1

D. BARGAINING AGENT AND CERTIFICATION ELECTION PROCEEDINGS

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 101730 June 17, 1993

PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION, petitioner,
vs.
HON. BIENVENIDO E. LAGUESMA and PT & T SUPERVISORY EMPLOYEES UNIONAPSOTEU, respondents.
Leonard U. Sawal for private respondent.

BELLOSILLO, J.:
Can a petition for certification election filed by supervisory employees of an unorganized
establishment one without a certified bargaining agent be dismissed on the ground that
these employees are actually performing managerial functions?
This is the issue for reconsideration in this petition for certiorari and mandamus, with prayer for
the issuance of a temporary restraining order, of
the Resolution of 11 June 1991 1 of then Acting Secretary of Labor and Employment Nieves D.
Confesor dismissing the appeal from the Order of 11 December 1990 2 of the Med-Arbiter which
granted the petition for certification election, and of the Order of 15 August 1991 3 denying
reconsideration.
On 22 October 1990, private respondent PT&T Supervisory Employees Union-APSOTEU
(UNION, for brevity) filed a petition before the Industrial Relations Decision of the Department of
Labor and Employment praying for the holding of a certification election among the supervisory
employees of petitioner Philippine Telegraph & Telephone Corporation (PT&T, for brevity). On 29
October 1990, UNION amended its petition to include the allegation that PT&T was an
unorganized establishment employing roughly 100 supervisory employees from whose ranks will
constitute the bargaining unit sought to be established.
On 22 November 1990, PT&T moved to dismiss the petition for certification election on the
ground that UNION members were performing managerial functions and thus were not merely
supervisory employees. Moreover, PT&T alleged that a certified bargaining unit already existed
among its rank-and-file employees which barred the filing of the petition.

On 27 November 1990, respondent UNION opposed the motion to dismiss, contending that
under the Labor Code supervisory employees are not eligible to join the Labor organization of
the rank-and-file employees although they may form their own.
On 4 December 1990, PT&T filed its reply to the opposition and manifested that it is the function
of an employee which is determinative of whether said employee is a managerial or supervisory
employee.
On 11 December 1990, the Med-Arbiter granted the petition and ordered that "a certification
election . . . (be) conducted among the supervisory personnel of the Philippine Telegraph &
Telephone Corporation (PT&T)." 4Petitioner PT&T appealed to the Secretary of Labor and
Employment.
On 24 May 1991, PT&T filed its supplemental appeal and attached copies of the job descriptions
and employment service records of these supervisory employees, including samples of
memoranda and notices they made which purportedly illustrate their excercise of management
prerogatives. On 31 May 1991, petitioner submitted more job descriptions to further bolster its
contention.
On 11 June 1991, the Acting Secretary of Labor and Employment Nieves R. Confesor denied
petitioner's appeal for lack of merit. However, she did not rule on the additional evidence
presented by PT&T. Instead, she directed that the evidence "should be scrutinized and . . .
considered during the exclusion-inclusion proceedings where the employees who should be part
of the bargaining unit . . . will be determined." 5
On 15 August 1991, respondent Undersecretary of Labor and Employment Bienvenido E.
Laguesma denied reconsideration of the resolution dismissing the appeal. Hence, the instant
petition anchored on the ground that public respondent committed grave abuse of discretion in
failing to rule on the additional evidence submitted by petitioner which would have buttressed its
contention that there were no supervisory employees in its employ and which, as a
consequence, would have barred the holding of a certification election.
The petition is devoid of merit.
The applicable provision of law in the case at bar is Art. 257 of the Labor Code. It reads
Art. 257. Petitions in unorganized establishments. In any establishment
where there is no certified bargaining agent, a certification election
shall automatically be conducted by the Med-Arbiter upon the filing of a
petition by a legitimate labor organization (emphasis supplied).
The supervisory employees of PT&T did not yet have a certified bargaining agent to represent
them at the time the UNION, which is legitimate labor organization duly registered with the
Department of Labor and Employment,6 filed the petition for certification election. Since no
certified bargaining agent represented the supervisory employees, PT&T may be deemed an
unorganized establishment within the purview of Art. 257 of the Labor Code.
The fact that petitioner's rank-and-file employees were already represented by a certified
bargaining agent doe not make PT&T an organized establishment vis-a-vis the supervisory
employees. After all, supervisory employees are "not . . . eligible for membership in a labor
organization of the rank-and-file employees." 7

Consequently, the Med-Arbiter, as sustained by public respondent, committed no grave abuse of

discretion in granting the petition for certification election among the supervisory employee of
petitioner PT&T because Art. 257 of the Labor Code provides that said election should
be automatically conducted upon filing of the petition. In fact, Sec. 6 of Rule V, Book V, of the
Implementing Rules and Regulations makes it mandatory for the Med-Arbiter to order the
holding of a certification election. It reads
Sec. 6. Procedure. Upon receipt of a petition, the Regional Director shall
assign the case to a Med-Arbiter for appropriate action. The Med-Arbiter,
upon receipt of the assigned petition, shall have twenty (20) working days
from submission of the case for resolution within which to dismiss or grant
the petition.
In a petition filed by a legitimate organization involving an unorganized
establishment, the Med-Arbiter shall immediately order the conduct of a
certification election . . . (emphasis supplied)
Furthermore, PT&T did not possess the legal personality to file a motion to dismiss the petition
for certification election even if based on the ground that its supervisory employees are in reality
managerial employees. It is well-settled that an employer has no standing to question a
certification election 8 since this is the sole concern of the workers. 9 The only exception to this
rule is where the employer has to file the petition for certification election itself pursuant to Art.
258 10 of the Labor Code because it was requested to bargain collectively. But, other that this
instance, the choice of a collective bargaining agent is purely the internal affair of labor. 11
What PT&T should have done was to question the inclusion of any disqualified employee in the
certification election during the exclusion-inclusion proceedings before the representation officer.
Indeed, this is precisely the purpose of the exclusion-inclusion proceedings, i.e., to determine
who among the employees are entitled to vote and be part of the bargaining unit sought to be
certified.
Then Acting Secretary Nieves D. Confesor therefore did not abuse her discretion when she
opted not to act upon the additional evidence by petitioner PT&T. For, the holding of a
certification election in an unorganized establishment is mandatory and must immediately be
ordered upon petition by a legitimate labor organization, which is the case here.

As the Med-Arbiter himself noted, "It is incredible that only rank-and-file and managerial
employees are the personnel of respondent firm, considering the line of service it offers to the
public" 13 and the fact that it employed 2,500 employees, more or less, all over the country.
A word more. PT&T alleges that respondent UNION is affiliated with the same national
federation representing its rank-and-file employees. Invoking Atlas Lithographic Services, Inc. v.
Laguesma, 14 PT&T seeks the disqualification of respondent UNION. Respondent, however,
denied it was affiliated with the same national federation of the rank-and-file employees union,
the Associated Labor Union or ALU. It clarified that the PT&T Supervisory Employees Union is
affiliated with Associated Professional, Supervisory Office, Technical Employees Union or
APSOTEU, which is a separate and distinct national federation from ALU.
IN VIEW OF THE FOREGOING, the Petition for Certiorari and Mandamus with prayer for the
issuance of a temporary restraining order is DENIED.
Costs against petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 77539 April 12, 1989
ASSOCIATED LABOR UNIONS (ALU)-TUCP, petitioner,
vs.
HON. CRESENCIANO B. TRAJANO, as Officer-In-Charge of the Bureau of Labor
Relations, ASSOCIATION OF DEMOCRATIC LABOR ORGANIZATION (ADLO) and MITSUMI
PHILIPPINES, INC., respondents.
Romeo S. Occea for petitioner.

At any rate, the additional evidence presented by petitioner failed to sufficiently show that the
supervisory employees who sought to be included in the bargaining unit were in fact performing
managerial functions. On the contrary, while these supervisory employees did excercise
independent judgment which is not routinary or clerical in nature, their authority was merely
recommendatory in character. In all instances, they were still accountable for their actions to a
superior officer, i.e., their respective superintendents. The Solicitor General succinctly puts it
thus
A perusal of petitioner's annexes . . . would readily show that the power of
said supervisors in matters relating to the excercise of prerogatives for or
against rank-and-file employees is not absolute but merely recommendatory
in character. Note that their reports recommending or imposing disciplinary
action against rank-and-file employees always bore the concurrence of one
or two superiors . . . and the job descriptions . . . clearly stated that these
supervisors directly reported to a superior and were accountable to the
latter 12 (emphasis supplied).

Banzuela, Flores, Miralles, Raneses, Sy, Taquio and Associates for private respondent ADLO.
The Solicitor General for public respondent.

PARAS, J.:
This is a petition for certiorari with prayer for a temporary restraining order, seeking review of the
resolution of the Director of Labor Relations * dated January 30, 1987 in BLR Case No. A-1-1887 ordering a certification election among the rank and file employees of respondent company
and the order of public respondent ** dated February 24, 1987 dismissing petitioner's motion for
reconsideration for lack of merit.

The dispositive portion of the questioned resolution of the Bureau of Labor Relations dated
January 30, 1987 (Rollo, p. 55), reads, as follows:
Accordingly, let a certification election be conducted within the twenty (20)
days from receipt of this Resolution, subject to the usual pre-election
conference, with the following as choices:
1. Association of Democratic Labor Union (ADLO);
2. Associated Labor union-ALU; and
3. No Union.

between the intervenor union and the petitioner union, but, the parties failed to reach an
agreement despite several conferences (Rollo pp 59; 78).
The Med-Arbiter, Eladio de Jesus, issued an order for the holding of a certification election in a
resolution dated December 10, 1986, premised on the fact that the petitioner, respondent union
herein, "has satisfactorily complied with the jurisdictional requirement of this Office. The same
records show that the instant petition was seasonably filed within the sixty-day freedom period."
(Rollo, p. 59). The said resolution was appealed by petitioner to the Director of Bureau of Labor
Relations but the appeal was dismissed for lack of merit, in the questioned resolution of January
30, 1987 (Rollo, p. 53). Petitioner's motion for reconsideration dated February 12, 1987 (Rollo, p.
19) was likewise dismissed in the equally questioned order of February 24, 1987 (Rollo, p. 17).
The Med-Arbiter then set the certification election for March 17, 1987 (Rollo, p. 60).

The undisputed facts of the case are as follows:

Instant petition was filed with the Court on March 9, 1987 (Rollo, p. 2). On the same date,
petitioner filed an urgent ex parte motion for issuance of a temporary restraining order ("Rollo, P.
6). On March 16, 1987, the Second Division of this Court, without giving due course to the
petition, required the respondents to comment thereon and issued a temporary restraining order
effective on the same date that the resolution was passed, to continue until otherwise ordered by
the Court (Rollo, p. 64).

Petitioner herein is the recognized collective bargaining representative of all the rank and file
employees of respondent Company with a collective bargaining agreement effective January 1,
1984 to December 31, 1986. Article XX of the collective bargaining agreement provides that the
CBA shall be for a period of three (3) years effective January 1, 1984 to December 31, 1986,
provided that within sixty (60) days before its expiration the parties shall renegotiate for a new
one (Memorandum for the Petitioner, Rollo, p. 208).

The comment of public respondent was filed by the Office of the Solicitor General on June 3,
1987 (Rollo, p. 75). In a resolution dated June 29, 1987, petitioner was required to file a reply
thereto and the letters addressed to then Chief Justice Claudio Teehankee, of twenty one (21)
progressive democratic labor unions in Japan protesting the temporary restraining order issued
by the Court on March 16, 1987 was noted (Rollo, p. 129). Again on August 31, 1987, the Court
resolved to note the letters of the progressive democratic organizations in Japan (Rollo, p. 140).

On October 22,1986, a big majority of the covered employees of respondent Company

petitioned for the renewal of the expiring agreement which petitioner and the respondent
Company agreed to negotiate. The parties, however, failed to arrive at an acceptable agreement
so that a bargaining deadlock on CBA negotiation was declared (Memorandum for the Petitioner,
Rollo, p. 209).

On August 10, 1987, the petition was given due course and both parties were required to submit
their simultaneous memoranda within thirty (30) days from notice (Rollo, p. 166). On September
18, 1987, the Office of the Solicitor General manifested that it was adopting for its memorandum
its comment on the petition for certiorari filed with the Court on June 3, 1987 (Rollo, p. 194)
which was noted by the Court in its resolution dated November 11, 1987 (Rollo, p. 202). In the
same resolution, the Court also noted receipt of two telegrams of the Mitsumi Workers Union
ALDO of Mariveles, Bataan dated September 3 and September 9, 1987 (Rollo, pp. 184,185),
requesting for information on the status of the case and for its expeditious resolution, and the
letters all addressed to the Chief Justice from progressive unions in Japan together with two
undated letters signed in Japanese characters, all demanding for a certification election (Rollo,
pp. 170-182).

Let, therefore, the records be forwarded to the Office of origin for the
immediate implementation of this Resolution.

On November 3, 1986, petitioner filed a notice of strike (Rollo, p. 27). Failing to arrive at an
agreement during the conciliation following the filing of the notice of strike, on December 1, 1986
petitioner went on strike.
Meanwhile, on November 4,1986 private respondent Union, Association of Democratic Labor
Organization (ADLO) filed with the Ministry of Labor and Employment, Panlalawigang
Tanggapan ng Paggawa, Bataan Export Processing Zone, a verified petition for certification
election among the regular rank and file workers of private company, docketed as Case No.
BZED-CE-11-011-86 (Rollo, p. 87).
On December 4, 1986, petitioner and respondent company came to an agreement with
representatives of the parties setting their signature on the resulting CBA on the same date
(Rollo, p. 28), ratified by a big majority of the covered employees, 584 out of 742 covered
employees, also on the same date (Rollo, p. 43). Petitioner registered the new CBA with the
Regional Director of the Ministry of Labor and Employment in San Fernando, Pampanga on
December 4, 1986 (Rollo, p. 41) as required under Article 231 of the Labor Code.
Petitioner herein intervened in the petition for certification election. On December 9, 1986, the
Med-Arbiter called for a conference to see whether a consent election could be agreed upon

Memorandum for the Petitioner was filed on November 27, 1987 (Rollo, p. 208) noted by the
Court in its resolution dated February 15, 1988 (Rollo, p. 231). The motion to admit
memorandum filed by respondent union on April 7, 1988 (Rollo, p. 232) was granted by the
Court in its resolution dated April 18, 1988 (Rollo, p. 259) wherein the Court also noted the
memorandum of respondent union attached to the motion (Rollo, p. 234).
The issues raised by petitioner (Rollo, p. 212), are as follows:
I
THAT THE PUBLIC RESPONDENT ERRED IN NOT HOLDING THAT NO
CERTIFICATION ELECTION MAY BE HELD DUE TO THE FACT THAT A
BARGAINING DEADLOCK TO WHICH PETITIONER IS A PARTY IS

SUBMITTED TO CONCILIATION/ ARBITRATION AND THERE IS A VALID

NOTICE OF STRIKE PRIOR TO THE FILING OF THE PETITION FOR
CERTIFICATION ELECTION ON DECEMBER 4, 1986.

mandatory for the Bureau to conduct a certification election for the purpose
of determining the representative of the employees in the appropriate
bargaining unit and certify the winner as the exclusive collective bargaining
representative of all the employees in the unit.

II

III

There is no question that the 30% support requirement for a certification election had been met
even if the covered employees number 742, as alleged by petitioner (Memorandum for the
Petitioner, Rollo, p. 217) not 600, Hence, it became mandatory for the Director of Labor
Relations to call a certification election (Atlas Free Workers Union (AFWU-PSSLU Local v.
Noriel, 104 SCRA 565 [1981]; Vismico Industrial Workers Association (VIWA) v Noriel, 131
SCRA 569 [1984]; Samahang Manggagawa ng Pacific Mills, Inc. v. Noriel, 134 SCRA 152
[1985]), and in the language of the Labor Code, "mandatory for the Bureau to conduct a
certification election for the purpose of determining the representative of the employees in the
appropriate bargaining unit and certify the winner as the exclusive bargaining representative of
all employees in the unit" (Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de
Filipinas v. Noriel, 72 SCRA 24 [1976]; Kapisanan ng mga Manggagawa v. Noriel, 77 SCRA 414
[1977]).

THAT THE PUBLIC RESPONDENT ERRED IN NOT DISMISSING THE

PETITION, ANNEXED "D" AND HOLDING THAT THE COLLECTIVE
BARGAINING AGREEMENT (ANNEX "B" to ANNEX "B" HEREOF)
HAVING BEEN RATIFIED BY THE MEMBBERS AND THE BENEFITS
THEREIN ENJOYED IS A BAR TO THE HOLDING OF A CERTIFICATION
ELECTION.

"No administrative agency can ignore the imperative tone of the above article. The language
used is one of command. Once it has been verified that a petition for certification election has
the support of at least 30% of the employees in the bargaining unit, it must be granted. The
specific word used yields no other meaning" (Federation of Free Workers v. Noriel, 86 SCRA
132 [1978]; Warren Manufacturing Workers Union (WMWU) v. Bureau of Labor Relations, G.R.
No. 76185, March 30, 1988).

THAT THE PUBLIC RESPONDENT ERRED IN NOT HOLDING THAT THE

COLLECTIVE BARGAINING AGREEMENT ENTERED INTO AS A RESULT
OF A BARGAINING DEADLOCK AND CONCILIATION DURING THE
PROGRESS OF A STRIKE HAVING BEEN ACCORDINGLY REPORTED
TO THE DEPARTMENT OF LABOR AND EMPLOYMENT PURSUANT TO
THE PROVISIONS OF ARTICLE 231 OF THE LABOR CODE RENDERS
THE FILING OF THE PETITION FOR CERTIFICATION ELECTION
PREMATURE.

The petition is devoid of merit.

Simply stated, the sole issue is whether or not public respondent committed a grave abuse of
discretion amounting to lack of jurisdiction in ordering a certification election considering that at
the time the petition for certification election was filed, there was a bargaining deadlock between
company and the petitioner union, as a result of which petitioner union filed a notice of strike.
In fact, it actually went on strike, and pending decision on the said petition, petitioner and
respondent company came to terms on the collective bargaining agreement duly ratified by a big
majority of the covered members and duly registered with the Department of Labor and
Employment.
Public respondent denied petitioner's motion for reconsideration, finding "no compelling
justification to effect a reconsideration, much less a reversal" of the resolution of January 30,
1987 (Rollo, p. 18). The aforesaid resolution dismissed the appeal of petitioner as intervenor in
the petition for certification election based on the following: (1) the records show that the petition
for certification election was seasonably filed within the sixty (60) day freedom period; and (2)
the records likewise reveal that the petition is supported by two hundred forty-two (242) of the
more or less six hundred (600) rank-and-file employees of Mitsumi Philippines, Inc., hence, has
complied with the thirty percent (30%) statutory requirement (Rollo, p. 54). The provision of the
law then in force was Article 258 of the Labor Code inasmuch as Executive Order No. 111 which
amended it took effect only on March 4, 1987. Article 258 reads, as follows:
Art. 258. Requisites for certification election. Any petition for certification
election filed by any legitimate labor organization shall be supported by the
written consent of at least thirty percent (30%) of all the employees in the
bargaining unit. Upon receipt and verification of such petition, it shall be

Petitioner, however, insists that the deadlock in negotiation already submitted to

conciliation/arbitration after the filing of a valid notice of strike based on deadlock in negotiation
prior to the filing of the petition for certification election bars the holding of a certification election
basing its argument on the contract bar rule under Section 3 of Rule V, Book V of the Omnibus
Rules Implementing the Labor Code (Memorandum for the Petitioner, Rollo, p. 213), which
provides:
Sec. 3. When to file In the absence of a collective agreement submitted
in accordance with Article 231 of the Code, a petition for certification
election may be filed at any time. However, no certification i petition election
may be held within one year from the date of issuance of declaration of a
final certification election result. Neither may a representation question be
entertained if, before the filing of a petition for certification election, a
bargaining deadlock to which an incumbent or certified bargaining agent is a
party had been submitted to conciliation or arbitration or had become the
subject of a valid notice of strike or lockout.
If a collective agreement has been submitted in accordance with Article 231
of the Code, a petition for certification election or a motion for intervention
can only be entertained within 60 days prior to the expiry date of such
agreement.
As the introductory sentence of the first paragraph states, said paragraph applies where there is
no existing collective bargaining agreement. This circumstance is not obtaining in the instant
case. As admitted by petitioner (Memorandum for the Petitioner, Rollo, p. 208) there was an
existing collective bargaining agreement when the petition for certification election was filed,
which was to expire on December 31, 1986. It is the second paragraph which is applicable to the
case at bar.

In a recent decision, this Court interpreted the above provision as follows:

This rule simply provides that a petition for certification election or a motion
for intervention can only be entertained within 60 days prior to the expiry
date of an existing collective bargaining agreement. Otherwise put, the rule
prohibits the filing of a petition for certification election during the existence
of a collective bargaining agreement except within the freedom period, as it
is called, when the said agreement is about to expire. The purpose,
obviously, is to ensure stability in the relationship of the workers and the
management by preventing frequent modifications of any collective
bargaining agreement earlier entered into by them in good faith and for the
stipulated original period. (Associated Trade Unions (ATU) v. Trajano, G.R.
No. 75321, June 20, 1988).

PREMISES CONSIDERED, (a) the petition for certiorari is DISMISSED for lack of merit; (b) the
resolution of the Bureau of Labor Relations dated January 30,1987 and the order of the Bureau
dated February 24, 1987 are AFFIRMED; and (c) the temporary restraining order issued by the
Court on March 9, 1987 is LIFTED permanently.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

Undoubtedly, the petition for certification election was filed during the 60- day freedom period.
The fact that petitioner was able to negotiate a new CBA with respondent company on
December 4, 1986 within the freedom period of the existing CBA, does not foreclose the right of
a rival union, which in this instant case is the respondent union, to challenge petitioner's claim to
majority status, by filing earlier on November 4, 1986, a timely petition for certification election
before the old CBA expired on December 31, 1986 and before petitioner signed a new CBA with
respondent company (Kapatiran Sa Meat and Canning Division (TUPAS Local Chapter No.
1027) vs. Calleja, G.R. No. 82914, June 20, 1988). There should be no obstacle to the right of
the employees to petition for a certification election at the proper time, that is, within sixty (60)
days prior to the expiration of the life of a certified collective bargaining agreement (General
Textiles Allied Workers Association (GTAWA) v. Director of the Bureau of Labor Relations, 84
SCRA 430 [1978]; Warren Manufacturing Workers Union (WMWU) v. Bureau of Labor
Relations, supra), not even by a collective agreement submitted during the pendency of a
representation case.

G.R. No. 84685 February 23, 1990

On said subject, Rule V of the Omnibus Rules Implementing the Labor Code, provides:

GRIO-AQUINO, J.:

Sec. 4. Effects of early agreements. The representation case shall not,

however, be adversely affected by a collective agreement submitted before
or during the last 60 days of a subsisting agreement or during the pendency
of the representation case.
The new CBA negotiated by petitioners whether or not submitted to the MOLE in accordance
with Article 231 of the Labor Code cannot be deemed permanent, precluding the
commencement negotiations by another union with management, considering that it was
entered into at a time when the petition for certification election had already been filed by
respondent union (Associated Trade Unions (ATU) v. Trajano, supra). Meantime this interim
agreement must be recognized and given effect on a temporary basis so as not to deprive the
workers of the favorable terms of the agreement (Vassar Industries Employers Union (VIEW) v.
Estrella, 82 SCRA 280 [1978]; National Mines and Allied Workers Union (NAMAWUMIF) v.
Estrella, 87 SCRA 84 [1978], cited in Associated Trade Unions (ATU) v. Trajano, Ibid.)
If, as a result of the certification election, respondent union or a union other than petitioner union
which executed the interim agreement, is certified as the exclusive bargaining representative of
the rank and file employees of respondent company, then, such union may adopt the interim
collective bargaining agreement or negotiate with management for a new collective bargaining
agreement (Associated Trade Unions (ATU) v. Trajano, Ibid).

ILAW AT BUKLOD NG MANGGAGAWA (IBM) LOCAL NO. 56, petitioner,

vs.
HON. PURA FERRER-CALLEJA, in her capacity as Director, BUREAU OF LABOR
RELATIONS, and SAN MIGUEL CORPORATION, respondents.
E.N.A Cruz & Associates for petitioner.
Siguion Reyna, Montecillo & Ongsiako for private respondent.

This is a special civil action of certiorari with a prayer for the issuance of a writ of preliminary
injunction to annul the orders dated February 22, 1988 and June 23, 1988, of the Med-Arbiter
and the Bureau of Labor Relations (BLR), respectively, for the holding of a certification election
in the Calasiao Beer Region of the San Miguel Corporation.
On September 7, 1987, petitioner Union, formerly registered with the Labor Organization
Division of the Bureau of Labor Relations, as the San Miguel Corporation Sales Force Union
Calasiao Beer Region-IBM Local No. 56, a local union of Ilaw at Buklod ng Manggagawa (IBM),
which is a national union, requested San Miguel Corporationfor voluntary recognition as the sole
and exclusive bargaining representative of all the covered employees which consist of the
monthly and daily-paid employees of the Calasiao Sales Office, now Dagupan Sales Office. As
the territorial coverage of the Calasiao Beer Region embraces the regional sales office and the
six (6) sales offices in Calasiao, Carmen, Alaminos, Tarlac, Cabanatuan and San Isidro, SMC
denied the union's request and instead, suggested that it avail of a certification election. So, on
November 27, 1987, SMC, through its North-Central Luzon Sales Operations Manager, filed a
petition for certification election among the sales personnel of the Region only, excluding the
daily-paid and monthly paid employees, but including the sales offices of the entire beer region.
The Union filed a motion to dismiss alleging that the petition for certification election was
premature as it did not ask SMC to bargain collectively with it. It cited Article 258 of the Labor
Code which provides:

ART. 258. When an employer may file petition. When requested to

bargain collectively, an employer may petition the Bureau for an election. If
there is no existing certified collective bargaining agreement in the unit, the
Bureau shall, after hearing, order a certification election.

WHEREFORE, the petition for certiorari is dismissed for lack of merit. Costs against the
petitioner.
SO ORDERED.

All certification cases shall be decided within twenty (20) working days.

Republic of the Philippines

SUPREME COURT
Manila

The Bureau shall conduct a certification election within twenty (20) days in
accordance with the rules and regulations prescribed by the Secretary of
Labor.

SECOND DIVISION

On February 22, 1988, the Med-Arbiter issued an order, the dispositive portion of which reads as
follows:
IN VIEW OF ALL THE FOREGOING, let therefore, a certification election be
conducted among the sales force personnel of the SMC-North Central
Luzon Beer Region covering the following sales offices: Dagupan City,
Carmen, Alaminos, Tarlac, Cabanatuan and San Isidro, within twenty (20)
days from receipt hereof with the following choices:

G.R. No. 107792 March 2, 1998

SAMAHANG MANGGAGAWA SA PERMEX (SMP-PIILU-TUCP), petitioners,
vs.
THE SECRETARY OF LABOR, NATIONAL FEDERATION OF LABOR, PERMEX PRODUCER
AND EXPORTER CORPORATION, respondents.

1. San Miguel Corporation Sales Force Labor Union

Calasiao Beer Region Ilaw at Bukod ng
Manggagawa (IBM) Local No. 56;
2. No union.
Parties are hereby directed to attend a pre-election conference which shall
be called by this Office one (1) week before the actual conduct of said
election, with corresponding notices to be sent to them. (p. 6, Rollo.)
Petitioner appealed the order to the Bureau of Labor Relations (BLR) which denied the appeal
on June 23, 1988 for lack of merit. Hence, this petition for certiorari alleging that the Director of
the BLR gravely abused her discretion in ordering the holding of a certification election.
Parenthetically, the certification election was actually conducted on September 19, 1988
resulting in "NO UNION" as the winner.
The petition has no merit. Ordinarily, in an unorganized establishment like the SMC Calasiao
Beer Region, it is the union that files a petition for a certification election if there is no certified
bargaining agent for the workers in the establishment. If a union asks the employer to voluntarily
recognize it as the bargaining agent of the employees, as the petitioner did, it in effect asks the
employer to certify it as the bargaining representative of the employees a certification which
the employer has no authority to give, for it is the employees' prerogative (not the employer's) to
determine whether they want a union to represent them, and, if so, which one it should be.
The petitioner's request for voluntary recognition as the bargaining representative of the
employees was in effect a request to bargain collectively, or the first step in that direction, hence,
the employer's request for a certification election was in accordance with Article 258 of the Labor
Code, and the public respondents did not abuse their discretion in granting the request.

MENDOZA, J.:
This is a petition for review on certiorari of the decision, dated October 8, 1992 and order dated
November 12, 1992, of Undersecretary of Labor and Employment Bienvenido Laguesma,
ordering a certification election to be conducted among the employees of respondent company.
The facts of the case are as follows. On January 15, 1991, a certification election was conducted
among employees of respondent Permex Producer and Exporter Corporation (hereafter referred
to as Permex Producer). The results of the elections were as follows:
National Federation of Labor (NFL)

235

No Union

466

Spoiled Ballots

18

Marked Ballots

Challenged Ballots

However, some employees of Permex Producer formed a labor organization known as the
Samahang Manggagawa sa Permex (SMP) which they registered with the Department of Labor
and Employment on March 11, 1991. The union later affiliated with the Philippine Integrated
Industries Labor Union (PIILU).

On August 16, 1991, Samahang Manggagawa sa Permex-Philippine Integrated Industries Labor

Union (SMP-PIILU), wrote the respondent company requesting recognition as the sole and
exclusive bargaining representative of employees at the Permex Producer. On October 19, 1991
Permex Producer recognized SMP-PIILU and, on December 1, entered into a collective
bargaining agreement with it. The CBA was ratified between December 9 and 10, 1991 by the
majority of the rank and file employees of Permex Producer. On December 13, 1991, it was
certified by the DOLE.
On February 25, 1992, respondent NFL filed a petition for certification election, but it was
dismissed by Med-Arbiter Edgar B. Gongalos in an order dated August 20, 1992. Respondent
NFL then appealed the order to the Secretary of Labor and Employment. On October 8, 1992,
the Secretary of Labor, through Undersecretary Bienvenido Laguesma, set aside the order of the
Med-Arbiter and ordered a certification election to be conducted among the rank and file
employees at the Permex Producer, with the following choices:
1. National Federation of Labor
2. Samahang Manggagawa sa Permex

a union to represent them, and, if so, which one it should be. (emphasis
supplied)
In accordance with this ruling, Permex Producer should not have given its voluntary recognition
to SMP-PIILU-TUCP when the latter asked for recognition as exclusive collective bargaining
agent of the employees of the company. The company did not have the power to declare the
union the exclusive representative of the workers for the purpose of collective bargaining,
Indeed, petitioner's contention runs counter to the trend towards the holding of certification
election. By virtue of Executive Order No. 111, which became effective on March 4, 1987, the
direct certification previously allowed under the Labor Code had been discontinued as a method
of selecting the exclusive bargaining agents of the workers. 2 Certification election is the most
effective and the most democratic way of determining which labor organization can truly
represent the working force in the appropriate bargaining unit of a company. 3
Petitioner argues that of the 763 qualified employees of Permex Producer, 479 supported its
application for registration with the DOLE and that when petitioner signed the CBA with the
company, the CBA was ratified by 542 employees. Petitioner contends that such support by the
majority of the employees justifies its finding that the CBA made by it is valid and binding.

3. No union
Petitioner moved for a reconsideration but its motion was denied in an order dated November
12, 1992. Hence, this petition.
Two arguments are put forth in support of the petition. First, it is contended that petitioner has
been recognized by the majority of the employees at Permex Producer as their sole collective
bargaining agent. Petitioner argues that when a group of employees constituting themselves into
an organization and claiming to represent a majority of the work force requests the employer to
bargain collectively, the employer may do one of two things. First, if the employer is satisfied with
the employees' claim the employer may voluntarily recognize the union by merely bargaining
collectively with it. The formal written confirmation is ordinarily stated in the collective bargaining
agreement. Second, if on the other hand, the employer refuses to recognize the union
voluntarily, it may petition the Bureau of Labor Relations to conduct a certification election. If the
employer does not submit a petition for certification election, the union claiming to represent the
employees may submit the petition so that it may be directly certified as the employees'
representative or a certification election may be held.
The case of Ilaw at Buklod ng Manggagawa v. Ferrer-Calleja, 1 cited by the Solicitor General in
his comment filed in behalf of the NLRC, is particularly apropos. There, the union also requested
voluntary recognition by the company. Instead of granting the request, the company petitioned
for a certification election. The union moved to dismiss on the ground that it did not ask the
company to bargain collectively with it. As its motion was denied, the union brought the matter to
this Court. In sustaining the company's stand, this Court ruled:
. . . Ordinarily, in an unorganized establishment like the Calasiao Beer
Region, it is the union that files a petition for a certification election if there is
no certified bargaining agent for the workers in the establishment. If a union
asks the employer to voluntarily recognize it as the bargaining agent of the
employees, as the petitioner did, it in effect asks the employer to certify it as
the bargaining representative of the employees A CERTIFICATION
WHICH THE EMPLOYER HAS NO AUTHORITY TO GIVE, for it is the
employees' prerogative (not the employer's) to determine whether they want

But it is not enough that a union has the support of the majority of the employees. It is equally
important that everyone in the bargaining unit be given the opportunity to express himself. 4
This is especially so because, in this case, the recognition given to the union came barely ten
(10) months after the employees had voted "no union" in the certification election conducted in
the company. As pointed out by respondent Secretary of Labor in his decision, there can be no
determination of a bargaining representative within a year of the proclamation of the results of
the certification election. 5 Here the results, which showed that 61% of the employees voted for
"no union," were certified only on February 25, 1991 but on December 1, 1991 Permex Producer
already recognized the union and entered into a CBA with it.
There is something dubious about the fact that just ten (10) months after the employees had
voted that they did not want any union to represent them, they would be expressing support for
petitioner. The doubt is compounded by the fact that in sworn affidavits some employees
claimed that they had either been coerced or misled into signing a document which turned out to
be in support of petitioner as its collective bargaining agent. Although there were retractions, we
agree with the Solicitor General that retractions of statements by employees adverse to a
company (or its favored union) are oftentimes tainted with coercion and intimidation. For how
could one explain the seeming flip-flopping of position taken by the employees? The figures
claimed by petitioner to have been given to it in support cannot readily be accepted as true.
Second. Petitioner invokes the contract-bar rule. They contend that under Arts. 253, 253-A and
256 of the Labor Code and Book V, Rule 5, 3 of its Implementing Rules and Regulations, a
petition for certification election or motion for intervention may be entertained only within 60 days
prior to the date of expiration of an existing collective bargaining agreement. The purpose of the
rule is to ensure stability in the relationships of the workers and the management by preventing
frequent modifications of any collective bargaining agreement earlier entered into by them in
good faith and for the stipulated original period. Excepted from the contract-bar rule are certain
types of contracts which do not foster industrial stability, such as contracts where the identity of
the representative is in doubt. Any stability derived from such contracts must be subordinated to
the employees' freedom of choice because it does not establish the kind of industrial peace
contemplated by the law. 6 Such situation obtains in this case. The petitioner entered into a CBA

with Permex Producer when its status as exclusive bargaining agent of the employees had not
been established yet.
WHEREFORE, the challenged decision and order of the respondent Secretary of Labor are
AFFIRMED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 128067 June 5, 1998

SAMAHAN NG MGA MANGGAGAWA SA FILSYSTEMS (SAMAFIL-NAFLU-KMU), petitioner,
vs.
HON. SECRETARY OF LABOR AND EMPLOYMENT and FILSYSTEMS, INC., respondents.

In reply, petitioner averred that as a duly registered labor union, it has "all the rights
and privileges . . . to act as representative of its members for the purpose of collective
bargaining with employers." 5
On January 12, 1996, Med-Arbiter Paterno D. Adap dismissed the petition for
certification election. He ruled that petitioner, as an affiliate of NAFLU-KMU, has no
legal personality on account of its failure to comply with paragraphs (a), (b) and (e) of
Section 3, Rule II of the Implementing Rules of Book V of the Labor Code, 6 viz:
xxx xxx xxx
In matters of affiliation of an independently registered union, the rules
provide that the latter shall be considered an affiliate of a labor federation
after submission of the contract or agreement of affiliation to the Bureau of
Labor Relations (BLR) within thirty (30) days after its execution.
Likewise, it mandates the federation or national union concerned to 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 certificate.
A close examination of the records of the case does not reveal that the
federation and the independent union have executed a contract or
agreement of affiliation, nor had it shown that it has submitted its charter
certificate to the Bureau of Labor Relations, within thirty (30) days from
issuance of such charter certificate as amended by the rules.

PUNO, J.:
Assailed under Rule 65 of the Rules of Court are the Resolution and Order 1 of the
public respondent, dated June 28, 1996 and November 18, 1996, respectively,
dismissing petitioner's petition for certification election.
It appears that petitioner Samahan ng mga Manggagawa sa Filsystems (SAMAFILNAFLU-KMU) is a registered labor union with Certificate of Registration No. NCR-UR10-1575-95 issued by the Department of Labor and Employment (DOLE) on October
25, 1995. On November 6, 1995, petitioner union filed a Petition for Certification
Election among the rank-and-file employees of private respondent FILSYSTEMS,Inc.
before the DOLE National Capital Region (NCR). 2 Attached as annexes to the
petition are the Certificate of Registration issued by the DOLE, copies of union
membership signed by thirty three (33) rank-and-file employees of respondent
company, the Charter Certificate showing its affiliation with the National Federation of
Labor Unions (NAFLU-KMU), the list of union officers, the certification of the union
secretary of the minutes of the general membership meeting, the Books of Accounts
and its Constitution and By-Laws. 3
Private respondent opposed the petition. It questioned the status of petitioner as a
legitimate labor organization on the ground of lack of proof that its contract of affiliation
with the NAFLU-KMU has been submitted to the Bureau of Labor Relations (BLR)
within thirty (30) days from its execution. 4

Petitioner argued that it has complied with all the requirements for
certification election pursuant to the mandate of Sec. 2, Rule V of Book V of
the Implementing Rules of the Labor Code; that the rule cited by respondent
is not included in the Rule citing the requirements for certification election.
We disagree with petitioner's contention. The rule cited by the petitioner,
Sec. 2, Rule V, Book V, sub-paragraphs A, B, C, D, E, F and G, refers to an
independently registered labor organization which has filed a petition for
certification election.
In the case at bar, an independently registered union has affiliated with a
federation, hence, strict compliance with the requirements embodied in Sec.
3, paragraphs A, B and E of Rule II, Book V of the Rules and Regulations
implementing the Labor Code should be complied with.
Record discloses that petitioner has not shown to have executed a contract
or agreement of affiliation nor has it established that is has submitted its
charter certificate to the Bureau of Labor Relations (BLR) within thirty (30)
days from its execution.
Thus, petitioner in this case having failed to comply with the mandatory
requirement, there was no valid affiliation. Consequently, petitioner has no
legal personality because the union failed to attain the status of legitimacy
for failure to comply with the requirements of law.

Petitioner appealed to the Office of the Secretary of Labor and Employment. It

reiterated its contention that as an independently registered union, it has the right to
file a petition for certification election regardless of its failure to prove its affiliation with
NAFLU-KMU. 7
On February 26, 1996, private respondent opposed the appeal. It argued that
petitioner should have filed its petition for certification election as an independently
registered union and not as a union affiliated with NAFLUKMU. 8
Meanwhile or on February 7, 1996, another union, the Filsystems Workers Union
(FWU), filed a Petition for Certification Election in the same bargaining unit. On March
22, 1996, the Med-Arbitration NCR Branch granted the petition. The certification
election held on April 19, 1996, was won by FWU which garnered twenty six (26) votes
out of the forty six (46) eligible voters. The FWU was certified on April 29, 1996, as the
exclusive bargaining agent of all rank-and-file employees of private respondent.
Eventually, FWU and the private respondent negotiated a CBA. 9
On June 11, 1996, the private respondent filed a Motion to Dismiss Appeal of
petitioner as it has become moot and academic. It also invoked Section 3, Rule V of
the Implementing Rules of Book V of the Labor Code stating that "once a union has
been certified, no certification election may be held within one (1) year from the date
of issuance of a final certification election [result]." 10
In opposing the Motion to Dismiss Appeal, petitioner contended that its appeal is not
moot as the certification election held on April 19, 1996, was void for violating Section
10, Rule V of the Implementing Rules of Book V of the Labor Code, 11 viz:
Sec. 10. Decision of the Secretary final and inappealable. The Secretary
shall have fifteen (15) calendar days within which to decide the appeal from
receipt of the records of the case. The filing of the appeal from the decision
of the Med-Arbiter stays the holding of any certification election. The
decision of the Secretary shall be final and inappealable.
Petitioner further argued that the CBA executed between the FWU and the private
respondent could not affect its pending representation case following Section 4, Rule
V of the Implementing Rules of Book V of the Labor Code 12 which states:
Sec. 4. Effects of early agreements. The representation case shall not,
however, be adversely affected by a collective bargaining agreement
registered before or during the last 60 days of the subsisting agreement or
during the pendency of the representation case.

I
Public respondent acted with grave abuse of discretion amounting to acting
without or in excess of jurisdiction in holding that the pending appeal in the
representation case was rendered moot and academic by a subsequently
enacted collective bargaining agreement in the company.
II
Public respondent committed a serious legal error and gravely abused its
discretion in failing to hold that the legal personality of petitioner as a union
having been established by its Certificate of Registration, the same could
not be subjected to collateral attack.
The petition is meritorious.
I
We shall first resolve whether the public respondent committed grave abuse of
discretion when he effectively affirmed the Resolution dated January 12, 1996 of the
Med-Arbiter dismissing petitioner's petition for certification election for failure to prove
its affiliation with NAFLU-KMU.
The reasoning of the public respondent and the Med-Arbiter is flawed, proceeding as
it does from a wrong premise. Firstly, it must be underscored that petitioner is an
independently registered labor union as evidenced by a Certificate of Registration
issued by the DOLE. As a legitimate labor organization, petitioner's right to file a
petition for certification election on its own is beyond question. 14 Secondly, the failure
of petitioner to prove its affiliation with NAFLU-KMU cannot affect its right to file said
petition for certification election as an independent union. At the most, petitioner's
failure will result in an ineffective affiliation with NAFLU-KMU. Still, however, it can
pursue its petition for certification election as an independent union. In our rulings, we
have stressed that despite affiliation, the local union remains the basic unit free to
serve the common interest of all its members and pursue its own interests
independently of the federation. 15
In fine, the Med-Arbiter erred in dismissing petitioner's petition for certification election
on account of its non-submission of the charter certificate and the contract of affiliation
with the NAFLU-KMU with the BLR. The public respondent gravely abused his
discretion in sustaining the Med-Arbiter's Resolution.
II

On June 28, 1996, respondent Secretary dismissed the appeal interposed by

petitioner on the ground that it has been rendered moot by the certification of FWU as
the sole and exclusive bargaining agent of the rank-and-file workers of respondent
company. Petitioner's Motion for Reconsideration was denied in an Order dated
November 18, 1996. 13

We shall now resolve the issue of whether the appeal filed by the petitioner was
rendered moot and academic by the subsequent certification election ordered by the
Med-Arbiter, won by FWU and which culminated in a CBA with private respondent.

Before this Court, petitioner contends:

Public respondent's ruling is anchored on his finding that there exists no pending
representation case since the petition for certification election filed by the petitioner
was dismissed by the Med-Arbiter. According to the public respondent, the legal effect

10

of the dismissal of the petition was to leave the playing field open without any legal
barrier or prohibition to any petitioner; thus, other legitimate labor organizations may
file an entirely new petition for certification election.

Republic of the Philippines

SUPREME COURT
Manila

We reject public respondent's ruling. The order of the Med-Arbiter dismissing

petitioner's petition for certification election was seasonably appealed. The appeal
stopped the holding of any certification election. Section 10, Rule V of the
Implementing Rules of Book V of the Labor Code is crystal clear and hardly needs any
interpretation.

SECOND DIVISION

G.R. No. 104556 March 19, 1998

Accordingly, there was an unresolved representation case at the time the CBA was
entered between FWU and private respondent. Following Section 4, Rule V of the
Implementing Rules of Book V of the Labor Code, such CBA cannot and will not
prejudice petitioner's pending representation case or render the same moot. 16 This
rule was applied in the case of Associated Labor Unions (ALU-TUCP)
v. Trajano 17 where we held that "[t]here should be no obstacle to the right of the
proper time, that is, within sixty (60) days prior to the expiration of the life of a certified
collective bargaining agreement . . ., not even by a collective agreement submitted
during the pendency of the representation case." Likewise, in Associated Labor
Unions (ALU) v. Ferrer-Calleja, 18 we held that a prematurely renewed CBA is not a bar
to the holding of a certification election.
Finally, we bewail private respondent's tenacious opposition to petitioner's certification
election petition. Such a stance is not conducive to industrial peace. Time and again,
we have emphasized that when a petition for certification election is filed by a
legitimate labor organization, it is good policy for the employer not to have any
participation or partisan interest in the choice of the bargaining representative. While
employers may rightfully be notified or informed of petitions of such nature, they
should not, however, be considered parties thereto with an inalienable right to oppose
it. An employer that involves itself in a certification election lends suspicion to the fact
that it wants to create a company union. Thus, inConsolidated Farms, Inc. II
v. Noriel, 19 we declared that "[o]n a matter that should be the exclusive concern of
labor, the choice of a collective bargaining representative, the employer is definitely an
intruder. His participation, to say the least, deserves no encouragement. This Court
should be the last agency to lend support to such an attempt at interference with a
purely internal affair of labor. . . . [While] it is true that there may be circumstances
where the interest of the employer calls for its being heard on the matter, . . . sound
policy dictates that as much as possible, management is to maintain a strictly handsoff policy. For it is does not, it may lend itself to the legitimate suspicion that it is partial
to one of the contending unions. That is repugnant to the concept of collective
bargaining. That is against the letter and spirit of welfare legislation intended to protect
labor and promote social justice. The judiciary then should be the last to look with
tolerance at such efforts of an employer to take part in the process leading to the free
and untrammeled choice of the exclusive bargaining representative of the workers."
IN VIEW WHEREOF, the instant petition is GRANTED. The assailed Resolution and
Order of the public respondent are set aside. The Bureau of Labor Relations is
ORDERED to hold a certification election in respondent company with petitioner as a
contending union. No costs.
SO ORDERED.

NATIONAL FEDERATION OF LABOR (NFL), petitioner,

vs.
THE SECRETARY OF LABOR OF THE REPUBLIC OF THE PHILIPPINES AND HIJO
PLANTATION INC., (HPI),respondents.

MENDOZA, J.:
Petitioner NFL (National Federation of Labor) was chosen the bargaining agent of rank-and-file
employees of the Hijo Plantation Inc. (HPI) in Mandaum, Tagum, Davao del Norte at a
certification election held on August 20, 1989. Protests filed by the company and three other
unions against the results of the election were denied by the Department of Labor and
Employment in its resolution dated February 14, 1991 but, on motion of the company (HPI), the
DOLE reconsidered its resolution and ordered another certification election to be held. The
DOLE subsequently denied petitioner NFL's motion for reconsideration.
The present petition is for certiorari to set aside orders of the Secretary of Labor and
Employment dated August 29, 1991, December 26, 1991 and February 17, 1992, ordering the
holding of a new certification election to be conducted in place of the one held on August 20,
1989 and, for this purpose, reversing its earlier resolution dated February 14, 1991 dismissing
the election protests of private respondent and the unions.
The facts of the case are as follows:
On November 12, 1988, a certification election was conducted among the rank-and-file
employees of the Hijo Plantation, Inc. resulting in the choice of "no union." However, on July 3,
1989, on allegations that the company intervened in the election, the Director of the Bureau of
Labor Relations nullified the results of the certification election and ordered a new one to be
held.
The new election was held on August 20, 1989 under the supervision of the DOLE Regional
Office in Davao City with the following results:
Total Votes cast
Associated Trade Unions (ATU)

1,012
39

11

RUST KILUSAN
National Federation of Labor (NFL)

5
876

Southern Philippines Federation of Labor

SANDIGAN

UFW

15

No Union

55

Invalid

13

The Trust Union Society and Trade Workers-KILUSAN (TRUST-Kilusan), the United Lumber and
General Workers of the Philippines (ULGWP), the Hijo Labor Union and the Hijo Plantation, Inc.
sought the nullification of the results of the certification election on the ground that it was
conducted despite the pendency of the appeals filed by Hijo Labor Union and ULGWP from the
order, dated August 17, 1989, of the Med-Arbiter denying their motion for intervention. On the
other hand, HPI claimed that it was not informed or properly represented at the pre-election
conference. It alleged that, if it was represented at all in the pre-election conference, its
representative acted beyond his authority and without its knowledge. Private respondent also
alleged that the certification election was marred by massive fraud and irregularities and that out
of 1,692 eligible voters, 913, representing 54% of the rank-and-file workers of private
respondent, were not able to vote, resulting in a failure of election.
On January 10, 1990, Acting Labor Secretary Dionisio dela Serna directed the Med-Arbiter,
Phibun D. Pura, to investigate the company's claim that 54% of the rank-and-file workers were
not able to vote in the certification election.
In his Report and Recommendation, dated February 9, 1990, Pura stated:
1. A majority of the rank-and-file workers had been disfranchised in the election of August 20,
1989 because of confusion caused by the announcement of the company that the election had
been postponed in view of the appeals of ULGWP and Hijo Labor Union (HLU) from the order
denying their motions for intervention. In addition, the election was held on a Sunday which was
non-working day in the company.
2. There were irregularities committed in the conduct of the election. It was possible that some
people could have voted for those who did not show up. The election was conducted in an open
and hot area. The secrecy of the ballot had been violated. Management representatives were
not around to identify the workers.
3. The total number of votes cast, as duly certified by the representation officer, did not tally with
the 41-page listings submitted to the Med-Arbitration Unit. The list contained 1,008 names which
were checked or encircled (indicating that they had voted) and 784 which were not, (indicating
that they did not vote), or a total of 1,792. but according to the representation officer the total
votes cast in the election was 1,012.

Med-Arbiter Pura reported that he interviewed eleven employees who claimed that they were not
able to vote and who were surprised to know that their names had been checked to indicate that
they had voted.
But NFL wrote a letter to Labor Secretary Ruben Torres complaining that it had not been
informed of the investigation conducted by Med-Arbiter Pura and so was not heard on its
evidence. For this reason, the Med-Arbiter was directed by the Labor Secretary to hear
interested parties.
The Med-Arbiter therefore summoned the unions. TRUST-Kilusan reiterated its petition for the
annulment of the results of the certification election. Hijo Labor Union manifested that it was
joining private respondent HPI's appeal, adopting as its own the documentary evidence
presented by the company, showing fraud in the election of August 20, 1989. On the other hand,
petitioner NFL reiterated its contention that management had no legal personality to file an
appeal because it was not a party to the election but was only a bystander which did not even
extend assistance in the election. Petitioner denied that private respondent HPI was not
represented in the pre-election conference, because the truth was that a certain Bartolo was
present on behalf of the management and he in fact furnished the DOLE copies of the list of
employees, and posted in the company premises notices of the certification election.
Petitioner NFL insisted that more than majority of the workers voted in the election. It claimed
that out of 1,692 qualified voters, 1,012 actually voted and only 680 failed to cast their vote. It
charged management with resorting to all kinds of manipulation to frustrate the election and
make the "Non Union" win.
In a resolution dated February 14, 1991, the DOLE upheld the August 20, 1989 certification
election. With respect to claim that election could not be held in view of the pendency of the
appeals of the ULGWP and Hijo Labor Union from the order of the Med-Arbiter denying their
motions for intervention, the DOLE said: 1
. . . even before the conduct of the certification election on 12 November 1988 which
was nullified, Hijo Labor Union filed a motion for interventions. The same was
however, denied for being filed unseasonably, and as a result it was not included as
one of the choices in the said election. After it has been so disqualified thru an order
which has become final and executory, ALU filed a second motion for intervention
when a second balloting was ordered conducted. Clearly, said second motion is
proforma and intended to delay the proceedings. Being so, its appeal from the order of
denial did not stay the election and the Med-Arbiter was correct and did not violate
any rule when he proceeded with the election even with the appeal. In fact, the MedArbiter need not rule on the motion as it has already been disposed of with finality.
The same is true with the motion for intervention of ULGWP. The latter withdrew as a
party to the election on September 1988 and its motion to withdraw was granted by
the Med-Arbiter on October motion for intervention filed before the conduct of a
second balloting where the choices has already been pre-determined.
Let it be stressed that ULGWP and HLU were disqualified to participate in the election
through valid orders that have become final and executory even before the first
certification election was conducted. Consequently, they may not be allowed to disrupt
the proceeding through the filing of nuisance motions. Much less are they possessed
of the legal standing to question the results of the second election considering that
they are not parties thereto.

12

The DOLE gave no weight to the report of the Med-Arbiter that the certification election was
marred by massive fraud and irregularities. Although affidavits were submitted showing that the
election was held outside the company premises and private vehicles were used as makeshift
precincts, the DOLE found that this was because respondent company did not allow the use of
its premises for the purpose of holding the election, company guards were allegedly instructed
not to allow parties, voters and DOLE representation officers to enter the company premises,
and notice was posted on the door of the company that the election had been postponed.
Nor was weight given to the findings of the Med-Arbiter that a majority of the rank-and-file
workers had been disfranchised in the August 20, 1989 election and that the secrecy of the
ballot had been violated, first, because the NFL was not given notice of the investigation nor the
chance to present its evidence to dispute this finding and, second, the Med Arbiter's report was
not supported by the minutes of the proceedings nor by any record of the interviews of the 315
workers. Moreover, it was pointed out that the report did not state the names of the persons
investigated, the questions asked and the answers given. The DOLE held that the report was
"totally baseless."
The resolution of February 14, 1991 concluded with a reiteration of the rule that the choice of the
exclusive bargaining representative is the sole concern of the workers. It said: "If indeed there
were irregularities committed during the election, the contending unions should have been the
first to complain considering that they are the ones which have interest that should be
protected." 2
Accordingly, the Labor Secretary denied the petition to annul the election filed by the ULGWP,
TRUST-KILUSAN, HLU and the HPI and instead certified petitioner NFL as the sole and
exclusive bargaining representative of the rank-and-file employees of private respondent HPI.
However, on motion of HPI, the Secretary of Labor, on August 29, 1991, reversed his resolution
of February 14, 1991. Petitioner NFL filed a motion for reconsideration but its motion was denied
in an order, dated December 26, 1991. Petitioner's second motion for reconsideration was
likewise denied in another order dated February 17, 1992. Hence, this petition.
First. Petitioner contends that certification election is the sole concern of the employees and the
employer is a mere bystander. The only instance wherein the employer may actively participate
is when it files a petition for certification election under Art. 258 of the Labor Code because it is
requested to bargain collectively. Petitioner says that this is not the case here and so the DOLE
should not have given due course to private respondent's petition for annulment of the results of
the certification election.
In his resolution of August 29, 1991, the Secretary of Labor said he was reversing his earlier
resolution because "workers of Hijo Plantation, Inc. have deluged this Office with their letterappeal, either made singly or collectively expressing their wish to have a new certification
election conducted" and that as a result "the firm position we held regarding the integrity of the
electoral exercise had been somewhat eroded by this recent declaration of the workers, now
speaking in their sovereign capacity."
It is clear from this, that what the DOLE Secretary considered in reversing its earlier rulings was
not the petition of the employer but the letter-appeals that the employees sent to his office
denouncing the irregularities committed during the August 20, 1989 certification election. The
petition of private respondent was simply the occasion for the employees to voice their protests
against the election. Private respondent HPI attached to its Supplemental Appeal filed on
September 5, 1989 the affidavits and appeals of more or less 784 employees who claimed that

they had been disfranchised, as a result of which they were not able to cast their votes at the
August 20, 1989 election. It was the protests of employees which moved the DOLE to
reconsider its previous resolution of February 14, 1991, upholding the election.
Nor is it improper for private respondent to show interest in the conduct of the election. Private
respondent is the employer. The manner in which the election was held could make the
difference between industrial strife and industrial harmony in the company. What an employer is
prohibited from doing is to interfere with the conduct of the certification election for the purpose
of influencing its outcome. But certainly an employer has an abiding interest in seeing to it that
the election is clean, peaceful, orderly and credible.
Second. The petitioner argues that any protest concerning the election should be registered and
entered into the minutes of the election proceedings before it can be considered. In addition, the
protest should be formalized by filing it within five (5) days. Petitioner avers that these
requirements are condition precedents in the filing of an appeal. Without these requisites the
appeal cannot prosper. It cites the following provisions of Book V, Rule VI of the Implementing
Rules and Regulations of the Labor Code:
Sec. 3. Representation officer may rule on any on-the-spot question. The
Representation officer may rule on any on-the-spot question arising from the conduct
of the election. The interested party may however, file a protest with the representation
officer before the close of the proceedings.
Protests not so raised are deemed waived. Such protests shall be contained in the
minutes of the proceedings.
Sec. 4. Protest to be decided in twenty (20) working days. Where the protest is
formalized before the med-arbiter within five (5) days after the close of the election
proceedings, the med-arbiter shall decide the same within twenty (20) working days
from the date of its formalization. If not formalized within the prescribed period, the
protest shall be deemed dropped. The decision may be appealed to the Bureau in the
same manner and on the same grounds as provided under Rule V.
In this case, petitioner maintains that private respondent did not make any protest regarding the
alleged irregularities (e.g., massive disfranchisement of employees) during the election. Hence,
the appeal and motions for reconsideration of private respondent HPI should have been
dismissed summarily.
The complaint in this case was that a number of employees were not able to cast their votes
because they were not properly notified of the date. They could not therefore have filed their
protests within five (5) days. At all events, the Solicitor General states, that the protests were not
filed within five (5) days, is a mere technicality which should not be allowed to prevail over the
workers' welfare. 3 As this Court stressed in LVN Pictures, Inc. v. Phil. Musicians Guild, 4 it is
essential that the employees must be accorded an opportunity to freely and intelligently
determine which labor organization shall act in their behalf. The workers in this case were
denied this opportunity. Not only were a substantial number of them disfranchised, there were, in
addition, allegations of fraud and other irregularities which put in question the integrity of the
election. Workers wrote letters and made complaints protesting the conduct of the election. The
Report of Med-Arbiter Pura who investigated these allegations found the allegations of fraud and
irregularities to be true.

13

In one case this Court invalidated a certification election upon a showing of disfranchisement,
lack of secrecy in the voting and bribery. 5 We hold the same in this case. The workers' right to
self-organization as enshrined in both the Constitution and Labor Code would be rendered
nugatory if their right to choose their collective bargaining representative were denied. Indeed,
the policy of the Labor Code favors the holding of a certification election as the most conclusive
way of choosing the labor organization to represent workers in a collective bargaining unit. 6 In
case of doubt, the doubt should be resolved in favor of the holding of a certification election.
Third. Petitioner claims that the contending unions, namely, the Association of Trade Union
(ATU), the Union of Filipino Workers (UFW), as well as the representation officers of the DOLE
affirmed the regularity of the conduct of the election and they are now estopped from questioning
the election.
In its comment, ATU-TUCP states,
. . . The representative of the Association of Trade Unions really attest to the fact that
we cannot really identify all the voters who voted on that election except some workers
who were our supporters in the absence of Hijo Plantation representatives. We also
attest that the polling precinct were not conducive to secrecy of the voters since it was
conducted outside of the Company premises. The precincts were (sic) the election
was held were located in a passenger waiting shed infront of the canteen across the
road; on the yellow pick-up; at the back of a car; a waiting shed near the Guard House
and a waiting shed infront of the Guard House across the road. Herein private
respondents also observed during the election that there were voters who dictated
some voters the phrase "number 3" to those who were casting their votes and those
who were about to vote. Number 3 refers to the National Federation of Labor in the
official ballot.
ATU-TUCP explains that it did not file any protest because it expected workers who had been
aggrieved by the conduct of the election would file their protest since it was in their interests that
they do so.
Fourth. Petitioner points out that the letter-appeals were written almost two years after the
election and they bear the same dates (May 7 and June 14, 1991); they are not verified; they do
not contain details or evidence of intelligent acts; and they do not explain why the writers failed
to vote. Petitioner contends that the letter-appeals were obtained through duress by the
company.
We find the allegations to be without merit. The records shows that as early as August 22 and
30, 1989, employees already wrote letters/affidavits/
manifestoes alleging irregularities in the elections and disfranchisement of workers. 7 As the
Solicitor General says in his Comment, 8 these affidavits and manifestoes, which were attached
as Annexes "A" to "CC" and Annexes "DD" to "DD-33" to private respondent's Supplemental
Petition of September 5, 1989 just 16 days after the August 20, 1989 election. It is not true
therefore that the employees slept on their rights.
As to the claim that letters dated May 7, 1991 and June 14, 1991 bear these same dates
because they were prepared by private respondent HPI and employees were merely asked to
sign them, suffice it to say that this is plain speculation which petitioner has not proven by
competent evidence.

As to the letters not being verified, suffice it to say that technical rules of evidence are not
binding in labor cases.
The allegation that the letters did not contain evidence of intelligent acts does not have merit.
The earlier letters 9of the workers already gave details of what they had witnessed during the
election, namely the open balloting (with no secrecy), and the use of NFL vehicles for polling
precinct. These letters sufficiently give an idea of the irregularities of the certification election.
Similarly, the letters containing the signatures of those who were not able to vote are sufficient.
They indicate that the writers were not able to vote because they thought the election had been
postponed, especially given the fact that the two unions had pending appeals at the time from
orders denying them the right to intervene in the election.
WHEREFORE, the petition for certiorari is DISMISSED and the questioned orders of the
Secretary of Labor and Employment are AFFIRMED.
SO ORDERED.
SECOND DIVISION

[G.R. No. 135806. August 8, 2002]

TOYOTA MOTORS PHILIPPINES CORPORATION LABOR UNION, petitioner, vs. TOYOTA

MOTOR PHILIPPINES CORPORATION EMPLOYEES AND WORKERS UNION,
TOYOTA MOTOR PHILIPPINES CORPORATION, and THE SECRETARY OF
LABOR AND EMPLOYMENT,respondents.
DECISION
BELLOSILLO, J.:
This is a petition for certiorari under Rule 65 of the Rules of Court, as amended, seeking to
set aside the Resolution of 5 June 1998 and the Order of 10 August 1998 both issued by
respondent Secretary of Labor and Employment in OS-A-5-58-98 (NCR-OD-M-9704-0311)
which affirmed the decision of the Med-Arbiter dated 24 February 1998. The assailed decision
dismissed both the Petition for Certification Election filed by respondent Toyota Motor Philippines
Corp. Employees and Workers Union (TMPCEWU) and the Petition-in-Intervention filed by
petitioner Toyota Motor Philippines Corp. Labor Union (TMPCLU).
On 24 April 1997 respondent TMPCEWU filed a Petition for Certification Election before
the Med-Arbitration Unit of the DOLE-National Capital Region (DOLE-NCR) seeking to represent
the rank-and-file employees of the manufacturing division from Levels 1 to 4 of Toyota Motor
Philippines Corp. (TMPC).
On 13 May 1997, while the case was pending hearing, petitioner TMPCLU claiming to be
the legitimate labor organization, filed a Motion to Intervene with Opposition to the Certification
Election praying that it be allowed to intervene and, thereafter, the petition by TMPCEWU be
denied for lack of merit. It claimed that the petition was premature due to an earlier resolution by
the Secretary of Labor ordering the conduct of a certification election among the rank-and-file

14

employees of TMPC represented by petitioner which was the subject of certiorari proceedings
before the Supreme Court and still awaiting final resolution at the time; and, that the collective
bargaining unit which respondent TMPCEWU sought to represent violated the "single or
employer" unit policy since it excluded the rank-and-file employees in the other divisions and
departments in respondent TMPC.[1]
In its motion petitioner TMPCLU outlined the antecedent events prior to the TMPCEWU's
filing of its Petition for Certification Election on 24 April 1997 thus 1. On 26 November 1992 it (TMPCLU) filed a petition for certification election before Med-Arbiter
Paterno D. Adap, docketed as NCR-OD-M-9211-053;
2. On 8 March 1993 Med-Arbiter Adap dismissed TMPCLU's petition on the ground that the
labor organization's membership was composed of supervisory and rank-and-file employees in
violation of Art. 245 of the Labor Code, and that at the time of the filing of its petition, TMCPLU
had not even acquired legal personality yet;
3. On appeal, the Secretary of Labor, in a Resolution dated 9 November 1993 signed by
Undersecretary Bienvenido E. Laguesma, set aside the Med-Arbiter's Order and directed the
holding of a certification election among the regular rank-and-file employees of TMPC. In setting
aside the assailed order, the Office of the Secretary argued that:
Contrary to the allegation of herein respondent-appellee, petitioner-appellant was already a
legitimate labor organization at the time of the filing of the petition on 26 November
1992. Records show that on 24 November 1992 or two (2) days before the filing of the said
petition, it was issued a certificate of registration.
4. Acting on TMPC's motion for reconsideration the Secretary of Labor set aside his earlier
resolution and ordered the remand of the case to the Med-Arbiter concluding that the issues
raised by TMPC both on appeal and its motion for reconsideration were factual issues requiring
further hearing and production of evidence;
5. Pursuant to the order above-mentioned, the Med-Arbiter on 28 September 1994 dismissed
TMPCLU's petition for certification election for failure of petitioner to acquire legal personality at
the time of the filing of the said petition;
6. The motion for reconsideration filed by TMPCLU before the Secretary of Labor, which was
treated as an appeal from the order of the Med-Arbiter dated 28 September 1994, was granted
and the said order was set aside. In lieu thereof, a new order was issued giving due course to
the petition and directing the conduct of a certification election among the rank-and-file
employees of TMPC;
7. The Secretary of Labor, in his order dated 14 July 1995, denied for lack of merit the motion for
reconsideration filed by TMPC;
8. On 20 April 1996 the Secretary of Labor issued a new resolution directing the conduct of a
certification election among the rank-and-file employees of TMPC; and
9. TMPC lodged a special civil action for certiorari before the Supreme Court assailing the 20
April 1996 Resolution of the Secretary of Labor; and on 19 February 1997, the Supreme
Court[2] set aside the assailed Resolution of the Secretary of Labor and reinstated the Order of

the Med-Arbiter dated 28 September 1994. In its decision, the Supreme Court ruled that since
TMPCLU's membership list contained the names of at least twenty-seven (27) supervisory
employees in Level Five positions, "the union could not, prior to purging itself of its supervisory
employee members, attain the status of a legitimate labor organization. Not being one, it cannot
possess the requisite personality to file a petition for certification election."
At the time respondent TMPCEWU filed its Petition for Certification Election on 24 April
1997 the decision of the Supreme Court had not ripened into a final and executory
judgment. Thus petitioner invoked as among the grounds for opposition thereto in its Motion to
Intervene with Opposition to the Petition for Certification Election that the "pending proceeding
before the Supreme Court may be said to be a pre-judicial question which should be resolved
first before the instant petition can prosper."[3]
TMPC also filed a similar comment on 9 June 1997. Hence, on 2 July 1997, the MedArbiter ordered the provisional dismissal of TMPCEWU's Petition for Certification
Election pending a final ruling by the Supreme Court on the Petition for Certification Election.
On 3 June 1997 the decision of the Supreme Court dated 19 February 1997 became final
and executory.
In view of respondent TMPCEWU's revival of its Petition for Certification Election,
petitioner also filed on 30 October 1997 its Petition-in-Intervention[4] alleging that (a) it was
representing only the rank-and-file employees; (b) it enjoys the support of the regular rank-andfile workers at large in TMPC, an unorganized establishment, and not only among the rank-andfile employees in the manufacturing division thereof; (c) while respondent TMPCEWU professed
itself as a legitimate labor organization, there was serious doubt on such claim inasmuch as
there was a pending petition for the cancellation of its certification of registration on the ground
of fraud; (d) respondent TMPCEWU's representation of the rank-and-file employees, Levels 1 to
4, within the manufacturing division only to the exclusion of those in the other departments and
divisions violated the "single or employer" unit policy; and, (e) the establishment of the proposed
bargaining unit in the manufacturing division composed of employees from Levels 1 to 4, should
respondent's petition be allowed, would induce the proliferation of unions in a single employer.[5]
On 24 February 1998 the Med-Arbiter rendered a decision dismissing for lack of merit
TMPCEWU's Petition for Certification Election, since it failed to include all rank-and-file
employees from Levels 1 to 4 in other departments of TMPC in violation of the "one-union in
one-company" policy and likewise dismissing TMPCLU's Petition-in-Intervention for lack of legal
personality.[6] Anent the issue on whether TMPCLU has the legal personality to file the Petitionin-Intervention, the Med-Arbiter explained thus The uncontroverted fact in this case is that at the time intervenor TMPCLU filed its application for
registration and subsequently thereafter was issued a certificate of registration on November 24,
1992 (Annex A, Intervenor's petition-in-intervention), its union membership is (sic) composed of
supervisory and rank-and-file employees.
From this we could infer that the registration certificate issued by the Department of Labor and
Employment is void ab initio because at the time of the issuance the constitution of intervenor
union TMPCLU is (sic) a mixture of supervisory and rank-and-file employees as per finding of
fact of Med-Arbiter Paterno Adap in his Order dated March 8, 1993 (Annex A, respondent's
Answer to Petition-in-Intervention).
On 14 March 1998, dissatisfied with the unfavorable decision, petitioner appealed to the
Secretary of Labor contending that contrary to the finding of the Med-Arbiter it had the legal
personality to intervene in the certification election proceedings as shown by its Certificate of
Registration No. NCR-UR-11-996-92.

15

In a Resolution dated 5 June 1998, the Secretary of Labor justified his affirmance of the
Med-Arbiter's decision in this wise -[7]
On the first ground raised on appeal, it is true that the employer is a mere by-stander during the
conduct of a certification election. Prior to the election, however, the employer is not precluded
from ascertaining the legitimacy of the union in order that it can be assured that the union it will
be dealing with is a duly registered labor organization which legally represents the bargaining
unit sought to be represented. There is therefore no error in allowing the employer to question
the status of appellant as in the case at bar.
On the second issue, it had earlier been finally ruled by the Supreme Court (G.R. No 121084)
involving herein employer and appellant that since the bargaining unit of the rank-in-file which
TMPCLU is seeking to represent is a mixture of supervisory employees which is prohibited
under Article 245 of the Labor Code, as amended, the union prior to purging itself of supervisory
employees-members, had not attained the status of a legitimate labor organization. Appellant
now simply asserts that it has purged its membership of supervisory employees and therefore is
now a legitimate labor organization of the rank-and-file employees. Appellant has not however
shown that it registered anew because admittedly some of its officers are supervisory
employees. The need to register anew is necessary and the purging by itself of its officers who
are holding supervisory position is imperative. One of the requirements for registration is the
submission of the list of officers. Under the circumstances obtaining, appellant has not as yet
attained the status of a legitimate labor organization. It has therefore no legal authority to
oppose the instant petition.
On 10 August 1998 the Secretary issued an Order denying petitioner's motion for
reconsideration; hence, petitioner now comes to us assailing the aforementioned Resolution and
Order of the Secretary of Labor arguing that First. At the time it filed its Petition-in-Intervention on 30 October 1997 it was clothed with
legal personality as a bona fide labor union. Petitioner contended that when it filed the Motion to
Intervene with Opposition to the Petition for Certification Election filed by TMPCEWU and
its Petition-in-Intervention, it did have a Certificate of Registration No. NCR-UR-1199692 which
was based on its compliance with the requisites for union registration. Hence, it had the legal
personality when it filed the Petition-in-Interventionand had all the rights as well as obligations of
a legitimate labor organization. There was therefore no necessity for petitioner to register anew
when it was already a registered labor organization.
Second. The Med-Arbiter had no authority to declare that petitioner's certificate of
registration was void ab initio in a certification election proceeding; neither was the
representation proceedings before the Med-Arbiter the appropriate remedy to ventilate such
issue.
To buttress its stance, petitioner drew attention to the fact that the Implementing Rules of
the Labor Code of the Philippines, particularly Book V, Rule 1, Sec. 1 (kk) thereof, and the MedArbiter's authority were limited to hearing, conciliating, mediating and deciding representation
cases, internal union and intra-union disputes. Considering that the case before the Med-Arbiter
was a Petition for Certification Election by respondent TMPCEWU, the only task of the MedArbiter was to determine the employees' choice of their bargaining representative, and nothing
more.
Third. The Supreme Court in Toyota Motor Philippines v. Toyota Motor Corporation
Philippines Labor Union and Secretary of Labor,[8] limited the finding of petitioner's lack of
personality only to the time when it filed its Petition for Certification Election.

In this regard, petitioner decries the decision of the Secretary of Labor affirming that of the
Med-Arbiter on the basis of the ruling in the aforecited case. It must be stressed, according to
petitioner, that contrary to the interpretation given by the Med-Arbiter as affirmed by the
Secretary of Labor, the Supreme Court's ruling that it did not have legal personality was limited
to the time when it filed its Petition for Certification Election on 26 November 1992. Neither did
the Supreme Court, in that case, rule on the validity of the certificate of registration.
More importantly, according to petitioner, it was erroneous for the Secretary to assume
that inasmuch as petitioner failed to purge itself of its supervisory employee-members when it
filed its previous Petition for Certification Election on 26 November 1992, it could not have
possessed the appropriate legal personality when it filed its Petition-in-Intervention on 30
October 1997. The truth of the matter is that with the purging completed, absent any finding of
the Supreme Court or any other court or tribunal declaring the invalidity of the certificate of
registration, petitioner possessed the legal personality when it filed its Petition-in-Intervention.
This Court is called upon to resolve the issue of whether petitioner had legal personality
on 30 October 1997 when it filed its Petition-in-Intervention. Corollary thereto, should petitioner
register anew despite its alleged purging of the supervisory employee-members as directed by
this Court in Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor
Union[9] and the issuance in its favor of a certificate of registration after it was found to have
violated Art. 245 of the Labor Code?
To find solution to the question in the instant case, we need only refer to the earlier case
of Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union
and the Secretary of Labor and Employment,[10] which sprang from a Petition for Certification
Election filed by TMPCLU among the rank-and-file employees of TMPC. On 8 March 1993,
however, its petition was dismissed by the Med-Arbiter for the reason that the labor
organization's membership was composed of supervisory and rank-and-file employeemembers. On appeal, the Secretary of Labor remanded the case to the Med-Arbiter upon his
finding that factual issues remained unresolved. Pursuant to the order of the Secretary of Labor,
the Med-Arbiter, in his decision dated 28 September 1994, dismissed TMPCLU's Petition for
Certification Election on the basis of the following factual findings:
(T)he (in)controvertible fact is that petitioner could not have been issued its Certificate of
Registration on November 24, 1992 when it applied for registration only on November 23, 1992
as shown by the official receipt of payment of filing fee. As Enrique Nalus, Chief LEO, this office,
would attest in his letter dated September 8, 1994 addressed to Mr. Porfirio T. Reyes,
Industrial Relations Officer of Respondent company, in response to a query posed by the latter,
it is unlikely that an application for registration is approved on the date that it is filed or the day
thereafter as the processing course had to pass through routing, screening, and assignment,
evaluation, review and initialing, and approval/disapproval procedure, among others, that a 30day period is provided for under the Labor Code for this purpose, let alone opposition thereto by
interested parties which must be also given due course."
Another evidence which petitioner presented is the "Union Registration 1992 Logbook of
IRD" and the entry date 25 November 1992 as allegedly the date of the release of its
registration certificate. On the other hand, respondent company presented a certified true copy
of an entry on page 265 of the Union Registration Logbook showing the pertinent facts about
petitioner but which did not show that petitioner's registration was issued on or before 26
November 1992.
The Med-Arbiter also found that TMPCLU had not acquired legal personality for the
reason that its composition, being a mixture of supervisory and rank-and-file employees, was in
direct violation of Art. 245 of the Labor Code.[11]

16

Although there is a divergence of factual backdrops between Toyota Motor Philippines

Corporation v. Toyota Motor Philippines Corporation Labor Union and the Secretary of Labor
and Employment[12] and the instant petition in the sense that in the former the filing of a Petition
for Certification Election by petitioner gave rise to the controversy while the present case arose
from the filing of a Petition-in-Intervention, the bottom-line issue in both cases nonetheless
involves the legitimacy of petitioner TMPCLU to file petitions.

SO ORDERED.
E. BARS TO CERTIFICATION OF ELECTION
Republic of the Philippines
SUPREME COURT
Manila

We recall that in the first Toyota case, although there was no categorical pronouncement
on the validity of petitioner's certificate of registration considering that we deemed it entirely
irrelevant in the light of the finding that petitioner was not entirely a rank-and-file labor
organization, we sustained however in the same decision the entire factual findings of the MedArbiter when we observed 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. In any case, the factual issue, albeit ignored by
the public respondents assailed Resolution, was adequately threshed out in the Med-Arbiters
September 28, 1994 Order (underscoring supplied).
In effect therefore, we already impressed our stamp of approval on the factual findings of
the Med-Arbiter in his 28 September 1994 decision, i.e., that petitioner had no valid certificate of
registration and therefore no legal personality to file the Petition for Certification Election and in
the absence of any attempt on its part to rectify the legal infirmity, likewise the disputed Petitionin-Intervention.
It is thus fatuous on petitioner's part to resurrect the issue of legitimacy in the instant case
notwithstanding our earlier ruling sustaining the factual findings of the Med-Arbiter.
We cannot also accede to petitioner's submission that the issuance of a certificate of
registration in its favor is an adequate and unassailable proof that it possesses the requisite
legal personality to file a Petition for Certification Election. Not necessarily. As we emphasized
in Progressive Development Corp. - Pizza Hut v. Laguesma,[13] if a labor organizations
application for registration is vitiated by falsification and serious irregularities, a labor
organization should be denied recognition as a legitimate labor organization. And if a certificate
of registration has been issued, the propriety of its registration could be assailed directly through
cancellation of registration proceedings in accordance with Arts. 238 and 239 of the Labor Code,
or indirectly, by challenging its petition for the issuance of an order for certification election. We
believe the procedural requirements to impugn the registration by petitioner were more than
adequately complied with as shown in the 1997 case of Toyota Motor Philippines Corporation v.
Toyota Motor Philippines Corporation Labor Union.[14]
There is no reason to belabor the primordial importance of strictly complying with the
registration requirements of the Labor Code. As we have explained in a long line of cases, the
activities of labor organizations, associations and unions are impressed with public interest,
hence, must be protected.
WHEREFORE the petition is DISMISSED for lack of merit. Accordingly, the assailed
Resolution dated 5 June 1998 and Order dated 10 August 1998 of the Secretary of Labor and
Employment affirming the decision of the Med-Arbiter dated 24 February 1998 which dismissed
both the Petition for Certification Election filed by respondent Toyota Motor Philippines Corp.
Employees and Workers Union (TMPCEWU) and the Petition-in-Intervention of petitioner Toyota
Motor Philippines Corp. Labor Union (TMPCLU) are AFFIRMED.

FIRST DIVISION

G.R. No. 118915 February 4, 1997

CAPITOL MEDICAL CENTER OF CONCERNED EMPLOYEES-UNIFIED FILIPINO SERVICE
WORKERS, (CMC-ACE-UFSW), petitioners,
vs.
HON. BIENVENIDO E. LAGUESMA, Undersecretary of the Department of Labor and
Employment; CAPITOL MEDICAL CENTER EMPLOYEES ASSOCIATION-ALLIANCE OF
FILIPINO WORKERS AND CAPITOL MEDICAL CENTER INCORPORATED AND DRA.
THELMA CLEMENTE, President, respondents.

HERMOSISIMA, JR., J.:

This petition for certiorari and prohibition seeks to reserves and set aside the Order dated
November 18, 1994 of public respondent Bienvenido E. Laguesma, Undersecretary of the
Department of Labor and Employment in Case No. OS.-A-136-94 1 which dismissed the petition
for certification election filed by petitioner for lack of merit and further directed private respondent
hospital to negotiate a collective bargaining agreement with respondent union, Capitol Medical
Center Employees Association-Alliance of Filipino Workers.
The antecedent facts are undisputed.
On February 17, 1992, Med-Arbiter Rasidali C. Abdullah issued an Order which granted
respondent union's petition for certification election among the rank-and-file employees of the
Capitol Medical Center. 2 Respondent CMC appealed the Order to the Office of the Secretary by
questioning the legal status of respondent union's affiliation with the Alliance of Filipino Workers
(AFW). To correct any supposed infirmity in its legal status, respondent union registered itself
independently and withdrew the petition which had earlier been granted. Thereafter, it filed
another petition for certification election.
On May 29, 1992, Med-Arbiter Manases T. Cruz issued an order granting the petition for
certification election. 3Respondent CMC again appealed to the Office of the Secretary which
affirmed 4 the Order of the Med-Arbiter granting the certification election.
On December 9, 1992, elections were finally held with respondent union garnering 204 votes,
168 in favor of no union and 8 spoiled ballots out of a total of 380 votes cast. Thereafter, on

17

January 4, 1993, Med-Arbiter Cruz issued an Order certifying respondent union as the sole and
exclusive bargaining representative of the rank and file employees at CMC. 5
Unsatisfied with the outcome of the elections, respondent CMC again appealed to the Office of
the Secretary of Labor which appeal was denied on February 26, 1993. 6 A subsequent motion
for reconsideration filed by respondent CMC was likewise denied on March 23, 1993. 7
Respondent CMC's basic contention was the supposed pendency of its petition for cancellation
of respondent union's certificate of registration in Case No. NCR-OD-M-92211-028. In the said
case, Med-Arbiter Paterno Adap issued an Order dated February 4, 1993 which declared
respondent union's certificate of registration as null and void. 8 However, this order was reversed
on appeal by the Officer-in-Charge of the Bureau of Labor Relations in her Order issued on April
13, 1993. The said Order dismissed the motion for cancellation of the certificate of registration of
respondent union and declared that it was not only a bona fide affiliate or local of a federation
(AFW), but a duly registered union as well. Subsequently, this case reached this Court in Capitol
Medical Center, Inc. v. Hon. Perlita Velasco, G.R. No. 110718, where we issued a Resolution
dated December 13, 1993, dismissing the petition of CMC for failure to sufficiently show that
public respondent committed grave abuse of discretion. 9 The motion for reconsideration filed by
CMC was likewise denied in our Resolution dated February 2, 1994. 10 Thereafter, on March 23,
1994, we issued an entry of judgment certifying that the Resolution dated December 13, 1993
has become final and executory. 11
Respondent union, after being declared as the certified bargaining agent of the rank-and-file
employees of respondent CMC by Med-Arbiter Cruz, presented economic proposals for the
negotiation of a collective bargaining agreement (CBA). However, respondent CMC contended
that CBA negotiations should be suspended in view of the Order issued on February 4, 1993 by
Med-Arbiter Adap declaring the registration of respondent union as null and void. In spite of the
refusal of respondent CMC, respondent union still persisted in its demand for CBA negotiations,
claiming that it has already been declared as the sole and exclusive bargaining agent of the
rank-and-file employees of the hospital.
Due to respondent CMC's refusal to bargain collectively, respondent union filed a notice of strike
on March 1, 1993. After complying with the other legal requirements, respondent union staged a
strike on April 15, 1993. On April 16, 1993, the Secretary of Labor assumed jurisdiction over the
case and issued an order certifying the same to the National Labor Relations Commission for
compulsory arbitration where the said case is still pending. 12
It is at this juncture that petitioner union, on March 24, 1994, filed a petition for certification
election among the regular rank-and-file employees of the Capitol Medical Center Inc. It alleged
in its petition that: 1) three hundred thirty one (331) out of the four hundred (400) total rank-andfile employees of respondent CMC signed a petition to conduct a certification election; and 2)
that the said employees are withdrawing their authorization for the said union to represent them
as they have joined and formed the union Capitol Medical Center Alliance of Concerned
Employees (CMC-ACE). They also alleged that a certification election can now be conducted as
more that 12 months have lapsed since the last certification election was held. Moreover, no
certification election was conducted during the twelve (12) months prior to the petition, and no
collective bargaining agreement has as yet been concluded between respondent union and
respondent CMC despite the lapse of twelve months from the time the said union was voted as
the collective bargaining representative.
On April 12, 1994, respondent union opposed the petition and moved for its dismissal. It
contended that it is the certified bargaining agent of the rank-and-file employees of the Hospital,
which was confirmed by the Secretary of Labor and Employment and by this Court. It also

alleged that it was not remiss in asserting its right as the certified bargaining agent for it
continuously demanded the negotiation of a CBA with the hospital despite the latter's avoidance
to bargain collectively. Respondent union was even constrained to strike on April 15, 1993,
where the Secretary of Labor intervened and certified the dispute for compulsory arbitration.
Furthermore, it alleged that majority of the signatories who supported the petition were
managerial and confidential employees and not members of the rank-and-file, and that there
was no valid disaffiliation of its members, contrary to petitioner's allegations.
Petitioner, in its rejoinder, claimed that there is no legal impediment to the conduct of a
certification election as more than twelve (12) months had lapsed since respondent union was
certified as the exclusive bargaining agent and no CBA was as yet concluded. It also claimed
that the other issues raised could only be resolved by conducting another certification election.
In its surrejoinder, respondent union alleged that the petition to conduct a certification election
was improper, immoral and in manifest disregard of the decisions rendered by the Secretary of
Labor and by this Court. It claimed that CMC employed "legal obstructionism's" in order to let
twelve months pass without a CBA having been concluded between them so as to pave the way
for the entry of petitioner union.
On May 12, 1994, Med-Arbiter Brigida Fadrigon, issued an Order granting the petition for
certification election among the rank and file
employees. 13 It ruled that the issue was the majority status of respondent union. Since no
certification election was held within one year from the date of issuance of a final certification
election result and there was no bargaining deadlock between respondent union and the
employees that had been submitted to conciliation or had become the subject of a valid notice of
strike or lock out, there is no bar to the holding of a certification election. 14
Respondent union appeared from the said Order, alleging that the Med-Arbiter erred in granting
the petition for certification election and in holding that this case falls under Section 3, Rule V
Book V of the Rules Implementing the Labor Code. 15 It also prayed that the said provision must
not be applied strictly in view of the facts in this case.
Petitioner union did not file any opposition to the appeal.
On November 18, 1994, public respondent rendered a Resolution granting the appeal. 16 He
ratiocinated that while the petition was indeed filed after the lapse of one year form the time of
declaration of a final certification result, and that no bargaining deadlock had been submitted for
conciliation or arbitration, respondent union was not remiss on its right to enter into a CBA for it
was the CMC which refused to bargain collectively. 17
CMC and petitioner union separately filed motions for reconsideration of the said Order.
CMC contended that in certification election proceedings, the employer cannot be ordered to
bargain collectively with a union since the only issue involved is the determination of the
bargaining agent of the employees.
Petitioner union claimed that to completely disregard the will of the 331 rank-and-file employees
for a certification election would result in the denial of their substantial rights and interests.
Moreover,it contended that public respondent's "indictment" that petitioner "capitalize (sic) on the
ensuing delay which was caused by the Hospital, . . ." was unsupported by the facts and the
records.

18

On January 11, 1995, public respondent issued a Resolution which denied the two motions for
reconsideration hence this petition. 18

not commit grave abuse of discretion when it ruled in respondent union's favor since the delay in
the forging of the CBA could not be attributed to the fault of the latter.

The pivotal issue in this case is whether or not public respondent committed grave abuse of
discretion in dismissing the petition for certification election, and in directing the hospital to
negotiate a collective bargaining agreement with the said respondent union.

A scrutiny of the records will further reveal that after respondent union was certified as the
bargaining agent of CMC, it invited the employer hospital to the bargaining table by submitting
its economic proposal for a CBA. However, CMC refused to negotiate with respondent union and
instead challenged the latter's legal personality through a petition for cancellation of the
certificate of registration which eventually reached this Court. The decision affirming the legal
status of respondent union should have left CMC with no other recourse but to bargain
collectively; but still it did not. Respondent union was left with no other recourse but to file a
notice of strike against CMC for unfair labor practice with the National Conciliation and Mediation
Board. This eventually led to a strike on April 15, 1993.

Petitioner alleges that public respondent Undersecretary Laguesma denied it due process when
it ruled against the holding of a certification election. It further claims that the denial of due
process can be gleaned from the manner by which the assailed resolution was written, i.e.,
instead of the correct name of the mother federation UNIFIED, it was referred to as UNITED;
and that the respondent union's name CMCEA-AFW was referred to as CMCEA-AFLO.
Petitioner maintains that such errors indicate that the assailed resolution was prepared with
"indecent haste."
We do not subscribe to petitioner's contention.
The errors pointed to by petitioner can be classified as mere typographical errors which cannot
materially alter the substance and merit of the assailed resolution.
Petitioner cannot merely anchor its position on the aforementioned erroneous' names just to
attain a reversal of the questioned resolution. As correctly observed by the Solicitor General,
petitioner is merely "nit-picking vainly trying to make a monumental issue out of a negligible error
of the public respondent." 19
Petitioner also assails public respondents' findings that the former "capitalize (sic) on the
ensuing delay which was caused by the hospital and which resulted in the non-conclusion of a
CBA within the certification year.'' 20 It further argues that the denial of its motion fro a fair hearing
was clear case of denial of its right to due process.
Such contention of petitioner deserves scant consideration.
A perusal of the record shows that petitioner failed to file its opposition to oppose the grounds for
respondent union's appeal.
It was given an opportunity to be heard but lost it when it refused to file an appellee's
memorandum.
Petitioner insists that the circumstances prescribed in Section 3, Rule V, Book V Of the Rules
Implementing the Labor Code where a certification election should be conducted, viz: (1) that
one year had lapsed since the issuance of a final certification result; and (2) that there is no
bargaining deadlock to which the incumbent or certified bargaining agent is a party has been
submitted to conciliation or arbitration, or had become the subject of a valid notice of strike or
lockout, are present in this case. It further claims that since there is no evidence on record that
there exists a CBA deadlock, the law allowing the conduct of a certification election after twelve
months must be given effect in the interest of the right of the workers to freely choose their sole
and exclusive bargaining agent.
While it is true that, in the case at bench, one year had lapsed since the time of declaration of a
final certification result, and that there is no collective bargaining deadlock, public respondent did

Petitioner union on the other hand, after this Court issued an entry of judgment on March 23,
1994, filed the subject petition for certification election on March 24, 1994, claiming that twelve
months had lapsed since the last certification election.
Was there a bargaining deadlock between CMC and respondent union, before the filing of
petitioner of a petition for certification election, which had been submitted to conciliation or had
become the subject of a valid notice of strike or lockout?
In the case of Divine Word University of Tacloban v. Secretary of Labor and Employment, 21 we
had the occasion to define what a deadlock is, viz:\
A "deadlock" is . . . the counteraction of things producing entire stoppage; . .
. . There is a deadlock when there is a complete blocking or stoppage
resulting from the action of equal and opposed forces . . . . The word is
synonymous with the word impasse, which . . "presupposes reasonable
effort at good faith bargaining which, despite noble intentions, does not
conclude in agreement between the parties."
Although there is no "deadlock" in its strict sense as there is no "counteraction" of forces present
in this case nor "reasonable effort at good faith bargaining," such can be attributed to CMC's
fault as the bargaining proposals of respondent union were never answered by CMC. In fact,
what happened in this case is worse than a bargaining deadlock for CMC employed all legal
means to block the certification of respondent union as the bargaining agent of the rank-and-file;
and use it as its leverage for its failure to bargain with respondent union. Thus, we can only
conclude that CMC was unwilling to negotiate and reach an agreement with respondent union.
CMC has not at any instance shown willingness to discuss the economic proposals given by
respondent union. 22
As correctly ratiocinated by public respondent, to wit:
For herein petitioner to capitalize on the ensuing delay which was caused by
the hospital and which resulted in the non-conclusion of a CBA within the
certification year, would be to negate and render a mockery of the
proceedings undertaken before this Department and to put an unjustified
premium on the failure of the respondent hospital to perform its duty to
bargain collectively as mandated in Article 252 of the Labor Code, as
amended, which states".

19

"Article 252. Meaning of duty to bargain collectively

the duty to bargain collectively means the performance
of a mutual obligation to meet and convene promptly
and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours
of work and all other terms and conditions of
employment including proposals for adjusting any
grievance or questions arising under such agreement
and executing a contract incorporating such
agreements if requested by either party but such duty
does not compel any party to agree to a proposal or to
make any concession."
The duly certified bargaining agent, CMCEA-AFW, should not be made to
further bear the brunt flowing from the respondent hospital's reluctance and
thinly disguised refusal to bargain. 23

should be considered as similar in nature to a "bargaining deadlock" when no certification

election could be held. This is also to make sure that no floodgates will be opened for the
circumvention of the law by unscrupulous employers to prevent any certified bargaining agent
from negotiating a CBA. Thus, Section 3, Rule V, Book V of the Implement Rules should be
interpreted liberally so as to include a circumstance, e.g. where a CBA could not be concluded
due to the failure of one party to willingly perform its duty to bargain collectively.
The order for the hospital to bargain is based on its failure to bargain collectively with
respondent union.
WHEREFORE, the Resolution dated November 18, 1994 of public respondent Laguesma is
AFFIRMED and the instant petition is hereby DISMISSED.
SO ORDERED
Republic of the Philippines
SUPREME COURT
Manila

If the law proscribes the conduct of a certification election when there is a bargaining deadlock
submitted to conciliation or arbitration, with more reason should it not be conducted if, despite
attempts to bring an employer to the negotiation table by the "no reasonable effort in good faith"
on the employer certified bargaining agent, there was to bargain collectively.
In the case of Kaisahan ng Manggagawang Pilipino vs. Trajano 201 SCRA 453 (1991), penned
by Chief Justice Andres R. Narvasa, the factual milieu of which is similar to this case, this Court
allowed the holding of a certification election and ruled that the one year period known as the
"certification year" has long since expired. We also ruled, that:
. . . prior to the filing of the petition for election in this case, there was no
such "bargaining deadlock . . (which) had been submitted to conciliation or
arbitration or had become the subject of a valid notice of strike or lockout."
To be sure, there are in the record assertions by NAFLU that its attempts to
bring VIRON to the negotiation table had been unsuccessful because of the
latter's recalcitrance, and unfulfilled promises to bargain collectively; but
there is no proof that it had taken tiny action to legally coerce VIRON to
comply with its statutory duty to bargain collectively. It could have charged
VIRON with unfair labor practice; but it did not. It could have gone on a
legitimate strike in protest against VIRON's refusal to bargain collectively
and compel it to do so; but it did not. There are assertions by NAFLU, too,
that its attempts to bargain collectively had been delayed by continuing
challenges to the resolution pronouncing it the sole bargaining
representative in VIRON; but there is no adequate substantiation thereof, or
of how it did in fact prevent initiation of the bargaining process between it
and VIRON. 24
Although the statements pertinent to this case are merely obiter, still the fact remains that in
the Kaisahan case, NAFLU was counselled by this Court on the steps that it should have
undertaken to protect its interest, but which it failed to do so.
This is what is strikingly different between the Kaisahan case and the case at bench for in the
latter case, there was proof that the certified bargaining agent, respondent union, had taken an
action to legally coerce the employer to comply with its statutory duty to bargain collectively, i.e.,
charging the employer with unfair labor practice and conducting a strike in protest against the
employer's refusal to bargain. 25 It is only just and equitable that the circumstances in this case

FIRST DIVISION

G.R. No. 89609 January 27, 1992

NATIONAL CONGRESS OF UNIONS IN THE SUGAR INDUSTRY OF THE PHILIPPINES
(NACUSIP)-TUCP,petitioner,
vs.
HON. PURA FERRER-CALLEJA, in her capacity as Director of the Bureau of Labor
Relations; and the NATIONAL FEDERATION OF SUGAR WORKERS (NFSW)-FGTKMU, respondents.
Zoilo V. De la Cruz, Jr., Beethoven R. Buenaventura and Pedro E. Jimenez for petitioner.
Manlapao, Drilon, Ymballa and Chavez for private respondent.

MEDIALDEA, J.:
This is a petition for certiorari seeking the nullification of the resolution issued by the respondent
Director of the Bureau of Labor Relations Pura Ferrer-Calleja dated June 26, 1989 setting aside
the order of the Med-Arbiter dated February 8, 1989 denying the motion to dismiss the petition
and directing the conduct of a certification election among the rank and file employees or
workers of the Dacongcogon Sugar and Rice Milling Co. situated at Kabankalan, Negros
Occidental.
The antecedent facts giving rise to the controversy at bar are as follows:

20

Petitioner National Congress of Unions in the Sugar Industry of the Philippines (NACUSIPTUCP) is a legitimate national labor organization duly registered with the Department of Labor
and Employment. Respondent Honorable Pura Ferrer-Calleja is impleaded in her official
capacity as the Director of the Bureau of Labor Relations of the Department of Labor and
Employment, while private respondent National Federation of Sugar Workers (NFSW-FGT-KMU)
is a labor organization duly registered with the Department of Labor and Employment.
Dacongcogon Sugar and Rice Milling Co., Inc. (Dacongcogon) based in Kabankalan, Negros
Occidental employs about five hundred (500) workers during milling season and about three
hundred (300) on off-milling season.

among the rank and file employees/workers of the Dacongcogon Sugar and
Rice Milling Co., situated at Kabankalan, Neg. Occ., be conducted with the
following choices:
(1) National Congress of Unions in the Sugar Industry
of the Philippines (NACUSIP-TUCP);
(2) National Federation of Sugar Workers (NFSW);
(3) No Union.

On November 14, 1984, private respondent NFSW-FGT-KMU and employer Dacongcogon

entered into a collective bargaining agreement (CBA) for a term of three (3) years, which was to
expire on November 14, 1987.
When the CBA expired, private respondent NFSW-FGT-KMU and Dacongcogon negotiated for
its renewal. The CBA was extended for another three (3) years with reservation to negotiate for
its amendment, particularly on wage increases, hours of work, and other terms and conditions of
employment.
However, a deadlock in negotiation ensued on the matter of wage increases and optional
retirement. In order to obviate friction and tension, the parties agreed on a suspension to provide
a cooling-off period to give them time to evaluate and further study their positions. Hence, a
Labor Management Council was set up and convened, with a representative of the Department
of Labor and Employment, acting as chairman, to resolve the issues.
On December 5, 1988, petitioner NACUSIP-TUCP filed a petition for direct certification or
certification election among the rank and file workers of Dacongcogon.
On January 27, 1989, private respondent NFSW-FGT-KMU moved to dismiss the petition on the
following grounds, to wit:
I

The designated Representation Officer is hereby directed to call the parties

for a pre-election conference to thresh out the mechanics of the election
and to conduct and supervise the same within twenty (20) days from receipt
by the parties of this Order. The latest payroll shall be used to determine the
list of qualified voters.
SO ORDERED. (Rollo, p. 34)
On February 9, 1989, private respondent filed a motion for reconsideration and/or appeal
alleging that the Honorable Med-Arbiter misapprehended the facts and the law applicable
amounting to gross incompetence. Hence, private respondent prayed that the order of the MedArbiter be set aside and the motion to dismiss be reconsidered.
On February 27, 1989, petitioner filed its opposition to the motion for reconsideration praying
that the motion for reconsideration and/or appeal be denied for lack of merit.
On June 26, 1989, respondent Director of the Bureau of Labor Relations rendered a resolution
reversing the order of the Med-Arbiter, to wit:
WHEREFORE, premises considered, the Order of the Med-Arbiter dated 8
February 1989 is hereby set aside and vacated, and a new one issued
dismissing the above-entitled petition for being filed out of time.

The Petition was filed out of time;

SO ORDERED. (Rollo, p. 46)
II
Hence, this petition raising four (4) issues, to wit:
There is a deadlocked (sic) of CBA negotiation between forced intervenor
and respondent-central. (Rollo, p. 25)
On February 6, 1989, Dacongcogon filed an answer praying that the petition be dismissed.
By an order dated February 8, 1989, the Med-Arbiter denied the motion to dismiss filed by
private respondent NFSW-FGT-KMU and directed the conduct of certification election among the
rank and file workers of Dacongcogon, the dispositive portion of which provides as follows:
WHEREFORE, premises considered, the Motion to Dismiss the present
petition is, as it is hereby DENIED. Let therefore a certification election

I. RESPONDENT HON. PURA FERRER-CALLEJA, IN HER CAPACITY AS

DIRECTOR OF THE BUREAU OF LABOR RELATIONS, COMMITTED
GRAVE ABUSE OF DISCRETION IN RENDERING HER RESOLUTION
DATED 26 JUNE 1989 REVERSING THE ORDER DATED FEBRUARY 8,
1989 OF MED-ARBITER FELIZARDO SERAPIO.
II. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF
RESPONDENT PURA FERRER-CALLEJA IS CONTRARY TO LAW AND
JURISPRUDENCE.

21

III. THAT THE AFORESAID RESOLUTION DATED 26 JUNE 1989 OF

RESPONDENT DIRECTOR PURA FERRER-CALLEJA DENIES THE RANK
AND FILE EMPLOYEES OF THE DACONGCOGON SUGAR & RICE
MILLING COMPANY, AND THE HEREIN PETITIONER NACUSIP-TUCP,
THEIR LEGAL AND CONSTITUTIONAL RIGHTS.
IV. THAT RESPONDENT DIRECTOR PURA FERRER-CALLEJA, IN
RENDERING HER SAID RESOLUTION DATED 26 JUNE 1989 WAS
BIASED AGAINST PETITIONER NACUSIP-TUCP. (Rollo,
p. 2)
The controversy boils down to the sole issue of whether or not a petition for certification election
may be filed after the 60-day freedom period.
Petitioner maintains that respondent Director Calleja committed grave abuse of discretion
amounting to excess of jurisdiction in rendering the resolution dated June 26, 1989 setting aside,
vacating and reversing the order dated February 8, 1989 of Med-Arbiter Serapio, in the following
manner:
1) by setting aside and vacating the aforesaid Order dated February 8, 1989
of Med-Arbiter Felizardo Serapio and in effect dismissing the Petition for
Direct or Certification Election of Petitioner NACUSIP-TUCP (Annex "A"
hereof) without strong valid, legal and factual basis;
2) by giving a very strict and limited interpretation of the provisions of
Section 6, Rule V, Book V of the Implementing Rules and Regulations of the
Labor Code, as amended, knowing, as she does, that the Labor Code,
being a social legislation, should be liberally interpreted to afford the
workers the opportunity to exercise their legitimate legal and constitutional
rights to self-organization and to free collective bargaining;
3) by issuing her questioned Resolution of June 26, 1989 knowing fully well
that upon the effectivity of Rep. Act No. 6715 on 21 March 1989 she had no
longer any appellate powers over decisions of Med-Arbiters in cases of
representation issues or certification elections;
4) by ignoring intentionally the applicable ruling of the Honorable Supreme
Court in the case ofKapisanan ng Mga Manggagawa sa La Suerte-FOITAF
vs. Noriel, L-45475, June 20, 1977;
5) by clearly failing to appreciate the significance (sic) of the fact that for
more than four (4) years there has been no certification election involving
the rank and file workers of the Company; and,
6) by frustrating the legitimate desire and will of the workers of the Company
to determine their sole and exclusive collective bargaining representative
through secret balloting. (Rollo, pp. 9-10)
However, the public respondent through the Solicitor General stresses that the petition for
certification election was filed out of time. The records of the CBA at the Collective Agreements
Division (CAD) of the Bureau of Labor Relations show that the CBA between Dacongcogon and

private respondent NFSW-FGT-KMU had expired on November 14, 1987, hence, the petition for
certification election was filed too late, that is, a period of more than one (1) year after the CBA
expired.
The public respondent maintains that Section 6 of the Rules Implementing Executive Order No.
111 commands that the petition for certification election must be filed within the last sixty (60)
days of the CBA and further reiterates and warns that any petition filed outside the 60-day
freedom period "shall be dismissed outright." Moreover, Section 3, Rule V, Book V of the Rules
Implementing the Labor Code enjoins the filing of a representation question, if before a petition
for certification election is filed, a bargaining deadlock to which the bargaining agent is a party is
submitted for conciliation or arbitration.
Finally, the public respondent emphasizes that respondent Director has jurisdiction to entertain
the motion for reconsideration interposed by respondent union from the order of the Med-Arbiter
directing a certification election. Public respondent contends that Section 25 of Republic Act No.
6715 is not applicable, "(f)irstly, there is as yet no rule or regulation established by the Secretary
for the conduct of elections among the rank and file of employer Dacongcogon; (s)econdly, even
the mechanics of the election which had to be first laid out, as directed in the Order dated
February 8, 1989 of the Med-Arbiter, was aborted by the appeal therefrom interposed by
respondent union; and (t)hirdly, petitioner is estopped to question the jurisdiction of respondent
Director after it filed its opposition to respondent union's Motion for Reconsideration (Annex
'F,' Petition) and without, as will be seen, in any way assailing such jurisdiction. . . ." (Rollo, p.66)
We find the petition devoid of merit.
A careful perusal of Rule V, Section 6, Book V of the Rules Implementing the Labor Code, as
amended by the rules implementing Executive Order No. 111 provides that:
Sec. 6. Procedure . . .
In a petition involving an organized establishment or enterprise where the
majority status of the incumbent collective bargaining union is questioned by
a legitimate labor organization, the Med-Arbiter shall immediately order the
conduct of a certification election if the petition is filed during the last sixty
(60) days of the collective bargaining agreement. Any petition filed before or
after the sixty-day freedom period shall be dismissed outright.
The sixty-day freedom period based on the original collective bargaining
agreement shall not be affected by any amendment, extension or renewal of
the collective bargaining agreement for purposes of certification election.
xxx xxx xxx
The clear mandate of the aforequoted section is that the petition for certification election filed by
the petitioner NACUSIP-TUCP should be dismissed outright, having been filed outside the 60day freedom period or a period of more than one (1) year after the CBA expired.
It is a rule in this jurisdiction that only a certified collective bargaining agreement i.e., an
agreement duly certified by the BLR may serve as a bar to certification elections. (Philippine
Association of Free Labor Unions (PAFLU) v. Estrella, G.R. No. 45323, February 20, 1989, 170
SCRA 378, 382) It is noteworthy that the Bureau of Labor Relations duly certified the November

22

14, 1984 collective bargaining agreement. Hence, the contract-bar rule as embodied in Section
3, Rule V, Book V of the rules implementing the Labor Code is applicable.
This rule simply provides that a petition for certification election or a motion for intervention can
only be entertained within sixty days prior to the expiry date of an existing collective bargaining
agreement. Otherwise put, the rule prohibits the filing of a petition for certification election during
the existence of a collective bargaining agreement except within the freedom period, as it is
called, when the said agreement is about to expire. The purpose, obviously, is to ensure stability
in the relationships of the workers and the management by preventing frequent modifications of
any collective bargaining agreement earlier entered into by them in good faith and for the
stipulated original period. (Associated Labor Unions (ALU-TUCP) v. Trajano, G.R. No. 77539,
April 12, 1989, 172 SCRA 49, 57 citing Associated Trade Unions (ATU v. Trajano, G.R. No. L75321, 20 June 1988, 162 SCRA 318, 322-323)
Anent the petitioner's contention that since the expiration of the CBA in 1987 private respondent
NFSW-FGT-KMU and Dacongcogon had not concluded a new CBA, We need only to stress
what was held in the case of Lopez Sugar Corporation v. Federation of Free Workers, Philippine
Labor Union Association (G.R. No. 75700-01, 30 August 1990, 189 SCRA 179, 191) quoting
Article 253 of the Labor Code that "(i)t shall be the duty of both parties to keep
the status quo and to continue in full force and effect the terms and conditions of the existing
agreement during the 60-day period and/or until a new agreement is reached by the parties."
Despite the lapse of the formal effectivity of the CBA the law still considers the same as
continuing in force and effect until a new CBA shall have been validly executed. Hence, the
contract bar rule still applies.
Besides, it should be emphasized that Dacongcogon, in its answer stated that the CBA was
extended for another three (3) years and that the deadlock was submitted to the Labor
Management Council.
All premises considered, the Court is convinced that the respondent Director of the Bureau of
Labor Relations did not commit grave abuse of discretion in reversing the order of the MedArbiter.
ACCORDINGLY, the petition is DENIED and the resolution of the respondent Director of the
Bureau of Labor Relations is hereby AFFIRMED.
SO ORDERED.

FIRST DIVISION
[G.R. No. 51337. March 22, 1984.]
UNITED CMC TEXTILE WORKERS UNION, Petitioner, v. BUREAU OF LABOR RELATIONS,
HON. CARMELO NORIEL, PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS, (JULY
CONVENTION), Respondents.
Jose L. Simon for Petitioner.
Wilfredo Y. Guevarra and Edward P. David for Private Respondent.

SYLLABUS
1. LABOR AND SOCIAL LEGISLATION; LABOR LAWS; BUREAU OF LABOR RELATIONS;
PENDENCY OF UNFAIR LABOR PRACTICE CASE, A PREJUDICIAL QUESTION TO
CERTIFICATION ELECTION; CASE AT BAR. Under settled jurisprudence, the pendency of a
formal charge of company domination is a prejudicial question that, until decided, bars
proceedings for a certification election, the reason being that the votes of the members of the
dominated union would not be free. The ULP Case herein was filed on August 31, 1978, or
anterior to the Certification Case, which was presented on September 5, 1978. The pendency of
the charge was known to respondent public official by virtue of the Motion to Dismiss filed by
petitioner as intervenor in the Certification Case. No allegation has been made that said ULP
Case was instituted in bad faith to forestall the Certification Case.
DECISION
MELENCIO-HERRERA, J.:
The question to resolve is whether or not public respondent acted with grave abuse of discretion
in affirming the Order of the Med-Arbiter calling for a certification election despite: (a) the
pendency of an unfair labor practice case filed by petitioner charging respondent PAFLU as
being company-dominated; (b) the existence of a deadlock in negotiations for renewal of the
collective bargaining agreement between petitioner and the Central Textile Mills, Inc. (CENTEX,
for short); and (c) a reasonable doubt as to whether the 30% requirement for holding a
certification election has been met.
Petitioner is a legitimate labor organization, the incumbent collective bargaining representative
of all rank and file workers of CENTEX since 1956. Respondent PAFLU is also a legitimate labor
organization seeking representation as the bargaining agent of the rank and file workers of
CENTEX.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
On August 31, 1978, petitioner filed a complaint for Unfair Labor Practice (R4-LRD-C-8-1493-78)
(the ULP Case, for brevity) against CENTEX and PAFLU alleging that CENTEX had "helped and
cooperated in the organization of the Central Textile Mills, Inc. Local PAFLU by allowing the
organizing members of the PAFLU to solicit signatures of employees of the company who are
members of the complainant union to disaffiliate from complainant union and join the respondent
PAFLU, during company time and inside the company premises on August 21, 1978 and the
following days thereafter." 1
While the ULP Case was pending, PAFLU, on September 5, 1978, filed a Petition for
Certification Election (R4-LRD-M-9432-78) (the Certification Case, for short) among the rank
and file workers of CENTEX, alleging that: 1) there has been no certification election during the
12 months period prior to the filing of the petition; 2) the petition is supported by signatures of
603 workers, or more than 30% of the rank and file workers of CENTEX; 3) the collective
bargaining agreement between CENTEX and petitioner will expire on October 31, 1978; 4) the
petition is filed within the 60-day-freedom-period immediately preceding the expiration of the
CBA, and 6) there is no legal impediment to the filing of the petition. 2
Petitioner intervened in the Certification Case and filed a Motion to Dismiss on September 27,
1978 on the grounds that: 1) the ULP Case charging that PAFLU is a company-dominated union
is a prejudicial question and bars the holding of the certification election; and 2) PAFLU failed to
comply with the 30% requirement for mandatory certification election since only 440 of the 603
are valid signatures and that 719 signatories are required as constitutive of 30% of the rank and

23

file workers totalling 2,397 and not 1,900 as alleged by PAFLU. 3

On October 16, 1978, petitioner filed a Notice of Strike with the Bureau of Labor Relations for
deadlock in the CBA negotiations with CENTEX. The parties having failed to effect a conciliation,
the Labor Minister assumed jurisdiction on November 9, 1978 in Case No. AJML-033-78 4
(referred to hereafter as the Deadlock Case)cralawnad

established practice of suspending the election proceeding. And this seems to be accepted rule
in the law of labor relations, the reason being, in the words of Mr. Justice Montemayor, `if there
is a union dominated by the company, to which some of the workers belong, an election among
workers and employees of the company would not reflect the true sentiment and wishes of the
said workers and employees because the votes of the members of the dominated union would
not be free. (Manila Paper Mills Employees v. Court of Industrial Relations, 104 Phil. 10)

A Supplemental Motion to Dismiss in the Certification Case was filed by petitioner on December
7, 1978 alleging that the Labor Minister had already taken cognizance of the deadlock in the
CBA negotiations and constituted an impediment to the holding of a certification election. 5

"And we have held, through Mr. Justice J.B.L. Reyes, that such charge of company domination
is a prejudicial question that until decided, shall suspend or bar proceedings for certification
election. (Standard Cigarette Workers Union v. Court of Industrial Relations, 101 Phil. 126)

On December 18, 1978, in the Deadlock Case, the Deputy Minister of Labor released a Decision
directing petitioner and CENTEX to execute and sign a CBA to take effect on November 1, 1978
up to October 30, 1981 based on the guidelines enumerated therein, and to furnish the Office of
the Minister of Labor with a signed copy of the renewed agreement not later than January 31,
1979. 6

"Indeed, if as a result of the Peltas complaint in Case No. 255-ULP, the Workers Union should
be ordered dissolved as a company dominated union, any election held in the meantime would
be a waste of energy and money to all parties concerned." 12

On January 23, 1979, in the Certification Case, the Med-Arbiter issued an Order for the holding
of a certification election among CENTEX rank and file workers, whereby qualified voters could
choose either PAFLU or petitioner as the collective bargaining representative or No Union at all.
7 This was affirmed by respondent Director of the Bureau of Labor Relations on appeal, in the
challenged Resolution, dated May 25, 1979, stating that: 1) the Bureau has discretion to order
certification election where several unions are contending for representation and when there is
doubt as to whether the 30% requirement has been met; and 2) to preclude the filing of a
petition for certification election the notice of strike for deadlock in CBA negotiations must occur
prior to the petition. 8
A Motion for Reconsideration filed by petitioner was denied for lack of merit in the Resolution of
August 20, 1979 9 , also assailed herein.
Hence, this petition, on the general proposition that public respondent has committed serious
error of law and acted with grave abuse of discretion, and that petitioner has no plain and
adequate remedy in the ordinary course of law.
We issued a Temporary Restraining Order enjoining the conduct of the certification election, and
eventually gave the Petition due course.
The issues raised are: (1) is the pendency of the ULP Case charging a participating union in the
certification election proceedings as company-dominated a prejudicial question to the conduct of
the election? (2) Does the decision in the Deadlock Case directing the parties to execute a CBA
have the effect of barring the certification election? (3) Does respondent Director have the
discretion to call for a certification election even if the 30% consent requirement is lacking?
The case can be resolved on the basis of the first issue alone, which must be answered in the
affirmative. Under settled jurisprudence, the pendency of a formal charge of company
domination is a prejudicial question that, until decided, bars proceedings for a certification
election 10 , the reason being that the votes of the members of the dominated union would not
be free. 11 The ULP Case herein was filed on August 31, 1978, or anterior to the Certification
Case, which was presented on September 5, 1978. The pendency of the charge was known to
respondent public official by virtue of the Motion to Dismiss filed by petitioner as intervenor in the
Certification Case. No allegation has been made that said ULP Case was instituted in bad faith
to forestall the Certification Case. The following ruling is thus squarely in
point:jgc:chanrobles.com.ph
"There is no assertion that such complaint was flimsy, or made in bad faith or filed purposely to
forestall the certification election. So, no reason existed for the Industrial Court to depart from its

The rationale for the suspension of the election proceedings has been further amplified as
follows:jgc:chanrobles.com.ph
"What is settled law, dating from the case of Standard Cigarette Workers Union v. Court of
Industrial Relations (101 Phil. 126), decided in 1957, is that if it were a labor organization
objecting to the participation in a certification election of a company-dominated union, as a result
of which a complaint for an unfair labor practice case against the employer was filed, the status
of the latter union must be first cleared in such a proceeding before such voting could take
place. In the language of Justice J.B.L. Reyes as ponente: `As correctly pointed out by Judge
Lanting in his dissenting opinion on the denial of petitioners motion for reconsideration, a
complaint for unfair labor practice may be considered a prejudicial question in a proceeding for
certification election when it is charged therein that one or more labor unions participating in the
election are being aided, or are controlled, by the company or employer. The reason is that the
certification election may lead to the selection of an employer-dominated or company union as
the employees bargaining representative, and when the court finds that said union is employerdominated in the unfair labor practice case, the union selected would be decertified and the
whole election proceedings would be rendered useless and nugatory. (Ibid., 128). The next year,
the same jurist had occasion to reiterate such doctrine in Manila Paper Mills Employees and
Workers Association v. Court of Industrial Relations (104 Phil. 10 [1958]), thus: `We agree with
the CIR on the reasons given in its order that only a formal charge of company domination may
serve as a bar to and stop a certification election, the reason being that if there is a union
dominated by the Company, to which some of the workers belong, an election among the
workers and employees of the company would not reflect the true sentiment and wishes of the
said workers and employees from the standpoint of their welfare and interest, because as to the
members of the company dominated union, the vote of the said members in the election would
not be free. It is equally true, however, that the opposition to the holding of a certification election
due to a charge of company domination can only be filed and maintained by the labor
organization which made the charge of company domination, because it is the entity that stands
to lose and suffer prejudice by the certification election, the reason being that its members might
be overwhelmed in the voting by the other members controlled and dominated by the Company,
(Ibid., 15). It is easily understandable why it should be thus. There would be an impairment of
the integrity of the collective bargaining process if a company-dominated union were allowed to
participate in a certification election. The timid, the timorous, and the faint-hearted in the ranks of
labor could easily be tempted to cast their votes in favor of the choice of management. Should it
emerge victorious, and it becomes the exclusive representative of labor at the conference table,
there is a frustration of the statutory scheme. It takes two to bargain. There would be instead a
unilateral imposition by the employer. There is need therefore to inquire as to whether a labor
organization that aspires to be the exclusive bargaining representative is company-dominated
before the certification election." 13
With the suspension of the certification proceedings clearly called for by reason of a prejudicial

24

question, the necessity of passing upon the remaining issues is obviated.chanrobles.com.ph :

virtual law library
WHEREFORE, the Resolution of August 20, 1979 issued by public respondent affirming the
Order of the Med-Arbiter, dated January 23, 1979, calling for a certification election is hereby
REVERSED and SET ASIDE. The Temporary Restraining Order heretofore issued by this Court
shall continue to be in force and effect until the status is cleared of respondent Philippine
Association of Free Labor Unions (July Convention) in Case No. R4-LRD-M-9-432-78 entitled "In
the Matter of Certification Election Among Rank and File Workers of Central Textile Mills, Inc.,
Philippine Association of Free Labor Unions, Petitioner, United CMC Textile Workers Union,
Intervenor."cralaw virtua1aw library

THE ANTECEDENTS

The facts are undisputed and are summarized below.

On December 22, 1997, the petitioner FVCLU-PTGWO the recognized bargaining agent

No costs.

of the rank-and-file employees of the FVC Philippines, Incorporated (company) signed a five-

SO ORDERED.

year collective bargaining agreement (CBA) with the company. The five-year CBA period was
SECOND DIVISION
from February 1, 1998 to January 30, 2003.[5] At the end of the 3rd year of the five-year term and
FVC LABOR UNION-PHILIPPINE TRANSPORT AND
GENERAL WORKERS ORGANIZATION (FVCLUPTGWO),
Petitioner,
- versus

G.R. No. 176249

CARPIO, J., Chairperson,

LEONARDO-DE CASTRO,
BRION,
DEL CASTILLO, and
ABAD, JJ.

pursuant to the CBA, FVCLU-PTGWO and the company entered into the renegotiation of the

Present:

SAMA-SAMANG NAGKAKAISANG MANGGAGAWA SA

FVC-SOLIDARITY OF INDEPENDENT AND GENERAL
LABOR ORGANIZATIONS (SANAMA-FVC-SIGLO),
Respondent.

CBA and modified, among other provisions, the CBAs duration. Article XXV, Section 2 of the
renegotiated CBA provides that this re-negotiation agreement shall take effect beginning
February 1, 2001 and until May 31, 2003 thus extending the original five-year period of the CBA
by four (4) months.

Promulgated:
November 27, 2009
x-------------------------------------------------------------------------------------- x
DECISION
BRION, J.:

On January 21, 2003, nine (9) days before the January 30, 2003 expiration of the
originally-agreed five-year CBA term (and four [4] months and nine [9] days away from the
expiration of the amended CBA period), the respondent Sama-Samang Nagkakaisang
Manggagawa sa FVC-Solidarity of Independent and General Labor Organizations (SANAMASIGLO) filed before the Department of Labor and Employment (DOLE) a petition for certification

We pass upon the petition for review on certiorari under Rule 45 of the Rules of
election for the same rank-and-file unit covered by the FVCLU-PTGWO CBA. FVCLU-PTGWO
Court[1] filed by FVC Labor UnionPhilippine Transport and General Workers Organization
moved to dismiss the petition on the ground that the certification election petition was filed
(FVCLU-PTGWO) to challenge the Court of Appeals (CA) decision of July 25, 2006 [2] and its
resolution rendered on January 15, 2007[3] in C.A. G.R. SP No. 83292.[4]

25

outside the freedom period or outside of the sixty (60) days before the expiration of the CBA on

fact received the benefits arising from the amendments, the Acting Secretary rationalized that

May 31, 2003.

they also accepted the extended term of the CBA and cannot now file a petition for certification
election based on the original CBA expiration date.

Action on the Petition and Related Incidents

On June 17, 2003, Med-Arbiter Arturo V. Cosuco dismissed the petition on the ground that
SANAMA-SIGLO moved for the reconsideration of the Acting Secretarys Order, but
it was filed outside the 60-day period counted from the May 31, 2003 expiry date of the
Secretary Sto. Tomas denied the motion in her Order of January 30, 2004.[9]
amended CBA.[6] SANAMA-SIGLO appealed the Med-Arbiters Order to the DOLE Secretary,
contending that the filing of the petition on January 21, 2003 was within 60-days from the
SANAMA-SIGLO sought relief from the CA through a petition for certiorari under Rule
January 30, 2003 expiration of the original CBA term.
65 of the Rules of Court based on the grave abuse of discretion the Labor Secretary committed
when she reversed her earlier decision calling for a certification election. SANAMA-SIGLO
DOLE Secretary Patricia A. Sto. Tomas sustained SANAMA-SIGLOs position, thereby
pointed out that the Secretarys new ruling is patently contrary to the express provision of the
setting aside the decision of the Med-Arbiter.[7] She ordered the conduct of a certification
law and established jurisprudence.
election in the company. FVCLU-PTGWO moved for the reconsideration of the Secretarys
decision.
THE CA DECISION

On November 6, 2003, DOLE Acting Secretary Manuel G. Imson granted the motion;
The CA found SANAMA-SIGLOs petition meritorious on the basis of the applicable
he set aside the August 6, 2003 DOLE decision and dismissed the petition as the Med-Arbiters
law[10] and the rules,[11] as interpreted in the congressional debates. It set aside the challenged
Order of June 17, 2003 did.[8] The Acting Secretary held that the amended CBA (which
DOLE Secretary decisions and reinstated her earlier ruling calling for a certification
extended the representation aspect of the original CBA by four [4] months) had been ratified by
election. The appellate court declared:
members of the bargaining unit some of whom later organized themselves as SANAMA-SIGLO,
the certification election applicant. Since these SANAMA-SIGLO members fully accepted and in

It is clear from the foregoing that while the parties may renegotiate
the other provisions (economic and non-economic) of the CBA, this should
not affect the five-year representation aspect of the original CBA. If the

26

duration of the renegotiated agreement does not coincide with but rather
exceeds the original five-year term, the same will not adversely affect the
right of another union to challenge the majority status of the incumbent
bargaining agent within sixty (60) days before the lapse of the original five
(5) year term of the CBA. In the event a new union wins in the certification
election, such union is required to honor and administer the renegotiated
CBA throughout the excess period.

ones who approved the amendments, including the expiration date of the CBA, and who
benefited from these amendments.

Lastly, FVCLU-PTGWO posits that the representation petition had been rendered
FVCLU-PTGWO moved to reconsider the CA decision but the CA denied the motion in
its resolution of January 15, 2007. [12] With this denial, FVCLU-PTGWO now comes before us to

moot by a new CBA it entered into with the company covering the period June 1, 2003 to May
31, 2008.[15]

challenge the CA rulings.[13] It argues that in light of the peculiar attendant circumstances of the
case, the CA erred in strictly applying Section 11 (11b), Rule XI, Book V of the Omnibus Rules
Implementing the Labor Code, as amended by Department Order No. 9, s. 1997.[14]
Required to comment by the Court[16] and to show cause for its failure to comply,
Apparently, the peculiar circumstances the FVCLU-PTGWO referred to relate to the

[17]

SANAMA-SIGLO manifested on October 10, 2007 that: since the promulgation of the CA

economic and other provisions of the February 1, 1998 to January 30, 2003 CBA that it

decision on July 25, 2006 or three years after the petition for certification election was filed, the

renegotiated with the company. The renegotiated CBA changed the CBAs remaining term from

local leaders of SANAMA-SIGLO had stopped reporting to the federation office or attending

February 1, 2001 to May 31, 2003. To FVCLU-PTGWO, this extension of the CBA term also

meetings of the council of local leaders; the SANAMA-SIGLO counsel, who is also the SIGLO

changed the unions exclusive bargaining representation status and effectively moved the

national president, is no longer in the position to pursue the present case because the local

reckoning point of the 60-day freedom period from January 30, 2003 to May 30, 2003. FVCLU-

union and its leadership, who are principals of SIGLO, had given up and abandoned their desire

PTGWO thus moved to dismiss the petition for certification election filed on January 21, 2003 (9

to contest the representative status of FVCLU-PTGWO; and a new CBA had already been

days before the expiry date on January 30, 2003 of the original CBA) by SANAMA-SIGLO on the

signed by FVCLU-PTGWO and the company.[18] Under these circumstances, SANAMA-SIGLO

ground that the petition was filed outside the authorized 60-day freedom period.

contends that pursuing the case has become futile, and accordingly simply adopted the CA
decision of July 25, 2006 as its position; its counsel likewise asked to be relieved from filing a

It also submits in its petition that the SANAMA-SIGLO is estopped from questioning
the extension of the CBA term under the amendments because its members are the very same

comment in the case. We granted the request for relief and dispensed with the filing of a
comment.[19]

27

THE COURTS RULING

While SANAMA-SIGLO has manifested its abandonment of its challenge to the exclusive
bargaining representation status of FVCLU-PTGWO, we deem it necessary in the exercise of

the renegotiation of the collective bargaining agreement, the parties may

exercise their rights under this Code.

This Labor Code provision is implemented through Book V, Rule VIII of the Rules
Implementing the Labor Code[21] which states:

our discretion to resolve the question of law raised since this exclusive representation status

Sec. 14. Denial of the petition; grounds. The Med-Arbiter may

dismiss the petition on any of the following grounds:

issue will inevitably recur in the future as workplace parties avail of opportunities to prolong

xxxx
(b) the petition was filed before or after the freedom period of a
duly registered collective bargaining agreement; provided
that the sixty-day period based on the original collective
bargaining agreement shall not be affected by any
amendment, extension or renewal of the collective
bargaining agreement (underscoring supplied).

workplace harmony by extending the term of CBAs already in place.[20]

The legal question before us centers on the effect of the amended or extended term of

xxxx
the CBA on the exclusive representation status of the collective bargaining agent and the right of
another union to ask for certification as exclusive bargaining agent. The question arises
The root of the controversy can be traced to a misunderstanding of the interaction
because the law allows a challenge to the exclusive representation status of a collective
between a unions exclusive bargaining representation status in a CBA and the term or effective
bargaining agent through the filing of a certification election petition only within 60 days from the
period of the CBA.
expiration of the five-year CBA.

Article 253-A of the Labor Code covers this situation and it provides:
Terms of a collective bargaining agreement. Any Collective
Bargaining Agreement that the parties may enter into, shall, insofar as the
representation aspect is concerned,be for a term of five (5) years. No
petition questioning the majority status of the incumbent bargaining agent
shall be entertained and no certification election shall be conducted by the
Department of Labor and Employment outside of the sixty day period
immediately before the date of expiry of such five-year term of the
Collective Bargaining Agreement. All other provisions of the Collective
Bargaining Agreement shall be renegotiated not later than three (3) years
after its execution.
Any agreement on such other provisions of the Collective
Bargaining Agreement entered into within six (6) months from the date of
expiry of the term of such other provisions as fixed in such Collective
Bargaining Agreement, shall retroact to the day immediately following such
date. If any such agreement is entered into beyond six months, the parties
shall agree on the duration of retroactivity thereof. In case of a deadlock in

FVCLU-PTGWO has taken the view that its exclusive representation status should
fully be in step with the term of the CBA and that this status can be challenged only within 60
days before the expiration of this term. Thus, when the term of the CBA was extended, its
exclusive bargaining status was similarly extended so that the freedom period for the filing of a
petition for certification election should be counted back from the expiration of the amended
CBA term.

28

We hold this FVCLU-PTGWO position to be correct, but only with respect to

the original five-year term of the CBA which, by law, is also the effective period of the unions

economic and non-economic CBA provisions, also extended the life of the CBA for another four
months, i.e., from the original expiry date on January 30, 2003 to May 30, 2003.

exclusive bargaining representation status. While the parties may agree to extend the CBAs
original five-year term together with all other CBA provisions, any such amendment or term in

As discussed above, this negotiated extension of the CBA term has no legal effect on

excess of five years will not carry with it a change in the unions exclusive collective bargaining

the FVCLU-PTGWOs exclusive bargaining representation status which remained effective only

status. By express provision of the above-quoted Article 253-A, the exclusive bargaining status

for five years ending on the original expiry date of January 30, 2003. Thus, sixty days prior to

cannot go beyond five years and the representation status is a legal matter not for the workplace

this date, or starting December 2, 2002, SANAMA-SIGLO could properly file a petition for

parties to agree upon. In other words, despite an agreement for a CBA with a life of more than

certification election. Its petition, filed on January 21, 2003 or nine (9) days before the expiration

five years, either as an original provision or by amendment, the bargaining unions exclusive

of the CBA and of FVCLU-PTGWOs exclusive bargaining status, was seasonably filed.

bargaining status is effective only for five years and can be challenged within sixty (60) days
prior to the expiration of the CBAs first five years. As we said in San Miguel Corp. Employees

We thus find no error in the appellate courts ruling reinstating the DOLE order for the

UnionPTGWO, et al. v. Confesor, San Miguel Corp., Magnolia Corp. and San Miguel Foods,

conduct of a certification election. If this ruling cannot now be given effect, the only reason is

Inc.,[22]where we cited the Memorandum of the Secretary of Labor and Employment dated

SANAMA-SIGLOs own desistance; we cannot disregard its manifestation that the members of

February 24, 1994:

SANAMA themselves are no longer interested in contesting the exclusive collective bargaining

In the event however, that the parties, by mutual agreement,

enter into a renegotiated contract with a term of three (3) years or one
which does not coincide with the said five-year term and said agreement is
ratified by majority of the members in the bargaining unit, the subject
contract is valid and legal and therefore, binds the contracting parties. The
same will however not adversely affect the right of another union to
challenge the majority status of the incumbent bargaining agent within sixty
(60) days before the lapse of the original five (5) year term of the CBA.

agent status of FVCLU-PTGWO. This recognition is fully in accord with the Labor Codes intent
to foster industrial peace and harmony in the workplace.

WHEREFORE, premises considered, we AFFIRM the correctness of the challenged

Decision and Resolution of the Court of Appeals and accordinglyDISMISS the petition, but

In the present case, the CBA was originally signed for a period of five years, i.e., from
nevertheless DECLARE that no certification election, pursuant to the underlying petition for
February 1, 1998 to January 30, 2003, with a provision for the renegotiation of the CBAs other
certification election filed with the Department of Labor and Employment, can be enforced as
provisions at the end of the 3 rd year of the five-year CBA term. Thus, prior to January 30, 2001
this petition has effectively been abandoned.
the workplace parties sat down for renegotiation but instead of confining themselves to the

29

SO ORDERED.

F. ADMINISTRATION OF AGREEMENT; GRIEVANCE AND VOLUNTARY ARBITRATION

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 124013 June 5, 1998

ROSARIO MANEJA, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MANILA MIDTOWN
HOTEL, respondents.

MARTINEZ, J.:
Assailed in this petition for certiorari under Rule 65 of the Revised Rules of Court are the
Resolution 1 dated June 3, 1994 of the respondent National Labor Relations Commission in
NLRC NCR-00-10-05297-90, entitled "Rosario Maneja,Complainant, vs. Manila Midtown
Hotel, Respondent," which dismissed the illegal dismissal case filed by petitioner against private
respondent company for lack of jurisdiction of the Labor Arbiter over the case; and its
Resolution 2 dated October 20, 1995 denying petitioner's motion for reconsideration.
Petitioner Rosario Maneja worked with private respondent Manila Midtown Hotel beginning
January, 1985 as a telephone operator. She was a member of the National Union of Workers in
Hotels, Restaurants and Allied Industries (NUWHRAIN) with an existing Collective Bargaining
Agreement (CBA) with private respondent.
In the afternoon of February 13, 1990, a fellow telephone operator, Rowena Loleng received a
Request for Long Distance Call (RLDC) form and a deposit of P500.00 from a page boy of the
hotel for a call by a Japanese guest named Hirota Ieda. The call was unanswered. The P500.00
deposit was forwarded to the cashier. In the evening, Ieda again made an RLDC and the page
boy collected another P500.00 which was also given to the operator Loleng. The second call
was also unanswered. Loleng passed on the RLDC to petitioner for follow-up. Petitioner
monitored the call.
On February 15, 1990, a hotel cashier inquired about the P1,000.00 deposit made by Ieda. After
a search, Loleng found the first deposit of P500.00 inserted in the guest folio while the second
deposit was eventually discovered inside the folder for cancelled calls with deposit and official
receipts.

When petitioner saw that the second RLDC form was not time-stamped, she immediately placed
it inside the machine which stamped the date "February 15, 1990." Realizing that the RLDC was
filed 2 days earlier, she wrote and changed the date to February 13, 1990. Loleng then delivered
the RLDC and the money to the cashier. The second deposit of P500.00 by Ieda was later
returned to him.
On March 7, 1990, the chief telephone operator issued a memorandum 3 to petitioner and
Loleng directing the two to explain the February 15 incident. Petitioner and Loleng thereafter
submitted their written explanation. 4
On March 20, 1990, a written report 5 was submitted by the chief telephone operator, with the
recommendation that the offenses committed by the operators concerned covered violations of
the Offenses Subject to Disciplinary Actions (OSDA): (1) OSDA 2.01: forging, falsifying official
document(s), and (2) OSDA 1.11: culpable carelessness negligence or failure to follow
specific instruction(s) or established procedure(s).
On March 23, 1990, petitioner was served a notice of dismissal 6 effective April 1, 1990.
Petitioner refused to sign the notice and wrote therein "under protest."
Meanwhile, a criminal case 7 for Falsification of Private Documents and Qualified Theft was filed
before the Office of the City Prosecutor of Manila by private respondent againts Loleng and
petitioner. However, the resolution recommending the filing of a case for estafa was reversed by
2nd Asst. City Prosecutor Virgilio M. Patag.
On October 2, 1990, petitioner filed a complaint for illegal dismissal against private respondent
before the Labor Arbiter. The complaint was later amended to include a claim for unpaid wages,
unpaid vacation leave conversion and moral damages.
Position papers were filed by the parties. Thereafter, the motion to set the case for hearing filed
by private respondent was granted by the Labor Arbiter and trial on the merits ensued.
In his decision 8 dated May 29, 1992, Labor Arbiter Oswald Lorenzo found that the petitioner was
illegally dismiised. However, in the decision, the Labor Arbiter stated that:
Preliminary, we hereby state that on the face of the instant complaint, it is
one that revolves on the matter of the implementation and interpretation of
existing company policies, which per the last par. of Art. 217 of the Labor
Code, as amended, is one within the jurisdictional ambit of the grievance
procedure under the CBA and thereafter, if unresolved, one proper for
voluntary arbitration. This observation is re-entrenched by the fact, that
complainant claims she is a member of NUWRAIN with an existing CBA
with respondent hotel.
On this score alone, this case should have dismissed outright.

Despite the aforequoted preliminary statement, the Labor Arbiter still assumed jurisdiction "since
Labor Arbiters under Article 217 of the same Labor Code, are conferred original and exclusive
jurisdiction of all termination case(sic.)." The dispositive portion of the decision states that:

30

WHEREFORE, premises considered, judgment is hereby renrdered as

follows:
(1) Declaring complainant's dismissal by respondent hotel as illegally
effected;
(2) Ordering respondent to immediately reinstate complainant to her
previous position without loss of seniority rights;
(3) Ordering further respondent to pay complainant the full backwages due
her, which is computed as follows:

Petitioner's motion for reconsideration

13

was denied by respondent NLRC for lack of merit.

In this petition for certiorari, petitioner ascribes to respondent NLRC grave abuse of discretion in

1. Ruling that the Labor Arbiter was without jurisdiction over the illegal
dismissal case;
2. Not ruling that private respondent is estopped by laches from questioning
the jurisdiction of the illegal dismissal case;
3. Reversing the decision of the Labor Arbiter based on a technicality
notwithstanding the merits of the case.

3/23/90 - 10/31/90 = 7.26/mos.

P2.540 x 7.26/mos. P18,440.40
11/1/90 - 1/7/91 = 2.23/mos.
P3,224.16 x 2.23/mos. 7,189.87

Petitioner contents that Article 217(a)(2) and (c) relied upon by respondent NLRC in divesting
the labor arbiter of jurisdiction over the illegal dismissal case, should be read in conjunction with
Article 261 14 of the Labor Code. It is the view of petitioner that termination cases arising from the
interpretation or enforcement policies pertaining to violations of Offenses Subject to Disciplinary
Actions (OSDA), are under the jurisdiction of the voluntary arbitrator only if these are unresolved
in the plant-level grievance machinery. Petitioner insists that her termination is not an unresolved
grievance as there has been no grievance meeting between the NUWHRAIN union and the
management. The reason for this, petitioner adds, is that it has been a company practice that
termination cases are not anymore referred to the grievance machinery but directly to the labor
arbiter.

1/8/91 - 4/29/92 = 15.7/mos.

P3,589.16 x 15.7/mos. 56,349.89
P81,980.08
(4) Moreover, respondent is ordered to pay the 13th month pay due the
complainant in the amount of P6,831.67 including moral and exemplary
damages of P15,000.00 and P10,000.00 respectively, as well as attorney's
fees equivalent to ten (10) percent of the total award herein in the amount of
P11,381.17;
(5) Finally, all other claims are hereby dismissed for lack of merit.
SO ORDERED.

In its comment, private respondent argues that the Labor Arbiter should have dismissed the
illegal dismissal case outright after finding that it is within the jurisdictional ambit of the grievance
procedure. Moreover, private respondent states that the issue of jurisdiction may be raised at
any time and at any stage of the proceedings even on appeal, and is not in estoppel by laches
as contended by the petitioner.
For its part, public respondent, through the Office of the Solicitor General, cited the ruling of this
Court in Sanyo Philippines Workers Union- PSSLU vs. Caizares 15 in dismissing the case for
lack of jurisdiction of the Labor Arbiter.
The legal issue in this case is whether or not the Labor Arbiter has jurisdiction over the illegal
dismissal case.
The respondent Commission, in holding that the Labor Arbiter lacks jurisdiction to hear the illegal
dismissal case, cited as basis therefor Article 217 of the Labor Code, as amended by Republic
Act No. 6715. It said:

Private respondent appealed the decision to the respondent commission on the ground inter
alia that the Laber Arbiter erred in "assuming jurisdiction over the illegal dismissal case after
finding that the case falls within the jurisdictional ambit of the grievance procedure under the
CBA, and if unresolved, proper for voluntary arbitration."10 An Opposition 11 was filed by
petitioner.

White it is conceded that under Article 217(a), Labor Arbiters shall have
original and exclusive jurisdiction over cases involving "termination
disputes," the Supreme Court, in a fairy recent case ruled:

In the assailed Resolution 12 dated June 3, 1994, respondent NLRC dismissed the illegal
dismissal case for lack of Jurisdiction of the Labor Arbiter because the same should have
instead been subjected to voluntary arbitration.

The procedure introduced in RA 6715 of referring certain grievances

originally and exclusively to the grievance machinery, and when not settled
at this level, to a panel of voluntary arbitrators outlined in CBAs does not
only include grievances arising from the interpretation or implementation of

31

the CBA but applies as well to those arising from the implementation of
company personnel policies. No other body shall take cognizance of these
cases. . . . (Sanyo vs. Caizares, 211 SCRA 361,
372) 16
We Find that the respondent Commission has erroneously interpreted the aforequoted portion of
our ruling in the case of Sanyo, as divesting the Labor Arbiter of jurisdiction in a termination
dispute.
Art. 217 of the Labor Code gives us the clue as to the jurisdiction of the Labor Arbiter, to wit:
Art. 217. Jurisdiction of Labor Arbiters and the Commission. a) Except as
otherwise provided under this Code the Labor Arbiters shall have original
and exclusive jurisdiction to hear and decided within thirty (30) calendar
days after the submission of the case by the parties for decision without
extension even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;

b) The commission shall have exclusive appellate jurisdiction over all cases
decided by Labor Arbiters.
c) Cases arising from the interpretation or implementation of collective
bargaining agreements and those arising from the interpretation or
enforcement of company personel policies shall be disposed of by the Labor
Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements.
As can be seen from the aforequoted Article, termination cases fall under the original and
exclusive jurisdiction of the Labor Arbiter. It should be noted, however, that in the opening there
appears the phrase: "Except as otherwise provided under this Code . . . ." It is paragraph (c) of
the same Article which respondent Commission has erroneously interpreted as giving the
voluntary arbitrator jurisdiction over the illegal dismissal case.
However, Article 217 (c) should be read in conjunction with Article 261 of the Labor Code which
grants to voluntary arbitrators original and exclusive jurisdiction to hear and decide
all unresolved grievances arising from the interpretation or implementation of the collective
bargaining agreement and those arising from the interpretation or enforcement of company
personel policies. Note the phrase "unresolved grievances." In the case at bar, the termination of
petitioner is not an unresolved grievance.

2. Termination disputes;
3. If accompanied with a claim for
reinstatement, those cases that
workers may file involving wages,
rates of pay, hours of work and
other terms and conditions of
employment;
4. Claims for actual, moral,
exemplary and other forms of
damages arising from the
employer-employee relations;
5. Cases arising from any violation
of Article 264 of this Code,
including questions involving the
legality of strikes and lockouts;
6. Except claims for Employees
Compensation, Social Security,
Medicare and maternity benefits,
all other claims, arising from
employer-employee relations,
including those of persons in
domestic or household service,
involving an amount exceeding five
thousand pesos (P5,000.00)
regardless of whether
accompanied with a claim for
reinstatement.

The stance of the Solicitor General in the Sanyo case is totally the reverse of its posture in the
case at bar. InSanyo, the Solicitor General was of the view that a distinction should be made
between a case involving "interpretation or implementation of Collective Bargaining Agreement"
or interpretation or "enforcement" of company personel policies, on the one hand and a case
involving termination, on the other hand. It argued that the dismissal of the private respondents
does not involve an "interpretation or implementation" of a Collective Bargaining Agreement or
"interpretation or enforcement" of company personel policies but involves "termination." The
Solicitor General further said that where the dispute is just in the interpretation, implementation
or enforcement stage, it may be referred to the grievance machinery set up the Collective
Bargaining Agreement or by voluntary arbitration. Where there was already actual
termination, i.e., violation of rights, it is already cognizable by the Labor Arbiter. 17 We fully agree
with the theory of the Solicitor General in the Sanyo case, which is radically apposite to its
position in this case.
Moreover, the dismissal of petitioner does not fall within the phrase "grievance arising from the
interpretation or implementation of collective bargaining agreement and those arising from the
interpretation or enforcement of company personel policies," the jurisdiction of which pertains to
the grievance machinery or thereafter, to a voluntary arbitrator or panel of voluntary arbitrators. It
is to be stressed that under Article 260 of the Labor Code, which explains the function of the
grievance machinery and voluntary arbitrator. "(T)he parties to a Collective Bargaining
Agreement shall include therein provisions that will ensure the mutual observance of its terms
and conditions. They shall establish a machinery for the adjustment and resolution of grievances
arising from the interpretation or implementation of their Collective Bargaining Agreement and
those arising from the interpretation or enforcement of company personel policies." Article 260
further provides that the parties to a CBA shall name or designate their respective representative
to the grievance machinery and if the grievance is unsettled in that level, it shall automatically be
refered to the voluntary arbitrators designated in advance by the parties to a CBA of the union
and the company. It can thus be deduced that only disputes involving the union and the
company shall be referred to the grievance machinery or voluntary arbitrators. 18

32

In the case at bar, the union does not come into the picture, not having objected or voiced any
dissent to the dismissal of the herein petitioner. The reason for this, according to petitioner is that
"the practice in said Hotel in cases of termination is that the latter cases are not referred
anymore to the grievance committee;" and that "the terminated employee who wishes to
question the legality of his termination usually goes to the Labor Arbiter for arbitration, whether
the termination arose from the interpretation or enforcement of the company personnel policies
or otherwise." 19
As we ruled in Sanyo, "Since there has been an actual termination, the matter falls within the
jurisdiction of the labor Arbiter." The aforequoted doctrine is applicable foursquare in petitioner's
case. The dismissal of the petitioner does not call for the interpretation or enforcement of
company personnel policies but is a termination dispute which comes under the jurisdiction of
the Labor Arbiter.
It should be explained that "company personel policies" are guiding priciples stated in broad,
long-range terms that express the philosophy or beliefs of an organization's top authority
regarding personnel matters. They deal with matters affecting efficiency and well-being of
employees and include, among others, the procedure in the administration of wages, benefits,
promotions, transfer and other personnel movements which are usually not spelled out in the
collective agreement. The usual source of grievances, however, are the rules and regulations
governing disciplinary actions. 20
The case of Pantranco North Express, Inc. vs. NLRC 21 sheds further light on the issue of
jurisdiction where the Court cited the Sanyo case and quoted the decision of therein Labor
Arbiter Olairez in this manner:
In our honest opinion we have jurisdiction over the complaint on the
following grounds:
First, this is a complaint of illegal dismissal of which original and exclusive
jurisdiction under Article 217 has been conferred to the labor Arbiters. The
interpretation of the CBA or enforcement of the company policy is only
corollary to the complaint of illegal dismissal. Otherwise, an employee who
was on AWOL, or who committed offenses contrary to the personnel
policies(sic) can no longer file a case of illegal discharge is premised on the
interpretation or enforcement of the company policies(sic).
Second. Respondent voluntarily submitted tha case to the jurisdiction of this
labor tribunal. It adduced arguments to the legality of its act, whether such
act may be retirement and/or dismissal, and prayed for reliefs on the merits
of the case. A litigant cannot pray for reliefs on the merits and at the same
time attacks(sic) the jurisdiction of the tribunal. A person cannot have one's
cake and eat it too. . . . .
As to the second ground, petitioner correctly points out that respondent NLRC should have ruled
that private respondent is estopped by laches in questioning the jurisdiction of the Labor Arbiter.
Clearly, estoppel lies. The issue of jurisdiction was mooted by herein private respondent's active
participation in the proceedings below. In Marquez vs. Secretary of Labor, 22 the Court said:

. . . . The active participation of the against whom the action was brought,
coupled with his failure to object to the jurisdiction of the court or quasijudicial body where the action is pending, is tantamount to an invocation of
that jurisdiction and a willingness to abide the resolution of the case and will
bar said party from later on impugning the court or body's jurisdiction.
In the assailed Resolution, 23 respondent NLRC cited La Naval Drug Corporation vs. Court of
Appeals 24 in holding that private respondent is not in estopel. Thus,
The operation of the principle of estoppel on the question of jurisdiction
seemingly depends upon whether the lower court actually had jurisdiction or
not. If it had no jurisdiction, but the case was tried and decided upon the
theory that it had jurisdiction, the parties are not barred, on appeal, from
assailing such jurisdiction, for the same "must exist as a matter of law, and
may not be conferred by consent of the parties or by estoppel" (5 C.J.S.,
861-863). However, if the lower court had jurisdiction, and the case was
heard and decided upon a given theory, such, for instance, as that the court
had no jurisdiction, the party who induced it to adopt such theory will not be
permitted, on appeal, to assume an inconsistent position that the lower
court had jurisdiction. Here, the principle of estoppel applies. The rule that
jurisdiction is conferred by law, and does not depend upon the will of the
parties, has no bearing thereon. (Emphasis ours)
Again, the respondent NLRC has erroneously interpreted our ruling in the La Naval case. Under
the said ruling, estoppel lies in this case. Private respondent is stopped from questioning the
jurisdiction of the Labor Arbiter before the respondent NLRC having actively participated in the
proceedings before the former. At no time before or during the trial on the merits did private
respondent assail the jurisdiction of the Labor Arbiter. Private respondent took the cue only from
the preliminary statement in the decision of the Labor Arbiter, which was a mere obiter, and
raised the issue of jurisdiction before the Commission. It was then too late. Estoppel had set in.
Turning now to the merits of the case, We uphold the ruling of the Labor Arbiter that petitioner
was illegally dismissed.
The requisites of a valid dismissal are (1) the dismissal must be for any of the causes expressed
in the Article 282 of the Labor Code, 25 and (2) the employee must be given an opportunity to be
heard and to defend himself. 26 The substantive and procedural laws must be strictly complied
with before a worker can be dismissed from his employment because what is at stake is not only
the employee's position but his livelihood. 27
Petitioner's dismissal was grounded on culpade carelessness, negligence and failure to follow
specific instruction(s) or established procedure(s) under OSDA 1.11; and, having forged or
falsified official document(s) under OSDA 2.01.
Private respondent blames petitioner for failure to follow established procedure in the hotel on a
guest's request for long distance calls. Petitioner, however, explained that the usual or
established procedures are not followed by the operators and hotel employees when
circumstances warrant. For instance, the RLDC forms and the deposits are brought by the page
boy directly to the operators instead of the cashiers if the latter are busy and cannot attend to
the same. Furthermore, she avers that the telephone operators are not concious of the serial
numbers in the RLDCs and at times, the used RLDCs are recycled. Even the page boys do not
actually check the serial numbers of all RLDCs in one batch, except for the first and the last.

33

On the charge of taking of the money by petitioner, it is to be noted that the second P500.00
deposit made by the Japanese guest Ieda was later discovered to be inserted in the folder for
cancelled calls with deposit and official receipts. Thus, there exists no basis for personal
appropriation by the petitioner of the money involved. Another reason is the alleged tampering of
RLDC No. 862406. 28 While petitioner and her co-operator Loleng admitted that they indeed
altered the date appearing therein from February 15, 1990 to February 13, the same was
purposely made to reflect the true date of the transaction without any malice whatsoever on their
part.
As pointed out by Labor Arbiter Oswald b. Lorenzo, thus:
The specifics of the grounds relied by respondent hotel's dismissal of
complainant are those stated in Annex "F" of the latter's POSITION PAPER,
which is the Notice of Dismissal, notably:
1. OSDA 2.01 Forging, falsifying official documents(s)
2. OSDA 1.11 Culpable negligence or failure to follow specific
instruction(s) or established procedure(s)
On this score, we are persuated by the complainant's arguments that under
OSDA 1.11, infractions of this sort is not without qualifications, which is, that
the alleged culpable carelessness, negligence or failure to follow
instruction(s) or established procedure(s), RESULTING IN LOSS OR
DAMAGE TO COMPANY PROPERTY. From the facts obtaining in this case,
there is no quantum of proof whatsoever, except the general allegations in
respondent's POSITION PAPER and other pleadings that loss or damage to
company property resulted from the charged infraction. To our mind, this is
where labor tribunals should come in and help correct interpretation of
company policies which in the enforcement thereof wreaks havoc to the
constitutional guarantee of security of tenure. Apparently, the exercise of
little flexibility by complainant and co-employees which is predicated on
good faith should not be taken against them and more particularly against
the complainant herein. In this case, to sustain the generalized charge of
respondent hotel under OSDA 1.11 would unduly be sanctioning the
imposition of too harsh a penalty which is dismissal.
In the same tenor, the respondent's charge under OSDA 1.11 on the alleged
falsification of private document is also with a qualification, in that the
alleged act of falsification must have been done "IN SUCH A WAY AS TO
MISLEAD THE USER(S) THEREOF." Again, based on the facts of the
complained act, there appeared no one to have been misled on the change
of date from RLDC #862406 FROM 15 TO 13 February 1990.
As a matter of fact, we are in agreement with the jurisprudence cited by
VIRGILIO M. PATAG, the 2nd Asst. City Prosecutor of the City of Manila,
who exculpated complainant MANEJA from the charges of falsification of
private documents and qualified theft under IS No. 90-11083 and marked
Annex. "H" of complainant's POSITION PAPER, when he ruled that an
altercation which makes the document speak the truth cannot be the
foundation of a criminal action. As to the charge of qualified theft, we too are
of the finding, like the city prosecutor above-mentioned that there was no

evidence on the part of MANEJA to have unlawfully taken the P500.00

either from the hotel or from guest IEDA on 13 February 1990 and
moreover, we too, find no evidence that complainant MANEJA had intention
to profit thereby nor had misappropriated the P500.00 in question. 29
Given the factual circumstances of the case, we cannot deduce dishonesty from the act and
omission of petitioner. Our norms of social justice demand that we credit employees with the
presumption of good faith in the performance of their duties, 30 especially petitioner who has
served private respondent since 1985 up to 1990 without any tinge of dishonesty and was even
named "Model Employee" for the month of April, 1989. 31
Petitioner has been charged with a very serious offense dishonesty. This can irreparably
wreck her life as an employee for no employer will take to its bosom a dishonest employee.
Dismissal is the supreme penalty that can be meted to an employee and its imposition cannot be
justified where the evidence is ambivalent. 32 It must, therefore, be based on a clear and not on
an ambiguous or ambivalent ground. Any ambiguity or ambivalence on the ground relied upon
by an employer in terminating the services of an employee denies the latter his full right to
contest its legality. Fairness cannot countenance such ambiguity or ambivalence. 33
An employer can terminate the services of an employee only for valid and just causes which
must be supported by clear and convincing evidence. The employer has the burden of proving
that the dismissal was indeed for a valid and just cause. 34 Failure to do so result in a finding that
the dismissal was
unjustified. 35
Finding that there was no just cause for dismissal of petitioner, we now determine if the
rudiments of due process have duly accorded to her.
Well-settled is the dictum that the twin requirements of notice and hearing constitute the
essential elements of due process in the dismissal of employees. It is a cardinal rule in our
jurisdiction that the employer must furnish the employee with two written notice before the
termination of employment can be effected: (a) the first apprises the employee of the particular
acts or omissions for which his dismissal is sought; and, (b) the second informs the employee of
the employer's decision to dismiss him. The requirement of a hearing, on the other hand, is
complied with as long as there was an opportunity to be heard, and not necessarily that an
actual hearing was conducted.36
In the case at bar, petitioner and her co-operator Loleng were issued a memorandum on March
7, 1990. On March 11, 1990, they submitted their written explanation thereto. On March 20,
1990, a written report was made with a recommendation that the offences committed by them
were covered by OSDA 1.11 and 2.01. Thereafter, on March 23, 1990, petitioner was served
with a notice of dismissal for said violations effective April 1, 1990.
An examination of the record reveals that no hearing was ever conducted by private respondent
before petitioner was dismissed. While it may be true that petitioner submitted a written
explanation, no hearing was actually conducted before her employment was terminated. She
was not accorded the opportunity to fully defend herself.
Consultations or conferences may not be a substitute for the actual holding of a hearing. Every
opportunity and assistance must be accorded to the employee by the management to enable
hom to prepare adequately for his defense, including legal representation. 37 Considering that
petitioner denied having allegedly taken the second P500.00 deposit of the Japanese guest

34

which was eventually found; and, having made the alteration of the date on the second RLDC
merely to reflect the true date of the transaction, these circumstances should have at least
warranted a separate hearing to enable petitioner to fully ventilate her side. Absent such
hearing, petitioner's right to due process was clearly violated. 38

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

It bears stressing that a worker's employment is properly in the constitutional sense. He cannot
be deprived of his work without due process of law. Substantive due process mandates that an
employee can only be dismissed based on just or authorized causes. Procedural due
process requires further that he can only be dismissed after he has been given an opportunity to
be heard. The import of due process necessitates the compliance of these two aspects.
Accordingly, we hold that the labor arbiter did not err in awarding full backwages in view of this
finding that petitioner was dismissed without just cause and without due process.
We ruled in the case of Bustamante vs. NLRC 39 that the amount of backwages to be awarded to
an illegally dismissed employee must be computed from the time he was dismissed to the time
he is actually reinstated, without deducting the earnings he derived elsewhere pending the
resolution of the case.

G.R. No. 90426 December 15, 1989

SIME DARBY PILIPINAS, INC., petitioners,
vs.
DEPUTY ADMINISTRATOR BUENAVENTURA C. MAGSALIN as Voluntary Arbitrator and
the SIME DARBY EMPLOYEES ASSOCIATION, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles for petitioner.
Cezar F. Maravilla, Jr. for private respondent.

Petitioner is likewise entitled to the thirteenth-month pay. Presidential Decree No.851, as

amended by Memorandum Order No. 28, provides that employees are entitled to the thirteenthmonth pay benefit regardless of their designation and irrespective of the method by which their
wages are paid. 40

FELICIANO, J.:

The award of moral and exemplary damages to petitioner is also warranted where there is lack
of due process in effecting the dismissal.

The Petition for certiorari before us assails the award of Voluntary Arbitrator Buenaventura
Magsalin dated 17 August 1989 which directed petitioner Sime Darby Pilipinas, Inc. (Sime
Darby) to pay the members of private respondent Sime Darby Employees Association (SDEA) a
performance bonus equivalent to seventy-five percent (75%) of their monthly basic pay for the
year 1988-1989.

Where the termination of the services of an employee is attended by fraud or bad faith on the
part of the employer, as when the latter knowingly made false allegations of a supposed valid
cause when none existed, moral and exemplary damages may be awarded in favor of the
former. 41
The anti-social and oppressive abuse of its right to investigate and dismiss its employees
constitute a violation of Article 1701 of the New Civil Code which prohibits acts of oppression by
either capital or labor against the other, and Article 21 on human relations. The grant of moral
damages to the employees by reason of such conduct on the part of the company is sanctioned
by Article 2219, No. 10 of the Civil Code, which allows recovery of such damages in actions
reffered to in Article 21. 42
The award of attorney's fees amounting to ten percent (10%) of the total award by the labor
arbiter is justified under Article 111 of the Labor Code.
WHEREFORE, premises considered, the petition is GRANTED and the assailed resolutions of
the respondent National Labor Relations Commission dated June 3, 1994 and October 20, 1995
are hereby REVERSED AND SET ASIDE. The decision dated May 29, 1992 of the Labor Arbiter
is therefore REINSTATED.
SO ORDERED.

On 13 June 1989, petitioner Sime Darby and private respondent SDEA executed a Collective
Bargaining Agreement (CBA) providing, among others, that:
Article X, Section 1. A performance bonus shall be granted, the amount of
which [is] to be determined by the Company depending on the return of [sic]
capital investment as reflected in the annual financial statement.
On 31 July 1989, the Sime Darby Salaried Employees Association- ALU (SDSEA-ALU) wrote
petitioner demanding the implementation of a provision Identical to the above contained in their
own CBA with petitioner. Subsequently, petitioner called both respondent SDEA and SDEA-ALU
to a meeting wherein the former explained that it was unable to grant the performance bonus
corresponding to the fiscal year 1988-1989 on the ground that the workers' performance during
said period did not justify the award of such bonus. On 27 July 1989, private respondent SDEA
filed with the National Conciliation and Mediation Board (NCMB) an urgent request for
preventive conciliation between private respondent and petitioner.
On 1 August 1989, the parties were called to a conciliation meeting and in such meeting, both
parties agreed to submit their dispute to voluntary arbitration. Their agreement to arbitrate
stated, among other things, that they were "submitting the issue of performance bonus to
voluntary arbitration" and that "the decision/award of the voluntary arbitrator shall be respected
and implemented by the parties as final and executory, in accordance with the law." 1

35

On 14 August 1989, petitioner filed its position paper which aimed to show that the performance
of the members of respondent union during the year was below the production goals or targets
set by Sime Darby for 1988-1989 and below previous years' levels for which reason the
performance bonus could not be granted. Petitioner there referred to the following performance
indicators: a) number of tires produced; b) degree of wastage of production materials; and c)
number of pounds of tires produced per man hour. On that same day, 14 August 1989, petitioner
manifested before the Voluntary Arbitrator that it would file a Reply to the union's Position Paper
submitted on 10 August 1989 not later than 18 August 1989.
However, before petitioner could submit its Reply to the union's Position Paper, the Voluntary
Arbitrator on 17 August 1989 issued an award which declared respondent union entitled to a
performance bonus equivalent to 75% of the monthly basic pay of its members. In that award,
the Voluntary Arbitrator held that a reading of the CBA provision on the performance bonus
would show that said provision was mandatory hence the only issue to be resolved was the
amount of performance bonus. The Voluntary Arbitrator further stated that petitioner company's
financial statements as of 30 June 1988 revealed retained earnings in the amount of P
324,370,372.32. From the foregoing, the Voluntary Arbitrator concluded that petitioner company
could well afford to give members of respondent union a substantial performance bonus. The
Voluntary Arbitrator also stated that there was evidence to show that the company has given
performance bonuses to its managerial and non-unionized employees as well as to monthly paid
workers of the year 1988-1989.
Petitioner filed a motion for reconsideration which motion was not entertained by the Voluntary
Arbitrator upon the ground that under the ruling of this Court in Solidbank v. Bureau of Labor
Relations, (G.R. No. 64926, promulgated 8 October 1984; unpublished) he, the Voluntary
Arbitrator, had automatically lost jurisdiction over the arbitration case upon the issuance of the
award.
In this Petition for Certiorari, petitioner mainly argues that respondent Voluntary Arbitrator
gravely abused his discretion in holding that the grant of performance bonus was mandatory and
that the only issue before him was the amount of the bonus. It is contended that since a
performance bonus is a "gift" based on the company's performance, the same is not justified
when the company's performance has been poor. Petitioner claims that during the fiscal year of
1988-1989, the company performed poorly as shown by the decline in tire production for the
said year as well as the increase of the rate of wastage of production materials, and also by the
decrease in the number of tires produced per man hour. Petitioner also argues that even if a
performance bonus were justified, the Voluntary Arbitrator gravely abused his discretion in giving
an award of 75% of the monthly basic rate without any evidence of the basis used in arriving at
such an award. It is insisted that under the relevant CBA provision, the company determines the
amount of the bonus if the same be justified. Petitioner also alleged that respondent Arbitrator
gravely erred when he based the award on the company's retained earnings the level of which
represents earnings accumulated during prior years and not merely during the fiscal year 19881989.
On 8 November 1989, the Court temporarily restrained the enforcement of the Voluntary
Arbitrator's award to prevent the petition at bar becoming moot and academic.
We are not persuaded by petitioner's arguments.
One point needs to be stressed at the outset: the award of a Voluntary Arbitrator is final and
executory after ten (10) calendar days from receipt of the award by the parties. 2 There was a
time when the award of a Voluntary Arbitrator relating to money claims amounting to more than
P 100,000.00 or forty percent (40%) of the paid-up capital of the employer (whichever was

lower), could be appealed to the National Labor Relations Commission upon the grounds of (a)
abuse of discretion; or (b) gross incompetence, presumably of the arbitrator. 3 This is no longer
so today although, of course, certiorari will lie in appropriate cases. A petition for certiorari under
Rule 65 of the Revised Rules of Court will lie only where a grave abuse of discretion or an act
without or in excess of jurisdiction on the part of the Voluntary Arbitrator is clearly shown. It must
be borne in mind that the writ of certiorari is an extraordinary remedy and
that certiorari jurisdiction is not to be equated with appellate jurisdiction. In a special civil action
of certiorari, the Court will not engage in a review of the facts found nor even of the law as
interpreted or applied by the Arbitrator unless the supposed errors of fact or of law are so patent
and gross and prejudicial as to amount to a grave abuse of discretion or an excess de pouvoir
on the part of the Arbitrator. 4 The Labor Code and its Implementing Rules thus clearly reflect the
important public policy of encouraging recourse to voluntary arbitration and of shortening the
arbitration process by rendering the arbitral award non- appealable to the NLRC. The result is
that a voluntary arbitral award may be modified and set aside only upon the same grounds on
which a decision of the NLRC itself may be modified or set aside, by this Court.
Examination of the pleadings in the instant Petition shows that two (2) principal issues are
raised: The first is whether or not the Voluntary Arbitrator acted with grave abuse of discretion or
without or in excess of jurisdiction in passing upon both the question of whether or not a
performance bonus is to be granted by petitioner Sime Darby to the private respondents and the
further question of the amount thereof. The second is whether or not the award by the Arbitrator
of a performance bonus amounting to seventy five percent (75%) of the basic monthly salary of
members of private respondent union itself constituted a grave abuse of discretion or an act
without or in excess of jurisdiction. We consider these issues seriatim
1. In respect of the first issue, petitioner Sime Darby urges that the Arbitrator
gravely abused his discretion in passing upon not only the question of
whether or not a performance bonus is to be granted but also, in the
affirmative case, the matter of the amount thereof. The position of petitioner,
to the extent we can understand it, is that the Arbitrator was authorized to
determine only the question of whether or not a performance bonus was to
be granted, the second question being reserved for determination by the
employer Sime Darby. We noted earlier that in their agreement to arbitrate,
the parties submitted to the Voluntary Arbitrator "the issue of performance
bonus." The language of the agreement to arbitrate may be seen to be quite
cryptic. There is no indication at all that the parties to the arbitration
agreement regarded "the issue of performance bonus" as a two-tiered
issue, only one tier of which was being submitted to arbitration. Possibly,
Sime Darby's counsel considered that issue as having dual aspects and
intended in his own mind to submit only one of those aspects to the
Arbitrator; if he did, however, he failed to reflect his thinking and intent in the
arbitration agreement.
It is thus essential to stress that the Voluntary Arbitrator had plenary jurisdiction and authority to
interpret the agreement to arbitrate and to determine the scope of his own authority subject only,
in a proper case, to thecertiorari jurisdiction of this Court. The Arbitrator, as already indicated,
viewed his authority as embracing not merely the determination of the abstract question of
whether or not a performance bonus was to be granted but also, in the affirmative case, the
amount thereof. The Arbitrator said in his award:
At this juncture, it would not be amiss to emphasize to the parties that the
matter of performance bonus necessarily includes not only the
determination of the existence of the right of the union to this benefit but
also the amount thereof. This conclusion arises from a perusal of the terms

36

of the submission agreement entered into by Sime Darby Pilipinas, Inc. and
Sime Darby Employees Association which limited the voluntary arbitration
only with regard to submission of position papers of the parties, disposition
and rendition of the award. Nary (sic) a trace of qualification as to the sole
issue of performance bonus may be gleaned from a review of said
agreement.
With that as a timely reminder, this Arbitrator now proceeds to resolve the
issues herein submitted for resolution. Without doubt, the Sime Darby
Employees Association is entitled to performance bonus. This conclusion
arises from an analysis of the imperative terms of the CBA provision on
production bonus, hereinunder reproduced, to wit:
A performance bonus shall be granted the amount of which to be
determined by the Company depending on the return of capital investment
as reflected in the annual financial statements. 5(Emphasis supplied)
Analysis of the relevant provisions of the CBA between the parties and examination of the record
of the instant case lead us to the conclusion that the Arbitrator's reading of the scope of his own
authority must be sustained.
Article X, Section 1 of the CBA is, grammatically speaking, cast in mandatory terms: "A
performance bonus shall be granted ..." The CBA provision goes on, however, immediately to
say that the amount of the performance bonus "[is] to be determined by the Company." Thus,
notwithstanding the literal or grammatical tenor of Article X, Section 1, as a practical matter, only
the issue relating to the amount of the bonus to be declared appears important. Not much
reflection is needed to show that the critical issue is the scope of authority of the company to
determine the amount of any bonus to be granted. If the company's discretionary authority were
to be regarded as unlimited and if the company may declare in any event a merely nominal
bonus, the use of mandatory language in Article X, Section 1, would seem largely illusory and
cosmetic in effect. Alternatively, even if one were to disregard the use of "shall" rather than "may"
in Article X, Section 1, the question of whether or not a performance bonus is to be granted, still
cannot realistically be dissociated from the intensely practical issue of the amount of the bonus
to be granted. It is noteworthy that petitioner Sime Darby itself did not spend much time
discussing as an abstract question whether or not the grant of a performance bonus is per se
obligatory upon the company. Petitioner instead focused upon the production performance of the
company's employees as bearing upon the appropriateness of any amount of bonus. Further, if
petitioner Sime Darby's argument were to be taken seriously, one must conclude that the parties
to the arbitration agreement intended to refer only a theoretical and practically meaningless
issue to the Voluntary Arbitrator, a conclusion that we find thoroughly unacceptable.
2. We turn then to the issue of whether or not the Voluntary Arbitrator
gravely abused his discretion or acted without or in excess of jurisdiction in
awarding an amount equivalent to seventy-five percent (75%) of the basic
monthly pay of members of respondent union. Petitioner Sime Darby
contends that that award is devoid of factual basis. We understand this
contention to be that the Arbitrator did not apply the relevant CBA provision.
Once more, we are not persuaded by petitioner's contention.
Article X, Section 1 of the CBA does not in express terms identify whose performance is to
appraised in determining an appropriate amount to be awarded as performance bonus. The

Court considers that it is the performance of the company as a whole, and not merely the
production or manufacturing performance of its employees, which is relevant in that
determination. The CBA provision refers to the return on investment of the company (ROI). The
return on the stockholders' investment, as we understand it, relates basically to the net profits
shown by the company and therefore to many more factors than simply the extent to which
production targets were achieved or the rise and fall of the manufacturing efficiency ratios.
Among those factors would be the cost of production, the quality of the products, the cost of
money, the debt-equity ratio, the cost of sales, the level of taxes due and payable, the gross
revenues realized, and so forth.
We note upon the other hand, that petitioner's counsel failed to discuss at all before the
Voluntary Arbitrator the rate of return on stockholders' investment achieved by Sime Darby for
the year 1988- 1989; as earlier noted, counsel confined his argument and the evidence
submitted by him to the number of tires produced, the decrease in the rate of wastage of
manufacturing materials, and the productivity of the work force measured in terms of the number
of tires produced per man hour.
The Voluntary Arbitrator, upon the other hand, explicitly considered the net earnings of petitioner
Sime Darby in 1988 (P 100,000,000.00) and in the first semester of 1989 (P 95,377,507.00) as
well as the increase in the company's retained earnings from P 265,729,826.00 in 1988 to P
324, 370,372.00 as of 30 June 1989. Thus, the Arbitrator impliedly or indirectly took into account
the return on stockholders' investment realized for the fiscal year 1988-1989. It should also be
noted that the relevant CBA provision does not specify a minimum rate of return on investment
(ROI) which must be realized before any particular amount of bonus may or should be declared
by the company.
The Voluntary Arbitrator also took into account, again in an indirect manner, the performance of
Sime Darby's employees by referring in his award to "the total labor cost incurred by the
Company":
This Arbitrator, however, is well aware that any effort in this regard must be
tempered and balanced as against the need to sustain the continued
viability of Sime Darby Pilipinas, Inc. in accordance with the constitutional
provision which recognizes the 'right of enterprise to reasonable returns on
investment and to expansion and growth.' Furthermore, any award to be
rendered must likewise take into account the total labor cost incurred by the
Company. It should not merely be confined to those pertaining to the
members of the Sime Darby Employees Association but necessarily include
that which shall be paid and granted to all other employees of Sime Darby
this year. 6 (Emphasis supplied)
On balance, we believe and so hold that the award of the Voluntary Arbitrator of a bonus
amounting to seventy-five percent (75%) of the basic monthly salary cannot be said to be merely
arbitrary or capricious or to constitute an excess de pouvoir.
The remaining assertions of petitioner Sime Darby relating to denial of procedural due process
by the Voluntary Arbitrator, consisting of failure to wait for petitioner's announced Reply
(basically reiterative and amplificatory in nature) to the union's Position Paper and of alleged
failure to consider evidence submitted by petitioner, do not require extended consideration; they
are evidently bereft of merit.

37

WHEREFORE, the Petition for Certiorari is DISMISSED for lack of merit. The Temporary
Restraining Order issued on 8 November 1989 is hereby LIFTED. This Decision is immediately
executory. Costs against petitioner.

On July 12, 1988, the Voluntary Arbitrator rendered a decision upholding the formula used by the
Company.
The Union filed a motion for reconsideration which was opposed by the Company.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 94960 March 8, 1993

IMPERIAL TEXTILE MILLS, INC., petitioner,
vs.
HON. VLADIMIR P.L. SAMPANG and IMPERIAL TEXTILE MILLS-MONTHLY EMPLOYEES
ASSOCIATION (ITM-MEA), respondents.
Batino, Angala, Salud & Fabia Law Offices for petitioner.
Carlo A. Domingo for private respondent.

CRUZ, J.:
On March 20, 1987, petitioner Imperial Textile Mills, Inc. (the Company, for brevity) and
respondent Imperial Textile Mills-Monthly Employees Association (the Union, for brevity) entered
into a collective bargaining agreement providing across-the-board salary increases and other
benefits retroactive to November 1, 1986.
On August 21, 1987, they executed another agreement on the job classification and wage
standardization plan. This was also to take effect retroactively on November 1, 1986.
A dispute subsequently arose in the interpretation of the two agreements. The parties then
submitted it to arbitration and designated public respondent Vladimir P.L. Sampang as the
Voluntary Arbitrator. The understanding was that his decision would be final, executory and
inappealable. 1
The Company maintained that the wage of a particular employee subject of possible adjustment
on base pay should be the pay with the first year CBA increase already integrated therein.
The Union argued that the CBA increases should not be included in adjusting the wages to the
base pay level, as it was separate and distinct from the increases resulting from the job
classification and standardization scheme.

On December 14, 1988, after a conference with the parties, the Voluntary Arbitrator rendered
another decision, this time in favor of the Union.
On January 20, 1989, the Company appealed to the NLRC. The appeal was dismissed for lack
of jurisdiction. The reason was that the original rule allowing appeal if the Voluntary Arbitrator's
award was more than P100,000.00 had already been repealed by BP 130. Moreover, under
Article 262-A of the Labor Code, as amended, awards or decisions of voluntary arbitrators
become final and executory after calendar 10 days from notice thereof to the parties.
The Company then came to this Court in this petition for certiorari under Rule 65 of the Rules of
Court.
The Court has deliberated on the arguments of the parties in light of the established facts and
the applicable law and finds for the Company.
The Union erred in filing a motion for reconsideration of the decision dated July 12, 1988. So did
the respondent Voluntary Arbitrator in entertaining the motion and vacating his first decision.
When the parties submitted their grievance to arbitration, they expressly agreed that the
decision of the Voluntary Arbitrator would be final, executory and inappealable. In fact, even
without this stipulation, the first decision had already become so by virtue of Article 263 of the
Labor Code making voluntary arbitration awards or decisions final and executory.
The philosophy underlying this rule was explained by Judge Freedman in the case of La Vale
Plaza, Inc., v. R.S. Noonan, Inc., 2 thus:
It is an equally fundamental common law principle that once an arbitrator
has made and published a final award, his authority is exhausted and be
is functus officio and can do nothing more in regard to the subject matter of
the arbitration. The policy which lies behind this is an unwillingness to permit
one who not a is judicial officer and who acts informally and sporadically, to
re-examine a final decision which he has already rendered, because of the
potential evil of outside communication and unilateral influence which might
affect a new conclusion. The continuity of judicial office and the tradition
which surround judicial conduct is lacking in the isolated activity of an
arbitrator, although even here the vast increase in the arbitration of labor
disputes has created the office of the specialized provisional arbitrator.
(Washington-Baltimore N.G., Loc. 35 v. Washington Post Co., 442 F. 2d
1234 (1971], pp. 1238-1239)
In the case of The Consolidated Bank & Trust Corporation (SOLIDBANK) v. Bureau of Labor
Relations, et al., 3this Court held that the Voluntary Arbitrator lost jurisdiction over the case
submitted to him the moment be rendered his decision. Therefore, he could no longer entertain a
motion for reconsideration of the decision for its reversal or modification. Thus:

38

By modifying the original award, respondent arbitrator exceeded his

authority as such, a fact he was well aware of, as shown by his previous
Resolution of Inhibition wherein he refused to act on the Union's motion for
reconsideration of the award or decision. Thus, respondent arbitrator
emphatically ruled:
It would be well to remind the Parties in this case that
the arbitration law or jurisprudence on the matter is
explicit in its stand against revocation and amendment
of the submission agreement and the arbitration award
once such has been made. The rationale behind this is
that:
An award should be regarded as the judgment of a
court of last resort, so that all reasonable presumptions
should be ascertained in its favor and none to
overthrow it. Otherwise, arbitration proceedings, instead
of being a quick and easy mode of obtaining justice,
would be merely an unnecessary step in the course of
litigation, causing delay and expenses, but not finally
settling anything. Notwithstanding the natural
reluctance of the courts to interfere with matters
determined by the arbitrators. they will do so in proper
cases where the law ordains them. (Arbitration,
Manguiat, citing U.S. v. Gleason, 175 US 588)
The power and authority of the Voluntary Arbitrator to act in the case
commences from his appointment and acceptance to act as such under the
submission agreement of the Parties andterminates upon his rendition of
his decision or award which is accorded the benefits of the doctrine of res
judicata as in judgments of our regular courts of law. Since the power and
authority of the arbitrator to render a valid award, order or resolution rest
upon the continuing mutual consent of the parties, and there is none shown
here, the Voluntary Arbitrator has no choice but to decline to rule on the
pleadings submitted by the parties. (Emphasis supplied)
It is true that the present rule makes the voluntary arbitration award final and executory after ten
calendar days from receipt of the copy of the award or decision by the parties. 4 Presumably, the
decision may still be reconsidered by the Voluntary Arbitrator on the basis of a motion for
reconsideration duly filed during that period. Such a provision, being procedural, may be applied
retroactively to pending actions as we have held in a number of cases. 5 However, it cannot be
applied to a case in which the decision had become final before the new provision took effect, as
in the case at bar. 6 R.A. 6715, which introduced amended Article 262-A of the Labor Code,
became effective on March 21, 1989. The first decision of the Voluntary Arbitrator was rendered
on July 12, 1988, when the law in force was Article 263 of the Labor Code, which provided that:
Voluntary arbitration awards or decisions shall be final, inappealable, and
executory.
The above-quoted provision did not expressly fix the time when the Voluntary Arbitrator's
decision or award would become final. We have held, however, that it would assume the
attribute of finality upon its issuance, subject only to judicial review in appropriate cases. 7

The public respondent exceeded his authority when he acted on the Union's motion for
reconsideration and reversed his original decision. Corollarily his second decision dated
December 14, 1988, having been rendered in violation of law, must be considered null and void
and of no force and effect whatsoever. 8
WHEREFORE, the decision of the Voluntary Arbitrator dated December 14, 1988, is SET ASIDE
for lack of jurisdiction and his decision dated July 12, 1988, is REINSTATED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-43825 May 9, 1988
CONTINENTAL MARBLE CORP. and FELIPE DAVID, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC); ARBITRATOR JOSE T. COLLADO
and RODITO NASAYAO, respondents.
Benito P. Fabie for petitioners.
Narciso C. Parayno, Jr. for respondents.

PADILLA, J.:
In this petition for mandamus, prohibition and certiorari with preliminary injunction, petitioners
seek to annul and set aside the decision rendered by the respondent Arbitrator Jose T. Collado,
dated 29 December 1975, in NLRC Case No. LR-6151, entitled: "Rodito Nasayao,
complainant, versus Continental Marble Corp. and Felipe David, respondents," and the
resolution issued by the respondent Commission, dated 7 May 1976, which dismissed herein
petitioners' appeal from said decision.
In his complaint before the NLRC, herein private respondent Rodito Nasayao claimed that
sometime in May 1974, he was appointed plant manager of the petitioner corporation, with an
alleged compensation of P3,000.00, a month, or 25% of the monthly net income of the company,
whichever is greater, and when the company failed to pay his salary for the months of May,
June, and July 1974, Rodito Nasayao filed a complaint with the National Labor Relations
Commission, Branch IV, for the recovery of said unpaid varies. The case was docketed therein
as NLRC Case No. LR-6151.
Answering, the herein petitioners denied that Rodito Nasayao was employed in the company as
plant manager with a fixed monthly salary of P3,000.00. They claimed that the undertaking
agreed upon by the parties was a joint venture, a sort of partnership, wherein Rodito Nasayao

39

was to keep the machinery in good working condition and, in return, he would get the contracts
from end-users for the installation of marble products, in which the company would not interfere.
In addition, private respondent Nasayao was to receive an amount equivalent to 25% of the net
profits that the petitioner corporation would realize, should there be any. Petitioners alleged that
since there had been no profits during said period, private respondent was not entitled to any
amount.
The case was submitted for voluntary arbitration and the parties selected the herein respondent
Jose T. Collado as voluntary arbitrator. In the course of the proceedings, however, the herein
petitioners challenged the arbitrator's capacity to try and decide the case fairly and judiciously
and asked him to desist from further hearing the case. But, the respondent arbitrator refused. In
due time, or on 29 December 1975, he rendered judgment in favor of the complainant, ordering
the herein petitioners to pay Rodito Nasayao the amount of P9,000.00, within 10 days from
notice. 1
Upon receipt of the decision, the herein petitioners appealed to the National Labor Relations
Commission on grounds that the labor arbiter gravely abused his discretion in persisting to hear
and decide the case notwithstanding petitioners' request for him to desist therefrom: and that the
appealed decision is not supported by evidence. 2
On 18 March 1976, Rodito Nasayao filed a motion to dismiss the appeal on the ground that the
decision of the voluntary arbitrator is final, unappealable, and immediately executory; 3 and, on
23 March 1976, he filed a motion for the issuance of a writ of execution. 4
Acting on the motions, the respondent Commission, in a resolution dated 7 May 1976, dismissed
the appeal on the ground that the decision appealed from is final, unappealable and immediately
executory, and ordered the herein petitioners to comply with the decision of the voluntary
arbitrator within 10 days from receipt of the resolution. 5
The petitioners are before the Court in the present recourse. As prayed for, the Court issued a
temporary restraining order, restraining herein respondents from enforcing and/or carrying out
the questioned decision and resolution. 6
The issue for resolution is whether or not the private respondent Rodito Nasayao was employed
as plant manager of petitioner Continental Marble Corporation with a monthly salary of
P3,000.00 or 25% of its monthly income, whichever is greater, as claimed by said respondent, or
entitled to receive only an amount equivalent to 25% of net profits, if any, that the company
would realize, as contended by the petitioners.
The respondent arbitrator found that the agreement between the parties was for the petitioner
company to pay the private respondent, Rodito Nasayao, a monthly salary of P3,000.00, and,
consequently, ordered the company to pay Rodito Nasayao the amount of P9,000.00 covering a
period of three (3) months, that is, May, June and July 1974.
The respondent Rodito Nasayao now contends that the judgment or award of the voluntary
arbitrator is final, unappealable and immediately executory, and may not be reviewed by the
Court. His contention is based upon the provisions of Art. 262 of the Labor Code, as amended.
The petitioners, upon the other hand, maintain that "where there is patent and manifest abuse of
discretion, the rule on unappealability of awards of a voluntary arbitrator becomes flexible and it
is the inherent power of the Courts to maintain the people's faith in the administration of justice."

The question of the finality and unappealability of a decision and/or award of a voluntary
arbitrator had been laid to rest in Oceanic Bic Division (FFW) vs. Romero, 7 and reiterated
in Mantrade FMMC Division Employees and Workers Union vs. Bacungan. 8 The Court therein
ruled that it can review the decisions of voluntary arbitrators, thusWe agree with the petitioner that the decisions of voluntary arbitrators must
be given the highest respect and as a general rule must be accorded a
certain measure of finality. This is especially true where the arbitrator
chosen by the parties enjoys the first rate credentials of Professor Flerida
Ruth Pineda Romero, Director of the U.P. Law Center and an academician
of unquestioned expertise in the field of Labor Law. It is not correct,
however, that this respect precludes the exercise of judicial review over their
decisions. Article 262 of the Labor Code making voluntary arbitration awards
final, inappealable, and executory except where the money claims exceed P
l 00,000.00 or 40% of paid-up capital of the employer or where there is
abuse of discretion or gross incompetence refers to appeals to the National
Labor Relations Commission and not to judicial review.
Inspite of statutory provisions making 'final' the decisions of certain
administrative agencies, we have taken cognizance of petitions questioning
these decisions where want of jurisdiction, grave abuse of discretion,
violation of due process, denial of substantial justice, or erroneous
interpretation of the law were brought to our attention. There is no provision
for appeal in the statute creating the Sandiganbayan but this has not
precluded us from examining decisions of this special court brought to us in
proper petitions. ...
The Court further said:
A voluntary arbitrator by the nature of her fucntions acts in quasi-judicial
capacity. There is no reason why herdecisions involving interpretation of law
should be beyond this Court's review. Administrative officials are presumed
to act in accordance with law and yet we do hesitate to pass upon their work
where a question of law is involved or where a showing of abuse of authority
or discretion in their official acts is properly raised in petitions for certiorari.
The foregoing pronouncements find support in Section 29 of Republic Act No. 876, otherwise
known as the Arbitration Law, which provides:
Sec. 29. Appeals An appeal may be taken from an order made in a
proceeding under this Act, or from a judgment entered upon an award
through certiorari proceedings, but such appeals shall be limited to
questions of law. The proceedings upon such an appeal, including the
judgment thereon shall be governed by the Rules of Court in so far as they
are applicable.
The private respondent, Rodito Nasayao, in his Answer to the petition, 9 also claims that the
case is premature for non-exhaustion of administrative remedies. He contends that the decision
of the respondent Commission should have been first appealed by petitioners to the Secretary of
Labor, and, if they are not satisfied with his decision, to appeal to the President of the
Philippines, before resort is made to the Court.

40

The contention is without merit. The doctrine of exhaustion of administrative remedies cannot be
invoked in this case, as contended. In the recent case of John Clement Consultants, Inc. versus
National Labor Relations Commission, 10 the Court said:
As is well known, no law provides for an appeal from decisions of the
National Labor Relations Commission; hence, there can be no review and
reversal on appeal by higher authority of its factual or legal conclusions.
When, however, it decides a case without or in excess of its jurisdiction, or
with grave abuse of discretion, the party thereby adversely affected may
obtain a review and nullification of that decision by this Court through the
extraordinary writ of certiorari. Since, in this case, it appears that the
Commission has indeed acted without jurisdiction and with grave abuse of
discretion in taking cognizance of a belated appeal sought to be taken from
a decision of Labor Arbiter and thereafter reversing it, the writ of certiorari
will issue to undo those acts, and do justice to the aggrieved party.
We also find no merit in the contention of Rodito Nasayao that only questions of law, and not
findings of fact of a voluntary arbitrator may be reviewed by the Court, since the findings of fact
of the voluntary arbitrator are conclusive upon the Court.
While the Court has accorded great respect for, and finality to, findings of fact of a voluntary
arbitrator 11 and administrative agencies which have acquired expertise in their respective fields,
like the Labor Department and the National Labor Relations Commission, 12 their findings of fact
and the conclusions drawn therefrom have to be supported by substantial evidence. ln that
instant case, the finding of the voluntary arbitrator that Rodito Nasayao was an employee of the
petitioner corporation is not supported by the evidence or by the law.

In the instant case, it appears that the petitioners had no control over the conduct of Rodito
Nasayao in the performance of his work. He decided for himself on what was to be done and
worked at his own pleasure. He was not subject to definite hours or conditions of work and, in
turn, was compensated according to the results of his own effort. He had a free hand in running
the company and its business, so much so, that the petitioner Felipe David did not know, until
very much later, that Rodito Nasayao had collected old accounts receivables, not covered by
their agreement, which he converted to his own personal use. It was only after Rodito Nasayao
had abandoned the plant following discovery of his wrong- doings, that Felipe David assumed
management of the plant.
Absent the power to control the employee with respect to the means and methods by which his
work was to be accomplished, there was no employer-employee relationship between the
parties. Hence, there is no basis for an award of unpaid salaries or wages to Rodito Nasayao.
WHEREFORE, the decision rendered by the respondent Jose T. Collado in NLRC Case No. LR6151, entitled: "Rodito Nasayao, complainant, versus Continental Marble Corp. and Felipe
David, respondents," on 29 December 1975, and the resolution issued by the respondent
National Labor Relations Commission in said case on 7 May 1976, are REVERSED and SET
ASIDE and another one entered DISMISSING private respondent's complaints. The temporary
restraning order heretofore isued by the Court is made permanent. Without costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

On the other hand, we find the version of the petitioners to be more plausible and in accord with
human nature and the ordinary course of things. As pointed out by the petitioners, it was illogical
for them to hire the private respondent Rodito Nasayao as plant manager with a monthly salary
of P3,000.00, an amount which they could ill-afford to pay, considering that the business was
losing, at the time he was hired, and that they were about to close shop in a few months' time.
Besides, there is nothing in the record which would support the claim of Rodito Nasayao that he
was an employee of the petitioner corporation. He was not included in the company payroll, nor
in the list of company employees furnished the Social Security System.
Most of all, the element of control is lacking. In Brotherhood Labor Unity Movement in the
Philippines vs. Zamora,13 the Court enumerated the factors in determining whether or not an
employer-employee relationship exists, to wit:
In determining the existence of an employer-employee relationship, the
elements that are generally considered are the following: (a) the selection
and engagement of the employee; (b) the payment of wages; (c) the power
of dismissal; and (d) the employer's power to control the employee with
respect to the means and methods by which the work is to be
accomplished. It is the so-called "control test" that is the most important
element (Investment Planning Corp. of the Phils. vs. The Social Security
System, 21 SCRA 924; Mafinco Trading Corp. v. Ople, supra, and Rosario
Brothers, Inc. v. Ople, 131 SCRA 72).<re||an1w>

EN BANC

G.R. No. 120319 October 6, 1995

LUZON DEVELOPMENT BANK, petitioner,
vs.
ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S.
GARCIA in her capacity as VOLUNTARY ARBITRATOR, respondents.

ROMERO, J.:
From a submission agreement of the Luzon Development Bank (LDB) and the Association of
Luzon Development Bank Employees (ALDBE) arose an arbitration case to resolve the following
issue:
Whether or not the company has violated the Collective Bargaining
Agreement provision and the Memorandum of Agreement dated April 1994,
on promotion.

41

At a conference, the parties agreed on the submission of their respective Position Papers on
December 1-15, 1994. Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received
ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to submit its
Position Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of May
23, 1995 no Position Paper had been filed by LDB.
On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a decision
disposing as follows:
WHEREFORE, finding is hereby made that the Bank has not adhered to the
Collective Bargaining Agreement provision nor the Memorandum of
Agreement on promotion.

On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction over the
following enumerated cases:
. . . (a) Except as otherwise provided under this Code the Labor Arbiters
shall have original and exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by the parties for
decision without extension, even in the absence of stenographic notes, the
following cases involving all workers, whether agricultural or nonagricultural:
1. Unfair labor practice cases;
2. Termination disputes;

Hence, this petition for certiorari and prohibition seeking to set aside the decision of the
Voluntary Arbitrator and to prohibit her from enforcing the same.
In labor law context, arbitration is the reference of a labor dispute to an impartial third person for
determination on the basis of evidence and arguments presented by such parties who have
bound themselves to accept the decision of the arbitrator as final and binding.
Arbitration may be classified, on the basis of the obligation on which it is based, as either
compulsory or voluntary.
Compulsory arbitration is a system whereby the parties to a dispute are compelled by the
government to forego their right to strike and are compelled to accept the resolution of their
dispute through arbitration by a third party. 1The essence of arbitration remains since a resolution
of a dispute is arrived at by resort to a disinterested third party whose decision is final and
binding on the parties, but in compulsory arbitration, such a third party is normally appointed by
the government.
Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made,
pursuant to a voluntary arbitration clause in their collective agreement, to an impartial third
person for a final and binding resolution. 2Ideally, arbitration awards are supposed to be complied
with by both parties without delay, such that once an award has been rendered by an arbitrator,
nothing is left to be done by both parties but to comply with the same. After all, they are
presumed to have freely chosen arbitration as the mode of settlement for that particular dispute.
Pursuant thereto, they have chosen a mutually acceptable arbitrator who shall hear and decide
their case. Above all, they have mutually agreed to de bound by said arbitrator's decision.
In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are required to
include therein provisions for a machinery for the resolution of grievances arising from the
interpretation or implementation of the CBA or company personnel policies. 3 For this purpose,
parties to a CBA shall name and designate therein a voluntary arbitrator or a panel of arbitrators,
or include a procedure for their selection, preferably from those accredited by the National
Conciliation and Mediation Board (NCMB). Article 261 of the Labor Code accordingly provides
for exclusive original jurisdiction of such voluntary arbitrator or panel of arbitrators over (1) the
interpretation or implementation of the CBA and (2) the interpretation or enforcement of
company personnel policies. Article 262 authorizes them, but only upon agreement of the
parties, to exercise jurisdiction over other labor disputes.

3. If accompanied with a claim for reinstatement, those cases that workers

may file involving wages, rates of pay, hours of work and other terms and
conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising
from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare
and maternity benefits, all other claims, arising from employer-employee
relations, including those of persons in domestic or household service,
involving an amount exceeding five thousand pesos (P5,000.00) regardless
of whether accompanied with a claim for reinstatement.
xxx xxx xxx
It will thus be noted that the jurisdiction conferred by law on a voluntary arbitrator or a panel of
such arbitrators is quite limited compared to the original jurisdiction of the labor arbiter and the
appellate jurisdiction of the National Labor Relations Commission (NLRC) for that matter. 4 The
state of our present law relating to voluntary arbitration provides that "(t)he award or decision of
the Voluntary Arbitrator . . . shall be final and executory after ten (10) calendar days from receipt
of the copy of the award or decision by the parties," 5 while the "(d)ecision, awards, or orders of
the Labor Arbiter are final and executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decisions, awards, or orders." 6 Hence,
while there is an express mode of appeal from the decision of a labor arbiter, Republic Act No.
6715 is silent with respect to an appeal from the decision of a voluntary arbitrator.
Yet, past practice shows that a decision or award of a voluntary arbitrator is, more often than not,
elevated to the Supreme Court itself on a petition for certiorari, 7 in effect equating the voluntary
arbitrator with the NLRC or the Court of Appeals. In the view of the Court, this is illogical and
imposes an unnecessary burden upon it.
In Volkschel Labor Union, et al. v. NLRC, et al., 8 on the settled premise that the judgments of
courts and awards of quasi-judicial agencies must become final at some definite time, this Court

42

ruled that the awards of voluntary arbitrators determine the rights of parties; hence, their
decisions have the same legal effect as judgments of a court. In Oceanic Bic Division (FFW), et
al. v. Romero, et al., 9 this Court ruled that "a voluntary arbitrator by the nature of her functions
acts in a quasi-judicial capacity." Under these rulings, it follows that the voluntary arbitrator,
whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency but
independent of, and apart from, the NLRC since his decisions are not appealable to the latter. 10
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of
Appeals shall exercise:
xxx xxx xxx
(B) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards or commissions, including the Securities
and Exchange Commission, the Employees Compensation Commission
and the Civil Service Commission, except those falling within the appellate
jurisdiction of the Supreme Court in accordance with the Constitution, the
Labor Code of the Philippines under Presidential Decree No. 442, as
amended, the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of
the Judiciary Act of 1948.
xxx xxx xxx
Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not
strictly be considered as a quasi-judicial agency, board or commission, still both he and the
panel are comprehended within the concept of a "quasi-judicial instrumentality." It may even be
stated that it was to meet the very situation presented by the quasi-judicial functions of the
voluntary arbitrators here, as well as the subsequent arbitrator/arbitral tribunal operating under
the Construction Industry Arbitration Commission, 11 that the broader term "instrumentalities" was
purposely included in the above-quoted provision.
An "instrumentality" is anything used as a means or agency. 12 Thus, the terms governmental
"agency" or "instrumentality" are synonymous in the sense that either of them is a means by
which a government acts, or by which a certain government act or function is performed. 13 The
word "instrumentality," with respect to a state, contemplates an authority to which the state
delegates governmental power for the performance of a state function. 14 An individual person,
like an administrator or executor, is a judicial instrumentality in the settling of an estate, 15 in the
same manner that a sub-agent appointed by a bankruptcy court is an instrumentality of the
court, 16 and a trustee in bankruptcy of a defunct corporation is an instrumentality of the state. 17
The voluntary arbitrator no less performs a state function pursuant to a governmental power
delegated to him under the provisions therefor in the Labor Code and he falls, therefore, within
the contemplation of the term "instrumentality" in the aforequoted Sec. 9 of B.P. 129. The fact
that his functions and powers are provided for in the Labor Code does not place him within the
exceptions to said Sec. 9 since he is a quasi-judicial instrumentality as contemplated therein. It
will be noted that, although the Employees Compensation Commission is also provided for in the
Labor Code, Circular No. 1-91, which is the forerunner of the present Revised Administrative
Circular No. 1-95, laid down the procedure for the appealability of its decisions to the Court of
Appeals under the foregoing rationalization, and this was later adopted by Republic Act No.
7902 in amending Sec. 9 of B.P. 129.

A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise
be appealable to the Court of Appeals, in line with the procedure outlined in Revised
Administrative Circular No. 1-95, just like those of the quasi-judicial agencies, boards and
commissions enumerated therein.
This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to
provide a uniform procedure for the appellate review of adjudications of all quasi-judicial
entities 18 not expressly excepted from the coverage of Sec. 9 of B.P. 129 by either the
Constitution or another statute. Nor will it run counter to the legislative intendment that decisions
of the NLRC be reviewable directly by the Supreme Court since, precisely, the cases within the
adjudicative competence of the voluntary arbitrator are excluded from the jurisdiction of the
NLRC or the labor arbiter.
In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also
known as the Arbitration Law, arbitration is deemed a special proceeding of which the court
specified in the contract or submission, or if none be specified, the Regional Trial Court for the
province or city in which one of the parties resides or is doing business, or in which the
arbitration is held, shall have jurisdiction. A party to the controversy may, at any time within one
(1) month after an award is made, apply to the court having jurisdiction for an order confirming
the award and the court must grant such order unless the award is vacated, modified or
corrected. 19
In effect, this equates the award or decision of the voluntary arbitrator with that of the regional
trial court. Consequently, in a petition for certiorari from that award or decision, the Court of
Appeals must be deemed to have concurrent jurisdiction with the Supreme Court. As a matter of
policy, this Court shall henceforth remand to the Court of Appeals petitions of this nature for
proper disposition.
ACCORDINGLY, the Court resolved to REFER this case to the Court of Appeals.
SO ORDERED.