible for membership in a labor organization of rank-and-file
employees. Thus, the appellate court ruled that petitioner union cannot be considered a
legitimate labor organization pursuant to Toyota Motor Philippines v. Toyota Motor
Philippines Corporation Labor Union[28] (hereinafter Toyota).
48
Preliminarily, we note that petitioner union questions the factual findings of the Med-
Arbiter, as upheld by the appellate court, that 12 of its members, consisting of batchman,
mill operator and leadman, are supervisory employees. However, petitioner union failed to
present any rebuttal evidence in the proceedings below after respondent company
submitted in evidence the job descriptions[29] of the aforesaid employees. The job
descriptions indicate that the aforesaid employees exercise recommendatory managerial
actions which are not merely routinary but require the use of independent judgment,
hence, falling within the definition of supervisory employees under Article 212(m)[30] of the
Labor Code. For this reason, we are constrained to agree with the Med-Arbiter, as upheld
by the appellate court, that petitioner union consisted of both rank-and-file and
supervisory employees.
Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union does
not divest it of its status as a legitimate labor organization. The appellate courts reliance
on Toyota is misplaced in view of this Courts subsequent ruling in Republic v. Kawashima
Textile Mfg., Philippines, Inc.[31] (hereinafter Kawashima). In Kawashima, we explained at
length how and why the Toyota doctrine no longer holds sway under the altered state of
the law and rules applicable to this case, viz:
R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition [on the
co-mingling of supervisory and rank-and-file employees] would bring about on the
legitimacy of a labor organization.
It was the Rules and Regulations Implementing R.A. No. 6715 (1989 Amended Omnibus
Rules) which supplied the deficiency by introducing the following amendment to Rule II
(Registration of Unions):
Sec. 1. Who may join unions. - x x x Supervisory employees and security guards 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; Provided, that those
supervisory employees who are included in an existing rank-and-file bargaining unit, upon
the effectivity of Republic Act No. 6715, shall remain in that unit x x x. (Emphasis supplied)
and Rule V (Representation Cases and Internal-Union Conflicts) of the Omnibus Rules, viz:
Sec. 1. Where to file. - A petition for certification election may be filed with the Regional
Office which has jurisdiction over the principal office of the employer. The petition shall be
in writing and under oath.
Sec. 2. Who may file. - Any legitimate labor organization or the employer, when requested
to bargain collectively, may file the petition.
The petition, when filed by a legitimate labor organization, shall contain, among others:
xxxx
(c) description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require; and provided further, that the appropriate bargaining
unit of the rank-and-file employees shall not include supervisory employees and/or
security guards. (Emphasis supplied)
By that provision, any questioned mingling will prevent an otherwise legitimate and duly
registered labor organization from exercising its right to file a petition for certification
election.
Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the Court,
citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held:
Clearly, based on this provision, a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It cannot, for any guise or purpose,
be a legitimate labor organization. Not being one, an organization which carries a mixture
of rank-and-file and supervisory employees cannot possess any of the rights of a
legitimate labor organization, including the right to file a petition for certification
election for the purpose of collective bargaining. It becomes necessary,
therefore, anterior to the granting of an order allowing a certification election, to inquire
into the composition of any labor organization whenever the status of the labor
organization is challenged on the basis of Article 245 of the Labor Code.
xxxx
In the case at bar, as respondent union's membership list contains the names of at least
twenty-seven (27) supervisory employees in Level Five positions, the union could not, prior
to purging itself of its supervisory employee members, attain the status of a legitimate
labor organization. Not being one, it cannot possess the requisite personality to file a
petition for certification election. (Emphasis supplied)
In Dunlop, in which the labor organization that filed a petition for certification election was
one for supervisory employees, but in which the membership included rank-and-file
employees, the Court reiterated that such labor organization had no legal right to file a
certification election to represent a bargaining unit composed of supervisors for as long as
it counted rank-and-file employees among its members.
It should be emphasized that the petitions for certification election involved
in Toyota and Dunlop were filed on November 26, 1992 and September 15, 1995,
respectively; hence, the 1989 Rules was applied in both cases.
But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by
Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the
requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules that the petition for
certification election indicate that the bargaining unit of rank-and-file employees has not
been mingled with supervisory employees was removed. Instead, what the 1997 Amended
Omnibus Rules requires is a plain description of the bargaining unit, thus:
Rule XI
49
Certification Elections
xxxx
Sec. 4. Forms and contents of petition. - The petition shall be in writing and under oath and
shall contain, among others, the following: x x x (c) The description of the bargaining unit.
In Pagpalain Haulers, Inc. v. Trajano, the Court had occasion to uphold the validity of the
1997 Amended Omnibus Rules, although the specific provision involved therein was only
Sec. 1, Rule VI, to wit:
Section. 1. Chartering and creation of a local/chapter.- A duly registered federation or
national union may directly create a local/chapter by submitting to the Regional Office or
to the Bureau two (2) copies of the following: a) a charter certificate issued by the
federation or national union indicating the creation or establishment of the local/chapter;
(b) the names of the local/chapter's officers, their addresses, and the principal office of the
local/chapter; and (c) the local/ chapter's constitution and by-laws; provided that where
the local/chapter's constitution and by-laws is the same as that of the federation or
national union, this fact shall be indicated accordingly.
All the foregoing supporting requirements shall be certified under oath by the Secretary or
the Treasurer of the local/chapter and attested to by its President.
which does not require that, for its creation and registration, a local or chapter submit a
list of its members.
Then came Tagaytay Highlands Int'l. Golf Club, Inc. v. Tagaytay Highlands Employees
Union-PGTWO in which the core issue was whether mingling affects the legitimacy of a
labor organization and its right to file a petition for certification election. This time, given
the altered legal milieu, the Court abandoned the view in Toyota and Dunlop and reverted
to its pronouncement in Lopez that while there is a prohibition against the mingling of
supervisory and rank-and-file employees in one labor organization, the Labor Code does
not provide for the effects thereof. Thus, the Court held that after a labor organization has
been registered, it may exercise all the rights and privileges of a legitimate labor
organization. Any mingling between supervisory and rank-and-file employees in its
membership cannot affect its legitimacy for that is not among the grounds for cancellation
of its registration, unless such mingling was brought about by misrepresentation, false
statement or fraud under Article 239 of the Labor Code.
In San Miguel Corp. (Mandaue Packaging Products Plants) v. Mandaue Packing Products
Plants-San Miguel Packaging Products-San Miguel Corp. Monthlies Rank-and-File Union-
FFW, the Court explained that since the 1997 Amended Omnibus Rules does not require a
local or chapter to provide a list of its members, it would be improper for the DOLE to deny
recognition to said local or chapter on account of any question pertaining to its individual
members.
More to the point is Air Philippines Corporation v. Bureau of Labor Relations, which
involved a petition for cancellation of union registration filed by the employer in 1999
against a rank-and-file labor organization on the ground of mixed membership: the Court
therein reiterated its ruling in Tagaytay Highlands that 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.
All said, while the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as
interpreted by the Court in Tagaytay Highlands, San Miguel and Air Philippines, had
already set the tone for it. Toyota and Dunlop no longer hold sway in the present altered
state of the law and the rules.[32] [Underline supplied]
The applicable law and rules in the instant case are the same as those
in Kawashimabecause the present petition for certification election was filed in 1999 when
D.O. No. 9, series of 1997, was still in effect. Hence, Kawashima applies with equal force
here. As a result, petitioner union was not divested of its status as a legitimate labor
organization even if some of its members were supervisory employees; it had the right to
file the subject petition for certification election.
The legal personality of petitioner union cannot be collaterally attacked by respondent
company in the certification election proceedings.
Petitioner union correctly argues that its legal personality cannot be collaterally attacked
in the certification election proceedings. As we explained in 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 amendments to the Labor Code and its implementing rules have buttressed that policy
even more.[33]
WHEREFORE, the petition is GRANTED. The March 15, 2005 Decision and September 16,
2005 Resolution of the Court of Appeals in CA-G.R. SP No. 58203 are REVERSED and SET
ASIDE. The January 13, 2000 Decision of the Department of Labor and Employment in OS-
A-6-53-99 (NCR-OD-M-9902-019) is REINSTATED.
No pronouncement as to costs.
SO ORDERED.
50
12.
G.R. No. 208986
HIJO RESOURCES CORPORATION, Petitioner,
vs.
EPIFANIO P. MEJARES, REMEGIO C. BAL URAN, JR., DANTE SAYCON, and CECILIO
CUCHARO, represented by NAMABDJERA-HRC, Respondents.
CARPIO, J.:
The Case
This petition for review1 assails the 29 August 2012 Decision2 and the 13 August 2013
Resolution3 of the Court of Appeals in CA-G.R. SP No. 04058-MIN. The Court of Appeals
reversed and set aside the Resolutions dated 29 June 2009 and 16 December 2009 of the
National Labor Relations Commission (NLRC) in NLRC No. MIC-03-000229-08 (RAB XI-09-
00774-2007), and remanded the case to the Regional Arbitration Branch, Region XI, Davao
City for further proceedings.
The Facts
Respondents Epifanio P. Mejares, Remegio C. Baluran, Jr., Dante Saycon, and Cecilio
Cucharo (respondents) were among the complainants, represented by their labor union
named "Nagkahiusang Mamumuo ng Bit, Djevon, at Raquilla Farms sa Hijo Resources
Corporation" (NAMABDJERA-HRC), who filed with the NLRC an illegal dismissal case against
petitioner Hijo Resources Corporation (HRC).
Complainants (which include the respondents herein) alleged that petitioner HRC,
formerly known as Hijo Plantation Incorporated (HPI), is the owner of agricultural lands in
Madum, Tagum, Davao del Norte, which were planted primarily with Cavendish bananas.
In 2000, HPI was renamed as HRC. In December 2003, HRC’s application for the conversion
of its agricultural lands into agri-industrial use was approved. The machineries and
equipment formerly used by HPI continued to be utilized by HRC.
Complainants claimed that they were employed by HPI as farm workers in HPI’s
plantations occupying various positions as area harvesters, packing house workers,
loaders, or labelers. In 2001, complainants were absorbed by HRC, but they were working
under the contractor-growers: Buenaventura Tano (Bit Farm); Djerame Pausa (Djevon
Farm); and Ramon Q. Laurente (Raquilla Farm). Complainants asserted that these
contractor-growers received compensation from HRC and were under the control of HRC.
They further alleged that the contractor-growers did not have their own capitalization,
farm machineries, and equipment.
On 1 July 2007, complainants formed their union NAMABDJERA-HRC, which was later
registered with the Department of Labor and Employment (DOLE). On 24 August 2007,
NAMABDJERA-HRC filed a petition for certification election before the DOLE.
When HRC learned that complainants formed a union, the three contractor-growers filed
with the DOLE a notice of cessation of business operations. In September 2007,
complainants were terminated from their employment on the ground of cessation of
business operations by the contractor-growers of HRC. On 19 September 2007,
complainants, represented by NAMABDJERA-HRC, filed a case for unfair labor practices,
illegal dismissal, and illegal deductions with prayer for moral and exemplary damages and
attorney’s fees before the NLRC.
On 19 November 2007, DOLE Med-Arbiter Lito A. Jasa issued an Order,4 dismissing
NAMABDJERA-HRC’s petition for certification election on the ground that there was no
employer-employee relationship between complainants (members of NAMABDJERA-HRC)
and HRC. Complainants did not appeal the Order of Med-Arbiter Jasa but pursued the
illegal dismissal case they filed.
On 4 January 2008, HRC filed a motion to inhibit Labor Arbiter Maria Christina S. Sagmit
and moved to dismiss the complaint for illegal dismissal. The motion to dismiss was
anchored on the following arguments: (1) Lack of jurisdiction under the principle of res
judicata; and (2) The Order of the Med-Arbiter finding that complainants were not
employees of HRC, which complainants did not appeal, had become final and executory.
The Labor Arbiter’s Ruling
On 5 February 2008, Labor Arbiter Sagmit denied the motion to inhibit. Labor Arbiter
Sagmit likewise denied the motion to dismiss in an Order dated 12 February 2008. Labor
Arbiter Sagmit held that res judicata does not apply. Citing the cases of Manila Golf &
Country Club, Inc. v. IAC5 and Sandoval Shipyards, Inc. v. Pepito,6 the Labor Arbiter ruled
that the decision of the Med-Arbiter in a certification election case, by the nature of that
proceedings, does not foreclose further dispute between the parties as to the existence or
non-existence of employer-employee relationship between them. Thus, the finding of
Med-Arbiter Jasa that no employment relationship exists between HRC and complainants
does not bar the Labor Arbiter from making his own independent finding on the same
issue. The non-litigious nature of the proceedings before the Med-Arbiter does not
prevent the Labor Arbiter from hearing and deciding the case. Thus, Labor Arbiter Sagmit
denied the motion to dismiss and ordered the parties to file their position papers.
HRC filed with the NLRC a petition for certiorari with a prayer for temporary restraining
order, seeking to nullify the 5 February 2008 and 12 February 2008 Orders of Labor Arbiter
Sagmit.
The Ruling of the NLRC
The NLRC granted the petition, holding that Labor Arbiter Sagmit gravely abused her
discretion in denying HRC’s motion to dismiss. The NLRC held that the Med-Arbiter Order
dated 19 November 2007 dismissing the certification election case on the ground of lack of
employer-employee relationship between HRC and complainants (members of
NAMABDJERA-HRC) constitutes res judicata under the concept of conclusiveness of
judgment, and thus, warrants the dismissal of the case. The NLRC ruled that the Med-
Arbiter exercises quasi-judicial power and the Med-Arbiter’s decisions and orders have,
51
upon their finality, the force and effect of a final judgment within the purview of the
doctrine of res judicata.
On the issue of inhibition, the NLRC found it moot and academic in view of Labor Arbiter
Sagmit’s voluntary inhibition from the case as per Order dated 11 March 2009.
The Ruling of the Court of Appeals
The Court of Appeals found the ruling in the Sandoval case more applicable in this case.
The Court of Appeals noted that the Sandoval case, which also involved a petition for
certification election and an illegal dismissal case filed by the union members against the
alleged employer, is on all fours with this case. The issue in Sandoval on the effect of the
Med-Arbiter’s findings as to the existence of employer-employee relationship is the very
same issue raised in this case. On the other hand, the case of Chris Garments Corp. v. Hon.
Sto. Tomas7 cited by the NLRC, which involved three petitions for certification election
filed by the same union, is of a different factual milieu.
The Court of Appeals held that the certification proceedings before the Med-Arbiter are
non-adversarial and merely investigative. On the other hand, under Article 217 of the
Labor Code, the Labor Arbiter has original and exclusive jurisdiction over illegal dismissal
cases. Although the proceedings before the Labor Arbiter are also described as non-
litigious, the Court of Appeals noted that the Labor Arbiter is given wide latitude in
ascertaining the existence of employment relationship. Thus, unlike the Med-Artbiter, the
Labor Arbiter may conduct clarificatory hearings and even avail of ocular inspection to
ascertain facts speedily.
Hence, the Court of Appeals concluded that the decision in a certification election case
does not foreclose further dispute as to the existence or non-existence of an employer-
employee relationship between HRC and the complainants.
On 29 August 2012, the Court of Appeals promulgated its Decision, the dispositive portion
of which reads:
WHEREFORE, the petition is hereby GRANTED and the assailed Resolutions dated June 29,
2009 and December 16, 2009 of the National Labor Relations Commission are hereby
REVERSED AND SET ASIDE. Let NLRC CASE No. RAB-XI-09-00774-0707 be remanded to the
Regional Arbitration Branch, Region XI, Davao City for further proceedings.
SO ORDERED.8
The Issue
Whether the Court of Appeals erred in setting aside the NLRC ruling and remanding the
case to the Labor Arbiter for further proceedings.
The Ruling of the Court
We find the petition without merit.
There is no question that the Med-Arbiter has the authority to determine the existence of
an employer-employee relationship between the parties in a petition for certification
election. As held in M.Y. San Biscuits, Inc. v. Acting Sec. Laguesma:9
Under Article 226 of the Labor Code, as amended, the Bureau of Labor Relations (BLR), of
which the med-arbiter is an officer, has the following jurisdiction –
"ART. 226. Bureau of Labor Relations. – The Bureau of Labor Relations and the Labor
Relations Division[s] in the regional offices of the Department of Labor shall have original
and exclusive authority to act, at their own initiative or upon request of either or both
parties, on all inter-union and intra-union conflicts, and all disputes, grievances or
problems arising from or affecting labor-management relations in all workplaces whether
agricultural or non-agricultural, except those arising from the implementation or
interpretation of collective bargaining agreements which shall be the subject of grievance
procedure and/or voluntary arbitration.
The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to
extension by agreement of the parties." (Italics supplied)
From the foregoing, the BLR has the original and exclusive jurisdiction to inter alia, decide
all disputes, grievances or problems arising from or affecting labor-management relations
in all workplaces whether agricultural or non-agricultural. Necessarily, in the exercise of
this jurisdiction over labor-management relations, the med-arbiter has the authority,
original and exclusive, to determine the existence of an employer-employee relationship
between the parties.
Apropos to the present case, once there is a determination as to the existence of such a
relationship, the med-arbiter can then decide the certification election case.1âwphi1 As
the authority to determine the employer-employee relationship is necessary and
indispensable in the exercise of jurisdiction by the med-arbiter, his finding thereon may
only be reviewed and reversed by the Secretary of Labor who exercises appellate
jurisdiction under Article 259 of the Labor Code, as amended, which provides –
"ART. 259. Appeal from certification election orders. – Any party to an election may appeal
the order or results of the election as determined by the Med-Arbiter directly to the
Secretary of Labor and Employment on the ground that the rules and regulations or parts
thereof established by the Secretary of Labor and Employment for the conduct of the
election have been violated. Such appeal shall be decided within fifteen (15) calendar
days."10
In this case, the Med-Arbiter issued an Order dated 19 November 2007, dismissing the
certification election case because of lack of employer-employee relationship between
HRC and the members of the respondent union. The order dismissing the petition was
issued after the members of the respondent union were terminated from their
employment in September 2007, which led to the filing of the illegal dismissal case before
the NLRC on 19 September 2007. Considering their termination from work, it would have
been futile for the members of the respondent union to appeal the Med-Arbiter’s order in
the certification election case to the DOLE Secretary. Instead, they pursued the illegal
dismissal case filed before the NLRC.
52
The Court is tasked to resolve the issue of whether the Labor Arbiter, in the illegal
dismissal case, is bound by the ruling of the Med-Arbiter regarding the existence or non-
existence of employer-employee relationship between the parties in the certification
election case.
The Court rules in the negative. As found by the Court of Appeals, the facts in this case are
very similar to those in the Sandoval case, which also involved the issue of whether the
ruling in a certification election case on the existence or non-existence of an employer-
employee relationship operates as res judicata in the illegal dismissal case filed before the
NLRC. In Sandoval, the DOLE Undersecretary reversed the finding of the Med-Arbiter in a
certification election case and ruled that there was no employer-employee relationship
between the members of the petitioner union and Sandoval Shipyards, Inc. (SSI), since the
former were employees of the subcontractors. Subsequently, several illegal dismissal cases
were filed by some members of the petitioner union against SSI. Both the Labor Arbiter
and the NLRC ruled that there was no employer-employee relationship between the
parties, citing the resolution of the DOLE Undersecretary in the certification election case.
The Court of Appeals reversed the NLRC ruling and held that the members of the
petitioner union were employees of SSI. On appeal, this Court affirmed the appellate
court’s decision and ruled that the Labor Arbiter and the NLRC erred in relying on the
pronouncement of the DOLE Undersecretary that there was no employer-employee
relationship between the parties. The Court cited the ruling in the Manila Golf11 case that
the decision in a certification election case, by the very nature of that proceeding, does not
foreclose all further dispute between the parties as to the existence or non-existence of an
employer-employee relationship between them.
This case is different from the Chris Garments case cited by the NLRC where the Court held
that the matter of employer-employee relationship has been resolved with finality by the
DOLE Secretary, whose factual findings were not appealed by the losing party. As
mentioned earlier, the Med-Arbiter’s order in this case dismissing the petition for
certification election on the basis of non-existence of employer-employee relationship
was issued after the members of the respondent union were dismissed from their
employment. The purpose of a petition for certification election is to determine which
organization will represent the employees in their collective bargaining with the
employer.12 The respondent union, without its member-employees, was thus stripped of
its personality to challenge the Med-Arbiter’s decision in the certification election case.
Thus, the members of the respondent union were left with no option but to pursue their
illegal dismissal case filed before the Labor Arbiter. To dismiss the illegal dismissal case
filed before the Labor Arbiter on the basis of the pronouncement of the Med-Arbiter in the
certification election case that there was no employer-employee relationship between the
parties, which the respondent union could not even appeal to the DOLE Secretary because
of the dismissal of its members, would be tantamount to denying due process to the
complainants in the illegal dismissal case. This, we cannot allow.
WHEREFORE, we DENY the petition. We AFFIRM the 29 August 2012 Decision and the 13
August 2013 Resolution of the Court of Appeals in CA-G.R. SP No. 04058-MIN.
SO ORDERED.
13.
NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED INDUSTRIES-
MANILA PAVILION HOTEL CHAPTER, Petitioner,
- versus –
SECRETARY OF LABOR AND EMPLOYMENT, BUREAU OF LABOR RELATIONS, HOLIDAY INN
MANILA PAVILION HOTEL LABOR UNION AND ACESITE PHILIPPINES HOTEL
CORPORATION, Respondents.
G.R. No. 181531
July 31, 2009
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CARPIO MORALES, J.:
National Union of Workers in Hotels, Restaurants and Allied Industries Manila Pavilion
Hotel Chapter (NUWHRAIN-MPHC), herein petitioner, seeks the reversal of the Court of
Appeals November 8, 2007 Decision[1] and of the Secretary of Labor and Employments
January 25, 2008 Resolution[2] in OS-A-9-52-05 which affirmed the Med-Arbiters
Resolutions dated January 22, 2007[3] and March 22, 2007.[4]
A certification election was conducted on June 16, 2006 among the rank-and-file
employees of respondent Holiday Inn Manila Pavilion Hotel (the Hotel) with the following
results:
EMPLOYEES IN VOTERS LIST = 353
TOTAL VOTES CAST = 346
NUWHRAIN-MPHC = 151
HIMPHLU = 169
NO UNION = 1
SPOILED = 3
SEGREGATED = 22
In view of the significant number of segregated votes, contending unions, petitioner,
NUHWHRAIN-MPHC, and respondent Holiday Inn Manila Pavillion Hotel Labor Union
(HIMPHLU), referred the case back to Med-Arbiter Ma. Simonette Calabocal to decide
which among those votes would be opened and tallied. Eleven (11) votes were initially
segregated because they were cast by dismissed employees, albeit the legality of their
dismissal was still pending before the Court of Appeals. Six other votes were segregated
because the employees who cast them were already occupyingsupervisory positions at the
time of the election. Still five other votes were segregated on the ground that they were
cast by probationary employees and, pursuant to the existing Collective Bargaining
53
Agreement (CBA), such employees cannot vote. It bears noting early on, however, that the
vote of one Jose Gatbonton (Gatbonton), a probationary employee, was counted.
By Order of August 22, 2006, Med-Arbiter Calabocal ruled for the opening of 17 out of the
22 segregated votes, specially those cast by the 11 dismissed employees and those cast by
the six supposedly supervisory employees of the Hotel.
Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment
(SOLE), arguing that the votes of the probationary employees should have been opened
considering that probationary employee Gatbontons vote was tallied. And petitioner
averred that respondent HIMPHLU, which garnered 169 votes, should not be immediately
certified as the bargaining agent, as the opening of the 17 segregated ballots would push
the number of valid votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 votes which
HIMPHLU garnered would be one vote short of the majority which would then become
169.
By the assailed Resolution of January 22, 2007, the Secretary of Labor and Employment
(SOLE), through then Acting Secretary Luzviminda Padilla, affirmed the Med-Arbiters
Order. It held that pursuant to Section 5, Rule IX of the Omnibus Rules Implementing the
Labor Code on exclusion and inclusion of voters in a certification election, the probationary
employees cannot vote, as at the time the Med-Arbiter issued on August 9, 2005 the Order
granting the petition for the conduct of the certification election, the six probationary
employees were not yet hired, hence, they could not vote.
The SOLE further held that, with respect to the votes cast by the 11 dismissed employees,
they could be considered since their dismissal was still pending appeal.
As to the votes cast by the six alleged supervisory employees, the SOLE held that their
votes should be counted since their promotion took effect months after the issuance of
the above-said August 9, 2005 Order of the Med-Arbiter, hence, they were still considered
as rank-and-file.
Respecting Gatbontons vote, the SOLE ruled that the same could be the basis to include
the votes of the other probationary employees, as the records show that during the pre-
election conferences, there was no disagreement as to his inclusion in the voters list, and
neither was it timely challenged when he voted on election day, hence, the Election Officer
could not then segregate his vote.
The SOLE further ruled that even if the 17 votes of the dismissed and supervisory
employees were to be counted and presumed to be in favor of petitioner, still, the same
would not suffice to overturn the 169 votes garnered by HIMPHLU.
In fine, the SOLE concluded that the certification of HIMPHLU as the exclusive bargaining
agent was proper.
Petitioners motion for reconsideration having been denied by the SOLE by Resolution of
March 22, 2007, it appealed to the Court of Appeals.
By the assailed Decision promulgated on November 8, 2007, the appellate
court affirmedthe ruling of the SOLE. It held that, contrary to petitioners assertion, the
ruling in Airtime Specialist, Inc. v. Ferrer Calleja[5] stating that in a certification election, all
rank-and-file employees in the appropriate bargaining unit, whether probationary or
permanent, are entitled to vote, is inapplicable to the case at bar. For, the appellate court
continued, the six probationary employees were not yet employed by the Hotel at the
time the August 9, 2005 Order granting the certification election was issued. It thus held
that Airtime Specialist applies only to situations wherein the probationary employees
were already employed as of the date of filing of the petition for certification election.
Respecting Gatbontons vote, the appellate court upheld the SOLEs finding that since it was
not properly challenged, its inclusion could no longer be questioned, nor could it be made
the basis to include the votes of the six probationary employees.
The appellate court brushed aside petitioners contention that the opening of the 17
segregated votes would materially affect the results of the election as there would be the
likelihood of a run-off election in the event none of the contending unions receive a
majority of the valid votes cast. It held that the majority contemplated in deciding which of
the unions in a certification election is the winner refers to the majority of valid votes cast,
not the simple majority of votes cast, hence, the SOLE was correct in ruling that even if the
17 votes were in favor of petitioner, it would still be insufficient to overturn the results of
the certification election.
Petitioners motion for reconsideration having been denied by Resolution of January 25,
2008, the present recourse was filed.
Petitioners contentions may be summarized as follows:
1. Inclusion of Jose Gatbontons vote but excluding the vote of the six other
probationary employees violated the principle of equal protection and is not in accord
with the ruling in Airtime Specialists, Inc. v. Ferrer-Calleja;
2. The time of reckoning for purposes of determining when the probationary
employees can be allowed to vote is not August 9, 2005 the date of issuance by Med-
Arbiter Calabocal of the Order granting the conduct of certification elections, but March
10, 2006 the date the SOLE Order affirmed the Med-Arbiters Order.
3. Even if the votes of the six probationary employees were included, still, HIMPHLU
could not be considered as having obtained a majority of the valid votes cast as the
opening of the 17 ballots would increase the number of valid votes from 321 to 338,
hence, for HIMPHLU to be certified as the exclusive bargaining agent, it should have
garnered at least 170, not 169, votes.
Petitioner justifies its not challenging Gatbontons vote because it was precisely its position
that probationary employees should be allowed to vote. It thus avers that justice and
equity dictate that since Gatbontons vote was counted, then the votes of the 6 other
probationary employees should likewise be included in the tally.
54
Petitioner goes on to posit that the word order in Section 5, Rule 9 of Department Order
No. 40-03 reading [A]ll employees who are members of the appropriate bargaining unit
sought to be represented by the petitioner at the time of the issuance of the ordergranting
the conduct of certification election shall be allowed to vote refers to an order which has
already become final and executory, in this case the March 10, 2002 Order of the SOLE.
Petitioner thus concludes that if March 10, 2006 is the reckoning date for the
determination of the eligibility of workers, then all the segregated votes cast by the
probationary employees should be opened and counted, they having already been
working at the Hotel on such date.
Respecting the certification of HIMPHLU as the exclusive bargaining agent, petitioner
argues that the same was not proper for if the 17 votes would be counted as valid, then
the total number of votes cast would have been 338, not 321, hence, the majority would
be 170; as such, the votes garnered by HIMPHLU is one vote short of the majority for it to
be certified as the exclusive bargaining agent.
The relevant issues for resolution then are first, whether employees on probationary
status at the time of the certification elections should be allowed to vote, and second,
whether HIMPHLU was able to obtain the required majority for it to be certified as the
exclusive bargaining agent.
On the first issue, the Court rules in the affirmative.
The inclusion of Gatbontons vote was proper not because it was not questioned but
because probationary employees have the right to vote in a certification election. The
votes of the six other probationary employees should thus also have been
counted. As Airtime Specialists, Inc. v. Ferrer-Calleja holds:
In a certification election, all rank and file employees in the appropriate bargaining unit,
whether probationary or permanent are entitled to vote. This principle is clearly stated in
Art. 255 of the Labor Code which states that the labor organization designated or selected
by the majority of the employees in an appropriate bargaining unit shall be the exclusive
representative of the employees in such unit for purposes of collective bargaining.
Collective bargaining covers all aspects of the employment relation and the resultant CBA
negotiated by the certified union binds all employees in the bargaining unit. Hence, all
rank and file employees, probationary or permanent, have a substantial interest in the
selection of the bargaining representative.The Code makes no distinction as to their
employment status as basis for eligibility in supporting the petition for certification
election. The law refers to all the employees in the bargaining unit. All they need to be
eligible to support the petition is to belong to the bargaining unit. (Emphasis supplied)
Rule II, Sec. 2 of Department Order No. 40-03, series of 2003, which amended Rule XI of
the Omnibus Rules Implementing the Labor Code, provides:
Rule II
Section 2. Who may join labor unions and workers' associations. - All persons employed
in commercial, industrial and agricultural enterprises, including employees of government
owned or controlled corporations without original charters established under the
Corporation Code, as well as employees of religious, charitable, medical or educational
institutions whether operating for profit or not, shall have the right to self-organization
and to form, join or assist labor unions for purposes of collective bargaining: provided,
however, that supervisory employees shall not be eligible for membership in a labor union
of the rank-and-file employees but may form, join or assist separate labor unions of their
own. Managerial employees shall not be eligible to form, join or assist any labor unions for
purposes of collective bargaining. Alien employees with valid working permits issued by
the Department may exercise the right to self-organization and join or assist labor unions
for purposes of collective bargaining if they are nationals of a country which grants the
same or similar rights to Filipino workers, as certified by the Department of Foreign Affairs.
For purposes of this section, any employee, whether employed for a definite period or
not, shall beginning on the first day of his/her service, be eligible for membership in any
labor organization.
All other workers, including ambulant, intermittent and other workers, the self-employed,
rural workers and those without any definite employers may form labor organizations for
their mutual aid and protection and other legitimate purposes except collective
bargaining. (Emphasis supplied)
The provision in the CBA disqualifying probationary employees from voting cannot
override the Constitutionally-protected right of workers to self-organization, as well as the
provisions of the Labor Code and its Implementing Rules on certification elections and
jurisprudence thereon.
A law is read into, and forms part of, a contract. Provisions in a contract are valid only if
they are not contrary to law, morals, good customs, public order or public policy.[6]
Rule XI, Sec. 5 of D.O. 40-03, on which the SOLE and the appellate court rely to support
their position that probationary employees hired after the issuance of the Order granting
the petition for the conduct of certification election must be excluded, should not be read
in isolation and must be harmonized with the other provisions of D.O. Rule XI, Sec. 5 of
D.O. 40-03, viz:
Rule XI
xxxx
Section 5. Qualification of voters; inclusion-exclusion. - All employees who are members
of the appropriate bargaining unit sought to be represented by the petitioner at the time
of the issuance of the order granting the conduct of a certification election shall be
eligible to vote. An employee who has been dismissed from work but has contested the
legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance of
the order for the conduct of a certification election shall be considered a qualified voter,
unless his/her dismissal was declared valid in a final judgment at the time of the conduct
of the certification election. (Emphasis supplied)
55

xxxx
Section 13. Order/Decision on the petition. - Within ten (10) days from the date of the last
hearing, the Med-Arbiter shall issue a formal order granting the petition or a decision
denying the same. In organized establishments, however, no order or decision shall be
issued by the Med-Arbiter during the freedom period.
The order granting the conduct of a certification election shall state the following:
(a) the name of the employer or establishment;
(b) the description of the bargaining unit;
(c) a statement that none of the grounds for dismissal enumerated in the succeeding
paragraph exists;
(d) the names of contending labor unions which shall appear as follows: petitioner union/s
in the order in which their petitions were filed, forced intervenor, and no union; and
(e) a directive upon the employer and the contending union(s) to submit within ten (10)
days from receipt of the order, the certified list of employees in the bargaining unit, or
where necessary, the payrolls covering the members of the bargaining unit for the last
three (3) months prior to the issuance of the order. (Emphasis supplied)
xxxx
Section 21. Decision of the Secretary. - The Secretary shall have fifteen (15) days from
receipt of the entire records of the petition within which to decide the appeal. The filing of
the memorandum of appeal from the order or decision of the Med-Arbiter staysthe
holding of any certification election.
The decision of the Secretary shall become final and executory after ten (10) days from
receipt thereof by the parties. No motion for reconsideration of the decision shall be
entertained. (Emphasis supplied)
In light of the immediately-quoted provisions, and prescinding from the principle that all
employees are, from the first day of their employment, eligible for membership in a labor
organization, it is evident that the period of reckoning in determining who shall be
included in the list of eligible voters is, in cases where a timely appeal has been
filedfrom the Order of the Med-
Arbiter, the date when the Order of the Secretary of Laborand Employment,
whether affirming or denying the appeal, becomes final andexecutory.
The filing of an appeal to the SOLE from the Med-Arbiters Order stays its execution, in
accordance with Sec. 21, and rationally, the Med-Arbiter cannot direct the employer to
furnish him/her with the list of eligible voters pending the resolution of the appeal.
During the pendency of the appeal, the employer may hire additional employees.To
exclude the employees hired after the issuance of the Med-Arbiters Order but before the
appeal has been resolved would violate the guarantee that every employee has the right
to be part of a labor organization from the first day of their service.
In the present case, records show that the probationary employees, including Gatbonton,
were included in the list of employees in the bargaining unit submitted by the Hotel
on May 25, 2006 in compliance with the directive of the Med-Arbiter after the appeal and
subsequent motion for reconsideration have been denied by the SOLE, rendering the Med-
Arbiters August 22, 2005 Order final and executory 10 days after the March 22, 2007
Resolution (denying the motion for reconsideration of the January 22 Order denying the
appeal), and rightly so. Because, for purposes of self-organization, those employees are, in
light of the discussion above, deemed eligible to vote.
A certification election is the process of determining the sole and exclusive bargaining
agent of the employees in an appropriate bargaining unit for purposes of collective
bargaining. Collective bargaining, refers to the negotiated contract between a legitimate
labor organization and the employer concerning wages, hours of work and all other terms
and conditions of employment in a bargaining unit.[7]
The significance of an employees right to vote in a certification election cannot thus be
overemphasized. For he has considerable interest in the determination of who shall
represent him in negotiating the terms and conditions of his employment.
Even if the Implementing Rules gives the SOLE 20 days to decide the appeal from the
Order of the Med-Arbiter, experience shows that it sometimes takes months to be
resolved. To rule then that only those employees hired as of the date of the issuance of
the Med-Arbiters Order are qualified to vote would effectively disenfranchise employees
hired during the pendency of the appeal. More importantly, reckoning the date of the
issuance of the Med-Arbiters Order as the cut-off date would render inutile the remedy of
appeal to the SOLE.
But while the Court rules that the votes of all the probationary employees should be
included, under the particular circumstances of this case and the period of time which it
took for the appeal to be decided, the votes of the six supervisory employees must be
excluded because at the time the certification elections was conducted, they had ceased
to be part of the rank and file, their promotion having taken effect two months before the
election.
As to whether HIMPHLU should be certified as the exclusive bargaining agent, the Court
rules in the negative. It is well-settled that under the so-called double majority rule, for
there to be a valid certification election, majority of the bargaining unit must have voted
AND the winning union must have garnered majority of the valid votes cast.
Prescinding from the Courts ruling that all the probationary employees votes should be
deemed valid votes while that of the supervisory employees should be excluded, it follows
that the number of valid votes cast would increase from 321 to 337.Under Art. 256 of the
Labor Code, the union obtaining the majority of the valid votes cast by the eligible voters
56
shall be certified as the sole and exclusive bargaining agent of all the workers in the
appropriate bargaining unit. This majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at
least 170.
HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not
able to obtain a majority vote. The position of both the SOLE and the appellate court that
the opening of the 17 segregated ballots will not materially affect the outcome of the
certification election as for, so they contend, even if such member were all in favor of
petitioner, still, HIMPHLU would win, is thus untenable.
It bears reiteration that the true importance of ascertaining the number of valid votes cast
is for it to serve as basis for computing the required majority, and not just to determine
which union won the elections. The opening of the segregated but valid votes has thus
become material. To be sure, the conduct of a certification election has a two-fold
objective: to determine the appropriate bargaining unit and to ascertain the majority
representation of the bargaining representative, if the employees desire to be
represented at all by anyone. It is not simply the determination of who between two or
more contending unions won, but whether it effectively ascertains the will of the members
of the bargaining unit as to whether they want to be represented and which union they
want to represent them.
Having declared that no choice in the certification election conducted obtained the
required majority, it follows that a run-off election must be held to determine which
between HIMPHLU and petitioner should represent the rank-and-file employees.
A run-off election refers to an election between the labor unions receiving the two (2)
highest number of votes in a certification or consent election with three (3) or more
choices, where such a certified or consent election results in none of the three (3) or more
choices receiving the majority of the valid votes cast; provided that the total number of
votes for all contending unions is at least fifty percent (50%) of the number of votes
cast.[8] With 346 votes cast, 337 of which are now deemed valid and HIMPHLU having only
garnered 169 and petitioner having obtained 151 and the choice NO UNION receiving 1
vote, then the holding of a run-off election between HIMPHLU and petitioner is in order.
WHEREFORE, the petition is GRANTED. The Decision dated November 8, 2007 and
Resolution dated January 25, 2008 of the Court of Appeals affirming the Resolutions dated
January 22, 2007 and March 22, 2007, respectively, of the Secretary of Labor and
Employment in OS-A-9-52-05 are ANNULLED and SET ASIDE.
The Department of Labor and Employment-Bureau of Labor Relations is DIRECTED to
cause the holding of a run-off election between petitioner, National Union of Workers in
Hotels, Restaurants and Allied Industries-Manila Pavilion Hotel Chapter (NUWHRAIN-MPC),
and respondent Holiday Inn Manila Pavilion Hotel Labor Union (HIMPHLU).
SO ORDERED.
14.
G.R. No. 201595
ALLAN M. MENDOZA, Petitioner,
vs.
OFFICERS OF MANILA WATER EMPLOYEES UNION (MWEU), namely, EDUARDO B.
BORELA, BUENAVENTURA QUEBRAL, ELIZABETH COMETA, ALEJANDRO TORRES,
AMORSOLO TIERRA, SOLEDAD YEBAN, LUIS RENDON, VIRGINIA APILADO, TERESITA
BOLO, ROGELIO BARBERO, JOSE CASAÑAS, ALFREDO MAGA, EMILIO FERNANDEZ, ROSITA
BUENA VENTURA, ALMENIO CANCINO, ADELA IMANA, MARIO MANCENIDO, WILFREDO
MANDILAG, ROLANDO MANLAP AZ, EFREN MONTEMAYOR, NELSON PAGULAYAN,
CARLOS VILLA, RIC BRIONES, and CHITO BERNARDO, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the April 24, 2012 Decision2 of the Court of
Appeals (CA) which dismissed the Petition for Certiorari3 in CA-G.R. SP No. 115639.
Factual Antecedents
Petitioner was a member of the Manila Water Employees Union (MWEU), a Department of
Labor and Employment (DOLE)-registered labor organization consisting of rank-and-file
employees within Manila Water Company (MWC). The respondents herein named –
Eduardo B. Borela (Borela), Buenaventura Quebral (Quebral), Elizabeth Cometa (Cometa),
Alejandro Torres (Torres), Amorsolo Tierra (Tierra), Soledad Yeban (Yeban), Luis Rendon
(Rendon), Virginia Apilado (Apilado), Teresita Bolo (Bolo), Rogelio Barbero (Barbero), Jose
Casañas (Casañas), Alfredo Maga (Maga), Emilio Fernandez (Fernandez), Rosita
Buenaventura (Buenaventura), Almenio Cancino (Cancino), Adela Imana, Mario Mancenido
(Mancenido), Wilfredo Mandilag (Mandilag), Rolando Manlapaz (Manlapaz), Efren
Montemayor (Montemayor), Nelson Pagulayan, Carlos Villa, Ric Briones, and Chito
Bernardo – were MWEU officers during the period material to this Petition, with Borela as
President and Chairman of the MWEU Executive Board, Quebral as First Vice-President and
Treasurer, and Cometa as Secretary.4
In an April 11, 2007 letter,5 MWEU through Cometa informed petitioner that the union
was unable to fully deduct the increased P200.00 union dues from his salary due to lack of
the required December 2006 check-off authorization from him. Petitioner was warned that
his failure to pay the union dues would result in sanctions upon him. Quebral informed
Borela, through a May 2, 2007 letter,6 that for such failure to pay the union dues,
petitioner and several others violated Section 1(g), Article IX of the MWEU’s Constitution
and By-Laws.7 In turn, Borela referred the charge to the MWEU grievance committee for
investigation.
On May 21, 2007, a notice of hearing was sent to petitioner, who attended the scheduled
hearing. On June 6, 2007, the MWEU grievance committee recommended that petitioner
be suspended for 30 days.
57
In a June 20, 2007 letter,8 Borela informed petitioner and his corespondents of the MWEU
Executive Board’s "unanimous approval"9 of the grievance committee’s recommendation
and imposition upon them of a penalty of 30 days suspension, effective June 25, 2007.
In a June 26, 2007 letter10 to Borela, petitioner and his co-respondents took exception to
the imposition and indicated their intention to appeal the same to the General
Membership Assembly in accordance with Section 2(g), Article V of the union’s
Constitution and By-Laws,11 which grants them the right to appeal any arbitrary resolution,
policy and rule promulgated by the Executive Board to the General Membership Assembly.
In a June 28, 2007 reply,12 Borela denied petitioner’s appeal, stating that the prescribed
period for appeal had expired.
Petitioner and his co-respondents sent another letter13 on July 4, 2007, reiterating their
arguments and demanding that the General Membership Assembly be convened in order
that their appeal could be taken up. The letter was not acted upon.
Petitioner was once more charged with non-payment of union dues, and was required to
attend an August 3, 2007 hearing.14 Thereafter, petitioner was again penalized with a 30-
day suspension through an August 21, 2007 letter15 by Borela informing petitioner of the
Executive Board’s "unanimous approval"16 of the grievance committee recommendation
to suspend him effective August 24, 2007, to which he submitted a written
reply,17 invoking his right to appeal through the convening of the General Membership
Assembly. However, the respondents did not act on petitioner’s plea.
Meanwhile, MWEU scheduled an election of officers on September 14, 2007. Petitioner
filed his certificate of candidacy for Vice-President, but he was disqualified for not being a
member in good standing on account of his suspension.
On October 2, 2007, petitioner was charged with non-payment of union dues for the third
time. He did not attend the scheduled hearing. This time, he was meted the penalty of
expulsion from the union, per "unanimous approval"18 of the members of the Executive
Board. His pleas for an appeal to the General Membership Assembly were once more
unheeded.19
In 2008, during the freedom period and negotiations for a new collective bargaining
agreement (CBA) with MWC, petitioner joined another union, the Workers Association for
Transparency, Empowerment and Reform, All-Filipino Workers Confederation (WATER-
AFWC). He was elected union President. Other MWEU members were inclined to join
WATER-AFWC, but MWEU director Torres threatened that they would not get benefits
from the new CBA.20
The MWEU leadership submitted a proposed CBA which contained provisions to the effect
that in the event of retrenchment, non-MWEU members shall be removed first, and that
upon the signing of the CBA, only MWEU members shall receive a signing bonus. 21
Ruling of the Labor Arbiter
On October 13, 2008, petitioner filed a Complaint22
against respondents for unfair labor
practices, damages, and attorney’s fees before the National Labor Relations Commission
(NLRC), Quezon City, docketed as NLRC Case No. NCR-10-14255-08. In his Position Paper
and other written submissions,23 petitioner accused the respondents of illegal termination
from MWEU in connection with the events relative to his non-payment of union dues;
unlawful interference, coercion, and violation of the rights of MWC employees to self-
organization – in connection with the proposed CBA submitted by MWEU leadership,
which petitioner claims contained provisions that discriminated against non-MWEU
members. Petitioner prayed in his Supplemental Position Paper that respondents be held
guilty of unfair labor practices and ordered to indemnify him moral damages in the
amount of P100,000.00, exemplary damages amounting to P50,000.00, and 10%
attorney’s fees.
In their joint Position Paper and other pleadings,24 respondents claimed that the Labor
Arbiter had no jurisdiction over the dispute, which is intra-union in nature; that the Bureau
of Labor Relations (BLR) was the proper venue, in accordance with Article 226 of the Labor
Code25 and Section 1, Rule XI of Department Order 40-03, series of 2003, of the
DOLE;26 and that they were not guilty of unfair labor practices, discrimination, coercion or
restraint.
On May 29, 2009, Labor Arbiter Virginia T. Luyas-Azarraga issued her Decision27 which
decreed as follows:
Indeed the filing of the instant case is still premature. Section 5, Article X-Investigation
Procedures and Appeal Process of the Union Constitution and By-Laws provides that:
Section 5. Any dismissed and/or expelled member shall have the rights to appeal to the
Executive Board within seven (7) days from the date of notice of the said dismissal and/or
expulsion, which in [turn] shall be referred to the General Membership Assembly. In case
of an appeal, a simple majority of the decision of the Executive Board is imperative. The
same shall be approved/disapproved by a majority vote of the general membership
assembly in a meeting duly called for the purpose.
On the basis of the foregoing, the parties shall exhaust first all the administrative remedies
before resorting to compulsory arbitration. Thus, instant case is referred back to the Union
for the General Assembly to act or deliberate complainant’s appeal on the decision of the
Executive Board.
WHEREFORE PREMISES CONSIDERED, instant case is referred back to the Union level for
the General Assembly to act on complainant’s appeal.
SO ORDERED.28
Ruling of the National Labor Relations Commission
Petitioner appealed before the NLRC, where the case was docketed as NLRC LAC No. 07-
001913-09. On March 15, 2010, the NLRC issued its Decision,29 declaring as follows:
Complainant30 imputes serious error to the Labor Arbiter when she decided as follows:
58
a. Referring back the subject case to the Union level for the General Assembly to act on his
appeal.
b. Not ruling that respondents are guilty of ULP as charged.
c. Not granting to complainant moral and exemplary damages and attorney’s fees.
Complainant, in support of his charges, claims that respondents restrained or coerced him
in the exercise of his right as a union member in violation of paragraph "a", Article 249 of
the Labor Code,31particularly, in denying him the explanation as to whether there was
observance of the proper procedure in the increase of the membership dues from P100.00
to P200.00 per month. Further, complainant avers that he was denied the right to appeal
his suspension and expulsion in accordance with the provisions of the Union’s Constitution
and By-Laws. In addition, complainant claims that respondents attempted to cause the
management to discriminate against the members of WATER-AFWC thru the proposed
CBA.
Pertinent to the issue then on hand, the Labor Arbiter ordered that the case be referred
back to the Union level for the General Assembly to act on complainant’s appeal. Hence,
these appeals.
After a careful look at all the documents submitted and a meticulous review of the facts,
We find that this Commission lacks the jurisdictional competence to act on this case.
Article 217 of the Labor Code,32 as amended, specifically enumerates the cases over which
the Labor Arbiters and the Commission have original and exclusive jurisdiction. A perusal
of the record reveals that the causes of action invoked by complainant do not fall under
any of the enumerations therein. Clearly, We have no jurisdiction over the same.
Moreover, pursuant to Section 1, Rule XI, as amended, DOLE Department Order No. 40-03
in particular, Item A, paragraphs (h) and (j) and Item B, paragraph (a)(3), respectively,
provide:
"A. Inter-Intra-Union disputes shall include:
"(h) violation of or disagreements over any provision of the Constitution and By-Laws of a
Union or workers’ association.
"(j) violation of the rights and conditions of membership in a Union or workers’ association.
"B. Other Labor Relations disputes, not otherwise covered by Article 217 of the Labor Code,
shall include –
"3. a labor union and an individual who is not a member of said union."
Clearly, the above-mentioned disputes and conflict fall under the jurisdiction of the Bureau
of Labor Relations, as these are inter/intra-union disputes.
WHEREFORE, the decision of the Labor Arbiter a quo dated May 29, 2009 is hereby
declared NULL and VOID for being rendered without jurisdiction and the instant complaint
is DISMISSED.
SO ORDERED.33
Petitioner moved for reconsideration,34 but in a June 16, 2010 Resolution,35 the motion
was denied and the NLRC sustained its Decision.
Ruling of the Court of Appeals
In a Petition for Certiorari36 filed with the CA and docketed as CA-G.R. SP No. 115639,
petitioner sought to reverse the NLRC Decision and be awarded his claim for damages and
attorney’s fees on account of respondents’ unfair labor practices, arguing among others
that his charge of unfair labor practices is cognizable by the Labor Arbiter; that the fact
that the dispute is inter- or intra-union in nature cannot erase the fact that respondents
were guilty of unfair labor practices in interfering and restraining him in the exercise of his
right to self-organization as member of both MWEU and WATER-AFWC, and in
discriminating against him and other members through the provisions of the proposed
2008 CBA which they drafted; that his failure to pay the increased union dues was proper
since the approval of said increase was arrived at without observing the prescribed voting
procedure laid down in the Labor Code; that he is entitled to an award of damages and
attorney’s fees as a result of respondents’ illegal acts in discriminating against him; and
that in ruling the way it did, the NLRC committed grave abuse of discretion.
On April 24, 2012, the CA issued the assailed Decision containing the following
pronouncement:
The petition lacks merit.
Petitioner’s causes of action against MWEU are inter/intra-union disputes cognizable by
the BLR whose functions and jurisdiction are largely confined to union matters, collective
bargaining registry, and labor education. Section 1, Rule XI of Department Order (D.O.) No.
40-03, Series of 2003, of the Department of Labor and Employment enumerates instances
of inter/intra-union disputes, viz:
Section 1. Coverage. – Inter/intra-union disputes shall include:
xxxx
(b) conduct of election of union and workers’ association officers/nullification of election
of union and workers’ association officers;
(c) audit/accounts examination of union or workers’ association funds;
xxxx
(g) validity/invalidity of impeachment/ expulsion of union and workers’ association officers
and members;
59
xxxx
(j) violations of or disagreements over any provision in a union or workers’ association
constitution and by-laws;
xxxx
(l) violations of the rights and conditions of union or workers’ association membership;
xxxx
(n) such other disputes or conflicts involving the rights to self-organization, union
membership and collective bargaining –
(1) between and among legitimate labor organizations;
(2) between and among members of a union or workers’ association.
In brief, "Inter-Union Dispute" refers to any conflict between and among legitimate labor
unions involving representation questions for purposes of collective bargaining or to any
other conflict or dispute between legitimate labor unions. "Intra-Union Dispute" refers to
any conflict between and among union members, including grievances arising from any
violation of the rights and conditions of membership, violation of or disagreement over
any provision of the union’s constitution and by-laws, or disputes arising from chartering
or affiliation of union. On the other hand, the circumstances of unfair labor practices (ULP)
of a labor organization are stated in Article 249 of the Labor Code, to wit:
Article 249. Unfair labor practices of labor organizations. It shall be unlawful for labor
organization, its officers, agents, or representatives to commit any of the following unfair
labor practices:
(a) To restrain or coerce employees in the exercise of their right to self-organization;
Provided, That the labor organization shall have the right to prescribe its own rules with
respect to the acquisition or retention of membership;
(b) To cause or attempt to cause an employer to discriminate against an employee,
including discrimination against an employee with respect to whom membership in such
organization has been denied or terminated on any ground other than the usual terms and
conditions under which membership or continuation of membership is made available to
other members;
xxxx
Applying the aforementioned rules, We find that the issues arising from petitioner’s right
to information on the increased membership dues, right to appeal his suspension and
expulsion according to CBL provisions, and right to vote and be voted on are essentially
intra-union disputes; these involve violations of rights and conditions of union
membership. But his claim that a director of MWEU warned that non-MWEU members
would not receive CBA benefits is an inter-union dispute. It is more of an "interference" by
a rival union to ensure the loyalty of its members and to persuade non-members to join
their union. This is not an actionable wrong because interfering in the exercise of the right
to organize is itself a function of self-organizing.37 As long as it does not amount to
restraint or coercion, a labor organization may interfere in the employees’ right to self-
organization.38Consequently, a determination of validity or illegality of the alleged acts
necessarily touches on union matters, not ULPs, and are outside the scope of the labor
arbiter’s jurisdiction.
As regards petitioner’s other accusations, i.e., discrimination in terms of meting out the
penalty of expulsion against him alone, and attempt to cause the employer, MWC, to
discriminate against non-MWEU members in terms of retrenchment or reduction of
personnel, and signing bonus, while We may consider them as falling within the concept of
ULP under Article 249(a) and (b), still, petitioner’s complaint cannot prosper for lack of
substantial evidence. Other than his bare allegation, petitioner offered no proof that
MWEU did not penalize some union members who failed to pay the increased dues. On
the proposed discriminatory CBA provisions, petitioner merely attached the pages
containing the questioned provisions without bothering to reveal the MWEU
representatives responsible for the said proposal. Article 249 mandates that "x x x only the
officers, members of the governing boards, representatives or agents or members of labor
associations or organizations who have actually participated in, authorized or ratified
unfair labor practices shall be held criminally liable." Plain accusations against all MWEU
officers, without specifying their actual participation, do not suffice. Thus, the ULP charges
must necessarily fail.
In administrative and quasi-judicial proceedings, only substantial evidence is necessary to
establish the case for or against a party. Substantial evidence is that amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion.
Petitioner failed to discharge the burden of proving, by substantial evidence, the
allegations of ULP in his complaint. The NLRC, therefore, properly dismissed the case.
FOR THESE REASONS, the petition is DISMISSED.
SO ORDERED.39
Thus, the instant Petition.
Issue
In an August 28, 2013 Resolution,40 this Court resolved to give due course to the Petition,
which claims that the CA erred:
A. IN DECLARING THAT THE PRESENCE OF INTER/INTRA-UNION CONFLICTS NEGATES THE
COMPLAINT FOR UNFAIR LABOR PRACTICES AGAINST A LABOR ORGANIZATION AND ITS
OFFICERS, AND IN AFFIRMING THAT THE NLRC PROPERLY DISMISSED THE CASE FOR
ALLEGED LACK OF JURISDICTION.
B. IN NOT RULING THAT RESPONDENTS ARE GUILTY OF UNFAIR LABOR PRACTICES UNDER
ARTICLE 249(a) AND (b) OF THE LABOR CODE.
60
C. IN DECLARING THAT THE THREATS MADE BY A UNION OFFICER AGAINST MEMBERS OF A
RIVAL UNION IS (sic) MERELY AN "INTERFERENCE" AND DO NOT AMOUNT TO "RESTRAINT"
OR "COERCION".
D. IN DECLARING THAT PETITIONER FAILED TO PRESENT SUBSTANTIAL EVIDENCE IN
PROVING RESPONDENTS’ SPECIFIC ACTS OF UNFAIR LABOR PRACTICES.
E. IN NOT RULING THAT RESPONDENTS ARE SOLIDARILY LIABLE TO PETITIONER FOR
MORAL AND EXEMPLARY DAMAGES, AND ATTORNEY’S FEES.41
Petitioner’s Arguments
Praying that the assailed CA dispositions be set aside and that respondents be declared
guilty of unfair labor practices under Article 249(a) and (b) and adjudged liable for
damages and attorney’s fees as prayed for in his complaint, petitioner maintains in his
Petition and Reply42 that respondents are guilty of unfair labor practices which he clearly
enumerated and laid out in his pleadings below; that these unfair labor practices
committed by respondents fall within the jurisdiction of the Labor Arbiter; that the Labor
Arbiter, the NLRC, and the CA failed to rule on his accusation of unfair labor practices and
simply dismissed his complaint on the ground that his causes of action are intra- or inter-
union in nature; that admittedly, some of his causes of action involved intra- or inter-union
disputes, but other acts of respondents constitute unfair labor practices; that he presented
substantial evidence to prove that respondents are guilty of unfair labor practices by
failing to observe the proper procedure in the imposition of the increased monthly union
dues, and in unduly imposing the penalties of suspension and expulsion against him; that
under the union’s constitution and by-laws, he is given the right to appeal his suspension
and expulsion to the general membership assembly; that in denying him his rights as a
union member and expelling him, respondents are guilty of malice and evident bad faith;
that respondents are equally guilty for violating and curtailing his rights to vote and be
voted to a position within the union, and for discriminating against non-MWEU members;
and that the totality of respondents’ conduct shows that they are guilty of unfair labor
practices.
Respondent’s Arguments
In their joint Comment,43 respondents maintain that petitioner raises issues of fact which
are beyond the purview of a petition for review on certiorari; that the findings of fact of
the CA are final and conclusive; that the Labor Arbiter, NLRC, and CA are one in declaring
that there is no unfair labor practices committed against petitioner; that petitioner’s other
allegations fall within the jurisdiction of the BLR, as they refer to intra- or inter-union
disputes between the parties; that the issues arising from petitioner’s right to information
on the increased dues, right to appeal his suspension and expulsion, and right to vote and
be voted upon are essentially intra-union in nature; that his allegations regarding
supposed coercion and restraint relative to benefits in the proposed CBA do not constitute
an actionable wrong; that all of the acts questioned by petitioner are covered by Section 1,
Rule XI of Department Order 40-03, series of 2003 as intra-/inter-union disputes which do
not fall within the jurisdiction of the Labor Arbiter; that in not paying his union dues,
petitioner is guilty of insubordination and deserved the penalty of expulsion; that
petitioner failed to petition to convene the general assembly through the required
signature of 30% of the union membership in good standing pursuant to Article VI, Section
2(a) of MWEU’s Constitution and By-Laws or by a petition of the majority of the general
membership in good standing under Article VI, Section 3; and that for his failure to resort
to said remedies, petitioner can no longer question his suspension or expulsion and avail
of his right to appeal.
Our Ruling
The Court partly grants the Petition.
In labor cases, issues of fact are for the labor tribunals and the CA to resolve, as this Court
is not a trier of facts. However, when the conclusion arrived at by them is erroneous in
certain respects, and would result in injustice as to the parties, this Court must intervene
to correct the error. While the Labor Arbiter, NLRC, and CA are one in their conclusion in
this case, they erred in failing to resolve petitioner’s charge of unfair labor practices
against respondents.
It is true that some of petitioner’s causes of action constitute intra-union cases cognizable
by the BLR under Article 226 of the Labor Code.
An intra-union dispute refers to any conflict between and among union members,
including grievances arising from any violation of the rights and conditions of membership,
violation of or disagreement over any provision of the union’s constitution and by-laws, or
disputes arising from chartering or disaffiliation of the union. Sections 1 and 2, Rule XI of
Department Order No. 40-03, Series of 2003 of the DOLE enumerate the following
circumstances as inter/intra-union disputes x x x.44
However, petitioner’s charge of unfair labor practices falls within
the original and exclusive jurisdiction of the Labor Arbiters, pursuant to Article 217 of the
Labor Code. In addition, Article 247 of the same Code provides that "the civil aspects of all
cases involving unfair labor practices, which may include claims for actual, moral,
exemplary and other forms of damages, attorney’s fees and other affirmative relief, shall
be under the jurisdiction of the Labor Arbiters."
Unfair labor practices may be committed both by the employer under Article 248 and by
labor organizations under Article 249 of the Labor Code,45 which provides as follows:
ART. 249. Unfair labor practices of labor organizations. - It shall be unfair labor practice for
a labor organization, its officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their right to self-organization.
However, a labor organization shall have the right to prescribe its own rules with respect
to the acquisition or retention of membership;
(b) To cause or attempt to cause an employer to discriminate against an employee,
including discrimination against an employee with respect to whom membership in such
organization has been denied or to terminate an employee on any ground other than the
usual terms and conditions under which membership or continuation of membership is
made available to other members;
61
(c) To violate the duty, or refuse to bargain collectively with the employer, provided it is
the representative of the employees;
(d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver
any money or other things of value, in the nature of an exaction, for services which are not
performed or not to be performed, including the demand for fee for union negotiations;
(e) To ask for or accept negotiation or attorney’s fees from employers as part of the
settlement of any issue in collective bargaining or any other dispute; or
(f) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers, members of
governing boards, representatives or agents or members of labor associations or
organizations who have actually participated in, authorized or ratified unfair labor
practices shall be held criminally liable. (As amended by Batas Pambansa Bilang 130,
August 21, 1981).
Petitioner contends that respondents committed acts constituting unfair labor practices –
which charge was particularly laid out in his pleadings, but that the Labor Arbiter, the
NLRC, and the CA ignored it and simply dismissed his complaint on the ground that his
causes of action were intra- or inter-union in nature. Specifically, petitioner claims that he
was suspended and expelled from MWEU illegally as a result of the denial of his right to
appeal his case to the general membership assembly in accordance with the union’s
constitution and by-laws. On the other hand, respondents counter that such charge is
intra-union in nature, and that petitioner lost his right to appeal when he failed to petition
to convene the general assembly through the required signature of 30% of the union
membership in good standing pursuant to Article VI, Section 2(a) of MWEU’s Constitution
and By-Laws or by a petition of the majority of the general membership in good standing
under Article VI, Section 3.
Under Article VI, Section 2(a) of MWEU’s Constitution and By-Laws, the general
membership assembly has the power to "review revise modify affirm or repeal [sic]
resolution and decision of the Executive Board and/or committees upon petition of thirty
percent (30%) of the Union in good standing,"46 and under Section 2(d), to "revise, modify,
affirm or reverse all expulsion cases."47 Under Section 3 of the same Article, "[t]he decision
of the Executive Board may be appealed to the General Membership which by a simple
majority vote reverse the decision of said body. If the general Assembly is not in session
the decision of the Executive Board may be reversed by a petition of the majority of the
general membership in good standing."48 And, in Article X, Section 5, "[a]ny dismissed
and/or expelled member shall have the right to appeal to the Executive Board within seven
days from notice of said dismissal and/or expulsion which, in [turn] shall be referred to the
General membership assembly. In case of an appeal, a simple majority of the decision of
the Executive Board is imperative. The same shall be approved/disapproved by a majority
vote of the general membership assembly in a meeting duly called for the purpose."49
In regard to suspension of a union member, MWEU’s Constitution and By-Laws provides
under Article X, Section 4 thereof that "[a]ny suspended member shall have the right to
appeal within three (3) working days from the date of notice of said suspension. In case of
an appeal a simple majority of vote of the Executive Board shall be necessary to nullify the
suspension."
Thus, when an MWEU member is suspended, he is given the right to appeal such
suspension within three working days from the date of notice of said suspension, which
appeal the MWEU Executive Board is obligated to act upon by a simple majority vote.
When the penalty imposed is expulsion, the expelled member is given seven days from
notice of said dismissal and/or expulsion to appeal to the Executive Board, which is
required to act by a simple majority vote of its members. The Board’s decision shall then
be approved/ disapproved by a majority vote of the general membership assembly in a
meeting duly called for the purpose.1avvphi1
The documentary evidence is clear that when petitioner received Borela’s August 21, 2007
letter informing him of the Executive Board’s unanimous approval of the grievance
committee recommendation to suspend him for the second time effective August 24,
2007, he immediately and timely filed a written appeal. However, the Executive Board –
then consisting of respondents Borela, Tierra, Bolo, Casañas, Fernandez, Rendon,
Montemayor, Torres, Quebral, Pagulayan, Cancino, Maga, Cometa, Mancenido, and two
others who are not respondents herein – did not act thereon. Then again, when petitioner
was charged for the third time and meted the penalty of expulsion from MWEU by the
unanimous vote of the Executive Board, his timely appeal was again not acted upon by
said board – this time consisting of respondents Borela, Quebral, Tierra, Imana, Rendon,
Yeban, Cancino, Torres, Montemayor, Mancenido, Mandilag, Fernandez, Buenaventura,
Apilado, Maga, Barbero, Cometa, Bolo, and Manlapaz.
Thus, contrary to respondents’ argument that petitioner lost his right to appeal when he
failed to petition to convene the general assembly through the required signature of 30%
of the union membership in good standing pursuant to Article VI, Section 2(a) of MWEU’s
Constitution and By-Laws or by a petition of the majority of the general membership in
good standing under Article VI, Section 3, this Court finds that petitioner was illegally
suspended for the second time and thereafter unlawfully expelled from MWEU due to
respondents’ failure to act on his written appeals. The required petition to convene the
general assembly through the required signature of 30% (under Article VI, Section 2[a]) or
majority (under Article VI, Section 3) of the union membership does not apply in
petitioner’s case; the Executive Board must first act on his two appeals before the matter
could properly be referred to the general membership. Because respondents did not act
on his two appeals, petitioner was unceremoniously suspended, disqualified and deprived
of his right to run for the position of MWEU Vice-President in the September 14, 2007
election of officers, expelled from MWEU, and forced to join another union, WATER-AFWC.
For these, respondents are guilty of unfair labor practices under Article 249 (a) and (b) –
that is, violation of petitioner’s right to self-organization, unlawful discrimination, and
illegal termination of his union membership – which case falls within the original and
exclusive jurisdiction of the Labor Arbiters, in accordance with Article 217 of the Labor
Code.
The primary concept of unfair labor practices is stated in Article 247 of the Labor Code,
which states:
62
Article 247. Concept of unfair labor practice and procedure for prosecution thereof. ––
Unfair labor practices violate the constitutional right of workers and employees to self-
organization, are inimical to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the
promotion of healthy and stable labor-management relations.
"In essence, [unfair labor practice] relates to the commission of acts that transgress the
workers’ right to organize."50 "[A]ll the prohibited acts constituting unfair labor practice in
essence relate to the workers’ right to self-organization."51 "[T]he term unfair labor
practice refers to that gamut of offenses defined in the Labor Code which, at their core,
violates the constitutional right of workers and employees to self-organization."52
Guaranteed to all employees or workers is the ‘right to self-organization and to form, join,
or assist labor organizations of their own choosing for purposes of collective bargaining.’
This is made plain by no less than three provisions of the Labor Code of the Philippines.
Article 243 of the Code provides as follows:
ART. 243. Coverage and employees’ right to self-organization. — All persons employed in
commercial, industrial and agricultural enterprises and in religious, charitable, medical, or
educational institutions whether operating for profit or not, shall have the right to self-
organization and to form, join, or assist labor organizations of their own choosing for
purposes or collective bargaining. Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without any definite employers may form labor
organizations for their mutual aid and protection.
Article 248 (a) declares it to be an unfair labor practice for an employer, among others, to
‘interfere with, restrain or coerce employees in the exercise of their right to self-
organization.’ Similarly, Article 249 (a) makes it an unfair labor practice for a labor
organization to ‘restrain or coerce employees in the exercise of their rights to self-
organization . . .’
xxxx
The right of self-organization includes the right to organize or affiliate with a labor union or
determine which of two or more unions in an establishment to join, and to engage in
concerted activities with co-workers for purposes of collective bargaining through
representatives of their own choosing, or for their mutual aid and protection, i.e., the
protection, promotion, or enhancement of their rights and interests.53
As members of the governing board of MWEU, respondents are presumed to know,
observe, and apply the union’s constitution and by-laws. Thus, their repeated violations
thereof and their disregard of petitioner’s rights as a union member – their inaction on his
two appeals which resulted in his suspension, disqualification from running as MWEU
officer, and subsequent expulsion without being accorded the full benefits of due process
– connote willfulness and bad faith, a gross disregard of his rights thus causing untold
suffering, oppression and, ultimately, ostracism from MWEU. "Bad faith implies breach of
faith and willful failure to respond to plain and well understood obligation." 54 This
warrants an award of moral damages in the amount of P100,000.00. Moreover, the Civil
Code provides:
Art. 32. Any public officer or employee, or any private individual, who directly or indirectly
obstructs, defeats, violates or in any manner impedes or impairs any of the following rights
and liberties of another person shall be liable to the latter for damages:
xxxx
(12) The right to become a member of associations or societies for purposes not contrary
to law;
In Vital-Gozon v. Court of Appeals,55 this Court declared, as follows:
Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury. They may be recovered if they are the proximate result of the defendant’s wrongful
act or omission. The instances when moral damages may be recovered are, inter alia, ‘acts
and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35 of the Civil Code,’
which, in turn, are found in the Chapter on Human Relations of the Preliminary Title of the
Civil Code. x x x
Under the circumstances, an award of exemplary damages in the amount of P50,000.00, as
prayed for, is likewise proper. "Exemplary damages are designed to permit the courts to
mould behavior that has socially deleterious consequences, and their imposition is
required by public policy to suppress the wanton acts of the offender."56 This should
prevent respondents from repeating their mistakes, which proved costly for
petitioner.1âwphi1
Under Article 2229 of the Civil Code, ‘[e]xemplary or corrective damages are imposed, by
way of example or correction for the public good, in addition to the moral, temperate,
liquidated or compensatory damages.’ As this court has stated in the past: ‘Exemplary
damages are designed by our civil law to permit the courts to reshape behaviour that is
socially deleterious in its consequence by creating negative incentives or deterrents
against such behaviour.’57
Finally, petitioner is also entitled to attorney’s fees equivalent to 10 per cent (10%) of the
total award. The unjustified acts of respondents clearly compelled him to institute an
action primarily to vindicate his rights and protect his interest. Indeed, when an employee
is forced to litigate and incur expenses to protect his rights and interest, he is entitled to
an award of attorney’s fees.58
WHEREFORE, the Petition is PARTIALLY GRANTED. The assailed April 24, 2012 Decision of
the Court of Appeals in CA-G.R. SP No. 115639 is hereby MODIFIED, in that all of the
respondents - except for Carlos Villa, Ric Briones, and Chito Bernardo - are declared guilty
of unfair labor practices and ORDERED TO INDEMNIFY petitioner Allan M. Mendoza the
amounts of Pl00,000.00 as and by way of moral damages, PS0,000.00 as exemplary
damages, and attorney's fees equivalent to 10 per cent (10%) of the total award.
63
SO ORDERED.
15.
G.R. No.174287 August 12, 2013
NATIONAL UNION OF BANK EMPLOYEES (NUBE), PETITIONER,
vs.
PHILNABANK EMPLOYEES ASSOCIATION (PEMA) AND PHILIPPINE NATIONAL
BANK, RESPONDENTS.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure are the May 22, 2006 Decision1 and August 17, 2006 Resolution2 of the Court of
Appeals (CA) in CA-G.R. SP No. 84606, which reversed the May 27, 2004 Decision3 of the
Secretary of Labor and Employment acting as voluntary arbitrator, the dispositive portion
of which states:
WHEREFORE, in light of the foregoing findings, the Bank is hereby ORDERED to release all
union dues withheld and to continue remitting to NUBE-PNB chapter the members'
obligations under the CBA, LESS the amount corresponding to the number of non-union
members including those who participated in the unsuccessful withdrawal of membership
from their mother union.
The parties are enjoined to faithfully comply with the above- mentioned resolution.
With respect to the URGENT MOTION FOR INTERVENTION filed by PEMA, the same is
hereby denied without prejudice to the rights of its members to bring an action to protect
such rights if deemed necessary at the opportune time.
SO ORDERED.4
We state the facts.
Respondent Philippine National Bank (PNB) used to be a government-owned and
controlled banking institution established under Public Act 2612, as amended by Executive
Order No. 80 dated December 3, 1986 (otherwise known as The 1986 Revised Charter of
the Philippine National Bank). Its rank-and-file employees, being government personnel,
were represented for collective negotiation by the Philnabank Employees Association
(PEMA), a public sector union.
In 1996, the Securities and Exchange Commission approved PNB’s new Articles of
Incorporation and By-laws and its changed status as a private corporation. PEMA affiliated
with petitioner National Union of Bank Employees (NUBE), which is a labor federation
composed of unions in the banking industry, adopting the name NUBE-PNB Employees
Chapter (NUBE-PEC).
Later, NUBE-PEC was certified as the sole and exclusive bargaining agent of the PNB rank-
and-file employees. A collective bargaining agreement (CBA) was subsequently signed
between NUBE-PEC and PNB covering the period of January 1, 1997 to December 31, 2001.
Pursuant to Article V on Check-off and Agency Fees of the CBA, PNB shall deduct the
monthly membership fee and other assessments imposed by the union from the salary of
each union member, and agency fee (equivalent to the monthly membership dues) from
the salary of the rank- and-file employees within the bargaining unit who are not union
members. Moreover, during the effectivity of the CBA, NUBE, being the Federation union,
agreed that PNB shall remit P15.00 of the P65.00 union dues per month collected by PNB
from every employee, and that PNB shall directly credit the amount to NUBE’s current
account with PNB.5
Following the expiration of the CBA, the Philnabank Employees Association-FFW (PEMA-
FFW) filed on January 2, 2002 a petition for certification election among the rank-and-file
employees of PNB. The petition sought the conduct of a certification election to be
participated in by PEMA-FFW and NUBE-PEC.
While the petition for certification election was still pending, two significant events
transpired – the independent union registration of NUBE- PEC and its disaffiliation with
NUBE.
With a legal personality derived only from a charter issued by NUBE, NUBE-PEC, under the
leadership of Mariano Soria, decided to apply for a separate registration with the
Department of Labor and Employment (DOLE). On March 25, 2002, it was registered as an
independent labor organization under Registration Certificate No. NCR-UR-3-3790-2002.
Thereafter, on June 20, 2003, the Board of Directors of NUBE-PEC adopted a
Resolution6 disaffiliating itself from NUBE. Cited as reasons were as follows:
xxxx
WHEREAS, in the long period of time that the Union has been affiliated with NUBE, the
latter has miserably failed to extend and provide satisfactory services and support to the
former in the form of legal services, training assistance, educational seminars, and the like;
WHEREAS, this failure by NUBE to provide adequate essential services and support to
union members have caused the latter to be resentful to NUBE and to demand for the
Union’s disaffiliation from the former[;]
WHEREAS, just recently, NUBE displayed its lack of regard for the interests and aspirations
of the union members by blocking the latter’s desire for the early commencement of CBA
negotiations with the PNB management[;]
64
WHEREAS, this strained relationship between NUBE and the Union is no longer conducive Secretary for voluntary arbitration. They executed a Submission Agreement on October 28,
to a fruitful partnership between them and could even threaten industrial peace between 2003.13
the Union and the management of PNB.
Meantime, the DOLE denied PEMA’s motion to change its name in the official ballots. The
WHEREAS, under the circumstances, the current officers of the Union have no choice but certification election was finally held on October 17, 2003. The election yielded the
to listen to the clamor of the overwhelming majority of union members for the Union to following results:
disaffiliate from NUBE.7
3,74
The duly notarized Resolution was signed by Edgardo B. Serrana (President), Rico B. Roma Number of eligible voters
2
(Vice-President), Rachel C. Latorre (Secretary), Valeriana S. Garcia (Director/Acting
Treasurer), Ruben C. Medrano (Director), and Verlo C. Magtibay (Director). It is claimed
that said Resolution was overwhelmingly ratified by about eighty-one percent (81%) of the 2,99
total union membership. Number of valid votes cast
3

On June 25, 2003, NUBE-PEC filed a Manifestation and Motion8 before the Med-
Arbitration Unit of DOLE, praying that, in view of its independent registration as a labor Number of spoiled ballots 72
union and disaffiliation from NUBE, its name as appearing in the official ballots of the
certification election be changed to "Philnabank Employees Association (PEMA)" or, in the
alternative, both parties be allowed to use the name "PEMA" but with PEMA-FFW and 3,06
Total
NUBE-PEC be denominated as "PEMA-Bustria Group" and "PEMA-Serrana Group," 5
respectively.
Philnabank Employees Association-FFW 289
On the same date, PEMA sent a letter to the PNB management informing its disaffiliation
from NUBE and requesting to stop, effective immediately, the check-off of the P15.00 due
for NUBE.9 National Union of Bank Employees (NUBE)- 2,68
Philippine National Bank (PNB) Chapter 3
Acting thereon, on July 4, 2003, PNB informed NUBE of PEMA’s letter and its decision to
continue the deduction of the P15.00 fees, but stop its remittance to NUBE effective July
2003. PNB also notified NUBE that the amounts collected would be held in a trust account No Union 21
pending the resolution of the issue on PEMA’s disaffiliation.10

On July 11, 2003, NUBE replied that: it remains as the exclusive bargaining representative
of the PNB rank-and-file employees; by signing the Resolution (on disaffiliation), the
chapter officers have abandoned NUBE-PEC and joined another union; in abandoning
NUBE-PEC, the chapter officers have abdicated their respective positions and resigned as
such; in joining another union, the chapter officers committed an act of disloyalty to
NUBE-PEC and the general membership; the circumstances clearly show that there is an
emergency in NUBE-PEC necessitating its placement under temporary trusteeship; and
that PNB should cease and desist from dealing with Serrana, Roma, Latorre, Garcia,
Medrano, and Magtibay, who are expelled from NUBE-PEC.11 With regard to the issue of
non-remittance of the union dues, NUBE enjoined PNB to comply with the union check-off
provision of the CBA; otherwise, it would elevate the matter to the grievance machinery in
accordance with the CBA.
Despite NUBE’s response, PNB stood firm on its decision. Alleging unfair labor practice
(ULP) for non-implementation of the grievance machinery and procedure, NUBE brought
the matter to the National Conciliation and Mediation Board (NCMB) for preventive
mediation.12 In time, PNB and NUBE agreed to refer the case to the Office of the DOLE
Total 2,993 14
On April 28, 2004, PEMA filed before the voluntary arbitrator an Urgent Motion for
Intervention,15 alleging that it stands to be substantially affected by whatever judgment
that may be issued, because one of the issues for resolution is the validity of its
disaffiliation from NUBE. It further claimed that its presence is necessary so that a
complete relief may be accorded to the parties. Only NUBE opposed the motion, arguing
that PEMA has no legal personality to intervene, as it is not a party to the existing CBA; and
that NUBE is the exclusive bargaining representative of the PNB rank-and-file employees
and, in dealing with a union other than NUBE, PNB is violating the duty to bargain
collectively, which is another form of ULP.16
Barely a month after, DOLE Acting Secretary Manuel G. Imson denied PEMA’s motion for
intervention and ordered PNB to release all union dues withheld and to continue remitting
the same to NUBE. The May 27, 2004 Decision opined:
Before we delve into the merits of the present dispute, it behooves [Us] to discuss in
passing the propriety of the MOTION FOR INTERVENTION filed by the Philnabank
65
Employees Association (PEMA) on April 28, 2004, the alleged [break-away] group of NUBE-
PNB Chapter.
A cursory reading of the motion reveals a denial thereof is not prejudicial to the individual
rights of its members. They are protected by law.
Coming now to the main issues of the case, suffice it to say that after an evaluative review
of the record of the case, taking into consideration the arguments and evidence adduced
by both parties, We find that indeed no effective disaffiliation took place.
It is well settled that [l]abor unions may disaffiliate from their mother federations to form
a local or independent union only during the 60-day freedom period immediately
preceding the expiration of the CBA. [Tanduay Distillery Labor Union v. National Labor
Relations Commission, et al.] However, such disaffiliation must be effected by a majority of
the members in the bargaining unit. (Volkschel Labor Union v. Bureau of Labor Relations).
Applying the foregoing jurisprudence to the case at bar, it is difficult to believe that a
justified disaffiliation took place. While the record apparently shows that attempts at
disaffiliation occurred sometime in June of 2003 x x x the latest result of a certification
election dated 17 October 2003 mooted such disaffiliation.
Further, even if for the sake of argument an attempt at disaffiliation occurred, the record
is bereft of substantial evidence to support a finding of effective disaffiliation. There might
have been a mass withdrawal of the union members from the NUBE-PNB Chapter. The
record shows, however, that only 289 out of 3,742 members shifted their allegiance from
the mother union. Hence, they constituted a small minority for which reason they could
not have successfully severed the local union’s affiliation with NUBE.
Thus, since only a minority of the members wanted disaffiliation as shown by the
certification election, it can be inferred that the majority of the members wanted the
union to remain an affiliate of the NUBE. [Villar, et al. v. Inciong, et al.]. There being no
justified disaffiliation that took place, the bargaining agent’s right under the provision of
the CBA on Check-Off is unaffected and still remained with the old NUBE-PNB Chapter. x x
x members after a decision that might deny a disaffiliation. It is a non-sequitur to make the
While it is true that the obligation of an employee to pay union dues is co-terminus with
his affiliation [Philippine Federation of Petroleum Workers v. CIR], it is equally tenable that
when it is shown, as in this case, that the withdrawal from the mother union is not
supported by majority of the members, the disaffiliation is unjustified and the disaffiliated
minority group has no authority to represent the employees of the bargaining unit. This is
the import of the principle laid down in [Volkschel Labor Union v. Bureau of Labor
Relations supra] and the inverse application of the Supreme Court decision in [Philippine
Federation of Petroleum Workers v. CIR] regarding entitlement to the check-off provision
of the CBA.
As a necessary consequence to our finding that no valid disaffiliation took place, the right
of NUBE to represent its local chapter at the PNB, less those employees who are no longer
members of the latter, is beyond reproach.
However, the Bank cannot be faulted for not releasing union dues to NUBE at the time
when representation status issue was still being threshed out by proper governmental
authority. Prudence dictates the discontinuance of remittance of union dues to NUBE
under such circumstances was a legitimate exercise of management discretion apparently
in order to protect the Bank’s business interest. The suspension of the check-off provision
of the CBA, at the instance of the latter made in good faith, under the present
circumstances cannot give rise to a right of action. For having been exercised without
malice much less evil motive and for not causing actual loss to the National Union of Bank
Employees (NUBE), the same act of management [cannot] be penalized.17
Aggrieved, PEMA filed before the CA a petition under Rule 43 of the Rules on Civil
Procedure with prayer for the issuance of a temporary restraining order (TRO) or writ of
preliminary injunction (WPI). On November 2, 2004, the CA denied the application for
WPI.18 PEMA’s motion for reconsideration was also denied on February 24, 2005, noting
PNB’s manifestation that it would submit to the judgment of the CA as to which party it
should remit the funds collected from the employees.19
On June 21, 2005, however, petitioner again filed an Urgent Motion for the Issuance of a
TRO against the June 10, 2005 Resolution of DOLE Acting Secretary Imson, which ordered
PNB to properly issue a check directly payable to the order of NUBE covering the withheld
funds from the trust account.20 Considering the different factual milieu, the CA resolved to
grant the motion.21
Subsequent to the parties’ submission of memoranda, the CA promulgated its May 22,
2006 Decision, declaring the validity of PEMA’s disaffiliation from NUBE and directing PNB
to return to the employees concerned the amounts deducted and held in trust for NUBE
starting July 2003 and to stop further deductions in favor of NUBE.22
As to the impropriety of denying PEMA’s motion for intervention, the CA noted:
x x x Among the rights of the [PEMA] as an affiliate of a federation is to disaffiliate from it.
Any case in which this is an issue is then one in which the union has a significant legal
interest and as to which it must be heard, irrespective of any residual rights of the
intervention of the union in this case dependent on the question of whether its members
can pursue their own agenda under the same constraints.23
On the validity of PEMA’s disaffiliation, the CA ratiocinated:
The power and freedom of a local union to disaffiliate from its mother union or federation
is axiomatic. As Volkschel vs. Bureau of Labor Relations [137 SCRA 42] recognizes, a local
union is, after all, a separate and voluntary association that under the constitutional
guarantee of freedom of expression is free to serve the interests of its members. Such
right and freedom invariably include the right to disaffiliate or declare its autonomy from
the federation or mother union to which it belongs, subject to reasonable restrictions in
the law or the federation’s constitution. [Malayang Samahan ng mga Manggagawa sa M.
Greenfield vs. Ramos, 326 SCRA 428]
66
Without any restrictive covenant between the parties, [Volkschel Labor Union vs. Bureau
of Labor Relations, supra, at 48,] it is instructive to look into the state of the law on a
union’s right to disaffiliate. The voluntary arbitrator alludes to a provision in PD 1391
allowing disaffiliation only within a 60-day period preceding the expiration of the CBA. In
Alliance of Nationalist and Genuine Labor Organization vs. Samahan ng mga
Manggagawang Nagkakaisa sa Manila Bay Spinning Mills, etc. [258 SCRA 371], however,
the rule was not held to be iron-clad. Volkschel was cited to support a more flexible view
that the right may be allowed as the circumstances warrant. In Associated Workers Union-
PTGWO vs. National Labor Relations Commission [188 SCRA 123], the right to disaffiliate
was upheld before the onset of the freedom period when it became apparent that there
was a shift of allegiance on the part of the majority of the union members.
xxxx
As the records show, a majority, indeed a vast majority, of the members of the local union
ratified the action of the board to disaffiliate. Our count of the members who approved
the board action is, 2,638. If we divide this by the number of eligible voters as per the
certification election which is 3,742, the quotient is 70.5%, representing the proportion of
the members in favor of disaffiliation. The [PEMA] says that the action was ratified by 81%.
Either way, the groundswell of support for the measure was overwhelming.
The respondent NUBE has developed the ingenious theory that if the disaffiliation was
approved by a majority of the members, it was neutered by the subsequent certification
election in which NUBE-PNB Chapter was voted the sole and exclusive bargaining agent. It
is argued that the effects of this change must be upheld as the latest expression of the will
of the employees in the bargaining unit. The truth of the matter is that the names of PEMA
and NUBE-PNB Chapter are names of only one entity, the two sides of the same coin. We
have seen how NUBE-PNB Employees Chapter evolved into PEMA and competed with
Philnabank Employees Association-FFW for supremacy in the certification election. To
realize that it was PEMA which entered into the contest, we need only to remind ourselves
that PEMA was the one which filed a motion in the certification election case to have its
name PEMA put in the official ballot. DOLE insisted, however, in putting the name NUBE-
PNB Chapter in the ballots unaware of the implications of this seemingly innocuous act.24
NUBE filed a motion for reconsideration, but it was denied;25 hence, this petition raising
the following issues for resolution:
I.
The Secretary of Labor acted without error and without grave abuse of discretion in not
giving due course to the urgent motion for intervention filed by PEMA.
II.
The Secretary of Labor acted without grave abuse of discretion and without serious error
in ruling that PEMA’s alleged disaffiliation was invalid.
III.
The Secretary of Labor did not commit serious error in ordering the release of the disputed
union fees/dues to NUBE-PNB Chapter.
IV.
There is no substantial basis for the issuance of a preli minary injunction or temporary
restraining order.
V.
Under the Rules of Court, the appeal/petition of PEMA should have been dismissed.
VI.
PEMA and NUBE are not one and the same, and the denial by the Secretary of Labor of the
motion for intervention was proper.
VII.
NUBE-PNB Chapter, not PEMA, has been fighting for PNB rank-and-file interests and rights
since PNB’s privatization, which is further pro of that NUBE-PNB Chapter and PEMA are
not one and the same.
VIII.
The alleged disaffiliation was not valid as proper procedure was not followed.
IX.
NUBE is entitled to check-off.26
Stripped of the non-essential, the issue ultimately boils down on whether PEMA validly
disaffiliated itself from NUBE, the resolution of which, in turn, inevitably affects the latter’s
right to collect the union dues held in trust by PNB.
We deny the petition.
Whether there was a valid disaffiliation is a factual issue.27 It is elementary that a question
of fact is not appropriate for a petition for review on certiorari under Rule 45 of the Rules
of Court. The parties may raise only questions of law because the Supreme Court is not a
trier of facts. As a general rule, We are not duty-bound to analyze again and weigh the
evidence introduced in and considered by the tribunals below. When supported by
substantial evidence, the findings of fact of the CA are conclusive and binding on the
parties and are not reviewable by this Court, except: (1) When the conclusion is a finding
grounded entirely on speculation, surmises and conjectures; (2) When the inference made
is manifestly mistaken, absurd or impossible; (3) Where there is a grave abuse of
discretion; (4) When the judgment is based on a misapprehension of facts; (5) When the
findings of fact are conflicting; (6) When the CA, in making its findings, went beyond the
issues of the case and the same is contrary to the admissions of both parties; (7) When the
findings are contrary to those of the trial court; (8) When the findings of fact are
67
conclusions without citation of specific evidence on which they are based; (9) When the
facts set forth in the petition as well as in the petitioner’s main and reply briefs are not
disputed by the respondents; and (10) When the findings of fact of the CA are premised on
the supposed absence of evidence and contradicted by the evidence on record.28 The
Court finds no cogent reason to apply these recognized exceptions.
Even a second look at the records reveals that the arguments raised in the petition are
bereft of merit.
The right of the local union to exercise the right to disaffiliate from its mother union is well
settled in this jurisdiction. In MSMG-UWP v. Hon. Ramos,29 We held:
A local union has the right to disaffiliate from its mother union or declare its autonomy. A
local union, being a separate and voluntary association, is free to serve the interests of all
its members including the freedom to disaffiliate or declare its autonomy from the
federation which it belongs when circumstances warrant, in accordance with the
constitutional guarantee of freedom of association.
The purpose of affiliation by a local union with a mother union [or] a federation
"x x x is to increase by collective action the bargaining power in respect of the terms and
conditions of labor. Yet the locals remained the basic units of association, free to serve
their own and the common interest of all, subject to the restraints imposed by the
Constitution and By-Laws of the Association, and free also to renounce the affiliation for
mutual welfare upon the terms laid down in the agreement which brought it into
existence."
Thus, a local union which has affiliated itself with a federation is free to sever such
affiliation anytime and such disaffiliation cannot be considered disloyalty. In the absence
of specific provisions in the federation's constitution prohibiting disaffiliation or the
declaration of autonomy of a local union, a local may dissociate with its parent union.30
Likewise, Philippine Skylanders, Inc. v. National Labor Relations Commission31 restated:
The right of a local union to disaffiliate from its mother federation is not a novel thesis
unillumined by case law.1âwphi1 In the landmark case of Liberty Cotton Mills Workers
Union vs. Liberty Cotton Mills, Inc., we upheld the right of local unions to separate from
their mother federation on the ground that as separate and voluntary associations, local
unions do not owe their creation and existence to the national federation to which they
are affiliated but, instead, to the will of their members. The sole essence of affiliation is to
increase, by collective action, the common bargaining power of local unions for the
effective enhancement and protection of their interests. Admittedly, there are times when
without succor and support local unions may find it hard, unaided by other support
groups, to secure justice for themselves.
Yet the local unions remain the basic units of association, free to serve their own interests
subject to the restraints imposed by the constitution and by-laws of the national
federation, and free also to renounce the affiliation upon the terms laid down in the
agreement which brought such affiliation into existence.
Such dictum has been punctiliously followed since then.32
And again, in Coastal Subic Bay Terminal, Inc. v. Department of Labor and Employment –
Office of the Secretary,33 this Court opined:
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. A local union does not owe its existence to the federation
with which it is affiliated. It is a separate and distinct voluntary association owing its
creation to the will of its members. Mere affiliation does not divest the local union of its
own personality, neither does it give the mother federation the license to act
independently of the local union. It only gives rise to a contract of agency, where the
former acts in representation of the latter. Hence, local unions are considered principals
while the federation is deemed to be merely their agent. 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.34
Finally, the recent case of Cirtek Employees Labor Union-Federation of Free Workers v.
Cirtek Electronics, Inc35ruled:
x x x [A] local union may disaffiliate at any time from its mother federation, absent any
showing that the same is prohibited under its constitution or rule. Such, however, does not
result in it losing its legal personality altogether. Verily, Anglo-KMU v. Samahan Ng Mga
Manggagawang Nagkakaisa Sa Manila Bar Spinning Mills At J.P. Coats enlightens:
A local labor union is a separate and distinct unit primarily designed to secure and
maintain an equality of bargaining power between the employer and their employee-
members. 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. The mere act of 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.36
These and many more have consistently reiterated the earlier view that the right of the
local members to withdraw from the federation and to form a new local union depends
upon the provisions of the union's constitution, by-laws and charter and, in the absence of
enforceable provisions in the federation's constitution preventing disaffiliation of a local
union, a local may sever its relationship with its parent.37 In the case at bar, there is
nothing shown in the records nor is it claimed by NUBE that PEMA was expressly forbidden
to disaffiliate from the federation nor were there any conditions imposed for a valid
breakaway. This being so, PEMA is not precluded to disaffiliate from NUBE after acquiring
the status of an independent labor organization duly registered before the DOLE.
Also, there is no merit on NUBE’s contention that PEMA’s disaffiliation is invalid for non-
observance of the procedure that union members should make such determination
through secret ballot and after due deliberation, conformably with Article 241 (d) of the
68
Labor Code, as amended.38 Conspicuously, other than citing the opinion of a "recognized
labor law authority," NUBE failed to quote a specific provision of the law or rule mandating
that a local union’s disaffiliation from a federation must comply with Article 241 (d) in
order to be valid and effective.
Granting, for argument’s sake, that Article 241 (d) is applicable, still, We uphold PEMA’s
disaffiliation from NUBE. First, non-compliance with the procedure on disaffiliation, being
premised on purely technical grounds cannot rise above the employees’ fundamental right
to self-organization and to form and join labor organizations of their own choosing for the
purpose of collective bargaining.39 Second, the Article nonetheless provides that when the
nature of the organization renders such secret ballot impractical, the union officers may
make the decision in behalf of the general membership. In this case, NUBE did not even
dare to contest PEMA’s representation that "PNB employees, from where [PEMA] [derives]
its membership, are scattered from Aparri to Jolo, manning more than 300 branches in
various towns and cities of the country," hence, "[to] gather the general membership of
the union in a general membership to vote through secret balloting is virtually
impossible."40 It is understandable, therefore, why PEMA’s board of directors merely
opted to submit for ratification of the majority their resolution to disaffiliate from NUBE.
Third, and most importantly, NUBE did not dispute the existence of the persons or their
due execution of the document showing their unequivocal support for the disaffiliation of
PEMA from NUBE. Note must be taken of the fact that the list of PEMA members
(identifying themselves as "PEMA-Serrana Group"41) who agreed with the board resolution
was attached as Annex "H" of PEMA’s petition before the CA and covered pages 115 to
440 of the CA rollo. While fully displaying the employees’ printed name, identification
number, branch, position, and signature, the list was left unchallenged by NUBE. No
evidence was presented that the union members’ ratification was obtained by mistake or
through fraud, force or intimidation. Surely, this is not a case where one or two members
of the local union decided to disaffiliate from the mother federation, but one where more
than a majority of the local union members decided to disaffiliate.
Consequently, by PEMA's valid disaffiliation from NUBE, the vinculum that previously
bound the two entities was completely severed. As NUBE was divested of any and all
power to act in representation of PEMA, any act performed by the former that affects the
interests and affairs of the latter, including the supposed expulsion of Serrana et al., is
rendered without force and effect.
Also, in effect, NUBE loses it right to collect all union dues held in its trust by PNB. The
moment that PEMA separated from and left NUBE and exists as an independent labor
organization with a certificate of registration, the former is no longer obliged to pay dues
and assessments to the latter; naturally, there would be no longer any reason or occasion
for PNB to continue making deductions.42 As we said in Volkschel Labor Union v. Bureau of
Labor Relations:43
x x x In other words, ALUMETAL [NUBE in this case] is entitled to receive the dues from
respondent companies as long as petitioner union is affiliated with it and respondent
companies are authorized by their employees (members of petitioner union) to deduct
union dues. Without said affiliation, the employer has no link to the mother union. The
obligation of an employee to pay union dues is coterminous with his affiliation or
membership. "The employees' check-off authorization, even if declared irrevocable, is
good only as long as they remain members of the union concerned." A contract between
an employer and the parent organization as bargaining agent for the employees is
terminated bv the disaffiliation ofthe local of which the employees are members. x x x44
On the other hand, it was entirely reasonable for PNB to enter into a CBA with PEMA as
represented by Serrana et al. Since PEMA had validly separated itself from NUBE, there
would be no restrictions which could validly hinder it from collectively bargaining with
PNB.
WHEREFORE, the foregoing considered, the instant Petition is DENIED. The May 22, 2006
Decision and August 17, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 84606,
which reversed the May 27, 2004 Decision ofthe Secretary of Labor and Employment, are
AFFIRMED.
SO ORDERED.
16.
G.R. Nos. 184903 October 10, 2012
DIGITAL TELECOMMUNICATIONS PHILIPPINES, INC., Petitioner,
vs.
DIGITEL EMPLOYEES UNION (DEU), ARCELO RAFAEL A. ESPLANA, ALAN D. LICANDO,
FELICITO C. ROMERO, JR., ARNOLD D. GONZALES, REYNEL FRANCISCO B. GARCIA,
ZOSIMO B. PERALTA, REGINO T. UNIDAD and JIM L. JAVIER, Respondents.
DECISION
PEREZ, J.:
This treats of the petition for review filed by Digital Telecommunications Philippines, Inc.
(Digitel) assailing the 18 June 2008 Decision1 and 9 October 2008 Resolution of the Court
of Appeals 10th Division in CA-G.R. SP No. 91719, which affirms the Order of the Secretary
of Labor and Employment directing Digitel to commence Collective Bargaining Agreement
(CBA) negotiations and in CA-G.R. SP No. 94825, which declares the dismissal of affected
Digitel employees as illegal.
The facts, as borne by the records, follow.
By virtue of a certification election, Digitel Employees Union (Union) became the exclusive
bargaining agent of all rank and file employees of Digitel in 1994. The Union and Digitel
then commenced collective bargaining negotiations which resulted in a bargaining
deadlock. The Union threatened to go on strike, but then Acting Labor Secretary
Bienvenido E. Laguesma assumed jurisdiction over the dispute and eventually directed the
parties to execute a CBA.2
69
However, no CBA was forged between Digitel and the Union. Some Union members
abandoned their employment with Digitel. The Union later became dormant.
Ten (10) years thereafter or on 28 September 2004, Digitel received from Arceo Rafael A.
Esplana (Esplana), who identified himself as President of the Union, a letter containing the
list of officers, CBA proposals and ground rules.3 The officers were respondents Esplana,
Alan D. Licando (Vice-President), Felicito C. Romero, Jr. (Secretary), Arnold D. Gonzales
(Treasurer), Reynel Francisco B. Garcia (Auditor), Zosimo B. Peralta (PRO), Regino T.
Unidad (Sgt. at Arms), and Jim L. Javier (Sgt. at Arms).
Digitel was reluctant to negotiate with the Union and demanded that the latter show
compliance with the provisions of the Union’s Constitution and By-laws on union
membership and election of officers.
On 4 November 2004, Esplana and his group filed a case for Preventive Mediation before
the National Conciliation and Mediation Board based on Digitel’s violation of the duty to
bargain. On 25 November 2004, Esplana filed a notice of strike.
On 10 March 2005, then Labor Secretary Patricia A. Sto. Tomas issued an Order4 assuming
jurisdiction over the labor dispute.
During the pendency of the controversy, Digitel Service, Inc. (Digiserv), a non-profit
enterprise engaged in call center servicing, filed with the Department of Labor and
Employment (DOLE) an Establishment Termination Report stating that it will cease its
business operation. The closure affected at least 100 employees, 42 of whom are
members of the herein respondent Union.
Alleging that the affected employees are its members and in reaction to Digiserv’s action,
Esplana and his group filed another Notice of Strike for union busting, illegal lock-out, and
violation of the assumption order.
On 23 May 2005, the Secretary of Labor ordered the second notice of strike subsumed by
the previous Assumption Order.5
Meanwhile, on 14 March 2005, Digitel filed a petition with the Bureau of Labor Relations
(BLR) seeking cancellation of the Union’s registration on the following grounds: 1) failure
to file the required reports from 1994-2004; 2) misrepresentation of its alleged officers; 3)
membership of the Union is composed of rank and file, supervisory and managerial
employees; and 4) substantial number of union members are not Digitel employees.6
In a Decision dated 11 May 2005, the Regional Director of the DOLE dismissed the petition
for cancellation of union registration for lack of merit. The Regional Director ruled that it
does not have jurisdiction over the issue of non-compliance with the reportorial
requirements. He also held that Digitel failed to adduce substantial evidence to prove
misrepresentation and the mixing of non-Digitel employees with the Union. Finally, he
declared that the inclusion of supervisory and managerial employees with the rank and file
employees is no longer a ground for cancellation of the Union’s certificate of registration.7
The appeal filed by Digitel with the BLR was eventually dismissed for lack of merit in a
Resolution dated 9 March 2007, thereby affirming the 11 May 2005 Decision of the
Regional Director.
CA-G.R. SP No. 91719
In an Order dated 13 July 2005, the Secretary of Labor directed Digitel to commence the
CBA negotiation with the Union. Thus:
WHEREFORE, all the foregoing premises considered, this Office hereby orders:
1. DIGITEL to commence collective bargaining negotiation with DEU without further delay;
and,
2. The issue of unfair labor practice, consisting of union-busting, illegal
termination/lockout and violation of the assumption of jurisdiction, specifically the return-
to-work aspect of the 10 March 2005 and 03 June 2005 orders, be CERTIFIED for
compulsory arbitration to the NLRC.8
Digitel moved for reconsideration on the contention that the pendency of the petition for
cancellation of the Union’s certificate of registration is a prejudicial question that should
first be settled before the DOLE could order the parties to bargain collectively. On 19
August 2005, then Acting Secretary Manuel G. Imson of DOLE denied the motion for
reconsideration, affirmed the 13 July 2005 Order and reiterated the order directing parties
to commence collective bargaining negotiations.9
On 14 October 2005, Digitel filed a petition, docketed as CA-G.R. SP No. 91719, before the
Court of Appeals assailing the 13 July and 19 August 2005 Orders of the DOLE Secretary
and attributing grave abuse of discretion on the part of the DOLE Secretary for ordering
Digitel to commence bargaining negotiations with the Union despite the pendency of the
issue of union legitimacy.
CA-G.R. SP No. 94825
In accordance with the 13 July 2005 Order of the Secretary of Labor, the unfair labor
practice issue was certified for compulsory arbitration before the NLRC, which, on 31
January 2006, rendered a Decision dismissing the unfair labor practice charge against
Digitel but declaring the dismissal of the 13 employees of Digiserv as illegal and ordering
their reinstatement. The Union manifested that out of 42 employees, only 13 remained, as
most had already accepted separation pay. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, the charge of unfair labor practice is hereby DISMISSED
for lack of merit. However, the dismissal of the remaining thirteen (13) affected employees
is hereby declared illegal and DIGITEL is hereby ORDERED to reinstate them to their former
position with full backwages up to the time they are reinstated, computed as follows:
x x x x.10
70
Upon motion for reconsideration filed by Digitel, four (4) affected employees, namely Ma.
Loreta Eser, Marites Jereza, Leonore Tuliao and Aline G. Quillopras, were removed from
entitlement to the awards pursuant to the deed of quitclaim and release which they all
signed.11
In view of this unfavorable decision, Digitel filed another petition on 9 June 2006 in CA-
G.R. SP No. 94825 before the Court of Appeals, challenging the above NLRC Decision and
Resolution and arguing mainly that Digiserv employees are not employees of Digitel.
Ruling of the Court of Appeals
On 18 June 2008, the Tenth Division of the Court of Appeals consolidated the two petitions
in CA-G.R. SP No. 91719 and CA-G.R. SP No. 94825, and disposed as follows:
WHEREFORE, the petition in CA-G.R. SP No. 91719 is DISMISSED. The July 13,
2005 Order and the August 19, 2005 Resolution of the DOLE Secretary are AFFIRMED in
toto. With costs.
The petition in CA-G.R. SP No. 94825 is partially GRANTED, with the effect that the assailed
dispositions must be MODIFIED, as follows:
1) In addition to the order directing reinstatement and payment of full backwages to the
nine (9) affected employees, Digital Telecommunications Philippines, Inc. is
furthered ORDERED, should reinstatement is no longer feasible, to pay separation pay
equivalent to one (1) month pay, or one-half (1/2) month pay for every year of service,
whichever is higher.
2) The one hundred thousand (PhP 100,000.00) peso-fine imposed on Digital
Telecommunications Philippines, Inc. is DELETED. No costs.12
The Court of Appeals upheld the Secretary of Labor’s Order for Digitel to commence CBA
negotiations with the Union and emphasized that the pendency of a petition for the
cancellation of a union’s registration does not bar the holding of negotiations for a CBA.
The Court of Appeals sustained the finding that Digiserv is engaged in labor-only
contracting and that its employees are actually employees of Digitel.
Digitel filed a motion for reconsideration but was denied in a Resolution dated 9 October
2008.
Hence, this petition for review on certiorari.
Digitel argues that the Court of Appeals seriously erred when it condoned the act of the
Secretary of Labor in issuing an assumption order despite the pendency of an appeal on
the issue of union registration. Digitel maintains that it cannot be compelled to negotiate
with a union for purposes of collective bargaining when the very status of the same as the
exclusive bargaining agent is in question.
Digitel insists that had the Court of Appeals considered the nature of the activities
performed by Digiserv, it would reach the conclusion that Digiserv is a legitimate
contractor. To bolster its claim, Digitel asserts that the affected employees are registered
with the Social Security System, Pag-ibig, Bureau of Internal Revenue and Philhealth with
Digiserv as their employer. Digitel further contends that assuming that the affected
Digiserv employees are employees of Digitel, they were nevertheless validly dismissed on
the ground of closure of a department or a part of Digitel’s business operation.
The three issues raised in this petition are: 1) whether the Secretary of Labor erred in
issuing the assumption order despite the pendency of the petition for cancellation of
union registration; 2) whether Digiserv is a legitimate contractor; and 3) whether there
was a valid dismissal.
The pendency of a petition
for cancellation of union
registration does not preclude
collective bargaining.
The first issue raised by Digitel is not novel. It is well-settled that the pendency of a
petition for cancellation of union registration does not preclude collective bargaining.
The 2005 case of Capitol Medical Center, Inc. v. Hon. Trajano13 is apropos. The respondent
union therein sent a letter to petitioner requesting a negotiation of their CBA. Petitioner
refused to bargain and instead filed a petition for cancellation of the union’s certificate of
registration. Petitioner’s refusal to bargain forced the union to file a notice of strike. They
eventually staged a strike. The Secretary of Labor assumed jurisdiction over the labor
dispute and ordered all striking workers to return to work. Petitioner challenged said order
by contending that its petition for cancellation of union’s certificate of registration involves
a prejudicial question that should first be settled before the Secretary of Labor could order
the parties to bargain collectively. When the case eventually reached this Court, we agreed
with the Secretary of Labor that the pendency of a petition for cancellation of union
registration does not preclude collective bargaining, thus:
That there is a pending cancellation proceeding against the respondent Union is not a bar
to set in motion the mechanics of collective bargaining. If a certification election may still
be ordered despite the pendency of a petition to cancel the union’s registration certificate
(National Union of Bank Employees vs. Minister of Labor, 110 SCRA 274), more so should
the collective bargaining process continue despite its pendency. We must emphasize that
the majority status of the respondent Union is not affected by the pendency of the
Petition for Cancellation pending against it. Unless its certificate of registration and its
status as the certified bargaining agent are revoked, the Hospital is, by express provision of
the law, duty bound to collectively bargain with the Union.14
Trajano was reiterated in Legend International Resorts Limited v. Kilusang Manggagawa ng
Legenda (KML-Independent).15 Legend International Resorts reiterated the rationale for
allowing the continuation of either a CBA process or a certification election even during
the pendency of proceedings for the cancellation of the union’s certificate of registration.
Citing the cases of Association of Court of Appeals Employees v. Ferrer- Calleja16 and
Samahan ng Manggagawa sa Pacific Plastic v. Hon. Laguesma,17 it was pointed out at the
time of the filing of the petition for certification election – or a CBA process as in the
71
instant case – the union still had the personality to file a petition for certification − or to
ask for a CBA negotiation – as in the present case.
Digiserv is a labor-only contractor.
Labor-only contracting is expressly prohibited by our labor laws. Article 106 of the Labor
Code defines labor-only contracting as "supplying workers to an employer [who] does not
have substantial capital or investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal business of such
employer."
Section 5, Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor Code
(Implementing Rules), as amended by Department Order No. 18-02, expounds on the
prohibition against labor-only contracting, thus:
Section 5. Prohibition against labor-only contracting. − Labor-only contracting is hereby
declared prohibited. For this purpose, labor-only contracting shall refer to an arrangement
where the contractor or subcontractor merely recruits, supplies or places workers to
perform a job, work or service for a principal, and any of the following elements are
present:
i) The contractor or subcontractor does not have substantial capital or investment which
relates to the job, work or service to be performed and the employees recruited, supplied
or placed by such contractor or subcontractor are performing activities which are directly
related to the main business of the principal; or
ii) The contractor does not exercise the right to control over the performance of the work
of the contractual employee.
The foregoing provisions shall be without prejudice to the application of Article 248 (c) of
the Labor Code, as amended.
xxxx
The "right to control" shall refer to the right reserved to the person for whom, the services
of the contractual workers are performed, to determine not only the end to be achieved,
but also the manner and means to be used in reaching that end.
The law and its implementing rules allow contracting arrangements for the performance of
specific jobs, works or services. Indeed, it is management prerogative to farm out any of its
activities, regardless of whether such activity is peripheral or core in nature. However, in
order for such outsourcing to be valid, it must be made to an independent contractor
because the current labor rules expressly prohibit labor-only contracting.18
After an exhaustive review of the records, there is no showing that first, Digiserv has
substantial investment in the form of capital, equipment or tools. Under the Implementing
Rules, substantial capital or investment refers to "capital stocks and subscribed
capitalization in the case of corporations, tools, equipment, implements, machineries and
work premises, actually and directly used by the contractor or subcontractor in the
performance or completion of the job, work or service contracted out." The NLRC, as
echoed by the Court of Appeals, did not find substantial Digiserv’s authorized capital stock
of One Million Pesos (P 1,000,000.00). It pointed out that only Two Hundred Fifty
Thousand Pesos (P 250,000.00) of the authorized capital stock had been subscribed and
only Sixty-Two Thousand Five Hundred Pesos (P 62,500.00) had been paid up. There was
no increase in capitalization for the last ten (10) years.19
Moreover, in the Amended Articles of Incorporation, as well as in the General Information
Sheets for the years 1994, 2001 and 2005, the primary purpose of Digiserv is to provide
manpower services. In PCI Automation Center, Inc. v. National Labor Relations
Commission,20 the Court made the following distinction: "the legitimate job contractor
provides services while the labor-only contractor provides only manpower. The legitimate
job contractor undertakes to perform a specific job for the principal employer while the
labor-only contractor merely provides the personnel to work for the principal employer."
The services provided by employees of Digiserv are directly related to the business of
Digitel, as rationalized by the NLRC in this wise:
It is undisputed that as early as March 1994, the affected employees, except for two, were
already performing their job as Traffic Operator which was later renamed as Customer
Service Representative (CSR). It is equally undisputed that all throughout their
employment, their function as CSR remains the same until they were terminated effective
May 30, 2005. Their long period of employment as such is an indication that their job is
directly related to the main business of DIGITEL which is telecommunications. Because, if it
was not, DIGITEL would not have allowed them to render services as Customer Service
Representative for such a long period of time.21
Furthermore, Digiserv does not exercise control over the affected employees. The NLRC
highlighted the fact that Digiserv shared the same Human Resources, Accounting, Audit
and Legal Departments with Digitel which manifested that it was Digitel who exercised
control over the performance of the affected employees. The NLRC also relied on the
letters of commendation, plaques of appreciation and certification issued by Digitel to the
Customer Service Representatives as evidence of control.
Considering that Digiserv has been found to be engaged in labor-only contracting, the
dismissed employees are deemed employees of Digitel.
Section 7 of the Implementing Rules holds that labor-only contracting would give rise to:
(1) the creation of an employer-employee relationship between the principal and the
employees of the contractor or sub-contractor; and (2) the solidary liability of the principal
and the contractor to the employees in the event of any violation of the Labor Code.
Accordingly, Digitel is considered the principal employer of respondent employees.
The affected employees were
illegally dismissed.
72
In addition to finding that Digiserv is a labor-only contractor, records teem with proof that
its dismissed employees are in fact employees of Digitel. The NLRC enumerated these
evidences, thus:
That the remaining thirteen (13) affected employees are indeed employees of DIGITEL is
sufficiently established by the facts and evidence on record.
It is undisputed that the remaining affected employees, except for two (2), were already
hired by DIGITEL even before the existence of DIGISERV. (The other two (2) were hired
after the existence of DIGISERV). The UNION submitted a sample copy of their
appointment paper (Annex "A" of UNION’s Position Paper, Records, Vol. 1, p. 100) showing
that they were appointed on March 1, 1994, almost three (3) months before DIGISERV
came into existence on May 30, 1994 (Annex "B", Ibid, Records, Vol. 1, p. 101). On the
other hand, not a single appointment paper was submitted by DIGITEL showing that these
remaining affected employees were hired by DIGISERV.
It is equally undisputed that the remaining, affected employees continuously held the
position of Customer Service Representative, which was earlier known as Traffic Operator,
from the time they were appointed on March 1, 1994 until they were terminated on May
30, 2005. The UNION alleges that these Customer Service Representatives were under the
Customer Service Division of DIGITEL. The UNION’s allegation is correct. Sample of letter of
commendations issued to Customer Service Representatives (Annexes "C" and "C-1" of
UNION’s Position Paper, Records, p. 100 and 111) indeed show that DIGITEL has a
Customer Service Division which handles its Call Center operations.
Further, the Certificates issued to Customer Service Representative likewise show that
they are employees of DIGITEL (Annexes "C-5", "C-6" - "C-7" of UNION’s Position Paper,
Records, Vol. 1, pp. 115 to 117), Take for example the "Service Award" issued to Ma.
Loretta C. Esen, one of the remaining affected employees (Annex "C-5", Supra). The
"Service Award" was signed by the officers of DIGITEL – the VP-Customer Services Division,
the VP-Human Resources Division and the Group Head-Human Resources Division. It was
issued by DIGITEL to Esen thru the above named officers "In recognition of her seven (7)
years continuous and valuable contributions to the achievement of Digitel’s organization
objectives". It cannot be gainsaid that it is only the employer that issues service award to
its employees.22 (Emphasis not supplied)
As a matter of fact, even before the incorporation of Digiserv, the affected employees
were already employed by Digitel as Traffic Operators, later renamed as Customer Service
Representatives.
As an alternative argument, Digitel maintains that the affected employees were validly
dismissed on the grounds of closure of Digiserv, a department within Digitel.
In the recent case of Waterfront Cebu City Hotel v. Jimenez,23 we referred to the closure of
a department or division of a company as retrenchment. The dismissed employees were
undoubtedly retrenched with the closure of Digiserv.
For a valid retrenchment, the following elements must be present:
(1) That retrenchment is reasonably necessary and likely to prevent business losses which,
if already incurred, are not merely de minimis, but substantial, serious, actual and real, or
if only expected, are reasonably imminent as perceived objectively and in good faith by the
employer;
(2) That the employer served written notice both to the employees and to the Department
of Labor and Employment at least one month prior to the intended date of retrenchment;
(3) That the employer pays the retrenched employees separation pay equivalent to one (1)
month pay or at least ½ month pay for every year of service, whichever is higher;
(4) That the employer exercises its prerogative to retrench employees in good faith for the
advancement of its interest and not to defeat or circumvent the employees’ right to
security of tenure; and
(5) That the employer used fair and reasonable criteria in ascertaining who would be
dismissed and who would be retained among the employees, such as status, efficiency,
seniority, physical fitness, age, and financial hardship for certain workers.24
Only the first 3 elements of a valid retrenchment had been here satisfied. Indeed, it is
management prerogative to close a department of the company. Digitel’s decision to
outsource the call center operation of the company is a valid reason to close down the
operations of a department under which the affected employees were employed. Digitel
cited the decline in the volume of transaction of operator-assisted call services as
supported by Financial Statements for the years 2003 and 2004, during which Digiserv
incurred a deficit of P 163,624.00 and P 164,055.00, respectively.25 All affected employees
working under Digiserv were served with individual notices of termination. DOLE was
likewise served with the corresponding notice. All affected employees were offered
separation pay. Only 9 out of the 45 employees refused to accept the separation pay and
chose to contest their dismissal before this Court.
The fifth element regarding the criteria to be observed by Digitel clearly does not apply
because all employees under Digiserv were dismissed. The instant case is all about the
fourth element, that is, whether or not the affected employees were dismissed in good
faith. We find that there was no good faith in the retrenchment.
Prior to the cessation of Digiserv’s operations, the Secretary of Labor had issued the first
assumption order to enjoin an impending strike. When Digiserv effected the dismissal of
the affected employees, the Union filed another notice of strike. Significantly, the
Secretary of Labor ordered that the second notice of strike be subsumed by the previous
assumption order. Article 263(g) of the Labor Code provides:
When, in his opinion, there exists a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same to
the Commission for compulsory arbitration. Such assumption or certification shall have the
effect of automatically enjoining the intended or impending strike or lockout as specified
in the assumption or certification order. If one has already taken place at the time of
assumption or certification, all striking or locked out employees shall immediately return
73
to work and the employer shall immediately resume operations and readmit all workers
under the same terms and conditions prevailing before the strike or lockout. The Secretary
of Labor and Employment or the Commission may seek the assistance of law enforcement
agencies to ensure the compliance with this provision as well as with such orders as he
may issue to enforce the same.
The effects of the assumption order issued by the Secretary of Labor are two-fold. It
enjoins an impending strike on the part of the employees and orders the employer to
maintain the status quo.
There is no doubt that Digitel defied the assumption order by abruptly closing down
Digiserv. The closure of a department is not illegal per se. What makes it unlawful is when
the closure is undertaken in bad faith. In St. John Colleges, Inc. v. St. John Academy Faculty
and Employees Union,26 bad faith was evidenced by the timing of and reasons for the
closure and the timing of and reasons for the subsequent opening. There, the collective
bargaining negotiations between St. John and the Union resulted in a bargaining deadlock
that led to the filing of a notice of strike. The labor dispute was referred to the Secretary of
Labor who assumed jurisdiction.
Pending resolution of the dispute, St. John closed the school prompting the Union to file a
complaint for illegal dismissal and unfair labor practice. The Union members alleged that
the closure of the high school was done in bad faith in order to get rid of the Union and
render useless any decision of the SOLE on the CBA deadlocked issues. We held that
closure was done to defeat the affected employees’ security of tenure, thus:
The determination of whether SJCI acted in bad faith depends on the particular facts as
established by the evidence on record. Bad faith is, after all, an inference which must be
drawn from the peculiar circumstances of a case. The two decisive factors in determining
whether SJCI acted in bad faith are (1) the timing of, and reasons for the closure of the
high school, and (2) the timing of, and the reasons for the subsequent opening of a college
and elementary department, and, ultimately, the reopening of the high school department
by SJCI after only one year from its closure.
Prior to the closure of the high school by SJCI, the parties agreed to refer the 1997 CBA
deadlock to the SOLE for assumption of jurisdiction under Article 263 of the Labor Code. As
a result, the strike ended and classes resumed. After the SOLE assumed jurisdiction, it
required the parties to submit their respective position papers. However, instead of filing
its position paper, SJCI closed its high school, allegedly because of the "irreconcilable
differences between the school management and the Academy’s Union particularly the
safety of our students and the financial aspect of the ongoing CBA negotiations."
Thereafter, SJCI moved to dismiss the pending labor dispute with the SOLE contending that
it had become moot because of the closure. Nevertheless, a year after said closure, SJCI
reopened its high school and did not rehire the previously terminated employees.
Under these circumstances, it is not difficult to discern that the closure was done to defeat
the parties’ agreement to refer the labor dispute to the SOLE; to unilaterally end the
bargaining deadlock; to render nugatory any decision of the SOLE; and to circumvent the
Union’s right to collective bargaining and its members’ right to security of tenure. By
admitting that the closure was due to irreconcilable differences between the Union and
school management, specifically, the financial aspect of the ongoing CBA negotiations, SJCI
in effect admitted that it wanted to end the bargaining deadlock and eliminate the
problem of dealing with the demands of the Union. This is precisely what the Labor Code
abhors and punishes as unfair labor practice since the net effect is to defeat the Union’s
right to collective bargaining.27 (Emphasis not supplied)
As in St. John, bad faith was manifested by the timing of the closure of Digiserv and the
rehiring of some employees to Interactive Technology Solutions, Inc. (I-tech), a corporate
arm of Digitel. The assumption order directs employees to return to work, and the
employer to reinstate the employees. The existence of the assumption order should have
prompted Digitel to observe the status quo. Instead, Digitel proceeded to close down
Digiserv. The Secretary of Labor had to subsume the second notice of strike in the
assumption order. This order notwithstanding, Digitel proceeded to dismiss the
employees.
The timing of the creation of I-tech is dubious. It was incorporated on 18 January 2005
while the labor dispute within Digitel was pending. I-tech’s primary purpose was to provide
call center/customer contact service, the same service provided by Digiserv. It conducts its
business inside the Digitel office at 110 E. Rodriguez Jr. Avenue, Bagumbayan, Quezon City.
The former head of Digiserv, Ms. Teresa Taniega, is also an officer of I-tech. Thus, when
Digiserv was closed down, some of the employees presumably non-union members were
rehired by I-tech.
Thus, the closure of Digiserv pending the existence of an assumption order coupled with
the creation of a new corporation performing similar functions as Digiserv leaves no iota of
doubt that the target of the closure are the union member-employees. These factual
circumstances prove that Digitel terminated the services of the affected employees to
defeat their security of tenure. The termination of service was not a valid retrenchment; it
was an illegal dismissal of employees.
It needs to be mentioned too that the dismissal constitutes an unfair labor practice under
Article 248(c) of the Labor Code which refers to contracting out services or functions being
performed by union members when such will interfere with, restrain or coerce employees
in the exercise of their rights to self-organization. At the height of the labor dispute,
occasioned by Digitel’s reluctance to negotiate with the Union, I-tech was formed to
provide, as it did provide, the same services performed by Digiserv, the Union members’
nominal employer.
Under Article 279 of the Labor Code, an illegally dismissed employee is entitled to
backwages and reinstatement. Where reinstatement is no longer viable as an option, as in
this case where Digiserv no longer exists, separation pay equivalent to one (1) month
salary, or one-half (1/2) month pay for every year of service, whichever is higher, should
be awarded as an alternative.28 The payment of separation pay is in addition to payment
of backwages.29
Indeed, while we have found that the closure of Digiserv was undertaken in bad faith,
badges thereof evident in the timing of Digiserv’s closure, hand in hand, with I-tech’s
creation, the closure remains a foregone conclusion. There is no finding, and the Union
makes no such assertion, that Digiserv and I-tech are one and the same corporation. The
74
timing of Digiserv’s closure and I-tech’s ensuing creation is doubted, not the legitimacy of
I-tech as a business process outsourcing corporation providing both inbound and
outbound services to an expanded local and international clientele.30
The finding of unfair labor practice hinges on Digitel’s contracting-out certain services
performed by union member-employees to interfere with, restrain or coerce them in the
exercise of their right to self-organization.
We have no basis to direct reinstatement of the affected employees to an ostensibly
different corporation. The surrounding circumstance of the creation of I-tech point to bad
faith on the part of Digitel, as well as constitutive of unfair labor practice in targeting the
dismissal of the union member-employees. However, this bad faith does not contradict,
much less negate, the impossibility of the employees’ reinstatement because Digiserv has
been closed and no longer exists.
Even if it is a possibility that I-tech, as though Digitel, can absorb the dismissed union
member-employees as I-tech was incorporated during the time of the controversy with
the same primary purpose as Digiserv, we would be hard pressed to mandate the
dismissed employees’ reinstatement given the lapse of more than seven (7) years.
This length of time from the date the incident occurred to its Resolution31 coupled with the
demonstrated litigiousness of the disputants: (1) with all sorts of allegations thrown by
either party against the other; (2) the two separate filings of a notice of strike by the
Union; (3) the Assumption Orders of the DOLE; (4) our own finding of unfair labor practice
by Digitel in targeting the union member-employees, abundantly show that the
relationship between Digitel and the union member-employees is strained. Indeed, such
discordance between the parties can very well be a necessary consequence of the
protracted and branched out litigation. We adhere to the oft-quoted doctrine that
separation pay may avail in lieu of reinstatement if reinstatement is no longer practical or
in the best interest of the parties.32
Under the doctrine of strained relations, the payment of separation pay is considered an
acceptable alternative to reinstatement when the latter option is no longer desirable or
viable. On one hand, such payment liberates the employee from what could be a highly
oppressive work environment. On the other hand, it releases the employer from the
grossly unpalatable obligation of maintaining in its employ a worker it could no longer
trust.33
Finally, an illegally dismissed employee should be awarded moral and exemplary damages
as their dismissal was tainted with unfair labor practice.34 Depending on the factual milieu,
jurisprudence has awarded varying amounts as moral and exemplary damages to illegally
dismissed employees when the dismissal is attended by bad faith or fraud; or constitutes
an act oppressive to labor; or is done in a manner contrary to good morals, good customs
or public policy; or if the dismissal is effected in a wanton, oppressive or malevolent
manner.351âwphi1
In Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees Association v. National
Labor Relations Commission, we intoned:
Unfair labor practices violate the constitutional rights of workers and employees to self-
organization, are inimical to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect; and disrupt industrial peace and hinder the
promotion of healthy and stable labor-management relations. As the conscience of the
government, it is the Court’s sworn duty to ensure that none trifles with labor rights.36
We awarded moral damages in the amount of P 10,000.00 and likewise
awarded P 5,000.00 as exemplary damages for each dismissed employee.
In the recent case of Purefoods Corporation v. Nagkakaisang Samahang Manggagawa ng
Purefoods Rank-and-File,37 we awarded the aggregate amount of P 500,000.00 as moral
and exemplary damages to the illegally dismissed union member-employees which exact
number was undetermined.
In the case at hand, with the Union’s manifestation that only 13 employees remain as
respondents, as most had already accepted separation pay, and consistent with our finding
that Digitel committed an unfair labor practice in violation of the employees’
constitutional right to self-organization, we deem it proper to award each of the illegally
dismissed union member-employees the amount of P 10,000.00 and P 5,000.00 as moral
and exemplary damages, respectively.
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP
No. 91719 is AFFIRMED, while the Decision in CA-G.R. SP No. 94825 declaring the dismissal
of affected union member-employees as illegal is MODIFIED to include the payment of
moral and exemplary damages in amount of P 10,000.00 and P 5,000.00, respectively, to
each of the thirteen (13) illegally dismissed union-member employees.
Petitioner Digital Telecommunications Philippines, Inc. is ORDERED to pay the affected
employees backwages and separation pay equivalent to one (1) month salary, or one-half
(1/2) month pay for every year of service, whichever is higher.
Let this case be REMANDED to the Labor Arbiter for the computation of monetary claims
due to the affected employees.
SO ORDERED.
75