G.R. No.

L-43495-99 January 20, 1990

TROPICAL HUT EMPLOYEES' UNION-CGW, JOSE ENCINAS, JOSE LUIS TRIBINO, FELIPE DURAN,
MANUEL MANGYAO, MAMERTO CAHUCOM, NEMESIO BARRO, TEODULFO CAPAGNGAN,
VICTORINO ABORRO, VIDAL MANTOS, DALMACIO DALDE, LUCIO PIASAN, CANUTO LABADAN,
TERESO ROMERDE, CONRADO ENGALAN, SALVADOR NERVA, BERNARDO ENGALAN,
BONIFACIO CAGATIN, BENEDICTO VALDEZ, EUSEBIO SUPILANAS, ALFREDO HAMAYAN,
ASUERO BONITO, GAVINO DEL CAMPO, ZACARIAS DAMING, PRUDENCIO LADION, FULGENCIO
BERSALUNA, ALBERTO PERALES, ROMEO MAGRAMO, GODOFREDO CAMINOS, GILDARDO
DUMAS, JORGE SALDIVAR, GENARO MADRIO, SEGUNDINO KUIZON, LUIS SANDOVAL, NESTOR
JAPAY, ROGELIO CUIZON, RENATO ANTIPADO, GREGORIO CUEVO, MARTIN BALAZUELA,
CONSTANCIO CHU, CRISPIN TUBLE, FLORENCIO CHIU, FABIAN CAHUCOM, EMILIANO
VILLAMOR, RESTITUTO HANDAYAN, VICTORINO ESPEDILLA, NOEL CHUA, ARMANDO
ALCORANO, ELEUTERIO TAGUIK, SAMSON CRUDA, DANILO CASTRO, CENON VALLENAS,
DANILO CAWALING, SIMPLICIO GALLEROS, PERFECTO CUIZON, PROCESO LAUROS, ANICETO
BAYLON, EDISON ANDRES, REYNALDO BAGOHIN, IRENEO SUPANGAN, RODRIGO CAGATIN,
TEODORO ORENCIO, ARMANDO LUAYON, JAIME NERVA, NARCISO CUIZON, ALFREDO DEL
ROSARIO, EDUARDO LORENZO, PEDRO ARANGO, VICENTE SUPANGAN, JACINTO BANAL AND
BONIFACIO PUERTO, petitioners,
vs.
TROPICAL HUT FOOD MARKET, INC., ESTELITA J. QUE, ARTURO DILAG, MARCELINO LONTOK
JR., NATIONAL ASSOCIATION OF TRADE UNIONS (NATU), NATIONAL LABOR RELATIONS
COMMISSION (NLRC), HON. DIEGO P. ATIENZA, GERONIMO Q. QUADRA, FEDERICO C.
BORROMEO, AND HON. BLAS F. OPLE, respondents.
Pacifico C. Rosal for petitioners.
Marcelino Lontok, Jr. for private respondents.
Dizon, Vitug & Fajardo Law Office for Tropical Hut Food Market, Inc. and Que.

MEDIALDEA, J.:
This is a petition for certiorari under Rule 65 seeking to set aside the decisions of the public
respondents Secretary of Labor and National Labor Relations Commission which reversed the
Arbitrators rulings in favor of petitioners herein.
The following factual background of this case appears from the record:
On January 2, 1968, the rank and file workers of the Tropical Hut Food Market Incorporated, referred to
herein as respondent company, organized a local union called the Tropical Hut Employees Union, known
for short as the THEU, elected their officers, adopted their constitution and by-laws and immediately
sought affiliation with the National Association of Trade Unions (NATU). On January 3, 1968, the NATU
accepted the THEU application for affiliation. Following such affiliation with NATU, Registration
Certificate No. 5544-IP was issued by the Department of Labor in the name of the Tropical Hut
Employees Union NATU. It appears, however, that NATU itself as a labor federation, was not
registered with the Department of Labor.
After several negotiations were conducted between THEU-NATU, represented by its local president and
the national officers of the NATU, particularly Ignacio Lacsina, President, Pacifico Rosal, Executive VicePresident and Marcelino Lontok, Jr., Vice President, and respondent Tropical Hut Food Market,
Incorporated, thru its President and General Manager, Cesar Azcona, Sr., a Collective Bargaining
Agreement was concluded between the parties on April 1, 1968, the term of which expired on March
31, 1971. Said agreement' contained these clear and unequivocal terms:
This Agreement made and entered into this __________ day of ___________, 1968, by and
between:
The Tropical Hut Food Market, Inc., a corporation duly organized and existing under and
by virtue of the laws of the Republic of the Philippines, with principal office at Quezon

City, represented in this Act by its President, Cesar B. Azcona (hereinafter referred to as
the Company)
and
The Tropical Hut Employees Union NATU, a legitimate labor organization duly
organized and existing in accordance with the laws of the Republic of the Philippines, and
affiliated with the National Association of Trade Unions, with offices at San Luis Terraces,
Ermita, Manila, and represented in this Act by its undersigned officers (hereinafter
referred to as the UNION)
Witnesseth:
xxx xxx xxx
Article I
Coverage and Effectivity
Sec. 1. The COMPANY recognizes the UNION as the sole and exclusive collective
bargaining agent for all its workers and employees in all matters concerning wages,
hours of work, and other terms and conditions of employment.
xxx xxx xxx
Article III
Union Membership and Union Check-off
Sec. 1 . . . Employees who are already members of the UNION at the time of the signing
of this Agreement or who become so thereafter shall be required to maintain their
membership therein as a condition of continued employment.
xxx xxx xxx
Sec. 3Any employee who is expelled from the UNION for joining another federation or
forming another union, or who fails or refuses to maintain his membership therein as
required, . . . shall, upon written request of the UNION be discharged by the COMPANY.
(Rollo, pp. 667-670)
And attached to the Agreement as Appendix "A" is a check-off Authorization Form, the terms of which
are as follows:
We, the undersigned, hereby designate the NATIONAL Association of Trade Unions, of
which the TROPICAL HUT EMPLOYEES UNION is an affiliate as sole collective bargaining
agent in all matters relating to salary rates, hours of work and other terms and conditions
of employment in the Tropical Hut Food Market, Inc. and we hereby authorize the said
company to deduct the amount of Four (P 4.00)Pesos each every month as our monthly
dues and to deliver the amount to the Treasurer of the Union or his duly authorized
representatives. (Rollo, pp. 680-684)
On May 21, 1971, respondent company and THEU-NATU entered into a new Collective Bargaining
Agreement which ended on March 31, 1974. This new CBA incorporated the previous union-shop
security clause and the attached check-off authorization form.
Sometime in July, 1973, Arturo Dilag, incumbent President of THEU-NATU, was appointed by the
respondent company as Assistant Unit Manager. On July 24, 1973, he wrote the general membership of
his union that for reason of his present position, he was resigning as President of the THEU-NATU
effective that date. As a consequence thereof, his Vice-President, Jose Encinas, assumed and
discharged the duties of the presidency of the THEU-NATU.

On December 19,1973, NATU received a letter dated December 15, 1973, jointly signed by the
incumbent officers of the local union informing the NATU that THEU was disaffiliating from the NATU
federation. On December 20, 1973, the Secretary of the THEU, Nemesio Barro, made an announcement
in an open letter to the general membership of the THEU, concerning the latter's disaffiliation from the
NATU and its affiliation with the Confederation of General Workers (CGW). The letter was passed around
among the members of the THEU-NATU, to which around one hundred and thirty-seven (137) signatures
appeared as having given their consent to and acknowledgment of the decision to disaffiliate the THEU
from the NATU.
On January 1, 1974, the general membership of the so-called THEU-CGW held its annual election of
officers, with Jose Encinas elected as President. On January 3, 1974, Encinas, in his capacity as THEUCGW President, informed the respondent company of the result of the elections. On January 9, 1974,
Pacifico Rosal, President of the Confederation of General Workers (CGW), wrote a letter in behalf of
complainant THEU-CGW to the respondent company demanding the remittance of the union dues
collected by the Tropical Hut Food Mart, Incorporated to the THEU-CGW, but this was refused by the
respondent company.
On January 11, 1974, the NATU thru its Vice-President Marcelino Lontok, Jr., wrote Vidal Mantos,
requiring the latter to assume immediately the position of President of the THEU-NATU in place of Jose
Encinas, but the position was declined by Mantos. On the same day, Lontok, Jr., informed Encinas in a
letter, concerning the request made by the NATU federation to the respondent company to dismiss him
(Encinas) in view of his violation of Section 3 of Article III of the Collective Bargaining Agreement.
Encinas was also advised in the letter that NATU was returning the letter of disaffiliation on the ground
that:
1. Under the restructuring program NOT of the Bureau of Labor but of the Philippine
National Trade Union Center in conjunction with the NATU and other established national
labor centers, retail clerks and employees such as our members in the Tropical Hut
pertain to Industry II which by consensus, has been assigned already to the jurisdiction of
the NATU;
2. The right to disaffiliate belongs to the union membership who on the basis of
verified reports received by have not even been consulted by you regarding the
matter;
3. Assuming that the disaffiliation decision was properly reached; your letter nevertheless
is unacceptable in view of Article V, Section 1, of the NATU Constitution which provides
that "withdrawal from the organization shall he valid provided three (3) months notice of
intention to withdraw is served upon the National Executive Council." (p. 281, Rollo)
In view of NATU's request, the respondent company, on the same day, which was January 11,
1974, suspended Encinas pending the application for clearance with the Department of Labor to
dismiss him. On January 12, 1974, members of the THEU-CGW passed a resolution protesting
the suspension of Encinas and reiterated their ratification and approval of their union's
disaffiliation from NATU and their affiliation with the Confederation of General Workers (CGW). It
was Encinas' suspension that caused the filing of NLRC Case No. LR-2511 on January 11, 1974
against private respondents herein, charging them of unfair labor practice.
On January 15,1974, upon the request of NATU, respondent company applied for clearance with the
Secretary of Labor to dismiss the other officers and members of THEU-CGW. The company also
suspended them effective that day. NLRC Case No. LR-2521 was filed by THEU-CGW and individual
complainants against private respondents for unfair labor practices.
On January 19, 1974, Lontok, acting as temporary chairman, presided over the election of officers of
the remaining THEU-NATU in an emergency meeting pending the holding of a special election to be
called at a later date. In the alleged election, Arturo Dilag was elected acting THEU-NATU President
together with the other union officers. On February 14, 1974, these temporary officers were considered
as having been elected as regular officers for the year 1974.
On January 30, 1974, petitioner THEU-CGW wrote a letter to Juan Ponce Enrile, Secretary of National
Defense, complaining of the unfair labor practices committed by respondent company against its

members and requesting assistance on the matter. The aforementioned letter contained the signatures
of one hundred forty-three (143) members.
On February 24,1974, the secretary of THEU-NATU, notified the entire rank and file employees of the
company that they will be given forty-eight (48) hours upon receipt of the notice within which to answer
and affirm their membership with THEU-NATU. When the petitioner employees failed to reply, Arturo
Dilag advised them thru letters dated February 26, March 2 and 5, 1974, that the THEU-NATU shall
enforce the union security clause set forth in the CBA, and that he had requested respondent company
to dismiss them.
Respondent company, thereafter, wrote the petitioner employees demanding the latter's comment on
Dilag's charges before action was taken thereon. However, no comment or reply was received from
petitioners. In view of this, Estelita Que, President/General Manager of respondent company, upon
Dilag's request, suspended twenty four (24) workers on March 5, 1974, another thirty seven (37) on
March 8, 1974 and two (2) more on March 11, 1974, pending approval by the Secretary of Labor of the
application for their dismissal.
As a consequence thereof, NLRC Case Nos. LR-2971, LR-3015 and an unnumbered case were filed by
petitioners against Tropical Hut Food Market, Incorporated, Estelita Que, Hernando Sarmiento and
Arturo Dilag.
It is significant to note that the joint letter petition signed by sixty-seven (67) employees was filed with
the Secretary of Labor, the NLRC Chairman and Director of Labor Relations to cancel the words NATU
after the name of Tropical Hut Employee Union under Registration Certificate No. 5544 IP. Another letter
signed by one hundred forty-six (146) members of THEU-CGW was sent to the President of the
Philippines informing him of the unfair labor practices committed by private respondents against THEUCGW members.
After hearing the parties in NLRC Cases Nos. 2511 and 2521 jointly filed with the Labor Arbiter,
Arbitrator Daniel Lucas issued an order dated March 21, 1974, holding that the issues raised by the
parties became moot and academic with the issuance of NLRC Order dated February 25, 1974 in NLRC
Case No. LR-2670, which directed the holding of a certification election among the rank and file workers
of the respondent company between the THEU-NATU and THEU-CGW. He also ordered: a) the
reinstatement of all complainants; b) for the respondent company to cease and desist from committing
further acts of dismissals without previous order from the NLRC and for the complainant Tropical Hut
Employees UNION-CGW to file representation cases on a case to case basis during the freedom period
provided for by the existing CBA between the parties (pp. 91-93, Rollo).
With regard to NLRC Case Nos. LR-2971, LR-3015, and the unnumbered case, Arbitrator Cleto T.
Villatuya rendered a decision dated October 14, 1974, the dispositive portion of which states:
Premises considered, a DECISION is hereby rendered ordering respondent company to
reinstate immediately the sixty three (63) complainants to their former positions with
back wages from the time they were illegally suspended up to their actual reinstatement
without loss of seniority and other employment rights and privileges, and ordering the
respondents to desist from further committing acts of unfair labor practice. The
respondent company's application for clearance filed with the Secretary of Labor to
terminate the subject complainants' services effective March 20 and 23, 1974, should be
denied.
SO ORDERED. (pp. 147-148, Rollo)
From the orders rendered above by Abitrator Daniel Lucas in NLRC Cases No. LR-2511 and LR-2521 and
by Arbitrator Cleto Villatuya in NLRC Cases Nos. LR-2971, LR-3015, and the unnumbered case, all
parties thereto, namely, petitioners herein, respondent company, NATU and Dilag appealed to the
National Labor Relations Commission.
In a decision rendered on August 1, 1975, the National Labor Relations Commission found the private
respondents' appeals meritorious, and stated, inter alia:
WHEREFORE, in view of the foregoing premises, the Order of Arbitrator Lucas in NLRC
CASE NOS. LR-2511, 2521 and the decision of Arbitrator Villatuya in NLRC CASE NOS. LR-

2971, 3015 and the unnumbered Case are hereby REVERSED. Accordingly, the individual
complainants are deemed to have lost their status as employees of the respondent
company. However, considering that the individual complainants are not presumed to be
familiar with nor to have anticipated the legal mesh they would find themselves in, after
their "disaffiliation" from National Association of Trade Unions and the THEU-NATU, much
less the legal consequences of the said action which we presume they have taken in all
good faith; considering, further, that the thrust of the new orientation in labor relations is
not towards the punishment of acts violative of contractual relations but rather towards
fair adjustments of the resulting complications; and considering, finally, the consequent
economic hardships that would be visited on the individual complainants, if the law were
to be strictly enforced against them, this Commission is constrained to be magnanimous
in this instant, notwithstanding its obligation to give full force and effect to the majesty of
the law, and hereby orders the respondent company, under pain of being cited for
contempt for failure to do so, to give the individual complainants a second chance by
reemploying them upon their voluntary reaffirmation of membership and loyalty to the
Tropical Hut Employees Union-NATU and the National Association of Trade Unions in the
event it hires additional personnel.
SO ORDERED. (pp. 312-313, Rollo)
The petitioner employees appealed the decision of the respondent National Labor Relations
Commission to the Secretary of Labor. On February 23, 1976, the Secretary of Labor rendered a
decision affirming the findings of the Commission, which provided inter alia:
We find, after a careful review of the record, no sufficient justification to alter the decision
appealed from except that portion of the dispositive part which states:
. . . this Commission . . . hereby orders respondent company under pain of
being cited for contempt for failure to do so, to give the individual
complainants a second chance by reemploying them upon their voluntary
reaffirmation of membership and loyalty to the Tropical Hut Employees
UNION-NATU and the National Association of Trade Union in the event it
hires additional personnel.
Compliance by respondent of the above undertaking is not immediately feasible
considering that the same is based on an uncertain event, i.e., reemployment of
individual complainants "in the event that management hires additional personnel," after
they shall have reaffirmed their loyalty to THEU-NATU, which is unlikely.
In lieu of the foregoing, and to give complainants positive relief pursuant to Section 9,
Implementing Instruction No. 1. dated November 9, 1972, respondent is hereby ordered
to grant to all the individual complainants financial assistance equivalent to one (1)
month salary for every year of service.
WHEREFORE, with the modification as above indicated, the Decision of the National Labor
Relations Commission is hereby affirmed.
SO ORDERED.(pp. 317-318, Rollo)
From the various pleadings filed and arguments adduced by petitioners and respondents, the following
issues appear to be those presented for resolution in this petition to wit: 1) whether or not the
petitioners failed to exhaust administrative remedies when they immediately elevated the case to this
Court without an appeal having been made to the Office of the President; 2) whether or not the
disaffiliation of the local union from the national federation was valid; and 3) whether or not the
dismissal of petitioner employees resulting from their unions disaffiliation for the mother federation was
illegal and constituted unfair labor practice on the part of respondent company and federation.
We find the petition highly meritorious.
The applicable law then is the Labor Code, PD 442, as amended by PD 643 on January 21, 1975, which
states:

Art. 222. Appeal . . .

xxx xxx xxx
Decisions of the Secretary of Labor may be appealed to the President of the Philippines
subject to such conditions or limitations as the President may direct. (Emphasis ours)
The remedy of appeal from the Secretary of Labor to the Office of the President is not a mandatory
requirement before resort to courts can be had, but an optional relief provided by law to parties seeking
expeditious disposition of their labor disputes. Failure to avail of such relief shall not in any way served
as an impediment to judicial intervention. And where the issue is lack of power or arbitrary or
improvident exercise thereof, decisions of the Secretary of Labor may be questioned in
a certiorari proceeding without prior appeal to the President (Arrastre Security Association TUPAS v.
Ople, No. L-45344, February 20, 1984, 127 SCRA 580). Since the instant petition raises the same issue
of grave abuse of discretion of the Secretary of Labor amounting to lack of or in excess of jurisdiction in
deciding the controversy, this Court can properly take cognizance of and resolve the issues raised
herein.
This brings Us to the question of the legality of the dismissal meted to petitioner employees. In the
celebrated case of Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, L-33187, September 4,
1975, 66 SCRA 512, We held that the validity of the dismissals pursuant to the union security clause in
the collective bargaining agreement hinges on the validity of the disaffiliation of the local union from
the federation.
The right of a local union to disaffiliate from its mother federation is well-settled. A local union, being a
separate and voluntary association, is free to serve the interest of all its members including the
freedom to disaffiliate when circumstances warrant. This right is consistent with the constitutional
guarantee of freedom of association (Volkschel Labor Union v. Bureau of Labor Relations, No. L-45824,
June 19, 1985, 137 SCRA 42).
All employees enjoy the right to self organization and to form and join labor organizations of their own
choosing for the purpose of collective bargaining and to engage in concerted activities for their mutual
aid or protection. This is a fundamental right of labor that derives its existence from the Constitution. In
interpreting the protection to labor and social justice provisions of the Constitution and the labor laws
or rules or regulations, We have always adopted the liberal approach which favors the exercise of labor
rights.
Relevant on this point is the basic principle We have repeatedly in affirmed in many rulings:
. . . The locals are separate and distinct units primarily designed to secure and maintain
an equality of bargaining power between the employer and their employee-members in
the economic struggle for the fruits of the joint productive effort of labor and capital; and
the association of the locals into the national union (PAFLU) was in furtherance of the
same end. These associations are consensual entities capable of entering into such legal
relations with their member. The essential purpose was the affiliation of the local unions
into a common enterprise to increase by collective action the common bargaining power
in respect of the terms and conditions of labor. Yet the locals remained the basic units of
association, free to serve their own and the common interest of all, subject to the
restraints imposed by the Constitution and By-Laws of the Association, and free also to
renounce the affiliation for mutual welfare upon the terms laid down in the agreement
which brought it into existence. (Adamson & Adamson, Inc. v. CIR, No. L-35120, January
31, 1984, 127 SCRA 268; Elisco-Elirol Labor Union (NAFLU) v. Noriel, No. L-41955,
December 29, 1977, 80 SCRA 681; Liberty Cotton Mills Workers Union v. Liberty Cotton
Mills, Inc., supra).
The inclusion of the word NATU after the name of the local union THEU in the registration with the
Department of Labor is merely to stress that the THEU is NATU's affiliate at the time of the registration.
It does not mean that the said local union cannot stand on its own. Neither can it be interpreted to
mean that it cannot pursue its own interests independently of the federation. A local union owes its
creation and continued existence to the will of its members and not to the federation to which it
belongs.

When the local union withdrew from the old federation to join a new federation, it was merely
exercising its primary right to labor organization for the effective enhancement and protection of
common interests. In the absence of enforceable provisions in the federation's constitution preventing
disaffiliation of a local union a local may sever its relationship with its parent (People's Industrial and
Commercial Employees and Workers Organization (FFW) v. People's Industrial and Commercial
Corporation, No. 37687, March 15, 1982, 112 SCRA 440).
There is nothing in the constitution of the NATU or in the constitution of the THEU-NATU that the THEU
was expressly forbidden to disaffiliate from the federation (pp. 62, 281, Rollo), The alleged noncompliance of the local union with the provision in the NATU Constitution requiring the service of three
months notice of intention to withdraw did not produce the effect of nullifying the disaffiliation for the
following grounds: firstly, NATU was not even a legitimate labor organization, it appearing that it was
not registered at that time with the Department of Labor, and therefore did not possess and acquire, in
the first place, the legal personality to enforce its constitution and laws, much less the right and
privilege under the Labor Code to organize and affiliate chapters or locals within its group, and
secondly, the act of non-compliance with the procedure on withdrawal is premised on purely technical
grounds which cannot rise above the fundamental right of self-organization.
Respondent Secretary of Labor, in affirming the decision of the respondent Commission, concluded that
the supposed decision to disaffiliate was not the subject of a free and open discussion and decision on
the part of the THEU-NATU general membership (p. 305, Rollo). This, however, is contradicted by the
evidence on record. Moreover, We are inclined to believe Arbitrator Villatuya's findings to the contrary,
as follows:
. . . . However, the complainants refute this allegation by submitting the following: a)
Letter dated December 20, 1.973 signed by 142 members (Exhs. "B to B-5") resolution
dated January 12, 1974, signed by 140 members (Exhs. "H to H-6") letter dated February
26, 1974 to the Department of Labor signed by 165 members (Exhs. "I to I-10"); d) letter
dated January 30, 1974 to the Secretary of the National Defense signed by 144 members
(Exhs. "0 to 0-5") and; e) letter dated March 6, 1974 signed by 146 members addressed
to the President of the Philippines (Exhs. "HH to HH-5"), to show that in several instances,
the members of the THEU-NATU have acknowledged their disaffiliation from NATU. The
letters of the complainants also indicate that an overwhelming majority have freely and
voluntarily signed their union's disaffiliation from NATU, otherwise, if there was really
deception employed in securing their signatures as claimed by NATU/ Dilag, it could not
be possible to get their signatures in five different documents. (p. 144, Rollo)
We are aware of the time-honored doctrine that the findings of the NLRC and the Secretary of Labor are
binding on this Court if supported by substantial evidence. However, in the same way that the findings
of facts unsupported by substantial and credible evidence do not bind this Court, neither will We uphold
erroneous conclusions of the NLRC and the Secretary of Labor when We find that the latter committed
grave abuse of discretion in reversing the decision of the labor arbiter (San Miguel Corporation v. NLRC,
L-50321, March 13, 1984, 128 SCRA 180). In the instant case, the factual findings of the arbitrator were
correct against that of public respondents.
Further, there is no merit in the contention of the respondents that the act of disaffiliation violated the
union security clause of the CBA and that their dismissal as a consequence thereof is valid. A perusal of
the collective bargaining agreements shows that the THEU-NATU, and not the NATU federation, was
recognized as the sole and exclusive collective bargaining agent for all its workers and employees in all
matters concerning wages, hours of work and other terms and conditions of employment (pp. 667706, Rollo). Although NATU was designated as the sole bargaining agent in the check-off authorization
form attached to the CBA, this simply means it was acting only for and in behalf of its affiliate. The
NATU possessed the status of an agent while the local union remained the basic principal union which
entered into contract with the respondent company. When the THEU disaffiliated from its mother
federation, the former did not lose its legal personality as the bargaining union under the CBA.
Moreover, the union security clause embodied in the agreements cannot be used to justify the
dismissals meted to petitioners since it is not applicable to the circumstances obtaining in this case.
The CBA imposes dismissal only in case an employee is expelled from the union for joining another
federation or for forming another union or who fails or refuses to maintain membership therein. The
case at bar does not involve the withdrawal of merely some employees from the union but of the whole
THEU itself from its federation. Clearly, since there is no violation of the union security provision in the
CBA, there was no sufficient ground to terminate the employment of petitioners.

Public respondents considered the existence of Arturo Dilag's group as the remaining true and valid
union. We, however, are inclined to agree instead with the Arbitrator's findings when he declared:
. . . . Much more, the so-called THEU-NATU under Dilag's group which assumes to be the
original THEU-NATU has a very doubtful and questionable existence not to mention that
the alleged president is performing supervisory functions and not qualified to be a bona
fide member of the rank and file union. (p. 146, Rollo)
Records show that Arturo Dilag had resigned in the past as President of THEU-NATU because of his
promotion to a managerial or supervisory position as Assistant Unit Manager of respondent Company.
Petitioner Jose Encinas replaced Dilag as President and continued to hold such position at the time of
the disaffiliation of the union from the federation. It is therefore improper and contrary to law for Dilag
to reassume the leadership of the remaining group which was alleged to be the true union since he
belonged to the managerial personnel who could not be expected to work for the betterment of the
rank and file employees. Besides, managers and supervisors are prohibited from joining a rank and file
union (Binalbagan Isabela Sugar Co., Inc. (BISCOM) v. Philippine Association of Free Labor Unions
(PAFLU), et al., L-18782, August 29, 1963, 8 SCRA 700). Correspondingly, if a manager or supervisor
organizes or joins a rank and file union, he will be required to resign therefrom (Magalit, et al. v. Court
of Industrial Relations, et al., L-20448, May 25, 1965,14 SCRA 72).
Public respondents further submit that several employees who disaffiliate their union from the NATU
subsequently retracted and reaffirmed their membership with the THEU-NATU. In the decision which
was affirmed by respondent Secretary of Labor, the respondent Commission stated that:
. . . out of the alleged one hundred and seventy-one (171) members of the THEU-CGW
whose signatures appeared in the "Analysis of Various Documents Signed by Majority
Members of the THEU-CGW, (Annex "T", Complainants), which incidentally was relied
upon by Arbitrator Villatuya in holding that complainant THEU-CGW commanded the
majority of employees in respondent company, ninety-three (93) of the alleged
signatories reaffirmed their membership with the THEU-NATU and renounced whatever
connection they may have had with other labor unions, (meaning the complainant THEUCGW) either through resolution or membership application forms they have unwittingly
signed." (p. 306,Rollo)
Granting arguendo, that the fact of retraction is true, the evidence on record shows that the letters of
retraction were executed on various dates beginning January 11, 1974 to March 8, 1974 (pp. 278280, Rollo). This shows that the retractions were made more or less after the suspension pending
dismissal on January 11, 1974 of Jose Encinas, formerly THEU-NATU President, who became THEU-CGW
President, and the suspension pending their dismissal of the other elected officers and members of the
THEU-CGW on January 15, 1974. It is also clear that some of the retractions occurred after the
suspension of the first set of workers numbering about twenty-four (24) on March 5, 1974. There is no
use in saying that the retractions obliterated the act of disaffiliation as there are doubts that they were
freely and voluntarily done especially during such time when their own union officers and co-workers
were already suspended pending their dismissal.
Finally, with regard to the process by which the workers were suspended or dismissed, this Court finds
that it was hastily and summarily done without the necessary due process. The respondent company
sent a letter to petitioners herein, advising them of NATU/Dilag's recommendation of their dismissal and
at the same time giving them forty-eight (48) hours within which to comment (p. 637, Rollo). When
petitioners failed to do so, respondent company immediately suspended them and thereafter effected
their dismissal. This is certainly not in fulfillment of the mandate of due process, which is to afford the
employee to be dismissed an opportunity to be heard.
The prerogative of the employer to dismiss or lay-off an employee should be done without abuse of
discretion or arbitrainess, for what is at stake is not only the employee's name or position but also his
means of livelihood. Thus, the discharge of an employee from his employment is null and void where
the employee was not formally investigated and given the opportunity to refute the alleged findings
made by the company (De Leon v. NLRC, L-52056, October 30, 1980, 100 SCRA 691). Likewise, an
employer can be adjudged guilty of unfair labor practice for having dismissed its employees in line with
a closed shop provision if they were not given a proper hearing (Binalbagan-Isabela Sugar Co., Inc.,
(BISCOM) v. Philippine Association of Free Labor Unions (PAFLU) et al., L-18782, August 29, 1963, 8
SCRA 700).

In view of the fact that the dispute revolved around the mother federation and its local, with the
company suspending and dismissing the workers at the instance of the mother federation then, the
company's liability should be limited to the immediate reinstatement of the workers. And since their
dismissals were effected without previous hearing and at the instance of NATU, this federation should
be held liable to the petitioners for the payment of their backwages, as what We have ruled in the
Liberty Cotton Mills Case (supra).
ACCORDINGLY, the petition is hereby GRANTED and the assailed decision of respondent Secretary of
Labor is REVERSED and SET ASIDE, and the respondent company is hereby ordered to immediately
reinstate all the petitioner employees within thirty (30) days from notice of this decision. If
reinstatement is no longer feasible, the respondent company is ordered to pay petitioners separation
pay equivalent to one (1) month pay for every year of service. The respondent NATU federation is
directed to pay petitioners the amount of three (3) years backwages without deduction or qualification.
This decision shall be immediately executory upon promulgation and notice to the parties.
SO ORDERED.

G.R. No. 155306

August 28, 2013

MALAYANG MANGGAGAWA NG STAYFAST PHILS., INC., PETITIONER,

vs.
NATIONAL LABOR RELATIONS COMMISSION, STAYFAST PHILIPPINES, INC./ MARIA
ALMEIDA,RESPONDENTS.
DECISION
LEONARDO-DE CASTRO, J.:
This petition for Certiorari under Rule 65 of the Rules of Court seeks a review and reversal of the
Decision1 dated July 1, 2002 of the Court of Appeals in CA-G.R. SP No. 59465, which dismissed the
petition for certiorari of petitioner Malayang Mangggagawa ng Stayfast Phils., Inc.
The Labor Arbiter and the National Labor Relations Commission (NLRC) made similar findings of fact.
Petitioner and Nagkakaisang Lakas ng Manggagawa sa Stayfast (NLMS-Olalia) sought to be the
exclusive bargaining agent of the employees of respondent company, Stayfast Philippines, Inc. A
certification election was conducted on December 29, 1995. 2 Out of the 223 valid votes cast, petitioner
garnered 109 votes while NLMS-Olalia received 112 votes and 2 votes were for "No Union." 3 Thus, the
Med-Arbiter who supervised the certification election issued an Order dated January 9, 1996 certifying
NLMS-Olalia as the sole and exclusive bargaining agent of all rank and file employees of respondent
company.4
Petitioner appealed the Order of the Med-Arbiter to the Secretary of Labor and Employment. The
Secretary of Labor and Employment initially set aside the Order of the Med-Arbiter and called for run-off
election between petitioner and NLMS-Olalia. On motion of NLMS-Olalia, however, the Secretary of
Labor and Employment reconsidered his earlier decision and restored the Med-Arbiters Order dated
January 9, 1996. Petitioner elevated the matter via petition for certiorari to this Court. 5 The petition,
docketed as G.R. No. 125957, was dismissed in a Resolution dated January 14, 1998. 6
Meanwhile, NLMS-Olalia demanded to collectively bargain with respondent company. The latter rejected
petitioners demand, insisting that it would negotiate a collective bargaining agreement only with
whichever union is finally certified as the sole and exclusive bargaining agent of the workers.
Nevertheless, NLMS-Olalia went on strike on April 1, 1997 until it was temporarily restrained eight days
later.7
Subsequently, on June 5, 1997, petitioner filed its own notice of strike in the National Conciliation and
Mediation Board (NCMB). Respondent company opposed petitioners move and filed a motion to dismiss
on the ground that petitioner was not the certified bargaining agent and therefore lacked personality to
file a notice of strike.8Thereafter, the parties were able to make concessions during the conciliationmediation stage in the NCMB which led petitioner to withdraw its notice of strike. 9 In this connection,
the NCMB issued a Certification dated July 31, 1997 which reads:
CERTIFICATION
TO WHOM IT MAY CONCERN:
This is to certify that it appears from the "Minutes/Agreement" of conciliation conference dated July 15,
1997, which was further confirmed by Conciliator/Mediator Gil Caragayan[,] the Notice of Strike filed by
MMSP-Independent on June 5, 1997, against Stayfast Philippines, Inc. is considered dropped/withdrawn
from the business calendar of this office.
It is further certified that there is no new Notice of Strike filed by the same union.
This certification is being issued upon the written request of Atty. Edgardo R. Abaya.
July 31, 1997.

(Sgd.) LEOPOLDO B. DE JESUS

Director II10
On July 21, 1997, however, petitioners members staged a "sit-down strike" to dramatize their demand
for a fair and equal treatment as respondent company allegedly continued to discriminate against
them. Respondent company issued a memorandum requiring the alleged participants in the "sit-down
strike" to explain within 24 hours why they should not be terminated or suspended from work for
infraction of company rules and regulations pertaining to unauthorized work stoppage, acts inimical to
company interest, and disregard of instruction of immediate supervisor to perform assigned task. As no
one complied with the memorandum within the 24-hour deadline, respondent company promptly
terminated the service of the participants in the "sit-down strike" on July 22, 1997. Consequently, on
July 23, 1997, petitioner staged a strike and filed a complaint for unfair labor practice, union busting
and illegal lockout against respondent company and its General Manager, Maria Almeida, in the NLRC. 11
In support of its complaint, petitioner alleged that respondents had repeatedly committed acts of
discrimination, such as the denial of the use of the company canteen for purposes of conducting a
strike vote, the constant denial of applications of petitioners members for leave to attend hearings in
relation to certain labor cases while similar applications of members of the other union were approved,
and the suspension of petitioners president for being absent due to attendance in hearings of labor
cases involving petitioners members. Petitioner further claimed that the termination of about 127 of its
officers and members constituted union busting and unlawful lockout. 12
For its part, respondent company claimed that petitioner lacked legal authority to go on strike since it is
a minority union. As petitioner withdrew its notice of strike during the proceedings in the NCMB, the
strike conducted by petitioner was illegal as it constituted a wildcat strike and later became a full-blown
strike on July 23, 1997. Petitioner committed illegal acts during the strike and obstructed the free
ingress and egress from respondent companys premises. 13
On April 27, 1999, the Labor Arbiter rendered a Decision which ruled that, while petitioner may file a
notice of strike on behalf of its members, petitioner failed to cite any instance of discrimination or
harassment when it filed its notice of strike on June 5, 1997 and the incidents mentioned as
discriminatory occurred after the filing of the said notice. Moreover, assuming the strike was legal at
the beginning, it became illegal when petitioner committed acts prohibited under Article 264(e) of the
Labor Code, such as acts of violence, coercion and intimidation and obstruction of the free ingress to
and egress from respondent companys premises. Also, petitioner was supposed to have made a selfimposed prohibition to stage a strike when it submitted its labor dispute with respondent company for
compulsory arbitration in the afternoon of July 23, 1997. Yet, petitioner continued with its strike. For
these reasons, the Labor Arbiter dismissed the petition.14 The dispositive portion of the Labor Arbiters
Decision dated April 27, 1999 reads:
PREMISES CONSIDERED, the complaint is hereby dismissed for lack of merit. 15
Petitioner appealed but, in a Resolution dated January 31, 2000, the NLRC upheld the Labor Arbiters
Decision. According to the NLRC, the actuations of petitioner were patently illegal because the sit-down
strike staged on July 21, 1997 was made barely a week after petitioner withdrew its notice of strike,
with prejudice, on account of the concessions agreed upon by the parties. Petitioner filed no new notice
of strike that could have supported its charges of discriminatory acts and unfair labor practice.
Moreover, no evidence was presented to establish such charges. Also, petitioners members were given
the opportunity to explain their violation of respondent companys rules on unauthorized work
stoppage, acts inimical to company interest and disregard of instruction of immediate supervisor to
perform assigned task. Thus, the NLRC dismissed petitioners appeal. 16 The dispositive portion of the
NLRCs Resolution dated January 31, 2000 reads:
WHEREFORE, premises considered, the decision under review is AFFIRMED, and complainants appeal,
DISMISSED, for lack of merit.17
Petitioner filed a motion for reconsideration but the NLRC denied it in a Resolution dated April 10,
2000.18
Petitioner filed a petition for certiorari in the Court of Appeals, docketed as CA-G.R. SP No. 59465, on
the following grounds:

(A) RESPONDENT NLRC COMMITTED GROSS AND GRAVE ABUSE OF DISCRETION WHEN IT
UPHELD THE LABOR ARBITERS DECISION.
(B) COMPLAINANTS/APPELLANTS WHOSE TERMINATION RESULTED FROM THE UNFAIR LABOR
PRACTICE[,] UNION-BUSTING AND UNLAWFUL LOCKOUT OF HEREIN RESPONDENT ARE ENTITLED
TO REINSTATEMENT WITH FULL BACKWAGES.
(C) COMPLAINANTS, BY REASON OF THE ARBITRARY ACTION IN WANTON DISREGARD OF THE
LEGAL RIGHTS OF HEREIN [COMPLAINANTS,] ARE ENTITLED TO DAMAGES AND ATTORNEYS
FEES.19
In a Decision dated July 1, 2002, the Court of Appeals found that petitioner was seeking a review of the
findings of fact and conclusion of the Labor Arbiter which was sustained by the NLRC. The Court of
Appeals found no cogent reason to indulge petitioner. It applied the rule that findings of fact made by
the Labor Arbiter and affirmed by the NLRC are considered by the appellate court as binding if
supported by substantial evidence. The Court of Appeals ruled that the NLRC Resolution dated January
31, 2000 was supported by justifiable reason and cannot be faulted with grave abuse of discretion.
Petitioner failed to establish that the NLRC committed grave abuse of discretion. Moreover, a petition
for certiorari is not used to correct a lower tribunals appreciation of evidence and findings of fact. Thus,
the Court of Appeals dismissed the petition. The dispositive portion of the Court of Appeals Decision
dated July 1, 2002 reads:
WHEREFORE, foregoing premises considered, the Petition, having no merit, in fact and in law, is hereby
DENIED DUE COURSE and ORDERED DISMISSED. Resultantly, the assailed Resolution[s] are AFFIRMED,
with costs to Petitioner.20
Hence, this petition for certiorari21 under Rule 65 of the Rules of Court.
According to petitioner, it "interposes appeal on the judgment of the Honorable Justices of the Court of
Appeals" on the following grounds:
(1) The Honorable Justices of the Court of Appeals committed grave abuse of discretion
amounting to lack or excess of jurisdiction when they upheld the rulings of the NLRC and
disregarded the constitutional protection of labor as well as Article 248 (e) and Article 263 of the
Labor Code.
(2) The Honorable Justices of the Court of Appeals committed grave abuse of discretion
amounting to lack or excess of jurisdiction when they upheld the decision of the NLRC that the
termination of complainants/appellants were valid and corollary thereto no reinstatement[,]
backwages, damages and attorneys fees were awarded. 22
In discussing the above grounds, petitioner claims that the discriminatory acts of respondent company
and its General Manager against petitioners members constituted unfair labor practice under Article
248(e) of the Labor Code, as amended. The termination of employment of petitioners 127 officers and
members constituted union-busting and unlawful lockout. As the said officers and members were
unlawfully dismissed from employment, they are entitled to reinstatement with full backwages. The
arbitrary action of respondent company and its General Manager wantonly disregarded the legal rights
of petitioners officers and members thereby entitling said officers and members to damages and
attorneys fees.23
Respondent company and its General Manager, for their part, question the timeliness of the petition
which was filed 52 days after petitioners receipt of the Decision of the Court of Appeals. They point out
that petitioner should have filed a petition for review under Rule 45 of the Rules of Court within 15 days
from receipt of a copy of the Court of Appeals Decision. Respondent company and its General Manager
also argue that the sit-down strike which subsequently became a full blown strike conducted by
petitioner was illegal as it had previously withdrawn its notice of strike. The illegality of the strike was
compounded by the commission of prohibited acts like the blocking of the entry and exit points of
respondent companys premises. Also, petitioners officers and employees were afforded due process
before they were dismissed as they were issued a memorandum requiring them to explain their
participation in the illegal sit-down strike but they simply ignored the said memorandum. 24
The petition fails for many reasons.

First, this petition for certiorari is a wrong remedy.

A petition for certiorari under Rule 65 of the Rules of Court is a special civil action that may be resorted
to only in the absence of appeal or any plain, speedy and adequate remedy in the ordinary course of
law.25 Contrary to petitioners claim in the Jurisdictional Facts portion of its petition that there was no
appeal or any other plain, speedy and adequate remedy in the ordinary course of law other than this
petition for certiorari, the right recourse was to appeal to this Court in the form of a petition for review
on certiorari under Rule 45 of the Rules of Court, Section 1 of which provides:
Section 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a
judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax
Appeals, the Regional Trial Court or other courts, whenever authorized by law, may file with the
Supreme Court a verified petition for review on certiorari. The petition may include an application for a
writ of preliminary injunction or other provisional remedies and shall raise only questions of law, which
must be distinctly set forth. The petitioner may seek the same provisional remedies by verified motion
filed in the same action or proceeding at any time during its pendency.
For purposes of appeal, the Decision dated July 1, 2002 of the Court of Appeals was a final judgment as
it denied due course to, and dismissed, the petition. Thus, the Decision disposed of the petition of
petitioner in a manner that left nothing more to be done by the Court of Appeals in respect to the said
case. Thus, petitioner should have filed an appeal by petition for review on certiorari under Rule 45, not
a petition for certiorari under Rule 65, in this Court. Where the rules prescribe a particular remedy for
the vindication of rights, such remedy should be availed of.
The proper remedy to obtain a reversal of judgment on the merits, final order or resolution is appeal.
This holds true even if the error ascribed to the court rendering the judgment is its lack of jurisdiction
over the subject matter, or the exercise of power in excess thereof, or grave abuse of discretion in the
findings of fact or of law set out in the decision, order or resolution. The existence and availability of the
right of appeal prohibits the resort to certiorari because one of the requirements for the latter remedy is
that there should be no appeal.26
Petitioner cannot mask its failure to file an appeal by petition for review under Rule 45 of the Rules of
Court by the mere expedient of conjuring grave abuse of discretion to avail of a petition for certiorari
under Rule 65. The error of petitioner becomes more manifest in light of the following pronouncement
in Balayan v. Acorda27:
It bears emphasis that the special civil action for certiorari is a limited form of review and is a remedy of
last recourse. The Court has often reminded members of the bench and bar that this extraordinary
action lies only where there is no appeal nor plain, speedy and adequate remedy in the ordinary course
of law. It cannot be allowed when a party to a case fails to appeal a judgment despite the availability of
that remedy, certiorari not being a substitute for a lapsed or lost appeal. Where an appeal is available,
certiorari will not prosper, even if the ground therefor is grave abuse of discretion. x x x. (Citations
omitted.)
Moreover, certiorari is not and cannot be made a substitute for an appeal where the latter remedy is
available but was lost through fault or negligence.28 In this case, petitioner received the Decision dated
July 1, 2002 on August 2, 2002 and, under the rules,29 had until August 19, 2002 to file an appeal by
way of a petition for review in this Court. Petitioner let this period lapse without filing an appeal and,
instead, filed this petition for certiorari on October 1, 2002.
Second, even assuming that a petition for certiorari is the correct remedy in this case, petitioner failed
to comply with the requirement of a prior motion for reconsideration.
As a general rule, a motion for reconsideration is a prerequisite for the availment of a petition for
certiorari under Rule 65.30 The filing of a motion for reconsideration before resort to certiorari will lie is
intended to afford the public respondent an opportunity to correct any actual or fancied error attributed
to it by way of re-examination of the legal and factual aspects of the case. 31 While there are well
recognized exceptions to this rule,32 this petition is not covered by any of those exceptions. The Court of
Appeals was not given any opportunity either to rectify whatever error it may have made or to address
the ascription and aspersion of grave abuse of discretion thrown at it by petitioner. Nor did petitioner
offer any compelling reason to warrant a deviation from the rule. The instant petition for certiorari is
therefore fatally defective.

Third, petitioner was not able to establish its allegation of grave abuse of discretion on the part of the
Court of Appeals.
Where a petition for certiorari under Rule 65 of the Rules of Court alleges grave abuse of discretion, the
petitioner should establish that the respondent court or tribunal acted in a capricious, whimsical,
arbitrary or despotic manner in the exercise of its jurisdiction as to be equivalent to lack of
jurisdiction.33 This is so because "grave abuse of discretion" is well-defined and not an amorphous
concept that may easily be manipulated to suit ones purpose. In this connection, Yu v. Judge ReyesCarpio34 is instructive:
The term "grave abuse of discretion" has a specific meaning. An act of a court or tribunal can only be
considered as with grave abuse of discretion when such act is done in a "capricious or whimsical
exercise of judgment as is equivalent to lack of jurisdiction." The abuse of discretion must be so patent
and gross as to amount to an "evasion of a positive duty or to a virtual refusal to perform a duty
enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary
and despotic manner by reason of passion and hostility." Furthermore, the use of a petition for certiorari
is restricted only to "truly extraordinary cases wherein the act of the lower court or quasi-judicial body
is wholly void." From the foregoing definition, it is clear that the special civil action of certiorari under
Rule 65 can only strike an act down for having been done with grave abuse of discretion if the
petitioner could manifestly show that such act was patent and gross. x x x. (Citations omitted.)
In this case, nowhere in the petition did petitioner show that the issuance of the Decision dated July 1,
2002 of the Court of Appeals was patent and gross that would warrant striking it down through a
petition for certiorari. Aside from a general statement in the Jurisdictional Facts portion of the petition
and the sweeping allegation of grave abuse of discretion in the general enumeration of the grounds of
the petition,35 petitioner failed to substantiate its imputation of grave abuse of discretion on the part of
the Court of Appeals. No argument was advanced to show that the Court of Appeals exercised its
judgment capriciously, whimsically, arbitrarily or despotically by reason of passion and hostility.
Petitioner did not even discuss how or why the conclusions of the Court of Appeals were made with
grave abuse of discretion. Instead, petitioner limited its discussion on its version of the case, which had
been already rejected both by the Labor Arbiter and the NLRC. Thus, petitioner failed in its duty to
demonstrate with definiteness the grave abuse of discretion that would justify the proper availment of a
petition for certiorari under Rule 65 of the Rules of Court.
Fourth, petitioner essentially questioned the factual findings of the Labor Arbiter and the
NLRC.1wphi1 Petitioner cannot properly do that in a petition for certiorari.
Petitioner used the Discussion/Arguments portion of its petition to refute the findings of fact of the
Labor Arbiter which was upheld by the NLRC. In particular, petitioner reiterated its position that
respondent company and its General Manager committed discriminatory acts against petitioners
members which constituted unfair labor practice; that the termination of employment of petitioners
officers and members was a case of union-busting and unlawful lockout; and, that the said officers and
members were unlawfully dismissed from employment and are therefore entitled to reinstatement with
full backwages, plus damages and attorneys fees.36 For petitioner to question the identical findings of
the Labor Arbiter and the NLRC is to raise a question of fact. However, it is settled that questions of fact
cannot be raised in an original action for certiorari.37 Only established or admitted facts can be
considered.38 Romys Freight Service v. Castro39 explains the rationale of this rule:
The Supreme Court is not a trier of facts, more so in the consideration of the extraordinary writ of
certiorari where neither questions of fact nor of law are entertained, but only questions of lack or
excess of jurisdiction or grave abuse of discretion. The sole object of the writ is to correct errors of
jurisdiction or grave abuse of discretion. The phrase grave abuse of discretion has a precise meaning
in law, denoting abuse of discretion "too patent and gross as to amount to an evasion of a positive
duty, or a virtual refusal to perform the duty enjoined or act in contemplation of law, or where the
power is exercised in an arbitrary and despotic manner by reason of passion and personal hostility." It
does not encompass an error of law. Nor does it include a mistake in the appreciation of the contending
parties respective evidence or the evaluation of their relative weight. (Citations omitted.)
Fifth, considering that petitioner basically presented an issue of fact, its petition for certiorari crumbles
in view of the identical findings of the Labor Arbiter and the NLRC which were further upheld by the
Court of Appeals.

The Court of Appeals correctly ruled that findings of fact made by Labor Arbiters and affirmed by the
NLRC are not only entitled to great respect, but even finality, and are considered binding if the same
are supported by substantial evidence.40 That ruling is based on established case law.41 Furthermore, in
arriving at the said ruling, the Court of Appeals even reviewed the rationale of the Labor Arbiters
decision and was convinced that there was justifiable reason for the NLRC to uphold the same. 42 This
Court finds no compelling reason to rule otherwise.
Sixth, even on the merits, the case of petitioner has no leg to stand on.
Petitioners case rests on the alleged discriminatory acts of respondent company against petitioners
officers and members. However, both the Labor Arbiter and the NLRC held that there was no sufficient
proof of respondent companys alleged discriminatory acts. 43 Thus, petitioners unfair labor practice,
union-busting and unlawful lockout claims do not hold water. Moreover, the established facts as found
by the NLRC are as follows: the "sit-down strike" made by petitioners officers and members on July 21,
1997 was in violation of respondent companys rules, and petitioners officers and members ignored the
opportunity given by respondent company for them to explain their misconduct, which resulted in the
termination of their employment.44 The Court of Appeals ruled that the said findings were supported by
substantial evidence.45 This Court finds that such ruling of the appellate court is not grave abuse of
discretion, nor could it be considered wrong.
In sum, there is an abundance of reasons, both procedural and substantive, which are all fatal to
petitioners cause. In contrast, the instant petition for certiorari suffers from an acute scarcity of legal
and factual support.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.

G.R. No. 196276

June 4, 2014

TAKATA (PHILIPPINES) CORPORATION, Petitioner,

vs.
BUREAU OF LABOR RELATIONS and SAMAHANG LAKAS MANGGAGAWA NG TAKATA
(SALAMAT),Respondents.
DECISION
PERALTA, J.:
Before us is a petition for review on certiorari filed by petitioner TAKATA Philippines Corporation
assailing the Decision1 dated December 22, 2010 and the Resolution2 dated March 28, 2011 of the
Court of Appeals in CA-G.R. SP No. 112406.
On July 7, 2009, petitioner filed with the Department of Labor and Employment (DOLE) Regional Office a
Petition3for Cancellation of the Certificate of Union Registration of Respondent Samahang Lakas
Manggagawa ng Takata (SALAMA1) on the ground that the latter is guilty of misrepresentation, false
statement and fraud with respect to the number of those who participated in the organizational
meeting, the adoption and ratification of its Constitution and By-Laws, and in the election of its officers.
It contended that in the May 1, 2009 organizational meeting of respondent, only 68 attendees signed
the attendance sheet, and which number comprised only 17% of the total number of the 396 regular
rank- and-file employees which respondent sought to represent, and hence, respondent failed to
comply with the 20% minimum membership requirement. Petitioner insisted that the document
"Pangalan ng mga Kasapi ng Unyon" bore no signatures of the alleged 119 union members; and that
employees were not given sufficient information on the documents they signed; that the document
"Sama-Samang Pahayag ng Pagsapi" was not submitted at the time of the filing of respondent's
application for union registration; that the 119 union members were actually only 117; and, that the
total number of petitioner's employees as of May 1, 2009 was 470, and not 396 as respondent
claimed.4
Respondent denied the charge and claimed that the 119 union members were more than the 20%
requirement for union registration. The document "Sama-Samang Pahayag ng Pagsapi sa Unyon" which
it presented in its petition for certification election 5 supported their claim of 119 members. Respondent
also contended that petitioner was estopped from assailing its legal personality as it agreed to a
certification election and actively participated in the pre-election conference of the certification election
proceedings.6 Respondent argued that the union members were informed of the contents of the
documents they signed and that the 68 attendees to the organizational meeting constituted more than
50% of the total union membership, hence, a quo rumexisted for the conduct of the said meeting. 7
On August 27, 2009, DOLE Regional Director, Atty. Ricardo S. Martinez, Sr., issued a Decision 8 granting
the petition for cancellation of respondent's certificate of registration, the dispositive portion of which
reads:
WHEREFORE, from the foregoing considerations, the petition is hereby GRANTED. Accordingly, the
respondent Union Certificate of Registration No. RO400A-2009-05-01-UR-LAG, dated May 19, 2009 is
hereby REVOCKED (sic) and /or CANCELLED pursuant to paragraph (a) & (b), Section 3, Rule XIV of
Department Order No. 40-03 and the Samahang Lakas ng Manggagawa ng TAKATA (SALAMAT) is hereby
delisted from the roll of legitimate labor organization of this office. 9
In revoking respondent's certificate of registration, the Regional Director found that the 68 employees
who attended the organizational meeting was obviously less than 20% of the total number of 396
regular rank-and-file employees which respondent sought to represent, hence, short of the union
registration requirement; that the attendance sheet which contained the signatures and names of the
union members totalling to 68 contradicted the list of names stated in the document denominated as
"Pangalan ng mga Kasaping Unyon." The document "Sama-Samang Pahayag ng Pagsapi" was not
attached to the application for registration as it was only submitted in the petition for certification
election filed by respondent at a later date. The Regional Director also found that the proceedings in

the cancellation of registration and certification elections are two different and entirely separate and
independent proceedings which were not dependent on each other.
Dissatisfied, respondent, through Bukluran ng Manggagawang Pilipino (BMP) Paralegal Officer, Domingo
P. Mole, filed a Notice and Memorandum of Appeal 10 with the Bureau of Labor Relations (BLR). However,
on September 28,2009, respondent, through its counsels, Attys.
Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an Appeal Memorandum with Formal Entry
of Appearance11 to the Office of the DOLE Secretary, which the latter eventually referred to the BLR.
Petitioner filed an Opposition to the Appeals12 praying for their dismissal on the ground of forum
shopping as respondent filed two separate appeals in two separate venues; and for failing to avail of
the correct remedy within the period; and that the certificate of registration was tainted with fraud,
misrepresentation and falsification.
In its Answer,13 respondent claimed that there was no forum shopping as BMP's Paralegal Officer was no
longer authorized to file an appeal on behalf of respondent as the latter's link with BMP was already
terminated and only the Union President was authorized to file the appeal; and that it complied with
Department Order No. 40-03.
On December 9, 2009, after considering respondent's Appeal Memorandum with Formal Entry of
Appearance and petitioner's Answer, the BLR rendered its Decision 14 reversing the Order of the
Regional Director, the decretal portion of which reads:
WHEREFORE, the appeal is hereby GRANTED. The Decision of Regional Director Ricardo S. Martinez, Sr.,
dated 27 August 2009, is hereby REVERSEDand SET ASIDE.
Accordingly, Samahang Lakas Manggagawa ng TAKATA (SALAMAT) shall remain in the roster of labor
organizations.15
In reversing, the BLR found that petitioner failed to prove that respondent deliberately and maliciously
misrepresented the number of rank-and-file employees. It pointed out petitioner's basis for the alleged
noncompliance with the minimum membership requirement for registration was the attendance of 68
members to the May 1, 2009 organizational meeting supposedly comprising only 17% of the total 396
regular rank-and-file employees. However, the BLR found that the list of employees who participated in
the organizational meeting was a separate and distinct requirement from the list of the names of
members comprising at least 20% of the employees in the bargaining unit; and that there was no
requirement for signatures opposite the names of the union members; and there was no evidence
showing that the employees assailed their inclusion in the list of union members.
Petitioner filed a motion for reconsideration, which was denied by the BLR in a Resolution 16 dated
January 8, 2010.
Undaunted, petitioner went to the CA via a petition for certiorari under Rule 65.
After the submission of the parties' respective pleadings, the case was submitted for decision.
On December 22, 2010, the CA rendered its assailed decision which denied the petition and affirmed
the decision of the BLR. Petitioner's motion for reconsideration was denied in a Resolution dated March
29, 2011.
Hence this petition for review filed by petitioner raising the following issues, to wit:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR IN AFFIRMING THE
DECISION OF PUBLIC RESPONDENT BLR AND NOT FINDING ANY VIOLATION BY SAMAHANG LAKAS
MANGGAGAWA SA TAKATA (SALAMAT) OF THE RULE ON FORUM SHOPPING IN THE FILING OF TWO
VERIFIED APPEALS FOR AND ITS BEHALF. BOTH OF THE APPEALS SHOULD HAVE BEEN DISMISSED
OUTRIGHT BY PUBLIC RESPONDENT BLR, ON GROUND OF FORUM SHOPPING.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN FINDING THAT THE APPLICATION FOR
REGISTRATION OF SAMAHANG LAKAS MANGGAGAWA SA TAKATA (SALAMAT) WAS COMPLIANT WITH THE
LAW. CONSIDERING THE CIRCUMSTANCES OBTAINING IN THE REGISTRATION OF SALAMAT, IT IS CLEAR

THAT THE SAME IS TAINTED WITH FRAUD, MISREPRESENTATION AND FALSIFICATION. SALAMAT DID NOT
POSSESS THE REQUIREDNUMBER OF MEMBERS AT THE TIME OF FILING OF ITS APPLICATION FOR
REGISTRATION, HENCE, IT SHOULD BE HELD GUILTY OF MISREPRESENTATION, AND FALSE STATEMENTS
AND FRAUD IN CONNECTION THEREWITH.17
Anent the first issue, petitioner contends that respondent had filed two separate appeals with two
different representations at two different venues, in violation of the rule on multiplicity of suits and
forum shopping, and instead of dismissing both appeals, the appeal erroneously filed before the Labor
Secretary was the one held validly filed, entertained and even granted; that it is not within the
discretion of BLR to choose which between the two appeals should be entertained, as it is the fact of
the filing of the two appeals that is being prohibited and not who among the representatives therein
possessed the authority.
We are not persuaded.
We find no error committed by the CA in finding that respondent committed no forum shopping. As the
CA correctly concluded, to wit:
It is undisputed that BMP Paralegal Officer Domingo P. Mole was no longer authorized to file an appeal
on behalf of union SALAMAT and that BMP was duly informed that its services was already terminated.
SALAMAT even submitted before the BLR its "Resolusyon Blg. 01-2009" terminating the services of BMP
and revoking the representation of Mr. Domingo Mole in any of the pending cases being handled by him
on behalf of the union. So, considering that BMP Paralegal Officer Domingo P. Mole was no longer
authorized to file an appeal when it filed the Notice and Memorandum of Appeal to DOLE Regional
Office No. IV-A, the same can no longer be treated as an appeal filed by union SALAMAT. Hence, there is
no forum shopping to speak of in this case as only the Appeal Memorandum with Formal Entry of
Appearance filed by Atty. Napoleon C. Banzuela, Jr. and Atty. Jehn Louie W. Velandrez is sanctioned by
SALAMAT.18
Since Mole's appeal filed with the BLR was not specifically authorized by respondent, such appeal is
considered to have not been filed at all. It has been held that "if a complaint is filed for and in behalf of
the plaintiff who is not authorized to do so, the complaint is not deemed filed.
An unauthorized complaint does not produce any legal effect."19
Respondent through its authorized representative filed its Appeal Memorandum with Formal Entry of
Appearance before the Labor Secretary, and not with the BLR. As the appeal emanated from the
petition for cancellation of certificate of registration filed with the Regional Office, the decision
canceling the registration is appealable to the BLR, and not with the Labor Secretary. However, since
the Labor Secretary motu propio referred the appeal with the BLR, the latter can now act on it.
Considering that Mole's appeal with the BLR was not deemed filed, respondents appeal, through
Banzuela and Associates, which the Labor Secretary referred to the BLR was the only existing appeal
with the BLR for resolution. There is, therefore, no merit to petitioner's claim that BLR chose the appeal
of Banzuela and Associates over Mole's appeal.
The case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union 20 cited by
petitioner is not at all applicable in this case as the issue therein is the authority of the Labor Secretary
to review the decision of the Bureau of Labor Relations rendered in the exercise of its appellate
jurisdiction over decision of the Regional Director in cases involving cancellations of certificate of
registration of labor unions. We found no grave abuse of discretion committed by the Secretary of Labor
in not acting on therein petitioner's appeal. The decision of the Bureau of Labor Relations on cases
brought before it on appeal from the Regional Director are final and executory. Hence, the remedy of
the aggrieved party is to seasonably avail of the special civil action of certiorari under Rule 65 and the
Rules of Court. In this case, after the Labor Secretary motu propio referred respondent's appeal filed
with it to the BLR which rendered its decision reversing the Regional Director, petitioner went directly to
the CA via a petition for certiorari under Rule 65.
As to the second issue, petitioner seeks the cancellation of respondent's registration on grounds offraud
and misrepresentation bearing on the minimum requirement of the law as to its membership,
considering the big disparity in numbers, between the organizational meeting and the list of members,
and so misleading the BLR that it obtained the minimum required number of employees for purposes of
organization and registration.

We find no merit in the arguments.

Art. 234 of the Labor Code provides:
ART. 234. Requirements of Registration. - A federation, national union or industry or trade union center
or an independent union shall acquire legal personality and shall be entitled to the rights and privileges
granted by law to legitimate labor organizations upon issuance of the certificate of registration based
on the following requirements:
(a) Fifty pesos (P50.00)registration fee;
(b) The names of its officers, their addresses, the principal address of the labor organization, the
minutes of the organizational meetings and the list of the workers who participated in such
meetings;
(c) In case the applicant is an independent union, the names of all its members comprising at
least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its annual
financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and the list of the members who participated in it."
And after the issuance of the certificate of registration, the labor organization's registration could be
assailed directly through cancellation of registration proceedings in accordance with Articles 238 and
239 of the Labor Code. And the cancellation of union certificate of registration and the grounds thereof
are as follows:
ART. 238. Cancellation of Registration. - The certificate of registration of any legitimate labor
organization, whether national or local, may be cancelled by the Bureau, after due hearing, only on the
grounds specified in Article 239 hereof.
ART. 239. Grounds for Cancellation of Union Registration. - The following may constitute grounds for
cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of
the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with the election of officers,
minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
Petitioner's charge that respondent committed misrepresentation and fraud in securing its certificate of
registration is a serious charge and must be carefully evaluated. Allegations thereof should be
compounded with supporting circumstances and evidence.21 We find no evidence on record to support
petitioner's accusation.
Petitioner's allegation of misrepresentation and fraud is based on its claim that during the
organizational meeting on May 1, 2009, only 68 employees attended, while respondent claimed that it
has 119 members as shown in the document denominated as "Pangalan ng mga Kasapi ng Unyon;"
hence, respondent misrepresented on the 20% requirement of the law as to its membership.
We do not agree.
It does not appear in Article 234 (b) of the Labor Code that the attendees in the organizational meeting
must comprise 20% of the employees in the bargaining unit. In fact, even the Implementing Rules and
Regulations of the Labor Code does not so provide. It is only under Article 234 (c) that requires the
names of all its members comprising at least twenty percent (20%) of all the employees in the

bargaining unit where it seeks to operate. Clearly, the 20% minimum requirement pertains to the
employees membership in the union and not to the list of workers who participated in the
organizational meeting. Indeed, Article 234 (b) and (c) provide for separate requirements, which must
be submitted for the union's registration, and which respondent did submit. Here, the total number of
employees in the bargaining unit was 396, and 20% of which was about 79. Respondent submitted a
document entitled "Pangalan ng Mga Kasapi ng Unyon" showing the names of 119 employees as union
members, thus respondent sufficiently complied even beyond the 20% minimum membership
requirement. Respondent also submitted the attendance sheet of the organizational meeting which
contained the names and signatures of the 68 union members who attended the meeting. Considering
that there are 119 union members which are more than 20% of all the employees of the bargaining
unit, and since the law does not provide for the required number of members to attend the
organizational meeting, the 68 attendees which comprised at least the majority of the 119 union
members would already constitute a quorum for the meeting to proceed and to validly ratify the
Constitution and By-laws of the union. There is, therefore, no basis for petitioner to contend that
grounds exist for the cancellation of respondent's union registration. For fraud and misrepresentation to
be grounds for cancellation of union registration under Article 239 of the Labor Code, the nature of the
fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority
of union members.22
Petitioner's claim that the alleged union members signed documents without adequate information is
not persuasive. The one who alleges a fact has the burden of proving it and a mere allegation is not
evidence.23 In fact, we note that not one of those listed in the document denominated as "Pangalan ng
Mga Kasaping Unyon" had come forward to deny their membership with respondent. Notably, it had not
been rebutted that the same union members had signed the document entitled "Sama-Samang
Pahayag ng Pagsapi," thus, strengtheningtheir desire to be members of the respondent union.
Petitioner claims that in the list of members, there was an employee whose name appeared twice and
another employee who was merely a project employee. Such could not be considered a
misrepresentation in the absence of showing that respondent deliberately did so for the purpose of
increasing their union membership. In fact, even if those two names were not included in the list of
union members, there would still be 117 members which was still more than 20% of the 396 rank-andfile employees.
As to petitioner's argument that the total number of its employees as of May 1, 2009 was 470, and
not396 as respondent claimed, still the 117 union members comprised more than the 20% membership
requirement for respondent's registration.
In Mariwasa Siam Ceramics v. Secretary of the Department of Labor and Employment, 24 we said:
For the purpose of de-certifying a union such as respondent, it must be shown that there was
misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification; or, in connection with the
election of officers, the minutes of the election of officers, the list of voters, or failure to submit these
documents together with the list of the newly elected-appointed officers and their postal addresses to
the BLR.
The bare fact that two signatures appeared twice on the list of those who participated in the
organizational meeting would not, to our mind, provide a valid reason to cancel respondents certificate
of registration. The cancellation of a unions registration doubtless has an impairing dimension on the
right of labor to self-organization. For fraud and misrepresentation to be grounds for cancellation of
union registration under the Labor Code, the nature of the fraud and misrepresentation must be grave
and compelling enough to vitiate the consent of a majority of union members.1wphi1
In this case, we agree with the BLR and the CA that respondent could not have possibly committed
misrepresentation, fraud, or false statements. The alleged failure of respondent to indicate with
mathematical precision the total number of employees in the bargaining unit is of no moment,
especially as it was able to comply with the 20% minimum membership requirement. Even if the total
number of rank-and-file employees of petitioner is 528, while respondent declared that it should only be
455, it still cannot be denied that the latter would have more than complied with the registration
requirement.25

WHEREFORE, premises considered, the petition for review is DENIED. The Decision dated December 22,
2010 and the Resolution dated March 28, 2011 of the Court of Appeals, in CA-G.R. SP No. 112406, are
AFFIRMED.
SO ORDERED.

G.R. Nos. 184903

October 10, 2012

DIGITAL TELECOMMUNICATIONS PHILIPPINES, INC., Petitioner,

vs.
DIGITEL EMPLOYEES UNION (DEU), ARCELO RAFAEL A. ESPLANA, ALAN D. LICANDO, FELICITO
C. ROMERO, JR., ARNOLD D. GONZALES, REYNEL FRANCISCO B. GARCIA, ZOSIMO B. PERALTA,
REGINO T. UNIDAD and JIM L. JAVIER, Respondents.
DECISION
PEREZ, J.:
This treats of the petition for review filed by Digital Telecommunications Philippines, Inc. (Digitel)
assailing the 18 June 2008 Decision1 and 9 October 2008 Resolution of the Court of Appeals 10th
Division in CA-G.R. SP No. 91719, which affirms the Order of the Secretary of Labor and Employment
directing Digitel to commence Collective Bargaining Agreement (CBA) negotiations and in CA-G.R. SP
No. 94825, which declares the dismissal of affected Digitel employees as illegal.
The facts, as borne by the records, follow.
By virtue of a certification election, Digitel Employees Union (Union) became the exclusive bargaining
agent of all rank and file employees of Digitel in 1994. The Union and Digitel then commenced
collective bargaining negotiations which resulted in a bargaining deadlock. The Union threatened to go
on strike, but then Acting Labor Secretary Bienvenido E. Laguesma assumed jurisdiction over the
dispute and eventually directed the parties to execute a CBA. 2
However, no CBA was forged between Digitel and the Union. Some Union members abandoned their
employment with Digitel. The Union later became dormant.
Ten (10) years thereafter or on 28 September 2004, Digitel received from Arceo Rafael A. Esplana
(Esplana), who identified himself as President of the Union, a letter containing the list of officers, CBA
proposals and ground rules.3The officers were respondents Esplana, Alan D. Licando (Vice-President),
Felicito C. Romero, Jr. (Secretary), Arnold D. Gonzales (Treasurer), Reynel Francisco B. Garcia (Auditor),
Zosimo B. Peralta (PRO), Regino T. Unidad (Sgt. at Arms), and Jim L. Javier (Sgt. at Arms).
Digitel was reluctant to negotiate with the Union and demanded that the latter show compliance with
the provisions of the Unions Constitution and By-laws on union membership and election of officers.
On 4 November 2004, Esplana and his group filed a case for Preventive Mediation before the National
Conciliation and Mediation Board based on Digitels violation of the duty to bargain. On 25 November
2004, Esplana filed a notice of strike.
On 10 March 2005, then Labor Secretary Patricia A. Sto. Tomas issued an Order 4 assuming jurisdiction
over the labor dispute.
During the pendency of the controversy, Digitel Service, Inc. (Digiserv), a non-profit enterprise engaged
in call center servicing, filed with the Department of Labor and Employment (DOLE) an Establishment
Termination Report stating that it will cease its business operation. The closure affected at least 100
employees, 42 of whom are members of the herein respondent Union.
Alleging that the affected employees are its members and in reaction to Digiservs action, Esplana and
his group filed another Notice of Strike for union busting, illegal lock-out, and violation of the
assumption order.
On 23 May 2005, the Secretary of Labor ordered the second notice of strike subsumed by the previous
Assumption Order.5

Meanwhile, on 14 March 2005, Digitel filed a petition with the Bureau of Labor Relations (BLR) seeking
cancellation of the Unions registration on the following grounds: 1) failure to file the required reports
from 1994-2004; 2) misrepresentation of its alleged officers; 3) membership of the Union is composed
of rank and file, supervisory and managerial employees; and 4) substantial number of union members
are not Digitel employees.6
In a Decision dated 11 May 2005, the Regional Director of the DOLE dismissed the petition for
cancellation of union registration for lack of merit. The Regional Director ruled that it does not have
jurisdiction over the issue of non-compliance with the reportorial requirements. He also held that Digitel
failed to adduce substantial evidence to prove misrepresentation and the mixing of non-Digitel
employees with the Union. Finally, he declared that the inclusion of supervisory and managerial
employees with the rank and file employees is no longer a ground for cancellation of the Unions
certificate of registration.7
The appeal filed by Digitel with the BLR was eventually dismissed for lack of merit in a Resolution dated
9 March 2007, thereby affirming the 11 May 2005 Decision of the Regional Director.
CA-G.R. SP No. 91719
In an Order dated 13 July 2005, the Secretary of Labor directed Digitel to commence the CBA
negotiation with the Union. Thus:
WHEREFORE, all the foregoing premises considered, this Office hereby orders:
1. DIGITEL to commence collective bargaining negotiation with DEU without further delay; and,
2. The issue of unfair labor practice, consisting of union-busting, illegal termination/lockout and
violation of the assumption of jurisdiction, specifically the return-to-work aspect of the 10 March 2005
and 03 June 2005 orders, be CERTIFIED for compulsory arbitration to the NLRC. 8
Digitel moved for reconsideration on the contention that the pendency of the petition for cancellation of
the Unions certificate of registration is a prejudicial question that should first be settled before the
DOLE could order the parties to bargain collectively. On 19 August 2005, then Acting Secretary Manuel
G. Imson of DOLE denied the motion for reconsideration, affirmed the 13 July 2005 Order and reiterated
the order directing parties to commence collective bargaining negotiations. 9
On 14 October 2005, Digitel filed a petition, docketed as CA-G.R. SP No. 91719, before the Court of
Appeals assailing the 13 July and 19 August 2005 Orders of the DOLE Secretary and attributing grave
abuse of discretion on the part of the DOLE Secretary for ordering Digitel to commence bargaining
negotiations with the Union despite the pendency of the issue of union legitimacy.
CA-G.R. SP No. 94825
In accordance with the 13 July 2005 Order of the Secretary of Labor, the unfair labor practice issue was
certified for compulsory arbitration before the NLRC, which, on 31 January 2006, rendered a Decision
dismissing the unfair labor practice charge against Digitel but declaring the dismissal of the 13
employees of Digiserv as illegal and ordering their reinstatement. The Union manifested that out of 42
employees, only 13 remained, as most had already accepted separation pay. The dispositive portion of
the Decision reads:
WHEREFORE, premises considered, the charge of unfair labor practice is hereby DISMISSED for lack of
merit. However, the dismissal of the remaining thirteen (13) affected employees is hereby declared
illegal and DIGITEL is hereby ORDERED to reinstate them to their former position with full backwages
up to the time they are reinstated, computed as follows:
x x x x.10
Upon motion for reconsideration filed by Digitel, four (4) affected employees, namely Ma. Loreta Eser,
Marites Jereza, Leonore Tuliao and Aline G. Quillopras, were removed from entitlement to the awards
pursuant to the deed of quitclaim and release which they all signed. 11

In view of this unfavorable decision, Digitel filed another petition on 9 June 2006 in CA-G.R. SP No.
94825 before the Court of Appeals, challenging the above NLRC Decision and Resolution and arguing
mainly that Digiserv employees are not employees of Digitel.
Ruling of the Court of Appeals
On 18 June 2008, the Tenth Division of the Court of Appeals consolidated the two petitions in CA-G.R. SP
No. 91719 and CA-G.R. SP No. 94825, and disposed as follows:
WHEREFORE, the petition in CA-G.R. SP No. 91719 is DISMISSED. The July 13, 2005 Order and the
August 19, 2005 Resolution of the DOLE Secretary are AFFIRMED in toto. With costs.
The petition in CA-G.R. SP No. 94825 is partially GRANTED, with the effect that the assailed
dispositions must be MODIFIED, as follows:
1) In addition to the order directing reinstatement and payment of full backwages to the nine (9)
affected employees, Digital Telecommunications Philippines, Inc. is furthered ORDERED, should
reinstatement is no longer feasible, to pay separation pay equivalent to one (1) month pay, or one-half
(1/2) month pay for every year of service, whichever is higher.
2) The one hundred thousand (PhP 100,000.00) peso-fine imposed on Digital Telecommunications
Philippines, Inc. is DELETED. No costs.12
The Court of Appeals upheld the Secretary of Labors Order for Digitel to commence CBA negotiations
with the Union and emphasized that the pendency of a petition for the cancellation of a unions
registration does not bar the holding of negotiations for a CBA. The Court of Appeals sustained the
finding that Digiserv is engaged in labor-only contracting and that its employees are actually
employees of Digitel.
Digitel filed a motion for reconsideration but was denied in a Resolution dated 9 October 2008.
Hence, this petition for review on certiorari.
Digitel argues that the Court of Appeals seriously erred when it condoned the act of the Secretary of
Labor in issuing an assumption order despite the pendency of an appeal on the issue of union
registration. Digitel maintains that it cannot be compelled to negotiate with a union for purposes of
collective bargaining when the very status of the same as the exclusive bargaining agent is in question.
Digitel insists that had the Court of Appeals considered the nature of the activities performed by
Digiserv, it would reach the conclusion that Digiserv is a legitimate contractor. To bolster its claim,
Digitel asserts that the affected employees are registered with the Social Security System, Pag-ibig,
Bureau of Internal Revenue and Philhealth with Digiserv as their employer. Digitel further contends that
assuming that the affected Digiserv employees are employees of Digitel, they were nevertheless validly
dismissed on the ground of closure of a department or a part of Digitels business operation.
The three issues raised in this petition are: 1) whether the Secretary of Labor erred in issuing the
assumption order despite the pendency of the petition for cancellation of union registration; 2) whether
Digiserv is a legitimate contractor; and 3) whether there was a valid dismissal.
The pendency of a petition
for cancellation of union
registration does not preclude
collective bargaining.
The first issue raised by Digitel is not novel. It is well-settled that the pendency of a petition for
cancellation of union registration does not preclude collective bargaining.
The 2005 case of Capitol Medical Center, Inc. v. Hon. Trajano13 is apropos. The respondent union therein
sent a letter to petitioner requesting a negotiation of their CBA. Petitioner refused to bargain and
instead filed a petition for cancellation of the unions certificate of registration. Petitioners refusal to
bargain forced the union to file a notice of strike. They eventually staged a strike. The Secretary of

Labor assumed jurisdiction over the labor dispute and ordered all striking workers to return to work.
Petitioner challenged said order by contending that its petition for cancellation of unions certificate of
registration involves a prejudicial question that should first be settled before the Secretary of Labor
could order the parties to bargain collectively. When the case eventually reached this Court, we agreed
with the Secretary of Labor that the pendency of a petition for cancellation of union registration does
not preclude collective bargaining, thus:
That there is a pending cancellation proceeding against the respondent Union is not a bar to set in
motion the mechanics of collective bargaining. If a certification election may still be ordered despite the
pendency of a petition to cancel the unions registration certificate (National Union of Bank Employees
vs. Minister of Labor, 110 SCRA 274), more so should the collective bargaining process continue despite
its pendency. We must emphasize that the majority status of the respondent Union is not affected by
the pendency of the Petition for Cancellation pending against it. Unless its certificate of registration and
its status as the certified bargaining agent are revoked, the Hospital is, by express provision of the law,
duty bound to collectively bargain with the Union. 14
Trajano was reiterated in Legend International Resorts Limited v. Kilusang Manggagawa ng Legenda
(KML-Independent).15 Legend International Resorts reiterated the rationale for allowing the continuation
of either a CBA process or a certification election even during the pendency of proceedings for the
cancellation of the unions certificate of registration. Citing the cases of Association of Court of Appeals
Employees v. Ferrer- Calleja16 and Samahan ng Manggagawa sa Pacific Plastic v. Hon. Laguesma, 17 it
was pointed out at the time of the filing of the petition for certification election or a CBA process as in
the instant case the union still had the personality to file a petition for certification or to ask for a
CBA negotiation as in the present case.
Digiserv is a labor-only contractor.
Labor-only contracting is expressly prohibited by our labor laws. Article 106 of the Labor Code defines
labor-only contracting as "supplying workers to an employer [who] does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises, among others, and the
workers recruited and placed by such person are performing activities which are directly related to the
principal business of such employer."
Section 5, Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor Code (Implementing
Rules), as amended by Department Order No. 18-02, expounds on the prohibition against labor-only
contracting, thus:
Section 5. Prohibition against labor-only contracting. Labor-only contracting is hereby declared
prohibited. For this purpose, labor-only contracting shall refer to an arrangement where the contractor
or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a
principal, and any of the following elements are present:
i) The contractor or subcontractor does not have substantial capital or investment which relates to the
job, work or service to be performed and the employees recruited, supplied or placed by such
contractor or subcontractor are performing activities which are directly related to the main business of
the principal; or
ii) The contractor does not exercise the right to control over the performance of the work of the
contractual employee.
The foregoing provisions shall be without prejudice to the application of Article 248 (c) of the Labor
Code, as amended.
xxxx
The "right to control" shall refer to the right reserved to the person for whom, the services of the
contractual workers are performed, to determine not only the end to be achieved, but also the manner
and means to be used in reaching that end.
The law and its implementing rules allow contracting arrangements for the performance of specific
jobs, works or services. Indeed, it is management prerogative to farm out any of its activities,
regardless of whether such activity is peripheral or core in nature. However, in order for such

outsourcing to be valid, it must be made to an independent contractor because the current labor rules
expressly prohibit labor-only contracting.18
After an exhaustive review of the records, there is no showing that first, Digiserv has substantial
investment in the form of capital, equipment or tools. Under the Implementing Rules, substantial capital
or investment refers to "capital stocks and subscribed capitalization in the case of corporations, tools,
equipment, implements, machineries and work premises, actually and directly used by the contractor
or subcontractor in the performance or completion of the job, work or service contracted out." The
NLRC, as echoed by the Court of Appeals, did not find substantial Digiservs authorized capital stock of
One Million Pesos (P 1,000,000.00). It pointed out that only Two Hundred Fifty Thousand Pesos
(P 250,000.00) of the authorized capital stock had been subscribed and only Sixty-Two Thousand Five
Hundred Pesos (P 62,500.00) had been paid up. There was no increase in capitalization for the last ten
(10) years.19
Moreover, in the Amended Articles of Incorporation, as well as in the General Information Sheets for the
years 1994, 2001 and 2005, the primary purpose of Digiserv is to provide manpower services. In PCI
Automation Center, Inc. v. National Labor Relations Commission, 20 the Court made the following
distinction: "the legitimate job contractor provides services while the labor-only contractor provides
only manpower. The legitimate job contractor undertakes to perform a specific job for the principal
employer while the labor-only contractor merely provides the personnel to work for the principal
employer." The services provided by employees of Digiserv are directly related to the business of
Digitel, as rationalized by the NLRC in this wise:
It is undisputed that as early as March 1994, the affected employees, except for two, were already
performing their job as Traffic Operator which was later renamed as Customer Service Representative
(CSR). It is equally undisputed that all throughout their employment, their function as CSR remains the
same until they were terminated effective May 30, 2005. Their long period of employment as such is an
indication that their job is directly related to the main business of DIGITEL which is telecommunications.
Because, if it was not, DIGITEL would not have allowed them to render services as Customer Service
Representative for such a long period of time.21
Furthermore, Digiserv does not exercise control over the affected employees. The NLRC highlighted the
fact that Digiserv shared the same Human Resources, Accounting, Audit and Legal Departments with
Digitel which manifested that it was Digitel who exercised control over the performance of the affected
employees. The NLRC also relied on the letters of commendation, plaques of appreciation and
certification issued by Digitel to the Customer Service Representatives as evidence of control.
Considering that Digiserv has been found to be engaged in labor-only contracting, the dismissed
employees are deemed employees of Digitel.
Section 7 of the Implementing Rules holds that labor-only contracting would give rise to: (1) the
creation of an employer-employee relationship between the principal and the employees of the
contractor or sub-contractor; and (2) the solidary liability of the principal and the contractor to the
employees in the event of any violation of the Labor Code.
Accordingly, Digitel is considered the principal employer of respondent employees.
The affected employees were
illegally dismissed.
In addition to finding that Digiserv is a labor-only contractor, records teem with proof that its dismissed
employees are in fact employees of Digitel. The NLRC enumerated these evidences, thus:
That the remaining thirteen (13) affected employees are indeed employees of DIGITEL is sufficiently
established by the facts and evidence on record.
It is undisputed that the remaining affected employees, except for two (2), were already hired by
DIGITEL even before the existence of DIGISERV. (The other two (2) were hired after the existence of
DIGISERV). The UNION submitted a sample copy of their appointment paper (Annex "A" of UNIONs
Position Paper, Records, Vol. 1, p. 100) showing that they were appointed on March 1, 1994, almost
three (3) months before DIGISERV came into existence on May 30, 1994 (Annex "B", Ibid, Records, Vol.

1, p. 101). On the other hand, not a single appointment paper was submitted by DIGITEL showing that
these remaining affected employees were hired by DIGISERV.
It is equally undisputed that the remaining, affected employees continuously held the position of
Customer Service Representative, which was earlier known as Traffic Operator, from the time they were
appointed on March 1, 1994 until they were terminated on May 30, 2005. The UNION alleges that these
Customer Service Representatives were under the Customer Service Division of DIGITEL. The UNIONs
allegation is correct. Sample of letter of commendations issued to Customer Service Representatives
(Annexes "C" and "C-1" of UNIONs Position Paper, Records, p. 100 and 111) indeed show that DIGITEL
has a Customer Service Division which handles its Call Center operations.
Further, the Certificates issued to Customer Service Representative likewise show that they are
employees of DIGITEL (Annexes "C-5", "C-6" - "C-7" of UNIONs Position Paper, Records, Vol. 1, pp. 115
to 117), Take for example the "Service Award" issued to Ma. Loretta C. Esen, one of the remaining
affected employees (Annex "C-5", Supra). The "Service Award" was signed by the officers of DIGITEL
the VP-Customer Services Division, the VP-Human Resources Division and the Group Head-Human
Resources Division. It was issued by DIGITEL to Esen thru the above named officers "In recognition of
her seven (7) years continuous and valuable contributions to the achievement of Digitels organization
objectives". It cannot be gainsaid that it is only the employer that issues service award to its
employees.22 (Emphasis not supplied)
As a matter of fact, even before the incorporation of Digiserv, the affected employees were already
employed by Digitel as Traffic Operators, later renamed as Customer Service Representatives.
As an alternative argument, Digitel maintains that the affected employees were validly dismissed on
the grounds of closure of Digiserv, a department within Digitel.
In the recent case of Waterfront Cebu City Hotel v. Jimenez,23 we referred to the closure of a department
or division of a company as retrenchment. The dismissed employees were undoubtedly retrenched with
the closure of Digiserv.
For a valid retrenchment, the following elements must be present:
(1) That retrenchment is reasonably necessary and likely to prevent business losses which, if already
incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are
reasonably imminent as perceived objectively and in good faith by the employer;
(2) That the employer served written notice both to the employees and to the Department of Labor and
Employment at least one month prior to the intended date of retrenchment;
(3) That the employer pays the retrenched employees separation pay equivalent to one (1) month pay
or at least month pay for every year of service, whichever is higher;
(4) That the employer exercises its prerogative to retrench employees in good faith for the
advancement of its interest and not to defeat or circumvent the employees right to security of tenure;
and
(5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and
who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age,
and financial hardship for certain workers.24
Only the first 3 elements of a valid retrenchment had been here satisfied. Indeed, it is management
prerogative to close a department of the company. Digitels decision to outsource the call center
operation of the company is a valid reason to close down the operations of a department under which
the affected employees were employed. Digitel cited the decline in the volume of transaction of
operator-assisted call services as supported by Financial Statements for the years 2003 and 2004,
during which Digiserv incurred a deficit of P 163,624.00 and P 164,055.00, respectively.25 All affected
employees working under Digiserv were served with individual notices of termination. DOLE was
likewise served with the corresponding notice. All affected employees were offered separation pay. Only
9 out of the 45 employees refused to accept the separation pay and chose to contest their dismissal
before this Court.

The fifth element regarding the criteria to be observed by Digitel clearly does not apply because all
employees under Digiserv were dismissed. The instant case is all about the fourth element, that is,
whether or not the affected employees were dismissed in good faith. We find that there was no good
faith in the retrenchment.
Prior to the cessation of Digiservs operations, the Secretary of Labor had issued the first assumption
order to enjoin an impending strike. When Digiserv effected the dismissal of the affected employees,
the Union filed another notice of strike. Significantly, the Secretary of Labor ordered that the second
notice of strike be subsumed by the previous assumption order. Article 263(g) of the Labor Code
provides:
When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory
arbitration. Such assumption or certification shall have the effect of automatically enjoining the
intended or impending strike or lockout as specified in the assumption or certification order. If one has
already taken place at the time of assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of
Labor and Employment or the Commission may seek the assistance of law enforcement agencies to
ensure the compliance with this provision as well as with such orders as he may issue to enforce the
same.
The effects of the assumption order issued by the Secretary of Labor are two-fold. It enjoins an
impending strike on the part of the employees and orders the employer to maintain the status quo.
There is no doubt that Digitel defied the assumption order by abruptly closing down Digiserv. The
closure of a department is not illegal per se. What makes it unlawful is when the closure is undertaken
in bad faith. In St. John Colleges, Inc. v. St. John Academy Faculty and Employees Union, 26 bad faith was
evidenced by the timing of and reasons for the closure and the timing of and reasons for the
subsequent opening. There, the collective bargaining negotiations between St. John and the Union
resulted in a bargaining deadlock that led to the filing of a notice of strike. The labor dispute was
referred to the Secretary of Labor who assumed jurisdiction.
Pending resolution of the dispute, St. John closed the school prompting the Union to file a complaint for
illegal dismissal and unfair labor practice. The Union members alleged that the closure of the high
school was done in bad faith in order to get rid of the Union and render useless any decision of the
SOLE on the CBA deadlocked issues. We held that closure was done to defeat the affected employees
security of tenure, thus:
The determination of whether SJCI acted in bad faith depends on the particular facts as established by
the evidence on record. Bad faith is, after all, an inference which must be drawn from the peculiar
circumstances of a case. The two decisive factors in determining whether SJCI acted in bad faith are (1)
the timing of, and reasons for the closure of the high school, and (2) the timing of, and the reasons for
the subsequent opening of a college and elementary department, and, ultimately, the reopening of the
high school department by SJCI after only one year from its closure.
Prior to the closure of the high school by SJCI, the parties agreed to refer the 1997 CBA deadlock to the
SOLE for assumption of jurisdiction under Article 263 of the Labor Code. As a result, the strike ended
and classes resumed. After the SOLE assumed jurisdiction, it required the parties to submit their
respective position papers. However, instead of filing its position paper, SJCI closed its high school,
allegedly because of the "irreconcilable differences between the school management and the
Academys Union particularly the safety of our students and the financial aspect of the ongoing CBA
negotiations." Thereafter, SJCI moved to dismiss the pending labor dispute with the SOLE contending
that it had become moot because of the closure. Nevertheless, a year after said closure, SJCI reopened
its high school and did not rehire the previously terminated employees.
Under these circumstances, it is not difficult to discern that the closure was done to defeat the parties
agreement to refer the labor dispute to the SOLE; to unilaterally end the bargaining deadlock; to render
nugatory any decision of the SOLE; and to circumvent the Unions right to collective bargaining and its
members right to security of tenure. By admitting that the closure was due to irreconcilable differences
between the Union and school management, specifically, the financial aspect of the ongoing CBA

negotiations, SJCI in effect admitted that it wanted to end the bargaining deadlock and eliminate the
problem of dealing with the demands of the Union. This is precisely what the Labor Code abhors and
punishes as unfair labor practice since the net effect is to defeat the Unions right to collective
bargaining.27 (Emphasis not supplied)
As in St. John, bad faith was manifested by the timing of the closure of Digiserv and the rehiring of
some employees to Interactive Technology Solutions, Inc. (I-tech), a corporate arm of Digitel. The
assumption order directs employees to return to work, and the employer to reinstate the employees.
The existence of the assumption order should have prompted Digitel to observe the status quo. Instead,
Digitel proceeded to close down Digiserv. The Secretary of Labor had to subsume the second notice of
strike in the assumption order. This order notwithstanding, Digitel proceeded to dismiss the employees.
The timing of the creation of I-tech is dubious. It was incorporated on 18 January 2005 while the labor
dispute within Digitel was pending. I-techs primary purpose was to provide call center/customer
contact service, the same service provided by Digiserv. It conducts its business inside the Digitel office
at 110 E. Rodriguez Jr. Avenue, Bagumbayan, Quezon City. The former head of Digiserv, Ms. Teresa
Taniega, is also an officer of I-tech. Thus, when Digiserv was closed down, some of the employees
presumably non-union members were rehired by I-tech.
Thus, the closure of Digiserv pending the existence of an assumption order coupled with the creation of
a new corporation performing similar functions as Digiserv leaves no iota of doubt that the target of the
closure are the union member-employees. These factual circumstances prove that Digitel terminated
the services of the affected employees to defeat their security of tenure. The termination of service was
not a valid retrenchment; it was an illegal dismissal of employees.
It needs to be mentioned too that the dismissal constitutes an unfair labor practice under Article 248(c)
of the Labor Code which refers to contracting out services or functions being performed by union
members when such will interfere with, restrain or coerce employees in the exercise of their rights to
self-organization. At the height of the labor dispute, occasioned by Digitels reluctance to negotiate with
the Union, I-tech was formed to provide, as it did provide, the same services performed by Digiserv, the
Union members nominal employer.
Under Article 279 of the Labor Code, an illegally dismissed employee is entitled to backwages and
reinstatement. Where reinstatement is no longer viable as an option, as in this case where Digiserv no
longer exists, separation pay equivalent to one (1) month salary, or one-half (1/2) month pay for every
year of service, whichever is higher, should be awarded as an alternative. 28 The payment of separation
pay is in addition to payment of backwages. 29
Indeed, while we have found that the closure of Digiserv was undertaken in bad faith, badges thereof
evident in the timing of Digiservs closure, hand in hand, with I-techs creation, the closure remains a
foregone conclusion. There is no finding, and the Union makes no such assertion, that Digiserv and Itech are one and the same corporation. The timing of Digiservs closure and I-techs ensuing creation is
doubted, not the legitimacy of I-tech as a business process outsourcing corporation providing both
inbound and outbound services to an expanded local and international clientele. 30
The finding of unfair labor practice hinges on Digitels contracting-out certain services performed by
union member-employees to interfere with, restrain or coerce them in the exercise of their right to selforganization.
We have no basis to direct reinstatement of the affected employees to an ostensibly different
corporation. The surrounding circumstance of the creation of I-tech point to bad faith on the part of
Digitel, as well as constitutive of unfair labor practice in targeting the dismissal of the union memberemployees. However, this bad faith does not contradict, much less negate, the impossibility of the
employees reinstatement because Digiserv has been closed and no longer exists.
Even if it is a possibility that I-tech, as though Digitel, can absorb the dismissed union memberemployees as I-tech was incorporated during the time of the controversy with the same primary
purpose as Digiserv, we would be hard pressed to mandate the dismissed employees reinstatement
given the lapse of more than seven (7) years.
This length of time from the date the incident occurred to its Resolution 31 coupled with the
demonstrated litigiousness of the disputants: (1) with all sorts of allegations thrown by either party

against the other; (2) the two separate filings of a notice of strike by the Union; (3) the Assumption
Orders of the DOLE; (4) our own finding of unfair labor practice by Digitel in targeting the union
member-employees, abundantly show that the relationship between Digitel and the union memberemployees is strained. Indeed, such discordance between the parties can very well be a necessary
consequence of the protracted and branched out litigation. We adhere to the oft-quoted doctrine that
separation pay may avail in lieu of reinstatement if reinstatement is no longer practical or in the best
interest of the parties.32
Under the doctrine of strained relations, the payment of separation pay is considered an acceptable
alternative to reinstatement when the latter option is no longer desirable or viable. On one hand, such
payment liberates the employee from what could be a highly oppressive work environment. On the
other hand, it releases the employer from the grossly unpalatable obligation of maintaining in its
employ a worker it could no longer trust.33
Finally, an illegally dismissed employee should be awarded moral and exemplary damages as their
dismissal was tainted with unfair labor practice. 34 Depending on the factual milieu, jurisprudence has
awarded varying amounts as moral and exemplary damages to illegally dismissed employees when the
dismissal is attended by bad faith or fraud; or constitutes an act oppressive to labor; or is done in a
manner contrary to good morals, good customs or public policy; or if the dismissal is effected in a
wanton, oppressive or malevolent manner.351wphi1
In Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees Association v. National Labor Relations
Commission, we intoned:
Unfair labor practices violate the constitutional rights of workers and employees to self-organization,
are inimical to the legitimate interests of both labor and management, including their right to bargain
collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect; and
disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations. As
the conscience of the government, it is the Courts sworn duty to ensure that none trifles with labor
rights.36
We awarded moral damages in the amount of P 10,000.00 and likewise awarded P 5,000.00 as
exemplary damages for each dismissed employee.
In the recent case of Purefoods Corporation v. Nagkakaisang Samahang Manggagawa ng Purefoods
Rank-and-File,37 we awarded the aggregate amount of P 500,000.00 as moral and exemplary damages
to the illegally dismissed union member-employees which exact number was undetermined.
In the case at hand, with the Unions manifestation that only 13 employees remain as respondents, as
most had already accepted separation pay, and consistent with our finding that Digitel committed an
unfair labor practice in violation of the employees constitutional right to self-organization, we deem it
proper to award each of the illegally dismissed union member-employees the amount of P 10,000.00
and P 5,000.00 as moral and exemplary damages, respectively.
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 91719
isAFFIRMED, while the Decision in CA-G.R. SP No. 94825 declaring the dismissal of affected union
member-employees as illegal is MODIFIED to include the payment of moral and exemplary damages in
amount of P10,000.00 and P 5,000.00, respectively, to each of the thirteen (13) illegally dismissed
union-member employees.
Petitioner Digital Telecommunications Philippines, Inc. is ORDERED to pay the affected employees
backwages and separation pay equivalent to one (1) month salary, or one-half (1/2) month pay for
every year of service, whichever is higher.
Let this case be REMANDED to the Labor Arbiter for the computation of monetary claims due to the
affected employees.
SO ORDERED.