G.R. No.
196276 June 4, 2014 TAKATA (SALAMAT) is hereby delisted from the roll of legitimate
TAKATA (PHILIPPINES) CORPORATION, Petitioner,
vs.
BUREAU OF LABOR RELATIONS and SAMAHANG LAKAS
MANGGAGAWA NG TAKATA (SALAMAT),Respondents.
DECISION
PERALTA, J.:
Before us is a petition for review on certiorari filed by petitioner
TAKATA Philippines Corporation assailing the Decision1 dated
December 22, 2010 and the Resolution2 dated March 28, 2011 of
the Court of Appeals in CA-G.R. SP No. 112406.
On July 7, 2009, petitioner filed with the Department of Labor and
Employment (DOLE) Regional Office a Petition3for Cancellation of
the Certificate of Union Registration of Respondent Samahang
Lakas Manggagawa ng Takata (SALAMA1) on the ground that
the latter is guilty of misrepresentation, false statement and fraud
with respect to the number of those who participated in the
organizational meeting, the adoption and ratification of its
Constitution and By-Laws, and in the election of its officers. It
contended that in the May 1, 2009 organizational meeting of
respondent, only 68 attendees signed the attendance sheet, and
which number comprised only 17% of the total number of the 396
regular rank- and-file employees which respondent sought to
represent, and hence, respondent failed to comply with the 20%
minimum membership requirement. Petitioner insisted that the
document "Pangalan ng mga Kasapi ng Unyon" bore no
signatures of the alleged 119 union members; and that
employees were not given sufficient information on the
documents they signed; that the document "Sama-Samang
Pahayag ng Pagsapi" was not submitted at the time of the filing of
respondent's application for union registration; that the 119 union
members were actually only 117; and, that the total number of
petitioner's employees as of May 1, 2009 was 470, and not 396
as respondent claimed.4
Respondent denied the charge and claimed that the 119 union
members were more than the 20% requirement for union
registration. The document "Sama-Samang Pahayag ng Pagsapi
sa Unyon" which it presented in its petition for certification
election5 supported their claim of 119 members. Respondent also
contended that petitioner was estopped from assailing its legal
personality as it agreed to a certification election and actively
participated in the pre-election conference of the certification
election proceedings.6 Respondent argued that the union
members were informed of the contents of the documents they
signed and that the 68 attendees to the organizational meeting
constituted more than 50% of the total union membership, hence,
a quo rumexisted for the conduct of the said meeting. 7
On August 27, 2009, DOLE Regional Director, Atty. Ricardo S.
Martinez, Sr., issued a Decision8 granting the petition for
cancellation of respondent's certificate of registration, the
dispositive portion of which reads:
WHEREFORE, from the foregoing considerations, the petition is
hereby GRANTED. Accordingly, the respondent Union Certificate
of Registration No. RO400A-2009-05-01-UR-LAG, dated May 19,
2009 is hereby REVOCKED (sic) and /or CANCELLED pursuant
to paragraph (a) & (b), Section 3, Rule XIV of Department Order
No. 40-03 and the Samahang Lakas ng Manggagawa ng
labor organization of this office.9
In revoking respondent's certificate of registration, the Regional
Director found that the 68 employees who attended the
organizational meeting was obviously less than 20% of the total
number of 396 regular rank-and-file employees which respondent
sought to represent, hence, short of the union registration
requirement; that the attendance sheet which contained the
signatures and names of the union members totalling to 68
contradicted the list of names stated in the document
denominated as "Pangalan ng mga Kasaping Unyon." The
document "Sama-Samang Pahayag ng Pagsapi" was not
attached to the application for registration as it was only submitted
in the petition for certification election filed by respondent at a
later date. The Regional Director also found that the proceedings
in the cancellation of registration and certification elections are
two different and entirely separate and independent proceedings
which were not dependent on each other.
Dissatisfied, respondent, through Bukluran ng Manggagawang
Pilipino (BMP) Paralegal Officer, Domingo P. Mole, filed a Notice
and Memorandum of Appeal10 with the Bureau of Labor Relations
(BLR). However, on September 28,2009, respondent, through its
counsels, Attys.
Napoleon C. Banzuela, Jr. and Jehn Louie W. Velandrez, filed an
Appeal Memorandum with Formal Entry of Appearance11 to the
Office of the DOLE Secretary, which the latter eventually referred
to the BLR. Petitioner filed an Opposition to the Appeals 12 praying
for their dismissal on the ground of forum shopping as respondent
filed two separate appeals in two separate venues; and for failing
to avail of the correct remedy within the period; and that the
certificate of registration was tainted with fraud, misrepresentation
and falsification.
In its Answer,13 respondent claimed that there was no forum
shopping as BMP's Paralegal Officer was no longer authorized to
file an appeal on behalf of respondent as the latter's link with BMP
was already terminated and only the Union President was
authorized to file the appeal; and that it complied with Department
Order No. 40-03.
On December 9, 2009, after considering respondent's Appeal
Memorandum with Formal Entry of Appearance and petitioner's
Answer, the BLR rendered its Decision14 reversing the Order of
the Regional Director, the decretal portion of which reads:
WHEREFORE, the appeal is hereby GRANTED. The Decision of
Regional Director Ricardo S. Martinez, Sr., dated 27 August 2009,
is hereby REVERSEDand SET ASIDE.
Accordingly, Samahang Lakas Manggagawa ng TAKATA
(SALAMAT) shall remain in the roster of labor organizations.15
In reversing, the BLR found that petitioner failed to prove that
respondent deliberately and maliciously misrepresented the
number of rank-and-file employees. It pointed out petitioner's
basis for the alleged noncompliance with the minimum
membership requirement for registration was the attendance of 68
members to the May 1, 2009 organizational meeting supposedly
comprising only 17% of the total 396 regular rank-and-file
employees. However, the BLR found that the list of employees
who participated in the organizational meeting was a separate
and distinct requirement from the list of the names of members
comprising at least 20% of the employees in the bargaining unit;
and that there was no requirement for signatures opposite the
names of the union members; and there was no evidence
showing that the employees assailed their inclusion in the list of
union members.
Petitioner filed a motion for reconsideration, which was denied by
the BLR in a Resolution16 dated January 8, 2010.
Undaunted, petitioner went to the CA via a petition for certiorari
under Rule 65.
After the submission of the parties' respective pleadings, the case
was submitted for decision.
On December 22, 2010, the CA rendered its assailed decision
which denied the petition and affirmed the decision of the BLR.
Petitioner's motion for reconsideration was denied in a Resolution
dated March 29, 2011.
Hence this petition for review filed by petitioner raising the
following issues, to wit:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
AND SERIOUS ERROR IN AFFIRMING THE DECISION OF
PUBLIC RESPONDENT BLR AND NOT FINDING ANY
VIOLATION BY SAMAHANG LAKAS MANGGAGAWA SA
TAKATA (SALAMAT) OF THE RULE ON FORUM SHOPPING IN
THE FILING OF TWO VERIFIED APPEALS FOR AND ITS
BEHALF. BOTH OF THE APPEALS SHOULD HAVE BEEN
DISMISSED OUTRIGHT BY PUBLIC RESPONDENT BLR, ON
GROUND OF FORUM SHOPPING.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
IN FINDING THAT THE APPLICATION FOR REGISTRATION
OF SAMAHANG LAKAS MANGGAGAWA SA TAKATA
(SALAMAT) WAS COMPLIANT WITH THE LAW. CONSIDERING
THE CIRCUMSTANCES OBTAINING IN THE REGISTRATION
OF SALAMAT, IT IS CLEAR THAT THE SAME IS TAINTED
WITH FRAUD, MISREPRESENTATION AND FALSIFICATION.
SALAMAT DID NOT POSSESS THE REQUIREDNUMBER OF
MEMBERS AT THE TIME OF FILING OF ITS APPLICATION
FOR REGISTRATION, HENCE, IT SHOULD BE HELD GUILTY
OF MISREPRESENTATION, AND FALSE STATEMENTS AND
FRAUD IN CONNECTION THEREWITH.17
Anent the first issue, petitioner contends that respondent had filed
two separate appeals with two different representations at two
different venues, in violation of the rule on multiplicity of suits and
forum shopping, and instead of dismissing both appeals, the
appeal erroneously filed before the Labor Secretary was the one
held validly filed, entertained and even granted; that it is not within
the discretion of BLR to choose which between the two appeals
should be entertained, as it is the fact of the filing of the two
appeals that is being prohibited and not who among the
representatives therein possessed the authority.
We are not persuaded.
We find no error committed by the CA in finding that respondent
committed no forum shopping. As the CA correctly concluded, to
wit:
It is undisputed that BMP Paralegal Officer Domingo P. Mole was
no longer authorized to file an appeal on behalf of union
SALAMAT and that BMP was duly informed that its services was
already terminated. SALAMAT even submitted before the BLR its
"Resolusyon Blg. 01-2009" terminating the services of BMP and
revoking the representation of Mr. Domingo Mole in any of the
pending cases being handled by him on behalf of the union. So,
considering that BMP Paralegal Officer Domingo P. Mole was no
longer authorized to file an appeal when it filed the Notice and
Memorandum of Appeal to DOLE Regional Office No. IV-A, the
same can no longer be treated as an appeal filed by union
SALAMAT. Hence, there is no forum shopping to speak of in this
case as only the Appeal Memorandum with Formal Entry of
Appearance filed by Atty. Napoleon C. Banzuela, Jr. and Atty.
Jehn Louie W. Velandrez is sanctioned by SALAMAT.18
Since Mole's appeal filed with the BLR was not specifically
authorized by respondent, such appeal is considered to have not
been filed at all. It has been held that "if a complaint is filed for
and in behalf of the plaintiff who is not authorized to do so, the
complaint is not deemed filed.
An unauthorized complaint does not produce any legal effect."19
Respondent through its authorized representative filed its Appeal
Memorandum with Formal Entry of Appearance before the Labor
Secretary, and not with the BLR. As the appeal emanated from
the petition for cancellation of certificate of registration filed with
the Regional Office, the decision canceling the registration is
appealable to the BLR, and not with the Labor Secretary.
However, since the Labor Secretary motu propio referred the
appeal with the BLR, the latter can now act on it. Considering that
Mole's appeal with the BLR was not deemed filed, respondents
appeal, through Banzuela and Associates, which the Labor
Secretary referred to the BLR was the only existing appeal with
the BLR for resolution. There is, therefore, no merit to petitioner's
claim that BLR chose the appeal of Banzuela and Associates over
Mole's appeal.
The case of Abbott Laboratories Philippines, Inc. v. Abbott
Laboratories Employees Union20 cited by petitioner is not at all
applicable in this case as the issue therein is the authority of the
Labor Secretary to review the decision of the Bureau of Labor
Relations rendered in the exercise of its appellate jurisdiction over
decision of the Regional Director in cases involving cancellations
of certificate of registration of labor unions. We found no grave
abuse of discretion committed by the Secretary of Labor in not
acting on therein petitioner's appeal. The decision of the Bureau
of Labor Relations on cases brought before it on appeal from the
Regional Director are final and executory. Hence, the remedy of
the aggrieved party is to seasonably avail of the special civil
action of certiorari under Rule 65 and the Rules of Court. In this
case, after the Labor Secretary motu propio referred respondent's
appeal filed with it to the BLR which rendered its decision
reversing the Regional Director, petitioner went directly to the CA
via a petition for certiorari under Rule 65.
As to the second issue, petitioner seeks the cancellation of
respondent's registration on grounds offraud and
misrepresentation bearing on the minimum requirement of the law
as to its membership, considering the big disparity in numbers,
between the organizational meeting and the list of members, and
so misleading the BLR that it obtained the minimum required
number of employees for purposes of organization and
registration.
We find no merit in the arguments.
Art. 234 of the Labor Code provides:
ART. 234. Requirements of Registration. - A federation, national
union or industry or trade union center or an independent union
shall acquire legal personality and shall be entitled to the rights
and privileges granted by law to legitimate labor organizations
upon issuance of the certificate of registration based on the
following requirements:
(a) Fifty pesos (50.00)registration fee;
(b) The names of its officers, their addresses, the
principal address of the labor organization, the minutes
of the organizational meetings and the list of the
workers who participated in such meetings;
(c) In case the applicant is an independent union, the
names of all its members comprising at least twenty
percent (20%) of all the employees in the bargaining
unit where it seeks to operate;
(d) If the applicant union has been in existence for one
or more years, copies of its annual financial reports;
and
(e) Four copies of the constitution and by-laws of the
applicant union, minutes of its adoption or ratification,
and the list of the members who participated in it."
And after the issuance of the certificate of registration, the labor
organization's registration could be assailed directly through
cancellation of registration proceedings in accordance with
Articles 238 and 239 of the Labor Code. And the cancellation of
union certificate of registration and the grounds thereof are as
follows:
ART. 238. Cancellation of Registration. - The certificate of
registration of any legitimate labor organization, whether national
or local, may be cancelled by the Bureau, after due hearing, only
on the grounds specified in Article 239 hereof.
ART. 239. Grounds for Cancellation of Union Registration. - The
following may constitute grounds for cancellation of union
registration:
(a) Misrepresentation, false statement or fraud in
connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the
minutes of ratification, and the list of members who took
part in the ratification;
(b) Misrepresentation, false statements or fraud in
connection with the election of officers, minutes of the
election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
Petitioner's charge that respondent committed misrepresentation
and fraud in securing its certificate of registration is a serious
charge and must be carefully evaluated. Allegations thereof
should be compounded with supporting circumstances and
evidence.21 We find no evidence on record to support petitioner's
accusation.
Petitioner's allegation of misrepresentation and fraud is based on
its claim that during the organizational meeting on May 1, 2009,
only 68 employees attended, while respondent claimed that it has
119 members as shown in the document denominated as
"Pangalan ng mga Kasapi ng Unyon;" hence, respondent
misrepresented on the 20% requirement of the law as to its
membership.
We do not agree.
It does not appear in Article 234 (b) of the Labor Code that the
attendees in the organizational meeting must comprise 20% of
the employees in the bargaining unit. In fact, even the
Implementing Rules and Regulations of the Labor Code does not
so provide. It is only under Article 234 (c) that requires the names
of all its members comprising at least twenty percent (20%) of all
the employees in the bargaining unit where it seeks to operate.
Clearly, the 20% minimum requirement pertains to the employees
membership in the union and not to the list of workers who
participated in the organizational meeting. Indeed, Article 234 (b)
and (c) provide for separate requirements, which must be
submitted for the union's registration, and which respondent did
submit. Here, the total number of employees in the bargaining unit
was 396, and 20% of which was about 79. Respondent submitted
a document entitled "Pangalan ng Mga Kasapi ng Unyon"
showing the names of 119 employees as union members, thus
respondent sufficiently complied even beyond the 20% minimum
membership requirement. Respondent also submitted the
attendance sheet of the organizational meeting which contained
the names and signatures of the 68 union members who attended
the meeting. Considering that there are 119 union members
which are more than 20% of all the employees of the bargaining
unit, and since the law does not provide for the required number
of members to attend the organizational meeting, the 68
attendees which comprised at least the majority of the 119 union
members would already constitute a quorum for the meeting to
proceed and to validly ratify the Constitution and By-laws of the
union. There is, therefore, no basis for petitioner to contend that
grounds exist for the cancellation of respondent's union
registration. For fraud and misrepresentation to be grounds for
cancellation of union registration under Article 239 of the Labor
Code, the nature of the fraud and misrepresentation must be
grave and compelling enough to vitiate the consent of a majority
of union members.22
Petitioner's claim that the alleged union members signed
documents without adequate information is not persuasive. The
one who alleges a fact has the burden of proving it and a mere
allegation is not evidence.23 In fact, we note that not one of those
listed in the document denominated as "Pangalan ng Mga
Kasaping Unyon" had come forward to deny their membership
with respondent. Notably, it had not been rebutted that the same
union members had signed the document entitled "Sama-Samang
Pahayag ng Pagsapi," thus, strengtheningtheir desire to be
members of the respondent union.
Petitioner claims that in the list of members, there was an
employee whose name appeared twice and another employee
who was merely a project employee. Such could not be
considered a misrepresentation in the absence of showing that
respondent deliberately did so for the purpose of increasing their
union membership. In fact, even if those two names were not
included in the list of union members, there would still be 117
members which was still more than 20% of the 396 rank-and-file
employees.
As to petitioner's argument that the total number of its employees
as of May 1, 2009 was 470, and not396 as respondent claimed,
still the 117 union members comprised more than the 20%
membership requirement for respondent's registration.
In Mariwasa Siam Ceramics v. Secretary of the Department of
Labor and Employment,24 we said:
For the purpose of de-certifying a union such as respondent, it
must be shown that there was misrepresentation, false statement
or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of
ratification; or, in connection with the election of officers, the
minutes of the election of officers, the list of voters, or failure to
submit these documents together with the list of the newly
elected-appointed officers and their postal addresses to the BLR.
The bare fact that two signatures appeared twice on the list of
those who participated in the organizational meeting would not, to
our mind, provide a valid reason to cancel respondents certificate
of registration. The cancellation of a unions registration doubtless
has an impairing dimension on the right of labor to self-
organization. For fraud and misrepresentation to be grounds for
cancellation of union registration under the Labor Code, the
nature of the fraud and misrepresentation must be grave and
compelling enough to vitiate the consent of a majority of union
members.1wphi1
In this case, we agree with the BLR and the CA that respondent
could not have possibly committed misrepresentation, fraud, or
false statements. The alleged failure of respondent to indicate
with mathematical precision the total number of employees in the
bargaining unit is of no moment, especially as it was able to
comply with the 20% minimum membership requirement. Even if
the total number of rank-and-file employees of petitioner is 528,
while respondent declared that it should only be 455, it still cannot
be denied that the latter would have more than complied with the
registration requirement.25
WHEREFORE, premises considered, the petition for review is
DENIED. The Decision dated December 22, 2010 and the
Resolution dated March 28, 2011 of the Court of Appeals, in CA-
G.R. SP No. 112406, are AFFIRMED.
SO ORDERED
G.R. No. 178296 January 12, 2011
THE HERITAGE HOTEL MANILA, acting through its owner,
GRAND PLAZA HOTEL CORPORATION,Petitioner,
vs.
NATIONAL UNION OF WORKERS IN THE HOTEL,
RESTAURANT AND ALLIED INDUSTRIES-HERITAGE HOTEL
MANILA SUPERVISORS CHAPTER (NUWHRAIN-
HHMSC), Respondent.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari of the
Decision1 of the Court of Appeals (CA) dated May 30, 2005 and
Resolution dated June 4, 2007. The assailed Decision affirmed
the dismissal of a petition for cancellation of union registration
filed by petitioner, Grand Plaza Hotel Corporation, owner of
Heritage Hotel Manila, against respondent, National Union of
Workers in the Hotel, Restaurant and Allied Industries-Heritage
Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC), a labor
organization of the supervisory employees of Heritage Hotel
Manila.
The case stemmed from the following antecedents:
On October 11, 1995, respondent filed with the Department of
Labor and Employment-National Capital Region (DOLE-NCR) a
petition for certification election.2 The Med-Arbiter granted the
petition on February 14, 1996 and ordered the holding of a
certification election.3 On appeal, the DOLE Secretary, in a
Resolution dated August 15, 1996, affirmed the Med-Arbiters
order and remanded the case to the Med-Arbiter for the holding of
a preelection conference on February 26, 1997. Petitioner filed a
motion for reconsideration, but it was denied on September 23,
1996.
The preelection conference was not held as initially scheduled; it
was held a year later, or on February 20, 1998. Petitioner moved
to archive or to dismiss the petition due to alleged repeated non-
appearance of respondent. The latter agreed to suspend
proceedings until further notice. The preelection conference
resumed on January 29, 2000.
Subsequently, petitioner discovered that respondent had failed to
submit to the Bureau of Labor Relations (BLR) its annual financial
report for several years and the list of its members since it filed its
registration papers in 1995. Consequently, on May 19, 2000,
petitioner filed a Petition for Cancellation of Registration of
respondent, on the ground of the non-submission of the said
documents. Petitioner prayed that respondents Certificate of
Creation of Local/Chapter be cancelled and its name be deleted
from the list of legitimate labor organizations. It further requested
the suspension of the certification election proceedings.4
On June 1, 2000, petitioner reiterated its request by filing a Motion
to Dismiss or Suspend the [Certification Election]
Proceedings,5 arguing that the dismissal or suspension of the
proceedings is warranted, considering that the legitimacy of
respondent is seriously being challenged in the petition for
cancellation of registration. Petitioner maintained that the
resolution of the issue of whether respondent is a legitimate labor
organization is crucial to the issue of whether it may exercise
rights of a legitimate labor organization, which include the right to
be certified as the bargaining agent of the covered employees.
Nevertheless, the certification election pushed through on June
23, 2000. Respondent emerged as the winner.6
On June 28, 2000, petitioner filed a Protest with Motion to Defer
Certification of Election Results and Winner,7stating that the
certification election held on June 23, 2000 was an exercise in
futility because, once respondents registration is cancelled, it
would no longer be entitled to be certified as the exclusive
bargaining agent of the supervisory employees. Petitioner also
claimed that some of respondents members were not qualified to
join the union because they were either confidential employees or
managerial employees. It then prayed that the certification of the
election results and winner be deferred until the petition for
cancellation shall have been resolved, and that respondents
members who held confidential or managerial positions be
excluded from the supervisors bargaining unit.
Meanwhile, respondent filed its Answer8 to the petition for the
cancellation of its registration. It averred that the petition was filed
primarily to delay the conduct of the certification election, the
respondents certification as the exclusive bargaining
representative of the supervisory employees, and the
commencement of bargaining negotiations. Respondent prayed
for the dismissal of the petition for the following reasons: (a)
petitioner is estopped from questioning respondents status as a
legitimate labor organization as it had already recognized
respondent as such during the preelection conferences; (b)
petitioner is not the party-in-interest, as the union members are
the ones who would be disadvantaged by the non-submission of
financial reports; (c) it has already complied with the reportorial
requirements, having submitted its financial statements for 1996,
1997, 1998, and 1999, its updated list of officers, and its list of
members for the years 1995, 1996, 1997, 1998, and 1999; (d) the
petition is already moot and academic, considering that the
certification election had already been held, and the members had
manifested their will to be represented by respondent.
In view of Director Cacdacs inhibition, DOLE Secretary Sto.
Tomas took cognizance of the appeal. In a resolution18 dated
February 21, 2003, she dismissed the appeal, holding that the
constitutionally guaranteed freedom of association and right of
workers to self-organization outweighed respondents
noncompliance with the statutory requirements to maintain its
status as a legitimate labor organization.
Petitioner filed a motion for reconsideration,19 but the motion was
likewise denied in a resolution20 dated May 30, 2003. DOLE
Secretary Sto. Tomas admitted that it was the BLR which had
jurisdiction over the appeal, but she pointed out that the BLR
Director had voluntarily inhibited himself from the case because
he used to appear as counsel for respondent. In order to maintain
the integrity of the decision and of the BLR, she therefore
accepted the motion to inhibit and took cognizance of the appeal.
Petitioner filed a petition for certiorari with the CA, raising the
issue of whether the DOLE Secretary acted with grave abuse of
discretion in taking cognizance of the appeal and affirming the
dismissal of its petition for cancellation of respondents
registration.

Citing National Union of Bank Employees v. Minister of Labor, et

In a Decision dated May 30, 2005, the CA denied the petition. The
al.9 and Samahan ng Manggagawa sa Pacific Plastic v. Hon.
CA opined that the DOLE Secretary may legally assume
Laguesma,10 the Med-Arbiter held that the pendency of a petition
jurisdiction over an appeal from the decision of the Regional
for cancellation of registration is not a bar to the holding of a
Director in the event that the Director of the BLR inhibits himself
certification election. Thus, in an Order11 dated January 26, 2001,
from the case. According to the CA, in the absence of the BLR
the Med-Arbiter dismissed petitioners protest, and certified
Director, there is no person more competent to resolve the appeal
respondent as the sole and exclusive bargaining agent of all
than the DOLE Secretary. The CA brushed aside the allegation of
supervisory employees.
bias and partiality on the part of the DOLE Secretary, considering
that such allegation was not supported by any evidence.
Petitioner subsequently appealed the said Order to the DOLE
Secretary.12 The appeal was later dismissed by DOLE Secretary
The CA also found that the DOLE Secretary did not commit grave
Patricia A. Sto. Tomas (DOLE Secretary Sto. Tomas) in the
abuse of discretion when she affirmed the dismissal of the petition
Resolution of August 21, 2002.13Petitioner moved for
for cancellation of respondents registration as a labor
reconsideration, but the motion was also denied.14
organization. Echoing the DOLE Secretary, the CA held that the
requirements of registration of labor organizations are an exercise
In the meantime, Regional Director Alex E. Maraan (Regional of the overriding police power of the State, designed for the
Director Maraan) of DOLE-NCR finally resolved the petition for protection of workers against potential abuse by the union that
cancellation of registration. While finding that respondent had recruits them. These requirements, the CA opined, should not be
indeed failed to file financial reports and the list of its members for exploited to work against the workers constitutionally protected
several years, he, nonetheless, denied the petition, ratiocinating right to self-organization.
that freedom of association and the employees right to self-
organization are more substantive considerations. He took into
Petitioner filed a motion for reconsideration, invoking this Courts
account the fact that respondent won the certification election and
ruling in Abbott Labs. Phils., Inc. v. Abbott Labs. Employees
that it had already been certified as the exclusive bargaining
Union,21 which categorically declared that the DOLE Secretary
agent of the supervisory employees. In view of the foregoing,
has no authority to review the decision of the Regional Director in
Regional Director Maraanwhile emphasizing that the non-
a petition for cancellation of union registration, and Section
compliance with the law is not viewed with favorconsidered the
4,22 Rule VIII, Book V of the Omnibus Rules Implementing the
belated submission of the annual financial reports and the list of
Labor Code.
members as sufficient compliance thereof and considered them
as having been submitted on time. The dispositive portion of the
decision15 dated December 29, 2001 reads: In its Resolution23 dated June 4, 2007, the CA denied petitioners
motion, stating that the BLR Directors inhibition from the case
was a peculiarity not present in the Abbott case, and that such
WHEREFORE, premises considered, the instant petition to delist
inhibition justified the assumption of jurisdiction by the DOLE
the National Union of Workers in the Hotel, Restaurant and Allied
Secretary.
Industries-Heritage Hotel Manila Supervisors Chapter from the roll
of legitimate labor organizations is hereby DENIED.
In this petition, petitioner argues that:
16
SO ORDERED.
I.
Aggrieved, petitioner appealed the decision to the BLR. 17 BLR
Director Hans Leo Cacdac inhibited himself from the case The Court of Appeals seriously erred in ruling that the Labor
because he had been a former counsel of respondent. Secretary properly assumed jurisdiction over Petitioners appeal
of the Regional Directors Decision in the Cancellation Petition x x
x.
A. Jurisdiction is conferred only by law. The Labor
Secretary had no jurisdiction to review the decision of
the Regional Director in a petition for cancellation. Such
jurisdiction is conferred by law to the BLR.
B. The unilateral inhibition by the BLR Director cannot
justify the Labor Secretarys exercise of jurisdiction over
the Appeal.
C. The Labor Secretarys assumption of jurisdiction
over the Appeal without notice violated Petitioners right
to due process.
II.
The Court of Appeals gravely erred in affirming the dismissal of
the Cancellation Petition despite the mandatory and unequivocal
provisions of the Labor Code and its Implementing Rules.24
The petition has no merit.
Jurisdiction to review the decision of the Regional Director lies
with the BLR. This is clearly provided in the Implementing Rules
of the Labor Code and enunciated by the Court in Abbott. But as
pointed out by the CA, the present case involves a peculiar
circumstance that was not present or covered by the ruling in
Abbott. In this case, the BLR Director inhibited himself from the
case because he was a former counsel of respondent. Who, then,
shall resolve the case in his place?
In Abbott, the appeal from the Regional Directors decision was
directly filed with the Office of the DOLE Secretary, and we ruled
that the latter has no appellate jurisdiction. In the instant case, the
appeal was filed by petitioner with the BLR, which, undisputedly,
acquired jurisdiction over the case. Once jurisdiction is acquired
by the court, it remains with it until the full termination of the
case.25
Thus, jurisdiction remained with the BLR despite the BLR
Directors inhibition. When the DOLE Secretary resolved the
appeal, she merely stepped into the shoes of the BLR Director
and performed a function that the latter could not himself perform.
She did so pursuant to her power of supervision and control over
the BLR.26
Expounding on the extent of the power of control, the Court, in
Araneta, et al. v. Hon. M. Gatmaitan, et al.,27pronounced that, if a
certain power or authority is vested by law upon the Department
Secretary, then such power or authority may be exercised directly
by the President, who exercises supervision and control over the
departments. This principle was incorporated in the Administrative
Code of 1987, which defines "supervision and control" as
including the authority to act directly whenever a specific function
is entrusted by law or regulation to a subordinate.28 Applying the
foregoing to the present case, it is clear that the DOLE Secretary,
as the person exercising the power of supervision and control
over the BLR, has the authority to directly exercise the quasi-
judicial function entrusted by law to the BLR Director.
It is true that the power of control and supervision does not give
the Department Secretary unbridled authority to take over the
functions of his or her subordinate. Such authority is subject to
certain guidelines which are stated in Book IV, Chapter 8, Section
39(1)(a) of the Administrative Code of 1987.29 However, in the
present case, the DOLE Secretarys act of taking over the
function of the BLR Director was warranted and necessitated by
the latters inhibition from the case and the objective to "maintain
the integrity of the decision, as well as the Bureau itself."30
Petitioner insists that the BLR Directors subordinates should
have resolved the appeal, citing the provision under the
Administrative Code of 1987 which states, "in case of the
absence or disability of the head of a bureau or office, his duties
shall be performed by the assistant head."31 The provision clearly
does not apply considering that the BLR Director was neither
absent nor suffering from any disability; he remained as head of
the BLR. Thus, to dispel any suspicion of bias, the DOLE
Secretary opted to resolve the appeal herself.
Petitioner was not denied the right to due process when it was not
notified in advance of the BLR Directors inhibition and the DOLE
Secretarys assumption of the case. Well-settled is the rule that
the essence of due process is simply an opportunity to be heard,
or, as applied to administrative proceedings, an opportunity to
explain ones side or an opportunity to seek a reconsideration of
the action or ruling complained of.32 Petitioner had the opportunity
to question the BLR Directors inhibition and the DOLE
Secretarys taking cognizance of the case when it filed a motion
for reconsideration of the latters decision. It would be well to state
that a critical component of due process is a hearing before an
impartial and disinterested tribunal, for all the elements of due
process, like notice and hearing, would be meaningless if the
ultimate decision would come from a partial and biased judge. 33 It
was precisely to ensure a fair trial that moved the BLR Director to
inhibit himself from the case and the DOLE Secretary to take over
his function.
Petitioner also insists that respondents registration as a
legitimate labor union should be cancelled. Petitioner posits that
once it is determined that a ground enumerated in Article 239 of
the Labor Code is present, cancellation of registration should
follow; it becomes the ministerial duty of the Regional Director to
cancel the registration of the labor organization, hence, the use of
the word "shall." Petitioner points out that the Regional Director
has admitted in its decision that respondent failed to submit the
required documents for a number of years; therefore, cancellation
of its registration should have followed as a matter of course.
We are not persuaded.
Articles 238 and 239 of the Labor Code read:
ART. 238. CANCELLATION OF REGISTRATION; APPEAL
The certificate of registration of any legitimate labor organization,
whether national or local, shall be canceled by the Bureau if it has
reason to believe, after due hearing, that the said labor
organization no longer meets one or more of the requirements
herein prescribed.34
ART. 239. GROUNDS FOR CANCELLATION OF UNION
REGISTRATION.
The following shall constitute grounds for cancellation of union
registration:
xxxx
(d) Failure to submit the annual financial report to the Bureau
within thirty (30) days after the closing of every fiscal year and
misrepresentation, false entries or fraud in the preparation of the
financial report itself;
xxxx
(i) Failure to submit list of individual members to the Bureau once
a year or whenever required by the Bureau.35
These provisions give the Regional Director ample discretion in
dealing with a petition for cancellation of a unions registration,
particularly, determining whether the union still meets the
requirements prescribed by law. It is sufficient to give the
Regional Director license to treat the late filing of required
documents as sufficient compliance with the requirements of the
law. After all, the law requires the labor organization to submit the
annual financial report and list of members in order to verify if it is
still viable and financially sustainable as an organization so as to
protect the employer and employees from fraudulent or fly-by-
night unions. With the submission of the required documents by
respondent, the purpose of the law has been achieved, though
belatedly.
We cannot ascribe abuse of discretion to the Regional Director
and the DOLE Secretary in denying the petition for cancellation of
respondents registration. The union members and, in fact, all the
employees belonging to the appropriate bargaining unit should
not be deprived of a bargaining agent, merely because of the
negligence of the union officers who were responsible for the
submission of the documents to the BLR.
Labor authorities should, indeed, act with circumspection in
treating petitions for cancellation of union registration, lest they be
accused of interfering with union activities. In resolving the
petition, consideration must be taken of the fundamental rights
guaranteed by Article XIII, Section 3 of the Constitution, i.e., the
rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities. Labor authorities
should bear in mind that registration confers upon a union the
status of legitimacy and the concomitant right and privileges
granted by law to a legitimate labor organization, particularly the
right to participate in or ask for certification election in a
bargaining unit.36 Thus, the cancellation of a certificate of
registration is the equivalent of snuffing out the life of a labor
organization. For without such registration, it loses - as a rule - its
rights under the Labor Code.37
It is worth mentioning that the Labor Codes provisions on
cancellation of union registration and on reportorial requirements
have been recently amended 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, As Amended, Otherwise Known as the Labor Code of the
Philippines, which lapsed into law on May 25, 2007 and became
effective on June 14, 2007. The amendment sought to strengthen
the workers right to self-organization and enhance the
Philippines compliance with its international obligations as
embodied in the International Labour Organization (ILO)
Convention No. 87,38 pertaining to the non-dissolution of workers
organizations by administrative authority.39 Thus, R.A. No. 9481
amended Article 239 to read:
ART. 239. Grounds for Cancellation of Union Registration.The
following may constitute grounds for cancellation of union
registration:
(a) Misrepresentation, false statement or fraud in
connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the
minutes of ratification, and the list of members who took
part in the ratification;
(b) Misrepresentation, false statements or fraud in
connection with the election of officers, minutes of the
election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
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 Bureau by the
legitimate labor organization concerned:
(a) Its constitution and by-laws, or amendments thereto,
the minutes of ratification, and the list of members who
took part in the ratification of the constitution and by-
laws within thirty (30) days from adoption or ratification
of the 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 but shall subject the
erring officers or members to suspension, expulsion from
membership, or any appropriate penalty.
ILO Convention No. 87, which we have ratified in 1953, provides
that "workers and employers organizations shall not be liable to
be dissolved or suspended by administrative authority." The ILO
has expressed the opinion that the cancellation of union
registration by the registrar of labor unions, which in our case is
the BLR, is tantamount to dissolution of the organization by
administrative authority when such measure would 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. Although the ILO has allowed such measure to be
taken, provided that judicial safeguards are in place, i.e., the right
to appeal to a judicial body, it has nonetheless reminded its
members that dissolution of a union, and cancellation of
registration for that matter, involve serious consequences for
occupational representation. It has, therefore, deemed it
preferable if such actions were to be taken only as a last resort
and after exhausting other possibilities with less serious effects on
the organization.40
The aforesaid amendments and the ILOs opinion on this matter
serve to fortify our ruling in this case. We therefore quote with
approval the DOLE Secretarys rationale for denying the petition,
thus:
It is undisputed that appellee failed to submit its annual financial
reports and list of individual members in accordance with Article
239 of the Labor Code. However, the existence of this ground
should not necessarily lead to the cancellation of union
registration. Article 239 recognizes the regulatory authority of the
State to exact compliance with reporting requirements. Yet there
is more at stake in this case than merely monitoring union
activities and requiring periodic documentation thereof.
The more substantive considerations involve the constitutionally
guaranteed freedom of association and right of workers to self-
organization. Also involved is the public policy to promote free
trade unionism and collective bargaining as instruments of
industrial peace and democracy.1avvphi1 An overly stringent
interpretation of the statute governing cancellation of union
registration without regard to surrounding circumstances cannot
be allowed. Otherwise, it would lead to an unconstitutional
application of the statute and emasculation of public policy
objectives. Worse, it can render nugatory the protection to labor
and social justice clauses 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 for this Office
to order the cancellation of the union and penalize the entire
union membership on the basis of the negligence of its officers.
In National Union of Bank Employees vs. Minister of Labor, L-
53406, 14 December 1981, 110 SCRA 296, the Supreme Court
ruled:
As aptly ruled by respondent Bureau of Labor Relations Director
Noriel: "The rights of workers to self-organization finds general
and specific constitutional guarantees. x x x Such constitutional
guarantees should not be lightly taken much less nullified. A
healthy respect for the freedom of association demands that acts
imputable to officers or members be not easily visited with capital
punishments against the association itself."
At any rate, we note that on 19 May 2000, appellee had submitted
its financial statement for the years 1996-1999. With this
submission, appellee has substantially complied with its duty to
submit its financial report for the said period. To rule differently
would be to preclude the union, after having failed to meet its
periodic obligations promptly, from taking appropriate measures
to correct its omissions. For the record, we do not view with favor
appellees late submission. Punctuality on the part of the union
and its officers could have prevented this petition.41
WHEREFORE, premises considered, the Court of Appeals
Decision dated May 30, 2005 and Resolution dated June 4, 2007
are AFFIRMED.
SO ORDERED
G.R. No. 183317 December 21, 2009
MARIWASA SIAM CERAMICS, INC., Petitioner,
vs.
THE SECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, CHIEF OF THE BUREAU OF LABOR
RELATIONS, DEPARTMENT OF LABOR AND EMPLOYMENT,
REGIONAL DIRECTOR OF DOLE REGIONAL OFFICE
NUMBER IV-A & SAMAHAN NG MGA MANGGAGAWA SA
MARIWASA SIAM CERAMICS, INC. (SMMSC-
INDEPENDENT), Respondents.
DECISION
NACHURA, J.:
This is a petition for review on certiorari1 under Rule 45 of the
Rules of Court, seeking to annul the Decision2dated December
20, 2007 and the Resolution3 dated June 6, 2008 of the Court of
Appeals in CA-G.R. SP No. 98332.
The antecedent facts are as follows
On May 4, 2005, respondent Samahan Ng Mga Manggagawa Sa
Mariwasa Siam Ceramics, Inc. (SMMSC-Independent) was
issued a Certificate of Registration4 as a legitimate labor
organization by the Department of Labor and Employment
(DOLE), Region IV-A.
On June 14, 2005, petitioner Mariwasa Siam Ceramics, Inc. filed
a Petition for Cancellation of Union Registration against
respondent, claiming that the latter violated Article 2345 of the
Labor Code for not complying with the 20% requirement, and that
it committed massive fraud and misrepresentation in violation of
Article 2396 of the same code. The case was docketed as Case
No. RO400-0506-AU-004.
On August 26, 2005, the Regional Director of DOLE IV-A issued
an Order granting the petition, revoking the registration of
respondent, and delisting it from the roster of active labor unions.
Aggrieved, respondent appealed to the Bureau of Labor Relations
(BLR).
In a Decision7 dated June 14, 2006, the BLR granted
respondents appeal and disposed as follows
WHEREFORE, premises considered, the appeal by Samahan ng
Manggagawa sa Mariwasa Siam Ceramics, Inc. (SMMSC-
Independent) is hereby GRANTED, and the Decision dated 26
August 2005 by DOLE-Region-IV-A Director Maximo B. Lim is
hereby REVERSED and SET ASIDE. Samahan ng Manggagawa
sa Mariwasa Siam Ceramics, Inc. (SMMSC-Independent), under
Registration Certificate No. RO400-200505-UR-002, remains in
the roster of legitimate labor organizations.
SO DECIDED.8
Petitioner filed a Motion for Reconsideration but the BLR denied it
in a Resolution9 dated February 2, 2007.
Petitioner sought recourse with the Court of Appeals (CA) through
a Petition for Certiorari; but the CA denied the petition for lack of
merit.
Petitioners motion for reconsideration of the CA Decision was
likewise denied, hence, this petition based on the following
grounds
Review of the Factual Findings of the Bureau of Labor Relations,
adopted and confirmed by the Honorable Court of Appeals is
warranted[;]
The Honorable Court of Appeals seriously erred in ruling that the
affidavits of recantation cannot be given credence[;]
The Honorable Court of Appeals seriously erred in ruling that
private respondent union complied with the 20% membership
requirement[; and]
The Honorable Court of Appeals seriously erred when it ruled that
private respondent union did not commit misrepresentation, fraud
or false statement.10
The petition should be denied.
The petitioner insists that respondent failed to comply with the
20% union membership requirement for its registration as a
legitimate labor organization because of the disaffiliation from the
total number of union members of 102 employees who executed
affidavits recanting their union membership.
It is, thus, imperative that we peruse the affidavits appearing to
have been executed by these affiants.
The affidavits uniformly state
Ako, _____________, Pilipino, may sapat na gulang, regular na
empleyado bilang Rank & File sa Mariwasa Siam Ceramics, Inc.,
Bo. San Antonio, Sto. Tomas, Batangas, matapos na
makapanumpa ng naaayon sa batas ay malaya at kusang loob na
nagsasaad ng mga sumusunod:
1. Ako ay napilitan at nilinlang sa pagsapi sa Samahan
ng mga Manggagawa sa Mariwasa Siam Ceramics, Inc.
o SMMSC-Independent sa kabila ng aking pag-
aalinlangan[;]
2. Aking lubos na pinagsisihan ang aking pagpirma sa
sipi ng samahan, at handa ako[ng] tumalikod sa
anumang kasulatan na aking nalagdaan sa kadahilanan
na hindi angkop sa aking pananaw ang mga mungkahi
o adhikain ng samahan.
SA KATUNAYAN NANG LAHAT, ako ay lumagda ng aking
pangalan ngayong ika-____ ng ______, 2005 dito sa Lalawigan
ng Batangas, Bayan ng Sto. Tomas.
____________________
Nagsasalaysay
Evidently, these affidavits were written and prepared in advance,
and the pro forma affidavits were ready to be filled out with the
employees names and signatures.
The first common allegation in the affidavits is a declaration that,
in spite of his hesitation, the affiant was forced and deceived into
joining the respondent union. It is worthy to note, however, that
the affidavit does not mention the identity of the people who
allegedly forced and deceived the affiant into joining the union,
much less the circumstances that constituted such force and
deceit. Indeed, not only was this allegation couched in very
general terms and sweeping in nature, but more importantly, it
was not supported by any evidence whatsoever.
The second allegation ostensibly bares the affiants regret for
joining respondent union and expresses the desire to abandon or
renege from whatever agreement he may have signed regarding
his membership with respondent.
Simply put, through these affidavits, it is made to appear that the
affiants recanted their support of respondents application for
registration.
In appreciating affidavits of recantation such as these, our ruling
in La Suerte Cigar and Cigarette Factory v. Director of the Bureau
of Labor Relations11 is enlightening, viz.
On the second issuewhether or not the withdrawal of 31 union
members from NATU affected the petition for certification election
insofar as the 30% requirement is concerned, We reserve the
Order of the respondent Director of the Bureau of Labor
Relations, it appearing undisputably that the 31 union members
had withdrawn their support to the petition before the filing of said
petition. It would be otherwise if the withdrawal was made after
the filing of the petition for it would then be presumed that the
withdrawal was not free and voluntary. The presumption would
arise that the withdrawal was procured through duress, coercion
or for valuable consideration. In other words, the distinction must
be that withdrawals made before the filing of the petition are
presumed voluntary unless there is convincing proof to the
contrary, whereas withdrawals made after the filing of the petition
are deemed involuntary.
The reason for such distinction is that if the withdrawal or
retraction is made before the filing of the petition, the names of
employees supporting the petition are supposed to be held secret
to the opposite party. Logically, any such withdrawal or retraction
shows voluntariness in the absence of proof to the contrary.
Moreover, it becomes apparent that such employees had not
given consent to the filing of the petition, hence the subscription
requirement has not been met.
When the withdrawal or retraction is made after the petition is
filed, the employees who are supporting the petition become
known to the opposite party since their names are attached to the
petition at the time of filing. Therefore, it would not be unexpected
that the opposite party would use foul means for the subject
employees to withdraw their support.12
In the instant case, the affidavits of recantation were executed
after the identities of the union members became public, i.e., after
the union filed a petition for certification election on May 23, 2005,
since the names of the members were attached to the petition.
The purported withdrawal of support for the registration of the
union was made after the documents were submitted to the
DOLE, Region IV-A. The logical conclusion, therefore, following
jurisprudence, is that the employees were not totally free from the
employers pressure, and so the voluntariness of the employees
execution of the affidavits becomes suspect.
It is likewise notable that the first batch of 25 pro forma affidavits
shows that the affidavits were executed by the individual affiants
on different dates from May 26, 2005 until June 3, 2005, but they
were all sworn before a notary public on June 8, 2005.
There was also a second set of standardized affidavits executed
on different dates from May 26, 2005 until July 6, 2005. While
these 77 affidavits were notarized on different dates, 56 of these
were notarized on June 8, 2005, the very same date when the
first set of 25 was notarized.
Considering that the first set of 25 affidavits was submitted to the
DOLE on June 14, 2005, it is surprising why petitioner was able to
submit the second set of affidavits only on July 12, 2005.
Accordingly, we cannot give full credence to these affidavits,
which were executed under suspicious circumstances, and which
contain allegations unsupported by evidence. At best, these
affidavits are self-serving. They possess no probative value.
A retraction does not necessarily negate an earlier declaration.
For this reason, retractions are looked upon with disfavor and do
not automatically exclude the original statement or declaration
based solely on the recantation. It is imperative that a
determination be first made as to which between the original and
the new statements should be given weight or accorded belief,
applying the general rules on evidence. In this case, inasmuch as
they remain bare allegations, the purported recantations should
not be upheld.13
Nevertheless, even assuming the veracity of the affidavits of
recantation, the legitimacy of respondent as a labor organization
must be affirmed. While it is true that the withdrawal of support
may be considered as a resignation from the union, the fact
remains that at the time of the unions application for registration,
the affiants were members of respondent and they comprised
more than the required 20% membership for purposes of
registration as a labor union. Article 234 of the Labor Code merely
requires a 20% minimum membership during the application for
union registration. It does not mandate that a union must maintain
the 20% minimum membership requirement all throughout its
existence.141avvphi1
Respondent asserts that it had a total of 173 union members at
the time it applied for registration. Two names were repeated in
respondents list and had to be deducted, but the total would still
be 171 union members. Further, out of the four names alleged to
be no longer connected with petitioner, only two names should be
deleted from the list since Diana Motilla and T.W. Amutan
resigned from petitioner only on May 10, 2005 and May 17, 2005,
respectively, or after respondents registration had already been
granted. Thus, the total union membership at the time of
registration was 169. Since the total number of rank-and-file
employees at that time was 528, 169 employees would be
equivalent to 32% of the total rank-and-file workers complement,
still very much above the minimum required by law.
For the purpose of de-certifying a union such as respondent, it
must be shown that there was misrepresentation, false statement
or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto; the minutes of
ratification; or, in connection with the election of officers, the
minutes of the election of officers, the list of voters, or failure to
submit these documents together with the list of the newly
elected-appointed officers and their postal addresses to the
BLR.15
The bare fact that two signatures appeared twice on the list of
those who participated in the organizational meeting would not, to
our mind, provide a valid reason to cancel respondents certificate
of registration. The cancellation of a unions registration doubtless
has an impairing dimension on the right of labor to self-
organization. For fraud and misrepresentation to be grounds for
cancellation of union registration under the Labor Code, the
nature of the fraud and misrepresentation must be grave and
compelling enough to vitiate the consent of a majority of union
members.
In this case, we agree with the BLR and the CA that respondent
could not have possibly committed misrepresentation, fraud, or
false statements. The alleged failure of respondent to indicate
with mathematical precision the total number of employees in the
bargaining unit is of no moment, especially as it was able to
comply with the 20% minimum membership requirement. Even if
the total number of rank-and-file employees of petitioner is 528,
while respondent declared that it should only be 455, it still cannot
be denied that the latter would have more than complied with the
registration requirement.
WHEREFORE, the petition is DENIED. The assailed December
20, 2007 Decision and the June 6, 2008 Resolution of the Court
of Appeals are AFFIRMED. Costs against petitioner.
SO ORDERED
G.R. No. 114974 June 16, 2004
STANDARD CHARTERED BANK EMPLOYEES UNION
(NUBE), petitioner,
vs.
The Honorable MA. NIEVES R. CONFESOR, in her capacity as
SECRETARY OF LABOR AND EMPLOYMENT; and the
STANDARD CHARTERED BANK, respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for certiorari under Rule 65 of the Rules of Court
filed by the Standard Chartered Bank Employees Union, seeking
the nullification of the October 29, 1993 Order1 of then Secretary
of Labor and Employment Nieves R. Confesor and her resolutions
dated December 16, 1993 and February 10, 1994.
The Antecedents
Standard Chartered Bank (the Bank, for brevity) is a foreign
banking corporation doing business in the Philippines. The
exclusive bargaining agent of the rank and file employees of the
Bank is the Standard Chartered Bank Employees Union (the
Union, for brevity).
In August of 1990, the Bank and the Union signed a five-year
collective bargaining agreement (CBA) with a provision to
renegotiate the terms thereof on the third year. Prior to the
expiration of the three-year period2 but within the sixty-day
freedom period, the Union initiated the negotiations. On February
18, 1993, the Union, through its President, Eddie L. Divinagracia,
sent a letter3 containing its proposals4 covering political
provisions5 and thirty-four (34) economic provisions.6 Included
therein was a list of the names of the members of the Unions
negotiating panel.7
In a Letter dated February 24, 1993, the Bank, through its Country
Manager Peter H. Harris, took note of the Unions proposals. The
Bank attached its counter-proposal to the non-economic Maximum disability benefit reduced from 75,000.00 to
provisions proposed by the Union.8 The Bank posited that it would 60,000.00 per illness annually
be in a better position to present its counter-proposals on the
economic items after the Union had presented its justifications for
Death Assistance:
the economic proposals.9 The Bank, likewise, listed the members
of its negotiating panel.10 The parties agreed to set meetings to
settle their differences on the proposed CBA. For the employee Reduced from 50,000.00 to
45,000.00
Before the commencement of the negotiation, the Union, through
Divinagracia, suggested to the Banks Human Resource Manager For Immediate Family Member Reduced from
and head of the negotiating panel, Cielito Diokno, that the bank 30,000.00 to 25,000.00
lawyers should be excluded from the negotiating team. The Bank
acceded.11 Meanwhile, Diokno suggested to Divinagracia that
Dental and all others No change from the original
Jose P. Umali, Jr., the President of the National Union of Bank
Employees (NUBE), the federation to which the Union was demand.18
affiliated, be excluded from the Unions negotiating
panel.12 However, Umali was retained as a member thereof. In the morning of the June 15, 1993 meeting, the Union
suggested that if the Bank would not make the necessary
On March 12, 1993, the parties met and set the ground rules for revisions on its counter-proposal, it would be best to seek a third
party assistance.19 After the break, the Bank presented its revised
the negotiation. Diokno suggested that the negotiation be kept a
"family affair." The proposed non-economic provisions of the CBA counter-proposal20 as follows:
were discussed first.13Even during the final reading of the non-
economic provisions on May 4, 1993, there were still provisions Wage Increase : 1st Year from 1,000 to 1,050.00
on which the Union and the Bank could not agree. Temporarily,
the notation "DEFERRED" was placed therein. Towards the end
of the meeting, the Union manifested that the same should be 2nd Year 800.00 no change
changed to "DEADLOCKED" to indicate that such items remained
unresolved. Both parties agreed to place the notation Group Hospitalization Insurance
"DEFERRED/DEADLOCKED."14
From: 35,000.00 per illness
On May 18, 1993, the negotiation for economic provisions
commenced. A presentation of the basis of the Unions economic
proposals was made. The next meeting, the Bank made a similar To : 35,000.00 per illness per year
presentation. Towards the end of the Banks presentation, Umali
requested the Bank to validate the Unions "guestimates," Death Assistance For employee
especially the figures for the rank and file staff. 15 In the
succeeding meetings, Umali chided the Bank for the insufficiency
of its counter-proposal on the provisions on salary increase, group From: 20,000.00
hospitalization, death assistance and dental benefits. He
reminded the Bank, how the Union got what it wanted in 1987, To : 25,000.00
and stated that if need be, the Union would go through the same
route to get what it wanted.16
Dental Retainer Original offer remains the same21

Upon the Banks insistence, the parties agreed to tackle the

economic package item by item. Upon the Unions suggestion, The Union, for its part, made the following counter-proposal:
the Bank indicated which provisions it would accept, reject, retain
and agree to discuss.17 The Bank suggested that the Union Wage Increase: 1st Year - 40%
prioritize its economic proposals, considering that many of such
economic provisions remained unresolved. The Union, however,
demanded that the Bank make a revised itemized proposal. 2nd Year - 19.5%

In the succeeding meetings, the Union made the following Group Hospitalization Insurance
proposals:
From: 60,000.00 per year
Wage Increase:
To : 50,000.00 per year
1st Year Reduced from 45% to 40%
Dental:
2nd Year - Retain at 20%
Temporary Filling/ 150.00
Total = 60%
Tooth Extraction
Group Hospitalization Insurance:
Permanent Filling 200.00
 Prophylaxis 250.00 dispute at the Bank. The complaint for ULP filed by the Bank
before the NLRC was consolidated with the complaint over which
the SOLE assumed jurisdiction. After the parties submitted their
Root Canal From 2,000 per tooth
respective position papers, the SOLE issued an Order on October
29, 1993, the dispositive portion of which is herein quoted:
To: 1,800.00 per tooth
WHEREFORE, the Standard Chartered Bank and the
Death Assistance: Standard Chartered Bank Employees Union NUBE
are hereby ordered to execute a collective bargaining
agreement incorporating the dispositions contained
For Employees: From 45,000.00 to 40,000.00
herein. The CBA shall be retroactive to 01 April 1993
and shall remain effective for two years thereafter, or
For Immediate Family Member: From 25,000.00 to until such time as a new CBA has superseded it. All
20,000.00.22 provisions in the expired CBA not expressly modified or
not passed upon herein are deemed retained while all
new provisions which are being demanded by either
The Unions original proposals, aside from the above-quoted, party are deemed denied, but without prejudice to such
remained the same. agreements as the parties may have arrived at in the
meantime.
Another set of counter-offer followed:
The Banks charge for unfair labor practice which it
originally filed with the NLRC as NLRC-NCR Case No.
Management Union 00-06-04191-93 but which is deemed consolidated
herein, is dismissed for lack of merit. On the other
Wage Increase hand, the Unions charge for unfair labor practice is
similarly dismissed.
1st Year 1,050.00 40%

2nd Year - 850.00 19.0%23 Let a copy of this order be furnished the Labor Arbiter in
whose sala NLRC-NCR Case No. 00-06-04191-93 is
pending for his guidance and appropriate action.29
Diokno stated that, in order for the Bank to make a better offer,
the Union should clearly identify what it wanted to be included in The SOLE gave the following economic awards:
the total economic package. Umali replied that it was impossible
to do so because the Banks counter-proposal was unacceptable.
He furthered asserted that it would have been easier to bargain if 1. Wage Increase:
the atmosphere was the same as before, where both panels
trusted each other. Diokno requested the Union panel to refrain a) To be incorporated to present salary rates:
from involving personalities and to instead focus on the
negotiations.24 He suggested that in order to break the impasse,
the Union should prioritize the items it wanted to iron out. Fourth year : 7% of basic monthly salary
Divinagracia stated that the Bank should make the first move and
make a list of items it wanted to be included in the economic Fifth year : 5% of basic monthly salary based
package. Except for the provisions on signing bonus and on the 4th year adjusted salary
uniforms, the Union and the Bank failed to agree on the remaining
economic provisions of the CBA. The Union declared a
deadlock25 and filed a Notice of Strike before the National b) Additional fixed amount:
Conciliation and Mediation Board (NCMB) on June 21, 1993,
docketed as NCMB-NCR-NS-06-380-93.26
Fourth year : 600.00 per month

On the other hand, the Bank filed a complaint for Unfair Labor
Fifth year : 400.00 per month
Practice (ULP) and Damages before the Arbitration Branch of the
National Labor Relations Commission (NLRC) in Manila,
docketed as NLRC Case No. 00-06-04191-93 against the Union 2. Group Insurance
on June 28, 1993. The Bank alleged that the Union violated its
duty to bargain, as it did not bargain in good faith. It contended
a) Hospitalization : 45,000.00
that the Union demanded "sky high economic demands,"
indicative of blue-sky bargaining.27 Further, the Union violated its
no strike- no lockout clause by filing a notice of strike before the b) Life : 130,000.00
NCMB. Considering that the filing of notice of strike was an illegal
act, the Union officers should be dismissed. Finally, the Bank
c) Accident : 130,000.00
alleged that as a consequence of the illegal act, the Bank suffered
nominal and actual damages and was forced to litigate and hire
the services of the lawyer.28 3. Medicine Allowance

On July 21, 1993, then Secretary of Labor and Employment Fourth year : 5,500.00
(SOLE) Nieves R. Confesor, pursuant to Article 263(g) of the
Labor Code, issued an Order assuming jurisdiction over the labor
Fifth year : 6,000.00
 4. Dental Benefits
Provision of dental retainer as proposed by the Bank,
but without diminishing existing benefits
5. Optical Allowance
Fourth year: 2,000.00
Fifth year : 2,500.00
6. Death Assistance
a) Employee : 30,000.00
b) Immediate Family Member : 5,000.00
7. Emergency Leave Five (5) days for each
contingency
8. Loans
a) Car Loan : 200,000.00
b) Housing Loan : It cannot be denied that
the costs attendant to having ones own
home have tremendously gone up. The need,
therefore, to improve on this benefit cannot
be overemphasized. Thus, the management
is urged to increase the existing and
allowable housing loan that the Bank extends
to its employees to an amount that will give
meaning and substance to this CBA benefit.30
The SOLE dismissed the charges of ULP of both the Union and
the Bank, explaining that both parties failed to substantiate their
claims. Citing National Labor Union v. Insular-Yebana Tobacco
Corporation,31 the SOLE stated that ULP charges would prosper
only if shown to have directly prejudiced the public interest.
Dissatisfied, the Union filed a motion for reconsideration with
clarification, while the Bank filed a motion for reconsideration. On
December 16, 1993, the SOLE issued a Resolution denying the
motions. The Union filed a second motion for reconsideration,
which was, likewise, denied on February 10, 1994.
On March 22, 1994, the Bank and the Union signed the
CBA.32 Immediately thereafter, the wage increase was effected
and the signing bonuses based on the increased wage were
distributed to the employees covered by the CBA.
The Present Petition
On April 28, 1994, the Union filed this petition for certiorari under
Rule 65 of the Rules of Procedure alleging as follows:
A. RESPONDENT HONORABLE SECRETARY
COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN
DISMISSING THE UNIONS CHARGE OF UNFAIR
LABOR PRACTICE IN VIEW OF THE CLEAR
EVIDENCE OF RECORD AND ADMISSIONS
PROVING THE UNFAIR LABOR PRACTICES
CHARGED.33
B. RESPONDENT HONORABLE SECRETARY
COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN
FAILING TO RULE ON OTHER UNFAIR LABOR
PRACTICES CHARGED.34
C. RESPONDENT HONORABLE SECRETARY
COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN
DISMISSING THE CHARGES OF UNFAIR LABOR
PRACTICES ON THE GROUND THAT NO PROOF OF
INJURY TO THE PUBLIC INTEREST WAS
PRESENTED.35
The Union alleges that the SOLE acted with grave abuse of
discretion amounting to lack or excess of jurisdiction when it
found that the Bank did not commit unfair labor practice when it
interfered with the Unions choice of negotiator. It argued that,
Dioknos suggestion that the negotiation be limited as a "family
affair" was tantamount to suggesting that Federation President
Jose Umali, Jr. be excluded from the Unions negotiating panel. It
further argued that contrary to the ruling of the public respondent,
damage or injury to the public interest need not be present in
order for unfair labor practice to prosper.
The Union, likewise, pointed out that the public respondent failed
to rule on the ULP charges arising from the Banks surface
bargaining. The Union contended that the Bank merely went
through the motions of collective bargaining without the intent to
reach an agreement, and made bad faith proposals when it
announced that the parties should begin from a clean slate. It
argued that the Bank opened the political provisions "up for
grabs," which had the effect of diminishing or obliterating the
gains that the Union had made.
The Union also accused the Bank of refusing to disclose material
and necessary data, even after a request was made by the Union
to validate its "guestimates."
In its Comment, the Bank prayed that the petition be dismissed as
the Union was estopped, considering that it signed the Collective
Bargaining Agreement (CBA) on April 22, 1994. It asserted that
contrary to the Unions allegations, it was the Union that
committed ULP when negotiator Jose Umali, Jr. hurled invectives
at the Banks head negotiator, Cielito Diokno, and demanded that
she be excluded from the Banks negotiating team. Moreover, the
Union engaged in blue-sky bargaining and isolated the no strike-
no lockout clause of the existing CBA.
The Office of the Solicitor General, in representation of the public
respondent, prayed that the petition be dismissed. It asserted that
the Union failed to prove its ULP charges and that the public
respondent did not commit any grave abuse of discretion in
issuing the assailed order and resolutions.
The Issues
The issues presented for resolution are the following: (a) whether
or not the Union was able to substantiate its claim of unfair labor
practice against the Bank arising from the latters alleged
"interference" with its choice of negotiator; surface bargaining;
making bad faith non-economic proposals; and refusal to furnish
the Union with copies of the relevant data; (b) whether or not the
public respondent acted with grave abuse of discretion amounting
to lack or excess of jurisdiction when she issued the assailed
order and resolutions; and, (c) whether or not the petitioner is
estopped from filing the instant action.
The Courts Ruling
The petition is bereft of merit.
"Interference" under Article
248 (a) of the Labor Code
The petitioner asserts that the private respondent committed ULP,
i.e., interference in the selection of the Unions negotiating panel,
when Cielito Diokno, the Banks Human Resource Manager,
suggested to the Unions President Eddie L. Divinagracia that
Jose P. Umali, Jr., President of the NUBE, be excluded from the
Unions negotiating panel. In support of its claim, Divinagracia
executed an affidavit, stating that prior to the commencement of
the negotiation, Diokno approached him and suggested the
exclusion of Umali from the Unions negotiating panel, and that
during the first meeting, Diokno stated that the negotiation be kept
a "family affair."
Citing the cases of U.S. Postal Service36 and Harley Davidson
Motor Co., Inc., AMF,37 the Union claims that interference in the
choice of the Unions bargaining panel is tantamount to ULP.
In the aforecited cases, the alleged ULP was based on the
employers violation of Section 8(a)(1) and (5) of the National
Labor Relations Act (NLRA),38 which pertain to the interference,
restraint or coercion of the employer in the employees exercise of
their rights to self-organization and to bargain collectively through
representatives of their own choosing; and the refusal of the
employer to bargain collectively with the employees
representatives. In both cases, the National Labor Relations
Board held that upon the employers refusal to engage in
negotiations with the Union for collective-bargaining contract
when the Union includes a person who is not an employee, or one
who is a member or an official of other labororganizations, such
employer is engaged in unfair labor practice under Section 8(a)(1)
and (5) of the NLRA.
The Union further cited the case of Insular Life Assurance Co.,
Ltd. Employees Association NATU vs. Insular Life Assurance
Co. Ltd.,39 wherein this Court said that the test of whether an
employer has interfered with and coerced employees in the
exercise of their right to self-organization within the meaning of
subsection (a)(1) is whether the employer has engaged in
conduct which it may reasonably be said, tends to interfere with
the free exercise of employees rights under Section 3 of the
Act.40 Further, it is not necessary that there be direct evidence
that any employee was in fact intimidated or coerced by
statements of threats of the employer if there is a reasonable
inference that anti-union conduct of the employer does have an
adverse effect on self-organization and collective bargaining.41
Under the International Labor Organization Convention (ILO) No.
87 FREEDOM OF ASSOCIATION AND PROTECTION OF THE
RIGHT TO ORGANIZE to which the Philippines is a signatory,
"workers and employers, without distinction whatsoever, shall
have the right to establish and, subject only to the rules of the
organization concerned, to job organizations of their own
choosing without previous authorization."42
Workers and employers organizations shall have the right to
draw up their constitutions and rules, to elect their representatives
in full freedom to organize their administration and activities and
to formulate their programs.43Article 2 of ILO Convention No. 98
pertaining to the Right to Organize and Collective Bargaining,
provides:
Article 2
1. Workers and employers organizations shall enjoy
adequate protection against any acts or interference by
each other or each others agents or members in their
establishment, functioning or administration.
2. In particular, acts which are designed to promote the
establishment of workers organizations under the
domination of employers or employers organizations or
to support workers organizations by financial or other
means, with the object of placing such organizations
under the control of employers or employers
organizations within the meaning of this Article.
The aforcited ILO Conventions are incorporated in our Labor
Code, particularly in Article 243 thereof, which provides:
ART. 243. COVERAGE AND EMPLOYEES RIGHT TO
SELF-ORGANIZATION. All persons employed in
commercial, industrial and agricultural enterprises and
in religious, charitable, medical or educational
institutions whether operating for profit or not, shall
have the right to self-organization and to form, join, or
assist labor organizations of their own choosing for
purposes of collective bargaining. Ambulant,
intermittent and itinerant workers, self-employed
people, rural workers and those without any definite
employers may form labor organizations for their mutual
aid and protection.
and Articles 248 and 249 respecting ULP of employers and labor
organizations.
The said ILO Conventions were ratified on December 29, 1953.
However, even as early as the 1935 Constitution, 44 the State had
already expressly bestowed protection to labor as part of the
general provisions. The 1973 Constitution,45 on the other hand,
declared it as a policy of the state to afford protection to labor,
specifying that the workers rights to self-organization, collective
bargaining, security of tenure, and just and humane conditions of
work would be assured. For its part, the 1987 Constitution, aside
from making it a policy to "protect the rights of workers and
promote their welfare,"46 devotes an entire section, emphasizing
its mandate to afford protection to labor, and highlights "the
principle of shared responsibility" between workers and
employers to promote industrial peace.47
Article 248(a) of the Labor Code, considers it an unfair labor
practice when an employer interferes, restrains or coerces
employees in the exercise of their right to self-organization or the
right to form association. The right to self-organization necessarily
includes the right to collective bargaining.
Parenthetically, if an employer interferes in the selection of its
negotiators or coerces the Union to exclude from its panel of
negotiators a representative of the Union, and if it can be inferred
that the employer adopted the said act to yield adverse effects on
the free exercise to right to self-organization or on the right to
collective bargaining of the employees, ULP under Article 248(a)
in connection with Article 243 of the Labor Code is committed.
In order to show that the employer committed ULP under the
Labor Code, substantial evidence is required to support the claim.
Substantial evidence has been defined as such relevant evidence
as a reasonable mind might accept as adequate to support a
conclusion.48 In the case at bar, the Union bases its claim of
interference on the alleged suggestions of Diokno to exclude
Umali from the Unions negotiating panel.
The circumstances that occurred during the negotiation do not
show that the suggestion made by Diokno to Divinagracia is an
anti-union conduct from which it can be inferred that the Bank
consciously adopted such act to yield adverse effects on the free
exercise of the right to self-organization and collective bargaining
of the employees, especially considering that such was
undertaken previous to the commencement of the negotiation and
simultaneously with Divinagracias suggestion that the bank
lawyers be excluded from its negotiating panel.
The records show that after the initiation of the collective
bargaining process, with the inclusion of Umali in the Unions
negotiating panel, the negotiations pushed through. The
complaint was made only on August 16, 1993 after a deadlock
was declared by the Union on June 15, 1993.
It is clear that such ULP charge was merely an afterthought. The
accusation occurred after the arguments and differences over the
economic provisions became heated and the parties had become
frustrated. It happened after the parties started to involve
personalities. As the public respondent noted, passions may rise,
and as a result, suggestions given under less adversarial
situations may be colored with unintended meanings.49 Such is
what appears to have happened in this case.
The Duty to Bargain
Collectively
If at all, the suggestion made by Diokno to Divinagracia should be
construed as part of the normal relations and innocent
communications, which are all part of the friendly relations
between the Union and Bank.
The Union alleges that the Bank violated its duty to bargain;
hence, committed ULP under Article 248(g) when it engaged in
surface bargaining. It alleged that the Bank just went through the
motions of bargaining without any intent of reaching an
agreement, as evident in the Banks counter-proposals. It
explained that of the 34 economic provisions it made, the Bank
only made 6 economic counterproposals. Further, as borne by the
minutes of the meetings, the Bank, after indicating the economic
provisions it had rejected, accepted, retained or were open for
discussion, refused to make a list of items it agreed to include in
the economic package.
Surface bargaining is defined as "going through the motions of
negotiating" without any legal intent to reach an agreement. 50 The
resolution of surface bargaining allegations never presents an
easy issue. The determination of whether a party has engaged in
unlawful surface bargaining is usually a difficult one because it
involves, at bottom, a question of the intent of the party in
question, and usually such intent can only be inferred from the
totality of the challenged partys conduct both at and away from
the bargaining table.51 It involves the question of whether an
employers conduct demonstrates an unwillingness to bargain in
good faith or is merely hard bargaining.52
The minutes of meetings from March 12, 1993 to June 15, 1993
do not show that the Bank had any intention of violating its duty to
bargain with the Union. Records show that after the Union sent its
proposal to the Bank on February 17, 1993, the latter replied with
a list of its counter-proposals on February 24, 1993. Thereafter,
meetings were set for the settlement of their differences. The
minutes of the meetings show that both the Bank and the Union
exchanged economic and non-economic proposals and counter-
proposals.
The Union has not been able to show that the Bank had done
acts, both at and away from the bargaining table, which tend to
show that it did not want to reach an agreement with the Union or
to settle the differences between it and the Union. Admittedly, the
parties were not able to agree and reached a deadlock. However,
it is herein emphasized that the duty to bargain "does not compel
either party to agree to a proposal or require the making of a
concession."53 Hence, the parties failure to agree did not amount
to ULP under Article 248(g) for violation of the duty to bargain.
We can hardly dispute this finding, for it finds support in the
evidence. The inference that respondents did not refuse to
bargain collectively with the complaining union because they
accepted some of the demands while they refused the others
even leaving open other demands for future discussion is correct,
especially so when those demands were discussed at a meeting
called by respondents themselves precisely in view of the letter
sent by the union on April 29, 196054
In view of the finding of lack of ULP based on Article 248(g), the
accusation that the Bank made bad-faith provisions has no leg to
stand on. The records show that the Banks counterproposals on
the non-economic provisions or political provisions did not put "up
for grabs" the entire work of the Union and its predecessors. As
can be gleaned from the Banks counterproposal, there were
many provisions which it proposed to be retained. The revisions
on the other provisions were made after the parties had come to
an agreement. Far from buttressing the Unions claim that the
Bank made bad-faith proposals on the non-economic provisions,
all these, on the contrary, disprove such allegations.
We, likewise, find that the Union failed to substantiate its claim
that the Bank refused to furnish the information it needed.
While the refusal to furnish requested information is in itself an
unfair labor practice, and also supports the inference of surface
bargaining,55 in the case at bar, Umali, in a meeting dated May
18, 1993, requested the Bank to validate its guestimates on the
data of the rank and file. However, Umali failed to put his request
in writing as provided for in Article 242(c) of the Labor Code:
Article 242. Rights of Legitimate Labor Organization
(c) To be furnished by the employer, upon written
request, with the annual audited financial statements,
including the balance sheet and the profit and loss
statement, within thirty (30) calendar days from the date
 of receipt of the request, after the union has been duly
recognized by the employer or certified as the sole and
exclusive bargaining representatives of the employees
in the bargaining unit, or within sixty (60) calendar days
before the expiration of the existing collective
bargaining agreement, or during the collective
negotiation;
The Union, did not, as the Labor Code requires, send a written
request for the issuance of a copy of the data about the Banks
rank and file employees. Moreover, as alleged by the Union, the
fact that the Bank made use of the aforesaid guestimates,
amounts to a validation of the data it had used in its presentation.
No Grave Abuse of Discretion
On the Part of the Public Respondent
The special civil action for certiorari may be availed of when the
tribunal, board, or officer exercising judicial or quasi-judicial
functions has acted without or in excess of jurisdiction and there
is no appeal or any plain, speedy, and adequate remedy in the
ordinary course of law for the purpose of annulling the
proceeding.56 Grave abuse of discretion implies such capricious
and whimsical exercise of judgment as is equivalent to lack of
jurisdiction, or where the power is exercised in an arbitrary or
despotic manner by reason of passion or personal hostility which
must be so patent and gross as to amount to an invasion of
positive duty or to a virtual refusal to perform the duty enjoined or
to act at all in contemplation of law. Mere abuse of discretion is
not enough.57
While it is true that a showing of prejudice to public interest is not
a requisite for ULP charges to prosper, it cannot be said that the
public respondent acted in capricious and whimsical exercise of
judgment, equivalent to lack of jurisdiction or excess thereof.
Neither was it shown that the public respondent exercised its
power in an arbitrary and despotic manner by reason of passion
or personal hostility.
Estoppel not Applicable
In the Case at Bar
The respondent Bank argues that the petitioner is estopped from
raising the issue of ULP when it signed the new CBA.
Article 1431 of the Civil Code provides:
Through estoppel an admission or representation is
rendered conclusive upon the person making it, and
cannot be denied or disproved as against the person
relying thereon.
A person, who by his deed or conduct has induced
another to act in a particular manner, is barred from
adopting an inconsistent position, attitude or course of
conduct that thereby causes loss or injury to another.58
In the case, however, the approval of the CBA and the release of
signing bonus do not necessarily mean that the Union waived its
ULP claim against the Bank during the past negotiations. After all,
the conclusion of the CBA was included in the order of the SOLE,
while the signing bonus was included in the CBA itself. Moreover,
the Union twice filed a motion for reconsideration respecting its
ULP charges against the Bank before the SOLE.
The Union Did Not Engage
In Blue-Sky Bargaining
We, likewise, do not agree that the Union is guilty of ULP for
engaging in blue-sky bargaining or making exaggerated or
unreasonable proposals.59 The Bank failed to show that the
economic demands made by the Union were exaggerated or
unreasonable. The minutes of the meeting show that the Union
based its economic proposals on data of rank and file employees
and the prevailing economic benefits received by bank employees
from other foreign banks doing business in the Philippines and
other branches of the Bank in the Asian region.
In sum, we find that the public respondent did not act with grave
abuse of discretion amounting to lack or excess of jurisdiction
when it issued the questioned order and resolutions. While the
approval of the CBA and the release of the signing bonus did not
estop the Union from pursuing its claims of ULP against the Bank,
we find the latter did not engage in ULP. We, likewise, hold that
the Union is not guilty of ULP.
IN LIGHT OF THE FOREGOING, the October 29, 1993 Order
and December 16, 1993 and February 10, 1994 Resolutions of
then Secretary of Labor Nieves R. Confesor are AFFIRMED. The
Petition is hereby DISMISSED.
SO ORDERED
G.R. Nos. 158930-31 March 3, 2008
UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED
INDUSTRIES UNIONS - KILUSANG MAYO UNO (UFE-DFA-
KMU), petitioner,
vs.
NESTL PHILIPPINES, INCORPORATED, respondent.
x------------------------------------------x
G.R. Nos. 158944-45 March 3, 2008
NESTL PHILIPPINES, INCORPORATED, petitioner,
vs.
UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED
INDUSTRIES UNIONS - KILUSANG MAYO UNO (UFE-DFA-
KMU), respondent.
RESOLUTION
CHICO-NAZARIO, J.:
On 22 August 2006, this Court promulgated its Decision1 in the
above-entitled cases, the dispositive part of which reads
WHEREFORE, in view of the foregoing, the Petition in
G.R. No. 158930-31 seeking that Nestl be declared to
have committed unfair labor practice in allegedly setting
 a precondition to bargaining is DENIED. The Petition in
G.R. No. 158944-45, however, is PARTLY GRANTED
in that we REVERSE the ruling of the Court of Appeals
in CA G.R. SP No. 69805 in so far as it ruled that the
Secretary of the DOLE gravely abused her discretion in
failing to confine her assumption of jurisdiction power
over the ground rules of the CBA negotiations; but the
ruling of the Court of Appeals on the inclusion of the
Retirement Plan as a valid issue in the collective
bargaining negotiations between UFE-DFA-KMU and
Nestl is AFFIRMED. The parties are directed to
resume negotiations respecting the Retirement Plan
and to take action consistent with the discussions
hereinabove set forth. No costs.
Subsequent thereto, Nestl Philippines, Incorporated (Nestl)
filed a Motion for Clarification2 on 20 September 2006; while
Union of Filipro Employees Drug, Food and Allied Industries
Union Kilusang Mayo Uno (UFE-DFA-KMU), on 21 September
2006, filed a Motion for Partial Reconsideration3 of the foregoing
Decision.
The material facts of the case, as determined by this Court in its
Decision, may be summarized as follows:
UFE-DFA-KMU was the sole and exclusive bargaining agent of
the rank-and-file employees of Nestl belonging to the latters
Alabang and Cabuyao plants. On 4 April 2001, as the existing
collective bargaining agreement (CBA) between Nestl and UFE-
DFA-KMU4 was to end on 5 June 2001,5 the Presidents of the
Alabang and Cabuyao Divisions of UFE-DFA-KMU informed
Nestl of their intent to "open [our] new Collective Bargaining
Negotiation for the year 2001-2004 x x x as early as June
2001."6 In response thereto, Nestl informed them that it was also
preparing its own counter-proposal and proposed ground rules to
govern the impending conduct of the CBA negotiations.
On 29 May 2001, in another letter to the UFE-DFA-KMU
(Cabuyao Division only)7, Nestl reiterated its stance that
"unilateral grants, one-time company grants, company-initiated
policies and programs, which include, but are not limited to the
Retirement Plan, Incidental Straight Duty Pay and Calling Pay
Premium, are by their very nature not proper subjects of CBA
negotiations and therefore shall be excluded therefrom."8
Dialogue between the company and the union thereafter ensued.
On 14 August 2001, however, Nestl requested9 the National
Conciliation and Mediation Board (NCMB), Regional Office No.
IV, Imus, Cavite, to conduct preventive mediation proceedings
between it and UFE-DFA-KMU owing to an alleged impasse in
said dialogue; i.e., that despite fifteen (15) meetings between
them, the parties failed to reach any agreement on the proposed
CBA.
Conciliation proceedings proved ineffective, though, and the UFE-
DFA-KMU filed a Notice of Strike10 on 31 October 2001 with the
NCMB, complaining, in essence, of a bargaining deadlock
pertaining to economic issues, i.e., "retirement (plan), panel
composition, costs and attendance, and CBA".11 On 07 November
2001, anotherNotice of Strike12 was filed by the union, this time
predicated on Nestls alleged unfair labor practices, that is,
bargaining in bad faith by setting pre-conditions in the ground
rules and/or refusing to include the issue of the Retirement Plan in
the CBA negotiations. The result of a strike vote conducted by the
members of UFE-DFA-KMU yielded an overwhelming approval of
the decision to hold a strike.13
On 26 November 2001, prior to holding the strike, Nestl filed with
the DOLE a Petition for Assumption of Jurisdiction,14 praying for
the Secretary of the DOLE, Hon. Patricia A. Sto. Tomas, to
assume jurisdiction over the current labor dispute in order to
effectively enjoin any impending strike by the members of the
UFE-DFA-KMU at the Nestls Cabuyao Plant in Laguna.
On 29 November 2001, Sec. Sto. Tomas issued an
Order15 assuming jurisdiction over the subject labor dispute. The
fallo of said Order states that:
CONSIDERING THE FOREGOING, this Office hereby
assumes jurisdiction over the labor dispute at the
Nestl Philippines, Inc. (Cabuyao Plant) pursuant to
Article 263 (g) of the Labor Code, as amended.
Accordingly, any strike or lockout is hereby enjoined.
The parties are directed to cease and desist from
committing any act that might lead to the further
deterioration of the current labor relations situation.
The parties are further directed to meet and convene
for the discussion of the union proposals and company
counter-proposals before the National Conciliation and
Mediation Board (NCMB) who is hereby designated as
the delegate/facilitator of this Office for this purpose.
The NCMB shall report to this Office the results of this
attempt at conciliation and delimitation of the issues
within thirty (30) days from the parties receipt of this
Order, in no case later than December 31, 2001. If no
settlement of all the issues is reached, this Office shall
thereafter define the outstanding issues and order the
filing of position papers for a ruling on the merits.
UFE-DFA-KMU sought reconsideration16 of the above but
nonetheless moved for additional time to file its position paper as
directed by the Assumption of Jurisdiction Order.
On 14 January 2002, Sec. Sto. Tomas denied said motion for
reconsideration.
On 15 January 2002, despite the order enjoining the conduct of
any strike or lockout and conciliation efforts by the NCMB, the
employee members of UFE-DFA-KMU at Nestls Cabuyao Plant
went on strike.
In view of the above, in an Order dated on 16 January 2002, Sec.
Sto. Tomas directed: (1) the members of UFE-DFA-KMU to
return-to-work within twenty-four (24) hours from receipt of such
Order; (2) Nestl to accept back all returning workers under the
same terms and conditions existing preceding to the strike; (3)
both parties to cease and desist from committing acts inimical to
the on-going conciliation proceedings leading to the further
deterioration of the situation; and (4) the submission of their
respective position papers within ten (10) days from receipt
thereof. But notwithstanding the Return-to-Work Order, the
members of UFE-DFA-KMU continued with their strike, thus,
prompting Sec. Sto. Tomas to seek the assistance of the
Philippine National Police (PNP) for the enforcement of said
order.
On 7 February 2002, Nestl and UFE-DFA-KMU filed their
respective position papers. Nestl addressed several issues
concerning economic provisions of the CBA as well as the non-
inclusion of the issue of the Retirement Plan in the collective
bargaining negotiations. On the other hand, UFE-DFA-KMU
limited itself to the issue of whether or not the retirement plan was
a mandatory subject in its CBA negotiations.
On 11 February 2002, Sec. Sto. Tomas allowed UFE-DFA-KMU
the chance to tender its stand on the other issues raised by
Nestl but not covered by its initial position paper by way of
a Supplemental Position Paper.
UFE-DFA-KMU, instead of filing the above-mentioned
supplement, filed several pleadings, one of which was
aManifestation with Motion for Reconsideration of the Order dated
February 11, 2002 assailing the Order of February 11, 2002 for
supposedly being contrary to law, jurisprudence and the evidence
on record. The union posited that Sec. Sto. Tomas "could only
assume jurisdiction over the issues mentioned in the notice of
strike subject of the current dispute,"17 and that the Amended
Notice of Strike it filed did not cite, as one of the grounds, the
CBA deadlock.
On 8 March 2002, Sec. Sto. Tomas denied the motion for
reconsideration of UFE-DFA-KMU.
Thereafter, UFE-DFA-KMU filed a Petition for Certiorari18 before
the Court of Appeals, alleging that Sec. Sto. Tomas committed
grave abuse of discretion amounting to lack or excess of
jurisdiction when she issued the Orders of 11 February 2002 and
8 March 2002.
In the interim, in an attempt to finally resolve the crippling labor
dispute between the parties, then Acting Secretary of the DOLE,
Hon. Arturo D. Brion, came out with an Order19 dated 02 April
2002, ruling that:
a. we hereby recognize that the present Retirement
Plan at the Nestl Cabuyao Plant is a unilateral grant
that the parties have expressly so recognized
subsequent to the Supreme Courts ruling in Nestl,
Phils. Inc. vs. NLRC, G.R. No. 90231, February 4,
1991, and is therefore not a mandatory subject for
bargaining;
b. the Unions charge of unfair labor practice against
the Company is hereby dismissed for lack of merit;
c. the parties are directed to secure the best applicable
terms of the recently concluded CBSs between Nestl
Phils. Inc. and it eight (8) other bargaining units, and to
adopt these as the terms and conditions of the Nestl
Cabuyao Plant CBA;
d. all union demands that are not covered by the
provisions of the CBAs of the other eight (8) bargaining
units in the Company are hereby denied;
e. all existing provisions of the expired Nestl Cabuyao
Plant CBA without any counterpart in the CBAs of the
other eight bargaining units in the Company are hereby
ordered maintained as part of the new Nestl Cabuyao
Plant CBA;
f. the parties shall execute their CBA within thirty (30)
days from receipt of this Order, furnishing this Office a
copy of the signed Agreement;
g. this CBA shall, in so far as representation is
concerned, be for a term of five (5) years; all other
provisions shall be renegotiated not later than three (3)
years after its effective date which shall be December
5, 2001 (or on the first day six months after the
expiration on June 4, 2001 of the superceded CBA).
UFE-DFA-KMU moved to reconsider the aforequoted ruling, but
such was subsequently denied on 6 May 2002.
For the second time, UFE-DFA-KMU went to the Court of Appeals
via another Petition for Certiorari seeking to annul the Orders of
02 April 2002 and 06 May 2002 of the Secretary of the DOLE,
having been issued in grave abuse of discretion amounting to lack
or excess of jurisdiction.
On 27 February 2003, the appellate court promulgated its
Decision on the twin petitions for certiorari, ruling entirely in favor
of UFE-DFA-KMU, the dispositive part thereof stating
WHEREFORE, in view of the foregoing, there being
grave abuse on the part of the public respondent in
issuing all the assailed Orders, both petitions are
hereby GRANTED. The assailed Orders dated
February 11, 2001, and March 8, 2001 (CA-G.R. SP
No. 69805), as well as the Orders dated April 2, 2002
and May 6, 2002 (CA-G.R. SP No. 71540) of the
Secretary of Labor and Employment in the case
entitled: "IN RE: LABOR DISPUTE AT NESTLE
PHILIPPINES INC. (CABUYAO FACTORY)" under OS-
AJ-0023-01 (NCMB-RBIV-CAV-PM-08-035-01, NCMB-
RBIV-LAG-NS-10-037-01, NCMB-RBIV-LAG-NS-11-10-
03901) are hereby ANNULLED and SET ASIDE.
Private respondent is hereby directed to resume the
CBA negotiations with the petitioner.20
Both parties appealed the aforequoted ruling. Nestl essentially
assailed that part of the decision finding the DOLE Secretary to
have gravely abused her discretion amounting to lack or excess
of jurisdiction when she ruled that the Retirement Plan was not a
valid issue to be tackled during the CBA negotiations; UFE-DFA-
KMU, in contrast, questioned the appellate courts decision finding
Nestl free and clear of any unfair labor practice.
Since the motions for reconsideration of both parties were denied
by the Court of Appeals in a joint Resolution dated 27 June 2003,
UFE-DFA-KMU and Nestl separately filed the instant Petitions
for Review on Certiorariunder Rule 45 of the Rules of Court, as
amended.
G.R. No. 158930-31 was filed by UFE-DFA-KMU against Nestl
seeking to reverse the Court of Appeals Decision insofar as the
appellate courts failure to find Nestl guilty of unfair labor practice
was concerned; while G.R. No. 158944-45 was instituted by
Nestl against UFE-DFA-KMU likewise looking to annul and set
aside the part of the Court of Appeals Decision declaring that: 1)
the Retirement Plan was a valid collective bargaining issue; and
2) the scope of the power of the Secretary of the Department of
Labor and Employment (DOLE) to assume jurisdiction over the
labor dispute between UFE-DFA-KMU and Nestl was limited to
the resolution of questions and matters pertaining merely to the
ground rules of the collective bargaining negotiations to be
conducted between the parties.
On 29 March 2004, this Court resolved21 to consolidate the two
petitions inasmuch as they (1) involved the same set of parties;
(2) arose from the same set of circumstances, i.e., from several
Orders issued by then DOLE Secretary, Hon. Patricia A. Sto.
Tomas, respecting her assumption of jurisdiction over the labor
dispute between Nestl and UFE-DFA-KMU, Alabang and
Cabuyao Divisions;22 and (3) similarly assailed the same Decision
and Resolution of the Court of Appeals.
After giving due course to the instant consolidated petitions, this
Court promulgated on 22 August 2006 its Decision, now subject
of UFE-DFA-KMUs Motion for Partial Reconsideration and
Nestls Motion for Clarification.
In its Motion for Partial Reconsideration, UFE-DFA-KMU would
have this Court address and discuss anew points or arguments
that have basically been passed upon in this Courts 22 August
2006 Decision. Firstly, it questions this Courts finding that Nestl
was not guilty of unfair labor practice, considering that the
transaction speaks for itself,i.e, res ipsa loquitor. And made an
issue again is the question of whether or not the DOLE Secretary
can take cognizance of matters beyond the amended Notice of
Strike.
As to Nestls prayer for clarification, the corporation seeks
elucidation respecting the dispositive part of this Courts Decision
directing herein parties to resume negotiations on the retirement
compensation package of the concerned employees. It posits that
"[i]n directing the parties to negotiate the Retirement Plan, the
Honorable Court x x x might have overlooked the fact that here,
the Secretary of Labor had already assumed jurisdiction over the
entire 2001-2004 CBA controversy x x x."
As to the charge of unfair labor practice:
The motion does not put forward new arguments to substantiate
the prayer for reconsideration of this Courts Decision except for
the sole contention that the transaction speaks for itself, i.e., res
ipsa loquitor. Nonetheless, even a perusal of the arguments of
UFE-DFA-KMU in its petition and memorandum in consideration
of the point heretofore raised will not convince us to change our
disposition of the question of unfair labor practice. UFE-DFA-KMU
argues therein that Nestls "refusal to bargain on a very
important CBA economic provision constitutes unfair labor
practice."23 It explains that Nestl set as a precondition for the
holding of collective bargaining negotiations the non-inclusion of
the issue of Retirement Plan. In its words, "respondent Nestl
Phils., Inc. insisted that the Union should first agree that the
retirement plan is not a bargaining issue before respondent Nestl
would agree to discuss other issues in the CBA." 24 It then
concluded that "the Court of Appeals committed a legal error in
not ruling that respondent company is guilty of unfair labor
practice. It also committed a legal error in failing to award
damages to the petitioner for the ULP committed by the
respondent."25
We are unconvinced still.
The duty to bargain collectively is mandated by Articles 252 and
253 of the Labor Code, as amended, which state
ART. 252. Meaning of duty to bargain collectively.
The duty to bargain collectively means the performance
of a mutual obligation to meet and convene promptly
and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours,
of work and all other terms and conditions of
employment including proposals for adjusting any
grievances or questions arising under such agreement
and executing a contract incorporating such
agreements if requested by either party but such duty
does not compel any party to agree to a proposal or to
make any concession.
ART. 253. Duty to bargain collectively when there exists
a collective bargaining agreement. When there is a
collective bargaining agreement, the duty to bargain
collectively shall also mean that neither party shall
terminate nor modify such agreement during its lifetime.
However, either party can serve a written notice to
terminate or modify the agreement at least sixty (60)
days prior to its expiration date. It shall be the duty of
both parties to keep the status quo and to continue in
full force and effect the terms of conditions of the
existing agreement during the 60-day period and/or
until a new agreement is reached by the parties.
Obviously, the purpose of collective bargaining is the reaching of
an agreement resulting in a contract binding on the parties; but
the failure to reach an agreement after negotiations have
continued for a reasonable period does not establish a lack of
good faith. The statutes invite and contemplate a collective
bargaining contract, but they do not compel one. The duty to
bargain does not include the obligation to reach an agreement.
The crucial question, therefore, of whether or not a party has met
his statutory duty to bargain in good faith typically turns on the
facts of the individual case. As we have said, there is no per
se test of good faith in bargaining. Good faith or bad faith is an
inference to be drawn from the facts. To some degree, the
question of good faith may be a question of credibility.
The effect of an employers or a unions individual actions is not
the test of good-faith bargaining, but the impact of all such
occasions or actions, considered as a whole, and the inferences
fairly drawn therefrom collectively may offer a basis for the finding
of the NLRC.26
For a charge of unfair labor practice to prosper, it must be shown
that Nestl was motivated by ill will, "bad faith, or fraud, or was
oppressive to labor, or done in a manner contrary to morals, good
customs, or public policy, and, of course, that social humiliation,
wounded feelings, or grave anxiety resulted x x x"27 in disclaiming
unilateral grants as proper subjects in their collective bargaining
negotiations. While the law makes it an obligation for the
employer and the employees to bargain collectively with each
other, such compulsion does not include the commitment to
precipitately accept or agree to the proposals of the other. All it
contemplates is that both parties should approach the negotiation
with an open mind and make reasonable effort to reach a
common ground of agreement.
Herein, the union merely bases its claim of refusal to bargain on a
letter28 dated 29 May 2001 written by Nestl where the latter laid
down its position that "unilateral grants, one-time company
grants, company-initiated policies and programs, which include,
but are not limited to the Retirement Plan, Incidental Straight Duty
Pay and Calling Pay Premium, are by their very nature not proper
subjects of CBA negotiations and therefore shall be excluded
therefrom." But as we have stated in this Courts Decision, said
letter is not tantamount to refusal to bargain. In thinking to exclude
the issue of Retirement Plan from the CBA negotiations, Nestl,
cannot be faulted for considering the same benefit as unilaterally
granted, considering that eight out of nine bargaining units have
allegedly agreed to treat the Retirement Plan as a unilaterally
granted benefit. This is not a case where the employer exhibited
an indifferent attitude towards collective bargaining, because the
negotiations were not the unilateral activity of the bargaining
representative. Nestls desire to settle the dispute and proceed
with the negotiation being evident in its cry for compulsory
arbitration is proof enough of its exertion of reasonable effort at
good-faith bargaining.
In the case at bar, Nestle never refused to bargain collectively
with UFE-DFA-KMU. The corporation simply wanted to exclude
the Retirement Plan from the issues to be taken up during CBA
negotiations, on the postulation that such was in the nature of a
unilaterally granted benefit. An employers steadfast insistence to
exclude a particular substantive provision is no different from a
bargaining representatives perseverance to include one that they
deem of absolute necessity. Indeed, an adamant insistence on a
bargaining position to the point where the negotiations reach an
impasse does not establish bad faith.[fn24 p.10] It is but natural
that at negotiations, management and labor adopt positions or
make demands and offer proposals and counter-proposals. On
account of the importance of the economic issue proposed by
UFE-DFA-KMU, Nestle could have refused to bargain with the
former but it did not. And the managements firm stand against
the issue of the Retirement Plan did not mean that it was
bargaining in bad faith. It had a right to insist on its position to the
point of stalemate.
The foregoing things considered, this Court replicates below its
clear disposition of the issue:
The concept of "unfair labor practice" is defined by the
Labor Code as:
ART. 247. CONCEPT OF UNFAIR LABOR PRACTICE
AND PROCEDURE FOR PROSECUTION THEREOF.
Unfair labor practices violate the constitutional right of
workers and employees to self-organization, are
inimical to the legitimate interests of both labor and
management, including their right to bargain collectively
and otherwise deal with each other in an atmosphere of
freedom and mutual respect, disrupt industrial peace
and hinder the promotion of healthy and stable labor-
management relations.
x x x x.
The same code likewise provides the acts constituting
unfair labor practices committed by employers, to wit:
ART. 248. UNFAIR LABOR PRACTICES OF
EMPLOYERS. It shall be unlawful for an employer to
commit any of the following unfair labor practices:
(a) To interfere with, restrain or coerce
employees in the exercise of their right to
self-organization;
(b) To require as a condition of employment
that a person or an employee shall not join a
labor organization or shall withdraw from one
to which he belongs;
(c) To contract out services or functions being
performed by union members when such will
interfere with, restrain or coerce employees in
the exercise of their right to self-organization;
(d) To initiate, dominate, assist or otherwise
interfere with the formation or administration
of any labor organization, including the giving
of financial or other support to it or its
organizers or supporters;
(e) To discriminate in regard to wages, hours
of work, and other terms and conditions of
employment in order to encourage or
discourage membership in any labor
organization. Nothing in this Code or in any
other law shall stop the parties from requiring
membership in a recognized collective
bargaining agent as a condition for
employment, except those employees who
are already members of another union at the
time of the signing of the collective bargaining
agreement.
Employees of an appropriate collective
bargaining unit who are not members of the
recognized collective bargaining agent may
be assessed a reasonable fee equivalent to
the dues and other fees paid by members of
the recognized collective bargaining agent, if
such non-union members accept the benefits
under the collective agreement. Provided,
That the individual authorization required
under Article 242, paragraph (o) of this Code
shall not apply to the nonmembers of the
recognized collective bargaining agent; [The
article referred to is 241, not 242. CAA]
(f) To dismiss, discharge, or otherwise
prejudice or discriminate against an
employee for having given or being about to
give testimony under this Code;
(g) To violate the duty to bargain
collectively as prescribed by this Code;
(h) To pay negotiation or attorneys fees to
the union or its officers or agents as part of
the settlement of any issue in collective
bargaining or any other dispute; or
(i) To violate a collective bargaining
agreement.
The provisions of the preceding paragraph
notwithstanding, only the officers and agents
of corporations associations or partnerships
who have actually participated, authorized or
ratified unfair labor practices shall be held
criminally liable. (Emphasis supplied.)
Herein, Nestl is accused of violating its duty to bargain
collectively when it purportedly imposed a pre-condition
to its agreement to discuss and engage in collective
bargaining negotiations with UFE-DFA-KMU.
A meticulous review of the record and pleadings of the
cases at bar shows that, of the two notices of strike filed
by UFE-DFA-KMU before the NCMB, it was only on the
second that the ground of unfair labor practice was
alleged. Worse, the 7 November 2001 Notice of Strike
merely contained a general allegation that Nestl
committed unfair labor practice by bargaining in bad
faith for supposedly "setting pre-condition in the ground
rules (Retirement issue)." (Notice of Strike of 7
November 2001; Annex "C" of UFE-DFA-KMU Position
Paper; DOLE original records, p. 146.) In contrast,
Nestl, in its Position Paper, did not confine itself to the
issue of the non-inclusion of the Retirement Plan but
extensively discussed its stance on other economic
matters pertaining to the CBA. It is UFE-DFA-KMU,
therefore, who had the burden of proof to present
substantial evidence to support the allegation of unfair
labor practice.
A perusal of the allegations and arguments raised by
UFE-DFA-KMU in the Memorandum (in G.R. Nos.
158930-31) will readily disclose the need for the
presentation of evidence other than its bare contention
of unfair labor practice in order to make certain the
propriety or impropriety of the ULP charge hurled
against Nestl. Under Rule XIII, Sec. 4, Book V of the
Implementing Rules of the Labor Code:
x x x. In cases of unfair labor practices, the
notice of strike shall as far as practicable,
state the acts complained of and the efforts
to resolve the dispute amicably." (Emphasis
supplied.)
In the case at bar, except for the assertion put forth by
UFE-DFA-KMU, neither the second Notice of Strike nor
the records of these cases substantiate a finding of
unfair labor practice. It is not enough that the union
believed that the employer committed acts of unfair
labor practice when the circumstances clearly negate
even a prima facie showing to warrant such a belief.
(Tiu v. National Labor Relations Commission, G.R. No.
123276, 18 August 1997, 277 SCRA 681, 688.)
There is no per se test of good faith in bargaining.
(Hongkong Shanghai Banking Corporation Employees
Union v. National Labor Relations Commission, G.R.
No. 125038, 6 November 1997, 281 SCRA 509, 518.)
Good faith or bad faith is an inference to be drawn from
the facts. (Hongkong Shanghai Banking Corporation
Employees Union v. National Labor Relations
Commission, G.R. No. 125038, 6 November 1997, 281
SCRA 509, 518.) Herein, no proof was presented to
exemplify bad faith on the part of Nestl apart from
mere allegation. Construing arguendo that the content
of the aforequoted letter of 29 May 2001 laid down a
pre-condition to its agreement to bargain with UFE-
DFA-KMU, Nestls inclusion in its Position Paper of its
proposals affecting other matters covered by the CBA
negates the claim of refusal to bargain or bargaining in
bad faith. Accordingly, since UFE-DFA-KMU failed to
proffer substantial evidence that would overcome the
legal presumption of good faith on the part of Nestl,
the award of moral and exemplary damages is
unavailing.
As to the jurisdiction of the DOLE Secretary under the
amended Notice of Strike:
This Court is not convinced by the argument raised by UFE-DFA-
KMU that the DOLE Secretary should not have gone beyond the
disagreement on the ground rules of the CBA negotiations. The
union doggedly asserts that the entire labor dispute between
herein parties concerns only the ground rules.
Lest it be forgotten, it was UFE-DFA-KMU which first alleged a
bargaining deadlock as the basis for the filing of its Notice of
Strike; and at the time of the filing of the first Notice of Strike,
several conciliation conferences had already been undertaken
where both parties had already exchanged with each other their
respective CBA proposals. In fact, during the conciliation
meetings before the NCMB, but prior to the filing of the notices of
strike, the parties had already delved into matters affecting the
meat of the collective bargaining agreement.
The Secretary of the DOLE simply relied on the Notices of Strike
that were filed by UFE-DFA-KMU as stated in her Order of 08
March 2002, to wit:
x x x The records disclose that the Union filed two
Notices of Strike. The First is dated October 31, 2001
whose grounds are cited verbatim hereunder:

Employers are accorded rights and privileges to assure

"A. Bargaining Deadlock
their self-determination and independence and
reasonable return of capital. (Capitol Medical Center,
Inc. v. Meris, G.R. No. 155098, 16 September 2005, 1. Economic issues (specify)
470 SCRA 125, 136.) This mass of privileges
comprises the so-called management prerogatives.
(Capitol Medical Center, Inc. v. Meris, G.R. No. 155098, 1. Retirement
16 September 2005, 470 SCRA 125, 136.) In this
connection, the rule is that good faith is always 2. Panel Composition
presumed. As long as the companys exercise of the
same is in good faith to advance its interest and not for
purpose of defeating or circumventing the rights of 3. Costs and Attendance
employees under the law or a valid agreement, such
exercise will be upheld. (Capitol Medical Center, Inc. v. 4. CBA"
Meris, G.R. No. 155098, 16 September 2005, 470
SCRA 125, 136.)
The second Notice of Strike is dated November 7, 2001
and the cited ground is like quoted verbatim below:
 "B. Unfair Labor Practices (specify)
Bargaining in bad faith
Setting pre-condition in the ground rules
(Retirement issue)"
Nowhere in the second Notice of Strike is it indicated that this
Notice is an amendment to and took the place of the first Notice of
Strike. In fact, our Assumption of Jurisdiction Order dated
November 29, 2001 specifically cited the two (2) Notices of Strike
without any objection on the part of the Union x x x.29
Had the parties not been at the stage where the substantive
provisions of the proposed CBA had been put in issue, the union
would not have based thereon its initial notice to strike. This Court
maintains its original position in the Decision that, based on the
Notices of Strike filed by UFE-DFA-KMU, the Secretary of the
DOLE rightly decided on matters of substance. That the union
later on changed its mind is of no moment because to give
premium to such would make the legally mandated discretionary
power of the Dole Secretary subservient to the whims of the
parties.
As to the point of clarification on the resumption of
negotiations respecting the Retirement Plan:
As for the supposed confusion or uncertainty of the dispositive
part of this Courts Decision, Nestle moves for clarification of the
statement "The parties are directed to resume negotiations
respecting the Retirement Plan and to take action consistent with
the discussion hereinabove set forth. No costs." The entire fallo of
this Courts Decision reads:
WHEREFORE, in view of the foregoing, the Petition in
G.R. No. 158930-31 seeking that Nestl be declared to
have committed unfair labor practice in allegedly setting
a precondition to bargaining is DENIED. The Petition in
G.R. No. 158944-45, however, is PARTLY GRANTED
in that we REVERSE the ruling of the Court of Appeals
in CA G.R. SP No. 69805 in so far as it ruled that the
Secretary of the DOLE gravely abused her discretion in
failing to confine her assumption of jurisdiction power
over the ground rules of the CBA negotiations; but the
ruling of the Court of Appeals on the inclusion of the
Retirement Plan as a valid issue in the collective
bargaining negotiations between UFE-DFA-KMU and
Nestl is AFFIRMED. The parties are directed to
resume negotiations respecting the Retirement Plan
and to take action consistent with the discussions
hereinabove set forth. No costs.
Nestle interprets the foregoing as an order for the parties to
resume negotiations by themselves respecting the issue of
retirement benefits due the employees of the Cabuyao Plant.
Otherwise stated, Nestle posits that the dispositive part of the
Decision directs the parties to submit to a voluntary mode of
dispute settlement.
A read-through of this Courts Decision reveals that the ambiguity
is more ostensible than real. This Courts Decision of 22 August
2006 designated marked boundaries as to the implications of the
assailed Orders of the Secretary of the DOLE. We said therein
that 1) the Retirement Plan is still a valid issue for herein parties
collective bargaining negotiations; 2) the Court of Appeals
committed reversible error in limiting to the issue of the ground
rules the scope of the power of the Secretary of Labor to assume
jurisdiction over the subject labor dispute; and 3) Nestl is not
guilty of unfair labor practice. Nowhere in our Decision did we
require parties to submit to negotiate by themselves the tenor of
the retirement benefits of the concerned employees of Nestl,
precisely because the Secretary of the DOLE had already
assumed jurisdiction over the labor dispute subject of herein
petitions. Again, we spell out what encompass the Secretarys
assumption of jurisdiction power. The Secretary of the DOLE has
been explicitly granted by Article 263(g) of the Labor Code the
authority to assume jurisdiction over a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to
the national interest, and decide the same accordingly. And, as a
matter of necessity, it includes questions incidental to the labor
dispute; that is, issues that are necessarily involved in the dispute
itself, and not just to that ascribed in the Notice of Strike or
otherwise submitted to him for resolution. In the case at bar, the
issue of retirement benefits was specifically what was presented
before the Secretary of the DOLE; hence, We reject Nestls
interpretation. Our decision is crystal and cannot be interpreted
any other way. The Secretary having already assumed jurisdiction
over the labor dispute subject of these consolidated petitions, the
issue concerning the retirement benefits of the concerned
employees must be remanded back to him for proper disposition.
All told, in consideration of the points afore-discussed and the fact
that no substantial arguments have been raised by either party,
this Court remains unconvinced that it should modify or reverse in
any way its disposition of herein cases in its earlier Decision. The
labor dispute between the Nestle and UFE-DFA-KMU has
dragged on long enough. As no other issues are availing, let this
Resolution write an ending to the protracted labor dispute
between Nestl and UFE-DFA-KMU (Cabuyao Division).
WHEREFORE, premises considered, the basic issues of the case
having been passed upon and there being no new arguments
availing, the Motion for Partial Reconsideration is hereby DENIED
WITH FINALITY for lack of merit. Let these cases be remanded
to the Secretary of the Department of Labor and Employment for
proper disposition, consistent with the discussions in this Courts
Decision of 22 August 2006 and as hereinabove set forth. No
costs.
SO ORDERED
G.R. Nos. 75700-01 August 30, 1990
LOPEZ SUGAR CORPORATION, petitioner,
vs.
FEDERATION OF FREE WORKERS, PHILIPPINE LABOR
UNION ASSOCIATION (PLUA-NACUSIP) and NATIONAL
LABOR RELATIONS COMMISSION, respondents.
Sicangco, Diaz, Ortiz and Lapak for petitioner.
Reynaldo J. Gulmatico for private respondents.
FELICIANO, J.:
In this Petition, petitioner Lopez Sugar Corporation seeks reversal cost reduction. Now that there is hope in the
of the Decision dated 2 July 1986 of public respondent National price of sugar the applicant is again faced
labor Relations Commission ("NLRC") which affirmed the decision with two major economic problems, i.e., the
of the Labor Arbiter dated 30 September 1983. The Labor Arbiter stoppage of its railway operation and the
(a) had denied petitioner's application to retrench some of its spiralling cost of production.
employees and (b) had ordered the reinstatement of twenty-seven
(27) employees and to pay them full backwages from the time of
The Applicant was forced to stop its railway
termination until actual reinstatement.
operation because the owners of the land
upon which the Applicant's railway lines
Petitioner, allegedly to prevent losses due to major economic traverse are no longer willing to allow the
problems, and exercising its privilege under Article XI, Section 2 Applicant to make further use of portions of
of its 1975-1977 Collective Bargaining Agreement ("CBA") their lands. . . .
entered into between petitioner and private respondent Philippine
Labor Union Association ("PLUA-NACUSIP"), caused the
The other economic problem that confronted
retrenchment and retirement of a number of its employees.
the Applicant is the rising cost of labor,
materials, supplies, equipment, etc. These
Thus, on 3 January 1980, petitioner filed with the Bacolod District two major economic problems the rising cost
Office of the then Ministry of Labor and Employment ("MOLE") a of production and the stoppage of its railway
combined report on retirement and application for clearance to facilities, put together pose a very serious
retrench, dated 28 December 1979, 1 affecting eighty six (86) of threat against the economic survival of the
its employees. This was docketed as NLRC Case Ne. A-217-80. Applicant. In view of this, the Applicant was
Of these eighty-six (86) employees, fifty-nine (59) were retired constrained to touch on the last phase of its
effective 1 January 1980 and twenty-eight (27) were to be cost reduction program which is the reduction
retrenched effective 16 January 1980 "in order to prevent losses." of its workforce.

Also, on 3 January 1980, private respondent Federation of Free xxx xxx xxx
Workers ("FFW"), as the certified bargaining agent of the rank-
and-file employees of petitioner, filed with the Bacolod District
The Applicant as a business proposition must
Office of the MOLE a complaint dated 27 December 1979 for
be allowed to earn income in order to survive.
unfair labor practices and recovery of union dues docketed as
This is the essence of private enterprise.
NLRC Case No. A-198-80. In said complainant, FFW claimed that
Being plagued with two major economic
the terminations undertaken by petitioner were violative of the
problems, the applicant is not expected to
security of tenure of its members and were intended to "bust" the
remain immobile. It has to react accordingly.
union and hence constituted an unfair labor practice. FFW
As many other business firms have resorted
claimed that after the termination of the services of its members,
to reduction of force in view of the present
petitioner advised 110 casuals to report to its personnel office.
economic crisis obtaining here and abroad,
FFW further argued that to justify retrenchment, serious business
the applicant was likewise compelled to do
reverses must be "actual, real and amply supported by sufficient
the same as a last alternative remedy for
and convincing evidence." FFW prayed for reinstatement of its
survival. 3
members who had been retired or retrenched.

In a decision dated 30 September 1983, 4 the Labor Arbiter

Petitioner denied having hired casuals to replace those it had
denied petitioner's application for clearance to retrench its
retired or retrenched. It explained that the announcement calling
employees on the ground that for retrenchment to be valid, the
for 110 workers to report to its personnel office was only for the
employer's losses must be serious, actual and real and must be
purpose of organizing a pool of extra workers which could be
amply supported by sufficient and convincing evidence. The
tapped whenever there were temporary vacancies by reason of
application to retire was also denied on the ground that
leaves of absence of regular workers.
petitioner's prerogative to so retire its employees was granted by
the 1975-77 collective bargaining agreement which agreement
On 22 January 1980, another report on retirement affecting an had long ago expired. Petitioner was, therefore, ordered to
additional twenty-five (25) employees effective 1 February 1980 reinstate twenty-seven retired or retrenched employees
was filed by petitioner. 2 represented by private respondent Philippine Labor Union
Association ("PLUA") and FFW and to pay them full backwages
from the time of termination until actual reinstatement.
On 3 March 1980, petitioner filed its Position Paper in NLRC Case
No. A-217-80 contending that certain economic factors
jeopardizing its very existence rendered the dismissals Both dissatisfied with the Labor Arbiter's decision, petitioner and
necessary. Petitioner explained: respondent FFW appealed the case to public respondent NLRC.
On appeal, the NLRC, finding no justifiable reason for disturbing
the decision of the Labor Arbiter, affirmed that decision on 2 July
As a business firm, the Applicant must earn
1986. 5
[a] fair return of (sic) its investment. Its
income is generated from the sales of the
Central's shares of sugar and molasses Hence, this Petition for certiorari making the following arguments:
production. It has however no control of the
selling price of both products. It is of common
1. That portions of the decision of public
knowledge that for the past years the price of
respondent NLRC dated July 2, 1986
sugar has been very low. In order to survive,
affirming the decision of Labor Arbiter
the Applicant has effected several forms of
 Ethelwoldo Ovejera dated September 30,
1983 are contrary to law and jurisprudence;
2. That said decision subject of this petition
are in some respects not supported by
evidence and self-contradictory;
3. That said decision subject of this petition
were rendered with grave abuse of discretion
and in excess of jurisdiction;
4. That the dismissals at bar are valid and
based on justifiable
grounds. 6
Petitioner contends that the NLRC acted with grave abuse of
discretion in denying its combined report on retirement and
application for clearance to retrench. Petitioner argues that under
the law, it has the right to reduce its workforce if made necessary
by economic factors which would endanger its existence, and that
for retrenchment to be valid, it is not necessary that losses
be actually sustained. The existence of valid grounds to anticipate
or expect losses would be sufficient justification to enable the
employer to take the necessary actions to prevent any threat to its
survival.
Upon the other hand the Solicitor General argued that the
Decision rendered by the Labor Arbiter and affirmed by the NLRC
is supported by substantial evidence on record; that, therefore, no
grave abuse of discretion was committed by public respondent
NLRC when it rendered that Decision.
Article 283 of the Labor Code provides:
Article 283. Closure of establishment and
reduction of personnel. The employer may
also terminate the employment of any
employee due to the installation of labor
saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of
operation of the establishment or undertaking
unless the closing is for the purpose of
cricumventing the provisions of this Title, by
serving a written notice on the workers and
the Ministry of Labor and Employer at least
one (1) month before the intended date
thereof. In case of termination due to the
installation of labor saving devices or
redundancy, the worker affected thereby shall
be entitled to a se pay equivalent to at least
his one (1) month pay or to at least one (1)
month pay for every year of service,
whichever is higher. In case of retrenchment
to prevent lossesand in cases, of closures or
cessation of operations of establishment or
undertaking not due to serious business
losses or financial reverses, the separation
pay shall be equivalent to one (1) month pay
or at least one half (1/2) month pay for every
year of service, whichever is higher. A
fraction of at least six (6) months shall be
considered one (1) whole year. (Emphasis
supplied)
In ts ordinary connotation, he phrase "to revent losses" means hat
retrenchment or termination of the services of some employees is
authorized to be undertaken by the employer sometime before the
losses anticipated are actually sustained or realized. It is not, in
other words, the intention of the lawmaker to compel the employer
to stay his hand and keep all his employees until sometime after
losses shall have in fact materialized ; 7 if such an intent were
expressly written into the law, that law may well be vulnerable to
constitutional attack as taking property from one man to give to
another. This is simple enough.
At the other end of the spectrum, it seems equally clear that not
every asserted possibility of loss is sufficient legal warrant for
reduction of personnel. In the nature of things, the possibility of
incurring losses is constantly present, in greater or lesser degree,
in the carrying on of business operations, since some, indeed
many, of the factors which impact upon the profitability or viability
of such operations may be substantially outside the control of the
employer. Thus, the difficult question is determination of when, or
under what circumstances, the employer becomes legally
privileged to retrench and reduce the number of his employees.
We consider it may be useful to sketch the general standards in
terms of which the acts of petitioner employer must be appraised.
Firstly, the losses expected should be substantial and not
merely de minimis in extent. If the loss purportedly sought to be
forestalled by retrenchment is clearly shown to be insubstantial
and inconsequential in character, the bona fide nature of the
retrenchment would appear to be seriously in question. Secondly,
the substantial loss apprehended must be reasonably imminent,
as such imminence can be perceived objectively and in good faith
by the employer. There should, in other words, be a certain
degree of urgency for the retrenchment, which is after all a drastic
recourse with serious consequences for the livelihood of the
employees retired or otherwise laid-off. Because of the
consequential nature of retrenchment, it must, thirdly, be
reasonably necessary and likely to effectively prevent the
expected losses. The employer should have taken other
measures prior or parallel to retrenchment to forestall losses, i.e.,
cut other costs than labor costs. An employer who, for instance,
lays off substantial numbers of workers while continuing to
dispense fat executive bonuses and perquisites or so-called
"golden parachutes", can scarcely claim to be retrenching in good
faith to avoid losses. To impart operational meaning to the
constitutional policy of providing "full protection" to labor, the
employer's prerogative to bring down labor costs by retrenching
must be exercised essentially as a measure of last resort, after
less drastic means e.g., reduction of both management and
rank-and-file bonuses and salaries, going on reduced time,
improving manufacturing efficiencies, trimming of marketing and
advertising costs, etc. have been tried and found wanting.
Lastly, but certainly not the least important, alleged if already
realized, and the expected imminent losses sought to be
forestalled, must be proved by sufficient and convincing evidence.
The reason for requiring this quantum of proof is readily apparent:
any less exacting standard of proof would render too easy the
abuse of this ground for termination of services of employees.
In Garcia v. National Labor Relations Commissions, 8 the Court
said:
. . . But it is essentially required that the alleged losses in
business operations must be prove[n] (National Federation of
Labor Unions [NAFLU] vs. Ople, 143 SCRA 124
[1986]). Otherwise, said ground for termination would be
susceptible to abuse by scheming employers who might be
merely feigning business losses or reverses in their business
ventures in order to ease out employees. (Emphasis supplied) 9
Whether or not an employer would imminently suffer serious or
substantial losses for economic reasons is essentially a question
of fact for the Labor Arbiter and the NLRC to determine. In the
instant case, the Labor Arbiter found no sufficient and convincing
evidence to sustain petitioner's essential contention that it was
acting in order to prevent substantial and serious losses. The
Labor Arbiter said:
There is no question that an employer may
reduce its work force to prevent losses,
however, these losses must be serious,
actual and real. In the instant case, even
assuming arguendo that applicant company
was, in fact, surrounded by the major
economic problems stated earlier, the
question may be asked will it suffer
serious losses as a result of the said
economic problems? We find the answer to
be negative. We have scanned the records
but failed to find evidence submitted to show
that applicant company would suffer serious
business losses or reverses as a
consequence of the alleged major economic
problems. In fact, applicant company
asseverated that these problems
only threatens its survival, hence, it had to
reduce its work force. Another thing, while
applicant company was retrenching its
regular employees, it also hired the services
of casuals. This militated its claim to reduce
its work force to set up cost reduction. It must
be stated that settled is the rule that serious
business losses or reverses must be actual,
real and amply supported by sufficient and
convincing evidence. 10 (Emphasis supplied)
We are in principle bound by such findings in
accordance with well-established jurisprudence that the
factual findings of labor administrative officials, if
supported by substantial evidence, are entitled not only
to great respect but even to finality, 11 unless, indeed,
petitioner is able to show that the Labor Arbiter and the
NLRC simply and arbitrarily disregarded evidence
before them or had misapprehended evidence of such
a nature as to compel a contrary conclusion if properly
appreciated.
The submissions made by petitioner in this respect are basically
that from the crop year 1975-1976 to the crop year 1980-981, the
amount of cane deliveries made to petitioner Central was
declining and that the degree of utilization of the mill's capacity
and the sugar recovery from the cane actually processed, were
similarly declining. 12 Petitioner also argued that the competition
among the existing sugar mills for the limited supply of sugar cane
was lively and that such competition resulted in petitioner having
to close approximately thirty-eight (38) of its railroad lines by
the end of 1979. 13According to the petitioner, the cost of
producing one (1) picul of sugar during the same period (i.e., from
crop year 1976-1977 to crop year 1979-1980) increased from
P69.97 to P93.11.
The principal difficulty with petitioner's case as above presented
was that no proof of actual declining gross and net revenues was
submitted. No audited financial statements showing the financial
condition of petitioner corporation during the above mentioned
crop years were submitted. Since financial statements audited by
independent external auditors constitute the normal method of
proof of the profit and loss performance of a company, it is not
easy to understand why petitioner should have failed to submit
such financial statements.
Moreover, while petitioner made passing reference to cost
reduction measures it had allegedly undertaken, it was, once
more, a fairly conspicuous failure to specify the cost-reduction
measures actually undertaken in good faith before resorting to
retrenchment. Upon the other hand, it appears from the record
that petitioner, after reducing its work force, advised 110 casual
workers to register with the company personnel officer as extra
workers. Petitioner, as earlier noted, argued that it did not actually
hire casual workers but that it merely organize(d] a pool of "extra
workers" from which workers could be drawn whenever vacancies
occurred by reason of regular workers going on leave of absence.
Both the Labor Arbiter and the NLRC did not accord much credit
to petitioner's explanation but petitioner has not shown that the
Labor Arbiter and the NLRC were merely being arbitrary and
capricious in their evaluation. We note also that petitioner did not
claim that the retrenched and retired employees were brought into
the "pool of extra workers" rather than new casual workers.
Petitioner next contends that the NLRC committed grave abuse of
discretion in affirming the ruling of the Labor Arbiter that the
retirements effected by petitioner were na valid since the basis
therefor, i.e. Article XI Section 2 of the 1975-1977 CBA, had by
then already expired and was thus no longer enforceable or
operative. 14 Article XI, 2 of the CBA provides:
2. Section 2. Any employee may apply for
after having rendered the of at least eighteen
(18) year of service to the COMPANY. The
COMPANY, as a right , may retire any
employee who has rendered twenty (20)
years of service, or has reached the age of
sixty (60) years. Employees who are
physically incapacitated to continue to work in
the COMPANY upon certification of the
COMPANY Physician, shall be entitled to a
separation pay equivalent to the retirement
benefits herein provided for that may have
accrued. The heirs or surviving legally
married spouse of the deceased employee
shall be granted by the COMPANY the
amount equivalent to the accrued retirement
benefit of the deceased employee at the time
of his death." 15 (Emphasis supplied)
Petitioner argues that the CBA was "extended" not merely by
implication, but by reciprocal acts in the sense that even after
the CBA had expired, petitioner continued to give, and the
workers continued to receive, the benefits and exercise the
prerogatives provided therein. Under these circumstances,
petitioner urges, the employees are estopped from denying the
extended effectivity of the CBA.
The Solicitor General, as well as private respondents, argue
basically that petitioner's right to retire its employees was
coterminous with the life of the CBA.
On this point, we must find for petitioner. Although the CBA
expired on 31 December 1977, it continued to have legal effects
as between the parties until a new CBA had been negotiated and
entered into. This proposition finds legal support in Article 253 of
the Labor Code, which provides:
 Article 253 Duty to bargain collectively Acceptance of those
when there exists a collective bargaining benefits would not
agreement. When there is a collective amount to estoppel. The
bargaining agreement, the duty to bargain reason is plain. Employer
collectively shall also mean that neither party and employee,
shall terminate nor modify such agreement obviously, do not stand
during its lifetime. However, either party can on the same footing The
serve a written notice to terminate or modify employer drove the
the agreement at least sixty (60) days prior to employee to the wall.
its expiration date. It shall be the duty of both The latter must have to
parties to keep the status quo and to continue get hold of money.
in full force and effect the terms and Because, out of job, he
conditions of the existing agreement during had to face the harsh
the 60-day period and/or until a new necessities of life. He
agreement is reached by the thus found himself in no
parties. (Emphasis supplied) position to resist money
proffered. His, then, is a
case of adherence, not
Accordingly, in the instant case, despite the lapse of the formal
of choice. One thing
effectivity of the CBA by virtue of its own provisions, the law
sure, however, is that
considered the same as continuing in force and effect until a new
petitioners did not relent
CBA shall have been validly executed. Hence, petitioner acted
their claim. They pressed
within legal bounds when it decided to retire several employees in
it. They are deemed not
accordance with the CBA. That the employees themselves
to have waived any of
similarly acted in accordance with the CBA is plain from the
their rights. Renuntiatio
record. Even after the expiration of the CBA, petitioner's
non
employees continued to receive the benefits and enjoy the
praesumitur (Emphasis
privileges granted therein. They continued to avail of vacation and
supplied)
sick leaves as computed in accordance with Articles VII and VIII
of the CBA. They also continued to avail of medical and dental aid
under Article IX, death aid and bereavement leave under Articles We conclude that because the attempted retrenchment on the
X and XIV, insurance coverage under Article XVI and housing part of the petitioner was legally ineffective, all retrenched
allowance under Article XVIII. Seventeen (17) employees even employees should be reinstated and backwages paid them
availed of Section XI (dealing with retirement) when they corresponding to a period of three (3) years without qualification
voluntarily retired between 1 January 1978 and 31 December or deduction, in accordance with the three-year rule laid down in a
1980 and received retirement pay computed on the basis of long line of cases. 17 In the case of employees who had received
Section 3 of the same article. If the workers chose to avail of the payments for which they had executed quitclaims, the amount of
CBA despite its expiration, equity if not the law-dictates that the such payments shall be deducted from the backwages due to
employer should likewise be able to invoke the CBA. them. Where reinstatement is no longer possible because the
positions they had previously filled are no longer in existence,
petitioner shall pay backwages plus, in lieu of reinstatement,
The fact that several workers signed quitclaims will not by itself
separation pay in the amount of one-month's pay for every year of
bar them from joining in the complaint. Quitclaims executed by
service including the three (3) year-period of putative service for
laborers are commonly frowned upon as contrary to public policy
which backwages will be paid. Upon the other hand, we find valid
and ineffective to bar claims for the full measure of the worker's
the retirement of those employees who were retired by petitioner
legal rights. In AFP Mutual Benefit Association, Inc. v. AFP-MBAI-
pursuant to the applicable provisions of the CBA.
EU, 16 the Court held:

WHEREFORE, the Petition for Certiorari is partially GRANTED

In labor jurisprudence, it is well establish that
due course and the Decision dated 2 July 1986 of the public
quitclaims and/or complete releases
respondent NLRC is hereby MODIFIED to the extent that it had
executed by the employees do not estop
affirmed that portion of the Decision of the Labor Arbiter dated 30
them from pursuing their claims arising from
September 1983 ordering the reinstatement judgment of
the unfair labor practice of the employer. The
employees who had been retired by petitioner under the
basic reason for this is that such
applicable provisions of the CBA. Except as so modified, the
quitclaimants and/or complete releases are
Decision of the NLRC is hereby AFFIRMED. No pronouncement
against public policy and, therefore, null and
as to costs.
void. The acceptance of termination pay does
not divest a laborer of the right to prosecute
his employer for unfair labor practice SO ORDERED
acts. (Cario vs. ACCFA, L-19808,
September 29, 1966, 18 SCRA 183;
Philippine Sugar Institute vs. CIR, L-13475,
September 29, 1960, 109 Phil. 452; Mercury
Drug Co. vs. CIR, L-23357, April 30, 1974, 56 G.R. No. 160828 August 9, 2010
SCRA 694, 704)
PICOP RESOURCES, INCORPORATED (PRI), Petitioner,
In the Cario case, supra, the Supreme vs.
Court, speaking thru Justice Sanchez, said: ANACLETO L. TAECA, GEREMIAS S. TATO, JAIME N.
CAMPOS, MARTINIANO A. MAGAYON, JOSEPH B. BALGOA,
MANUEL G. ABUCAY, MOISES M. ALBARAN, MARGARITO
G. ALICANTE, JERRY ROMEO T. AVILA, LORENZO D.
CANON, RAUL P. DUERO, DANILO Y. ILAN, MANUEL M.
MATURAN, JR., LUISITO R. POPERA, CLEMENTINO C.
QUIMAN, ROBERTO Q. SILOT, CHARLITO D. SINDAY,
REMBERT B. SUZON ALLAN J. TRIMIDAL, and NAMAPRI-
SPFL, Respondents.
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court seeking the reversal of the Decision1 dated July
25, 2003 and Resolution2 dated October 23, 2003 of the Court of
Appeals in CA-G.R. SP No. 71760, setting aside the Resolutions
dated October 8, 20013 and April 29, 20024 of the National Labor
Relations Commission in NLRC CA No. M-006309-2001 and
reinstating the Decision5 dated March 16, 2001 of the Labor
Arbiter.
The facts, as culled from the records, are as follows:
On February 13, 2001, respondents Anacleto Taeca, Loreto
Uriarte, Joseph Balgoa, Jaime Campos, Geremias Tato,
Martiniano Magayon, Manuel Abucay and fourteen (14) others
filed a Complaint for unfair labor practice, illegal dismissal and
money claims against petitioner PICOP Resources, Incorporated
(PRI), Wilfredo Fuentes (in his capacity as PRI's Vice
President/Resident Manager), Atty. Romero Boniel (in his
capacity as PRI's Manager of Legal/Labor), Southern Philippines
Federation of Labor (SPFL), Atty. Wilbur T. Fuentes (in his
capacity as Secretary General of SPFL), Pascasio Trugillo (in his
capacity as Local President of Nagkahiusang Mamumuo sa
PICOP Resources, Inc.- SPFL [NAMAPRI-SPFL]) and Atty.
Proculo Fuentes, Jr.6 (in his capacity as National President of
SPFL).
Respondents were regular rank-and-file employees of PRI
and bona fide members of Nagkahiusang Mamumuo saPRI
Southern Philippines Federation of Labor (NAMAPRI-SPFL),
which is the collective bargaining agent for the rank-and-file
employees of petitioner PRI.
PRI has a collective bargaining agreement (CBA) with NAMAPRI-
SPFL for a period of five (5) years from May 22, 1995 until May
22, 2000.
The CBA contained the following union security provisions:
Article II- Union Security and Check-Off
Section 6. Maintenance of membership.
6.1 All employees within the appropriate bargaining
unit who are members of the UNION at the time of
the signing of this AGREEMENT shall, as a
condition of continued employment by the
COMPANY, maintain their membership in the
UNION in good standing during the effectivity of
this AGREEMENT.
6.2 Any employee who may hereinafter be employed to
occupy a position covered by the bargaining unit shall
be advised by the COMPANY that they are required to
file an application for membership with the UNION
within thirty (30) days from the date his appointment
shall have been made regular.
6.3 The COMPANY, upon the written request of the
UNION and after compliance with the requirements
of the New Labor Code, shall give notice of
termination of services of any employee who shall
fail to fulfill the condition provided in Section 6.1
and 6.2 of this Article, but it assumes no obligation to
discharge any employee if it has reasonable grounds to
believe either that membership in the UNION was not
available to the employee on the same terms and
conditions generally applicable to other members, or
that membership was denied or terminated for reasons
other than voluntary resignation or non-payment of
regular union dues. Separation under the Section is
understood to be for cause, consequently, the
dismissed employee is not entitled to separation
benefits provided under the New Labor Code and in this
AGREEMENT."7
On May 16, 2000, Atty. Proculo P. Fuentes (Atty. Fuentes) sent a
letter to the management of PRI demanding the termination of
employees who allegedly campaigned for, supported and signed
the Petition for Certification Election of the Federation of Free
Workers Union (FFW) during the effectivity of the CBA.
NAMAPRI-SPFL considered said act of campaigning for and
signing the petition for certification election of FFW as an act of
disloyalty and a valid basis for termination for a cause in
accordance with its Constitution and By-Laws, and the terms and
conditions of the CBA, specifically Article II, Sections 6.1 and 6.2
on Union Security Clause.
In a letter dated May 23, 2000, Mr. Pascasio Trugillo requested
the management of PRI to investigate those union members who
signed the Petition for Certification Election of FFW during the
existence of their CBA. NAMAPRI-SPFL, likewise, furnished PRI
with machine copy of the authorization letters dated March 19, 20
and 21, 2000, which contained the names and signatures of
employees.
Acting on the May 16 and May 23, 2000 letters of the NAMAPRI-
SPFL, Atty. Romero A. Boniel issued a memorandum addressed
to the concerned employees to explain in writing within 72 hours
why their employment should not be terminated due to acts of
disloyalty as alleged by their Union.
Within the period from May 26 to June 2, 2000, a number of
employees who were served "explanation memorandum"
submitted their explanation, while some did not.
In a letter dated June 2, 2000, Atty. Boniel endorsed the
explanation letters of the employees to Atty. Fuentes for
evaluation and final disposition in accordance with the CBA.
After evaluation, in a letter dated July 12, 2000, Atty. Fuentes
advised the management of PRI that the Union found the
member's explanations to be unsatisfactory. He reiterated the
demand for termination, but only of 46 member-employees,
including respondents.
On October 16, 2000, PRI served notices of termination for
causes to the 31 out of the 46 employees whom NAMAPRIL-
SPFL sought to be terminated on the ground of "acts of disloyalty"
committed against it when respondents allegedly supported and
signed the Petition for Certification Election of FFW before the
"freedom period" during the effectivity of the CBA. A Notice dated
October 21, 2000 was also served on the Department of Labor
and Employment Office (DOLE), Caraga Region.
Respondents then accused PRI of Unfair Labor Practice
punishable under Article 248 (a), (b), (c), (d) and (e) of the Labor
Code, while Atty. Fuentes and Wilbur T. Fuentes and Pascasio
Trujillo were accused of violating Article 248 (a) and (b) of the
Labor Code.
Respondents alleged that none of them ever withdrew their
membership from NAMAPRI-SPFL or submitted to PRI any union
dues and check-off disauthorizations against NAMAPRI-SPFL.
They claimed that they continue to remain on record as bona
fide members of NAMAPRI-SPFL. They pointed out that a patent
manifestation of ones disloyalty would have been the explicit
resignation or withdrawal of membership from the Union
accompanied by an advice to management to discontinue union
dues and check-off deductions. They insisted that mere affixation
of signature on such authorization to file a petition for certification
election was not per se an act of disloyalty. They claimed that
while it may be true that they signed the said authorization before
the start of the freedom period, the petition of FFW was only filed
with the DOLE on May 18, 2000, or 58 days after the start of the
freedom period.
Respondents maintained that their acts of signing the
authorization signifying support to the filing of a Petition for
Certification Election of FFW was merely prompted by their desire
to have a certification election among the rank-and-file employees
of PRI with hopes of a CBA negotiation in due time; and not to
cause the downfall of NAMAPRI-SPFL.
Furthermore, respondents contended that there was lack of
procedural due process. Both the letter dated May 16, 2000 of
Atty. Fuentes and the follow-up letter dated May 23, 2000 of
Trujillo addressed to PRI did not mention their names.
Respondents stressed that NAMAPRI-SPFL merely requested
PRI to investigate union members who supported the Petition for
Certification Election of FFW. Respondents claimed that they
should have been summoned individually, confronted with the
accusation and investigated accordingly and from where the
Union may base its findings of disloyalty and, thereafter,
recommend to management the termination for causes.1avvphi1
Respondents, likewise, argued that at the time NAMAPRI-SPFL
demanded their termination, it was no longer the bargaining
representative of the rank-and-file workers of PRI, because the
CBA had already expired on May 22, 2000. Hence, there could be
no justification in PRIs act of dismissing respondents due to acts
of disloyalty.
Respondents asserted that the act of PRI, Wilfredo Fuentes and
Atty. Boniel in giving in to the wishes of the Union in discharging
them on the ground of disloyalty to the Union amounted to
interference with, restraint or coercion of respondents exercise of
their right to self-organization. The act indirectly required
petitioners to support and maintain their membership with
NAMAPRI-SPFL as a condition for their continued employment.
The acts of NAMAPRI-SPFL, Atty. Fuentes and Trujillo amounted
to actual restraint and coercion of the petitioners in the exercise of
their rights to self-organization and constituted acts of unfair labor
practice.
In a Decision8 dated March 16, 2001, the Labor Arbiter declared
the respondents dismissal to be illegal and ordered PRI to
reinstate respondents to their former or equivalent positions
without loss of seniority rights and to jointly and solidarily pay their
backwages. The dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby entered:
1. Declaring complainants dismissal illegal; and
2. Ordering respondents Picop Resources Inc. (PRI)
and NAMAPRI-SPFL to reinstate complainants to their
former or equivalent positions without loss of seniority
rights and to jointly and solidarily pay their backwages
in the total amount of 420,339.30 as shown in the said
Annex "A" plus damages in the amount of 10,000.00
each, or a total of 210,000.00 and attorneys fees
equivalent to 10% of the total monetary award.
SO ORDERED.9
PRI and NAMAPRI-SPFL appealed to the National Labor
Relations Commission (NLRC), which reversed the decision of
the Labor Arbiter; thus, declaring the dismissal of respondents
from employment as legal.
Respondents filed a motion for reconsideration, but it was denied
on April 29, 2001 for lack of merit.
Unsatisfied, respondents filed a petition for certiorari under Rule
65 before the Court of Appeals and sought the nullification of the
Resolution of the NLRC dated October 8, 2001 which reversed
the Decision dated March 16. 2001 of Labor Arbiter and the
Resolution dated April 29, 2002, which denied respondents
motion for reconsideration.
On July 25, 2003, the Court of Appeals reversed and set aside
the assailed Resolutions of the NLRC and reinstated the Decision
dated March 16, 2001 of the Labor Arbiter.
Thus, before this Court, PRI, as petitioner, raised the following
issues:
I
WHETHER AN EXISTING COLLECTIVELY (sic) BARGAINING
AGREEMENT (CBA) CAN BE GIVEN ITS FULL FORCE AND
EFFECT IN ALL ITS TERMS AND CONDITION INCLUDING ITS
UNION SECURITY CLAUSE, EVEN BEYOND THE 5-YEAR
PERIOD WHEN NO NEW CBA HAS YET BEEN ENTERED
INTO.
II
WHETHER OR NOT AN HONEST ERROR IN THE
INTERPRETATION AND/OR CONCLUSION OF LAW FALL
WITHIN THE AMBIT OF THE EXTRAORDINARY REMEDY OF
CERTIORARI UNDER RULE 65, REVISED RULES OF
COURT.10
We will first delve on the technical issue raised.
PRI perceived a patent error in the mode of appeal elected by
respondents for the purpose of assailing the decision of the
NLRC. It claimed that assuming that the NLRC erred in its
judgment on the legal issues, its error, if any, is not tantamount to
abuse of discretion falling within the ambit of Rule 65.
Petitioner is mistaken.
The power of the Court of Appeals to review NLRC decisions via
Rule 65 or Petition for Certiorari has been settled as early as in
our decision in St. Martin Funeral Home v. National Labor
Relations Commission.11 This Court held that the proper vehicle
for such review was a Special Civil Action for Certiorari under
Rule 65 of the Rules of Court, and that this action should be filed
in the Court of Appeals in strict observance of the doctrine of the
hierarchy of courts.12 Moreover, it is already settled that under
Section 9 of Batas Pambansa Blg. 129, as amended by Republic
Act No. 7902[10] (An Act Expanding the Jurisdiction of the Court
of Appeals, amending for the purpose of Section Nine of Batas
Pambansa Blg. 129 as amended, known as the Judiciary
Reorganization Act of 1980), the Court of Appeals pursuant to
the exercise of its original jurisdiction over Petitions
for Certiorari is specifically given the power to pass upon the
evidence, if and when necessary, to resolve factual issues. 13
We now come to the main issue of whether there was just cause
to terminate the employment of respondents.
PRI argued that the dismissal of the respondents was valid and
legal. It claimed to have acted in good faith at the instance of the
incumbent union pursuant to the Union Security Clause of the
CBA.
14
Citing Article 253 of the Labor Code, PRI contends that as
parties to the CBA, they are enjoined to keep thestatus quo and
continue in full force and effect the terms and conditions of the
existing CBA during the 60-day period and/or until a new
agreement is reached by the parties.
Petitioner's argument is untenable.
"Union security" is a generic term, which is applied to and
comprehends "closed shop," "union shop," "maintenance of
membership," or any other form of agreement which imposes
upon employees the obligation to acquire or retain union
membership as a condition affecting employment. There is union
shop when all new regular employees are required to join the
union within a certain period as a condition for their continued
employment. There is maintenance of membership shop when
employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain
union membership as a condition for continued employment until
they are promoted or transferred out of the bargaining unit, or the
agreement is terminated. A closed shop, on the other hand, may
be defined as an enterprise in which, by agreement between the
employer and his employees or their representatives, no person
may be employed in any or certain agreed departments of the
enterprise unless he or she is, becomes, and, for the duration of
the agreement, remains a member in good standing of a union
entirely comprised of or of which the employees in interest are a
part.15
However, in terminating the employment of an employee by
enforcing the union security clause, the employer needs to
determine and prove that: (1) the union security clause is
applicable; (2) the union is requesting for the enforcement of the
union security provision in the CBA; and (3) there is sufficient
evidence to support the decision of the union to expel the
employee from the union. These requisites constitute just cause
for terminating an employee based on the union security provision
of the CBA.16
As to the first requisite, there is no question that the CBA between
PRI and respondents included a union security clause,
specifically, a maintenance of membership as stipulated in
Sections 6 of Article II, Union Security and Check-Off. Following
the same provision, PRI, upon written request from the Union, can
indeed terminate the employment of the employee who failed to
maintain its good standing as a union member.
Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two
(2) occasions demanded from PRI, in their letters dated May 16
and 23, 2000, to terminate the employment of respondents due to
their acts of disloyalty to the Union.
However, as to the third requisite, we find that there is no
sufficient evidence to support the decision of PRI to terminate the
employment of the respondents.
PRI alleged that respondents were terminated from employment
based on the alleged acts of disloyalty they committed when they
signed an authorization for the Federation of Free Workers (FFW)
to file a Petition for Certification Election among all rank-and-file
employees of PRI. It contends that the acts of respondents are a
violation of the Union Security Clause, as provided in their
Collective Bargaining Agreement.
We are unconvinced.
We are in consonance with the Court of Appeals when it held that
the mere signing of the authorization in support of the Petition for
Certification Election of FFW on March 19, 20 and 21, or before
the "freedom period," is not sufficient ground to terminate the
employment of respondents inasmuch as the petition itself was
actually filed during the freedom period. Nothing in the records
would show that respondents failed to maintain their membership
in good standing in the Union. Respondents did not resign or
withdraw their membership from the Union to which they belong.
Respondents continued to pay their union dues and never joined
the FFW.
Significantly, petitioner's act of dismissing respondents stemmed
from the latter's act of signing an authorization letter to file a
petition for certification election as they signed it outside the
freedom period. However, we are constrained to believe that an
"authorization letter to file a petition for certification election" is
different from an actual "Petition for Certification Election."
Likewise, as per records, it was clear that the actual Petition for
Certification Election of FFW was filed only on May 18,
2000.17 Thus, it was within the ambit of the freedom period which
commenced from March 21, 2000 until May 21, 2000. Strictly
speaking, what is prohibited is the filing of a petition for
certification election outside the 60-day freedom period.18 This is
not the situation in this case. If at all, the signing of the
authorization to file a certification election was merely preparatory
to the filing of the petition for certification election, or an exercise
of respondents right to self-organization.
Moreover, PRI anchored their decision to terminate respondents
employment on Article 253 of the Labor Code which states that "it
shall be the duty of both parties to keep the status quo and
to continue in full force and effect the terms and conditions
of the existing agreement during the 60-day period and/or
until a new agreement is reached by the parties." It claimed
that they are still bound by the Union Security Clause of the CBA
even after the expiration of the CBA; hence, the need to terminate
the employment of respondents.
Petitioner's reliance on Article 253 is misplaced.
The provision of Article 256 of the Labor Code is particularly
enlightening. It reads:
Article 256. Representation issue in organized establishments. -
In organized establishments, when a verified petition questioning
the majority status of the incumbent bargaining agent is filed
before the Department of Labor and Employment within the sixty-
day period before the expiration of a collective bargaining
agreement, the Med-Arbiter shall automatically order an election
by secret ballot when the verified petition is supported by the
written consent of at least twenty-five percent (25%) of all the
employees in the bargaining unit to ascertain the will of the
employees in the appropriate bargaining unit. 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 cast shall be certified as the exclusive bargaining
agent of all the workers in the unit. When an election which
provides for three or more choices results in no choice receiving a
majority of the valid votes cast, a run-off election shall be
conducted between the labor unions receiving the two highest
number of votes: Provided, That the total number of votes for all
contending unions is at least fifty per cent (50%) of the number of
votes cast.
At the expiration of the freedom period, the employer shall
continue to recognize the majority status of the incumbent
bargaining agent where no petition for certification election
is filed.19
Applying the same provision, it can be said that while it is
incumbent for the employer to continue to recognize the majority
status of the incumbent bargaining agent even after the expiration
of the freedom period, they could only do so when no petition for
certification election was filed. The reason is, with a pending
petition for certification, any such agreement entered into by
management with a labor organization is fraught with the risk that
such a labor union may not be chosen thereafter as the collective
bargaining representative.20 The provision for statusquo is
conditioned on the fact that no certification election was filed
during the freedom period. Any other view would render nugatory
the clear statutory policy to favor certification election as the
means of ascertaining the true expression of the will of the
workers as to which labor organization would represent them. 21
In the instant case, four (4) petitions were filed as early as May
12, 2000. In fact, a petition for certification election was already
ordered by the Med-Arbiter of DOLE Caraga Region on August
23, 2000.22 Therefore, following Article 256, at the expiration of
the freedom period, PRI's obligation to recognize NAMAPRI-
SPFL as the incumbent bargaining agent does not hold true when
petitions for certification election were filed, as in this case.
Moreover, the last sentence of Article 253 which provides for
automatic renewal pertains only to the economic provisions of the
CBA, and does not include representational aspect of the CBA.
An existing CBA cannot constitute a bar to a filing of a petition for
certification election. When there is a representational issue,
the statusquo provision in so far as the need to await the creation
of a new agreement will not apply. Otherwise, it will create an
absurd situation where the union members will be forced to
maintain membership by virtue of the union security clause
existing under the CBA and, thereafter, support another union
when filing a petition for certification election. If we apply it, there
will always be an issue of disloyalty whenever the employees
exercise their right to self-organization. The holding of a
certification election is a statutory policy that should not be
circumvented,23 or compromised.1avvphi
Time and again, we have ruled that we adhere to the policy of
enhancing the welfare of the workers. Their freedom to choose
who should be their bargaining representative is of paramount
importance. The fact that there already exists a bargaining
representative in the unit concerned is of no moment as long as
the petition for certification election was filed within the freedom
period. What is imperative is that by such a petition for
certification election the employees are given the opportunity to
make known of who shall have the right to represent them
thereafter. Not only some, but all of them should have the right to
do so. What is equally important is that everyone be given a
democratic space in the bargaining unit concerned. 24
We will emphasize anew that the power to dismiss is a normal
prerogative of the employer. This, however, is not without
limitations. The employer is bound to exercise caution in
terminating the services of his employees especially so when it is
made upon the request of a labor union pursuant to the Collective
Bargaining Agreement. Dismissals must not be arbitrary and
capricious. Due process must be observed in dismissing an
employee, because it affects not only his position but also his
means of livelihood. Employers should, therefore, respect and
protect the rights of their employees, which include the right to
labor.25
An employee who is illegally dismissed is entitled to the twin
reliefs of full backwages and reinstatement. If reinstatement is not
viable, separation pay is awarded to the employee. In awarding
separation pay to an illegally dismissed employee, in lieu of
reinstatement, the amount to be awarded shall be equivalent to
one month salary for every year of service. Under Republic Act
No. 6715, employees who are illegally dismissed are entitled to
full backwages, inclusive of allowances and other benefits, or their
monetary equivalent, computed from the time their actual
compensation was withheld from them up to the time of their
actual reinstatement. But if reinstatement is no longer possible,
the backwages shall be computed from the time of their illegal
termination up to the finality of the decision. Moreover,
respondents, having been compelled to litigate in order to seek
redress for their illegal dismissal, are entitled to the award of
attorneys fees equivalent to 10% of the total monetary award.26
WHEREFORE, the petition is DENIED. The Decision dated July
25, 2003 and the Resolution dated October 23, 2003 of the Court
of Appeals in CA-G.R. SP No. 71760, which set aside the
Resolutions dated October 8, 2001 and April 29, 2002 of the
National Labor Relations Commission in NLRC CA No. M-
006309-2001, are AFFIRMED accordingly. Respondents are
hereby awarded full backwages and other allowances, without
qualifications and diminutions, computed from the time they were
illegally dismissed up to the time they are actually reinstated. Let
this case be remanded to the Labor Arbiter for proper
computation of the full backwages due respondents, in
accordance with Article 279 of the Labor Code, as expeditiously
as possible.
SO ORDERED