Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. Nos. L-28791-93 August 27, 1973 VALENTIN GUIJARNO, HERMINIGILDO DE JUAN, NICOLAS CASUMPANG, ELEUTERIO BOBLO, BENITO GUAVEZ, ARSENIO JEMENA, DIMAS BOCBOCILA, NICOLAS ALAMON, ISMAEL BILLONES, RAYMUNDO ALAMON, SANTIAGO BAES, SOFRONIO CONCLARA, ADRIANO BIAS, AURELIO ALAMON, SIMEON BERNIL, RESURRECION DIAZ, FELICIANO BELGIRA, FEDERICO BOSQUE, and AGOSTO PULMONES,petitioners, vs. COURT OF INDUSTRIAL RELATIONS, CENTRAL SANTOS LOPEZ CO., INC. and UNITED SUGAR WORKERS UNION-ILO respondents. Pedrito A. Gianzon for petitioners. Luis H. Garganera for private respondents.

FERNANDO, J.: The failure of respondent Court of Industrial Relations to order the reinstatement of petitioners to their employment gave rise to this appeal by way of certiorari. The need for resort to this Court could have been obviated had there been no such marked inattention to the authoritative principle that a closed-shop provision of a collective bargaining contract is not to be applied retroactively for, at the time the decision was rendered on November 2, 1967 and its affirmance by a resolution of respondent Court en banc on January 22, 1968, such a doctrine was controlling and did call for application. So it was indicated in the leading case of Confederated Sons of Labor v. Anakan Lumber and Co., 1 a 1960 decision. As a matter of law then, the stand of petitioners is well-nigh impregnable. It would follow that their appeal must be sustained and respondent Court must be reversed. 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, 2 six of them in the second, 3 and five, in the third. 4 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. So it was noted in the decision of the then associate Judge Joaquin M. Salvador of respondent Court. Thus: "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 USWUILO 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." 5 There was no question, however, as to petitioners having been employed by such respondent Company long before the collective bargaining contract, the first instance noted being that of Resurrecion Diaz, who was in the service as far back as 1928; 6 Santiago Baez, as far back as 1929; 7 Dimas Bocbocila, as far back as 1933; 8 Simeon Bernil, as far back as 1935; 9 Aurelio Alamon, as far back as 1936; 10 Valentin Guijarno, as far back as 1937; 11 Benito Guavez, as far back as 1938; 12 Raymundo Alamon, as far back as 1939; 13 Eleuterio Boblo, Nicolas Alamon, Sofronio Conclara, Adriano Bias and Federico Bosque, as far back as 1947; 14 Herminigildo de Juan and Nicolas Casumpang, as far back as 1948; 15 Agosto Pulmones, as far back as 1949; 16 and Feliciano Belgira, as far back as 1954. 17 In the decision of respondent Court, there was an acknowledgment of the prior existence of such employment relationship. Nonetheless, the conclusion reached, both by the trial judge and then by respondent Court en bancwas that the dismissal was justifiable under the closed-shop provision of the collective bargaining agreement. Hence, this petition for review, which, as noted at the outset, is impressed with merit. 1. 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, is traceable, as set forth in the opening paragraph of this opinion, to the leading case of Confederated Sons of Labor v. Anakan Lumber Co. 18 decided in April of 1960. In discussing the particular stipulation in the contract, it was made clear in the opinion of the then Justice, later Chief Justice, Concepcion: "In order that an employer may be deemed bound, under a collective bargaining agreement, to dismiss employees for non-union membership, the stipulation to this effect must be so clear and unequivocal as to leave no room for doubt thereon. An undertaking of this nature is so harsh that it must be strictly construed, and doubts must be resolved against the existence of "closed shop"." 19Less than a year later, to be more precise, on January 28, 1961, in Freeman Shirt Manufacturing Co., Inc. v. Court of Industrial Relations, 20 this Court, speaking through Justice Gutierrez David, went further. Thus: "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])." 21 Thereafter, in Kapisanan Ng Mga Mangagagawa Ng Alak v. Hamilton Distillery Company, 22 this Court, again speaking through the former, minced no words in characterizing a stipulation that would allow a dismissal of those already employed as "null and void."23 In 1967, this time already elevated to his position as head of the Court, Chief Justice Concepcion in Salunga v. Court of Industrial Relations 24 did stress that while "generally, a state may not compel ordinary voluntary associations to admit thereto any given individual, because membership therein may be accorded or withheld as a matter of privilege, the rule is qualified in respect of labor unions holding a monopoly in the supply of labor, either in a given locality, or as regards a particular employer with which it has a closed-shop agreement. ... ." 25 He continued: "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 therefor. 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. Surely, he may, at least, invoke the rights of those who seek admission for the first time, and can not arbitrarily be denied re-admission." 26 Nothing can be clearer therefore than that this Court looks with disfavor on a provision of this character being utilized as an excuse for the termination of employment. To complete the picture, mention should be made ofElegance, Inc. v. Court of Industrial Relations, 27 where this Court, through the present Acting Chief Justice Makalintal, harked back to Freeman Shirt Manufacturing Co., Inc. v. Court of Industrial Relations 28 to stress the point of non-retroactivity. What should be immediately apparent, but unfortunately respondent Court seemed to have closed its eyes to it, is that when the decision was rendered by the trial judge on November 2, 1967 and affirmed with the Court sitting en banc on January 22, 1968, the controlling doctrine to which deference ought to have been paid was that petitioners should not have been dismissed. 2. Nor is there anything unusual in this Court's adherence with remarkable consistency to such a basic doctrine. The obligation was categorically imposed on the State, under the 1935 Constitution, to "afford protection to labor, especially to working women and minors ... ." 29 That is to carry out the purpose implicit in one of the five declared principles, namely, the promotion of social justice "to insure the well-being and economic security of all the people ... ." 30 It is then the individual employee, as a separate, finite human being, with his problems and his needs, who must be attended to. He is the beneficiary of the concern thus made manifest by the fundamental law. The present Constitution is even more explicit on the matter. The principle that the State shall promote social justice is categorically based on the concept of insuring "the dignity, welfare, and security of all the people." 31 Insofar as the provision on the State affording protection to labor is concerned, it is further required to "promote full employment and equality in employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work." 32 Where does that leave a labor union, it may be asked. 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 well-being. That is the philosophy underlying the Industrial Peace Act. 33 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 closedshop has been allowed. 34 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. Respondent Court, it would appear, was not sufficiently alert to such a danger. What is worse, it paid no heed to the controlling doctrine which is merely a recognition of a basic fact in life, namely, that power in a collectivity could be the means of crushing opposition and stifling the voices of those who are in dissent. The right to join others of like persuasion is indeed valuable. An individual by himself may feel inadequate to meet the exigencies of life or even to express his personality without the right to association being vitalized. It could happen though that whatever group may be in control of the organization may simply ignore his most-cherished desires and treat him as if he counts for naught. The antagonism between him and the group becomes marked. Dissatisfaction if given expression may be labeled disloyalty. In the labor field, the union under such circumstances may no longer be a haven of refuge, but indeed as much of a potential foe as management itself. Precisely with the Anakan doctrine, such an undesirable eventuality has been sought to be minimized, if not entirely avoided. There is no justification then, both as a matter of precedent and as a matter of principle, for the decision reached by respondent Court.

3. Now as to the remedy to which petitioners are entitled. Clearly, they should be reinstated with back pay. InSalunga v. Court of Industrial Relations, 35 reinstatement was ordered but it was the labor union that was held liable for the back wages. That is a rule dictated by fairness because management, in this case respondent Central Santos Lopez Company, Inc., would not have taken the action it did had it not been for the insistence of the labor union seeking to give effect to its interpretation of a closed-shop provision. As we decided then, so do we now. These words of the Chief Justice in Salunga carry persuasion: "Just the same, having been denied re-admission into the Union and having been dismissed from the service owing to an unfair labor practice on the part of the Union, petitioner is entitled to reinstatement as member of the Union and to his former or substantially equivalent position in the Company, without prejudice to his seniority and/or rights and privileges, and with back pay, which back pay shall be borne exclusively by the Union. In the exercise of its sound judgment and discretion, the lower court may, however, take such measures as it may deem best, including the power to authorize the Company to make deductions, for petitioner's benefit, from the sums due to the Union, by way of check off or otherwise, with a view to executing this decision, and, at the same time effectuating the purposes of the Industrial Peace Act." 36 WHEREFORE, the decision of respondent Court of November 2, 1967 and the resolution of respondent Court en banc sustaining the same of January 2, 1968 are hereby reversed. Respondent Central Lopez Co., Inc. is hereby ordered to reinstate petitioners to the positions they occupied prior to their illegal dismissal, with back wages to be paid by respondent United Sugar Workers UnionILO, deducting therefrom whatever wages they may have earned in the meanwhile. With costs against private respondents. Makalintal, Actg. C.J., Castro, Teehankee, Makasiar, Antonio and Esguerra, JJ., concur. Barredo, J., took no part. Zaldivar, J., is on leave.

Footnotes 1 107 Phil. 915. 2 The eight complainants in Case No. 81-ULP-Iloilo now L-28791, are the following: Valentin Guijarno, Herminigildo de Juan, Nicolas Casumpang, Eleuterio Boblo, Benito Guavez, Arsenio Jemena, Dimas Bocbocila and Nicolas Alamon. 3 The six complainants in Case No. 88-ULP-Iloilo, now L-28792, are the following: Ismael Billones, Raymundo Alamon, Santiago Baes, Sofronio Conclara, Adriano Bias and Aurelio Alamon. 4 The five complainants in Case No. 89-ULP-Iloilo, now L-28793, are the following: Simeon Bernil, Resurrecion Diaz, Feliciano Belgira, Federico Bosque and Agosto Pulmones. 5 Decision, Annex A of Petition, 34. 6 Ibid, 27.

7 Ibid, 19. 8 Ibid, 11. 9 Ibid, 20. 10 Ibid, 18. 11 Ibid, 5. 12 Ibid, 6. 13 Ibid, 15. 14 Ibid, 8, 12, 13, 17 and 24. 15 Ibid, 4 and 12. 16 Ibid, 25. 17 Ibid, 23. Petitioner Arsenio Jemena did not specify his date of employment, and petitioner Ismael Billones was not presented as a witness, but it would appear that no question as to their having been in the employment at the time of the collective bargaining contract could seriously be raised. 18 107 Phil. 915. 19 Ibid, 919. 20 L-16561, January 28, 1961, 1 SCRA 353. 21 Ibid, 356. 22 L-18112, October 30, 1962, 6 SCRA 367. 23 Ibid, 372. Cf. Findlay Millar Timber Co. v. Phil. Land-Air-Sea Labor Union, L18217 and L-18222, September 29, 1962, 6 SCRA 227; United States Lines Co. v. Associated Watchmen & Security Union, L-15508, June 29, 1963, 8 SCRA 326; National Brewery & Allied Industries Labor Union of the Phil. v. San Miguel Brewery, Inc., L-18170, August 31, 1963, 8 SCRA 805; Phil. Steam Navigation Co. v. Phil. Marine Officers Guild, L-20667 and L-20669, October 29, 1965, 15 SCRA 174; Rizal Labor Union v. Rizal Cement Co., Inc., L-19779, July 30, 1966, 17 SCRA 858. 24 L-22456, September 27, 1967, 21 SCRA 216. 25 Ibid, 222-223. 26 Ibid, 223. Cf. Seno v. Mendoza, L-20565, November 29, 1967, 21 SCRA 1124. 27 L-24096, April 20, 1971, 38 SCRA 382.

28 L-16561, January 28, 1961, 1 SCRA 353. 29 Art. XIV, Sec. 6. 30 Art. II, Sec. 5 of the 1935 Constitution. 31 Art. II, Sec. 6 of the revised Charter reads in full: "The State shall promote social justice to ensure the dignity, welfare, and security of all the people. Towards this end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitably diffuse property ownership and profits." 32 Art. II, Sec. 9 of the revised Constitution. 33 Republic Act No. 875 (1953). 34 A proviso in Sec. 4, par. (a)(4) reads as follows: "That nothing in this Act or in any other Act or statute of the Republic of the Philippines shall preclude an employer from making an agreement with a labor organization to require as a condition of employment membership therein, if such labor organization is the representative of the employees as provided in Section twelve, but such agreement shall not cover members of any religious sects which prohibit affiliation of their members in any such labor organization." As amended by Republic Act No. 3350 (1961). 35 L-22456, September 27, 1967, 21 SCRA 216. 36 Ibid, 225.
The Lawphil Project - Arellano Law Foundation

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 172699 July 27, 2011

ELECTROMAT MANUFACTURING and RECORDING CORPORATION, Petitioner, vs. HON. CIRIACO LAGUNZAD, in his capacity as Regional Director, National Capital Region, Department of Labor and Employment; and HON. HANS LEO J. CACDAC, in his capacity as Director of Bureau of Labor Relations, Department of Labor and Employment, Public Respondents. NAGKAKAISANG SAMAHAN NG MANGGAGAWA NG ELECTROMAT-WASTO, Private Respondent. DECISION BRION, J.:

We resolve the present petition for review on certiorari1 assailing the decision2 and the resolution3 of the Court of Appeals (CA) dated February 3, 2006 and May 11, 2006, respectively, rendered in CA G.R. SP No. 83847. The Antecedents The private respondent Nagkakaisang Samahan ng Manggagawa ng Electromat-Wasto (union), a charter affiliate of the Workers Advocates for Struggle, Transformation and Organization (WASTO), applied for registration with the Bureau of Labor Relations (BLR). Supporting the application were the following documents: (1) copies of its ratified constitution and by-laws (CBL); (2) minutes of the CBLs adoption and ratification; (3) minutes of the organizational meetings; (4) names and addresses of the union officers; (5) list of union members; (6) list of rank-and-file employees in the company; (7) certification of non-existence of a collective bargaining agreement (CBA) in the company; (8) resolution of affiliation with WASTO, a labor federation; (9) WASTOs resolution of acceptance; (10) Charter Certificate; and (11) Verification under oath. The BLR thereafter issued the union a Certification of Creation of Local Chapter (equivalent to the certificate of registration of an independent union), pursuant to Department Order No. (D.O.) 40-03.4 On October 1, 2003, the petitioner Electromat Manufacturing and Recording Corporation (company) filed a petition for cancellation of the unions registration certificate, for the unions failure to comply with Article 234 of the Labor Code. It argued that D.O. 40-03 is an unconstitutional diminution of the Labor Codes union registration requirements under Article 234. On November 27, 2003, Acting Director Ciriaco A. Lagunzad of the Department of Labor and Employment (DOLE)-National Capital Region dismissed the petition.5 In the appeal by the company, BLR Director Hans Leo J. Cacdac affirmed the dismissal.6 The company thereafter sought relief from the CA through a petition for certiorari, contending that the BLR committed grave abuse of discretion in affirming the unions registration despite its noncompliance with the requirements for registration under Article 234 of the Labor Code. It assailed the validity of D.O. 40-03 which amended the rules of Book V (Labor Relations) of the Labor Code. It posited that the BLR should have strictly adhered to the union registration requirements under the Labor Code, instead of relying on D.O. 40-03 which it considered as an invalid amendment of the law since it reduced the requirements under Article 234 of the Labor Code. It maintained that the BLR should not have granted the unions registration through the issuance of a Certification of Creation of Local Chapter since the union submitted only the Charter Certificate issued to it by WASTO. The CA Decision In its decision rendered on February 3, 2006,7 the CA Tenth Division dismissed the petition and affirmed the assailed BLR ruling. It brushed aside the companys objection to D.O. 40-03, and its submission that D.O. 40-03 removed the safety measures against the commission of fraud in the registration of unions. It noted that "there are sufficient safeguards found in other provisions of the Labor Code to prevent the same."8 In any event, it pointed out that D.O. 40-03 was issued by the DOLE pursuant to its rule-making power under the law.9 The company moved for reconsideration, arguing that the unions registration certificate was invalid as there was no showing that WASTO, the labor federation to which the union is affiliated, had at least ten (10) locals or chapters as required by D.O. 40-03. The CA denied the motion,10 holding that no such requirement is found under the rules. Hence, the present petition.

The Case for the Petitioner The company seeks a reversal of the CA rulings, through its submissions (the petition11 and the memorandum12), on the ground that the CA seriously erred and gravely abused its discretion in affirming the registration of the union in accordance with D.O. 40-03. Specifically, it assails as unconstitutional Section 2(E), Rule III of D.O. 40-03 which provides: The report of creation of a chartered local shall be accompanied by a charter certificate issued by the federation or national union indicating the creation or establishment of the chartered local. The company points out that D.O. 40-03 delisted some of the requirements under Article 234 of the Labor Code for the registration of a local chapter. Article 234 states: ART. 234. Requirements of Registration.13 Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements: (a) Fifty pesos (P50.00) registration fee; (b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings; (c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate; (d) If the applicant union has been in existence for one or more years, copies of its annual financial reports; and (e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it. The company contends that the enumeration of the requirements for union registration under the law is exclusive and should not be diminished, and that the same requirements should apply to all labor unions whether they be independent labor organizations, federations or local chapters. It adds that in making a different rule for local chapters, D.O. 40-03 expanded or amended Article 234 of the Labor Code, resulting in an invalid exercise by the DOLE of its delegated rule-making power. It thus posits that the unions certificate of registration which was issued "in violation of the letters of Article 234 of the Labor Code"14 is void and of no effect, and that the CA committed grave abuse of discretion when it affirmed the unions existence. The Case for the Union In a Resolution dated January 16, 2008,15 the Court directed union board member Alex Espejo, in lieu of union President Roberto Beltran whose present address could not be verified, to furnish the Court a copy of the union comment/opposition to the companys motion for reconsideration dated February 22, 2006 in CA G.R. SP No. 83847, which the union adopted as its comment on the present petition.16

Through this comment/opposition,17 the union submits that the company failed to show that the CA committed reversible error in upholding the registration certificate issued to it by the BLR. Citing Castillo v. National Labor Relations Commission,18 it stressed that the issuance of the certificate by the DOLE agencies was supported by substantial evidence, which should be entitled to great respect and even finality. The Courts Ruling We resolve the core issue of whether D.O. 40-03 is a valid exercise of the rule-making power of the DOLE. We rule in the affirmative. Earlier in Progressive Development Corporation v. Secretary, Department of Labor and Employment,19 the Court encountered a similar question on the validity of the old Section 3, Rule II, Book V of the Rules Implementing the Labor Code20 which stated: Union affiliation; direct membership with a national union. - The affiliate of a labor federation or national union may be a local or chapter thereof or an independently registered union. a) The labor federation or national union concerned shall issue a charter certificate indicating the creation or establishment of a local or chapter, copy of which shall be submitted to the Bureau of Labor Relations within thirty (30) days from issuance of such charter certificate. xxxx e) The local or 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. Interpreting these provisions of the old rules, the Court said that by force of law,21 the local or chapter of a labor federation or national union becomes a legitimate labor organization upon compliance with Section 3, Rule II, Book V of the Rules Implementing the Labor Code, the only requirement being the submission of the charter certificate to the BLR. Further, the Court noted that Section 3 omitted several requirements which are otherwise required for union registration, as follows: 1) The requirement that the application for registration must be signed by at least 20% of the employees in the appropriate bargaining unit; 2) The submission of officers addresses, principal address of the labor organization, the minutes of organization meetings and the list of the workers who participated in such meetings; 3) The submission of the minutes of the adoption or ratification of the constitution and bylaws and the list of the members who participated in it.22 Notwithstanding these omissions, the Court upheld the governments implementing policy expressed in the old rules when it declared in Progressive Development Undoubtedly, the intent of the law in imposing lesser requirements in the case of a branch or local of a registered federation or national union is to encourage the affiliation of a local union with a federation or national union in order to increase the local unions bargaining powers respecting terms and conditions of labor.23

It was this same Section 3 of the old rules that D.O. 40-03 fine-tuned when the DOLE amended the rules on Book V of the Labor Code, thereby modifying the governments implementing policy on the registration of locals or chapters of labor federations or national unions. The company now assails this particular amendment as an invalid exercise of the DOLEs rule-making power. We disagree. As in the case of D.O. 9 (which introduced the above-cited Section 3 of the old rules) in Progressive Development, D.O. 40-03 represents an expression of the governments implementing policy on trade unionism. It builds upon the old rules by further simplifying the requirements for the establishment of locals or chapters. As in D.O. 9, we see nothing contrary to the law or the Constitution in the adoption by the Secretary of Labor and Employment of D.O. 40-03 as this department order is consistent with the intent of the government to encourage the affiliation of a local union with a federation or national union to enhance the locals bargaining power. If changes were made at all, these were those made to recognize the distinctions made in the law itself between federations and their local chapters, and independent unions; local chapters seemingly have lesser requirements because they and their members are deemed to be direct members of the federation to which they are affiliated, which federations are the ones subject to the strict registration requirements of the law.
1avv phi1

In any case, the local union in the present case has more than satisfied the requirements the petitioner complains about; specifically, the union has submitted: (1) copies of the ratified CBL; (2) the minutes of the CBLs adoption and ratification; (3) the minutes of the organizational meetings; (4) the names and addresses of the union officers; (5) the list of union members; (6) the list of rank-andfile employees in the company; (7) a certification of non-existence of a CBA in the company; (8) the resolution of affiliation with WASTO and the latters acceptance; and (9) their Charter Certificate. These submissions were properly verified as required by the rules. In sum, the petitioner has no factual basis for questioning the unions registration, as even the requirements for registration as an independent local have been substantially complied with. We, thus, find no compelling justification to nullify D.O. 40-03. Significantly, the Court declared in another case:24 Pagpalain cannot also allege that Department Order No. 9 is violative of public policy. x x x [T]he sole function of our courts is to apply or interpret the laws. It does not formulate public policy, which is the province of the legislative and executive branches of government. It cannot, thus, be said that the principles laid down by the Court in Progressive and Protection Technology constitute public policy on the matter. They do, however, constitute the Courts interpretation of public policy, as formulated by the executive department through its promulgation of rules implementing the Labor Code. However, this public policy has itself been changed by the executive department, through the amendments introduced in Book V of the Omnibus Rules by Department Order No. 9. It is not for us to question this change in policy, it being a well-established principle beyond question that it is not within the province of the courts to pass judgments upon the policy of legislative or executive action. This statement is as true then as it is now. In light of the foregoing, we find no merit in the appeal. WHEREFORE, premises considered, we DENY the petition for lack of merit. The assailed decision and resolution of the Court of Appeals are AFFIRMED. Costs against the petitioner Electromat Manufacturing and Recording Corporation. SO ORDERED.

ARTURO D. BRION Associate Justice WE CONCUR: ANTONIO T. CARPIO Associate Justice Chairperson TERESITA J. LEONARDO-DE CASTRO* Associate Justice DIOSDADO M. PERALTA** Associate Justice

JOSE PORTUGAL PEREZ Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. ANTONIO T. CARPIO Associate Justice Chairperson, Second Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. RENATO C. CORONA Chief Justice

Footnotes
*

Designated as Acting Member of the Second Division per Special Order No. 1006 dated June 10, 2011.
**

Designated as Acting Member in lieu of Associate Justice Maria Lourdes P. A. Sereno per Special Order No. 1040 dated July 6, 2011.
1

Rollo, pp. 22-59; filed pursuant to Rule 45 of the Rules of Court.

Id. at 12-19; penned by Associate Justice Rosmari D. Carandang, and concurred in by Associate Justices Andres B. Reyes, Jr. and Monina Arevalo-Zearosa.
3

Id. at 9-10.

Series of 2003, Amending the Implementing Rules of Book V of the Labor Code. Rollo, p. 142. Id. at 175-180; Decision dated March 8, 2004. Supra note 2. Id. at 17, last paragraph. LABOR CODE, Article 5. Supra note 3. Supra note 1. Rollo, pp. 336-364. Before its amendment by Republic Act No. 9481 which lapsed into law on May 25, 2007. Rollo, p. 348; Memorandum, p. 13, par. 2. Id. at 279. Id. at 281-A; Resolution dated August 4, 2008. Id. at 285-286. 367 Phil. 605 (1999). G.R. No. 96425, February 4, 1992, 205 SCRA 802. As amended by D.O. 9, Series of 1997. LABOR CODE, Article 212(h); definition of "legitimate labor organization."

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11

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18

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20

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22

Progressive Development Corporation v. Secretary, Department of Labor and Employment, supra note 19, at 811.
23

Ibid. Pagpalain Haulers, Inc. v. Trajano, 369 Phil. 617, 628 (1999).

24

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Republic of the Philippines SUPREME COURT Manila

THIRD DIVISION G.R. No. 183317 December 21, 2009

MARIWASA SIAM CERAMICS, INC., Petitioner, vs. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, CHIEF OF THE BUREAU OF LABOR RELATIONS, DEPARTMENT OF LABOR AND EMPLOYMENT, REGIONAL DIRECTOR OF DOLE REGIONAL OFFICE NUMBER IV-A & SAMAHAN NG MGA MANGGAGAWA SA MARIWASA SIAM CERAMICS, INC. (SMMSCINDEPENDENT), Respondents. DECISION NACHURA, J.: This is a petition for review on certiorari1 under Rule 45 of the Rules of Court, seeking to annul the Decision2dated December 20, 2007 and the Resolution3 dated June 6, 2008 of the Court of Appeals in CA-G.R. SP No. 98332. The antecedent facts are as follows On May 4, 2005, respondent Samahan Ng Mga Manggagawa Sa Mariwasa Siam Ceramics, Inc. (SMMSC-Independent) was issued a Certificate of Registration4 as a legitimate labor organization by the Department of Labor and Employment (DOLE), Region IV-A. On June 14, 2005, petitioner Mariwasa Siam Ceramics, Inc. filed a Petition for Cancellation of Union Registration against respondent, claiming that the latter violated Article 2345 of the Labor Code for not complying with the 20% requirement, and that it committed massive fraud and misrepresentation in violation of Article 2396 of the same code. The case was docketed as Case No. RO400-0506-AU004. On August 26, 2005, the Regional Director of DOLE IV-A issued an Order granting the petition, revoking the registration of respondent, and delisting it from the roster of active labor unions. Aggrieved, respondent appealed to the Bureau of Labor Relations (BLR). In a Decision7 dated June 14, 2006, the BLR granted respondents appeal and disposed as follows WHEREFORE, premises considered, the appeal by Samahan ng Manggagawa sa Mariwasa Siam Ceramics, Inc. (SMMSC-Independent) is hereby GRANTED, and the Decision dated 26 August 2005 by DOLE-Region-IV-A Director Maximo B. Lim is hereby REVERSED and SET ASIDE. Samahan ng Manggagawa sa Mariwasa Siam Ceramics, Inc. (SMMSC-Independent), under Registration Certificate No. RO400-200505-UR-002, remains in the roster of legitimate labor organizations. SO DECIDED.8 Petitioner filed a Motion for Reconsideration but the BLR denied it in a Resolution9 dated February 2, 2007.

Petitioner sought recourse with the Court of Appeals (CA) through a Petition for Certiorari; but the CA denied the petition for lack of merit. Petitioners motion for reconsideration of the CA Decision was likewise denied, hence, this petition based on the following grounds Review of the Factual Findings of the Bureau of Labor Relations, adopted and confirmed by the Honorable Court of Appeals is warranted[;] The Honorable Court of Appeals seriously erred in ruling that the affidavits of recantation cannot be given credence[;] The Honorable Court of Appeals seriously erred in ruling that private respondent union complied with the 20% membership requirement[; and] The Honorable Court of Appeals seriously erred when it ruled that private respondent union did not commit misrepresentation, fraud or false statement.10 The petition should be denied. The petitioner insists that respondent failed to comply with the 20% union membership requirement for its registration as a legitimate labor organization because of the disaffiliation from the total number of union members of 102 employees who executed affidavits recanting their union membership. It is, thus, imperative that we peruse the affidavits appearing to have been executed by these affiants. The affidavits uniformly state Ako, _____________, Pilipino, may sapat na gulang, regular na empleyado bilang Rank & File sa Mariwasa Siam Ceramics, Inc., Bo. San Antonio, Sto. Tomas, Batangas, matapos na makapanumpa ng naaayon sa batas ay malaya at kusang loob na nagsasaad ng mga sumusunod: 1. Ako ay napilitan at nilinlang sa pagsapi sa Samahan ng mga Manggagawa sa Mariwasa Siam Ceramics, Inc. o SMMSC-Independent sa kabila ng aking pagaalinlangan[;] 2. Aking lubos na pinagsisihan ang aking pagpirma sa sipi ng samahan, at handa ako[ng] tumalikod sa anumang kasulatan na aking nalagdaan sa kadahilanan na hindi angkop sa aking pananaw ang mga mungkahi o adhikain ng samahan. SA KATUNAYAN NANG LAHAT, ako ay lumagda ng aking pangalan ngayong ika-____ ng ______, 2005 dito sa Lalawigan ng Batangas, Bayan ng Sto. Tomas. ____________________ Nagsasalaysay Evidently, these affidavits were written and prepared in advance, and the pro forma affidavits were ready to be filled out with the employees names and signatures.

The first common allegation in the affidavits is a declaration that, in spite of his hesitation, the affiant was forced and deceived into joining the respondent union. It is worthy to note, however, that the affidavit does not mention the identity of the people who allegedly forced and deceived the affiant into joining the union, much less the circumstances that constituted such force and deceit. Indeed, not only was this allegation couched in very general terms and sweeping in nature, but more importantly, it was not supported by any evidence whatsoever. The second allegation ostensibly bares the affiants regret for joining respondent union and expresses the desire to abandon or renege from whatever agreement he may have signed regarding his membership with respondent. Simply put, through these affidavits, it is made to appear that the affiants recanted their support of respondents application for registration. In appreciating affidavits of recantation such as these, our ruling in La Suerte Cigar and Cigarette Factory v. Director of the Bureau of Labor Relations11 is enlightening, viz. On the second issuewhether or not the withdrawal of 31 union members from NATU affected the petition for certification election insofar as the 30% requirement is concerned, We reserve the Order of the respondent Director of the Bureau of Labor Relations, it appearing undisputably that the 31 union members had withdrawn their support to the petition before the filing of said petition. It would be otherwise if the withdrawal was made after the filing of the petition for it would then be presumed that the withdrawal was not free and voluntary. The presumption would arise that the withdrawal was procured through duress, coercion or for valuable consideration. In other words, the distinction must be that withdrawals made before the filing of the petition are presumed voluntary unless there is convincing proof to the contrary, whereas withdrawals made after the filing of the petition are deemed involuntary. The reason for such distinction is that if the withdrawal or retraction is made before the filing of the petition, the names of employees supporting the petition are supposed to be held secret to the opposite party. Logically, any such withdrawal or retraction shows voluntariness in the absence of proof to the contrary. Moreover, it becomes apparent that such employees had not given consent to the filing of the petition, hence the subscription requirement has not been met. When the withdrawal or retraction is made after the petition is filed, the employees who are supporting the petition become known to the opposite party since their names are attached to the petition at the time of filing. Therefore, it would not be unexpected that the opposite party would use foul means for the subject employees to withdraw their support.12 In the instant case, the affidavits of recantation were executed after the identities of the union members became public, i.e., after the union filed a petition for certification election on May 23, 2005, since the names of the members were attached to the petition. The purported withdrawal of support for the registration of the union was made after the documents were submitted to the DOLE, Region IV-A. The logical conclusion, therefore, following jurisprudence, is that the employees were not totally free from the employers pressure, and so the voluntariness of the employees execution of the affidavits becomes suspect. It is likewise notable that the first batch of 25 pro forma affidavits shows that the affidavits were executed by the individual affiants on different dates from May 26, 2005 until June 3, 2005, but they were all sworn before a notary public on June 8, 2005.

There was also a second set of standardized affidavits executed on different dates from May 26, 2005 until July 6, 2005. While these 77 affidavits were notarized on different dates, 56 of these were notarized on June 8, 2005, the very same date when the first set of 25 was notarized. Considering that the first set of 25 affidavits was submitted to the DOLE on June 14, 2005, it is surprising why petitioner was able to submit the second set of affidavits only on July 12, 2005. Accordingly, we cannot give full credence to these affidavits, which were executed under suspicious circumstances, and which contain allegations unsupported by evidence. At best, these affidavits are self-serving. They possess no probative value. A retraction does not necessarily negate an earlier declaration. For this reason, retractions are looked upon with disfavor and do not automatically exclude the original statement or declaration based solely on the recantation. It is imperative that a determination be first made as to which between the original and the new statements should be given weight or accorded belief, applying the general rules on evidence. In this case, inasmuch as they remain bare allegations, the purported recantations should not be upheld.13 Nevertheless, even assuming the veracity of the affidavits of recantation, the legitimacy of respondent as a labor organization must be affirmed. While it is true that the withdrawal of support may be considered as a resignation from the union, the fact remains that at the time of the unions application for registration, the affiants were members of respondent and they comprised more than the required 20% membership for purposes of registration as a labor union. Article 234 of the Labor Code merely requires a 20% minimum membership during the application for union registration. It does not mandate that a union must maintain the 20% minimum membership requirement all throughout its existence.14
1avv phi 1

Respondent asserts that it had a total of 173 union members at the time it applied for registration. Two names were repeated in respondents list and had to be deducted, but the total would still be 171 union members. Further, out of the four names alleged to be no longer connected with petitioner, only two names should be deleted from the list since Diana Motilla and T.W. Amutan resigned from petitioner only on May 10, 2005 and May 17, 2005, respectively, or after respondents registration had already been granted. Thus, the total union membership at the time of registration was 169. Since the total number of rank-and-file employees at that time was 528, 169 employees would be equivalent to 32% of the total rank-and-file workers complement, still very much above the minimum required by law. For the purpose of de-certifying a union such as respondent, it must be shown that there was misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto; the minutes of ratification; or, in connection with the election of officers, the minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly elected-appointed officers and their postal addresses to the BLR.15 The bare fact that two signatures appeared twice on the list of those who participated in the organizational meeting would not, to our mind, provide a valid reason to cancel respondents certificate of registration. The cancellation of a unions registration doubtless has an impairing dimension on the right of labor to self-organization. For fraud and misrepresentation to be grounds for cancellation of union registration under the Labor Code, the nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority of union members.

In this case, we agree with the BLR and the CA that respondent could not have possibly committed misrepresentation, fraud, or false statements. The alleged failure of respondent to indicate with mathematical precision the total number of employees in the bargaining unit is of no moment, especially as it was able to comply with the 20% minimum membership requirement. Even if the total number of rank-and-file employees of petitioner is 528, while respondent declared that it should only be 455, it still cannot be denied that the latter would have more than complied with the registration requirement. WHEREFORE, the petition is DENIED. The assailed December 20, 2007 Decision and the June 6, 2008 Resolution of the Court of Appeals are AFFIRMED. Costs against petitioner. SO ORDERED. ANTONIO EDUARDO B. NACHURA Associate Justice WE CONCUR: RENATO C. CORONA Associate Justice Chairperson PRESBITERO J. VELASCO, JR. Associate Justice DIOSDADO M. PERALTA Associate Justice

MARIANO C. DEL CASTILLO* Associate Justice ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. RENATO C. CORONA Associate Justice Chairperson, Third Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. REYNATO S. PUNO Chief Justice

Footnotes

Additional member per Special Order No. 805 dated December 4, 2009. Rollo, pp. 14-34.

Penned by Associate Justice Celia C. Librea-Leagogo, with Associate Justices Regalado E. Maambong and Sixto C. Marella, Jr., concurring; id. at 354-374.
3

Id. at 388-389. Rollo, p. 110. ART. 234. REQUIREMENTS OF REGISTRATION Any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements: xxxx (c) The names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate. (Emphasis supplied.)

ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION The following shall constitute grounds for cancellation of union registration: (a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification; xxxx (c) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly-elected/appointed officers and their postal addresses within thirty (30) days from election. (Emphasis supplied.)

Rollo, pp. 70-77. Id. at 77. Id. at 67-68. Id. at 22, 26, 29, and 31. G.R. No. L-55674, July 25, 1983, 123 SCRA 679. Id. at 707-708.

10

11

12

13

Philippine Long Distance Company v. The Late Romeo F. Bolso, G.R. No. 159701, August 17, 2007, 530 SCRA 550.
14

However, this does not prevent another union within the same company from challenging the status of the union as the legitimate labor organization authorized to represent the interests of the employees with the management.
15

Air Philippines Corporation v. Bureau of Labor Relations, G.R. No. 155395, June 22, 2006, 492 SCRA 243.

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Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 157117 November 20, 2006

COASTAL SUBIC BAY TERMINAL, INC., Petitioner, vs. DEPARTMENT OF LABOR and EMPLOYMENT OFFICE OF THE SECRETARY, COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY UNION-APSOTEU, and COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP, Respondents. DECISION QUISUMBING, J.: For review on certiorari is the Court of Appeals Decision1 dated August 31, 2001, in CA-G.R. SP No. 54128 and the Resolution2 dated February 5, 2003, denying petitioners motion for reconsideration. The Court of Appeals had affirmed the Decision3 dated March 15, 1999 of the Secretary of the Department of Labor and Employment (DOLE) reversing the Mediator Arbiters dismissal of private respondents petitions for certification election. The facts are as follows: On July 8, 1998, private respondents Coastal Subic Bay Terminal, Inc. Rank-and-File Union (CSBTIRFU) and Coastal Subic Bay Terminal, Inc. Supervisory Union (CSBTI-SU) filed separate petitions for certification election before Med-Arbiter Eladio de Jesus of the Regional Office No. III. The rankand-file union insists that it is a legitimate labor organization having been issued a charter certificate by the Associated Labor Union (ALU), and the supervisory union by the Associated Professional, Supervisory, Office and Technical Employees Union (APSOTEU). Private respondents also alleged that the establishment in which they sought to operate was unorganized. Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) opposed both petitions for certification election alleging that the rank-and-file union and supervisory union were not legitimate labor organizations, and that the proposed bargaining units were not particularly described.

Without ruling on the legitimacy of the respondent unions, the Med-Arbiter dismissed, without prejudice to refiling, both petitions which had been consolidated. The Med-Arbiter held that the ALU and APSOTEU are one and the same federation having a common set of officers. Thus, the supervisory and the rank-and-file unions were in effect affiliated with only one federation.4 The Med-Arbiter ruled as follows: Viewed in the light of all the foregoing, this Office finds the simultaneous filing of the instant petitions to be invalid and unwarranted. Consequently, this Office has no recourse but to dismiss both petitions without prejudice to the refiling of either. WHEREFORE, PREMISES CONSIDERED, let the instant petitions be, as they are hereby DISMISSED. SO ORDERED.5 Both parties appealed to the Secretary of Labor and Employment, who reversed the decision of the Med-Arbiter. The Secretary thru Undersecretary R. Baldoz, ruled that CSBTI-SU and CSBTI-RFU have separate legal personalities to file their separate petitions for certification election. The Secretary held that APSOTEU is a legitimate labor organization because it was properly registered pursuant to the 1989 Revised Rules and Regulations implementing Republic Act No. 6715, the rule applicable at the time of its registration. It further ruled that ALU and APSOTEU are separate and distinct labor unions having separate certificates of registration from the DOLE. They also have different sets of locals. The Secretary declared CSBTI-RFU and CSBTI-SU as legitimate labor organizations having been chartered respectively by ALU and APSOTEU after submitting all the requirements with the Bureau of Labor Relations (BLR). Accordingly, the Secretary ordered the holding of separate certification election, viz: WHEREFORE, the decision of the Med-Arbiter, Regional Office No. III is hereby REVERSED. Let separate certification elections be conducted immediately among the appropriate employees of CSBTI, after the usual pre-election conference, with the following choices: I. For all rank and file employees of CSBTI: 1. COASTAL SUBIC BAY TERMINAL, INC. RANK-AND-FILE UNION-ALU-TUCP; and 2. NO UNION. II. For all supervisory employees of CSBTI: 1. COASTAL SUBIC BAY TERMINAL, INC. SUPERVISORY EMPLOYEES UNIONAPSOTEU; and 2. NO UNION. The latest payroll of the employer, including its payrolls for the last three months immediately preceding the issuance of this decision, shall be the basis for determining the qualified list of voters. SO DECIDED.6

The motion for reconsideration was also denied.7 On appeal, the Court of Appeals affirmed the decision of the Secretary.8 It held that there was no grave abuse of discretion on the part of the Secretary; its findings are supported by evidence on record; and thus should be accorded with respect and finality.9 The motion for reconsideration was likewise denied.10 Hence, the instant petition by the company anchored on the following grounds: I THE HONORABLE COURT OF APPEALS ERRED IN RELYING ON THE "1989 REVISED RULES AND REGULATIONS IMPLEMENTING RA 6715" AS BASIS TO RECOGNIZE PRIVATE RESPONDENT APSOTEUS REGISTRATION BY THE DOLE REGIONAL DIRECTOR. II THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED PUBLIC RESPONDENTS APPLICATION OF THE PRINCIPLE OF STARE DECISIS TO HASTILY DISPOSE OF THE LEGAL PERSONALITY ISSUE OF APSOTEU. III THE HONORABLE COURT OF APPEALS DID NOT DECIDE IN ACCORD WITH LAW AND JURISPRUDENCE WHEN IT AFFIRMED PUBLIC RESPONDENTS APPLICATION OF THE "UNION AUTONOMY" THEORY. IV IN AFFIRMING PUBLIC RESPONDENTS FINDING THAT PRIVATE RESPONDENTS ARE "SEPARATE FEDERATIONS," THE HONORABLE COURT OF APPEALS: (1) IGNORED JURISPRUDENCE RECOGNIZING THE BINDING NATURE OF A MED-ARBITERS FACTUAL FINDINGS; AND (2) DISREGARDED EVIDENCE ON RECORD OF "ILLEGAL COMMINGLING."11 Plainly, the issues are (1) Can the supervisory and the rank-and-file unions file separate petitions for certification election?; (2) Was the Secretarys decision based on stare decisis correct?; and (3) Were private respondents engaged in commingling? The issue on the status of the supervisory union CSBTI-SU depends on the status of APSOTEU, its mother federation. Petitioner argues that APSOTEU improperly secured its registration from the DOLE Regional Director and not from the BLR; that it is the BLR that is authorized to process applications and issue certificates of registration in accordance with our ruling in Phil. Association of Free Labor Unions v. Secretary of Labor;12 that the certificates of registration issued by the DOLE Regional Director pursuant to the rules are questionable, and possibly even void ab initio for being ultra vires; and that

the Court of Appeals erred when it ruled that the law applicable at the time of APSOTEUs registration was the 1989 Revised Implementing Rules and Regulations of Rep. Act No. 6715. Petitioner insists that APSOTEU lacks legal personality, and its chartered affiliate CSBTI-SU cannot attain the status of a legitimate labor organization to file a petition for certification election. It relies on Villar v. Inciong,13where we held therein that Amigo Employees Union was not a duly registered independent union absent any record of its registration with the Bureau. Pertinent is Article 23514 of the Labor Code which provides that applications for registration shall be acted upon by the Bureau. "Bureau" as defined under the Labor Code means the BLR and/or the Labor Relations Division in the Regional Offices of the Department of Labor.15 Further, Section 2, Rule II, Book V of the 1989 Revised Implementing Rules of the Labor Code (Implementing Rules) provides that: Section 2. Where to file application; procedure Any national labor organization or labor federation or local union may file an application for registration with the Bureau or the Regional Office where the applicants principal offices is located. The Bureau or the Regional Office shall immediately process and approve or deny the application. In case of approval, the Bureau or the Regional Office shall issue the registration certificate within thirty (30) calendar days from receipt of the application, together with all the requirements for registration as hereinafter provided. 16 The Implementing Rules specifically Section 1, Rule III of Book V, as amended by Department Order No. 9, thus: SECTION 1. Where to file applications. The application for registration of any federation, national or industry union or trade union center shall be filed with the Bureau. Where the application is filed with the Regional Office, the same shall be immediately forwarded to the Bureau within fortyeight (48) hours from filing thereof, together with all the documents supporting the registration. The applications for registration of an independent union shall be filed with and acted upon by the Regional Office where the applicants principal office is located . xxxx The DOLE issued Department Order No. 40-03, which took effect on March 15, 2003, further amending Book V of the above implementing rules. The new implementing rules explicitly provide that applications for registration of labor organizations shall be filed either with the Regional Office or with the BLR.17 Even after the amendments, the rules did not divest the Regional Office and the BLR of their jurisdiction over applications for registration by labor organizations. The amendments to the implementing rules merely specified that when the application was filed with the Regional Office, the application would be acted upon by the BLR. The records in this case showed that APSOTEU was registered on March 1, 1991. Accordingly, the law applicable at that time was Section 2, Rule II, Book V of the Implementing Rules, and not Department Order No. 9 which took effect only on June 21, 1997. Thus, considering further that APSOTEUs principal office is located in Diliman, Quezon City, and its registration was filed with the NCR Regional Office, the certificate of registration is valid.

The petitioner misapplied Villar v. Inciong.18 In said case, there was no record in the BLR that Amigo Employees Union was registered.19 Did the Court of Appeals err in its application of stare decisis when it upheld the Secretarys ruling that APSOTEU is a legitimate labor organization and its personality cannot be assailed unless in an independent action for cancellation of registration certificate?20 We think not. Section 5, Rule V, Book V of the Implementing Rules states: Section 5. Effect of registration The labor organization or workers association shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Such legal personality cannot thereafter be subject to collateral attack, but maybe questioned only in an independent petition for cancellation in accordance with these Rules.21 Thus, APSOTEU is a legitimate labor organization and has authority to issue charter to its affiliates.22 It may issue a local charter certificate to CSBTI-SU and correspondingly, CSBTI-SU is legitimate. Are ALU, a rank-and-file union and APSOTEU, a supervisory union one and the same because of the commonalities between them? Are they commingled? The petitioner contends that applying by analogy, the doctrine of piercing the veil of corporate fiction, APSOTEU and ALU are the same federation. Private respondents disagree. First, as earlier discoursed, once a labor union attains the status of a legitimate labor organization, it continues as such until its certificate of registration is cancelled or revoked in an independent action for cancellation.23 In addition, the legal personality of a labor organization cannot be collaterally attacked.24 Thus, when the personality of the labor organization is questioned in the same manner the veil of corporate fiction is pierced, the action partakes the nature of a collateral attack. Hence, in the absence of any independent action for cancellation of registration against either APSOTEU or ALU, and unless and until their registrations are cancelled, each continues to possess a separate legal personality. The CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct and separate federations, despite the commonalities of APSOTEU and ALU. Under the rules implementing the Labor Code, a chartered local union acquires legal personality through the charter certificate issued by a duly registered federation or national union, and reported to the Regional Office in accordance with the rules implementing the Labor Code.25 A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members. Mere affiliation does not divest the local union of its own personality, neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of agency, where the former acts in representation of the latter.26 Hence, local unions are considered principals while the federation is deemed to be merely their agent.27 As such principals, the unions are entitled to exercise the rights and privileges of a legitimate labor organization, including the right to seek certification as the sole and exclusive bargaining agent in the appropriate employer unit.
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A word of caution though, under Article 245 of the Labor Code,28 supervisory employees are not eligible for membership in a labor union of rank-and-file employees. The supervisory employees are allowed to form their own union but they are not allowed to join the rank-and-file union because of potential conflicts of interest.29 Further, to avoid a situation where supervisors would merge with the

rank-and-file or where the supervisors labor union would represent conflicting interests, a local supervisors union should not be allowed to affiliate with the national federation of unions of rank and-file employees where that federation actively participates in the union activity within the company.30 Thus, the limitation is not confined to a case of supervisors wanting to join a rank-and-file union. The prohibition extends to a supervisors local union applying for membership in a national federation the members of which include local unions of rank-and-file employees.31 In De La Salle University Medical Center and College of Medicine v. Laguesma, we reiterated the rule that for the prohibition to apply, it is not enough that the supervisory union and the rank-and-file union are affiliated with a single federation. In addition, the supervisors must have direct authority over the rank-and-file employees.32 In the instant case, the national federations that exist as separate entities to which the rank-and-file and supervisory unions are separately affiliated with, do have a common set of officers. In addition, APSOTEU, the supervisory federation, actively participates in the CSBTI-SU while ALU, the rankand-file federation, actively participates in the CSBTI-RFU, giving occasion to possible conflicts of interest among the common officers of the federation of rank-and-file and the federation of supervisory unions. For as long as they are affiliated with the APSOTEU and ALU, the supervisory and rank-and-file unions both do not meet the criteria to attain the status of legitimate labor organizations, and thus could not separately petition for certification elections.
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The purpose of affiliation of the local unions into a common enterprise is to increase the collective bargaining power in respect of the terms and conditions of labor.33 When there is commingling of officers of a rank-and-file union with a supervisory union, the constitutional policy on labor is circumvented. Labor organizations should ensure the freedom of employees to organize themselves for the purpose of leveling the bargaining process but also to ensure the freedom of workingmen and to keep open the corridor of opportunity to enable them to do it for themselves. WHEREFORE, the petition is GRANTED. The Court of Appeals Decision dated August 31, 2001, in CA-G.R. SP No. 54128 and the Resolution dated February 5, 2003 are SET ASIDE. The decision of the Med-Arbiter is herebyAFFIRMED. SO ORDERED. LEONARDO A. QUISUMBING Associate Justice WE CONCUR: ANTONIO T. CARPIO Associate Justice CONCHITA CARPIO MORALES Associate Justice DANTE O. TINGA Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

LEONARDO A. QUISUMBING Associate Justice Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. ARTEMIO V. PANGANIBAN Chief Justice

Footnotes
1

Rollo, pp. 51-64. Id. at 66. Id. at 154-158. Id. at 126-127. Id. at 127. Id. at 158. Id. at 171-172. Id. at 63. Id. at 62. Id. at 66. Id. at 23-24. No. L-22228, February 27, 1969, 27 SCRA 40. Nos. L-50283-84, April 20, 1983, 121 SCRA 444.

10

11

12

13

ART. 235. Action on application. The Bureau shall act on all applications for registration within thirty (30) days from filing.
14

All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the organization, as the case may be, and attested to by its president.

15

Article 212 (b).

16

Rules and Regulations Implementing R.A. 6715, approved by Secretary of the Department of Labor and Employment Franklin Drilon on May 24, 1989.
17

Rule III, Section 1 in relation to Rule I, Section 1(f). Rule III, Section 1. Where to file. Applications for registration of independent labor unions, chartered locals, workers associations shall be filed with the Regional Office where the applicant principally operates. It shall be processed by the Labor Relations Division at the Regional Office in accordance with Sections 2-A, 2-C, and 2-E of this Rule. Applications for registration of federations, national unions or workers associations operating in more than one region shall be filed with the Bureau or the Regional Offices, but shall be processed by the Bureau in accordance with Sections 2-B and 2-D of this Rule.

18

Supra note 13. labor code, Article 231. ART 231. Registry of unions and file of collective agreements. - The Bureau shall keep a registry of legitimate labor organizations . xxxx

19

20

Rollo, p. 156. Sec. 5, Rule V, Book V of the Implementing Rules of the Labor Code. Sec. 1, Rule VI, Book V of the Implementing Rules of the Labor Code. Supra note 21.

21

22

23

24

See Tagaytay Highlands International Golf Club, Incorporated v. Tagaytay Highlands Employees Union-PTGWO, G.R. No. 142000, January 22, 2003, 395 SCRA 699, 707.
25

Section 1(i), Rule I, Book V of the Implementing Rules of the Labor Code.

26

Alliance of Nationalist and Genuine Labor Org. v. Samahan ng mga Manggagawang Nagkakaisa sa Manila Bay Spinning Mills, G.R. No.118562, July 5, 1996, 258 SCRA 371, 377.
27

De La Salle University Medical Center and College of Medicine v. Laguesma, G.R. No. 102084, August 12, 1998, 294 SCRA 141, 149.
28

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.
29

Atlas Lithographic Services, Inc. v. Laguesma, G.R. No. 96566, January 6, 1992, 205 SCRA 12, 17.
30

Id. at 19. Id. Supra note 27 at 150.

31

32

33

Id. at 149 citing Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., No. L33987, September 4, 1975, 66 SCRA 512, 519.

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