RIGHT TO SELF-ORGANIZATION

BENGUET ELECTRIC COOPERATIVE, INC. vs. HON. PURA

FERRER-CALLEJA, Director of the Bureau of Labor
Relations, and BENECO EMPLOYEES LABOR UNION,
-

Beneco Worker's Labor Union-Association of

Democratic Labor Organizations (BWLU) filed a
petition for direct certification as the sole and
exclusive bargaining representative of all the rank
and
file
employees
of
Benguet
Electric
Cooperative, Inc. (BENECO) alleging that BENECO
has in its employ 214 rank and file employees;
that 198 of these have supported the filing of the
petition; that no certification election has been
conducted for the last 12 months; that there is no
existing collective bargaining representative of
the rank and file employees sought to represented
by BWLU; and, that there is no CBA.
An opposition was filed by the Beneco Employees
Labor Union (BELU) contending that it was
certified as the sole and exclusive bargaining
representative pursuant to an order issued by the
med-arbiter; that pending resolution by the NLRC
are two cases it filed against BENECO involving
bargaining deadlock and unfair labor practice;
and, that the pendency of these cases bars any
representation question.
BENECO filed a motion to dismiss claiming that
employees sought to be represented by BWLUADLO are not eligible to form, join or assist labor
organizations of their own choosing because they
are members and joint owners of the cooperative.
The med-arbiter issued an order giving due course
to the petition for certification election.

BELU and BENECO appealed but the same was

dismissed for lack of merit. BENECO filed with this
Court a petition for certiorari with prayer for
preliminary injunction and /or restraining order,
which the Supreme Court dismissed for lack of
merit in a minute resolution.
The ordered certification election was held.
Beneco filed a Protest.
the med-arbiter dismissed the protest.
The
Bureau of Labor Relations director Pura FerrerCalleja affirmed the med-arbiter's order and
certified BELU as the sole and exclusive
bargaining agent of all the rank and file
employees of BENECO.

Issue: Whether or not employees of a cooperative are

qualified to form or join a labor organization for
purposes of collective bargaining:
a. employees who at the same time are members
and co-owners thereof
b. employees who are neither members nor coowners of the cooperative
Held:
a. No.
b. Yes
An employee therefore of such a cooperative who
is a member and co-owner thereof cannot invoke
the right to collective bargaining for certainly an
owner cannot bargain with himself or his coowners.
It is the fact of ownership of the cooperative, and not
involvement in the management thereof, which

disqualifies a member from joining

organization within the cooperative.

any

labor

cast shall be certified as the exclusive bargaining agent

of all workers in the unit . . . [Italics supplied.]

Membership in a cooperative is not the same as

ownership of stocks in ordinary corporations.
While cooperatives may exercise some of the rights and
privileges given to ordinary corporations, such
cooperatives enjoy other privileges not granted to the
latter. It was precisely because of the special nature of
cooperatives, that the Court held in the Davao City case
that members-employees thereof cannot form or join a
labor union for purposes of collective bargaining. The
Court held that:

In this case it cannot be determined whether or not

respondent union was duly elected by the eligible voters
of the bargaining unit since even employees who are
ineligible to join a labor union within the cooperative
because of their membership therein were allowed to
vote in the certification election. Considering the
foregoing, the Court finds that respondent director
committed grave abuse of discretion in certifying
respondent union as the sole and exclusive bargaining
representative of the rank and file employees of
petitioner cooperative.

A cooperative ... is by its nature different from an

ordinary business concern being run either by persons,
partnerships, or corporations. Its owners and/or
members are the ones who run and operate the
business while the others are its employees. As above
stated, irrespective of the number of shares owned by
each member they are entitled to cast one vote each in
deciding upon the affairs of the cooperative. Their share
capital earn limited interest. They enjoy special
privileges as-exemption from income tax and sales
taxes, preferential right to supply their products to State
agencies and even exemption from the minimum wage
laws.

Article 256 of the Labor Code provides, among others,

that:
To have a valid, election, at least a majority of all
eligible voters in the unit must have cast their votes.
The labor union receiving the majority of the valid votes

WHEREFORE, the petition is hereby GRANTED and the

assailed resolution of respondent director is ANNULLED.
The certification election is SET ASIDE. The Regional
Office No. 1 of San Fernando, La Union is hereby
directed to immediately conduct new certification
election proceedings among the rank and file
employees of the petitioner who are not members of the
cooperative.
REPUBLIC v. ASIAPRO COOPERATIVE
FACTS:
Asiapro, as a cooperative, is composed of ownersmembers. Its primary objectives are to provide savings
and credit facilities and to develop other livelihood
services for its owners-members. In the discharge of the
aforesaid primary objectives, respondent cooperative

entered into several Service Contracts with Stanfilco.

The owners- members do not receive compensation or
wages from the respondent cooperative. Instead, they
receive a share in the service surplus whichAsiapro
earns from different areas of trade it engages in, such

ISSUE:
WON an employer-employee relationship exists between
Stanfilco and its owner-members.
HELD:

as the income derived from the said Service Contracts

YES. an owner-member of a cooperative can be an

with Stanfilco.

employee of the latter and an employer-employee

In order to enjoy the benefits under the Social Security

relationship can exist between them. a cooperative

Law of 1997, the owners-members of Asiapro in

acquires juridical personality upon its registration with

Stanfilco requested the services of the latter to register

the Cooperative Development Authority. It has its Board

them with SSS as self-employed and to remit their

of Directors, which directs and supervises its business;

contributions as such. Petitioner SSS sent a letter to

meaning, its Board of Directors is the one in charge in

respondent cooperative informing the latter that based

the conduct and management of its affairs. With that, a

on the Service Contracts it executed with Stanfilco,

cooperative can be likened to a corporation with a

Asiapro is actually a manpower contractor supplying

personality separate and distinct from its owners-

employees to Stanfilco and so, it is an employer of its

members.

owners-members working with Stanfilco. Thus, Asiapro

should register itself with petitioner SSS as an employer

It is true that the Service Contracts executed between

and make the corresponding report and remittance of

the respondent cooperative and Stanfilco expressly

premium

provide that there shall be no employer-employee

respondent

contributions.
cooperative

Despite

letters

continuously

received,

ignored

the

relationship

between

the

respondent

demand of petitioner SSS. Respondent cooperative

cooperativeanditsowners-members.

alleges that its owners-members own the cooperative,

However,theexistenceofan

thus, no employer-employee relationship can arise

relationship

between them.

repudiating it in a contract, when the terms and

cannot

be

employer-employee
negated

by

expressly

surrounding circumstances show otherwise. The

surplus given by the respondent cooperative to its

employment status of a person is defined and

owners-members were in reality wages, as the same

prescribed by law and not by what the parties say

were equivalent to an amount not lower than that

it should be.

prescribed by existing labor laws, rules and regulations,

It is settled that the contracting parties may establish

such stipulations, clauses, terms and conditions as they
want, and their agreement would have the force of law
between them. However, the agreed terms and
conditions must not be contrary to law, morals,
customs, public policy or public order. The Service
Contract provision in question must be struck down for
being contrary to law and public policy since it is
apparently being used by the respondent cooperative
merely to circumvent the compulsory coverage of its
employees, who are also its owners- members, by the
Social Security Law.

including the wage order applicable to the area and

industry, they are also given to the owners-members as
compensation in rendering services to respondent
cooperatives client, Stanfilco. Third. it is the respondent
cooperative

which

has

the

power

to

investigate,

discipline and remove the owners-members and its

team leaders who were rendering services at Stanfilco.
Fourth and most importantly, it is the respondent
cooperative which has the sole control over the manner
and means of performing the services under the Service
Contracts with Stanfilco as well as the means and
methods of work. All these clearly prove that, indeed,
there is an employer-employee relationship between the

The four elements in determining the existence of an

respondent cooperative and its owners-members.

employer-employee relationship are all present in this

case. First. It is expressly provided in the Service
has the exclusive discretion in the selection and

CORAZON C. SIM, petitioners, vs. NATIONAL

LABOR RELATIONS COMMISSION and EQUITABLE
PCI-BANK, respondents.

engagement of the owners-members as well as its team

G.R. No. 157376

leaders

October 2, 2007

Contracts that it is the respondent cooperative which

who

will

beassignedatStanfilco.

Second.

theweeklystipendsortheso-called shares in the service

AUSTRIA-MARTINEZ, J.:

Republic Act (R.A.) No. 8042, or the Migrant Workers and

Overseas Filipinos Act of 1995,18 provides:

FACTS:

Corazon Sim (petitioner) filed a case for illegal dismissal

with the Labor Arbiter, alleging that she was initially
employed by Equitable PCI-Bank (respondent) in 1990
as Italian Remittance Marketing Consultant to the
Frankfurt Representative Office. Eventually, she was
promoted to Manager position, until September 1999,
when she received a letter from Remegio David -- the
Senior Officer, European Head of PCIBank, and
Managing Director of PCIB- Europe -- informing her that
she was being dismissed due to loss of trust and
confidence based on alleged mismanagement and
misappropriation of funds. The Labor Arbiter dismissed
the case for want of jurisdiction and/or lack of merit
stressing that the labor relations system in the
Philippines has no extra-territorial jurisdiction. The
National Labor Relations Commission (NLRC) affirmed
the Labor Arbiter's Decision and dismissed petitioner's
appeal for lack of merit.

SECTION 10. Money Claims. Notwithstanding any

provision of law to the contrary, the Labor Arbiters of
the National Labor Relations Commission (NLRC) shall
have the original and exclusive jurisdiction to hear and
decide, within ninety (90) calendar days after the filing
of the complaint, the claims arising out of an employeremployee relationship or by virtue of any law or
contract involving Filipino workers for overseas
deployment including claims for actual, moral,
exemplary and other forms of damages.

Also, Section 62 of the Omnibus Rules and Regulations

Implementing R.A. No. 804219 provides that the Labor
Arbiters of the NLRC shall have the original and
exclusive jurisdiction to hear and decide all claims
arising out of employer-employee relationship or by
virtue of any law or contract involving Filipino workers
for overseas deployment including claims for actual,
moral, exemplary and other forms of damages, subject
to the rules and procedures of the NLRC.

ISSUE: WON the LA has extra-territorial jurisdiction

RULING:

Article 217 of the Labor Code provides for the

jurisdiction of the Labor Arbiter and the National Labor
Relations Commission x xx Moreover, Section 10 of

Under these provisions, it is clear that labor arbiters

have original and exclusive jurisdiction over claims
arising from employer-employee relations, including
termination disputes involving all workers, among whom
are overseas Filipino workers.

G.R. No. 88957 June 25, 1992

PHILIPS
INDUSTRIAL
DEVELOPMENT,
INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and
PHILIPS
EMPLOYEES
ORGANIZATION
(FFW),respondents.

of the bargaining
arbitration.

Facts:

Labor Arbiter declared that the Division Secretaries and

all Staff of general management, personnel and
industrial relations department, secretaries of audit,
EDP, financial system are confidential employees and
deemed excluded in the bargaining unit.

Since 1971, PIDI had a total of six (6) collective

bargaining agreements (CBAs) with private respondent
Philips Employees Organization-FFW (PEO-FFW), a
registered labor union and the certified bargaining
agent of all the rank and file employees of PIDI.
In the first CBA (1971-1974), the supervisors referred to
in R.A. No. 875, confidential employees, security guards,
temporary employees and sales representatives were
excluded from the bargaining unit.
In the second to the fifth CBAs (1975-1977; 1978-1980;
1981-1983;
and
1984-1986),
the
sales
force,
confidential employees and heads of small units,
together with the managerial employees, temporary
employees and security personnel, were specifically
excluded from the bargaining unit. The confidential
employees
are
the
division
secretaries
of
light/telecom/data and consumer electronics, marketing
managers, secretaries of the corporate planning and
business manager, fiscal and financial system manager
and audit and EDP manager, and the staff of both the
General Management and the Personnel Department.
In the sixth CBA covering the years 1987 to 1989, it was
agreed upon, among others, that the subject of
inclusion or exclusion of service engineers, sales
personnel and confidential employees in the coverage

unit

would

be

submitted

for

As the parties failed to agree on a voluntary arbitrator,

the BLR endorsed the petition to the Executive Labor
Arbiter of the National Capital Region for compulsory
arbitration pursuant to Article 228 of the Labor Code.

NLRC reversed.
Petitioner contends that the rationale for such exclusion
is that these employees hold positions which are highly
sensitive, confidential and of a highly fiduciary nature;
to include them in the bargaining unit may subject the
company to breaches in security and the possible
revelation of highly sensitive and confidential matters. It
would cripple the company's bargaining position and
would give undue advantage to the union.
Issue: WHETHER OR NOT SERVICE ENGINEERS, SALES
REPRESENTATIVES AND CONFIDENTIAL EMPLOYEES OF
PETITIONER ARE QUALIFIED TO BE PART OF THE
EXISTING BARGAINING UNIT.
Held: No. By the very nature of their functions, they
assist and act in a confidential capacity to, or have
access to confidential matters of, persons who exercise
managerial functions in the field of labor relations. As
such, the rationale behind the ineligibility of managerial
employees to form, assist or join a labor union equally
applies to them. If these managerial employees would
belong to or be affiliated with a Union, the latter might

not be assured of their loyalty, to the Union in view of

evident conflict of interests. The Union can also become
company-dominated with the presence of managerial
employees in Union membership.

GOLDEN FARMS VS. SEC. OF

517

LABOR, 234 SCRA

FACTS:
Petitioner Golden Farms, Inc., is a corporation engaged
in the production and marketing of bananas for export.
On February 27, 1992, private respondent Progressive
Federation of Labor (PFL) filed a petition before the MedArbiter praying for the holding of a certification election
among the monthly paid office and technical rank-andfile employees of petitioner Golden Farms. Petitioner
moved to dismiss claiming that PFL failed to show that it
organized a chapter within the petitioner establishment,
that there was already an existing CBA between the
rank and file employees represented by NFL and
petitioner, and that the employees represented by PFL
are disqualified by the courts. PFL countered that the
monthly-paid office workers and technical employees
should be allowed because they were expressly
excluded from the coverage of the CBA between
Petitioner and NFL. Petitioner argued that the subject
employees shoull have joined the existing CBA if they
are not managerial employees. On April 18,1991, the
Med-Arbiter ordered the conduct of the certification
elections. Petitioner appealed to the Secretary of Labor
which the LabSec denies the appeal for lack of merit.

ISSUE:
WON the Monthly Paid rank and file employee can
constitute a bargaining unit separate from the existing
bargaining units of its daily-paid rank and file employees

HELD:
Wherefore, Petition dismissed for lack of merit. RATIO:
Yes, the Monthly Paid office and technical rank and file
employee of the petitioner enjoy constitutional rights to
self organization and collective bargaining. The duties of
the monthly paid employees primarily administrative
and clerical which is of different nature from daily paid
employees whose main work is the cultivation of
bananas. To be sure, the monthly paid group have even
been excluded from the bargaining unit of the daily paid
rank and file employees. In the case of UP vs FerrerCalleja, the SC sanctioned the formation of 2 separate
bargaining units within the establishment. Finally, the
SC note that it was Petitioner company that filed the
motion to dismiss the petition for election violating the
general rule that the employer has no standing to
question a certification election since this is the so that
the employer has no standing to question a certification
election since this is the sole concerns of the workers.
De La Salle Univ. v. DLSU-Employees Association
330 SCRA 363 (2000)
Facts: Dela Salle University and DLSUEA-NAFTEU
entered into a collective bargaining agreement with a
life span of 3 years. During the freedom period,
negotiations with the University for a new CBA were
unsuccessful. Identifying the unresolved issues, the

matter was submitted for arbitration. One of the issues

was the scope of the bargaining unit. Magsalin, as
arbitrator decided that the Computer Operators
assigned at the Computer Services Center just like any
other Computer Operators in other units, should be
included as members of the bargaining unit, the
discipline officers belong to the rank-and-file on the
basis of the nature of their job and that the employees
of the College of St. Benilde, the College having a
personality separate and distinct from the University,
such employees are outside the bargaining unit of said
University. Both parties filed for reconsideration with the
Magsalin but were not entertained by him. The
University then filed for certiorari with the Court.

Issue: 1) whether the computer operators assigned at

the Universitys Computer Services Center and the
Universitys discipline officers may be considered as
confidential employees and should therefore be
excluded from the bargaining unit which is composed of
rank and file employees of the University and 2)
whether the employees of the College of St. Benilde
should also be included in the same bargaining unit

unit. During the freedom period, the parties may not

only renew the existing collective bargaining agreement
but may also propose and discuss modifications or
amendments thereto. With regard to the alleged
confidential nature of the said employees functions,
after a careful consideration of the pleadings filed
before this Court, we rule that the said computer
operators and discipline officers are not confidential
employees. As carefully examined by the Solicitor
General, the service record of a computer operator
reveals that his duties are basically clerical and nonconfidential in nature.[52] As to the discipline officers, we
agree with the voluntary arbitrator that based on the
nature of their duties, they are not confidential
employees and should therefore be included in the
bargaining unit of rank-and-file employees.

2) The Court also affirms the findings of the voluntary

arbitrator that the employees of the College of St.
Benilde should be excluded from the bargaining unit of
the rank-and-file employees of Dela Salle University,
because the two educational institutions have their own
separate juridical personality and no sufficient evidence
was shown to justify the piercing of the veil of corporate
fiction.

Held:
1) The Court agrees with the Solicitor General that the
express exclusion of the computer operators and
discipline officers from the bargaining unit of rank-andfile employees in the 1986 collective bargaining
agreement does not bar any re-negotiation for the
future inclusion of the said employees in the bargaining

G.R.

No.

110399

August

15,

1997

SAN MIGUEL CORPORATION SUPERVISORS AND

EXEMPT
President

UNION
V.

AND

ERNESTO

HONORABLE

L.

PONCE,

BIENVENIDO

E.

LAGUESMA IN HIS CAPACITY AS UNDERSECRETARY

employees sought to be included in the appropriate

OF

bargaining unit.

LABOR

AND

EMPLOYMENT,

HONORABLE

DANILO L. REYNANTE IN HIS CAPACITY AS MEDARBITER AND SAN MIGUEL CORPORATION

Upon

petitioner-unions

motion,

Undersecretary

FACTS: Petitioner union filed before DOLE a Petition for

Laguesma granted the reconsideration prayed for and

Direct Certification or Certification Election among the

directed the conduct of separate certification elections

supervisors and exempt employees of the SMC Magnolia

among the supervisors ranked as supervisory levels 1 to

Poultry Products Plants of Cabuyao, San Fernando and

4 (S1 to S4) and the exempt employees in each of the

Otis.

three plants at Cabuyao, San Fernando and Otis.

Med-Arbiter Danilo L. Reynante issued an Order ordering

the

conduct

of

certification

election

among

the

ISSUE:

abovementioned employees of the different plants as

1. Whether Supervisory employees 3 and 4 and the

one bargaining unit.

exempt employees of the company are considered

confidential employees, hence ineligible from joining a

San Miguel Corporation filed a Notice of Appeal with

union.

Memorandum on Appeal, pointing out, among others,

the Med-Arbiters error in grouping together all three (3)

2. If they are not confidential employees, do the

separate plants, into one bargaining unit, and in

employees of the three plants constitute an appropriate

including

single bargaining unit.

supervisory

levels

and

above

whose

positions are confidential in nature.

RULING:
Laguesma,

(1) On the first issue, this Court rules that said

granted respondent companys Appeal and ordered the

employees do not fall within the term confidential

remand of the case to the Med-Arbiter of origin for

employees who may be prohibited from joining a

determination of the true classification of each of the

union.

The

public

respondent,

Undersecretary

They are not qualified to be classified as managerial

Management should not be required to handle labor

employees who, under Article 245 of the Labor Code,

relations

are not eligible to join, assist or form any labor

represented by the union with which the company is

organization. In the very same provision, they are not

required to deal and who in the normal performance of

allowed membership in a labor organization of the rank-

their duties may obtain advance information of the

and-file employees but may join, assist or form separate

companys position with regard to contract negotiations,

labor organizations of their own.

the disposition of grievances, or other labor relations

matters

through

employees

who

are

matters.
Confidential employees are those who (1) assist or act
in a confidential capacity, (2) to persons who formulate,

The Court held that if these managerial employees

determine, and effectuate management policies in the

would belong to or be affiliated with a Union, the latter

field of labor relations. The two criteria are cumulative,

might not be assured of their loyalty to the Union in

and both must be met if an employee is to be

view of evident conflict of interest. The Union can also

considered a confidential employee that is, the

become company-dominated with the presence of

confidential

managerial employees in Union membership.

relationship

must

exist

between

the

employee and his supervisor, and the supervisor must

handle the prescribed responsibilities relating to labor

An important element of the confidential employee

relations.

rule is the employees need to use labor relations

information. Thus, in determining the confidentiality of

The exclusion from bargaining units of employees who,

certain employees, a key question frequently considered

in the normal course of their duties, become aware of

is the employees necessary access to confidential labor

management policies relating to labor relations is a

relations information.

principal objective sought to be accomplished by the

rationale

(2) The fact that the three plants are located in three

behind this rule is that employees should not be placed

different places, namely, in Cabuyao, Laguna, in Otis,

in a position involving a potential conflict of interests.

Pandacan,

confidential

employee

rule.

The

broad

Metro

Manila,

and

in

San

Fernando,

Pampanga is immaterial. Geographical location can be

completely disregarded if the communal or mutual
interests of the employees are not sacrificed.
An appropriate bargaining unit may be defined as a
group of employees of a given employer, comprised of
all or less than all of the entire body of employees,
which the collective interest of all the employees,
consistent with equity to the employer, indicate to be
best suited to serve the reciprocal rights and duties of
the parties under the collective bargaining provisions of
the law.
A unit to be appropriate must effect a grouping of
employees who have substantial, mutual interests in
wages, hours, working conditions and other subjects of

(SHINE). Private respondents were engaged as contract

employees hired by GTZ to work for shine.
Nicolay, a Belgian national, assumed the post of SHINE
Project Manager. Disagreements eventually arose
between Nicolay & private respondents in matters such
as salary adjustments and implementations.
Each of the private respondents received a letter from
Nicolay, informing them of the pretermination of their
contracts of employment on the grounds of serious &
gross insubordination, among others, resulting to loss of
trust & confidence.
In raising the defense of immunity from suit, petitioner
GTZ alleges that it is the implementing agency of the
Government of the Federal Republic of Germany in a
German Technical Cooperation Project pursuant to a
bilateral agreement between the Federal Republic of
Germany and the Republic of the Philippines, and that to
promote the project jointly with the Republic of the
Philippines, private respondents were employed as a
support group by petitioner GTZ.

collective bargaining.

117. DEUTSCHE GESELLSCHAFT FRTECHNISCHE

ZUSAMMENARBEIT,ET. AL. (GTZ) vs. HON. COURT
OF APPEALS, ET. AL.

Issue: WON GTZ enjoys immunity from suit, taking off

from the principle that a foreign State and its
instrumentalities are insusceptible to suit in the
jurisdiction of the host State.

G.R. No. 152318 April 16, 2009

Held: No.

Facts:

In raising the defense of immunity from suit, petitioner

GTZ alleges that it is the implementing agency of the
Government of the Federal Republic of Germany in a
German Technical Cooperation Project pursuant to a

The Government of Federal Republic of Germany & the

Republic of the Philippines ratified an agreement called
Social Health Insurance Networking & Empowerment

bilateral agreement between the Federal Republic of

Germany and the Republic of the Philippines, and that to
promote the project jointly with the Republic of the
Philippines, private respondents were employed as a
support group by petitioner GTZ.
But as company organized under private law, it has
legal personality independent of that of the Federal
Republic of Germany. The court thus ruled that GTZ
consistently has been unable to establish with
satisfaction that it enjoys the immunity from suit
generally enjoyed by its parent country.
ATLAS
LITHOGRAPHIC
SERVICES,
INC., petitioner, vs.
UNDERSECRETARY BIENVENIDO E. LAGUESMA
(Department of Labor and Employment) and
ATLAS
LITHOGRAPHIC
SERVICES,
INC.
SUPERVISORY,
ADMINISTRATIVE,
PERSONNEL,
PRODUCTION, ACCOUNTING AND CONFIDENTIAL
EMPLOYEES
ASSOCIATION-KAISAHAN
NG
MANGGAWANG PILIPINO (KAMPIL-KATIPUNAN)
[G.R. No. 96566; January 6, 1992]

FACTS:
On July 16, 1990, the supervisory, administrative
personnel, production, accounting and confidential
employees of Atlas Lithographic Services Inc (ALSI)
affiliated with Kaisahan ng ManggagawangPilipinom a
national labor organization. The local union adopted the
name ALSI-SAPPACEA-KAMPIL, which shall hereafter
refer to as the supervisors union.

Kampil-Katipunan filed on behalf of the supervisors

union a petition for certification election so that it could
be the sole and exclusive bargaining agent of the
supervisory employees. ALSI opposed the petition
claiming that under Art. 245 of the Labor Code, KampilKatipunana cannot represent the supervisory employees
for collective bargaining purposes because it also
represents the rank-and-file employees union.

On September 18, 1990, the Med-Arbiter issued an

order allowing the certification election. ALSI appealed
but such appeal was denied. Hence, this petition for
certiorari.

ISSUE(S):
1. WON, under Art. 245 of the Labor Code, a local
union of supervisory employees may be allowed
to affiliate with a national federation of labor
organization of rank-and-file employees where
such federation represents its affiliates in the
collective bargaining negotiation with the same
employer of the supervisors and in the
implementation of the CBAs.
HELD: NO, supervisors are not prohibited from forming
their own union. What the law prohibits is their
membership in a labor organization of rank-and-file
employees or their joining in a federation of rank-andfile employees that includes the very local union which
they are not allowed to directly join.

RATIO:
ALSIs arguments:

1. KAMPIL-KATIPUNAN already represents its rankand-file employees and, therefore, to allow the
supervisors of those employees to affiliate with
the private respondent is tantamount to allowing
the circumvention of the principle of the
separation of unions under Article 245 of the
Labor Code.
2. It further argues that the intent of the law is to
prevent a single labor organization from
representing different classes of employees with
conflicting interests.
KAMPIL-KATIPUNANs arguments:
1. Despite affiliation with a national federation, the
local union does not lose its personality which is
separate, and distinct from the national
federation. [Adamson & Adamson vs. CIR (1984)]
2. It maintains that Rep. Act No. 6715 contemplates
the principle laid down by this Court in
the Adamson case interpreting Section 3 of Rep.
Act No. 875 (the Industrial Peace Act) on the right
of a supervisor's union to affiliate. The private
respondent asserts that the legislature must have
noted the Adamson ruling then prevailing when it
conceived the reinstatement in the present Labor
Code of a similar provision on the right of
supervisors to organize.
DISCUSSION:
The basis of the Adamson case is R.A. No. 875
(Industrial Peace Act) where employees were classified
into three groups, namely: 1) managerial employees; 2)
supervisors;
and
3)
rank-and-file
employees.
Supervisors who were considered employees in relation
to their employer could join a union but not a union of
rank-and-file employees.

With the enactment in 1974 of the Labor Code (Pres

Decree No. 442), employees were classified into
managerial and rank-and-file employees. Neither the
category of supervisors nor their right to organize under
the old statute were recognized. So that, in Bulletin
Publishing Corporation v. Sanchez (144 SCRA 628
[1986]), the Court interpreted the superseding labor law
to have removed from supervisors the right to unionize
among themselves. The Court ruled:
In the light of the factual background of this
case, We are constrained to hold that the
supervisory employees of petitioner firm
may not, under the law, form a supervisors
union, separate and distinct from the
existing bargaining unit (BEU), composed of
the rank-and-file employees of the Bulletin
Publishing Corporation. It is evident that
most of the private respondents are
considered managerial employees. Also, it is
distinctly stated in Section 11, Rule II, of the
Omnibus Rules Implementing the Labor
Code, that supervisory unions are presently
no longer recognized nor allowed to exist
and operate as such. (pp. 633, 634)
In Section 11, Rule II, Book V of the Omnibus Rules
implementing Pres. Decree No. 442, the supervisory
unions existing since the effectivity of the New Code in
January 1, 1975 ceased to operate as such and the
members who did not qualify as managerial employees
under this definition in Article 212 (k) therein became
eligible to form, to join or assist a rank-and-file union.
A revision of the Labor Code undertaken by the
bicameral Congress brought about the enactment of

Rep. Act No. 6715 in March 1989 in which employees

were reclassified into three groups, namely: (1) the
managerial employees; (2) supervisors; and (3) the rank
and file employees. Under the present law, the category
of supervisory employees is once again recognized.
Hence, Art. 212 (m) states:
(m) . . . Supervisory employees are those
who, in the interest of the employer,
effectively recommend such managerial
actions if the exercise of such authority is
not merely routinary or clerical in nature but
requires
the
use
of
independent
judgment. . . .
The rationale for the amendment is the government's
recognition of the right of supervisors to organize with
the qualification that they shall not join or assist in the
organization of rank-and-file employees. The reason
behind the Industrial Peace Act provision on the same
subject matter has been adopted in the present statute.
The interests of supervisors on the one hand, and the
rank-and-file employees on the other, are separate and
distinct.
The
functions
of
supervisors,
being recommendatory in nature, are more identified
with the interests of the employer. The performance of
those functions may, thus, run counter to the interests
of the rank-and-file.
This intent of the law is made clear in the deliberations
of the legislators on then Senate Bill 530 now enacted
as Rep. Act No. 6715.
The definition of managerial employees was limited to
those having authority to hire and fire while those who
only recommend effectively the hiring or firing or

transfers of personnel would be considered as closer to

rank-and-file employees. The exclusion, therefore, of
middle level executives from the category of managers
brought about a third classification, the supervisory
employees. These supervisory employees are allowed to
form their own union but they are not allowed to join the
rank-and-file union because of conflict of interest
(Journal of the Senate, First Regular Session, 1987,
1988,
Volume
3,
p. 2245).
In terms of classification, however, while they are more
closely identified with the rank-and-file they are still not
allowed to join the union of rank-and-file employees.
The peculiar role of supervisors is such that while they
are not managers, when they recommend action
implementing management policy or ask for the
discipline or dismissal of subordinates, they identify with
the interests of the employer and may act contrary to
the interests of the rank-and-file.
The Court agrees with ALSIs contention that a conflict
of interest may arise in the areas of discipline, collective
bargaining and strikes. Members of the supervisory
union might refuse to carry out disciplinary measures
against their co-member rank-and-file employees. And
also, in the event of a strike, the national federation
might influence the supervisors union to conduct a
sympathy strike on the sole basis of affiliation.
The Court construes Article 245 to mean that, as in
Section 3 of the Industrial Peace Act, supervisors shall
not be given an occasion to bargain together with the
rank-and-file against the interests of the employer
regarding terms and conditions of work.

The Court emphasizes that the limitation is not confined

to a case of supervisors wanting to join a rank-and-file
local union. The prohibition extends to a supervisors'
local union applying for membership in a national
federation the members of which include local unions of
rank-and-file employees. The intent of the law is clear
especially where, as in the case at bar, the supervisors
will be co-mingling with those employees whom they
directly supervise in their own bargaining unit.
There is no question about this intendment of the law.
There is, however, in the present case, no violation of
such a guarantee to the employee. Supervisors are not
prohibited from forming their own union. What the law
prohibits is their membership in a labor organization of
rank-and-file employees (Art. 245, Labor Code) or their
joining a national federation of rank-and-file employees
that includes the very local union which they are not
allowed to directly join.
NOTE: Before this case was resolved, ALSI caved in to
the pressure and was no longer interested to pursue this
case. SC just said the employer is free to grant
whatever concession it wishes to give to its employees
unilaterally or through negotiations. However, the
resolutions issued by DOLE were still struck down.
WHEREFORE, the petition is hereby GRANTED. The
private respondent is disqualified from affiliating with a
national federation of labor organizations which includes
the petitioner's rank-and-file employees.

PHILIPS
INDUSTRIAL
INC., petitioner, vs.NATIONAL

DEVELOPMENT,
LABOR RELATIONS

COMMISSION
and
PHILIPS
ORGANIZATION (FFW),respondents.
G.R. No. 88957; June 25, 1992

EMPLOYEES

(NOTE: This is supra case under the topic of right to self

organization of confidential employees. Discussion of
facts are not included in this digest)

ISSUE:
Whether or not the security guards of PIDI may be
excluded from the bargaining unit/forming a Union.

HELD:
NO, security guards are not prohibited from joining labor
organizations. Originally, Article 245 of the Labor Code
prohibited security personnel from joining a labor
organization.
However, Section 6 of E.O. No. 111,
enacted on 24 December 1986 (after the original labor
case was filed in 1987), repealed Art. 245 and replaced
it with a totally different provision. Thus the prohibition
no longer exists in any form in the Labor Code.
LABOR ORGANIZATION
E. 3.2 - CHARTERED LOCAL, DEFINED UNDER DO
NO. 40 RI S(i)
[G.R. No. 152356. August 16, 2005]

SAN MIGUEL CORPORATION (MANDAUE PACKAGING

PRODUCTS PLANTS), petitioner, vs. MANDAUE PACKING
PRODUCTS PLANTS-SAN PACKAGING PRODUCTS SAN
MIGUEL CORPORATION MONTHLIES RANK-AND-FILE
UNION FFW (MPPP-SMPP-SMAMRFU-FFW), respondent.
FACTS:
Respondent, identifying itself as an affiliate of
Federation of Free Workers (FFW), filed a petition for
certification election with the DOLE. In the petition,
respondent stated that it sought to be certified and to
represent the permanent rank-and-file monthly paid
employees of the petitioner.
Petitioner filed a motion to dismiss the petition for
certification election on the sole ground that herein
respondent is not listed or included in the roster of
legitimate labor organizations based on the certification
issued by the Officer-In-Charge, Regional Director of the
DOLE Regional Office No. VII, Atty. Jesus B. Gabor, on 24
July 1998.
Respondent submitted to the Bureau of Labor Relations
the same documents earlier attached to its petition for
certification. The accompanying letter, signed by
respondents president, stated that such documents
were submitted in compliance with the requirements for
the creation of a local/chapter pursuant to the Labor
Code and its Implementing Rules; and it was hoped that
the submissions would facilitate the listing of
respondent under the roster of legitimate labor
organizations. The Chief of Labor Relations Division of
DOLE Regional Office No. VII issued a Certificate of
Creation of Local/Chapter certifying that from 30 July
1998, respondent has acquired legal personality as a
labor organization/workers association, it having
submitted all the required documents.

In the meantime, the Med-Arbiter issued an Order

dismissing respondents petition for certification
election. The sole ground relied upon for the dismissal
was the Med-Arbiters Opinion that as of the date of filing
of the petitio, respondent did not have the legal
personality to file the said petition for certification
election.
Respondent promptly appealed to the DOLE. The DOLE
Undersecretary rendered a Decision reversing the Order.
The Undersecretary concluded that respondent acquired
legal personality as early as 15 June 1998, the date it
submitted the required documents, citing Section 3,
Rule VI of the New Rules Implementing the Labor Code,
which deems that a local/chapter acquires legal
personality from the date of filing.
ISSUE:
When is legal personality acquired?
HELD:
Department Order No. 40, now in effect, has
eased the requirements by which a local/chapter
may acquire legal personality. Interestingly,
Department Order No. 40 no longer uses the term
local/chapter, utilizing instead chartered local,
which is defined as a labor organization in the
private sector operating at the enterprise level
that acquired legal personality through the
issuance of a charter certificate by a duly
registered federation or national union, and
reported to the Regional Office.Clearly under the
present rules, the first step to be undertaken in the
creation of a chartered local is the issuance of a charter
certificate by the duly registered federation or national
union. Said federation or national union is then
obligated to report to the Regional Office the creation of

such chartered local, attaching thereto the charter

certificate it had earlier issued.
But as stated earlier, it is Department Order No. 9 that
governs in this case. Section 1, Rule VI thereof
prescribes the documentary requirements for the
creation of a local/chapter. It is evident based on this
rule that the local/chapter acquires legal personality
from the date of the filing of the complete documentary
requirements, and not from the issuance of a
certification to such effect by the Regional Office or
Bureau. On the other hand, a labor organization is
deemed to have acquired legal personality only on the
date of issuance of its certificate of registration,which
takes place only after the Bureau of Labor Relations or
its Regional Offices has undertaken an evaluation
process lasting up until thirty (30) days, within which
period it approves or denies the application.In contrast,
no such period of evaluation is provided in Department
Order No. 9 for the application of a local/chapter, and
more importantly, under it such local/chapter is deemed
to acquire legal personality from the date of filing of the
documents enumerated under Section 1, Rule VI, Book
V.

SAMAHANG
MANGGAGAWA
SA
CHARTER
CHEMICAL SOLIDARITY OF UNIONS IN THE
PHILIPPINES FOR EMPOWERMENT AND REFORMS
(SMCC-SUPER), ZACARRIAS JERRY VICTORIO-Union
President, vs. CHARTER CHEMICAL and COATING
CORPORATION,
Facts: Samahang Manggagawa sa Charter Chemical
Solidarity of Unions in the Philippines for Empowerment
and Reforms (petitioner union) filed a petition for

certification election among the regular rank-and-file

employees of Charter Chemical and Coating Corporation
(respondent company) with the Mediation Arbitration
Unit of the DOLE, National Capital Region. Company
filed an Answer with Motion to Dismiss on the ground
that petitioner union is not a legitimate labor
organization because of (1) failure to comply with the
documentation requirements set by law, and (2) the
inclusion of supervisory employees within petitioner
union.
Issue: Whether charter certificate issued by Federation
needs to be certified and attested to by the local union
officers, as part of the registration requirements of a
charter
Held: The charter certificate need not be certified under
oath by the local unions secretary or treasurer and
attested to by its president. The then prevailing Section
1, Rule VI of the Implementing Rules of Book V, as
amended by D.O. No. 9, series of 1997, provides:
Section 1. Chartering and creation of a local chapter
A duly registered federation or national union may
directly create a local/chapter by submitting to the
Regional Office or to the Bureau two (2) copies of the
following:
(a) A charter certificate issued by the federation or
national union indicating the creation or establishment
of the local/chapter; (b) The names of the
local/chapters officers, their addresses, and the
principal office of the local/chapter; and (c) The
local/chapters constitution and by-laws provided that
where the local/chapters constitution and by-laws [are]
the same as [those] of the federation or national union,
this fact shall be indicated accordingly.

All the foregoing supporting requirements shall be

certified under oath by the Secretary or the Treasurer of
the local/chapter and attested to by its President. As
readily seen, the Sama-samang Pahayag ng Pagsapi at
Authorization and Listahan ng mga Dumalo sa
Pangkalahatang Pulong at mga Sumang-ayon at
Nagratipika sa Saligang Batas are not among the
documents that need to be submitted to the Regional
Office or Bureau of Labor Relations in order to register a
labor organization. Petitioner unions charter certificate
need not be executed under oath. Consequently, it
validly acquired the status of a legitimate labor
organization upon submission of (1) its charter
certificate,24 (2) the names of its officers, their
addresses, and its principal office,25 and (3) its
constitution and by-laws the last two requirements
having been executed under oath by the proper union
officials as borne out by the records.

Facts:
Tagaytay Highlands Employees Union
(THEU)Philippine Transport and General Workers
Organization (PTGWO), Local Chapter No. 776, a
legitimate labor organization said to represent majority
of the rank-and-file employees of THIGCI, filed a petition
for certification election. THIGCI opposed THEUs petition
for certification election on the ground that the list of
union members submitted by it was defective and
fatally flawed as it included the names and signatures of
supervisors, resigned, terminated and absent without
leave (AWOL) employees, as well as employees of The
Country Club, Inc., a corporation distinct and separate
from THIGCI; and that out of the 192 signatories to the
petition, only 71 were actual rank-and-file employees of
THIGCI.
Issue: Whether the legal personality of the union can
be subject to collateral attack.
Held: No. After a certificate of registration is issued to a
union, its legal personality cannot be subject to
collateral attack. It may be questioned only in an
independent petition for cancellation in accordance with
Section 5 of Rule V, Book IV of the Rules to Implement
the Labor Code (Implementing Rules) which section
reads:

TAGAYTAY HIGHLANDS INTERNATIONAL GOLF

CLUB INCORPORATED, vs. TAGAYTAY HIGHLANDS
EMPLOYEES UNION-PGTWO,

Sec. 5. Effect of registration. The labor organization or

workers association shall be deemed registered and
vested with legal personality on the date of issuance of
its certificate of registration. Such legal personality
cannot thereafter be subject to collateral attack, but
may be questioned only in an independent petition for
cancellation in accordance with these Rules.

MARIWASA SIAM CERAMICS, INC., vs. THE

SECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, et al
G.R. No. 183317 December 21, 2009

FACTS:
On May 2005, private respondent Samahan Ng
MgaManggagawa Sa Mariwasa Siam Ceramics, Inc.
(SMMSC-Independent) was issued a Certificate of
Registration as a legitimate labor organization by the
Department of Labor and Employment (DOLE), Region
IV-A.

The petitioner appealed and insisted that private

respondent failed to comply with the 20% union
membership requirement for its registration as a
legitimate
labor
organization
because
of
the
disaffiliation from the total number of union members of
102 employees who executed affidavits recanting their
union membership

Hence, this petition for review on certiorari under Rule

45 of the Rules of Court.

ISSUES:
On June 2005, petitioner Mariwasa Siam Ceramics, Inc.
filed a Petition for Cancellation of Union Registration
against private respondent, claiming that the latter
violated Article 234 of the Labor Code for not complying
with the 20% requirement and that it committed
massive fraud and misrepresentation in violation of
Article 239 of the same code.

1) Whether or not there was failure to comply with the

20% union membership requirement
2) Whether or not the withdrawal of 31 union members
affected the petition for certification election insofar as
the 30% requirement is concerned

RULING
The Regional Director of DOLE IV-A issued an Order
granting the petition, revoking the registration of
respondent, and delisting it from the roster of active
labor unions.

SMMSC-Independent appealed to the Bureau of Labor

Relations. BLR ruled in favor of the respondent, thus,
they remain in the roster of legitimate labor
organizations.

The Supreme Court DENIED the petition.

On the first issue, while it is true that the withdrawal of

support may be considered as a resignation from the
union, the fact remains that at the time of the unions
application for registration, the affiants were members
of respondent and they comprised more than the
required 20% membership for purposes of registration
as a labor union. Article 234 of the Labor Code merely

requires a 20% minimum membership during the

application for union registration. It does not mandate
that a union must maintain the 20% minimum
membership requirement all throughout its existence.

On the second issue, it appears undisputedly that the

31 union members had withdrawn their support to the
petition before the filing of said petition. The distinction
must be that withdrawals made before the filing of the
petition are presumed voluntary unless there is
convincing proof to the contrary, whereas withdrawals
made after the filing of the petition are deemed
involuntary. Therefore, following jurisprudence, the
employees were not totally free from the employers
pressure and so the voluntariness of the employees
execution of the affidavits becomes suspect.

The cancellation of a unions registration doubtless has

an impairing dimension on the right of labor to selforganization. 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.

HOTEL
MANILA
SUPERVISORS
NUWHRAIN-HHMSC), respondents

CHAPTER

FACTS:Respondent NUWHRAIN filed with the DOLE-NCR

a petition for certification election. The Med- Arbiter
granted the petition and ordered the holding of a
certification election.

Petitioner discovered that respondent had failed

to submit to the Bureau of Labor Relations (BLR)
its annual financialreport for several years and
the list of its members since it filed its
registration papers. Consequently, petitioner filed
a Petition for Cancellation of Registration of
respondent, on the ground of the non-submission
ofthe said documents.

Petitioner filed a Motion to Dismiss or Suspend the

[Certification Election]Proceedings, arguing that the
dismissal or suspension of the proceedings is warranted,
considering that the legitimacy ofrespondent is seriously
being challenged in the petition for cancellation of
registration. However, the certification election pushed
through and respondent emerged as the winner.
Consequently, petitioner filed a Protest with Motion to
Defer Certification of Election Results and Winner.

G.R. No. 178296: January 12, 201

THE HERITAGE HOTEL MANILA, acting through its
owner, GRAND PLAZA HOTEL CORPORATION,
petitioners vs. NATIONAL UNION OF WORKERS IN
THE
HOTEL,
RESTAURANT
AND
ALLIED
INDUSTRIES- HERITAGE

Med-Arbiter held that the pendency of a petition for

cancellation of registration is not a bar to the holding of
acertification election.The DOLE Secretary later
dismissed the appeal,

The Regional Director of DOLE-NCR finally resolved the

petition for cancellation of registration. While findingthat
respondent had indeed failed to file financial reports
and the list of its members for several years, he,
nonetheless,denied the petition, ratiocinating that
freedom of association and the employees right to selforganization are moresubstantive considerations.

In view of the Directors inhibition, the DOLE Secretary

took cognizance of the appeal. In a resolution, she
dismissed the appeal, holding that the constitutionally
guaranteed freedom of association andright of workers
to
self-organization
outweighed
respondents
noncompliance with the statutory requirements
tomaintain its status as a legitimate labor organization.

CA denied the petition. The CA opined that the DOLE

Secretary may legally assume jurisdiction over an
appeal from thedecision of the Regional Director in the
event that the Director of the BLR inhibits himself from
the case.

ISSUES:WON the Union Cert of Registration should be

cancelled.

HELD: Labor authorities should bear in mind that

registration confers upon a union the status of
legitimacy and the concomitantright and privileges
granted by law to a legitimate labor organization,
particularly the right to participate in or ask

forcertification election in a bargaining unit. Thus, the

cancellation of a certificate of registration is the
equivalent of snuffingout the life of a labor organization.
For without such registration, it loses - as a rule - its
rights under the Labor Code.

The Labor Codes provisions on cancellation of

union
registration
and
on
reportorial
requirements have been recentlyamended by
Republic
Act
(R.A.)
No.
9481,
An
Act
Strengthening the Workers Constitutional Right
to Self-Organization.

Amending for the Purpose Presidential Decree No. 442,

The amendment sought to strengthen the workers right
to self-organization and enhance the Philippines
compliance with its international obligations as
embodied in the InternationalLabour Organization (ILO)
Convention No. 87, pertaining to the non-dissolution of
workers organizations byadministrative authority.

Thus, R.A. No. 9481 amended Article 239 to read:

ART. 239. Grounds for Cancellation of Union

Registration.The following may constitute grounds
forcancellation of union registration:
Misrepresentation, false statement or fraud in
connection with the adoption or ratification of the
constitutionand by-laws or amendments thereto, the
minutes of ratification, and the list of members who
took part in theratification;

Misrepresentation, false statements or fraud in

connection with the election of officers, minutes of the
electionof officers, and the list of voters;
Voluntary dissolution by the members.

R.A. No. 9481 also inserted in the Labor Code Article

242-A, which provides:

ART. 242-A. Reportorial Requirements. The following

are documents required to be submitted to the
Bureauby the legitimate labor organization concerned:
(a) Its constitution and by-laws, or amendments thereto,
the minutes of ratification, and the list of members
whotook part in the ratification of the constitution and
by-laws within thirty (30) days from adoption or
ratification
ofthe
constitution
and
by-laws
or
amendments thereto;
(b) Its list of officers, minutes of the election of officers,
and list of voters within thirty (30) days from election;
(c) Its annual financial report within thirty (30) days
after the close of every fiscal year; and
(d) Its list of members at least once a year or whenever
required by the Bureau.
Failure to comply with the above requirements shall not
be a ground for cancellation of union registration
butshall subject the erring officers or members to
suspension, expulsion from membership, or any
appropriatepenalty.

The ILO has expressed the opinion that the cancellation

of union registration by the registrar of labor unions,
which inour case is the BLR, is tantamount to dissolution
of the organization by administrative authority when
such measurewould give rise to the loss of legal
personality of the union or loss of advantages necessary
for it to carry out its activities,which is true in our
jurisdiction.

Appellee failed to submit its annual financial reports and

list of individual members in accordance with Article 239
of theLabor Code. However, the existence of this ground
should not necessarily lead to the cancellation of union
registration.

An overly stringent interpretation of the statute

governing cancellation of union registration without
regard tosurrounding circumstances cannot be allowed.
Otherwise, it would lead to an unconstitutional
application of the statuteand emasculation of public
policy objectives. Worse, it can render nugatory the
protection to labor and social justiceclauses that
pervades
the
Constitution
and
the
Labor
Code.Moreover, submission of the required documents
is the duty of the officers of the union. It would be
unreasonable forthis Office to order the cancellation of
the union and penalize the entire union membership on
the basis of thenegligence of its officers.
Rural Bank of Alaminos Employees Union vs. NLRC
FACTS:
The Petition stems from three cases originally instituted

before Sub- Regional Arbitration Branch No. 1 of the

National Labor Relations Commission in Dagupan City.
The first case, NLRC Case No. 01-03-7-0049- 89, was
commenced by the herein petitioner, Ismael Tamayo,
Sr., against Rural Bank of Alaminos, Inc. (RBAI) for illegal
dismissal and damages. The second case, docketed as
NLRC Case No.01-04-7-0059-89, was filed by the herein
private respondent, Rural Bank of Alaminos, Inc.,
against the Rural Bank of Alaminos Employees Union for
unfair labor practice, declaration of illegality of strike
and damages. While the third case, docketed as NLRC
Case No. 01-06-0097-89, was filed by the Employees
Union against the Bank, charging the latter with unfair
labor practice and damages.

restraining the employees in the exercise of their right

to self-organization, suffice it to state that filing a
petition for cancellation of the Unions registration is not
per se an act of unfair labor practice. It must be shown
by substantial evidence that the filing of the petition for
cancellation of union registration by the employer was
aimed to oppress the Union. Consequently, the NLRC
was right in ordering the remand of Case No. 0097-89
for further proceedings.
G.R. No. 171153

September 12, 2007

ISSUE: Whether or not filing a petition for cancellation

of the Unions registration is an act of unfair labor
practice?

SAN MIGUEL CORPORATION EMPLOYEES UNION

PHILIPPINE TRANSPORT AND GENERAL WORKERS
ORGANIZATION
(SMCEUPTGWO), petitioner,
vs.
SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES
UNIONPAMBANSANG DIWA NG MANGGAGAWANG
PILIPINO (SMPPEUPDMP), respondent

HELD:

Facts:

A lock-out means the temporary refusal of an

employer to furnish work as a result of an industrial or
labor dispute.2 As correctly found by the NLRC, in the
case under consideration evidence of illegal lock-out is
wanting such that there can be no conclusive
determination by the NLRC as to the charge. Petitioners
failed to present sufficient proof to support the
allegation of illegal lock-out. No evidence was adduced
by the Union to show that the Bank really refused them
employment during the pendency of the strike. As to the
allegation that the Bank was interfering with and

Petitioner is the incumbent bargaining agent for the

bargaining unit comprised of the regular monthly-paid
rank and file employees of the three divisions of San
Miguel Corporation (SMC), namely, the San Miguel
Corporate Staff Unit (SMCSU), San Miguel Brewing
Philippines (SMBP), and the San Miguel Packaging
Products (SMPP), in all offices and plants of SMC,
including the Metal Closure and Lithography Plant in
Laguna. It had been the certified bargaining agent for
20 years from 1987 to 1997.
Respondent is registered as a chapter of Pambansang
Diwa ng Manggagawang Pilipino (PDMP). PDMP issued

Charter Certificate No. 112 to respondent on 15 June

1999.

Issue: Whether or not respondent is a legitimate labor

organization.

Respondent filed with the Med-Arbiter of the DOLE

Regional Officer in the National Capital Region (DOLENCR), three separate petitions for certification election
to represent SMPP, SMCSU, and SMBP but were
subsequently dismissed.

Held: No. However, a direct challenge to the legitimacy

of a labor organization based on fraud and
misrepresentation in securing its certificate of
registration is a serious allegation which deserves
careful scrutiny. Allegations thereof should be
compounded with supporting circumstances and
evidence. The records of the case are devoid of such
evidence.

On 17 August 1999, petitioner filed with the DOLE-NCR

a petition seeking the cancellation of respondent's
registration and its dropping from the rolls of legitimate
labor organizations. In its petition, petitioner accused
respondent of committing fraud and falsification,
and
non-compliance
with
registration
requirements in obtaining its certificate of
registration. It raised allegations that respondent
violated Articles 239(a), (b) and (c) and 234(c) of the
Labor Code. Moreover, petitioner claimed that PDMP is
not a legitimate labor organization, but a trade union
center. Hence, it cannot directly create a local or
chapter.

Petitioner's argument creates a predicament as it hinges

on the legitimacy of PDMP as a labor organization.
Firstly, this line of reasoning attempts to predicate that
a trade union center is not a legitimate labor
organization. In the process, the legitimacy of PDMP is
being impugned, albeit indirectly. Secondly, the same
contention premises that a trade union center cannot
directly create a local or chapter through the process of
chartering.

CA affirmed the BLR.

The Implementing Rules stipulate that a labor

organization shall be deemed registered and vested
with legal personality on the date of issuance of its
certificate of registration. Once a certificate of
registration is issued to a union, its legal
personality cannot be subject to collateral
attack. It may be questioned only in an
independent
petition
for
cancellation
in
accordance with Section 5 of Rule V, Book V of the
Implementing Rules.

Petitioner posits that respondent is required to submit a

list of members comprising at least 20% of the
employees in the bargaining unit before it may acquire
legitimacy.

PDMP was registered as a trade union center and issued

Registration Certificate No. FED-11558-LC by the BLR on
14 February 1991. Until the certificate of registration of
PDMP is cancelled, its legal personality as a legitimate

DOLE Regional Director found that respondent did not

comply with the 20% membership requirement and,
thus, ordered the cancellation of its certificate of
registration and removal from the rolls of legitimate
labor organizations.
BLR reversed the ruling of the Regional Director as to
the 20% membership requirement.

labor organization subsists. Once a union acquires

legitimate status as a labor organization, it continues to
be recognized as such until its certificate of registration
is cancelled or revoked in an independent action for
cancellation. It bears to emphasize that what is being
directly challenged is the personality of respondent as a
legitimate labor organization and not that of PDMP. This
being a collateral attack, the Court is without jurisdiction
to entertain questions indirectly impugning the
legitimacy of PDMP.

SAMAHAN NG MGA MANGGAGAWA SA SAMMALAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI NG

ALYANSA
(SAMMA-LIKHA)
vs.
SAMMA
CORPORATION
-

SAMMA-LIKHA filed a petition for certification election

on July 24, 2001 DOLE, Regional Office IV. It sought to
represent all the rank-and-file employees of Samma
Corporation.
Respondent moved for the dismissal of the petition
arguing among others that SAMMA LIKHA had a
prohibited mixture of supervisory and rank-and-file
employees.
Officer-in-Charge/Regional Director of DOLE Regional
Office IV, issued a resolution revoking the charter
certificate of petitioner as local chapter of LIKHA
Federation on the ground of prohibited mixture of
supervisory and rank-and-file employees.

Issue:
Whether the inclusion of one supervisory
employee in the union of rank-and-file employees is a
ground to impugn its legitimacy as a legitimate labor
organization which had the right to file a petition for
certification election.

Held: No.
LIKHA was granted legal personality as a federation
under certificate of registration no. 92-1015-032-11638FED-LC. Subsequently, petitioner as its local chapter
was issued its charter certificate no. 2-01.29 With
certificates of registration issued in their favor, they are
clothed with legal personality as legitimate labor
organizations.
Such legal personality cannot thereafter be subject to
collateral attack, but may be questioned only in an
independent petition for cancellation of certificate of
registration. Unless petitioners union registration is
cancelled in independent proceedings, it shall continue
to have all the rights of a legitimate labor organization,
including the right to petition for certification election.
Legend International Resorts Limited (Legend) vs
KilusangManggagawangLegenda (KML-INDEPENDENT)

Facts:

-June 6, 2001, KML filed with the Med-Arbitration Unit of

the DOLE, San Fernando,
Pampanga, a petition for certification election. KML
alleged that it is a legitimate labororganization of the
rank and file employees of Legend. It was issued its
Certification of Registration by DOLE on May 18, 2001.

-Legend moved to dismiss the petition on the grounds

that it is not a legitimate labor organization because its
membership is a mixture of rank and file employees and

supervisory employees. KML also committed acts of

fraud and misrepresentation when itmade it appear that
certain employees attended its general membership
meeting on April 5, 2001 when in reality some of them
were either at work, have already resigned, or were
abroad.

-KML argued that even if the supervisory employees

were excluded from membership, the certification
election could still proceed because the required
number of total rank and file employees necessary is
still sustained. It also claimed that its legitimacy as a
labor union cannot be attacked collaterally.

-Med Arbiter judgment September 20, 2001:

dismissed KMLs petition for certification election. Since
its membership included supervisory employees, it was
not a legitimate labor organization. KML was also guilty
of fraud and misrepresentation; 70 employees who were
claimed to be among those who attended its
organizational meeting were either at work or
elsewhere.

-Legend filed a Motion for Reconsideration. It also

alleged that it filed a petition for cancellation of
union registration of KML which was granted by the
DOLE Regional Office, November 7, 2001. MFR was
denied in a resolution dated August 20, 2002: a final
order of cancellation is required before a petition for
certification of election may be dismissed on the ground
of lack of legal personality, and that the November 7,
2001 decision was reversed by the BLR March 26,
2002.

-CA: held that the issue on the legitimacy of KML as a

labor organization has already
been settled with finality. The March 26, 2002 decision
upholding the legitimacy had longbecome final and
executor for failure of Legend to appeal.KML being a
legitimate labor org, it could properly file a petition for
certification election. Legend filed MFR stating thatit has
appealed to the CA the March 26, 2002 decision and is
still pending. CA denied MFR.

Issues:
-Office of the Secretary of DOLE May 22, 2002
decision: reversed Med-Arbiters
decision. KMLs legitimacy as a union cannot be
attacked collaterally. The presence of supervisory
employees does not ipso facto render the existence of a
labor organization illegal. Mixed membership is not one
of the grounds for dismissal of a petition for certification
election. Ordered the immediate conduct of the
certification election.

1.Whether Legend has timely appealed the March 26,

2002 decision (re: cancellation of union registration)

2.Whether the cancellation of KMLs certificate of

registration should retroact to the time ofits issuance (it
was cancelled in the November 7, 2001 decision)

3.Whether the legitimacy of the legal personality of KML

can be collaterally attacked in a petition for certification
election

Yes. The March 26, 2002 decision has not yet attained
finality considering that it has timely appealed to the CA
and which at that time is still pending resolution.
Legend timely filed on Sept 6, 2002 a petition for
certiorari before the CA assailing the March 26,2002
decision. On June 30, 2005, CA reversed the March 26,
2002 decision of the BLR and reinstated the November
7, 2001 decision cancelling the certificate of registration
of KML. KMLs MRF was denied. KML filed a petition for
certiorari before the SC, which was denied.

KML moved for reconsideration but it was denied with

finality. The decision to cancel KMLs certificate of
registration became final and executory and entry of
judgment was made on July 18, 2006.

2. No. According to ACAE v.Calleja, a certification

proceeding is not a litigation in the sensethat the term
is ordinarily understood, but an investigation of a non adversarial and fact-finding character. An order to
hold a certification election is proper despite the
pendency of the petition for cancellation of the
registration certificate of the respondent union.
The rationale is that at the time the union filed
the petition, it still had the legal personality to
perform such act absent an order directing the
cancellation.

In Capitol Medical Center, Inc. v. Hon.

Trajano,We also held that the pendency of a petition for
cancellation of union registration does not preclude
collective bargaining.Citing the Secretary of Labor, we
held viz:

That there is a pending cancellation proceedings

against the respondent Union is not a bar to set
in motion the mechanics of collective bargaining.
If a certification election may still be ordered
despite the pendency of a petition to cancel the
unions registration certificate x xx more so
should the collective bargaining process continue
despite its pendency.

There is no basis for Legends assertion that the

cancellation of KMLs certificate of
registration should retroact to the time of its issuance or
that it effectively nullified all of KMLs activities,
including its filing of the petition for certification election
and its demand to collectively bargain.

3. NO. The legitimacy of the legal personality of KML

cannot be collaterally attacked in a petition for
certification election proceeding. Such legal personality
may not be subject toa collateral attack but only
through a separate action instituted particularly for the
purpose of assailing it. SC affirmed the May 22, 2002
decision (KMLs legitimacy cannot be attacked
collaterally, presence of supervisory employees does

not render it illegal) and the August 20, 2002

resolution (a final order of cancellation is required
before a petition for certification election maybe
dismissed on the ground of lack of personality, reversed
March 26, 2002 decision)

Upon receipt of the modified Order of Minister Ople,

ABEU lifted its picket lines and announced its intention
to return to work. However, the Bank refused to admit
the strikers. The Bank filed a motion praying for the
issuance of an order directing the Union to hold a
general membership meeting for the purpose of
designating union representatives who would sign the
CBA inasmuch as the Unions officers had already been
dismissed by the Bank. On November 11, 1985, the
NUBE issued a resolution creating an ABEU Interim
Board tasked to sign the new CBA with the Bank in lieu
of the dismissed officers. In January 1987, the Interim
Board commenced negotiations with the Bank for a oneyear extension of the CBA. In effect, postponing for one
year the election of the regular officers of the Union.
The Bank granted. The postponement did not sit well
with the dismissed officers and hence, a case was filed
with the Office of The Secretary of Labor. The MedArbiter declared the extension null and void. Petitioners
appealed. In a resolution, the Interim Board appointed a
Comelec which issued a resolution setting the election
of officers of February 10, 1988. On motion of the
respondents, the Bureau of Labor Relations issued a
TRO from proceeding with the election. However,
despite the said order the Union held the election.
Petitioners were declared the winners in the election.
The BLR declared the election null and void.

Cruz v Calleja

In 1984, the Allied Bank Employees Union (ABEU), a

mere chapter of the National Union of Bank Employees
(NUBE), elected its officers, whose term would expired
on February 10, 1987.
Before the expiration of the old CBA between ABEU and
Allied Bank on June 30, 1984, the ABEU negotiated for a
new CBA. However, during the negotiations a bargaining
deadlock ensued. ABEU filed a notice to strike.
Then Labor Minister Ople assumed jurisdiction over the
dispute on December 19, 1984. In defiance of the
Ministers return-to-work order, the Union declared a
strike on January 3, 1985 and established picketlines at
the Banks head office and Binondo branch.
On January 31, 1985, Minister Ople issued an Order
resolving the despute and in effect drew up a new CBA
for the parties. The 3-year term of the new CBA would
expire on January 31, 1988.

Hence this petition.

The union asked for reconsideration and still continued

its strike. 270 striking employees of ABEU including
respondents were dismissed by the Bank.

Issues:
1.

Whether or not the public respondent erred in declaring

2.

null and void the election held on Feb. 10, 1988

Whether or not the extension of the CBA was valid
Held:

1.

There is no merit in the petitioners' contention that the

public respondent gravely abused her discretion in
annulling the February 10, 1988 election of officers. The
public respondent correctly noted that in ordering the
postponement of the election for one year (in effect
extending their term of office for one year), the ABEU
Interim Board "overstepped its bounds" for it was 2.
constituted and authorized only "to sign for and in
behalf of the union the Collective Bargaining Agreement
with the Bank and administer the CBA and the operation
of the union.
Instead of calling a regular election of officers of ABEU
on 11 February 1987, as mandated by the Union's
Constitution and by-laws, respondents submitted in a
"referendum" the extension of their term of office for
yet another year, from 11 February 1987 to 10 February
1988.
From the very inception the referendum process
initiated by the Interim Board was improper. The results
therefrom are therefore, invalid. It may be true, that the
task of administering the operation of the union was
given to the ABEU-Interim Board at the time it was
constituted, to fill in the vacuum in the local union's
leadership during that time. Nonetheless said task could
not be exercised beyond the regular term of the regular
officers. Stated simply, the exercise of said task is only
coterminous with the term of the regular officers, in
whose shoes, the members of the ABEU-Interim Board

merely stepped into.

When the term of the union's regular officers expired on
February 11, 1987 the election of officers should have
been held, in accordance with the provision of the union
constitution and by laws. With the expiration of the term
of the regular officers, the term of the ABEU-Interim
Board, expired too. In calling the referendum therefore,
the ABEU-Interim Board clearly overstepped its bounds.

The second issue regarding the validity of the one-year

extension of the CBA, as observed by the BLR, has
become moot and academic. The public respondent's
view that the one-year extension was also null and void
is not quite correct for the extension was approved by
the Union in a referendum which was properly
supervised by the Department of Labor. It was accepted
by the Bank which gave a "signing bonus" to the
employees who voted for it. Since the holding of the
referendum was within the authority of the Interim
Board "to administer the CBA and operate the union,"
and the extension was acceptable to both of the parties
to the agreement, and did not violate any law, it is valid
and binding on them.
PALACOL vs.CALLEJA

Facts:

On October 12, 1987, the respondent Manila CCBPI

Sales Force Union (hereinafter referred to as the Union),

as the collective bargaining agent of all regular

salesmen, regular helpers, and relief helpers of the
Manila Plant and Metro Manila Sales Office of the
respondent Coca-Cola Bottlers (Philippines), Inc.
(hereinafter referred to as the Company) concluded a
new collective bargaining agreement with the latter.
Among the compensation benefits granted to the
employees was a general salary increase to be given in
lump-sum
including
re-computation
of
actual
commissions earned based on the new rates of
increase.

On the same day, the president of the Union submitted

to the Company the ratification by the union members
of the new CBA and authorization for the Company to
deduct union dues equivalent to P10.00 every payday or
P20.00 every month and, in addition, 10% by way of
special assessment, from the CBA lump-sum pay
granted to the union members. As embodied in the
Board Resolution of the Union dated September 29,
1987, the purpose of the special assessment sought to
be levied is "to put up a cooperative and credit union;
purchase vehicles and other items needed for the
benefit of the officers and the general membership; and
for the payment for services rendered by union officers,
consultants and others. "This "Authorization and CBA
Ratification" was obtained by the Union through a secret
referendum held in separate local membership
meetings on various dates.

The total membership of the Union was about 800. Of

this number, 672 members originally authorized the10%
special assessment, while 173 opposed the same.

Subsequently however, one hundred seventy (170)

members of the Union submitted documents to the
Company stating that although they have ratified the
new CBA, they are withdrawing or disauthorizing the
deduction of any amount from their CBA lump sum.
Later, 185 other union members submitted similar
documents expressing the same intent. These
members, numbering 355 in all (170 + 185) ,added to
the original oppositors of 173, turned the tide in favor of
disauthorization for the special assessment, with a total
of 528 objectors and a remainder of 272 supporters.

Petitioners assailed the 10% special assessment as a

violation of Article 241(o) in relation to Article 222(b) of
the Labor Code. The Union however contended that the
deductions not only have the popular indorsement and
approval of the general membership, but likewise
complied with the legal requirements of Article 241(n).
Med-Arbiter ruled in favor of the petitioners directing
the Company to remit the amount it had kept in trust
directly to the rank-and-file personnel.

On appeal to the Bureau of Labor Relations, however,

the respondent Director reversed the order of the MedArbiter upholding the claim of the Union that the special
assessment is authorized under Article 241 (n) and that
the Union has complied with the requirements therein.

Issue:

Whether or not the 10% special assessment deduction

by the respondent labor union was made in accordance
with the requirements provided by law.

Held:
No. We are convinced that the deduction of the 10%
special assessment by the Union was not made in
accordance with the requirements provided by law.

Xxx the failure of the Union to comply strictly with the

requirements set out by the law invalidates the
questioned special assessment. Substantial compliance
is not enough in view of the fact that the special
assessment will diminish the compensation of the union
members. Their express consent is required, and this
consent must be obtained in accordance with the steps
outlined by law, which must be followed to the letter. No
shortcuts are allowed.

The applicable provisions are clear. The Union itself

admits that both paragraphs (n) and (o) of Article 241
apply. Paragraph (n) refers to "levy" while paragraph (o)
refers to "check-off" of a special assessment. Both
provisions must be complied with. Under paragraph (n),
the Union must submit to the Company a written
resolution of a majority of all the members at a general
membership meeting duly called for the purpose. In
addition, the secretary of the organization must record
the minutes of the meeting which, in turn, must include,
among others, the list of all the members present as
well as the votes cast.

As earlier outlined by petitioners, the Union obviously

failed to comply with the requirements of paragraph (n).
It held local membership meetings on separate
occasions, on different dates and at various venues,
contrary to the express requirement that there must be
a general membership meeting. The contention of the
Union that "the local membership meetings are
precisely the very general meetings required by law" 10
is untenable because the law would not have specified a
general membership meeting had the legislative intent
been to allow local meetings in lieu of the latter.

It submitted only minutes of the local membership

meetings when what is required is a written resolution
adopted at the general meeting. Worse still, the minutes
of three of those local meetings held were recorded by a
union director and not by the union secretary. The
minutes submitted to the Company contained no list of
the members present and no record of the votes cast.
Since it is quite evident that the Union did not comply
with the law at every turn, the only conclusion that may
be made therefrom is that there was no valid levy of the
special assessment pursuant to paragraph (n) of Article
241 of the Labor Code.

Paragraph (o) on the other hand requires an individual

written authorization duly signed by every employee in
order that a special assessment may be validly checkedoff. Even assuming that the special assessment was
validly levied pursuant to paragraph (n), and granting
that individual written authorizations were obtained by
the Union, nevertheless there can be no valid check-off

considering that the majority of the union members had

already withdrawn their individual authorizations. A
withdrawal of individual authorizations is equivalent to
no authorization at all. Hence, the ruling in Galvadores
that "no check-offs from any amounts due employees
may be effected without an individual written
authorization signed by the employees ... " is applicable.

The
Union
points
out,
however,
that
said
disauthorizations are not valid for being collective in
form, as they are "mere bunches of randomly procured
signatures, under loose sheets of paper." 11 The
contention deserves no merit for the simple reason that
the documents containing the disauthorizations have
the signatures of the union members. The Court finds
these retractions to be valid. There is nothing in the law
which requires that the disauthorization must be in
individual form.

WHEREFORE, the instant petition is hereby GRANTED.

The Order of the Director of the Bureau of Labor
Relations is hereby REVERSED and SET ASIDE, while the
order of the Med-Arbiter is reinstated.

Gabriel v. Secretary of Labor

FACTS:
Petitioners Gabriel et. al are members of the Executive
Board of Solid Banks labor union, which is composed of
rank and file employees of Solid Bank Corporation. The
union hired the legal services of Atty. Lacsina as counsel
in connection with negotiations for a new Collective

Bargaining Agreement (CBA). In the CBA, it was agreed

that 10% of total ecosnomic benefits would be given to
Atty. Lacsina as attorneys fees. The Resolution
authorized Solid Bank to check-off attorneys fees from
the first lump sum payment of benefits to the
employees under the new CBA. A resolution was signed
by the majority of the union members during a general
membership meeting called for that purpose. Thus on
February 21, 1992, Solid Bank made payrol deductions
to pay for the attorneys fees. Private respondents (also
union members) filed a petition for illegal deduction
with DOLE. The Labor Arbiter directed the bank to return
or refund the private respondents. On appeal, the
Secretary of Labor rendered a resolution modifying the
order by limiting the return to union members who did
not agree or signified their conformity to the check-off.
On motion for reconsideration, the DOLE Secretary
ordered that the reimbursement should be charged to
the unions general fund.
Issue: whether or not DOLE acted with grave abuse of
discretion in issuing the order?
Held: No. First, Article 222 of the LC provides that no
member of the union should be individually charged for
paying attorneys fees. Instead, it may be charged
against union funds in an amount to be agreed upon by
the parties. In relation, Article 241 of the LC provides
that there must be individual authorization to use the
fund for such purpose from each member-employee:
without an individual written authorization duly signed
by the employee. The authorization should specifically
state the amount, purpose and beneficiary of the
deduction. To apply Article 241, the following requisites
must be met: 1) authorization by a written resolution of
the majority of all the members at the general
membership meeting called for the purpose; (2)
secretarys record of the minutes of the meeting; and

(3) individual written authorization for check off duly

signed by the employees concerned. Thus, DOLE did not
act with grave abuse of discretion in ruling that the
workers through their union should be made to shoulder
the expenses incurred for the services of a lawyer. And
accordingly the reimbursement should be charged to
the unions general fund or account. No deduction can
be made from the salaries of the concerned employees
other than those mandated by law.

G.R. No. 127374 January 31, 2002

PHILIPPINE SKYLANDERS, INC., MARILES C.
ROMULO and FRANCISCO DAKILA,petitioners, vs.
NATIONAL
LABOR
RELATIONS
COMMISSION,
LABOR ARBITER EMERSON TUMANON, PHILIPPINE
ASSOCIATION OF FREE LABOR UNIONS (PAFLU)
SEPTEMBER (now UNIFIED PAFLU) and SERAFIN
AYROSO,respondents
FACTS: November 1993 the Philippine Skylanders
Employees Association (PSEA), a local labor union
affiliated with the Philippine Association of Free Labor
Unions (PAFLU) September (PAFLU), won in the
certification election conducted among the rank and file
employees of Philippine Skylanders, Inc. (PSI). Its rival
union, Philippine Skylanders Employees AssociationWATU (PSEA-WATU) immediately protested the result of
the election before the Secretary of Labor.
settlement of the controversy, PSEA sent PAFLU a notice
of disaffiliation citing as reason PAFLUs supposed

deliberate
members.
resolution
members
disaffiliate

and habitual dereliction of duty toward its

Attached to the notice was a copy of the
adopted and signed by the officers and
of PSEA authorizing their local union to
from its mother federation.

PSEA subsequently affiliated itself with the National

Congress of Workers (NCW), changed its name to
Philippine Skylanders Employees Association -National
Congress of Workers (PSEA-NCW), and to maintain
continuity within the organization, allowed the former
officers of PSEA-PAFLU to continue occupying their
positions as elected officers in the newly-forged PSEANCW.
17 March 1994 PSEA-NCW entered into a collective
bargaining agreement with PSI which was immediately
registered with the Department of Labor and
Employment.
PAFLU requested for the accounting. PSI through its
personnel manager Francisco Dakila denied the request.
PAFLU through SerafinAyroso filed a complaint for unfair
labor practice against PSI, its president Mariles Romulo
and personnel manager Francisco Dakila. PAFLU alleged
that aside from PSIs refusal to bargain collectively with
its workers, the company through its president and
personnel manager, was also liable for interfering with
its employees union activities

Ayroso filed another complaint in behalf of PAFLU for

unfair labor practice against Francisco Dakila. Through
Ayroso PAFLU claimed that Dakila was present in PSEAs
organizational meeting thereby confirming his illicit
participation in union activities. Ayroso added that the
members of the local union had unwittingly fallen into
the manipulative machinations of PSI and were lured
into endorsing a collective bargaining agreement which
was detrimental to their interests.
PAFLU amended its complaint by including the elected
officers of PSEA-PAFLU as additional party respondents.
PAFLU averred that the local officers of PSEA-PAFLU,
namely
MacarioCabanias,
PepitoRodillas,
Sharon
Castillo, DaniloCarbonel, Manuel Eda, Rolando Felix,
Jocelyn Fronda, Ricardo Lumba, Joseph Mirasol,
NerisaMortel, TeofiloQuirong, Leonardo Reyes, Manuel
Cadiente, and HerminiaRiosa, were equally guilty of
unfair labor practice since they brazenly allowed
themselves to be manipulated and influenced by
petitioner Francisco Dakila.
Dakila moved for the dismissal of the complaint on the
ground that the issue of disaffiliation was an inter-union
conflict which lay beyond the jurisdiction of the Labor
Arbiter. PSEA was no longer affiliated with PAFLU, Ayroso
or PAFLU for that matter had no personality to file the
instant complaint.

Labor Arbiter declared PSEAs disaffiliation from PAFLU

invalid and held PSI, PSEA-PAFLU and their respective
officers guilty of unfair labor practice.
As PSEA-NCWs personality was not accorded
recognition, its collective bargaining agreement with PSI
was struck down for being invalid.
PSI, PSEA and their respective officers appealed to the
National Labor Relations Commission (NLRC). But the
NLRC upheld the Decision oftheLabor Arbiter.
RULING: right of local unions to separate from their
mother federation on the ground that as separate and
voluntary associations, local unions do not owe their
creation and existence to the national federation to
which they areaffiliated but, instead, to the will of their
members. The sole essence of affiliation is to increase,
by collective action, the common bargaining power of
local unions for the effective enhancement and
protection of their interests. Admittedly, there aretimes
when without succor and support local unions may find
it hard, unaided by other support groups, to secure
justice for themselves. Yet the local unions remain the
basic units of association, free to serve their own
interests subject to the restraints imposed by the
constitution and by-laws of the national federation, and
free also to renounce the affiliation upon the terms laid
down in the agreement which brought such affiliation
into existence.

nothing shown in the records nor is it claimed by PAFLU

that the local union was expressly forbidden to
disaffiliate from the federation nor were there any
conditions imposed for a valid breakaway. As such, the
pendency of an election protest involving both the
mother federation and the local union did not constitute
a bar to a valid disaffiliation. Neither was it disputed by
PAFLU that 111 signatories out of the 120 members of
the local union, or an equivalent of 92.5% of the total
union membership supported the claim of disaffiliation
and had in fact disauthorized PAFLU from instituting any
complaint in their behalf.

This

It was entirely reasonable then for PSI to enter into a

collective bargaining agreement with PSEA-NCW. As
PSEA had validly severed itself from PAFLU, there would
be no restrictions which could validly hinder it from
subsequently affiliating with NCW and entering into a
collective bargaining agreement in behalf of its
members.

of Free Workers resulting in the latters lack of

The mere act of disaffiliation did not divest PSEA of its

own personality; neither did it give PAFLU the license to
act independently of the local union.

The issue of disaffiliation is an intra-union dispute which

Cirtek

Employees

Electronics
GR 190515
Facts:

Labor

Union

vs

Cirtek

resolves

supplemental

the

motion

motion

for

for

reconsideration

reconsideration

filed

and
by

respondent, Cirtek Electronics, Inc., of the Courts

Decision dated November 15, 2010.
Respondent-movant maintains that the Secretary of
Labor cannot insist on a ruling beyond the compromise
agreement entered into by the parties; and that, as
early as February 5, 2010, petitioner Union had already
filed with the Department of Labor and Employment
(DOLE) a resolution of disaffiliation from the Federation
personality to represent the workers in the present case.
Issue: WON petitioner lost its personality to represent
the workers because of its disaffiliation from the
Federation of Free Workers.
Held:
must be resolved in a different forum in an action at the
instance of either or both the FFW and the Union or a
rival labor organization, not the employer.
Indeed, as respondent-movant itself argues, a local
union may disaffiliate at any time from its mother
federation, absent any showing that the same is

prohibited under its constitution or rule. Such, however,

does not result in it losing its legal personality
altogether. Verily, Anglo-KMU v. Samahan Ng Mga
Manggagawang Nagkakaisa Sa Manila Bay Spinning
Mills At J.P. Coats enlightens:
A local labor union is a separate and distinct unit
primarily designed to secure and maintain an equality of
bargaining power between the employer and their

NATIONAL
UNION
OF
WORKERS
IN
HOTELS,
RESTAURANTS AND ALLIED INDUSTRIES- MANILA
PAVILION HOTEL CHAPTER vs. SECRETARY OF LABOR
AND EMPLOYMENT, BUREAU OF LABOR RELATIONS,
HOLIDAY INN MANILA PAVILION HOTEL LABOR UNION
AND ACESITE PHILIPPINES HOTEL CORPORATION

FACTS: A certification election was conducted on June

16, 2006 among the rank-and-file employees of
respondent Holiday Inn Manila Pavilion Hotel (the Hotel)
with the following results:

employee-members. A local union does not owe its

existence to the federation with which it is affiliated. It is

EMPLOYEES IN VOTERS LIST =

a separate and distinct voluntary association owing its

TOTAL VOTES CAST =

346

NUWHRAIN-MPHC =

151

creation to the will of its members. The mere act of

affiliation does not divest the local union of its own
personality, neither does it give the mother federation
the license to act independently of the local union. It

353

HIMPHLU = 169
NO UNION =

only gives rise to a contract of agency where the former

SPOILED = 3

acts in representation of the latter. (emphasis and

SEGREGATED =

underscoring supplied)

In view of the significant number of segregated votes,

contending unions, petitioner, NUHWHRAIN-MPHC, and
respondent Holiday Inn Manila Pavillion Hotel Labor
Union (HIMPHLU), referred the case back to Med-Arbiter
to decide which among those votes would be opened
and tallied. 11 votes were initially segregated because
they were cast by dismissed employees, albeit the
legality of their dismissal was still pending before the
Court of Appeals. Six other votes were segregated
because the employees who cast them were already
occupying supervisory positions at the time of the

MR denied.

CERTIFICATION ELECTION

22

election. Still five other votes were segregated on the

ground that they were cast by probationary employees
and, pursuant to the existing Collective Bargaining
Agreement (CBA), such employees cannot vote. It bears
noting early on, however, that the vote of one Jose
Gatbonton (Gatbonton), a probationary employee, was
counted.

ISSUES: (1) whether employees on probationary status

at the time of the certification elections should be
allowed to vote (2) whether HIMPHLU was able to obtain
the required majority for it to be certified as the
exclusive bargaining agent.

HELD:
Med-Arbiter Calabocal ruled for the opening of 17 out of
the 22 segregated votes, specially those cast by the 11
dismissed employees and those cast by the six
supposedly supervisory employees of the Hotel.

Petitioner, which garnered 151 votes, appealed to the

Secretary of Labor and Employment (SOLE), arguing
that the votes of the probationary employees should
have been opened considering that probationary
employee Gatbontons vote was tallied. And petitioner
averred that respondent HIMPHLU, which garnered 169
votes, should not be immediately certified as the
bargaining agent, as the opening of the 17 segregated
ballots would push the number of valid votes cast to
338 (151 + 169 + 1 + 17), hence, the 169 votes which
HIMPHLU garnered would be one vote short of the
majority which would then become 169.

Secretary affirmed the decision of the med-arbiter. In

fine, the SOLE concluded that the certification of
HIMPHLU as the exclusive bargaining agent was proper.

I. On the first issue, the Court rules in the affirmative.

The inclusion of Gatbontons vote was proper not

because it was not questioned but because probationary
employees have the right to vote in a certification
election. The votes of the six other probationary
employees should thus also have been counted. As
Airtime Specialists, Inc. v. Ferrer-Calleja holds:

In a certification election, all rank and file employees in

the appropriate bargaining unit, whether probationary
or permanent are entitled to vote. This principle is
clearly stated in Art. 255 of the Labor Code which states
that the labor organization designated or selected by
the majority of the employees in an appropriate
bargaining unit shall be the exclusive representative of
the employees in such unit for purposes of collective
bargaining. Collective bargaining covers all aspects of
the employment relation and the resultant CBA
negotiated by the certified union binds all employees in
the bargaining unit. Hence, all rank and file employees,
probationary or permanent, have a substantial interest
in the selection of the bargaining representative. The

Code makes no distinction as to their employment

status as basis for eligibility in supporting the petition
for certification election. The law refers to all the
employees in the bargaining unit. All they need to be
eligible to support the petition is to belong to the
bargaining unit. (Emphasis supplied)

For purposes of this section (Rule II, Sec. 2 of

Department Order No. 40-03, series of 2003), any
employee, whether employed for a definite period or
not, shall beginning on the first day of his/her service,
be eligible for membership in any labor organization.

All other workers, including ambulant, intermittent and

other workers, the self-employed, rural workers and
those without any definite employers may form labor
organizations for their mutual aid and protection and
other legitimate purposes except collective bargaining.
(Emphasis supplied)

The provision in the CBA disqualifying probationary

employees
from
voting
cannot
override
the
Constitutionally-protected right of workers to selforganization, as well as the provisions of the Labor Code
and its Implementing Rules on certification elections
and jurisprudence thereon.

A law is read into, and forms part of, a contract.

Provisions in a contract are valid only if they are not
contrary to law, morals, good customs, public order or
public policy.

II. As to whether HIMPHLU should be certified as the

exclusive bargaining agent, the Court rules in the
negative.

It is well-settled that under the so-called double

majority rule, for there to be a valid certification
election, majority of the bargaining unit must have
voted AND the winning union must have garnered
majority of the valid votes cast.

Prescinding from the Courts ruling that all the

probationary employees votes should be deemed valid
votes while that of the supervisory employees should be
excluded, it follows that the number of valid votes cast
would increase from 321 to 337. Under Art. 256 of the
Labor Code, the union obtaining the majority of the
valid votes cast by the eligible voters shall be certified
as the sole and exclusive bargaining agent of all the
workers in the appropriate bargaining unit. This majority
is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least
170.

HIMPHLU obtained 169 while petitioner received 151

votes. Clearly, HIMPHLU was not able to obtain a
majority vote. The position of both the SOLE and the
appellate court that the opening of the 17 segregated
ballots will not materially affect the outcome of the
certification election as for, so they contend, even if
such member were all in favor of petitioner, still,
HIMPHLU would win, is thus untenable.

It bears reiteration that the true importance of

ascertaining the number of valid votes cast is for it to
serve as basis for computing the required majority, and
not just to determine which union won the elections.
The opening of the segregated but valid votes has thus
become material.

To be sure, the conduct of a certification election has a

two-fold objective: to determine the appropriate
bargaining unit and to ascertain the majority
representation of the bargaining representative, if the
employees desire to be represented at all by anyone. It
is not simply the determination of who between two or
more contending unions won, but whether it effectively
ascertains the will of the members of the bargaining
unit as to whether they want to be represented and
which union they want to represent them.

Having declared that no choice in the certification

election conducted obtained the required majority, it
follows that a run-off election must be held to determine
which between HIMPHLU and petitioner should
represent the rank-and-file employees.

PETITION GRANTED.

G. 3.2.1 CHALLENGING THE PETITION FOR CE

[G.R. No. 121084. February 19, 1997]

TOYOTA MOTOR PHILIPPINES CORPORATION, petitioner,

vs. TOYOTA MOTOR PHILIPPINES CORPORATION LABOR
UNION AND THE SECRETARY OF LABOR AND
EMPLOYMENT, respondents.
FACTS:
Toyota Motor Philippines Corporation Labor Union
(TMPCLU) filed a petition for certification election with
the Department of Labor, National Capital Region, for all
rank-and-file
employees
of
the
Toyota
Motor
Corporation.
In response, petitioner filed a Position Paper seeking the
denial of the issuance of an Order directing the holding
of a certification election on two grounds: first, that the
respondent union, being "in the process of registration"
had no legal personality to file the same as it was not a
legitimate labor organization as of the date of the filing
of the petition; and second, that the union was
composed of both rank-and-file and supervisory
employees in violation of law.
The Med-Arbiterdismissed respondent union's petition
for certification election for lack of merit. In his Order,
the Med-Arbiter found that the labor organization's
membership was composed of supervisory and rankand-file employees in violation of Article 245 of the
Labor Code,and that at the time of the filing of its
petition, respondent union had not even acquired legal
personality yet.
On appeal, the Office of the Secretary of Laborset aside
the Med-Arbiter's Order and directed the holding of a
certification election among the regular rank-and-file
employees of Toyota Motor Corporation.
ISSUE:
W/N the petition for certification election is valid.

HELD:
NO. The purpose of every certification election is to
determine the exclusive representative of employees in
an appropriate bargaining unit for the purpose of
collective bargaining. A certification election for the
collective bargaining process is one of the fairest and
most effective ways of determining which labor
organization can truly represent the working force. In
determining the labor organization which represents the
interests of the workforce, those interests must be, as
far as reasonably possible, homogeneous, so as to
genuinely reach the concerns of the individual members
of a labor organization.
The Labor Code has made it a clear statutory policy to
prevent supervisory employees from joining labor
organizations consisting of rank-and-file employees as
the concerns which involve members of either group are
normally disparate and contradictory. Article 245
provides:
ART. 245 Ineligibility of managerial employees to join
any labor organization; right of supervisory employees.
-- Managerial Employees are not eligible to join, assist or
form any labor organization. Supervisory employees
shall not be eligible for membership in a labor
organization of the rank-and-file employees but may
join, assist or form separate labor organizations of their
own.
Clearly, based on this provision, a labor
organization composed of both rank-and-file and
supervisory employees is no labor organization at
all. It cannot, for any guise or purpose, be a
legitimate labor organization. Not being one, an
organization which carries a mixture of rank-andfile and supervisory employees cannot possess

any of the rights of a legitimate labor

organization, including the right to file a petition
for certification election for the purpose of
collective bargaining. It becomes necessary,
therefore, anterior to the granting of an order
allowing a certification election, to inquire into
the composition of any labor organization
whenever the status of the labor organization is
challenged on the basis of Article 245 of the
Labor Code.
While there may be a genuine divergence of opinion as
to whether or not union members occupying Level 4
positions are supervisory employees, it is fairly obvious,
from a reading of the Labor Code's definition of the term
that
those
occupying
Level
5
positions
are
unquestionably supervisory employees. Under the job
description for level five employees, such personnel all
engineers having a number of personnel under them,
not only oversee production of new models but also
determine manpower requirements, thereby influencing
important hiring decisions at the highest levels. This
determination is neither routine nor clerical but involves
the independent assessment of factors affecting
production, which in turn affect decisions to hire or
transfer workers. The use of independent judgment in
making the decision to hire, fire or transfer in the
identification of manpower requirements would be
greatly impaired if the employee's loyalties are torn
between the interests of the union and the interests of
management. A supervisory employee occupying a level
five position would therefore find it difficult to
objectively identify the exact manpower requirements
dictated by production demands.
The foregoing discussion, therefore, renders entirely
irrelevant, the technical issue raised as to whether or
not respondent union was in possession of the status of

a legitimate labor organization at the time of filing,

when, as petitioner vigorously claims, the former was
still at the stage of processing of its application for
recognition as a legitimate labor organization. The
union's composition being in violation of the Labor
Code's prohibition of unions composed of supervisory
and rank-and-file employees, it could not possess the
requisite personality to file for recognition as a
legitimate labor organization. In any case, the factual
issue, albeit ignored by the public respondent's assailed
Resolution, was adequately threshed out in the MedArbiters Order.
The holding of a certification election is based on clear
statutory policy which cannot be circumvented. Its rules,
strictly construed by this Court, are designed to
eliminate fraud and manipulation. Workers of an
appropriate bargaining unit must be allowed to freely
express their choice in an election where everything is
open to sound judgment and the possibility for fraud
and misrepresentation is absent.
FVC LaborUnion-PTGWO vs SANAMA-FVC-SIGLO
G.R. No. 176249, November 27, 2009
Facts:
On December 22, 1997, the petitioner FVCLU-PTGWO
the recognized bargaining agent of the rank-and-file
employees of the FVC Philippines, Incorporated signed
a five-year collective bargaining agreement with the
company.
The five-year CBA period was from February 1, 1998 to
January 30, 2003. At the end of the 3rd year of the fiveyear term and pursuant to the CBA, FVCLU-PTGWO and
the company entered into the renegotiation of the CBA

and modified, among other provisions, the CBAs

duration. Article XXV, Section 2 of the renegotiated CBA
provides that this re-negotiation agreement shall take
effect beginning February 1, 2001 and until May 31,
2003 thus extending the original five-year period of the
CBA by four (4) months.
On January 21, 2003, nine (9) days before the January
30, 2003 expiration of the originally-agreed five-year
CBA term (and four [4] months and nine [9] days away
from the expiration of the amended CBA period), the
respondent Sama-SamangNagkakaisangManggagawasa
FVC-Solidarity of Independent and General Labor
Organizations
(SANAMA-SIGLO)
filed
before
the
Department of Labor and Employment (DOLE) a petition
for certification election for the same rank-and-file unit
covered by the FVCLU-PTGWO CBA.
FVCLU-PTGWO moved to dismiss the petition on the
ground that the certification election petition was filed
outside the freedom period or outside of the sixty (60)
days before the expiration of the CBA on May 31, 2003.
Case was dismissed but reversed upon appeal of from
DOLE secretary. Reversed again upon MR.
SANAMA-SIGLO sought relief from the CA through a
petition for certiorari under Rule 65 of the Rules of Court
based on the grave abuse of discretion the Labor
Secretary committed when she reversed her earlier
decision calling for a certification election. SANAMASIGLO pointed out that the Secretarys new ruling is
patently contrary to the express provision of the law and
established
jurisprudence.
CA ruled in favour of respondent. MR denied.

Hence, this petition.

Issue:W/N parties may negotiate and agree to extend
term of exclusive bargaining status.
Ruling:
Yes. the parties may agree to extend the CBAs original
five-year term together with all other CBA provisions,
any such amendment or term in excess of five years will
not carry with it a change in the unions exclusive
collective bargaining status. By express provision of
Article 253-A, the exclusive bargaining status cannot go
beyond five years and the representation status is a
legal matter not for the workplace parties to agree
upon. In other words, despite an agreement for a CBA
with a life of more than five years, either as an original
provision or by amendment, the bargaining unions
exclusive bargaining status is effective only for five
years and can be challenged within sixty (60) days prior
to the expiration of the CBAs first five years.
In the present case, the CBA was originally signed for a
period of five years, i.e., from February 1, 1998 to
January 30, 2003, with a provision for the renegotiation
of the CBAs other provisions at the end of the 3rd year
of the five-year CBA term. Thus, prior to January 30,
2001 the workplace parties sat down for renegotiation
but instead of confining themselves to the economic
and non-economic CBA provisions, also extended the

life of the CBA for another four months, i.e., from the
original expiry date on January 30, 2003 to May 30,
2003.
This negotiated extension of the CBA term has no legal
effect on the FVCLU-PTGWOs exclusive bargaining
representation status which remained effective only for
five years ending on the original expiry date of January
30, 2003. Thus, sixty days prior to this date, or starting
December 2, 2002, SANAMA-SIGLO could properly file a
petition for certification election. Its petition, filed on
January 21, 2003 or nine (9) days before the expiration
of the CBA and of FVCLU-PTGWOs exclusive bargaining
status, was seasonably filed.