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WEEK 2: WORKERS WITH RIGHT TO SELF-ORGANIZATION

GROUP 5 – LABOR LAW 2


ATTY. CARLISLE MARIE FABIE

CASE No. 1
ALLIANCE OF NATIONALIST AND GENUINE LABOR ORG. VS. SAMAHAN NG
MGA MANGGAGAWANG NAGKAKAISA SA MANILA BAY SPINNING MILLS
G.R. No. 118562. July 5, 1996.

TOPIC:
- Workers with Right to Self-Organization
o Section 8, Article III, 1987 Constitution
o All Employees (Article 243)
- Union Affiliation: Local and Parent Union (Labor Organization)
o Period
FACTS:
Petitioner Alliance of Nationalist and Genuine Labor Organization (ANGLO for brevity)
is a duly registered labor organization while respondent union Samahan Ng Mga Mangagawang
Nagkakaisa sa Manila Bay Spinning Mills and J.P. Coats (SAMANA BAY for brevity) is its
affiliate. In representation of SAMANA BAY, ANGLO entered and concluded a Collective
Bargaining Agreement (CBA) with Manila Bay Spinning Mills and J.P. Coats Manila Bay, Inc.
Thereafter, SAMANA BAY decided to disaffiliate from ANGLO in view of the latter’s dereliction
of its duty to promote and advance the welfare of SAMANA BAY and the alleged cases of
corruption involving the federation officers.
A petition to stop remittance of federation dues to ANGLO was then filed by SAMANA
BAY with the Bureau of Labor Relations on the ground that the Manila Bay Spinning Mills and
J.P. Coats Manila Bay, Inc, despite having been furnished copies of the union resolution relating
to said disaffiliation, refused to honor the same. ANGLO countered by unseating all officers of
SAMANA BAY and appointed, in their stead, a new set of officers. In its position paper, ANGLO
contended that the disaffiliation was void considering that a collective bargaining agreement is
still existing and the freedom period has not yet set in.
The Med-Arbiter resolved that the disaffiliation was void but upheld the illegality of the
ouster of the officers of SAMANA BAY. Upon appeal, DOLE declared that the disaffiliation was
valid and directed respondent Manila Bay Spinning Mills, Inc. and J.P. Coats to stop remitting to
ANGLO federation dues and instead to remit the whole amount of union dues to the treasurer of
petitioner union.

ISSUE:
(1) Whether or not the disaffiliation was invalid because the procedural requirements were not
followed;
(2) Is the disaffiliation in violation of P.D. 1391?
(3) Whether petitioner can validly oust individual private respondents from their positions.
HELD:
(1) NO, the disaffiliation was valid. All employees enjoy the right to self-organization and to
form and join labor organizations of their own choosing for the purpose of collective
bargaining. This is a fundamental right of labor and derives its existence from the
Constitution. In interpreting the protection to labor and social justice provisions of the
Constitution and the labor laws, rules or regulations, the Supreme Court have always
adopted the liberal approach which favors the exercise of labor rights. failure to observe
certain procedural requirements for a valid disaffiliation. Noncompliance with the
procedure on disaffiliation, being premised on purely technical grounds cannot rise above
the fundamental right of self-organization. It is clear under the facts that respondent union’s
members have unanimously decided to disaffiliate from the mother federation and ANGLO
has nothing to offer in dispute other than the law prohibiting the disaffiliation outside the
freedom period.
(2) No, it is not in violation of P.D. 1391. Although P.D. 1391 provides: “Item No. 6. No
petition for certification election, for intervention and disaffiliation shall be entertained or
given due course except within the 60-day freedom period immediately preceding the
expiration of a collective bargaining agreement,” said law is definitely not without
exceptions. Settled is the rule that a local union has the right to disaffiliate from its mother
union when circumstances warrant. Generally, a labor union may disaffiliate from the
mother union to form a local or independent union only during the 60-day freedom period
immediately preceding the expiration of the CBA. However, even before the onset of the
freedom period, disaffiliation may be carried out when there is a shift of allegiance on the
part of the majority of the members of the union.
(3) No, petitioner is not allowed to oust individual private respondents from their
positions. 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.

CASE No. 2
KAPATIRAN SA MEAT AND CANNING DIVISION VS. FERRER-CALLEJA
No. L-82914. June 20, 1988.

TOPIC:
- Workers with Right to Self-Organization
o Section 8, Article III, 1987 Constitution
o All Employees (Article 243)
- Workers with Right to Self-Organization
o Section 8, Article III, 1987 Constitution
o Non-Profit Organizations
FACTS:
From 1984 to 1987 TUPAS was the sole and exclusive collective bargaining representative
of the workers in the Meat and Canning Division of the Universal Robina Corporation, with a 3-
year collective bargaining agreement (CBA) which was to expire on November 15, 1987. Within
the freedom period of 60 days prior to the expiration of its CBA, TUPAS filed an amended notice
of strike on September 28, 1987 as a means of pressuring the company to extend, renew, or
negotiate a new CBA with it.
On, October 13, 1987, NEW ULO, claiming that it has “the majority of the daily wage rank
and file employees,” filed a petition for a certification election at the Bureau of Labor Relations.
TUPAS moved to dismiss the petition for being defective in form and that the members of the
NEW ULO were mostly members of the Iglesia ni Kristo sect which three (3) years previous
refused to affiliate with any labor union. It also accused the company of using the NEW ULO to
defeat TUPAS’ bargaining rights.
The Med-Arbiter ordered the holding of a certification election within 20 days. TUPAS
appealed to the Bureau of Labor Relations. In the meantime, it was able to negotiate a new 3year
CBA with ROBINA, which was signed on December 3, 1987 and to expire on November 15, 1990.
On January 27, 1988, respondent BLR Director Calleja dismissed the appeal. TUPAS’ motion for
reconsideration was denied. Petitioner the filed against the public respondent alleging that she
acted in excess of her jurisdiction and with grave abuse of discretion in affirming the Med-
Arbiter’s order for a certification election.

ISSUE:
Whether or not the petition for certification election filed by NEW ULO be dismissed based
on the following grounds:
(1) For being defective in form; and
(2) That the members of the NEW ULO were mostly members of the Iglesia ni
Kristo sect which three (3) years previous refused to affiliate with any labor
union
Held:
No, it should not be dismissed. The Supreme Court’s decision in Victoriano vs. Elizalde
Rope Workers’ Union, 59 SCRA 54, upholding the right of members of the IGLESIA NI KRISTO
sect not to join a labor union for being contrary to their religious beliefs, does not bar the members
of that sect from forming their own union. The public respondent correctly observed that the
“recognition of the tenets of the sect x x x should not infringe on the basic right of self-organization
granted by the constitution to workers, regardless of religious affiliation.”
The fact that TUPAS was able to negotiate a new CBA with ROBINA within the
60-day freedom period of the existing CBA, does not foreclose the right of the rival union, NEW
ULO, to challege TUPAS’ claim to majority status, by filing a timely petition for certification
election on October 13, 1987 before TUPAS’ old CBA expired on November 15, 1987 and before
it signed a new CBA with the company on December 3, 1987. As pointed out by Med-Arbiter
Abdullah, a “certification election is the best forum in ascertaining the majority status of the
contending unions wherein the workers themselves can freely choose their bargaining
representative thru secret ballot.” Since it has not been shown that this order is tainted with
unfairness, the holding of a certification election should not be dismissed.
CASE NO. 3
FEU-DR. NICANOR REYES MEDICAL FOUNDATION, INC. VS. TRAJANO
No. L-76273. July 31, 1987.

TOPIC:
- Workers with Right to Self-Organization
o Section 8, Article III, 1987 Constitution
o Non-Profit Organizations
FACTS:
Majority of petitioner’s employees are members of private respondent Alliance of Filipino
Workers. On February 13, 1986, private respondent filed a Petition for Consent and/or
Certification Election with The Ministry of Labor and Employment. The petitioner opposed the
petition on the ground that a similar petition is pending resolution before the Supreme Court.
In its position paper, private respondent admitted: that as early as May 10, 1976, private
respondent filed a similar petition for certification election with the Ministry of Labor and
Employment but the petition was denied by the MED Arbiter and the Secretary of Labor on appeal,
on the ground that the petitioner was a non-stock, non-profit medical institution, therefore, its
employees may not form, join, or organize a union pursuant to Article 244 of the Labor Code; that
private respondent filed a petition for certiorari with the Supreme Court assailing the
constitutionality of Article 244 of the Labor Code; that pending resolution of the aforesaid petition,
or on May 1, 1980, Batas Pambansa Bilang 70 was enacted amending Article 244 of the Labor
Code, thus granting even employees of non-stock, nonprofit institutions the right to form, join and
organize labor unions of their choice; and that in the exercise of such right, private respondent
filed another petition for certification election with the Ministry of Labor and Employment.
On April 17, 1986, the Med Arbiter issued an Order granting the petition, declaring that a
certification election be conducted to determine the exclusive bargaining representative of all the
rank and file employees of the petitioner. Respondent Director affirmed said Order on appeal. In
dismissing the appeal, however, respondent Director said that respondent's (petitioner herein),
reliance on the petition with the Supreme Court involving the character of the hospital, which has
been alleged as a non-profit medical foundation, has been rendered moot and academic by virtue
of the amendatory BP No. 70, which allows employees of non-profit medical institutions to
unionize.

ISSUE:
Whether or not the granting of the petition for certification election is correct

HELD:
Yes, the granting of the petition for certification election is correct. At the time private
respondent filed its petition for certification election on February 13, 1986, Article 244 of the
Labor Code was already amended by Batas Pambansa Bilang 70.
Under this provision, there is no doubt that rank and file employees of non-profit medical
institutions are now permitted to form, organize or join labor unions of their choice for purposes
of collective bargaining. Since private respondent had complied with the requisites provided by
law for calling a certification election, it was incumbent upon respondent Director to conduct such
certification election to ascertain the bargaining representative of petitioner's employees.
CASE NO. 4
TOYOTA MOTOR PHILIPPINES CORPORATION , petitioner,
vs.
TOYOTA MOTOR PHILIPPINES CORPORATION LABOR UNION AND THE
SECRETARY OF LABOR AND EMPLOYMENT, respondents.
G.R. No. 121084 February 19, 1997
Topics: Certificate of Elections, Mixed membership, Fundamental test
Facts:
Toyota Motor Philippines Corporation Labor Union (TMPCLU) filed a petition for
certification election with the Department of Labor, National Capital Region, for all rank-and-file
employees of the Toyota Motor Corporation. However petitioner, filed in their position paper
seeking the denial of such petition on two grounds; first, that the respondent union, being "in the
process of registration" had no legal personality to file the same as it was not a legitimate labor
organization as of the date of the filing of the petition; and second, that the union was composed
of both rank-and-file and supervisory employees in violation of law.
The Med-Arbiter, Paterno D. Adap, dismissed respondent union's petition for certification
election for lack of merit. the Med-Arbiter found that the labor organization's membership was
composed of supervisory and rank-and-file employees in violation of Article 245 of the Labor
Code, and that at the time of the filing of its petition, respondent union had not even acquired legal
personality yet. Sec. of Labor on appeal reversed the decision of the Med-Arbiter and directed the
holding of a certification election among the regular rank.-and-file employees. Petitions Motion
for Reconsideration was denied by the Sec. of Labor hence, they have file a civil action for
certiorari to the SC.
Issue:
1. WON supervisory employees can join labor organization
2. WON respondent union had legal standing at the time of the filing of its petition for
certification election
Held:
According to Rothenberg, an appropriate bargaining unit is a group of employees of a given
employer, composed of all or less than the entire body of employees, which the collective interests
of all the employees, consistent with equity to the employer indicate to be best suited to serve
reciprocal rights and duties of the parties under the collective bargaining provisions of law.
In Belyca Corporation v. Ferrer Calleja, 18 we defined the bargaining unit as "the legal collectivity
for collective bargaining purposes whose members have substantially mutual bargaining interests
in terms and conditions of employment as will assure to all employees their collective bargaining
rights." This in mind, the Labor Code has made it a clear statutory policy to prevent supervisory
employees from joining labor organizations consisting of rank-and-file employees as the concerns
which involve members of either group are normally disparate and contradictory. Article 245
provides:
Art. 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.
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.
In requiring separate unions among rank-and-file employees on one hand, and supervisory
employees on the other, seeks to avoid. The rationale behind the Code's exclusion of supervisors
from unions of rank-and-file employees is that such employees, while in the performance of
supervisory functions, become the alter ego of management in the making and the implementing
of key decisions at the sub-managerial level. Certainly, it would be difficult to find unity or
mutuality of interests in a bargaining unit consisting of a mixture of rank-and-file and supervisory
employees. And this is so because the fundamental test of a bargaining unit's acceptability is
whether or not such a unit will best advance to all employees within the unit the proper exercise
of their collective bargaining rights. 22 The Code itself has recognized this, in preventing
supervisory employees from joining unions of rank-and-file employees.
The foregoing discussion, therefore, renders entirely irrelevant, the technical issue raised
as to whether or not respondent union was in possession of the status of a legitimate labor
organization at the time of filing, when, as petitioner vigorously claims, the former was still at the
stage of processing of its application for recognition as a legitimate labor organization. The union's
composition being in violation of the Labor Code's Prohibition of unions composed of supervisory
and rank-and-file employees, it could not possess the requisite personality to file for recognition
as a legitimate labor organization.
CASE NO. 5
CALTEX FILIPINO MANAGERS AND SUPERVISORS ASSOCIATION petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, CALTEX (PHILIPPINES), INC., W.E.
MENEFEE and B.F. EDWARDS, respondents.

Facts: Caltex Filipino Managers and Supervisors Association is a newly established Labor Union.
Such was not recognized by the company since it contends that Managers and Supervisor cannot
establish such Union nor secure membership thereof. Because of this a labor dispute between the
parties takes place. A strike has commenced despite the efforts of the Trial Court to settle the
dispute. The union claims that the company has refuse to enter into a Bargaining Agreement hence
it is liable for Unfair Labor Practice. The Company, filed Case No. 1484-MC(1) praying among
others, to declare the strike of Caltex Filipino Managers and Supervisors Association illegal

The Association's charge for unfair labor practices against the Company and its officials on
September 10, 1965, in Case No. 4344- ULP against Caltex (Philippines), Inc., W. E. Menefee and
B.F. Edwards. According to the latter, the Company and some of its officials, including B.F.
Edwards, inquired into the organization of the Association and he manifested his antagonism to it
and its President; that another Company official, W.E. Menefee issued a statement of policy
designed to discourage employees and supervisors from joining labor organizations; that the
Company refused to bargain although the Association commands majority representation; that due
to the steps taken by the Company not to acknowledge the legality of the Association or discourage
its members from continuing their union membership.

Issue:
- Whether or not the CIR has jurisdiction over Case No. 1484-MC(1); and
- Whether or not the strike staged by the Association on April 22, 1965 the court correctly
terminated the employee status of the petitioners and admonished the other officers of
the Association;
Held:
The two coercion cases filed at that time and their subsequent elimination from the charges
the initiative of the Company after the settlement of strike; the cutting off of telephone
facilities extended Association members in the refinery; and the use of a member of the
Association to spy for the company. The discriminatory acts practiced by the Company
against active unionists after the strike furnish further evidence that Company committed
unfair labor practices as charged. The Court declares the strike of the Caltex Filipino
Managers and Supervisors' Association as legal in all respects.
CASE NO. 6
PAPER INDUSTRIES CORPORATION OF THE PHILIPPINES, petitioner,
vs. HON. BIENVENIDO E. LAGUESMA, Undersecretary of Labor and Employment, HON.
HENRY PABEL, Director of the Department of Labor and Employment Regional Office No.
XI and/or the Representation Officer of the Industrial Relations Division who will act for
and in his behalf, PCOP- BISLIG SUPERVISORY AND TECHNICAL STAFF
EMPLOYEES UNION, ASSOCIATED LABOR UNION and FEDERATION OF FREE
WORKERS, respondents.
G. R. No.101738. April 12, 2000

Topic: Managerial Employees

Facts:
Petitioner Paper Industries Corporation of the Philippines (PICOP) is engaged in the
manufacture of paper and timber products, with principal place of operations at Tabon, Bislig,
Surigao del Sur. It has over 9,000 employees, 944 of whom are supervisory and technical staff
employees. More or less 487 of these supervisory and technical staff employees are signatory
members of the private respondent PICOP-Bislig Supervisory and Technical Staff Employees
Union (PBSTSEU).
On August 9, 1989, PBSTSEU instituted a Petition for Certification Election to determine
the sole and exclusive bargaining agent of the supervisory and technical staff employees of PICOP
for collective bargaining agreement (CBA) purposes.
PICOP failed to file any comment or position paper. Meanwhile, private respondents
Federation of Free Workers (FFW) and Associated Labor Union (ALU) filed their respective
petitions for intervention. Med-Arbiter Arturo L. Gamolo issued an Order granting the petitions
for interventions of the FFW and ALU and another ordering the holding of a certification election
among PICOP’s supervisory and technical staff employees.
During the pre-election conference PICOP questioned and objected to the inclusion of
some section heads and supervisors in the list of voters whose positions it averred were reclassified
as managerial employees in the light of the reorganization effected by it. Under the Revised
Organizational Structure of the PICOP, section heads and supervisors were now called section
managers and unit managers, and head sections and independent units. PICOP advanced the view
that considering the alleged present authority of these section managers and unit managers to hire
and fire, they are classified as managerial employees, and hence, ineligible to form or join any
labor organization.

ISSUE: WON the subject employees are managerial employees as such are prohibited to join
unions

HELD:
In United Pepsi-Cola Supervisory Union (UPSU) v. Laguesma, the Court elucidated on
the term “managerial employees.” Managerial employees are ranked as Top Managers, Middle
Managers and First Line Managers. Top and Middle Managers have the authority to devise,
implement and control strategic and operational policies while the task of First-Line Managers is
simply to ensure that such policies are carried out by the rank-and- file employees of an
organization. Under this distinction, “managerial employees” therefore fall in two (2) categories,
namely, the “managers” per se composed of Top and Middle Managers, and the “supervisors”
composed of First-Line Managers. Thus, the mere fact that an employee is designated “manager”
does not ipso facto make him one. Designation should be reconciled with the actual job description
of the employee, for it is the job description that determines the nature of employment.
A thorough dissection of the job description of the concerned supervisory employees and
section heads indisputably show that they are not actually managerial but only supervisory
employees since they do not lay down company policies. PICOP’s contention that the subject
section heads and unit managers exercise the authority to hire and fire is ambiguous and quite
misleading for the reason that any authority they exercise is not supreme but merely advisory in
character. Theirs is not a final determination of the company policies inasmuch as any action taken
by them on matters relative to hiring, promotion, transfer, suspension and termination of
employees is still subject to confirmation and approval by their respective superior. Thus, where
such power, which is in effect recommendatory in character, is subject to evaluation, review and
final action by the department heads and other higher executives of the company, the same,
although present, is not effective and not an exercise of independent judgment as required by law.
Furthermore, considering all the foregoing, the fact that PICOP voiced out its objection to
the holding of certification election, despite numerous opportunities to ventilate the same, only
after respondent Undersecretary of Labor affirmed the holding thereof, simply bolstered the public
respondents’ conclusion that PICOP raised the issue merely to prevent and thwart the concerned
section heads and supervisory employees from exercising a right granted them by law. Needless
to stress, no obstacle must be placed to the holding of certification elections, for it is a statutory
policy that should not be circumvented.
CASE NO. 7
UNITED PEPSI-COLA SUPERVISORY UNION (UPSU), petitioner,
vs.
HON. BIENVENIDO E. LAGUESMA and PEPSI-COLA PRODUCTS, PHILIPPINES,
INC. respondents.
G.R. No. 122226 March 25, 1998

Topics: Excluded Employees/Workers – Managerial Employees

Facts:
The petitioner is a union of supervisory employees. It appears that on March 20, 1995 the
union filed a petition for certification on behalf of the route managers at Pepsi-Cola Products
Philippines, Inc. However, its petition was denied by the med-arbiter and, on appeal, by the
Secretary of Labor and Employment, on the ground that the route managers are managerial
employees and, therefore, ineligible for union membership under the first sentence of Art 245 of
the Labor Code, which provides:
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.
Petitioner filed a motion for reconsideration, pressing for resolution its contention that
the first sentence of Art. 245 of the Labor Code, so far declares managerial employees to be
ineligible to form, assist or join unions, contravenes Article III, Section 8 of the 1987 Constitution
which provides:

Issue:
1. WON the route managers at Pepsi-Cola Products Philippines, Inc. are managerial
employees and

2. WON Art. 245, insofar as it prohibits managerial employees and security guards from
forming, joining or assisting labor unions, violates Art. III, §8 of the Constitution.

Held:
1.) YES. The route managers cannot thus possibly be classified as mere supervisors
because their work does not only involve, but goes far beyond, the simple direction or supervision
of operating employees to accomplish objectives set by those above them. They are not mere
functionaries with simple oversight functions but business administrators in their own right
employees are those who, in the interest of the employer, effectively recommend such managerial
actions if the exercise of such authority is not merely routinary or clerical in nature but requires
the use of independent judgment." Thus, their only power is to recommend. Certainly, the route
managers in this case more than merely recommend effective management action. They perform
operational, human resource, financial and marketing functions for the company, all of which
involve the laying down of operating policies for themselves and their teams The term "manager"
generally refers to "anyone who is responsible for subordinates and other organizational
resources." Managers constitute three levels of a pyramid:
FIRST-LINE MANAGERS: The lowest level in an organization at which individuals are
responsible for the work of others is called first-line or first-level management. First-line managers
direct operating employees only; they do not supervise other managers
MIDDLE MANAGERS: Middle managers direct the activities of other managers and sometimes
also those of employees. Middle managers' principal responsibilities are to direct the activities that
implement their organizations' policies and to balance the demands of their superiors with the
capacities of their subordinates
TOP MANAGERS: Composed of a comparatively small group of executives, top management is
responsible for the overall management of the organization. It establishes operating policies and
guides the organization's interactions with its environment
In the Case, entitled Worker's Alliance Trade Union (WATU) v. Pepsi-Cola Products
Philippines, Inc., decided on November 13, 1991, the Secretary of Labor found: we find that only
those employees occupying the position of route manager and accounting manager are managerial
employees.

2) NO. The real intent of Art. III, 8 is evident in Lerum’s proposal. Lerum thus anchored his
proposal on the fact that (1) government employees, supervisory employees, and security guards,
who had the right to organize under the Industrial Peace Act, had been denied this right by the
Labor Code, and (2) there was a need to reinstate the right of these employees. In consonance with
his objective to reinstate the right of government, security, and supervisory employees to organize.
The Commission intended the absolute right to organize of government workers,
supervisory employees, and security guards to be constitutionally guaranteed. By implication, no
similar absolute constitutional right to organize for labor purposes should be deemed to have been
granted to top-level and middle managers.
Nor is the guarantee of organizational right in Art. III, infringed by a ban against
managerial employees forming a union. The right guaranteed in Art. III, is subject to the condition
that its exercise should be for purposes "not contrary to law." In the case of Art. 245, there is a
rational basis for prohibiting managerial employees from forming or joining labor organizations.
CASE NO. 8
Pepsi-Cola vs. Sec of Labor
312 SCRA 104
G.R. No. 96663, 10 August 1999; and G.R. No. 103300, 10 August 1999

Topic:

Workers with no right to self-organization; managerial and confidential employees

Facts:
The Pepsi-Cola Employees Organization-UOEF (Union) filed a petition for Certification
Election with the Med-Arbiter seeking to be the exclusive bargaining agent of supervisors of Pepsi-
Cola Philippines, Inc. (PEPSI). The Med-Arbiter granted the Petition, with the explicit statement
that it was an affiliate of Union de Obreros Estivadores de Filipinas (federation) together with two
(2) rank and file unions, Pepsi-Cola Labor Unity (PCLU) and Pepsi-Cola Employees Union of the
Philippines (PEUP).

Pepsi filed with the Bureau of Labor Relations a petition to Set Aside, Cancel and/or
Revoke Charter Affiliation of the Union on the ground that (a) members of the Union were
managers, and (b) a supervisors’ union can not affiliate with a federation whose members include
the rank and file union of the same company.

Pepsi presented a motion to re-open the case since it was not furnished with a copy of the
Petition for Certification Election. Pepsi filed a Notice of Appeal and Memorandum of Appeal
with the Secretary of Labor, questioning the setting of the certification election on the said date
and five days after. Pepsi found its way to this Court via the present petition for certiorari.

Issues:
(1) Can a supervisors’ union join a local union of rank-and-file employees?
(2) Are confidential employees allowed to join a labor union of rank-and-file employees?
(3) How is the status of an employee determined? (rank-and-file vs managerial vs supervisory)

Ruling:
(1) No. A local supervisors’ union is not allowed to affiliate with the national federation
of union of rank-and-file employees. The intent of the law is to avoid a situation where
the supervisors’ labor organization would represent conflicting interests.

The limitation is not confined to a case of supervisors wanting to join a rank-and-


file union. The prohibition extends to a supervisors’ local union applying for membership
in a national federation the members of which include local unions of rank and file
employees.

Rationale: The intent of the law is clear, especially where the supervisors will be
co-mingling with those employees whom they directly supervise in their own bargaining
unit.
(2) No. Confidential employees are disqualified from joining the labor union of rank-
and-file employees.

A confidential employee is one entrusted with confidence on delicate matters, or


with the custody, handling, or care and protection of the employers’ property. While Art.
245 of the Labor Code singles out managerial employee as ineligible to join, assist or form
any labor organization, under the doctrine of necessary implication, confidential employees
are similarly disqualified.

If these managerial employees would belong to or be affiliated with a Union, the


latter might not be assured of their loyalty to the Union in view of evident conflict of
interests. The Union can also become company - dominated with the presence of
managerial employees in Union membership.

Stated differently, in the collective bargaining process, managerial employees are


supposed to be on the side of the employer, to act as its representatives, and to see to it that
its interest are well protected. The employer is not assured of such protection if these
employees themselves are union members. Collective bargaining in such a situation can
become one-sided.

If confidential employees could unionize in order to bargain for advantages for


themselves, then they could be governed by their own motives rather than the interest of
the employers. Moreover, unionization of confidential employees for the purpose of
collective bargaining would mean the extension of the law to persons or individuals who
are supposed to act in the interest of the employers. It is not farfetched that in the course of
collective bargaining, they might jeopardize that interest which they are duty bound to
protect.

Confidential employees, having access to confidential information, may become


the source of undue advantage. Said employee(s) may act as spy or spies of either party to
a collective bargaining agreement.

(3) In determining whether the employee has rank and file or managerial status, or whether he
is a supervisory employee, what is essential is the nature of the employee’s function
and not the nomenclature or title given to the job.

Designation should be reconciled with the actual job description of the subject
employees. The mere fact that an employee was designated manager does not necessarily
make him one. Otherwise, there would be an absurd situation where one can be given the
title just to be deprived of the right to be a member of a union. Credit and Collection
Managers and Accounting Managers are highly confidential employees not eligible for
membership in a supervisors’ union.

* Note that this petition was dismissed for being moot and academic, in view of the Union’s
withdrawal from the federation as of 1 September 1992.
CASE NO. 9
San Miguel Corp. Supervisors vs. Laguesma
277 SCRA 370
G.R. No. 110399, August 15, 1997

Topic:

Determination of appropriate bargaining unit; Test

Facts:

Petitioner union filed before DOLE a Petition for Direct Certification or Certification
Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products
Plants of Cabuyao, San Fernando and Otis.

Med-Arbiter Danilo L. Reynante issued an Order ordering the conduct of certification


election among the abovementioned employees of the different plants as one bargaining unit.

San Miguel Corporation filed a Notice of Appeal with Memorandum on Appeal, pointing
out, among others, the Med-Arbiter’s error in grouping together all three (3) separate plants, into
one bargaining unit, and in including supervisory levels 3 and above whose positions are
confidential in nature.

The public respondent, Undersecretary Laguesma, granted respondent company’s Appeal


and ordered the remand of the case to the Med-Arbiter of origin for determination of the true
classification of each of the employees sought to be included in the appropriate bargaining unit.

Upon petitioner-union’s motion, Undersecretary Laguesma granted the reconsideration


prayed for and directed the conduct of separate certification elections among the supervisors
ranked as supervisory levels 1 to 4 (S1 to S4) and the exempt employees in each of the three plants
at Cabuyao, San Fernando and Otis.

Issues:

(1) Whether Supervisory employees 3 and 4 and the exempt employees of the company
are considered confidential employees, hence ineligible from joining a union.

(2) If they are not confidential employees, do the employees of the three plants
constitute an appropriate single bargaining unit?

Ruling:

(1) On the first issue, this Court rules that the employees do not fall within the term
“confidential employees” who may be prohibited from joining a union.
They are not qualified to be classified as managerial employees who, under Article
245 of the Labor Code, are not eligible to join, assist or form any labor organization. In the
very same provision, they are not allowed membership in a labor organization of the rank-
and-file employees but may join, assist or form separate labor organizations of their own.

Confidential employees are those who (1) assist or act in a confidential capacity,
(2) to persons who formulate, determine, and effectuate management policies in the field
of labor relations. The two criteria are cumulative, and both must be met if an employee is
to be considered a confidential employee — that is, the confidential relationship must exist
between the employee and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations.

The exclusion from bargaining units of employees who, in the normal course of
their duties, become aware of management policies relating to labor relations is a principal
objective sought to be accomplished by the ”confidential employee rule.” The broad
rationale behind this rule is that employees should not be placed in a position involving a
potential conflict of interests. “Management should not be required to handle labor
relations matters through employees who are represented by the union with which the
company is required to deal and who in the normal performance of their duties may obtain
advance information of the company’s position with regard to contract negotiations, the
disposition of grievances, or other labor relations matters.”

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

An important element of the “confidential employee rule” is the employee’s need


to use labor relations information. Thus, in determining the confidentiality of certain
employees, a key question frequently considered is the employee’s necessary access to
confidential labor relations information.

(2) The fact that the three plants are located in three different places, namely, in Cabuyao,
Laguna, in Otis, Pandacan, Metro Manila, and in San Fernando, Pampanga is
immaterial. Geographical location can be completely disregarded if the communal or
mutual interests of the employees are not sacrificed.

An appropriate bargaining unit may be defined as “a group of employees of a given


employer, comprised of all or less than all of the entire body of employees, which the
collective interest of all the employees, consistent with equity to the employer, indicate to
be best suited to serve the reciprocal rights and duties of the parties under the collective
bargaining provisions of the law.”

A unit to be appropriate must effect a grouping of employees who have substantial,


mutual interests in wages, hours, working conditions and other subjects of collective
bargaining.
CASE NO. 10
COOPERATIVE RURAL BANK OF DAVAO CITY v. PURA FERRER-CALLEJA
GR No. and Date: GR No. 77951, Sep 26, 1988

Topics: Worker/Member of Cooperative

Facts: Petitioner Cooperative Rural Bank of Davao City, Inc. is a cooperative banking corporation
operating in Davao City. It is owned in part by the Government and its employees are members
and co-owners of the same. The petitioner has around 16 rank-and-file employees. As of August,
1986, there was no existing collective bargaining agreement between the said employees and the
establishment. On the other hand, the herein private respondent Federation of Free Workers is a
labor organization registered with the Department of Labor and Employment. It is interested in
representing the said employees for purposes of collective bargaining.

Private respondent filed with the Ministry of Labor and Employment a verified Petition for
certification election among the rank-and-file employees of the petitioner. Herein public
respondent issued an Order granting the Petition for certification election. Petitioner filed an
Appeal Memorandum and sought a reversal of the Order of the Med-Arbiter. The petitioner argued
therein that, among others, a cooperative is not covered by the Rules governing certification
elections inasmuch as it is not an institution operating for profit. The petitioner also adds that two
of the alleged rank-and-file employees seeking the certification election are managerial employees
disqualified from joining concerted labor activities. In sum, the petitioner insists that its employees
are disqualified from forming labor organizations for purposes of collective bargaining.

Private respondent filed a "Motion to Dismiss the Appeal." Public respondent Bureau of Labor
Relations Director Pura Ferrer-Calleja issued a Resolution affirming the Order of the Med-Arbiter
and dismissing the Appeal. Finding the action taken by the Bureau unsatisfactory, the petitioner
brought the case directly to this Court on April 9, 1987 by way of the instant Petition for certiorari.

Issue: Whether or not the employees of a cooperative can organize themselves for purposes of
collective bargaining.

Held: A cooperative is, by its nature, different from an ordinary business concern being run either
by persons, partnerships, or corporations. Its owners and/or members are the ones who run and
operate the business while the others are its employees. An employee therefore of such a
cooperative who is a member and co-owner thereof cannot invoke the right to collective bargaining
for certainly an owner cannot bargain with himself or his co-owners. However, in so far as it
involves cooperatives with employees who are not members or co-owners thereof, certainly such
employees are entitled to exercise the rights of all workers to organization, collective bargaining,
negotiations and others as are enshrined in the Constitution and existing laws of the country.

WHEREFORE, the herein petition is hereby GRANTED and the resolution of public respondent
Pura Ferrer-Calleja, Director, Bureau of Labor Relations of February 11, 1987 is hereby
MODIFIED to the effect that only the rank and file employees of petitioner who are not its
members or co-owners are entitled to self-organization, collective bargaining, and negotiations,
while the other employees who are members or co-owners thereof cannot enjoy such right.
CASE NO. 11
MACTAN WORKERS UNION VS ABOITIZ
47 SCRA 517

Topic: Collective Bargaining Agreement

FACTS:

Defendant Cebu Shipyard & Engineering Works, Inc. in Lapu Lapu City is employing laborers
and employees belonging to two rival labor unions. Namely plaintiff, Mactan WorkersUnion
(MWU) and intervenor appellant Associated Labor Union (ALU). On November 28,1964, the
defendant Cebu Shipyard & Engineering Works, Inc. and the Associated Labor Union entered into
a ‘Collective Bargaining Agreement which mandate a profit sharing bonus of 10% of its net
income derived from the direct operation of its shipyard and shop in Lapu Lapu City for its
labourers and workers. The profit sharing bonus shall be paid by the company to ALU of which
ALU will deliver it to the employees. Unclaimed bonuses shall be returned to the management.
The delivery should be in 2 instalments, 1st payable in March and the 2nd payable in June every
year. In 1965, the 2nd instalment given in June were not received by members of the rival Mactan
Workers Union (MWU) because they did not went to the ALU office to receive their shares.

After the 60 day period has lapse, ALU returned the funds to the management with an advice to
management to refrain from delivering the amount to the members of MWU without a court order
otherwise ALU will take steps to protect the interests of its members. Because of the warning from
ALU, the company deposited the amount of P4, 035.82 with the Labor Administrator. The MWU
filed a case with the lower court to recover the amount. The lower court ordered the company to
deliver the sum of money to ALU and for ALU to pay the members of MWU their corresponding
shares. Hence, the appeal of intervenor ALU.

ISSUE:

1. WON the intervenor ALU and Defendant Company violated the terms and conditions of the
CBA
2. WON Plaintiff MWU followed the proper grievance procedure
3. WON Intervenor ALU only represent its members and not the entire workforce of Defendant
Company

HELD:

The decision of the lower court was affirmed and the Supreme Court dismissed the petition.

1. Yes, the terms and conditions of the CBA constitute the law between the parties. Those who are
entitled to its benefits can invoke its provisions. It is a well-settled doctrine that the benefits of a
CBA extend to the labourers and employees in the collective bargaining unit including those who
do not belong to the chosen bargaining labor organization.
2. Yes, the Mactan Workers Union claim of P4, 035.82 plus damages and attorney’s fees will have
a sum of less than P10, 000.00 and under Sec 88 of the Judiciary Act mandates that the city judge
shall have original jurisdiction where value of reward does not exceed P10, 000.00. In the case of
Seno vs Mendoza, in the language of Justice Makalintal in seeking the enforcement of a provision
of the CBA, jurisdiction pertains to the ordinary court and not to the industrial court.

3. The Labor Union that gets the majority vote as the exclusive bargaining representative does not
act for its members alone. It represents all the employees in such a bargaining unit. It is not to be
forgotten that what is entitled to constitutional protection is labor, more specifically the workers,
not labor organizations. That is the Raison D’etere of labor unions.
CASE NO. 12
CEBU SEAMEN'S ASSOCIATION v. PURA FERRER-CALLEJA
GR No. and Date: GR No. 83190, Aug 04, 1992

Topics: DOLE Registration as Basis

Facts: This petition seeks the reversal of the resolution of the Bureau of Labor Relations which
affirmed the decision of the Med-Arbiter holding that the set of officers of Seamen's Association
of the Philippines headed by Dominica C. Nacua, as president, was the lawful set of officers
entitled to the release and custody of the union dues as well as agency fees of said association.

A group of deck officers and marine engineers organized themselves into an association and
registered the same as a non-stock corporation known as Cebu Seaman's Association, Inc. (CSAI)
with the Securities and Exchange Commission (SEC). The same group subsequently registered its
association with the Bureau of Labor Relations as a labor union known as the Seamen's Association
of the Philippines, Incorporated (SAPI). SAPI has an existing collective bargaining agreement
(CBA) with Aboitiz Shipping Corporation which remitted checked-off dues to SAPI. Later on, a
group of union members headed by Manuel Gabayoyo claimed that they are entitled to the custody
of the union dues because they were elected as the new set of officers under the supervision of
SEC. Another group headed by Dominica Nacua, claiming that they were the duly elected set of
officers of the union and therefore entitled to the union dues, filed a complaint to restrain the group
of Gabayoyo from representing the union. CSAI represented by the Gabayoyo group.

Issue: WHETHER OR NOT THE COMPLAINANT-APPELLEE THE SEAMEN'S


ASSOCIATION OF THE PHILIPPINES WAS REGISTERED AS A LABOR FEDERATION
WITH THE BUREAU OF LABOR RELATIONS.

Held: Yes, Seamen's Association of the Philippines was registered as a Labor Federation with the
Bureau of Labor Relations. CSAI is not a legitimate labor organization because it is only registered
with SEC. It is the registration of the organization with the Bureau of Labor Relations and not with
the SEC which made it a legitimate labor organization with rights and privileges granted under the
Labor Code. On the basis of the evidence presented by the parties, SAPI, the legitimate labor union,
registered with its office, is not the same association as CSAI, the corporation, insofar as their
rights under the Labor Code are concerned. Hence, SAPI and not the CSAI is entitled to the release
and custody of union fees with Aboitiz Shipping and other shipping companies with whom it had
an existing CBA. The election of the so-called set of officers headed by Manuel Gabayoyo was
conducted under the supervision of the SEC. That being the case, the aforementioned set of officers
is of the CSAI and not of SAP I. It follows, then, that any proceedings and actions taken by said
set of officers cannot, in any manner, affect the union and its members. Public respondent Bureau
of Labor Relations correctly ruled on the basis of the evidence presented by the parties that SAPI,
the legitimate labor union, registered with its office, is not the same association as CSAI, the
corporation, insofar as their rights under the Labor Code are concerned. Hence, the former and not
the latter association is entitled to the release and custody of union fees with Aboitiz Shipping and
other shipping companies with whom it had an existing CBA. As correctly held by public
respondent, the petition is DISMISSED. The questioned resolution of the Bureau of Labor
Relations is AFFIRMED.
CASE NO. 13
VALENTIN GUIJARNO, et.al, petitioners vs. COURT OF INDUSTRIAL RELATIONS,
CENTRAL SANTOS LOPEZ Co., INC. and UNITED SUGAR WORKERS UNlON-lLO,
respondents.
GR No. and Date: G.R. Nos. L-28791-93, August 27, 1973

Topics: 1) Union Rationale and 2) Worker Inclusion and Exclusion (from Part 8 of Syllabus)

Facts: Three unfair labor practice cases for unlawful dismissal allegedly based on legitimate
union activity were filed against respondent Central Santos Lopez Co., Inc. and respondent
United Sugar Workers Union-ILO, with eight of the present petitioners as complainants in the
first, six of them in the second, and five, in the third. There was a consolidated hearing and a
consolidated decision not only for convenience, but also due to there being hardly any difference
as to the nature of the alleged grievance and the defense of management. There was no question
about the expulsion from respondent labor union of the former. In view of a closed-shop
provision in the then existing collective bargaining contract, respondent Central Santos Lopez
Co., Inc. assumed it had to dismiss them.

The respondent company, in its answer, alleged that the only reason for the dismissal of the
complainants herein is because their said dismissal was asked by the USWU-ILO of which union
respondent company has a valid and existing collective bargaining contract with a closed-shop
provision to the effect that those laborers who are no longer members of good standing in the
union may be dismissed by the respondent company if their dismissal is sought by the union; that
respondent company has never committed acts of unfair labor practice against its employees or
workers much less against the complainants herein but that it has a solemn obligation to comply
with the terms and conditions of the contract; and that a closed-shop agreement is sanctioned
under this jurisdiction for such kind of agreement is expressly allowed under the provisions of
Republic Act 875 known as the Industrial Peace Act and the dismissal of complainants is merely
an exercise of a right allowed by said law.

There was no question, however, as to petitioners having been employed by such respondent
Company long before the collective bargaining contract.

Issue: Whether the dismissal was justifiable under the closed-shop provision of the collective
bargaining agreement.

Held: No. The authoritative doctrine that a closed-shop provision in a collective bargaining
agreement is not to be given a retroactive effect so as to preclude its being applied to employees
already in the service. As held in Freeman Shirt Manufacturing Co., Inc. v. Court of Industrial
Relations, the closed-shop agreement authorized under sec. 4, subsec. A (4) of the Industrial
Peace Act above quoted should however, apply to persons to be hired or to employees who are
not yet members of any labor organization. It is inapplicable to those already in the service who
are members of another union. To hold otherwise, i.e., that the employees in a company who are
members of a minority union may be compelled to disaffiliate from their union and join the
majority or contracting union, would render nugatory the right of all employees to self-
organization and to form, join or assist labor organizations of their own choosing, a right
guaranteed by the Industrial Peace Act (sec. 3, Rep. Act No. 875) as well as by the Constitution
(Art. III, sec. 1[6]).

The State shall assure the rights of workers to self-organization, collective bargaining, security of
tenure, and just and humane conditions of work. Correctly understood, it is nothing but the
means of assuring that such fundamental objectives would be achieved. It is the instrumentality
through which an individual laborer who is helpless as against a powerful employer may,
through concerted effort and activity, achieve the goal of economic wellbeing. That is the
philosophy underlying the Industrial Peace Act. For, rightly has it been said that workers
unorganized are weak; workers organized are strong. Necessarily then, they join labor unions. To
further increase the effectiveness of such organizations, a closed-shop has been allowed. It could
happen, though, that such a stipulation which assures further weight to a labor union at the
bargaining table could be utilized against minority groups or individual members thereof. There
are indications that such a deplorable situation did so manifest itself here.

Clearly, the petitioners should be reinstated with back pay.

Union Security – Rationale

Closed-shop agreement explained. — A stipulation in a collective bargaining agreement whereby


the employer agreed "not to have in its employ or to hire any new employee or laborer unless he
is a member of good standing of the union" establishes a "closed shop" in a very limited sense,
namely, that laborers, employees, and workers engaged by the company after the signing of the
agreement must be members of the union. A closed-shop agreement is a form of union security
whereby only union members as a condition for employment redounds to the benefit and
advantage of the said employees because by holding out to loyal members a promise of
employment in the closed-shop, the union wields group solidarity. In fact, the closed-shop
contract is the most prized achievement of unionism

Worker Inclusion and Exclusion (from Part 8 of Syllabus)

Consequently, it is well settled that such unions are not entitled to arbitrarily exclude qualified
applicants for membership, and a closed-shop provision would not justify the employer in
discharging, or a union in insisting upon the discharge of, an employee whom the union thus
refuses to admit to membership, without any reasonable ground therefore.

Needless to say, if said unions may be compelled to admit new members, who have the requisite
qualifications, with more reason may the law and the courts exercise the coercive power when
the employee involved is a long standing union member, who, owing to provocations of union
officers, was impelled to tender his resignation, which he forthwith withdrew or revoked.
CASE NO. 14
SATURNO A. VICTORIA, petitioner,
vs.
HON. AMADO G. INCIONG, DEPUTY MINISTER, and FAR EAST BROADCASTING
COMPANY, INC., respondents.

Facts:
Petitioner Saturno Victoria was employed in the private respondent Far East Broadcasting
Company, Incorporated as a radio transmitter operator. Petitioner and some of his co-workers
organized the Far East Broadcasting Company Employees Association. After registering their
association with the then Department of Labor, they demanded recognition of said association by
the company but the latter refused on the ground that being a non-profit, non-stock, non-
commercial and religious corporation, it is not covered by Republic Act 875. The Secretary of
Labor concluded that the Union cannot force to recognize them. The Court of First Instance of
Bulacan has rendered it’s decision that the strike was illegal hence the Labor Union cannot force
the plaintiff to recognized them. Upon issuance of the decision, the company issued a notice to
Saturno Victoria, terminating him from the company.
Issue:
- Whether or not, the dismissal of the Petitioner is valid based on the decision of the
Court of First Instance of Bulacan
- Whether or not, a clearance for the Secretary of Labor is necessary prior to dismissal
or shutdown
Held:
Court affirmed the decision of the Secretary of Labor. The Petitioner herein acting as the head of
the Union should have seen to it that the acts of the Union is within the percepts of the Law and
will not violate any existing rules and regulations on labor relations. Though no clearance has been
applied by the respondent company. The rationale of such requirement has already been fully met.
The Secretary of Labor was apprised of private respondent's intention to terminate the services of
petitioner. This in effect is an application for clearance to dismiss petitioner from employment.
CASE NO. 15
San Miguel Foods Inc. vs. Laguesma
263 SCRA 68
G.R. No. 116172. October 10, 1996

Topic:

Labor union and government regulation; requirements and rationale

Facts:

A petition for certification election among the monthly-paid employees of the San Miguel
Foods, Inc.-Cebu B-Meg Feeds Plant (SMFI, for brevity) was filed by private respondent labor
federation Ilaw at Buklod ng Manggagawa (IBM, for brevity) before Med-Arbiter Achilles V.
Manit, alleging that it is a legitimate labor organization duly registered with the DOLE.

SMFI is a business entity duly organized and existing under the laws of the Philippines
which employs roughly 75 monthly-paid employees, almost all of whom support the present
petition. It was submitted in said petition that there has been no certification election conducted in
SMFI to determine the sole and exclusive bargaining agent thereat for the past two years and that
the proposed bargaining unit, which is SMFIs monthly-paid employees, is an unorganized one. It
was also stated therein that petitioner IBM (herein private respondent) has already complied with
the mandatory requirements for the creation of its local or affiliate in SMFIs establishment.

IBM’s first petition for certification election was denied mainly due to IBMs failure to
comply with certain mandatory requirements of the law.

Petitioner SMFI later appealed to the Secretary of Labor and Employment alleging that the
Med-Arbiter erred in directing the conduct of certification election considering that the local or
chapter of IBM at SMFI is still not a legitimate labor organization with a right to be certified as
the exclusive bargaining agent in petitioners establishment based on two grounds: (1) the
authenticity and due execution of the Charter Certificate submitted by IBM in favor of its local at
SMFI cannot yet be ascertained as it is still now known who is the legitimate and authorized
representative of the IBM Federation who may validly issue said Charter Certificate; and (2) a
group of workers or a local union shall acquire legal personality only upon the issuance of a
Certificate of Registration by the Bureau of Labor Relations under Article 234 of the Labor Code,
which IBM at SMFI did not possess.

Issue:

What are the requirements for becoming a legitimate labor organization?

Ruling:

Article 212(h) of the Labor Code defines a legitimate labor organization as "any labor
organization duly registered with the Department of Labor and Employment, and includes any
branch or local thereof."
It is important to determine whether or not a particular labor organization is legitimate
since legitimate labor organizations have exclusive rights under the law which cannot be exercised
by non-legitimate unions, one of which is the right to be certified as the exclusive representative
of all the employees in an appropriate collective bargaining unit for purposes of collective
bargaining. These rights are found under Article 242 of the Labor Code.

LEGITIMACY OF LABOR ORGANIZATION, WHEN ACQUIRED - Ordinarily, a


labor organization attains the status of legitimacy only upon the issuance in its name of a Certificate
of Registration by the Bureau of Labor Relations pursuant to Articles 234 and 235 of the Labor
Code.

The foregoing procedure is not the only way by which a labor union may become legitimate,
however. When an unregistered union becomes a branch, local or chapter of a federation, some of
the aforementioned requirements for registration are no longer required.

Section 3, Rule II, book V of the Implementing Rules of the Labor Code governs the
procedure for union affiliation. x x x Paragraph (a) refers to a local or chapter of a federation which
did not undergo the rudiments of registration while paragraph (b) refers to an independently
registered union which affiliated with a federation. Implicit in the foregoing differentiation is the
fact that a local or chapter need not be independently registered. By force of law (in this case,
Article 212 [h]), such local or chapter becomes a legitimate labor organization upon compliance
with the aforementioned provisions of Section 3 (a) and (e), without having to be issued a
Certificate of Registration in its favor by the BLR. x x x Absent compliance with these mandatory
requirements, the local or chapter does not become a legitimate labor organization. Corollarily, the
satisfaction of all these requirements by the local or chapter shall vest upon it the status of
legitimacy with all its concomitant statutory privileges, one of which is the right to be certified as
the exclusive representative of all the employees in an appropriate bargaining unit.

Petitioner SMFI does not dispute the fact that IBM at SMFI has complied with the second
set of requirements, i.e., constitution, by-laws, et al. What is controverted is the non-compliance
with the requirement as to the charter certificate which must be submitted to the BLR within thirty
(30) days from its issuance by the labor federation. While the presence of a charter certificate is
conceded, petitioner maintains that the validity and authenticity of the same cannot yet be
ascertained as it is still not known who is the legitimate and authorized representative of the IBM
Federation who may validly issue said charter certificate in favor of its local, IBM at SMFI.
According to petitioner, there are two (2) contending sets of officers of the IBM Federation at the
time the charter certificate was issued in favor of IBM at SMFI, the faction of Mr. Severino O.
Meron and that of Mr. Edilberto B. Galvez. x x x We agree with the position of the public
respondent and the Solicitor General in upholding the legitimate status of IBM at SMFI. In addition,
private respondent's Comment to this petition indicates that in the election of officers held to
determine the representatives of IBM, the faction of Mr. Meron lost to the group of Mr. Edilberto
Galvez, and the latter was acknowledged as the duly elected IBM National President. Thus, the
authority of Mr. Galvez to sign the charter certificate of IBM at SMFI, as President of the IBM
Federation, can no longer be successfully questioned.
CHARTER CERTIFICATE; CERTIFICATION UNDER OATH BY THE
ORGANIZATION'S SECRETARY AND PRESIDENT NOT ESSENTIAL FOR
VALIDITY THEREOF - Petitioner next asseverates that the Charter Certificate submitted by the
private respondent was defective in that it was not certified under oath and attested to by the
organization's secretary and President. Petitioner is grasping at straws. Under our ruling in the
Progressive Development Corporation case, what is required to be certified under oath by the
secretary or treasurer and attested to by the local's president are the "constitution and by-laws, a
statement on the set of officers, and the books of accounts" of the organization. The charter
certificate issued by the mother union need not be certified under oath by the secretary or treasurer
and attested to by the local's president.
CASE NO. 16
METROLAB INDUSTRIES, INC., petitioner,
vs.
HONORABLE MA. NIEVES ROLDAN-CONFESOR, in her capacity as Secretary of the
Department of Labor and Employment and METRO DRUG CORPORATION
EMPLOYEES ASSOCIATION - FEDERATION OF FREE WORKERS, respondents.

Facts: Respondent is a Labor Organization composed of rank and file employees from Metrolab
Industries, Inc. and also of Metro Drug, Inc. The Collective Bargaining Agreement between the
parties have ended and the negotiations for a new CBA ended in a deadlock. The parties failed to
settle their dispute despite the conciliation efforts of the National Conciliation and Mediation
Board. Hence, the private respondent filed a notice of strike. then Labor Secretary Torres issued
an order resolving all the disputed items in the CBA and ordered the parties involved to execute a
new CBA. Thereafter, the union filed a motion for reconsideration. During the pendency of the
motion for reconsideration, private petitioner laid of some 94 of its employees, thereafter another
wave of 73 employees was laid off. Metrolab contended that the layoff was temporary and in the
exercise of its management prerogative. The Labor Secretary then issued a decision that the
dismissal is illegal. Metrolab insists that the subject layoffs did not exacerbate their dispute with
the Union since no untoward incident occurred after the layoffs were implemented.

Issue:
- Whether or not, the Secretary of Labor committed grave abuse of discretion and exceed
her jurisdiction in declaring the temporary laid of illegal.

Held:
The court cannot agree with the petitioner’s contention that the temporary laid off is a Management
discretion. As Held in the case of PAL vs NLRC, the exercise of management discretion is not
boundless, it was held that such discretion must be without abuse of discretion. The court agreed
with the Secretary of Labor that any act committed during the pendency of the dispute that tends
to give rise to further contentious issues or increase the tensions between the parties should be
considered an act of exacerbation.
CASE NO. 17
Villar v Inciong
G.R. No. L-50283-84 April 20, 1983

Topics: Admission and Discipline (Right to Discipline); Labor Union and Government Regulation
(Effect of Freedom of Association); Jurisdiction (Exhaustion of Internal Remedies)

Facts:
Petitioners were members of the Amigo Employees Union-PAFLU, a duly registered labor
organization which, was the existing bargaining agent of the employees in private respondent
Amigo Manufacturing, Inc. (Company).

The Company and the Amigo Employees Union-PAFLU had a CBA governing their labor
relations, which agreement was then about to expire on February 28, 1977. Within the last 60 days
of the CBA, upon written authority of at least 30% of the employees in the company, including
the petitioners, the Federation of Unions of Rizal (FUR) filed a petition for certification election
with MOLE. The petition was opposed by the PAFLU with whom the Amigo Employees Union
was at that time affiliated. The same employees who had signed the petition filed by FUR signed
a joint resolution disaffiliating from PAFLU.

Dolores Villar, representing herself to be the authorized representative of the Amigo Employees
Union, filed a petition for certification election in the Company. The Amigo Employees Union-
PAFLU intervened and moved for the dismissal of the petition for certification election filed by
Villar, on the ground, among others that Villar had no legal personality to sign the petition since
she was not an officer of the union nor is there factual or legal basis for her claim that she was the
authorized representative of the local union.

Med-Arbiter dismissed the petition filed by Villar, which dismissal is still pending appeal before
BLR. Amigo Employees Union-PAFLU called a special meeting of its general membership. A
Resolution was thereby unanimously approved which called for the investigation by the PAFLU
national president, of all of the petitioners and one Felipe Manlapao, for continuously maligning
the union spreading false propaganda that the union officers were merely appointees of the
management; and for causing divisiveness in the union. PAFLU formed a Trial Committee to
investigate the local union's charges against the petitioners for acts of disloyalty.

PAFLU and the Company concluded a new CBA which also reincorporated the same provisions
of the existing CBA, including the union security clause. PAFLU President rendered a decision
finding the petitioners guilty of the charges. PAFLU demanded the Company to terminate the
employment of the petitioners pursuant to the security clause of the CBA. Acting on PAFLU's
demand, the Company informed PAFLU that it will first secure the necessary clearances to
terminate petitioners. PAFLU requested the Company to put petitioners under preventive
suspension pending the application for said clearances to terminate the petitioners. The Company
filed the request for clearance to terminate the petitioners before DOLE which was granted. DOLE
Secretary Inciong denied the appeal, hence, this petition for review.

Issues:
1. Whether the DOLE Secretary erred in affirming the grant of clearance of termination of
petitioners.
2. Whether the contention of petitioners that the charges against them being intra-union problems,
should have been investigated in accordance with the constitution and by-laws of the Amigo
Employees Union-PAFLU and not of the PAFLU.

Held:
1. No. It is true that disaffiliation from a labor union is not open to legal objection. It is implicit
in the freedom of association ordained by the Constitution. But the Court has laid down the
ruling that a closed shop is a valid form of union security, and such provision in a CBA is not
a restriction of the right of freedom of association guaranteed by the Constitution.

In the case at bench, the Company and the Amigo Employees Union-PAFLU entered into a
CBA with a union security clause which is a reiteration of the old CBA. The quoted stipulation
for closed-shop is clear and unequivocal. Petitioners’ theory that their expulsion was not valid
upon the grounds is untenable. PAFLU had the authority to investigate petitioners on the
charges filed by their co-employees in the local union and after finding them guilty as charged,
to expel them from the roll of membership of the Amigo Employees Union-PAFLU is clear
under the constitution of the PAFLU to which the local union was affiliated. And pursuant to
the security clause of the new CBA, reiterating the same clause in the old CBA, PAFLU was
justified in applying said security clause.

Recognized and salutary is the principle that when a labor union affiliates with a mother union,
it becomes bound by the laws and regulations of the parent organization. It is undisputable that
oppositors were members of the Amigo Employees Union at the time that said union affiliated
with PAFLU; hence, oppositors are bound by the laws and regulations of PAFLU.

Inherent in every labor union, or any organization for that matter, is the right of self-
preservation. When members of a labor union seek the disintegration and destruction of the
very union to which they belong; they thereby forfeit their rights to remain as members of the
union which they seek to destroy. Prudence and equity, as well as the dictates of law and
justice, therefore, compelling mandate the adoption by the labor union of such corrective and
remedial measures, in keeping with its laws and regulations, for its preservation and continued
existence; lest by its folly and inaction, the labor union crumble and fall.

2. No. It is true that under the Implementing Rules and Regulations of the Labor Code, in case of
intra-union disputes, redress must first be sought within the organization itself in accordance
with its constitution and by-laws. However, it has been held that this requirement is not
absolute but yields to exception under varying circumstances.

The Supreme Court based the ruling on the case of Kapisanan ng mga Manggagawa sa MRR
vs. Hernandez, 20 SCRA 109

In the case at bar, noteworthy is the fact that the complaint was filed against the union and
its incumbent officers, some of whom were members of the board of directors. The
constitution and by-laws of the union provide that charges for any violations thereof shall
be filed before the said board. But as explained by the lower court, if the complainants had
done so the board of directors would in effect be acting as respondent investigator and
judge at the same time. To follow the procedure indicated would be a farce under the
circumstances, where exhaustion of remedies within the union itself would practically
amount to a denial of justice or would be illusory or vain, it will not be insisted upon,
particularly where property rights of the members are involved, as a condition to the right
to invoke the aid of a court.

In the case at bar, the petitioners were charged by the officers of the Amigo Employees Union-
PAFLU themselves who were also members of the Board of Directors of the Amigo
Employees Union-PAFLU. Thus, were the petitioners to be charged and investigated according
to the local union's constitution, they would have been tried by a trial committee of three (3)
elected from among the members of the Board who are themselves the accusers. (Section 2,
Article 11, Constitution of the Local Union). Petitioners would be in a far worse position had
this procedure been followed. Nonetheless, petitioners admit in their petition that two (2) of
the six (6) charges, i.e. disaffiliation and filing a petition for certification election, are not intra-
union matters and, therefore, are cognizable by PAFLU.
CASE NO. 18

FURUSAWA RUBBER PHILIPPINES, INC. VS SECRETARY OF LABOR


G.R. No. 121241. December 10, 1997
282 SCRA 635

Topic: Effect of Registration

FACTS:

On March 1995, Furusawa Employees Union – Independent (FEU-IND) filed a petition for
certification election among the rank and file employees of Furusawa Rubber Philippines, Inc.
(Furusawa), a domestic corporation engaged in the manufacture of rubber and other related
products for export. Furusawa herein moved to dismiss the petition for certification election on the
ground that respondent FEU-IND was not a legitimate labor organization because of the its failure
to submit an original copy of its certificate of registration.

The Med-Arbiter ruled in favor of FUE-IND allowing a certification election to be conducted


among the regular rank and file employees of Furusawa being a legitimate labor organization.

Furusawa appealed to the Secretary of Labor but the latter affirmed the order of the Med-Arbiter.
FURUSAWA moved for a reconsideration but the motion was again denied.

ISSUE:
Whether the failure of the FEU-IND to submit an original copy of its certificate of registration
constitute that it is not a legitimate labor organization.

HELD:
The Supreme Court affirmed the decision of the Secretary of Labor and Employment that FEU-
IND is a legitimate labor organization.
As such, it enjoys all the rights and privileges recognized by law. The fact that FEU-IND has been
issued Certificate of Registration No. RO-400-9502-UR-003 by Regional Office No. 14 of the
Department of Labor and Employment (DOLE) is sufficient proof of its legitimacy. The
presentation of the xerox copy of the certificate of registration to support its claim of being a duly
registered labor organization instead of the submission of the original certificate is not a fatal defect
and does not in any way affect its legitimate status as a labor organization conferred by its
registration with DOLE. The issuance of the certificate of registration evidently shows that FEU-
IND has complied with the requirements of Art. 234 of the Labor Code. The requirements for
registration being mandatory, they are complied with before any labor organization, association or
group of unions or workers acquires legal personality and be entitled to the rights and privileges
granted by law to legitimate labor organizations.

One of the rights of a legitimate labor organization is to represent its members in collective
bargaining agreements; also, to be certified as the exclusive representative of all employees in an
appropriate unit for purposes of collective bargaining. Hence the petition of FEU-IND, as a
legitimate labor organization, for certification election may rightfully be granted.
CASE NO. 19
TROPICAL HUT EMPLOYEES’ UNION-CGW vs. TROPICAL HUT FOOD MARKET,
INC.G.R. No. L-43495-99, 20 January 1990

Topic: Union Security Clause

FACTS:
The rank and file workers of the Tropical Hut Food Market Incorporated (respondent company)
organized a local union called the Tropical Hut Employees Union (THEU) and immediately sought
affiliation with the National Association of Trade Unions (NATU). The NATU accepted the
THEU application for affiliation.

The CBA between respondent company and THEU-NATU contains a union security clause: Union
Membership and Union Check-off. Sec. 1 provides that Employees who are already members of
the UNION at the time of the signing of this Agreement or who become so thereafter shall be
required to maintain their membership therein as a condition of continued employment. Attached
to the Agreement is a check-off Authorization Form, the terms of which are as follows: “We, the
undersigned, hereby designate the NATU, of which the THEU is an affiliate as sole collective
bargaining agent in all matters relating to salary rates, hours of work and other terms and conditions
of employment in the Tropical Hut Food Market, Inc.…”
Later on, NATU received a letter jointly signed by the incumbent officers of the local union
informing the NATU that THEU was disaffiliating from the NATU federation. The employees
were dismissed because, as respondent company contended, they violated the union security clause.

ISSUE:
Whether or not the disaffiliation of the local union from the national federation valid?

HELD:
The right of a local union to disaffiliate from its mother federation is well-settled. A local union,
being a separate and voluntary association, is free to serve the interest of all its members including
the freedom to disaffiliate when circumstances warrant. This right is consistent with the
constitutional guarantee of freedom of association. The inclusion of the word NATU after the
name of the local union THEU in the registration with the Department of Labor is merely to stress
that the THEU is NATU’s affiliate at the time of the registration. It does not mean that the said
local union cannot stand on its own. Neither can it be interpreted to mean that it cannot pursue its
own interests independently of the federation. A local union owes its creation and continued
existence to the will of its members and not to the federation to which it belongs.

Further, there is no merit in the contention of the respondents that the act of disaffiliation violated
the union security clause of the CBA and that their dismissal as a consequence thereof is valid. A
perusal of the CBAs shows that the THEU-NATU, and not the NATU federation, was recognized
as the sole and exclusive collective bargaining agent for all its workers and employees in all matters
concerning wages, hours of work and other terms and conditions of employment. Although NATU
was designated as the sole bargaining agent in the check-off authorization form attached to the
CBA, this simply means it was acting only for and in behalf of its affiliate. The NATU possessed
the status of an agent while the local union remained the basic principal union which entered into
contract with the respondent company. When the THEU disaffiliated from its mother federation,
the former did not lose its legal personality as the bargaining union under the CBA. Moreover, the
union security clause embodied in the agreements cannot be used to justify the dismissals meted
to petitioners since it is not applicable to the circumstances obtaining in this case. The CBA
imposes dismissal only in case an employee is expelled from the union for joining another
federation or for forming another union or who fails or refuses to maintain membership therein.
The case at bar does not involve the withdrawal of merely some employees from the union but of
the whole THEU itself from its federation. Clearly, since there is no violation of the union security
provision in the CBA, there was no sufficient ground to terminate the employment of petitioners.
CASE NO. 20
Progressive Development Corp v Secretary of DOLE
G.R. No. 96425 February 4, 1992

Topics: Effect of Non-registration; Methods of Establishing Majority Status (Policy Consideration)

Facts:
Respondent Pambansang Kilusan ng Paggawa (KILUSAN) -TUCP filed with the Department of
Labor and Employment (DOLE) a petition for certification election among the rank-and-file
employees of the petitioner alleging that it is a legitimate labor federation and its local chapter,
Progressive Development Employees Union, was issued charter certificate No. 90-6-1-153.

Respondent Pambansang Kilusan ng Paggawa (KILUSAN) -TUCP claimed that there was no
existing collective bargaining agreement and that no other legitimate labor organization existed in
the bargaining unit.

Petitioner PDC filed its motion to dismiss contending that the local union failed to comply with
Rule II Section 3, Book V of the Rules Implementing the Labor Code, as amended, which requires
the submission of: (a) the constitution and by-laws; (b) names, addresses and list of officers and/or
members; and (c) books of accounts.

Respondent KILUSAN-TUCP submitted a rejoinder to PDC's motion to dismiss claiming that it


had submitted the necessary documentary requirements for registration, such as the constitution
and by-laws of the local union, and the list of officers/members with their addresses. Kilusan
further averred that no books of accounts could be submitted as the local union was only recently
organized.

Petitioner PDC insisted that upon verification with the Bureau of Labor Relations (BLR), it found
that the alleged minutes of the organizational meeting was unauthenticated, the list of members
did not bear the corresponding signatures of the purported members, and the constitution and by-
laws did not bear the signature of the members and was not duly subscribed. It argued that the
private respondent KILUSAN-TUCP therefore failed to substantially comply with the registration
requirements provided by the rules.

The MED-ARBITER Dela Cruz held that there was substantial compliance with the requirements
for the formation of the chapter. He further stated that mere issuance of the charter certificate by
the federation was sufficient compliance with the rules. Considering that the establishment was
unorganized, he maintained that a certification election should be conducted to resolve the question
of representation. The Petitioner filed an MR to the Office of the Secretary. Thereafter, the public
respondent Laguesma denied the MR. Hence, this petition for certiorari.

Issue:
1. Whether or not the petitioner was correct that a labor organization such as the respondent
(KILUSAN)-TUCP may not validly invest the status of legitimacy upon a local or chapter
through the mere expedient of issuing a charter certificate and submitting such certificate to
the BLR and as such local or chapter must at the same time comply with the requirement of
submission of duly subscribed constitution and by-laws, list of officers and books of accounts.

2. Whether the Court's conclusion is construed as impairing the local union's right to be certified
as the employees' bargaining agent in the petitioner's establishment where as in this case the
petition for certification election was filed by the federation which is merely an agent, the
petition is deemed to be filed by the chapter, the principal, which must be a legitimate labor
organization.

Held:
1. YES, because, the failure of the secretary of PDEU-Kilusan to certify the required documents
under oath is fatal to its acquisition of a legitimate status.

In the case of union registration, the rationale for requiring that the submitted documents and
papers be certified under oath by the secretary or treasurer, as the case may be, and attested to
by president is apparent.

The submission of the required documents (and payment of P50.00 registration fee) becomes
the Bureau's basis for approval of the application for registration. Upon approval, the labor
union acquires legal personality and is entitled to all the rights and privileges granted by law
to a legitimate labor organization. The employer naturally needs assurance that the union it is
dealing with is a bona fide organization, one which has not submitted false statements or
misrepresentations to the Bureau. The inclusion of the certification and attestation
requirements will in a marked degree allay these apprehensions of management. Not only is
the issuance of any false statement and misrepresentation a ground for cancellation of
registration (see Article 239 (a), (c) and (d)); it is also a ground for a criminal charge of perjury.

In the case of the union affiliation with a federation, the documentary requirements are found
in Rule II, Section 3(e), Book V of the Implementing Rules, which we again quote as follows:
(c) The local chapter of a labor federation or national union shall have and maintain a
constitution and by-laws, set of officers and books of accounts. For reporting purposes, the
procedure governing the reporting of independently registered unions, federations or national
unions shall be observed.

Since the "procedure governing the reporting of independently registered unions" refers to the
certification and attestation requirements contained in Article 235, paragraph 2, it follows that
the constitution and by-laws, set of officers and books of accounts submitted by the local and
chapter must likewise comply with these requirements. The same rationale for requiring the
submission of duly subscribed documents upon union registration exists in the case of union
affiliation. Moreover, there is greater reason to exact compliance with the certification and
attestation requirements because, as previously mentioned, several requirements applicable to
independent union registration are no longer required in the case of formation of a local or
chapter. The policy of the law in conferring greater bargaining power upon labor unions must
be balanced with the policy of providing preventive measures against the commission of fraud.
We observe that, as borne out by the facts in this case, the formation of a local or chapter
becomes a handy tool for the circumvention of union registration requirements. Absent the
institution of safeguards, it becomes a convenient device for a small group of employees to
foist a not-so-desirable federation or union on unsuspecting co-workers and pare the need for
wholehearted voluntariness which is basic to free unionism. The records show that on June 16,
1990, Kilusan met with several employees of the petitioner. Excerpts of the "Minutes of the
Organizational/General Membership Meeting of Progressive Development Employees Union
(PDEU) — Kilusan," are quoted below:

The meeting was formally called to order by Bro. Jose V. Parungao, KILUSAN secretary for
organization by explaining to the general membership the importance of joining the union. He
explained to the membership why they should join a union, and briefly explained the ideology
of the Pambansang Kilusan ng Paggawa-TUCP as a democratically based organization and
then read the proposed Constitution and By-Laws, after which said Constitution and By-Laws
was duly and unanimously ratified after some clarification.

Bro. Jose Parungao was also unanimously voted by the group to act as the chairman of the
COMELEC in holding the organizational election of officers of the union.

Bro. Jose Parungao, officially opened the table for nomination of candidates after which the
election of officers followed by secret balloting and the following were the duly elected officers.
(Original Record, p. 25)

The foregoing shows that Kilusan took the initiative and encouraged the formation of a union
which automatically became its chapter. On June 18, 1990, Kilusan issued a charter certificate
in favor of PDEU-KILUSAN (Records, page 1). It can be seen that Kilusan was moving very
fast.

On June 19, 1990, or just three days after the organizational meeting, Kilusan filed a petition
for certification election (Records, pages 2 and 3) accompanied by a copy each of the charter
certificate, constitution and by-laws and minutes of the organizational meeting. Had the local
union filed an application for registration, the petition for certification election could not have
been immediately filed. The applicant union must firstly comply with the "20% signature"
requirement and all the other requisites enumerated in Article 234. Moreover, since under
Article 235 the BLR shall act on any application for registration within thirty (30) days from
its filing, the likelihood is remote that, assuming the union complied with all the requirements,
the application would be approved on the same day it was filed.

2. No. The Court's conclusion should not be misconstrued as impairing the local union's right to
be certified as the employees' bargaining agent in the petitioner's establishment. We are merely
saying that the local union must first comply with the statutory requirements in order to
exercise this right. Big federations and national unions of workers should take the lead in
requiring their locals and chapters to faithfully comply with the law and the rules instead of
merely snapping union after union into their folds in a furious bid with rival federations to get
the most number of members.

The Court is not saying that the scheme used by the respondents is per se illegal for precisely,
the law allows such strategy. It is not this Court's function to augment the requirements
prescribed by law in order to make them wiser or to allow greater protection to the workers
and even their employer. Our only recourse is, as earlier discussed, to exact strict compliance
with what the law provides as requisites for local or chapter formation.

It may likewise be argued that it was Kilusan (the mother union) and not the local union which
filed the petition for certification election and, being a legitimate labor organization, Kilusan
has the personality to file such petition.

At this juncture, it is important to clarify the relationship between the mother union and the
local union. In the case of Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.,
66 SCRA 512 [1975]), the Court held that the mother union, acting for and in behalf of its
affiliate, had the status of an agent while the local union remained the basic unit of the
association, free to serve the common interest of all its members subject only to the restraints
imposed by the constitution and by-laws of the association. Thus, where as in this case the
petition for certification election was filed by the federation which is merely an agent, the
petition is deemed to be filed by the chapter, the principal, which must be a legitimate labor
organization. The chapter cannot merely rely on the legitimate status of the mother union.
CASE NO. 21

ALLIANCE OF DEMOCRATIC FREE LABOR ORGANIZATION (ADFLO) vs.


UNDERSECRETARY OF LABOR BIENVENIDO LAGUESMA
G.R. No. 108625. March 11, 1996
254 SCRA 565
Topic: Cancellation of Union Certificate/Registration

FACTS:
On March 1988, the Alliance of Democratic Free Labor Organization (ADFLO) filed an
application for registration as a national federation alleging, among others that it has twelve (12)
affiliates.
After proper evaluation of its application and finding ADFLO to have complied with the
requirements for registration pursuant to Articles 234 and 237 of the Labor Code, the Bureau (of
Labor Relations) issued a certificate of registration to the federation.
On February 1989, the Confederation of Labor and Allied Social Services (CLASS) filed a petition
for the cancellation of the Registration Certificate issued to ADFLO.
The first hearing conducted by the BLR after the case was remanded to it for further proceedings.
However, since CLASS was not yet ready with its evidence, the hearing was postponed. CLASS
then filed its Formal Offer of Evidence. ADFLO filed an Objection to Admission of Exhibits based
on the grounds that the exhibits were not marked nor identified by any witness during the hearing
of the case where ADFLO had been properly notified.
In the meantime, at the hearing of the case, CLASS failed to appear and only ADFLO’s President
Antonio Cedilla appeared. Unaware that an objection had already been filed by ADFLO’s counsel,
Cedilla manifested that ADFLO will file its answer to CLASS’ offer of evidence within thirty (30)
days. BLR Director without first ruling on the admissibility of the exhibits of CLASS and without
any further hearing then cancelled the registration of ADFLO.

ISSUE: Whether a certificate of registration can be cancelled without a hearing.

HELD:
Subject to the requirements of notice and due process, and under Article 238 of the Labor Code,
(t)he certificate of registration of any legitimate labor organization, whether national or local, shall
be cancelled by the Bureau if it has reason to believe, after due hearing, that the said labor
organization no longer meets one or more of the requirements herein prescribed.

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.
Under the circumstances, petitioner was indisputably entitled to be heard before a judgment could
be rendered cancelling its certificate of registration. And in one of the decisions rendered by the
Supreme Court, it was held that a decision rendered without any hearing is null and void.
CASE NO. 22
UST FACULTY UNION (USTFU) et al petitioners, vs. Dir. BENEDICTO ERNESTO
R.BITONIO JR. of the Bureau of Labor Relations et al. respondents
G.R. No. 131235 November 16, 1999

Topic: Self-Organization

FACTS:
Petitioners are duly elected officers of USTFU and have a subsisting five-year CBA with
the employer UST. The Sec-Gen then posted a notice addressed to the members of USTFU
announcing a general assembly and informed them of the constitution on committee on elections
to oversee the election. Appellants then filed a separate petition directed against appellees and
members of the COMELEC. The petition alleged that the COMELEC was not constituted in
accordance with USTFU's constitution and by-laws (CBL) and that no rules had been issued to
govern the conduct of the election. A TRO was then issued enjoining the conducting of election.
However, on Oct. 4 1996, in the general assembly, appellants were elected as new set of officers.
Appellees then filed for the nullification of the election. Appellees alleged that the holding of the
same violated the temporary restraining order. Accusing appellants of usurpation, appellees
characterized the election as spurious for being violative of USTFU's CBL and that there was a
violation of 10-day notice rule and the supposed elections were conducted without a COMELEC
being constituted by the Board of Officers. Thereafter, Bitonio ruled that election could not be
legitimized by the recognition of the newly "elected" set of officers by UST or by the alleged
ratification of the new CBA by the general membership of the USTFU. He stated, “The privilege
of determining who the union officers will be belongs exclusively to the members of the union.
Said privilege is exercised in an election proceeding in accordance with the union's CB Land
applicable law”.

ISSUE:
Whether or not the respondent Bitonio committed grave abuse of discretion in refusing to
recognize the officers "elected" during the October 4, 1996 general assembly.

HELD:
No. Self-organization is a fundamental right guaranteed by the Philippine Constitution and the
Labor Code. Corollary to this right is the prerogative not to join, affiliate with or assist a labor
union. Therefore, to become a union member, an employee must, as a rule, not only signify the
intent to become one, but also take some positive steps to realize that intent. The procedure for
union membership is usually embodied in the union's constitution and bylaws. An employee who
becomes a union member acquires the rights and the concomitant obligations that go with this new
status and becomes bound by the union's rules and regulations.
A union election is held pursuant to the union's constitution and bylaws, and the right to vote in
itis enjoyed only by union members. A union election should be distinguished from a certification
election, which is the process of determining, through secret ballot, the sole and exclusive
bargaining agent of the employees in the appropriate bargaining unit, for purposes of collective
bargaining. Specifically, the purpose of a certification election is to ascertain whether or not a
majority of the employees wish to be represented by a labor organization and, in the affirmative
case, by which particular labor organization.
CASE NO. 23

HEIRS OF TEODOLO M. CRUZ vs.COURT OF INDUSTRIAL RELATIONS


G.R. No. L-23331-32 December 27, 1969
30 SCRA 917

Topic: Union-Member Relation; Sub-topic: Nature of Relationship

FACTS:
On June 1952, the Santiago Labor Union, composed of workers of the Santiago Rice Mill, a
business enterprises engaged in the, buying. and milling of palay at Santiago, Isabela, and owned
and operated by King Hong Co., Inc., filed before the respondent Court of Industrial Relations
(CIR) cases for petition for overtime pay, premium pay for night, Sunday and holiday work, and
for reinstatement of workers illegally laid off. CIR ruled in favor the union. However, upon motion
for reconsideration filed the CIR en banc by a split decision of 3-2 vote issued a resolution
reversing the decision of the trial judge . The case reached the Supreme Court but the SC still
favored the union. The SC remanded the records for enforcement by respondent CIR. In
examination of books, said CIR’s Chief Examiner filed his Partial Report regarding the
computation of the benefits rendered in the case in favor of the Union.

Petitioners claim that in this computation the Examiner did not include the claims of 70 other
laborers whose total claims (for back wages).

The trial judge took no action on the Urgent Motion of the union, wherein it emphasized that CIR,
with Court’s action rejecting its appeal, no longer had any excuse for refusing to comply with the
deposit Order. An unscheduled conference was called and held on October 1963 in the chambers
of the trial judge, and attended by representatives of respondent firm, including their counsels of
record and the President of the union and 8 directors of the union. Four of these nine union
representatives, including the union president himself, had no claims or awards whatever under
the judgment. Said union officials were not assisted by counsel, as petitioner Mary Concepcion,
counsel of record of the union, was not present, not having been notified of the conference.

In this conference respondent firm made again the same offer to settle and quitclaim the judgment
in favor of the union members for the same amount which offer had already been ‘rejected by the
union at the earlier conference held on June 1963. But this time, respondent and the directors of
the union decided to settle the case amicably with the payment by the firm of the same amount of
P110,000.00 which was deposited with the Court’s disbursing officer “immediately upon the
signing of the settlement which will be prepared by the respondent firm through its counsel.”

One of the union directors together with 49 of its members questioned the amicable settlement that
took place. They claim that the Board of Directors did not have any express authority of the
members of the Santiago Labor Union to enter into any compromise, that it was tainted by apparent
bad faith on the part of the President of the Union.

ISSUE: Whether the amicable settlement is valid.


RULING:
NO. Petitioners were not accorded due process of law. The union was deprived of the assistance
of its counsel. The lack or due deliberation and caution in the trial judge’s instant approval of the
settlement is seen from the stipulations therein that the union thereby waived and quitclaimed any
and all claims which it may have against the respondent, as well as the claim of each and every
one of the members of the union against respondent, when precisely the authority of the union
board members to enter into any such compromise or settlement was under express challenge by
Magalpo, a board member herself which the trial judge completely disregarded.

Petitioners were deprived of the formal conference on the and of their right to be assisted by the
union counsel as expressly requested, so that a fair hearing could be accorded petitioners and an
opportunity afforded them to air their serious charges of bad faith and lack authority against the
Union leadership. Certainly, all these serious questions and charges made by petitioners could have
been threshed out and verified, if the formal conference had been held with the presence of union
counsel.

The transcript of the conference is deficient and does not reflect the actual discussions and
proceedings. This is to be deplored, for in a matter of such great importance, especially where the
union officials were unassisted by counsel in an unscheduled conference, care should be taken by
the trial judge that the proceedings are faithfully recorded.

We find the forcing through of the settlement arbitrary, unfair and unconscionable.

Another reason for striking down the settlement is the lack of any express or specific authority of
the president and majority of the union board of directors to execute the same and scale down the
estimated judgment liability of respondent firm in favor of the individual union members. On the
contrary, petitioner board member Magalpo timely challenged the authority or the union board to
execute any such settlement, expressly informing the trial judge that the union had specifically
appointed an entity in Manila, the “CREAM, Inc.,” as its attorney in-fact and “exclusive authorized
representative for the evaluation, adjustment and -liquidation or its claim against respondent.
These union members have repudiated the former union president, Maylem and his board of
directors, for having betrayed the union members, and the new union leadership.

The authority of the union, to execute a settlement of the judgment award in favor of the individual
union members, cannot be presumed but must be expressly granted.

Just as this Court has stricken down unjust exploitation of laborers by oppressive employers, so
will it strike down their unfair treatment by their own unworthy leaders. The Constitution enjoins
the State to afford protection to labor. Fair dealing is equally demanded of unions as well as of
employers in their dealings with employees. The union has been evolved as an organization of
collective strength for the protection of labor against the unjust exactions of capital, but equally
important is the requirement of fair dealing between the union and its members, which is fiduciary
in nature, and arises out of two factors: “one is the degree of dependence of the individual
employee on the union organization; the other, a corollary of the first, is the comprehensive power
vested in the union with respect to the individual.” The union may, be considered but the agent of
its members for the purpose of securing for them fair and just wages and good working conditions
and is subject to the obligation of giving the members as its principals all information relevant to
union and labor matters entrusted to it.

The union leadership in this case was recreant in its duty towards the union members in apparently
having failed to disclose to the union members the full situation of their judgment credit against
respondent, to wit, that they were in the advantageous position of being able to require enforcement
of the respondent court’s deposit order, and in presuming that it had authority to waive and
quitclaim the estimated judgment credit of the union members for the unconscionable amount of
P110,000.00, which had already been previously rejected by the workers. Respondent firm could
not claim that it dealt in good faith with the union officials, for it hastily executed the purported
settlement notwithstanding the serious charges of bad faith against the union leadership, and the
non-holding of the scheduled conference where the union leaders, at their express request, could
be duly assisted by union counsel.

The interests of the individual worker can be better protected on the whole by a strong union aware
of its moral and legal obligations to represent the rank and file faithfully and secure for them the
best wages and working terms and conditions in the process of collective bargaining. As has been
aptly pointed out, the will of the majority must prevail over that of the minority in the process, for
“under the philosophy of collective responsibility, an employer who bargains in good faith should
be entitled to rely upon the promises and agreements of the union representatives with whom he
must deal. under the compulsion of, law and contract. The ‘collective bargaining process should
be carried on between parties who can mutually respect and rely upon the authority of each other.”
Where, however, collective bargaining process is not involved, and what is at stake are back wages
already earned by the individual workers by way of overtime, premium and differential pay, and
final judgment has been rendered in their favor, as in the present case, the real parties in interest
with direct material interest, as against the union which has only served as a vehicle for collective
action to enforce their just claims, are the individual workers themselves. Authority of the union
to waive or quitclaim all or part of the judgment award in favor of the individual workers cannot
be lightly presumed but must be expressly granted, and the employer, as judgment debtor, must
deal in all good faith with the union as the agent of the individual workers. The Court in turn should
certainly verify and assure itself of the fact and extent of the authority of the union leadership to
execute any compromise or settlement of the judgment on behalf of the individual workers who
are the real judgment creditors.

The settlement in the case at bar was precipitately approved without verification of the union
boards authority to execute the compromise settlement and that there was no such authority.

WHEREFORE, the respondent Court’s Orders are hereby declared null and void and set aside.

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